##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

AMENDMENT NO. 1
TO



FORM 10-KSB

Annual Report Under Section 13 or 15(d) of
Securities Exchange Act of 1934

For Year ended June 30, 2001
Commission File Number 0-23693

WORLD TRANSPORT AUTHORITY, INC.

(Exact name of registrant as specified in its charter)

|                         |  |                                  
|------------------------ |  | ---------------------------------
|Alberta, BC              |  | 93-1202663                       
|(State of Incorporation) |  | (IRS Employer Identification No.)

140 W. Park Avenue, Suite 219, El Cajon, CA 92020
(Address of Principal Executive Offices) (Zip Code)

(619) 258-2858   FAX (619) 258-2857
(Registrants telephone and fax number, including area code)

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

Yes    [X]                              No [   ]

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

Yes    [X]                              No [   ]

The issuers revenues for the year ended June 30, 2001 were $364,410.

The approximate aggregate market value of the voting stock held by
non-affiliates of the registrant as of June 30, 2001, based on the market was
$10,787,924. As of June 30, 2001, the registrant had 64,647,276 shares of
common stock, no stated par value, issued and outstanding.



1



---

TABLE OF CONTENTS



|           |                                                                                                               |                                                 |  |  |  |  |  | 
|---------- | ------------------------------------------------------------------------------------------------------------- | ----------------------------------------------- |  |  |  |  |  | 
|           | ITEM 1      BUSINESS                                                                                         
|           | ITEM 2      PROPERTIES                                                                                       
|           | ITEM 3      LEGAL PROCEEDINGS                                                                                
|           | ITEM 4      SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                                              
|PART II   
|           | ITEM 5      MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANTS COMMON EQUITY AND RELATED STOCKHOLDERS MATTERS.
|           | ITEM 6      MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS            
|           | ITEM 7      FINANCIAL STATEMENTS                                                                             
|           | ITEM 8      CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE             
|PART III  
|           | ITEM 9      DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT                                               
|           | ITEM 10      EXECUTIVE COMPENSATION                                                                          
|           | ITEM 11      SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT                                  
|           | ITEM 12      CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS                                                  
|           | ITEM 13      EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K                                
|SIGNATURES
|           |                                                                                                               | CONSOLIDATED BALANCE SHEETS                    
|           |                                                                                                               | CONSOLIDATED STATEMENTS OF OPERATIONS          
|           |                                                                                                               | CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY
|           |                                                                                                               | CONSOLIDATED STATEMENTS OF CASH FLOWS          
|           |                                                                                                               | NOTES TO CONSOLIDATED FINANCIAL STATEMENTS     




ITEM 1      BUSINESS

FORWARD LOOKING STATEMENTS

In addition to historical information, this Annual Report contains
forward-looking statements. These forward-looking statements are subject to
certain risks and uncertainties that could cause actual results to differ
materially from those reflected in these forward-looking statements. Factors
that might cause such a difference include, but are not limited to those
discussed in the section entitled Managements Discussion and Analysis of
Financial Condition and Results of Operations. Readers are cautioned not to
place undue reliance on these forward-looking statements, which reflect
managements opinions only as of the date hereof. The Company undertakes no
obligation to revise or publicly release the results of any revision to these
forward-looking statements. Readers should carefully review the risk factors
described in other documents the Company files from time to time with the
Securities and Exchange Commission, including the Quarterly Reports on Form
10-QSB to be filed by the Company in fiscal year 2002.

HISTORY

World Transport Authority, Inc. (the Company) was incorporated in the
Province of Alberta, Canada in January 1996 pursuant to the Alberta Business
Corporations Act. The Company was incorporated to facilitate an initial public
offering in order to provide funding for a new motor vehicle prototype. The
prototype vehicle has been developed into the WorldStar utility vehicle, which
is now produced using the WTA micro-manufacturing process.

The Company, through its wholly owned subsidiary, World Transport
Authority, Inc. (WTA), a Nevada corporation, is in the business of designing
vehicles and selling licenses to others to produce these vehicles in markets
around the world.

The Company sells a Master License for each predetermined geographic
region or each country, depending on the estimated vehicle sales in each
market.

The price for this Master License varies depending upon the population of
the geographic region or country served. The Master License Holder (MLH) is
responsible for selling Manufacturing and Distribution Licenses for individual
factories throughout their country or region. The MLH provides all support for
each factory, including training and marketing, utilizing local customs and
language.

Generally, a manufacturing and distribution license holder is required to
pay its Master License fee by remitting a specified percentage of each
Manufacturing and Distribution License fee to the Company. As a result of the
uncertainties related to the realization of such fees, revenues from the sale
of a Master License are recognized when the Company receives the specified
percentage payment from the MLH upon the sale of a Manufacturing and
Distribution license, and the Company has provided substantially all of the
factory components and training sufficient to enable the licensee to begin
vehicle production.

Sales of manufactured vehicle components are recognized upon shipment of
the components. Royalty payments based on the production and/or sale of
vehicles are recognized when earned. Revenues from sales of licenses to build



2



---



##### Table of Contents



and sell manufacturing plants will be recognized upon completion and shipment
of the manufacturing plants by the licensee.

The Company, through its wholly owned subsidiary, World Star Logistics,
Inc. (WSL) generates revenue from the sales of manufactured vehicle
components. WSL was incorporated in the state of Nevada and began operations
in May 2000. WSL is operated through the general operating account for the
Company.

Logistics has been successful in making a substantial reduction in the
number of suppliers of parts for the WorldStar vehicle. The result is
consolidated shipments, an advantage of economies of scale to reduce costs and
reliable supply of parts and materials for the factory. Additionally,
relationships have been solidified with international freight forwarders to
establish cost effective, reliable primary and secondary transportation
sources. WSL recognizes component revenue according to the license agreements
established with the license holders. Therefore, revenue recognition is either
upon shipment of the components or upon production of the vehicle.

The Company also has majority ownership of Pan American Automotive
Corporation (PAAT) (formerly Greenvolt, Inc.). WTA acquired its portion of
PAAT ownership through the transfer of stock to WTA as payment by PAAT for
license fees. These license fees granted PAAT an exclusive area for production
of the WorldStar utility vehicle. The amounts related to PAAT are not
considered to be material.

The Company has executed an agreement with CBN World Star, Inc. (CBN),
the Philippine MLH, which grants to CBN the license to build and sell
manufacturing plants on behalf of WTA for the manufacture of the WorldStar
product line. The agreement limits CBNs right to produce factories to license
holders within their Area of Exclusivity. The Company will recognize revenue
associated with the license for production of factories upon completion and
shipment of manufacturing plants by the licensee.

MASTER LICENSE AND MANUFACTURING & DISTRIBUTION LICENSES

PHILIPPINES:

An amended Master License Agreement was executed September 15, 2000
between WTA and CBN for the region of the Philippines. The amended agreement
also granted to CBN the right to build factories for other Master Licensees, on
behalf of WTA. In September 1999 a Standard Manufacturing and Distribution
License Agreement was executed between WTA and CBN World Star, Inc.

The Grand Opening of CBNs first fully licensed factory occurred on
Friday, July 21, 2000. CBN has located their facilities in the New Special
Clark Economic Zone, which was formerly Clark Air Force Base. In October 2000,
CBN shipped the first WorldStar vehicle to China for the purposes of
pre-marketing activities in that country.

After a lengthy process, CBN acquired a Certificate of Accreditation
from the Philippine government in May 2001. This grants CBN the right to sell
and distribute the WorldStar vehicle throughout all of the Philippines.

CBN has paid royalty revenue of $10,000 to the Company for the year ended
June 30, 2001.



3



---



##### Table of Contents



CBN has positioned Doug Norman as Interim General Manager for that
company. Mr. Norman has agreed to accept this position on a temporary basis
for the benefit of the licensee. In addition to currently holding a management
position with this licensee, Mr. Norman has also disclosed that he has a twenty
percent (20%) ownership in CBN. As well as the ownership interest, Mr. Norman
has advanced significant funds to CBN for operating expenses. CBN and Mr.
Norman have not yet determined the manner in which funds will be repaid.

Mr. Norman also represents WTA in International Sales through an
independent consulting agreement.

COLOMBIA:

In May 1999, WTA and WorldStar Andino Corporation (Andino) executed a
Master License Agreement for the region of South America. Andino (as MLH for
the region) and World Star Paez S.A. (PAEZ) (as sub-licensee) executed a
Standard Manufacturing and Distribution License Agreement for Colombia.

PAEZ held the grand opening celebration for the official launch of the
WorldStar product line on July 6, 2000 in Bogata, Colombia. In April 2001 the
South American licensee received an order for a fleet of 60 WorldStar vehicles,
equipped with refrigerated compartments. Suiza, which is a Colombian cold
meats and bakery company, placed the order for vehicles being delivered from
the WorldStar factory based in the Santander de Quilichao region of Colombia.

PAEZ has generated royalty revenue of $7,000 for the year ended June 30,
2001.

PANAMERICAN AUTOMOTIVE CORPORATION

PAAT currently holds the Master License for Costa Rica, which was executed
in March 2000. This Master License agreement grants PAAT the right to expand
into other areas of Central America. PAAT is moving forward with their plans
to expand into Nicaragua, Honduras, Guatemala, San Salvador and Belize.
Through the execution of additional Master License agreements between PAAT and
WTA, PAAT is also expanding into the Caribbean Islands and Mexico.

As of fiscal year ended June 30, 2001, this licensee has not yet placed an
order for a factory to manufacture the WorldStar vehicle.

