U.S. Securities and Exchange Commission
                             Washington, D.C. 20549

                                   FORM 10-KSB



[X]     ANNUAL  REPORT  UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
        OF  1934  for  the  period  ended  June  30,  2001

[ ]     TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
        ACT  OF  1934  for  the  transition  period  from  _______  to  _______

COMMISSION  FILE  NUMBER:  000-05391

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


          Nevada                              83-0210365
     -----------                              ----------
(State  or  other  jurisdiction  of    (IRS Employer identification
incorporation  or  organization)                    No.)


                      819 Naff Road, Boones Mill, VA 24065
                      ------------------------------------
                    (Address of principal executive offices)

                                 (540) 334-4294
                                 --------------
                           (Issuer's telephone number)

      Securities registered pursuant to Section 12(b) of the Exchange Act:

                                      None

      Securities registered pursuant to Section 12(g) of the Exchange Act:

                      $0.001 Par Value Common Voting Stock
                                (Title of Class)


Check whether the issuer (1) filed all reports required to be filed by Section13
or  15(d)  of  the  Exchange  Act during the past 12 months (or for such shorter
period  that the registrant was required to file such reports), and (2) has been
subject  to  such  filing  requirements  for  the  past  90  days.
Yes  [X]  No[  ]

Check  if there is no disclosure of delinquent filers in response to Item 405 of
Regulation  S-B  contained in this form, and no disclosure will be contained, to
the  best  of  registrant's  knowledge,  in  definitive  proxy  or  information
statements  incorporated  by  reference  in  Part  III of this Form 10-KSB or an
amendment  to  this  Form  10-KSB.  [x]

State  issuer's  net  revenues  for  its  most  recent  fiscal  year: $1,558,807

As of September 24, 2001 there were 11,757,883 common shares outstanding and the
aggregate  market  value of the common shares (based upon the average of the bid
price  ($1.80)  reported  by  brokers), held by non-affiliates was approximately
$21,164,189. Transitional Small Business Disclosure Format (check one): Yes [  ]
No[X]

Number  of  shares  of  common  stock  outstanding  as  of  September  24, 2001:
11,757,883

Number  of  shares  of preferred stock outstanding as of September 24, 2001: N/A












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

















                                     PART I
                                     ------

SPECIAL  NOTE  REGARDING  FORWARD-LOOKING  STATEMENTS
-----------------------------------------------------

 This  periodic  report  contains  certain forward-looking statements within the
meaning  of the Private Securities Litigation Reform Act of 1995 with respect to
the  financial  condition, results of operations, business strategies, operating
efficiencies  or  synergies,  competitive  positions,  growth  opportunities for
existing  products,  plans  and  objectives  of
management. Statements in this periodic report that are not historical facts are
hereby  identified  as  "forward-looking statements" for the purpose of the safe
harbor  provided  by  Section  21E  of  the  Exchange Act and Section 27A of the
Securities  Act.

Item  1.  Business

Business  Development
---------------------

The  Company was incorporated under the laws of the State of Wyoming on June 19,
1969.  Following  an  involuntary  dissolution  for  failure  to  file an annual
report, the Company was reinstated as a Wyoming Corporation on October 14, 1999.
Thereafter,  on  January  28,  2000, the Company, through a majority shareholder
vote, changed its domicile to Nevada through a merger with EMC Energies, Inc., a
Nevada corporation.  The Plan of Merger provided for the dissenting shareholders
to be paid the amount, if any, to which they would be entitled under the Wyoming
Corporation Statutes with respect to the rights of dissenting shareholders.  The
Company  also changed its par value to $.001 and the amount of authorized common
stock  to  100,000,000.

Prior  to  1990,  the  Company  was engaged in the business of exploring for and
producing  oil  and  gas  in  the  Rocky Mountain and Mid-Continent areas of the
United  States.  The Company liquidated substantially all of its assets in 1990,
and  was  dormant  until  June 30, 2000, when it acquired, in a stock-for-stock,
tax-free  exchange,  all  of  the  outstanding  common stock of a privately held
Virginia  corporation,  Metwood, Inc., which was incorporated in 1993.  See Form
8-K and attached exhibits, filed August 11, 2000.  Metwood has been in the metal
and  metal/wood  construction  materials  manufacturing  business  since  1992.
Following the acquisition, the Company approved a name change from EMC Energies,
Inc.  to  Metwood,  Inc.

Principal  Products  or  Services  and  Markets
-----------------------------------------------

Residential  builders  are  aware  of  the superiority of steel framing vs. wood
framing,  insofar  as steel framing is lighter, stronger, termite, pest, rot and
fire  resistant,  and  dimensionally  more  stable  to  withstand induced loads.
Although  use  of  steel  framing  in  residential  construction  has  generally
increased  each year since 1980, many residential builders have been hesitant to
utilize  steel,  due  to  the need to retrain framers and subcontractors who are
accustomed  to a "stick built" construction method where components are laid out
and  assembled  with  nails  and  screws.  The Company's founders, Robert (Mike)
Callahan and Ronald Shiflett saw the need to combine the strength and durability
of  steel  with  the  convenience  and  familiarity  of wood and wood fasteners.

The  Company  manufactures  light  gage  steel  construction  materials, usually
combined  with  wood  or  wood  fasteners, for use in residential and commercial
applications, in place of more conventional wood products, which are inferior in
terms  of  strength  and  durability.  The  steel  and steel/wood products allow
structures  to  be  built with increased load strength and structural integrity,
and  fewer  support  beams  or  support  configurations,  thereby  allowing  for
structural  designs  that  are  not  possible  with  wood-only  products.

Its  primary  products  and  services  are:

     Girders  and  headers;
     Floor  joists;
     Floor  joist  patch  kits
     Roof  and  floor  trusses;
     Garage,  deck  and  porch  kits
     Garage  and  post  and  beam  buildings
     Engineering,  design  and  custom  building  services

 Distribution  methods  of  the  products  or  services
-------------------------------------------------------

The  Company's  sales  are  primarily  retail,  directly  to  contractors  and
do-it-yourself  homeowners  in Virginia and North Carolina. Approximately 20% of
the  Company's  sales  are  wholesale  to  lumberyards, home improvement stores,
hardware  stores,  and  plumbing  and electrical suppliers in Virginia and North
Carolina.  The  Company  relies  on  its  own sales force for all outside sales.

Seasonality  of  market
-----------------------

The Company's sales are subject to seasonal impacts, as its products are used in
residential  and  commercial construction projects, which tend to be at a higher
building  rate  in  Virginia  and North Carolina between the months of March and
October.  Accordingly,  the  Company's sales are greater in its second and third
quarters.  The Company builds an inventory of its products throughout the winter
and  spring  to  support  this  sales  season.

Competition
-----------

Nationally,  there  are  over one hundred manufacturers of the types of products
produced  by  the  Company.  Approximately  10%  of  these manufacturers capture
approximately  80% of the market for these products.  In addition, most of these
manufacturers  are better financed than the Company, and therefore better poised
for  market  retention  and  expansion.  The  majority  of  these manufacturers,
however,  are using wood-only products, or products without metal reinforcement.
The  Company has identified only one other manufacturer in the western U.S. that
manufacturers  a  similar  wood-metal  floor  truss  to that of the Company. The
Company holds four separate patents on its products (see Patents section, below)
that  are  unique only to the Company. The Company intends to continue to expand
its  wholesale  marketing  of its unique products to companies such as Lowes and
Home  Depot,  and  to license the Company's technology and products, to increase
its  distribution  outside  of  Virginia,  North  Carolina  and  the  South.

Sources  and  availability of raw materials and the names of principal suppliers
--------------------------------------------------------------------------------

All of the raw materials used by the Company are readily available on the market
from  numerous  suppliers.  The light gage metal used by the Company is supplied
primarily  by  Dietrich  Industries.  The  Company's  main sources of lumber are
Unimast,  Lowes  and  84  Lumber  Company. Co-Steel supplies the majority of the
Company's  rebar  supply.  Because  of  the number of suppliers available to the
Company,  its  decision  in purchasing materials is dictated primarily by price,
and  secondarily  by  availability.  The  Company  does not anticipate a lack of
supply  to  ever  effect  its  production,  but  rather a shortage may cause the
Company  to  pass  on  higher  materials  prices  to  its  buyers.

