UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                   FORM 10-KSB

(Mark One)

[X]  Annual report  pursuant to section 13 or 15(d) of the  Securities  Exchange
     Act of 1934.

     For the fiscal year ended June 30, 2001

[]   Transition  report  pursuant  to  section  13 or  15(d)  of the  Securities
     Exchange Act of 1934.


Commission file number: 0-23823

                           PIPELINE TECHNOLOGIES, INC.
              ----------------------------------------------------
             (Exact name of registrant as specified in its charter)

Colorado                                                     84-1313024
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(State of incorporation)                             (I.R.S. Identification No.)

1001 Kings Avenue, Suite 200, Jacksonville, FL                         32207
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(Address of principle executive offices)                             (Zip Code)


Registrant's telephone number, including area code:   (904) 346-0170
                                                      --------------

Securities registered under Section 12 (b) of the Exchange Act:  None

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

                          Common Stock, $.001 par value
                          -----------------------------
                                (Title of Class)

Check  whether  the issuer  (1) has filed all  reports  required  to be filed by
Section 13 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.
                                                                 [X] Yes   [] No

Check if disclosure  of delinquent  filers in response to Item 405 of Regulation
S-B is not 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 any  amendment to
this Form 10-KSB [ ].

     The aggregate  market value of the 2,451,114 shares of common stock held by
non-affiliates  of the Company was  approximately  $3,186,448  on September  27,
2001,  calculated  using the average  between the closing high bid and low asked
price thereof of $1.30 as reported on the OTC Bulletin Board.

     On September  27, 2001, a total of  10,179,375  shares of common stock were
issued and outstanding.

                      DOCUMENTS INCORPORATED BY REFERENCE:

     The Proxy  Statement  for the  Annual  Meeting of  Shareholders  to be held
December 10, 2001 is  incorporated  by reference  herein into Part III,  Items 9
through 12.

Transitional Small Business Disclosure Format:       [  ] Yes  [ X ] No

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                                TABLE OF CONTENTS



PART I........................................................................1
------

   ITEM 1.   DESCRIPTION OF BUSINESS..........................................1
   ---------------------------------
   ITEM 2.   DESCRIPTION OF PROPERTY.........................................11
   ---------------------------------
   ITEM 3.   LEGAL PROCEEDINGS...............................................11
   ---------------------------
   ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.............11
   -------------------------------------------------------------

PART II......................................................................11
-------

   ITEM 5.   MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS........11
   ------------------------------------------------------------------
   ITEM 6.   MANAGEMENTS' DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.......12
   -------------------------------------------------------------------
   ITEM 7.   FINANCIAL STATEMENTS............................................20
   ------------------------------
   ITEM 8.   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
             ACCOUNTING AND FINANCIAL DISCLOSURE.............................20
   ---------------------------------------------

PART III.....................................................................20
--------

   ITEM 9.    DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.............20
   -------------------------------------------------------------
   ITEM 10.    EXECUTIVE COMPENSATION........................................20
   ----------------------------------
   ITEM 11.   SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
              AND MANAGEMENT.................................................21
   ----------------------------------------------------------
   ITEM 12.   CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.................21
   ---------------------------------------------------------

PART IV......................................................................21
-------

   ITEM 13.   EXHIBITS AND REPORTS ON FORM 8-K...............................21
   -------------------------------------------

PART F/S....................................................................F-1
--------


SIGNATURES...................................................................24
----------

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                             Additional Information

     Descriptions  in this Report are  qualified by reference to the contents of
any  contract,  agreement  or  other  documents  described  herein  and  are not
necessarily  complete.  Reference  is made to each such  contract,  agreement or
document filed as an exhibit to this Report,  or previously filed by the Company
pursuant  to  regulations  of  the  Securities  and  Exchange   Commission  (the
"Commission").  (See "Item 13.  Exhibits,  Financial  Statements,  Schedules and
Reports on Form 8-K.").

                           Forward Looking Statements

     See "Special  Note  Regarding  Forward-Looking  Statements."  At the end of
"Item  6.  Management's  Discussion  and  Analysis  or  Plan of  Operation"  for
cautionary statements concerning  forward-looking  information contained in this
report.

                                      iii
<PAGE>

                                     PART I

Item 1. Description of Business

General

     Pipeline  Technologies,   Inc.  ("we"  or  the  "Company")  is  a  Colorado
corporation.  We were originally  founded as Wallstreet Racing Stables,  Inc. to
acquire and race thoroughbred racehorses.  In June of 2000, our subsidiary,  WRS
Merger Corp., was merged into Pipeline Technologies, Inc., a Florida corporation
("Pipeline - Florida"),  and we began operation in the communications  industry.
At that time, we began doing business under the name Pipeline  Technologies  and
formally  changed  our name to Pipeline  Technologies,  Inc. in October of 2000.
Pipeline  - Florida  was  organized  under the laws of the State of  Florida  in
December  1999.  All  references  to  our  company   include  our  wholly  owned
subsidiary,  Pipeline - Florida. We are located at 1001 Kings Avenue, Suite 200,
Jacksonville,  Florida 32207,  telephone number (904) 346-0170. Our web site can
be found at www.integriss.com.

Our Service

     We currently offer nationwide, voice over Internet protocol ("VoIP") based,
monthly  flat-rate  long  distance  communications  service.  Our  services  are
marketed under the tradename "Integriss." Customers who subscribe to our service
are offered long  distance  service for a flat monthly rate that varies  between
residential and commercial customers. We sell packages based upon light, average
and heavy usage, with each package essentially capping the total average minutes
of usage  permitted.  Our  service  is  distinguished  from that of  traditional
telephone  companies,   as  we  offer  flat-rate  long  distance  service  where
traditional telephony companies bill on a per-minute basis.

     Our VoIP service  utilizes a private  network to transmit voice in a manner
similar to information transmitted over the public Internet. However, we believe
our technology offers advantages to using the Internet as a network.  We utilize
this emerging technology to provide flat rate, long distance service to affinity
groups and members of the general public.

     We are a recent entrant into the competitive  communications  industry.  We
began offering our service in May 2000, following execution of an agreement with
a network  provider.  Our  marketing  focus is geared to  residential  and small
commercial customers.  However, as of fiscal year end June 30, 2001, we had very
few  customers  and very  limited  revenues.  We are  subject  to all the  risks
inherent in our status as a new entrant into the communications  industry.  (See
Item 6., Management's Discussion and Analysis of Financial Condition and Results
of Operation for a description of some of these risks).

     Voice  communication is currently  conducted  primarily  through  telephone
lines operated by regional telephone companies.  Despite substantial competition
among these  carriers and their  resellers,  traditional  forms of long distance
voice communication  remains relatively  expensive.  The reason for this is that
traditional voice communication takes place over independent  circuits that must
be open throughout the  conversation.  As only one conversation can be conducted

                                        1
<PAGE>

over a  circuit,  the  cost  to  complete  the  call  is  relatively  expensive.
Additionally,  traditional  phone service  customers pay a universal service fee
and a  federal  excise  tax  totaling  approximately  15%.  These  taxes are not
currently required of VoIP or Internet telephony companies.

     In its simplest form, VoIP service involves  conversion of electronic voice
impulses to digitized  data,  which is  subsequently  compressed and transmitted
over a private network. Upon reaching its destination,  this data is unscrambled
and transmitted.  With the technology  enabled by the Internet,  this voice data
can be transmitted over private networks such that  communication can occur on a
real time basis. We believe this technology provides a substantial  advantage to
either traditional telephone transmission or voice-over-Internet service.

     In order to  attract a large  number  of  customers  and grow our  services
rapidly,  we hope to develop national brand  recognition for our company and our
service through an aggressive  campaign of marketing and advertising.  If we are
successful in penetrating the market for domestic long distance service, we hope
to expand our service to include international long distance. However, this will
require  additional  agreements  with companies  that can provide  international
service.

     During the 2001 fiscal year,  our customer base ranged up to  approximately
3500 individuals or entities.  Our original network provider unexpectedly ceased
its  service  midway  through  our fiscal  year,  and we acted as an agent for a
company providing  traditional  telephone service during the time period that we
located and contracted with a replacement  network  provider.  We did not market
aggressively during this time period, because of the diminished  competitiveness
of this interim  provider.  Additionally,  the ultimate  service provider during
that time period  billed many of our  customers  excessively.  These  additional
charges were billed  without our knowledge or permission and in violation of our
contract for services.  We filed a lawsuit  against the entity we had contracted
with in an effort to, among other things,  correct the billing errors.  Although
the lawsuit is ongoing and we cannot be assured of its success,  we believe that
the customer billing issues will ultimately be resolved satisfactorily.  Because
of the billing  problems,  we lost a significant  amount of customers during the
third  quarter of our fiscal year when our services were provided by the interim
traditional service carrier.

     We also  concentrated  our efforts  during the 2001 fiscal year on internal
organizational  issues. We initially  outsourced many of our departments such as
customer  service  and  information  technology,  but found that it is more cost
effective to provide these services directly. Additionally, we were dissatisfied
with the level of service  provided  and our lack of control over the quality of
service  provided by  independent  third  parties.  We no longer  outsource  our
customer service or other departments.

     On March 21, 2001, we contracted with a new network  provider,  allowing us
to return to our original  business  plan of providing  flat-rate  long distance
services using VoIP. Our service is currently enabled by a private network owned
and operated by a network  provider whose  principal  offices are located in the
southeastern  United States.  The third party owns most of the equipment and the
other  assets  necessary  to provide  this  service.  We market the  service and
provide  customer  support,  billing  and other  administrative  services to the

                                        2
<PAGE>

customers.  Our network  provider has  constructed  and  configured a network of
fiber optic cable and various  switches  that enable the  transmission  of voice
communication in a highly efficient manner.

     We provide  customer service to our customers via a direct telephone number
to our executive  offices in the event they are not  satisfied  with the service
for any reason.  Our customer service  department is currently staffed from 9:00
a.m. to 6:00 p.m. Eastern time, Monday through Friday, and we are in the process
of  implementing  a  fully  automated   system  for  use  by  customers   during
non-business  hours that  provides  answers  and  solutions  to the most  common
customer  questions and issues.  We intend to continue to add in-house  customer
service  representatives and expand our hours of availability as we grow and our
resources permit.

