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


                           FORM 10-KSB

[X]  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
     ACT OF 1934

           For the fiscal year ended December 31, 2002

[ ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES AND
     EXCHANGE ACT OF 1934

                 Commission file number 000-30951

                     PINECREST SERVICES, INC.
      (Exact name of registrant as specified in its charter)

Nevada                                67-0695367
------                                ----------
(State of incorporation)              (I.R.S. Employer Identification No.)

#584, 3353 South Main Street, Salt Lake City, Utah       84115
--------------------------------------------------       -----
(Address of principal executive offices)                (Zip code)

Issuer's telephone number, including area code: (801) 323-2395

Securities registered pursuant to Section 12(b) of the Act: None.

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

Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12
months (or for such shorter period that the 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 disclosure of delinquent filers in response to item 405 of Regulation
S-B is not contained herein, and will not be contained, to the best of
registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-KSB or any amendment to
this Form 10-KSB. [ ]

State issuer's revenue for its most recent fiscal year: None.

A market value of the voting stock held by non-affiliates can not be
determined because the registrant does not have an active trading market.

As of March 4, 2003, the registrant had 17,600,000 shares of common stock
outstanding.

Documents incorporated by reference:   None.

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

<PAGE>

                              PART I

Item 1.  Description of business............................................3
Item 2.  Description of property ...........................................6
Item 3.  Legal proceedings..................................................7
Item 4.  Submission of matters to a vote of security holders ...............7

                             PART II

Item 5.  Market for common equity and related stockholder matters ..........7
Item 6.  Plan of operation..................................................7
Item 7.  Financial statements ..............................................8
Item 8.  Changes in and disagreements with accountants ....................18

                             PART III

Item 9.  Directors and executive officers; compliance with Section 16(a)...18
Item 10. Executive compensation............................................18
Item 11. Security ownership of certain beneficial owners and management....19
Item 12. Certain relationships and related transactions....................19
Item 13. Exhibits and reports on Form 8-K..................................19
Item 14. Controls and procedures ..........................................20
Signatures and certifications..............................................20





                    FORWARD LOOKING STATEMENTS

     In this annual report references to "Pinecrest," "we," "us," and "our"
refer to Pinecrest Services, Inc.

     This annual report contains certain forward-looking statements and for
this purpose any statements contained in this annual report are not statements
of historical fact may be deemed to be forward-looking statements.  Without
limiting the foregoing, words such as "may," "will," "expect," "believe,"
"anticipate," "estimate" or "continue" or comparable terminology are intended
to identify forward-looking statements.  These statements by their nature
involve substantial risks and uncertainties, and actual results may differ
materially depending on a variety of factors, many of which are not within
Pinecrest's control.  These factors include but are not limited to economic
conditions generally and in the industries in which Pinecrest may participate,
competition within Pinecrest's chosen industry, technological advances and
failure by Pinecrest to successfully develop business relationships.



                                2
<PAGE>

                              PART I

ITEM 1: DESCRIPTION OF BUSINESS

Business Development

     On February 10, 1999, Pinecrest Services, Inc. was incorporated in the
state of Nevada.  Pinecrest completed a change of domicile merger with Hystar
Aerospace Marketing Corporation of Nebraska ("Hystar") on May 11, 2000.
Hystar merged with Pinecrest solely to change its domicile from Nebraska to
Nevada.  Hystar was incorporated in the state of Nebraska on March 7, 1986,
and was a wholly owned subsidiary of Nautilus Entertainment, Inc., a Nevada
corporation.  Hystar was formed to lease, sell and market the Hystar airship
and the Burkett Mill, a waste milling device.  However, the venture was found
to be cost prohibitive and Hystar ceased such activities in 1986.  Hystar did
not engage in any further commercial operations.

Our Plan

     We are a "blank check" company and have had recurring operating losses
for the past two fiscal years.  Our independent auditors have expressed doubt
that we can continue as a going concern unless we obtain financing to continue
operations.

     Our business plan is to seek, investigate, and, if warranted, acquire an
interest in a business opportunity.  Our acquisition of a business opportunity
may be made by merger, exchange of stock, or otherwise.  We have very limited
sources of capital, and we probably will only be able to take advantage of one
business opportunity. At the present time we have not identified any business
opportunity that we plan to pursue, nor have we reached any preliminary or
definitive agreements or understandings with any person concerning an
acquisition or merger.

     Based on current economic and regulatory conditions, management believes
that it is possible, if not probable, for a company like ours, without many
assets or liabilities, to negotiate a merger or acquisition with a viable
private company.  The opportunity arises principally because of the high legal
and accounting fees and the length of time associated with the registration
process of "going public."  However, should any of these conditions change, it
is very possible that there would be little or no economic value for anyone
taking over control of Pinecrest.

     Our search for a business opportunity will not be limited to any
particular geographical area or industry and includes both U.S. and
international companies.  Our management has unrestricted discretion in
seeking and participating in a business opportunity, subject to the
availability of such opportunities, economic conditions and other factors.
Our management believes that companies who desire a public market to enhance
liquidity for current stockholders, or plan to acquire additional assets
through issuance of securities rather than for cash will be potential merger
or acquisition candidates.

