U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                   FORM 10-KSB

                 ANNUAL REPORT UNDER SECTION 13 OR 15 (d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                   For the fiscal year ended December 31, 2001

                        Commission file number 333-62690

                                 CYBERADS, INC.
                                 --------------
                 (Name of Small Business Issuer in its Charter)

                  Florida                                    65-1000634
                  -------                                    ----------
   (State or Other Jurisdiction of                        (I.R.S. Employer
    Incorporation or Organization)                      Identification No.)

           6001 Park of Commerce Boulevard, Boca Raton, Florida 33487
           ----------------------------------------------------------
               (Address of Principal Executive Offices) (Zip Code)

                                 (561) 338-9399
                                 --------------
                           (Issuer's Telephone Number)

              Securities registered under Section 12(b) of the Act:
          Title of Each Class Name of Each Exchange on Which Registered
          -------------------------------------------------------------
                                      None

         Securities registered under Section 12(g) of the Exchange Act:
                         Common Stock, $.0001 par value
                         ------------------------------
                                (Title of Class)

Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15 (d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes [X] No [ ]

Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure will be contained, to
the best of the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB. [X]

State issuer's revenues for its most recent fiscal year. $4,968,550

State the aggregate market value of the voting stock held by non-affiliates
computed by reference to the price at which the stock was sold, or the average
bid and asked prices of such stock, as of a specified date within the past 60
days. ($2.45 as of April 2, 2002) $18,294,828.65

                   (APPLICABLE ONLY TO CORPORATE REGISTRANTS)

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: April 2, 2002: 13,758,777 Shares of
Common Stock.

                       DOCUMENTS INCORPORATED BY REFERENCE

- None -

Transitional Small Business Disclosure Format (Check One)  Yes  [ ]    No  [X]
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                                Table of Contents
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PART I

Item 1.       Description of Business                                              1
Item 2.       Description of Property                                              9
Item 3.       Legal Proceedings                                                    9
Item 4        Submission of Matters to a Vote of Security Holders                  9

PART II

Item 5.       Market for Common Equity and Related Stockholder Matters            10
Item 6.       Management's Discussion and Analysis or Plan of Operation           13
Item 7.       Financial Statements                                                16
Item 8.       Changes in and Disagreements With Accountants on Accounting and
              Financial Disclosure                                                17

PART III

Item 9.       Directors, Executive Officers, Promoters and Control Persons;
              Compliance With Section 16(a) of the Exchange Act                   17
Item 10.      Executive Compensation                                              19
Item 11.      Security Ownership of Certain Beneficial Owners and Management      22
Item 12.      Certain Relationships and Related Transactions                      24
Item 13.      Exhibits, Lists and Reports on Form 8-K                             26
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PART I

Item 1.  Description of Business

Summary

         Organized under the laws of the State of Florida on April 12, 2000,
CyberAds, Inc. initially compiled member lists through an Internet-based opt-in
e-mail list found on our website "www.sportsforcash.com." "Internet-based opt-in
e-mail" creates member lists by requiring website visitors to provide us with
certain personal information and consent to receiving e-mails from our company
in order to gain access to our website. Our goal was to sell the member lists to
direct marketers seeking to target promotional campaigns to large groups of
people via electronic mail. We initially had the concept of awarding prizes to
attract potential members to our website www.sportsforcash.com. However, we
terminated our prize program after determining that our business model was not
profitable. This segment of our operations has been recently discontinued.

         In December 2000 we began utilizing member lists internally through our
wholly-owned subsidiary, IDS Cellular, Inc. to market cellular phone services.
When we began generating revenues from our cellular phone marketing services, we
decided to focus exclusively on this line of business. We started an affiliate
program to expand our potential customer base. Our affiliate program works by
paying participating third party websites commissions for referring cellular
phone customers to our "idscellular.com" website. A third party website will
receive a commission if a customer it refers to us purchases a cellular phone or
cellular services.

         All of our revenues are derived from our cellular phone marketing
services. Our business now focuses exclusively on marketing cell phone services
to potential consumers we are introduced to through our affiliate program and
other third party telemarketing services.

Background and History

         We were incorporated under the laws of the State of Florida in April
2000. Our wholly owned subsidiary, IDS Cellular, Inc., which we acquired through
a stock purchase effective December 31, 2000, was formed in December 2000 under
the laws of the State of Florida.

         Our executive offices are located in Boca Raton, Florida and our
telephone number is (561) 338-9399.

Strategy

         Our goal is to become a leader in direct marketing and sales on the
Internet. We currently focus our marketing efforts exclusively towards the
marketing and sale of cellular telephones and services. With our recent increase
in revenues and third party financing, we intend to implement our strategy
through the following:

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         o        Expand Affiliate Program. By offering participating third
                  party websites commissions for directing potential customers
                  to our website, we believe our affiliate program will continue
                  to supply us with a substantial customer base.

         o        Developing Additional Marketing Plans. Depending on the
                  success of our cellular phone business, we may offer
                  additional product or service lines using our affiliate
                  program.

IDS Cellular Overview

         Our subsidiary, IDS Cellular, markets cellular phone services and plans
to consumers. Our cellular phone services are marketed through an affiliate
program. We attract third party websites to become part of our affiliate program
by offering commissions for sales of cell phones and cell phone services in
which they initiated the contact with the consumer. A website becomes an
affiliate of our company by placing IDS Cellular advertising materials and
banners on their websites. These advertisements and banners promote our cellular
phone services. When a consumer on an affiliate's site clicks on our banner or
advertising they are directed to idscellular.com.

         When a visitor enters our idscellular.com website, they are asked to
provide personal credit information in order to qualify for a cellular phone
service. In addition, this information determines whether the visitor is in a
coverage area for any of the cell phone carriers that we refer applicants to.
Once a coverage area is determined, the applicant will choose a respective
calling plan and telephone. If the consumer provides this information, it is
delivered to our executive offices where it is processed and a credit check is
made. Depending on the consumer's credit history, the application is either
approved or denied. An approved application is then further processed and
directed to one of the carriers with whom we are associated. We currently have
access to the following cell phone carriers:

         AT&T Wireless
         MCIWorldCom Wireless
         Triton PCS (SunCom)
         Telecorp PCS (SunCom)
         Alltel Communications

         We have not had any material problems with the services of the above
carriers. We believe that we have access to enough carriers that the loss of any
carrier would not materially effect our business.

         The above service providers have distinct standards and qualifications
regarding the credit history of individuals in which they will provide services.
We attempt to match a consumer's credit history with a service provider that
will provide services to the individual and forward the applicant's information
to the potential carrier's credit service. If the applicant is approved by any
carrier credit service, we contact the consumer directly to verify his order. We
then activate and ship the telephone

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to the consumer. The consumer will receive a bill for the telephone and service
within 30-45 days of delivery.

IDS Cellular Operations

         Third Party Suppliers

         IDS Cellular entered into agreements with American Cellular Inc. and GT
Global Communications, Inc., two companies that are licensed to sell AT&T and
MCI WorldCom Wireless products and services, respectively. When either of these
two companies activates and delivers an AT&T or MCI WorldCom Wireless cellular
phone they are paid approximately $100 or more by AT&T or MCI WorldCom Wireless
depending on the calling plan that is purchased by the consumer. Through our
agreements with American Cellular and GT Global Communications, Inc. we receive
between $65 and $75 per cellular telephone customer from these two companies.
AT&T and MCI WorldCom Wireless are available in most major metropolitan areas
and across the United States.

         IDS Cellular has also entered into an agreement with Beck Management,
Inc., a company licensed to sell Sprint cellular services. Whenever we provide
Beck Management with a cellular phone customer we receive between $67 and $350,
depending on the services and/or equipment purchased by the customer.

         Direct Suppliers

         On September 25, 2001, IDS Cellular entered into a sales agency
agreement with MCI WorldCom Wireless under which we have agreed to market MCI
WorldCom Wireless' services as an independent authorized agent. Whenever we
provide MCI WorldCom Wireless with a subscriber, we receive commissions between
$125 and $285 based on the rate of the plan sold. In addition, we will receive
activation bonuses based on monthly subscriber activations achieved.

         On July 9, 2001, IDS Cellular entered into a sales agency agreement
with Triton PCS Operating Carrier L.L.C., a carrier of SunCom cellular services
under which we have agreed to market SunCom Wireless services as an independent
authorized agent. Whenever we provide SunCom Wireless with a subscriber, we
receive commissions between $75.00 and $175.00 based on the rate of the plan
sold. In addition, we will receive activation bonuses based on monthly
subscriber activations achieved.

         On September 19, 2001, IDS Cellular entered into a sales agency
agreement with Alltel Communications, Inc. under which we have agreed to market
Alltel Wireless services as an independent authorized agent. Whenever we provide
Alltel Wireless with a subscriber, we receive commissions between $125.00 and
$275.00 based on the rate of the plan sold. In addition, we will receive
activation bonuses based on monthly subscriber activations achieved.

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         On August 10, 2001, IDS Cellular has entered into a sales agency
agreement with Telecorp & Tritel Communications, Inc., a carrier of SunCom
cellular services under which we have agreed to market SunCom Wireless services
as an independent authorized agent. Whenever we provide SunCom Wireless with a
subscriber, we receive commissions between $50.00 and $125.00 based on the rate
of the plan sold. In addition, we will receive activation bonuses based on
monthly subscriber activations achieved.

         In addition, on September 26, 2001, IDS Cellular has entered into a
sales agency agreement with AT&T Wireless under which we have agreed to market
AT&T services as an independent authorized agent. Whenever we provide AT&T with
a subscriber, we receive commissions between $30.00 and $155.00 based on the
rate of the plan sold. In addition, we will receive activation bonuses based on
monthly subscriber activations achieved.

Customer Base

         The majority of our potential customers are identified through our
affiliate program. To build our potential consumer base, we started an affiliate
based marketing program which allows other Internet based businesses to refer
potential consumers to our IDS Cellular website, idscellular.com. If a customer
purchases and receives cellular phone service, the affiliate whom provided the
referral will receive a commission from the sale. All visitors and sales are
tracked through an administration portion of our site. Each affiliate has their
own linking code to track their statistics. We presently have approximately
1,000 affiliates. Affiliate websites include, but are not limited to, the
following:

         JobsOnline.com
         DirectStuff.com
         360i.com
         WebClients.net
         Lifeminders.com
         Euniverse.com
         YouWinIt.com
         Jackpot.com

         There are no contractual obligations under our affiliate program and we
have not entered into written contracts with our affiliates. Third party
websites elect to join our affiliate program by submitting to us an e-mail
information form found on our idscellular.com website. Upon submitting the form
via e-mail, the third party website receives a banner to place on its website
describing our services and linking our services to its website. The affiliate
will receive a commission for each sale initiated through the banner on its
website. Commissions are paid to our affiliates on a monthly basis, 20 days
after the month's end.

         If a consumer purchases a service agreement through AT&T, the website
affiliate subsequently receives a commission ranging from $35 to $60. If the
consumer purchases a service

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agreement through MCI WorldCom Wireless, Telecorp PCS, Alltel or SunCom, the
website affiliate subsequently receives a commission ranging from $12.50 to $30.

         Since we derive the majority, if not all of our customers, from our
affiliate program, commissions paid will continue to be a material cost for our
company. We have historically paid high commissions in order to attract websites
to our affiliate program.

         Since inception through March 31, 2001 our affiliate referrals were
responsible for sending approximately 1,683,330 visitors to our website and
generating deliveries of 4,762 cellular phones. From January 1, 2001 through
September 30, 2001 referrals resulted in approximately 11,500,032 visitors to
our website with deliveries of 18,819 phones. From October 1, 2001 through
January 1, 2002 referrals resulted in approximately 5,207,605 visitors to our
website with deliveries of 16,920 phones.

         IDS Cellular also generates business through telemarketing. We have
entered into a one year agreement with Regal Marketing International, Inc., a
telemarketing company. The agreement is terminable on 30 days written notice. We
pay commissions to this telemarketing company on a delivered phone sale basis,
the same way as our Internet affiliate program.

Cellular Phone Inventory

         We maintain an inventory of cellular phones to be distributed in
connection with our AT&T and SunCom plans. We purchase cellular phones directly
from American Cellular, Inc. for AT&T and we purchase directly from Triton PCS
for SunCom. We ship these phones directly to consumers once the consumer
verifies that they have accepted the order placed with either AT&T or SunCom.

Agreements and Access to Carriers

         We rely on relationships with several companies that are licenced to
sell cellular services and products. We have entered into agreements with these
companies as summarized below. If any of these agreements are terminated our
business may be detrimentally affected.

         American Cellular, Inc. On November 1, 2000, we entered into an
agreement with American Cellular, Inc. to market and provide MCI WorldCom
Wireless cellular phone services to potential customers. Under our agreement
with American Cellular, Inc. we shall receive 65% of the commissions paid by MCI
WorldCom Wireless to American Cellular, Inc. in connection with new cellular
customers. Our agreement with American Cellular, Inc. is terminable at will by
either party. Lawrence Levinson, our majority shareholder and CEO, is a
shareholder of American Cellular. In addition, American Cellular's majority
shareholder is a minority shareholder in our company.

         GT Global Communications, Inc. On December 1, 2000, we entered into an
agreement with GT Global Communications, Inc. to market and provide AT&T
cellular phone services to potential customers. Under our agreement with GT
Global Communications, Inc. we shall receive 75% of the

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commissions paid by AT&T to GT Global Communications, Inc. in connection with
new cellular customers. Our agreement with GT Global Communications, Inc. is
terminable at will by either party.

         Beck Management, Inc. On April 23, 2001, we entered into an agreement
with Beck Management, Inc., a company licensed to sell Sprint cellular services.
Whenever we provide Beck Management with a cellular phone customer we receive
between $67 and $350, depending on the services and/or equipment purchased by
the customer. This fee equals approximately 66% of the total commission paid by
Sprint to Beck Management. Our agreement with Beck Management is terminable by
either party upon 30 days written notice.

         Triton PCS Operating Carrier LLC (SunCom). On July 9, 2001, we entered
into an electronic commerce marketing agreement with Triton PCS Operating
Carrier LLC to market SunCom cellular products and services. The term of this
agreement is for a period of one year commencing on July 9, 2001. Under this
agreement we shall receive a fulfillment fee of between $75 and $150 whenever we
provide Triton PCS with a cellular phone customer. In addition, if we exceed 400
sales per month we will receive an additional $25 per sale.

