UNITED STATES SECURITIES EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-KSB

[X]      ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OR (G) OF THE SECURITIES
         EXCHANGE ACT OF 1934

  For fiscal year ended September 30, 2001          Commission File No. 0-30801

[ ]      TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934 [NO FEE REQUIRED]

                 For the transition period from ______ to ______


                               MIAD Systems, Ltd.
              ----------------------------------------------------
                 (Name of small business issuer in its charter)

         Canada                                                  N/A
      -------------                                          ------------
(State or other jurisdiction                              (I.R.S. Employer of
incorporation or organization)                             Identification No.)

                43 Riviera Drive, Unit 6
                Markham, Ontario, Canada                    L3R 5J6
                ----------------------------------------   --------
               (Address of principal executive offices)   (Zip Code)

                    Issuer's telephone number (905) 479-0214
                                              --------------

Securities registered under Section 12(b) of the Exchange Act:             None
Securities registered under Section 12(g) of the Exchange Act:

                          Common Stock, $.001 par value
                          -----------------------------
                                (Title of Class)

Check whether the issuer (1) filed all reports required to be filed by Sections
13 or 15(d) of the Exchange 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 [ ]


<PAGE>

Check if 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. [ ]

    Issuer's revenues for its most recent fiscal year: $8,085,766 (Canadian).

         The aggregate market value of the voting common stock held by
non-affiliates of the Registrant as of September 30, 2001: Not Determinable




                                       2
<PAGE>


ITEM 1. DESCRIPTION OF BUSINESS

(a)      Business Development

         Our company, MIAD Systems Ltd., is a Canadian company. We were formed
in March 1993 and began operating our business at that same time. Our management
has been substantially the same since we began business. We are located in the
Toronto, Ontario, Canada area and we are an established full-line supplier of
business computer systems, maintenance, installation and networking services. We
provide these goods and services to our major clients who are primarily engaged
in the corporate, institutional and education fields.

         On July 10, 2001 we filed a Form 10-SB registration statement with the
Securities and Exchange Commission ("SEC") which became effective on September
8, 2001. Since such time, we have become subject to the reporting requirements
of the Securities Exchange Act of 1934.

(b)      Business of the Company

         Principal Products and Services and their Markets
         -------------------------------------------------

         MIAD Product Strategy
         ---------------------

         MIAD's product strategy consists of combining, in Canada, the disparate
strategies adopted by the major computer system vendors in the United States for
sales to the large corporate and institutional markets. MIAD does not sell to
individuals. It only sells to corporate and institutional clients typically as
part of their computer networks.

         MIAD offers its customers both custom assembled and mass produced
systems. Mass produced systems which have predetermined features are sold to
customers through MIAD as an authorized reseller of the manufacturer (also known
as a "business partner" or "solutions partner" in the industry). Custom assembly
systems with features ordered by the customer are assembled by MIAD and sold by
MIAD directly to the customer. MIAD does not engage in any manufacturing.

         MIAD's material revenue streams are comprised of the following:

         1)       Reselling of major brands. MIAD has formed strategic
                  partnerships with the major systems vendors such as IBM,
                  Compaq, Toshiba and Hewlett-Packard by becoming
                  qualified/authorized to resell their pre-configured products
                  to MIAD's existing and prospective customers.

         2)       MIAD custom assembly. For clients who require a custom
                  configured system with their choice of features and
                  peripherals, MIAD has the

                                        3

<PAGE>


                  capabilities and, has been selling and assembling the MIAD
                  ULTRA (R) system to meet these unique requirements. MIAD does
                  not use refurbished or used products in its ULTRA (R) system
                  or any of its other products. MIAD assembles its custom
                  systems using components obtained from outside sources.

         MIAD Services Strategy
         ----------------------

         In addition to servicing its ULTRA (R) system, MIAD has been
continuously upgrading the skills of its technical staff in order to qualify as
an authorized service provider to provide maintenance and related services for
the systems and equipment it sells as an authorized reseller. Currently, its
service business generates less than 4% of its total revenues.

         MIAD Sales Strategy
         -------------------

         MIAD has hired experienced computer industry veterans who can, early in
a sales cycle, understand and review the business application that the prospect
is attempting to solve through automation. The MIAD representative, based on
experience, can recommend the appropriate product (whether from IBM, Compaq,
MIAD, etc.) and the appropriate model/features, as well as the services of
installation/maintenance-depot or on-site that are best suited to meet the
customer's requirements.

