U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-KSB

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

            For the fiscal year ended December 31, 2001

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

Commission file number 0-31459

                                   VALESC INC.
                 (Name of small business issuer in its charter)


                               Delaware 23-3048857
                (State or other jurisdiction of (I.R.S. Employer
               incorporation or organization) Identification No.)


                   2300 Coit Road, Suite 300B, Plano, TX 75075
               (Address of principal executive offices) (Zip Code)

Issuer's Telephone Number: (972) 495-3900

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

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

         Common Stock                                           None
     par value $.0001 per share                        (Name of Exchange on
         (Title of Class)                                 which Registered)

         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



<PAGE>


         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. [ ]

         Registrant's revenues for the fiscal year ended December 31, 2001
totaled $259,492.

         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. (See definition of
affiliate in Rule 12b-2 of the Exchange Act.)
$-0- (no market currently exists)

         As of March 15, 2002, the registrant had 10,208,548 shares of common
stock outstanding.

                       DOCUMENTS INCORPORATED BY REFERENCE

         If the following documents are incorporated by reference, briefly
describe them and identify the part of the Form 10-KSB (e.g., Part I, Part II,
etc.) into which the document is incorporated: (1) any annual report to security
holders; (2) any proxy or information statement; and (3) any prospectus filed
pursuant to Rule 424(b) or (c) of the Securities Act of 1933 ("Securities Act").
The listed documents should be clearly described for identification purposes
(e.g., annual report to security holders for fiscal year ended December 24,
1990): None

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



<PAGE>



                                TABLE OF CONTENTS

                                                                        Page
                                     PART I

ITEM 1.           DESCRIPTION OF BUSINESS                                   1
ITEM 2.           DESCRIPTION OF PROPERTY                                   7
ITEM 3.           LEGAL PROCEEDINGS                                         7
ITEM 4.           SUBMISSION OF MATTERS TO A VOTE OF
                  SECURITY HOLDERS                                          7

                                     PART II

ITEM 5.           MARKET FOR COMMON EQUITY AND RELATED
                  STOCKHOLDER MATTERS                                       8
ITEM 6.           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                  CONDITION AND RESULTS OF OPERATIONS                      11
ITEM 7.           FINANCIAL STATEMENTS                               F-1 TO F-14
ITEM 8.           CHANGES IN AND DISAGREEMENTS WITH
                  ACCOUNTANTS ON ACCOUNTING AND
                  FINANCIAL DISCLOSURE                                     21

                                    PART III

ITEM 9.           DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS
                  AND CONTROL PERSONS; COMPLIANCE WITH
                  SECTION 16(a) OF THE EXCHANGE ACT                        22
ITEM 10.          EXECUTIVE COMPENSATION                                   26
ITEM 11.          SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
                  OWNERS AND MANAGEMENT                                    29
ITEM 12.          CERTAIN RELATIONSHIPS AND RELATED
                  TRANSACTIONS                                             29
ITEM 13.          EXHIBITS AND REPORTS ON FORM 8-K                         31
EXHIBIT INDEX                                                              33


<PAGE>



This Annual Report on Form 10-KSB, including all documents incorporated by
reference, includes "forward-looking" statements within the meaning of Section
27A of the Securities Act and Section 21E of the Exchange Act and the Private
Securities Litigation Reform Act of 1995, and we desire to take advantage of the
"safe harbor" provisions thereof. Therefore, we are including this statement for
the express purpose of availing ourselves of the protections of such safe harbor
with respect to all of such forward- looking statements. The forward-looking
statements in this Report reflect our current views with respect to future
events and financial performance. These forward-looking statements are subject
to certain risks and uncertainties, including specifically our history of
losses, doubt about our ability to continue as a "going concern", our dependence
on relationships with a limited number of suppliers, our difficultly attracting
experienced salespersons, changing technology in the markets for our products,
potential product liability claims against us, changes in laws and regulations
affecting the healthcare industry, our limited geographical area, inability to
compete successfully, our dependence on key personnel, our dependence on
financing, inability to draw funds under our Investment Agreement, lack of a
trading market for our stock, control of the Company by one shareholder,
dilution of shares due to our Investment Agreement, dilution of shares due to
outstanding options and warrants, non-payment of dividends, penalties payable
under our Investment Agreement, and those other risks and uncertainties
discussed herein, that could cause actual results to differ materially from
historical results or those anticipated. In this report, the words
"anticipates," "believes," "expects," "intends," "future" and similar
expressions identify certain of the forward-looking statements. Readers are
cautioned not to place undue reliance on the forward-looking statements
contained herein, which speak only as of the date hereof. We undertake no
obligation to publicly revise these forward-looking statements to reflect events
or circumstances that may arise after the date hereof. All subsequent written
and oral forward-looking statements attributable to us or persons acting on our
behalf are expressly qualified in their entirety by this section.

                                     PART I

Item 1.  DESCRIPTION OF BUSINESS

HISTORICAL BACKGROUND

Valesc Inc. ("Valesc", the "Company", "us" or "we") was incorporated on June 2,
2000 in the State of Delaware under the name NetCentral Capital Fund, Inc. We
were formed as a development stage company for the specific purpose of becoming
a reporting company with a class of registered securities to enable us to be in
a better position to seek suitable acquisitions. On September 5, 2000, we filed
a Form 10-SB General Form for Registration of Securities of Small Business
Issuers. We had no operations prior to the acquisition of OJI Surgical, Inc.,
and we are not yet cleared by the National Association of Securities Dealers,
Inc. for an unpriced quotation in the over-the-counter Bulletin Board. Upon
effectiveness of our registration statement, Amendment No. 2 of which was filed
on March 25, 2002, we intend to apply for such a clearance so that there is a
basis for a meaningful market to permit trading in registered shares issued to
consultants and investors, and to facilitate the future resale of shares under
our Investment Agreement with Swartz Private Equity, LLC ("Swartz"). William Tay
was the sole director, officer and shareholder of NetCentral.






                                      -1-
<PAGE>


On March 22, 2001 we acquired Valesc Inc., a New Jersey corporation ("Valesc
NJ") for 8,964,008 shares of common stock, which we exchanged on a 1-for-1 basis
with Valesc NJ stock. In anticipation of the acquisition, we executed a
1-for-18.04 reverse stock split that left us with 277,237 shares outstanding,
and Valesc NJ executed a 2-for-1 stock split. As a result of the merger, Atlas
Holdings Inc. ("Atlas"), the controlling shareholder of Valesc NJ, now owns
8,458,008 or 82.8% of our common stock. Atlas is owned 50% by Jeremy Kraus, our
Chairman and Chief Executive Officer, 12.5% by Garrett Miller, our Vice
President and Director, and 25% by Samuel Cohen, our President and Director.

In connection with a simultaneous change of management upon consummation of the
merger, we changed our name to Valesc Inc. The basis for our name is the Latin
word VALESCO which means to grow strong.

On March 22, 2001, William Tay resigned as an officer and director. Our new
officers and directors are Jeremy Kraus, Samuel Cohen and Garrett Miller.

On December 17, 2001, we acquired 100% of the capital stock of OJI Surgical,
Inc., an Oregon corporation ("OJI"), from SMT Enterprises Corporation ("SMT"),
in exchange for 266,000 shares of our common stock. OJI has been in business
since 1988 and is now a wholly-owned subsidiary of Valesc. The purchase price
was determined based upon a multiple of OJI's previous years' gross profits.

OJI is operated by Harry Kraus, who serves as the sole director and President.
Harry Kraus is the uncle of Jeremy Kraus, our Chief Executive Officer and
director, and is also the owner of 31% of the outstanding capital stock of SMT.

Two of our executive officers, Jeremy Kraus and Samuel Cohen, who are also
shareholders and serve as directors, are shareholders and serve as directors of
SMT. Jeremy Kraus, Samuel Cohen and Garrett Miller, our director and Vice
President, own 8.5%, 4.25% and 2.12% respectively, of the outstanding capital
stock of SMT through Atlas. As interested directors, Mr. Kraus and Mr. Cohen
abstained from voting to authorize the acquisition of OJI on behalf of us and
SMT.




                                      -2-
<PAGE>



Edward Kraus, the President of SMT and a director and owner of 13.6% of the
outstanding capital stock of SMT, is the father of Jeremy Kraus, our Chief
Executive Officer and director. Robert Kraus, a director of SMT and owner of 25%
of the outstanding capital stock of SMT, is the uncle of Jeremy Kraus, our Chief
Executive Officer and director.

BUSINESS

We are a sales organization representing manufacturers of orthopedic care and
surgical products. These products include scopes, burrs, saws, cutters,
replacement joints, braces and other implements used in orthopedic surgeries and
post-surgical care and rehabilitation. Generally, our products are sold directly
to either the surgical practice performing the procedure or the affiliated
hospital or surgery center where the procedure is performed. We do not
manufacture any of the products we sell, but earn revenues either through
commission agreements with the manufacturers we represent, or through the
distribution of products. Our products currently include a variety of implements
and tools utilized during surgical procedures, as well as artificial joints and
other implants. We represent several different manufacturers who do not compete
with one another under exclusive contracts covering defined territories
generally within the northwest United States, some of which have been in place
for as long as 11 years. Manufacturers generally pay us a fixed commission
ranging from 12% to 25% of the sales price of goods sold.

We do not carry any inventory and do not take ownership of the products we sell.
Some of the products we sell are shipped directly to customers by the
manufacturer. In this case our role is solely as a sales representative and we
do not take part in the physical distribution of the product. In cases where we
are responsible for physical distribution, we do not take ownership of the
product or hold it in inventory, but merely accept delivery from the
manufacturer and then make local delivery of the product to the customer. In
these cases we serve as both a sales representative and as a logistical conduit
for the products, with responsibility for the proper handling and short-term
storage. We do not generally receive additional compensation for these
additional services.

Most of our representation agreements have a one-year term and are automatically
renewable, although the agreements may be canceled by either party without cause
upon prior notice. Two of our sales representation agreements with Smith &
Nephew, which is one of our primary suppliers, were entered into by Harry Kraus
personally rather than by OJI. Furthermore, these agreements contain provisions
that could be deemed to result in a technical default upon the transfer of OJI's
shares to Valesc in the acquisition. Although these agreements are terminable at
will, upon notice, by either party, we are in the process of seeking a waiver of
any technical defaults from Smith & Nephew and the consent of Smith & Nephew for
the assignment of these agreements to OJI. We do not expect any impairment of
our relationship with Smith & Nephew as a result of the foregoing or any
material changes to the agreements. Previously, we also served as distributors
of certain orthopedic products, whereby we earned revenues on the sale of
products. We took ownership of such products but generally did not carry
inventories.


                                      -3-
<PAGE>





Sales of products from our primary suppliers, Acumed, Inc. and Smith & Nephew,
provided approximately 55% and 24%, respectively, of our total revenue for the
year ended December 31, 2001.

During the next twelve to eighteen months, we intend to devote our time and
resources to the growth of our medical device sales business. We currently sell
a variety of medical products, including replacement joints and surgical
implements and tools, for use in the orthopedic care and surgical area. We
intend to expand our sales of these products in three ways: (i) increased
penetration in market areas already covered, (ii) the addition of sales
personnel to expand our geographic coverage and (iii) the addition of new
product lines. In the initial phase of our expansion plan over the next six to
twelve months, we hope to increase our market penetration in areas already
serviced by the company and to add new sales personnel to expand our geographic
coverage. In the second phase of our expansion plan over the period twelve to
eighteen months from now, we will be focusing on the addition of new product
lines.

For our expansion to be successful, we will need to greatly expand our
administrative capabilities and our sales force. We intend to invest
approximately $100,000 in the purchase, customization and installation of
accounting and back-office software to enable us to manage a larger number of
transactions, customers and suppliers without substantially increasing our
administrative staff. Selection, set-up and implementation of this back-office
software is expected to take between six to nine months, and we will need to
hire at least one additional employee to perform administrative tasks. We expect
these requirements to add approximately $5,000 to our monthly general and
administrative costs. We will also need to rent office space sufficient to house
our expanded personnel and back office system.

We also expect to incur significant expenses for hiring additional sales people.
In addition to normal hiring costs, manufacturers' representatives like us
generally "sponsor" new sales people for a period of up to one year during which
the company subsidizes the employee's wages until they have built a sufficient
customer base to support themselves solely on a commission basis. During this
sponsorship period, new salespeople are often paid a base salary of $4,000 per
month, leading to a total employee cost of approximately $7,000 per month
including salary, payroll taxes, benefits and increased general and
administrative costs associated with travel and office equipment. We expect to
hire two additional salespeople during this expansion plan, each of whom will
likely need to be fully sponsored for an average period of six months. This will
result in a potential expenditure of approximately $85,000 associated with the
expansion of our sales force, along with additional costs that we cannot predict
at this time. These expenditures will represent a substantial increase over our
current costs.


                                      -4-
<PAGE>


We will need significant new financing in order to fund our expansion plan. The
total expenses of our expansion plan as outlined above will approach $250,000
during the next twelve months. Although we expect additional costs to be offset
by increased revenues, we cannot be certain whether increases in revenues will
occur and whether any such increases will offset costs. We expect to derive
substantially all of the funds necessary for the expansion plan from the sale of
stock to Swartz under our Investment Agreement. See "Item 6 - $20 MILLION EQUITY
LINE INVESTMENT AGREEMENT." In addition, we may seek additional private
financings similar in structure to those we completed in the last year.

We need to complete our expansion plan and achieve a substantial increase in
revenues in order to become profitable. In the event we are unable to secure
financing for the expansion plan, or if it is ineffective once completed, we
will likely be unable to continue as a going concern.

COMPETITION

The sale of medical products retailing for less than $10,000 is currently
dominated by the sales organizations of Fortune 500 and other very large
companies. There are also numerous small, independent manufacturers'
representatives, such as Valesc, who are engaged in this business. Most of the
companies presently engaged in this business are better financed and have a
longer operating history than we do. Even if we are successful in our expansion
plans, we would still have an insignificant market share of medical products
retailing for less than $10,000.

Competition within our industry is based largely on product selection and
service level. Companies with a greater variety of products to sell generally
possess an advantage over companies with more limited catalogues. Customers also
expect a very high level of service, especially in connection with scheduling
and delivering products, and training for the use of new products.

As a small company, we are currently unable to offer a product selection on a
competitive level. While our service level is comparable to that of our
competitors, we cannot expand our product offerings due largely to the
limitations of having only a single salesperson. We also face competition on the
supply side due to the short-term nature of our representation agreements with
manufacturers. Manufacturers look for companies capable of providing the highest
sales and service levels, which reinforces the competitive nature of the demand
side and puts small companies such as ours at a further competitive
disadvantage. Our expansion plan seeks to address these competitive
disadvantages.





