<PAGE>   1

                       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: January 31, 2001
                           Commission File No. 0-28759

                         REAL ESTATE OPPORTUNITIES, INC.
        (Exact Name of Small Business Issuer as specified in its charter)

                     COLORADO                               84-1461919

                 (State or other                    (IRS Employer File Number)
                 jurisdiction of
                  incorporation)

                 3225 East 2nd Ave.
                  DENVER, COLORADO                            80206
    (Address of principal executive offices)                (zip code)

                                 (303) 393-1600
              (Registrant's telephone number, including area code)

     Securities to be Registered Pursuant to Section 12(b) of the Act: None

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

                    Common Stock, $.0.001 per share par value

         Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 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 there is no disclosure of delinquent filers in response to
Item 405 of Regulation S-B is contained in this form and no disclosure will be
contained, to the best of Registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form
10-KSB. [X]

         State issuer's revenues for its most recent fiscal year consisted of
rental income of $7,388. The aggregate market value of the voting stock of the
Registrant held by non-affiliates as of January 31, 2001 was not able to be
determined since the Registrant's stock has not ever traded. The number of
shares outstanding of the Registrant's common stock, as of the latest
practicable date, April 6, 2001, was 6,872,433.


<PAGE>   2

References in this document to "us," "we," or "the Company" refer to Real Estate
Opportunities, Inc.

                                     PART I

     (a) GENERAL DEVELOPMENT OF BUSINESS

     We are a Colorado corporation. Our principal business address is 3225 East
2nd Ave., Denver, Colorado 80206. We are in the real estate development
business. Previously, we were in the retail arts and crafts industry.

          We were incorporated under the laws of the State of Colorado on May
15, 1998 under the name Monument Galleries, Inc. In 1998, we acquired the trade
name "Santa Fe Trail Art Gallery" and the assets and inventory of the Santa Fe
Art Gallery and Museum Store (the "Gallery"). As of January 31, 1999, we sold
this Gallery to a third party entity for the assumption of debt of the assets of
the Gallery.

     On April 6, 2000, our Board of Directors approved our acquisition of all of
the issued and outstanding shares of Real Estate Opportunities, Inc., a private
Colorado corporation (REO). As a result, REO will become a wholly-owned
subsidiary of us, and we changed our name to Real Estate Opportunities, Inc. We
issued a total of 5,482,977 of our common shares in exchange for all of the
issued and outstanding common shares of REO.

     We have not been subject to any bankruptcy, receivership or similar
proceeding.

     (b) NARRATIVE DESCRIPTION OF THE BUSINESS

     Until we acquired REO, we had experienced limited activity since inception.
Our operations have significantly increased. Our fiscal year end is January
31st. We are comprised of one corporation with one subsidiary.

     (c) OPERATIONS

     Since our acquisition of REO, we have been focused on acquiring and
developing real estate properties for our own account. We have two projects in
Weld County, Colorado. We are in the process of developing raw land into
residential lots for sale to homebuilders in one project in Firestone, Colorado.
We have a second project in the town of Frederick, Colorado, which we have
platted into lots. We have built one home in the Frederick development.

    We have also acquired a commercial property in Denver, Colorado which we
developed into retail space. As of April, 2001, all of this property was sold.

         We will continue to look for real estate properties which may be
possible candidates for us to acquire. Any real estate property is a potential
candidate, if the economic benefits are favorable to us.

     In addition we plan to expand through acquisition. We will not only look at
our present industry but will reserve the right to investigate and, if
warranted, merge with or acquire the assets or common stock of an entity
actively engaged in business which generates revenues. We will seek
opportunities for long-term growth potential as opposed to short-term earnings.
As of the date hereof, we have no business acquisition opportunities under
investigation. None of our officers, directors, promoters or affiliates have
engaged in any preliminary contact or discussions with any representative of any
other company regarding the possibility of an acquisition or merger between us
and such other company.

     We have two part-time employees, our President and our Secretary-
Treasurer. Our employees have agreed to allocate a portion of their time to our
activities. These officers anticipate that our business plan can be implemented
by their collectively devoting approximately twenty hours per month to our
business affairs. Consequently, conflicts of interest may arise with respect to
the limited time commitment of such officers. These officers will use their best
judgements to resolve all such conflicts.

     (d) MARKETS

     Our marketing plan is focused initially on developing our real estate
properties and acquiring additional properties. We will use the efforts of our
officers and directors to market our services.


<PAGE>   3

     (e) RAW MATERIALS

     The use of raw materials is not material factor in our operations and is
not expected to be material factor in the future.

     (f) CUSTOMERS AND COMPETITION

     Our potential customers will be in two categories. The first will be other
companies like ours to whom we will resell properties which we have acquired.
The second will be builders, to whom we plan to market our developed properties.
We will use our management's prior contacts to sell to the first group, and will
use the media to sell to the second group.

     We expect to compete for the acquisition of real estate properties and the
sales of those properties with a broad range of competitors. There are a number
of established operations, virtually all of which are larger and better
capitalized than we are and/or have greater personnel resources and technical
expertise. No one company dominates our industry. In view of our combined
extremely limited financial resources and limited management availability, we
believe that we will continue to be at a significant competitive disadvantage
compared to our competitors. There can be no guarantee that we will ever
generate a profit.

     (g) BACKLOG

     At January 31, 2001, we had no backlogs.

     (h) EMPLOYEES

     At as of the date hereof, we have two part-time employees, one of whom
receives $200 per month in salary. The other receives no salary. We do not plan
to hire additional employees in the future.

     (i) PROPRIETARY INFORMATION

     We own no proprietary information.

     (j) GOVERNMENT REGULATION

     We are not subject to any material governmental regulation or approvals.

     (k) RESEARCH AND DEVELOPMENT

     We have never spent any amount in research and development activities.

     (l) ENVIRONMENTAL COMPLIANCE

     We are not subject to any costs for compliance with any environmental laws.

     (m) SUBSEQUENT EVENT

     Between February, 2001 and April, 2001, we sold our Denver commercial
property for gross proceeds of approximately $505,000.

ITEM 2. DESCRIPTION OF PROPERTIES.

     Our business office is located at 3225 East 2nd Ave., Denver, Colorado
80206. We pay $750 per month in rent for this office space, which is occupied by
our President, F. Jeffrey Krupka, under month-to-month lease plus the actual
expenses of telephone and fax and $200 per month for accounting services. We own
raw land real estate properties in Weld County, Colorado. We have built one home
in our Frederick, Colorado development. We also own a commercial property in
Denver, Colorado. Finally, we own common stock which we acquired from our
affiliates.

ITEM 3. LEGAL PROCEEDINGS.

     No material legal proceedings of a material nature to which we are a party
were pending during the reporting period. We know of no legal proceedings of a
material nature pending or threatened or judgments entered against any of our
directors or officers in their capacity as such.


<PAGE>   4

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

     We did not submit any matter to a vote of security holders through
solicitation of proxies or otherwise during the fourth quarter of the fiscal
year covered by this report.

                                     PART II

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

     (a) PRINCIPAL MARKET OR MARKETS

     Our securities have never been listed for trading on any market and were
not quoted at the fiscal year ended January 31, 2001. We received permission in
March, 2001 to trade in the Over-the-Counter market on the NASD's "Electronic
Bulletin Board" under the trading symbol RLEO. We commenced trading in April,
2001.

     (b) APPROXIMATE NUMBER OF HOLDERS OF COMMON STOCK

     As of January 31, 2001, we had a total of 6,872,433 of our common shares
outstanding. The number of holders of record of our common stock at that date
was approximately sixty-eight.

