UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

                                   FORM 10-KSB

(Mark One)

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

                        For the fiscal year June 30, 2001

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

         For the Transition period from              to
                                        ------------    ------------

                         Commission File Number 0-32251


                        PRECISION PLASTICS MOLDING, INC.
                 (Name of Small Business Issuer in its Charter)

            Nevada                                         86-0914668
State or Other Jurisdiction of                 (IRS Employer Identification No.)
Incorporation or Organization

 216 S. Alma School Road, Mesa, Arizona                       85210
(Address of Principal Executive Offices)                   (Zip Code)

                                 (480) 898-1846
                (Issuer's Telephone Number, Including Area Code)

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

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

                     Common Stock, par value $.001 per share

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

     Check here if there is no disclosure  of  delinquent  filers in response to
Item 405 of  Regulation  S-B contained in this form,  and no disclosure  will be
contained,  to  the  best  of  registrant's  knowledge,  in  definite  proxy  or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. [X]

     The  Issuer's  gross  revenues,  for the year  ended  June 30,  2001,  were
$709,172.

     The number of shares of Common Stock of the issuer  outstanding  as of June
30, 2001 was 13,300,000.

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

                      DOCUMENTS INCORPORATED BY REFERENCE

     Incorporated  by reference to this annual  report is its Forms 10SB/A filed
by the  Registrant  on August 2, 2001 and Form NT 10-K  filed on  September  28,
2001.
<PAGE>
                                TABLE OF CONTENTS



PART I                                                                  Page No.
                                                                        --------
Item 1.   Description of Business ......................................    3
Item 2.   Description of Property ......................................    5
Item 3.   Legal Proceedings ............................................    5
Item 4.   Submission of Matters to a Vote of Security Holders ..........    5

PART II

Item 5.   Market For Common Equity and Other Stockholder Matters .......    6
Item 6.   Management's Discussion and Analysis or Plan of Operation ....    6
Item 7.   Financial Statements .........................................    8
Item 8.   Changes in and Disagreements With Accountants ................    8

PART III

Item 9.   Directors, Executive Officers, Promoters and Control Persons..    9
Item 10.  Executive Compensation .......................................   10
Item 11.  Security Ownership of Certain Beneficial Owners and
            Management .................................................   11
Item 12.  Certain Relationships and Related Transactions ...............   12
Item 13.  Exhibits List and Reports on Form 8-K ........................   13

                                       2
<PAGE>
                                     PART I

ITEM 1. DESCRIPTION OF BUSINESS

HISTORY

     The Company was  incorporated in the State of Nevada on November 25,1997 as
"Precision  Plastics of NV,  Inc.," and in 1998 the Company  changed its name to
"Precision  Plastics  Molding,  Inc." It was formed for the purpose of acquiring
the  assets  of two  or  more  small,  custom  plastic  injection  molders,  and
reorganizing them into a single entity. The Company currently generates revenues
from  manufacturing  custom plastic products and parts for other companies.  The
Company is a  majority-owned  subsidiary of Diamond  Equities,  Inc., a publicly
traded  Nevada  corporation  (referred  to  herein  as either  the  "Parent"  or
"Diamond").

     Diamond was incorporated in the State of Nevada on July 24, 1987, under the
name of "KTA Corporation." On September 25, 1989, the Parent changed its name to
"United Payphone Services,  Inc." Until November 19, 1996, the Parent was in the
business of  operating,  servicing and  maintaining a system of  privately-owned
public pay telephones. In November of 1997, the Parent sold substantially all of
its assets in the payphone business to a company not affiliated with the Parent.
On June 2, 1997, the Parent changed its name to "Diamond Equities, Inc."

     The Parent is a publicly  traded company on the NASDAQ OTC Bulletin  Board,
trading under the symbol DDEQ.  Information regarding the Parent is available on
its Form I0-KSB Annual Report and its quarterly  Form 10-QSB,  as filed with the
SEC, which is incorporated herein by reference and copies of which are available
from the Public  Reference  section at the SEC office in Washington,  DC or upon
request to the Parent.

     On June 15,  1998 the  Company  purchased  the assets of  Premier  Plastics
Corporation  ("Premier"),  a Tempe,  Arizona Private  Corporation engaged in the
plastic injection molding business. The Company paid consideration of $80,000 in
cash,  together with the  assumption of various notes and payables in the amount
of  approximately  $40,000.  In  addition,  the selling  shareholder  of Premier
received  300,000  shares of  common  stock of the  Company  valued at $0.25 per
share. Prior to this acquisition,  the Company had no assets. The purchase price
was determined by negotiations between the parties. The cash paid by the Company
came from the Parent.  There was no prior  relationship  between Premier and its
sole shareholder, on the one hand, and the officers and directors of the Company
or the Parent, on the other hand.

     In addition, on July 20, 1998, the Company purchased  substantially all the
assets of Accurate  Thermoplastics,  Inc. ("Accurate"),  a Mesa, Arizona Private
Corporation  engaged  in the  plastic  injection  molding  business.  The assets
purchased  included  equipment,  inventory,  contract  rights,  customer  lists,
know-how,   drawings,   specifications  and  intellectual   property.  The  sole
shareholder of Accurate,  Roy L. Thompson,  was engaged to serve as a consultant
to the Company.  He no longer serves in that capacity.  The business of Accurate
continues under the Company's name. The Company  acquired the assets of Accurate
for payment of Five Hundred Sixty  Thousand  Dollars  ($560,000),  consisting of
cash and a promissory  note,  and for the  assumption  by the Company of certain
liabilities  of Accurate.  The purchase price paid by the Company was determined
by  negotiations  between the parties.  To raise funds to purchase the assets of
Accurate,  the Company issued  2,000,000  Shares of its Common Stock to Diamond.
There  was  and  is  no  other  relationship   between  Accurate  and  its  sole
shareholder,  on the one hand,  and the officers and directors of the Company or
Diamond,  on the other  hand.  The  Company  defaulted  on the note  payable  to
Accurate,  and on July 9, 1999,  Accurate  filed suit  against  the  Company and
Diamond alleging breach of contract for failure to perform certain provisions of
the  asset  purchase  agreement,   seeking  unspecified   damages.  The  parties
subsequently  settled the  lawsuit.  To settle the  lawsuit,  the  Company  paid
$165,000 in cash to Accurate and Diamond  issued an additional  14,000 shares of
its common stock to the plaintiff.

     After  acquiring the assets of Premier and Accurate,  the Company  combined
their  operations,  with both  acquisitions  now operating under the name of the
Company. All operations are conducted at the former Accurate facility located at
216 S. Alma School Rd., Mesa, Arizona.

                                       3
<PAGE>
CURRENT OPERATIONS

     The Company  produces  injection-molded  plastic  products  according  to a
customer's  specifications.  The  Company's  two  largest  customers  are Axxess
Technologies and Amsafe,  Inc. For the six months ended December 31, 2000, these
companies together  represented 48% and 15%,  respectively,  of the sales of the
Company.  Axxess Technologies uses the products the Company  manufactures in its
key making operations.  Amsafe, Inc., uses the products the Company manufactures
primarily in the manufacture of aircraft safety restraints.