Dependence  on  one  or  a  few  major  customers
-------------------------------------------------

 Presently  the Company does not have a customer, the loss of which would have a
substantial  impact  on  the  Company's  operations. As the Company continues to
expand  its  wholesale  sales  to  purchasers  such  as  Loews and Home Depot, a
substantial  impact  would  be  more  likely  should  such  a  customer be lost.

Patents,  trademarks,  licenses,  franchises, concessions, royalty agreements or
--------------------------------------------------------------------------------
labor  contracts,  including  duration
--------------------------------------

     The  Company  owns/licenses  four  U.S.  Patents:

     U.S.  Patent  No.  5,519,977, Joist Reinforcing Bracket, for a bracket that
reinforces  wooden  joists  provided  with  a  hole for the passage of a utility
conduit.  The  Company  refers to this as its floor joist patch kit. The Company
recently  had an independent appraisal done on the patent that is valued at $7.4
million.

     U.S.  Patent  No.  5,625,997,  Composite  Beam,  for  a composite beam that
includes  an  elongated metal shell and a pierceable insert for receiving nails,
screws  or  other  penetrating  fasteners.

     U.S.  Patent  No.  5,832,691,  Composite  Beam,  for  a composite beam that
includes  an  elongated metal shell and a pierceable insert for receiving nails,
screws  or  other penetrating fasteners.  This is a continuation-in-part of U.S.
Patent  No.  5,625,997.

     U.S.  Patent  No.  5,921,053,  Internally Reinforced Girder with pierceable
Nonmetal  Components,  for  a  girder  that  includes a pair of c-shaped members
secured  together  so  as  to  form a hollow box, which permits the girder to be
secured  within  a building structure with conventional fasteners such as nails,
screws  and  staples.  The Company recently had an independent appraisal done on
the  patent  that  is  valued  at  $13.8  million.

The  Company also has a patent pending on a modification of it floor joist patch
kit.  The  Company expects that this patent will be granted from the U.S. Patent
Office  within  the  next  twelve  months.

Each  of  these  patents  was  originally  issued  to  the inventors and Company
founders,  Robert  (Mike)  Callahan  and  Ronald B. Shiflett, who assigned these
patents  to  the  Company.

Need  for  any  government  approval  of  principal  products  or  services
---------------------------------------------------------------------------

The  Company's  products  must either be sold with their engineer's seal or they
must be approved by Bureau Officials Code Association (BOCA). Once BOCA approval
is  obtained, the products can be used recognized for approval in all 50 states.
The Company's floor joist patch kit received BOCA approval during April of 2001.
The  Company  expects this to greatly assist in the uniform acceptability of the
Company's  products  as  it  expands  to  new  markets.

Time  spent  during  the  last  two  fiscal  years  on  research and development
--------------------------------------------------------------------------------
activities
----------

Approximately  fifteen  percent  of  the  Company's time and resources have been
spent  during  the  last  two fiscal years researching and developing metal/wood
products.

Costs  and  effects  of  compliance  with  environmental  laws
--------------------------------------------------------------

None;  not  applicable.

Number  of  total  employees  and  number  of  full  time  employees
--------------------------------------------------------------------

The  Company has approximately twenty-one employees, all of which are full-time.


Item  2.  Properties

During  the  year  ended  June  30,  2000,  the Company purchased six commercial
buildings  on 8.124 acres of land and several buildings in Boones Mill Virginia,
seven  miles from Roanoke, Virginia. The buildings are used as corporate office,
manufacturing  and  warehouse  space.  The  purchase price was $388,000 of which
$288,000 was paid in cash and $100,000 worth of common stock of Metwood, Inc., a
Virginia  corporation,  at  a  value of $1.00 per common share through a private
placement  by  the  Virginia  Corporation.




Item  3.  Legal  Proceedings

The  Company  is  not  a party to any legal proceedings, nor, to the best of its
knowledge,  are  any  such  proceedings  threatened  or  contemplated.

Furthermore, to the knowledge of management, no director or executive officer is
party  to  any  action  in  which  any  has  an interest adverse to the Company.
Item  4.  Submission  of  Matters  to  a  Vote  of  Security  Holders

No  matter  was  submitted  to  a  vote  during  the  year.



                                     PART II
                                     -------

Item  5.  Market  for  the Registrant's Common Stock and Related Security Holder
Matters

(a)  Market  Information
------------------------

     For  five  years prior to September 2000, there was no  "public market" for
shares  of  common  stock of the Company. As a result of the acquisition between
EMC  Energies, Inc. and Metwood, Inc., a trading market has developed, but it is
not  an active trading market. It is therefore difficult to determine the market
value  of  the  stock.  Based  on the average bid price for the Company's Common
Stock at September 24, 2001, of $1.80 per share, the market value of shares held
by  non-affiliates  would  be  $21,164,189.  There  are  no  preferred  shares
authorized.

The  Company  is listed on the OTC Bulletin Board of the National Association of
Securities  Dealers  ("NASD")  under  the  symbol  "MTWD".

Set  forth  below are the high and low bid prices for the Company's Common Stock
for  the  last  year.

Quarter  Ended                       High  Bid     Low  Bid
--------------                       ---------     --------

September  2000  (thru  9/22/00)*     $5.00     $4.50
December  2000                        $4.75     $2.80
March  2001                           $3.25     $1.75
June  2001                            $2.50     $1.75

*  There  was  no  active  market  for  five  years  before  this  date.

Holders
-------

The  number  of record holders of the Company's common stock as of September 24,
2001,  was  1,107;  this  number  does  not  include  an indeterminate number of
stockholders  whose  shares  are  held  by brokers in street name. The number of
stockholders  has  been  substantially  the  same  during  the  past  ten years.

Dividends
---------

There are no present material restrictions that limit the ability of the Company
to  pay dividends on common stock or that are likely to do so in the future. The
Company  has  not  paid any dividends with respect to its common stock, and does
not  intend  to  pay  dividends  in  the  foreseeable  future.

Recent  Sales  of  Unregistered  Securities
-------------------------------------------

On  April  21,  1998,  the  Company's  wholly owned subsidiary, Metwood, Inc., a
Virginia  corporation,  authorized a Regulation D Private Placement of 1,000,000
shares  of  its  common stock at $1.00 per share. During the year ended June 30,
1999,  the  Company  collected  $60,000. During the year ended June 30, 2000, an
additional amount of $815,000 was collected and $125,000 of the Company's common
stock was exchanged for services and buildings and land, as set forth in Part I,
Item  2,  above.

Item  6.  Management's  Discussion  and  Analysis

Selected  Financial  Data
-------------------------

For  the  years  ended  June  30,  2001  and  2000.

                                           2001          2000
                                           ----          ----

     Revenues                              $1,558,807    $1,626,637

     Net  income                               22,413        76,708
     Net  income  per  common  share              **             **
     Weighted  average  common
      shares  outstanding                  11,621,166     7,445,279

**Less  than  $.01

At  June  30,  2001  and  2000

                                           2001          2000
                                           ----          ----

     Total  assets                        $1,204,868     $1,100,969
     Working  capital                        172,994        197,457
     Shareholders'  equity                 1,047,984      1,013,416

No  dividends  have  been  declared  or  paid  during  the  periods  presented.


Results  of  Operations
-----------------------

For  the  Years  Ended  June  30,  2001  and  2000.

Sales

Revenues  for  the year ended June 30, 2001 were $1,558,807 versus $1,626,637 in
revenues  for  the year ended June 30, 2000, a decrease of $67,830 or 4%. Retail
sales  consisted  of product sales, installation fees and product royalties. The
decrease  was  primarily  attributable  to  a  two  month 'down-time' during the
transition  into  the  newly  owned  facility  and  its  related  build  out.

Other  revenues included income from a legal settlement in the amount of $50,000
whereby  the  Company  was  compensated for use of its intellectual property and
$13,100  in  income  for  renting  a  portion  of  its  facilities.

We  plan to accelerate growth of sales in fiscal 2002 by increasing expenditures
on  marketing,  establishing  more  strategic  relationships  and growing public
awareness  of  our  products  and  services.