NIGERIA

A Master License Agreement was executed on July 12, 2000 between the
Company and IMR Motors Limited. (IMR). The agreement establishes the cost of
the Master License for the region of Nigeria at three million US dollars
($3,000,000 US). The exclusive region encompasses the Republic of Nigeria.
The license fee is paid in $112,000 increments to the Company upon the
execution of sub-licenses by the IMR and receipt of funds, until paid in full.
The agreement sets a royalty fee of $275 per vehicle. From the royalty fee, IMR
retains $75 and $200 is forwarded to the Company.

The Master License Holder (MLH) is obligated to establish the first
factory in their region. This facility is to be a showcase used as a tool for
selling sub-license agreements. The facility is additionally used for the
training of sub-licensees.



4



---



##### Table of Contents



A Standard Manufacturing and Distribution License Agreement was executed
between IMR (as MLH for the region) and SIGWA Motors Limited (SIGWA) (as
sub-licensee). The document has been extensively reviewed and approved by
NOTAP, the Nigerian governmental agency responsible for approval of all
contracts with foreign companies. The cost to the Sub-Licensee for the M&D
License is three hundred seventy-two thousand US dollars ($372,000 US). The
license agreement is for a five-year term, with an option to renew for another
five-year period.

As of fiscal year ended June 30, 2001, this licensee has not yet placed an
order for a factory to manufacture the WorldStar vehicle.

CHINA

A Master License Agreement was executed on September 12, 2000 between the
Company and World Star Utility, Inc. (WSU). The agreement establishes the
cost of the Master License for the region of China at forty million US dollars
($40,000,000 US). The exclusive region encompasses the Republic of China. The
license fee is paid in $112,000 increments to the Company upon the execution of
sub-licenses by WSU and receipt of funds, until paid in full. The agreement
sets a royalty fee of $275 per vehicle. From the royalty fee, WSU retains $75
and $200 is forwarded to the Company.

The Master License Holder (MLH) is obligated to establish the first
factory in their region. This facility is to be a showcase used as a tool for
selling sub-license agreements. The facility is additionally used for the
training of sub-licensees.

In August 2000, WTA was granted approval as an automobile producing
company in China. China requires foreign companies doing business in their
country to apply for a catalogue number as well. This formal process is
nearing completion.

In October 2000, the first WorldStar vehicle was shipped to China for the
purposes of pre-marketing activities in that country. Chinese delegates from
WSU visited the WorldStar facility at Clark Special Economic Zone in Pampanga,
Philippines in May 2001. The Chinese representatives included Mr. Wang Dao
When, the owner of Wuhu Bao Tong Automobile Factory in China, Mr. Fang De Ming,
deputy director of the factory and Miss Lu, manager of the Beijing operations.
The group spent three days performing vehicle tests and factory inspections.
They have held meetings with leaders of local governments in China regarding
setting up the production line and licensing to produce the WorldStar vehicle.
They are now awaiting approval from provincial and state governments.

As of fiscal year ended June 30, 2001, this licensee has not yet placed an
order for a factory to manufacture the WorldStar vehicle.

INDIA:

A Master License Agreement was executed on September 15, 2000 between the
Company and AMR Motors Limited (AMR). The agreement establishes the cost of
the Master License for the region of India at thirty three million six hundred
thousand US dollars ($33,600,000 US). The exclusive region encompasses the
Republic of India. The license fee is paid in $112,000 increments to the
Company upon the execution of sub-licenses by AMR and receipt of funds, until



5



---



##### Table of Contents



paid in full. The agreement sets a royalty fee of $275 per vehicle. From the
royalty fee, AMR retains $75 and $200 is forwarded to the Company.

The Master License Holder (MLH) is obligated to establish the first
factory in their region. This facility is to be a showcase used as a tool for
selling sub-license agreements. The facility is additionally used for the
training of sub-licensees.

A Standard Manufacturing and Distribution License Agreement was executed
between AMR (as MLH for the region) and Premier Skimmer Motor Company, Limited
(PSM) (as sub-licensee). The cost to the Sub-Licensee for the M&D License is
three hundred seventy two thousand US dollars ($372,000 US).

This facility has a sales quota of sixty percent (60%) of the 324 car per
year capacity. This requirement is waived for the first year of production.
This contract may be renewed every 10 years.

The country of India has very restrictive laws regarding expatriation of
funds from their country. Prior to funds leaving the country, the government
requires a rigorous approval process for business contracts and for the
business and marketing plans for these companies. PSM has been working
diligently to complete these requirements. At the same time, they have secured
three locations, in the cities of Chennai, Bangalore and Mumbai, as sites for
the WorldStar factory lines. Additionally, they have completed their detailed
business market studies.

As of fiscal year ended June 30, 2001, this licensee has not yet placed an
order for a factory to manufacture the WorldStar vehicle.

GUINEA

A Master License Agreement was executed on September 20, 2000 between the
Company and African Motors Ltd. (AML). The agreement establishes the cost of
the Master License for the region of Guinea at six hundred thousand US dollars
($600,000 US). The exclusive region encompasses the Republic of Guinea. The
license fee is paid in $112,000 increments to the Company upon the execution of
sub-licenses by AML and receipt of funds, until paid in full. The agreement
sets a royalty fee of $275 per vehicle. From the royalty fee, AML retains $75
and $200 is forwarded to the Company.

The Master License Holder (MLH) is obligated to establish the first
factory in their region. This facility is to be a showcase used as a tool for
selling sub-license agreements. The facility is additionally used for the
training of sub-licensees.

The MLH is attempting to obtain financing to proceed with the development
of the WorldStar production facilities. As of fiscal year ended June 30,
2001, this licensee has not yet placed an order for a factory to manufacture
the WorldStar vehicle.

SENEGAL

A Master License Agreement was executed on October 13, 2000 between the
Company and American Transport Sales, Inc. (ATS). The agreement has a term
of fifty years and establishes the cost of the Master License for the region of



6



---



##### Table of Contents



Senegal at one million seven hundred ninety two thousand US dollars
($1,792,000 US). The exclusive region encompasses the country of Senegal.

The agreement sets a royalty fee of $275 per vehicle. From the royalty
fee, ATS retains $75 and $200 is forwarded to the Company.

The MLH is awaiting the development of a diesel version of the WorldStar
vehicle in order to develop the territory of Senegal. As of fiscal year ended
June 30, 2001, this licensee has not yet placed an order for a factory to
manufacture the WorldStar vehicle.

DEMOCRATIC REPUBLIC OF THE CONGO

A Master License Agreement was executed on February 20, 2001 between the
Company and U. S. Trading and Investment Company (USTI). The agreement has a
term of fifty years and establishes the cost of the Master License for the
region of the Democratic Republic of the Congo at one million US dollars
($1,000,000 US). The exclusive region encompasses the country of the
Democratic Republic of the Congo.

The agreement sets a royalty fee of $275 per vehicle. From the royalty
fee, USTI retains $75 and $200 is forwarded to the Company.

A Standard Manufacturing and Distribution License Agreement (the M & D
License) was executed between USTI (as MLH for the region) and Societe
Conolaise dAutomobiles (SACO) (as sub-licensee). SACO represents a joint
venture arrangement between USTI and the government of the Democratic Republic
of the Congo. The M & D License constitutes an initial order of three (3)
factories with a cost to the Sub-Licensee of one million US dollars ($1,000,000
US).

The Company cancelled the Master License Agreement for the region of the
Democratic Republic of the Congo on August 6, 2001 for nonperformance.

REPUBLIC OF COTE DIVOIRE

A Master License Agreement was executed on February 20, 2001 between the
Company and USTI. The agreement has a term of fifty years and establishes the
cost of the Master License for the region of the Republic of Cote dIvoire at
one million dollars ($1,000,000 US). The exclusive region encompasses the
Country of the Republic of Cote dIvoire, also referred to as the Ivory Coast.

The agreement sets a royalty fee of $275 per vehicle. From the royalty
fee, USTI retains $75 and $200 is forwarded to the Company.

The Company cancelled the Master License Agreement for the region of the
Republic of Cote dIvoire on August 6, 2001 for nonperformance.

NON PROFIT PROGRAM

The company has been developing a Non Governmental Organization (NGO)
program for third world nations, along with the commercial WorldStar business.
This NGO program initiates a WorldStar factory in conjunction with an
incubator program to train new business people in the developing nations.

In June 2001, the National Football League Retired Players Foundation
(NFLRPF) signed a Master Economic Development License with the Company. The



7



---



##### Table of Contents



focus of the project under this License is to open factories in Africa to
produce the WorldStar utility vehicles in conjunction with training programs
for entrepreneurs. The foundation is currently in negotiation with parties in
three African nations to establish the first development locations.

As of fiscal year ended June 30, 2001, this licensee was developing their
business plan to raise donations for the development of this project. The
licensee has 120 days in which to perform by purchasing the Initial Production
Line and making a deposit.

Zastava

Zastava has granted the Company a five-year agreement to represent their
product in both the Automobile and Truck Divisions to sell Complete Knock Down
(CKD) or Completely Built Up (CBU) systems. Zastava is an automobile
production company that is located in Kragujavec, Yugoslavia which produces the
Florida and Ciao cars. The Company also has an exclusive agreement with
Zastava to supply the drive train and ancillary parts for all WorldStar
vehicles.

COMPETITION

As of the date of the filing of this report, the Company is not aware of
any competition in the third world vehicle market. The Company was invited to
participate in the 4th European Automobile Conference entitled: Plastic Car
Bodies, Today and Tomorrow. The WorldStar vehicle was one of only seven car
bodies displayed at this conference. Of the seven vehicles
presented, the WorldStar was the only vehicle with a body completely
constructed of composite. Of the seven composite vehicles on display, the
WorldStar is the only vehicle marketed for production in third world nations.