         As industry trends change in Canada (as they do in the US), MIAD's
product recommendations for product mix also changes. In fiscal 1998, MIAD's
revenues from the ULTRA(R) line accounted for more than 60% of its total
revenue. In 1999, it accounted for 45% of total revenue and in the 2000 fiscal
year it accounted for 25% of total revenue. In the 2001 fiscal year it accounted
for 12% of total revenue. This trend is partially due to the fact that the
pricing differential between the major brands (IBM, Compaq, etc.) and the custom
vendors (Dell and Gateway), which had been significant, is narrowing at a very
rapid rate. This was especially true in 2001 due to the recession and dramatic
decline in demand for computer systems.

         Because MIAD has the capabilities and appropriate authorizations from
major vendors to act as a reseller of their products, it can offer customers a
choice between major brand and custom. MIAD can provide the best product
solution as industry, market and economic trends change. MIAD continues to
expand the availability of services that it can provide its customers
(maintenance on-site and depot, installation, etc.) for more and more vendors as
well as new service offerings such as the Ingram technical training and e-
commerce consulting that became available in 2001.

         The technical and application courses are offered on a nationwide basis
in Canada by Ingram Micro to purchasers of products and services. These
purchasers include those who have purchased products and services through MIAD
as an authorized Ingram Micro reseller

                                        4

<PAGE>



in Canada. MIAD also resells web-based consulting services primarily to
educational institutions and mid-size businesses which do not typically have the
resources to implement a presence on the worldwide web. These web-based services
generally assist these customers in developing a web site and in electronic
transaction processing.

         We do not sell products to individual end-users. Our customers are
primarily corporate and institutional and include many well-known companies as
well as private schools and community colleges in Ontario. All of these clients
purchase from us on an "as needed" basis and although they have made volume
purchases in the past, there are no current at will or long-term commitments
with them.

(c)      Industry and Market Overview

         In 1999, the Canadian Gross Domestic Product (GDP) increased at a 4.1%
rate with the Information Technology ("IT") industry contributing 17.8% of the
GDP growth. The U.S. Department of Commerce states that the U.S. and Canada rank
the highest in the world with 37% of their respective populations having access
to the electronic economy via the Internet.

         The Canadian IT industry is key to the economic health of Canada,
enabling business to be more efficient and effective and helping consumers reap
the benefits of the on-going advances in communications and computing. No other
force has, in recent years, influenced the future of Canada's economy as
information technology according to "Industry Canada", a report published by the
Canada Department of Industry. Canadian IT revenue continues to grow at 6% per
annum and employment at 10% per annum. Canada, in general, is one of the world
leaders in technology development and technology implementation as reported in
Industry Canada.

         MIAD acts as a solutions partner for our clients by working with them
to analyze and then provide to them, either directly or through independent
outside corporations which have very specific technical expertise, the goods and
services that they need to compete effectively in the marketplace. Our clients
require that we understand their business, their marketplace and what drives
their decisions. MIAD works with clients to review their business requirements,
understand technology and recommend the solutions which are best suited to their
needs. Our team members have extensive industry and technology knowledge and
expertise. Additionally, we work with selected computer companies to provide the
best solutions for our clients.

         In January 2001, MIAD was awarded the Year 2000 Sales Excellence Award
by Ingram Micro Canada, Inc., Canada's largest computer distributor firm. The
award recognized MIAD as the top 3Com reseller at Ingram Micro Canada among its
33,000 resellers in Canada.


                                        5

<PAGE>



         We have successfully implemented our "just-in-time" purchasing and
"build-to- order" model for our private label MIAD ULTRA(R) line of business
computers. This concept is based on the successful model originated by Dell and
Gateway in the United States. We believe that the significant market penetration
by Dell and Gateway in the U.S. is an indicator of the market potential for our
"build-to-order" model in Canada.

          In addition, in order to supply the quality business solutions
required by our clients, we have added, to our "build-to-order" model, the
qualifications for:

         o        partnering and authorized reselling of Compaq,
                  Hewlett-Packard, Toshiba and IBM systems for clients who
                  require higher-end servers

         o        networking design and installation

         o        national warranty exchange program

         o        on-site warranty and maintenance repair for the MIAD ULTRA(R)
                  line, as an authorized Compaq Service Center and as an
                  authorized IBM Service Center.

