SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549
                                   FORM 10-KSB

            [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                 SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
                                       OR
          [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]

  For the fiscal year ended June 30, 2001         Commission File No. 000-15260
                                                                      --------
                 Delaware                                     88-0218411
  --------------------------------------     -----------------------------------
      (State or other jurisdiction of       (I.R.S. Employer Identification No.)
       Incorporation or organization)

                               BRL Holdings, Inc.
                             --------------------
             (Exact name of Registrant as specified in its charter)

                   340 Granite Street, Suite 200, Manchester,
                         NH 03102 (Address of principal
                          executive offices) (Zip Code)

Registrant's telephone number, including area code:        (603) 641-8443
                                                          ----------------------

Securities registered pursuant to Section 12(b) of the Act:  None
                                                             -------------
Securities registered pursuant to Section 12(g) of the Act:Common Stock,Class A
                                                           ---------------------
                         Common Stock Purchase Warrants

Indicate by check mark whether the registrant has: (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
registrant was required to file such reports) and has (2) been subject to such
filing requirements for the past 90 days.

                             Yes       X             No
                                     ------               ------

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

                             Yes       X             No
                                     ------               ------

The aggregate market value of the voting common stock held by non-affiliates (1)
of the registrant, based on the average of high bid ($0.51) and low bid ($ 0.15)
prices of the Company's Common Stock as of September 27, 2001, is approximately
$233,241. This is based upon an average of $0.33 multiplied by the number of
shares of registrant's Common Stock held by non-affiliates (706,791 shares).

The number of shares outstanding of the Registrant's Common Stock, $.01 par
value, as of September 26, 2001 is 1,433,939.

(1) "Affiliates" solely for purposes of this item refers to those persons who,
during the 3 months preceding the filing of this Form 10-KSB were officers,
directors and/or beneficial owners of 5% or more of the Company's outstanding
stock.

                       DOCUMENTS INCORPORATED BY REFERENCE
                                  See Item 13.

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


<PAGE>
                                 BIORELEASE CORP
                                   Form 10-KSB
                         Fiscal Year Ended June 30, 2001

                                Table of Contents
<TABLE>
<CAPTION>

         PART I
<S>           <C>                                                                                                 <C>
         Item 1.Business:                                                                                        3
                General                                                                                           3
                The Subsidiary (Biorelease Technologies, Inc.)                                                    3
                Description of the Subsidiary's Technologies                                                      3
                ErythrogenTM Cell Culture Product and Business Opportunity                                        3
                ErythrogenTM Manufacturing, Sales and Marketing                                                   3
                Competition                                                                                       3
                Research and Development Policy                                                                   3
                Patents and Proprietary Technology                                                                3
                Employees & Outside Consultants                                                                   3
         Item 2. Properties:                                                                                      4
         Item 3. Legal Proceedings                                                                                4
         Item 4. Submission of Matters to a Vote of Security Holders                                              4
         PART II
         Item 5. Market for Company's Common Equity and Related Stockholder Matters.                              4
         Item 6. Management's Discussion and Analysis of Financial Condition and Results of Operations:           5
                 Results of Operations                                                                            5
                 General                                                                                          5
                 Year Ended June 30, 2001 compared to the Years Ended June 30, 2000                               5
                 Liquidity and Capital Resources                                                                  6
                 Dividend Policy                                                                                  6
                 Effect of Inflation                                                                              6
                 Litigation and Related Matters                                                                   6
         Item 7. Financial Statements                                                                             7
         Item 8. Changes in and Disagreements with Accountants on Accounting and Financial Disclosures.           9
         PART III
         Item 9. Directors, Executive Officers, Promoters and Control Persons; Compliance with Section 16(a) of
                 the Exchange Act                                                                                10
                Compliance with Section 16(a) of The Securities Exchange Act of 1934                             11
         Item 10. Executive Compensation                                                                         11
         Item 11. Security Ownership of Certain Beneficial Owners and Management                                 13
         Item 12. Certain Relationships and Related Transactions                                                 15
                The Reorganization                                                                               15
                The Company                                                                                      15
                The Subsidiary                                                                                   18
                The Selling Securityholders' Offering                                                            18
                The Exchange Offering                                                                            18
                Terminated Public Offering                                                                       19
         Item 13. Exhibits and Reports on form 8-K.                                                              20
                Reports on form 8-K                                                                              20
                Exhibits                                                                                         20
                Exhibits incorporated by reference                                                               20
         SIGNATURES                                                                                              22
         SUPPLEMENTAL INFORMATION AND EXHIBITS                                                                   23
</TABLE>



<PAGE>


PART I

Item 1.       Business

General

         The  Company,  BRL  Holdings  ("BRL")  includes  its  interest  in  its
biotechnology subsidiary,  Biorelease Technologies, Inc. (the "Subsidiary"). Dr.
R. Bruce Reeves served as an officer and director of the Company from  inception
in 1989 to  October  4, 1996  after  which he served as a  consultant  through a
family affiliate.  Dr. Reeves was re-appointed on February 11, 1998 as President
to  effectuate  merger  activity  for  the  Company  (See  Item 5  -Stockholders
Matters). R T Robertson Consultants, Inc., a corporation wholly-owned by members
of Dr. Reeves'  family,  entered into a consulting  agreement with the Company's
subsidiary to oversee the business  activities of the Company's  subsidiary from
April 1, 1996 through February 11, 1998.

         The Company  became  listed on NASDAQ  (Small cap) in 1992  following a
business  combination  with the Subsidiary.  The Company's stock was delisted in
April,  of 1994 for  failing  to meet net asset  requirements  and its stock has
since  been  trading on the OTC  Electronic  Bulletin  Board.  During the fourth
quarter of fiscal year ended June 30, 1998, NASDAQ changed the Company's trading
symbol from BREL to BRLZ.  Effective  July 1, 2001 the symbol was again  changed
from BRLZ to BRLN, its current symbol.

         The Company invested approximately nine million dollars ($9 million) in
the Subsidiary's  technologies including support and administrative expenses. By
mid 1994,  following the delisting,  it was clear that the Company's  ability to
raise capital was  insufficient to allow it to become a self-standing  synthetic
blood producer in light of the large costs  necessary to bring such a product to
market.  For the past  five  fiscal  years  the  Company  has  operated  without
employees,  using consultants and research affiliations to achieve limited sales
of the Subsidiary's cell culture product, Erythrogen(TM).  Following the closing
of the Asset  Agreement  at December 31, 2000 (See Item 12), the Company has had
no  operations  and revenues and it relies on its business  arrangement  with an
affiliate  of Dr.  Reeves,  its  President,  to  evaluate  possible  merger  and
acquisition opportunities.

         On  August  2,  1999 the  Company  announced  the  signing  of a merger
agreement  pursuant  to which  Biorelease  agreed to merge with POLAR  MOLECULAR
CORPORATION,  a Utah  corporation  ("PMC").  On January  18, 2000 a Form S-4 was
filed with the  Securities  and  Exchange  Commission.  The SEC issued a comment
letter on that filing. On June 30, 2000 the Company and PMC amended and restated
the agreement and plan of  reorganization  to include updated audited  financial
statements of both  companies and to state that PMC shall have a net worth of at
least $2,300,000.  The extension  provided that PMC would make specific payments
to the  Company  on  specific  dates and that PMC would  provide  PMC's  audited
financials  for  inclusion  into the revised  Form S-4 by August 31,  2000.  PMC
failed  to  make  the  payments  called  for and did  not  release  its  audited
financials  to the  Company.  Accordingly,  the  Company  terminated  the merger
agreement effective October 13, 2000 and withdrew the S-4 registration statement
on June 15, 2001.

         On December 31, 2000 R. T. Robertson Consultants, Inc., a business
owned by the family of the Company's President, R. Bruce Reeves, exercised its
option to acquire sixty percent (60%) of the stock owned by the Company's in the
Subsidiary as provided for the Asset Agreement dated June 30, 1999 (See item 7).
The Company also transferred 1,032,849 shares of the Subsidiaries stock owned by
the Company to the directors and officers of the Subsidiary for services
rendered to the Subsidiary. These actions reduced the Company's ownership in the
Subsidiary from 90.8% to 15.9% or 800,000 shares.




                                       3
<PAGE>


Item 2.       Properties

         Since October 20, 1997 the principal offices have been located at 340
Granite Street, Suite 200, Manchester, NH, 03102, (603) 641-8443. This location,
in an in-town multi-tenant office building, allows R T Robertson Consultants,
Inc. to provide the administrative functions of the Company and the Subsidiary
and technical support and shipping for the ErythrogenTM product line on a
contract basis. The Company has no laboratory facilities at present, instead
utilizes facilities at the University of New Hampshire on an as needed basis.
The Company does not pay Robertson for the allocated portion of the facilities
used. From June 1995 through October 1997 the Company rented office facilities
at 10 Chestnut Drive, Unit D, Bedford, NH 03110. The Company relocated from its
former laboratory facilities at 8A Industrial Way, Salem, New Hampshire 03079 in
June of 1995.

Item 3.       Legal Proceedings


         None


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

             In accordance with the provisions of Section 228 of the Delaware
General Corporation Law ("DGCL"), the Company gave written notice to its
shareholders that six shareholders owning a total of 9,213,424 shares (51.4% of
the issued and outstanding common stock of the Company), representing not less
than the minimum number of votes that would be necessary to authorize or take
such action, by written consent without a meeting and without a vote, on May
2,2001, (the "Written Consent"), and in lieu of any meeting, agreed to the
following shareholder actions:

         (1)      To amend the Certificate of  Incorporation  to change the name
                  of the Corporation to BRL Holdings, Inc.;

         (2)      To amend the  Articles  of  Incorporation  to  authorize a new
                  class of shares,  namely  5,000,000  shares of $0.10 per share
                  value Preferred Stock, with the issuance of any such Preferred
                  Stock,  in such  series  and with  such  rights,  powers,  and
                  designations  thereof,  to  be  determined  by  the  Board  of
                  Directors  as and when  any  shares  of  Preferred  Stock  are
                  issued;

         (3)      To  reverse  split the  outstanding  shares on a  one-for-12.5
                  basis,  so  that  the  17,924,238  pre-reverse  common  shares
                  currently  outstanding will become a total of 1,433,939 shares
                  (all  fractional  shares to be  rounded to the  nearest  whole
                  share);

         (4)      That, subject to the effectiveness of a registration statement
                  on Form SB-2 or other  applicable  Form, the Corporation  will
                  distribute pro rata to its common  shareholders,  one share of
                  the common stock of its  subsidiary  Biorelease  Technologies,
                  Inc. ("BTI") for each 25 pre-reverse  split common shares held
                  on  the  record  date  (a  total  of  800,000   shares  to  be
                  distributed); and finally

         (5)      That the officers and directors are  authorized to submit this
                  Information  Statement  pursuant  to  Schedule  14C  under the
                  Securities  Exchange  Act of 1934 to all Company  shareholders
                  which did not sign the  Written  Consent.  The record date for
                  shareholders  to be eligible for the reverse split and the BTI
                  stock dividend is set as of May 31, 2001.

