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

                  For the fiscal year ended December 31, 2001

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

               For the transition period from _______ to ________

                               2UONLINE.COM, INC.
             (Exact name of registrant as specified in its charter)

                      DELAWARE                         52-2132622
            (State or other jurisdiction            (I.R.S. Employer
          of incorporation or organization)        Identification No.)

               1288 Alberni Street, Suite 806
              Vancouver, British Columbia Canada                V6E 4N5
      (Address of registrant's principal executive offices)    (Zip Code)

                                  604.664.0484
              (Registrant's Telephone Number, Including Area Code)

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

                 Title of Each Class to be so Registered:  None

      Name of Each Exchange on which Each Class is to be Registered:  None

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

                         Common Stock, Par Value $.001
                                (Title of Class)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 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      No

Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB.

State issuer's revenues for its most recent fiscal year. $1,286

State the aggregate market value of the voting and non-voting common equity held
by non-affiliates computed by reference to the price at which the common equity
was sold, or the average bid and asked price of such common equity, as of a
specified date within the past 60 days. (See definition of affiliate in Rule
12b-2 of the Exchange Act.) As of November 30, 2001, $437,098

As of December 31, 2001, there were 31,597,500 shares of the issuer's $.0001 par
value common stock issued and outstanding.

Documents incorporated by reference.  There are no annual reports to security
holders, proxy information statements, or any prospectus filed pursuant to Rule
424 of the Securities Act of 1933 incorporated herein by reference.

Transitional Small Business Disclosure format (check one):  Yes __  No _X_


                              2UOnline.com., Inc.
                             A Delaware corporation

                     Index to Annual Report on Form 10-KSB

<table>
<caption>

     <c>                                                                                   <c>
ITEM NUMBER and CAPTION                                                                       PAGE

PART I

1.      Description of Business..................................................................4

2.      Description of Property.................................................................11

3.      Legal Proceedings.......................................................................11

4.      Submission of Matters to a Vote of Security Holders.....................................12

5.      Market Price for the Registrant's Common Equity and Related Stockholders Matters........12

6.      Management's Discussion and Analysis of Financial Condition and
        Results of Operations...................................................................13

7.      Financial Statements......................................................F-1 through F-14

8.      Changes in and Disagreements with Accountants...........................................15

9.      Directors, Executive Officers, Promoters and Control Persons............................16

10.     Executive Compensation - Remuneration of Directors and Officers.........................18

11.     Security Ownership of Certain Beneficial Owners and Management..........................18

12.     Certain Relationships and Related Transactions..........................................19


                                    PART II.

EXHIBITS

        Index to Exhibits
        Exhibits..................................................................E-1 through E-26

SIGNATURES......................................................................................23

</table>

<PAGE>4

PART I

ITEM 1. DESCRIPTION OF BUSINESS.

OUR BACKGROUND. 2UOnline.com, Inc., formerly Power Direct, Inc., was
incorporated in the State of Delaware on September 13, 1993, and we maintain our
principal executive offices at 1288 Alberni Street, Suite 806, Vancouver,
British Columbia, Canada V6E 4N5. Our offices in the United States are located
at 4291 Meridian Street, Suite 29, Bellingham, Washington 98226.

We changed our name from Power Direct, Inc., to 2UOnline.com, Inc. by filing a
Certificate of Amendment to our Certificate of Incorporation on January 31,
2000. We also changed our trading symbol from "PWDR" to "TWOU" in order to
reflect our decision to shift our focus from oil and gas production to Internet-
related activities. Our symbol has since been changed to "TWOUE".  On or about
April 18, 2000, we were removed from the Over-the-Counter Bulletin Board
("OTCBB") for failure to comply with NASD Rule 6530, which requires any company
listed on the OTCBB to be current in its public reporting obligations pursuant
to the Securities and Exchange Act of 1934. We are currently listed on the Pink
Sheets maintained by the NASD under the symbol "TWOU".  We have filed several
amendments to our Registration Statement on Form 10-SB in an attempt to be re-
listed on the OTCBB and have received a recent comment letter dated February 8,
2002. We have been instructed by the SEC to respond to the comment letter in
this Annual Report on Form 10-KSB for the year-ended December 31, 2001.

We were originally incorporated to engage in any lawful act or activity for
which corporations may be organized under the General Corporation Law of
Delaware. We were inactive from September 13, 1993, through November 1998, when
we began the process of identifying potential business interests, including, but
not necessarily limited to, interests in oil and natural gas producing
properties.

OUR BUSINESS. Our initial focus was on the development of oil and natural gas
properties.  In this regard, we purchased interests in two properties; one in
the United States and one in Canada. In or around December 1999, we decided to
review the focus of our business, primarily the direction we would take with our
various oil and gas projects. We decided that maintaining interests in oil and
gas producing properties should no longer be our focus. Due to the growth of the
Internet, we decided to pursue Internet-related activities. We determined that
Internet-related activities would provide a positive revenue stream sooner than
oil and gas producing activities.

THE LAK RANCH PROPERTY. On January 15, 1999, we entered into a letter of intent
with Rising Phoenix Development Group Ltd., a Canadian corporation, located in
Vancouver, British Columbia, Canada to acquire all the assets of Rising Phoenix,
including that company's interest in the oil and natural gas rights on 6,360
acres located in the Powder River Basin of eastern Wyoming, known as the LAK
Ranch property. Such interest included Rising Phoenix's interest in a Joint
Venture Contract with Derek Resources Corporation. Under the Joint Venture
Agreement, Derek Resources and Rising Phoenix were to jointly operate the
Wyoming Property. On or about November 15, 1999, we entered into a definitive
asset purchase and sale agreement with Rising Phoenix that memorializes the
terms and conditions contained in the letter of intent.

The letter of intent required us to, among other things, pay Rising Phoenix
$75,000 as well as issue 3,800,000 shares of our common stock to Rising Phoenix
(valued at $1,520,000). We also issued 800,000 shares of our common stock to
Jeff Shear (400,000 shares) and Frank Cecchin (400,000 shares) as a "finder's
fee". Mr. Shear and Mr. Cecchin, other than their share ownership, are not
affiliated with us. The 800,000 shares have been valued at $240,000. An
"Assignment of Working Interest in Oil and Gas Lease was accepted for filing  on
October 5, 2000 in the Offices of County Clerk for Weston County, Wyoming,
whereby Rising Phoenix's Working Interest in the Wyoming Property was
transferred and assigned to us. On September 20, 2000, we signed an "Asset
Purchase and Sale Agreement" with ASDAR Inc. (now "Precise Life Sciences"), a
Nevada corporation, whereby we sold all of our working interest in the Wyoming
Property to Precise Life Sciences for five million (5,000,000) shares of Precise
Life Science's common stock.

On October 13, 2000, an "Assignment of Working Interest in Oil and Gas Lease"
was filed in the Offices of County Clerk for Weston County, Wyoming, whereby our
working interest in the Wyoming Property was transferred and assigned to Precise
Life Sciences and Precise Life Sciences issued five million (5,000,000)
restricted shares of its common stock to us.  At the time of the transaction
with Precise Life Sciences, Jack Sha was our president and a member of our board
of directors as well as an officer and director of Precise Life Sciences.
Accordingly, the assignment was recorded as a non-monetary related party
transaction which under ABP 29 was recorded at the original cost paid to Rising
Phoenix in the amount of $1,835,000, which represents the sum of the cash paid
$75,000, the value of the 3,800,000 shares issued to Rising Phoenix for the
acquisition $1,520,000 and the value of 800,000 shares issued as a finder's fee
$240,000. The valuation of the LAK Ranch Property was made by our management and
was considered as a reasonable valuation by our auditors.

Prior to the acquisition of the LAK Ranch Property, Tek Master Ltd. owned 49.6%
of the issued and outstanding common stock of Precise Life Sciences and, as
such, was the largest shareholder of Precise Life Sciences. Tek  Master Ltd. is
not affiliated with us. After the acquisition of the LAK Ranch Property by
Precise Life Sciences, Tek Master Ltd. owned 19.5% of Precise Life Sciences'
issued and outstanding common stock and we owned 48.7% of Precise Life Sciences'
issued and outstanding common stock. We are not affiliated with Tek Master Ltd.

PRECISE LIFE SCIENCES (FORMERLY ASDAR GROUP). Precise Life Sciences was formed
under the laws of the State of Nevada on November 29, 1983 under the General
Corporation Law of Nevada. Precise Life Sciences presently owns interests in oil
and gas properties located in Wyoming and California. Precise Life Sciences
recently changed its name from ASDAR Group to Precise Life Sciences in
recognition that it will pursue business opportunities in the development and
commercialization of medical-related technology. Precise Life Sciences is a
public company that trades on the NASD OTCBB under the symbol "PSLF". The
following is a summary of certain financial information for Precise Life
Sciences at December 31, 2001.

                                           2001            2000
                                          --------      ----------
Oil and Gas interests                   $  300,001    $  1,646,633
Total Assets                            $  548,660    $  1,707,953
Revenues                                $        0    $          0
Working Capital (deficiency)            $   73,723    $    (34,148)
Stockholders Equity                     $  432,474    $  1,612,485

THE ALBERTA, CANADA PROPERTY. On January 26, 1999, we signed a letter of
agreement with Vertizontal Energy Resources, Inc., formerly I.T.A. Enterprises,
Inc., a privately held Alberta, Canada company ("Vertizontal Energy").
Vertizontal Energy was looking for joint venture partners to re-enter a well
located in Alberta and we were looking to acquire an oil and gas project of
merit. An authority for expenditure to complete the re-entry was used as the
basis to acquire a 42% working interest in a natural gas project in west central
Alberta, Canada. The letter of agreement required us to provide 42% of the costs
for the three-phase project, which were estimated in the letter of agreement to
be $131,545.00. We advanced Vertizontal Energy a total of $42,793.00 toward
costs on the Alberta Property project. Vertizontal Energy is arms length to
2Uonline.com and is controlled by Nicholas Baiton, P.Eng., president of
Vertizontal Energy. No fairness opinion or shareholder approval was sought for
the acquisition.

On November 30, 2000, we signed a "Petroleum, Natural Gas and General Rights
Conveyance" Agreement with Allstar Energy Limited, a privately held
Saskatchewan, Canada corporation ("Allstar Energy"), whereby we sold all of our
interest in the Alberta Property to Allstar Energy for $47,501.00. We signed an
"Assignment and Novation Agreement", whereby we assigned our working interest to
Allstar Energy. Prior to this transaction, we had decided to concentrate our
efforts on internet activities and desired to sell our interests in this
property and the LAK Ranch property (see LAK Ranch Property above). Allstar
Energy expressed interest in acquiring our interest. Because we were able to
recover more than our costs on the property from Allstar Energy, we used this as
the basis for consummating the agreement. Allstar Energy is arms length
2Uonline.com and controlled by Dan Drobot, president of Allstar Enerty. No
fairness opinion or shareholder approval was sought for the disposition.

THE PROPOSED LANSOURCE ACQUISITION. On February 15, 1999, we signed a letter of
intent to acquire and own up to a 51% ownership interest in LANSource
Technologies, Inc., a Canadian company ("LANSource").  LANSource is a developer
of fax and data communications software.  In order to purchase the first 12.5%
ownership interest in LANSource, on March 1, 1999, we provided LANSource with a
non-refundable deposit of $200,885.

The letter of intent contemplated that on March 31, 1999, we would enter into a
formal Purchase and Sale Agreement with LANSource. The letter of intent stated
that in the event that the parties, for whatever reason, were unable to finalize
the Purchase and Sale Agreement by March 31, 1999, the whole transaction between
us and LANSource would be considered null and void and LANSource would be
entitled to retain all deposits.

Because of delays by LANSource in preparing the formal Purchase and Sale
Agreement, a formal agreement was never finalized. We were forced to bring suit
against LANSource in the Ontario Court, General Division. On April 15, 1999, a
Statement of Claim, on behalf of the Company as plaintiff, was issued by the
Ontario Court, General Division and served on LANSource as defendant.
Ultimately, we settled the LANSource litigation and no longer have any
relationship with LANSource (For further details on the LANSource Litigation,
refer to Item 3.1 of this Form 10-KSB).

Technology Licensing Agreement with Compte De Sierge. On April 28, 1999, we
entered into a licensing agreement (the "Compte Agreement") with Compte De
Sierge Accommodative Corp., a corporation incorporated in Panama City, Panama
("Compte De Sierge"). In developing its proprietary software, Compte De Sierge
worked in association with a group of programmers doing business as E-Card.
Pursuant to the Compte Agreement, we purchased a worldwide license to utilize
and commercially exploit certain software systems and related proprietary
technology relating to the operation of a greeting card business, hereinafter
referred to as "Greeting Card Website". The licensed technology was developed
and designed by Mr. Conrado Beckerman, a director of Compte De Sierge, and a
team of programmers hired by Compte De Sierge.  The Greeting Card Website has
not produced any historical revenue upon which an estimate of potential revenue
can be determined.

