SECURITIES AND
EXCHANGE COMMISSION



Washington, D.C. 20549



Form 10-KSB



Annual Report Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934



Date of Report: December
31, 2002



DYNASTY INTERNATIONAL,
INC.

(Exact name of
registrant as specified in its charter)





|Nevada                                                               | 333-85414                      | 98-0377992                             
|-------------------------------------------------------------------- | ------------------------------ | ---------------------------------------
|(State of other
      jurisdiction of incorporation or organization) | (Commission File
      Number) | (IRS Employer
      Identification No.)



101 Beauvista Drive,
Sherwood Park, Alberta Canada, T8A 3X2

(Address of principal
executive offices)



Registrant's telephone
number: (780) 467-6911



(Mark One)

> [X] Annual report
>     pursuant to Section 13 or 15(d) of the securities exchange act of 1934 for
>     the fiscal year ended December 31, 2002.

[ ] Transition report
under Section 13 or 15(d) of the securities exchange act of 1934



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





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



Common stock



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. [X] Yes [ ] No



Check if there is no
disclosure of delinquent filers in response to Item 405 or 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 [X]



State issuer's
revenues for its most recent fiscal year: The Company had no revenues for the
period ended December 31, 2002.



State the aggregate
market value of the voting and non-voting common equity held by non-affiliates
computed by reference to the price at which the common equity was sold, or the
average bid and asked price of such common equity, as of a specified date within
the past 60 days. $20,850



State the number of
shares outstanding of each of the issuer's classes of common equity, as of the
latest practicable date. As of December 31, 2002, there were 2,608,500 shares of
common stock issued and outstanding.





PART I



Item 1. Description of
Business



Business Development

Dynasty International
Corporation was incorporated on June 29, 2001, in the state of Nevada. Although
our name contains the word international, we do not conduct international
operations and we do not currently have plans to do so. We are a developmental
stage company. We have never conducted operations, we have had no revenues and
we have few assets. We have never declared bankruptcy, we have never been in
receivership, and we have never been involved in any legal action or
proceedings. Since becoming incorporated, we have not made any significant
purchase or sale of assets, nor have we been involved in any mergers,
acquisitions or consolidations. Dynasty is not a blank check registrant as that
term is defined in Rule 419(a)(2) of Regulation C of the Securities Act of 1933,
since it has a specific business plan or purpose. Neither Dynasty nor its
officers, directors, promoters or affiliates, has had preliminary contact or
discussions with, nor do we have any present plans, proposals, arrangements or
understandings with any representatives of the owners of any business or company
regarding the possibility of an acquisition or merger.



Business of Issuer

We are developing a
business as a specialty retailer of home water quality testing kits and water
purification devices. All of the products we will be selling are currently
available from various manufacturers and distributors. They are specially
designed for use by the do-it-yourself homeowner and residential renter.
Whenever possible we will be purchasing products from Canadian manufacturers and
distributors such as Ecowater, Envirogard, Purolite, R-Can Environmental and
Brita Canada.



We do not make any
claims, ascertains or warranties of our own concerning the reliability or
efficiency of any water quality testing kit or device, or purification device,
or process. We also do not make any claim as to the degree of purity or safeness
of home tap water in general or specifically. As a reseller, we do not and will
not make any warranties or claims as to the performance, reliability accuracy or
safety of any of the products we intend to sell.



Principal Products and
Services

We will be offering two
types of products for sale to consumers. All products offered will be obtained
from existing manufacturers and wholesale distributors. The first is a line of
water quality testing kits. These home use test kits enable consumers to test
their own tap water and determine if the following types of contamination or
imbalances are present: ametryn, bacteria, lead, nitrates, nitrites, chlorine,
iron, copper, pH, alkalinity, hardness, iron bacteria, hydrogen sulfide,
atrazine, propazine, prometryn, prometon, simazine, cyanazine, desethyl atrazine,
desisopropyl atrazine, hydroxy atrazine, tertbuthylane, atraton, and simetron.



The second product type
is a line of water purification devices specifically designed to alleviate one
or more problems identified above and commonly found in household tap water. We
will carry the following devices: distillers, reverse osmosis systems,
softeners, below sink filters, countertop filters, portable filters, shower
filters and specialty filters. Reverse osmosis is not merely another type of
filter; it is filtration process that allows the removal of ultra small
particles that conventional filters cannot remove. For an illustrated
explanation of the reverse osmosis process you may visit http://www.filtrationconcepts.com/frames/FCI/explain.html



If a consumer believes
he or she has a problem with their water they will be able to purchase a test
kit from us and perform a simple at home test on their water to determine if
there is a problem. If a problem is found, the consumer will be able to purchase
the appropriate water purification devise from us as well. By testing the water
first, the consumer can be sure there is a problem before making an unnecessary
purchase. Consumers can also be assured they are purchasing the right corrective
device for a problem they know they have.



All of the products we
will be selling are specifically designed for the home do-it-yourself market.
The products come with complete instructions and will carry manufacturer's
warranties whenever available.



The Market

Dynasty will be
marketing its products exclusively in Canada. Consumer protection laws governing
the sale of water purification devices are much more stringent in the United
States than they are in Canada. We do not have the financial resources available
at this time to ensure compliance with the American law. We have no plans to
enter the American market during the foreseeable future.