                                      -5-
<PAGE>



EMPLOYEES

We have four full-time employees, three of whom are also our officers and
directors. The fourth is Harry Kraus, President of our OJI operating subsidiary
and the uncle of our Chief Executive Officer.

GOVERNMENT REGULATION

The healthcare industry is affected by extensive government regulation at the
Federal and state levels. In addition, through the Medicare, Medicaid and other
programs the Federal and state governments are responsible for the payment of a
substantial portion of healthcare expenditures. Changes in regulations and
healthcare policy occur frequently and may impact the current results of the
growth potential for and the profitability of products sold by the Company.
Although we are not a direct provider under Medicare and Medicaid, many of our
customers are providers under these programs and depend upon Medicare and/or
Medicaid reimbursement for a portion of their revenue. Changes in Medicare and
Medicaid regulations may adversely impact our revenues and collections
indirectly by reducing the reimbursement rate received by our customers and
consequently placing downward pressure on prices we charge for our products.

In certain cases, the ability of our customers to pay for the products we
distribute depends on governmental and private insurer reimbursement policies.
Consequently, those policies have an impact on the level of our sales.
Continuing governmental and private third-party payor cost-cutting efforts have
led and may continue to lead to significant reductions in the reimbursement
levels. Furthermore, governmental reimbursement programs, such as the Medicare
and Medicaid programs, are subject to substantial regulation by Federal and
state governments, which are continually reviewing and revising the programs and
their regulations. There can be no assurance that changes to governmental
reimbursement programs will not have a material adverse effect on the Company.

The Federal Food, Drug and Cosmetic Act and regulations issued or proposed
thereunder provide for regulation by the Food and Drug Administration ("FDA") of
the marketing, manufacturing, labeling, packaging and distribution of medical
devices and drugs, including the products we distribute. The majority of our
products constitute Class II products under FDA regulations, which must be
appropriately labeled and packaged by the manufacturers. As a distributor of
such products, we are subject to unscheduled FDA inspections of our facilities
from time to time to determine compliance with FDA regulations.



                                      -6-
<PAGE>


We are also subject to the Safe Medical Devices Act of 1990, which imposes
certain reporting requirements on distributors in the event of an incident
involving serious illness, injury or death caused by a medical device.

Item 2.  DESCRIPTION OF PROPERTY

Apart from our OJI subsidiary, we do not own or rent any significant physical
properties and are currently utilizing, at no cost, office space from our Chief
Executive Officer. Following effectiveness of our registration statement, we
will then seek an office for our headquarters. No decision has been made at this
time as to where our headquarters will be located.

Item 3.  LEGAL PROCEEDINGS

We are currently not a party to any material pending legal proceeding, nor do we
know of any proceeding that any governmental authority or anyone else may be
contemplating against us. One of the shareholders of a predecessor to Atlas, our
controlling shareholder, filed a suit against its predecessor seeking more
shares which, if successful, would have made him an owner of more than 10% of
Atlas' stock. That case was dismissed on July 20, 2000 for failure to prosecute.
Atlas has advised us that it believes this suit against its predecessor was
without merit and that there are valid and meritorious defenses to such claims
if the suit is refiled.

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

None.





                                      -7-
<PAGE>


                                     PART II

Item 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

There is currently no public market for our stock. Our common stock is subject
to penny stock regulation which may affect its liquidity. The common stock is
subject to the regulations of the SEC relating to the market for penny stocks.
Penny stock, as defined by the Penny Stock Reform Act, is any equity security
not traded on a national securities exchange or not quoted on the Nasdaq
National or Small Cap Market that has a current price of less than $5.00 per
share. The penny stock regulations generally require that a disclosure schedule
explaining the penny stock market and risks associated therewith be delivered to
purchasers of penny stocks and impose various sales practice requirements on
broker-dealers who sell penny stocks to persons other than established customers
and accredited investors. The broker-dealer must make a suitability
determination for each purchaser and receive the purchaser's written agreement
prior to the sale. In addition, the broker-dealer must make certain mandated
disclosures, including the actual sale or purchase price and actual bid/offer
quotations, as well as the compensation to be received by the broker-dealer and
certain associated persons. The regulations applicable to penny stocks may
severely affect the market liquidity for our Common Stock and could limit your
ability to sell our stock in the secondary market.

As of March 15, 2002, there was one class of common equity held by 40 holders of
record, including those held in street name.

DIVIDENDS

No dividends have been declared to date. There are no restrictions which affect
or are likely to affect our ability to pay dividends in the future. However, we
do not expect to pay dividends in the foreseeable future.

OPTIONS, WARRANTS AND RESTRICTED SECURITIES

The exercise of outstanding options and warrants may adversely affect our stock
price and the percentage ownership of our shareholders. As of March 15, 2002,
there were outstanding warrants and options to purchase 1,784,000 shares of our
common stock, including the Commitment Warrants to purchase 780,000 shares that
were issued to Swartz under the Investment Agreement. In addition, we have
granted options to our executives exercisable over the next three years for up
to 900,000 shares. See "Item 10-- EMPLOYMENT AND RELATED AGREEMENTS." The
exercise of stock options and warrants that are presently outstanding or may be
issued in the future will dilute the percentage ownership of our other
stockholders.

We have issued "restricted securities" to investors that may be eligible for
resale pursuant to Rule 144 under the Securities Act in the future, subject to
expiration of the restricted period prescribed by Rule 144. As of March 15,
2002, these restricted securities in the aggregate represent 8.4% of our
outstanding common stock and may be eligible for resale under Rule 144 during
the months and in the amounts specified below:

                  DATE AVAILABLE                         NUMBER OF SHARES
                  FOR RESALE

                  September 2002                              15,000
                  October 2002                                75,000
                  December 2002                               266,000
                  January 2003                                500,000
                                                              -------
                                            Total             856,000



                                      -8-
<PAGE>


RECENT SALES OF UNREGISTERED SECURITIES

In connection with our formation on June 2, 2000, we issued a total of 5,000,000
unregistered shares of common stock to DotCom Internet Ventures Ltd. for
services rendered by DotCom Internet Ventures to us, which amount was split on a
277,237 for 5,000,000 basis in March 2001. William Tay, our sole officer,
director and shareholder from the time of formation until the March 22, 2001
merger, was the sole director, controlling shareholder and president of DotCom
Internet Ventures. We relied upon Section 4(2) of the Securities Act of 1933, as
amended, and Rule 506 promulgated thereunder for this transaction.

In connection with loans provided to us during the period from March 22, 2001
through August 2001, we issued warrants to the investors and on the terms listed
below. Each such transaction was accomplished in reliance upon Section 4(2) of
the Securities Act. The facts relied upon for exemption are that each of the
warrant investors was an accredited investor.

<TABLE>
<CAPTION>


Name of Selling      Maximum No. of    Exercise      Loan Amount    Interest    Date of
Stockholder          Shares Issuable   Price Per                    Rate        Loan
                     under Warrant      Share
----------------     -------------     -------     ------------   ---------   --------

<S>                      <C>             <C>         <C>              <C>     <C>
Dean Vilone              25,000          $ .01       $ 10,000         14%     August 13, 2001
Paul Dorsey              14,000          $ .01       $  5,000         14%     August 13, 2001
Harry Kraus(2)(4)        25,000          $ .01       $ 10,000         14%     July 26, 2001
Edward Kraus(1)(4)      100,000          $ .10       $ 23,000         14%     March 23, 2001
Milton and
Golda
Toorans (3)              50,000          $ .01       $ 20,000         14%     April 20, 2001
Wetlands
Mitigation
Services, LLC            15,000          $ .25       $  5,000         10%     March 23, 2001
Christopher
Coons                   200,000          $ .01       $100,000         14%     June 19, 2001
                        -------                     ---------
                        429,000                      $173,000

<FN>

-----------
(1)  Edward Kraus is the father of Jeremy Kraus, our Chairman and Chief
     Executive Officer.
(2)  Harry Kraus, the President of OJI, is the uncle of Jeremy Kraus.
(3)  Milton and Golda Toorans are the grandparents of Jeremy Kraus.
(4)  Harry Kraus and Edward Kraus own 31% and 13.6%, respectively, of SMT, which
     in turn owns 266,000 shares, or 2.7%, of our common stock.
</FN>
</TABLE>



                                      -9-
<PAGE>



In connection with investments in us and the exchange of Valesc NJ shares in
connection with the merger, we issued unregistered shares of common stock to
investors as set forth below. Each such sale or exchange was accomplished in
reliance upon Section 4(2) of the Securities Act. The facts relied upon for
exemption are that each of the investors was an accredited investor.

NAME OF INVESTOR             NUMBER OF    PRICE PER       DATE OF PURCHASE
                               SHARES       SHARE           OR ACQUISITION

Andrewson, Katherine          5,000         $.25            March 22, 2001
Cipollone, Peter             20,000         $.25            March 22, 2001
Colgan, Sean                 20,000         $.25            March 22, 2001
Cuffner, Monica              20,000         $.25            March 22, 2001
Deutsch, Karin                8,000         $.25            March 22, 2001
Holk, Timothy (3)            20,000         $.25            March 22, 2001
Ingle, R. Edward             40,000         $.25            March 22, 2001
Jaccarino, Michael            3,000         $.25            March 22, 2001
Kaehler, Robert              10,000         $.25            March 22, 2001
Klepacki, Jeffrey (3)        40,000         $.25            March 22, 2001
Loomis, Deborah              20,000         $.25            March 22, 2001
Mehling, Andrea              20,000         $.25            March 22, 2001
Miller, Gary and Diane (1)   40,000         $.25            March 22, 2001
Miller, Scott (2)            10,000         $.25            March 22, 2001
Nuzum, Henry                  3,000         $.33            June 8, 2001
Otto, William                30,000         $.33            March 22, 2001
Read, Joan                   20,000         $.25            March 22, 2001
Reid, Archibald              30,000         $.33            March 22, 2001
Saliba, Anis                 20,000         $.25            March 22, 2001
Shannon, Phillip             30,303         $.33            April 24, 2001
Strawley, Jennifer            5,000         $.25            March 22, 2001
Torgerson, Ryan              15,000         $.33            March 22, 2001
Weise, Linda                 40,000         $.25            March 22, 2001
Welsh, Thomas                20,000         $.25            March 22, 2001
Whittaker, Richard           40,000         $.25            March 22, 2001
Zador, William and Marlene   10,000         $.25            March 22, 2001
                             ------
                  Total     539,303
-------------
(1) Gary and Diane Miller are the parents of Garrett Miller, our Vice President.
(2) Scott Miller is the brother of Garrett Miller.
(3) Affiliate of a registered broker-dealer.

On March 22, 2001, we issued 8,458,008 shares of common stock to Atlas pursuant
to a Merger Agreement dated March 2, 2001 between Valesc NJ and NetCentral. The
sale was accomplished in reliance upon Section 4(2) of the Securities Act. The
facts relied upon for exemption are that Atlas was an accredited investor.
Jeremy Kraus, our Chairman and Chief Executive Officer, Samuel Cohen, our
President, and Garrett Miller, our Vice President, own 50%, 25% and 12.5%,
respectively, of Atlas.

On December 17, 2001, we issued 266,000 shares of common stock to SMT pursuant
to a Share Purchase Agreement dated December 3, 2001 between us, SMT and OJI.
The sale was accomplished in reliance upon Section 4(2) of the Securities Act.
The facts relied upon for exemption are that SMT was an accredited investor.
Jeremy Kraus, our Chairman and Chief Executive Officer, Samuel Cohen, our
President, and Garrett Miller, our Vice President, own 8.5%, 4.25% and 2.12%,
respectively, of SMT through Atlas.

On September 17, 2001, we sold 15,000 shares of our common stock to Virginia
Linde at $.33 per share. The sale was accomplished in reliance upon Section 4(2)
of the Securities Act. The facts relied upon for exemption are that Ms. Linde
was an accredited investor.



                                      -10-
<PAGE>



On October 24, 2001, we sold 75,000 shares of our common stock to Carpenter
Dewey at $.33 per share. The sale was accomplished in reliance upon Section 4(2)
of the Securities Act. The facts relied upon for exemption are that Mr. Dewey
was an accredited investor.

On October 3, 2001, Harry Kraus loaned us $25,000 pursuant to a Debenture and
Warrant Purchase Agreement with an interest rate of 14%. The agreement provides
warrants for the purchase of up to 25,000 shares of common stock at $.33 per
share, exercisable until October 3, 2003. The sale was accomplished in reliance
upon Section 4(2) of the Securities Act. The facts relied upon for exemption are
that Mr. Kraus was an accredited investor.

On January 1, 2002, we issued options for the purchase of 50,000 shares of our
common stock to Hecht & Associates, P.C. The options are exercisable until
January 1, 2007. One half of the options vest upon the filing of Amendment No. 2
to our registration statement, filed on March 25, 2002, and the remaining one
half vest 10 days after the date on which our shares begin trading. The options
are exercisable at $.333 per share, subject to downward adjustment based upon
the average trading price for the 10 days after the date on which our shares
begin trading. The issuance of the options was accomplished in reliance upon
Section 4(2) of the Securities Act. The facts relied upon for exemption are that
Hecht & Associates, P.C. was an accredited investor.

On January 28, 2002, we sold 500,000 shares of our common stock to Century Goal
Holdings Ltd. for $150,000, or $.30 per share, with options for the purchase of
500,000 additional shares. The options are not exercisable until six months
after our registration statement is declared effective and expire on February 1,
2005. The options are exercisable at a price equal to 70% of the average closing
price of our common stock in the ten trading days prior to the exercise date.
The sale of the shares and options was accomplished in reliance upon Section
4(2) of the Securities Act. The facts relied upon for exemption are that Century
Goal Holdings Ltd. is an accredited investor.

Item 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
         RESULTS OF OPERATIONS
         ----------------------------------------------------------------

We acquired OJI on December 17, 2001. Prior to the acquisition, we were not yet
an operating company and therefore had financial performance driven by our
expenses associated with becoming operational and completing the acquisition.
OJI was an operating company for more than 10 years prior to the acquisition.
Included in this annual report are financial statements for us and, in the notes
thereto, certain pro forma information giving effect to the acquisition.



                                      -11-
<PAGE>


COMBINED OPERATING RESULTS OF THE REGISTRANT

The following table sets forth certain summarized statement of operations data
for OJI with the results of Valesc Inc.'s operations since the merger date
(December 17, 2001).

