U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                          -----------------------------

                                   FORM 10-KSB

                 ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE
                     SECURITIES EXCHANGE ACT OF 1934 FOR THE
                       FISCAL YEAR ENDED DECEMBER 31, 2001

                         Commission File Number: 0-32543

                         VERYBESTOFTHEINTERNET.COM, INC.
                 (Name of Small Business Issuer in Its Charter)

          Texas                                          75-2910096
(State of Incorporation)                    (I.R.S. Employer Identification No.)

                        1950 Stemmons Freeway, Suite 4048
                               Dallas, Texas 75207
          (Address of Principal Executive Offices, including Zip Code)

                                 (214) 800-4333
                (Issuer's Telephone Number, Including Area Code)
                                 ---------------

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

Title of Each Class                                        Name of Each Exchange
-------------------                                         on which Registered
        N/A                                                 -------------------
                                                                    N/A


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

                                 Title of Class
                                 --------------
                         Common Stock, $.0001 par value

     Check  whether  the issuer (i) 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 issuer was required to file such reports),  and (ii) has
been subject to such filing requirements for the past 90 days. Yes [x] No [ ]

     Check  if  disclosure  of  delinquent  filers  in  response  to Item 405 of
Regulation  S-B is not  contained  in  this  form,  and no  disclosure  will  be
contained,  to the  best of the  issuer's  knowledge,  in  definitive  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  revenues  for the fiscal year ended  December  31, 2001 were
$-0-.  Although  application has been made, the issuer's common stock is not yet
eligible for trading on the OTC Bulletin  Board.  As such, the aggregate  market
value of common  stock  held by  non-affiliates  of the issuer as of the date of
this report cannot be determined.. As of February 15, 2002, there were 9,823,400
shares of the issuer's common stock outstanding.

                       Documents Incorporated by Reference
     No  documents,  other than  certain  exhibits,  have been  incorporated  by
reference into this report.


<PAGE>

                                TABLE OF CONTENTS

                                                                            PAGE
                                                                            ----

                                     PART I

   ITEM 1. DESCRIPTION OF BUSINESS.............................................1
   ITEM 2. PROPERTIES..........................................................7
   ITEM 3. LEGAL PROCEEDINGS...................................................7
   ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY-HOLDERS.................7
   ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS............7
   ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION...........7
   ITEM 7. FINANCIAL STATEMENTS................................................8
   ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
           AND FINANCIAL DISCLOSURE............................................8

                                     PART II

   ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
           COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT...................9
   ITEM 10. EXECUTIVE COMPENSATION............................................10
   ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
           AND MANAGEMENT.....................................................10
   ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS....................11
   ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K..................................11



                                      - i -

<PAGE>

                                     PART I

CAUTION REGARDING FORWARD-LOOKING INFORMATION

     This  annual  report  contains  certain   forward-looking   statements  and
information relating to VeryBestoftheInternet.com, Inc. (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.

ITEM 1. DESCRIPTION OF BUSINESS

Overview

     Our sole  business  purpose is to be an on-line  Internet  website  ranking
service. We believe that given the sheer volume of sites available for consumers
to browse,  there exists a need for a service that will help consumers  identify
sites  that are most  useful  to them so as to  minimize  the time  expended  in
searching for the desired  information.  By accessing our Grade The Web website,
consumers can gain, at not cost to them,  valuable  information  and rankings on
many of the Internet's sites that fall under the categories that we will review.
On our website,  both our management and our website users will assign a "letter
grade"  to each  site  surveyed,  similar  to  grades  received  by many  school
students.  Grades  assigned by our  management  will be unbiased  assessments of
various aspects of the sites,  which may include the esthetics of the site, ease
of navigation,  and the sophistication of their technology. Our visitors will be
able to grade a particular  site based on the same  criteria as our  management,
but their grades will be reported on a different  part of the site.  We will not
receive any compensation for grading a particular site, nor will we generate any
revenue from the sale of  merchandise  off our site.  However,  graded sites may
advertise  on our site,  but the fact that they are paying to  advertise  on our
site will be  disclosed  on the part of the site that  evaluates  and grades the
site that has purchased the banner space.

     We have  identified  approximately  20 of the  most  useful  categories  of
Internet sites for the consumer. These categories include:

     Apparel       Toys & Games        Kids        Reference    Home Improvement
Health & Fitness      Jewelry     Entertainment     Religion        Education
     Travel            Pets      On-Line Trading   Community        Auctions
   Electronics         News           Sports       Real Estate        Food


     Within each category, we will have sub-categories that are more descriptive
of the listed sites.  For example,  there will be a category on apparel.  Within
such category there will be sub-categories such as women's clothing,  children's
clothing,  footwear, sports and formal wear. Then, within each sub-category,  we
will identify and profile at least five sites.  The profile will contain a short
description of each aspect of the site that is being  evaluated,  the grades for
each such category and a link to the site.

     As an  additional  feature,  our website users will be able to assign their
own grade to each of the listed sites.  These grades will be averaged and listed
as an additional  element to help our users further evaluate these sites.  Users


                                       -1-
<PAGE>

will also be encouraged to suggest sites for us to evaluate. Suggestions will be
sent to us via an  interactive  form that will allow  users to  request  that we
consider a site for grading. Consumers will therefore be able to easily identify
at least five sites that may contain materials of interest and will have an idea
as to quality of site,  in our  opinion,  before  having to  undertake  a timely
search involving the entry of key terms and the review of each site generated by
traditional search engines.

     We  intend  to solely  generate  revenues  from  Internet  advertisers  and
marketers  that  will pay a fee for  banner  advertising  and  direct  hyperlink
connections to their  websites.  Websites of our  advertisers  may appear in our
rankings,  but they will not receive any  special  consideration  because of the
fact that they advertise with us, nor will we disclose how much such  advertiser
is paying to  advertise on our site.  We intend to develop a homepage  user base
and  specific  targeting  capabilities  in order to offer  our  advertisers  and
marketers  customized,   targeted  advertising  solutions  designed  to  improve
advertisement  response  rates and reduce their cost of acquiring new customers.
All areas of the website that contain  banner ads will also contain  disclaimers
stating that the banner is being paid for by the advertiser and its inclusion is
not an endorsement by management of the advertised sites.

