UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                                   FORM 10-KSB

                 ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                   FOR THE FISCAL YEAR ENDED DECEMBER 31, 2001
                        COMMISSION FILE NUMBER 000-30237

                             VICTOR INDUSTRIES, INC.
               (Exact name of registrant as specified in charter)

                Idaho                                    91-078484114
    -------------------------------                   ------------------
    (State or other jurisdiction of                    (I.R.S. Employer
    incorporation or organization)                    Identification No.)

  4810 NORTH WORNATH ROAD, MISSOULA, MONTANA                59804
 --------------------------------------------             ----------
   (Address of principal executive offices)               (Zip Code)

Registrant's telephone number, including area code     (406)  251-8501
                                                       ---------------


Securities registered pursuant to section 12(b) of the Act:

   Title of Class               Name of each exchange on which registered
        NONE                                      NONE
        ----                                      ----

           Securities registered pursuant to section 12(g) of the Act:
                                  Common Stock

                                (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  registrant's   knowledge,  in  definitive  proxy  of  information
statements  incorporated  by reference  in Part 10-KSB or any  amendment to this
Form 10-KSB. {X}

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

State the  aggregate  market  value of the voting  stock held by  non-affiliates
computed by reference  to the price at which the stock was sold,  or the average
bid and asked  prices of such stock as of a  specified  date  within the past 60
days: As of April 2, 2002,  the aggregate  market price of the voting stock held
by non-affiliates was approximately $1,265,089.

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest  practicable date: As of April 2, 2002, the Company had
outstanding 74,038,692 shares of its common stock, par value $0.05.



<PAGE>



                                TABLE OF CONTENTS

  ITEM NUMBER AND CAPTION                                                PAGE
  -----------------------                                                ----
  PART I

  ITEM 1.     DESCRIPTION OF BUSINESS                                      3
  ITEM 2.     DESCRIPTION OF PROPERTY                                      5
  ITEM 3.     LEGAL PROCEEDINGS                                            5
  ITEM 4.     SUBMISSION OF MATTERS TO A VOTE OF
              SECURITY HOLDERS                                             5

  PART II

  ITEM 5.     MARKET FOR REGISTRANTS COMMON EQUITY AND
              RELATED STOCKHOLDER MATTERS                                  5
  ITEM 6.     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
              FINANCIAL CONDITION OR PLAN OF OPERATION                     7
  ITEM 7.     FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA                 10
  ITEM 8.     CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
              ON ACCOUNTING AND FINANCIAL DISCLOSURE                      21

  PART III

  ITEM 9.     DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND
              CONTROL PERSONS: COMPLIANCE WITH SECTION 16(a)
              OF THE EXCHANGE ACT                                         21
  ITEM 10.    EXECUTIVE COMPENSATION                                      22
  ITEM 11.    SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
              OWNERS AND MANAGEMENT                                       22
  ITEM 12.    CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS              22
  ITEM 13.    EXHIBITS AND REPORTS ON FORM 8-K                            22



                                       2
<PAGE>



                                     PART I

ITEM 1. DESCRIPTION OF BUSINESS

BUSINESS

Victor Industries,  Inc. was originally organized under the laws of the State of
Idaho on January 19, 1926 under the name of Omo Mining and Leasing  Corporation.
The Company was renamed Omo Mines  Corporation on January 19, 1929. The name was
changed again on November 14, 1936 to Kaslo Mines Corporation and finally Victor
Industries, Inc. on December 24, 1977.

We have not recorded any significant revenue for the past two years and there is
substantial  doubt about us  continuing  as a going  concern as expressed by our
auditors  in their  audit  report as of December  31,  2001  without  funding to
develop assets and profitable operations.

We have been in a transition stage for the last year as we have been moving from
research and development activities to production mode.

We intend to be engaged in the sale and distribution of various forms of zeolite
products.  We will contract with  independent  contractors to mine and transport
zeolite from properties the  contractors own or lease to a contract  milling and
packaging  facility.  We will then market the packaged and bulk ordered  zeolite
through distributors and under distributor's private labels.

Our current product focus centers on two distinct products related to the use of
the mineral  known as zeolite.  Zeolites  have the unique  distinction  of being
natures only negatively charged mineral.  The angstrom sized micropore structure
of zeolites and ion exchange capacity allow zeolites to act as molecular sieves,
which make them useful for metal and toxic chemical absorbents, water softeners,
gas absorbents,  radiation absorbents and soil and fertilizer amendments.  There
are approximately  fifty different types of zeolite in existence.  Many of these
are synthetic  zeolites designed as specific  molecular sieves.  Clinoptilolite,
one type of natural zeolite, is our primary focus.  Clinoptilolite's  absorption
capabilities of ammonia  provide a number of  applications  in the  agricultural
industry.

We believe that the two primary  sources of nitrate and phosphate  pollution are
large animal feeding operations and fertilizers.

We have made the decision to focus on the fertilizer market first.  However, the
market  for  absorbing  nutrients  from  large  animal  feeding  operations  and
municipal waste systems while  simultaneously  producing an organic slow-release
fertilizer is our longer-term goal.

Our first product focuses on utilizing zeolite for slow released fertilizer.  We
recently filed a patent  application  for a new zeolite  proprietary  fertilizer
compound.  We have not received any comments  from the U.S.  Patent Office as of
the date of this filing.  This  compound is  formulated  around a demand  driven
release of nutrients.

We have successfully  produced samples of our fertilizer compound and have begun
sending  shipments to  distributors  and  producers of  fertilizers  for further
testing and evaluation.  We had intended to open our first  production  facility
before the end of 2001.  However,  during the quarter ended December 31, 2001 we
experienced  weather  related  problems,  which  delayed our initial  pouring of
concrete  pads for the  facility.  In  addition,  on February  21, 2002 the U.S.
Securities and Exchange Commission filed an action against the Company,  certain
shareholders  and related  parties.  This action claimed certain illegal acts by
the  shareholders  and related  parties.  The  investigation by the SEC was very
thorough and consumed a substantial amount of management's time. The SEC made an
offer of settlement in the matter,  which management  accepted. A consent decree
was  signed to settle  the  matter  and allow the  Company  to  continue  in its
business,  although it delayed the  implementation of our business plan by three
to four months.


