U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                               AMENDMENT NO. 2 TO
                                   FORM 10-QSB

(Mark One)

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

     For the quarterly period ended June 30, 2001

[ ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934

     For the transition period from _____ to _______

                         Commission file number 0-32323

                                  TEN STIX INC.
                            -------------------------
        (Exact name of small business issuer as specified in its charter)

           COLORADO                                               84-1351184
           --------                                               ----------
(State or other jurisdiction of                               (I.R.S. Employer
incorporation of organization)                               Identification No.)

                              3101 Riverside Drive
                          Idaho Springs, Colorado 80452
                         -------------------------------
                    (Address of Principal Executive Offices)

                                 (303) 567-0163
                                 --------------
                           (Issuer's telephone number)

                                       N/A
                                       ---
              (Former name, former address and former fiscal year,
                          if changed since last report)

Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.

         Yes      X       No

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

Class                                       Outstanding as of October 22, 2001
-----                                       ----------------------------------
Common Stock, $0.001 par value                          17,659,488

Transitional Small Business Disclosure Format (check one)

         Yes              No      X

<PAGE>


PART 1. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS
-----------------------------


                                 TEN STIX INC.
                              FINANCIAL STATEMENTS
                                   (Unaudited)

                                  June 30, 2001



                                                                            Page
                                                                            ----

Balance Sheets                                                               3

Statements of Operations                                                     4

Statement of Stockholders' Equity

Statements of Cash Flows                                                     5

Notes to Financial Statements                                                6







                                        2
<PAGE>


                                 Ten Stix, Inc.

                          (A Development Stage Company)
                                  BALANCE SHEET
                                  June 30, 2001


     ASSETS

CURRENT ASSETS
     Cash and cash equivalents                                        $     673
                                                                      ---------

         Total current assets                                               673
                                                                      ---------

PROPERTY AND EQUIPMENT
     Equipment                                                          204,456
         Less accumulated depreciation                                  (12,908)
                                                                      ---------
                                                                        191,548

OTHER ASSETS
     Note receivable - shareholder                                        8,500
     Patent/Copyright (net)                                              99,761
                                                                      ---------
                                                                        108,261

         TOTAL ASSETS                                                 $ 300,482
                                                                      =========

     LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
     Accounts payable                                                     9,808
                                                                      ---------

         Total current liabilities                                        9,808

LONG-TERM LIABILITIES
     Notes payable - net of discount                                    246,622
     Other long-term payable to related party                            30,000
                                                                      ---------

         Total long-term liabilities                                    276,622
                                                                      ---------

         TOTAL LIABILITIES                                              286,430
                                                                      ---------

STOCKHOLDERS' EQUITY
     Preferred A stock, $0.001 par value;
         100,000 shares authorized; no shares
         issued and outstanding                                            --
     Common stock, $0.001 par value; 500,000,000
         shares authorized; 17,659,488 shares
         issued and outstanding                                          17,659
     Additional paid-in capital                                         692,378
     Deficit accumulated during the development
         stage                                                         (695,985)
                                                                      ---------

                                                                         14,052

         TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                   $ 300,482
                                                                      =========


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

                                        3

<PAGE>
<TABLE>
<CAPTION>


                                                         Ten Stix, Inc.

                                                  (A Development Stage Company)
                                           STATEMENTS OF LOSS AND ACCUMULATED DEFICIT



                                          For the period       For the           For the           For the           For the
                                          from inception     three months      three months       six months        six months
                                        (January 10, 1996)      ended              ended            ended             ended
                                            to June 30,        June 30,           June 30,         June 30,          June 30,
                                               2001              2001              2000              2001              2000
                                           ------------      ------------      ------------      ------------      ------------
REVENUES
    <S>                                   <C>               <C>               <C>               <C>               <C>
    Fees from games                        $     37,367      $       --        $       --        $       --        $       --
    Leases                                       11,200            11,200              --              11,200
    Other income                                    250               250              --                 250              --
                                           ------------      ------------      ------------      ------------      ------------

       Total revenue                             48,817            11,450              --              11,450              --
                                           ------------      ------------      ------------      ------------      ------------