     We anticipate that the site will be operational by March 31, 2002.

Strategy

     Based on industry reports such as the eAdvertising  Report, we believe that
the amount of money spent on Internet  advertising  will increase in the future.
We therefore  believe that many businesses  desire to advertise and market their
products  or  services  online  so  as  to  supplement  or  replace  traditional
advertising and marketing.  Our objective is to generate revenue from businesses
seeking to take advantage of online direct  marketing as a way to maximize their
advertising expenditures.

     We intend to achieve  our  business  strategy  through  the  following  key
strategies, which we expect to implement over the next three to 12 months:

Establish and increase number of advertising and marketing clients

     We are seeking to establish a broad  advertising and marketing client base,
and to in turn  increase  such base by  establishing  and  growing the number of
Internet  users that view our  website.  To  accomplish  this,  we will focus on
developing  an  appealing  and  informative  website and we may develop a direct
sales force.

Establish and increase traffic and transactions

     Our strategy of rapidly establishing and increasing consumer traffic to our
website is focused on both new and repeat  visitors.  New visits are expected to
be driven primarily by online advertising programs and word-of-mouth referrals.

Develop and use technology to enhance website capabilities and visits

     Our website will encourage  consumers to frequently revisit. As part of our
effort to promote  repeat  visits,  we will develop  features that will make our
visitors' homepage experience faster and easier.

Technology and Infrastructure

     We  plan  to  develop  an  expandable,   secure  and  reliable   technology
infrastructure  to support our  website  ranking  service.  Our  technology  and
infrastructure  model  does not  require  us to expend  funds for  research  and
development,  nor have we incurred  any expenses  for such  functions  since our
inception.


                                       -2-
<PAGE>

Expandability

     Our  technology  will be  designed  to support  up to at least six  million
visitors  per  month.  We will have the  ability to  rapidly  increase  our user
capacity.

Security

     We plan to incorporate a variety of techniques meant to protect the privacy
of user information  transmitted to and from the site. The data center where our
system will be located provides security management 24 hours per day, seven days
per week.

Reliability

     Our software  system will use industry  standard  technologies  to maximize
reliability.  We will also use state of the art technologies to connect the site
to the Internet.  We will regularly back up our databases and other  information
to tapes which will retain our data for a long period of time.

     Our servers will be housed at a different  geographic  location  which will
have adequate security and back up power sources.  We will continually  evaluate
our technology and will secure updates if necessary.

Competition

     We believe  that  competition  in our website  business is based on factors
that include the following:

     >>   brand recognition;

     >>   ease and speed of use; and

     >>   quality and reliability.

Website competition

     We face intense  competition from both  traditional and online  advertising
and direct marketing companies. We compete directly and indirectly for marketers
and consumers  with  companies in various  categories,  including  Epinions.com,
Deja.com and  Productopia.com.  We are at a competitive  disadvantage with these
sites  because  they have  developed  consumer  loyalty  based on a  history  of
operations. We believe our site is different from our competition because of the
manner in which we  grade/evaluate  sites.  However,  unless  we can  adequately
market our site to consumers and consumers  agree with our  assessment as to how
sites should be graded,  our business plan will not be successful  when compared
to other sites that provide similar services.

Specialty lead-generation websites

     Various  websites focus on generating  leads for a specific  segment of the
direct  marketing  industry,  such as the catalog,  magazine or coupon segments.
While  these  websites  typically  provide  a depth of  offerings  within  their
specific  sector,  they may not  offer  promotions  across a broad  spectrum  of
product categories. These sites include eNews, Cataloglink and Catalogcity.


                                       -3-
<PAGE>

Other websites

     We also  compete  with a number of  "community"  sites that offer  content,
services or information  about a particular  topic, as well as other advertising
networks.

     The number of websites  competing  for consumer  attention  and  marketers'
dollars  has  proliferated,  and we expect  that  competition  will  continue to
intensify. We also compete with traditional media such as television,  radio and
print for a share of marketers' total marketing budgets.

     In addition to the above, we believe that the principal competitive factors
in our website markets are:

     >>   the volume of online visitors;

     >>   duration and frequency of visits;

     >>   the demographic profiles of visitors; and

     >>   performance of advertisements.

     Our website  competitors are larger and have greater  financial,  technical
and marketing  resources  than us, and no assurance can be given that we will be
able to successfully compete against these competitors.

Government Regulation

     Laws and regulations  that apply to Internet  communications,  commerce and
advertising are becoming more prevalent.  The adoption of such laws could create
uncertainty  in  Internet  usage and  reduce the  demand  for all  products  and
services  offered  on  the  Internet.  Recently,  Congress  enacted  legislation
regarding  children's  privacy on the Internet.  It is possible that  additional
laws and  regulations  may be proposed or adopted with respect to the  Internet,
covering  issues  such  as user  privacy,  taxation,  advertising,  intellectual
property  rights  and  information   security.   Several  states  have  proposed
legislation to limit the use of personal user information  gathered online or to
require online services to establish  privacy  policies.  We believe that we are
fully compliant with all state and federal privacy laws.

     The  Federal  Trade  Commission  recently  reported  that it has no present
intention of proposing legislation to address online privacy in the near future,
and that it believes self-regulation to be the best course of action, except for
rules enacted to implement the Children's  Online Privacy  Protection Act, which
governs  the   collection  of  personal   information   from  children  and  the
confidentiality  of such  information.  However,  the FTC has  initiated  action
against  at least one online  service  regarding  the  manner in which  personal
information  was collected from users and provided to third parties.  We believe
that we are fully compliant will all FTC privacy laws.

     We do not know how our business may be affected by the  application  to the
Internet  of  existing  laws  governing  issues  such  as  property   ownership,
copyrights,  encryption and other intellectual property issues, taxation, libel,
obscenity and export or import  matters.  Most of these laws were adopted before
the advent of the Internet and do not  contemplate  or address the unique issues
of the Internet and related  technologies.  Changes in laws  intended to address
such  issues  could  create  uncertainty  in  the  Internet  marketplace.   That
uncertainty  could  reduce  demand for our service or increase the cost of doing
business as a result of litigation costs or increased service delivery costs.


