<PAGE>

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 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  June  30,  2002

[ ]     Transition  Report  pursuant to 13 or 15(d) of the Securities Exchange
        Act  of  1934

        For  the  transition  period ___________ to ____________


          Commission  File  Number     000-32013
                                       ---------

                               MEGAPRO TOOLS INC.
          -----------------------------------------------------------------
          (Exact name of small Business Issuer as specified in its charter)

     NEVADA                                            91-2037081
-------------------------------                        --------------------
(State or other jurisdiction of                        (IRS Employer
incorporation or organization)                         Identification No.)


#5-5492 PRODUCTION BOULEVARD
SURREY, BRITISH COLUMBIA, CANADA                       V3S  8P5
----------------------------------------               ------------
(Address of principal executive offices)               (Zip Code)

Issuer's telephone number, including area code:        (604) 533-1777
                                                       --------------

                                 NOT APPLICABLE
           -----------------------------------------------------------------
          (Former  name,  former  address  and  former  fiscal  six  months,
                          if changed since last report)

Check  whether  the issuer (1) 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 issuer was required to file such
reports),  and  (2) has been subject to such filing requirements for the past 90
days  [X]  Yes    [  ]  No

State the number of shares outstanding of each of the issuer's classes of common
stock,  as  of  the  latest practicable date:  7,205,100 shares of common stock,
$0.001  par  value  outstanding  as  of  July  31,  2002.


<PAGE>

                         PART 1 - FINANCIAL INFORMATION

Item  1.          Financial  Statements

The accompanying unaudited financial statements have been prepared in accordance
with  the  instructions  to Form 10-QSB and Item 310 (b) of Regulation S-B, and,
therefore, do not include all information and footnotes necessary for a complete
presentation  of  financial  position,  results  of  operations, cash flows, and
stockholders'  equity  in  conformity  with  generally  accepted  accounting
principles.  In  the opinion of management, all adjustments considered necessary
for a fair presentation of the results of operations and financial position have
been  included  and  all  such  adjustments  are  of  a normal recurring nature.
Operating  results  for  the  six months ended June 30, 2002 are not necessarily
indicative  of the results that can be expected for the year ending December 31,
2002.

<PAGE>


<TABLE>
<CAPTION>

--------------------------------------------------------------------------------
                                                           MegaPro  Tools,  Inc.
                                                     Consolidated Balance Sheets
                                                          (Stated in U.S. Funds)

                                                June 30,   December 31,
                                                   2002           2001
--------------------------------------------------------------------------------
                                               (Unaudited)    (Audited)
<S>                                            <C>          <C>
Assets

Current
  Cash                                         $   75,715   $  8,241
  Accounts receivable                             172,416    197,335
  Income taxes refundable                          17,996     17,996
  Inventories                                     302,254    375,250
  Prepaid expenses                                 13,947      7,305
                                               ----------------------
Total Current Assets                              582,328    606,127

Fixed assets                                      209,437    209,112

Deferred compensation (Note 7)                    347,208          -

Deferred income taxes                             106,523     60,012
                                               ----------------------

Total Assets                                   $1,245,496   $875,251
=====================================================================

Liabilities and Stockholders' Equity

Liabilities

Current
  Bank indebtedness                            $   13,943   $ 23,839
  Accounts payable                                192,719    241,721
  Accrued liabilities                              17,467     27,869
  Director's loan payable (Note 3)                100,019     20,000
  Loans and notes payable (Note 5)                 88,068     88,680
                                               ----------------------
Total Liabilities                                 412,216    402,109
                                               ----------------------

Stockholders'  equity
  Common stock                                      7,205      6,847
  Additional paid-in capital                      878,653    361,111
  Accumulated other comprehensive loss
    Foreign currency translation adjustment       (20,681)   (28,448)
  Retained earnings (accumulated deficit)         (31,897)   133,632
                                               ----------------------
Total Stockholders' Equity                        833,280    473,142
                                               ----------------------

Total Liabilities and Stockholders' Equity     $1,245,496   $875,251
=====================================================================
</TABLE>


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


<PAGE>


<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
                                                           MegaPro  Tools,  Inc.
                                   Consolidated Interim Statements of Operations
                                                          (Stated in U.S. Funds)
                                                                     (Unaudited)

                                Three Months Ended          Six Months Ended
                               June 30,     June 30,     June 30,     June 30,
                                 2002         2001         2002         2001
--------------------------------------------------------------------------------

<S>                          <C>          <C>          <C>          <C>

Sales                        $  315,845   $  304,174   $  533,787   $  705,934

Cost of goods sold              217,717      228,454      361,240      494,231
                             ---------------------------------------------------
Gross profit                     98,128       75,720      172,547      211,703
                             ---------------------------------------------------