EXPENSES
    Advertising                                     884               696              --                 696               188
    Amortization                                  7,865             1,759               494             2,318               988
    Consulting fees                             530,007              --               2,500              --               2,500
    Contract labor                                3,187              --                --                --                --
    Depreciation                                 12,907            10,223               175            10,418               350
    Insurance                                       959              --                --                --                --
    Interest expense                              8,218             3,507              --               3,507              --
    Legal and accounting                         45,848             5,242               500             6,666             2,576
    Office expense                                4,342               629                21               708               120
    Rent                                          1,660              --                --                --                --
    Samples                                       5,038              --                --                 705              --
    Salaries - product development               61,875             2,813             2,813             5,625             5,625
    Salaries - marketing                         20,625               937               937             1,875             1,875
    Show fees                                     6,198              --                --                --                --
    1996 and prior startup costs                 19,287              --                --                --                --
    Taxes and licenses                              860              --                --                 275                25
    Travel                                       13,767             3,119              --               6,060              --
    Utilities                                       275              --                --                --                --
                                           ------------      ------------      ------------      ------------      ------------

       Total expenses                           743,802            28,925             7,440            38,853            14,247
                                           ------------      ------------      ------------      ------------      ------------

NET LOSS                                       (694,985)          (17,475)           (7,440)          (27,403)          (14,247)

Accumulated deficit
    Balance, beginning of period                   --            (678,510)         (617,502)         (668,582)         (610,695)
    Treasury stock acquired at a premium         (1,000)             --                --                --                --
                                           ------------      ------------      ------------      ------------      ------------

    Balance, end of period                 $   (695,985)     $   (695,985)     $   (624,942)     $   (695,985)     $   (624,942)
                                           ============      ============      ============      ============      ============

NET LOSS PER SHARE - BASIC                 $      (0.04)     $       --        $       --        $       --        $       --
                                           ============      ============      ============      ============      ============

WEIGHTED AVERAGE NUMBER OF
       SHARES OUTSTANDING                    16,259,771        17,658,701        17,443,316        17,652,293        17,439,946
                                           ============      ============      ============      ============      ============


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

                                                                4
</TABLE>
<PAGE>
<TABLE>
<CAPTION>

                                           Ten Stix, Inc.

                                    (A Development Stage Company)
                                      STATEMENTS OF CASH FLOWS



                                                     For the period
                                                     from inception    For the six       For the six
                                                   (January 10, 1996)  months ended      months ended
                                                       to June 30,        June 30,          June 30,
                                                          2001              2001              2000
                                                       ---------         ---------         ---------
CASH FLOWS FROM OPERATING ACTIVITIES
<S>                                                    <C>               <C>               <C>
Net loss                                               $(694,985)        $ (27,403)        $ (14,247)
Adjustments to reconcile net loss to net cash flows
     from operating activities:
         Amortization                                      7,865             2,318               988
         Depreciation                                     12,907            10,418               350
         Services provided at no charge                   82,500             7,500             7,500
         Increase (decrease) in accounts payable           9,808            (3,790)             --
         Increase (decrease) in overdraft                   --                --              (2,143)
         Issuance of common stock for services           531,000              --               1,500
                                                       ---------         ---------         ---------

            Net cash flows from operating activities     (59,905)          (10,957)           (6,052)

CASH FLOWS FROM INVESTING ACTIVITIES
     Equipment purchases                                  (6,005)           (2,093)             --
     Patent costs accumulated                            (37,954)                0              --
                                                       ---------         ---------         ---------

            Net cash flows from investing activities     (43,959)         (240,218)             --

CASH FLOWS FROM FINANCING ACTIVITIES
     Issuance of common stock                             95,972             8,400             3,650
     Issuance of preferred stock                           4,965              --                --
     Repurchase of common shares                         (10,400)             --                --
     Loans from shareholders                               5,000              --               2,500
                                                       ---------         ---------         ---------

            Net cash flows from financing activities      95,537             8,400             6,150
                                                       ---------         ---------         ---------

NET INCREASE (DECREASE) IN CASH
     AND CASH EQUIVALENTS                                    673            (4,650)               98

CASH AND CASH EQUIVALENTS,
     BEGINNING OF PERIOD                                    --               5,323              --
                                                       ---------         ---------         ---------

CASH AND CASH EQUIVALENTS,
     END OF PERIOD                                     $     673         $     673         $      98
                                                       =========         =========         =========


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

                                                  5
</TABLE>
<PAGE>


                                 Ten Stix, Inc.
                          (A Development Stage Company)
                          Notes to Financial Statements
                                  June 30, 2001




1.   Management's Representation of Interim Financial Information
     ------------------------------------------------------------
     The accompanying financial statements have been prepared by Ten Stix, Inc.
     without audit pursuant to the rules and regulations of the Securities and
     Exchange Commission. Certain information and footnote disclosures normally
     included in financial statements prepared in accordance with generally
     accepted accounting principles have been condensed or omitted as allowed by
     such rules and regulations, and management believes that the disclosures
     are adequate to make the information presented not misleading. These
     financial statements include all of the adjustments which, in the opinion
     of management, are necessary to a fair presentation of financial position
     and results of operations. All such adjustments are of a normal and
     recurring nature. These financial statements should be read in conjunction
     with the audited financial statements at December 31, 2000.