Income  /  Loss

Net  income  for  the  year ended June 30, 2001 was $22,413 as compared to a net
income  of $76,708 in the comparable period in 2000. We recognized a decrease of
gross  profit  of  $30,783  for  the year ended June 30, 2000 and an increase of
$75,091  in  expenses  as  detailed  below.

The Company expects to continue to remain profitable and increase its net income
over  the  next  year.  However,  there  can  be no assurance that the Company's
profitability  or  revenue  growth  can  be  sustained  in  the  future.

Expenses

Total expenses for the year ended June 30, 2001 were $718,737 versus $643,646 in
the  comparable  year  in  2000.  The following increases in expenses were noted
during  the  year  ended  June  30,  2001:
     Professional  fees  increased $29,872 due to maintaining active trading and
reporting status with the Securities and Exchange Commission during 2001 and the
issuances  of  $28,404  in  stock  for  professional  services.
     Salaries  increased  $44,506  from the cost of hiring and retaining quality
personnel  to  administer  our operations and market our products, however, this
was somewhat offset by a decrease of $35,277 in sales commissions that were paid
to  subcontractors  in  2000.
     Utilities  increased  $20,816 due to the Company operating out of its newly
'owned'  facility.  This  was  offset  by a decrease in rent expense of $19,950.
     Depreciation,  a  non-cash  expense,  increased  $12,490  due to additional
capital  equipment  acquisitions  and  property  improvements.

 We  anticipate incurring approximately the same amount of these expenses during
fiscal  2002.

     We  expect increases in certain expenses such as advertising through fiscal
2002  as  the  Company  moves toward increasing development and marketing of our
products  and  services.

Cost  of  Sales

One  of  the  largest  factors  in  the  variations  in  the  cost of sales as a
percentage  of  net  sales  is  the  cost  of  products.

Cost  of  sales for the year ended June 30, 2001 was $877,368 versus $914,415 in
the  comparable  period  in  2000.  The  decrease  was primarily attributable to
increased buying power for materials and a decrease in sales for the year. Gross
margins  and  product  prices  remained  relatively  constant  during  the year.

Impact  of  Inflation

We  believe  that inflation has had a negligible effect on operations during the
period.  We  believe  that  we  can offset inflationary increases in the cost of
sales  by  increasing  sales  and  improving  operating  efficiencies.

Trends,  Events,  and  Uncertainties

Demand  for  the  Company's  products  will be dependent on, among other things,
market  acceptance  of  the  Company's  concept, the quality of its products and
general  economic conditions, which are cyclical in nature.  Inasmuch as a major
portion of the Company's activities is the receipt of revenues from the sales of
its products, the Company's business operations may be adversely affected by the
Company's  competitors  and  prolonged  recessionary  periods.

Liquidity  and  Capital  Resources
----------------------------------

For  the  Year  Ended  June  30,  2001  and  2000.

Cash  flows  provided by operations were $5,416 for the year ended June 30, 2001
versus  $180,476  in  the  comparable  period in 2000. Cash flows from operating
activities  were  primarily  attributable  to  the  net  income from operations,
depreciation  and  service exchanged for stock, partially offset by increases in
inventory  and  accounts  receivable.


Cash  flows used in investing activities decreased $301,043 to $104,841 in 2001.
Cash used in investing activities in the comparable period in 2000 was $405,884.
The  decrease  was  primarily  attributable a decrease in fixed asset purchases.

Cash  flows  generated from financing activities were $33,751 for the year ended
June 30, 2001 versus $227,008 in the comparable period in 2000. The decrease was
primarily  attributable  to  proceeds  from  common stock issued during the year
2000. The Company used the $815,000 in proceeds toward fixed asset acquisitions,
gaining active trading status on the Over-the-Counter Bulletin Board and general
corporate  purposes.

We have funded our cash needs from inception through June 30, 2001 with a series
of  related  party,  debt  and  equity  transactions.

We  will  substantially  rely on the existence of revenue from the product sales
and  from  the projected revenues for our services. We project that we will have
enough  capital  to  fund  our  operations  over  the  next  12  months.

On  a  long-term  basis, liquidity is dependent on continuation and expansion of
operations,  receipt  of  revenues,  additional  infusions  of  capital and debt
financing.  We  are considering launching a wide scale marketing and advertising
campaign.  Our current available capital and revenues are not sufficient to fund
such  a  campaign.  If  we  choose  to  launch  such  a campaign it well require
substantially more capital.  If necessary, we plan to raise this capital through
an  additional  follow-on  stock  offering.  The funds raised from this offering
will  be  used  to  develop  and execute the marketing and advertising strategy,
which  may include the use of television, radio, print and Internet advertising.
However,  there  can  be  no assurance that we will be able to obtain additional
equity  or  debt  financing in the future, if at all.  If we are unable to raise
additional  capital,  our  growth  potential  will  be  adversely  affected.
Additionally,  we  will  have  to  significantly  modify  our  plans.

















Item  7.  Financial  Statements

                          INDEPENDENT AUDITORS' REPORT
                          ----------------------------

To  the  Board  of  Directors
Metwood,  Inc.
819  Naff  Road
Boones  Mill,  Virginia  24065

We have audited the accompanying consolidated balance sheet of Metwood, Inc. and
its  wholly-owned  subsidiary  as  of June 30, 2001 and the related consolidated
statements  of  income, stockholders' equity, and cash flows for the years ended
June 30, 2001 and June 30, 2000. These consolidated financial statements are the
responsibility  of the Company's management. Our responsibility is to express an
opinion  on  these  consolidated  financial  statements  based  on  our  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  audits  to obtain reasonable assurance about whether the financial
statements  are free from 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  consolidated  financial  position of
Metwood,  Inc.  as  of  June  30,  2001,  and  the  consolidated  results of its
operations  and  its  cash  flows for the years ended June 30, 2001 and June 30,
2000  in  conformity with accounting principles generally accepted in the United
States  of  America.





/s/  Bongiovanni  &  Associates
-------------------------------
August  25,  2001








<TABLE>
<CAPTION>


                    METWOOD, INC. AND WHOLLY OWNED SUBSIDIARY
                           CONSOLIDATED BALANCE SHEET
                                  JUNE 30, 2001

ASSETS
------


<S>                                            <C>

CURRENT ASSETS
---------------------------------------------
  Cash and Cash Equivalents - Note C. . . . .  $   25,924
  Accounts Receivable . . . . . . . . . . . .     158,113
  Inventory . . . . . . . . . . . . . . . . .     142,031
                                               -----------
    TOTAL CURRENT ASSETS. . . . . . . . . . .     326,068
                                               -----------

FIXED ASSETS
---------------------------------------------
  Land - Note G . . . . . . . . . . . . . . .      88,000
  Buildings and Improvements - Note G . . . .     631,536
Machinery and Equipment - Note G. . . . . . .     284,296
Accumulated Depreciation. . . . . . . . . . .    (125,032)
                                               -----------
    Net Fixed Assets. . . . . . . . . . . . .     878,800
                                               -----------

TOTAL ASSETS. . . . . . . . . . . . . . . . .  $1,204,868
                                               ===========


LIABILITIES AND STOCKHOLDERS' EQUITY
---------------------------------------------

CURRENT LIABILITIES
---------------------------------------------
  Accounts Payable and Accrued Expenses . . .  $  101,584
  Income Taxes Currently Payable - Note J . .       1,490
  Bank Line of Credit - Note F. . . . . . . .      50,000
                                               -----------
    TOTAL CURRENT LIABILITIES . . . . . . . .     153,074
                                               -----------

LONG-TERM LIABILITIES
---------------------------------------------
  Deferred Income Tax Credit - Note J . . . .       3,810
                                               -----------

COMMITMENT - NOTES F, H
---------------------------------------------

STOCKHOLDERS' EQUITY - NOTE G
---------------------------------------------
  Common Stock ($.001 par value, 100,000,000
  common shares authorized; 11,757,883
  issued and outstanding) . . . . . . . . . .      11,757
  Additional Paid in Capital. . . . . . . . .   1,043,797
  Retained Deficit. . . . . . . . . . . . . .      (7,570)
                                               -----------
      TOTAL STOCKHOLDERS' EQUITY. . . . . . .   1,047,984
                                               -----------

    TOTAL LIABILITIES AND
    STOCKHOLDERS' EQUITY. . . . . . . . . . .  $1,204,868
                                               ===========

</TABLE>



  See notes to consolidated audited financial statements and auditors' report.

