U.S. SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                  FORM 10-QSB

              [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934
                For the quarterly period ended September 30, 2001
                                       OR
                  [ ] TRANSITION REPORT PURSUANT TO SECTION 13
                OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
          For the transition period from ____________ to ____________

                         Commission File Number 0-29523


                                 SOFTSTONE INC.
                                 --------------
        (Exact name of small business issuer as specified in its charter)


                                    Delaware
                                    --------
                            (State of Incorporation)

                                   73-1564807
                                   ----------
                      (IRS Employer Identification Number)

                      5 Interstate Court, Ardmore, OK 73401
                      -------------------------------------
                    (Address of principal executive offices)

                                  580-233-3888
                                  ------------
                          (Issuer's telephone number)



     Check  whether  the  issuer  (1)  filed all reports required to be filed by
Section  13  or  15(d) of the Exchange Act of 1934 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 [ ]

     As  of  November 8, 2001, the Company had 5,810,804 shares of its $.001 par
value  common  stock  issued  and  outstanding.

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




<PAGE>
                         PART I - FINANCIAL INFORMATION

Item  1.          Financial  Statements



















                                        2
<PAGE>
                                 SOFTSTONE Inc.
                          (A Development Stage Company)
                                  Balance Sheet
                      September 30, 2001 and June 30, 2001

                                                   Unaudited
                                                  September 30,     June 30,
                                                      2001            2001

                                     ASSETS
<TABLE>
<CAPTION>
CURRENT  ASSETS
<S>                                                <C>              <C>
  Cash and cash equivalents                        $      473       $    12,673
  Other current assets                                  4,473             4,473
                                                   ----------       -----------

      Total  current assets                             4,946            17,146

PROPERTY AND EQUIPMENT, net                           481,753           490,644

OTHER  ASSETS
  Patent                                               92,778            94,444
  Patent  license  agreement,  net
  Other                                                 9,015             8,116
                                                   ----------       -----------

      Total other assets                              101,793           102,560

      Total Assets                                 $  588,492       $   610,350


                      LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT  LIABILITIES
  Accounts payable                                 $   16,998       $    16,998
  Accrued expenses                                     21,082            19,981
  Notes payable and current portion
    of long-term debt                                 166,258           192,231
                                                   ----------       -----------

      Total  current liabilities                      204,338           229,210

LONG-TERM DEBT, less current portion                   43,705            24,125

LOANS FROM STOCKHOLDERS                               439,093           424,416

STOCKHOLDERS'  EQUITY
  Common  stock  -  par  value  $.001;
    30,000,000  shares  authorized;  issued  and
    outstanding,  5,860,804  and  4,486,053
    respectively                                        5,861             4,486
  Additional paid-in capital                        1,770,787         1,632,528
  Deficit accumulated during the development
    stage                                          (1,875,292)       (1,704,415)
                                                   ----------        ----------
      Total Stockholders' Equity                      (98,644)          (67,401)
                                                   ----------        ----------

      Total Liabilities and Stockholders' Equity   $  588,492        $  610,350
                                                   ==========        ==========
</TABLE>


    The acompanying notes are an integral part of these financial statements.

                                        3
<PAGE>
                                 SOFTSTONE Inc.
                          (A Development Stage Company)
                            Statement of Operations
          From October 7, 1998 (inception) through September 30, 2001
        and for the Three Month Periods Ended September 30, 2000 and 2001
                                  (Unaudited)

<TABLE>
<CAPTION>
                                                            From October 7, 1998
                          Three Months Ended September 30,  (Inception) through
                          --------------------------------
                                2001          2000           September 30, 2001
                            ----------      ----------      --------------------
<S>                         <C>             <C>                 <C>
REVENUES                    $    2,882      $    7,022          $    37,067

OPERATING COSTS AND EXPENSES
  General, selling, and
    administrative             163,061         162,550            1,851,014
                            ----------      ----------          -----------

  Operating  loss             (160,179)       (155,528)          (1,813,947)

OTHER  EXPENSE
  Interest                      10,697           6,087               61,344
                            ----------      ----------          -----------

  Loss before income taxes    (170,876)       (161,615)          (1,875,291)

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

      NET LOSS              ( $170,876)      ($161,615)         ($1,875,291)
                            ==========      ==========          ===========

Net (loss) per share            ($0.03)         ($0.02)              ($0.34)
                            ==========      ==========          ===========