                                       3
<PAGE>

We intend to use  zeolite  to absorb  the  ammonia  that is  released  by animal
discharge from large animal feeding operations.  We intend to then use the fiber
that is  created  from the  absorption  process  and turn it into a slow  demand
release  fertilizer.  We believe that wide spread use of our absorption  process
will significantly reduce pollution from these feeding operations while reducing
the leaching of nitrates and  phosphates  into the ground water.  Because of the
absorption capabilities of zeolite, we believe that our fertilizer compound will
work effectively for up to three years,  depending on the type of crop or plants
being fertilized, thereby reducing the need for multiple fertilizer applications
every year. Our zeolite  fertilizer  compound is expected to absorb up to 45% of
its  weight  in water and  slowly  release  it when the soil  begins to dry thus
extending the life of the fertilizer application.  We cannot give any assurances
that we will be  successful  in  receiving a patent for our  compound or that we
will be able to produce a marketable or profitable product.

The other product we have developed  using zeolite  revolves around large animal
feeding  operations.  This  product is designed to reduce the amount of nitrates
produced by "super-dairies".  These nitrates have the potential of polluting the
groundwater as the ammonia breaks down and seeps into the reservoirs. We believe
that mixing  zeolite  with the manure will  result in several  benefits  for the
"super-dairies".  First,  the  zeolite  will  fix a  percentage  of the  ammonia
compounds  by  preventing  the  bacteria  from  breaking  down the ammonia  into
nitrates resulting in less pollution to the groundwater. Second, offensive odors
will be reduced. Third, the operators of the "super-dairies" spend an inordinate
amount of their  productive  hours  trying to control  the spread of the manure.
Zeolite is  hydroscopic,  absorbing  nine  times its weight in water.  The drier
manure will result in a more stable manure pile saving the super dairy  operator
time and labor.  Fourth, the composted manure is sold to plant nursery operators
who normally add zeolite to their soils.

The Environmental Protection Agency "EPA" has proposed strict new regulations to
reduce water  pollution from large  industrial  feed lot  operations,  affecting
nearly 39,000 feed plants nationwide, including dairies, chicken, pig and turkey
farms.  Agricultural  pollution  is both a direct  and  indirect  cause of human
health impacts. The EPA estimates that 128 billion pounds of manure is generated
each year. We estimate that feed lot operators could use between five and thirty
pounds  of our  proprietary  compound  for  each  ton  of  manure  generated  to
effectively  remove  ammonia and  phosphates  from the waste stream,  creating a
large demand for our compound.  We are  additionally  marketing our  proprietary
compound  solutions to the golf course and  horticulture  industries.  We cannot
give any  assurance  that we will be able to compete or generate  sales in these
markets.

Many of our  competitors  are  better  financed  and more  established  than us.
Several  competitors  are potential  suppliers of raw and/or  finished  product.
Competition is based on a combination  of factors.  The purity of the product is
one consideration, while service and reliability are important requirements.

The consumer of the zeolite  products  must be made aware of the benefits of the
use of zeolite.  It is our opinion that a  combination  of focused  direct sales
efforts  through a strong  distribution  network,  combined  with a broad  based
advertising medium is our best marketing  strategy.  We are currently  searching
for a senior  level  person who has industry  experience  within the  fertilizer
market. This position will be responsible for developing a distribution  network
for our fertilizer  product.  There can be no assurances that these efforts will
be successful.


GOVERNMENT REGULATION

We  do  not  currently  hold  any  patents,  trademarks,  licenses,  franchises,
concessions  or royalty  agreements.  There are no labor  contracts and no union
agreements.  We have filed a patent  application for our fertilizer  product but
have not received any comments from the patent office.

We do not  anticipate  significant  delays in  government  approval  to operate.
Zeolite has received a GRAS (generally regarded as safe) rating from the federal
government. The zeolite mines that we contract with are fully permitted and have
operated in each of the last five years.  If  government  approval  was withheld
from one of the sources of raw material we believe we could access supplies from
other operators.

If funding becomes available to the Company, we may develop our own zeolite mine
and  install  the  milling   and   bagging   equipment   necessary   to  operate
independently. We cannot assure you that such funding will materialize.


                                       4
<PAGE>

The costs and effects of compliance with environmental laws (federal,  state and
local) are not born directly by us but through the costs imposed on the contract
miners.  Increased  costs to the mines  will  result in higher  costs of the raw
material we purchase.


ITEM 2. DESCRIPTION OF PROPERTY

We do not presently own any real property.  Our current office space is provided
on a gratis basis by our Chief Executive  Officer.  The Company  currently holds
four mining claims.  The cost of holding these claims are approximately $400 per
year.  None of these claims are  currently in operation.  If we begin  operating
these claims we will be renting space at the claim site.

We currently have 2 employees.  We rely on independent contractors to handle the
mining  operations.  We  intend  to employ  independent  distributors  for sales
efforts,  as well as  mining,  milling  and  packaging.  Our  directors  have no
contract with the Company and are receiving no pay at the present. The directors
have agreed to work for no pay until we have  achieved  positive  cash flow from
operations.  There is no deferment or liability  being  accrued by us under this
arrangement.


ITEM 3. LEGAL PROCEEDINGS

February 21, 2002, the U.S.  Securities and Exchange  Commission filed an action
against the  Company,  certain  shareholders  and related  parties.  This action
claimed certain illegal acts by the shareholders and related parties.  A consent
decree was signed to settle the  matter and allow the  Company to  continue  its
business  operations.  Legal counsel for the Company is of the opinion that this
action will have no material financial effect on the Company.


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

We did not hold a  shareholders  meeting  during the time period covered by this
report.


                                    PART II


ITEM 5. MARKET FOR COMMON EQUITY AND RELATED
        STOCKHOLDER MATTERS


MARKET FOR COMMON STOCK

Our Common Stock is traded in the over-the-counter  market and quoted on OTC EBB
under the symbol "VICI" and quoted in the pink sheets  published by the National
Quotations  Bureau.  From  time to  time,  a very  small  number  of  securities
broker-dealers  published only intermittent quotations for the Common Stock, and
there was no continuous,  consistent  trading market.  The trading volume in the
Common Stock has been and is extremely  limited.  During the above  period,  the
limited  nature of the trading  market  created the  potential  for  significant
changes  in the  trading  price for the Common  Stock as a result of  relatively
minor  changes in the supply and  demand for Common  Stock and  perhaps  without
regard to our business  activities.  Because of the lack of specific transaction
information and our belief that quotations  during the period were  particularly
sensitive  to actual or  anticipated  volume of  supply  and  demand,  we do not
believe that such  quotations  during this period are reliable  indicators  of a
trading market for the Common Stock.


Transfer Agent

The transfer agent for our Common Stock is Florida Atlantic Stock Transfer, 7130
Nob Hill Road, Tamarac, Florida 33321.


                                       5
<PAGE>

Subject to the above  limitations,  we  believe  that  during  the eight  fiscal
quarters  preceding  the date of this filing,  the high and low sales prices for
the Common  Stock  during each quarter are as set forth in the table below (such
prices are without retail mark-up, mark-down, or commissions).  The sales prices
were obtained from OTC Bulletin Board NASDAQ Trading & Market Services.


