UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

                                   Form 10-QSB

--------------------------------------------------------------------------------


(Mark one)
  XX         QUARTERLY  REPORT  UNDER  SECTION  13  OR  15(d) OF THE  SECURITIES
---------    EXCHANGE ACT OF 1934


                  For the quarterly period ended June 30, 2001

             TRANSITION REPORT UNDER  SECTION 13 OR 15(d) OF THE EXCHANGE ACT OF
---------    1934


                  For the transition period from _____________ to _____________

--------------------------------------------------------------------------------


                         Commission File Number: 0-24374
                                                 -------

                        Lucas Educational Systems, Inc.
       (Exact name of small business issuer as specified in its charter)

       Delaware                                                 62-1690722
------------------------                                 -----------------------
(State of incorporation)                                (IRS Employer ID Number)

               2591 Dallas Parkway, Suite 102, Frisco, Texas 75034
               ---------------------------------------------------
                    (Address of principal executive offices)

                                 (469) 633-0100
                                 --------------
                           (Issuer's telephone number)


--------------------------------------------------------------------------------


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

State the number of shares outstanding of each of the issuer's classes of common
equity  as  of  the  latest   practicable  date:   August  7,  2001:   3,339,016
                                                   -----------------------------

Transitional Small Business Disclosure Format (check one):    YES    NO X
                                                                 ---   ---


<PAGE>



                         Lucas Educational Systems, Inc.

                 Form 10-QSB for the Quarter ended June 30, 2001

                                Table of Contents


                                                                          Page
Part I - Financial Information

   Item 1  Financial Statements                                             3

   Item 2  Management's Discussion and Analysis or Plan of Operation       11


Part II - Other Information

   Item 5  Other Information                                               12

   Item 6  Exhibits and Reports on Form 8-K                                12


Signatures                                                                 13



                                                                               2

<PAGE>



Item 1 - Part 1 - Financial Statements


                         Lucas Educational Systems, Inc.
                          (a development stage company)
                           Consolidated Balance Sheets
                             June 30, 2001 and 2000

                                   (Unaudited)

                                                       June 30,       June 30,
                                                         2001           2000
                                                     -----------    -----------
                                     ASSETS
                                     ------
Current Assets
   Cash on hand and in bank                          $        61    $   960,613
   Amounts receivable from related parties                  --            4,039
   Inventory                                                --            5,610
   Prepaid expenses                                        2,019         18,319
                                                     -----------    -----------
     Total Current Assets                                  2,080        988,581
                                                     -----------    -----------

Property and Equipment - At cost
   net of Accumulated Depreciation                          --           68,416
                                                     -----------    -----------

Other Assets
   Restricted cash                                          --           50,000
   Other                                                    --           16,873
                                                     -----------    -----------
     Total Other Assets                                     --           66,873
                                                     -----------    -----------

Total Assets                                         $     2,080    $ 1,123,870
                                                     ===========    ===========

                      LIABILITIES AND SHAREHOLDERS' EQUITY
                      ------------------------------------

Current Liabilities
   Accounts payable - trade                          $     5,344    $      --
                                                     -----------    -----------

Commitments and Contingencies

Shareholders' Equity Preferred stock - $0.001 par value
     1,000,000 shares authorized;
     89,974 shares issued and outstanding                   --               90
   Common stock - $0.001 par value
     20,000,000 shares authorized
     3,339,016 and 3,697,157 shares
     issued and outstanding, respectively                  3,339          3,697
   Additional paid-in capital                          3,286,059      3,377,288
   Unearned compensation                                    --         (548,435)
   Deficit accumulated during the development stage   (3,286,840)    (1,714,114)
                                                     -----------    -----------
                                                           2,558      1,118,526
   Treasury stock (500 shares at cost)                      (478)          --
                                                     -----------    -----------
     Total shareholders' equity                            2,080      1,118,526
                                                     -----------    -----------

Total Liabilities and Shareholders' Equity           $     2,080    $ 1,123,870
                                                     ===========    ===========