The Compte Agreement required us to make three equal cash payments of $67,660.00
to Compte De Sierge.  The first payment of $67,660.00 was made upon execution of
the Compte Agreement. The second payment of $67,660.00 was made upon completion
of the first phase of beta testing of the software. The third payment was due
upon completion of the second phase of testing. On August 16, 1999, with the
completion of the second phase of testing, we requested that Compte De Sierge
provide us with duplicate copies of all compact discs and files necessary for
the operation of the Greeting Card Website.  E-Card had custody and control of
those items requested by us.  On August 23, 1999, Compte De Sierge denied our
request stating that a conflict among its programmers and E-Card prevented
delivery of such items.  This denial by Compte De Sierge effectively negated any
and all contractual obligations we had to Compte De Sierge under the Compte
Agreement.  On August 30, 1999, we held a meeting with the principals of Compte
De Sierge. At that meeting, Compte De Sierge agreed to discontinue any further
association or involvement with E-Card.  Compte De Sierge also agreed to:

*       assist us in retaining new programmers to complete the Greeting Card
        Website;

*       revise and amend the April 28, 1999 agreement to reflect the above
        change;

*       allow us to retain the final $67,660.00 payment under the Compte
        Agreement; and

*       change the title of the agreement to the "Proprietary Technology Usage -
        License Agreement".

The Compte Agreement also required us to issue 6,000,000 shares of our common
stock in two separate 3,000,0000 issuances. The first 3,000,000 shares were
issued upon the signing of the Compte Agreement and the second 3,000,000 shares
were issued upon the completion of the beta testing of the Greeting Card Website
software. The shares were valued at $0.30 per share for total consideration of
$1,800,000.00.

Except for the contractual relationship between us and Compte De Sierge
memorialized in the Compte Agreement, and the consulting services provided to us
by Mr. Beckerman, there are no other affiliations or relationships between
either us and Compte De Sierge or any of our subsidiaries and Compte De Sierge.

The Compte Agreement allowed us to grant sub-licenses in the proprietary
technology on terms agreeable to Compte De Sierge.  On June 15, 1999, we entered
into a sub-license agreement with CardStakes.com, Inc., whereby CardStakes.com,
Inc., acquired the worldwide exclusive sub-license to produce the Cardstakes.com
website using the proprietary technology.

In exchange for the rights in the Compte Agreement, CardStakes.com, Inc., issued
us 9,126,531 shares of CardStakes.com, Inc.'s, common stock representing a 59%
controlling interest in CardStakes.com. CardStakes.com is now a majority owned
subsidiary.

Due to the uncertainty of recoverability, our auditor has provided a full
impairment provision for the carrying value of the license resulting in a
cumulative loss of $2,055,938 to December 31, 2001.

CREDIT CARD PROCESSING. In December, 1999, we were approached by a number of
clients looking for credit card processing services. Because we had decided to
focus our business activities on the Internet, we agreed in late December of
1999, to utilize our merchant account beginning in early January 2000 to
generate revenue from credit card processing.  We made entered into a
relationship with Mpact Immedia Transaction Services Ltd. whereby we would
charge a 15% to 20% transaction fee on all approved credit card transactions as
well as a 15% reserve to accommodate any charge backs and to minimize the
element of risk to any possible reversals.  The 15% reserve was a 6-month
revolving reserve whereby the first month reserves (total of reserves held from
day 1 to day 30/31 inclusive) were to be paid out in 6 months plus 1 day. All
approved credit card transactions were totaled on a daily basis.  These daily
totals were accumulated for payment on a weekly basis.

In November 2000, we began to receive a significant number of charge backs from
our clients and the reserves held back were eliminated.  On November 8, 2000, we
were notified by Mpact Immedia Transaction Services Ltd. that it was terminating
our processing activities and in turn, we instructed our clients we would no
longer be processing their transactions.  All card-processing activities were
terminated and we do not intend to resume credit card processing services. If we
are able to raise sufficient funds to do so, we plan to acquire another merchant
account. We do not have any commitment for such funds, however, nor have we
identified any potential sources of such funds. During the operation of the
credit card service, we earned net fees of $98,425.

OUR INTERNET ACTIVITIES.

Online casting agency. In addition to the internet activities of our subsidiary,
cardstakes.com, inc. (Described below), we are currently developing our own
websites aimed at the far east markets. We will utilize programs such as
macromedia generator, custom java servlets and microsoft sql server to develop
our online presence. Our current project is an online casting agency designed to
connect talent with casting agents and producers. The casting portal will be
delivered over the internet using macromedia flash content. Web developers use
flash to create beautiful resizable and extremely small and compact navigation
interfaces, technical illustrations, long-form animations and other dazzling
effects for web sites and other web-enabled devices. Graphics and animation
created with flash technology provide a positive experience for the audience. We
believe that flash sites are more attractive than those using traditional web
technologies. We also believe that flash technology offers a more compelling
experience than static html. Web sites designed in flash playback full-screen on
all monitor sizes and consistently across multiple platforms making content
interaction for web users feel more familiar.

The Talent Directory will give both the experienced and the aspiring
model/actor/entertainer unique opportunities to have his or her photo appear
before the professionals who are continually in search of talent and fresh new
faces.  For a yearly subscription fee, an industry professional will be able to
post his or her name, specifications, experience, training and special skills
and a scan up to nine (9) high resolution photos to be stored in the talent
database on our proposed website. We anticipate that the content of the Talent
Directory will be offered free to agents, film producers, photographers, casting
directors, model/talent agencies, television stations/networks, newspapers,
fashion magazines, and many other prospective employers to help fulfill their
hiring needs. The revenue source will come exclusively from the subscription
fees paid by the aspiring professional.

To fulfill the requirements of this project, we plan to contract out our in-
house development team to provide the necessary programming and database design
skills needed during the development phase.  Once development of this project
has been completed, we will be providing the client with web hosting, e-mail and
any necessary technical support services needed for day-to-day operations of the
site. To date, the project is substantially complete and we require funding in
order to effectively market the site. The launching of this project is dependant
on our ability to raise operating funds. If we are not able to raise operating
funds, we will not be able to effectively launch the website portal.

OUR URL'S. A Universal Resources Locator ("URL") is the address of a page on the
World Wide Web. Every web page has an URL that identifies it, and which provides
enough information for a computer connected to the Internet to locate it. In
order to participate in the rapidly growing and lucrative business of the
Internet and because we believe that certain URL's have value, we entered into
the following URL purchase agreements:

J&S OVERSEAS HOLDINGS LTD.

On July 15, 1999, we entered into a URL purchase agreement with J&S Overseas
Holdings Ltd., of Grand Cayman, Cayman Islands, whereby we purchased from J&S
Overseas Holdings Ltd. three URL's registered as "SUPERSTAKES.COM",
"SUPERCARDSTAKES.COM" and "CHINASTAKES.NET". In exchange for the three URL's, we
paid J&S Overseas Holdings Ltd.$200,000 and issued J & S Overseas Holdings Ltd.
1,000,000 warrants, each of which represents the right to purchase one share of
our common stock at a price of $0.25 per share. The warrants expire by their own
terms three years from the date of issuance. We have met all of our financial
obligations under the J&S Agreement and the warrants have been issued to J&S
Overseas Holdings Ltd. J&S Overseas Holdings Ltd. has transferred the three
URL's to us. Except for the relationships described herein, there are no other
relationships between us and J&S Overseas Holdings Ltd. Through December 31,
2001, J&S Overseas Holdings Ltd. had exercised 860,000 of such warrants. Other
than the relationship described within this paragraph, there are no other
relationships between us and J&S Overseas Holding Ltd.

HOLM INVESTMENTS LTD.

On September 1, 1999, we entered into a URL purchase agreement with Holm
Investments Ltd., a Canadian corporation, whereby we purchased from Holm
Investments Ltd., two URL's registered as "E-CARDLOTTO.NET" and "CARDLOTTO.NET".
In exchange for the two URL's, we issued Holm Investments Ltd. 1,000,000
warrants to purchase our common stock at a purchase price of $0.25 per share.
The warrants are exercisable for a period of two years from the date of
issuance.  The 1,000,000 warrants have been issued to Holm Investments Ltd. and
Holm Investments Ltd. has transferred the two URL's to us. Through December 31,
2000, Holm had exercised 790,000 of such warrants. During 2001, the remaining
210,000 warrants expired. We also rent office space from Holm Investments Ltd.
(see Item 2). Other than the relationships described within this paragraph,
there are no other relationships between Holm Investments Ltd. and us.

MAY JOAN LIU.

On November 19, 1999, we entered into a URL purchase agreement with May Joan Liu
whereby we purchased from May Joan Liu three URL's registered as
"Thankyou2u.com", "Homeaccents2u.com" and "Necessities2u.com".  In exchange for
the three URL's, we issued May Joan Liu 650,000 shares of our common stock.  The
shares have been issued to May Joan Liu and May Joan Liu has transferred the
three URL's to us.  May Joan Liu is a business consultant and provides
investment banking services to us. Other than the relationships described in
this paragraph and in Item 12, there are no other relationships between May Joan
Liu and us.

CARDTEK (INTERNATIONAL) HOLDINGS LTD.

On November 24, 1999, we entered into a URL purchase agreement with CardTek
(International) Holdings Ltd., a Gibraltar corporation, whereby we purchased
from CardTek (International) Holdings Ltd., four URL's registered as
"Gaming2u.com", "Weddings2u.com", "Essentials2u.com" and "Theorient2u.com".  In
exchange for the four URL's, we issued CardTek (International) Holdings Ltd.
800,000 shares of our common stock.  The shares have been issued to CardTek
(International) Holdings Ltd. and CardTek (International) Holdings Ltd. has
transferred the four URL's to us.  Other than the relationship described in this
paragraph, there are no other relationships between us and Cardtek
(International) Holdings Ltd.

RICHARD ANGELO HOLMES.

On November 25, 1999, we entered into a URL purchase agreement with Richard
Angelo Holmes , whereby we purchased from Richard Angelo Holmes two URL's
registered as "Things2u.com" and "Arrangements2u.com".  In exchange for the two
URL's, we agreed to issue Richard Angelo Holmes 250,000 shares of our common
stock.  The shares have been issued to Richard Angelo Holmes and Richard Angelo
Holmes has transferred the two URL's to us.  Other than the relationship
described in this paragraph, there are no other relationships between us and
Richard Angelo Holmes.

CYBERMALL CONSULTING SERVICES LTD.

On November 25, 1999, we entered into a URL purchase agreement with Cybermall
Consulting Services Ltd., a Bahamian corporation ("Cybermall"), whereby we
purchased from Cybermall, two URL's registered as "Website2u.com" and
"Gourmet2u.com".  In exchange for the two URL's, we issued Cybermall 500,000
shares of our common stock. The shares have been issued and Cybermall has
transferred the four URL's to us.  Other than the relationship described in this
paragraph, there are no other relationships between us and Cybermall Consulting
Services Ltd.

OUR SUBSIDIARY-- CARDSTAKES.COM, INC.

On February 19, 1999, we caused PDTech.com, a Nevada corporation, to be formed
as our subsidiary.  On June 8, 1999, PDTech.com changed its name to
CardStakes.com, Inc., ("CardStakes.com"). At the time CardStakes.com was
incorporated, it was contemplated that founders would be issued founders shares
in CardStakes.com in consideration for incorporating and initially financing
CardStakes.com.

Between June 15, 1999, and July 7, 1999, CardStakes.com issued 7,126,531 shares
of its common stock to us pursuant to the sub-licensing agreement between us and
CardStakes.com. Under the licensing agreement, Cardstakes.com purchased the
right to utilize and exploit the technology necessary to sell greeting cards
over the Internet (more particularly described in the Compte Agreement). On
August 16, 1999, we issued to each of our shareholders entitled to receive
dividends, one (1) share of CardStakes.com's common stock for every eight (8)
shares of our common stock.  We issued a total of 2,199,779 shares of
CardStakes.com's common stock to our shareholders. The purpose for issuing these
shares in Cardstakes.com to 2Uonline.com, Inc. shareholders was a just reward
for their patience in what has been a slow implementation of the Cardstakes.com
business. On September 10, 1999, and in consideration for the removal of the
anti-dilution provision from CardStakes.com's Articles of Incorporation (more
particularly described in Item 12.5.), CardStakes.com issued an additional
2,000,000 shares of its common stock to us. Currently, we own a 59% interest in
CardStakes.com. We valued the assets transferred to CardStakes.com at
$1,470,000.00 based on our historical cost basis. Any and all assets acquired by
CardStakes.com from us will be recorded in CardStakes.com's financial statements
at our historical cost basis.

As discussed above, the Compte Agreement allows us to grant sublicenses in
certain proprietary technology to third parties on terms agreeable to Compte De
Sierge. On June 15, 1999, CardStakes.com became such a third party licensee. In
consideration for the sub-license, Cardstakes.com will pay a sub-licensing fee
to us based on the amount of revenue earned by the Cardstakes.com website.
Specifically, CardStakes.com has agreed to pay us an amount equal to fifty-one
percent (51%) of the gross revenue which includes, without limitation, revenue
derived from any and all value generated by the CardStakes.com website. The
payments shall be paid to us weekly and each payment shall be accompanied by a
statement of Gross Revenue in a form acceptable to us. The agreement also
required CardStakes.com to issue 2UOnline.com 7,126,531 shares of
CardStakes.com's common stock. Finally, we agreed with CardStakes.com that all
proprietary information exchanged between us and CardStakes.com would be kept
confidential.