         We expect that our growth will be generated by additional sales to
existing and new clients in the normal course of our business and possibly by
acquisitions of companies in our same industry. This growth through additional
sales to existing clients is frequently referred to as "organic growth". We
expect our organic growth to be accomplished in two ways:

         1)       continued top-level service to existing clients in order to be
                  uniquely positioned for their on-going systems and services
                  acquisitions, and

         2)       intensify penetration in the four specific major market
                  segments where we already have a presence which include major
                  corporate accounts, institutional, POS for restaurant and
                  hospitality industry and educational.

         We intend to continue to build our presence as a supplier of IT
solutions in Canada as an authorized reseller of products purchased from our
major vendors for resale to end users and by the custom assembly of our computer
systems. In doing so, we expect to focus on several priorities:

         1)       growing revenue from the existing customer base;

         2)       enlarging our customer base in Ontario;

         3)       developing an implementation plan to expand our presence in
                  other Canadian cities and possibly the U.S. market;

         4)       increasing the number of sales personnel;

         5)       continuing to enhance the quality of our technology
                  operations;

         6)       developing additional partnerships in the high-end data
                  communications marketplace;

         7)       bolster our financial resources.


                                        6

<PAGE>



(d)      "Build-to-Order" Model --- The MIAD ULTRA(R)line

         We have distinguished ourselves from other "build-to-order" companies
such as Dell and Gateway because we are also an approved reseller of brand name
vendors. In addition, we employ our "just-in-time" purchasing and
"build-to-order" model of private label personal computers, the MIAD ULTRA(R)
line, to satisfy the custom requirements of our customer base. We carry a
minimal amount of finished goods but no raw materials inventory. Instead, we
acquire our component parts specifically for our customer orders. We are
authorized by IBM pursuant to a licensing agreement, to use IBM's licensed
patents in assembling MIAD personal computer systems and servers. MIAD does not
use IBM components in its custom assembled systems. MIAD does not have
agreements with but does select and purchase components for use in these systems
from a list of qualified suppliers in the industry. These include, but are not
limited to, processors from Intel, memory from Toshiba, Hitachi, Siemens, hard
disk drives from Fujitsu, CD ROM drives from Acer and Mitsumi, floppy disk
drives from Panasonic and Mitsumi and CPU boards from ASUS and Acer.

    Our custom manufacturing approach allows our customers to choose from a wide
range of options to be custom assembled by MIAD. These may include options for
memory size, processor type and speed, cache memory, video cards, network
interface, communication speeds, video memory and disk storage among others.
These options are coupled with increased reliability, quality control and a
rapid delivery cycle. In fiscal 2001, our MIAD ULTRA(R) line represented 12% of
our total annual revenues.

         Our ability to rapidly deliver a MIAD ULTRA(R) custom system allows us
to keep inventory levels at a minimum due to our "just in time" purchasing while
still being able to deliver the systems exactly to the customer's specifications
with a delivery time, including "burn-in" of three days or less. Our technical
and manufacturing expertise permits us to give our customers better service, not
only on our own products but those of our authorized partners.

         The seven major steps involved in the "build-to-order" process include:

         1)       Customization which involves a technical review of the request
                  confirming that all critical information is available,
                  component availability and a proper instruction set for the
                  technician to build the system.

         2)       Logistics which involves procurement of system components and
                  peripheral devices tailored for the order and arranging for
                  its timely delivery.

         3)       Unpacking of all the parts of a system delivered by suppliers
                  which are then prepared for building the system.


                                        7

<PAGE>



         4)       Assembly and System Check requires following the specific
                  instruction code and a quality check of the system. The system
                  is then fitted with any additional hardware or software
                  requested by the customer and a final quality check is
                  performed for the whole product.

         5)       Final Check requires that all systems pass a strict
                  quality-check and "burn-in" procedure before shipment.

         6)       Packaging in its original box occurs after the assembly is
                  completed and the testing process and the system pass
                  inspection.

         7)       Shipment occurs after the assembled systems are weighed .