     (c) DIVIDENDS

     Holders of common stock are entitled to receive such dividends as may be
declared by our Board of Directors. No dividends on the common stock were paid
by us during the periods reported herein nor do we anticipate paying dividends
in the foreseeable future.

     (d) THE SECURITIES ENFORCEMENT AND PENNY STOCK REFORM ACT OF 1990

     The Securities Enforcement and Penny Stock Reform Act of 1990 requires
additional disclosure and documentation related to the market for penny stock
and for trades in any stock defined as a penny stock. Unless we can acquire
substantial assets and trade at over $5.00 per share on the bid, it is more
likely than not that our securities, for some period of time, would be defined
under that Act as a "penny stock." As a result, those who trade in our
securities may be required to provide additional information related to their
fitness to trade our shares. Also, there is the requirement of a broker-dealer,
prior to a transaction in a penny stock, to deliver a standardized risk
disclosure document that provides information about penny stocks and the risks
in the penny stock market. Further, a broker-dealer must provide the customer
with current bid and offer quotations for the penny stock, the compensation of
the broker-dealer and its salesperson in the transaction, and monthly account
statements showing the market value of each penny stock held in the customer's
account. These requirements present a substantial burden on any person or
brokerage firm who plans to trade our securities and would thereby make it
unlikely that any liquid trading market would ever result in our securities
while the provisions of this Act might be applicable to those securities.

     (e) BLUE SKY COMPLIANCE

     The trading of penny stock companies may be restricted by the securities
laws ("Blue Sky" laws) of the several states. Management is aware that a number
of states currently prohibit the unrestricted trading of penny stock companies
absent the availability of exemptions, which are in the discretion of the
states' securities administrators. The effect of these states' laws would be to
limit the trading market, if any, for our shares and to make resale of shares
acquired by investors more difficult.

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

Forward-Looking Statements

     The following discussion contains forward-looking statements regarding our
Company, its business, prospects and results of operations that are subject to
certain risks and uncertainties posed by many factors and events that could
cause our actual business, prospects and results of operations to differ
materially from those that may be anticipated by such forward-looking
statements. Factors that may affect such forward-looking statements include,
without limitation: our ability to successfully develop new products for new
markets; the impact of competition on our revenues, changes in law or regulatory
requirements that adversely affect or preclude clients from using our products
or certain applications; delays our introduction of new products or services;
and our failure to keep pace with emerging technologies.


<PAGE>   5
     When used in this discussion, words such as "believes", "anticipates",
"expects", "intends" and similar expressions are intended to identify
forward-looking statements, but are not the exclusive means of identifying
forward-looking statements. Readers are cautioned not to place undue reliance on
these forward-looking statements, which speak only as of the date of this
report. Our Company undertakes no obligation to revise any forward-looking
statements in order to reflect events or circumstances that may subsequently
arise. Readers are urged to carefully review and consider the various
disclosures made by us in this report and other reports filed with the
Securities and Exchange Commission that attempt to advise interested parties of
the risks and factors that may affect our business.

Results of Operations

     We are now generating revenues from operations. In addition, we were
profitable for the year ended January 31, 2001. We had rental income of $7,388
and other income of $106,121 for the year ended January 31, 2001, compared to no
rental income and $1,000 of other income for the period from inception through
January 31, 2000. Our total operating expenses for the twelve months ended
January 31, 2001 were $157,275 compared to $1,000 for the period from inception
through January 31, 2000. The major components of our operating expenses are
general and administrative and include legal, accounting, rent, commissions,
consulting, wages, and related expenses.

     Our net income from operations for the twelve months ended January 31, 2001
was $21,500, compared to a loss of $1,000 for the period from inception through
January 31, 2000.

     The development of operations was the principal difference for the year
ended January 31, 2001 compared to the period from inception through January 31,
2000. We developed substantial operations for the first time. We were also
profitable for the first time in our history for the fiscal year ended January
31, 2001. For the coming fiscal year, we plan to continue our business focus in
the development of our real estate projects and to search for new projects which
may show profitable potential. We may also look to increase our operations by
searching for acquisition candidates to complement our business strategy,
although we have made no efforts to find such candidates so far.

Liquidity and Capital Resources

     Cash increased to $4,451 as of January 31, 2001, compared to $3,336 as of
January 31, 2000.

     We used $133,064 in investing activities for the fiscal year ended January
31, 2001. Net cash provided by financing activities was $240,539, which included
$207,564 from a private placement.

     While we are now profitable, we believe that it is important to increase
our revenues as well as maintaining our profitability. Our plan remains to build
our Company through the development of real estate projects. However, we may
also look for business acquisition candidates, although we have concluded no
additional acquisitions and have spoken with no other potential candidates.

     During the next twelve months, we plan to investigate an offering of our
securities, whether through a private placement or a public offering. At the
present time, we have no firm arrangements with regard to either type of
offering. We do not intend to pay dividends in the foreseeable future.

ITEM 7. Financial Statements.


<PAGE>   6
                         REAL ESTATE OPPORTUNITIES, INC.
                       (Formerly Monument Galleries, Inc.)

                        Consolidated financial statements

                                January 31, 2001

                   (With Independent Auditors' Report Thereon)


<PAGE>   7


                         REAL ESTATE OPPORTUNITIES, INC.
                       (FORMERLY MONUMENT GALLERIES, INC.)
                         INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
                                                                                          Page
                                                                                          ----
<S>                                                                                       <C>
Independent auditors' report..........................................................    F-2

Consolidated balance sheet, January 31, 2001..........................................    F-3

Consolidated statements of income, for the year ended January 31, 2001 and the
      period from January 1, 2000 (inception) through January 31, 2000................    F-4

Consolidated statement of changes in shareholders' equity, January 1, 2000
      (date of inception) through January 31, 2001....................................    F-5

Consolidated statements of cash flows, for the year ended January 31, 2001 and the
      period from January 1, 2000 (inception) through January 31, 2000................    F-6

Notes to consolidated financial statements............................................    F-7
</TABLE>


                                      F-1
<PAGE>   8


                          INDEPENDENT AUDITORS' REPORT


The Board of Directors and Shareholders
Real Estate Opportunities, Inc.


We have audited the accompanying consolidated balance sheet of Real Estate
Opportunities, Inc. (the "Company") and subsidiary as of January 31, 2001, and
the related consolidated statements of income, shareholders' equity, and cash
flows for the year ended January 31, 2001 and the period from January 1, 2000
(date of inception) through January 31, 2000. These consolidated financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audits.

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

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Real Estate
Opportunities, Inc. as of January 31, 2001, and the results of their operations
and their cash flows for the year ended January 31, 2001 and the period from
January 1, 2000 (date of inception) through January 31, 2000 in conformity with
accounting principles generally accepted in the United States.

As discussed in Note 4 to the consolidated financial statements, the Company
bought investments from certain affiliates during the period under audit. As of
January 31, 2001, the amount of the investments acquired from affiliates
represents a substantial portion of the Company's total assets. Such purchases
are not at terms equivalent to arm's-length transactions under generally
accepted accounting principles. Accordingly, the operating results presented may
not be indicative of the operating results had the Company not entered into
these related party transactions.