         The  actions  of (1)  changing  the  name to BRL  Holdings,  Inc.,  (2)
authorizing the Preferred Stock, and (3) the reverse split,  became effective on
June 30, 2001 concurrent  with the filing with the Delaware  Secretary of State.
On August 15th,  2001,  the Company  filed a Form 8K announcing  its  indefinite
postponement of the spin-off of the Subsidiary shares.

PART II

Item 5.      Market for Company's Common Equity and Related Stockholder Matters.

         (a)  Market Information -- The principal U.S. market in which the
Company's common shares are traded (all of which are of one class, $.01 par
value Common Stock) is the Over-the-Counter market. In August 1986, the Company
completed its initial public offering. In April 1991, the Company issued 450,000
Class A common stock purchase warrants, 400,000 of which have been exercised.
The Class A common stock purchase warrants was exercisable at $1.375 per Share
and expired July 5, 1995. The Common Stock was listed for trading on the
National Association of Securities Dealers Automated Quotation System ("NASDAQ")
under the symbol "BREL" until April 27, 1994 (excluding from February 28, 1994
through March 17, 1994), at which time it was delisted. The Company's common
Stock is now traded in the Over-the-Counter market and is listed on the OTC
Bulletin Board.

                                       4
<PAGE>

In July 1997 NASDAQ assigned the Company a new symbol "BRLZ". On
July 1, 2001 NASDAQ assigned "BRLN" as the Company's trading symbol. On
September 21, 2001, the average between the high and low reported bid price of
the Common Stock on the OTC Bulletin Board was $0.33 per Share. The following
table sets forth the range of quoted high and low bid prices of the Company's
Common Stock on a quarterly basis for the fiscal years ended June 30, 2001 and
2000 as published on commercial web sites. These quotes reflect inter-dealer
prices on pre split shares without retail mark-up, markdown or commission and
may not necessarily represent actual transactions.
                              Bid Price                               Bid Price
Fiscal 2001                Low      High  Fiscal 2000               Low     High
-----------                ----     ----  -----------               ---     ----
First Quarter,                            First Quarter
Ended September 30, 2000$ .11    $ .11    Ended September 30, 1999$ .05    $ .11
Second Quarter,                           Second Quarter
Ended December 31, 2000 $ .11    $ .11    Ended December 31, 1999 $ .11    $ .11
Third Quarter                             Third Quarter
Ended March 31, 2001    $ .20    $ .28    Ended March 31, 2000    $ .20    $ .39
Fourth Quarter                            Fourth Quarter
Ended June 30, 2001     $ .02    $ .04    Ended June 30, 2000     $ .08    $ .10


         (b)  Holders -- The number of record  holders of the  Company's  Common
Stock as of June 30, 2001 was 1,718  inclusive of those  brokerage  firms and/or
clearing  houses holding the Company's  common shares for their  clientele (with
each such brokerage house and/or clearing house being considered as one holder).
Effective  January  31,  2001  5,800,000  pre-split  back  shares were issued to
directors,  officers and counsel for services rendered through the end of fiscal
year ended June 30, 2001 and an  additional  950,000  pre-split  back shares are
issueable to counsel upon  completion  of services  related to fiscal year ended
June 30,  2001.  The  aggregate  number of post  split  shares  of Common  Stock
outstanding before issuance of the 76,000 shares to counsel was 1,433,939 shares
of common stock as of June 30, 2001.

Item 6. Management's  Discussion and Analysis of Financial Condition and Results
of Operations

Results of Operations

General

         Currently,   the   Subsidiary   continues  to  maintain   inventory  of
Erythrogen(TM),  its cell  culture  additive  product,  in order to provide  for
supply of the product to existing and new customers. For the past several years,
the Company and the  Subsidiary  have focused  primarily on  ErythrogenTM  sales
activities.  All other operating activities have now ceased. Other than possible
licensing opportunities, therapeutic products which could have been derived from
the Subsidiary's  technologies are years away from market introduction and would
require  significant  additional  research and development,  including extensive
pre-clinical  and  clinical  testing  and  regulatory  approval  and  additional
resources the Subsidiary presently does not possess. See "Item 1. Business."

         Sales from ErythrogenTM for the year ended June 30, 2001 and 2000, were
$14,315 and $4,200,  respectively.  During year end June 30, 1995 the Subsidiary
ceased promoting direct sales to research and laboratory  markets because of the
extremely high promotion costs necessary to access these markets.  Instead,  the
Subsidiary  has  focused  on  supplying  a  single  industrial   client,   which
incorporates   ErythrogenTM  in  a  proprietary   media  sold  to  biotechnology
companies.

         The  Company's  ownership  in  the  Subsidiary  was  reduced  to  15.9%
effective  December  31, 2000 under terms of an Asset  Agreement  dated June 30,
1999. The Company is currently without  operations but is focusing on merger and
acquisitions to optimize its value for shareholders [See Financial  Statements -
Note 10].


Year Ended June 30, 2001 compared to the Year Ended June 30, 2000

         For the year ended June 30, 2001 the Company,  including the Subsidiary
operations through December 31, 2000, had revenues of $14,315,  cost of revenues
of $2,698,  general and administrative  expenses of $87,451 including $54,000 of
costs paid by the  issuance of common  stock,  income  from  investee of $3,004,
costs of a terminated offering of $9,543,  other income of $6,602, and a loss of
sale of assets of $616 as  compared  with the year ended June 30,  2000 in which
the Company,  including the Subsidiary had revenues of $4,200,  cost of revenues
of $398, general and administrative expenses of $43,527, other income of $44,447
from  PMC  to  offset  administrative  costs,  a  cost  of  $640  recognized  on
indemnified  liabilities  and a loss on  recognized  settlements  of $821.  This
resulted  in a net loss of $76,387  for the year ended June 30, 2001 as compared
with the year ended June 30, 2000 in which the Company, including the Subsidiary
had a net income of  $3,261.  The loss for year  ended  June 30,  2001  resulted
primarily from the issuance of stock for administrative services ($54,000).  The
income for year ended June 30, 2000 was from minimal Erythrogen(TM) revenues and
other income from PMC in the  aggregate of $44,447 to reimburse  the Company for
general and administrative expenses.
                                       5
<PAGE>


Liquidity and Capital Resources

         From inception until the closing of the Reorganization, the
Subsidiary's primary source of funds has been the proceeds from private
offerings of its Common Stock and Stock in the Subsidiary. Since the
Reorganization, the primary source of capital has been the Company's funds.

         At June 30, 2001, the Company had negative working capital of $2,966 as
compared with the Company's working capital of $9,169 at June 30, 2000. The
change in the Company's working capital between June 30, 2001 and June 30, 2000
is primarily attributable to net revenues from Erythrogen(TM) sales net of
increased administrative expenses and the loss of other reimbursements from a
terminated merger with PMC.

         The drastic restructuring of its operations during the past five years
has allowed the Company to operate at significantly lower expense levels than
those of the previous years. Revenues from ErythrogenTM sales have exceeded
direct costs for the last five fiscal years, but they were not sufficient, to
carry all other administrative expenses. With the spin-off of the Subsidiary,
the Company no longer has operational revenue.

Dividend Policy

         The Company has not declared any cash dividends since inception, and
has no present intention of paying any cash dividends on its Common Stock in the
foreseeable future, as it intends to use earnings, if any, to generate increased
growth. The Company announced that it intends to spin-off its remaining interest
in the Subsidiary to its stockholders. The Board of Directors has not
established a date of record for this proposed spin-off. Otherwise, the Company
has not declared or paid any dividends on its commons stock since its inception
and does not anticipate the declaration or payment of cash dividends in the
foreseeable future. The Company intends to retain earnings, if any, to finance
the development and expansion of its business. Future dividend policy will be
subject to the discretion of the Board of Directors and will be contingent upon
future earnings, if any, the Company's financial condition, capital
requirements, general business conditions and other factors. Therefore, it is
unlikely that dividends of any kind will ever be paid.

Effect of Inflation

         Management believes that inflation has not had a material effect on its
operations for the periods presented.

Litigation and Related Matters

         See "Item 3. Legal  Proceedings."  There are no matters pending against
         the Company as of the date of this report.


                                       6
<PAGE>

Item 7.           Financial Statements

         The  following  financial  statements  have been prepared in accordance
with the requirements of Item 310(a) of Regulation S-B.



                                    INDEX                           Page Number
INDEPENDENT AUDITORS' REPORT                                               F-1

FINANCIAL STATEMENTS

Balance Sheets at June 30, 2001 and 2000                                   F-2

Statements of Operations Two years ended June 30, 2001                     F-3

Statements of Stockholders' Equity (Deficit) for the two years ended
June 30, 2001                                                              F-4

Statements of Cash Flows for the two years ended June 30, 2001             F-5

Notes to Financial Statements                                              F-6

              All other schedules have been omitted because they are
inapplicable or not required, or the Information is included elsewhere in the
financial statements or notes thereto.

                                       7


                               BRL HOLDINGS, INC.

                              FINANCIAL STATEMENTS
                       YEARS ENDED JUNE 30, 2001 AND 2000


<PAGE>






                          INDEPENDENT AUDITORS' REPORT



The Stockholders and Board of Directors
BRL Holdings, Inc.



We have audited the accompanying  balance sheet of BRL Holdings,  Inc. (formerly
Biorelease Corp.) as of June 30, 2001, and the related statements of operations,
changes in stockholders'  equity,  and cash flows for the year then ended. These
financial  statements are the  responsibility of the Company's  management.  Our
responsibility  is to express an opinion on these financial  statements based on
our audit.

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

In our opinion,  the financial  statements referred to above, present fairly, in
all material respects,  the financial position of BRL Holdings,  Inc. as of June
30, 2001 and the results of its  operations and its cash flows for the year then
ended, in conformity with accounting principles generally accepted in the United
States of America.