                                                Year Ended December 31,
                                               -----------------------
                                              2000                   2001
                                              ----                   ----
        Revenues                            $480,690               $259,492
        Cost of Revenue                       99,315                 11,939
                                            --------               --------
        Gross Profit                         381,375                247,553
        Selling, general and
           administrative expenses           386,890                289,478
        Operating Loss                        (5,515)               (41,925)
        Interest Expense                       1,918                  4,814
        Income Tax Expense                     1,352                    235
                                            --------               --------
        Net Loss                            $ (8,785)              $(46,974)
                                            ========               ========

REVENUE

OJI's revenues declined from $480,960 for the year ended December 31, 2000 to
$259,492 for the current period. This decline resulted primarily from OJI's
decision to cease providing complementary reconditioning and repair service for
its products and the products of its competitors. These services became less
attractive to OJI because of increased competition that resulted in an
increasing administrative burden associated with processing transactions for a
broader range of products. OJI may re-enter this complementary service offering
in the future, but currently has no plans to do so. OJI did not separately track
revenues and costs relating to this service offering to its customers.

GROSS PROFIT

OJI's gross profit declined from $381,375 for the year ended December 31, 2000
to $247,553 for the current period, a decline of 35%. This decrease resulted
primarily from the greater profitability of the manufacturer's representation
area of OJI's business (primarily a net commission revenue) offset by lost
revenues associated with its repair and reconditioning business.



                                      -12-
<PAGE>


OPERATING EXPENSES

OJI's operating expenses decreased from $386,890 for the year ended December 31,
2000 to $289,478 for the current period, primarily as a result of a reduction in
staff selling OJI's representative products and administrative support costs
associated with increased personnel.

NET INCOME (LOSS)

OJI reported a net loss of ($8,785) for the year ended December 31, 2000 as
compared to net loss of ($46,974) for the current period, primarily as a result
of the inclusion of Valesc Inc.'s net losses in the current period.

OPERATING RESULTS OF VALESC INC.

The following table sets forth certain statement of operations data for Valesc
for the period from inception (October 24, 2000) to December 31, 2000 and for
the year ended December 31, 2001.

                            Period from inception
                            (October 24, 2000) to           Year Ended
                              December 31, 2000          December 31, 2001
                              -----------------          -----------------

      Revenue                    $   --                        $ --

      Operating Expenses         193,500                    $1,023,848
      Interest Expense               --                         60,147
                               ---------                   -----------
      Net Loss                 $(193,500)                  $(1,083,995)
                               =========                   ===========

OPERATING EXPENSES

Our operating expenses increased to $1,023,848 for the year ended December 31,
2001 from $193,500 during the prior period. This increase is primarily a result
of (i) travel and associated costs related to identifying an acquisition target,
(ii) costs and fees related to the preparation of our registration statement,
(iii) costs related to the acquisition of Valesc NJ, and (iv) costs and fees
associated with the acquisition of OJI.



                                      -13-
<PAGE>


NET LOSS

Our net loss increased to ($1,083,995) for the year ended December 31, 2001 from
($193,500) for the prior period, as a result of the increase in our operating
expenses, and interest costs of our debt.

SIGNIFICANT COMMITMENTS OF THE COMBINED ENTITY

We have no significant financial commitments beyond customary payables and
employment contracts. $84,008 of our debt is categorized as short-term as of
December 31, 2001, however, it is expected that we will be required to extend
the maturity dates. Our potential financial obligation to Swartz resulting from
the non-usage provisions of our Investment Agreement will not result in a
liability, if at all, until at least two years from the date of effectiveness of
our registration statement.

CRITICAL ACCOUNTING POLICIES

REVENUE RECOGNITION

In December 1999, the staff of the Securities and Exchange Commission issued
Staff Accounting Bulletin 101, "Revenue Recognition," to provide guidance on the
recognition, presentation, and disclosure of revenue in financial statements.
The Company's policies on revenue recognition are consistent with this bulletin.

Commission income as a manufacturers' representative on new product sales are
recorded in the period during which the underlying product sale occurs.

OJI's revenues from product sales and service income are derived from the sale
of new products distributed by the Company, and the refurbishment of used
products. Revenue is recognized as products are delivered to its customers. As
of the end of 2001, the Company was not distributing any new or refurbished
products.

STOCK-BASED COMPENSATION

As permitted by the Statement of Financial Accounting Standards No. 123 (SFAS
No. 123), Accounting for Stock-Based Compensation, the Company accounts for
stock-based employee compensation arrangements in accordance with provisions of
Accounting Principles Board (APB) Opinion No. 25, "Accounting for Stock Issued
to Employees." Compensation expense for stock options issued to employees is
based on the difference, on the date of grant, between the fair value of the
Company's stock and the exercise price of the option. The Company accounts for
equity instruments issued to nonemployees in accordance with the provisions of
SFAS No. 123 and Emerging Issues Task Force (EITF) Issue No. 96-18, "Accounting
for Equity Instruments That Are Issued to Other Than Employees for Acquiring, or
in Conjunction With Selling, or in Conjunction With Selling, Goods or Services."
All transactions in which goods or services are the consideration received for
the issuance of equity instruments are accounted for based on the fair value of
the consideration received or the fair value of the equity instrument issued,
whichever is more reliably measurable. The measurement date of the fair value of
the equity instrument issued is the date on which the counterparty's performance
is complete.


                                      -14-
<PAGE>





LIQUIDITY AND CAPITAL RESOURCES OF THE COMBINED ENTITY

As of December 31, 2001, we had cash and cash equivalents of $26,311, negative
working capital of ($722,127) and a stockholder's equity (deficit) of
($715,235). We have no credit or financing facility in place at the present
time. Valesc Inc. received approximately $310,000 during the year ended December
31, 2001 from debt and equity financings. Cash used in operating activities of
Valesc Inc. was approximately $304,000 during the period ended December 31,
2001.

The consolidated financial statements indicate that the profitability and
operating contribution of OJI have not been sufficient to offset the
developmental and expansion expenses reflected in the Valesc financial
statements. Until we can significantly expand the business of OJI through the
methods described in "Item 1 -- BUSINESS OF THE COMPANY -- BUSINESS," we will be
unlikely to achieve profitability.

As a result of our lack of profitability, our accountants, in their report on
the our financial statements for the period ended December 31, 2001, included an
explanatory paragraph indicating there is substantial doubt about our ability to
continue as a going concern. The time and money required before we can complete
our expansion plan and implement our growth strategy cannot be estimated with
precision. We expect significant expenditures associated with entering into the
expansion plan, including the cost of hiring and "sponsoring" new salespeople
and the cost of the upgraded software and administrative infrastructure
necessary to manage them, as well as travel and other expenses associated with
acquiring new product lines and territories.

Our anticipated cash requirements for the next twelve months are approximately
$550,000, which includes $250,000 to fund the expansion plan and an expected
cash-flow deficit from regular operations of $300,000. Because we do not expect
the expansion plan to begin contributing significantly to revenue during the
next twelve months, we anticipate a negative cash-flow from regular operations
similar to the previous year.

The Company has commitments under employment agreements with each of its three
executive officers. Additionally, the Company has lease commitments totaling
approximately $32,000 through March 31, 2005.



                                      -15-
<PAGE>


$20 MILLION EQUITY LINE INVESTMENT AGREEMENT

OVERVIEW

On June 7, 2001, we entered into the Investment Agreement with Swartz, which was
amended and restated as of August 29, 2001 and September 26, 2001. The
Investment Agreement entitles us to sell up to $20 million of our common stock
to Swartz, subject to a formula based on our stock price and trading volume,
from time to time over a three year period following the effective date of our
registration statement, Amendment No. 2 of which was filed on March 25, 2002. We
refer to each sale of stock to Swartz as a "Put."

In addition, as consideration for making its financing commitment to us, Swartz
was also issued Commitment Warrants to purchase 780,000 shares of common stock.

PUT RIGHTS

We may begin exercising Puts on the date of effectiveness of our registration
statement on Form SB-2, Amendment No. 2 of which was filed on March 25, 2002,
and continue for three years or until we have Put the maximum of $20 million. To
exercise a Put, we must have an effective registration statement on file with
the SEC covering the resales to the public by Swartz. Also, we must give Swartz
at least 10, but not more than 20, business days advance notice of the date on
which we intend to exercise a particular Put. The Put Notice must indicate the
date we intend to exercise the Put and the maximum number of shares of common
stock we intend to sell to Swartz. We may also specify a maximum dollar amount
(not to exceed $2 million) of common stock that we will sell under the Put.

The number of shares in any Put may not exceed the lesser of:

(i)     the maximum put amount set forth in a Put Notice to Swartz;
(ii)    1,500,000 shares of our common stock;
(iii)   $2 million worth of our common stock;
(iv)    15% of the aggregate daily reported trading volume of our common stock
        during the 20 day Pricing Period, excluding (a) block trades of 20,000
        or more shares and (b) any days where the stock trades below a minimum
        price calculated based on the price we specify in our Put Notice, if we
        specify a minimum price (this is referred to as the "volume limitation"
        and is more fully described below);
(v)     a number of shares that, when added to the number of shares already sold
        to Swartz during the preceding 61 days, would exceed 9.9% of our total
        shares outstanding (as calculated under Section 13(d) of the Securities
        Exchange Act of 1934, as amended); and
(vi)    15% of the aggregate daily reported trading volume of our common stock,
        excluding block trades of 20,000 or more shares, during the 20 business
        days immediately preceding a Put Notice to Swartz.






                                      -16-
<PAGE>





Swartz will pay us a percentage of the Market Price (the average of the two
lowest volume weighted average prices of our common stock, as reported by
Bloomberg, Inc., during the Pricing Period) for each share in a Put as follows.
For each share of common stock, Swartz will pay us the lesser of:

--   the Market Price for each share, minus $.09; or
--   91% of the Market Price for each share.

We may also designate a minimum price in our Put Notice and, subject to the
volume limitation, Swartz will be required to pay at least that price. The
minimum purchase price cannot exceed (i) 80% of the closing bid price of our
common stock on the day prior to the date we give Swartz the Put Notice or (ii)
the closing bid price minus $.14, whichever is lower. Pursuant to the volume
limitation, if the price of our stock for any day during the 20 day Pricing
Period is below the greater of (i) the price we designate plus $.09, or (ii) the
price we designate divided by .91, then the trading volume from that day is
excluded from aggregate trading volume used to determine the 15% volume
limitation. Based on this formulation, the lowest market price at which we could
designate a minimum put price would be $.10 per share.

We are registering 24,220,000 shares to be sold to Swartz in Puts. In order for
us to receive the maximum of $20 million under the Investment Agreement, the
average sale price of these shares would need to be $.83. There is currently no
market for our shares, so unless (i) our shares are listed, (ii) an active
trading market develops for our shares and (iii) our share price increases
drastically, we will need to register additional shares in order to access the
full $20 million maximum.

LIMITATIONS AND CONDITIONS TO OUR PUT RIGHTS

Our ability to sell shares to Swartz, and Swartz's obligation to purchase the
shares, is subject to the satisfaction of certain conditions. These conditions
include:

(a)  satisfaction of all of our obligations under the agreements entered into
     between us and Swartz in connection with the Investment Agreement;
(b)  our common stock being listed and traded on the Nasdaq Small Cap Market,
     the Nasdaq National Market, the over-the-counter Bulletin Board, the
     American Stock Exchange or the New York Stock Exchange;




                                      -17-
<PAGE>



(c)  our representations and warranties in the Investment Agreement must be
     accurate as of the date of each Put;
(d)  reservation for issuance of a sufficient number of shares of our common
     stock to satisfy our obligations to issue shares under any Put and upon
     exercise of warrants;
(e)  the registration statement for the shares issued to Swartz must remain
     effective as of the Put date and no stop order with respect to the
     registration statement is in effect;
(f)  shareholder approval as required by Nasdaq if we are listed on Nasdaq and
     the number of shares Put to Swartz, together with any shares previously Put
     to Swartz, would equal 20% of all outstanding shares of our common stock
     (as we expect our common stock to initially be quoted on the OTC Bulletin
     Board, we presently do not anticipate needing shareholder approval); and
(g)  other customary closing conditions.

If any of the following events occurs during a Pricing Period, the volume will
cease to accrue for that Put, the Pricing Period shall be adjusted to terminate
10 business days after the date we notify Swartz of the event and any minimum
price we have specified shall not apply to the Put.

(1)  we announced or implemented a stock split or combination of our common
     stock;
(2)  we paid a dividend or made a distribution on our common stock;
(3)  we made a distribution of all or any portion of our assets or evidences of
     indebtedness to the holders of our common stock;
(4)  we consummated a major transaction, such as a sale of all or substantially
     all of our assets or a merger or tender or exchange offer that results in a
     change in control;
(5)  we discover an undisclosed material fact that would amount to a material
     misstatement or omission from this prospectus or any amendment thereto;
(6)  the registration statement registering resales of the common stock becomes
     ineffective; or
(7)  our shares of common stock are either delisted from, or no longer trading
     on, the Nasdaq Small Cap Market, the Nasdaq National Market, the
     over-the-counter Bulletin Board, the New York Stock Exchange, or the
     American Stock Exchange.

Our right to initiate Puts to Swartz shall terminate permanently (an "Automatic
Termination") upon the following events:

- we, or any of our directors or executive officers, have engaged in a
transaction or conduct related to us that resulted in (i) an SEC enforcement
action, or (ii) a civil judgment or criminal conviction for fraud or
misrepresentation, or for any other offense that, if prosecuted criminally,
would constitute a felony under applicable law;

- following effectiveness and listing of our common stock, the aggregate number
of days during which our registration statement is not effective or our common
stock is not listed and traded on the Nasdaq Small Cap Market, the Nasdaq
National Market, the over- the-counter Bulletin Board, the New York Stock
Exchange, or the American Stock Exchange equals or exceeds four months;

- we file for bankruptcy or any other proceeding for the relief of debtors;

- we materially breach covenants contained in the Investment Agreement and do
not cure the breach within 15 days of becoming aware of it.





                                      -18-
<PAGE>


COMMITMENT AND TERMINATION FEES

Starting one year after the effective date of our registration statement, if we
do not sell at least $1 million worth of common stock to Swartz during each 12
month period thereafter, we must pay Swartz a non-usage fee. This fee equals the
difference between $100,000 and 10% of the value of the shares purchased by
Swartz during the 12 month period.

If the Investment Agreement is terminated, we must pay Swartz the greater of (i)
the non- usage fee described above, or (ii) the difference between $200,000 and
10% of the value of the shares purchased by Swartz for all Puts to date.

SHORT SALES

The Investment Agreement prohibits Swartz and its affiliates from engaging in
short sales of our common stock unless Swartz has received a Put Notice and the
amount of shares involved in the short sale does not exceed the number of shares
we specify in the Put Notice.

TERMINATION OF THE INVESTMENT AGREEMENT

We may terminate our right to initiate further Puts or terminate the Investment
Agreement at any time by providing Swartz with written notice of our intention
to terminate. However, any termination will not affect any other rights or
obligations we have concerning the Investment Agreement or any related
agreement, except that no additional non-usage fees will accrue. The Investment
Agreement will automatically terminate if a registration statement for resale of
the common stock is not declared effective by September 26, 2002.

