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                                   FORM 10-KSB
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

(Mark One)

[X]   ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 2001 OR

[_]   TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
      OF 1934 FOR THE TRANSITION PERIOD FROM ______________ TO ______________

                       Commission file number: 000-28179
                       ---------------------------------

                            ABLEAUCTIONS.COM, INC.
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             (Exact name of small business issuer in its charter)

<TABLE>
<S>                                                 <C>
                     Florida                                   Not applicable
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(State or other jurisdiction of incorporation or    (I.R.S. Employer Identification No.)
                  organization)
</TABLE>

             1963 Lougheed Highway
      Coquitlam, British Columbia Canada                          V3K 3T8
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   (Address of principal executive offices)                      (Zip Code)

                   Issuer's telephone number: (604) 521-2253

        Securities Registered Under Section 12(b) of the Exchange Act:
                                     None
                                     ----

        Securities Registered Under Section 12(g) of the Exchange Act:
                        Common Stock, $0.001 par value
                        ------------------------------
                               (Title of class)

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

Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure will be contained, to
the best of 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. [X]

State issuer's revenues for most recent fiscal year:  $10,793,219

State the aggregate market value of the voting and non-voting common equity held
by non-affiliates based on the average bid and asked price as of April 17, 2002
being $0.65 per share: $16,332,563.

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: 25,127,020 shares of Common Stock as
of April 17, 2002.

Documents Incorporated by Reference: Portions of issuer's Proxy Statement
relating to its 2002 Annual Meeting of Shareholders to be filed on Schedule 14A
is incorporated by reference into Part III of this Form 10-KSB

Transitional Small Business Format.   Yes [_]   No [X]
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                   NOTE REGARDING FORWARD LOOKING STATEMENTS

Certain information contained herein constitutes "forward-looking statements,"
including without limitation statements containing the words "believes,"
"anticipates," "intends," "expects" and words of similar import, as well as all
projections of future results of operations or earnings. Such forward-looking
statements involve known and unknown risks, uncertainties and other factors
which may cause the actual results or achievements of the Registrant to be
materially different from any future results or achievements expressed or
implied by such forward-looking statements. Such factors include, but are not
limited to, the following: risks related to political and economic
uncertainties; risks related to the Registrant's acquisition strategy and its
ability to integrate acquired businesses into its operations; risks involved in
implementing a new business strategy; the Registrant's ability to obtain
financing on acceptable terms; competition in the auction industry; market
acceptance of live auction broadcasts on the Internet; the Registrant's ability
to manage growth and integrate the operations of acquired auction houses; risks
of technological change; the Registrant's dependence on key personnel; the
Registrant's dependence on marketing relationships with auction houses and third
party suppliers; the Registrant's ability to protect its intellectual property
rights; government regulation of Internet commerce and the auction industry;
economic factors affecting the sales of auction merchandise; dependence on
continued growth in use of the Internet; risks of technological change; capacity
and systems disruptions; uncertainty regarding infringing intellectual property
rights of others and the other risks and uncertainties described in this report.

PART I

Item 1.   Description of Business

Overview

We were incorporated under the laws of the state of Florida as J. B. Financial
Services, Inc. on September 30, 1996. We changed our name to Ableauctions.com,
Inc. on July 19, 1999. From the date of our incorporation until August 24, 1999,
we had no material business and no material revenues, expenses, assets or
liabilities.

Our shares began trading on the OTC Bulletin Board under the symbol "ABLC" on
July 21, 1999.

On August 24, 1999, in consideration of shares of our common stock and cash, we
acquired all of the assets and the business operations of Able Auctions (1991)
Ltd., a British Columbia corporation engaged in the business of auctioning used
equipment, office furnishings and equipment, and other merchandise, by acquiring
all of its issued and outstanding common shares from Dexton Technologies
Corporation, a British Columbia corporation.

Our primary business activity is as a business-to-business and consumer
auctioneer. We are an early stage company and we have developed our business
through the acquisition of auction houses in the United States, Canada and
England. We conduct our auctions live and simultaneously broadcast approximately
20% of our auctions over the Internet. Generally, we acquire the merchandise we
auction through bankruptcies, insolvencies and defaults.
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We auction merchandise and equipment from a variety of industries including
antique, automotive, bakery, broadcasting, chemical, construction, dairy,
electronics, energy, food processing, foundry, furniture, high-technology,
machine tool, metal fabrication, office, paper, pharmaceutical, plastic,
printing, restaurant, textile, and others. Our auctions are open to the public.
Our typical auction draws approximately 300 to 500 bidders in person and offers
on average approximately 1,200 items or lots of merchandise and equipment for
auction. We receive revenues from auction fees charged to consignees who consign
merchandise to be sold and from the buyer's premiums charged to purchasers of
the merchandise. We also receive revenues from auctioning merchandise that we
purchase and sell at our auctions.

We conduct the majority of our auctions on an unreserved basis with no minimum
prices, resulting in each and every item being sold to the highest bidder on the
day of the auction. Our policy is to prohibit consignees from bidding on the
items that they consign to us for auction. We attempt to differentiate our
auction services from our competitors through our "no minimum price policy" and
by selling merchandise without interference or competition from consignees.

After an auction, purchasers generally make their own arrangements to take
possession of the auctioned property. If purchasers make arrangements with us,
we can make available shipping services to forward the property to the buyer by
mail freight forwarder, truck transport, or other delivery services for a cost.
As agent of the consignor, we normally collect payment from the buyer for
property purchased and remit to the consignor, on the settlement date, the
consignor's portion of the buyer's payment, less consignor cash advances, if
any, and commissions payable to us. We sometimes release property sold at
auction to qualified buyers (primarily dealers) on credit before we receive
payment. These qualified buyers generally have an account or line of credit
(within established credit limits) with us and agree to make payment within 30
days. We extend credit only to buyers who have done business with us in the past
and have an established credit standing with us.

Our business is not seasonal and is not dependent upon a single customer or a
few customers.

Our business plan is to expand the geographic scope of our auction business
through the following:

     .    increasing the geographic reach of our existing auction business by
          building an Internet e-commerce site over which we will eventually
          broadcast all of our auctions;

     .    expanding our auction business and operations by acquiring existing
          brick-and-mortar auction houses in strategic geographic locations
          primarily in North America;

     .    entering into strategic relationships with other brick-and-mortar
          auction houses to broadcast their auctions live on our web site for a
          transaction fee; and

     .    generating revenues from silent auctions, charity auctions, and
          specialty e-commerce stores on our web site.
<PAGE>

During the year 2000 we began to implement our business plan by acquiring other
existing brick-and-mortar auction companies. In February 2000, we acquired the
assets and hired the founder of Falcon Trading, a small regional auction company
located in Redmond, Washington. In March 2000, we acquired the assets of
Mesler's Auction House, an auction house located in Scottsdale, Arizona, along
with related real estate and a 50,000 square foot building. In May 2000, we
acquired the assets of Auctions West Sales Corporation, a liquidator of the
assets of bankrupt persons or businesses located in Vancouver, British Columbia,
Canada. Also in May 2000 we acquired Ehli's Commercial/Industrial Auctions,
Inc., an auction house located in Tacoma, Washington. In July 2000, we acquired
Johnston's Surplus Office Supplies Ltd., located in Vancouver, British Columbia.
In September 2001, we acquired iCollector PLC located in England. Our
acquisitions have primarily been structured as stock transactions.

In addition to acquiring regional auction houses, our strategy to increase the
gross revenues and profitability of our existing auction operations is to expand
the scope of our auction audience through the capabilities of the Internet. We
believe that the growth of the Internet has facilitated the development of
solutions to some of the traditional problems we face in operating our auction
business, including reaching potential buyers of merchandise and equipment in
other geographic locations, increasing the size of bidding audiences for our
auctions, reaching more potential consignees of merchandise, and automating our
auction preview process. Our goal is to expand our operations by linking
regional auction houses together through our web site. We believe this will
allow us to generate a greater volume of traffic and interest to our web site
and sales through our auctions. Once we link all of our physical auction sites
through our Ableauctions.com web site, we anticipate that, eventually, each
venue will broadcast its auctions live on our web site.

We broadcasted our first live auction on our web site in January 2000. We
currently broadcast more than 20% of our auctions over the Internet using
software we developed. In auctions that we broadcast, our physical
"brick-and-mortar" auction audiences are integrated with our web-based online
auction audiences, so that our online customers are able to bid on and buy
merchandise at our live auctions. During the fourth quarter of 2001, we realized
a higher average selling price of items sold during broadcasted auctions, which
we believe is due to the increased number of bidders participating through the
Internet.

Industry Background

The Commercial Auction Industry

Based on our discussions with operators of auction houses and our experience in
the industry, we believe that most brick-and-mortar based auctions are regional,
owner-operated businesses. Each auction house must make significant investments
in real estate, personnel, inventory, and marketing for each location. Most
traditional auction houses obtain their inventory locally and must contend with
the logistical problems of matching supplies of available merchandise to
unpredictable demand.
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The Internet Auction Industry

The Internet has become an increasingly significant global interactive medium
for communications, information, and commerce. Use of the Internet for business
purposes has continued to grow over the past several years. According to a 1999
study by Deloitte Consulting, approximately 60% of all businesses conduct
business through the Internet. The study also indicated that approximately 88%
of the businesses surveyed stated that their business plans and strategies
included conducting a significant amount of business over the Internet. Deloitte
Consulting's survey also indicated that 90% of the respondents confirmed that
eProcurement was part of their business strategy. eProcurement is the process of
securing and sourcing products over the Internet by developing supplier
relationships and improving purchasing effectiveness. The survey respondents
indicated that 28% of the transactions in their eProcurement strategy were
fulfilled through online auctions.

Management believes that online auctions are a fast growing area of electronic
commerce. According to a January 1999 survey by Jupiter Communications, the
number of people in the United States participating in online auctions will grow
from 1.2 million in 1998 to 6.5 million in 2002. Jupiter Communications
estimates that auction buyers are projected to represent 11% of the total online
shopping population in 2002. Forrester Research estimates that the total value
of online auctions will grow from $1.4 billion in 1998 to $19 billion in 2003.

Person-to-person auctions, like those conducted on eBay.com, uBid.com, and
Amazon.com, currently dominate the market. However, Jupiter Communications has
predicted that by 2003, business-to-consumer sales will comprise approximately
66% of total Internet auction sales, representing approximately $13 billion.

There are five models of online auctions:

     .    Event-based live auctions: Bidders participate in live auctions
          transmitted over the Internet in real-time. Users register to qualify
          as bidders to participate before the time of the auction and bid for
          merchandise auctioned at physical auctions. Online bidders typically
          bid against bidders present at the physical auctions.

     .    Business-to-consumer: Businesses or consumers bid on products that are
          listed on an auction's web site within a set time limit. The auctioned
          merchandise is sold to the highest bidder.

     .    Consumer-to-consumer auctions: Sellers post merchandise on the web
          site in one of several categories. Hundreds of thousands of items, at
          all price ranges, are listed and bidders haggle directly with sellers
          to purchase the merchandise.

     .    Specialty auctions: Sellers offer specific types of merchandise for
          auction on specialty online auctions that serve eclectic collectors or
          consumers interested in a special product niche.

     .    Business-to-business: Businesses offer merchandise for auction to
          other businesses, including items for liquidation, salvaged
          merchandise, excess inventory,
<PAGE>

          distressed inventory, and other items offered in large lots of several
          hundred items.

Competition

We believe that the principal competitive factors in the auction market are:

     .    reputation;

     .    customer service;

     .    the ability to provide a variety of merchandise at an exceptional
          value; and

     .    the ability to attract the bidders necessary to generate the best
          possible prices.

We compete with a number of companies with substantially greater financial,
technical, and human resources than ours. Our competitors include large and
small auction companies, dealers, and retailers, including discount retail
stores, liquidation centers, and other retailers of new and previously owned
merchandise.

The used equipment and the industrial equipment auction markets are highly
fragmented. The major auctioneers in these markets include Michael Fox
International, an international auctioneer of industrial equipment and real
estate, Ritchie Bros. Auctioneers, an international auctioneer of industrial
equipment and Maynard's Auctioneers, an auctioneer and liquidator of household
items, antiques, and commercial goods. We also compete with a number of smaller
independent auctioneers as well as with equipment manufacturers, distributors,
new or used equipment dealers, and equipment rental companies seeking to sell
unwanted merchandise.

The Internet auction industry is new, rapidly evolving, and intensely
competitive, and we expect competition to intensify in the future. A variety of
auction web sites are presently available on the Internet that are dedicated to
facilitating person-to-person and business-to-person transactions on a bid-based
format. These auction services allow sellers to post merchandise on their web
sites and buyers to locate items and submit bids online. These services
generally organize merchandise by categories and provide descriptions, pictures,
or video clips of merchandise offered for sale.

We believe that the market leader in broadcasting live auctions over the
Internet is Livebid.com. Livebid.com is a Seattle-based company that pioneered
live, event-based auctions on the Internet. Livebid.com uses real-time software
technology that allows auction houses to broadcast their auctions live over the
Internet and online bidders to bid on merchandise and participate in the live
auctions. LiveBid.com enables bidders to review auction catalogues and place
proxy bids before an event.

Additionally, several auctioneers have launched web sites that allow buyers to
search for and bid on merchandise contained within the seller's inventory.
Buyers search for the merchandise by visiting the web site and purchase directly
from the auctioneer.
<PAGE>

Our silent auction will compete directly with online auction services such as
iCollector, Leftbid, Onsale, uBid, eBay, Yahoo!, Excite, Inc., and a number of
other auction based services. We potentially face competition from a number of
large online communities and services that have expertise in developing online
commerce and in facilitating online business-to-person interaction, including
AOL, Lycos, Inc., and Microsoft Corporation.

We believe that the following features may allow us to differentiate our web
site from the web sites of our competitors:

     .    Live Broadcast. We broadcast live auctions from physical auction sites
          over the Internet in real time, which allow visitors to our web site
          to compete against bidders attending the live auction.

     .    Quality Sound and Video. We are developing technology that will
          provide quality video and sound to visitors and that will allow
          bidders to respond immediately to the auctioneer's calls.

     .    Commercial Goods. We intend to broadcast some live auctions that
          feature merchandise and equipment targeted at business or commercial
          buyers.

     .    Consumer Goods. We also intend to broadcast live auctions targeted at
          consumers featuring merchandise such as antiques, collectibles,
          furniture, household items, and other consumer goods.

     .    Silent and Charity Auction. We anticipate that our web site will
          feature a silent auction and a charity auction that lists items for
          auction that will be sold to the highest bidder.

We believe that potential bidders will save time and effort by previewing
merchandise in advance of an auction using video and sound clips posted on our
web site.

We believe that our "no minimum price" policy coupled with broadcasting our
auctions live on the Internet through our web site will result in a greater
volume of consigned equipment and higher gross auction sales.

Our Auction Operations

We conduct physical auctions from our auction houses located in British
Columbia, the states of Washington, California and Arizona.

Our operations in the United States include:

Auction House or Other Business         Location
-------------------------------         --------

Ehli's Auctions                         Tacoma, Washington
Ableauctions (California)               San Mateo, California
Ableauctions (Arizona)                  Scottsdale, Arizona
<PAGE>

Our operations in Canada include:

Able Auctions (1991) Ltd.               Surrey and Coquitlam, British Columbia
Jarvis Auctions                         Vancouver, British Columbia
iCollector International Ltd.           Vancouver, British Columbia

Approximately 62% of our annual revenues are derived from our Canadian
operations and approximately 38% of our annual revenues are derived from our
United States operations. Currently we hold approximately 18 auctions per month;
approximately 8 of these auctions are held in the United States and the
remaining 10 auctions are held in Canada.

We auction up to approximately 1,200 items or lots at each auction. We receive
revenues from auction fees charged to consignees who consign merchandise to be
sold and from the buyer's premiums charged to purchasers of the merchandise. In
auctions of consigned goods, we received gross revenues from commissions and
fees of approximately $80,000 from a typical auction during 1999, and of
approximately $100,000 during each of 2000 and 2001.