The  financial information presented herein has been prepared by management
     without audit by independent certified public accountants.
The accompanying notes are an integral part of these financial statements.
                                                                               3

<PAGE>
<TABLE>
<CAPTION>



                         Lucas Educational Systems, Inc.
                          (a development stage company)
                    Consolidated Statements of Operations and
                     Comprehensive Income Three months ended
                             June 30, 2001 and 2000
    Period from December 5, 1996 (date of commencement of development stage)
                              through June 30, 2001

                                   (Unaudited)

                                                                            Period from
                                          Three months    Three months    December 5, 1996
                                              ended            ended          through
                                         June 30, 2001    June 30, 2000    June 30, 2001
                                         -------------    -------------    -------------
<S>                                      <C>              <C>              <C>

Revenues                                 $        --      $        --      $      72,581

Cost of Goods Sold                                --               --             36,822
                                         -------------    -------------    -------------

Gross Profit                                      --               --             35,759
                                         -------------    -------------    -------------

Operating expenses
   General and administrative expenses          28,360          180,007        3,344,307
                                         -------------    -------------    -------------

Loss from Operations                           (28,360)        (180,007)      (3,308,548)

Other income
   Interest income                               1,960            7,926           26,339
   Interest expense                               --               --             (4,631)
                                         -------------    -------------    -------------

Loss before provision for income taxes         (26,400)        (172,081)      (3,286,840)

Provision for income taxes (benefit)              --               --               --
                                         -------------    -------------    -------------

Net Loss                                       (26,400)        (172,081)      (3,286,840)

Other comprehensive income                        --               --               --
                                         -------------    -------------    -------------

Comprehensive Income                     $      (26,399)  $    (172,081)   $  (3,286,840)
                                         =============    =============    =============

Loss per weighted-average share of
   common stock outstanding,
   computed on Net Loss - basic
   and fully diluted                     $       (0.01)   $       (0.05)
                                         =============    =============

Weighted-average number of shares
   of common stock outstanding               3,339,016        3,697,157
                                         =============    =============
</TABLE>


The  financial information presented herein has been prepared by management
     without audit by independent certified public accountants.
The accompanying notes are an integral part of these financial statements.
                                                                               4

<PAGE>
<TABLE>
<CAPTION>


                         Lucas Educational Systems, Inc.
                          (a development stage company)
                      Consolidated Statements of Cash Flows
                    Three months ended June 30, 2001 and 2000
    Period from December 5, 1996 (date of commencement of development stage)
                              through June 30, 2001

                                                    (Unaudited)

                                                                                          Period from
                                                       Three months     Three months    December 5, 1996
                                                           ended            ended           through
                                                       June 30, 2001    June 30, 2000    June 30, 2001
                                                       -------------    -------------    -------------
<S>                                                    <C>              <C>              <C>

Cash Flows from Operating Activities
   Net Loss                                            $     (26,400)   $    (172,081)   $  (3,286,840)
   Adjustments to reconcile net income to net cash
     provided by operating activities
       Depreciation and amortization                            --              8,053           87,283
       Loss on sale of property and equipment                   --               --             13,715
       Exchange of assets for services                         3,403             --              4,665
       Common stock issued for services and payables            --               --            844,375
       Stock compensation                                       --               --            599,060
       (Increase) Decrease in
         Related party receivables                              --             (4,039)            --
         Inventories                                            --               --           (177,223)
         Prepaid expenses and other                           29,724          (82,147)          (2,019)
       Increase (Decrease) in
         Accounts payable and accrued liabilities            (16,051)         (41,380)         114,734
                                                       -------------    -------------    -------------

Net cash used in operating activities                         (9,324)        (291,594)      (1,802,250)
                                                       -------------    -------------    -------------

Cash Flows from Investing Activities
   Purchases of property and equipment                          --            (24,217)        (140,064)
   Proceeds from sale of property and equipment                 --               --              5,213
                                                       -------------    -------------    -------------

Net cash used in investing activities                           --            (24,217)        (134,851)
                                                       -------------    -------------    -------------