The  accompanying  financial  statements  have been  prepared  assuming that the
Company will  continue as a going  concern.  As discussed in Note 1, the Company
has no business operations and negative equity.  Because of these factors, there
is  substantial  doubt  about  its  ability  to  continue  as a  going  concern.
Management's  plans in  regard to these  matters  are  discussed  in Note 1. The
financial  statements do not include any adjustments  that might result from the
outcome of this uncertainty.

The consolidated financial statements of BRL Holdings,  Inc. and the Subsidiary,
as of and for the year ended June 30, 2000 have been audited by other  auditors.
That report,  dated October 13, 2000,  expressed an unqualified opinion on those
statements,  with an  explanatory  paragraph  regarding the  uncertainty  of the
entity's ability to continue as a going concern.


Good Swartz Brown & Berns LLP
Los Angeles, California
August 22, 2001
                                       F-1


<PAGE>




                          INDEPENDENT AUDITORS' REPORT

To Stockholders and Board of Directors
Biorelease Corp

We have audited the accompanying consolidated balance sheet of Biorelease Corp
and Subsidiary (a development stage enterprise) as of June 30, 2000 and the
related consolidated statements of operations, changes in stockholders' equity,
and cash flows for the year then ended. These consolidated financial statements
are the responsibility of the Company's management. Our responsibility is to
express an opinion on these consolidated financial statements based on our
audit.

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

In our opinion, the consolidated financial statements referred to above, present
fairly, in all material respects, the financial position of Biorelease Corp and
Subsidiary as of June 30, 2000 and the results of their operations and their
cash flows for the year then ended, in conformity with generally accepted
accounting principles.

The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in Note 1, the
company is a development stage enterprise that, since its inception, has
incurred operating losses, and the Company does not have sufficient working
capital to support its future operations on an ongoing basis. Because of these
factors, there is substantial doubt about its ability to continue as a going
concern. Management's plans in regard to these matters are discussed in Note 1.
The consolidated financial statements do not include any adjustments that might
result from the outcome of this uncertainty.

The consolidated financial statements of Biorelease Corp and Subsidiary, for the
period from inception to June 30, 2000, have been audited by us and other
auditors. Those reports expressed an unqualified opinion on those statements,
with an explanatory paragraph regarding the uncertainty of the entity's ability
to continue as a going concern.

------------------------
/s/ Ferarri & Associates, P. C.
Manchester, New Hampshire
October 13, 2000




<PAGE>




                               BRL HOLDINGS, INC.

                                 BALANCE SHEETS
                             JUNE 30, 2001 AND 2000




ASSETS
<TABLE>
<CAPTION>

                                                                                                                      Consolidated
                                                                                                          2001             2000
                                                                                                          ----             ----
Current assets
<S>                                                                                                     <C>                <C>
   Cash                                                                                       $            119     $      502
   Note receivable                                                                                      13,624              -
   Accounts receivable - other                                                                               -         29,447
   Inventory                                                                                                 -         16,012
   Prepaid expenses

                                                                                                           980           -
                                                                                                        ------         ------
           Total current assets                                                                         14,723         45,961
                                                                                                        ------         ------

Equipment, net                                                                                               0          1,734
                                                                                                     ----------         -----




Other assets
   Investments                                                                                           6,382             -
                                                                                                     ---------      ---------

           Total assets                                                                       $         21,105     $   47,695
                                                                                                        ======         ======
</TABLE>













                             See notes to financial
                                  statements.
                                       F-2


<PAGE>




                               BRL HOLDINGS, INC.

                                 BALANCE SHEETS
                             JUNE 30, 2001 AND 2000




LIABILITIES AND STOCKHOLDERS' DEFICIT

<TABLE>
<CAPTION>
                                                                                                                      Consolidated
                                                                                                   2001                  2000
                                                                                                   ----                  ----
Current liabilities
<S>                                                                                               <C>                   <C>
   Accounts payable                                                                   $           4,675     $           14,792
   Accrued expenses                                                                              13,014                 17,000
   Other current liabilities                                                                          0                  5,000
                                                                                                 ------                  -----
           Total current liabilities                                                             17,689                 36,792
                                                                                                 ------                 ------


Other liabilities - related party                                                                10,124                  1,000
                                                                                                 ------                  -----
           Total liabilities                                                                     27,813                 37,792
                                                                                                 ------                 ------

Commitments and contingencies (Note 4)

Stockholders' equity
   Preferred stock of $.10 per share value, authorized 5,000,000
       Shares, no shares outstanding at June 30, 2001 or 2000                                         -                      -
   Common stock of $.01 par value; 50,000,000 shares
       Authorized, 1,433,939 and 12,124,238 shares issued
       and 1,433,939 and 12,124,238 shares outstanding as
       of June 30, 2001 and 2000 , respectively                                                  14,339                121,242
   Additional paid-in capital                                                                 7,137,282              6,983,979
   Accumulated deficit                                                                       (7,158,329)            (7,081,942)
                                                                                             -----------            -----------
                                                                                                (6,708)                 23,279
                                                                                                                       (13,376)
                                                                                                 ------                  -----
   Deferred offering costs                                                                            -                      -
           Total stockholders' equity                                                           (6,708)                  9,903
                                                                                                 ------                  -----

           Total liabilities and stockholders' equity                                 $          21,105     $           47,695
                                                                                                 ======                 ======


</TABLE>




                             See notes to financial
                                  statements.


<PAGE>




                                BRL HOLDINGS, INC

                            STATEMENTS OF OPERATIONS
                       YEARS ENDED JUNE 30, 2001 AND 2000


<TABLE>
<CAPTION>

                                                                                  For the Year Ended June 30,
                                                                                                  Consolidated
                                                                                      2001             2000
                                                                                      ----             ----

Revenues

<S>                                                                            <C>             <C>
   Sales                                                                       $     14,315    $       4,200
                                                                                     -------           -----


Cost of revenues                                                                       2,698             398
                                                                                  ----------             ---
        Gross profit                                                                  11,617           3,802
                                                                                  ----------      ----------
Costs and expenses
   General and administrative                                                         87,451          43,527
                                                                                    --------       ----------

        Loss from operations                                                         (75,834)        (39,725)
                                                                                  ----------     -----------

Other income (expense)
     Income from Investee                                                              3,004               -
     Offering costs                                                                   (9,543)              -
   Other income                                                                        6,602          44,447

   Loss on sale of assets                                                               (616)              -
     Loss recognized on indemnified liabilities                                            -            (640)

     Loss recognized on settlements                                                        -            (821)
                                                                                      ------           -----


        Other income (expense), net                                                     (553)         42,986
                                                                                       ------        ------

        Income (loss) before provision for income taxes                              (76,387)          3,261


Provision for income taxes                                                                 -               -
                                                                                           -               -

Net Income (loss)                                                              $     (76,387)  $       3,261
                                                                                     ========     ==========

Weighted average shares                                                            1,281,359         969,931
                                                                                   =========        ========


Basic and diluted profit (loss) per share                                      $       (0.06)   $       0.00
                                                                                       =====            ====

</TABLE>











                             See notes to financial
                                  statements.
                                       F-3


<PAGE>




                                BRL HOLDINGS, INC

                  STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
                       YEARS ENDED JUNE 30, 2001 AND 2000




<TABLE>
<CAPTION>


                                                                  Common Stock
                                               ------------------------------------------------

                                                Number
                                                   of                 Additional                Stock      Deferred      Total
                                                Issued      Capital   Paid - in  Accumulated  Subscription Offering   Stockholders'
                                                Shares       Amount    Capital    Deficit     Receivable   Costs    Equity (Deficit)
                                                ------       ------    -------    -------     ----------    -----  ----------------

<S>                                               <C>           <C>      <C>       <C>           <C>                       <C>
Balance, June 30, 1999 consolidated, restated  11,997,738    119,977  6,981,933 (7,085,203)   (8,074)           -       8,633
Issuance of common stock on exchange
of         options                                126,500      1,265      2,046                8,074                   11,385
Deferred offering costs                                                                                   (13,376)    (13,376)

Net income                                              -          -        -        3,261         -            -       3,261
                                                        -          -        -
                                               ==========   ========   ========      =====     ======     =======       ======
Balance, June 30, 2000 consolidated            12,124,238    121,242  6,983,979 (7,081,942)        -      (13,376)      9,903
Issuance of common stock for services           5,800,000     58,000    (11,600)                                       46,400
Expense of deferred offering costs                                                                         13,376      13,376
Reverse split stock 1 for 12.5 shares         (16,490,299)  (164,903)    164,903                                            -

Net income (loss)                                       -          -         -     (76,387)        -           -      (76,387)
                                               ==========  =========    ========    =======   =======     =======       ======
Balance, June 30, 2001                          1,433,939     14,339   7,137,282 (7,158,329)                   -       (6,708)
                                              ===========  ==========   ========    =======   =======     =======      =======




</TABLE>





                             See notes to financial
                                  statements.
                                       F-4


<PAGE>




                                BRL HOLDINGS, INC

                            STATEMENTS OF CASH FLOWS
                       YEARS ENDED JUNE 30, 2001 AND 2000




<TABLE>
<CAPTION>

                                                                                              For the Year Ended June 30,
                                                                                       ----------------------------------------
                                                                                         2001      Consolidated 2000
                                                                                         ----      -----------------
Cash flows from operating activities
<S>                                                                             <C>                     <C>
   Net loss                                                                     $     (76,387)   $        3,261
   Adjustments to reconcile net loss to net cash provided (used) by
       operating activities
           Depreciation and amortization                                                  353            3,321
           Gain (loss) on sale of assets                                                    -                1
           Income from investee                                                       (3,004)                -
                    Deferred offering costs                                            13,376                -
           Common stock issued in exchange for
                Services rendered                                                      46,400                -
           (Increase) decrease in
                Inventory                                                                 885              354
                Prepaid expenses and other current assets                               (980)                -
                Other receivables                                                      29,447          (29,448)
                            Notes receivable                                                  )              -
                Investment                                                             (13,624
                            Investment                                                  (5,397)              -
                Deferred tax assets                                                         -                -
           Increase (decrease) in
                Accounts payable                                                       (10,117)         12,972
                Accrued expenses                                                       15,014            1,000
                Other current liabilities                                             (5,000)            5,000

                Other liabilities                                                       9,124           (6,200)
                                                                                   -----------      -----------
                    Net cash provided (used) by operating activities
                                                                                            90          (9,739)
                                                                                   -----------      -----------

Cash flows from financing activities
   Issuance of common stock                                                                 -           11,385
                                                                                            -
   Deferred offering costs                                                                             (13,376)
                                                                                   -----------      -----------
                                    Net cash provided (used) by financing                   -
activities
                                                                                   -----------      -----------

                    Net increase (decrease) in cash                                        90          (11,730)


Cash, beginning of year                                                                    29           12,232
                                                                                   -----------      -----------


Cash, end of year                                                               $         119    $
                                                                                   ===========      ===========

</TABLE>











                             See notes to financial
                                  statements.
                                       F-5


<PAGE>





                               BRL HOLDINGS, INC.

