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

                                   FORM 10-KSB

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

                      For the Year Ended December 31, 2002

                        Commission File Number 000-32199


                           TUGBOAT INTERNATIONAL, INC.
                 (Name of Small Business Issuer in Its Charter)


                DELAWARE                                         95-4735256
     (State or Other Jurisdiction of                          (I.R.S. Employer
      Incorporation or Organization)                         Identification No.)


     1445 MARPOLE AVENUE, SUITE 409
          VANCOUVER, BC CANADA                                     V6H 1S5
(Address of principal Executive Offices)                         (Zip Code)


                                 (604) 733-5055
                          (Issuer's Telephone Number)

Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act of 1934 during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Yes [X] No [ ]

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

The issuer had no revenues for the year ended December 31, 2002.

As of December 31, 2002, the registrant had 5,544,000 shares of common stock,
$.0001 par value, issued and outstanding. No market value has been computed
based upon the fact that no market has been established at this time.
<PAGE>
                               TABLE OF CONTENTS

PART I.......................................................................  1
ITEM 1.  BUSINESS............................................................  1
ITEM 2.  PROPERTIES..........................................................  6
ITEM 3.  LEGAL PROCEEDINGS...................................................  6
ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS...............  6

PART II......................................................................  6
ITEM 5.  MARKET FOR REGISTRANTS COMMON EQUITY AND RELATED
         STOCKHOLDER MATTERS.................................................  6
ITEM 6.  SELECTED FINANCIAL DATA.............................................  7
ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
         AND RESULTS OF OPERATIONS...........................................  8
ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.........................  9
ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS AND
         FINANCIAL DISCLOSURE................................................ 16

PART III..................................................................... 17
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.................. 17
ITEM 11. EXECUTIVE COMPENSATION.............................................. 19
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT...... 19
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS ..................... 19

PART IV...................................................................... 19
ITEM 14. EXHIBITS AND REPORTS ON FORM 8-K.................................... 19
SIGNATURES................................................................... 20
<PAGE>
                                     PART I

ITEM 1 - BUSINESS GENERAL

Tugboat International, Inc. was incorporated in the State of Delaware on July
20, 1998. Tugboat International's business plan is to become actively engaged in
the business of buying, selling, trading and auctioning collectible and valuable
coins via an Internet web site. Tugboat International has never had any
bankruptcy, receivership, or similar proceedings. Tugboat International has
never had any material reclassification, merger, consolidation or purchase of
sale of a significant amount of assets in the ordinary course of business.

The Business Plan for the Company over the next twelve months is to design and
implement a web site to buy, sell, trade and auction collectible and valuable
coins, initially conducting monthly auctions then later expanding to premium
auctions. The Company is actively seeking to establish relationships with
selected coin dealers and experts in the coin collectible markets who possess
the expertise, integrity and capacity to provide the Company with high-end coin
collectibles for auction on a regular basis. The Company will enter into
contractual arrangements with these suppliers that require them to supply the
Company a minimum dollar value of collectible coins during each contract period.
The Company is also seeking coin collectibles that it can acquire for resale in
the monthly auctions. By acquiring inventories of collectible coins this will
provide greater control over the quality and value of the coin collectibles the
Company can make available for sale on the web-site. The Company anticipates
that 90% of its initial business will be contracted through coin dealers and 10%
will be in maintaining inventories for resale. During the initial 12-month
period of business, the Company intends to publicize and attract people to its
proposed web site through Internet advertising and print advertisements placed
in weekly and monthly trade publications targeted at coin collectors.

In addition, the Company plans to integrate partner coin companies which buy,
sell, trade and auction collectible and valuable coins into a collaborative
network by developing long term relationships with and among them. The Company
will utilize and develop collective resources within the partner coin companies
to actively buy, sell, trade and auction collectible and valuable coins and
currency. The Company will generate income from the sale of its inventory of
collectible coins by setting up an Internet web site and receive revenues from
its trades, classifieds and planned auctions in the form of agent commissions
from buyers and sellers. The Company intends to conduct auctions in a variety of
formats that allow coin collectors to choose the format with which they are most
comfortable. Most of the collectible coins to be sold at the Company's auctions
will be obtained on consignment from third parties or supplied to the Company by
selected dealers who possess the expertise, integrity and the capacity to
provide the Company with high-end coin collectibles for auction on a regular
basis. Other coins to be sold at our auctions will be derived from collectibles
that have been acquired by us for resale. Acquiring inventories of collectible
coins will provide us with greater control over the quality and value of the
collectibles we can make available for sale at our auctions and enables us to
take advantage of opportunities to purchase highly sought after collectible
coins at favorable pricing. To avoid conflicts of interest, the Company only
will acquire collectible coins that have been previously graded or
authenticated, and such collectibles are sold without being re-graded by the

                                       1
<PAGE>
Company. Maintaining inventories of coin collectibles, however, presents
valuation risks because of potential fluctuations in their market prices. The
Company will strive to mitigate the market risk of its inventory through
frequent turnover. The Company anticipates the average inventory turnover,
excluding rare coins, is fewer than 120 days. The Company intends to utilize the
services of Professional Coin Grading Service or PCGS to provide an
authentication and grading service which will give collectors and dealers the
confidence to buy and sell high-end coins without physical inspection (commonly
referred to as sight-unseen) through Internet auctions. In order to proceed
further with our business plan, the Company will need to raise capital.

