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

(Mark One)

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

                   For the Fiscal Year Ended December 31, 2001

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

              For the transition period from ________ to ________.

                           Commission File No. 1-12293

                            BROADENGATE SYSTEMS, INC.
                 ----------------------------------------------
                 (Name of small business issuer in its charter)

                Nevada                                        87-0394313
----------------------------------                 -----------------------------
(State or other jurisdiction of                   (I.R.S. Employer incorporation
  Identification Number)                                or organization)

            3/F, Block 2, Cyber City, South Hi-tech Industrial Park,
                          Shenzhen, Guangdong Province
           ----------------------------------------------------------
               (Address of Principal Executive Offices) (Zip Code)

Registrant's Telephone Number, Include Area Code: 011-86-755-671-6656

Securities Registered Pursuant to Section 12(b) of the Act:

      Title of Each Class             Name of Each Exchange on Which Registered
            None                                        None

Securities Registered Pursuant to Section 12(g) of the Act:

                          Common Stock, $.001 par value
                         --------------------------------
                                (Title of Class)

         Check whether the issuer (1) filed all reports  required to be filed by
Section 13 or 15(d) of the  Exchange  Act during the past twelve (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 ninety (90)
days. Yes X No

         Check if  disclosure  of  delinquent  filers in response to Item 405 of
Regulation S-B is not contained in this form, and will not be contained,  to the
best of registrant's  knowledge,  in definitive proxy or information  statements
incorporated  by reference  in Part III of this Form 10-KSB or any  amendment to
this Form 10-KSB. [ ]

         The issuer's revenues for its most recent fiscal year were $1,230,211.

         As of March 25, 2002,  14,393,000 shares of our common stock, $.001 par
value were  outstanding.  As of such date,  the  aggregate  market  value of the
common stock held by non-affiliates,  based on the closing bid price on the NASD
Bulletin Board, was approximately $1,529,901.

                       DOCUMENTS INCORPORATED BY REFERENCE

      Transitional Small Business Disclosure Format: Yes        No X


<PAGE>

                                TABLE OF CONTENTS

                                                                        Page
                                                                      --------


PART I

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

PART II

     ITEM 5. MARKET FOR COMMON EQUITY AND
     RELATED STOCKHOLDER MATTERS.............................................5
     ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS............................6
     ITEM 7. FINANCIAL STATEMENTS............................................9
     ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
             ON ACCOUNTING AND FINANCIAL DISCLOSURE..........................9

PART III

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

     SIGNATURES.............................................................13

     FINANCIAL STATEMENTS...................................................13


<PAGE>


                                     PART I

ITEM 1. DESCRIPTION OF BUSINESS

Corporate History

     World Concept  Development Limited (World), a development stage enterprise,
was  incorporated  on October 27, 1999,  in the British  Virgin  Islands.  World
incorporated a wholly owned subsidiary,  eSoftBank Networks  (Shenzhen) Co. Ltd.
(Shenzhen) on December 30, 1999, in the Peoples' Republic of China (PRC).  World
and Shenzhen were formed to effect a merger,  exchange of capital  stock,  asset
acquisition or other business combination with a domestic or foreign, private or
publicly held business.

     On  February  21,  2000,  World,  via  Shenzhen,   acquired  9.52%  of  the
outstanding  capital  of SiTech  Hainan  Limited.  (SiTech),  a company  related
through common  ownership and management  from Dr.  Hongbing Lan, a director and
shareholder  of both  World and SiTech for  approximately  $62,650.  On the same
date,  Shenzhen  acquired an  additional  42.86% of SiTech  from  SiTech  Hainan
Holding Co., Ltd.  (Holdings),  a company related  through common  ownership and
management,  for  approximately  $280,000.  SiTech is a  software  designer  and
markets   both   packaged   and  custom   designed   Internet-related   software
applications.  Since both entities involved in the acquisition were under common
control,  the  transaction  was  accounted  for at  historical  cost in a manner
similar to that in pooling-of-interests  accounting.  The consolidated financial
statements  include the results of operations for World and its subsidiary  from
their inception.

     On February 21, 2000, Shenzhen also acquired an 80% of the newly issued and
outstanding stock of eSoftBank (Beijing) Software Systems Co., Ltd. (Beijing), a
PRC company,  from Holdings for an initial capital  investment of  approximately
$116,000.  The  remaining 20% of Beijing is owned by Mr. Hongyu Lan, the brother
of Dr. Hongbing Lan.

     On March 31, 2000,  Natural Way  Technologies,  Inc.  (Natural Way) entered
into an Exchange  agreement  (the Exchange)  with World,  an  independent  third
party. In accordance with the Exchange,  Natural Way acquired 100% of the issued
and  outstanding  shares of World in exchange for  9,300,000  post reverse split
shares of Natural  Way.  Prior to closing,  Natural Way  effected a one for five
reverse stock split and changed the name of the Company to eSoftBank.com, Inc.

     The Exchange has been accounted for using the purchase method of accounting
as a reverse  acquisition,  whereby the company issuing its shares to effect the
business   combination  is  determined  to  be  the  acquiree  in  the  business
combination.  This occurs when the  shareholders  of the issuer have less than a
majority  of  voting  control  of  the  combined   entity.   The  company  whose
shareholders  retain the  majority  voting  interest in the  combined  entity is
presumed the acquirer.  In the current  Exchange,  the existing  shareholders of
Natural  Way  will  retain a 27%  voting  interest  in the  combined  entity  on
completion of the Exchange.  Accordingly, World is deemed to be the acquirer and
the assets of Natural Way were  required to be fair  valued at  acquisition.  As
Natural  Way had no  assets,  as of the  date  of the  Exchange,  no fair  value
adjustment  was required.  The  historical  financial  information  prior to the
Exchange are those of World.

     On October 15, 2001,  Shenzhen  acquired 70% of the outstanding  capital of
Tongzhou (Dalian) Computer Co., Ltd. (Dalian),  a PRC company for 307,000 shares
of eSoftBank.com,  Inc. common stock, from Holdings. The remaining 30% of Dalian
is owned by Leasci  Technologies  Co.,  Ltd.,  which is a  subsidiary  of Dalian
University of Technologies.

     On November 13, 2001, the Company changed its name from eSoftBank.com, Inc.
to BroadenGate Systems, Inc. to better describe out business model

<PAGE>

Business of the Company

         BroadenGate  Systems,  Inc.  was among the first  software  outsourcing
service providers in China information technology industry.  From its inception,
the  company  has  worked to develop  comprehensive  outsourcing  solutions  for
systems development and implementation  projects and provide consulting services
in the telecom,  network  security,  e-Business,  ERP, CRM and GIS sectors.  The
company also offers a diverse array of related products and services.

      BroadenGate has offices in Beijing, Shenzhen, our headquarters, Haikou and
Dalian,  the People  Republic  of China  (PRC).  The  Company  employs  over 200
software-development  and  system-consulting  professionals  and  more  than  30
project managers. BroadenGate objective is to be the leading Chinese provider of
comprehensive   outsourcing   solutions  and  project  management  tools,  using
industry-leading technical standards and business practices.

      To develop  core  infrastructure  for the Chinese  information  technology
outsourcing  market,  BroadenGate  offers complete  solutions to its outsourcing
clients as well as providing  project  management  tools. We have a professional
outsourcing team, a Chinese  collaborative  information  technology website, the
exclusive  rights to software  engineering  management  tools,  and  outsourcing
experience and standardized management processes.

         We changed our company's  name from Natural Way  Technologies,  Inc. to
eSoftBank.com,  Inc. on March 31, 2000 when we acquired (the  "Acquisition") all
of the  issued  and  outstanding  shares of World  Concept  Development  Limited
("WCD").  WCD  owns  the  software   development  and  Internet-based   software
subcontracting   platform   operations   conducted   in  China  under  the  name
eSoftBank.com.  This platform is a  facilitator  to make  experienced  personnel
available to companies  needing  software  expertise.  The company charges a fee
from the participants for this service.

         eSoftBank.com  built the first software  outsourcing  infrastructure in
China.  Currently,  we have in excess of 75,000 individual and corporate members
who are available to develop  software or assist those who need advice using the
eSoftBank.com  platform.  There are also  approximately  1200  Chinese  software
companies who contract with members for software collaboration and development.

Market Strategy

         To gain greater visibility with Japan outsourcing businesses, we formed
a new  business  operation  in Dalian,  PRC, a city much  closer to Japan.  This
visibility has assisted the Company in its international marketing efforts.

         The  Company  is  concentrating  its  efforts on  developing  strategic
alliances with both Chinese  information  technology (IT) companies and American
consulting  companies.  These  strategic  alliances will have a dual benefit (1)
they  help  develop  expertise  in major  software  programming  fields  and (2)
generated outsourcing engagements for the Company.

         The  Company  continues  to develop  its  position  in online  software
outsourcing  by  serving  as  an  e-market,  to  bring  buyers  and  sellers  of
information technology services together.  During the fourth calendar quarter of
2001,  we upgraded and expanded the Software  Outsourcing  Platform to provide a
matching of information  technology service providers and information technology
service  contractors  not  just  for  the  Chinese  market,  but  also  for  the
international market.

         The Company is  continuing  its effects to establish  more  outsourcing
partnerships  which  should  produce more  recurring  projects and a more stable
source of revenue.

Competition

         Competition  in  software   outsourcing  market  is  intense.  We  have
competitors  in  China  such as  NEU-Apline  and  TopSoft  as  well  as  foreign
competitors.  However our business model is unique. While NEU-Alpine and TopSoft
provide software  development by using their own technical resources but have no
core   technologies.   We  believe  that  we  have  the  following   advantages:
professional  software  outsourcing  services  for an  international  clientele;
experienced project managers and software developers;  industry-leading  project
management  and  collaborative  software  development  platforms,  good business
practices  in  management  and  software  development,  competency  groups  with
industry  and  technical  focuses,   and  diverse  partners  for  both  software
development and marketing.
<PAGE>

         Because we are a service company, we are not dependant on any suppliers
for raw  materials,  nor do we have any  principal  suppliers  for our operating
requirements.

Research and Development

         Research and development has a high priority:

*    We continue to develop our core  project  management  platform n Team which
     assists software companies in improving their software project  management.
     A new version will be launched in 2002.

