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

              [X] Annual report pursuant to Section 13 or 15(d) of
                       The Securities Exchange Act of 1934

                   For the Fiscal Year ended February 28, 2002

    [ ] Transition report pursuant to Section 13 or 15(d) of the Exchange Act

                         Commission file number 0-26949

                               INTERNET VIP, INC.
        (exact name of small business issuer as specified in its charter)

                                    Delaware
         (State or other jurisdiction of incorporation or organization)

                                   11-3500919
                        (IRS Employer Identification No.)

                     94 Washington Ave., Lawrence, NY, 11559
                    (Address of principal executive offices)

                                 (516) 569-7595
                         (Registrant's telephone number)

Securities registered pursuant to Section 12 (b) of the Act: NONE

Securities  registered  pursuant  to  Section 12 (g) of the Act:  Common  Stock,
$.0001 par

Check  whether the issuer (1) filed all reports  required to be filed by Section
13 of 15(d) of the Exchange Act during the preceding 12 months, and (2) has been
subject to such filing requirements for the past 90 days. YES [X] NO [ ]

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

State issuer's revenues for its most recent fiscal year. $391,013.

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. ($3,138,830 on May 15, 2002.)

As of May 15,  2002  the  issuer  had  45,822,337  shares  of its  Common  Stock
outstanding.

<PAGE>

                                     PART 1

Item 1. Description of Business

The  following  discussion  should  be read in  conjunction  with the  financial
statements  and  related  notes which are  included  elsewhere  in this  report.
Statements  made below  which are not  historical  in facts are  forward-looking
statements.   Forward-looking   statements   involve   a  number  of  risks  and
uncertainties  including,  but not  limited  to,  general  economic  conditions,
competition and our ability to market our product.

(a) Business Development

         Internet  VIP,  Inc.  (the  "Company"),  a  Delaware  corporation,  was
organized on November 13, 1998. The Company also operates through a wholly owned
Canadian subsidiary  corporation IVIP Telcom Canada,  Inc.,  previously known as
V.I. Internet Telecommunications Inc. The Company has not been involved with any
bankruptcy,   receivership  or  similar   proceedings,   although  the  Canadian
subsidiary filed with the Canadian Bankrupcy Court System, and is now closed.

         On May 17, 2001 the Company  announced a joint  venture with  Polykvart
Telecom,  a Russian entity,  to create  "PT-Intertel  XXI", in which the Company
would hold 51% of the  venture.  PT-Intertel  XXI would offer  telecommunication
services  to  and  from  Russia  and  the  Commonwealth  of  Independent  States
("C.I.S.").

         On June 1, 2001 the Company  announced  an agreement to acquire 100% of
the issued and  outstanding  shares of Yapalot  Holdings  Inc., a  Toronto-based
company that  provides VoIP ("Voice over the Internet  Protocol")  communication
services  through  the  issuance  of  common  shares  to  Yapalot  shareholders.
Subsequent to the  transaction,  shareholders'  of each company shall own 50% of
the Company's  outstanding  stock.  This agreement was cancelled by both parties
and is now null and void.

         The Company

         The Company was formed to sell  international  long distance  telephone
services through the use of Internet based technology,  specifically, Voice over
Internet Protocol ("VoIP").

         The   Company's   business  was  organized   into  two  separate,   yet
complementary, divisions so that its revenues are derived from two markets:

         1. (Wholesale) Providing carrier and termination  services,  worldwide,
for other telecom companies, at competitive rates; and

         2. (Retail) Providing telephone calling origination and termination, at
attractive  prices,  servicing  areas of the world that currently have expensive
and/or poor quality long distance  service,  primary through the use of pre-paid
telephone cards. Competitive rates are to be achieved by using low-cost Internet
Protocol gateways and taking advantage of the efficacy of VoIP technology.

         Our Business Strategy

                                       2

<PAGE>

         The major determining factors as to where we were seeking to locate our
gateways (POPs),  and where we intended to focus our services were driven by (a)
existing  high  tariffs  and (b) the  termination  points for our  customers  of
pre-paid telephone cards.

         (i) High Tariff Regions

         We  intended  to locate  our POPs in  geographic  regions  based on the
following criteria:

         1. that currently have high telephone tariffs
         2. that have antiquated telephone infrastructure
         3. where  contacts,  especially  governmental,  underlie  most business
            development
         4. where the telecommunications industry is undergoing a modernization
         5. where we understand the cultural and business environment
         6. that have a large expatriate community in the "west".

         Then, to develop in each selected geographic location, we:

         1. used our  worldwide  contacts to seek out a local Joint Venture (JV)
            partner; (usually a government or very prominent local commercial
            entity),
         2. seeked to obtain a license  to operate a telecom  business  in that
            jurisdiction,
         3. intended to build and operate one or more IP gateways,
         4. intended to link up this gateway to the rest of our network  through
            private leased fiber-optic lines or IP telephony,
         5. seeked to supply immediate inbound traffic from existing  customers,
            and
         6.  intended  to work  with our new JV  partners  to  develop  outbound
             traffic  from three major market  sectors;  government,
             industrial,  and retail (pre-paid cards).

         (ii) Pre-Paid Customers

         Most of our pre-paid  telephone  cards were directed at specific ethnic
communities  and therefore  could be expected to generate high volume traffic to
very specific global  termination  points.  We planned to either install our own
gateways at these  destinations  or seek strategic  partnerships  that yield the
lowest cost for us to terminate traffic there.

         Our operations

         In  Canada,  the  Company  operated  through  a wholly  owned  Canadian
subsidiary,  IVIP  Telcom  Canada,  that  shared  office  space at our then head
offices in  Montreal.  IVIP Telcom was formed to develop  business in Canada and
was  responsible  for oversight and  maintaining  our equipment and gateway then
located in Montreal.  This  subsidiary has ceased  operations and has filed with
the Canadian Bankruptcy Court system.

         All of the Company's technology is state of the art, but the Company is
not dependent on any one vendor in particular. For the hardware in the switching
centers  in New  York  and  Moscow,  we  employ a  configuration  and  equipment
manufactured by Ericsson Inc.

                                       3

<PAGE>

         In the pre-paid  card division we were  directing  our efforts  towards
so-called  "switch-less  operators" as an important  part of our customer  base.
"Switch-less  operators"  are  those  companies  that  have an  established  and
well-developed  distribution network, and have begun utilizing their channels to
sell and distribute  pre-paid long distance telephone cards, yet they do not own
or maintain any telecom equipment.  We made our network available to these types
of companies,  whereby we provided a "turnkey"  telecom  network  underlying the
service that these distributors sell.

         International Division

         Our  initial  international  operation  was in  Russia.  Currently,  we
operate one IP telephony gateway center in that country,  in Moscow.  The center
is connected  to our hub in New York,  and serves as the core switch that allows
calls to be routed  from  anywhere  in North  America or from Russia to over 240
countries and territories at very low cost.

         Our  potential  customers  in Russia  can be  characterized  into three
subgroups.  The first subgroup is government ministry and related agencies.  The
second  group  is  large  users  derived  from  industry  that  are  to  receive
preferential rates. And finally, the third group of customers are individuals or
small  corporate  users  that  will  have  purchased  prepaid  calling  cards or
contracts. As with most prepaid calling card systems, the customer places a call
from any  telephone  in Russia,  by dialing a local  access  number to reach our
equipment  and then inputs his card number and  personal  identification  number
("PIN").  The  equipment  validates  the card  number and PIN and then gives the
caller a second dial tone allowing him to make the long distance  call.  For all
types of customers,  our  technology  and equipment  will process these steps in
milliseconds and the customer will be unable to detect the difference  between a
traditional long distance call between Moscow and the world and a call utilizing
our network.  The process for a call to Moscow originating in North America over
our network  operates the same way with the customer  calling an "800" number to
access  the  New  York  platform  in the  same  manner  as if he  were  using  a
conventional calling card.

         In Russia,  we operate our business  under the corporate  name Intertel
XXI  which is a  Russian  entity  owned  100% by us.  We had  owned  80% and the
remaining  20% of the Russian  company was owned by the "Special  Technique  and
Communication  Services  Institute",  an  agency  of  the  Russian  Ministry  of
Interior, but this 20% was repurchased by us for a nominal amount.

         We have letters of intent with  governmental  and  industrial  entities
expressing  an interest to purchase  telephone  service for calls from Russia to
the world. The network has been installed and tested.  However, the commencement
of revenues from Russia  suffered an  unexpected  delay due to the fact that the
Ericsson  equipment  installed by us was the most advanced  available and had as
yet not been  certified  for use in Russia,  by the Ministry of  Communications.
This procedure was finally completed April 11, 2001.

         With  this  successful  certification,   we  continue  the  process  of
attempting to convert the letters of intent to firm contracts. If the Company is
successful  in  converting   these  letters  to  firm  contracts,   the  Company
anticipates  that by the end of the first year of long distance  service between
Russia and the world the Company  will be  providing  1,000,000  minutes of long
distance traffic per month.  However,  there can be no assurance that such usage
and/or revenue  levels,  if any, will be attained.  In addition,  the Company is
still in the process of analyzing the long distance  traffic  between Russia and
Europe.  However,  there can be no assurance  that any business  will develop in
this market. To date, we have not had any revenues from this service.

                                       4

<PAGE>

         Our Technology

         Conventional telephone service (PSTN) is a circuit-switched technology.
When a call is placed,  the system switches open a direct connection between the
sender, and then over a series of switching facilities,  to the receiving party.
The connection  remains open during the duration of the telephone call. Since no
one else can use the circuit  while a call is in  progress,  more  circuits  are
required,  which leads to  inefficiency  and expense.  This,  together with high
tariffs in many  jurisdictions,  are the basic reasons why telephone  companies,
and the intermediate switching companies, charge high prices for their services.