     Generally,  a customer  provides its own injection  molds,  but the Company
occasionally arranges to build a mold to the customer's specifications.  Outside
contractors  usually  design and build these molds,  and the Company  passes all
Development  costs for these molds onto the  customer.  When a mold is completed
and paid for,  the Company then  manufactures  as many or as few products as the
customer desires, and the mold become the customer's property.  As a result, the
Company  does  not  presently  own the  rights  to any of the  products  that it
produces.

     Most of the customer's  products require more than just one molded part. In
most cases  several  parts are molded and then  assembled.  The Company does not
always  mold all of the parts for  assembly  nor does it normally  assemble  the
parts it manufactures.  The molded parts the Company  manufactures may either be
used  as a part  of its  customer's  manufacturing  process,  or as  part of the
finished product the customer produces.

     The Company  had, as of September  1, 2001,  no sales  backlog or any order
backlog,  but has the raw materials to run production for expected sales as they
occur.

CUSTOMERS AND SUPPLIERS

     The  Company  currently  makes  products  for  approximately  fifteen  (15)
different customers.  For the six months ended December 31, 2000, there were two
customers  that  represented  ten percent  (10%) or more of the  revenues of the
Company. Those customers are:

                                        SIX MONTHS ENDING
                                        DECEMBER 31, 2000
                CUSTOMER                   % OF REVENUE
                --------                   ------------
                Axxess Technologies            48%

                Amsafe Inc.                    15%

     The Company has approximately  fifteen (15) to twenty (20) suppliers at any
given time. These suppliers supply boxes, plastic resin, and other products used
in the  manufacturing  process.  The Company's  main  suppliers of resin are GE,
Polymerland and Plastics General Polymers.

MARKETING

     Currently,  the  Company  does not have a  marketing  or sales  force.  The
current customers were acquired from Accurate and Premier. The Company's primary
resource for new  customers is from customer and vendor  referrals.  The Company
may, if cash flow permits, hire personnel to find additional customers.

     As is common in the industry,  the Company primarily relies on the need for
a new  plastic  component  for new  business.  Customers  currently  having  its
components  manufactured  by a competitor are reluctant to move to a new molding
company because such a move necessarily would cause a delay in production as the
customer's  molds are  transferred  to the new  molding  company.  Therefore,  a
marketing  campaign  designed  to  target  a  competitor's  customers  is not as
effective in the plastics molding industry as in others.

                                       4
<PAGE>
EMPLOYEES

     The Company has seven (7) non-union employees:  One (1) is a plant manager,
one (1) is a production supervisor,  one (1) is a quality assurance manager, one
is an operator, and three (3) are engaged in office and clerical duties.

FORWARD-LOOKING STATEMENTS

     This  report  contains  forward-looking  statements  within the  meaning of
Section 27A of the  Securities  Act of 1933, as amended,  and Section 21E of the
Securities Exchange Act of 1934, as amended,  and is subject to the safe harbors
created thereby. Actual results could differ materially because of the following
uncertain  factors:   the  inability  to  make  additional   acquisitions;   the
probability of losses due to its new line of business;  the continued employment
of key management; a change in control of the Company.

ITEM 2. DESCRIPTION OF PROPERTY

     The Company's leases its operating facilities located at 216 S. Alma School
Rd.,  Mesa,  Arizona (the  "Facility").  The Company  shares the  Facility  with
Diamond.  In the Facility the Company uses 13,000 square feet for production and
2,000  square  feet for  offices.  The  Company  leases  the  Facility  under an
operating lease that expired in July 1999. The Company has subsequently occupied
the  Facility  on a  month-to-month  basis.  Rent  expense  under  the lease was
approximately  $86,000 for the year ended June 30, 1999 and $83,874 for the year
ended June 30, 2000. The current lease rate is $6,885 per month.

     The Facility is in satisfactory condition and the Company has such space as
management  considers  necessary or desirable to conduct the Company's business.
Management  believes the leased space will meet the needs of the Company for the
foreseeable future.

ITEM 3. LEGAL PROCEEDINGS

     The  Company  is not  currently  a  party  to any  material  pending  legal
proceedings  or government  actions  (except as set forth below),  including any
material bankruptcy,  receivership, or similar proceedings.  Except as set forth
below,  management  of the Company  does not believe that there are any material
proceedings  to which any  director,  officer or affiliate  of the Company,  any
owner of record or  beneficially  of more than 5 percent of the Common  Stock of
the Company,  or any associate of any such director,  officer,  affiliate of the
Company or security  holder is a party  adverse to the Company or has a material
interest adverse to the Company.

     The Company was allegedly in default on the remaining balance due on a note
payable to Accurate in the amount of $116,325  as of June 30,  1999.  Also,  the
Company was  performing  services  in lieu of payments on a note  payable in the
amount of $94,639  assumed from Accurate in 1998 in connection with the purchase
of the assets of Accurate.  In March 1999 an agreement was reached with Accurate
and Roy L. Thompson (the "Holders") to return all material and tooling belonging
to the Holders  and to offset  $46,015  owing from the Holders  against the note
balance,  resulting  in a gain of  $48,624.  Nonetheless,  on July 9,  1999  the
Holders  filed a lawsuit  against the Company  related to the note payable and a
consulting agreement with Mr. Thompson. A settlement was reached on November 23,
1999  whereby the Company  agreed to pay  $165,000  and issue  14,000  shares of
Diamond  common stock to the Holders as payment in full for the note payable and
commitment payable relating to the consulting agreement.

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

     No matter was  submitted  during the fiscal year ended June 30, 2001,  to a
vote of the Company's security holders.

                                       5
<PAGE>
                                     PART II

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

MARKET FOR COMMON STOCK

     The  Company's  Common  Stock has  historically  been  closely held and not
publicly  traded.  The Company's  stock is not currently  listed on any national
stock exchanges.  Currently, there is no market for either the Class A Preferred
Stock or the Common Stock of the Company.

SHARES OUTSTANDING

COMMON STOCK

     As of June 30, 2001,  there were 13,300,000  shares  outstanding,  with one
hundred (100) holders of record of the Company's  Common Stock.  The Company has
paid no dividends on its Common Stock since its inception.

PREFERRED STOCK

     As of  June  30,  2001,  there  were  thirty-six  (36)  shares  of  Class A
Convertible  Preferred Stock  outstanding,  with four (4) holders of record. The
Company has paid $7,167  dividends  on the Class A Preferred  Stock in the prior
two fiscal years. Dividends of $910 are accrued as of June 30, 2001.

RELATED STOCKHOLDER MATTERS

     Diamond is the parent of the Company,  which  currently owns  approximately
63% of the  outstanding  Common Stock of the Company.  From the inception of the
Company,  Diamond has  transferred  cash to the Company  and  directly  paid the
Company's expenses,  for which the Company was indebted to Diamond. In addition,
the  Company and Diamond  have common  expenses , which have not been  allocated
between the Company and Diamond.  As of June 30, 1999,  the Company owed Diamond
$312,649.  As of June 30, 2000, the Company owed Diamond $465,586.  On September
30, 2000, the Company issued  1,800,000 shares of its common stock to Diamond in
payment of $454,283 owed to Diamond as of that date. The Company  currently does
not owe any sums to Diamond.

     Diamond  employs David D.  Westfere as its  President  and Chief  Executive
Officer and he is a director of Diamond. Diamond pays Mr. Westfere a base salary
of $46,000 per year.