*    We continue to develop and upgrade  roject  Management  Center the software
     outsourcing  business model of BroadenGate.  We have successfully  formed a
     close  relationship  with  Huawei,  one of the  largest  telecom  equipment
     manufacturers in Asia to assist us with this development and upgrade.

*    We  are  developing  and  expanding  our  network  and  project  management
     solutions. BroadenGate and TZ-Project, now we have over 1000 clients in the
     PRC.

      For the year ended  December 31, 2000, we expended  US$134,188 on research
and development and an additional $134,475 during calendar year 2001.

Patents and Trademarks

         OnTeam is our leading  project  management  platfor m for the CMMII and
ISO 9000 series users. This platform  integrates the functions including project
management, development process, quality assurance, communication, configuration
management  and bug report.  Now we are applying for patents for On Team in both
China and the United States.

We have the following trademarks in the PRC:

*    ESOFTBANK:  the  brand  of  our  company,  as  well  as  the  collaborative
     development and software outsourcing;

*    ONTEAM: a standardized  project management  platform,  which can manage the
     whole process of software  development.  It provides an integrated software
     development and project environment;

*    BROADENGATE  and E*LINUX the product  trademarks  for our internet  service
     package/platform;

Government Regulation

         We are not subject to any government  regulations  other than copyright
and trademarks laws.

Employees

         We have over 200  employees;  30 of which are  managerial and more than
170 of which are software engineers.

ITEM 2. DESCRIPTION OF PROPERTIES

         We do not own any real  estate,  but lease  three  separate  offices in
Beijing, Shenzhen, Haikou and Dalian.

         In Beijing, we lease 400 square meters (approximately 5,166 square fee)
of office space at 7/F, Beiji Building,  No.249, South Dongsi Street, Dongcheng,
Beijing,  100005,  the People's Republic of China. The rent for this facility is
$4,216 per month and the lease extends through March 2003.


<PAGE>

      In Shenzhen,  we lease 300 square meters (approximately 3,875 square feet)
of office space at 3/F,  Block 2, Cyber City,  South  Hi-tech  Industrial  Park,
Shenzhen,  Guangdong Province,  518057, the People's Republic of China. The rent
for this  facility is $1,300 per month and the lease  extends  through April 30,
2001. This facility also serves as our corporate headquarters.

      In Haikou we lease 700 square meters  (approximately 9,042 square feet) of
office  space at Room 1001,  Haikou  International  Commercial  Center,  No. 38,
Datong Road,  Haikou,  Hainan, The People's Republic of China. The rent for this
facility is $3,500 per month and the lease extends through August 2005.

    In Dalian we lease 400  square  meters  (approximately  5,167  square  feet)
office space at Room  409,No.1,LinBei  Road,  Hi-tech  Industrial Park,  DaLian,
Liaoning, The People's Republic of China. The rent for this office is $2,500 per
month and the lease will expire in May, 2002 with an option to renew.

      All of our officers are located in class A office buildings.

ITEM 3. LEGAL PROCEEDINGS

         To the best of management's  knowledge,  there are no legal proceedings
threatened or pending against us.

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

         There were no matters  submitted to a vote of the  shareholders  during
the fourth  quarter of our fiscal year,  nor were any voted upon other than at a
meeting of shareholders.

                                     PART II

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Market Information

            There is limited  trading in our Common Stock.  The following  table
sets  forth  the high and low bid price by  calendar  quarter  of the  Company's
common stock.

Quarter Ended         High      Low      Quarter Ended          High         Low
-------------         ----      ---      -------------          ----         ---

March 30, 2001        $0.563   $0.563    March 31, 2000       $     -      $  -
June 30, 2001           0.37     0.37    June 30, 2000           9.50      .937
September 28 2001       0.25     0.25    September 30, 2000     3.125      1.25
December 31, 2001       0.15     0.15    December 31, 2000       1.50      .469

Shareholders of Record

         As of March 20, 2002,  there were  approximately  301 record holders of
our common stock. Our common stock trades on the OTC:BB under the symbol BROG.

Dividends

         Apart from a deemed  dividend in 2000,  we have never  declared or paid
any cash  dividend  on our  Common  Stock nor do we expect to declare or pay any
dividend on our Common Stock in the foreseeable future.

<PAGE>


ITEM 6. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

General

    We  believe  that  we are  well  positioned  for  growth  in the  developing
information technology ("IT") industry in the PRC and internationally.  With the
PRC joining the WTO and the Beijing's 2008 Olympics,  the IT outsourcing  demand
should increase during the next several years.

    Since its inception in 1996, the company has grown with the Chinese domestic
IT industry.  BroadenGate is now leveraging its domestic  expertise to enter the
global  outsourcing  market,  and to co-op with leading  multinational  software
vendors in the Chinese market,  such as Oracle and IBM.  Building on the synergy
between  the  Chinese  and global  markets,  BroadenGate  hopes to  continue  to
increase its market share at home and win higher-margined contracts abroad.

Recent Developments

In 2001, the company  increased its business base by forming close  partnerships
with some of the leading  companies  in the PRC,  including  Huawei  Technology,
which is among the largest  manufacturers  of  telecommunications  equipment  in
Asia. As a result of Huawei outsourcing projects, we have substantially improved
our project management framework,  and establish four project management centers
(PMCS).

1.   A Telecommunication & Internet Center: We have over 100 engineers currently
     working in this PMC, and have outstanding contracts for over 30 million RMB
     in 2002 with Huawei.  We have reached an agreement of cooperation  with the
     China Policy  Security  Bureau,  to use our  solutions in Internet  access,
     network management and security, which should produce significant marketing
     potential in China.
2.   A  Development &  International  Center:  We recently won a COBOL  software
     development  contract for  approximately  15 million Yen  (US1,150,000)  in
     Dalian with SCM a subsidiary of Mitsubishi Corporation.
3.   A Project Management Software & System Integration Center: This division is
     based on the Dalian Tongzhou Computer Software Co., Ltd. System (Tongzhou),
     and   serves   more  than  1000   clients   in   architectural,   chemical,
     metallurgical, transportation, manufacturing and energy;
4.   An  E-Business  and  E-Banking  Center:  This center is new, but during the
     coming year,  we  anticipate  building a local  e-banking  system in Hainan
     island.

     In 2002, we will focus on the Chinese and Japanese markets. However, if the
     Company is to be a  dominent  player in the  industry,  it is  critical  to
     establish a physical presence in the US.

     The business of BroadenGate Systems is currently conducted in Renminbi, the
currency of China ("RMB"),  which for purposes of this section and our financial
statements are converted at an exchange rate of $1.00 = RMB 8.30.


<PAGE>

     Year Ended December 31, 2001 Compared to Year Ended December 31, 2000.

                Revenues.  Revenues  increased by $89,988 or 7.89% to $1,230,211
       for the year ended  December 31, 2001 from  $1,140,223 for the year ended
       December 31,  2000.  This  increase in revenues  resulted  from  software
       outsourcing.

                Cost of Sales.  Cost of sales increased by $251,956 or 49.21% to
       $763,997 for the year ended  December 31, 2001 from $512,041 for the year
       ended  December  31,  2000.  Cost of sales as a percent of  revenues  was
       62.10% for the year ended  December  31, 2001  compared to 44.91% for the
       year ended  December 31, 2000.  This  increase in cost of sales  resulted
       from  increased  revenues and a change in the mix of products  sold.  The
       increase in cost of sales as a percentage of revenue is  attributable  to
       an increased  percentage of sales from human resource  outsourcing  which
       has a lower profit margin than software development.

                Selling and Administrative Expenses.  Selling and administrative
       expenses decreased by $813,787 or 39.27% to $1,258,711 for the year ended
       December 31, 2001 from  $2,072,498  for the year ended December 31, 2000.
       This  decrease  in selling  and  administrative  expenses  resulted  from
       decreased marketing expenses, decreased research and development expenses
       and decreased professional fees.

                Other Expenses,  Net. Other expenses consists of interest income
       and expense,  bank charges,  recovery of prior expenses  foreign exchange
       gains or losses  and other  miscellaneous  income.  Other  expenses,  net
       increased  by $933 or 3.20% to $30,130  for the year ended  December  31,
       2001 from $29,197 for the year ended December 31, 2000.  This increase in
       other expenses,  net resulted principally from increased interest expense
       which was partially offset by interest and miscellaneous income.

                Income Taxes.  Income tax decreased by $60,188 or 100% to $0 for
       the year ended December 31, 2001 from $60,188 for the year ended December
       31, 2000.  Although the income of the Company increased,  our company has
       been  certificated  as  Hi-Tech  company  by  local  authority,  and  the
       government has refunded all necessary taxes.

                Minority Interest. Minority interest represents the 20% interest
       in eSoftBank (Beijing) Software Systems Co. Ltd., the 47.6% of SiTech
       Hainan Ltd. and 30% of Tongzhou (Dalian) Computer Co., Ltd., not owned by
       the Company.

                As a  result  of the  foregoing,  the net  loss  of the  Company
       decreased by $333,009 or 27.72% from net loss of $1,201,244  for the year
       ended  December  31,  2000 to a net loss of  $868,235  for the year ended
       December 31, 2001.

       Liquidity and Capital Resources

                As of December 31,  2001,  we had cash of $963,259 and a deficit
       in working capital of $2,351,089. This compares with cash of $388,159 and
       negative  working capital of $1,967,031 as of December 31, 2000. Our cash
       increased  because of increased  borrowings and the sale of common stock.
       However,  our working capital derived  principally as a result of our net
       operating loss.

                Cash used by operating  activities totaled $977,747 for the year
       ended  December 31, 2001.  This  compares with cash used by operations of
       $1,038,548 for the year ended December 31, 2000. The change in cash flows
       from operating  activities resulted from a reduced net operating loss for
       current year and increased depreciation,  amortization and abandonment of
       product which was offset by changes in the current accounts,  principally
       an increase in accounts receivable.


<PAGE>

                Cash used in investing  activities  decreased to $29,927 for the
       year ended  December 31, 2001 from  $511,276 for the year ended  December
       31, 2000. This decrease resulted from an decrease in capital expenditures
       , a  reduction  in  capital  expenditures  for  product  development  and
       purchases of long-term investments which was partially offset by advances
       to employees.

                Cash provided by financing activities totaled $1,582,775 for the
       year ended  December 31, 2001 compared to  $1,862,158  for the year ended
       December  31,  2000.  The  net  change  in  cash  provided  by  financing
       activities is attributable to a decrease in borrowings  partially  offset
       by an increase in  issuance of common  stock and a decrease in  dividends
       paid.