The costs involved in conducting a typical auction, which average approximately
$45,000, include, among other things, the costs of catalogues, insurance,
transportation, auction advertising, auction site rental fees, security,
temporary personnel and expenses of certain additional auction-related
accounting and shipping functions. In general, we charge purchasers a buyer's
premium on auction purchases equal to 10% to 15% of the hammer price of the
property and sellers a commission ranging from 5% to 25% of the hammer price.

Like most auctioneers, we do not provide any guarantee or warranty with respect
to the property offered for sale at auction except as noted in our terms and
conditions of sale for particular auctions. We generally auction each lot as
described in our auction catalogue or on an "as is" basis.

Under the standard terms and conditions of our auction sales, we are not
obligated to pay the consignor of the property if the purchase price for the
property has not been paid by the buyer. In these instances, we will hold
auctioned property until we receive payment from the buyer. If the buyer
defaults on payment, we may cancel the sale and return the property to the
owner, re-offer the property at another auction, or contact other bidders to
negotiate a private sale.

Frequently, an owner consigning property to us will request a cash advance when
the property is delivered to us and before its ultimate sale at auction or
otherwise. The cash advance is in the form of a self-liquidating secured loan,
using the consigned property as collateral. We are a secured party with respect
to the collateral, hold a security interest in the collateral, and maintain
possession of the collateral until it is sold.

We sometimes offer potential consignors the option to sell their property to us
for an amount determined by our appraisers. In an outright purchase, we
establish a price that we are willing to
<PAGE>

pay for the property and, if the price is acceptable to the seller or if a price
can be negotiated between us and the seller, we typically pay the purchase price
in full and take possession of the property immediately. We will generally sell
this property at auction with other property or, if the purchase is large, at an
auction of the purchased property.

In auctions where we own the auction merchandise, we receive all of the proceeds
from the sale of the merchandise and related commissions and fees. Our gross
profit from sales of our own merchandise is between 16% and 40%. During 1999 we
had revenues of $829,755 from the sale of our merchandise, $8,607,230 for the
year ended December 31, 2000 and $6,653,656 for the year ended December 31,
2001.

Unlike sales of consigned property at auction, when selling our own inventory we
earn a profit or incur a loss on the sale of inventory to the extent the
purchase price exceeds or is less than the purchase price we paid for the
inventory. Generally, we provide for the sale of portions of our inventory at
public auctions. Occasionally, we may sell inventory to a customer directly
without placing the inventory for sale at auction. Our goal is to sell all of
our inventory as quickly and as efficiently as possible in order to achieve a
high level of inventory turnover and maintain maximum liquidity.

We also generate revenues by purchasing merchandise from a variety of sources
and re-selling it at our auctions. We purchase merchandise below normal
wholesale prices as a result of liquidation, generally from bankruptcy or
overproduction by manufacturers. In some cases, we purchase used equipment, such
as office equipment from bankrupt companies, closing businesses, or merging
companies. We normally average over 50% gross margin on sales, before fixed
expenses, on the sale of liquidated merchandise.

Our Web Site

We launched our web site for public viewing in September 1999 and have refined
our technology to broadcast live auctions over the Internet. We broadcasted our
first live auction in January 2000. We currently broadcast more than 20% of our
live auctions on the Internet.

Our web site is designed to integrate the traditional physical brick-and-mortar
auction with electronic commerce by offering bidders with Internet access the
ability to bid at our larger auctions. We believe our system will increase the
size of our auction audiences, lower our overall transaction costs, and increase
interest in our brick-and-mortar auction houses and events.

We anticipate that our web site will be attractive to business purchasers
looking for difficult-to-find equipment, fixtures, office equipment, furniture
and similar merchandise and to consumers looking for jewelry, consumer
electronics, tools, collectibles, cameras and musical instruments. We believe
that offering previews of our merchandise over the Internet will save our
visitors time and increase the number of serious bidders participating in our
auctions. We do not intend to offer or auction firearms, adult materials, or
other potentially illegal merchandise on our web site.
<PAGE>

Live Auctions

Our live auction feature is designed to allow us to broadcast our auctions live
by video over the Internet. Viewers will be able to conveniently preview items
in advance from their homes or offices and bid on merchandise live as the
auction is being conducted. Currently, we post auction previews that allow
visitors to view pictures of certain merchandise prior to the auction. The users
will also have the option to submit a bid on an item before it goes to auction.

Our live auctions typically draw an average of 300 to 500 people in person, and
auctions broadcasted on the Internet typically draw an average of 300 to 500
registered bidders.

During live auctions, virtual viewers are able to see the auction in progress
and follow the lots of merchandise as they are being sold. A picture of each
item and the current bid is posted. Internet users are able to bid
simultaneously with those attending in person and update bids at their
convenience. We post bids received from the Internet on large screen monitors.
Unlike eBay, Bid.com, or other web sites, we offer almost every item on an
unreserved basis, meaning there is no minimum bid for the merchandise we
auction. Every item we auction is physically present at the time of the auction
and sold to the highest bidder.

Silent Auctions

Our silent auctions will allow us to conduct auctions similar to those conducted
by eBay, Amazon.com, and Bid.com. We intend to continuously run an auction that
lists thousands of featured items for sale, each with a digital picture. We
intend to offer items from our inventory and from inventories we acquire from
bankruptcies, mergers, acquisitions, insolvencies, and expired leases.

Unlike our competitors, our current strategy is to offer only merchandise that
we own in our silent auction. This will affect the number of items available for
sale on our web site and we may not have a sufficient inventory to attract
visitors to our web site. In the future, we may accept consignments to increase
our silent auction offerings, but currently have no plans to do so.

Charity Auctions

Our charity auctions allow registered non-profit organizations to raise funds
and awareness of their charities through auctions hosted on our web site. We
charge commissions ranging from 10% for hosting an auction, to 25% for
fully-organized fundraisers. Charity auctions may offer merchandise such as
automobiles, vacation packages, and event passes to the highest bidder. During
2000 and 2001, we were involved in approximately seven charity auctions.

Research and Development

Our research and development program consists of developing technologies related
to our web site and the systems required to broadcast live auctions over the
Internet. We spent $526,787 as of December 31, 1999 and approximately $2,000,000
as of December 31, 2000 on expenses
<PAGE>

related to research and development, including consulting fees, technical fees,
development of our data base management technologies, research and development
of our graphic and video broadcasting technologies, systems design and testing,
and other technological aspects of our web site.

Due to budgetary constraints, during 2001 the Company did not undertake any
significant Internet research and development. We will continue developing
technologies related to our web site when we are able to obtain financing or if
we generate sufficient cash flows from operations.

History of Our Acquisitions

Effective September 20, 1999, we hired all of the employees and acquired all of
the business assets of Ross Auctioneers & Appraisers Ltd., a British Columbia
based auction company, for 60,000 shares of our common stock with a fair market
value of approximately $175,000.

Effective February 29, 2000, we hired the founder, Harlan Moore, and acquired
all of the business assets of Falcon Trading, Inc., a Washington based auction
company, for 53,405 shares of our common stock with a fair market value of
approximately $360,804.

Effective March 20, 2000, we acquired the business assets of Mesler's Auction
House of Scottsdale, L.L.C., and real estate and a building from C&C Capital
Investment, Inc., an affiliate of Mesler's. Mesler's is an Arizona based company
that auctions antiques and other furniture and equipment. We paid $255,000 cash
and issued 30,625 shares of our common stock with a fair market value of
approximately $245,000 for the Mesler's assets. We paid $1,200,000 in cash,
assumed a promissory note with an unpaid balance of $1,056,110.53 and issued
155,486 shares of our common stock with a fair market value of approximately
$1,245,000 for the real property.

Effective May 5, 2000, we hired the founder, Robert Kavanagh, and acquired all
of the business assets of Auctions West Sales Corporation, a British Columbia
based auction company, for 10,000 shares of our common stock with a fair market
value of approximately $70,000.

Effective May 16, 2000, we acquired all of the issued shares of Ehli's
Commercial/Industrial Auctions, Inc., a Tacoma, Washington based liquidator of
automobiles and industrial equipment, from Randy Ehli, the sole shareholder, for
$900,000 cash and 50,000 shares of our common stock with a fair market value of
approximately $350,000.

We acquired Johnston's Surplus Office Supplies Ltd. on July 26, 2000 for
$338,300 (CDN$500,000) in cash and issued 68,182 shares of common stock with a
fair market value of approximately $513,410.

We acquired Jarvis Industries Ltd. for $286,263 (CDN$426,818) on July 31, 2000.
We also acquired Warex Supply Ltd. on July 31, 2000 for $145,672
(CDN$217,196.98) and 6,900 shares of common stock with a fair market value of
approximately $55,200.

On September 27, 2001, the Company acquired all of the issued shares of
iCollector PLC ("iCollector"). The consideration for the acquisition is as
follows:
<PAGE>

     .    The Company issued 4,150,357 shares of its common stock to the
          shareholders of iCollector.

     .    The Company issued non-interest bearing and unsecured promissory notes
          ("deferred consideration notes") in the face amount of $2,988,258,
          which are due to be repaid September 13, 2002. These deferred
          consideration notes are convertible into shares of common stock of the
          Company at $1.43 per share at the sole option of the Company, subject
          to regulatory, listing, and shareholder approval.

     .    The Company issued non-interest bearing and unsecured promissory notes
          ("earnout consideration notes") in the amount of $5,000,000, which are
          payable on September 30, 2002, only if iCollector satisfies certain
          revenue and transaction milestones during the month of July, 2002.
          These earn out consideration notes are convertible into shares of
          common stock of the Company, at the fair market value of such shares
          at the date of conversion, at the sole option of the Company, subject
          to a minimum of 2,000,000 shares and a maximum of 3,500,000 shares in
          the aggregate, as well as regulatory, listing, and shareholder
          approval. The amount of the obligation to the Company in respect to
          the earnout consideration notes, if any, will be recorded at such time
          as the amount of such obligation can be reasonably determined.

The total recorded cost to the Company of the acquisition, including estimated
transaction costs of $342,797, was $8,957,281. The excess of the cost to the
Company over the fair value of the net assets acquired, in the amount of
$8,327,257, was recorded as goodwill.

In November 2001 it was determined that iCollector could not sustain its
operations based on its existing cash resources. iCollector then ceased
operations and a restruturing plan was adopted. In January 2002 iCollector was
placed into formal bankruptcy proceedings pursuant to the laws of the United
Kingdom. In December 2001, and as part of a restructuring program, iCollector
was recreated in Canada as iCollector International Ltd. iCollector's web site
and all of the technology was rebuilt in Canada with the existing services of
iCollector still being made available to the Company's customers.

The investment in iCollector has been written off on the Company's financial
statements for the year ended December 31, 2001 as a failed acquisition.

Our Divestiture of Johnston's Surplus Office Systems Ltd.

Effective March 29, 2001, the Company agreed to dispose of all of its shares of
Johnston's Surplus Office Systems Ltd. ("Surplus"). The Company also agreed to
settle debt owed to the Company by Surplus in the amount of $1,191,724. The debt
was settled by the issuance by Surplus to the Company of 1,191,724 common shares
of Surplus at a deemed price of $1.00 per share. The Company agreed to then sell
all of the issued shares of Surplus to an employee of Surplus, for consideration
of Cdn$600,000 (US$380,500).
<PAGE>

Our Divestiture of Warex Supply Ltd.

Effective August 31, 2001, the Company agreed to dispose of all of its shares of
Warex Supply Ltd. to Murray Jarvis, the former owner of Warex Supply Ltd., as
severance in conjunction with the termination of his employment with the
Company.

Government Regulation

Our brick-and-mortar auction houses are generally subject to extensive
regulation, supervision, and licensing under various federal, state, and local
statutes, ordinances, and regulations. Such laws and regulations may require us
to obtain a license or registration, or post a surety or bond as a precondition
of doing business within the jurisdiction. In addition, applicable laws may
require us to transact business and sell merchandise in accordance with specific
guidelines, including the means by which we obtain our merchandise, advertise
our auctions, conduct our bidding procedures, close transactions, hold client
funds, and other restrictions that may vary from state to state. We cannot
guarantee that we will not be subject to actions arising out of violations by
our brick-and-mortar auction houses. Such actions may have a material adverse
affect on our business and results of operations.

There are currently few laws or regulations that directly apply to access to, or
commerce on, the Internet. It is possible that governing bodies may adopt a
number of laws and regulations governing issues such as user privacy on the
Internet and the pricing, characteristics, and quality of products and services
offered over the Internet. It is also possible that government authorities will
adopt sales or other taxes involving Internet business.

Intellectual Property

We have developed the majority of our software internally. We have taken
measures to protect our intellectual property, ranging from confidentiality and
non-disclosure agreements for contractors and employees to deploying a
trans-modular development schedule where individual modules of software
developed or coded by employees or contractors have no stand-alone benefits
whatsoever until they are integrated with at least three independent modules.

"Ableauctions" and "Ableauctions.com" are our trademarks, which we have
registered under Canadian trademark laws and applied for registration under U.S.
trademark laws, which applications are still in progress.

We have registered the Internet domain names "ableauctions.com" and
"icollector.com".

We use copyright, trademark, service mark, and trade secret laws and contractual
restrictions to protect our proprietary rights. We cannot assure you that the
measures we take to protect intellectual property will prevent misappropriation
of our technology or deter independent third-party development of similar
technologies.
<PAGE>

Employees

As of December 31, 2001 we had a total of 98 staff persons, including 40 full
time employees, 12 consultants and 46 part-time and temporary employees. In
addition to management, we employ auction staff, sales people, administrative
staff, and development and technical personnel. From time to time, we may employ
independent consultants or contractors to support our research and development,
marketing, sales and support, and administrative organizations. No collective
bargaining units represent our employees. We believe our relations with our
employees are good. We expect to hire additional senior management, customer
service management, a database administrator, several software developers,
customer service representatives, technical support representatives and
sales/marketing staff.

Risk Factors

Our business is subject to a number of risks as outlined below. An investment in
our securities is speculative in nature and involves a high degree of risk. You
should read this annual report carefully and consider the following risk
factors:

We have a limited operating history and a history of losses

Before our acquisition of Able Auctions (1991) Ltd., we had no material business
or results of operation. We incurred a net loss of $1,339,492 during 1999,
$11,837,363 during 2000 and $11,434,029 during the year ended December 31, 2001.
We anticipate that we will continue to incur losses at least through fiscal
2002. We do not believe that we will generate sufficient revenues to support our
planned activities in fiscal 2002 because of our projected development and
marketing costs. In the foreseeable future, we believe that these expenses will
increase our net losses, and we cannot assure you that we will ever be
profitable.

As of December 31, 2001, we had current assets of $1,270,295 and current
liabilities of $4,619,612. Our working capital position at December 31, 2001 was
a deficiency of $3,349,317. We anticipate raising additional capital through
sales of our equity and/or debt; however, we cannot assure you that we will be
able to obtain adequate financing to support our planned activities. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations - Liquidity and Capital Resources."

Because of our recent losses, it is difficult to evaluate our business and our
prospects. Our revenue and income potential is unproven and our business model
is still emerging. We cannot assure you that we will attract consignors or
bidders to use our web site or generate significant revenues in the future. We
cannot guarantee that we will ever establish a sizeable market share or achieve
commercial success.
<PAGE>

Our ability to complete acquisitions and to meet our business projections
through December 31, 2002 may depend on our ability to raise additional capital
in the amount of $1 million or more during 2002.

We anticipate that we need to seek additional capital in the amount of $1
million or more in 2002 to meet our operating and capital budget requirements
through December 31, 2002. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations." We cannot assure you that any
additional financing would be available on terms acceptable to us, or at all.
Furthermore, any issuance of additional securities may result in dilution to the
then existing shareholders. If adequate funds are not available, we will lack
sufficient capital to pursue our intended course of action and business strategy
in 2002, which will have a material adverse effect on our ability to meet our
business projections. If we do not complete any additional acquisitions, we
believe we will have sufficient working capital to fund our operations through
December 2002.

Our growth strategy success depends on our ability to acquire additional auction
and liquidation businesses, to market and develop our iCollector business model,
and to integrate these acquisitions and models into our business.