EMPLOYEES

As of June 30, 2001 the Company had 6 employees. Three of these employees
work at the headquarters location of the Company in California. The other
three employees work in the Philippines as the technical staff for the
business. No labor union or other labor organization currently represents the
Companys employees. Approximately 50% of these employees are involved in
technical area of the business, with the remainder involved in administrative
activities.




ITEM 2      PROPERTIES

As of fiscal year end June 30, 2001 the Companys headquarters office was
located at 8402 N. Magnolia Avenue, Suite C & D, Santee, CA 92071. The lease
for these office facilities extends for a four-year term. The location
contains 4,800 square feet of offices and show room. This operating lease
provides that the Company pay $3,696 in base rent per month. The Company
leases a second office location at 1050 17th Street in Washington D.C. on a
month to month basis. Additional office locations include Beijing, China,
Manila, Philippines, and a new office location at the Zastava factory in
Kragujavec, Yugoslavia. Currently the office in Beijing is being shared, and
WTA is not currently paying rental on the space. At year-end there were no
lease or rental agreements entered into for the office space in Philippines or
in Yugoslavia.



8



---



##### Table of Contents






ITEM 3      LEGAL PROCEEDINGS

In January 2001, WTA reached a settlement agreement with Andino and PAEZ
regarding the Colombia license operations. The settlement dismissed the
remaining license fees for the PAEZ factory in the sum of $86,671. Based
on the information presented during the settlement negotiations, PAEZ felt that
the redesign of the WorldStar vehicle caused the operations of PAEZ to be
delayed by at least six months. Therefore, PAEZ felt an offset of the
remaining license fees owed to WTA was reasonable. Additionally, WTA agreed to
pay to PAEZ $100,000 in monthly installments of $12,500. During the year ended
June 30, 2001, the Company made payments of $75,000 to PAEZ. As of the year
ended June 30, 2001 the balance due on the settlement is $25,000. PAEZ
continues to operate their WorldStar factory and is in the process of expanding
their operation to fulfill their projected sales for the remainder of this
calendar year.

At fiscal year end June 30, 2001, the Company had legal issues outstanding
with former employees. After the end of the year, the Company settled with
Carlos Cano, a former employee, for $50,000. The Company does not expect other
legal issues to have a material impact on the Company.

The Company from time to time is presented with legal issues. As of the
year ended June 30, 2001, there are no other legal issues that have material
bearing on the Company.




ITEM 4      SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

The Company held no shareholder meetings during the fiscal year.




PART II




|       |                                                                                                  
|------ | -------------------------------------------------------------------------------------------------
|ITEM 5 | MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANTS COMMON EQUITY AND RELATED STOCKHOLDERS MATTERS.

On September 24, 1998, the Companys common stock began trading on the OTC
Electronic Bulletin sponsored by the National Association of Securities Dealers
(NASD). The following table sets forth the high and low closing sales prices
for the Common Stock for each quarterly period within the Companys most recent
fiscal year on the OTC Electronic Bulletin Board. These amounts have not been
adjusted for the four-for-one forward stock split, which was effective on
August 31, 2000.

Quarter ended:

|             |  |  |      |  |  |      |          |     |  |  |         |  |  |      |      |     |  |  |        |  |  |  |        | 
|------------ |  |  | ---- |  |  | ---- | -------- | --- |  |  | ------- |  |  | ---- | ---- | --- |  |  | ------ |  |  |  | ------ | 
|             |  |  |      |  |  | High |          | Low |  |  |         |  |  | High |      | Low
|             |  |  |      |  |  |      |          |     |  |  |         |  |  |      |      |    
|September 30 |  |  | 1999 |  |  |      | 1 47/50  |     |  |  | 1 17/50 |  |  |      | 2000 |     |  |  | 61/100 |  |  |  | 30/100 | 
|December 31, |  |  | 1999 |  |  |      | 13/25    |     |  |  | 13/100  |  |  |      | 2000 |     |  |  | 81/100 |  |  |  | 17/100 | 
|March 31,    |  |  | 2000 |  |  |      | 2 81/100 |     |  |  | 7/50    |  |  |      | 2001 |     |  |  | 10/50  |  |  |  | 19/100 | 
|June 30,     |  |  | 2000 |  |  |      | 2 53/100 |     |  |  | 81/100  |  |  |      | 2001 |     |  |  | 21/100 |  |  |  | 19/100 | 

As of September 15, 1999, the Companys stock has been traded on the
NASDAQ system in the over-the-counter market under the symbol CARH.
September 1, 2000, the company name changed to World Transport Authority, Inc.,
and the trading symbol changed to WTAI.

In April 2000, the Companys common stock began trading on the Frankfurt
Stock Exchange under the trading symbol POH. September 1, 2000, the company



9



---



##### Table of Contents



name changed to World Transport Authority, Inc., and the trading symbol changed
to 920943. Effective August 31, 2000, the Company underwent a four-for-one
forward split of its shares of common stock.

The Companys Board of Directors determines any payment of dividends. The
Board of Directors does not expect to authorize the payment of cash dividends
in the foreseeable future. The Companys Board of Directors passed a
resolution to provide a dividend to stockholders in the form of stock in PAAT
(Formerly Greenvolt, Inc.). The Company received stock in PAAT in April 2000
and in January 2001. PAAT was established in the NASDAQ system on the Pink
Sheets under the symbol PAAT in August 2000. The Company established February
14, 2001 as the recordation date for this dividend. The dividend is to be
issued in the form of one share of PAAT common stock per one share owned of
WTAI stock for shareholders of record on February 14, 2001.

Under the requirements of the Securities Act of 1933 established by the
Securities and Exchange Commission (SEC), certain rules are applicable to the
PAAT dividend, since WTA is the majority owner of PAAT. Therefore, PAAT must
register the shares as free trading with the SEC before the distribution of the
dividend. Upon the completion of this registration, the PAAT certificates will
be distributed. As of fiscal year ended June 30, 2001, the registration of the
shares by PAAT had not been filed. Until the registration is complete, WTA
will hold the shares in trust for its shareholders of record as of February 14,
2001.

Any future decision with respect to dividends will depend on future
earnings, operations, capital requirements and availability, restriction in
future financing agreements, and other business and financial considerations.

As Of June 30, 2001, there were approximately 284 holders of record of the
Companys Common Stock. The Board of Directors believes the number of
beneficial owners is significantly greater than the number of record holders.
Principal depositories in Canada and the United States hold a large portion of
the Companys outstanding shares of Common Stock for the benefit of individual
investors. As of year-end June 30, 2001, Cede & Company held 16,216,902 shares
of the Companys Common Stock. The company estimates that the holdings of Cede
and Company represents approximately 3,000 beneficial shareholders. At
year-end, depositories in Canada held 22,082,558 shares of the Companys Common
Stock for an undeterminable number of shareholders.




|       |                                                                                      
|------ | -------------------------------------------------------------------------------------
|ITEM 6 | MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following selected financial data should be read in conjunction with
the more detailed financial statements, related notes and other financial
information included herein.

|                             |  |                      |            |      |  |   |            |  
|---------------------------- |  | -------------------- | ---------- | ---- |  | - | ---------- | -
|                             |  | As of and for the   
|                             |  | Years Ended June 30,
|                             |  |                     
|                             |  | 2001                 |            | 2000
|                             |  |                      |            |     
|Operating Data:              |  |                      |            |      |  |   |            |  
|License Fees                 |  | $                    | 0          |      |  | $ | 254,000    |  
|Net Sales                    |  |                      | 347,410    |      |  |   | 422,290    |  
|Royalty Revenues             |  |                      | 17,000     |      |  |   |            |  
|Cost of Sales                |  |                      | (316,185   | )    |  |   | (309,715   | )
|Operating and Other Expenses |  |                      | (3,390,025 | )    |  |   | (2,341,175 | )
|                             |  |                      |            |      |  |   |            |  



10



---



##### Table of Contents



|                             |  |   |            |   |  |   |            |   | 
|---------------------------- |  | - | ---------- | - |  | - | ---------- | - | 
|Net Loss                     |  | $ | (3,341,800 | ) |  | $ | (1,974,600 | )
|                             |  |   |            |   |  |   |            |  
|Balance Sheet Data:          |  |   |            |   |  |   |            |  
|Current Assets               |  | $ | 214,799    |   |  | $ | 718,841    |  
|Total Assets                 |  |   | 773,194    |   |  |   | 1,346,004  |  
|Current Liabilities          |  |   | 341,031    |   |  |   | 183,338    |  
|Total Liabilities            |  |   | 601,776    |   |  |   | 243,338    |  
|Working Capital (Deficiency) |  |   | (126,232   | ) |  |   | 535,503    |  
|Stockholders Equity         |  |   | 171,418    |   |  |   | 1,102,666  |  

The Company has not declared any Common Stock cash dividends.

RESULTS OF OPERATIONS

The results of operations for fiscal year ended June 30, 2001 have
prompted the Company to reevaluate the business plan currently in operation.
The Company will determine what modifications are necessary to overcome the
delays and stagnation in territory development currently being experienced by
licensees.

The Companys revenues for the year ended June 30, 2001 consisted of no
license fees, royalty revenues of $17,000 and $347,410 in net sales for total
revenues of $364,410. The Companys total net sales for year ended June 30,
2001 decreased 17.7% over the Companys net sales for year ended June 30, 2000
of $422,290. Revenues from year ended June 30, 2000 were primarily from
license fees and factory sales. Sales for the year ended June 30, 2001 were
primarily from sales of vehicle components. The year ended June 30, 2001 was
the first fiscal year in which the Company received royalty revenues.