  QUARTER ENDED                                    HIGH        LOW
  -------------                                    ----        ---

December 31, 2001                                  .29         .03
September 30, 2001                                 .06         .01
June 30, 2001                                      .13         .02
March 31, 2001                                     .19         .03
December 31, 2000                                  .203        .031
September 30, 2000                                 .25         .078
June 30, 2000                                      .312        .078
March 31, 2000                                     .312        .078


The ability of an individual  shareholder  to trade their shares in a particular
state may be subject to various rules and regulations of that state. A number of
states  require  that an issuer's  securities  be  registered  in their state or
appropriately  exempted from registration before the securities are permitted to
trade in that  state.  Further,  most  likely our shares  will be subject to the
provisions of Section 15 (g) and Rule 15g-9 of the  Securities  and Exchange Act
of 1934, as amended (the  "Exchange  Act"),  commonly  referred to as the "penny
stock" rule. Section 15 (g) sets forth certain  requirements for transactions in
penny stocks and Rule 15g-9(d)(1)  incorporates the definition of penny stock as
that used in Rule 3a51-1 of the Exchange Act.

The commission  generally defines penny stock to be any equity security that has
a market price less than $5.00 per share,  subject to certain  exceptions.  Rule
3a51-1  provides  that any equity  security  is  considered  to be a penny stock
unless that security is: registered and traded on a national securities exchange
meeting  specified  criteria set by the commission;  authorized for quotation on
the NASDAQ Stock Market;  issued by a registered  investment  company;  excluded
from the  definition  on the basis of price (at  least  $5.00 per  share) or the
issuer's net tangible assets; or exempted from the definition by the Commission.
If our  shares  are deemed to be a penny  stock,  trading in the shares  will be
subject to additional  sales practice  requirements on  broker-dealers  who sell
penny  stocks  to  persons  other  than  established  customers  and  accredited
investors,  generally  persons  with  assets in excess of  $1,000,000  or annual
income exceeding $200,000, or $300,000 together with their spouse.

For  transactions  covered by these  rules,  broker-dealers  must make a special
suitability  determination  for the  purchase of such  securities  and must have
received  the  purchaser's  written  consent  to the  transaction  prior  to the
purchase.  Additionally,  for any  transaction  involving a penny stock,  unless
exempt,  the rules require the delivery,  prior to the first  transaction,  of a
risk  disclosure  document  relating to the penny stock market.  A broker-dealer
also must disclose the  commissions  payable to both the  broker-dealer  and the
registered representative,  and current quotations for the securities.  Finally,
monthly  statements  must be sent  disclosing  recent price  information for the
penny stocks held in the account and  information on the limited market in penny
stocks. Consequently,  these rules may restrict the ability of broker-dealers to
trade and/or maintain a market in our Common Stock and may affect the ability of
shareholders to sell their shares.


Dividend Policy

We have not paid  any  dividends  to  date.  We can make no  assurance  that our
proposed  operations  will result in  sufficient  revenues to enable  profitable
operations or to generate  positive cash flow. For the  foreseeable  future,  we
anticipate  that we will use any funds  available  to finance  the growth of our
operations and that we will not pay cash dividends to stockholders.  The payment
of  dividends,  if any, in the future is within the  discretion  of the Board of
Directors and will depend on our earnings,  capital  requirements,  restrictions
imposed by lenders and financial condition and other relevant factors.


                                       6
<PAGE>

RECENT SALES OF UNREGISTERED SECURITIES

During the fiscal year ended  December 31, 2001, we issued the following  shares
of our common stock:

o        March 14, 2001 we issued 100,000 to Jean Lorentz for services rendered.
o        April 25, 2001 we issued 100,000 to David Boulter for  compensation for
         continued service.
o        April 25, 2001 we issued 500,000 to Richard Leary for signing bonus.
o        May 1, 2001 we issued  3,000,000  to Stephen A. Kohn &  Associates  for
         efforts as investment banker to raise $250,000.
o        July 11, 2001 we issued 50,000 to  Webdoodle/Brandon  Long for web page
         design.
o        July  11,  2001 we  issued  50,000  to Lana  Pope/LJM  for  bookkeeping
         services.
o        July 11, 2001 we issued 500,000 to Gary Rohwer for consultant fees.
o        July 11, 2001 we issued  4,750,000 to Forest Minerals for conversion of
         debt $95,000 valued at $.02 per share.
o        July 11, 2001 we issued  4,750,000  to Penny Sperry for  conversion  of
         debt $95,000 valued at $.02 per share.
o        July 11,  2001 we issued  50,000 to Brandon  Long for  construction  of
         company website.
o        July 11,  2001 we issued  69,000 to Lee  Gordon  for rent of  temporary
         company space.
o        October 9, 2001 we issued 600,000 to Angela Hamblin for $25,000 cash.
o        November  8, 2001 we issued  100,000  to  Dennis M.  Charney  for legal
         services.
o        November 8, 2001 we issued 1,000,000 to Richard Jezo for $10,000 cash.


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

The financial  information set forth in the following  discussion should be read
in conjunction with, and qualified in its entirety by, the financial  statements
of the Company included elsewhere herein.


FINANCIAL CONDITION AND CHANGES IN FINANCIAL CONDITION


Overall Operating Results

We did not have any zeolite  sales for the year ended  December 31, 2001.  Prior
year  revenues  were  $38,700  which   consisted   primarily  of  $36,900  which
represented  forgiveness of debt for several aged payables.  We anticipate  that
increased  marketing  efforts and the successful  approval of our patent for the
fertilizer compound in the future will generate the required revenues to sustain
our anticipated growth. There can be no assurances that such sales will occur or
that our patent  application will be approved.  Operating expenses were $500,400
for the  current  year and were  primarily  incurred  for  professional,  legal,
accounting  and  consulting   fees  incurred  in  connection   with  the  patent
application   process  as  well  as  compliance   costs   incurred  with  filing
requirements with the SEC. The comparable  operating expenses for the prior year
were $455,800.  These expenses were incurred for consulting  fees that relate to
the  registering  of our  securities in  connection  with the filing of SEC form
10SB12G as well as general  business  development;  management  fees paid to our
Chief Executive Officer in lieu of wages;  licenses and fees for registering our
securities;  professional  fees for legal and accounting fees for completing our
quarterly filing requirements for the Securities and Exchange Commission; travel
expenses  for  marketing  and  attending  trade shows and  non-cash  charges for
services rendered where the payee accepted our common stock in lieu of cash.

We  incurred a net loss for the year ended  December  31,  2001 of  $500,400  as
compared  to a net  loss of  $417,100  for the  year  2000.  These  losses  were
attributable to the aforementioned operating expenses.


