**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

**FORM 10-QSB**

[xx]	QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2002

Commission file Number:  0-32355

**CYOP SYSTEMS INTERNATIONAL INCORPORATED**

(Exact name of small business issuer as specified in its charter)

Nevada

(State or other jurisdiction of incorporation or organization)

98-0222927

(I.R.S. Employer Identification Number)

Suite 406

1040 Hamilton Street

Vancouver, British Columbia

V6B 2R9

(Address of principal executive offices)

(604)688-8864

(Issuer's telephone number)

State the number of shares outstanding of each of the issuer's classes of common equity, as of the
latest practicable date:		28,439,975 common shares as at March 31, 2002


Transitional Small Business Disclosure Format (check one):  Yes [  ]    No [ X ]





**CYOP SYSTEMS INTERNATIONAL INCORORATED**

INDEX

PART 1.	FINANCIAL INFORMATION

Item 1.         Financial Statements


                                               
Balance Sheet as of December 31, 2001 and March 31, 2002


                                               
Statement of Operations for the period ended March 31, 2002

Consolidated Statements of Cash Flows for the period ended				March 31, 2002


                                               
Consolidated Statements of Changes in Stockholders' Equity


                                               
Notes to Consolidated Financial Statements

Item 2.           Management Discussion and Analysis

PART II.	OTHER INFORMATION

Item 1.             Legal Proceedings


                       
Item 2.            Changes in Securities


                       
Item 3.             Defaults Upon Senior Securities


                       
Item 4.             Submission of Matters to a Vote of Security Holders


                       
Item 5.             Other Information


                       
Item 6.             Exhibits and Reports on Form 8K

SIGNATURES

**CYOP SYSTEMS INTERNATIONAL**

**INCORPORATED & SUBSIDIARIES**

**Consolidated Financial Statements**

**(Expressed in U.S. Dollars)**

**March 31, 2002**

**(Unaudited)**



**Index**

****

**Consolidated Balance Sheets**



**Consolidated Statement of Stockholders' Deficiency**



**Consolidated Statements of Operations**



**Consolidated Statements of Cash Flows**



**Notes to Consolidated Financial Statements**



































|**CYOP SYSTEMS INTERNATIONAL INCORPORATED** |      |  |  |  |  |  | 
|------------------------------------------- | ---- |  |  |  |  |  | 
|**& SUBSIDIARIES**                          | **** | 

|Consolidated Balance Sheets |  | 
|--------------------------- |  | 

|(Unaudited)                     |      |  |  |  |  |  |  |  |  | 
|------------------------------- | ---- |  |  |  |  |  |  |  |  | 
|**(Expressed in U.S. Dollars)** | **** | 

|                                |      | March 31                | December31
|------------------------------- | ---- | ----------------------- | ----------
|                                |      | 2002                    | 2001      
|**ASSETS**                      | **** |                         |           
|**Current**                     | **** |                         |           
|****  Cash and cash equivalents |      | $           
    10,963 | $   1,852 