         Customer Advantages
         -------------------

         The "build-to-order" model for our MIAD ULTRA(R) line of systems
provides extensive advantages to clients in cost savings, quality control,
flexible configuration and fast response to industry trends. The main features
of the "build-to-order" model include:

                  o        Reduction of Delivery Cycle
                           ---------------------------
                           By its nature, our manufacturing approach permits
                  flexibility of customization combined with very short delivery
                  cycles. We are able to customize systems to clients' needs
                  with our "just-in-time" purchasing and "build-to-order"
                  approach.

                  o        Cost Savings
                           -------------
                           Working with suppliers to provide "just-in-time"
                  delivery of components reduces overhead costs of warehousing
                  large quantities of components. This overhead cost reduction
                  is enhanced by fast inventory turnover. Costs are further
                  reduced by having the ability to quickly respond to industry
                  trends, thus avoiding obsolete inventory as technologies
                  change. These cost reductions are reflected in our pricing to
                  our clients.

                  o        Ability to Manage Technology Change
                           -----------------------------------
                           Purchasing components, on an "as needed" basis allows
                  us to better react to the constant change in technology and
                  price.

                  o        Increased Reliability and Quality
                           ---------------------------------
                           Quality control of our MIAD ULTRA(R) line is one of
                  the major reasons that users select the system. After
                  assembling the client's unique configuration, we subject the
                  system to extensive "burn-in" and system testing. Since most
                  failures occur in the first 24- 48 hours of use, this testing
                  attempts to make the system fail before shipping to the
                  client. This leads to better service and fewer repairs.

                                        8

<PAGE>



                  o        Better Serviceability
                           ---------------------
                           We choose our components with great care. After-sale
                  serviceability is taken into account and given great weight.
                  This concern facilitates not only warranty repair but also
                  provides for better customer support which contributes to
                  customer satisfaction and repeat business.

         We strive for quality and consistency in our MIAD ULTRA(R) line of
computers. We use only name brand quality components. As part of our quality
control program, we work in concert with our suppliers to provide consistency of
components. Whether a client orders ten systems or 300 systems, components will
be the same.

(f)      Reselling

         We are an established supplier of computer systems from vendors for
which we act as resellers. We also provide maintenance, installation and
networking services to our major clients in the corporate, institutional and
education fields. In order to become approved and authorized to become a
reseller of a name brand system such as Compaq, IBM, or Toshiba, among others,
the vendor will qualify the proposed reseller on factors such as current sales
volume, number of sales personnel, geographical territory, other authorizations
and references. The approved authorization typically requires that a reseller
only sell to end users of the product, take responsibility for pre- and
post-sale support (which includes responding to technical and software issues
and offering training and web consulting services) and commit not to engage in
activities contrary to law. The authorization does not include maintenance which
is a separate authorization and typically consists of providing repair services
either under or out of warranty. There are no other material limitations in the
reseller authorizations. If approved as a reseller, the vendor will typically
agree to provide the reseller with authorization, technical assistance, access
to literature on the products and training, direct communication and access to
advanced confidential information regarding the products. In addition, a high
volume reseller with the proper technical qualifications may also qualify for
service authorization from the vendor. Reseller authorizations are typically
reviewed by the vendor on an annual basis. To date, neither MIAD nor any vendor
has terminated any reseller agreement.

         Our MIAD ULTRA(R) line system for workstations and other servers
provides our clients with rapid delivery, custom configuration, cost savings and
enhanced quality control. However, for clients who require high-end servers, we
are an authorized reseller of Compaq, Toshiba, Hewlett Packard, IBM, Microsoft
and other well-recognized brands as described below.

         We have been authorized to resell products from major vendors. We have
authorizations from 3Com Systems, Acer, Cisco Systems, Compaq, Hewlett-Packard,
IBM, Intel, Lexmark, Microsoft, Novell and Toshiba. These reseller
authorizations are referred to in the promotional materials of these vendors as
"business partnerships".


                                        9

<PAGE>



         MIAD'S responsibilities as an authorized reseller includes securing
orders for the vendor's product and to provide pre- and post-sale support to the
client. This support does not include maintenance which is a separate
authorization which must be independently applied for and approved. The vendor
also has certain responsibilities under the reseller agreement which include
providing authorization to resell products, providing technical product
assistance, direct communication and providing the reseller with advance
confidential information on upcoming product announcements, access to literature
and product/sales training.

          We are an authorized reseller and public sector reseller for
Hewlett-Packard, Compaq, IBM and Toshiba. We are also an authorized reseller,
public sector reseller and education reseller for Compaq and Toshiba and a
Compaq and IBM service center. In addition, we are authorized by Microsoft for
all software in addition to being certified as an original equipment
manufacturer (OEM) for all Microsoft products used in the MIAD ULTRA(R) line
sold to MIAD customers.

