<PAGE>

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-KSB
(Mark One)
         [ X ]    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                  SECURITIES EXCHANGE ACT OF 1934 For the Fiscal Year Ended
                  October 31, 2001
                                        OR
         [   ]    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                  SECURITIES EXCHANGE ACT OF 1934

                         Commission File Number 0-20317


                                  BIOFARM, INC.
        (Exact name of small business issuer as specified in its charter)

               Nevada                                         88-0270266
    (State or other jurisdiction                           (I.R.S. Employer
 of incorporation or organization)                       Identification No.)

                           1244 Main Street, Linfield,
                  Pennsylvania 19468 (United States address of
                principal executive offices, including zip code)

         Issuer's telephone number, including area code: (610) 495-8413


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

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

                         Common Stock ($.001 Par Value)

         Check whether the issuer: (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
                               -----                     ------

         Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-B is not contained herein, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB [ ].

            State issuer's revenues for its most recent fiscal year:
                                     $20,218

         As of January 25, 2002, 4,671,930 shares of Common Stock ($.001 par
value) were issued and outstanding. The aggregate market value of the Common
Stock held by non-affiliates was approximately $4,185,967 determined by the
closing sale price on that date based upon 4,315,430 shares owned by
non-affiliates.


<PAGE>


                                TABLE OF CONTENTS


Part I

         Item 1.  Description of Business

         Item 2.  Description of Property

         Item 3.  Legal Proceedings

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

Part II

         Item 5.  Market for Common Equity and Related Stockholder Matters

         Item 6. Management's Discussion and Analysis or Plan of Operation

         Item 7. Financial Statements

         Item 8.  Changes in and Disagreements with Accountants on Accounting
                  and Financial Disclosure

Part III

         Item 9. Directors, Executive Officers, Promoters and Control Persons;
                   Compliance with Section 16(a) of the Exchange Act

         Item 10. Executive Compensation

         Item 11. Security Ownership of Certain Beneficial Owners and Management

         Item 12. Certain Relationships and Related Transactions

         Item 13. Exhibits and Reports on Form 8-K

                                                                               1

<PAGE>


                                     PART I

Item 1.  Description of Business

         Biofarm, Inc., a Nevada corporation (hereinafter referred to as the
"Company"), was organized under the laws of the State of Nevada on September 26,
1990, under the name Global Spill Management, Inc. From inception until June 28,
1996, the Company was engaged in the environmental remediation business with
emphasis upon the elimination of oil spill damages. On October 5, 1998, in
connection with the then acquisition of approximately 87% of the capital stock
of Biofarm, S.A., the shareholders voted to change the name of the Company to
Biofarm, Inc. Such acquisition was rescinded on October 31, 1999. The Company
may be characterized as a non-operating "shell" corporation.

ACQUISITION OF MINORITY INTEREST IN SHARES OF PRIVATE ENTITIES

         On October 4, 2001, the Company executed revised Subscription
Agreements to purchase shares in the following private companies:

         Paragon Sports Group, Inc.                              800,000 shares
         Artwork and Beyond, Inc.                                600,000 shares

         The entities whose shares have been subscribed for have agreed to cause
Registration Statements to be filed with the SEC in order to become
publicly-traded entities. The Company is advised that Registration Statements
have been prepared by the two companies listed above. One such Registration
Statement was declared effective by the Securities and Exchange Commission on
January 14, 2002.

Item 2.  Description of Property

         The principal office of the Company in the United States is located at
1244 Main Street, Linfield, Pennsylvania 19468. Such premises are used solely
for mail and telephone purposes. Through a subsidiary, the Company owns a 2,400
square foot office building and garage (400 square feet) located on
approximately 10 acres of land (waterfront property) in Camden, New Jersey. The
Company intends, upon the resolution of certain environmental issues, to offer
such property for sale. The Company carries such property at zero value on its
books.