|Accounts receivable                                                                |                                         | 261,855     |   | 178,910    
|---------------------------------------------------------------------------------- | --------------------------------------- | ----------- | - | -----------
|Demand loan, interest at 12% per annum and unsecured                               |                                         | 64,215      |   | 14,472     
|Due from director, non interest bearing and unsecured                              |                                         | -           |   | 105,738    
|Prepaid expenses and deposit                                                       |                                         | 28,689      |   | 49,191     
|**Total current assets**                                                           | ****                                    | 365,722     |   | 350,163    
|**Note receivable related party**(Note 8)                                          |                                         | 1,565,452   |   | 1,565,452  
|**Fixed assets**(Note 4)****                                                       | ****                                    | 212,112     |   | 222,646    
|                                                                                   |                                         |             |   |            
|**Total assets**                                                                   | ****                                    |             |   |            
|                                                                                   |                                         |             |   |            
|**LIABILITIES**                                                                    | ****                                    |             |   |            
|**Current**                                                                        | ****                                    |             |   |            
|****  Bank overdraft****                                                           | ****$                                   | -           | $ | 18,604     
|Demand loans (Note 6)                                                              |                                         | 452,676     |   | 452,676    
|Demand loans related party (Note 6)                                                |                                         | 50,000      |   | 50,000     
|Accounts payable and accrued liabilities                                           |                                         | ****608,790 |   | 586,139    
|Payroll deductions payable (Note 7)                                                |                                         | ****371,731 |   | 362,115    
|Due to director, non interest bearing and unsecured                                |                                         | ****12,912  |   | -          
|Short-term loan (Note 6)                                                           |                                         | ****228,407 |   | 228,421    
|Investor deposit                                                                   |                                         | 20,000      |   | 10,000     
|**Total current liabilities**                                                      | ****                                    | 1,744,516   |   | 1,707,955  
|**Deferred revenue** (Note 8)                                                      |                                         | 2,270,394   |   | 2,270,394  
|                                                                                   |                                         |             |   |            
|******Total Liabilities**                                                          |                                         |             |   |            
|                                                                                   |                                         |             |   |            
|**Nature and continuance of operations**  (Note 1)****                             | ****                                    |             |   |            
|**Commitments** (Note 11)****                                                      | ****                                    |             |   |            
|                                                                                   |                                         |             |   |            
|**STOCKHOLDERS' (DEFICIENCY)**                                                     | ****                                    |             |   |            
|**Share capital**                                                                  | ****                                    |             |   |            
|****  Authorized:                                                                  |                                         |             |   |            
|********100,000,000                                                                | shares of common stock with a par value |             |   |            
|                                                                                   | ********  of $0.0001 per share          |             |   |            
|********  Issued, allotted and outstanding:                                        |                                         |             |   |            
|********28,439,975                                                                 | shares of common stock                  |             |   |            
|**Additional paid-in capital**                                                     | ****                                    | 220,377     |   | 219,127    
|**Accumulated other comprehensive income**                                         | ****                                    | 135,450     |   | 133,194    
|**Deficit accumulated**                                                            | ****                                    | (2,230,295) |   | (2,195,253)
|**Total stockholders' (deficiency)**                                               | ****                                    | (1,871,624) |   | (1,840,088)
|**Total liabilities and stockholders' (deficiency)**                               | ****$                                   | 2,143,286   | $ | 2,138,261  
|                                                                                   |                                         |             |   |            
|******The accompanying notes are an integral part of these financial statements.**















|**CYOP SYSTEMS INTERNATIONAL INCORPORATED**       
|--------------------------------------------------
|**& SUBSIDIARIES**                                
|                                                  
|Consolidated Statement of Stockholders' Deficiency

|Three Months Ended March 31, 2002                                                  |              |        |         |            |         |         |             |   |             |                 |              |        |            
|---------------------------------------------------------------------------------- | ------------ | ------ | ------- | ---------- | ------- | ------- | ----------- | - | ----------- | --------------- | ------------ | ------ | -----------
|(Unaudited)                                                                        |              |        |         |            |         |         |             |   |             |                 |              |        |            
|**(Expressed in U.S. Dollars)**                                                    | ****         |        |         |            |         |         |             |   |             |                 |              |        |            
|                                                                                   |              |        |         |            |         |         |             |   |             | ****Accumulated |              |       
|                                                                                   |              |        |         |            |         |         | Compre-     |   |             |                 | other        |        | Total      
|                                                                                   |              |        |         | Additional |         | hensive |             |   |             | compre-         |              | Stock-
|                                                                                   | Common stock |        | paid-in |            | income  |         | Deficit     |   | hensive     |                 | holders'    
|                                                                                   | Shares       | Amount |         | capital    |         | (loss)  | accumulated |   | income      |                 | (deficiency)
|                                                                                   |              |        |         |            |         |         |             |   |             |                 |              |        |            
|**Balance,** December 31, 2001                                                     | 28,439,975   | $      | 2,844   | $          | 219,127 |         |             | $ | (2,195,253) | $               | 133,194      | $      | (1,840,088)
|                                                                                   |              |        |         |            |         |         |             |   |             |                 |              |        |            
|****Imputed interest on loan due to a related party                                | -            |        | -       |            | 1,250   |         |             |   | -           |                 | -            |        | 1,250      
|                                                                                   |              |        |         |            |         |         |             |   |             |                 |              |        |            
|Other comprehensive income                                                         |              |        |         |            |         |         |             |   |             |                 |              |        |            
|- foreign currency translation adjustment                                          | -            |        | -       |            | -       |         | 2,256       |   | -           |                 | 2,256        |        | 2,256      
|                                                                                   |              |        |         |            |         |         |             |   |             |                 |              |        |            
|Comprehensive income                                                               |              |        |         |            |         |         |             |   |             |                 |              |        |            
|- net (loss) for the period                                                        | -            |        | -       |            | -       |         | (35,042)    |   | (35,042)    |                 | -            |        | (35,042)   
|                                                                                   |              |        |         |            |         |         |             |   |             |                 |              |        |            
|Comprehensive income (loss)                                                        |              |        |         |            |         | $       | (32,786)    |   |             |                 |              |        |            
|                                                                                   |              |        |         |            |         |         |             |   |             |                 |              |        |            
|**Balance,** March 31, 2002                                                        | 28,439,975   |        | 2,844   |            | 220,377 |         |             |   | (2,230,295) | $               | 135,450      | $      | (1,871,624)
|                                                                                   |              |        |         |            |         |         |             |   |             |                 |              |        |            
|******The accompanying notes are an integral part of these financial statements.** |              |        |         |            |         |        



