Cash Flows from Financing Activities
   Proceeds on related party notes payable                      --               --             36,000
   Payments on related party notes payable                      --             (2,500)         (21,000)
   Proceeds from sale of convertible preferred stock            --               --          1,400,000
   Proceeds from sale of common stock                           --               --            295,115
   Purchase of treasury stock                                   --               --               (478)
   Proceeds from sale of treasury stock                         --               --            227,500
   Proceeds from stock subscription receivable                  --               --                 25
                                                       -------------    -------------    -------------

Net cash provided by financing activities                       --               --          1,937,162
                                                       -------------    -------------    -------------

Increase (Decrease) in Cash and Cash Equivalents              (9,324)        (318,311)              61

Cash and cash equivalents at beginning of period               9,365        1,278,924             --
                                                       -------------    -------------    -------------

Cash and cash equivalents at end of period             $          61    $     960,613    $          61
                                                       =============    =============    =============
</TABLE>

The  financial information presented herein has been prepared by management
     without audit by independent certified public accountants.
The accompanying notes are an integral part of these financial statements.
                                                                               5

<PAGE>



                         Lucas Educational Systems, Inc.
                          (a development stage company)

                   Notes to Consolidated Financial Statements


Note A - Organization and Description of Business

Lucas  Educational  Systems,  Inc.  (Company) was  incorporated on June 11, 1992
under  the  laws of the  State  of  Delaware.  The  Company's  initial  business
operations,  which  commenced on December 5, 1996,  was to change the way people
learn through  Learning That Lasts(TM).  It's mission was to gain recognition as
the  Nation's  leading   authority  and  largest  provider  of  memory  training
techniques and related educational products.

In  February  2001,  the  Company's  Board of  Directors  resolved  to cease all
operations  related to  educational  activities  and to pursue either the merger
with or acquisition of an unrelated operating entity to enhance the value of the
public  entity.  As of March 31,  2001,  the Company had ceased all  operations,
terminated  all  employees  and began to settle the  remaining  accounts  of the
Company.  As of  June  30,  2001,  the  Company  had  only  nominal  assets  and
liabilities and no business operations.

The Company's  business plan was never fully  implemented  or  operational  and,
accordingly,  has never fully commenced operations.  Accordingly, the Company is
considered to be in the development stage.

During interim periods, the Company follows the accounting policies set forth in
its annual  audited  financial  statements  filed with the U. S.  Securities and
Exchange Commission on its Annual Report on Form 10-KSB for the year ended March
31, 2001. The information  presented within these interim  financial  statements
may not  include  all  disclosures  required by  generally  accepted  accounting
principles and the users of financial  information  provided for interim periods
should refer to the annual  financial  information  and footnotes when reviewing
the interim financial results presented herein.

In the opinion of management,  the accompanying  interim  financial  statements,
prepared in  accordance  with the U. S.  Securities  and  Exchange  Commission's
instructions   for  Form  10-QSB,   are   unaudited  and  contain  all  material
adjustments,  consisting  only of  normal  recurring  adjustments  necessary  to
present fairly the financial condition,  results of operations and cash flows of
the Company for the respective  interim  periods  presented.  The current period
results of operations are not necessarily indicative of results which ultimately
will be reported for the full fiscal year ending March 31, 2002.

The preparation of financial  statements in conformity  with generally  accepted
accounting principles requires management to make estimates and assumptions that
affect certain  reported amounts and  disclosures.  Accordingly,  actual results
could differ from those estimates.

The financial  statements include the amounts of both Lucas Educational Systems,
Inc. and its wholly-owned subsidiary,  Lucas Educational Systems, Inc. (a Nevada
corporation).  All  significant  intercompany  amounts have been  eliminated  in
consolidation. The consolidated entity is referred to as Company.


Note B - Going Concern Uncertainty

Due to the  lack of  sustaining  operations  from  inception,  the  Company  has
generated no significant  operating  revenues and has incurred  cumulative  cash
losses of approximately $1,800,000.