     Billing for our  customers is done  directly to credit  cards,  eliminating
many accounts receivable  problems.  Since the customer pays a flat monthly rate
for domestic long distance service,  it is easy for them to budget monthly fees.
This  should  also  help  reduce  accounts  receivable  problems,  as we will be
notified  immediately  of non-payment  and can choose to discontinue  service if
necessary.

     Our web site is  fully  interactive,  in that it  provides  customers  with
information  regarding  all of our  products  and  services,  and allows them to
contract  for  services  directly  through  the site.  The site also  allows our
agents,  sales  representatives  and customer service  representative  to access
select  customer  information  through  the site  through  designated  passwords
specifying  the  clearance  level of the  user.  We  believe  we have  installed
appropriate  safeguards  to protect the integrity of the site and privacy of our
customers. We have an Information Technology department that constantly works to
monitor and upgrade our system.  The software  running our website was developed
and created specifically for our use and benefit.

     In the future,  it is our intention to expand our service to include a more
complete array of communication  services. In addition to domestic long distance
which we currently provide,  we hope to add the following services in the future
as working capital permits and our development allows:

     o    VoIP based,  monthly flat rate international long distance service. We
          plan  to  continue  to  explore   various   strategic   alliances   or
          relationships  with network operators in an effort to obtain access to
          international  markets.  Current providers include unrelated  entities
          such as ITXC Corp.,  the  operator of an  international  network  with
          locations in numerous  countries  throughout the world. It is our hope
          to execute one or more  agreements with an  international  provider in
          order  to  obtain  international   service  for  our  customers.   The
          international  market is large,  accounting for billions of dollars of
          revenue on an annual basis. We hope to add international  service as a
          complement to our existing domestic service in the future.

     o    Calling Card  services.  We also hope to offer VoIP based prepaid long
          distance  calling  cards to customers  throughout  the United  States.
          Similar to calling cards offered by a variety of other  companies,  we
          hope to offer prepaid and/or  credit-based long distance calling cards
          permitting calls anywhere in the U.S.

                                        3
<PAGE>

     o    Next generation  unified  communications  products.  Various  evolving
          technologies  allow customers an array of unified  messaging  services
          through one identification number.  Customers can access e-mail, voice
          mail, fax and additional  services  through one number that tracks the
          customer  throughout his or her daily  routine.  We hope to offer this
          service to our customers in the future.

     All of these  additional  services are currently in the planning  stage and
there is no assurance that we will be successful in  implementing  any or all of
the services.

Network Technology.

     The backbone of our current service is the private network  operated by our
network  provider.  A copy of our agreement with this provider has been filed as
an exhibit to this Report.  This agreement provides us access to the network and
equipment  maintained by our network provider in order to provide certain of our
services.

     The   network   operated   by  our   provider   is   co-located   in  major
telecommunication  companies' sites covering over 145 major  metropolitan  areas
and  approximately  70% of the  United  States.  It is based on a hub and  spoke
topography  and represents  what we believe to be one of the largest,  privately
operated fiber optic networks in the country,  assembled by agreement with other
network  providers  throughout  the  country.  It  consists  of these  connected
networks   together   with   VoIP   switches   placed  in  the   facilities   of
telecommunications  companies in various  metropolitan areas.  Coverage includes
intracity, intrastate and interstate.

     Following is a depiction of the network operated by our provider:

                        [[GRAPHIC OF PROVIDER NETWORK]]

     The agreement with our provider allows us to offer a variety of services to
our existing and potential customers. These include the flat rate voice services
currently provided,  along with unified messaging services we hope to provide in

                                        4
<PAGE>

the future.  These services are described in more detail above. For our fee, our
network  provider  has agreed to provide us access to the network and  equipment
necessary to facilitate  our services.  Our network  provider  agrees to provide
this service on a timely  basis,  to secure,  operate and maintain such services
and  facilities as shall be necessary to provide us this service and to maintain
all  necessary  and  appropriate  relationships  with other  network and service
providers.

     We have agreed to pay for the service in accordance with a schedule that we
negotiated with our network  provider.  This schedule,  originally set as a flat
rate charge,  is currently  being charged to us on a  usage-sensitive  basis for
access to the network. The rates agreed to in the schedule are subject to change
at the  discretion  of our  network  provider  in the  event  that the rates and
charges paid by it for services and  facilities  are increased at any time.  Our
network  provider  may  also  increase  rates  as a result  of  charges  paid to
governmental   authorities  or  local  exchange  carriers  in  conjunction  with
providing its service. Upon any such rate increase, we have seven days to accept
or reject the new pricing,  and terminate the contract if we do not agree to the
new pricing.

     Our  arrangement  with our network  provider may be  terminated  at certain
times and upon certain conditions.  It may be terminated by our network provider
in the event that we fail to pay any  amounts  due under the  agreement,  in the
event that we engage in conduct or activity  detrimental  to the business of our
network  provider  or if we  violate  any  material  term  or  provision  of the
agreement.  The initial term of our agreement  with our network  provider is one
year, and may be renewed for similar terms thereafter.

Recent Developments
-------------------

     Because  our  service is wholly  dependent  upon  access to a  network,  we
believe that our business  would be enhanced by  acquisition  of such a network.
Toward that end, we executed an agreement  dated  September  27, 2001 to acquire
Achieve Networks, Inc., of Dallas, Texas ("Achieve"). Achieve operates a private
IP network  that would  allow us to control  the  routing of calls and  strictly
control calling  quality.  The network is comprised of a switch owned by Achieve
connected to a fiber optic network owned by a third party. The acquisition would
create a network  footprint to cover all of the United  States and 192 countries
around  the  world.  We  would  also  be  able  to  acquire  bandwidth  that  is
point-to-point  and is dedicated solely to our use. Through a strategic alliance
with Genuity,  Inc.,  Achieve's  private network  architecture  incorporates the
latest gateway technologies available.

     The agreement  with Achieve  provides that we will acquire a minimum of 81%
of the company at the initial closing, anticipated for November 1, 2001. We will
issue a total of  3,000,000  shares of our common  stock in exchange for 100% of
Achieve,  prorated  for the 81% that we intend to acquire in the initial step of
the  transaction.  Closing is subject  to a number of  contingencies,  including
continuing  due  diligence  and  execution  of  necessary   closing   documents.
Acquisition of the remaining 19% is subject to necessary regulatory approval and
consent of those Achieve shareholders.

     The  agreement  also  requires  us,  following  the  closing and subject to
certain  conditions,  to advance funds to Achieve for  operating  expenses in an
amount  not to exceed  $500,000.  Such  maximum  amount  will be  reduced by any

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<PAGE>

advances made by the Company  prior to closing.  All amounts may be repaid to us
by  Achieve  in the  form of  access  time on its IP  network  at rate  equal to
Achieve's  cost plus 20%. We have agreed to purchase a minimum of 50,000 minutes
per month on this network.

     As a result  of the  acquisition,  Achieve  would  become a  subsidiary  of
Pipeline,  operating out of Dallas,  Texas.  Pipeline's  corporate  offices will
remain in Jacksonville, Florida.

     Assuming successful acquisition of Achieve, and as working capital permits,
we will  implement a plan to continue  to expand and upgrade  Achieve's  network
access.  The  implementation  of the  acquisition  will remove our dependence on
third parties,  and permit us to control our access costs. Our contract with our
current  network  provider  permits use of other network  providers and does not
require a minimum purchase or usage.

Marketing, Advertising and Distribution.

     In keeping with our  strategic  plan,  our marketing  and  distribution  is
geared to reach  customers in the  residential  and small business  market.  Our
marketing  efforts are designed to establish brand recognition and emphasize the
superior customer support we hope to provide.

     Our efforts  during the 2001 fiscal year were focused on the use of dealers
and agents to advertise  our services  and acquire  customers.  Our efforts were
less successful  than we had hoped, in part because of the problems  experienced
with our network providers.  The use of dealers was neither as successful nor as
cost  effective as we had hoped.  The dealers we contracted  with were unable to
bring in the level of customers  they had promised,  and the costs to us for the
customers they did bring to us were greater than  anticipated.  We no longer use
dealers to market our services.

     Our recent efforts to use independent agents have shown greater success. In
June of 2001,  shortly  before the end of our fiscal year,  we  contracted  with
certain  agents to market our  services.  Those  agents  exposed our services to
consumers  nationwide  and  produced a  significant  number of new or  potential
customers  through an  outbound  telemarketing  process.  Although  we cannot be
assured of the number of customers we will maintain or the additional  number of
new  customers  per month that we will  acquire,  we  believe  that we require a
minimum of 15,000 customers per month to break even.

     In order to develop and enhance our goal of nationwide  brand  recognition,
we have  recently  retained  the services of a marketing  firm with  substantial
experience in the telecommunications  industry.  While working within the limits
of our capital resources,  this firm has committed to work with our employees to
develop our image and brand  identification  on a nationwide basis. Such efforts
may  include  graphic  design  and  traditional  means of  advertising,  such as
television, radio, billboard and other mass communication, as well as electronic
advertising  through websites and various Internet  portals.  We hope to quickly
establish  ourselves  as a  nationally  recognized  communications  company with
appeal in many different markets.

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<PAGE>

     We have  developed  a  multi-faceted  marketing  plan  that  first  targets
residential  customers through direct marketing,  such as opt-in e-mail,  direct
mail and out-bound telemarketing.  We hope these efforts will drive consumers to
our web site, where they can thoroughly  review our product and service line and
select the service of their choice.  We have also  implemented a series of radio
advertisements  that run during major  sporting  event  pre-game  and  half-time
programs.

     Our second  marketing  focus is on  affinity  groups.  Examples of affinity
groups include state or national trade  organizations,  such as insurance  trade
groups,  banking  organizations  or  credit  unions,  and  colleges  and  alumni
associations.  In each case, the organization will earn residual income from the
ultimate sales of our services through their  sponsorship.  In essence,  we hope
that the  organizations  will act as  defacto  distributors  on our behalf in an
effort to reach the members  within each group.  We have  recently  entered into
contracts  with certain  organizations,  but these  contracts  have not yet been
implemented.