Item 3.  Legal Proceedings

         In February, 2000, in the matter of Global Enterprises (Nevada) Inc. v.
GSM Environmental, Inc., judgment was entered in favor of plaintiff, both as to
plaintiff's primary claim and defendant's counterclaim. Defendant has appealed
to the Superior Court and such appeal is pending. The Company had previously
assigned the claim to plaintiff. Defendant's counterclaim against plaintiff
alleged that the Company had promised to pay certain legal fees owed by
defendant, which legal fees were incurred when defendant was owned by the
Company. No proof of such counterclaim was offered at trial. Plaintiff
demonstrated at trial that defendant had issued a general release to the
Company. The trial court acknowledged this defense when it rejected defendant's
counterclaim. The Company is not a party to this litigation and no such claim
has been asserted against the Company by defendant in any other action.

                                                                               2
<PAGE>

         On November 21, 2001, a motion was argued in the matter of Suisse
Capital Complex, Inc. v. Biofarm, Inc. (United States District Court (New York
City)). Plaintiff moved for a mandatory injunction to compel the Company to
issue shares of its Common Stock pursuant to a Debenture allegedly issued and
dated December 1, 1998. Plaintiff did not seek the recovery of any money
damages. The motion having been brought on by an Order to Show Cause, the Court
was confronted with a matter of first impression. After oral argument, the Court
ordered that the motion be withdrawn without prejudice and directed the parties
to mediation.

         Plaintiff claims it holds a debenture issued by the Company dated
December 1, 1998, in the principal amount of $3 million. The Company's defense
is that the debenture is fraudulent. The facts available to the Company are that
the debenture was executed and delivered in blank and without a date in August,
1998; that the signature was not a person authorized to sign for the Company;
that the name on the debenture of the issuer (Biofarm, Inc.) was not a name that
existed in August, 1998; that the $3 million was spent entirely by Litchfield
Continental, Ltd (LCL); that not one penny of the $3 million inured to the
benefit of the Company; that all of such $3 million was spent on LCL matters;
that the Company has been indemnified by LCL against any and all matters
concerning plaintiff and initiated by LCL; and that writings executed by
plaintiff itself prove that plaintiff did not itself advance the funds to LCL.
Defendant also made available to the Court documents from its prior auditors
demonstrating the disposition of the $3 million by LCL.

         At the Court's direction, the parties met at a mediation session on
January 16, 2002. Nothing was resolved at such session. Other than offering
plaintiff an amount estimated by the Company to be the cost of litigation, the
Company has no present intention to settle with this plaintiff. On January 17,
2002, the Court set the matter down for a pre-trial conference on March 19,
2002.


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

         Inapplicable


                                     PART II

Item 5.  Market for Common Equity and Related Stockholder Matters

         On July 29, 1992, the Company's Common Stock commenced quotation on the
NASDAQ Small Cap Market (NASDAQ) under the symbol GSMI. (The symbol was changed
to GEGI coincident with the May 13, 1996, Amendment to the Articles of
Incorporation, and to BIOF on June 18, 1998.) The following table sets forth the
reported high and low bid and high and low asked quotations for the Company's
Common Stock for the period November 1, 1999, to December 31, 2001. Such
quotations reflect inter-dealer prices, without retail mark-up, mark-down, or
commissions, and may not represent actual transactions.


                                                                               3

<PAGE>



<TABLE>
<CAPTION>


                                            Closing                             Closing
                      High Bid    Low Bid     Bid        High Ask    Low Ask      Ask

      1999
<S>                  <C>         <C>        <C>          <C>         <C>        <C>
Oct 1 - Dec 31        1.7396      0.9479     1.333        1.8125      1.0104     1.4687

       2000
Jan 1 - Mar 31        1.5000      0.8438     1.1875       1.6250      1.0000     1.2500
Apr 1 - Jun 30        1.5000      0.8125     1.1875       1.5313      0.9063     1.3125
Jul 1 - Sep 30        1.2500      0.5313     0.7500       1.3125      0.5625     1.0000
Oct 1 - Dec 31        1.0625      0.3750     0.5313       1.0938      0.4375     0.5938

       2001
Jan 1 - Mar 31        0.9375      0.4375     0.5000       1.0000      0.4688     0.5625
Apr 1 - Jun 30        0.7300      0.3500     0.4100       0.7500      0.4000     0.6000
Jul 1 - Sep 30        0.7500      0.2200     0.7000       0.8250      0.3000     0.8000
Oct 1 - Dec 31        1.2600      0.5500     0.8200       1.3000      0.5700     0.9300
</TABLE>

   On January 25, 2002, the closing bid and asked prices were $.97 and $1.05
respectively.