**CYOP SYSTEMS INTERNATIONAL INCORPORATED****& SUBSIDIARIES**Consolidated Statements of Operations(Unaudited)**(Expressed in U.S. Dollars)**Three Months

Three MonthsEnded

EndedMarch 31

March 312002

2001**Revenue**Sales related party
$
257,852
$
-Sales

15,210

-273,062

-Cost of sales

138,904

-**Gross profit**

134,158

-**Advertising and promotion expenses**

(11,733)

(90,928)**Software development costs**

(94,368)

(287,238)**Loan interest expenses**

(13,359)

(25,911)**General and administrative expenses**Accounting and audit

-

(14,146)Automobile

(9,399)

(13,921)Depreciation of fixed assets

(622)

(1,654)Foreign exchange (gain) loss

2,597

(50,199)Legal and other professional fees

(2,929)

(30,565)Office and miscellaneous

(165)

(26,096)Rent

(4,277)

(16,786)Salaries and benefits

(34,599)

(31,776)Telephone and bandwidth

(346)

(2,385)**Net loss for the year**
****$
(35,042)
$
(591,605)**Loss per share**Basic and diluted
$
(0.00)

(0.02)**Weighted average number of****common shares outstanding**Basic and diluted

28,439,975

28,395,109**The accompanying notes are an integral part of these financial statements.**
























**CYOP SYSTEMS INTERNATIONAL INCORPORATED****& SUBSIDIARIES**
****Consolidated Statements of Cash Flows(Unaudited)**(Expressed in U.S. Dollars)**
********Three Months

Three Months****Ended

Ended****December 31

December 312002

2001**Cash flows from (used in) operating activities**
****Net loss for the year
$
(35,042)
$
(591,605)Adjustments to reconcile net loss to net cashused in operating activities:- depreciation of fixed assets

10,409

16,539- imputed interest on related party loan

1,250

-(23,383)

(575,066)Changes in assets and liabilities:- accounts receivable

(82,945)

(30,144)- prepaid expenses and deposit

20,502

16,718- accounts payable and accrued liabilities

27,341

75,719- payroll deductions payable

12,486

103,149(45,999)

(409,624)**Cash flows used in investing activities**
****Increase in demand loan receivable

(49,743)

-Purchase of fixed assets

-

(6,186)(49,743)

(6,186)**Cash flows from financing activities**
****Shares issued for cash

-

70,900Advances from director

118,650

-Proceeds from investor deposit

10,000

-Proceeds from demand loans

-

273,013128,650

343,913**Foreign exchange gain (loss) on cash held in**
******foreign currency**
****
(5,193)

7,317**Increase (decrease) in cash and cash equivalents**
****
27,715

(64,580)**Cash and cash equivalents (deficiency),**beginning of year
(16,752)

55,765**Cash and cash equivalents (deficiency)**, end of year
$
10,963
$
(8,815)**Cash and cash equivalents (deficiency) represented by:**
****Cash
$
10,963
$
4,046Bank overdraft

-

(12,861)$
10,963
$
(8,815)**The accompanying notes are an integral part of these financial statements.**






































CYOP SYSTEMS INTERNATIONAL INCORPORATED

& SUBSIDARIES



Notes to Consolidated Financial Statements

Three Months Ended March 31, 2002

(Unaudited)

(Expressed in US
Dollars)



**1.	Nature and Continuance of Operations**



The Company was incorporated on October 29, 1999 in the name of Triple 8 Development
Corporation under the laws of the State of Nevada to engage in any lawful business or activity
for which corporations may be organized under the laws of the State of Nevada.  The
Company changed its name to CYOP Systems International Incorporated on October 30,
2000.  On November 3, 2000, the Company acquired 100% of the issued and outstanding
shares of CYOP Systems Inc., Barbados ("CYOP Barbados"). This transaction was accounted
for as a reverse acquisition recapitalization (see Note 3).



