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

                                   FORM 10-KSB
[X]     Annual Report Pursuant To Section 13 Or 15(D) Of The Securities Exchange
        Act  Of  1934;  For  The  Fiscal  Year  Ended:  June  30,  2001

                                       Or

[ ]     Transition  Report  Pursuant To Section 13 Or 15(D) Of The Exchange Act
        Of  1934

                        Commission File Number: 000-25496
                            HYPERDYNAMICS CORPORATION
             (Exact name of registrant as specified in its charter)

                   Delaware                        87-0400335
       (State  or  other  jurisdiction           (IRS  Employer
     of  incorporation  or  organization)      Identification  No.)

                           9700 Bissonnet, Suite 1700
                              Houston, Texas 77036
          (Address of principal executive offices, including zip code)

                                 (713) 353-9400
              (Registrant's telephone number, including area code)

Securities  registered  under  Section  12(b)  of  the  Exchange  Act:

                                              Name  of  Each  Exchange
     Title  of  Each  Class                   on  which  Registered
     ----------------------                   ---------------------
             N/A                                       N/A

Securities  registered  pursuant  to  12(g)  of  the  Exchange  Act:

                               Title of Each Class
                          Common Stock, $.001 par value

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

Indicate  by  check mark if disclosure of delinquent filers pursuant to Item 405
of  Regulation  S-K  is  not contained herein, 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.  [X]

Issuer's  revenues for the year ended June 30, 2001 were $426,601. The aggregate
market  value  of  Common  Stock  held  by  non-affiliates  of the registrant at
September  28,  2001,  based upon the last reported sales prices on the OTCBB of
$0.90      was  $14,081,349.  As  of  September  21, 2001, there were 15,645,944
Shares  of  Common  Stock  outstanding.


                                        1
<PAGE>
TABLE  OF  CONTENTS

PART  I

Item  1    Business                                                            3
Item  2    Properties                                                          8
Item  3    Legal  Proceedings                                                  9
Item  4    Submission  of  Matters  to  a  Vote  of  Security  Holders         9

PART  II

Item 5     Market for Registrant's Common Equity and Related Stockholder
           Matters                                                            10
Item  6    Management's Discussion and Analysis of Financial Condition and
           Results  of  Operations                                            13
Item  7    Financial  Statements                                              17
Item  8    Changes in and Disagreements With Accountants in Accounting and
           Financial  Disclosure                                              17

PART  III

Item  9    Directors, Executive Officers, Promoters and Control Persons;
           Compliance with  Section  16(a)  of  The  Exchange  Act            18
Item  10   Executive  Compensation                                            20
Item  11   Security Ownership of Certain Beneficial Owners and Management     22
Item  12   Certain  Relationships  and  Related  Transactions                 24
Item  13   Exhibits  and  Reports  on  Form  8-K                              25


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<PAGE>
PART  I

Item  1     BUSINESS

Transition  and  move  to  first  Integrated  Technology  Center  (ITC)

We  have made a transformation to our new business model this year. The shifting
of  our revenue base this year from a project orientation to a recurring revenue
based  service  model has been dramatic and difficult. Management made difficult
decisions  during  the  year  to  stay  focused  on the move without cutting its
strategic  workforce  dramatically  even though revenues were significantly down
from  the  previous  year.

We experienced serious problems in the transition regarding the time it took for
our  mission  critical  fiber  to  be  installed at the new facility. Hence, the
Company  had  expected  to  move  into the new facility originally no later than
December  2000. Due to the delays we were not able to move into the new facility
until March and effectively begin operations in April 2001. As of September 2001
it  is  safe to say that we are now settled into the new facility and are in the
process  of  ramping  up  our  revenues.

Our new facility is located within the highly secure Westwood Technology Center,
which was designed around a small but scalable data center that contains an AT&T
dedicated  entrance facility switch at its core with redundant fiber. This point
of  presence  (POP) gives us significant flexibility for supporting a wide range
of  integrated  voice, video, and data applications and supports highly scalable
bandwidth  requirements. Other basic features of our first Integrated Technology
Center (ITC) include significant security features, gas fire suppression, online
UPS  system,  and  a  backup  generator.

Our  ITC withstood of negative effects from the City of Houston's 500-year flood
in  July with no downtime.  After the attacks on the World Trade Center, our ITC
provided  an  unbelievably  clear  illustration  how  to  be prepared to provide
redundancy.  The  facility is indeed our reflection of our new business model to
provide  integrated technology services based on a strong and flexible technical
foundation.

Emergence  of  the  ITSP  business  model,  a  year  of  transition

During  the  year  we closed our first three-year Hypersource (SM) contract with
Eagle  Wireless  International. Hypersource is our brand and service mark of our
bundled  IT  services. This contract specifies our duties to provide the mission
critical  Integrated  Technology (IT) services for their Great Plains Accounting
System.  The  contract  provides  a  base  amount  for  all the related services
including hosting their mission critical applications on servers within our ITC.
We  also  provide  access to the application servers via a dedicated T-1 circuit
between  their  home  office  and  our  ITC. Internet bandwidth is also provided
across  this same dedicated circuit. Additionally, as Eagle requires more users,
our flexible Hypersource contract allows them to grow to 500 users and it is our
responsibility  to  manage  all the IT requirements for that growth in user base
including  upgrades  to  their server hardware as required. This contract is the
prototype  for  Hypersource  services.  It  is  a clear reflection of how we can
successfully  provide  a  leveraged  cost/benefit  to  our  customers.

Other  Hypersource contracts to date include our initial agreements with Premier
Media Group (PMG) and MaxVu, Inc. Both of these agreements include hosting their
mission  critical  applications  inside  our  ITC.


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<PAGE>
Hyperdynamics is refining its Hypersource service offering and the way we market
and  sell  this  service. We have a growing base of long sales cycle Hypersource
deals  in  our  sales  queue  and  expect to advance our recurring revenue based
contracts  substantially  this  coming  year. While this part of our revenues is
ramping  up, we have also made progress towards vertically oriented ASP services
and  Special  IT  Services  as discussed below. These strategies will help us to
increase revenues much faster and cash flow our operations in the coming months.

Acquisition  of  SCS  Corporation

The  Company implemented its acquisition strategy on May 31, 2001 by closing its
acquisition  of  SCS  Corporation. Management believes now that this acquisition
was a critical and strategic transaction that has significantly strengthened us,
giving  us  substantial  vertical  industry expertise in the area of Geophysical
Data  Management.  This  industry expertise coupled with the exclusive rights to
the  ONYX  II  tape  to  DVD-RAM  conversion software developed over five years,
immediately  gives  us  diversification  and competitive advantages. Neil Moore,
President  for  SCS  Corporation  and  Robert Bearnth, Vice President, have many
years  of  experience in the Oil and Gas Exploration industry. Robert Bearnth is
both  a  Geologist  and  Geophysicist  and  has  worked  for major oil companies
including  Exxon  and  Saudi-Aramco.

The  acquisition  of  SCS  Corporation  leverages  our investment in our ITC and
infrastructure.   The  synergy  between  our  companies has already helped us to
have our first major conversion contract signed. The project includes conversion
of approximately 70,000 tapes of geophysical data and film scanning, cataloguing
of  data, and delivery of DVD-RAM disks as well as transmission of the data to a
foreign  country  over  our  telecommunications  infrastructure. Without the ITC
infrastructure,  SCS  would  not  have  been  so  likely to close this contract.

Current  Focus  Direction  of  Business  Plan

Over  the last five years, the technology industry has proven out and tested all
manner  of  service  delivery  models.  During that time, the client has assumed
varying  levels  of  risk,  responsibility,  and management of the IT processes.
Three  models  have  risen  to  the  top as the most cost-effective, performance
enhancing,  and  results-focused:

-     The  outsource  of  Information  Technology  services  organization,
-     The  Internet  Service  Provider  (ISP)
-     And  the  Application  Service  Provider  (ASP).

HyperDynamics  combines  all  three  delivery  models  into  a  single,
customer-directed  delivery  model  that  we  named  - the Integrated Technology
Service Provider or ITSP(SM).  By bringing together the power of the ITSP(SM) to
the  emerging  growth and mid-market clients, HyperDynamics allows its customers
yet  another  avenue  of  competitive  advantage  in their unique market places.

In years past larger companies have had the luxury of having extensive resources
to  implement and manage their information technology budgets. They have learned
that  the  more  efficiently they balance their IT investment with benefits, the
more  they  can earn as a result of lowered expenses and increased productivity.
As  a rule, the smaller an organization becomes the less likely it is to be able
to  take  cost  effective advantage of the latest and best technology. Company's
like  ours,  using  the  newest system management technology help remove the gap
between  small  and large organizations. By acquiring technology-based companies
in  the primary defined areas of information technology, we provide a total cost
effective  and  competent  service  acting as the IT department. As a result our
customers  derive the benefits from highly trained professionals in the IT field
and  only  pay  for  the  actual  amount  they  need.


                                        4
<PAGE>
          Mission  Statement

          To  be  the  premier integrated technology service provider (ITSP(SM))
          that  facilitates  its  client's  ability to maximize their profitable
          business.

Hyperdynamics  has  a  mission  to  be  a premier integrated technology services
provider  (ITSP(SM)). Through its initial strategies, Hyperdynamics has begun to
build its core IT knowledge base and infrastructure capability to position it to
be  a leader in the ITSP industry of the future. Our primary goal is to position
ourselves  to  capture our share of what we perceive to be the largest potential
recurring  revenue  base  in  history.

          Hyperdynamics  has  refined  and  continues  to  develop  the  best
          cost/beneficial  Integrated  Technology  (IT)  services.  To  maintain
          flexibility  the  Company has grouped its approach to IT services into
          four  groupings.

          IT  HOSTING  services  are  provided  to  handle  a company's complete
          end-to-end  information technology and telecommunications requirements
          and  literally  become  our  client's  Integrated  Technology  (IT)
          department  by  contractually  providing  our  bundled Hypersource(SM)
          services.  The  low end of IT hosting spectrum has become known in our
          industry  as simply managed services. We are continuing to develop our
          IT  hosting  infrastructure  to  allow us to professionally manage our
          client's  centralized servers in a true data center environment. Based
          on  our  core IT hosting strategy, we offer much more than a commodity
          driven  colocation  service.  The  high quality of our professional IT
          management  services  provided  is  paramount  to  bringing  true
          cost/benefit  and  financial  leverage  to  our  customers.  Thus,
          Hyperdynamics  is  offering  to  become  small  businesses complete IT
          departments or segments of the IT department for larger organizations.
          These  turn-key  services  generally  take  significantly longer sales
          cycles  at  this  time.  As  our  customers continue to go through the
          educational process of truly learning the benefits for this integrated
          service,  this sales cycle will shorten considerably. As of right now,
          we  approach  every  IT  Hosting  opportunity on a custom basis. As we
          continue  to  standardize our Hypersource offering, customers will see
          and  understand  benefits  much more clearly and quickly in the months
          and  years  to  come.  At  some  point  in  the not to distant future,
          Hyperdynamics  believes  that  the  standard approach for companies to
          procure their IT services will be to purchase Hypersource(SM) services
          from  their  Integrated  Technology  Service  Provider  (ITSP(SM)).

          APPLICATION SERVICE PROVIDER (ASP) services are provided on a vertical
          industry  and/or  application  specific  basis.  We  believe  that
          development  as  a  true  ASP  with vertical industry expertise brings
          extensive  value  to  our  customers.  IDC  (a  World Class Technology
          Research  Firm - see www.idc.com) released findings recently published
          a  study  on  October 2, 2001 where they announced that "Utilizing the
          services  of  an ASP positively impacts an organization's bottom line,
          according  to  the  just-released  findings  of  IDC's  groundbreaking
          study,"The  Financial  Impact  of Application Service Providers". This
          study  reveals  that  ASP  implementations  tend  to  be an enormously
          beneficial  investment  with  an  average  yield  of  404%."

               In  this  report, their Key Findings as published by IDC on their
               website  at www.idc.com/services/press/PR/SV100201pr.stm, were as
               follows:

                    "
                    -    ASP  implementations generated an average five-year ROI
                         of  404%,  and  almost half of the organizations in the
                         study  had  payback  within  six  months.
                    -    44%  of  the  organizations  included  in  the  study
                         experienced  an  ROI  greater  than  100%,  while  12%
                         reported  ROI  returns  of  over  1,000%.


                                        5
<PAGE>
                    -    The  average payback for an ASP outsourced solution was
                         1.33  years  on  an  average  total  investment of $4.2
                         million. The average initial investment was $399,000. "

          We are picking specific applications that we have significant industry
          expertise  with  and  can  support  better than other companies in our
          field.  We  choose  not  to  be  an ASP for an application unless that
          application  fits  our  general  business offering or that application
          contributes  to  a  vertical  niche  expertise.  Thus  we  seek  to
          differentiate  ourselves from other IT service companies who do little
          more  than  simply  provide  applications.  For example we support the
          Great  Plains  Software  platform  on  the  Microsoft  SQLserver as an
          eEnterprise partner. We have developed specific technical expertise to
          support  this  broad-based  business  application  platform using thin
          client  technology.  We  are  also  setting  up  to  be  an  ASP for a
          geophysical data-attribute interpretation-enhancement software program
          through  one of SCS Corporation's strategic partners, Prime Geoscience
          Corporation  (PGC).  We  have  recently  announced  that  we  have  an
          agreement  with  PGC  to  host their PrimeView(TM) application. We are
          planning  to  build  an extensive processing server cluster for use by
          oil  and  gas  exploration firms to use this application and others so
          they  can  buy  time  from  Hyperdynamics  to  perform  their  seismic
          interpretation  processes.

          SPECIALIZED  IT  SERVICES  are  provided  specifically  addressing the
          evolution  of  our clients IT systems to support the new ways of doing
          business  such  as  business  to  business  and  business  to consumer
          e-Commerce  and  Internet  marketing.  This  area of service primarily
          includes  Business Migration Services, Disaster Recovery Services, and
          Data  Management  Services.  Hyperdynamics  Corporation  designs  and
          implement transaction based mission critical eCommerce systems for its
          clients  as well as complete enterprise level business systems such as
          Great  Plains  eEnterprise  platform.  On  the eEnterprise platform we
          design  complete  systems  and  help  companies  migrate  their entire
          business  to  this  enterprise  platform.

