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

                                   FORM 10-KSB

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

                   For the fiscal year ended December 31, 2001

                         Commission file number 1-12350

                                FuelNation Inc.
                                ----------------
                 (Name of Small Business Issuer in its Charter)

           Florida                                              65-0827283
           -------                                              ----------
(State or Other Jurisdiction of                              (I.R.S. Employer
Incorporation or Organization)                               Identification No.)

                                4121 SW 47th Ave.
                                 Davie, Florida
                                 --------------
                    (Address of Principal Executive Offices)

                                      33314
                                      -----
                                   (Zip Code)

           1700 North Dixie Highway, Suite 125, Boca Raton, Fla 33432
           ----------------------------------------------------------
                 (Former Address of Principal Executive Offices)

                                 (954) 587-3775
                                  -------------
                           (Issuer's Telephone Number)

           Securities registered under Section 12(b) of the Act: None

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

                     Common Stock, par value $.01 per share
                     --------------------------------------
                                (Title of Class)

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

Check if disclosure  of delinquent  filers in response to Item 405 of Regulation
S-B is not contained in this form, and no disclosure  will be contained,  to the
best  of  the  registrant's   knowledge,  in  definitive  proxy  or  information
statements  incorporated  by  reference  in Part III of this Form  10-KSB or any
amendment to this Form 10-KSB. X

                          (Continued on Following Page)



<PAGE>



State issuer's revenues for its most recent fiscal year. $0.00

State the  aggregate  market  value of the voting  stock held by  non-affiliates
computed by reference  to the price at which the stock was sold,  or the average
bid and asked  prices of such stock,  as of a specified  date within the past 60
days: As of April 15, 2002: $2,903,021.

State the number of shares outstanding of each of the issuer's classes of common
equity,  as of the latest  practicable  date:  As of April 15, 2002,  there were
180,240,361 shares of our common stock issued and outstanding.

                                                                               2

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                                TABLE OF CONTENTS

                            FORM 10-KSB ANNUAL REPORT

                                 FUELNATION INC.
                                                                            PAGE
                                                                            ----

Facing Page
Index
PART I
Item 1.    Description of Business..........................................  4
Item 2.    Description of Property.......................................... 21
Item 3.    Legal Proceedings................................................ 22
Item 4.    Submission of Matters to a Vote of
               Security Holders............................................. 23

PART II
Item 5.    Market for the Registrant's Common Equity
               and Related Stockholder Matters.............................. 23
Item 6.    Management's Discussion and Analysis of
               Financial Condition and Results of
               Operations................................................... 24
Item 7     Financial Statements............................................. 32
Item 8.    Changes in and Disagreements on Accounting
               and Financial Disclosure..................................... 53

PART III
Item 9.    Directors, Executive Officers, Promoters
               and Control Persons, Compliance with
               Section 16(a) of the Exchange Act............................ 53
Item 10.   Executive Compensation........................................... 56
Item 11.   Security Ownership of Certain Beneficial
               Owners and Management........................................ 57
Item 12.   Certain Relationships and Related
               Transactions................................................. 58

PART IV
Item 13.   Exhibits and Reports of Form 8-K................................. 59


SIGNATURES.................................................................. 62



                                                                               3

<PAGE>



                                     PART I

ITEM 1.  DESCRIPTION OF BUSINESS

     FuelNation  Inc.  ("we," "us," "our,"  "FuelNation"  or the "Company") is a
Florida-based  development  stage  corporation  engaged  in the  development  of
providing  real-time   e-commerce   communications  and  energy  services.   Our
operations are conducted  through  strategic  alliances,  which  principally are
engaged  in  advanced  technology  and  services  solutions  for  the  petroleum
marketing industry, i.e., oil companies, marketers, transports, gas stations and
convenience  stores  worldwide,  and the  development  of one of the worlds most
integrated  communications platform for the petroleum industry. We intend to use
Broadband  that  delivers  data to remote  stations at speeds  reaching  45Mbps,
satellite  technology,  global  positioning system (GPS) with real-time tracking
and  path  logging  of  delivery   vehicles.   We  have  developed  the  R2R(sm)
communications  technology which allows multiple point of sales,  tank monitors,
global  positioning  system,  VSAT,  wireless  PDA  devices,   Internet  phones,
automated teller machines, back office software,  price signs and numerous other
equipment  manufacturers  to integrate and  seamlessly  exchange data in an open
architecture environment.

     We  believe  that the value of our  product  is driven  from many  factors,
including;  economical installation,  customizable,  rapid scalability,  24 hour
help desk,  dependable hardware connection,  no setup or programming at site, no
equipment  purchases,  centralized and scalable main frame  database,  automated
polling and populating of data from existing hardware,  automated  population of
existing software, open architecture  programming,  real time reporting and many
more. Our core operation's are fueled by the continued  employment and retention
of talented  programmers and their abilities to write complex and  multi-tasking
code to speak to virtually all current data generating  equipment,  networks and
software packages simultaneously.  Our programmers have successfully written the
programming  code that  communicates  to most of the top  hardware  and software
suppliers for this  industry.  During the past two years,  we have installed our
product for no charge at several  well-established  leading companies during the
development  process.  In exchange for the companies  working with us during our
development  process, our programmers have been granted complete access to their
existing management,  networks,  supply chain,  vendors, and service contractors
for valuable industry knowledge and guidance.  The access to the existing talent
and knowledge to this industry has been  indispensable  for our  development and
eventual success in the industry.  All of this development and valuable industry
knowledge and guidance has lead us to the  introduction of our service  offering
and the company's  flagship product,  a complete network  management system from
rack to retail ("R2R(sm) that utilizes  broadband and wireless  technology.  The
remotely connected system, accessible via any web enabled device,

                                                                               4

<PAGE>



allows oil producers,  major oil  companies,  petroleum  marketers,  transports,
convenience  stores and major  franchises  to collect  and  integrate  data from
several  pieces  of  equipment  simultaneously,  track  deliveries  with  global
positioning  systems,  forecast fuel inventory  needs,  manage  electronic  safe
deposits,  track detailed retail sales,  automate rebates,  enhance security and
shrinkage controls, automate payroll functions, monitor product costs and adjust
pricing in "real-time." The R2R(sm) solution increases profitability and reduces
costs.  We believe that our advantage  lies in the multiple  solutions  achieved
through the utilization of the non-proprietary  programmable router which solves
the hardware  connectivity issue with a broadband satellite link-up connected to
the tank monitors, point-of-sales cash registers, and many other data generating
devices.  The result is a seamless solution enabling efficient economic controls
without the current manual administrative headaches.

     Marketed under the service mark R2R(sm) ("Rack to Retail"), this technology
automates and  streamlines  the data  collection  processes for  centralization,
retrieval and  integration of inventory,  financial and  accounting  information
throughout the entire industry.

RISK FACTORS

     PROSPECTIVE INVESTORS SHOULD CAREFULLY CONSIDER THE FOLLOWING RISK FACTORS,
TOGETHER  WITH THE OTHER  INFORMATION  CONTAINED  IN THIS ANNUAL  REPORT ON FORM
10-KSB,  IN  EVALUATING  OUR  COMPANY AND OUR  BUSINESS  BEFORE  PURCHASING  OUR
SECURITIES.  IN PARTICULAR,  PROSPECTIVE  INVESTORS SHOULD NOTE THAT THIS ANNUAL
REPORT ON FORM 10-KSB CONTAINS FORWARD-LOOKING  STATEMENTS WITHIN THE MEANING OF
SECTION 27A OF THE  SECURITIES  ACT AND SECTION 21E OF THE EXCHANGE ACT AND THAT
ACTUAL  RESULTS  COULD  DIFFER  MATERIALLY  FROM  THOSE   CONTEMPLATED  BY  SUCH
STATEMENTS.  THE FACTORS LISTED HEREIN REPRESENT CERTAIN IMPORTANT FACTORS WHICH
WE BELIEVE COULD CAUSE SUCH RESULTS TO DIFFER. THESE FACTORS ARE NOT INTENDED TO
REPRESENT A COMPLETE  LIST OF THE GENERAL OR SPECIFIC  RISKS THAT MAY AFFECT US.
IT SHOULD BE RECOGNIZED THAT OTHER RISKS MAY BE SIGNIFICANT, PRESENTLY OR IN THE
FUTURE  AND THE RISKS SET FORTH  BELOW MAY  AFFECT US TO A GREATER  EXTENT  THAN
INDICATED.

     We Have Been in the Development  Stage Since our  Reorganization in October
2000.  We  have  generated  no  revenues  and  our  loss  from   operations  was
approximately  $28.5  million for the year ended  December 31,  2001.  We have a
working capital deficiency of approximately $1.1 million as of December 31, 2001
and a deficit accumulated during our development stage thus far of approximately
$29.7  million as of December 31,  2001.  We expect to incur  additional  losses
during the time period we are reviewing and negotiating potential  opportunities
to grow our services and products.

                                                                               5

<PAGE>



     It is  anticipated  that we  will,  in all  likelihood,  sustain  operating
expenses without corresponding revenues, at least until 2003, of which there can
be no assurance.  This may result in our  incurring a net  operating  loss which
will increase continuously until we achieve profitability. Revenues and profits,
if any, will depend upon various  factors,  including  market  acceptance of our
products,  market  awareness  and  general  economic  conditions.  There  is  no
assurance  that we will achieve our  expansion  goals and the failure to achieve
such goals would have an adverse impact on us.

     Additional  Financings will be Required.  Our success is dependent upon our
ability to raise additional capital. As of the date of this Report, we have been
negotiating  the  issuance  of  $330,000,000  of  Taxable  Municipal  Bonds.  We
currently have prepared an application for the bond offering that requires us to
pay a $660,000  commitment and  application  fee. We are also required to have a
bank issue a cost of  issuance  and short fall letter of credit in the amount of
approximately  $9,900,000  which is  refundable  from the  proceeds  of the bond
issue.  We have  received a  commitment  for a cost of  issuance  and short fall
letter  of  credit,  subject  to cash  collateral.  While no  assurances  can be
provided, we are cautiously optimistic that the required cash collateral will be
raised  with the help of our  financial  advisor,  GunnAllen  Financial  and the
assistance  of our potential  purchasers,  because the monies are held in escrow
and the $9,900,000 is refundable  from the proceeds of the bond issue.  However,
there can be no assurances that our efforts in this regard will be successful.

     We are also in discussions with investment bankers and others to provide or
assist  in  providing  additional  financing.  However,  as of the  date of this
Report,  we do not  have  any  written  commitments  for any  financing,  and no
assurance can be given that we will obtain any additional financing. The failure
to infuse  additional  capital into our Company may force  management to curtail
marketing expenditures and product  introductions,  which may affect our ability
to fully implement our business plan described herein.

     Our  Success  is  Dependent  Upon  the  Management  of  Growth.  Successful
implementation  of our business  plan will expose us to  increased  competition,
greater  overhead,  marketing and support costs and other risks  associated with
entry into new  markets and  solicitation  of new  customers.  We face all risks
which are associated with any new business, such as  under-capitalization,  cash
flow problems,  and personnel,  financial and resource  limitations,  as well as
special  risks  associated  with  our  proposed  operations.  To  manage  growth
effectively,  our management  will need to implement and continue to improve and
expand operational,  financial and management information systems and to expand,
train,  motivate  and  manage  employees.  Should we be unable to manage  growth
effectively, our results of operations could be adversely affected.

                                                                               6

<PAGE>




     We Have Not Paid  Dividends on our Common Stock and do not  Anticipate  the
Payment of Dividends in the Future. No dividends have been paid on our shares of
Common Stock and management does not anticipate the payment of cash dividends in
the foreseeable future. If operations become profitable, it is anticipated that,
for the foreseeable  future,  any income received  therefrom would be devoted to
future operations and that cash dividends would not be paid to shareholders.

     The Success of Our Operations is Dependent Upon Management.  Our success is
dependent  upon the  efforts  and  abilities  of our  Chief  Executive  Officer,
Christopher  Salmonson.  The loss of the services of Mr.  Salmonson would likely
have a significant, material adverse affect on our operations. As of the date of
this Report,  we have not obtained life insurance or key man insurance  policies
for any member of management.  However,  there are no assurances that, even with
such insurance in place,  any damages incurred by us due to loss of the services
of Mr. Salmonson will be sufficient to mitigate any damages to us.

     We believe  that it will be  necessary  to increase  our  permanent  sales,
marketing  and  administrative  staff in order to implement  our business  plan.
Although  we  believe  that  necessary  additional  personnel  to  staff  us  is
available, there can be no assurance that we will be successful in assembling an
effective  staff  in a  timely  manner,  particularly  as we  face  considerable
competition  from other companies for such personnel.  There can be no assurance
that we will be able to attract and retain additional qualified  personnel,  and
any inability to do so could have a material adverse affect on us.

     Issuance of Future Shares May Dilute Investors Share Value. Our Articles of
Incorporation, as amended, authorizes the issuance of 350,000,000 Common Shares,
$.01 par value per share, and 20,000,000  Preferred  Shares,  $.01 par value per
share.  As of the date of this Report,  there are  180,240,361  shares of Common
Stock  issued  and  outstanding.  The  future  issuance  of all or  part  of the
remaining  authorized  Common  Stock may result in  substantial  dilution in the
percentage of Common Stock held by our then existing shareholders. Moreover, any
Common  Stock  issued in the future may be valued on an  arbitrary  basis by our
Board of Directors.  The issuance of shares for future  services or acquisitions
or other  corporate  actions  may have the effect of  diluting  the value of the
shares  held by  investors,  and might  have an  adverse  effect on our  trading
market.

     There is a Limited Market for Our Common Stock. Currently, our Common Stock
trades on the National  Association of Securities  Dealers  Automated  Quotation
System Over-the- Counter Bulletin Board

                                                                               7

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(the "NASDAQ  Bulletin  Board").  By its nature,  the NASDAQ Bulletin Board is a
limited  market  and  investors  may find it more  difficult  to  dispose of our
securities which are owned by them.

     Our  Common  Stock is  Classified  as a "Penny  Stock,"  which has  Adverse
Effects.  The Securities and Exchange  Commission has adopted Rule 15g-9,  which
established  the definition of a "penny stock," for purposes  relevant to us, as
any equity security that has a market price of less than $5.00 per share or with
an exercise price of less than $5.00 per share,  subject to certain  exceptions.
For any transaction  involving a penny stock,  unless exempt, the rules require:
(i) that a broker or dealer approve a person's account for transactions in penny
stocks;  and (ii) the  broker  or dealer  receive  from the  investor  a written
agreement  to the  transaction,  setting  forth the identity and quantity of the
penny  stock to be  purchased.  In order  to  approve  a  person's  account  for
transactions  in penny  stocks,  the broker or dealer must (i) obtain  financial
information  and investment  experience  and objectives of the person;  and (ii)
make a  reasonable  determination  that the  transactions  in penny  stocks  are
suitable for that person and that person has sufficient knowledge and experience
in financial  matters to be capable of evaluating the risks of  transactions  in
penny stocks.  The broker or dealer must also deliver,  prior to any transaction
in a penny stock, a disclosure  schedule prepared by the Commission  relating to
the penny stock market,  which,  in highlight  form, (i) sets forth the basis on
which the broker or dealer made the suitability determination; and (ii) that the
broker or dealer received a signed, written agreement from the investor prior to
the transaction.  Disclosure also has to be made about the risks of investing in
penny  stock  in both  public  offering  and in  secondary  trading,  and  about
commissions payable to both the broker-dealer and the registered representative,
current  quotations for the securities and the rights and remedies  available to
an  investor  in cases of fraud in penny stock  transactions.  Finally,  monthly
statements  have to be sent  disclosing  recent price  information for the penny
stock held in the account and information on the limited market in penny stocks.

     The foregoing  required  penny stock  restrictions  currently  apply to our
Common  Stock.  If our Common  Stock is ever  approved for listing on a national
stock exchange, it would have certain price and volume information provided on a
current and continuing  basis.  While it is  management's  intention to have our
Common Stock approved for trading on a national stock exchange in the future, we
currently do not qualify  under the various  listing  criteria for such listing.
There can be no assurances that any of our securities will qualify for exemption
from these  restrictions  in the future.  Because our Common Stock is subject to
the rules on penny  stocks,  the market  liquidity for our Common Stock has been
severely adversely affected.


                                                                               8

<PAGE>



History

     We were  organized  under the laws of the State of Florida  on July  6,1993
under the name International Pizza Corporation.  On October 30, 1995, we changed
our name to QPQ  Corporation,  and on November  4, 1997,  we changed our name to
Regenesis Holdings,  Inc. On October 13, 2000, we changed our name to FuelNation
Inc.

     We were originally  formed to develop and operate Domino's Pizza outlets in
the Republic of Poland, through a wholly owned subsidiary,  Pizza King Polska SP
z.o.o.  From August 1995 through  September 3, 1997,  we also  operated  medical
centers offering primary care medical services and medically  supervised  weight
loss programs, through a wholly owned subsidiary, QPQ Medical Centers, Inc.

     Pursuant to an agreement dated May 23, 1997, we transferred our interest in
Pizza King, as well as certain related assets, to an unaffiliated  party in June
1997.  Also in June 1997, we sold certain of our operating  weight loss centers,
and on  September  3,  1997,  we sold our  interest  in QPQ  Medical,  all to an
unaffiliated party.

     On March 18, 1999, we acquired all of the operating assets of NetDisc, Inc.
("NetDisc")  in  exchange  for  10,000  shares of our common  stock.  NetDisc is
engaged in Internet advertising, and developed CD Rom/Internet technology, which
directs  users to the  websites of  advertisers.  NetDisc did not  generate  any
operating  revenues for the year ended  December  31,  1999.  We assumed none of
NetDisc's  liabilities.  As of the  date of  acquisition,  NetDisc  had  work in
progress for the Road & Track magazine insert and minimal assets. At the present
time there is no activity regarding NetDisc.

     On August 8, 1997,  we affected a reverse split of our  outstanding  common
stock at the rate of 1:20,  and on  September  17,  1997,  we affected a reverse
split of our  outstanding  common stock at the rate of 1:3. The  information  in
this Report gives retroactive effect to such recapitalizations.