Expenses
  Accounting and legal           24,861       16,954       49,318       31,674
  Automotive                        563        2,225          994        3,800
  Bad debts (recovery)            2,384         (201)       1,820          474
  Consultant's fees (Note 7a)    56,021            -      102,192            -
  Commissions                     3,490        5,525        7,642       10,748
  Depreciation                    5,468        6,462       10,747       12,716
  Director's fees (Note 7b)           -            -       28,000            -
  Insurance                       2,291        2,465        4,474        4,724
  Office and miscellaneous        1,496        3,101        5,942        9,787
  Property taxes                    778          946        1,522        1,692
  Repairs and maintenance           392          413          812          979
  Travel and promotion           21,791       18,445       40,116       26,214
  Utilities                       2,213        1,537        4,666        3,741
  Wages and benefits             61,428       66,939      131,628      149,548
                             ---------------------------------------------------
                                183,176      124,811      389,873      256,097
                             ---------------------------------------------------
Operating loss                  (85,048)     (49,091)    (217,326)     (44,394)
                             ---------------------------------------------------

Other income (expense)
  Royalties (net)                 5,161        3,220       12,359        9,779
  Rentals and sundry              1,689        1,465        3,101        3,015
  Interest and bank charges      (3,492)      (3,240)      (6,022)      (6,156)
                             ---------------------------------------------------
                                  3,358        1,445        9,438        6,638
                             ---------------------------------------------------
Loss before income taxes        (81,690)     (47,646)    (207,888)     (37,756)

Income tax benefit
  Deferred                      (10,058)     (17,630)     (42,359)      (9,978)
                             ---------------------------------------------------


Net loss for the period      $  (71,632)  $  (30,016)  $ (165,529)  $  (27,778)
================================================================================

Basic and diluted loss per
  share                      $    (0.01)  $        -   $    (0.02)  $        -
                             ===================================================

Weighted average shares
  outstanding                 7,187,100    6,847,100    7,179,267    6,847,100
                             ===================================================

</TABLE>


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

<PAGE>

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------
                                                                               MegaPro  Tools,  Inc.
                                  Consolidated Interim Statements of Changes in Stockholders' Equity
                                                                              (Stated in U.S. Funds)
                                                                                         (Unaudited)

                                                                            Accumu-
                                                                            lated    Retained
                                                                Addi-       Other    Earnings    Total
                                                       Common   tional      Compre-   (Accumu-   Stock-
                                                       Stock    Paid-in     hensive     lated    holders'
                                             Shares    Amount   Capital     Loss      Deficit)   Equity
                                          ---------------------------------------------------------------
<S>                                       <C>        <C>      <C>       <C>        <C>         <C>

Balance, December 31, 2001                6,847,100  $ 6,847  $361,111  $(28,448)  $ 133,632   $ 473,142
Share capital issued in:
  January  2002 $1.40 per share
   (Note 7a)                                321,000      321   449,079         -           -     449,400
  February  2002 $2.80 per share
   (Note 7b)                                 10,000       10    27,990         -           -      28,000
  May 2002  Stock options exercised
   at $1.50 per share                        27,000       27    40,473         -           -      40,500
                                          ---------------------------------------------------------------
                                          7,205,100    7,205   878,653   (28,448)    133,632     991,042
                                          ---------------------------------------------------------------

Foreign currency adjustment                       -        -         -     7,767           -       7,767
Net loss for the period                           -        -         -         -    (165,529)   (165,529)
                                          ---------------------------------------------------------------

Comprehensive loss for the period                 -        -         -     7,767    (165,529)   (157,762)
                                          ---------------------------------------------------------------

Balance, June 30, 2002 (Unaudited)        7,205,100  $ 7,205  $878,653  $(20,681)  $ (31,897)  $ 833,280
=========================================================================================================
</TABLE>



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

<PAGE>


<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
                                                           MegaPro  Tools,  Inc.
                                   Consolidated Interim Statements of Cash Flows
                                                          (Stated in U.S. Funds)
                                                                     (Unaudited)

                                                        Six  Months  Ended
                                                       June 30,    June 30,
                                                         2002        2001
--------------------------------------------------------------------------------
<S>                                                   <C>         <C>
Cash provided by (used in)

Operating activities

  Net loss for the period                             $(165,529)  $(27,778)
  Adjustments to reconcile net loss for
    the period to cash provided by (used in)
    operating activities
  Depreciation                                           10,747     12,716
  Stock compensation                                    130,192          -
  Deferred income taxes                                 (42,359)    (9,978)
  (Increase) decrease in assets
    Accounts receivable                                  27,889    193,449
    Inventories                                          75,361     43,796
    Prepaid expenses                                     (6,561)   (37,749)
  Increase (decrease) in liabilities
    Accounts payable                                    (48,769)   (95,924)
    Accrued liabilities                                 (12,707)   (40,543)
                                                      ---------------------
                                                        (31,736)    37,989
                                                      ---------------------

Investing activities
  Purchase of fixed assets                               (3,436)   (21,651)
                                                      ---------------------