The Company had a net loss of $3,341,800 for the year ended June 30, 2001
compared to the Companys net loss for the year ended June 30, 2000 of
$1,974,600. The increase in net loss for 2001 was primarily due to lack of
payment of license fees, as well as increased expenses in travel, legal
settlements, public relations and commissions

Selling and general expenses and other income/expenses for the year ended
June 30, 2001 were $3,390,025 compared to selling and general expenses and
other income/expenses of $2,341,175 for the year ended June 30, 2000. The
increased selling and general expenses and other income/expenses in 2001 were
primarily due to an increase in operating expenses due to additional travel,
additional offices, higher commission expense and legal settlements. During
fiscal year 2001, the lease for 635 Front Street, El Cajon expired, and the new
lease for office space at 8402 N. Magnolia Avenue, Santee, CA reduced the
square footage occupied by WTA. This resulted in rent and utility savings.
The areas of marketing and advertising were expanded in fiscal year 2001 and
therefore expenditures in this area increased.

LIQUIDITY AND CAPITAL RESOURCES

The Companys working capital (deficiency) at June 30, 2001 was $(126,232)
as compared to working capital of $535,503 at June 30, 2000. Net cash used in
operating activities totaled $1,162,752 for the year ended June 30, 2001
compared to $663,415 for the year ended June 30, 2000.



11



---



##### Table of Contents



During the year ended June 30, 2001, the Company funded its operating
losses with advances from a related party, by selling shares of its common
stock to various investors and issuing common stock for services.

The Company does not have any available credit, bank financing or other
external sources of liquidity. Due to its historical operating losses, the
Companys operations have not been a source of liquidity. In order to obtain
capital and be able to continue as a going concern, the Company may need to
sell additional shares of its common stock or borrow funds from private lenders
and/or related parties. During the next year, the Company anticipates that the
payment of auto parts fees and royalty income will increase based on the
increased production of existing WorldStar factories in Colombia and the
Philippines. Additionally, the Company is evaluating its current business plan
to determine what has hindered the order for factories and the collection of
license fees under the currently executed license agreements. In evaluating
the WTA business plan, the Company intends to obtain valuable comments from the
license holders that have successfully established existing WorldStar
factories.




ITEM 7      FINANCIAL STATEMENTS

The financial statements required by this report are set forth in the
index on page F-1.




|       |                                                                                     
|------ | ------------------------------------------------------------------------------------
|ITEM 8 | CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None




PART III




ITEM 9      DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

Board Of Directors

The following table sets forth certain information concerning each member
of the Companys Board of Directors as of June 30, 2001.

Directors:

|             |  |     |    |              |  |                   |  |                         
|------------ |  | --- | -- | ------------ |  | ----------------- |  | ------------------------
|Name         |  | Age |    | Date Elected |  | Position         
|             |  |     |    |              |  |                  
|Lyle Wardrop |  |     | 60 |              |  | 09/27/99
03/19/96 |  | President, CEO,
Director
|Paul Hewitt  |  |     | 47 |              |  | 07/01/98          |  | Director                
|David Yue    |  |     | 49 |              |  | 06/01/00          |  | Director                

Lyle Wardrop continues to serve as the CEO, President and Director for
WTA. Mr. Wardrop has served as a director of the Company since March 1996. On
September 27, 1999, Mr. Wardrop was named Chief Executive Officer and President
of the Company. Since 1963, Mr. Wardrop, a resident of British Columbia,
Canada has been involved in the automotive market as President of Golden Mile
Motors and United Auto Brokers. He is also actively involved in the Automotive
Retailers Association of British Columbia, which represents the automotive
retail sector in dealing with government and private agencies. Additionally,



12



---



##### Table of Contents



Mr. Wardrop has served as a director for Marnor Holdings, a flat deck freight
company, for three years.

Paul S. Hewitt has served as a Director of the Company since July 1, 1998
and is a resident of Bethesda, Maryland. Mr. Hewitt is Director the Global
Aging Initiative at the Center for Strategic and International Studies,
where he is working with political and business leaders to assess the
implications of the simultaneous aging of the industrial nations. His writing
has appeared in such publications as the Wall Street Journal, Washington Post,
Los Angeles Times and Financial Times. He is currently writing a book on the
coming era of labor shortages that will sweep the developed world later this
decade. From 1990-1997, Mr. Hewitt was Executive Director of the National
Taxpayers Union Foundation, where he won national acclaim for his computerized
budget tracking systems. He began his career in 1979 as a Presidential
Management Intern, and served in the Office of Management and Budget before
moving to Capitol Hill, where he became staff director of the Senate
Subcommittee on Intergovernmental Relations. In 1985, he and Senator David
Durenberger (R-MN) founded Americans for Generational Equity, the nations
first advocacy organization for the interests of younger and future
generations. Mr. Hewitt earned a Bachelors Degree in Economics from the
University of California, Berkeley and a Masters of Public Administration from
American University.

David Yue is an international businessman who was born and educated in
Hong Kong, China. Mr. Yue brings to WTA a wealth of successful business
experience in both the private and public sectors. His experience includes the
successful start-up and financing of several private companies, that went on to
become public and now trade on either the Toronto or Nasdaq stock exchanges.
Mr. Yue was a director of British Columbia Hydro International Ltd, the 100%
owned subsidiary of BC Hydro Ltd, which is one of the largest power generating
companies in Canada. This wholly owned subsidiary is the vehicle in which BC
Hydro develops and finances its international operations. Through this
directorship Mr. Yue advised and helped guide the company with particular
emphasis on the Chinese and Asian marketplace regarding power generation. Mr
Yue has additionally advised the Nanhai Transportation Bureau in China
regarding the building and operation of toll roads in southern China.
Currently, Mr. Yue is a director of Huading Financial Network Inc, a public
company with extensive Chinese and Asian financial market dealings.

On July 21, 2001 Corinne Keller resigned from her position as the
Secretary of WTA, the Nevada company and subsidiary of WTA the Canadian
company. The position of Secretary was filled by Mr. Lyle Wardrop, the current
President of the Nevada company.



13



---



##### Table of Contents






ITEM 10      EXECUTIVE COMPENSATION

Summary Compensation Table:

|                                |  |      |      |   |  |        |        |              |  |              |   |       |  |      |   |     |  |                    |        |  |  |  |   |  |  |  |   | 
|------------------------------- |  | ---- | ---- | - |  | ------ | ------ | ------------ |  | ------------ | - | ----- |  | ---- | - | --- |  | ------------------ | ------ |  |  |  | - |  |  |  | - | 
|                                |  |      |      |   |  |        |        |              |  |              |   |       |  |      |   |     |  | Restricted Options |        |  |  | 
|Name &                          |  |      |     
|principal                       |  |      |      |   |  | Salary |        | Bonus        |  | Other Annual |   | Stock |  |      |   |     |  | LTIP              
|position                        |  | Year |      | $ |  | $      |        | compensation |  | Awards       |   | (#)   |  | SARs
|                                |  |      |      |   |  |        |        |              |  |              |   |       |  |     
|Thomas Bowers                   |  |      | 2000 |   |  |        | 22,913 | (1)          |  |              | 0 |       |  |      | 0 |     |  |                    | 0      |  |  |  | 0 |  |  |  | 0 | 
|President & CEO                 |  |      | 2001 |   |  |        | 0      |              |  |              | 0 |       |  |      | 0 |     |  |                    | 0      |  |  |  | 0 |  |  |  | 0 | 
|Lyle Wardrop                    |  |      | 2000 |   |  |        | 0      |              |  |              | 0 |       |  |      | 0 |     |  |                    | 15,000 |  |  |  | 0 |  |  |  | 0 | 
|CEO, President
        Director |  |      | 2001 |   |  |        | 0      |              |  |              | 0 |       |  |      | 0 | (2) |  |                    | 0      |  |  |  | 0 |  |  |  | 0 | 



---

|(1) |  | Represents salary for July, August and part of September 1999 until his
resignation as President of the company.                                               
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|   
|   
|   
|(2) |  | The company provided an advance of $1,500 to Mr. Wardrop for computer
equipment for his office. As of year-end, Mr. Wardrop had not yet purchased
the computer.

Thomas Bowers served as President and CEO until his resignation effective
September 27, 1999. Lyle Wardrop began his term as President and CEO of the
Company on September 27, 1999.

The Directors and Principal Officers have worked with minimum remuneration
until such time as the Company receives sufficient revenues necessary to
provide proper salaries to all Officers and compensation for Directors
participation.

The Company does not have written employment agreements with any of its
executive officers or key employees.

There are no annuity, pension or retirement benefits proposed to be paid
to officers, directors or employees of the Corporation in the event of
retirement at normal retirement date pursuant to any presently existing plan
provided or contributed to by the Corporation or any of its subsidiaries.