Average common shares
  outstanding                5,402,554       7,302,690            5,575,652
                            ==========      ==========          ===========
</TABLE>




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

                                        4
<PAGE>

                                 SOFTSTONE Inc.
                          (A Development Stage Company)
                            Statement of Cash Flows
          From October 7, 1998 (inception) through September 30, 2001
        and for the Three Month Periods Ended September 30, 2000 and 2001
                                  (Unaudited)

<TABLE>
<CAPTION>
                                                            From October 7, 1998
                          Three Months Ended September 30,  (Inception) through
                          --------------------------------
                                2001          2000           September 30, 2001
                            ----------      ----------      --------------------
<S>                         <C>             <C>                 <C>
Cash flows from operating
  activities
    Net  loss               ($170,876)      ($161,615)         ($1,875,291)
                            ---------       ---------          -----------

Adjustments to reconcile
  net income to net cash
  provided by operating
  activities:
    Depreciation and
      amortization             20,558          20,557              158,353
    Noncash  compensation      51,415          47,813              538,747
    Write-off samples                                               11,712
Changes in assets and
  liabilities
    (Increase) decrease in
      other current assets                                         (24,517)
    Increase (decrease) in
      accounts payable                        (38,139)              10,129
    Increase (decrease) in
      accrued expenses          1,101          (1,993)              26,337
                            ---------       ---------          -----------

      Total  adjustments       73,074          28,238              720,761
                            ---------       ---------          -----------

      Net cash used by
        operating activities  (97,802)       (133,377)          (1,154,530)
                            ---------       ---------          -----------

Cash flows from investing
  activities
    Purchases of property
      and equipment           (10,000)         (9,123)            (429,859)
    Purchases of samples
    Other deposits                                                    (384)
                            ---------       ---------          -----------

      Net cash used by
        investing activities  (10,000)         (9,123)            (430,243)

Cash flows from financing
  activities
    Investment by
      stockholders             14,676                              265,617
    Proceeds from
      borrowings                               84,710              320,752
    Payments on borrowings     (6,394)                            (161,528)
    Issuance of stock
      pursuant to offering     87,320          53,125            1,160,405
                            ---------       ---------          -----------

      Net cash provided by
        financing activities   95,602         137,835            1,585,246
                            ---------       ---------          -----------

Net increase (decrease)in
  cash and cash equivalents   (12,200)         (4,665)                 473

Cash and cash equivalents
  at beginning of period       12,673           7,571                    0
                            ---------       ---------          -----------

Cash and cash equivalents
  at end of period               $473          $2,906                 $473
                            =========       =========          ===========

Supplemental cash flow
  information:
    Cash paid during the
      period for interest      $5,526          $3,168              $18,978
                            =========       =========          ===========

Cash paid during the
  period for income taxes          $0              $0                   $0
                            =========       =========          ===========
</TABLE>


                                        5
<PAGE>
                                 SOFTSTONE Inc.
                          (A Development Stage Company)
                            Statement of Cash Flows
          From October 7, 1998 (inception) through September 30, 2001
        and for the Three Month Periods Ended September 30, 2000 and 2001
                                  (Unaudited)



Noncash  investing  and  financing  activities:
-----------------------------------------------

   During  the  three  months  ended  September  30,  2000:
   Common  stock  was  issued  for  office  equipment  valued  at  $18,525.
   Common  stock  totaling  300,000  shares  was  issued to a related company to
   acquire  a  patent.

   During  the  three  months  ended  September  30,  2001:
   The  Company  issued  899,376  shares  of  common  stock  to  effect a merger
   resulting  in  $899  of  goodwill.





















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

                                        6
<PAGE>
                                 SOFTSTONE Inc.
                          (A Development Stage Company)
                  Statement of Stockholder's Equity (Deficit)
          From October 7, 1998 (inception) through September 30, 2001
                  and the Three Months Ended September 30, 2001
                                  (Unaudited)

<TABLE>
<CAPTION>
                                                                                Deficit
                                                                              Accumulated
                                                              Additional         During
                                         Common Stock           Paid-in        Development      Unearned
                                      Shares      Amounts       Capital            Stage      Compensation
                                    -----------   --------    ----------      ------------    ------------
<S>                                  <C>            <C>        <C>              <C>              <C>
Issuance of common stock for cash    5,000,000       $5,000      $51,100        $      -         $    -
 (October 7, 1998 - Inception)