Financing activities
  Increase (decrease) in bank indebtedness              (10,725)    (3,902)
  Repayment of loans                                     (4,789)    (6,926)
  Repayment of notes payable                                  -     (3,261)
  Advances from director                                 80,019          -
  Share capital issued                                   40,500          -
                                                      ---------------------
                                                        105,005    (14,089)
                                                      ---------------------

Foreign currency translation adjustment
  effect on cash balances                                (2,359)     1,288
                                                      ---------------------

Increase in cash during the period                       67,474      3,537
Cash, beginning of period                                 8,241     40,559
                                                      ---------------------

Cash, end of period                                   $  75,715   $ 44,096
===========================================================================
Supplemental Information
  Interest paid                                       $   4,044   $  6,593
  Non-cash financing activities
    - Common stock issued for services                $ 477,400   $      -
===========================================================================
</TABLE>




    The accompanying notes are an integral part of these financial statements

<PAGE>

--------------------------------------------------------------------------------
                                                             MegaPro Tools, Inc.
                              Notes to Consolidated Interim Financial Statements
                                                          (Stated in U.S. Funds)
                                                                     (Unaudited)
June  30,  2002
--------------------------------------------------------------------------------

1.     Basis  of  Presentation

The  consolidated  interim  financial  statements  included herein, presented in
accordance  with  United  States  generally  accepted  accounting principles and
stated in US dollars, have been prepared by the Company, without audit, pursuant
to the rules and regulations of the Securities and Exchange Commission.  Certain
information  and  footnote disclosures normally included in financial statements
prepared  in  accordance with generally accepted accounting principles have been
condensed  or  omitted  pursuant  to  such  rules  and regulations, although the
company  believes  that  the  disclosures  are  adequate to make the information
presented  not  misleading.

These  statements  reflect  all  adjustments,  consisting  of  normal  recurring
adjustments  which,  in  the  opinion  of  management,  are  necessary  for fair
presentation  of  the information contained therein.  It is suggested that these
consolidated  interim  financial  statements  be  read  in  conjunction with the
financial  statements  of  the  Company for the year ended December 31, 2001 and
notes  thereto included in the Company's annual report filed on Form 10-KSB with
the Securities and Exchange Commission.  The Company follows the same accounting
policies  in  the  preparation  of  interim  reports.

Results  of  operations  for  the  interim  periods are not indicative of annual
results.

--------------------------------------------------------------------------------

2.     Nature  of  Business

The Company was incorporated in the State of Nevada on December 17, 1998 and was
inactive  until  the acquisition of Mega Tools Ltd. and Mega Tools USA, Inc. via
reverse  acquisition  on  September  30,  1999.  The  Company  is engaged in the
manufacture  and  sale  of  a  patented  multi-bit  screwdriver.

The Company has entered into an exclusive North American licence agreement  with
the  patent  holder  of  a  retracting cartridge type screwdriver.  This licence
agreement  gives  the  Company  unrestricted use of the patent in Canada and the
United  States until November 8, 2005.  The Company's wholly owned subsidiaries,
Mega  Tools  USA, Inc. and Mega Tools Ltd. manufacture and market the drivers to
customers  in  the  United  States  and  Canada.

--------------------------------------------------------------------------------

3.     Director's  Loan  Payable

The  director's  loan  payable has no specific terms of repayment.  It is due on
demand,  unsecured  and  bears  interest  at  10.25%  per  annum.



<PAGE>

--------------------------------------------------------------------------------

                                                             MegaPro Tools, Inc.
                              Notes to Consolidated Interim Financial Statements
                                                          (Stated in U.S. Funds)
                                                                     (Unaudited)
June  30,  2002
--------------------------------------------------------------------------------

4.     Segmented  Information

The  Company has determined that it operates in one industry, in the manufacture
and  sale  of  tools.  Based upon the Company's internal reporting structure the
Company  has  business  segments located in Canada and the United States.  Sales
are  attributed  to  Canada  and  the  United States based upon the subsidiary's
location.  Following  is  information  about  the Company's geographic segments:


                            Three Months Ended      Six Months Ended
                            June 30,   June 30,   June 30,    June 30,
                               2002       2001       2002        2001
                            -------------------------------------------

Revenues
  United States             $191,420   $182,789   $ 317,738   $456,388
  Canada                     124,425    121,385     216,049    249,546
                            -------------------------------------------
                            $315,845   $304,174   $ 533,787   $705,934
                            ===========================================

Loss From Operations
  United States             $(45,203)  $(56,245)  $(145,871)  $(27,946)
  Canada                     (39,845)     7,154     (71,455)   (16,448)
                            -------------------------------------------
                             (85,048)   (49,091)   (217,326)   (44,394)

Royalties and other income     6,850      4,685      15,460     12,794
Interest and bank charges     (3,492)    (3,240)     (6,022)    (6,156)
Income tax benefit            10,058     17,630      42,359      9,978
                            -------------------------------------------
Net loss for the period     $(71,632)  $(30,016)  $(165,529)  $(27,778)
                            ===========================================