         We have arrangements with the major distributors in Canada to acquire
products. Although we are authorized by the manufacturer to resell their
products, we deal directly with their distributors from whom we actually
purchase the products which we resell to end users. Our acquisition of products
from Ingram-Micro and Merisel, the two largest distributors from whom we acquire
approximately 75 % of our products, is based on product availability, price,
credit availability and service. We currently have General Security Agreements
with Ingram Micro and Merisel which secure payment for all goods and services we
purchase from them for resale.

         As a reseller, we earn our revenues through the resale of the products
and services we purchase from our vendors, such as IBM, Toshiba, Compaq, etc.
through their distributors. We then resell the products and services to our
customers at our price which is higher than the price we pay the distributor.

(g)      Services and Support

         In order to provide technology solutions for our clients, we complement
our computer assembly and distribution with value-added services and support,
including in-house and/or on-site warranty and maintenance repair, networking,
installation and support. We provide depot and on-site maintenance for the MIAD
ULTRA(R) line of workstations and we are also an authorized service center for
Compaq and IBM.

Networking Services
-------------------

         As a provider of IT solutions, we have the personnel, expertise,
experience and partners to provide turn-key network solutions, from peer-to-peer
networks to 200+ station Novell or Microsoft NT networks. We provide network
design and consultation, facility cabling, project management, network
implementation and support. We work with our

                                       10

<PAGE>



clients to provide solutions that not only meet their current requirements, but
will allow integration of future growth and technology.

Service and Support
-------------------

         In addition to assembling custom computer systems for our customers, we
complement our computer assembly and distribution with value-added services and
support, including in-house and/or on-site warranty repair, installation,
support and maintenance for the MIAD ULTRA(R) line of systems delivered to
clients. We are also one of the few authorized Compaq Service Centers in
Ontario, Canada and an authorized IBM Service Center. Our staff upgrade their
technical IBM education as part of an ongoing program.

Specialized Maintenance
-----------------------

         As a service and support focused organization, we also provide
specialized national service contracts. For one of Canada's largest national
banks, we support over 7000 printers installed in 1400 of its branches across
the country which are owned by the client and are several years old. This
specialized service includes Canada-wide Toll-Free Technical Support, integrated
with a national unit exchange program for any unit that cannot be repaired over
the phone. Although we do not use refurbished products in our own systems, this
exchange program provides a pool of the client's own printers which have been
refurbished for the client by MIAD and are available to be shipped via courier
to any location in Canada the next business day. The non-functioning printer is
then returned to MIAD for refurbishing and storage by MIAD until it is needed to
replace another non-functioning printer. In most cases, this program provides a
faster turnaround time than the more expensive on-site service. With our
program, a functional printer will be on the user's desk the next day rather
than waiting for an on-site technician to get a part that he/she is not carrying
with them. Our contract has been renewed in each of the past three years. The
revenues from this contract are not material.

Technical Procedures
--------------------

         We believe that on-going service and support is the basis for any
long-term partnership with clients. We have a permanent testing LAN set up for
product testing and problem recreation. This test can be run under NT, Novell or
Windows 95/98/2000.

         All initial support calls to our 1-(800) toll-free number or local
phone lines are directed to the technical support team. We currently have
Certified Novell-Netware Engineer ("CNE") and Microsoft Certified Engineer
("MSCE") personnel along with technicians who specialize in the manufacturing
and support of our ULTRA(R) Series computers. Calls are answered immediately or
a technician will return a call within 30 minutes. Problem escalation is
directed to the service manager. We provide telephone technical support, depot
repair as well as on-site service. From 8:00 a.m. to 6:00 p.m. with after hours
and weekend

                                       11

<PAGE>



service available upon request. We are currently recruiting additional staff in
order to provide seven day a week support.

         We use a customized service tracking program to track service calls.
With this tracking program, we track customer information, service issues,
problem resolution, parts usage and serial numbers. This information is then
transferred to our accounting system for invoicing. We continue to evaluate an
upgrade to an integrated service package.

(h)      Marketing and Distribution

         Demand for computer systems in the corporate and institutional
marketplace is driven by many factors, the most significant being price, brand
name recognition, the ability of the system to be customized to the client's
needs and desires, and delivery in a timely manner. Management is not aware of
any manufacturer that currently has a computer system which can meet all of a
client's requirements and desires. The major computer vendors such as IBM,
Compaq and Hewlett-Packard do not custom build computer systems. They do,
however, generally have available 100 to 300 models of reasonably priced
pre-configured computer systems. Conversely, other vendors such as Dell, Gateway
(and MIAD in Canada) do not typically provide mass produced pre-configured
systems but rather, custom build systems. For those large users whose businesses
require a custom configured system, a brand name manufacturer such as IBM,
Hewlett-Packard and Compaq are not available options due to the fixed nature of
their mass produced computer systems. It is the build-to-order system available
from Dell, Gateway (and MIAD in Canada) that provide these customers with the
custom configuration they need with reasonable pricing and rapid delivery.