<TABLE>
<CAPTION>


                    METWOOD, INC. AND WHOLLY OWNED SUBSIDIARY
                      CONSOLIDATED STATEMENTS OF OPERATIONS
               FOR THE YEARS ENDED JUNE 30, 2001 AND JUNE 30, 2000
               ===================================================

<S>                                 <C>          <C>
                                        2001          2000
                                        ----          ----
REVENUE AND COST OF SALES
----------------------------------

  Sales. . . . . . . . . . . . . .  $1,558,807   $1,626,637
  Cost of Sales. . . . . . . . . .    (877,368)    (914,415)
                                    -----------  -----------
  GROSS PROFIT . . . . . . . . . .     681,439      712,222

OPERATING EXPENSES - NOTE E
----------------------------------

  Professional Fees - Note G . . .  $   85,368   $   55,496
  Salaries . . . . . . . . . . . .     276,032      231,526
  Insurance. . . . . . . . . . . .      42,648       24,334
  Rent - Note H. . . . . . . . . .         850       20,800
  Telephone. . . . . . . . . . . .      12,011       12,424
  Utilities. . . . . . . . . . . .      23,555        2,739
  Repairs and Maintenance. . . . .      46,668       37,723
  Depreciation . . . . . . . . . .      42,000       29,510
  Supplies . . . . . . . . . . . .      84,447       78,829
  Advertising. . . . . . . . . . .      50,045       41,416
  Vehicle Expense. . . . . . . . .       6,465        6,262
  Taxes and Licenses . . . . . . .      40,775       61,639
  Commissions. . . . . . . . . . .         679       35,956
  Uniforms . . . . . . . . . . . .       5,306        3,553
  Other. . . . . . . . . . . . . .       1,888        1,439
                                    -----------  -----------
  TOTAL EXPENSES . . . . . . . . .     718,737      643,646
                                    -----------  -----------

    INCOME (LOSS) FROM
CONTINUING OPERATIONS. . . . . . .  $  (37,298)  $   68,576

OTHER INCOME AND EXPENSE
----------------------------------

Lawsuit Settlement Income - Note K      50,000            -
Rental Income - Note K . . . . . .      13,100            -
Interest Expense - Notes D, F. . .      (1,430)           -
Interest Income. . . . . . . . . .       3,341        8,132
                                    -----------  -----------
</TABLE>




  See notes to consolidated audited financial statements and auditors' report.
  ----------------------------------------------------------------------------

<TABLE>
<CAPTION>


                    METWOOD, INC. AND WHOLLY OWNED SUBSIDIARY
                         CONSOLIDATED INCOME STATEMENTS
               FOR THE YEARS ENDED JUNE 30, 2001 AND JUNE 30, 2000
               ===================================================

<S>                                     <C>           <C>
                                        2001          2000
                                        ----          ----
NET INCOME BEFORE
INCOME TAX PROVISION                    $    27,713   $   76,708

    INCOME TAX PROVISION - NOTE J            (5,300)           -
                                        ------------  ----------

    NET INCOME                          $    22,413   $   76,708
                                        ============  ==========



NET INCOME PER COMMON SHARE
    BASIC & FULLY DILUTED . . . .       $      **     $      **
                                        ============  ===========


    WEIGHTED AVERAGE COMMON
    SHARES OUTSTANDING                    11,621,166    7,445,279
                                        ============  ==========

</TABLE>





**  Less  than  $.01.
---------------------















  See notes to consolidated audited financial statements and auditors' report.
  ----------------------------------------------------------------------------

<TABLE>
<CAPTION>


                    METWOOD, INC. AND WHOLLY OWNED SUBSIDIARY
                 CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
               FOR THE YEARS ENDED JUNE 30, 2001 AND JUNE 30, 2000
               ===================================================




<S>                                <C>     <C>        <C>           <C>
                                   Common  Common     Additional    Retained
                                   Shares  Stock       Paid-in      Earnings
                                   (000's)  ($)        Capital     (Deficit)
---------------------------------  ------  ---------  ------------  --------

Balances, June 30, 1999 . . . . .   6,860  $   6,860  $    59,940   $  40,658

Issuance of common stock -
Note G. . . . . . . . . . . . . .     940  $     940  $   939,060           -

Distributions to stockholders -
Note E. . . . . . . . . . . . . .       -          -            -   $(131,100)

Retroactive restatement
(recapitalization) of equity due
to reverse acquisition of public
shell, and related splits- Note A
                                    2,553  $   2,553  $    (2,553)          -

Issuance of common stock for
services rendered - Note G. . . .   1,000  $   1,000  $    19,350           -

Net income for year . . . . . . .       -          -           -    $  76,708
                                   ------  ---------  ------------  ----------

Balances, June 30, 2000 . . . . .  11,353  $  11,353  $ 1,015,797   $ (13,734)

Distributions to stockholders -
Note J. . . . . . . . . . . . . .       -  $       -  $         -   $ (16,249)

Issuance of common stock to
officers - Note G . . . . . . . .     400  $     400  $    20,000           -

Issuance of common stock for
services rendered - Note G. . . .       4  $       4  $     8,000           -

Net income for year . . . . . . .       -          -           -    $  22,413
                                   ------  ---------  ------------  ----------

Balances, June 30, 2001 . . . . .  11,757  $  11,757  $ 1,043,797   $  (7,570)
                                   =======  ========= ===========   ==========
</TABLE>





  See notes to consolidated audited financial statements and auditor's report.
  ----------------------------------------------------------------------------

<TABLE>
<CAPTION>


                                  METWOOD, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
               FOR THE YEARS ENDED JUNE 30, 2001 AND JUNE 30, 2000
               ===================================================


<S>                                                        <C>         <C>
                                                                2001        2000
                                                           ----------  ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
---------------------------------------------------------
  Net income. . . . . . . . . . . . . . . . . . . . . . .  $  22,413   $  76,708
  Adjustments to reconcile net income to
  net cash provided by operating activities:
  Depreciation. . . . . . . . . . . . . . . . . . . . . .     42,000      29,510
  Services exchanged for stock - Note G . . . . . . . . .     28,404      35,000
  Deferred income taxes - Note J. . . . . . . . . . . . .      3,810           -
(Increase) decrease in operating assets:
   Accounts receivable. . . . . . . . . . . . . . . . . .    (53,942)     12,528
   Inventory. . . . . . . . . . . . . . . . . . . . . . .    (57,290)     (5,943)
   Accrued interest receivable - Note E . . . . . . . . .      4,500      (4,500)
   Other current assets . . . . . . . . . . . . . . . . .          -       1,638
Increase in operating liabilities:
     Accounts payable, accrued expenses and taxes . . . .     15,521      35,535
                                                           ----------  ----------

  NET CASH PROVIDED BY
    OPERATING ACTIVITIES. . . . . . . . . . . . . . . . .      5,416     180,476
                                                           ----------  ----------

CASH FLOWS FROM INVESTING ACTIVITIES:
---------------------------------------------------------
(Cash paid for) return of deposit . . . . . . . . . . . .      8,250      (8,250)
Expenditures for fixed assets . . . . . . . . . . . . . .   (113,091)   (397,634)
                                                           ----------  ----------

    NET CASH USED IN
    INVESTING ACTIVITIES. . . . . . . . . . . . . . . . .   (104,841)   (405,884)
                                                           ----------  ----------

CASH FLOWS FROM FINANCING ACTIVITIES:
---------------------------------------------------------
Proceeds from issuance of common stock - Note G . . . . .  $       -   $ 815,000
Incurrence of notes receivable from stockholders - Note E          -    (300,000)
Repayment of stockholders loans payable - Note D. . . . .          -    (156,892)
Distributions to stockholders - Note E, J . . . . . . . .    (16,249)   (131,100)
Borrowing of bank line of credit - Note F . . . . . . . .     50,000           -
                                                           ----------  ----------

    NET CASH PROVIDED BY
    FINANCING ACTIVITIES. . . . . . . . . . . . . . . . .     33,751     227,008
                                                           ----------  ----------
</TABLE>





  See notes to consolidated audited financial statements and auditor's report.