Capital Expenditures
  United States             $      -   $      -   $       -   $      -
  Canada                         514     14,079       3,436     21,651
                            -------------------------------------------
                            $    514   $ 14,079   $   3,436   $ 21,651
                            ===========================================


                                                June 30,   December 31,
                                                   2002         2001
                                                -----------------------
Long-term Identifiable Assets
  United States                                   $  46,645   $ 50,142
  Canada                                             162,792   158,970
                                                  ---------------------
                                                  $  209,437  $209,112
                                                  =====================


<PAGE>

--------------------------------------------------------------------------------
                                                             MegaPro Tools, Inc.
                              Notes to Consolidated Interim Financial Statements
                                                          (Stated in U.S. Funds)
                                                                     (Unaudited)
June  30,  2002
--------------------------------------------------------------------------------

5.     Loans  and  Notes  Payable

                                                        June 30,  December 31,
                                                         2002        2001
                                                        ----------------------
Payable to a stockholder of the Company, unsecured,
  with quarterly payments of interest only at 10.25%
  per annum, matures October 1, 2002                    $ 62,553  $ 59,643

Bank of Montreal, collaterialized by a first mortgage
  on the Company's real estate, repayable  $823 monthly
  plus interest at bank prime lending rates plus 1.5%
  per annum, due on demand with an agreed upon
  repayment schedule                                      25,515    29,037
                                                        ----------------------
                                                        $ 88,068  $ 88,680
                                                        ======================

--------------------------------------------------------------------------------


6.     Stock  Options

A  summary  of  the status of the Company's stock options outstanding as of June
30,  2002  is  presented  below:


                                     Vesting     Expiry   Exercise
                           Number       Date       Date     Price
                          ----------------------------------------
Granted January 20, 2000  130,000   20-Jan-00   20-Jan-05  $ 0.85
Granted October 16, 2001   10,500   16-Oct-02   16-Oct-03    1.50
Granted October 16, 2001   12,500   16-Apr-03   16-Oct-03    1.50
                          -------
                          153,000
                          =======

7.     Stock  Compensation

(a)     On January 15, 2002 the Company entered into a two-year agreement with a
business  combination  consultant  to  provide  services  with  the objective of
increasing  the  Company's revenues and earnings and expanding its business.  In
consideration  for  these  services  the  Company  issued  321,000 shares of the
Company's  common  stock.  The Company recorded compensation expense of $449,400
for  this  contract  based upon the fair market value of the common stock on the
date  of  issue.  The  compensation expense is being amortized over the two year
term  of the contract with $102,192 expensed during the current six month period
and  the  balance  of $347,208 being deferred and amortized to expense in future
periods.

(b)     On  February  27, 2002 the Company issued 10,000 shares of the Company's
common  stock  as  consideration  for director's services.  The Company recorded
compensation  expense  of $28,000 in the current six month period based upon the
fair  market  value  of  the  common  stock  on  the  date  of  issue.


<PAGE>

--------------------------------------------------------------------------------
                                                             MegaPro Tools, Inc.
                              Notes to Consolidated Interim Financial Statements
                                                          (Stated in U.S. Funds)
                                                                     (Unaudited)
June  30,  2002
--------------------------------------------------------------------------------

8.     Related  Party  Transactions


                                Three Months Ended   Six Months Ended
                                 June 30, June 30,   June 30, June 30,
                                   2002     2001       2002     2001
Interest on the promissory note
  payable to a significant
  stockholder of the Company     $ 1,938  $ 1,583    $ 3,083  $ 3,237

Interest on the director's loan  $ 1,769  $     -    $ 1,769  $     -
----------------------------------------------------------------------

9.     Sales  Concentration

                           Three Months Ended     Six Months Ended
                            June 30,  June 30,   June 30,  June 30,
                              2002      2001        2002      2001
                           ----------------------------------------
Sales to one U.S.
  segment customer         $ 42,868   $ 66,508   $ 68,764  $112,047
Sales to second U.S.
  segment customer                -      2,006          -    82,214
Sales to a third U.S.
  segment customer                -     41,779          -    78,141
                           ----------------------------------------
                           $ 42,868   $110,293   $ 68,764  $272,402
                           ========================================


                                                  June 30, December 31,
                                                    2002       2001
                                                 -------------------
Accounts receivable from one U.S.segment
  customer                                       $ 30,340  $ 55,156
Accounts receivable from one Canadian
  segment customer                                      -    26,153
                                                 -------------------
                                                 $ 30,340  $ 81,309
                                                 ===================