CAPITAL RAISING LIMITATIONS

During the term of the Investment Agreement and for a period of 60 days after
the termination of the Investment Agreement, we are prohibited from selling
stock or securities convertible into our stock, and from entering into any
private equity line agreements similar to the Investment Agreement without
obtaining Swartz's prior written approval.



                                      -19-
<PAGE>


We have agreed to give Swartz a right of first refusal during this same period.
Under the right of first refusal, we must give at least 10 days written notice
to Swartz of a proposed transaction at least 10 days prior to the transaction
closing. Swartz may elect to participate in the transaction during this 10 day
period.

Neither of the above restrictions apply to the following transactions:

(i)     securities issued to a company we are acquiring as payment for such
        acquisition;
(ii)    exercise of options by employees or directors;
(iii)   an underwritten public offering of our common stock;
(iv)    securities issued upon conversion or exercise of currently outstanding
        options, warrants or other convertible securities;
(v)     grant of options under any stock option or restricted stock plan for the
        benefit of employees or directors;
(vi)    issuance of debt securities with no equity feature for working capital
        purposes;
(vii)   issuance of common stock at a discount of less than 30% to the average
        closing price of the common stock for the five trading days immediately
        preceding the date of issuance, as long as such issuance has no future
        conversion or reset rights or any rights to receive additional shares
        based upon a market price at any time in the future; or
(viii)  issuance of up to $600,000 of straight debt securities, which may be
        accompanied by warrants to purchase up to a total of 600,000 shares of
        the common stock at a price of $0.10 or more.

SWARTZ'S RIGHT OF INDEMNIFICATION

We have agreed to indemnify Swartz, including its shareholders, officers,
directors, employees, direct or indirect investors, and any agent or
representative of the foregoing, from all liability and losses resulting from
any of our misrepresentations or breaches we make in connection with the
Investment agreement, the registration rights agreement, other related
agreements, or our registration statement. We have also agreed to indemnify
these persons for any claims based on violation of Section 5 of the Securities
Act caused by the integration of the private sale of our common stock to Swartz
and the public offering pursuant to the registration statement.

EFFECT ON OUR OUTSTANDING COMMON STOCK

The issuance of common stock under the Investment Agreement will not affect the
rights or privileges of existing holders of common stock except that the
issuance of shares willdilute the proportionate voting interests of each
shareholder.

As noted above, we cannot determine the exact number of shares of our common
stock issuable under the Investment Agreement and the resulting dilution to our
existing shareholders, which will vary with the extent to which we utilize the
Investment Agreement, the market price of our common stock, and exercise of the
related warrants. The potential effects of any dilution on our existing
shareholders include the significant dilution of the current shareholders'
economic and voting interests in us.




                                      -20-
<PAGE>


Item 7.  FINANCIAL STATEMENTS




                      FINANCIAL STATEMENTS AND REPORTS OF
                    INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

                                    I N D E X

                         VALESC INC. AND SUBSIDIARY                      PAGE
                         --------------------------                      ----
Report of Independent Certified Public Accountants                       F-1
Financial Statements of Valesc Inc. and Subsidiary
      Consolidated Balance Sheet                                         F-2
      Consolidated Statement of Operations                               F-3
      Consolidated Statement of Shareholders' Equity (Deficiency)        F-4
      Consolidated Statement of Cash Flows                               F-4
Notes to Consolidated Financial Statements                               F-5




<PAGE>



               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

STOCKHOLDERS AND BOARD OF DIRECTORS
VALESC INC.  AND SUBSIDIARY

         We have audited the accompanying consolidated balance sheets of Valesc
Inc. and Subsidiary as of December 31, 2001 and December 31, 2000, and the
related consolidated statements of operations, shareholders' equity (deficiency)
and cash flows for the years ended December 31, 2001 and 2000. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Valesc Inc. and Subsidiary as
of December 31, 2001 and December 31, 2000, and the results of its operations
and its cash flows for the years ended December 31, 2001 and 2000, in conformity
with accounting principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming Valesc Inc.
and subsidiary will continue as a going concern. As more fully described in Note
B, the Company has incurred recurring operating losses and negative cash flows
from operations, which resulted in an accumulated deficit, and shareholders'
deficiency at December 31, 2001. These conditions raise substantial doubt about
the Company's ability to continue as a going concern. Management's plans in
regard to these matters are also described in Note B. The financial statements
do not include any adjustments to reflect the possible future effects on the
recoverability and classification of assets or the amounts and classification of
liabilities that may result from the outcome of this uncertainty.






/S/ GRANT THORNTON LLP
----------------------




New York, New York
March 8, 2002





                                      F-1
<PAGE>



<TABLE>
<CAPTION>




                           Valesc Inc. and Subsidiary

                           CONSOLIDATED BALANCE SHEETS



                                                      December 31,  December 31,
                                                         2001          2000
                                                         ----          ----
ASSETS

Current Assets

<S>                                                  <C>            <C>
Cash                                                 $    26,311    $     1,680
Accounts receivable                                       20,560         20,682
Prepaid expenses                                            --            1,141
                                                     -----------    -----------

Total Current Assets                                 $    46,871    $    23,503

Property and equipment, net of accumulated
   depreciation of $25,558 at December 31, 2000
   and $7,746 at December 31, 2001                         6,553         13,874
Deferred Financing Costs, net of accumulated
   amortization of $7,514                                 32,266           --
                                                     -----------    -----------
Total Assets                                         $    85,690    $    37,377
                                                     ===========    ===========
LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIENCY)

Current liabilities
Accounts payable                                     $   336,585    $    31,680
Current maturities of notes
   payable, net of debt discount
   of $45,992 at December 31, 2001                        84,008          8,623
Accrued interest payable                                  14,205           --
Accrued expenses and other
   current liabilities                                   228,916          1,352
Officers' salaries payable                               105,519          3,867
                                                     -----------    -----------
Total current liabilities                                769,233         45,522

Notes Payable - long term, net of
   debt discount of $36,073                               31,927           --
                                                     -----------    -----------
Total Liabilities                                        801,160         45,522

Commitments and contingencies

Shareholders' equity (deficit)
Preferred stock; $.0001 par value;
   20,000,00 shares authorized, none
   issued and outstanding                                   --             --
Common stock, $.0001 par value;
   100,000,000 shares Authorized; 4,388,004
   and 9,708,548 shares of Valesc Inc.
   issued and of December 31, 2000
   and December 31, 2001, respectively                        56          1,000
Additional paid-in capital                                  --             --
Accumulated deficit                                     (715,526)        (9,145)
                                                     -----------    -----------
Total shareholders' equity (deficiency)                 (715,470)        (8,145)
                                                     -----------    -----------
Total liabilities and shareholder' equity
   (deficiency)                                      $    85,690    $    37,377
                                                     ===========    ===========
</TABLE>


THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE STATEMENTS. The balance
sheet at December 31, 2000 reflects the financial condition of OJI Surgical,
Inc., the "accounting acquirer."




                                      F-2
<PAGE>



<TABLE>
<CAPTION>



                           Valesc Inc. and Subsidairy

                      CONSOLIDATED STATEMENTS OF OPERATIONS





                                               Year ended          Year ended
                                              December 31,        December 31,
                                                 2001                 2000
                                                 ----                 ----


<S>                                              <C>                <C>

Revenues from product sales
   and service income                            $    20,765        $   217,772
Commission income                                    238,727            262,918
                                                 -----------        ------------
Net Sales                                            259,492            480,690

Cost of Revenues                                      11,939             99,315
Selling, general and
   administrative expenses                           284,327            386,890
Equity based compensation expense                      5,151               --
                                                 -----------        ------------

Total Expenses                                       301,417            486,205
                                                 -----------        ------------
Loss from Operations                                 (41,925)            (5,515)

Interest Expense                                       4,814              1,918
                                                 -----------        ------------
Net Loss before taxes                                (46,739)            (7,433)

Income tax expense                                       235              1,352
                                                 -----------        ------------
NET INCOME (LOSS)                                $   (46,974)       $    (8,785)
                                                 ===========        ===========

Basic and diluted income
   (loss) per share                              $      (.01)       $      (.00)
                                                 -----------        ------------

Weighted average shares outstanding
   used in Computing basic and diluted
   income (loss) per common share
   (as adjusted for stock split)                   9,320,278          8,690,008

</TABLE>



THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE STATEMENTS.


The statement of operations reflect the results of OJI Surgical,  Inc. from
January 1, 2000 to December 31, 2001 and the results of Valesc, Inc. from
December 17, 2001 to December 31, 2001.




                                      F-3
<PAGE>


<TABLE>
<CAPTION>




                           Valesc Inc. and Subsidiary

           CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY (DEFICIENCY)

                     Years ended December 31, 2001 and 2000

                                        ----------------------------------------------------------------------
                                               Common Stock
                                          Number of                                               Total
                                           Shares        Value     Additional                   Shareholders'
                                                                    Paid-in      Accumulated      Equity
                                                                    Capital        Deficit      (Deficiency)
                                        ----------------------------------------------------------------------
<S>                                      <C>           <C>           <C>            <C>          <C>

Balance, January 1, 1999                1,000         $1,000                    $    (360)         $   640
Net loss -- 2000                                                                   (8,785)          (8,785)
                                    ---------        -------                     --------        ---------
Balance, December 31, 2000              1,000          1,000                       (9,145)          (8,145)
Net loss -- 2001                                                                  (46,974)         (46,974)
Effect of merger of
   OJI into Valesc Inc.             9,707,548           (944)                    (659,407)        (660,351)
                                    ---------        -------                     --------        ---------
                                    9,708,548        $    56          --        $(715,526)       $(715,470)
                                    =========        =======                    =========        =========


</TABLE>


THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE STATEMENTS, and
reflect the shareholders equity of OJI Surgical, Inc., the accounting acquiror,
as adjusted to give effect to the capitalization of Valesc Inc., the legal
acquirer.


<TABLE>
<CAPTION>


                           Valesc Inc. and Subsidiary

                      CONSOLIDATED STATEMENTS OF CASH FLOWS


                                                                       Year
                                                      Year Ended       Ended
                                                     December 31,   December 31,
                                                         2001          2000
                                                     ---------------------------

Cash flows from operating activities
<S>                                                   <C>           <C>
   Net loss                                           $   (46,739)  $    (8,785)
   Adjustments to reconcile net loss to
      net cash provided by (used in)
      operating activities
        Depreciation and amortization                       7,865         7,012
        Equity based compensation charges                   5,151          --
        Noncash interest accretion                          3,364          --
        Changes in assets and liabilities
           Accounts Receivable                                122        17,099
           Prepaid Expenses                                 1,141          (270)
           Accounts payable                                61,320          --
           Accrued expenses and other
             current liabilities                              333        (6,976)
           Accrued officers' salaries                         697          --
                                                     ------------   ------------
 Net cash provided by (used in)
   operating activities                                    33,254        (8,080)

Cash flows from investing activities
        Purchase of equipment                                 --           (400)
                                                     ------------   ------------
        Net cash used in investing
          activities                                          --           (400)

Cash flows from financing activities
        Repayment of loans                                 (8,623)      (10,480)
                                                     ------------   ------------
Net cash used in financing activities                      (8,623)      (10,480)

Net increase (decrease) in cash                            24,631        (2,800)

Cash at beginning of period                                 1,680         4,480
                                                     ------------   ------------
Cash at end of period                                $     26,311   $     1,680
                                                     ============   ============

Supplemental disclosures of cash flow information:

Cash paid during the period for interest             $      2,300   $       200
                                                     ============   ============

</TABLE>

During 2001, the Company acquired the common stock of OJI from SMT for 266,000
shares of common stock.


THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE STATEMENTS, and reflect
the cash flows of OJI Surgical, Inc., the accounting acquirer.







                                      F-4
<PAGE>




                           VALESC INC. AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                December 31, 2001

NOTE A - DESCRIPTION OF BUSINESS AND FORMATION OF COMPANY

The accompanying financial statements present the accounts of OJI Surgical, Inc.
for 2000 and 2001 and the effect of the acquisition (for accounting purposes --
see Note A-3) of Valesc Inc. on December 17, 2001.

1. DESCRIPTION OF BUSINESS ENTITIES

Valesc Inc., a New Jersey corporation ("Valesc NJ") was incorporated on October
24, 2000, and at the date of inception was owned 100% by Atlas Holdings Inc.
Atlas Holdings is owned 50% by Jeremy Kraus, the Company's Chairman and Chief
Executive Officer, 25% by Samuel Cohen, the Company's President and Director
and, 12.5% by Garrett Miller, the Company's Vice President and Director. On
March 21, 2001, Valesc NJ executed a 2:1 stock split.

NetCentral Capital Fund, Inc. ("NetCentral") was incorporated in the State of
Delaware on June 2, 2000, for the specific purpose of providing a method,
through a merger or otherwise, for a foreign or domestic private company to
become a reporting company with a class of registered securities. NetCentral had
a single shareholder. It had no operating business from the date of inception
until March 22, 2001. At March 22, 2001, NetCentral had no assets. From
inception through March 22, 2001 NetCentral had no revenues, and expenses of
approximately $30,000 of professional fees relating to the formation. On March
21, 2001, NetCentral had a 1:18.04 reverse stock split, and thereafter had
277,237 shares outstanding.

Founded as an Oregon corporation in 1988, OJI Surgical, Inc. ("OJI") is a
manufacturer's representative for medical devices and health care products,
primarily in the orthopedic field. OJI serves customers in the Pacific Northwest
of the US from its Portland, Oregon base.

The accompanying consolidated financial statements include the accounts of
Valesc and OJI Surgical, Inc. from the date of the acquisition of OJI (December
17, 2001) by Valesc. All material intercompany accounts and transactions between
the Company and its subsidiary have been eliminated.

2. DESCRIPTION OF MERGER BETWEEN VALESC AND NETCENTRAL

On March 22, 2001, Valesc NJ was acquired by NetCentral (the "Merger") for
8,964,008 shares of Common Stock, which were exchanged on a 1-for-1 basis with
Valesc NJ stock. Simultaneously therewith, the Directors of NetCentral resigned,
and the Company was renamed "Valesc Inc." ("Valesc Inc."). After the Merger,
Atlas Holdings Inc. owned 8,458,548 or 90.4% of the outstanding Common Stock of
Valesc Inc.

Under generally accepted accounting principles, the Merger is considered to
be a capital transaction in substance, rather than a business combination. That
is, the acquisition is equivalent to the issuance of stock by Valesc NJ for the
net monetary assets of NetCentral, accompanied by a recapitalization, and is
accounted for as a change in capital structure. Accordingly, the accounting for
the acquisition is identical to that resulting from a reverse acquisition,
except that no goodwill is recorded. Under reverse takeover accounting, the
post-reverse-acquisition comparative historical financial statements of the
"legal acquirer" (NetCentral) are those of the "accounting acquirer" (Valesc
NJ), Earnings (loss) per share ("EPS") are calculated to reflect the Company's
change in capital structure for all periods presented. Costs associated with
merger were expensed as incurred, by Valesc NJ.