GOVERNMENTAL REGULATIONS

The Company is unaware of the need for governmental approval for its proposed
business plan. The Company is not currently subject to direct federal, state or
local regulation, and laws or regulations applicable to access to or commerce on
the Internet, other than regulations applicable to businesses generally.
However, due to the increasing popularity and use of the Internet and other
online services, it is possible that a number of laws and regulations may be
adopted with respect to the Internet or other online services covering issues
such as user privacy, freedom of expression, pricing, content and quality of
products and services, taxation, advertising, intellectual property rights and
information security. The Company is currently not aware of any federal, state
or local laws and regulations regulating the Internet at this time which would
materially affect its proposed business activities. The Company is unaware of
any environmental laws (federal, state, or local) that will have an effect on
its proposed business.

RESEARCH AND DEVELOPMENT

The Company has spent no money over the past two years on research and
development. Currently, the Company has no employees excluding the current
officer and director.

EMPLOYEES

Currently, the company's only employees are it's directors, Christos Papadimas
and J Michael Page. They anticipate devoting, at most, 20 hours per month to the
affairs of the company. This is only an estimation and may be increased or
decreased depending on unforeseen factors. Though no commercial conflicts are
anticipated between the current employers of the officer, directors, and the
Company no assurance can be given that this will continue.

RISK FACTORS

The Company is in the development stage and the market it intends to compete
within is well established. There are several competitors within the marketplace
that have significantly greater financial and management resources than the
Company. The following section describes some of the risk factors specific to
the Company. Individuals should carefully consider the following risk factors,
in addition to the other information presented in this registration statement,
when evaluating the Company's business plan. Any of the following risks could
seriously harm the business and/or prevent the furtherance of the business.

                                       2
<PAGE>
A. NO OPERATING HISTORY TO EVALUATE

The Company was incorporated under the laws of the State of Delaware on July 20,
1998. The Company's activities to date have been to prepare the Company's
business strategy, and to date has not generated revenue. The Company has a
limited operating history and must be considered in the early development stages
of embarking upon a new venture. We are among many companies that have entered
into the collectible and valuable coin business. Our business and prospects must
be considered in light of the risk, expense, and difficulties frequently
encountered by companies in an early stage of development. Prospective investors
should be aware of the difficulties encountered by such new enterprises, as the
Company faces all the risks inherent in any new business, including:
competition, the absence both of an operating history and profitability and the
need for additional working capital. The likelihood of the success of the
Company must be considered in light of the problems and expenses that are
frequently encountered in connection with the operation of a new business and
the competitive environment in which the Company will be operating.

B. NEED FOR ADDITIONAL WORKING CAPITAL - CONTINUATION OF GOING CONCERN NOT
   ASSURED.

As of December 31, 2002, the Company had working capital of $59 and faces the
need for substantial additional working capital in the near future. The capital
needs of the Company are greater than currently anticipated, and the Company
will be required to seek other sources of financing. No assurance can be given
that the Company will be able to organize debt or equity financing, or that if
available, it will be available on terms and conditions satisfactory to
management and might dilute current shareholders. The Company has prepared
audited financial statements as of December 31, 2002, reporting that the Company
is in the development stage and its ability to establish itself as a going
concern is dependent upon the Company obtaining sufficient financing to continue
its development activities. There is no assurance that the Company will achieve
profitable operations in the future. The Company could be required to secure
additional financing to implement further development plans. There is no
assurance that such financing will be available to the Company, or if available,
will be available on terms and conditions satisfactory to management.

C. NO HISTORY OF OPERATIONS AND EXPECT OPERATING LOSSES IN THE FORESEEABLE
   FUTURE.

The Company expects to incur operating losses for the foreseeable future and if
we ever have operating profits, we may not be able to sustain them. Expenses
will increase as we build an infrastructure to implement our business model. For
example, we expect to hire additional employees and lease more space as need
arises. In addition, we plan to significantly increase our operating expenses
and expenses may also increase due to the potential effect of goodwill
amortization and other charges resulting from future partnerships and/or
alliances, if any. If any of these and other expenses are not accompanied by
increased revenue, our operating losses will be even greater than we anticipate.

                                       3
<PAGE>
D. PROGRESS AND OVERALL SUCCESS OF THE COMPANY IS SUBSTANTIALLY DEPENDENT UPON
   THE ABILITIES OF THE CURRENT OFFICER AND DIRECTORS OF THE COMPANY.

The Company's performance and operating results are substantially dependent on
the continued service and performance of its officer and directors. The Company
intends to hire additional sales and other personnel as they move forward with
their business model, though competition for such personnel is intense. There
can be no assurance that the Company can retain key employees, or to attract or
retain highly qualified managerial personnel in the future. The loss of the
services of the Company's key employees or the inability to attract and retain
the necessary sales and other personnel, would likely limit the chances for
success and have a negative effect upon the Company's business, financial
condition, operating results and cash flows. In addition, the concentrated
ownership the sole officer has over the company, which will not be significantly
affected and may have a material adverse effect on future business progress.

E. COMPETITION

The Company will operate in a highly competitive environment. The Company
competes with larger and established coin companies. Our competitors have
greater financial, marketing, and distribution resources. Our success will be
dependent on our ability to compete with these and any other competitors on the
quality of our products and services. There is no assurance that we will be
successful in that competition.

F. LACK OF CASH DIVIDENDS

The Company has not paid any cash dividends on its Common Shares to date and
there are no plans for paying cash dividends in the foreseeable future. Initial
earnings that the company may realize, if any, will be retained to finance the
growth of the Company. Any future dividends, of which there can be no assurance,
will be directly dependent upon earnings of the Company, its financial
requirements and other factors.