         Internet Protocol (IP) telephony is a packet-switched  technology,  the
basis of all Internet communication. IP breaks network data up into small chunks
or packets,  which is then sent out on the Net.  These  packets are routed using
the  most  expedient  path  available  at  the  time,  until  they  reach  their
destination. The data can consist of e-mail, video, and for our purposes--voice.
Additionally,  IP compression  techniques  allow five to ten times the number of
voice calls over the same bandwidth as compared to traditional  circuit-switched
voice traffic, substantially reducing the cost of carrying this traffic.

         Thus,  a caller  does not  have to place a  conventional  long-distance
telephone call to reach a party anywhere in the world,  since with IP telephony,
every call is simply"voice"  e-mail away. The caller initiates a local call to a
specialized  switching center or gateway  connected to an IP provider.  The call
travels  over the  Internet to the  receiver's  geographic  area and a switching
center in that area  completes  the call over those locals  telephone  lines.  A
growing number of  individuals,  governments,  and  corporations  are using this
technology every day to send data, voice conversations, and even money.

         On the North American side, the Company has established a presence with
a prepaid  telephone card  distributor in the New York City area. On May 3, 2001
the company received a purchase order of approximately $2.6 million. The company
continues  to develop and market its services  throughout  Canada and the United
States as well as the Caribbean.

         The Company  does not expect to incur any  material  costs in complying
with environmental laws.

         At fiscal year end,  the  Company had total of 5 employees  all of whom
were  full  time  employees,  including  3 members  of  management.  None of our
employees are members of a union and we believe we have a good relationship with
our employees.

         On October 4, 2001,  the  Company,  through a filing with the  Canadian
Bankruptcy  Court  System,  closed its wholly  owned  subsidiary  - IVIP  Telcom
Canada,  Inc.  This closing  resulted in a net write-off of  liabilities  in the
current year totaling $1,662.750.

         Internet VIP, Inc. has not otherwise been involved with any bankruptcy,
receivership or similar proceedings.

         On May 17, 2001 the Company  announced a joint  venture with  Polykvart
Telecom,  a Russian entity,  to create  "PT-Intertel  XXI", in which the Company
would hold 51% of the  venture.  PT-Intertel  XXI would offer  telecommunication
services  to  and  from  Russia  and  the  Commonwealth  of  Independent  States
("C.I.S.").

                                       5

<PAGE>

         At the beginning of the fiscal year,  The Company was confident that it
could realize the goals that it had set for itself, but, as the year progressed,
and the telecommunications  industry declined,  mainly due to overcapacity,  and
the Company  realized that, not only would the goals not be met, but that it was
faced with a diminishing market for the coming future.

         At that time,  the  Company  began  looking  for a merger  partner  for
itself, or other business ventures.  After studying the possibilities available,
the Company  finally  signed an Asset  Transfer and Change of Control  Agreement
with NewTech Group International Inc, as described below.

         Subsequent Events

         Pursuant to an Asset  Transfer  and Change of Control  Agreement  dated
April 11, 2002 (the  "Agreement"),  between Internet VIP, Inc. and NewTech Group
International,  Inc.  of  Blainville,  Quebec,  Canada,  ("NewTech")  it is  the
intention of the Company to re-organize the capitalization of the Company; amend
its corporate  charter to change its name to NewTech  Brake Corp.;  spin off its
telecom business; and acquire a new business from NewTech.

         Prior to closing the Agreement,  the Company will  effectively  reverse
split  its  common  shares  in a ratio of twenty  (20) to one (1).  The  current
business,  which would include the assets,  liabilities  (except for outstanding
debts not to exceed  $200,000)  and  current  operations,  will be spun-off to a
newly formed  wholly owned  subsidiary of the Company  ("Newco").  At that time,
existing  shareholder's of the Company will be issued all of the equity (shares)
of Newco as part of a tax-free reorganization.

         At closing,  NewTech will transfer  interests in certain  patents,  and
rights of  certain  automotive  technologies  specifically  related to the brake
system in heavy vehicle  markets (the "Newtech  Interests")  to the Company.  In
consideration for its receipt of all of the Newtech Interests,  the Company will
issue to Newtech,  approximately  45 million  common shares which will equate to
approximately  95%  of  the  then-outstanding  Common  Shares  of  the  Company,
calculated on a fully-diluted basis.

         The  Closing of these  transactions,  which  should  take  place  after
NewTech  completes its due diligence,  is anticipated to occur on or around July
1, 2002.

         Further pursuant to the Agreement, NewTech had the right to designate a
majority  of the Board of  Directors  of the  Company  effective  ten days after
having met certain  regulatory  requirements  ("the  NewTech  Designees").  This
change in the  majority of the Board was  completed  on April 19,  2002.  In the
event the transaction  between the Company and NewTech does not close, the newly
appointed NewTech Designees to the Company's Board will promptly resign.

         After the closing,  Newco,  the spun off entity,  expects to retain its
current  management and continue its present telecom operations at their current
business location.  The present public Company, now controlled by NewTech,  will
have changed its corporate  name to NewTech Brake Corp.,  have a new CUSIP,  and
anticipate obtaining a new NASD Bulletin Board trading symbol.

NewTech Brake Corp.

         Under the name of NewTech  Brake  Corp.,  our new  business  will be to
identify,  develop  and  exploit,  under  licenses  bought from  NewTech  Group,
opportunities  to provide a new full contact disc brakes and related  components
to the North  American and European heavy vehicle  market.  These new brakes are
called NT brakes.

                                       6

<PAGE>

The Brake Industry

         The motor vehicle industry has been in existence since the 19th century
and can be  classified  as a mature  and  performance/cost  driven.  Brakes  are
complex,  high-precision  components and part of the most critical components of
motor vehicles.  Nevertheless,  there has been no significant  innovation in the
brake  industry  for over fifty  years and the  caliper  concept  disc brake has
reached its optimal  development  potential.  As a result, the brake industry is
very  competitive,  with a small number of  suppliers  depending on economies of
scale and intra-industry consolidation for growth.

         Although disc brakes have gradually replaced drum brakes in automobiles
and light trucks in North America,  they have not proven significantly  superior
and economical to use on trucks,  trailers and buses.  Drum brakes, a technology
that dates back to the First World War, are still installed on approximately 97%
of heavy  vehicles,  i.e.,  classes 7 and 8, in  operation in North  America.  A
significant  fact, and key to NewTech Brake's  marketing  strategy,  is that the
customer  selects the brakes to be installed even when purchasing his new bus or
truck. (Source - Frost & Sullivan).

         Competitive  factors are:  durability and reliability,  price,  ease of
installation,  low maintenance  requirements and light weight combined with high
strength.

The NewTech (NT) Brake

         The patented  NewTech full contact disc brake,  invented  originally in
1977 by Yvon Rancourt, Chairman and Chief Operating Officer of NewTech Group, is
a bold departure from conventional  braking  technology.  It combines disc brake
braking  efficiency,  lighter weight with large contact friction area comparable
to drum brake.  The NewTech brake can stop a truck,  loaded to its maximum gross
weight, from 60 MPH in less than 200 feet.

         After nearly ten years of virtual and computer design,  the expenditure
of over $30 million of research and development work, and more than two years of
extensive  testing,  the current design of the foundation  full-contact brake is
now ready for industrialization and commercialization.

Business Development Plan

We plan to address the North American market for heavy vehicle brakes first. The
total potential for the North American market for NT brakes is made up of:

        OEM - new busses and trucks - 2.1 million NT brakes per year
        Retrofit After-market - 7.5 million NT brakes/year
        Maintenance After-market - 29.5 million maintenance kits per year
       (Source - derived from Frost & Sullivan).

General marketing strategy

         NewTech  Brake has set its target to supply 7.5% of the North  American
market for heavy vehicle  brakes by 2007. To achieve this goal, we will employ a
"push-pull" strategy. We intend to build on existing  opportunities in the North
American after-market to demonstrate the superiority of our new brake technology
("pull"),  while simultaneously working with original equipment manufacturers to
make NT brakes available on new trucks, busses and trailers ("push").

                                       7

<PAGE>

         The North  American  market is ideal for  attacking  the  after-market,
i.e., brake replacement on already manufactured vehicles,  since in this market,
vehicle  users have the final say as to which  brakes will be installed on their
trucks or busses.  Our strategy,  in the early days, is to align  ourselves with
strategic  partners in specific  user  industries  such as  municipal  transport
authorities,  municipal  refuse  haulers  and major "stop and go" fleets such as
postal and courier services.

         Furthermore,  in the  heavy  vehicle  market,  brakes  are  matched  to
heavy-duty axles, which in turn are supplied by a small number (3) of major axle
manufacturers,  including  Dana &  Meritor  in the  U.S.  and ZF  from  Germany.
Combined,  these  manufacturers  represent  over  90% of  all  the  axles  used.
Consequently,  each "standard" axle to which the NT brake has been adapted, adds
all the  trucks  or  busses  with the same  axle to our  potential  NT  customer
pool.Our core strategy for attacking the after-market is therefore to:

     1.   Identify   high-profile   niches,   where  the  NT  brakes'   improved
          performance and/or economics can be demonstrated;
     2.   Select the most frequently used axle(s) for adaptation; and
     3.   Identify  and sell to  strategic  customers  who will  benefit from NT
          brakes and serve as market leaders.

Specific  opportunities  include the Quebec  municipal bus market,  where the NT
brake can solve performance and cost problems for urban transit  companies.  The
Quebec market is ideal for the  introduction  of the new brakes because  NewTech
Group is already known there and the market is close to NewTech Group's Canadian
Research & Development  Center.  More importantly,  the Quebec market represents
the  combination of a standard North American  vehicle  profile,  and an extreme
meteorological  environment,  all of which complement test conditions.  Once the
program is firmly established in Quebec,  other large public transport fleets in
the USA and Canada will be contacted.

Additional  niche  markets  to be  addressed  are  sanitation  trucks  and other
short-haul  frequent-stop  trucks,  followed by other  markets that have similar
problems  related either to cost or performance.  In parallel,  we will approach
the large long-haul  fleets,  where durability and operator safety are the major
concerns.

