UNITED STATES
                 SECURITIES AND EXCHANGE COMMISSION

                        Washington, D.C. 20549


                              FORM 10-KSB

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

               For the fiscal year ended - March 31, 2002

                                    OR

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

               For the transition period from:

                  Commission  file number:   000-49615

                      COMMONWEALTH EQUITIES, INC.
             --------------------------------------------
            (Name of Small Business Issuer in its charter)

         Delaware                                    41- 0981849
   ------------------------------                  -----------------
  (State or other jurisdiction of                  (I.R.S. Employer
   incorporation or organization)                Identification Number)

               444 Park Forest Way, Wellington, FL 33414
                 --------------------------------------
                (Address of principal executive offices)

                Issuer's telephone number: 561-798-4294

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

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

               Common Stock, $0.001 par value per share
                         (Title of class)

Check whether the issuer (1) 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.
                         YES [X] NO [  ]

Check if there is no 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.        [  ]

    State issuer's revenues for its most recent fiscal year.   $ -0-

State the aggregate market value of the voting stock held by non- affiliates
computed by reference to the price at which the stock was sold, or the
average bid and asked prices of such stock, as of a specified date within
the past 60 days. (See definition of affiliate in Rule 12b-2 of the Exchange
Act):                                                            -0-

Check whether the issuer has filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution
of securities under a plan confirmed by a court.
                    Yes [ ] No [ ] Not applicable.

              (APPLICABLE ONLY TO CORPORATE REGISTRANTS)

State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date.
                  4,000,000 as of March 31, 2002.

Transitional Small Business Disclosure Format (Check one):  Yes [ ]; No  [ ]

                                 1
<PAGE>

                                  PART I

ITEM 1.  BUSINESS

Commonwealth Equities, Inc. (the "Company") was incorporated on April
18, 1967, under the laws of the State of Minnesota as Warren B. Johnson
& Associates, Inc., to open and franchise a family style restaurant.   On May
15, 1968, the Company amended its name to International House of
Diamond Jim's, Inc., and on February 25, 1968, the Company amended its
name to Warren Johnson's, Inc.  Pursuant to an offering under Regulation
A (File No. 24C-3027), which became effective July 22, 1969, the
Company completed an offering of its securities in Minnesota.  On
February 25, 1971, the Company amended its name to Commonwealth
Equities, Inc. and redomiciled as a Delaware corporation, and began to
engage in the real estate business and various other areas.  In 1975, the real
estate market fell, and the decision was made to not move further into any
other operations, and therefore the corporation ceased to do business.  No
further business was engaged in by the Company since the divestiture.  On
August 8, 1995, the Company's charter was renewed perpetual to February
8, 1975, the date of the expiration of the charter.  It's purpose is to engage
in any lawful corporate undertaking, including, but not limited to, selected
mergers and acquisitions. The Company has been in the developmental
stage and has no operations since the renewal of its charter. The Company
has not commenced any operational activities. The Board of Directors of
the Company has elected to commence implementation of the Company's
principal business purpose, described below under "Item 2, Plan of
Operation". As such, the Company can be defined as a "shell" company,
whose sole purpose at this time is to locate and consummate a merger or
acquisition with a private entity.

The proposed business activities described herein classify the Company as
a "blank check" company. Many states have enacted statutes, rules and
regulations limiting the sale of securities of "blank check" companies in
their respective jurisdictions. Management does not intend to undertake any
offering of the Company's securities, either debt or equity, until such time
as the Company has successfully implemented its business plan herein.

The Company's business is subject to numerous risk factors, including the
following:


NO OPERATING HISTORY OR REVENUE AND MINIMAL ASSETS. The Company has had
no
operating history nor any revenues or earnings from operations since the
renewal of its charter. The Company has no significant assets or financial
resources. The Company will, in all likelihood, sustain operating expenses
without corresponding revenues, at least until the consummation of a business
combination. This may result in the Company incurring a net operating loss
which will increase continuously until the Company can consummate a business
combination with a profitable business opportunity. There is no assurance
that the Company can identify such a business opportunity and consummate such
a business combination.

SPECULATIVE NATURE OF COMPANY'S PROPOSED OPERATIONS. The success of the
Company's proposed plan of operation will depend to a great extent on the
operations, financial condition and management of the identified business
opportunity. While management intends to seek business combinations with
entities having established operating histories, there can be no assurance
that the Company will be successful in locating candidates meeting such
criteria. In the event the Company completes a business combination, of
which there can be no assurance, the success of the Company's operations may
be dependent upon management of the successor firm or venture partner firm
and numerous other factors beyond the Company's control.

SCARCITY OF AND COMPETITION FOR BUSINESS
OPPORTUNITIES AND COMBINATIONS. The Company is and will
continue to be an insignificant participant in the business of seeking
mergers with, joint ventures with and acquisitions of small private entities.
A large number of established and well-financed entities, including venture
capital firms, are active in mergers and acquisitions of companies which
may be desirable target candidates for the Company. Nearly all such entities
have significantly greater financial resources, technical expertise and
managerial capabilities than the Company and, consequently, the Company
will be at a competitive disadvantage in identifying possible business
opportunities and successfully completing a business combination.
Moreover, the Company will also compete in seeking merger or acquisition
candidates with numerous other small public companies.

NO AGREEMENT FOR BUSINESS COMBINATION OR OTHER TRANSACTION - NO
STANDARDS FOR
BUSINESS COMBINATION. The Company has no arrangement, agreement or
understanding with respect to engaging in a merger with, joint venture with
or acquisition of, a private entity. There can be no assurance the Company
will be successful in identifying and evaluating suitable business
opportunities or in concluding a business combination. Management has
not identified any particular industry or specific business within an industry
for evaluations. The Company has been in the developmental stage since
inception and has no operations to date. Other than issuing shares to its
original shareholders, the Company never commenced any operational
activities. There is no assurance the Company will be able to negotiate a

                                  2
<PAGE>
business combination on terms favorable to the Company. The Company
has not established a specific length of operating history or a specified level
of earnings, assets, net worth or other criteria which it will require a target
business opportunity to have achieved, and without which the Company
would not consider a business combination in any form with such business
opportunity. Accordingly, the Company may enter into a business
combination with a business opportunity having no significant operating
history, losses, limited or no potential for earnings, limited assets, negative
net worth or other negative characteristics.

CONTINUED MANAGEMENT CONTROL, LIMITED TIME AVAILABILITY. While seeking
a
business combination, management anticipates devoting up to twenty hours per
month to the business of the Company. The Company's officers have not entered
into written employment agreements with the Company and are not expected to
do so in the foreseeable future. The Company has not obtained key man life
insurance on its officers or directors. Notwithstanding the combined limited
experience and time commitment of management, loss of the services of
any of these individuals would adversely affect development of the
Company's business and its likelihood of continuing operations. See
"MANAGEMENT."