                          NOTES TO FINANCIAL STATEMENTS
                       YEARS ENDED JUNE 30, 2001 AND 2000



1.Summary of Significant Accounting Policies

       Organization and Basis of Presentation

       BRL Holdings, Inc., which changed it name from Biorelease Corp. on June
       29, 2001 (the Company or BRL) is being presented as of and for the year
       ended June 30, 2001 on an unconsolidated basis. The financial statements
       for the Company as of and for the year ended June 30, 2000 are being
       presented on a consolidated basis related to its investment in Biorelease
       Technologies, Inc. (BTI). The financial statements of the Company were
       presented in years prior to June 30, 2001 as a development stage
       enterprise, due to the activities conducted within BTI.

       Until December 31, 2000, the Company owned 90.8% of the Biorelease
       Technologies, Inc.

       At December 31, 2000 the company transferred 1,032,849 shares of BTI
       common stock it had previously owned to officers and directors of BTI for
       services to BTI rendered through the end of fiscal year ended June 30,
       2001. Additionally, at December 31, 2000, a party related to the
       president of the Company, exercised an option to acquire 2,749,273 shares
       of BTI. Following these two transactions, The Company now owns 800,000
       shares of BTI stock (15.9%).

       Beginning January 1, 2001, the Company has adopted the equity method of
       accounting for its investment in BTI. The equity method was adopted due
       to common management and common Board of Directors between the Company
       and BTI. The Company has no operating business and no sources of revenue.
       However, the Company continues to have certain general and administrative
       expenses. See the Future Operations paragraph of this footnote.

       On May 1, 2001 a majority of shareholders of the common stock of the
       Company consented to adopt corporate actions to change the name of the
       Company to BRL Holdings, Inc., to amend the Articles of Incorporation to
       authorize 5,000,000 shares of $.10 per share par value preferred stock
       and to reverse split the then outstanding common stock of the Company on
       a one-for-12.5 basis. This action became effective June 29, 2001.

       Use of Estimates

       The preparation of financial statements in conformity with generally
       accepted accounting principles requires management to make estimates and
       assumptions that affect the reported amounts of assets and liabilities
       and disclosure of contingent assets and liabilities at the date of the
       financial statements and the reported amounts of revenues and expenses
       during the reporting period. Actual results could differ from those
       estimates.

                                       F-6


<PAGE>


                               BRL HOLDINGS, INC.

                          NOTES TO FINANCIAL STATEMENTS
                       YEARS ENDED JUNE 30, 2001 AND 2000




1.Summary of Significant Accounting Policies - Continued

       Future Operations

       These financial statements have been presented on the basis that the
       Company is a going concern, which contemplates the realization of assets
       and the satisfaction of liabilities in the normal course of business.
       Because the Company has limited working capital and negative equity,
       there is substantial doubt about its ability to continue as a going
       concern without additional capital and attainment of profitable
       operations. With its reduction in its investment in BTI, the company
       currently has no business operations of its own. It has no sources of
       revenue. However, the Company continues to have certain general and
       administrative expenses. The investment it has in BTI is not expected to
       produce a significant amount of cash or revenue for the Company. The
       Company plans to distribute its remaining shares in BTI to its
       shareholders. These factors raise substantial doubt about its ability to
       continue as a going concern without additional capital or the attainment
       of a profitable operating business. Management intends to find merger
       candidates for the Company. Management believes the public status of the
       Company will help it to find merger candidates. (See Note 1).

       Revenues

       Revenues from product sales are recorded when shipped.

       Inventory

       Inventory is stated at the lower of cost (first-in, first-out) or market.
       Management has re-tested each batch of biotech product in inventory and
       estimates the shelf life of its inventory to remain potent through June
       30, 2002. The shelf life of the product beyond June 30, 2002 will be
       evaluated at that time, with the potential for an obsolescence write-down
       of inventory due to loss of biological activity.

       Equipment

       Equipment is stated at cost. Depreciation and amortization are provided
       using an accelerated method over the estimated useful lives of five to
       seven years. Repairs and maintenance are charged to expense when
       incurred. Any gain or loss resulting from the disposal of equipment is
       included in operations and the cost and related accumulated depreciation
       are removed from the respective account balances.







<PAGE>


                               BRL HOLDINGS, INC.

                          NOTES TO FINANCIAL STATEMENTS
                       YEARS ENDED JUNE 30, 2001 AND 2000




1.Summary of Significant Accounting Policies - Continued

       Income Taxes

       Deferred income taxes are recognized for the tax consequences in future
       years for differences between the tax bases of assets and liabilities and
       their financial reporting amounts at each year-end based on enacted tax
       laws and statutory tax rates applicable to the periods in which the
       differences are expected to affect taxable income. Valuation allowances
       are established when necessary to reduce deferred tax assets to the
       amount expected to be realized. Income tax expense is the tax payable for
       the period and the change during the period of deferred tax assets and
       liabilities.

       Income (Loss) Per Common Share

       Income (loss) per common share is computed using the weighted-average
       number of common shares outstanding during each period. For all net loss
       fiscal years presented, common stock options are not included in the
       Company's computation of diluted net loss per share, as the inclusion of
       these shares would be anti-dilutive; therefore, diluted loss per share is
       equal to basic loss per share.

       As of June 30, the net income (loss) per share was calculated as follows:

<TABLE>
<CAPTION>

                                                                            2001                    2000
                                                                            ----                    -----

<S>                                                                    <C>                  <C>
            Net income (loss)                                          $        (76,387)    $        3,261
            Shares                                                            1,281,359            969,931
                                                                              ---------            -------

            Per share amount                                           $         (0.06)     $        0.00
                                                                                 ======              ====
</TABLE>

2. Note receivable

       The Company has a note receivable from a former merger candidate. The
       principal amount of the note is $13,624 and bears interest at 12%. The
       note was due June 24, 2001. The note was extended until December 31,
       2001. The note is unsecured, but is personally guaranteed by the
       president of the merger candidate.





<PAGE>


                               BRL HOLDINGS, INC.

                          NOTES TO FINANCIAL STATEMENTS
                       YEARS ENDED JUNE 30, 2001 AND 2000


3. Equipment

       Equipment consisted of the following as of June 30:
                                                      2001              2000
                                                      ----              ----

           Equipment                          $       9,185      $     80,201
           Less accumulated depreciation              9,185            78,467
                                                      -----            ------

                                               $          0      $      1,734
                                                    =======             =====

       Depreciation expense for the years ended June 30, 2001 and 2000 was $353
and $3,321, respectively.


4.Commitments and Contingencies

       Since July 1, 1997, the Company has had no leased premises. Office rental
       space has been provided by a related party without charge (See Note 9).

       The Company does not carry product liability insurance.

       During 2001 the Company issued and registered on Form S-8 5,800,000 pre
       reverse split shares of its common stock to the Directors, officers and
       counsel of the Company for services rendered during the fiscal year. An
       additional 950,000 pre reverse shares are to be issued to counsel subject
       to his performing services for and following the filing of the June 30,
       2001 Form 10-KSB with the SEC. The Company has accrued $7,600 for the
       value of these services.


5.Income Taxes

       The Company has not filed federal or state tax returns for the years
       ended December 31, 1993, 1994, 1995, 1996, 1997, 1998, 1999 and 2000.
       Management expects there will be no federal tax liability for these years
       then ended.

       For income tax filing purposes, the Company recognizes revenue and
       expenses on a cash basis and the Company and its former Subsidiary have a
       tax year-end of December 31.






<PAGE>


                               BRL HOLDINGS, INC.

                          NOTES TO FINANCIAL STATEMENTS
                       YEARS ENDED JUNE 30, 2001 AND 2000




5.Income taxes - Continued

       The net current and long-term deferred taxes consisted of the following
components as of June 30:
<TABLE>
<CAPTION>

                                                                                     2001 Tax Effect
                                                ------------------------------------------------------------------------------------
                                                                                Asset                                Liability
                                                                 -------------------------------------   ---------------------------

                   Item                                     Total                Current     Long-Term         Current    Long-Term
                   ----                                     -----                -------     ---------         -------    ---------
<S>                                            <C>                     <C>              <C>              <C>            <C>
           Accrual to cash adjustment          $           (1,699)     $         135    $         -      $     (1,834)  $      -

           Net operating loss deduction                   427,457                   -       427,457                 -
                                                          -------                   -        -------           ------       -------
                                                          425,758                135        427,457            (1,834)
           Valuation allowance                            425,758               (135)      (427,457)            1,834
                                                          -------               -----      ---------            -----       -------


                                               $                -      $           -   $         -        $        -    $        -
                                                    =============               =======      =======          =======       =======

                                                                                                  2000 Tax Effect

                                                                                Asset                              Liability
                                                                 -----------------------------------   -----------------------------

                    Item                                 Total               Current     Long-Term         Current         Long-Term
                    ----                                 -----               -------     ---------         -------         ---------
       Accrual to cash adjustment           $              (2,321)     $      (4,417) $           -     $       2,096   $         -
       Net operating loss deduction                     1,113,171                  -      1,113,171             -                 -
                                                        ---------          ---------       ---------        ---------        -------
                                                        1,110,850             (4,417)     1,113,171             2,096            -
           Valuation allowance                         (1,110,850)            (4,417)    (1,113,171)           (2,096)           -
                                                      -----------          ---------     -----------         --------      ---------

                                            $               -     $               $           -  $      $         -               -
                                                   ==============           ========    ===========           =======         ======
</TABLE>
<TABLE>
<CAPTION>
                                                                                                               Valuation
                                                                                                               Allowance
<S>                     <C> <C>                                                                          <C>
           Balance June 30, 1999                                                                         $      1,086,442
               Net increase                                                                                        24,408
                                                                                                                   ------
           Balance June, 30, 2000                                                                               1,110,850
                Net decrease                                                                                     (685,092)
                                                                                                                ---------
           Balance June 30, 2001                                                                         $        425,758
                                                                                                                  =======
</TABLE>

       A valuation allowance equivalent to 100% of the deferred tax asset has
       been established since it is more probable than not that the Company will
       not be able to recognize a tax benefit for the asset. The net operating
       losses expire at various dates through 2021.