                                       -4-
<PAGE>

     In addition, because our services are available on the Internet in multiple
states and foreign  countries,  these states and countries may claim that we are
required  to qualify  to do  business  in their  jurisdictions.  Our  failure to
qualify in any jurisdictions  where we are required to do so could subject us to
taxes and penalties.  It could also restrict our ability to enforce contracts in
those  jurisdictions.  The application of laws or regulations from jurisdictions
whose laws do not currently apply to our business could have a material  adverse
effect on our business,  results of operations and financial  condition.  We are
currently not aware of any  violations by us of any laws or  regulations  of any
states or other countries or of any material failure to qualify in any states or
countries.

     The European Union has adopted a privacy directive that went into effect in
1998. Under this directive,  business entities domiciled in member states of the
EU are limited  with respect to the  transactions  in which they may engage with
business  entities  domiciled  outside the EU,  unless the non-EU  entities  are
domiciled  in  jurisdictions  with  privacy  laws  comparable  to the EU privacy
directive.  The United States  presently  does not have laws that satisfy the EU
privacy directive.  Discussions between representatives of the EU and the United
States are ongoing and may lead to a number of safe harbor  provisions which, if
adhered to,  would allow  business  entities in the EU and the United  States to
continue  doing  business  without  limitation.  If these  negotiations  are not
successful and the EU begins enforcing the privacy directive,  there could be an
adverse impact on international Internet business. If we do business directly in
the EU in the  future,  we  will be  required  to  comply  with  the EU  privacy
directive.

Intellectual Property

     We  regard  any  copyrights,  service  marks,  trademarks,  trade  secrets,
proprietary  technology and similar intellectual  property that we may obtain as
critical to our success,  and we intend to vigorously  protect our  intellectual
property  rights.  We have not registered any of our trademarks or service marks
and we currently do not hold any patents.  Effective  trademark,  service  mark,
copyright and trade secret  protection  may not be available in every country in
which our products and services are made available online.

     We have  registered  VeryBestoftheInternet.com  and Grade The  Web.com as a
domain name. Domain names generally are regulated by Internet regulatory bodies.
The regulation of domain names in the United States and in foreign  countries is
evolving.  Regulatory  bodies  could  establish  additional  top-level  domains,
appoint additional domain name registrars or modify the requirements for holding
domain names. The relationship  between  regulations  governing domain names and
laws protecting  trademarks and similar intellectual property rights is unclear.
Therefore,  we could be unable to prevent  third parties from  acquiring  domain
names that  infringe on or otherwise  decrease the value of our  trademarks  and
other  proprietary  rights.  We have no  knowledge  of any  companies  in  other
countries using domain names that infringe on our trademarks.

Employees

     As of December 31, 2001,  only our two officers and  directors  worked on a
part time basis for the Company.

Risk Factors

     Certain of the  statements  contained in this Annual  Report on Form 10-KSB
are forward  looking  statements  that  involve  risks and  uncertainties.  Such
statements  are subject to important  factors that could cause actual results to
differ materially, including the following risk factors:


                                       -5-
<PAGE>

Management  will be able to  exercise  control of our common  stock and may make
decisions that are not in the best interest of all shareholders.

     Our current management, including Danny Gunter, our chief executive officer
and  chairman of our board of  directors,  and  Adrienne  Beam,  our  president,
secretary and a member of our board of directors,  in the aggregate beneficially
own  approximately  93.1%  of  the  outstanding  shares  of  our  common  stock.
Accordingly,  management  is able to control the election of  directors  and all
other matters subject to shareholder  votes. This concentration of ownership may
have  the   effect  of   delaying   or   preventing   a  change  of  control  of
VeryBestoftheInternet.com,   even  if  this  change  of  control  would  benefit
shareholders.

If we cannot attract parties to purchase banner  advertisement  on our site, our
strategy will not be successful.

     Our business strategy involves  attracting and maintaining the loyalty of a
large  number of  visitors  to our  website  in order to  attract  new  Internet
advertisers  and  marketers,  which will be our only  source of  revenue.  If we
cannot  demonstrate  that our site is a beneficial  location for  advertisers to
acquire banner space, our business strategy will fail. Furthermore,  as we are a
start-up  company with no  operating  history and limited  financial  resources,
other websites that provide similar  services and that have an established  base
of users possess a  competitive  advantage in  attracting  advertisers  to their
site.

Our success could be jeopardized if key personnel leave.

     Our future  success  depends to a  significant  extent on the  efforts  and
abilities of our  management,  Danny  Gunter,  our chief  executive  officer and
chairman of the board of directors, and Adrienne Beam, our president,  secretary
and a member of our board of  directors.  The loss of the  services of either of
these individuals could harm our business. We may be unable to attract, motivate
and retain suitable replacements for these individuals or other key employees in
the future. Competition for employees in Internet-related businesses is intense,
and we may experience difficulty in hiring qualified personnel.


If the Internet is not accepted in the  marketplace as a viable vehicle  through
which  marketers can advertise  their  products and services,  our business plan
will not succeed.

     The  Internet  has  not  existed  long  enough  as a  marketing  medium  to
demonstrate  its  effectiveness   relative  to  traditional  marketing  methods.
Marketers that have historically relied on traditional  marketing methods may be
reluctant  or slow to adopt  Internet  marketing or may not devote the amount of
money to Internet  advertising that we expect. Many marketers have limited or no
experience using the Internet as a marketing medium. In addition, marketers that
have invested  substantial  resources in traditional methods of marketing may be
reluctant to reallocate these resources to Internet  marketing.  If marketers do
not desire to use the  Internet  and in  particular  our site as an  advertising
medium our business will not succeed.



Our business may be harmed if we fail to protect our domain names.

     We currently hold the Internet domain names  VeryBestoftheInternet.com  and
Grade The Web.com.  We may be unable to prevent  third  parties  from  acquiring
similar  domain  names,  which could reduce the value of our brand name and take
customers  away from our  website to such an extent  that  advertisers  will not
purchase banner advertisements on our site.

Privacy regulations of the Internet could hurt our business.

                                      -6-

<PAGE>

     If laws and  regulations are adopted that limit our ability to provide user
information to marketers,  such statutes will diminish the viability of our site
as an advertising medium for our target marketers,  which will in turn adversely
impact our business as well as not be able to readily sell banner space.