Operating Losses

We have  accumulated  approximately  $3,534,900  million of net  operating  loss
carryforwards as of December 31, 2001, that may be offset against future taxable
income.  There  will  be  limitations  on  the  amount  of  net  operating  loss
carryforwards  that  can be  used  due  to the  change  in  the  control  of the
management  of the Company.  No tax benefit has been  reported in the  financial
statements,   because  we  believe  there  is  a  50%  or  greater   chance  the
carryforwards will expire unused. Accordingly, the potential tax benefits of the
loss carryforwards is offset by valuation allowance of the same amount.


                                       7
<PAGE>

Liquidity and Capital Resources

We have been financed through related parties and a convertible note offering as
there  has been no  substantial  revenue  generated  to date.  In  addition,  we
obtained a loan of $95,000  during the  current  fiscal year from an officer and
shareholder  in order to fund  continuing  operations.  This loan,  as well,  as
another note payable were converted  during the quarter ended September 30, 2001
into shares of common  stock as noted  below.  In  addition,  during the quarter
ended  December  31,  2001 we sold,  pursuant to a S-8  Registration,  4,375,000
shares of our common stock for a total of $175,000 ($0.04 per share).

Two of our largest  shareholders  converted the  convertible  debentures owed to
them by us into shares of our common stock.  In accordance with the terms of the
debentures,  the  conversion  price per share was $0.02 per share,  the  closing
price of our common stock as of July 12, 2001. Ms. Penny Sperry,  our Treasurer,
converted her debenture in the amount of $95,000 into  4,780,000  common shares.
Forest Minerals,  Inc. converted their debenture totaling $95,000 into 4,750,000
common shares. None of these shares have been registered with the Securities and
Exchange  Commission and therefore will be restricted pursuant to Securities and
Exchange Commission regulations.

We will need  additional  financing in order to implement  our business plan and
continue  as a  going  concern.  We do not  currently  have  a  source  for  any
additional  financing and we cannot give any assurances  that we will be able to
secure any financing.


New Accounting Pronouncements

In  June  2001,  the  Financial   Accounting  Standards  Board  ("FASB")  issued
Statements of Financial  Accounting  Standards  No. 141 "Business  Combinations"
("SFAS 141") and No. 142  "Goodwill  and Other  Intangible  Assets ("SFAS 142").
SFAS 141 requires all business combinations initiated after June 30, 2001, to be
accounted for under the purchase method. For all business combinations for which
the date of acquisition is after June 30, 2001,  SFAS 141  establishes  specific
criteria for the recognition of intangible  assets  separately from goodwill and
requires  unallocated  negative  goodwill  to be written off  immediately  as an
extraordinary  gain,  rather than deferred and  amortized.  SFAS 142 changes the
accounting for goodwill and other  intangible  assets after an acquisition.  The
most significant changes made by SFAS 142 are: 1) goodwill and intangible assets
with  indefinite  lives will no longer be amortized;  2) goodwill and intangible
assets with  definitive  lives must be tested for impairment at least  annually;
and 3) the amortization  period for intangible  assets with finite lives will no
longer be limited to forty years. The company does not believe that the adoption
of these  statements  will have a  material  effect on its  financial  position,
results of operations or cash flows.

In June 2001,  the FASB also  approved for issuance  SFAS 143 "Asset  Retirement
Obligations."  SFAS  143  establishes  accounting  requirements  for  retirement
obligations  associated  with  intangible  long-lived  assets,  including 1) the
timing of the liability recognition, 2) initial measurement of the liability, 3)
allocation of asset retirement cost to expense, 4) subsequent measurement of the
liability  and 5) financial  statement  disclosures.  SFAS 143 requires  that an
asset  retirement  cost should be capitalized as part of the cost of the related
long-lived asset and subsequently  allocated to expense using the systematic and
rational  method.  The Company will adopt the statement  effective no later than
January 1, 2003,  as required.  The  transition  adjustment  resulting  from the
adoption  of SFAS 143 will be  reported  as a  cumulative  effect of a change in
accounting  principle.  At this time,  the  Company  does not  believe  that the
adoption  of this  statement  will  effect its  financial  position,  results of
operations or cash flows.


                                       8
<PAGE>

In October 2001, the FASB also approved SFAS 144, "Accounting for the Impairment
or Disposal of Long-Lived  Assets." SFAS 144 replaces SFAS 121,  "Accounting for
the  Impairment of Long-Lived  Assets and for  Long-Lived  Assets to Be Disposed
Of." The new accounting  model for  long-lived  assets to be disposed of by sale
applies  to  all  long-lived  assets,  including  discontinued  operations,  and
replaces the provisions of APB Opinion No. 30, "Reporting  Results of Operations
-  Reporting  the  Effects  of  Disposal  of a Segment of a  Business'"  for the
disposal of segments of a business. Statement 144 requires that those long-lived
assets be measured  at the lower of  carrying  amount or fair value less cost to
sell, whether reported in continuing  operations or in discontinued  operations.
Therefore,  discontinued operations will no longer be measured at net realizable
value or  include  amounts  for  operating  losses  that have not yet  occurred.
Statement 144 also broadens the reporting of discontinued  operations to include
all components of an entity with operations that can be  distinguished  from the
rest of the entity and that will be  eliminated  from the ongoing  operations of
the  entity in a disposal  transaction.  The  provisions  of  Statement  144 are
effective  for  financial  statements  issued for fiscal years  beginning  after
December 15, 2001,  and,  generally,  are to be applied  prospectively.  At this
time, the Company cannot  estimate the effect of this statement on its financial
position, results of operations or cash flows.


Inflation

Our results of  operations  have not been  affected by  inflation  and we do not
expect inflation to have a significant effect on our operations in the future.


Forward-Looking Information

From  time  to  time,  we  or  our   representatives   have  made  or  may  make
forward-looking   statements,   orally  or  in  writing.   Such  forward-looking
statements  may be  included  in,  but not  limited  to,  press  releases,  oral
statements  made with the  approval  of an  authorized  executive  officer or in
various filings made by us with the Securities and Exchange Commission. Words or
phrases  "will  likely  result",   "are  expected  to",  "will  continue",   "is
anticipated",  "estimate",  "project or projected",  or similar  expressions are
intended to identify "forward-looking statements". Such statements are qualified
in their entirety by reference to and are accompanied by the above discussion of
certain  important  factors that could cause actual results to differ materially
from such forward-looking statements.