THE GREETING CARD INDUSTRY. Based on our research, including, but not limited
to, searching the Internet for similar operations, we believe that the greeting
card website designed by CardStakes.com is the first Internet site to combine a
greeting card and a scratch and win entry. A card from CardStakes.com can
feature special effects, animation, music, and custom designs. The cards at
www.cardstakes.comcan be sent free with or without a purchase while visiting any
of the websites set up by us. The CardStakes.com website is currently not
operational and currently does not offer any products. CardStakes.com is
attempting to update its website and complete the maintenance. We cannot predict
when CardStakes.com will complete its maintenance and development activities.

According to information gathered by us from the website maintained by the
Greeting Card Association , an organization representing card publishers and
allied members of the greeting card industry, in 1998, the purchase of over 7
billion greeting cards by American consumers generated a total of $7.5 billion
in United States retail sales. Also, according to the Greeting Card Association,
of the total greeting cards purchased annually, roughly half are seasonal and
the remaining half are everyday cards.

CARDSTAKES.COM'S ELECTRONIC GREETING CARD. Once operational, customers of
CardStakes.com will be able to send animated, singing, speaking, personally
customized, virtual cards over the Internet for free with or without a purchase
from one of our websites (described below).  The greeting card will contain a
scratch and win ticket that offers discounts and/or coupons.  The recipient will
have 30 days, from the date sent, to view and review his/her card as many times
as they wish. After the initial 30 day period, the card will be deleted unless
the recipient becomes a member of the Cardstakes.com website prior to the 30th
day. Membership on the CardStakes.com website is free. Cardstakes.com will rely
on advertising on its website to generate revenue. CardStakes.com has not
entered into any advertising relationships as its website is not yet
operational. CardStakes.com anticipates that it will begin selling advertising
space on its website shortly after the website becomes operational.

COMPETITION IN THE GREETING CARD INDUSTRY. Competition in the Internet greeting
card industry is significant.  Certain of CardStakes.com's competitors have more
experience, seasoned management, name recognition, marketing capabilities and
financial resources than CardStakes.com. CardStakes.com may also encounter
increasing competition from new as well as existing Internet greeting card
operations.  CardStakes.com may also encounter indirect competition from
companies selling greeting cards in the traditional storefront form.  It is
possible that increased competition could have a material adverse effect on
CardStakes.com. Many of these competitors have greater financial and other
resources, and more experience in the greeting card industry than
Cardstakes.com. There can be no assurance that competitors have not or will not
succeed in developing technologies that are more effective than any which that
have been or are being developed by CardStakes.com or which would render the
greeting card operations of CardStakes.com obsolete and non-competitive.

BUSINESS INTERRUPTION; Reliance on Computer and Telecommunications
Infrastructure. Our success and the success of our subsidiary will be dependent
in large part on our continued investment in sophisticated telecommunications
and computer systems and computer software. If funds are available, we
anticipate making significant investments in the acquisition, development, and
maintenance of such technologies in an effort to remain competitive.  We
anticipate that such expenditures will be necessary on an on-going basis.
Moreover, computer and telecommunication technologies are evolving rapidly and
are characterized by short product lifecycles, which requires us to anticipate
technological developments. There can be no assurance that we will be successful
in anticipating, managing or adopting such technological changes on a timely
basis or that we will have the capital resources available to invest in new
technologies. In addition, Internet related business is highly dependent on
computer and telecommunications equipment and software systems, the temporary or
permanent loss of which, through physical damage or operating malfunction, could
have a material adverse effect on our business.

OUR WEBSITES. We have various planned websites which are not yet operational. We
plan to utilize the URL's we purchased to establish various websites. We
anticipate that our websites, once fully developed, will offer products such as
jewels, flowers, chocolates and original art. We anticipate that revenue will be
generated from the sale of products at our websites.

Since neither CardStakes' websites nor ours are operational, we are not earning
revenues or currently offering or selling any products over our websites. We
anticipate that the websites will be operational after the updates are completed
and we are able to acquire another merchant account (see credit card processing
section above).  Until we are re-listed on the Over-the-Counter Bulletin Board
and we are able to acquire another merchant account, our websites and the
Cardstakes.com website will likely remain down.

OWNERSHIP INTERESTS. The following chart specifies our stock ownership:

Percent Ownership     Entity                   Nature of Ownership
-----------------     ---------------------    -------------------
        50.65%        Cardstakes.com           4,926,752 Shares of Common Stock
        24.58%        Precise Life Sciences    4,815,839 Shares of Common Stock

EMPLOYEES. We currently have 4 part-time employees and 3 full-time employees.
None of our employees are subject to any collective bargaining agreements.

ITEM 2.  DESCRIPTION OF PROPERTY.

Property Held by Us.  As of the dates specified in the following table, we held
the following property in the following amounts:

Property        December 31, 2001       December 31, 2000
--------        -----------------       -----------------
 Cash               US $5,607               US $9,121

We do not presently own any interests in real estate. We do not presently own
any inventory or equipment.

Our Facilities.  We do not own any real property.  However, we do lease space
from Holm Investments Ltd., a shareholder of the Company.  We lease the space
for a total of $2,050.00 a month. The term of the lease expires on August 1,
2003.

ITEM 3.  LEGAL PROCEEDINGS.

LANSOURCE LITIGATION.

On or about April 15, 1999, a Statement of Claim, on behalf of the Company as
Plaintiff, was issued by the Ontario Court, General Division. Also on or about
April 15, 1999, that Statement of Claim was served on Defendant LANSource. As
described in Item 1, we entered into a letter agreement with LANSource whereby
we were to purchase a 12.5% interest in LANSource with an option to purchase an
additional 38.5% interest. A formal agreement was to be finalized on or before
March 31, 1999. The letter agreement provided that in the event a formal
agreement was not consummated by March 31, 1999, the letter agreement would be
null and void and LANSource would be permitted to retain all deposits made by
us. In our complaint, we alleged that LANSource agreed to draft the final
agreement in an expeditious manner. We also alleged that counsel for LANSource
did not produce an agreement for review by us until March 25, 1999. Moreover, we
alleged that, prior to our receipt of the proposed final agreement from counsel
for LANSource, the proposed agreement had not been read or approved by
LANSource, the agreement was incomplete and in need of substantial revisions,
and that LANSource failed and neglected to provide the essential information
necessary for a meaningful review of the proposed final agreement. We alleged
that the Company had been damaged in the amount of $1,000,000.

In December 1999, we reached an out-of-court settlement with LANSource. On
December 23, 1999, LANSource paid us US$143,930.91 and we released LANSource
from any further liability. Except for the payment of funds and the related
releases, there were no other material terms. Except for the relationships
described herein, there are no other affiliations between us and LANSource.

SLAYTON LITIGATION.

On June 13, 2000, a Statement of Claim, on behalf of the Company as Plaintiff,
was filed in District Court, Clark County, Nevada and served on James E Slayton,
Carolyn Slayton, and Dianne Bennitt as co-defendants.  Our lawsuit contained the
following allegations: (i) First Cause of Action - Damages for Negligence; (ii)
Second Cause of Action - Damages for Deceit; (iii) Third Cause of Action -
Breach of Contract;  (iv) Fourth Cause of Action - Fraud; and (v) Fifth Cause of
Action - Negligent Misrepresentation of Fact.  In the complaint, we alleged that
Defendant's committed professional malpractice in that they negligently prepared
our financial statements and failed to adequately respond to comments by the
Securities and Exchange Commission. However, on or about May 4, 2001, we
dismissed the lawsuit without prejudice, reserving our right to re-file when,
and if, we feel it is appropriate.

CREDIT CARD PROCESSING.

Within the Section entitled "Credit Card Processing" appearing in this Form
10KSB, we discuss our credit card processing activities. We are currently
pursuing payment of chargebacks from clients for which we performed credit card
processing activities. If we are unable to recover the fees and costs due from
such clients, we plan to pursue legal action to collect the sums we believe we
are owed.

ITEM 4.  SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS

Not applicable.

PART II

ITEM 5.  MARKET PRICE FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

Reports to Security Holders.  We are a reporting company with the Securities and
Exchange Commission ("SEC").  The public may read and copy any materials filed
with the SEC at the SEC's Public Reference Room at 450 Fifth Street N.W.,
Washington, D.C. 20549.  The public may also obtain information on the operation
of the Public Reference Room by calling the SEC at 1-800-SEC-0330.  The SEC
maintains an Internet site that contains reports, proxy and information
statements, and other information retarding issuers that file electronically
with the SEC.  The address of that site is http://www.sec.gov.

On or about April 18, 2000, we were removed from the Over-the-Counter Bulletin
Board ("OTCBB") for failure to comply with NASD Rule 6530, which requires any
company listed on the OTCBB to be current in its public reporting obligations
pursuant to the Securities and Exchange Act of 1934. We are currently listed on
the Pink Sheets maintained by the NASD under the symbol "TWOU".  We filed
Amendment No. 4 to our Registration Statement on Form 10-SB in an attempt to be
re-listed on the OTCBB and have received a comment letter dated February 8,
2002. We have been instructed by the SEC to respond to the comment letter in
this Form 10-KSB.

The Company is authorized to issue 100,000,000 shares of common stock, $.0001
par value, each share of common stock having equal rights and preferences,
including voting privileges.  The shares of $.0001 par value common stock of the
Company constitute equity interests in the Company entitling each shareholder to
a pro rata share of cash distributions made to shareholders, including dividend
payments.  The holders of the Company's common stock are entitled to one vote
for each share of record on all matters to be voted on by shareholders.  There
is no cumulative voting with respect to the election of directors of the Company
or any other matter, with the result that the holders of more than 50% of the
shares voted for the election of those directors can elect all of the Directors.
The holders of the Company's common stock are entitled to receive dividends
when, as and if declared by the Company's Board of Directors from funds legally
available therefore; provided, however, that the cash dividends are at the sole
discretion of the Company's Board of Directors.  In the event of liquidation,
dissolution or winding up of the Company, the holders of common stock are
entitled to share ratably in all assets remaining available for distribution to
them after payment of liabilities of the Company and after provision has been
made for each class of stock, if any, having preference in relation to the
Company's common stock.  Holders of the shares of Company's common stock have no
conversion, preemptive or other subscription rights, and there are no redemption
provisions applicable to the Company's common stock.  All of the outstanding
shares of the Company's common stock are duly authorized, validly issued, fully
paid and non-assessable.

All of the shares issued during the fiscal year 2000 were issued pursuant to
Regulation S promulgated by the Securities and Exchange Commission as all the
purchasers were Non-U.S. residents as that term is defined in relevant
securities regulations. During the fiscal year 2001, there were no issuances of
shares. As at December 31, 2001, the number of shares of common stock that maybe
sold pursuant to Rule 144 is approximately 11,310,480 shares.

As of December 31, 2001 there were no stock options outstanding. However,
warrants are outstanding to purchase 140,000 shares of our common stock at $.25
per share which expire by their own terms on July 16, 2002.

CardStakes.com Stock Transfer.  On August 16, 1999, we issued to each of our
shareholders entitled to receive dividends, one (1) share of CardStakes.com's
common stock for every eight (8) shares of our common stock held by the
shareholder.  We issued a total of 2,199,779 shares of CardStakes.com's common
stock to our shareholders. The purpose for issuing the CardStakes.com shares to
our shareholders was to reward our shareholders for their patience.

Penny Stock Regulation.  Shares of our common stock are subject to rules adopted
by the Securities and Exchange Commission that regulate broker-dealer practices
in connection with transactions in "penny stocks".  Penny stocks are generally
equity securities with a price of less than $5.00 (other than securities
registered on certain national securities exchanges or quoted on the Nasdaq
system, provided that current price and volume information with respect to
transactions in those securities is provided by the exchange or system).  The
penny stock rules require a broker-dealer, prior to a transaction in a penny
stock not otherwise exempt from those rules, deliver a standardized risk
disclosure document prepared by the Securities and Exchange Commission, which
contains the following:

*       a description of the nature and level of risk in the market for penny
        stocks in both public offerings and secondary trading;

*       a description of the broker's or dealer's duties to the customer and of
        the rights and remedies available to the customer with respect to
        violation to such duties or other requirements of securities' laws;

*       a brief, clear, narrative description of a dealer market, including
        "bid" and "ask" prices for penny stocks and the significance of the
        spread between the "bid" and "ask" price;

*       a toll-free telephone number for inquiries on disciplinary actions;

*       definitions of significant terms in the disclosure document or in the
        conduct of  trading in penny stocks; and

*       such other information and is in such form (including language, type,
        size and format), as the Securities and Exchange Commission shall
        require by rule or regulation.

Prior to effecting any transaction in penny stock, the broker-dealer also must
provide the customer the following:

*       the bid and offer quotations for the penny stock;

*       the compensation of the broker-dealer and its salesperson in the
        transaction;

*       the number of shares to which such bid and ask prices apply, or other
        comparable information relating to the depth and liquidity of the market
        for such stock; and

*       monthly account statements showing the market value of each penny stock
        held in the customer's account.