Triad's Acquisition of a Controlling Interest in our Company

     On October 13, 2000, Triad Petroleum, LLC ("Triad") and the owners of Triad
Petroleum,  LLC as a group  acquired  96% of the  voting  equity of our  company
pursuant  to  the  terms  of  a  Share  Sale  and  Contribution  Agreement  (the
"Agreement") dated September 14, 2000. According to the Agreement,  we agreed to
issue a total of 94,000,000 shares of common stock and 5,000,000 shares of newly
designated  Series D Preferred  stock,  convertible  into  50,000,000  shares of
common  stock,  in exchange  for the  assignment  of all of the  rights,  title,
interest,  marketing rights, patent rights, royalty rights, and any other rights
in the Intellectual Property

                                                                               9

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and technology,  and any related  trademarks and service marks (or  applications
made thereby) Triad may have had with regard to said Intellectual Property. As a
result,  we currently are a development  stage company which  provides real time
e-commerce communications and energy services.

     In  connection  with the  closing  of the  Triad  transaction,  our  former
chairman  of  the  Board  of  Directors,  Russell  Adler,  placed  approximately
1,260,000  shares of our common stock owned by him into an escrow  account.  The
purpose of the escrow account was to ensure the  satisfaction  of certain of our
pre-closing  liabilities,  as well as any  claims  asserted  against  us for the
issuance  of  shares  of  our  common  stock  (provided  that  such  pre-closing
liabilities  or claims arise out of certain  transactions  entered into prior to
October  13,  2000).  On October  25,  2000,  we used all of the  proceeds  of a
$340,000  payment  from  Triad to  satisfy a portion  of such  liabilities  and,
pursuant  to the terms of the  escrow  agreement  with Mr.  Adler,  we  received
340,000 shares of our common stock for cancellation.  Mr. Adler has the right to
use any of these  shares held in escrow to settle  creditors  claims at any time
prior to our settling such claims. In addition, prior to our selling Mr. Adler's
shares to a third party or using Mr. Adler's shares to settle claims,  Mr. Adler
has  forty-eight  hours to purchase such shares on the same terms and conditions
as such third  party  sale,  except for the  $340,000  of claims  that have been
settled.  As of December 31, 2000,  an additional  410,000  shares were released
from  escrow in order to  satisfy  third  party  claims  for our  common  stock.
Approximately 500,000 shares remained in escrow 12 months after the closing date
and were released back to Russell Adler. As of December 31, 2001,  approximately
$149,500 of liabilities of Regenesis  remained  outstanding  that we are left to
pay and settle.

     In November 2000,  Triad converted  5,000,000  shares of Series D Preferred
Stock  into  50,000,000  shares of  common  stock.  In  October  2000,  we filed
amendments  to our Articles of  Incorporation,  changing our name to  FuelNation
Inc. and increasing the number of authorized  shares to 350,000,000  shares from
100,000,000  shares and increasing the number of authorized  shares of preferred
stock to 20,000,000  shares from 10,000,000  shares. No changes were made to the
par value per share of the common or preferred stock.

     In May  2000,  Triad,  one of our  majority  shareholder,  entered  into an
agreement  to acquire the  operating  businesses  of Wilmoth Oil Company and its
affiliates, a large Midwest fuel distribution company (herein referred to as the
"Wilmoth Transaction") for a total price of approximately $29,000,000. While the
sellers  agreed  to  extend  the  anticipated  closing  until  March  31,  2001,
FuelNation was unable to raise funds sufficient to consummate such  transaction,
and on April 7, 2001 both parties agreed to terminate the transaction.

                                                                              10

<PAGE>



     In March  2001,  we signed a placement  agent's  retention  agreement  with
Westminster  Securities   Corporation,   100  Park  Avenue,  New  York,  for  an
Underwritten  Offering of up to $100,000,000  to be arranged  through one of its
institutional  clients.  The offering when committed to, would have a term of 24
months  from the date of the  Registration  Statement,  and  would  provide  for
monthly draw downs.  Warrants  would be issued to the purchaser  numbering 4% of
the commitment amount, in addition to other terms, conditions, and Underwriter's
requirements.  Once the transaction is consummated and is funding,  we agreed to
compensate  Westminster  Securities  Corporation under terms and conditions that
are typical and customary for such transactions.  As of the date of this Report,
the registration  statement required under the financing  agreement has not been
filed. We have not drawn down any cash applicable hereto.

     In  June  2001,  we  issued   4,500,000  shares  of  our  common  stock  as
consideration  for  equipment   deposits  and  consulting   services  valued  at
$1,442,500.  Additionally,  in April 2001, Mr. Salmonson,  our CEO,  transferred
2,687,500  shares of our common stock owned by him valued at  $1,209,375  to the
same entity.  In December  2001, we entered into an agreement (the "Put Option")
to  repurchase  all such  stock at a price of $.65 per  share (an  aggregate  of
$4,671,875) at the option of the holders.  We do not expect the Put Option to be
exercised  in the near term and have valued them at the fair market value of the
common stock when issued ($2,651,875). Mr. Salmonson has agreed to accept shares
of common stock equal to the number of common shares he transferred to pay these
expenses.

     In  October  2001,  we  borrowed   approximately   $36,000  from  four  (4)
individuals  and  issued  9%  convertible  subordinated  promissory  notes  (the
"Notes"),  which are due by September 30, 2002 and are convertible  into 258,654
shares of our common  stock (a rate of one share of common stock for each $0.139
principal amount of notes).  Additionally,  we issued stock purchase warrants to
the  noteholders,  which entitled the noteholders to purchase  517,309 shares of
our common  stock at an  exercise  price of  approximately  $.15 per share.  The
warrants  were  issued at twice the  conversion  rate of the  common  stock (two
warrants for each $0.139 principal amount of notes). On our financial statements
included  herewith,  the  notes are shown  net of a  discount  of  approximately
$30,000  which  represents  the fair value  assigned to the  warrants  that were
issued. The discount is being amortized over the life of the debt.  Amortization
amounted to approximately  $7,500 in 2001, and was charged to interest  expense.
Unamortized discount at December 31, 2001 was approximately $22,500.

     In December  2001, we entered into an agreement  (the "Put  Agreement")  to
repurchase  568,462 and  810,151  shares of our common  stock from two  separate
groups of individuals at a price of $.65 per share (an aggregate of $896,098) at
the option of the holders.

                                                                              11

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Such  individuals had purchased their stock through our Regulation D offering in
December  2000 at the same  price of $.65 as the Put  Agreement.  The  amount of
$896,098 has been reclassified from stockholders' equity to common stock subject
to repurchase at December 31, 2001.

     In  December  2000 and  January  2001,  we  completed  a private  placement
pursuant to Rule 506, Regulation D under the Securities Act of 1933, as amended,
wherein we issued 5,216,256 shares of our common stock (5,193,181 shares in 2000
and 23,075  shares in 2001) at $.65 per  share.  We  received  net  proceeds  of
approximately $3,160,000 ($3,145,000 in 2000 and $15,000 in 2001).

     In March 2001,  we sold  101,500  shares of common stock at $1.00 per share
pursuant to an additional Regulation D offering.

     During  2001,  3,300,000  shares of our common stock were issued to various
individuals  for consulting  services,  which  resulted in a non-cash  charge to
operations of $2,743,500, and 395,550 shares of common stock were issued for the
payment of approximately $277,000 of debt.

     During  2001,  options to purchase  14,530,239  shares of common stock were
exercised at $.01 per share by Mr. Salmonson, our CEO/President (14,380,239) and
one of our  former  officers  (150,000).  Additionally  in  2001,  a  consultant
exercised  options to purchase  1,500,000 shares of our common stock at $.01 per
share.

     In  December   2000,  we  completed   the   successful   installation   and
demonstration of our Rack to Retail  (R2R(sm))technology at The Bahrain National
Oil  Company,  located  in the  country of Bahrain  in the  Persian  Gulf.  This
installation will be used to generate sales in the middle east and not to derive
income for us. In addition, we filed for commercial  registration in the country
of Bahrain  which is  pending  upon the  opening of a staffed  office in Manama,
Bahrain.  An affiliate of the company Fuel  America,  controlled by our CEO, has
guaranteed  all of the  obligations  in  Bahrain,  on our behalf  pursuant  to a
written corporate  guarantee and stock pledge  agreement.  Our total exposure to
date is approximately  $100,000.  We have setup a server and database network at
BATELCO  (the  local  telecommunications   company)  in  Manama,  Bahrain.  This
installation is established for the direct  relationships of oil producers.  The
Bahrain  National Oil Company will be our show case facility to the middle east.
We must complete the network installation,  commercial registration and staffing
of an office in Manama, Bahrain.

     Our  management has close ties and working  relationships  with some of the
largest  oil  producers  in the Middle  East and the Far East.  Upon  receipt of
applicable funding, of which there can be no assurances,  we intend to staff and
continue marketing our services

                                                                              12

<PAGE>



for  automation to the following  companies in the Middle East during the end of
the 2002 calendar year:

Saudi Arabian Oil Company: ("Saudi Aramco")

     -    Government owned
     -    Financial information not disclosed

     It is the  world's  number one oil  producer,  supplying  11 percent of the
world's oil demand.  This company controls reserves of about 259 billion barrels
(about 25 percent of the world's total and 12 times U.S. reserves).  It extracts
about 8 million barrels a day, operates refineries, markets oil internationally,
and  distributes it  domestically.  Saudi Aramco owns a fleet of oil tankers and
invests in refineries and distribution networks in other countries. It also owns
204 trillion  cubic feet of gas reserves.  The company dates back to 1933,  when
Saudi Arabia agreed to open up a large area of that country for  exploration  by
Standard Oil of California (now Chevron). (Hoovers, 2000)

     We are  also  pursuing  a  contract  with  Saudi  Aramco  to  automate  the
deliveries  and  payment  of jet fuel.  These  contract  negotiations  are being
conducted by our director,  Sheikh Isa Mohammed Isa  Alkhalifa.  Saudi Aramco is
one of the largest jet fuel suppliers in the world. We anticipate pursuing these
contract  negotiations  aggressively  during the end of the 2002 calendar  year.
There can be no assurances that we will obtain this contract.

National Iranian Oil Company

     -    Government owned
     -    Financial information not disclosed
     -    Located in Tehran, Iran

     Sitting on a deep  reservoir of oil reserves,  Iran shares its oil with the
world through the government-owned National Iranian Oil Company ("NIOC"), OPEC's
number two oil producer  behind Saudi Aramco.  NIOC  produces  about 3.5 million
barrels of oil per day from its 90 billion barrels of proved reserves (9 percent
of the world's  total).  It also has natural gas reserves of 812 trillion  cubic
feet.  NIOC exports  account for about 50 percent of government  revenues and 80
percent of its hard currency earnings.  Iran has had little exploration activity
over the past 30 years,  but that is  changing as firms from  several  countries
including Canada,  France,  Italy,  Malaysia and the United Kingdom have ignored
U.S. Government sanctions to sign development agreements. (Hoovers, 2000).

     On or about  December 1, 2000, we retained  Veritas  Venture  Labs,  LLC to
perform consulting  services for us pursuant to a written consulting  agreement.
Based in Boston, Massachusetts,

                                                                              13

<PAGE>



Veritas  Ventures  Lab, LLC is owned and/or  controlled by Edwin Ruh, one of our
directors.  Pursuant to two  separate  consulting  agreements,  Veritas was paid
$221,000.  In  addition,  its  individual  constituents  were  issued a total of
1,000,000  shares of our Common  Stock and were  granted  an option to  purchase
1,500,000 shares at $.01 per share,  which they exercised in 2001. See "Part II,
Item 12, Certain Relationships and Related Transactions," below.

     We have established strategic relationships with several of the service and
equipment  providers  listed below. We either  communicate with their equipment,
software,  jointly market certain clients together or use their services for our
product  offering.  We hope and expect that our relationship with these entities
will continue to be enhanced during 2002 and thereafter.

     In February 2000, we entered into an agreement  with Tower  Communications,
the parent  company for Echosat,  to jointly  establish a new company.  This new
entity will engage solely in the business to provide for the  installation  of a
satellite data  transmissions,  networks,  together with a special box that will
therefore enable the  transmitting of information  through the network to a main
station.  Accordingly,  there  will no longer  be the need to have any  computer
technology at each point of sale system.  As of the date of this Report, we have
not yet formed this new  company,  but intend to  establish  this entity by July
2002.  Information  will be processed  over the network for  numerous  purposes,
including the following:

         A.       Reporting all sales.
         B.       Monitoring pricing of fuel.
         C.       Re-ordering of inventory.
         D.       Potentially providing numerous accounting functions,
                  including a general ledger.
         E.       Credit card processing.

     Echosat  Communications  Group, Inc. is a full-service  provider of digital
satellite communications services for the multi-site retail market and other key
industries.  The company  provides high- speed VSAT  communications  facilities,
point-of-purchase  data  collection  and  management  systems,   in-store  radio
networks, commercial sound systems, and other related products and services.

     Echosat is the world's first equal opportunity satellite service,  bringing
together a multitude of synergistic  applications designed to offer leading-edge
satellite technology under a single dish/single vendor solution.

     Intralight  Software,  Inc.  provides  retailers  of  all  sizes  with  the
following  services:  proprietary  client-server  back & home  office  software,
interfaced  enterprise-level  accounting software, POS integration,  price book,
scanning, OLAP services, FRX financial

                                                                              14

<PAGE>



reporting, wholesale integration,  e-commerce,  supplier connectivity,  hardware
solutions,   complete  software  security  (128  bit),   applications   hosting,
implementation  services,  IT services,  accounting and payroll  services,  data
backup,  and data warehousing  services,  all using the latest Microsoft and web
technology, and provided at a fixed monthly expense.

     Intralight saves clients thousands of dollars each month by eliminating the
need  for  clients  to  employ  information  processors,   accountants,  and  IT
personnel;  and by  eliminating  the large up- front  investment  for  software,
hardware,  and other  outsource  services.  Intralight's  clients may  purchase,
finance,  or rent  all  solutions  for a single  monthly  expense.  No  up-front
purchase is required.

     Intralight signed a marketing and licensing agreement with us in July 2000.
There are currently 10 locations  installed with Intralight and their clientele.
We intend to aggressively  market the clientele of Intralight  during the end of
the 2002  calendar  year. We will not be showing  income from this  relationship
until 2002.

     Lantronix,  Inc. designs,  develops and markets products that enable almost
any electronic  device to be  controlled,  configured or  reprogrammed  over the
Internet and/or intranets. It's products connect these electronic devices to the
Internet  and/or  intranets  by using  the  infrastructure  already  in place to
connect  businesses and homes to the Internet,  including fiber optic,  Ethernet
and wireless  connections.  These  products  connect  electronic  devices to its
device  servers and multiport  device  servers.  The device  servers are used to
network  enable single  devices while its multiport  device  servers are used to
network  enable  multiple  devices  simultaneously.  These  products  are  fully
integrated systems that contain memory, processors,  operating systems, software
applications  and  communication  ports. By utilizing these products,  users can
gain instant access to critical information,  manage and control devices with no
time lag over the Internet or other networks.

     Lantronix  provides  the  hardware  which  allow us to connect to  existing
equipment.  There is no exclusivity in our  relationship  with  Lantronix,  only
non-compete  and  non-disclosure's  relating to our  programming  code.  We have
enjoyed  a  very  good  working   relationship  with  Lantronix  and  anticipate
continuing our relations with them during 2002.

     The Pinnacle  Corporation is the leading supplier of automation  technology
to the convenience store and petroleum industries.  Pinnacle's strength in these
industries  assures a  reliable,  established  vendor with a  commitment  to its
customers and the industries it serves.

                                                                              15

<PAGE>



     We have  written  programming  code to  allow  existing  Pinnacle  users to
communicate to their software packages using our network. As of the date of this
Report,  we have not actively marketed this solution.  Pinnacle/Fuel  Smart Fuel
Accounting  is a  comprehensive,  integrated  fuel  operations,  accounting  and
management  information  system  that  automates  fuel  buying,  storing,  sales
quoting,  dispatching,   inventory  management,   billing,  tax  reporting,  and
credit/collections.  A windows  based  client/server  application  designed  and
optimized  for  the  predominant,   mainstream  local  area  network   operating
environments-Microsoft  Windows  NT or  Novell  Netware.  Fuel  Smart  has  been
specifically  engineered to handle the  complexities  and loads  associated with
large,  multi-state,  multi-  brand,  multi-company  operations.  Fuel  Smart is
designed for both wholesale and retail operations

     Storepoint  Software,  from Retalix,  is the  enterprise-wide  solution for
convenience stores and travel centers. Retalix Limited,  formerly known as Point
of Sale Limited, provides enterprise-wide open software solutions, predominantly
for  the  food  retailing  industry,  which  are  targeted  at  improving  store
operations,  reducing costs and increasing employee  productivity.  Its products
have been  installed in over 15,000  stores  across 41 countries  worldwide.  It
markets  its  solutions  to  supermarkets,  convenience  stores and  restaurants
through  direct  sales,  OEMs,  local  dealers  and  through  its United  States
subsidiary, Storepoint, Inc. Its software solutions cover a wide range of retail
applications, including easy-to-use, comprehensive point-of-sale and back office
store systems that may be combined with our corporate host system.  Products are
marketed under the POSware, Positive, HeadOffice and CyberShopper product lines.

     We signed a joint marketing agreement with Storepoint in April 2000 for the
joint  marketing  of fuel  automation.  Currently,  we have  been  offering  our
services at major trade shows from the Storepoint  booth. As of the date of this
Report,  we have not  generated  any  contracts  from  this  effort,  but we are
currently negotiating  contracts with various entities.  While no assurances can
be provided,  we anticipate  that we will sign contracts to provide  services to
third parties during 2002.

     Veeder-Root is the world's  leading  supplier of automatic tank gauging and
fuel management  systems and one of the few companies in the industry to design,
manufacture   and  service  its  own   products.   Veeder-Root   presently   has
tank-monitoring  systems in more than 500,000  underground  storage tanks around
the globe.  Headquartered  in  Simsbury,  Connecticut,  it employs more than 600
people  worldwide.  Tank gauging  systems are  manufactured in the company's ISO
9000  certified   160,000   square-foot   facility  in  Altoona,   Pennsylvania.
Veeder-Root  products are available  through more than 200 distributors in North
America.  With  subsidiaries  in the United Kingdom and Brazil and sales offices
throughout the world,  Veeder-

                                                                              16
<PAGE>

Root's  systems have been installed  across Europe,  Asia, and South and Central
America.

     Veeder-Root  products and  services  are being used to meet the  regulatory
compliance and business  management  requirements of major oil companies,  large
truck  fleets,  car rental  companies,  airports,  package  delivery  companies,
federal,  state and local governments,  public utilities,  industrial companies,
and thousands of small  underground and aboveground  storage tank owners. We are
currently  joint  marketing  with  Veeder-Root  on select  clients for  complete
automated solutions for Veeder-Root clients.