Cordovano and Harvey, P.C.
Denver, Colorado
March 8, 2001, except as to Note 12,
which is April 26, 2001


                                       F-2

<PAGE>   9


                        REAL ESTATE OPPORTUNITIES, INC.
                           CONSOLIDATED BALANCE SHEET
                                JANUARY 31, 2001
<TABLE>
<S>                                                                            <C>
                                     ASSETS
Cash .......................................................................   $      4,451
Prepaid expenses ...........................................................          2,414
Residential development:
       Town of Firestone ...................................................        576,124
       Town of Frederick ...................................................        752,254
Commercial rental property .................................................        175,140
Investment acquired from related party (Note 2)  ...........................         50,062
                                                                               ------------
                                                                               $  1,560,445
                                                                               ============
                      LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
       Acquisition and development notes (Note 4):
            Residential development:
                  Town of Firestone:
                     Related parties .......................................   $    454,005
                     Other .................................................        184,884
                  Town of Frederick:
                     Related parties .......................................        320,133
                     Other .................................................        271,743
       Commercial rental property notes (Note 6):
            Related parties ................................................         32,519
            Other ..........................................................        107,481
       Loans payable .......................................................         60,000
       Accrued interest payable:
            Related parties ................................................          9,456
            Other ..........................................................         14,242
       Accounts payable ....................................................          1,480
       Deposits ............................................................         25,000
       Income taxes payable (Note 9) .......................................          4,734
       Accrued real estate taxes ...........................................         10,422
                                                                               ------------
                  Total liabilities ........................................      1,496,099
                                                                               ------------

Commitment (Note 10) .......................................................             --

Shareholders' equity (Note 8):
       Common stock, $0.001 par value, 50,000,000 shares
            authorized, 6,872,433 shares issued and outstanding ............          6,873
       Additional paid-in capital ..........................................         20,473
       Stock option to purchase 200,000 shares of common stock outstanding .         16,500
       Retained earnings ...................................................         20,500
                                                                               ------------
                  Total shareholders' equity ...............................         64,346
                                                                               ------------
                                                                               $  1,560,445
                                                                               ============
</TABLE>

           See accompanying notes to consolidated financial statements

                                      F-3
<PAGE>   10

                        REAL ESTATE OPPORTUNITIES, INC.
                       CONSOLIDATED STATEMENTS OF INCOME

<TABLE>
<CAPTION>
                                                                                        January 1, 2000
                                                                                          (inception)
                                                                          Year Ended        Through
                                                                          January 31,     January 31,
                                                                             2001            2000
                                                                         ------------   ---------------
<S>                                                                      <C>            <C>
Rental income ........................................................   $      7,388    $         --
                                                                         ------------    ------------

Operating expenses:
       General and administrative ....................................         87,972              --
       General and administrative-stock based compensation (Note 8) ..         38,275              --
       General and administrative-related parties (Note 4) ...........         28,650           1,000
                                                                         ------------    ------------
                       Total operating expenses ......................        154,897           1,000
                                                                         ------------    ------------

                       Operating loss ................................       (147,509)         (1,000)
                                                                         ------------    ------------

Other income (expense):
       Other income ..................................................            592              --
       Gain on sale of collateral (Note 2) ...........................         50,803
       Gain on sale of assets acquired from related party (Note 2) ...         51,726              --
       Interest income ...............................................          3,000              --
       Interest expense ..............................................         (2,378)             --
                                                                         ------------    ------------
                       Total other income (expense) ..................        103,743              --
                                                                         ------------    ------------
                       Loss before extraordinary item and
                          provision for income taxes .................        (43,766)         (1,000)

Extraordinary item (Note 2):
       Early extinguishment of related party debt, net of $14,994 in
            income taxes .............................................         55,006              --
                                                                         ------------    ------------
                       Income before provision for income taxes ......         11,240          (1,000)

Provision for income taxes - benefit (Note 9) ........................         10,260              --
                                                                         ------------    ------------
                       Net income (loss) .............................   $     21,500    $     (1,000)
                                                                         ============    ============

Net income (loss) per share:
       Basic:
            Before extraordinary item and income taxes ...............              *               *
                                                                         ============    ============
            After extraordinary item and income taxes ................              *               *
                                                                         ============    ============
       Number of shares used for computing net income (loss) per share      6,337,371       1,330,500
                                                                         ============    ============
       Dileted:
            Before extraordinary item and income taxes ...............              *               *
                                                                         ============    ============
            After extraordinary item and income taxes ................              *               *
                                                                         ============    ============
       Number of shares used for computing net income (loss) per share      6,376,615       1,330,500
                                                                         ============    ============
</TABLE>

* Less than $.01 per share

           See accompanying notes to consolidated financial statements

                                      F-4
<PAGE>   11


                        REAL ESTATE OPPORTUNITIES, INC.
           CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDER'S EQUITY
              JANUARY 1, 2000 (INCEPTION) THROUGH JANUARY 31, 2001

<TABLE>
<CAPTION>
                                                       Common Stock           Additional      Common
                                                 ------------------------       Paid In        Stock       Retained
                                                   Shares        Amount         Capital       Options      Earnings        Total
                                                 -----------   -----------   ------------    ---------    ----------    ----------
<S>                                              <C>           <C>           <C>             <C>          <C>           <C>
Net loss for the period from
      January 1, 2000 (inception) through
      January 31, 2000 .......................            --   $        --   $         --    $      --    $   (1,000)   $   (1,000)
                                                 -----------   -----------   ------------    ---------    ----------    ----------
           Balances, January 31, 2000 ........            --            --             --           --        (1,000)       (1,000)
Sale of common stock net of
      offering costs of $6,000  ..............     3,491,430         3,491        204,073           --            --       207,564
Shares of common stock issued
      in exchange for property (Note 8) ......     1,686,665         1,687        251,313           --            --       253,000
Excess paid over historical cost
      for rights acquired from
      related parties (Note 4)  ..............            --            --       (495,766)          --            --      (495,766)
Shares of common stock issued
      in exchange for services (Note 8) ......       254,831           255         18,120           --            --        18,375
Issuance of stock options to purchase
      350,000 shares of common stock .........            --            --             --       19,900            --        19,900
Shares of common stock issued
      in exchange for debt (Note 8) ..........        84,882            85         12,647           --            --        12,732
Merger with MGI (Note 8) .....................     1,127,625         1,128          6,888           --            --         8,016
Common stock issued on options
      exercised (Note 8) .....................       227,000           227         23,198       (3,400)           --        20,025
Net income for the year ......................            --            --             --                     21,500        21,500
                                                 -----------   -----------   ------------    ---------    ----------    ----------
           Balances, January 31, 2001 ........     6,872,433   $     6,873   $     20,473    $  16,500    $   20,500    $   64,346
                                                 ===========   ===========   ============    =========    ==========    ==========
</TABLE>

           See accompanying notes to consolidated financial statements

                                      F-5
<PAGE>   12


                        REAL ESTATE OPPORTUNITIES, INC.
                      CONSOLIDATED STATEMENT OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                                                                January 1, 2000
                                                                                                                  (inception)
                                                                                                   Year Ended       Through
                                                                                                   January 31,    January 31,
                                                                                                      2001            2000
                                                                                                  ------------  ---------------
<S>                                                                                               <C>           <C>
Operating Activities
      Net income (loss) .......................................................................   $     21,500    $     (1,000)
      Adjustments to reconcile net loss to net cash used in operating activities:
           Common stock issued for services (Note 8) ..........................................         18,375              --
           Issuance of performance stock options (Note 8) .....................................         19,900              --
           (Increase) decrease in:
                Residential development and commercial real estate ............................     (1,520,408)        (33,174)
                Prepaid expenses and other ....................................................        (29,125)        (11,000)
           Increase (decrease) in:
                Acquisition and development and commercial property notes .....................      1,318,064              --
                Accounts payable, accrued interest, deposits and other ........................         65,334              --
                                                                                                  ------------    ------------
                     Net cash used by operating activities ....................................       (106,360)        (45,174)
                                                                                                  ------------    ------------