         MCI WorldCom Wireless. On September 25, 2001, we entered into a sales
agency agreement with MCI WorldCom Wireless to market MCI WorldCom Wireless'
services as an independent authorized agent. The term of the agreement is for
one year commencing on September 25, 2001. Either party may terminate this
agreement with or without cause at any time upon 90 days written notice. Under
the agreement we receive initial commissions based on the amount of the monthly
access charges of the rate plan that we sell to a subscriber. These commissions
range from $125 to $285 per subscriber. In addition, we are entitled to
activation bonuses based on monthly net subscriber activation achieved. This
agreement with MCI WorldCom Wireless provides us with direct access to a
cellular service provider.

         Alltel Communications, Inc. On September 19, 2001, we entered into an
electronic commerce marketing agreement with Alltel Communications, Inc. to
market SunCom cellular products and services. The term of this agreement is for
a period of one year commencing on September 19, 2001. Under this agreement we
shall receive a fulfillment fee of between $75.00 and $150.00 whenever we
provide Alltel with a cellular phone customer. In addition, if we exceed 100
sales per month we will receive an additional $50 per sale.

         Telecorp & Tritel Communications, Inc. On August 10, 2001, we entered
into an electronic commerce marketing agreement with Telecorp & Tritel
Communications, Inc. to market SunCom cellular products and services. The term
of this agreement is for a period of one year commencing on August 10, 2001.
Under this agreement we shall receive a fulfillment fee of between $50.00 and
$125.00 whenever we provide Telecorp & Tritel with a cellular phone customer. In
addition, if we exceed 100 sales per month we will receive an additional $50 per
sale.

         AT&T Wireless. On September 26, 2001, we entered into an electronic
commerce marketing agreement with AT&T Wireless to market AT&T cellular products
and services. The term of this

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agreement is for a period of one year commencing on September 26, 2001. Under
this agreement we shall receive a fulfillment fee of between $30.00 and $155.00
whenever we provide AT&T with a cellular phone customer. In addition, if we
exceed 100 sales per month we will receive an additional $50 per sale.

Related Parties and Reliance on Certain Cellular Providers

         We relied on four and two cellular telephone providers for
approximately 78% and 100% of sales for the year ended December 31, 2001 and for
the period from our inception to December 31, 2000, respectively. At December
31, 2001 and 2000 accounts receivable from those customers totaled $2,013,400
and $47,508, respectively.

         During 2000, we received 100% our revenue from American Cellular and GT
Global. Our chief executive officer is a minority shareholder of American
Cellular. During the year ended December 31, 2001 MCI Worldcom, AT&T Wireless,
GT Global and SunCom were collectively responsible for 78% of our revenues.

Factoring Plan

         On October 17, 2001 we entered into a nine month master factoring
agreement with Rockland Credit Financial LLC. The master factoring agreement was
subsequently terminated on January 15, 2002, when the master factoring agreement
was assumed by Webbank, a Utah industrial loan corporation. We entered into a
new master factoring agreement with Webbank on January, 15, 2002 under
materially the same terms as our initial agreement with Rockland. Under the
terms of the agreement we may assign our weekly accounts receivable to Webbank
and receive immediate payment equal to 50% of the weekly accounts receivable.
When Webbank collects the assigned accounts receivable we receive the remaining
balance on our weekly accounts receivable assigned to Webbank minus a discount
ranging from 1.75% to 6.75% based on days elapsed between the initial assignment
and Webbank's collection of the assigned weekly accounts receivable. Under the
agreement we are obligated to factor $50,000 of our accounts receivable per
month. In connection with the agreement we have granted Webbank a security
interest in the following collateral: accounts receivable, inventory and
computer equipment. In addition, we have granted Webbank a security interest in
the proceeds from the sale of the above collateral. Through December 31, 2001 we
factored approximately $547,000 of our accounts receivable.

Recent Events

         We recently formed a new subsidiary, CYAD Cellular Distributors, which
commenced operations on January 25, 2002. CYAD Cellular Distributors was formed
to purchase cellular phones and accessories and resell them to dealers in the
United States and dealers and carriers outside the United States. We own 80% of
CYAD. The remaining interested is owned by 2 unrelated individuals.

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Competition

         The market for cellular phone marketing services is characterized by
intense price competition. We compete with numerous well-established retailers,
carriers, wholesale distributors and suppliers of cellular products and
services, including AT&T, MCI WorldCom Wireless and MCI World Com. Substantially
all of our competitors market the same or similar services directly to our
customers and most have the financial resources to withstand substantial price
competition and implement extensive advertising and promotional programs. In
recent years, the price for services that we and our competitors have been able
to charge customers has decreased, primarily as a result of lower costs and
greater competition in the industry. We believe that significant price base
competition will continue to exist for the foreseeable future. The cellular
service industry is characterized by low barriers to entry. Our ability to
continue to compete successfully will be largely dependent on our ability to
maintain and establish relationships with carriers such as AT&T, MCI WorldCom
Wireless and SunCom.

         The Internet, in general, and our e-messaging solutions in particular,
also must compete for a share of advertisers' total advertising budgets with
traditional advertising media such as television, radio, cable and print.
Consequently, we compete with advertising and direct marketing agencies. To the
extent that e-messaging is perceived to be a limited or ineffective advertising
medium, companies may be reluctant to devote a significant portion of their
advertising budget to our e- messaging solutions, which could limit the growth
of e-messaging and negatively affect our business.

Trademarks and Patents

         We do not hold any trademark, copyright or patent protection.

Government Regulation

         At present, there are no specific regulations or approvals required by
or from the Federal Government or state agencies for marketing the cellular
services we offer. We are aware no proposed regulations that may have effect
upon our business as a seller of cellular phone services.

         Laws and regulations that apply to Internet communications, commerce
and advertising are becoming more prevalent. These regulations could affect the
cost of communicating on the Internet and negatively affect the demand for our
direct marketing solutions or otherwise harm business. Laws and regulations may
be adopted covering issues such as user privacy, pricing, libel, acceptable
content, taxation, and quality of products and services. This legislation could
hinder growth in the use of the Internet generally and decrease the acceptance
of the Internet as a communications, commercial, and direct marketing medium.

         The laws governing the Internet remain largely unsettled, even in areas
where there has been some legislative action. It may take years to determine
whether and how existing laws apply to the Internet and Internet advertising. In
addition, the growth and development of the market for Internet

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commerce may prompt calls for more stringent consumer protection laws, both in
the United States and abroad. This may impose additional burdens on companies
conducting business over the Internet.

Employees

         We currently employ 75 people, all of whom are full-time employees, in
the following capacities: 3 executive officers, 8 administrative and management
employees and 64 sales and marketing persons. Our employees are not represented
by a collective bargaining unit. We believe relations with our employees are
good.

Item 2.  Description of Property

         On April 6, 2002 we relocated all of our operations to a 20,000 square
foot facility located at 6001 Park of Commerce Blvd., Boca Raton, Florida. This
property is leased from 6001, LLC. This new facility enables us to consolidate
all of our operations under one facility. All cellular phone activations and
shipping, which historically have taken place in three separate locations, are
consolidated to this facility. The term of the lease is through April 1, 2005.
We pay approximately $16,667 per month for the first year of the lease, $18,333
per month for the second year of the lease and $20,000 per month for the third
year of the lease.

         We lease approximately 1,300 square feet of office space in Boca Raton,
Florida from International Dialing Services, Inc., an affiliated company. The
offices also houses our servers and IT operations. The lease term is through
July 30, 2002. We currently occupy this space for approximately $975 per month.

         Commencing August 2, 2001, we entered into a 3 year lease agreement for
our corporate offices in Boca Raton. We leased this space for $5,991.65 per
month. The lease was terminated effective April 6, 2002. This space was used as
our executive offices.

         Commencing April 2001, we entered into a sublease agreement with
International Dialing Services, Inc. for additional office space located in Boca
Raton, Florida. We subleased this office space under an oral agreement for
$1,500.00 per month. This space is used for our cellular phone services
division. The lease agreement terminated on April 1, 2002.

Item 3.  Legal Proceedings

         We are not a party to any material legal proceeding, nor are any of our
officers, directors or affiliates currently a party in any legal proceeding
adverse to our company.

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

         None.

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PART II

Item 5.  Market for Common Equity and Related Stockholder Matters

Market for Common Equity

         Our shares of common stock commenced trading on the OTC Bulletin Board
on December 20, 2001 under the symbol "CYAD." Our closing price on April 2, 2002
was $2.45. From December 20, 2001 through April 30, 2002 the closing price of
our common stock has reached a high of $4.00 and a low of $.75. 13,201,102 of
our 13,758,777 outstanding shares of common stock are defined as restricted
stock under the Securities Act. Of these shares, 6,291,500 shares are owned by
our affiliates, as that term is defined under the Securities Act.

         There are currently approximately 76 holders of record of our common
stock.

         We have never paid cash dividends on our common stock. We intend to
keep future earnings, if any, to finance the expansion of our business, and we
do not anticipate that any cash dividends will be paid for the foreseeable
future. The future dividend policy will depend on our earnings, capital
requirements, expansion plans, financial condition and other relevant factors.

Related Stockholder Matters

         Common Stock and Options

         On June 22, 2001, we issued Four Star Financial Services, LLC an option
to acquire 300,000 shares of our common stock. The underlying shares of common
stock are exercisable at $.50 per share until June 22, 2006. The underlying
shares contain demand registration rights. The option was issued in connection
with a loan provided by Four Star Financial Services, LLC. The option issued
contains a legend restricting its transferability absent registration or
available exemption. The option was issued under the exemption from registration
pursuant to Section 4(2) of the Securities Act. Four Star Financial Services,
LLC had access to information concerning our company and had the opportunity to
ask questions about our company.

         On September 9, 2001 we entered into an agreement with Dow Media, Inc.
under which Dow will provide our company management and organizational services.
Dow received a total of 90,000 shares of our stock in exchange for these
services. The contract requires Dow to provide these services for the 12-month
period ending September 9, 2002. The shares were not issued until subsequent to
our September 30, 2001 balance sheet. The shares were issued under an exemption
from registration pursuant to Section 4(2) of the Securities Act. The shares
issued contain a legend restricting their transferability absent registration or
an available exemption. Dow had access to information about our company and had
the opportunity to ask questions about our company.

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         On November 29, 2001, we entered into a consulting agreement with
Steven M. Krause for various advisory and consulting services concerning product
expansion and retrenchment, marketing consulting, strategic planning,
introductions to telecommunications carriers and related organizations,
evaluation and survey of our products and services in order to maintain market
share and market penetration, and review and advice regarding our overall
progress, needs and condition. The agreement commenced on November 29, 2001 and
will continue for a term of 12 months unless extended. In consideration for
current and prospective services, we issued to the consultant 200,000 shares of
common stock, options to purchase 500,000 shares of common stock exercisable at
$0.60 per share for a two-year term and options to purchase 200,000 shares of
common stock exercisable at $.80 per share for a two-year term. The securities
were issued under an exemption from registration pursuant to Section 4(2) of the
Securities Act. The securities issued contain a legend restricting their
transferability absent registration or an available exemption. The consultant
had access to information about our company and had the opportunity to ask
questions about our company.

         On January 5, 2002 we issued 50,000 shares of common stock and options
to purchase 50,000 shares of our common stock exercisable at $1.00 to Atlas
Pearlman, P.A. as consideration for legal services provided to our company. The
shares were issued under an exemption from registration pursuant to Section 4(2)
of the Securities Act. The shares issued contain a legend restricting their
transferability absent registration or an available exemption. Atlas Pearlman,
P.A. had access to information about our company and had the opportunity to ask
questions about our company.

         On January 6, 2002 we entered into a business consulting agreement with
Gene Foland, under which Mr. Foland will provide our company with business
consulting services. Mr. Foland received options to purchase 1,300,000 shares of
our common stock exercisable at $1.00 per share in exchange for these services.
The options are exercisable for a six month period commencing on the date of the
agreement. The options were issued under an exemption from registration pursuant
to Section 4(2) of the Securities Act. The options issued contain a legend
restricting their transferability absent registration or available exemption.
Mr. Foland had access to information about our company and had the opportunity
to ask questions about our company.

         On January 6, 2002 we entered into a product and sales development
consulting agreement with James L. Ricketts, under which Mr. Ricketts received
options to purchase 200,000 shares of our common stock exercisable at $1.00 per
share and options to purchase 1,100,000 shares of our common stock exercisable
at $2.00 per share in exchange for these services. The options are exercisable
for a six month period commencing on the date of the agreement. The options were
issued under an exemption from registration pursuant to Section 4(2) of the
Securities Act. The options issued contain a legend restricting their
transferability absent registration or available exemption. Mr. Ricketts had
access to information about our company and had the opportunity to ask questions
about our company.

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         On January 6, 2002 we entered into a product and sales development
consulting agreement with James L. Copley, under which Mr. Copley received
options to purchase 300,000 shares of our common stock exercisable at $2.00 per
share in exchange for these services. The options are exercisable for a six
month period commencing on the date of the agreement. The options were issued
under an exemption from registration pursuant to Section 4(2) of the Securities
Act. The options issued contain a legend restricting their transferability
absent registration or available exemption. Mr. Copley had access to information
about our company and had the opportunity to ask questions about our company.

         On January 7, 2002 we issued an option to purchase 50,000 shares
exercisable at $1.00 per share to our controller. Our controller received these
options for services performed. The options were issued under an exemption from
registration pursuant to Section 4(2) of the Securities Act. The options issued
contain a legend restricting their transferability absent registration or
available exemption. Our controller had access to information about our company
and had the opportunity to ask questions about our company.

         On January 7, 2002 we issued options to purchase an aggregate of
100,000 shares of our common stock exercisable at $.25 per share to Daniel P.
Johnson and John C. Redmond. These options were issued to Messrs. Johnson and
Redmond as consideration for third party loans they made to International
Dialing Services, Inc., an affiliate of our company. The loans made to
International Dialing Services, Inc. were subsequently advanced to our company.
The options were issued under an exemption from registration pursuant to Section
4(2) of the Securities Act. The options issued contain a legend restricting
their transferability absent registration or available exemption.

         On January 8, 2002 we issued options to purchase an aggregate of
125,000 shares of our common stock exercisable at $1.00 per share to our current
officers and directors. The options were issued under an exemption from
registration pursuant to Section 4(2) of the Securities Act. The options issued
contain a legend restricting their transferability absent registration or
available exemption.