     We are also  negotiating  with various  entities to promote our products as
part  of a  package  of  goods  and  services  offered  to  consumers  or  small
businesses.  Examples  of this  marketing  focus may  include  packages  such as
security systems or the advertisement and distribution of our services in retail
outlets that carry telephone and office equipment.

     Additionally, we are utilizing commissioned independent marketing agents to
"upsell" our services.  Essentially,  when these agents contact or are contacted
by  consumers  regarding  other  products or services in which the  consumer has
expressed  an interest,  the agents will  introduce  our  services as well.  Our
services may be offered in conjunction with unified messaging services,  prepaid
local phone services, certain prepaid credit card services, and other products.

     Finally, we hope to form agreements with smaller competitive local exchange
carriers  ("CLECs"),  essentially  local phone  companies  serving  markets from
10,000 to 200,000 customers,  to sell minutes to either the CLECs themselves who
can then provide their customers with both local and long distance  service,  or
who will promote our long distance service to their local calling customers.

Regulation.

     Voice-over-Internet  telephony  is  currently  unregulated  by the  Federal
Communications  Commission (FCC). However,  efforts to regulate this service may
increase.  On May 16, 2000,  the House  passed H.R.  1291,  the Internet  Access
Charge  Prohibition  Act. The bill  prohibits  the FCC from imposing on Internet
service providers any access fees to support the Universal Service Fund that are
imposed  on  telephone  companies  - if the  "contribution"  would be based on a
measure of the time that  telecommunications  services are used in the provision
of Internet access service.

     Despite the prohibition against access surcharges,  the bill does allow the
FCC to charge access fees for Internet telephone services, regardless of whether
a  telephone  or other  apparatus  is used to place a call.  The bill  failed in

                                        7
<PAGE>

limiting the FCC to flat rate charges on Internet  phone use.  Thus, the FCC can
choose any method it wants,  including  a fee based on the  per-minute  usage by
consumers.  Although no rulings  regarding any limitations have yet been made by
the FCC,  there is no  assurance  such  regulations  may not be  adopted  in the
future.

     The FCC is  currently  considering  whether to impose  surcharges  or other
common  carrier  regulations  upon  certain  providers  of  Internet  telephony,
primarily those that provide  Internet  telephony  services to end users located
within the U.S.  While the FCC has presently  decided that  information  service
providers,  including Internet telephony providers,  are not  telecommunications
carriers,  various  companies  have  challenged  that  decision.   Congressional
dissatisfaction  with FCC conclusions  could result in requirements that the FCC
impose greater or lesser  regulation,  which in turn could materially  adversely
affect  our  business,   financial  condition,   operating  results  and  future
prospects.

     The FCC has  expressed  an  intention  to examine  the  question of whether
certain forms of phone-to-phone  Internet telephony are information  services or
telecommunications   services.  The  two  are  treated  differently  in  several
respects,  with certain information services being regulated to a lesser degree.
The FCC has noted that certain forms of phone-to-phone Internet telephony appear
to have the same functionality as non-Internet  telecommunications  services and
lack the characteristics that would render them information services.

     If the  FCC  were  to  determine  that  certain  Internet-related  services
including  Internet  telephony  services  are  subject  to  FCC  regulations  as
telecommunications services, the FCC could subject providers of such services to
traditional common carrier regulation,  including requirements to make universal
service  contributions,  and/or pay access charges to local telephone companies.
It is also  possible  that the FCC may adopt a regulatory  framework  other than
traditional  common carrier  regulation  that would apply to Internet  telephony
providers.  Any  such  determinations  could  materially  adversely  affect  our
business,  financial  condition,  operating  results and future prospects to the
extent that any such determinations negatively affect the cost of doing business
over the Internet or otherwise slow the growth of the Internet.

     State regulatory  authorities may also retain  jurisdiction to regulate the
provision of intrastate  Internet telephony  services.  Several state regulatory
authorities  have  initiated  proceedings  to  examine  the  regulation  of such
services. Others could initiate proceedings to do so.

     International.  The regulatory  treatment of Internet  telephony outside of
the U.S.  varies  widely from  country to country.  A number of  countries  that
currently prohibit competition in the provision of voice telephony also prohibit
Internet telephony. Other countries permit but regulate Internet telephony. Some
countries will evaluate proposed Internet  telephony  services on a case-by-case
basis and  determine  whether it should be  regulated  as a voice  service or as
another  telecommunications  service.  Finally,  in  many  countries,   Internet
telephony has not yet been addressed by legislation. Increased regulation of the
Internet  and/or  Internet  telephony  providers or the  prohibition of Internet
telephony  in one or  more  countries  could  materially  adversely  affect  our
business, financial condition, operating results and future prospects.

                                        8
<PAGE>

Proprietary Rights.

         Proprietary  rights are  important  to our  potential  success  and our
competitive  position.  We have registered one trademark in the U.S.,  "Ride the
Pipe," which we market our services under on college campuses.  In addition,  we
have trademark or salesmark  registration  applications pending for "Integriss,"
"Voicesync,"  "Hearing is believing"  and "Freedom is calling." The laws of some
foreign countries do not protect our proprietary rights to the same extent as do
the laws of the U.S.,  and  effective  copyright,  trademark  and  trade  secret
protection may not be available in such jurisdictions.  In general,  our efforts
to protect our  intellectual  property rights through  copyright,  trademark and
trade  secret  laws may not be  effective  to  prevent  misappropriation  of our
content,  and our failure to protect our  proprietary  rights  could  materially
adversely affect our business, financial condition, operating results and future
prospects.  Despite such protection, a third party could, without authorization,
copy or otherwise appropriate our proprietary property.

     Our  agreements  with  employees and others who  participate in development
activities could be breached,  we may not have adequate remedies for any breach,
and our trade secrets may otherwise become known or  independently  developed by
competitors, subjecting us to potential adverse business affects.

     We have developed much of our own software to operate our  interactive  web
site,  but we rely upon license  agreements  with respect to our use of software
and hardware  provided to us by our vendors.  Those license  agreements  may not
continue to be available to us on acceptable terms, or at all.

Our Competition.

     The long distance telephony market is highly competitive. There are several
large  and  numerous  small  competitors,  and  we  expect  to  face  continuing
competition based on price and service  offerings from existing  competitors and
new market  entrants in the future.  The  principal  competitive  factors in our
market  include  price,  quality of  service,  breadth of  geographic  presence,
customer service, reliability, network size and capacity and the availability of
enhanced  communications  services.  Our competitors  include major and emerging
telecommunications carriers in the U.S. and foreign telecommunications carriers.

     o    Traditional Long Distance Carriers.We consider our biggest competition
          to be traditional PSTN (public switched telephone  networks) companies
          such at AT&T,  Sprint, MCI WorldCom and the like. These companies have
          tremendous financial resources and current customer bases. They have a
          national presence and a traditional product understood and accepted by
          the general population.

     o    Calling Card Providers.  There are numerous  companies ranging in size
          from new  market  entrants  to some of the same  large  entities  with
          substantial  resources  that  provide  prepaid  calling  cards  and/or
          credit-based  billable  calling cards.  These cards provide  customers
          with some similar benefits as our products in that they may have lower
          per  minute  rates than  traditional  long-distance  carriers,  or, if
          prepaid, lessen the billing uncertainties to the consumer.

                                        9
<PAGE>

     o    10-10 Dial Around Providers.  There are hundreds of companies offering
          per minute  long-distance  rates to  consumers  via the use of a 10-10
          dial  around  number.  That is,  the  consumer  dials  "10-10"  plus a
          designated  access  number and is charges  according to the  agreement
          with the provider.  Many of these per minute charges are significantly
          lower than traditional per minute  long-distance  carrier charges, and
          may or may not have minimum call charges as part of the plans.

     o    Internet Protocol and Internet Telephony Service Providers. During the
          past several  years, a number of companies  have  introduced  services
          that make  Internet  telephony  or voice  services  over the  Internet
          available to businesses and consumers. Many Internet service providers
          (ISPs) exist, but currently transmit only data and not voice. It would
          be  possible  for  these  ISPs  to  compete  if they  invested  in the
          necessary  hardware to transmit voice or teamed with entities  willing
          to  provide  the  switches  that  translate  voice  to  data.

     o    VoIP Providers.  Other United States  providers of VoIP  long-distance
          services    to    consumers    include     Net2Phone,     IconnectHere
          (DeltaThree.com's   consumer   product,   CNM  Networks,   Inc.,   and
          Wherever.net. Many providers utilize the public Internet, which cannot
          offer the quality of  transmission  of private  networks,  and certain
          providers only offer PC to PC or PC to phone  products,  as opposed to
          phone to phone VoIP services.

     Many of our competitors have substantially greater financial, technical and
marketing resources, larger customer bases, longer operating histories,  greater
name  recognition  and more  established  relationships  in the industry than we
have.  As a  result,  certain  of these  competitors  may be able to adopt  more
aggressive  pricing  policies  that could  hinder our ability to market our VoIP
services.  We believe  that our key  competitive  advantages  are our ability to
deliver  reliable,  high quality voice service in a  cost-effective  manner.  We
cannot  assure  you,  however,  that this  advantage  will  enable us to succeed
against comparable service offerings from our competitors.

Employees.

     We currently  employ a total of 24  individuals,  including ten in customer
development/customer service, two in finance and accounting, including our Chief
Financial  Officer,  three in  administration,  including  our  Chief  Executive
Officer,  five in our information  technology  department and four in marketing.
Our two executive officers serve us pursuant to written employment contracts for
a period of four years.  Most other employees are employed at- will. None of our
employees are covered by  collective  bargaining  agreements,  and we believe we
enjoy excellent relations with our employees.

         We  anticipate  adding  additional  employees  as our  working  capital
permits and the needs of our business  dictate.  Additional  individuals will be
retained to service  significant  accounts  that we  successfully  obtain in the
future.  We also expect to retain  additional  assistance  in customer  service,
technology and operations.

                                       10
<PAGE>

Item 2. Description of Property.