     Our independent auditors are of the opinion that there is substantial doubt
if we can continue business operations without additional capital.

     Our financial  statements,  found  elsewhere in this report,  were prepared
assuming that we will continue as a going concern.  Our independent  auditor, in
its report  regarding  our financial  statements,  expressed the fact that there
remains substantial doubt as to our ability to continue as a going concern.


ITEM 2. PROPERTIES

     We currently occupy  approximately  200 square feet in a leased facility in
Dallas,  Texas, with a monthly rental cost of approximately  $250 per month. The
lease for this facility is on a month-to-month basis.

ITEM 3. LEGAL PROCEEDINGS

     As of the date of this  Annual  Report,  the  Company is not a party to any
pending or threatened legal proceedings.

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

     No matters were  submitted to a vote of security  holders during the fiscal
year covered by this Annual Report.

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

     As of February 15, 2002, the Company had approximately 61 holders of record
of its Common Stock.  Outstanding  shares of the Company's  Common Stock totaled
9,823,400.  The Company's  transfer  agent is Securities  Transfer  Corporation,
Dallas, Texas.

     The Company  has made  application  with the NASD,  Inc. to have its common
stock become eligible for quotation on the OTC Bulletin Board. As of the date of
this report,  the Company's  application  was still under review by the staff of
the NASD, Inc. Trading of the Company's common stock will not commence until the
Company has received a clearance letter from the NASD, Inc.  authorizing trading
and a ticker symbol has been assigned.

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

Operations

     We are in the  development  stage and have not generated  revenues from our
inception to December 31, 2001 and have incurred  only  expenses  related to our
organization  and  professional  fees  for the  preparation  and  filing  of our
Registration  Statement on Form SB-2.  Accordingly,  our financial results, from
inception to December 31, 2001,  are not  meaningful  as an indication of future
operations.

     For the period from our incorporation on November 21, 2000 through December
31, 2001, our activities have been directed primarily to capital formation,  the
recruitment of a website developer and the  establishment of our  organizational
and technical  infrastructure.  Future expected significant costs related to our

                                      -7-

<PAGE>

operation will be the operation of the website,  data acquisition  costs,  human
resource costs and advertising and marketing costs.

Our liquidity and capital resources

     Since inception  through  December 31, 2001, our liquidity was derived from
our initial  capitalization  by our founders and a loan from a  stockholder.  On
January 29, 2002, we completed the sale of an aggregate of 103,400 shares of our
common stock for aggregate  proceeds of approximately  $51,700,  pursuant to the
terms of our self-underwritten public offering of securities.

     As of  December  31,  2001 we had  approximately  $47,451  in cash and cash
equivalents,  inclusive of in-transit deposits from the escrowed proceeds of our
public stock offering..

     From inception  through December 31,, 2001, we have incurred  negative cash
flows from operating activities.  We expect to experience losses from operations
and  negative  cash flow for the  foreseeable  future.  If our  revenues and our
spending  levels are not adjusted  accordingly,  we may not generate  sufficient
revenues to achieve profitability.  Even if we achieve profitability, we may not
sustain or increase  such  profitability  on a quarterly  or annual basis in the
future.   We  believe   the  net   proceeds   of  $51,700   received   from  our
self-underwritten  offering together with available funds, will be sufficient to
meet  our  anticipated  needs  for at  least  12  months.  We may  need to raise
additional funds in the future in order to fund more rapid expansion, to develop
new or enhanced services and to respond to competitive  pressures.  We cannot be
certain  that any  required  additional  financing  will be  available  on terms
favorable to us and we have not developed a plan for raising  additional capital
should it be  required.  If  additional  funds are raised by the issuance of our
equity securities,  then existing  shareholders may experience dilution of their
ownership  interest and such  securities  may have rights senior to those of the
then  existing  holders of common stock.  If additional  funds are raised by our
issuance of debt  instruments,  we may be subject to certain  limitations on our
operations.  If adequate  funds are not available or not available on acceptable
terms, we may be unable to fund our expansion, or develop or enhance services or
respond to competitive pressures.

     As a  result  of our  arrangement  with  InSite  Productions,  LLC  for the
development,  hosting and maintenance of our "Grade The Web" Website,  we do not
expect  to  make  any  significant  equipment  purchases  nor  do we  anticipate
incurring any research and development costs during the next twelve months.  Mr.
Gunter and Ms. Beam,  our  directors and officers,  are  affiliated  with InSite
Productions, LLC in various ownership, management and operating capacities.

     We do not believe that we would need to add any additional employees during
the next 12 months.

ITEM 7. FINANCIAL STATEMENTS

     The  required  items are  presented  as a separate  section of this  report
beginning on Page F-1.

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

     There have been no changes in  accountants  since  inception nor have there
been any disagreements  with accountants on any matter of accounting  principles
or practices, financial statement disclosure, or auditing scope or procedure.

                                      -8-
<PAGE>

                                    PART II

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

     The following table sets forth certain  information about the directors and
executive  officers of the  Company.  All  directors  of the Company hold office
until the next annual meeting of  stockholders  or until their  successors  have
been elected and qualified. Executive officers of the Company are elected by the
Board of Directors to hold office until their respective  successors are elected
and qualified.

Name                   Age           Position
-------------          ---           -------------------------------------------
Danny Gunter           24            Chief Executive Officer and Chairman of the
                                     Board of Directors
Adrienne Beam          31            President, Secretary and Director

     Danny  Gunter,  our chief  executive  officer and  chairman of our board of
directors,  has  over 5 years  of  experience  in  website  development  and has
developed  over 20 websites  during this  period.  He  currently  serves as lead
programmer and system  administrator of InSite  Productions,  LLC, a position he
has held since April 1999.  Prior to that time,  he served as website  developer
for DCT Internet.

     Adrienne  Beam,  our  president,  secretary  and  member  of our  board  of
directors,  currently serves as president and chief executive  officer of InSite
Productions, LLC. She earned a BBA at Texas Christian University in 1991 and her
career  experience  includes  marketing and promotions for CBS Records,  banking
operations at Texas  Commerce Bank and investor  relations for several  publicly
traded  companies.  In 1995,  Ms.  Beam was  responsible  for forming a start-up
website  development firm as a subsidiary of Digital  Communications  Technology
Corporation.  After  spending  three  years  serving  as the vice  president  of
Internet services for DCT, and the president of DCT-Internet, she founded InSite
in May 1998.

