**FORM 10-KSB**

**_________________________****SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

**_________________________**

(Mark One)

[X]   ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE
FISCAL YEAR ENDED JANUARY 31, 2001 OR

[  ]   TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE
TRANSITION PERIOD FROM ______________ TO ______________

Commission file number: 0-26439

**KIDSTOYSPLUS.COM, INC.**

(Exact name of small business issuer in its charter)

|Nevada                                                         |  | 98-0203927                          
|-------------------------------------------------------------- |  | ------------------------------------
|(State or other jurisdiction of
incorporation or organization) |  | (I.R.S. Employer Identification No.)
|                                                               |  |                                     
|1000-355 Burrard Street

Vancouver, British Columbia           |  | V6C 2G8                             
|(Address of principal executive offices)                       |  | (Zip Code)                          

Issuer's telephone number: 1-877-566-1212

Securities Registered Under Section 12(b) of the Exchange Act:   None

Securities Registered Under Section 12(g) of the Exchange Act:

Common Stock, 0.001 par value

(Title of class)

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.

Yes   [X]     No   [ ]

Check if there is no disclosure of delinquent filers in response to Item 405 of Regulation S-B contained in this form, and no
disclosure will be contained, to the best of the 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]

State issuer's revenues for most recent fiscal year:    $48,953.00

State the aggregate market value of the voting and non-voting common equity held by non-affiliates based on the average bid
and asked price as of March 31, 2001 being $     per share: $

State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date:
11,130,884 shares of Common Stock as of March 31, 2001.

**TABLE OF CONTENTS**

Page

PART I                                                                                                                                                                        1

ITEM 1. DESCRIPTION OF BUSINESS.                                                                                                                 1

ITEM 2. DESCRIPTION OF PROPERTY.                                                                                                              23

ITEM 3. LEGAL PROCEEDINGS                                                                                                                           23

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                                               23

PART II                                                                                                                                                                      23

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS                         23

ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS                                                                                                                                                           24

PERIOD                                                                                                                                                                      27

ITEM 7. FINANCIAL STATEMENTS                                                                                                                     30

ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE.                                                                                                                                                           30

PART III                                                                                                                                                                      30

ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE WITH
SECTION 16(A) OF THE EXCHANGE ACT                                                                                                           30

ITEM 10. EXECUTIVE COMPENSATION                                                                                                              30

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT               30

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS                                                        31

ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K                                                                                             31

**NOTE REGARDING FORWARD LOOKING STATEMENTS**

Except for statements of historical fact, certain information contained herein constitutes "forward-looking statements," including
without limitation statements containing the words "believes," "anticipates," "intends," "expects" and words of similar import, as
well as all projections of future results. Such forward-looking statements involve known and unknown risks, uncertainties and
other factors which may cause the actual results or achievements of the Company to be materially different from any future
results or achievements of the Company expressed or implied by such forward-looking statements. Such factors include, but are
not limited to the following: the Company's lack of an operating history, the Company's lack of revenues and unpredictability of
future revenues; the Company's lack of functional operating systems, distribution infrastructure and website; the seasonality of
the toy industry; the Company's future capital requirements to develop our operating systems, distribution facilities, website and
administrative support systems; intense competition from established competitors with greater resources; the Company's
reliance on internally developed systems and system development risks; the risks of system failure; the Company's dependence
on the Internet and continued growth of online commerce; the uncertainty of participating in developing a market; the
Company's reliance on merchandise suppliers and third parties and lack of agreements with such third parties; the risks
associated with rapidly changing technology; intellectual property risks; risks associated with online commerce security; the
risks associated with governmental regulations and legal uncertainties; and the other risks and uncertainties described under
"Description of Business - Risk Factors" in this Form 10-KSB.  Certain of the forward looking statements contained in this
annual report are identified with cross-references to this section and/or to specific risks identified under "Description of
Business - Risk Factors".

**PART I**

**Item 1.  Description of Business.**

**(a) Business Development**

**History of the Registrant**

Kidstoysplus.com, Inc. was organized and incorporated under the laws of the State of Nevada on February 4, 1999.
Kidstoysplus.com, Inc.'s principal office is located at 2924 Cliffe Avenue, Courtenay, British Columbia, Canada V9N 2L7.
Kidstoysplus.com, Inc. maintains an administrative office at Suite 1000 - 355 Burrard Street, Vancouver, British Columbia,
Canada V6C 2G8. Kidstoysplus.com, Inc.'s URL is www.kidstoysplus.com.

Kidstoysplus.com, Inc. was organized to develop and operate a retail website on the Internet specializing in children's products
that will initially include children's toys, collectable toy items and hobby related products. In the future, we may offer books,
music, story line CD's, audio-tapes, movies, video games and educational products.  The terms "we", "us", "our" and the
"Company" refer to Kidstoysplus.com, Inc.

**(b) Business of Issuer**

**NOTE:  The discussion set forth below in this Part I, as well as in Part II, does not take into account the "Subsequent
Events" section, set forth in Section 6 of Part II, which contemplates the sale of all or substantially all of the our assets.
Please review the Subsequent Events section carefully, as well as the Preliminary Proxy Statement filed with the SEC on
April 11, 2001, and the definitive Proxy Statement to be filed with the SEC.**

****

**General Overview**

We began 2000 by initially planning to operate a retail website on the Internet specializing in children's products and to offer
information about children's toys, entertainment products and other related topics of interest to children and their parents.  We
officially opened our website in July and immediately had a small amount of sales. On November 12th, 2000 the company
diversified by opening a physical flagship retail storefront.  As of January 31, 2001 we had sales of $48,953 and had available
approximately 1,700 different products on the website and retail store.  Our initial intentions were to target the collectable toy
(including die cast metal toys, limited edition dolls, toy cars and other collectable items) and hobby item (including train sets,
remote control planes and cars, models and other hobby products) segments of the children's toy market.  During 2000 we also
decided to target the unique toy (including Playmobil, Lego and 3D puzzles) segment of the children's toy market.  In the future,
we may expand our product offerings to include other toys and children's products.  We intended to fill a majority of our
customer's orders through strategic affiliations with "fulfillment vendors," who we anticipate would own, inventory and ship
products directly to our customers.  However the company never proceeded with this business strategy and decided it
appropriate to fill all customer orders from its own inventory of products.  We plan to maintain and continue to implement a
business plan based on this strategy.

We are continually expanding our product lines represented on our website and plan further retail storefront expansion.  Our
company is in a development and growth stage.

Our website was posted on the Internet for initial public viewing and testing in late November 1999 and was officially opened
for business in July 2000.

We leased an administrative office and retail storefront footage at 2924 Cliffe Avenue, Courtenay, British Columbia, Canada.
Late in 1999 until August 2000 we had leased a distribution and warehouse facility at 4767 Headquarters Road, Courtenay,
British Columbia, Canada.  In August 2000 we reviewed our leased space requirements and decided to downsize.  We did not
renew our option to re-lease the distribution and warehouse facility at 4767 Headquarters Road and instead leased a smaller
distribution and warehouse facility from our current landlord directly behind our administrative office and retail storefront
location.

Our toll free phone number is 1-877-566-1212, and our toll free fax number is 1-877-897-0403.

**Industry Background**

**Growth of the Internet and E-commerce**

The Internet is an increasingly significant global medium for communications, content and online commerce.  According to a
June 1999 report published by the U.S. Department of Commerce, NUA, an Internet strategy firm, estimated that 171 million
people had access to the Internet, 97 million users of them in the United States and Canada.  The Internet continually grew in
significance throughout 2000.  The growth in Internet usage can likely be attributed to factors such as:

i)   the large and growing base of installed personal computers in the workplace and at home,

ii)   advances in the performance and speed of personal computers and modems,

iii)  improvements in network infrastructure, and

iv)  easier and cheaper access to the Internet and increased awareness of the Internet among businesses and consumers.

The Internet has become an attractive commercial medium for business as the functionality, accessibility and overall usage has
increased over the last few years.  The Internet and other online services are evolving into unique sales and marketing channel.
In theory, electronic retailers are not limited by the traditional constraints of physical shelf space and have the potential to offer
customers a vast selection of products through efficient search and retrieval interfaces.  Moreover, electronic retailers can
interact directly with customers by frequently adjusting their featured selections, editorial insights, shopping interfaces, pricing
and visual presentations.

Beyond the benefits of selection, purchasing can be more convenient than shopping in a physical retail store as electronic
shopping can be done 24 hours a day and eliminates physical travel to a store.  Websites can present advertising and marketing
materials, display hundreds or thousand of products in catalog form, process transactions and fulfill orders, provide customers
with rapid and accurate responses to their questions and gather customer feedback efficiently.  Generally the cost of publishing
on the Internet is lower than traditional advertising and marketing mediums and the Internet offers the ability to reach and serve
a large and global customer base electronically from a central location.

As the field known as "e-commerce" develops, becomes more sophisticated and is accepted by a wider range of consumers, we
anticipate that the potential for personalized low-cost customer interaction will provide additional economic benefits and
economies that are unique to the Internet.  We believe that e-commerce retailers have the potential to build large, global
customer bases quickly and to achieve superior economic returns over the long term. Currently, there continues to be an
increasing number of products that are being sold online, including computers, travel services, brokerage services, automobiles,
music, and books.  We believe the number of products and services sold over the Internet and the volume of products will
increase substantially in the future.

We believe that marketing children's toys and related products over the Internet still presents an excellent business opportunity.
We intend to compete with traditional facilities based retailers and with e-commerce marketers of children's toys and related
products by differentiating our offerings through focusing on unique play toys, collectible toys and hobby items and by
establishing a reputation for high quality customer service. Despite our optimism about the future of e-commerce and our ability
to compete, we cannot assure you that we will successfully implement our business plan or that we will be able to compete with
established retailers of children's toys and related products.  Our business is subject to considerable risks.  See "Risk Factors."

**The Traditional Toy Industry**

The retail toy industry is large, growing and fragmented.  Several large "bricks and mortar" retailers with physical retail stores,
such as Toys "R" Us, Kay Bee Toys, Target Stores, Sears, Wal-Mart, K-Mart and others, dominate the toy industry and carry a
large selection of toys.  Many retailers in this industry also carry specialty toy products.  We believe that most large retailers are
located in metropolitan areas and that there is a large potential e-commerce target markets for children's toys and related
products in customers that reside in suburban and rural areas.

According to Play Things Magazine, the International Council of Toy Industries and the NDP Group estimate worldwide toy
industry sales in 1998 totaled $67.8 billion, a 2.7 percent increase from 1997 sales of $66 billion. There can be no assurance that
we will directly or indirectly benefit from the growth of the retail toy market or that growth of the toy market will continue.  We
cannot assure you that we will successfully continue to operate as a DOT COM and brick and mortar specialty toy retailer or
that consumers will purchase toys from our website or our physical retail storefront in sufficient quantities to achieve
profitability, if at all.

**The Traditional Distribution Channels**

Toy manufacturers generally sell their products directly to retailers and to a network of distributors.  Distributors serve as the
primary vendors for most retailers and generally carry 1,000 to 3,000 of the best-selling products.  We believe small
independent toy retailers sell a large portion of all toys sold.  These small retailers generally sell products that fit into the market
niche that each store has created and carry a limited selection of toys at any given time.  We intend to compete with retailers that
target the unique toy, collectible toy and hobby item markets.  The toy market has several retail chains that dominate the large
superstore category.  The largest U.S. retailers, including Wal-Mart, Toys "R" Us, Kay Bee Toys, Target Stores, Sears and
K-Mart, together are estimated to account for over 25% of total United States toy sales.  Toys "R" Us, Inc and Kay Bee Toy,
both traditional retailers, have focused aggressively on superstore growth.  Based on publicly available data, we estimate that
each superstore carries approximately 5,000 products, with the largest stores carrying between 10,000 and 12,000 products on
site.  Independent toy retailers typically carry a more limited selection of products in smaller retailing spaces and we believe
they face increasing competitive pressures from the superstore format.

We believe that several characteristics of the traditional toy industry have created inefficiencies that may be eliminated by
e-commerce including:

(i)   the capital intensive investments required for inventory, real estate and personnel for each retail location;

(ii)   limits in the amount of inventory that can be economically carried in a retail location (we estimate that the average
superstore stocks less than 25% of the toy products available);

(iii)  difficulties implementing uniform operating policies and managing customer service levels, customer satisfaction
programs and customer expectations in all locations;

(iv)   risks associated with managing demand and inventory for each retail store;

(v)    inability to use customer specific information to develop unique marketing communications to individual customers;

(vi)   high costs of disseminating marketing materials to customers; and

(vii)  high costs of offering individualized customer services; and

(viii)  a retail locations limited market area.