2.   Asset Purchase
     --------------
     On May 1, 2001, the Company acquired certain assets from Summit
     International Group, Inc. The assets include a patent on the card shuffling
     device known as "ProShuffle;" various ProShuffle devices; parts, inventory
     and manufacturing equipment for the ProShuffle devices; promissory notes
     from Ten Stix shareholders; and miscellaneous office equipment. Tenstix
     issued two promissory notes with a face amount of $300,000 as consideration
     for these assets.

     The first promissory note for $80,000 is repayable monthly at the greater
     of $2,000 or 50% of the gross lease or sale revenues from ProShuffle
     devices in the previous month. Interest at 8% of the unpaid balance accrues
     beginning May 1, 2002. The second promissory note in the amount of $220,000
     is subordinate to the first note and is repayable after the first note is
     satisfied at the greater of $2,000 or 50% of prior month's ProShuffle lease
     or sale revenue. Interest at 8% of the unpaid balance will accrue beginning
     May 1, 2004. Both notes are also repayable from the first 25% of proceeds
     in excess of $100,000 from any public offering of securities consummated by
     the Company after May 1, 2001. A discount of 8% has been applied to both
     notes for the non-interest bearing portion of the note term.

     The purchase price has been allocated to acquired assets in proportion to
     their relative fair values as follows: patent $39,673, equipment $200,545,
     and notes $8,500. The patent will be amortized over its estimated remaining
     useful life of eight years, and property and equipment will be depreciated
     over an estimated five year life.

     The Company is currently in negotiations with Xpectra, for the purchase of
     Xpectras' ProShuffle related inventory for approximately $110,000.

     The accompanying financial statements for the three-month period ended June
     30, 2001 include $11,200 in revenue from new leases of ProShuffle machines.


                                        6

<PAGE>


     Statements made in this Form 10-QSB that are not historical or current
facts are "forward-looking statements" made pursuant to the safe harbor
provisions of Section 27A of the Securities Act of 1933 (the "Act") and Section
21E of the Securities Exchange Act of 1934. These statements often can be
identified by the use of terms such as "may," "will," "expect," "believe,"
"anticipate," "estimate," "approximate" or "continue," or the negative thereof.
The Company intends that such forward-looking statements be subject to the safe
harbors for such statements. The Company wishes to caution readers not to place
undue reliance on any such forward-looking statements, which speak only as of
the date made. Any forward-looking statements represent management's best
judgment as to what may occur in the future. However, forward-looking statements
are subject to risks, uncertainties and important factors beyond the control of
the Company that could cause actual results and events to differ materially from
historical results of operations and events and those presently anticipated or
projected. The Company disclaims any obligation subsequently to revise any
forward-looking statements to reflect events or circumstances after the date of
such statement or to reflect the occurrence of anticipated or unanticipated
events.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

GENERAL

     Since inception, Ten Stix Inc. (the "Company") has focused primarily on the
research, development and design of its products, and generated minimal
revenues. Since inception, the Company has incurred approximately $61,875
relating to research and development expenses. During prior fiscal years, the
principals of the Company invested personal funds and arranged for loans and/or
lines of credit from private lenders to support the business operations of the
Company.

     Management of the Company believes that future sales of Ten Stix 21 and
related products to the casinos in the State of Colorado will be an important
line of business for the Company for the next several years, however, management
intends to pursue the marketplaces of several other primary states. It is
anticipated that the Company will derive its revenues principally from the
marketing and sale of Ten Stix 21 and other related products to casinos
generally located in the States of California, Colorado, Kansas, New Mexico,
Nevada, South Dakota and Wisconsin. Management anticipates that Ten Stix 21 will
be leased for approximately $600.00 per month or sold for approximately
$5,000.00 plus a royalty fee to casinos. Management anticipates that Shotgun 21
will be leased for approximately $800.00 per month or sold for approximately
$10,000 plus a royalty fee to casinos. Management further anticipates that the
marketing and sale of the products pursuant to the distributorship agreements
will result in revenues during fiscal year 2001.

     During fiscal year ended December 31, 2000, the Company did not generate
any revenues; during fiscal year ended December 31, 1999, the Company generated
$1,176 in gross revenues. During fiscal year 1999, the Company received revenues
from the lease of one of its products, Hold'em 88, to casinos located in
Colorado. However, changes in Colorado's rules and regulations during 1999
pertaining to the gaming industry resulted in the legalization of many other
different types of games. Thus, since Hold'em 88 had originally been designed in
accordance with Colorado's prior rules and regulations, it had a distinct market
disadvantage when the other gaming products were legalized. Hold'em 88 was
replaced by other gaming products in casinos in Colorado. Therefore, the Company
did not generate any revenues from the lease or sale of its products during
fiscal year 2000, but focused on the design and development of its other gaming
products.

