UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   Form 10-KSB

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

                  For the fiscal year ending February 28, 2001

[ ]      TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934

               For the Transition Period from _______ to ________

                            Commercial Concepts, Inc.
                            -------------------------
                 (Name of Small Business Issuer In Its Charter)

                  Utah                                        87-0409620
                  ----                                        ----------
     (State or Other Jurisdiction of                       (I.R.S. Employer
     Incorporation or Organization)                       Identification No.)

       324 S. 400 W. Suite B, Salt Lake City, Utah               84101
       -------------------------------------------               -----
         (Address of Principal Executive Offices)             (Zip Code)

                                 (801) 328-0540
                                 --------------
                           (Issuer's Telephone Number)

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

         Title of each Class                     Name of Each Exchange on Which
         to be so Registered                     Each Class is to be Registered
         -------------------                     -------------------------------
                                      None

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

                     Common Stock, par value $.001 per share
                                (Title of Class)

         Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
Registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days.    Yes [X]      No [ ]

<PAGE>

         Indicate by check mark if disclosure of delinquent  filers  pursuant to
Item 405 of Regulation S-B is not contained  herein,  and will not be contained,
to the best of the  registrant's  knowledge,  in definitive proxy or information
statements  incorporated  by  reference  in Part III of this Form  10-KSB or any
amendments to this Form 10-KSB. [ ]

         Registrant's revenues for the most recent fiscal year were $ 70,104.

         The aggregate  market value of the voting stock held by  non-affiliates
of the  Registrant  as of May 15,  2001  was $  3,001,875.  As of May  15,  2001
Registrant had 28,482,589 outstanding shares of Common Stock.

                       DOCUMENTS INCORPORATED BY REFERENCE

         Portions of the Annual Report to Shareholders for the fiscal year ended
February 28, 2001 and notes attached  thereto are incorporated by reference into
Part II hereof.

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

                                       2
<PAGE>

ITEM 1.  DESCRIPTION OF BUSINESS

History and Development of Commercial Concepts

         We were incorporated in the State of Utah on March 1, 1984 to engage in
the milling and recovery of precious minerals. In November 1997, our last mining
asset, an option to acquire mining property,  expired.  As a result,  we changed
our  business  focus by  acquiring  the  rights  to  certain  software  products
developed to fix computer date  recognition  problems  associated  with the year
2000. We acquired computer equipment and hired software developers to refine and
further  develop the  program.  The software  tests the internal  clock found in
personal  computers each time the clock is turned on to determine if the date is
correct.  We hold a  registered  copyright  for  this  software  which  we began
marketing in April 1998. Because of our late entry into the market, lack of name
recognition and a limited marketing network,  our sales of the Y2K software were
insignificant and with the advent of the year 2000 have been discontinued.

         The computer  equipment  acquired and software  developers  we hired to
develop  the Y2K  software  provided  the  means  for us to  become  a  software
development  and technology  company.  Building on this  foundation,  Commercial
Concepts hired a new President and Chief Executive  Officer in March 1999, a new
Executive  Vice  President  in July 1999 and a new Chief  Financial  Officer  in
February  2000.  In  June  1999,  we  acquired  100%  of  the  stock  of  Advice
Productions,  Inc., a graphic design company  specializing  in customized  video
marketing and training tools. From this acquisition,  we acquired certain assets
that enable us to create customized compact discs. The acquisition, however, did
not provide all the benefits we anticipated. As a result, effective February 29,
2000 we dissolved Advice Productions and conveyed certain assets to the previous
owners of Advice  Productions in return for  reconveyance  to us of a portion of
the shares of stock that we paid to these owners in June 1999.

Products and Services

         Our primary focus is on the development of proprietary "platforms" that
serve as a base for subsequent development of "canned" software programs.  Until
recently our primary  source of revenue came from the  development of customized
software and products for clients.  Our programmers  develop customized software
programs to meet specific  needs such as data entry and  retrieval,  multi media
and internet-based  information  dissemination.  We generally retain all rights,
title and  interest in the  customized  software we  develop,  including  source
codes,  with the expectation that we may revise and improve such programs so the
programs  can be  "canned"  and  sold  to  other  customers.  We  are  currently
developing several proprietary software products. Certain of these products will
be introduced into the general marketplace beginning in early 2001.

         No funds were spent by Commercial  Concepts on research and development
during the fiscal  year  ended  February  28,  1999.  For the fiscal  year ended
February  29,  2000,  we  spent  approximately  $579,000  on  the  research  and
development of new

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<PAGE>

proprietary software products. Of this amount, $543,000 was expended on research
and development of the Company's  PictureBase(C)  and  Wavescreens(C)  products,
offset in part by a $12,000 grant to help finance development of PictureBase(C).
No research and development  expenditures incurred in fiscal years 1999 and 2000
have been capitalized.

         At the  beginning  of fiscal  year 2001 we  commenced  testing  of both
PictureBase(C)  and Wave  Screens(C).  Through nine months  ending  November 30,
2000,  $540,700 was capitalized in fiscal 2001. The amount capitalized  reflects
all associated costs to develop and improve the software  products during active
beta testing.  Testing for PictureBase(C)  concluded in November, 2000. The beta
testing for Wave Screens(C) showed that extensive  reprogramming was required to
permit  operation on a wide variety of operating  systems and hardware,  causing
substantial delays and subsequent expenditures.

Imaging Software

         We  contracted  with  Intermountain  Health  Care  to  develop  imaging
software  to capture  medical  images  generated  by  equipment  used in medical
procedures  such as ultra  sound,  catheter  cameras,  MRIs and CAT  scans.  The
software is designed to store images generated during medical procedures in real
time on a computer  network  that can be linked to the  internet.  The  software
permits  physicians and  administrators to access and annotate the images during
or after the  procedure  from any computer on the  network.  We believe that the
market for medical applications of PictureBase(C) includes hospitals and clinics
worldwide where surgical or otherwise invasive medical procedures are performed.
Due to the breadth and variety of the potential market for PictureBase(C), we do
not expect to be dependent on any one customer or small group of customers.

         IHC  paid  Commercial  Concepts  a  $12,000  fee to  help  finance  the
development,  in exchange for up to 30 operating  room  licenses.  We retain all
rights,  title and interest to the PictureBase(C)  software and its source code.
We have filed a patent application that is pending to protect the source code.

         Beta testing at IHC's Cottonwood  Hospital  commenced in March 2000 and
was  successfully  completed in May 2000.  As a result,  IHC is  exercising  its
option for 30 Commercial Concepts Picture Base operating room licenses.  In June
2000,  IHC  entered  into a  five-year  agreement  with  Commercial  Concepts to
purchase up to an additional 300 units of  PictureBase(C)  at a discounted price
per unit.  IHC will also  receive  free  upgrades to  PictureBase(C)  during the
five-year period. In exchange,  Commercial Concepts will continue to have access
to IHC facilities for ongoing research and development of PictureBase(C).

         Commercial  Concepts  expects to market and  distribute  PictureBase(C)
through specialized medical  distribution  channels.  We are in discussions with
representatives  of medical  distributors  but no definitive  agreement has been
reached at this time. Until such distribution channels are established,  we will
market PictureBase(C) directly to hospitals.

                                       4
<PAGE>

         PictureBase(C)  1.0 is the version currently being marketed.  We intend
to maintain an ongoing program of research and development to constantly improve
and enhance  this  product's  functionality  and  marketability.  PictureBase(C)
version 1.5 is being  developed  and will include  video  streaming and improved
data  compression  technology.  Additional  improvements are expected with later
versions.

         We  perform   ongoing   research  to  identify  and  analyze   possible
competition  for  PictureBase(C).  Commercial  Concepts has  identified  certain
products  that  have  similarities  to  PictureBase(C)  and  may  be  considered
competition.  However, our research has found no competing products with what we
believe is a material technical advantage compared to PictureBase(C).  Competing
products  that  have  been  identified  appear  to us to be  substantially  more
expensive to own and/or operate than PictureBase(C).  Based on our research,  we
are  confident  that   PictureBase(C)   is  competitive   both  technically  and
economically within the current marketplace.

         PictureBase(C) is a non-invasive product used to assist and improve the
compilation,  storage  and  dissemination  of  medical  data.  Because it has no
diagnostic or treatment  capabilities,  no Food and Drug Administration approval
is required for the installation and operation of PictureBase(C) in its intended
medical   environment.   Commercial  Concepts  is  aware  that  certain  medical
distributors  require  that all  products  carried by that  distributor  must be
documented as FDA compliant,  even though FDA compliance may not be required for
a particular  application.  As a result, we believe that proper documentation of
FDA  compliance  will  enhance  the  marketability  of  PictureBase(C).  We  are
currently  investigating  the  process  required  to  attain  and  document  FDA
compliance.

Screen Saver Technology

         We have developed technology for an interactive  screen-saver for which
a patent is pending. This screen saver software  "Wavescreens(C)" is interactive
using our "Push-Pull" technology.  Wavescreens(C) permits network administrators
of host  organizations  to place any image or text they  choose on the  computer
screen and to change or update the images as often as they  desire.  This is the
"push"  portion of our  technology.  At all times the  installed  Wavescreens(C)
monitors when it appears on its host screen.  When  Wavescreens(C) is activated,
two  advertisements  are  located  at  the  top of  the  screen.  Wavescreens(C)
maintains a log of when the screen saver viewer places a cursor on the exhibited
advertisements  and/or clicks on an ad for detailed  information or the hot link
to the  advertiser's  website.  Each time the  individual  screen  saver's  host
computer is connected to the internet,  Wavescreens(C)  uploads this accumulated
data to our server. This represents the "pull" portion of our technology.