     Together with Veeder-Root, we are jointly marketing the FuelNation solution
to existing  and  potential  Veeder-Root  clients.  Currently,  we have  jointly
installed several beta sites at a large petroleum marketer in Tampa, Florida and
have received  notification to install additional sites. While no assurances can
be  provided,  we expect this beta site and  several  other  installations  with
Veeder-Root to begin generating revenues during 2002.

Subsequent Events

     We are currently  working on the acquisition and  construction of a 45 acre
travel  center in the Town of Davie,  Florida.  Triad  Petroleum  LLC, an entity
controlled by Mr. Salmonson,  originally contracted to purchase the property for
the travel center in February  1999.  The  applicable  deposit was returned nine
months  later  because  the State of Florida had not deeded  over  certain  land
adjoining the travel center and certain approvals still remained outstanding. As
of the date of this Report, all adjacent properties have been deeded over and we
have again commenced  negotiations and preliminary site plan approvals have been
given.

     We are  currently  negotiating  the  issuance  of $330  million  of taxable
municipal bonds.  The bonds,  which will be originated from our proposed project
in the Town of  Davie,  will  have no  obligation  of  repayment,  guarantee  or
collection  obligations  from  the  Town of  Davie,  pursuant  to an  Interlocal
Agreement between a governmental agency in the jurisdiction where the project is
proposed to be located and the Finance Authority that has the authority to issue
the debt for this  transaction.  The  transaction  described  in the  Interlocal
Agreement  must contain  facilities  as described in the business plan which has
been  submitted for  approval.  We have  prepared the  application  for the bond
offering and it is expected that the final  application  will be submitted  upon
receipt of a commitment that we have the appropriate  collateral for the cost of
issuance and short fall letter of credit in the amount of $9.9 million.

     The travel center plans  currently  consist of a 105,500 square foot travel
center, 200 room hotel, 24 pump fueling depots, a truck

                                                                              17

<PAGE>



wash,  35,000 square foot retail mall,  20,000  square foot spa and gym,  30,000
square feet of office space for the  technology  center,  19,000 square feet for
truck maintenance and repair, a convenience  store, 7,500 square feet devoted to
truck sales, 858 tractor trailer parking slots and 539 car parking slots.

     We intend to work closely with local universities and municipalities in the
creation of educational  facilities,  jobs, revenues and business development in
the energy  business.  We intend to construct  this 45 acre travel center in the
Town of Davie,  Florida.  These  facilities  will not only result in the largest
travel  center of its kind in the State of  Florida,  but will also serve as our
headquarters  and  educational  training  center.   However,  there  can  be  no
assurances that we will obtain the necessary funding to allow this travel center
will be built,  or that other problems in the  development of this travel center
will not arise in the future.

     In addition,  in January 2002, we signed a non-binding  letter of intent to
purchase a petroleum marketer located in the southeast United States. As part of
the terms of this  letter of intent,  we agreed to enter  into a  non-disclosure
agreement pertaining to the release of the name or any other information on this
proposed acquisition until we receive the firm commitment on the above described
bond offering or written consent from the prospective seller. The proposed terms
of  this  acquisition  are  currently  being  negotiated  and  there  can  be no
assurances that this acquisition will occur.

Industry Analysis

     Currently,  we believe the petroleum  marketing industry is technologically
laggard compared to other industries, in that it is failing to take advantage of
existing  technological  capabilities.  For example, it is possible to receive a
stock  quote  anywhere  in the  world  in a matter  of  seconds,  but many  fuel
distributors  still have to manually  read fuel gauges to measure  their current
fuel supply.  Although this is partly due to the profitable  nature and constant
demand  for  petroleum  products,  there has not been any  significant  sense of
urgency to make technological upgrades.

     There is currently  1.1 trillion  gallons of refined  fuels that need to be
tracked and accounted for globally. The industry wastes several cents per gallon
that get passed  through to the  consumer.  For every one (0.01) cent per gallon
saved in  manual  processes  from the 1.1  trillion  gallons  of  refined  fuels
annually,  there would be an $11  billion  savings  annually  for every penny in
efficiencies.

     The petroleum  marketing industry has struggled to integrate new technology
to automate manual work processes. Traditionally, technologies and services that
improve margins and reduce

                                                                              18

<PAGE>



inefficiencies have required the installation of computer terminals,  additional
equipment, network changes, contract renegotiations, etc. However, this approach
has not been cost- effective and requires frequent employee training. Due to the
lack of a highly  skilled  workforce,  petroleum  marketers  have been seeking a
cost-effective  technological  solution that does not require  computers,  human
intervention and time-consuming employee training.

     The oil producers and major oil companies  currently track fuel with tracer
additives  that  currently  cost in excess of twenty  basis  points  (0.002) per
gallon for the tracer and an additional $0.01 to to $0.05 a gallon in management
and losses. This tracer is added to the fuel to make sure that a delivery of the
correct  product  is  correctly  marked at the  location.  Most of the major oil
producers and major oil companies we have visited have shown losses in excess of
$500,000,000  annually  with the  inability to track the fuel through the supply
chain and are  inadvertently  paying  rebates on fuel that is not theirs.  These
losses  are in  epidemic  scale  and have been  increasing  while  margins  keep
decreasing.

     As an example,  it is not uncommon for a petroleum  marketer  that supplies
fuel to 50 independent  retail locations to send and receive over 100 facsimiles
per day in addition to over 200 follow- up phone calls.  The oil companies pay a
third party  company to supply fuel  pricing to the industry and the third party
company charges the industry to receive the  information.  Because there has not
been a way to track the sales  remotely,  oil companies pay rebates on fuel sold
at the retail  location based upon the honor system.  Vendors in the convenience
stores  require  the same honor  system  when it comes to pricing  and  rebates,
because  there is no standard to automate the  information.  Billions of dollars
are lost annually in this industry  because of manual  processes and  shrinkage.
Although  the  industry  is trying to make  changes to automate  the tasks,  the
equipment is not  standardized  in the  industry and everyone  wants to have the
proprietary solution, which complicates matters.

Competition

     We are a  business-to-business  ASP,  focused on the  vertical  industry of
petroleum marketing.  We believe we are unique compared to most B2B ASPs in that
we  offer  B2B  technology  that is  specifically  designed  for  the  petroleum
marketing  industry,  whereas  most  competitors  offer  technologies  that  are
applicable across multiple  industries in order to maximize market  opportunity.
While our  existing  technology  could be  utilized  for other  industries,  our
strategic  plan is to  focus on the  petroleum  marketing  industry  in order to
derive the highest revenue growth possible.


                                                                              19

<PAGE>



     The  leading B2B ASP  providers  include,  but are not  limited to,  Ariba,
CommerceOne,  i2,  PurchasePro,  Ventro  and  Verticalnet.  Most B2B ASPs  offer
technologies  and  services  related to  procurement,  supply-chain  management,
financial services,  logistics, eCRM, sell- side solutions, back-end integration
and enterprise  resource  planning  ("ERP").  We, however,  offer a supply-chain
gasoline  inventory  management  system  that  contains  enhanced  services  and
features,   including  reporting,  that  provides  integration  into  back-  end
administrative  functions specifically for the petroleum marketing industry. The
system does not require desktop or laptop computers, but can be accessed through
an internet connection.

     To date, no other B2B ASP offers a comparable supply-chain industry tool to
the petroleum marketing  industry.  Current competitors offer solutions that can
be applied across different  industries,  but they lack the capabilities offered
by us for the petroleum marketing industry.  Given the explosive growth patterns
seen in the  valuation,  we hope to attract a great deal of attention in the B2B
space,  which may lead to  intense  scrutiny  once we  officially  launches  our
products, which is expected to occur July 2002.

     We anticipate  either B2B ASPs or existing oil companies,  or a combination
of the two, to scrutinize our products,  attempt to replicate their offering and
compete  directly  with us.  The  estimated  entry  would be the third to fourth
quarters  2002.  By then,  however,  we hope to  establish  a market  leadership
position.  However,  there  can be no  assurances  we will be able to do so.  We
believe that if we can establish  long-term contracts with the terminal point of
the distribution network gas stations,  it will be difficult for new entrants to
supplant us. However, there can be no assurances we are correct.

     Many  companies that could start to be  competitors  have longer  operating
histories,  substantially  greater  financial,  technical,  marketing  or  other
resources,  or greater name  recognition than we do. Our competitors may be able
to respond more quickly than we can to new or emerging  technologies and changes
in customer requirements. Competition could seriously impede our ability to sell
additional  services on terms  favorable to us. Our  potential  competitors  may
develop and market new technologies  that render our existing or future services
obsolete,  unmarketable or less competitive.  Our potential competitors may make
strategic  acquisitions or establish cooperative  relationships among themselves
or with other e-commerce and business to business transaction service providers,
thereby  increasing  the  ability of their  services to address the needs of our
prospective  customers.  Our potential  competitors  may establish or strengthen
cooperative  relationships with our current or future channel partners,  thereby
limiting  our  ability to sell  services  through  these  channels.  Competitive
pressures could reduce our market share or require the

                                                                              20

<PAGE>



reduction of the prices of our services,  either of which could  materially  and
adversely affect our business, results of operations or financial condition.

     While there are many potential  competitors to our individual products,  we
believe that we are the only competitor with a complete  integrated  package. We
compete in the processing business on the basis of certain factors, including:

     -    system reliability;
     -    product performance;
     -    breadth of service offering;
     -    ease of implementation;
     -    time to market;
     -    customer support; and
     -    price.

     We believe  that we  presently  compete  favorably  with respect to each of
these factors.  However,  the market for our services is still rapidly evolving,
and we may not be able to compete  successfully  against  current and  potential
future competitors.

Employees

     As of the date of this Report,  we have 5 full time  employees  assigned as
follows:  3  management/administrative,   2  Computer  Engineer/developer.   Our
operations are non-union.  We have had no history of labor strikes or unrest. We
believe that our relations with our employees remains satisfactory. In addition,
our management  believes that the available labor force in the geographic  areas
where our  facilities  are  located  are  sufficient  to support  the  expansion
anticipated over the next 12 months.

Trademarks/Patents

     We filed a trademark  registration  on May 25, 2000 for the name FUELNATION
with United States Department of Commerce (Patent and Trademark office),  Serial
Number 76056889.

     We filed a Service  Mark  registration  on  November  27,  2000 for the R2R
service name with United  States  Department  of Commerce  (Patent and Trademark
office), Serial Number 76171137.

Government Regulations

     We are not subject to any extraordinary  governmental  regulations relating
to our business.

                                                                              21
<PAGE>

ITEM 2.  DESCRIPTION OF PROPERTY

     Facilities.  During the fiscal year ended  December 31, 2001, we maintained
our principal place of business at 1700 N. Dixie Highway, Suite 125, Boca Raton,
Florida 33432. This location  consisted of 1,800 square feet of executive office
space.  We incurred a base monthly rent of $2,960 plus tax pursuant to a written
lease  which  expired  in 2001 and  thereafter,  we began to pay month to month,
pursuant to an oral agreement between the Simmons Family Partnership,  the owner
of such property, and Triad. Simmons Family Partnership had agreed to accrue and
defer all rent payments.  Pursuant to an oral agreement between us and Triad, we
occupied  such space with Triad at no extra cost.  However,  we agreed to assume
all liabilities  with respect to the rent owed to Simmons Family  Partnership by
Triad.

     In March  2002,  we moved our  principal  place of business to 4121 SW 47th
Ave.,Suite 1301,  Davie,  Florida.  This location  consists of approximately 700
square  feet of  executive  office  space and  approximately  500 square feet of
warehouse  and storage  space..  We incur a base monthly rent of $990,  plus tax
pursuant to a written lease which expires in February 2004. We believe that this
new  space  is  adequately   sufficient  to  meet  our  future  growth  demands.
Furthermore,  we believe that there exists sufficient available office space and
that we could  effectively  lease additional space within the immediate area, if
so required.

     Our data  center in the United  States is located at leased  facilities  at
Echosat in Lexington,  Kentucky. A data center is a facility containing servers,
modem banks,  network circuits and other physical equipment necessary to connect
users  to the  Internet.  The data  center  has  multiple  levels  of  redundant
connectivity  to  the  Internet,   back-up  power,  fire  suppression,   seismic
reinforcement  and  security  surveillance  24 hours a day,  7 days a week.  The
current base monthly rent is $2,000 per month, on a month to month basis.

     Our  data  center  in the  Middle  East  is  currently  located  at  leased
facilities at BATELCO in Manama Bahrain. A data center is a facility  containing
servers, modem banks, network circuits and other physical equipment necessary to
connect users to the Internet.  The data center has multiple levels of redundant
connectivity  to  the  Internet,   back-up  power,  fire  suppression,   seismic
reinforcement  and  security  surveillance  24 hours a day,  7 days a week.  The
current base monthly rent is $7,000 per month, on a month to month basis.

ITEM 3.  LEGAL PROCEEDINGS

     We have been named as a defendant  in one  lawsuit in the normal  course of
our business and have received various letters

                                                                              22
<PAGE>

threatening  litigation.  In the opinion of management,  after  consulting  with
legal counsel,  the  liabilities,  if any,  resulting from these matter will not
have a material effect on our financial statements.

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

     In December 2001,  the holders of a majority of our issued and  outstanding
common stock  authorized a 1:30  "reverse  split" of our issued and  outstanding
common stock. However, subsequent thereto, our Board of Directors elected not to
proceed with this reverse stock split after consultation with various investment
bankers with whom we were having discussions. No other matters were submitted to
a vote of our  shareholders  during the three month  period  ended  December 31,
2001.

                                     PART II

ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

     Our common  stock is currently  traded on the OTC Bulletin  Board under the
symbol  "FLNT." The following  table sets forth the high and low bid  quotations
for the common  stock for the periods  indicated  as  reported by NASDAQ.  These
quotations  reflect prices  between  dealers,  do not include  retail  mark-ups,
markdowns, commissions and may not necessarily represent actual transactions.

                  Period                          High           Low
                  ------                          ----           ---

         First Quarter ended 3/31/00              $N/A           $N/A
         Second Quarter ended 6/30/00             $1.25          $0.50
         Third Quarter ended 9/30/00              $2.50          $0.125
         Fourth Quarter ended 12/31/00            $2.375         $1.437

         First Quarter ended 3/31/01              $2.6875        $0.75
         Second Quarter ended 6/30/01             $1.0937        $0.17
         Third Quarter ended 9/30/01              $0.49          $0.10
         Fourth Quarter ended 12/31/01            $0.50          $0.025

     As of April 15,  2002,  the price of our common  stock was $.037 bid,  $.04
asked.  As of April 15, 2002, we had  approximately  414 holders of record,  not
including  those persons who hold their shares in "street  name.".  The transfer
agent for our common stock is Continental  Stock Transfer and Trust Company,  17
Battery Place, 8th Floor, New York, New York 10004, telephone (212) 509-4000.

     We have never paid cash dividends on our common stock and presently  intend
to retain future earnings,  if any, to finance the expansion of our business and
do not  anticipate  that  any  cash  dividends  will be paid in the  foreseeable
future. The future

                                                                              23
<PAGE>

dividend  policy will depend on our earnings,  capital  requirements,  expansion
plans, financial condition and other relevant factors.

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

     The following  discussion  should be read in  conjunction  with our audited
financial  statements and notes thereto included herein. In connection with, and
because we desire to take  advantage  of, the "safe  harbor"  provisions  of the
Private  Securities  Litigation Reform Act of 1995, we caution readers regarding
certain forward looking statements in the following  discussion and elsewhere in
this report and in any other statement made by, or on our behalf, whether or not
in future filings with the Securities and Exchange  Commission.  Forward looking
statements are statements relating to future operations,  strategies,  financial
results  or other  developments  and are not  based on  historical  information.
Forward looking  statements are necessarily based upon estimates and assumptions
that are inherently  subject to significant  business,  economic and competitive
uncertainties and  contingencies,  many of which are beyond our control and many
of which, with respect to future business  decisions,  are subject to change. If
any of these uncertainties or contingencies arise, our assumptions and estimates
could be false,  which would likely affect actual results and could cause actual
results to differ  materially and adversely from those  expressed in any forward
looking  statements  made by, or on our behalf.  We disclaim any  obligation  to
update forward looking statements.

RESULTS OF OPERATIONS

Comparison of Results of Operations for the fiscal years ended December 31, 2001
and 2000

     We have not begun to generate  revenues as of the date of this Report.  Our
operating expenses during 2001 were $27,793,278, compared to $1,205,251 in 2000,
an  increase  of  $26,588,027  (2000%).  Our 2001  operating  expenses  included
approximately  $16.28  million in  non-cash  consulting  fees,  $6.4  million in
non-cash employment compensation and $3.6 million in non-cash consulting fees to
a related  party,  each of which arose from the  issuance of options to purchase
shares of our common stock at prices below the then current  market price of our
Common Stock.  As a result,  for the years ended  December 31, 2001 and 2000, we
incurred net losses of  $(28,497,242)  ($.17 per share) and $1,205,251 ($.01 per
share), respectively.

     Because we have not  generated  any revenues as of the date of this Report,
we hereby submit our Plan of Operation pursuant to the

                                                                              24
<PAGE>

requirements of Regulation SB,  promulgated under the Securities Act of 1933, as
amended.

Plan of Operation

     Our  objective  is to be the  leading  worldwide  provider  of  real-  time
e-commerce and  business-to-business  communications in the petroleum  marketing
industry.  Our vertical  integration  strategy is to purchase existing petroleum
marketers,   transport   companies,   dealers  and  related  facilities  in  key
distribution markets.

     We intend to finance these  purchases with the issuance and sale of taxable
municipal  bonds.  We have been  negotiating  the  issuance of  $330,000,000  of
Taxable  Municipal  Bonds with the Town of Davie,  Florida.  We  currently  have
prepared an application for the bond offering that requires us to pay a $660,000
commitment and application fee. We are also required to have a bank issue a cost
of  issuance  and short  fall  letter of credit in the  amount of  approximately
$9,900,000  which is  refundable  from the  proceeds of the bond issue.  We have
received  a  commitment  for the a cost of  issuance  and short  fall  letter of
credit, subject to cash collateral. We are confident the cash collateral will be
raised  with the help of our  financial  advisor,  GunnAllen  Financial  and the
assistance  of our potential  purchasers,  because the monies are held in escrow
and the $9,900,000 is refundable from the proceeds of the bond issue.