THE PRO SHUFFLE

     On approximately May 1, 2001, the Company and Summit International Group,
Inc., a Colorado corporation ("Summit") entered into an asset purchase agreement
(the "Asset Purchase Agreement"). Under the terms of the Asset Purchase
Agreement, the Company acquired from Summit (i) all of Summit's right, title and
interest to U.S. Patent No. 5,718,427 regarding a card shuffling device marketed
by Summit under the name "Pro Shuffle"; (ii) all Pro Shuffle devices, parts,
inventory and equipment related to the manufacturing and assembly of the Pro
Shuffle; (iii) all contracts related to the Pro Shuffle; (iv) all accounts
receivable arising out of the sale or lease of the Pro Shuffle; (v) two
promissory notes made by Mr. Tony Cranford, one payable to Summit in the
approximate amount of $2,500.00 and one payable to Phil Lacerte in the

                                        7
<PAGE>


approximate amount of $6,000.00; (vi) two Blackjack tables located in Las Vegas,
Nevada; and (vii) all other business assets located in Colorado. Under the terms
of the Asset Purchase Agreement, the Company assumed (i) on the part of Summit
a contingent liability to Xpectra in the approximate amount of $110,000.00
related to fifty updated Pro Shuffle devices and parts; and (ii) two liabilities
owed by Summit to Jerry Delferro and Dick Stewart in the approximate amount of
$3,000.00, respectively. Pursuant to further terms of the Asset Purchase
Agreement, the Company agreed to (i) pay the amount of $300,000.00 to Summit as
evidenced by the execution of two promissory notes, one payable to Summit in the
amount of $220,000.00 and the other payable to Michael Humecki in the amount of
$80,000.00; and (ii) surrender to Summit all of the shares of common stock of
Summit held of record by Mr. Sawyer and Mr. Cranford, respectively (an
approximate 10% equity interest each). See " - Material Commitments/Funding".

     As of May 2001, the marketing and sale of the Pro Shuffle generates
approximately $5,600 in monthly revenue; however, the Company pays debt service
of $2,800 monthly in accordance with the terms of the above-described notes.

RESULTS OF OPERATION

     Six-Month Period Ended June 30, 2001 Compared to Six-Month Period Ended
     June 30, 2000

     The Company's net losses for the six-month period ended June 30, 2001 were
approximately $27,403 compared to a net loss of approximately $14,247 for the
six-month period ended June 30, 2000 (an increase of $13,156 or 92%).

     During the six-month period ended June 30, 2001, the Company generated
approximately $11,450 in revenue compared to $-0- revenue generated during the
six-month period ended June 30, 2000. The generation of revenue during the
six-month period ended June 30, 2001 was comprised primarily of $11,200 received
pursuant to lease payments from third-parties to the Company for gaming
products. The lack of generated revenue during the six-month period ended June
30, 2000 resulted primarily from insufficient capital necessary to fund
operational expenses, thus adversely affecting the marketing and distribution of
the Company's gaming product.

     During the six-month period ended June 30, 2001, the Company recorded
operating expenses of $38,853 compared to $14,247 of operating expenses recorded
in the same period for 2000 (an increase of $24,606 or 172%). Operating expenses
for the six-month period ended June 30, 2001 primarily include (i) $10,418 as
depreciation expense; (ii) $6,666 in legal and accounting expense; (iii) $6,060
as travel expense; and (iv) $7,500 (which represents management's estimate of
the value of services rendered during such six-month period at no charge to the
Company). The increase in operational expenses during the six-month period ended
June 30, 2001 compared to the six-month period ended June 30, 2000 was primarily
due to an increase in depreciation expenses to $10,418 from $350 and an increase
in travel expenses to $6,060 from $-0- relating to the increased marketing of
the Company's gaming products.

     As discussed above, although the Company generated revenues in the amount
of $11,450 during the six-month period ended June 30, 2001, the increase in net
loss during such period as compared to the six-month period ended June 30, 2000
is attributable primarily to a substantial increase in operating expenses. The
Company's net earnings (losses) during the six-month period ended June 30, 2001
were approximately ($27,403) or ($nil) per common share compared to a net loss
of approximately ($14,247) or ($nil) per common share (an increase of $13,156 or
92%) during the six-month period ended June 30, 2001. The weighted average of
common shares outstanding were 17,652,293 for the six-month period ended June
30, 2001 compared to 17,439,946 for the six-month period ended June 30, 2000.