         We believe  that there are several  uses for  Wavescreens(C).  Schools,
colleges  and other  organizations  can use  Wavescreens(C)  to raise funds from
advertising as well as to disseminate information. Parents of schoolchildren can
increase their awareness of school  activities by downloading the screensaver on
their home or office  computer  systems.  Second,  businesses can use the screen
saver to  disseminate  information  and

                                       5
<PAGE>

control what employees  have on their computer  screens when they are not in use
since the program records when the screen saver appears.

         Commercial  Concepts expects to generate  revenues from advertising and
placement  commissions.  The primary  revenue  source will be  advertising.  The
Wavescreens(C)  that appear on each host  network  screen will have two boxes at
the top of the screen reserved for  advertising.  The revenues from one box will
accrue to the host  network and the  revenue  from the second box will accrue to
Commercial Concepts. It is expected that each individual host for Wavescreens(C)
will find their own paying  advertisers for the advertising box allocated to the
host.  In  situations  where  the host is  unwilling  or  unable to find its own
advertisements,  we will  place  advertisements  on behalf  of the host,  at the
host's written request, in exchange for a 20% advertising placement commission.

         Based on our initial market research, advertisers are paying up to $.01
per impression per day for internet banner advertisements.  We believe, although
we have only conducted limited research, that advertisers will pay at least $.01
per day per screen  for  Wavescreen(C)  advertising,  plus  additional  fees for
documented  "hits" to the  advertiser's  website and/or  discount  offers.  Each
Wavescreen(C) will have 90 5-second advertising slots for each of the two screen
advertising boxes, which will rotate in a loop continuously  through the day. If
the  advertising  slots are completely  sold, we expect to have gross revenue of
approximately  $1.00 per day per operating screen,  which represents the revenue
from the advertising box allocated to us.

         We believe  that  public and private  schools as well as  colleges  and
universities are primary customers for Wavescreens(C).  Nationwide, many schools
would like to increase their computer-to-student  ratio.  Unfortunately,  budget
constraints  frequently  prevent  schools from acquiring the desired  computers.
Installation of Wavescreens(C) combined with sale of the host school's available
advertising  slots could provide the funding for new computers,  if desired,  as
well as other uses.  We have  received  interest  from school  districts we have
contacted  to use the  Wavescreens(C)  program  as a  vehicle  to  acquire  more
computers for student education.

         The new  computers  desired by host  schools  will have to be purchased
from each school's future Wavescreens(C)  advertising revenues. We believe it is
unlikely that independent financing institutions will accept the risk of leasing
computers to public school  districts  using this revenue  stream as collateral.
Also,  Commercial  Concepts does not intend to take direct ownership of personal
computers  in order to lease  them to  interested  school  districts,  using the
Wavescreens(C) advertising revenue for payment. To facilitate the acquisition of
new  computers  by   Wavescreen(C)   host  schools  and  thereby   increase  the
attractiveness   of  the   Wavescreen(C)   program,   we  plan  to  establish  a
financing/leasing   entity   independent   of  Commercial   Concepts,   to  have
responsibility for these transactions.

         We  face   competition   in  the  screen  saver  market  from  numerous
competitors,  some of which have greater  resources than us. There is technology
presently in the market that permits

                                       6
<PAGE>

network administrators to place any image they choose on the computer screen and
to update or change  the images as often as they  desire.  We do not know of any
screen saver  software in the market that is  interactive in a manner similar to
our product.  To be exact,  none of the existing  screen saver  software keeps a
record of when the  screen  saver  appears  and the  demographics  of the viewer
logged onto the computer  viewing the screen saver.  We believe the  interactive
features of our Wavescreens(C) program will give us a competitive advantage.

         In  March  2000,  we  commenced  a  pilot  program  of   Wavescreens(C)
installations with three local schools and other non-profit  organizations.  The
purpose of this pilot program is to gather  detailed,  documented data on actual
system  performance  and the  effectiveness  of screen saver  advertisements  in
preparation for our full-scale  product  introduction in spring 2001.  Local and
regional commercial  organizations have placed  advertisements.  All advertising
revenues  received  during the course of the pilot  program are  remitted to the
participating schools and non-profit groups.

Electronic Brochures

         Using photos,  logos,  advertising  and other  information  provided by
clients, and the templates we have designed, we create customized  presentations
and  advertising  on compact  discs.  The compact  discs are designed to replace
traditional  printed  advertising and brochures,  and even business  cards.  The
compact  discs come in a variety of designs  (the most common of which is a disc
the size of a  business  card) and can be  uniquely  packaged  for each  client.
Because we use  pre-designed  templates,  the compact discs can be created at an
affordable  cost of between  $2,000 and $4,000.  Our research has found that the
average  price  of  similar   compact  discs  from  our  local   competitors  is
approximately $10,000.

Sales and Marketing

         We have three full-time sales and marketing persons who are compensated
with a combination  of salary and  commissions,  but expect to rely on wholesale
distributors  and sales  persons  with  established  distribution  networks  and
contacts  to  market  our  products  as they  are  developed.  Such  persons  or
organizations will be paid on a commission basis.

         We  intend to  market  our  products  based on their  high  value-added
benefits to the user and ongoing service,  and not on basis of price. We believe
our  products  are  priced  very  favorably  with  competitors  that  have  been
identified.

Employees

         As of May 15,  2001,  we have 14 full- and 2  part-time  employees.  No
union or other collective bargaining group represents our employees.  Management
believes relations with our employees are good.

                                       7
<PAGE>

ITEM 2.  Description of Property

         We conduct our business operations at 324 South 400 West, Suite B, Salt
Lake City, Utah, where we have  approximately  7,105 square feet of office space
under  lease  through   February  29,  2004.  The  space  we  lease   represents
approximately  65% of leaseable  space in the  building.  Under the terms of the
lease, we pay $6,143 per month, which amount increases by 4% annually.  There is
no renewal option under the terms of this lease.

ITEM 3.  Legal Proceedings

         The Company knows of no litigation now pending or threatened against it
or involving any of its properties or contract rights.

ITEM 4.  Submission of Matters to a Vote of Security Holders

         No matter was submitted to a vote of the Company's  shareholders during
the fourth quarter of the Company's fiscal year.

                                     PART II

ITEM 5.  Market for Common Equity and Related Stockholder Matters

         Our common stock currently trades on the NASDAQ Bulletin Board where it
has been listed since March 9, 2000. Between October 20, 1999 and March 9, 2000,
the  quotation was  transferred  off the NASDAQ  Bulletin  Board to the National
Quotation  Bureau's "Pink Sheets"  pursuant to NASD Eligibility Rule 6530 issued
on January 4, 1999,  which provides that issuers who do not make current filings
pursuant to Sections 13 and 15(d) of the Securities and Exchange Act of 1934 are
ineligible for listings on the NASDAQ Bulletin Board.  Subsequent to October 20,
1999,  we prepared a complete  registration  statement  that  brought our filing
status to  current  and  permitted  the March 9, 2000  re-listing  to the NASDAQ
Bulletin Board.

         The  following  table sets forth the high and low bid prices for shares
of our common stock for the periods  noted,  as reported by the  National  Daily
Quotation Service and the NASDAQ Bulletin Board. Quotations reflect inter-dealer
prices,  without  retail  mark-up,  markdown or commission and may not represent
actual transactions.

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--------------------------- ---------------------- -----------------------------
         Fiscal Year              Period                       Bid Prices
                                                   -----------------------------
                                                            High       Low
--------------------------- ---------------------- -----------------------------
      February 28, 2001        Fourth Quarter               0.40      0.07
                               Third Quarter                0.43      0.11
                               Second Quarter               0.94      0.25
                               First Quarter                1.10      0.28
--------------------------- ---------------------- -----------------------------
     February 29, 2000         Fourth Quarter               0.31      0.08
                               Third Quarter                0.20      0.06
                               Second Quarter               0.54      0.04
                               First Quarter                1.25      0.13
--------------------------- ---------------------- -----------------------------

         As of May 15, 2001, we had 28,492,589 shares of common stock issued and
outstanding,  and there were 325 record stockholders.  As of the date hereof, we
have not paid or declared any cash dividends. Management has followed the policy
of retaining  any and all earnings to finance the  development  of the business.
Such a policy is likely to be maintained as long as necessary to provide working
capital for our operations.

Item 6.  Management's Discussion and Analysis

General

         The following  discussion  and analysis of our financial  condition and
results  of  operations  should  be  read  in  conjunction  with  the  financial
statements  (including the notes thereto),  and the other  information  included
elsewhere  herein.  Our fiscal  year runs from  March 1 through  the last day of
February.

         Effective  March 1, 1998, we began earning  revenues and were no longer
classified as a development stage company.

RESULTS OF OPERATIONS

Fiscal Year Ended February 28, 2001
vs. Fiscal Year Ended February 29, 2000

         Sales  decreased  by  $191,159  to $70,104  for the  fiscal  year ended
February 28, 2001 $261,263 for the fiscal year ended February 29, 2000.