         On November 27, 1996, the Company's Common Stock was delisted from
trading on NASDAQ. On April 17, 1997, the Company's Common Stock commenced
trading on the OTC Electronic Bulletin Board. Such delisting was prompted by the
Company's inability to file a timely Form 10-K with audited financials for the
fiscal year ended June 30, 1996. Having been delisted, the Company is now
required to meet NASDAQ standards applicable to an initial listing application.
Presently, such criteria include $4 million in total assets, $2 million in
capital and surplus, $1 million market value of the public float and a minimum
bid price of $3 per share. There can be no assurance that the Company's Common
Stock will be included on NASDAQ even if such initial listing requirements are
satisfied, or that thereafter the requirements for continuous listing will
continue to be met. In any such event, the Company's Common Stock would continue
to be traded on the OTC Electronic Bulletin Board, in which event a shareholder
may find it more difficult to dispose of (or to obtain accurate quotations as to
the price of) the Company's Common Stock.

         On July 6, 2001, the Company issued an aggregate of 295,000 shares
("Shares") of its Common Stock (par value $.001 per share) to two unaffiliated
persons in exchange for the payment by such persons of the sum of $147,500 in
subscriptions payable. There were no fees, discounts or commissions payable by
the Company. The Shares were issued pursuant to the exemption afforded by
Section 4(2) of the Securities Act of 1933, as amended. The Shares were issued
in a transaction not involving any public offering. The certificates
representing such Shares are affixed with a restrictive legend preventing the
transfer thereof and are the subject of appropriate stop transfer instructions.
Subsequent to the issuance of such Shares, the Company received the additional
sum of $87,300 in payment of subscriptions receivable prior to December 31,
2001, for which additional shares have not yet been issued. Of such $87,300,
$55,800 was received prior to October 31, 2001, and $31,500 was received between
November 1 - December 31, 2001.

                                                                               4
<PAGE>

         As of the date hereof there were 4,671,930 shares of Common Stock
validly issued and outstanding. The aggregate of 1,085,000 shares of Common
Stock issued pursuant to two improperly filed Form S-8 filings are not deemed to
be validly issued, fully paid and non-assessable because such shares were not
registered for public sale, were issued without consideration and were not
authorized for issuance by the Board of Directors. There were a total of
approximately 600 holders of record as of December 31, 2001. The Company
believes, based upon available information, that there are in excess of 1,000
beneficial owners of the Company's Common Stock. No shares of the Company's
authorized Preferred Stock have ever been issued.

Dividends

         The payment of dividends, if any, by the Company rests within the
discretion of its Board of Directors and depends, among other things, upon the
Company's earnings, its capital requirements, it's financial condition, as well
as other relevant factors. As of the date hereof, the Company has not issued or
declared any dividends. The Company does not anticipate paying any dividends on
its Common Stock in the foreseeable future. (See Item 8 hereinafter.)

Item 6.  Management's Discussion and Analysis or Plan of Operation

         The Company having disposed of all its operations, may today be fairly
characterized as a non-operating "shell" corporation. Therefore, there is no
need for discussion herein of prior results of operations, of year-to-date
operating results and comparisons, and of liquidity and capital resources. As of
the date hereof, the Company is able to meet its debts as they mature, which
obligations consist exclusively of legal, accounting and miscellaneous expenses
payable by any public company. The Company has outstanding subscriptions
receivable of $465,200 as of October 31, 2001, all of which are due and deemed
to be collectible prior to July 31, 2002.

         Assuming collection of its notes receivable, the Company will have
available cash and no liabilities. Current payables will consist solely of
professional fees and office overhead expenses. The Company believes that such
financial condition, its existence as a public entity since 1992 and its current
filer status under the 1934 Act, will make the Company an attractive candidate
to businesses desirous of being acquired by a public company. The Company has
been presented with many proposed business combinations from entities engaged in
various types of businesses. As of the date hereof, the Company has made no
binding decision concerning a possible acquisition, the belief of management
being that distribution of this Form 10-KSB (including the audited financial
statements contained herein) will attract an even wider spectrum of potential
business combinations. The Company is now considering the possible acquisition
of any one or more of three specific entities with two of which letters of
intent have been executed and delivered.