<TABLE>
<CAPTION>


                                  METWOOD, INC.
                  CONSOLIDATED STATEMENTS OF CASH FLOWS (CONT.)
               FOR THE YEARS ENDED JUNE 30, 2001 AND JUNE 30, 2000
               ===================================================



<S>                                             <C>        <C>
                                                    2001       2000
                                                ---------  --------
  NET INCREASE (DECREASE) IN CASH
  AND CASH EQUIVALENTS . . . . . . . . . . . .  $(65,674)  $  1,600
                                                ---------  --------

Cash and cash equivalents, beginning of period  $ 91,598   $ 89,998
                                                ---------  --------

    CASH AND CASH EQUIVALENTS,
    END OF PERIOD. . . . . . . . . . . . . . .  $ 25,924   $ 91,598
                                                ========   ========

SUPPLEMENTAL NON-CASH INVESTING AND
FINANCING ACTIVITIES:

Issuance of common stock for purchase of
buildings and land - Note G. . . . . . . . . .  $      -   $100,000
                                                ========   ========

Issuance of common stock for services
       received - Note G . . . . . . . . . . .  $      -   $ 25,000
                                                =========  ========

Issuance of common stock for legal
       services received - Note G. . . . . . .  $      -   $ 10,000
                                                =========  ========

Exchange of note receivable from
       stockholders for fixed assets - Note E.  $300,000   $      -
                                                =========  =========

Issuance of common stock for consulting
       services received - Note G. . . . . . .  $ 28,404   $      -
                                                =========  =========
</TABLE>






  See notes to consolidated audited financial statements and auditors' report.


                    METWOOD, INC. AND WHOLLY OWNED SUBSIDIARY
               CONSOLIDATED NOTES TO AUDITED FINANCIAL STATEMENTS
               FOR THE YEARS ENDED JUNE 30, 2001 AND JUNE 30, 2000
               ===================================================


NOTE  A  -  SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES
----------------------------------------------------------

Business  Activity - Metwood, Inc. (the Company) was organized under the laws of
------------------
the  State  of  Virginia  on  April  7,  1993.

Effective  June  30,  2000,  the  Company  entered  an  Agreement  and  Plan  of
Reorganization  to  acquire  the  majority  of the outstanding common stock of a
publicly held shell corporation. The acquisition resulted in a tax-free exchange
for  federal  and  state  income tax purposes. Upon acquisition, the name of the
shell corporation changed to Metwood, Inc. (a Nevada corporation). Metwood, Inc.
(a  Virginia  corporation)  became a wholly owned subsidiary of Metwood, Inc. (a
Nevada  corporation).  The  transaction  is accounted for as a reverse merger in
accordance  with  Accounting  Principles  Board  Opinion  No.  16  wherein  the
stockholders  of Metwood, Inc. (a Virginia corporation) retained the majority of
the  outstanding  common  stock  of  the  Company after the merger. The publicly
traded shell corporation did not have a material operating history over the past
several  years.

The  Company  provides  construction  related products and services primarily to
home  building customers located principally in and around the Roanoke, Virginia
area.

Basis  of  Presentation  -  The financial statements included herein include the
-----------------------
accounts  of  the  Metwood,  Inc.  on  a  consolidated basis, prepared under the
accrual  basis  of  accounting.


Accounts  Receivable  -  Accounts  receivable are charged to bad debt expense as
--------------------
they  are  deemed uncollectible based upon a periodic review of the accounts. No
bad  debt  expense  for  the  years  ended  June  30, 2001 and June 30, 2000 was
recorded.  At  June  30,  2001,  no  allowance  for doubtful accounts was deemed
necessary.

Credit  is  extended  to  customers  based  on  an evaluation of their financial
condition,  and  collateral is not required. The Company performs ongoing credit
evaluations  of  its  customers.

Fixed  Assets  - Fixed assets are recorded at cost and include expenditures that
-------------
substantially  increase the productive lives of the existing assets. Maintenance
and  repair  costs  are expensed as incurred. Depreciation is provided using the
straight-line  method.  Depreciation  of  fixed  assets  is  calculated over the
management  prescribed  recovery  periods  that  range  from  5  to  31  years.

When a fixed asset is disposed of, its cost and related accumulated depreciation
are  removed  from  the  accounts. The difference between undepreciated cost and
proceeds  from  disposition  is  recorded  as  a  gain  or  loss.

                    METWOOD, INC. AND WHOLLY OWNED SUBSIDIARY
               CONSOLIDATED NOTES TO AUDITED FINANCIAL STATEMENTS
               FOR THE YEARS ENDED JUNE 30, 2001 AND JUNE 30, 2000
               ===================================================

NOTE  A  -  SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES  (CONT.)
-------------------------------------------------------------------

Long-Lived  Assets  -  In  accordance  with Financial Accounting Standards Board
------------------
Statement of Financial Accounting Standard No.121 "Accounting for the Impairment
of  Long-Lived Assets and for Long-Lived Assets to be Disposed Of", the carrying
value of intangible assets and other long-lived assets is reviewed by management
on  a regular basis for the existence of facts or circumstances, both internally
and  externally,  that  may  suggest impairment. To date, no such impairment has
been  indicated.  Should  there  be  impairment  in the future, the Company will
recognize  the amount of the impairment based on discounted expected future cash
flows  from  the  impaired  assets.

Cash  and  Cash  Equivalents - For purposes of the Statements of Cash Flows, the
----------------------------
Company  considers  liquid investments with an original maturity of three months
or  less  to  be  cash  equivalents.

Management's  Use  of  Estimates  -  The  preparation of financial statements in
--------------------------------
conformity  with generally accepted accounting principles requires management to
make  estimates  and  assumptions that effect the reported amounts of assets and
liabilities,  disclosures  of  contingent  assets and liabilities at the date of
financial  statements  and  the reported amounts of revenues and expenses during
the  reporting  period.  Actual  results  could  differ  from  those  estimates.

Revenue  Recognition- Revenue is recognized when goods are shipped and earned or
--------------------
when  services are performed, provided collection of the resulting receivable is
probable.  If  any  material  contingencies  are present, revenue recognition is
delayed  until all material contingencies are eliminated. Further, no revenue is
recognized  unless  collection  of  the  applicable  consideration  is probable.

Income  Taxes  -  The  Company, with the consent of its stockholders, originally
-------------
elected  to be taxed under the sections of the federal and state income tax laws
which  provide  that,  in  lieu  of  corporation  income taxes, the stockholders
separately  accounted for their pro rata share of the Company's items of income,
deductions,  losses  and  credits.

Effective  on June 30, 2000, the Company lost its small business "S" corporation
election  due  to  the reverse merger with an unrelated publicly traded company.
Therefore, these financial statements do not include any provision for corporate
federal  or  state  income  taxes  for the year ended June 30, 2000. See further
explanation  in  this  Note  J  below.




                    METWOOD, INC. AND WHOLLY OWNED SUBSIDIARY
               CONSOLIDATED NOTES TO AUDITED FINANCIAL STATEMENTS
               FOR THE YEARS ENDED JUNE 30, 2001 AND JUNE 30, 2000
               ===================================================

NOTE  A  -  SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES  (CONT.)
-------------------------------------------------------------------

Income  Taxes (Cont.) -Since the loss of the Company's "S" corporation election,
---------------------
income  taxes  are  subsequently  provided  for  in accordance with Statement of
Financial  Accounting  Standards  No. 109 (SFAS No. 109), "Accounting for Income
Taxes."  A  deferred  tax  asset  or  liability is  recognized for all temporary
differences  between  financial  reporting and tax bases of the Company's assets
and  liabilities at enacted rates expected to be in effect when such amounts are
realized  or  settled.

Deferred tax assets are reduced by a valuation allowance when, in the opinion of
management,  it  is  more  likely  than  not  that,  some portion, or the entire
deferred tax asset will not be realized. Deferred tax assets and liabilities are
adjusted  for  the  effect  of  changes  in  tax  laws  and rates on the date of
enactment.