          We  also offer companies, off-site backup for their data and customize
          disaster  recovery  plans so that companies minimize downtime if their
          primary  source  goes  offline.

          With  the  acquisition  of  SCS  Corporation, we have entered into the
          vertical  market  for Geophysical Data Management. We have now added a
          new  specialized  oil  and gas exploration industry service to convert
          geophysical  data  off of old and deteriorating tape media over to new
          DVD-RAM.  With  our  proprietary  ONYXII  conversion  software, we are
          increasingly  performing  significant  data  conversion  projects.  We
          recently announced the completion of a project for a major oil company
          in  which  we  converted  846 9-track tapes over to less than 1/2 of a
          DVD-RAM disk. Other projects for this service are lining up, and based
          on  the  significant  demand  to  convert  this  valuable  data  off
          approximately  2  billion  tapes  worldwide, we expect substantial and
          rapid  growth  in  this  area  of  services.

          CONVENTIONAL  IT  services  are provided on a highly flexible basis to
          help  companies  with  existing  IT  infrastructures  to plan, design,
          implement,  and  manage  their  own  telecommunications,  wide  area
          networking,  server  and  workstation  systems, operating systems, and
          integrated  software applications. Our clients dictate to which degree
          we  get  involved in any one or all of these defined areas of IT. This
          approach to IT services will ultimately be phased out as our IThosting
          Hypersource  services  continue  to  roll  out.


                                        6
<PAGE>
Our  Central  Message  to  Customers

HyperDynamics enables you for tomorrow  today.  We do this through comprehensive
IT  services  and applications hosting that maximize your business productivity.
We  deliver  best  of  breed  technology  and  rapid deployment methodologies to
empower  your  business.  At  HyperDynamics,  we're  focused on today so you can
focus  on  tomorrow.

The  State  of  Affairs  in  the  IT  services  industry

It  has been a tough year for the IT services industry, especially for the large
ASP  business  models.  The  stock market fundamentals have reflected a dramatic
shift  towards  companies in this service industry that have learned how to cash
flow  their operations or are at least showing significant progress towards cash
flowing  their  operations. Also, there must now be a reasonable management plan
for  beginning in some reasonable time frame to turn a profit, while showing the
ability  to  do  so  on  an  ongoing  basis.  Consequentially,  large ASP's with
extensive  data  center  assets  have  fallen  out  of  grace with the financial
markets.  An  example  of  this  is  Exodus  Communications  (NASDAQ:EXDS).

We  believe  the  problem  lies  in an approach of trying to sell infrastructure
basically  as  a  commodity without wisely bundled IT services that are marketed
and  proven  to  be  valuable  to companies. The understanding of the typical IT
services  customer  for  the  cost/benefit  value of integrated services such as
operating  system  administration,  application  administration,  and  network
administration  is  lacking clarity. What is actually perceived as a valuable IT
service  that  customers  are  willing to buy is changing gradually based on the
continued  advancement of technology and the educational process of learning the
benefits  of obtaining turn-key integrated services. Ultimately, many integrated
services  that are charged as a line item billing in today's market will wind up
as a standard feature in the bundled service offerings of the future. The larger
IT  companies  that  cater  to large fortune 500 type companies are usually over
kill  in  both  data  center  feature  sets and the relative cost. Most small to
medium  sized companies would not be willing to pay the premium they must charge
to  be  in  their  data  center.  Small  companies  don't  need three (3) backup
generators  for  example.  Having one good one would make sense. There are still
companies  that  just  don't  get  the  benefit  of one generator, but they will
ultimately  conform or run the true risk of losing their business at some point.
Thus,  it  is  truly an evolving educational process to market the ITSP business
model  to companies over more conventional ways that they have obtained their IT
services  in  the  past.

In  the  most  recent  tragedy of the World Trade Center attacks, the concept of
redundant  offsite  backups  is  being hammered home to business owners. This is
part  of  the  educational  process necessary to have companies move to the ITSP
model  as  a  standard  approach.  Other  requirements  to  successfully  shift
businesses  away from internal IT departments and higher costs will be the smart
bundling  of  cost  effective  services  such  as  Hyperdynamics Hypersource(SM)
services.

Employees  and  Independent  Contractors

The  Company  has  sixteen  full  time  employees.  The Company uses independent
contractors  to  minimize  fixed  overhead  prior  to  the  ramp-up of its first
Integrated Technology Center (ITC). While utilization of independent contractors
reduces  the Company's gross profits in the interim, management believes that it
ultimately  minimizes  its  risk  during  its  transition  to the new IT hosting
business  model.  Direct  employment is expected to increase gradually, matching
revenues  with  expenditures.  No  employees  are represented by a union and the
Company  believes  that  its  labor  relations  are  good.


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<PAGE>
Alliance  Partnerships,  Key  Vendors  and  Technical  Certifications

In  the  past  three  years  Hyperdynamics has positioned itself to successfully
shift  its  primary  revenue  base more clearly to IT services while maintaining
technical  expertise  to  continue selling hardware and software components on a
convention  basis.  To  support  this  strategy  we  have enhanced or maintained
certifications  with  Microsoft  as  a Microsoft Solution Provider, Great Plains
Software  as  eEnterprise  reseller,  Intel  Premier  Partner,  Citrix  Systems
Certified reseller, 3Com Network Systems Integrator, Xerox Peripherals reseller,
Lightspeed Systems Reseller and Alliance Partner, MaxVu Streaming video alliance
partner, Calsoft Alliance Partner, and Extreme Networks Premier VAR just to name
a  few.  With  its  relationship  with  Intel, the Company has the capability to
provide  custom  hardware  solutions  along  with  its IT hosting services. This
capability  provides  a  tighter  integration  for  its  services.

In  conjunction  for  its  plans  to  establish  its  first  ITC at the Westwood
Technology  Center  as  discussed  below,  the  Company  negotiated  with  major
International  Exchange  Carriers to decide on its key Internet backbone partner
for  its  redundant and scalable bandwidth requirements. Based on the ability to
deliver  a  redundant  fiber  based  On-Net solution and their co-marketing plan
presented  as  the  "HyperGrowth"  plan,  AT&T  has  become that partner.  Other
carriers  considered either did not have a strong co-marketing plan or could not
deliver  the  requirements  in  the  time  specified. Management feels that this
accomplishment  is  another  milestone  that has positioned the Company for true
"HyperGrowth",  as  AT&T  puts  it.

Item  2     PROPERTIES

Last year the Company signed a 10-year lease with AGB Westwood, LTD to lease its
new  facilities  at  the  Westwood  Technology  Center,  a  540,000  square foot
development  in  Houston,  Texas. After tremendous design efforts were put forth
working  with  Moody  Rambin Interests, Lamereaux and Associates-Architects, Day
Brown  Rice  Engineering,  and  Smith  Commercial  Construction,  build-out  for
Hyperdynamics  first  Integrated  Technology Center (ITC) initiated on September
12,  2000.  AGB  Westwood,  LTD  is  one  of the largest Real Estate development
partnerships  that  focus  on picking selected properties around the country and
retrofitting  them  into  technology  centers.  Basic features expected upon the
completion  of  Westwood  Technology  Center  are  redundant  power sources from
Reliant  Energy  with  an  Automatic Transfer Over (ATO) switching capability in
case  of  a  power  outage.  Additionally,  power  available  to the facility is
expected  to  hit  100  watts  per square foot so as to support rapid growth for
companies  like  Hyperdynamics.

The  build-out  by  Smith Commercial Contracting was completed in December 2000.
After  undue  delays  in  having  our fiber installed, finally in March 2001, we
began  a  major  transition  in our business model. This transition included the
physical  move from the old office, where the Company leased approximately 3,000
sq. ft. of commercial office space, to its new location of 17,807 sq. ft. of net
rentable  area  (NRA).  We  built  our  first Integrated Technology Center (ITC)
around  a  tier-1  data center with an AT&T point of presence located physically
inside  it.  With  this new facility, the Company now has the ability to provide
class  A  bundled IT services that include hosting mission critical applications
in  its  data  center  and  can  support  high  level  redundancy with extensive
bandwidth  scalability.

Under the lease the company leased approximately 17,807 square feet NRA of space
to  be  used initially for corporate offices, data center and integration center
operations  as  well as marketing and sales for its new Hypersource(SM) services
model.  We  also  have  begun  to establish our technical training area and have
several  revenue  based  training  sessions  scheduled  in  the  near future. In
addition to this space we also have a right of first offer on an adjacent 15,000
sq.  ft.


                                        8
<PAGE>
In  the  new  facility,  the  data center component now provides the guts of the
operations.  It  is  the  focal point for AT&T's redundant fiber co-location and
has  features  such  as FM200 fire suppression, N+1 redundant power with battery
backups,  backup  electric generator, redundant air conditioning, 24 inch raised
flooring,  leak  detection,  and  security  system.

The  more  costly data center component part of our build-out was designed to be
as  modular as possible so we can more easily match up capital investment outlay
with  the  closure  of  new  Hypersource  service  revenue  contracts.

Hyperdynamics  paid  the  first  and last months rent of the 60-month lease upon
signing.  Upon commencement of the lease the Company will receive a 6 month free
rent  period  and then on the 7th month after commencement begin paying  $20,774
per  month  or  $14  per square foot. Should the Company not elect to cancel the
lease,  as  is  its  right,  beginning the 55th month of the lease the rate will
change  to  $24,114  per  month  or  $16.25  per  square  foot.

Item  3     LEGAL  PROCEEDINGS

Through  arbitration  proceedings  the  dispute  between Charterbridge Financial
Group,  Inc.  and us as reported in last years report was settled by the Company
issuing  37,500  shares  of  restricted  stock  on  December  1,  2000.

In  June  2000,  we were named as a defendant in a lawsuit styled Cherie Dunn v.
Hyperdynamics  Corporation,  Cause No. 2000-27220, 80th Judicial District Court,
Harris  County, Texas. The plaintiff, Cherie Dunn, claimed that she was entitled
to  receive  options  to  purchase  up  to  55,000  shares  of our common stock,
exercisable  at  $1.00 per share in connection with an employment agreement with
us.  The  parties  are  in  settlement  discussions.

We  were  named as a defendant in a lawsuit styled Dixon Financial Services, LTD
v.  Fidelity  Transfer  Company  et  al,  Cause  NO.  2001-06263, 215th Judicial
District  Court,  Harris  County,  Texas.

The  plaintiff  claims  $3,000,000 in damages related to interference with stock
transfers.

We  intend  to vigorously defend ourselves. The lawsuit is in discovery. Counsel
believes that the Company has done everything proper and prudent in this matter.

On  April  9, 2001, we were named as a defendant in a lawsuit styled Wellington,
LLC  vs.  Hyperdynamics  Corporation et al. Civil Action# 18811-NC, The Court of
Chancery  of  Delaware.

The  Plaintiff claims that we did not carry out conversion of series A preferred
stock  to  common  stock.

We  intend  to  vigorously  defend  ourselves  in  this  matter.


Item  4     SUBMISSION  OF  MATTERS  TO  A  VOTE  OF  SECURITY  HOLDERS

None


                                        9
<PAGE>
PART  II

Item 5     MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Price  Range  Of  Common  Stock

The  Company's  Common Stock is traded on the OTCBB under the symbol "HYPD." The
following  table  sets forth the quarterly high and low bid prices per share for
the  Common Stock, as reported by the OTCBB. The bid prices reflect inter-dealer
quotations,  do  not  include  retail markup, markdown, or commission and do not
necessarily  reflect  actual  transactions.

                    High Bid     Low Bid
FISCAL  2000
  First  Quarter      1.1250     0.6800
  Second  Quarter     5.0625     0.5000
  Third  Quarter      7.7500     3.6250
  Fourth  Quarter     4.7500     1.1875

FISCAL  2001
  First  Quarter      3.1875     0.8125
  Second  Quarter     1.9375     0.6250
  Third  Quarter      1.0000     0.4375
  Fourth  Quarter     0.8800     0.2500

On  September  21,  2001,  the  last bid for the Common Stock as reported by the
OTCBB was $0.74 per share. On September 21, 2001, there were 148 stockholders of
record  of  the  Common  Stock.

The  Company has not paid, and the Company does not currently intend to pay cash
dividends  on  its common stock in the foreseeable future. The current policy of
the  Company's  Board of Directors is to retain all earnings, if any, to provide
funds  for operation and expansion of the Company's business. The declaration of
dividends,  if any, will be subject to the discretion of the Board of Directors,
which  may  consider  such  factors  as  the  Company's  results  of operations,
financial  condition,  capital  needs  and  acquisition  strategy, among others.

Recent  Sales  of Unregistered Securities since July 2000 through September 2001

The  following  transactions  were  effected  by  the  Company  in reliance upon
exemptions  from  registration  under the Securities Act of 1933 as amended (the
"Act")  as  provided  in  Section  4(2)  thereof.  Each  certificate  issued for
unregistered  securities contained a legend stating that the securities have not
been  registered  under  the  Act  and  setting  forth  the  restrictions on the
transferability and the sale of the securities.  No underwriter participated in,
nor did the Company pay any commissions or fees to any underwriter in connection
with  any  of  these  transactions.  None  of the transactions involved a public
offering.  The Company believes that each person had knowledge and experience in
financial  and  business  matters, which allowed them to evaluate the merits and
risk  of  the  receipt of these securities of the Company.  The Company believes
that  each person was knowledgeable about the Company's operations and financial
condition.


                                       10
<PAGE>
In August 2000 we issued a total of 75,000 warrants to purchase shares of common
stock  to  the  Money  Circle  for  consulting.  These  warrants are immediately
exercisable  at  an  exercise  price  of $1.50 per share. The expiration date of
these  warrants is August 3, 2001. This was a private placement made in reliance
on  Section  4(2)  of  the  Act.

In  August  2000  we  issued  a  total of 100,000 warrants to purchase shares of
common  stock to Carla Lattinelli for consulting. These warrants are immediately
exercisable  at  an  exercise  price  of $1.50 per share. The expiration date of
these warrants has been extended to August 3, 2002. This was a private placement
made  in  reliance  on  Section  4(2)  of  the  Act.

In August 2000 we issued a total of 75,000 warrants to purchase shares of common
stock  to  Darren-Anthony  Lumar, Executive Vice President for the Company as an
employment  bonus.  These  warrants  are  immediately exercisable at an exercise
price  of  $1.50  per  share. The expiration date of these warrants is August 2,
2003.  This was a private placement made in reliance on Section 4(2) of the Act.