The second part of our  strategy is to  conclude  arrangements  with one or more
heavy  vehicle  manufacturers  to offer  the NT brake as  standard  or  optional
equipment on new vehicles.  Such an arrangement is already under discussion with
a major  European truck  manufacturer,  with a target  introduction  of the full
contact  brake to the  European  market for the 2007  model  year,  although  no
assurances can be given that an agreement will be concluded.

Product Manufacturing and Distribution Strategy

         NewTech  Brake will base its  products  on the  intellectual  property,
registered  patents and patents  pending  controlled  by NewTech  Group and will
receive an exclusive license covering North American and Europe. We will in turn
identify the most advantageous approach to delivering its product to the market.

         The  preferred  approach  is  to  create  strategic  partnerships  with
existent OEM suppliers through  non-exclusive  licenses for its products.  We do
not  wish to  compete  directly  with the  current  manufacturers  in the  brake
industry and would benefit from the  credibility  brought on by an alliance with
an  existing  supplier.   However,   we  will  examine  the  creation  of  joint

                                       8

<PAGE>

manufacturing  ventures or, if necessary,  organize a number of sub-contractors,
managed by us, to supply the needs of the niche markets.

         We believe that the best way to ensure distribution of our full-contact
brakes beyond the niche markets already identified,  will be to partner with, or
acquire a North American  distributor of brakes and brake  components.  Although
candidate  companies have been identified,  such an acquisition is not reflected
in our current  financial  forecasts.  Various  cost sharing  strategies  and/or
royalty agreements can be negotiated to secure additional revenues for Newtech.

The Re-structured Company

         Consistent  with its business  model, we intend to establish a flexible
corporate  structure,  designed to accommodate  the needs of its markets and the
alliances and partnerships  needed to deliver brakes to a conservative  industry
with established norms of operation.

Interim Management

         To ensure an effective start,  NewTech Group will provide the personnel
to manage the Company until such a time as the permanent  management is put into
place. Interim management will:

          o Prepare a detailed  corporate  development plan including  operating
          budgets, detailed marketing plan, HR strategies
          o Manage the current revenue opportunities
          o Build the organization, including hiring a president
          o  Choosing  corporate  locations  in  Quebec  and  the US  (Initially
          Blainville, Quebec).
          o Identify and conclude legal  agreements with strategic  partners for
          manufacturing, distribution and sales.

Mr. Denis Gamache is the Interim CEO.

NewTech Group International Inc.

         In addition to providing  licenses and R & D, the role of NewTech Group
will  be to  ensure  a  successful  beginning  for us in our  new  business.  As
indicated, it will immediately provide the interim management and infrastructure
needed to get the new  company  off to a good  start.  On a  longer-term  basis,
NewTech Group will provide us with design and engineering services, the tool and
die design required for the manufacturing of the various components, as well as,
the dynamometer and road testing of the numerous platform models.

         NewTech Group will provide these services on a reasonable fee basis. We
estimate  that a turnkey  contract  to adapt the  NewTech  brake and system to a
particular platform,  which would include the design,  engineering,  prototyping
and  testing  will cost up to $2  million  dollars.  These  costs will be reduce
substantially  once the processes for fabrication are standardized and strategic
partners are in place.

Item 2. Description of Property

         Since December 2001, the Company  maintains its corporate offices at 94
Washington Ave., Lawrence,  NY and does not pay rent for these premises.  Before
that date,  The  Company  was  located  at 1155  University  Street,  Suite 602,
Montreal,  Canada  where we had  approximately  1,550  square  feet at an annual

                                       9

<PAGE>

rental of  approximately  $20,000  per year which  included  all  utilities  and
applicable taxes. That lease was cancelled in December 2001.

Item 3. Legal Proceedings

         The  Company  is  not   currently   involved  in  any  material   legal
proceedings.

Item 4. Submission of matters to a vote of security holders

         None

                                     PART II

Item 5. Market for Common Equity and Related Stockholder Matters

         (a) Market Information

         The Company's  common stock commenced  quotation on the NASD's Bulletin
Board under the ticker symbol IVIP in March, 2001.

         The Company,  on February 28, 2002, had 600,000 class A warrants issued
and  outstanding.  Each  Warrant  entitles  the holder to purchase  one Share of
restricted  Common Stock at an exercise  price of $1.00,  subject to adjustment,
until December 31, 2002.

         In  addition,  the Company had 354,250  class B warrants.  Each Warrant
entitles  the holder to  purchase  one Share of  restricted  Common  Stock at an
exercise price of $1.50, subject to adjustment, until March 31, 2003.

         None of the  shares  underlying  the  warrants  have  any  registration
rights.

         As of February 28, 2002, the  Registrant  had 45,822,337  shares of its
Common Stock outstanding.

         Of the 45,822,337 shares of common stock outstanding, 29,668,419 shares
are currently subject to the resale restrictions and limitations of Rule 144. In
general,  under Rule 144 as currently in effect,  subject to the satisfaction of
certain other  conditions,  a person,  including an affiliate,  or persons whose
shares are aggregated with affiliates, who has owned restricted shares of common
stock  beneficially  for at least  one year is  entitled  to  sell,  within  any
three-month  period,  a number  of shares  that does not  exceed 1% of the total
number of outstanding shares of the same class. In the event the shares are sold
on an exchange or are reported on the automated quotation system of a registered
securities association, you could sell during any three-month period the greater
of such 1% amount or the average  weekly trading volume as reported for the four
calendar weeks preceding the date on which notice of your sale is filed with the
SEC. Sales under Rule 144 are also subject to certain manner of sale provisions,
notice requirements and the availability of current public information about us.
A person who has not been an affiliate for at least the three months immediately
preceding the sale and who has beneficially  owned shares of common stock for at
least two years is entitled to sell such shares under Rule 144 without regard to
any of the limitations described above. The list of sales of unregistered shares
of  the  Company's   securities  appears  in  the  footnotes  to  the  financial
statements.

         (b) Holders

                                       10

<PAGE>

         On February 28, 2002,  there were 347 holders of the  Company's  common
stock,  one  holder of the  Company's  Class A  warrants  and 6  holders  of the
Company's Class B warrants.

         (c) Dividends

         The  Company has had no profits to date,  nor has the Company  declared
any dividends to date.  The payment by the Company of dividends,  if any, in the
future,  rests within the  discretion of its Board of Directors and will depend,
among other things,  upon the Company's earnings,  its capital  requirements and
its financial condition,  as well as other relevant factors. The Company has not
declared any cash  dividends  since  inception  and has no current  intention to
declare any.

         (d) Trading Statistics

IVIP-Internet VIP, Inc. - Trading history for the fiscal year ended February 28,
2002 was as follows:

   Quarter         High        Low         Close
   -------         ----        ---         -----
     Q1           $ 0.750     $ 0.750      $ 0.750
     Q2           $ 0.700     $ 0.180      $ 0.270
     Q3           $ 0.300     $ 0.030      $ 0.040
     Q4           $ 0.073     $ 0.028      $ 0.030


Item 6. Management's Discussion and Analysis of Financial Condition.

         Although we had some revenues from the sale of pre-paid  calling cards,
since we have had no revenues  from our core telecom  business we continue to be
in the development  stage.  During the year ended February 28, 2002, we incurred
an operating loss of $1,515,344 as compared to an operating loss of $638,254 for
the year ended  February 28, 2001.  The  increased  loss is primarily  due to an
increase in our professional  fees relating to the NewTch  transaction and other
aborted  transactions,  the  recognition  of salaries  payable to management and
staff and additional administrative expenditures.  Revenues totaled $391,013 for
the year  ended  February  28,  2002  compared  to  $648,075  for the year ended
February  28,  2001.  To date,  all of our  revenues  have come from the sale of
pre-paid  calling  cards.  In fact,  all of our sales have been to one customer.
High  concentration of sales are generally viewed with some  apprehension and we
hope to attract additional customers.

         As reflected in our  February 28, 2002 balance  sheet,  the Company has
negative working capital. The Company's operations are not generating sufficient
cash to maintain  its  present  operations.  Projected  annual  salaries  are an
aggregate  of  $100,000,  which  is  based  on the  current  headcount  with  no
additional hiring of personnel.  We do not expect to incur only charges for rent
for  the  next  twelve  months  in  New  York.   Professional   fees  should  be
significantly  lower than prior  years  since we have  completed  the  necessary
filings with the Securities and Exchange Commission for the NewTech transaction.
Projected annual professional fees are $100,000 based on the Company maintaining
reporting  compliance.  Travel in the past was  necessary to develop the Russian
hubs.  Since these  locations  are now  operational,  travel will be reduced and
limited  primarily as a monitoring  tool.  Projected  annual  travel  expense is
$50,000.  During the year we increased  our  marketing  activity in an effort to
generate more sales.  Projected  marketing  costs for the next twelve months are
$100,000.  The  company  is also  reviewing  all non  essential  activities  and
expenditures and fixed costs such as line rentals,  office leases,  salaries and

                                       11

<PAGE>

consulting  fees and will be  aggressively  curtailing  these items to assist in
reducing the cash used in operating activities.

         Since this discussion is purely historical, and the Company will not be
continuing  this line of  business,  since it  intends  to spin off the  telecom
business even if the deal with NewTech is not  consummated,  there appears to be
little  purpose  served  by having a more  detailed  discussion  of the  telecom
business.

         We anticipate that we will have to raise  additional  funds in the next
twelve  months  through  liability  or equity  financing.  The  Company  is also
exploring areas of strategic  alliances with other organizations in an effort to
better position itself. (See subsequent events discussion referred to above)

Item 7. Financial Statements

         The financial  statements are included  herein  commencing on page F-1.
The Company is not required to provide supplementary financial information.

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

         None.