G. CAPITAL RESOURCE REQUIREMENTS.

The Company plans to develop its web site for Internet sales. Expenses needed to
build an infrastructure to implement our business model will depend upon a
number of factors including the Company's ability to raise sufficient capital.
There are no assurances that the Company can raise sufficient capital through
debt or equity financing which might be available to the Company on favorable
terms or at all and might dilute current shareholders.

H. GROWTH AND ACQUISITION MAY STRAIN THE MANAGEMENT, OPERATION AND FINANCIAL
   RESOURCES

There can be no assurances that the proposed business model will be adequate to
support any future operations. In addition, there is a risk that the company may
not be able to expand their operations at the same rate as market demand may be
created. If appropriate opportunities present themselves, the Company intends to

                                       4
<PAGE>
seek out business opportunities to expand their coin business. The process of
integrating and acquiring any business may result in operating difficulties and
expenditures, which cannot be anticipated and may absorb significant management
attention that would otherwise be available for further development of their
existing business. Moreover, the anticipated benefits of any acquisition may be
realized. Any future acquisition of other businesses, technologies, services or
products might require the Company to obtain additional equity or debt financing
which might not be available to the Company on favorable terms or at all and
might dilute current shareholders. Additionally, the Company may not be able to
successfully identify, negotiate or finance future acquisitions or to integrate
acquisitions with the current proposed business.

I. OTHER NON PUBLIC SALES OF SECURITIES

As part of the Company's plan to raise additional working capital, the Company
may make a limited number of offers and sales of its Common Shares to qualified
investors in transactions that are exempt from registration under the 1933 Act.
There can be no assurance the Company will not make other offers of its
securities at different prices, when, in the Company's discretion, such prices
are deemed by the Company to be reasonable under the circumstances.

J. NO ASSURANCE OF LIQUIDITY

There is currently no public market for the Common Shares or any other
securities of the Company and there can be no assurance that a trading market
will develop in the future.

K. LOSS OF KEY PERSONNEL COULD ADVERSELY AFFECT PROPOSED OPERATIONS.

Our performance is greatly dependent on the performance of our sole officer. The
loss of the services of our executive officer could harm our business. The loss
of our executive officer could have a negative impact on our reputation for
expertise in the Internet coin collectible industry. Additionally as the company
operations get underway, we must identify, attract, hire, train, retain and
motivate other highly skilled managerial, marketing and customer service
personnel. Competition for highly skilled managerial, marketing and customer
service personnel is intense. We may not be able to successfully attract,
integrate or retain sufficiently qualified personnel, which failure could harm
our business.

L. LARGELY CONTROLLED BY MANAGEMENT

Our sole officer currently owns or controls a substantial majority of our
outstanding common stock and thereby continues to be able to exercise voting
control over the Company for the foreseeable future and will be able to elect
the entire Board of Directors. This management control could prevent, or make
more difficult, on-going business.

                                       5
<PAGE>
ITEM 2 - PROPERTIES

The Company's principal executive office address is 1445 Marpole Avenue, Suite
409, Vancouver, BC Canada V6H 1S5. The principal executive office and telephone
number are provided by J. Michael Page, a director of the corporation.
Management considers the Company's current principal office space arrangement
adequate until such time as the Company achieves its business plan goal of
raising capital and then begins hiring new employees per its business plan.

ITEM 3 - LEGAL PROCEEDINGS

The Company knows of no litigation pending, threatened or contemplated, or
unsatisfied judgments against it, or any proceedings in which the Company is a
party. The Company knows of no legal actions pending or threatened or judgment
against any officer or director of the Company in his capacity as such.

ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS

No matters were submitted to a vote of security holders during the year ended
December 31, 2002.

                                    PART II

ITEM 5 - MARKET FOR REGISTRANTS COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
         MARKET PRICE

There is no trading market for the Company's Common Stock at the present time
and there has been no trading market to date. There is no assurance that a
trading market will ever develop or, if such a market does develop, that it will
continue. If and when the Company's securities are traded, the securities may
likely be deemed a "penny stock". The Securities and Exchange Commission had
adopted Rule 15g-9 which establishes the definition of a "penny stock," for
purposes relevant to the Company, as any equity security that has a market price
of less than $5.00 per share or with an exercise price of less than $5.00 per
share, subject to certain exceptions. For any transaction involving a penny
stock, unless exempt, the rules require: (i) that a broker or dealer approve a
person's account for transactions in penny stocks and (ii) the broker or dealer
receive from the investor a written agreement to the transaction, setting forth
the identity and quantity of the penny stock to be purchased. In order to
approve a person's account for transactions in penny stocks, the broker or
dealer must: (i) obtain financial information and investment experience and
objectives of the person and (ii) make a reasonable determination that the
transactions in penny stocks are suitable for that person and that person has
sufficient knowledge and experience in financial matters to be capable of
evaluating the risks of transactions in penny stocks. The broker or dealer must
also deliver, prior to any transaction in a penny stock, a disclosure schedule
prepared by the Commission relating to the penny stock market, which, in
highlight form, (i) sets forth the basis on which the broker or dealer made the

                                       6
<PAGE>
suitability determination and (ii) that the broker or dealer received a signed,
written agreement from the investor prior to the transaction. Disclosure also
has to be made about the risks of investing in penny stocks in both public
offerings and in secondary trading, and about commissions payable to both the
broker-dealer and the registered representative, current quotations for the
securities and the rights and remedies available to an investor in cases of
fraud in penny stock transactions. Finally, monthly statements have to be sent
disclosing recent price information for the penny stock held in the account and
information on the limited market in penny stocks. The Company plans to have its
securities traded in the over-the-counter ("OTC") market. The OTC market differs
from national and regional stock exchanges in that it (1) is not cited in a
single location but operates through communication of bids, offers and
confirmations between broker-dealers and (2) securities admitted to quotation
are offered by one or more broker-dealers rather than the "specialist" common to
stock exchanges. The Company may apply for listing on the NASD OTC Bulletin
Board or may offer its securities in what are commonly referred to as the "pink
sheets" of the National Quotation Bureau. No assurance can be given by the
Company that any of the above events will occur.