CONFLICTS OF INTEREST - GENERAL. The Company's
officers and directors participate in other business ventures which compete
directly with the Company. Additional conflicts of interest and non-arms
length transactions may also arise in the future in the event the Company's
officers or directors are involved in the management of any firm with which
the Company transacts business. Management has adopted a policy that the
Company will not seek a merger with, or acquisition of, any entity in which
management serve as officers, directors or partners, or in which they or their
family members own or hold any ownership interest. See "ITEM 5.
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL
PERSONS - CONFLICTS OF INTEREST."

REPORTING REQUIREMENTS MAY DELAY OR PRECLUDE
ACQUISITION. Section 13 of the Securities Exchange Act of 1934 (the
"Exchange Act"), requires companies subject thereto to provide certain
information about significant acquisitions, including certified financial
statements for the company acquired, covering one or two years, depending
on the relative size of the acquisition. The time and additional costs that
may be incurred by some target entities to prepare such statements may
significantly delay or essentially preclude consummation of an otherwise
desirable acquisition by the Company. Acquisition prospects that do not
have or are unable to obtain the required audited statements may not be
appropriate for acquisition so long as the reporting requirements of the
1934 Act are applicable.

LACK OF MARKET RESEARCH OR MARKETING
ORGANIZATION. The Company has neither conducted, nor have others
made available to it, results of market research indicating that market
demand exists for the transactions contemplated by the Company.
Moreover, the Company does not have, and does not plan to establish, a
marketing organization. Even in the event demand is identified for a merger
or acquisition contemplated by the Company, there is no assurance the
Company will be successful in completing any such business combination.

LACK OF DIVERSIFICATION. The Company's proposed
operations, even if successful, will in all likelihood result in the Company
engaging in a business combination with only one business opportunity.
Consequently, the Company's activities will be limited to those engaged in
by the business opportunity which the Company merges with or acquires.
The Company's inability to diversify its activities into a number of areas
may subject the Company to economic fluctuations within a particular
business or industry and therefore increase the risks associated with the
Company's operations.

REGULATION. Although the Company will be subject to
regulation under the Securities Exchange Act of 1934, management
believes the Company will not be subject to regulation under the
Investment Company Act of 1940, insofar as the Company will not be
engaged in the business of investing or trading in securities. In the event the
Company engages in business combinations which result in the Company
holding passive investment interests in a number of entities, the Company
could be subject to regulation under the Investment Company Act of 1940.
In such event, the Company would be required to register as an investment
company and could be expected to incur significant registration and
compliance costs. The Company has obtained no formal determination
from the Securities and Exchange Commission as to the status of the
Company under the Investment Company Act of 1940 and, consequently,
any violation of such Act would subject the Company to material adverse
consequences.

PROBABLE CHANGE IN CONTROL AND MANAGEMENT.
A business combination involving the issuance of the Company's common
stock will, in all likelihood, result in shareholders of a private company
obtaining a controlling interest in the Company. Any such business
combination may require management of the Company to sell or transfer all
or a portion of the Company's common stock held by them, or resign as
members of the Board of Directors of the Company. The resulting change
in control of the Company could result in removal of one or more present
officers and directors of the Company and a corresponding reduction in or
elimination of their participation in the future affairs of the Company.

                                 3
<PAGE>
REDUCTION OF PERCENTAGE SHARE OWNERSHIP
FOLLOWING BUSINESS COMBINATION. The Company's primary plan
of operation is based upon a business combination with a private concern
which, in all likelihood, would result in the Company issuing securities to
shareholders of such private company. The issuance of previously
authorized and unissued common stock of the Company would result in
reduction in percentage of shares owned by present and prospective
shareholders of the Company and would most likely result in a change in
control or management of the Company.

DISADVANTAGES OF BLANK CHECK OFFERING. The
Company may enter into a business combination with an entity that desires
to establish a public trading market for its shares. A business opportunity
may attempt to avoid what it deems to be adverse consequences of
undertaking its own public offering by seeking a business combination with
the Company. Such consequences may include, but are not limited to, time
delays of the registration process, significant expenses to be incurred in
such an offering, loss of voting control to public shareholders and the
inability or unwillingness to comply with various federal and state laws
enacted for the protection of investors.

TAXATION. Federal and state tax consequences will, in all
likelihood, be major considerations in any business combination the
Company may undertake. Currently, such transactions may be structured so
as to result in tax-free treatment to both companies, pursuant to various
federal and state tax provisions. The Company intends to structure any
business combination so as to minimize the federal and state tax
consequences to both the Company and the target entity; however, there
can be no assurance that such business combination will meet the statutory
requirements of a tax-free reorganization or that the parties will obtain the
intended tax-free treatment upon a transfer of stock or assets. A non-
qualifying reorganization could result in the imposition of both federal and
state taxes which may have an adverse effect on both parties to the
transaction.

REQUIREMENT OF AUDITED FINANCIAL STATEMENTS
MAY DISQUALIFY BUSINESS OPPORTUNITIES. Management of the
Company believes that any potential business opportunity must provide
audited financial statements for review, and for the protection of all parties
to the business combination. One or more attractive business opportunities
may choose to forego the possibility of a business combination with the
Company, rather than incur the expenses associated with preparing audited
financial statements.


GENERAL BUSINESS PLAN

At this time, the Company's purpose is to seek, investigate and, if such
investigation warrants, acquire an interest in business opportunities
presented to it by persons or firms who or which desire to seek the
perceived advantages of an Exchange Act registered corporation. The
Company will not restrict its search to any specific business, industry, or
geographical location and the Company may participate in a business
venture of virtually any kind or nature. This discussion of the proposed
business is purposefully general and is not meant to be restrictive of the
Company's virtually unlimited discretion to search for and enter into
potential business opportunities. Management anticipates that it may be
able to participate in only one potential business venture because the
Company has nominal assets and limited financial resources. See Item 7,
"Financial Statements and Supplemental Data." This lack of diversification
should be considered a substantial risk to shareholders of the Company
because it will not permit the Company to offset potential losses from one
venture against gains from another.

The Company may seek a business opportunity with entities which have
recently commenced operations, or which wish to utilize the public
marketplace in order to raise additional capital in order to expand into new
products or markets, to develop a new product or service, or for other
corporate purposes.  The Company may acquire assets and establish
wholly-owned subsidiaries in various businesses or acquire existing
businesses as subsidiaries.

The Company intends to advertise and promote the Company privately.
The Company has not yet prepared any notices or advertisements.

The Company anticipates that the selection of a business opportunity in
which to participate will be complex and extremely risky. Due to general
economic conditions, rapid technological advances being made in some
industries and shortages of available capital, management believes that
there are numerous firms seeking the perceived benefits of a publicly
registered corporation. Such perceived benefits may include facilitating or
improving the terms on which additional equity financing may be sought,
providing liquidity for incentive stock options or similar benefits to key
employees, providing liquidity (subject to restrictions of applicable
statutes) for all shareholders and other factors. Potentially, available
business opportunities may occur in many different industries and at
various stages of development, all of which will make the task of
comparative investigation and analysis of such business opportunities
extremely difficult and complex.