                                      F-5
<PAGE>




3. DESCRIPTION OF MERGER BETWEEN VALESC AND OJI SURGICAL

On December 17, 2001 SMT sold OJI to Valesc Inc., a Delaware corporation. Valesc
Inc. received 100% of the outstanding stock of the Company in exchange for
266,000 shares of its common stock. The Chief Executive of Valesc Inc. is Jeremy
Kraus, a board member of SMT as well as the son of SMT's President and the
nephew of the Company's President. In addition, Samuel Cohen is a member of the
board of both SMT and Valesc, and serves as the President of Valesc. Several
members of the Kraus family are investors in Valesc. Valesc and its wholly-owned
subsidiary, OJI Surgical, Inc. are hereafter referred to as "the Company."

Under generally accepted accounting principles, the acquisition is considered to
be a capital transaction in substance, rather than a business combination. That
is, the acquisition is equivalent to the issuance of stock by OJI for the net
monetary assets of Valesc, accompanied by a recapitalization, and is accounted
for as a change in capital structure. Accordingly, the accounting for the
acquisition is identical to that resulting from a reverse acquisition, except
that no goodwill is recorded. Under reverse takeover accounting, the
post-reverse-acquisition comparative historical financial statements of the
"legal acquirer" (Valesc) are those of the "accounting acquirer" (OJI).

4. DESCRIPTION OF MERGER BETWEEN OJI SURGICAL AND SMT

In 1999, OJI was purchased from Harry Kraus, its current President, founder and
then sole shareholder, by SMT Enterprises Corporation ("SMT"), a Delaware
company. SMT was an inactive company prior to this transaction. SMT received
100% of the outstanding stock of OJI in exchange for 32% of its outstanding
stock. Edward Kraus, the brother of Harry Kraus, is the President of SMT and
Robert Kraus, Harry Kraus's brother and Jeremy Kraus, Harry Kraus's nephew are
also members of the board of SMT.

Under generally accepted accounting principles, the acquisition is considered to
be a capital transaction in substance, rather than a business combination. That
is, the acquisition is equivalent to the issuance of stock by OJI for the net
monetary assets of SMT, accompanied by a recapitalization, and is accounted for
as a change in capital structure. Accordingly, the accounting for the
acquisition is identical to that resulting from a reverse acquisition, except
that no goodwill is recorded. Under reverse takeover accounting, the
post-reverse-acquisition comparative historical financial statements of the
"legal acquirer" (SMT) are those of the "accounting acquirer" (OJI). Costs
associated with merger were expensed as incurred.

NOTE B - LIQUIDITY AND GOING CONCERN

The accompanying financial statements of the Company have been prepared assuming
the Company will continue as a going concern. No adjustment has been made for
this uncertainty. The Company has invested a significant amount of its effort
and cash in the development of its business plan. As of December 31, 2001, the
Company has a stockholders deficit of approximately $715,000. For the period
ended December 31, 2001, the Company had net losses of approximately $47,000 and
when combined on a pro forma basis with Valesc for the full year 2001, had a net
loss of approximately $1,066,000. The Company will be required to seek external
financing to continue developing its business plan and to consummate planned
acquisitions, and to cover the overhead costs associated with Valesc. Operating
losses are expected to continue in 2002.

During the next twelve months, the Company intends to devote its time and
resources to the growth of its medical device sales business. The Company
currently sells a variety of medical products, including replacement joints and
surgical implements and tools, for use in the orthopedic care and surgical area.
The Company intends to expand its sales of these products in three ways: (i)
increased penetration in market areas already covered, (ii) the addition of
sales personnel to expand geographic coverage and (iii) the addition of new
product lines.

In order for the Company's expansion to be successful, it will need to greatly
expand its administrative capabilities and its sales force. The Company intends
to invest approximately $100,000 in the purchase, customization and installation
of accounting and back-office software to enable it to manage a larger number of
transactions, customers and suppliers without substantially increasing its
administrative staff. The Company also expects to incur significant expenses for
hiring additional sales people. In addition to normal hiring costs,
manufacturers' representatives like OJI generally "sponsor" new sales people for
a period of up to one year during which the company subsidizes the employee's
wages until they have built a sufficient customer base to support themselves
solely on a commission basis. The Company cannot predict these additional costs
at this time, but they may represent a substantial increase over the Company's
current costs.

The Company will need significant new financing in order to fund these expansion
plans. Although the company expects additional costs to be offset by increased
revenues, it cannot be certain whether increases in revenues will occur and
whether any such increases will offset costs.



                                      F-6
<PAGE>


Management's plans with respect to its liquidity issues include the following:

o    The Company has obtained an equity line of credit which provides a
     financing vehicle for the Company - see Note E-5.
o    The Company is in the process of completing the registration of its common
     stock, which would allow it to commence drawing on the equity line of
     credit.
o    Raise additional funding through the sale of debt and equity instruments to
     fund activities.
o    From January through March 2002, the Company received proceeds from the
     issuance of common stock of $150,000.

To date, the Company has supported its activities through debt and equity
investments. Management plans to continue to seek the funding required to
finance operations as the Company commences its business plan and expansion
plan. Failure to find additional financing, create a public market for its
stock, and execute its expansion plan, could negatively impact the Company's
ability to continue as a going concern.

NOTE C - PRO FORMA STATEMENT OF OPERATIONS

The following Pro Forma Condensed Balance Sheet and income statement have been
prepared based upon the historical audited financial statements of Valesc Inc.
and OJI Surgical, Inc. as of December 31, 2000 and 2001 and for the periods
ended December 31, 2000 and 2001 respectively and gives effect to the merger of
the two companies, showing OJI as the "accounting acquirer." The equity accounts
of the combined entities have been presented to reflect the share structure of
the legal acquirer -- Valesc Inc.

The following Pro Forma Condensed financial information is not necessarily
indicative of the actual results of operations that would have been reported if
the events described above had occurred as of January 2, 2000 nor do they
purport to indicate the results of Valesc's future operations. Furthermore, the
pro forma results do not give effect to all cost savings or incremental costs
that may occur as a result of the integration and consolidation of the
companies.




                                                       (Unaudited)
                                                       DECEMBER 31,
                                                   2001           2000
                                                -------------------------

        Revenues                                  $259,492      $480,690
        Cost of Revenues                            11,939        99,315
                                                ----------    ----------
        Gross profit                               247,553       381,375

        Operating expenses
           Merger expense                           75,000             0
           Equity-based compensation
             expense                               172,080             0
        Selling, general and administrative
                expense                          1,006,370       582,308
                                                ----------    ----------
        Total expenses                           1,253,450       582,308
                                                ----------    ----------
        Income (loss) from operations           (1,005,897)     (200,933)

           Interest expense                         60,147             0

           Income tax expense                          235         1,352
                                                ----------    ----------
        Net loss                                (1,066,279)     (202,285)
                                                ==========    ==========
        Net loss per common share                    $(.11)        $(.02)

        Weighted average shares outstanding      9,320,278     8,916,008



NOTE D - ACCOUNTING POLICIES

1. REVENUE RECOGNITION

In December 1999, the staff of the Securities and Exchange Commission issued
Staff Accounting Bulletin 101, "Revenue Recognition," to provide guidance on the
recognition, presentation, and disclosure of revenue in financial statements.
The Company's policies on revenue recognition are consistent with this
bulletin.

Commission income as a manufacturers' representative on new product sales are
recorded in the period during which the underlying product sale occurs.

OJI's revenues from product sales and service income are derived from the sale
of new products distributed by the Company, and the refurbishment of used
products. Revenue is recognized as products are delivered to its customers,
which are typically the same customers as commission sales are transacted. As of
the end of 2001, the Company was not distributing any new or refurbished
products, but may in the future.

2. EARNINGS (LOSS) PER SHARE

Basic loss per share for the year ended December 31, 2001 is computed by
dividing the loss for the period by the weighted average number of common shares
outstanding during the period. Diluted loss per share is computed by dividing
the loss for the period by the weighted average number of common shares adjusted
for the dilutive effect of any potential common shares issuable during the
period. The amount of options or warrants not considered in the loss per share
calculation because their effect was antidilutive was 0 and 2,134,000 for the
periods ended December 31, 2000 and December 31, 2001, respectively. Earnings
(loss) per share are calculated to present the change in capital structure for
all periods presented.

3. USE OF ESTIMATES

The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the amounts reported in the financial
statements and accompanying notes. Actual results could differ from those
estimates and assumptions. Significant estimates that affect the financial
statements include, but are not limited to, the valuation of options and
warrants granted.

4. CONCENTRATIONS OF CREDIT RISK

Product sales from a relatively few suppliers account for a substantial portion
of the Company's revenues. During the year ended December 31, 2001 and 2000,
product sales from two suppliers accounted for 78% of net sales (55% and 24%),
and 23% of net sales (12% and 11%), respectively.

Financial instruments which subject the Company to concentrations of credit risk
consist primarily of cash, notes payable and trade accounts payable. The Company
considers the book values of these investments to be indicative of their
respective fair values.



                                      F-7
<PAGE>


5. CASH AND CASH EQUIVALENTS

The Company considers all highly liquid short-term investments with maturities
of 90 days or less when purchased to be cash equivalents.

6. INCOME TAXES

The Company accounts for income taxes in accordance with Statement of Financial
Accounting Standards No. 109 (SFAS No. 109), "Accounting for Income Taxes." SFAS
No. 109 is an asset and liability approach that requires the recognition of
deferred tax assets and liabilities for the expected future tax consequences
attributable to differences between the carrying amounts of assets and
liabilities for financial reporting purposes and their respective tax bases, and
for operating loss and tax credit carryforwards. A valuation allowance is
recorded if it is more likely than not that some portion or all of a deferred
tax asset will not be realized.

7. LONG-LIVED ASSETS AND IMPAIRMENT OF LONG-LIVED ASSETS

The Company records impairment losses on long-lived assets used in operations or
expected to be disposed of when events and circumstances indicate that the
assets might be impaired and the undiscounted cash flows estimated to be
generated by those assets are less than the carrying amounts of those assets. No
impairment losses were recorded in 2001.

8. PROPERTY AND EQUIPMENT

Property and equipment are stated at cost less accumulated depreciation.
Depreciation is computed using the straight-line method for financial reporting
purposes, and accelerated methods for tax purposes, over the following estimated
useful lives:

                           Office Equipment 3-7 years
                                 Vehicle 5 years


9. RESEARCH AND DEVELOPMENT COSTS

Research and development costs are expensed as incurred. The Company has
incurred no research and development expenses to date.



                                      F-8
<PAGE>


10. STOCK-BASED COMPENSATION

As permitted by the Statement of Financial Accounting Standards No. 123 (SFAS
No. 123), Accounting for Stock-Based Compensation, the Company accounts for
stock-based employee compensation arrangements in accordance with provisions of
Accounting Principles Board (APB) Opinion No. 25, "Accounting for Stock Issued
to Employees." Compensation expense for stock options issued to employees is
based on the difference, on the date of grant, between the fair value of the
Company's stock and the exercise price of the option. The Company accounts for
equity instruments issued to nonemployees in accordance with the provisions of
SFAS No. 123 and Emerging Issues Task Force (EITF) Issue No. 96-18, "Accounting
for Equity Instruments That Are Issued to Other Than Employees for Acquiring, or
in Conjunction With Selling, or in Conjunction With Selling, Goods or Services."
All transactions in which goods or services are the consideration received for
the issuance of equity instruments are accounted for based on the fair value of
the consideration received or the fair value of the equity instrument issued,
whichever is more reliably measurable. The measurement date of the fair value of
the equity instrument issued is the date on which the counterparty's performance
is complete.

11. MARKETING COSTS

The Company expenses marketing costs as incurred, and amounted to approximately
$0 and $200, respectively for the period ended December 31, 2000 and 2001.

12. RECENT ACCOUNTING PRONOUNCEMENTS

On July 20, 2001, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards (SFAS) 141, Business Combinations,
and SFAS 142 Goodwill and Tangible Assets. SFAS 141 is effective for all
business combinations completed after June 30, 2001. SFAS 142 is effective for
fiscal years beginning after December 15, 2001; however, certain provisions of
this Statement apply to goodwill and other intangible assets acquired between
July 1, 2001 and the effective date of SFAS 142. Major provisions of these
Statements and their effective dates for the Company are as follows:

o    all business combinations initiated after June 30, 2001 must use the
     purchase method of accounting. The pooling of interest method of accounting
     is prohibited except for transactions initiated before July 1, 2001.

o    intangible assets acquired in a business combination must be recorded
     separately from goodwill if they arise from contractual or other legal
     rights or are separable from the acquired entity and can be sold,
     transferred, licensed, rented or exchanged, either individually or as part
     of a related contract, asset or liability.

o    goodwill, as well as intangible assets with indefinite lives, acquired
     after June 30, 2001, will not be amortized. Effective September 1, 2002,
     all previously recognized goodwill and intangible assets with indefinite
     lives will no longer be subject to amortization.

o    effective September 1, 2002, goodwill and intangible assets with indefinite
     lives will be tested for impairment annually and whenever there is an
     impairment indicator.

o    all acquired goodwill must be assigned to reporting units for purposes of
     impairment testing and segment reporting.



                                      F-9
<PAGE>


In August 2001, the FASB issued Statement of Financial Accounting Standards
No.144, "Accounting for the Impairment of Disposal of Long-Lived Assets" ("SFAS
144"). This statement is effective for fiscal years beginning after December 15,
2001. This supersedes Statement of Financial Accounting Standards No. 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
Be Disposed Of," while retaining many of the requirements of such statement.

Although it is still reviewing the provisions of these Statements, management's
preliminary assessment is that these Statements will not have a material impact
on the Company's financial position or results of operations.


NOTE E - CAPITAL STOCK OF REGISTRANT

Valesc Inc. authorized capital stock consists of 100,000,000 shares of Common
Stock, $.0001 par value per share, and 20,000,000 shares of preferred stock,
$.0001 par value per share. Holders of Common Stock are entitled to receive such
dividends as may be declared by the Board of Directors out of funds legally
available therefore and, in the event of liquidation, to share pro rata in any
distribution of assets after payment of liabilities. The Board of Directors is
not obligated to declare a dividend and it is not anticipated that dividends
will be paid in the foreseeable future. Holders of Common Stock do not have
preemptive rights to subscribe to any of our additional shares. There are no
conversion, redemption, sinking fund or similar provisions regarding the Common
Stock. All of the outstanding shares of Common Stock are fully paid and
non-assessable and all of the shares of Common Stock offered hereby will be,
upon issuance, fully paid and non-assessable. The Company has not designated any
terms for the preferred stock.