DIVIDENDS

The Company has not paid any cash dividends on its Common Shares to date and
there are no plans for paying cash dividends in the foreseeable future. Initial
earnings that the Company may realize, if any, will be retained to finance the
growth of the Company. Any future dividends, of which there can be no assurance,
will be directly dependent upon earnings of the Company, its financial
requirements and other factors.

ITEM 6 - SELECTED FINANCIAL DATA

As of December 31, 2002, the Company had working capital of $59 and faces the
need for substantial additional working capital in the near future. The Company
will be required to seek sources of financing. No assurance can be given that
the Company will have other financing available, if required; or if available,
will be available on terms and conditions satisfactory to management. As part of
the Company's plan to raise additional working capital, the Company may make a
limited number of offers and sales of its Common Shares to qualified investors
in transactions that are exempt from registration under the 1933 Act. Other
offers and sales of Common Shares may be at prices per share that are higher or
lower than the price of the Common Shares in this registration statement. There
can be no assurance that company will not make other offers of its securities at
different prices, when, in the company's discretion, such prices are deemed by
the Company to be reasonable under the circumstances. The selected financial
data set forth above should be read in conjunction with "Management's Discussion
and Analysis of Financial Condition and Results of Operations" and the financial
statements and notes thereto.

                                       7
<PAGE>
ITEM 7 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS

The following Management's Discussion and Analysis of Operations contains
forward-looking statements that involve risks and uncertainties, including those
referring to the period of time the Company's existing capital resources will
meet the Company's future capital needs, the Company's future operating results,
the market acceptance of the services of the Company, the Company's efforts to
establish and the development of new services. The Company's actual results
could differ materially from those anticipated in these forward-looking
statements as a result of certain factors. The following should be read in
conjunction with our audited Consolidated Financial Statements included within.

LIQUIDITY AND CAPITAL RESOURCES OF THE COMPANY

The Company has not generated revenues from its operating activities. The
Company does not anticipate any material increase in operating expenses until
such time as additional capital can be raised and the Company proceeds with the
further development of its business plan. Management believes that the Company
must be successful in raising equity or debt financing sufficient to meet its
working capital requirements and to support the expenses associated with
developing visual media content within the next several months. There can be no
assurance that the terms negotiated by the Company will be acceptable to
potential partner companies and if favorable agreements cannot be made, it would
have a material adverse impact on the Company.

PLAN OF OPERATIONS

During the previous fiscal year, the Company has been in the design phase for
it's web site for the buying, selling, trading and auctioning collectible and
valuable coins on the Internet. The Company plans to integrate partner coin
companies which buy, sell, trade and auction collectible and valuable coins into
a collaborative network by developing long term relationships with and among
them. Thus far, no contractual arrangements have been made.

COMPARISON OF FISCAL YEAR 2001 WITH FISCAL YEAR 2000

Revenues for fiscal year 2002 were $0 compared with $0 in 2001. General and
Administrative Expenses were $3,893 in 2002 and $15,366 in 2001. The Company
does not consider this a material change. Net loss in 2002 $3,893 as against
$14,666 in 2001. The Company does not consider this a material change. The
Company had Total Assets of $535 at December 31, 2002 as compared to $1,943 at
December 31, 2001. This decrease was due to loss on operations. The Company
faces the need for substantial additional working capital in the near future.
The Company will be required to seek sources of financing. No assurance can be
given that the Company will have other financing available, if required; or if
available, will be available on terms and conditions satisfactory to management.
The Company has prepared audited financial statements as of December 31, 2002.
The Company's ability to establish itself as a going concern is dependent upon
the Company obtaining sufficient financing to continue its development
activities. There is no assurance that the Company will achieve profitable
operations in the future. The Company could be required to secure additional
financing to implement further development plans. There is no assurance that
such financing will be available to the Company, or if available, will be
available on terms and conditions satisfactory to management. As part of the
Company's plan to raise additional working capital, the Company may make a
limited number of offers and sales of its Common Shares to qualified investors
in transactions that are exempt from registration under the 1933 Act. Other
offers and sales of Common Shares may be at prices per share that are higher or
lower than the price of the Common Shares in this registration statement. There
can be no assurance the Company will not make other offers of its securities at
different prices, when, in the Company's discretion, such prices are deemed by
the Company to be reasonable under the circumstances.

                                       8
<PAGE>
ITEM 8 - FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

                                ARMANDO C. IBARRA
                          CERTIFIED PUBLIC ACCOUNTANTS
                          (A Professional Corporation)


Armando C. Ibarra, C.P.A.                   Members of the California Society of
Armando Ibarra, Jr., C.P.A.                 Certified Public Accountants


                          INDEPENDENT AUDITORS' REPORT

To the Board of Directors of
Tugboat International, Inc.
(A Development Stage Company)

We have audited the accompanying balance sheets of Tugboat  International,  Inc.
as of  December  31,  2002 and 2001 and the related  statements  of  operations,
changes in stockholders'  equity 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 audit.