                                 4
<PAGE>
The Company has, and will continue to have, little or no capital with which
to provide the owners of business opportunities with any significant cash
or other assets. However, management believes the Company will be able
to offer owners of acquisition candidates the opportunity to acquire a
controlling ownership interest in a publicly registered company without
incurring the cost and time required to conduct an initial public offering.
The owners of the business opportunities will, however, incur significant
legal and accounting costs in connection with the acquisition of a business
opportunity, including the costs of preparing Form 8-K's, 10-K's or 10-
KSB's, agreements and related reports and documents. The Securities
Exchange Act of 1934 (the "34 Act"), specifically requires that any merger
or acquisition candidate comply with all applicable reporting requirements,
which include providing audited financial statements to be included within
the numerous filings relevant to complying with the 34 Act. Nevertheless,
the officers and directors of the Company have not conducted market
research and are not aware of statistical data which would support the
perceived benefits of a merger or acquisition transaction for the owners of
a business opportunity.

The analysis of new business opportunities will be undertaken by, or under
the supervision of, the officers and directors of the Company.  Management
intends to concentrate on identifying preliminary prospective business
opportunities which may be brought to its attention through present
associations of the Company's officers and directors, or by the Company's
shareholders. In analyzing prospective business opportunities, management
will consider such matters as the available technical, financial and
managerial resources; working capital and other financial requirements;
history of operations, if any; prospects for the future; nature of present and
expected competition; the quality and experience of management services
which may be available and the depth of that management; the potential for
further research, development, or exploration; specific risk factors not now
foreseeable but which then may be anticipated to impact the proposed
activities of the Company; the potential for growth or expansion; the
potential for profit; the perceived public recognition or acceptance of
products, services, or trades; name identification; and other relevant factors.
Officers and directors of the Company do expect to meet personally with
management and key personnel of the business opportunity as part of their
investigation. To the extent possible, the Company intends to utilize
written reports and investigation to evaluate the above factors. The
Company will not acquire or merge with any company for which audited
financial statements cannot be obtained within a reasonable period of time
after closing of the proposed transaction.

The officers of the Company, have limited experience in managing
companies similar the Company, and shall rely upon their own efforts and,
to a much lesser extent, the efforts of the Company's shareholders, in
accomplishing the business purposes of the Company.  The Company may
from time to time utilize outside consultants or advisors to effectuate its
business purposes described herein.  No policies have been adopted
regarding use of such consultants or advisors, the criteria to be used in
selecting such consultants or advisors, the services to be provided, the term
of service, or regarding the total amount of fees that may be paid.  However,
because of the limited resources of the Company, it is likely that any such
fee the Company agrees to pay would be paid in stock and not in cash.

The Company will not restrict its search for any specific kind of firms, but
may acquire a venture which is in its preliminary or development stage, which
is already in operation, or in essentially any stage of its corporate life.
It is impossible to predict at this time the status of any business in which
the Company may become engaged, in that such business may need to seek
additional capital, may desire to have its shares publicly traded, or may seek
other perceived advantages which the Company may offer. However, the
Company does not intend to obtain funds in one or more private placements
to finance the operation of any acquired business opportunity until such
time as the Company has successfully consummated such a merger or
acquisition.

It is anticipated that the Company will incur nominal expenses in the
implementation of its business plan described herein.  Because the
Company has no capital with which to pay these anticipated expenses,
present shareholders of the Company will pay these charges, as interest free
loans to the Company.  However, the only opportunity which shareholders
have to have these loans repaid will be from a prospective merger or
acquisition candidate.  Shareholders have agreed among themselves that the
repayment of any loans made on behalf of the Company will not impede,
or be made conditional in any manner, to consummation of a proposed
transaction.


ACQUISITION OF OPPORTUNITIES

In implementing a structure for a particular business acquisition, the
Company may become a party to a merger, consolidation, reorganization,
joint venture, or licensing agreement with another corporation or entity. It
may also acquire stock or assets of an existing business. On the
consummation of a transaction, it is probable that the present management
and shareholders of the Company will no longer be in control of the
Company. In addition, the Company's directors may, as part of the terms of

                                 5
<PAGE>

the acquisition transaction, resign and be replaced by new directors without
a vote of the Company's shareholders or may sell their stock in the
Company.  Any and all such sales will only be made in compliance with the
securities laws of the United States and any applicable state.

It is anticipated that any securities issued in any such reorganization would
be issued in reliance upon exemption from registration under applicable
federal and state securities laws. In some circumstances, however, as a
negotiated element of its transaction, the Company may agree to register all
or a part of such securities immediately after the transaction is
consummated or at specified times thereafter. If such registration occurs, of
which there can be no assurance, it will be undertaken by the surviving
entity after the Company has successfully consummated a merger or
acquisition and the Company is no longer considered a "shell" company.
Until such time as this occurs, the Company will not attempt to register any
additional securities. The issuance of substantial additional securities and
their potential sale into any trading market which may develop in the
Company's securities may have a depressive effect on the value of the
Company's securities in the future, if such a market develops, of which
there is no assurance.

While the actual terms of a transaction to which the Company may be a
party cannot be predicted, it may be expected that the parties to the business
transaction will find it desirable to avoid the creation of a taxable event and
thereby structure the acquisition in a so-called "tax-free" reorganization
under Sections 368(a)(1) or 351 of the Internal Revenue Code (the "Code").


In order to obtain tax-free treatment under the Code, it may be necessary for
the owners of the acquired business to own 80% or more of the voting stock
of the surviving entity.  In such event, the shareholders of the Company,
would retain less than 20% of the issued and outstanding shares of the
surviving entity, which would result in significant dilution in the equity of
such shareholders.

As part of the Company's investigation, officers and directors of the
Company may personally meet with management and key personnel, may visit
and inspect material facilities, obtain analysis of verification of certain
information provided, check references of management and key personnel,
and take other reasonable investigative measures, to the extent of the
Company's limited financial resources and management expertise.  The
manner in which the Company participates in an opportunity will depend
on the nature of the opportunity, the respective needs and desires of the
Company and other parties, the management of the opportunity and the
relative negotiation strength of the Company and such other management.

With respect to any merger or acquisition, negotiations with target company
management is expected to focus on the percentage of the Company which
target company shareholders would acquire in exchange for all of their
shareholdings in the target company. Depending upon, among other things,
the target company's assets and liabilities, the Company's shareholders will
in all likelihood hold a substantially lesser percentage ownership interest
in the Company following any merger or acquisition. The percentage
ownership may be subject to significant reduction in the event the
Company acquires a target company with substantial assets. Any merger or
acquisition effected by the Company can be expected to have a significant
dilutive effect on the percentage of shares held by the Company's then-
shareholders.

The Company will participate in a business opportunity only after the
negotiation and execution of appropriate written agreements. Although the
terms of such agreements cannot be predicted, generally such agreements
will require some specific representations and warranties by all of the
parties thereto, will specify certain events of default, will detail the terms
of closing and the conditions which must be satisfied by each of the parties
prior to and after such closing, will outline the manner of bearing costs,
including costs associated with the Company's attorneys and accountants,
will set forth remedies on default and will include miscellaneous other
terms.