Management  is currently  unaware of any trends or  conditions  other than those
previously mentioned in the management's discussion and analysis that could have
a material  adverse  effect on the Company's  consolidated  financial  position,
future results of operations,  or liquidity.  However,  investors should also be
aware of factors that could have a negative  impact on the  Company's  prospects
and the consistency of progress in the areas of revenue  generation,  liquidity,
and generation of capital resources.  These include:  (i) variations in revenue,
(ii)  possible  inability  to attract  investors  for its equity  securities  or
otherwise raise adequate funds from any source should the Company seek to do so,
(iii)  increased  governmental  regulation,  (iv)  increased  competition,   (v)
unfavorable outcomes to litigation involving the Company or to which the Company
may  become a party in the  future  and,  (vi) a very  competitive  and  rapidly
changing operating environment.

The risks  identified  here are not all inclusive.  New risk factors emerge from
time to time and it is not  possible  for  management  to predict  all such risk
factors,  nor can it assess the impact of all such risk factors on the Company's
business or the extent to which any factor or  combination  of factors may cause
actual results to differ materially from those contained in any  forward-looking
statements. Accordingly, forward-looking statements should not be relied upon as
a prediction of actual results.




                                       9
<PAGE>



ITEM 7. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA




                                       10
<PAGE>



                          INDEX TO FINANCIAL STATEMENTS



                                TABLE OF CONTENTS

                                                                       PAGE
                                                                       ----

Independent Auditor's Report                                            F-2
Balance Sheets at December 31, 2001 and 2000                            F-3
Statement of Operations and Accumulated Deficits for the
  Years ended December 31, 2001 and 2000                                F-4
Statement of Cash Flows for the Years ended
  December 31, 2001 and 2000                                            F-5
Statement of Shareholders' Equity for the
  Years ended December 31, 2001 and 2000                                F-6
Notes to Financial Statements                                           F-7



                                       F-1


<PAGE>


                                  David I. Tow
                          Certified Public Accountant

               132 S. W. Oakridge Drive Port St. Lucie, FL 34984
                        (800)797-5884 (561)343-0919 FAX





To the Board of Directors
Victor Industries, Inc.
Missoula, Montana


I have audited the accompanying balance sheets of Victor Industries,  Inc. as of
December 31, 2000 and 2001 and the related statements of operations and retained
earnings  (accumulated   deficits),   statements  of  shareholders'  equity  and
statements of cash flows for the periods then ended. These financial  statements
are the  responsibility  of the Company's  management.  My  responsibility is to
express an opinion on these financial statements based on my audits.

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

In my opinion,  the accompanying  financial  statements  present fairly,  in all
material  respects,  the  financial  position of Victor  Industries,  Inc. as of
December 31, 2000 and 2001, the results of operations and its cash flows for the
periods then ended in conformity with generally accepted accounting principles.

David I. Tow
Certified Public Accountant

March 15, 2002

                                      F-2
<PAGE>


                             VICTOR INDUSTRIES, INC.
                                 BALANCE SHEETS
                               AS OF DECEMBER 31,

                                                        2001            2000
                                                     ----------      ----------
                                     ASSETS

Current Assets:

Cash and equivalents                                 $  166,409      $    3,944
Account Receivable-Related Party                          2,858            -0-
Note Receivable-Related Party                            27,500          27,500
Stock Subscription Receivable                            25,000            -0-
Prepaid Expense                                             800            -0-
                                                     ----------      ----------
                                                        222,567          31,444
                                                     ----------      ----------
Property and Equipment                                    9,043          10,593
                                                     ----------      ----------

   Total Assets                                      $  231,610      $   42,037
                                                     ==========      ==========


                      LIABILITIES AND SHAREHOLDERS' EQUITY

Current Liabilities:

Accounts payable and accrued expenses                $   40,719      $   26,129
Note Payable - Related Party                              3,800          95,000
                                                     ----------      ----------
                                                         44,519         121,129
Other Liability - Stockholder Loan                      117,500          82,021
                                                     ----------      ----------
Shareholders' Equity:

Common Stock, $.05 par value,
  100,000,000 shares authorized;
  70,938,692 & 48,832,192 shares
  issued and  outstanding                             3,546,935       2,442,059

Additional Paid-In Capital                               57,521         431,272
Accumulated Deficit                                  (3,534,865)     (3,034,444)
                                                     ----------      ----------
                                                         69,591        (161,113)
                                                     ----------      ----------
   Total Liabilities and Shareholders' Equity        $  231,610      $   42,037
                                                     ==========      ==========


     READ ACCOUNTANT'S REPORT AND ACCOMPANYING NOTES TO FINANCIAL STATEMENTS

                                      F-3
<PAGE>



                            VICTOR INDUSTRIES, INC.
                STATEMENTS OF OPERATIONS AND ACCUMULATED DEFICITS
                        FOR THE YEARS ENDING DECEMBER 31


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

REVENUE:                                   $       .00          $    38,713
                                           -----------          -----------

EXPENSES:

General and Administrative Expenses            494,793              452,998
Depreciation                                     2,542                1,455
Interest                                         3,086                1,315
                                           -----------          -----------

         Total Expenses                        500,421              455,768
                                           -----------          -----------

Net Loss                                      (500,421)            (417,055)

(Deficit) - beginning                       (3,034,444)          (2,617,389)
                                           -----------          -----------

Accumulated Deficits - ending              $(3,534,865)         $(3,034,444)
                                           ===========          ===========

Weighted average number of shared
  outstanding                               59,885,442           31,236,080

Net loss per share                         $ (.0083563)         $ (.0133517)
                                           ===========          ===========



     READ ACCOUNTANT'S REPORT AND ACCOMPANYING NOTES TO FINANCIAL STATEMENTS

                                      F-4
<PAGE>

<TABLE>
<CAPTION>


                             VICTOR INDUSTRIES, INC.
                            STATEMENTS OF CASH FLOWS
                         FOR THE YEARS ENDED DECEMBER 31

                                                                 2001              2000
                                                              ----------        ----------
<S>                                                           <C>               <C>
Cash Flows From Operating Activities:

     Net Loss                                                 $ (500,421)       $ (417,055)
     Add back item not effecting cash - Depreciation               2,542             1,455
     Stock issued in payment of services                         331,126           152,022
                                                              ----------        ----------
            Cash used in operations                             (166,753)         (263,578)
                                                              ----------         ---------
(Increase) Decrease in assets:
     Note receivable                                                -0-            (27,500)
     Property and Equipment                                         (993)          (12,049)
     Account Receivable                                           (2,858)             -0-
     Stock Subscription Receivable                               (25,000)             -0-
     Prepaid Expense                                                (800)             -0-
                                                              ----------        ----------
                                                                 (29,651)          (39,549)
                                                              ----------        ----------
Increase (decrease) in liabilities:
     Accounts payable and accrued expenses                        14,590           (16,363)
     Notes Payable                                               (91,200)           85,403
     Loans from shareholder                                       35,479            82,021
     Forgiveness of debt - prior years' liabilities                 -0-             19,631
                                                              ----------        ----------
                                                                 (41,131)          170,692
                                                              ----------        ----------
            Cash applied to operations                          (237,535)         (132,435)
                                                              ----------        ----------
Cash Flows From Financing Activities:
     Proceeds from sale of convertible notes                        -0-            156,000
     Sales of Common Stock                                       210,000              -0-
     Issuance of Common Stock in Payment of Debt                 190,000              -0-
                                                              ----------        ----------
                                                                 400,000           156,000
                                                              ----------        ----------
Net Increase in cash                                             162,465             3,935
Cash-Beginning                                                     3,944                 9
                                                              ----------        ----------
Cash-Ending                                                   $  166,409        $    3,944
                                                              ==========        ==========
</TABLE>