We believe that we can use e-commerce marketing along with retail store locations can reduce these inefficiencies, while
allowing us to develop a distribution channel that will capitalize on opportunities for direct marketing and its unlimited
customer potential.  We cannot assure you that we will ever be able to offer the breadth of products offered by facilities based
superstores or that we will be capable of achieving operating efficiencies to compete on the basis of price.

**Competition**

Retailing children's toys and entertainment products is intensely competitive.  We will compete with a variety of competitors
with significantly greater experience and with greater financial, human and technical resources than us.  These competitors
include:

(i)   traditional store-based toy and children's product retailers such as Toys "R" Us, Kay-Bee Stores, FAO Schwarz, and others;

(ii)  major discount retailers such as Wal-Mart, Target Stores, Sears, Kmart and others;

(iii)  independent and specialty children's toy stores including Disney, Warner Bros.  and others;

(iv)  catalog retailers;

(v)   Internet portals such as AOL and YAHOO etc;

(vi)  specialty toy stores featuring collectable toys and hobby items and

(vii)  various online competitors such as Toys "R" Us/Amazon.com and Smarterkids.com.

Marketing toys over the Internet is new, rapidly evolving and becoming intensely competitive.  Barriers to entry are minimal
and new competitors can launch new sites at a relatively low cost.  In addition, traditional retailers have begun to launch
websites and online services that are expected to compete directly with our website and us.  Competitive pressures created by
any one of these companies, singularly or collectively, could have a material adverse effect on our business, prospects, financial
condition and results of operations.

We believe that the principal competitive factors for on-line toy retailers are brand recognition, selection, convenience, price,
speed, accessibility, customer service, reliability and speed of fulfillment.

Currently, we estimate that there are approximately 130 toy retailers with Internet websites.  We believe that the partnership of
Toys "R" Us and Amazon.com currently dominate the on-line market for children's toys and related products and that they are
likely to face significant competition from established brick and mortar retailers developing on-line retailer presence in the
future (ie: Target and Wal - Mart).

Toys "R" Us, Inc. is one of the world's largest toy resellers with gross revenues of approximately $11 billion in 1998.  Toys "R"
Us launched its website in 1997.

Amazon.com is one of the largest retails of merchandise on the Internet, selling a variety of products and services.  Amazon.com
began selling toys over the Internet in 1999.

In mid 2000 these two companies formed a partnership that allows Amazon.com to represent online the complete Toys "R" Us,
Inc toy product line while Toys "R" Us, Inc owns and maintains inventory for Amazon.com represents.

We believe that most of toy retailers with Internet websites are small, specialized companies marketing specific categories or
lines of toys.  We intend to compete directly against these companies by offering a line of products that feature unique play toys,
collectable toys and hobby items at competitive prices.  We attract visitors and potential customers to our website by offering
special content and information of interest to buyers of collectable toys and hobby items.  We also intended to offer popular toy
products through strategic relationships with fulfillment vendors and through affiliate programs that will allow us to offer the
inventory of other on line retailers to our visitors and to receive a fee for transactions originated on our website. The company
never proceeded with this business aspect of its original business model.

We have established successful additional Internet retail shops on Amazon.zshops and on Yahoo shopping.  We will continue to
expand this retailing strategy throughout 2001.

There can be no assurance we will be able to continue successfully operating our website or retail storefront, the technologies
and/or the distribution systems required to market children's toys over the Internet and through our retail storefront in a timely
manner, if at all.  We also cannot assure you that our target market will continue to purchase our selection of products or that we
will successfully differentiate our website and product offerings from those of our competitors.  If we fail to continue
developing our website or any of the technologies, systems, or strategic relationships necessary to implement our business plan
in a timely manner, we will not be able to successfully compete in the marketplace and such failure will have a material adverse
effect on our business and results of operations.

We believe that the principal competitive factors in our market will be:

--ease in access to the website;

--brand recognition;

--product selection and availability;

--personalized services and free services;

--user friendly shop and browse web features;

--a comprehensive easy to use search engine and tools;

--superior graphics and technical support;

--combination of entertainment and unique product offerings;

--quality of editorial and other site content;

--highly visible order buttons on every screen and easy to use ordering systems;

--immediate access to a sales consultant either by phone or e-mail;

--customer focus with superior support and service;

--experienced knowledgeable management and personnel; and

--reliability and speed of order fulfillment.

We believe that we will differentiate our website from our competitors by considering these factors in developing marketing and
systems strategies and by offering a sufficiently differentiated product line featuring non-mainstream toy products, including
collectable toys, hobby items, and a wide range of unique imaginative toy products manufactured by small toy manufactures
across the country that are not typically carried by mainstream retailers.

Many of our current and potential competitors have experience in the retail toy industry, experience in the e-commerce industry,
longer operating histories, customer bases, brand recognition and significantly greater financial, marketing and other resources
than us.  We had no revenues, no established history of operations and no experience marketing toys over the Internet until mid
2000.

In addition, our competitors may be acquired by, receive investments from or enter into other commercial relationships with
larger, well-established and well-financed companies, which could increase their competitive advantage over us.  Some of our
competitors may be able to secure merchandise from vendors on more favorable terms, devote greater resources to marketing
and promotional campaigns, adopt more aggressive pricing or inventory availability policies and devote substantially more
resources to website and systems development than us.  We cannot assure you that we will be able to continually compete
successfully against current and future competitors, and competitive pressures faced by us may have a material adverse effect on
our business, prospects, financial condition and results of operations.  Further, as a strategic response to changes in the
competitive environment, we may from time to time make certain pricing, service or marketing decisions that may affect our
business.  New technologies and the expansion of existing technologies may increase the competitive pressures on our business.
In addition, companies that control access to transactions through network access or Web browsers could promote our
competitors websites or charge us a substantial fee for access through their in their portals.

**Our Marketing Strategy**

Originally our marketing strategy was to market children's toys and related products to niche market segments over the Internet
only.  We initially plan to target the market for (i) collectable toys, including die cast metal toys, limited edition dolls, toy cars
and other collectable items and (ii) hobby items including train sets, remote control planes and cars, models and other hobby
products.  Our initial target markets consist of Internet users that are searching for collectable toys, hobby items or other related
products, or searching for information related to such products on the Internet.  We intend to market our products through our
website which is anticipated to resemble a traditional toy store in an electronic or "virtual" setting. During 2000 we modified our
original business plan and decided to open physical retail store locations.  We now believe that a combination of Internet
retailing presence and physical retail storefront operations will be the key to our future retailing success.  Our pricing strategy is
to sell our products at prices that are competitive with or below the prices charged by other Internet retailers and physical facility
based toy stores.  We process and deliver orders for our products in one to ten business days depending on the delivery method
that the customer selects.

**Our Technology**

We have developed and continue to develop software technology that allows us to deliver outstanding service and to achieve the
economies we believe are inherent to our business.  Our strategy is to build strong brand recognition, customer loyalty and
supplier relationships, while creating an economic model that is superior to other online and traditional capital and real
estate-intensive toy retailers.  We believe that our success will depend on our ability to continually develop technology to offer
an online experience that is easy to use, useful, functional, entertaining and educational.  We believe that our technology must
meet or exceed the general expectations of the virtual shopper who we believe will have experience shopping with other online
retailers and who will expect a high level of technical sophistication from our website.

Reticular Consulting of Victoria, British Columbia was engaged to design and develop our website.  We began testing our
website in late November 1999.  In early 2000 Reticular Consulting began final software modifications for the Company to
anticipate an official opening of the website for summer, 2000. Under the terms of our agreement, we agreed to pay Reticular a
consulting fee of $3,000 per month for the initial planning stage of the development of our website.  This work was completed
in early 2000.  Refinements and continued development on the website beyond January 2000 were carried out in-house with
consultants. We anticipate we will spend approximately $50,000 to $75,000 to continually enhance, develop and modify the
software technology related to our customer service and support systems, inventory control systems, distribution and logistical
facilitation systems, accounting systems and other internal control systems on a yearly basis.

The cost for developing technology is expensive and the process will require continuous testing and refinement.  Our
commercial success will depend on our ability to continually attract visitors and shoppers to our website.  This will require us to
develop and use increasing sophisticated technologies to generate, sustain and maintain user interest and satisfaction.  See "Note
Regarding Forward Looking Statements."

We have hired internal programmers, which maintain and continue to develop the software technologies related to our internal
control and distribution systems.  There can be no assurance that we will continue to successfully develop and test the
technologies related to the website or contemplated in our business plan on a timely basis, if at all.

We completed the development of our website and our support services and officially launch our opening in July of 2000.  If we
fail to continually enhance our website or our support systems or fail to raise additional capital as planned, our business and
results of operations will be materially adversely affected.  See "Note Regarding Forward Looking Statements."

**Online Service and Internet Advertising**

During 2000 we set-up additional online retailing shops other then our own website on various high-traffic Internet portals to
increase awareness of kidstoysplus.com and its products offered.  We have established these additional Internet retailing outlets
on Amazon.zshops and on Yahoo shopping. We intend to further develop this marketing concept on additional high-traffic
Internet portals throughout 2001.  We believe that this type of Internet advertising provides the company with a great amount of
exposure at a relatively low advertising cost.  Thus we believe our customers acquisition cost are relatively low compared to
past DOT COM enterprises that now have disappeared.

**Advertising and Public Relations**

We intend to engage in a coordinated program of print advertising through specialized and general circulation newspapers and
magazines.  The Company may also advertise in other media.  As a result of our planned public relations activities and current
Internet e-commerce interest, we may receive publicity.  There can be no assurance that we will have sufficient resources to
carry out our promotional and advertising strategy or that we will receive any publicity.

**Personalized Shopping Services**

We offer personalized notification and shopping services through telephone, website and email services.

**Customer Service**

We believe that our ability to establish and maintain long-term relationships with our customers and encourage repeat visits and
purchases depends, in part, on the strength of our customer support and service operations..  We currently hold the highest
customer service rating (five star) from Amazon.zshops and Yahoo shopping.    Furthermore, we use frequent communication
with and feedback from our customers in order to continually improve both the online and retail store and our services.  We
offer an e-mail address to enable customers to request information and to encourage feedback and suggestions.  We also have
established a team of customer support and service personnel who are responsible for handling general customer inquiries,
answering customer questions about the ordering process, and investigating the status of orders, shipments and payments.

We have established a North American toll-free customer information inquiry and product order line.  This line is answered by
personnel who we are trained to provide product information, assurances to customers related to their purchase decision and
general customer support for our website.  We have automated certain tools used by our customer support and service staff.

**Warehouse and Fulfillment**

We source our products from a network of toy manufacturers and distributors. We carry minimal inventory and rely to a large
extent on our ability to provide inventory for customer orders from past customer purchasing statistics to maintain appropriate
inventory levels to fill orders for the products we offer.  We update our site daily with inventory information received from our
product suppliers, which will enable customers to check the availability of products before ordering.  We currently transmit
orders to our product suppliers manually. Product orders are issue only when product is required and we meet minimum supplier
product ordering requirements.

We stock a limited "in-house" inventory of products to keep inventory values as low as possible in an attempt to conserve cash.
We will hire personnel that specialize in sourcing hard-to-find "special request" toy products and fill special request orders,
subject to availability in the future.  We will ship our in-house inventory directly from our distribution facility to our customers.

**Back End System Support**

We have developed a software system that integrates and that we believe is capable of managing all of our website functionality,
marketing, distribution and other information.  The information captured by the software system will include: product offerings,
consumer information on products and manufacturers, promotions, pricing, margin, customer lists and customer data, shipping
and handling data, customer support information, procedures and policies, credit information, inventory control, procurement
and distributor information, catalogues, news and other information required to integrate our operations.  We have developed a
system that allows us to collect and analyze information in a single cohesive system that allows us to use and exchange
information within our organization.  In the future we may also integrate certain parts of our systems with strategic partners.

**Initial Launch Phase of Our Kidstoysplus.com Website**

Through the first and second fiscal quarters of 2000 we were in the final stages of completing agreements or arrangements with
respect to:

inventory procurement or order fulfillment for our web-based inventory;

credit card processing;

hiring additional staff for one of our distribution facilities and the customer support and service systems office; or

procuring shipping labels, invoices or other materials to ship products from our fulfillment vendors and our distribution facility
to our customers.

We had (i) secured a license to operate our distribution facility, (ii) purchased computer systems and software for our
distribution and customer service facilities and (iii) finalized our policies and procedures for inventory procurement, internal and
outside order fulfillment, inventory control, financing and accounting controls.

We official launched our website in July 2000. We immediately received a small amount of orders.  We continued to test
internal operating systems, including customer order entry and credit transaction processing, final fulfillment, shipping, and
delivery until October 2000.  By November 1st we were ready for the company's first online holiday shoppers.