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

In our opinion, the consolidated  financial statements referred to above present
fairly,   in  all  material   respects,   the  financial   position  of  Tugboat
International,  Inc. as of December 31, 2002 and 2001,  and the results of their
operations  and their cash flows for the years  then  ended in  conformity  with
accounting principles generally accepted in the United States of America.



/s/ Armando C. Ibarra
----------------------------
Armando C. Ibarra, CPA-APC

February 20, 2003
Chula Vista, California

                                       9
<PAGE>
                           TUGBOAT INTERNATIONAL, INC.
                          (A Development Stage Company)
                                 Balance Sheets
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                Year Ended       Year Ended
                                                                December 31,     December 31,
                                                                   2002             2001
                                                                 --------         --------
<S>                                                              <C>              <C>
                                     ASSETS
CURRENT ASSETS
  Cash                                                           $     59         $  1,467
                                                                 --------         --------

TOTAL CURRENT ASSETS                                                   59            1,467

OTHER ASSETS
  Organization costs                                                  476              476
                                                                 --------         --------

TOTAL OTHER ASSETS                                                    476              476
                                                                 --------         --------

      TOTAL ASSETS                                               $    535         $  1,943
                                                                 ========         ========

                       LIABILITIES & STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
  Accounts payable                                               $  2,485         $     --
                                                                 --------         --------

TOTAL CURRENT LIABILITIES                                           2,485               --
                                                                 --------         --------

      TOTAL LIABILITIES                                             2,485               --

STOCKHOLDERS' EQUITY
  Preferred stock, ($.0001 par value, 20,000,000
   shares authorized; none issued and outstanding.)                    --               --
  Common stock, ($.0001 par value, 80,000,000
   shares authorized; 5,544,000 shares issued and
   outstanding.)                                                      554              554
  Additional paid-in capital                                       29,896           29,896
  Deficit accumulated during development stage                    (32,400)         (28,507)
                                                                 --------         --------

TOTAL STOCKHOLDERS' EQUITY                                         (1,950)           1,943
                                                                 --------         --------

      TOTAL LIABILITIES & STOCKHOLDERS' EQUITY                   $    535         $  1,943
                                                                 ========         ========
</TABLE>
                       See Notes to Financial Statements

                                       10
<PAGE>
                           TUGBOAT INTERNATIONAL, INC.
                          (A Development Stage Company)
                            Statements of Operations
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                                      July 20, 1998
                                                                                       (inception)
                                               Year Ended          Year Ended            through
                                               December 31,        December 31,        December 31,
                                                  2002                2001                2002
                                               -----------         -----------         -----------
<S>                                            <C>                 <C>                 <C>
REVENUES
  Revenues                                     $        --         $        --         $        --
                                               -----------         -----------         -----------

TOTAL REVENUES                                          --                  --                  --

GENERAL & ADMINISTRATIVE EXPENSES                    3,893              15,366              33,100
                                               -----------         -----------         -----------

TOTAL GENERAL & ADMINISTRATIVE EXPENSES              3,893              15,366              33,100

OTHER INCOME & (EXPENSES)
  Other income                                          --                 700                 700
                                               -----------         -----------         -----------

TOTAL OTHER INCOME & (EXPENSES)                         --                 700                 700
                                               -----------         -----------         -----------

NET INCOME (LOSS)                              $    (3,893)        $   (14,666)        $   (32,400)
                                               ===========         ===========         ===========

BASIC EARNINGS (LOSS) PER SHARE                $     (0.00)        $     (0.00)
                                               ===========         ===========
WEIGHTED AVERAGE NUMBER OF
 COMMON SHARES OUTSTANDING                       5,544,000           5,201,192
                                               ===========         ===========
</TABLE>
                       See Notes to Financial Statements

                                       11
<PAGE>
                           TUGBOAT INTERNATIONAL, INC.
                          (A Development Stage Company)
                  Statement of Changes in Stockholders' Equity
            From July 20, 1998 (inception) through December 31, 2002
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                                               Deficit
                                                                                             Accumulated
                                                       Common     Additional    Stock          During
                                          Common       Stock       Paid-in    Subscription   Development
                                          Stock        Amount      Capital     Receivable       Stage        Total
                                          -----        ------      -------     ----------       -----        -----
<S>                                      <C>          <C>          <C>          <C>           <C>          <C>
Stock issued for cash on July 20,
1998 @ $0.0001 per share                 5,000,000    $    500     $   500      $     --      $     --     $  1,000

Net income, July 20, 1998 (inception)
through December 31, 1998                                                                           --           --
                                        ----------    --------     -------      --------      --------     --------
BALANCE, DECEMBER 31, 1998               5,000,000         500         500            --            --        1,000
                                        ==========    ========     =======      ========      ========     ========
Stock issued for cash on March 20,
1999 @  $0.0001 per share                  169,000          17      16,883                                   16,900

Net loss, December 31, 1999                                                                     (2,633)      (2,633)
                                        ----------    --------     -------      --------      --------     --------
BALANCE, DECEMBER 31, 1999               5,169,000         517      17,383            --        (2,633)      15,267
                                        ==========    ========     =======      ========      ========     ========
Stock issued for cash on November 15,
2000 @ $0.0002 per share                   250,000          25          25           (50)                        --

Net loss, December 31, 2000                                                                    (11,208)     (11,208)
                                        ----------    --------     -------      --------      --------     --------
BALANCE, DECEMBER 31, 2000               5,419,000         542      17,408           (50)      (13,841)       4,059
                                        ==========    ========     =======      ========      ========     ========