                                       12

<PAGE>

                                    PART III

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

Directors  serve for one year terms and until their  successors  are elected and
assume  office.  At the close of the  fiscal  year on  February  28,  2002,  the
following constituted the Board of Directors:

Name                                Age         Position

Dr. Ilya Gerol                      62          Chairman

Jack Ehrenhaus                      54          President

Viatcheslav Makarov                 47          Secretary, Treasurer and
                                                Director


Dr. Ilya Gerol: Chairman

         Dr.  Ilya  Gerol is an expert in  communications  with over 28 years of
experience. A Canadian of Russian descent, Dr. Gerol is Chairman of the Board of
Directors.  He  has  consulted  to the  Economic  Council  of  Canada,  and  has
researched  and  analyzed   international   information  and  economic   trends,
specializing in energy, communications, and the world economy. From 1991 to 1994
he was a consultant on Eastern Europe and Commonwealth of Independent  States to
Economic Counsel of Canada for Amberoute  International Group. From 1994 to 1997
Dr.  Gerol  was  Editor-in  Chief and Vice  President  -  International,  of the
newsletter D.A. & G. Information and Analysis,  a publication  covering economic
and political news from Russia and Eastern  Europe.  Dr. Gerol has been on staff
and/or visiting professor for over 14 universities throughout to world including
State  University  of Winnipeg,  University  of British  Columbia,  Moscow State
University, Hebrew University and others.

Jack Ehrenhaus, President and Director

         Mr.  Ehrenhaus  became  President  and a  Director  of the  Company  in
December 2001. Mr.  Ehrenhaus has been employed by Nais Corp., and a shareholder
of that Company since 1990. Nais Corp. is an investment  banker.  Prior thereto,
Mr Ehrenhaus acted as a consultant  providing investment banking services for at
least twenty years.

Viatcheslav Makarov: Secretary, Treasurer and Director

         Mr.  Makarov has been the  Secretary and  Treasurer  since  February 1,
2001,  and prior  thereto he was the Vice  President  and  Director of Sales and
Marketing  (Russia).  Mr.  Makarov was  trained as an  engineer  and his initial
career was as an  avionics  scientist  in the  former  Soviet  Union.  From 1989
through 1995, he was the chief  representative  of Volvo  (automotive) in Russia
and,  as well,  worked as a member of  Renault  bureau in Moscow.  In 1996,  Mr.
Makarov  moved to  Canada  where he  established  and  currently  operates,  the
Interservice  Group,  a group of companies  that  consult to U.S.,  Canadian and
European business circles on financial and industrial development within Eastern
European and C.I.S.  countries utilizing the many contracts and connections that

                                       13

<PAGE>

he has  cultivated  in the last ten  years in both the  Russian  government  and
industry.

New Board

As discussed above,  effective April 19, 2002 there was a change in the majority
of the Board  effected by NewTech.  Dr. Gerol and Mr.  Makarov  resigned and the
following people were added as directors and officers of the Company:

Yvon Rancourt, Director/Chairman, Age 56

         Mr. Yvon Rancourt is Chairman of the Board and Chief Operating  Officer
of NewTech Group International ("NewTech"),  is the inventor of the NewTech Full
Contact Disc Brake and one of the founders and the principal  patent  holders at
NewTech.  NewTech was created in 1989.  From 1976 to 1991, he served as Director
of Mined Material Fabrication at Compania Minera Ucalali S.A. From 1974 to 1976,
he was managing  director at Les  Manufacturiers  de Precision de Beauce Inc., a
manufacturer  of truck  trailer  axles.  From 1973 to 1974,  he was  Director of
Production  for Snow Jet, a  manufacturer  of  snowmobiles.  In 1966, he founded
Beauce Machine Shop, and held the position of Managing Director until 1973. Yvon
is the brother of Claude Rancourt.

Claude Rancourt, Director/ Secretary, Age 53

         Mr.  Claude  Rancourt  is Director  of Legal  affairs of NewTech  Group
International  Inc.,  is  a  notary  (L.L.L.   1971,  D.D.N.  1972,   Sherbrooke
University,  Quebec).  He was in private practice as a notary from 1976 to 2000,
and from 1972 to 1974,  specializing  in the fields of Real Estate and Corporate
Law. From 1974 to 1976, he was a Director at Les  Manufacturiers de Precision de
Beauce  Inc.  He is one of the  founders  of  NewTech  and the  brother  of Yvon
Rancourt.

Denis Gamache, Director/Interim CEO, Age 51

         Mr.  Gamache is a  graduate  in  management  and  marketing  from Laval
University.  After  marketing  positions with Travelers and Xerox of Canada,  he
founded  and  became  president  of  Les  contenants  sanitaires  C.S.  inc.,  a
fabricator of waste  management  equipment.  Subsequently he founded and managed
Corporation financiere HDJM inc, (Rental of waste management equipment),  Centre
regional de recuperation C.S. (Sorting of recyclable  materials for Quebec City)
and Recuperation C.S. inc. (Collection of waste and recyclable materials). After
selling his interest in the above companies, he helped the new owners complete a
number of acquisitions, including that of Services Sanitaires Leclerc inc, owner
of a landfill in  St-Tite-des-Caps.  Mr. Gamache is co-founder and member of the
Board  of  Convoyeurs  B.M.W.  inc  (Conveyors)  and  L.P.M.  Technologies  inc.
(Polymers and other  products used for paper and  cardboard  production).  He is
also the founder and president of  Clicgolf.com  an Internet  based  reservation
system and shareholder and  administrator  of Institut Athena  formation inc., a
company that provides office productivity and multimedia training. A shareholder
of NewTech since October 2000, he was named to the management  committee of that
company in February 2002.

Gilbert Lasnier, Director, Age 45

         Mr.  Lasnier  is a  graduate  from  Laval  University  with a degree in
Geodesics.  After working for the government in Geodesic Services, Hydro Quebec,
Domtar and Nepcon Inc, he founded and became president of Sigrafix Inc. Sigrafix
was a Geographic  Information Systems (GIS) company engaged in implementation of
cartographic software. Presently he works as a GIS Analyst for the International
Civil Aviation Organization (ICAO) in Montreal, Quebec.

                                       14

<PAGE>

Marc-Antoine Gratton, Director, Age 49

         Mr.  Gratton  is Vice  President  and  Comptroller  of Optron  Inc.,  a
Canadian based Company  specializing  in the sales,  rentals and  maintenance of
Geodetic  Instruments and in lasers for industry and construction.  From 1974 to
1985 he was a logistics  consultant with several large companies  including Bell
Canada  International,   Cartier  Engineering  BGCheco  International  and  J.F.
Pritchard  & Sons  International.  During  that  period he worked on a number of
overseas  projects,   including  the  West-African  Panaftel  telecommunications
implementation,  the Andekaleka Hydroelectric  Development Project in Madagascar
and a large telecommunications project in Zaire. He also worked on the Reza Shah
Kabir  Hydroelectric  development  project in Iran and as  administrator  of the
Hassi R'Mel (Algeria),  training center,  site of a major natural gas plant. Mr.
Gratton has been a shareholder of NewTech since 1995.

Section 16(a) Beneficial Ownership Reporting Compliance

         Section 16 (a) of the  Securities  Exchange  Act of 1934  requires  the
Company's officers,  directors and beneficial owners of more than ten percent of
any class of Company's  equity  securities,  to file  reports of  ownership  and
changes in ownership  with the  Securities  and Exchange  Commission.  Officers,
directors  and  beneficial  owners of more than ten percent are  required by SEC
regulation  to furnish the Company  with copies of all Section  16(a) forms they
file.  During the fiscal year ending  February  28, 2002,  all of the  officers,
directors and 10% stockholders did not fail to make any filings.

Item 10. Executive Compensation

(a) General

         Commencing  on March 1, 2000,  the Company  agreed to pay Dr. Gerol and
Mr. Makarov an annual salary of $72,000 USD each.

         Commencing May 1, 2000, Mr.  Richer's salary as CEO was $90,000 USD per
annum.  Mr. Richer also received 100,000 shares of the Company's common stock at
$.0001 as part of his employment contract. Mr. Richer's contract also grants him
options to purchase  annually  100,000 shares of the Company's common stock at a
price  of $0.05  while  his  employment  contract  is in  effect.  Mr.  Richer's
employment  contract  also allows a car  allowance of  approximately  $4,000 USD
annually.  As at May 1, 2001,  Mr. Richer  indicated that he would not renew his
contract. He has since left the employ of the Company.

(b) Summary Compensation Table

<TABLE>

                           SUMMARY COMPENSATION TABLE

Name and                                                             Other             Long-term
Principal Position         Year            Salary      Bonus       Compensation     Compensation:Options
------------------         ----            ------      -----       ------------     --------------------
<S>                          <C>            <C>           <C>           <C>                <C>

Dr. Ilya Gerol               2000           12,000        0             0                   0
Chairman & Chief             2001(1)        65,000        0             0                   0
Executive Officer            2002           12,000        0             0                   0

</TABLE>

(1) CEO from March 1, 2000 (start of fiscal year through April 30, 2002).

                                       15
<PAGE>

(c)  Option/SAR Grants Table

                      Option/SAR Grants in Last Fiscal Year
                                Individual Grants
<TABLE>

------------------------------------------------------------------------------------------------------------------

                         Number of
                         Securities          % of Total
                         Underlying          Options/SARs
                         Options/            Granted to
                         SARs                Employees in     Exercise or Base         Market    Expiration
Name                     Granted (#)         Fiscal Year        Price ($/Sh)           Price      Date
-------------------------------------------------------------------------------------------------------------------
<S>                      <C>                 <C>                       <C>           <C>          <C>

CEO - C. Richer          100,000             100%                      $0.05         $1.00        March 31, 2001
</TABLE>

These options were exercised on March 30, 2001.

(d) Aggregated  Option/SAR  Exercises in Last Fiscal Year and FY-End  Option/SAR
    Values

    None

(e) Long-Term Incentive Plans - Awards in Last Fiscal Year

    None

(f) Compensation of Directors

    No Director receives any compensation for his service as a Director

(g) Employment contracts and termination of employment and change-in-control
    arrangements.