     Diamond  employs  Todd D.  Chisholm  as its  Chief  Financial  Officer  and
Secretary/Treasurer  and he is also a director of Diamond. Mr. Chisholm performs
accounting  services  for  Diamond  for  which he is paid an hourly  fee.  It is
believed that the terms of the  arrangement  between Mr. Chisholm and the Parent
are at least as favorable as terms that could be obtained with a  non-affiliated
party.

     Furthermore,  Mr.  Chisholm was a partner of the accounting firm of Crouch,
Bierwolf & Chisholm  until June 1, 2000,  and the  proprietor of the  accounting
firm of Chisholm & Associates  thereafter.  Both firms have performed accounting
services for the Company and for Diamond.  For the year ended June 30, 2001, the
Company paid $13,817 to Mr. Chisholm for accounting services.

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

LIQUIDITY AND CAPITAL RESOURCES OF THE COMPANY

     Cash and cash  equivalents  totaled  $101,588 at June 30, 2001  compared to
$110,275 at June 30, 2000. The decrease in cash of $(8,687) was due primarily to
the payment of advances to Diamond Equities,  the payment of dividends of $4,510

                                       6
<PAGE>
and the payments on the lease  obligation of $2,091.  The Company  received cash
from operating  activities of approximately  $9,800.  The Company's current cash
requirements  are for the  operations of the Company,  the purchase of inventory
and payments on debt.

     Long  term  cash  requirements  are for the  support  of  normal  operating
expenses, payments of you remaining capital lease obligating, and the payment of
preferred  dividends it found,  funds are  anticipated  for the  acquisition  of
additional ventures,  however,  funds will need to be raised to support such new
ventures,  or to expand  operations  trough a sales force. The company currently
has not located any  additional  acquisitions.  The  Company  believes  that its
existing cash and anticipated  cash generated from operations will be sufficient
to satisfy its currently anticipated cash requirements for fiscal year 2002.

     The Company's principal commitments at June 30, 2001 consist of obligations
under capital leases and operating leases for facilities.

RESULTS OF OPERATIONS

     The Company  generated  revenues  from  operations of $709,172 with cost of
sales of $610,947,  and a gross  margin of $98,225,  (14% of sales) for the year
ended June 30, 2001 as  compared  to revenues of $689,288  with cost of sales of
$571,082  and gross  profit of $118,206  (17% of sales) for the same period last
year.  The result is a 3% increase in sales,  and a 3% decrease in gross margin.
The increase in sales is minimal and equates to approximately  $20,000 increased
volume of injection molding.  The decrease in profit margin is due to the use of
outside toolmakers, rather than staffing our own tool room. This has caused us a
much lower margin on the tool making revenues.

     Selling,  general and  administrative  expenses  were $331,762 for the year
ended June 30, 2001 a decrease of $121,978  over the same period last year.  The
decrease  is due in  part to the  decrease  in  salary  costs  of  approximately
$92,000, due to the decrease in personnel.  There were also decreases in various
overhead expenses from the continuing effort to minimize our operating expenses.

     Management  anticipates  that general selling and  administrative  expenses
will continue to remain  constant for the upcoming year,  with a possible slight
decrease as we continue to search for ways to decrease operating overhead.

     The Company  incurred a loss of $(234,103) for the year ended June 30, 2001
compared  to a loss of  $(337,009)  for the same  time  period a year  ago.  The
$103,000  increase in our bottom line is due  primarily to the decrease in wages
and other overhead expenses.

     The 2nd fiscal quarter is typically the slowest quarter of the year, due to
the holidays and the seasonal  aspect to the orders of our  customers.  No other
seasonal  aspects of the  Company's  business  are  expected  to have a material
effect on the financial conditions or results of operations.

PLAN OF OPERATIONS

     The  Company's  plan for fiscal  2002 is to  increase  sales in the plastic
molding  operations  through the addition of new  customers  through our current
contacts in the industry and the exploration of potential  acquisitions of small
plastic  operations.  Management  intends to increase  revenues to more  closely
reach the manufacturing  capacity of our Mesa, Arizona plant in order to achieve
maximum profit.

     The Company intends to also become  involved in Diamond  Equities' plans to
assemble their  prototype  motorcycle,  which will be done in the Mesa,  Arizona
plant.  Personnel  from the Company will be used to facilitate the Parents plans
of operations for the motorcycle division. The Company plans to receive revenues
for their involvement in this business venture.

                                       7
<PAGE>
     THE FOREGOING ARE FORWARD-LOOKING  STATEMENTS WITHIN THE MEANING OF SECTION
27A OF THE SECURITIES  EXCHANGE ACT OF 1933, AS AMENDED,  AND SECTION 21E OF THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED,  AND IS SUBJECT TO THE SAFE HARBORS
CREATED THEREBY. ACTUAL RESULTS COULD DIFFER MATERIALLY BECAUSE OF THE FOLLOWING
FACTORS:  LOSSES DUE TO AN  UNPROFITABLE  NEW LINE OF  BUSINESS;  THE  CONTINUED
EMPLOYMENT  OF KEY  MANAGEMENT;  A CHANGE IN CONTROL OF THE  COMPANY  DUE TO THE
CONVERSION BY DINGAAN  HOLDINGS,  S.A. OF ITS SERIES B PREFERRED  STOCK OR OTHER
EVENTS.

ITEM 7. FINANCIAL STATEMENTS

     The following  financial  statements are attached  hereto and  incorporated
herein:

                                                                           Page
                                                                           ----
     Independent Auditor's Report                                           F-1

     Predecessor Independent Auditor Report                                 F-2

     Balance Sheet for the Year Ended June 30, 2001                         F-3

     Statements of Operations for the Years Ended June 30, 2001
       and 2000                                                             F-4

     Statements of Stockholder's Equity (Deficit) for the years
       ended June 30, 2001 and 2000                                         F-5

     Statements of Cash Flows for the years ended June 30, 2001,
       and 2000                                                             F-6

     Notes to Financial Statements                                          F-8

ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS

     On July 30, 2000,  the Company  replaced its former  auditor,  King Weber &
Associates,  P.C. of Tempe  Arizona with Mantyla  McReynolds  of Salt Lake City,
Utah.  In the audited  financial  statements  for the year ended June 30,  1999,
King, Weber & Associates,  P.C. qualified the financial statements stating there
was doubt of the Company's ability to continue as a going concern.  The Board of
Directors authorized the change in accountants.  However, there were no material
disagreements between the management of the Company and the conclusions of King,
Weber & Associates,  and P.C. in its financial  statements.  Rather, the Company
terminated its engagement with King,  Weber & Associates,  and P.C.  because the
corporate structure of Diamond and its subsidiaries, including the Company, with
Diamond as an investment  company  parent,  is outside of the practice  focus of
King, Weber & Associates.

                                       8
<PAGE>
                                    PART III

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

     The  following  table lists the  directors  and  executive  officers of the
Company. Directors of the Company are elected annually at each annual meeting of
shareholders.  Executive  officers  serve  at  the  pleasure  of  the  Board  of
Directors.

       NAME             AGE             POSITION                TERM AS DIRECTOR
       ----             ---             --------                ----------------
David D. Westfere       35       Director, President and
                                 Chief Executive Officer              2001

Todd D. Chisholm        39       Director, Chief Financial
                                 Officer and Secretary                2001

John O. Hoffman         37       Director                             2001


The following  information  is provided for each of the  executive  officers and
directors of the Company:

     DAVID WESTFERE,  35, has been the President and Chief Executive Officer and
a Director of the Company since its inception in 1997.  Mr.  Westfere  presently
works  part  time  for  the  Company,  and  since  1999  he has  also  been  the
owner-operator  of  a  towing  service  company.  Mr.  Westfere  also  has  been
President,  Chief  Executive  Officer and a Director  of Diamond  since April 6,
1995. From September 1984 to June 1987 Mr.  Westfere  attended the University of
Akron.