         The  decrease  in  respective  sales is the result of our  decision  to
concentrate  activity on the development and testing of new products  instead of
customizing software and computer products for clients.

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<PAGE>

         Operating  expenses  for  the  fiscal  year  ended  February  28,  2001
increased  $366,137 to $1,387,903 from $1,021,766 during the twelve months ended
February  29,  2000..  The primary  reason for the  increase was the addition of
senior technical and  administrative  staff, plus support services,  to expedite
development  of our software  products.  Increase in  depreciation  and interest
expenses   reflect  an  expanded  fixed  asset  base  required  to  support  the
development  efforts,  and debt service on convertible and other loans necessary
to fund our operations.

         Our  expenditures  for services paid for with  restricted  common stock
increased  $303,240 to $458,882 for the twelve  months  ended  February 29, 2001
from  $158,642 for the twelve  months  ended  February 29, 2000 with most of the
shares issued in the second and fourth fiscal quarters ended August 31, 2000 and
February 28, 2001,  respectively.  These  expenditures  using restricted  common
stock  recognized  the  efforts of certain  programmers  and  management  in the
development of our products and systems.

         We  capitalized  $550,291 in product  development  expenditures  in the
fiscal year ended February 28, 2001. Two of our  proprietary  software  products
were in active beta testing for the first six months of this period, with one of
these products for all twelve months, as a final step before commercial release.
In accordance with Generally Accepted Accounting  Principles,  all costs related
to this testing period have been capitalized.  There were no product development
expenditures capitalized in the comparable period for 1999.

         Commercial  Concepts has two proprietary  products - Wavescreens(C) and
PictureBase(C)  - that  entered  beta  testing in early  fiscal year 2001.  Beta
testing commenced when each product's technological feasibility was confirmed to
management's satisfaction.  Through February 28, 2001 $197,508 and $352,783 have
been   capitalized  for   PictureBase(C)   and   Wavescreens(C),   respectively.
Development  of both  products  was  initiated  in the  spring  of  1999.  Costs
associated  with the  development  of each  product  prior to  inception of beta
testing approximated  $271,500, or $543,000 combined. We received $12,000 from a
customer towards the development of our PictureBase(C) product.

         Management concluded that technological feasibility was established for
both  products at the  beginning of this fiscal year based on several  criteria.
These criteria included  successful  in-house testing,  the incorporation of and
improvement  on  current  technology,  the  presence  of  a  clearly  identified
commercial  market for the completed  product,  and concurrence of the beta host
technical personnel that beta testing is appropriate.

         Commercial product release for PictureBase(C) occurred during our third
fiscal  quarter  ending   November  30,  2000.   Full   commercial   release  of
Wavescreens(C) is anticipated in the first quarter of fiscal 2002.

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<PAGE>

Liquidity and Capital Resources

         At February 28, 2001, we had cash and other  current  assets of $26,552
compared to cash and other  current  assets of $75,973 at February  292000.  The
decrease of $49,421 results  primarily from decrease in receivables due to lower
for-client  work,  and  increased  operating  capital  requirements.  During the
previous twelve months Commercial  Concept's  expenditures and cash requirements
were met using a combination of sales, equity placements and debt.

         We borrowed $15,000 from an individual and an additional $10,000 from a
second  individual,  neither of which are  shareholders of the  Corporation,  in
August of 1999,  pursuant to promissory notes, at the rate of 10% per annum with
each note being  respectively  due and payable on February 12, 2000 and February
16, 2000. Both promissory  notes remained  outstanding at year-end and both were
converted into restricted common shares of Commercial Concepts, Inc. in April of
2000.  During the fiscal year ended  February 28,  2001,  we borrowed a total of
$167,988  from  various  individuals,  some of which  were  shareholders  of the
Corporation,  at  interest  rates from 10% to 15% per annum.  The  various  loan
details are explained at Note 5 of our financial statements.

         Through November 30, 2000, we issued two $250,000 6% convertible  notes
due July 20, 2003 and September 20, 2003  respectively  to a private  investment
group. In addition,  850,000 five-year warrants were issued for shares of common
stock at a price not to exceed  $.4375,  in connection  with the issuance of the
first  note,  and an  additional  850,000  five-year  warrant  was  issued at an
exercise  price not to exceed  $.1925,  in connection  with the second  $250,000
note. The exercise prices of the warrants  approximated the fair market value of
our common stock at the time of issuance.

         During the fiscal year ended  February 28, 2001, we generated  $310,575
from the sale of 900,000 restricted common shares, primarily in March and April.
We  issued  3,628,960  shares  of  restricted  common  stock in lieu of cash for
various  services  through the twelve months ending  February 28, 2001, with the
majority of these shares issued in the second and fourth fiscal  quarters ending
August 31, 2000 and February 28, 2001, respectively.

Item 7.  Financial Statements

         The response to this Item is  submitted  in a separate  section to this
report. See F-1.

Item 8.  Changes in and Disagreements with Accountants

         On August 31, 1999,  Commercial  Concepts  terminated  its  independent
auditor relationship with David T. Thomson, P.C.

         Thomson's report on the financial statements of Commercial Concepts for
the fiscal year ended February 28, 1998, did not contain an adverse opinion or a
disclaimer  of

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<PAGE>

opinion,  and was not  qualified or modified as to  uncertainty,  audit scope or
accounting principles. The Thomson report for the fiscal year ended February 28,
1998, contained a statement as to the ability of Commercial Concepts to continue
as a going concern. Other than the foregoing,  there were no adverse opinions or
disclaimers of opinions,  or  qualifications or modifications as to uncertainty,
audit scope or accounting principles.

         During the fiscal years ended February 28, 1997, 1998 and 1999, and the
period March 1, 1999 through August 31, 1999, there were no  disagreements  with
Thomson on any matter of accounting principles or practices, financial statement
disclosure, or auditing scope or procedures or any reportable events.

         On September 5, 1999, we engaged Fitzgerald Sanders, LLC ("Fitzgerald")
as our independent  auditors to audit and report on the financial statements for
the fiscal year ended February 28, 1999.

         The  decision  to  change  accountants  was  approved  by the  Board of
Directors.  We  authorized  Thomson to respond fully to  Fitzgerald's  inquiries
concerning Commercial Concepts.

         Prior to engaging  Fitzgerald,  neither Commercial  Concepts nor anyone
acting on its behalf  consulted  with  Fitzgerald  regarding the  application of
accounting  principles to any specified transaction or the type of audit opinion
that might be rendered on our  financial  statements.  In  addition,  during our
fiscal  years ended  February 29, 2000 and  February  28,1999 and 1998,  neither
Commercial  Concepts nor anyone acting on its behalf  consulted with  Fitzgerald
with  respect  to any  matters  that were the  subject  of a  disagreement  or a
reportable event.

         Fitzgerald  Sanders  has  served  as  the  independent  accountants  of
Commercial Concepts,  Inc. (the "Company") since August 1999 and has advised the
Company on accounting and tax matters.

         Subsequent to the filing of Commercial Concept's May 31, 2000 quarterly
financial  statements,  Fitzgerald  Sanders,  LLC dissolved and as a consequence
resigned as the  Company's  independent  accountants.  The report of  Fitzgerald
Sanders on the  financial  statements  of the  Company  for the past fiscal year
contained no adverse  opinion or disclaimer of opinion and were not qualified or
modified as to audit scope or accounting principles.

         During the  Company's  most recent  fiscal year and through the date of
this Report, the Company has had no disagreements with Fitzgerald Sanders on any
matters of accounting  principles or practices,  financial statement disclosure,
or auditing  scope or  procedure,  which  disagreements  if not  resolved to the
satisfaction of Fitzgerald  Sanders have caused it to make reference  thereto in
its report on the financial statements of the Company for such year.

                                       12
<PAGE>

         On October 10, 2000, the Board of Directors of the Company approved the
change in independent  accountants  and the  appointment of Christensen & Duncan
CPA's LC as the new principal independent accountant of Registrant.

                                    Part III

Item 9.  Directors, Executive Officers, Promoters and Control Persons

         The following table sets forth the name, office and age of each officer
and director of Commercial Concepts:

             Name                         Title                        Age
             ----                         -----                        ---
      George E. Richards, Jr.     Chairman, President & CEO            38
      Scott G. Adamson            Executive Vice President             44
                                  and Director
      Karl A. Hansen              CFO, Secretary & Director            47
      Lee R. Kunz. Sr.            Director                             74
      Lee Greenberg               Director                             44

George E. Richards

         George E. Richards has served as Chief Executive Officer and a director
since March 1, 1999.  Since June 1996, Mr.  Richards has served as the President
and  Director of Richards &  Associates,  Inc., a financial  consulting  firm of
which Mr.  Richards  is the sole  shareholder.  From May 1993 to June 1996,  Mr.
Richards was employed by The Goldenberg Group, Inc., a division of Plygem,  Inc.
Mr. Richards attended Cal State Fullerton.

Scott G. Adamson

         Scott G. Adamson has served as Executive  Vice President and a director
since July 1999.  Since  1986,  Mr.  Adamson has served as the  President  and a
director of SGA Financial  Group,  Inc., a financial  company that he founded to
provide project and debt financing,  and currency conversion services. From 1981
to 1986, Chase Manhattan  employed Mr. Adamson in its Latin American Division as
a second Vice President. Mr. Adamson received a Bachelors of Science in Business
Administration   from  Weber  State   University   in  1979  and  a  Masters  of
International  Management  from the American  Graduate  School of  International
Management in 1981.