     READ ACCOUNTANT'S REPORT AND ACCOMPANYING NOTES TO FINANCIAL STATEMENTS

                                      F-5
<PAGE>

<TABLE>
<CAPTION>


                             VICTOR INDUSTRIES, INC.
                       STATEMENTS OF SHAREHOLDERS' EQUITY
                 FOR THE YEARS ENDED DECEMBER 31, 2000 AND 2001



                                      Number                      Additional
                                     Of Common       Common        Paid In       Accumulated
                                      Shares         Stock         Capital         Deficit           Total
                                    ----------     ----------     ----------     -----------       ---------
<S>                                 <C>            <C>            <C>            <C>               <C>
Balance at January 1, 2000          13,639,967     $  681,998     $1,883,311     $(2,617,389)      $ (52,080)

Net Loss for the period                                                             (417,055)       (417,055)

Shares Issued for Cash Per
  Rule 504-Private Placement        19,990,000        999,950       (843,950)                        156,000

Shares Issued for Services          15,202.225        760,111       (608,089)                        152,022
                                    ----------     ----------     ----------     -----------       ---------
Balance at
  December 31, 2000                 48,832,192      2,442,059        431,272      (3,034,444)       (161,113)

Net Loss for 2001                                                                   (500,421)       (500,421)

Shares Issued For Services           6,631,500        331,126                                        331,126

Shares Issued in Payment
  of Loan to Shareholder             4,750,000        237,500       (142,500)                         95,000

Shares Issued in Payment
  of Note to Forest Minerals         4,750,000        237,500       (142,500)                         95,000

Shares Issued for Cash
  from Unissued Shares               1,600,000         80,000        (45,000)                         35,000

Shares Sold at $.04 per share
  Per S-8 Registration               4,375,000        218,750        (43,750)                        175,000
                                    ----------     ----------     ----------     -----------       ---------

Balance at
  December 31, 2001                 70,938,692     $3,546.935     $   57,522     $(3,534,865)      $  69,592
                                    ==========     ==========     ==========     ===========       =========
</TABLE>


     READ ACCOUNTANT'S REPORT AND ACCOMPANYING NOTES TO FINANCIAL STATEMENTS

                                      F-6
<PAGE>

                             VICTOR INDUSTRIES, INC.
                          NOTES TO FINANCIAL STATEMENTS
                                DECEMBER 31, 2001



ACCOUNTING POLICIES AND OPERATIONS

Organization

Victor  Industries,  Inc.,  was  incorporated  on January  19, 1926 as Omo Mines
Corporation under the Laws of the State of Idaho. On November 14, 1936, the name
was  changed to Kaslo Mines  Corporation.  On December  24,  1977,  the name was
changed to Victor  Industries,  Inc. The Company's  fiscal year ends on December
31st.


Nature of Business

The company was originally  organized to purchase and develop mining properties.
On December 31,  1988,  the Company sold  assets,  net of  liabilities,  and the
Company became inactive. In 1993, the Company began zeolite mining and marketing
operations.

Zeolite is an ammonia absorbent, air purifier and hazardous waste absorbent. The
Company is presently  developing a product  using  zeolite  which can be used in
fertilizer to reduce  pollution of streams and rivers. A patent has been applied
for  on  a  preliminary   basis.  The  Company  extracts  zeolite  by  utilizing
independent   contractors  at  a  property  in  Owhyee  County,  Idaho.  Private
contractors do the milling,  manufacturing  and packaging.  The Company does not
own any mining or  manufacturing  equipment  or  facilities  and has realized no
revenues for the year  2001.The  Company owns  mineral  claims,  as evidenced by
right of title with the Bureau of Land  Management,  two of which are located in
Pershing County, Nevada, which have not been developed and two zeolite claims in
Owhyee County, Idaho.


Use of Estimates

In  preparing  financial   statements  in  conformity  with  generally  accepted
accounting  principles  management is required to make estimates and assumptions
that effect the reported amounts of assets and liabilities and the disclosure of
contingent  assets and  liabilities at the date of the financial  statements and
revenue and expenses  during the reported  period.  Actual  results could differ
from those estimates.


Cash and  Equivalents

For purposes of the cash flow statements the company considers all highly liquid
investments  with  original  maturities  of three  months or less at the time of
purchase to be cash equivalents.


Property and  Equipment

Consisting of computers and software are recorded at cost and depreciated over a
5 year period on the straight-line method.

                Property and Equipment       $13,041
                Accumulated Depreciation      (3,098)
                                             -------
                Balance-Net                  $ 9,043
                                             =======

Loss Per Share

Statement of Financial  Accounting  Standard No. 128 provides a different method
of calculating earnings per share than currently used in accordance with ABP 15,
Earnings Per share.  Basic  earnings per share  includes no dilution of earnings
per share.  Basic  earnings  per share  includes no dilution  and is computed by
dividing income available to common  shareholders by the weighted average number
of common shares outstanding for the period. Diluted earnings per share reflects
the  potential  dilution of  securities  that could share in the earnings of the
entity,  similar to fully diluted earnings per share.  SFAS 128 is effective for
fiscal years and interim periods after December 15, 1997.


                                      F-7
<PAGE>

                             VICTOR INDUSTRIES, INC.
                          NOTES TO FINANCIAL STATEMENTS
                                DECEMBER 31, 2001



Fair Value of Financial  Instruments

Statement of Financial Accounting Standards 107 "Disclosures About Fair Value of
Financial  Statements"  (SFAS 107) issued by the FASB became effective  December
31, 1995.  This statement  requires the  disclosure of estimated  values for all
financial instruments for which it is practicable to estimate.  The accompanying
amount of financial  instruments  including cash, accounts  receivable,  current
maturities of long-term debt and accounts payable  approximate fair value due to
their short maturity.