         On January 8, 2002 we issued an option to purchase 5,000,000 shares of
our common stock exercisable at $1.00 per share to Lawrence Levinson. This
option was issued in consideration for the advances that Mr. Levinson and his
affiliates have made to our company and personal guarantees Mr. Levinson has
made in favor of our company. The options were issued under an exemption from
registration pursuant to section 4(2) of the Securities Act. The options issued
contain a legend restricting their transferability.

Preferred Stock

         On January 21, 2002 we issued 625,000 shares of series A convertible
preferred stock to Lawrence Levinson as consideration for a $625,000 promissory
note made by Mr. Levinson in favor of our company. The note is repayable in ten
years. Interest for the term of the note is payable

                                       12
<PAGE>
annually on the anniversary date of the note at an annual rate of 4.5%. Each
share of the series A convertible preferred stock is convertible into one share
of our common stock. These shares were issued under an exemption from
registration pursuant to Section 4(2) of the Securities Act. The shares issued
contain a legend restricting their transferability absent registration or
available exemption.

         On January 21, 2002 we filed a certificate of designation designating
625,000 of our 5,000,000 shares of preferred stock as series A convertible
preferred stock. The 625,000 shares of series A convertible preferred stock have
a stated value of $1.00 per share. The shares were issued to our chief executive
officer. The preferred stock has the following rights, preferences and
privileges:

         Conversion. Each share of series A convertible preferred stock is
convertible into one share of our common stock, at the option of the holder. The
conversion rate is subject to adjustment upon the occurrence of certain events,
including the issuance of our stock as a dividend or distribution on our common
stock.

         Redemption. The shares are redeemable at our sole option for $1.00 per
share.

         Voting. Each share of preferred stock is entitled to eight votes.

         Preference on Liquidation. Series A convertible preferred shares will
be entitled to a preference on liquidation.

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

General

         Management's discussion and analysis contains various forward looking
statements within the meaning of the Securities and Exchange Act of 1934. These
statements consist of any statement other than a recitation of historical fact
and can be identified by the use of forward looking terminology such as "may,"
"expect," "anticipate," "estimates" or "continue" or use of negative or other
variations of comparable terminology. We caution that these statements are
further qualified by important factors that could cause actual results to differ
materially from those contained in our forward looking statements, that these
forward looking statements are necessarily speculative, and there are certain
risks and uncertainties that could cause actual events or results to differ
materially from those referred to in our forward looking statements. Factors
that might cause a difference include, but are not limited to, those discussed
in "Risk Factors" and elsewhere in this prospectus.

Overview

         Through our IDS Cellular subsidiary, we began operations in the fourth
quarter of 2000 and began generating revenues in December 2000. Management notes
that a comparison of results of

                                       13
<PAGE>
operations for year ended 2000 and year ended 2001 may not be helpful as we were
incorporated in April 2000 and commenced operations in the fourth quarter of
2000.

         Commencing in the fourth quarter of 2001, we began submitting contracts
directly to several major wireless providers and began maintaining an inventory
and ship phones directly to customers. Under these circumstances, we bear the
risk of loss on the cellular phones and recognize a gross commission and related
cost of goods sold for the cellular phone at the time the phone is shipped. Our
gross margin will vary depending on the percentage of revenue received directly
or indirectly from wireless providers.

Results of Operations

         Revenues were $47,548 from inception through December 31, 2000 and
$4,968,550 for the year ended December 31, 2001. The $4,921,002 increase in
revenues for the year ended December 31, 2001 as compared to revenues from our
inception through December 31, 2000 reflects the commencement of our business
operations, which occurred in December 2000. Cost of sales for the year ended
December 31, 2001 were $1,147,668. Materially all of our revenues were generated
from the sale of cellular telephones and services. We generate revenues from
commissions that are paid by certain service providers whom we refer cellular
phone and service customers. Revenues are recorded at the time a cellular phone
is delivered to a customer. We expect that our cellular phone services will
continue to generate the majority of our revenues.

         Expenses for the year ended December 31, 2001 were $4,473,260 as
compared to $39,129 from inception through December 31, 2000. Expenses through
December 31, 2000 were mostly comprised of start up costs. Expenses for the year
ended December 31, 2001 were related to the growth of our business operations
and other costs including, but not limited to, sales commissions for cellular
phone services sales of $1,692,847; general and administrative expense of
$1,732,327; and payroll expense of $1,048,086.

         Accounts receivable increased $1,987,419 from $47,508 as of December
31, 2000 to $2,034,927 as of December 31, 2001. This increase is a result of our
increase in cellular phone services sales. Our receivables have been
historically collected between 75 and 90 days after the close of the month in
which they were created. Some of the delays were caused by problems incurred as
our cellular phone operations were in its infancy. We wrote off accounts
receivable totaling $399,869 during the year ended December 31, 2001 that were
deemed uncollectible as of the end of the period.

Liquidity and Capital Resources

         Since our inception we have experienced negative cash flow and have met
our cash requirements by issuing, through a private placement, our common stock
and by issuing stock as compensation for services provided. We have also funded
current obligations through the issuance of common stock and related party
loans. We generated additional funds through borrowings from an unrelated party.

                                       14
<PAGE>
         From inception until December 31, 2000, we relied on the proceeds from
the private sales of our equity securities of $365,055 and loans from related
parties to meet our cash requirements. For the year ended December 31, 2001, we
raised an additional $53,800 through the private sale of our equity securities.

         As of December 31, 2000 we had an accumulated deficit of $613,055 and
cash in the bank of $49,362. At December 31, 2001 we had an accumulated deficit
of $1,639,714 and $39,968 cash in the bank. For the year ended December 31,
2001, the deficit has been partly funded through the sale of common stock
totaling $53,800, net third party loans of $125,000, net proceeds from a
factoring agreement (discussed below) of $547,041, and net advances from related
parties of $963,671 for an aggregate of $1,689,512.

         Our net loss for the year ended December 31, 2001 is $1,026,659. Our
cash expenditures over the next 12 months are anticipated to be approximately
$10,000,000, consisting primarily of commission expenses, payroll expenses and
consulting fees. The following sources, in addition to funds generated from
operations, are available to fund current operations: net advances from related
parties ($963,671 since inception); net loans from third party lenders
($125,000) and private placement of our common stock for cash ($53,800 during
the year ended December 31, 2001). We anticipate that cash generated from
operations, our current factoring plan, previous loans, equity investments and
related party advances (if necessary) should be sufficient to provide us
adequate liquidity and capital resources for the next 12 months.

         We have received related party advances of $1,031,200, which are
payable on demand. Related party advances were from International Dialing
Services, which is wholly owned by Lawrence Levinson ($598,100) and Lawrence
Levinson ($433,100). In addition, on June 22, 2001 we received a $150,000 loan
from Four Star Financial Services, LLC, a California limited liability company.
The loan was secured by a promissory note, personally guaranteed by Lawrence
Levinson and a security interest in all our assets and accounts receivable. Four
Star Financial Services, LLC also received a five-year option to purchase
300,000 shares of our common stock exercisable at $.50 per share. Our December
31, 2001 financial information records the value of the options as additional
paid in capital with the offset being deferred interest expenses (a contra to
the note payable). Costs were amortized over the six-month term of the loan. The
loan from Four Star has been repaid.

         While our auditors have expressed substantial doubt as to our ability
to continue as a going concern, we anticipate that funds received from loans and
cash generated from our operations should be sufficient to satisfy our
contemplated cash requirements for the next 12 months. We intend to take several
steps that will provide the capital resources required to insure our viability
over the next 12 months. We have begun to increase our revenues by dealing
directly with cellular providers. We have recently contracted directly with
cellular providers, including, but not limited to, MCI WorldCom Wireless. By
contracting directly with providers we will eliminate third party agreements and
the costs associated with these third party agreements. This will also speed up
cash receipts by 7 to 10 days by dealing directly with cellular providers. In
addition, we may increase the use of telemarketing companies to provide new
sales leads. Management believes the advantage to using telemarketing

                                       15
<PAGE>
companies is that telemarketing companies are only paid for successful leads.
The incentive for telemarketing companies to find successful leads may increase
our future sales. Finally, we intend to continue our affiliate program, from
which results have improved over the past several months. We may also attempt to
raise additional funds through private or public offerings. We may seek
additional borrowings through a new credit facility or a third party lender by
borrowing against our receivables.

         On October 17, 2001 we entered into a nine month master factoring
agreement that was cancelled on January 15, 2002 pursuant to a new master
factoring agreement with Webbank, a Utah industrial loan corporation. On January
15, 2002 we entered into a nine month master factoring agreement with Webbank
under the same terms as the initial agreement with Rockland. Under the terms of
this agreement we may assign our weekly accounts receivable to Webbank and
receive immediate payment equal to 50% of the weekly accounts receivable. When
Webbank collects the assigned accounts receivable we receive the remaining
balance on our weekly accounts receivable assigned to Webbank minus a discount
ranging from 1.75% to 6.75% based on days elapsed between the initial assignment
and Webbank's collection of the assigned weekly accounts receivable. Under the
agreement we are obligated to factor $50,000 of our accounts receivable per
month. In connection with the agreement we have granted Webbank a security
interest in the following collateral: accounts receivable, inventory and
computer equipment. In addition, we have granted Webbank a security interest in
the proceeds from the sale of the above collateral. To date we have factored
approximately $547,041 of our accounts receivable. As of December 31, 2001 we
owed Rockland $547,041 on gross accounts receivable of $1,978,060. During 2001,
we incurred $62,115 in factoring expenses.

         We have no expectation of cash requirements over the next 12 months for
operating activities. We believe if the trend of increasing revenues remains
consistent, cash generated will be sufficient to support operations over the
next 12 months.

Plan of Operations

         Over the next twelve months, we plan to expand our cellular phone
marketing business. In August 2001 and April 2002 we leased additional office
space to expand our operations, which we believe will enable us to process all
credit applications for wireless service with carriers' credit departments more
efficiently. We anticipate hiring additional employees as the workload dictates.
We do not anticipate any significant purchase of equipment unless we expand our
business. However, an anticipated increase in business from direct contracts
with cellular providers may effect the number of cellular phones we keep in
inventory, as contractual arrangements with cellular providers in some instances
will require us to keep cellular phones for anticipated sales in inventory at
all times. As our cellular phone inventory increases, we may need additional
space to maintain this inventory. The number and level of our employees at
December 31, 2001 is adequate to maintain our business.


Item 7.  Financial Statements

         The financial information required in this report is included herein,
commencing on page F-1.

                                       16
<PAGE>
Item 8.  Changes in and Disagreements With Accountants on Accounting and
         Financial Disclosure

         None.

PART III

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

         The following table includes the names, positions held and ages of our
executive officers and directors. All directors serve for one year and until
their successors are elected and qualify. Directors do not presently receive
compensation for their services as directors. Officers are elected by the Board
and their terms of office are, except as otherwise stated in employment
contracts, at the discretion of the Board.
<TABLE>
<CAPTION>
Name                                Age              Position
----                                ---              --------
<S>                                 <C>              <C>
Lawrence Levinson                   53               Chairman of the Board and Chief Executive Officer
Robert B. Kline                     42               President, Treasurer and Director
Michael Magno                       39               Secretary
Robert Modansky                     47               Director
Michael Zimmerman                   56               Director
</TABLE>
Lawrence Levinson has served as our chief executive officer and director since
inception. Since June 1999, he has been consultant to International Dialing
Services, Inc., an international facilities-based telephone circuit provider,
whose major customer is a cable and wireless industry leader. From 1990 until
June 1999, Mr. Levinson was a founder and executive officer of Communication
Concepts & Investments, Inc., Crown Communications Two, Inc. and Global
Collections, Inc. (collectively Communications & Collections), communications
companies with switches and billing contracts with major local telcos in the
United States. In March 2000, Mr. Levinson, Communications & Collections and two
other principals of these companies were subject to a Federal Trade Commission
Stipulated Final Judgement and Order for Permanent Injunction and Other
Equitable Relief. Under this injunction, Mr. Levinson and the other defendants
agreed to each pay fines of $210,000 and in addition, forgive approximately $36
million in unpaid charges for services billed. This judgement was not an
omission of guilt. From 1986 until 1990, Mr. Levinson held various sales
positions with major companies in the communications industry. During this time,
he sold long distance service and network provisions to various businesses in
South Florida, including WorldCom. From 1982 until 1986, Mr. Levinson was the
owner/operator of two restaurants in the Chicago area. From 1976 to 1982, Mr.
Levinson owned and operated a temporary help services company in Chicago with
over 200 corporate clients.

Robert B. (Brad) Kline has served as our president, treasurer and director since
inception. Since January 2000, he has been consultant to International Dialing
Services, Inc., an international facilities- based telephone circuit provider,
whose major customer is a cable and wireless industry leader. From June 1998
until January 2000, Mr. Kline served as President and Treasurer of International
Dialing Services, Inc. From January 1995 until June 1998, Mr. Kline served as
the operations manager for Communication Concepts & Investments, Inc., Crown
Communications Two, Inc. and Global
                                       17
<PAGE>
Collections, Inc. (collectively "Communications & Collections"), communications
companies with switches and billing contracts with major local telcos in the
United States. Between June 1990 and January 1998, Mr. Kline was founder and
President of Concepts By Kline, Inc., an advertising firm for the Audiotext
Industry. From 1981 until June 1990, Mr. Kline was a district manager for
American Frozen Foods, a nationwide direct to home food service. Mr. Kline
worked his way through American Foods, starting as a telemarketing
representative and advanced upward to the management side of the business.

Michael Magno has served as our secretary since June 2000. Since August 2001 he
has served as vice president of investments for Brill Securities, a member of
the NYSE. He served as vice president of investments for Northeast Securities
from April 1998 through August 2001. From July 1992 through April 1998 Mr. Magno
served as vice president of investments for Josephthal and Company. Brill
Securities, Northeast Securities and Josephthal and Company are investment
firms. Mr. Magno's duties for both of these entities include managing investment
accounts for individuals. Mr. Magno is currently the principal of Netstamp,
Inc., an Internet marketing consulting company. He also holds a series 7 broker
license.