Provided adequate financing is available, the year 2001 will be the Company's first full year of operations as an Internet and
brick and mortar toy retailer.  There can be no assurance that we will have sufficient financing to implement our business plan in
2001.  Our inability to obtain addition financing for 2001 will have a material adverse affect on our business and results of
operation.

**Capital Requirements**

Capital requirements of a high technology start-up company are continuous, especially in the early years, or until the company
can establish a revenue stream from product sales.

We have not entered into any arrangements or agreements to obtain additional financing beyond January 31, 2001.  There can be
no assurance that the necessary financing will be available to the Company on terms acceptable to us, if at all.  If we are
unsuccessful in obtaining the financing required to implement our business plan in 2001, an investment in our common shares
may result in a loss of the investment made.

For the fiscal year ending January 31, 2001, we completed one private placement offering of units, consisting of common stock
and warrants to acquire common stock of the company providing us approximately $738,000.  See "Recent Sales of
Unregistered Securities."  The proceeds from the private placements were used to establish our website, offset some of the costs
required to establish our distribution and warehouse facility, purchase opening inventories of select and limited toy lines for the
Initial Launch Phase, offset the cost of establishing our distribution and customer service systems; and begin to fund our brand
identity marketing activities.  These proceeds were sufficient to establish all of the systems that were needed to fully implement
our business plan.

During the third and fourth calendar quarter of 2000, additional financing to continue develop our website and distribution
systems and to continue our marketing activities was never obtained.  We anticipate we will need to obtain additional financing
in the amount of at least $250,000 during the second to third fiscal quarters of 2001 to increase and diversify our product
offerings, to open additional retail storefront locations and to maintain adequate inventory to satisfy customer expectations and
to meet customer demands.  There can be no assurance that we will successfully raise any additional capital.  See
"Management's Discussion and Analysis of Financial Condition and Results of Operations."

**Consultants**

As of January 31, 2001, we had six full-time personnel/consultants.  Albert R. Timcke, a director and our President, assists with
strategic corporate planning, financing activities and product research and development.  Axel Miedbrodt our vice president of
operations responsible for establishing our distribution and customer service facilities, Caroline Miskenack, our customer
service manager responsible for complete customer service operations, Renmark Financial to assist with our corporate
communications and marketing, Booker Bennett an in-house programmer that is designing our website and assisting us with
developing our internal distribution and customer service systems and Ian Martinovsky our retail store manager.  The company
also employs three part time/casual employees.

As of January 31, 2001, the company was paying no other consultant.

Brian C. Doutaz, a part-time consultant as of January 31, 2000, resigned as a director of and a consultant to the Company on
April 7, 2000.

In the future, we may engage additional consultants to assist us with the development or licensing of software and information
systems and the implementation of our business plan.

We anticipate we will hire up to six (6) employees during the third and fourth quarters of 2001 to provide 1-800 phone number
consumer support services, including one (1) employee to provide marketing and sales support, two (2) employees to staff our
distribution warehouse, one (1) information systems employee and two (2) administration employees.

Our success will depend in large part on our ability to attract and retain skilled and experienced employees and consultants.  We
do not anticipate any of our employees will be covered by a collective bargaining agreement.

**Intellectual Property**

We have not registered any trademarks in the United States or elsewhere.  We intend to submit an application to register the
name "Kidstoysplus.com" as our trademark during 2001.

We believe that we currently have no technologies that are patentable.

**Risk Factors**

Our business is subject to a number of risks that are generally associated with start-up companies in the development stage of
their business and companies engaged in business through the Internet.  These risks could cause our actual results to differ
materially from the results we project and any forward-looking statement we make in this registration statement.  Below is a
description of some of the risks that we anticipate will be associated with our business and an investment in our company.

**Our lack of an operating history makes future forecasting difficult.**

We were incorporated on February 4, 1999, to engage in the business of marketing children's toys and related products over the
Internet.  We are a development stage company, which means we are in the process of developing our business.  We have
generated a small amount of revenues from our operations totaling $48,953 to January 31, 2001.  During 2000 we have entered
into all of the agreements or arrangements that will be required to conduct our business including, among others: agreements for
the development of all of the technologies required to operate our business; arrangements to lease a server for our website;
agreements to equip and furnish our warehouse, order processing center or any other physical facility that we will require to
market, sell and deliver products; agreements with fulfillment vendors to provide merchandise to sell on our website;
agreements to procure our inventory of in-house products; arrangements to hire employees; arrangements for shipping and
packaging of orders; or agreements for credit facility or other financing.  We cannot assure you that we will be able to continue
to successfully enter into these arrangements or agreements in a timely manner, if at all, and our failure to do so will have a
material adverse affect on our business and results of operations.

As a result of our lack of an operating history, it is difficult to accurately forecast our first quarter sales for 2001 and we have
limited meaningful historical financial data upon which to base planned operating expenses.  We base our current and future
expense levels on our operating plans and estimates of future net sales, and several of our expenses are anticipated to be fixed
because of the amount of capital required to establish our business and the expenditures we anticipate will be necessary to
maintain a minimum level of capacity.  Our sales and operating results are difficult to forecast because they will generally
depend on the volume and timing of the orders we receive.  As a result, we may be unable to adjust our spending in a timely
manner to compensate for any unexpected revenue shortfall.  This inability could cause our net losses in a given quarter to be
greater than expected.

We anticipate future losses and negative cash flow to extend into 2001.

We expect operating losses and negative cash flow to continue for the foreseeable future.  We anticipate our losses will not
increase significantly from current levels because we expect sales growth to continue throughout 2001.  Expense will increase as
additional costs and expenses grow related to:

-brand development, marketing and other promotional activities;

-the expansion of our inventory management and distribution operations;

-the continued development of our website, the systems that we use to

-process customers' orders and payments, and our computer network;

-increased marketing activities;

-increased inventory carrying costs;

-increased administrative costs;

-cost related to financings;

-the expansion of our product offerings and our website content; and

-development of relationships with strategic business partners.

As of January 31, 2001, we had an accumulated deficit of $821,901 since the company's inception.  Our losses will decrease
continually in 2001 as we anticipate sales of our products will increase significantly throughout 2001. As sales increase costs of
operations will increase due to a number of factors including:

-an increase in the number of employees;

-an increase in sales and marketing activities;

-addition of warehouse facilities and infrastructure;

-increased inventory carrying costs;

-increase administrative costs; and

-increased training costs.

Our ability to become profitable depends on our ability to generate and sustain substantial net sales while maintaining
reasonable expense levels. See "Selected Financial Data" and "Management's Discussion and Analysis of Financial Condition
and Results of Operations".

**Our operating results are difficult to predict.**

Our operating results are anticipated to fluctuate significantly due to a variety of factors, many of which are outside of our
control.  Factors that may harm our business or cause our operating results to fluctuate include the following:

-our inability to obtain new customers at reasonable cost, retain existing customers, or encourage repeat purchases;

-decreases in the number of visitors to our website or our inability to convert visitors into customers;

-the mix of toys and other products sold by us;

-our ability to offer products and content that appeals to our target markets;

-seasonality of the toy industry and certain product lines;

-our inability to manage inventory levels;

-our inability to manage our distribution operations;

-our inability to adequately maintain, upgrade and develop our website, the systems that we use to process customers' orders and
payments or our computer network;

-the ability of our competitors to offer new or enhanced websites, services or products; price competition;

-an increase in the level of our product returns;

-fluctuations in the demand for children's products associated with movies, television and other entertainment events;

-our inability to obtain popular children's toys, video games, software, videos and music from our vendors;

-fluctuations in the amount of consumer spending on children's toys, video games, software, videos and music;

-the failure to develop new marketing relationships with key business partners;

-the extent to which we are not able to participate in advertising campaigns such as those conducted by strategic partners;

-increases in the cost of online or offline advertising;

-the amount and timing of operating costs and capital expenditures relating to expansion of our operations;

-unexpected increases in shipping costs or delivery times, particularly during the holiday season;

-technical difficulties, system downtime or Internet brownouts;

-government regulations related to use of the Internet for commerce or for sales and distribution of toys, video games, software,
videos and music; and

-economic conditions specific to the Internet, online commerce and the children's toy and related product industries.

A number of factors will cause our gross margins to fluctuate in future periods, including the mix of toys and other products
sold by us, inventory management, inbound and outbound shipping and handling costs, the level of product returns and the level
of discount pricing and promotional coupon usage.  Any change in one or more of these factors could reduce our gross margins
in future periods.

**We expect our sales to experience seasonal fluctuations that may affect our cash flow and our ability to manage our
inventory effectively.**

We expect to experience seasonal fluctuations in our net sales, with the heaviest demand for toys anticipated to be during the
Christmas season. These seasonal patterns will cause quarterly fluctuations in our operating results.  In particular, a
disproportionate amount of our net sales will be realized during the fourth calendar quarter and we expect this trend to continue
in the future.

In anticipation of increased sales activity during the fourth calendar quarter, we anticipate that we will hire temporary employees
to bolster our permanent staff and we will significantly increase our inventory levels.  For this reason, if our net sales were
below seasonal expectations during this quarter, our annual operating results could be below our expectations.

Due to our lack of an operating history, it is difficult to predict the extent that seasonal patterns will have on our sales or the
impact such seasonality will have on our business and financial results.  In the future, trends in seasonal sales patterns may be
more pronounced than others, which may strain our personnel, warehousing and order shipment activities and may cause a
shortfall in net sales as compared to expenses in a given period. Seasonal fluctuations may have a material adverse effect on our
ability to manage our operations and inventories.

**We may face significant inventory risk because consumer demand can change for products between the times that we
order products and the time that we receive them.**

We may carry a significant level of inventory if we are unable to enter into satisfactory arrangements with fulfillment vendors
that offer merchandise that we elect to offer on our website or as our business grows.  We may also inventory merchandise that
we believe will be popular to assure availability to our customers.  As a result, the changing trends in consumer tastes in the
market for collectable toys, hobby items and related products will subject us to significant inventory risks.  It is critical to our
success that we accurately predict these trends and to not overstock unpopular products.  The demand for specific products can
change between the time the products are ordered and the date of receipt.  We are particularly exposed to this risk because we
anticipate that we will derive a majority of our net sales in the fourth calendar quarter of each year.  Our failure to sufficiently
stock popular toys and other products in advance of such fourth calendar quarter would harm our operating results for the entire
fiscal year.

In the event that one or more products do not achieve widespread consumer acceptance, we may be required to take significant
inventory markdowns, which could reduce our net sales and gross margins.  We anticipate that this risk may be greatest in the
first calendar quarter of each year, after we have significantly increased inventory levels for the holiday season.  We believe that
this risk will increase as we open new departments or enter new product categories due to our lack of experience in purchasing
products for these categories.  In addition, to the extent that demand for our products increase over time, we may be forced to
increase inventory levels.  Any such increase would subject us to additional inventory risks.

**Because we do not intend to have long-term or exclusive vendor contracts, we may not be able to obtain sufficient
quantities of popular children's products in a timely manner and we could lose sales.**

If we are not able to offer our customers sufficient quantities of toys or other products in a timely manner, we could lose
customers and our net sales could be below our expectations.  Our success depends on our ability to purchase or make available
products in sufficient quantities at competitive prices, particularly for the holiday shopping season.  Based on our discussions
with potential fulfillment vendors, distributors and suppliers, we believe it is common in the industry not to have long-term or
exclusive arrangements with any vendor or distributor that will guarantee the availability of toys or other children's products.  In
addition, popular collectable toys, hobby items, children's merchandise and other toys are often ordered months in advance of
delivery and may not be available to us through fulfillment vendors or may require minimum quantity orders that exceed our
demand.  Therefore, we will not have a predictable or guaranteed supply of popular toys or other products on acceptable terms.
If our product selection is limited or the most popular merchandise is unavailable through our website, we may be unable to
compete effectively.

**If we are unable to obtain sufficient quantities of products from our key vendors, our net sales will be adversely affected.**

If we were unable to obtain sufficient quantities of products from our key product suppliers, we could lose customers and our
net sales could be below expectations.  From time to time, we anticipate we may experience difficulty in obtaining sufficient
product allocations from key fulfillment vendors due to the high demand for specific product selections or in the event our
fulfillment vendors are unable to obtain sufficient inventory to fill our orders.  All of our fulfillment vendors are distributors to
other retailers and, from time to time, such vendors may receive firm orders for specific product selections from our
competitors, which may make the availability of such selections unavailable to us.  Because we anticipate our arrangements for
order fulfillment through our fulfillment vendors will initially be on a "just-in-time" or "as ordered" basis, we may be unable to
make available the most popular products to our customers unless we place firm orders and accept delivery for such products,
which may increase our inventory carrying costs. The unavailability of popular products or increases in carrying costs may have
a material adverse affect on our results of operations and our business.