The Company is fully  dependent  either  future sales of  securities or upon its
current  management  and/or advances or loans from  significant  stockholders or
corporate  officers  to  provide  sufficient  working  capital to  preserve  the
integrity of the corporate entity during the development phase.


                                                                               6

<PAGE>

                         Lucas Educational Systems, Inc.
                          (a development stage company)

             Notes to Consolidated Financial Statements - Continued


Note B - Going Concern Uncertainty - Continued

There is no assurance that the Company will be able to obtain additional funding
through the sales of additional  securities or, that such funding, if available,
will be obtained on terms favorable to or affordable by the Company.

It  is  the  intent  of  management  and  significant  stockholders  to  provide
sufficient  working  capital  necessary to support and preserve the integrity of
the  corporate  entity.  However,  there  is  no  legal  obligation  for  either
management or significant stockholders to provide additional future funding.


Note C - Summary of Significant Accounting Policies

1.   Cash and cash equivalents
     -------------------------

     The Company considers all cash on hand and in banks,  including accounts in
     book overdraft  positions,  certificates of deposit and other highly-liquid
     investments with maturities of three months or less, when purchased,  to be
     cash and cash equivalents.

     Cash  overdraft  positions may occur from time to time due to the timing of
     making bank deposits and releasing checks, in accordance with the Company's
     cash management policies.

2.   Inventory
     ---------

     Inventory  consists of books and educational  materials held for resale and
     are  stated at the lower of cost or market  using the  first-in,  first-out
     (FIFO) method.

3.   Property and equipment
     ----------------------

     Property and equipment was listed at cost, less  accumulated  depreciation.
     Depreciation was computed using the straight-line method over the estimated
     useful  lives of the  assets  or term of the  affiliated  lease  agreement.
     Expenditures  for  maintenance  and repairs are charged to operations  when
     incurred and betterments with affect future periods are capitalized.  Gains
     or losses on the  disposition  of property and equipment are  recognized in
     the accompanying financial statements on the date of occurrence.

4.   Organization costs
     ------------------

     Organization costs, incurred at the initial  capitalization of the Company,
     were  amortized  over a sixty (60)  month  period  using the  straight-line
     method.

5.   Income taxes
     ------------

     The Company uses the asset and liability  method of  accounting  for income
     taxes. At June 30, 2001 and 2000, respectively,  the deferred tax asset and
     deferred tax liability accounts, as recorded when material to the financial
     statements,  are entirely the result of  temporary  differences.  Temporary
     differences   represent  differences  in  the  recognition  of  assets  and
     liabilities for tax and financial reporting purposes, primarily accumulated
     depreciation and amortization, allowance for doubtful accounts and vacation
     accruals.


                                                                               7

<PAGE>
                         Lucas Educational Systems, Inc.
                          (a development stage company)

             Notes to Consolidated Financial Statements - Continued


Note C - Summary of Significant Accounting Policies - Continued

5.   Income Taxes - continued
     ------------

     As of June 30,  2001,  the Company  has only  nominal  net  operating  loss
     carryforwards  as a result of the July 2001 change in  control.  Due to the
     provisions  of Internal  Revenue  Code Section 338, the Company may have no
     net operating loss carryforwards available to offset financial statement or
     tax  return  taxable  income in future  periods in the event of a change in
     control   involving  50  percentage  points  or  more  of  the  issued  and
     outstanding securities of the Company.

6.   Earnings (loss) per share
     -------------------------

     Basic  earnings  (loss) per share is computed  by  dividing  the net income
     (loss) by the weighted-average  number of shares of common stock and common
     stock  equivalents  (primarily  outstanding  options and warrants).  Common
     stock equivalents  represent the dilutive effect of the assumed exercise of
     the  outstanding  stock  options and  warrants,  using the  treasury  stock
     method.  The calculation of fully diluted earnings (loss) per share assumes
     the dilutive effect of the exercise of outstanding  options and warrants at
     either the  beginning  of the  respective  period  presented or the date of
     issuance,  whichever  is later.  As of June 30,  2001,  the  Company has no
     outstanding warrants and options issued and outstanding.