On March 21, 2000, Valesc NJ declared a 2:1 stock split. All share and per share
references have been updated to reflect the stock split.

1. COMMON STOCK ISSUANCES BY VALESC INC. PRIOR TO THE MERGER WITH OJI

During 2000, Valesc issued 370,000 shares (as adjusted for the stock
split) of common stock for aggregate net proceeds of $92,500. The shares were
offered to employees, directors, related party investors and non-related
investors.

During 2001, Valesc issued 319,303 (as adjusted for the stock split)
shares of common stock for aggregate net proceeds of $94,445. The shares were
offered to employees, directors, related party investors and non-related
investors.

During 2001, Valesc issued 266,000 shares of common stock to SMT in connection
with the merger of OJI into the Registrant, 277,237 shares of common stock in
connection with the merger of Valesc NJ into NetCentral and 70,000 shares of
common stock to consultants for services rendered (See Note E-5).

2. WARRANTS

From January 1, 2001 through December 31, 2001, an aggregate of 454,000 warrants
were issued by Valesc in connection with the notes payable with a face
value of $198,000 (See Note F). Proceeds of approximately $128,000 was allocated
to these warrants. The assumptions used in determining the warrant valuation
using the Black-Scholes option pricing model are risk-free interest rate (4.72%
and 2.12%), volatility factor (45%), fair value ($0.33) and term of warrants (1
- 2.5 years). Further, for purposes of this calculation the Company assumed the
maximum number of warrants would be issued or exercised at the lowest price
indicated in the terms of the warrant agreement. The terms of these warrants are
summarized as follows:


o    15,000 of these warrants are exercisable at $.25 per share through December
     31, 2003.

o    50,000 of these warrants are exercisable at $.01 per share through February
     1, 2004.

o    100,000 of these warrants are exercisable at $.10 per share through
     February 2, 2004.

o    The Company also issued warrants with an exercise price of $.01 through
     December 19, 2003. The number of shares permitted to be exercised under
     these warrants is pre-set based upon the date the note payable is repaid -
     120,000 if repaid prior to February 2, 2002, 150,000 if repaid between
     February 3, 2002 and August 1, 2002, and 200,000 if repaid after August 1,
     2002.



                                      F-10
<PAGE>


o    64,000 warrants, with an exercise price of $.01 per share, were issued in
     connection with $25,000 of the notes payable. The number of shares
     permitted to be exercised under these warrants is pre-set based upon the
     date the note payable is repaid - 11,500 if repaid prior to February 2,
     2002, 39,000 if repaid between February 3, 2002 and August 1, 2002, and
     64,000 if repaid after August 1, 2002.

o    25,000 warrants, with an exercise price of $.33 per share were issued in
     connection with $25,000 of notes payable. These warrants, which will not be
     registered, vest immediately and are exercisable through October 3, 2004.

3. STOCK OPTION PLAN

On April 6, 2001, the Company adopted a Stock Option Plan (the "Option Plan").
The Option Plan authorized the granting of both incentive and nonqualified stock
options to employees for up to 1,500,000 shares of common or preferred stock to
officers, directors and key employees. The objectives of the Option Plan include
attracting and retaining the best personnel, providing for additional
performance incentives, and promoting the success of the Company by providing
employees with the opportunity to acquire both Common and Preferred Stock.
Options under the Registrant's Option Plan generally vest over a four-year
period, and generally expire ten years after the grant date.

On January 1, 2001, 900,000 stock options were granted pursuant to employment
contracts (See Note H-2). 300,000 of the granted shares become exercisable on
each of December 31, 2001, 2002 and 2003. There were no options exercised or
forfeited through December 31, 2001.

Valesc Inc. accounts for stock-based compensation using the intrinsic value
method prescribed by Accounting Principles Board Opinion No. 25, "Accounting for
Stock Issued to Employees," under which no compensation cost for stock options
is recognized for stock option awards granted at or above fair market value. As
discussed in Note H-2, the Registrant has issued stock options to its three
executive officers. The exercise price of the first-year element of the stock
option grant is below the fair value of the Registrant's stock, therefore a 2001
compensation charge of $75,000, computed under the intrinsic value method, will
be recognized over the one-year vesting period. The second and third-year
elements contain an exercise price at or above the fair value of the
Registrant's stock at the date of grant and therefore no compensatory charge has
been recorded.

The fair value of each option grant is estimated on the date of grant using the
Black Scholes Option pricing model with the following assumptions used: dividend
yield of 0%, expected volatility of 45%, risk-free interest rate of 4.72% and
expected life of 10 years. Had compensation cost for the Company's stock option
grant been recorded based upon the fair value at the date of grant, the
Company's net loss at December 31, 2001 would have been $136,974 and net loss
at December 31, 2001 would have been $.01 per share.

4. OTHER STOCK OPTIONS

Valesc Inc. recorded expenses of $38,000 and $218,000 in the periods ended
December 31, 2000 and 2001, respectively, for expenses incurred by several
consultants, representing the estimated fair value of the services rendered. In
March 2001 the Registrant issued equity instruments in lieu of cash for such
expenses incurred. The Registrant initially issued 512,700 shares to such
consultants pursuant to cashless-exercise agreements entered into to discharge
the liabilities. In September 2001, the Registrant informed the consultants that
the agreements were invalid and required revision. All but 78,000 of the
initially issued shares were rescinded or cancelled. The Registrant continues to
carry the costs of these services in accrued expenses for those consultants
whose shares were rescinded or cancelled. The consultants who agree to retain
70,000 of the 78,000 shares were required to enter into a promissory note
(bearing interest at 3% per annum, commencing six months after issuance) to the
Company for the fair value ($.33) of the shares granted. The promissory note
requires payment of amounts due the Registrant upon sale of the underlying
shares by the holder. The consultant holding 8,000 of such shares paid the
Company for the shares in July 2001.

5. THE INVESTMENT AGREEMENT WITH SWARTZ

On June 7, 2001 as amended on August 29, 2001 and September 26, 2001 the
Registrant entered into an Investment Agreement with Swartz Private Equity, LLC
("Swartz") under which the Registrant, from time to time, has the option to
issue Swartz shares of Common Stock up to a maximum aggregate offering amount of
$20,000,000. Under the Investment Agreement, shares are issued to Swartz, and
Swartz pays for the shares in transactions referred to as Puts. The Company has
the right, at its sole discretion, to put shares of its Common Stock, to Swartz,
which Swartz must purchase, for a dollar amount of up to $2.0 million in each
Put, subject to additional limitations on the timing of our exercise of Put
rights and on the number of shares Swartz is obligated to purchase. The
Company's right to Put shares to Swartz is for a period of three years beginning
on the effective date of the registration statement.



                                      F-11
<PAGE>


The purchase price to be paid for the Put Shares by Swartz is equal to the
lesser of (i) the Market Price (as defined below), minus $.09, or (ii) 91% of
the Market Price. The Market Price for each Put equals the average of the two
lowest volume weighted average trading prices of the shares of Common Stock
during the Pricing Period (as defined below) for the applicable Put. The Pricing
Period means, unless otherwise shortened under the terms of the Investment
Agreement, the period beginning on the business day immediately following the
Put Date (as defined below) and ending on and including the date which is 20
business days after such Put Date. The Put Date is the date that is specified in
a written notice delivered to Swartz (the Put Notice) in which the Company
notifies Swartz of our intention to commence a Put.

The Company has the option, on the date of notification to Swartz of a Put, to
designate a minimum price for the shares to be purchased by Swartz in the Put
which is no greater than the lesser of 80% of the closing bid price of our
Common Stock on the day preceding the notice or the closing bid price on that
day minus $.14. If the Company designates a minimum price, Swartz must pay at
least that price for our Common Stock.

As consideration for entering into the Investment Agreement, the Company granted
to Swartz a warrant to purchase 780,000 shares of our Common Stock (the
Commitment Warrants). The exercise price for the Commitment Warrants is: $1.00,
provided that on the date six months after the date of issuance of the warrants,
or October 24, 2001, and on each six month anniversary thereafter, the exercise
price is subject to adjustment based on the lowest closing price for the five
trading days preceding the adjustment.

For financial reporting purposes, the Company computed the value of the warrant
using the Black-Scholes model and assuming a $1.00 exercise price. The resultant
value is considered a deferred offering cost and will be amortized over the life
of the equity agreement. To the extent the exercise price per share is adjusted
pursuant to the formulas mentioned above, the Company will record additional
deferred offering costs.

The Put Shares have demand registration rights and the Commitment Warrants have
piggyback registration rights, semi-annual reset provisions and a 5-year term.
The Swartz agreement contains certain penalties if the Company does not execute
minimum financings under this agreement.

6. TRANSACTION WITH GARRETT MILLER

In January 2001, Valesc entered into an agreement with Garrett Miller, an
officer in the Company, whereby he would exchange purchased shares and earned
(through investment commissions and equity-based compensation) shares of Valesc
Inc. for shares of Atlas Holdings. The Company recorded a charge to operations
of approximately $84,000 related to the equity-based compensation.

NOTE F - NOTES PAYABLE

The principal amount of the notes payable issued by Valesc Inc. mature as
follows:

                $130,000 in 2002 and
                $ 68,000 in 2003

1. RELATED PARTY NOTES

During the period ended December 31, 2001, the Company received advances from
related parties aggregating $78,000. These notes included detachable warrants as
summarized in Note E-2. These loans bear interest at a rate of 14% per annum,
none of which has been paid to date. Each of the notes are guaranteed by the
company's officers and directors. Of the total proceeds of this financing,
approximately $49,200 was allocated to warrants (Note E). Interest expense
resulting from the accretion of the loan balance to its face value was
approximately $21,000 for the year ended December 31, 2001.

2. NON-RELATED PARTY NOTES

During the year ended December 30, 2001, the Company issued notes to non-related
parties aggregating $120,000. One loan ($5,000) bears interest at a rate of 10%
per annum, and the second loan ($100,000) and third loans ($15,000) bear
interest at a rate of 14% per annum, none of which has been paid to date.
$100,000 of these notes are due in December 2002, $5000 due in September 2001,
and $15,000 due May 23, 2003. Payment of these notes are guaranteed by the
company's officers and directors. These notes included detachable warrants. Of
the total proceeds of this financing, approximately $78,500 was allocated to
warrants (Note E). Interest expense resulting from the accretion of the loan
balance to its face value was approximately $25,000 for the year ended December
31, 2001.

The note due in September 2001, has not been extended, however, the Company has
received a verbal agreement from the noteholder that it will not attempt to
enforce payment.



                                      F-12
<PAGE>


NOTE G - INCOME TAXES

Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amounts of assets and liabilities for financial statement
and income tax purposes under enacted tax law and rates. At December 31, 2001,
Valesc Inc. has deferred organizational costs and net operating loss
carryforward of approximately $1,200,000. Deferred tax assets arise from these
net operating loss carryforwards, organization costs and certain accruals are
approximately $660,000. The Company has fully reserved all deferred tax assets
due to the uncertainty of realization.

OJI is a cash basis taxpayor. The tax expense of OJI consists of the following
current taxes:

                                2001            2000
                                ----            ----
        Federal                $   68          $1,227
        State                     167             125
                               ------          ------
        Total                  $  235          $1,352
                               ======          ======

OJI's effective tax rate for the years ended December 31, 2001 and December 31,
2000 are lower than the statutory rate because companies with taxable income of
this size have a lower Federal tax rate and because of the reversal of
previously recorded valuation allowances on deferred tax asseets. Deferred
income tax assets resulting from the conversion from the accrual basis to the
cash basis are approximately $300 and $3,000 at December 31, 2001 and 2000,
respectively. The deferred income tax assets have been fully reserved due to the
uncertainty of realization.

Changes in ownership resulting from transactions among our stockholders and
sales of common stock by us, may limit annual realization of the tax net
operating loss carryforwards that could become available under Section 382 of
the Internal Revenue Code.

NOTE H - COMMITMENTS AND CONTINGENCIES

1. LEASES

Valesc leased office space under an operating lease that expired in June 2001.
OJI leased office space under a lease which expired in March 2001. The Company
did not lease any office space at December 31, 2001. Rental expense amounted to
approximately $3,300 and $11,600 for the periods ended December 31, 2000 and
2001, respectively. The Company's OJI subsidiary has entered into a lease
agreement beginning March 1, 2002 which will result in a monthly rent expense of
$880.

2. EMPLOYMENT AGREEMENTS

Effective January 1, 2001, the Company entered into employment agreements with
each of the three executive officers containing identical terms. The agreements
are summarized as follows: (A) initial term of three years, with automatic
one-year renewal terms thereafter; (B) during each year of the first three
years, each executive shall receive: (i) during the first year, an annual base
salary equal to the greater of (a) $50,000 or (b) 2.5% of the total revenue of
the Company and its subsidiaries for such year, up to a maximum of $150,000;
(ii) during the second year, an annual base salary equal to the greater of (a)
$55,000 or (b) 2.5% of the total revenue of the Company and its subsidiaries for
such year, up to a maximum of $165,000; and (iii) during the third year, an
annual base salary equal to the greater of (a) $60,500 or (b) 2.5% of the total
revenue of the Company and its subsidiaries for such year, up to a maximum of
$181,500; (C) the Board of Directors may consider one or more increases in the
salary payable to the executive in respect of any renewal term; (D) in the event
the Company is not in a position, due to our then-current financial situation,
to make any salary payment(s) to the executives, the unpaid salary shall accrue
without interest; (E) all accrued and unpaid salary shall be immediately due and
payable upon the occurrence of any change of control, defined as the sale of a
controlling interest in the Company's capital stock to one or more buyers acting
in concert, the sale of all or substantially all of our assets, or any corporate
merger or consolidation resulting in one or more parties, who did not previously
hold a controlling interest in our capital stock, owning a controlling interest
in our capital stock or our successor company; (F) the executives shall be
eligible to participate in bonuses awarded to senior management to the extent
that such bonuses are awarded or authorized by the Board of Directors from time
to time.

In addition to the foregoing, each executive will be granted the option to
purchase a total of 300,000 shares of Common Stock in equal installments of
100,000 shares at the end of each year of employment. The options shall be
exercisable for a period of three years following the date of vesting, and the
exercise price shall be as follows: (i) $.25 per share for the 100,000 shares
that vest after the first year; (ii) $.50 per share for the 100,000 shares that
vest after the second year; and (iii) $.75 per share for the 100,000 shares that
vest after the third year. In the event the executive is terminated without
cause by Company or the executive terminates his employment for good reason, any
options then outstanding that have neither vested nor been terminated as of such
date shall vest and become subject to purchase by the executive.