In  December  2000, 8,000 shares in total of section 144 restricted common stock
were  issued to 9 different employees as an employment bonus. This was a private
placement  made  in  reliance  on  Section  4(2)  of  the  Act.

In  January  2001,  we  issued  a  total of 60,000 options to purchase shares of
common  stock  to  Eagle  Wireless  International, Inc. pursuant to a consulting
agreement.  These options vest 30,000 in January 2002 and 30,000 in January 2003
as  long as the minimum services associated with their Hypersource contract with
the  company  is in full force and effect. The options have an exercise price of
$1.50  per  share. The expiration date of these options is January 1, 2004. This
was  a  private  placement  made  in  reliance  on  Section  4(2)  of  the  Act.

In  March  2001, we issued 100,000 shares of section 144 restricted common stock
pursuant to a Subscription Agreement, to Smith Commercial Contracting, Inc. as a
general  contractor  fee for building our new Integrated Technology Center. This
was  a  private  placement  made  in  reliance  on  Section  4(2)  of  the  Act.

In  July 2001, we issued 62,500 shares of section 144 restricted common stock to
Ben  J.  Smith  pursuant  to a Subscription Agreement for a $25,000 cash capital
contribution.  At  the  same  time  we  also  issued 62,500 warrants to purchase
section  144  common stock 31,250 shares at $1.00 per share and 31,250 shares at
$2.00  per  share. This was a private placement made in reliance on Section 4(2)
of  the  Act.

In  July 2001, we issued 50,000 shares of section 144 restricted common stock to
James  Brown  pursuant  to  a  Subscription Agreement for a $25,000 cash capital
contribution.  At  the  same  time  we  also  issued 50,000 warrants to purchase
section  144  common stock 25,000 shares at $1.00 per share and 25,000 shares at
$2.00  per  share. This was a private placement made in reliance on Section 4(2)
of  the  Act.

In  July 2001, we issued 62,500 shares of section 144 restricted common stock to
David  L.  Lindskog  pursuant  to  a  Subscription  Agreement for a $25,000 cash
capital  contribution.  We  also  issued 62,500 warrants to purchase section 144
common  stock  31,250  shares  at $1.00 per share and 31,250 shares at $2.00 per
share. This was a private placement made in reliance on Section 4(2) of the Act.


                                       11
<PAGE>
In  July  2001,  we  issued  a total of 1,500,000 warrants to purchase shares of
common  stock  to  Robert  J.  Hill, Senior Vice President as additional officer
compensation  incentive.  These  warrants vest 300,000, immediately for services
rendered  as  an  officer  in  the  fiscal  year end June 30, 2001, 400,000 upon
completion  of  employment  through  July  25,  2002, 400,000 upon completion of
employment  through  July  25,  2003,  and  the final 400,000 upon completion of
employment through July 25,2004. The warrants have an exercise price of $.40 per
share.  Any  resulting  shares  from the exercise of the warrants are subject to
strict  selling  provisions.  The  expiration date of these warrants are 3 years
from  vesting.  This was a private placement made in reliance on Section 4(2) of
the  Act.

In  July  2001,  we  issued  a total of 1,500,000 warrants to purchase shares of
common  stock  Harry  James  Briers,  Vice  President  as  additional  officer
compensation  incentive.  These  warrants vest 300,000, immediately for services
rendered  as  an  officer  in  the  fiscal  year end June 30, 2001, 400,000 upon
completion  of  employment  through  July  25,  2002, 400,000 upon completion of
employment  through  July  25,  2003,  and  the final 400,000 upon completion of
employment through July 25,2004. The warrants have an exercise price of $.40 per
share.  Any  resulting  shares  from the exercise of the warrants are subject to
strict  selling  provisions.  The  expiration date of these warrants are 3 years
from  vesting.  This was a private placement made in reliance on Section 4(2) of
the  Act.

In  July  2001,  we  issued  a total of 1,500,000 warrants to purchase shares of
common  stock  Darren-Anthony  Lumar,  Executive  Vice  President  as additional
officer  compensation  incentive.  These  warrants vest 300,000, immediately for
services  rendered  as  an officer in the fiscal year end June 30, 2001, 400,000
upon  completion of employment through July 25, 2002, 400,000 upon completion of
employment  through  July  25,  2003,  and  the final 400,000 upon completion of
employment through July 25,2004. The warrants have an exercise price of $.40 per
share.  Any  resulting  shares  from the exercise of the warrants are subject to
strict  selling  provisions.  The  expiration date of these warrants are 3 years
from  vesting.  This was a private placement made in reliance on Section 4(2) of
the  Act.

In  July  2001,  we  issued  a total of 1,500,000 warrants to purchase shares of
common  stock  Kent  P.  Watts,  President  as  additional  officer compensation
incentive.  These warrants vest 300,000, immediately for services rendered as an
officer  in  the  fiscal  year  end  June  30,  2001, 400,000 upon completion of
employment  through July 25, 2002, 400,000 upon completion of employment through
July  25, 2003, and the final 400,000 upon completion of employment through July
25,2004.  The  warrants  have an exercise price of $.40 per share. Any resulting
shares  from  the  exercise  of  the  warrants  are  subject  to  strict selling
provisions. The expiration date of these warrants are 3 years from vesting. This
was  a  private  placement  made  in  reliance  on  Section  4(2)  of  the  Act.

In  August 2001, we issued 237,500 shares of section 144 restricted common stock
to  David  L.  Lindskog  pursuant to a Subscription Agreement for a $95,000 cash
capital  contribution.  We  also issued 237,500 warrants to purchase section 144
common  stock  118,750 shares at $1.00 per share and 118,750 shares at $2.00 per
share. This was a private placement made in reliance on Section 4(2) of the Act.

In September 2001, we issued 7,538 shares of section 144 restricted common stock
pursuant  to  a  Subscription  Agreement  for services, to Engineered Protection
Systems,  Inc.  as  a partial payment for our data center security system in our
new  Integrated Technology Center installed in February 2001. This was a private
placement  made  in  reliance  on  Section  4(2)  of  the  Act.


                                       12
<PAGE>
Item  6     MANAGEMENT'S  DISCUSSION  AND  ANALYSIS  OF  FINANCIAL CONDITION AND
            RESULTS  OF  OPERATIONS

              CAUTIONARY  STATEMENT ON FORWARD-LOOKING INFORMATION

The  Company  is including the following cautionary statement to make applicable
and  take  advantage  of  the  safe  harbor  provision of the Private Securities
Litigation  Reform Act of 1995 for any forward-looking statements made by, or on
behalf  of,  the  Company.   This  Annual  Report  on  Form  10-KSB  contains
forward-looking  statements.  Forward-looking  statements  include  statements
concerning  plans, objectives, goals, strategies, expectations, future events or
performance  and  underlying  assumptions  and other statements, which are other
than  statements  of  historical facts.  Certain statements contained herein are
forward-looking  statements  and,  accordingly, involve risks and uncertainties,
which  could  cause  actual  results or outcomes to differ materially from those
expressed  in  the  forward-looking  statements.  The  Company's  expectations,
beliefs  and  projections  are  expressed  in good faith and are believed by the
Company  to have a reasonable basis, including without limitations, management's
examination  of  historical  operating  trends,  data contained in the Company's
records  and  other  data  available  from  third  parties,  but there can be no
assurance  that management's expectations, beliefs or projections will result or
be achieved or accomplished.  In addition to other factors and matters discussed
elsewhere  herein,  the following are important factors that, in the view of the
Company, could cause actual results to differ materially from those discussed in
the forward-looking statements: the ability of the Company to respond to changes
in  the  information  system  environment,  competition,  the  availability  of
financing, and, if available, on terms and conditions acceptable to the Company,
and  the availability of personnel in the future. The Company has no obligations
to  update  or revise these forward-looking statements to reflect future events.

The  following  discussion  should  be  read  in  conjunction with the financial
statements  and notes thereto for the fiscal years ended June 30, 2001 and 2000.

General

The fiscal year end June 30, 2001 reflects the culmination of a major transition
for  us.  In  order  to  fulfill  our  vision  to  become the premier integrated
technology  service provider, it was imperative that we put a class A integrated
technology  service  infrastructure  in  place.  During the year we designed and
built  our  first Integrated Technology Center (ITC). This facility reflects, in
the  truest  sense,  the vision and now actual capability we have to provide the
quality  Hypersource  services  for  our  client's IT needs. We moved our entire
operation  from  the  old  location  starting  in February and have been getting
settled in and implementing our technical capabilities within our data center in
a  direct  and  methodical  manner  since  then.  The  implementation of the ITC
(gradually bringing it online-while adding new customers) has been a development
project  itself.  Management's goal is to have a proactively managed environment
in  place  so  that  we  can  literally  fix  our  clients  problems before they
negatively  effect  their business. There have been many technical design issues
and  decisions  made  to  partner with technology companies such as AT&T, Intel,
Lightspeed  Systems,  and  Computer Associates for examples. Critical components
from these companies have been implemented and we are now fully operational with
respect  to  our  monitoring  systems,  security  systems,  bandwidth management
systems,  and  we  have  installed  a  Network Operating Center (NOC) within our
facility.  As  a  result  we  have  24/7 monitoring with automatic error alarms,
trouble  ticketing,  and  paging of our technical personnel all activated upon a
defined  potential negative event within our complete monitoring environment. As
a  result,  we  know  as  soon  as  a problem arises and we can fix it before it
becomes  too  serious.


                                       13
<PAGE>
During  this  major transition to the ITC infrastructure, we also chose to shift
our  sales  and marketing focus heavily towards building up our new and emerging
recurring revenue and long-term project model. In doing so, we have left the old
value-added reseller mentality, that stemmed from our origin, behind. This was a
major  shift  in  strategy  and is one of the primary reasons, together with the
total  disruption  of  operations  due to the move, for the decrease in revenues
from  the prior year. The Mattress Firm Project ended last year and based on the
transition and focus to our new business model, our financials this year reflect
a  sharp  reduction  in  sales.

In the last several months, we have learned that our new business model requires
a  more  custom  approach  and  has  a  longer  lead-time  to close a hosting or
integrated  technology service sale. We are working on standardizing our bundled
IT  service offerings and developing new and faster ways to sell our Hypersource
services as we progress. Since we are not a typical Application Service Provider
(ASP),  but  have most of the same capabilities, we find it necessary to educate
our  clients  on  these  important  differences. We have observed many ASP's and
co-location  hotel operations sink heavy capital into huge data centers and find
themselves  in  a highly competitive commodity driven market. Many of these type
companies  have failed miserably and almost every one of them experienced futile
sales  and  marketing  efforts.  They  were  able to sell their product, but not
enough  of it and at a price that was economically feasible for success of their
business  model.  In observance, there seemed to be no consideration to what the
customer  felt  was  a  cost/benefit worth paying for, or at least the customers
were not educated to the point of believing it. Incidences like flooding and the
World  Trade  Center  attacks have opened the eyes of many business managers and
the educational process is occurring. More and more business owners and managers
will  recognize  an  ITSP  like  Hyperdynamics  as  being  the best cost/benefit
solution  for  protecting  their  ability to efficiently operate their business.
Because  of  the obvious futile efforts of ASP's that had flawed business models
with  ineffective  sales and marketing, we decided not to dump resources blindly
into sales and marketing. Instead we have taken a careful, gradual, and creative
approach  towards  finding our core revenues to effectively ramp our operations.
It  is  also  important to note however, that we had planned to raise additional
resources  to  implement  a  full  blown sales and marketing campaign by now. As
discussed  in  the  liquidity  section below, we believe that the actions of the
series  A  preferred  shareholders,  now under litigation, severely hampered our
ability  to  effectively raise the minimum of an additional five million dollars
($5,000,000)  of  capital  that we had planned on, partially to be allocated for
our sales and marketing focus. Nonetheless, we have done what we could with what
we have had to work with and management now has a four pronged attack on ramping
up  our  revenues  considerably  beyond  where  they  have  ever  been  before.

First  we  are networking with all of our primary vendors, and business partners
to  find  core  account  business.  Second,  we  are formalizing this networking
activity  by creating bilateral strategic alliances with companies like Calsoft,
Lightspeed  Systems,  MaxVu,  Houston Community College, and others that all can
use  our  infrastructure  capabilities to support and/or sell their products and
service  their  customers. Each of these relationships has helped to close small
amounts  of  recurring  business  for  us  and  we have forecasted significantly
greater  revenues  as  our  relationships  grow.

Thirdly,  we  are  continuing  to  develop  our  vertical  application  platform
expertise.  We  continue  to  support  Great  Plains  Software as an eEnterprise
partner  and  have  significant expertise supporting this Microsoft SQL platform
with  thin  client  technology.  We  believe  this fact will allow us to attract
additional  Great  Plains  based  accounts  in  the  future. We are also rapidly
developing  expertise  with  vertically  oriented  seismic  data  interpretation
applications.  For example, we recently announced an agreement for us to provide
ASP  hosting  for  Prime  Geoscience  Corporation's  PrimeView(TM)  software
application.  It  is  expected that this hosting will grow to hundreds of users.


                                       14
<PAGE>
Lastly,  we have just implemented our acquisition strategy with the May 31, 2001
acquisition  of  SCS  Corporation.  SCS  has  proprietary  software and vertical
industry  expertise  in  the  geophysical data management market. This market is
huge.  We  recognized  the potential of being one of the only companies that can
cost  effectively convert old geophysical data off deteriorating tape media onto
the  new  age  optical  DVD  media. Since our acquisition we have given them the
support  necessary  to  complete their first data conversion project for a major
oil  company.  Additionally  SCS  signed  a  contract, soon to be announced, for
converting  approximately  70,000 tapes on numerous different tape media over to
DVD  and to transmit this data to a foreign country using our telecommunications
infrastructure.  It  is important to note that this contract would not have been
possible  without  our  new  ITC  infrastructure.

We  must  continue to refine our sales & marketing approach, continuing to focus
on  a  heavier  mix  of  higher  contribution  margin  business as an IT service
company.  The  acquisition strategy of the Company has now been initiated and we
will  actively look for profitable technology companies to acquire that can take
advantage  of  our  ITC  infrastructure.