We believe that
consumers have become much more concerned about the quality of their drinking
water in recent years. In the last three years there have been two cases in
Canada where community drinking water systems have been contaminated and people
have died as a direct result of drinking the contaminated water.



In May of 2000, the
small town of Walkerton, Ontario was struck with an outbreak of



Later, during the period
from March to May of 2001, the deaths of 3 people were linked to a
cryptosporidiosis outbreak in North Battleford, Saskatchewan, Canada. According
to Health Canada, from 5800 to 7100 people were infected by contaminated
drinking water. (For more details see the Health Canada website)



We believe that widely
reported cases like these have heightened public awareness regarding
contaminated water and have made consumers much more interested in taking
precautions. We also believe that the market for home use test kits and
purification devices will grow as more and more consumers have first hand
experiences with and become more aware of these products.

The preceding discussion
was offered only as examples of the events of recent years that we believe have
caused increased public awareness of municipal water quality and safety issues.
We do not and will not claim that any product that we will sell will identify or
treat the type of contamination mentioned in the two examples.



Competition and
Competitive Strategy

Currently there are no
specific barriers to entry that exist in this retail sector. Unlike the United
States, Canada does not have consumer protection guidelines covering the sale of
water filtration equipment.



As a start-up company
our competitive position within the industry will be very poor. The challenge
before us will be to build our business from nothing and establish ourselves as
a credible participant in an already existing industry.



At present there are
other companies selling test kits and purification systems on the Internet;
however almost all of the sites we found were in the United States. From the
collective experience of our founders and from anecdotal evidence gleaned
through personal conversations, we have heard that many Canadian consumers are
reluctant to purchase items from non-Canadian Internet retailers. A high
currency exchange rate, shipping and customs problems and time delays all make
purchasing from American Internet retailers unattractive and inconvenient. We
therefore believe there is an opportunity for a Canadian based Internet retailer
for these products.



We also believe we can
capture an adequate amount of the traditional walk-up retail trade to make a
retail store profitable. Our founders have examined many telephone directories,
newspaper and magazines; they have surfed the Internet and visited dozens of
retail stores. They found that many hardware, department and home improvement
type stores sell water purification devices but that very few sell any type of
testing kits, and none sell a complete line of devices to handle all
purification requirements. We have also found that, more often than not, there
is no one available at these stores to answer questions about the various
products. The devices are nearly always sold as a one-size-fits-all type
product. Because of the increased consumer awareness about the water quality
problem, we believe consumers will react favorably to a marketing strategy based
on sound product information and consumer education.



Distribution

In the beginning stage
of our development we will warehouse our products at our executive offices in
Sherwood Park, Alberta. Internet sales orders will be filled from that location
until such time as we have a retail store facility.



Once we have a retail
store location, all stock will be held at our store and both walk-up retail and
Internet orders will be filled from the same location. Internet orders will be
shipped via Canada Post Express Courier Service.



In the event that we do
not secure a store location, we will continue to warehouse or stock and fill
orders from our executive offices.



New and or Innovative
Products and Services

We have never made any
announcements concerning the introduction of new or innovative products or
services, nor do we have any intentions to do so in the future.



Sources and Availability
of Products and Supplies

All products and
supplies that we require for consumption or re-sale are readily available from
numerous sources. Product shortages, restrictions or any other type of limiting
factors have not characterized this industry, and there are no indications that
such problems will occur in the foreseeable future. We will not be
manufacturing, assembling or processing any of the products, or any part of the
products that we will be selling. We will be purchasing all of our inventory and
supplies from wholesalers or manufacturers.



Dependence on One or a
Few Major Customers

This retail business is
not the type of business that is, or can be, dominated by one or a small number
of customers.



Patent, Trademark,
License & Franchise Restrictions and Contractual Obligations &
Concessions

There are no inherent
factors or circumstances associated with this industry or any of the products or
services that we plan to provide, which would give cause for any patent,
trademark or license infringements or violations. We have also not entered into
any franchise agreements or other contracts that have given or could give rise
to obligations or concessions.

Governmental Controls
and Approvals

As a retailer, the major
area for government control or need for government approval would be concerning
business licensing, Labor Standards, and Occupational Health and Safety. Our
Officers and Directors are aware of the various requirements in this regard and
will make the necessary arrangements as the business grows and employees are
hired.



All of the products
being offered by us for sale will be purchased from major wholesale distributors
and will carry the necessary Government and industry standard approvals.



Existing or Probable
Government Regulations

Other than the licensing
requirements discussed above, there are no other types of government regulations
existing or being contemplated that would adversely affect our ability to
operate.



Research and Development
Activities and Costs

Our Directors and
Officers have undertaken minimal research and virtually no development to date
regarding product, location and shipping. We do not have any plans to undertake
any additional research or development in the future.



Compliance With
Environmental Laws

There are no
environmental laws that have been enacted, nor are we aware of any such laws
being contemplated for the future to address issues specific to our business.



Facilities

We do not own or rent
facilities of any kind. At present we are operating from our official address
that is located within the offices of our President. Our President provides this
space free of charge. We will continue to use this space for our executive
offices for the foreseeable future.



We will be renting
retail store space as soon as funds are available from raised capital or
earnings from Internet sales. The amount of raised capital or sales revenue
required will depend on the rental cost of the retail space. The cost of renting
retail space in a shopping mall varies significantly from one mall to another as
well as within locations. See the discussion found under Item 17 - Plan of
Operations.