Our business strategy is to grow through acquisitions or strategic affiliations
with auction companies in a number of North American markets. We had acquired
eight auction and liquidation businesses by July 31, 2001. We may acquire
additional auction houses, although we have not publicly announced any plans to
do so. There can be no assurance that our current management, personnel, and
corporate infrastructure will be adequate to manage future growth, if any. The
success of our business strategy depends on making further acquisitions of or
entering into strategic affiliations with auction companies.

We acquired iCollector in September 2001. At that time, iCollector was insolvent
and needed working capital. We agreed to acquire iCollector as long as its
majority shareholder was willing to finance iCollector until it met its
projected cash flow targets. iCollector did not attain the projections, and
there were not adequate resources to continue funding its losses. In December
2001, iCollector was restructured and placed in formal liquidation in January
2002. We will continue to market and develop the new iCollector business model,
but we cannot assure you that the new business model will be profitable. The
success of the new iCollector business model is dependent upon the strengths and
relationships of the current sales team, the skills of the technology team, and
the continued support and generation of new customers.

We also cannot guarantee that we will be able to integrate new acquisitions or
affiliations successfully into our company without substantial costs, delays, or
other operational or financial problems. Further, acquisitions and expansion
into new markets involve a number of special risks, including possible adverse
effects on our operating results, diversion of management's attention, failure
to retain key personnel, risks associated with unanticipated events or
liabilities, and amortization of acquired intangible assets. Some or all of
these risks could have a material adverse effect on our business, financial
condition and results of operations. In addition, competition in the acquisition
market is intense, and prices paid for auction houses have increased in recent
years.
<PAGE>

We may finance future acquisitions and expansions by incurring additional bank
indebtedness, using cash from operations, issuing common stock or other
securities, or any combination of these. If our common stock does not maintain a
sufficient market value, or potential acquisition candidates are otherwise
unwilling to accept our common stock or other securities as part of the
consideration for the sale of their businesses, we may be required to use more
of our cash resources or incur substantial debt in order to finance future
acquisitions. If we do not have sufficient cash resources, our ability to make
acquisitions could be limited unless we are able to obtain additional capital
through debt or equity financings. There can be no assurance that we will be
able to obtain the financing we will need in the future on terms we consider
acceptable, if at all.

We have experienced rapid growth, which has placed a strain on our resources,
and any failure to manage our growth effectively could cause our business to
suffer

We do not have a proven record in managing our growth and may not be successful
in doing so. We have grown from 12 employees on August 24, 1999 to approximately
98 staff persons December 31, 2001. We have recently acquired additional auction
businesses, hired key management personnel and added personnel in connection
with these acquisitions. We plan to continue expanding through acquisitions and
to continue to develop our Internet e-commerce (the online purchase of goods and
services by consumers and businesses) site. Past growth in these areas has
placed, and any future growth will continue to place, a significant strain on
our management systems and resources.

If we are unable to achieve a significant number of visitors and successfully
facilitate transactions, we may be unable to generate sufficient revenues to
earn a profit

The success of our Ableauctions.com and iCollector.com web sites depends on
whether or not there is significant market acceptance of these web site by
consumers. We currently offer only a limited selection of merchandise for sale
in our silent auctions. We anticipate that we will have very limited market
acceptance until we begin offering more items of merchandise for sale and our
brand name is established. Our business concept of offering an Internet solution
for broadcasting live auctions is still being tested and we cannot assure you
that our Internet strategy to broadcast live auctions will be successful, or
that it will increase revenues of our live auctions.

Our competitors and potential competitors may offer more cost-effective
merchandising solutions than us, which could damage our business and our ability
to successfully commercialize our web site. Our failure to attract visitors,
successfully complete transactions, and develop an adequate auction house base
will seriously harm our business and our ability to earn a profit.
<PAGE>

We have capacity constraints and system development risks that could damage our
customer relations or inhibit our possible growth, and we may need to expand our
management systems and controls quickly

Our success and our ability to provide high quality customer service largely
depends on the efficient and uninterrupted operation of our computer and
communications systems and the computers and communication systems of third
party vendors in order to accommodate any significant numbers or increases in
the numbers of consumers and businesses using our services. Our success also
depends on our and our vendors' abilities to rapidly expand
transaction-processing systems and network infrastructure without any systems
interruptions in order to accommodate any significant increases in use of our
service.

We cannot assure you that the vendors we have selected and will select in the
future will be capable of accommodating any significant number or increases in
the number of consumer and auction houses using our services. Such failures will
have a material adverse affect on our business and results of operations. We may
experience periodic systems interruptions and down time caused by traffic to our
web site and technical difficulties, which may cause customer dissatisfaction
and may adversely affect our results of operations. Limitations of our and our
vendors' technology infrastructure may prevent us from maximizing our business
opportunities.

Changing technology may render our equipment, software, and programming obsolete
or irrelevant

The market for Internet-based products and services is characterized by rapid
technological developments, frequent new product introductions, and evolving
industry standards. The emerging character of these products and services and
their rapid evolution will require that we continually improve the performance,
features, and reliability of our Internet-based products and services,
particularly in response to competitive offerings. We cannot guarantee that we
will be successful in responding quickly, cost effectively, and sufficiently to
these developments. In addition, the widespread adoption of new Internet
technologies or standards could require substantial expenditures by us to modify
or adapt our Internet sites and services and could fundamentally affect the
character, viability, and frequency of Internet-based advertising, either of
which could have a material adverse effect on our business, financial condition,
and operating results. In addition, new Internet-based products, services, or
enhancements offered by us may contain design flaws or other defects that could
require costly modifications or result in a loss of consumer confidence, either
of which could have a material adverse effect on our business, financial
condition, and operating results.

We depend on third parties for uninterrupted Internet access and may be harmed
by the loss of any such service

We rely on Telus Advanced Communications, an Internet service provider located
in British Columbia, for uninterrupted Internet access. We have not entered into
a definitive agreement for these services. Our business is dependent on
uninterrupted Internet access and the loss of these services may have a material
adverse effect on our business, financial condition, and operating
<PAGE>

results. We cannot assure you that we would be able to obtain these services
from other third parties.

If we cannot protect our Internet domain names, our ability to conduct our
operations may be impeded

We anticipate that the Internet domain names "ableauctions.com" and
"icollector.com" will be an extremely important part of our business and the
business of our subsidiaries. Governmental agencies and their designees
generally regulate the acquisition and maintenance of domain names. The
regulation of domain names in the United States and in foreign countries may be
subject to change in the near future. Governing bodies may establish additional
top-level domains, appoint additional domain name registrars, or modify the
requirements for holding domain names. As a result, we may be unable to acquire
or maintain relevant domain names in all countries in which we conduct business.
Furthermore, the relationship between regulations governing domain names and
laws protecting trademarks and similar proprietary rights is unclear. Therefore,
we may be unable to prevent third parties from acquiring domain names that are
similar to, infringe on, or otherwise decrease the value of our trademarks and
other proprietary rights. Third parties have acquired domain names that include
"auctions" or other variations both in the United States and elsewhere.

Potential fluctuations in results of operating may cause cash shortfalls
materially affecting our results of operations

Because of our limited operating history and the emerging nature of the markets
in which we compete, it is difficult for us to forecast our revenues or earnings
accurately. In addition, we have no backlog and a significant portion of our net
revenues for a particular quarter is derived from auctions that are listed and
completed during that quarter. Our current and future expense levels are based
largely on our investment plans and estimates of future revenues and are, to a
large extent, fixed.

We may be unable to adjust spending in time to compensate for any unexpected
revenue shortfall. Accordingly, any significant shortfall in revenues relative
to our planned expenditures would have an immediate adverse effect on our
business, results of operations and financial condition. Further, as a strategic
response to changes in the competitive environment, we may from time to time
make certain pricing, service or marketing decisions that could have a material
adverse effect on our business, results of operations, and financial condition.
<PAGE>

We believe that period-to-period comparisons of our operating results may not be
meaningful and should not be relied on as an indication of future performance.
In addition, it is likely that in one or more future quarters our operating
results will fall below the expectations of securities analysts and investors.
In that event, the trading price of our common stock would almost certainly be
materially adversely affected.

Our success depends on the services of our key officers and our ability to
attract and maintain qualified, experienced personnel

Our future success will depend on Abdul Ladha, our President and Chief Executive
Officer, Ron Miller, our Chief Financial Officer, Jeremy Dodd, the
Vice-President of Operations of Able Auctions (1991) Ltd. and our Secretary and
Treasurer, and Randy Ehli, the Vice-President, Northwest Auctions of Ehli's
Commercial/Industrial Auctions, Inc. We also rely heavily on Mr. Dodd to manage
our auction operations and we intend to hire additional personnel or consultants
to assist us in developing and implementing our technology and business plan. We
will rely on Mr. Ehli to assist us in managing and expanding our Northwest
auction operations. We also rely on consultants and advisors who are not
employees.

The loss of key personnel could have an adverse effect on our operations. We do
not maintain insurance to cover losses that may result from the death of any of
our key personnel. Competition for qualified employees is intense. Our inability
to attract, retain, and motivate additional, highly skilled personnel required
for expansion of operations and development of technologies could adversely
affect our business, financial condition, and results of operations. Our
financial situation may adversely affect our ability to retain existing
personnel and attract new personnel. We cannot assure you that we will be able
to retain our existing personnel or attract additional, qualified persons when
required and on acceptable terms.

The e-commerce industry is highly competitive, and we cannot assure you that we
will be able to compete effectively

The market for broadcasting auctions over the Internet is new, rapidly evolving,
and intensely competitive. The market for live video-fed auctions is even newer,
and we expect competition to intensify further in the future. Our direct
competitors will include Livebid.com, which is owned by Amazon.com, and other
web sites that broadcast live auctions. We will also compete with various online
auction services, including eBay; UBID.com; Onsale Exchange, a division of
Onsale, Inc.; Auction Universe, a Times-Mirror company; Excite, Inc.; and a
number of other small services, including those that serve specialty markets. We
will also compete with business-to-consumer online auction services such as
Onsale, First Auction, Zauction, and Surplus Auction.

We face potential competition from a number of large online communities and
services that have expertise in developing online commerce and in facilitating
online person-to-person interaction.
<PAGE>

Some of these potential competitors, including Amazon.com, America Online, Inc.,
Microsoft Corporation, and Yahoo! Inc., currently offer a variety of
business-to-consumer trading and classified advertisement services and may
introduce live auctions to their large user populations. We believe that the
principal competitive factors in the online auctions market are volume and
selection of goods, population of buyers, customer service, reliability of
delivery and payment by users, brand recognition, web site convenience and
accessibility, price, quality of search tools, and system reliability. Many of
our current and potential competitors have longer operating histories, larger
customer bases, greater brand recognition, and significantly greater financial,
marketing, technical, and other resources than us.

Certain of our competitors with other revenue sources may be able to devote
greater resources to marketing and promotional campaigns, adopt more aggressive
pricing policies, and devote substantially more resources to web site and
systems development than us or may try to attract traffic by offering services
for free. We cannot assure you that we will be able to compete successfully
against current and future competitors. Further, as a strategic response to
changes in the competitive environment, we may, from time to time, make certain
pricing, service, or marketing decisions that could have a material adverse
effect on our business, results of operations, and financial condition.

Due to the emerging nature of Internet commerce, we are unable to forecast our
expenses and revenues accurately, and if our expenses exceed our revenues, we
may never become profitable

Due to the emerging nature of Internet-based advertising, services, and
electronic commerce, we are unable to forecast our expenses and revenues
accurately. We believe that because the Internet has been available to the
general public for a relatively brief time, the successful operation of any form
of Internet-based business will be uncertain. Our current and future estimated
expense levels are based largely on our estimates of future revenues and may
increase considerably. Few, if any, of our operating expenses can be quickly or
easily reduced, such as the laying off of personnel or reducing our commitment
to our consultants and service providers, without causing a material adverse
effect to our business, financial condition, and operating results. In addition,
we may be unable to adjust spending in time to compensate for any unexpected
expenditures, and a shortfall in actual revenues as compared to estimated
revenues would have an immediate material adverse effect on our business,
financial condition, and operating results.

Our business may be subject to government regulation and legal uncertainties
that may increase the costs of operating our web site or limit our ability to
generate revenues

We are subject to the same federal, state, and local laws as other companies
conducting business on the Internet. Today there are relatively few laws
specifically directed towards online services. However, due to the increasing
popularity and use of the Internet and online services, it is possible that laws
and regulations will be adopted regarding the Internet or online services. These
laws and regulations could cover issues such as online contracts, user privacy,
freedom of expression, pricing, fraud, content and quality of products and
services, taxation, advertising, intellectual property rights, and information
security. Applicability to the Internet of existing
<PAGE>

laws governing issues such as property ownership, copyrights and other
intellectual property issues, taxation, libel, obscenity, and personal privacy
is uncertain. In addition, numerous states have regulations regarding the manner
in which auctions may be conducted and the liability of auctioneers in
conducting such auctions.

Due to the global nature of the Internet, it is possible that the governments of
other states and foreign countries might attempt to regulate our transmissions
or prosecute us for violations of their laws. We might unintentionally violate
such laws. Such laws may be modified, or new laws may be enacted, in the future.
Any such development could damage our business.

Our business may be subject to sales and other taxes, which may cause
administrative difficulties and increase our cost of operations

We will collect applicable sales and other similar taxes on goods sold on our
web site. One or more states may seek to impose additional sales tax collection
obligations on companies such as ours that engage in or facilitate online
commerce. Several proposals have been made at the state and local level that
would impose additional taxes on the sale of goods and services through the
Internet. These proposals, if adopted, could substantially impair the growth of
electronic commerce and could diminish our opportunity to derive financial
benefit from our activities.

Item 2.   Description of Property

Through our subsidiary, Ableauctions.com (Washington), we own a commercial
property located at 7303 East Earll Drive, Scottsdale, Arizona, which includes a
50,000 square foot building. This property houses our head offices and our
flagship auction facility. We acquired the property on March 20, 2000 pursuant
to a purchase and sale agreement between Ableauctions.com (Washington) and C&C
Capital Investment, Inc., in consideration of $1,200,000 in cash, the assumption
of a promissory note with an unpaid balance of $1,056,110.53, and the issuance
of 155,486 shares of our common stock valued at $1,243,889, for a total purchase
price of $3,500,000.

We currently lease, through our subsidiary Able Auctions (1991) Ltd., our
principal business office comprising 15,000 square feet at 1963 Lougheed
Highway, Coquitlam, British Columbia, Canada, pursuant to a lease that expires
on December 1, 2009. The monthly payments under the lease for the 2002 year are
Cdn$17,100 through September 30, 2002 and Cdn $13,500 per month through December
31, 2002, plus goods and services tax. The landlord is Derango Resources Inc., a
private company wholly-owned by Hanifa Ladha, who is the wife of our President,
Abdul Ladha.
<PAGE>

We have subleased approximately 22,000 square feet of warehouse and office space
at 8303 129th Street, Surrey, British Columbia, Canada, for the term commencing
January 1, 2000 to January 31, 2002 at the monthly rent of Cdn$10,500 plus goods
and services tax. This lease was not renewed in 2002 and we are currently
looking for new premises to house our Surrey operations.

We have leased approximately 9,000 square feet of warehouse, production and
office space at 1055 Vernon Street, Vancouver, British Columbia. There are four
years remaining under the lease and the monthly rent is Cdn$11,600 up to May 31,
2003 and then Cdn$12,450 until the end of the lease.

Neither our subsidiaries nor we presently own or lease any other property or
real estate.

Item 3.   Legal Proceedings

As of the date hereof, there is no material litigation pending against us. From
time to time, we may become a party to litigation and claims incident to the
ordinary course of our business.

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

No meetings of security holders were held during the fourth quarter of our
fiscal year ended December 31, 2001.