         The Company  owns no real  property as of the date of this  report.  We
currently lease 4,500 square feet of office space under a 60-month lease through
March 31, 2005.  The lease  provides for two  five-year  renewal  options at the
prevailing  market rate.  The current  monthly  rental is $5,213 plus sales tax,
utilities  and  maintenance  expenses.  The lease  provides  for annual  monthly
increases of $188 per month (i.e.  an annual  escalation of 50 cents per square)
that  commenced  in  March  of  2001.  We  anticipate  that we may need to lease
additional  space as our customer base grows;  however,  we believe our space is
adequate for our needs for the foreseeable future. Additional space is available
in our building and we believe that, if needed,  we could lease additional space
at comparable rates.

Item 3. Legal Proceedings.

     We are unaware of any material  litigation pending or threatened against us
or in  which  any of our  officers  or  directors  are  parties  adverse  to our
interest.  In the  future,  we may be party to  routine  matters  of  litigation
relating to our business  that we do not believe will have a material  effect on
our financial condition or operations.

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

     No matters were submitted to the security holders,  through solicitation of
proxies or  otherwise,  during the fourth  quarter of the fiscal year covered by
this Report.

                                     PART II

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

     Our common  stock  currently  trades over the counter  and  quotations  are
currently reported on the "Bulletin Board" maintained by the NASD. The following
table shows the range of high and low bids for our common stock for the last two
fiscal  years or  portions  thereof as reported  by the NASD.  Prices  represent
quotations  between  dealers,  do not  include  retail  mark-ups,  markdowns  or
commissions and do not necessarily represent prices at which actual transactions
occurred.

Fiscal Quarter Ended      High         Low
                          ----         ---

         1999
September 30             $   5.13    $   2.88
December 31                  3.78        2.19


                                       11
<PAGE>





Fiscal Quarter Ended      High         Low
                          ----         ---
         2000
March 31                     9.63        2.56
June 30                      7.25        3.25
September 30                 6.69        4.88
December 30                  6.06        2.50

         2001
March 31                     4.50        1.96
June 30                      6.45        2.10

     As of June 30,  2001  there  were  approximately  39 record  holders of our
common stock.  No dividends  have been paid with respect to our common stock and
we have no plans to pay dividends in the foreseeable  future.  Payment of future
dividends,  if any, will be at the  discretion  of our Board of Directors  after
taking into account various factors, including our financial condition,  results
of operations, current and anticipated cash needs and plans for expansion.


Item 6. Managements' Discussion and Analysis or Plan of Operation.

Overview

     Effective  June 21,  2000,  we  acquired  all of the  outstanding  stock of
Pipeline,  then a privately  held  Florida  corporation.  This  acquisition  was
accomplished through a merger of our wholly owned subsidiary,  WRS Merger Corp.,
with Pipeline. As a result of that transaction, Pipeline became our wholly owned
subsidiary. Pipeline was originally organized in December 1999 to operate in the
communications industry.

     Effective with the date of acquisition,  we issued  8,453,425 shares of our
common stock to the former shareholders of Pipeline,  representing approximately
89.5% of our then-issued and outstanding common stock.  Because of the number of
shares issued in  connection  with the  acquisition,  the  transaction  has been
treated  for  accounting  purposes as a  recapitalization  of Pipeline as though
Pipeline were the acquiring entity,  although from a legal  standpoint,  we were
the acquiring  entity.  The  transaction  was  essentially  treated as a reverse
acquisition for accounting purposes, as if Pipeline had acquired us.

     Historically,  Pipeline  had a fiscal  year  end of  December  31.  Because
Pipeline was deemed the acquiring  entity for  accounting  purposes,  its fiscal
year survives for reporting purposes under relevant rules of the Commission.  On
August 22,  2000,  a  determination  was made to change  the fiscal  year end of
Pipeline  from  December 31 to June 30. The decision  was made by the  Company's
Board of  Directors  and was  effective  for the period  ending  June 30,  2000.
Consequently,  the financial  statements  for the period ended June 30, 2000 are
for a six -month  period,  rather than twelve  months,  as would normally be the
case. Our shareholders approved changing our name to Pipeline Technologies, Inc.
at our shareholders' meeting held in October of 2000.

Results of Operations

     Year ended June 30, 2001.  During the year ended June 30, 2001, we realized
a net loss of $3,988,518,  or $(.39) per share, on revenue of $389,873. While we
recorded  sufficient  revenue  such  that  we are no  longer  considered  in the
development  stage for accounting  purposes,  our costs of sales,  operating and

                                       12
<PAGE>

other  expenses far exceeded our revenue,  resulting in a substantial  net loss.
The net  loss  for the year  ended  June 30,  2001  represents  an  increase  of
$3,009,471,  or  approximately  310 %, from the six month  period ended June 30,
2000.  One reason for the  substantial  increase  in the net loss is that we are
comparing a twelve-month  period ended June 30, 2001 to a six-month period ended
June 30, 2000.

     As was the case during the six months ended June 30, 2000,  our revenue for
the year ended June 30, 2001 was insufficient to cover cost of sales. During the
2001 fiscal year, we realized a negative  gross profit of $355,408,  which means
our cost of revenue exceeded our revenue by that amount.  The primary reason for
this shortfall has been our inability to obtain access to a reliable  network at
an  acceptable  cost.  Our  business  model  contemplates  contracting  with  an
independent,  third party  network  provider  to avoid the  capital  expenditure
necessary  to develop our own network.  However,  the  proposed  acquisition  of
Achieve  Networks  would allow us to control our network  access,  and hopefully
reduce our cost of sales substantially in the future.

     On May 1, 2000, we contracted with a network provider that we considered an
affordable,  reliable  source of  serving  our  customers.  Unfortunately,  that
provider became insolvent during the fiscal year. We were forced to quickly find
an  alternative  provider,  and  utilized a  traditional  service  provider as a
temporary  solution.  For a brief period, we acted as an agent for this licensed
carrier.  Unfortunately,  our customers,  who had already paid us a flat fee for
long distance service, received additional bills from the licensed carrier. This
billing was done without our  knowledge or control,  and we are still working to
remedy  the  overbilling  by  the  licensed  carrier.   As  a  result,  we  lost
approximately two-thirds of our former customers.

     We subsequently  contracted with a new Internet  telephony provider to gain
network access.  While we do not have a monthly minimum payment,  as we did with
our first  provider,  our costs under the contract are not as  competitive as we
had hoped.  Our  marketing  efforts for the last quarter of the 2001 fiscal year
were  marginally  successful  in gaining  additional  customers.  Subsequent  to
year-end,  we have improved our success based on a telemarketing  campaign by an
independent  agent.  While  it is too  early  to  determine  how  many of  these
customers we will retain,  we believe  revenue from these customers will improve
over the comparable period of the 2001-year.

     Our inability to find an acceptable  network  provider has been the primary
obstacle to our operations since our inception. It is also a primary impetus for
the proposed  acquisition of Achieve Networks,  Inc.,  discussed elsewhere under
Item 1, Recent Events. While there is no assurance that this acquisition will be
successfully  completed, we hope it will remedy the problems we have experienced
in the past with independent network providers.

     In addition to costs of sales, operating expenses included selling, general
and  administrative  expenses in the amount of  $2,734,962.  Material  operating
expenses included approximately  $1,230,000 in compensation expenses,  including
salaries,  payment  for  contract  labor,  insurance,  and payroll  taxes.  This
represents an increase of $1,148,262, or 1400%, compared to the six months ended
June 30, 2000.  This increase  reflects an increase from seven employees for the
previous six-month period to twenty-four  full-time  employees at the end of the

                                       13
<PAGE>

2001 fiscal year. We also recorded  $520,000 in non-cash  expenses in connection
with the  issuance  of stock to  consultants  for  services  rendered  to us. An
additional  $98,000 was  incurred in  commissions  to agents for the 2001 fiscal
year, a 100% increase over the previous  period when we paid no  commission.  We
first utilized  telemarketing agents to assist in obtaining customers during the
2001 year. Investment banking fees decreased by $54,500 for the 2001 fiscal year
and legal fees of $248,000 reflected an increase of $213,659,  attributable to a
dispute with a former service provider. Rent accounted for $76,000,  advertising
and  promotions  approximately  $58,000 and $50,000 for travel  expenses.  These
expenses remained relatively level when compared on an annual basis.

     We also incurred  approximately $900,000 in interest and financing expenses
($700,000  in  financing  costs  and  $200,000  in  interest)   associated  with
outstanding  debt.  These also were non-cash  expenses.  Due to our inability to
obtain  equity   financing  to  meet  operating   expenses,   we  have  borrowed
substantially  to meet cash flow  requirements.  We currently  have  outstanding
approximately  $2,700,000 in debt,  bearing interest at 12% per annum and due on
demand.  We hope to  convert  some or all of this  outstanding  indebtedness  to
equity,  but  no  specific   arrangements  have  been  made  with  the  lenders.
Accordingly, interest continues to accrue on the outstanding balance.

     We expect to incur losses until such time as our revenue is  sufficient  to
cover our cost of service and our general and administrative expenses.  However,
due to our limited operating  history,  we are unable to predict with any degree
of accuracy when that time will come.

     Six months ended June 30, 2000.  During the six month period ended June 30,
2000,  we  realized a net loss of  $979,047,  or $(.12) per share,  on $1,095 of
total revenue.  We remained in the development  stage during that time,  without
significant revenue from operations.

     During  the six months  ended June 30,  2000,  general  and  administrative
expenses  represented our greatest  expense.  A majority of those  expenses,  in
turn,  were  related to costs of our merger with  Pipeline and  resolution  of a
dispute with former  shareholders of another  communications  company. We paid a
total of $611,860 in connection with the merger and to resolve that dispute, all
of which was  expensed  during the  six-month  period.  Salaries  accounted  for
approximately  $75,000 of expense during the six months,  while  advertising and
promotion  added  approximately  $34,000 of  expense.  We also paid  $137,500 in
investment  banking fees in connection  with financing  which we obtained during
the period.

     Inception  through  December  31,  1999.  During the period from  inception
(December 2, 1999) through  December 31, 1999, we realized a net loss of $9,608,
or $0.00 per share,  on no revenue.  During that period,  we were only  recently
organized and had not yet implemented our business plan. Our loss was related to
general and  administrative  expenses  associated  with our business,  including
rent, salary and office expense.

