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 September 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: November 8, 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 September 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 6  Exhibits and Reports on Form 8-K                                  13


Signatures                                                                   13









                                                                               2
<PAGE>
<TABLE>
<CAPTION>

Item 1 - Part 1 - Financial Statements

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

                                   (Unaudited)
                                                             September 30,    September 30,
                                                                  2001             2000
                                                             -------------    -------------
<S>                                                          <C>              <C>
                                     ASSETS
                                     ------
Current Assets
   Cash in bank                                               $       719      $   666,187
   Inventory                                                         --            142,153
   Prepaid expenses                                                  --              7,820
                                                              -----------      -----------
     Total Current Assets                                             719          816,160
                                                              -----------      -----------

Property and Equipment - At cost
   net of Accumulated Depreciation                                   --             62,743
                                                              -----------      -----------

Other Assets
   Restricted cash                                                   --             50,000
   Other                                                             --             30,452
                                                              -----------      -----------
     Total Other Assets                                              --             80,452
                                                              -----------      -----------

Total Assets                                                  $       719      $   959,355
                                                              ===========      ===========

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

Current Liabilities
   Accounts payable - trade                                   $     1,000      $   109,738
   Other accrued liabilities                                         --                929
   Due to affiliates                                                1,496              929
                                                              -----------      -----------
     Total Current Liabilities                                      2,496          110,667
                                                              -----------      -----------

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
   Deficit accumulated during the development stage            (3,290,696)      (2,532,202)
                                                              -----------      -----------
                                                                   (1,299)         848,873
   Treasury stock (500 shares at cost)                               (478)            (478)
                                                              -----------      -----------
     Total shareholders' equity                                       719          848,688
                                                              -----------      -----------

Total Liabilities and Shareholders' Equity                    $       719      $   959,355
                                                              ===========      ===========

</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.
                                                                               3
<PAGE>
<TABLE>
<CAPTION>

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

                                   (Unaudited)
                                                                                                 Period from
                               Six months       Six months     Three months     Three months   December 5, 1996
                                 ended            ended            ended            ended           through
                             September 30,    September 30,    September 30,    September 30,    September 30,
                                  2001             2000             2001             2000             2001
                             -------------    -------------    -------------    -------------    -------------
<S>                          <C>              <C>              <C>              <C>              <C>
Revenues                      $      --        $     7,008      $      --        $      --        $    72,581

Cost of Goods Sold                   --              3,543             --               --             36,822
                              -----------      -----------      -----------      -----------      -----------

Gross Profit                         --              3,465             --               --             35,759
                              -----------      -----------      -----------      -----------      -----------

Operating expenses
   General and
   administrative expenses         32,216        1,009,601            3,857          826,129        3,348,163
                              -----------      -----------      -----------      -----------      -----------

Loss from Operations              (32,216)      (1,006,136)          (3,857)        (826,129)      (3,312,404)

Other income
   Interest income                  1,960           15,967             --              8,041           26,339
   Interest expense                  --               --               --               --             (4,631)
                              -----------      -----------      -----------      -----------      -----------

Loss before provision
   for income taxes               (30,256)        (990,169)          (3,857)        (818,088)      (3,290,696)

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

Net Loss                          (30,256)        (990,169)          (3,857)        (818,088)      (3,290,696)

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

Comprehensive Income          $   (30,256)     $  (990,169)     $    (3,857)     $  (818,088)     $(3,290,696)
                              ===========      ===========      ===========      ===========      ===========

Loss per weighted-average
   share of common stock
   outstanding, computed
   on Net Loss - basic
   and fully diluted          $     (0.01)     $     (0.27)             nil      $     (0.22)
                              ===========      ===========      ===========      ===========

Weighted-average number
   of shares of common
    stock outstanding           3,339,016        3,697,157        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
                  Six months ended September 30, 2001 and 2000
              Period from December 5, 1996 (date of commencement of
                 development stage) through September 30, 2001

                                   (Unaudited)