PART II

Item 5.   Market for Common Equity and Related Stockholder Matters

Our common stock has traded on the American Stock Exchange since June 29, 2000
under the symbol "AAC". Prior to June 29, 2000 our common stock traded on the
Over-the-Counter Bulletin Board (OTCBB) under the symbol "ABLC". The range of
high and low bid prices per share for our common stock for each quarter during
the period from January 1, 2000 through December 31, 2001, as published by the
American Stock Exchange and the OTCBB is set forth below. The quotations merely
reflect the prices at which transactions were proposed, and do not necessarily
represent actual transactions. Prices do not include retail markup, markdown, or
commissions and may not represent actual transactions.
<PAGE>

                      Quarterly Common Stock Price Ranges

         -----------------------------------------------------------------
           Quarter Ended                                 2000
                                              ----------------------------
                                                High                Low
         -----------------------------------------------------------------
           March 31                            $10.44              $4.12
         -----------------------------------------------------------------
           June 30                             $ 8.12              $5.50
         -----------------------------------------------------------------
           September 30                        $ 9.50              $3.62
         -----------------------------------------------------------------
           December 31                         $ 4.75              $2.87
         -----------------------------------------------------------------

         -----------------------------------------------------------------
           Quarter Ended                                 2001
                                              ----------------------------
                                                High                Low
         -----------------------------------------------------------------
           March 31                            $ 4.40              $3.00
         -----------------------------------------------------------------
           June 30                             $ 3.05              $1.30
         -----------------------------------------------------------------
           September 30                        $ 2.25              $0.95
         -----------------------------------------------------------------
           December 31                         $ 2.00              $0.65
         -----------------------------------------------------------------

There were 627 record holders of our common stock as of March 28, 2002.

We have not paid dividends on our common stock since our inception. Dividends on
common stock are within the discretion of the Board of Directors and are payable
from profits or capital legally available for that purpose. It is our current
policy to retain any future earnings to finance the operations and growth of our
business. Accordingly, we do not anticipate paying any dividends on common stock
in the foreseeable future.

Recent Sales of Unregistered Securities

1.   On February 25, 2000, we completed a private placement of 1,000,000 units
     at the price of $5.00 per unit to two persons for proceeds of $5,000,000.
     Each unit consisted of one share of common stock and one non-transferable
     share purchase warrant. Each warrant is exercisable to acquire one
     additional share of our common stock at a price of $5.00 until February 25,
     2001, and thereafter at a price of $6.00 until February 25, 2002. The
     issuance of the shares was exempt from registration pursuant to Rule 506
     under Regulation D and Regulation S promulgated under the Securities Act of
     1933, as amended.

2.   On February 29, 2000, we issued 53,405 shares of our common stock at the
     deemed price of $6.756 per share to Falcon Trading, Inc. in consideration
     for the business assets of Falcon Trading. The issuance of the shares was
     exempt from registration pursuant to Rule 506 under Regulation D
     promulgated under the Securities Act of 1933, as amended.

3.   On March 20, 2000, we issued 30,625 shares of our common stock at the
     deemed price of $8.00 per share to Mesler's Auction House of Scottsdale,
     LLC. in partial consideration for the business assets of Mesler's. The
     issuance of the shares was exempt from registration pursuant to Rule 506
     under Regulation D promulgated under the Securities Act of 1933,
<PAGE>

     as amended. We issued to Mesler's a non-transferable share purchase warrant
     to purchase 150,000 shares of our common stock at a price of $8.00 until
     March 20, 2001. This warrant was not exercised and has expired.

4.   On March 20, 2000, we issued 155,486 shares of our common stock at the
     deemed price of $8.00 per share to C&C Capital Investment, Inc. in partial
     consideration for a real estate property and building. The issuance of the
     shares was exempt from registration pursuant to Rule 506 under Regulation D
     promulgated under the Securities Act of 1933, as amended.

5.   On April 18, 2000, we issued 4,822 shares of our common stock at the deemed
     price of Cdn$10.37 (U.S.$7.15) per share to Simon Fraser University in
     partial consideration for the assignment of intellectual property rights.
     The issuance of the shares was exempt from registration pursuant to
     Regulation S promulgated under the Securities Act of 1933, as amended.

6.   On April 28, 2000, we completed a private placement of 1,210,240 units at
     the price of $5.00 per unit for proceeds of $6,051,200. Each unit consisted
     of one share of common stock and one non-transferable share purchase
     warrant. Each warrant is exercisable to acquire one additional share of our
     common stock at a price of $6.00 until April 28, 2001. The issuance of the
     shares was exempt from registration pursuant to Rule 506 under Regulation S
     promulgated under the Securities Act of 1933, as amended.

7.   On May 5, 2000, we issued 10,000 shares of our common stock at the deemed
     price of $7.00 per share to Auctions West Sales Corporation in
     consideration for the business assets of Auctions West. The issuance of the
     shares was exempt from registration pursuant to Regulation S promulgated
     under the Securities Act of 1933, as amended.

8.   On May 16, 2000, we issued 50,000 shares of our common stock at the deemed
     price of $7.00 per share to Randy Ehli in partial consideration for all the
     issued shares of Ehli's Commercial/Industrial Auctions, Inc. The issuance
     of the shares was exempt from registration pursuant to Rule 506 under
     Regulation D promulgated under the Securities Act of 1933, as amended.

9.   On May 23, 2000, the Company issued 10,000 shares of common stock to Robert
     Kavanagh, a non-U.S. person as partial consideration in the acquisition of
     the assets of Auctions West Sales Corporation. All offers and sales took
     place outside of the United States pursuant to an exemption from
     registration under Regulation S of the Securities Act of 1933, as amended.

10.  On July 26, 2000, we issued 68,182 shares of common stock at a deemed price
     of $7.53 per share to Brett Johnston and One Day Holdings Ltd., a company
     incorporated under the laws of British Columbia, in connection with our
     acquisition of Johnston's Surplus Office Systems Ltd., a company
     incorporated under the laws of British Columbia. The issuance of the shares
     was outside the United States to non-U.S. persons in reliance upon
<PAGE>

     an exemption from registration pursuant to Regulation S promulgated under
     the Securities Act of 1933, as amended.

11.  On September 27, 2000, we issued 6,900 shares of common stock at a deemed
     price of $8.00 per share to Murray Jarvis and Michael Collins in connection
     with our acquisition of Warex Supply Ltd., a company incorporated under the
     laws of British Columbia. The issuance of the shares was outside the United
     States to non-U.S. persons in reliance upon an exemption from registration
     pursuant to Regulation S promulgated under the Securities Act of 1933, as
     amended.

12.  On September 27, 2002, we issued 4,150,357 shares of common stock at a
     value of $5,935,013 in connection with our acquisition of iCollector PLC.,
     a company incorporated under the laws of England. The issuance of the
     shares was outside the United States to non-U.S. persons in reliance upon
     an exemption from registration pursuant to Regulation S promulgated under
     the Securities Act of 1933, as amended.

Item 6. Management's Discussion and Analysis of Financial Condition and Results
        of Operations

Plan of Operation

Our plan of operation is based on our operating history, our experience in the
industry, our discussions with third parties, the SEC filings of our competitors
and the decisions of our management.

Generate revenues through auctions and increase our volume of sales by
increasing the number of live auctions at our existing locations.

We will continue to operate auctions at our four locations in Surrey and
Coquitlam, British Columbia; Tacoma, Washington; and San Francisco, California.
We also hold auctions at customer locations in bankruptcies and insolvencies.

Increase revenues by broadcasting our auctions on the Internet and by selling
merchandise on our web site.

We launched our web site for public viewing in September 1999 and broadcasted
our first live auction in January 2000. We are in the process of further
refining the technologies related to broadcasting live auctions on our web site.
We intend to broadcast auctions from all our locations on an alternating basis.
We may add auctions of other auction houses if we acquire additional auction
locations or if we develop strategic affiliations with other auction houses to
broadcast their auctions. We intend to integrate the iCollector business into
our business.
<PAGE>

Continue research and development to improve our web site and auction
broadcasting technologies.

If we obtain the financing to do so or if our operations generate enough money
to do so, we plan to continue our research and development efforts to improve
our web site and auction broadcasting technologies. We are in the process of
refining our live auction broadcasting technologies and intend to develop
software and systems that will allow us to improve graphical presentations, the
speed of our bidding process, the preview of merchandise and the method of
registering bidders.

Commence geographic expansion program by acquiring or entering into strategic
affiliations with auction companies.

We intend to broadcast the auctions of other auction houses from a variety of
locations throughout North America. We also intend to license our software to
other auction companies and commence marketing efforts in the remainder of 2002.

Our acquisition of iCollector is expected to result in a number of strategic
relationships with galleries, auction houses and art dealers, and a relationship
with e-Bay to broadcast our live auctions. We cannot assure you that we will
successfully integrate the iCollector operations into our business or that our
venture will be commercially successful.

We believe that the acquisition of iCollector will enable us to more efficiently
and quickly deploy our technology to the many auction houses in Europe, the
United Kingdom and the United States. We expect to realize synergies of scale in
the areas of marketing, web and Internet hosting, and Internet and software
development. We expect to realize the benefits of these synergies throughout the
remainder of 2002.

iCollector had approximately $2 million in working capital to fund its
operations and capital requirements for approximately one year. As stated, this
working capital was not adequate to fund its ongoing operations and business
plan. We anticipate that with the restructured and much trimmed-down iCollector,
we will be able to fund the development and business model of iCollector through
cash resources generated from operations.

Summary of Operating and Capital Budget


Set forth below are our estimated cash operating and capital budgets for
operations, technology purchases, research and development and implementing our
expansion strategy for the remainder of the fiscal year ending December 31,
2002:
<PAGE>

                 Marketing                                          $ 500,000
                 Ongoing research and development                     200,000
                 Expansion of inventories                             200,000
                 Servers and operating systems                        100,000
                 Geographic expansion                                       0
                                                             -----------------
                 Required Capital:                                 $1,000,000

Our revised operating and capital budget for the fiscal year ending December 31,
2002 is estimated to be approximately $1,000,000. As of December 31,2001, we had
a working capital deficit of approximately $2.9 million, including current
liabilities related to deferred compensation notes in the principal amount of
$2.7 million issued in connection with our acquisition of iCollector. These
deferred compensation notes are convertible at our option into common shares at
$1.43 per share, subject to shareholder approval. We intend to convert these
notes into shares if we cannot raise additional capital on acceptable terms to
fund payment of the notes and our working capital requirements. We cannot assure
you that our actual expenditures for that period will not exceed our estimated
operating budget. Actual expenditures will depend on a number of factors, some
of which are beyond our control, including, among other things, the availability
of financing on acceptable terms, acquisition and/or expansion costs,
reliability of the assumptions of management in estimating cost and timing,
certain economic factors, the timing related to development of our technology
and costs associated with operating our auctions.

In the event we determine that we may be unable to meet our on-going capital
commitments, we plan to sell certain non-essential assets, including our
property located in Scottsdale, Arizona. In addition, we may take some or all of
the following actions:

     .   postpone expenditures on research and development;

     .   reduce sales and marketing expenditures;

     .   reduce general and administrative expenses through lay offs or
         consolidation of our operations;

     .   suspend operations that are not economically profitable; or

     .   sell assets, including licenses to our technologies.

Political and Economic Uncertainties

Our business and our ability to raise additional financing may be adversely
affected by political and economic risks and uncertainties. The general economic
slowdown in the United States and Europe may adversely affect the demand for
products offered at our auctions. The events of September 11, 2001 and the
political uncertainty in the Middle East may negatively affect the general
economy, the capital markets and our ability to raise capital on acceptable
terms, if at all. There can be no assurance that the Company will be able to
increase our revenues from operations or to raise sufficient financing to meet
our on-going obligations on acceptable terms, if at all. We also cannot assure
you we will successfully integrate the iCollector operations into
<PAGE>

our business or that economic uncertainties will not have a material adverse
affect on our business and results of operations.

Management's Discussion and Analysis

The following discussion on our results of operations should be read in
conjunction with our audited consolidated financial statements and the related
notes for the year ended December 31, 2001. Our financial statements have been
prepared in accordance with United States generally accepted accounting
principles.

Results of Operations

Year ended December 31, 2001 compared to the Year ended December 31, 2000.

Revenues. During the year ended December 31, 2001, we had revenues of
$10,793,219 as compared to revenues of $10,647,213 during the year ended
December 31, 2000. This 1.4% increase in revenues resulted from increases in
commissions generated from the sale of consigned merchandise. Our revenues are
derived primarily from the sale of goods and from commissions generated from the
sale of consigned merchandise.

Sales of Goods. Sales of goods accounted for $6,653,656 or 61.6% of revenue as
compared to $8,607,230 or 80.8% of revenue for the 2000 fiscal year. This
decrease in the sales of goods resulted from purchase controls on sellable
merchandise. We anticipate that revenues from the sales of goods will increase
as a percentage of revenues, as we plan to conduct a greater number of auctions
using inventory we purchase in buy-out and liquidation situations, which
generally result in higher gross profit margins.

Operating Expenses. Operating expenses totalled $7,268,723 for the year ended
December 31, 2001 as compared to $10,047,058 for the year ended December 31,
2000. Our operating expenses continue to reflect start-up costs associated with
our business, our acquisition growth strategy and the development and
maintenance costs related to the auctions we conduct on the Internet. Other
costs associated with the start up of our business and our acquisitions include
legal and accounting fees, personnel and consulting expenses, management
expenses, promotional and advertising costs and general overhead.

Gross Profit. Cost of goods sold were $5,243,698 for the year ended December 31,
2001 as compared to $8,866,530 for the year ended December 31, 2000. Gross
profit was $5,549,521 or 51.4% of total revenue for the year ended December 31,
2001 as compared to $1,780,683 or 16.7% of total revenue for the year ended
December 31, 2000. We believe that gross profit as a percentage of revenue will
increase in 2002, as we anticipate that our revenues will increase and we intend
to conduct auctions of inventory buy outs and liquidations, which typically
result in higher gross profit margins.
<PAGE>

Net Loss. We had a net loss of $11,434,029 or $0.52 per share for the year ended
December 31, 2001 as compared to $11,837,363 or $0.58 per share for the year
ended December 31, 2000. The net loss is attributable to costs associated with
our growth, start-up costs and the costs of developing our business and
technologies and the loss sustained from the write-off of iCollector.

Unless we raise additional financing through public or private equity financing,
we anticipate net operating losses to decrease for the foreseeable future as a
result of our restructuring program to control and reduce costs and realize the
synergies from the previous acquisition program. If we are successful in raising
additional funds, we anticipate certain expenses such as marketing, research and
development and professional fees to significantly increase as we expand our
Internet services, auction facilities and acquisition program.

Year Ended December 31, 2000 Compared to the Year Ended December 31, 1999

Revenues. During the year ended December 31, 2000, we had revenues of
$10,647,213 as compared to revenues of $898,450 during the year ended December
31, 1999. This 1085% increase in revenues was attributable primarily to the fact
that we acquired Able Auctions (1991) Ltd. in August 1999 and it represented our
sole operation for the period August through December 1999.

Sales of Goods. Sales of goods accounted for $8,607,230 or 80.8% of revenue for
the 2000 fiscal year as compared to $829,755 or 92.3% of revenue for the 1999
fiscal year. This decrease in the sales of goods resulted from increases in
commissions generated from the sale of consigned merchandise. We anticipate that
revenues from the sale of goods will increase as a percentage of revenues, as we
plan to conduct a greater number of auctions using inventory we purchase in
buy-out and liquidation situations, which generally result in higher gross
profit margins.

Operating Expenses. Operating expenses totalled $10,047,058 for the year ended
December 31, 2000 as compared to $1,673,900 for the year ended December 31,
1999. This increase in operating expenses was attributable primarily to our
acquisition of seven auction houses during 2000. During the 2000 fiscal year,
our operating expenses reflected start-up costs associated with our business,
our acquisition growth strategy and the development and maintenance costs
related to the auctions we conduct on the Internet. Other costs associated with
the start up of our business and our acquisitions include legal and accounting
fees, personnel and consulting expenses, management expenses, promotional and
advertising costs and general overhead.