                                                                               5
<PAGE>

Item 7.  Financial Statements

         Consolidated Financial Statements and supplementary financial
information specified by this Item 7 are presented following Item 13 in Part III
of this report.

Item 8.  Changes in and Disagreements with Accountants on Accounting and
         ----------------------------------------------------------------
                  Financial Disclosure

         Inapplicable


                                    PART III

Item 9. Directors, Executive Officers, Promotors and Control Persons;
        Compliance with Section 16(a) of the Exchange Act
        -------------------------------------------------------------

         The executive officers, directors and key personnel of the Company are
as follows: (the information set forth hereunder is as of the October 31, 2001,
end of the fiscal period). Each of the four persons named below occupied the
office set forth opposite his/her name from November 15, 1996, until October 5,
1998, and resumed the occupancy of such office on October 31, 1999.

Name                       Age     Positions held with the Company
----                       ---     -------------------------------
David R. Stith             72      President and Director

Herbert S. McDonald        65      Director

Allan Esrine               73      Principal Financial Officer and Director

Desiree L. Pierson         39      Secretary

         Biographies of the directors and executive officers of the Company are
set forth below. All directors hold office until the next annual stockholders
meeting and until their successors have been elected and qualified or until
their death, resignation, retirement, removal or disqualification. Vacancies in
the existing Board are filled by majority vote of the remaining directors.
Officers of the Company serve at the will of the Board of Directors.

         David R. Stith became Vice Chairman and a Director of Global on
November 1, 1991, and of the Company on November 25, 1991. Mr. Stith founded
Underwater Technics in 1967 and has served as its Chairman and President since
such date. Mr. Stith led the crew that cleaned up the major oil spills from the
tankers the "Elias," the "Mellon, and the "Athos." Mr. Stith was also involved
in underwater testing for the National Aeronautics and Space Administration, and
led the crew that dove for sunken treasure on the Spanish Gallon "San Jose"
which sank off Columbia in 1708.

                                                                               6
<PAGE>

         Herbert S. McDonald became a director of the Company on December 27,
1995. Mr. McDonald has, since January 1993, been the President of The Fulcrum
Group, a management consulting firm specializing in the restructuring and
merger/acquisition of corporate clients. Prior thereto, Mr. McDonald was (since
August 1990) the President (CEO) and principal shareholder of European
Automotive Products, Inc., a major importer of imported cars specializing in
higher end German automotive parts. Prior thereto, Mr. McDonald was the
President (CEO) and principal shareholder of Fulcrum Investments, a firm making
investments in manufacturing, leasing, automobile dealerships and real estate.

         Allan Esrine became a director of the Company on November 15, 1996, as
well as Principal Financial Officer. Mr. Esrine has, for the past five years,
been involved in private financial activities in New York City, including the
management of several family businesses.

         Desiree L. Pierson became Secretary of the Company in January, 1996.
Ms. Pierson was an employee of the Company from 1991 until June 28, 1996. In her
capacity as Secretary, Ms. Pierson's duties include shareholder relations,
matters involving the Transfer Agent and corporate record keeping, and do not
include corporate decision making or substantive matters involving the Company.

         No director, officer or affiliate of the Company is an adverse party to
the Company or any of its subsidiaries in any material proceeding.

         The Company and its directors and executive officers are in compliance
with the requirements of Section 16(a) of the Exchange Act.

Item 10. Executive Compensation

         None of the present three directors and officers of the Company has
received any remuneration of any kind (including reimbursement of expenses)
during the period October 31, 2000, through October 31, 2001. Desiree L.
Pierson, Secretary, has received the sum of $500 per month (plus accountable
expenses) for services rendered to the Company on a part-time basis.