         On April  28,  2000 the  Company  entered  into a  one-year  employment
agreement with its CEO, Mr. Christian Richer. The agreement was effective May 1,
2000 through April 30, 2001 and was automatically  renewable unless either party
gives notice to terminate  within 60 days of the expiration date (April 30). The
contract  reflects an annual  salary of $90,000  USD. Mr.  Richer also  received
100,000 shares of the Company's common stock at $.0001 as part of his employment
contract.  Mr.  Richer's  contract  also grants him options to purchase  100,000
shares of the  Company's  common stock on March 31 each year the agreement is in
effect at a price of $0.05 per share.  Mr.  Richer's  employment  contract  also
allows a car allowance of  approximately  $4,000 USD annually.  The contract was
not renewed.

h) Report on repricing of options/SARs

   None

                                       16

<PAGE>

i)  NewTech designated Board members and Officers

None of the NewTech  designated Board members or Officers  currently hold shares
in the  Company  nor have they  received,  to date,  any  compensation  as Board
members or Officers of the Company.

Item 11. Security Ownership of Certain Beneficial Owners and Management

         The  following  table sets  forth the  information  as of May 15,  2002
regarding the  beneficial  ownership of the Company's  Common Stock,  $.0001 par
value,  as of the date hereof and after the Offering by (i) each person known by
the  Company  to own  beneficially  more  than  five  percent  of the  Company's
outstanding  shares of Common Stock, (ii) each director and executive officer of
the Company who owns shares and (iii) all directors  and  executive  officers of
the Company as a group. Unless otherwise  indicated,  all shares of Common Stock
are owned by the  individual  named as sole  record  and  beneficial  owner with
exclusive  power to vote and dispose of such shares.  None of the people  listed
below owns any other securities of the Company. There are no arrangements, other
than those  mentioned in the  "Subsequent  Events" section of this document (see
above) which may result in a change in control of the Company.

<TABLE>

Title of                 Name and Address                   Amount and Nature             Percent
Class                    of Beneficial Owner                of Beneficial Owner           of Class
-------------------------------------------------------------------------------------------------------
<S>                      <C>                                <C>                            <C>

Common Stock             Ilya Gerol (1)                     3,008,266                       6.57
Common Stock             Viatscheslav Makarov (1)           3,008,266                       6.57
Common Stock             Derek Labell (1)                   2,809,266                       6.13

Executives Officers and Directors as a Group                   -0-
</TABLE>

---------------------------------
(1) Uses Company's address

Item 12. Certain Relationships and Related Transactions

         By way of an assignment from VI  Interservice  Inc., an entity owned by
V.  Makarov,  the Company has entered  into an office  lease  agreement  for its
Montreal office on September 15, 2000. The lease was cancelled in December 2001.
Monthly rent  amounts,  which  included  taxes,  were $1,705.  Mr.  Makarov is a
shareholder  and was a director  and  officer of  Internet  VIP,  Inc.  Prior to
September 15, 2000 the Company rented office space from VI Interservice  Inc. at
an annual  rental of $24,000  USD.  The  Company  believes  the rate was at fair
market value.

         During the fiscal period ending February 28, 2002, the Company received
marketing  services from Mayer Amsel (a  shareholder).  Fees for such  services,
which totaled $60,000 for the year,  ended February 28, 2002 and were settled by
the issuance of 900,000 shares of common stock.

         During the fiscal period ending February 28, 2002, the Company received
investor relation  services from BBT Consulting,  an entity owned by Mayer Amsel
(a  shareholder).  Fees for such  services,  which totaled  $20,000 for the year
ended  February  28, 2002,  were settled by the issuance of 1,000,000  shares of
common stock.

         During the fiscal period ending February 28, 2001, the Company received
investment  relation  services  from NP  Investments,  an entity owned by Howard
Salamon (a  shareholder).  Fees for such services  totaled  $38,105 for the year

                                       17

<PAGE>

ended  February 28, 2001 and were  settled by the issuance of 146,315  shares of
common stock.

         During the fiscal period ending  February 29, 2000,  the Company issued
437,500 shares to Howard Salamon (a shareholder)  for business plan  preparation
and financial and cash flow analysis.

         In December  1998,  the  Company  entered  into a four year  consulting
agreement  with Nais Corp.,  a  shareholder,  pursuant to which Nais Corp.  will
provide financial and business public relations consulting services.  Nais Corp.
claims  that it is owed US$ 239,839 as of  February  28,  2002  pursuant to this
agreement.  While the Company acknowledges the validity of the agreement and has
recorded the liability in its books of accounts,  the Company  disputes that any
funds are  currently  due under  this  agreement.  Both  parties  agree that the
Company is not  obligated to make any cash  payments to Nais Corp.  until it has
telecommunications  revenues  of $1  million.  The  dispute  centers  on whether
payments accrue until the revenue milestone is met.

         Bridgepoint  is  owned  by  Artel   Communications   Inc.,  a  minority
shareholder of the Company.  The Company paid  Bridgepoint  $8,000 per month for
consulting services and for warehousing of equipment.  This agreement terminated
in May 2000.  A new  agreement  was entered into in May 2000 whereby the Company
will only warehouse its equipment at Bridgepoint's location for a monthly fee of
$1,679.  This agreement was terminated in September  2001. The Company  believes
these charges to be a fair price.

                                     PART IV

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

(a) List of Exhibits

         None

(b) Reports on Form 8-K

         No reports were filed during the last quarter of the period  covered by
this report.

                                       18

<PAGE>


                                Mark Cohen C.P.A.
                           1772 East Trafalgar Circle
                               Hollywood, Fl 33020
                                (954) 922 - 6042
--------------------------------------------------------------------------------

                          INDEPENDENT AUDITORS' REPORT




To the Board of Directors and Stockholders of Internet VIP, Inc.

We have audited the  accompanying  consolidated  balance  sheet of Internet VIP,
Inc. as of February 28, 2002 and 2001, and the related statements of operations,
shareholders' equity (deficiency) and cash flows for the years then ended. These
financial  statements are the  responsibility of the Company's  management.  Our
responsibility  is to express an opinion on these financial  statements based on
our audits.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects, the consolidated financial position of Internet VIP, Inc.
at February 28, 2002 and 2001,  and the results of its  operations  and its cash
flows for the years then ended, in conformity with generally accepted accounting
principles.

The  accompanying  financial  statements  have been  prepared  assuming that the
Company  will  continue  as a  going  concern.  As  discussed  in  Note 8 to the
financial  statements,  the  Company  has  experienced  an  operating  loss  and
management has determined  that it will require  additional  capital to continue
funding  operations and meet its obligations as they come due. These  conditions
raise  substantial  doubt  about the  Company's  ability to  continue as a going
concern.  The  financial  statements do not include any  adjustments  that might
result from the outcome of this uncertainty.


/s/Mark Cohen
Mark Cohen C.P.A.
A Sole Proprietor Firm


Hollywood, Florida
June 11, 2002

<PAGE>

                      INTERNET VIP, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEET

<TABLE>

                                                                                          February 28,        February 28,
                                                                                              2002                2001

                                     Assets
<S>                                                                                             <C>                <C>

Current assets
     Cash and cash equivalents                                                                     $ 22            $ 27,480
     Accounts receivable, net                                                                         -             177,934
     Other receivables                                                                            8,216             176,957
     Other current assets                                                                             -               4,197

       Total current assets                                                                       8,238             386,568
Property and equipment, net                                                                      82,771             381,177
Other assets                                                                                          -              14,674

       Total assets                                                                              91,009             782,419
                                                                                          ================     ==============

                      Liabilities and Shareholders' Equity

Current Liabilities
     Accounts payable and accrued liabilities                                                   503,796           1,659,496
     Short term borrowings (principally related parties)                                         85,172             179,321
     Deferred revenue                                                                                 -             216,025
     Other current liabilities                                                                        -               9,623

       Total current liabilities                                                                588,968           2,064,465

Long Term Debt                                                                                  187,500             200,100
Other Liabilities                                                                                     -               2,735

       Total Liabilities                                                                        776,468           2,267,300

Shareholders' Equity
     Common Stock, $.0001 par value; authorized 50,000,000 shares;                                4,582               2,510
          issued and outstanding - 45,822,337 and 25,178,232 respectively
     Paid in Capital                                                                          4,094,742           2,905,921
     Deferred Compensation                                                                            -             (16,666)
     Accumulated Deficit                                                                     (4,797,385)         (4,376,646)
     Accumulated other comprehensive income                                                      12,600                   -

       Total Shareholder's Equity                                                              (685,461)         (1,484,880)

       Total liabilities and shareholder's equity                                             $ 91,009           $ 782,419
                                                                                          ================     ==============

</TABLE>

              Read the accompanying accounting notes to financial
      statements, which are an integral part of this financial statement.