Stock issued for cash of $293
  and contributed services             292,500          293       43,582

Net loss                                                                        (197,426)
                                     ---------      -------     ---------       --------         ------

Balance, June 30, 1999               5,292,500        5,293        94,682       (197,426)

Stock issued in exchange for
 services ($0.85/share)
 (August 1, 1999)                      250,000          250       212,250

Stock issued for services and
  a vehicle ($1.00/share)
  (August 24, 1999)                     22,500           22        22,478

Warrants issued to employees
  (October 1, 1999)                                                75,000                       (75,000)

Stock issued for settlement of
  short-term  notes  payable
  ($34,250) and cash of $16,903
  ($1.00/share) (August 31
  through December 29, 1999)           400,000          400       382,697

Stock issued in exchange for
  services ($1.00/share)
  (October 28 through
  December 1, 1999)                   210,000           210       209,790

Stock issued for cash, net
  of offering costs of
  $25,783 ($1.25/share)
  (Februarty 7 through May 31,
  2000)                               423,190           423       502,782

Amortization of unearned
  compensation                                                                                   11,250

Net loss                                                                      (1,109,180)
                                     ---------      -------     ---------       --------         ------

Balance, June 30, 2000               6,598,190        6,598     1,499,679     (1,306,606)       (63,750)

Stock issued for cash at
  $1.25/share (July 1 through
  July 31, 2000)                       42,500            43        53,082

Unearned warrants granted to
  employee  upon  termination
  August  9,  2000                                                (63,750)                       63,750

Warrants excercised
  (August 10, 2000)                   675,000           675

Stock issued in exchange for
  patent ($0.33/share)
  (August 12, 2000)                   300,000           300        21,622

Stock issued in exchange for
  office  equipment ($1.03/share)
  (August 12, 2000)                    18,000            18        18,507

Net loss for three months
  ended September 30, 2000                                                      (161,615)
                                     ---------      -------     ---------       --------         ------

Balance, September 30, 2000         7,633,690         7,634     1,529,140     (1,468,221)             0

Stock contributed back to
  Company by principals
  (April 4, 2001)                  (3,947,698)       (3,948)        3,948

Stock issued in exchange for
  services ($0.10/share) (April
  20 through April 23, 2001)          522,961           523        51,773

Stock issued in exchanged for
  cash ($0.40/share) (June 1
  through June 30, 2001) net of
  offering costs $62,896              277,100           277        47,667

Net loss, October 1, 2000 to
  June  30,  2001                                                               (236,194)
                                     ---------      -------     ---------       --------         ------

Balance, June 30, 2001               4,486,053        4,486     1,632,528     (1,704,415)             0
</TABLE>


                                        7
<PAGE>
                                 SOFTSTONE Inc.
                          (A Development Stage Company)
                  Statement of Stockholder's Equity (Deficit)
          From October 7, 1998 (inception) through September 30, 2001
                  and the Three Months Ended September 30, 2001
                                  (Unaudited)

<TABLE>
<CAPTION>
                                                                                Deficit
                                                                              Accumulated
                                                              Additional         During
                                         Common Stock           Paid-in        Development      Unearned
                                      Shares      Amounts       Capital            Stage      Compensation
                                    -----------   --------    ----------      ------------    ------------
<S>                                  <C>            <C>        <C>           <C>                 <C>

Stock issued in exchanged for cash
  ($0.40/share) (July 1 through
  September  30,  2001)                 218,300        219        87,101

Stock issued in exchange for
  services ($0.20/share)
  (July 13, 2001)                       257,075        257        51,158

Stock issued to effect merger
  ($0.001/share)(July 24, 2001)         899,376        899

Net loss                                                                        (170,877)
                                     ---------      -------     ---------     ----------         ------

Balance, September 30, 2001          5,860,804       $5,861    $1,770,787    ($1,875,292)            $0
                                     =========       ======    ==========     ==========         ======
</TABLE>









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

                                        8
<PAGE>

                                SOFTSTONE, INC.
                          (A Development Stage Company)

                          NOTES TO FINANCIAL STATEMENTS

                      June 30, 2001 and September 30, 2001
                                  (Unaudited)



NOTE  A  -  NATURE  OF  OPERATIONS  AND  SUMMARY  OF
            ACCOUNTING  POLICIES

Softstone,  Inc.  (the  "Company"),  a  development stage company, was formed to
manufacture a patented rubber product used in the road and building construction
industries  and  has been in the development stage since inception.  The Company
plans to create rubber modules entirely from recycled tires which can be used in
the  construction  of roads, driveways, decks, and other types of walkways.  Its
principal  activities have consisted of financial planning, establishing sources
of  production  and   supply,  developing  markets,  and  raising  capital.  Its
principal  operations have not started and the Company has no present sources of
significant  revenues.