Results  of  Operations

     Revenues  decreased  to  $426,601  for the year ended 2001, from $2,137,998
for  2000.  The  80  %  decrease was due to the transition the company underwent
while building its first Integrated Technology Center (ITC) and moving to a new,
more reliable and forecastable revenue model. The undue delays in installing our
fiber  optics  exasperated the effects of our business downturn. Our ITC came on
line  in April 2001, five months later than planned.   Comparatively, last year,
The  Mattress  Firm was 71% of the FYE 2000 business and we did not replace this
revenue  with  another  Great  Plains  project  during  the  transition.

     Cost  of  revenues  decreased  to  $919,538  (215% of revenue) for the year
ended  2001,  from  $1,962,150  (91.78% of revenue) for 2000. The reason for the
significant  decrease  cost  of  sales  is  related  directly to the decrease in
related  revenues  and  the  reason cost of revenues is more than twice revenues
reflects  management's  decision to keep core operational employees on staff and
the  increased  operational  costs  of  the  new  ITC  during  the  downturn and
transition.  Management  decided  to  maintain  a  minimum  level of operational
overhead  so  that employees could be trained and prepared to ramp revenues back
up  under  the  new  business  model  for  recurring  revenue  based  IT service
contracts.  As  a  result,  Cost  of  Revenues  decreased only 53% compared to a
decrease  of 80% for the decrease in sales for the year. The reason that Cost of
Revenues  did  not decrease proportionally due primarily to 1) the allocation of
operational salaries of $355,220 that have been charged to cost of sales in 2001
compared  to$327,540 in 2000. These salaries are a fixed component that has been
added  to  Cost of Revenues during development and preparation for the Company's
new  business  model that it is just now ramping up. Thus, even though the sales
dramatically  decreased,  this  fixed  portion  related  to operational employee
salaries  actually  increased.  2) a $91,396 write-off in obsolete inventory and
shrinkage; and 3) an additional contract adjustment of $34,689 with Great Plains
Software,  our  primary supplier for the Mattress Firm project completed in June
of  2000.  These  amount to a total of $481,305. Taking this amount into account
the decrease of cost of revenues would be proportional to the decrease in sales.

Selling,  General  and  Administrative expenses increased to $2,315,421 (543% of
revenue)  for  the  year ended 2001, as compared to $669,485 (31.31% of revenue)
for  2000.  The parent company, Hyperdynamics' legal, accounting, and consulting
expenses  increased  by  $1,153,936. This increase was primarily a result of the
accrual  of  the  litigation  support  costs  totaling  $812,000  for  the  suit
Hyperdynamics  plans to pursue against preferred shareholders who breached their
agreement  with  us.  Legal,  accounting,  and consulting expenses also included
settlements  of disputes totaling $182,053 and $182,359 of fair value of options


                                       15
<PAGE>
and  warrants  issued  to  non-employees  pursuant to the definition of employee
defined  in  FASB  Interpretation  #44 where previously we would have classified
them as employees. Office rent increased by $144,499 for the year as a result of
increased  costs  from  the  new  ITC.  The  SG&A  added from SCS Corporation is
$47,015,  which  was  non-existent  in  the financials last year. Management has
considered  this increase necessary to get prepared for the expected increase in
activity resulting from its new Integrated Technology Center. Management expects
selling,  general,  and  administrative  expenses to decrease significantly on a
percentage  of  revenue  basis  as  activity  levels  increase.

Net  Loss. The net loss of the Company was $(2,809,183) for the year ended 2001,
or  ($0.21)  per  share, compared to $(616,048) or ($0.04) per share as restated
for  2000.  The net loss available to shareholders was $(2,911,971). This amount
includes  the  deduction  for  preferred  stock  dividends.

The  negative  results  are  due  to  the  substantial  transition and resulting
business  downturn  required to position the company for its new business model.
Also Selling, General, and Administrative expenses have continued to increase at
the  same  time  in  preparation  for  supporting  the  expected  ramp up in new
business.  Management  expects  revenues and margins to dramatically increase in
the  coming periods based on its four-pronged marketing plan as discussed above.
Liquidity  and  Capital  Resources

At  June  30,  2001  the  Company's  current  ratio of current assets to current
liabilities  was .62. This compares to 6.16 for 2000. This decrease reflects the
funding  of  cash  deficits  resulting from operating losses during this year of
transition and highlights why it is management's priority focus to cash flow the
company  from  operations  as  quickly  as possible. It is critical as discussed
hereunder  that  the  Company  obtain  additional working capital so that it can
continue  to  meet current cash obligations as it continues to generate more and
more  cash  from  operations.

We  have  been operating with a cash deficit this entire last year and have been
running  out of cash resources with an artificially weakened market. As a public
company,  the  health  of  our  market is paramount to be able to raise critical
working  capital  and  bridge capital. During tough times such as this year, our
only  source for obtaining critical capital historically has been through direct
and  indirect  efforts  and consulting provided by Michael Watts, the brother of
the  Chairman,  CEO, and President. In May of 2001, the Company was running very
tight  on  cash  with  dwindling market and a stock price of 27 cents per share.
Under  the  most  difficult  of  circumstances,  Michael  Watts  structured  the
acquisition  of  SCS  Corporation  in  such  a  way  that  he  could justify his
successful  continuance  of  supporting  the  Company  with  its  necessary cash
requirements.  Thus,  the  acquisition  of SCS Corporation was structured with a
critical  necessity  to make it possible for the Company to raise bridge capital
through  the  efforts  of  Michael  Watts.  To  date, no other firm except those
recruited  by  the  efforts  of  Michael  Watts  have brought any true financing
options  to  us,  much less made us a true offer to raise our bridge capital and
working  capital  necessary  to  get the Company to a point of cash flowing from
operations.

As  a  direct  result  of  the  closing  of the SCS acquisition on May 31, 2001,
Michael  Watts  has  been  directly  and  indirectly  facilitating  and has been
responsible  for  cash  contributions  to the Company of $312,000. Without these
critical  funds,  the  Company  would  have  not  been  able to meet its current
obligations  in  recent  months.


                                       16
<PAGE>
Now,  based on a significant tape conversion contract recently signed by our new
subsidiary,  SCS  Corporation, and other sales forecasted, management expects to
cash  flow  from  operations  on  an  ongoing  monthly  basis  by February 2002.

On September 28, 2001, also resulting from the consulting work of Michael Watts,
the  Company  signed  a stock subscription agreement to sell up to $750,000 on a
best  efforts basis, of our restricted 144 common stock to IC Investments LTD at
$.50  per  share.  Our  first  traunch  of  this  additional  working capital is
currently  due  and  payable  as  of  October  12,  2001.

The  Company  could  obtain  additional  capital upon the exercise of previously
issued  in  the  money  outstanding  warrants  and  options  for  common  stock.

The Company has long-term debt of $81,292 financing certain electrical equipment
in its data center. We also have a contingent $700,000 note payable that is only
payable  with  50%  of  the profits of SCS Corporation. We have the right to pay
this note off using common stock. The Company does not plan on using significant
debt  financing  except for the possibility of financing income-producing assets
in  the  future.

The  Company maintains a CD in the amount of $436,000 which secures the lease at
Westwood  with  a Letter of Credit arrangement. This CD is released at a rate of
15% in year one, then 20% a year for the next three years, then 25% in year five
of  the lease. The first release of this collateral will occur in November 2001.

Factors  affecting  future  results  and  conclusions  of  management

This past year we designed, built and moved into our first Integrated Technology
Center (ITC) while shifting our business model heavily towards building a strong
recurring  revenue  base  for  IT  services and long-term projects. We have been
gradually  and  deliberately  progressing  since April 2001. We must continue to
refine  our  sales  and  marketing  strategies within our four-pronged attack as
discussed  above.  The  degree that we are successful in profitably implementing
our  first  new ITC and the speed that we also are able to begin selling out its
capacity  and  to  cash flow from operations, will determine how quickly we will
benefit  from  showing  positive  results  from operations. This must remain the
primary  focus  of  management.

This  year  we  must  continue to increase our recurring revenue base by closing
recurring  revenue service contracts, raise additional capital to start building
ITC  2  and  3  in  other cities, as discussed above, and begin making some core
acquisitions  of  successful  IT  services  companies  to  combine  with our ITC
strategy.  These  are  the  goals  established by management for the fiscal year
ending  June  30,  2002.

Item  7     FINANCIAL  STATEMENTS

The  information  required  hereunder is included in this report as set forth in
the  "Index  to  Financial  Statements  on  page  F-1.

Item  8     CHANGES  IN  AND  DISAGREEMENTS  WITH  ACCOUNTANTS ON ACCOUNTING AND
            FINANCIAL  DISCLOSURE

None


                                       17
<PAGE>
PART  III

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

Executive  Officers  and  Directors

The  following table sets forth the names and positions of each of the executive
officers  and  directors  of  the  Company.

        Name                         Position                         Age
     Kent Watts         Director,  Chief  Executive  Officer,         43
                        and  Chief  Financial  Officer

     Robert J. Hill     Director,  Senior  Vice  President            47

     Harry J. Briers    Director,  Vice  President  -  Operations     38
                        Chief  Operating  Officer

     Darren-Anthony
     Lumar              Executive  Vice  President                    31

     Lewis Ball         Secretary                                     70

     Directors  are  elected  annually  and  hold  office  until the next annual
meeting of the stockholders of the Company or until their successors are elected
and  qualified. Officers are elected annually and serve at the discretion of the
Board  of Directors. There is no family relationship between or among any of the
directors and executive officers of the Company. Board vacancies are filled by a
majority  vote  of  the  Board.

     Kent Watts, age 43, became Chairman of the Board of Directors and was named
the  Company's  President  and  Chief Executive Officer on June 4, 1997.  He has
served  as a Director and Chief Financial Officer since  January  17,  1997, and
as  Chief  Information Officer until July 2000.  Mr.  Watts has been a certified
public  accountant  in  Texas since 1985 and a licensed real estate broker since
1979.  He  received  a  Bachelor  of  Business  Administration  Degree  from the
University  of  Houston  in  1983.  Mr. Watts founded MicroData Systems, Inc., a
subsidiary  of the Company, in 1988 and has been MicroData's CEO until he became
President  and  Chief  Executive  Officer  of  Hyperdynamics Corporation. He has
extensive  experience  working  with  management  information  systems.  Mr.
Watts  has  been involved  in  the  design,  implementation  and  management  of
heterogeneous, multiprotocol  networks.  He has substantial technical experience
with a variety of  operating  systems,  relational  databases, and client-server
based  software  applications.  He  brings  to  the Company an interesting blend
of  business  and  technical  experience.  Mr.  Watts  is  the primary technical
designer of the Company's first Integrated Technology Center (ITC) and author of
the  Company's  ITSP  business  plan  and  evolving  business  model.

     Robert  J.  Hill,  age  47,  served  as  the Chief Operating Officer of the
Company  from  June  1996 until June 1997. In July, 1997, Mr. Hill was appointed
vice-president  of  the  Company.  Mr.  Hill currently serves the Company in the
capacity  as  a  Director and Senior Vice President. Before joining the Company,
Mr.  Hill served for two years as vice president of Hudson Trinity Incorporated,
a  privately held Internet Service Provider and network engineering company that
also  contracted  senior  network  engineers  to  Loral Space Systems, Inc., the


                                       18
<PAGE>
principal  civilian  contractor  for the design, development and installation of
NASA's  new  manned space flight control center. Previously, Mr. Hill served for
three  years  as  Acquisition Manager for Loral Space Systems, Inc. Mr. Hill has
earned  an MBA degree from South Eastern Institute of Technology and a BA degree
from  the  State  University  of  New  York  at  Potsdam.

     Harry  James  Briers,  age 38, has been a Director since March 2, 2000. Mr.
Briers  was  also  elected  as  Vice  President  of Operations for Hyperdynamics
Corporation. He served as the Director of Integrated Information Systems when he
joined  the company in May of 1998 and named the Chief Operating Officer in July
1998. He was named President of Ithost.net Corporation (wholly owned subsidiary)
in May of 1999. He is now serving in the capacity as a Vice President and is the
Company's  Chief  Technology  Officer  (CTO).  From  1988 until May of 1998, Mr.
Briers  owned  and  operated  Perfect  Solutions,  a software consulting firm in
Houston,  Texas.  Prior  to  that, he founded and operated Perfect Solutions, an
office  automation  systems  provider,  for  over  ten  years.  He has extensive
experience  in  the  selling  and  implementation  of  mission critical software
applications.  Prior  work experience included consulting for Ernst and Young in
their  Entrepreneurial Services Group. Harry has BS in Accounting and a MBA from
the  University  of  Houston  -  Clear  Lake.

     Darren-Anthony  Lumar,  age  31,  became  Executive  Vice  President  of
Hyperdynamics  Corporation on November 2, 2000. Lumar has a wealth of experience
in  investor  relations,  capital  formation,  relationship  management, and due
diligence  compliance.  As  Vice  President  of  Capital  Acquisition  for First
Financial  Services, LLC, Lumar successfully managed to secure financing of over
$30,000,000.  Lumar  also served as Vice President of Capital Management for the
Economic  Planning  and  Development  Council.  Lumar  assisted  in establishing
financial  management  standards and practices for new venture start-ups as well
as  emerging  growth  companies.  Most  recently as President of Lumar Worldwide
Consulting,  Lumar  assisted  small  to  mid-sized  companies  in  developing
relationships  necessary  for  proper  capital  formation  and  core  business
development.  Mr. Lumar received a degree in Economics and a Masters of Business
Administration  from  the University of Devonshire (London, England). Lumar is a
member  of  the  following  organizations:  American  Bar Association, Christian
Business  Leaders  of America, Fellowship of Christian Athletes, and Kappa Alpha
Psi  Fraternity American Management Association International Investor Relations
Society  (London,  England). Lumar is also an active and a proud member of Quail
Valley  Church  in  Stafford  TX.

     Lewis  E.  Ball,  age 70, has served as the  secretary of the Company since
1997  and  as  the  Chief Financial Officer from June 1996 to January 1997.  Mr.
Lewis  has  been  a  financial  consultant  to a number of companies since 1993.
Mr. Ball has served as a director of JVWeb, Inc. since 1997 and as secretary and
treasurer  of  JVWeb,  Inc.  since  1998.  Mr.  Ball  has many years of industry
experience  as  a Chief  Financial  Officer  with  Stevenson  Services, Inc. and
Richmond  Tank  Car  Company  (from  1983  to  1993).  Mr.  Ball  is a Certified
Public  Accountant  and  a Certified  Management  Accountant.  Mr.  Ball  has  a
B.B.A.  in  Finance from the University  of  Texas,  and  he  did  post-graduate
work  in  accounting  at  the  University  of  Houston.