<PAGE>

                      INTERNET VIP, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENT OF OPERATIONS
      FOR THE TWELVE MONTHS ENDED FEBRUARY 28, 2002 AND FEBRUARY 28, 2001

<TABLE>

                                                                                Twelve months ended
                                                                          February 28,         February 28,
                                                                          ----------------------------------------
                                                                                2002                  2001
                                                                          ------------------   -------------------
<S>                                                                               <C>                   <C>

Revenues                                                                          $ 391,013             $ 648,075

Cost of Sales                                                                       575,392               657,098
                                                                          ------------------   -------------------

Gross Profit                                                                       (184,380)               (9,023)

Operating expenses:
       Marketing                                                                    173,877               232,969
       Salaries and payroll related                                                 174,450               100,921
       Professional Fees                                                            325,746               136,510
       Travel                                                                        31,763                 2,710
       Rent                                                                           2,218                29,883
       Selling, general and administrative expenses                                 219,262                66,535
                                                                          ------------------   -------------------
          Total operating expenses                                                  927,317               569,528

          Loss before other income (expense)                                     (1,111,697)             (578,551)

Other income (expense):
       Interest income                                                                    -                     -
       Interest expense                                                             (52,206)              (59,736)
       Write down on impaired software                                              (14,375)                    -
       Loss on Abandonment of Property                                              (87,798)                    -
       Loss on Investment                                                          (249,269)                    -
       Foreign exchange gain (loss)                                                       -                    32
                                                                          ------------------   -------------------
          Total other income (expense)                                             (403,648)              (59,704)


                                                                          ------------------   -------------------
Loss from continuing operations                                                  (1,515,344)             (638,254)

Discontinued operations
  Income (loss) from operations of discontinued subsidiary                         (568,145)           (2,068,107)

  Gain on debt cancellation of bankrupt subsidiary                                1,662,750                     -

                                                                          ------------------   -------------------
Net Loss                                                                           (420,739)           (2,706,361)

Basic weighted average common shares outstanding                                 32,695,887            24,722,640
                                                                          ==================   ===================

Basic Loss per common share                                                           (0.01)                (0.11)

</TABLE>

              Read the accompanying accounting notes to financial
      statements, which are an integral part of this financial statement.

<PAGE>

                      INTERNET VIP, INC. AND SUBSIDIARIES
                 CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY

<TABLE>


                                                         Common Stock
                                                  ------------------------------  Paid-in                Deferred       Accumulated
                                                     Shares          Amount       Capital              Compensation        Deficit
                                                  ------------  ----------------------------      ------------------  --------------
<S>                                                <C>              <C>           <C>                    <C>            <C>

Balance, February 29, 2000                         23,351,027       2,335         1,790,911                     -       (1,670,285)

Issuance of common stock in a private                  20,000           2             9,998
placement ($0.50 per share)
Issuance of common stock in a private                  30,400           3            23,397
placement ($0.77 per share)
Issuance of common stock in a private                 626,500          63           626,437
placement ($1.00 per share)
Issuance of common stock in lieu of                   179,840          18            43,548
interest
Issuance of common stock for marketing                643,400          64           214,369
services
Issuance of common stock to executive                 100,000          10            99,990              (100,000)
per employment agreement
Amortization of deferred compensation                                                                      83,334
Issuance of common stock for other services           185,065          19            55,295
Issuance of common stock for conversion of             42,000           4            41,996
debt
Net loss year ended February 28, 2001                                                                                   (2,706,361)

                                                  ------------  ----------      ------------      ----------------    --------------
Balance, February 28, 2001                         25,178,232       2,510         2,905,921               (16,666)      (4,376,646)

Amortization of deferred compensation                                                                      16,666
Issuance of common stock in a private                  87,500           9            13,991
placement ($.16 per share)
Issuance of common stock in a private                 100,000          10            19,990
placement ($.20 per share)
Issuance of common stock in a private                  46,083           5             9,995
placement ($.22 per share)
Issuance of common stock in a private               1,198,882         120           142,547
placement ($.12 per share)
Issuance of common stock in a private                 600,000          60             9,940
placement ($.02 per share)
Issuance of common stock in lieu of interest          130,432          13            33,411
Issuance of common stock for other investments      2,000,000         200            24,800
Issuance of common stock for conversion of debt     8,600,000         860           400,768
Issuance of common stock for services               7,853,403         786           533,383
Net loss year ended February 28, 2002                                                                                     (420,739)
Foreign currency translation adjustment
                                                  ------------  ----------      ------------      ----------------    --------------
Balance, February 28, 2002                         45,794,532       4,582         4,094,742                     -       (4,797,385)
                                                  ============  ==========      ============      ================    ==============
</TABLE>

              Read the accompanying notes to financial statements,
             which are an integral part of this finacial statement.

<PAGE>

                      INTERNET VIP, INC. AND SUBSIDIARIES
                 CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (CONT.)

<TABLE>

                                            Accumulated
                                               other                        Total
                                            Comprehensive                Stockholders'
                                            Income (loss)                   Equity
                                           --------------              --------------
<S>                                        <C>                          <C>

Balance, February 29, 2000                                                  122,961

Issuance of common stock in a private                                        10,000
placement ($0.50 per share)
Issuance of common stock in a private                                        23,400
placement ($0.77 per share)
Issuance of common stock in a private                                       626,500
placement ($1.00 per share)
Issuance of common stock in lieu of                                          43,566
interest
Issuance of common stock for marketing                                      214,433
services
Issuance of common stock to executive                                             -
per employment agreement
Amortization of deferred compensation                                        83,334
Issuance of common stock for other services                                  55,314
Issuance of common stock for conversion of                                   42,000
debt
Net loss year ended February 28, 2001                                    (2,706,361)
                                           --------------              --------------
Balance, February 28, 2001                                               (1,484,880)

Amortization of deferred compensation                                        16,666
Issuance of common stock in a private                                        14,000
placement ($.16 per share)
Issuance of common stock in a private                                        20,000
placement ($.20 per share)
Issuance of common stock in a private                                        10,000
placement ($.22 per share)
Issuance of common stock in a private                                       142,667
placement ($.12 per share)
Issuance of common stock in a private                                        10,000
placement ($.02 per share)
Issuance of common stock in lieu of interest                                 33,424
Issuance of common stock for other investments                               25,000
Issuance of common stock for conversion of debt                             401,628
Issuance of common stock for services                                       534,169
Net loss year ended February 28, 2002                                      (420,739)
Foreign currency translation adjustment        12,600                        12,600
                                           --------------             ---------------
Balance, February 28, 2002                     12,600                      (685,461)
                                           ==============             ===============
</TABLE>

              Read the accompanying notes to financial statements,
            which are an integral part of this financial statement.

<PAGE>


                      INTERNET VIP, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENT OF CASH FLOWS
      FOR THE TWELVE MONTHS ENDED FEBRUARY 28, 2002 AND FEBRUARY 28, 2001

<TABLE>
                                                                    Twelve months ended
                                                               February 28,     February 28,
                                                               -----------------------------
                                                                   2002            2001
                                                               --------------   ------------
<S>                                                               <C>           <C>

CASH FLOWS FROM OPERATING ACTIVITIES:

Net Income (Loss)                                                 $ (420,739)   $(2,706,361)
Adjustments to reconcile net income (loss) to net cash
used in operating activities:
           Depreciation                                              114,000        128,659
           Amortization of employee stock based compensation          16,666         83,334
           Stock issued for marketing services                       154,000        214,433
           Stock issued for consulting services                       19,000         55,314
           Stoc k issued for software development                    150,000              -
           Stock issued for other services                           211,150              -
           Stock issued for interest                                  33,443         47,705
           Write down of impaired software                            14,375              -
           Loss on Abandoned property - continued operations          54,617              -
           Loss on Abandoned property - discontinued operations       69,589              -
           Loss on Investments                                       144,276              -
           Change in Comprehensive income                            (12,600)             -

Changes in Operating assets and liabilities:
           Receivables and other assets                              365,546       (365,127)
           Accounts payable and other liabilities                 (1,104,855)     1,648,705
                                                               --------------   ------------

Net cash provided by/(used in) operating activities                 (191,532)      (893,338)


CASH FLOWS FROM INVESTING ACTIVITIES:

Loss on investment                                                   (27,662)             -
Purchase of Property and equipment                                   (33,181)      (130,176)
                                                               --------------   ------------

Net cash provided by/(used in) investing activities                  (60,843)      (130,176)


CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from:
  Stockholder's capital contribution, net                            196,667        659,900
  Convertible debentures                                                   -        200,100
  Short-term borrowing, net                                           28,250        166,321
                                                               --------------   ------------

Net cash provided by/(used in) financing activities                  224,917      1,026,321
                                                               --------------   ------------


Net increase (decrease) in cash and cash equivalents                 (27,459)         2,807
Cash and cash equivalents, beginning of period                        27,480         24,673
                                                               --------------   ------------

Cash and cash equivalents, end of period                                $ 22       $ 27,480
                                                               ==============   ============


Supplemental Schedule of noncash investing and financing activities:

Common stock issued in settlement of accrued liabilities
Common stock issued for investment                                    25,000
Shares issued to extinguish short term borrowings                    122,400         42,000
Common stock issued pursuant to employment agreement                                100,000

</TABLE>

              Read the accompanying accounting notes to financial
       statement, which are an integral part of this financial statement.

<PAGE>

                               INTERNET VIP, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 1 - ORGANIZATION AND BASIS OF PRESENTATION

Internet VIP, Inc. (the "Company") was  incorporated in the State of Delaware on
November 13, 1998.  The Company was formed to sell long  distance  international
telephone services using the technology,  Voice over Internet Protocol ("VoIP").
The  Company  also  operated   through  a  wholly  owned   Canadian   subsidiary
corporation,  IVIP Telcom  Canada  Inc.,  which  dissolved  through the Canadian
bankruptcy system on or about October 25, 2001.

Internet VIP, Inc. prepares its consolidated  financial statements in accordance
with generally accepted accounting principles. This basis of accounting involves
the  application  of accrual  accounting;  consequently,  revenues and gains are
recognized  when earned,  and expenses and losses are recognized  when incurred.
Financial   statement  items  are  recorded  at  historical  cost  and  may  not
necessarily represent current values.

The accompanying  financial  statements  reflect Internet VIP, Inc. is no longer
considered to be in the development  stage.  From inception  (November 13, 1998)
through  February 28, 2001, The Company was considered to be in the  development
stage.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Management estimates:
     The  preparation  of financial  statements  in  conformity  with  generally
     accepted  accounting  principles  requires management to make estimates and
     assumptions  that affect the  reported  amounts of assets and  liabilities,
     disclosure  of  contingent  assets  and  liabilities  at  the  date  of the
     financial  statements,  and the  reported  amounts of revenues and expenses
     during the  reporting  period.  Certain  amounts  included in the financial
     statements  are  estimated  based on currently  available  information  and
     management's   judgment  as  to  the  outcome  of  future   conditions  and
     circumstances.  Changes  in the status of  certain  facts or  circumstances
     could result in material  changes to the estimates used in the  preparation
     of financial  statements and actual results could differ from the estimates
     and  assumptions.  Every  effort is made to ensure  the  integrity  of such
     estimates.