Employees

We have no intention to
hire employees until our business has been successfully launched and has
sufficient reliable sales revenues. Our Officers and Directors will do whatever
work is necessary to bring the business to the point of earning revenues from
Internet sales, as well as retail store sales. Human resource planning will be
part of an ongoing process that will include constant evaluation of operations
and revenue realization. We do not expect to hire any employees before the end
of this calendar year. In the event that we have strong and reliable revenues we
will consider hiring up to two employees after the beginning of the next
calendar year.



Rules Governing
Low-Priced Stocks that May Effect Ability to Resell Shares

Our Common Stock is
currently considered a "penny stock" under federal securities laws
since its market price is below $5.00 per share. Penny stock rules generally
impose additional sales practice and disclosure requirements on broker-dealers
who sell or recommend such shares to certain investors.



Broker-dealers who sell
penny stock to certain types of investors are required to comply with the SEC's
regulations concerning the transfer of penny stock. If an exemption is not
available, these regulations require broker-dealers to: make a suitability
determination prior to selling penny stock to the purchaser; receive the
purchaser's written consent to the transaction; and, provide certain written
disclosures to the purchaser. These rules may affect the ability of
broker-dealers to make a market in, or trade our shares. In turn, this may make
it very difficult for investors to resell those shares in the public market.



Reports to Security
Holders

We will make available
to securities holders an annual report, including audited financials on Form
10-K or Form 10-KSB.



The public may read and
copy any materials filed with the SEC at the SEC's Public Reference Room at 450
Fifth Street, N.W., Washington, D.C. 20549. The public may obtain information
about the operation of the Public Reference Room by calling the SEC at
1-800-SEC-0330. The SEC maintains an Internet site that contains reports, proxy
and information statements, and other information regarding issuers that file
electronically with the SEC at



Item 2. Description of
Property.



We do not own any
property, real or otherwise. For the first year we will conduct our
administrative affairs from our President's office, at no cost to the Company.
Retail space will be rented when we have sufficient funds available. The cost
has not yet been determined; however, we expect to pay market rates.



We do not have any
investments or interests in any real estate. We also do not invest in real
estate mortgages, nor do we invest in securities of, or interests in, persons
primarily engaged in real estate activities.



Item 3. Legal
Proceedings



We are not a party to
any pending legal proceedings.



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



No matter was submitted
during the fourth quarter of the fiscal year ended December 31, 2002, to a vote
of security holders, through the solicitation of proxies or otherwise.



PART II



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



Market Information

Currently there is no
public trading market for our stock, and we have not applied to have our common
stock listed. We intend to apply to have our common stock quoted on the OTC
Bulletin Board. No trading symbol has yet been assigned.



Holders.

As of December 31, 2002,
we have sixteen (16) shareholder of record owning our common stock.



Dividends.

As of December 31, 2002,
we have not paid any dividends to our shareholders. There are no restrictions
that would limit our ability to pay dividends on common equity or that are
likely to do so in the future. We will not be paying dividends to our
shareholders in the foreseeable future.



Recent Sales of
Unregistered Securities



We have not sold
securities during the fiscal year ended December 31, 2002 without registering
the securities under the Securities Act of 1933 on two separate occasions.



Item 6. Management's
Discussion and Analysis or Plan of Operation.



Dynasty is a development
stage company with no operations, no revenue, no financial backing and few
assets. Our plan of operations is to build a business selling water quality
testing kits and purification devices. We intend to do this by marketing
directly to consumers through the Internet and from a retail store location. We
will start by establishing an Internet storefront and then by opening a modest
retail store facility within another several months.



Our founders have
visited dozens of retailers that sell water quality testing and purification
products and found that virtually every one of them does so in addition to
selling a large selection of other products. We have also found that most
retailers that sell these types of products provide little or no product
information or customer education.



We believe these two
factors provide an opportunity to stand out and differentiate ourselves from
most other retailers. Unlike nearly every other business that sells these
products, we will sell only water quality testing and purification products. We
believe these products are important enough and sufficiently unique to warrant
establishing a specialty retail business.



We are currently in the
process of identifying specific products and determining reliable wholesale
suppliers. We have a short list of the types of testing kits and purification
devices we are going to sell and we will have brand names and models identified
by September 1, 2003. Supplier selection will take less than one month after we
have determined the actual makes and models we are looking for. We will be
ordering inventory as soon as a supplier or suppliers have been selected and
funds are available.



We have no plans to
enter into supply contracts with any suppliers. We are not looking for exclusive
marketing rights nor do we plan to enter into any agency agreements. Purchasing
inventory will simply be a matter of placing an order with a manufacturer or
distributor once we have determined what we are looking for and the required
funds are available. The selection of a product line will be completed by
September 1, 2003.



We have already begun to
design and build our website. Our domain name has been registered and it will be
located on the World Wide Web at



Our website will provide
basic information and facts about safe drinking-quality water. It will also
discuss some of the common problems found in untreated tap water and give advice
on how to diagnose the most basic problems.