All expenses in the year 2000 compared to 1999 are significantly higher in
absolute amounts. The increase was mainly due to the acquisitions we made
throughout the year, including the implementation of our accounting and
administrative procedures in the new acquisitions as well as the implementation
of our auction strategy and inventory procurement models. The effective
development of internal control and inventory procurement systems takes time,
and additional costs were incurred and redundancies were experienced in
implementing these programs. We now believe that we have effective control over
these systems and do not expect excess costs of inventory or accounts receivable
write downs in the future.
<PAGE>

Significant operating expenses incurred during 2000 included $460,545 for
repairs and maintenance for premises we occupy in Surrey, British Columbia and
in Coquitlam, British Columbia. We also wrote-down or wrote-off $781,505 in bad
debts which represented non-collectible accounts from the start up of our retail
store and acquisitions. We no longer accept credit in our retail outlets.
Operating expenses also included the write down of goodwill and capital assets
in the fourth quarter of 2000 amounting to $462,778.

Gross Profit. Cost of goods sold were $8,866,530 for the year ended December 31,
2000 as compared to $582,346 for the year ended December 31, 1999. Gross profit
was $1,780,683 or 16.7% of total revenue for the year ended December 31, 2000 as
compared to $316,104 or 35.2% of total revenue for the year ended December 31,
1999. The gross margin for 2000 was lower than expected as we realized
significant write-downs of inventory related to the start up of our auction
businesses and acquisitions.

Net Loss. We had a net loss of $11,837,363 or $0.58 per share for the year ended
December 31, 2000 as compared to $1,339,492 or $0.10 per share for the year
ended December 31, 1999. The net loss is attributable to costs associated with
our growth, start-up costs and the costs of developing our business and
technologies.

Liquidity and Capital Resources

Since 1999, the Company has funded its activities principally from cash flow
generated from operations and the private placement of its common stock. At this
time the Company is not aware of any trends, nor is it subject to any demands,
commitments, events or uncertainties that will result in or that are reasonably
likely to result in our liquidity increasing or decreasing in any material way.

We had a deficiency of $3,349,317 in working capital at December 31, 2001. We
had cash and cash equivalents of $673,829, accounts receivables of $105,468,
inventory of $257,832, and prepaid expenses of $227,745 at December 31, 2001. We
anticipate that trade accounts receivables and inventory may increase during the
year 2002 if we are able to increase the number and frequency of our auctions
and as we expand our business operations. Cash flow used for operating
activities required $520,862 during the year ended December 31, 2001. We
anticipate that cash will remain constant for 2002 as we anticipate that all of
our auction houses will achieve profitability during 2002. Our cash resources
may decrease if we complete additional acquisitions during 2002, or if we are
unable to maintain positive cash flow from our business through 2002. We only
intend to continue our acquisition program if additional financing is available.

Cash flow used for discontinued operations required $85,574 during the year
ended December 31, 2001.

Cash flow for investing activities during the year ended December 31, 2001,
required $54,274, relating primarily to the net cash component of acquiring
additional computer hardware and the proceeds from the disposition of Surplus
Office. Cash flow used for financing activities during
<PAGE>

the year ended December 31, 2001, were $24,701 consisting of repayment of a
promissory note ($11,861) and share issuance costs of $12,840 in relation to the
acquisition of iCollector PLC.

Our operating and capital budget for the year ending December 31, 2002 is
approximately $1 million, to be used primarily for working capital and for
expenses related to the acquisition of new auction facilities, expansion of our
inventories, continually developing and upgrading our technologies, launching a
marketing campaign in the United States and Canada, and purchasing additional
servers and operating systems. If we are unable to raise additional financings,
then our operating and capital budget will be neutral and the only cash expended
will be those raised from operations.

Quantitative and Qualitative Disclosures About Market Risks

We believe that we do not have any material exposure to interest or commodity
risks. We are exposed to certain economic and political changes in international
markets where we compete, such as inflation rates, recession, foreign ownership
restrictions, domestic and foreign government spending, budgetary and trade
policies and other external factors over which we have no control.

Our financial results are quantified in U.S. dollars but a majority of our
obligations and expenditures with respect to our operations are incurred in
Canadian dollars. Although we do not believe we currently have any materially
significant market risks relating to our operations resulting from foreign
exchange rates, if we enter into financing or other business arrangements
denominated in currency other than the U.S. dollar or the Canadian dollar,
variations in the exchange rate may give rise to foreign exchange gains or
losses that may be significant.

We currently have no material long-term debt obligations other than a promissory
note, with interest at 9% per annum, repayable at $8,569 per month including
principal and interest, due July 24, 2028. The promissory note is secured by a
mortgage on our Scottsdale property. We do not use financial instruments for
trading purposes and we are not a party to any leverage derivatives. In the
event we experience substantial growth in the future, our business and results
of operations may be materially affected by changes in interest rates and
certain other credit risk associated with its operations.

Item 7.  Financial Statements

Reference is made to the financial statements, the reports thereon, the notes
thereto, and supplementary data commencing at page F-1 of this Form 10-KSB,
which financial statements, reports, notes, and data are incorporated herein by
reference.

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

On November 8, 2000, we dismissed Davidson and Company, Chartered Accountants as
our auditor and appointed Shikaze Ralston Tam Kurozumi, Chartered Accountants,
of Vancouver, British Columbia, Canada.
<PAGE>

Davidson and Company have not been associated with any of our financial
statements subsequent to the quarter ended June 30, 2000. The change in
independent auditors was effective for the fiscal year ended December 31, 2000,
was approved by our Board of Directors, and was not due to any disagreement
between the Company and Davidson and Company, Chartered Accountants on any
matter of accounting principles or practices, financial statement disclosures,
or auditing scope or procedure. Our financial statements for the fiscal year
ended December 31, 1999 contain no adverse opinion or disclaimer of opinion and
have not been qualified or modified as to audit scope or accounting opinion. The
report for 1999 did contain a comment related to the uncertainty of the company
as a going concern.

During the period prior to and preceding the change in independent auditors,
there were no disagreements with Davidson and Company on any matter of
accounting principles or practices, financial statement disclosures, or auditing
scope or procedure, which disagreements if not resolved to the satisfaction of
Davidson and Company would have caused them to make reference thereto in their
report on our financial statements for the period. We have authorized Davidson
and Company to respond fully to any subject matter of any potential disagreement
with respect to our financial statements.

We were not advised by Davidson and Company or our previous auditors, Shikaze
Ralston Tam Kurozumi, Chartered Accountants, of any of the following:

         (a) lack of internal controls necessary for us to develop reliable
financial statements;

         (b) any information that has come to the attention of our auditors that
has led them to no longer be able to rely on management's representations or
that has made them unwilling to be associated with the financial statements
prepared by management;

         (c) any need to expand significantly the scope of our auditors' audit
or information that has come to our auditors' attention during the two financial
years prior to and preceding the change in our independent auditors that, if
further investigated, would:

             (i)   materially impact the fairness or reliability of the
         previously issued audit report or the financial statements issued or
         covering that period; or

             (ii)  cause our auditors to become unwilling to rely on
         management's representations or that has made them unwilling to be
         associated with our financial statements, or due to the replacement of
         Davidson and Company. or any other reason, our auditors did not so
         expand the scope of the audit or conduct such further investigation;
         and

         (d) any information that has come to the attention of our auditors that
has led them to conclude that such information materially impacts the fairness
or reliability of the audit reports or the financial statements issued covering
the two financial years prior to and preceding the change in our independent
auditors (including information that, unless resolved, to the satisfaction of
such auditors, would prevent it from rendering an unqualified audit report on
<PAGE>

those financial statements) and due to the replacement of Davidson and Company
or any other reason, any issue has not been resolved to such auditors'
satisfaction prior to Davidson and Company replacement.

On February 12, 2002, Shikaze Ralston Tam Kurozumi, Chartered Accountants
resigned and on February 12, 2002, Morgan & Company, Chartered Accountants, was
appointed as the Company's independent certified public accountant.

Shikaze Ralston Tam Kurozumi, Chartered Accountants have not been associated
with any of our financial statements subsequent to the year ended December 31,
2001. The change in independent auditors was effective for the fiscal year ended
December 31, 2001, was approved by our Board of Directors, and was not due to
any disagreement between the Company and Shikaze Ralston Tam Kurozumi, Chartered
Accountants on any matter of accounting principles or practices, financial
statement disclosures, or auditing scope or procedure. Our financial statements
for the fiscal years ended December 31, 2000 and December 31, 2001 contain no
adverse opinion or disclaimer of opinion and have not been qualified or modified
as to audit scope or accounting opinion. The reports for 2000 and 2001 contained
a comment related to the uncertainty of the Company as a going concern.

During the period prior to and preceding the change in independent auditors,
there were no disagreements with Shikaze Ralston Tam Kurozumi, Chartered
Accountants on any matter of accounting principles or practices, financial
statement disclosures, or auditing scope or procedure, which disagreements if
not resolved to the satisfaction of Shikaze Ralston Tam Kurozumi, Chartered
Accountants would have caused them to make reference thereto in their report on
our financial statements for the period. We have authorized Shikaze Ralston Tam
Kurozumi, Chartered Accountants to respond fully to any subject matter of any
potential disagreement with respect to our financial statements.

We have not been advised by Shikaze Ralston Tam Kurozumi, Chartered Accountants
or our current auditors, Morgan & Company, Chartered Accountants, of any of the
following:

           (a) lack of internal controls necessary for us to develop reliable
financial statements;

           (b) any information that has come to the attention of our auditors
that has led them to no longer being able to rely on management's
representations or that has made them willing to be associated with the
financial statements prepared by management;

           (c) any need to expand significantly the scope of our auditors' audit
or information that has come to our auditors' attention during the two financial
years prior to and preceding the change in our independent auditors that, if
further investigated, would:

               (i)  materially impact the fairness or reliability of the
           previously issued audit report or the financial
                  statements issued or covering that period; or

               (ii) cause our auditors to become unwilling to rely on
           management's representations or that has made them unwilling to be
           associated with our
<PAGE>

           financial statements, or due to the replacement of Davidson and
           Company, or any other reason, our auditors did not so expand the
           scope of the audit or conduct such further investigation; and

           (d) any information that has come to the attention of our auditors
that has led them to conclude that such information materially impacts the
fairness or reliability of the audit reports or the financial statements issued
covering the two financial years prior to and preceding the change in our
independent auditors (including information that, unless resolved, to the
satisfaction of such auditors, would prevent it from rendering an unqualified
audit report on those financial statements) and due to the replacement of
Shikaze Ralston Tam Kurozumi, Chartered Accountants or any other reason, any
issue has not been resolved to such auditors' satisfaction prior to Shikaze
Ralston Tam Kurozumi, Chartered Accountants replacement.

PART III

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

The information set forth under the caption "Election of Directors", "Executive
Officers", and "Section 16(a) Beneficial Ownership Reporting Compliance" in the
Company's definitive Proxy Statement for its 2002 Annual Meeting of Shareholders
is incorporated herein by reference.

Item 10.   Executive Compensation

The information set forth under the captions "Executive Compensation and Other
Information" and "Compensation of Directors" in the Company's definitive Proxy
Statement for its 2002 Annual Meeting of Shareholders is incorporated herein by
reference.

Item 11.   Security Ownership of Certain Beneficial Owners and Management

The information set forth under the captions "Securities Ownership of Certain
Beneficial Owners" and "Securities Ownership of Management" in the Company's
definitive Proxy Statement for its 2002 Annual Meeting of Shareholders is
incorporated herein by reference.

Item 12.   Certain Relationships and Related Transactions

The information set forth under the caption "Certain Relationships and Related
Transactions between Management and the Company" in the Company's definitive
Proxy Statement for its 2002 Annual Meeting of Shareholders is incorporated
herein by reference.
<PAGE>

Item 13. Exhibits and Reports on Form 8-K

(a)  Exhibits

     2.1/(1)/    Share Purchase Agreement dated July 9, 1999 among
                 Dexton Technologies Corporation, Able Auctions (1991)
                 Ltd., and Ableauctions.com, Inc., as amended by
                 Addendum dated August 16, 1999.

     2.4/(1)/    Agreement and Plan of Reorganization dated February
                 1, 2000 among Falcon Trading, Inc., Ableauctions.com
                 (Washington), Inc., and Ableauctions.com, Inc

     2.5/(3)/    Asset Purchase Agreement dated March 20, 2000 among
                 Mesler's Auction House of Scottsdale, LLC,
                 Ableauctions.com (Washington), Inc., and
                 Ableauctions.com, Inc.

     2.6/(3)/    Purchase and Sale Agreement dated March 20, 2000
                 between C&C Capital Investment, Inc. and
                 Ableauctions.com (Washington), Inc.

     3.1/(1)/    Articles of Incorporation, as amended (incorporated
                 by reference to Exhibits 3.1, 3.2, 3.3, 3.4 and 3.5
                 of the Registrant's Registration Statement on Form
                 10-SB).

     3.2/(2)/    Bylaws (Incorporated by reference to Exhibit 3.6 of
                 the Registrant's Registration Statement on Form
                 10-SB.

     10.1/(1)/   1999 Stock Option Plan with Form of Option Agreement
                 (Incorporated by reference to Exhibit 4.2 of the
                 Registrant's Registration Statement on Form S-8.

     10.2/(1)/   Form of Stock Option Agreement

     10.3/(1)/   Share Purchase Agreement dated April 1, 1998 among
                 Jeremy Dodd, Dexton Technologies Corporation, and
                 Able Auctions (1991) Ltd.

     10.4/(1)/   Share Purchase Agreement dated July 9, 1999 among
                 Dexton Technologies Corporation, Able Auctions (1991)
                 Ltd., and Ableauctions.com, Inc., as amended by
                 Addendum dated August 16, 1999

     10.5/(1)/   Contribution Agreement dated July 15, 1999 between
                 Douglas McLeod and Ableauctions.com, Inc. (then J.B.
                 Financial Services, Inc.) regarding Mr. McLeod's
                 contribution of 8,000,000 shares of common stock to
                 the Company's treasury

     10.6/(1)/   Asset Purchase Agreement dated September 20, 1999
                 among Ross Auctioneers & Appraisers Ltd., Able
                 Auctions (1991) Ltd., and Ableauctions.com, Inc.

     10.7/(1)/   Asset Purchase Agreement dated September 20, 1999
                 between John Carrier dba LJM Computer Resources and
                 Able Auctions (1991) Ltd. regarding the web site
                 located at www.bcbids.com.
                            --------------

     10.8/(1)/   Bill of Sale dated September 20, 1999 between Ronald
                 H. Smallwood and Able Auctions (1991) Ltd. regarding
                 the domain name "bcbids.com".

     10.9/(1)/   Employment Agreement dated September 20, 1999 between
                 Able Auctions (1991) Ltd. and Richie Smallwood.
<PAGE>

     10.10/(1)/  Subscription Agreement dated July 20, 1999 between
                 Ableauctions.com, Inc. and Silicon Capital Corp.

     10.11/(1)/  Consulting Agreement dated August 24, 1999 between
                 Able Auctions (1991) Ltd. and Dexton Technologies
                 Corporation

     10.12/(1)/  Investor Relations Agreement dated September 15, 1999
                 between Ableauctions.com, Inc. and North Star
                 Communications Inc.

     10.13/(1)/  Investor Relations Agreement dated October 1, 1999
                 between Ableauctions.com, Inc. and European Investor
                 Services Ltd.

     10.14/(1)/  Lease Agreement dated September 1, 1999 between
                 Derango Resources Inc. and Ableauctions.com, Inc.

     10.15/(1)/  Sublease dated August 22, 1999 between HGP Glass
                 Industries of Canada Inc. and Ableauctions.com, Inc.

     10.16/(2)/  Proposal by Compaq Computer and accepted by Dexton
                 Technologies Corporation dated September 1999, for
                 installation of Distributed Internet Server Array
                 (DISA).

     10.17/(2)/  Internet Business Services Agreement by and between
                 Telus Advanced Communications and Dexton Technologies
                 Corporation dated September 14, 1999.

     10.18/(4)/  Investor Relations Agreement dated February 3, 2000
                 between Ableauctions.com, Inc. and KCSA Public
                 Relations Worldwide

     10.19/(3)/  Share Purchase Agreement dated May 16, 2000 among
                 Randy Ehli, Ehli's Commercial/Industrial Auctions,
                 Inc., and Ableauctions.com, Inc.