7.   Revenue Recognition
     -------------------

     Revenue  is  recognized  by the  Company  at the point at which an order is
     shipped at a fixed price,  collection is reasonably assured and the Company
     has no remaining performance obligations.

8.   Advertising expenses
     --------------------

     Advertising  costs are charged to operations at the point that the expenses
     are incurred.

9.   Product development costs
     -------------------------

     Product  development costs are charged to operations in the period in which
     the expenses are incurred.


Note D - Fair Value of Financial Instruments

The carrying amount of cash,  accounts  receivable,  accounts  payable and notes
payable, as applicable,  approximates fair value due to the short term nature of
these items  and/or the current  interest  rates  payable in relation to current
market conditions.


Note E - Concentrations of Credit Risk

In prior periods, the Company maintained cash balances in financial institutions
which were in excess of federally insured limits. The Company experienced no
loss from any of these exposures.


                                                                               8

<PAGE>



                         Lucas Educational Systems, Inc.
                          (a development stage company)

             Notes to Consolidated Financial Statements - Continued


Note F - Income Taxes

The components of income tax (benefit) expense for the six months ended June 30,
2000 and 2000, respectively, are as follows:

                                                           June 30,    June 30,
                                                            2001        2000
                                                           --------    --------
     Federal:
       Current                                             $   --      $    --
       Deferred                                                --           --
                                                           --------    --------
                                                               --           --
                                                           --------    --------
     State:
       Current                                                 --           --
       Deferred                                                --           --
                                                           --------    --------
                                                               --           --
                                                           --------    --------

       Total                                               $   --      $   --
                                                           ========    ========

As of June 30, 2001,  as a result of a July 2001 change in control,  the Company
has a nominal net operating loss  carryforward  to offset future taxable income.
Subject to current regulations,  this carryforward will begin to expire in 2021.
The amount and  availability  of the net  operating  loss  carryforwards  may be
subject to limitations set forth by the Internal  Revenue Code.  Factors such as
the number of shares  ultimately  issued within a three year  look-back  period;
whether there is a deemed more than 50 percent change in control; the applicable
long-term  tax  exempt  bond  rate;  continuity  of  historical  business;   and
subsequent  income of the  Company  all enter  into the  annual  computation  of
allowable annual utilization of the carryforwards.

The  Company's  income tax  expense  for the six months  ended June 30, 2001 and
2000, respectively, are as follows:

                                                           June 30,    June 30,
                                                            2001        2000
                                                           --------    --------
Statutory rate applied to income before income taxes       $  9,000    $ 58,500
Increase (decrease) in income taxes resulting from:
     State income taxes                                        --          --
     Other, including reserve for deferred tax asset
       and application of net operating loss carryforward    (9,000)    (58,500)
                                                           --------    --------

       Income tax expense                                  $   --      $   --
                                                           ========    ========

Temporary  differences,  consisting primarily of statutory deferrals of expenses
for organizational costs and statutory  differences in the depreciable lives for
property and equipment, between the financial statement carrying amounts and tax
bases of assets and liabilities give rise to deferred tax assets and liabilities
as of June 30, 2001 and 2000, respectively:

                                                           June 30,    June 30,
                                                            2001        2000
                                                          ---------   ---------
      Deferred tax assets
        Net operating loss carryforwards                  $    --     $ 583,000
        Less valuation allowance                               --      (583,000)
                                                          ---------   ---------

      Net Deferred Tax Asset                              $    --     $    --
                                                          =========   =========

                                                                               9

<PAGE>



                         Lucas Educational Systems, Inc.
                          (a development stage company)

             Notes to Consolidated Financial Statements - Continued


Note G - Common Stock Transactions

Reverse Stock Split
-------------------

On July 29, 2000, the Stockholders  approved a one-for-four reverse stock split.
The effect of this action is reflected in the accompanying  financial statements
as of the first day of the first period presented.