                                                                                          Period from
                                                         Six months       Six months    December 5, 1996
                                                           ended            ended           through
                                                       September 30,    September 30,    September 30,
                                                            2001             2000             2001
                                                       -------------    -------------    -------------
<S>                                                    <C>              <C>              <C>
Cash Flows from Operating Activities
   Net Loss                                             $   (30,256)     $  (990,169)     $(3,290,697)
   Adjustments to reconcile net income to net cash
     provided by operating activities
       Depreciation and amortization                           --             16,278           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           --               --            796,926
       Stock compensation                                      --            548,435          599,060
       (Increase) Decrease in
         Inventories                                           --           (136,543)            --
         Prepaid expenses and other                          31,743          (85,227)            --
       Increase (Decrease) in
         Accounts payable and accrued liabilities           (15,051)          63,943            1,000
                                                        -----------      -----------      -----------
Net cash used in operating activities                       (10,162)        (583,283)      (1,788,048)
                                                        -----------      -----------      -----------

Cash Flows from Investing Activities
   Purchases of property and equipment                         --            (26,769)        (140,064)
   Proceeds from sale of property and equipment                --               --              5,213
                                                        -----------      -----------      -----------

Net cash used in investing activities                          --            (26,769)        (134,851)
                                                        -----------      -----------      -----------

Cash Flows from Financing Activities
   Cash advanced by affiliate                                 1,496             --              1,496
   Proceeds on related party notes payable                     --               --             36,000
   Payments on related party notes payable                     --             (2,500)         (36,000)
   Proceeds from sale of convertible preferred stock           --               --          1,400,000
   Proceeds from sale of common stock                          --               --            295,100
   Purchase of treasury stock                                  --               (185)            (478)
   Proceeds from sale of treasury stock                        --               --            227,500
                                                        -----------      -----------      -----------

Net cash provided by financing activities                     1,496           (2,685)       1,923,618
                                                        -----------      -----------      -----------

Increase (Decrease) in Cash and Cash Equivalents             (8,666)        (612,737)             719

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

Cash and cash equivalents at end of period              $       719      $   666,187      $       719
                                                        ===========      ===========      ===========

</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 settled significantly all of the remaining accounts
of the Company.  As of September 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 September 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 September 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 September 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>
<TABLE>
<CAPTION>

                         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
September 30, 2000 and 2000, respectively, are as follows:

                                                                  September 30,    September 30,
                                                                      2001             2000
                                                                  -------------    -------------
<S>                                                               <C>              <C>
       Federal:
         Current                                                     $      -         $      -
         Deferred                                                           -                -
                                                                     --------         --------
                                                                            -                -
                                                                     --------         --------
       State:
         Current                                                            -                -
         Deferred                                                           -                -
                                                                     --------         --------
                                                                            -                -
                                                                     --------         --------

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


As of  September  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 September 30, 2001 and
2000, respectively, are as follows:

                                                                  September 30,    September 30,
                                                                      2001             2000
                                                                  -------------    -------------
Statutory rate applied to income before income taxes                 $ 10,300         $336,657
Increase (decrease) in income taxes resulting from:
     State income taxes                                                     -                -
     Other, including reserve for deferred tax asset
       and application of net operating loss carryforward             (10,300)        (336,657)
                                                                     --------         --------
       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 September 30, 2001 and 2000, respectively:

                                                                  September 30,    September 30,
                                                                      2001             2000
                                                                  -------------    -------------
       Deferred tax assets
         Net operating loss carryforwards                            $      -         $861,000
         Less valuation allowance                                           -         (861,000)
                                                                     --------         --------
       Net Deferred Tax Asset                                        $      -         $      -
                                                                     ========         ========


</TABLE>

                                                                               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.








                (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 settled significantly all of the remaining accounts
of the Company.  As of September 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 to do so.


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

During the six months ended September 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  $30,000,  or a net loss per share of
approximately $(0.01) per share.

During the six months ended September 30, 2000, the Company  incurred a net loss
or approximately  $990,000,  or a net loss per share of  approximately  $(0.27).
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 and brand recognition.



                                                                              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.

Plan of Business
----------------

General
-------

The  Company  intends to locate and  combine  with an  existing,  privately-held
company which is profitable  or, in  management's  view,  has growth  potential,
irrespective of the industry in which it is engaged.  However,  the Company does
not  intend  to  combine  with a  private  company  which may be deemed to be an
investment  company subject to the Investment Company Act of 1940. A combination
may be structured as a merger,  consolidation,  exchange of the Company's common
stock for stock or assets or any other form which  will  result in the  combined
enterprise's becoming a publicly-held corporation.

