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

                                   FORM 10-KSB/A

[ 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

         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.




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         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 ]

         The registrant hereby files this report on Form 10-KSB/A to amend its
Annual Report on Form 10-KSB for the year ended December 31, 2001 to amend Item
6. No other items in the registrant's Annual Report on Form 10-KSB for the year
ended December 31, 2001 are amended.

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.

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)
                                            ========               ========




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REVENUE

OJI's revenues declined from $480,960 for the year ended December 31, 2000 to
$259,492 for the current period. Approximately one-half of the decline was the
result of less commission income, principally due to our sales force having been
reduced to one person (Harry Kraus), thus resulting in lesser marketing,
solicitation of customers and potential customers and less sales of all of the
products we represent. Approximately one-half of the decline in revenues
resulted primarily from our decision to cease providing complementary
reconditioning and repair service for our products and the products of our
competitors, and the attendant reduction in sales staff associated with this
elimination of services. 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
from the same reasons discussed above as to revenue. However, our gross profit
margins improved due to the greater profitability of the manufacturer's
representation area of OJI's business (primarily a net commission revenue, with
no commissions currently paid to sales persons) compared with the repair and
reconditioning complimentary service conducted in 2000 and early 2001, which
carries a lower gross profit margin.

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. Costs have been reduced to the lowest
sustainable levels, as there was only one employee (Harry Kraus) serving in a
sales/executive capacity at a fixed salary until such time as we can hire
additional sales people and create a fixed and variable-cost compensation plan
for such sales people.

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)
                               =========                   ===========




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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.

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.




                                      -4-
<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.

$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.




                                      -5-
<PAGE>


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.

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.




                                      -6-
<PAGE>


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;
(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;



                                      -7-
<PAGE>


- - 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.

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.

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.



                                      -8-
<PAGE>


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.




                                      -9-
<PAGE>






                                   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: May 22, 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             May 22, 2002
----------------------      (Chief Financial and
Samuel Cohen               Accounting Officer)


/s/ Garrett Miller        Director and                       May 22, 2002
----------------------      Vice President
Garrett Miller







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