In addition, the penny stock rules require that prior to a transaction in a
penny stock not otherwise exempt from those rules, the broker-dealer must make a
special written determination that the penny stock is a suitable investment for
the purchaser and receive the purchaser's written acknowledgment of the receipt
of a risk disclosure statement, a written agreement to transactions involving
penny stocks, and a signed and dated copy of a written suitably statement.
These disclosure requirements may have the effect of reducing the trading
activity in the secondary market for a stock that becomes subject to the penny
stock rules.  Holders of shares of our common stock may have difficulty selling
those shares because our common stock will probably be subject to the penny
stock rules.

ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION OR PLAN OF
         OPERATION.

THIS FOLLOWING INFORMATION SPECIFIES CERTAIN FORWARD-LOOKING STATEMENTS OF
MANAGEMENT OF THE COMPANY. FORWARD-LOOKING STATEMENTS ARE STATEMENTS THAT
ESTIMATE THE HAPPENING OF FUTURE EVENTS ARE NOT BASED ON HISTORICAL FACT.
FORWARD-LOOKING STATEMENTS MAY BE IDENTIFIED BY THE USE OF FORWARD-LOOKING
TERMINOLOGY, SUCH AS "MAY", "SHALL", "WILL", "COULD", "EXPECT", "ESTIMATE",
"ANTICIPATE", "PREDICT", "PROBABLE", "POSSIBLE", "SHOULD", "CONTINUE", OR
SIMILAR TERMS, VARIATIONS OF THOSE TERMS OR THE NEGATIVE OF THOSE TERMS.  THE
FORWARD-LOOKING STATEMENTS SPECIFIED IN THE FOLLOWING INFORMATION HAVE BEEN
COMPILED BY OUR MANAGEMENT ON THE BASIS OF ASSUMPTIONS MADE BY MANAGEMENT AND
CONSIDERED BY MANAGEMENT TO BE REASONABLE. OUR FUTURE OPERATING RESULTS,
HOWEVER, ARE IMPOSSIBLE TO PREDICT AND NO REPRESENTATION, GUARANTY, OR WARRANTY
IS TO BE INFERRED FROM THOSE FORWARD-LOOKING STATEMENTS.

THE ASSUMPTIONS USED FOR PURPOSES OF THE FORWARD-LOOKING STATEMENTS SPECIFIED IN
THE FOLLOWING INFORMATION REPRESENT ESTIMATES OF FUTURE EVENTS AND ARE SUBJECT
TO UNCERTAINTY AS TO POSSIBLE CHANGES IN ECONOMIC, LEGISLATIVE, INDUSTRY, AND
OTHER CIRCUMSTANCES. AS A RESULT, THE IDENTIFICATION AND INTERPRETATION OF DATA
AND OTHER INFORMATION AND THEIR USE IN DEVELOPING AND SELECTING ASSUMPTIONS FROM
AND AMONG REASONABLE ALTERNATIVES REQUIRE THE EXERCISE OF JUDGMENT. TO THE
EXTENT THAT THE ASSUMED EVENTS DO NOT OCCUR, THE OUTCOME MAY VARY SUBSTANTIALLY
FROM ANTICIPATED OR PROJECTED RESULTS, AND, ACCORDINGLY, NO OPINION IS EXPRESSED
ON THE ACHIEVABILITY OF THOSE FORWARD-LOOKING STATEMENTS. NO ASSURANCE CAN BE
GIVEN THAT ANY OF THE ASSUMPTIONS RELATING TO THE FORWARD-LOOKING STATEMENTS
SPECIFIED IN THE FOLLOWING INFORMATION ARE ACCURATE, AND WE ASSUME NO OBLIGATION
TO UPDATE ANY SUCH FORWARD-LOOKING STATEMENTS.

LIQUIDITY AND CAPITAL RESOURCES.   At December 31, 2001, we had cash resources
of US $5,607, total current assets of US $79,893 and total current liabilities
of US $320,029.  At December 31, 2001, total current assets exceeded total
current liabilities by US $240,046. The cash and equivalents constitute our
present internal sources of liquidity.  We have one external source of
liquidity, that being the sale of our common stock.

RESULTS OF OPERATIONS. We have not yet realized any significant revenue from
operations, nor do we expect to in the foreseeable future. Loss from operations
increased from $1,000.00 for the year ended December 31, 1997, to $10,797 for
the year ended December 31, 1998, to $4,201,051 for the year ended December 31,
1999. The net loss decreased to $1,350,249 for the year ended December 31, 2000
and increased to $1,495,844 for the year ended December 31, 2001. Our losses
from September 13, 1993 (inception), to December 31, 2001, were $7,058,941.
Such losses were due primarily to the write-off of URL acquisitions costs a well
as the write-down of URL's, the write-down of the technology license,the equity
loss from Asdar Group(now Precise Life Sciences Ltd.), website expenses, payment
of consulting fees, management fees, and payment of fees for investor relations.

In order to address the going concern problem discussed in our financial
statements, we will require additional working capital.  We will also require
additional funds to implement our business strategies, including funds for:

*       payment of increased operating expenses, and

*       further implementation of those business strategies.

No assurance can be given, however, that we will have access to the capital
markets in the future, or that financing will be available on acceptable terms
to satisfy our cash requirements needed to implement our business strategies.
Our inability to access the capital markets or obtain acceptable financing could
have a material adverse effect on our results of operations and financial
condition and could severely threaten our ability to operate as a going concern.

Our forecast of the period of time through which our financial resources will be
adequate to support our operations is a forward-looking statement that involves
risks and uncertainties, and actual results could vary as a result of a number
of factors.

OUR PLAN OF OPERATION FOR THE NEXT 12 MONTHS. We anticipate that we will need to
raise additional capital within the next 12 months in order to continue as a
going concern.  Such additional capital may be raised through additional public
or private financings, as well as borrowings and other resources.  To the extent
that additional capital is raised through the sale of equity or equity-related
securities, the issuance of such securities could result in dilution of our
stockholders.  There can be no assurance that additional funding will be
available on favorable terms, if at all.  If adequate funds are not available
within the next 12 months, we may be required to curtail our operations
significantly or to obtain funds through entering into arrangements with
collaborative partners or others that may require us to relinquish rights to
certain of our assets that we would not otherwise relinquish.

We do not anticipate any material expenditures within the next 12 months that
will affect our liquidity.  We do not anticipate any significant research and
development within the next 12 months, nor do we anticipate that we will lease
or purchase any significant equipment within the next 12 months. We do not
anticipate a significant change in the number of our employees within the next
12 months. We are not aware of any material commitment or condition that may
affect our liquidity within the next 12 months.

AUDIT COMMITTEE As of the date of this Annual Report, we have not appointed
members to an audit committee and, therefore, the respective role of an audit
committee has been conducted by our Board of Directors.  When established, the
audit committee's primary function will be to provide advice with respect to our
financial matters and to assist the Board of Directors in fulfilling oversight
responsibilities regarding finance, accounting, tax and legal compliance. The
audit committee's primary duties and responsibilities will be to: (i) serve as
an independent and objective party to monitor our financial reporting process
and internal control system; (ii) review and appraise the audit efforts of our
independent accountants; (iii) evaluate our quarterly financial performance as
well as compliance with laws and regulations; (iv) oversee management's
establishment and enforcement of financial policies and business practices; and
(v) provide and open avenue of communication among the independent accountants,
management and the board of directors.

Our Board of Directors has considered whether the regulatory provision of non-
audit service is compatible with maintaining the principal independent
accountant's independence.

AUDIT FEES As of the date of this Annual Report, we have incurred $11,000 as
fees billed by our principal independent accountants for professional services
rendered in connection with preparation of our audited financial statements for
the fiscal year ended December 31, 2001.  For the fiscal year ended December 31,
2001, we have incurred $13,300 as fees billed by our principal independent
accountant for all other non-audit services (such as review of our quarterly
financial statements and other related services).

ITEM 7.  FINANCIAL STATEMENTS




                              2U ONLINE.COM, INC.

                         (A Development Stage Company)

                       CONSOLIDATED FINANCIAL STATEMENTS

                           DECEMBER 31, 2001 AND 2000



AUDITORS' REPORT.............................................................F-1

CONSOLIDATED BALANCE SHEETS..................................................F-2

CONSOLIDATED STATEMENTS OF OPERATIONS........................................F-3

CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY.........................F-4 - F-7

CONSOLIDATED STATEMENTS OF CASH FLOWS........................................F-8

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS............................F-9 - F-14


<PAGE>F-1

                                AUDITORS' REPORT
--------------------------------------------------------------------------------

To the Board of Directors and Stockholders of 2U Online.com, Inc.

We have audited the consolidated balance sheets of 2U Online.com, Inc. (a
development stage company) as at December 31, 2001 and 2000 and the consolidated
statements of operations, stockholders' equity and cash flows for the years then
ended.  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 audit.

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

In our opinion, these consolidated financial statements present fairly, in all
material respects, the financial position of the Company as at December 31, 2001
and 2000 and the results of its operations and its cash flows and changes in
stockholders' equity for the years then ended in accordance with United States
generally accepted accounting principles.

                                                             /s/ LaBonte & Co.
                                                             - ---------------
                                                                 LaBonte & Co.

                                                         CHARTERED ACCOUNTANTS
Vancouver, B.C.
March 31, 2002


COMMENTS BY AUDITORS FOR U.S. READERS ON CANADA-UNITED STATES REPORTING
DIFFERENCES

In the United States, reporting standards for auditors would require the
addition of an explanatory paragraph following the opinion paragraph when the
financial statements are affected by conditions and events that cast substantial
doubt on the Company's ability to continue as a going concern, such as those
described in Note 1.  Our report to the stockholders and Board of Directors
dated March 31, 2002 is expressed in accordance with Canadian reporting
standards which do not permit a reference to such conditions and events in the
auditors' report when these are adequately disclosed in the financial
statements.

                                                             /s/ LaBonte & Co.
                                                             - ---------------
                                                                 LaBonte & Co.

                                                         CHARTERED ACCOUNTANTS
Vancouver, B.C.
March 31, 2002


<PAGE>F-2

                              2U ONLINE.COM, INC.
                         (A Development Stage Company)

                          CONSOLIDATED BALANCE SHEETS

<table>
<caption>

                                                                          <c>                <c>

                                                                            December 31,         December 31,
                                                                                2001                2000
                                                                            -----------          ------------
ASSETS
CURRENT ASSETS
        Cash                                                             $        5,607        $        9,121
        Taxes recoverable                                                           480                   741
        Due from related party                                                    2,000                 2,000
        Current portion of Service Contracts (Note 4)                            71,896               208,248
                                                                            -----------          ------------
                                                                                 79,983               220,110

INVESTMENT IN ASDAR GROUP (Note 3)                                              764,344             1,744,868
SERVICE CONTRACTS (Note 4)                                                      123,964               195,858
FURNITURE AND EQUIPMENT, net of depreciation                                     20,303                25,125
WEBSITE DEVELOPMENT COSTS                                                             -               126,876
OTHER INTANGIBLE ASSETS                                                          35,189                35,189
                                                                            -----------          ------------

                                                                         $    1,023,783        $    2,348,026
                                                                            ===========          ============

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
        Accounts payable and accrued liabilities                         $      133,461        $      103,812
        Loans payable                                                             5,000                30,000
        Due to related company (Note 9)                                         181,568                14,616
                                                                            -----------          ------------
                                                                                320,029               148,428
                                                                            -----------          ------------
STOCKHOLDERS' EQUITY
        Common stock, $.0001 par value, 100,000,000 shares authorize              3,160                 3,160
        2001 - 31,597,500, 2000 - 31,597,500 issued and outstanding
        Additional paid-in capital                                            7,979,513             7,979,513
        Deficit accumulated during the development stage                     (7,278,919)           (5,783,075)
                                                                            -----------          ------------
                                                                                703,754             2,199,598
                                                                            -----------          ------------
                                                                         $    1,023,783        $    2,348,026
                                                                            ===========          ============

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

</table>

<PAGE>F-3

                              2U ONLINE.COM, INC.
                         (A Development Stage Company)

                     CONSOLIDATED STATEMENTS OF OPERATIONS

<table>
<caption>

                                                         <c>                   <c>                     <c>

CONSOLIDATED STATEMENTS OF OPERATIONS

                                                                                                            September 13,
                                                            Year ended             Year ended             1993 (inception)
                                                            December 31,           December 31,           to December 31,
                                                            2001                   2000                        2001
                                                         -------------          ------------                  -----------

REVENUES
        Processing Fees (Note 8)                        $            -        $       98,425               $       98,425
        Sale of Oil & Gas Interest                                   -                47,501                       47,501
        Interest Income                                          1,286                 1,641                        2,927
                                                         -------------          ------------                  -----------
                                                                 1,286               147,567                      148,853
                                                         -------------          ------------                  -----------
GENERAL AND ADMINISTRATIVE EXPENSES
        Advertising and marketing                                    -                 8,548                       55,305
        Depreciation                                             8,017                 7,906                       20,691
        Consulting fees                                         62,026               153,571                      772,700
        Investor relations                                     148,746               172,352                      336,870
        Management fees                                         24,000                27,350                      298,654
        Office and general                                      68,469                70,232                      223,904
        Professional fees                                       55,833               121,799                      258,251
        Stock-based compensation                                     -                     -                      253,669
        Travel and accommodation                                11,071                42,987                      143,034
        Wages and benefits                                      33,997                59,350                      105,657
        Website development costs                              126,876               218,806                      345,682
        Write-down of URLs                                           -                     -                    1,624,004
        Write-down of technology license                             -               600,000                    2,055,938
        Write-off of other assets                                    -                     -                      145,186
                                                         -------------          ------------                  -----------
                                                               539,035             1,482,901                    6,639,545
                                                         -------------          ------------                  -----------