     Three-Month Period Ended June 30, 2001 Compared to Three-Month Period Ended
     June 30, 2000

     The Company's net losses for the three-month period ended June 30, 2001
were approximately $17,475 compared to a net loss of approximately $7,440 for
the three-month period ended June 30, 2000 (an increase of $10,035 or 135%).
During the three-month period ended June 30, 2001, the Company generated
approximately $11,450 in revenue compared to $-0- revenue generated during the
three-month period ended June 30, 2000.

     During the three-month period ended June 30, 2001, the Company recorded
operating expenses of $28,925 compared to $7,440 of operating expenses recorded
in the same period for 2000 (an increase of $21,485 or 289%). Operating expenses
for the three-month period ended June 30, 2001 primarily include (i) $10,223 as
depreciation expense; (ii) $5,242 in legal and accounting expense; (iii) $3,119
as travel expense; and (iv) $3,750 (which represents management's estimate of
the value of services rendered during such three-month period at no charge to
the Company). The increase in operational expenses during the three-month period
ended June 30, 2001 compared to the three-month period ended June 30, 2000 was
primarily due to an increase in depreciation expense to $10,223 from $175 and an
increase in travel expense to $3,119 from $-0- relating to the increased
marketing of the Company's gaming products.

                                        8
<PAGE>


     As discussed above, although the Company generated revenue in the amount of
$11,450 during the three-month period ended June 30, 2001, the increase in net
loss during such period as compared to the three-month period ended June 30,
2000 is attributable primarily to a substantial increase in operating expenses.
The Company's net earnings (losses) during the three-month period ended June 31,
2001 were approximately ($17,475) or ($0) per common share compared to a net
loss of approximately ($7,440) or ($0) per common share (an increase of $10,035
or 135%) during the three-month period ended June 30, 2000. The weighted average
of common shares outstanding were 17,658,701 for the three-month period ended
June 30, 2001 compared to 17,443,316 for the three-month period ended June 30,
2000.

LIQUIDITY AND CAPITAL RESOURCES

     The Company is currently experiencing a severe liquidity crisis and must
raise additional capital. Further, the Company has not generated sufficient cash
flow to fund its operations and activities. Historically, the Company has relied
upon internally generated funds, funds from the sale of shares of stock and
loans from its shareholders and private investors to finance its operations and
growth. Management intends to raise additional capital through further public or
private offerings of its stock and through bank loans or loans from private
investors, although there can be no assurance that the Company will be able to
obtain such financing. The Company's future success and viability are entirely
dependent upon the Company's ability to raise additional capital. Management is
optimistic that the Company will be successful in its capital raising efforts;
however, there can be no assurance that the Company will be successful in
raising additional capital. The failure to raise additional capital will have a
material and adverse affect upon the Company and its shareholders. The Company's
financial statements have been prepared assuming that it will continue as a
going concern and, accordingly, do not include adjustments relating to the
recoverability and realization of assets and classification of liabilities that
might be necessary should the Company be unable to continue in operations.

     Six-Month Period Ended June 30, 2001

     As of June 30, 2001, the Company's current assets were $673 and its current
liabilities were $9,808, which resulted in a working capital deficit of $9,135.
As of June 30, 2001, the Company's total assets were $300,482 consisting
primarily of $191,548 in cost of equipment and $99,761 in cost of its
patents/copyright of the Company's products. As of June 30, 2001, the Company's
total liabilities were $256,430 consisting primarily of $246,622 in notes
payable. As of June 30, 2001, the Company's total assets exceeded its total
liabilities by $14,052.

     Stockholders' equity decreased from $25,555 as of December 31, 2000 to
$14,052 at June 30, 2001.

     For the six-month period ended June 30, 2001, the net cash used for
operating activities was $10,957 compared to net cash used for operating
activities of $6,052 for the six-month period ended June 30, 2000 (an increase
of $4,905). As discussed above, the increase was primarily comprised of (i) a
net loss of $27,403 for the six-month period ended June 30, 2001 compared to a
net loss of $14,247 for the six-month period ended June 30, 2000 (an increase of
$13,156); and (ii) $10,418 incurred as depreciation expense for the six-month
period ended June 30, 2001 compared to $350 as depreciation expense for the
six-month period ended June 30, 2000.

     The Company increased its capital expenditures to $2,093 during the
six-month period ended June 30, 2001 from $-0- for the six-month period ended
June 30, 2000, which related primarily to the purchase of equipment.

     The Company increased its net cash from financing activities for the
six-month period ended June 30, 2001 to $8,400 compared to $6,150 for the
six-month period ended June 30, 2000. The increase was attributable to the sale
of stock.