Investing Activities:
      Cash paid for rights to future revenues from the sale of common stock, acquired from
           related party (Note 2) .............................................................        (26,480)             --
      Cash paid for rights to future revenues from a certain note receivable, acquired from
           related party (Note 2) .............................................................        (14,430)             --
      Cash paid for rights to future revenues from real estate development, acquired from
           related party (Note 2) .............................................................        (92,154)             --
                                                                                                  ------------    ------------
                     Net cash used by investing activities ....................................       (133,064)             --
                                                                                                  ------------    ------------

Financing Activities:
      Short-term borrowings, related parties (Note 2) .........................................         29,000              --
      Repayment of short-term borrowings, related parties (Note 2) ............................        (29,000)             --
      Short-term borrowings, other ............................................................        106,599          48,510
      Repayment of short-term borrowings, other ...............................................        (93,649)             --
      Proceeds from the sale of common stock, net of offering costs (Note 8) ..................        227,589              --
                                                                                                  ------------    ------------
                     Net cash provided by financing activities ................................        240,539          48,510
                                                                                                  ------------    ------------

Net change in cash ............................................................................          1,115           3,336
Cash at beginning of period ...................................................................          3,336              --
                                                                                                  ------------    ------------
                     Cash at end of  period ...................................................   $      4,451    $      3,336
                                                                                                  ------------    ------------

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
      Cash paid during the period for:
           Interest ...........................................................................   $     57,296    $         --
                                                                                                  ============    ============
           Income taxes .......................................................................   $         --    $         --
                                                                                                  ============    ============

      Noncash financing Activities:
           Common stock issued for property ...................................................   $    253,000    $         --
                                                                                                  ============    ============
           Common stock issued for debt .......................................................   $     12,732    $         --
                                                                                                  ============    ============
</TABLE>

           See accompanying notes to consolidated financial statements

                                      F-6
<PAGE>   13


                         REAL ESTATE OPPORTUNITIES, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


(1)      SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         (a)      ORGANIZATION AND BASIS OF PRESENTATION

                  Real Estate Opportunities, Inc. (the "Company") was
                  incorporated on January 1, 2000 as FJK Millinium Fund V, Inc.
                  and subsequently changed its name to FJK Opportunities, Inc.
                  On April 6, 2000, the Company merged with an affiliate, Real
                  Estate Opportunities, Inc. (formerly Monument Galleries,
                  Inc.), a Colorado corporation, incorporated on May 15, 1998.
                  See Note 8. The consolidated financial statements include the
                  accounts of the Company and its wholly owned subsidiary. All
                  intercompany transactions have been eliminated in
                  consolidation.

                  The Company acquires tracts of raw land and develops them into
                  residential lots for sale to Homebuilders. The Company
                  currently has projects in Firestone and Frederick in Weld
                  County, Colorado. The Company has built one home on the
                  Frederick development. In addition, the Company has acquired,
                  for redevelopment, a commercial rental property in Denver,
                  Colorado.

                  The Company has raised capital and engaged in certain real
                  estate activity since inception. Inherent in the Company's
                  business are various risks and uncertainties, including its
                  limited operating history, historical operating losses, and
                  the success of its recent merger. The Company's future success
                  will be dependent upon its ability to create and provide
                  effective and competitive services on a timely and
                  cost-effective basis. The Company's year-end is January 31.

          (b)     USE OF ESTIMATES

                  Although sales of residential real estate in Weld County have
                  improved during the last few years, current statistics
                  indicate that the market may begin to decline. The preparation
                  of financial statements in accordance with generally accepted
                  accounting principles requires management to make estimates
                  and assumptions that affect the reported amounts of assets and
                  liabilities and the disclosure of contingent assets and
                  liabilities at the date of financial statements and the
                  reported amounts of revenues and expenses during the reporting
                  period. Actual results could differ from those estimates.
                  However, the primary estimates that may have a variance
                  material to the consolidated financial statements is the real
                  estate's fair value (less selling costs) and the net amounts
                  the Company will realize from selling the real estate
                  presently held for sale. Due to the uncertainties inherent in
                  such estimates, it is at least reasonably possible that,
                  within the next year, the market will decline and losses will
                  be incurred on sales. No estimate can be made of the range of
                  loss that is reasonably possible.

          (c)     CASH AND CASH EQUIVALENTS

                  The Company considers all highly liquid securities with
                  original maturities of three months or less when acquired to
                  be cash equivalents. There were no cash equivalents as of
                  January 31, 2001.

         (d)      REVENUE AND COST RECOGNITION

                   Costs that clearly relate to land development projects are
                   capitalized. Lot acquisition, materials, and other direct
                   costs and interest and other indirect costs related to
                   acquisition, development, and construction of lots and homes
                   are capitalized. Costs are allocated to the project
                   components by the specific identification method, whenever
                   possible. Otherwise, acquisition costs are


                                      F-7
<PAGE>   14

                         REAL ESTATE OPPORTUNITIES, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


                  allocated based on their relative fair value before
                  development and direct and indirect costs of developing
                  residential lots are allocated to individual lots based on
                  relative sales value. Interest costs are capitalized while
                  development is in progress. Capitalized costs of residential
                  lots are charged to earnings when the related revenue is
                  recognized. Costs incurred in connection with developed lots
                  and completed homes and other selling and administrative costs
                  are charged to earnings when incurred.

                  Revenues from lot development and home building are recognized
                  upon closing of the sale. If a lot is sold prior to completion
                  of development, revenue allocable to performance after the
                  sale is deferred. The allocation is determined based on the
                  percentage of cost incurred to date to estimated total costs.

         (e)      AMENITIES

                  The cost of amenities that will be left with the development
                  are capitalized as a cost of the project and allocated to the
                  components that have benefited. Operating revenues and
                  expenses of those amenities are accounted for as decreases or
                  increases in project costs. The cost of amenities that will be
                  sold separately are capitalized as separate properties, but
                  the cost of amenities in excess of their fair value at
                  completion are allocated to the components of the projects
                  they have benefited. Operating revenues and expenses of
                  amenities that will be sold separately are capitalized until
                  the amenities are substantially complete and recognized in net
                  income thereafter.

         (f)      IMPAIRMENT OF REAL ESTATE

                  Completed lots are reported in the balance sheet at the lower
                  of their carrying amount or fair value less costs to sell.
                  Land to be developed or under development is assessed for
                  impairment when management believes that events or changes in
                  circumstances indicate that its carrying amount may not be
                  recoverable. Based on this assessment, property that is
                  considered impaired is written down to its fair value.
                  Impairment losses are recognized through a charge to expense.

         (g)      INTANGIBLE ASSETS

                  The Company acquired certain exclusive rights to future
                  earnings, more fully described in Note 4. Costs of acquiring
                  the exclusive rights are reflected as intangibles in the
                  accompanying consolidated financial statements. The costs of
                  such rights are recovered at the time the rights are sold or
                  otherwise disposed of. Related income is recognized when
                  earned.

          (h)     IMPAIRMENT OF INTANGIBLE ASSETS

                  The Company evaluates the carrying value of its long-lived
                  assets under the provisions of Statement of Financial
                  Accounting Standards No. 121, Accounting for the Impairment of
                  Long-Lived Assets and for Long-Lived Assets to Be Disposed Of
                  (Statement No. 121). Statement No. 121 requires impairment
                  losses to be recorded on long-lived assets used in operations,
                  when indicators of impairment are present and the undiscounted
                  future cash flows estimated to be generated by those assets
                  are less than the assets' carrying amount. If such assets are
                  impaired, the impairment to be recognized is measured by the
                  amount by which the carrying amount of the assets exceeds the
                  fair value of the assets. Assets to be disposed of are
                  reported at the lower of the carrying value or fair value,
                  less costs to sell.