Item 11. Security Ownership of Certain Beneficial Owners and Management

         The following table sets forth certain information with regard to the
beneficial ownership of outstanding shares of Common Stock by (i) each person
known by the Company to own beneficially five (5%) percent or more of the
outstanding shares of the Company's Common Stock; (ii) each director and
executive officer individually; and (iii) all executive officers and directors
of the Company as a group:

                                                                               7

<PAGE>


                             Number of Shares of
Name and Address             Common Stock                 Percentage (%) of
Of Beneficial Owner          Beneficially Owned (1)       Class Outstanding (2)
--------------------         ----------------------       ---------------------

David R. Stith                      86,500                           1.85
Herbert S. McDonald                 70,000                           1.50
Allan Esrine                       200,000                           4.28

Directors and Officers             356,500                           7.63
  as a Group (3 persons)


(1)  Beneficial ownership as reported in the table above has been determined in
     accordance with Instruction (4) to Item 403 of Regulation S-B of the
     Securities Exchange Act.

(2)  Percentage of class based upon 4,671,930 shares of Common Stock outstanding
     on October 31, 2001.


Item 12. Certain Relationships and Related Transactions

         Inapplicable


Item 13. Exhibits and Reports on Form 8-K

         (a)      1.  All financial statements - see index to Consolidated
                      Financial Statements on page F-1.

2.       Exhibits - see Exhibits below.

         (b)      The following Exhibits (incorporated herein by reference) are
                  applicable to the period subsequent to the filing of Form
                  10-KSB for the fiscal year ended October 31, 2000, and prior
                  to the filing date hereof:

                  A.  Form 10-KSB,  for the fiscal year ended  October 31, 2000,
                      filed on January 26, 2001

                  B.  Form 10-QSB, for the first quarter ended January 31, 2001,
                      filed on March 12, 2001

                  C.  Form 10-QSB,  for the second quarter ended April 30, 2001,
                      filed on June 14, 2001

                  D.  Form 10-QSB,  for the third  quarter  ended July 31, 2001,
                      filed on September 4, 2001


                                                                               8
<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.

                                                 BIOFARM, INC.



                                        By:  /s/ David R. Stith
                                                 ------------------------------
                                                 David R. Stith
                                                 President and Director
                                                 January 28, 2002


         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.

<TABLE>
<CAPTION>


<S>                                <C>                                    <C>
Signatures                         Title                                  Date
----------                         -----                                  ----

/s/ David R. Stith                 President and Director                 January 28, 2002
----------------------------
David R. Stith

/s/ Allan Esrine                   Principal Financial and                January 28, 2002
----------------------------       Accounting Officer and Director
Allan Esrine

                                   Director
/s/ Herbert S. McDonald                                                   January  28, 2002
----------------------------
Herbert S. McDonald


</TABLE>







                                                                               9


<PAGE>


                                  BIOFARM, INC.

                            OCTOBER 31, 2001 AND 2000

                                TABLE OF CONTENTS


                                                                        Page
                                                                        ----

Independent Auditors' Report ....................................      F-2

Consolidated Financial Statements

        Balance Sheets ..........................................      F-3

        Statements of Operations ................................      F-4

        Statements of Changes in Stockholders' Equity ...........      F-5

        Statements of Cash Flows ................................      F-6

        Notes to Consolidated Financial Statements ..............      F-7 - F-9



                                      F-1
<PAGE>


                          Independent Auditors' Report
                          ----------------------------


The Stockholders and Board of Directors
Biofarm, Inc.
Linfield, Pennsylvania


We have audited the accompanying consolidated balance sheets of Biofarm, Inc. as
of October 31, 2001 and 2000 and the related consolidated statements of
operations, changes in 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.

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

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of
Biofarm, Inc. as of October 31, 2001 and 2000 and the consolidated results of
their operations and their cash flows for the years then ended in conformity
with accounting principles generally accepted in the United States of America.



                                             ASHER & COMPANY, Ltd.

Philadelphia, Pennsylvania
January 11, 2002, except as to Note F,
  as to which the date is January 18, 2002


                                      F-2
<PAGE>



                                  BIOFARM, INC.
                           CONSOLIDATED BALANCE SHEETS
                            OCTOBER 31, 2001 AND 2000

                                     ASSETS
<TABLE>
<CAPTION>

                                                                               2001                  2000
                                                                               ----                  ----
<S>                                                                         <C>                     <C>
CURRENT ASSETS
  Cash                                                                                              $      2,192
  Subscriptions receivable and accrued interest                             $     465,200                682,128
                                                                            -------------           ------------
   Total current assets                                                           465,200                684,320