As stated herein above, the Company will not acquire or merge with any
entity which cannot provide independent audited financial statements
within a reasonable period of time after closing of the proposed transaction.
The Company is subject to all of the reporting requirements included in the
34 Act. Included in these requirements is the affirmative duty of the
Company to file independent audited financial statements as part of its
Form 8-K to be filed with the Securities and Exchange Commission upon
consummation of a merger or acquisition, as well as the Company's audited
financial statements included in its annual report on Form 10-K (or 10-
KSB, as applicable). If such audited financial statements are not available
at closing, or within time parameters necessary to insure the Company's
compliance with the requirements of the 34 Act, or if the audited financial
statements provided do not conform to the representations made by the
candidate to be acquired in the closing documents, the closing documents
may provide that the proposed transaction will be voidable, at the discretion
of the present management of the Company.

If such transaction is voided, the agreement will also contain a provision
providing for the acquisition entity to reimburse the Company for all costs
associated with the proposed transaction.

                                  6
<PAGE>
The Company does not intend to provide the Company's security holders
with any complete disclosure documents, including audited financial
statements, concerning an acquisition or merger candidate and its business
prior to the consummation of any acquisition or merger transaction.


COMPETITION

The Company will remain an insignificant participant among the firms
which engage in the acquisition of business opportunities. There are many
established venture capital and financial concerns which have significantly
greater financial and personnel resources and technical expertise than the
Company. In view of the Company's combined extremely limited financial
resources and limited management availability, the Company will continue
to be at a significant competitive disadvantage compared to the Company's
competitors.


ITEM 2. DESCRIPTION OF PROPERTY

The Registrant has no properties and at this time has no agreements to
acquire any properties. The Company currently maintains a mailing address
at 444 Park Forest Way, Wellington, FL 33414, which is the address of its
President.  The Company pays no rent for the use of this mailing address.
The Company does not believe that it will need to maintain an office at any
time in the foreseeable future in order to carry out its plan of operations
described herein.


ITEM 3. LEGAL PROCEEDINGS.

There is no litigation pending or threatened by or against the Company.


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

No matters were submitted during the fourth quarter of the calendar year
covered by this report to a vote of security holders.




















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ITEM 5. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT.

The following table sets forth, as of March 31, 2002, each person known by
the Company to be the beneficial owner of five percent or more of the
Company's Common Stock, all Directors individually and all Directors and
Officers of the Company as a group. Except as noted, each person has sole
voting and investment power with respect to the shares shown.

     Name and Address              Amount of Beneficial
  of Beneficial Owner                  Ownership            Percentage of
                                                                Class
---------------------------        --------------------      -----------

Alvin Roth                            851,893 shares            21.3%
P.O. Box 11913
Ft. Lauderdale, FL   33339

Prime Rate Income & Dividend
Enterprises, Inc.                   2,000,000 shares            50.0%
2525 Fifteenth Street, Suite 3H
Denver, CO   80211

All Executive Officers and          2,851,893 shares            71.3%
Directors as a Group

ITEM 6. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS.

The Directors and Officers of the Company are as follows:

          Name                Age       Positions and
                                        Offices Held
-----------------------      -----      -----------------------
     Peter Porath             70        President and Director
     Alvin Roth               72        Director
     Michael Schumacher       53        Treasurer, Secretary
                                        and Director

There are no agreements or understandings for any officer or director to
resign at the request of another person and none of the above named
officers and directors are acting on behalf of or will act at the direction of
any other person.

There is no family relationship between any Director or Executive Officer
of the Company.

The Company presently has no committees.

Set forth below are the names of all Directors and Executive Officers of the
Company, all positions and offices with the Company held by each such
person, the period during which he has served as such, and the business
experience of such persons during at least the last five years:

PETER PORATH.  Mr. Porath has served as the President and a Director
of the Company since November 2000.   He also served as the President
and a director of Vacation Ownership Marketing, Inc. until August 2001.

ALVIN ROTH.  Alvin Roth owns 465,788 shares individually. In addition,
Mr. Roth owns 386,105 beneficially.   Mr. Roth has served as a director of
the Company since 1969.

MICHAEL SCHUMACHER.  Michael Schumacher owns no shares
individually.  Mr. Schumacher, Treasurer and Director of the Company, is
also President of Prime Rate Income & Dividend Enterprises, Inc., which
owns 2,000,000 shares of the Company.  Mr. Schumacher was CFO of Go
Online Networks, Inc. from July 7, 2001 to November 23, 2001.  Mr.
Schumacher was President and Director of Rocky Mountain Power
Company from 1997 to 1999.   Mr. Schumacher is also the director and
President of Schumacher & Associates, Inc., a certified public accounting
firm located in Denver, Colorado that provides audit services, principally
to public companies on a national basis throughout the U.S.A.  Mr.
Schumacher is a Certified Public Accountant, Certified Management
Accountant and an Accredited Financial Planning Specialist.  Mr.
Schumacher has a bachelors degree in Business Administration with a
major in accounting from the University of Nebraska at Kearney and a
Masters in Business Administration from the University of Colorado.

PREVIOUS BLANK-CHECK EXPERIENCE

Mr. Peter Porath, President and a Director of the Company, and Mr.
Michael Schumacher, Treasurer, Secretary and a Director of the Company,


                                8
<PAGE>
have been involved either as an officer or director, or both, with another
blank-check company which has completed some form of corporate
reorganization. This company is Vacation Ownership Marketing, Inc.
(VAOW).  During August 2001, Mr. Schumacher and Mr. Porath both
resigned as officers and directors of VAOW upon completion of a change
in control of VAOW.

CONFLICTS OF INTEREST

The Company's officers and directors have in the past and may in the future
be officers and directors of other companies of a similar nature and with a
similar purpose as the Company.  Consequently, there are potential inherent
conflicts of interest in Mr. Porath and Mr. Schumacher acting as officers
and directors of the Company. Insofar as the officers and directors are
engaged in other business activities, management anticipates it will devote
only a minor amount of time to the Company's affairs. The officers and
directors of the Company may in the future become shareholders, officers
or directors of other companies which may be formed for the purpose of
engaging in business activities similar to those conducted by the Company.
The Company does not currently have a right of first refusal pertaining to
opportunities that come to management's attention insofar as such
opportunities may relate to the Company's proposed business operations.

The officers and directors are, so long as they are officers or directors of the
Company, subject to the restriction that all opportunities contemplated by
the Company's plan of operation which come to their attention, either in the
performance of their duties or in any other manner, will be considered
opportunities of, and be made available to the Company and the companies
that they are affiliated with on an equal basis. A breach of this requirement
will be a breach of the fiduciary duties of the officer or director. If a
situation arises in which more than one company desires to merge with or
acquire that target company and the principals of the proposed target
company have no preference as to which company will merge or acquire
such target company, the company of which Mr. Porath first became an
officer and director will be entitled to proceed with the transaction. As
between the Company and the other companies formed, the Company
which first filed a registration statement with the Securities and Exchange
Commission will be entitled to proceed with the proposed transaction.
Except as set forth above, the Company has not adopted any other conflict
of interest policy with respect to such transactions.