Series A Preferred Stock
------------------------

On March 1,  2000,  the  Company  established  a series of  voting,  convertible
preferred stock designated as "Series A Preferred  Stock",  consisting of 90,000
shares with stated par value of $0.001 per share. On March 24, 2000, the Company
issued an  aggregate  89,974  shares of Series A Preferred  Stock to  accredited
investors.  On March 24,  2001,  in  accordance  with the rights and  privileges
attached to the Series A Preferred  Stock,  the holders  converted 100.0% of the
issued and outstanding Series A Preferred Stock into Common Stock.

Stock Option Plans
------------------

As of June 30, 2001, all outstanding stock options plans, and grants thereunder,
have been terminated and the Company has no continuing obligations under any of
these arrangements.


Note H - Commitments

In prior periods,  the Company was obligated under a long-term,  non-cancellable
operating lease agreement for telephone equipment. In the course of winding down
operations,  all  equipment  was  returned  to the  lessor;  however,  the lease
document was never formally cancelled. As of the date of this filing, the lessor
has  taken  no  action   with  regard  to  the  lease   agreement.   The  future
non-cancellable  lease payments remaining at the time all equipment was returned
to the lessor was approximately $8,800.




                (Remainder of this page left blank intentionally)





                                                                              10

<PAGE>



Part I - Item 2

Management's  Discussion  and  Analysis of  Financial  Condition  and Results of
Operations

(1)  Caution Regarding Forward-Looking Information

This  quarterly   report  contains   certain   forward-looking   statements  and
information relating to the Company that are based on the beliefs of the Company
or management as well as assumptions made by and information currently available
to  the  Company  or  management.   When  used  in  this  document,   the  words
"anticipate,"   "believe,"   "estimate,"   "expect"  and  "intend"  and  similar
expressions,  as they relate to the Company or its  management,  are intended to
identify forward-looking statements. Such statements reflect the current view of
the  Company   regarding  future  events  and  are  subject  to  certain  risks,
uncertainties  and  assumptions,  including the risks and  uncertainties  noted.
Should  one or more of  these  risks or  uncertainties  materialize,  or  should
underlying assumptions prove incorrect,  actual results may vary materially from
those  described  herein  as  anticipated,   believed,  estimated,  expected  or
intended. In each instance,  forward-looking information should be considered in
light of the accompanying meaningful cautionary statements herein.


(2)  General comments

Lucas  Educational  Systems,  Inc.  (Company) was  incorporated on June 11, 1992
under  the  laws of the  State  of  Delaware.  The  Company's  initial  business
operations,  which  commenced on December 5, 1996,  was to change the way people
learn through  Learning That Lasts(TM).  It's mission was to gain recognition as
the  Nation's  leading   authority  and  largest  provider  of  memory  training
techniques and related educational products.

In  February  2001,  the  Company's  Board of  Directors  resolved  to cease all
operations  related to  educational  activities  and to pursue either the merger
with or acquisition of an unrelated operating entity to enhance the value of the
public  entity.  As of March 31,  2001,  the Company had ceased all  operations,
terminated  all  employees  and began to settle the  remaining  accounts  of the
Company.  As of  June  30,  2001,  the  Company  had  only  nominal  assets  and
liabilities and no business operations.

Due to the  lack of  sustaining  operations  from  inception,  the  Company  has
generated no significant  operating  revenues and has incurred  cumulative  cash
losses of approximately $1,800,000. Accordingly, the Company may be dependent in
future periods upon its current  management and/or  significant  stockholders to
provide  additional  working  capital to preserve the integrity of the corporate
entity  during  this  phase.  It is the  intent of  management  and  significant
stockholders to provide sufficient working capital, if necessary, to support and
preserve  the  integrity of the  corporate  entity;  however,  there is no legal
requirement


(3)  Results of Operations, Plan of Operation, Liquidity and Capital Resources

In  February  2001,  the  Company's  Board of  Directors  resolved  to cease all
operations  related to  educational  activities  and to pursue either the merger
with or acquisition of an unrelated operating entity to enhance the value of the
public  entity.  As of March 31,  2001,  the Company had ceased all  operations,
terminated  all  employees  and began to settle the  remaining  accounts  of the
Company.  As of  June  30,  2001,  the  Company  had  only  nominal  assets,  no
liabilities and no business operations.