     The selection of a business opportunity in which to participate is
complex and extremely risky and will be made by management in the exercise of
its business judgement.  There is no assurance that we will be able to
identify and acquire any business opportunity which will ultimately prove to
be beneficial to us and our stockholders.  Should a merger or acquisition
prove unsuccessful, it is possible management may decide not to pursue further
acquisition activities and management may abandon its activities and we may
become dormant or be dissolved.

     Our activities are subject to several significant risks which arise
primarily as a result of the fact that we have no specific business and may
acquire or participate in a business opportunity based on the decision of
management which will, in all probability, act without consent, vote, or
approval of our stockholders.

     It is possible that the range of business opportunities that might be
available for consideration by us could

                                3

<PAGE>

be limited by impact of the SEC regulations regarding purchase and sale of
"penny stock."  Our common stock is not publicly traded at this time and we
cannot assure that a market will develop or that a stockholder ever will be
able to liquidate his investments without considerable delay, if at all.  If a
market develops, our shares will likely be subject to the rules of the Penny
Stock Suitability Reform Act of 1990. The liquidity of penny stock is affected
by specific disclosure procedures required by this Act to be followed by all
broker-dealers, including but not limited to, determining the suitability of
the stock for a particular customer, and obtaining a written agreement from
the customer to purchase the stock.  This rule may affect the ability of
broker-dealers to sell our securities and may affect the ability of purchasers
to sell our securities in any market.

Investigation and Selection of Business Opportunities

     We anticipate that business opportunities will come to our attention from
various sources, including our officers and directors, our stockholders,
professional advisors such as attorneys and accountants, securities
broker-dealers, investment banking firms, venture capitalists, members of the
financial community and others who may present unsolicited proposals.
Management expects that prior personal and business relationships may lead to
contacts with these various sources.

     Our management will analyze the business opportunities; however, none of
our management are professional business analysts (See, Part III, Item 9:
"Directors and Executive Officers; . . .").  Our management has had limited
experience with mergers and acquisitions of business opportunities and has not
been involved with an initial public offering.  In January 2002, Mrs. Marino
was involved with an acquisition between Bennion Corporation, a blank check
company, and idiglobal.com, Inc., a company that designs, develops and markets
user-friendly, Internet-based software applications and development tools on
an integrated service platform.  The transaction was structured as a
stock-for-stock exchange and upon consummation of the transactions, Mrs.
Marino resigned as an officer and director of that company.  Due to our
management's inexperience with acquisitions and mergers, they may rely on
promoters or their affiliates, principal stockholders or associates to assist
in the investigation and selection of business opportunities.

     Our management may also hire an outside consultant.  Since our management
has no current plans to use any outside consultants or advisors to assist in
the investigation and selection of business opportunities, no policies have
been adopted regarding use of such consultants or advisors.  We have not
established the criteria to be used in selecting such consultants or advisors,
the service to be provided, the term of service, or the total amount of fees
that may be paid. However, because of our limited resources, it is likely that
any such fee we agree to pay would be paid in stock and not in cash.  In
addition, there is a possibility that the amount of consultant fees may become
a factor in negotiations related to a business opportunity.

     Certain conflicts of interest exist or may develop between us and our
officers and directors.  Our management has other business interests to which
they currently devote attention, which include their primary employment and
management of other blank check reporting companies.  They may be expected to
continue to devote their attention to these other business interests although
management time should be devoted to our business.  As a result, conflicts of
interest may arise that can be resolved only through their exercise of
judgement in a manner which is consistent with their fiduciary duties to us.
In particular, Mrs. Marino, our President, is a director of other blank check
companies with a structure and a business plan which is identical to ours.
Our management may be involved with other blank check companies in the future.
In the process of negotiations for an acquisition or merger or determination
of consulting fees related to investigation of a business opportunity, our
principal stockholders and management may consider their own personal
pecuniary benefit or the interests of other blank check companies they are
affiliated with rather than the best interests of our other stockholders.

     We presently do not foresee entering into a merger or acquisition
transaction with any business with which our officers or directors are
currently affiliated. We may acquire or merge with companies of which our
management's  affiliates or associates have a direct or indirect ownership
interest.  If we determine in the future that a transaction with an affiliate
would be in our best interest we are permitted by Nevada law to enter into
such a

                                4

<PAGE>

transaction if:

     (1)   The material facts regarding the relationship or interest of the
affiliate in the contract or transaction are disclosed or are known to the
board of directors.  The board authorizes the contract or transaction by the
affirmative vote of a majority of the disinterested directors, even though the
disinterested directors constitute less than a quorum; or

     (2)   The material facts regarding the relationship or interest of the
affiliate in the contract transaction are disclosed or are known to the
stockholders entitled to vote on the transaction, and the contract or
transaction is specifically approved by vote of the stockholders; or

     (3)   The contract or transaction is fair to us at the time it is
authorized, approved or ratified by the board of directors or the
stockholders.