     TODD D. CHISHOLM, 39, has been the Chief Financial Officer,  Secretary, and
a Director of the Company since its  inception.  In addition,  Mr.  Chisholm has
been the Chief  Financial  Officer,  Secretary,  and a Director of Diamond since
June 27, 1995.  Since April 1995 he has also been the  vice-president  and chief
financial  officer of The  Solarium,  Inc., a privately  held travel and tanning
center.  Mr. Chisholm has been a certified public accountant since 1992, serving
as President of the  accounting  firm Chisholm & Associates  since June 1, 2000,
and as a partner of the  accounting  firm Crouch,  Bierwolf & Chisholm  from May
1995 to June 1,  2000.  Mr.  Chisholm  received  a  Bachelor  of Arts  degree in
business from the University of Utah.

     Mr. Chisholm,  performs accounting services for the Company for which he is
paid an hourly fee. It is believed that the terms of the arrangement between Mr.
Chisholm  and the  Company  are at least as  favorable  as terms  that  could be
obtained with a non-affiliated party.

     JOHN O. HOFFMAN, 37, has been a director and the Chief Operating Officer of
the Company since its inception.  Mr. Hoffman is the current Co-Owner and CEO of
Orion Environmental Southwest, Inc., a Stage II Environmental Compliance Testing
company  specializing  in the  service  station  industry.  Mr.  Hoffman was the
President/CEO and Owner of Premier Plastics  Corporation from 1994 to 1998. From
1992 to 1994,  Mr.  Hoffman was Senior  Operations  Engineer and Manager of Site
Development  for  Taco  Bell   Corporations/PepsiCo  in  Irvine  California.  In
addition,  Mr.  Hoffman  has  also  worked  as a  design  manager  for  business
transactions  that  included  forecasting  and  labor  scheduling  systems,  the
creation and  maintenance  of operational  standard  databases and various labor
savings, trade-off, and Human Factors/Ergonomics studies. From 1990 to 1992, Mr.
Hoffman worked as a Industrial/Manufacturing  Engineer at Northrop Corporation's
B-2 Division in Pico Rivera California.

                                       9
<PAGE>
ITEM 10. EXECUTIVE COMPENSATION.

     The  following  table  summarizes  the  compensation  payable to  executive
officers:

                      SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
                              ANNUAL COMPENSATION          LONG TERM COMPENSATION AWARDS
                             ---------------------    -----------------------------------------
NAME &              YEAR                                               RESTRICTED   SECURITIES
PRINCIPAL          ENDING                              OTHER ANNUAL       STOCK     UNDERLYING
POSITION          JUNE 30    SALARY($)   BONUS ($)    COMPENSATION($)   AWARD(S)      OPTIONS
--------          -------    ---------   ---------    ---------------   --------      -------
<S>                <C>        <C>            <C>             <C>            <C>       <C>
David Westfere     2000       30,000         0               0              0         100,000
President &        1999       40,000         0               0              0         100,000
CEO, Director
</TABLE>

     No executive  officer of the Company  received any  compensation  exceeding
$100,000 for the fiscal years ended June 30, 2000 or 2001.

                      OPTION/SAR GRANTS IN LAST FISCAL YEAR
                               (Individual Grants)

<TABLE>
<CAPTION>
                   NUMBER OF
                   SECURITIES         PERCENT OF TOTAL
                   UNDERLYING           OPTIONS/SARS              EXERCISE
                  OPTIONS/SARS     GRANTED TO EMPLOYEES    OR BASE EXPIRATION
    NAME           GRANTED (#)         IN FISCAL YEAR           PRICE ($/SH)       DATE
    ----           -----------         --------------           ------------       ----
<S>               <C>                      <C>                     <C>           <C>  <C>
David Westfere    100,000(1)               100                     $0.02         5/31/03
</TABLE>

----------
(1)  The Company  adopted an employee stock option plan in June 1998 pursuant to
     which  options  may be granted to key  employees  and/or  officers  who are
     selected  by the Board of  Directors.  The  exercise  price of the  options
     granted  pursuant to the Plan is  determined by the Board of Directors on a
     case-by-case  basis.  Options are exercisable over a three-year  period and
     only while the optionee remains an employee of the Company, except that, in
     the  event  of  an  optionee's  termination  of  employment  by  reason  of
     disability or death while an employee,  the option may be exercisable until
     one year  after  the  employee's  termination  or  death.  The Plan  allows
     granting of up to 2,400,000  shares of the Company's  common  stock.  As of
     June 30,  2000,  1,500,000  options  have been  granted and  exercised  for
     services  valued at $60,000.  No other  options have been granted under the
     Plan, and there are no other options currently outstanding.

               AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
                              AND FY-END OPTION/SAR
                                     VALUES

<TABLE>
<CAPTION>
                                                   NUMBER OF SECURITIES        VALUE OF UNEXERCISED
                   SHARES                         UNDERLYING UNEXERCISED          IN-THE-MONEY
                ACQUIRED ON        VALUE        OPTIONS/SARS AT FY END(#)     OPTIONS/SARS AT FY END
    NAME        EXERCISE (#)    REALIZED ($)    EXERCISABLE/UNEXERCISABLE   EXERCISABLE/UNEXERCISABLE
    ----        ------------    ------------    -------------------------   -------------------------
<S>               <C>             <C>                       <C>                        <C>
David Westfere    500,000         $20,000                   0                          0
</TABLE>

                                       10
<PAGE>
DIRECTOR COMPENSATION

     Directors are permitted to receive  fixed fees and other  compensation  for
their services as directors, as determined by the Board of Directors. No amounts
have been paid to directors of the Company in such capacity.

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

     The following  table sets forth certain  information  concerning the Common
Stock  ownership  as of June 30,  2001,  of (i) each  person who is known to the
Company to be the  beneficial  owner of more than five percent of the  Company's
Common Stock; (ii) all directors; (iii) each of the executive officers; and (iv)
directors and executive officers of the Company as a group:

TITLE OF    NAME AND ADDRESS OF         AMOUNT AND NATURE OF
 CLASS       BENEFICIAL OWNER            BENEFICIAL OWNER(1)    PERCENT OF CLASS
 -----       ----------------            -------------------    ----------------
Common      Diamond Equities, Inc.           8,372,000               62.95%
            216 South Alma School Road
            Suite 10
            Mesa, Arizona 85210

Common      John O. Hoffman                  1,100,000                8.27%
            Director
            4237 E. Hazelwood
            Phoenix, Arizona 85018

Common      Cowley Group, Ltd.               1,000,000                7.52%
            Sea Meadow House
            P.O. Box 116
            Road Town, Tortola
            British Virgin Islands

Common      David D. Westfere                  764,000                5.74%
            President & CEO, Director
            105 E. Ellis Drive
            Tempe, Arizona 85282

Common      Todd D. Chisholm                   764,000                5.74%
            CFO, Director
            28 North Fairway Drive
            North Salt Lake, UT 84054

Common      Directors and Officers           2,628,000               19.76%
            as a Group

----------
(1)  These Shares are held directly and of record by the indicated shareholders.