OTHER ASSETS
  Note receivable                                                                   4,000                      -
  Investments in unregistered companies                                            56,864                      -
                                                                            -------------           ------------
   Total other assets                                                              60,864                      -
                                                                            -------------           ------------
   Total Assets                                                             $     526,064           $    684,320
                                                                            =============           ============

                       LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
  Accounts payable                                                          $      37,278           $     37,650
                                                                            -------------           ------------
   Total current liabilities                                                       37,278                 37,650

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY
  Preferred stock, $.001 par value; 5,000,000
    shares authorized, none issued
  Common stock, $.001 par value; 25,000,000
    shares authorized; 4,671,930 shares issued
    and 4,671,545 shares outstanding in 2001;
    and 4,376,930 shares issued and
    4,376,545 shares outstanding in 2000                                            4,672                  4,377
  Additional paid-in capital                                                   17,084,257             17,084,552
  Accumulated deficit                                                         (16,599,156)           (16,441,272)
                                                                            -------------           ------------
                                                                                  489,773                647,657
  Less treasury stock, at cost, 385 shares                                           (987)                  (987)
                                                                            -------------           ------------
   Total Stockholders' equity                                                     488,786                646,670
                                                                            -------------           ------------

   Total Liabilities and Stockholders' Equity                               $     526,064           $    684,320
                                                                            =============           ============
</TABLE>


              The accompanying notes are an integral part of these
                       consolidated financial statements.

                                       F-3
<PAGE>


                                  BIOFARM, INC.
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                      YEARS ENDED OCTOBER 31, 2001 AND 2000
<TABLE>
<CAPTION>

                                                                           2001                          2000
                                                                           ----                          ----
<S>                                                                       <C>                           <C>
Revenue
  Settlement of litigation                                                                              $   25,000
  Interest                                                                $   20,218                        28,878
                                                                          ----------                    ----------
                                                                              20,218                        53,878

General and administrative expenses                                          178,102                       144,179
                                                                          ----------                    ----------

NET LOSS                                                                  $ (157,884)                   $  (90,301)
                                                                          ==========                    ==========


Basic loss per common share                                               $    (0.04)                   $    (0.02)
                                                                          ==========                    ==========

Weighted-average number of common shares
  outstanding                                                             $4,472,300                    $4,376,930
                                                                          ==========                    ==========
</TABLE>






              The accompanying notes are an integral part of these
                       consolidated financial statements.

                                       F-4
<PAGE>

                                  BIOFARM, INC.
           CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
                      YEARS ENDED OCTOBER 31, 2001 AND 2000



<TABLE>
<CAPTION>


                                        Shares
                                          of                        Additional                                         Total
                                        Common        Common         Paid-In          Accumulated       Treasury    Stockholders'
                                         Stock         Stock         Capital            Deficit           Stock       Equity
                                      ------------   ----------   ---------------   ----------------    ----------  --------------

<S>                                     <C>             <C>          <C>              <C>                              <C>
Balance, November 1, 1999               4,376,930       $4,377       $17,323,802      $ (16,350,971)                   $977,208

Purchase of treasury stock,
  at cost                                       -            -                 -                  -        $ (987)         (987)

Cancellation of common
  stock issuance                         (165,000)        (165)         (239,085)                 -             -      (239,250)

Issuance of common stock                  165,000          165              (165)                 -             -             -

Net loss                                        -            -                 -            (90,301)            -       (90,301)
                                        ---------       ------       -----------      -------------        ------      --------
Balance, October 31, 2000               4,376,930        4,377        17,084,552        (16,441,272)         (987)      646,670

Issuance of common stock                  295,000          295              (295)                 -             -             -

Cancellation of stock
  subscription agreements                       -            -          (475,000)                 -             -      (475,000)

Issuance of stock subscription
  agreements                                    -            -           475,000                  -             -       475,000

Net loss                                        -            -                 -           (157,884)            -      (157,884)
                                        ---------       ------       -----------      -------------        ------      --------

Balance, October 31, 2001               4,671,930       $4,672       $17,084,257      $ (16,599,156)       $ (987)     $488,786
                                        =========       ======       ===========      =============        ======      ========
</TABLE>


              The accompanying notes are an integral part of these
                       consolidated financial statements.