     A decision to participate in a specific business opportunity may be made
upon our management's analysis of the quality of the business opportunity's
management and personnel, the anticipated acceptability of its new products or
marketing concept, the merit of its technological changes, the perceived
benefit that it will derive from becoming a publicly held entity, and numerous
other factors which are difficult, if not impossible, to analyze through the
application of any objective criteria.  In many instances, we anticipate that
the historical operations of a specific business opportunity may not
necessarily be indicative of the potential for the future because of the
possible need to substantially shift marketing approaches, significantly
expand operations, change product emphasis, change or substantially augment
management, or make other changes.  We will be dependent upon the owners of a
business opportunity to identify any such problems which may exist and to
implement, or be primarily responsible for, the implementation of required
changes.

     In our analysis of a business opportunity we anticipate that management
will consider, among other things, the following factors:

     (1)   Potential for growth and profitability, indicated by a new
technology, anticipated market expansion, or new products;

     (2)   Our perception of how any particular business opportunity will be
received by the investment community and by our stockholders;

     (3)   Whether, following the business combination, the financial
condition of the business opportunity would be, or would have a significant
prospect in the foreseeable future of becoming sufficient to enable our
securities to qualify for listing on a exchange or on a national automated
securities quotation system, such as NASDAQ.

     (4)   Capital requirements and anticipated availability of required
funds, to be provided by us or from operations, through the sale of additional
securities, through joint ventures or similar arrangements, or from other
sources;

     (5)   The extent to which the business opportunity can be advanced;

     (6)   Competitive position as compared to other companies of similar size
and experience within the industry segment as well as within the industry as a
whole;

     (7)   Strength and diversity of existing management, or management
prospects that are scheduled for recruitment;

     (8)   The cost of our participation as compared to the perceived tangible
and intangible values and

                                5
<PAGE>

potential; and

     (9)   The accessibility of required management expertise, personnel, raw
materials, services, professional assistance, and other required items.

     No one of the factors described above will be controlling in the
selection of a business opportunity.  Management will attempt to analyze all
factors appropriate to each opportunity and make a determination based upon
reasonable investigative measures and available data. Potential business
opportunities may occur in many different industries and at various stages of
development.  Thus, the task of comparative investigation and analysis of such
business opportunities will be extremely difficult and complex. Potential
investors must recognize that because of our limited capital available for
investigation and management's limited experience in business analysis, we may
not discover or adequately evaluate adverse facts about the opportunity to be
acquired.

Form of Acquisition

     We cannot predict the manner in which we may participate in a business
opportunity. Specific business opportunities will be reviewed as well as our
needs and desires and those of the promoters of the opportunity.  The legal
structure or method deemed by management to be suitable will be selected based
upon our review and our relative negotiating strength. These methods may
include, but are not limited to, leases, purchase and sale agreements,
licenses, joint ventures and other contractual arrangements. We may act
directly or indirectly through an interest in a partnership, corporation or
other forms of organization.  We may be required to merge, consolidate or
reorganize with other corporations or forms of business organizations. In
addition, our present management and stockholders most likely will not have
control of a majority of our voting shares following a merger or
reorganization transaction. As part of such a transaction, our existing
directors may resign and new directors may be appointed without any vote by
our stockholders.

     We likely will acquire our participation in a business opportunity
through the issuance of common stock or other securities.  Although the terms
of any such transaction cannot be predicted, it should be noted that issuance
of additional shares also may be done simultaneously with a sale or transfer
of shares representing a controlling interest by current principal
stockholders.

Competition

     We expect to encounter substantial competition in our effort to locate
attractive opportunities.  Business development companies, venture capital
partnerships and corporations, venture capital affiliates of large industrial
and financial companies, small investment companies, and wealthy individuals
will be our primary competition. Many of these entities will have
significantly greater experience, resources and managerial capabilities than
we do and will be in a better position than we are to obtain access to
attractive business opportunities.  We also will experience competition from
other public "blank check" companies, many of which may have more funds
available for such transactions.

Employees

     We currently have no employees.  Our management expects to confer with
consultants, attorneys and accountants as necessary.  We do not anticipate a
need to engage any full-time employees so long as we are seeking and
evaluating business opportunities.

                ITEM 2: DESCRIPTION OF PROPERTIES

     We do not currently own or lease any property.  Until we pursue a viable
business opportunity and recognize income, we will not seek independent office
space.

                                6

<PAGE>


                    ITEM 3: LEGAL PROCEEDINGS

     We are not a party to any proceedings or threatened proceedings as of the
date of this filing.


   ITEM 4: SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     We have not submitted a matter to a vote of our shareholders during the
fourth quarter of the 2002 fiscal year.

                             PART II

ITEM 5: MARKET PRICE FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

     Our common stock is not listed on a public trading market.  As of March
4, 2003, we had 78 stockholders of record holding 17,600,000.  We have not
granted any options or warrants to purchase our common shares.  We have not
declared dividends on our common stock and do not anticipate paying dividends
on our common stock in the foreseeable future.