Robert Modansky has served as a director of our company since January 8, 2002.
Since 1991 Mr. Modansky has worked as an accountant for Strauss, Comas &
Modansky, LLP. He has been a partner with Strauss, Comas & Modansky since 1994.
Prior to working with Strauss, Comas & Modansky, Mr. Modansky was employed by
Arthur Anderson in Washington, D.C. and New York. Mr. Modansky currently serves
as a member of the board of directors of Internet Cable Corporation, a NASD
listed company. Mr. Modansky is a member of the American Institute of Certified
Public Accountants, as well as the New York State Society of Certified Public
Accountants. He received a bachelor of science in business administration from
the American University in Washington, D.C. Mr. Modansky is a certified public
accountant.

Michael Zimmerman has served as a director of our company since January 8, 2002.
Mr. Zimmerman is a certified public accountant, currently practicing in Arizona.
He has maintained his own private practice since 1977, providing tax and
auditing services as well as other financial services. Mr. Zimmerman received a
bachelor of science degree from Roosevelt University in Chicago, Illinois.

         Board Committees. Our audit committee consists of Robert Modansky and
Michael Zimmerman. Our audit committee will review the work of the audit staff
and direct reports recovering such work to be prepared. Our audit committee will
oversee our continuous audit program to attempt to protect against improper and
unsound practices and attempt to furnish adequate protection for our assets and
records. Our audit committee will act as liaison to our independent certified
public accountants and will conduct such work as necessary and will receive
written reports, supplemented by oral reports as it deems necessary, from our
independent certified public accountants.

Indemnification of Directors and Officers

         The Florida Business Corporation Act (the "Corporation Act") permits
the indemnification of directors, employees, officers and agents of Florida
corporations. The Company's Articles of Incorporation and Bylaws provide
                                       18

<PAGE>
that the Company shall indemnify its directors and officers to the fullest
extent permitted by the Corporation Act.

         The provisions of the Corporation Act that authorize indemnification do
not eliminate the duty of care of a director, and in appropriate circumstances
equitable remedies such as injunctive or other forms of non-monetary relief will
remain available under Florida law. In addition, each director will continue to
be subject to liability for (a) violations of criminal laws, unless the director
had reasonable cause to believe his conduct was lawful or had no reasonable
cause to believe his conduct was unlawful, (b) deriving an improper personal
benefit from a transaction, (c) voting for or assenting to an unlawful
distribution and (d) willful misconduct or conscious disregard for the best
interests of the Company in a proceeding by or in the right of a shareholder.
The statute does not affect a director's responsibilities under any other law,
such as the Federal securities laws.

         The effect of the foregoing is to require the Company to indemnify the
officers and directors of the Company for any claim arising against such persons
in their official capacities if such person acted in good faith and in a manner
that he reasonably believed to be in or not opposed to the best interests of the
corporation and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful.

         Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers or persons controlling the
Company pursuant to the foregoing provisions, the Company has been informed that
in the opinion of the Securities and Exchange Commission, such indemnification
is against public policy as expressed in the act and is therefore unenforceable.

Item 10. Executive Compensation

Summary Compensation Table

         The following table sets forth information relating to the compensation
we paid during the past three fiscal years to our chief executive officer; and
to each of our executive officers who earned more than $100,000 during the
fiscal year ended December 31, 2001.
<TABLE>
<CAPTION>
                              Fiscal                         Other Annual                 LTIP       All Other
Name and Principal Position   Year      Salary     Bonus     Compensation    Options/(#)  Payouts    Compensation
-----------------------------------------------------------------------------------------------------------------
<S>                           <C>       <C>         <C>          <C>            <C>           <C>       <C>
                              2001      120,000     none         none           -             -         none
Lawrence Levinson, CEO        2000      none        none         none           50,000        -         $85,000*
</TABLE>
* Mr. Levinson received a consulting fee of $85,000 for services performed in
2000, of which $45,500 was paid to him in cash and the remaining amount remains
due to him.

Option Grants in Last Fiscal Year

         The following table sets forth information concerning our grant of
options to purchase shares of our common stock and SARs during the fiscal year
ended December 31, 2001 to our chief

                                       19
<PAGE>
executive officer and to each of our executive officers who earned more than
$100,000 during the fiscal year ended December 31, 2001.
<TABLE>
<CAPTION>
                                                Percent of
                                Number of     Total Options/
                               Securities      SARs Granted
                               Underlying      To Employees         Exercise Or
                              Options/SARs       In Fiscal          Base Price
      Name                     Granted (#)          Year              ($/Sh)           Expiration Date
-------------------------------------------------------------------------------------------------------
<S>                              <C>                <C>               <C>                    <C>
      Lawrence Levinson          50,000             16.6%             $1.00                  None
</TABLE>
Incentive and Non-Qualified Stock Option Plan

         On November 1, 2001, we implemented a 2001 Incentive and Non-Qualified
Stock Option Plan. We have reserved 500,000 shares of our common stock for
issuance under this plan. This plan authorizes the granting of awards of up to
500,000 shares of common stock to our key employees, officers, directors and
consultants. Awards consist of stock options (both nonqualified options and
options intended to qualify as incentive stock options under Section 422 of the
Internal Revenue Code of 1986), restricted stock awards, deferred stock awards,
stock appreciation rights and other stock-based awards, as described in the
plan. As of the date of this prospectus, no stock options are outstanding under
the plan.

         The plan is administered by our board of directors which determines the
persons to whom awards will be granted, the number of awards to be granted and
the specific terms of each grant, including their vesting schedule, subject to
the provisions of the plan.

         In connection with incentive stock options, the exercise price of each
option may not be less than 100% of the fair market value of the common stock on
the date of grant (or 110% of the fair market value in the case of a grantee
holding more than 10% of our outstanding stock). The aggregate fair market value
of shares for which incentive stock options are exercisable for the first time
by an employee during any calendar year may not exceed $100,000. Nonqualified
stock options granted under the plan may be granted at a price determined by the
board of directors, not to be less than the fair market value of the common
stock on the date of grant.

Option Exercises and Holdings

         The following tables set forth information with respect to the exercise
of options to purchase shares of common stock during the fiscal year ended
December 31, 2001 to our chief executive officer and to each of our executive
officers who earned more than $100,000 during the fiscal year ended December 31,
2001.
                                       20


<PAGE>
Aggregated Option/SAR Exercises in Last Fiscal Year and Fiscal Year-End
Option/SAR Values
<TABLE>
<CAPTION>
                                                        Number of
                                                       Securities           Value of
                                                       Underlying          Unexercised
                       Shares                          Unexercised        In-The-Money
                      Acquired                        Options/SARs        Options/SARs
                         On           Value           At FY-End (#)       At FY-End ($)
                      Exercise      Realized          Exercisable/        Exercisable/        Expiration
       Name              (#)           ($)            Unexercisable       Unexercisable          Date
-----------------------------------------------------------------------------------------------------------
<S>                       <C>           <C>            <C>                   <C>            <C>
Lawrence Levinson         -             -              50,000/-0-            -0-/-0-        September 2005
</TABLE>
Long-Term Incentive Plans Awards in Last Fiscal Year
<TABLE>
<CAPTION>
                               Number Performance                           Estimated Future Payouts Under
                                    of Shares         or Other                Non-Stock Price-Based Plans
                                    Units or        Period Until            --------------------------------
                                  Other Rights       Maturation             Threshold    Target     Maximum
      Name                            (#)             or Payout              ($or #)     ($or #)    ($ or #)
------------------------------------------------------------------------------------------------------------
<S>                                     <C>               <C>                    <C>        <C>      <C>
      Lawrence Levinson                 -                 -                      -          -        -
</TABLE>
      Employment Agreements. We have entered into employment agreements with
several of our officers, directors and key employees. The initial agreements
were entered into in 2000 and expired on various dates between September and
November 2001. The agreements have been orally extended. A summary of the
material agreements is as follows:

Larry Levinson. Commencing September 2000, we agreed to pay Mr. Levinson
$120,000 per year, payable monthly. In addition, Mr. Levinson has received
options to purchase 50,000 shares of common stock exercisable for a 5 year term
at $1.00 per share. Also, Mr. Levinson will be reimbursed for all travel
expenses. Effective January 1, 2002, we have orally agreed to extend Mr.
Levinson's employment agreement through December 31, 2002. Under this oral
agreement, Mr. Levinson will be paid an annual salary of $240,000, payable
weekly.

Robert B. Kline. Commencing September 1, 2000, we agreed to pay Mr. Kline
$48,000 per year, payable monthly. In addition, Mr. Kline has received options
to purchase 50,000 shares of common stock exercisable for a 5 year term at $1.00
per share. Mr. Kline will be reimbursed for all traveling expenses. Effective
February 1, 2002, we have orally agreed to extend Mr. Kline's employment
agreement through February 1, 2003. Under this oral agreement, Mr. Kline will be
paid an annual salary of $104,000, payable weekly.

Michael Magno. Commencing November 1, 2000, we agreed to pay Mr. Magno $42,000
per year, payable monthly. In addition, Mr. Magno has received options to
purchase 50,000 shares of common stock exercisable for a 5 year term at $1.00
per share. Mr. Magno will be reimbursed for all traveling expenses. Effective
January 1, 2002, we have orally agreed to extend Mr. Magno's employment
agreement through December 31, 2002. Under this oral agreement, Mr. Magno will
be paid an annual salary of $60,000, payable weekly.

                                       21
<PAGE>
      Director Compensation. On January 8, 2002, our board of directors agreed
to issue options to purchase 25,000 shares of common stock exercisable at $1.00
per share to each member of our board and our corporate secretary. Effective
January 8, 2002, we issued options to purchase an aggregate of 125,000 shares of
our common stock exercisable at $1.00 per share to Messrs. Levinson, Kline,
Zimmerman, Modansky and Magno. In addition, effective January 8, 2002, members
of our board of directors will be paid $500 and reimbursed travel expenses for
attendance at each meeting of our board of directors.

Limitation on Liability and Indemnification Matters

         As authorized by the Florida Business Corporation Law, our articles of
incorporation provides that none of our directors shall be personally liable to
us or our shareholders for monetary damages for breach of fiduciary duty as a
director, except for liability for:

        o         any breach of the director's duty of loyalty to our company or
                  its shareholders;
        o         acts or omissions not in good faith or which involve
                  intentional misconduct or a knowing violation of law
        o         unlawful payments of dividends or unlawful stock redemptions
                  or repurchases;
        o         any transaction from which the director derived an improper
                  personal benefit

         This provision limits our rights and the rights of our shareholders to
recover monetary damages against a director for breach of the fiduciary duty of
care except in the situations described above. This provision does not limit our
rights or the rights of any shareholder to seek injunctive relief or rescission
if a director breaches his duty of care. These provisions will not alter the
liability of directors under federal securities laws.

         Our articles of incorporation further provides for the indemnification
of any and all persons who serve as our director, officer, employee or agent to
the fullest extent permitted under Florida law.

         Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to our directors, officers and controlling persons pursuant
to the foregoing provisions, or otherwise, we have been advised that in the
opinion of the SEC, this indemnification is against public policy as expressed
in the securities laws, and is, therefore unenforceable.

Item 11. Security Ownership of Certain Beneficial Owners and Management

         The following table sets forth information known to us, as of the date
of this report, relating to the beneficial ownership of shares of common stock
by: each person who is known by us to be the beneficial owner of more than five
percent of the outstanding shares of common stock; each director; each executive
officer; and all executive officers and directors as a group.

                                       22
<PAGE>
         Unless otherwise indicated, the address of each beneficial owner in the
table set forth below is care of CyberAds, Inc., 6001 Park of Commerce
Boulevard, Boca Raton, Florida 33487.

         We believe that all persons named in the table have sole voting and
investment power with respect to all shares of common stock shown as being owned
by them.

         Under securities laws, a person is considered to be the beneficial
owner of securities owned by him, his spouse and others to whom the law
attributes ownership, as well as securities that can be acquired by him within
60 days from the date of this prospectus, including upon the exercise of
options, warrants or convertible securities. We determine a beneficial owner's
percentage ownership by assuming that options, warrants or convertible
securities that are held by him, but not those held by any other person, and
which are exercisable within 60 days of the date of this prospectus, have been
exercised or converted.
<TABLE>
<CAPTION>
Name and Address of                               Amount and Nature of                    Percentage
  Beneficial Owner                                Beneficial Ownership                     of Class
-------------------                               --------------------                    ----------
<S>                                                  <C>          <C>                       <C>
Lawrence Levinson                                    10,732,000(1)(2)                       56.3%

Gene Foland                                           1,365,000(3)                           9.3%
5060 N.E. 23rd Terrace
Lighthouse Point, FL 33064

James Ricketts                                        1,300,000(4)                           8.8%
14741 Lewis Road
Miami, FL 33014

Robert B. Kline                                       1,025,000(2)                           7.6%

Michael Magno                                           349,000(5)                           2.4%

Robert Modansky                                          25,000(6)                            *

Michael Zimmerman                                        60,000(6)(7)                         *

Executive Officers and Directors (as a group of 5)    6,291,500(8)                          46.8%
</TABLE>
(1)   Includes 625,000 shares of series A preferred stock that are
      convertible into 625,000 shares of our common stock and an option to
      purchase 5,000,000 shares of our common stock exercisable at $1.00 per
      share.
(2)   Includes options to purchase 75,000 shares of common stock exercisable
      at $1.00 per share.
(3)   Includes 65,000 shares of common stock issued acquired in a third party
      transaction. Includes 1,300,000 shares of common stock underlying options
      exercisable at $1.00.
(4)   Includes options to purchase 1,300,000 shares of common stock exercisable
      at either $1.00 or $2.00 per share.
(5)   Includes 100,000 shares of common stock underlying options and warrants
      exercisable at $1.00 per share.
(6)   Includes options to purchase 25,000 shares of common stock exercisable at
      $1.00 per share.
(7)   Includes 35,000 shares purchased under a private placement.
(8)   Excludes common stock underlying convertible securities.
 *  Less than 1%
                                       23
<PAGE>
Item 12. Certain Relationships and Related Transactions

         In a stock purchase agreement effective December 31, 2000, we acquired
all of the issued and outstanding shares (an aggregate of 1,000,000 shares) of
IDS Cellular, Inc. in return for 7,500,000 shares of our common stock. We
acquired the IDS Cellular shares directly from each of IDS Cellular's
shareholders. These shareholders were Lawrence Levinson, Robert Kline and Barry
Garlin, who were serving as our executive officers, directors and principal
shareholders at the time of the transaction. We believe the consideration paid
for the outstanding shares of IDS Cellular was fair and reasonable at the time
of the stock purchases.