     We have developed  proprietary  technology  that allows us to provide fully
integrated services relating to the inventory, sales, distribution and financial
reporting  functions  in the fuel  industry.  Marketed  under the  service  mark
R2R(SM) ("Rack to Retail"), this technology completely automates and streamlines
the data collection  processes for centralization,  retrieval and integration of
inventory, financial and accounting information in the fuel industry.

     The  R2R(sm)  technology  is an  inventory  management  system  that allows
multiple point of sales, tank monitors,  wireless PDA devices,  Internet phones,
automated teller machines, back office software,  price signs and numerous other
equipment  manufacturers  to integrate and  seamlessly  exchange data in an open
architecture  environment  without  installing  computer  software.  The R2R(sm)
technology  includes a proprietary router box connected to an existing retail or
wholesale location, which automatically collects, integrates and distributes the
data,  in  various  formats,  to the  customer  at a  centralized  location.  By
utilizing this technology,  the pricing,  monitoring of sales,  inventory status
and reordering of fuel can be done remotely including through a remote apparatus
such as a PDA. In other words, from a distant location,  an R2R(sm) customer can
regularly  monitor fuel sales on a real-time basis as well as change the pricing
at retail fuel pumps to reflect

                                                                              25
<PAGE>

current  market  conditions.  Furthermore,  the  system  enables  the  automatic
reordering of fuel based upon the actual volume of sales and remaining  quantity
of fuel at the applicable pump.

     The automated  system  serves as a  significant  mechanism for companies to
monitor their fuel sales, inventory,  and costs. In addition,  financial lenders
can also have  access to the data in order to monitor  the  operations  of their
borrowers  on a real time  basis.  We  expect to  receive  fees  and/or  royalty
payments  either on a fixed basis per month or on a per gallon basis charge.  We
intend to  license  our  technology  to service  stations,  truck  stops  and/or
customers that are otherwise involved in the distribution and sale of fuel.

     We believe that our product offering is unique and is not available via any
other method.  The industry is a very difficult  market to penetrate and as such
we feel we have  accomplished  major  milestones  in the  industry  to date.  We
originally started marketing our system to the major oil companies and felt this
would  give us the  immediate  market  share  and the  vertical  integration  we
desired. During our sales initiatives we discovered the following:

     The oil companies main drive is gallons and market share. The oil companies
distribute their products through petroleum marketers,  dealers and some company
owned stores. The oil companies require the petroleum  marketers and the dealers
to use  their  credit  card  processors.  This  equipment  for the  credit  card
processing  is  supplied  through  the oil  company  and  paid by the  petroleum
marketers and the dealers.  The oil companies typically charge 3% processing fee
for the use of all  credit  cards on the  network  and offer  their own  branded
credit card  processing  for no charge.  The  majority of all of the credit card
processing is Visa and  MasterCard and therefore the burden and costs are passed
down the food chain to the  petroleum  marketers  and the dealers for the credit
card processing fees.

     The reporting requirements of the industry are very labor intensive and the
burden is always  passed down to the petroleum  marketers  and the dealers.  New
equipment  and programs are usually  offered  through the major oil companies to
the petroleum marketers and the dealers with a percentage of the offering always
being rebated back to the oil company. There are other alternative equipment and
service  suppliers  in the  industry  and they are limited on their entry to the
market by being  approved and  certified  to operate on their  credit-processing
network.  Our approach is and will continue to be providing the industry with an
open  architecture  and shared  information  environment  that  allows  entry to
virtually all equipment and service  suppliers.  Other  industries have state of
the art  communications  and networks and first class  accounting  and reporting
packages. We believe the petroleum industry is behind the market by decades.

                                                                              26
<PAGE>

     Our entry to the market is being  focused on working  with major  petroleum
marketers and dealer  networks.  We have discovered that when several  petroleum
marketers  and dealers are very  satisfied  with your  products and services and
they request the major oil companies to approve our products and services,  they
typically  get  what  they  want.  This  process  is not  fast,  but it is  very
effective.  The oil  companies  are  starting  to follow  the lead of  petroleum
marketers and dealer networks because they see the  efficiencies  first hand. We
feel confident the industry will start to make significant changes to the manual
processes and allow a more open environment once they see others operating.

     Given the magnitude of these fuel markets, we are currently focusing on B2B
applications and automating manual processes. We also intend to find one or more
partners to assist in retail  sales of the R2R system.  There are also  multiple
advertising  opportunities that we intend to pursue, including the displaying of
our logo at automated locations and on fuel transports.

     We believe that our product offering is unique and is not available via any
other method.  The industry is a very difficult market to penetrate and as such,
we feel we have  accomplished  major  milestones  in the  industry  to date.  We
originally started marketing our system to the major oil companies and felt this
would  give us the  immediate  market  share  and the  vertical  integration  we
desired.  During our sales initiatives we discovered that the oil companies main
drive is gallons and market share.  The oil companies  distribute their products
through petroleum marketers, dealers and some company owned stores. They require
the  petroleum  marketers  and the dealers to use their credit card  processors.
This  equipment  for the credit  card  processing  is  supplied  through the oil
company and paid by the petroleum  marketers and the dealers.  The oil companies
typically  charge  3%  processing  fee for the use of all  credit  cards  on the
network and offer their own branded credit card  processing  for no charge.  The
majority  of all of the  credit  card  processing  is Visa  and  MasterCard  and
therefore  the burden and costs are passed down the food chain to the  petroleum
marketers and the dealers for the credit Card processing fees.

     Given the magnitude of these fuel markets, we are currently focusing on B2B
applications and automating manual processes. We also intend to find one or more
partners to assist in retail sales of the R2R system.

     There are also  multiple  advertising  opportunities  that we will  pursue,
including  the  displaying  of our  logo  at  automated  locations  and on  fuel
transports.

                                                                              27
<PAGE>

Sales Strategy

     Our  products  and services  will be marketed  through  direct and indirect
channels. We intend to accomplish our direct selling in several ways, including:

     - our web sites;
     - direct sales by our own staff and technology partners;
     - affiliate programs;
     - original equipment manufacturers; and
     - tradeshows.

     For our indirect sales efforts, we will use independent resellers. Reseller
organizations   can  offer  all  of  our  services.   These  third  party  sales
organizations  are  either  already  involved  in  marketing  to  the  petroleum
industry.  Those in the reseller  program  purchase our services at a discounted
rate and then  re-sell  them to their  clients.  They can  either use us to bill
their  customers for these services or invoice their  customers  under their own
name.

     For  resellers,  we believe the key element is residual,  transaction-based
income.  Resellers  that  manage  the  entire  transactions  will  receive a per
transaction  fee, plus sign-up fees if the reseller  uses our  suggested  retail
pricing.  Many resellers actually charge higher prices when the market will bear
it.  The use of  resellers  allows us to  leverage  our  resources  to  maximize
revenues.  By working with companies as resellers,  we strategically  develop an
outside sales organization that already has sound,  existing  relationships with
merchants.  These resellers  recognize that income derived from our installation
fees and recurring  transaction  charges provide them with  significant  revenue
potential. Most competitors sell products using a direct sales force.

     We will use a variety of marketing  activities to increase market awareness
of our  services  and  educate  our target  audience.  In  addition  to building
awareness of our brand,  our marketing  activities focus on generating leads for
our sales  efforts.  To build  awareness  and attract new  merchants  we conduct
marketing and  partnership  programs  including  advertising,  public  relations
activities,  referral  programs,  co-branded  initiatives,  virtual seminars and
trade shows.

     Our  vertical  integration  strategy  is  to  purchase  existing  petroleum
marketers  and  dealers  in key  distribution  markets.  We will  focus upon the
complete automation of these companies and allow them to continue to operate and
consolidate  additional  marketers  in their  markets.  This  approach  has been
received very favorably and we are in negotiations with several very large

                                                                              28
<PAGE>

marketers  on this  strategy.  However,  there can be no  assurances  that these
negotiations  will  result in our  obtaining  contracts,  or if we obtain  these
contracts,  we  will  become  profitable.  If we  acquire  these  entities,  the
marketers will continue to operate their companies as wholly owned  subsidiaries
of our Company and we will provide the high-speed networks and communications to
their  existing  facilities  and  equipment.  Our  current  tests  on  petroleum
marketers  to date  have  shown  increases  in EBIDTA  approaching  30% with the
increased efficiencies in automating manual processes, less shrinkage,  improved
buying power.

Data Centers and Network Access

     Our data  center in the United  States is located at leased  facilities  at
Echosat in Lexington,  Kentucky. A data center is a facility containing servers,
modem banks,  network circuits and other physical equipment necessary to connect
users  to the  Internet.  The data  center  has  multiple  levels  of  redundant
connectivity  to  the  Internet,   back-up  power,  fire  suppression,   seismic
reinforcement  and  security  surveillance  24 hours a day,  7 days a week.  The
current base monthly rent is $2,000 per month, on a month to month basis.

     Our  data  center  in the  Middle  East  is  currently  located  at  leased
facilities at BATELCO in Manama Bahrain. A data center is a facility  containing
servers, modem banks, network circuits and other physical equipment necessary to
connect users to the Internet.  The data center has multiple levels of redundant
connectivity  to  the  Internet,   back-up  power,  fire  suppression,   seismic
reinforcement  and  security  surveillance  24 hours a day,  7 days a week.  The
current base monthly rent is $7,000 per month, on a month to month basis.

     The  technology   underlying  our  e-commerce  and  Business-to-   Business
transaction services provides the following benefits:

     Scalability. Our services allow us to deliver consistent quality of service
as transaction volumes grow, and to handle daily and seasonal peak periods. As a
result,  we do not have to expand  these  areas of their  transaction-processing
infrastructure as their businesses grow.

     High  reliability.  Our systems are engineered to provide high reliability,
and we provide transaction processing and support 24 hours a day, 7 days a week.

     Secure messaging.  All communications between our system are facilitated by
an encrypted protocol.

     Real-time  responses.  Because our services  enable  online e- commerce and
Business-to-Business transactions in real-time,

                                                                              29
<PAGE>

clients  can  improve  their level of  customer  satisfaction  and reduce  their
support  costs  by  avoiding  delayed  responses  and  minimizing  the  need for
follow-up communications.

Product Development

     Our Florida-based  product  development team is responsible for the design,
development,  testing and release of our core software and  services.  We have a
well-defined  software  development  methodology  that we believe  enables us to
deliver  services that satisfy real  business  needs for the global market while
meeting  commercial  quality   expectations.   We  emphasize  quality  assurance
throughout our software development lifecycle. We believe that a strong emphasis
placed on analysis,  design and rapid prototyping early in the project lifecycle
reduces the number and costs of defects that may be found in later  stages.  Our
development  methodology  focuses on  delivery  of  product to a global  market,
enabling   localization   into  multiple   languages,   multi-currency   payment
processing,  global fraud  detection,  and local  regulatory  compliance  from a
single code base.

     When  appropriate,  we utilize  third  parties to expand the  capacity  and
technical  expertise  of  our  internal  product  development  organization.  On
occasion,  we have  licensed  third-party  technology  that we feel provides the
strongest  technical  alternative.  We believe this approach  shortens  time-to-
market  without  compromising  our  competitive  position,  product  quality  or
service.

Manufacturing

     We do not have the capacity to manufacture the router devices and have used
contract manufacturers for the devices made to date. For the foreseeable future,
we intend to continue to use contract  manufacturers  for the router device.  We
believe that there are multiple vendors and manufacturers  available and that we
will not rely on any one source.

Intellectual Property

     Our  success  depends  upon  our  proprietary  technology.  We  rely  on  a
combination   of  patent,   copyright,   trademark  and  trade  secret   rights,
confidentiality  procedures and licensing  arrangements to establish and protect
our proprietary rights.

     As  part  of  our  confidentiality  procedures,  we  generally  enter  into
non-disclosure  agreements  with  our  employees,  distributors,  and  corporate
partners and into license agreements with respect to our software, documentation
and other  proprietary  information.  Despite these  precautions,  third parties
could  reverse  engineer,  copy  or  otherwise  obtain  our  technology  without
authorization, or

                                                                              30
<PAGE>

develop  similar  technology  independently.  While  we  police  the  use of our
services and technology  through online  monitoring and functions  designed into
our products,  an unauthorized  third-party may nevertheless  gain  unauthorized
access to our services or pirate our  software.  We are unable to determine  the
extent to which piracy of our intellectual property or software exists. Software
piracy  is  a  prevalent  problem  in  our  industry.  Effective  protection  of
intellectual property rights may be unavailable or limited in foreign countries.
We cannot  assure you that the  protection  of our  proprietary  rights  will be
adequate  or  that  our  competitors  will  not  independently  develop  similar
technology,  duplicate our services or design around any  intellectual  property
rights we hold.

Liquidity and Capital Resources

     At  December  31,  2001,  we had $2,196 in cash and cash  equivalents.  Our
operations  to date have consumed  substantial  amounts of cash. We will need to
raise  substantial  additional  funds to implement our business  plan  described
herein.  We  intend  to  seek  additional  funding  through  public  or  private
financings,  including  equity  financings.  Adequate funds for these  purposes,
whether obtained through financial  markets,  collaborative  agreements or other
arrangements with corporate partners or from other sources, may not be available
when needed or on terms acceptable to us.  Insufficient  funds may require us to
delay,  scale  back  or  eliminate  some  or  all of our  product  and  services
development  programs,  to license  third parties to  commercialize  products or
technologies  that we would  otherwise  seek to develop  ourselves,  to sell our
company to a third party; to cease  operations;  or to declare  bankruptcy.  Our
future cash requirements will be affected by results of product development.

     As of the date of this Report,  in order to meet our capital needs, we have
been negotiating for the issuance of $330,000,000 of Taxable Municipal Bonds. We
currently have prepared an application for the bond offering that requires us to
pay a $660,000  commitment and  application  fee. We are also required to have a
bank issue a cost of  issuance  and short fall letter of credit in the amount of
approximately  $9,900,000  which is  refundable  from the  proceeds  of the bond
issue.  We have received a commitment  for the a cost of issuance and short fall
letter  of  credit,  subject  to cash  collateral.  We are  confident  the  cash
collateral  will be raised  with the help of our  financial  advisor,  GunnAllen
Financial and the assistance of our potential purchasers, because the monies are
held in escrow and the  $9,900,000 is  refundable  from the proceeds of the bond
issue.

Trends

     The United  States  petroleum  marketing  industry is  estimated  at $134.2
billion dollars for 1999, with an anticipated size of $204.8

                                                                              31
<PAGE>

billion  dollars by 2005,  assuming a 7.3 percent growth rate in gas consumption
over 10 years.  The  number  of  retail  fuel  outlets  in the  U.S.,  which was
approximately  182,600 in 1998,  is estimated  at 250,000 by 2005.  According to
U.S. Government  figures,  the total demand for oil will increase to 112 million
barrels per day with prices remaining steady at $28 per barrel in the year 2020.

     Our product has been installed and operational at several well  established
leading petroleum companies in the United States as well as Manama,  Bahrain for
the past  one and  one-half  years.  The  product  has  been  proven  to be very
successful and profitable for the petroleum marketers during our development and
testing stage. We have studied and surveyed existing and potential customers for
a marketing strategy.

     There can be no assurance  that any of our potential  products and services
can be  successfully  marketed.  Our technology  has no historical  results upon
which to forecast  future  operations.  It is expected that business,  operating
results and financial condition to be materially  adversely affected if revenues
do not meet our projections.

     These trends taken together  create a picture of opportunity for our future
growth. We anticipate that the vertical  integration strategy will bode well for
our future, as activity along the entire value chain should increase not just in
the domestic  sense but globally as well.  However,  there can be no  assurances
that this will occur.

Inflation

     Inflation has not had a significant impact on our results of operations and
is not  anticipated  to have a significant  negative  impact in the  foreseeable
future.  However,  there is no assurance that inflation will not have a material
adverse impact on our future results of operations.

ITEM 7.  FINANCIAL STATEMENTS

     Our  financial  statements  required to be included in this Form 10-KSB are
appended hereto commencing on page F-1.


                                                                              32
<PAGE>





                         REPORT OF INDEPENDENT AUDITORS

To the Stockholders and the Board of Directors of
   FuelNation, Inc.
   Davie, Florida

     We have  audited the  accompanying  balance  sheet of  FuelNation,  Inc. [a
development  stage company] as of December 31, 2001, and the related  statements
of operations,  changes in stockholders'  equity  [deficit],  and cash flows for
each of the two years and the cumulative  period ended December 31, 2001.  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 audits.

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

     In our opinion,  the financial statements referred to above present fairly,
in all  material  respects,  the  financial  position  of  FuelNation,  Inc.  [a
development  stage  company] as of  December  31,  2001,  and the results of its
operations  and its cash  flows  for each of the two  years  and the  cumulative
period  ended  December 31,  2001,  in  conformity  with  accounting  principles
generally accepted in the United States of America.

     The accompanying  financial statements have been prepared assuming that the
Company  will  continue  as a  going  concern.  As  discussed  in  Note 3 to the
financial  statements,  the Company is in the development  stage, has suffered a
net loss of  $28,497,242  for the year ended December 31, 2001 and has a working
capital  deficiency of $1,079,225 and a deficit  accumulated in the  development
stage of  $29,702,493 as of December 31, 2001.  Management's  plans in regard to
these  matters are also  described in Note 3. The  financial  statements  do not
include   any   adjustments   which  might  arise  from  the  outcome  of  these
uncertainties.






                                         s/Moore Stephens, P.C.

                                         MOORE STEPHENS, P. C.
                                         Certified Public Accountants.

Cranford, New Jersey
March 29, 2002


                                      F-1
                                                                              33
<PAGE>


FUELNATION, INC.
[A DEVELOPMENT STAGE COMPANY]
--------------------------------------------------------------------------------

BALANCE SHEETS
--------------------------------------------------------------------------------


                                                          December 31,
                                                   ---------------------------
                                                     2 0 0 1         2 0 0 0
                                                   -----------     -----------
Assets:
Current Assets:
   Cash                                            $     2,196     $    13,198
   Inventory                                           560,339         553,623
   Due from Escrow Accounts                                 --         435,470
   Due from Affiliates                                      --         172,874
   Other                                                34,628          40,415
                                                   -----------     -----------

   Total Current Assets                                597,163       1,215,580
                                                   -----------     -----------

Property and Equipment:
   Office Furniture and Equipment and
     Computer Equipment - Net of Accumulated
     Depreciation of $69,828 and $23,276
     in 2001 and 2000, Respectively                    174,185         209,479
                                                   -----------     -----------

Other Assets:
   Technology                                        1,581,747         559,107
   Deposits on Equipment                               752,500              --
   Investments                                              --         403,886
                                                   -----------     -----------

   Total Other Assets                                2,334,247         962,993
                                                   -----------     -----------

   Total Assets                                    $ 3,105,595     $ 2,388,052
                                                   ===========     ===========


See Notes to Financial Statements.