In addition, we believe our key vendors will have established, and may continue to expand, their own online retailing efforts,
which may impact our ability to get sufficient product allocations from such vendors.  We currently have agreements or
arrangements to acquire inventory from manufacturers or distributors.

**To manage our growth and expansion, we need to implement financial and managerial controls and reporting systems
and procedures, and our inability to do so successfully will adversely affect our business.**

Our anticipated growth in personnel and operations will continue to place a significant strain on our management, information
systems and resources.  In order to manage this growth effectively, we need to continually enhance our financial and managerial
controls and reporting systems and procedures.  If we experience significant increases in the number of our personnel, will our
existing management team be able to effectively train, supervise and manage all of our personnel.  In addition, our information
systems must be able to handle adequately the anticipated volume of information and transactions that would result from our
operations and our anticipated growth.  Our failure to successfully implement, improve and integrate these systems and
procedures would cause our results of operations to be below expectations.

**We may not be able to compete successfully against current and future competitors.**

The online commerce market is new, rapidly evolve and intensely competitive. Increased competition is likely to result in price
reductions, reduced gross margins and loss of market share, any of which could seriously harm our net sales and results of
operations.  We expect competition to intensify in the future because current and new competitors can enter our market with
little difficulty and can launch new websites at a relatively low cost.  In addition, should we decide to expand our product lines
to offer video games, software, videos and music, such retailing industries are intensely competitive.

We currently or potentially intend to compete with a variety of other companies, including:

-traditional store-based retailers of collectable toys and hobby products;

-traditional store-based toy and children's product retailers such as Toys "R" Us, FAO Schwarz, Zany Brainy and Noodle
Kidoodle;

-major discount retailers such as Wal-Mart, Kmart, Sears and Target Stores;

-online stores operated by Toys "R" Us/Amazon.com, Wal-Mart, and FAO Schwarz;

-physical and online stores of entertainment entities that sell and license children's products, such as The Walt Disney Company
and Warner Bros.;

-catalog retailers of children's products;

-vendors or manufacturers of children's products that currently sell some of their products directly online, such as Mattel and
Hasbro;

-other online retailers that include children's products as part of their product offerings, such as Amazon.com,
Barnesandnoble.com, CDnow, Beyond.com and Reel.com;

-Internet portals and online service providers that feature shopping services such as AOL, Yahoo!, Excite, Shopnow.com and
Lycos; and

-various smaller online retailers of children's products, such as BrainPlay.com, Smarterkids.com.

Many traditional store-based and online competitors have long operating histories, large customer or user bases, brand
recognition and loyalty and significant financial, marketing and other resources.  Many of our primary competitors, including
specialty toy stores that offer collectable toys and hobby items, have knowledgeable personnel and substantial experience in
retailing collectable toys and hobby items.  These competitors may establish their own websites and may devote substantially
more resources to website development than we can, which may adversely affect our ability to attract visitors to our website.  In
addition, larger, well-established and well-financed entities may join with online competitors or children's toy, video game,
software, video and music publishers or suppliers as the use of the Internet and other online services increases.

Our competitors may be able to secure products from vendors on more favorable terms, fulfill customer orders more efficiently
and adopt more aggressive pricing or inventory availability policies than we can.  Traditional store-based retailers also enable
customers to see and feel products in a manner that is not possible over the Internet.

**We may expand our product lines and enter new business categories that may not achieve market acceptance.**

Any new department or product category that is launched or acquired by us, which is not favorably received by consumers could
damage our brand or reputation.  This damage could impair our ability to attract new customers, which could cause our net sales
to fall below expectations.  An expansion of our business into other new departments or product categories will require
significant additional expenses, and strain our management, financial and operational resources.  This type of expansion would
also subject us to increased inventory risk and could adversely affect our levels of customer service.  We may choose to expand
our operations by developing other new departments or product categories, promoting new or complementary products,
expanding the breadth and depth of products and services offered or expanding our market presence through relationships with
third parties.

**If we experience problems in our distribution operations, we could lose customers.**

We intend to rely on our product suppliers to provide us with continuous access to inventory.  We also intend to rely upon
third-party carriers for shipping our products to our customers and to ship products to and from our distribution facility.
Consequently, we are subject to the risks, including employee strikes and inclement weather, associated with such carriers'
ability to provide delivery services to meet our shipping needs.  In addition, failure to deliver products to our customers in a
timely manner would damage our reputation and brand.  We also intend to depend upon temporary employees to adequately
staff our distribution facility, particularly during the holiday shopping season.  If we do not have sufficient sources of temporary
employees, we could lose customers.

**If we do not successfully continue to operate the Kidstoysplus.com Website and the systems that process customers'
orders, we will be unable to implement our business plan.**

If we fail to continue to operate our website, we will be unable to carry out our business plan.  Furthermore, we must establish
computer and information systems that we will use to process and ship customer orders and process payments or we may not be
able to successfully distribute customer orders. Any failure of our systems to act in an integrated manner could result in the loss
of customers and our net sales will be adversely affected.

In addition, our failure to rapidly upgrade our website or expand these computer systems without system downtime, particularly
during the fourth calendar quarter, would further reduce our net sales.  We may experience difficulty in improving and
maintaining such systems if our employees or contractors that develop or maintain our computer systems become unavailable to
us.  We also expect periodic systems interruptions while enhancing and expanding these computer systems that will affect the
quality of our customer service.

**The occurrence of a natural disaster or other unexpected problem, which affects our facilities or systems, could damage
our reputation and brand and adversely affect our net sales.**

The occurrence of an earthquake or other natural disaster or unanticipated problems at our planned facilities in British Columbia
and Washington state, or at the third-party location that we anticipate will house substantially all of our computer and
communications hardware systems, could cause interruptions or delays in our business, loss of data or render us unable to accept
and fulfill customer orders.  Any such interruptions or delays at either of these facilities would reduce our net sales.  In addition,
we anticipate that our systems and operations will be vulnerable to damage or interruption from fire, flood, power loss,
telecommunications failure, break-ins, earthquake and similar events.  We have no formal disaster recovery plan and our
business interruption insurance may not adequately compensate us for losses that may occur.  In addition, the failure by the
third-party facility to provide the data communications capacity required by us, as a result of human error, natural disaster or
other operational disruptions, could result in interruptions in our service.  The occurrence of any or all of these events could
damage our reputation and brand and impair our business.

**Our net sales could decrease if our online security measures fail.**

Our relationships with our customers may be adversely affected if the security measures that we use to protect their personal
information, such as credit card numbers, are ineffective.  If, as a result, we lose many customers, our net sales could decrease.
We intend to rely on security and authentication technology that we intend to license from third parties.  With this technology,
we intend to perform real-time credit card authorization and verification with our bank.  We cannot predict that whether events
or developments will result in a compromise or breach of the technology we use to protect a customer's personal information.

Furthermore, the servers we intend to rely on may be vulnerable to computer viruses, physical or electronic break-ins and
similar disruptions.  We may need to expend significant additional capital and other resources to protect against a security
breach or to alleviate problems caused by any breaches. We cannot assure you that we can prevent all security breaches.

**Our net sales will be adversely affected if we experience significant credit card fraud.**

A failure to adequately control fraudulent credit card transactions would reduce our net sales and our gross margins because we
do not intend to carry insurance against this risk.  We intend to use developed technology to help us to detect the fraudulent use
of credit card information.  Nonetheless, we expect to suffer losses as a result of orders placed with fraudulent credit card data
even though the associated financial institution approved payment of the orders.  Under currently contemplated credit card
practices, we are liable for fraudulent credit card transactions because we do not obtain a cardholder's signature.

**If we do not respond to rapid technological changes, our services could become obsolete and we could lose customers.**

If we face material delays in introducing new services, products and enhancements, our customers may forego the use of our
services and use those of our competitors.  To remain competitive, we must continue to enhance and improve the functionality
and features of our online store.  The Internet and the online commerce industry are rapidly changing.  If competitors introduce
new products and services embodying new technologies, or if new industry standards and practices emerge, our website and our
proprietary technology and systems may become obsolete.

The development of our website and other proprietary technology will entail significant technical and business risks.  We may
use new technologies ineffectively or we may fail to adapt our website or systems that we use to process customers' orders and
payments and our computer network to customer requirements or emerging industry standards may fail.

**Intellectual property claims against us can be costly and could impair our business.**

Other parties may assert infringement or unfair competition claims against us.  We cannot predict whether third parties will
assert claims of infringement against us, or whether any assertions or prosecutions will harm our business.  If we are forced to
defend against any such claims, whether they are with or without merit or are determined in our favor, then we may face costly
litigation, diversion of technical and management personnel, or product shipment delays.  As a result of such a dispute, we may
have to develop non-infringing technology or enter into royalty or licensing agreements.  Such royalty or licensing agreements,
if required, may be unavailable on terms acceptable to us, or at all.  If there is a successful claim of product infringement against
us and we are unable to develop non-infringing technology or license the infringed or similar technology on a timely basis, it
could impair our business.

**If the protection of our trademarks and proprietary rights is inadequate, our brand and reputation could be impaired
and we could lose customers.**

We intend to take steps to protect our proprietary rights, which may be inadequate.  We intend to file an application to register
our "Kidstoysplus" trademark for sales of toys, games and playthings during the fiscal year of 2001 if we have sufficient
financial resources to do so.  We may also file applications for patent protection of our technology, if patentable, and additional
trademarks in the future.  We anticipate our future copyrights, service marks, trademarks; trade dress, trade secrets and similar
intellectual property will be critical to our success.  We intend to rely on trademark and copyright law, trade secret protection
and confidentiality or license agreements with our employees, customers, partners and others to protect our proprietary rights.

Effective trademark, service mark, copyright and trade secret protection may not be available in every country in which we will
sell our products and services online.  Furthermore, the relationship between regulations governing domain names and laws
protecting trademarks and similar proprietary rights is unclear.  Therefore, we may be unable to prevent third parties from
acquiring domain names that are similar to, infringe upon or otherwise decrease the value of our trademarks and other
proprietary rights.**The loss of the services of one or more of our key personnel, or our failure to attract, assimilate and retain other highly
qualified personnel in the future, could disrupt our operations.**

The loss of the services of one or more of our key personnel could seriously interrupt our business.  We depend on the continued
services and performance of our senior management and other key personnel, particularly Albert R. Timcke, our President,
Chief Executive Officer and Chairman of the Board, and Timothy J.  Anderson, and Mark McFarland as directors of the
Company.  Mr. Timcke is a full-time consultant to the Company and dedicates 100% of his attention to the development of our
business.

We have appointed Axel Miedbrodt to Vice President of Operations.  Mr. Miedbrodt has manufacturing, distribution, and
management experience.  Our inability to retain the continued services of Mr. Miedbrodt could have a material adverse effect on
the Company.

We continue to seek other key employees and continue discussion to expand the Board of Directors with additional
professionals from the toy and e-business industries.  We hope to establish an Advisory Council made up of professional
advisors and knowledgeable consumers to provide constructive criticism of our operations.

Our future success will in large part depend upon our ability to recruit, attract, hire, and retain qualified key employees and other
additional professionals.  There can be no assurance that we will be successful in doing so and our failure to do so could have a
material adverse effect on the Company.

Our future success will also depend upon the service of other key sales, marketing and support personnel, individuals that we
have not as of yet hired.

Our relationships with the directors, officers and other key employees identified above may be characterized as "at will."

We do not have "key person" life insurance policies covering any of our employees.  The death or permanent disability of a key
employee could have a material adverse effect on the Company.

**Executive officers and directors have substantial control over the company.**

Executive officers, directors and entities affiliated with them, if acting together, would be able to significantly influence all
matters requiring approval by our stockholders, including the election of directors and the approval of mergers or other business
combination transactions.  These stockholders, in the aggregate, beneficially own a majority of our outstanding common stock.

**Risks Related To the e-commence Industry**

**If we are unable to acquire the necessary web domain names, our brand and reputation could be damaged and our
business may be adversely affected.**

We may be unable to acquire or maintain Web domain names relating to our brand in the United States and other countries in
which we may conduct business.  As a result, we may be unable to prevent third parties from acquiring and using domain names
relating to our brand.  Such use could damage our brand and reputation and take customers away from our website.  We
currently hold various relevant domain names, including the "Kidstoysplus.com" domain name.  Governmental agencies and
their designees generally regulate the acquisition and maintenance of domain names.  The regulation of domain names in the
United States and in foreign countries is subject to change in the future.  Governing bodies may also establish additional
top-level domains, appoint additional domain name registrars or modify the requirements for holding domain names.