LOSS BEFORE THE FOLLOWING                                     (537,749)           (1,335,334)                  (6,490,692)
EQUITY LOSS FROM ASDAR GROUP                                  (958,095)              (90,132)                  (1,048,227)
MINORITY INTEREST IN LOSS FOR THE YEAR                               -                75,217                      479,978
                                                         -------------          ------------                  -----------
NET LOSS FOR THE PERIOD                                $    (1,495,844)       $   (1,350,249)              $   (7,058,941)
                                                         =============          ============                  ===========

BASIC NET LOSS PER SHARE                               $         (0.05)       $        (0.04)
                                                         =============          ============

WEIGHTED AVERAGE COMMON SHARES
        OUTSTANDING                                         31,597,500            30,694,075
                                                         =============          ============

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

</table>

<PAGE>F-4

                              2U ONLINE.COM, INC.
                         (A Development Stage Company)

                 CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY

    FOR THE PERIOD FROM SEPTEMBER 13, 1993 (INCEPTION) TO DECEMBER 31, 2001

<table>
<caption>

                                            <c>                <c>            <c>               <c>               <c>
                                                                                                   Deficit
                                                                                                   Accumulated
                                                                                 Additional        During the
                                                  Number of                      Paid In           Development
                                                  shares           Amount        Capital           Stage                Total
                                               ------------       -------        ----------        -----------       ----------
Balance, September 30, 1993                        10,000        $    100      $        900       $    (1,000)     $          -

Net loss for the years ended
        December 31, 1993
        through 1997                                    -               -                 -                 -                 -

July 30, 1998 - changed from
        $.01 par value to
        $.0001 par value                                -             (99)               99                 -                 -

July 30, 1998 - forward
        stock split 200:1                       1,990,000             199              (199)                -                 -

October 21, 1998 - forward
        stock split 3:1                         4,000,000             400              (400)                -                 -

Net loss for the year ended
        December 31, 1998                               -               -                 -           (10,797)          (10,797)
                                              -----------       ---------       -----------       -----------       -----------

Balance, December 31, 1998                      6,000,000             600               400           (11,797)          (10,797)

January 6, 1999 - common stock
        issued for Rising Phoenix
        finders' fee at $0.30
        per share                                 800,000              80           239,920                 -           240,000

January 6, 1999 - common stock
        issued for cash and
        management remuneration
        at $0.30 per share                        600,000              60           179,940                 -           180,000

January 28, 1999 - commons stock
        issued for services at
        $0.36 per share                           600,000              60           215,940                 -           216,000

February 26, 1999 - common stock
        issued for services at
        $0.36 per share                           500,000              50           179,950                 -           180,000

April 14, 1999 - common stock
        issued for cash (net of
        finance fee of $99,500)
        at $0.08 to $0.25 per share             7,127,500             713           899,787                 -           900,500

        Less:  fair value of
        warrants issued on financing                    -               -          (764,095)                -          (764,095)

April 14, 1999 - warrants
        issued on financing                             -               -           764,095                 -           764,095

April 23, 1999 - stock-based
        compensation                                    -               -           210,706                 -           210,706

April 28, 1999 - common stock
        issued for technology licence
        finder's fee at $0.30 per share           400,000              40           119,960                 -           120,000

June 15, 1999 - common stock issued
        for technology license at
        $0.30 per share                         3,000,000             300           899,700                 -           900,000

June 15, 1999 - common stock
        issued for services at
        $0.25 per share                            20,000               2             4,998                 -             5,000

June 30, 1999 - common stock issued
        for services at $0.26 per share           250,000              25            64,975                 -            65,000

July 15, 1999 - warrants issued
        for URL purchase                                -               -           328,858                 -           328,858

July 20, 1999 - common stock
        issued for cash on exercise of
        warrants at $0.30 per share               800,000              80           239,920                 -           240,000


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

</table>

<PAGE>F-5

                              2U ONLINE.COM, INC.
                         (A Development Stage Company)

                 CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY

    FOR THE PERIOD FROM SEPTEMBER 13, 1993 (INCEPTION) TO DECEMBER 31, 2001

<table>
<caption>

                                            <c>                <c>            <c>              <c>                <c>
                                                                                                  Deficit
                                                                                                  Accumulated
                                                                                 Additional       During the
                                                  Number of                      Paid In          Development
                                                  shares           Amount        Capital          Stage                 Total
                                               ------------       -------        ----------       -----------        ----------


September 1, 1999 - warrants issued
        for URL purchase                                -               -           220,146                 -           220,146

September 1, 1999 - common stock
        issued for cash on exercise
        of warrants at $0.30 per share            100,000              10            29,990                 -            30,000

October 14, 1999 - common stock issued
        for cash on exercise of
        warrants at $0.25 per share                40,000               4             9,996                 -            10,000

October 22, 1999 - stock-based
        compensation                                    -               -            42,963                 -            42,963

November 3, 1999 - common stock issued
        for cash on exercise
        of warrants at $0.25 per share            100,000              10            24,990                 -            25,000

November 9, 1999 - common stock issued
        for technology
        license at $0.30 per share              3,000,000             300           899,700                 -           900,000

November 15, 1999 - common stock issued
        for cash on exercise
        of warrants at $0.25 per share            200,000              20            49,980                 -            50,000

November 19, 1999 - common stock issued
        for acquisition of
        URL's at $0.30 per share                  650,000              65           194,935                 -           195,000

November 24, 1999 - common stock
        issued for acquisition of
        URL's at $0.30 per share                  800,000              80           239,920                 -           240,000

November 25, 1999 - common stock issued
        for acquisition of
        URL's at $0.30 per share                  500,000              50           149,950                 -           150,000

November 25, 1999 - common stock issued
        for acquisition of
        URL's at $0.30 per share                  250,000              25            74,975                 -            75,000

November 29, 1999 - common stock issued
        for cash on exercise
        of warrants at $0.25 per share             40,000               4             9,996                 -            10,000

December 6, 1999 - common stock issued
        for cash on exercise
        of warrants at $0.25 per share             50,000               5            12,495                 -            12,500

December 9, 1999 - common stock issued
        for cash on exercise
        of warrants at $0.25 per share             50,000               5            12,495                 -            12,500

Dividends paid                                          -               -                 -          (219,978)         (219,978)

Net loss for the year ended
        December 31, 1999                               -               -                 -        (4,201,051)       (4,201,051)
                                              -----------       ---------       -----------       -----------       -----------
Balance, December 31, 1999                     25,877,500           2,588         5,557,585        (4,432,826)        1,127,347


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

</table>

<PAGE>F-6

                              2U ONLINE.COM, INC.
                         (A Development Stage Company)

                 CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY

    FOR THE PERIOD FROM SEPTEMBER 13, 1993 (INCEPTION) TO DECEMBER 31, 2001

<table>
<caption>

                                           <c>                 <c>             <c>              <c>                <c>
                                                                                                   Deficit
                                                                                                   Accumulated
                                                                                  Additional       During the
                                                 Number of                        Paid In          Development
                                                 shares            Amount         Capital          Stage                 Total
                                              ------------        -------         ----------       -----------        ----------

January 24, 2000 - common stock
    issued for cash on exercise
    of warrants at $0.25 per share                 50,000               5            12,495                  -           12,500

January 26, 2000 - common stock
    issued for cash on exercise
    of warrants at $0.25 per share                 80,000               8            19,992                  -           20,000

January 31, 2000 - common stock
    issued for cash on exercise
    of warrants at $0.25 per share                 50,000               5            12,495                  -           12,500

February 8, 2000 - common stock
    issued for cash on exercise
    of warrants at $0.25 per share                 50,000               5            12,495                  -           12,500

February 9, 2000 - common stock
    issued for cash on exercise
    of warrants at $0.25 per share                 50,000               5            12,495                  -           12,500

February 11, 2000 - common stock
    issued for cash on exercise
    of warrants at $0.25 per share                150,000              15            37,485                  -           37,500

February 18, 2000 - common stock
    issued for cash on exercise
    of warrants at $0.25 per share                150,000              15            37,485                  -           37,500

February 24, 2000 - common stock
    issued for services at $0.85
    per share                                     700,000              70           594,930                  -          595,000

February 24, 2000 - common stock
    issued for interest in oil
    and gas property                            3,800,000             380         1,519,620                  -        1,520,000

February 24, 2000 - common stock
    issued for cash on exercise
    of warrants at $0.25 per share                 50,000               5            12,495                  -           12,500

February 28, 2000 - common stock
    issued for cash on exercise
    of warrants at $0.25 per share                100,000              10            24,990                  -           25,000

March 2, 2000 - common stock
    issued for cash on exercise
    of warrants at $0.25 per share                      -               5            12,495                  -           12,500

March 8, 2000 - common stock
    of warrants at $0.25 per share
    issued for cash on exercise                    50,000               5            12,495                  -           12,500

March 17, 2000 - common stock
    issued for cash on exercise
    of warrants at $0.25 per share                 50,000               5            12,495                  -           12,500

March 24, 2000 - common stock
    issued for cash on exercise
    of warrants at $0.25 per share                100,000              10            24,990                  -           25,000

March 31, 2000 - common stock
    issued for cash on exercise
    of warrants at $0.25 per share                 50,000               5            12,495                  -           12,500

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

</table>

<PAGE>F-7

                              2U ONLINE.COM, INC.
                         (A Development Stage Company)

                 CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY

    FOR THE PERIOD FROM SEPTEMBER 13, 1993 (INCEPTION) TO DECEMBER 31, 2001

<table>
<caption>

                                             <c>              <c>            <c>                <c>               <c>
                                                                                                   Deficit
                                                                                                   Accumulated
                                                                                 Additional        During the
                                                  Number of                      Paid In           Development
                                                  shares           Amount        Capital            Stage               Total
                                               ------------       -------        ----------        -----------       ----------


April 12, 2000 - common stock issued
    for cash on exercise of warrants
    at $0.25 per share                    $        50,000       $       5     $      12,495       $          -     $     12,500

April 28, 2000 - common stock issued
    for cash on exercise of warrants
    at $0.25 per share                             50,000               5            12,495                  -           12,500

August 10 2000 - common stock issued
    for services at $0.30 per share                50,000               5            14,995                  -           15,000

October 5, 2000 - common stock issued
    for cash on exercise of warrants
    at $0.25 per share                             40,000               4             9,996                  -           10,000

Net loss for the year ended
    December 31, 2000                                                                               (1,350,249)      (1,350,249)
                                               ------------       -------        ----------        -----------       ----------

Balance, December 31, 2000                     31,597,500           3,160         7,979,513         (5,783,075)       2,199,598

Net loss for the year ended
    December 31, 2001                                                                               (1,495,844)      (1,495,844)
                                               ------------       -------        ----------        -----------       ----------

Balance, December 31, 2001                $    31,597,500       $   3,160     $   7,979,513       $ (7,278,919)    $   $703,754
                                               ============       =======        ==========        ===========       ==========

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

</table>

<PAGE>F-8

                              2U ONLINE.COM, INC.
                         (A Development Stage Company)

                     CONSOLIDATED STATEMENTS OF CASH FLOWS

<table>
<caption>

                                                             <c>                    <c>                     <c>
                                                                                                                  September 13,
                                                                   Year ended             Year ended             1993 (inception)
                                                                   December 31,           December 31,           to December 31,
                                                                       2001                   2000                    2001
                                                                  ------------           ------------            ---------------
CASH FLOWS FROM OPERATING ACTIVITIES
        Net loss for the period                               $    (1,495,844)        $   (1,350,249)          $    (7,058,941)
        Adjustments to reconcile net loss to
         net cash from operating activities:
        depreciation                                                    8,017                  7,906                    20,691
        non-cash consulting fees                                       59,500                 54,541                   579,992
        non-cash management fees                                            -                      -                   224,000
        non-cash investors relations fees                             148,746                136,352                   285,098
        stock-based compensation                                            -                      -                   253,669
        non-cash component of URL write-down                                -                      -                 1,179,004
        write-down of technology license                                    -                600,000                 2,055,938
        write-off of website development costs                        126,876                      -                   126,876
        equity loss from Asdar Group                                  958,095                 90,132                 1,048,227
        minority interest in loss for the period                            -                (75,217)                 (479,978)
                                                                 ------------           ------------              ------------
                                                                     (194,610)              (536,535)               (1,765,424)
        net changes in working capital items                           29,910                185,140                   239,349
                                                                 ------------           ------------              ------------
CASH USED IN OPERATING ACTIVITIES                                    (164,700)              (351,395)               (1,526,075)
                                                                 ------------           ------------              ------------
CASH FLOWS FROM INVESTING ACTIVITIES
        Deposit                                                             -                      -                   (75,000)
        Technology license                                                  -                      -                  (135,938)
        Acquisition of furniture and equipment                         (3,195)                (9,301)                  (44,278)
        Disposition of furniture and equipment                              -                 11,582                    11,582
        Website development costs                                           -                      -                  (126,876)
        Other intangible assets                                             -                      -                    (5,189)
        Proceeds from sale of shares of Asdar Group                    22,429                      -                    22,429
        Cash acquired on acquisition of Cardstakes.com, Inc.                -                      -                   210,000
                                                                 ------------           ------------              ------------
CASH FLOWS FROM INVESTING ACTIVITIES                                   19,234                 (9,301)                 (143,270)
                                                                 ------------           ------------              ------------
CASH FLOWS FROM FINANCING ACTIVITIES
        Advances to related party                                     141,952                      -                    84,952
        Net proceeds on sale of common stock                                -                292,500                 1,590,000
                                                                 ------------           ------------              ------------
CASH FLOWS FROM FINANCING ACTIVITIES                                  141,952                304,082                 1,674,952
                                                                 ------------           ------------              ------------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                       (3,514)               (56,614)                    5,607

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD                          9,121                 65,735                         -
                                                                 ------------           ------------              ------------
CASH AND CASH EQUIVALENTS, END OF PERIOD                      $         5,607         $        9,121           $         5,607
                                                                 ============           ============              ============

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

</table>

<PAGE>F-9

                              2U ONLINE.COM, INC.
                         (A Development Stage Company)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                           DECEMBER 31, 2001 AND 2000


NOTE 1 - NATURE OF OPERATIONS AND BASIS OF PRESENTATION

The Company was incorporated on September 13, 1993 in the State of Delaware as
Power Direct, Inc.  On January 31, 2000 the Company changed its name to 2U
Online.com Inc to reflect management's decision to shift the Company's focus
from oil and gas exploration and development to internet-based business
development.