CYOP Barbados was incorporated under the laws of Barbados on June 20, 2000. On August
31, 2000, CYOP Barbados acquired 100% of the issued and outstanding shares of Moshpit
Entertainment Inc., Canada ("Moshpit"), a company incorporated under the laws of British
Columbia, Canada.



The Company, and its subsidiaries, is a developer and provider of multimedia transactional
technology solutions and services for the entertainment industry.   The Company's range of
products and services include financial transaction platforms for on-line video games and
integrated e-commerce transaction technology for on-line merchants.  These services are
considered as one segment only based on internal organizational structure.



These consolidated financial statements have been prepared using the generally accepted
accounting principles applicable to a going concern which contemplates the realization of
assets and the satisfaction of liabilities and commitments in the normal course of business.
The Company has suffered recurring losses from operations and has a net capital deficiency.
The ability of the Company to continue as a going concern is dependent upon many factors,
including the ability of the Company to obtain financing to fund working capital requirements,
the degree of competition encountered by the Company, technology risks, government
regulation and general economic conditions. The Management's plan in this regard is to raise
equity financing as required and keep abreast with the multimedia technology. These
consolidated financial statements do not include any adjustments that might result from this
uncertainty.



**2.	Significant Accounting Policies**



(a)	Basis of Consolidation



These consolidated financial statements, prepared in accordance with accounting principles
generally accepted in the United States of America, include the accounts of the Company and
its subsidiaries CYOP Barbados and Moshpit. Significant inter-company accounts and
transactions have been eliminated.







CYOP SYSTEMS INTERNATIONAL INCORPORATED

& SUBSIDARIES



Notes to Consolidated Financial Statements

Three Months Ended March 31, 2002

(Unaudited)

(Expressed in US
Dollars)



**2.	Significant Accounting Policies**(continued)

(b)	Basis of Presentation



These interim consolidated financial statements have been prepared using the same
accounting policies and methods of their application as the most recent annual
consolidated financial statements of the Company. These interim consolidated
financial statements do not include all disclosures normally provided in the annual
consolidated financial statements and should be read in conjunction with the
Company's audited consolidated financial statements for the year ended December
31, 2001.  In management's opinion, all adjustments necessary for fair presentation
have been included in these interim consolidated financial statements.  Interim results
are not necessary indicative of the results expected for the fiscal year.



Certain
comparative figures have been reclassified to conform to the current period's
presentation.



(c)	Accounting Estimates



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



(d)	Cash Equivalents



Cash equivalents usually consist of highly liquid investments which are readily convertible into
cash with maturity of three months or less when purchased.



(e)	Fixed Assets



Fixed assets are recorded at historical cost.  Depreciation is charged to earnings in amounts
sufficient to allocate the costs over their estimated useful lives, as follows:

|Audio and visual equipment     | 20% declining-balance basis 
|------------------------------ | ----------------------------
|Computer hardware              | 30% declining-balance basis 
|Computer software              | 100% declining-balance basis
|Office furniture and equipment | 20% declining-balance basis 







CYOP SYSTEMS INTERNATIONAL INCORPORATED

& SUBSIDARIES

Notes to Consolidated Financial Statements

Three Months Ended March 31, 2002

(Unaudited)

(Expressed in US
Dollars)

**2.	Significant Accounting Policies**(continued)

(f)	Revenue recognition



The Company derives revenue from providing services on software development and online
internet transaction platform maintenance. Service revenues are recognized when services
have been performed and delivered in accordance with service agreements, the Company has
no significant remaining performance requirements, there are no material uncertainties
regarding customer acceptance and collection of the resulting receivable is deemed probable.



(g)	Software Development Costs



Software development costs incurred prior to the establishment of technological feasibility are
charged to expenses as incurred.



(h)	Advertising and Promotion



The Company expenses advertising and promotion costs as incurred.  Total advertising and
promotion costs charged to expenses for the three months ended March 31, 2002 amounted to
$11,733 (March 31, 2001 - $90,928).



(i)	Comprehensive Income



The Company has adopted SFAS No. 130, *"Reporting Comprehensive Income*", which
establishes standards for reporting and display of comprehensive income, its components and
accumulated balances.  The Company is disclosing this information on its consolidated
Statement of Stockholders' Equity.  Comprehensive income comprises equity except those
resulting from investments by owners and distributions to owners.  SFAS No. 130 did not
change the current accounting treatments for components of comprehensive income.