     Adrienne Beam, our president,  is also the president,  manager and a member
of InSite  Productions,  LLC. Danny Gunter, our chief executive officer, is lead
programmer for InSite  Productions,  LLC. InSite  Productions,  LLC is a website
development company located in Dallas,  Texas. It is anticipated that Mr. Gunter
and Ms. Beam will remain in their  positions with InSite  Productions,  LLC on a
full-time  basis,  while  devoting  approximately  15  hours  per  week  to  the
management and operation of  VeryBestoftheInternet.com.  However, if the maximum
offering is sold up to two additional full-time employees will be retained so as
to manage our day-to-day  operations and to solicit advertisers for our website.
If such  additional  personnel is added Mr. Gunter and Ms. Beam will likely only
devote approximately five hours per week to VeryBestoftheInternet.com.


Board of Directors and Committee Meetings Attendance

     During the fiscal  year ended  December  31,  2001,  the Board acted on two
occasions  by written  unanimous  consent of the Board of  Directors  in lieu of
meeting.  The Company does not have any committees.  The Company  currently does
not pay a director fee for attending scheduled and special meetings of the Board
of Directors. The Company pays expenses of all of the its directors in attending
meetings.

Compliance with Section 16(a) of the Exchange Act

     Section  16(a)  of the  Exchange  Act  requires  the  Company's  directors,
executive  officers  and persons  who own more than ten percent of a  registered
class of the  Company's  equity  securities  ("10%  holders"),  to file with the
Securities and Exchange  Commission (the "SEC") initial reports of ownership and
reports of changes in ownership of Common Stock and other equity  securities  of

                                      -9-
<PAGE>

the Company. Directors,  officers and 10% holders are required by SEC regulation
to furnish the Company  with copies of all of the  Section  16(a)  reports  they
file.

     Based  solely on a review of reports  furnished  to the  Company or written
representatives  from the Company's  directors and executive officers during the
fiscal year ended  December 31,  2001,  all Section  16(a)  filing  requirements
applicable  to its  directors,  officers  and 10%  holders  for such  year  were
complied with.

ITEM 10. EXECUTIVE COMPENSATION

     Executive  management and oversight services are provided to the Company by
Mr.  Gunter and Ms.  Beam on an "as  necessary"  basis  given the  developmental
nature  of the  Company.  These  two  individuals  have an  informal,  unwritten
agreement with the Company whereby they are  contributing  their services to the
Company at an agreed-upon annual salary of $6,000 each. This amount is reflected
in  the  accompanying  financial  statements  as  compensation  expense  and  as
additional contributed capital.

Director Compensation

     The Company does not currently  pay a director fee for attending  scheduled
and special meetings of the Board of Directors. The Company pays the expenses of
all of its directors in attending board meetings.

Indebtedness of Directors and Senior Officers

     None of the  directors  or  officers  of the  Company  or their  respective
associates or affiliates is indebted to the Company.

Committees of the Board of Directors and Meeting Attendance

     There  are no  audit,  compensation  or other  committees  of the  Board of
Directors of the Company.

Family Relationships

     There  are  no  family  relationships  among  the  Company's  directors  or
officers.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     The following table sets forth certain  information as of February 15, 2002
relating  to the  beneficial  ownership  of shares  of Common  Stock by (i) each
person who owns  beneficially  more than 5% of the outstanding  shares of Common
Stock,  (ii) each director of the Company,  (iii) each executive  officer of the
Company,  and (iv) all  executive  officers  and  directors  of the Company as a
group.

     Except as  otherwise  indicated,  all shares are  beneficially  owned,  and
investment and voting power is held by, the persons named as owners.

                                             Shares             Percentage of
                                          Beneficially       Shares Beneficially
          Name(1)                            Owned                  Owned
          -------                            -----                  -----
Danny Gunter                               9,100,000                92.6%
Adrienne Beam                                 40,000                  *
All Executive Officers and
Directors as a group(two persons)          9,140,000                93.0%

*Indicates an ownership of less than 1%.
(1) The address of each  beneficial  owner is c/o the  company at 1950  Stemmons
Freeway, Suite 4048 Dallas, Texas 75207.

                                      -10-
<PAGE>

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     We have  entered  into an agreement  with InSite  Productions,  LLC whereby
Insight will develop our website for $33,620. We also rent our office space from
Insight.  Danny Gunter and Adrienne Beam are  principals in InSite  Productions,
LLC. We pay $250 per month in rent to InSite Productions, LLC and $200 per month
for their website maintenance services.


ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K

(a)  Financial Statements and Exhibits

1.   Financial  Statements.  The following financial statements are submitted as
     part of this report:
                                                                            Page
                                                                            ----

     Report of Independent Certified Public Accountants                      F-2
     Balance Sheets as of December 31, 2001 and 2000                         F-3
     Statements of Operations -
       for the year ended December 31, 2001
       for the period from November 21, 2000 (date of incorporation)
              through December 31, 2000 and
       for the period from November 21, 2000 (date of incorporation)
              through December 31, 2001                                      F-5
     Statements of Changes in Shareholders' Equity -
       for the period from November 21, 2000 (date of incorporation)
              through December 31, 2001
     Statement of Cash Flows -
       for the year ended December 31, 2001
       for the period from November 21, 2000 (date of incorporation)
              through December 31, 2000 and
       for the period from November 21, 2000 (date of incorporation)
              through December 31, 2001                                      F-7
     Notes to Financial Statements                                           F-8

2.   Exhibits

     Exhibit Number                            Description
     --------------        -----------------------------------------------------

         3.1               Articles of Incorporation of the Registrant.*
         3.2               Bylaws of the Registrant.*
         4.1               Specimen Common Stock Certificate.*
         10.1              Website Development Agreement dated as of February 1,
                           2001  by  and  between  the   Registrant  and  InSite
                           Productions, LLC.*
         10.2              Lease  Agreement  dated  February 1, 2001 between the
                           Registrant and InSite Productions, LLC.**

*    Incorporated by reference to the Company's  Registration  Statement on Form
     SB-2, as amended, as filed on February 26, 2001.