<PAGE>

Item  2.     Management's  Discussion  and  Analysis  or  Plan  of  Operations

FORWARD  LOOKING  STATEMENTS

The  information  in  this discussion contains 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.  These
forward-looking statements involve risks and uncertainties, including statements
regarding  the  Company's capital needs, business strategy and expectations. Any
statements  contained  herein that are not statements of historical facts may be
deemed  to  be  forward-looking  statements.  In  some  cases,  you can identify
forward-looking  statements  by  terminology  such  as  "may", "will", "should",
"expect",  "plan",  "intend",  "anticipate",  "believe",  "estimate", "predict",
"potential"  or  "continue",  the  negative  of  such  terms or other comparable
terminology. Actual events or results may differ materially. In evaluating these
statements, you should consider various factors, including the risks outlined in
the  Risk  Factors  section  below, and, from time to time, in other reports the
Company files with the SEC. These factors may cause the Company's actual results
to  differ  materially from any forward-looking statement. The Company disclaims
any  obligation  to publicly update these statements, or disclose any difference
between  its  actual  results  and  those  reflected  in  these  statements. The
information  constitutes  forward-looking  statements  within the meaning of the
Private  Securities  Litigation  Reform  Act  of  1995.

OVERVIEW

We  were  founded  to  design,  market  and  manufacture  innovative  multi-bit
screwdriver  products  under  the Megapro name and incorporating the retractable
cartridge  design  patented  by  Winsire  Enterprises Corporation.  Our business
commenced  in  1994 when we began selling our Megapro 15 in 1 Screwdriver to the
industrial  and  commercial tools market.  Our revenues have grown since 1994 as
we have expanded our product sales in the industrial and commercial tools market
and  have  expanded our line of screwdriver products.  We commenced sales of our
screwdriver products to the retail market in late 1996.  Our business plan is to
increase our revenues by increasing sales to the retail market, while preserving
and  increasing  our  existing  sales  in  the  industrial  and commercial tools
markets.  Our  objective  is  to increase sales to the retail market by pursuing
direct  sales  to  major  retailers  and  by  pursuing  private  label  branding
relationships  with  major  retailers.

Our  expenses  include  salaries  and  employee  benefits, travel and promotion,
commissions  paid  on  the  sales of our screwdriver products and administrative
costs  including  accounting and legal expenses, depreciation and other expenses
associated  with  our  office in Surrey, British Columbia, Canada.  Our costs of
goods  sold  consist  primarily  of patent royalty payments, payments to outside
manufacturers,  raw  materials, labor, shipping and other manufacturing expenses
associated  with  production  and  packaging of our screwdriver products.  Other
expenses  consist  primarily  of  interest  on  our  long-term  debt.

Our  business  plan is to expand sales of our screwdriver products to the retail
market.  We  need  approximately  $500,000  to $1,000,000 of capital in order to
fund  the expenses associated with this expansion.  The amount of funding we are
able  obtain  will  determine  the  extent  to which we can devote funds to this
retail  expansion.  Funds  that  we  generate  from  any  new financings will be
focused  on  generating  sales  of  our  new Megapro Multi Q-C screwdrivers, our
Megapro  electric cordless screwdrivers and our Power2Bits screwdriver and drill
bits.  These  expenses  will have a material impact on our results of operations
and  financial  condition  for future periods.  We anticipate that our operating
expenses  will  increase  and earnings will decrease initially as we incur these
additional  expenses.  Our  objective is to increase our revenues as a result of
increases  in  sales  to


                                       4

<PAGE>

the  retail market. We anticipate that any increase in revenues will be realized
in  financial  periods  subsequent to the financial period in which we incur our
increased  operating  expenses.  If we are not successful in increasing sales to
the  retail  market,  then  our increased revenues will not offset our increased
operating  expenses  and our profitability will suffer. In this event, we may be
required to raise additional capital through debt or equity financing to pay for
our  increased  operating  costs.

RESULTS  OF  OPERATIONS

Revenue

Net  revenues  decreased significantly to $533,787 for the six months ended June
30,  2002  from  $705,934 for the six months ended June 30, 2001, representing a
decrease of 24.4%.   Net revenues for our second quarter increased marginally to
$315,845  for  the  three months ended June 30, 2002 from $304,174 for the three
months ended June 30, 2001, representing an increase of 3.8%.   We experienced a
decrease  in revenues in both the United States and in Canada, our two principal
markets, for the six months ended June 30, 2002 compared to 2001.  Revenues from
sales  in  the United States decreased to $317,738 from $456,388, representing a
decrease  of  30.4%.   Revenues  from sales in Canada decreased to $216,049 from
$249,546,  representing  a  decrease  of  13.4%.  The  decrease  in revenues was
generally attributable to the slow-down in the North American economy during the
fourth  quarter  of  2001  and the first quarter of 2002.  The decrease in sales
reduced  our  cash  flow  and reduced our ability to complete sales in the first
quarter  of  2002.  The  decrease  in sales in Canada was also attributable to a
decrease  in  sales  to Home Depot Canada caused by a withdrawal of sales of our
screwdriver  products  to  Home  Depot  Canada  in  the  third  quarter of 2001.

We  experienced  a  recovery  in revenues during the three months ended June 30,
2002  in  both  the United States and Canada.  Revenues from sales in the United
States  increased  to $191,420 for this three month period, compared to $182,789
for  the  three  months  ended  June  30,  2001.  Revenues  from sales in Canada
increased  to $124,425 for this three month period, compared to $121,385 for the
three  months  ended  June  30,  2001.