                                       19
<PAGE>
Item  10     EXECUTIVE  COMPENSATION

The  following  table  reflects  all  forms  of compensation for services to the
Company for the fiscal years ended June 30, 1999, 2000 and 2001 of the executive
officers  of  the  Company.  No  executive  officer  of  the  Company  received
compensation  that  exceeded  $100,000  during  2001.

SUMMARY  COMPENSATION  TABLE

<TABLE>
<CAPTION>
                              SUMMARY COMPENSATION TABLE

                             ANNUAL COMPENSATION             LONG TERM COMPENSATION

                                                              AWARDS        PAYOUTS

                                                                  SECURITIES
                                              OTHER               UNDERLYING            ALL
                                              ANNUAL  RESTRICTED   OPTIONS             OTHER
                                              COMPE-    STOCK        SARS       LTIP   COMPEN-
NAME AND PRINCIPLE           SALARY   BONUS  NSATION   AWARDS                 PAYOUTS  SATION
     POSITION         YEAR     $        $       $        $            #          $       $
<S>                   <C>   <C>      <C>     <C>      <C>         <C>         <C>      <C>
Kent Watts (1)
     Chief Executive  2001  100,000  $  -0-  $   -0-  $      -0-       -0-    $   -0-  $   -0-
     Officer and      2000  100,000     -0-      -0-         -0-    15,000        -0-      -0-
     Chief Financial  1999   84,000     -0-      -0-         -0-       -0-        -0-      -0-
     Officer
</TABLE>

Chief  Executive  Officer  Compensation

(1)  On July 21, 1999, the Board of Directors of Hyperdynamics Corp. unanimously
     agreed  to  the terms of a "Executive Employment Agreement" for Kent Watts.
     The  Agreement  was  duly  executed  on July 21, 1999 which establishes Mr.
     Watts  as the Company's President, Chief Executive Officer (CEO), and Chief
     Financial  Officer  (CFO).  In  the  agreement it is noted that the Company
     intends  to  hire a new CFO at the time the board deems it to be beneficial
     to  the Company. At that time, Mr. Watts will continue his responsibilities
     as  President  and CEO while relinquishing his duty as CFO. As of September
     21, 2001 Mr. Watts is still acting as the CFO for the Company. The contract
     allows  for  a  base  salary  of $100,000 annually with a performance based
     incentive  salary  based  on 5% of adjusted net income, up to an additional
     $100,000  in  salary.  Therefore,  maximum  salary  under  the Agreement is
     $200,000  annually. Additionally, Mr. Watts will receive 7,000 options with
     a  strike  price  of $1.00 per share for unrestricted common stock for each
     $1,000,000  of  revenue  generated in fiscal year end June 30, 2000, by the
     Company,  in  excess  of the revenues reported for the fiscal year end June
     30,  1999.  This  agreement  has  been informally renewed on a year by year
     basis  under  the  same  terms.


     No  options were granted to Mr. Watts during the fiscal year ended June 30,
     2001.


                                       20
<PAGE>
<TABLE>
<CAPTION>
                 AGGREGATED OPTIONS EXERCISES IN LAST FISCAL YEAR
                         AND FISCAL YEAR END OPTION VALUES

                                                   NUMBER OF         VALUE OF
                                                  UNEXERCISED     UNEXERCISED IN
                            SHARES                 SECURITIES        THE MONEY
                            AQUIRED     VALUE      UNDERLYING    OPTIONS AT FISCAL
NAME                      ON EXERCISE  REALIZED  OPTIONS AT FYE      YEAR END
<S>                       <C>          <C>       <C>             <C>
Kent P. Watts (1)                   0         0          15,000                  0
CEO and
Chief Financial Officer
<FN>
(1)  Mr. Watts did not exercise any options. None of Mr. Watts's options were in
     the  money  at  fiscal  year  end.
</TABLE>

Director  Compensation

There  were  no  options or other compensation granted by the board for services
rendered  during  the  FYE  2001.  There  have  been no director meeting expense
reimbursements  for  2001  and  2000.

Employee  Stock  Option  Plan

The Company has been successful in attracting and retaining qualified personnel,
the  Company  believes  that  its  future  success  will  depend  in part on its
continued  ability to attract and retain highly qualified personnel. The Company
pays  wages  and  salaries  that  it  believes are competitive. The Company also
believes  that equity ownership is an important factor in its ability to attract
and  retain  skilled personnel including consultants, and the Board of Directors
of  the  Company  has  adopted  an  employee  stock  option  program.

Options  to  purchase  1,620,000  shares  of  registered  common stock have been
approved  under  the  Plan.  Such  options  will  vest over a five-year or other
negotiated period and will have a strike at a price set at the time of grant and
based  on  the  then  current  market  value  of the stock. The President of the
Company  has the authority as given by the Board of Directors to negotiate stock
option  agreements with corporate consultants as well. As of September 21, 2001,
options  to  purchase  1,619,560  shares  have  been granted under this plan and
1,331,295 of these have been exercised. This leaves 288,265 shares granted under
employment  or  consulting agreements but not yet to be exercised and 440 shares
left  to  be  granted pursuant to employment or consulting agreements. This is a
total  of  288,705  shares  available  under  the  plan  not  yet  issued.

The  Company  also had 5,000 remaining shares available to issue pursuant to the
S-8  filing  on  August 13, 1996 and 64,212 shares available pursuant to the S-8
filing  on  December  31,  1996.

The  purpose  of the stock option program will be to further the interest of the
Company,  its  subsidiaries  and its stockholders by providing incentives in the
form  of  stock  options  to  key  employees,  consultants,  and  directors  who
contribute  materially  to  the  success  and  profitability of the Company. The
grants  will  recognize  and  reward  outstanding  individual  performances  and
contributions  and will give such persons a proprietary interest in the Company,
thus  enhancing  their  personal interest in the Company's continued success and
progress.  This  program  will  also  assist the Company and its subsidiaries in
attracting  and  retaining  key  employees  and  directors.


                                       21
<PAGE>
Item  11     SECURITY  OWNERSHIP  OF  CERTAIN  BENEFICIAL  OWNERS AND MANAGEMENT

The  following  table sets forth certain information at September 21, 2001, with
respect to the beneficial ownership of shares of Common Stock by (1) each person
who  owns  beneficially  more than 5% of the outstanding shares of Common Stock,
(2)  each director of the Company, (3) each executive officer of the Company and
(4)  all  executive  officers  and  directors  of  the  Company  as  a  group.

NAME AND ADDRESS OF BENEFICIAL OWNER                   SHARES BENEFICIALLY OWNED
                                                            Number       Percent
KENT  WATTS
9700  BISSONNET,
SUITE  1700
HOUSTON,  TEXAS  77036                                   21,515,185(1)     57.7%

ROBERT  J.  HILL
9700  BISSONNET,
SUITE  1700
HOUSTON, TEXAS 77036                                       400,455 (2)      1.1%

HARRY  JAMES  BRIERS
9700  BISSONNET,
SUITE  1700
HOUSTON,  TEXAS  77036                                     413,000 (3)      1.1%

DARREN-ANTHONY  LUMAR
9700  BISSONNET,
SUITE  1700
HOUSTON, TEXAS 77036                                        375,000(4)      1.0%

LEWIS  E.  BALL
2656  SOUTH  LOOP  WEST
SUITE  103
HOUSTON,  TEXAS  77054                                       42,060(5)      0.1%

ERNEST  M.  WATTS
9700  BISSONNET
SUITE  1700
HOUSTON, TEXAS 77036                                     20,185,185(6)     54.1%

DJX  LTD.
4438  WEST  10TH  AVENUE
VANCOUVER, BC V6R4R8                                     20,185,185(7)     54.1%

ALL DIRECTORS AND EXECUTIVE OFFICERS AS A GROUP
(5 PERSONS PLUS DJX SHARES)                              22,758,200(8)     61.0%


                                       22
<PAGE>
(1)  This  amount  includes  1,015,000  shares  held in certificates, options to
     purchase  5,000  shares  at  $2.00 per share and options to purchase 10,000
     shares  at  $3.00  per  share,  and  300,000 shares at $.40; and 20,185,185
     shares  attributable  to  Kent  P. Watts based on his relationship with his
     father  who  votes  the  shares  of  DJX  Ltd.

(2)  This amount includes 3-year options to purchase 87,455 shares of the common
     stock  of  the  company for a strike price of $1.25, 3,000 shares at $2.00,
     10,000  shares  at  $3.00  per  share,  and  300,000  shares  at  $.40.

(3)  This amount includes currently exercisable options to purchase 3,000 shares
     at $2.00, 10,000 shares at $3.00 per share, and 300,000 shares at $.40. (4)
     This  amount  includes  options to purchase 300,000 shares at $.40 each and
     75,000  shares  at  $1.50  per  share.

(5)  This  amount includes currently exercisable options to purchase up to 8,760
     shares  of  common  stock  of  the Company at an exercise price of $.75 per
     share,  currently  exercisable  options  to purchase up to 33,300 shares of
     common  stock  of  the  Company  at  an  exercise price of $1.25 per share.

(6)  Ernest  Watts,  the father of Kent P. Watts, Chairman, CEO and President is
     the  control  person  of DJX Ltd. Thus 20,185,185 shares as discussed below
     are  attributable  to  him.

(7)  On  May  31,  2001  a stock exchange agreement was completed to acquire SCS
     Corporation as a wholly owned subsidiary of the Company. The Company issued
     2,725  shares  of Series B Preferred Stock to pay for the acquisition. Each
     share of Series B Preferred Stock carries a $1,000 per share face value and
     is convertible by written request into common stock at the lesser of $0.135
     per  share  or 50% of the closing bid price on conversion. On September 25,
     2001  the closing bid price was $.73 per share. Thus if 100% of this series
     B  Preferred was converted at the lesser $.135 amount per share, the shares
     common  stock  shares  issued  would  be  20,185,185.  This presentation is
     prepared  as  if  full  conversion  has  occurred.  DJX  Ltd.  is a foreign
     corporation  with  the  shareholders  being  the  grand  children of Ernest
     M.Watts,  the father of Kent P. Watts, the Chairman, CEO, and President for
     our  Company.  Two  of the grand children are the minor children of Kent P.
     Watts.  Their  voting  rights in DJX Ltd. stock, are exercised by Ernest M.
     Watts.

(8)  Based  on  6  above, the shares for DJX Ltd. are a related party to Kent P.
     Watts,  Chairman  and  thus are added to the total shares for all Directors
     and  Executive  Officers  as  a  group.


                                       23
<PAGE>
Item  12     CERTAIN  RELATIONSHIPS  AND  RELATED  TRANSACTIONS

Our  Board  of  Directors  has  adopted a policy that all of our affairs will be
conducted by standards applicable to publicly-held corporations and that we will
not  enter into any transactions or loans between us and our officers, directors
and 5% shareholders, unless the terms are no less favorable than we could obtain
from  independent,  third  parties, and that these types of transactions must be
approved  by  our  disinterested  directors.

Michael Watts, the brother of Kent Watts, was retained by us originally in April
1996  as  a  consultant.  We granted 275,000 stock options to Michael Watts. Our
Board  of  Directors renewed the consulting agreement with Michael Watts through
March  2000.  In  December 1997, we amended the original consulting agreement to
include  a total of 375,000 currently exercisable options which were exercisable
as  follows:  1/3 of which are exercisable at a strike price of $.625 per share;
1/3  of  which  are exercisable at a strike price of $1.00 per share; and 1/3 of
which  are  exercisable  at  a  strike  price  of $1.375 per share. All of these
options  expired  on  June  30, 2000. In April 1999, we granted Michael Watts an
additional  350,000 options exercisable at a strike price of $.50 per share that
expire  in March 2001, pursuant to the consulting agreement. On January 10, 2001
a  new  consulting  agreement  was  signed  with Michael Watts and he was paid a
$75,000  retainer  to  be  applied against services to be rendered. Part of this
agreement was specifically to consult with respect to public relations issues on
behalf  of  the  Company  in relation to interactions with broker-dealers, large
shareholders,  and  preferred  shareholders.

Since  this  agreement with Michael Watts has been signed he has facilitated and
successfully  helped  to  attract numerous private investors to purchase all the
shares  of  the  Company's  common  stock  owned by Emerald Bay Interest LTD and
related  parties.  Secondly,  he successfully structured the acquisition for SCS
Corporation  (SCS)  as  disclosed in the Company's 8K filing on June 15, 2001 so
that  the  Company  could  both  consummate the acquisition and be in a workable
position to raise its much needed working capital. As discussed in the Company's
March  31,  2001 10QSB management believed that it needed an additional $750,000
of working capital to help it reach its goal of cash flowing from operations and
positioning  itself  to  turn  profitable.

As a direct result of the closing of the SCS acquisition on May31, 2001, Michael
Watts has been directly and indirectly facilitating and has been responsible for
cash  contributions  to  the  Company of $312,000. On July 25, 2001 the board of
directors  granted  Michael  Watts  125,000 options at a price of $.80 cents per
share  as  additional  compensation  for  the  consulting  agreement. Of all the
850,000  options  Michael  Watts  has received for consulting compensation since
April of 1996 he has exercised 783,750 options as of September 22, 2001. On that
date  he held 66,250 options exercisable at a strike price of $.80 per share. On
September  28,  2001,  Mike  Watts  facilitated  the execution of a subscription
agreement  to  raise  us  an  additional  $750,000  in  working  capital.

During  1997, we sold a convertible promissory note to Emerald Bay Interests LTD
for  $350,000.  The interest rate on the note was 10% and had a maturity date in
November 1997. At that time we were unable to pay off the note. In January 1998,
Emerald  Bay  Interests  LTD agreed to convert the note into 5,833,333 shares of
our  common stock. This resulted in Emerald Bay Interests LTD becoming a control
person  of  us.  According to the Company's stock transfer records to date, they
have  completely  sold  their  interest  and  are  no  longer  a  shareholder.