INVESTMENT COMPANY ACT OF 1940

Although the Company will be subject to regulation under the Securities
Act of 1933 and the Securities Exchange Act of 1934, management believes
the Company will not be subject to regulation under the Investment
Company Act of 1940 insofar as the Company will not be engaged in the
business of investing or trading in securities. In the event the Company
engages in business combinations which result in the Company holding
passive investment interests in a number of entities, the Company could be
subject to regulation under the Investment Company Act of 1940. In such
event, the Company would be required to register as an investment
company and could be expected to incur significant registration and
compliance costs. The Company has obtained no formal determination
from the Securities and Exchange Commission as to the status of the
Company under the Investment Company Act of 1940 and, consequently,
any violation of such Act would subject the Company to material adverse
consequences.

ITEM 7. EXECUTIVE COMPENSATION.

None of the Company's officers and/or directors receive any compensation
for their respective services rendered to the Company, nor have they
received such compensation since the renewal of the Company's charter.
They both have agreed to act without compensation until authorized by the
Board of Directors, which is not expected to occur until the Registrant has
generated revenues from operations after consummation of a merger or
acquisition. As of the date of this registration statement, the Company has
no funds available to pay directors. Further, none of the directors are
accruing any compensation pursuant to any agreement with the Company.

It is possible that, after the Company successfully consummates a merger
or acquisition with an unaffiliated entity, that entity may desire to employ
or retain one or more members of the Company's management for the
purposes of providing services to the surviving entity, or otherwise provide
other compensation to such persons. However, the Company has adopted
a policy whereby the offer of any post-transaction remuneration to members
of management will not be a consideration in the Company's decision to
undertake any proposed transaction. Each member of management has
agreed to disclose to the Company's Board of Directors any discussions
concerning possible compensation to be paid to them by any entity which
proposes to undertake a transaction with the Company and further, to
abstain from voting on such transaction. Therefore, as a practical matter, if
each member of the Company's Board of Directors is offered compensation
in any form from any prospective merger or acquisition candidate, the
proposed transaction will not be approved by the Company's Board of
Directors as a result of the inability of the Board to affirmatively approve
such a transaction.

It is possible that persons associated with management may refer a
prospective merger or acquisition candidate to the Company. In the event

                               9
<PAGE>
the Company consummates a transaction with any entity referred by
associates of management, it is possible that such an associate will be
compensated for their referral in the form of a finder's fee. It is anticipated
that this fee will be either in the form of restricted common stock issued by
the Company as part of the terms of the proposed transaction, or will be in
the form of cash consideration. However, if such compensation is in the
form of cash, such payment will be tendered by the acquisition or merger
candidate, because the Company has insufficient cash available. The
amount of such finder's fee cannot be determined as of the date of this
registration statement, but is expected to be comparable to consideration
normally paid in like transactions. No member of management of the
Company will receive any finders fee, either directly or indirectly, as a
result of their respective efforts to implement the Company's business plan
outlined herein.

No retirement, pension, profit sharing, stock option or insurance programs
or other similar programs have been adopted by the Registrant for the
benefit of its employees.

ITEM 8. CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS.

During the year ended March 31, 2001, the Company issued a total of
2,000,000 shares of Common Stock to Prime Rate Income & Dividend
Enterprises, Inc. for a total of $10,100 in cash.

In addition, during the year ended March 31, 2001, the Company issued a
total of 269,425 shares of Common Stock to the following persons for
services valued at $1,375, rendered to the Company:


       NAME                NUMBER OF SHARES    TOTAL CONSIDERATION
     -----------------    ------------------   -------------------
     Alvin Roth                 219,425              $ 1,120
     William Nordstrom           50,000              $   255
                              -----------            -------
     Total                      269,425              $ 1,375


The Board of Directors has passed a resolution which contains a policy that
the Company will not seek an acquisition or merger with any entity in
which any of the Company's Officers, Directors, principal shareholders or
their affiliates or associates serve as officer or director or hold any
ownership interest. Management is not aware of any circumstances under
which this policy, through their own initiative may be changed.

The proposed business activities described herein classify the Company as
a "blank check" company. Many states have enacted statutes, rules and
regulations limiting the sale of securities of "blank check" companies in
their respective jurisdictions. Management does not intend to undertake any
efforts to cause a market to develop in the Company's securities until such
time as the Company has successfully implemented its business plan
described herein.

ITEM 9. DESCRIPTION OF SECURITIES.

COMMON STOCK

The Company's Articles of Incorporation authorize the issuance of
50,000,000 shares of Common Stock, $.001 par value. Each record holder
of Common Stock is entitled to one vote for each share held on all matters
promptly submitted to the stockholders for their vote. Cumulative voting
for the election of directors is not permitted by the Articles of
Incorporation.

Holders of outstanding shares of Common Stock are entitled to such
dividends as may be declared from time to time by the Board of Directors
out of legally available funds; and, in the event of liquidation, dissolution
or winding up of the affairs of the Company, holders are entitled to receive,
ratably, the net assets of the Company available to stockholders after
distribution is made to the preferred stockholders, if any, who are given
preferred rights upon liquidation. Holders of outstanding shares of
Common Stock are, and all unissued shares when offered and sold will be,
duly authorized, validly issued, fully paid, and nonassessable. To the extent
that additional shares of the Company's Common Stock are issued, the
relative interests of the existing stockholders may be diluted.

PREFERRED STOCK

The Company's Articles of Incorporation authorize the issuance of
1,000,000 shares of Preferred Stock, $.0001 par value. The Board of
Directors of the Company is authorized to issue the Preferred Stock from
time to time in series and is further authorized to establish such series, to

                                  10
<PAGE>
fix and determine the variations in the relative rights and preferences as
between series, to fix voting rights, if any, for each series, and to allow for
the conversion of Preferred Stock into Common Stock. At present, no
Preferred Stock is issued or outstanding or contemplated to be issued.

DIVIDENDS

No dividends have been paid by the Company on any of its securities in the
past and such dividends are not contemplated in the foreseeable future.





                              PART II

ITEM 10. MARKET PRICE FOR COMMON EQUITY AND
RELATED STOCKHOLDER MATTERS.

There is no trading market for the Registrant' s Common Stock at present
and there has been no trading market to date. Management has not
undertaken any discussions, preliminary or otherwise, with any
prospective market maker concerning the participation of such market
maker in the aftermarket for the Company's securities and management
does not intend to initiate any such discussions until such time as the
Company has consummated a merger or acquisition. There is no
assurance that a trading market will ever develop or, if such a market
does develop, that it will continue.

     (a) MARKET PRICE. The Registrant's Common Stock is not
quoted on a public market at the present time.

     (b) HOLDERS. There are one thousand, twelve (1,012) holders
of the Company's Common Stock. During 1971 through 1973, the
Company issued a total of 1,730,575 of its Common Shares to various
persons in exchange for services, goodwill, acquisition, merger
agreement, cancellation of notes, and cash. During the year ended March
31, 2001, the company issued 269,425 of its Common Shares to two
individuals in exchange for services valued at $1,375.  All of the issued
and outstanding shares of the Company's Common Stock were issued in
accordance with the exemption from registration afforded by Section
4(2) of the Securities Act of 1933.