ITEM 11      SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth information on the ownership of the
Companys voting securities, retroactively adjusted for the four-for-one
forward stock split effective August 31, 2000, by Officers, Directors and major
stockholders as well as those who own beneficially more than five percent of
the Companys common stock:

|                                              |  |                                  |  |                 |           |         |   |  |      |  
|--------------------------------------------- |  | -------------------------------- |  | --------------- | --------- | ------- | - |  | ---- | -
|Title of                                      |  | Name &                           |  | Amount &        |           | Percent
|Class                                         |  | Address                          |  | Nature of owner |           | Owned  
|                                              |  |                                  |  |                 |           |        
|Common                                        |  | Lyle Wardrop
Langley BC, V3A 3R5 |  |                 | 400,000   |         |   |  | 0.62 | %
|                                             
|                                             
|                                             
|                                             
|Common                                        |  | Paul Hewitt
Bethesda, MD 20816   |  |                 | 400,000   |         |   |  | 0.62 | %
|                                             
|                                             
|                                             
|                                             
|Common                                        |  | David Yue                        |  |                 | 0         |         |   |  | 0.00 | %
|                                              |  |                                  |  |                 |           |         |   |  |      |  
|Officers and Directors as a Group (3 persons) |  | 800,000                          |  |                 |           | 1.24    | %
|                                              |  |                                  |  |                 |           |         |   |  |      |  
|Common                                        |  | Dick Miguel                      |  |                 | 3,795,200 |         |   |  | 5.87 | %
|                                             
|                                             
|                                             
|                                             
|Common                                        |  | Doug/Ming Norman                 |  |                 | 5,560,341 | (a)     |   |  | 8.16 | %



---

|(a) |  | As noted under Item 12, the Company issued shares to this stockholder in
payment for funds advanced to the Company by this stockholder.
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------

The 10-KSB report for year ended June 30, 2000 listed Maritime
International, Ltd. as one of the principal shareholders of the Company. On



14



---



##### Table of Contents



December 1, 1997, the 2,906,668 shares owned by Maritime International, Ltd.
(Beneficial Owner & Control Person  Trevor Lloyd) were placed in an
irrevocable trust dated December 1, 1997. At that time, the Board voted to
accept an irrevocable stock trust set up for three years, with Lyle Wardrop, a
director of the Company, as trustee. The trust requires that the Companys
Board of Directors must approve any sale or transfer of the trusts shares.
Trustee
retains legal right to vote the shares of the Trust in all required
shareholder votes. At the end of the fiscal year June 30, 2001 the Company was
unaware of the status of the irrevocable trust which was due to expire on
November 30, 2000. Because Maritime International was no longer a major
shareholder based on the number of shares in the irrevocable trust; the Company
did not further delve into the status of the trust.




ITEM 12      CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

During 2000, a stockholder advanced $260,844 to the Company, which was
unsecured, non-interest bearing, and due on demand. In payment of this debt
the Company then issued to this shareholder 5,473,328 shares of common stock at
market prices ranging from $.04 to $.30 per share. Because of the common stock
issuance, the Company had an outstanding receivable from a stockholder of
$22,183 at June 30, 2000. This receivable was unsecured, non-interest bearing
and due on demand.

During 2001, the same stockholder advanced $244,238 to the Company, which
was unsecured, non-interest bearing, and due on demand. The Company then
issued 750,519 shares of common stock at market prices ranging from $.16 to
$.22 per share, for a total value of $142,200. Because of the common stock
issuance, cash repayments and other offsets, the Company had an outstanding
loan to the stockholder of $9,654 at June 30, 2001.

In addition, during the year ended June 30, 2001, the Company issued
2,916,000 shares of the Companys common stock to the same stockholder in
payment for service performed in accordance with a consulting agreement. The
stock was issued at a market price of $.3125 per share, for a total value of
$911,250.

All share and per share amounts in this section have been retroactively
adjusted for the four-for-one forward stock split that was effective on August
31, 2000.




ITEM 13      EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

None



15



---



##### Table of Contents






SIGNATURES

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



|                         | World Transport Authority, Inc.                       
|------------------------ | ------------------------------------------------------
|                        
|Dated: November 26, 2001 | /s/ LYLE A. WARDROP                                   
|                         |                                                       
|                         | Lyle A. Wardrop,
President and Chief Executive Officer




16



---



##### Table of Contents



WORLD TRANSPORT AUTHORITY, INC. AND SUBSIDIARIES
 
 INDEX TO FINANCIAL STATEMENTS
[ATTACHMENT TO ITEM 7]

|                                                                                   |  |      |        | 
|---------------------------------------------------------------------------------- |  | ---- | ------ | 
|                                                                                   |  | PAGE
|                                                                                   |  |     
|REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS                                           |  |      | F-2    | 
|                                                                                  
|CONSOLIDATED BALANCE SHEETS
JUNE 30, 2001 AND 2000                                 |  |      | F-3    | 
|                                                                                  
|CONSOLIDATED STATEMENTS OF OPERATIONS
YEARS ENDED JUNE 30, 2001 AND 2000           |  |      | F-4    | 
|                                                                                  
|CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY
YEARS ENDED JUNE 30, 2001 AND 2000 |  |      | F-5    | 
|                                                                                  
|CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED JUNE 30, 2001 AND 2000           |  |      | F-6    | 
|                                                                                  
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS                                         |  |      | F-7/13 | 

*    *    *



F-1



---



##### Table of Contents



REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Stockholders
World Transport Authority, Inc.

We have audited the accompanying consolidated balance sheets of WORLD TRANSPORT
AUTHORITY, INC. AND SUBSIDIARIES as of June 30, 2001 and 2000, and the related
consolidated statements of operations, stockholders equity and cash flows for
the years then ended. These financial statements are the responsibility of the
Companys management. Our responsibility is to express an opinion on these
financial statements based on our audits.

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

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of World Transport
Authority, Inc. and Subsidiaries as of June 30, 2001 and 2000, and their
results of operations and cash flows for the years then ended, in conformity
with accounting principles generally accepted in the United States of America.

The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in Note 2 to
the consolidated financial statements, the Company has not generated any
sustained revenues from its operations and, as a result, it has had recurring
losses and operating activities that have used cash. These matters, among
others, raise substantial doubt about the Companys ability to continue as a
going concern. Managements plans in regard to these matters are also
described in Note 2. The consolidated financial statements do not include any
adjustments that might result from the outcome of these uncertainties.



| | J.H. COHN LLP
| | -------------

San Diego, California
September 21, 2001

F-2



---



##### Table of Contents






WORLD TRANSPORT AUTHORITY, INC. AND SUBSIDIARIES
 
CONSOLIDATED BALANCE SHEETS
JUNE 30, 2001 AND 2000

|                                                  |                                                                                                                   |                            |         |             |         |      |         |            |           | 
|------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------- | -------------------------- | ------- | ----------- | ------- | ---- | ------- | ---------- | --------- | 
|ASSETS                                           
|                                                  |                                                                                                                   |                            |         | 2001        |         | 2000
|                                                  |                                                                                                                   |                            |         |             |         |     
|Current assets:                                   |                                                                                                                   |                            |         |             |         |      |         |           
|                                                  | Cash and cash equivalents                                                                                         |                            | $       | 2,450       |         |      | $       | 175,157    |          
|                                                  | Accounts receivable, net of allowance for doubtful
accounts of $456 and $20,906                                   |                            |         | 67,543      |         |      |         | 129,068    |          
|                                                  | Inventories                                                                                                       |                            |         | 82,468      |         |      |         | 233,117    |          
|                                                  | Receivable from stockholder                                                                                       |                            |         |             |         |      |         | 22,183     |          
|                                                  | Prepaid expenses and other current assets                                                                         |                            |         | 62,338      |         |      |         | 159,316    |          
|                                                  |                                                                                                                   |                            |         |             |         |      |         |           
|                                                  |                                                                                                                   | Total current assets       |         |             | 214,799 |      |         |            | 718,841   | 
|Property and equipment, net                       |                                                                                                                   |                            | 515,978 |             |         |      | 620,727 |           
|Other assets                                      |                                                                                                                   |                            | 42,417  |             |         |      | 6,436   |           
|                                                  |                                                                                                                   |                            |         |             |         |      |         |           
|                                                  |                                                                                                                   | Totals                     |         | $           | 773,194 |      |         | $          | 1,346,004 | 
|                                                  |                                                                                                                   |                            |         |             |         |      |         |           
|                                                 
|LIABILITIES AND STOCKHOLDERS EQUITY              |                                                                                                                  
|                                                 
|Current liabilities:                              |                                                                                                                   |                            |         |             |         |      |         |           
|                                                  | Accounts payable                                                                                                  |                            | $       | 204,130     |         |      | $       | 76,775     |          
|                                                  | Accrued expenses                                                                                                  |                            |         | 121,760     |         |      |         | 106,563    |          
|                                                  | Due to stockholder                                                                                                |                            |         | 9,654       |         |      |         |            |          
|                                                  | Current portion of capital lease obligations                                                                      |                            |         | 5,487       |         |      |         |            |          
|                                                  |                                                                                                                   |                            |         |             |         |      |         |           
|                                                  |                                                                                                                   | Total current liabilities  |         |             | 341,031 |      |         |            | 183,338   | 
|Capital lease obligations, net of current portion |                                                                                                                   |                            | 28,745  |             |         |      |         |           
|Deferred license fees                             |                                                                                                                   |                            | 232,000 |             |         |      | 60,000  |           
|                                                  |                                                                                                                   |                            |         |             |         |      |         |           
|                                                  |                                                                                                                   | Total liabilities          |         |             | 601,776 |      |         |            | 243,338   | 
|                                                  |                                                                                                                   |                            |         |             |         |      |         |           
|Commitments and contingencies                     |                                                                                                                   |                            |         |             |         |      |         |           
|Stockholders equity:                             |                                                                                                                   |                            |         |             |         |      |         |           
|                                                  | Common stock  unlimited shares authorized, no
par value; 64,647,276 and 56,014,780 shares issued
and outstanding |                            |         | 12,247,115  |         |      |         | 9,836,563  |          
|                                                  | Accumulated deficit                                                                                               |                            |         | (12,075,697 | )       |      |         | (8,733,897 | )        
|                                                  |                                                                                                                   |                            |         |             |         |      |         |           
|                                                  |                                                                                                                   | Total stockholders equity |         |             | 171,418 |      |         |            | 1,102,666 | 
|                                                  |                                                                                                                   |                            |         |             |         |      |         |           
|                                                  |                                                                                                                   | Totals                     |         | $           | 773,194 |      |         | $          | 1,346,004 | 
|                                                  |                                                                                                                   |                            |         |             |         |      |         |           

See Notes to Consolidated Financial Statements.