         We have received advances in the aggregate of $598,100 through December
31, 2001 from International Dialing Services, Inc., a company wholly owned by
Lawrence Levinson. In addition, we have received advances in the aggregate of
$433,100 from Mr. Levinson, individually. The loans are unsecured, non-interest
bearing and payable on demand. In addition, under the terms of the loans we have
agreed to make the lease payments on Mr. Levinson's automobile which are
approximately $1,020 per month. Mr. Levinson is the beneficial owner of
approximately 85% of our outstanding common stock. Lawrence Levinson and Robert
Kline, our executive officers, directors and principal shareholders, are also
officers and directors of International Dialing Services, Inc. In connection
with the loans from Lawrence Levinson, effective December 18, 2001 we issued
options to purchase an aggregate of 100,000 shares of our common stock
exercisable at $.25 per share to Daniel P. Johnson and John C. Redmond. The
options were issued to Messrs. Johnson and Redmond as compensation for third
party advances by Johnson and Redmond to International Dialing Services, which
were subsequently advanced to our company.

         In addition, we have received a $5,000 loan from Robert Kline,
individually, and a $50,000 loan from Lawrence Levinson, individually. The
advance from Mr. Kline was repaid during the third quarter 2001. Mr. Levinson's
advance is payable on demand.

         As of December 31, 2001, the amount due on the related party advances
was $1,031,200.

         On January 8, 2002 we issued a five year option to purchase 5,000,000
shares of our common stock exercisable at $1.00 per share to Lawrence Levinson.
This option was issued in consideration for the advances that Mr. Levinson and
his affiliates have made to our company and personal guarantees Mr. Levinson has
made in favor of our company.

         On January 21, 2002 we issued 625,000 share of our series A preferred
stock to Lawrence Levinson in consideration for a $625,000 promissory note made
by Mr. Levinson in favor of our company. The note is repayable in ten years.
Interest for the term of the note is payable annually on the anniversary date of
the note at an annual rate of 4.5%. The preferred shares we issued to Mr.
Levinson are convertible into shares of our common stock on a 1 for 1 share
basis. The preferred shares have super voting rights.

                                       24
<PAGE>
         On June 22, 2001, we entered into a loan and security agreement with
Four Star Financial Services, LLC, a California limited liability company. Under
this agreement we received a loan in the amount of $150,000. The term of the
loan was for a period commencing on June 22, 2001 and ending on December 17,
2001. Under the terms of the loan and security agreement we paid interest to
Four Star Financial Services, LLC on the daily outstanding principal balance of
the loan at a rate of 33% per annum. The loan was secured by all of our assets
and accounts receivable. In addition, our chairman and his wife personally
guaranteed payment of the principal amount of the loan and interest. The
personal guarantee included a mortgage on our chairman's principal residence. As
a further consideration for entering into the loan and security agreement, we
issued Four Star Financial Services, LLC an option to acquire 300,000 shares of
our common stock exercisable at $.50 per share for a term of five years. The
option expires on June 22, 2006. The loan has been repaid in accordance with its
terms.

         We sublease office space in Boca Raton from International Dialing
Services, Inc. We use this space for our servers and IT operations. The lease
term is through July 30, 2002. We occupy this space for approximately $975 per
month.

         In addition, commencing April 2001 we entered into an oral sublease
agreement with International Dialing Services for facilities for our cellular
phone division. The lease terminated April 2002. We subleased these facilities
for $1,500 per month, under the same terms of the lease agreement International
Dialing Services entered into with the landlord.

         We have entered into a business to business cellular phone marketing
program with American Cellular, Inc. This relationship has historically
accounted for the majority of our revenues. The shareholders of American
Cellular are Steven Krause (51%), Lawrence Levinson (24.5%) and Nicholas E.
Brooks (24.5%). Mr. Krause owns a minority interest in our company. Mr. Levinson
is our CEO and principal shareholder. Mr. Brooks is a former officer of our
company. From inception through December 31, 2000, more than 50% of our revenues
were derived from our agreement with American Cellular.

         On January 6, 2002 we issued options to purchase 1,300,000 shares of
our common stock to Gene Foland as consideration for advertising and marketing
consulting services provided by Mr. Foland. The options are exercisable at $1.00
per share for a term of six months. Based upon the current number of outstanding
shares of our common stock, upon exercise of these options, Mr. Foland would be
a beneficial owner of more than 5% of our outstanding common stock.

         On January 6, 2002 we issued options to purchase 1,300,000 shares of
our common stock to James Ricketts as consideration for Latin American sales
development consulting services provided by Mr. Ricketts. The options are
exercisable at either $1.00 or $2.00 for a term of six months. Based upon the
current number of outstanding shares of our common stock upon exercise of these
options, Mr. Ricketts would be a beneficial owner of more than 5% of our
outstanding common stock.

                                       25
<PAGE>
         On January 8, 2002 we appointed Robert Modansky to serve on our board
of directors. Mr. Modansky's accounting firm has provided accounting services to
our company and has accrued approximately $16,000 in fees for services performed
during fiscal year 2001.

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

(a)      Exhibits
<TABLE>
<CAPTION>
Exhibit No.          Description of Document
-----------          -----------------------
<S>      <C>         <C>
         2.2         Stock Purchase Agreement with IDS Cellular and its shareholders(1)
         3.1(a)      Articles of Incorporation(1)
         3.1(b)      Articles of Amendment(1)
         3.1(c)      Designation of Series A Convertible Preferred Stock(2)
         3.2         Bylaws(1)
         4.0         Form of Stock Certificate(1)
         4.1         Loan Agreement with Four Star Financial Services, LLC(1)
         4.2         Loan Agreement with Levinson(1)
         4.3         Promissory Note issued by Levinson in favor of CyberAds, dated January 21, 2002*
         5.0         Opinion and Consent of Atlas Pearlman, P.A.(2)
         10.1        Employment/Consulting Agreement with Levinson(1)
         10.2        Agreements with American Cellular, Inc. and GT Global Communications, Inc.(1)
         10.3        Agreement with Triton PCS(1)
         10.4        Agreement with Regal Marketing International(1)
         10.6        Agreement with Beck Management, Inc.(1)
         10.7        Consulting Agreement with Gene Foland(2)
         10.8        Consulting Agreement with James L. Ricketts(2)
         10.9        Consulting Agreement with James L. Copley(2)
         10.10       Sales Agency Agreement with MCI WorldCom Wireless(2)
         21.0        Subsidiaries of Registrant(1)

         (1)         Previously filed in Registration Statement on Form SB-2, File No. 333-62690
         (2)         Previously filed in Registration Statement on Form SB-2, File No. 333-82104
         *           Included herein.
</TABLE>
(b)      Reports on Form 8-K:

         The following reports on Form 8-K were filed during the last quarter of
the period covered by this report and the period subsequent to the period
covered by this report:

         On January 29, 2002, we filed a current report on Form 8-K disclosing
that on January 22, 2002 we issued 625,000 shares of series A preferred stock to
Lawrence Levinson, our CEO, in

                                       26
<PAGE>
consideration for advances in the aggregate of approximately $350,000 that Mr.
Levinson and his affiliates have made to our company and a personal guarantee
that Mr. Levinson has made on behalf of our company.

         On February 6, 2002, we filed an amended current report on Form 8-K/A
to disclose the designation, rights and preferences of the series A preferred
stock that we issued to Lawrence Levinson on January 22, 2002. Each share of
series A preferred stock is convertible into one share of our common stock at
the option of the holder. In addition, the series A preferred shares have super
voting rights.




                                       27
<PAGE>
                                   SIGNATURES

         In accordance with Section 13 or 15(d) of the Securities Exchange Act,
the registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized, in Boca Raton, Florida on April 15, 2002.

                                                     CYBERADS, INC.


                                                     By: /s/ Lawrence Levinson
                                                        ------------------------
                                                     Lawrence Levinson
                                                     Chairman, Chief Executive
                                                     Officer


         In accordance with the requirements of the Securities Act of 1934, this
report has been signed by the following persons in the capacities and on the
dates indicated.
<TABLE>
<CAPTION>
        SIGNATURE                                 TITLE                                      DATE
        ---------                                 -----                                      ----
<S>                                         <C>                                         <C>
/s/ Lawrence Levinson                       Chairman of the Board, Chief                April 15, 2002
------------------------------------        Executive Officer
Lawrence Levinson

/s/ Robert B. Kline                         President, Principal                        April 15, 2002
------------------------------------        Accounting Officer, Treasurer
Robert B. Kline                             Director


/s/ Michael Magno                           Secretary                                   April 15, 2002
------------------------------------
Michael Magno

/s/ Robert Modansky                         Director                                    April 15, 2002
------------------------------------
Robert Modansky

/s/ Michael Zimmerman                       Director                                    April 15, 2002
------------------------------------
Michael Zimmerman
</TABLE>
                                       28

<PAGE>








                         CYBERADS, INC. AND SUBSIDIARIES
                        CONSOLIDATED FINANCIAL STATEMENTS
                        AS OF DECEMBER 31, 2001 AND 2000





<PAGE>
                         CYBERADS, INC. AND SUBSIDIARIES



                                   CONTENTS
                                   --------


PAGE               F-1        INDEPENDENT AUDITORS' REPORT

PAGE               F-2        CONSOLIDATED BALANCE SHEET AS OF DECEMBER 31, 2001

PAGE               F-3        CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE
                              YEAR ENDED DECEMBER 31, 2001 AND FOR THE PERIOD
                              FROM APRIL 12, 2000 (INCEPTION) TO DECEMBER 31,
                              2000

PAGE               F-4        CONSOLIDATED STATEMENT OF CHANGES IN
                              STOCKHOLDERS' DEFICIENCY FOR THE PERIOD FROM
                              APRIL 12, 2000 (INCEPTION) TO DECEMBER 31, 2001

PAGE               F-5        CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE
                              YEAR ENDED DECEMBER 31, 2001 AND FOR THE PERIOD
                              FROM APRIL 12, 2000 (INCEPTION) TO DECEMBER 31,
                              2000

PAGES            F-6 - 20     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS AS OF
                              DECEMBER 31, 2001




<PAGE>
                          INDEPENDENT AUDITORS' REPORT
                          ----------------------------

To the Board of Directors of:
  CyberAds, Inc. and Subsidiaries

We have audited the accompanying consolidated balance sheet of CyberAds, Inc.
and Subsidiaries as of December 31, 2001 and the related consolidated statements
of operations, changes in stockholders' deficiency and cash flows for the year
ended December 31, 2001 and for the period from April 12, 2000 (inception) to
December 31, 2000. These consolidated financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audits to obtain reasonable assurance about whether the consolidated
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the consolidated 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 consolidated financial statements referred to above present
fairly in all material respects, the financial position of CyberAds, Inc. and
Subsidiaries as of December 31, 2001, and the results of their operations and
their cash flows for the year ended December 31, 2001 and for the period from
April 12, 2000 (inception) to December 31, 2000 in conformity with accounting
principles generally accepted in the United States of America.

The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in Note 18 to
the consolidated financial statements, the Company had a $1,026,659 loss from
operations, a working capital deficiency of $366,422, a stockholders' deficiency
of $324,459 and a cash flow deficiency from operations of $1,656,403. These
matters raise substantial doubt about the Company's ability to continue as a
going concern. Management's plans in regards to these matters is also described
in Note 18. The consolidated financial statements do not include any adjustments
that might result from the outcome of this uncertainty.



WEINBERG & COMPANY, P.A.


Boca Raton, Florida
March 25, 2002

                                      F-1
<PAGE>
                         CYBERADS, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEET
                             AS OF DECEMBER 31, 2001
                             -----------------------

<TABLE>
<CAPTION>
                                     ASSETS
                                     ------

<S>                                                                        <C>
CURRENT ASSETS
 Cash                                                                      $    39,968
 Accounts receivable                                                         2,034,927
 Inventory                                                                     383,672
 Deposits                                                                       15,913
                                                                           -----------
      Total Current Assets                                                   2,474,480
                                                                           -----------

PROPERTY AND EQUIPMENT - NET                                                    41,963
                                                                           -----------

TOTAL ASSETS                                                               $ 2,516,443
------------                                                               ===========


                    LIABILITIES AND STOCKHOLDERS' DEFICIENCY
                    ----------------------------------------

CURRENT LIABILITIES
 Accounts payable                                                          $   811,276
 Accrued expenses                                                              174,135
 Factor payable                                                                547,041
 Advances from related parties                                               1,031,200
 Due to officers                                                               152,250
 Advances from third parties                                                   125,000
                                                                           -----------
      Total Current Liabilities                                              2,840,902
                                                                           -----------

STOCKHOLDERS' DEFICIENCY
 Common stock, $.001 par value, 50,000,000 shares authorized,
   13,384,777 shares issued and outstanding                                     13,385
 Additional paid-in capital                                                  1,301,870
 Accumulated deficit                                                        (1,639,714)
                                                                           -----------

      Total Stockholders' Deficiency                                          (324,459)
                                                                           -----------

TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIENCY                             $ 2,516,443
----------------------------------------------                             ===========
</TABLE>

          See accompanying notes to consolidated financial statements.