     10.20/(5)/  Share Purchase Agreement dated July 14, 2000 among
                 Brett Johnston and One Day Holdings Ltd., Johnston's
                 Surplus Office Systems Ltd., and Ableauctions.com,
                 Inc.

     10.21/(6)/  Letter agreement dated July 31, 2000 between Murray
                 Jarvis, Michael Collins, and Ableauctions.com, Inc.

     10.22/(7)/  Letter agreement dated July 31, 2000 between Murray
                 Jarvis and Ableauctions.com, Inc.

     10.23/(7)/  Lease Agreement dated November 1, 2000.

     10.24/(8)/  Guarantee by and between Ableauctions.com, Inc. and
                 Northern Ireland Local Government Officers'
                 Superannuation dated June 21, 2001.

/(1)/  Previously filed on November 13, 1999 on Form 10-SB.
/(2)/  Previously filed on December 30, 1999 on Form 10-SB/A.
/(3)/  Previously filed on April 4, 2000 on Form 8-K, as amended on
       June 9, 2000.
/(4)/  Previously filed on April 13, 2000 on Form 10-KSB.
/(5)/  Previously filed on August 14, 2000 on Form 8-K.
/(6)/  Previously filed on October 19, 2000 on Form S-1.
/(7)/  Previously filed on April 2, 2001 on Form 10-KSB.
/(8)/  Previously filed on August 16, 2001 on Form 10-KSB.
<PAGE>

(b)  Reports on Form 8-K

     On August 17, 2001, the Registrant filed a Form 8-K announcing the terms of
the recommended offer to be made by Levy Gee to acquire iCollector PLC.

       On October 1, 2001, the Registrant filed a Form 8-K disclosing that the
recommended offer made by Levy Gee on behalf of the Company to acquire
iCollector PLC, a public company incorporated in England and Wales,
unconditional in all respects.
<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.

Date:  April 22, 2002
                                                 /s/ Abdul Ladha
                                                ------------------------------
                                                 Abdul Ladha, President

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/ Abdul Ladha               Chairman of the Board, Chief Executive Officer     April 22, 2002
 ---------------------------------------    and Director
                Abdul Ladha                 (Principal Executive Officer)


              /s/ Ron Miller                Chief Financial Officer                            April 22, 2002
 ---------------------------------------    (Principal Financial Officer and Accounting
               Ron D. Miller                Officer)


            /s/ Barrett Sleeman             Director                                           April 22, 2002
 ---------------------------------------
              Barrett Sleeman


            /s/ Dr. David Vogt              Director                                           April 22, 2002
 ---------------------------------------
              Dr. David Vogt

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

           /s/ Michael Boyling              Director                                           April 22, 2002
           -------------------
              Michael Boyling

 ---------------------------------------
</TABLE>
<PAGE>

                                AUDITORS' REPORT

To the Stockholders and the Board of Directors of
Ableauctions.com, Inc.


We have audited the consolidated balance sheet of Ableauctions.com, Inc. as at
December 31, 2001 and the consolidated statements of operations, comprehensive
loss, cash flows, and changes in stockholders' equity for the year then ended.
These consolidated 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 audit.

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

In our opinion, these consolidated financial statements present fairly, in all
material respects, the financial position of the Company as at December 31, 2001
and the results of its operations and cash flows for the year then ended in
accordance with United States generally accepted accounting principles.

These consolidated financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 2 to the
consolidated financial statements, unless the Company attains future profitable
operations and/or obtains additional financing, there is substantial doubt about
the Company's ability to continue as a going concern. Management's plans in
regards to these matters are discussed in Note 2. The consolidated financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.


Vancouver, Canada                                    "Morgan & Company"

March 21, 2002                                       Chartered Accountants
<PAGE>

                            ABLEAUCTIONS.COM, INC.

                          CONSOLIDATED BALANCE SHEET


<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------
                                                                                        DECEMBER 31
                                                                                  2001                2000
---------------------------------------------------------------------------------------------------------------
<S>                                                                         <C>                 <C>
ASSETS
Current
     Cash and cash equivalents                                              $     673,829       $    1,376,814
     Accounts receivable - trade                                                  105,468              864,296
     Inventory                                                                    257,832              302,767
     Prepaid expenses                                                             227,745              113,750
     Current portion of receivable on agreement for sale                            5,421                    -
                                                                            ----------------------------------
                                                                                1,270,295            2,657,627
Note Receivable (Note 4)                                                          100,000              100,000
Trademark                                                                           8,788               10,638
Capital Assets (Note 5)                                                         2,737,636            3,057,531
Web Site Development Costs (Note 6)                                                31,027               86,353
Goodwill (Note 7)                                                                       -            1,050,902
                                                                            ----------------------------------
                                                                            $   4,147,746       $    6,963,051
==============================================================================================================

LIABILITIES
Current
     Accounts payable and accrued liabilities                               $   1,847,212       $    2,107,079
     Current portion of promissory note                                             9,592                8,479
     Deferred compensation on notes (Note 9)                                    2,762,808                    -
                                                                            ----------------------------------
                                                                                4,619,612            2,115,558
Promissory Note (Note 10)                                                       1,030,718            1,043,692
                                                                            ----------------------------------
                                                                                5,650,330            3,159,250
                                                                            ----------------------------------

SHAREHOLDERS' EQUITY (DEFICIENCY)

Capital Stock (Note 11)
     Authorized:
         62,500,000 common shares with a par value of $0.001
     Issued and outstanding:
         25,127,020 common shares at December 31, 2001
         20,976,661 common shares at December 31, 2000                             25,127               20,976
     Additional paid-in capital                                                23,439,124           17,508,261

Deferred Option Plan Compensation                                                (309,885)            (520,089)
Deficit                                                                       (24,618,078)         (13,184,049)
Accumulated Other Comprehensive Income (Loss)                                     (38,872)             (21,298)
                                                                            ----------------------------------
                                                                               (1,502,584)           3,803,801
                                                                            ----------------------------------
                                                                            $   4,147,746       $    6,963,051
==============================================================================================================
</TABLE>
<PAGE>

                            ABLEAUCTIONS.COM, INC.

                     CONSOLIDATED STATEMENT OF OPERATIONS

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------
                                                                                    YEAR ENDED DECEMBER 31
                                                                                     2001            2000
--------------------------------------------------------------------------------------------------------------
<S>                                                                           <C>               <C>
Revenues
     Sales                                                                    $   6,653,656     $  8,607,230
     Commissions                                                                  4,139,563        2,039,983
                                                                              --------------------------------
                                                                                 10,793,219       10,647,213
Cost Of Revenues                                                                  5,243,698        8,866,530
                                                                              --------------------------------
Gross Profit                                                                      5,549,521        1,780,683
                                                                              --------------------------------
Operating Expenses
     Accounting and legal                                                            77,047          555,023
     Advertising and promotion                                                    1,104,532          967,048
     Amortization of goodwill                                                       291,152          502,288
     Automobile                                                                      65,778           77,251
     Bad debts                                                                       12,978          781,505
     Commission                                                                     169,358          277,888
     Consulting                                                                     325,050          502,729
     Depreciation and amortization of capital assets                                377,541          462,778
     Insurance                                                                      108,563           97,289
     Interest on promissory note                                                    174,406           79,257
     Investor relations and shareholder information                                  14,349          450,196
     Management fees                                                                188,440          191,100
     Office and administration                                                      518,936          378,733
     Rent and utilities                                                             790,552          954,796
     Repairs and maintenance                                                        170,832          460,545
     Salaries and benefits                                                        2,476,135        2,678,073
     Telephone                                                                      150,253          222,552
     Travel                                                                          68,807          408,007
     Website maintenance                                                            184,014                -
                                                                              --------------------------------
                                                                                  7,268,723       10,047,058
                                                                              --------------------------------
Loss Before Other Items                                                          (1,719,202)      (8,266,375)
                                                                              --------------------------------

Other Items
     Interest income                                                                 22,710          128,865
     Foreign exchange gain (loss)                                                    17,683          (44,534)
     Loss on impairment of capital assets                                                 -       (1,733,700)
     Loss on impairment of goodwill (Note 7)                                       (559,750)      (1,854,319)
     Loss on impairment of trademark                                                      -          (67,300)
                                                                              --------------------------------
                                                                                   (519,357)      (3,570,988)
                                                                              --------------------------------

Loss From Continuing Operations                                                  (2,238,559)     (11,837,363)
Loss On Failed Acquisition (Note 9)                                              (8,553,683)               -
Loss On Disposition Of Subsidiaries                                                (608,646)               -
Loss From Discontinued Operations                                                   (33,141)               -
                                                                              --------------------------------

Loss For The Year                                                             $ (11,434,029)   $ (11,837,363)
==============================================================================================================

Basic And Diluted Loss Per Share
     Loss from continuing operations                                          $       (0.10)   $       (0.58)
     Loss for the year                                                        $       (0.52)   $       (0.58)
==============================================================================================================

Weighted Average Number Of Shares Outstanding                                    21,885,020       20,250,395
==============================================================================================================
</TABLE>
<PAGE>

                            ABLEAUCTIONS.COM, INC.

                 CONSOLIDATED STATEMENT OF COMPREHENSIVE LOSS

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------------
                                                                                      YEAR ENDED DECEMBER 31
                                                                                    2001                  2000
--------------------------------------------------------------------------------------------------------------------
<S>                                                                      <C>                   <C>
Loss For The Year                                                        $      (11,434,029)   $      (11,837,363)

Other Comprehensive Income (Loss), net of tax
     Foreign currency translation adjustments                                       (17,574)              (32,743)
                                                                         -------------------------------------------

Consolidated Comprehensive Loss                                          $      (11,451,603)   $      (11,870,106)
====================================================================================================================

Basic And Diluted Comprehensive Loss Per Share                           $            (0.52)   $            (0.59)
====================================================================================================================

Weighted Average Number Of Shares Outstanding                                    21,885,020            20,250,395
====================================================================================================================
</TABLE>
<PAGE>

                            ABLEAUCTIONS.COM, INC.

                     CONSOLIDATED STATEMENT OF CASH FLOWS

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------
                                                                                          YEAR ENDED DECEMBER 31
                                                                                        2001                 2000
----------------------------------------------------------------------------------------------------------------------
<S>                                                                           <C>                 <C>
Cash Flows From Operating Activities
     Loss for the year from continuing operations                             $      (2,238,559)  $      (11,837,363)
     Non-cash items included in net loss:
         Depreciation and amortization                                                  377,541              462,778
         Amortization of goodwill                                                       291,152              502,288
         Bad debts                                                                       12,978              781,505
         Other                                                                                -               (2,550)
         Loss on impairment of capital assets                                                 -            1,733,700
         Loss on impairment of goodwill                                                 559,750            1,854,319
         Loss on impairment of trademark                                                      -               67,300
         Stock based compensation                                                       210,204              120,019
                                                                              ----------------------------------------
                                                                                       (786,934)          (6,318,004)
     Changes in operating working capital items:
         (Increase) Decrease in accounts receivable                                     286,849             (724,665)
         (Increase) Decrease in inventory                                               (70,078)             937,368
         Increase in prepaid expenses                                                  (216,866)             (37,581)
         Increase in accounts payable and accrued liabilities                           257,301              925,215
         Note receivable                                                                  8,866                    -
                                                                              ----------------------------------------
     Net cash used in operating activities                                             (520,862)          (5,217,667)
                                                                              ----------------------------------------

Cash Used In Discontinued Operations
     Loss for the year from discontinued operations                                     (33,141)                   -
     Change in net assets of discontinued operations                                    (52,433)                   -
                                                                              ----------------------------------------
     Net cash used in discontinued operations                                           (85,574)                   -
                                                                              ----------------------------------------

Cash Flows From Investing Activities
     Purchase of capital assets                                                        (142,475)            (321,055)
     Investments in subsidiaries, net of cash acquired                                        -           (3,077,067)
     Proceeds on disposition of subsidiaries, net of cash divested                       23,207                    -
     Note receivable                                                                          -             (100,000)
     Purchase of trademarks                                                                   -              (34,483)
     Web site development costs                                                               -              (37,185)
     Proceeds of receivable on agreement for sale                                        64,994                    -
                                                                              ----------------------------------------
                                                                                        (54,274)          (3,569,790)
                                                                              ----------------------------------------

Cash Flows From Financing Activities
     Repayment of promissory note                                                       (11,861)                   -
     Issuance of common stock                                                                 -           11,051,200
     Share issuance costs                                                               (12,840)          (1,147,670)
     Stock options exercised                                                                  -              354,400
                                                                              ----------------------------------------
                                                                                        (24,701)          10,257,930
                                                                              ----------------------------------------

Change In Cash And Cash Equivalents For The Year                                       (685,411)           1,470,473
Cash And Cash Equivalents, Beginning Of Year                                          1,376,814              (60,916)
Effect Of Exchange Rates On Cash                                                        (17,574)             (32,743)
                                                                              ----------------------------------------

Cash And Cash Equivalents, End Of Year                                        $         673,829   $        1,376,814
======================================================================================================================
</TABLE>

Supplemental Disclosures With Respect To Cash Flows (Note 13)
<PAGE>

                            ABLEAUCTIONS.COM, INC.

           CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY

                               DECEMBER 31, 2001

<TABLE>
<CAPTION>
                                                                                                        ACCUMULATED
                                                        COMMON STOCK              ADDITIONAL               OTHER
                                               ------------------------------       PAID-IN            COMPREHENSIVE
                                                   SHARES          AMOUNT           CAPITAL                INCOME
                                               ----------------------------------------------------------------------
<S>                                             <C>             <C>            <C>                  <C>

Balance, December 31, 1999                        18,310,001    $     18,310   $      3,740,108     $     11,445

Private placements                                 2,210,240           2,210         11,048,990                -
Share issuance costs                                       -               -         (1,147,670)               -
Common stock issued for acquisition of
  assets of Falcon Trading Inc.                       53,405              53            360,752                -
Common stock issued for acquisition of
  land and building                                  155,486             155          1,243,733                -
Common stock issued for acquisition of
  assets of Messler's Auction House                   30,625              31            244,969                -
Common stock issued for acquisition of
  rights to trademark                                  4,822               5             34,473                -
Common stock issued for acquisition of
  assets of Auctions West Sales Corporation           10,000              10             69,990                -
Common stock issued for acquisition of
  Ehli's Commercial/Industrial Auctions, Inc.         50,000              50            349,950                -
Common stock issued for acquisition of
  Johnston's Surplus Office Systems Ltd.              68,182              68            513,342                -
Common stock issued for acquisition of Warex
  Supply Ltd.                                          6,900               7             55,193                -
Stock options exercised                               77,000              77            354,323                -
Deferred option plan compensation                          -               -            640,108                -
Stock based compensation                                   -               -                  -                -
Translation adjustment                                     -               -                  -          (32,743)
Loss for the year                                          -               -                  -                -
                                               ----------------------------------------------------------------------

Balance, December 31, 2000                        20,976,661          20,976         17,508,261          (21,298)

<CAPTION>
                                                        DEFERRED
                                                         OPTION                                    TOTAL
                                                          PLAN                                 STOCKHOLDERS'
                                                      COMPENSATION           DEFICIT              EQUITY
                                               -----------------------------------------------------------------
<S>                                                <C>                   <C>                <C>

Balance, December 31, 1999                            $        -           $  (1,346,686)     $    2,423,177

Private placements                                             -                       -          11,051,200
Share issuance costs                                           -                       -          (1,147,670)
Common stock issued for acquisition of
  assets of Falcon Trading Inc.                                -                       -             360,805
Common stock issued for acquisition of
  land and building                                            -                       -           1,243,888
Common stock issued for acquisition of
  assets of Messler's Auction House                            -                       -             245,000
Common stock issued for acquisition of
  rights to trademark                                          -                       -              34,478
Common stock issued for acquisition of
  assets of Auctions West Sales Corporation                    -                       -              70,000
Common stock issued for acquisition of
  Ehli's Commercial/Industrial Auctions, Inc.                  -                       -             350,000
Common stock issued for acquisition of
  Johnston's Surplus Office Systems Ltd.                       -                       -             513,410
Common stock issued for acquisition of Warex
  Supply Ltd.                                                  -                       -              55,200
Stock options exercised                                        -                       -             354,400
Deferred option plan compensation                       (640,108)                      -               -
Stock based compensation                                 120,019                       -             120,019
Translation adjustment                                         -                       -             (32,743)
Loss for the year                                              -             (11,837,363)        (11,837,363)
                                               -----------------------------------------------------------------

Balance, December 31, 2000                              (520,089)            (13,184,049)          3,803,801
</TABLE>
<PAGE>

                            ABLEAUCTIONS.COM, INC.

           CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY

                               DECEMBER 31, 2001

<TABLE>
<CAPTION>
                                                                                                      ACCUMULATED
                                                        COMMON STOCK              ADDITIONAL             OTHER
                                               -------------------------------      PAID-IN          COMPREHENSIVE
                                                   SHARES          AMOUNT           CAPITAL              INCOME
                                               ---------------------------------------------------------------------
<S>                                            <C>                 <C>            <C>                <C>
Common stock issued for acquisition of
  iCollector PLC                                   4,150,359       $   4,151      $   5,930,863        $         -
Stock based compensation                                   -               -                  -                  -
Translation adjustment                                     -               -                  -            (17,574)
Loss for the year                                          -               -                  -                  -
                                               ---------------------------------------------------------------------

Balance, December 31, 2001                        25,127,020       $  25,127      $  23,439,124        $   (38,872)
                                               =====================================================================

<CAPTION>
                                                     DEFERRED
                                                      OPTION                                    TOTAL
                                                       PLAN                                 STOCKHOLDERS'
                                                   COMPENSATION           DEFICIT              EQUITY
                                                ------------------------------------------------------------
<S>                                             <C>                    <C>                  <C>
Common stock issued for acquisition of
  iCollector PLC                                $           -          $            -       $   5,935,014
Stock based compensation                              210,204                       -             210,204
Translation adjustment                                      -                       -             (17,574)
Loss for the year                                           -             (11,434,029)        (11,434,029)
                                                ------------------------------------------------------------

Balance, December 31, 2001                      $    (309,885)         $  (24,618,078)      $  (1,502,584)
                                                ============================================================
</TABLE>

<PAGE>

                            ABLEAUCTIONS.COM, INC.

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                               DECEMBER 31, 2001



1.   HISTORY AND ORGANIZATION OF THE COMPANY

     Ableauctions.com, Inc. (the 'Company') was organized on September 30, 1996,
     under the laws of the State of Florida, as J.B. Financial Services, Inc. On
     July 19, 1999, an Article of Amendment was filed with the State of Florida
     for the change of the Company's name from J.B. Financial Services, Inc. to
     Ableauctions.com, Inc.

     The Company's primary business activity is as a high-tech
     business-to-business and consumer auctioneer that conducts its auctions
     live and simultaneously broadcasts over the Internet. The Company
     liquidates a broad range of computers, electronics, office equipment,
     furniture and industrial equipment that it acquires through bankruptcies,
     insolvencies and defaults.

     The Company's primary operating subsidiaries at December 31, 2001 were:

         Able Auctions (1991) Ltd., operating a Canadian-based auction business.

         Ableauctions.com (Washington) Inc., operating an U.S.-based auction
         business.

         Ehli's Commercial/Industrial Auctions, Inc., an U.S.-based liquidator
         of automobiles and industrial equipment.

         Jarvis Industries Ltd., a Canadian-based auction house.


2.   GOING CONCERN

     The Company's financial statements are prepared using the generally
     accepted accounting principles applicable to a going concern, which
     contemplates the realization of assets and liquidation of liabilities in
     the normal course of business. However, the Company is in the process of
     expansion and its operating expenses exceed its revenues. Without
     realization of additional capital or the attainment of profitable
     operations, it would be unlikely for the Company to continue as a going
     concern. It is management's plan to seek additional capital through equity
     financing.

<TABLE>
<CAPTION>
                                                2001             2000
                                         ---------------   ---------------
    <S>                                  <C>               <C>
    Deficit                              $   (24,618,078)  $   (13,184,049)
                                         ===============   ===============

    Working capital (deficiency)         $    (3,349,317)  $       542,069
                                         ===============   ===============
</TABLE>
<PAGE>

                            ABLEAUCTIONS.COM, INC.

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                               DECEMBER 31, 2001



3.   SIGNIFICANT ACCOUNTING POLICIES

     a)  Principles of Consolidation

         These consolidated financial statements include the accounts of
         Ableauctions.com, Inc. and its wholly owned subsidiaries, from the
         dates of acquisition.

     b)  Foreign Currency Translation

         The Company accounts for foreign currency transactions and translation
         of foreign currency financial statements under Statement of Financial
         Accounting Standards No. 52, "Foreign Currency Translation" ("SFAS
         52"). Transaction amounts denominated in foreign currencies are
         translated at exchange rates prevailing at transaction dates. Carrying
         values of monetary assets and liabilities are adjusted at each balance
         sheet date to reflect the exchange rate at that date. Non-monetary
         assets and liabilities are translated at the exchange rate on the
         original transaction date. Gains and losses from restatement of foreign
         currency monetary and non-monetary assets and liabilities are included
         in income. Revenues and expenses are translated at the rates of
         exchange prevailing on the dates such items are recognized in earnings.

         Financial statements of the Company's Canadian subsidiaries (see Note
         1) are translated into U.S. dollars using the exchange rate at the
         balance sheet date for assets and liabilities. The Company's
         investments in the structural capital of the Canadian subsidiaries have
         been recorded at the historical cost in U.S. dollars. The resulting
         gains or losses are reported as a separate component of stockholders'
         equity. The functional currency of the Canadian subsidiaries, is the
         local currency, the Canadian dollar.

     c)  Use of Estimates

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

     d)  Cash and Cash Equivalents

         Cash and cash equivalents includes highly liquid investments with
         original maturities of three months or less.
<PAGE>

                            ABLEAUCTIONS.COM, INC.

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                               DECEMBER 31, 2001


3.   SIGNIFICANT ACCOUNTING POLICIES (Continued)

     e)  Financial Instruments

         The carrying amounts of financial instruments including cash and cash
         equivalents, accounts receivable, note receivable, accounts payable and
         accrued liabilities, deferred compensation notes, and promissory note,
         approximated fair value at December 31, 2001.

     f)  Inventory

         Inventory is stated at the lower of cost and estimated net realizable
         value.

     g)  Software Development

         The Company has adopted Statement of Position 98-1 ("SOP 98-1"),
         "Accounting for the Costs of Computer Software Developed or Obtained
         for Internal Use", as its accounting policy for internally developed
         computer software costs. Under SOP 98-1, computer software costs
         incurred in the preliminary development stage are expensed as incurred.
         Computer software costs incurred during the application development
         stage are capitalized and amortized over the software's estimated
         useful life.

     h)  Capital Assets, Depreciation and Amortization

         Capital assets are recorded at cost. The cost of capital assets is
         depreciated using the declining balance method at the following annual
         rates:

                    Building                                4%
                    Furniture, fixtures and equipment      20%
                    Computer equipment                     30%
                    Computer software                      30%
                    Vehicles                               30%

         Leasehold improvements are amortized using the straight-line method
         over the terms of the leases.
<PAGE>

                            ABLEAUCTIONS.COM, INC.

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                               DECEMBER 31, 2001



3.   SIGNIFICANT ACCOUNTING POLICIES (Continued)

     i)  Impairment of Long-Lived Assets

         The Company periodically evaluates potential impairments of its
         long-lived assets, including intangibles. When the Company determines
         that the carrying value of long-lived assets may not be recoverable
         based upon the existence of one or more indicators of impairment, the
         Company evaluates the projected undiscounted cash flows related to the
         assets. If these cash flows are less than the carrying value of the
         assets, the Company measures the impairment using discounted cash flows
         or other methods of determining fair value.

         Long-lived assets to be disposed of are carried at the lower of cost or
         fair value less estimated costs of disposal.

     j)  Revenue Recognition

         The Company generally earns revenues from its auction activities either
         through consignment sales, or through sales of inventory purchased by
         the Company. For consignment sales, the Company earns auction fees
         charged to consignees, and buyer's premiums charged to purchasers,
         determined as a percentage of the sale price. For inventory sales, the
         Company earns a profit or incurs a loss on the sale, to the extent the
         purchase price exceeds or is less than the purchase price paid for such
         inventory.

         For each type of auction revenue, an invoice is rendered to the
         purchaser, and revenue is recognized by the Company, at the date of the
         auction. The auction purchase creates a legal obligation upon the
         purchaser to take possession of, and pay for the merchandise. This
         obligation generally provides the Company with reasonable assurance of
         collection of the sale proceeds, from which the Company's earnings are
         derived, including the fees from consignees and purchasers, as well as
         resale profits.

     k)  Trademark

         The cost of a trademark acquired is being amortized on a straight-line
         basis over its life of fifteen years.
<PAGE>

                            ABLEAUCTIONS.COM, INC.

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                               DECEMBER 31, 2001


3.   SIGNIFICANT ACCOUNTING POLICIES (Continued)

     l)  Acquisitions and Goodwill

         All business acquisitions have been accounted for under the purchase
         method and, accordingly, the excess of the purchase price over the fair
         value of the net assets acquired has been recorded as goodwill in the
         consolidated balance sheet. The results of operations, changes in
         equity and cash flows of acquired companies are included in operations
         only for the period between the date of acquisition and the end of the
         financial year.

         Goodwill arising from acquisitions of businesses is amortized on a
         straight-line basis over periods ranging from three to twenty years.

     m)  Advertising Costs

         The Company recognizes advertising expenses in accordance with
         Statement of Position 98-7, "Reporting on Advertising Costs". As such,
         the Company expenses the cost of communicating advertising in the
         period in which the advertising space or airtime is used.

     n)  Loss Per Share

         In February 1997, the Financial Accounting Standards Board issued
         Statement of Financial Accounting Standards No. 128, "Earnings Per
         Share" ("SFAS 128"). Under SFAS 128, basic and diluted earnings per
         share are to be presented. Basic earnings per share is computed by
         dividing income available to common shareholders by the weighted
         average number of common shares outstanding in the period. Diluted
         earnings per share takes into consideration common shares outstanding
         (computed under basic earnings per share) and potentially dilutive
         common shares.

     o)  Income Taxes

         Income taxes are provided in accordance with Statement of Financial
         Accounting Standards No. 109, "Accounting for Income Taxes". A deferred
         tax asset or liability is recorded for all temporary differences
         between financial and tax reporting and net operating loss
         carryforwards. Deferred tax expense (benefit) results from the net
         change during the year of deferred tax assets and liabilities.

         Deferred tax assets are reduced by a valuation allowance when, based
         upon currently available information, it is more likely than not that
         some portion or all of the deferred tax assets will not be realized.
         Deferred tax assets and liabilities are adjusted for the effects of
         changes in tax laws and rates on the date of enactment.
<PAGE>

                            ABLEAUCTIONS.COM, INC.

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                               DECEMBER 31, 2001


3.   SIGNIFICANT ACCOUNTING POLICIES (Continued)

     p)  Segment information

         Statement of Financial Accounting Standards No. 131, "Disclosures About
         Segments of an Enterprise and Related Information", establishes
         standards for reporting information about the operating and geographic
         segments of the Company's business. Currently, the nature and extent of
         the Company's operations are such that it operates in only one
         reportable segment, as an auction house and liquidator. Information
         regarding the Company's geographic segments is set forth in Note 18.

     q)  Stock Based Compensation

         Statement of Financial Accounting Standards No. 123, "Accounting for
         Stock-Based Compensation," encourages, but does not require, companies
         to record compensation cost for stock-based employee compensation plans
         at fair value. The Company has chosen to account for stock-based
         compensation using Accounting Principles Board Opinion No. 25,
         "Accounting for Stock Issued to Employees." Accordingly compensation
         cost for stock options is measured as the excess, if any, of the quoted
         market price of the Company's stock at the date of the grant over the
         amount an employee is required to pay for the stock.

     r)  Accounting for Derivative Instruments and Hedging Activities

         In June 1998, the Financial Accounting Standards Board issued Statement
         of Financial Accounting Standards No. 133 "Accounting for Derivative
         Instruments and Hedging Activities" ("SFAS 133") which establishes
         accounting and reporting standards for derivative instruments and for
         hedging activities. SFAS 133 is effective for all fiscal quarters of
         fiscal years beginning after June 15, 1999. In June 1999, the FASB
         issued SFAS 137 to defer the effective date of SFAS 133 to fiscal
         quarters of fiscal years beginning after June 15, 2000. Adoption of the
         statement has not had a significant impact on its financial statements.

     s)  Comprehensive Income

         In 1998, the Company adopted Statement of Financial Accounting
         Standards No. 130 ("SFAS 130"), "Reporting Comprehensive Income". This
         statement establishes rules for the reporting of comprehensive income
         and its components.
<PAGE>

                             ABLEAUCTIONS.COM, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                DECEMBER 31, 2001



4.   NOTE RECEIVABLE

     Notes receivable from an employee is due July 2, 2003 together with
     interest at 4% per annum and is secured by a charge over real estate of the
     employee.

5.   CAPITAL ASSETS

<TABLE>
<CAPTION>
                                             2001                        2000
                            --------------------------------------   -----------
                                         Accumulated     Net Book      Net Book
                             Cost        Depreciation     Value         Value
                            --------------------------------------   -----------
     <S>                    <C>           <C>          <C>           <C>
     Land                   $   800,000   $        -   $    800,000  $   800,000
     Building                 1,082,605       43,260      1,039,345    1,081,500
     Furniture and fixtures     163,000       90,776         72,224       84,492
     Computer equipment       1,102,664      592,528        510,136      660,669
     Computer software          161,122       87,326         73,796       93,563
     Vehicles                    89,882       50,951         38,931       61,373
     Leasehold improvements     236,505       33,301        203,204      275,934
                            ---------------------------------------  -----------

                            $ 3,635,778   $  898,142   $  2,737,636  $ 3,057,531
                            =======================================  ===========
</TABLE>

6.   WEB SITE DEVELOPMENT COSTS

     Web site development costs of $31,027 (net of amortization costs of
     $112,640) is comprised of hardware and software costs incurred by the
     Company in developing its web site. The Company amortizes costs over a
     period of five years from the commencement of operations of the web site.

7.   GOODWILL


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

     Goodwill, at cost                  $   3,251,662   $     3,451,662
     Less:  Accumulated impairment         (2,414,069)       (1,854,319)
     Less:  Accumulated amortization         (837,593)         (546,441)
                                        ---------------------------------

     Net book value                     $           -   $     1,050,902
                                        =================================
<PAGE>

                             ABLEAUCTIONS.COM, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                DECEMBER 31, 2001


8.   BUSINESS COMBINATIONS

     a)  On March 29, 2001, the Company disposed of its 100% interest in
         Johnston's Surplus Office Systems Ltd. ("Surplus").

         The Company also agreed to settle debt owed to the Company by Surplus
         in the amount of $1,191,724 by the issue of 1,191,724 common shares of
         Surplus at a deemed price of $1.00 per share.

         The Company agreed to then sell all of the issued shares of Surplus to
         an employee of Surplus, for consideration of $380,500.

         The purchase price is to be paid as follows:

         a)   Cash of $47,568 due on the closing date of March 31, 2001.
         b)   Cash of $79,280 payable as to $2,202 per month for three years
              after the closing date, without interest, evidenced by a
              promissory note and secured by the pledge and escrow to the
              Company of the shares.
         c)   An amount of $253,696 payable by the provision to the Company of
              goods or services of Surplus at an agreed discount.

         The proceeds described in (a) and (b) have been recorded as at the
         effective date of sale. The benefit, if any, derived by the Company
         from the discount described in (c) will be reflected in the gross
         profit of the Company as earned.

         The carrying values of assets and liabilities of Surplus that were sold
         were as follows:

         Cash                               $     24,361
         Goodwill                                200,000
         Other assets                            569,868
         Liabilities                            (236,299)
                                            ------------

                                            $    557,930
                                            ============

         The revenues and expenses of Surplus, until the date of disposition,
         have been presented as discontinued operations.