In  September  1999,  we  sold  100%  of  the  equity  of  our then wholly-owned
subsidiary,  Wired  and  Wireless  Corporation,  to  Ted  W.  Tarver, one of our
then-directors who resigned as our director in connection with the sale of Wired
& Wireless to him. We had concluded that Wired & Wireless no longer fit into our
business  strategy.  The  consideration  we  received for this transaction was a
revenue  sharing  agreement  that  provides  that  we  will  receive,  after the
effective date of the sale, 7% of the gross revenues of Wired & Wireless for the
first  $714,286  of its revenue, 5% of its next $1,000,000 in revenue, and 3% of


                                       24
<PAGE>
its  revenues thereafter. The revenue sharing agreement further provides that in
the  event  a  third  party  acquires  or merges with Wired and Wireless we will
receive  10%  of  the  proceeds  from such a transaction. The Wired and Wireless
subsidiary's  asset  value  represented  approximately 17.9% of the consolidated
assets at September 30, 1999. We had a loss of $184,546 for fiscal year end June
30,  1999  of  which  approximately  15%, or $27,625, was attributable Wired and
Wireless.  The terms of the sale of Wired and Wireless Corporation to Mr. Tarver
were  the  result  of negotiations between the parties, however no appraisal was
done.  All  of  the  disinterested  directors voted in favor of the sale. In the
winter of 1999, Mr. Tarver was the victim of a serious hunting accident in which
he  lived  but  almost  lost  his  leg.  He has had a long convalescence and the
Company  has not produced under the revenue sharing agreement since. Thus, we do
not  expect  any  future  results  from  the  Revenue  Sharing  Agreement.

In  September  2000  a  non interest bearing Note was signed with then director,
Bobby  P.  Lewis  for  fifteen thousand dollars ($15,000). The note was based on
advances  for  expenses to be presented and accepted by management. The Note was
originally due on September 21, 2001 but has been extended until March 31, 2002.

In  December 2000 a non interest bearing Note was signed with the Executive Vice
President,  Darren-Anthony  Lumar  for eight thousand dollars ($8,000). The note
was originally due on April 15, 2001. It has been extended until March 31, 2002.

On  May  31,  2001  a  Stock  Exchange  Agreement  was executed by and among our
Company,  DJX  Ltd.,  a Belize corporation ("DJX") being the sole stockholder of
all  capital  stock  of  SCS  Corporation, a Delaware corporation ("SCS") and J.
Hamilton, being a control person of DJX and SCS.  DJX Ltd., a Belize company has
now  obtained a controlling interest in our Company through the receipt of 2,725
shares  of  series B preferred stock. Each share of series B preferred stock has
the  equivalent  voting rights of 7,408 shares of common stock and the rights to
receive  notice  and vote on any matters that common stock shareholders can vote
on. Thus, DJX, Ltd. has 20,186,800 votes with the total common stock outstanding
September 28, 2001 of 15,645,944 shares. This is 56.3% of the outstanding voting
rights.  DJX Ltd. is a foreign corporation with the shareholders being the grand
children of Ernest M. Watts, the father of Kent P. Watts, the Chairman, CEO, and
President  for  our Company. Two of the grand children are the minor children of
Kent P. Watts. Their voting rights in DJX Ltd. stock, are exercised by Ernest M.
Watts.

Item  13     EXHIBITS  AND  REPORTS  ON  FORM  8-K

     (A)  EXHIBITS

          The  following  exhibits  are  filed  with  this  Annual Report or are
          incorporated  herein  by  reference:

          Exhibit Number      Description
               21.1       Subsidiaries  of  Registrant

     (B)  REPORTS  ON  FORM  8-K

     The  company  filed  an  8-K  on  June 15, 2001 reporting Item 1. Change in
     Control  Registrant

     The  company filed an 8-K on June 15, 2001 reporting Item 2. Acquisition of
     Disposition  of  Assets


                                       25
<PAGE>
     The  company  filed  an  8-K on August 15, 2001 reporting Item 7. Financial
     Statements  and  Exhibits

     The company filed an 8-K on September 4, 2001 reporting Item 6. Resignation
     of  Registrant's  Director

SIGNATURES

In  accordance with the requirements of Section 13 or 15(d) of the Exchange Act,
the  Registrant  has  caused  this  report  to  be  signed  on its behalf by the
undersigned,  thereunto  duly  authorized,  on  the  12th  day  of October 2001.

                                  HyperDynamics  Corporation

                                  By:  /s/  Kent Watts
                                  --------------------
                                  Kent Watts, Chairman of the Board,
                                  Chief Executive Officer, and Chief Financial
                                  Officer

Pursuant  to  the  requirements of the Exchange Act, this report has been signed
below  by  the  following  persons in the capacities and on the dates indicated:

Signature              Title                                Date
/s/  Kent Watts        Chairman of the Board,
---------------------  Chief Executive Officer and
Kent Watts             Chief Financial Officer              October 12, 2001

/s/  Robert Hill
---------------------
Robert Hill            Director                             October 12, 2001

/s/  Harry J. Briers
---------------------
Harry J. Briers        Director                             October 12, 2001


                                       26
<PAGE>
                            HYPERDYNAMICS CORPORATION
                          Audited Financial Statements
                          Index To Financial Statements

                                                                            PAGE
Independent  Auditor's  Report                                               F-2
Consolidated  Balance  Sheet  as  of  June  30,  2001                        F-3
Consolidated Statements of Income for the years ended June 30, 2001 and
  2000                                                                       F-4
Consolidated  Statements  of  Changes  in  Stockholders'  Equity
  for  the  years  ended  June  30,  2001  and  2000                         F-5
Consolidated  Statement of Cash Flows for the years ended June 30, 2001
  and 2000                                                                   F-7
Notes  to  Financial  Statements                                             F-9


                                      F-1
<PAGE>
                          INDEPENDENT AUDITORS' REPORT


To the Board of Directors and Stockholders
  HyperDynamics  Corporation
  Houston,  Texas

We  have  audited  the  accompanying consolidated balance sheet of HyperDynamics
Corporation  (a  Delaware corporation) and subsidiaries as of June 30, 2001, and
the  related  consolidated  statements of income, stockholders' equity, and cash
flows  for  the  two  years  then  ended.  These  financial  statements  are the
responsibility  of the Company's management. Our responsibility is to express an
opinion  on  these  financial  statements  based  on  our  audit.

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

In  our opinion, the consolidated financial statements referred to above present
fairly,  in  all  material  respects,  the  financial  position of HyperDynamics
Corporation  as of June 30, 2001, and the results of its operations and its cash
flows  for  the  year  then  ended,  in  conformity  with  accounting principles
generally  accepted  in  the  United  States.


MALONE  AND  BAILEY,  PLLC
Houston,  Texas

September  12,  2001,  except  for  Note  15,
 which  is  dated  October  12,  2001


                                      F-2
<PAGE>
                            HYPERDYNAMICS CORPORATION
                           CONSOLIDATED BALANCE SHEET
                                  June 30, 2001


                         ASSETS
Current Assets
  Cash                                                       $    34,265
  Restricted certificate of deposit                               65,445
  Accounts receivable, net of allowance for
    doubtful accounts of $6,000                                   30,687
  Inventory                                                       46,178
  Stock subscription receivable                                   95,000
  Advances to officers and directors                              26,233
  Other current assets                                            21,994
                                                             ------------
    Total Current Assets                                         319,802

Property and equipment, net of accumulated
   depreciation of $113,682                                      835,683
Other Assets
  Restricted certificate of deposit                              370,855
  Customer list, net of accumulated amortization of $47,423       19,167
  Deposits                                                        23,432
                                                             ------------
      TOTAL ASSETS                                           $ 1,568,939
                                                             ============

      LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
  Current portion of installment debt                        $    17,685
  Accounts payable and accrued expenses                          359,102
  Lawsuit costs payable in stock                                 886,240
  Dividends payable                                              130,800
  Dividends payable to related party                               9,083
                                                             ------------
    Total Current Liabilities                                  1,402,910
Long-term portion of installment debt                             81,292
                                                             ------------
      TOTAL LIABILITIES                                        1,484,202
                                                             ------------
Stockholders' Equity
  Convertible preferred stock, par value $.001;
    stated value $1,000; 20,000,000 authorized;
    Series A - 1,945 shares issued and outstanding                     2
    Series B - 2,725 shares issued and outstanding                     3
  Common Stock, par value $.001; 50,000,000 shares
    authorized; 14,371,945 shares issued and outstanding          14,372
  Additional paid in capital                                   5,034,200
  Retained deficit                                            (4,963,840)
                                                             ------------
        -----------
    Total Stockholders' Equity                                    84,737
                                                             ------------
        -----------
      TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY             $ 1,568,939
                                                             ============

                 See accompanying summary of accounting policies
                        and notes to financial statements


                                      F-3
<PAGE>
<TABLE>
<CAPTION>
                            HYPERDYNAMICS CORPORATION
                         CONSOLIDATED INCOME STATEMENTS
                   For the Years Ended June 30, 2001 and 2000


                                                  2001          2000
                                              ------------  ------------
<S>                                           <C>           <C>
Revenues                                      $   426,601   $ 2,137,998
Cost of Revenues                                  919,538     1,962,150
                                              ------------  ------------
      GROSS MARGIN                              ( 492,937)      175,848
                                              ------------  ------------
Operating Expenses
  Selling                                         126,511       196,595
  General and administration                    1,072,714       472,890
  Litigation costs payable in stock               994,052
  Startup costs for ITHost.net                                  170,284
  Depreciation and amortization                   122,144        47,221
                                              ------------  ------------
    Total Operating Expenses                    2,315,421       886,990
                                              ------------  ------------
      OPERATING (LOSS)                         (2,808,358)    ( 711,142)
                                              ------------  ------------
Other Income (Expense)
  Revenue sharing income                                         18,162
  (Loss) on retirement of assets               (   20,149)    (  12,316)
  Gain on sale of revenue sharing agreement         3,500        21,000
  Impairment loss on revenue interest
    - Wired and Wireless                                      ( 104,998)
    - Sierra-Net                               (   32,365)
  Interest (expense)                           (    3,549)
  Interest income                                  75,495        46,749
  Other expense                                (   23,757)
                                              ------------  ------------
    Total Other (Expense)                      (      825)    (  31,403)
                                              ------------  ------------
      LOSS FROM CONTINUING OPERATIONS          (2,809,183)    ( 742,545)

(Loss) from discontinued operations,
   net of income tax benefit of $0                            (     568)
Gain on sale of discontinued operations,
   net of income tax benefit of $0                              127,065
                                              ------------  ------------
      NET LOSS                                 (2,809,183)    ( 616,048)
      Preferred dividend requirement           (  102,788)    (  50,084)
                                              ------------  ------------

NET LOSS CHARGEABLE TO COMMON SHAREHOLDERS    $(2,911,971)  $ ( 666,132)
                                              ============  ============

Income (loss) per common share
  Continuing operations                       $ (     .21)  $ (     .05)
  Discontinued operations                                   $       .01
Weighted average shares outstanding            13,655,960    12,609,770
</TABLE>

                 See accompanying summary of accounting policies
                        and notes to financial statements


                                      F-4
<PAGE>
<TABLE>
<CAPTION>
                                HYPERDYNAMICS CORPORATION
                CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
                        For the Years Ended June 30, 2001 and 2000


                                          Preferred    Preferred      Common      Common
                                            Shares      Amount        Shares      Amount
                                          ----------  -----------  ------------  --------
<S>                                       <C>         <C>          <C>           <C>
Balances, June 30, 1999                                             12,409,503   $12,409

  Common stock issued for cash                                         428,000       428
  Cashless exercise of options                                          27,600        28

  Issuance of stock options and warrants

  Repurchase and cancellation of common
    stock purchased on the open market                               (  68,500)   (   69)

  Sale of convertible Preferred
    Stock Series A, net                       3,000   $        3

  Preferred stock dividends

  Conversion of preferred stock
    to common stock                          (  440)        (  0)                    223

  Payment of preferred stock dividends
    in common shares                                                     2,676         3

Net loss
                                          ----------  -----------  ------------  --------

Balances, June 30, 2000                       2,560            3    13,021,820    13,022

  Common stock issued for
    - cash                                                             175,000       175
    - exercise of options                                               37,638        38
    - services                                                         171,038       171
    - stock subscription                                               237,500       238

  Issuance of stock options and warrants

  Repurchase and cancellation of common
    stock purchased on the open market                             (     2,500)   (    3)

  Issuance of convertible Preferred
    Stock Series B to related party in
    connection with the acquisition of
    SCS Corporation                           2,725            3

  Preferred stock dividends

  Conversion of preferred stock
    to common stock                          (  615)          (1)      721,449       721

  Payment of preferred stock dividends
    in common shares                                                    10,000        10

Net loss
                                          ----------  -----------  ------------  --------

Balances, June 30, 2001                       4,670   $        5    14,371,945   $14,372
                                          ==========  ===========  ============  ========
</TABLE>

                 See accompanying summary of accounting policies
                        and notes to financial statements


                                      F-5
<PAGE>
<TABLE>
<CAPTION>
                             HYPERDYNAMICS CORPORATION
             CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
                    For the Years Ended June 30, 2001 and 2000
                                    (Continued)


                                           Additional
                                            Paid in       Retained
                                            Capital      (Deficit)       Totals
                                          ------------  ------------  ------------
<S>                                       <C>           <C>           <C>
Balances, June 30, 1999                   $ 1,709,924   $(1,385,737)  $   336,596

  Common stock issued for cash                228,070                     228,498
  Cashless exercise of options              (      28)
  Issuance of stock options and warrants       25,106                      25,106
  Repurchase and cancellation of common
    stock purchased on the open market      ( 143,764)                 (  143,833)
  Sale of convertible Preferred
    Stock Series A, net                     2,604,187                   2,604,190
  Preferred stock dividends                               (  50,084)   (   50,084)
  Conversion of preferred stock
    to common stock                         (     223)

  Payment of preferred stock dividends
    in common shares                            5,255                       5,258

Net loss                                                 (  616,048)   (  616,048)
                                          ------------  ------------  ------------

Balances, June 30, 2000                     4,428,527    (2,051,869)    2,389,683

  Common stock issued for
    - cash                                     69,825                      70,000
    - exercise of options                      18,781                      18,819
    - services                                206,547                     206,718
    - stock subscription                       94,762                      95,000

  Issuance of stock options and warrants      182,359                     182,359

  Repurchase and cancellation of common
    stock purchased on the open market      (   2,599)                 (    2,602)

  Issuance of convertible Preferred
    Stock Series B to related party in
    connection with the acquisition of
    SCS Corporation                            28,997                      29,000

  Preferred stock dividends                               ( 102,788)   (  102,788)