The consolidated financial statements have been prepared on the basis of a going
concern which contemplates the realization of assets and the satisfaction of
liabilities in the normal course of business.  The Company and its subsidiaries
are in the development stage, have not generated substantial revenues or
completed development of any commercially acceptable products or services to
date and further significant losses are expected to be incurred in developing
its business.  The recoverability of the carrying value of assets and ability of
the Company to continue as a going concern is dependent on raising additional
capital and ultimately on generating future profitable operations.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

The financial statements include the accounts of the Company and its
subsidiaries, a 59% interest in Cardstakes.com (incorporated on February 19,
1999), a 100% interest in PD Oil & Gas, Inc., and a 100% interest in
Cardstakes.com Enterprises Ltd.

Use of Estimates and Assumptions

Preparation of the Company's financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect certain reported amounts and disclosures.  Accordingly,
actual results could differ from those estimates.

Cash and Cash Equivalents

The Company considers all liquid investments, with an original maturity of three
months or less when purchased, to be cash equivalents.

Website Development Costs

The Company accounts for website development costs in accordance with EITF 00-02
whereby preliminary website development costs are expensed as incurred. Upon
achieving technical viability and adequate financial resources to complete
development, the company capitalizes all direct costs relating to the website
development. Ongoing costs for maintenance and enhancement are expensed as
incurred. Capitalized costs will be amortized on a straight-line basis over five
years commencing upon substantial completion and commercialization of the
website.

Intangible Assets

Intangible assets consist of licence fees and acquisition costs of Universal
Resource Locators ("URL's").  The Company reviews the carrying amount of
intangible assets for impairment whenever events or changes in circumstances
indicate that the carrying amount may not be recoverable.  The determination of
any impairment would include a comparison of estimated future operating cash
flows anticipated to be generated during the remaining life with the net
carrying value of the asset.

Furniture and Equipment

Furniture and equipment is carried at acquisition cost less accumulated
depreciation on a 30% declining balance basis.

Revenue Recognition

Fees generated from processing credit card transactions are recorded as earned,
net of holdback amounts held in reserve.  Chargebacks are charged to the
holdback account and any excess is charged against revenue.  In accordance with
SAB 101 the Company records only the net revenues generated from credit card
processing.

<PAGE>F-10

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (con't)

Foreign Currency Translation

The financial statements are presented in United States dollars.  In accordance
with Statement of Financial Accounting Standards No. 52, "Foreign Currency
Translation", foreign denominated monetary assets and liabilities are translated
to their United States dollar equivalents using foreign exchange rates which
prevailed at the balance sheet date.  Revenue and expenses are translated at
average rates of exchange during the year.  Related translation adjustments are
reported as a separate component of stockholders' equity, whereas gains or
losses resulting from foreign currency transactions are included in results of
operations.

Income Taxes

The Company follows the liability method of accounting for income taxes.  Under
this method, deferred income tax assets and liabilities are recognized for the
estimated tax consequences attributable to differences between the financial
statement carrying values and their respective income tax basis (temporary
differences).  The effect on deferred income tax assets and liabilities of a
change in tax rates is recognized in income in the period that includes the
enactment date.  At December 31, 2001 a full deferred tax asset valuation
allowance has been provided and no deferred tax asset benefit has been recorded.

Net Loss per Common Share

Basic earnings per share includes no dilution and is computed by dividing income
available to common stockholders by the weighted average number of common shares
outstanding for the period.  Dilutive earnings per share reflects the potential
dilution of securities that could share in the earnings of the Company. The
accompanying presentation is only of basic loss per share as the potentially
dilutive factors are anti-dilutive to basic loss per share.

Long-term Investments

The Company follows the equity method of accounting for its investments in
companies in which it owns more than 20% and less than 50% and over which it
exercises significant influence.  Under this method, the Company includes its
share of the earnings or losses of these affiliated companies.

Stock-based compensation

The Company accounts for stock-based employee compensation arrangements in
accordance with the provisions of Accounting Principles Board Opinion No. 25,
"Accounting for Stock Issued to Employees", ("APB No. 25") and complies with the
disclosure provisions of Statement of Financial Accounting Standard No.123
"Accounting for Stock-Based Compensation" ("SFAS No. 123").  Under APB No. 25,
compensation expense is recognized based on the difference, if any, on the date
of grant between the estimated fair value of the Company's stock and the amount
an employee must pay to acquire the stock.  Compensation expense is recognized
immediately for past services and pro-rata for future services over the option-
vesting period.

The Company accounts for equity instruments issued in exchange for the receipt
of goods or services from other than employees in accordance with SFAS No. 123
and the conclusions reached by the Emerging Issues Task Force in Issue No.
96-18, "Accounting for Equity Instruments That Are Issued to Other Than
Employees for Acquiring or in Conjunction with Selling Goods or Services" ("EITF
96-18").  Costs are measured at the estimated fair market value of the
consideration received or the estimated fair value of the equity instruments
issued, whichever is more reliably measurable.  The value of equity instruments
issued for consideration other than employee services is determined on the
earlier of a performance commitment or completion of performance by the provider
of goods or services as defined by EITF 96-18.

The Company has also adopted the provisions of the Financial Accounting
Standards Board Interpretation No.44, Accounting for Certain Transactions
Involving Stock Compensation - An Interpretation of APB Opinion No. 25 ("FIN
44"), which provides guidance as to certain applications of APB 25.  FIN 44 is
generally effective July 1, 2000 with the exception of certain events occurring
after December 15, 1998.

<PAGE>F-11

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont'd)

Recent Accounting Pronouncements

In July 2001, the Financial Accounting Standards Board ("FASB") issued Statement
of Financial Accounting Standards No. 141 ("SFAS 141"), "Business Combinations",
which eliminates the pooling method of accounting for business combinations
initiated after June 30, 2001.  In addition, SFAS 141 addresses the accounting
for intangible assets and goodwill acquired in a business combination.  This
portion of SFAS 141 is effective for business combinations completed after June
30, 2001.  The Company does not expect SFAS 141 will have a material impact on
the Company's financial position or results of operations.

In July 2001, the FASB issued Statement of Financial Accounting Standards No.
142 ("SFAS 142"), "Goodwill and Intangible Assets", which revises the accounting
for purchased goodwill and intangible assets.  Under SFAS 142, goodwill and
intangible assets with indefinite lives will no longer be amortized and will be
tested for impairment annually.  SFAS 142 is effective for fiscal years
beginning after December 15, 2001, with earlier adoption permitted.  The Company
does not expect SFAS 142 will have a material impact on the Company's financial
position or results of operations.

NOTE 3 - INVESTMENT IN ASDAR GROUP

On September 20, 2000, the Company entered into an Asset and Purchase Agreement
with ASDAR Group, a Nevada Corporation ("ASDAR").  Pursuant to the Agreement,
ASDAR purchased all of the Registrant's title and interest in the Wyoming
Property.  In exchange, ASDAR issued 5,000,000 of its common stock to the
Company, representing approximately a 48% interest in ASDAR.  The President and
a director of the Company is the Secretary and a director of ASDAR.  In
addition, a shareholder of the Company was issued 475,000 shares of ASDAR's
common stock as a finder's fee for services relating to the agreement.  During
the year the Company sold 65,000 of these shares of ASDAR's for proceeds of
$22,429.  Also during the year ASDAR issued shares of its common stock resulting
in the reduction of the Company's equity interest in ASDAR from 48% to 36%.


NOTE 4 - SERVICE CONTRACTS

On January 28, 2000, the Company entered into an agreement with Bisell
Investments, Inc., with a 2-year term, whereby Bisell will provide investor
relations services to the Company (valued at $297,500) in exchange for 350,000
shares of the Company's common stock.  The agreement was terminated and a stop
placed on the shares.  The Company intends to recover these shares for
cancellation.

Also on January 28, 2000, the Company entered into an agreement with Palisades
Financial Ltd., a company controlled by a significant shareholder, with a 5-year
term, whereby Palisades will provide investment- banking services to the Company
(valued at $297,500) in exchange for 350,000 shares of the Company's common
stock.

At December 31, 2001 the prepaid portion of the service contracts totaled
$195,860.

<PAGE>F-12

NOTE 5 - TECHNOLOGY LICENSE

On April 28, 1999, the Company entered into a licensing agreement ("Compte
Agreement") with Compte De Sierge Accommodative Corp., a corporation
incorporated in Panama City, Panama ("Compte De Sierge"). Compte De Sierge
worked in association with a group of programmers doing business as E-Card. The
Compte Agreement specifies, among other things, that the Company will have the
worldwide right to utilize and commercially exploit certain software systems and
related proprietary technology relating to the operation of the Greeting Card
Lotto, hereinafter referred to as "CardStakes.com".

The Compte Agreement provided that the Company may grant sub-licenses in the
proprietary technology on terms agreeable to Compte De Sierge.  On June 15,
1999, the Company and CardStakes.com entered into a sub-licensing agreement
whereby CardStakes.com acquired the worldwide exclusive sub-license to produce
the Cardstakes.com website using the proprietary technology.

NOTE 5 - TECHNOLOGY LICENSE (cont'd)

In exchange for the rights in the Compte Agreement, CardStakes.com issued to the
Company 9,126,531 shares of CardStakes.com's $.0001 par value common stock
representing a 59% controlling interest.

Due to the uncertainty of recoverability the Company has provided a full
impairment provision for the carrying value of the license resulting in a loss
of $600,000 for the year ended December 31, 2000.

NOTE 6 - INTEREST IN OIL & GAS PROPERTY

On January 15, 1999, the Company entered into a letter of intent with Rising
Phoenix Development Group Ltd. ("Rising Phoenix"), a Canadian corporation, to
acquire all the assets of Rising Phoenix, including that corporation's interest
in the oil and natural gas rights on 6,360 acres located in the Powder River
Basin of eastern Wyoming (the "Wyoming Property"). Such interest included Rising
Phoenix's interest in a Joint Venture Contract with Derek Resources Corporation
("Derek Resources"). Under the Joint Venture Agreement, Derek Resources and
Rising Phoenix were to jointly develop and operate the Wyoming Property.

The letter of intent specified that the Company must pay Rising Phoenix $75,000
and issue 3,800,000 shares of its common stock to Rising Phoenix and issue
800,000 common shares as a finders fee.

By agreement dated October 13, 2000 the Company sold all of its interest in the
Wyoming Property to Asdar Group, a public company with a director in common for
5,000,000 restricted common shares of Asdar Group which have been recorded at
the carrying value of the interest in the Wyoming Property.

NOTE 7 - CAPITAL STOCK

The Company's capitalization is 100,000,000 common shares with a par value of
$.0001 per share.

In 1999 the Board of Directors authorized the grant of stock options to certain
officers, directors and consultants to purchase 1,250,000 common shares at a
price of $.25 per share to October 23, 2000 and 250,000 common shares at a price
of $.25 per share to April 23, 2001. To date, no options have been exercised or
forfeited and 1,500,000 options have expired leaving no options outstanding as
at December 31, 2001. In addition, warrants were outstanding to purchase 470,000
common shares at a price of $.25 per share to July 15, 2001, 140,000 common
shares at a price of $.25 per share to July 15, 2002, and 910,000 common shares
at a price of $.25 per share to November 15, 2001. During the year 1,380,000 of
these warrants expired leaving 140,000 warrants outstanding as at December 31,
2001.