Net  Income per Common Share - Statement of Financial Accounting Standard (SFAS)
----------------------------
No.128  requires dual presentation of basic and diluted earnings per share (EPS)
with  a reconciliation of the numerator and denominator of the EPS computations.
Basic  earnings  per  share  amounts are based on the weighted average shares of
common stock outstanding. If applicable, diluted earnings per share would assume
the  conversion,  exercise or issuance of all potential common stock instruments
such  as  options,  warrants and convertible securities, unless the effect is to
reduce a loss or increase earnings per share. Accordingly, this presentation has
been  adopted for the years presented. There were no adjustments required to net
income  for the year presented in the computation of diluted earnings per share.

Advertising Costs - Advertising costs are expensed as incurred. The Company does
-----------------
not  incur  any  direct-response  advertising costs. Advertising expense totaled
$50,045  and  $41,416  for  the  years  ended  June  30, 2001 and June 30, 2000,
respectively.

Comprehensive Income (Loss) - The Company adopted Financial Accounting Standards
---------------------------
Board  Statement  of  Financial  Accounting  Standards  No.  130,  "Reporting
Comprehensive Income", which establishes standards for the reporting and display
of  comprehensive  income  and its components in the financial statements. There
were  no  items  of comprehensive income (loss) applicable to the Company during
the  years  covered  in  the  financial  statements.

Inventory - Inventory, consisting of building parts and materials located in the
---------
vicinity  of  Roanoke,  Virginia, is valued at the lower of cost or market using
the  first-in,  first-out  (FIFO)  method.



                    METWOOD, INC. AND WHOLLY OWNED SUBSIDIARY
               CONSOLIDATED NOTES TO AUDITED FINANCIAL STATEMENTS
               FOR THE YEARS ENDED JUNE 30, 2001 AND JUNE 30, 2000
               ===================================================

NOTE  A  -  SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES  (CONT.)
-------------------------------------------------------------------

Concentration of Credit Risk - At times during the years ended June 30, 2001 and
----------------------------
June  30,  2000,  the Company's cash on deposit with its bank exceeded federally
insured  limits.  This  presents  a  significant  concentration  of credit risk.

Fair  Value  of  Financial  Instruments  -  The carrying amounts reported in the
---------------------------------------
balance  sheet for cash, accounts receivable, inventory, bank line of credit and
accounts  payable  and  accrued  expenses  approximate  fair values based on the
short-term  maturity  of  these  instruments.

Web  Site  Research  and Development - All costs incurred during the application
------------------------------------
development  stage  of  web  site  research and development are capitalized. All
training  and  application  maintenance  costs  incurred  during  the  post
implementation  (operation  stage) are expensed. All upgrades and enhancements
incurred during the post  implementation  (operations  stage)  are  capitalized.

NOTE  B  -  RECENT  ACCOUNTING  PRONOUNCEMENTS
----------------------------------------------

In  June  of  1998, the Financial Accounting Standards Board issued Statement of
Financial  Accounting  Standards  No. 133, Accounting for Derivative Instruments
and  Hedging  Activities,  which  the  Company  has  adopted.  The Statement, as
deferred by FASB No. 137, is effective for fiscal years beginning after June 15,
2001  and  establishes  standards  for  accounting  and reporting for derivative
instruments  and hedging activities. Statement of Financial Accounting Standards
No.  133  and No. 137 do not currently impact the Company's financial statements
as  there  are  no  derivative  instrument  holdings.

NOTE  C  -  SUPPLEMENTAL  CASH  FLOW  INFORMATION
-------------------------------------------------

Supplemental  disclosures  of cash flow information for the years ended June 30,
2001  and  June  30,  2000  are  summarized  as  follows:

Cash  paid  during  the  years  for  interest  and  income taxes are as follows:

                                                  2001               2000
                                                 -----               ----

          Income  Taxes                         $      -          $     -
          Interest                              $  1,430          $     -




                    METWOOD, INC. AND WHOLLY OWNED SUBSIDIARY
               CONSOLIDATED NOTES TO AUDITED FINANCIAL STATEMENTS
               FOR THE YEARS ENDED JUNE 30, 2001 AND JUNE 30, 2000
               ===================================================

NOTE  D  -  STOCKHOLDERS  LOANS  PAYABLE
----------------------------------------

During  the  year  ended  June  30,  2000,  the  entire  principal  balance  of
stockholders  loans  payable was fully repaid with interest, at a rate of 9% per
annum,  forgiven  by  the  officers  and  stockholders.

NOTE  E  -  RELATED  PARTY  TRANSACTIONS
----------------------------------------

The  Company  has  contracted with a construction company related through common
ownership  whereby  the  Company  utilizes  the  related  party for construction
related  services.  Total payments to the related party for the years ended June
30,  2001  and June 30, 2000 were $ -0-  and $16,388, respectively. There are no
amounts  payable  to  the  related  party  at  June  30,  2001.

During  the  year ended June 30, 2000, the Company paid its majority stockholder
and  officer  distributions  of  $99,020  and  paid  $32,080  to  the  remaining
stockholders  at  such  time.  See  footnote  "A"  for  further  description.

During  the  year  ended June 30, 2001, the Company received $300,000, including
interest  thereto,  worth  of  fair market value of certain services and related
fixed  assets  consisting of machinery, equipment and building improvements from
two  of  its stockholders and officers in exchange for full payment on its notes
receivable  from  stockholders.

See  Note  G below for additional related party transactions pertaining strictly
to  the  equity  and  operations  of  the  Company.

NOTE  F  -  BANK  CREDIT  LINE
------------------------------

During  the  year  ended  June 30, 2001, the Company borrowed on a $150,000 bank
line  of  credit  in  the amount of $50,000 including interest thereon. The bank
credit  line  outstanding  at  June  30,  2001  is $50,000. The bank credit line
available  at  June  30, 2001 is $100,000.  The loan is payable on demand, bears
interest  at  the rate of prime plus .50% per annum and is unsecured. The actual
rate  of  interest  in  effect  at  June  30,  2001  was  7.50%.








                       METWOOD, INC. AND OWNED SUBSIDIARY
               CONSOLIDATED NOTES TO AUDITED FINANCIAL STATEMENTS
               FOR THE YEARS ENDED JUNE 30, 2001 AND JUNE 30, 2000
               ===================================================

NOTE  G  -  EQUITY
------------------

During  the  year ended June 30, 2000, the Company purchased 8.124 acres of land
and  several buildings that is used as corporate office and warehouse space. The
purchase  price  was  $388,000  of  which $288,000 was paid in cash and $100,000
worth of the Company's common stock was exchanged at a value of $1.00 per common
share  under  the  Company's  Regulation  D  Private  Placement.

In January of 2000, the Company, through a majority vote, changed its authorized
common  stock  to  100,000,000  shares.  No  preferred  shares  were authorized.

In accordance with the June 30, 2000 plan of reorganization described in Note A,
the  Company  issued  1,000,000  shares  of  its  common  stock  in exchange for
management  and  legal  services  received  relating  to  the  merger  and
reorganization.

During  the  year  ended  June 30, 2001, the Company originally issued unrelated
subcontractors  95,000  common  shares  of the Company's stock for services that
should  have  been  rendered.  These  common shares of the Company were properly
canceled  due  to  non-performance  reasons.

During  the  year ended June 30, 2001, the Company issued 4,000 common shares of
the  Company stock to unrelated parties in exchange for the fair market value of
consulting  services  received  in  the  amount  of  approximately  $8,000.

During  the  year  ended  June  30, 2001, the Company also issued 400,000 common
shares of the Company stock to its officers and stockholders in exchange for the
fair  market  value of professional engineering and consulting services received
in  the  amount  of  approximately  $20,000.

NOTE  H  -  OPERATING  LEASE
----------------------------

The  Company  formerly  leased  its corporate office and warehouse facilities in
Botetourt  County,  Virginia  under  a  cancelable  month-to-month  industrial
operating  lease.  The end of the lease term actually occurred in July 2000 with
final  payment  made  at  such time. The Company terminated the lease by written
notice. There are no future minimum annual commitments due to the month to month
provisions  of  the  lease  and  the Company terminated the operating lease upon
relocating to another facility as explained in footnote G above. Rental payments
and  related  expense  for the years ending June 30, 2001 and June 30, 2000 were
$850  and  $20,800,  respectively.