New Accounting  Standards

Statement of Financial  Accounting  Standards No. 130  "Reporting  Comprehensive
Income" (SFAS 130) issued by the FASB is effective for financial statements with
fiscal  years  beginning  after  December  15,  1997.  Earlier   application  is
permitted.   SFAS  130  establishes  standards  for  reporting  and  display  of
comprehensive  income  and its  components  in a full  set of  internal  purpose
financial statements.  The Company adopted SFAS 130 as of 1999 and it has had no
effect on the financial position or results of operations.

Statement of Financial  Accounting Standards No. 132 "Disclosures About Segments
of and  Enterprise  and  Related  Information"  (SFAS 131) issued by the FASB is
effective for financial statements with years beginning after December 15, 1997.
Earlier application is permitted. SFAS 131 requires that public companies report
certain information about operating segments, products services and geographical
areas in which they operate and their major customers.  The company adopted SFAS
131 during  1999 and it dad no effect on its  financial  position  or results of
operations. The company is a development stage entity with no operations.

Statement of Position 98-5 "Reporting on the Costs of Start Up Activities"  (SOP
98-5)  issued by the  American  Institute of  Certified  Public  Accountants  is
effective for financial  statements  beginning after December 15, 1998. SOP 98-5
requires that the cost of start up activities including organizational costs, be
expensed as incurred.  Start up activities are defined broadly as those one time
activities  related  to opening a new  facility,  introducing  a new  product or
service, conducting business in a new territory,  conducting business with a new
class  of  customer  (excluding  ongoing  customer  acquisition  costs  or  loan
origination  costs) or  beneficiary;  initiating  a new  process in an  existing
facility or  commencing  some new  operation.  The  company  does not expect the
adoption of SOP 98-5 to have an ongoing material  impact.  At July 31, 2000, the
expensing  of  organizational  costs  has a  material  impact  on the  financial
position  and results of  operations  for the  company.  For future  periods the
company does not expect the adoption of SOP 98-5 to have a material  impact,  if
any, on its financial position or results of operations.

In June,  1998,  the  FASB  issued  SFAS No.  133 "  Accounting  for  Derivative
Instruments  and Hedging  Activities"  effective for financial  statements  with
fiscal years  beginning  after June 15, 1999.  SFAS 133 provides a comprehensive
and consistent  standard for the  recognition and measurement of derivatives and
hedging  activities  and requires all  derivatives to be recorded on the balance
sheet at fair  value.  The Company  does not expect the  adoption of SFAS 133 to
have a material impact, if any, on its financial position, results of operations
or cash flows now or in the future.  The Company  adopted this  standard  during
2000.

                                      F-8
<PAGE>


                             VICTOR INDUSTRIES, INC.
                          NOTES TO FINANCIAL STATEMENTS
                                DECEMBER 31, 2001




GOING CONCERN

The  accompanying  financial  statements  have been  prepared  assuming that the
company will continue as a going concern which  contemplates  the realization of
assets and the satisfaction of liabilities in the normal course of business. The
amounts of assets and liabilities in the financial  statements do not purport to
represent  realizable or settlement  values.  However,  the company has incurred
continuing  operating  losses and has an  accumulated  deficit of $3,534.865 and
negative  working  capital  as  of  December  31,  2001.  These  factors  raises
substantial  doubt about the Company's  ability to continue as a going  concern.
The financial  statements do not include any adjustments  that might result from
the outcome of this  uncertainty.  The company  has met its  historical  working
capital  requirements  from sale of capital shares and loans from  shareholders.
However,  there can be no assurance that such financial support shall be ongoing
or available on terms or conditions acceptable to the Company.


COMMITMENTS AND CONTINGENCIES


Operational  Costs

At December 31, 2001 the company was leasing  office space at 4830 North Warnath
Road,  Missoula  Montana  from a  shareholder  and  director  at no  cost to the
Company.


Employment  Contracts

At December 31, 2001 there are no employment contracts issued, outstanding or in
process by the Company.


Legal

At  December  31,  2001 the  Company  is not a party to any legal  action in the
ordinary  course of  business or in any other  manner.  (See  Subsequent  Events
below)


SHAREHOLDERS' EQUITY

During the year 2001,  the Company  issued  6,631,500  shares of common stock to
various  individuals  and  companies  for goods and services  rendered at an par
value of $.05 per share.  At December  31,  2001 there were no stock  options or
warrants outstanding.


SIGNIFICANT VENUES AND CONCENTRATION OF CREDIT RISK

At December 31, 2001 there are no significant  venue issues or concentrations of
risk.


RELATED PARTY TRANSACTIONS

Forest  Minerals,  Inc., a related party was issued  4,750,000  shares of common
stock in  payment  of the note  payable  in the  amount of  $95,000  that was in
existence  on December  31,  2000.  Penny  Sperry,  CEO and  Director was issued
4,750,000  shares of common stock in payment of $95,000 of her outstanding  loan
balance.  Forest Mineral advanced $3,800 to the Company for working capital.  It
is anticipated  that this amount will be repaid within 2002. Blue Rock minerals,
a related party is indebted to the Company in the amounts of $27,500 and $2,858.


                                      F-9
<PAGE>


                             VICTOR INDUSTRIES, INC.
                          NOTES TO FINANCIAL STATEMENTS
                                DECEMBER 31, 2001



INCOME TAXES

At  December  31, 2001 the Company  had net  operating  losses of  approximately
$3,534,865  which may be offset  against  future taxable income through 2016. No
tax  benefit  has been  reported  in the  financial  statements,  as the Company
believes there is a 50% or greater  chance the net operating  losses will expire
unused. Accordingly,  the potential tax benefits of the net operating losses are
offset by a valuation allowance in the same amount.


SUBSEQUENT EVENTS

On February 21, 2002 the U.S. Securities and Exchange Commission filed an action
against the  Company,  certain  shareholders  and related  parties.  This action
claims  certain  illegal acts by the  shareholders  and related  parties.  Legal
counsel for the Company is of the opinion that this action will have no material
financial effect on the Company.

On approximately March 10, 2002, Angela Hamblin,  who had subscribed to and been
issued 600,000  shares of common stock of the Company for $25,000  rescinded her
subscription.  The subscription  receivable  shown on the  accompanying  balance
sheet will not be realized and the shares will be returned to the company.


                                      F-10
<PAGE>


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

We  changed  accounting  firms  in 2000 in order to have  access  to  additional
services  we  felt  that we  would  need  for our  growth.  There  have  been no
disagreements with our prior or current independent accountants.

No  consultations  occurred  between  us and the  current  or prior  independent
accountants' appointment regarding the application of accounting principles to a
specific completed or contemplated  transaction,  the type of audit opinion,  or
other  information  considered  by the  Company in  reaching a decision as to an
accounting, auditing, or financial reporting issue.