                                       13
<PAGE>

Karl A. Hansen

         Karl A. Hansen has served as Chief Financial Officer and director since
February 2000. He is a Certified Public  Accountant.  From June 1999 to February
2000, Mr. Hansen served as a consultant with RHI Management Resources, providing
financial consulting services to an Internet related company. From December 1997
to May  1999,  Mr.  Hansen  served  as CFO of East  European  Imports,  Inc.,  a
Miami-based  importation company.  From December 1987 to 1997, Mr. Hansen served
as CFO of two related  mining  companies,  American  Pacific  Mining Company and
Jordex  Resources,  Inc.  From 1977 to 1987,  Mr.  Hansen  worked  in  financial
positions with Ernst & Young,  Salomon  Brothers and Lever Brothers.  Mr. Hansen
received a  Bachelors  of  Science in  Management  from  Rensselaer  Polytechnic
Institute in 1975 and a Bachelors of Science in  Accounting  from the  Rochester
Institute of Technology in 1977.

Lee R. Kunz, Sr.

         Lee R. Kunz Sr. has served as a director  since April  2000.  He is the
retired  CEO of Kunz  Construction  Company.  Mr.  Kunz served for 19 years on a
hospital  board of directors and has been  associated  with the  development  of
biological and pharmaceutical companies.

Lee Greenberg

         Lee  Greenberg  was  President of the west coast  subsidiary of Ply Gem
Industries, CEO of the Lion Group in the United States, and a top executive with
TCII.  Mr.  Greenberg has also served as CEO of the American  Israel  Chamber of
Commerce in the Western U.S. and as  President of The American  Israel  Economic
Education  Foundation in the Western United  States.  Mr.  Greenberg  received a
Bachelor's  degree  from  the  University  of  Hartford  and a law  degree  from
Pepperdine University.

         If any outside director is requested to perform services for Commercial
Concepts beyond normal service as a director,  such director will be compensated
for the performance of such services at rates to be agreed upon by such director
and Commercial Concepts.

         There are no family  relationships  between any  directors or executive
officers of Commercial Concepts.

Compliance with Section 16 Reporting Obligations

         The  directors  and  executive  officers  of  Commercial  Concepts  are
required  under the  Securities  Act of 1934 to file reports with the Securities
and  Exchange  Commission  evidencing  their  ownership  of,  and their  current
transactions  in,  Commercial  Concepts' equity  securities.  This is a personal
obligation  of the  executive  officers  and  directors.  Based  on  information
provided to  Commercial  Concepts  from a review of the SEC EDGAR  database,  it
appears that all  directors  and  executive  officers  filed these  reports in a
timely manner through the period ending February 28, 2001.

                                       14
<PAGE>

Item 10. Executive Compensation

         We have no  deferred  compensation  plan.  The  following  sets forth a
summary of cash and  non-cash  compensation  for each of the last  three  fiscal
years ended  February  28,  2001,  February  29,  2000 and  February  28,  1999.
Beginning in fiscal year 2001, we have instituted a performance-based bonus plan
for management.
<TABLE>
<CAPTION>
                                              Summary Compensation Table
-----------------------------------------------------------------------------------------------------------------------
                                                                                  Long-Term
                                                 Annual Compensation         Compensation Awards
-------------------------------- ---------- ------------------------------ ------------------------- ------------------
                                                                            Restricted    Options/
           Name and               Fiscal        Salary          Bonus          Stock       SARs #        All Other
      Principal Position           Year           $               $          Awards $                  Compensation
-------------------------------- ---------- --------------- -------------- -------------- ---------- ------------------
<S>                                <C>       <C>              <C>               <C>          <C>            <C>
George E. Richards, Jr.            2001      $120,000(1)      $47,473(2)        --           --             --
     Chief Executive Officer       2000      $120,000(3)      $11,800(4)        --           --             --
                                   1999       $10,000(5)         --             --           --             --
                                                  --             --             --           --             --
-------------------------------- ---------- --------------- -------------- -------------- ---------- ------------------
Scott G. Adamson                   2001      $110,000(6)      $43,518(7)        --           --             --
     Executive Vice President      2000       $73,233(8)      $34,900(9)        --           --             --
                                   1999           --             --             --           --             --
                                                  --             --             --           --             --
-------------------------------- ---------- --------------- -------------- -------------- ---------- ------------------
Karl A. Hansen                     2001      $110,000(10)     $149,692(11)      --           --             --
     Chief Financial Officer       2000           --             $1,000(12)     --           --             --
                                   1999
-------------------------------- ---------- --------------- -------------- -------------- ---------- ------------------
</TABLE>

1  $103,278 paid in cash and $16,722 deferred. Payment of deferred wages will be
   with cash or, at the option of Mr.  Richards,  in common  stock valued at the
   average closing price of the common shares of Commercial  Concepts during the
   periods in which Mr. Richard's compensation was deferred.

2  $28,695 received and $18,778  deferred.  The amount received  includes $5,387
   paid in cash.  The  remainder of the amount  received  consists of restricted
   common stock. On August 23, 2000 we issued 37,363 shares of restricted common
   stock to Mr.  Richards,  valued at $.165 per share.  On December  19, 2000 we
   issued 342,857 shares of restricted  common stock to Mr. Richards,  valued at
   $.05 per share. These transactions are reported at "Certain Relationships and
   Related  Transactions." The deferred amount includes a future cash payment of
   $9,778 and future  issuance  of 138,462  shares of  restricted  common  stock
   valued at $.065 per share.

3  $72,000 paid in cash and $48,000 deferred.  Deferred  compensation is payable
   by Commercial  Concepts under the same conditions as described in Paragraph 1
   above.

4  Bonus paid in stock. On December 23, 1999 we issued 147,500 restricted shares
   to  Mr.  Richards,   valued  at  $.08  per  share  as  reported  at  "Certain
   Relationships and Related Transactions."

5  Salary paid in stock. On February 3, 1999 we issued 50,000 shares,  valued at
   $.20  per  share  as   reported  at   "Certain   Relationships   and  Related
   Transactions."

                                       15
<PAGE>

6  $91,664 paid in cash and $18,336 deferred.  Deferred  compensation is payable
   by Commercial  Concepts to Mr. Adamson under the same conditions as described
   for Mr. Richards in Paragraph 1 above.

7  $27,018 received and $16,500  deferred.  The amount received  included $5,652
   paid in cash.  The remainder of the amount  received  consisted of restricted
   common stock.  On August 23, 2000 we issued 34,253  restricted  shares to Mr.
   Adamson,  valued at $.165 per share.  On December 19, 2000 we issued  314,286
   restricted shares,  valued at $.05 per share. These transactions are reported
   in "Certain  Relationships  and Related  Transactions".  The  deferred  bonus
   amount  includes a future  cash  payment of $8,250  and  future  issuance  of
   126,953 shares of restricted common stock valued at $.065 per share.

8  $25,305 paid in cash and $47,928 deferred.  Deferred  compensation is payable
   by Commercial  Concepts to Mr. Adamson under the same conditions as described
   for Mr. Richards in Paragraph 1 above.

9  Bonus  amount  consists  of $9,900  paid in stock and  $25,000  deferred.  On
   December 23, 1999  Commercial  Concepts  issued  123,750 shares of restricted
   common  stock to Mr.  Adamson,  valued at $.08 per share as  reported at Item
   "Certain   Relationships  and  Related   Transactions."  The  deferred  bonus
   compensation is payable by Commercial  Concepts to Mr. Adamson under the same
   conditions as described for Mr. Richards in Paragraph 1 above.

10 $91,662 paid in cash and $18,338 deferred

11 $132,465 received and $17,227  deferred.  The amount received included $3,512
   paid in cash.  The remainder of the amount  received  consisted of restricted
   common stock. On March 6, 2000 Mr. Hansen received 450,000  restricted shares
   of the 500,000  restricted shares awarded to him as an initial signing bonus,
   valued  at $.02 per  share.  On May 31,  2000  Mr.  Hansen  received  200,000
   restricted  shares,  valued at $.20 per share,  of a total 500,000  issued as
   additional bonus to Mr. Hansen.  The remaining  300,000  restricted shares of
   this  additional  bonus,  also  valued at $.20 per share,  were issued to Mr.
   Hansen on  January 2, 2001.  These  transactions  are  reported  in  "Certain
   Relationships and Related Transactions". The deferred bonus amount includes a
   future  cash  payment  of $8,977  and future  issuance  of 126,953  shares of
   restricted common stock valued at $.065 per share.

12 Bonus amount consisted of 50,000 restricted common shares, valued at $.02. We
   issued the shares to Mr.  Hansen on December  19, 1999 as part of his initial
   signing bonus.

Item 11. Security Ownership of Certain Beneficial Owners and Management

         The following table sets forth certain  information with respect to the
beneficial  ownership  of our common stock as of May 15, 2001 by (a) each person
known to us to be the beneficial owner of more than 5% of our common shares; (b)
each of our directors; (c) each executive officer; and (d) all the directors and
executive officers as a group (5 persons). As of May 15, 2001, we had 28,492,589
shares of common stock issued and outstanding.