Stock subscription receivable                                                         50                         50

Stock issued for cash on May 14,
2001 @ $0.10 per share                      62,500           6       6,244                                    6,250

Stock issued for cash on May 18,
2001 @ $0.10 per share                      62,500           6       6,244                                    6,250

Net loss, December 31, 2001                                                                    (14,666)     (14,666)
                                        ----------    --------     -------      --------      --------     --------
BALANCE, DECEMBER 31, 2001               5,544,000         554      29,896            --       (28,507)       1,943
                                        ==========    ========     =======      ========      ========     ========
Net loss, December 31, 2002                                                                     (3,893)      (3,893)
                                        ----------    --------     -------      --------      --------     --------

BALANCE, DECEMBER 31, 2002               5,544,000    $    554     $29,896      $     --      $(32,400)    $ (1,950)
                                        ==========    ========     =======      ========      ========     ========
</TABLE>
                       See Notes to Financial Statements

                                       12
<PAGE>
                           TUGBOAT INTERNATIONAL, INC.
                          (A Development Stage Company)
                            Statements of Cash Flows
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                                                July 20, 1998
                                                                                                 (inception)
                                                               Year Ended      Year Ended          through
                                                               December 31,    December 31,      December 31,
                                                                  2002            2001              2002
                                                                --------         --------         --------
<S>                                                             <C>              <C>              <C>
CASH FLOWS FROM OPERATING ACTIVITIES
  Net income (loss)                                             $ (3,893)        $(14,666)        $(32,400)
  (Increase) decrease in incorporation costs                          --               --             (476)
  Increase (decrease) in accounts payable                          2,485             (700)           2,485
                                                                --------         --------         --------

     NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES          (1,408)         (15,366)         (30,391)


CASH FLOWS FROM INVESTING ACTIVITIES

     NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES              --               --               --

CASH FLOWS FROM FINANCING ACTIVITIES
  Common stock                                                        --               12              554
  Additional paid-in capital                                          --           12,488           29,896
  Subscription receivable                                             --               50               --
                                                                --------         --------         --------

     NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES              --           12,550           30,450
                                                                --------         --------         --------

NET INCREASE (DECREASE) IN CASH                                   (1,408)          (2,816)              59

CASH AT BEGINNING OF YEAR                                          1,467            4,283               --
                                                                --------         --------         --------

CASH AT END OF YEAR                                             $     59         $  1,467         $     59
                                                                ========         ========         ========
</TABLE>
                       See Notes to Financial Statements

                                       13
<PAGE>
                           Tugboat International, Inc.
                          (A Development Stage Company)
                          Notes to Financial Statements
                             As of December 31, 2002


NOTE 1. ORGANIZATION AND DESCRIPTION OF BUSINESS

Tugboat  International,  Inc was  incorporated in the State of Delaware,  United
States of America on July 20, 1998, under the Delaware Revised Statutes, Chapter
78, Private Companies.

The  Company  is in the  development  stage.  Its  activities  to date have been
limited  to  capital  formation,  organization,  and  acquisition  of  goods  on
consignment and website construction.

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

A. BASIS OF ACCOUNTING

The Company's  financial  statements  are prepared  using the accrual  method of
accounting. The Company has elected a December 31, year end.

B. BASIC EARNINGS PER SHARE

In February  1997,  the FASB issued SFAS No. 128,  "Earnings  Per Share",  which
specifies the computation, presentation and disclosure requirements for earnings
(loss) per share for entities  with  publicly  held common  stock.  SFAS No. 128
supersedes the provisions of APB No. 15, and requires the  presentation of basic
earnings (loss) per share and diluted earnings (loss) per share. The Company has
adopted the provisions of SFAS No. 128 effective July 20, 1998 (inception).

Basic net loss per share  amounts is computed  by  dividing  the net loss by the
weighted average number of common shares outstanding. Diluted earnings per share
are the same as basic  earnings  per share due to the lack of dilutive  items in
the Company.

C. CASH EQUIVALENTS

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

D. INCOME TAXES

Income taxes are provided in accordance  with Statement of Financial  Accounting
Standards No. 109 (SFAS 109),  Accounting for Income Taxes. A deferred tax asset
or liability is recorded for all temporary differences between financial and tax
reporting and net operating loss  carryforwards.  Deferred tax expense (benefit)
results  from  the net  change  during  the  year of  deferred  tax  assets  and
liabilities.

                                       14
<PAGE>
                           Tugboat International, Inc.
                          (A Development Stage Company)
                          Notes to Financial Statements
                             As of December 31, 2002


NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

D. INCOME TAXES (CONTINUED)

Deferred tax assets are reduced by a valuation allowance when, in the opinion of
management,  it is more likely than not that some portion of all of the deferred
tax assets will be realized.  Deferred tax assets and  liabilities  are adjusted
for the effects of changes in tax laws and rates on the date of enactment.

NOTE 3. WARRANTS AND OPTIONS

There are no warrants or options outstanding to acquire any additional shares of
common or preferred stock.

NOTE 4. GOING CONCERN

The  Company's  financial  statements  are  prepared  using  generally  accepted
accounting  principles  applicable to a going concern,  which  contemplates  the
realization  of assets and  liquidation  of  liabilities in the normal course of
business.  However,  the  Company  has no  current  source of  revenue.  Without
realization  of  additional  capital,  it would be  unlikely  for the Company to
continue as a going concern.  It is management's plan to seek additional capital
through sale of its securities through private placements.