         Under the acquisition agreement, dated July 14, 2000, the Company
         issued 68,182 shares of common stock and guaranteed a selling price of
         $3.765 on those shares to the vendors of Surplus. Pursuant to this
         guarantee, the Company paid $77,000 in 2001. This amount has been
         included in the loss on disposition of subsidiaries.
<PAGE>

                             ABLEAUCTIONS.COM, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                DECEMBER 31, 2001



8.   BUSINESS COMBINATIONS (Continued)

     b)  On August 31, 2001, the Company disposed of its 100% interest in Warex
         Supply Ltd. ("Warex") for consideration of $1.

         The carrying values of assets and liabilities of Warex that were sold
         were as follows:

         Accounts receivable                       $   28,361
         Inventory                                     65,465
         Other assets                                  32,445
         Liabilities                                  (25,707)
                                                   ----------

                                                   $  100,564
                                                   ==========

         The Company recognized a loss of $100,563 on the sale.

         The revenues and expenses of Warex, until the date of disposition, have
         been presented as discontinued operations.

9.   FAILED ACQUISITION

     On September 24, 2001, the Company acquired all of the issued and
     outstanding shares of iCollector PLC ("iCollector") for consideration as
     follows:

     i)  The issue of 4,150,357 shares of common stock at a value of $5,935,014.

     ii) The issue of non-interest bearing and unsecured promissory notes
         ("deferred consideration notes") for a face amount of $2,988,258, which
         are due to be repaid September 13, 2002. These deferred consideration
         notes are convertible into shares of common stock of the Company at
         $1.43 per share at the option of the Company, subject to regulatory
         listing and shareholder approvals as required.

         The deferred consideration notes have been recorded at fair market
         value based on an implicit interest rate of 12% per annum, such that an
         unamortized discount to face value of $2,679,471 has been recorded. As
         at December 31, 2001, the discounted amount of the deferred
         compensation notes is $2,762,808.
<PAGE>

                             ABLEAUCTIONS.COM, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                DECEMBER 31, 2001



9.   FAILED ACQUISITION (Continued)

     iii)  The Company has also issued non-interest bearing unsecured promissory
           notes ("earnout consideration notes") in the amount of $5,000,000,
           which are payable on September 30, 2002, only if iCollector satisfies
           certain revenue and transaction milestones during the month of July
           2002. These earnout consideration notes are convertible into shares
           of common stock of the Company, at the fair market value of such
           shares at the date of conversion, at the sole option of the Company,
           subject to a minimum of 2,000,000 shares and a maximum of 3,500,000
           shares in aggregate, as well as regulatory, listing and shareholder
           approval. The amount of the obligation to the Company in respect to
           the earnout consideration notes, if any, will be recorded at such
           time as the amount of such obligation can be reasonably determined.

           The total recorded cost to the Company of the acquisition including
           estimated transaction costs of $342,797, was $8,957,281. In December
           2001, the Company realized that it was not able to finance the
           ongoing operations of iCollector and, as a result, the Company was
           placed into formal liquidation. The investment, net of reimbursed
           expenses by iCollector, has been written off as loss from failed
           acquisition.

10.  PROMISSORY NOTE

<TABLE>
<CAPTION>
                                                                                  2001           2000
                                                                               --------------------------
     <S>                                                                       <C>          <C>
     Promissory note, interest at 9% per annum, repayment at $8,569 per month
      including principal and interest, secured by charge over land and
      building, due July 24, 2028
                                                                               $ 1,040,310  $  1,052,171

      Less:  Current portion                                                        (9,592)       (8,479)
                                                                               --------------------------

                                                                               $ 1,030,718  $  1,043,692
                                                                               ==========================
</TABLE>

11.  CAPITAL STOCK

     In October and December 2001, the Company issued a total of 4,150,359
     shares of common stock at an aggregate value of $5,935,014 as partial
     consideration for the acquisition of iCollector PLC, a company
     incorporated in the United Kingdom (Note 9).
<PAGE>

                             ABLEAUCTIONS.COM, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                DECEMBER 31, 2001


12.  WARRANTS

     As at December 31, 2001, the Company had 1,000,000 outstanding share
     purchase warrants entitling the holders to purchase one common share for
     each warrant held at a price of $6.00 per share up to March 25, 2002.

13.  SUPPLEMENTAL DISCLOSURES WITH RESPECT TO CASH FLOWS

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

     Cash paid for income taxes              $    3,148   $     4,989
                                             ========================

     Cash paid for interest                  $   91,069   $    91,775
                                             ========================

     During the year ended December 31, 2001:

     a)  The Company issued 4,150,359 shares of common stock at an aggregate
         value of $5,935,014 as partial consideration for the acquisition of
         iCollector PLC.

     b)  The Company recorded $210,204 as stock based compensation expense.

     c)  The Company issued promissory notes at a discounted value of
         $2,679,471 as partial consideration for the acquisition of iCollector
         P.L.C.

     d)  The Company received a promissory note in the amount of $79,280 as
         partial proceeds for the sale of its investment in Johnston's Surplus
         Office Systems Ltd.

     During the year ended December 31, 2000:

     a)  The Company issued 53,405 shares of common stock at an aggregate
         deemed value of $360,805 to purchase the assets of Falcon Trading
         Inc.

     b)  The Company issued 155,486 shares of common stock at an aggregate
         deemed value of $1,243,888, and assumed a promissory note in the
         amount of $1,056,112, as partial consideration for the purchase of a
         building and land in Scottsdale, Arizona.

     c)  The Company issued 30,625 shares of common stock at an aggregate
         deemed value of $245,000 as partial consideration for the purchase of
         certain assets of Mesler's Auction House.
<PAGE>

                             ABLEAUCTIONS.COM, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                DECEMBER 31, 2001



13.    SUPPLEMENTAL DISCLOSURES WITH RESPECT TO CASH FLOWS (Continued)

       d)  The Company issued 10,000 shares of common stock at an aggregate
           deemed value of $70,000 to purchase certain assets of Auctions West
           Sales Corporation.

       e)  The Company issued 50,000 shares of common stock at an aggregate
           deemed value of $350,000 as partial consideration for the purchase of
           Ehli's Commercial/Industrial Auctions Inc.

       f)  The Company issued 4,822 shares of common stock at an aggregate
           deemed value of $34,478 to acquire rights to a trademark from Simon
           Fraser University.

       g)  The Company issued 68,182 shares of common stock at an aggregate
           deemed value of $513,410 as partial consideration for the purchase of
           Johnston's Surplus Office Systems.

       h)  The Company issued 6,900 shares of common stock at an aggregate
           deemed value of $55,200 as partial consideration for the purchase of
           Warex Supply Ltd.

       i)  The Company recorded $120,019 of stock based compensation expense.


14.    INCOME TAXES

       a)  The Company's total deferred tax asset is as follows:

<TABLE>
<CAPTION>
                                                                                      2001               2000
                                                                             --------------------------------------
<S>                                                                         <C>                   <C>
          Tax benefit relating to net operating loss carryforwards
                                                                             $       4,364,361   $       3,510,361
          Valuation allowance                                                       (4,364,361)         (3,510,361)
                                                                             -- -----------------------------------
                                                                             $               -   $               -
                                                                             ======================================
</TABLE>
           The Company had net operating losses carried forward of approximately
           $10,000,000 which expire in years ranging from 2007 to 2021. The
           Company has provided a full valuation allowance on the deferred tax
           asset because of the uncertainty of realizability.
<PAGE>

                             ABLEAUCTIONS.COM, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                DECEMBER 31, 2001



14.    INCOME TAXES (Continued)

       b)  Following is a reconciliation between expected income tax benefit and
           actual, using the applicable statutory income tax rates for the year
           ended December 31, 2001:

          Expected tax benefit                             $   1,077,498
          Certain non-deductible expenses                       (223,498)
          Change in valuation allowance                         (854,000)
                                                          -----------------

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


15.    RELATED PARTY TRANSACTIONS

       During the year ended December 31, 2001, the following payments were made
       to a company or companies controlled by a director:

<TABLE>
<CAPTION>
                                                                                          2001             2000
                                                                                   --------------------------------
<S>                                                                               <C>             <C>
      Rent, leasehold improvements, and repairs and maintenance                     $     129,770   $      315,963
      Purchase of equipment and consulting services                                             -          420,622
      Website development and maintenance costs                                           149,781           25,743
      Sales of goods                                                                            -           52,326
      Management fees                                                                     154,949          191,100
</TABLE>

16.    STOCK BASED COMPENSATION EXPENSE

       Statement of Financial Accounting Standards No. 123, "Accounting for
       Stock-Based Compensation", encourages but does not require companies to
       record compensation cost for stock-based employee compensation plans at
       fair value. The Company has chosen to account for stock-based
       compensation using Accounting Principles Board Opinion No. 25,
       "Accounting for Stock Issued to Employees". Accordingly, compensation
       cost for stock options is measured as the excess, if any, of quoted
       market price of the Company's stock at the date of grant over the option
       price. During the 2001 year, compensation costs of $Nil (2000 - 640,108)
       were incurred based on options granted. These costs will be recognized
       over a period of three years, which is the average vesting period of
       options.

       During the year ended December 31, 2001, stock based compensation expense
       of $210,204 (2000 - $120,019) was recognized in the consolidated
       statement of operations.
<PAGE>

                             ABLEAUCTIONS.COM, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                DECEMBER 31, 2001



16.    STOCK BASED COMPENSATION EXPENSE (Continued)

       A summary of the Company's stock option plan and changes during 2001 and
       2000 are presented below:

<TABLE>
<CAPTION>
                                                                  2001                             2000
                                                      -----------------------------    -----------------------------
                                                                       WEIGHTED                         WEIGHTED
                                                         NUMBER         AVERAGE           NUMBER         AVERAGE
                                                           OF          EXERCISE             OF          EXERCISE
                                                         SHARES          PRICE            SHARES          PRICE
                                                      -------------- --------------    -------------- --------------
<S>                                                  <C>            <C>                <C>            <C>
      Outstanding, beginning of year                     1,387,500   $    4.94              812,500   $     3.20

      Granted                                                    -           -              694,500         6.95
      Forfeited                                           (166,000)       7.41              (42,500)        5.22
      Exercised                                                  -           -              (77,000)        4.60
                                                      -----------------------------    -----------------------------

      Outstanding, end of year                           1,221,500   $    4.76            1,387,500   $     4.94
                                                      =============================    =============================

      Weighted average fair value of options
        granted during the year                                      $       -                        $     4.47
                                                                     ==============                   ==============
</TABLE>

       The following table summarizes information about employee and director
       stock options outstanding and exercisable under the Company's stock
       incentive plans at December 31, 2001:

                                             AVERAGE
                            WEIGHTED        REMAINING
          EXERCISE           NUMBER        CONTRACTUAL           NUMBER
            PRICE         OUTSTANDING          LIFE            EXERCISABLE
     -------------------------------------------------------------------------

     $      3.20             788,000            2.8               788,000
            5.00              22,500            3.0                22,500
            6.50              30,000            3.3                10,000
            6.53              96,000            3.4                 5,333
            7.15              50,000            3.4                10,000
            7.00             135,000            3.6                30,000
            8.66             100,000            3.6                33,333
                      -----------------                     ------------------
                           1,221,500                              899,166
                      -----------------                     ------------------
<PAGE>

                             ABLEAUCTIONS.COM, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                DECEMBER 31, 2001



16.    STOCK BASED COMPENSATION EXPENSE (Continued)

       Compensation
       ------------

       Had compensation cost been recognized on the basis of fair value,
       pursuant to Statement of Financial Accounting Standards No. 123, net loss
       and loss per share would have been adjusted as follows:

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

      Loss for the year
           As reported            $      (11,434,029)  $      (11,837,363)
                                  =========================================

           Pro-Forma              $      (11,434,029)  $      (12,666,225)
                                  =========================================

      Basic and diluted
           loss per share
           As reported            $            (0.52)  $            (0.58)
                                  =========================================

           Pro-Forma              $            (0.52)  $            (0.63)
                                  =========================================

       The fair value of each option granted during the 2001 year was estimated
       using the Black-Scholes option pricing model assuming a dividend yield of
       0.0%, expected volatility of 60% to 126%, and risk free interest rates of
       6.0% to 6.7% and weighted average expected option terms of 2 to 5 years.


17.    COMMITMENTS

       a)  The Company leases office space and equipment under non-cancellable
           operating leases extending for periods in excess of one year. Future
           commitments under such lease agreements are as follows:

                              2002          $        184,080
                              2003                   187,950
                              2004                   190,710
                              2005                   190,710
                              2006                   134,070
                              Thereafter             390,000
                                            ------------------
                                            $      1,277,520
                                            ==================
<PAGE>

                            ABLEAUCTIONS.COM, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                DECEMBER 31, 2001



17.    COMMITMENTS (Continued)

           Included in these totals are amounts with respect to an agreement
           made by the Company effective March 1, 2000 with a company controlled
           by a director of the Company, to lease operating premises in
           Coquitlam, British Columbia. Under the agreement, the Company must
           make lease payments of $12,840 per month, plus operating costs, until
           February 28, 2010.

       b)  Future commitments pursuant to the promissory note described in
           Note 10 are as follows:

                         2002           $          9,592
                         2003                     10,489
                         2004                     11,473
                         2005                     12,549
                         2006                     13,726
                         Thereafter              982,481
                                        ------------------

                                        $      1,040,310
                                        ==================

       c)  The Company maintains employment agreements with various key
           management personnel.


18.    INTERNATIONAL OPERATIONS

       The external sales and long-lived assets of the Company's businesses by
       geographical region are summarized below:


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

      External Sales
           United States     $       4,088,844   $       5,344,925
           Canada                    6,704,375           5,302,288
                             --------------------------------------

                             $      10,793,219   $      10,647,213
                             ======================================

      Long-Lived Assets
           United States     $       2,027,358   $       2,756,222
           Canada                      850,093           1,549,202
                             --------------------------------------

                             $       2,877,451   $       4,305,424
                             =================== ==================
<PAGE>

                            ABLEAUCTIONS.COM, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                DECEMBER 31, 2001



19.    RECENT ACCOUNTING PRONOUNCEMENTS

       In July 2001, the Financial Accounting Standards Board ("FASB") issued
       SFAS No. 141, "Business Combinations," and SFAS No. 142, "Goodwill and
       Other Intangibles Assets." SFAS No. 141 eliminates the pooling-of-
       interests method of accounting for business combinations, except for
       qualifying business combinations that were initiated prior to July 1,
       2001. Under SFAS No. 142, goodwill and indefinite-lived intangible assets
       are no longer amortized, but are reviewed annually, or more frequently if
       impairment indicators arise, for impairment. The Company is required to
       adopt SFAS No. 142 on January 1, 2002. The Company does not believe the
       adoption of SFAS Nos. 141 and 142 will have a material effect on its
       consolidated financial statements.

       In August 2001, the FASB issued SFAS No. 143, "Accounting for Asset
       Retirement Obligations." SFAS No. 143 requires that the fair value of a
       liability for an asset retirement obligation be recognized in the period
       in which it is incurred if a reasonable estimate of fair value can be
       made. The associated asset retirement costs are capitalized as part of
       the carrying amount of the long-lived assets. The Company is required to
       adopt SFAS No. 143 on January 1, 2003, and it does not believe the
       adoption of SFAS No. 143 will have a material effect on its consolidated
       financial statements.

       In October 2001, the FASB issued SFAS No. 144, "Accounting for the
       Impairment or Disposal of Long-Lived Assets," which supersedes SFAS No.
       121, "Accounting for the Impairment of Long-Lived Assets and for
       Long-Lived Assets to Be Disposed Of," and provides a single accounting
       model for long-lived assets to be disposed of. The Company is required to
       adopt SFAS No. 144 on January 1, 2002, and it does not believe the
       adoption of SFAS No. 144 will have a material effect on its consolidated
       financial statements.


20.    COMPARATIVE FIGURES

       Certain comparative figures have been reclassified to conform with the
       current year's presentation.