<PAGE>F-13

NOTE 8 - CREDIT CARD PROCESSING

In mid-August, 1999, the Company had set up a merchant account for the
processing of VISA and Mastercard transactions with MPact Immedia Transaction
Services Ltd.  The Company would be charged a transaction processing fee of
5.75% and a 6-month revolving reserve fund of 10% by MPact.

This processing account was set up initially to accommodate the purchase of the
Company's Internet Greeting Cards.  In early December 1999, with the
management's decision to provide the Company's "Internet" Greeting cards at no
cost to the consumer, the processing account was to be utilized solely for the
purchase of merchandise from the 2U Online.com cybermall site.

In mid-December, 1999, the Company's management was approached by a number of
clients looking for credit card processing sources and the Company's management
agreed in late December of 1999, to utilize the Company's merchant account,
beginning in early January 2000, to generate revenue from credit card
processing.  The Company made an offer whereby the above clients would be
charged a 15% to 20% transaction fee on all approved credit card transactions as
well as a 15% reserve to accommodate any charge backs and to minimize the
element of risk to any possible reversals.  This 15% reserve is a 6-month
revolving reserve whereby the 1st month reserves are paid out in 6 months plus 1
day.

NOTE 8 - CREDIT CARD PROCESSING (cont'd)

In November 2000, the Company began to receive a significant number of charge
backs from its clients and the reserves held back were eliminated.  On November
8, 2000 the Company was notified by MPact Immedia Transaction Services Ltd. that
it was terminating the processing activities and in turn, the Company instructed
its clients it would no longer be processing their transactions.  All card-
processing activities were put on hold and the Company does not intend to resume
the card processing service.

NOTE 9 - RELATED PARTY TRANSACTIONS

The Company paid cash to directors for management fees totalling $5,891 ($27,350
- 2000) for the year ended December 31, 2001.

During the year ended December 31, 2001, Palisades received $62,026 ($104,873 -
2000) for consulting and other services and reimbursement of expenses incurred
on behalf of the Company (Refer to Note 4).

At December 31, 2001 a total of $181,568 is owing to Asdar Group for cash
advances.  These advances are non-interest bearing and are being repaid
periodically from the sale of securities held by 2Uonline.com, Inc.

<PAGE>F-14

NOTE 10 - COMMITMENTS AND CONTINGENCIES

Fair Value of Financial Instruments

The following disclosure of the estimated fair value of financial instruments is
made in accordance with the requirements of SFAS No. 107. Disclosures about Fair
Value of Financial Instruments. The estimated fair value amounts have been
determined by the Company, using available market information and appropriate
valuation methodologies.  The fair value of financial instruments classified as
current assets or liabilities including cash and cash equivalents and notes and
accounts payable approximate carrying value due to the short-term maturity of
the instruments.

Concentration of Credit Risk

The Company invests its cash and certificates of deposit primarily in deposits
with major banks.  Certain deposits, at times, are in excess of federally
insured limits.  The Company has not incurred losses related to its cash.

<PAGE>15

ITEM 8.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS.

Changes in Registrant's Certifying Accountant pursuant to Item 304 (A) of
Regulation S-B:

On May 17, 2000, we decided to terminate our relationship with our principal
independent accountant, James E. Slayton, CPA. The decision to change
accountants was approved by our Board of Directors. Financial statements
prepared by Mr. Slayton contained no adverse opinion or disclaimer of opinion.
However, we believe that our failure to comply with NASD Rule 6530, which
requires any company listed on the OTCBB to be current in its public reporting
obligations pursuant to the Securities and Exchange Act of 1934, was to some
extent, attributable to the negligence of Mr. Slayton. On June 13, 2000, a
Statement of Claim, on behalf of the Company as Plaintiff, was filed in District
Court, Clark County, Nevada and served on James E Slayton, Carolyn Slayton, and
Dianne Bennitt as co-defendants.  Our lawsuit contained the following
allegations: (i) First Cause of Action - Damages for Negligence;  (ii) Second
Cause of Action - Damages for Deceit; (iii) Third Cause of Action - Breach of
Contract;  (iv) Fourth Cause of Action - Fraud; and (v) Fifth Cause of Action -
Negligent Misrepresentation of Fact. On or about May 4, 2001, we dismissed
without prejudice, the lawsuit against Mr. Slayton. We did reserve the right to
pursue the matter again in the future if we feel such action is prudent. On May
17, 2000, we engaged the firm of Schvaneveldt & Company, 275 East South Temple
Street, Suite 300, Salt Lake City, Utah 84111 as our new principal accountant.
There were no disagreements with Mr. Schvandeveldt and Mr. Schvandeveldt never
issued an accounting report.  Unfortunately, on or about September 9, 2000, Mr.
Schvanaveldt, passed away suddenly.

On or about September 21, 2000, Labonte & Co., chartered accountants, 1095 West
Pender Street, Suite 1205, Vancouver, B.C., Canada V6E 2M6 executed an
engagement letter agreeing to act as our auditors. Labonte & Co.are our current
auditors.

<PAGE>16

                                    PART III

ITEM 9.  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS.

Executive Officers and Directors. We are dependent on the efforts and abilities
of certain of our senior management.  The interruption of the services of key
management could have a material adverse effect on our operations, profits and
future development, if suitable replacements are not promptly obtained. We
anticipate that we will enter into employment agreements with each of our key
executives; however, no assurance can be given that each executive will remain
with us during or after the term of his or her employment agreement. In
addition, our success depends, in part, upon our ability to attract and retain
other talented personnel. Although we believe that our relations with our
personnel are good and that we will continue to be successful in attracting and
retaining qualified personnel, there can be no assurance that we will be able to
continue to do so. Our officers and directors will hold office until their
resignation or removal.

Our directors and principal executive officers are as specified on the following
table:

<table>
<caption>

                                     <c>     <c>                                 <c>
Name and Address                        Age     Position                            Term as Director
---------------------------------       ---     ----------------------              ------------------------------
Robert Klein
4540 Woodgreen Place
West Vancouver, British Columbia
Canada  V7S 2V6                         53      President/Director                  From March 16, 2001 to present


Robert Waters
1358 W. Georgia Street, Suite 2025
Vancouver, British Columbia
V6E 4S2                                 51      Director                            From March 30, 2001 to present

Ferdinand Marehard
1270 Robson Street, Suite 406
Vancouver, British Columbia V6E 3Z6     72      Secretary/Treasurer and Director    From October, 1998 to present

</table>

ROBERT KLEIN is our President and a member of our Board of Directors.  Mr. Klein
graduated in 1971 from the University of Waterloo with a degree in Applied Math.
Mr. Klein belongs to the Fellow of Canadian Securities Institute. From October
6, 1972 to May 30, 1982, Mr. Klein was a Vice President of Corporate Finance at
Bond Street International Securities. From June 1, 1982 to January 31, 1988, he
was on the Board of Directors of Yorkton Securities. From February 1, 1988 to
January 31, 1989, he was on the Board of Directors of First Vancouver
Securities. From February 1, 1989 to January 31, 1992, Mr. Klein was a salesman
for Georgia Pacific Securities. From February 1, 1992 to the present, Mr. Klein
has worked as a self-employed consultant. The majority of Mr. Klein's consulting
work involved the analytical review and discussion of the merits of properties
in the oil and gas industry.

ROBERT WATERS is a member of our Board of Directors.  In 1978, Mr. Waters
graduated from the University of British Columbia in Vancouver with a degree in
Political Science. In 1982, Mr. Waters graduated from York University in
Toronto, Canada with a Masters in Business Administration. He also achieved a
two-year course in Finance and Investment at Vancouver City College. From July
1982 to December 1982, Mr. Waters was a personal financial planner for Executive
Financial Services, a financial planning firm. From January 1983 to September
1983, he was a manager at Nyco Group of Companies. From January 1984 to March
1984, he was a consultant with George S. May International, a management
consulting firm. From April 1984 to September 1984, Mr. Waters was a Vice
President at Globe Business Consultants, a management consulting firm. From
November 1984 to March 1988, Mr. Waters was a stock broker for Levesque
Securities National Bank Financial, a brokerage firm. From March 1985 to October
1988, he was an instructor at The Canadian Securities Institute, a firm which
provided licensing for stock brokers. From May 1985 to February 1987, Mr. Waters
was an instructor on taxation and personal financial planning at Langara
College. From March 1988 to November 1988, he was a stockbroker for Davidson
Partners, a brokerage firm. From December 1988 to November 1989, he was a
stockbroker for Pacific International Securities, a brokerage firm. From
December 1989, to September 1998, Mr. Waters was a stock broker for Georgia
Pacific Securities, a brokerage firm.  From September 1998 to July 1999, he
provided consulting services to Business Development, a business consulting
firm. The consulting services provided by Mr. Waters to Business Development
involved consulting on corporate development strategies for corporations and
preparing business plans. From September 1999 to September 2000, he provided Las
Vegas from home.com services related to public and broker relations and
financial analysis. From March 2000 to the present, Mr. Waters has been the
President of Global Performance Capital, an investor relations firm. From
September 2000 to the present, Mr. Waters has been the President of Precise Life
Sciences (formerly "ASDAR Group"), a reporting company involved in the oil and
gas sector. Precise Life Sciences' business is more particularly described
above.

FERDINAND MAREHARD is our Secretary, Treasurer and a member of our Board of
Directors. From 1975 through 1981 Mr. Marehard was the president of Hesca
Resources Corp., Ltd.; from 1982 through 1984 he was the president of Demus
Petro Corporation; and from 1979 through 1984 he was the president of Mar-Gold
Resources, Ltd. These entities participated in the oil and gas industry and the
mining industry. During this period, Mr. Marehard had a broad range of
management duties for these companies, including oversight of drilling and
production of oil wells in Kentucky, Texas and Utah. He also negotiated the
acquisition of several properties in the Greenwood-Grandforks gold camp and
negotiated financing for the various company operations. Mr. Marehard has
experience in prospecting, including examination of property in the field. He
has supervised placer gold leases in the Yukon and has identified and negotiated
for silver, lead, zinc and copper bearing property on Vancouver Island, British
Columbia. He has experience in mining and exploration for precious and base
metals in British Columbia, the Yukon, the Northwest Territories and the United
States. Mr. Marehard was the president of West-Mar Resources Ltd. ("West-Mar")
from 1984 through 1994, during which time he managed West-Mar's participation in
various foreign and domestic gas and oil leases. In 1985, Mr. Marehard managed
West-Mar's participation in the development of six gas wells in Indiana, and
also participated in negotiations for the acquisition of a 1,200,000 acre oil
concession in Liberia, West Africa. In 1986 he acquired, on behalf of West-Mar,
a 5% working interest on 40,000 acres in Adams County, Indiana. From 1990
through 1994 he participated in drilling and developing a horizontal well and in
waterflood oil production in Texas. He also acquired, on behalf of West-Mar,
17,000 acres of gas and oil leases in the state of Washington. From 1995 to
present, Mr. Marehard provides consulting services to various companies who call
upon his expertise in oil and gas exploration.

None of the above listed persons share any familial relationship. Other than the
persons listed above, there are no significant employees expected by us to make
a significant contribution to our business. All of our directors serve until the
next annual meeting of stockholders. Our executive officers are appointed by our
Board of Directors and serve at the discretion of our Board of Directors.

There are no orders, judgments, or decrees of any governmental agency or
administrator, or of any court of competent jurisdiction, revoking or suspending
for cause any license, permit or other authority to engage in the securities
business or in the sale of a particular security or temporarily or permanently
restraining Mr. Klein, Mr. Waters or Mr. Marehard from engaging in or continuing
any conduct, practice or employment in connection with the purchase or sale of
securities, or convicting such person of any felony or misdemeanor involving a
security, or any aspect of the securities business or of theft, nor are Mr.
Klein, Mr. Waters, or Mr. Marehard the officers or directors of any corporation
or entity so enjoined.

In or around October 1997, Rising Phoenix, of which Mr. Klein is an officer,
director and shareholder, was the subject of an investigation by the Vancouver
Stock Exchange.  Rising Phoenix withdrew its listing from the Vancouver Stock
Exchange and there was no final adjudication of the matter.  However, the
Vancouver Stock Exchange did decree that the current officers of Rising Phoenix
were unacceptable.

Mr. Waters was investigated in September ,1989 by the Disciplinary Executive
Committee of the Vancouver Stock Exchange which concluded that Mr. Waters was
responsible for a securities infraction while working for Pacific International
Securities.  Specifically, the Committee determined that Mr. Waters had entered
into an improper financial deal with his client. Mr. Waters paid $3,300 in
investigation costs and was ordered to retake the registered representatives
exam, which he passed. There were no sanctions against Mr. Waters.

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE. Not all of our
officers, directors, and principal shareholders have filed all reports required
to be filed by those persons on, respectively, a Form 3 (Initial Statement of
Beneficial Ownership of Securities), a Form 4 (Statement of Changes of
Beneficial Ownership of Securities), or a Form 5 (Annual Statement of Beneficial
Ownership of Securities).

TRANSACTIONS WITH PROMOTERS.