                                      F-2
                                                                              34
<PAGE>


FUELNATION, INC.
[A DEVELOPMENT STAGE COMPANY]
--------------------------------------------------------------------------------

BALANCE SHEETS
--------------------------------------------------------------------------------


                                                          December 31,
                                                   ---------------------------
                                                     2 0 0 1         2 0 0 0
                                                   -----------     -----------
Liabilities and Stockholders' Equity [Deficit]:
Current Liabilities:
   Accounts Payable                                $   535,107     $   375,404
   Accrued Liabilities                                 234,809         124,367
   Payroll and Taxes Payable                           524,427         125,800
   Convertible Debt                                     13,059              --
   Due to Affiliates                                   219,486              --
   Other Payables                                      149,500         149,500
                                                   -----------     -----------

   Total Current Liabilities                         1,676,388         775,071
                                                   -----------     -----------

Commitments                                                 --              --
                                                   -----------     -----------

Common Stock Subject to Repurchase,
   8,566,113 Shares Issued and
   Outstanding at December 31, 2001                  3,547,973              --
                                                   -----------     -----------

Stockholders' Equity [Deficit]:
   Preferred Stock, $.01 Par Value,
     20,000,000 Shares Authorized;
     None Issued and Outstanding in
     2001 and 2000, Respectively                            --              --

   Common Stock, $.01 Par Value,
     350,000,000 Shares Authorized;
     170,703,898 and 154,919,647
     Issued and Outstanding in 2001
     and 2000, Respectively                          1,707,037       1,549,197

   Additional Paid-in Capital                       25,876,690       1,274,035

   Deficit Accumulated in the Development Stage    (29,702,493)     (1,210,251)
                                                   -----------     -----------

   Total Stockholders' Equity [Deficit]             (2,118,766)      1,612,981
                                                   -----------     -----------

   Total Liabilities and Stockholders'
     Equity [Deficit]                              $ 3,105,595     $ 2,388,052
                                                   ===========     ===========


See Notes to Financial Statements.

                                      F-3
                                                                              35
<PAGE>
<TABLE>

FUELNATION, INC.
[A DEVELOPMENT STAGE COMPANY]
--------------------------------------------------------------------------------

STATEMENTS OF OPERATIONS
--------------------------------------------------------------------------------
<CAPTION>
                                                        Years ended         Cumulative
                                                        December 31,          During
                                                -------------------------   Development
                                                   2 0 0 1       2 0 0 0       Stage
                                                ------------  -----------  ------------
<S>                                             <C>           <C>          <C>
Revenue                                         $         --  $        --  $         --
                                                ------------  -----------  ------------

Operating Expenses:
   Salaries and Wages Including Related Taxes        631,479      190,541       822,020
   Legal and Professional                            217,404      393,405       610,809
   Marketing and Promotion                           193,324      213,243       406,567
   Consulting Fees                                    29,434           --        29,434
   Consulting Fees - Related Party                        --      221,162       221,162
   Depreciation                                       46,552       23,276        69,828
   Rent - Related Party                               38,974        6,413        45,387
   Other General and Administrative Expenses         311,471      147,211       458,682
   Research and Development Cost                          --       10,000        10,000
   Non-Cash Employee Compensation                  6,367,966           --     6,367,966
   Non-Cash Consulting Fees                       16,278,718           --    16,278,718
   Non-Cash Consulting Fees - Related Party        3,585,000           --     3,585,000
   Non-Cash Financing Costs                           92,956           --        92,956
                                                ------------  -----------  ------------

   Total Operating Expenses                       27,793,278    1,205,251    28,998,529
                                                ------------  -----------  ------------

   Operating Loss                                (27,793,278)  (1,205,251)  (28,998,529)
                                                ------------  -----------  ------------

Other Expenses:
   Other Expense                                    (694,982)          --      (694,982)
   Interest Expense                                   (8,982)          --        (8,982)
                                                ------------  -----------  ------------

   Total Other Expenses                             (703,964)          --      (703,964)
                                                ------------  -----------  ------------

   Loss Before Income Taxes                      (28,497,242)  (1,205,251)  (29,702,493)

Income Taxes                                              --           --            --
                                                ------------  -----------  ------------

   Net Loss                                     $(28,497,242) $(1,205,251) $(29,702,493)
                                                ============  ===========  ============

Basic and Diluted Net Loss Per Common Share     $       (.17)     $  (.01)
                                                ============  ===========

Weighted Average Common Shares Outstanding       165,447,113  145,878,549
                                                ============  ===========
</TABLE>

See Notes to Financial Statements.

                                      F-4
                                                                              36
<PAGE>
<TABLE>

FUELNATION, INC.
[A DEVELOPMENT STAGE COMPANY]
-----------------------------------------------------------------------------------------------------------------------------------

STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY [DEFICIT]
-----------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
                                                                                                         Deficit
                                                Series D                                               Accumulated
                                             Preferred Stock          Common Stock        Additional     in the        Total
                                           --------------------  -----------------------    Paid-in    Development  Stockholders'
                                             Shares     Amount      Shares      Amount      Capital       Stage        Equity
                                           ----------  --------  -----------  ----------  -----------  -----------  -------------
<S>                                        <C>         <C>       <C>          <C>         <C>          <C>          <C>
Balance - December 31, 1999                 5,000,000  $ 50,000   94,000,000  $  940,000  $  (543,156) $        --  $     446,844

October 2000 - Acquired Equity of
   Shell in Stock Acquisition                      --        --    6,066,466      60,665     (834,385)          --       (773,720)
October 2000 - Retirement of Common
   Stock in Lieu of Debt Paid by
   Related Party                                   --        --     (340,000)     (3,400)       3,400           --             --
November 2000 - Conversion
   of Preferred Stock to Common Stock      (5,000,000)  (50,000)  50,000,000     500,000     (450,000)          --             --
December 2000 - Issuance of Common
   Stock in Private Placement Transaction          --        --    5,193,181      51,932    3,093,176           --      3,145,108
Net Loss                                           --        --           --          --           --   (1,205,251)    (1,205,251)
                                           ----------  --------  -----------  ----------  -----------  -----------  -------------

Balance - December 31, 2000                        --        --  154,919,647   1,549,197    1,269,035   (1,205,251)     1,612,981

February 2001 - Issuance of Common
   Shares in Private Placement
   Transactions                                    --        --       38,460         385       24,615           --         25,000
February 2001 - Issuance of Stock Options
   for Consulting Services                         --        --           --          --    2,985,000           --      2,985,000
March 2001 - Issuance of Common Shares
   in Private Placement Transactions               --        --      101,500       1,015      100,485           --        101,500
March 2001 - Shares Pledged for
   Consulting Costs                                --        --           --          --    9,200,880           --      9,200,880
April 2001 - Issuance of Common
   Stock and Affiliate-Owned Company
   Common Stock for Consulting Costs               --        --    2,000,000      20,000    3,129,375           --      3,149,375
                                           ----------  --------  -----------  ----------  -----------  -----------  -------------

Totals - Forward                                   --  $     --  157,059,607  $1,570,597  $16,709,390  $(1,205,251) $  17,074,736

See Notes to Financial Statements.

                                                              F-5
                                                                              37
<PAGE>


FUELNATION, INC.
[A DEVELOPMENT STAGE COMPANY]
----------------------------------------------------------------------------------------------------------------------------------

STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY [DEFICIT]
----------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
                                                                                                         Deficit
                                                Series D                                               Accumulated
                                             Preferred Stock          Common Stock        Additional     in the         Total
                                           --------------------  -----------------------    Paid-in    Development   Stockholders'
                                             Shares     Amount      Shares      Amount      Capital        Stage        Equity
                                           ----------  --------  -----------  ----------  -----------  ------------  -------------
<S>                                        <C>         <C>       <C>          <C>         <C>          <C>           <C>
Totals - Forwarded                                 --  $     --  157,059,607  $1,570,597  $16,709,390  $ (1,205,251) $  17,074,736

April 2001 - Cancellation of Shares Issued
   in Private Placement Transaction                --        --      (15,385)       (154)      (9,846)           --        (10,000)
April 2001 - Issuance of Stock Options
   to Employees                                    --        --           --          --    6,212,966            --      6,212,966
June 2001 - Issuance of Common Stock in
   Satisfaction of Liabilities and Payment
   of Professional Expenses                        --        --      405,550       4,055      271,445            --        275,500
June 2001 - Issuance of Common Stock for
   Payment of Technology and Consulting
   Costs                                           --        --    4,500,000      45,000    1,397,500            --      1,442,500
June 2001 - Issuance of Common Stock
   to Acquire Assignment of Contract               --        --      290,000       2,900      205,900            --        208,800
June 2001 - Issuance of Common Stock
   for Payment of Consulting Costs and
   Exercise of Stock Options                       --        --    2,500,000      25,000      590,000            --        615,000
August 2001 - Issuance of Warrants and
   Affiliate-Owned Company Common Stock
   for Consulting Costs                            --        --           --          --    3,024,796            --      3,024,796
September 2001 - Stock Options Exercised
   by Officers Pursuant to Employment
   Agreements                                      --        --   14,530,239     145,301           --            --        145,301
October 2001 - Issuance of Stock Options
   to Employees and Warrants and
   Affiliate-Owned Company Common
   Stock to Non-Employees for Financing
   and Consulting Costs                            --        --           --          --      696,850            --        696,850
November 2001 - Consulting Costs -
   Shares not Yet Issued                           --        --           --          --      240,000            --        240,000
December 2001 - Grant of Put Options               --        --   (8,566,113)    (85,662)  (3,462,311)           --     (3,547,973)
Net Loss                                           --        --           --          --           --   (28,497,242)   (28,497,242)
                                           ----------  --------  -----------  ----------  -----------  ------------  -------------

   Balance -  December 31, 2001                    --  $     --  170,703,898  $1,707,037  $25,876,690  $(29,702,493) $  (2,118,766)
                                           ==========  ========  ===========  ==========  ===========  ============  =============
</TABLE>

See Notes to Financial Statements.

                                                                  F-6
                                                                              38
<PAGE>
<TABLE>

FUELNATION, INC.
[A DEVELOPMENT STAGE COMPANY]
-------------------------------------------------------------------------------------------------

STATEMENTS OF CASH FLOWS
-------------------------------------------------------------------------------------------------
<CAPTION>
                                                                Years ended          Cumulative
                                                                December 31,           During
                                                          -------------------------  Development
                                                            2 0 0 1       2 0 0 0       Stage
                                                          ------------  -----------  ------------
<S>                                                       <C>           <C>          <C>
Cash Flows:
   Net Loss                                               $(28,497,242) $(1,205,251) $(29,702,493)
   Adjustments to Reconcile Net Loss to Net
     Cash Provided by [Used for] Operating Activities:
     Depreciation                                               46,552       23,276        69,828
     Non-Cash Employee Compensation                          6,367,966           --     6,367,966
     Non-Cash Consulting Fees                               16,278,718           --    16,278,718
     Non-Cash Consulting Fees - Related Party                3,585,000           --     3,585,000
     Non-Cash Financing Costs                                   92,956           --        92,956
     Write-Down of Investments                                 657,686           --       657,686
     Other                                                      32,500           --        32,500
   Changes in Assets and Liabilities:
     [Increase] Decrease in:
       Inventory                                                (6,716)    (553,623)     (560,339)
       Due from Escrow Accounts                                390,470     (435,470)      (45,000)
       Due from Affiliates                                     537,661     (232,981)      304,680
       Other                                                    39,120      (30,415)        8,705
     Increase [Decrease] in:
       Accounts Payable                                        159,703      240,732       400,435
       Accrued Liabilities                                     182,442       38,459       220,901
       Payroll and Taxes Payable                               398,627      125,800       524,427
                                                          ------------  -----------  ------------

   Net Cash - Operating Activities                             265,443   (2,029,473)   (1,764,030)
                                                          ------------  -----------  ------------

Investing Activities:
   Payments for Fixed Assets                                   (11,258)    (232,755)     (244,013)
   Payments for Technology                                    (432,640)    (112,263)     (544,903)
   Cash Received in Acquisition                                     --        1,109         1,109
   Advances Toward Pending Acquisition                              --     (402,724)     (402,424)
                                                          ------------  -----------  ------------

   Net Cash - Investing Activities                            (443,898)    (746,633)   (1,190,531)
                                                          ------------  -----------  ------------

Financing Activities:
   Net Proceeds from Issuance of Common Stock                  116,500    3,145,108     3,261,608
   Proceeds from Issuance of Convertible Debt                   35,953           --        35,953
   Exercise of Stock Options                                    15,000           --        15,000
   Payment of Loans Payable                                         --     (100,000)     (100,000)
   Debt Restructuring                                               --     (255,804)     (255,804)
                                                          ------------  -----------  ------------

   Net Cash - Financing Activities                             167,453    2,789,304     2,956,757
                                                          ------------  -----------  ------------

   Net [Decrease] Increase in Cash                             (11,002)      13,198         2,196

Cash - Beginning of Years                                       13,198           --            --
                                                          ------------  -----------  ------------

   Cash - End of Years                                    $      2,196  $    13,198  $      2,196
                                                          ============  ===========  ============
See Notes to Financial Statements.

                                      F-7
                                                                              39
<PAGE>
FUELNATION, INC.
[A DEVELOPMENT STAGE COMPANY]
-------------------------------------------------------------------------------------------------

STATEMENTS OF CASH FLOWS
-------------------------------------------------------------------------------------------------
<CAPTION>
                                                                Years ended          Cumulative
                                                                December 31,           During
                                                          -------------------------  Development
                                                            2 0 0 1       2 0 0 0       Stage
                                                          ------------  -----------  ------------
<S>                                                       <C>           <C>          <C>
Supplemental Disclosures of Cash Flow Information:
   Cash paid during the years for:
     Interest                                             $        673  $        --  $        673
     Income Taxes                                         $         --  $        --  $         --
</TABLE>

Supplemental Disclosures of Noncash
Investing and Financing Activities:
   During the year ended December 31, 2001:
     The Company issued the following:
                                                          Issued for
                                               ---------------------------------
                                               Consulting   Employee  Financing
                                               ---------- ------------ ---------
                     Issued                     Services  Compensation   Costs
      ---------------------------------------- ---------- ------------ ---------

   1)  3,300,000   Shares of Common Stock      $2,743,500 $        -- $       --
      17,930,683   Stock Options                2,985,000   6,367,966         --
       3,317,309   Warrants                       599,796          --     92,956
                                               ---------- ----------- ----------

                                               $6,328,296 $ 6,367,966 $   92,956
                                               ========== =========== ==========
   2)  4,500,000   Shares of Common Stock for:
                                            Equipment Deposits        $  752,500
                                            Technology                   590,000
                                            Consulting Agreements (of
                                             which $33,333 is Prepaid
                                             at December 31, 2001)       100,000
                                                                      ----------
                                                                      $1,442,500
                                                                      ==========

   3)    395,550 Shares of Common Stock for the payment of $276,900 of debt.

     Additionally, the following transactions occurred in 2001:

     1)   Options to purchase  14,530,239  shares of common stock were exercised
          by a related  party and the amount of $145,301 was offset  against the
          amount due to affiliates.

     2)   A related party transferred  14,237,500 shares of Company common stock
          owned by him to non-affiliated  entities for legal fees of $25,000 and
          consulting costs of $4,027,875.  The amount of $4,052,875 was recorded
          as additional paid-in capital.

     3)   The Company entered into stock put agreements with several individuals
          owning  8,566,113  shares  of  Company  common  stock.  As  a  result,
          $3,547,973  was  reclassified  as "Common Stock Subject to Repurchase"
          from equity.

     4)   The  Company  entered  into a  consulting  agreement  and  recorded  a
          non-cash  expense of $240,000 which was the fair value of common stock
          issuable by the Company per the agreement. Such shares were not issued
          as of December  31, 2001 and the total amount of $240,000 was credited
          to additional paid-in capital.

     5)   The  Company,  through its CEO,  pledged  shares of common stock to be
          issued  for  various  consulting  services.  The  Company  recorded  a
          non-cash  charge to expense of $9,200,880  which was equal to the fair
          value of such shares at the time they were  pledged.  Such shares were
          not issued as of December 31, 2001 and the total amount of  $9,200,880
          was credited to additional paid-in capital.

During the year ended December 31, 2000,  the  predecessor  company,  Regenesis,
issued  options  to  purchase  216,000  shares  of common  stock for  consulting
services which were valued at $10,800.

See Notes to Financial Statements.

                                      F-8
                                                                              40
<PAGE>


FUELNATION, INC.
[A DEVELOPMENT STAGE COMPANY]
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

[1] Description of Business

Organization  - FuelNation,  Inc. was  organized  under the laws of the State of
Florida  on July 6, 1993  under the name  International  Pizza  Corporation.  On
October 30,  1995,  the  Company  changed  its name to QPQ  Corporation,  and on
November 4, 1997,  changed its name to Regenesis  Holdings,  Inc. On October 17,
2000, the Company changed its name to FuelNation, Inc.

Description of Development Stage Activities - FuelNation, Inc. [the "Company" or
"FuelNation"], a Florida corporation,  located in Davie, Florida has been in the
development stage since its  reorganization on October 13, 2000. It is primarily
staged in the  development of a proprietary  software  system which collects and
measures data dealing with liquid fuel.