         We are significantly smaller than Dell and Gateway and do not have the
name recognition that they enjoy. This is a competitive disadvantage which is
difficult to overcome due to their greater financial resources. Due to our
smaller size, however, we are able to deal face-to-face with our customers and
develop personal relationships which does provide us with an advantage that our
competitors lack due to their size. In addition, we can usually offer faster
delivery, if necessary, and carry no inventory.

         Our current client base is primarily focused in four major market
segments. This includes (1) major corporate accounts; (2) institutional accounts
to acute care facilities located in the Toronto area; (3) restaurant and
hospitality POS industry currently installed in more than 30 restaurant chains
and individual restaurants located primarily in the Province of Ontario with
some installed in the Province of Alberta; and (4) educational which includes
many of the top private schools and community colleges in Ontario.

         At this stage of our development, we are still a relatively small
player in the Canadian marketplace. However, we believe that we have the
structure and the strategic plan which we expect will allow us to become a
significant player in the Canadian IT systems and services business. We are not
yet measuring market share in either the corporate or institutional field. On
the POS side for the hospitality industry, our market share, with over

                                       12

<PAGE>



1,000 installations, is still in the single digit range. We have made
significant strides in penetrating the Ontario private school and community
college markets. Although we have secured many of the top name institutions as
our clients, our market share is also still in the single digit range.

         We further intend during the current fiscal year to add sales
representatives to the Toronto and southwestern Ontario territory, focus
prospect exposure on our service including IBM and Compaq warranty service,
refine or improve our electronic presence with emphasis on small and medium
business, consider expansion beyond the boundaries of Ontario and Canada and
provide educational services to our client base.

(i)      Competitive Business Conditions

         We have the ability to provide our clients with either a MIAD custom
assembly system or with name brand resales. We do not typically compete with
major name brand companies such as IBM, Compaq, Toshiba or Hewlett-Packard since
we provide a custom assembled system to our clients' specifications. In such
situations, it is the customization package and not price considerations that
enable us to attract and maintain customers. When we do compete with a Dell or
Gateway, we have certain competitive disadvantages such as their materially
greater financial resources, name recognition, buying power and sales to the
retail market place (such as Gateway through its retail stores). Size, however,
does have its limitations. Unlike our major, well-financed and well-known
competitors, we are able, due to our smaller size, to work face-to-face with our
customers and develop working, personal relationships. We do not have the
additional expense of carrying inventories and we can, if necessary, provide a
faster delivery time in most instances.

         When our role is reselling, high-end name-brand services (such as IBM
and Compaq), to clients and potential clients, we find ourselves competing with
other resellers such as EDS/Systemshouse, Quiet Touch Computers, GE Capital
Corp., Microage, Compugen, etc. We believe that we are competitive with these
resellers because of our authorizations to service several of the brand name
lines such as IBM and Compaq and our ability to provide technical support and
education services. These factors enable us to effectively compete with larger,
better financed companies. We also work closely with our educational clients to
experiment with new technologies for their businesses and work with educational
associations to secure special prices and configurations for these clients. In
addition, we also offer our clients technical training services. We believe that
these additional services provides us with a competitive edge over our
competitors and what sets us apart.

(j)      Sources of Supply

         For our "build-to-order" MIAD ULTRA(R) line of business computers, we
purchase name brand quality products from manufacturers such as Intel, Quantum,
ATI, Seagate, Maxtor, Panasonic, Acer, LG Electronics, Fujitsu, and others. Our
purchase of these

                                       13

<PAGE>



components is based on price, service and availability from among a number of
distributors based in the Toronto area. These distributors include Merisel
Canada, Supercom, Scan Tech, Bell Micro Products, Ingram Micro Canada, GB Micro,
Tech Data Canada.