(j)	Financial Instruments and Concentration of Risks



Fair value of financial instruments are made at a specific point in time, based on relevant
information about financial markets and specific financial instruments.  As these estimates are
subjective in nature, involving uncertainties and matters of significant judgement, they cannot
be determined with precision.  Changes in assumptions can significantly affect estimated fair
values.



The carrying value of cash and cash equivalents, accounts receivable, demand loan
receivable, note receivable, demand loans payable, accounts payable and accrued liabilities,
payroll deductions payable, amount due to director and short-term loans approximate their fair
values because of the short-term maturity of these instruments.



Moshpit is operating in Canada, which may give rise to significant foreign currency risks from
fluctuations and the degree of volatility of foreign exchange rates between U.S. dollars and the
Canadian dollars.



Financial instruments that potentially subject the Company to concentration of credit risk
consist of accounts receivable, demand note receivable and note receivable, the balances of
which are stated on the balance sheet. The Company performs ongoing credit evaluations of
its customers and debtors and maintains allowances for possible losses with, when realized,
have been within the range of management's expectations.   The Company places its cash in
high credit quality financial institutions.  The Company does not require collateral or other
security to support financial instruments subject to credit risk.



CYOP SYSTEMS INTERNATIONAL INCORPORATED

& SUBSIDARIES



Notes to Consolidated Financial Statements

Three Months Ended March 31, 2002

(Unaudited)

(Expressed in US
Dollars)



**2.	Significant Accounting Policies**(continued)

(k)	Net Income (Loss) Per Share



Basic net income (loss) per share are computed using the weighted-average number of shares
of common stock outstanding during the period. Diluted net income (loss) per share
incorporate the incremental shares issuable upon the assumed exercise of stock options and
other dilutive securities.  Convertible loan and option to purchase 45,000 shares of common
stock outstanding as at March 31, 2002 are not included in the net income (loss) per share
computation, as the effect of including them would be anti-dilutive.



(l)	Stock-based Compensation



The Company has adopted the disclosure-only provisions of SFAS No. 123, "Accounting for
Stock-based Compensation".  SFAS 123 encourages, but does not require, companies to
adopt a fair value based method for determining expense related to stock-based
compensation.  The Company accounts for stock-based compensation issued to employees
and directors using the intrinsic value method as prescribed under Accounting Principles Board
Opinion No. 25, "Accounting for Stock Issued to Employees" and related interpretations.



**3.	Acquisition of CYOP Systems Inc., Barbados**



On November 3, 2000, the Company acquired 100% of the issued and outstanding common
shares of CYOP Barbados by issuing 9,000,000 shares which are presented as outstanding
for all periods presented.  As the Company was a non-operating shell company, the
transaction resulted in the management of CYOP Barbados having effective operating control
of the combined company, with the shareholders of the Company continuing only as passive
investors.  Accounting principles applicable to reverse acquisition recapitalization have been
applied to record this transaction.  Under this basis of accounting, CYOP Barbados has been
identified as the acquirer and, accordingly, the combined company is considered to be a
continuation of the operations of CYOP Barbados with the net liabilities of the Company
deemed to have been assumed by CYOP Barbados.  Statements of operations present
primarily the operations of Barbados.  Pro-forma information is not presented as the
transaction is not considered a business combination.



The net liabilities of the Company assumed by CYOP Barbados are summarized as follows:

|Current assets          | $	2,399  
|----------------------- | ---------
|Current liabilities     | (12,100) 
|Net liabilities assumed | $	(9,701)
|                        |          



CYOP SYSTEMS INTERNATIONAL INCORPORATED

& SUBSIDARIES

Notes to Consolidated Financial Statements

Three Months Ended March 31, 2002

(Unaudited)

(Expressed in US
Dollars)

**4.** **Fixed assets**

|                               | March 31, 2002
|------------------------------ | --------------
|                               | Cost          
|Audio and visual equipment     | $	21,558      
|Computer hardware              | 284,359       
|Computer software              | 3,088         
|Office furniture and equipment | 9,393         
|Total                          | $	318,398     

|                               | December 31, 2001
|------------------------------ | -----------------
|                               | Cost             
|Audio and visual equipment     | $	21,578         
|Computer hardware              | 284,526          
|Computer software              | 3,090            
|Office furniture and equipment | 9,402            
|Total                          | $  318,596       



For the three months ended March 31, 2002, depreciation expenses charged to software
development costs and general and administrative expenses were $9,787 (2001 - $14,885),
and $622 (2001 - $1,654) respectively.