                For the year ended December 31, 2002, we have no plans for any
       major capital expenditures.

                Based on the  current  level of cash,  the  deficit  in  working
       capital and current level of  expenditures  in our  business,  it will be
       necessary  to seek  additional  sources of funding  over the next  twelve
       months. Management is negotiating with its banks for more project finance
       to fund  operations  for  the  current  year.  However,  without  outside
       financing or the sale of stock the Company has insufficient  resources to
       continue its business  operation for the next twelve months. No assurance
       can be given that the  Company  will be able to obtain any  financing  or
       sell any of its shares.

       Cautionary Statements

                In addition to the other  information  in this Annual  Report on
       Form 10-KSB,  the following  factors  should be  considered  carefully in
       evaluating the Company.

                Demand for our  products  softens in a  weakened  economy.  In a
       general economic downturn,  our customers  generally curtail  information
       technology  expenses.  This can  result  in lower  sales  revenues  and a
       lengthening  of sales cycles  during these  periods.  If we  experience a
       decrease in demand for our products,  we can't assure you that we will be
       able to cut costs quickly and  effectively in response to decreased sales
       or increased returns.

               Our Quarterly and Annual Revenues. Expenses and Operating Results
       May Fluctuate Significantly. These fluctuations may be due to a number of
       factors, including:

          *    demand for our products;

          *    size and timing of significant orders and their fulfillment;

          *    our ability to develop and upgrade our technology;

          *    changes in our level of operating expenses;

          *    our ability to compete in a highly competitive market

          *    undetected software errors and other product quality problems;

          *    changes  in our  sales  incentive  plans  and  staffing  of sales
               territories; and

          *    change in the mix of domestic and international  revenues and the
               level of international expansion.

<PAGE>

                Intra-Quarter  Fluctuations.  Orders booked throughout a quarter
       may substantially impact product revenues in that quarter. Our sales also
       fluctuate throughout the quarter as a result of customer buying patterns.
       In  addition,  we  base  our  expenses  to a  significant  extent  on our
       expectations  of future  revenues.  Most of our expenses are fixed in the
       short  term,  and we may not be able to reduce  spending  quickly  if our
       revenues are lower than we had  projected.  If our revenue  levels do not
       meet our projections, we expect our operating results to be adversely and
       disproportionately affected.

                Fixed Expenses.  We base our expenses to a significant extent on
       our  expectations of future  revenues.  Most of our expenses are fixed in
       the short term, and we may not be able to reduce spending  quickly if our
       revenues are lower than we had  projected.  If our revenue  levels do not
       meet our projections, we expect our operating results to be adversely and
       disproportionately affected.

                Our Markets are Highly  Competitive  and Rapidly  Changing.  Our
       markets are highly competitive and rapidly changing.  We face competition
       from small  companies  with niche  offerings as well as public  companies
       with a breadth  of  offerings.  New  competitors  have  arisen and can be
       expected to continue to arise in a rapidly evolving market.

                Our  Products  are Subject to Rapid  Technological  Change.  The
       market for our products is characterized by rapid  technological  change,
       frequent new product  introductions and  enhancements,  uncertain product
       life cycles, changes in customer demands and evolving industry standards.
       Our  products  could be rendered  obsolete if new  products  based on new
       technologies are introduced or new industry standards emerge.

                Limited   Protection  of   Proprietary   Technology:   Risks  of
       Infringement.  Our  success  depends  to a  significant  degree  upon our
       software and other  proprietary  technology.  The  software  industry has
       experienced widespread unauthorized reproduction of software products. We
       rely on a  combination  of  copyright  and  trade  secret  law as well as
       contractual  restrictions to protect our technology.  However, we may not
       be able to detect  unauthorized use or take appropriate  steps to enforce
       our intellectual  property rights. If we litigated to enforce our rights,
       litigation would be expensive,  would divert management resources and may
       not be  adequate  to protect  our  business.  We also could be subject to
       claims alleging infringement of third-party intellectual property rights.
       In addition,  we may be required to indemnify our  distribution  partners
       and end-users for similar claims made against them. Any claims against us
       could require us to spend  significant time and money in litigation , pay
       damages, develop non-infringing intellectual property or acquire licenses
       to intellectual  property that is the subject of the infringement claims.
       As a result,  claims  against us could  materially  adversely  affect our
       business.

                Risks Associated with Completed and Potential  Acquisitions.  We
       have  made  and  may  continue  to  make   investments  in  complementary
       companies,  technologies,  services or  products  if we find  appropriate
       opportunities. If we buy a company, we could have difficulty assimilating
       the personnel and  operations of the acquired  company.  If we make other
       types of acquisitions,  assimilating the technology, services or products
       into our  operations  could be  difficult.  Acquisitions  can disrupt our
       ongoing  business,  distract  management and other  resources and make it
       difficult to maintain our standards,  controls and procedures. We may not
       succeed  in  overcoming  these  risks or in any other  problems  we might
       encounter in connection with any future acquisitions.  We may be required
       to  incur  debt  or  issue  equity  securities  to  pay  for  any  future
       acquisitions. In addition, there can be no assurance that we will be able
       to  successfully  integrate our recent  acquisition of Dalian Tongzhou or
       that we will be able to integrate the products and technology we acquired
       into our sales model or product offerings.

<PAGE>

                Risks of Undetected  Software Errors.  Our software products are
       complex and may contain  certain  undetected  errors,  particularly  when
       first  introduced or when new versions or enhancements  are released.  We
       have previously discovered software errors in certain of our new products
       after their introduction. We cannot be certain that, despite our testing,
       such  errors  will not be found in  current  versions,  new  versions  or
       enhancements of our products after commencement of commercial  shipments.
       Such  undetected  errors  could  result  in  adverse  publicity,  loss of
       revenues,  delay in market  acceptance or claims against us by customers,
       all of which could materially adversely affect our business.

        Country Risk.  Substantially all of the Company operations are conducted
       in  the  PRC  and   accordingly,   the  Company  is  subject  to  special
       considerations  and  significant  risks  not  typically  associated  with
       companies  operating in North America and Western  Europe.  These include
       risks associated with the political,  economic and legal environments and
       with foreign currency  exchange,  among others. The Company's results may
       be affected by, among other things by changes in the political and social
       conditions in the PRC and changes in government  policies with respect to
       laws  and  regulations,  anti-inflation  measures,  currency  conversion,
       remittance  abroad and rates and method of taxation.  The PRC  government
       has  implemented  economic  reform  policies in recent  years,  and these
       reforms may be refined or changed by the  government  at any time.  It is
       possible  that a change in the PRC  leadership  could  lead to changes in
       economic  policy.  In  addition,  a  substantial  portion of the  Company
       revenue is  denominated  in Renminbi,  which must be converted into other
       currencies before remittance  outside the PRC. Both the conversion of the
       Reminbi and other foreign currencies and remittance of foreign currencies
       abroad require approval of the PRC government.

     ITEM 7. FINANCIAL STATEMENTS

               The consolidated  financial  statements of the Company,  together
       with the  independent  auditors'  report on these  statements by Blackman
       Kallick  Bartelstein  LLP are  included on pages F-2 through F-20 of this
       Form 10-KSB. (See Index to Financial  Statements on page F-1 of this Form
       10-KSB.)

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

               There  were no changes in or  disagreements  with the  certifying
       accountants or on any accounting or financial  disclosure item during any
       period covered by this Form 10-KSB.

                                    PART III

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

               The following are the names,  ages and positions  held by each of
our officers and directors:
<TABLE>

        Name
       Director Since          Age              Title          Date of First Election or Appointment
       --------------          ---              -----          -------------------------------------
       <S>                    <C>   <C>                        <C>

       Dr. Hongbing Lan        35    Chairman, Chief Executive
                                     Officer and Director                         2001
       Mr. Hongyu Lan          29    Chief Financial Officer
       Mr. Xinmin Gao          63    Director                                     2001
       Mr. Fa Ding Liu         39    Director                                     2001
       Mr. Daniel A. Norcross  28    Chief Marketing Officer                      2001
</TABLE>

            The term of office of each director is one year,  subject to removal
       by the  shareholders,  or until his successor is elected and qualified at
       our annual meeting of  shareholders.  The term of office for each officer
       is for one year, subject to removal by the Board of Directors, or until a
       successor  is  elected.  None of our  directors  serves  on the  board of
       directors of any other listed company.

<PAGE>

            Biographical Information

     Dr. Hongbing Lan. Dr. Hongbing Lan,  Chairman,  Chief Executive Officer and
director  received a doctorate degree in Automation  Control from Wuhan HuaZhong
Science  University.  In 1995,  he  established  the  State  Information  Center
Software  Laboratory.  In 1996,  Dr. Lan formed SiTech Hainan Co. Ltd.  where he
worked until 1999 when he formed eSoftBank Networks (Shenzhen) Co., Ltd.

     Mr. Daniel A. Norcross.  Mr. Daniel Norcross joined the Company in May 2001
and serves as our Chief  Marketing  Officer and  director.  Prior to joining the
Company, Mr. Norcross was employed by QwikQuote  Development,  Inc. as a Project
Manager  from 2000 to 2001.  He also acted as a software  developer  in Atlantic
Media  Corporation  from 1998 to 2000 and in Great Easter  Reinsurance Inc. from
1997 to 1997. He the a Bachelor's degree of Computer in Williams College in 1997
and a Master's degree from Harvard University in 2000.

     Mr.  Hongyu  Lan.  He joined  the  Company  in 1998 and serves as our Chief
Technical Officer.  Prior to joining the Company, Mr. Lan was employed by Hainan
Telecom  from 1997 to 1998.  From 1990 to 1997,  he finished  his  bachelor  and
master  study  plan.  Mr. Lan holds a Masters  Degree in Computer  Science  from
Huazhong University of Science and Technology.  Mr. Hongyu Lan is the brother of
Dr. Hongbing Lan.

     Mr. Xinmin Gao. Mr. Xinmin Gao was selected as a director of our Company in
April 2001 and is the Chief  Scientist  of the  Company.  Prior to  joining  the
Company,  Mr. Gao was employed by China  Information  Association  as the deputy
Director from 2000. He also acted as the director of State Information Center of
China for nearly 8 years from the year 1991.