         When we supply high end servers from IBM, Microsoft, Hewlett-Packard,
Compaq and others, we also acquire the products based on prices, service and
availability primarily from the larger international distributors in the Toronto
area (Merisel Canada, Ingram Micro Canada, Tech Data Canada, etc.). Supplies for
brand name products from major vendors such as IBM, Compaq, etc. are readily
available from the major distribution companies in Canada, including Ingram
Micro Canada which is the largest in Canada. The major vendors supply the
distributors who, in turn, supply major vendor approved resellers such as MIAD.

         For components required for the ULTRA(R) "build-to-order" model, some
of the peripheral products are identical to those found on the IBM and Compaq
systems and are available from the distributors. More unique devices, such as
cases and memory, are available from component suppliers. The computer products
and accessories that we provide our clients are obtained by us directly from the
manufacturer. This is similar to the manner in which an automobile dealer
acquires service parts and products from the automobile manufacturer such as
Ford or General Motors.

         Shortages of supply typically are not company specific but rather
industry-wide and are generally caused by natural disasters such as the
earthquakes in Taiwan last year that affected chip production on a worldwide
basis.

(k)      Dependence on Major Customers

         Our current customer-base is well diversified and spans multiple
industry groups. These include major corporate, institutional, mutual fund,
hospitality industry and POS, and educational customers.

         With a focus on specific industries, we have grown our client-base by
concentrating on penetration of each of the specific industry groups. In the
fiscal year ended September 30, 2001, 360 Networks, Inc. accounted for 36% of
our revenue. No other single client represents 10% or more of our revenue.

(l)      Intellectual Property

         We do not have any patents but rely upon licenses from the companies
whose products we purchase. For our MIAD ULTRA(R) line of "build-to-order"
business computers, we are authorized by a non-exclusive license agreement with
IBM to use IBM's licensed patents for personal computers and servers for which
we pay IBM an annual fee.


                                       14

<PAGE>



         The name of our "build-to-order" business computer, the MIAD ULTRA(R),
is trademarked in Canada. There are currently no plans to trademark the MIAD
ULTRA(R) line in the United States although we may decide to do so at a later
date.

(m)      Government Approval Regulation and Environmental Compliance

         In Canada, computer systems and computer components must be CSA
(Canadian Standards Association ) certified. This certification is virtually the
same as the Underwriters Laboratories (UL) certification in the United States.
We only purchase systems and components that are CSA certified.

         We are subject to Canadian provincial and federal laws governing our
relationship with employees, including minimum wage requirements, overtime,
working and safety conditions requirements. We presently are not the subject of
any governmental proceeding and we are currently in compliance with provincial
and federal regulations in Canada.

(n)      Research and Development

         We do not perform research and development ("R & D") in the traditional
sense. Rather, our R&D activities are primarily focused on
researching/evaluating/sourcing, and quality improvements for the products that
we integrate into our MIAD ULTRA(R) "build-to- order" business computer systems.
This R&D activity is conducted in the technical lab on our premises.

(o)      Employees

         As of the date of this filing, we employ 14 persons (of which 12 are
full-time employees). None of our employees are covered by a collective
bargaining agreement. We believe that our employee relations are satisfactory.

ITEM 2.  PROPERTIES

         Our facilities are located at 43 Rivera Drive, Unit 6, Markham,
Ontario, Canada. The facility is a modern, secure, industrial brick and concrete
block building. We currently occupy 9,975 square feet of warehouse, assembly,
service and office space. The current lease expires in November 2005. Our
monthly rent is $6,650 (Canadian including taxes) per month.

ITEM 3.  LEGAL PROCEEDINGS

         We are not a party to and none of our property is subject to any
pending or threatened legal, governmental, administrative or judicial
proceedings. There has never been a bankruptcy or receivership proceeding.


                                       15

<PAGE>



ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

    Our Annual Meeting of Shareholders was held on April 24, 2001. At the
meeting, the shareholders considered and (i) approved the Company's stock option
plan adopted by the Board of Directors in June 1999 (the "Plan"), (ii) ratified
options previously granted pursuant to the Plan, (iii) ratified the appointment
of the Company's independent auditors for the 2002 fiscal year, (iv) elected
directors to serve until the next meeting of shareholders, (v)approved certain
amendments to the Company's by-laws, (vi) approved a special resolution
empowering the directors to determine the number of directors of the Company and
the number of directors to be elected at each annual meeting or by annual
resolutions of shareholders, and (vii) ratified, confirmed and approved all
actions undertaken by the Board during the fiscal years ended September 30, 2000
and 1999 and through the date of the meeting.