                                        9
<PAGE>


MATERIAL COMMITMENTS/FUNDING

     Material Commitments

     Cranford Assignment Agreement

     A significant and estimated material commitment for the Company for fiscal
year 2001 is the amounts due and owing under an assignment agreement with Mr.
Tony Cranford dated January 19, 2001 (the "Cranford Assignment Agreement").
Pursuant to the Cranford Assignment Agreement, Mr. Cranford assigned all of his
right, title and interest in Bet the House, including his rights to the
provisional patent application no. 60/240.091, to the Company. In accordance
with the terms and provisions of the Cranford Assignment Agreement, the Company
agreed to pay Mr. Cranford (i) for a period of six months a monthly royalty fee
of $175.00 for each Bet the House game that the Company leases to a third party
during the six month period; and (ii) an aggregate purchase price of either (a)
an amount to be calculated by multiplying the average monthly gross revenues
generated by the Company for each Bet the House game leased during the six month
period by three, or (b) $30,000, whichever is greater. The terms of Cranford
Assignment Agreement further provide that such aggregate purchase price may be
paid by the Company to Mr. Cranford on a monthly basis or in one aggregate
payment, with such aggregate purchase price to be paid in full no later than
March 31, 2002.

     Asset Purchase Agreement

     A significant and estimated material commitment for the Company for fiscal
year 2001 is the amount of $300,000.00 due and owing under the terms of the
Asset Purchase Agreement. Pursuant to the terms of the Asset Purchase Agreement,
the Company agreed to pay the amount of $300,000.00, as evidenced by the
execution of two promissory notes.

     The first promissory note dated May 1, 2001 is in the amount of $80,000.00
and is payable to Michael Humecki (the "Humecki Promissory Note"). The terms of
the Humecki Promissory Note requires the Company to make payments as follows:
(i) on the 15th of each month commencing June 15, 2001, the greater of either
(a) 50% of gross revenues collected during the prior month from the lease or
sale by the Company of any of the assets acquired by the Company pursuant to the
Asset Purchase Agreement (including the Pro Shuffle) or (b) $2,000.00; (ii) on
the 15th of the month after the receipt of 25% of aggregate gross funds raised
by the Company at any time on or after May 1, 2001 pursuant to any private or
public offering of its securities (but such 25% shall not be paid on the first
$100,000 of funds so raised by the Company); and (iii) interest at the rate of
8% per annum commencing May 1, 2002 on any portion of the $80,000 outstanding on
the first of each month payable monthly.

     The second promissory note dated May 1, 2001 is in the amount of
$220,000.00 and is payable to Summit International Group, Inc. (the "Summit
Promissory Note"). The terms of the Summit Promissory Note require the Company
to make payments to Summit after payment in full is made by the Company of the
Humecki Promissory Note as follows: (i) on the 15th of each month commencing
after the Humecki Promissory Note, the greater of either (a) 50% of gross
revenues collected during the prior month from the lease or sale by the Company
of any of the assets acquired by the Company pursuant to the Asset Purchase
Agreement (including the Pro Shuffle) or (b) $2,000.00; (ii) on the 15th of the
month after the receipt of 25% of aggregate gross funds raised by the Company at
any time on or after May 1, 2001 pursuant to any private or public offering of
its securities (but such 25% shall not be paid on the first $100,000 of funds so
raised by the Company and not until after payment in full of the Humecki
Promissory Note); and (iii) interest at the rate of 8% per annum commencing May
1, 2004 on any portion of the $220,000.00 outstanding on the first of each month
payable monthly.

     A significant and estimated material commitment for the Company for the
year 2001 is a contingent liability to Xpectra of up to an aggregate amount of
approximately $110,000.00 (the "Xpectra Liability"). According to the terms of a
letter dated May 9, 2001 from the Company to Xpectra, the Company acknowledged
the valuation of $110,174.98 relating to Pro Shuffle units, parts, tools and
drawings held by Xpectra (the "Xpectra Inventory"). The Xpectra Liability
represents an opportunity for the Company to purchase from Xpectra some or all
of the Xpectra Inventory, up to an aggregate $110,174.98. The Xpectra Liability
is contingent upon the agreement of the parties on quantity to be acquired and
price. The Company may purchase the entire Xpectra Inventory for a substantial
discount from full price, or the Company may select only certain items to be
purchased from the Xpectra Inventory at a lesser or no discount. The Xpectra
Inventory is currently being stored in Xpectra's warehouse on pallets.