Fair value of Financial Instruments
     The  carrying  amounts  reported  in the  balance  sheet  for cash and cash
     equivalents,   receivables,   accounts  payable  and  accrued   liabilities
     approximate  their fair  values  because  of the  immediate  or  short-term
     maturity of these financial instruments.

Cash and cash equivalents:
     The  Company   considers  all  highly  liquid   investments  with  original
     maturities  of ninety  days or less to be cash and cash  equivalents.  Such
     investments are valued at quoted market prices.

Receivables:
     The Company  believes that the carrying  amount of  receivables at February
     28, 2001 approximates the fair value at such date.

Property, equipment and depreciation:
     Property and  equipment are stated at cost less  accumulated  depreciation.
     Depreciation  is computed using the straight line method over the estimated
     useful  lives as  follows  when the  property  and  equipment  is placed in
     service:

                                                   Estimate Useful Life
                                                        (In Years)

                  Office Furniture                          10
                  Computer Equipment                         3
                  Software                                   3

<PAGE>

                               INTERNET VIP, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

     Repairs  and  maintenance  are  charged  to  operations  as  incurred,  and
     expenditures  for significant  improvements  are  capitalized.  The cost of
     property  and  equipment  retired  or  sold,   together  with  the  related
     accumulated  depreciation,  are  removed  from the  appropriate  asset  and
     depreciation  accounts,  and the  resulting  gain or  loss is  included  in
     operations.


Impairment of long-lived assets:
     Long-lived  assets held and used by the Company are  reviewed  for possible
     impairment  whenever  events  or  changes  in  circumstances  indicate  the
     carrying  amount  of an asset  may not be  recoverable.  Recoverability  of
     assets to be held and used is  measured  by a  comparison  of the  carrying
     amount of the assets to the future net cash flows  expected to be generated
     by the asset. If such assets are considered to be impaired,  the impairment
     to be recognized is measured by the amount by which the carrying  amount of
     the assets exceeds the fair value of the assets. The fair value of an asset
     is the  amount  at which  the  asset  could be  bought or sold in a current
     transaction  between  willing  parties,  that is, other than in a forced or
     liquidation  sale.  Quoted  market  prices in active  markets  are the best
     evidence of fair value and shall be used as the basis for the  measurement,
     if available.  If quoted market prices are not  available,  the estimate of
     fair  value  shall  be  based  on the  best  information  available  in the
     circumstances. The estimate of fair value shall consider prices for similar
     assets and the results of valuation  techniques to the extent  available in
     the  circumstances.  Valuation  techniques  include  the  present  value of
     estimated  expected  future cash flows using a discount  rate  commensurate
     with  the  risk  involved,   option-pricing   models,  matrix  pricing  and
     fundamental analysis.

Revenue Recognition:
     The  company  sources of  revenues  are in the form of sales  from  prepaid
     calling cards, dedicated line rentals, sales from telephone line usage on a
     time basis.  Revenues from prepaid  calling cards are  recognized  when the
     calling  cards are used,  any unused time is considered  deferred  revenue.
     Revenues from line rentals are recognized over the contractual  life of the
     line rental  agreement.  Revenues from sales from  telephone line usage are
     recognized when the line is used.

     In December 1999, the  Securities  and Exchange  Commission  ("SEC") issued
     Staff Accounting Bulletin No. 101 ("SAB 101"), "Revenue Recognition," which
     provides  guidance  on the  recognition,  presentation  and  disclosure  of
     revenue in  financial  statements  filed with the SEC. SAB 101 outlines the
     basic criteria that must be met to recognize  revenue and provide  guidance
     for  disclosures  related  to  revenue  recognition  policies.   Management
     believes that Internet VIP,  Inc.'s  revenue  recognition  practices are in
     conformity with the guidelines of SAB 101.

Earnings (Loss) per share calculation:
     Earnings  (Loss) per common share are  calculated  under the  provisions of
     SFAS No.  128,  "Earnings  per  Share,"  which  establishes  standards  for
     computing  and  presenting  earnings  per share.  SFAS No. 128 requires the
     Company to report both basic earnings  (loss) per share,  which is based on
     the weighted-average number of common shares outstanding during the period,
     and   diluted   earnings   (loss)  per   share,   which  is  based  on  the
     weighted-average  number of common  shares  outstanding  plus all potential
     dilutive common shares outstanding. Options and warrants are not considered
     in calculating  diluted  earnings (loss) per share since  considering  such
     items would have an anti-dilutive effect.

Stock based compensation:
     In October 1995, the Financial  Accounting Standards Board issued Statement
     of  Financial  Accounting  Standards  ("SFAS")  No.  123,  "Accounting  for
     Stock-Based   Compensation".   The   Company   accounts   for  stock  based
     compensation  granted to non employees in accordance with SFAS No. 123. The
     Company  has  determined  that it will  continue  to account  for  employee
     stock-based compensation under Accounting Principles Board No. 25 and elect
     the disclosure-only alternative under SFAS No. 123.

<PAGE>

                               INTERNET VIP, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Recent Accounting Pronouncements:
     The  Statement  of  Financial  Accounting  Standards  Board (SFAS) No. 141,
     "Business  Combinations," was issued by the Financial  Accounting Standards
     Board  (FASB)  in July  2001.  This  Statement  establishes  standards  for
     accounting and reporting for business combinations. This statement requires
     the purchase method of accounting to be used for all business combinations,
     and prohibits the pooling-of-interests method of accounting. This Statement
     is effective for all business  combinations  initiated  after June 30, 2001
     and  supercedes  APB Opinion  No. 16,  "Business  Combinations"  as well as
     Financial  Accounting  Standards  Board  Statement of Financial  Accounting
     Standards No. 38, "Accounting for Preacquisition Contingencies of Purchased
     Enterprises."  The adoption of this statement by the Company did not have a
     material impact on its financial condition or results of operations.

     The  Statement  of  Financial  Accounting  Standards  Board (SFAS) No. 142,
     "Goodwill  and  Other  Intangible  Assets,"  was  issued  by the  Financial
     Accounting  Standards Board (FASB) in July 2001.  This Statement  addresses
     how  intangible  assets that are acquired  individually  or with a group of
     other assets  should be accounted  for in financial  statements  upon their
     acquisitiion.  This statement  requires goodwill  amortization to cease and
     for goodwill to be periodically  reviewed for impairment,  for fiscal years
     beginning  after October 31, 2001.  SFAS No. 142 supercedes APB Opinion No.
     17,  "Intangible  Assets." The Company does not expect the adoption of this
     statement to have a material  impact on its financial  condition or results
     of operations.

     The  Statement  of  Financial  Accounting  Standards  Board (SFAS) No. 143,
     "Accounting for Asset  Retirement  Obligation," was issued by the Financial
     Accounting  Standards  Board (FASB) in August  2001.  This  Statement  will
     require companies to record a liability for asset retirement obligations in
     the  period  in which  they are  incurred,  which  typically  could be upon
     completion  or shortly  thereafter.  The FASB decided to limit the scope to
     legal  obligation  and the liability  will be recorded at fair value.  This
     Statement is effective for fiscal years  beginning after June 15, 2002. The
     Company does not expect the  adoption of this  statement to have a material
     impact on its financial condition or results of operations.

     The  Statement  of  Financial  Accounting  Standards  Board (SFAS) No. 144,
     "Accounting  for the  Impairment  or Disposal of  Long-Lived  Assets,"  was
     issued by the Financial  Accounting Standards Board (FASB) in October 2001.
     This Statement  provides a single accounting model for long-lived assets to
     be disposed of and replaces SFAS No. 121  "Accounting for the Impairment of
     Long-Lived  Assets and Long-Lived Assets to Be Disposed Of." This Statement
     is  effective  for fiscal years  beginning  after  December  15, 2001.  The
     Company is evaluating the effect of the adoption of this statement.

NOTE 3 - PROPERTY AND EQUIPMENT

     Property and equipment, net consists of the following:

                                     February 28,               February 28,
                                        2002                        2001
                                   ----------------         ------------------

Office Furniture  .   .   .        $    -                    $    4,505
Equipment .   .   .   .   .          244,804                    403,312
Software .   .   .   .   .              -                       102,019
                                   ----------------         ------------------

                                     244,804                    509,836
Less:  Accumulated depreciation      162,033                    128,659
                                   ----------------         ------------------
                                   $  82,771                 $  381,177

In December  2001,  the Company  closed its office in Montreal,  Canada.  Office
furniture and some computer  equipment in that office was  abandoned.  A loss of
$605 was  recognized on the  abandonment  of office  furniture  which is the net
amount of original  cost of $4,505 less $3,900 of  accumulated  depreciation.  A
loss of $87,193 was recognized on the abandonment of equipment.

<PAGE>

                               INTERNET VIP, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 3 - PROPERTY AND EQUIPMENT (CONTINUED)

At February 28, 2002,  net  capitalized  software  costs of $14,375 were written
down to zero. The Company wrote down this amount based on a  determination  that
the capitalized  software costs were impaired.  This  determination was based on
projected  future  cash flows of zero since the  Company's  revenue  has sharply
declined and no contracts with clients.

NOTE 4 - SHORT TERM BORROWINGS

The Company has received loans from an affiliated  company (an entity owned by a
shareholder).  These  loans  bear 10%  interest  per  annum  on the  outstanding
balance. At February 28, 2002 the balance due, including interest was $32,471.