                                       16
<PAGE>
<TABLE>
<CAPTION>

                                       Security Ownership of Beneficial Owners
----------------------------------------------------------------------------------------------------------------------
                                                                                   Number of              Percent
                 Name                                   Address                  Shares Owned             of Class
---------------------------------------- --------------------------------------- --------------------- ---------------
<S>                                      <C>                                          <C>                   <C>
George E. Richards, Jr.                  1992 S. Chokecherry                          2,490,357             8.7%
                                         Bountiful, UT 84010
---------------------------------------- --------------------------------------- --------------------- ---------------
Scott G. Adamson                         2485 S. Elaine Dr.                           1,635,289             5.7%
                                         Bountiful, UT 84010
---------------------------------------- --------------------------------------- --------------------- ---------------
Karl A. Hansen                           225 South 200 West                           1,424,976             5.0%
                                         Salt Lake City, UT 84101
---------------------------------------- --------------------------------------- --------------------- ---------------
Lee Kunz                                 Denver, CO                                   1,500,000             5.3%
---------------------------------------- --------------------------------------- --------------------- ---------------
Michael C. Lombardi                      755 East Gregg St.  #25                      1,750,000             6.1%
                                         Sparks, NV  89431
---------------------------------------- --------------------------------------- --------------------- ---------------
Michael Verdakis                         47 East 400 South                            1,613,164             5.7%
                                         Salt Lake City, UT 84111
---------------------------------------- --------------------------------------- --------------------- ---------------
The Keshet Fund L.P., Keshet L.P.,       Ragnall House, 18 Peel Road                  9,009,941            31.6%
Nesher Ltd., and Talbiya B. Douglas,     Isle of Man
Investments Ltd(1,2)                     1M1 4L2 United Kingdom
---------------------------------------- --------------------------------------- --------------------- ---------------
All officers and directors                                                            7,050,622            24.7%
as a group  (5 persons)
---------------------------------------- --------------------------------------- --------------------- ---------------
</TABLE>

1  May be considered as a single person for purposes of  determining  beneficial
   ownership.  John Clark is a director of the Keshet Fund,  L.P.,  Keshet L.P.,
   Nesher  Ltd.  and  Talbiya  B.  Investments  Ltd.  and makes  all  investment
   decisions for those beneficial owners.

2  These selling  shareholders may not be required to purchase more than 9.9% of
   the issued and  outstanding  shares of  Commercial  Concepts  pursuant to the
   terms of their agreements with Commercial Concepts.

                                       17
<PAGE>

Item 12. Certain Relationships and Related Transactions

         On December  19, 2000 we issued  342,857  restricted  common  shares to
Richards & Associates,  Inc., a Utah corporation, of which our current President
and Chief Executive  Officer,  George E. Richards Jr., is the sole  shareholder;
314,286  shares to Scott  Adamson,  Executive  Vice  President;  314,286 to Karl
Hansen, Chief Financial Officer; and an aggregate of 500,172 shares to all other
employees as our year-end employee bonus program.

         On  August  23,  2000 we  issued  37,367  restricted  common  shares to
Richards & Associates,  Inc., a Utah corporation, of which our current President
and Chief Executive Officer,  George E. Richards,  Jr., is the sole shareholder;
34,253 shares to Scott G. Adamson,  Executive Vice  President;  25,690 shares to
Karl Hansen, Chief Financial Officer, and an aggregate of 56,049 shares to three
other  management  employees,   in  accordance  with  our  six-month  management
performance incentive program, for the six month period ended June 30, 2000.

         In July of 2000, Lombardi Research Foundation ownership of 4,000,000 of
our restricted  shares was evenly divided  between the  Foundation's  beneficial
control parties,  Vince C. Lombardi and Michael Angelo.  Subsequent to the share
division, Rule 144 filings for sale of the restricted shares have been submitted
by  Mr.   Lombardi  and  Mr.  Angelo  for  250,000  shares  and  150,000  shares
respectively,  leaving net ownership of our  restricted  shares at 1,750,000 for
Mr. Lombardi and 1,850,000 for Mr. Angelo.  Mr. Angelo has since transferred his
shares to Michael Verdakis.

         On October 21, 1999,  Karl Hansen accepted an offer to become the Chief
Financial Officer of Commercial Concepts.  Our offer included a bonus of 500,000
restricted  common  shares.  The bonus was  increased by an  additional  500,000
shares on May 31, 2000. Mr. Hansen  received 200,00 of these shares in May 2000,
and the remaining  300,000 shares on January 2, 2001.  Between  October 21, 1999
and September 30, 2000, Mr. Hansen  purchased 85,000 common shares of Commercial
Concepts.

         Lee Kunz, a director since April 2000,  purchased 300,000 common shares
for $24,000 in November  1999,  on behalf of L&B  Charitable  Trust,  a Colorado
trust. Mr. Kunz, on behalf of L & B Charitable  Trust, on or about February 2000
also purchased 500,000 restricted common shares for $75,000. On or about January
2000, Mr. Kunz on behalf of L & B Charitable Trust purchased 200,000  restricted
common shares for $20,000. The 200,000 shares acquired by L & B Charitable Trust
were a part of the 2,198,000  shares  issued to Scott G. Adamson,  the Executive
Vice  President,  in August 1999.  The shares were  endorsed to L & B Charitable
Trust in March 2000.

         On or about April 18, 2000,  L&B  Charitable  Trust  purchased  500,000
restricted common shares for $100,000.  The funds will be remitted to Commercial
Concepts at the rate of $20,000 per month over five months.  The purchase  price
also included two-year warrants to purchase an additional  500,000 common shares
of  Commercial  Concepts  at a price of $.50 in the  first  year and $.75 in the
second year.

         Ron Poulton,  the trustee of Tech Trust, a shareholder owning more than
5% of the  outstanding  shares of stock,  rendered  legal services to Commercial
Concepts from 1985

                                       18
<PAGE>

to November 1999.  Legal fees and expenses paid or payable to Mr. Poulton in the
twelve-month  period ended February 29, 2000 totaled $28,988 and totaled $57,862
and $5,700 for the fiscal years ended February 28, 1999 and 1998, respectively.

         On December  23,  1999,  we issued  147,500  shares of common  stock to
Richards & Associates,  Inc., a Utah  corporation,  of which George E. Richards,
Jr.,  President and Chief Executive  Officer,  is the sole shareholder;  123,750
shares to Scott  Adamson,  Executive Vice  President;  69,300 shares to Larry D.
Rogers,  Vice  President;  and an  aggregate  of  134,500  shares  to all  other
employees as year-end employment bonuses.

         On December 15, 1999, we agreed to issue an option to purchase  500,000
shares of common  stock,  at an  exercise  price of $.104 per share,  to Wilfred
Blum,  then a director,  as  repayment  of $52,000 of  reimbursements  and other
expenses  allegedly  owed  by us to Mr.  Blum.  We  have  negotiated  a  written
agreement regarding the same with Mr. Blum.

         In August of 1999,  we  reached  an oral  agreement  with  Cybercenters
International,  Inc.,  a principal  shareholder  of which is Scott  Adamson,  an
Executive Vice President,  to acquire all of the issued and outstanding stock of
Cybercenters  after  February 28, 2000.  As part of the  transaction,  we issued
342,000 shares of stock to three  shareholders of Cybercenters in  consideration
of an oral agreement by such persons to pay an aggregate of $18,642. Mr. Adamson
was  issued  2,198,000  shares  of  common  stock  in  consideration  of an oral
agreement  to pay  $131,880.  At  December  8, 2000,  $80,880 of the  obligation
remains outstanding. The foregoing obligations are not due and payable until the
stock is sold. Mr. Adamson subsequently endorsed 800,000 of the 2,198,000 common
shares issued to him to other investors for the benefit of Commercial  Concepts.
All funds  realized by such sales were  remitted  directly  to us and  partially
offset Mr. Adamson's indebtedness to us. No interest accrues on the obligations.

         In July of 1999,  Richards & Associates,  Inc., a Utah corporation,  of
which Mr. Richards is the sole  shareholder,  and Wilfred Blum, then a director,
each pledged 2,000,000 shares of stock personally held by them (for an aggregate
amount  of  4,000,000  shares)  to  Lombardi  Research  Foundation  to  secure a
short-term loan to Commercial Concepts in the amount of $30,000. The proceeds of
the loan  were  used to  finance  a  business  development  trip to China and to
purchase  assets.  The loan was to be repaid on or before August 1999.  When the
loan was not repaid by August  1999,  Lombardi  Research  Foundation  caused all
4,000,000 shares to be transferred to it pursuant to a security  agreement.  The
shares  pledged by Richards & Associates to secure the loan were issued to it on
May 5, 1999 as described  below.  The shares  pledged by Mr. Blum however,  were
issued to Mr.  Blum by our  transfer  agent at Mr.  Blum's  request  without the
approval of the Board of  Directors.  Since all of the proceeds of the loan were
used for our benefit, on December 23, 1999, we issued 2,000,000 shares of common
stock to Richards & Associates  to replace the shares that were  transferred  to
Lombardi.  We did not  issue  replacement  shares  to Mr.  Blum.  We  have  also
implemented  certain  procedures  to prevent the  issuance of stock  without the
approval of the Board of Directors.