<PAGE>


                               BRL HOLDINGS, INC.

                          NOTES TO FINANCIAL STATEMENTS
                       YEARS ENDED JUNE 30, 2001 AND 2000



6. Equity

       Effective June 30, 1992, the Company acquired substantially all of the
       outstanding common and preferred stock of FLS Acquisition Corp. (FLSA) in
       exchange for common stock of OIA. This reorganization was accounted for
       as a reverse acquisition of OIA by FLSA under the purchase method of
       accounting, as the shareholders of FLSA controlled the consolidated
       entity immediately following the reorganization. Subsequent to the
       transaction, the Company changed its name to Biorelease Corp. and
       recently to BRL Holdings, Inc. and FLSA changed its name to Biorelease
       Technologies, Inc.

       The terms of the reorganization agreement between the Company and the
       former Subsidiary called for the issuance of 2,845,436 shares of OIA,
       Inc. common stock in exchange for 5,014,780 shares of FLSA common stock,
       representing all of FLSA common stock issued and outstanding at the date
       of the reorganization. Currently, all but 433,105 shares of FLSA have
       been acquired. A certificate for 263,879 shares reflecting the Company's
       remaining obligations under the reorganization agreement has been issued
       to a trustee for the benefit of the minority Subsidiary shareholders. The
       reorganization agreement also called for the issuance of up to 1,022,130
       additional shares of the Company's common stock, subject to the
       achievement of certain operating results in future years. The Company did
       not meet the requirements. No accounting recognition has been given to
       the minority ownership interest in the subsidiary because the subsidiary
       is a deficit corporation and the minority shareholders have no obligation
       to fund their share of such deficit.

       Effective September 1, 1992, the Board of Directors adopted the 1992
       Directors' Stock Option Plan (Directors' Plan) and the 1992 Stock Option
       Plan (Option Plan). Under the Directors' Plan, a maximum number of
       100,000 shares are reserved for option grants. The option price per share
       will be its market price at the date of grant, provided however, that at
       no time will the option price be less than $6.00 per share. Options
       granted under this Plan vest immediately and expire 10 years from the
       date of grant. The Plan was modified by a proxy vote during 1994. The
       maximum number of shares pursuant to this Plan has been increased to
       250,000 shares, and the requirement that the minimum exercise price be
       $6.00 per share has been removed.

       Under the Option Plan, a maximum number of 500,000 shares are reserved
       for option grants. The option price per share will be its market value at
       the date of grant, provided however, that at no time will the option
       price be less than $6.00 per share. Vesting and expiration dates will
       vary based upon individual agreement with the option holder. The Plan was
       modified by a proxy vote during 1994. The maximum number of shares
       pursuant to this Plan has been increased to 10% of the issued and
       outstanding shares of the Company, not to exceed 1,000,000 shares, and
       the requirement that the minimum exercise price be $6.00 per share has
       been removed. Under the Plan, an incentive stock option plan benefiting
       its President provides for an option to purchase up to 200,000 shares of
       common stock at $1.40 exercise price if certain operational criteria are
       met. All exercise amounts are on the basis of pre reverse shares.
<PAGE>


                               BRL HOLDINGS, INC.

                          NOTES TO FINANCIAL STATEMENTS
                       YEARS ENDED JUNE 30, 2001 AND 2000

6. Equity - Continued

       A summary of the Company's stock option plans as of June 30, 2001 and
2000 and changes during the year are presented below:
<TABLE>
<CAPTION>
                                                                             Options Granted to
                                                 Director Plan               Service Providers
                                          ---------------------------       -----------------------
                                                            Weighted                    Weighted
                                             Number         Average          Number      Average
                                               of           Exercise           of       Exercise
                                             Options          Price          Options     Price
                                             -------        ---------        -------    ---------
<S>                                               <C>            <C>         <C>          <C>
Options outstanding, June 30, 1998               157,500        $2.75       3,244,320    $0.69
Options Granted September 30, 1998                40,000         0.03               -
Options exercised June 30, 1999                  (80,000)                 (1,347,200)
Options expired June 30, 1999                          -                    (357,500)
                                            ---------- -                    ---------
    Options outstanding June 30, 1999            117,500                    1,539,620
Options exercised August 1999                                                (126,500)
                                                                              -------

Options Granted September 30, 1999                20,000          .05               -
                                                  ------          ---               -
Options outstanding, June 30, 2000               137,500         2.75       1,413,120     0.69

Options Granted September 30, 2000                20,000          .10               -
Options expired June 30, 2001                          -                    (182,400)
                                            ------------                    ---------

Currently exercisable                            157,500        $1.38       1,230,720    $0.69
                                                 =======       ======       =========     =====
</TABLE>

       The range of exercise prices is $.03 to $7.50 as of June 30, 2001 and
2000, respectively.

       The weighted average fair value of the options granted during the years
       ended June 30, 2001 and 2000 is presented below in the form of pre
       reverse split shares:
                                              2001                 2000
                                              ----                 ----
  Director Plan                                  $0.10             $.05
  Option Plan                                 Non Granted    Non Granted
  Options granted to service providers        Non Granted    Non Granted

       The Company applies APB Opinion 25 and related interpretations in
       accounting for certain options granted. Accordingly, no compensation cost
       has been recognized for those options. Had compensation cost for the
       Company plans been determined based on the fair value at the grant dates,
       consistent with the method of FASB Statement 123, the Company's net
       income or loss would not have been affected for the years ended June 30,
       2001 and 2000, and there would have been no impact on the profit or loss
       per share for those years.

<PAGE>


                               BRL HOLDINGS, INC.

                          NOTES TO FINANCIAL STATEMENTS
                       YEARS ENDED JUNE 30, 2001 AND 2000


6.Equity - Continued

       Due to the immateriality of the options granted in fiscal years ended
       June 30, 2001 and 2000, the fair market value of the options was assumed
       to be the fair market value of the stock at the grant date. In addition,
       no compensation costs were recorded by the Company as a result of the
       immateriality of the options granted.

       Shares of common stock were issued to Directors, officers and the
       company's legal counsel for services rendered during and for the fiscal
       year ended June 30, 2001 and were accounted for under FASB Statement 123.
       The shares were valued at the fair market value of the stock at the date
       of issue. A cost of $54,000 was charged to the statement of operations
       for the 6,750,000 pre reverse split shares that are issued or issuable
       for fiscal year ended June 30, 2001.


7. Investment

       The Company acquired 150,000 shares of 6% cumulative, convertible
       preferred stock of Genesis Farms, Inc. (Genesis) on March 31, 1994 in
       consideration for issuing 1,500,000 shares of the Company's common stock.
       In fiscal year ended June 30, 2000 a related party litigated the return
       of 1,400,000 shares of the 1,500,000 shares of the Company's common
       stock. These shares were awarded to that party in partial consideration
       of the sale of certain assets and the settlement and indemnity of
       liabilities of the Company. (See Note 9).

       In fiscal year ended June 30, 2001 the company divested itself of
       3,782,122 shares of the 4,582,122 shares of Biorelease Technologies, Inc.
       (See Note 1 Basis of Presentation) The remaining 800,000 shares of
       Biorelease Technologies, Inc. owned by the Company are to be given as a
       dividend to the shareholders of record as at May 31, 2001. The 800,000
       shares are carried at the value of the subsidiary on the equity basis.




<PAGE>




                               BRL HOLDINGS, INC.

                          NOTES TO FINANCIAL STATEMENTS
                       YEARS ENDED JUNE 30, 2001 AND 2000

8.Cash Flow Information

<TABLE>
<CAPTION>
                                                                         For the Year
                                                                       Ended June 30,
                                                                  ------------------------
                                                                     2001            2000
                                                                     ----            ----
<S>                                                            <C>                        <C>
Cash paid for interest                                         $         0                $0

Non-cash investing and financing activities were as follows:
         Liabilities repaid through issuance
             of common stock                                   $    54,000                $0
         Issuance of common stock for
             subscription receivable                                     -                 -
         Non-marketable security acquired
             through the issuance of common
             stock                                                       -                 -
</TABLE>

9.Related Party Transactions

       On October 4, 1996, R. Bruce Reeves resigned as a member of the Board of
       Directors, President, and Chief Executive Officer of the Company.
       Effective April 1, 1996, the Company engaged a consulting firm,
       controlled by a Reeves' family member, to perform the executive duties of
       the Company. In fiscal year end June 30, 2000, the Company accrued
       $11,200 in contractual fees for these services as compared to fiscal year
       ended June 30, 1999, wherein the Company paid $7,200 for these services.
       In February 1998, the Company's Board of Directors appointed Mr. Reeves
       as acting President to manage ongoing business activities of the Company.

       As of June 30, 1998, the Company was indebted $87,734 to this related
       party consulting firm. The indebtedness bore no interest and had been
       deferred for a period of three years. The Company had incurred $16,827 of
       additional accrued expenses payable to the related party as of June 30,
       1998. As of June 30, 1999, the Company and this related party reached
       agreement under which the related party, on behalf of itself and other
       creditors of the Company, received 625,000 shares of the Company's stock,
       the Genesis preferred shares held by the Company, all rights to recover
       1,400,000 of the shares previously issued to Genesis Capital in the March
       31, 1994 exchange transaction along with an option for one year to
       acquire up to 60% of the Subsidiary at the then book value in exchange
       for (i) forgiving $67,918 in debt owed by the Company and the Subsidiary
       to the related party and other creditors, (ii) indemnification by the
       related party for an additional $242,276 in liabilities plus (iii) rights
       to offset exercise price against outstanding indebtedness for certain
       outstanding options. At December 31, 2000 this related party exercised
       its option to acquire the 2,749,273 shares of the subsidiary's common
       stock at a purchase price of $13,696.

       Robertson also was paid $2,350 and $1,050 in fiscal 2001 and 2000,
       respectively, for storage and handling costs. As of June 30, 2001, the
       Company has approximately $10,000 owed the related party.
<PAGE>


                               BRL HOLDINGS, INC.