On February 1, 2000,  the Company  entered into a $30,000 loan  agreement with a
nonaffiliated  party for an initial period of six months which has been extended
indefinitely.  The loan bears interest of 5% per month, payable in cash or 6,000
common shares of the Company,  at the Company's option.  The loan is convertible
at any time,  at the lender's  option,  in whole or in part, to common shares of
the  Company at a  conversion  rate of $0.25 per  share.  The  interest  expense
resulting  from  the  beneficial  conversion  feature  has been  charged  to the
statement  of  operations  for the  years  ended  February  28,  2002 and  2001.
Substantially all of the Company's assets are pledged to guarantee the repayment
of the loan. The balance of the loan at February 28, 2002 was $30,000.

On March 14, 2000,  the Company  entered into a $25,000  loan  agreement  with a
nonaffiliated  party  for an  initial  period  of three  months  which  has been
extended indefinitely. The loan bears interest of 15% per annum, payable in cash
or common shares of the Company,  at the Company's  option, at a conversion rate
of 1 share for $0.0625 of interest.  The loan is convertible at any time, at the
lender's  option,  in whole or in part,  to common  shares of the  Company  at a
conversion  rate of $0.25 per share.  The interest  expense  resulting  from the
beneficial  conversion  feature has been charged to the  statement of operations
for the year ended February 28, 2002 and 2001 Substantially all of the Company's
assets are pledged to guarantee  the  repayment of the loan.  The balance of the
loan at February 28, 2002 was $20,000.

On June 15, 2000, the Company entered into an agreement to borrow up to $150,000
from a nonaffiliated party. The repayment of the total amount borrowed is due on
February 28, 2001 which has been extended indefinitely.  The loan bears interest
of 10% per annum,  payable in common shares of the Company at a conversion  rate
of 20 shares per $1,000 of the average  monthly  outstanding  loan balance.  The
interest  expense  resulting  from the  beneficial  conversion  feature has been
charged to the statement of operations  for the year ended February 28, 2002 and
2001.  Substantially  all of the  Company's  assets are pledged to guarantee the
repayment  of the loan.  In  November  2001,  the  outstanding  loan  balance of
$102,400 was settled with the issuance of 5 million shares of common stock.

NOTE 5 - CONVERTIBLE DEBENTURE

On September 22, 2000 the Company entered into a convertible debenture agreement
with a  nonaffiliated  party.  The  amount of the  debenture  was  $300,000  CAD
($200,100  USD).  The debenture  bears  interest of 10% per annum and expires on
September 30, 2002.  The  debenture can be converted , at the  discretion of the
holder, at any time up to the expiring date into common shares of the Company at
a rate of 1 share per $1.00 USD of the balance outstanding.

<PAGE>

                               INTERNET VIP, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 6  - LOSS ON INVESTMENT

In June 2001,  the Company  issued 2 million  shares in  exchange  for 1 million
shares of InterCaribe Telecom, Inc., a Canadian company. InterCaribe Telecom was
marketing communication services in the Caribbean. The transaction was valued at
$25,000 USD. The Company also advanced an additional  $27,662 USD to InterCaribe
Telecom  since June 2001. At February 28, 2002 the Company  determined  that the
investment  in  InterCaribe  Telecom  had  been  impaired,   due  to  fact  that
InterCaribe  had no  operations  and  appeared  not to  have  plans  for  future
operations. The entire amount of $52,662 USD has been written off.

The Company has advanced monies in the amount of $196,607 to their joint venture
in Moscow,  Russia.  At  February  28,  2002,  the Company  determined  that the
investment  in the joint  venture in Moscow had been  impaired  based on limited
potential  of future  cash flows and no  contracts  with  clients,  deeming  the
advances uncollectible.  The entire amount of $196,607 has been written off as a
loss.

NOTE 7 - COMMITMENTS AND CONTINGENCIES

In December 1998 the Company entered into a 4 year consulting agreement with the
Nais  Corp.,  a  shareholder,  according  to which Nais Corp.  will  provide the
Company with  financial  and business  public  relation  consulting  services in
consideration  for  $6,000  USD  per  month.  In  accordance  to the  agreement,
commitment  will start when the Company  reaches  certain  amounts of revenue as
defined  in the  agreement.  Nais  Corp.  claims  that it is owed  approximately
$240,000 USD at February 28, 2002. Prior management believed that this claim had
no merit  based on the  limited  revenue  generation  not  meeting  the  minimum
requirements  of the agreement.  Mr. Jack Ehrenhaus,  managing  director of Nais
Corp.  is also the current  president  of Internet  VIP,  Inc.,  and believes at
February  28,  2002 the claim has merit.  The  financial  statements  reflect an
accrued liability of approximately $240,000 as consulting expense.

NOTE 8 - GOING CONCERN

The accompanying  financial  statements have been prepared  assuming the Company
will continue as a going  concern.  The Company  reported net losses of $420,739
and  $2,706,361  for the twelve months ended  February 28, 2002 and February 28,
2001. As reported on the statement of cash flows, the Company incurred  negative
cash flows from operating  activities of $191,532 and $893,338 for twelve months
February 28, 2002 and February  29,  2001.  To date,  these losses and cash flow
deficiencies  have been  financed  principally  through the sale of common stock
($1,891,439).  Additional  capital and/or  borrowings will be necessary in order
for the  Company  to  continue  in  existence  until  attaining  and  sustaining
profitable  operations.  The Company is aggressively pursuing a merger agreement
which will bring a cash infusion,  restructuring  and forward  looking  business
plan.

NOTE 9 - INCOME TAXES

The Company did not provide any current or deferred United States federal, state
or foreign income tax provision or benefit for the period  presented  because it
has experienced  operating  losses since  inception.  The Company has provided a
full valuation allowance on the deferred tax asset,  consisting primarily of net
operating   loss   carryforwards,   because   of   uncertainty   regarding   its
realizability.

<PAGE>

                               INTERNET VIP, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 10 - RELATED PARTIES

In September  2001, the Company issued  1,100,000  shares of common stock to its
President,  Vice President and an administrative person in settlement of accrued
unpaid wages in the amount of $156,735.24.

In  September  2001,  the Company  issued  500,000  shares of common  stock to a
shareholder for settlement of accrued liabilities totaling $27,500 USD.

In February  2002, the Company  issued  1,500,000  shares of common stock to its
President and Vice President in settlement of accrued unpaid wages in the amount
of $45,996 and loans to the Company in the amount of $20,000.

The Company received investment relations services from an affiliated company (a
shareholder).  Fees for such services which totaled  $44,000 and $38,105 for the
years ending February 28, 2002 and 2001 respectively.

NOTE 11 - SHAREHOLDER'S EQUITY

The Company  issued  87,500  shares of common stock in a private  placement  for
$14,000.

The Company  issued  100,000  shares of common stock in a private  placement for
$20,000.

The Company  issued  46,083  shares of common stock in a private  placement  for
$$10,000.

The Company issued 1,198,882  shares of common stock in a private  placement for
$142,667.

The Company  issued  600,000  shares of common stock in a private  placement for
$10,000.

The Company  issued  130,432  shares of common stock in  settlement  of interest
expense in the amount of $33,424.

The Company  issued 2 million  shares of common  stock in exchange for 1 million
shares of InterCaribe Telecom, Inc., a Canadian company. InterCaribe Telecom was
marketing communication services in the Caribbean. The transaction was valued at
$25,000 USD.

The Company  issued  8,600,000  shares of common stock in settlement of debt and
accrued liabilities totaling $401,628.

The  Company  issued  7,853,403  shares of common  stock for  services  rendered
totaling $534,169.

NOTE 12 - SUBSEQUENT EVENTS

Pursuant to a Acquisition of Assets and Change of Control  Agreement dated April
11, 2002 (the "Agreement"), between Internet VIP, Inc. (the Company) and NewTech
Group International,  Inc. of Blainville,  Quebec,  Canada,  (NewTech) it is the
intention of the Company to  re-organize  the  capitalization  of the Company by
reverse  splitting  the common stock in a ratio of one new share for each twenty
of the current  shares.  The Company  will also amend its  corporate  charter to
change its name to NewTech Brake Corp.

Prior to closing the Agreement,  the Company will effectively  reverse split its
common shares in a ratio of twenty (20) to one (1). The current business,  which
would  include the assets,  liabilities  (except  for  outstanding  debts not to
exceed  $200,000)  and current  operations,  will be spun-off to a newly  formed
wholly-owned  subsidiary  of the  Company  ("Newco").  At  that  time,  existing
shareholder's  of the Company will be issued all of the equity (shares) of Newco
as part of a tax-free reorganization.

<PAGE>

                               INTERNET VIP, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 13 - SUBSEQUENT EVENTS (CONTINUED)

At closing, NewTech will transfer all of their interests in certain patents, and
rights of  certain  automotive  technologies  specifically  related to the brake
system in heavy vehicle  markets (the "Newtech  Interests")  to the Company.  In
consideration for its receipt of all of the Newtech Interests,  the Company will
issue to Newtech,  approximately  45 million  common shares which will equate to
approximately  95%  of  the  then-outstanding  Common  Shares  of  the  Company,
calculated on a fully-diluted basis.

The Closing of these transactions, which will take place after NewTech completes
its due diligence which is anticipated to occur on or before July 1, 2002.

After the closing,  Newco,  the spun-off  entity,  expects to retain its current
management and continue its present telecom operations at their current business
location.

<PAGE>


                                   SIGNATURES

Pursuant to the  requirements of Section 13 or 15(d) of the Securities  Exchange
Act of 1934, the Registrant caused this  registration  Statement to be signed on
its behalf by the undersigned, thereunto duly authorized.

/s/Yvon Rancourt                  Chairman              Date: June 11, 2002
------------------------
Yvon Rancourt

/s/Claude Rancourt                Director, Secretary   Date: June 11, 2002
------------------------
Claude Rancourt

/s/Denis Gamache                  Director/Interim CEO  Date:  June 11, 2002
------------------------
Denis Gamache

/s/Marc-Antoine Gratton           Director              Date:  June 11, 2002
------------------------
Marc-Antoine Gratton