     (c) DIVIDENDS. The Registrant has not paid any dividends
since the renewal of its charter, and has no plans to do so in the
immediate future.

ITEM 11. MANAGEMENT'S DISCUSSION AND ANALYSIS OR
PLAN OF OPERATION

The Registrant intends to seek to acquire assets or shares of an entity
actively engaged in business which generates revenues, in exchange for
its securities. The Registrant has no particular acquisitions in mind and
has not entered into any negotiations regarding such an acquisition.
None of the Company's officers, directors, promoters or affiliates have
engaged in any preliminary contact or discussions with any
representative of any other company regarding the possibility of an
acquisition or merger between the Company and such other company as
of the date of this registration statement.

While the Company will attempt to obtain audited financial statements
of a target entity, there is no assurance that such audited financial
statements will be available. The Board of Directors does intend to
obtain certain assurances of value of the target entity's assets prior to
consummating such a transaction, with further assurances that an audited
statement would be provided within seventy-five days after closing of
such a transaction. Closing documents relative thereto will include
representations that the value of the assets conveyed to or otherwise so
transferred will not materially differ from the representations included in
such closing documents.

The Registrant has no full time employees. The Registrant's officers have
agreed to allocate a portion of their time to the activities of the
Registrant, without compensation. Management anticipates that the
business plan of the Company can be implemented by each officer
devoting approximately twenty hours per month to the business affairs of
the Company and, consequently, conflicts of interest may arise with
respect to the limited time commitment by such officers. See "ITEM 6,
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND
CONTROL PERSONS."

The Company's officers and directors may, in the future, become
involved with other companies which have a business purpose similar to
that of the Company. As a result, conflicts of interest may arise in the
future. If such a conflict does arise and an officer or director of the
Company is presented with a business opportunity under circumstances
where there may be a doubt as to whether the opportunity should belong
to the Company or another company they are affiliated with, they will
disclose the opportunity to all such companies. If a situation arises in

                                11
<PAGE>
which more than one company desires to merge with or acquire that
target company and the principals of the proposed target company have
no preference as to which company will merge or acquire such target
company, the company of which Mr. Porath first became an officer and
director will be entitled to proceed with the transaction.

Any business combination or transaction will likely result in a significant
issuance of shares and substantial dilution to present stockholders of the
Registrant. The Articles of Incorporation of the Company provides that
the Company may indemnify officers and/or directors of the Company
for liabilities, which can include liabilities arising under the securities
laws. Therefore, assets of the Company could be used or attached to
satisfy any liabilities subject to such indemnification.


ITEM 12. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND
FINANCIAL DISCLOSURE.

The Registrant recently engaged its current auditors and has not had
previously engaged accountants since 1995.  There are no disagreements
with the prior accountants on accounting and financial disclosures.


ITEM 13. RECENT SALES OF UNREGISTERED SECURITIES.

During the past three years, the Registrant has sold securities which were
not registered as follows:

                                                  NUMBER
     DATE                     NAME                OF SHARES  CONSIDERATION
----------------    -------------------------     ---------  -------------
October 19, 2000    Prime Rate Income &           2,000,000  Cash of $10,100
                    Dividend Enterprises, Inc.
October 19, 2000    Alvin N. Roth                   219,425  Services rendered
October 19, 2000    William Nordstrom                50,000  Services rendered
                                                -----------
     Total                                        2,269,425

















                               12
<PAGE>
PART F/S

FINANCIAL STATEMENTS.

Attached are audited financial statements for the Company for the years
ended March 31, 2002 and March 31, 2001.  The following financial
statements are attached to this report and filed as a part thereof. See
pages F-1 through F-8.

1) Table of Contents - Financial Statements            F-1
2) Report of Independent Certified Public Accountants  F-2
3) Balance Sheets                                      F-3
4) Statements of Operations                            F-4
5) Statement of Changes in Stockholders' Equity        F-5
6) Statements of Cash Flows                            F-6
7) Notes to Financial Statements                       F-7


















                                 13
<PAGE>
PART IV

ITEM 1. EXHIBIT INDEX.

EXHIBIT
NUMBER         DESCRIPTION              LOCATION
-----------    -----------              --------
(23)           Consents - Experts:

23.1           Consent of Miller & McCollom, P.C.          Filed herewith










































                                   14
<PAGE>
<PAGE>

                         COMMONWEALTH EQUITIES, INC.
                         (A Development Stage Company)

                            FINANCIAL STATEMENTS

                                  With

            REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS



                                                    Page
                                                    ----
Report of Independent Certified Accountants         F-2

Financial Statements

    Balance Sheets                                  F-3

    Statements of Operations                        F-4

    Statement of Changes in Stockholders' Equity    F-5

    Notes to Financial Statements                F-7 to F-11

















                                  F-1
<PAGE>

Report of Independent Certified Public Accountants

The Board of Directors
Commonwealth Equities, Inc.
Wellington, FL

We have audited the accompanying balance sheets of Commonwealth Equities,
Inc. (A Development Stage Company) as of March 31, 2002, and 2001 and the
related statements of operations, stockholders' equity and cash flows for
the two years ended March 31, 2002. These financial statements are the
responsibility of the company's management. Our responsibility is
to express an opinion on these financial statements based on our audit.

We conducted our audit 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 made by management, as well as
evaluating the overall financial statement presentation.  We believe that
our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements, referred to above, present fairly,
in all material respects, the financial position of Commonwealth Equities,
Inc. as of March 31, 2002, and 2001 and the results of its operations,
changes in its stockholders' equity and its cash flows for the two years
ended March 31, 2002, in conformity with accounting principles generally
accepted in the United States of America.

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As described in Note 5, the Company
has minimal working capital and no business operations, which raise
substantial doubts about its ability to continue as a going concern. The
financial statements do not include any adjustments that might result from
the outcome of this uncertainty.

/s/ Miller and McCollom

MILLER AND MCCOLLOM
Certified Public Accountants
4350 Wadsworth Boulevard, Suite 300
Wheat Ridge, Colorado 80033
July 1, 2002


                                  F-2
<PAGE>

                         COMMONWEALTH EQUITIES, INC.
                       (A Developement Stage Company)
                             BALANCE SHEETS

                                ASSETS
<TABLE>
<CAPTION>
                                                    March 31,      March 31,
                                                      2002           2001
                                                    ---------      ---------
<S>                                              <C>             <C>
CURRENT ASSETS
 Cash and cash equivalents                        $    4,163      $    10,100
   Total current assets                                4,163           10,100
                                                  ----------      -----------
       Total assets                               $    4,163      $    10,100
                                                  ==========      ===========
<CATION>
                     LIABILITIES AND STOCKHOLDERS' EQUITY
<S>                                              <C>             <C>
CURRENT LIABILITIES
  Accounts payable - related party (Note 4)       $    3,212      $     ---
                                                  ----------      -----------
    Total current liabilities                          3,212            ---
                                                  ----------      -----------
        Total liabilities                              3,212            ---

Commitments and contingencies (Notes 2 and 3)           ---             ---

STOCKHOLDERS' EQUITY
  Prefered stock, $.0001 par value; 1,000,000
   shares authorized , none issued and
   outstanding                                          ---             ---
  Common stock, $.001 par value, 50,000,000
   shares authorized, 4,000,000 shares issued
   and outstanding at December 31, 2001 and
   March 31, 2002                                      4,000            4,000
  Additional paid-in capital                         655,235          655,235
  Deficit accumulated during the developement
   period                                           (658,284)        (649,135)
                                                  -----------     ------------
    Total Stockholders' equity                    $      951      $    10,100
                                                  ----------      -----------
    Total liabilities and stockholders; equity    $    4,163      $    10,100
                                                  ==========      ===========


</TABLE>



  The accompanying notes are and integral part of the financial statements.