                                    PART III


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

Our Chief Executive Officer,  Treasurer and director is Penny Sperry. Ms. Sperry
is 47 years old and has served as our  Treasurer,  Chief  Executive  Officer and
director since December 1999.

Our Secretary and director is David Boulter,  age 62, who has been our Secretary
and  director  since  December  1999.  Mr.  Boulter  does not  receive  any cash
compensation  but is granted 100,000 shares of our common stock for each year of
service.

On March 12, 2002,  Mr.  Richard Leary resigned from his position as Director of
Marketing and from the Board of Directors for personal reasons.

Our Board of Directors  currently  consists of only the two  individuals  listed
above.

All  officers  and  directors  devote  100% of  their  professional  time to our
business operations.

All  directors  hold office until the next annual  meeting of  stockholders  and
until their  successors have been duly elected and qualified.  Directors will be
elected  at the  annual  meetings  to serve  for  one-year  terms.  There are no
agreements  with  respect to the  election  of  directors.  The  Company has not
compensated its directors for service on the Board of Directors or any committee
thereof.  Any  non-employee  director of the  Company  shall be  reimbursed  for
expenses  incurred for  attendance at meetings of the Board of Directors and any
committee of the Board of  Directors.  The  Executive  Committee of the Board of
Directors,  to the extent permitted under Idaho law,  exercises all of the power
and  authority of the Board of Directors in the  management  of the business and
affairs  of the  Company  between  meetings  of the  Board  of  Directors.  Each
executive  officer is appointed by and serves at the  discretion of the Board of
Directors.

None of the officers and/or  directors of the Company are currently  officers or
directors  of  any  other  publicly  traded  corporation,  nor  have  any of the
directors and/or  officers,  nor have any affiliates or promoters of the Company
filed any  bankruptcy  petition.  On March 6,  2002,  a  Judgment  of  Permanent
Injunction and Other Relief was entered  against Ms. Sperry by the United States
District Court for the District of Montana in an action entitled  Securities and
Exchange  Commission  v.  Victor  Industries,  Inc.,  et al.,  Civil  Action No.
CV02-37-M-DWM. The Judgment, which was entered pursuant to Respondents' consent,
permanently  enjoins  Sperry from  violations of 5(a) and 5(c) of the Securities
Act of 1933,  and  barring  her from  participating  in any  offering of a penny
stock, including: (a) acting as a promoter,  finder, consultant, or other person
who engages in  activities  with a broker,  dealer or issuer for purposes of the
issuance or trading in any penny stock;  or (b) inducing or attempting to induce
the purchase or sale of any penny stock.

No person who, at any time during our past fiscal year, was a director, officer,
or beneficial owner of more than 10% of any class of equity securities failed to
file,  on a timely basis,  any report  required by Section 16(a) of the Exchange
Act during the most recent fiscal year.


                                       21
<PAGE>

ITEM 10. EXECUTIVE COMPENSATION

The following table reflects  compensation paid to the mostly highly compensated
executive officer of the Company.
<TABLE>
<CAPTION>

                                                                                                 LONG TERM COMPENSATION
                                                                              -----------------------------------------------------
                                                                                       AWARDS
                                                                              ------------------------     PAYOUTS
                                                    ANNUAL COMPENSATION       RESTRICTED    SECURITIES     -------
                                                 -------------------------      STOCK       UNDERLYING       LTIP        ALL OTHER
                                                 SALARY     BONUS    OTHER      AWARD        OPTIONS       PAYOUTS     COMPENSATION
     NAME AND PRINCIPAL POSITION        YEAR       ($)       ($)      ($)        ($)         SARS(#)         ($)            ($)
------------------------------------   ------    -------    -----    -----    ----------    ----------     -------     ------------
<S>                                     <C>      <C>         <C>      <C>        <C>            <C>           <C>           <C>
Penny Sperry........................    2001     $60,000     $ 0      $ 0        $ 0            0             0             $ 0
Chief Executive Officer and Treasurer
</TABLE>

Ms. Sperry received  5,625,000 shares our common stock for services  rendered as
Chief Executive  Officer and Treasurer in 2000. In 2001 she was issued 4,750,000
shares of common stock in payment of $95,000 of her outstanding loan balance.

No other person makes over $100,000 per year.


COMPENSATION OF DIRECTORS

We do not currently  compensate directors in cash for any services provided as a
director.


ITEM 11.   SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

PRINCIPAL STOCKHOLDERS

The  following  table  sets  forth,  as of  December  31,  2001,  the  name  and
shareholdings, including options to acquire our Common Stock, of each person who
owns of record,  or was known by the us to own  beneficially,  5% or more of the
shares of the  Common  Stock  currently  issued  and  outstanding;  the name and
shareholdings,  including options to acquire the Common Stock, of each director;
and the  shareholdings  of all executive  officers and directors as a group. The
address of each of the individuals listed below is the address of the Company.


                                                                     PERCENTAGE
                                        NATURE OF     NUMBER OF          OF
       NAME OF PERSON OR GROUP          OWNERSHIP    SHARES OWNED    OWNERSHIP
       -----------------------          ---------    ------------    ----------

  Penny Sperry................           Direct       13,617,783        19.2%
  Forest Minerals, Inc.                  Direct       15,239,174        21.48%
  David Boulter                          Direct          100,000          .14%

  All executive officers and
  directors as a group
  (two persons)..............            Direct       13,717,783        19.34%




There are currently no outstanding options or warrants to purchase shares of our
stock.


ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Forest Minerals, Inc., a related party has was issued 4,750,000 shares of common
stock  in  payment  of a note  payable  in the  amount  of  $95,000  that was in
existence  on December  31,  2000.  Penny  Sperry,  CEO and  Director was issued
4,750,000  shares of common stock in payment of $95,000 of her outstanding  loan
balance.  Forest  Mineral  advanced  $3,800 to the Company  for working  capital
during the year. It is anticipated  that this amount will be repaid within 2002.
Blue Rock minerals, a related party is indebted to the Company in the amounts of
$27,500 and $2,858 as of December 31, 2001.


ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K

b)     Reports on Form 8-K

       None


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                                   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.

                              (Registrant)  VICTOR INDUSTRIES, INC.

                                     By     /s/ Penny Sperry
                                            ---------------------
                                            Penny Sperry, Chief Executive
                                            Officer and Treasurer

                                     Date   April 4, 2002

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.

                                     By     /s/ Penny Sperry
                                            ---------------------
                                            Penny Sperry, Chief Executive
                                            Officer and Treasurer

                                     Date   April 4, 2002

                                     By     /s/ David Boulter
                                            ---------------------
                                            David Boulter, Secretary and
                                            Director

                                     Date   April 4, 2002




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