                                      F-8
<PAGE>   15

                         REAL ESTATE OPPORTUNITIES, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


         (i)      INCOME TAXES

                  The Company accounts for income taxes under the provisions of
                  Statement of Financial Accounting Standards No. 109,
                  Accounting for Income Taxes (SFAS 109). SFAS 109 requires
                  recognition of deferred tax liabilities and assets for the
                  expected future tax consequences of events that have been
                  included in the consolidated financial statements or tax
                  returns. Under this method, deferred tax liabilities and
                  assets are determined based on the difference between the
                  financial statement and tax bases of assets and liabilities
                  using enacted tax rates in effect for the year in which the
                  differences are expected to reverse.

          (j)     STOCK BASED COMPENSATION

                  The Company accounts for stock-based compensation arrangements
                  in accordance with Statement of Financial Accounting Standards
                  ("SFAS") No. 123, "Accounting for Stock-Based Compensation,"
                  which permits entities to recognize as expense over the
                  vesting period the fair value of all stock-based awards on the
                  date of grant. Alternatively, SFAS No. 123 allows entities to
                  continue to apply the provisions of Accounting Principle Board
                  ("APB") Opinion No. 25 and provide pro forma net earnings
                  (loss) disclosures for employee stock option grants as if the
                  fair-value-based method defined in SFAS No. 123 had been
                  applied. The Company has elected to continue to apply the
                  provisions of APB Opinion No. 25, where applicable, and
                  provide the pro forma disclosure provisions of SFAS No. 123.

          (k)     TRANSFER PRICING OF TRANSACTIONS AMONG RELATED ENTITIES

                  The Company accounts for certain related party transactions in
                  accordance with SEC policies. The SEC staff has stated that
                  assets should be valued at their historical cost in a transfer
                  of assets between companies under common control.

         (l)      EARNINGS PER SHARE

                  Basic earnings per share are generally calculated by dividing
                  net income by the weighted average number of shares
                  outstanding. Diluted earnings per share reflect the potential
                  dilution that would occur if all grants, agreements, and
                  contracts to issue shares were exercised or converted. Diluted
                  income per share is the same as basic income per share for the
                  period ended January 31, 2001, as options to sell 323,000
                  shares of the Company's common stock, outstanding at January
                  31, 2001, were anti-dilutive securities.

(2)      RELATED PARTY TRANSACTIONS

         The following entities are affiliates of the Company through common
         ownership and control: Krupka and Associates, LLC; Platinum Financial
         Fund LLC ("Platinum"); Krupka-Brophy Profit Sharing Plan (the "Plan");
         and Asset Realization, Inc.

         In January 2000, the Company acquired a 26 percent interest in
         Platinum's share of certain commercial real property for $25,674 and
         50,000 shares of the Company's common stock for $.15 per share , or
         $7,500. In March 2000, the Company acquired an additional 5 percent
         interest from an unrelated 3rd party in exchange for 36,665 shares of
         the Company's common stock valued at $5,500. In April 2000, the Company
         acquired an additional 10 percent interest from Platinum for $27,600
         bringing its interest in Platinum's share to 41 percent. Platinum holds
         a one-third interest in the property. The interest entitles Platinum to
         one-third of the rental income and management fees from the property
         and one-third of the net proceeds from the sale of the property. The
         Company recorded the transactions at


                                      F-9
<PAGE>   16

                         REAL ESTATE OPPORTUNITIES, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

         Platinum's historical cost. The difference between the transaction
         price ($66,272) and Platinum's historical cost ($30,525) or $35,747 was
         charged to additional-paid-in capital, in the accompanying consolidated
         financial statements.

         On March 8, 2000, the Company acquired a Promissory Note (the "Note")
         from Platinum for $14,430, 100,000 shares of the Company's common stock
         and the assumption of three debt obligations payable totaling $59,289.
         The Note, which is collateralized by real property, was in default. The
         Note's face value was $82,000. The Company recorded the Note at
         Platinum's historical cost and subsequently wrote the Note down to its
         net realizable value at January 31, 2001. In May, 2000, the Company
         sold the underlying real property and recorded a gain of $50,803.

         On February 3, 2000, the Company entered into a purchase agreement to
         acquire certain land held for development in the town of Firestone from
         the Krupka-Brophy Profit Sharing Plan (the "Plan") for $65,000 and the
         assumption certain mortgage notes, payable to the Plan and to Asset
         Realization, Inc. totaling $690,000. The Company recorded the
         transactions at the Plan's historical cost. The difference between the
         transaction price ($755,000 and Platinum's historical cost ($479,429)
         or $275,571 was charged to additional-paid-in capital, in the
         accompanying consolidated financial statements. The Plan forgave
         $70,000 in principal payments during the year ended January 31, 2001.

         On November 2, 2000, the Company entered into a purchase agreement to
         acquire land held for development in Frederick from the Krupka-Brophy
         Profit Sharing Plan (the "Plan") for $15,000 and notes payable to the
         Plan and to certain unrelated third parties totaling $600,000. The
         Company recorded the transactions at the Plan's historical cost. The
         difference between the transaction price ($615,000) and Platinum's
         historical cost ($595,919) or $19,081 was charged to additional-paid-in
         capital, in the accompanying consolidated financial statements.

         On February 3, 2000, the Company acquired the right to the proceeds
         from the sale of 3,888 shares of American Tire Corporation (ATC) common
         stock from Platinum for $11,480. On February 18, 2000, the Company
         acquired an additional right to the proceeds from the sale of 80,000
         shares of ATC common stock from Platinum for $15,000 and 1.5 million
         shares of the Company's common stock. The Company recorded the
         transactions at Platinum's historical cost. The difference between the
         transaction price ($251,480) and Platinum's historical cost ($91,752)
         or $159,728 was charged to additional-paid-in capital, in the
         accompanying consolidated financial statements.

         During the year ended January 31, 2001 and period from January 1, 2000
         (inception) through January 31, 2000, the Company purchased real estate
         consulting services from an affiliate totaling $15,500 and $500,
         respectively. In addition, the Company paid an affiliate $13,150 and
         $500, respectively, for office rent, and interest totaling $44, 482 and
         $-0-, respectively.

(3)      RESIDENTIAL DEVELOPMENT

         The Firestone project is under development, but may be sold prior to
         completion. Management expects that costs of at least $600,000 will be
         incurred to complete development. Management estimates that the
         development could be subdivided into lots within 24 months.

         Development of the Frederick land into lots is 95 percent complete.
         Management expects that costs of approximately $45,000 will be incurred
         to complete development. The Company built a home on one of the lots.
         Management expects to sell the home within 6 months and that the 14
         remaining lots will be sold within 24 months.