                                       F-2




<PAGE>
                         CYBERADS, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                FOR THE YEAR ENDED DECEMBER 31, 2001 AND FOR THE
           PERIOD FROM APRIL 12, 2000 (INCEPTION) TO DECEMBER 31, 2000
           -----------------------------------------------------------
<TABLE>
<CAPTION>


                                                                                                        For the Period From
                                                                              For the                      April 12, 2000
                                                                            Year Ended                     (Inception) to
                                                                         December 31, 2001               December 31, 2000
                                                                         -----------------             --------------------
<S>                                                                        <C>                             <C>
NET REVENUES                                                               $  4,968,550                    $     47,508

COST OF REVENUES                                                              1,147,668                              --
                                                                           ------------                    ------------

GROSS PROFIT                                                                  3,820,882                          47,508
                                                                           ------------                    ------------

OPERATING EXPENSES
 Selling                                                                      1,692,847                          29,000
 Payroll expenses                                                             1,048,086                           9,129
 General and administrative                                                   1,732,327                           1,000
                                                                           ------------                    ------------
     Total Operating Expenses                                                 4,473,260                          39,129
                                                                           ------------                    ------------

INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE OTHER EXPENSE                  (652,378)                          8,379
                                                                           ------------                    ------------

OTHER EXPENSE
 Interest expense                                                              (262,728)                             --
                                                                           ------------                    ------------
     Total Other Expense                                                       (262,728)                             --
                                                                           ------------                    ------------

INCOME (LOSS) BEFORE DISCONTINUED OPERATIONS                                   (915,106)                          8,379

DISCONTINUED OPERATIONS:
 Loss from discontinued operations                                             (111,553)                       (621,434)
                                                                           ------------                    ------------

NET LOSS                                                                   $ (1,026,659)                   $   (613,055)
--------                                                                   ============                    ============

BASIC AND DILUTED LOSS PER COMMON SHARE
 Income (loss) from continuing operations                                  $      (0.07)                   $       0.00
 Loss from discontinued operations                                                (0.01)                          (0.11)
                                                                           ------------                    ------------
 Loss per share                                                            $      (0.08)                   $      (0.11)
                                                                           ============                    ============

Weighted average number of common shares outstanding -
  basic and diluted                                                          13,314,033                       5,607,500
                                                                           ============                    ============
</TABLE>
          See accompanying notes to consolidated financial statements.
                                       F-3

<PAGE>
                         CYBERADS, INC. AND SUBSIDIARIES
          CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' DEFICIENCY
       FOR THE PERIOD FROM APRIL 12, 2000 (INCEPTION) TO DECEMBER 31, 2001
       -------------------------------------------------------------------
<TABLE>
<CAPTION>


                                                               Additional                                Deferred
                                            Common Stock        Paid-In    Accumulated  Subscriptions   Consulting
                                        Shares        Amount    Capital       Deficit     Receivable       Fees         Total
                                      ---------     --------- -----------  ------------ -------------  ------------- -----------
<S>                                   <C>         <C>         <C>          <C>           <C>          <C>            <C>
Stock issued to founders              5,025,000   $     5,025 $        --  $        --   $    (5,025) $        --    $        --

Issuance of common stock for cash,
  net of offering costs                 410,000           410     364,645           --            --           --        365,055

Issuance of common stock for services   300,000           300     299,700           --            --     (150,000)       150,000

In-kind contribution of services             --            --      13,175           --            --           --         13,175

Issuance of common stock in
  acquisition of IDS Cellular, Inc.   7,500,000         7,500      (6,500)          --            --           --          1,000

Net loss, 2000                               --            --          --     (613,055)           --           --       (613,055)
                                     ----------   ----------- -----------  -----------   -----------  -----------    -----------

Balance, December 31, 2000           13,235,000   $    13,235 $   671,020  $  (613,055)  $    (5,025) $  (150,000)   $   (83,825)

Issuance of common stock for cash,
  net of offering costs                  59,777            60      53,740           --            --           --         53,800

Issuance of common stock for
  services                               90,000            90      89,910           --            --           --         90,000

Recognition of deferred consulting
  fees                                       --            --          --           --            --      150,000        150,000

Settlement of subscription for
  services                                   --            --          --           --         5,025           --          5,025

In-kind contribution of services             --            --       6,200           --            --           --          6,200

Issuance of options related to a loan        --            --     153,000           --            --           --        153,000

Options issued for services                  --            --     249,000           --            --           --        249,000

Issuance of options related to
  advances made to the Company               --            --      79,000           --            --           --         79,000

Net loss, 2001                               --            --          --   (1,026,659)           --           --     (1,026,659)
                                     ----------   ----------- -----------  -----------   -----------  -----------    -----------

BALANCE, DECEMBER 31, 2001           13,384,777   $    13,385 $ 1,301,870  $(1,639,714)  $        --  $        --    $  (324,459)
--------------------------           ==========   =========== ===========  ===========   ===========  ===========    ===========
</TABLE>
          See accompanying notes to consolidated financial statements.
                                       F-4

<PAGE>
                         CYBERADS, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
             FOR THE YEAR ENDED DECEMBER 31, 2001 AND FOR THE PERIOD
              FROM APRIL 12, 2000 (INCEPTION) TO DECEMBER 31, 2000
              ----------------------------------------------------
<TABLE>
<CAPTION>
                                                                                                          For the Period
                                                                                                               From
                                                                                          For the Year    April 12, 2000
                                                                                             Ending       (Inception) to
                                                                                          December 31,     December 31,
                                                                                              2001             2000
                                                                                        ---------------   --------------
<S>                                                                                        <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
 Net loss                                                                                  $(1,026,659)   $  (613,055)
 Adjustments to reconcile net loss to net cash used in operating activities:
 Provision for doubtful accounts                                                               517,393             --
 Depreciation                                                                                    5,558          1,255
 Stock and options issued for services                                                         494,025        151,000
 In-kind contribution of services                                                                6,200         13,175
 Options issued as part of a loan                                                              153,000             --
 Options issued related to advances made to the Company                                         79,000             --
 Increase in:                                                                                       --
  Accounts receivable                                                                       (2,504,812)       (47,508)
  Prepaid expenses                                                                              (5,913)       (10,000)
  Inventory                                                                                   (383,672)            --
 Increase in:
  Accounts payable                                                                             792,592         18,684
  Accrued expenses                                                                             135,135         29,000
  Due to officers                                                                               81,750         80,500
                                                                                           -----------    -----------
       Net Cash Used In Operating Activities                                                (1,656,403)      (376,949)
                                                                                           -----------    -----------

CASH FLOWS FROM INVESTING ACTIVITIES:
 Purchases of property and equipment                                                           (42,503)        (6,273)
                                                                                           -----------    -----------
       Net Cash Used In Investing Activities                                                   (42,503)        (6,273)
                                                                                           -----------    -----------

CASH FLOWS FROM FINANCING ACTIVITIES:
 Proceeds from issuance of common stock, net of offering costs                                  53,800        365,055
 Advances from third parties                                                                   325,000         67,529
 Repayments to third parties                                                                  (200,000)            --
 Advances from related parties                                                               1,221,800             --
 Repayments to related parties                                                                (258,129)            --
 Proceeds from factored accounts receivable, net                                               547,041             --
                                                                                           -----------    -----------
       Net Cash Provided By Financing Activities                                             1,689,512        432,584
                                                                                           -----------    -----------

NET INCREASE (DECREASE) IN CASH                                                                 (9,394)        49,362

CASH, BEGINNING OF PERIOD                                                                       49,362             --
                                                                                           -----------    -----------

CASH, END OF PERIOD                                                                        $    39,968    $    49,362
-------------------                                                                        ===========    ===========

Interest paid during the year                                                              $    30,728    $        --
                                                                                           ===========    ===========

Taxes paid during the year                                                                 $        --    $        --
                                                                                           ===========    ===========

SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCIANG ACTIVITIES:
------------------------------------------------------------------------

In April 2000, the Company issued 5,025,000 shares of common stock to its
 founders for a subscription receivable                                                    $        --    $     5,025
                                                                                           ===========    ===========
</TABLE>
          See accompanying notes to consolidated financial statements.
                                       F-5

<PAGE>
                         CYBERADS, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             AS OF DECEMBER 31, 2001
                             -----------------------

NOTE 1   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ORGANIZATION
------   -----------------------------------------------------------

         (A) Nature of Operations
         ------------------------

         CyberAds, Inc. was incorporated in the state of Florida on April 12,
         2000. CyberAds originally intended to offer internet-based opt-in email
         list aggregation and database services to customers that wished to
         direct mail promotional campaigns to consumers who had given their
         permission to receive email messages in various categories. CyberAds
         obtained consumers permission to receive opt-in email by giving away
         cash and non-cash prizes to those people registered at their website.
         As of December 31, 2000, the CyberAds suspended awarding cash prizes.
         NetAds of South Florida, Inc., a wholly owned subsidiary of the
         CyberAds, was incorporated in the state of Florida on April 12, 2000
         and operates the aforementioned website. During 2001 this business
         segment was discontinued (See Note 15).

         IDS Cellular, Inc., a wholly owned subsidiary, was incorporated in the
         state of Florida on December 11, 2000 (See Note 13). IDS Cellular, Inc.
         receives revenue by obtaining cellular phone applications from
         advertising banners placed at various websites and submitting approved
         applications to cellular phone service providers (carriers) as well as
         to master dealers that have contracted with various other carriers. IDS
         Cellular, Inc. has contracted to do business with several website
         hosts, which receive a commission from it for each completed contract
         for cellular phone service.

         (B) Principles of Consolidation
         -------------------------------

         The accompanying consolidated financial statements include the accounts
         of CyberAds, Inc., its wholly owned subsidiaries NetAds of South
         Florida, Inc., and IDS Cellular, Inc., collectively, (the "Company").
         All significant intercompany transactions and balances have been
         eliminated in consolidation.

         (C) Use of Estimates
         --------------------

         In preparing financial statements in conformity with accounting
         principles generally accepted in the United States of America,
         management is required to make estimates and assumptions that affect
         the reported amounts of assets and liabilities and the disclosure of
         contingent assets and liabilities at the date of the financial
         statement and revenues and expenses during the reported period. Actual
         results could differ from those estimates.

         (D) Cash and Cash Equivalents
         -----------------------------

         For purposes of the cash flow statement, the Company considers all
         highly liquid investments with original maturities of three months or
         less at the time of purchase to be cash equivalents.

                                      F-6
<PAGE>
                         CYBERADS, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             AS OF DECEMBER 31, 2001
                             -----------------------

         (E) Reclassifications
         ---------------------

         Certain 2000 balances have been reclassified to conform to the 2001
         presentation.

         (F) Property and Equipment
         --------------------------

         Property and equipment are stated at cost, less accumulated
         depreciation. Depreciation is provided for over the estimated useful
         life of the assets of five years. Repairs and maintenance that do not
         extend the useful life of the asset are charged to expenses in the
         period they occur. Leasehold improvements are amortized over the
         shorter of the term of the related lease or their useful life. The
         Company continually reviews property and equipment to determine that
         the carrying values are not impaired.

         (G) Inventories
         ---------------

         Inventories are valued at the lower of cost or market. Cost is
         determined using the first-in, first-out (FIFO) method. Provision for
         potentially obsolete or slow moving inventory is made based on
         management's analysis of inventory levels and future sales forecasts.

         (H) Income Taxes
         ----------------

         The Company accounts for income taxes under the Statement of Financial
         Accounting Standards No. 109 "Accounting for Income Taxes" ('SFAS
         109"). Under Statement 109, deferred tax assets and liabilities are
         recognized for the future tax consequences attributable to differences
         between the financial statement carrying amounts of existing assets and
         liabilities and their respective tax bases. Deferred tax assets and
         liabilities are measured using enacted tax rates expected to apply to
         taxable income in the years in which those temporary differences are
         expected to be recovered or settled. Under Statement 109, the effect on
         deferred tax assets and liabilities of a change in tax rates is
         recognized in income in the period that includes the enactment date.

         (I) Stock Options and Warrants
         ------------------------------

         In accordance with Statement of Financial Accounting Standards No. 123,
         ("SFAS 123") the Company has elected to account for Stock Options and
         Warrants issued to employees under Accounting Principles Board Opinion
         No. 25 ("APB Opinion No. 25") and related interpretations. The Company
         accounts for stock options and warrants issued to non-employees for
         services under the fair value method of SFAS 123.

         (J) Loss Per Share
         ------------------

         Basic and diluted net loss per common share for all periods presented
         is computed based on the weighted average common shares outstanding as
         defined by Statement of Financial Accounting Standards, No. 128,
                                      F-7
<PAGE>
                         CYBERADS, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             AS OF DECEMBER 31, 2001
                             -----------------------

         (J) Loss Per Share, Continued
         -----------------------------

         "Earnings Per Share". Common stock equivalents have not been included
         in the computation of diluted loss per share since the effect would be
         anti-dilutive. All share amounts have been retroactively restated for
         the 40 to 1 forward stock split that occurred effective April 14, 2000.

         (K) Advertising Expense
         -----------------------

         Costs incurred for producing and communicating advertising of the
         Company are charged to operations as incurred. Advertising expense,
         including promotional expenses, for the year ended December 31, 2001
         was $81,814 and for the period ended December 31, 2000 was $112,744.

         (L) Website Development Expenses
         --------------------------------

         The Company follows the Emerging Issues Task Force Issue 00-2
         "Accounting for Web Site Development Costs" in accounting for its
         website development expenses. Accordingly, costs that involve design of
         the web page and do not change the content are capitalized and
         amortized over their estimated useful life. Costs incurred in operating
         a web site that have no future benefits are expensed in the current
         period. Costs incurred in operating the website which have a future
         benefit are capitalized in accordance with the AICPA's Statement of
         Position 98-1 and amortized over the respective future periods which
         are expected to benefit from the changes.

         (M) Revenue Recognition
         -----------------------

         The Company actively seeks applications for cellular phone contracts,
         for which commissions are received either directly or indirectly from
         wireless providers. The Company recognized revenue on both a net and
         gross basis as explained below. During 2001 and 2000, the Company
         submitted applications for approval to master dealers that the Company
         has contracted with to do business. The agreements with the master
         dealers call for commissions to be paid once the consumer has received
         the phone. Under these circumstances, the Company does not bear the
         risk of loss on the cellular phone and recognizes only a net commission
         at the time the phone is delivered to the consumer.

         In the fourth quarter of 2001, the Company began submitting contracts
         directly to several major wireless providers. The Company maintains an
         inventory and ships phones directly to customers. Under these
         circumstances, the Company bears the risk of loss on the cellular
         phones and recognizes a gross commission and related cost of goods sold
         for the cellular phone at the time the phone is shipped. The Company's
         gross margin will vary depending on the percentage of revenue received
         directly from wireless providers or from master dealers.
                                      F-8
<PAGE>
                         CYBERADS, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             AS OF DECEMBER 31, 2001
                             -----------------------

         (N) Fair Value of Financial Instruments
         ---------------------------------------

         Statement of Financial Accounting Standards No. 107, "Disclosure About
         Fair Value of Financial Instruments," requires certain disclosures
         regarding the fair value of financial instruments. Cash and cash
         equivalents, accounts receivable, accounts payable, accrued
         liabilities, factor payable and loans and advances payable to related
         and non-related parties are reflected in the financial statements at
         fair value because of the short-term maturity of the instruments.