All of our products will
be available for sale on our website. During the initial several months of
operation Internet sales orders will be filled from our executive offices.
Customers will be able to use e-mail, telephone, fax or regular mail to place
their orders. The orders will be shipped within one business day via Canada Post
Express Package service. Payment for the transaction will be by major credit
card, check, money order or bank draft and must accompany each order. We will
begin accepting and filling customer orders as soon as our website is
functional.



We will not be selling
or shipping our products outside of Canada, therefore all of the prices
appearing on our website will be in Canadian dollars. There will be an
explanation of this policy on our website. Orders from non-Canadian residents
will be declined and the persons placing the order will be advised by e-mail.



In addition to our
website, we intend to open a retail facility in one of the major shopping malls
in Edmonton, Alberta. The store will be housed in a kiosk type structure
situated in the main traffic area of the mall. We have discussed our plans and
requirements with administrative officials from several malls, and we have been
advised that kiosk facilities are, and continue to be, available. The structure
may require minor modifications to suit our needs. The cost of those minor
modifications, if required, will be our responsibility. We have included an
allowance for these costs in the budget section of this document. The chart
above indicates how we intend to proceed with this part of our plan of
operations in the event that we do not raise all of the funding we require.



In order to keep our
operating costs to a minimum, our officers and directors have offered to lend us
equipment whenever possible. All three of our directors have computers and have
agreed to make them available at no cost until such time as we can afford to
purchase our own from sales earnings.



During the first stages
of our growth, our officers and directors will also provide their labor at no
charge. They will undertake all administrative tasks, as well as operate the
website and the retail store. As sales revenues increase we will continue to
re-evaluate the staffing situation. Our officers and directors will continue to
operate our store, free of charge, until our sales revenues can sustain the
added expense of hiring sales people. We do not anticipate hiring any staff
until after the beginning of the next calendar year.



Although we have not yet
settled on a product line or had detailed discussions with potential suppliers,
we have found through limited discussions with suppliers and price comparisons
with existing retailers that other retailers appear to be marking up these
products by approximately 40 percent. We believe that by staying within the
existing pricing range we will be able to effectively compete with our major
competitors. Our marketing strategy will be to offer a full line of products to
handle all common water contamination problems and to ensure superior product
knowledge at prices that are comparable to the competition.

How long we will be able
to satisfy our cash requirements, and whether we will require additional outside
funding in the next twelve months depends on how quickly we can generate sales
revenue and how much revenue can be generated.



We have no plans to
undertake product research and development during the next twelve months. There
are also no plans or expectations to purchase or sell any plant and or
significant equipment in the first year of operations. Management also has no
intention of hiring any full time permanent employees during the first year of
operations.



During the first year of
operations, we will concentrate our efforts exclusively on building our Internet
business and one retail store location in Edmonton, Alberta. As we gain
experience and develop sufficient revenues from sales, we will consider
expanding our business within the region and possibly to other locations within
Canada. We have no plans to expand outside Canada at this time.



Item 7. Financial
Statements









DYNASTY INTERNATIONAL
CORPORATION



(A DEVELOPMENT STAGE
COMPANY)



FINANCIAL STATEMENTS



DECEMBER 31, 2002 AND
DECEMBER 31, 2001







TABLE OF CONTENTS





|                                                                      |                                                                        |                                                    | Page Number
|--------------------------------------------------------------------- | ---------------------------------------------------------------------- | -------------------------------------------------- | -----------
|                                                                      |                                                                        |                                                    |            
|INDEPENDENT
      ACCOUNTANT'S REPORT . . . . . . . . . . . . . . . . | 1                                                                     
|                                                                      |                                                                        |                                                    |            
|FINANCIAL
      STATEMENTS                                            |                                                                       
|                                                                      |                                                                        |                                                    |            
|                                                                      | Balance Sheet . .
      . . . . . . . . . . . . . . . . . . .          | 2                                                 
|                                                                      |                                                                        |                                                    |            
|                                                                      | Statements of
      Operations and Deficit                             |                                                   
|                                                                      |                                                                        | Accumulated During
      the Development Stage . . | 3          
|                                                                      |                                                                        |                                                    |            
|                                                                      | Statement of
      Changes in Stockholders' Equity . . .               | 4                                                 
|                                                                      |                                                                        |                                                    |            
|                                                                      | Statements of Cash
      Flows . . . . . . . . . . . . . . . . . . . . | 5                                                 
|                                                                      |                                                                        |                                                    |            
|                                                                      | Notes to the
      Financial Statements . . . . . . . . . . . . . .    | 6                                                 







|David E. Coffey                   | 6767 W. Tropicana
      Ave., Suite 216, Las Vegas, NV 89103
|--------------------------------- | ------------------------------------------------------------
|Certified Public
      Accountant |                                                             



INDEPENDENT ACCOUNTANT'S
REPORT



To the Board of
Directors and Stockholders

of Dynasty International
Corporation

Surrey, BC, Canada



I have audited the
accompanying balance sheet of Dynasty International Corporation (a development
stage company) as of December 31, 2002 and December 31, 2001 and the related
statements of operations, cash flows, and changes in stockholders equity for the
periods then ended, as well as the cumulative period from June 29, 2001 (date of
inception) to December 31, 2002. These statements are the responsibility of
Dynasty International Corporation's management. My responsibility is to
express an opinion on these financial statements based on my audit.



I conducted my audit in
accordance with generally accepted auditing standards. Those standards require
that I plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An audit included
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. I believe that my audit
provides a reasonable basis for my opinion.