We  are  attempting  to  increase  revenue  by  launching  additional  products,
including  our  Megapro  Multi  Q-C  screwdriver,  our Megapro cordless electric
screwdriver  and  our  Power2Bits double ended screwdriver bits with grooves for
power  tools.   Sales  in  the  first  six  months of 2002 included sales of our
Megapro Multi Q-C screwdrivers but did not include sales of our Megapro cordless
electric  screwdriver  and  our  Power2Bits  double ended screwdriver bits.  Our
sales  experience to date is that the Multi Q-C screwdriver is complementing our
existing  product line, rather than displacing sales of our existing screwdriver
products.  We  are  targeting  the  fourth  quarter of 2002 for increased sales,
including sales of Megapro cordless electric screwdrivers and Power2Bits, due to
the  increase  of  overall  retail  sales  during  the Christmas season.  We are
presently  incurring  marketing  and  sales expense in the third quarter that is
focussed  on  increasing  sales  during this period.   Our efforts have included
discussions  with  major  retailers  to  secure  purchase orders for our Megapro
cordless  electric  screwdrivers  and  Power2Bits.  Our  strategy  is  to secure
purchase  orders  for  our  new products prior to accumulating inventory, rather
than  incur  the  risk  of  building  up  inventory of these products at our own
expense  prior  to achieving sales.  We believe we will be able to secure equity
or  debt  financing  for  new inventory if we receive purchase orders from major
retailers.

Any  increased  revenue  from  these new products will not be realized until the
third  and fourth quarters of 2002.  There is no assurance that these additional
products  or  marketing  efforts  will  enable  us  to  increase  our  revenues.

Costs  of  Goods  Sold  and  Gross  Profit


                                       5

<PAGE>

Cost  of goods sold decreased to $361,240 for the six months ended June 30, 2002
from  $494,231  for the six months ended June 30, 2001.  The decrease in cost of
goods  sold  is attributable in part to a decrease in sales during the first six
months  of  2002.  Cost  of  goods  sold  as  a  percentage  of  sales decreased
marginally  to  67.7%  during  the  first  six months of 2002, compared to 70.0%
during  the  first  six  months  of  2002.

Cost  of  goods  sold  decreased to $217,717 for the three months ended June 30,
2002 from $228,454 for the three months ended June 30, 2001.  Cost of goods sold
as  a  percentage  of  sales decreased to 68.9% during the first three months of
2002,  compared  to  75.1%  during  the  first  three  months  of  2002.

We  continue  to evaluate means of reducing cost of goods sold by having certain
components  of  our screwdriver products manufactured by non-U.S. manufacturers.
However,  we  have  not  implemented  non-U.S.  manufacturing  as  of this date.

Our  gross  profit  decreased to $172,547 for the six months ended June 30, 2002
from $211,703 for the six months ended June 30, 2001, representing a decrease of
$39,156  or  18.5%.  The decrease in gross profits was attributable to the 24.4%
decrease  to our revenues during this period and a proportionate decrease in our
costs  of  goods  sold.

Our  gross  profit increased to $98,128 for the three months ended June 30, 2002
from  $75,720 for the three months ended June 30, 2001, representing an increase
of  $22,408 or 29.6%.  The increase in gross profit was attributable to the 3.8%
increase  to our revenues during this period and a 4.7% decrease in our costs of
goods  sold  during  the  three  month  period.

We  anticipate  that  costs  of  goods  sold will increase as we launch sales of
additional  products,  including  our Megapro Multi Q-C screwdriver, our Megapro
cordless  electric screwdriver and our Power2Bits double ended screwdriver bits.
We will attempt to maintain or increase our gross profit margin for sales of new
products.

Expenses

Our  expenses  increased to $389,873 for the six months ended June 30, 2002 from
$256,097  for  the six months ended June 30, 2001.  The increase of $133,776 was
primarily attributable to a stock compensation expense in the amount of $102,192
and  an amount of $28,000 recorded in connection with the issue of 10,000 shares
to  our new director, Mr. Joseph Piscitelli.  The stock compensation expense was
attributable  to  services  rendered  under  a  consultant  contract.

Our expenses increased to $183,176 for the three months ended June 30, 2002 from
$124,811  for the three months ended June 30, 2001.  The increase of $58,365 was
primarily  attributable to stock compensation expense recorded during the second
quarter  of  2002  in  the  amount  of  $56,021.

The  largest  component  of  our  expenses  was  wages  and benefits.  Wages and
benefits  were  $131,628  for  the  six  months  ended June 30, 2002 compared to
$149,548  for  the  six  months  ended June 30, 2001, representing a decrease in
wages  in  benefits  of  $17,920.  Wages and benefits were $61,428 for the three
months  ended  June 30, 2002 compared to $66,939 for the three months ended June
30,  2001, representing a decrease in wages in benefits of $5,511. The reduction
in  wages  and  benefits  was  the  result of a reduction to our Surrey, British
Columbia  staff  by  two  full  time  employees  at  the  beginning  of  2001.