     Mr. FaDing Liu. Mr. FaDing Liu was selected as a director of our Company in
April 2001. Prior to joining the Company,  Mr. Liu had been employed by New York
Office, Nanfang Security Co., Ltd as the office manager for over 5 years.

Compliance with Section 16(a) of the Securities Exchange Act of 1934

     Under the  Securities  laws of the United States,  our Executive  Officers,
Directors and  beneficial  owners of more than ten percent (10%) of any class of
our securities are required to report their initial  ownership of our securities
and any  subsequent  changes in that  ownership to the  Securities  and Exchange
Commission.  However,  none of these persons has yet filed the forms as required
with the Securities and Exchange Commission.

ITEM 10. EXECUTIVE COMPENSATION

     The following tables set forth certain summary  information  concerning the
compensation  paid or accrued for each of the Company's  last  completed  fiscal
years to the Company's or its principal subsidiaries chief executive officer and
each of its other  executive  officers that received  compensation  in excess of
$100,000  during such period (as determined at December 31, 2001, the end of the
Company's last completed fiscal year):

            Summary Compensation Table
<TABLE>

                                                                      Long-Term Compensation
--------------------- ----------------------------------------------- --------------------------------------- ---------- -----------
                                                                                                             Payouts
                                   Annual Compensation                                Awards
--------------------- ----------------------------------------------- ------------ ------------ ------------- ---------- -----------
                                 Salary     Bonus(1)   Other Annual    Restricted   Securities   Securities    LTIP     All Other
 Name and Principal    Year                           Compensation     Stock        Underlying   Underlying             Compensation
      Position                                                         Awards       Options)     Options
--------------------- -------- ---------- ---------- ---------------- ------------ ------------ ------------- ---------- -----------
<S>                    <C>      <C>        <C>        <C>             <C>           <C>          <C>          <C>         <C>

Dr. Hongbing Lan       1998      $10,200        0          0                0            0            0             0          0
Chairman, Chief        1999       11,800        0          0                0            0            0             0          0
Executive Officer      2000       14,200        0          0                0            0            0             0          0
and Director           2001       14,200        0          0                0            0            0             0          0

</TABLE>

<PAGE>


       Options /SAR Grants in Last Fiscal Year

            The Company has never granted options or stock appreciation rights.

       Bonuses and Deferred Compensation

            None

       Compensation Pursuant to Plans

            The Company does not have any compensation or option plans.
       Pension Plans

            Not applicable
       Other Compensation

              Warrants Guaranteed     Exercise Price            Term

Pacific
1-30-01           2,400,000                $3.00               1-31-00
1-30-02           1,600,000                $4.00               1-31-00
1-31-03           1,600,000                $5.00               1-31-00

     Directors  who are not officers of the Company  receive  $2,000 per year as
compensation.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     The following table sets forth the number of shares of the Company's Common
Stock, par value $0.01, held by each person who is believed to be the beneficial
owner of 5% or more of the shares of the Company's  common stock  outstanding at
March 22, 2002, based on the Company's  transfer  agent's list,  representations
and affidavits from  shareholders and beneficial  shareholder  lists provided by
the Depository Trust and securities broker dealers,  and the names and number of
shares held by each of the Company's  officers and directors and by all officers
and directors as a group.

       Title and    Name and Address of      Amount and Nature of
       Class        Beneficial Owner         Beneficial Ownership     Percent
      ------------  --------------------     ---------------------    --------
       Common       Dr. Hongbing Lan (1)(2)             4,193,660       29.13%
       Common       Pacific Winner Development          4,193,660       29.13%
                    Ltd. (1)(2)
       Common       World Concept Holding
                    2/F, Flat D & E, Cheong Ming
                    Bldg.
                    80-86 Argyle Street, Mongkok        1,120,800        7.78%
                    Kowloon, Hong Kong
<PAGE>

       Common       Shenzhen Commercial Bank            1,020,000        7.09%
                    No. 1099, Shen Nan Zhonghu
                    Shenzhen Commercial Bank
                    Building
                    Shenzhen, PRC
       Common       Hunan Huayin Electric Power Co. Ltd 1,000,000        6.94%
                    No. 428, Shaoshanbei Road
                    Changsha, PRC

       Common       Greatime Management Corp            1,000,000        6.94%
                    2/F, Flat D&E, Cheong Ming Building
                    Kowloon, Hong Kong
       All officers and Directors, and as a Group
       (5 Person)                                       4,193,660        29.14%

       (1) Address for all  persons  and  entities is 3/F,  Block 2, Cyber City,
South Hi-Tech Industrial Park, Shenzhen, P.R.China, 518057

       (2) Beneficially owned by Dr. Hongbing Lan

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
<TABLE>

       Name of related party              Existing relationship with the Company
       ---------------------              --------------------------------------
        <S>                                   <C>

         National Communication Centre          Stockholder
         Hong Yu Lan                            Officer and brother of Dr. Hongbing Lan
         Dr. Hongbing Lan                       Director and stockholder
         Leasci Technologies Co., Ltd. (Leasci) Stockholder of a subsidiary
         Sitech Holding (Hainan)
           Company Limited                      Common ownership - Dr. Hongbing Lan
</TABLE>

<TABLE>

         Name of parties and                            2000             2001            2001
           nature of amounts (due to) due from           Rmb              Rmb             US$
           -----------------------------------      -------------   -------------    -------------
         <S>                                      <C>               <C>              <C>

         National Communication Centre -
           Cash advance                                         -   (     33,271)    $(     4,009)
                                                    =============   ============     ============
         Dr. Hongbing Lan - Travel and trip
           expenses paid on behalf of the
           Company and cash advances                  (2,316,408)     (4,163,531)    $(   501,630)
                                                    =============   =============    =============
         Leasci - Cash advance                                  -   (    200,000)    $(    24,096)
                                                    =============   =============    =============
         Lan Hong Yu - Cash advance                             -   (    157,118)    $(    18,930)
                                                    =============   =============    =============
</TABLE>


         The  balance  with  Leasci  is  secured,  interest  bearing  at 3%  and
repayable on demand.

<PAGE>

         The balances with Dr. Hongbing Lan, National  Communication  Centre and
         Hong Yu Lan are unsecured, interest-free and repayable on demand.

<PAGE>

                                   PART IV
                    ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibits


2.1* Exchange  Agreement  by and among  Natural Way  Technologies,  Inc. and the
     shareholders of World Concept Development Limited

3.1* Amended and Restated Articles of Incorporation

3.2* Certificate  of Decrease and Increase in Authorized  Shares 3.3 Bylaws,  as
     amended to date (1)

21.1* Subsidiaries of Registrant

*    As previously filed with the Form 10-KSB for year ended December 31, 2000

(b)  Reports on Form 8-K

1.   Form 8-K dated  November 13, 2001  reporting the change in the Company name
     from eSoftBank.com, Inc. to BroadenGate Systems, Inc. and the change in the
     Company trading symbol to ROG


<PAGE>


                                   SIGNATURES

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


                                            BroadenGate Systems, Inc.


                                          By: /s/ Dr. Hongbing Lan
                                              ---------------------------
                                               Dr. Hongbing Lan
                                               Chief Executive Officer


                                           By: /s/ Hongyu Lan
                                              ----------------------------
                                               Hongyu Lan
                                               Principal Accounting Officer


     Dated: April 19, 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.


     Name                Title                                         Date
    ------              -------                                      ---------
/s/ Hongbing Lan     Chairman, Chief Executive Officer           April 19, 2002
----------------

Dr. Hongbing Lan


/s/ Xinmin Gao       Director                                    April 19, 2002
--------------
Mr. Xinmin Gao


/s/ Fa Ding Liu      Director                                    April 19, 2002
---------------
Mr. Fa Ding Liu
<PAGE>


                   Broadengate Systems, Inc. and Subsidiaries

                     Years Ended December 31, 2000 and 2001
================================================================================


                                 C o n t e n t s

                                                                         Pages

Independent Auditor's Report                                               1-2

Consolidated Balance Sheets                                                3-4

Consolidated Statements of Operations                                        5

Consolidated Statements of Stockholders' Equity (Deficit)                  6-7

Consolidated Statements of Cash Flows                                      8-9

Notes to Consolidated Financial Statements                               10-24


<PAGE>


                          Independent Auditor's Report




Stockholders and the Board of Directors
Broadengate Systems, Inc. and Subsidiaries




We have audited the  accompanying  consolidated  balance  sheets of  Broadengate
Systems,  Inc. and Subsidiaries  (the Company) as of December 31, 2000 and 2001,
and the related  consolidated  statements of  operations,  stockholders'  equity
(deficit) and cash flows for the years then ended. These consolidated  financial
statements   are  the   responsibility   of  the   Company's   management.   Our
responsibility  is  to  express  an  opinion  on  these  consolidated  financial
statements based on our audits.

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

In our opinion, the consolidated  financial statements referred to above present
fairly, in all material respects, the financial position of Broadengate Systems,
Inc. and  Subsidiaries  as of December 31, 2000 and 2001, and the results of its
operations  and its cash  flows  for the years  then  ended in  conformity  with
accounting principles generally accepted in the United States of America.