In my opinion, the
accompanying financial statements present fairly, in all material respects, the
financial position of Dynasty International Corporation as of December 31, 2002
and December 31, 2001 and the related statements of operations, cash flows and
changes in stockholders' equity for the periods then ended, as well as the
cumulative period from June 29, 2001 to December 31, 2002 in conformity with
generally accepted accounting principles.



The accompanying
financial statements have been prepared assuming that the Company will continue
as a going concern. The Company ahs not generated revenues from operations which
raises substantial doubt 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. The Company intends to raise additional capital as
disclosed in Note D to these financial statements in order to provide additional
capital to begin its principal operations.





Dave E. Coffey, C.P.A.

Las Vegas, Nevada

March 28, 2003



DYNASTY INTERNATIONAL
CORPORATION

(A DEVELOPMENT STAGE
COMPANY)

BALANCE SHEETS



|                                       |                                                  |                                  |               | December 31,
      2002  |               | December 31,
      2001 
|-------------------------------------- | ------------------------------------------------ | -------------------------------- | ------------- | ------------------------ | ------------- | ------------------------
|                                       |                                                  |                                  |               | ------------------------ |               | ------------------------
|ASSETS                                 |                                                  |                                  |               |                         
|                                       |                                                  |                                  |               |                          |               |                         
|Cash                                   | $                                                | 1,553                            | $             | 14,000                  
|                                       |                                                  |                                  |               | ------------------------ |               | ------------------------
|                                       | Total Assets                                     |                                  | 1,553         | $                        | 14,000       
|                                       |                                                  |                                  |               | =============            |               | =============           
|                                       |                                                  |                                  |               |                          |               |                         
|LIABILITIS &
      STOCKHOLDES' EQUITY |                                                  |                                  |               |                         
|                                       |                                                  |                                  |               |                          |               |                         
|Accounts payable                       | $                                                | 10,051                           | $             | 0                       
|                                       |                                                  |                                  |               | -----------------------  |               | ----------------------- 
|                                       | Total Liabilities                                |                                  | 10,051        |                          | 0            
|                                       |                                                  |                                  |               |                          |               |                         
|Stockholders'
      Equity             |                                                  |                                  |               |                         
|                                       | Common stock,
      authorized                   |                                  |               |                          |              
|                                       | 10,000,000 shares
      at .001 par value,       |                                  |               |                          |              
|                                       | 2,608,500 shares
      and 2,400,000 shares,     |                                  |               |                          |              
|                                       | respectively,
      issued and outstanding       |                                  | 2,608         |                          | 2,400        
|                                       | Additional paid-in
      capital                 |                                  | 33,242        |                          | 12,600       
|                                       | Deficit
      accumulated during the             |                                  |               |                          |              
|                                       | development stage                                |                                  | (44,348)      |                          | (1,000)      
|                                       |                                                  |                                  |               | ------------------------ |               | ------------------------
|                                       |                                                  | Total Stockholders'
      Equity |               | (8,498)                  |               | 14,000                  
|                                       |                                                  |                                  |               |                          |              
|                                       | Total Liabilities
      and Stockholders' Equity | $                                | 1,553         | $                        | 14,000       
|                                       |                                                  |                                  | ============= |                          | =============



























The accompanying notes
are an integral part of these financial statements



-2-



DYNASTY INTERNTIONAL
CORPORATION

(A DEVELOPMENT STAGE
COMPANY)

STATEMENTS OF OPERATIONS
AND DEFICIT

ACCUMULATED DURING THE
DEVELOPMENT STAGE



|                                                       |                            |          | Year ending
      December 31, 2002 |         | From Inception,
      June 29, 2001 to Dec. 31, 2001 |          | From Inception,
      June 29, 2001 to Dec. 31, 2002
|------------------------------------------------------ | -------------------------- | -------- | ----------------------------------- | ------- | ---------------------------------------------------- | -------- | ----------------------------------------------------
|                                                       |                            |          | --------------------                |         | ----------------------                               |          | ----------------------                              
|Income                                                 | $                          | 0        | $                                   | 0       | $                                                    | 0       
|                                                       |                            |          |                                     |         |                                                      |          |                                                     
|Expenses                                               |                            |          |                                     |         |                                                      |         
|                                                       | Organizational
      Costs |          | 0                                   |         | 1,000                                                |          | 1,000                                               
|                                                       | Professional fees          |          | 25,102                              |         | 0                                                    |          | 25,102                                              
|                                                       | Consulting                 |          | 17,250                              |         | 0                                                    |          | 17,250                                              
|                                                       | Licenses and fees          |          | 365                                 |         | 0                                                    |          | 365                                                 
|                                                       | Office expenses            |          | 375                                 |         | 0                                                    |          | 375                                                 
|                                                       | Interest                   |          | 256                                 |         | 0                                                    |          | 256                                                 
|                                                       |                            |          | --------------------                |         | ----------------------                               |          | ----------------------                              
|Total expenses                                         |                            | 43,348   |                                     | 1,000   |                                                      | 44,348  
|                                                       |                            |          |                                     |         |                                                      |          |                                                     
|Net loss                                               |                            | (43,348) |                                     | (1,000) | $                                                    | (44,348)
|                                                       |                            |          |                                     |         |                                                      |          | ============                                        
|Retained earnings                                      |                            | (1,000)  |                                     | 0       |                                                      |         
|                                                       |                            |          | --------------------                |         | ----------------------                               |          |                                                     
|Deficit
      accumulated during the development stage | $                          | (44,348) | $                                   | (1,000) |                                                      |         
|                                                       |                            |          | ===========                         |         | =============                                        |          |                                                     
|                                                       |                            |          |                                     |         |                                                      |          |                                                     
|                                                       |                            |          |                                     |         |                                                      |          |                                                     
|Earnings (loss)
      per share, assuming dilution:    |                            |          |                                     |         |                                                      |         
|Net loss                                               | $                          | (0.02)   | $                                   | 0.00    | $                                                    | (0.02)  
|                                                       |                            |          | ============                        |         | =============                                        |          | =============                                       
|                                                       |                            |          |                                     |         |                                                      |          |                                                     
|Weighted average
      shares outstanding              | 2,428,667                  |          | 914,286                             |         | 1,870,737                                           
|                                                       |                            |          | ============                        |         | =============                                        |          | =============                                       
|                                                       |                            |          |                                     |         |                                                      |          |                                                     
|                                                       |                            |          |                                     |         |                                                      |          |                                                     