                                F-3

<PAGE>

                         COMMONWEALTH EQUITIES, INC.
                       (A Developement Stage Company)

                         STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                                                                 For the
                                                               period from
                                                                August 8,
                                                               1995 (date
                                                                of charter
                                     Year           Year        renewal)
                                    Ended          Ended         through
                                   March 31,      March 31,     March 31,
                                     2002           2001          2002
                                   --------       --------      ---------
<S>                             <C>            <C>            <C>
Revenues                         $      ---     $      ---     $      ---

Costs and Expenses -
  Professional fees                   8,738            ---          8,738
  Stock issued for services             ---          1,375          1,375
  Administrative and other              411            ---            411
                                 ----------     ----------     ----------
                                      9,149          1,375         10,524

Net (loss)                       $   (9,149)    $   (1,375)    $  (10,524)
                                 ===========    ===========    ===========
(Loss) per share                 $        *     $        *     $        *
                                 ===========    ===========    ===========
Weighted average shares
  outstanding                     4,000,000      4,000,000      4,000,000
                                 ===========    ===========    ===========
* Less and $.01 per share




</TABLE>





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

                                 F-4

<PAGE>


                         COMMONWEALTH EQUITIES, INC.
                       (A Developement Stage Company)

              STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
                                          Additional
                    Common      Stock      Paid-in     Accumulated
                    Shares     Amount      Capital     (Deficit)     Total
                    ------     ------     ----------   -----------  -------
<S>               <C>        <C>         <C>          <C>          <C>
Balance at August
8, 1995 (date of
charter renewal)
and at March 31,
2000               1,730,575    1,730       646,030     (647,760)         ---

Common stock
issued for
Services             269,425      270         1,105          ---        1,375

Common stock
issued for cash    2,000,000    2,000         8,100          ---       10,100

Net (loss) for
year ended March
31, 2001                 ---      ---           ---       (1,375)      (1,375)
                   ---------  -------       -------     ---------     --------
Balance at March
31, 2001           4,000,000   4,000        655,235     (649,135)      10,100

Net (loss) for
year ended March
31, 2002                 ---     ---            ---       (9,149)      (9,149)
                   ---------  ------        --------    ---------     --------
Balance at March
31, 2002           4,000,000  $4,000        $655,235   $(658,284)     $   951
                   =========  ======        ========   ==========     =======

</TABLE>

  The accompany notes are and integral part of the financial statements.

                                 F-5
<PAGE>
                         COMMONWEALTH EQUITIES, INC.
                       (A Developement Stage Company)

                          STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
                                                                   For the
                                                                  period from
                                                                   August 8,
                                                                  1995 (date
                                                                   of charter
                                        Year           Year        renewal)
                                       Ended          Ended         through
                                      March 31,      March 31,     March 31,
                                         2002           2001          2002
                                      --------       --------      ---------
<C>                                 <C>           <C>            <C>
Cash flows from operating activities:
 Net loss                            $   (9,149)   $   (1,375)    $   (10,524)
  Adjustments to reconcile net loss
    to net cash used in operating
    activities:
      Increase in accounts payable        3,212            ---          3,212
      Stock issued for services             ---          1,375          1,375
                                     ----------    -----------    -----------
Net cash (used) by operating
  activities                             (5,937)           ---         (5,937)

Cash flows from investing activities        ---            ---            ---
                                     ----------    -----------     -----------
Net cash (used) by investing
  activities                                ---            ---            ---

Cash flows from financing activities:
  Common stock issued for cash              ---         10,100         10,100
                                     ----------    -----------     ----------
Net cash provided (used) by
  financing services                        ---         10,100         10,100
                                     ----------    -----------     ----------
Net (increase) decrease in cash          (5,937)           ---          4,163

Cash at beginning of period              10,100            ---            ---
                                     ----------    -----------     ----------
Cash at end of period                $    4,163    $    10,100     $    4,163
                                     ----------    -----------     ----------
Supplemental disclosure of cash
  flow information:

Interest paid                        $      ---    $       ---     $      ---
                                     ----------    -----------     ----------
Income taxes paid                    $      ---    $       ---     $      ---
                                     ----------    -----------     ----------

</TABLE>




  The accompany notes are and integral part of the financial statements.
                                  F-6

<PAGE>
                     COMMONWEALTH EQUITIES, INC.
                   (A Development Stage Company)
                   Notes to Financial Statements
                           March 31, 2002

Note 1 Summary of Significant Accounting Policies
-------------------------------------------------
This summary of significant accounting policies of Commonwealth Equities,
Inc. (Company) is presented to assist in understanding the Company's
financial statements. The financial statements and notes are representations
of the Company's management, who is responsible for their integrity and
objectivity. These accounting policies conform to generally accepted
accounting principles in the United States of America and have
been consistently applied in the preparation of the financial statements,
which are stated in U.S. Dollars.

Organization
------------
The Company was incorporated in the State of Minnesota as Warren B. Johnson
& Associates, Inc. On May 15, 1968, the Company amended its name to
International House of Diamond Jim's, Inc., and on February 25,1969, the
Company amended its name to Warren Johnson's, Inc.; and on February 25,
1971, the Company amended its name to Commonwealth Equities, Ind., and
re-domiciled as a Delaware corporation. The Company renewed its charter on
August 8, 1995. The Company is in the development stage and has had no
significant operations.

Description of Business
-----------------------
Management's plan is to start a new business or seek a business combination.

Development Stage Enterprise
----------------------------
Based upon the Company's business plan, it is a development stage enterprise
as of the year ending March 31, 2002. Accordingly, the Company presents its
financial statements in conformity with the accounting principles generally
accepted in the United States of America that apply in establishing operating
enterprises. As a development stage enterprise, the Company discloses the
deficit accumulated during the development stage and the cumulative
statements of operations and cash flows from inception to the current
balance sheet date.

Per Share Information
---------------------
Per share information is computed by dividing the net income or
loss by the weighted average number of shares outstanding during the period.


                                F-7
<PAGE>
                    COMMONWEALTH EQUITIES, INC.
                   (A Development Stage Company)
                   Notes to Financial Statements
                         March 31, 2002

Note 1 Summary of Significant Accounting Policies, continued
------------------------------------------------------------
Use of Estimates in the Preparation of Financial Statements
-----------------------------------------------------------
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements
and the reported amounts of revenue and expenses during the reporting
period. Actual results could differ from those estimates.