Securities Under Equity Compensation Plans

     We do not have any securities authorized for issuance under any equity
compensation plans.

Recent Sales of Unregistered Securities

     We have issued the following common shares without registration during
the past three fiscal years.

     On July 15, 2002, our board of directors authorized the issuance of
600,000 common shares to First Equity Holdings Corp. in consideration for
consulting and investment banking services valued at approximately $12,000. We
relied on an exemption from registration for a private transaction not
involving a public distribution provided by Section 4(2) of the Securities
Act.

     In connection with each of these isolated issuance's of our securities,
we believe that each purchaser was aware that the securities had not been
registered under federal securities laws; acquired the securities for his/its
own account for investment purposes and not with a view to or for resale in
connection with any distribution for purposes of the federal securities laws;
understood that the securities would need to be indefinitely held unless
registered or an exemption from registration applied to a proposed
disposition; and was aware that the certificate representing the securities
would bear a legend restricting their transfer.

     We believe that, in light of the foregoing, the sale of our securities to
the respective acquirers did not constitute the sale of an unregistered
security in violation of the federal securities laws and regulations by reason
of the exemptions provided under  3(b) and 4(2) of the Securities, and the
rules and regulations promulgated thereunder.


                    ITEM 6: PLAN OF OPERATION

     We have no assets and have experienced losses from inception.  For the
fiscal year ended December 31, 2002, we had no cash on hand and total current
liabilities of $30,000.  The $30,000 account payable is owed to a shareholder
for accounting and legal fees incurred during 1999 and paid by that
shareholder on our behalf.

     We have no commitments for capital expenditures for the next twelve
months.   The majority of our expenses are related to our reporting
obligations under the Exchange Act.  We have an account payable of $30,000

                                7

<PAGE>

and issued stock valued at $12,000 for expenses related to the professional
services required to prepare our reports and the costs of filing the reports
with the SEC.  We may repay the account payable with cash, if available, or we
may convert it into common stock. Also, if we acquire a business opportunity
we may incur additional reporting expenses related to proxy or information
statements we must provide to our stockholders which disclose the company to
be acquired's business operations, management and financial condition.

     During the next twelve months we believe that our current cash needs can
be met by loans from our directors, officers and stockholders based on
understandings we have with these individuals.  These understandings are not
written agreements and therefore these persons are not obligated to provide
funds.  We may repay these loans, costs of services  and advancements with
cash, if available, or we may convert them into common stock.

     Our management intends to actively seek business opportunities during the
next twelve months.  If we obtain a business opportunity, then it may be
necessary to raise additional capital through the sale of our common stock.
We intend to issue such stock pursuant to exemptions provided by federal and
state securities laws.  The purchasers and manner of issuance will be
determined according to our financial needs and the available exemptions.  We
do not currently intend to make a public offering of our stock.  We also note
that if we issue more shares of our common stock our shareholders may
experience dilution in the value per share of their common stock.


                   ITEM 7: FINANCIAL STATEMENTS




                     Pinecrest Services, Inc.

                       Financial Statements

                    December 31, 2002 and 2001




<PAGE> 8




                             CONTENTS


Independent Auditor's Report ...............................................3

Balance Sheets .............................................................4

Statements of Operations ...................................................5

Statements of Stockholders' Equity .........................................6

Statements of Cash Flows ...................................................7

Notes to the Financial Statements ..........................................8














<PAGE> 9


                      CHISHOLM & ASSOCIATES
A Professional           Certified Public Accountants    Office (801)292-8756
Corporation                    P.O. Box 540216              Fax (801)292-8809
                   North Salt Lake, Utah 84054
_____________________________________________________________________________




                   INDEPENDENT AUDITOR'S REPORT



To the Board of Directors and Stockholders
of Pinecrest Services, Inc.

We have audited the accompanying balance sheets of Pinecrest Services, Inc. (a
development stage company) as of December 31, 2002 and 2001 and the related
statements of operations, stockholders' equity and cash flows for the years
then ended and from inception, March 7, 1986, through December 31, 2002.
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 generally accepted auditing
standards 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 of material misstatement.  An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements.  An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation.  We believe that our
audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Pinecrest Services, Inc.  (a
development stage company) as of December 31, 2002 and 2001 and the results of
its operations and cash flows for the years ended December 31, 2002 and 2001
and from inception, March 7, 1986, through December 31, 2002 in conformity
with generally accepted accounting principles in the United States of America.

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern.  The Company has suffered recurring
losses from operations which raises substantial doubt about its ability to
continue as a going concern.  Management's plans in regard to these matters
are described in Note 2.  The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.