NOTE 5. RELATED PARTY TRANSACTION

The Company  neither owns nor leases any real or personal  property.  A director
provides  office  services  without  charge.  Such costs are  immaterial  to the
financial  statements  and  accordingly,  have not been reflected  therein.  The
officers and directors of the Company are involved in other business  activities
and may, in the future, become involved in other business  opportunities as they
become  available,  such  persons may face a conflict in  selecting  between the
Company and their other  business  interests.  The Company has not  formulated a
policy for the resolution of such conflicts.

                                       15
<PAGE>
                           Tugboat International, Inc.
                          (A Development Stage Company)
                          Notes to Financial Statements
                             As of December 31, 2002


NOTE 6. INCOME TAXES


                                                         As of December 31, 2002
                                                         -----------------------
     Deferred tax assets:
     Net operating tax carryforwards                            $ 4,860
     Other                                                            0
                                                                -------
     Gross deferred tax assets                                    4,860
     Valuation allowance                                         (4,860)
                                                                -------

     Net deferred tax assets                                    $     0
                                                                =======

Realization of deferred tax assets is dependent upon  sufficient  future taxable
income during the period that deductible temporary differences and carryforwards
are expected to be available to reduce  taxable  income.  As the  achievement of
required  future taxable income is uncertain,  the Company  recorded a valuation
allowance.

NOTE 7. SCHEDULE OF NET OPERATING LOSSES


          1999 Net Operating Loss                               $ (2,633)
          2000 Net Operating Loss                                (11,208)
          2001 Net Operating Loss                                (14,666)
          2002 Net Operating Loss                                 (3,893)
                                                                --------
          Net Operating Loss                                    $(32,400)
                                                                ========

As of December 31, 2002,  the Company has net operating  loss  carryforwards  of
approximately  $ 32,400.  Net operating loss  carryforward  expires twenty years
from the date the loss was incurred.

ITEM 9 - CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS AND FINANCIAL DISCLOSURE

None.

                                       16
<PAGE>
                                    PART III

ITEM 10 - DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The following information sets forth certain information concerning the
Executive Officers and Directors of the Company as of December 31, 2002.

     Name               Age         Position                   Term of Office
     ----               ---         --------                   --------------
Christos Papadimas      27      Pres/Sec/Treas/Dir         Until annual meeting
J. Michael Page         58      Dir                        of the Stockholders

There are no other persons nominated or chosen to become Directors or Executive
Officers, nor do we have any employees other than the above. There is no
arrangement or understanding between any of our Directors or Officers pursuant
to which they were elected to his office. The removal of a Director from the
Board can be succeeded only by the following actions: (1) majority vote of the
existing Directors; or (2) majority vote of the shareholders of record.

RESUME

Christos Papadimas - Director, President and Secretary & Treasurer.

Since 1998, Mr. Papadimas has served as President, Secretary and Director of
Tugboat International, Inc. Within the past year, Mr. Papadimas has moved to his
native Greece and has spent the last year in the restaurant and hospitality
business. The previous three years he spent his time as a broker and wholesaler
of automobiles. From 1992-1996, Mr. Papadimas was involved in the restaurant and
hospitality business. He majored in Economics at the University of Simon Fraser,
Burnaby, British Columbia, Canada.

J. Michael Page - Director.

Mr. Page has vast experience in managing and developing business and business
activities in a wide array of industries. Mr. Page has experience in Management,
Marketing and Product/Business Development in emerging developing companies. Mr.
Page, a business management consultant, currently serves as a Director of the
Company since May 2000. From 1998 to 2000, he served as a Director of Cortez
Development, ltd. From 1996 to 1999, he served as President and Director of
Galveston Oil & Gas, Inc. From 1987 to 1996, Mr. Page served as an executive
with Equus Technologies, Ltd., computer software company which trades on the
CDNX Exchange.

The Company presently expects to conduct its annual meeting of shareholders and
directors in July 2003, at which time directors will again be elected. All
directors serve for a period of one year, unless removed in accordance with our
By-Laws.

                                       17
<PAGE>
POTENTIAL CONFLICTS OF INTEREST

The Company's officer and directors are currently involved in other business
activities. Consequently, there are potential inherent conflicts of interest in
acting as an officer or director of the Company. Insofar as the officer/director
is engaged in other activities, management anticipates that it will devote only
a minor amount of time to the Company's affairs. The Company does not have a
right of first refusal pertaining to opportunities that come to management's
attention insofar as such opportunities may relate to the Company's proposed
business operations. A conflict may arise in the event that another company with
which management is affiliated is formed and actively seeks business similar to
that of the Company's business plan. As Mr. Papadimas and Mr. Page are engaged
in other business activities, demands may be placed on their time which will
detract from the amount of time they are able to devote to the Company. Mr.
Papadimas and Mr. Page intend to devote as much time to the activities of the
Company as required. However, should such a conflict arise, there is no
assurance that they would not attend to other matters prior to those of the
Company. Mr. Papadimas and Mr. Page project that initially, approximately twenty
hours per month of their time will be spent on the related business activities
of the Company. However, there are no assurances that twenty hours per month
will be spent.

ITEM 11 - EXECUTIVE COMPENSATION

The Officer of the Company has received no compensation, including no bonus or
incentive plans - stock, cash, or otherwise. The Company plans to begin
compensating the officer only at such time the Company is generating sufficient
revenues. Presently, the Company has not established any dates or other
requirements for the officer to begin receiving compensation. If, and when, the
time is deemed appropriate for the officer to receive compensation, the matter
will be brought before the Board of Directors to vote.

