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                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                                WASHINGTON, D.C.

                                  FORM 10-KSBA

                ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF

                       THE SECURITIES EXCHANGE ACT OF 1934

                     FOR THE FISCAL YEAR ENDED JULY 31, 2001

                            THE MILLBROOK PRESS INC.
           (Name of Small Business Issuer as Specified in its Charter)

            DELAWARE                                      06-1390025
(State or other jurisdiction of               (IRS Employer Identification No.)
incorporation or organization)

                             2 OLD NEW MILFORD ROAD
                              BROOKFIELD, CT 06804
                    (Address of principal executive offices)
                                 (203) 740-2220
                (Issuer's telephone number, including area code)

Securities Registered pursuant to Section 12 (b) of the Exchange Act:
                                                             Common Stock

Securities Registered pursuant to Section 12 (g) of the Exchange Act:
                                                             None

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

Check 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 Registrant's
knowledge,  in  definitive  proxy  of  information  statements  incorporated  by
reference in Part III of this Form 10-KSB or any  amendment to this Form 10-KSB.
/X/

Revenues for the Fiscal year ended July 31, 2001 were $21.6 million.

The  aggregate  market value of the voting stock held by  non-affiliates  of the
Registrant,  based upon the price of the Common Stock on October 29,  2001,  was
approximately  $5,862,000.  As of July 31, 2001, the Registrant had  outstanding
2,849,887 shares of Common Stock.

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

The following  discussion and analysis  should be read in  conjunction  with the
Financial  Statements  of The  Millbrook  Press Inc.  and  related  Notes to the
Financial Statements, which are included elsewhere in this Form 10-KSB.

OVERVIEW

GENERAL

Books    published    under   the   Millbrook    imprint   have   evolved   from
information-intensive  school and  library  books to include  its current mix of
highly graphic,  consumer-oriented  books.  Therefore,  the Company has incurred
significant  expenses relating to the establishment of the  infrastructure  that
can enable the Company to sell books to the consumer market and/or develop books
that can appeal to both the school and public  library  market and the  consumer
market.

The Company has  substantially  increased school and public library sales due to
(i) the acquisition in 1997 of Twenty-First  Century Books from Henry Holt &
Co., Inc. and (ii) greater emphasis on telemarketing and direct sales.

SALES INCENTIVES AND RETURNS

In  connection  with  the  introduction  of new  books,  many  book  publishers,
including the Company,  discount  prices of existing  products,  provide certain
promotional  allowances and give other sales incentives to their customers.  The
Company  intends to continue  such  practices in the future.  In  addition,  the
practice in the publishing industry is to permit customers including wholesalers
and retailers to return merchandise.  Most books not sold may be returned to the
Company,  and the  Company  gives  credit.  The rate of  return  also can have a
significant  impact on quarterly  results since certain  wholesalers have in the
past  returned  large  quantities  of  products  at  one  time  irrespective  of
marketplace  demand for such  products,  rather than  spreading  out the returns
during the course of the year.  The Company  computes net sales by  concurrently
deducting a reserve for returns from its gross sales.  Return allowance may vary
as a percentage  of gross sales based on actual return  experience.  The Company
believes that as gross sales to the consumer  market increase as a proportion of
its overall sales,  returns will  constitute a greater  proportion of net sales.
Although the Company believes its reserves have been adequate to date, there can
be no  assurance  that  returns  by  customers  in the  future  will not  exceed
historically  observed  percentages or that the level of returns will not exceed
the amount of  reserves  in the  future.  In the event that the amount  reserved
proves to be  inadequate,  the  Company's  operating  results  will be adversely
affected.

RESULTS OF OPERATIONS

FISCAL 2001 COMPARED TO FISCAL 2000

Fiscal  2001  revenues  increased  1.1%  from  $21,400,000  in  fiscal  2000  to
$21,600,000 in fiscal 2001. Increased sales resulted from a significant increase
in trade sales  offset by a slight  decline in the school and library  business.
The  decline in the school and  library  business  was  concentrated  in (i) the
telemarketing  sales area,  which  experienced  significant  management  changes
during the year and (ii) the low margin special sales area consisting of special

large volume one off printings  based on specific  titles.  Though the sales are
sizable they are infrequent and contribute a very low margin.

Gross profits for the year ended July 31, 2001 were $9,358,000,  or 43.3% of net
sales  compared to  $9,604,000 or 44.9% of net sales for the year ended July 31,
2000. The percentage decrease is due to a sizeable donation of books to charity.

Selling and  marketing  expenses  for fiscal 2001  increased to 31% of net sales
from 27% of net sales for fiscal 2000.  Expenses  increased by $793,000 over the
previous  year.  The major  component of the increase is the Company's  $300,000
investment in a new  unpublished  fiction  imprint,  Roaring Brook Press.  Other
increases were in telemarketing, direct marketing and direct selling materials.

General and  administrative  expenses for fiscal 2001 increased $49,000 to 9% of
net sales,  the same as a year ago. This is a result of the Company's  effort to
control costs and increase productivity.

Net operating profit for the year ended July 31, 2001 was $747,000 compared to a
profit of $1,835,000 for the previous year.

Interest  expense  decreased  from $496,000 in fiscal 2000 to $440,000 in fiscal
2001. The decrease in interest  expense is due to decreased  interest rates over
fiscal 2000 on the Company's line of credit, offset by higher borrowings.

Net income after tax for the year ended July 31, 2001 was $144,000,  compared to
a profit of $1,136,000 in the previous year.