Liquidity and Capital Resources.

     June 30,  2001.  Our  financial  condition  at June 30, 2001  continued  to
decline  from the previous  fiscal year end. At June 30, 2001,  we had a working
capital  deficit of  $(3,655,894),  consisting of current  assets of $21,332 and

                                       14
<PAGE>

current liabilities of $3,677,226.  This represents a decrease of $2,888,822, or
approximately  376%,  from fiscal  year end June 30,  2000.  We also  reported a
deficit in shareholders' equity of $(3,503,214) at June 30, 2001.

     Based in part on the  deficit  in our  working  capital  and  shareholders'
equity, the report of our independent  accountants  contains a contingency about
our ability to continue as a going  concern.  We have also incurred  substantial
losses  from  operations  since  inception.  Our  efforts to rectify our adverse
financial  condition and improve  operations  include those outlined above under
Results of  Operations,  as well as our continuing  efforts to obtain  financing
from outside  sources.  We believe our ability to obtain  additional  capital is
dependent on our success in generating additional customers. As mentioned above,
we have  experienced  some success  subsequent  to fiscal year end 2001. We will
continue efforts toward that end, as well as seeking additional opportunities to
increase  capital.  However,  there  is  no  assurance  those  efforts  will  be
successful.

     All of  our  debt  is due on  demand,  and  is  accordingly  classified  as
short-term.  We  continue  to work with the  owners of this debt in an effort to
refinance or convert the debt into equity.  We are also negotiating to determine
the extent of our  obligation  to issue  warrants  to the holder of some debt in
connection  with a  commitment  that we made at the time  the  debt was  issued.
Again, there is no assurance that these efforts will be successful.

     During the year ended June 30, 2001, we financed  substantially  all of our
operations  from the proceeds of notes  payable.  A substantial  portion of such
amount was issued to a single  individual.  Our experience during the year ended
June 30, 2001 is  substantially  similar to the period ended June 30, 2000, when
we issued a net amount of $1,200,000 in short-term  debt to finance  operations.
We believe our efforts to obtain capital through equity  financing was adversely
affected by our operations,  as well as declines in the stock market in general,
as well as the telecom industry specifically.

     The need to finance  substantially  all of our operations by debt financing
is due in part to our failure to close two equity financings that we had planned
during the fiscal year. Each offering,  totaling up to $10 million, was designed
to provide  cash for  operations  to continue  our  business  plan and provide a
contingency  for  the  future.  However,  we  were  unable  to  complete  either
transaction,  perhaps  reflecting  the  adverse  economy and  conditions  in the
capital markets.

     During the year ended June 30, 2001, we issued 200,000 shares of our common
stock at a total value of $700,000 in connection with  short-term  loans that we
received.  We also  issued  480,000  shares  valued at $520,000  for  consulting
services.  That entire amount was charged to  operations.  Partially  offsetting
these  transactions,  a shareholder  donated a total of 450,000 to our treasury,
which shares were subsequently cancelled.

     Our continuing needs for working capital include cost of sales, general and
administrative expenses, repayment of debt and interest.

     June 30,  2000.  At June 30, 2000,  we had a deficit in working  capital of
$(767,072),  consisting of current assets of $246,256 and current liabilities of

                                       15
<PAGE>

$1,013,328.  We also  had a  substantial  deficit  in  shareholders'  equity  of
$(734,696).  At June 30, 2000, we were still in the development  stage with very
limited revenue.

     Our greatest  needs for capital as we entered the 2001 fiscal year included
contract payments to our network provider, payment of general and administrative
expenses  and   retirement  of   short-term   debt.   Our  agreement   with  our
communications network provider at the time required minimum monthly payments of
$50,000.  That network provider  subsequently  failed,  and, while relieved from
that monthly payment, we had to obtain alternative network access.

     During the six month  period ended June 30,  2000,  we borrowed  $1,000,000
from private individuals or entities,  $925,000 of which remained outstanding at
June 30,  2000.  The  proceeds  of those loans were  utilized  to pay  operating
expenses and to settle  certain  litigation.  These notes are payable in full on
June 21, 2001.  We also  require cash for payment of general and  administrative
expenses, including ongoing salaries, legal and accounting fees.

     We financed the remainder of our capital requirements during the six months
ended  June  30,  2000  through  the  sale  of our  common  stock  in a  private
transaction. We sold 500,000 shares of our common stock to two private investors
in exchange  for  cancellation  of  promissory  notes in the amount of $252,952,
including  principal and interest.  The proceeds of that  financing were used to
defer operating expenses set forth in more detail below.

Special Note Regarding Forward-Looking Statements

     Certain statements contained herein constitute "forward looking statements"
within the meaning of the Private Securities Litigation Reform Act of 1995. Such
forward looking  statements are identified by words such as "hopes,"  "expects,"
"anticipates," "plans" and the like and include, without limitation,  statements
regarding our plan of business operations and related  expenditures,  receipt of
working  capital,  potential  contractual  arrangements,  anticipated  revenues,
related expenditures and completion of proposed acquisitions. Factors that could
cause actual results to differ materially include,  among others, the following:
receipt of additional  working capital,  acceptance of the Company's  service in
the market place, competition, new regulations which might be adopted by Federal
or state  governments,  our costs and the pricing of our services,  the level of
demand for our services,  changes in our business  strategies  and other factors
set forth herein.  Additional  factors are outlined  immediately  below. Most of
these  factors are outside the control of the Company.  Investors  are cautioned
not to put undue  reliance on  forward-looking  statements.  Except as otherwise
required by applicable securities statutes or regulations, the Company disclaims
any intent or obligation to update  publicly these forward  looking  statements,
whether as a result of new  information,  future  events or  otherwise.  Because
forward-looking  statements  involve future risks and  uncertainties,  there are
factors  that  could  cause  actual  results  to differ  materially  from  those
expressed or implied. Some of these risks include, among others, the following:

     We are entirely  dependent on a third party for access to the network.  Due
to our  limited  working  capital  and  operating  experience,  we are  entirely
dependent  on our  network  provider  for  access to the  network  essential  to
providing  our service.  As a result,  we are entirely  dependent on our network

                                       16
<PAGE>

provider to operate our business. An interruption or failure in their network or
termination  of service  would  adversely  affect our  customers  and results of
operation. We essentially act as a reseller of service made possible through our
network  provider.  While we believe other  network  providers may be available,
there is no  assurance  that such  access  can be  obtained  on terms  which are
acceptable or which would result in profit.  Furthermore,  there is no assurance
that our  agreement  with our  network  provider  can be renewed  following  its
expiration.  We are  negotiating  an  acquisition  of an  entity  that acts as a
network provider, but we cannot be assured that acquisition will be successfully
consummated.

     Our  success  depends  on our  ability  to keep up  with  rapidly  changing
technology. We depend on a network, computers,  telecommunications equipment and
software  capabilities to run our business.  However,  we do not have sufficient
capital to invest in development of our own equipment or software. Consequently,
we are dependent on the resources of third parties to maintain our technological
advantage.  Our failure to maintain  the  competitiveness  of our  technological
capabilities or respond  effectively to  technological  change could  negatively
affect our  business,  results of operation or  financial  condition.  We do not
invest funds in research and  development.  We primarily  depend on products and
services  developed by independent third parties for our technology.  Our future
viability  and  profitability  will depend on numerous  factors,  including  our
ability  to (i)  market  our  existing  technology  to a  sufficient  number  of
customers;  (ii) increase our service offerings to attract additional customers;
and (iii) keep up with  technological  change in our industry.  We cannot assure
that technologies or services developed by our competitors,  especially those in
the  voice-over-Internet  arena,  will  not  render  our  products  or  services
non-competitive or obsolete.

     In the event we experience difficulty managing our operations,  our chances
of achieving  profitability may be reduced.  Our future performance will depend,
in part, on our ability to manage our anticipated  growth  effectively.  To that
end, we will have to undertake the following tasks:

o    Continue to develop our operating, administrative, financial and accounting
     systems and controls;

o    Improve   coordination  among  our  accounting,   finance,   marketing  and
     operations personnel;

o    Enhance our management information systems capabilities;

o    Evaluate and perfect our customer service; and

o    Hire and train additional qualified personnel.

If we cannot accomplish these tasks, our chances of achieving profitability will
be diminished.

     Our use of  independent  agents to market our service  raises the risk that
customers may only use our service on a temporary basis or demand refunds of the
related  charges.  Although we endeavor to manage and perform as much  marketing
through our own  employees  as  possible,  we must also depend on the efforts of
third-party agents to contact customers and acquaint them with our services.  We

                                       17
<PAGE>

simply do not have the  financial  resources at this time to hire and maintain a
marketing staff sufficient to perform these functions.  Pursuant to the terms of
our arrangements, these independent agents may contract with customers directly,
without our knowledge or approval. Because these agents are paid on a commission
basis,  they may be motivated to use  aggressive  tactics in an effort to engage
more  customers.  In  addition,  customers  who  contract  on  the  basis  of  a
telemarketing  call, rather than through their own investigation,  have a higher
likelihood of canceling the service after a trial period. We continually monitor
the sales  practices of these  agents in an effort to insure that their  tactics
are appropriate.  None-the-less,  customers may cancel our service shortly after
commencement  and we may be forced to refund  charges to customers who notify us
that they obtained our service  without their consent.  Because of the potential
incidents of customer  cancellations,  our  customer and revenue  level may vary
dramatically from month to month.

     We may be unable to complete  anticipated  acquisitions.  We have  recently
executed an agreement to acquire a majority interest in a network operator in an
effort  to  compliment  our  business  plan.  While  the  definitive   agreement
anticipates  closing  on  November  1,  2001,  there  is no  assurance  that the
acquisition  will be  successfully  completed.  Closing  is  subject  to certain
conditions,  including  continuing  due diligence  and execution of  appropriate
closing  documents.  We are  presently  working  to  satisfy  those  conditions.
However, our failure or inability to complete this acquisition may result in our
loss of access to the network,  increased  costs for network access and/or other
adverse effects on our business and operations.