**5.	Software Development Costs**

|                                  | March 31, 2002 | December 31, 2001
|--------------------------------- | -------------- | -----------------
|                                  |                |                  
|Balance, beginning of period      | $	-            | $	100            
|Salaries and benefits             | 84,581         | 454,840          
|Depreciation on fixed assets      | 9,787          | 40,118           
|                                  | 94,368         | 495,058          
|Costs charged to expenses         | (94,368)       | -                
|Costs charged to sale of software | -              | (495,058)        
|Balance, end of period            | $	-            | $	-              



CYOP SYSTEMS INTERNATIONAL INCORPORATED

& SUBSIDARIES

Notes to Consolidated Financial Statements

Three Months Ended March 31, 2002

(Unaudited)

(Expressed in US
Dollars)

**6.	Loans**



(a)	Demand Loans

March 31, 2002
December 31
2001i.	Interest at the Bank of Montreal's prime lending
rate of 6.0% plus 1.5% per annum and unsecured:- Cyber Roads Inc.
$ 178,519
$ 178,519- Tapijkabouter BV
99,157
99,157277,676
277,676ii.	Interest at the Hongkong Bank of Canada's prime
lending rate of 6.0% plus 1% per annum and
unsecured:- Ameera Group Inc.
75,000
75,000iii.	Non-interest bearing and unsecured:- Tapijkabouter BV
100,000
100,000Total
$	452,676
$	452,676




(a)	Demand Loans Related Party

March 31
2002
December 31
2001ii.	Non-interest bearing and unsecured:- Jack Carley ­ related to a director
50,000
50,000Total
$	50,000
$	50,000




(b)	Short-term Loan

March 31, 2002
December 31 2001.	Interest at 40% per annum, due on January 25,
2002, convertible to 20,000 shares of common
stock of the Company at due date:- Kornfeld MacOff (Cdn$25,000)
$	15,682
$	15,696ii.	Interest at 10% per annum, due on June 1, 2002:- RedRuth Ventures
212,725
212,725Total
$	228,407
$	228,421




CYOP SYSTEMS INTERNATIONAL INCORPORATED

& SUBSIDARIES

Notes to Consolidated Financial Statements

Three Months Ended March 31, 2002

(Unaudited)

(Expressed in US
Dollars)

**7.	Payroll Deductions Payable**



Payroll deductions payable of $371,731 (December 31, 2001 - $362,115) represents personal
income taxes and other payroll related deductions withheld from employees.  They are owed
to Canada Customs and Revenue Agency by the Company's subsidiary in Canada.



**8.	Sale and License-back of Computer Software**



On December 14, 2001, the Company sold computer software identified as Crediplay System
to the sole director and a major shareholder and creditor of the Company for $3,000,000. The
purchase price was settled by retiring $1,200,000 of debt owed to the purchaser and a
promissory note for $1,800,000. The promissory note bears interest at 5% per annum with
maturity on December 14, 2010. As at December 31, 2001, the present value of the
promissory note is $1,565,452, with discount rate at 7% per annum.



Pursuant to a Marketing, Development and Distribution Agreement entered into on the same
date, the Crediplay System was licensed back to the Company for a term of 15 years. A
licensing fee payable will be calculated on Gross Earnings derived from the Crediplay System
as follows:

|2002         | Gross Earnings x 20%
|------------ | --------------------
|2003         | Gross Earnings x 17%
|2004         | Gross Earnings x 15%
|2005 to 2017 | Gross Earnings x 10%

The development costs of the Creditplay System expended by the Company amounted to
approximately $1,273,406 of which $778,348 was expensed previously.  Management of the
Company has estimated the $3,000,000 value based on the discounted future cash flow
projection and the estimate provided by knowledgeable parties of the software.



The gain on the sale of the Crediplay System is calculated as follows:

|Sales price                                                               |   |          
|------------------------------------------------------------------------- | - | ---------
|Retirement of loan due to the purchaser                                   | $ | 1,200,000
|Present value of $1,800,000    promissory note
discounted at 7% per annum |   | 1,565,452
|                                                                          |   | 2,765,452
|Software development costs incurred in 2001                               |   | (495,058)
|Deferred gain                                                             | $ | 2,270,394

The deferred gain of $2,270,394 will be amortized in proportion to the licensing fees payable
over the term of the agreement.