                                      -11-

<PAGE>

**   Incorporated by reference to the Company's  Registration  Statement on Form
     SB-2, as amended, as filed on April 12, 2001.

(b)  Reports on Form 8-K.

     No current reports on Form 8-K were filed by the Company during
the last quarter of the period covered by this Annual Report.



                                      -12-

<PAGE>

                                   SIGNATURES

     In accordance with Section 13 and 15(d) of the Exchange Act, the Registrant
has caused this report to be signed on its behalf by the undersigned,  thereunto
duly authorized, on the 19th day of February, 2002.

                             VERYBESTOFTHEINTERNET.COM, INC.


                             By:  /s/ Danny Gunter
                                -----------------------------------------------
                                Danny Gunter, Chairman, Chief Executive Officer,
                                Chief Financial Officer and Director

     Pursuant to the  requirements  of the  Exchange  Act,  this report has been
signed  below  by the  following  persons  in the  capacities  and on the  dates
indicated:

      Signature                           Title                        Date

 /s/ Danny Gunter     Chairman,   Chief  Executive  Officer,   February 19, 2002
------------------    Chief Financial Officer and Director
Danny Gunter

 /s/ Adrienne Beam    President and Secretary                  February 19, 2002
------------------
Adrienne Beam

<PAGE>

                         VERYBESTOFTHEINTERNET.COM, INC.

                                    CONTENTS


                                                                            Page
                                                                            ----

Report of Independent Certified Public Accountants                           F-2

Financial Statements

   Balance Sheets
     as of December 31, 2001 and 2000                                        F-3

   Statements of Operations
     for the year ended December 31, 2001,
     for the period from November 21, 2000 (date of
       incorporation) through December 31, 2000 and
     for the period from November 21, 2000 (date of
       incorporation) through December 31, 2001                              F-4

   Statement of Changes in Shareholders' Equity
     for the period from November 21, 2000 (date of
       incorporation) through December 31, 2001                              F-5

   Statements of Cash Flows
     for the year ended December 31, 2001,
     for the period from November 21, 2000 (date of
       incorporation) through December 31, 2000 and
     for the period from November 21, 2000 (date of
       incorporation) through December 31, 2001                              F-6

   Notes to Financial Statements                                             F-7




                                                                             F-1

<PAGE>


S. W. HATFIELD, CPA
certified public accountants

Member:    Texas Society of Certified Public Accountants
           Press Club of Dallas



               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS


Board of Directors and Shareholders
VeryBestoftheInternet.com, Inc.

We have audited the  accompanying  balance sheets of  VeryBestoftheInternet.com,
Inc. (a Texas  corporation  and a development  stage company) as of December 31,
2001 and 2000 and the related statements of operations and comprehensive income,
changes in  shareholders'  equity and cash flows for the year ended December 31,
2001, the period from November 21, 2000 (date of incorporation) through December
31,  2000 and for the period  from  November  21,  2000 (date of  incorporation)
through  December 31, 2001,  respectively.  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 audits.

We conducted our audits 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  audits  provide  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 VeryBestoftheInternet.com, Inc.
as of  December  31, 2001 and 2000 and the  results of its  operations  and cash
flows for the year ended  December 31, 2001,  the period from  November 21, 2000
(date of  incorporation)  through  December  31,  2000 and for the  period  from
November  21,  2000  (date  of   incorporation)   through   December  31,  2001,
respectively,  in  conformity  with  generally  accepted  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 A to the
financial statements, the Company is in the organization and start-up phase. The
Company is primarily dependent upon its initial  capitalization and the proceeds
of an initial  public  offering of the  Company's  equity  securities to provide
working  capital.  This situation  raise  substantial  doubt about the Company's
ability to continue as a going concern.  The financial statements do not contain
any adjustments that might result from the outcome of these uncertainties.



                                                S. W. HATFIELD, CPA
Dallas, Texas
February 9, 2002


                      Use our past to assist your future sm
(secure mailing address)                   (overnight delivery/shipping address)
P. O. Box 820395                               9002 Green Oaks Circle, 2nd Floor
Dallas, Texas  75382-0395                               Dallas, Texas 75243-7212
214-342-9635 (voice)                                          (fax) 214-342-9601
800-244-0639                                                      SWHCPA@aol.com
                                       F-2

<PAGE>
<TABLE>
<CAPTION>



                         VERYBESTOFTHEINTERNET.COM, INC.
                        (a development stage enterprise)
                                 BALANCE SHEETS
                           December 31, 2001 and 2000


                                                          December 31,    December 31,
                                                               2001            2000
                                                          ------------    ------------
<S>                                                       <C>             <C>
                                     ASSETS
                                     ------
Current assets
   Cash on hand and in bank                               $     47,451    $        972
                                                          ------------    ------------

       Total current assets                                     47,451             972
                                                          ------------    ------------

Total Assets                                              $     47,451    $        972
                                                          ============    ============



                      LIABILITIES AND STOCKHOLDERS' EQUITY
                      ------------------------------------

Current liabilities
   Accounts payable - trade                               $      5,931    $       --
   Working capital loan                                          4,000            --
   Due to shareholder                                            3,448            --
   Accrued interest payable                                        134            --
                                                          ------------    ------------

     Total current liabilities                                  13,513            --
                                                          ------------    ------------


Commitments and contingencies


Stockholders' equity
   Preferred stock - $0.0001 par value
     10,000,000 shares authorized
     None issued and outstanding                                  --              --
   Common stock - $0.0001 par value
     40,000,000 shares authorized
     9,823,400 and 9,720,000 shares
       issued and outstanding, respectively                        982             972
   Additional paid-in capital                                   64,690           1,000
   Deficit accumulated during the development stage            (26,584)         (1,000)
                                                          ------------    ------------
                                                                39,088             972
   Stock subscription receivable                                (5,150)           --
                                                          ------------    ------------

     Total stockholders' equity                                 33,938             972
                                                          ------------    ------------

Total Liabilities and Stockholders' Equity                $     47,451    $        972
                                                          ============    ============
</TABLE>



The accompanying notes are an integral part of these financial statements.
                                                                             F-3

<PAGE>
<TABLE>
<CAPTION>



                         VERYBESTOFTHEINTERNET.COM, INC.
                        (a development stage enterprise)
                STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
                          Year ended December 31, 2001,
              Period from November 21, 2000 (date of incorporation)
                          through December 31, 2000 and
 Period from November 21, 2000 (date of incorporation) through December 31, 2001