Reorganization - The financial  statements as of and for the year ended December
31,  2000  give  effect  to  the  acquisition  agreement  [the  "agreement"]  of
FuelNation,  Inc. [formerly  Regenesis Holdings,  Inc.  ["Regenesis"] with Triad
Petroleum,  LLC  ["Triad"].  The closing date of the  agreement  was October 13,
2000,  however,  for  accounting  purposes the  transaction  is treated as being
effective September 30, 2000. In connection with the agreement, Regenesis issued
94,000,000  shares of  common  stock and  5,000,000  shares of newly  designated
Series D preferred stock,  convertible into 50,000,000 shares of common stock to
the members of Triad.  As a result of the  agreement,  the members of Triad will
own  approximately  96%  of the  outstanding  common  stock  of  Regenesis.  For
accounting purposes,  the agreement is being recorded as a recapitalization with
the members of Triad as the acquirers. The 94,000,000 shares of common stock and
5,000,000  shares of Series D preferred  stock are shown as outstanding  for all
periods presented in the same manner as for a stock split. In November 2000, the
5,000,000  share of Series D  preferred  stock were  converted  into  50,000,000
shares of common stock.  The members of Triad  relinquished  their entire rights
and ownership in the technology of the proprietary  computer and software system
[the "Technology"] in exchange for such shares. The financial  statements of the
Company reflect the results of operations of the development stage operations of
the  Technology  acquired from Triad and Regenesis from October 13, 2000 through
December 31, 2001.  The financial  statements  prior to October 13, 2000 reflect
the  development  stage  operations of the Technology  acquired from Triad.  Pro
forma  information on this  transaction is not presented as, at the date of this
transaction,  Regenesis  is  considered  a public  shell  and  accordingly,  the
transaction will not be considered a business  combination.  Concurrent with the
transaction,  Regenesis Holdings,  Inc. changed its name to FuelNation,  Inc. No
adjustment of assets to "fair value" has been recorded.

[2] Summary of Significant Accounting Policies

Cash and Cash  Equivalents - Cash  equivalents  are comprised of certain  highly
liquid  investments with a maturity of three months or less when purchased.  The
Company had no cash equivalents as of December 31, 2001.

Inventory - Inventory consists of technological components which will be used in
the Company's  operations.  Inventory is stated at the lower of cost [determined
by the First In, First Out ["FIFO"] method] or market.

                                      F-9
                                                                              41
<PAGE>


FUELNATION, INC.
[A DEVELOPMENT STAGE COMPANY]
NOTES TO FINANCIAL STATEMENTS, Sheet #2
--------------------------------------------------------------------------------

[2] Summary of Significant Accounting Policies [Continued]

Property and Equipment and  Depreciation -  Expenditures  for  improvements  and
additions are  capitalized  at cost while  expenditures  for normal  repairs and
maintenance   are  charged   against  income  as  incurred.   Depreciation   and
amortization  are  provided  primarily  using  the  straight-line   method  over
estimated useful lives as follows:

Office Furniture and Equipment                 5 Years
Computer Equipment                             5 Years

During  2001  and  2000,   depreciation   expense   was  $46,552  and   $23,276,
respectively.

Concentration of Credit Risk - Financial  instruments which potentially  subject
the  Company  to  concentrations  of  credit  risk  consist  of  cash  and  cash
equivalents.  The Company places its cash with a high credit  quality  financial
institution,  and as a result feels its exposure to such credit risk is limited.
At December 31, 2001, the Company had no amounts in the financial institution in
excess of FDIC insurance limits.

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

Impairment - Long-lived  assets of the Company are reviewed at least annually as
to whether their  carrying  value has become  impaired  pursuant to Statement of
Financial  Accounting Standards ["SFAS"] No. 121, "Accounting for the Impairment
of Long-Lived  Assets and for Long-Lived  Assets to Be Disposed Of." SFAS No 121
requires  long-lived  assets,  if  impaired,  to be  remeasured  at fair  value,
whenever events or changes in circumstances indicate that the carrying amount of
the asset may not be  recoverable.  Management  also  reevaluates the periods of
amortization of long-lived  assets to determine whether events and circumstances
warrant revised estimates of useful lives.

Capitalized  Technology Costs - Capitalization  of technology  costs,  including
computer   software   development   costs  begins  upon  the   establishment  of
technological   feasibility.   Technological   feasibility   for  the  Company's
technology is generally  based upon  achievement of a detail program design free
of high risk development issues. The establishment of technological  feasibility
and the ongoing  assessment of  recoverability  of capitalized  technology costs
requires  considerable  judgement by management with respect to certain external
factors,  including, but not limited to, technological feasibility,  anticipated
future  gross  revenues,  estimated  economic  life and changes in software  and
hardware technology.

Amortization of capitalized technology costs commences when the related products
become available for general release to customers. Amortization is provided on a
product by product basis.  The annual  amortization is the greater of the amount
computed  using (a) the ratio that current gross  revenues for a product bear to
the total of current and  anticipated  future gross revenues for that product or
(b) the straight-line  method over the remaining  estimated economic life of the
product.

The  Company  periodically  performs  reviews  of  the  recoverability  of  such
capitalized  technology  costs.  At  the  time  a  determination  is  made  that
capitalized  amounts are not recoverable based on the estimated cash flows to be
generated from the applicable  technology  net realizable  value,  any remaining
capitalized amounts are written off.

                                      F-10
                                                                              42
<PAGE>


FUELNATION, INC.
[A DEVELOPMENT STAGE COMPANY]
NOTES TO FINANCIAL STATEMENTS, Sheet #3
--------------------------------------------------------------------------------

[2] Summary of Significant Accounting Policies [Continued]

Capitalized  Technology Costs  [Continued] - Information  related to capitalized
technology costs applicable to continuing operations is as follows:

                                                      Years ended
                                                      December 31,
                                                ------------------------
                                                  2 0 0 1      2 0 0 0
                                                -----------  -----------

Beginning of Year                               $   559,107  $        --
Capitalized                                       1,022,640      559,107
                                                -----------  -----------

   Totals                                       $ 1,581,747  $   559,107
   ------                                       ===========  ===========

Advertising Expense - It is the Company's policy to expense advertising costs as
incurred.  Advertising  expense  in 2001  and 2000 was  $193,324  and  $213,243,
respectively.

Income Taxes - Pursuant to SFAS No. 109,  "Accounting  for Income Taxes," income
tax expense  [or  benefit]  for the year is the sum of deferred  tax expense [or
benefit]  and income  taxes  currently  payable [or  refundable].  Deferred  tax
expense [or benefit] is the change  during the year in a company's  deferred tax
liabilities and assets. Deferred tax liabilities and assets are determined based
on  differences  between  financial  reporting  and  tax  basis  of  assets  and
liabilities,  and are measured using the enacted tax rates and laws that will be
in effect when the differences are expected to reverse.

Income  [Loss]  Per  Share - Basic  earnings  [loss]  per share is  computed  by
dividing income [loss] available to common  stockholders by the weighted average
number of  common  shares  outstanding  during  the  period.  SFAS No.  128 also
requires a dual presentation of basic and diluted earnings per share on the face
of  the  statement  of  operations  for  all  companies  with  complex   capital
structures.  Diluted  earnings per share reflects the amount of earnings for the
period available to each share of common stock outstanding  during the reporting
period,  while giving effect to all dilutive  potential  common shares that were
outstanding during the period,  such as common shares that could result from the
potential exercise or conversion of securities into common stock.

The  computation  of diluted  earnings  per share  does not  assume  conversion,
exercise,  or contingent  issuance of securities that would have an antidilutive
effect on per share  amounts  [i.e.,  increasing  earnings per share or reducing
loss per share].  The dilutive  effect of  outstanding  options and warrants and
their   equivalents  are  reflected  in  dilutive  earnings  per  share  by  the
application  of the treasury  stock method which  recognizes the use of proceeds
that could be  obtained  upon  exercise of options  and  warrants  in  computing
diluted  earnings  per share.  It  assumes  that any  proceeds  would be used to
purchase common stock at the average market price during the period. Options and
warrants will have a dilutive  effect only when the average  market price of the
common  stock  during the period  exceeds the  exercise  price of the options or
warrants.   The  Company's  options  and  warrants  were  not  included  in  the
computation of loss per share for 2001 and 2000 because to do so would have been
antidilutive  for these years.  See Note 10 for a detail of options and warrants
that could potentially dilute future earnings per share.

                                      F-11
                                                                              43
<PAGE>


FUELNATION, INC.
[A DEVELOPMENT STAGE COMPANY]
NOTES TO FINANCIAL STATEMENTS, Sheet #4
--------------------------------------------------------------------------------

[2] Summary of Significant Accounting Policies [Continued]

Stock-Based  Compensation  - The Company  follows  Accounting  Principles  Board
Opinion No. 25,  "Accounting  for Stock Issued to  Employees"  [APB No. 25] with
regard to the  accounting  for its  employee  stock  options.  Under APB No. 25,
compensation  expense is recognized  only when the exercise  price of options is
below the market price of the underlying stock on the date of grant. The Company
applies  the   provisions  of  SFAS  No.  123,   "Accounting   for   Stock-Based
Compensation"  to  non-employee  stock-based  compensation  and  the  pro  forma
disclosure provisions of SFAS No. 123 to employee stock-based compensation.

[3] Going Concern

The  accompanying  financial  statements  have been  prepared  assuming that the
Company  will  continue  as a  going  concern.  As  discussed  in the  financial
statements,  the  Company is in the  development  stage,  has a working  capital
deficiency and has suffered  significant  losses.  These factors,  among others,
raise  substantial  doubt about its ability to continue as a going concern.  The
financial  statements do not include any adjustments  that might result from the
outcome of this  uncertainty.  Management plans for the Company to raise capital
to fund operations  through equity and/or debt financing.  It is not possible to
predict at this time the success of management's efforts to raise capital.

[4] Related Party Transactions

The Company has borrowed  monies from  related  parties to fund  operations.  In
2001, the Company borrowed  approximately  $393,000 from Fuel America LLC ["Fuel
America"],  an entity  controlled by the Chairman of the  Board/Chief  Executive
Officer  ["CEO"].  In  October  2001,  the CEO  exercised  options  to  purchase
14,380,239  shares of common  stock at an exercise  price of $.01 per share [See
Note 10 for  compensation  expense  related to issuance of these  options].  The
proceeds of $143,802 were used to reduce the amount due to Fuel  America.  Also,
in 2001, a Company loan payable of $30,000 was settled by the CEO issuing shares
of Company  common  stock  owned by him to the  loanholder.  The loan  amount of
$30,000 was offset against the amount due to Fuel America. At December 31, 2001,
the balance owed Fuel  America was  $219,486.  Currently,  there are no interest
or repayment terms for the debt and it is treated as if due on demand.

In 2001, the CEO transferred  14,237,500 shares of common stock owned personally
by him to  several  non-affiliated  entities  for  consulting  and  professional
services  incurred by the  Company.  The Company  recorded a non-cash  charge to
operations in 2001 of $4,052,875  for such services which  represented  the fair
value of such stock when  transferred.  This amount was  credited to  additional
paid-in  capital.  The CEO has agreed to accept  shares of common stock equal to
the number of shares he transferred to pay the Company's expenses.

The Company entered into two separate agreements for consulting services with an
entity controlled by a director of the Company. Pursuant to such agreements this
entity was paid  approximately  $221,000,  was issued 1,000,000 shares of common
stock and was granted options to purchase 1,500,000 shares of common stock at an
exercise  price of $.01.  The  1,500,000  options were  exercised  in 2001.  The
Company  incurred a non-cash  charge to operations of $3,585,000  related to the
stock issuances and options granted.

The Company  shared office space with Triad,  who together  leased such facility
from an entity controlled by a principal  stockholder of the Company.  The lease
expired  in  the  fourth   quarter  of  2001  and  since  then  rent  was  on  a
month-to-month  basis until March 2002 when the Company  vacated these premises.
Rent expense amounted to $38,974 and $6,413 in 2001 and 2000, respectively.

The Company,  through its CEO,  pledged  shares of common stock to be issued for
various consulting  services.  The Company recorded a non-cash charge to expense
of $9,200,880  which was equal to the fair value of such shares at the time they
were pledged.  Such shares were not issued as of December 31, 2001 and the total
amount of $9,200,880 was credited to additional paid-in capital.

                                      F-12
                                                                              44
<PAGE>
FUELNATION, INC.
[A DEVELOPMENT STAGE COMPANY]
NOTES TO FINANCIAL STATEMENTS, Sheet #5
--------------------------------------------------------------------------------

[5] Convertible Debt

In October  2001,  the  Company  borrowed  approximately  $36,000  from four (4)
individuals  and  issued  9%  convertible  subordinated  promissory  notes  [the
"Notes"],  which are due by September 30, 2002 and are convertible  into 258,654
shares of the  Company's  common  stock (a rate of one share of common stock for
each $0.139 principal amount of notes).  Additionally,  the Company issued stock
purchase warrants to the noteholders, which entitled the noteholders to purchase
517,309  shares of common stock at an exercise price of  approximately  $.15 per
share. The warrants were issued at twice the conversion rate of the common stock
(two warrants for each $0.139  principal  amount of notes).  The notes are shown
net of a discount  of  approximately  $30,000  which  represents  the fair value
assigned to the warrants that were issued.  The discount is being amortized over
the life of the debt. Amortization amounted to approximately $7,500 in 2001, and
is charged to interest  expense.  Unamortized  discount at December  31, 2001 is
approximately $22,500.

[6] Payroll and Taxes Payable

The Company  has  primarily  funded its payroll  costs  through  borrowing  from
related  parties [See Note 4].  Payroll taxes have become  delinquent  since the
second quarter of 2001. These  liabilities  which include penalties and interest
through December 31, 2001 amount to $524,427.  Penalties (to the maximum limits)
and interest will accrue on such payroll tax liabilities,  as well as additional
payroll tax liabilities  incurred  subsequent to December 31, 2001,  until paid.
The CEO has  deferred  payment  of  approximately  $98,000  of his  salary as of
December 31, 2001.

[7] Common Stock Subject to Repurchase

In June 2001, the Company issued  4,500,000 shares of the Company's common stock
as  consideration  for  equipment  deposits and  consulting  services  valued at
$1,442,500. Additionally, in April 2001, the CEO transferred 2,687,500 shares of
Company  common stock owned by him valued at $1,209,375  to the same entity.  In
December  2001,  the  Company  entered  into  an  agreement  ["Put  Option"]  to
repurchase  all  such  stock  at a price  of $.65 per  share  [an  aggregate  of
$4,671,875]  at the option of the  holders.  The Company does not expect the Put
Option to be  exercised  in the near term and has valued them at the fair market
value of the common stock when issued [$2,651,875]. The CEO has agreed to accept
shares of common stock equal to the number of common  shares he  transferred  to
pay the Company's expenses.

In December 2001,  the Company  entered into an agreement  ["Put  Agreement"] to
repurchase  568,462 and 810,151 shares of Company common stock from two separate
groups of individuals at a price of $.65 per share [an aggregate of $896,098] at
the option of the holders.  Such  individuals  had purchased their stock through
the  Company's  Regulation D offering in December 2000 at the same price of $.65
as the Put  Agreement.  The  amount  of  $896,098  has  been  reclassified  from
stockholders' equity to common stock subject to repurchase at December 31, 2001.

                                      F-13
                                                                              45
<PAGE>
FUELNATION, INC.
[A DEVELOPMENT STAGE COMPANY]
NOTES TO FINANCIAL STATEMENTS, Sheet #6
--------------------------------------------------------------------------------

[8] Stockholders' Equity

Capital  Stock - As of December 31,  2001,  the Company is  authorized  to issue
370,000,000  shares of capital stock, of which 20,000,000  shares are classified
as preferred stock, par value of $.01 per share,  issuable in one or more series
and 350,000,000 shares are classified as common stock, par value $.01.

In December 2000 and January  2001,  the Company  completed a private  placement
pursuant to Rule 506, Regulation D under the Securities Act of 1933, as amended,
of 5,216,256 shares of common stock (5,193,181  shares in 2000 and 23,075 shares
in 2001) at $.65 per share.  The Company  received net proceeds of approximately
$3,160,000 ($3,145,000 in 2000 and $15,000 in 2001).

In March 2001,  the Company  sold  101,500  shares of common  stock at $1.00 per
share pursuant to an additional Regulation D offering.

During 2001, 3,300,000 shares of common stock were issued to various individuals
for consulting  services,  which resulted in a non-cash  charge to operations of
$2,743,500,  and 395,550  shares of common  stock were issued for the payment of
approximately $277,000 of debt.

During  2001,  options  to  purchase  14,530,239  shares  of common  stock  were
exercised  at $.01 per share by an officer  of the  Company  (14,380,239)  and a
former officer of the Company (150,000).

Additionally  in 2001,  a  consultant  exercised  options to purchase  1,500,000
shares of common stock at $.01 per share.

See Notes 4, 5, 7 and 10 for additional equity transactions.

[9] Income Taxes

An analysis of the components of income taxes is as follows:

                                                            Years ended
                                                            December 31,
                                                   ---------------------------
                                                      2 0 0 1       2 0 0 0
                                                   ------------  -------------
Current:
   Federal                                         $         --  $          --
   State                                                     --             --
                                                   ------------  -------------

   Totals                                                    --             --
                                                   ------------  -------------

Deferred:
   Federal                                                   --             --
   State                                                     --             --
                                                   ------------  -------------

   Totals                                                    --             --
                                                   ------------  -------------

   Totals                                          $         --  $          --
   ------                                          ============  =============

                                      F-14
                                                                              46
<PAGE>
FUELNATION, INC.
[A DEVELOPMENT STAGE COMPANY]
NOTES TO FINANCIAL STATEMENTS, Sheet #7
--------------------------------------------------------------------------------

[9] Income Taxes [Continued]

Income  taxes for  continuing  operations  differs  from the amount  computed by
applying the statutory federal income tax rate as follows:

                                                           Years ended
                                                           December 31,
                                                   ---------------------------
                                                      2 0 0 1       2 0 0 0
                                                   ------------  -------------

Computed Federal  Statutory Tax Benefit            $  9,687,000  $     410,000
Permanent Difference - Non-Deductible Expense        (8,962,000)            --
Valuation Allowance to Reduce Deferred Tax Asset       (725,000)      (410,000)
                                                   ------------  -------------

   Actual                                          $         --  $          --
   ------                                          ============  =============

The components of the net deferred tax asset and liability are as follows:

                                                           Years ended
                                                           December 31,
                                                   ---------------------------
                                                      2 0 0 1       2 0 0 0
                                                   ------------  -------------
Deferred Tax Assets - Current:
   Vacation Accrual                                $     15,000  $          --
   Valuation Allowance                                  (15,000)            --
                                                   ------------  -------------

   Current Deferred Tax Asset                      $         --  $          --
   --------------------------                      ============  =============

Deferred Tax Asset - Long-Term:
   Net Operating Loss Carryforward                 $  1,135,000  $     410,000
   Stock Options                                      2,165,000             --
   Valuation Allowance                               (3,300,000)      (410,000)
                                                   ------------  -------------

   Long-Term Deferred Tax Asset                    $         --  $          --
   ----------------------------                    ============  =============

Total valuation allowance increased by $2,890,000 and $410,000 in 2001 and 2000,
respectively.