Risks and Uncertainties
-----------------------
The Company is subject to substantial business risks and uncertainties
inherent in starting a new business. There is no assurance that the Company
will be able to generate sufficient revenues or obtain sufficient funds
necessary for launching a new business venture.

Revenue Recognition
-------------------
The Company has had no revenue to date.

Cash and Cash Equivalents
-------------------------
The Company considers cash and cash equivalents to consist of cash on hand
and demand deposits in banks with an initial maturity of 90 days or less.

Fair Value of Financial Instruments
-----------------------------------
Financial Accounting Standards Board ("FASB") issued Statement of Financial
Accounting Standards No. 107 ("SFAS 107"), "Disclosures About Fair Value
of Financial Instruments." SFAS 107 requires disclosure of fair value
information about financial instruments when it is practicable to estimate
that value. The carrying amount of the Company's cash, cash equivalents,
accounts payable-related party approximate their estimated fair values due
to their short-term maturities.

                                 F-8
<PAGE>
                     COMMONWEALTH EQUITIES, INC.
                    (A Development Stage Company)
                    Notes to Financial Statements
                           March 31, 2002

Note 1  Summary of Significant Accounting Policies, continued
-------------------------------------------------------------
Recent Accounting Pronouncements
--------------------------------
The Company adopted Statement of Position No. 98-5 ("SOP 98-5"), "Reporting
the Costs of Start-Up Activities." SOP 98-5 requires that all non-governmental
entities expense the cost of start-up activities, including organizational
costs as those costs are incurred.

In June of 1998, the FASB issued Statement of Accounting Standards No. 133
("SFAS 133"), "Accounting for Derivative Instruments and Hedging Activities."
SFAS 133 establishes accounting and reporting standards for derivative
instruments, including certain derivative instruments embedded in other
contracts, and for hedging activities.  It requires that an entity recognize
all derivatives as either assets or liabilities on the balance sheet at their
fair value. This statement, as amended by SFAS 137, is effective for financial
statements for all fiscal quarters to all fiscal years beginning after June
15, 2000. The Company does not expect the adoption of this standard to
have a material impact on its results of operation, financial position or
cash flows, as it currently does not engage in any derivative or hedging
activities.

The Company adopted Statement of Financial Accounting Standards ("FAS")
No. 130, "Reporting Comprehensive Income". FAS No. 130, requires that
the components and total amounts of comprehensive income be displayed in
the financial statements beginning in 1998. Comprehensive income includes
net income and all changes in equity during a period that arises
from non-owner sources, such as foreign currency items and unrealized gains
and losses on certain investments in equity securities. The company does not
have any components of comprehensive income other than net loss.

In December 1999, The Securities and Exchange commission ("SEC") issued
Staff Accounting Bulletin No. 101 ("SAB 101"), "Revenue Recognition in
Financial Statements." SAB 101 summarized certain of the SEC's views
regarding the application of generally accepted accounting principles to
revenue recognition in financial statements.  In June 2000, the SEC
amended SAB 101 to require companies with fiscal years beginning after
December 15, 1999 to implement the provisions of SAB 101 no later than the
fourth fiscal quarter.  The Company adopted the provisions of SAB 101 in the
fiscal quarter ending January 31, 2001. The Company does not expect the
adoption to have any material effect on its financial statements.

                                  F-9
<PAGE>
                      COMMONWEALTH EQUITIES, INC.
                     (A Development Stage Company)
                     Notes to Financial Statements
                            March 31, 2002


Note 1  Summary of Significant Accounting Policies, continued
-------------------------------------------------------------
Income taxes
------------
The Company records deferred taxes in accordance with Statement of Financial
Accounting Standards (SFAS) 109, "Accounting for Income Taxes."  The
statement requires recognition of deferred tax assets and liabilities for
temporary differences between the tax bases of assets and liabilities and
the amounts at which they are carried in the financial statements, the effect
of net operating losses, based upon the enacted tax rates in effect for the
year in which the differences are expected to reverse.  A valuation allowance
is established when necessary to reduce deferred tax assets to the amount
expected to be realized.

Other
-----
The Company has selected March 31 as its fiscal year end.

The company has paid no dividends.

No advertising expense has been incurred.

The Company consists of one reportable business segment.

The Company has not entered into any leases.

All of the Company's assets are located in the United States.

Note 2  Income Taxes
--------------------
As of March 31, 2002, the Company has an estimated net operating loss carry
forward of $10,524 to offset future taxable income. The net operating loss
carry forward, if not used, will expire between 2016 and 2022, and may be
restricted if there is a change in ownership. No deferred income taxes have
been recorded because of the uncertainty of future taxable income to
be offset.

Significant components of the Company's net deferred income
tax asset are as follows:

     Net operating losses carry forward  $   1,947
     Deferred income tax allowance          (1,947)
                                         ----------
     Net deferred income tax asset             ---

                             F-10
<PAGE>

                       COMMONWEALTH EQUITIES, INC.
                     (A Developement Stage Company)
                     Notes to Financial Statements
                          March 31, 2002

Note 2  Income Taxes, continued
-------------------------------
The reconciliation of income tax (benefit) computed at the federal
statutory rate to income tax expense (benefit) is as follows:

     Tax (benefit) at Federal statutory rate     (15.00)%
     State tax (benefit) net of Federal benefit   (3.50)
     Valuation allowance                          18.50
     Tax provision (benefit)                      00.00

Note 3  Common Stock
--------------------
During the year ended March 31, 2001, the Company issued 2,269,425 shares of
its common stock. The Company issued 269,425 to two individuals to recognize
services rendered for the Company including 219,467 shares issued to a
director.  In accordance with FAS 123, this stock was recorded at $1,375,
which was the estimated fair value of the services performed at a
weighted-average price of $.0051 per share. In addition, the Company issued
2,000,000 for $10,100 to a corporation, which then became a fifty-percent
owner.

Note 4  Related Party
---------------------
The Company owes advances made to it by the fifty-percent owner, a related
party.

Note 5  Basis of Presentation
-----------------------------
Generally accepted accounting principles in the United States of America
contemplates the continuation of the Company as a going concern.  However,
the Company has minimal working capital and no business operations, which
raises substantial doubt about the Company's ability to continue as a going
concern.  Management is attempting to obtain capital for a new business
or locate a business combination candidate. Management believes actions
planned and presently being taken provide the opportunity for the Company to
continue as a going concern.



                                    F-11



<PAGE>

                                SIGNATURES


In accordance with Section 12 of the Securities Exchange Act of 1934,
the registrant caused this registration statement to be signed on its behalf
by the undersigned, thereunto duly authorized.

(REGISTRANT)                    COMMONWEALTH EQUITIES, INC.





BY(Signature)                   /s/Peter Porath
(Date)                          July 9, 2002
(Name and Title)                Peter Porath, President and Director


BY(Signature)                   /s/Michael L. Schumacher
(Date)                          July 9, 2002
                                Michael L. Schumacher
                                Secretary, Treasurer and Director

















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