                    METWOOD, INC. AND WHOLLY OWNED SUBSIDIARY
               CONSOLIDATED NOTES TO AUDITED FINANCIAL STATEMENTS
               FOR THE YEARS ENDED JUNE 30, 2001 AND JUNE 30, 2000
               ---------------------------------------------------

NOTE  I  -  EARNINGS  PER  SHARE  (EPS)
---------------------------------------

Statement  of  Financial  Accounting  Standard  (SFAS)  No.  128  requires  dual
presentation of basic and diluted EPS with a reconciliation of the numerator and
denominator  of the EPS computations. Basic earnings per share amounts are based
on  the  weighted  average  shares  of  common stock outstanding. If applicable,
diluted earnings per share would assume the conversion, exercise, or issuance of
all potential common stock instruments such as options, warrants and convertible
securities,  unless  the  effect  is  to  reduce a loss or increase earnings per
share.  Accordingly, this presentation has been adopted for the years presented.
There  were no adjustments required to net income for the years presented in the
computation  of  diluted  earnings  per  share.  The  basic and diluted weighted
average  shares outstanding for the period for the years ended June 30, 2001 and
June  30,  2000  are  as  follows:

                                           2001                2000
                                        -------               -----

Weighted  average  outstanding  common  shares  used
   for basic and diluted EPS           11,621,166         7,445,279
                                       ==========         ==========

NOTE  J  -  INCOME  TAXES
-------------------------

The  provision  for  income  taxes  consists  of:

                                          2001                2000
                                        -------               -----

Current:
   Federal                           $    1,064          $       -
   State                                    426                  -
                                       ---------        ----------
                                          1,490                  -
                                       =========       ===========


Deferred:
   Federal                           $    2,720          $       -
   State                                  1,090                  -
                                        --------      ------------
                                          3,810                  -
                                        ========      ============






                    METWOOD, INC. AND WHOLLY OWNED SUBSIDIARY
               CONSOLIDATED NOTES TO AUDITED FINANCIAL STATEMENTS
               FOR THE YEARS ENDED JUNE 30, 2001 AND JUNE 30, 2000
               ---------------------------------------------------


NOTE  J  -  INCOME  TAXES  (CONT)
---------------------------------

The  effective  income  tax  rate differed from the statutory federal income tax
rate  due  to  the  following  items:
                                                                           2001
                                                                           ----
     Income  tax  computed  at  the  federal  statutory  rate          $  1,490
     Non-deductible  services  paid  with  stock  -  Note  G             (3,764)
     Accelerated  depreciation                                            8,000
State  income  taxes                                                       (426)
                                                                      ----------
Total  effective  income  taxes                                        $  5,300
                                                                         =======

During  the  year  ended  June  30, 2001, the Company paid $16,249 in former "S"
Corporation  distributions to its shareholders. See Note A herein for discussion
on  the  termination  of  its  "S"  election.

No  income  tax  provision is necessary for the year ended June 30, 2000 because
the portion of time applicable to the short period in which the Company became a
"C"  Corporation  resulted  in  a  loss. See Note A herein for discussion on the
termination  of  its  "S"  election.

NOTE  K  -  OTHER  INCOME
-------------------------

During the year ended June 30, 2001, the Company received $13,100 of income from
the  rental  of  a  portion  of  its  warehouses  to  an  unrelated third party.

During  the  year ended June 30, 2001, the Company received non-recurring income
in  the  amount  of $50,000 pertaining to a settlement of a lawsuit in which the
Company  was  the  plaintiff.


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

NONE.

Item  9.  Directors  and  Executive  Officers  of  the  Registrant

Identification  of  Directors  and  Executive  Officers
-------------------------------------------------------

     The  following  table  sets forth, in alphabetical order, the names and the
nature of all positions and offices held by all directors and executive officers
of the Company for the Company year ending June 30, 2001 and to the date hereof,
and  the  period or periods during which each such director or executive officer
served  in  his  or  her  respective  positions.

Name          Position  and  background
----          -------------------------

Robert  M.  (Mike)  Callahan     President

Experience:  Mr.  Callahan  has  been involved in the building industry for over
thirty years.  He is well recognized in Southwestern Virginia as an innovator of
the  uses  of  passive  solar  design  and  wood/metal  products  in custom home
building.  Along  with  Mr.  Shiflett,  he formed Metwood, Inc. in 1993 to bring
light gage construction, used in commercial buildings for years, into common use
in  residential  construction.

Ronald  B.  Shiflett     Vice  President

Education:  B.S. Civil Engineering, 1973, Virginia Polytechnic Institute & State
University

M.S.  Civil Engineering, 1977, Virginia Polytechnic Institute & State University

Registered as a Professional Engineer in Virginia, North Carolina, West Virginia
and  Michigan.

Experience:  Mr.  Shiflett  has been engaged in structural design of industrial,
commercial,  residential,  and  institutional  buildings  for  25  years.  He is
recognized  by  the  design community in Western Virginia as an innovator in the
use  and design of light gage steel framing in building construction. Along with
Mr.  Callahan,  he  formed  Metwood,  Inc.  in  1993.

Shawn  A.  Callahan     Secretary/Treasurer,  Plant  Manager

Education:  B.S.  Computer  Science,  1996,  Virginia  Military  Institute

B.S.  Mathematics,  1996,  Virginia  Military  Institute

Experience:  Since  starting  with  Metwood,  Inc. in May 1996, Mr. Callahan has
played  a  major  role in the restructure of the company, increasing production,
improving  efficiency,  and  developing  computer  aids  for  the  company.

Term  of  Office
----------------

The  term  of office of the current directors shall continue until new directors
are  elected  or  appointed.


Family  Relationships
---------------------

Robert  (Mike)  Callahan  is  the  father  of  Shawn  Callahan.

Involvement  in  Certain  Legal  Proceedings
--------------------------------------------

Except  as  indicated  below and to the knowledge of management, during the past
five  years,  no  present  or  former  director,  person  nominated  to become a
director,  executive  officer,  promoter  or  control  person  of  the  Company:

(1)  Was  a  general  partner or executive officer of any business by or against
which  any  bankruptcy petition was filed, whether at the time of such filing or
two  years  prior  thereto;

(2)  Was  convicted  in  a criminal proceeding or named the subject of a pending
criminal  proceeding  (excluding  traffic  violations and other minor offenses);

(3) Was the subject of any order, judgment or decree, not subsequently reversed,
suspended  or  vacated,  of  any court of competent jurisdiction, permanently or
temporarily enjoining, barring, suspending or otherwise limiting his involvement
in  any  type  of  business,  securities  or  banking  activities;  and

(4) Was the subject of any order, judgment or decree, not subsequently reversed,
suspended  or  vacated, of any federal or state authority barring, suspending or
otherwise  limiting  for more than 60 days the right of such person to engage in
any  activity  described above under this Item, or to be associated with persons
engaged  in  any  such  activity;

(5)  Was  found  by  a  court of competent jurisdiction (in a civil action), the
Commission  or  the  Commodity  Futures  Trading  Commission  to have violated a
federal  or  state  securities or commodities law, and the judgment has not been
reversed,  suspended,  or  vacated.

Compliance  with  Section  16(a)  of  the  Exchange  Act
--------------------------------------------------------

No  director,  executive  officer or 10% shareholder of the Company has effected
any  transactions  in  the  Company's  securities  for the dates covered by this
report  since  the  date  of  filing  their  respective  Form  3  reports.

Item  10.  Executive  Compensation

The  following table sets forth in summary form the compensation received during
each  of  the Company's last three completed fiscal years by the Chief Executive
Officer  and  President  of  the  Company.