                                      F-10
<PAGE>   17


                         REAL ESTATE OPPORTUNITIES, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


(4)      ACQUISITION AND DEVELOPMENT NOTES

          Acquisition and development notes consist of the following as of
January 31, 2001:

<TABLE>
<S>                                                                                        <C>
Firestone development-related parties:
Note payable to Krupka-Brophy Profit Sharing plan (an affiliate), collateralized
     by a deed of trust, at 13.5 percent interest,
     with interest and principal due August 1, 2001 ..................................     $     38,799
Note payable to Krupka-Brophy Profit Sharing plan (an affiliate),
     collateralized by a deed of trust, at 9 percent interest,
     with semi-annual payments of $39,730 and a balloon payment
     of $503,410 due February 3, 2002 ................................................          415,206
                                                                                           ------------
                                  Total Firestone development-related parties ........     $    454,005
                                                                                           ============
Firestone development-other:
Note payable to Nancy Miller, collateralized by deed of trust, at 13.5 percent
     interest, with semi-annual payments of $6,338
     and a balloon payment of $33,971 due February 3, 2002 ...........................     $  33,266.00
Note payable to Nancy Miller,  collateralized by deed of trust,
     at 13.5 percent interest, with semi-annual payments of $6,338
     and a balloon payment of $103,600 due February 3, 2002 ..........................          102,813
Note payable to Nancy Miller,  collateralized by deed of trust,
     at 13.5 percent interest, with semi-annual payments of $5,363
     and a balloon payment of $46,030 due February 3, 2002 ...........................           48,805
                                                                                           ------------
                                  Total Firestone development-other ..................     $    184,884
                                                                                           ============
Frederick development-related parties:
Note payable to Krupka-Brophy Profit Sharing Plan, collateralized by deed of
     trust, at 8.5 percent interest, with interest
     and principal due June 1, 2001 ..................................................     $     27,639
Note payable to Krupka-Brophy Profit Sharing Plan, collater-
     alized by a first deed of trust, at 6 percent interest, with semi- annual
     payments of $39,730 and a balloon payment with int-
     erest and principal due December 15, 2001 .......................................          292,494
                                                                                           ------------
                                  Total Frederick development-related parties ........     $    320,133
                                                                                           ============
Frederick development-other:
Note payable to Robert Singer, collateralized by deed of trust, at 15 percent
     interest, monthly interest payments of $1,875,
     and a balloon payment of $152,030 due October 4, 2001 ...........................     $    150,139
Note payable to Robert Singer, collateralized by deed of trust,
     at 15.5 percent interest, due February 27, 2001 .................................          121,604
                                                                                           ------------
                                  Total Frederick development-other ..................     $    271,743
                                                                                           ============

Capitalized interest was $78,616.
</TABLE>


                                      F-11
<PAGE>   18

                         REAL ESTATE OPPORTUNITIES, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(5)      COMMERCIAL RENTAL PROPERTY

         This property consists of a storefront retail building with six stores
         situated on a commercial site of 6,003 square feet. The property also
         includes an advertising billboard, which rents at $600 per year. Gross
         rents are approximately $39,600 per year, based on 100 percent
         occupancy.

(6)      COMMERCIAL RENTAL PROPERTY NOTES

         Commercial rental property notes consist of the following as of January
         31, 2001:

<TABLE>
<S>                                                                         <C>
Commercial rental property notes-related parties:
Note payable to Asset Realization, Inc., collateralized by a
     deed of trust, at 13 percent interest, due June 15, 2001 .........     $ 12,519
Note payable to Color-Spec Technologies, Inc., collateralized
     by a deed of trust, at 13 percent interest, due June 15, 2001 ....       20,000
                                                                            --------
Total commercial rental property notes-related parties ................     $ 32,519
                                                                            ========
Commercial rental property notes-other:
Note payable to Edward Herber, collateralized by a
     deed of trust, at 13 percent interest, due June 15, 2001 .........     $ 15,000
Note payable to Shirley Herber, collateralized by a
     deed of trust, at 13 percent interest, due June 15, 2001 .........       15,000
Note payable to Robert Singer, collateralized by a
     deed of trust, at 13 percent interest, due June 15, 2001 .........       38,085
Note payable to Thomas Vesey, collateralized by a
     deed of trust, at 13 percent interest, due June 15, 2001 .........       39,396
                                                                            --------
Total commercial rental property notes-other ..........................     $107,481
                                                                            ========
</TABLE>

(7)      FAIR VALUE OF FINANCIAL INSTRUMENTS

         The fair value of financial instruments at January 31, 2001, none of
         which are held for trading purposes, are as follows:

<TABLE>
<CAPTION>
                                                   Carrying       Fair
                                                    Amount        Value
                                                  ----------   ----------
<S>                                               <C>          <C>
Financial assets:
     Investment acquired from related party ....  $   50,062   $  167,179
Financial liabilities:
     Acquisition and development notes .........  $  986,195   $  986,195
     Commercial rental property notes ..........  $  140,000   $  140,000
     Loans payable .............................  $   60,000   $   60,000
</TABLE>

         Investment acquired from related party: The fair value is estimated
         based on the bid price of the underlying security at January 31, 2001.


                                      F-12
<PAGE>   19


                         REAL ESTATE OPPORTUNITIES, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

         Acquisition and development notes payable: The carrying amounts
         reported in the balance sheet approximate fair value based on current
         market rates for notes with similar maturities and terms. The fair
         values of these notes are estimated based on the amounts needed to
         settle the obligations at the balance sheet date.

         Commercial rental property notes payable: The carrying amounts reported
         in the balance sheet approximate fair value based on current market
         rates for notes with similar maturities and terms. The fair values of
         these notes are estimated based on the amounts needed to settle the
         obligations at the balance sheet date.

         Loans payable: The fair values of these notes are estimated based on
         the amounts needed to settle the obligations at the balance sheet date.

(8)      SHAREHOLDERS' EQUITY

         (a)      STOCK BASED COMPENSATION

                  The Company issued 254,831 shares of its $.001 par value
                  common stock to individuals. The Company recognized $18,375 in
                  expense. The transaction was valued based on the fair value of
                  the stock issued. The transaction was valued by the Board of
                  Directors, after considering contemporaneous stock sales and
                  other analysis.

         (b)      COMMON STOCK ISSUED IN EXCHANGE FOR PROPERTY

                  The Company issued 1,650,000 shares of its $.001 par value
                  common stock to Platinum in exchange for certain rights. The
                  Company recorded the transactions at historical cost and
                  accounted for the transaction as a transfer of assets between
                  companies under common control. In addition, the Company
                  issued 36,665 shares of its $.001 par value common stock to an
                  unrelated third-party in exchange for 3,888 shares of American
                  Tire Corporation common stock. The transaction was valued
                  based on the fair value of the Company's stock.

         (c)      COMMON STOCK ISSUED IN EXCHANGE FOR DEBT

                  The Company issued 84,882 shares of its $.001 par value common
                  stock to a shareholder in exchange for converting a short-term
                  obligation. The transaction was valued at the face value of
                  the debt.

         (d)      PRIVATE OFFERING OF COMMON STOCK

                  During the year ended January 31, 2001, the Company sold
                  3,491,430 shares of its common stock through a series of
                  private equity financings. Net proceeds from the offerings
                  totalled $207,564 after subtracting legal, accounting and
                  printing costs. The securities have not been registered
                  pursuant to the Securities Act of 1933, as amended (the
                  "ACT"), nor have they been registered under the securities act
                  of any state. These securities were offered pursuant to an
                  exemption from registration requirements of the Act and
                  exemptions from registration provided by applicable state
                  securities laws. The securities were offered through the
                  Company's officers and directors, who were not paid any
                  commission or compensation for offering or selling the
                  securities.


                                      F-13
<PAGE>   20


                         REAL ESTATE OPPORTUNITIES, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


         (e)      COMMON STOCK OPTIONS

                  The Company granted an option to purchase 200,000 shares of
                  its common stock at a price of $.08 per share to its corporate
                  attorney on March 1, 2000, which was exercised on April 4,
                  2000. The Company granted an option to purchase 150,000 shares
                  of its common stock at a price of $.275 per share on July 18,
                  2000. The option expires on December 31, 2001. The Company has
                  accounted for these transactions using the fair value method
                  prescribed by SFAS No. 123 using the following weighted
                  average assumptions:

<TABLE>
<S>                                     <C>
Risk-free interest rate...............     5.80%
Expected dividend yield...............        0%
Expected lives........................  162 days
Expected volatility...................    60.00%
</TABLE>

                  The total value of the options granted for the year ended
                  January 31, 2001 and for the period January 1, 2000
                  (inception) through January 31, 2000 was computed at $19,900
                  and $-0-, respectively.