     As of the date of this Quarterly Report, Xpectra has informed the Company
that it will sell the entire Xpectra Inventory for a purchase price of
approximately $35,000.00. If the Company does not purchase the Xpectra
Inventory, management believes that Xpectra may then sell certain parts for
scrap metal.

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<PAGE>


     Funding

     During September 2000, the Company completed an offering in which it raised
$61,172 pursuant to which it sold 244,688 shares of Common Stock at $0.25 per
share. During December 2000, the Company completed an offering in which it
raised $7,000 pursuant to which it sold 14,000 shares of Common Stock at $0.50
per share. The securities were not registered under the Securities Act and were
therefore being offered pursuant to an exemption from registration provided by
Section 4(2) and Regulation D, Rule 504, of the Securities Act. During fiscal
years ended December 31, 1999 and 2000, management used approximately all of the
proceeds received for the Company's capital requirements of $69,000, which
consisted primarily of advertising and travel expenses and legal and accounting
fees.

     Based upon a twelve-month plan proposed by management, it is anticipated
that such a work plan would require approximately $230,000 of additional
financing designed to fund the general business operations. As of the date of
this Quarterly Report, the Company does not have any material commitments other
than those described above nor does management anticipate any further material
commitments within the next twelve months. It is anticipated that any
expenditures to be incurred by the Company will be operational. Management
anticipates that a substantial portion of the initial budget of $230,000 for the
twelve-month work plan, which includes such expenditures, will be funded
pursuant to generation of revenue, public or private offerings, including
private placement offerings under Regulation S and/or Regulation D, Rule 506, of
its debt or equity securities and future advancements. The Company may not be
able to raise such funds and, therefore, the successful marketing of its
products may not be accomplished.

     From the date of this Quarterly Report, management believes that the
Company can satisfy its cash requirements for approximately the next six months
based on its ability to obtain advances from certain investors and related
parties. In the event the Company is unable to obtain advances from certain
investors and related parties, management believes that the Company can satisfy
its cash requirements for approximately the next three months from its liquid
assets.

     As of the date of this Quarterly Report, the Company has generated little
revenue from operations, has a working capital deficit and a retained earnings
deficit. Therefore, the Company has been deemed a "going concern" by its
independent auditors, Comiskey & Company, P.C., as noted in the financial
statements attached hereto. There is substantial doubt that the Company will be
able to retain its status as a "going concern", that is assumption of the
continuity of operations of the Company in the absence of evidence to the
contrary. Management believes that it can maintain its status as a "going
concern" based on its ability to raise funds pursuant to future public and
private offerings and to obtain advances and minimize operating expenses by not
duplicating expenses or incurring needless expenses.


PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

     During 1997, Progressive Games, Inc. ("Progressive") believed that the
Company was infringing upon certain of its products by virtue of the design,
manufacture and marketing of the Company's Ten Stix 21 and Shotgun 21 gaming
products. Therefore, on approximately November 20, 1997, Civil Action
97-WI-2689-CB, Progressive Games, Inc. v. Amusements Extra, Ten Stix, et. al.,
was filed in the Federal District Court in Denver, Colorado. This was a patent
infringement against the Company alleging certain of the Company's
products/games infringed upon Progressive's patents. Subsequently, Mikohn
Corporation ("Mikohn") purchased Progressive and became a party to the lawsuit.

                                       11
<PAGE>

     The Company and Mikohn, BCD Mecanique Ltd. ("BCD"), DEQ Casinos, Ltd.
("DEQ") and Amusements "Extra" Inc. ("AEI") entered into a memorandum of
agreement dated July 5, 1997 (the "Memorandum Agreement") whereby (i) BCD waived
all of its rights and possible recourse against the Company regarding any
possible patent infringement of BCD's inventions through the manufacture, use,
operation, sale and/or lease by the Company of the Ten Stix 21 and Shotgun 21
gaming products, (ii) BCD agreed to allow the Company to continue to
manufacture, use, operate, sell and/or lease the Company's products, (iii) the
Company granted to BCD, DEQ and AEI a world-wide, non-exclusive, royalty-free
license right to make, operate, use, manufacture, distribute and sell products
encompassing the Company's inventions in any of BCD's present or future
products, and (iv) DEQ generally agreed to manufacture the electronic systems
for the Company to be used in the Ten Stix 21 and Shotgun 21 gaming products.

     The Company was not required to purchase a minimum number of electronic
systems from DEQ nor was the Company required to purchase other components from
DEQ. Under the terms of the Memorandum Agreement, in the event the Company
breached certain provisions and failed to remedy within 30 days from receipt of
notice, BCD had the right to terminate the Memorandum Agreement and any and all
rights granted thereunder to the Company. Management of the Company deemed the
Memorandum Agreement important because it immediately allowed the Company to
continue to develop the games at issue and eliminated the uncertainty and cost
of prolonged litigation.