Pending  negotiation and consummation of a combination,  the Company anticipates
that it will have, aside from carrying on its search for a combination  partner,
no business  activities,  and, thus, will have no source of revenue.  Should the
Company incur any significant  liabilities prior to a combination with a private
company, it may not be able to satisfy such liabilities as are incurred.

If the Company's management pursues one or more combination opportunities beyond
the  preliminary  negotiations  stage and those  negotiations  are  subsequently
terminated,  it is  foreseeable  that such efforts  will  exhaust the  Company's
ability to continue to seek such combination opportunities before any successful
combination can be consummated.  In that event,  the Company's common stock will
become  worthless  and  holders of the  Company's  common  stock will  receive a
nominal distribution, if any, upon the Company's liquidation and dissolution.

Combination Suitability Standards
---------------------------------

In its pursuit for a combination  partner,  the Company's  management intends to
consider only  combination  candidates  which are profitable or, in management's
view, have growth potential.  The Company's management does not intend to pursue
any  combination  proposal  beyond the  preliminary  negotiation  stage with any
combination  candidate which does not furnish the Company with audited financial
statements  for at least its most  recent  fiscal year and  unaudited  financial
statements for interim periods  subsequent to the date of such audited financial
statements, or is in a position to provide such financial statements in a timely
manner.  The Company will, if necessary  funds are available,  engage  attorneys
and/or accountants in its efforts to investigate a combination  candidate and to
consummate a business  combination.  The Company may require  payment of fees by
such combination  candidate to fund the investigation of such candidate.  In the
event such a combination candidate is engaged in a high technology business, the
Company may also obtain  reports from  independent  organizations  of recognized
standing  covering the technology  being developed and/or used by the candidate.
The  Company's  limited  financial  resources may make the  acquisition  of such
reports  difficult  or even  impossible  to obtain  and,  thus,  there can be no
assurance  that the Company  will have  sufficient  funds to obtain such reports
when considering combination proposals or candidates.  To the extent the Company
is  unable to  obtain  the  advice or  reports  from  experts,  the risks of any
combined enterprise's being unsuccessful will be enhanced.  Furthermore,  to the
knowledge of the Company's officers and directors, neither the candidate nor any
of  its  directors,   executive  officers,  principal  shareholders  or  general
partners, for the previous five (5) Fiscal periods,:

     1.   will not have been  convicted of  securities  fraud,  mail fraud,  tax
          fraud, embezzlement,  bribery, or a similar criminal offense involving
          misappropriation  or theft of funds,  or be the  subject  of a pending
          investigation or indictment involving any of those offenses;


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<PAGE>

     2.   will not have been subject to a temporary or permanent  injunction  or
          restraining  order arising from unlawful  transactions  in securities,
          whether as issuer, underwriter, broker, dealer, or investment advisor,
          may be the subject of any pending  investigation  or a defendant  in a
          pending  lawsuit  arising from or based upon  allegations  of unlawful
          transactions in securities; or

     3.   will not have been a defendant in a civil  action which  resulted in a
          final judgement against it or him awarding damages or rescission based
          upon unlawful practices or sales of securities.

The Company's  officers and directors will make these  determinations  by asking
pertinent  questions of the  management of prospective  combination  candidates.
Such persons will also ask pertinent  questions of others who may be involved in
the combination proceedings.  However, the officers and directors of the Company
will not generally take other steps to verify independently information obtained
in this manner which is favorable.  Unless  something  comes to their  attention
which  puts  them on  notice  of a  possible  disqualification  which  is  being
concealed  from them,  such persons will rely on  information  received from the
management of the prospective  combination  candidate and from others who may be
involved in the combination proceedings.


Part II - Other Information

Item 6 - Exhibits and Reports on Form 8-K

   Exhibits - None

   Reports on Form 8-K - None

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

                                   SIGNATURES

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

                                                 Lucas Educational Systems, Inc.

November    8   , 2001                              /s/ Kevin B. Halter
         -------                        ----------------------------------------
                                                                 Kevin B. Halter
                                                         President, Director and
                                                        Chief Accounting Officer





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