                  The Company granted an employee an option to purchase 200,000
                  shares of its common stock at a price of $.275 per share on
                  May 2, 2000 of which 27,000 were exercised on July 7, 2000.
                  The option expires on May 2, 2001. The Company has accounted
                  for the transaction using the intrinsic value method
                  prescribed by APB No. 25. Had the Company accounted for the
                  transaction under the fair value method (which it did not),
                  the Company's net income would have decreased by $22,000 to a
                  loss of $500.

         (f)      ACQUISITION OF COMPANY UNDER COMMON CONTROL

                  On April 6, 2000, Real Estate Opportunities, Inc. (formerly
                  Monument Galleries, Inc.) acquired all of the outstanding
                  common stock of FJK Opportunities, Inc. (formerly FJK
                  Millenium Fund V, Inc., a company under common control, with
                  Real Estate Opportunities, Inc. the legal surviving entity.
                  The transaction was accounted for as a reverse acquisition
                  between entities under common control. The transaction was
                  valued at historical cost. Since Real Estate Opportunities,
                  Inc. had, prior to the transaction, minimal assets and no
                  operations, the transaction has been accounted for as the sale
                  of 1,127,625 shares of Real Estate Opportunities, Inc.'s
                  common stock for the net assets of FJK Opportunities, Inc.
                  Costs of the transaction have been charged to the period.

(9)      INCOME TAXES

         A reconciliation of U.S. statutory federal income tax rate to the
         effective rate follows for the year ended January 31, 2001 and the
         period from January 1, 2000 (inception) through January 31, 2000:


                                      F-14
<PAGE>   21
                         REAL ESTATE OPPORTUNITIES, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
                                                                     Jan. 1, 2000
                                                        Year ended     Through
                                                        January 31,   January 31,
                                                           2001          2000
                                                        -----------  ------------
<S>                                                     <C>          <C>
U.S. statutory federal rate ........................      15.00%        15.00%
State income tax rate, net of federal benefit ......       4.04%         4.04%
Permanent differences...............................      -0.99%         0.00%
Net operating loss for which no tax
   benefit is currently available...................       0.00%       -19.04%
                                                          -----        ------
                                                          18.05%         0.00%
                                                          =====        ======
</TABLE>

         The Company had no deferred tax assets or deferred tax liabilities at
         January 31, 2001. The balance in the valuation allowance account at
         January 31, 2001 was $-0-. Following the $70,000 gain on the early
         extinguishment of debt, the Company's net income before income taxes
         was $26,234 for the year ended December 31, 2001. The current income
         tax liability on the $26,234 of income totaled $4,734, which is
         included in the accompanying consolidated balance sheet. The $70,000
         gain on the early extinguishment of debt is reported net of $14,994 in
         income taxes, which resulted in a provision for income taxes benefit
         totaling $10,260 for the year ended January 31, 2001, which is included
         in the accompanying consolidated statements of income.

(10)     COMMITMENTS

         Substantially all of the Company's assets are pledged as collateral for
         notes payable and debt obligations.

(11)     LEGAL PROCEEDINGS

         The Company is involved in various claims and legal actions arising in
         the ordinary course of business. In the opinion of management, the
         ultimate disposition of these matters will not have a material effect
         on the Company's financial position, results of operation or liquidity.

(12)     SUBSEQUENT EVENT - SALE OF COMMERCIAL RENTAL PROPERTY

         In February, March and April of 2001, the Company sold all six of its
         stores. Gross proceeds from the sale were $505,000 after adjustments.

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

     We did not have any disagreements on accounting and financial disclosures
with its present accounting firm during the reporting period.

                                    PART III

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


                                      F-15
<PAGE>   22

         Our Directors and Executive Officers, their ages and positions held
with us as of January 31, 2001 are as follows:

<TABLE>
<CAPTION>
   NAME                    AGE         POSITION HELD
   ----                    ---         -------------

<S>                        <C>         <C>
   F. Jeffrey Krupka       45          President, Chief Executive Officer
                                       And Director

   Cynthia Kettl           53          Secretary-Treasurer and Director
</TABLE>

Our Directors will serve in such capacity until our next annual meeting of
shareholders and until their successors have been elected and qualified. The
officers serve at the discretion of our Directors. There are no family
relationships among our officers and directors, nor are there any arrangements
or understandings between any of our directors or officers or any other person
pursuant to which any officer or director was or is to be selected as an officer
or director.

F. Jeffrey Krupka. Mr. Krupka has been our President and a Director since
September 13, 1999. He has also been the Chief Executive Officer of Platinum
Financial Fund, LLC, a private investment company, since 1998. From October,
1995 to 1998, he was the owner of Krupka and Associates, LLC., a private
investment company. He has been involved in real estate as well as securities
investment activities since 1981.

Cynthia Kettl. Ms. Kettl has been our Treasurer since September 13, 1999. She
has been involved with Platinum Financial Fund, LLC, a private investment
company, since 1998. From October, 1995 to 1998, she was employed by Krupka and
Associates, LLC., a private investment company. Ms. Kettl received a Bachelor's
degree in Business Management from Metropolitan State College in 1981, a
Bachelor's degree in Accounting from Metropolitan State College in 1998, and an
Associates Degree in Business from Community College North Denver in 1977.

COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934.

Section 16(a) of the Securities Exchange Act of 1934 (the "34 Act") requires our
officers and directors and persons owning more than ten percent of the our
Common Stock, to file initial reports of ownership and changes in ownership with
the Securities and Exchange Commission ("SEC"). Additionally, Item 405 of
Regulation S-B under the 34 Act requires us to identify in its Form 10-KSB and
proxy statement those individuals for whom one of the above referenced reports
was not filed on a timely basis during the most recent fiscal year or prior
fiscal years. Given these requirements, we have the following report to make
under this section. No filings were required by our Officers or Directors.

ITEM 10. EXECUTIVE COMPENSATION.

None of our executive officers received any compensation during the fiscal years
ended January 31, 1999, 2000, or 2001, except for Ms. Kettl, whose compensation
is shown in our "Certain Relationships and Related Transactions" Section. Our
date of inception is May 15, 1998. We have granted no shares of our capital
stock as additional compensation to our executive officers and have no plans to
do so.

We do not pay members of our Board of Directors any fees for attendance or
similar remuneration, but reimburse them for any out-of-pocket expenses incurred
by them in connection with our business.

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

The following sets forth the number of shares of our $.0.001 par value common
stock beneficially owned by (i) each person who, as of January 31, 2001, was
known by us to own beneficially more than five percent (5%) of its common stock;
(ii) the individual Directors of the Registrant and (iii) the Officers and
Directors of the Registrant as a group. As of January 31, 2001, there were a
total of 6,872,433 shares issued and outstanding.

<PAGE>   23
<TABLE>
<CAPTION>
  NAME AND ADDRESS                              AMOUNT AND NATURE OF       PERCENT OF
OF BENEFICIAL OWNER                          BENEFICIAL OWNERSHIP (1)(2)     CLASS
-------------------                          ---------------------------   ----------
<S>                                         <C>                            <C>
Platinum Financial Fund, Ltd.(3)                    3,377,105                 49.14%
3225 East 2nd Ave
Denver, Colorado 80206

F. Jeffrey Krupka(4)                                1,226,342                 17.84%
3225 East 2nd Ave
Denver, Colorado 80206

Cynthia Kettl
3225 East 2nd Ave                                       8,925                  0.13%
Denver, Colorado 80206

Arthur W. Zarlengo Rev. Trust                         245,233                  3.57%
621 17{th} Street
Suite 911
Denver, Colorado 80202

Nancy M. Miller                                       220,161                  3.20%
470 Sunset Drive
Golden, Colorado 80401

Janet Brophy (4)                                      228,035                  3.32%
6195 South Akron Way
Greenwood Village, Colorado 80111

All Officers and Directors as a Group               1,235,267                 17.97%
3225 East 2nd Ave
(two persons)
</TABLE>

(1) All ownership is beneficial and on record, unless indicated otherwise.