                                      F-13
<PAGE>


Effective January 1, 2002 and in connection with our acquisition of OJI
Surgical, Inc., OJI entered into an employment agreement with its President,
Harry Kraus. The agreement provides as follows: (A) an initial term of one year,
with automatic one-year renewal terms thereafter; (B) a monthly salary of
$10,800; (C) all accrued and unpaid salary shall be immediately due and payable
upon the occurrence of any "change of control", defined as the sale of a
controlling interest in OJI's capital stock to one or more buyers acting in
concert, the sale of all or substantially all of our assets, or any corporate
merger or consolidation resulting in one or more parties, who did not previously
hold a controlling interest in OJI's capital stock, owning a controlling
interest in OJI's capital stock; and (D) the executive shall be eligible to
participate in bonuses awarded to senior management to the extent that such
bonuses are awarded or authorized by the Board of Directors of OJI from time to
time.

3. LITIGATION

A shareholder of a predecessor of Atlas Holdings filed a suit against the
predecessor company seeking additional stock ownership of Atlas Holdings. The
case was dismissed for failure to prosecute. Management of Atlas believes there
are valid and meritorious defenses to such claim, if the suit is re-filed.

4. PENSION PLAN

The Company currently has no pension or profit sharing plans in place.
Previously, OJI had maintained a SIMPLE-IRA plan for the benefit of its
full-time employees. Company contributions to the plan were approximately $3,700
during the year ended December 31, 2000. The plan was discontinued and no
contributions were made during 2001. The assets of the Plan were held in
accounts for each participant's benefit, and were distributed to each
participant when the Plan was discontinued.

NOTE I - BANK LOANS

On June 10, 1997, OJI entered into a bank line of credit for maximum borrowings
of $100,000. The line of credit was repaid in full and the agreement terminated
in March 2001. Interest was payable at prime + 2.5% (12% at December 31, 2000).
All assets of OJI were pledged as collateral for the line of credit. At
December 31, 2000, the Company had no borrowings under its bank line of credit.
Harry Kraus served as the guarnator of the line of credit.

OJI financed its vehicle purchase with a note payable, secured by the vehicle.
OJI made monthly payments of $764, including interest at 6.9%. The final payment
was made in October, 2000.

NOTE J - SUBSEQUENT EVENTS

During January 2002, the Company received an aggregate of $150,000 for issuance
of 500,000 shares of common stock to a single non-related investor. The investor
also received an option to purchase an additional 500,000 shares of common stock
during a period of 3 years, to begin 6 months after the effectiveness of the
Company's registration statement at a price of 30% discount to the market price
of the common stock. Proceeds were used for working capital purposes.

In January 2002, the Company issued 50,000 warrants to a consultant of the
Company for services rendered, exercisable at $.333 per share through Janaury 1,
2007. One half of the warrants vest upon the filing of this registration
statement, the remaining half vests 10 days after shares of Company stock begins
trading.





                                      F-14
<PAGE>




Item 8.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
         FINANCIAL DISCLOSURE
         ---------------------------------------------------------------

On September 5, 2001, we decided to terminate our relationship with our
independent accountants, Stan J.H. Lee, CPA, and engaged Grant Thornton LLP as
our independent accountants to audit and report on our financial statements for
the period from June 2, 2000 to December 31, 2000. Our Board of Directors
approved this decision.

Stan Lee's reports since our formation on June 2, 2000 do not contain any
adverse opinion or a disclaimer of opinion, nor are they qualified or modified
as to uncertainty, audit scope or accounting principles.

Stan Lee was the beneficial owner of 14,700 shares of our common stock issued on
April 20, 2001 upon exercise of an option granted by Valesc NJ, a company we
acquired, pursuant to a consulting agreement between Valesc NJ and Stan Lee
dated March 2, 2001, for services rendered in connection with the acquisition.
Stan Lee's shares should have been cancelled following the acquisition because
Stan Lee continued as our independent auditor. On August 23, 2001, we cancelled
Stan Lee's shares pursuant to a Stock Cancellation Agreement between us and Stan
Lee.

For our first fiscal period ending December 31, 2000 and the interim period
through September 5, 2001, we did not have any disagreements with Stan Lee on
any matter of accounting principles or practices, financial statement
disclosure, or auditing scope or procedure, which disagreement(s), if not
resolved to the satisfaction of Stan Lee, would have caused Stan Lee to make a
reference to the subject matter of the disagreement(s) in connection with its
report.






                                      -21-
<PAGE>



For our first fiscal period ending December 31, 2000 and the interim period
through September 5, 2001, there were no reportable events with Stan Lee as
described in Item 304(a)(1)(iv)(B) of Regulation S-B.

At no time during our first fiscal period ending December 31, 2000 and the
interim period through September 5, 2001, and prior to engaging Grant Thornton,
did we consult Grant Thornton regarding (i) the application of accounting
principles to a specified transaction, either completed or proposed, or the type
of audit opinion that might be rendered on our financial statements, or (ii) any
matter that was the subject of a disagreement as defined in paragraph
304(a)(1)(iv)(A) of Regulation S-B and the related instructions or a reportable
event described in paragraph 304(a)(1)(iv)(B).

                                    PART III

Item 9.  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
         COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
         --------------------------------------------------------------

DIRECTORS AND EXECUTIVE OFFICERS

The following are the names, ages and current positions of each of our directors
and executive officers:

NAME                    AGE         POSITION
----                    --           --------
Jeremy Kraus            26          Director, Chairman of the Board of
                                    Directors and Chief Executive Officer

Samuel Cohen            25          Director and President (and acting chief
                                    financial and accounting officer)

Garrett Miller          24          Director and Vice President
-
Harry Kraus             46          President of OJI

The following is a description of the qualifications and experience of each of
our current directors and executive officers:

Jeremy Kraus is the Chairman of the Board of Directors and Chief Executive
Officer and has served in this capacity since October 2000. Prior to this
appointment, Mr. Kraus served as Chairman and Chief Executive Officer of
Jeremy's MicroBatch Ice Creams for approximately three years. Mr. Kraus is a
1998 graduate of the Wharton School of the University of Pennsylvania, where he
received a B.S. in economics. Apart from his work with MicroBatch, Mr. Kraus did
not have significant business experience prior to graduation.



                                      -22-
<PAGE>


Samuel Cohen is a Director and the President of the Company and has served in
this capacity since October 2000. Prior to this appointment, Mr. Cohen served as
Chief Operating Officer of Jeremy's MicroBatch Ice Creams for approximately two
years and as a Product Design Consultant for Rosenbluth International for two
years. Mr. Cohen is a 1998 graduate of the Wharton School of the University of
Pennsylvania, where he received a B.S. in economics. Apart from his work with
MicroBatch and Rosenbluth, Mr. Cohen did not have significant business
experience prior to graduation.

Garrett Miller is a Director and the Vice President of the Company and has
served in this capacity since October 2000. Prior to this appointment, Mr.
Miller served as management data contact for Mount Lucas Management, a hedge
fund in Princeton, New Jersey, for approximately one year, and in 2000 Mr.
Miller was a member of the U.S. Olympic Rowing Team that competed in Sydney,
Australia. Mr. Miller is a 1999 graduate of the Wharton School of the University
of Pennsylvania, where he received a B.S. in economics. Mr. Miller did not have
significant business experience prior to graduation.

Harry Kraus is the President of OJI, and is responsible for all of our sales
efforts. Mr. Kraus served in this capacity from the founding of OJI in 1988 to
the present. Prior to founding OJI, Mr. Kraus served as a sales agent for the
State of Oregon for Howmedica for two years. From 1984 to 1986, he served as
product manager for Porous-Coated Knee Systems for Howmedica in Rutherford, New
Jersey. From 1990 to 1999 Mr. Kraus served as a director of Acumed, Inc., a
medical device manufacturer that is currently our primary supplier. In 1999,
Acumed was sold to the Marmon Group in a private transaction. From 1978 to 1984,
Mr. Kraus held a variety of corporate sales positions at Howmedica and I.B.M.,
both in Los Angeles, California. He is a 1978 graduate of San Jose State
University, where he received a B.S. in Business Administration.

Harry Kraus, the President of OJI, is the uncle of Jeremy Kraus, our Chief
Executive Officer.

Directors serve until the next annual meeting or until their successors are
qualified and elected. Officers serve at the discretion of the Board of
Directors.



                                      -23-
<PAGE>


During the past five years, none of our directors or executive officers has:

     (1)  been general partner or executive officer of a business at the time a
          bankruptcy petition was filed by, or against it, or a receiver, fiscal
          agent or similar officer was appointed by a court for it or its
          property;

     (2)  been convicted in a criminal proceeding and are not currently a named
          subject of a pending criminal proceeding (excluding traffic violations
          and other minor offenses);

     (3)  been subject to an order, judgment or decree, permanently or
          temporarily enjoining, barring, suspending or otherwise limiting their
          involvement in any type of business, securities or banking activities;
          or

     (4)  been found by a court of competent jurisdiction (in a civil action),
          the Securities and Exchange Commission, or the Commodity Futures
          Trading Commission, to have violated a federal of state securities or
          commodities law.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities Exchange Act of 1934, as amended, requires the
Company's directors, executive officers and holders of more than 10% of the
common stock to file with the Securities and Exchange Commission initial reports
of ownership on Form 3, reports of changes in ownership on Form 4 and annual
reports of ownership on Form 5. As of April 2, 2002, we will be up-to-date with
our filing of Form 5.

The Company believes that during the period from March 22, 2001 (the date on
which the Company's current directors, executives and 10% holders first became
subject to Section 16(a)) until April 1, 2002, the Company's directors,
executives and 10% holders were delinquent in their required Section 16(a)
filings. Specifically, the following persons failed to timely file the reports
listed below:



                                      -24-
<PAGE>

<TABLE>
<CAPTION>


NAME AND 16(a)                          REPORTS NOT FILED                       TRANSACTIONS NOT
STATUS                                                                          REPORTED
--------------                          -----------------                       ------------------

<S>                                     <C>                                     <C>
Jeremy Kraus                            Form 3                                  Indirect ownership of
Director, Officer and 10%                                                       4,227,792 shares of
Holder                                                                          common stock as of March
                                                                                22, 2001

                                        Form 4                                  Indirect ownership of
                                                                                22,610 shares of common
                                                                                stock as of December 17,
                                                                                2001

                                        Form 4                                  Direct ownership of
                                                                                options to purchase
                                                                                100,000 shares of common
                                                                                stock as of January 1, 2002

Samuel Cohen                            Form 3                                  Indirect ownership of
Director, Officer and 10%                                                       2,113,896 shares of
Holder                                                                          common stock as of March
                                                                                22, 2001

                                        Form 4                                  Indirect ownership of
                                                                                11,305 shares of common
                                                                                stock as of December 17,
                                                                                2001

                                        Form 4                                  Direct ownership of
                                                                                options to purchase
                                                                                100,000 shares of common
                                                                                stock as of January 1, 2002

Garrett Miller                          Form 3                                  Indirect ownership of
Director, Officer and 10%                                                       1,056,961 shares of
Holder                                                                          common stock as of March
                                                                                22, 2001

                                        Form 4                                  Indirect ownership of 5,639
                                                                                shares of common stock as
                                                                                of December 17, 2001

                                        Form 4                                  Direct ownership of
                                                                                options to purchase
                                                                                100,000 shares of common
                                                                                stock as of January 1, 2002

Harold Kraus                            Form 3                                  Indirect ownership of
Officer and 10% Holder                                                          338,320 shares of common
                                                                                stock as of March 22, 2001

                                        Form 4                                  Direct ownership of
                                                                                warrants to purchase up to
                                                                                25,000 shares of common
                                                                                stock as of July 26, 2001

                                        Form 4                                  Direct ownership of
                                                                                warrants to purchase up to
                                                                                25,000 shares of common
                                                                                stock as of October 3, 2001

                                        Form 4                                  Indirect ownership of
                                                                                84,322 shares of common
                                                                                stock as of December 17,
                                                                                2001

Atlas Holdings Inc.                     Form 3                                  Direct ownership of
10% Holder                                                                      8,458,008 shares of
                                                                                common stock as of March
                                                                                22, 2001

                                        Form 4                                  Indirect ownership of
                                                                                45,220 shares of common
                                                                                stock as of December 17,
                                                                                2001
</TABLE>


As of April 1, 2002, the Company believes, based upon a review of the Form
5's furnished to the Company with respect to the year ended December 31, 2001,
to the best of its knowledge, that the foregoing directors, executives and 10%
holders are in compliance with the reporting requirements of Section 16(a).



                                      -25-
<PAGE>


Item 10.  EXECUTIVE COMPENSATION

The following table provides information relating to compensation for the period
from our formation on June 2, 2000 through December 31, 2000, and for the year
ended December 31, 2001, for each of our executive officers. The amounts shown
include compensation for services in all capacities provided to us.
<TABLE>
<CAPTION>

                                                     ANNUAL             LONG-TERM
                                                     COMPENSATION      COMPENSATION
                                                                          AWARDS
                                                     -------------     ------------
NAME AND                   PERIOD                      SALARY          SECURITIES        ALL OTHER
PRINCIPAL                                                              UNDERLYING       COMPENSATION
POSITION                                                               OPTIONS
---------                  --------                  -------------     -------------    -------------

<S>                        <C>                     <C>                 <C>               <C>
JEREMY KRAUS               10/24/00                  $14,000           --                --
Chief Executive            to 12/31/00(1)
Officer
                           1/1/01                    $50,000(3)        300,000(4)        --
                           to 12/31/01(2)

SAMUEL COHEN               10/24/00                  $14,000            --               --
President                  to 12/31/00(1)

                           1/1/01
                           to 12/31/01(2)            $50,000(3)        300,000(4)        --

GARRETT MILLER             1/1/01                    $50,000(3)        300,000(4)        --
Vice President             to 12/31/01(2)

WILLIAM TAY                6/2/00                       --                 --            --
(Chief Executive           to 12/31/00
Officer
prior to Merger)           1/1/01                       --                 --         $75,000(5)
                           to 3/22/01



                                      -26-
<PAGE>

<FN>

(1) Jeremy Kraus and Samuel Cohen began working for Valesc NJ upon its formation
on October 24, 2000.

(2) Our current executive officers were appointed in connection with the closing
of the merger on March 22, 2001. However, for services rendered prior to that
date, we have entered into employment agreements with each of our current
executive officers effective January 1, 2001. The terms of these agreements are
substantially identical. See "Item 10 - -EMPLOYMENT AND RELATED AGREEMENTS".

(3) As of December 31, 2001, all salary was accrued and unpaid, except $17,827
paid to Jeremy Kraus, $17,827 paid to Samuel Cohen, and $8,827 paid to Garrett
Miller.

(4) Options vest in three tranches of 100,000 shares each on December 31, 2001,
2002 and 2003. See "Item 10 --EMPLOYMENT AND RELATED AGREEMENTS".