COMPENSATION OF DIRECTORS

During the most recently completed financial year ended December 31, 2002, there
was no compensation paid, by the Company to its directors, for services as a
director. There is no standard arrangements for any such compensation to be paid
other than reimbursement for expenses incurred in connection with their services
as director, although the Company from time to time may grant options to acquire
Common Shares for directors. As at the date hereof the Company has no
outstanding options to the directors that have been granted for their service.

                                       18
<PAGE>
ITEM 12 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth certain information concerning the Common Stock
ownership as of December 31, 2002 of each officer, director and who is known to
the Company as management or to be the beneficial owner of more than five
percent of the Company's Common Stock. As of December 31, 2002, there were
5,544,000 common shares outstanding.

Beneficial Ownership of Shares

        Name                             Number         Percent*      Security
        ----                             ------         --------      --------
Christos Papadimas                      5,000,000         90%          Common
President, Secretary and Director

J. Michael Page                           250,000          1%          Common
Director

Officers and Directors as a Group       5,250,000         91%          Common

Mr. Papadimas and Mr. Page are the direct owners as described above. Unless
otherwise indicated, the named party is believed to be the sole investor and
have voting control of the shares set forth in the above table.

ITEM 13 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

On July 20, 1998, the Company issued 5,000,000 common shares at $.0002 per share
to Mr. Papadimas, a director and the sole officer of the Company in
consideration for $1,000.

On November 15, 2000, the Company issued 250,000 common shares at $.0002 per
share to Mr. Page, a director of the Company in consideration for $50.

                                    PART IV

ITEM 14 - EXHIBITS AND REPORTS ON FORM 8-K

         Exhibit 23.1   Consent of independent auditor
         Exhibit 99.1   Certification of Chief Executive Officer
         Exhibit 99.2   Certification of Chief Financial Officer

                                       19
<PAGE>
                                   SIGNATURES

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


TUGBOAT INTERNATIONAL, INC.

By: /s/ Christos Papadimas
   -----------------------------
   Christos Papadimas
   Director and President                               Dated: March 3, 2003

                                       20
<PAGE>
                        ANNUAL CERTIFICATION PURSUANT TO
                  SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Christos Papadimas, certify that:

1. I have reviewed this annual report on Form 10KSB of Tugboat International,
Inc.;

2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this annual
report;

3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this annual report;

4. As the registrant's certifying officer, I am responsible for establishing and
maintaining disclosure controls and procedures (as defined in Exchange Act Rules
13a-14 and 15d-14) for the registrant and have:

     a.   designed such disclosure controls and procedures to ensure that
          material information relating to the registrant, including its
          consolidated subsidiaries, is made known to me by others within those
          entities, particularly during the period in which this annual report
          is being prepared;

     b.   evaluated the effectiveness of the registrant's disclosure controls
          and procedures as of a date within 90 days prior to the filing date of
          this annual report (the "Evaluation Date"); and

     c.   presented in this annual report the conclusions about the
          effectiveness of the disclosure controls and procedures based on the
          evaluation as of the Evaluation Date;

5. As the registrant's certifying officer, I have disclosed, based on the most
recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent
functions):

     a.   all significant deficiencies in the design or operation of internal
          controls which could adversely affect the registrant's ability to
          record, process, summarize and report financial data and have
          identified for the registrant's auditors any material weaknesses in
          internal controls; and

     b.   any fraud, whether or not material, that involves management or other
          employees who have a significant role in the registrant's internal
          controls; and

6. As the registrant's certifying officer, I have indicated in this annual
report whether or not there were significant changes in internal controls or in
other factors that could significantly affect internal controls subsequent to
the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.

IN WITNESS WHEREOF, the undersigned has executed this certification as of the
28th day of February 2003.


/s/ Christos Papadimas
-----------------------------
Chief Executive Officer

                                       21
<PAGE>
                        ANNUAL CERTIFICATION PURSUANT TO
                  SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Christos Papadimas, certify that:

1. I have reviewed this annual report on Form 10-KSB of Tugboat International,
Inc.;

2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this annual
report;

3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this annual report;

4. As the registrant's certifying officer, I am responsible for establishing and
maintaining disclosure controls and procedures (as defined in Exchange Act Rules
13a-14 and 15d-14) for the registrant and have:

     a.   designed such disclosure controls and procedures to ensure that
          material information relating to the registrant, including its
          consolidated subsidiaries, is made known to me by others within those
          entities, particularly during the period in which this annual report
          is being prepared;

     b.   evaluated the effectiveness of the registrant's disclosure controls
          and procedures as of a date within 90 days prior to the filing date of
          this annual report (the "Evaluation Date"); and

     c.   presented in this annual report the conclusions about the
          effectiveness of the disclosure controls and procedures based on the
          evaluation as of the Evaluation Date;

5. As the registrant's certifying officer, I have disclosed, based on the most
recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent
functions):

     a.   all significant deficiencies in the design or operation of internal
          controls which could adversely affect the registrant's ability to
          record, process, summarize and report financial data and have
          identified for the registrant's auditors any material weaknesses in
          internal controls; and

     b.   any fraud, whether or not material, that involves management or other
          employees who have a significant role in the registrant's internal
          controls; and

6. As the registrant's certifying officer, I have indicated in this annual
report whether or not there were significant changes in internal controls or in
other factors that could significantly affect internal controls subsequent to
the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.

IN WITNESS WHEREOF, the undersigned has executed this certification as of the
28th day of February 2003.


/s/ Christos Papadimas
--------------------------
Chief Financial Officer

                                       22