**We may need to change the manner in which we intend to conduct our business if government regulation increases,
which may increase our costs of doing business and adversely affect our ability to earn a profit.**

The adoption or modification of laws or regulations relating to the Internet could adversely affect the manner in which we
currently conduct our business. In addition, the growth and development of the market for online commerce may lead to more
stringent consumer protection laws, both in the United States and abroad, that may impose additional burdens on us.  Laws and
regulations directly applicable to communications or commerce over the Internet are becoming more prevalent.  The United
States recently enacted Internet laws regarding children's privacy, copyrights, taxation and the transmission of sexually explicit
material.  The European Union recently enacted privacy regulations.  The law of the Internet, however, remains largely
unsettled, even in areas where there has been some legislative action.  It may take years to determine whether and how existing
laws such as those governing intellectual property, privacy, libel and taxation apply to the Internet.  In order to comply with new
or existing laws regulating online commerce, we may need to modify the manner in which we do business, which may result in
additional expenses.  We may need to spend time and money revising the process by which we fulfill customers' orders to
ensure that each shipment complies with applicable laws.  We may need to hire additional personnel to monitor our compliance
with applicable laws.

We may be subject to liability for the Internet content that we publish, which could adversely affect our business.

As a publisher of online content, we face potential liability for defamation, negligence, copyright, patent or trademark
infringement, or other claims based on the nature and content of materials that we publish or distribute. If we face liability, then
our reputation and our business may suffer.  In the past, plaintiffs have brought these types of claims and sometimes
successfully litigated them against online services.  Although we carry general liability insurance, our insurance currently does
not cover claims of these types.  However, this insurance is available, and we intend to obtain this insurance in the near future.
There can be no assurance that we will be able to obtain such insurance or that it will be adequate to indemnify us for all liability
that may be imposed on us.

**Our net sales could decrease if we become subject to sales and other taxes.**

If one or more states or any foreign country successfully asserts that we should collect sales or other taxes on the sale of our
products, our net sales and results of operations could be harmed.  We do not currently intend to collect sales or other similar
taxes for physical shipments of goods. However, one or more local, state or foreign jurisdictions may seek to impose sales tax
collection obligations on us.  In addition, any new operation in states outside Washington State could subject our shipments in
such states to state sales taxes under current or future laws.  If we become obligated to collect sales taxes, we will need to update
our system that processes customers' orders to calculate the appropriate sales tax for each customer order and to remit the
collected sales taxes to the appropriate authorities. These upgrades will increase our operating expenses.  In addition, our
customers may be discouraged from purchasing products from us because they have to pay sales tax, causing our net sales to
decrease.  As a result, we may need to lower prices to retain these customers.

**Item 2.  Description of Property.**

Our principal office, customer service and retail facility is located at 2924 Cliffe Avenue, Courtenay, B.C., effective September
1, 1999, and is approximately 3,200 square feet, which was originally leased for a term of one year and then on a month to
month basis at a rental rate of approximately $680.00 per month.

We have terminated the lease agreement for our distribution and warehouse facility at 4767 Headquarters Road, Courtenay,
B.C., V9N 7J3, effective August 2000.  The company lease additional distribution and warehouse facilities on a month-to-month
basis from our current landlord directly behind the company's administrative and retail facility.  We lease an additional 1,500
square feet for $ 425.00 per month.

**Item 3.  Legal Proceedings**

None.

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

None.  No matters were submitted during the fourth quarter of the fiscal year covered by this report to a vote of security holders.

**PART II**

**Item 5.  Market for Common Equity and Related Stockholder Matters**

Our common stock trades on the OTCBB under the symbol "KTYP".  The OTCBB constitutes a limited and sporadic trading
market and does not constitute an "established trading market." See "Risk Factors - An established public trading market for our
securities does not exist.  The range of high and low bid prices per share for our common stock for each fiscal quarter during the
period from January 21, 2000, the first day our common stock was quoted on the OTCBB, through January 31, 2001, as
published by the OTCBB is set forth below.  The quotations merely reflect the prices at which transactions were proposed, and
do not necessarily represent actual transactions.

**Quarterly Common Stock Price Ranges**

|**Quarter Ended** | **2001**
|----------------- | --------

|           | **High** | **Low**
|---------- | -------- | -------
|April 30   | $1.718   | $0.500 
|July 31    | $0.810   | $0.187 
|October 31 | $0.400   | $0.125 
|January 31 | $0.230   | $0.031 

There were 13 record holders of our common stock as of January 31, 2001.

We have not paid dividends on our common stock since our inception. Dividends on common stock are within the discretion of
the Board of Directors and are payable from profits or capital legally available for that purpose. It is our current policy to retain
any future earnings to finance the operations and growth of our business.  Accordingly, we do not anticipate paying any
dividends on common stock in the foreseeable future.

**Recent Sales of Unregistered Securities**

During the fiscal year ended on January 31, 2001, we completed one private placement.

On April 14, 2000, the Company issued 590,400 units at $1.25 per unit under Rule 506 of Regulation D and under Regulation S.
In this private placement round, each "unit" offered consists of one share of common stock and one non-transferable warrant
exercisable at a price of $1.625 to acquire one additional share of common stock for a period extending one year from the date
of issuance.  This private placement closed (approximately $738,000 representing 590,400 units) was a portion of the original $
2.5 million funding that the company was anticipating raising.  The participants of this private placement were seven (7)
non-U.S. persons outside the United States.

We use the proceeds from the offering to purchase product inventory, to hire staff for operations to begin and for general
working capital purposes.  This financing provided us with sufficient working capital to finance our on-going capital
requirements through to January of 2001.  We did not successfully complete the final portion of the private placement in a
timely manner.

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

**General Overview**

We were organized and incorporated under the laws of the State of Nevada on February 4, 1999.  We commenced full
operations of our core business towards the end of 2000.  We originally organized the company to operate a retail website on the
Internet specializing in marketing children's products that would initially include children's toys, collectable toy items and
hobby related products.  During 2000 we diversified into storefront retailing.  On November 12th we opened a 2000 square feet
retail location within the same leased premises housing our administrative and customer service operations. Both the company
website and retail storefront carry the same product.  We now carry and inventory more than 1700 individual items.  Also during
2000 we established additional Internet retail outlets.  We have two shops, one on Amazon.zshops and a site on Yahoo
shopping.  On both Internet portals we have been rated as a five star customer service vendor.  In 2001 we plan to expand the
product lines we offer on the Internet, expand our number of retail storefront locations and the number of online retail locations
on high-traffic Internet portals.  In the future, we may offer books, music, story line CD's, audio-tapes, movies, video games and
educational products on our website.  We believe that by combining expertise in children's products, Internet website
development and marketing and a commitment to excellent customer service through Internet and brick and mortar retailing we
will be able to deliver a unique shopping experience to consumers.

The following discussion and analysis explains our results of operations for our past fiscal year ending January 31, 2001, our
financial condition, and our plan of operation for the next twelve months.  You should review our discussion and analysis of
financial condition and our plan of operation in conjunction with our financial statements and the related notes.

**Results of Operations**

The Period from January 31, 2000 to January 31, 2001:

We were incorporated on February 4, 1999 and had no results of operations prior to that date.

Revenues.  During the period January 31, 2000 to January 31, 2001, we generate revenues of $ 48,953 from our operations.  We
had interest income in the amount of $11,212.  We anticipate that we will generate significant revenues from our operations
through 2001.

Expenses.  We incurred expenses of $572,902 during the fiscal year ended January 31, 2001, which were related primarily to
organizing our corporation for operations to begin, purchasing opening inventories, hiring key personnel, raising financing,
filing a registration statement with the Securities and Exchange Commission, developing our website, consulting fees, and
establishing our warehouse and service center in Courtenay, British Columbia, Canada.  Since our January 31, 2000 to January
31, 2001, we paid or accrued consulting fees in the amount of $203,010, which primarily consisted of fees paid to various
in-house website programmers; third party software contractors hired; accounts payable to Brian C. Doutaz, our former director
and secretary and treasurer for 1999 of $18,000; Albert R. Timcke, our President; Axel Miedbrodt, our operations manager; and
Pat Morris, past marketing consultant. We paid legal and accounting fees of $52,783 since our January 31, 2000 to January 31,
2001, which expenses related to the preparation of our filings with the Securities and Exchange Commission, preparation of
agreements, documents and statements for our financing activities and other legal and accounting matters.  We incurred investor
relation's expenses of $88,528.  We incurred other expenses related to developing our website and establishing our warehouse
and service facilities in Courtenay, including office and miscellaneous expenses of $192,060, rent expenses of $20,365,
entertainment and promotional expenses of $7,632, web design and maintenance expenses of $16,732, telephone expenses of
$17,268, travel and automobile expenses of $31,327, office and administration expenses of $91,232 which includes several
contract office employees (ie: a customer service manager and a retail store manager), equipment rental of $2,347 and transfer
agent and filing fees expenses of $5,157.

Several of the expenses related to establishing our warehouse, service and retail facilities, opening inventory expenses,
beginning operational expenses will be non-reoccurring expenses.  We anticipate, however, that our operating and
administrative expenses will marginally increase as revenues increase throughout our next fiscal year 2001 as our business
grows.

Net Loss.  We had a loss of $551,452 for the fiscal year ended January 31, 2001.  We expect net losses to decrease during 2001,
as we are able to generate sufficient revenue from our operations from the beginning of our new fiscal year 2001.

**Plan of Operation**

Subsequent to our fiscal year end of January 31, 2001, we experienced delays in the closing of our private placement financing,
official opening of our website and opening of our first retail location.  The delay in our inability to close our private placement
resulted in a delay in acquiring inventory for the launch of our website.  We entered into arrangements to add additional online
stores via Amazon.zshops and Yahoo shopping.    Our ability to continue to run our current Internet website and retail
operations as a going concern will depend on our ability to obtain future financing in 2001.

We anticipate our sales to increase continually through 2001.  We anticipate our operating activities during the next year will
focus primarily on our efforts to:

a)   secure additional financing general working capital purposes,

b)   to increase  products offer to our customers through both the website and the retail store;

c)   expand our online retail presence by establishing additional online retail outlets to Amazon.zshops and Yahoo shopping on
major Internet portals such as AOL and MSN;

d)   continue to expand our brick and mortar retail storefronts on Vancouver Island, British Columbia, Canada;

e)   continue development of our computer infrastructure and systems related to our website;

f)   enhance our inventory management system;

g)   continue testing our internal operating, distribution and customer service systems and;

h)   hiring and training our customer service and distribution personnel.

Capital Requirements

We anticipate that the following expenditures are required to continually grow our business and to meet our financial obligations
during our fiscal year ending January 31, 2001:

| |                         
| | ------------------------
| | **Fiscal Quarter Ended**

|**DESCRIPTION**                       | **April 30, 2001** | **July  31, 2001** | **October31, 2001** | **January31, 2002**
|------------------------------------- | ------------------ | ------------------ | ------------------- | -------------------
|Accounting and legal
expenses.        | $10,000            | $10,000            | $10,000             | $10,000            
|Office and
administration             | $20,000            | $30,000            | $40,000             | $40,000            
|Website design and
posting            | $10,000            | $20,000            | $20,000             | $10,000            
|Web maintenance and
software upgrades | $3,000             | $5,000             | $10,000             | $10,000            
|Warehouse and office
facilities       | $5,000             | $5,000             | $10,000             | $10,000            
|Company marketing
expense             |                    | $50,000            | $50,000             | $20,000            
|Selective increase
product inventory  | $10,000            | $30,000            | $30,000             | $20,000            
|Working capital                       | $10,000            | $30,000            | $30,000             | $20,000            
|**Totals**                            | **$68,000**        | **$170,000**       | **$190,000**        | **$140,000**       

**Liquidity and Capital Resources**

As of January 31, 2001, we had working capital of $87,247.  We had cash or cash equivalents of $24,451 and prepaid expenses
and deposits in the amount of $3,953.  We had accounts payable and accrued liabilities in the amount of $27,218.

As of April 14, 2000, we raised approximately $738,000 pursuant to a private placement of units.  See "Subsequent Events."