     The  shares  of  the  Company's  Preferred  Stock,  which  are  issued  and
outstanding, are non-voting.

                                       11
<PAGE>
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

     Diamond is the parent of the Company,  which  currently owns  approximately
63% of the  outstanding  Common Stock of the Company.  From the inception of the
Company,  Diamond has  transferred  cash to the Company  and  directly  paid the
Company's expenses,  for which the Company was indebted to Diamond. In addition,
the Company and Diamond have common expenses , which have been allocated between
the Company and Diamond. As of June 30, 1999, the Company owed Diamond $312,649.
As of June 30, 2000, the Company owed Diamond  $465,586.  On September 30, 2000,
the Company issued 1,800,000 shares of its common stock to Diamond in payment of
$454,283 owed to Diamond as of that date. The Company currently does not owe any
sums to Diamond.

     Diamond  employs David D.  Westfere as its  President  and Chief  Executive
Officer and he is a director of Diamond. Diamond pays Mr. Westfere a base salary
of $46,000 per year.  For the year ended June 30, 2001, the Company paid $26,667
to Mr.  Westfere in salary and $5,506 in medical  insurance  and other  employee
benefits.

     Diamond  employs  Todd D.  Chisholm  as its  Chief  Financial  Officer  and
Secretary/Treasurer  and he is also a director of Diamond. Mr. Chisholm performs
accounting  services  for  Diamond  for  which he is paid an hourly  fee.  It is
believed that the terms of the  arrangement  between Mr. Chisholm and the Parent
are at least as favorable as terms that could be obtained with a  non-affiliated
party.

     Mr.  Chisholm was a partner of the  accounting  firm of Crouch,  Bierwolf &
Chisholm  until June 1,  2000,  and the  proprietor  of the  accounting  firm of
Chisholm & Associates thereafter.  Both firms have performed accounting services
for the Company and for Diamond.  For the year ended June 30, 2001,  the Company
paid $13,817 to Mr. Chisholm for accounting services.

                                       12
<PAGE>
ITEM 13. EXHIBITS LIST AND REPORTS ON FORM 8-K.

     (a) The following  exhibits are furnished with this Report pursuant to Item
601 of Regulation SB-2.

Exhibit Number      Description of Exhibit
--------------      ----------------------
     2.1            Articles of Incorporation
                    This  Amendment  to Form  10-SB  incorporates  by  reference
                    Exhibit 2.1 that the Company had  previously  filed with the
                    SEC on January 24, 2001.

     2.2            Amendment to Articles of Incorporation
                    This  Amendment  to Form  10-SB  incorporates  by  reference
                    Exhibit 2.2 that the Company had  previously  filed with the
                    SEC on January 24, 2001.

     2.3            Bylaws
                    This  Amendment  to Form  10-SB  incorporates  by  reference
                    Exhibit 2.3 that the Company had  previously  filed with the
                    SEC on January 24, 2001.

     3.1            Form of Certificate of Common Stock
                    This  Amendment  to Form  10-SB  incorporates  by  reference
                    Exhibit 3.1 that the Company had  previously  filed with the
                    SEC on January 24, 2001.

     3.2            Form of Certificate of Class A Preferred Stock
                    This  Amendment  to Form  10-SB  incorporates  by  reference
                    Exhibit 3.2 that the Company had  previously  filed with the
                    SEC on January 24, 2001.

     3.3            Certificate   of   Designation,    Preferences,   Rights   &
                    Limitations for Class A Preferred  Stock
                    This  Amendment  to Form  10-SB  incorporates  by  reference
                    Exhibit 3.3 that the Company had  previously  filed with the
                    SEC on January 24, 2001.

     3.4            Confidential  Disclosure Statement of September 29, 1998 for
                    Class A Preferred Stock
                    This  Amendment  to Form  10-SB  incorporates  by  reference
                    Exhibit 3.4 that the Company had  previously  filed with the
                    SEC on January 24, 2001.

     6.1            Asset Purchase  Agreement  between the Company,  Diamond and
                    Premier Plastics Corp, dated June 15, 1998
                    This  Amendment  to Form  10-SB  incorporates  by  reference
                    Exhibit 6.1 that the Company had  previously  filed with the
                    SEC on January 24, 2001.

     6.2a           Asset Purchase Agreement between the Company,  Precision and
                    Accurate Thermoplastics, Inc., dated July 15, 1998
                    This  Amendment  to Form  10-SB  incorporates  by  reference
                    Exhibit 6.2a that the Company had previously  filed with the
                    SEC on January 24, 2001.

     6.2b           Promissory Note made by Precision in favor of Accurate dated
                    July 15, 1998
                    This  Amendment  to Form  10-SB  incorporates  by  reference
                    Exhibit 6.2b that the Company had previously  filed with the
                    SEC on January 24, 2001.

     6.3            Employment  Agreement between the Company and David Westfere
                    dated June 1, 1998
                    This  Amendment  to Form  10-SB  incorporates  by  reference
                    Exhibit 6.3 that the Company had  previously  filed with the
                    SEC on January 24, 2001.

     6.4            Employment  Agreement  between the Company and John  Hoffman
                    dated June 15, 1998
                    This  Amendment to Form 10-SB hereby  withdraws  Exhibit 6.4
                    that  the  Company  had  previously  filed  with  the SEC on
                    January 24, 2001.

     6.5            Employee Stock Option Plan of June 1, 1998
                    This  Amendment  to Form  10-SB  incorporates  by  reference
                    Exhibit 6.5 that the Company had  previously  filed with the
                    SEC on January 24, 2001.

                                       13
<PAGE>
                                   SIGNATURES

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

                                   PRECISION PLASTICS MOLDING, INC.
                                   Registrant

                                   By: /s/ David D. Westfere
                                       -----------------------------------------
                                       David D. Westfere, President

Date: October 16, 2000

                                   By: /s/ Todd D. Chisholm
                                       -----------------------------------------
                                       Todd D. Chisholm, Chief Financial Officer
Date: October 16, 2001

                                       14
<PAGE>
                          Independent Auditors' Report


The Board of Directors and Shareholders of
Precision Plastics Molding, Inc.

We have audited the accompanying  balance sheet of Precision  Plastics  Molding,
Inc.  as  of  June  30,  2001,   and  the  related   statements  of  operations,
stockholders' equity, and cash flows for the years ended June 30, 2001 and 2000.
These financial  statements are the responsibility of the Company's  management.
Our responsibility is to express an opinion on these financial  statements based
on our audit.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all material  respects,  the financial  position of Precision  Plastics Molding,
Inc., as of June 30, 2001,  and the results of operations and cash flows for the
periods ended June 30, 2001 and 2000, in conformity with  accounting  principles
generally accepted in the United States of America.

The  accompanying  financial  statements  have been  prepared  assuming that the
Company  will  continue  as a  going  concern.  As  discussed  in  Note 3 to the
financial  statements,  the Company has accumulated losses from operations since
its inception and has  experienced  declining  revenue which raises  substantial
doubt about the ability to continue as a going  concern.  Management's  plans in
regard to these matters are also  described in Note 3. The financial  statements
do not  include  any  adjustments  that might  result  from the  outcome of this
uncertainty.