                          NOTES TO FINANCIAL STATEMENTS
                       YEARS ENDED JUNE 30, 2001 AND 2000



10.Disclosure About Fair Value of Financial Instruments

       The Company's financial instruments consist of cash, short-term
       receivables and payables. The carrying value of all instruments
       approximates their fair value.


11.Prior period adjustment

       The Company was not properly reporting the elimination of additional
       paid-in capital and accumulated deficit of BTI. The following prior
       period adjustment corrects the presentation.
<TABLE>
<CAPTION>

                                                                                             Additional        Accumulated
                                                                                             paid-in           deficit
                                                                                          -------------    ---------------

<S>                                                                                          <C>                <C>
           As originally reported June 30, 1999                                             $ 9,112,069        $ 9,215,339
           Elimination of subsidiary equity                                                  (2,130,136)        (2,130,136)
                                                                                            -----------        -----------

           As restated, June 30, 1999                                                       $ 6,981,933        $ 7,085,203
                                                                                            ===========        ===========
</TABLE>

       The above adjustment had no effect on the statement of operations for the
year ended June 30, 1999.


12.Subsequent Events

       On  July  11,  2001,  the  Company  formed  I-Jam  Entertainment,  Inc.
       ("I-JAM"), a wholly owned subsidiary of the Company.

       On August 13, 2001, I-JAM entered into an Asset Purchase Agreement with
       an unrelated party, I-Jam Multimedia LLC ("Multimedia") to acquire
       certain assets of Multimedia.

       Under the terms of the agreement, I-JAM will acquire substantially all
       the assets of Multimedia for $500,000 plus 100,000 restricted shares of
       the Company's Series A Preferred stock having a face value of $10.00 per
       share. I-JAM is in the process of raising capital. No assurance can be
       made that sufficient capital will be raised or that the terms of the
       agreement will be completed.






<PAGE>

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

         From June 30, 1994 until June 30, 1998,. Smith Batchelder & Rugg, now
affiliated with Berry, Dunn, McNeil and Parker, expressed their opinion on the
Company's Financial Statements.

PART III

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

         The following table delineates certain information concerning the
directors and executive officers of the Company:

                                                  Positions with
         Positions with
         Name                       Age           the Company
         the Subsidiary
         Richard Schubert           64            Chairman, Board of Directors
         Director

         R. Bruce Reeves            61            President, Principal Financial
         Officer (1)                              President & Director

         Kevin T. McGuire           51            Treasurer (2)
         Treasurer (2)

         Richard Whitney            62            Director

(1)      Dr. Reeves served as President, CEO and Director until October 4, 1996.
         He was  re-appointed as acting President of the Company on February 11,
         1998 until a successor is duly qualified and elected.

(2)      Kevin T. McGuire  served as the  Company's and  Subsidiaries  full time
         Treasurer  from June 1992 until  April  1994.  Since  April  1994,  Mr.
         McGuire  has  served  without  compensation  on an  as  needed  and  as
         available basis.

         Directors  are  elected  by the  stockholders  to serve  until the next
annual meeting of stockholders  or until their  successors have been elected and
have duly  qualified.  Officers are  appointed to serve until the meeting of the
Board of Directors  following the next annual meeting of stockholders  and until
their  successors  have been  elected and have  qualified.  Richard  Whitney was
appointed a Director of the Company  following the  Reorganization in accordance
with the  provisions of an investment  agreement  between the Subsidiary and The
Venture Fund of  Washington  (see "Item 12.  Certain  Relationships  and Related
Transactions-The Subsidiary").

         A summary  of the  business  experience  of each  current  officer  and
director of the Company and the Subsidiary is as follows:

         RICHARD  SCHUBERT  has been  Chairman of the Board of  Directors of the
Company since July 1992. Mr. Schubert is currently a business  consultant.  From
December  1990 through  September  1995,  Mr.  Schubert was the President of The
Points of Light  Foundation,  a  foundation  created to  encourage  Americans to
become  directly  involved  in  consequential  community  service  in respect of
critical  social  issues.  From June  1989 to  December  1990 he was a  business
consultant. He served as President of the American Red Cross (1983-1989) and was
a former Vice Chairman and President of Bethlehem Steel until 1982. Mr. Schubert
has extensive experience in law, business and government. During his career with
Bethlehem  Steel,  which began in 1961,  he was appointed to serve in the public
sector as  Assistant to the Under  Secretary  of Labor  (1970)  Solicitor of the
Department of Labor (1971) and Under Secretary of Labor (1973).  Mr. Schubert is
a member of the  Council of Foreign  Relations  and he serves as a director of a
number of philanthropic and business  organizations.  Mr. Schubert graduated Cum
Laude from Eastern Nazarene College in Quincy,  Massachusetts with a Bachelor of
Arts  degree,  and from Yale Law  School  with a  Bachelor  of Law  degree.  Mr.
Schubert serves as an officer of NCPI, Inc., a non-profit  subsidiary of Eastern
Nazarene College.
<PAGE>

         R BRUCE  REEVES,  Ph.D.,  has been the  President  and Chief  Executive
Officer of the Company since May 1993.  He has been  Secretary and a Director of
the  Company  since  July  1992 and Chief  Executive  Officer,  Secretary  and a
Director of the  Subsidiary  until June 1995 when  operations of the  Subsidiary
were  curtailed.  In August  1995 Dr.  Reeves  agreed  to serve  part time as an
Officer and Director of NCPI,  Inc., an affiliate of Eastern Nazarene College of
which Dr.  Reeves  is an  alumnus.  Dr Reeves  resigned  as an  officer  of NCPI
effective June 30, 2001. Dr. Reeves has over twenty-five  years of experience in
start-up  ventures,  and has spent  over ten  years in  high-tech  business  and
product  development,  including five years  (1964-1969)  with General  Electric
Company on several business development operations. From 1969 to 1979 Dr. Reeves
was a  Principal  in a high tech start up company and  several  syndicated  real
estate  partnerships.  From  1979 to  1989  he  served  as  Chairman  and CEO of
Monadnock Partners,  Inc., a family owned real estate management and development
entity  involved  in  hotels,   commercial  office  buildings  and  multi-tenant
industrial  projects.  Dr.  Reeves,  along  with a  corporate  affiliate,  was a
principal in a number of real estate  ventures  including four hotel projects in
the  Northeast.  Dr. Reeves  oversaw three of these hotel  partnerships  through
bankruptcy  proceedings  in the New Hampshire and  Connecticut  Districts.  As a
result of related litigation and personal guarantees for these partnerships, Dr.
Reeves filed for personal bankruptcy protection in the New Hampshire District in
May 1989. From 1989 to 1996, Dr. Reeves devoted his full time to the business of
the  Company,  its  predecessor,  Fluid  Life  Systems,  Inc.  ("FLS")  and  the
Subsidiary.  Dr.  Reeves is currently  an officer of RT  Robertson  Consultants,
Inc., a family owned  consulting  firm which provides  management  services to a
number of companies, including the Company, on an as needed basis.

         KEVIN T MCGUIRE has been the Company's and Subsidiary's Treasurer since
June 1992. Since April 1994 he has served without compensation (other than stock
grants for the year ended June 30, 2001) on a part time basis. The Company
contracts for accounting and tax services through an accounting firm owned by
the spouse of Mr. McGuire that has assisted the Company to maintain compliance
with accounting activities and Securities and Exchange Commission reporting for
the Company. Both Mr. McGuire and his spouse, Vivian L. McGuire, are graduates
of Bentley College. Mr. McGuire has 28 years of business experience including 16
years with public accounting firms. Mrs. McGuire has owned and operated a small
business tax and audit practice since 1988.

         RICHARD  WHITNEY has been a Director of the Company since July 1992. He
is  currently  a  Principal  in a  Snelling  &  Snelling  franchise  located  in
Washington D.C.  Formerly Mr. Whitney served as a general partner of The Venture
Fund of Washington  (the "Fund") from 1989 until August of 1994. Mr. Whitney has
managed venture funds since 1972,  beginning with direct  responsibility for the
management  of  the  Direct  Investment  Fund  at  Overseas  Private  Investment
Corporation.  In the  mid-1970's,  he  served as  Executive  Vice  President  of
Narragansett  Capital. In 1977, with others, Mr. Whitney purchased a controlling
interest in Columbia  Ventures,  Inc.,  an SBIC located in  Washington,  DC. Mr.
Whitney has served as President and a Director of that company  since 1978.  Mr.
Whitney is a past director of the Alumni  Association  and Sports  Foundation of
Brown University.

Compliance with Section 16(a) of The Securities Exchange Act of 1934

         Based  solely  on a  review  of  such  materials,  as  required  by the
Securities  and  Exchange  Commission,  the  Company has no  knowledge  that any
officer, director or beneficial holder of more than ten percent of the Company's
issued  and  outstanding  shares  of  Common  Stock  failed  to  file,  with the
Securities and Exchange  Commission,  any form or report required to be so filed
pursuant  to Section  16(a) of the  Securities  Exchange  Act of 1934 during the
fiscal year ended June 30, 2001.