On  October  7,  1998,  Soft Stone Building Products, Inc. ("SSBI" - an Oklahoma
corporation and predecessor to the Company) was incorporated.  Effective May 31,
1999,  SSBI  was  merged with and into Softstone, Inc. (incorporated January 28,
1999  under  the  laws  of  the  State  of  Delaware)  and SSBI was subsequently
dissolved.  Each share of previously outstanding common stock was converted into
2,500  shares  of  common  stock of the new entity and the new capitalization is
reflected  in the accompanying financial statements as if it had occurred at the
beginning  of  the  period  presented.

On  July  24,  2001,  the Company completed its plan of reorganization involving
Kilkenny Acquisition Corp. (Kilkenny) whereby the Company is the survivor and in
control  of  the  board  of  directors.  The  merger  agreement provides for the
exchange  of  899,376  shares  of  the Company's common stock for all the common
stock  of  Kilkenny.  In  connection with this merger, on April 4, 2001, certain
insider  shareholders  of  the  Company  contributed  3,947,686  shares of their
common  stock to the Company effectively reducing the then outstanding shares of
stock  to  3,685,992.  Subsequent  issues  of common stock for cash and services
increased  the  outstanding  stock of the Company to 4,590,646.  The issuance of
the  above  mentioned  shares  of  the Company's common stock on the merger date
increased  the  common  stock  of  the  Company  to  5,669,033  with the Company
shareholders,  prior  to the merger, owning approximately 81% of the outstanding
shares  of  the  Company.

                                        9
<PAGE>


1.    Cash  and  Cash  Equivalents
      ----------------------------

The  Company  considers  all  highly  liquid debt instruments with a maturity of
three  months  or  less  to  be  cash  equivalents.

2.    Property  and  Equipment
      ------------------------

Property  and  equipment  are  stated  at  cost.  Expenditures  for  repairs and
maintenance are charged to expense as incurred.  Upon sale, retirement, or other
disposition,  the cost and related accumulated depreciation are removed from the
accounts  and  any  resulting  gain  or  loss is reflected in operations for the
period.  The  Company depreciates property and equipment using the straight-line
method  over  their  estimated  useful  lives  ranging  from  five to ten years.

Long-lived  assets  to  be  held  and  used are reviewed for impairment whenever
events or changes in circumstances indicate that the related carrying amount may
not  be recoverable.  When required, impairment losses are recognized based upon
the  estimated  fair  value  of  the  asset.

3.    Patent  and  Patent  License  Agreement
      ---------------------------------------

Patent  rights  acquired  under  a  license  agreement  are  amortized using the
straight-line  method  over  fifteen years.  During August, 2000, the patent was
acquired outright in exchange for 300,000 shares of common stock, forgiveness of
debt  and  assumption  of  additional  debt.

4.    Revenue  Recognition

The  Company  currently  has  no  significant  revenues  as  it  is still in the
development  stage.

5.    Income  Taxes
      -------------

Deferred  income  taxes  are  provided  on temporary differences between the tax
basis  of  an  asset  or  liability  and  its  reported  amount in the financial
statements  that  will  result in taxable or deductible amounts in future years.
Deferred income tax assets or liability are determined by applying the presently
enacted  tax  rates  and  laws.

6.    Fair  Value  of  Financial  Instruments
      ---------------------------------------

The  carrying  amount of all financial instruments at June 30,2001 and September
30,  2001,  which  consist of various notes and loans payable, approximate their
fair  values.

                                       10
<PAGE>
7.    Use  of  Estimates
      ------------------

In  preparing  financial  statements   in  conformity  with  generally  accepted
accounting  principles, management is required to make estimates and assumptions
that  affect  certain  reported  amounts  and  disclosures,  accordingly, actual
results  could  differ  from  those  estimates.