**Subsequent Events**

The following transactions occurred subsequent to January 31, 2001:

a)  We are intending to enter into a transaction between us, our president and majority shareholder, Albert R. Timcke, and FYI
Corporation, a Utah corporation, whereby all of our assets and operations would be sold to Mr. Timcke, in exchange for
$100,000 U.S. in cash or marketable securities, which consideration would then be transferred to FYI Corporation, in exchange
for a consulting agreement that would obligate FYI Corporation to actively seek a merger candidate for us.  This would
effectively make us a "shell" corporation, with no assets or revenues, unless and until a reverse merger was finalized.  This
transaction would be contingent upon the affirmative approval by our minority shareholders, at a special shareholders' meeting
that we intend to hold in late May or early June, 2001.  A Preliminary Proxy, more fully detailing the intended transaction, has
been filed with the SEC, and we expect to deliver the Final Proxy shortly after the filing of this 10-KSB.

**Inflation**

Our results of operations have not been affected by inflation and management does not expect inflation to have a significant
effect on our operations in the future.

**Outlook**

**Financings 1999 - 2000**

Our business activities and operations have been funded to date through issuance of shares of our common stock in the
following transactions:

|Summary of Financing Transactions Undertaken During the Fiscal Year
|-------------------------------------------------------------------

|                                                            | **Number of Shares** | **Total Price Of Shares ($)**
|----------------------------------------------------------- | -------------------- | -----------------------------
|April 06, 1999 -------  Regulation D
Offering               | 5,600,000            | 5,600                        
|April 06, 1999 -------  Regulation D
Offering               | 3,960,000            | 39,600                       
|April 07, 1999 --- ---- Regulation D
Offering               | 408,084              | 204,042                      
|April 07, 2000 -------  Regulation D & S
Offering           | 590,400              | 738,000                      
|August 04, 2000 -------------Options
Exercised -  504 Reg D | 400,000              | 40,000                       
|September 21, 2000 --------- Options
Exercised -  504 Reg D | 22,400               | 5,600                        
|October 01, 2000-- Services Rendered -
Reg 144              | 150,000              | 21,000                       
|                                                            | **11,130,884**       | **1,053,842**                

**Financing Required for the Next 12 Months**

As of January 31, 2001, we anticipate that our working capital is sufficient to satisfy our cash requirements through
approximately June 2001 providing current cash flow from sales equal to or greater then February and March 2001 occur.  We
anticipate we will be required to raise addition financing of at least $250,000 to $500,000 prior to the end of our third fiscal
quarter ending October 31, 2001, in order to continue as a going concern.  We anticipate that we will be adequately financed
upon raising an additional $250,000 to $500,000 to meet our anticipated cash requirements related to continued expansion of our
current business operations of selling merchandise, including acquiring additional inventory, marketing expenses, hiring
additional personnel and refining our website and distribution center technologies and to finance our operations and anticipated
marketing activities.  We are in the process of looking for additional capital.

There can be no assurance that we will be able to obtain additional financing in a timely manner or on acceptable terms, if at all.
If we are unable to obtain financing necessary in continue growth of current operations, we intend to decrease our monthly
overhead expenses until we can maintain operations on current cash flow projections.  There is a substantial risk that such a
strategy will adversely affect our ability to build value in our "Kidstoysplus" brand name, which may have an adverse affect on
our business and our ability to compete effectively.

**Quantitative and Qualitative Disclosures About Market Risks**

Our financial results are quantified in U.S.  dollars and a majority of our obligations and expenditures with respect to our
operations are incurred in U.S.  dollars.  Although we do not believe we currently have any materially significant market risks
relating to our operations resulting from foreign exchange rates, if we enter into financing or other business arrangements
denominated in currency other than the U.S.  dollar or the Canadian dollar, variations in the exchange rate may give rise to
foreign exchange gains or losses that may be significant.

We currently have no material long-term debt obligations.  We do not use financial instruments for trading purposes and we are
not a party to any leverage derivatives.  In the event we experience substantial growth in the future, our business and results of
operations may be materially affected by changes in interest rates and certain other credit risk associated with its operations.

**Acquisition of Plant and Equipment**

We do not own any plant facilities or equipment.  Our premises are rented. It is our intention to acquire our own servers and
computers prior to the end of 2001 if current growth projections materialize.

**Item 7.  Financial Statements**

Reference is made to the financial statements, the reports thereon, the notes thereto, and supplementary data commencing at
page F-1 of this Form 10-KSB, which financial statements, reports, notes, and data are incorporated herein by reference.

**Item 8.  Changes In and Disagreements With Accountants on Accounting and Financial Disclosure.**

Not Applicable.

**PART III**

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

The information set forth under the caption "Election of Directors", "Executive Officers", and "Section 16(a) Beneficial
Ownership Reporting Compliance" in Kidstoysplus.com, Inc.'s Preliminary Proxy Statement for a Special Meeting of
Shareholders, filed with the Securities and Exchange Commission on Schedule 14A on April 11, 2001, is incorporated herein by
reference.

**Item 10.  Executive Compensation**

The information set forth under the captions "Executive Compensation and Other Information" and "Compensation of
Directors" in the Preliminary Proxy Statement for a Special Meeting of Shareholders, filed with the Securities and Exchange
Commission on Schedule 14A on April 11, 2001, is incorporated herein by reference.

**Item 11.  Security Ownership of Certain Beneficial Owners and Management**

The information set forth under the captions "Securities Ownership of Certain Beneficial Owners" and "Securities Ownership of
Management" in the Preliminary Proxy Statement for a Special Meeting of Shareholders, filed with the Securities and Exchange
Commission on Schedule 14A on April 11, 2001, is incorporated herein by reference.

**Item 12.  Certain Relationships and Related Transactions**

The information set forth under the caption "Certain Relationships and Related Transactions between Management and the
Company" in the Preliminary Proxy Statement for a Special Meeting of Shareholders, filed with the Securities and Exchange
Commission on Schedule 14A on April 11, 2001, is incorporated herein by reference.

**Item 13.  Exhibits and Reports on Form 8-K**

(a)   Exhibits

No other exhibits were filed on Form 8-K.

**SIGNATURES**

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.

Date: May 11, 2000

| | /s/ Albert R. Timcke       
| | ---------------------------
| | Albert R. Timcke, President

In accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the registrant and
in the capacities and on the dates indicated.

|**Signature**                                               | **Title**                                            | **Date**    
|----------------------------------------------------------- | ---------------------------------------------------- | ------------
|/s/ Albert R. Timcke                       Albert
R. Timcke | President and Director (Principal
Executive Officer) | May 11, 2000
|/s/ Timothy J. Anderson              Timothy
J.  Anderson   | Director                                             | May 11, 2000

**KIDSTOYSPLUS.COM, INC.**

(A Development Stage Company)
FINANCIAL STATEMENTS

(Expressed in United States Dollars)
JANUARY 31, 2001

**INDEPENDENT AUDITORS' REPORT**

To the Stockholders and Directors of

Kidstoysplus.com, Inc.

(A Development Stage Company)

We have audited the accompanying balance sheets of Kidstoysplus.com, Inc. as at January 31, 2001 and 2000 and the related
statements of operations, stockholders' equity and cash flows for the year ended January 31, 2001, the period from incorporation
on February 4, 1999 to January 31, 2000 and the period from incorporation on February 4, 1999 to January 31, 2001.  These
financial statements, expressed in United States dollars, are the responsibility of the Company's management.  Our responsibility
is to express an opinion on these financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of
Kidstoysplus.com, Inc. as at January 31, 2001 and 2000 and the results of its operations and its cash flows for the year ended
January 31, 2001, the period from incorporation on February 4, 1999 to January 31, 2000 and the period from incorporation on
February 4, 1999 to January 31, 2001 in conformity with generally accepted accounting principles in the United States of
America.

The accompanying financial statements have been prepared assuming that Kidstoysplus.com, Inc. will continue as a going
concern.  As discussed in Note 2 to the financial statements, unless the Company attains future profitable operations and/or
obtains additional financing, there is substantial doubt about the Company's ability to continue as a going concern.
Management's plans in regards to these matters are discussed in Note 2.  The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
/s/ Davidson & Company

|Vancouver, Canada | Chartered Accountants
|----------------- | ---------------------
|                  |                      
|April 13, 2001    |                      

**KIDSTOYSPLUS.COM, INC.**

(A Development Stage Company)

BALANCE SHEETS

(Expressed in United States Dollars)

AS AT JANUARY 31

|                                         | 2001      | 2000    
|---------------------------------------- | --------- | --------
|                                         |           |         
|                                         |           |         
|                                         |           |         
|ASSETS                                   |           |         
|                                         |           |         
|**Current**                              |           |         
|Cash                                     | $ 24,451  | $ 11,372
|Receivables                              | 13,572    | -       
|Inventory                                | 72,489    | -       
|Prepaid expenses and deposits            | 3,953     | 8,017   
|Due from related parties (Note 5)        | 47,850    | -       
|                                         |           |         
|Total current assets                     | 162,315   | 19,389  
|                                         |           |         
|**Capital assets** (Note 6)              | 23,044    | 10,323  
|                                         |           |         
|Total assets                             | $ 185,359 | $ 29,712
|                                         |           |         
|                                         |           |         
|                                         |           |         
|LIABILITIES AND STOCKHOLDERS'
EQUITY     |           |         
|                                         |           |         
|**Current**                              |           |         
|Accounts payable and accrued liabilities | $ 27,218  | $ 56,419
|                                         |           |         
|Total current liabilities                | 27,218    | 56,419  
|                                         |           |         
|**Stockholders' equity**                 |           |         
|Common stock (Note 7)                    |           |         
|Authorized                               |           |         

|25,000,000 | common shares with a par
value of $0.001 |  | 
|---------- | ---------------------------------------- |  | 

|Issued and outstanding |  | 
|---------------------- |  | 

|11,130,884 | common shares (2000 -
9,968,084 common
shares) | 11,130 | 9,968
|---------- | ---------------------------------------------- | ------ | -----

|Additional paid-in capital                        | 968,912   | 239,274  
|------------------------------------------------- | --------- | ---------
|Stock subscriptions receivable                    | -         | (5,500)  
|Deficit, accumulated during the
development stage | (821,901) | (270,449)
|                                                  |           |          
|Total stockholders' equity                        | 158,141   | (26,707) 
|                                                  |           |          
|Total liabilities and stockholders' equity        | $ 185,359 | $ 29,712 

**History and organization of the Company**(Note 1)

**Commitments** (Note 11)

**Subsequent events**(Note 13)
The accompanying notes are an integral part of these financial statements.

**KIDSTOYSPLUS.COM, INC.**

(A Development Stage Company)

STATEMENTS OF OPERATIONS

(Expressed in United States Dollars)

|                                                                  | Cumulative From
Incorporation on February 4,
1999 to January 31, | Year Ended January 31, | Period From Incorporation on
February 4, 1999 to January
31,
|----------------------------------------------------------------- | ---------------------------------------------------------------- | ---------------------- | ------------------------------------------------------------
|                                                                  | 2001                                                             | 2001                   | 2000                                                        
|                                                                  |                                                                  |                        |                                                             
|                                                                  |                                                                  |                        |                                                             
|                                                                  |                                                                  |                        |                                                             
|SALES                                                             | $ 48,953                                                         | $ 48,953               | $          -                                                
|                                                                  |                                                                  |                        |                                                             
|**COST OF SALES**                                                 | 38,715                                                           | 38,715                 | -                                                           
|                                                                  |                                                                  |                        |                                                             
|**GROSS MARGIN**                                                  | 10,238                                                           | 10,238                 | -                                                           
|                                                                  |                                                                  |                        |                                                             
|**EXPENSES**                                                      |                                                                  |                        |                                                             
|Consulting fees                                                   | 319,863                                                          | 203,010                | 116,853                                                     
|Depreciation                                                      | 8,753                                                            | 7,925                  | 828                                                         
|Entertainment and promotion                                       | 13,866                                                           | 7,632                  | 6,234                                                       
|Equipment rental                                                  | 5,360                                                            | 2,347                  | 3,013                                                       
|Investor relations                                                | 91,228                                                           | 88,548                 | 2,680                                                       
|Legal and accounting                                              | 97,439                                                           | 52,783                 | 44,656                                                      
|Management fees                                                   | 2,800                                                            | -                      | 2,800                                                       
|Marketing and advertising                                         | 28,576                                                           | 28,576                 | -                                                           
|Office and administration                                         | 119,870                                                          | 91,232                 | 28,638                                                      
|Rent                                                              | 29,623                                                           | 20,365                 | 9,258                                                       
|Telephone and utilities                                           | 26,569                                                           | 17,268                 | 9,301                                                       
|Transfer agent and filing fees                                    | 10,865                                                           | 5,157                  | 5,708                                                       
|Travel and automobile                                             | 46,169                                                           | 31,327                 | 14,842                                                      
|Website design and
maintenance                                    | 46,759                                                           | 16,732                 | 30,027                                                      
|                                                                  |                                                                  |                        |                                                             
|                                                                  | (847,740)                                                        | (572,902)              | (274,838)                                                   
|                                                                  |                                                                  |                        |                                                             
|**Loss before other item**                                        | (837,502)                                                        | (562,664)              | (274,838)                                                   
|                                                                  |                                                                  |                        |                                                             
|**OTHER ITEM**                                                    |                                                                  |                        |                                                             
|Interest income                                                   | 15,601                                                           | 11,212                 | 4,389                                                       
|                                                                  |                                                                  |                        |                                                             
|**Loss for the period**                                           | $ (821,901)                                                      | $ (551,452)            | $ (270,449)                                                 
|                                                                  |                                                                  |                        |                                                             
|**Basic and diluted loss per
share**                              |                                                                  | $ (0.05)               | $ (0.03)                                                    
|                                                                  |                                                                  |                        |                                                             
|**Weighted average number of
shares of common stock
outstanding** |                                                                  | 10,692,910             | 8,259,140                                                   