At December 31, 2001,  the Company had  approximately  $3,325,000 of federal net
operating tax loss carryforwards expiring at various dates through 2021. The Tax
Reform  Act of 1986  enacted  a complex  set of rules  which  limit a  company's
ability to utilize net operating loss carryforwards and tax credit carryforwards
in periods following an ownership change. These rules define an ownership change
as a greater than 50 percent  point change in stock  ownership  within a defined
testing  period  which is  generally  a  three-year  period.  As a  result,  the
Company's   utilization  of  its  net  operating  loss  carryforwards  could  be
significantly limited.

                                      F-15
                                                                              47
<PAGE>
FUELNATION, INC.
[A DEVELOPMENT STAGE COMPANY]
NOTES TO FINANCIAL STATEMENTS, Sheet #8
--------------------------------------------------------------------------------

[10] Stock Options and Warrants

In April and October 2001, the Company  granted  options to purchase  16,430,683
shares of Company  common stock to 8 employees at an exercise  price of $.01 per
share. The Company  incurred a non-cash charge to operations of $6,367,966,  the
fair value at date of grant,  in  connection  with the issuance of such options.
Also in February 2001, the Company issued options to purchase  1,500,000  shares
of common stock at an exercise  price of $.01 per share to an outside  party for
consulting  services.  The Company  incurred a non-cash  charge to operations of
$2,985,000,  the fair value at date of grant,  related to these options.  During
2001, 14,530,239 employee and 1,500,000 non-employee options were exercised.

In August and October 2001, the Company issued 3,317,309 stock purchase warrants
with exercise  prices ranging from $.15 to $2.50.  Warrants to purchase  517,309
shares of common stock were issued in connection with convertible debt [See Note
5].  Warrants to purchase  2,500,000  and  300,000  shares of common  stock were
issued for  consulting  and  financing  costs and were  valued at  $599,796  and
$92,956, respectively, the fair value at date of grant.

In 2000 the predecessor company, Regenesis,  entered into a consulting agreement
with Equity Group to provide  certain  services.  These services were terminated
with the merger.  The services  provided  certain  compensation to Equity Group.
Options  were granted to Equity  Group to purchase  216,000  shares in 3 lots of
72,000  shares each to be  exercised by March 7, 2005 at price per lot of; 1 lot
at $2.50 per share, 1 lot at $5.00 per share,  and 1 lot at $7.50 per share.  No
options have been  exercised.  The options were recorded at their estimated fair
market value of $10,800.  These options,  as well as, 250,000  options issued in
1999 by Regenesis were recognized as outstanding and exercisable by the Company.

A summary of the changes in outstanding  common stock options and warrants is as
follows:
<TABLE>
<CAPTION>
                                               Stock Options                  Warrants
                                      -----------------------------  ---------------------------
                                                   Weighted-Average             Weighted-Average
                                         Shares     Exercise Price     Shares    Exercise Price
                                      -----------  ----------------  ---------  ----------------
<S>                                   <C>          <C>               <C>        <C>
Balance - December 31, 1999               250,000  $           2.50         --  $             --

   Granted                                216,000              5.00         --                --
   Exercised                                   --                --         --                --
   Expired                                     --                --         --                --
                                      -----------  ----------------  ---------  ----------------

Balance - December 31, 2000               466,000              3.66         --                --

   Granted                             17,930,683               .01  3,317,309              1.17
   Exercised                          (16,030,239)              .01         --                --
   Canceled                                    --                --         --                --
                                      -----------  ----------------  ---------  ----------------

Balance Outstanding and Exercisable -
   December 31, 2001                    2,366,444  $            .73  3,317,309  $           1.17
                                      ===========  ================  =========  ================
</TABLE>

The  options  and  warrants  granted  during  2001 are  distributed  as follows,
relative to the  difference  between the  exercise  price and the stock price at
grant date:
<TABLE>
<CAPTION>
                                                     Number    Weighted-Average  Weighted-Average
                                                    Granted     Exercise Price      Fair Value
                                                   ----------  ----------------  ----------------
<S>                                                <C>         <C>               <C>
Options - Exercise Price is Less Than Stock Price  17,930,683  $            .01  $            .52
                                                   ==========  ================  ================

Warrants - Exercise Price is Less Than Stock Price    817,309  $            .15  $            .35
                                                   ==========  ================  ================

Warrants - Exercise Price Exceeds Stock Price       2,500,000  $           1.50  $            .24
                                                   ==========  ================  ================
</TABLE>

                                      F-16
                                                                              48
<PAGE>
FUELNATION, INC.
[A DEVELOPMENT STAGE COMPANY]
NOTES TO FINANCIAL STATEMENTS, Sheet #9
--------------------------------------------------------------------------------

[10] Stock Options and Warrants [Continued]

The options  granted  during 2000 are  distributed  as follows,  relative to the
difference between the exercise price and the stock price at grant date:

                                      Number  Weighted-Average  Weighted-Average
                                     Granted   Exercise Price      Fair Value
                                     -------  ----------------  ----------------
Exercise Price Exceeds Stock Price   216,000  $           5.00  $            .05
                                     =======  ================  ================

The following table summarizes  information  about stock options at December 31,
2001:
<TABLE>
<CAPTION>
                  Outstanding and Exercisable Stock Options        Outstanding and Exercisable Warrants
                 -------------------------------------------  -------------------------------------------
                               Weighted-                                    Weighted-
                               ---------                                    ---------
                                Average         Weighted-                    Average         Weighted-
                                -------         ---------                    -------         ---------
     Range of                  Remaining         Average                    Remaining         Average
     --------                  ---------         -------                    ---------         -------
Exercise Prices    Shares   Contractual Life  Exercise Price   Shares    Contractual Life  Exercise Price
---------------  ---------  ----------------  --------------  ---------  ----------------  --------------
<S>              <C>        <C>               <C>             <C>        <C>               <C>
$.01 - $.01      1,900,444     6.41 Years     $          .01         --                    $           --
$.14595-$.1567          --                    $           --    817,309     4.38 Years     $          .15
$.50 - $1.50            --                    $           --  1,500,000     4.58 Years     $         1.00
$2.00 - $2.50      322,000     2.97 Years     $         2.50  1,000,000     4.58 Years     $         2.25
$5.00 - $7.50      144,000     3.17 Years     $          .01         --                    $           --
                 ---------                                    ---------
                 2,366,444                                    3,317,309
                 =========                                    =========
</TABLE>

The Company applies  Accounting  Principles Board Opinion No. 25, Accounting for
Stock Issued to Employees, and related interpretations, for stock options issued
to employees in accounting for its stock option plans.  Total compensation costs
recognized for stock based employee  compensation  awards was $6,367,966 for the
year ended December 31, 2001. There were no stock options issued to employees in
2000.

The Black-Scholes option valuation model was developed for use in estimating the
fair value of traded  options which have no vesting  restrictions  and are fully
transferable.  In addition,  option valuation models require the input of highly
subjective  assumptions  including the expected stock price volatility.  Because
the  Company's  employee  stock  options  have   characteristics   significantly
different from those of traded  options,  and because  changes in the subjective
input assumptions can materially affect the fair value estimate, in management's
opinion,  the  existing  models do not  necessarily  provide a  reliable  single
measure of the fair value of its employee  stock options.  The weighted  average
fair value of stock options  granted to employees used in determining  pro forma
amounts is estimated at $.39 during 2001.

                                      F-17
                                                                              49
<PAGE>
FUELNATION, INC.
[A DEVELOPMENT STAGE COMPANY]
NOTES TO FINANCIAL STATEMENTS, Sheet #10
--------------------------------------------------------------------------------

[10] Stock Options and Warrants [Continued]

Pro forma  information  regarding  net income or loss and net income or loss per
share has been determined as if the Company had accounted for its employee stock
options under the fair value method  prescribed  under SFAS No. 123,  Accounting
for Stock Based  Compensation.  The fair value of options and warrants issued to
non-employees,  as well as, the pro forma amounts attributable to employee stock
options is estimated at the date of grant using the Black-Scholes option-pricing
model with the following weighted average assumptions:

                                                December 31,
                                                ------------
                                        2 0 0 1            2 0 0 0
                                        -------            -------

Risk-Free Interest Rate                  4.85%              5.15%
Expected Life                            5.67 Years         5 Years
Expected Volatility                      337.39%            338.65%
Expected Dividends                       None               None

The pro forma amounts are indicated below:

                                                            Years ended
                                                            December 31,
                                                               2 0 0 1
                                                               -------

Net Loss as Reported                                       $ (28,497,242)
Pro Forma Net Loss                                         $ (28,607,501)
Loss Per Share as Reported                                 $        (.17)
Pro Forma Loss Per Share                                   $        (.17)

[11] Commitments and Contingencies

Employment  Contracts - The Company has employment contracts with several of its
executives  with  various  expiration  dates  through  March  2004.  One  of the
contracts is  automatically  renewed for two, two year periods.  The  agreements
provide for annual  salaries  ranging  from  $90,000 to $240,000  per year.  The
aggregate  commitment  for future salary at December 31, 2001 was  approximately
$1,400,000.  In accordance  with these  contracts,  the  executives  were issued
options to purchase  16,430,683  shares of the Company's  common stock [See Note
10].

Operating  Leases - The Company  shared  office  space with Triad,  who together
leased such facility from an entity controlled by a principal stockholder of the
Company. The lease expired in the fourth quarter of 2001 and since then rent was
on a  month-to-month  basis  until  March 2002 when the  Company  vacated  these
premises.  Rent  expense  amounted  to  $38,974  and  $6,413  in 2001 and  2000,
respectively.

The Company leases two facilities [one in Lexington, Kentucky and one in Manama,
Bahrain] which house its data centers. Rent is on a month-to-month basis [$2,000
-  Kentucky  and $7,000 -  Bahrain].  Fuel  America  has  guaranteed  all of the
obligations in Bahrain  [approximately  $100,000 at December 31, 2001] on behalf
of the Company  pursuant to a written  corporate  guarantee and stock repurchase
agreement.

Other - The Company has entered into several consulting and financial agreements
for which it issued  stock or granted  options  or  warrants  as  non-refundable
retainers.  Primarily,  these agreements have no future  commitments unless some
event, such as a financing, occurs.

                                      F-18
                                                                              50
<PAGE>
FUELNATION, INC.
[A DEVELOPMENT STAGE COMPANY]
NOTES TO FINANCIAL STATEMENTS, Sheet #11
--------------------------------------------------------------------------------

[12] Litigation

In the normal course of business, the Company is exposed to a number of asserted
and unasserted potential claims. Management,  after review and consultation with
counsel, believes it has meritorious defenses and considers that any liabilities
from these matters would not materially affect the financial position, liquidity
or results of operations of the Company.

[13] Fair Value of Financial Instruments

SFAS No. 107,  "Disclosures about Fair Value of Financial  Instruments," defines
the fair value of a financial  instrument as the amount at which the  instrument
could  be  exchanged  in a  current  transaction  between  willing  parties.  In
assessing the fair value of its cash and cash equivalents, and accounts payables
and accrued  expenses,  management  concluded that the carrying  amount of these
financial instruments approximates fair value because of their short maturities.

[14] Recently Issued Accounting Standards

In August 2001, the Financial  Accounting Standards Board ["FASB"] approved SFAS
No.144,  "Accounting for the Impairment or Disposal of Long-Lived Assets" ["SFAS
No.144"].  The Statement requires that long-lived assets to be disposed of other
than by sale be considered held and used until they are disposed of. SFAS No.144
requires that long-lived assets to be disposed of by sale be accounted for under
the  requirements  of SFAS  No.121.  SFAS  No.121  requires  that such assets be
measured at the lower of carrying amounts or fair value less cost to sell and to
cease depreciation  [amortization].  SFAS No.144 requires a probability-weighted
cash flow estimation  approach in situations where alternative courses of action
to recover the carrying amount of a long-lived asset are under  consideration or
a range of  possible  future  cash  flow  amounts  are  estimated.  As a result,
discontinued  operations  will no longer be measured on a net realizable  basis,
and future  operating  losses  will no longer be  recognized  before they occur.
Additionally,  goodwill  will be  removed  from the scope of SFAS  No.144.  As a
result goodwill will no longer be required to be allocated to long-lived  assets
to be tested for impairment.  SFAS No. 144 is effective for financial statements
issued for fiscal years  beginning  after December 15, 2001, and interim periods
within those fiscal years.  We are  currently in the process of  evaluating  the
effect this new standard  will have on its  consolidated  financial  position or
results of operations.

On  August  15,  2001,  the FASB  issued  SFAS  No.143,  "Accounting  for  Asset
Retirement Obligations ["SFAS No.143"]. SFAS No.143 requires that the fair value
of a liability for an asset retirement obligation be recognized in the period in
which it is incurred  if a  reasonable  estimate of fair value can be made.  The
associated asset retirement costs are capitalized as part of the carrying amount
of the long-lived asset. SFAS No.143 will be effective for financial  statements
issued for fiscal years beginning after June 15, 2002. An entity shall recognize
the  cumulative  effect of  adoption  of SFAS  No.143 as a change in  accounting
principle.   The  Company  is  not  currently   affected  by  this   Statement's
requirements.

                                      F-19
                                                                              51
<PAGE>
FUELNATION, INC.
[A DEVELOPMENT STAGE COMPANY]
NOTES TO FINANCIAL STATEMENTS, Sheet #12
--------------------------------------------------------------------------------

[14] Recently Issued Accounting Standards [Continued]

In June 2001, the FASB issued SFAS No.141 ["SFAS 141"], "Business Combinations",
and No. 142 ["SFAS 142"],  "Goodwill and Other Intangible Assets",  collectively
referred to as the "Standards".  SFAS 141 supersedes Accounting Principles Board
Opinion [APB] No. 16,  "Business  Combinations".  SFAS 141 (1) requires that the
purchase  method of accounting be used for all business  combinations  initiated
after June 30, 2001, (2) provides specific criteria for the initial  recognition
and  measurement of intangible  assets apart from goodwill and (3) requires that
unamortized  negative  goodwill be written off  immediately as an  extraordinary
gain.  SFAS 142  supersedes  APB 17,  "Intangible  Assets," and is effective for
fiscal years beginning after December 15, 2001. SFAS 142 primarily addresses the
accounting  for goodwill  and  intangible  assets  subsequent  to their  initial
recognition.   SFAS  142  (1)  prohibits  the   amortization   of  goodwill  and
indefinite-lived  intangible  assets,  (2)  requires  testing  of  goodwill  and
indefinite-lived  intangible  assets on an annual basis for impairment [and more
frequently  if  the  occurrence  of  an  event  or  circumstance   indicates  an
impairment],  (3) requires that reporting units be identified for the purpose of
assessing   potential  future  impairments  of  goodwill  and  (4)  removes  the
forty-year  limitation on the amortization period of intangible assets that have
finite  lives.  The  provisions  of the  Standards  also apply to  equity-method
investments made both before and after June 30, 2001. SFAS 141 requires that the
unamortized  deferred  credit  related to an excess  over cost  arising  from an
investment  acquired prior to July 1, 2001 accounted for using the equity method
[equity-method   negative  goodwill],   must  be  written-off   immediately  and
recognized  as the  cumulative  effect  of a  change  in  accounting  principle.
Equity-method  negative goodwill arising from equity investments made after June
30, 2001 must be written-off  immediately and recorded as an extraordinary gain.
The  adoption  of SFAS  141 did not  have a  material  impact  on the  Company's
consolidated financial statements. The Company will adopt SFAS 142 on January 1,
2002. The Company does not believe that the adoption of the SFAS 142 will have a
significant impact on its results of operations or financial position.

The FASB is also  considering  the  rescission  of SFAS 4,  "Recording  Gains or
Losses for  Extinguishment of Debt." When finally issued,  the pronouncement may
prohibit classification of such gains or losses as extraordinary items.

[15] Subsequent Events

The Company is currently  negotiating  a  $330,000,000  taxable  municipal  bond
issuance  which  is  subject  to the  Company  raising  certain  commitment  and
application fees, as well as, the approval of the application.

On  January  9,  2002,  the  Company  signed a  non-binding  letter of intent to
purchase a petroleum  marketer in the southeast  United  States.  As part of the
letter of intent the  Company  agreed to enter into a  non-disclosure  agreement
pertaining  to the release of the name or any  information  on this  acquisition
until the Company  receives its firm  commitment  on the bond funding or written
consent  from the  seller.  The terms of the  acquisition  are  currently  being
negotiated.

In March  2002,  the Company  moved its  principal  place of business  from Boca
Raton,  Florida to Davie,  Florida.  The Company  entered into a lease agreement
through September 2004 with a base monthly rent of $990.



                               . . . . . . . . . .

                                      F-20
                                                                              52

<PAGE>



ITEM 8.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS

     On February 1, 2002, Sellers & Associates, P.C., our independent accountant
for our most recent fiscal year, resigned. Our financial statements for the last
fiscal year  prepared by Sellers &  Associates,  P.C.  contained a going concern
opinion.

     Also on February 1, 2002, we engaged the accounting  firm of Moore Stephens
P.C. independent public accountants, to audit our fiscal year ended December 31,
2001 and 2000, as well as future  financial  statements,  to replace the firm of
Sellers &  Associates,  P.C.,  which was the  independent  public  accountant as
reported in our Form  10-KSB/A for the fiscal year ended  December 31, 2000,  as
filed with the  Securities  & Exchange  Commission.  This change in  independent
accountants was approved by our Board of Directors.

     There were no  disagreements  within the last  fiscal  year and  subsequent
periods with Sellers & Associates,  P.C., on any matter of accounting principles
or practices,  financial statement  disclosure,  or auditing scope of procedure,
which  disagreement(s),  if  not  resolved  to the  satisfaction  of  Sellers  &
Associates,  P.C.,  would have caused that firm to make  reference in connection
with its reports to the subject matter of the  disagreement(s) or any reportable
events.

                                    PART III

ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS

     The following  table sets forth the names,  positions  with our Company and
ages of our  executive  officers and  directors  as of December  31,  2001.  Our
directors will be elected at our annual meeting of stockholders. One half of the
total  number of directors is elected at each annual  meeting,  and,  therefore,
each  director  serves  for two  years or until his  successor  is  elected  and
qualifies. The Board elects officers and their terms of office are, excepting to
the extent governed by employment contract, at the discretion of the Board.