8.     Earnings  Per  Share
       --------------------

Earnings  per  share  is computed based on the weighted average number of common
shares  outstanding  for  the  period.  The  company has experienced losses from
operations  since  inception. Accordingly, no dilutive computations are required
as  such  computations  would  be  anti-dilutive.


NOTE  B  -  PROPERTY  AND  EQUIPMENT
Property  and  equipment  consist  of  the  following:
<TABLE>
<CAPTION>
                                                    September  30,    June  30,
                                                         2001            2001
                                                    --------------    ---------
<S>                                                    <C>            <C>
     Furniture and computer equipment                  $  44,029      $  44,029
     Production  and  other  equipment                   522,318        512,318
     Vehicles                                             59,869         59,869
                                                       ---------      ---------

                                                         626,216        616,216
     Less:  Accumulated depreciation and
       amortization                                     (144,463)      (125,572)
                                                      ----------     ----------

                                                      $  481,753     $  490,644
                                                      ==========     ==========
</TABLE>


NOTE  C  -  NOTES  PAYABLE

Notes  payable  consist  of  the  following:

<TABLE>
<CAPTION>
                                                    September  30,    June  30,
                                                         2001            2001
                                                    --------------    ---------
<S>                                                    <C>            <C>
     Revolving note payable to bank; interest due
     monthly at 10% (variable);
     due December 4, 2001                              $   80,358     $  80,358

     Demand notes payable to stockholder, 8%
     interest  rate, agreed to be due after
     September  30,  2002                                 278,212       258,537

     Bank term loan; 9.5% interest rate;
     guaranteed by principal stockholder, due
     December 23, 2001                                     65,000        65,000
</TABLE>

                                       11
<PAGE>
<TABLE>
<CAPTION>
<S>                                                      <C>            <C>
     Note payable to stockholder; no interest rate;
     agreed to  be  due  after  September 30, 2002        160,879       165,879

     Note payable to finance vehicle, 9.5% interest
     rate, maturing December, 2004, collateralized
     by vehicle                                            18,662        19,638

     Note payable to bank, collateralized by
     tractor,  9% (variable), payable in 60 monthly
     installments beginning  July  29, 2001                 9,922        10,360

     Refinanced bank term loan; payable in
     semiannual payments of $6,485, including
     interest  at  8.00% (variable); collateralized
     by equipment, accounts receivable and intangibles
     and guaranteed by the principal stockholder of
     the Company, due July 15, 2005                        36,023        41,000
                                                         --------      --------

                                                          649,056       640,772

          Less:  current portion                          166,258       192,231
                                                         --------      --------

     Long-term  debt                                     $482,798      $448,541
                                                         ========      ========
</TABLE>

The  following  is a summary of maturities of principal under long-term debt for
years  ending  September  30:

<TABLE>
<CAPTION>
<S>                                              <C>
                       2001                      $166,258
                       2002                       453,507
                       2003                        14,415
                       2004                         9,661
                       2005                         5,215
                                                 --------
                                                 $649,056
                                                 ========
</TABLE>

NOTE  D  -  COMMON  STOCK  AND  WARRANTS

On  January  28,  1999, the Company issued 395,000 warrants and on July 1, 1999,
issued 275,000 additional warrants to several stockholders of the Company.  Each
warrant  gives  the  holder the right to purchase one share of common stock at a
price  of  $.50  per  share  at anytime on or before January 28, 2004.  The fair
value  of  each  warrant, estimated on the date of grant using the minimum value
method,  is  nominal.

During  October  1999, the Company issued warrants to purchase 150,000 shares of
common  stock  at  $.50  per  share  to two employees.  The warrants vest over a
five-year  period  and resulted in compensation of $75,000, of which $63,750 was
unearned  at  June  30,  2000, and will be recognized over the remaining vesting
period.  The  fair value of these warrants does not exceed the compensation cost
recognized  for financial reporting.  During the fiscal year end June 30,  2001,
the  one  employee  terminated  and  another exercised his warrants with paid-in
capital  charged  for  the  unearned compensation.  At June 30, 2001, a total of
145,000  warrants  remained  outstanding.