F-3



---



##### Table of Contents






WORLD TRANSPORT AUTHORITY, INC. AND SUBSIDIARIES
 
CONSOLIDATED STATEMENTS OF OPERATIONS
YEARS ENDED JUNE 30, 2001 AND 2000

|                                          |                               |        |            |           |           |      |            |           |           | 
|----------------------------------------- | ----------------------------- | ------ | ---------- | --------- | --------- | ---- | ---------- | --------- | --------- | 
|                                          |                               |        |            | 2001      |           | 2000
|                                          |                               |        |            |           |           |     
|Revenues:                                 |                               |        |            |           |           |      |            |          
|                                          | License fees                  |        |            |           |           |      | $          | 254,000   |          
|                                          | Net sales                     |        | $          | 347,410   |           |      |            | 422,290   |          
|                                          | Royalties                     |        |            | 17,000    |           |      |            |           |          
|                                          |                               |        |            |           |           |      |            |          
|                                          |                               | Totals |            |           | 364,410   |      |            |           | 676,290   | 
|Cost of sales                             |                               |        | 316,185    |           |           |      | 309,715    |          
|                                          |                               |        |            |           |           |      |            |          
|Gross profit                              |                               |        | 48,225     |           |           |      | 366,575    |          
|                                          |                               |        |            |           |           |      |            |          
|Operating expenses:                       |                               |        |            |           |           |      |            |          
|                                          | Selling and general           |        |            | 3,142,897 |           |      |            | 2,087,700 |          
|                                          | Depreciation and amortization |        |            | 261,538   |           |      |            | 249,874   |          
|                                          |                               |        |            |           |           |      |            |          
|                                          |                               | Totals |            |           | 3,404,435 |      |            |           | 2,337,574 | 
|                                          |                               |        |            |           |           |      |            |          
|Operating loss                            |                               |        | (3,356,210 | )         |           |      | (1,970,999 | )        
|Other income (expense)                    |                               |        | 14,410     |           |           |      | (3,601     | )        
|                                          |                               |        |            |           |           |      |            |          
|Net loss                                  |                               | $      | (3,341,800 | )         |           | $    | (1,974,600 | )        
|                                          |                               |        |            |           |           |      |            |          
|Basic net loss per share                  |                               | $      | (.05       | )         |           | $    | (.05       | )        
|                                          |                               |        |            |           |           |      |            |          
|Basic weighted average shares outstanding |                               |        | 63,702,903 |           |           |      | 42,224,332 |          
|                                          |                               |        |            |           |           |      |            |          

See Notes to Consolidated Financial Statements.



F-4



---



##### Table of Contents






WORLD TRANSPORT AUTHORITY, INC. AND SUBSIDIARIES
 
CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY
YEARS ENDED JUNE 30, 2001 AND 2000

|                                                   |  |              |            |             |  |         |            |       |  |   |             |   |  |   |            |  
|-------------------------------------------------- |  | ------------ | ---------- | ----------- |  | ------- | ---------- | ----- |  | - | ----------- | - |  | - | ---------- | -
|                                                   |  | Common Stock |            |             |  |         |            |       |  |  
|                                                   |  |              |            | Accumulated |  |         |            |      
|                                                   |  | Shares       |            | Amount      |  | Deficit |            | Total
|                                                   |  |              |            |             |  |         |            |      
|Balance, July 1, 1999                              |  |              | 7,377,466  |             |  | $       | 7,697,607  |       |  | $ | (6,759,297  | ) |  | $ | 938,310    |  
|Common stock sold for cash                         |  |              | 1,132,714  |             |  |         | 612,553    |       |  |   |             |   |  |   | 612,553    |  
|Common stock issued
to pay for services            |  |              | 4,053,183  |             |  |         | 1,235,253  |       |  |   |             |   |  |   | 1,235,253  |  
|Common stock issued to pay
employee bonuses        |  |              | 72,000     |             |  |         | 41,150     |       |  |   |             |   |  |   | 41,150     |  
|Common stock issued to pay
related party advances  |  |              | 1,368,332  |             |  |         | 250,000    |       |  |   |             |   |  |   | 250,000    |  
|Retroactive effect of 4 for 1
split in August 2000 |  |              | 42,011,085 |             |  |         |            |       |  |   |             |   |  |   |            |  
|Net loss                                           |  |              |            |             |  |         |            |       |  |   | (1,974,600  | ) |  |   | (1,974,600 | )
|                                                   |  |              |            |             |  |         |            |       |  |   |             |   |  |   |            |  
|Balance, June 30, 2000                             |  |              | 56,014,780 |             |  |         | 9,836,563  |       |  |   | (8,733,897  | ) |  |   | 1,102,666  |  
|Common stock sold for cash                         |  |              | 3,431,110  |             |  |         | 854,565    |       |  |   |             |   |  |   | 854,565    |  
|Common stock issued
to pay for services            |  |              | 4,312,099  |             |  |         | 1,368,308  |       |  |   |             |   |  |   | 1,368,308  |  
|Common stock issued to pay
employee compensation   |  |              | 138,768    |             |  |         | 45,479     |       |  |   |             |   |  |   | 45,479     |  
|Common stock issued to pay
related party advances  |  |              | 750,519    |             |  |         | 142,200    |       |  |   |             |   |  |   | 142,200    |  
|Net loss                                           |  |              |            |             |  |         |            |       |  |   | (3,341,800  | ) |  |   | (3,341,800 | )
|                                                   |  |              |            |             |  |         |            |       |  |   |             |   |  |   |            |  
|Balance, June 30, 2001                             |  |              | 64,647,276 |             |  | $       | 12,247,115 |       |  | $ | (12,075,697 | ) |  | $ | 171,418    |  
|                                                   |  |              |            |             |  |         |            |       |  |   |             |   |  |   |            |  

See Notes to Consolidated Financial Statements.



F-5



---



##### Table of Contents






WORLD TRANSPORT AUTHORITY, INC. AND SUBSIDIARIES
 
CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED JUNE 30, 2001 AND 2000

|                                                           |                                                                             |                                                            |                                           |                                           |           |         |            |            |           |          |          |  
|---------------------------------------------------------- | --------------------------------------------------------------------------- | ---------------------------------------------------------- | ----------------------------------------- | ----------------------------------------- | --------- | ------- | ---------- | ---------- | --------- | -------- | -------- | -
|                                                           |                                                                             |                                                            |                                           |                                           |           | 2001    |            | 2000      
|                                                           |                                                                             |                                                            |                                           |                                           |           |         |            |           
|Operating activities:                                      |                                                                             |                                                            |                                           |                                           |           |         |            |           
|                                                           | Net loss                                                                    |                                                            | $                                         | (3,341,800                                | )         |         | $          | (1,974,600 | )        
|                                                           | Adjustments to reconcile net loss to net
cash used in operating activities: |                                                            |                                           |                                           |           |         |            |            |          
|                                                           |                                                                             | Provision for doubtful accounts                            |                                           |                                           | 121,804   |         |            |            | 20,906    |         
|                                                           |                                                                             | Depreciation and amortization                              |                                           |                                           | 261,538   |         |            |            | 249,874   |         
|                                                           |                                                                             | Common stock issued for services, bonuses and
compensation |                                           |                                           | 1,413,787 |         |            |            | 1,276,403 |         
|                                                           |                                                                             | Changes in operating assets and liabilities:               |                                           |                                           |           |         |            |            |           |         
|                                                           |                                                                             |                                                            | Accounts receivable                       |                                           |           | (60,279 | )          |            |           | (149,974 | )       
|                                                           |                                                                             |                                                            | Inventories                               |                                           |           | 66,649  |            |            |           | 135,578  |         
|                                                           |                                                                             |                                                            | Prepaid expenses and other current assets |                                           |           | 96,978  |            |            |           | (159,316 | )       
|                                                           |                                                                             |                                                            | Other assets                              |                                           |           | (35,981 | )          |            |           |          |         
|                                                           |                                                                             |                                                            | Accounts payable                          |                                           |           | 127,355 |            |            |           | (16,611  | )       
|                                                           |                                                                             |                                                            | Accrued expenses                          |                                           |           | 15,197  |            |            |           | (12,690  | )       
|                                                           |                                                                             |                                                            | Deferred license fees                     |                                           |           | 172,000 |            |            |           | (32,985  | )       
|                                                           |                                                                             |                                                            |                                           |                                           |           |         |            |           
|                                                           |                                                                             |                                                            |                                           | Net cash used in operating activities     |           |         | (1,162,752 | )          |           |          | (663,415 | )
|                                                           |                                                                             |                                                            |                                           |                                           |           |         |            |           
|Investing activities  purchases of property and
equipment |                                                                             |                                                            | (37,298                                   | )                                         |           |         | (53,437    | )         
|                                                           |                                                                             |                                                            |                                           |                                           |           |         |            |           
|Financing activities:                                      |                                                                             |                                                            |                                           |                                           |           |         |            |           
|                                                           | Advances from related party                                                 |                                                            |                                           | 244,238                                   |           |         |            | 260,844    |          
|                                                           | Payments of advances from related party                                     |                                                            |                                           | (70,201                                   | )         |         |            |            |          
|                                                           | Payments of capital lease obligation                                        |                                                            |                                           | (1,259                                    | )         |         |            |            |          
|                                                           | Proceeds from sales of common stock                                         |                                                            |                                           | 854,565                                   |           |         |            | 612,553    |          
|                                                           |                                                                             |                                                            |                                           |                                           |           |         |            |           
|                                                           |                                                                             |                                                            |                                           | Net cash provided by financing activities |           |         | 1,027,343  |            |           |          | 873,397  |  
|                                                           |                                                                             |                                                            |                                           |                                           |           |         |            |           
|Net increase (decrease) in cash and cash equivalents       |                                                                             |                                                            | (172,707                                  | )                                         |           |         | 156,545    |           
|Cash and cash equivalents at beginning of year             |                                                                             |                                                            | 175,157                                   |                                           |           |         | 18,612     |           
|                                                           |                                                                             |                                                            |                                           |                                           |           |         |            |           
|Cash and cash equivalents at end of year                   |                                                                             | $                                                          | 2,450                                     |                                           |           | $       | 175,157    |           
|                                                           |                                                                             |                                                            |                                           |                                           |           |         |            |           
|Supplemental disclosure of noncash activities:             |                                                                             |                                                            |                                           |                                           |           |         |            |           
|                                                           | Acquisition of equipment under capital lease obligations                    |                                                            | $                                         | 35,491                                    |           |         |            |            |          
|                                                           |                                                                             |                                                            |                                           |                                           |           |         |            |           
|                                                           | Transfer of inventory to leased assets                                      |                                                            | $                                         | 84,000                                    |           |         |            |            |          
|                                                           |                                                                             |                                                            |                                           |                                           |           |         |            |           
|                                                           | Common stock issued in payment of related party advances                    |                                                            | $                                         | 142,200                                   |           |         | $          | 250,000    |          
|                                                           |                                                                             |                                                            |                                           |                                           |           |         |            |           