  Conversion of preferred stock
    to common stock                         (     720)

  Payment of preferred stock dividends
    in common shares                            7,721                       7,731

Net loss                                                 (2,809,183)   (2,809,183)
                                          ------------  ------------  ------------

Balances, June 30, 2001                     5,034,200   $(4,963,840)  $    84,737
                                          ============  ============  ============
</TABLE>

                 See accompanying summary of accounting policies
                        and notes to financial statements


                                      F-6
<PAGE>
<TABLE>
<CAPTION>

                            HYPERDYNAMICS CORPORATION
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                   For the Years Ended June 30, 2001 and 2000


                                                      2001          2000
                                                  ------------  ------------
<S>                                               <C>           <C>
Cash flows from operating activities
  Net loss                                        $(2,809,183)  $(  616,048)
Adjustments to reconcile net (loss) to cash
  provided from operating activities
    Depreciation and amortization                     122,144        47,221
    Loss on disposition of assets                      20,149        12,315
    (Gain) on sale of revenue sharing agreement    (    3,500)   (   21,000)
    (Gain) on sale of discontinued operations                    (  127,065)
    Impairment loss on assets received from sale
      of subsidiary and revenue interest               32,365       104,998
    Writedown of capitalized intangible asset                         6,755
    Lawsuit costs payable in stock                    886,240
    Options and warrants issued                       182,359        25,106
    Stock issued for services                         206,719
    Loss from discontinued operations                                   568
Changes in assets and liabilities, net of
  acquisition:
    Accounts receivable, net                          506,504    (  852,506)
    Inventory                                      (    6,362)   (  173,687)
    Other current assets                               40,670    (   84,286)
    Accounts payable and accrued expenses          (   59,377)      353,343
                                                  ------------  ------------
     NET CASH USED BY OPERATING ACTIVITIES         (  881,272)   (1,324,286)
                                                  ------------  ------------
Cash flows from investing activities
  Purchases of property and intangibles            (  702,292)   (    9,336)
  Cash investment in discontinued operations                     (    6,566)
  Cash assumed in acquisition                           2,000
  Proceeds from sale of revenue interest                             85,500
  Collection of note receivable                       400,000
  Security deposits paid                           (    2,800)   (   20,632)
  (Increase) in restricted cash                                  (  436,300)
                                                  ------------  ------------
     NET CASH USED BY INVESTING ACTIVITIES         (  303,092)   (  387,334)
                                                  ------------  ------------
Cash flows from financing activities
  Proceeds from new installment debt                  104,444
  Payments on installment debt                     (    5,468)
  Proceeds from sale of common stock                  183,819       228,498
  Less: stock subscription receivable              (   95,000)
  Proceeds from sale of preferred stock                           2,604,190
  Purchases of common stock                        (    2,601)   (  143,833)
                                                  ------------  ------------
     NET CASH PROVIDED BY FINANCING ACTIVITIES        185,194     2,688,855
                                                  ------------  ------------
Net increase (decrease) in cash                    (  999,170)      977,235
                                                  ------------  ------------
</TABLE>

                 See accompanying summary of accounting policies
                        and notes to financial statements


                                      F-7
<PAGE>
<TABLE>
<CAPTION>
                            HYPERDYNAMICS CORPORATION
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                   For the Years Ended June 30, 2001 and 2000


                                     2001         2000
                                 ------------  ----------
<S>                              <C>           <C>
Net increase (decrease) in cash  $(  999,170)  $  977,235

    CASH AT BEGINNING OF PERIOD    1,033,435       56,200
                                 ------------  ----------
    CASH AT END OF PERIOD        $    34,265   $1,033,435
                                 ============  ==========

SUPPLEMENTAL DISCLOSURES
  Interest paid in cash          $     3,549

NON-CASH TRANSACTIONS
  Reclassification of inventory
   to property and equipment     $   202,687
</TABLE>

                 See accompanying summary of accounting policies
                        and notes to financial statements


                                      F-8
<PAGE>
                            HYPERDYNAMICS CORPORATION
                          NOTES TO FINANCIAL STATEMENTS

NOTE  1  -  SIGNIFICANT  ACCOUNTING  POLICIES

Nature  of  business.  Hyperdynamics  Corporation  ("Company"),  is  a  Delaware
corporation  formed  in  March  1996.  The  Company  provides  outsourcing  of
information  technology  services  and  through  its newly-acquired wholly-owned
subsidiary,  SCS  Corporation, the conversion of seismic data from tape media to
modern  media,  such as DVD computer technology.  Formerly, the Company sold and
supported  computer  hardware  and software through its wholly-owned subsidiary,
MicroData  Systems,  Inc.  The  fiscal  year-end  is  June  30.

Basis  of  presentation.  The  consolidated  financial  statements  include  the
accounts  of  the Company and its wholly-owned subsidiaries, SCS Corporation and
IThost.net  Corporation  (formerly  -  MicroData  Systems,  Inc.)  Significant
inter-company  accounts  and  transactions  have  been  eliminated.

Estimates  and  assumptions.  Preparing  financial statements in conformity with
generally  accepted  accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets, liabilities, revenue
and  expenses  at  the balance sheet date and for the period then ended.  Actual
results  could  differ  from  these  estimates.

Cash  and  cash equivalents include all highly liquid investments purchased with
original  maturities  of three months or less.  Restricted cash is a certificate
of  deposit at a bank to back a letter of credit supporting the construction and
the  lease  commitment for the Company's new facility.  The CD matures on May 9,
2002  and  accrues  interest  at  3.75%  annually.  The  restriction  is removed
pro-rata for the next 5 years of the lease, so 15% may be converted to operating
cash  before  the  next  year-end.

Revenue recognition.  Revenue from tape conversions, consulting, and information
technology  services  are  recognized  when services are rendered.  Revenue from
hardware  and  software  sales  are  recognized  when  goods  are  shipped.

Advertising  costs  are  expensed  as  incurred.

Accounts  receivable are written down to the estimated collectible amount in the
opinion  of  management.

Inventory  consists of computer hardware and software and is stated at the lower
of  cost  or  market  using  the  first-in  first-out  basis  (FIFO).

The  stock  subscription receivable was subscribed in May 2001 and was collected
in  August  2001  and  accordingly  is  reported  as  an  asset.

Property  and  Equipment.  The  Company  calculates  depreciation  for financial
reporting using the straight-line method over the useful lives of the assets.  A
summary  of  property  and  equipment  is  as  follows:

     Computer  equipment  and  software      3  years     $  237,714
     Office  equipment  and  furniture       5  years         66,407
     Other  equipment                        5  years         80,392
     Leasehold  improvements                10  years        564,852
                                                          -----------
       Total cost                                            949,365
     Less: accumulated depreciation                         (113,682)
                                                          -----------
       Net carrying value                                 $  835,681
                                                          ===========


                                      F-9
<PAGE>
Amortization  is  calculated  on  a customer list using the straight-line method
over  5  years.

The  Company  follows  Statement  of  Financial  Accounting  Standards  No. 121,
Impairment  of  Long-Lived  Assets,  by  reviewing  such  assets  for impairment
whenever events or changes in circumstances indicate that the carrying amount of
an  asset  may  not  be  recoverable.

Accounts  payable  and  accrued  expenses:

     Accounts  payable              $229,635
     Accrued  rent                   123,658
     State  sales  tax  payable        5,809
                                    --------
                                    $359,102
                                    ========

Accrued rent represents the pro-rata portion rent expense over the 10-year lease
term  incurred  during  the  initial  6-month  free  rent  period.

Income  taxes are computed using the tax liability method of accounting, whereby
deferred  income  taxes  are  determined  based on differences between financial
reporting  and  tax  bases  of assets and liabilities and are measured using the
enacted  tax  rates  that  will  be  in  effect  when  the  differences reverse.

Startup  costs  for ITHost.net consist of training costs for the new information
technology  center  that  opened  in  fiscal  2001.  The IT center operates as a
information  services  provider  to  businesses  who  wish  to  outsource  their
technology  needs.

Stock  options  issued  to  employees  are accounted for by following Accounting
Principles  Board  Opinion No. 25, Accounting for Stock Issued to Employees, and
related  interpretations,  and  by  following  the  disclosure  requirements  of
Statement  of Financial Accounting Standards No. 123, Accounting for Stock Based
Compensation,  which  established  a  fair-value-based  method of accounting for
stock-based  compensation  plans.  Stock  options issued to other than employees
are  accounted  for by following Statement of Financial Accounting Standards No.
123.

Loss  per  share is reported under Statement No. 128 of the Financial Accounting
Standards  Board  ("FAS  128"),  which  requires  the  calculation  of
basic  and  diluted  earnings  per  share.  Basic earnings per share exclude any
dilutive  effects  of  options,  warrants,  and convertible securities.  Diluted
earnings  per  share  are  not  shown  here  because  such  effect  would  be
anti-dilutive.

Reclassifications  of  certain  prior year amounts were made to conform with the
current  year  presentation.

NOTE  2  -  ACQUISITION  OF  SCS  CORPORATION

On  May  31,  2001,  the  Company acquired 100% of the outstanding shares of SCS
Corporation (formerly ASACK Corporation) from DJX, Inc., a company controlled by
an  affiliate.  SCS  was  acquired  by  the issuance of 2,725 shares of Series B
Convertible  Preferred Stock, which had a market value of $2,725,000, based upon
the  value  of the common shares at $1 per share and the number of common shares
to  be received upon conversion at 1,000 common shares for each preferred share.
SCS was formed to acquire the assets of Seacon Computer Systems, Inc. ("Seacon")
on  April  1,  2001 (see below), which consisted of the inventory and equipment.


                                      F-10
<PAGE>
The  transaction  is  accounted  for as an asset transfer from a control person;
thus the business acquired was recorded at DJX's purchase price of $27,000 under
the  purchase method of accounting and the premium paid to DJX is reflected as a
capital  distribution, netted against the preferred stock market valuation.  The
results  of  Company consolidated operations contain the results of Seacon since
May  31,  2001.

The  assets  acquired  and  liabilities  assumed at May 31, 2001 are as follows:

     Assets
       Cash                                       $    2,000
       Inventory  and  equipment                      27,000
                                                  ----------
     Net  assets  assumed                             29,000
     Premium  paid  over  net  assets  assumed     2,696,000
                                                  ----------
     Purchase  price                              $2,725,000
                                                  ==========

SCS  was  previously  a wholly-owned subsidiary of DJX, Inc. and has had minimal
activity  from  inception,  March  15,  2001.

On  April  1, 2001, SCS had purchased the assets of Seacon for 100,000 shares of
Company  stock  valued  at  the  market price of $.27 and personally owned by an
affiliate  and a $700,000 note payable quarterly and only from 50% of any future
profits  with  no  interest.  Because  the $700,000 note is wholly contingent on
future profits, the assets purchased are recorded at the $27,000 stock valuation
only.

The following table reflects the results of operations on a proforma basis as if
the  acquisition  had  been  completed  on  July  1,  1999:

                                                     2001            2000
                                                 ------------    -------------
     Net  revenues                               $   539,013     $  2,367,281
     Income  (loss)
       -  available  to  common  shareholders
          from  continuing  operations            (3,018,303)      (1,115,203)
       -  from  discontinued  operations                              126,497
                                                 ------------    -------------
     Net  loss                                   $(3,018,303)    $   (988,706)
                                                 ============    =============
     Earnings  per  common  share
       -  available  to  common  shareholders
          from  continuing  operations           $      (.22)    $       (.09)
       -  from  discontinued  operations                         $        .01
                                                 ------------    -------------
     Net  loss  per  common  share               $      (.22)    $       (.08)
                                                 ============    =============


NOTE  3  -  SALE  OF  REVENUE  INTEREST  IN  SIERRA  NET

In  May  1997,  the  Company  purchased  a  revenue  interest  in the Sierra-Net
subsidiary of Internet Finance and Equipment, Inc. (IF &E).  In March 2000, IF &
E  sold  Sierra-Net  to  M & A West, Inc. (MAWI) resulting in the receipt by the
Company  of  $85,500  and  29,230  MAWI  shares.  In  conjunction  with a mutual
settlement  and  release  between  MAWI  and IF & E, the MAWI shares issued were
returned  to  MAWI  and  Sierra-Net  was  returned  to  IF  &  E.  The  previous
arrangement between IF & E and the Company, which provides that the Company will
receive 4% of the revenues or 19% of the proceeds from the sale of Sierra-Net or
its  assets  was  restored.  Because  of  the  uncertainty that the Company will
receive  additional  income  from this investment, the revenue interest has been
written  down  to  $0  as  of  June  30,  2001.


                                      F-11
<PAGE>
NOTE  4  -  INSTALLMENT  DEBT

The  Company  is  obligated  on three capital leases payable in monthly payments
totaling  $2,352 including principal and interest ranging from 10 - 21% APR, and
secured  by  electrical  equipment,  a  burglar  alarm  and  a telephone system.
Principal  maturities  are  $17,685  in fiscal 2002, $19,796 in 2003, $22,179 in
2004,  $24,872  in  2005,  and  $14,447  in  2006.


NOTE  5  -  LETTER  OF  CREDIT

The Company renewed its letter of credit for $436,300 with Frost Bank, which now
expires  on  May  10, 2002.  The purpose of the letter of credit is to guarantee
the  lease  payments on the Company's new office space.  The letter of credit is
guaranteed by security interest in a certificate of deposit with Frost Bank that
may  not  be  redeemed  until the letter of credit expires.  There were no draws
against  this letter of credit as of June 30, 2001 nor as of September 12, 2001,
the  date  of  our  report.


NOTE  6  -  INCOME  TAXES

Income  taxes are not due since the Company has had losses since inception.  The
Company  has  deductible  net operating losses of $1,970,000 and $589,000 in the
years  ended  June  30,  2001  and 2000, respectively.  As of June 30, 2001, the
Company  had approximately $3,932,000 in unused net operating loss carryforwards
which  expire  $640,000 in 2012, $548,000 in 2013, $185,000 in 2019, $589,000 in
2020,  and  $1,970,000  in  2021.

Internal  Revenue  Section  382 restricts the ability to use these carryforwards
whenever  an  ownership  change as defined occurs.  The Company incurred such an
ownership  change  on  January 14, 1998 and on June 30, 2001, As a result of the
first  ownership change, the Company's use of net operating losses as of January
14,  1998  of $949,000 are restricted to $151,000 per year.  The availability of
losses  of  $2,983,000  since  that  date  is  restricted  to $784,000 per year.