                                                                    Period from             Period from
                                                                 November 21, 2000       November 21, 2000
                                                             (date of incorporation)  (date of incorporation)
                                            Year ended                through                 through
                                         December 31, 2001       December 31, 2000       December 31, 2001
                                         -----------------       -----------------       -----------------
<S>                                      <C>                     <C>                     <C>

Revenues                                 $            --         $            --         $            --

Cost of Sales                                         --                      --                      --
                                         -----------------       -----------------       -----------------

Gross Profit                                          --                      --                      --
                                         -----------------       -----------------       -----------------

Operating expenses
   Organizational and start-up costs                  --                     1,000                   1,000
   Officer compensation                             12,000                    --                    12,000
   Legal and professional fees                       8,829                    --                     8,829
   General and administrative expenses               4,621                    --                     4,621
   Interest expense                                    134                    --                       134
                                         -----------------       -----------------       -----------------
     Total operating expenses                       25,584                   1,000                  26,584
                                         -----------------       -----------------       -----------------

Loss from operations and
   before provision for income taxes               (25,584)                 (1,000)                (26,584)

Provision for income taxes                            --                      --                      --
                                         -----------------       -----------------       -----------------

Net Loss                                           (25,584)                 (1,000)                (26,584)

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

Comprehensive Loss                       $         (25,584)      $          (1,000)      $         (26,584)
                                         =================       =================       =================

Loss per weighted-average share
   of common stock outstanding,
   computed on net loss -
   basic and fully diluted                             nil                     nil                     nil
                                         =================       =================       =================

Weighted-average number of
   common shares outstanding                     9,724,460               9,720,000               9,724,020
                                         =================       =================       =================
</TABLE>



The accompanying notes are an integral part of these financial statements.
                                                                             F-4

<PAGE>
<TABLE>
<CAPTION>



                         VERYBESTOFTHEINTERNET.COM, INC.
                        (a development stage enterprise)
                             STATEMENT OF CHANGES IN
               SHAREHOLDERS' EQUITY Period from November 21, 2000
                (date of incorporation) through December 31, 2001



                                        Common Stock          Additional                       Stock
                                        ------------           paid-in      Accumulated     subscription
                                  Shares         Amount        capital        deficit        receivable        Total
                               ------------   ------------   ------------   ------------    ------------    ------------
<S>                            <C>            <C>            <C>            <C>             <C>             <C>
Common stock issued
   at initial capitalization      9,720,000   $        972   $       --     $       --      $       --      $        972

Capital contributed to
   support operations                  --             --            1,000           --              --             1,000

Net loss for the period                --             --             --           (1,000)           --            (1,000)
                               ------------   ------------   ------------   ------------    ------------    ------------

Balances at
   December 31, 2000              9,720,000            972          1,000         (1,000)           --               972

Proceeds from sale
   of common stock                  103,400             10         51,690           --            (5,150)         46,550

Capital contributed by
   officers in the form
   of executive compensation           --             --           12,000           --            12,000

Net loss for the year                  --             --             --          (25,584)           --           (25,584)
                               ------------   ------------   ------------   ------------    ------------    ------------

Balances at
   December 31, 2001              9,823,400   $        982   $     64,690   $    (26,584)   $     (5,150)   $     33,938
                               ============   ============   ============   ============    ============    ============
</TABLE>






The accompanying notes are an integral part of these financial statements.
                                                                             F-5

<PAGE>
<TABLE>
<CAPTION>



                         VERYBESTOFTHEINTERNET.COM, INC.
                        (a development stage enterprise)
                            STATEMENTS OF CASH FLOWS
                          Year ended December 31, 2001,
              Period from November 21, 2000 (date of incorporation)
               through December 31, 2000 and Period from November
              21, 2000 (date of incorporation) through December 31, 2001



                                                                          Period from             Period from
                                                                       November 21, 2000       November 21, 2000
                                                                    (date of incorporation) (date of incorporation)
                                                   Year ended               through                 through
                                               December 31, 2001       December 31, 2000       December 31, 2001
                                               -----------------       -----------------       -----------------
<S>                                            <C>                     <C>                     <C>
Cash flows from operating activities
   Net loss for the period                     $         (25,584)      $          (1,000)      $         (26,584)
   Adjustments to reconcile net loss to net
     cash provided by operating activities
       Depreciation and amortization                        --                      --                      --
       Compensation expense contributed                   12,000                    --                    12,000
       Increase in
         Accounts payable                                  5,931                    --                     5,931
         Accrued interest payable                            134                    --                       134
                                               -----------------       -----------------       -----------------

Net cash used in operating activities                     (7,519)                 (1,000)                 (8,519)
                                               -----------------       -----------------       -----------------


Cash flows from investing activities                        --                      --                      --
                                               -----------------       -----------------       -----------------


Cash flows from financing activities
   Proceeds from working capital loan                      4,000                    --                     4,000
   Cash advanced by shareholder
     to support operations                                 3,448                    --                     3,448
   Proceeds from sale of common stock                     46,550                     972                  47,522
   Capital contributed to support operations                --                     1,000                   1,000
                                               -----------------       -----------------       -----------------

Net cash provided by financing activities                 53,998                   1,972                  55,970
                                               -----------------       -----------------       -----------------

Increase in Cash                                          46,479                     972                  47,451

Cash at beginning of period                                  972                    --                      --
                                               -----------------       -----------------       -----------------

Cash at end of period                          $          47,451       $             972       $          47,451
                                               =================       =================       =================

Supplemental disclosure of
   interest and income taxes paid
   Interest paid for the period                $            --         $            --         $            --
                                               =================       =================       =================
   Income taxes paid for the period            $            --         $            --         $            --
                                               =================       =================       =================

</TABLE>



The accompanying notes are an integral part of these financial statements.
                                                                             F-6

<PAGE>

                         VERYBESTOFTHEINTERNET.COM, INC.
                        (a development stage enterprise)

                          NOTES TO FINANCIAL STATEMENTS


Note A - Organization and Description of Business

VeryBestoftheInternet.com,  Inc. (Company) was incorporated on November 21, 2000
under the laws of the State of Texas.  The  Company  was formed to be an on-line
Internet website ranking service.