     Because we are unable to predict the volume of usage on the network that we
lease,  we may be forced to enter  into  disadvantageous  contracts  that  would
reduce our operating margins.  Because of our limited operating history,  we are
unable to predict with any degree of accuracy the volume of usage on the network
that we lease.  Furthermore,  since we do not own the network,  we are unable to
control  access by third  parties.  This may result in  overuse of the  network,
impeding or impairing call quality or  transmission.  While our network provider
has  pledged  to  increase  the  capacity  as our usage  increases,  there is no
assurance it will successfully complete that expansion. We may therefore have to
enter into other long-term agreements for leased capacity.  Long-term agreements
for  network   capacity  may  adversely  effect  our  operations  and  financial
performance.

     Our  business  may suffer if we lose the service of any key  personnel.  We
depend on the continued services of a key management  employee.  This individual
is Timothy J. Murtaugh,  President and Chief  Executive  Officer.  Mr.  Murtaugh
founded the Company and is primarily  responsible  for  marketing  the Company's
service.  The loss of the services of Mr.  Murtaugh could  adversely  affect our
business.  While we have an employment  agreement with Mr. Murtaugh for a period
of four years,  we maintain no "key man" life insurance on his life. The loss of
this individual would adversely affect our business.

     Our failure to attract and retain  affiliates,  distributors  and customers
will  negatively  affect our  business.  If we are unable to attract  and retain
affiliates,  distributors and customers,  our revenues will suffer and adversely
affect our results of  operations.  Our  business  is  dependent  on  attracting
affiliates or affinity  groups who we hope will help market our service to their
members.  These  potential  affiliates  include  credit  unions,   colleges  and

                                       18
<PAGE>

universities,  social, fraternal, trade and other organizations. We also hope to
reach additional agreements with distributors to assist in marketing our service
to end-users.  However,  our ability to attract  affiliates  and customers  will
depend on a number of factors, including:

o    Our ability to reach agreement with affinity  groups,  telephony  resellers
     and individual  customers regarding the terms and conditions  applicable to
     our business relationship;

o    Our  success  in  marketing  our  service  to  potential  new and  existing
     affiliates and customers;

o    Pricing by traditional carriers;

o    The rate at which we are able to deploy our service;

o    Consolidation in the telecommunications industry; and

o    The quality of the customer and technical support we provide.

     Any  damage to or  failure  of our  system or  operations  could  result in
reductions  in, or  termination  of, our  service.  Our  success  depends on our
ability to provide  efficient  and  uninterrupted,  high  quality  service.  The
network which we lease,  our systems and  operations are vulnerable to damage or
interruption from natural disasters,  power loss,  telecommunications  failures,
physical or electronic  break-ins,  sabotage,  intentional  acts of vandalism or
similar events that may or may not be beyond our control.  The occurrence of any
or all of these events could hurt our reputation and cause us to lose customers.

     Changes in governmental  regulation of VoIP services could result in a loss
of  competitive  advantage.  Our  success  depends  on our  ability to provide a
competitive  product.  If government  regulations  provide for the imposition of
surcharges  to  VoIP  providers  such  as  access  or  universal   service  fund
contributions,  or other  regulations  that impose an  additional  cost of doing
business or charge to the end-user will negatively impact our ability to offer a
competitively  priced  product.  Without a  competitively  priced  product,  our
ability to compete, gain market share, and attain or maintain  profitability may
be seriously  compromised.  While we are not aware of any legislation  currently
pending  that may impose  such  charges,  the FCC  continues  to examine  issues
relating to emerging  technologies  and how to  categorize  the  companies  that
provide such technology.

                                       19
<PAGE>


Item 7. Financial Statements.

     Reference is made to the Index of Financial Statements following Part IV of
this  Report  for a listing  of the  Company's  financial  statements  and notes
thereto.

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

Changes in our accountants

     We retained Stark Tinter & Associates,  LLC, independent  accountants,  now
known as Stark Winter  Schenkein & Co., LLP, to audit our  financial  statements
for the  period  ended  June  30,  2000.  Stark  Winter  replaced  Kish  Leake &
Associates,  P.C.,  who acted as the accountant for us and audited our financial
statements  for the year ended  December 31, 1999. The dismissal of Kish Leake &
Associates,  P.C.  and  retention  of Stark  Winter was approved by our Board of
Directors.

     The reports of Kish Leake & Associates, P.C. for the two fiscal years ended
December 31, 1999 did not contain an adverse  opinion or a disclaimer of opinion
and were  not  qualified  or  modified  as to any  uncertainty,  audit  scope or
accounting principles.

     During the two fiscal years ended  December 31, 1999 and the interim period
prior  to  their  dismissal,  there  were no  disagreements  with  Kish  Leake &
Associates, P.C. on any matter of accounting principles or practices,  financial
statement  disclosure or auditing scope or procedure,  which, if not resolved to
the satisfaction of Kish Leake & Associates,  P.C., would have caused Kish Leake
& Associates,  P.C. to make  reference to the matter in their  report.  Further,
there  were  no   reportable   events  as  that  term  is   described   in  Item
304(a)(1)(iv)(B) of Regulation S-B.

     During the two fiscal  years and the  subsequent  interim  period  prior to
their  engagement,  the Company had not  consulted  Stark Winter  regarding  any
matter requiring disclosure.

                                    PART III

Item 9. Directors and Executive Officers of the Registrant.

     The information  required by this item is incorporated  herein by reference
from the Company's  proxy statement for the annual meeting of shareholders to be
held December 10, 2001.

Item 10. Executive Compensation.

     The information  required by this item is incorporated  herein by reference
from the Company's  proxy statement for the annual meeting of shareholders to be
held December 10, 2001.

                                       20
<PAGE>

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

     The information  required by this item is incorporated  herein by reference
from the Company's  proxy statement for the annual meeting of shareholders to be
held December 10, 2001.

Item 12. Certain Relationships and Related Transactions.

     The information  required by this item is incorporated  herein by reference
from the Company's  proxy  statement for the annul meeting of shareholders to be
held December 10, 2001.

                                     PART IV

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

(a)  Exhibits

     The following is a list of exhibits filed or incorporated by reference into
this Report:

No.      Description

2.1(1)   Articles of Merger,  Pipeline  Technologies,  Inc., as the survivor and
         WRS Merger Corp.,  dated April 28, 2000, as filed with the Secretary of
         State of the State of Colorado on June 21, 2000.

2.2*     Share Exchange Agreement and Plan of Reorganization between the Company
         and Achieve Networks, Inc. dated September 27, 2001.

3.1(2)   Articles of Incorporation, of  Wallstreet Racing Stables, Inc. as filed
         on July 18, 1995 with the Colorado Secretary of State.

3.2(2)   Articles of Amendment to the Articles of  Incorporation  of Wallstreet
         Racing  Stables, Inc., as filed on September 13, 1995 with the Colorado
         Secretary of State.

3.3(6)   Articles of Amendment to the  Articles  of  Incorporation of Wallstreet
         Racing Stables, Inc., as  filed  on  October 27, 2000 with the Colorado
         Secretary of State.

3.4*     Articles of Amendment to the  Articles  of  Incorporation  of  Pipeline
         Technologies,  Inc., as  filed  on November 16,  2000 with the Colorado
         Secretary of State.

3.5(2)   Bylaws of Wallstreet Racing Stables, Inc.

3.6(2)   Amendment to the Bylaws of Wallstreet Racing Stables, Inc.

4(2)     Form of Certificate for Common Stock.


                                       21
<PAGE>

9        Not applicable.

10.1(5)  Employment Agreement between Pipeline Technologies, Inc. and Timothy
         J. Murtaugh dated May 1, 2000.

10.2(5)  Employment Agreement between Pipeline Technologies, Inc. and Robert
         L. Maige dated July 1, 2000.

10.3(5)  Lease between Pipeline Technologies, Inc. and Upchurch-Sutton, Inc.,
         dated February 28, 2000.

10.4(*4) Services Agreement dated March 28, 2001 between Pipeline Technologies,
         Inc. and a network provider.

10.5(5)  Form of Convertible Loan Agreement dated June 21, 2000.

10.6(2) Non-Qualified Stock Option and Grant Plan dated August 1, 1995.

11       Not applicable.

13       Not applicable.

16(3)    Letter, dated  August 21, 2000, from former certifying accountant, Kish
         Leake & Associates, P.C.

18       Not applicable.

21(5)    List of subsidiaries.

22       Not applicable.

23       Not applicable.

24       Not applicable.

25       Not applicable.

26       Not applicable.

99       Not applicable.

-------------------------
* Filed herewith.

(1) Filed as an Exhibit to Form 8-K dated July 5, 2000 and  incorporated  herein
by reference.

                                       22
<PAGE>

(2) Filed as an Exhibit to Form SB-2, File No.  333-29859,  on June 20, 1997 and
incorporated herein by reference.

(3) Filed as an  Exhibit  to Form 8-K/A  dated  July 24,  2000 and  incorporated
herein by reference.

(4) Material  identifying the party to this agreement has been omitted  pursuant
to  a  request  for  confidential   treatment  and  filed  separately  with  the
Commission.

(5) Filed as an Exhibit to our Transitional Report on Form 10-KSB for the period
ended June 30, 2000, and incorporated herein by reference.

(6) Filed as an Exhibit to Form 10-QSB for the quarter ended September 30, 2000,
and incorporated herein by reference.


(b) Reports on Form 8-K.

         The  Company  has not filed any  Reports  on Form 8-K during the fourth
quarter of the fiscal year covered by this report.

                                       23
<PAGE>

                         REPORT OF INDEPENDENT AUDITORS


Shareholders and Board of Directors
Pipeline Technologies, Inc.
Jacksonville, Florida

We have  audited  the  accompanying  consolidated  balance  sheets  of  Pipeline
Technologies,  Inc. as of June 30, 2001, and the related consolidated statements
of  operations,  stockholders'  (deficit)  and cash  flows for the  period  from
December 2, 1999 (inception) to December 31, 1999, the six months ended June 30,
2000 and the year  ended  June 30,  2001.  These  financial  statements  are the
responsibility of the Company's management.  Our responsibility is to express an
opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the  United  States of  America.  Those  standards  require  that we plan and
perform the 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 by management, as well as evaluating the overall financial
statement  presentation.  We believe that our audits provide a reasonable  basis
for our opinion.