                                       12
<PAGE>
During  August  2000,  the  Company purchased office equipment by issuing 18,000
shares  of  its common stock and recording the office equipment at its estimated
fair  value based on invoiced cost of $1.03 for each share of stock issued.  The
Company also issued 300,000 shares of its common stock to acquire all the patent
rights  for  its  production  process,  recording  as cost of the newly acquired
rights  the  estimated  predecessor  cost  of  the  patent  rights acquired, and
stockholders exercised their rights to acquire 675,000 shares of common stock at
par  value.

In  April  2001,  pursuant  to  the merger agreement discussed in Note A certain
insider  stockholders  contributed back to the Company 3,947,698 shares of their
common  stock, and this common stock was cancelled, and 522,961 shares of common
stock  valued  at  $.10  was  issued to consultants and an attorney for services
rendered  in  acquiring  capital  and  facilitating  the  merger.

Compensation
------------
During  August  1999, the Company entered into employment contracts with two key
employees,  resulting  in the issuance of 250,000 shares of the Company's common
stock.  Such  contracts  are  for  a  term  of  12  months and contain a vesting
provision  requiring  the  employees,  in  the  event  of  early  termination of
employment,  to either surrender to the Company the pro rata unearned portion of
the  stock  issued  or  to  purchase  the  stock  at  a price of $.85 per share.
Additionally,  the  Company issued 22,500 shares of stock to another employee in
exchange  for a vehicle and services that vested immediately.  Also, the Company
issued  210,000  shares  of  stock to employees and on-employees in exchange for
services  that  vested  immediately.  These  agreements  result  in compensation
expense  of approximately $432,500 recognized by the Company during fiscal 2000.
During  the  three  month  period  ending September 30, 2001, the Company issued
182,075  shares  to  employees  of the Company as compensation and an additional
75,000  shares  for  consulting  fees.

Stock  Offering
---------------
Pursuant  to  Rule 504 of Regulation D ("504 offering") of the Securities Act of
1933,  the Company offered for sale 400,000 shares of its common stock for $1.00
per  share  under  an  Offering  Memorandum  dated August 24, 1999.  The Company
offered 480,000 shares of common stock under a second 504 offering for $1.25 per
share,  of  which 423,190 have been sold as of June 30, 2000.  During the fiscal
year  ended  June  30, 2001, an additional 42,500 shares were sold in connection
with  the  second  offering.

In May 2001, the Company, pursuant to Rule 504, offered 625,000 shares of common
stock  at $.40 per share. Prior to June 30, 2001, 277,100 shares were issued and
an  additional  218,300  shares  were  sold during the three month period ending
September  30,  2001.  Offering  costs  of the offering totaled $62,896 of which
$52,296  related  to  the  shares  of stock issued for services mentioned above.

                                       13
<PAGE>


NOTE  E  -  INCOME  TAXES

The  Company's  effective income tax  benefit differed from the benefit computed
using  the  federal  statutory  tax  rate  are  as  follows:
<TABLE>
<CAPTION>
                                                    Three  Months  Ended
                                                    --------------------
                                            September  30,        September  30,
                                                 2001                   2000
                                            --------------        --------------
<S>                                           <C>                    <C>
     Income tax benefit at federal
       statutory rate                         $  61,515              $  58,000
     Change in valuation allowance              (61,515)               (58,000)
                                              ----------             ----------

                                              $       -              $       -
</TABLE>

<TABLE>
<CAPTION>
                                                    From  October  7,  1998
                                                      (inception)  through
                                                          September  30,
                                                                2001
                                                    ------------------------
<S>                                                         <C>
     Income tax benefit at federal statutory rate           $  643,372
     Nondeductible  expenses                                     5,870
     Other,  including  graduated  rates                        25,863
     Change  in  valuation  allowance                         (675,105)
                                                            ----------

                                                            $        -
</TABLE>

Components  of  deferred  tax  assets  at  are  as  follows:
<TABLE>
<CAPTION>
                                              September  30,        June  30,
     Assets                                         2001              2001
                                              --------------        ---------
<S>                                             <C>                 <C>
       Net  operating  loss  carryforward       $  675,105          $ 608,693
       Valuation  allowance                       (675,105)          (608,693)
                                                ----------          ---------

                                                $        -          $       -
</TABLE>

The  valuation allowance increased $414,891 for the year ended June 30, 2001 and
$61,515  for  the  three  months  ended  September  30,  2001.