On January 28, 2000, we entered into an agreement with Palisades Financial Ltd.,
with a 5 year term, whereby Palisades Financial Ltd. agreed to provide
investment banking services for 5 years in exchange for 350,000 shares of our
common stock, subject to Rule 144 restrictions.  Under the terms of the
agreement, Palisades Financial Ltd. will use its best efforts to provided
essential information to individuals and/or corporations whereby financing for
2Uonline.com, Inc. may result. If there is sufficient interest expressed by any
individual or corporation, Palisades Financial Ltd. will put them in contact
directly with the principals of 2Uonline.com, Inc. to pursue discussions
further.  Palisades Financial Ltd. will be responsible for all expenses incurred
in performing services under this agreement. Palisades Financial Ltd. agrees to
devote a minimum of 100 hours per month to perform its services. Either party
may terminate this agreement at any time by giving 30 days written notice to the
other party. Palisades Financial Ltd. is controlled by May Joan Liu, a
significant shareholder of 2Uonline.com, Inc.

<PAGE>18

ITEM 10.  EXECUTIVE COMPENSATION.

EXECUTIVE COMPENSATION. None of our current officers earned any compensation
during the fiscal year ended December 31, 2001 nor do we expect any of our
officers to earn compensation during the fiscal year ended December 31, 2002.
However, a former officer and director, Jack Sha was paid $5,891 during the
fiscal period ended December 31, 2001.

DIRECTORS' COMPENSATION.  Our directors do not receive compensation in their
capacities as directors. However, our directors are reimbursed for expenses
incurred on behalf of us.

STOCK BASED COMPENSATION. During the year ended December 31, 1999, $253,669 in
stock based compensation was recorded in our financial statements.  Stock based
compensation is an intrinsic value placed in respect to stock options granted to
officers, directors and employees using the Black-Sholes option pricing model.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

The following table sets forth certain information regarding the beneficial
ownership of our common stock as of December 31, 2001, by each person or entity
known by us to be the beneficial owner of more than 5% of the outstanding shares
of common stock, each of our directors and named executive officers, and all of
our directors and executive officers as a group.

<table>
<caption>

                    <c>                                        <c>                      <c>                     <c>
                                                                  Amount And Nature
Title of Class         Name of Beneficial Owner                   Of Beneficial Owner      Percent Of Class        Common Stock
--------------         ------------------------                   -------------------      ----------------        ------------

                       Compte De Sierge Accomodative Corp.(1)
                       34 - 20 Calle 34 Panama 5
                       Republic of Panama                              5,250,000                 16.62%            Common Stock

                       Rising Phoenix Development Group, Ltd.(2)
                       Suite 304, 409 Granville Street
                       Vancouver, B.C.  V6C 1T2                        3,800,000                 12.03%            Common Stock

                       CEDE & Co. (3)
                       The Depository Trust Co.
                       P.O. Box 222 Bowling Green Station
                       New York, New York 10274                        18,899,020                59.81%

</table>

(1)     The beneficial owner of Compte De Sierge is Mario Vargas Barguil, Esq.
        Mr. Barguil's address is Ingram, Carles Orillana y Guardia, Edifico
        Marbella Tower II, Calle 54 Obarrio, Planta Baja, Local #2, Panama City,
        Panama.

(2)     Rising Phoenix Development Group, Ltd. was a publicly traded corporation
        on the CDNX, the beneficial holders of which are not known to us.
        However, Robert Klein, our president and a member of our board of
        directors, is the president and a director of Rising Phoenix Development
        Group, Ltd.  Rising Phoenix Development Group, Ltd. was delisted from
        the CDNX in December, 1997.

(3)     We requested a listing of Non-Objecting Beneficial Owners, commonly
        referred to as a NOBO List. According to the NOBO List, there are no
        holders of more than 5% of our issued and outstanding shares.

SECURITY OWNERSHIP BY MANAGEMENT.  As of December 31, 2001, none of our
directors and principal executive officers beneficially owned any of our common
stock.

CHANGES IN CONTROL.  Our management is not aware of any arrangements which may
result in "changes in control" as that term is defined by the provisions of Item
403(c) of Regulation S-B.

<PAGE>19

ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

RELATED PARTY TRANSACTIONS.

RISING PHOENIX DEVELOPMENT GROUP LTD. As specified above, on January 15, 1999,
we signed a letter of intent to acquire all of the corporate assets of Rising
Phoenix Development Group, Ltd. in exchange for 3,800,000 shares of our common
stock and seventy-five thousand dollars ($75,000). The President of Rising
Phoenix, Robert Klein, was appointed to our Board of Directors on February 1,
1999. Mr. Klein resigned from our Board of Directors early in March 1999, citing
personal reasons.  On March 16, 2001, Mr. Klein was again appointed to our Board
of Directors. At the time of the transaction, Robert Klein was the holder of
750,000 non-tradeable escrow shares of Rising Phoenix.

ALBERTA PROPERTY, CANADA. Mr. Dan Drobot, the authorized signatory and agent
representing Allstar Energy Limited, is also the authorized signatory and agent
representing Jord-Ash Enterprises Ltd., our former joint venture partner in the
Alberta Gas Project. Mr. Drobot initiated and finalized the sale of our interest
in the Alberta Gas Project to Allstar Energy Limited. Mr. Drobot had no personal
interest in the transaction.

LAK RANCH PROPERTY, WYOMING. Jack Sha, our former President and director, was
nominated and appointed to the Board of Directors of Precise Life Sciences
(formerly "ASDAR Group") on March 17, 2000. As discussed above, we sold our
interest in the LAK Ranch Property to Precise Life Sciences. However, we have
been informed that Jack Sha did not take part in the vote by Precise Life
Science's Board of Directors to accept or reject the acquisition of the LAK
Ranch Oil Project from us.  We share office space with Precise Life Sciences.
Robert Klein, our current President and a member of our Board of Directors, is a
member of Precise Life Science's Board of Directors. Jack Sha had no personal
interest in the transaction.

CARDSTAKES.COM. As of December 31, 2001, we had advanced a total of $692,675.20
(2000 - $692,675.20) to our subsidiary CardStakes.com to pay for operating
expenses.  We have not yet negotiated repayment terms.  However, we anticipate
that repayment of such funds will be contingent on CardStakes.com's results of
operations.  The outstanding amount due to us bears no interest.

CARDSTAKES.COM - ANTI-DILUTION PROVISION. IN ANTICIPATION OF THE ISSUANCE OF
SHARES PURSUANT TO THE LICENSE AGREEMENT WE ENTERED INTO WITH OUR SUBSIDIARY,
CARDSTAKES.COM, CARDSTAKES.COM AMENDED ITS ARTICLES OF INCORPORATION TO INCLUDE
AN ANTI-DILUTION PROVISION PROVIDING FOR THE CONTINUOUS AND NONDILUTABLE 51%
OWNERSHIP OF CARDSTAKES.COM BY US. IN SEPTEMBER 1999, WE AGREED WITH
CARDSTAKES.COM THAT THE ANTI-DILUTION PROVISION SHOULD BE REMOVED FROM
CARDSTAKES.COM'S ARTICLES OF INCORPORATION.  AS CONSIDERATION FOR THE REMOVAL OF
THE PROVISION, CARDSTAKES.COM AGREED TO ISSUE US 2,000,000 ADDITIONAL SHARES OF
ITS COMMON STOCK. ON SEPTEMBER 10, 1999, CARDSTAKES.COM'S THEN PRESIDENT AND
SECRETARY EXECUTED A CERTIFICATE OF AMENDMENT TO CARDSTAKES.COM'S ARTICLES OF
INCORPORATION REMOVING THE ANTI-DILUTION PROVISION.

HOLM INVESTMENTS LTD & R. ANGELO HOLMES. We have the following relationships
with R. Angelo Holmes, the beneficial owner of Holm Investments Ltd ("Holm"):

*       Holm provided management consulting services to us for which we issued
        Holm 600,000 shares of our common stock. Specifically, Holm advised us
        on money management and asset acquisition. We valued those services at
        $216,000.00.

*       We purchased URL's from both Holm Investments Ltd. and R. Angelo Holmes.

*       We lease office spaces from Holm.

MAY JOAN LIU. We have the following relationships with May Joan Liu:

*       May Joan Liu provided consulting services to us for which we issued to
        May Joan Liu 250,000 shares of our common stock. Specifically, May Joan
        Liu advised us on financial matters, marketing and promotion of our
        websites and assistance in public relations.  We valued those services
        at $65,000.00.

*       We purchased URL's from May Joan Liu.

*       We entered into an investment banking contract with Palisades Financial
        Ltd., a company in which May Joan Liu is an officer.

DIRECTORS. For the year ended December 31, 1999, we issued cash and common
shares to directors for management fees totaling $247,340 as follows:

Jack Sha               $  13,904 - cash
                       $  87,000 - 290,000 shares of 2Uonline.com, Inc.
                       $  50,000 - 50,000 shares of Cardstakes.com, Inc.

Ferdinand Marehard     $   9,400 - cash
                       $  87,000 - 290,000 shares of 2Uonline.com, Inc.

Total:                 $ 247,340 in cash and stock

For the year ended December 31, 2000, we paid $27,350 to Jack Sha, our former
president and director and  an additional $32,000 was payable to him. For the
year ended December 31, 2001, we paid $5,891 to Jack Sha, our former president
and director. In addition, we cancelled the $32,000 payable to Jack Sha as at
December 31, 2001without disagreement.

PALISADES FINANCIAL LTD. For the year ended December 31, 2000, we paid $104,873
to Palisades Financial Ltd. for consulting and other services and reimbursement
of expenses incurred on our behalf. For the year ended December 31, 2001, we
paid $62,026 to Palisades Financial Ltd. Palisades Financial Ltd. is controlled
by May Joan Liu, one of our shareholders.

ADVANCE FROM PRECISE LIFE SCIENCES. For the year ended December 31, 2000, we
were advanced $14,616 from Precise Life Sciences, a company trading on the Over-
the-Counter Bulletin Board which has common directors to us. For the year ended
December 31, 2001, we were advanced an additional $166,952 from Precise Life
Sciences, leaving an outstanding balance of $181,568. Beginning in December,
2001, these funds are being paid back periodically through the proceeds from the
sale of Precise Life Sciences shares held by us.

FUTURE RELATED PARTY TRANSACTIONS. Although we have not yet formally adopted a
policy for the resolution of conflicts regarding related party transactions, we
do anticipate that we will fully disclose any and all related party
transactions, including, but not limited to,

*       disclosing such transactions in prospectus' where required;

*       disclose in any and all filings with the Securities and Exchange
        Commission, where required;

*       obtain uninterested directors consent;

*       obtain shareholder consent where required; and (v) take any and all
        other action required by relevant law and /or our governing documents

<table>
<caption>

       <c>
Item 13.  Exhibits

Exhibit No.

10.17   Agreement between us and Palisades Financial Ltd.
10.18   Asset Purchase Agreement between us and J&S Overseas Holdings
10.19   Revised License Agreement between us and Compte De Sierge
23.1    Consent Of Independent Auditors

        Articles of Incorporation*
        Certificate of Amendment to Articles of Incorporation*
        Amended and Restated Articles of Incorporation*
        Certificate of Amendment to Articles of Incorporation****
        Bylaws*
        Letter of Agreement with Rising Phoenix Development Group*
        Letter of Intent with LANSource Technologies, Inc. *
        License Agreement with Compte De Sierge*
        Agreement to sell URL between us and Holm Investments**
        Agreement to sell URL between us and May Joan Liu***
        Sub-Licensing Agreement between us and CardStakes.com***
        Asset Purchase Agreement between us and Rising Phoenix Development Group***
        Agreement to sell URL between us and CardTek Holdings Ltd. ***
        Agreement to sell URL between us and R. Angelo Holmes***
        Agreement to sell URL between us and Cybermall Consulting Services Ltd. ***
        Asset Purchase Agreement for the sale of the LAK Ranch interest to Precise Life Sciences Ltd. ****
        Assignment of Working Interest from us to Precise Life Sciences Ltd. ****
        Rights Conveyance Agreement for the sale of interest in Alberta property to Allstar****
        Assignment of Working Interest from us to Allstar****
        Warrant Agreement with YENN Asset Management****
        Warrant Agreement with Holm Investments Ltd. ****

</table>

*       Included as an exhibit to the original Registration Statement on Form
        10-SB filed on May 17, 1999

**      Included as an exhibit to the amendment to the Form 10-SB filed on
        December 13, 1999

***     Included as an exhibit to the amendment to the Form 10-SB filed on March
        24, 2000

****    Included as an exhibit to the amendment to the Form 10-SB filed on
        August 2, 2001


SIGNATURES

        In accordance with Section 13 or 15(d) of the Exchange Act, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized, on June 20, 2002.

                            2UOnline.com, Inc.,
                            a Delaware corporation

                            By: /s/ Robert Klein
                                    -----------------
                                    Robert Klein
                            Its:    President and a Director



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

/s/ Robert Klein                                            June 20, 2002
    ----------------
    Robert Klein
    President and a Director


/s/ Robert Waters                                           June 20, 2002
    ----------------
    Robert Waters
    Director


/s/ Ferdinand Marehard                                      June 20, 2002
    ----------------
    Ferdinand Marehard
    Secretary, Treasurer and a Director