                                       F-5

<PAGE>

                                  BIOFARM, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                      YEARS ENDED OCTOBER 31, 2001 AND 2000
<TABLE>
<CAPTION>
                                                                                      2001                               2000
                                                                                      ----                               ----
<S>                                                                               <C>                                  <C>
OPERATING ACTIVITIES
  Net loss                                                                        $  (157,884)                         $ (90,301)
                                                                                  -----------                          ---------
  Adjustments to reconcile net loss to net cash
    utilized by operating activities:
      Write-off of uncollectible accrued interest                                      49,095                                  -
      Changes in:
       Accounts payable                                                                  (372)                           (17,274)
       Subscription accrued interest                                                  (20,218)                           (28,878)
                                                                                  -----------                          ---------

  Net cash utilized by operating activities                                          (129,379)                          (136,453)

INVESTING ACTIVITIES
  Investment in unregistered companies                                                (56,864)                                 -
                                                                                  -----------                          ---------

  Net cash utilized by investing activities                                           (56,864)                                 -

FINANCING ACTIVITIES
 Payment of note receivable, Stockholder                                                    -                             40,000
 Loan to third party                                                                   (4,000)                                 -
 Payments of subscriptions receivable                                                 188,051                             96,750
 Purchase of treasury stock                                                                 -                               (987)
                                                                                  -----------                          ---------

 Net cash provided by financing activities                                            184,051                            135,763
                                                                                  -----------                          ---------

            DECREASE IN CASH                                                           (2,192)                              (690)

Cash, beginning of year                                                                 2,192                              2,882
                                                                                  -----------                          ---------

Cash, end of year                                                                 $         -                          $   2,192
                                                                                  ===========                          =========
</TABLE>


SUPPLEMENTAL DISCLOSURES OF NON-CASH FINANCING ACTIVITIES:

     In 2000, the Company determined that the Convertible Note, in the amount of
     $439,250,  received  from  Litchfield  Continental,  Ltd.  pursuant  to the
     Rescission   Agreement,   dated  October  31,  1999,   was   uncollectible.
     Accordingly,  the Company elected to write off such Convertible Note and to
     cancel  the  165,000  shares of the  Company's  Common  Stock and  $200,000
     principal  amount of assumption of  Litchfield  Indebtedness  exchanged for
     such Convertible Note.

     In 2001, the Company canceled $475,000 of subscription agreements due to
     nonpayment on the related promissory notes. The Company also issued new
     subscription agreements for 950,000 shares of common stock for a total of
     $475,000.

              The accompanying notes are an integral part of these
                       consolidated financial statements.





                                       F-6
<PAGE>


                                  BIOFARM, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                            OCTOBER 31, 2001 AND 2000

NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

        Organization
        ------------

        Biofarm, Inc. (formerly Global Spill Management, Inc.) was incorporated
        in June, 1991, to acquire, operate and develop environmental contracting
        and consulting companies, and related businesses. All operating
        companies were disposed of or sold in prior years.

        Principles of consolidation
        ---------------------------

        The accompanying consolidated financial statements include the accounts
        of Biofarm, Inc. and its wholly owned subsidiaries (collectively
        referred to as the "Company" or "Biofarm") after elimination of all
        significant intercompany balances and transactions.

        Use of estimates
        ----------------

        The preparation of financial statements in conforming with accounting
        principles generally accepted in the United States of America 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 revenue and expenses during the reporting period.
        Actual results could differ from those estimates.

        Investments
        -----------

        The Company has entered into Subscription Agreements, as discussed in
        Note E, to purchase the stock of two private companies. As of January
        11, 2002, because none of the companies' impending registration
        statements has been declared effective by the SEC, the Company's
        investments do not have readily determinable market values, except as
        discussed in Note E . Consequently, the Company has recorded its
        investment in these companies at cost. If any of these shares become
        publicly traded in the future, the Company will classify them as
        available-for-sale securities and account for them in accordance with
        SFAS 115, "Accounting of Certain Investments in Debt and Equity
        Securities". The Company reviews its investments carried at cost for
        impairment.