/s/ Chisholm & Associates

Chisholm & Associates
North Salt Lake, Utah
January 2, 2003





                               -3-
<PAGE> 10




                     Pinecrest Services, Inc.
                  (A Development Stage Company)
                          Balance Sheets



                              ASSETS

                                                        December 31
                                                     2002         2001
                                                ------------- -------------
CURRENT ASSETS

Cash                                            $          -  $          -
                                                ------------- -------------

  TOTAL ASSETS                                  $          -  $          -
                                                ============= =============



               LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES

Accounts Payable - related party                $     30,000  $     30,000
                                                ------------- -------------

  Total Liabilities                                   30,000        30,000
                                                ------------- -------------

STOCKHOLDERS' EQUITY

Common Stock, $.001 par value; 20,000,000
  shares authorized; 17,600,000 and 17,000,000
  shares issued and outstanding respectively          17,600        17,000

Additional Paid-in Capital                            11,400             -

Deficit Accumulated during the development stage     (59,000)      (47,000)
                                                ------------- -------------

  Total Stockholders' Equity (deficit)               (30,000)      (30,000)
                                                ------------- -------------

  TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY    $          -  $          -
                                                ============= =============











The accompanying notes are an integral part of these financial statements


                               -4-

<PAGE> 11



                     Pinecrest Services, Inc.
                  (A Development  Stage Company)
                     Statement of Operations


                                                                 From
                                       For the Years Ended       Inception on
                                           December 31           March 7, 1986
                                    ---------------------------  to
                                         2002         2001       Dec. 31, 2002
                                    ------------- -------------  -------------

REVENUES                            $          -  $          -   $          -
                                    ------------- -------------  -------------
EXPENSES
  General & Administrative                12,000             -         59,000
                                    ------------- -------------  -------------

    TOTAL EXPENSES                        12,000             -         59,000
                                    ------------- -------------  -------------

NET INCOME (LOSS)                   $    (12,000) $          -   $    (59,000)
                                    ============= =============  =============

NET LOSS PER SHARE                  $      (0.00) $          -   $      (0.00)
                                    ============= =============  =============

WEIGHTED AVERAGE SHARES OUTSTANDING   17,600,000    17,000,000     17,016,311
                                    ============= =============  =============













The accompanying notes are an integral part of these financial statements

                               -5-


<PAGE> 12



                     Pinecrest Services, Inc.
                  (A Development Stage Company)
                Statements of Stockholders' Equity
    From inception on March 7, 1986 through December 31, 2002


                                                                 Deficit
                                                                 Accumulated
                                                     Additional  During the
                                Common Stock         Paid in     Development
                             Shares       Amount     Capital     Stage
                           ------------- ----------- ----------- -------------
Issuance of shares for
 marketing rights            17,000,000  $   17,000  $        -  $          -

Net (loss) for the year
 ended December 31, 1986              -           -           -        (3,400)

Net (loss) for the year
 ended December 31, 1987              -           -           -        (3,400)

Net (loss) for the year
 ended December 31, 1988              -           -           -        (3,400)

Net (loss) for the year
 ended December 31, 1989              -           -           -        (3,400)

Net (loss) for the year
 ended December 31, 1990              -           -           -        (3,400)

Net (loss) for the year
 ended December 31, 1991              -           -           -             -

Net (loss) for the year
 ended December 31, 1992              -           -           -             -

Net (loss) for the year
 ended December 31, 1993              -           -           -             -
                           ------------- ----------- ----------- -------------

Balance - December 31, 1993  17,000,000      17,000           -       (17,000)

Net (loss) for the year
 ended December 31, 1994              -           -           -             -
                           ------------- ----------- ----------- -------------

Balance - December 31, 1994  17,000,000      17,000           -       (17,000)

Net (loss) for the year
 ended December 31, 1995              -           -           -             -
                           ------------- ----------- ----------- -------------

Balance - December 31, 1995  17,000,000      17,000           -       (17,000)

Net (loss) for the year
 ended December 31, 1996              -           -           -             -
                           ------------- ----------- ----------- -------------

Balance - December 31, 1996  17,000,000      17,000           -       (17,000)

Net (loss) for the year
 ended December 31, 1997              -           -           -             -
                           ------------- ----------- ----------- -------------

Balance - December 31, 1997  17,000,000      17,000           -       (17,000)

Net (loss) for the year
 ended December 31, 1998              -           -           -             -
                           ------------- ----------- ----------- -------------

Balance - December 31, 1998  17,000,000      17,000           -       (17,000)

Net (loss) for the year
 ended December 31, 1999              -           -           -       (30,000)
                           ------------- ----------- ----------- -------------

Balance - December 31, 1999  17,000,000      17,000           -       (47,000)

Net (loss) for the year
 ended December 31, 2000              -           -           -             -
                           ------------- ----------- ----------- -------------

Balance - December 31, 2000  17,000,000      17,000           -       (47,000)

Net (loss) for the year
 ended December 31, 2001              -           -           -             -
                           ------------- ----------- ----------- -------------

Balance - December 31, 2001  17,000,000      17,000           -       (47,000)

Shares issued for services
 at $.02 per share              600,000         600      11,400             -

Net (loss) for the year
 ended December 31, 2002              -           -           -       (12,000)
                           ------------- ----------- ----------- -------------

Balance - December 31, 2002  17,600,000  $   17,600  $   11,400  $    (59,000)
                           ============= =========== =========== =============