The accompanying notes
are an integral part of these financial statements



-3-





DYNASTY INTERNATIONAL
CORPORATION

(A DEVELOPMENT STAGE
COMPANY)

STATEMENT OF CHANGES IN
STOCKHOLDERS' EQUITY

FROM JUNE 29, 2001 (Date
of Inception) TO DECEMBER 31, 2002



|                                                                          | Common Shares |   |            |   |                                        |  
|------------------------------------------------------------------------- | ------------- | - | ---------- | - | -------------------------------------- | -
|                                                                          | Shares        |   | Amount     |   | Additional
      Paid-in
      Capital |  
|                                                                          | -----------   |   | ---------- |   | -------------                          |  
|                                                                          |               |   |            |   |                                        |  
|Balance, June 29,
      2001                                              | ---           | $ | ---        | $ | ---                                    | $
|                                                                          |               |   |            |   |                                        |  
|Issuance of common
      stock for cash,                                  |               |   |            |   |                                        |  
|August 8, 2001                                                            | 1,000,000     |   | 1,000      |   | 0                                      |  
|                                                                          |               |   |            |   |                                        |  
|Less net loss                                                             | 0             |   | 0          |   | 0                                      |  
|                                                                          | -----------   |   | ---------- |   | -------------                          |  
|Balance, September
      30, 2001                                         | 1,000,000     |   | 1,000      |   | 0                                      |  
|                                                                          |               |   |            |   |                                        |  
|Issuance of common
      stock for cash, December 6, 2001                 | 1,400,000     |   | 1,400      |   | 12,600                                 |  
|                                                                          |               |   |            |   |                                        |  
|Less net loss                                                             | 0             |   | 0          |   | 0                                      |  
|                                                                          | -----------   |   | ---------- |   | -------------                          |  
|Balance, December
      31, 2001                                          | 2,400,000     |   | 2,400      |   | 12,600                                 |  
|                                                                          |               |   |            |   |                                        |  
|                                                                          |               |   |            |   |                                        |  
|Issuance of common
      stock for cash, November 26 to December 16, 2002 | 208,500       |   | 208        |   | 20,642                                 |  
|                                                                          |               |   |            |   |                                        |  
|Less net loss                                                             | 0             |   | 0          |   | 0                                      |  
|                                                                          | -----------   |   | ---------- |   | -------------                          |  
|Balance, December
      31, 2002                                          | 2,608,500     | $ | 2,608      | $ | 33,242                                 | $
|                                                                          | =======       |   | =====      |   | =======                                |  
|                                                                          |               |   |            |   |                                        |  
|                                                                          |               |   |            |   |                                        |  
|                                                                          |               |   |            |   |                                        |  
|                                                                          |               |   |            |   |                                        |  
|                                                                          |               |   |            |   |                                        |  

























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



-4-



DYNASTY INTERNATIONAL
CORPORATION

(A DEVELOPMENTS TAGE
COMPANY)