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

**KIDSTOYSPLUS.COM, INC.**

(A Development Stage Company)

STATEMENT OF STOCKHOLDERS' EQUITY

(Expressed in United States Dollars)

| | Common Stock Issued | Additional | Stock | Deficit,
Accumulated
During the | 
| | ------------------- | ---------- | ----- | ------------------------------- | 

|                                                |            |            | Paid-in      | Subscriptions | Development |            
|----------------------------------------------- | ---------- | ---------- | ------------ | ------------- | ----------- | -----------
|                                                | Number     | Amount     | Capital      | Receivable    | Stage       | Total      
|                                                |            |            |              |               |             |            
|**Balance,
February 4,**                        |            |            |              |               |             |            
|1999                                            | -          | $        - | $          - | $         -   | $         - | $         -
|                                                |            |            |              |               |             |            
|Shares issued for
cash                          |            |            |              |               |             |            
|at $0.001 per
share                             | 100,000    | 100        | -            | -             | -           | 100        
|                                                |            |            |              |               |             |            
|Shares
subscribed for
cash at $0.001
per        |            |            |              |               |             |            
|share                                           | 5,500,000  | 5,500      | -            | (5,500)       | -           | -          
|                                                |            |            |              |               |             |            
|Shares issued for
cash                          |            |            |              |               |             |            
|at $0.01 per
share                              | 3,960,000  | 3,960      | 35,640       | -             | -           | 39,600     
|                                                |            |            |              |               |             |            
|Shares issued for
cash                          |            |            |              |               |             |            
|at $0.50 per
share                              | 408,084    | 408        | 203,634      | -             | -           | 204,042    
|                                                |            |            |              |               |             |            
|Loss for the
period                             | -          | -          | -            | -             | (270,449)   | (270,449)  
|                                                |            |            |              |               |             |            
|Balance, January
31,                            |            |            |              |               |             |            
|2000                                            | 9,968,084  | 9,968      | 239,274      | (5,500)       | (270,449)   | (26,707)   
|                                                |            |            |              |               |             |            
|Shares issued for
cash                          |            |            |              |               |             |            
|at $1.25 per
share                              | 590,400    | 590        | 737,410      | -             | -           | 738,000    
|                                                |            |            |              |               |             |            
|Share issuance
costs                            | -          | -          | (73,800)     | -             | -           | (73,800)   
|                                                |            |            |              |               |             |            
|Stock
subscriptions                             |            |            |              |               |             |            
|received                                        | -          | -          | -            | 5,500         | -           | 5,500      
|                                                |            |            |              |               |             |            
|Shares issued for
cash                          |            |            |              |               |             |            
|at $0.10 per
share on exercise
of stock options | 400,000    | 400        | 39,600       | -             | -           | 40,000     
|                                                |            |            |              |               |             |            
|Shares issued for
cash                          |            |            |              |               |             |            
|at $0.25 per
share on exercise
of stock options | 22,400     | 22         | 5,578        | -             | -           | 5,600      
|                                                |            |            |              |               |             |            
|Shares issued for
services

at $0.14 per
share  | 150,000    | 150        | 20,850       | -             | -           | 21,000     
|                                                |            |            |              |               |             |            
|Loss for the year                               | -          | -          | -            | -             | (551,452)   | (551,452)  
|                                                |            |            |              |               |             |            
|Balance, January
31,                            |            |            |              |               |             |            
|2001                                            | 11,130,884 | $ 11,130   | $ 968,912    | $         -   | $ (821,901) | $ 158,141  

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

**KIDSTOYSPLUS.COM, INC.**

(A Development Stage Company)

STATEMENTS OF CASH FLOWS

(Expressed in United States Dollars)

|                                                                | Cumulative From
Incorporation on February 4,
1999 to January 31, 2001 | Year Ended January 31, 2001 | Period From Incorporation on
February 4, 1999 to January
31, 2000
|--------------------------------------------------------------- | --------------------------------------------------------------------- | --------------------------- | -----------------------------------------------------------------
|                                                                |                                                                       |                             |                                                                  
|                                                                |                                                                       |                             |                                                                  
|CASH FLOWS FROM
OPERATING ACTIVITIES                            |                                                                       |                             |                                                                  
|Loss for the period                                             | $ (821,901)                                                           | $ (551,452)                 | $ (270,449)                                                      
|Items not affecting cash:                                       |                                                                       |                             |                                                                  
|Depreciation                                                    | 8,753                                                                 | 7,925                       | 828                                                              
|Shares issued for services                                      | 21,000                                                                | 21,000                      | -                                                                
|                                                                |                                                                       |                             |                                                                  
|Changes in other operating
assets and liabilities:              |                                                                       |                             |                                                                  
|Increase in receivables                                         | (13,572)                                                              | (13,572)                    | -                                                                
|Increase in inventory                                           | (72,489)                                                              | (72,489)                    | -                                                                
|(Increase) decrease in prepaid
expenses and deposits            | (3,953)                                                               | 4,064                       | (8,017)                                                          
|Increase in due from related
parties                            | (47,850)                                                              | (47,850)                    | -                                                                
|Increase (decrease) in accounts
payable and accrued liabilities | 27,218                                                                | (29,201)                    | 56,419                                                           
|                                                                |                                                                       |                             |                                                                  
|Net cash used in operating
activities                           | (902,794)                                                             | (681,575)                   | (221,219)                                                        
|                                                                |                                                                       |                             |                                                                  
|**CASH FLOWS FROM
INVESTING ACTIVITIES**                        |                                                                       |                             |                                                                  
|Capital assets acquired                                         | (31,797)                                                              | (20,646)                    | (11,151)                                                         
|                                                                |                                                                       |                             |                                                                  
|Net cash used in investing
activities                           | (31,797)                                                              | (20,646)                    | (11,151)                                                         
|                                                                |                                                                       |                             |                                                                  
|**CASH FLOWS FROM
FINANCING ACTIVITIES**                        |                                                                       |                             |                                                                  
|Common stock issued for cash                                    | 1,027,342                                                             | 783,600                     | 243,742                                                          
|Share issuance costs                                            | (73,800)                                                              | (73,800)                    | -                                                                
|Stock subscriptions received                                    | 5,500                                                                 | 5,500                       | -                                                                
|                                                                |                                                                       |                             |                                                                  
|Net cash provided by
financing activities                       | 959,042                                                               | 715,300                     | 243,742                                                          
|                                                                |                                                                       |                             |                                                                  
|Increase in cash for the period                                 | 24,451                                                                | 13,079                      | 11,372                                                           
|                                                                |                                                                       |                             |                                                                  
|Cash, beginning of period                                       | -                                                                     | 11,372                      | -                                                                
|                                                                |                                                                       |                             |                                                                  
|**Cash, end of period**                                         | $ 24,451                                                              | $ 24,451                    | $ 11,372                                                         
|                                                                |                                                                       |                             |                                                                  
|**Cash paid during the period
for interest**                    | $        -                                                            | $        -                  | $        -                                                       
|                                                                |                                                                       |                             |                                                                  
|**Cash paid during the period
for income taxes**                | $        -                                                            | $        -                  | $        -                                                       

**Supplemental disclosure for non-cash financing and investing activities**(Note 10)

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

**KIDSTOYSPLUS.COM, INC.**

(A Development Stage Company)

NOTES TO THE FINANCIAL STATEMENTS

(Expressed in United States Dollars)

JANUARY 31, 2001

**1.  HISTORY AND ORGANIZATION OF THE COMPANY**

The Company was incorporated on February 4, 1999 under the laws of the state of Nevada, and is considered a development
stage company, in accordance with SFAS #7.

The Company operates a retail website on the internet specializing in children's toys and entertainment products.

**2.   GOING CONCERN**

The Company's financial statements are prepared using the generally accepted accounting principles applicable to a going
concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. Without
realization of additional capital, it would be unlikely for the Company to continue as a going concern.  It is management's plan
to sell the assets of the Company and reduce the Company's liabilities to $Nil in order to position the Company to pursue new
business opportunities and to seek additional capital through private placements.

|                                                 | 2001        | 2000       
|------------------------------------------------ | ----------- | -----------
|                                                 |             |            
|Deficit accumulated during the
development stage | $ (821,901) | $ (270,449)
|Working capital (deficiency)                     | 135,097     | (37,030)   

**3.   SIGNIFICANT ACCOUNTING POLICIES**

**Revenue recognition**

Revenues from products and services are recognized at the time the goods are shipped or services provided to the customer, with
an appropriate provision for returns and allowances.

**Stock-based compensation**

Statement of Financial Accounting Standards No. 123, "Accounting for Stock-Based Compensation", encourages, but does not
require, companies to record compensation cost for stock-based employee compensation plans at fair value.  The Company has
chosen to account for stock-based compensation using Accounting Principles Board Opinion No. 25, "Accounting for Stock
Issued to Employees".  Accordingly, compensation cost for stock options is measured as the excess, if any, of the quoted market
price of the Company's stock at the date of the grant over the amount an employee is required to pay for the stock.

**Capital assets**

Capital assets are recorded at cost.  Depreciation is provided over the estimated useful life using the following rates:

|Computer equipment     | 3 years straight-line | 
|---------------------- | --------------------- | 
|Furniture and fixtures | 5 years straight-line | 

**Inventory**

Inventory is valued at the lower of cost or net realizable value.

**Income taxes**

Income taxes are provided in accordance with Statement of Financial Accounting Standards No. 109, "Accounting for Income
Taxes".  A deferred tax asset or liability is recorded for all temporary differences between financial and tax reporting and net
operating loss carryforwards.  Deferred tax expenses (benefit) results from the net change during the year of deferred tax assets
and liabilities.

Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that
some portion or all of the deferred tax assets will not be realized.  Deferred tax assets and liabilities are adjusted for the effects
of changes in tax laws and rates on the date of enactment.**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.**Disclosure about segments of an enterprise and related information**

Statement of Financial Accounting Standards No. 131 ("SFAS 131"), "Disclosure About Segments of an Enterprise and Related
Information" requires use of the "management approach" model for segment reporting.  The management approach model is
based on the way a company's management organizes segments within the company for making operating decisions and
assessing performance. Reportable segments are based on products and services, geography, legal structure, management
structure, or any other manner in which management disaggregates a company.   Currently, SFAS 131 has no effect on the
Company's financial statements as substantially all of the Company's operations are conducted in one industry segment in
Canada.

**Accounting for derivative instruments and hedging activities**

In June 1998, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards No.
133 ("SFAS 133"),"Accounting for Derivative Instruments and Hedging Activities" which establishes accounting and reporting
standards for derivative instruments and for hedging activities.  SFAS 133 is effective for all fiscal quarters of fiscal years
beginning after June 15, 1999.  In June 1999, FASB issued SFAS 137 to defer the effective date of SFAS No. 133 to fiscal
quarters of fiscal years beginning after June 15, 2000.  In June 2000, the FASB issued Statement of Financial Accounting
Standards No. 138 which is a significant amendment to SFAS 133.  The Company does not anticipate that the adoption of these
statements will have a significant impact on its financial statements.**Foreign currency translation**

The Company accounts for foreign currency transactions under Statement of Financial Accounting Standards No. 52, "Foreign
Currency Translation". Transaction amounts denominated in foreign currencies are translated at exchange rates prevailing at
transaction dates.  Carrying values of monetary assets and liabilities are adjusted at each balance sheet date to reflect the
exchange rate at that date.  Non monetary assets and liabilities are translated at the exchange rate on the original transaction
date.  Gains and losses from restatement of foreign currency monetary and non-monetary assets and liabilities are included in
income.  Revenues and expenses are translated at the rates of exchange prevailing on the dates such items are recognized in
earnings.