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

S/Blackman Kallick Bartelstein, LLP




Chicago, Illinois
January 29, 2002


<PAGE>


                   Broadengate Systems, Inc. and Subsidiaries

                           Consolidated Balance Sheets

                           December 31, 2000 and 2001
================================================================================


                                     Assets
<TABLE>

                                                      2000          2001           2001
                                                       Rmb           Rmb           US$
                                                   -----------   ----------    -----------
<S>                                                <C>           <C>           <C>

Current Assets
     Cash                                           3,221,718     7,995,053     $  963,259
     Accounts receivable                              640,900     3,192,662        384,658
     Deposits and other                             1,000,271       555,987         66,986
     Advances to employees                            427,395       389,008         46,869
     Costs and estimated earnings in excess of
       billings on uncompleted contracts              207,944             -              -
                                                   ----------   ------------   ------------

                  Total Current Assets              5,498,228    12,132,710      1,461,772
                                                   ----------   ------------   ------------



Noncurrent Assets
     Long-term investment                           2,800,000     2,800,000        337,349
     Product development costs, net                   852,995             -              -
     Fixed assets                                   2,929,976     2,432,328        293,052
     Other                                            265,068             -              -
     Advances to employees                                  -       326,000         39,277
     Intangibles                                            -     1,508,106        181,700
                                                  ------------  ------------   ------------

                  Total Noncurrent Assets           6,848,039     7,066,434        851,378
                                                  ------------  ------------   ------------
                  Total Assets                     12,346,267    19,199,144    $ 2,313,150
                                                  ============  ============   ============
</TABLE>


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

                                       -3-
<PAGE>

                      Liabilities and Stockholders' Deficit
<TABLE>

                                                                2000           2001           2001
                                                                 Rmb            Rmb            US$
                                                             ------------   -----------     ----------
<S>                                                          <C>            <C>             <C>

Current Liabilities
     Short-term borrowings - Bank                              16,000,000    24,000,000    $   2,891,566
     Accounts payable                                             159,900             -                -
     Accrued expenses
         Salaries, wages and other compensation                   669,171       337,048           40,608
         Employee fringe benefits                                 635,988     1,539,271          185,454
         Taxes                                                    355,713        17,458            2,104
         Other                                                  1,588,513     1,183,523          142,593
     Customer deposits                                             41,000        15,000            1,807
     Billings in excess of costs and estimated
       earnings on uncompleted contracts                           57,890             -                -
     Due to directors                                           2,316,408     4,163,531          501,630
     Due to related parties                                             -       390,919           47,099
                                                             ------------   ------------     ------------
                  Total Current Liabilities                    21,824,583    31,646,750        3,812,861
                                                             ------------   ------------     ------------


Minority Interest                                                 261,925            -                -
                                                             ------------   ------------     ------------


Stockholders' Equity (Deficit)
     Common stock, par value US$0.001; issued
       and outstanding - 14,393,000 shares and
       12,920,000 shares as of December 31, 2001 and
       2000, respectively                                        107,236       119,462           14,393
     Additional paid-in capital                               52,715,431    57,969,605        6,984,290
     Subscription receivable                                           -      (767,411)         (92,459)
     Reserve funds                                               347,148       347,148           41,825
     Accumulated deficit                                     (62,910,056)  (70,116,410)      (8,447,760)
                                                           --------------  -------------    -------------

                  Total Stockholders' Deficit                 (9,740,241)  (12,447,606)      (1,499,711)
                                                           --------------  -------------    -------------

                  Total Liabilities and Stockholders'
                    Deficit                                   12,346,267    19,199,144     $  2,313,150
                                                           ==============  =============    =============
</TABLE>

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


                                      -4-
<PAGE>


                   Broadengate Systems, Inc. and Subsidiaries

                      Consolidated Statements of Operations

                     Years Ended December 31, 2000 and 2001

================================================================================
<TABLE>

                                                  2000              2001               2001
                                                   Rmb               Rmb               US$
                                              ------------      -------------      ------------
<S>                                           <C>                <C>               <C>

Revenue                                        9,463,849         10,210,749       $ 1,230,211

Cost of Sales                                 (5,045,379)        (6,341,176)         (763,997)
                                             -------------      -------------      -----------

Gross Profit                                   4,418,470          3,869,573           466,214

Selling and Administrative Expenses          (16,406,295)       (10,447,304)       (1,258,711)

Abandonment of Product Development                     -           (545,902)          (65,772)
                                             -------------      -------------      -----------

Loss from Operations                         (11,987,825)        (7,123,633)         (858,269)
                                            --------------      -------------      -----------

Other Expense (Income)
     Interest expense                            497,640          1,057,202           127,374
     Other income, net                          (255,304)          (807,121)          (97,244)
                                            --------------      --------------     -----------

              Total Other Expense, Net           242,336            250,081            30,130
                                            --------------      --------------     -----------

Loss before Income Taxes                     (12,230,161)        (7,373,714)         (888,399)

Income Taxes                                     499,561                  -                 -
                                            --------------      --------------     -----------

Loss before Minority Interest                (12,729,722)        (7,373,714)         (888,399)

Minority Interest in Loss                     (2,759,393)          (167,360)          (20,164)
                                           ---------------      --------------     -----------

Net Loss                                      (9,970,329)        (7,206,354)      $  (868,235)


Loss per Share - Basic and Diluted                  (.78)              (.53)      $      (.06)



Weighted Average Common Shares
  Outstanding - Basic and Diluted             12,845,699         13,712,979        13,712,979

</TABLE>



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

                                      -5-

<PAGE>

                   Broadengate Systems, Inc. and Subsidiaries

            Consolidated Statements of Stockholders' Equity (Deficit)

                     Years Ended December 31, 2000 and 2001

================================================================================
<TABLE>

                                            Common Stock           Series A Convertible                Common Stock
                                              Par Value               and Redeemable                     Par Value
                                              US $1.00                Preferred Stock                    US $0.001
                                       ----------------------     ---------------------     --------------------------------
                                           No.                       No.                        No.
                                           of         Amount       of Amount      of          Amount
                                         Shares         Rmb        Shares         Rmb         Shares               Rmb
                                       ---------    ---------     --------     --------     -------------     -------------
<S>                                    <C>           <C>          <C>          <C>          <C>               <C>

Balance as of January 1, 2000              1,000        8,300            -            -                 -                 -

Reclassification of Reserve Funds              -            -            -            -                 -                 -

Effect of Merger                          (1,000)      (8,300)         600            5        17,500,000           145,320

One for Five Reverse Stock Split               -            -            -            -       (14,000,000)         (116,270)

Issuance of Common Stock                       -            -            -            -         9,300,000            77,190

Conversion of Preferred Stock                  -            -         (600)          (5)          120,000               996

Assumption of Liabilities by
  Stockholder Contributed to Capital           -            -            -            -                 -                 -

Net Loss                                       -            -            -            -                 -                 -

Deemed Dividends                               -            -            -            -                 -                 -
                                       ---------    ---------     --------     --------     -------------     -------------

Balance as of December 31, 2000                -            -            -            -        12,920,000           107,236

Issuance of Common Stock                       -            -            -            -         1,473,000            12,226

Net Loss                                       -            -            -            -                 -                 -
                                       ---------    ---------     --------     --------     -------------     -------------

Balance as of December 31, 2001                -            -            -            -        14,393,000           119,462

</TABLE>

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


                                      -6-
<PAGE>


<TABLE>

    Additional                                 Retained Earnings
    Paid-in              Subscription          (Accumulated             Reserve
    Capital              Receivable             Deficit)                Funds         Total
      Rmb                    Rmb                    Rmb                 Rmb            Rmb
 ------------------     ---------------        ------------------    -------------  ------------
<S>                     <C>                    <C>                   <C>            <C>


      1,209,012                    -                 1,462,034           306,386      2,985,732

              -                    -                   (40,762)           40,762              -

     51,383,974                    -               (51,520,999)                -              -

        116,270                    -                         -                 -              -

        (77,190)                   -                         -                 -              -

           (991)                   -                         -                 -              -


         84,356                    -                         -                 -         84,356

              -                                     (9,970,329)                -     (9,970,329)

              -                    -                (2,840,000)                -     (2,840,000)
 --------------     ----------------            ----------------    -------------  -------------

     52,715,431                    -               (62,910,056)          347,148     (9,740,241)

      5,254,174             (767,411)                        -                 -      4,498,989

              -                    -                (7,206,354)                -     (7,206,354)
 --------------     ----------------            ----------------    -------------  -------------

     57,969,605             (767,411)              (70,116,410)          347,148    (12,447,606)

</TABLE>


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

                                      -7-


<PAGE>


                   Broadengate Systems, Inc. and Subsidiaries

                      Consolidated Statements of Cash Flows

                     Years Ended December 31, 2000 and 2001

================================================================================
<TABLE>

                                                            2000            2001          2001
                                                             Rmb            Rmb           US$
                                                         -----------     ----------    ----------
<S>                                                       <C>            <C>           <C>

Cash Flows from Operating Activities
     Net loss                                             (9,970,329)   (7,206,354)   $  (868,235)
                                                         ------------  -------------   -----------
     Adjustments to reconcile net loss to
       to net cash used in operating activities
         Depreciation                                        400,808       688,579         82,961
         Amortization of product development costs
           and intangibles                                   327,049       448,437         54,028
         Abandonment of product development                        -       545,902         65,772
         Provision for losses on receivables -
           Customers                                       1,675,881       958,959        115,537
         Minority interest                                (2,759,393)     (167,360)       (20,164)
         (Increase) decrease in
              Accounts receivable                           (302,451)   (3,330,421)      (401,256)
              Deposits and other                            (217,984)      325,404         39,205
              Other                                                -       375,987         45,300
              Costs and estimated earnings in
                excess of billings on uncompleted
                projects                                    (207,944)      207,944         25,053
         Increase (decrease) in
              Accounts payable and accrued expenses        2,434,138      (878,485)      (105,841)
              Customer deposits                              (64,098)      (26,000)        (3,132)
              Billings in excess of costs and
                estimated earnings on uncompleted
                contracts                                     57,890       (57,890)        (6,975)
                                                         -------------  -----------    ------------

                  Total Adjustments                        1,343,896      (908,944)      (109,512)
                                                         -------------  -----------    ------------

                  Net Cash Used in Operating
                    Activities                            (8,626,433)   (8,115,298)      (977,747)
                                                         -------------  -----------    ------------
</TABLE>


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

                                      -8-
<PAGE>


                   Broadengate Systems, Inc. and Subsidiaries

                      Consolidated Statements of Cash Flows

                     Years Ended December 31, 2000 and 2001

================================================================================
<TABLE>


                                                      2000          2001           2001
                                                       Rmb           Rmb            US$
                                                   -----------   ----------     -----------
<S>                                                <C>           <C>            <C>

Cash Flows from Investing Activities
     Capital expenditures                           (2,571,251)     (16,792)    $   (2,023)
     Capitalized expenditures for product
       development costs                              (357,772)           -              -
     Purchase of long-term investment               (2,800,000)           -              -
     Net repayments from stockholders                1,485,426            -              -
     Repayment of (advances to) employees                6,483     (286,218)       (34,484)
     Cash from Dalian acquisition                            -       54,612          6,580
                                                   ------------ ------------     -----------

                  Net Cash Used in
                    Investing Activities            (4,237,114)    (248,398)       (29,927)
                                                   ------------ ------------     -----------

Cash Flows from Financing Activities
     Net short-term borrowings                      16,000,000    8,000,000        963,856
     Issuance of common stock                                -    3,098,989        373,372
     Net borrowings from directors
       and related parties                           2,055,914    2,038,042        245,547
     Initial investment of minority stockholder        240,000            -              -
     Dividends                                      (2,840,000)           -              -
                                                   ------------ ------------     -----------

                  Net Cash Provided by
                    Financing Activities            15,455,914   13,137,031      1,582,775
                                                   ------------ ------------     -----------

Net Increase in Cash                                 2,592,367    4,773,335        575,101

Cash, Beginning of Year                                629,351    3,221,718        388,158
                                                   ------------ ------------     -----------

Cash, End of Year                                    3,221,718    7,995,053     $  963,259
                                                   ============ ============     ===========

</TABLE>

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

                                      -9-

<PAGE>


                   Broadengate Systems, Inc. and Subsidiaries

                   Notes to Consolidated Financial Statements

                     Years Ended December 31, 2000 and 2001

================================================================================


1.       Organization and Principal Activities

         Broadengate Systems,  Inc. (formerly known as eSoftBank.com,  Inc.) and
         Subsidiaries  (the  "Company")  is  incorporated  under the laws of the
         State of Nevada, in the United States of America.  The parent company's
         principal  business  activity  is a 100%  investment  in World  Concept
         Development   Limited   (World),   primarily  a  holding   company  for
         investments in operating  companies.  World is  incorporated  under the
         laws of the British Virgin Islands.  The Company is a software designer
         and markets both packaged and custom-designed Internet related software
         applications. Custom-designed applications represent the primary source
         of the Company's revenue.