(5) On March 2, 2001, Valesc NJ entered into an agreement with William Tay for
consulting services. See "Item 1 --HISTORICAL BACKGROUND." The agreement
provided for a total of $75,000 payable to Mr. Tay in installments from April
2001 through August 2001. To date we have paid approximately $50,000 under the
agreement and are continuing to make payments on the remaining amount.
</FN>
</TABLE>

EMPLOYMENT AND RELATED AGREEMENTS

Effective January 1, 2001, we entered into employment agreements with each of
our executive officers containing identical terms. The agreements may be
summarized as follows: (A) initial term of three years, with automatic one-year
renewal terms thereafter; (B) during each year of the first three years, each
executive shall receive: (i) during the first year, an annual base salary equal
to the greater of (a) $50,000 or (b) 2.5% of the total revenue of Valesc and its
subsidiaries for such year, up to a maximum of $150,000; (ii) during the second
year, an annual base salary equal to the greater of (a) $55,000 or (b) 2.5% of
the total revenue of Valesc and its subsidiaries for such year, up to a maximum
of $165,000; and (iii) during the third year, an annual base salary equal to the
greater of (a) $60,500 or (b) 2.5% of the total revenue of Valesc and its
subsidiaries for such year, up to a maximum of $181,500; (C) the Board of
Directors may consider one or more increases in the salary payable to the
executive in respect of any renewal term; (D) in the event we are not in a
position, due to our then-current financial situation, to make any salary
payment(s) to the executives, the unpaid salary shall accrue without interest;
and (E) all accrued and unpaid salary shall be immediately due and payable upon
the occurrence of any "change of control", defined as the sale of a controlling
interest in our capital stock to one or more buyers acting in concert, the sale
of all or substantially all of our assets, or any corporate merger or
consolidation resulting in one or more parties, who did not previously hold a
controlling interest in our capital stock, owning a controlling interest in our
capital stock or our successor entity; (F) the executives shall be eligible to
participate in bonuses awarded to senior management to the extent that such
bonuses are awarded or authorized by the Board of Directors from time to time.

                                      -27-


<PAGE>


Because compensation in the employment agreements is based, in part, on a
percentage of our revenue rather than net income, a possible conflict of
interest exists for our executives, since management decisions that increase
revenue in the short term may not be in the long term best interests of the
Company.

The total payments deferred pursuant to clause (D) above as of December 31, 2001
is $105,519.

In addition to the foregoing, each executive has been granted the option to
purchase a total of 300,000 shares of common stock in equal installments of
100,000 shares at the end of each year of employment. The options are
exercisable for a period of three years following the date of vesting, and the
exercise price is as follows: (i) $.25 per share for the 100,000 shares that
vest after the first year; (ii) $.50 per share for the 100,000 shares that vest
after the second year; and (iii) $.75 per share for the 100,000 shares that vest
after the third year. In the event the executive is terminated "without cause"
by us or the executive terminates his employment "for good reason", any options
then outstanding that have neither vested nor been terminated as of such date
shall vest and become subject to purchase by the executive.

Effective January 1, 2002 and in connection with our acquisition of OJI, OJI
entered into an employment agreement with its President, Harry Kraus. The
agreement provides as follows: (A) an initial term of one year, with automatic
one-year renewal terms thereafter; (B) a monthly salary of $10,800; (C) all
accrued and unpaid salary shall be immediately due and payable upon the
occurrence of any "change of control", defined as the sale of a controlling
interest in OJI's capital stock to one or more buyers acting in concert, the
sale of all or substantially all of our assets, or any corporate merger or
consolidation resulting in one or more parties, who did not previously hold a
controlling interest in OJI's capital stock, owning a controlling interest in
OJI's capital stock; and (D) the executive shall be eligible to participate in
bonuses awarded to senior management to the extent that such bonuses are awarded
or authorized by the Board of Directors of OJI from time to time.

INCENTIVE STOCK OPTIONS

Under our stock option incentive plan approved on April 1, 2001, directors and
executive officers may receive options to purchase our common stock. No options
may be granted at less than fair market value on the date of the grant. To date,
no options have been granted to our directors or executive officers under the
plan.



                                      -28-
<PAGE>




Item 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth information furnished to us with respect to the
beneficial ownership of our common stock by (i) each executive officer, director
and nominee, and by all directors and executive officers as a group, and (ii)
each beneficial owner of more than five percent of our outstanding common stock,
in each case as of March 15, 2002. Unless otherwise indicated, each of the
persons listed has sole voting and dispositive power with respect to the shares
shown as beneficially owned.

TITLE            NAME OF                   AMOUNT AND NATURE OF      PERCENT OF
OF CLASS         BENEFICIAL OWNER          BENEFICIAL OWNERSHIP      CLASS
--------         --------------------      --------------------      ----------

Common           Jeremy Kraus                   4,250,402*             41.6%
Stock            Chairman and Chief
                 Executive Officer

Common           Samuel Cohen                   2,125,201*             20.8%
Stock            President and
                 Director

Common           Garrett Miller                 1,062,600*             10.4%
Stock            Vice President
                 and Director

                                                ---------              -----
           Total (all directors and             7,438,203              72.8%
           executive officers as a group)

* Beneficially owned through (i) Atlas, which owns 82.8% of our common stock and
is owned 50% by Jeremy Kraus, our Chairman and Chief Executive Officer, 12.5% by
Garrett Miller, our Vice President and Director, and 25% by Samuel Cohen, our
President and Director, and (ii) SMT, which owns 2.6% of our common stock and is
owned 8.5% by Jeremy Kraus, 2.12% by Garrett Miller and 4.25% by Samuel Cohen
through Atlas

Item 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

On March 23, 2001, Edward Kraus loaned us $23,000 pursuant to a Debenture and
Warrant Purchase Agreement with an interest rate of 14%. The agreement provides
warrants for the purchase of up to 100,000 shares of common stock at $.10 per
share, exercisable until February 1, 2003. Edward Kraus is the father of Jeremy
Kraus, our Chairman and Chief Executive Officer.



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On July 26, 2001, Harry Kraus loaned us $10,000 pursuant to a Debenture and
Warrant Purchase Agreement with an interest rate of 14%. The agreement provides
warrants for the purchase of up to 25,000 shares of common stock at $.01 per
share, exercisable until February 1, 2003. On October 3, 2001, Harry Kraus
loaned us an additional $25,000 pursuant to a Debenture and Warrant Purchase
Agreement with an interest rate of 14%. The agreement provides warrants for the
purchase of up to 25,000 shares of common stock at $.33 per share, exercisable
until October 3, 2003. Harry Kraus, the President of OJI, is the uncle of Jeremy
Kraus, our Chairman and Chief Executive Officer.

On April 20, 2001, Milton and Golda Toorans loaned us $20,000 pursuant to a
Debenture and Warrant Purchase Agreement with an interest rate of 14%. The
agreement provides warrants for the purchase of up to 50,000 shares of common
stock at $.01 per share, exercisable until February 1, 2003. Milton and Golda
Toorans are the grandparents of Jeremy Kraus, our Chairman and Chief Executive
Officer.

We entered into employment agreements with each of our three executive officers
providing base salaries and options, and Harry Kraus entered into an employment
agreement with OJI. See "Item 10 --EMPLOYMENT AND RELATED AGREEMENTS."

On January 1, 2001, we entered into an agreement with Garrett Miller appointing
Mr. Miller as a director and providing compensation of $3,000 per month, a 4%
equity interest and a 10% commission to Mr. Miller, payable in cash or stock, on
total capital raised for us as a result of Mr. Miller's introductions. Mr.
Miller earned a total of $12,000 in commissions under the agreement. On March
22, 2001, Mr. Miller's commission earnings and remaining equity were exchanged
for a 12.5% equity interest in Atlas, and all commission arrangements with Mr.
Miller were eliminated. Atlas is also owned 50% by Jeremy Kraus, our Chairman
and Chief Executive Officer, 25% by Samuel Cohen, our President and Director,
and the remaining 12.5% is owned by approximately nine persons, four of whom are
related to Jeremy Kraus.

On March 2, 2001, Valesc NJ entered into an agreement with William Tay, our sole
director, officer and shareholder at the time, to compensate Mr. Tay for
consulting services in connection with the acquisition of Valesc NJ. See "Item 1
--HISTORICAL BACKGROUND." The agreement provided for a total of $75,000 payable
to Mr. Tay in installments from April 2001 through August 2001. To date we have
paid approximately $50,000 under the agreement and are continuing to make
payments on the remaining amount.




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On June 1, 1996, OJI entered into a manufacturer's representative agreement with
Acumed, Inc. The agreement has been renewed each year for one-year periods and
is currently in effect. The terms of the agreement are consistent with OJI's
other manufacturer's representative agreements. See "Item 1 --BUSINESS." Harry
Kraus, the President of OJI, served as a director of Acumed from 1990 to 1999.

As of March 15, 2002, Atlas owned 8,458,008 or 82.8% of our common stock. Atlas
is owned 50% by Jeremy Kraus, our Chairman and Chief Executive Officer, 12.5% by
Garrett Miller, our Vice President and Director, and 25% by Samuel Cohen, our
President and Director.

In connection with our formation on June 2, 2000 as NetCentral Capital Fund,
Inc., William Tay, our sole director, officer and shareholder at the time,
served as a promoter in exchange for 5,000,000 shares of common stock. This
amount was subsequently reverse split down to 277,237 shares. See "Item 1
--HISTORICAL BACKGROUND."

Item 13.  EXHIBITS AND REPORTS ON FORM 8-K

The Exhibits filed with this annual report are listed in the Index beginning on
page 33.

The Company filed the following reports on Form 8-K during the last quarter of
the year ended December 31, 2001:

         1. Form 8-K filed on December 21, 2001, reporting Item 2 (Acquisition
         or Disposition of Assets) in connection with the Company's purchase on
         December 17, 2001, of 100% of the capital stock of OJI Financial
         Statements of Business Acquired and Pro Forma Financial Information
         were filed by amendment to the Form 8-K on January 11, 2002.

         2. Form 8-K/A filed on October 10, 2001, amending the Company's report
         on Form 8-K dated March 22, 2001 to amend Item 7 to include restated
         financial statements. No other items in the registrant's report on Form
         8-K dated March 22, 2001 were amended. Restated Financial Statements
         and Pro Forma Financial Information included: (a) Financial statements
         of Valesc Inc. for the period from October 24, 2000 (inception) through
         December 31, 2000, (b) Pro Forma combined financial statements of
         Valesc Inc. and NetCentral Capital Fund, Inc. as of December 31, 2000
         and for the period from June 2, 2000 (the inception date of NetCentral
         Capital Fund, Inc.) through December 31, 2000.







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                                   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.

                                      VALESC INC.

                                      By: /s/ JEREMY KRAUS
                                      -----------------------------------
                                      Jeremy Kraus
                                      Chairman and Chief Executive Officer

                                      Date: April 1, 2002

         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.

Signature                  Title                              Date
-----------                -------                            ------


/s/ SAMUEL COHEN           Director and President             April 1, 2002
---------------------      (Chief Financial and
Samuel Cohen               Accounting Officer)


/S/ GARRETT MILLER         Director and                       April 1, 2002
---------------------      Vice President
Garrett Miller



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EXHIBIT INDEX AND FINANCIAL STATEMENT SCHEDULES

Index of exhibits required by Item 601 of Regulation S-B:

2.1  Merger Agreement dated as of March 21, 2001 between Valesc Inc. and
     NetCentral Capital Fund, Inc. (filed as part of the Company's Form 8-K
     filed on March 23, 2001 and incorporated herein by reference);

2.2  Share Purchase Agreement dated December 3, 2001 between Valesc Inc., SMT
     Enterprises Corporation and OJI Surgical, Inc. for the acquisition of OJI
     by Valesc (filed as part of the Company's Form 8-K filed on December 21,
     2001 and incorporated herein by reference);

3.1  Amended and Restated Certificate of Incorporation (filed as part of the
     Company's Form 8-K filed on March 23, 2001 and incorporated herein by
     reference);

3.2  Amended and Restated By-Laws (filed as part of the Company's Form 8-K filed
     on March 23, 2001 and incorporated herein by reference);

4.1  Second Amended and Restated Investment Agreement dated September 26, 2001,
     between the Company and Swartz Private Equity, L.L.C. (filed as part of the
     Company's Form SB-2/A filed on September 27, 2001 and incorporated herein
     by reference);

4.2  Amended Commitment Warrant to Purchase Common Stock between Valesc Inc. and
     Swartz Private Equity, L.L.C. with an issue date of April 24, 2001 (filed
     as part of the Company's Form SB-2/A filed on September 27, 2001 and
     incorporated herein by reference);

4.3  Amended and Restated Registration Rights Agreement between Valesc Inc. and
     Swartz Private Equity, L.L.C., dated as of September 26, 2001 (filed as
     part of the Company's Form SB-2/A filed on September 27, 2001 and
     incorporated herein by reference);

10.1 2001 Stock Option Plan (filed as part of the Company's Form S-8 filed April
     6, 2001 and incorporated herein by reference);

10.2 Amended and Restated Employment Agreement between Valesc Inc. and Jeremy
     Kraus dated January 1, 2002 (filed as part of the Company's Form SB-2 filed
     on January 11, 2002 and incorporated herein by reference);

10.3 Amended and Restated Employment Agreement between Valesc Inc. and Samuel
     Cohen dated January 1, 2002 (filed as part of the Company's Form SB-2 filed
     on January 11, 2002 and incorporated herein by reference);

10.4 Amended and Restated Employment Agreement between Valesc Inc. and Garrett
     Miller dated January 1, 2002 (filed as part of the Company's Form SB-2
     filed on January 11, 2002 and incorporated herein by reference);

10.5 Amended and Restated Employment Agreement between OJI Surgical, Inc. and
     Harry Kraus dated January 1, 2002 (filed as part of the Company's Form SB-2
     filed on January 11, 2002 and incorporated herein by reference);

10.6 Manufacturer's Representative Agreement dated June 1, 1996, as amended,
     between OJI Surgical, Inc., and Acumed, Inc. (filed as part of the
     Company's Form SB-2 filed on January 11, 2002 and incorporated herein by
     reference);

10.7 Sales Representative Agreement dated July 1, 2000, between Harry Kraus, as
     representative, and Smith & Nephew, Inc. (filed as part of the Company's
     Form SB-2 filed on January 11, 2002 and incorporated herein by reference);

10.8 Sales Representative Agreement dated July 2, 2000, between Harry Kraus, as
     representative, and Smith & Nephew Orthopaedics (filed as part of the
     Company's Form SB-2 filed on January 11, 2002 and incorporated herein by
     reference);

16.1 Letter from Stan J.H. Lee, CPA (filed as part of the Company's Form 8-K/A
     filed on September 21, 2001 and incorporated herein by reference);

21.1 Subsidiaries.




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