(2) Beneficial owners listed above have sole voting and investment power with
respect to the shares shown, unless otherwise indicated.

(3) Owned of record by Platinum Financial Fund, LLC.. Mr. Krupka and his wife
own 100% of the entity which owns 51% of Platinum Financial Fund, LLC. Mr.
Krupka is also the Manager of Platinum Financial Fund, LLC.

(4) Janet Brophy is the wife of F. Jeffrey Krupka. Mr. Krupka disclaims
beneficial ownership of her shares. Mr. Krupka's father, Frank Krupka, owns a
total of 8,925 shares of record. Mr. Krupka's mother, Jacqueline Krupka, owns a
total of 750 shares of record. Mr. Krupka disclaims any beneficial ownership in
his parents' interests.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

         Our business office is located at 3225 East 2nd Ave., Denver, Colorado
80206.We began paying $300 per month in rent in September, 1999 for this office
space, which is occupied by our President, F. Jeffrey Krupka, under a
month-to-month lease. We paid $13,650 for the fiscal year ended January 31,
2001.

         We purchase accounting services from Ms. Kettl, our Secretary-Treasurer
at the rate of $200 per month, beginning in September, 1999. We paid her $2,400
for the fiscal year ended January 31, 2001.

         On January 20, 2000, Platinum Financial Fund, LLC., a company
controlled by Mr. Krupka, our President, sold us a twenty-six percent interest
in the one-third interest which it owned in a commercial property in Denver,
Colorado, which we are now developing into office condominiums. We acquired this
interest in the property for $25,674 in cash and 50,000 of our common shares,
which we valued at $7,500. In March, 2000, we acquired an additional five
percent from an unrelated party in exchange for 36,665 of our common shares,
which we valued at $5,499.50. In April, 2000, we acquired an additional ten
percent in Platinum Financial Fund, LLC.'s interest for $27,600 in cash,
bringing our total interest in Platinum Financial Fund, LLC.'s interest to
forty-one percent as of April 30, 2000. Platinum Financial Fund, LLC. pursued a
quiet title action on the property on our behalf. As a result, on December 16,
2000, title to the property was transferred to us. The total investment in the
property is $175,140. Platinum Financial Fund, LLC. retains no interest.

         On February 3, 2000, we purchased development land in Firestone,
Colorado from the Krupka-Brophy Profit Sharing Plan, which is under the control
and for the benefit of Mr. Krupka and his wife, Janet Brophy. We paid $65,000 in
cash and assumed certain mortgage notes for a total of approximately $690,000,
payable to the Krupka-Brophy Profit Sharing Plan and to Asset Realization, Inc.,
another company controlled by Mr. Krupka. The Krupka-Brophy Profit Sharing Plan
forgave principal payments on the notes of approximately $70,000 for the fiscal
year ended January 31, 2001.

         On February 3, 2000, we acquired the right to the proceeds from the
sale of 3,888 shares of American Tire Corporation common stock from Platinum
Financial Fund, LLC. for $11,480 in cash. On February 18, 2000, we acquired the
additional rights to the proceeds from the


<PAGE>   24

sale of 80,000 shares of American Tire Corporation from Platinum Financial Fund,
LLC. for $15,000 in cash and 1,500,000 of our common stock.

         On March 8, 2000, Platinum Financial Fund, LLC. sold us a promissory
note for $14,430 in cash, 100,000 of our common shares, and the assumption of
three debt obligations payable totaling $59,289. The promissory note was
collateralized by real property and was in default when we acquired it. We have
since sold the property which collateralized the promissory note.

         On November 2, 2000, we purchased development land in Frederick,
Colorado from the Krupka-Brophy Profit Sharing Plan. We paid $15,000 in cash and
assumed certain mortgage notes for a total of approximately $600,000, payable to
the Krupka-Brophy Profit Sharing Plan and to unrelated third parties.

                                     PART IV

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

               (a) The following financial information is filed as part of this
report:

                     (1)   FINANCIAL STATEMENTS

                     (2)   SCHEDULES

                     (3)   EXHIBITS. The following exhibits required by Item 601
                           to be filed herewith are incorporated by reference to
                           previously filed documents:

EXHIBIT NO.          DESCRIPTION

+  3A            Articles of Incorporation for Monument Galleries, Inc.

+  3B            Bylaws for Monument Galleries

   3C            Articles of Amendment changing the name to Real Estate
                 Opportunities, Inc.

   3D            Amended Bylaws for Real Estate Opportunities, Inc.

   10.1          Warranty Deed dated December 27, 2000 for acquisition of Denver
                 real estate

   10.2          Deed of Trust dated December 15, 2000 for acquisition of Denver
                 real estate.

   10.3          Purchase and Sale Agreements for Frederick, Colorado real
                 estate between Real Estate Opportunities, Inc. and
                 Krupka-Brophy Profit Sharing Plan.

   10.4          Combined Purchase Agreement and Settlement Agreement for
                 Firestone, Colorado real estate between Real Estate
                 Opportunities, Inc. and Krupka- Brophy Profit Sharing Plan
                 dated February 3, 2000.

   10.5          Modification of Promissory Note related to Firestone, Colorado
                 real estate transaction.

+ Previously Filed under cover of Form 10SB dated December 12, 1999.

               (b) REPORTS ON FORM 8-K. The Company filed no reports on Form
8-K during the fourth quarter of the fiscal year ended January 31, 2001.


<PAGE>   25

                                   SIGNATURES

In accordance with Section 12 of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.


                                        Real Estate Opportunities, Inc.


Dated: 4/27/01                          By: /s/ F. JEFFREY KRUPKA
                                            ------------------------------------
                                            F. Jeffrey Krupka
                                            President


Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the Registrant and
in the capacities and on the dates indicated.


                                        CHIEF FINANCIAL OFFICER


Dated: 4/27/01                          By: /s/ CYNTHIA KETTL
                                            ------------------------------------
                                            Cynthia Kettl
                                            Treasurer


Dated: 4/27/01                          By: /s/ F. JEFFREY KRUPKA
                                            ------------------------------------
                                            F. Jeffrey Krupka
                                            Director


<PAGE>   26

                                INDEX TO EXHIBITS


<TABLE>
<CAPTION>
  EXHIBIT
  NUMBER         DESCRIPTION
  -------        -----------
<S>              <C>

+  3A            Articles of Incorporation for Monument Galleries, Inc.

+  3B            Bylaws for Monument Galleries

   3C            Articles of Amendment changing the name to Real Estate
                 Opportunities, Inc.

   3D            Amended Bylaws for Real Estate Opportunities, Inc.

   10.1          Warranty Deed dated December 27, 2000 for acquisition of Denver
                 real estate

   10.2          Deed of Trust dated December 15, 2000 for acquisition of Denver
                 real estate.

   10.3          Purchase and Sale Agreements for Frederick, Colorado real
                 estate between Real Estate Opportunities, Inc. and
                 Krupka-Brophy Profit Sharing Plan.

   10.4          Acquisition Agreements for Firestone, Colorado real estate
                 between Real Estate Opportunities, Inc. and Krupka-Brophy
                 Profit Sharing Plan dated February 3, 2000.

   10.5          Modification of Promissory Note related to Firestone, Colorado
                 real estate transaction.
</TABLE>



+ Previously Filed under cover of Form 10SB dated December 12, 1999.