         (O) New Accounting Pronouncements
         ---------------------------------

         The Financial Accounting Standards Board has recently issued several
         new Statements of Financial Accounting Standards. SFAS No. 141,
         "Business Combinations" supersedes APB Opinion No. 16 and various
         related pronouncements. Pursuant to the new guidance in SFAS No. 141,
         all business combinations must be accounted for under the purchase
         method of accounting; the pooling-of-interests method is no longer
         permitted. SFAS No. 141 also establishes new rules concerning the
         recognition of goodwill and other intangible assets arising in a
         purchase business combination and requires disclosure of more
         information concerning a business combination in the period in which it
         is completed. This statement is generally effective for business
         combinations initiated on or after July 1, 2001.

         SFAS No. 142, "Goodwill and Other Intangible Assets" supercedes APB
         Opinion No. 17 and related interpretations. SFAS No. 142 establishes
         new rules on accounting for the acquisition of intangible assets not
         acquired in a business combination and the manner in which goodwill and
         all other intangibles should be accounted for subsequent to their
         initial recognition in a business combination accounted for under SFAS
         No. 141. Under SFAS No. 142, intangible assets should be recorded at
         fair value. Intangible assets with finite useful lives should be
         amortized over such period and those with indefinite lives should not
         be amortized. All intangible assets being amortized as well as those
         that are not, are both subject to review for potential impairment under
         SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets and
         for Long-Lived Assets to be Disposed of. " SFAS No. 142 also requires
         that goodwill arising in a business combination should not be amortized
         but is subject to impairment testing at the reporting unit level to
         which the goodwill was assigned to at the date of the business
         combination.

         SFAS No. 142 is effective for fiscal years beginning after December 15,
         2001 and must be applied as of the beginning of such year to all
         goodwill and other intangible assets that have already been recorded in
         the balance sheet as of the first day in which SFAS No. 142 is
         initially applied, regardless of when such assets were acquired.
         Goodwill acquired in a business combination whose acquisition date is
         on or after July 1, 2001, should not be amortized, but should be
         reviewed for impairment pursuant to SFAS No. 121, even though SFAS No.
         142 has not yet been adopted. However, previously acquired goodwill
         should continue to be amortized until SFAS No. 142 is first adopted.

                                      F-9
<PAGE>
                         CYBERADS, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             AS OF DECEMBER 31, 2001
                             -----------------------

         SFAS No. 143 "Accounting for Asset Retirement Obligations" establishes
         standards for the initial measurement and subsequent accounting for
         obligations associated with the sale, abandonment, or other type of
         disposal of long-lived tangible assets arising from the acquisition,
         construction, or development and/or normal operation of such assets.
         SFAS No. 143 is effective for fiscal years beginning after June 15,
         2002, with earlier application encouraged.

         The adoption of these pronouncements will not have a material effect on
         the Company's financial position or results of operations.

NOTE 2   ACCOUNTS RECEIVABLE
------   -------------------

         Accounts receivable at December 31, 2001 consisted of the following:

         Accounts receivable                                  $     2,699,737
         Less allowance for doubtful accounts                         (82,100)
         Less reserve for chargebacks                                (582,710)
                                                              ---------------
                                                              $     2,034,927
                                                              ===============

         Bad debts for the year ended December 31, 2001 and for the period from
         April 12, 2000 (inception) to December 31, 2000 were $399,869 and $0,
         respectively.

NOTE 3   PROPERTY AND EQUIPMENT
------   ----------------------

         Property and equipment at December 31, 2001 consisted of the following:

         Furniture and fixtures                                         8,625
         Leasehold improvements                                         5,684
         Computer equipment                                            34,467
         Less accumulated depreciation                                 (6,813)
                                                              ---------------
                                                              $        41,963
                                                              ===============

         Depreciation expense for the year ended December 31, 2001 and for the
         period from April 12, 2000 (inception) to December 31, 2000 were $5,558
         and $1,255, respectively.

NOTE 4   ACCRUED EXPENSES
------   ----------------

         The following schedule reflects accrued expenses at December 31, 2001:

         Accrued payroll and payroll taxes                            144,704
         Deferred commissions payable                                  29,431
                                                              ---------------
                                                                      174,135
                                                              ===============
                                      F-10
<PAGE>
                         CYBERADS, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             AS OF DECEMBER 31, 2001
                             -----------------------

NOTE 5   FACTOR PAYABLE
------   --------------

         On October 17, 2001, the Company entered into a one-year accounts
         receivable factoring agreement with Rockland Credit Finance, LLC. Under
         the agreement, the factor will advance 50% of the value of accounts
         receivable from certain customers (at the factor's discretion) of the
         Company. The value of the accounts receivable upon which Rockland will
         advance funds is based on the lowest plan commission the Company is to
         receive from the carrier (even though actual commissions are higher).
         The Company is charged a fixed and variable percentage fee based upon
         the length of the collection period. All of the Company's accounts
         receivable, inventories and computer hardware are pledged as collateral
         under this agreement. In addition, both the Chief Executive Officer and
         the President have personally guaranteed the funds due to Rockland.
         Under the terms of the agreement, the Company must pay a discount fee
         on a minimum of $50,000 of advances per month. As of December 31, 2001,
         the Company owed Rockland $547,041 on gross accounts receivable of
         $1,978,060. During 2001, the Company incurred $62,115 in factoring
         expense.

NOTE 6   ADVANCES FROM RELATED PARTIES
------   -----------------------------

         The following schedule reflects advances due to related parties at
         December 31, 2001:
<TABLE>
<CAPTION>
<S>                                                                                               <C>
         Advance due to a corporation owned by the Chief Executive Officer of the                 $       598,100
          Company, non-interest bearing, due on demand and unsecured

         Advance due to the Chief Executive Officer of the Company, non-interest
          bearing, due on demand and unsecured                                                            433,100
                                                                                                  ---------------
                                                                                                  $     1,031,200
                                                                                                  ===============
</TABLE>
         In consideration of interest, the Company issued options to the Chief
         Executive Officer in January 2002 (See Note 19). Accordingly, under APB
         25, no expense was recognized.

NOTE 7   DUE TO OFFICERS
------   ---------------

         Due to officers consists of amounts due to three officers in the
         aggregate amount of $152,250. The amounts due are for consulting
         services rendered to the Company.

NOTE 8   COMMITMENTS AND CONTINGENCIES
------   -----------------------------

         (A) Operating Leases
         --------------------

         The Company occupied four different locations during 2001. The Company
         initially occupied 1,300 square feet of office space from International
         Dialing Services, Inc. (an affiliated company) for its executive

                                      F-11
<PAGE>
                         CYBERADS, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             AS OF DECEMBER 31, 2001
                             -----------------------

         headquarters at no cost to the Company. Accordingly, for the four
         months ended April 30, 2001 and for the period from April 12, 2000
         (inception) to December 31, 2000 the Company accrued $1,550 per month
         for this space or a total of $6,200 and $13,175, respectively (See Note
         9(E)). Commencing May 1, 2001, the Company began making actual rent
         payments for this space on a month to month basis of $1,989.

         During April 2001, the Company began subleasing additional space from
         International Dialing Services, Inc. on a month to month basis of
         $1,500.

         During September 2001, the Company entered into a three-year lease with
         Dettman Fleming Properties for 3,570 square feet. Monthly rental under
         this agreement is $5,653. Within the same building as the Dettman
         property, the Company entered into a one-year lease agreement with
         United States Socket Screw Company for 869 square feet. Monthly rental
         under this agreement is $1,590. The above leases were terminated in
         March and May of 2002 upon the Company moving into its new facilities
         (See Note 19).

         Future minimum lease payments under the operating leases at December
         31, 2001 and under the new operating lease (See Note 19) consist of the
         following:

                                          Year
                                          2002                     $  174,909
                                          2003                        215,000
                                          2004                        235,000
                                          2005                         60,000
                                                                   ----------
                                                                   $  684,909
                                                                   ==========

         Rent expense for the year ended December 31, 2001 and for the period
         from April 12, 2000 (inception) to December 31, 2000 totaled $67,842
         and $13,175, respectively.

         (B) Consulting Agreements
         -------------------------

         On June 2, 2000, the Company entered into a one-year agreement with a
         consultant to provide strategic planning services (See Note 14). The
         agreement calls for the consultant to receive 300,000 shares of fully
         vested and non-forfeitable common stock as well as annual compensation
         of $24,000. The agreement was terminated early due to non-performance
         after $10,000 of compensation was paid and no balance is due as of
         December 31, 2001. The 300,000 shares were issued in 2000 and valued
         for financial accounting purposes at $300,000, the fair market value of
         the common stock on the grant date based on concurrent cash offerings
         (See Note 9(C)). Consulting expense of $150,000 was recognized during
         each of the periods ended December 31, 2001 and 2000.

         On June 7, 2000, the Company entered into a consulting agreement with
         an officer of the Company whereby the officer received as a commission
         10% of all monies raised by him in the sale of the Company's stock. In
         addition, the consultant received warrants to purchase 50,000 shares at

                                      F-12

<PAGE>
                         CYBERADS, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             AS OF DECEMBER 31, 2001
                             -----------------------

         $1.00 (See Note 10(B)). Since the individual is an employee, the
         warrants are accounted for under APB 25 and no compensation expense was
         recognized for the period ended December 31, 2000.
         On September 1, 2000, the Company entered into agreements with two
         officers of the Company whereby each officer received as a commission
         10% of all monies raised by the officer in the sale of the Company's
         stock.

         On September 1, 2000, the Company entered into five one-year agreements
         with employee/consultants to perform the marketing, website
         development, and management of the Company. Four of these consultants
         are officers of the Company and include all three members of the Board
         of Directors. The agreements call for an aggregate of $282,000 to be
         paid annually. In addition, each consultant received an option to
         purchase 50,000 shares for an aggregate of 250,000 options of the
         Company's stock at $1.00. The options were originally due to expire
         September 1, 2001, but have been extended an additional four years,
         (See Note 10(A)).

         Effective November 1, 2000, the Company entered into a one-year
         agreement with an individual who is an officer of the Company. The
         agreement calls for the individual to perform duties relating to the
         management and organization of the Company. The agreement calls for
         $42,000 to be paid annually. In addition, the officer received an
         option to purchase 50,000 shares of the Company's stock at $1.00. The
         options were originally to expire November 1, 2001, but have been
         extended an additional four years, (See Note 10(A)).

         On September 9, 2001, the Company entered into a one-year agreement
         with a consultant to assist with matters relating to the management and
         organization of the Company. The agreement calls for 90,000 shares of
         common stock as compensation. (See Note 9(C)).

         On November 29, 2001, the Company entered into an agreement with a
         consultant to assist the Company acquire direct cellular contracts with
         additional carriers. The Company issued options to purchase up to
         700,000 shares of common stock at an exercise price of $0.60 and $0.80
         (See Note 10(A)).

NOTE 9  STOCKHOLDERS' DEFICIENCY
------  ------------------------

         (A) Common Stock
         ----------------

         In April 2000, the Company authorized 100,000 shares of common stock at
         $0.001 par value to be issued in one or more series with such rights,
         preferences and restrictions as determined by the Board of Directors at
         the time of authorization of issuance. On April 14, 2000, the company's
         stock split 40 for 1. In June 2000, the Company increased its
         authorized shares of common stock to 20,000,000. On March 13, 2001, the
         Company increased its authorized shares of common stock to 50,000,000
         and authorized 5,000,000 shares of preferred stock at $.001 par value.

                                      F-13
<PAGE>
                         CYBERADS, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             AS OF DECEMBER 31, 2001
                             -----------------------

         (B) Stock Issued for Cash
         -------------------------

         During the period from April 12, 2000 (inception) to December 31, 2000,
         the Company issued 410,000 shares of common stock for an aggregate of
         $365,055 (net of offering costs of $44,945), or an average of $1.00 per
         share before offering costs.

         During 2001, the Company issued 59,777 shares of common stock for an
         aggregate of $53,800 (net of offering costs of $5,977), or an average
         of $1.00 per share before offering costs.

         (C) Stock Issued for Services
         -----------------------------

         In April 2000, the Company issued 5,025,000 shares of common stock to
         its founders for $5,025. A subscription receivable for $5,025 was
         recorded at December 31, 2000. During 2001, the subscription receivable
         of $5,025 was satisfied by services rendered.

         In June 2000, the Company issued 300,000 shares of common stock, valued
         at the fair market value on the grant date based on the concurrent cash
         offering price, for consulting fees due to the Company's financial
         advisor of $300,000 (See Note 8(B)). During 2001 and 2000, $150,000 and
         $150,000 respectively, was recognized as consulting expense.

         On September 9, 2001, the Company entered into a one-year agreement
         with Dow Media, Inc. ("Dow") under which Dow will provide management
         and organizational services. Dow received a total of 90,000 shares of
         common stock in exchange for these services (See Note 8(B)). During
         2001, consulting expense of $90,000 was recognized accordingly.

         (D) Stock Issued in Acquisition
         -------------------------------

         In December 2000, the Company authorized the issuance of 7,500,000
         shares of common stock to acquire all the outstanding shares of IDS
         Cellular, Inc. (See Note 13).

         (E) In-Kind Contribution
         ------------------------

         From inception through April 2001, a company owned by the Chief
         Executive Officer provided office space and utilities to the Company.
         The Company was not required to pay for its use of the facilities.
         Accordingly, the Company recognized $6,200 and $13,175 of expenses
         during 2001 and 2000, respectively, for these contributed items with an
         offsetting increase in additional paid-in capital. Management estimated
         the value of the contributed items. The Company assumed the lease for
         the remainder of 2001 (See Note 8(A)).

                                      F-14

<PAGE>
                         CYBERADS, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             AS OF DECEMBER 31, 2001
                             -----------------------

NOTE 10  STOCK OPTIONS AND WARRANTS
-------  --------------------------

         (A) Common Stock Options
         ------------------------

         On November 1, 2001, the Company adopted the 2001 Stock Option Plan,
         (the "Plan") which authorized the issuance of up to 500,000 shares of
         common stock to employees, consultants, representatives, officers and
         directors of the Company. As of December 31, 2001, no shares have been
         issued under the Plan.

         During 2000, the Company granted 300,000 stock options, to certain
         employees. The Company applies APB Opinion No. 25 and related
         interpretations in accounting for stock options issued to employees.
         Accordingly, no compensation cost has been recognized for options
         issued to employees. Had compensation cost been determined based on the
         fair market value at the grant date, consistent with SFAS 123, the
         Company's net loss for the year ended December 31, 2001 and 2000 would
         have changed to the pro-forma amount indicated below.