                                       19
<PAGE>

         On May 5, 1999, we issued  2,000,000 shares of common stock to Richards
& Associates,  Inc., a Utah  corporation,  of which our current Chief  Executive
Officer and President,  George E.  Richards,  Jr., is the sole  shareholder,  in
consideration  of an oral agreement to pay  Commercial  Concepts  $120,000.  The
obligation  is not  payable  until the shares of stock are sold and no  interest
accrues on the obligation. The obligation is still outstanding as of December 8,
2000.

         On January 25, 1999, we issued  2,000,000  shares of restricted  common
stock valued at $.06 per share,  for a total amount of $120,000 to Wilfred Blum,
then a director and the Chief  Executive  Officer and  President.  Of the shares
issued,  1,600,000  shares or $96,000  worth of stock was  issued  for  services
rendered during the fiscal year ended February 28, 1999, and 400,000 shares,  or
$24,000 worth of stock was issued to repay cash advances to Commercial Concepts.
On or about July 1999,  we loaned  $12,340 to Mr. Blum. No note was executed for
this advance.  The loan did not bear  interest.  The loan was repaid in calendar
year 2000.

         On February 3, 1999, we issued 50,000 shares of restricted common stock
valued  at  $.20  per  share,  for a total  amount  of  $10,000  to  Richards  &
Associates,  Inc., a Utah corporation, of which Mr. George E. Richards, Jr., the
current Chief  Executive  Officer and President,  is the sole  shareholder,  for
services rendered by Mr. Richards to Commercial  Concepts during the fiscal year
ended February 29, 1999.

Item 13.  Exhibits and Reports on Form 10-KSB

Exhibit No.     SEC Reference Document
-----------     ----------------------
     2.1        Articles of Incorporation*
     2.2        Bylaws*
     4.1        Convertible Notes***
     4.2        Warrants***
     10.1       Lease Agreement, dated November 10, 1999*
     10.2       Office Building Lease, dated February 18, 1999*
     10.3       First Amendment to Office Building Lease, dated October 5, 1999*
     10.4       Agreement to Develop Software, dated June 27, 1999*
     10.5       Settlement Agreement and General Release with Larry Rogers**
     10.6       Commercial Concepts, Inc. Bonus Plan***
     10.7       Intermountain Health Care Agreement***
     24.1       Consent of Fitzgerald Sanders, LLC
     24.3       Consent of Christensen & Duncan, CPAs, LC

                *  Incorporated by reference from Registration Statement
                   on Form 10, as filed on March 6, 2000
                ** Incorporated by reference from Form 10-KSB, as filed on
                   May 30, 2000
                ***Incorporated by reference from SB-2 Registration Statement
                   as filed May 14, 2001

                                       20
<PAGE>

                                   Signatures

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

                                               Commercial Concepts, Inc.


May 25, 2001
                                               By  /s/ George Richards Jr.
                                                  -----------------------------
                                                  George Richards, Jr.
                                                  President

         In accordance  with the Exchange Act, this report has been signed below
by the following  persons on behalf of the  registrant and in the capacities and
on the dates indicated.

May 25, 2001                                   By  /s/ Scott Adamson
                                                  -----------------------------
                                                  Scott Adamson
                                                  Executive Vice-President

May 25, 2001                                   By  /s/ Karl Hansen
                                                  -----------------------------
                                                  Karl Hansen
                                                  Chief Financial Officer

                                       21
<PAGE>

                            Commercial Concepts, Inc.

                              Financial Statements
                                       and
                          Notes to Financial Statements

                  As of February 28, 2001 and February 29, 2000
                          and for the years then ended

                        With Independent Auditors' Report

                                    Contents

Independent Auditors' Report - Christensen & Duncan ......................  F-2
Independent Auditors' Report - Fitzgerald Sanders.........................  F-3

Financial Statements:
    Balance Sheets as of February 28, 2001 and February 29, 2000..........  F-4
    Statements of Operations for the years ended February 28, 2001
      and February 29, 2000...............................................  F-5
    Statement of Stockholders' Deficit for the years ended February
      28, 2001 and February 29, 2000......................................  F-6
    Statements of Cash Flows for the years ended February 28, 2001 and
      February 29, 2000...................................................  F-7
    Notes to Financial Statements.........................................  F-8

                                      F-1
<PAGE>

                          Christensen & Duncan CPAs, LC
                          Certified Public Accountants

  (801) 944-4020 Mobile (801) 597-3207 Fax (801) 944-4866 slcpas@integrity.com
            7086 South Highland Dr. #200 / Salt Lake City, Utah 84121


                          Independent Auditors' Report

Board of Directors
Commercial Concepts, Inc.
Salt Lake City, Utah

We have audited the accompanying balance sheet of Commercial  Concepts,  Inc. as
of February 28, 2001, and the related  statements of  operations,  stockholders'
deficit and cash flows for the year then ended.  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.  The  financial
statements of the Company for the year ended February 29, 2000,  were audited by
other  auditors  whose  report,  dated May 17, 2000,  expressed  an  unqualified
opinion on those statements and included an explanatory paragraph concerning the
Company's ability to continue as a going concern.

We conducted our audit in accordance with generally accepted auditing standards.
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 Commercial Concepts, Inc. as of
February 28, 2001,  and the results of its operations and its cash flows for the
year then ended in conformity with generally accepted accounting principles.

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 current liabilities in excess of current
assets, has a net stockholders'  deficit and has incurred substantial  operating
losses,  all of which raise substantial doubt about its 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 the uncertainty.

/s/ CHRISTENSEN & DUNCAN CPA's LC

CHRISTENSEN & DUNCAN CPA's LC
May 10, 2001

                                      F-2
<PAGE>

                          Independent Auditors' Report

To the Board of Directors and Stockholders
of Commercial Concepts, Inc.
Salt Lake City, Utah

We have audited the accompanying balance sheets of Commercial Concepts,  Inc. (a
Utah  corporation)  as of February  29, 2000,  and  February  28, 1999,  and the
related statements of operations,  stockholders'  equity, and cash flows for the
years then ended.  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.  The  financial  statements  and
supplementary  information of Commercial Concepts,  Inc. as of February 28, 1998
were audited by other  auditors  whose  report  dated March 11,  1998,  on those
statements included an explanatory  paragraph that described a substantial doubt
about the  Company's  ability to continue as a going  concern due to losses from
operations  and limited  working  capital  discussed on Note 4 to the  financial
statements.

We  conducted  our  audits  in  accordance  with  generally   accepted  auditing
standards. Those standards require that we plan and perform the audits 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 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 Commercial Concepts, Inc. as of
February 29, 2000 and February 28, 1999, and the results of their operations and
their cash flows for the years then ended in conformity with generally  accepted
accounting principles.

The  accompanying  financial  statements  as of  February  29,  2000,  have been
prepared  assuming  that  the  Company  will  continue  as a going  concern.  As
discussed  in Note 4 to the  financial  statements,  the  Company  has  suffered
recurring  losses from operations and has limited working  capital.  The factors
raise  substantial  doubt  about its  ability to  continue  as a going  concern.
Management's  plans  regarding  those  matters also are described in Note 4. The
financial  statements do not include any adjustments  that might result from the
outcome of this uncertainty.

/s/ Fitzgerald Sanders, LLC

Fitzgerald Sanders, LLC
Salt Lake City, Utah
May 17, 2000

                                      F-3
<TABLE>
<CAPTION>
                            COMMERCIAL CONCEPTS, INC.
                                 BALANCE SHEETS
                     February 28, 2001 and February 29, 2000

                                                                           February 28,     February 29,
                                                                                   2001            2000
                                                                         ----------------  --------------
       ASSETS

       CURRENT ASSETS
<S>                                                                      <C>               <C>
            Cash in bank                                                 $          1,621  $      31,171
            Accounts receivable                                                    11,548         37,811
            Employee advances                                                      11,700
            Prepaid expenses                                                        1,683           6,991
                                                                         ----------------  --------------
              Total current assets                                                 26,552          75,973
                                                                         ----------------  --------------

       PROPERTY AND EQUIPMENT
            Property and equipment                                                118,228          93,140
            Less: accumulated depreciation                                        (47,995)        (22,810)
                                                                         ----------------  --------------
               Property and equipment, net                                         70,233          70,330
                                                                         ----------------  --------------

       OTHER ASSETS
            Investment in software development                                    550,291
               Deposits                                                             7,217             100
                                                                         ----------------  --------------
                    Total other assets                                            557,508             100
                                                                         ----------------  --------------
       TOTAL ASSETS                                                      $        654,293  $      146,403
                                                                         ================  ==============


       LIABILITIES AND STOCKHOLDERS' DEFICIT

       CURRENT LIABILITIES
            Accounts payable                                              $        88,030  $      269,265
            Accrued salaries                                                      301,622
            Accrued interest                                                        8,418

            Current portion of long-term debt                                       4,850           4,514
            Short-term debt                                                       167,988          45,000
                                                                         ----------------  --------------
              Total current liabilities                                           570,908         318,779
                                                                         ----------------  --------------

       LONG TERM DEBT                                                             830,172          17,432

       STOCKHOLDERS'  DEFICIT
            Common stock, $.001 par value, 75,000,000 shares
            authorized, 28,197,590 and 23,683,630 shares issued
            and outstanding, respectively                                          28,198          23,683

            Common stock subscription receivable                                 (200,880)       (225,922)