A valuation allowance is provided for deferred tax assets when it is more likely
than  not  that  some  portion  or  all  of  the deferred tax assets will not be
realized.  At  September  30,  2001  and  June  30,  2001, the Company has a net
deferred  tax asset mainly related to a net operating loss carryforward incurred
during  its  first year of operations.  As such carryforward can only be used to
offset  future  taxable  income, management has fully reserved this net deferred
tax  asset  with  a  valuation  allowance  until it is more likely than not that
taxable  income  will  be  generated.

                                       14
<PAGE>

NOTE  F  -  RELATED  PARTY  TRANSACTIONS

In  August  2000,  the company completed its acquisition of the patent rights to
its  production  process.  This  transaction  involved  the  issuance of 300,000
shares  of  common  stock to a corporation owned by stockholders of the Company.
Office  equipment  was  acquired  from  a stockholder for the issuance of common
stock  and certain shareholders contributed portions of their common stock which
was  cancelled  to  facilitate  the  merger  discussed  in  Note A.  Most of the
equipment  used  in  the  Company's  manufacturing  process was purchased from a
company  controlled by a shareholder of the Company.  In July, 2001, the Company
issued 100,000 shares of stock to the Company president in exchange for services
rendered.


NOTE  G  -  GOING  CONCERN

As  shown  in  the accompanying financial statements, the Company incurred a net
loss  of $1,875,291 from October 7, 1998 (inception) through September 30, 2001,
and as of that date, the Company's current liabilities exceeded its total assets
by $199,392.  These factors create an uncertainty about the Company's ability to
continue  as  a  going  concern.  The  Company  management  is in the process of
executing  a  plan  raise  additional  funds  through  the  sale  of  stock  to
shareholders  to  purchase  equipment  and  go  into full scale production.  The
financial  statements  do not include any adjustments that might be necessary if
the  Company  is  unable  to  continue  as  a  going  concern.









                                       15
<PAGE>

Item 2.  Management's Discussion and Analysis of Financial Condition and Results
         of  Operations

     The  following  discussion  and analysis should be read in conjunction with
the  financial statements and the accompanying notes thereto and is qualified in
its  entirety  by  the  foregoing  and  by  more  detailed financial information
appearing  elsewhere.  See  "Item  1.  Financial  Statements."

     Results of Operations - First Quarter of Fiscal Year 2002 Compared to First
    ----------------------------------------------------------------------------
     Quarter  of  Fiscal  Year  2001
     -------------------------------

     Softstone  had sales of $2,882 in Q1 2002, as compared with sales of $7,022
in  Q1  2000  (Softstone's  fiscal  year  ends on June 30).  Until Softstone (i)
acquires  equipment  that  produces wire-free chips from shredded tires and (ii)
refurbishes its tire shredder, it is unable to operate profitably.  Accordingly,
Softstone is not pursuing sales that must be made before such equipment purchase
and  renovation  takes  place.

     Our  general, selling and administrative expenses - which have been devoted
to  raising  capital  and  acquiring a public market for our common stock - were
$163,061  in  Q1  2001  as  compared  with  $162,550  in  Q1  2000.

     We  had a loss of $170,876 in Q1 2001, or $0.03 a share, as compared with a
loss  of  $161,615  in  Q1  2000,  or  $0.02  a  share.

     We covered our $170,876 loss in Q1 2001 by net borrowings of $9,181 and the
sale  of  $87,320  in stock in private placements.  Some $73,074 of our loss was
attributed  to  depreciation  and  amortization ($20,558), non-cash compensation
($51,415)  and  accrued  but  unpaid  expenses ($1,101).  We covered our loss of
$161,615  in  Q1 2000 by borrowings of $84,710 and the sale of $53,125 in stock.
Some  $20,557  of this loss was attributed to depreciation and amortization, and
$47,813  was  attributed  to  non-cash compensation, but these non-cash expenses
were  offset  somewhat  by  $38,139  in  payments made on accounts payable and a
$1,993  decrease  in  accrued  expenses.


     OUTLOOK

     The  statements  made  in  this  Outlook  are  based  on  current plans and
expectations.  These statements are forward looking, and actual results may vary
considerably  from  those  that  are  planned.

     We  propose  to  raise  additional  funds  for  the  renovation of our tire
shredder  and  the  purchase  of  equipment  that  produces wire-free chips from
shredded  tires.  We  have not identified the source of these funds.  We project
that  we  will  commence  to  operate profitably when we do acquire these needed
funds  of  approximately  $150,000.