**Loss per share**

Statement of Financial Accounting Standards No. 128 ("SFAS 128"), "Earnings Per Share" requires basic and diluted earnings
per share to be presented.  Basic earnings per share is computed by dividing income available to common shareholders by the
weighted average number of shares of common stock outstanding during the period.  Diluted earnings per share takes into
consideration shares of common stock outstanding (computed under basic earnings per share) and potentially dilutive shares of
common stock.

**4.   FINANCIAL INSTRUMENTS**

The Company's financial instruments consist of cash, receivables, due from related parties and accounts payable and accrued
liabilities.  Unless otherwise noted, it is management's opinion that the Company is not exposed to significant interest, currency
or credit risks arising from these financial instruments.  The fair value of these financial instruments approximate their carrying
values, unless otherwise noted.

**5.   DUE FROM RELATED PARTIES**

|                                                                                                    | 2000     | 1999       
|--------------------------------------------------------------------------------------------------- | -------- | -----------
|                                                                                                    |          |            
|Due from directors of the Company, unsecured,
non-interest bearing with no fixed terms of repayment | $ 47,850 | $         -

The fair value of amounts due from related parties are not determinable as they have no specific repayment terms.

**6.   CAPITAL ASSETS**

| |  | Accumulated | Net Book Value
| |  | ----------- | --------------

|                       | Cost    | Depreciation | 2001    | 2000   
|---------------------- | ------- | ------------ | ------- | -------
|                       |         |              |         |        
|Computer equipment     | $11,298 | $2,523       | $8,775  | $4,058 
|Furniture and fixtures | 20,499  | 6,230        | 14,269  | 6,265  
|                       |         |              |         |        
|                       | $31,797 | $8,753       | $23,044 | $10,323

**7.   COMMON STOCK**

On April 6, 1999, the Company issued 5,600,000 and 3,960,000 shares of common stock under Rule 504 of Regulation D of the
Securities Act of 1933 for total proceeds of $5,600 and $39,600, respectively.

On April 7, 1999, the Company issued 408,084 shares of common stock under Rule 504 of Regulation D of the Securities Act of
1933 for total proceeds of $204,042.

On April 7, 2000, the Company completed a private placement whereby it issued 590,400 units under Rule 506 of Regulation D
of the Securities Act of 1933 at $1.25 per unit for total proceeds of $738,000.  Each unit consists of one restricted share of
common stock and one non-transferable share purchase warrant.  Each warrant entitles the holder to purchase one restricted
share of common stock of the Company at a price of $1.625 per share until April 7, 2001.

On August 4, 2000, the Company issued 400,000 shares of common stock on the exercise of stock options under Rule 504 of
Regulation D of the Securities Act of 1933 for total proceeds of $40,000.

On September 21, 2000, the Company issued 22,400 shares of common stock on the exercise of stock options under Rule 504 of
Regulation D of the Securities Act of 1933 for total proceeds of $5,600.

On November 1, 2000, the Company issued 150,000 Rule 144 restricted shares of common stock at a deemed value of $21,000
for services rendered (Note 11c).

**Common shares**

The common shares of the Company are of the same class, voting and entitle shareholders to dividends.  Upon liquidation,
dissolution or wind-up, shareholders are entitled to the residual business proceeds of the Company after all of its debts,
obligations and liabilities are settled.

**Additional paid-in capital**

The excess of proceeds received for common shares over their par value of $0.001, less share issue costs, is credited to
additional paid in capital.

**Stock options and warrants**

As at January 31, 2001, 590,400 warrants entitling the holders to purchase one share of common stock at a price of $1.625 per
share expiring April 7, 2001 were outstanding.  Subsequent to January 31, 2001, these warrants expired.

The following stock options were outstanding as at January 31, 2001.****

|        |  |        |  |               
|------- |  | ------ |  | --------------
|        |  |        |  |               
|500,000 |  | $0.10  |  | May 15,2005   
|600,000 |  | 0.25   |  | May 15,2005   
|350,000 |  | 1.00   |  | March 15, 2010
|425,000 |  | 0.4375 |  | March 15, 2010
|120,000 |  | 0.21   |  | March 15, 2010

**8.   STOCK-BASED COMPENSATION**

On May 1, 1999, pursuant to Consulting Agreements, the Company granted options to directors and employees to acquire up to
1,000,000 shares of common stock of the Company at an exercise price of $0.10 per share and up to 1,000,000 shares of
common stock of the Company at an exercise price of $0.25 per share.

The Company has also approved a Stock Option Plan for officers, employees and consultants of the Company.  The Company
has reserved 1,500,000 common shares of its unissued share capital for this plan.  As of January 31, 2001, 895,000 options have
been granted under the plan.  The plan provides for vesting of options granted pro-rata over four years from the date of grant.

The exercise price of options granted under the plan will be as follows:

i)  not less than the fair market value per common share at the date of grant.

ii)   not less than 110% of the fair market value per common share at the date of grant for options granted to shareholders
owning greater than 10% of the Company.
Options granted under the plan will expire the earlier of:

i)   ten years from the date of grant or March 15, 2010, whichever is earlier.

ii)   five years from the date of grant for options granted to shareholders owning greater than 10% of the Company.

iii)  the termination of the officer, employee or consultants upon cause.

iv)  three months after the termination of the officer, employee or consultant other than by cause, death or disability.

v)   one year after the date of termination of the officer, employee or consultant due to death or disability.
Following is a summary of the stock option activity:

|                                                                       | Number of Shares | Weighted Average Exercise Price
|---------------------------------------------------------------------- | ---------------- | -------------------------------
|                                                                       |                  |                                
|Outstanding, February 4, 1999                                          | -                | $   -                          
|Granted                                                                | 2,000,000        | 0.17                           
|                                                                       |                  |                                
|Outstanding, January 31, 2000                                          | 2,000,000        | 0.17                           
|Granted                                                                | 895,000          | 0.62                           
|Exercised                                                              | (422,400)        | 0.11                           
|Cancelled                                                              | (477,600)        | 0.22                           
|                                                                       |                  |                                
|Outstanding, January 31, 2001                                          | 1,995,000        | $0.38                          
|                                                                       |                  |                                
|Weighted average fair value of
options granted during the current
year |                  | $ 0.74                         

Following is a summary of the status of options outstanding at January 31, 2001:

| | Outstanding Options |  | Exercisable Options
| | ------------------- |  | -------------------

|Exercise Price | Number    | Weighted
Average
Remaining
Contractual Life | Weighted
Average Exercise
Price |  | Number    | Weighted
Average
Exercise Price
|-------------- | --------- | ------------------------------------------- | ------------------------------- |  | --------- | -------------------------------
|               |           |                                             |                                 |  |           |                                
|$0.10 to $0.25 | 1,220,000 | 4.8 years                                   | $  0.18                         |  | 1,130,000 | $ 0.18                         
|$0.4375        | 425,000   | 9.2 years                                   | 0.4375                          |  | 87,500    | 0.4375                         
|$1.00          | 350,000   | 9.2 years                                   | 1.00                            |  | 106,250   | 1.00                           

**Compensation**

The Company granted 895,000 options to officers and employees during the current year.  These options are accounted for using
Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees", which follows the intrinsic value
based method for accounting for compensation resulting from the granting of options.  Had compensation expense relating to
the 895,000 options granted to officers and employees been recognized on the basis of fair value pursuant to Statement of
Financial Accounting Standard No. 123, net loss and loss per share would have been adjusted as follows:

|                                 | Cumulative From
Incorporation on February 4,
1999 to January 31, 2001 | Year Ended January 31, 2001 | Period From Incorporation on
February 4, 1999 to January
31, 2000
|-------------------------------- | --------------------------------------------------------------------- | --------------------------- | -----------------------------------------------------------------
|                                 |                                                                       |                             |                                                                  
|Loss for the period              |                                                                       |                             |                                                                  
|As reported                      | $(821,901)                                                            | $(551,452)                  | $(270,449)                                                       
|                                 |                                                                       |                             |                                                                  
|Pro forma                        | $(846,665)                                                            | $(576,216)                  | $(270,449)                                                       
|                                 |                                                                       |                             |                                                                  
|Basic and diluted loss per
share |                                                                       |                             |                                                                  
|As reported                      |                                                                       | $(0.05)                     | $(0.03)                                                          
|                                 |                                                                       |                             |                                                                  
|Pro forma                        |                                                                       | $(0.05)                     | $(0.03)                                                          

The fair value of each option granted is estimated on the grant date using the Black Scholes Option Pricing Model.  The
assumptions used in calculating fair values are as follows:

|                         |  | 2001    | 2000   
|------------------------ |  | ------- | -------
|                         |  |         |        
|Risk-free interest rate  |  | 6.58%   | 7.0%   
|Expected life of options |  | 3 years | 6 years
|Expected volatility      |  | 86.4%   | 0.001% 
|Expected dividend yield  |  | 0.0%    | 0.0%   

**9.   RELATED PARTY TRANSACTIONS**

During the period ended January 31, 2001, the Company entered into the following transactions with related parties:
a)   Paid $Nil (2000 - $2,800) in management fees to the president of the Company.

b)   Paid consulting fees of $83,000 (2000 - $51,600) to the president, $31,552 (2000 - $Nil) to an officer and $Nil (2000 -
$18,000) to a former director of the Company.

c )   Paid office administration fees of $7,887 (2000  - $Nil) to a relative of an officer of the Company.

Included in accounts payable as at January 31, 2001 is $Nil (2000 - $18,000) due to a former director of the Company.

These transactions were in the normal course of operations and were measured at the exchange value which represented the
amount of consideration established and agreed to by the related parties.

**10.   SUPPLEMENTAL DISCLOSURE WITH FOR NON-CASH FINANCING AND INVESTING ACTIVITIES**

The significant non-cash transaction for the year ended January 31, 2001 consisted of the Company issuing 150,000 shares of
common stock in the amount of $21,000 in exchange for services rendered.

The significant non-cash transaction for the period ended January 31, 2000 consisted of the Company issuing 5,500,000 shares
of common stock in the amount of $5,500 in exchange for a stock subscription receivable.**11.   COMMITMENTS**

a)   The Company entered into Consulting Agreements with directors and employees of the Company, effective May 1, 1999,
for terms of five years. The agreements call for consulting fees totalling $9,000 per month to be paid.  Monthly hours worked by
the directors or employees in excess of the base hourly commitments in the agreements will be paid at a rate of  $100 per hour.
During the year ended January 31, 2001, the Company cancelled consulting agreements calling for a total of $4,000 per month
to be paid.

b)   The Company has a stock option plan as disclosed in Note 8.

c)   The Company entered into an agreement effective November 1, 2000 for a term of 6 months with Renmark Financial
Communications ("Renmark") whereby Renmark will provide investor relations and communication services to the Company in
return for fees of $5,000 per month. Pursuant to this agreement, The Company also issued 150,000 restricted shares of common
stock at a deemed value of $21,000 to Renmark for services rendered. The agreement was subsequently terminated effective
March 31, 2001.

**12.   INCOME TAXES**

The Company's total deferred tax asset at January 31 is as follows:

|                                               | 2001        | 2000       
|---------------------------------------------- | ----------- | -----------
|                                               |             |            
|Tax benefit of net operating
loss carryforward | $189,000    | $101,586   
|Valuation allowance                            | (189,000)   | (101,586)  
|                                               |             |            
|                                               | $         - | $         -

The Company has a net operating loss carryforward of approximately $540,000 (2000 - $267,332) which expire starting in 2018.
The valuation allowance increased to $189,000 from $101,586 during the year ended January 31, 2001.  The Company provided
a full valuation allowance on the deferred tax asset because of the uncertainty regarding realizability.**13.   SUBSEQUENT EVENTS**

Subsequent to January 31, 2001, the Company filed a Preliminary Proxy Statement whereby the Company, pursuant to an
Acquisition Agreement, proposes transfer all of its assets to the controlling shareholder of the Company in exchange for
consideration of $100,000 in cash or marketable securities and the assumption of the Company's liabilities. In addition, FYI
Consulting ("FYI") proposes to purchase 5,565,500 of the 5,570,400 shares of common stock of the Company currently held by
the controlling shareholder for consideration of approximately $160,000 (CDN $250,000) cash and $100,000 in cash or
marketable securities. If successful, FYI will become the majority shareholder of the Company.

The Company also proposes to change its name from Kidstoysplus.com, Inc. to Mikim, Inc. and to enter into a Consulting
Agreement for a term of two years with FYI Consulting in exchange for $100,000 in cash or marketable securities.

The above agreements and proposals are subject to regulatory and shareholder approval pursuant to the Preliminary Proxy
Statement.  Furthermore, the Company has received commitments from certain stock option holders whereby 395,000
outstanding stock options will be cancelled if the shareholders of the Company vote in favor of the above agreements and proposals.