            Additional paid-in capital                                          2,807,473       2,015,357
            Accumulated deficit                                                (3,381,578)     (2,002,926)
                                                                         ----------------  --------------
                Total Stockholders' Deficit                                      (746,787)       (189,808)
                                                                         ----------------  --------------
       TOTAL LIABILITIES AND STOCKHOLDERS'  DEFICIT                      $        654,293  $      146,403
                                                                         ================  ==============
</TABLE>

                 See accompanying notes to financial statements

                                       F-4
<PAGE>
<TABLE>
<CAPTION>
                            COMMERCIAL CONCEPTS, INC.
                        STATEMENTS OF OPERATIONS for the
              Years Ended February 28, 2001 and February 29, 2000


                                                                              2001                2000
                                                                              ----                ----
     REVENUES:
<S>                                                                      <C>               <C>
              Sales                                                      $         70,104  $      261,263
              Less cost of goods sold                                               5,078          81,797
                                                                         ----------------  --------------
              Gross Profit                                                         65,026         179,466

     EXPENSES:
           General and Administrative Expenses                                    903,836         847,527

           Services provided for common stock                                     458,882         158,642

           Depreciation                                                            25,185          15,597
                                                                         ----------------  --------------

           Total Expenses                                                       1,387,903       1,021,766
                                                                         ----------------  --------------

     NET LOSS FROM OPERATIONS                                                  (1,322,877)       (842,300)

     OTHER INCOME:
           Interest income                                                            568          15,806
              Other income                                                          8,607
              Interest expense                                                    (64,950)         (5,510)
                                                                         ----------------  --------------

     NET LOSS BEFORE INCOME TAXES                                              (1,378,652)       (832,004)

     PROVISION  FOR INCOME TAXES                                                        -               -

     NET LOSS                                                            $     (1,378,652) $     (832,004)
                                                                         ================  ==============
     NET LOSS PER COMMON SHARE:

     Weighted Average Shares Outstanding:
               Basic                                                           25,999,966      16,640,080
               Diluted                                                         25,999,966      16,640,080

     Net Loss per Common Share:
                Basic                                                    $          (.053) $        (.050)

                Diluted                                                  $          (.053) $        (.050)
</TABLE>

                 See accompanying notes to financial statements

                                       F-5
<PAGE>
<TABLE>
<CAPTION>
                            COMMERCIAL CONCEPTS, INC.

                     STATEMENT OF STOCKHOLDERS' DEFICIT for
             the Years Ended February 28, 2001 and February 29, 2000

                                                                   Common Stock         Additional                     Common Stock
                                                               ----------------------    Paid-in       Accumulated     Subscription
                                                                Shares         Amount    Capital         Deficit        Receivable
                                                                ------         ------    ---------       -------        ----------
<S>                                                            <C>            <C>       <C>            <C>
Balance, March 1, 1999                                         9,136,280      $  9,136  $  1,231,580   $(1,170,922)

Issuance of common stock for cash and receivable               2,400,000         2,400       309,600             -             -

Issuance of common stock for various technology                  700,000           700        79,600             -             -

Issuance of common stock for loan inducement fee                 100,000           100         9,900             -             -

Issuance of common stock for litigation settlement               360,000           360        11,100             -             -

Issuance of common stock for services                          6,747,350         6,747       151,895             -             -

Stock subscription receivable                                  4,240,000         4,240       221,682             -    $ (225,922)

Net loss                                                               -             -             -      (832,004)            -
                                                            --------------------------------------------------------
Balance, February 29, 2000                                    23,683,630        23,683     2,015,357    (2,002,926)     (225,922)

Issuance of common stock for services at various dates         3,628,960         3,630       455,252             -             -

Issuance of common stock for cash at various dates               900,000           900       309,675             -             -

Beneficial note conversion feature                                     -             -        27,174             -             -

Payment received on stock subscription receivable                      -             -             -             -        25,042

Cancellation of shares                                           (15,000)          (15)           15             -             -

Net loss                                                               -             -             -    (1,378,652)            -
                                                              ----------      ---------  -----------   -----------    ----------
Balance, February 28, 2001                                    28,197,590      $  28,198  $ 2,807,473   $(3,381,578)   $ (200,880)
                                                              ==========      =========  ===========   ===========    ==========
</TABLE>

                 See accompanying notes to financial statements

                                       F-6
<PAGE>
<TABLE>
<CAPTION>

                            COMMERCIAL CONCEPTS, INC.
                        STATEMENTS OF CASH FLOWS for the
               Years Ended February 28, 2001 and February 29, 2000

                                                                 2001                2000
                                                                 ----                ----
CASH FLOWS FROM OPERATING ACTIVITIES
<S>                                                        <C>                 <C>
Net loss                                                   $   (1,378,652)     $       (832,004)
Non-cash items included in net loss:
Services, fees and settlements paid in stock                      458,882               260,402
 Depreciation                                                      25,185                15,597
 Interest expense on convertible note conversion
  feature                                                          27,174                     -

Changes in assets and liabilities:
 Prepaid expenses                                                   5,308                (6,991)
 Accounts receivable                                               26,263               (37,811)
 Employee advances                                                (11,700)               12,340
 Inventory                                                              -                 4,500
 Accounts payable                                                (181,235)               51,241
 Accrued expenses                                                 314,890               162,363
                                                          ---------------------------------------

 Net cash flows used in operating activities                     (713,885)             (370,363)
                                                          ---------------------------------------

CASH FLOWS FROM INVESTING ACTIVITIES
 Increase in deposits                                              (7,117)                    -
 Increase in investment in software development                  (550,291)                    -
 Purchase of equipment                                            (25,088)              (32,537)
                                                          ---------------------------------------
 Net cash flows used in investing activities                     (582,496)              (32,537)
                                                          ---------------------------------------

CASH FLOWS FROM FINANCING ACTIVITIES
 Cash proceeds from sale of stock                                 310,575               312,000
 Stockholder loans                                                 25,042                     -
 Net proceeds from short-term debt                                118,474                     -
 Net proceeds from long-term debt                                 812,740                44,376
                                                          ---------------------------------------

 Net cash flows from financing activities                       1,266,831               356,376
                                                          ---------------------------------------

NET DECREASE IN CASH                                              (29,550)              (46,524)

CASH AND CASH EQUIVALENTS AT BEGINNING
OF YEAR                                                            31,171                77,695
                                                          ---------------------------------------

CASH AND CASH EQUIVALENTS AT END OF YEAR                  $         1,621     $          31,171
                                                          =======================================

SUPPLEMENTAL INFORMATION:
CASH PAID DURING THE YEAR FOR:
 Interest                                                 $        56,532     $           5,510
                                                          =======================================
 Income taxes                                             $           100     $             100
                                                          =======================================
</TABLE>

                 See accompanying notes to financial statements

                                       F-7
<PAGE>

                            COMMERCIAL CONCEPTS, INC.

                      NOTES TO FINANCIAL STATEMENTS for the
               Years Ended February 28, 2001 and February 29, 2000

NOTE 1  - THE COMPANY

Business Operations Commercial Concepts,  Inc. (The Company) creates proprietary
software  platforms.  From these platforms  individual internet related database
software  products are developed.  As each product  completes beta testing,  the
Company seeks a distribution  partner to market and provide  ongoing support for
the product.

The Company has elected a February  fiscal year end for accounting and reporting
purposes.

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES
Cash  Equivalents - The Company  considers all highly liquid  investments with a
maturity of three months or less when purchased to be cash equivalents.

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.

Property and Equipment - The cost of property and equipment is depreciated  over
the  estimated  useful  lives  of the  related  assets.  The  cost of  leasehold
improvements  is  depreciated  (amortized)  over the lesser of the length of the
related leases or the estimated useful lives of the assets.

         As of February 28, 2001 and February 29, 2000,  property and  equipment
consisted of the following:

                                                 2001             2000
                                                 ----             ----
                  Leasehold improvements        $7,000           $7,000
                  Equipment                     99,055           73,967
                  Furniture and fixtures        12,173           12,173
                                                ------           ------
                           Total              $118,228        $  93,140
                                              ========        =========

Capitalization  of  Software  Development  Costs - The  Company's  policy  is to
expense  research  and  development  costs until  technological  feasibility  is
reached and all related  research  and  development  activities  are  completed,
subsequent  production  expenses  to  bring  the  product  to  market  are  then
capitalized.  Capitalization  of software costs is discontinued when the product
is available for general release to customers.

Amortization  expense of capitalized software costs has not been provided for in
the accompanying  statements of operations because the software products are not
available as yet for sale to customers.

Income Taxes - Deferred income tax assets and liabilities are computed  annually
for  differences  between the  financial  statement  and tax bases of assets and
liabilities  that will  result in  taxable or  deductible  amounts in the future
based on  enacted  tax laws and rates  applicable  to the  periods  in which the
differences  are expected to affect  taxable  income.  Valuation  allowances are
established  when necessary to reduce deferred tax assets to the amount expected
to be  realized.  Income tax  expense is the tax payable or  refundable  for the
period  plus or minus the change  during the period in  deferred  tax assets and
liabilities.

Net Income (Loss) per Common Share - Basic net income (loss) per common share is
computed based upon the average number of common shares  outstanding  during the
period.  The diluted per share  computation  adds to the weighted average common
shares outstanding the incremental  increase in shares due to outstanding common
stock equivalents (options,  warrants etc.) unless such common stock equivalents
are considered anti-dilutive.