STATEMENTS OF CASH FLOWS



|                                           |                                       |                                 |                                                 | Year ending
      December 31, 2002 | From Inception
      June 29, 2001 to Dec. 31, 2001 | From Inception,
      June 29, 2001 to Dec. 31, 2002
|------------------------------------------ | ------------------------------------- | ------------------------------- | ----------------------------------------------- | ----------------------------------- | --------------------------------------------------- | ----------------------------------------------------
|                                           |                                       | ---------------                 |                                                 | ---------------------               |                                                     | -----------------                                   
|CASH FLOWS
      PROVIDED BY OPERATING     |                                       |                                 |                                                 |                                     |                                                     |                                                     
|ACTIVITIES                                 |                                       |                                 |                                                 |                                     |                                                     |                                                     
|Net Loss                                   | $                                     | (43,348)                        | $                                               | (1,000)                             | $                                                   | (44,348)                                            
|Non-cash items
      included in net loss  |                                       | 0                               |                                                 | 0                                   |                                                     | 0                                                   
|Adjustments to
      reconcile net loss to |                                       |                                 |                                                 |                                     |                                                     |                                                     
|                                           | Cash used by
      operating activity |                                 | 0                                               |                                     | 0                                                   |                                                     
|                                           |                                       | Accounts payable
      increase |                                                 | 10,051                              |                                                     | 0                                                   
|                                           |                                       |                                 |                                                 |                                     | ---------------                                     |                                                     
|                                           |                                       |                                 | NET CASH PROVIDED
      BY OPERATING ACTIVITIES |                                     | (33,297)                                            |                                                     
|                                           |                                       |                                 |                                                 |                                     |                                                     |                                                     
|CASH FLOWS FROM
      INVESTING ACTIVITIES |                                       | 0                               |                                                 | 0                                   |                                                     | 0                                                   
|                                           |                                       |                                 |                                                 |                                     |                                                     |                                                     
|CASH FLOWS FROM
      FINANCING ACTIVITIES |                                       |                                 |                                                 |                                     |                                                     |                                                     
|                                           | Sale of common
      stock            |                                 | 208                                             |                                     | 2,400                                               |                                                     
|                                           | Paid-in capital                       |                                 | 20,642                                          |                                     | 12,600                                              |                                                     
|                                           |                                       |                                 |                                                 |                                     | ---------------                                     |                                                     
|                                           |                                       |                                 | NET CASH PROVIDED
      BY FINANCING ACTIVITIES |                                     | 20,850                                              |                                                     
|                                           |                                       |                                 |                                                 |                                     |                                                     |                                                     
|                                           |                                       |                                 | NET INCREASE IN
      CASH                      |                                     | (12,447)                                            |                                                     
|                                           |                                       |                                 |                                                 |                                     |                                                     |                                                     
|CASH BALANCE AT
      BEGINNING OF PERIOD  |                                       | 14,000                          |                                                 | 0                                   |                                                     |                                                     
|                                           |                                       |                                 |                                                 |                                     | ---------------                                     |                                                     
|CASH BALANCE AT
      END OF PERIOD        | $                                     | 1,553                           | $                                               | 14,000                              |                                                     |                                                     
|                                           |                                       |                                 |                                                 |                                     | ========                                            |                                                     





































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



-5-



DYNASTY INTERNATIONAL
CORPORATION

(A DEVELOPMENT STAGE
COMPANY)

NOTES TO THE FINANCIAL
STATEMENTS

DECEMBER 31, 2002 AND
DECEMBER 31, 2001



NOTE A SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES



> The Company was
>     incorporated on June 29, 2001 under the laws of the State of Nevada. The
>     business purpose of the Company is to retail water quality testing and
>     treatment products and systems.
>     
>     The Company will
>     adopt accounting policies and procedures based upon the nature of future
>     transactions.

NOTE B EARNINGS (LOSS)
PER SHARE



> Basic EPS is
>     determined using net income divided by the weighted average shares
>     outstanding during the period. Diluted EPS is computed by dividing net
>     income by the weighted average shares outstanding, assuming all dilutive
>     potential common shares were issued. Since the Company has no common shares
>     that are potentially issuable, such as stock options, convertible
>     securities, or warrants, basic and diluted EPS are the same.

NOTE C COMMON TOCK
ISSUES



> On August 8, 2001
>     the Company sold 1,000,000 shares of its common stock at $.001 per share for
>     $1,000. ON December 6, 2001 the Company sold 1,400,000 shares of its common
>     stock at $.01 per share for $14,000. All of the proceeds were to be used for
>     working capital.
>     
>     Between November 26
>     and December 16, 2002, the Company sold 208,500 shares of its common stock
>     at $.10 per share for a total of $20,850 cash. The proceeds were used for
>     working capital.

NOTE D GOING CONCERN



> The Company's
>     financial statements are prepared using generally accepted accounting
>     principles applicable to a going concern, which contemplates the realization
>     of assets and liquidation of liabilities in the normal course of business.
>     However, the Company has not generated any revenues from its planned
>     principal operations through December 31, 2002. Without realization of
>     additional capital, it would be unlikely for the Company to continue as a
>     going concern. The Company intends to sell an additional 600,000 shares of
>     its common stock for $60,000 in order to provide additional capital to begin
>     its principal operations.
>     
>     
>     -6-

Item 8. Changes in and
Disagreements with Accountants on Accounting and Financial Disclosures.



None. Not applicable.



PART III



Item 9. Directors,
Executive Officers, Promoters and Control Persons; Compliance with Section 16(a)
of the Exchange Act



Gerry Karpinka,
President, Member of the Board of Directors, age 50. Term of service
commenced June 29, 2001, effective for one year - renewable.



Mr. Karpinka graduated
from the University of Saskatchewan, in Saskatoon, Saskatchewan with a Bachelor
of Arts Degree in 1968 and again in 1969 with a Bachelor of Education Degree. In
1983 Mr. Karpinka graduated from Rollands College in Winter Park Florida with a
Masters of Education Administration Degree in Human Resource Management.



Mr. Karpinka has over 25
years experience in education administration. In 1972, he began his career with
the Elk Island Catholic School Division in Sherwood Park Alberta. He worked
there as a teacher and later as a Principal until his retirement in 1997.

In 1997 Mr. Karpinka
joined the University of Alberta in Edmonton as an Adjunct Associate Professor
in the Faculty of Education. In that capacity he was in charge of the Students'
Education Practicum. Mr. Karpinka held that position until 2000.