The  Company  incurred  an  operating  loss  in the  fourth  quarter  due to the
following items. The Company recorded a severance liability of $100,000 upon the
termination of employment of Mr. Jeffrey Conrad,  the Company's former President
who  left  the  Company  as of  June 1,  2001.  A copy  of the  Termination  and
Settlement  Agreement  between  the  Company  and Mr.  Conrad was filed with the
Company's  Quarterly Report on Form 10-QSB for the quarter ended April 30, 2001.
In addition the Company  donated  $133,000 of  inventory in July 2001,  taking a
charge to cost of goods and increased the inventory reserve by $150,000 taking a
charge to cost of goods.  The  increase  in reserve  in the  quarter is due to a
change in strategy of remaindering  certain  inventory whereby the Company plans
to make further  donations or to sell certain  inventory at less than the normal
remainder value.

BALANCE SHEET

The Company believes it has an adequate reserve for product returns and customer
bad  debts.  This  reserve  was 7.5% at the end of fiscal  year 2001 and 9.6% of
accounts  receivable  at the end of fiscal year 2000.  The decline in reserve is
justified as there had been a significant  improvement  in the aging of accounts
receivable  year over year and large sales to a specific  customer at the end of
fiscal 2001 have a return limit which is less than the average  returns for that
sales  type.  The actual  returns  and bad debts for the 2001  fiscal  year were
approximately  $2,100,000 compared to $2,900,000 for fiscal 2000. The decline in
actual returns activity year over year when sales remained  constant support the
decreased reserve balance.

The Company believes that it has an adequate reserve for slow moving  inventory.
As of July 31, 2001, the reserve was 9.1% of gross inventory ($710,000) compared
to 11.5% ($869,000) as of July 31, 2000. The increase in actual inventory is due

mainly to receipt of fall 2001 titles  prior to  year-end.  The  Company  made a
significant  effort in fiscal  2001 to either  remainder  or donate  slow moving
titles.  During  fiscal 2001 the Company  either  donated or sold,  at less than
cost, inventory amounting to approximately  $675,000 as compared to $400,000 for
fiscal year 2000.

Royalty  advances have  increased  mainly due to the investment in Roaring Brook
Press, the Company's new fiction imprint.  The advances are for titles scheduled
to publish in spring  2002 and  beyond.  The  Company  believes  its reserve for
unearned  royalty  advances is adequate as of July 31, 2001.  During fiscal year
1999 the Company wrote off $650,000 of unearned  royalty  advances.  No advances
were written off during 2001 or 2000.

LIQUIDITY AND CAPITAL RESOURCES

As of July 31,  2001,  the Company  had cash and working  capital of $16,000 and
$4,100,000  respectively,  compared  to  cash  and  working  capital  of $0  and
$5,200,000, respectively as of July 31, 2000 (All cash at July 31, 2001 and 2000
was used to reduce the outstanding loan balance).

The Company has  available a $7,500,000  revolving  line of credit with People's
Bank. The line of credit  restricts the ability of the Company to obtain working
capital in the form of indebtedness,  to grant security  interests in the assets
of the Company or to pay dividends on the Company's  securities.  As of July 31,
2001,  the Company has $4,565,000  outstanding  under this line, all of which is
classified as a current  liability since it is due on demand.  The $7,500,000 is
the maximum available, however, it may be lower based upon the eligible value of
accounts  receivable  and  inventory.  As of July  31,  2001  the  maximum  loan
available  was  $6,751,000.  On October 23, 2001,  the Company and People's Bank
signed  the  Fourth  Amendment  to  the  Loan  and  Security   Agreement,   (the
"Amendment").  The Amendment  extended the term of the Agreement to December 31,
2004,  waived the  noncompliance  with certain covenants as of July 31, 2001 and
reset  certain  covenants  required to be met by the Company.  In addition,  the
Amendment  called  for an  additional  grant of  security  interest  in  certain
property,  as defined in the Agreement.  For further information relating to the
People's Bank loan agreement, see Note (4) of "Notes to Financial Statements".

Based on its current  operating  plan,  the Company  believes  that its existing
resources  together  with cash  generated  from  operations  and cash  available
through its credit line will be sufficient to satisfy the Company's contemplated
working  capital  requirements  at least  through  July 31,  2002.  Although the
Company believes that its current available resources will be sufficient to meet
its working  capital  requirements  the Company  may seek  additional  funds for
operations from borrowings or through debt or equity financing.

FORWARD-LOOKING STATEMENTS

This Form 10-KSB contains certain forward-looking  statements within the meaning
of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended, which are intended to be covered by
the  safe  harbors   created   hereby.   Investors   are   cautioned   that  all
forward-looking  statements  involve risks and  uncertainty,  including  without
limitation, the Company's future cash resources and liquidity and the ability of
the Company to fully exploit a book's sales  potential in the school and library
and  consumer  markets.  Although  the  Company  believes  that the  assumptions
underlying the forward-looking  statements contained herein are reasonable,  any

of the assumptions could be inaccurate, and therefore, there can be no assurance
that the  forward-looking  statements included in this Form 10-KSB will prove to
be  accurate.  In  light  of  the  significant  uncertainties  inherent  in  the
forward-looking  statements  included herein,  the inclusion of such information
should not be regarded as a  representation  by the Company or any other  person
that the objectives and plans of the Company will be achieved.

                                   SIGNATURES

Pursuant to the  requirements of Section 13 or 15(d) of the Securities  Exchange
Act of 1934,  the Company has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.

                                                  THE MILLBROOK PRESS INC.

Dated:  March 11, 2002                         By: /s/ David Allen
        --------------                                ----------------------------------------
                                                        David Allen
                                                        Chief Financial Officer
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