        Income taxes
        ------------

        Income taxes are calculated using the liability method specified by
        Statement of Financial Accounting Standards ("SFAS") No. 109,
        "Accounting for Income Taxes."




                                      F-7




<PAGE>

                                  BIOFARM, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                            OCTOBER 31, 2001 AND 2000



NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

        Loss per common share
        ---------------------

        The Company adopted SFAS No. 128, "Earnings Per Share" ("EPS"), which
        provides for the calculation of basic and diluted EPS. Basic EPS
        includes no dilution and is computed by dividing the income (loss)
        available to common stockholders by the weighted-average number of
        common shares outstanding for the period. Diluted EPS reflects the
        potential dilution of securities that could share in the income (loss)
        of the Company. There is no difference in basic and diluted EPS for the
        years ended October 31, 2001 and 2000 since there are no potentially
        dilutive securities outstanding for either period presented.


NOTE B - SUBSCRIPTIONS RECEIVABLE

        In October, 1999, the Company received 14 non-negotiable,
        interest-bearing 4% promissory notes evidencing the right to subscribe
        for an aggregate of 1,500,000 shares of common stock, in the aggregate
        principal amount of $750,000. The original due date of such notes was
        extended until September 30, 2001. Through October 31, 2001, the Company
        received an aggregate of $284,800 in principal payments related to these
        notes, thereby leaving a principal balance at October 31, 2001 of
        $465,200. On October 31, 2001, the Company cancelled the remaining,
        unpaid promissory notes. On October 31, 2001, the Company received 5 new
        promissory notes from unrelated individuals for the purpose of
        subscribing to purchase a total of 950,000 shares of common stock for a
        total of $475,000 of which $9,800 was paid in the year ended October 31,
        2001. The due date on the notes is July 31, 2002. These notes are
        payable, with interest at 4%, on or before July 31, 2002. During 2001,
        the Company received $55,800 in payment of subscriptions receivable for
        which additional shares have not been issued.


NOTE C - INCOME TAXES

        The Company has deferred tax assets of approximately $4,200,000 as of
        October 31, 2001, related to net operating loss carryforwards ("NOL"),
        which have yet to be utilized. As a result of the sale of the Company's
        operating subsidiaries and the issuance of additional shares of common
        stock, the amount of the NOL of approximately $11,600,000 may be
        limited. Also, the utilization of these losses, if available, to reduce
        the future income taxes will depend upon the generation of sufficient
        taxable income prior to the expiration of the NOL. Therefore, at October
        31, 2001 and 2000, the Company has established a 100% valuation
        allowance against the deferred tax assets as the likelihood of
        recognizing this benefit cannot be certain. The net operating losses
        will expire in various years from 2010 to 2021.


                                      F-8





<PAGE>

                                  BIOFARM, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                            OCTOBER 31, 2001 AND 2000



NOTE D - PROPERTY

        The Company owns a property located in Camden, New Jersey, which is
        carried at zero value. The Company intends to offer such property for
        sale upon the resolution of certain environmental issues.


NOTE E - SUBSCRIPTION AGREEMENTS AND LETTERS OF INTENT

        As of October 31, 2001, the Company has entered into Subscription
        Agreements pursuant to which it has subscribed for the number of shares
        set forth opposite the names of the following entities:

                      Paragon Sports Group, Inc.      800,000
                      Artwork and Beyond, Inc.        600,000

        The entities whose shares have been subscribed to by the Company are
        required to file a Registration Statement with the SEC that will permit
        each entity to become a publicly traded entity. The Company is advised
        that Registration Statements have been filed with the SEC by the
        entities listed above. The subscription agreement for Artwork and
        Beyond, Inc. requires a payment of $30,000 subsequent to October 31,
        2001.

        On August 24, 2001, Biofarm, Inc. entered into a letter of intent to
        purchase two companies engaged in the transportation logistics business.


NOTE F - SUBSEQUENT EVENTS

        On January 14, 2002, the Registration Statement for shares of Paragon
        Sports Group, Inc. (See Note A (Investments) and Note E) became
        effective. The initial public offering price for Paragon's shares was
        $4.

        On January 18, 2002, Biofarm entered into another letter of intent to
        purchase a company engaged in the business of manufacturing and selling
        skin care products.








                                      F-9