During the  quarter  ended June 30,  2001,  the  Company  incurred  general  and
administrative expenses,  principally related to the winding down of operations,
settlement  of accounts  payable and  complying  with the  Regulatory  financial
reporting  requirements  of  approximately  $26,400,  or a net loss per share of
approximately $(0.01) per share.

During the  quarter  ended June 30,  2000,  the  Company  incurred a net loss or
approximately  $172,000, or a net loss per share of approximately  $(0.05). This
loss was incurred as a result of the Company's  amplification  of its then focus
on  development  of product and  increased  activity to establish  marketing and
distribution channels.



                                                                              11

<PAGE>

The  Company  is  currently  dependent  upon  funds  advanced  or  loaned by the
Company's  directors and officers.  The Company's officers and directors have no
formal  commitments or arrangements to advance or loan funds to the Company.  In
such a restricted  cash flow  scenario,  the Company would be unable to complete
any  business  plan  steps,  and  would,  instead,   delay  all  cash  intensive
activities.  Without  necessary cash flow, the Company may be dormant during the
next twelve months,  or until such time as necessary  funds are available to the
Company.


Part II - Other Information

Item 5 - Other Information

     On August 13, 2001,  the  Company's  Board of Directors  made a decision to
     terminate the services of its independent certified public accounting firm,
     Tanner + Co of Salt Lake City,  Utah  (Tanner).  The  termination of Tanner
     resulted from a business  decision  made by  management of the Company,  in
     conjunction  with the July 2001 change in control,  that it would be in the
     best  interests  of the Company to engage the  services  of an  independent
     accountant which has a current relationship with other companies associated
     with the  Company's  management.  As of August 14,  2001,  the  Company has
     notified Tanner of the Board's  decision and is awaiting an  acknowledgment
     from Tanner regarding Tanner's termination.

     Accordingly,  management  of the  Company  believes  that during the period
     through the date of dismissal,  there were no  disagreements  or reportable
     events  with  Tanner  as  described  in  Items  304(a)(1)(iv)  and  (v)  of
     Regulation  S-B,  including  any  disagreements  with Tanner which were not
     resolved  on any matter  concerning  accounting  principles  or  practices,
     financial  statement  disclosure,  or auditing  scope or  procedure,  which
     disagreements,  if not resolved to the  satisfaction of Tanner,  would have
     caused Tanner to make reference to the subject matter of the  disagreements
     in connection with its reports.

     The latest  audit  report of  Tanner,  dated June 11,  2001,  included  the
     following language:  "The accompanying  consolidated  financial  statements
     have been  prepared  assuming  that the  Company  will  continue as a going
     concern. As discussed in note 2 to the consolidated  financial  statements,
     there is substantial  doubt about the ability of the Company to continue as
     a going  concern.  Management's  plans in  regard to that  matter  are also
     described in note 2. The consolidated  financial  statements do not include
     any adjustments that might result from the outcome of this uncertainty."

     On August 13,  2001,  the Board of  Directors  of the Company  approved and
     authorized the engagement of S. W.  Hatfield,  CPA of Dallas,  Texas as the
     independent certified public accountant for the Company.


Item 6 - Exhibits and Reports on Form 8-K

   Exhibits
     16.1           Letter from Tanner + Co.,  Certified Public  Accountants (to
                    be filed by amendment)

   Reports on Form 8-K
     July 19, 2001  Reporting the acquisition of approximately  1,687,178 shares
                    of issued and common stock, constituting approximately 50.5%
                    of the total issued and  outstanding  common stock by Halter
                    Capital Corporation from J. D. Young, Mark C. Milgrom Living
                    Trust UYA  11/13/1996  and Mike & Margaret  Herbuin as Joint
                    Tenants.



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<PAGE>


                                   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.

                                                 Lucas Educational Systems, Inc.

August  14 , 2001                                  /s/ Kevin B. Halter
       ----                                      ---------------------
                                                 Kevin B. Halter
                                                 President, Director and
                                                 Chief Accounting Officer


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