In our opinion, the consolidated  financial statements referred to above present
fairly,  in  all  material   respects,   the  financial   position  of  Pipeline
Technologies,  Inc. as of June 30, 2001,  and the results of its  operations and
cash flows for the period December 2, 1999 (inception) to December 31, 1999, the
six months ended June 30, 2000 and the year ended June 30, 2001,  in  conformity
with accounting principles generally accepted in the United States of America.

The accompanying  consolidated  financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in Note 1 to the
financial statements, the Company has suffered recurring losses from operations,
has a  stockholders'  deficit and has negative  working  capital.  These factors
raise  substantial  doubt  about the  Company's  ability to  continue as a going
concern.  Management's  plans in regard to these  matters are also  discussed in
Note 1. The  financial  statements  do not  include any  adjustments  that might
result from the outcome of this uncertainty.


/s/ Stark Winter Schenkein & Co., LLP
-------------------------------------
Stark Winter Schenkein & Co., LLP
Denver, Colorado
September 6, 2001

                                       F-1
<PAGE>

                           Pipeline Technologies, Inc
                           Consolidated Balance Sheet
                                  June 30, 2001

Assets

Current assets:
   Cash                                                             $     2,312
   Accounts receivable                                                   11,141
   Other current assets                                                   7,879
                                                                    -----------
      Total current assets                                               21,332
                                                                    -----------

Property and equipment, net                                              87,567
                                                                    -----------

Other assets:
   Deposits                                                              65,113
                                                                    -----------

                                                                    $   174,012
                                                                    ===========

Liabilities and stockholders' (deficit)

Current liabilities:
   Accounts payable                                                 $   528,882
   Accounts payable - affiliates                                         18,474
   Accrued expenses                                                     430,427
   Deferred revenue                                                      27,060
   Notes payable                                                      2,672,383
                                                                    -----------
                                                                      3,677,226
                                                                    -----------

Stockholders' (deficit)
   Common stock, $.001 par value,
      15,000,000 shares authorized,
      10,179,375 shares issued and outstanding                           10,179
   Additional paid in capital                                         1,463,780
   Accumulated deficit                                               (4,977,173)
                                                                    -----------
                                                                     (3,503,214)
                                                                    -----------

                                                                    $   174,012
                                                                    ===========
                                       F-2
<PAGE>

<TABLE>

                           Pipeline Technologies, Inc.
                      Consolidated Statements of Operations
                      For the Year Ended June 30, 2001, the
                         Six Months Ended June 30, 2000
      and the Period From Inception (December 2, 1999) to December 31, 1999
<CAPTION>

                                                                                    Inception
                                                                                    December 2,
                                                    Year Ended      Six Months       1999 to
                                                     June 30,      Ended June 30,  December 31,
                                                       2001           2000             1999
                                                   ------------    ------------    ------------


<S>                                                <C>             <C>             <C>
Revenue                                            $    389,873    $      1,095    $       --
                                                   ------------    ------------    ------------

Operating expenses:
   Cost of sales                                        745,281           2,137            --
   Selling, general and administrative expenses       2,734,962         972,309           9,608
                                                   ------------    ------------    ------------
                                                      3,480,243         974,446           9,608
                                                   ------------    ------------    ------------

Other Expenses:
   Interest and financing                               898,148           5,696            --
                                                   ------------    ------------    ------------

Net (Loss)                                         $ (3,988,518)   $   (979,047)   $     (9,608)
                                                   ============    ============    ============

Per share information - basic and fully diluted:

  Weighted average shares outstanding                10,098,742       8,502,406       8,453,425
                                                   ============    ============    ============
  Net (loss) per share                             $      (0.39)   $      (0.12)   $      (0.00)
                                                   ============    ============    ============
</TABLE>

                                       F-3
<PAGE>

<TABLE>

                           Pipeline Technologies, Inc.
                Consolidated Statement of Stockholders' (Deficit)
        For the Period From Inception (December 2, 1999) to June 30, 2001
<CAPTION>



                                                Common Stock
                                         --------------------------      Paid in      Accumulated
                                           Shares         Amount         Capital        Deficit         Total
                                         -----------    -----------    -----------    -----------    -----------

<S>                                      <C>            <C>            <C>            <C>            <C>
Beginning balance                               --      $      --      $      --      $      --      $      --

Issuance of common shares at inception     8,453,425          1,000           --             --            1,000

Net loss for the period                         --             --             --           (9,608)        (9,608)
                                         -----------    -----------    -----------    -----------    -----------

Balance December 31, 1999                  8,453,425          1,000           --           (9,608)        (8,608)

Shares issued for reorganization             995,950           --             --             --             --

Shares issued for conversion of notes        500,000            500        252,459           --          252,959

Reclassification of paid in capital             --            8,449         (8,449)

Net (loss) for the period                       --             --             --         (979,047)      (979,047)
                                         -----------    -----------    -----------    -----------    -----------

Balance June 30, 2000                      9,949,375          9,949        244,010       (988,655)      (734,696)

Shares issued for financing costs            200,000            200        699,800           --          700,000

Shares issued for consulting services        480,000            480        519,520           --          520,000

Shares returned and retired                 (450,000)          (450)           450           --             --

Net (loss) for the year                         --             --             --       (3,988,518)    (3,988,518)
                                         -----------    -----------    -----------    -----------    -----------

Balance at June 30, 2001                  10,179,375    $    10,179    $ 1,463,780    $(4,977,173)   $(3,503,214)
                                         ===========    ===========    ===========    ===========    ===========
</TABLE>

                                       F-4
<PAGE>

<TABLE>
                  Pipeline Technologies, inc.
             Consolidated Statements of Cash Flows
             For the Year Ended June 30, 2001, the
                Six Months Ended June 30, 2000
        and the Period From Inception (December 3, 1999) to December 31, 1999
<CAPTION>
                                                                                  Inception
                                                                                  December 2,
                                                    Year Ended      Six Months      1999 to
                                                     June 30,     Ended June 30,  December 31,
                                                       2001           2000           1999
                                                    -----------    -----------    -----------

<S>                                                 <C>            <C>            <C>
Net (loss)                                          $(3,988,518)   $  (979,047)   $    (9,608)
  Adjustments to reconcile net (loss) to net cash
  (used in) operating activities:
  Depreciation                                           22,603          1,005           --
  Common stock issued for financing costs               700,000           --             --
  Common stock issued for services                      520,000           --             --
 Changes in assets and liabilities:
  Accounts receivable                                   (11,141)          --             --
  Other current assets                                   (7,879)          --             --
  Deposits                                              (65,113)          --             --
  Accounts payable and accrued expenses                 884,308         74,405            596
  Deferred revenue                                       27,060           --             --
  Accounts payable - affiliates                          23,348        (13,281)         8,407
                                                    -----------    -----------    -----------
Net cash (used in) operating activities              (1,895,332)      (916,918)          (605)
                                                    -----------    -----------    -----------

Cash flows from investing activities:
   Purchase of property and equipment                   (77,794)       (33,381)          --
                                                    -----------    -----------    -----------
Net cash (used in) investing activities                 (77,794)       (33,381)          --
                                                    -----------    -----------    -----------

Cash flows from financing activities:
  Proceeds from notes payable                         1,822,383      1,252,959           --
  Repayments of notes payable                           (75,000)       (75,000)          --
  Proceeds from stock issuance                             --             --            1,000
                                                    -----------    -----------    -----------
Net cash provided by financing activities             1,747,383      1,177,959          1,000
                                                    -----------    -----------    -----------

Net increase (decrease) in cash                        (225,743)       227,660            395

Beginning - cash balance                                228,055            395           --
                                                    -----------    -----------    -----------

Ending - cash balance                               $     2,312    $   228,055    $       395
                                                    ===========    ===========    ===========

Supplemental cash flow information:
  Cash paid for income taxes                        $      --      $      --      $      --
  Cash paid for interest                            $     6,362    $      --      $      --
</TABLE>

                                       F-5
<PAGE>

                           Pipeline Technologies, Inc.
                 Notes to the Consolidated Financial Statements
                                  June 30, 2001

Note 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization

On December 2, 1999,  the Company was  incorporated  under the laws of Colorado.
The Company is in the business of providing telecommunications services.

On  June  21,  2000, Pipeline   Technologies,   Inc.   (Pipeline)   completed  a
reorganization  with Wallstreet Racing Stables,  Inc., which at that time had no
assets or liabilities. In conjunction therewith, Wallstreet Racing Stables, Inc.
issued  8,453,425  shares of its  common  stock  (89%) for all of the issued and
outstanding  common shares of Pipeline.  This  reorganization has been accounted
for as though it were a  recapitalization  of  Pipeline  and sale by Pipeline of
995,950  shares of common  stock  (11%) in the  exchange  for the net  assets of
Wallstreet Racing Stables, Inc.

Basis of Reporting

The Company's financial statements are presented on a going concern basis, which
contemplates  the  realization of assets and  satisfaction of liabilities in the
normal course of business.

The Company has experienced  recurring losses from operations as a result of its
general and  administrative  expenses  necessary to achieve its  operating  plan
which is  long-range  in nature.  For the period  December  2, 1999  (inception)
through  June 30,  2001,  the  Company  realized  net losses of  $4,977,173.  In
addition,  the  Company  has a  working  capital  deficit  of  $3,655,894  and a
stockholders' deficit of $3,503,214 at June 30, 2001.

The  Company's  ability to continue as a going  concern is  contingent  upon its
ability to secure  financing from outside  sources,  implement its business plan
and attain profitable operations. In addition, the Company's ability to continue
as a going concern must be  considered  in light of the  problems,  expenses and
complications frequently encountered by entrance into established markets.

The  Company is pursuing  financing  for its  operations  in the form of private
placement  investment.  Failure to secure such financing or to raise  additional
private  placement  investment may result in the Company depleting its available
funds and not being able pay its obligations or continue operations.