     On September 25, 1998, the Federal District Court entered a consent decree
stating that Progressive owned all of the right, title and interest in and to
certain patents and that unless authorized by Progressive, the Company was
permanently enjoined from making, using, selling, leasing or offering the
Shotgun 21 game or the Hold'em 88 game, with certain qualifications. The Company
was dismissed from the case and had no further liability in the case.

     The parties agreed that if the other defendants involved in the lawsuit
were successful in the suit, the license contained in the Memorandum Agreement
would be null and void. In the event the lawsuit was settled between the
parties, the Company would have to be a party to the settlement and the Company
would be allowed to terminate the license agreement.

     Therefore, based upon settlement of the lawsuit, on September 23, 1998, the
Company and BCD entered into a letter of understanding which modified the
Memorandum Agreement whereby (i) the Company assigned to BCD ownership of its
rights in the "continuation-in-part" under the Patent Application relating to
its lighting invention in all countries except for the United States of America,
(ii) the Company would remain the owner of all other patent rights with respect
to all aspects of the invention as claimed in the continuation-in-part to the
Patent Application; (iii) BCD granted to the Company the right to use in Ten
Stix 21 any such features contained in the Patent Application, (iv) in the event
Ten Stix 21 is not in the format described in the Memorandum Agreement, the
Company agreed to pay BCD a royalty fee of $175.00 per table for use of such
features, and (v) the Company agreed that BCD, DEQ and AEI shall have the right
to use the Company's inventions as described in the Memorandum Agreement along
with any improvements and/or additions to those reserved patent rights.

     As of the date of this Quarterly Report, the remaining parties to the
lawsuit have settled and made the Company a party to the settlement; therefore,
the Company has been released from all of its duties and obligations under the
license agreement and the underlying license contained in the Memorandum
Agreement is null and void.

     The Company had filed a patent application with the United States
Department of Commerce, Patent and Trademark Office for patent protection of its
"lighting" invention (the "Patent Application"). If granted, the Company
thereafter would need to file numerous international patent applications in
countries around the world in which the Company wanted protection of its
inventions. Therefore, because of the associated expenses, the Company agreed to
assign its ownership rights in the "continuation-in-part" under the Patent
Application relating to the "lighting invention" to allow BCD to allow BCD to
file for such international patents, excluding the United States, that relate to
the "lighting" protection. The parties agreed that if the Company does not first
receive the U.S. lighting patent and BCD does receive such patent protection
from the U.S., BCD would allow the Company to have exclusive rights to such
lighting patent in the United States.

     Management is not aware of any other legal proceedings contemplated by any
governmental authority or other party involving the Company or its properties.
No director, officer or affiliate of the Company is (i) a party adverse to the
Company in any legal proceedings, or (ii) has an adverse interest to the Company
in any legal proceedings. Management is not aware of any other legal proceedings
pending or that have been threatened against the Company or its properties.

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<PAGE>


ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS

     On January 23, 2001, Messrs. Sawyer and Cranford elected to convert their
respective shares of Preferred Stock into shares of Common Stock. The Company
issued 7,600,000 shares of Common Stock to Mr. Sawyer and Mr. Cranford,
respectively. The securities were issued in reliance upon an exemption from
registration provided by Section 4(2) and Regulation D, Rule 506, of the
Securities Act. No underwriter was involved in the transaction, and no
commissions or other remuneration were paid in connection with the conversion of
the securities.

     During the first quarter of fiscal year 2001 (prior to April 6, 2001), the
Company issued 16,800 shares of its Common Stock at $0.50 per share for an
aggregate consideration of $8,400. The Company issued shares of Common Stock to
seven investors, none of which were accredited investors as that term is defined
under Regulation D. The Company issued the shares in reliance upon the exemption
from registration provided by Section 4(2) and Regulation D, Rule 504, of the
Securities Act. The investors each executed a subscription agreement and
acknowledged that the securities to be issued have not been registered under the
Securities Act, that they understood the economic risk of an investment in the
securities, and that they had the opportunity to ask questions of and receive
answers from the Company's management concerning any and all matters related to
the acquisition of securities. No underwriter was involved in the transactions,
and no commissions or other remuneration were paid in connection with the offers
and sales of the securities.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

     No report required.

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

     No report required.

ITEM 5. OTHER INFORMATION

     No report required.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
     No report required.


SIGNATURES

     In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.


                                           TEN STIX INC.

Dated: October 22, 2001                    By:  /s/  Thomas E. Sawyer
                                             -----------------------
                                                     Thomas E. Sawyer, President


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