         The  consolidated  financial  statements  include  the  accounts of the
         Company,  World and its  wholly  owned  subsidiary  eSoftBank  Networks
         (Shenzhen)  Co. Ltd.  (Shenzhen)  and its majority  owned  subsidiaries
         eSoftBank  (Beijing)  Software Systems Co. Ltd.  (Beijing) (80% owned),
         SiTech  Hainan  Limited  (SiTech)  (52.38%  owned) and Dalian Tong Zhou
         Computer  Limited  (Dalian) (70% owned) as more fully described  below.
         All  material   intercompany   balances  and  transactions   have  been
         eliminated on consolidation.

         On March 31, 2000, Natural Way Technologies, Inc. (Natural Way) entered
         into an Exchange  agreement (the  Exchange) with World,  an independent
         third party. In accordance with the Exchange, Natural Way acquired 100%
         of the issued and outstanding shares of World in exchange for 9,300,000
         post-reverse split shares of Natural Way. Prior to closing, Natural Way
         affected a one for five reverse stock split and changed the name of the
         Company to eSoftBank.com,  Inc. and Subsidiaries.  In addition, Natural
         Way issued warrants to two parties for future purchases of common stock
         in the Company. See Note 8.

         The  Exchange  has been  accounted  for  using the  purchase  method of
         accounting as a reverse  acquisition,  whereby the company  issuing its
         shares to effect  the  business  combination  is  determined  to be the
         acquiree in the business combination. A reverse acquisition occurs when
         the  stockholders  that  retain the  majority  voting  interest  in the
         combined  entity  are  presumed  to be the  acquirer.  In  the  current
         Exchange,  the existing  stockholders  of Natural Way will retain a 27%
         voting  interest in the combined  entity on completion of the Exchange.
         Accordingly,  World is  deemed  to be the  acquirer  and the  assets of
         Natural Way were required to be fair valued at acquisition.  As Natural
         Way had no  assets,  as of the  date  of the  Exchange,  no fair  value
         adjustment was required.  The historical financial information prior to
         the Exchange is that of World and subsidiaries.

         World, then a development stage enterprise, was incorporated on October
         27, 1999, in the British Virgin Islands.  World incorporated its wholly
         owned  subsidiary  Shenzhen  on  December  30,  1999,  in the  Peoples'
         Republic of China (PRC). World and Shenzhen were incorporated to effect
         a  merger,  exchange  of  capital  stock,  asset  acquisition  or other
         business  combination  with a domestic or foreign,  private or publicly
         held business.

                                      -10-
<PAGE>


1.       Organization and Principal Activities (Continued)

         On  February  21,  2000,  World  via  Shenzhen,  acquired  9.52% of the
         outstanding  capital  of  SiTech,  a  company  related  through  common
         ownership  and  management  from  Dr.  Hongbing  Lan,  a  director  and
         stockholder of both World and SiTech for approximately  $62,650. On the
         same date, Shenzhen acquired an additional 42.86% of SiTech from SiTech
         Hainan Holding Co., Ltd.  (Holdings),  a company related through common
         ownership  and  management,  for  approximately  $280,000.  Since  both
         entities  involved in the acquisition  were under common  control,  the
         transaction was accounted for at historical cost in a manner similar to
         that in pooling-of-interests accounting. The cash consideration paid in
         these transactions was classified as a deemed dividend in the amount of
         Rmb  2,840,000.  The  consolidated  financial  statements  include  the
         results  of  operations  for  World  and its  subsidiaries  from  their
         inception.

         On February 21, 2000,  Shenzhen  also  acquired 80% of the newly issued
         and outstanding stock of Beijing,  a PRC company,  from Holdings for an
         initial capital investment of approximately $116,000. The remaining 20%
         of Beijing is owned by Mr.  Lan Hong Yu,  the  brother of Dr.  Hongbing
         Lan.

         During  August of 2000,  Shenzhen  acquired  a 2.67%  interest  for Rmb
         2,800,000 in a newly  formed  entity,  whose  primary  stockholder  and
         initiator  is the Hunan  Post  Office  (governmental  agency).  The new
         entity's  development  projects  are to  include:  a postage  computing
         system,  telecommunication  technology development, a postage machinery
         manufacturing line and other various  technology  related systems.  The
         acquisition  will  be  accounted  for  at  the  lower  of  cost  or net
         realizable value.

         On October 14, 2001,  Shenzhen acquired 70% of the outstanding  capital
         of Dalian, an unrelated PRC company,  in exchange for 307,000 shares of
         the Company valued at $.55 per share or approximately $168,675.  Dalian
         is a  software  company  in  Northeastern  China  focusing  on  project
         management  software  and  system  integration.  This  acquisition  was
         accounted  for as a  purchase  in  accordance  with the  SFAS No.  141,
         "Business  Combinations."  The  accompanying  statement  of  operations
         includes the activity of Dalian from the purchase date through December
         31, 2001.


2.       Going Concern

         The accompanying  consolidated  financial statements have been prepared
         on a going concern basis,  which contemplates the realization of assets
         and the  satisfaction  of liabilities in the normal course of business.
         As shown in the accompanying  consolidated  financial  statements,  the
         Company  incurred a net loss of Rmb 9,970,329 and Rmb 7,206,354  during
         the years  ended  December  31, 2000 and 2001,  and has an  accumulated
         deficit of Rmb  62,910,056  and Rmb  70,116,410 as of December 31, 2000
         and 2001.


                                      -11-
<PAGE>

2.       Going Concern (Continued)

         The  consolidated  financial  statements do not include any adjustments
         relating to the  recoverability  and  classification  of recorded asset
         amounts or the amounts and  classification of liabilities that might be
         necessary  should the Company be unable to continue as a going concern.
         The Company's  continuation  as a going  concern is dependent  upon its
         ability to (a) generate sufficient cash flow to meet its obligations on
         a timely basis, (b) obtain additional financing as may be required, and
         (c) ultimately sustain profitability.  Management's plan to continue as
         a going concern relies heavily on returning to  profitability  in 2002.
         This  return to  profitability  is based  upon  expense  control,  cost
         reductions,  and increased  revenue  growth.  Management  may also seek
         additional funding sources should the need arise. There is no assurance
         that management's plans will be successful or, if successful, that they
         will result in the Company continuing as a going concern.


         3.                Summary of Significant Accounting Policies

         (a)  Cash

              Substantially  all of the  Company's  cash  is  held  at  Shenzhen
              Commercial  Bank as of December 31, 2001. The Company  believes it
              is not exposed to any significant credit risk on cash.

(b)      Fixed assets and depreciation

              Fixed  assets  are stated at cost less  accumulated  depreciation.
              Depreciation  of fixed assets is calculated  on the  straight-line
              basis to write off the costs less estimated residual value of each
              asset over its estimated  useful life. The principal  annual rates
              used for this purpose are as follows:

                           Land lease rights                          1.5%
                           Leasehold improvements                      20%
                           Furniture and office equipment              20%
                           Automobiles                                 20%
                           Computer equipment                          20%

              Land lease  rights in the PRC are stated at cost less  accumulated
              amortization.  Amortization  of land lease rights is calculated on
              the straight-line  basis over the lesser of their estimated useful
              life or the lease term.  The  principal  annual rate used for this
              purpose is 1.5%.

                                      -12-
<PAGE>


     3.   Summary of Significant Accounting Policies (Continued)

         (c)  Product development costs

              The Company  capitalizes  costs  incurred  for the  production  of
              computer   software   developed  for  sale  to  outside   parties.
              Capitalized  costs include  direct labor and related  overhead for
              software  produced  by the  Company.  All  costs  in the  software
              development   process   which  are   classified  as  research  and
              development   are   expensed  as  incurred   until   technological
              feasibility has been established.  Once technological  feasibility
              has  been  established,  such  costs  are  capitalized  until  the
              software has completed beta testing and is generally available for
              sale.   Amortization,   a  cost  of  revenue,  is  provided  on  a
              product-by-product  basis,  using the  straight-line  method  over
              three  years,  commencing  the  month  after  the date of  product
              release.   Annually,   the  Company   reviews  and   expenses  the
              unamortized  cost of any  feature  identified  as being  impaired.
              During  2001,  the  Company  decided  to no  longer  support  this
              software  developed for sale and the remaining  capitalized  costs
              were written off. The Company also reviews  recoverability  of the
              total  unamortized  cost of all features and software  products in
              relation to estimated relevant other revenues and, when necessary,
              makes an appropriate adjustment to net realizable value.

              Capitalized product development costs consist of the following:
<TABLE>

                                              2000             2001            2001
                                               Rmb              Rmb             US$
                                          -------------   -------------    -------------
              <S>                         <C>             <C>              <C>

              Balance, beginning of year      822,272         852,995    $     102,770
              Costs capitalized               357,772          28,799            3,471
              Costs amortized                (327,049)       (335,892)         (40,469)
              Costs abandoned                       -        (545,902)         (65,772)
                                          -------------   -------------    -------------

              Balance, end of year            852,995               -    $           -
</TABLE>


              The accumulated  amortization of product development costs related
              to the  production  of computer  software  totalled  Rmb 0 and Rmb
              543,971 as of December 31, 2001 and 2000, respectively.