                                       16
<PAGE>

                           PART II - OTHER INFORMATION

Item  2.  Changes  in  Securities

     When  Kilkenny  Acquisition  Corporation  was acquired by Softstone Inc. on
July  24,  2001, all the holders of 500,000 shares of Kilkenny common stock were
to  exchange  their shares for 1,078,387 shares of common stock of Softstone.  A
total  of  899,376  Softstone  shares have been issued in this exchange, and the
balance  of  179,011  shares  will  be exchanged in November 2001 when Softstone
obtains  a  CUSIP number for its common stock.  Also, during July 2001 Softstone
issued  $87,320  worth  of  its  common stock in a private placement exempt from
registration  pursuant  to  Regulation D, Rule 506.  The details of the exchange
and  the  sale  of  stock  were described in a Form 8-K  filed  by  Softstone on
August  8,  2001,  which  is  incorporated  by reference.  Commission  File  No.
000-29523.

Item  6.  Exhibits  and  Reports  on  Form  8-K

     (a)  Exhibits

          The  following  exhibits  are filed, by incorporation by reference, as
part  of  this  Form  10-QSB:

          2              Agreement  and  Plan of Reorganization of July 24, 2001
                         between Softstone, Inc. and Kilkenny Acquisition Corp.*

          3              Certificate  of  Incorporation  of  Softstone  Inc.*

          3.1            Bylaws  of  Softstone,  Inc.*

         10              Lease Agreement of  February 1, 2000,  between  Ardmore
                         Development Authority, as lessor, and Softstone,  Inc.,
                         as  lessee.*

         10.1            Scrap  Tire  Disposal  Agreement  of  January 11, 2000,
                         between Michelin North America,  Inc.,  and  Softstone,
                         Inc.*

         10.2            Letter  of  intent  of  May  1,  2001,  of  Little  Elm
                         Independent School District regarding  the  Little  Elm
                         Walking  Trail.*

         16              Letter  of  August  8,  2001 of Baron Accountancy Corp.
                         agreeing with the statements  made  in  this  Form  8-K
                         by Softstone, Inc., concerning  Softstone's  change  of
                         principal  independent  accountants.*

         16.1            Letter  of  August  27,  2001  of  Grant  Thornton LLP.
                         agreeing with the statements  made  in  this  Form  8-K

                                       17
<PAGE>

                         by Softstone, Inc.,  concerning Softstone's  change  of
                         principal  independent  accountants.**

         99              United  States  Patent  No.  5,714,219.*

         *     Previously filed with Form 8-K August 8, 2001 Commission File No.
               000-29523;  incorporated  by  reference.

         **    Previously filed with Form 8-K  August  27,  2001 Commission File
               No. 000-29523;  incorporated  by  reference.



     (b)  Reports  on  Form  8-K

          Form  8-K  July  24,  2001,  filed  August 8, 2001, reporting Item 1 -
Changes  in  Control  of  Registrant;  Item  2  -  Acquisition or Disposition of
Assets;  Item  4 - Changes in Registrant's Certifying Accountant; Item 5 - Other
Events;  and  Item  6  -  Resignations  of  Directors  and  Executive  Officers.
Commission  file  number  000-29533.

          Amendment  No.  1  to  Form 8-K July 24, 2001, filed October 26, 2001,
reporting  Item  1 - Changes in Control  of  Registrant; Item 2 - Acquisition or
Disposition  of  Assets; Item 4 - Changes in Registrant's Certifying Accountant;
Item  5  -  Other  Events; Item 6 -  Resignations  of  Directors  and  Executive
Officers;  Item  7  -  Financial Statements and Exhibits; and Item 8 - Change in
Fiscal  Year.  Commission  file  number  000-29533.

          Form  8-K  August  21, 2001, filed August 27, 2001, reporting Item 4 -
Changes  in  Registrant's  Certifying  Accountant.  Commission  file  number
000-29533.



                                   SIGNATURES

In  accordance  with the requirements of the Exchange Act, the registrant caused
this  report  to  be  signed  on  its  behalf by the undersigned, thereunto duly
authorized.

                                           SOFTSTONE  INC.


                                           By:/s/Keith  P.  Boyd
                                              ----------------------------------
                                              Keith  P.  Boyd
                                              Chief  Executive  Officer

Dated:  November  16,  2001

                                       18