CYOP SYSTEMS INTERNATIONAL INCORPORATED

& SUBSIDARIES



Notes to Consolidated Financial Statements

Three Months Ended March 31, 2002

(Unaudited)

(Expressed in US
Dollars)



**9.	Economic Dependence**



In fiscal year 2001, the Company entered into a software development agreement and a
software licensing, technical support and operation of customer service and data centre
agreement with a company with a common director.



During the three months ended March 31, 2002, total revenue of $257,852 were accrued
from the serviced company.

As at March 31, 2002, $231,241 related to these services was still unpaid and included in
accounts receivable.



**10.	Related Party Transactions**



Related party transactions not disclosed elsewhere in the consolidated financial
statements are as follows:

Imputed interest of $1,250 (March 31, 2001 - $Nil) at an interest rate of 10% per annum was
accrued on interest free loan of $50,000 from an individual related to a director of the Company.



Accounting fees of $Nil (March 31, 2001 - $7,962) were paid to a company controlled by individuals
related to a director of the Company and were charged to expenses.

Interest expenses of $Nil (March 31, 2001 - $16,756) were paid to a director and a shareholder of
the Company and were charged to expenses.



**11.	Commitments**



(a)	The Company has entered into lease contracts for automobiles and computer
equipment with minimum lease payments for the year ending December 31st, as
follows:

|2002  | $ | 45,837 
|----- | - | -------
|2003  |   | 45,837 
|2004  |   | 19,345 
|Total | $ | 111,019



(b)	The Company has entered into contracts with service providers to pay for the
services partly by cash and partly by issuance of common stock of the Company
when the common stock are freely trading in the equity market. As at March 31,
2002, 156,343 shares of common stock of the Company are to be issued for
services received.



CYOP SYSTEMS INTERNATIONAL INCORPORATED

& SUBSIDARIES



Notes to Consolidated Financial Statements

Three Months Ended March 31, 2002

(Unaudited)

(Expressed in US
Dollars)

**12.	Stock Option**



The following is a summary of the stock option outstanding as at March 31, 2002:

|                                         | Shares | Weighted AverageExercise Price
|---------------------------------------- | ------ | ------------------------------
|Options outstanding at December 31, 2001 | 25,000 | $	1.00                        
|Granted                                  | -      | -                             
|Options outstanding at March 31, 2002    | 25,000 | $	1.00                        



|Options Outstanding and Exercisable
|-----------------------------------
|Range of Exercise
Prices           
|$1.00                              
|                                   



**13.	Comparative Figures**

Certain 2001 comparative figures have been reclassified to conform with the financial
statement presentation adopted for 2002.

















**MANAGEMENT'S DISCUSSION AND ANALYSIS**

The following management's discussion and analysis of the Company should be read in
conjunction with the financial statements and the related notes thereto included elsewhere in
this quarterly report for the three months ended March 31, 2002.  This quarterly report contains
certain forward-looking statements and the Company's future operation results could differ
materially from those discussed herein.


We were incorporated on October 29, 1999 under the laws of the State of Nevada as Triple 8
Development Corporation to engage in any lawful corporate purpose.  We changed our name
to CYOP Systems International Incorporated on November 2, 2000.


We have not been involved in any bankruptcy, receivership or similar proceedings.


CYOP Systems International Incorporated is the parent company in our corporate structure.
We own 100% of the common shares of CYOP Systems Inc., a Barbados company, which in
turn owns 100% of the issued common shares of Moshpit Entertainment Inc.  Moshpit
Entertainment Inc. is a British Columbia company, which conducts all of our product
development.  Moshpit is a developer and provider of multimedia transactional technology
solutions and services for the entertainment industry.  Moshpit's range of products and services
include financial transaction platforms for on-line video games and integrated e-commerce
transaction technology for on-line merchants


The quarter has been a trying one for the Company. Commitments for funding that went
unfulfilled resulted in the need to reconfigure operations, reducing staff levels from 19 to 11.
Limited capital availability due to the downturn in the Internet and technology sectors meant that
the Company was forced to reduce its staff to core personnel in order to continue to operate

We anticipate maintaining our staff of 11 persons during the next 12 months.  We do not expect
to acquire any material physical assets or significant equipment in the next 12 months.  We will
not be performing any significant research and development in the next 12 months as our pay
for play software is complete and tested.

Management will continue to fund the Company through shareholders' loans until such time as
the Company is financially self-supporting.  Management of the Company will be aggressively
seeking private financing to launch an aggressive marketing campaign for our pay for play
network and our flagship video game Urban Mercenary.