     The directors and officers of our Company as of the date of this Report are
as follows:

         Name                       Age            Position
-------------------------------     ---    ------------------------

Christopher R. Salmonson            36     Chief Executive Officer,
                                           President & Director

Shaikh Isa Mohammed
    Isa AlKhalifa                   63     Director

                                                                              53

<PAGE>



         Name                       Age            Position
-------------------------------     ---    ------------------------

Edwin F. Ruh                        47     Director

William C. Schlecht                 37     Director

John Leta                           36     Chief Technology Officer

Trevor Klein                        42     VP of Finance

Resumes:

     Christopher  R.  Salmonson  has served as our President and a member of our
Board of Directors since October 2000.  Since 1993, Mr. Salmonson has engaged in
a  multi-faceted  career  specializing  in  international  business and finance,
primarily operating out of: The Peoples Republic of China;  Jakarta,  Indonesia;
Manila, Philippines;  and the Middle East (including Manama, Bahrain and Riyadh,
Saudi  Arabia).  Mr.  Salmonson has experience in matters  concerning  trade and
project finance, international negotiations, and Chinese and Indonesian currency
conversion  efforts.  Since 1994, Mr. Salmonson has been employed as a financial
advisor to the ruling family of Bahrain. Since 1997, Mr. Salmonson has served as
a licensed mortgage broker with Circle Mortgage Corporation,  one of the largest
privately held mortgage banking  companies in the State of Florida.  As a result
of being a  named-defendant  in a multi-party  multi-jurisdiction  international
lawsuit commenced by the government of Venezuela and/or its representatives, Mr.
Salmonson filed for protection  under the United States  Bankruptcy Code, in the
Bankruptcy  Court for the  Southern  District of Florida  (Broward),  [Index No.
96-20435] on or about  February 1, 1996. No judgment was ever  obtained  against
Mr.  Salmonson  in such  actions and the lawsuit  was  ultimately  discontinued.
However, Mr. Salmonson filed for bankruptcy  protection in order to mitigate the
enormous  legal expenses that he was incurring and was projected to incur as the
various litigations continued through extensive deposition and discovery. On May
26, 1998, Mr. Salmonson received a full discharge from Federal bankruptcy court.
He devotes substantially all of his business time to our company.

     Shaikh Isa  Mohammed  Isa  AlKhalifa  was  appointed  as a director  of our
company in November  2000.  In addition,  he is a member of the ruling family of
Bahrain.  From 1988 to 1994,  he served as the  Bahrainian  ambassador  to Saudi
Arabia.  Since 1994 until the present,  Shaikh Isa Mohammed  Isa  AlKhalifa  has
managed several companies engaged  primarily in business  management,  financial
services  and  management  consulting.   Shaikh  Isa  Mohammed  Isa  AlKhalifa's
companies  have  operations in Bahrain and  throughout the Middle East. He holds
degrees in  petroleum  and  chemical  engineering.  He devotes only such time as
necessary to the business

                                                                              54

<PAGE>



of our company, which time is not expected to exceed 10% of his business time.

     Edwin F. Ruh,  director,  has served as a member of our Board of  Directors
since August 2000.  From 1995 to 1998,  Mr. Ruh was Managing  Director of Gerken
Capital  Associates,  a private  investment  bank,  and  General  Partner to the
Sino-Asia  Industrial Equity Fund, a $200 million direct investment equity fund.
Since 1998, Mr. Ruh has served as Chief Executive Officer of Adventure Assets, a
globally-oriented,  Internet-enhanced,  sports and entertainment studio. Mr. Ruh
received a Masters of Public  Administration from Harvard University,  a Masters
degrees in Business  Administration  and Public  Policy  from the Heinz  School,
Carnegie Mellon University, a Master's Certificate in Materials Science from the
University of Michigan and a Bachelor of Science in Biomedical  Engineering from
Pennsylvania  State  University.  He devotes  only such time as necessary to the
business  of our  company,  which  time is not  expected  to  exceed  10% of his
business time.

     William C.  Schlecht,  director,  has served as a director  of our  company
since April 2001. Since December 1998, Mr. Schlecht has been the general manager
and a principal  in Summit Body and  Equipment,  a privately  held  company that
specializes  in the  manufacture  of  custom  and high  volume  van  bodies  and
specialty trailers.  From June 1984 to December 1998, Mr. Schlecht served in the
United  States Army where he was a sergeant in charge of the  battalion  wheeled
vehicles  maintenance and  operations,  and oversaw the fleet of several hundred
trucks and  trailers  and the  mechanics  responsible  for their  operation.  He
devotes only such time as  necessary to the business of our company,  which time
is not expected to exceed 10% of his business time.

Key Employees

     John T. Leta, Chief  Information  Officer,  assumed his position with us in
April 2001.  Mr. Leta  manages all  aspects of  strategic  planning  and ongoing
operations for our Global Information Technology. Previously, from 1987 to 1994,
Mr. Leta worked for U.S. Communications/ASCOM  Communications/Peoples  Telephone
as Vice President of Management  Information  Systems.  From 1994 to March 2001,
Mr. Leta was President of Gannon  Systems/Automated.Solutions,  Inc. Mr. Leta is
knowledgeable  and experienced in software design,  development and integration,
information access and utilization for business operational development.  He has
extensive  experience  in direction  and  coordination  of field  installations,
service  and  repair.   He  has   developed   telephony   automation   software,
significantly  enhancing  functional  capabilities  of  operations,  service and
repair for field technicians. He has developed communications software, allowing
daily access to and scanning of data from multiple phone  manufacturers  for the
purpose of systems  automation and  integration,  with an installed base of over
44,000

                                                                              55

<PAGE>



pay telephones nationwide. Mr. Leta received an Associate of Science degree from
SUNY, Alfred State College in 1987. He devotes substantially all of his business
time to our affairs.

     Trevor Klein,  Vice  President of Finance,  assumed his position with us in
October  2001.  Mr. Klein  immigrated  to the United States from South Africa in
1986. From 1979 to 1986, Mr. Klein was employed as an accountant with Deloitte &
Touche,  where his last position was audit  manager.  In January 1990, Mr. Klein
joined  International  Magnetic  Imaging,  Inc.,  a medical  diagnostic  imaging
company located in Boca Raton, Florida,  where he worked as financial controller
until  September  1998.  From October 1998 through  October 2001,  Mr. Klein was
Chief  Financial  Officer for Online  Gaming  Systems,  Inc., a public  software
development  company.  Mr.  Klein,  a Certified  Public  Accountant,  received a
Masters  Degree in Accounting  from the University of South Africa in 1985 and a
Bachelor of Computer Science degree from the University of South Africa in 1984.
He is a member of the American  Institute of Certified  Public  Accountants.  He
devotes substantially all of his business time to our affairs.

ITEM 10.  EXECUTIVE COMPENSATION

     The following table shows,  for the years ended December 31, 2001 and 2000,
the cash and other compensation paid by us to our Chief Executive Officer and to
each of the  executive  officers of our Company who had annual  compensation  in
excess of $100,000.
<TABLE>
                           SUMMARY COMPENSATION TABLE
<CAPTION>
                                                  Long Term Compensation
                                             ---------------------------------
                     Annual Compensation              Awards           Payouts
                   ------------------------  ------------------------  -------
                                                         Securities
                                     Other                  Under-                All
                                     Annual  Restricted     lying                Other
Name and                             Compen-    Stock      Options/     LTIP     Compen-
Principal           Salary    Bonus  sation    Award(s)      SARs      Payouts   sation
Position     Year     ($)      ($)    ($)        ($)         (#)         ($)       ($)
----------   ----  ---------  -----  ------  ----------  ------------  --------  -------
<S>          <C>   <C>        <C>    <C>     <C>         <C>           <C>       <C>
Chris        2000  $       0   none   none      none         none        none     none
Salmonson,   2001  $ 240,000   none   none      none     14,380,239(2)   none     none
President,
CEO &
Chairman(1)

John Leta(3) 2001  $ 101,000   none   none      none      1,000,000      none     none
-------------------------
<FN>
(1)  The employment  agreement with our Chairman,  Chief  Executive  Officer and
     President,  Chris Salmonson provides for an annual base salary of $240,000,
     and stock options equal to 8% of the total amount of issued and outstanding
     stock.  As of the  date of  this  Report,  $98,000  of his  salary  due Mr.
     Salmonson has been accrued.

                                                                              56

<PAGE>



(2)  In April 2001,  Mr.  Salmonson was granted  options to purchase  14,380,239
     shares  of our  common  stock  pursuant  to  the  terms  of his  Employment
     Agreement.  This option was  exercisable  at a price of $.01 per share.  He
     exercised these options in September 2001.

(3)  Mr. Leta joined our company in April 2001.
</FN>
</TABLE>

Employment Agreements

     In April 2001, we entered into employment  agreements with Chris Salmonson,
and James L. Wilson,  our former CFO and on February  10, 2001,  we entered into
employment  agreements with Daniel  Willmott,  John T. Leta,  Kevin A. White and
Michael D. Freudenberg. Mr. Wilmott, Mr. Leta, Mr. White and Mr. Freudenberg are
computer   engineers  employed  to  development  and  maintain  our  technology,
information  systems and  website.  The  employment  agreements  all provide for
annual salaries ranging from  $90,000/year to $130,000/year and also provide for
three-year terms, with three of the agreements commencing retroactive to October
or November of 2000.

     The employment  agreement with our Chairman,  Chief  Executive  Officer and
President,  Chris Salmonson provides for an annual base salary of $240,000,  and
stock options equal to 8% of the total amount of issued and  outstanding  stock.
As of the date of this Report,  $98,000 of the salary due Mr. Salmonson has been
accrued.

     In October 2001 we entered into a two year employment agreement with Trevor
Klein,  our Vice  President of Finance.  This  agreement  provides for an annual
salary of $125,000 per year.

     We have no established stock option plan as of the date of this Report, but
expect to adopt one in the near future.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

     (a) and (b) Security Ownership of Certain Beneficial Owners and Management.

     The table below lists the beneficial  ownership of our voting securities by
each  person  known by us to be the  beneficial  owner  of more  than 5% of such
securities,  as well as by all our  directors  and  officers.  Unless  otherwise
indicated, the shareholders listed possess sole voting and investment power with
respect to the shares shown.



                                                                              57

<PAGE>



                                                          Percent
Name and Address of           Amount and Nature of          of
Beneficial Owner(1)           Beneficial Ownership         Class
-------------------           --------------------        -------

Christopher Salmonson(2)          83,473,000(3)            46.0%
4121 SW 47th Ave.
Davie, Florida 33314

Robert Simmons                    65,000,000(4)            36.0%
222 N. Ocean Blvd.
Delray Beach, FL 33483

All Directors
and Officers as a
Group (4 persons)                 83,473,000               46.0%
-----------------------

(1)  Unless  otherwise  noted,  we believe that each of the persons named in the
     table have sole voting and dispositive power with respect to all the shares
     of our common stock  beneficially  owned by such person. A person is deemed
     to be the  beneficial  owner of  securities  that can be  acquired  by such
     person  within 60 days upon the  exercise  of  warrants  or  options or the
     conversion of convertible  securities.  Each beneficial  owner's percentage
     ownership is  determined by assuming that warrants or options that are held
     by such  person  (but not  those  held by any  other  person)  and that are
     exercisable within 60 days have been exercised.

(2)  Officer and/or director of our company.

(3)  61,380,000  shares  held in the name of Fuel  America,  LLC,  of which  Mr.
     Salmonson and his wife are sole principals.  Also includes 3,960,000 shares
     held by Triad Petroleum LLC.

(4)  65,000,000 shares held in the name of Rapture Holdings,  Inc., of which Mr.
     Simmons is principal and sole shareholder.

ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     We have borrowed  monies from related  parties to fund our  operations.  In
2001, we borrowed approximately $393,000 from Fuel America LLC ("Fuel America"),
an entity controlled by Mr. Salmonson, our Chairman of the Board/Chief Executive
Officer ["CEO"].  In October 2001, Mr. Salmonson  exercised  options to purchase
14,380,239  shares of our common  stock at an exercise  price of $.01 per share.
The  proceeds  of $143,802  were used to reduce the amount due to Fuel  America.
Also, in 2001, one of our loan payables of $30,000 was settled by Mr.  Salmonson
issuing  shares of our common  stock owned by him to the loan  holder.  The loan
amount of $30,000 was offset against the amount due to Fuel America. At December
31, 2001, the balance owed Fuel America was $219,486.

                                                                              58

<PAGE>



Currently,  there are no interest repayment terms for the debt and it is treated
as if due on demand.

     In 2001, Mr. Salmonson  transferred  14,237,500  shares of our common stock
owned  personally by him to several  non-affiliated  entities for consulting and
professional  services  incurred  by  us.  We  recorded  a  non-cash  charge  to
operations in 2001 of $4,052,875 for such services,  which  represented the fair
value of such stock when  transferred.  This amount was  credited to  additional
paid-in  capital.  Mr. Salmonson has agreed to accept shares of our common stock
equal to the number of shares he transferred to pay these expenses.

     We entered  into two  separate  agreements  for  consulting  services  with
Veritas  Venture  Labs,  LLC,  an  entity  controlled  by  Mr.  Ruh,  one of our
directors.  Pursuant  to such  agreements  this  entity  was paid  approximately
$221,000, was issued 1,000,000 shares of common stock and was granted options to
purchase  1,500,000  shares of common  stock at an exercise  price of $.01.  The
1,500,000  options  were  exercised  in 2001.  We incurred a non-cash  charge to
operations of $3,585,000 related to the stock issuances and options granted.

     During 2001,  we shared office space with Triad,  who together  leased such
facility from an entity  controlled by one of our  principal  stockholders.  The
lease  expired  in the  fourth  quarter  of 2001 and  since  then  rent was on a
month-to-month  basis  until  March 2002 when we vacated  these  premises.  Rent
expense amounted to $38,974 and $6,413 in 2001 and 2000, respectively.

     During 2001, Mr. Salmonson, pledged shares of our common stock owned by him
for various  consulting  services.  We recorded a non- cash charge to expense of
$9,200,880  which  was equal to the fair  value of such  shares at the time they
were pledged.  Such shares were not issued as of December 31, 2001 and the total
amount of $9,200,880 was credited to additional paid-in capital.

ITEM 13.  EXHIBITS AND REPORTS ON FORM 8-K

(a)  Index to Exhibits

     2        Regenesis-Triad Share Sale and Contribution Agreement
              dated September 14, 2000(1)

     3.1      Articles of Incorporation of International Pizza
              Corporation(2)

     3.2      Bylaws of International Pizza Corporation(2)


                                                                              59

<PAGE>



     3.3      Amendment to Articles Incorporation, setting forth
              Designations, rights and preferences of Series A
              Preferred Stock(2)

     3.4      Amendment to Articles of Incorporation changing name to
              Regenesis Holdings, Inc.(2)

     3.5      Amendment to Articles of Incorporation, increasing
              authorized capital and setting forth designations,
              rights and Preferences of Series B and Series C Preferred
              Stock(3)

     3.6      Amendment to Articles of Incorporation, restating
              Designations, rights and preferences of Series C
              Preferred Stock(4)

     3.7      Amendment to Articles of Incorporation(5)

     3.8      Amendment to Articles of Incorporation(6)

     4.1      Warrant

     10.0     Triad-FuelNation Assignment & Assumption Agreement
              dated October 13, 2000(1)

     10.1     Trial-Regenesis Assignment and Assumption of License
              Agreement with Licensor(1)

     10.2     Employment Agreement with Christopher Salmonson(1)

     10.3     Employment Agreement with James L. Wilson(1)

     10.4     Consulting Agreement with EchoSat(7)

     10.5     Consulting Agreement with Veritas Venture(7)

     10.5     Employment Agreement with Paul Sapita(8)

     10.6     Restated Employment Agreement with Chris Salmonson(8)

     16.1     Letter of Resignation of Moore Stephens(9)

     16.2     Letter of Deloitte Touche(10)

     16.4     Letter of Resignation of Sellers $ Assoc.(11)

     17.1     Letter of Resignation of James L. Wilson(12)
---------------------

(1)  Previously  filed as an exhibit in the  Company's  Form  10-KSB/A1  for the
     fiscal year ended December 31, 2000.

                                                                              60

<PAGE>



(2)  Previously  filed as an exhibit in the Company's Form 10-KSB for the fiscal
     year ended December 31, 1997.

(3)  Previously  filed as an exhibit in the  Company's  Form 8-K dated  02/18/99
     February 18, 1999.

(4)  Previously  filed as an exhibit in the Company's Form 10-KSB for the fiscal
     year ended December 31, 1998.

(5)  Previously  filed as an exhibit in the Company's Form 10-QSB for the period
     ended June 30, 2000.

(6)  Previously  filed as an exhibit in the Company's Form 10-QSB for the period
     ended September 30, 2000.

(7)  Previously filed as an exhibit in the Company's  Registration  Statement on
     Form S-8 dated June 14, 2001.

(8)  Previously filed as an exhibit in the Company's  Registration  Statement on
     Form S-8 dated August 8, 2001

(9)  Previously  filed as an exhibit in the Company's Form 8-K dated January 19,
     2001.

(10) Previously filed as an exhibit in the Company's Form 8-K/A1 dated April 25,
     2001.

(11) Previously  filed as an exhibit in the Company's Form 8-K/A1 dated February
     7, 2002.

(12) Previously filed as an exhibit in the Company's Form 8-K dated December 12,
     2001.

(b)  Reports on Form 8-K

     We did not file any reports on Form 8-K during the three month period ended
December 31, 2001.

                                                                              61

<PAGE>


                                   SIGNATURES

     In accordance  with Section 13 or 15(d) of the  Securities  Exchange Act of
1934,  the  Company  caused  this  report  to be  signed  on its  behalf  by the
undersigned, thereunto duly authorized, on April 15, 2002.

                                       FUELNATION INC.
                                       (Registrant)


                                       By:s/ Christopher R. Salmonson
                                          --------------------------------
                                          Christopher R. Salmonson,
                                          President, Chief Executive
                                          Officer


     In  accordance  with the Exchange Act, this report has been signed below by
the  following  persons  on  behalf  of the  registrant  and  in the  capacities
indicated on April 15, 2002.



By:s/ Christopher R. Salmonson
   -------------------------------------------
   Christopher R. Salmonson, Director


By:s/ Shaikh Isa Monammed Isa AlKhalifa
   -------------------------------------------
   Shaikh Isa Mohammed Isa AlKhalifa, Director


By:s/ Edwin F. Ruh
   -------------------------------------------
   Edwin F. Ruh, Director


By:s/ William C. Schlecht
   -------------------------------------------
   William C. Schlecht, Director



                                                                              62