                                        /s/ Mantyla McReynolds

Salt Lake City, Utah
August 4, 2001

                                      F-1
<PAGE>
                        PRECISION PLASTICS MOLDING, INC.
                                  BALANCE SHEET
                                  JUNE 30, 2001


                                     ASSETS
CURRENT ASSETS
  Cash & cash equivalents - Note 2                                  $   101,588
  Accounts receivable - net of allowance of $10,000 - Note 12           110,687
  Inventory - Notes 2 & 5                                                71,989
                                                                    -----------
        TOTAL CURRENT ASSETS                                            284,264

PROPERTY AND EQUIPMENT - Note 2 & 7
  Property and equipment                                              1,006,676
  Less: Accumulated depreciation                                       (608,848)
                                                                    -----------
        NET PROPERTY AND EQUIPMENT                                      397,828
OTHER ASSETS
  Deposit                                                                 6,750
                                                                    -----------
        TOTAL OTHER ASSETS                                                6,750

        TOTAL ASSETS                                                $   688,842
                                                                    ===========

                       LIABILITIES & STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
  Accounts payable                                                  $    23,763
  Accrued liabilities                                                    77,295
  Current portion of capital leases - Note 13                             2,287
                                                                    -----------
        Total Current Liabilities                                       103,345

Long-Term Liabilities
  Capital leases payable - Note 13                                        2,287
  Less current portion of capital leases                                 (2,287)
                                                                    -----------
        Total Long-Term Liabilities                                           0
                                                                    -----------
        Total Liabilities                                               103,345

Stockholders' Equity - Notes 11 & 14
  Preferred stock -- Series A 10%, $1,000 par value,
    1,000 shares authorized, 36 shares issued and outstanding,
    liquidation preference of $36,000                                    36,000
  Common stock -- 50,000,000 shares authorized, $.001 par
    value; 13,300,000 shares issued and outstanding                      13,300
  Additional paid-in capital                                          1,323,072
  Accumulated deficit                                                  (786,875)
                                                                    -----------
        TOTAL STOCKHOLDERS' EQUITY                                      585,497
                                                                    -----------

        TOTAL LIABILITIES & STOCKHOLDERS' EQUITY                    $   688,842
                                                                    ===========

                 See accompanying notes to financial statements

                                      F-2
<PAGE>
                        PRECISION PLASTICS MOLDING, INC.
                  STATEMENTS OF OPERATIONS FOR THE YEARS ENDED
                             JUNE 30, 2001 AND 2000


                                                   YEAR ENDED       YEAR ENDED
                                                     6/30/01          6/30/00
                                                  ------------     ------------
Revenues - Note 2                                 $    709,172     $    689,288
Cost of sales                                          610,947          571,082
                                                  ------------     ------------

        GROSS PROFIT                                    98,225          118,206
                                                  ------------     ------------

OPERATING EXPENSES
  Marketing, general and administrative                331,762          453,740
                                                  ------------     ------------
  Total Operating Expenses                             331,762          453,740
                                                  ------------     ------------
        NET LOSS FROM OPERATIONS                      (233,537)        (335,534)
Other Income/(Expense)
  Interest expense                                        (566)          (1,475)
                                                  ------------     ------------
        TOTAL OTHER INCOME/(EXPENSE)                      (566)          (1,475)
                                                  ------------     ------------

        NET LOSS BEFORE TAXES                         (234,103)        (337,009)

        PROVISION FOR INCOME TAXES                           0                0
                                                  ------------     ------------

        NET LOSS                                  $   (234,103)    $   (337,009)
                                                  ============     ============

BASIC LOSS/SHARE - NOTES 2 & 3
CONTINUING OPERATIONS                             $      (0.02)    $      (0.03)
                                                  ------------     ------------

WEIGHTED AVERAGE NUMBER SHARES                      12,850,000        9,791,665
                                                  ============     ============

                 See accompanying notes to financial statements

                                      F-3
<PAGE>
                        PRECISION PLASTICS MOLDING, INC.
                   STATEMENT OF STOCKHOLDERS' EQUITY/(DEFICIT)
               FOR THE YEARS ENDED JUNE 30, 2001 AND JUNE 30, 2000

<TABLE>
<CAPTION>
                              COMMON                   ADDITIONAL
                              SHARES        COMMON      PAID-IN     PREFERRED               ACCUMULATED
                              ISSUED         STOCK      CAPITAL       SHARES     AMOUNT       DEFICIT        TOTAL
                             ---------     --------    ----------   ---------   --------    -----------    ---------
<S>                          <C>           <C>         <C>          <C>         <C>         <C>            <C>
BALANCE, JUNE 30, 1999       1,000,000     $  1,000    $  641,089         36    $ 36,000    $ (208,563)    $ 469,526
                            ----------     --------    ----------   ---------   --------    ----------     ---------

8 for 1 split                7,000,000        7,000        (7,000)

Stock issued for cash        2,000,000        2,000       178,000                                            180,000

Stock issued for services    1,500,000        1,500        58,500                                             60,000

Preferred dividends                                                                             (3,600)       (3,600)

Net loss for the year
ended June 30, 2000                                                                           (337,009)     (337,009)
                            ----------     --------    ----------   ---------   --------    ----------     ---------

BALANCE, JUNE 30, 2000      11,500,000     $ 11,500    $  870,589         36    $ 36,000    $ (549,172)    $ 368,917

Issued stock to
shareholder for debt,
September 30, 2000           1,800,000        1,800       452,483                                            454,283

Preferred dividends                                                                             (3,600)       (3,600)

Net loss for the year
ended June 30, 2001                                                                           (234,103)     (234,103)
                            ----------     --------    ----------   ---------   --------    ----------     ---------

BALANCE, JUNE 30, 2000      13,300,000     $ 13,300    $1,323,072         36    $ 36,000     $(786,875)    $ 585,497
                            ==========     ========    ==========   =========   ========    ==========     =========
</TABLE>

                 See accompanying notes to financial statements

                                      F-4
<PAGE>
                        PRECISION PLASTICS MOLDING, INC.
                            STATEMENTS OF CASH FLOWS
                   FOR THE YEARS ENDED JUNE 30, 2001 AND 2000


                                                        YEAR ENDED    YEAR ENDED
                                                          6/30/01       6/30/00
                                                         ---------    ----------
CASH FLOWS FROM OPERATING ACTIVITIES
Net Loss                                                 $       0    $(337,009)

Adjustments to reconcile net income to net cash
  provided by operating activities:
  Depreciation and amortization                            209,955      208,513
  Allowance accounts receivable                                904       (4,510)
  Stock issued for compensation                                  0       60,000
  Decrease/(increase) in accounts receivable               (27,985)     119,342
  Increase/(decrease) in accounts payable                    9,851      (81,469)
  Increase/(decrease) in other current liabilities          24,585       (3,058)
  Decrease/(increase) in inventories                        26,592       85,562
  Increase/(decrease) in customer deposits                       0       (8,809)
  Decrease/(increase) in prepaid expenses                        0        6,628
                                                         ---------    ---------
    NET CASH PROVIDED /(USED) BY OPERATING ACTIVITIES      243,902       45,190

CASH FLOWS FROM INVESTING ACTIVITIES
  Purchase of property, machinery and equipment               (582)     (13,931)
                                                         ---------    ---------
    NET CASH USED FOR INVESTING ACTIVITIES                    (582)     (13,931)