In order for our Company to expand it's operations and realize profits from pay for play online
video gaming a number of additional steps must be taken.  We must continue to maintain and
upgrade our software programs and our website.  This is an ongoing month-to-month
responsibility, which is handled by our current staff members.  Funds for this ongoing software
maintenance have been budgeted and are covered by funds, which are being loaned to our
Company by management.  In the future, the funds required for ongoing software maintenance
will come from revenue from licensing fees or system maintenance fees from pay for play video
gaming.  Secondly, to increase our Company's exposure and attract players to our website we
will be required to complete a full marketing launch.  Until we complete a marketing launch we
cannot expect large volumes of players for our online pay for play video game.  Revenues will
be derived from licensing fees from third parties that already have an established community
and significant traffics to their web sites.  We will also continue to pursue our pending patent
applications in the United States.  Patent protection will improve our competitive position in the
online pay for play video gaming industry.  We anticipate spending up to an additional $25,000

for costs associated with our patent applications.  We anticipate it may take up to one year for
our current patent applications to be granted.

**Liquidity and Capital Resources**

At March 31, 2002 the Company had a working capital deficit of ($1,378,794) compared to a
working capital deficit of  ($1,925,366) to satisfy requirements for operations for the same
period ending March 31, 2001. Although this is a material improvement for the same period
ending March 31, 2001 no assurances can be given that the Company will successful in
realizing sufficient funding to continue operations. Based on the cost reduction plan the
Company has been successful in significantly reducing operating costs period over period
beginning with the third quarter end in 2001. While development of the Crediplay system is
complete and operational very little cash is available to begin the process of marketing and
promoting the Crediplay system.


Deterioration of funding sources for internet based businesses has continued into the calendar
year 2002 creating financial stresses for the Company. Operations have continued with funding
from management. The Company plans to raise capital during the second quarter of 2002.


The Company's consolidated financial statements have been prepared on a continuing
operation basis, which contemplates the realization of assets and the settlement of liabilities
and commitments in the normal course of business.


Management recognizes that the Company must generate additional investment in a timely
manner to maintain operations. The Company plans to seek private placements of equity
capital to fund its operations but has no commitments at date of this report for funding.


As of March 31, 2002, there were no material commitments for capital expenditures.**Results of operations for the quarter ended March 31, 2002 as compared to the quarter
ended March 31, 2001.**

During the quarter ended March 31, 2002 the Company generated revenue of $273,062
primarily from the development contract with Bingo.com.  Although $15,210 is directly related to
the Crediplay system and Network Maintenance Fees. The same period ending March 31, 2001
generated no revenues as the Crediplay system was still in development stages. The majority
of the above revenues, $258,000 is a  result of a development contract with Bingo.com and the
company does not consider that the associated web development service is their core business.
The Company had general and administrative expenses of $169,200 in 2002 compared with
$590,905 in 2000, inclusive of software development costs of $94,368 and $287,238
respectively. The company's main expense during these periods is software development costs.


The Company incurred a loss on operations of ($35,042) in 2002 compared to ($590,905) in
2001, or ($0.00) per share and ($0.03) per share respectively. The improved loss position is a
result of a decrease of total expenses and no revenue in 2000.

"CAUTIONARY STATEMENT FOR PURPOSES OF THE "SAFE HARBOR" PROVISIONS OF
THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995.  Except for historical
matters, the matters discussed in this Form 10-QSB are forward-looking statements based on
current expectations and involve risks and uncertainties.  Forward-looking statements include,
but are not limited to, statements under the following heading: "Managements Discussion And
Analysis Or Plan Of Operations" the timing and expected profitable results of sales and the
need for no additional financing.









**PART II**

**OTHER INFORMATION**

Item 1.         LEGAL PROCEEDINGS

                                          
None


                      
Item 2.         CHANGES IN SECURITIES AND USE OF PROCEEDS

                                          
None


                      
Item 3.         DEFAULTS UPON SENIOR SECURITIES

                                          
None


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

                                         
None

Item 5.         OTHER INFORMATION

                                         
None

Item 6.         EXHIBITS AND REPORTS ON FORM 8-K

(a)	Exhibits

None


                                       
(b)	Reports on Form 8-K


                                            
None

**SIGNATURES**

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

**CYOP SYSTEMS INTERNATIONAL INCORPORATED**

Dated:  June 6, 2002                                                                                                                           
Per:	/s/Mitch White

Mitch White, President, C.F.O. and Director