NOTE  7  -  PREFERRED  STOCK

Series A Convertible Preferred Stock was issued in January 2000 for net proceeds
of  $2,604,190.  It is convertible into the Company's common stock at a price of
the  lower  of  the  trading price when purchased at $5.25 or 80% of the current
5-day  trading average.  All or any of the stock may be converted at any time at
the  holder's  option, and all shares outstanding as of January 30, 2002 will be
automatically  converted.  This  series  is non-voting and pays dividends of 4%,
payable at conversion in either cash or shares of common stock, at the Company's
option.

During  the year ended June 30, 2001, $93,705 in dividends were earned, of which
$7,731  were  paid  with  the  issuance  of  10,000  shares  of  common stock in
conjunction  with the conversion of 615 shares of the preferred stock to 721,449
shares  of  common  stock.  The  remaining  dividends earned, $85,974, have been
accrued,  resulting  in  total  accrued  dividends  of  $130,800.  No  further
conversions  have  occurred.


                                      F-12
<PAGE>
Series B Convertible Preferred Stock.  The Company issued 2,725 shares of Series
B  Preferred stock in conjunction with the acquisition of SCS Corporation on May
31, 2001 (see Note 2).  The stated value of the Series B stock is $1,000 and the
par  value  is  $.001.  Each Series B share may vote 7,408 shares for a total of
20,186,800  votes.  The  shares are convertible to common stock at the lesser of
$.135  or 50% of the current 5-day average trading price.  Series B stockholders
are  entitled  to a 4% cumulative dividend on the stated value, which is payable
only  upon conversion of the preferred stock.  Dividends may be paid in stock or
cash  at the Company's option.  Dividends accrued during the year ended June 30,
2001  totaled  $9,083.


NOTE  8  -  COMMON  STOCK

$70,000  was  collected for the issuance of 175,000 shares of common stock.   An
additional  $95,000  was collected in August 2001 in conjunction with stock that
was  subscribed  in May 2001.  In connection with the stock sales, warrants were
issued  to  the investors as follows: 206,250 warrants with an exercise price of
$1.00 and 206,250 warrants with an exercise price of $2.00.  The warrants expire
during  July  and  August  2003.

37,638  shares  of  common stock were issued pursuant to the exercise of options
for  cash  during  the  year  ended  June  30,  2001.

171,038  shares were issued for services valued at contemporaneous market prices
for  a  total  of  $206,719.

731,499  shares of common stock were issued in connection with the conversion of
Series  A  preferred  stock  and  payment  of  dividends  thereon.

On  April  18, 2000, the Board authorized the repurchase of up to 500,000 shares
of  Company  stock  on the open market at a price not to exceed $2.50 per share.
Between  that  date  and  June  30,  2000, 68,500 shares had been repurchased at
prices  ranging  from  $2.50  to  $1.50 per share, for a total cost of $143,833.
These  shares  have  been  deemed  cancelled as of June 30, 2000.  An additional
2,500  shares  were  repurchased during the first quarter of the year for $2,601
and  they  have  been  deemed  canceled  as  of  June  30,  2001.


NOTE  9  -  STOCK  OPTIONS  AND  WARRANTS

Beginning  with  fiscal 1997, the Company adopted the disclosure requirements of
FASB  Statement  123,  Accounting  for  Stock  Based  Compensation  Plans.  The
Company's  Stock  Option Plan provides for the grant of non-qualified options to
directors,  employees  and  consultants  of  the  Company, and opportunities for
directors,  officers, employees and consultants of the Company to make purchases
of  stock  in  the Company.  In addition, the Company issues stock warrants from
time to time to employees, consultants, stockholders and creditors as additional
financial  incentives.  The  plans and warrants issuance are administered by the
Board  of  Directors  of  the  Company,  who  have
substantial  discretion  to  determine  which  persons,  amounts,  time,  price,
exercise  terms, and restrictions, if any.  Options differ from warrants in that
the options awards are immediately exercisable and are assignable.  In contrast,
warrants  have  employment  termination  restrictions,  vesting  periods and are
non-transferable.

The  Company uses the intrinsic value method of calculating compensation expense
for  employees,  as  described and recommended by APB Opinion 25, and allowed by
FASB Statement 123. During the year ended June 30, 2001, no compensation expense
was  recognized  for  the  issuance  of  options and warrants, because no option
prices  were  below  market  prices at the date of grant.  During the year ended
June  30,  2000, $25,106 in compensation expense was recognized for the issuance
of 177,015 options and warrants ranging in exercise price from $.75 to $1.25 per
share,  because  these  option  prices  were  below market prices at the date of
grant.  Options  and  warrants to purchase 6,075,500 shares of common stock that
had  no  intrinsic value were issued to employees during the year ended June 30,
2000.


                                      F-13
<PAGE>
During  the  year  ended  June  30, 2001, the Company issued 581,181 options and
warrants  to consultants whose stock-based compensation must be recorded at fair
value  pursuant  to FASB Interpretation Number 44.  The compensation cost record
for  these  options  and warrants was $182,359 based on the Black-scholes option
pricing  model  as  suggested  by  FASB  Statement  123.

Had  compensation  cost  for  the  Company's  stock-based  compensation plan for
employees  been determined based on the fair value at the grant dates for awards
under  those  plans  consistent  with  the  Black-Scholes  option-pricing  model
suggested  by  FASB  Statement  123, the Company's net losses and loss per share
would  have  been  increased  to  the  pro  forma  amount  indicated  below:

         (in thousands)                        2001             2000
                                           ------------     ------------
     Net loss available for common
       shareholders      -As  reported     $(2,911,971)     $(  666,132)
                         -Pro  forma        (3,728,073)      (2,516,212)
     Net loss per share  -As  reported     $(     0.21)     $(     0.05)
                         -Pro  forma        (     0.27)      (     0.20)

The  weighted  average  fair  value of the stock options granted during 2001 and
2000  was  $.58  and  $1.26,  respectively.  Variables used in the Black-Scholes
option-pricing  model  include  (1)  5.0%  risk-free interest rate, (2) expected
option life is the actual remaining life of the options as of each year end, (3)
expected  volatility is the actual historical stock price fluctuation volatility
and  (4)  zero  expected  dividends.

Summary  information  regarding  options  and  warrants  is  as  follows:

                                        Weighted                   Weighted
                                        average                    average
                            Options   Share Price    Warrants    Share Price
                           ---------  ------------  -----------  ------------
Year ended June 30, 2000:
Outstanding, 1999           870,479   $        .90     425,850   $        .59
  Granted                   267,015           1.18   1,017,500           3.43
  Exercised                (372,145)           .68  (  100,000)           .50
  Expired                  (134,515)          1.21  (   72,500)          1.02
                           ---------  ------------  -----------  ------------
Outstanding at
  June 30, 2000             630,834           1.47   1,270,850           3.57

Year ended June 30, 2001:
  Granted                   346,181            .61   6,722,500            .52
  Exercised                ( 47,638)           .60
  Expired                  (308,241)           .60    (145,850)           .66
   Forfeited               (115,000)          4.72
                           ---------  ------------  -----------  ------------
                            506,136   $        .76   7,847,500   $       1.01
                           =========  ============  ===========  ============

     Options  outstanding  and  exercisable  as  of  June  30,  2001:


                                      F-14
<PAGE>
                - - Outstanding - -   Exercisable
                   Number  Remaining       Number
Exercise Price  of Shares       life    of Shares
                ---------  ---------  -----------
    $  .50        271,181    1 years      271,181
       .80        125,000    2 years      125,000
      1.25         87,455    0 years       87,455
      1.25          6,000    1 years        6,000
      2.00         16,500  1/2 years       16,500
                ---------             -----------
                  506,136                 506,136
                =========             ===========

     Warrants  outstanding  and  exercisable  as  of  June  30,  2001:

                - - Outstanding - -   Exercisable
                   Number  Remaining       Number
Exercise Price  of Shares       life    of Shares
                ---------  ---------  -----------
    $  .40      1,200,000   3  years    1,200,000
       .40      1,600,000   4  years            0
       .40      1,600,000   5  years            0
       .40      1,600,000   6  years            0
       .50        250,000   1  years      250,000
      1.00        206,250   2  years      206,250
      1.50        175,000   0  years      175,000
      1.50         75,000   2  years       75,000
      1.50        275,000   1  years      275,000
      1.50         60,000   2  years       30,000
      2.00        206,250   2  years      206,250
      5.91        300,000   4  years      300,000
      7.09        300,000   4  years      300,000
                ---------             -----------
                7,847,500               3,017,500
                =========             ===========


NOTE  10  -  SEGMENT  DISCLOSURES

SFAS  No.  131.  "Disclosures  about  Segments  of  an  Enterprise",  requires
disclosures  of  information  about  operating  segments.  Beginning  with  the
acquisition of SCS, the Company was operating in two reportable segments: the IT
segment ("HYPD") and the Seismic Data Conversion segment ("SCS").  HYPD provides
Information  Technology  services  as  described at its website at www.hypd.com.
                                                                   ------------
SCS  converts  seismic  data from tapes to computer media, for example DVD.  The
accounting  policies  for  the  segments  are the same as those described in the
summary  of  significant accounting policies.  The Company evaluates performance
based  on  profit  or  loss  from  operations before income taxes.  There are no
intersegment  sales  and  transfers.  The  following  table  summarizes  certain
balance  sheet  and  income  statement  data  as  required  by  SFAS  131:

                             HYPD         SCS        Totals
                         ------------  ---------  ------------
  Revenues               $   374,683   $ 51,918   $   426,601
  Cost of sales           (  873,878)   (45,660)   (  919,538)
  Selling, general, and
    administrative        (2,142,762)   (50,515)   (2,193,277)
  Depreciation &
    amortization          (  122,094)   (    50)   (  122,144)
  Loss on equipment
    Retirement            (   20,149)              (   20,149)
  Interest income             75,495                   75,495
  Interest expense        (    3,549)              (    3,549)
  Other expense           (   52,622)              (   52,622)
                         ------------  ---------  ------------
  Net loss               $(2,764,876)  $(44,307)  $(2,809,183)
                         ============  =========  ============

  Segment assets         $ 1,501,929   $ 67,010   $ 1,568,939
  Expenditures for
    long-lived assets        903,793      1,185       904,978


                                      F-15
<PAGE>
The Company had one customer with revenues which comprised 39% of total revenues
and  one  vendor  with  purchases  comprising  16%  of  total  purchases.

Concentrations.  The  seismic data media conversion segment operates exclusively
in  the  oil  and  gas  industry.


NOTE  12-  COMMITMENTS  AND  CONTINGENCIES

The  Company  is liable on its 10-year office lease as follows: The base monthly
rent  is  $0  for  months  1-6,  $20,774 for months 7-54, and $24,114 for months
55-120,  beginning November 1, 2000.  Additional common area maintenance charges
will  be  assessed.  At  June 30, 2001, future minimum payments are $249,288 per
year  in  fiscal  years  2002-2004,  $252,328 in year 2005, $289,364 per year in
years  2006-2010,  and 120,568 in 2011.   Lease expense for the years ended June
30, 2001 and 2000 totaled $184,567 and $36,678, respectively.  The Company has a
termination option that may be exercised on the 60th month of the lease.  If the
termination  option  is exercised the Company will be released from the lease on
the  69th  month.

The  Company  is obligated on a variety of agreements with AT&T.  The company is
purchasing  bandwidth for $10,299 per month for 5 years and is reselling certain
telephone  service  with  minimum annual revenue commitments of $42,000 per year
over  three  years.

The  Company  is  obligated  to pay $7,000 per month for two years pursuant to a
service  contract  with  the  managers  of  the  SCS  subsidiary.


NOTE  13  -  LAWSUIT  COSTS  PAYABLE  IN  STOCK  AND  LEGAL  PROCEEDINGS

The  Company  is  defending  a  lawsuit  filed  by one of the Series A preferred
shareholders arising from the Company's failure to deliver common stock pursuant
to  conversion  requests.  The preferred shareholder seeks a judgment to require
the  Company  to  resume  conversion of its preferred stock. The Company did not
deliver  the stock because the shareholder had breached the selling provision of
its  agreement  with  the  Company  and the Company is suing the shareholder for
damages  arising  from the shareholder's breaches of the agreement.  The Company
believes the potential for damages to be assessed in favor of the shareholder is
possible  but  not  probable;  accordingly,  there  is  no  reserve  accrued.

In  August  2001  the  Company  entered  a  contingency agreement for 50% of any
recovery  with  an  attorney who is representing the Company in its counterclaim
against that same preferred shareholder.  The claim alleges that the shareholder
engaged  in  securities violations that damaged the Company.  In connection with
the  suit,  the  Company  also  entered into an agreement by which 1,015,000 S-8
shares  will  be issued to another attorney who will provide litigation support.
The  shares  will  be used to fund the litigation support and are non-refundable
after  October  17,  2001.  These  services  are  valued  at  $.80 per share, or
$812,000,  and  are  accrued  as  of  June  30,  2001.

An  additional $182,053 of legal costs payable in stock was incurred pursuant to
settlements  made  with  two  consultants  of  the  Company; as of June 30, 2001
$107,813  has  been  paid  and  $74,240  is  accrued.


                                      F-16
<PAGE>
NOTE  14  -  RELATED  PARTY  TRANSACTIONS

Related  party  transactions include the acquisition of SCS as described in Note
2,  and  payments  to  the  CEO's  brother  for  consulting services as follows:
$75,000 cash and issuance of options to purchase 206,181 shares of stock at $.50
and  125,000  shares  at  $.80.


NOTE  15  -  ECONOMIC  RISK

In early September 2001, the Company obtained a $1.7 million sub-contract with a
contractor  for  a  major oil company to provide equipment, software and knowhow
for  a  seismic  data media storage conversion project.  As of October 12, 2001,
the  first  payment to initiate work has still not been received.  This contract
will  likely  produce  more  than  half  of  fiscal  2002's  gross  revenues.

Also  in  September 2001, the Company agreed in principle with certain investors
to  provide  up  to  $750,000  in new equity financing.  No monies have yet been
received.

Should  both  the  contract  and the new equity financing fail, the Company will
likely default on its office lease and have substantial personnel layoffs.  Both
events  are  considered  likely  to  succeed  by  management.


                                      F-17
<PAGE>