Since 2000, Mr.
Karpinka has been working part time with Concordia College in Edmonton where he
teaches English to students in the entry program and designs courses and sets
exams.



As President, Mr.
Karpinka has assumed the leadership role and accepted overall responsibility for
the development of the Company. Mr. Karpinka currently spends about five percent
(5%) of his working day doing Dynasty work. He will continue to make Dynasty a
primary priority and devote whatever time necessary to make the business a
success.



Colin Mills,
Secretary/Treasurer, Member of the Board of Directors, age 24. Term of
service commenced February 25, 2002, effective for one year - renewable.



Mr. Mills graduated from
high school in 1997. Mr. Mills first began working as a part-time dishwasher in
a large buffet restaurant when he was 15 years old. When he graduated high
school he began working full time as a cook at the same restaurant. In 1998 he
left the restaurant business and went to work as a car wash manager at a large
Shell service station. In 2000 he went back to the restaurant business as a cook
for Boston Pizza at their employee-training center in Richmond, British
Columbia. Within 3 months he was promoted to kitchen manager and within 6 months
he was made Assistant Store Manager. He left Boston Pizza in late 2001.



Although he has no
formal education, Mr. Mills has a very thorough understanding and extensive
hands-on experience with computers and the operation of the Internet.



In working with Dynasty,
Mr. Mills will be responsible for designing, creating and maintaining our
website. He will also be called upon to share his customer service skills and
retail management experience. Mr. Mills has agreed to provide whatever time is
necessary to complete our website and perform any other duties necessary to make
Dynasty a success. He is currently devoting fifty percent (50%) of his time on
Dynasty responsibilities; however, he expects that to grow to one hundred
percent (100%) over the next several months.



Thomas McMahon,
Member of the Board of Directors, age 59. Term of service commenced
February 25, 2002, effective for one year - renewable.



Mr. McMahon graduated
from High School in the late 1950's and has received no other formal
education.



After spending several
years on the Bennett Dam project at Hudson Hope British Columbia, Mr. McMahon
returned to Edmonton to manage Hawkin's Texaco. He was there for four years.



In 1970 Mr. McMahon
purchased a tow truck and started his own towing business, which he ran until he
sold it in 1984. He then opened his own gas bar business in Leduc Alberta. Mr.
McMahon continued to operate it until he sold the business and retired in March
of 2001. During the 18 years that he had this business, Mr. McMahon was
responsible for all aspects of the operation.

In July of 2001 Mr.
McMahon agreed to manage the opening of a new gas bar for Safeway in Leduc
Alberta.



Mr. McMahon is currently
devoting five percent (5%) of his working day to Dynasty responsibilities. He is
prepared to give Dynasty up to 25 percent (25%) of his time. He will take an
active role in managing our retail store and the day-to-day operations once the
store is open.



Item 10. Executive
Compensation.



Our Executive Officers
do not currently receive and are not accruing any compensation.



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



The following is a table
detailing the current shareholders of our stock who own 5% or more of the common
stock, and shares owned by our Directors and Officers, as of December 31, 2002:



|Title of
      Class | Name and Address
      of Beneficial Owner                                                                       | Amount and
      Nature of
      Beneficial
      Ownership | Percent
      of Class
|-------------------- | ---------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------- | ----------------------
|Common               | Gerry Karpinka
      Director,
      President
      101 Beauvista
      Drive, Sherwood Park AB, Canada T8A 3X2 | 1,400,000                                                   | 53.67%                
|Common               | Colin Mills
      Director, Sec/Tres
      9535 Stanley
      Street, Chilliwack B.C., Canada, V2P 3Y7           | 500,000                                                     | 19.17%                
|Common               | Thomas McMahon
      Director
      59 Nootka Road,
      Leduc, AB Canada, T9E 4J8                              | 500,000                                                     | 19.17%                
|Common               | Directors and
      officers as a group (3)                                                                      | 2,400,000                                                   | 92.0%                 



Item 12. Certain
Relationships and Related Transactions.



No persons who may, in
the future, be considered a promoter will receive or expect to receive assets,
services or other consideration from us. No assets will be or are expected to be
acquired from any promoter on behalf of our company. We have not entered into
any agreements that require disclosure to our shareholders.



Item 13. Exhibits and
Reports on Form 8-K



Exhibits



|Exhibit No. | Document                        | Location        
|----------- | ------------------------------- | ----------------
|3.1         | Articles of
      Incorporation | Previously Filed
|3.2         | Bylaws                          | Previously filed
|23          | Consent of Auditor              | Included        



Reports on Form 8-K



No reports on Form 8-K
have been filed during the last quarter of the year ended December 31, 2002.



Signatures



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



DYNASTY INTERNATIONAL
CORP.





/s/ Gerry Karpinka

Gerry Karpinka,
President

Dated: 04/14/03





In accordance with the
Exchange Act, this report has been signed below by the following persons on
behalf of the registrant and in the capacities and on the dates indicated.







Gerry Karpinka,
President, Director

Dated: 04/14/03





/s/ Colin Mills

Colin Mills,
Secretary/Treasurer, Director

Dated: April 14, 2003







Thomas McMahan

Thomas, McMahan,
Director

Dated: April 11, 2003