Item 10.      Executive Compensation

         The following table shows all the cash  compensation paid or to be paid
by the Company or any of its subsidiaries, as well as certain other compensation
paid or  accrued,  during the fiscal  years  indicated,  to the Chief  Executive
Officer for such period in all capacities in which he served. No other Executive
Officer received total annual salary and bonus in excess of $100,000.
<PAGE>

                           SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>

                                                                                Long-Term Compensation
                               Annual Compensation                        Awards        Payouts
        (a)             (b)        (c)        (d)        (e)          (f)        (g)      (h)(i)
                                                        Other
                                                       Annual     Restricted               All Other
                                             Bonus     Compen-       Stock                 Compen-
Name and Principal                          Payouts    sation        Award               LTIPsation
Position                          Year      Salary       ($)          ($)     ($)SAR's    ($)($)
------------------------------    ----      ------       ---          ---     --------    ------
<S>                   <C>           <C>        <C>        <C>          <C>        <C>      <C>
R. Bruce Reeves       2001         -0-        -0-        -0-          -0-        -0-      -0--0-
President and         2000         -0-        -0-        -0-          -0-          -0-    -0--0-
Chief Executive       1999         -0-        -0-        -0-          -0-          -0-    -0--0-
Officer (1)           1998         -0-        -0-        -0-          -0-          -0-    -0--0-
                      1997(1)   10,000        -0-        (2)          -0-             -0- -0--0-
                      1996      90,000        -0-        (2)          -0-     913,200(1)  -0--0-
                      1995     120,000      50,000       (2)          -0-           -0-   -0--0-.
                      1994     120,000        -0-        (1)          -0-     200,000(3)  -0--0-
                      1993     117,000      20,000       (1)          -0-             -0- -0--0-
                      1992      86,000      10,000       -0-          -0-             -0- -0--0-
</TABLE>

         (1) On April 1, 1996 the direct  employment  of R. Bruce  Reeves,  then
President/CEO  of the Company  ceased.  All of Reeves'  contractual  rights were
terminated.  New  contractual  agreements  were  negotiated  with R T  Robertson
Consultants,  Inc., a Reeves  family  affiliate to provide  consulting  services
including the services of Dr. Reeves.  In fiscal years ended June 30, 2001, 2000
and 1999,  respectively R T Robertson Consultants,  Inc. charged the Company $0,
$11,280 and $8,700 for  executive  oversight of the Company and its  Subsidiary.
Between April 1 and June 30, 1996 R. T.  Robertson  billed the Company  $33,300,
including expense  reimbursements,  for executive oversight of the Corporations.
Under  the  terms of the R T  Robertson  Consultants,  Inc.  agreement  with the
Company,  Dr. Reeves, an employee of R T Robertson  Consultants,  Inc. served as
President/CEO  of the Company.  During this period,  RT Robertson was awarded by
the Company  options for 913,200 shares at exercise  prices from $0.02 to $0.045
per share.  On February 11, 1998 Dr.  Reeves was  re-appointed  President of the
Company and Subsidiary.

<PAGE>

         (2) Value of benefits  and other  perquisites  are less than 10% of the
total annual salary and bonus.

         (3) Effective October 4, 1996 these 200,000 options have been forfeited
by Dr. Reeves.

                  The following table sets forth information with respect to the
Chief Executive Officer concerning the grants of options and Stock Appreciation
Rights ("SAR") during the past fiscal year:


                      OPTION/SAR GRANTS IN LAST FISCAL YEAR
                                Individual Grants
<TABLE>
<CAPTION>

        (a)                        (b)                   (c)                   (d)               (e)
                                                    Options/SARs
                               Options/ Granted to
                                  SARs              Employees in        Exercise or Base      Expiration
Name                             Granted            Fiscal Year           Price ($/Sh)           Date
----------------------          ---------         ----------------    --------------------------------------
<S>                                 <C>                   <C>                  <C>
Chief Executive Officer            -0-                   -0-                   0%
--------------------
</TABLE>



         The following table sets forth information with respect to the Chief
Executive Officer concerning exercise of options during the last fiscal year and
unexercised options and SARs held as of the end of the fiscal year:


             Aggregated Option/SAR Exercises and Fiscal Year-End Option/SAR
<TABLE>
<CAPTION>

        (a)                        (b)                   (c)                   (d)     (e)
        ---                        ---                   ---                   ---     ---
                                                                                    Value of
                                                                            Number ofUnexercised
                                                                           UnexercisedIn-the-Money
                                                                          Options/SARsOptions/SARs
                                 Shares                                   at FY-end (#)at FY-end (#)
                               Acquired on              Value             Exercisable/ Exercisable/
Name                          Exercise(#)            Realized($)          UnexercisableUnexercisable

<S>                                 <C>                   <C>                   <C>     <C>
Chief Executive Officer            -0-                   -0-                   -0-     -0-
</TABLE>



                  The following table sets forth information with respect to the
Chief Executive Officer concerning awards under long term incentive plans during
the last fiscal year:


      Estimated Future Payouts under Non-Stock Price-Based Plans

<TABLE>
<CAPTION>
        (a)                        (b)              (c)   (d)         (e)       (f)

                                                Performance
                                Number of        or other
                           Shares, units Period   Until
                                Or Other        Maturation or       Threshold  Target   Maximum
Name                          Rights (#)          Payout            ($ or #)  ($ or #) ($ or #)
---------                     -------------    -------------       --------- -------- -------

<S>                                 <C>              <C>               <C>     <C>       <C>
Chief Executive Officer            -0-              -0-               -0-      -0-       -0-
</TABLE>
<PAGE>


         Directors are not compensated for acting in their capacity as Directors
except for options granted pursuant to the 1992 Directors Option Plan. Directors
are reimbursed for their expenses incurred in attending  meetings and conducting
their  duties.  In April 1995,  the  Directors,  Messrs.  Schubert,  Maybury and
Whitney were awarded 129,000 options  exercisable  into 129,000 shares of common
stock at $.08 per share. In September 1995, Directors Messrs. Schubert,  Maybury
and Whitney were awarded an additional  50,000 options  exercisable  into 50,000
shares of common  stock at $.17 per share.  These  options  were for  consulting
services  unrelated to their position as directors.  The options originally were
to expire on December 31, 1997 and December 31, 1999, respectively.  On February
11, 1997 the  exercise  period of these and all other  issued and  non-exercised
options were extended by three additional years.

         Though March 31, 1996 R. Bruce Reeves,  President  and Chief  Executive
Officer had an employment agreement with the Company. Pursuant to the agreement,
Dr. Reeves received an annual salary of $120,000. Pursuant to the Agreement, Dr.
Reeves also received  options to purchase 200,000 shares of the Company (see the
"Option/SAR  Grants in Last Fiscal  Year" table  above).  These  200,000  option
shares were voluntarily  forfeited by Dr. Bruce Reeves effective October 4, 1996
on which date he resigned as  President  and CEO.  The  Company  entered  into a
consulting agreement with R T Robertson Consultants,  Inc. to provide consulting
services including the services of Dr. Reeves through the end of the fiscal year
ending June 30, 1997.  Robertson  consulted  for the Company  through the end of
fiscal year June 30, 1997 and, on an as needed basis, from July 1997 to present.
On February 11, 1998,  Dr. Reeves was appointed by the board of Directors to act
as President of the Company until a successor is duly qualified and elected. Dr.
Reeves serves without compensation.  During this consulting period, RT Robertson
received  options to acquire  913,200 shares at a conversion  price ranging from
$0.06 to $0.15 per share.

         On January 31, 2001 the Officers  and  Directors of the Company and the
Company's attorney received an aggregate of 5,800,000 shares of stock at a value
of $.008 per share for services  rendered and to be rendered for the fiscal year
ended June 30, 2001.


Item 11.      Security Ownership of Certain Beneficial Owners and Management

(a)           Security Ownership of Certain Beneficial Owners -- The
              persons set forth on the charts below are known to the Company to
              be the beneficial owners of more than 5% of the Company's
              outstanding voting Common Stock as of the date hereof.

         Genesis Farms,  Inc.  (Formerly  Genesis Capital,  Inc), 507 North Belt
East,  Suite 240,  Houston,  TX 77060 was issued 1.5 million  shares of Rule 144
stock in March 1994.  The Company  initiated an agreement  with R. T.  Robertson
Consultants,  Inc., 340 Granite  Street,  Manchester,  NH 03102 to recover these
shares. R. T. Robertson Consultants,  Inc. recovered 1.4 million of these shares
and the Company,  under terms of the Asset  Agreement has assigned these shares,
to Robertson (see page 19 - The Asset Agreement  effective June 30, 1999).  This
recovery activity does not involve the Company in any litigation related to this
transaction.  R. T. Robertson  Consultants,  Inc. owns 1,250,000 shares (100,000
post split shares), net of legal consideration,  which represents 6.9% of issued
shares and 6.9% of issued  shares plus  exercisable  options for named  security
owners.

         Sandra J.  Reeves,  754 Straw Hill,  Manchester,  NH 03104 owns 250,737
post split shares individually and/or beneficially including 49,750 derived from
RT Robertson options for a like number of shares that were exercised at June 30,
1999. It does not include 42,000 shares issued to R. T.  Robertson  Consultants,
Inc  Trustee  under the  Asset  Agreement  of June 30,  1999.  Mrs.  Reeves is a
stockholder in RT Robertson Consultants,  Inc. and controls ninety percent (90%)
of the shares of R T Robertson  Consultants  Inc.'s common stock. Mrs. Reeves is
the spouse of Dr. R. Bruce  Reeves,  President of the  Company.  The shares that
Mrs. Reeves owns directly or beneficially,  plus the shares held by RT Robertson
Consultants as Trustee for certain  creditors,  represent 26.2% of issued shares
(26.2% of issued shares plus exercisable options) for named security owners.

         (b) Security  Ownership of Management  --  Information  concerning  the
number and  percentage  of shares of voting Common Stock of the Company owned of
record and beneficially by management, is set forth on the charts below.


<PAGE>
<TABLE>
<CAPTION>

Name and                            Number of Shares                            Percent of
Address of                           Beneficially                              Common Stock
Beneficial Owner                          Owned*                               Outstanding**
----------------                          ------                              ---------------

<S>                                   <C>                                          <C>
R. Bruce Reeves                       169,935(1)(6)                                11.8 %
754 Straw Hill
Manchester, NH 03104

Richard Schubert                      79,811(1)(5)                                  5.5%
7811 Old Dominion Drive
McLean, VA 22102

Kevin T. McGuire                       36,443(1)(3)                                 2.5%
148 Robinson Road
Hudson, NH 03051

Richard Whitney                       69,982(1)(2)(4)(5)                            4.9%
1612 K St. N.W. #308
Washington, DC 20006

All Officers and
Directors as a Group
  (3 Persons)                         356,171 (1)(2)(3)(4)(5)                      24.7%
</TABLE>

         * Except as indicated in the footnotes below, each person has
sole voting and dispositive power over the Shares indicated.

         ** Based upon 1,433,939 shares issued and outstanding and 6,800
exercisable options for the above named persons, as of the date hereof.

         Notes:

(1)      Excludes possible  subsequent  issuance of additional Shares based upon
         performance  criteria (see "Item 12. Certain  Relationships and Related
         Transactions-The  Reorganization").


(2)      Includes  4,000 shares for Mr. Whitney that are issued at June 30, 1999
         upon  exercise  of a like  number  of  options  that  are  pursuant  to
         consulting agreements with this individual.

(3)      Includes  12,363 shares that are held by Mr. and Mrs.  McGuire  jointly
         with rights of survivorship.

(4)      Includes 7782 Shares owned by The Venture Fund of Washington, a limited
         partnership.  Mr. Whitney is a limited partner owning approximately 19%
         of the limited partnership.