              Included in selling and  administrative  expenses are research and
              development costs totalling Rmb 1,719,794 and Rmb 1,113,761 in the
              years ended December 31, 2001 and 2000, respectively.

         (d)  Intangibles

              The  cost of an  acquired  customer  list  and  software  is being
amortized over three years, using the straight-line method.

                                      -13-
<PAGE>

3.   Summary of Significant Accounting Policies (Continued)

(e)  Employee fringe benefits

     All  companies  registered  in  the  PRC  must  appropriate  the  following
     percentage  of staff salary for  employee  fringe  benefits:  14% for staff
     welfare,  2% for labor  union  fees and 1.5% for the  education  fund.  The
     accrued benefit is decreased by actual cash payments.

(f)  Revenue recognition

     Contracts

     The Company  reports income from contracts on the  percentage-of-completion
     method of  accounting.  The  determination  of completion is based upon the
     proportion of costs incurred to total  estimated  costs for such contracts.
     Provisions for estimated  losses on  uncompleted  contracts are made in the
     period in which such  losses are  determined.  Administrative  and  general
     costs  are  expensed  in the  period  incurred  and  are not  allocated  to
     contracts in process.

     Software

     The Company  recognizes  income from the sale of computer software when the
     merchandise is shipped.

(g)  Income taxes

     Income taxes are provided  under the  provisions  of Statement of Financial
     Accounting Standards No. 109.

(h)  Management estimates

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

(i)  Advertising

     Advertising  is  expensed  the  first  time the  advertising  takes  place.
     Advertising  expense was Rmb 166,231 and Rmb  3,171,852  for 2001 and 2000,
     respectively.

                                      -14-
<PAGE>


3.   Summary of Significant Accounting Policies (Continued)

(j)  Foreign currency translation

     Foreign  currency  transactions   denominated  in  foreign  currencies  are
     translated  into  Renminbi  (Rmb)  at the  respective  applicable  rates of
     exchange. Monetary assets and liabilities denominated in foreign currencies
     are translated  into Rmb at the applicable  rate of exchange at the balance
     sheets date. The resulting exchange gains or losses are credited or charged
     to the statements of income.

     Translation  of amounts from Rmb into United  States  dollars (US$) for the
     convenience  of the reader has been made at the unified  exchange rate (see
     Note 14) on December 31, 2001 of US$ 1.00: Rmb 8.30. No  representation  is
     made that the Rmb amounts could have been or could be converted into US$ at
     that rate on the above dates or at any other date.

(k)  Fair value of financial instruments

     The carrying  amounts of certain  financial  instruments,  including  cash,
     accounts  receivable and accounts payable  approximate their fair values as
     of December 31, 2001 and 2000 because of the relatively short-term maturity
     of  these  instruments.  The  fair  value of the  Company's  related  party
     receivables  and  payables  cannot be  determined  due to the nature of the
     transactions.

(l)  Related party

     A related  party is an entity that can control or  significantly  influence
     the management or operating policies of another entity to the extent one of
     the entities may be prevented  from pursuing its own  interests.  A related
     party may also be any party the entity  deals with that can  exercise  that
     control.

(m)  Earnings per share

     Basic and diluted net earnings (loss) per share were computed in accordance
     with SFAS No. 128,  "Earnings  per Share."  Basic net earnings per share is
     computed  by  dividing  net  earnings  available  to  common   stockholders
     (numerator)  by the weighted  average  number of common shares  outstanding
     (denominator)  during the period and excludes the dilutive  effect of stock
     options and  convertible  debentures.  Diluted net earnings per share gives
     effect to all dilutive potential common shares outstanding during a period.
     In computing  diluted net earnings per share,  the average  stock price for
     the  period is used in  determining  the  number of  shares  assumed  to be
     reacquired  under the  treasury  stock  method  from the  exercise of stock
     options  and the if  converted  method to compute  the  dilutive  effect of
     convertible debentures.

     The 9,300,000  shares issued as  consideration  for the reverse  merger are
considered outstanding for all periods presented.

                                      -15-
<PAGE>



3.   Summary of Significant Accounting Policies (Continued)

(n)  New accounting pronouncements

     In June 1998, the Financial  Accounting Standards Board issued Statement of
     Financial  Accounting  Standards  No. 133 (SFAS No. 133),  "Accounting  for
     Derivative  Instruments  and  Hedging  Activities."  SFAS No. 133  requires
     companies  to  recognize  all  derivative  contracts  as  either  assets or
     liabilities  in the balance  sheets and to measure  them at fair value.  If
     certain conditions are met, a derivative may be specifically  designated as
     a hedge,  the  objective  of which is to match  the  timing of gain or loss
     recognition  on the  hedging  derivative  with the  recognition  of (i) the
     changes  in the  fair  value of the  hedged  asset  or  liability  that are
     attributable  to the hedged risk or (ii) the earnings  effect of the hedged
     forecasted  transaction.  For a  derivative  not  designated  as a  hedging
     instrument,  the gain or loss is  recognized  as  income  in the  period of
     change. SFAS No. 133 as amended by SFAS No. 137 is effective for all fiscal
     quarters  of fiscal  years  beginning  after  June 15,  2000.  Based on its
     current and planned future activities  relative to derivative  instruments,
     the Company  believes  that the adoption of SFAS No. 133 as amended has not
     had and will not have a significant effect on its financial statements.

     On December 3, 1999,  the SEC issued Staff  Accounting  Bulleting  101 (SAB
     101),  "Revenue  Recognition in Financial  Statements."  SAB 101 summarizes
     some  of  the  SEC's  interpretations  of  the  application  of  accounting
     principles  generally  accepted in the United  States of America to revenue
     recognition.  Revenue recognition under SAB 101 was initially effective for
     the Company's first quarter 2000 financial  statements.  However, SAB 101B,
     which was released on June 26, 2000,  delayed  adoption of SAB 101 until no
     later than the fourth fiscal  quarter of 2000.  Changes  resulting from SAB
     101 require  that a  cumulative  effect of such  changes for 1999 and prior
     years be recorded as an adjustment  to net income on January 1, 2000,  plus
     an adjustment of the statement of operations  for the three months ended in
     the quarter of adoption.

     The  Company  believes  that  its  revenue  recognition  practices  are  in
     substantial compliance with SAB 101 and that the adoption of its provisions
     was not material to its annual or quarterly results of operations.


                                      -16-
<PAGE>



3.   Summary of Significant Accounting Policies

(n)  New accounting pronouncements (Continued)

     In June 2001,  the FASB issued SFAS No. 141,  "Business  Combinations"  and
     SFAS No.  142,  "Goodwill  and  Other  Intangible  Assets,"  effective  for
     acquisitions after June 30, 2001 and for years beginning after December 15,
     2001,  respectively.  Under  the new  rules,  goodwill  and  certain  other
     intangible  assets  will no longer be  amortized,  but will be  subject  to
     annual impairment tests in accordance with the standards.  Other intangible
     assets will continue to be amortized  over their useful lives.  The pooling
     of interests method is no longer permitted for business  combinations after
     June  30,  2001.  See Note 1  regarding  the  company's  October  14,  2001
     acquisition. Early adoption of SFAS No. 142 is permitted for companies with
     fiscal  years  beginning  after March 15, 2001,  provided  that their first
     quarter  financial  statements  have not been issued prior to the adoption.
     The  Company is not  required to adopt this new  standard  until its fiscal
     year ended December 31, 2002. Based upon management's preliminary analysis,
     no impairment of goodwill under the new SFAS No. 142 is expected.

     In June  2001,  the  FASB  issued  SFAS  No.  143,  "Accounting  for  Asset
     Requirement  Obligations," effective for the years beginning after June 15,
     2002. Under this standard asset  retirement  obligations will be recognized
     at a discounted  fair value basis and  capitalized and allocated to expense
     over the asset's  useful life. The Company does not expect that adoption of
     SFAS No.  143 will have a  material  impact on its  consolidated  financial
     position or results of operation.

     In  August  2001,  the  FASB  issued  SFAS  No.  144,  "Accounting  for the
     Impairment or Disposal of Long-Lived Assets," effective for years beginning
     after December 15, 2001. the new rules for long-lived assets to be disposed
     by sale excludes the  allocation of goodwill to be tested for impairment of
     such  assets,  establishes  a  primary  asset  approach  to be used for the
     estimation of future cash flows and allows for probability-weighted  future
     cash flow  estimation  for  impairment  testing.  Adoption is required  for
     fiscal years  beginning  after December 15, 2001.  Based upon  management's
     preliminary analysis, the Company does not expect any material implications
     for the Company's financial statements.

4.   Taxation

     The Company is subject to PRC business tax at the applicable  effective tax
     rate (5% for both 2001 and 2000) for income derived from services rendered.

     The Company  enjoyed  profits tax  exemptions for two years from 1997 which
     was the first  adjusted-for-tax  profitable year and a 50% reduction on the
     standard tax rate of 15% for the three consecutive years in accordance with
     provincial and national regulations on certain industries. In addition, the
     income  earned from  providing  high-technology  service by the Company has
     been  deemed  business  tax  exempt  by the PRC.  This is  determined  on a
     project-by-project basis.

                                      -17-
<PAGE>

4.   Taxation (Continued)

     It is management's intention to reinvest all the income attributable to the
     Company  as  earned  by  its   operations,   outside  the  United   States.
     Accordingly,  no United States corporate income taxes have been provided in
     these financial statements.

     Under the current law of the British  Virgin  Islands,  any  dividends  the
     Company may  distribute  in the future,  and capital gains arising from the
     Company's  investments  are not subject to income tax in the British Virgin
     Islands.


5.   Fixed Assets
<TABLE>

                                                     2000           2001            2001
                                                      Rmb            Rmb             US$
                                                  ------------   -----------    -------------
        <S>                                    <C>             <C>            <C>

         Cost
             Land lease rights                      211,225         211,225    $      25,449
             Leasehold improvements                 330,865         564,665           68,032
             Furniture and office equipment         683,411         709,009           85,423
             Automobiles                            662,173       1,045,126          125,919
             Computer equipment                   2,075,105       2,523,670          304,057
                                               ------------   -------------    -------------

                                                  3,962,779       5,053,695          608,880
                                               ------------   -------------    -------------

         Less:  Accumulated Depreciation and
                    Amortization
             Land lease rights                       18,390          21,543            2,596
             Leasehold improvements                  21,396         280,417           33,785
             Furniture and fixtures                 286,184         444,715           53,580
             Automobiles                             95,800         514,687           62,011
             Computer equipment                     611,033       1,360,005          163,856
                                               ------------   -------------    -------------

                                                  1,032,803       2,621,367          315,828
                                               ------------   -------------    -------------

         Net book value                           2,929,976       2,432,328    $     293,052
</TABLE>


     The land lease rights are held in the PRC for 67 years from March 1, 1995.