         In September 2001, the Company extended by four years the expiration
         date of options issued to employees in 2000. The options were re-priced
         and under APB 25, no expense was recognized.
<TABLE>
<CAPTION>
                                                                                     2001                  2000
                                                                              -----------------     -----------------
<S>                                                                           <C>                   <C>
         Net Loss                           As Reported                       $    (1,026,659)      $      (613,055)
                                            Pro Forma                              (1,050,659)             (631,055)
         Basic and Diluted Net Loss Per
          Share                             As Reported                                 (0.08)                (0.11)
                                            Pro Forma                                   (0.08)                (0.11)
</TABLE>
         In June 2001, as part of a financing arrangement, the Company issued
         options to a financial institution to purchase 300,000 shares of common
         stock at an exercise price of $0.50. Accordingly, $153,000 of expense
         was recognized as interest expense during 2001.

         In November 2001, the Company issued options to non-employees to
         purchase 700,000 shares of common stock at exercise prices of $0.60 and
         $0.80. Accordingly, $249,000 of expense was recognized as consulting
         expense and was included in general and administrative expenses during
         2001.

         The effect of applying Statement No. 123 is not likely to be
         representative of the effects on reported net loss for future years due
         to, among other things, the effects of vesting.

                                      F-15
<PAGE>
                         CYBERADS, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             AS OF DECEMBER 31, 2001
                             -----------------------

         The fair value of each option grant is estimated on the date of grant
         using the Black-Scholes option pricing model in accordance with SFAS
         123 with the following weighted average assumptions used for grants in
         2001 and 2000, respectively: dividend yield of zero for all years;
         expected volatility of 0.1% and 0.1%; risk-free interest rates of 2.0%
         and 6.125%; expected lives of one to four years.

         A summary of the Company's stock options as of December 31, 2001 and
         2000, and the changes during the years then ended is presented below:
<TABLE>
<CAPTION>
                                                                        2001                           2000
                                                            --------------------------      -------------------------
                                                                             Weighted                       Weighted
                                                                             Average                         Average
                                                                             Exercise                       Exercise
        Fixed Options                                         Shares           Price          Shares          Price
        --------------------------------------------        ----------       ---------      ---------      ----------
<S>                                                            <C>           <C>                           <C>
        Outstanding at beginning of year                       300,000       $    1.00             --      $       --
        Granted (includes re-priced options in 2001)         1,000,000            0.61        300,000            1.00
        Forfeited                                                   --              --             --              --
        Expired                                                     --              --             --              --
        Exercised                                                   --              --             --              --
                                                            ----------       ---------      ---------      ----------
        Outstanding at end of year                           1,300,000       $    0.70        300,000      $     1.00
                                                            ==========       =========      =========      ==========

        Options exercisable at year end                      1,300,000                        300,000
                                                            ==========                      =========

        Weighted average fair value of options
         granted to employees during the year               $       --                      $    0.06
                                                            ==========                      =========

</TABLE>
<TABLE>
<CAPTION>
                                    Options Outstanding                                      Options Exercisable
           ----------------------------------------------------------------------      ------------------------------
                                     Number
                                     Average            Weighted        Weighted           Number           Weighted
                                 Outstanding at        Remaining         Average       Exercisable at        Average
                 Range of         December 31,        Contractual       Exercise        December 31,        Exercise
              Exercise Price          2001                Life            Price             2001              Price
              --------------     --------------       -----------      ----------      --------------      ----------
<S>        <C>         <C>            <C>                    <C>       <C>                  <C>            <C>
           $    0.00 - 0.99           1,000,000              2.68      $     0.61           1,000,000      $     0.61
           $    1.00 - 1.99             300,000              3.70            1.00             300,000            1.00
              -------------                           -----------      ----------                          ----------
                                 --------------                                        --------------
           $    0.00 - 1.99           1,300,000              2.92      $     0.70           1,300,000      $     0.70
                                 ==============       ===========      ==========      ==============      ==========
</TABLE>
         (B) Common Stock Warrants
         -------------------------

         In June 2000, the Company issued to an officer of the Company a
         five-year warrant to purchase up to 50,000 common shares at an exercise
         price of $1.00 per share as consideration for assistance with the sale
         of the Company's stock (See Note 8(B)). The Company accounts for the
         warrants under APB 25. Accordingly, no direct offering costs or
         compensation expenses were recognized.

                                      F-16
<PAGE>
                         CYBERADS, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             AS OF DECEMBER 31, 2001
                             -----------------------

NOTE 11  LOSS PER SHARE
-------  --------------

         A reconciliation of the numerator and denominator of the loss per share
         calculations is provided for all periods presented. The numerator and
         denominator for basic and diluted loss per share for the years ended
         December 31, 2001 and for the period from April 12, 2000 (inception) to
         December 31, 2000, is as follows:
<TABLE>
<CAPTION>
                                                                                   2001                  2000
                                                                              ---------------       ---------------
<S>                                                                           <C>                   <C>
         Numerator:
          Income (loss) from continuing operations                            $      (915,106)      $         8,379
          Loss from discontinued operations                                          (111,553)             (621,434)
                                                                              ---------------       ---------------
          Numerator for basic and diluted loss per share                      $    (1,026,659)      $      (613,055)
                                                                              ===============       ===============

         Denominator:
          Weighted average common shares                                           13,314,033             5,607,500
          Common stock equivalents (a)                                                     --                    --
                                                                              ---------------       ---------------
          Denominator for basic and diluted loss per share                         13,314,033             5,607,500
                                                                              ===============       ===============

          Basic and diluted loss per share                                    $         (0.08)      $         (0.11)
                                                                              ===============       ===============
</TABLE>
(a)           Options and warrants to purchase an aggregate of 1,350,000 shares
              of common stock at prices between $0.50 and $1.00 per share were
              outstanding at December 31, 2001, but were not included in the
              computation of diluted loss per share because the effect would be
              anti-dilutive. Options and warrants to purchase an aggregate of
              350,000 shares of common stock at $1.00 per share were outstanding
              at December 31, 2000, but were not included in the computation of
              diluted loss per share because the effect would be anti-dilutive.

NOTE 12  INCOME TAXES
-------  ------------

         Income tax expense (benefit) for the period ended December 31, 2001 and
         2000 is summarized as follows:
<TABLE>
<CAPTION>
                                                                                      2001                 2000
                                                                               ----------------      ---------------
<S>                                                                         <C>                   <C>
         Current:
           Federal                                                             $             --      $            --
           State                                                                             --                   --
                                                                               ----------------      ---------------
         Income tax expense (benefit)                                          $             --      $            --
                                                                               ================      ===============
</TABLE>
         The Company's tax expense differs from the "expected" tax expense for
         the period ended December 31, 2001 and 2000 as follows:

                                      F-17
<PAGE>
                         CYBERADS, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             AS OF DECEMBER 31, 2001
                             -----------------------
<TABLE>
<CAPTION>
                                                                                     2001                 2000
                                                                               ---------------       --------------
<S>                                                                            <C>                   <C>
         U.S. Income tax provision (benefit)                                   $      (349,100)      $     (208,400)
         Effect of unused net operating loss carryforward                              349,100              208,400
                                                                               ---------------       --------------
                                                                               $            --       $           --
                                                                               ===============       ==============
</TABLE>
         The tax effects of temporary differences that give rise to significant
         portions of deferred tax assets and liabilities at December 31, 2001
         and 2000 are as follows:
<TABLE>
<CAPTION>
                                                                                     2001                  2000
                                                                               ---------------        -------------
<S>                                                                            <C>                    <C>
         Deferred tax assets:
           Net operating loss carryforward                                     $       557,500        $     208,400
                                                                               ---------------        -------------
              Total gross deferred tax assets                                          557,500              208,400
           Less valuation allowance                                                   (557,500)            (208,400)
                                                                               ---------------        -------------
                                                                               $            --        $          --
                                                                               ===============        =============
</TABLE>
         At December 31, 2001, the Company had net operating loss carryforwards
         of $1,639,714, for U.S. Federal Income Tax purposes available to offset
         future taxable income expiring on various dates through 2021.

         The net change in the valuation allowance during the period ended
         December 31, 2001 was an increase of $349,100.

NOTE 13  BUSINESS COMBINATION
-------  --------------------

         Effective December 31, 2000, the Company acquired IDS Cellular, Inc. by
         issuing 7,500,000 shares of its common stock for all of the outstanding
         common stock of IDS Cellular. The merger has been accounted for as a
         business combination of entities under common control because both
         entities had common ownership interests, and accordingly, the
         consolidated financial statements have been prepared to include the
         combined results of operations, financial position and cash flows of
         the Company and its subsidiaries for the entire period presented. The
         following information presents certain income statement data of the
         entities indicated below for the period preceding the merger.
<TABLE>
<CAPTION>
                                                                                                         2000
                                                                                                   ----------------
<S>      <C>                                                                                       <C>
         Net Sales
           CyberAds and NetAds                                                                     $             40
           IDS Cellular (See Note 8)                                                                         47,508
                                                                                                   ----------------
                                                                                                   $         47,548
                                                                                                   ================
         Net Income (Loss)
           CyberAds and NetAds                                                                     $       (621,434)
           IDS Cellular                                                                                       8,379
                                                                                                   ----------------
                                                                                                   $       (613,055)
                                                                                                   ================
</TABLE>
                                      F-18
<PAGE>
                         CYBERADS, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             AS OF DECEMBER 31, 2001
                             -----------------------

         There were no material transactions between CyberAds and IDS Cellular
         prior to the merger. The effects of conforming IDS Cellular accounting
         policies to those of Cyber Ads were not material.

NOTE 14  RELATED PARTIES
-------  ---------------

         During 2000, the Company had consulting agreements with each of the
         Company's five officers, which included the three members of the Board
         of Directors. During 2001, the term of these agreements were extended.
         See Notes 6, 7, 8, 9 and 10 for additional related party disclosures.

         During 2000, the Company received more than half of its revenue from a
         corporation that was 49% owned by two individuals who are
         director/officers of the Company. During 2001, the Company settled a
         receivable of approximately $300,000 with this corporation for
         approximately $50,000. Subsequently, the Company issued to the majority
         stockholder of this corporation stock options to purchase up to 700,000
         shares of common stock (See Note 10). During 2001, there were no
         significant revenues from related parties.

NOTE 15  SEGMENT INFORMATION AND DISCONTINUED OPERATIONS
-------  -----------------------------------------------

         During a portion of 2001 and all of 2000, the Company operated in two
         business segments, Internet Database Services and Cellular Phone
         Contracts. During the fourth quarter of 2001, the Company decided to
         dispose of the Internet Database Services segment. The Company has
         ceased to support this operational segment. As of the date of the
         balance sheet, the assets of this segment have been transferred to the
         Cellular Phone Contracts segment. Accordingly, segment information is
         not presented and the income statement has been updated to reflect the
         discontinued operations.

NOTE 16  CONCENTRATIONS OF CREDIT RISK
-------  -----------------------------

         The Company relied on four and two customers for approximately 78% and
         100% of sales for the year ended December 31, 2001 and for the period
         from April 12, 2000 (inception) to December 31, 2000, respectively. At
         December 31, 2001 and 2000 accounts receivable from those customers
         totaled $2,013,400 and $47,508, respectively.

NOTE 17  SIGNIFICANT FOURTH QUARTER ADJUSTMENTS
-------  --------------------------------------

         In the fourth quarter of 2001, the Company recorded significant
         adjustments that increased the net loss by approximately $124,000.
         These adjustments included $450,000 related to an increase in the
         allowance for sales returns (chargebacks), $405,000 related to the
         accrual of additional sales, and $79,000 related to an increase in
         interest expense for options issued related to advances made to the
         Company.

                                      F-19
<PAGE>
                         CYBERADS, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             AS OF DECEMBER 31, 2001
                             -----------------------

NOTE 18  GOING CONCERN
-------  -------------

         As reflected in the accompanying financial statements, the Company's
         current period loss, working capital deficiency, and stockholders'
         deficiency of $1,026,659, $366,422, and $324,459, respectively, along
         with a cash flow deficiency from operations of $1,656,403, raise
         substantial doubt about its ability to continue as a going concern. The
         financial statements do not include any adjustments that might be
         necessary if the Company is unable to continue as a going concern.

         The Company anticipates net revenues from operations of approximately
         $12,000,000 for the year ending December 31, 2002. The Company's cash
         requirements for the next twelve months is expected to be between
         $9,000,000 and $10,200,000. The Company plans to raise additional funds
         through loans from third parties and the sale of common stock for cash.
         The Company is of the opinion that the cash generated from their
         resources will be sufficient to provide adequate liquidity and capital
         resources.

         The ability of the Company to continue as a going concern is dependent
         on the Company's ability to raise additional capital and implement its
         business plan. Management believes that when it accomplishes the steps
         outlined above that the Company would have sufficient liquidity to
         remain viable for at least twelve months following the date of these
         financial statements.

NOTE 20  SUBSEQUENT EVENTS
-------  -----------------

         On January 22, 2002, the Company designated 625,000 shares of the
         preferred stock as Series A with a stated value of $1.00 per share. The
         Company issued the 625,000 Series A preferred shares to the Company's
         Chief Executive Officer in return for a note receivable in the amount
         of $625,000 bearing 4% interest due on or before January 21, 2012. The
         preferred stock has preferential liquidation rights, is entitled to
         eight votes per preferred share, is redeemable at the stated value per
         share, and is convertible into common stock at a rate of four shares of
         common stock for each preferred share.

         During January 2002, the Company issued options to purchase an
         aggregate of 8,225,000 shares of common stock. The options range from
         six months to five years, and have exercise prices of $0.25 to $2.00.

         In January 2002, Cyad Cellular Distributors, Inc. was formed and the
         Company received 80% of the shares issued at Cyad's inception. Cyad
         shall represent a new segment of the Company beginning in 2002 and will
         be in the business of wholesaling cellular phones.

         On April 1, 2002, the Company entered into a three-year lease agreement
         with 6001, LLC for new office space to consolidate all of its operating
         facilities. Monthly rental under this agreement is $16,667, $18,333 and
         $20,000 during the first, second, and third year, respectively (future
         minimum lease payments are included in Note 8(A)).

                                      F-20

<PAGE>


                                  EXHIBIT INDEX


Exhibit No.    Description of Document
-----------    -----------------------

   4.3         Promissory Note issued by Levinson in favor of CyberAds,
               dated January 21, 2002