The  Company  uses a year-end  of  December  31 and uses the  accrual  method of
accounting.

The Company's majority shareholders and/or its officers continue to maintain the
corporate  status of the Company and provide all nominal working capital support
on the Company's behalf.  Because of the Company's lack of operating assets, its
continuance  is fully  dependent  upon  the  majority  shareholder's  continuing
support.  The  majority  shareholders  intend to continue the funding of nominal
necessary expenses to sustain the corporate entity.

The Company is considered in the  development  stage and, as such, has generated
no significant  operating revenues and has incurred cumulative  operating losses
of approximately $26,500.

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.


Note B - Summary of Significant Accounting Policies

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

     For  Statement of Cash Flows  purposes,  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.   Organization costs
     ------------------

     The Company has adopted the provisions of AICPA Statement of Position 98-5,
     "Reporting on the Costs of Start-Up  Activities"  whereby all  organization
     and   initial   costs   incurred   with  the   incorporation   and  initial
     capitalization of the Company were charged to operations as incurred.

3.   Income Taxes
     ------------

     The Company uses the asset and liability  method of  accounting  for income
     taxes.  At December  31,  2001,  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.



                                                                             F-7

<PAGE>

                         VERYBESTOFTHEINTERNET.COM, INC.
                        (a development stage enterprise)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED


Note B - Summary of Significant Accounting Policies - Continued

3.   Income Taxes - continued
     ------------------------

     As of December 31, 2001 and 2000,  the  deferred  tax asset  related to the
     Company's net  operating  loss  carryforward  is fully  reserved.  If these
     carryforwards are not utilized, they will begin to expire in 2020.

4.   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 December 31, 2001 and 2000, the Company
     had no warrants and/or options outstanding.

Note C - 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 D - Working Capital Loan

On June 30, 2001, a minority  shareholder  loaned the Company  $4,000 to support
operations. The note is due at the later of a) July 3, 2002 or b) the closing of
an initial public  offering of the Company's  securities.  The note is unsecured
and,  at the option of the  holder,  may be repaid in  restricted,  unregistered
common stock of the Company at a conversion rate of $0.50 per share.

Note E - Income Taxes

The  components of income tax (benefit)  expense for the year ended December 31,
2001 and 2000, respectively, are as follows:

                                                     December 31,   December 31,
                                                          2001           2000
                                                     ------------   ------------
     Federal:
       Current                                       $       --     $       --
       Deferred                                              --             --
                                                     ------------   ------------
                                                             --             --
                                                     ------------   ------------
     State:
       Current                                               --             --
       Deferred                                              --             --
                                                     ------------   ------------
                                                             --             --
                                                     ------------   ------------

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

                                                                             F-8

<PAGE>
<TABLE>
<CAPTION>

                         VERYBESTOFTHEINTERNET.COM, INC.
                        (a development stage enterprise)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED


Note E - Income Taxes - Continued

As of December 31, 2001,  the Company has a net operating loss  carryforward  of
approximately  $16,500  to offset  future  taxable  income.  Subject  to current
regulations,  this  carryforward  will  begin to expire in 2020.  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 year ended  December  31,  2001,  the
period from November 21, 2000 (date of incorporation)  through December 31, 2000
and the period from November 21, 2000 (date of  incorporation)  through December
31, 2001, respectively, are as follows:

                                                                 Period from             Period from
                                                              November 21, 2000       November 21, 2000
                                                           (date of incorporation) (date of incorporation)
                                          Year ended               through                 through
                                      December 31, 2001       December 31, 2000       December 31, 2001
                                      -----------------       -----------------       -----------------
<S>                                   <C>                     <C>                     <C>
Statutory rate applied to
    income before income taxes        $          (8,700)      $            (340)      $          (9,100)
Increase (decrease) in income
   taxes resulting from:
     State income taxes                            --                      --                      --
     Other, including reserve for
       deferred tax asset and
       application of net operating
       loss carryforward                         (8,700)                    340                   9,100
                                      -----------------       -----------------       -----------------

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

</TABLE>


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                                                                             F-9

<PAGE>


                         VERYBESTOFTHEINTERNET.COM, INC.
                        (a development stage enterprise)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED


Note E - Income Taxes - continued

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 December 31, 2001 and 2000, respectively:

                                          December 31,    December 31,
                                               2001            2000
                                          ------------    ------------
     Deferred tax assets
       Net operating loss carryforwards   $      9,000     $       340
       Less valuation allowance                 (9,000)           (340)
                                          ------------    ------------

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

During the year ended  December  31, 2001 and for the period from  November  21,
2000 (date of  incorporation)  through  December 31,  2000,  the reserve for the
deferred  current  tax  asset  increased  by  approximately   $8,660  and  $340,
respectively.


Note F - Equity Transactions

At its November 21, 2000 capitalization, the Company sold an aggregate 9,720,000
shares of restricted,  unregistered common stock to its initial shareholders for
gross proceeds of approximately $972.

On December 31, 2001, the Company  completed the sale of an aggregate of 103,100
shares of its common stock for aggregate proceeds of approximately  $51,700,  in
satisfaction  of the  minimum  offering  requirement  of its self-  underwritten
public offering of securities,  pursuant to a Form SB-2  Registration  Statement
Under The Securities Act of 1933. Offering proceeds were released from escrow in
January 2002  pursuant to the terms of the offering as detailed in the Company's
prospectus  dated October 2, 2001. On January 29, 2002,  the Company  closed its
self- underwritten public offering of securities.


Note G - Officer Compensation

Executive  management and oversight  services are provided to the Company by two
controlling  shareholders/officers.  These  two  individuals  have an  informal,
unwritten agreement with the Company whereby they will provide their services to
the Company at an annual salary of $6,000 each.  This amount is  contributed  as
additional capital to the Company.


Note H - Related Party Commitment

The Company has entered into an agreement with InSite  Productions,  LLC whereby
InSite will develop the Company's website for approximately  $33,620. In January
2002,  the Company paid  approximately  $20,017 under the  agreement  toward the
completion  of the  website.  The  Company's  officers  and  directors  are also
officers and directors of InSite

                                                                            F-10