See Notes to Consolidated Financial Statements.



F-6



---



##### Table of Contents






WORLD TRANSPORT AUTHORITY, INC. AND SUBSIDIARIES
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1  Business and summary of significant accounting policies:

Business activities:

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | World Transport Authority, Inc. (the Parent) was incorporated in
the Province of British Columbia pursuant to the Alberta Business
Corporations Act in January 1996 and was named Composite Automobile
Research, Ltd. until September 1, 2000. The Parent is a holding
company with two wholly-owned operating subsidiaries, World
Transport Authority, Inc. (WTA) and World Star Logistics, Inc.
(WSL) that were incorporated in the State of Nevada on March 5,
1996 and May 15, 2000, respectively. The Parent, WTA and WSL are
referred to collectively herein as the Company.

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | WTA is in the business of designing vehicles and selling master
licenses to others for the production of vehicles in specific
countries or regions around the world. The master licensees are
responsible for selling, manufacturing and distribution licenses
for individual factories throughout their country or region and
providing all support for each factory. WSL, which commenced
operations in May 2000, sells manufactured vehicle components to
established manufacturing and distribution facilities. In
addition, the Company may receive royalty payments based on the
production and/or sale of vehicles and from sales of licenses to
build and sell manufacturing plants.

Principles of consolidation:

| |                                                                                                                                                                                                  
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The accompanying consolidated financial statements include the
accounts of the Parent, WTA and WSL. All significant intercompany
accounts and transactions have been eliminated in consolidation.

Use of estimates:

| |                                                                                                                                                                                                                                                                                                             
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The preparation of financial statements in conformity with
accounting principles generally accepted in the United States of
America requires management to make estimates and assumptions that
affect certain reported amounts and disclosures. Accordingly,
actual results may differ from those estimates.

Cash and cash equivalents:

| |                                                                                                                              
| | -----------------------------------------------------------------------------------------------------------------------------
| | The Company considers all highly-liquid investments with an
original maturity of three months or less to be cash equivalents.

Inventories:

| |                                                                                                                         
| | ------------------------------------------------------------------------------------------------------------------------
| | Inventories are stated at the lower of cost or market. Cost is
determined using the first-in, first-out (FIFO) method.

Property and equipment:

| |                                                                                                                                              
| | ---------------------------------------------------------------------------------------------------------------------------------------------
| | Property and equipment are stated at cost and are depreciated over
their estimated useful lives of five years using the straight-line
method.

| |                                                                                                                                                                           
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Leasehold improvements are amortized using the straight-line method
over the shorter of the estimated useful life of the asset or the
remaining term of the related lease.



F-7



---



##### Table of Contents



WORLD TRANSPORT AUTHORITY, INC. AND SUBSIDIARIES
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1  Business and summary of significant accounting policies (continued):

Advertising and marketing costs:

| |                                                                                                                                                                                             
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The Company expenses the cost of advertising and marketing as
incurred. Advertising and marketing costs charged to operations in
2001 and 2000 amounted to $1,492 and $47,718, respectively.

Income taxes:

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The Company accounts for income taxes pursuant to the asset and
liability method which requires deferred income tax assets and
liabilities to be computed for temporary differences between the
financial statement and tax bases of assets and liabilities that
will result in taxable or deductible amounts in future periods
based on enacted laws and rates applicable to the periods in which
the temporary differences are expected to affect taxable income.
Valuation allowances are established when necessary to reduce
deferred tax assets to the amount expected to be realized. The
income tax provision or credit is the tax payable or refundable for
the period plus or minus the change during the period in deferred
tax assets and liabilities.

Revenue recognition:

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Generally, a manufacturing and distribution license holder is
required to pay its master license fee by remitting a specified
percentage of each manufacturing and distribution license fee to
the Company. As a result of the uncertainties related to the
realization of such fees, revenues from the sale of a master
license are recognized when the Company receives the specified
percentage payment from the master license holder upon the sale of
a manufacturing and distribution license, and the Company has
provided substantially all of the factory components and training
sufficient to enable the licensee to begin vehicle production.
|
| | Sales of manufactured vehicle components are recognized upon
shipment of the components. Royalty payments based on the
production and/or sale of vehicles will be recognized when earned.
Revenues from sales of licenses to build and sell manufacturing
plants will be recognized upon completion and shipment of the
manufacturing plants by the licensee.                                                                                                                                                                                                                                                                                            
|
| | Revenues derived in 2001 related to manufactured vehicle component
sales and royalties from existing licensees in Colombia and the
Philippines. All of the revenues recognized in 2000 were
attributable to the specified percentage payments of master license
fees resulting from sales of manufacturing and distribution
licenses in geographical regions of Colombia and the Philippines
and from sales of manufactured vehicle components.                                                                                                                                                                                                          



F-8



---



##### Table of Contents



WORLD TRANSPORT AUTHORITY, INC. AND SUBSIDIARIES
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1  Business and summary of significant accounting policies (concluded):

Earnings (loss) per share:

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Basic earnings (loss) per common share is calculated by dividing
net income or loss by the weighted average number of common shares
outstanding during each period. Diluted per share amounts have not
been presented in the accompanying consolidated statements of
operations because the Company did not have any potentially
dilutive securities outstanding during 2001 and 2000. The weighted
average number of common shares outstanding during each period has
been retroactively adjusted for a 4 for 1 split that became
effective on August 31, 2000.

Impairment of long-lived assets:

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Impairment losses on long-lived assets are recognized when events
or changes in circumstances indicate that the undiscounted cash
flows estimated to be generated by such assets are less than their
carrying value and, accordingly, all or a portion of such carrying
value may not be recoverable. Impairment losses are then measured
by comparing the fair value of assets to their carrying amounts. No
impairment losses were recorded in 2001 and 2000.

Note 2  Basis of presentation:

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | As shown in the accompanying financial statements, the Company had net
losses of $3,341,800 and $1,974,600 and net cash used in operating
activities of $1,162,752 and $663,415 in 2001 and 2000, respectively.
Management cannot determine whether the Company will become profitable
and whether operating activities will begin to generate cash. If
operating activities continue to use substantial amounts of cash, the
Company will need additional financing. These matters raise
substantial doubt about the ability of the Company to continue as a
going concern.                                                                                                                                                                                                             
|
| | Historically, the Company has funded its operations through sales of
common stock to private investors and borrowings from a stockholder.
Management plans to obtain the funds needed to enable the Company to
continue as a going concern through the private sales of common stock
and sales of master licenses and manufacturing and distribution
licenses. However, management cannot provide any assurance that the
Company will be successful in consummating any private sales of common
stock or generating sufficient sales of master and manufacturing and
distribution licenses.                                                                                                                                                                                              
|
| | The accompanying consolidated financial statements have been prepared
assuming the Company will continue as a going concern which
contemplates continuity of operations, realization of assets and
satisfaction of liabilities in the ordinary course of business. If
the Company is unable to raise additional capital or generate sales of
licenses it may be required to liquidate assets or take actions which
may not be favorable to the Company in order to continue operations.
The accompanying consolidated financial statements do not include any
adjustments related to the recoverability and classification of assets
or the amounts and classification of liabilities that might be
necessary should the Company be unable to continue its operations as a
going concern.



F-9



---



##### Table of Contents



WORLD TRANSPORT AUTHORITY, INC. AND SUBSIDIARIES
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 3  Credit risk:

| |                                                                                                                                                                                                                                                                                                                                                                            
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The Company maintains all of its cash balances in two financial
institutions. At times, these balances exceed the Federal Deposit
Insurance Corporation limitation for coverage of $100,000 thereby
exposing the Company to credit risk. Exposure to credit risk is
reduced by placing such deposits with major financial institutions and
monitoring their credit ratings.