CASH FLOWS FROM FINANCING ACTIVITIES
  Proceeds form issuance of common stock                         0      180,000
  Principal payments on capital leases                      (2,091)     (33,435)
  Settlement on note payable                                     0     (165,000)
  Payment of dividends                                      (4,510)      (3,567)
  Payable to parent                                        (11,303)      38,143
                                                         ---------    ---------
    NET CASH PROVIDED BY FINANCING ACTIVITIES              (17,904)      16,141
                                                         ---------    ---------
    NET INCREASE/(DECREASE) IN CASH                        225,416       47,400
BEGINNING CASH AND CASH EQUIVALENTS                        110,275       62,875
                                                         ---------    ---------
ENDING CASH AND CASH EQUIVALENTS                         $ 335,691    $ 110,275
                                                         =========    =========

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
    Cash paid during the year for interest               $     566    $   1,475
    Cash paid during the year for income taxes           $       0    $      50

NONCASH INVESTING AND FINANCING ACTIVITIES
    Stock issued for services                            $       0    $  60,000
    Stock issued to parent in settlement of debt         $ 454,283    $       0


                 See accompanying notes to financial statements

                                      F-5
<PAGE>
                        PRECISION PLASTICS MOLDING, INC.
                          NOTES TO FINANCIAL STATEMENTS
                                  JUNE 30, 2001


NOTE 1 - ORGANIZATION AND BASIS OF PRESENTATION

     Precision  Plastics  Molding,  Inc. (the "Company") was formed in Nevada in
     November 1997 for the purpose of acquiring the assets of two or more small,
     custom  injection  plastic  molders.   The  Company  is  a  majority  owned
     subsidiary of Diamond Equities, Inc. which owned 63% of the Company at June
     30, 2001.

     On June 15, 1998 the Company  purchased  the assets of a plastic  injection
     molding  business.  On July 20, 1998 the Company  purchased the assets of a
     second plastic injection  molding  business.  The businesses are located in
     Arizona and business is generated in the southwestern United States.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     CASH AND CASH EQUIVALENTS

     Include  all  short-term   highly  liquid   investments  that  are  readily
     convertible to known amounts of cash and have original  maturities of three
     months or less.

     INVENTORIES

     Consist of finished goods, work in process and raw materials and are stated
     at the lower of cost (specific identification) or market.

     INCOME TAXES

     The Company  provides for income taxes based on the provisions of Statement
     of Financial  Accounting  Standards No. 109,  ACCOUNTING  FOR INCOME TAXES,
     which among other things,  requires  that  recognition  of deferred  income
     taxes be  measured by the  provisions  of enacted tax laws in effect at the
     date of financial statements.

     PROPERTY, MACHINERY AND EQUIPMENT

     Property, machinery and equipment are stated at cost and are depreciated on
     the  straight-line  method over their  respective  estimated  useful  lives
     ranging from 3 to 7 years.  Expenditures  for  maintenance  and repairs are
     charged to expense as incurred.

     REVENUE RECOGNITION

     The Company recognizes revenue upon shipment of product.

                                      F-6
<PAGE>
                        PRECISION PLASTICS MOLDING, INC.
                          NOTES TO FINANCIAL STATEMENTS
                                  JUNE 30, 2001


NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [continued]

     ADVERTISING EXPENSES

     The Company expenses  advertising costs as incurred.  Advertising  expenses
     were  $686  and  $1,796  for the  years  ended  June  30,  2001  and  2000,
     respectively.

     FINANCIAL INSTRUMENTS

     Financial  instruments consist primarily of cash, restricted cash, accounts
     receivable, and obligations under accounts payable, accrued expenses, debt,
     payable to parent, and capital lease  instruments.  The carrying amounts of
     cash,  accounts   receivable,   accounts  payable,   accrued  expenses  and
     short-term  debt  approximate  fair value because of the short  maturity of
     those  instruments.  The  carrying  value of the  Company's  capital  lease
     arrangements approximates fair value because the instruments were valued at
     the retail cost of the  equipment at the time the Company  entered into the
     arrangements.

     USE OF ESTIMATES

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

     LOSS PER COMMON SHARE

     Net loss per common share is  calculated  under the  provisions of SFAS No.
     128 EARNINGS PER SHARE, by dividing net loss by the weighted average number
     of common shares outstanding.  Diluted earnings per share are not presented
     because the effect of considering the convertible  preferred stock would be
     antidilutive for both years ending June 30, 2001 and 2000.

NOTE 3 - LIQUIDITY

     The accompanying  financial statements have been prepared assuming that the
     Company  will  continue as a going  concern.  The  Company has  experienced
     recurring losses for the years ended June 30, 2001 and 2000.  Revenues have
     also  declined  from  levels  achieved  in prior  years,  which  may not be
     adequate to provide for future  capital  improvements.  These factors raise
     substantial  doubt  about the  Company's  ability  to  continue  as a going
     concern.  The financial  statements do not include any adjustments relating
     to the recover ability and  classification of asset carrying amounts or the
     amount and  classification  of  liabilities  that might  result  should the
     Company be unable to continue as a going concern.

     Management of the Company is attempting to obtain additional capital and to
     increase the level of operations.  Management  believes if these objectives
     can be achieved it can begin  profitable  operations  which will enable the
     Company to continue as a going concern.

                                      F-7
<PAGE>
                        PRECISION PLASTICS MOLDING, INC.
                          NOTES TO FINANCIAL STATEMENTS
                                  JUNE 30, 2001


NOTE 4 - LOSS PER SHARE

     Loss per share calculation for the year ended June 30, 2001.

                                              (LOSS)       SHARES      PER SHARE
                                              ------       ------      ---------
     Net Loss                               $ (234,103)   12,850,000
     Preferred Stock Dividends                  (3,600)
                                            ----------
                                            $ (237,703)
                                            ==========
     BASIC EARNINGS PER SHARE
                                            ----------                 -------
        Loss Available to Common
          Shareholders                      $ (237,703)   12,850,000   $ (0.02)
                                            ----------                 -------
     Effect of Dilutive Securities
        Preferred Stock                            N/A

     DILUTED EARNINGS PER SHARE                    N/A


     Loss per share calculation for the year ended June 30, 2000.

                                              (LOSS)       SHARES      PER SHARE
                                              ------       ------      ---------
     Net Loss                               $ (377,009)   9,791,665

     Preferred Stock Dividends                  (3,600)
                                            ----------
                                            $ (380,609)
                                            ==========

     BASIC EARNINGS PER SHARE
        Loss Available to Common
          Shareholders                      $ (380,609)   9,791,665     $ (0.03)
                                            ----------                  -------
     Effect of Dilutive Securities

        Preferred Stock                            N/A

     DILUTED EARNINGS PER SHARE                    N/A

     Diluted  earnings per share are not  presented for the years ended June 30,
     2001 and 2000 because the effect of considering the  convertible  preferred
     stock would be antidilutive for each year.

NOTE 5 - INVENTORIES

     Inventories consist of the following at June 30, 2001:

          Raw Materials                                        $   26,708
          Finished Goods                                           45,281
                                                               ----------
            Total Inventory                                    $   71,989
                                                               ==========

                                      F-8
<PAGE>
                        PRECISION PLASTICS MOLDING, INC.
                          NOTES TO FINANCIAL STATEMENTS
                                  JUNE 30, 2001

NOTE 6 - CUSTOMER DEPOSITS

     The Company requires a fifty percent deposit at time of order placement for
     tool work and recognizes the deposit as revenue upon shipment of order.