The accompanying notes are an integral part of these financial statements


                                -6-

<PAGE> 13




                     Pinecrest Services, Inc.
                  (A Development Stage Company)
                     Statement of Cash Flows

                                                                 From
                                                                 Inception on
                                        For the years ended      March 7, 1986
                                             December 31,        Through
                                     --------------------------- December 31,
                                           2002        2001      2002
                                     ------------- ------------- ------------
Cash Flows from Operating Activities

  Net Loss                           $    (12,000) $          -  $   (59,000)
  Less  Non-cash Items:
  Depreciation & Amortization                   -             -       17,000
  Increase  in Accounts Payable                 -             -       30,000
  Stock issued for services                12,000             -       12,000
                                     ------------- ------------- ------------
  Net Cash Provided (Used) by
  Operating Activities                          -             -            -
                                     ------------- ------------- ------------

Cash Flows from Investing Activities            -             -            -
                                     ------------- ------------- ------------
  Net Cash Provided (Used) by
  Investing Activities                          -             -            -
                                     ------------- ------------- ------------

Cash Flows from Financing Activities            -             -            -
                                     ------------- ------------- ------------
  Net Cash Provided (Used) by
  Financing Activities                          -             -            -
                                     ------------- ------------- ------------

Increase (Decrease) in Cash                     -             -            -

Cash and Cash Equivalents at
  Beginning of Period                           -             -            -
                                     ------------- ------------- ------------
Cash and Cash Equivalents at
  End of Period                      $          -  $          -  $         -
                                     ============= ============= ============

Supplemental Cash Flow Information:

  Stock issued for marketing rights  $          -  $          -  $    17,000
  Stock issued for services          $     12,000  $          -  $    12,000

  Cash Paid For:
   Interest                          $          -  $          -  $         -
   Income Taxes                      $          -  $          -  $         -


The accompanying notes are an integral part of these financial statements


                               -7-



<PAGE> 14

                     Pinecrest Services, Inc.
                  (A Development Stage Company)
                Notes to the Financial Statements
                    December 31, 2002 and 2001

NOTE 1 - Summary of Significant Accounting Policies

       a.    Organization & Consolidation Policy

             Pinecrest Services, Inc. (the Company), a Nevada corporation, was
incorporated February 10, 1999.   On May 11, 2000  the Company merged with
Hystar Aerospace Marketing Corporation of Nebraska, Inc. , a Nebraska
corporation.  (Hystar).  The Company is the surviving corporation.

             Hystar, was incorporated March 7, 1986 to lease, sell, and market
airships and the Burkett Mill, a waste milling device, which rights were
acquired from VIP Worldnet, Inc. initially the only shareholder.  The
technology to further develop the airship and the mill  by the parent company
proved to be prohibitive, and shortly after the acquisition of the marketing
rights further activity ceased.  Hystar has been inactive since that date.

             The merger was recorded under the pooling of interest method of
accounting.  Each share of the Company remained outstanding as one fully paid
and non-assessable share of capital stock of the surviving corporation, and
each share of Hystar  was converted into one fully paid and non-assessable
share of capital stock of the surviving corporation.

             The accompanying financial statements present the financial
condition and results of operations of Hystar from its inception through the
merger date and of the surviving entity, the Company, as of the merger date.

       b.    Recognition of Revenue

             The Company recognizes income and expense on the accrual basis of
accounting.

       c.    Earnings (Loss) Per Share

             The computation of earnings per share of common stock is based on
the weighted average number of shares outstanding at the date of the financial
statements.

                                         Income (loss) Shares       Per Share
                                         (Numerator)  (Denominator)  Amount
                                         ------------ ------------ -----------
For the year ended December 31, 2002:

  Basic EPS
  Income (loss) to common stockholders   $  ( 12,000)  17,600,000  $    (.00)
                                         ============ ============ ===========
For the year ended December 31, 2001:

  Basic EPS
  Income (loss) to common stockholders   $         -   17,000,000  $       -
                                         ============ ============ ===========


                               -8-
<PAGE> 15

                     Pinecrest Services, Inc.
                  (A Development Stage Company)
                Notes to the Financial Statements
                    December 31, 2002 and 2001


NOTE 1 - Summary of Significant Accounting Policies (continued)

       c.    Earning (Loss) Per Share (continued)

                                         Income (loss) Shares       Per Share
                                         (Numerator)  (Denominator)  Amount
                                         ------------ ------------ -----------
From inception on March 7, 1986 to
December 31, 2002:

  Basic EPS
  Income (loss) to common stockholders   $   (59,000)  17,016,311  $     (.00)
                                         ============ ============ ===========

       d.    Cash and Cash Equivalents

             The Company considers all highly liquid investments with
maturities of three months or less to be cash equivalents.

       e.    Provision for Income Taxes

             No provision for income taxes have been recorded due to net
operating loss carryforwards totaling approximately $59,000 that will be
offset against future taxable income.  These NOL carryforwards began to expire
in the year 2001.  No tax benefit has been reported in the financial
statements because the Company believes there is a 50% or greater chance the
carryforward will expire unused.