Our  accounting  and  legal  costs increased to $49,318 for the six months ended
June  30, 2002 from $31,674 for the six months ended June 30, 2001, representing
an increase of $17,644.  Our accounting and legal costs increased to $24,861 for
the  three  months  ended  June 30, 2002 from


                                       6

<PAGE>

$16,954  for  the  three months ended June 30, 2001, representing an increase of
$7,907.  We  incurred higher accounting and legal costs due to completion of our
Form  10-KSB  annual  report  in  the first quarter of 2002. We will continue to
incur higher accounting and legal costs during 2002 compared to 2001 as a result
of  our  being  a  reporting  company under the Securities Exchange Act of 1934.

Our  travel and promotion expenses increased to $40,116 for the six months ended
June  30,  2002 from $26,214 for the six months ended June 30, 2001.  Our travel
and  promotion expenses increased to $21,791 for the three months ended June 30,
2002  from  $18,445  for  the  three months ended June 30, 2001.  This increases
resulted from a management decision to reduce the number of trade shows attended
by  us  during 2001.  Management has determined to increase travel and promotion
expenses  in  2002 in connection with our launch of new products.  We anticipate
that  these  expenses  will  continue to increase in 2002 compared to 2001 as we
undertake  marketing  efforts  for  our  new  products.

We  anticipate  that  our  expenses  will  increase  during the third and fourth
quarters  of  2002  as  we  undertake  the  product  launch of our new Multi Q-C
screwdrivers,  our cordless electric screwdrivers and our Power2Bits screwdriver
bits,  provided  we  secure  purchase  orders  for our new products.   Increased
expenses  would  include  marketing  expenses  and  expenses  associated  with
increasing inventory of new products for anticipated sales.  These expenses will
be  incurred  in  the third and fourth quarters of 2002 in anticipation of sales
for  the  2002  Christmas  season.  Accordingly,  we may not realize revenues to
cover  these  expenses until the fourth quarter of 2002 and 2003.  The extent of
the  expenses we incur in launching these new products will depend on the extent
to  which  we  are  able  to  secure  purchase  orders  for  our  new  products.

Loss  Before  Income  Taxes

We incurred a loss before income taxes of $207,888 for the six months ended June
30,  2002  compared  to  loss  before income taxes of $37,756 for the six months
ended  June 30, 2001.  We incurred a loss before income taxes of $81,690 for the
three months ended June 30, 2002 compared to loss before income taxes of $47,646
for  the  three months ended June 30, 2001.    The decrease to our income before
income  taxes  and  our  resulting  losses  before  income  taxes were primarily
attributable  to  our  increased non-cash expenses and our decrease in revenues.

Net  Loss

We  incurred a loss after income taxes of $165,529 for the six months ended June
30, 2002 compared to a net loss after income taxes of $27,778 for the six months
ended  June  30, 2001.  We incurred a loss after income taxes of $71,632 for the
three months ended June 30, 2002 compared to a net loss of $30,016 for the three
months  ended  June  30,  2001.  Our  net loss during the first half of 2002 was
primarily  attributable  to the non-cash stock compensation expense component of
our  increased  expenses  and  an  overall  reduction  in  revenues.

FINANCIAL  CONDITION

Liquidity  and  Capital  Resources

Our  cash  position was $75,715 on June 30, 2002, compared to $8,241 on December
31,  2001.  Our working capital position was $170,112 on June 30, 2002, compared
to  $204,018  on  December  31,  2001.

Net  cash used in operating activities was $31,736 for the six months ended June
30,  2002,


                                       7

<PAGE>

compared  to  net  cash  provided by operating activities of $37,989 for the six
months ended June 30, 2001. Accounts receivable were reduced from $197,335 as of
December 31, 2001 to $172,416 as of June 30, 2002. Inventories were reduced from
$375,250 as of December 31, 2001 to $302,254 as of June 30, 2002. This reduction
to  accounts  receivable  and  inventories  is  a seasonal trend attributable to
payment by our customers of orders of products for the 2001 Christmas season. We
had  a  corresponding reduction in accounts payable from $241,721 as of December
31,  2001 to $192,719 as of June 30, 2002 attributable to payments made by us in
respect  of  costs  incurred  in  completing  production  for the 2001 Christmas
season.

Net cash used for investment activities was $3,436 for the six months ended June
30, 2002 compared to $21,651 for the six months ended June 30, 2001.    Net cash
used  in  investment  activities consisted exclusively of property and equipment
purchases.

Net  cash provided by financing activities was $105,005 for the six months ended
June  30, 2002, compared to net cash used in financing activities of $14,089 for
the  six  months  ended June 30, 2001. The cash provided by financing activities
included  a  director's  loan  in  the  amount of $80,019 advanced in the second
quarter  of  2002  and  sales  of common stock for aggregate proceeds of $40,500
during  the  second  quarter.  The  cash  used  in  financing  activities  was
attributable  to  the  repayment  of  current  portions of our current long term
indebtedness,  including  our  bank  indebtedness.