                                      -18-

<PAGE>


6.   Costs and Estimated Earnings on Uncompleted Contracts
<TABLE>

                                                                 2000         2001            2001
                                                                  Rmb          Rmb             US$
                                                             -------------  -----------    ---------
       <S>                                                  <C>             <C>             <C>    <C>    <C>    <C>


         Costs incurred on uncompleted contracts                   676,313            -    $        -
         Estimated earnings                                        710,291            -             -
                                                             -------------   ----------    ----------

                                                                 1,386,604            -             -

         Less billings to date                                  (1,236,550)           -             -
                                                             -------------   ----------    ----------

                                                                   150,054            -    $        -

         Included  in  the  accompanying  balance  sheets
         under  the  following captions:
             Costs and estimated earnings in
                excess of billings on uncompleted
                contracts                                          207,944            -    $        -
             Billings in excess of costs and
                estimated earnings on uncompleted
                contracts                                          (57,890)           -             -
                                                             -------------   ----------    ----------

                                                                   150,054            -    $        -
                                                             =============   ==========    ==========
</TABLE>

7.       Intangibles

         Intangible assets consist of the following:
<TABLE>

                                                       2000             2001            2001
                                                        Rmb              Rmb             US$
                                                   -------------   -------------    -------------
        <S>                                        <C>             <C>              <C>

         Customer list                                         -         859,651    $     103,572
         Acquired software                                     -         761,000           91,687
                                                   -------------   -------------    -------------

                                                               -       1,620,651          195,259

         Less accumulated amortization                         -         112,545           13,559
                                                   -------------   -------------    -------------

                                                               -       1,508,106    $     181,700

</TABLE>
                                      -19-
<PAGE>


8.       Short-Term Borrowings - Bank

         As of December  31,  2000,  the Company was  obligated  under a line of
         credit with Shenzhen  Commercial  Bank for Rmb  16,000,000.  Borrowings
         under this line of credit  bear  interest  at 5.36% and are  secured by
         3,193,660  shares of stock in the Company owned by Dr. Hongbing Lan. As
         of December 31, 2000, no additional  borrowings  were available on this
         line of  credit.  The  agreement  expires  on May 29,  2002,  but it is
         management's  expectation  that this  agreement  will be renewed by the
         bank  or  that a  similar  arrangement  with  another  lender  will  be
         concluded.

         During  December of 2001, the Company  obtained  another line of credit
         with Shenzhen  Commercial  Bank for Rmb 8,000,000 for one month bearing
         interest  at 6.138%  per  annum.  The  borrowing  was fully  settled in
         January 2002.


9.       Warrants

         In  connection  with the  Exchange  agreement  between  Natural Way and
         World,  Natural Way issued stock warrants to Pacific Winner Development
         Limited (Pacific), owned by Dr. Hongbing Lan, and World Concept Holding
         Limited (World Holding),  an unrelated third party, for the purchase of
         shares of common stock in the Company for the following terms:


                              Warrants         Exercise
                               Granted           Price               Term
                           --------------   -------------   --------------------

         Pacific              2,400,000       $3.00           1/31/00 - 1/30/01
                              1,600,000       $4.00           1/31/01 - 1/31/02
                              1,600,000       $5.00           1/31/02 - 1/31/03

         World Holding          600,000       $3.00           1/31/00 - 1/31/01
                                400,000       $4.00           1/31/01 - 1/31/02
                                400,000       $5.00           1/31/02 - 1/31/03


                                      -20-
<PAGE>


10.      Related Party Balances and Transactions
<TABLE>

         Name of related party                             Existing relationship with the Company
         -----------------------------------         -----------------------------------------------
          <S>                                          <C>

         National Communication Centre                  Stockholder

         Hong Yu Lan                                    Officer and brother of Dr. Hongbing Lan

         Dr. Hongbing Lan                               Director and stockholder

         Leasci Technologies Co., Ltd. (Leasci)         Stockholder of a subsidiary

         Sitech Holding (Hainan)
           Company Limited                              Common ownership - Dr. Hongbing Lan

         Name of parties and                                2000             2001            2001
           nature of amounts (due to) due from               Rmb              Rmb             US$
           -----------------------------------          -------------   -------------    -------------
        <S>                                             <C>              <C>              <C>

         National Communication Centre -
           Cash advance                                             -   (     33,271)    $(     4,009)
                                                        =============   ============     ============

         Dr. Hongbing Lan - Travel and trip
           expenses paid on behalf of the
           Company and cash advances                      (2,316,408)     (4,163,531)    $(   501,630)
                                                        =============   =============    =============

         Leasci - Cash advance                                      -   (    200,000)    $(    24,096)
                                                        =============   =============    =============

         Lan Hong Yu - Cash advance                                 -   (    157,118)    $(    18,930)
                                                        =============   =============    =============
</TABLE>

         The  balance  with  Leasci  is  secured,  interest  bearing  at 3%  and
repayable on demand.

         The balances with Dr. Hongbing Lan, National  Communication  Centre and
         Hong Yu Lan are unsecured, interest-free and repayable on demand.



                                      -21-
<PAGE>

11.      Operating Leases

         The  Company  has  entered  into  leases for its office and  production
         facilities.  The leases are with unrelated third parties.  Total rental
         expense for all operating leases,  except those with terms of one month
         or less that were not renewed, were Rmb 1,231,779 and Rmb 1,032,545 for
         2001 and 2000, respectively.

         The following is a schedule by year of future minimum  rental  payments
         required  under  operating   leases  that  have  initial  or  remaining
         noncancelable  lease terms in excess of one year,  as of  December  31,
         2001:

                             Year ending December 31:
                                                     2002            924,279
                                                     2003            676,485
                                                     2004            446,188
                                                     2005            161,040
                                                                     -------

                           Total minimum payments required         2,207,992


12.      Reserve Funds

         In accordance  with the PRC  Companies  Law, the Company is required to
         transfer a percentage  of its profit after  taxation,  as determined in
         accordance  with  PRC  accounting  standards  and  regulations,  to the
         surplus  reserve funds.  The surplus reserve funds are comprised of the
         statutory surplus reserve fund and the public welfare fund.  Subject to
         certain  restrictions  set out in the PRC Companies  Law, the statutory
         surplus  reserve fund may be distributed to stockholders in the form of
         share bonus issues and/or cash  dividends.  The public  welfare fund is
         nondistributable  and must be used for  capital  expenditures  on staff
         welfare facilities.


13.      Major Customers

         For the year ended  December  31,  2001,  sales to two major  customers
         amounted to more than 10% of total  sales.  The amount of revenue  from
         each customer was Rmb 4,744,383 and Rmb 2,869,129.

         For the  year  ended  December  31,  2000,  sales  to a major  customer
         amounted to more than 10% of total  sales.  The amount of revenue  from
         the  customer  was Rmb  5,985,185.  The  receivable  balances for major
         customers as of December 31, 2001 and 2000 were Rmb  2,638,000  and Rmb
         0, respectively.


                                      -22-
<PAGE>

14.      Operating Risks

         (a)   Country risk

               As substantially  all of the Company's  activities were conducted
               in the PRC, the Company is subject to special  considerations and
               significant   risks  not  typically   associated  with  companies
               operating  in North  America and Western  Europe.  These  include
               risks associated with, among others, the political,  economic and
               legal environments and foreign currency  exchange.  The Company's
               results may be adversely affected by changes in the political and
               social  conditions  in the PRC,  and by changes  in  governmental
               policies  with  respect  to laws  and  regulations,  inflationary
               measures,  currency  conversion and remittance  abroad, and rates
               and methods of  taxation,  among other  things.  In  addition,  a
               significant   portion  of  the   Company's   prior   revenue  was
               denominated in Rmb, which must be converted into other currencies
               before  remittance  outside the PRC.  Both the  conversion of Rmb
               into foreign  currencies and the remittance of foreign currencies
               abroad require approvals of the PRC government.

         (b)   On January 1, 1994, the PRC  government  introduced a single rate
               of exchange as quoted  daily by the  Peoples'  Bank of China (the
               Unified Exchange Rate).

               The  quotation  of  the  exchange   rates  does  not  imply  free
               convertibility  of Rmb into Hong Kong  dollars  or other  foreign
               currencies.  All foreign exchange  transactions  continue to take
               place either  through the  Peoples'  Bank of China or other banks
               authorized  to buy and sell  foreign  currencies  at the exchange
               rates quoted by the Peoples'  Bank of China.  Approval of foreign
               currency  payments  by  the  Peoples'  Bank  of  China  or  other
               institutions  requires  submitting  a  payment  application  form
               together with suppliers' invoices,  shipping documents and signed
               contracts.


                                      -22-
<PAGE>

15.      Supplemental Disclosures of Cash Flow Information

                                           2000         2001           2001
                                            Rmb          Rmb            US$
                                         ---------    -----------   -----------

             Cash payments of taxes        599,749              -   $         -
             Cash payments of interest     497,640      1,072,400       129,205

         On October  14,  2001,  Shenzhen  acquired a 70%  interest in Dalian in
         exchange for 307,000 shares of the Company.  As a result, the following
         noncash transaction was recorded:

                                                                      Rmb
                                                              -----------------

                            Cash                                    54,612
                            Accounts receivable                        300
                            Deposits and other                      61,120
                            Advances to employees                    1,395
                            Product development costs               28,799
                            Fixed assets                           285,058
                            Intangibles                          1,620,651
                            Accrued expenses                      (546,500)
                            Due to related party                  (200,000)
                            Minority interest                       94,565
                            Common stock                            (2,548)
                            Additional paid-in capital          (1,397,452)
                                                              -------------

                            Total                                        -

16.      Reclassification

         For    comparability,    the   2000   financial    statements   reflect
         reclassifications   where  appropriate  to  conform  to  the  financial
         statement presentation used in 2001.