                                       F-8
<PAGE>

                            COMMERCIAL CONCEPTS, INC.

                      NOTES TO FINANCIAL STATEMENTS for the
               Years Ended February 28, 2001 and February 29, 2000

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Reclassification  - Certain items on the February 29, 2000 financial  statements
have been reclassified to conform to classifications adopted in 2001.

NOTE 3  - GOING CONCERN

The  accompanying  financial  statements  have been prepared in conformity  with
generally accepted accounting principles, which contemplates the continuation of
the Company as a going  concern.  As  reflected  in the  accompanying  financial
statements, the Company has current liabilities in excess of current assets, has
a net stockholders'  deficit and has incurred substantial  operating losses, all
of which  raise  substantial  doubt  about its  ability to  continue  as a going
concern.

In order to develop  additional  working  capital and attract  continued  equity
investment,  the Company has reorganized  management,  formulated a new business
plan,  and  developed and marketed new business  products.  On or about July 18,
2000, the company initiated a borrowing  relationship with a private  investment
group (see Notes 6 and 9).  Through  February 28, 2001, the Company has borrowed
$500,000 under the terms of two $250,000 convertible notes payable. In addition,
$300,000 was borrowed on December 3, 2000 from this investment group. Management
believes that the actions presently being taken will provide the opportunity for
the Company to continue as a going concern.

NOTE 4  -  INCOME TAXES

Deferred tax assets at February 28, 2001 and February 29, 2000, consisted of the
following:

                                                 2001                2000
                                                 ----                ----
     Deferred tax asset arising from:

     Net operating loss carryforwards         $1,100,000       $   623,431
     Less allowance valuation at 100%         (1,100,000)         (623,431)
                                              ----------       -----------

       Deferred tax asset                     $     NONE       $      NONE
                                              ==========       ===========

The  Company  has unused net  operating  loss carry  forwards  of  approximately
$3,000,000  to offset  future  taxable  income which expire at various times and
amounts through 2021.

NOTE 5 - SHORT-TERM AND LONG-TERM DEBT
<TABLE>
<CAPTION>
Short-term debt consisted of the following at February 28, 2001 and February 29,
2000:

                                                                          2001           2000
                                                                          ----           ----
<S>                                                                   <C>            <C>
Notes payable (non-collateralized) to individual dated June 22,
2000 through February 16, 2001, due at various dates through
February 5, 2002, plus all accrued interest at 15%.                   $   68,500

Note payable to individual dated November 3, 2000, collateralized
by 200,000 shares of the Company's common stock, payable on
demand plus all accrued interest at 15%.                                  15,000

                                       F-9
<PAGE>

                            COMMERCIAL CONCEPTS, INC.

                      NOTES TO FINANCIAL STATEMENTS for the
               Years Ended February 28, 2001 and February 29, 2000

NOTE 5 - SHORT-TERM AND LONG-TERM DEBT  (CONTINUED)
<CAPTION>

Short-term debt (continued)
<S>                                                                   <C>            <C>
Note payable (non-collateralized) to individual dated June 15,
2000 payable on demand plus all accrued interest at 10%.                  42,988

Note payable to limited partnership dated February 2001,
collateralized by 571,250 shares of the Company's common stock,
payable on March 15, 2001 plus all accrued interest at 12%.               30,000

Note payable to corporation (non-collateralized) dated January
23, 2001 due on demand plus all accrued interest at 10%.                  10,000

Notes payable to three individuals paid in full during the year
ended February 28, 2001 plus all accrued interest at 10%.                            $   45,000

Other                                                                     15,000
                                                                      ----------     ----------
Total                                                                 $  167,988     $   45,000
                                                                      ==========     ==========

<CAPTION>
Long-term  debt consisted of the following at February 28, 2001 and February 29,
2000:

                                                                         2001          2000
                                                                         ----          ----

Convertible notes payable to private investment group with
$250,000 due on July 20, 2003 and $250,000 due on September 20,
<S>                                                                 <C>             <C>
2003 plus all accrued interest at 6% (see Note 6).                  $    514,712

Convertible note payable to private investment group due December
3, 2003 plus all accrued interest at 8% (see Note 6).                    305,918

Capital leases (see Note 8).                                              14,392     $   21,946
                                                                    ------------     ----------

Total                                                                    835,022         21,946

Less current-portion                                                      (4,850)        (4,514)
                                                                    ------------     ----------
Long-term portion                                                   $    830,172     $   17,432
                                                                    ============     ==========
</TABLE>

Long term debt as of February 28, 2001 is scheduled to mature as follows:

         Year ended February 28:

           2002                    $     4,850
           2003                          5,000
           2004                        825,172
                                   -----------
           Total                   $   835,022
                                   ===========


                                      F-10
<PAGE>

                            COMMERCIAL CONCEPTS, INC.

                      NOTES TO FINANCIAL STATEMENTS for the
               Years Ended February 28, 2001 and February 29, 2000

NOTE 6 -  CONVERTIBLE NOTES PAYABLE AND OTHER EQUITY INSTRUMENTS

Through February 28, 2001, the Company issued to a private  investment group two
$250,000,  6%  convertible  notes  due July 20,  2003 and  September  20,  2003,
respectively.  The notes are convertible into common shares of the Company based
upon the three lowest  closing  prices for the Company during the thirty trading
days prior to the date of the note,  or the three lowest  closing  prices during
the sixty trading days prior to the conversion date. In accordance with Emerging
Issues  Task  Force No.  98-5,  the  Company  recorded  interest  expense  and a
corresponding increase to additional paid-in capital in the amount of $27,174 in
connection with the beneficial conversion feature during the year ended February
28, 2001.  The Company  retains a redemption  clause in the notes that allow the
Company to  repurchase  the notes upon payment of 130% of the note's face value,
plus accrued  interest.  In addition,  the Company  issued  warrants to purchase
850,000 shares of the Company's common stock at an exercise price of $0.4375, in
connection with the issuance of the first $250,000 note and warrants to purchase
850,000  shares were issued at an exercise price of $.1925,  in connection  with
the second  $250,000 note,  which exercise prices  approximated  the fair market
value of the Company's common stock.

On December 3, 2000,  the Company  received  $300,000 from a private  investment
group under the terms of a convertible  8% note payable due December 3, 2003. In
connection  therewith,  the Company issued 750,000 five-year  warrants having an
exercise price of $0.115.

On March 7, 2001 the Company  issued  warrants to purchase  40,816 shares of the
Company's  common stock at $.175 in  connection  with a short-term  $50,000 note
payable entered into on March 1, 2001.

Four employees  including two officers of the Company have the option to convert
accrued  salaries  in the  amount  of  $151,059  into  1,575,893  shares  of the
Company's common stock.

NOTE 7 - RELATED PARTY TRANSACTIONS

During the year ended February 28, 2001, L&B Charitable Trust purchased  500,000
restricted  common shares of the Company for $100,000.  The purchase  price also
included  two-year  warrants to purchase an additional  500,000 common shares of
the  Company  at an  exercise  price of $0.50 in the first year and $0.75 in the
second year.

During the year ended February 28, 2001, the Company issued 2,018,739 restricted
shares of common stock to three officers of the Company for services.

                                      F-11
<PAGE>

                            COMMERCIAL CONCEPTS, INC.

                      NOTES TO FINANCIAL STATEMENTS for the
               Years Ended February 28, 2001 and February 29, 2000

NOTE 8 - LEASE COMMITMENTS

As of February 28, 2001, the Company  leased office space and certain  equipment
under non-cancelable operating and capital leases. Future minimum lease payments
required under the operating and capital leases are as follows:

                                                    Operating          Capital
                                                      Leases            Leases
                                                      ------            ------

        2002   ...................................   $    78,379     $   8,064
        2003   ...................................        81,737         8,064
        2004   ...................................        85,162         8,064
        2005   ...................................             -         2,181
                                                      ----------     ---------
        Total minimum lease payments                  $  245,278        26,373
                                                      ==========

        Less amount representing interest                               11,981
                                                                     ---------

        Present value of net minimum lease payments                     14,392

        Less current portion                                             4,850
                                                                     ---------

            Total                                                    $   9,542
                                                                     =========

As  of  February  28,  2001,   the  Company  has   equipment   purchased   under
non-cancelable   capital   leases  with  a  cost  of  $22,570  and   accumulated
amortization of $5,556.

NOTE 9 - Subsequent Event

On July 18, 2000 the Company initiated a $6.5 million equity line of credit with
a private investment group. Full  implementation of the credit line required the
Company to submit an appropriate SB-2  registration  statement to the Securities
and Exchange  Commission (SEC). This SB-2 registration  statement was filed with
the SEC in September 2000. In March 2001 the Company received  notification from
the SEC that the  registration  cannot be  approved if the  financing  structure
remains as an equity  line of credit.  As a result,  the Company and the private
investment  group have  agreed that the SB-2  registration  should be amended to
reflect only the first two  disbursements  that were made under the equity line,
in the form of  convertible  notes (see note 6). The amended SB-2 was filed with
the SEC in April 2001.  The  investment  group has agreed to continue  financial
support  for the  Company.  An  additional  convertible  note for  $300,000  was
executed  in April  2001,  between  the  investment  group and the  Company.  An
agreement formalizing the revised financing terms is currently being negotiated.

                                      F-12