Note 4  Inventories:

Inventories consisted of the following at June 30, 2001 and 2000:

|                |        |   |        |        |      |   |         |         | 
|--------------- | ------ | - | ------ | ------ | ---- | - | ------- | ------- | 
|                |        |   | 2001   |        | 2000
|                |        |   |        |        |     
|Raw materials   |        |   |        |        |      | $ | 43,785  |        
|Work in process |        |   |        |        |      |   | 55,451  |        
|Finished goods  |        | $ | 82,468 |        |      |   | 133,881 |        
|                |        |   |        |        |      |   |         |        
|                | Totals |   | $      | 82,468 |      |   | $       | 233,117 | 
|                |        |   |        |        |      |   |         |        

Note 5  Property and equipment, net:

| |                                                                             
| | ----------------------------------------------------------------------------
| | Property and equipment at June 30, 2001 and 2000 consisted of the following:

|                                               |        |   |         |           |      |   |         |           | 
|---------------------------------------------- | ------ | - | ------- | --------- | ---- | - | ------- | --------- | 
|                                               |        |   | 2001    |           | 2000
|                                               |        |   |         |           |     
|Molds                                          |        | $ | 898,419 |           |      | $ | 898,419 |          
|Demo equipment and vehicles                    |        |   | 287,585 |           |      |   | 270,950 |          
|Machinery and equipment                        |        |   | 121,311 |           |      |   | 120,968 |          
|Office furniture and equipment                 |        |   | 44,047  |           |      |   | 28,997  |          
|Leasehold improvements                         |        |   | 15,884  |           |      |   | 10,615  |          
|Leased equipment                               |        |   | 119,491 |           |      |   |         |          
|                                               |        |   |         |           |      |   |         |          
|                                               | Totals |   |         | 1,486,737 |      |   |         | 1,329,949 | 
|Less accumulated depreciation and amortization |        |   | 970,759 |           |      |   | 709,222 |          
|                                               |        |   |         |           |      |   |         |          
|Property and equipment, net                    |        | $ | 515,978 |           |      | $ | 620,727 |          
|                                               |        |   |         |           |      |   |         |          

Note 6  Lease commitments:

| |                                                                                                                                                                                                                                                                                                                                                                                
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The Company leases office facilities and equipment under operating
leases that expire on various dates through July 2005. The office
facility lease also requires the payment of the Companys pro rata
share of the real estate taxes and insurance, maintenance and other
operating expenses related to the facilities. Rent expense was
$98,495 in 2001 and $95,044 in 2000.



F-10



---



##### Table of Contents



WORLD TRANSPORT AUTHORITY, INC. AND SUBSIDIARIES
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 6  Lease commitments (concluded):

| |                                                                                                                                           
| | ------------------------------------------------------------------------------------------------------------------------------------------
| | Future minimum rental commitments under the operating leases in each
of the five years subsequent to June 30, 2001 approximate as follows:

|            |       |        |         |         | 
|----------- | ----- | ------ | ------- | ------- | 
|Year Ending |       |        |         |        
|June 30,    |       | Amount
|            |       |       
|2002        |       | $      | 135,000 |        
|2003        |       |        | 68,000  |        
|2004        |       |        | 57,000  |        
|2005        |       |        | 46,000  |        
|2006        |       |        | 1,000   |        
|            |       |        |         |        
|            | Total |        | $       | 307,000 | 
|            |       |        |         |        

Note 7  Capital lease:

| |                                                                                                                                                                                                          
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The Company leases equipment and furniture under a capital lease that
requires monthly payments through July 2006. The equipment has a cost
of $35,491 and associated accumulated depreciation of $1,775.

| |                                                                                                           
| | ----------------------------------------------------------------------------------------------------------
| | Future minimum lease payments under the capital lease in years
subsequent to June 30, 2001 are as follows:

|                                        |       |        |        |        | 
|--------------------------------------- | ----- | ------ | ------ | ------ | 
|Year Ending                             |       |        |        |       
|June 30,                                |       | Amount
|                                        |       |       
|2002                                    |       | $      | 9,850  |       
|2003                                    |       |        | 9,850  |       
|2004                                    |       |        | 9,850  |       
|2005                                    |       |        | 9,850  |       
|2006                                    |       |        | 7,387  |       
|                                        |       |        |        |       
|                                        | Total |        |        | 46,787 | 
|Less amounts representing interest      |       |        | 12,555 |       
|                                        |       |        |        |       
|Present value of minimum lease payments |       |        | 34,232 |       
|Less current portion                    |       |        | 5,487  |       
|                                        |       |        |        |       
|Long-term portion                       |       | $      | 28,745 |       
|                                        |       |        |        |       

Note 8  Equipment lease:

| |                                                                                                                                                                                                                                                          
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The Company leases automobile equipment and tools to the licensee of
the manufacturing and distribution facility in the Philippines. The
lease term is through March 2005, and requires monthly installments of
$1,750 due at the inception of the month.



F-11



---



##### Table of Contents



WORLD TRANSPORT AUTHORITY, INC. AND SUBSIDIARIES
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 8  Equipment lease (concluded):

| |                                                                                                                           
| | --------------------------------------------------------------------------------------------------------------------------
| | Future minimum rental payments to be received under the lease in years
subsequent to June 30, 2001 approximate as follows:

|            |       |        |        |        | 
|----------- | ----- | ------ | ------ | ------ | 
|Year Ending |       |        |        |       
|June 30,    |       | Amount
|            |       |       
|2002        |       | $      | 21,000 |       
|2003        |       |        | 21,000 |       
|2004        |       |        | 21,000 |       
|2005        |       |        | 15,800 |       
|            |       |        |        |       
|            | Total |        | $      | 78,800 | 
|            |       |        |        |       

Note 9  Income taxes:

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | As of June 30, 2001, the Company had net operating loss carryforwards
available for Federal income tax purposes of approximately
$11,600,000, which expire at various dates through 2021. There were
no other significant temporary differences as of that date. Due to
the uncertainties related to, among other things, the extent and
timing of its future taxable income, the Company has offset the
deferred tax assets attributable to the potential benefits of
approximately $3,900,000 from the net operating loss carryforwards by
an equivalent valuation allowance at June 30, 2001. The Company had
also offset the potential benefits of approximately $2,810,000 from
net operating loss carryforwards by an equivalent valuation allowance
at June 30, 2000. As a result of the increase in the valuation
allowance of $1,090,000 and $688,000 during 2001 and 2000,
respectively, no credit for income taxes is included in the
accompanying consolidated statements of operations.

Note 10- Related party transactions and balances:

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | A stockholder made noninterest bearing advances to the Company of
$244,238 and $260,844 during 2001 and 2000, respectively. The Company
repaid advances made by the stockholder through the issuance of
750,519 shares of common stock with fair market values ranging from
$.16 to $.22 and an aggregate fair value of $142,200 during 2001, and
through the issuance of 5,473,328 shares of common stock with fair
market values ranging from $.04 to $.30 and an aggregate fair value of
$250,000 during 2000. The issuances of the shares to reduce debt were
noncash transactions that are not reflected in the accompanying
consolidated statements of cash flows.

| |                                                                                                                                          
| | -----------------------------------------------------------------------------------------------------------------------------------------
| | During 2001 and 2000, the Company also issued shares of common stock
to pay for services performed by the same stockholder (see Note 11).

| |                                                                                                                                                                                                                                                                                                                                             
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The Company had a payable to a stockholder of $9,654 at June 30, 2001
and a receivable from the same stockholder of $22,183 at June 30,
2000, attributable to the differences in advances from amounts paid in
cash and through the issuance of shares to the stockholder. The
amounts are unsecured, noninterest bearing and due on demand.



F-12



---



##### Table of Contents



WORLD TRANSPORT AUTHORITY, INC. AND SUBSIDIARIES
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 11- Common stock:

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The accompanying consolidated financial statements and these notes
have been retroactively restated to reflect the effects of a 4 for 1
stock split effective August 31, 2000.                                                                                                                                                                                                                                                                                                                                                                                                                     
|
| | During the year ended June 30, 2001, the Company sold or completed the
sale of 3,431,110 shares of common stock at prices ranging from $.15 to
$.42 per share to private investors and received proceeds of $854,565.                                                                                                                                                                                                                                                                                                                                                                              
|
| | During the year ended June 30, 2001, the Company issued 1,396,099
shares of common stock at times when the market prices ranged from
$.15 to $.44 per share to consultants and other organizations for
various services it received. In addition, the Company issued 138,768
shares of common stock at times when the market prices ranged from
$.22 to $.54 per share to various employees as compensation. Charges
to expense attributable to consulting and other services received and
to employee compensation arising from these issuances amounted to
$457,058 and $45,479, respectively.   
|
| | During the year ended June 30, 2001, the Company also issued 2,916,000
shares of common stock at the fair market price of $.3125 per share to
a stockholder for services performed. Compensation expense associated
with this issuance amounted to $911,250.                                                                                                                                                                                                                                                                                                                                       
|
| | During the year ended June 30, 2000, the Company sold or completed the
sale of 4,530,856 shares of common stock at prices ranging from $.04
to $.53 per share to private investors and received proceeds of
$612,553.                                                                                                                                                                                                                                                                                                                                                                              
|
| | During the year ended June 30, 2000, the Company issued 11,344,300
shares of common stock at times when the market prices ranged from
$.04 to $.28 per share to consultants and other organizations for
various services it received. In addition, the Company issued 288,000
shares of common stock at times when the market prices ranged from
$.04 to $.31 per share to various employees as compensation. Charges
to expense attributable to consulting and other services received and
to employee compensation arising from these issuances amounted to
$1,008,291 and $41,150, respectively.
|
| | During the year ended June 30, 2000, the Company also issued 4,868,432
shares of common stock at times when the market prices ranged from
$.04 to $.09 per share to stockholders for services performed.
Compensation expense associated with this issuance amounted to
$226,962.                                                                                                                                                                                                                                                                                                                  

*    *    *



F-13