Historically,  we  have  funded  our  business  operations  primarily  from  net
operating income.  We have also relied on loans from our president and director,
Mr.  Neil  Morgan,  the  Bank  of  Montreal  and  Mr. Robert Jeffery, one of our
shareholders,  and  sales  of  our  common  stock  to  fund business operations.

Mr.  Neil  Morgan,  our  president  and one of our directors, advanced to us the
amount  of  $80,019  as a director's loan during the three months ended June 30,
2002.  We  owed an aggregate of $100,019 to Mr. Morgan as of June 30, 2002.  The
loan  is unsecured, bears interest at 10.25% per annum and has no specific terms
of  repayment.  There  is  no assurance that Mr. Morgan will advance any further
funds  to  us  in  order  to  fund  our  business  operations.

We  obtained  a  fixed  loan  from  the  Bank of Montreal in 1998.  This loan is
payable  on  demand with an agreed upon repayment schedule requiring payments of
$823  per month, plus interest at the bank's funding rates, plus 1.5% per annum.
The  principal  amount  of the outstanding loan was $25,515 as at June 30, 2002,
compared  to  $29,037  as  at  December  31,  2001.

Mr.  Robert  Jeffery, one of our shareholders, has advanced us an unsecured loan
at  an  interest  rate  of 10.25% per annum.  The loans are repayable in full on
October  1, 2002.  Until maturity, we are required to make quarterly payments of
interest  to  Mr.  Jeffery.  The principal amount of this loan was $62,553 as at
June  30,  2002,  compared  to  $59,643  as  at  December  31,  2001.

We  will  require  additional  financing  of  $500,000 to $1,000,000 in order to
complete  our  planned  expansion  into  the retail market and to launch our new
products,  as  discussed  above.  We  anticipate  our  revenues  from  existing
operations  will  be  sufficient  to  cover  our current costs of goods sold and
expenses.  We  anticipate that the new funds required to enable us to pursue our
business  expansion will be raised through private placement sales of our common
stock  or  through debt financing.  If we are able to secure purchase orders for
new  products,  we  may  also  secure  debt financing from banks to purchase the
inventory  required  to  meet these purchase orders.  We have no arrangements in
place  for  any equity or debt financings and there is no assurance that we will
be  able  to  complete  any  equity  or  debt  financings.


                                       8

<PAGE>

We believe that we have sufficient capital resources and liquidity over both the
short  and  long  term  to  sustain  our  business operations.  While we require
additional financing in order to pursue our planned expansion, we do not require
additional financing in order to sustain our present business operations.  If we
are  not  successful  in obtaining additional financing for our planned business
expansion,  then  we  will  scale back our expenditures on the expansion to stay
within  the  funds  available from our current business operations and financing
arrangements.

Our  actual  expenditures  and business plan may differ from this stated plan of
operations.  Our  Board  of  Directors  may  decide not to pursue this plan.  In
addition,  we may modify the plan based on the available amounts of financing in
the  event  that we cannot obtain the required equity financings to complete the
plan.  We  do not have any arrangement in place for any debt or equity financing
that  would  enable  us  to  meet  our  stated  plan  of  operations.



                                       9

<PAGE>

                           PART II - OTHER INFORMATION

Item  1.  Legal  Proceedings

We  are  not  a party to any material legal proceedings and to our knowledge, no
such  proceedings  are  threatened  or  contemplated.


Item  2.  Changes  in  Securities

We did not complete any unregistered sales of our common stock during our fiscal
quarter  ended  June  30,  2002.


Item  3.  Defaults  upon  Senior  Securities

None.


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

No  matters  were submitted to our security holders for a vote during the fiscal
quarter  ending  June  30,  2002.


Item  5.  Other  Information

None.


Item  6.  Exhibits  and  Reports  on  Form  8-K.


EXHIBITS


Exhibit Number     Description of Exhibit
--------------     ----------------------
     99.1          Certification  pursuant  to  pursuant  to  18  U.S.C.
                   Section 1350, as adopted  pursuant  to  Section  906  of  the
                   Sarbanes-Oxley  Act  of  2002

--------------------------------------------------------------------------------

(1)     Filed  as  an  Exhibit  to  this  Quarterly  Report  on  Form  10-QSB

--------------------------------------------------------------------------------


REPORTS  ON  FORM  8-K

None.


                                       10

<PAGE>

                                   SIGNATURES

In  accordance with the requirements of the Securities and Exchange Act of 1934,
the  Registrant  has  duly  caused this report to be signed on its behalf by the
undersigned,  thereunto  duly  authorised.


Date:  August 13, 2002


MEGAPRO TOOLS INC.


By:  /s/ Neil Morgan
    -----------------------------------
     NEIL MORGAN,
     President, Secretary and Treasurer