The financial  statements do not include any adjustments to reflect the possible
future effects on the recoverability and classification of assets or the amounts
and classification of liabilities that may result from the possible inability of
the Company to continue as a going concern.

Principles of Consolidation

The consolidated  financial  statements  include the accounts of the Company and
its  wholly  owned  subsidiary.   All  significant   intercompany  accounts  and
transactions have been eliminated in consolidation.

                                       F-6
<PAGE>

                           Pipeline Technologies, Inc.
                 Notes to the Consolidated Financial Statements
                                  June 30, 2001

Depreciation

Property and  equipment are  depreciated  or amortized  using the  straight-line
method over the following estimated useful lives:

Furniture and office equipment                              3-5 years
Leasehold Improvements                                      5 years

Depreciation  expense for the year ended June 30, 2001 and the six months  ended
June 30, 2000 was $22,603 and $1,005.  There was no depreciation expense for the
period December 2, 1999 (inception) through December 31, 1999.

Fair Value of Financial Instruments

Fair value estimates  discussed herein are based upon certain market assumptions
and  pertinent  information  available to  management  as of June 30, 2001.  The
respective  carrying  value of certain  on-balance-sheet  financial  instruments
approximated  their fair  values.  These  financial  instruments  include  cash,
accounts receivable, accounts payable, accrued expenses, and notes payable. Fair
values  were  assumed  to  approximate   carrying  values  for  these  financial
instruments  because  they are short term in nature and their  carrying  amounts
approximate fair values or they are receivable or payable on demand.

Impairment of Long-Lived Assets

The Company  periodically reviews the carrying amount of its identifiable assets
to determine whether current events or circumstances warrant adjustments to such
carrying amounts. If an impairment adjustment is deemed necessary,  such loss is
measured by the amount that the carrying  value of such assets exceed their fair
value. Considerable management judgement is necessary to estimate the fair value
of  assets,  accordingly,  actual  values  could  vary  significantly  from such
estimates.  Assets to be disposed of are carried at the lower of their financial
statement carrying amount or fair value less costs to sell. As of June 30, 2001,
management  does not believe there is any impairment of the carrying  amounts of
assets.

Revenue Recognition

Revenue is recognized when telecommunications service are performed.

Advertising Costs

The Company  expenses all costs of  advertising as incurred.  Total  advertising
expense for the year ended June 30, 2001, the six months ended June 30, 2000 and
the period December 2, 1999  (inception)  through December 31, 1999 was $58,812,
$34,449 and $6,767.

                                       F-7
<PAGE>

                           Pipeline Technologies, Inc.
                 Notes to the Consolidated Financial Statements
                                  June 30, 2001

Stock-based Compensation

The Company  accounts for stock based  compensation  in accordance with SFAS No.
123,  "Accounting for Stock-Based  Compensation." The provisions of SFAS No. 123
allow  companies to either  expense the estimated fair value of stock options or
to continue to follow the  intrinsic  value  method set forth in APB Opinion 25,
"Accounting for Stock Issued to Employees" ("APB 25") but disclose the pro forma
effects on net income  (loss) had the fair value of the options  been  expensed.
The Company has elected to continue to apply APB 25 in accounting  for its stock
option incentive plans.

Reclassifications

Certain items  previously  reported in the prior year have been  reclassified to
conform to current year presentation.

Income Taxes

The  Company  follows  Statement  of  Financial  Accounting  Standard  No.  109,
"Accounting  for Income  Taxes" ("SFAS No. 109") for recording the provision for
income taxes.  Deferred tax assets and  liabilities  are computed based upon the
difference  between the  financial  statement and income tax basis of assets and
liabilities  using the enacted  marginal  tax rate  applicable  when the related
asset or  liability is expected to be realized or settled.  Deferred  income tax
expenses or benefits  are based on the  changes in the asset or  liability  each
period. If available evidence suggests that it is more likely than not that some
portion or all of the  deferred  tax assets  will not be  realized,  a valuation
allowance  is provided to reduce the  deferred  tax assets to the amount that is
more likely than not to be realized.  Future changes in such valuation allowance
are included in the provision for deferred income taxes in the period of change.

Net (Loss) per Common Share

The Company  calculates net income (loss) per share as required by SFAS No. 128,
"Earnings per Share." Basic earnings  (loss) per share is calculated by dividing
net income (loss) by the weighted  average  number of common shares  outstanding
for the period.  Diluted earnings (loss) per share is calculated by dividing net
income  (loss) by the  weighted  average  number of common  shares and  dilutive
common  stock  equivalents  outstanding.   During  the  periods  when  they  are
anti-dilutive, common stock equivalents are not considered in the computation.

Comprehensive Income

The  Company  follows  Statement  of  Financial  Accounting  Standards  No. 130,
"Reporting  Comprehensive  Income"  ("SFAS No. 130").  SFAS No. 130  establishes
standards for reporting and display of  comprehensive  income and its components
in the financial statements.

Segment Reporting

The  Company  follows  Statement  of  Financial  Accounting  Standards  No. 131,
"Disclosures  About  Segments of an  Enterprise  and Related  Information."  The
Company  operates  as a single  segment  and will  evaluate  additional  segment
disclosure requirements as it expands its operations.

                                       F-8
<PAGE>

                           Pipeline Technologies, Inc.
                 Notes to the Consolidated Financial Statements
                                  June 30, 2001

Cash and Cash Equivalents

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

Estimates

The  preparation  of the  Company's  financial  statements  in  conformity  with
generally accepted accounting  principles  requires the Company's  management to
make  estimates  and  assumptions  that  affect the  amounts  reported  in these
financial  statements and accompanying  notes.  Actual amounts could differ from
those estimates.

Note 2. PROPERTY AND EQUIPMENT

The following is a summary of property and equipment at cost,  less  accumulated
depreciation at June 30, 2001:

        Furniture and equipment                   $ 93,150
        Leasehold improvements                      18,025
                                                  --------
                                                   111,175
        Less: Accumulated depreciation             23,608
                                                  --------
                 Total                            $ 87,567
                                                  ========

Note 3. NOTES PAYABLE

Convertible notes payable were issued for cash to be used for operations.

The  following are summaries of notes payable at June 30, 2001 which are all due
on demand:

12% convertible notes,  interest payable  semi-annually, conver-
tible  including accrued interest, at the holders' discretion
into shares of Common Stock at rate of $2.00 per share               $2,672,383
                                                                     ==========

Of this amount  $2,522,383 is due to affiliates and $150,000 is due to unrelated
parties (see Note 6).

Accrued interest related to these notes aggregated $191,786 at June 30, 2001.

Note 4. STOCKHOLDERS' (DEFICIT)

At  inception,  the Company  issued  8,453,425  shares of common  stock for cash
aggregating $1,000.

During the six months ended June 30, 2000,  the Company issued 500,000 shares of
common stock for the conversion of notes payable aggregating $252,959 and issued
995,950 shares of common stock pursuant to the reorganization  described in Note
1.

                                       F-9
<PAGE>

                           Pipeline Technologies, Inc.
                 Notes to the Consolidated Financial Statements
                                  June 30, 2001


During the year ended June 30, 2001 the Company  issued 200,000 shares of common
stock  valued at $700,000  for  financing  costs  related to certain  short term
loans.  Of these  shares, 100,000  shares  valued at $400,000  were issued to an
existing  stockholder.  Also,  the Company issued 480,000 shares of common stock
for services valued at $520,000.  The value assigned to the common stock was the
fair  market  value of the shares at the time it was  agreed  that they would be
issued.

In addition,  450,000 shares of common stock were returned to the Company for no
consideration and retired.

Note 5.  INCOME TAXES

The Company has a federal  net  operating  loss  carryforward  of  approximately
$5,000,000,  which will expire between the years 2018 and 2020. The deferred tax
asset  relating to the tax benefit of this net operating loss has been offset by
a full allowance for realization.  The difference  between income taxes computed
at the federal statutory rate and the actual income tax expense results from the
net operating loss.

Note 6.  RELATED PARTY TRANSACTIONS

Certain  officers  of the  Company  loan money to the  Company at various  times
during the year when cash is needed.  The balance due these officers was $18,474
at June 30, 2001.

During the year ended June 30, 2001 and the six months  ended June 30, 2000, the
Company   borrowed  an  aggregate  of  $1,672,383   and  $850,000  from  certain
shareholders  of the  Company.  These  amounts  are  included  in the  total  of
$2,672,383 described in Note 3 above.

NOTE 7. LEASE OBLIGATION

The Company leases office space under an operating lease arrangement.  The lease
expires on March 31, 2005.

Minimum future lease payments on the office lease are as follows:

                Year         Amount
                ----       --------
                2002       $ 64,239
                2003         66,492
                2004         68,739
                2005         17,325
                           --------
                           $216,795
                           ========

For the year ended June 30,  2001 and the six months  ended June 30,  2000,  the
amount charged to operations for rent expense was $61,992 and $5,352.  There was
no  rent  expense  charged  to  operations  for  the  period  December  2,  1999
(inception) to December 31, 1999.

                                      F-10
<PAGE>



                                   SIGNATURES

     Pursuant  to the  requirements  of  Section  13 or 15(d) of the  Securities
Exchange Act of 1934, the Registrant has duly caused this Report to be signed on
its behalf by the undersigned thereunto duly authorized in Jacksonville, Florida
on the 15th day of October 2001.

                                        Pipeline Technologies, Inc.


                                        By:   /s/ Timothy J. Murtaugh
                                              ----------------------------------
                                              Timothy J. Murtaugh, President and
                                              Chief Executive Officer

     Pursuant to the  requirements  of the  Securities  Exchange Act of 1934, as
amended,  this Report has been signed by the following persons in the capacities
and on the dates indicated.

Signatures                         Title                            Date
----------                         -----                            ----

/s/ Timothy J. Murtaugh    President, Chief Executive         October 15, 2001
------------------------   Officer and Director
Timothy J. Murtaugh


/s/ Robert L. Maige, Jr.   Chief Financial and Accounting     October 15, 2001
------------------------   Officer, Treasurer and Director
Robert L. Maige, Jr.


/s/ Pieter Both
------------------------   Director                           October 15, 2001
Pieter Both


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