             Deferred tax asset and the valuation account is as follows as
December 31, 2002 and 2001:
                                                        December 31,
                                                     2002           2001
                                                ------------- --------------
    Deferred tax asset:
       NOL carryforward                         $     18,900  $      16,000

       Valuation allowance                          ( 18,900)      ( 16,000)
                                                ------------- --------------

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

       f.    Use of estimates

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



                               -9-

<PAGE> 16



                     Pinecrest Services, Inc.
                  (A Development Stage Company)
                Notes to the Financial Statements
                    December 31, 2002 and 2001

NOTE 2 - Going Concern

             The accompanying financial statements have been prepared assuming
that the Company will continue as a going concern.  The Company has no assets
and has had recurring operating losses for the past several years and is
dependent upon financing to continue operations.  The financial statements do
not include any adjustments that might result from the outcome of this
uncertainty.  It is management's plan to find an operating company to merge
with, thus creating necessary operating revenue.

NOTE 3 - Stockholders' Equity

             In 1986, the Company issued 17,000,000 shares of common stock for
the marketing rights to an airship and a waste milling device.  The value of
this issuance was $17,000.

             In 2002, the Company issued 600,000 shares of authorized, but
previously unissued common stock, for services rendered valued at $12,000 (or
$.02 per share).

NOTE 4 - Related Party Transactions

             During the year ended December 31, 1999, the Company incurred
$30,000 of professional fees payable to professionals affiliated with First
Equity Holdings Corp. (formerly Mutual Ventures Corp.)  An officer of the
Company is also an employee of First Equity Holdings Corp.

             During 2002, the Company issued 600,000 shares to First Equity
Holdings Corp.  An office of the Company is also an employee of First Equity
Holdings Corp.

NOTE 5 - Development Stage Company

             The Company is a development stage company as defined in
Financial Accounting Standards Board Statement No. 7.  It is concentrating
substantially all of its efforts in raising capital and searching for a
business operation with which to merge, or assets to acquire, in order to
generate significant operations.












                               -10-



<PAGE> 17


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

     As previously reported in our quarterly report for the period ended
September 30, 2001, we requested and received the resignation of Smith &
Company, Certified Public Accountants, as our independent auditors on October
30, 2001.  Then we engaged Chisholm & Associates, Certified Public
Accountants, as our independent auditors.

                             PART III

ITEM 9: DIRECTORS AND EXECUTIVE OFFICERS; COMPLIANCE WITH SECTION 16(a)

     Our executive officers and directors and their respective ages, positions
and term of office are set forth below.  Biographical information for each of
those persons is also presented below.  Our bylaws require two directors who
serve for a term of one year or until they are replaced by a qualified
director.  Our executive officers are chosen by our Board of Directors and
serve at its discretion.
                                                             Director
Name                 Age   Position Held                     or Officer Since
-------              ----  --------------                    ----------------

April Marino         27    President, Director               February 10, 1999
Anthony S. Clayton   21    Secretary/Treasurer, Directors    July 9, 2002

     April Marino   Ms. Marino has worked as a secretary for First Equity
Holdings, Inc. since December 18, 1997.  From January 1995 to October 1997 she
was employed by Universal Business Insurance as a Customer Service
Representative.  Mrs Marino is a director of Galaxy Specialties, Inc. and
Libra Alliance Corporation, blank check reporting companies.

     Anthony S. Clayton   Mr. Clayton is employed by Discover Financial
Services as an account manager.  From 1997 to 2001 he was employed as an
equipment technician by Fitness Equipment Source, Inc.

Section 16(a) Beneficial Ownership Reporting Compliance

     Section 16(a) of the Securities Exchange Act of 1934 requires our
directors, executive officers and persons who own more than five percent of a
registered class of our equity securities, to file with the Securities and
Exchange Commission initial reports of ownership and reports of changes in
ownership of common stock and our other equity securities.  Officers,
directors and greater than ten-percent beneficial owners are required by SEC
regulations to furnish us with copies of all Section 16(a) reports they file.
Based solely upon review of the copies of such forms furnished to us during
the fiscal year ended December 31, 2002, we believe Anthony S. Clayton failed
to file a Form 3.

                  ITEM 10: EXECUTIVE COMPENSATION

     Our named executive officers have not received any cash compensation,
bonuses, stock appreciation rights, long term compensation, stock awards or
long-term incentive rights from us during the past three fiscal years.  Ms.
Marino, who serves in a capacity similar to chief executive officer did not
receive any compensation during the 2002 fiscal year.  We have not entered
into employment contracts with our executive officers and their compensation,
if any, will be determined at the discretion of our Board of Directors.

Compensation of Directors

     We do not have any standard arrangement for compensation of our directors
for any services provided as director, including services for committee
participation or for special assignments.


                                18


<PAGE>

ITEM 11: SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     The following table sets forth the beneficial ownership of our
outstanding common stock of each person or group known by us to own
beneficially more than 5% of our outstanding common stock and ownership of our
management.  Beneficial ownership is determined in accordance with the rules
of the SEC and generally includes voting or investment power with respect to
securities.  Except as indicated by footnote, the persons named in the table
below have sole voting power and investment power with respect to all shares
of common stock shown as beneficially owned by them.  The percentage of
beneficial ownership is based on 17,600,000 shares of common stock outstanding
as of March 4, 2003.