(5)      Includes 2,600 and 4,200 post split options currently exercisable under
         the  Company's  Directors'  Stock  Option Plan to Mr.  Schubert and Mr.
         Whitney, respectively.

(6)      Excludes  42,000  shares  held by R T  Robertson  Consultants,  Inc. as
         Trustee for certain  creditors  under terms of the Asset  Agreement and
         110,737 shares owned by Mrs. Reeves.  Dr. Reeves  disclaims  beneficial
         ownership  and  personal  interest  in  shares  held by  these  related
         parties.

Item 12.      Certain Relationships and Related Transactions


Reverse  Split,  Authorization  of Preferred  shares and Name Change of
the Company

             In accordance with the provisions of Section 228 of the Delaware
General Corporation Law ("DGCL"), the Company gave written notice to its
shareholders that six shareholders owning a total of 9,213,424 shares (51.4% of
the then issued and outstanding common stock of the Company), representing not
less than the minimum number of votes that would be necessary to authorize or
take such action, by written consent without a meeting and without a vote, on
May 2,2001, (the "Written Consent"), and in lieu of any meeting, agreed to the
following shareholder actions:

         (1)      To amend the Certificate of Incorporation to change
                  the name of the Corporation to BRL Holdings, Inc.;

         (2)      To amend the Articles of Incorporation to authorize a
                  new class of shares, namely 5,000,000 shares of $0.10 per
                  share value Preferred Stock, with the issuance of any such
                  Preferred Stock, in such series and with such rights, powers,
                  and designations thereof, to be determined by the Board of
                  Directors as and when any shares of Preferred Stock are
                  issued;


<PAGE>

         (3)      To reverse split the outstanding shares on a
                  one-for-12.5 basis, so that the 17,924,238 pre-reverse common
                  shares currently outstanding will become a total of 1,433,939
                  shares (all fractional shares to be rounded to the nearest
                  whole share);

         (4)      That, subject to the effectiveness of a registration
                  statement on Form SB-2 or other applicable Form, the
                  Corporation will distribute pro rata to its common
                  shareholders, one share of the common stock of its subsidiary
                  Biorelease Technologies, Inc. ("BTI") for each 25 pre-reverse
                  split common shares held on the record date (a total of
                  800,000 shares to be distributed); and finally

         (5)      That the officers and directors are authorized to
                  submit this Information Statement pursuant to
                  Schedule 14C under the Securities Exchange Act of
                  1934 to all Company shareholders which did not sign
                  the Written Consent.  The record date for
                  shareholders to be eligible for the reverse split
                  and the BTI stock dividend is set as of May 31st,
                  2001.

         The actions of (1) changing the name to BRL Holdings, Inc., (2)
authorizing the Preferred Stock, and (3) the reverse split, became effective on
June 30, 2001 concurrent with the filing with the Delaware Secretary of State.
On August 15th, 2001, the Company filed a Form 8K announcing its indefinite
postponement of the spin-off of the Subsidiary shares.

The Asset Agreement effective June 30, 1999

         On April 1, 1999 and effective June 30, 1999, the Company  entered into
an Asset  Agreement  with R T Robertson  Consultants,  Inc.  acting on behalf of
itself  and other  creditors  of the  Company  and the  Subsidiary  under  which
Robertson  would  acquire  certain  listed  assets of the Company  including the
150,000 Genesis preferred shares held by the Company, 550,000 restricted Company
common shares held in treasury,  175,000  restricted  shares of reissued Company
stock  originally  issued to creditors but not released,  all rights to recovery
from Genesis Capital, and an option to acquire up to 60% of the interest held by
the Company in the Subsidiary at the then book value in exchange for forgiveness
of $67,918 in debt owed by the Company and the  Subsidiary  plus an indemnity in
the amount of $167,749 for  outstanding  trade  creditors of the Company and the
Subsidiary. The bid price of the Company's shares on April 1, 1999 was $0.01 per
share. As a result of the terms of this Asset Agreement, the Company was able to
eliminate $242,276 in liabilities that will allow it to comply with the terms of
the proposed Polar Molecular  transaction.  The Asset Agreement closed effective
December 31, 2000 at which time the Company  transferred  all  remaining  shares
held by the Company in the  Subsidiary,  retaining only 800,000 shares which the
Company expects to issue ratable to its  stockholders  upon the filing of a Form
10SB registration statement. The date has not been established for the filing of
the Form  10SB nor has the  Company  established  a record  date for  such.  The
Company  currently values these 800,000  Subsidiary shares at the book value per
share of the Subsidiary.

The Subsidiary


         The   Company's   financial   statements   at  June  30,  2001  contain
consolidated   operating   results  of  Biorelease   Technologies,   Inc.  ("the
Subsidiary")  for the first two  quarters of the current  fiscal year ended June
30,  2001.  The June 30, 2001  Balance  Sheet  reflects  the  accounting  of the
Subsidiary under the equity method of accounting.

Proposed  Acquisition  of I-JAM  Entertainment  Assets by Newly  Formed
Subsidiary

On July 9, 2001, the Company formed a wholly owned Delaware subsidiary named
I-JAM Entertainment, Inc. (I-JAM). I-JAM has agreed to acquire certain assets of
I-JAM Multimedia LLC associated with producing and marketing digital book and
music files and which include a license from Iomega for digital content on
Iomega's Pocket Zip(TM) drives and disks and Hip Zip(TM) digital audio players.

<PAGE>

Terms for the acquisition include staged subsidiary cash payments of $500,000
during calendar year 2001 plus $1,000,000 in subsidiary convertible preferred
stock. The Company expects to organize I-JAM such that I-JAM will be owned
jointly by the Company and a management group formerly associated with I-JAM
Multimedia. Dr. R. Bruce Reeves, President of the Company, will serve as the
initial I-JAM director and oversee the organization of the I-JAM subsidiary and
will retain a minority ownership in the I-JAM subsidiary.

PART IV

Item 13.      Exhibits and Reports on form 8-K.

Reports on Form 8-K

         The Company has filed the following Reports on Form 8-K during the year
ended June 30, 1995 with the  principal  office of the  Securities  and Exchange
Commission in  Washington,  DC. Form 8-K filed with the  Securities and Exchange
Commission  on September  29, 1994;  Amendment  No. 1 thereto (Form 8-K/A) filed
with the Securities and Exchange  Commission on November 3, 1994. Form 8-K filed
with the  Securities  and Exchange  Commission on September  20, 1999.  Form 8-K
filed with the Securities and Exchange Commission on March 14, 2000 and July 26,
2000. Forms 8-K were filed with the Securities and Exchange  Commission on March
29, 2001, May 2, 2001, July 23, 2001 and August 15, 2001.

Exhibits

         NONE

Exhibits incorporated by reference
         3a         Certificate of Incorporation of Company (1)
         3b         Amendment  to  Certificate  of   Incorporation   of
                    Company (1)
         3c         By-Laws of the Company (1)
         10c        Stock Reorganization  Agreement between the Company
                    and the Subsidiary (2)
         10d        1992 Stock Option Plan (3)
         10e        1992 Directors' Stock Option Plan (3)
         10f        Patent-Chondroitin Drug Complexes (4)
         10g        Patent-Stabilization  of Proteins  and  Peptides by
                    Chemical Binding with Chondroitin (4)
         10i        Consulting  Agreement with Wall Street  Consultants
                    (4)
         10j        Options  with  USA,  Wall  Street  Consultants  and
                    Union Equity Partners (4)
         10l        TSI Agreement (4)
         10m        Cell Trends Agreement (4)
         10n        Dr. Reeves' Employment Agreement (5)
         10o        Chestnut Drive lease
         14a        Canadian    patent   for    "Method   for   Protein
                    Stabilization"(4)
         14b        European  patent  for  "Continuous   Processes  for
                    Modifying  Biologically  Active  Materials  and the
                    Products Therefrom"(4)
         16a        Accountants' Letter (6)(7)
         22c        Subsidiaries (see "Item 1. Business")

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

         (1)  Previously  filed  with  the  Commission  as  an  Exhibit  to  the
Registration  Statement on Form S-1, as amended,  file No. 33-43976 and, by this
reference, incorporated herein.

         (2) Previously filed as an exhibit to the Company's Form 8-K filed with
the  Commission  June 8,  1992,  file  No.  0-15260,  and,  by  this  reference,
incorporated herein.

<PAGE>

         (3)  Previously  filed as an Exhibit to the Company's Form 10-K for the
year ended June 30, 1992 filed with the  Commission on September 28, 1992,  file
No. 0-15260, and, by this reference, incorporated herein.

         (4)  Previously  filed  with  the  Commission  as  an  Exhibit  to  the
Registration  Statement on Form S-1, as amended,  file No. 33-59902 and, by this
reference, incorporated herein.

         (5) Previously filed with the Commission as an Exhibit to the Company's
Form  10-KSB  for the year ended June 30,  1993  filed  with the  Commission  on
September 28, 1994,  file no.  33-43976,  and, by this  reference,  incorporated
herein.

         (6) Previously filed as an exhibit to the Company's Form 8-K filed with
the  Commission  July  30,  1992,  file No.  0-15260,  and,  by this  reference,
incorporated herein.

         (7)  Previously  filed as an exhibit to the Company's  Form 8-K/A filed
with the Commission November 3, 1994, file No. 0-15260,  and, by this reference,
incorporated herein.

         Statements contained in this Form 10-KSB as to the contents of any
agreement or other document referred to are not complete. Where such agreement
or other document is an exhibit to the Report or is included in the forms
indicated above, each such statement is deemed amplified and qualified in all
respects by such provisions.


<PAGE>


                                   SIGNATURES

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

                                 BIORELEASE CORP


Dated: October 15, 2001              By   /s/Richard F. Schubert
                                        -----------------------------------
                                        Richard F. Schubert, Chairman

         Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.

SIGNATURES                          TITLE
DATE


/s/Richard F. Schubert              Chairman,
----------------------
October 15, 2001
Richard F. Schubert                 Director



/s/R. Bruce Reeves                  President
------------------
October 15, 2001
R. Bruce Reeves                     Principal Financial Officer


<PAGE>



                      SUPPLEMENTAL INFORMATION AND EXHIBITS

Supplemental Information to be Furnished With Reports Filed Pursuant to Section
15(d) of the Act by Registrants Which Have Not Registered Securities Pursuant to
Section 12 of the Act.

                                 Does not apply.





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