NOTE 7 - PROPERTY, MACHINERY AND EQUIPMENT

     Property,  machinery  and  equipment  consist of the  following at June 30,
     2001:

                                                      ACCUMULATED
                                           COST       DEPRECIATION    NET VALUE
                                        ----------     ----------     ----------
          Equipment                     $  915,060     $  528,006     $  387,054

          Leasehold improvements            51,633         50,199          1,434
          Furniture and fixtures            12,208          7,196          5,012
          Office equipment                  26,525         22,232          4,293
          Vehicles                           1,250          1,215             35
                                        ----------     ----------     ----------
            TOTALS:                     $1,006,676     $  608,848     $  397,828
                                        ==========     ==========     ==========

     Office equipment includes $8,097 less $4,723 in accumulated amortization on
     equipment  under  capital  lease.  Depreciation  expense,  including  lease
     amortization,  for the years ended June 30, 2001 and 2000 was  $209,955 and
     $208,513, respectively.

NOTE 8 - BUSINESS ACQUISITIONS

     On July 20, 1998, the Company purchased  substantially all of the operating
     assets  of  Accurate  Thermoplastics,  Inc.,  a plastic  injection  molding
     business in Mesa, Arizona.  The acquisition was recorded under the purchase
     method of  accounting.  The aggregate  purchase  price was allocated to the
     assets  acquired and  liabilities  assumed based on their  respective  fair
     market  values.  The aggregate  consideration  paid  approximated  the fair
     market  value of the net assets  acquired  and no  goodwill  was  recorded.
     Operating results are included in the accompanying  consolidated  financial
     statements for the periods presented.

NOTE 9 - OPERATING LEASE

     The Company  leases its operations  facility under an operating  lease that
     expired in July 1999.  The rental  agreement  has been month to month since
     July 1999.  Rent  expense  under the lease was  approximately  $78,095  and
     $83,874 for the years ended June 30, 2001 and 2000.

NOTE 10 - INCOME TAXES

     The Company  recognizes  deferred income taxes for the differences  between
     financial accounting and tax bases of assets and liabilities.  Income taxes
     for the years ended June 30, 2001 and 2000 consisted of the following:

                                       F-9
<PAGE>
                        PRECISION PLASTICS MOLDING, INC.
                          NOTES TO FINANCIAL STATEMENTS
                                  JUNE 30, 2001

NOTE 10  INCOME TAXES (continued)

                                                                  TAX       RATE
                                                               ---------    ----
     Net operating loss (expires through 2021)    $ 783,103    $ 328,903     42%
     Valuation allowance                                        (328,903)
                                                               ---------
     Deferred tax asset 6/30/2001                              $       0
                                                               =========

     The allowance has increased  $98,323 from $230,580 as of June 30, 2000. For
     the years  ending June 30,  2001 and 2000 the  Company  had no  significant
     income  tax  expense  or  liability  as a result  of net  operating  losses
     incurred. Currently, there is no reasonable assurance that the Company will
     be able to take  advantage  of deferred  tax assets,  thus,  an  offsetting
     allowance has been established for the deferred asset.

NOTE 11 - EMPLOYEE STOCK OPTION PLAN

     The Company  adopted an employee stock option plan in June 1998 pursuant to
     which  options  may be granted to key  employees  and/or  officers  who are
     selected  by the Board of  Directors.  The  exercise  price of the  options
     granted  pursuant to the Plan are determined by the Board of Directors on a
     case-by-case  basis.  Options are exercisable  over a three year period and
     only while the optionee remains an employee of the Company, except that, in
     the  event  of  an  optionee's  termination  of  employment  by  reason  of
     disability  or death while an employee.  The Plan allows  granting of up to
     2,400,000  shares of Precision  common stock.  On June 26, 2000,  1,500,000
     options were granted to five individuals and exercised at the price of $.04
     per share for services  valued in aggregate  at $60,000.  No other  options
     have been granted under the Plan.

NOTE 12 - CONCENTRATION OF CREDIT RISK AND MAJOR CUSTOMERS

     Financial   instruments   that   potentially   subject   the   Company   to
     concentrations   of  credit  risk  are   primarily   accounts   receivable.
     Approximately  $93,000 of the accounts  receivable balance at June 30, 2001
     is due from two significant  customers.  Approximately 56% of the Company's
     revenue for the year ended June 30, 2001 was  derived  from two  customers,
     including 36% and 20% from each customer.

NOTE 13 - CAPITAL LEASES

     The Company leases office  equipment under capital leases expiring  through
     June 2002.  The following  presents  future  minimum lease  payments  under
     capital lease and present value of minimum lease payments  through June 30,
     2002:

     Total minimum lease payments                                  $ 2,400
     Less amount representing interest                                 113
                                                                   -------
     Present value of minimum lease payments                       $ 2,287
                                                                   -------
          Current portion                                            2,287
                                                                   -------
          Long-term portion                                        $     0
                                                                   -------



                                      F-10
<PAGE>
                        PRECISION PLASTICS MOLDING, INC.
                          NOTES TO FINANCIAL STATEMENTS
                                  JUNE 30, 2001

NOTE 13 - CAPITAL LEASES (continued)

     Gross cost and  accumulated  amortization  of  equipment  under the capital
     leases at June 30, 2001 was approximately $8,097 and $4,723, respectively.

NOTE 14 - STOCKHOLDERS' EQUITY

     PREFERRED STOCK

     The  Company  sold  36  shares  of the  Series  A 10%,  $1,000  par  value,
     Cumulative Preferred Stock for $36,000 during the year ended June 30, 1999.
     The  Series A has a  liquidation  preference  of  $36,000.  The  shares are
     convertible  into units of four hundred shares of common stock and warrants
     to  purchase  two  hundred  shares  of  common  stock at $4.50  per  share.
     Dividends  of  $4,510  were  paid  during  the year  ended  June 30,  2001,
     including $910 which was accrued at June 30, 2000.

     COMMON STOCK

     In September of 1999 the Company issued 2,000,000 shares of common stock to
     various investors. The shares were valued at $0.09 per share.

     On June 26,  2000 the  Company  issued  1,500,000  common  stock to various
     employees for services rendered. The shares were valued at $0.04 per share.

     On September 30, 2000, the Company  converted debt to the parent company of
     $454,283 to equity by issuing 1,800,000 shares of common stock.

NOTE 15 - RELATED PARTY TRANSACTIONS

     An officer and director of the Company performs accounting services for the
     Company  through his  accounting  firm at its hourly rates for  compilation
     services and for any  additional  work. The Company paid $13,817 and $7,922
     to the  officer's  accounting  firm for the years  ended June 30,  2001 and
     2000, respectively.

     The Company has received  assistance  and advances from its parent  Company
     from time to time. Expenses paid by the parent on behalf of the Company are
     reimbursed  through the payable to parent account.  There is no balance due
     to the parent as of June 30, 2001.

NOTE 16 - COMMITMENTS AND CONTINGENCIES

     Precision  entered  into an  employment  agreement  on July 1,  1998 for an
     initial  term of three  years.  The employee is to receive a base salary of
     $40,000 and shall be adjusted annually by the increase, if any, in the cost
     of living. The employee is entitled to an annual bonus as determined by the
     Board of Directors. The balance due and accrued on this contract as of June
     30, 2001 is $76,397.

                                      F-11