<TABLE>
<CAPTION>


Summary  Compensation  Table


<S>           <C>      <C>           <C>          <C>      <C>      <C>       <C>
              Other    Restricted    Restricted
Name and . .  Fiscal   Annual        Compen-      Stock    LTIP     Stock
 Position. .  Year     Salary        Bonuses      sation   Awards   Options   Bonuses
------------  -------  ------------  -----------  -------  -------  --------  -------
                  (1)           (2)      (3) (7)      (4)      (5)       (6)
              -------  ------------  -----------  -------  -------  --------
Michael
Callahan,. .    2001   $   100,000          -0-      -0-      -0-       -0-       -0-
President. .    2000   $   100,000          -0-      -0-      -0-       -0-       -0-
& Director .    1999   $    24,000          -0-      -0-      -0-       -0-       -0-
------------  -------  ------------  -----------  -------  -------  --------  -------
Ronald
Shiflett,. .    2001   $       -0-          -0-      -0-      -0-       -0-       -0-
V.P.&. . . .    2000   $       -0-          -0-      -0-      -0-       -0-       -0-
Director . .    1999   $       -0-          -0-      -0-      -0-       -0-       -0-
------------  -------  ------------  -----------  -------  -------  --------  -------
Shawn
Callahan,. .    2001   $    54,000          -0-      -0-      -0-       -0-       -0-
Secretary, .    2000   $    44,000          -0-      -0-      -0-       -0-       -0-
Treas., Dir.    1999   $    36,000          -0-      -0-      -0-       -0-       -0-
------------  -------  ------------  -----------  -------  -------  --------  -------
</TABLE>




(1)     The  dollar  value  of  base  salary  (cash  and  non-cash)  received.
Information  on  the  stock-based  compensation can be found in the accompanying
audited  financial  statements.

(2)     The  dollar  value  of  bonus  (cash  and  non-cash)  received.

(3)     During  the  periods  covered  by  the  Summary  Compensation Table, the
Company  did  not  pay any other annual compensation not properly categorized as
salary  or  bonus, including perquisites and other personal benefits, securities
or  property.

(4)     During  the  periods  covered  by  the  Summary  Compensation Table, the
Company  did  not  make  any  award  of  restricted  stock.

(5)     The  Company  has  had  no  stock  option  plans.

(6)     The  Company  currently  has  no  Restricted  Stock  Bonus  Plans.

(7)     No  other  compensation



No  member  of  the  Company's  management  has been granted any option or stock
appreciation  right;  accordingly,  no  tables  relating to such items have been
included  within  this  Item.  See  the Summary Compensation Table of this Item.


Compensation  of  Directors
---------------------------

     There  are  no  standard  arrangements  pursuant  to  which  the  Company's
directors  are  compensated for any services provided as director. No additional
amounts  are  payable  to the Company's directors for committee participation or
special  assignments.

     There  are no arrangements pursuant to which any of the Company's directors
was  compensated during the Company's last completed fiscal year or the previous
two  fiscal  years  for  any  service  provided  as  director.  See  the Summary
Compensation  Table  of  this  Item.

Termination  of  Employment  and  Change  of  Control  Arrangement
------------------------------------------------------------------

     There  are  no compensatory plans or arrangements, including payments to be
received  from  the  Company,  with  respect  to any person named in the Summary
Compensation  Table  set  out above which would in any way result in payments to
any  such  person  because  of  his  or  her  resignation,  retirement  or other
termination of such person's employment with the Company or its subsidiaries, or
any  change  in  control  of  the  Company,  or  a  change  in  the  person's
responsibilities  following  a  change  in  control  of  the  Company.

Item  11.  Security  Ownership  of  Certain  Beneficial  Owners  and  Management

     (a)  Security  Ownership  of  Certain  Beneficial  Owners

   The  following Table sets forth the shares held by those persons who own more
than five percent of Metwood's common stock as of September 24, 2001, based upon
11,757,883  shares  outstanding.


                     Name  and  address  of
Title  of  Class     beneficial  owner      Number  of  shares  Percent of class
----------------     -----------------     ------------------  ----------------


Common               Robert  ('Mike')  Callahan      3,866,665  (1)        32.8%
                     819  Naff  Road
                     Boones  Mill,  VA  24065

Common               Ronald  Shiflett                2,251,282             19.1%
                     819  Naff  Road
                     Boones  Mill,  VA  24065

Common               Shawn  Callahan                 1,032,050              8.8%
                     819  Naff  Road
                     Boones  Mill,  VA  24065

(1)  Includes  direct  and  indirect  interests.

(b)  Security  Ownership  of  Management

     The  following  table  sets  forth the shares held by Metwood directors and
officers  as  of  September  24,  2001.

                     Name  and  address  of
Title  of  Class     beneficial  owner     Number  of  shares   Percent of class
----------------     -----------------     ------------------   ----------------


Common              Robert  ('Mike')  Callahan       3,866,665  (1)        32.8%
                    819  Naff  Road
                    Boones  Mill,  VA  24065

Common              Ronald  Shiflett                 2,251,282             19.1%
                    819  Naff  Road
                    Boones  Mill,  VA  24065

Common              Shawn  Callahan                  1,032,050              8.8%
                    819  Naff  Road
                    Boones  Mill,  VA  24065

Ownership  of  shares  by  directors  and  officers of Metwood as a group: 60.7%

(1)  Includes  direct  and  indirect  interests.

     (c)  Changes  in  Control

We  know of no contractual arrangements which may at a subsequent date result in
a  change  of  control  in  the  Company.

Item  12.  Certain  relationships  and  Related  Transactions

Following  are  the  transactions  between  Metwood  and  members of management,
directors,  officers,  5%  shareholders,  and  promoters  of  Metwood:

The  Company  has  contracted with a construction company related through common
ownership  whereby  the  Company  utilizes  the  related  party for construction
related  services.  Total payments to the related party for the years ended June
30,  2001  and June 30, 2000 were $ -0-  and $16,388, respectively. There are no
amounts  payable  to  the  related  party  at  June  30,  2001.

During  the  year ended June 30, 2000, the Company paid its majority stockholder
and  officer  distributions  of  $99,020  and  paid  $32,080  to  the  remaining
stockholders  at  such  time.

During  the  year  ended June 30, 2001, the Company received $300,000, including
interest  thereto,  worth  of  fair market value of certain services and related
fixed  assets  consisting of machinery, equipment and building improvements from
two  of  its stockholders and officers in exchange for full payment on its notes
receivable  from  stockholders.

See  footnotes  'A'  and  'G'  in the attached financial statements for the year
ended  June  30,  2001 for further explanations on the circumstances surrounding
these  transactions.


Item  13.  Exhibits  and  Reports  on  Form  8-K

     (a)  Financial  Statements
1.  The  following financial statements of Metwood are included in Part II, Item
7:
Independent  Auditors'  Report                         19-20
Balance  Sheet  -  June  30,  2001                        21
Statements  of  Income  -  Years  Ended
     June  30,  2001  and  2000                           22
Statements  of  Cash  Flows  -  Years  Ended
     June  30,  2001  and  2000                           23
Statements  of  Stockholders'  Equity  -  Years  Ended
     June  30,  2001  and  2000                           24
Notes  to  Financial  Statements                       25-31

          2.  Exhibits
3. Articles of Incorporation as amended and bylaws are incorporated by reference
to  Exhibit  No.  3  of  Form  8-K  as  amended  filed  August  11,  2001.

23.  Consent  of  Auditors

(b)  Reports  on  Form  8-K
No  Form  8-K  was  filed  during  the  fourth  quarter.










                             SIGNATURE PAGE FOLLOWS
                             ----------------------





                                   SIGNATURES
                                   ----------

Pursuant  to  the  requirements  of  the  Securities  Exchange  Act of 1934, the
Registrant has caused this report to be signed on its behalf by the undersigned,
hereunto  duly  authorized.

                                                 METWOOD,  INC.

Date:  September  24,  2001           By:  /s/  Robert  ('Mike')  Callahan
                                      ------------------------------------
                                      Robert  ('Mike')  Callahan
                                      President  and  Director

Date:  September  24,  2001           By:  /s/  Ronald  Shiflet
                                      -------------------------
                                      Ronald  Shiflett
                                      Vice-President  and  Director

Date:  September  24,  2001           By:  /s/  Shawn  Callahan
                                      -------------------------
                                      Shawn  Callahan
                                      Secretary,  Treasurer  and  Director