                    CERTAIN BENEFICIAL OWNERS

                              Common Stock Beneficially Owned
                              -------------------------------
Name and Address of           Number of Shares of
Beneficial Owners             Common Stock         Percentage of Class
-----------------             ------------         -------------------

VIP WorldNet, Inc.              15,049,400           85.3%
154 E.  Ford Avenue
Salt Lake City, Utah 84124

     * VIP WorldNet, Inc. holds 15,000,000 shares and its directors and
officers beneficially own the following shares of our common stock: Joanne
Clinger, President, 42,200 and Wayne Reichman, Secretary, 7,200.


                            MANAGEMENT

                              Common Stock Beneficially Owned
                              -------------------------------
Name and Address of           Number of Shares of
Beneficial Owners             Common Stock          Percentage of Class
-------------------           ------------           ------------------
April Marino                           400            Less than 1%
402 East Maxwell Lane
Salt Lake City, Utah 84115


     ITEM 12: CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     We have not engaged in any transactions in excess of $60,000 during the
past two years involving our executive officers, directors, 5% stockholders or
immediate family members of such persons.

Parent Company

     VIP WorldNet, Inc. is our parent company and beneficially owns 15,049,400
shares of our common stock.  Such shares represent 88.3 % of our issued and
outstanding shares.

            ITEM 13: EXHIBITS AND REPORTS ON FORM 8-K

Exhibits
3.1        Articles of Incorporation, dated February 10, 1999 (Incorporated by
           reference to exhibit 3.1 of the Form 10-SB File No. 000-30951,
           filed July 6, 2000)
3.2        Bylaws  (Incorporated by reference to exhibit 3.3 of the Form 10-SB
           File No. 000-30951, filed July 6, 2000)


                                19


<PAGE>

99.1       Section 1350 Certification

Reports on Form 8-K

     None

ITEM 14: CONTROLS AND PROCEDURES

     During the year ended December 31, 2002, we formalized the procedures we
rely on to ensure that material information regarding our company and its
operations is provided to the public in a timely manner.  On March 24, 2003,
our principal executive and financial officer, April Marino, evaluated the
effectiveness of these disclosure controls and procedures and determined that
there were no significant deficiencies in these procedures.

     Also, Ms. Marino did not identify any deficiencies or material weaknesses
in our internal controls, nor did she identify fraud that involved management
or other employees who had a significant role in our internal controls.  She
did not find any deficiencies or weaknesses which would require changes to be
made or corrective actions to be taken related to our internal controls.


                            SIGNATURES


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


Date: March 25, 2003     Pinecrest Services, Inc.



                         /s/ April Marino
                    By: _________________________________________
                         April Marino
                         President and Director
                         Principal Executive and Financial Officer



    Pursuant to the requirements of the Securities Exchange Act of 1934.  This
report has been signed below by the following person on behalf of the
Registrant and in the capacities and on the dates indicated.



                                 /s/ Anthony S. Clayton
  Date: March 25, 2003      By: ________________________________________
                                Anthony S. Clayton
                                Secretary/Treasurer and Director



            PRINCIPAL EXECUTIVE OFFICER CERTIFICATION

I, April Marino, certify that:


                                20


<PAGE>

1.   I have reviewed this annual report on Form 10-KSB of Pinecrest Services,
Inc.;

2.   Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statement made, in light of the circumstances under which statements
were made, not misleading with respect to the period covered by this annual
report;

3.   Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this annual report.

4.   The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

a)   designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities,
particularly during the period in which this annual report is being prepared;

b)   evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this annual
report (the "Evaluation Date"); and

c)   presented in this annual report our conclusions about the effectiveness
of the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;

5.   The registrant's other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent function):

a)   all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to record,
process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and

b)   any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls;
and

6.   The registrant's other certifying officers and I have indicated in this
annual report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.



Date: March 25, 2003        /s/ April Marino
                            ____________________________________
                            April Marino
                            Principal Executive Officer



            PRINCIPAL FINANCIAL OFFICER CERTIFICATION

I, April Marino, certify that:

1.   I have reviewed this annual report on Form 10-KSB of Pinecrest Services,
Inc.;


                                21
<PAGE>

2.   Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statement made, in light of the circumstances under which statements
were made, not misleading with respect to the period covered by this annual
report;

3.   Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this annual report.

4.   The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

a)   designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities,
particularly during the period in which this annual report is being prepared;

b)   evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this annual
report (the "Evaluation Date"); and

c)   presented in this annual report our conclusions about the effectiveness
of the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;

5.   The registrant's other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent function):

a)   all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to record,
process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and

b)   any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls;
and

6.   The registrant's other certifying officers and I have indicated in this
annual report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.




                            /s/ April Marino
Date: March 25, 2003        ____________________________________
                            April Marino
                            Principal Financial Officer



                                22