                                     PART II

ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

         Our common stock currently trades on the over-the-counter bulletin
board (OTC:BB) under the trading symbol "MIADF". From June 1999 until our
listing on the OTC:BB in November 2001, we traded in the "pink sheets" under the
trading symbol "MIAD". The following table sets forth the high and low bid
prices of our common stock (USD) for each calendar quarter and subsequent
interim period since our common stock commenced actual trading, as reported by
the National Quotation Bureau and represents inter dealer quotations, without
retail mark-up, mark-down or commission and may not be reflective of actual
transactions:

1999                                                High              Low
----                                                ----              ---
Quarter ended June 30                              $1.00             $1.00

Quarter ended September 30                          1.50              1.00

Quarter ended December 31                           2.375             1.375

2000
----
Quarter ended March 31                              2.375             2.1875

Quarter ended June 30                               3.25              2.375

Quarter ended September 30                          2.80              2.6825

Quarter ended December 31                           2.75              2.75

                                       16

<PAGE>


2001
----

Quarter ended March 31                              2.00              1.25

Quarter ended June 30                               2.00              1.96

Quarter ended September 30                          2.25              1.75

Quarter ended December 31                           2.25              1.75


         There can be no assurances that an active public market for the common
stock will develop or be sustained.

Holders:
-------

         As of September 30, 2001 there were 3,711,400 shares issued and
outstanding and 26 shareholders of record. We also have warrants outstanding
which, if exercised would result in the issuance of an additional 616,600 shares
of our restricted common stock.

Dividends:
----------

         We have not declared any dividends. There are no restrictions on the
common stock that limit the ability of us to pay dividends if declared by the
Board of Directors and the loan agreements and general security agreements
covering the Company's assets do not limit its ability to pay dividends.

         The holders of common stock are entitled to receive dividends when and
if declared by the Board of Directors, out of funds legally available therefore
and to share pro-rata in any distribution to the stockholders. Generally, the
Company is not able to pay dividends if after payment of the dividends, it would
be unable to pay its liabilities as they become due or if the value of the
Company's assets, after payment of the liabilities, is less than the aggregate
of the Company's liabilities and stated capital of all classes.




                                       17

<PAGE>



ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

         Except for the historical information contained herein, the matters
discussed in this report are by their nature forward-looking. For the reasons
stated in this report or our SEC filings, or for various unanticipated reasons,
actual results may differ materially. Our operating results may fluctuate on a
quarter-to-quarter basis as a result of a number of factors, including the
competitive and economic factors affecting the Canadian market, production and
assembly delays or difficulties, and the degree of acceptance that the Company's
products achieve during the year.

         All figures stated herein are in Canadian dollars.

Twelve months ended September 30, 2001 compared to same period in 2000

RESULTS OF OPERATIONS
---------------------

         Revenues
         --------

         For the fiscal year ended September 30, 2001, our revenues increased by
approximately 4% from $7,802,650 in the same period in 2000 to $8,085,766.
Although MIAD experienced dramatic growth in the first half of the fiscal year,
the problems arising from the slowing economy in the United States and Canada
were exacerbated following the terrorist attacks in the U.S. on September 11,
2001. These factors, coupled with the Company's largest client filing Chapter 11
midyear, contributed to the reduced Company revenues in the last two quarters of
the fiscal year. The net effect was a marginal revenue increase over last year.
The economic forecasts for the last calendar quarter of 2001 and the first few
months of 2002 indicate decreased demand for desktop, laptop and server computer
systems and services even for the largest firms such as IBM, Compaq, etc. MIAD
expects similar results over the same period.

         Due to the downturn in the economy, MIAD has taken steps which
management believes will minimize the impact of the declining economy on its
business and prepare it for the anticipated upturn in the first half of calendar
2002. These steps include securing additional service and product authorizations
from top name suppliers and investing in technical staff training. MIAD has also
been appointed by the Canadian Association of Independent Schools, which is
comprised of 73 schools, to negotiate on its behalf with the major hardware and
software vendors for its upcoming multimillion dollar procurement program in the
late spring 2002. MIAD has also developed an enhanced web presence for the
Company which includes e-business capability that allows clients to order
supplies on-line directly from the Company. Revenues from value-added services
for the fiscal year ended September 30, 2001 comprised less than 4% of total
revenues for the period and are considered immaterial. Industry trends over the
past three years have

                                       18

<PAGE>



dramatically changed the mix of MIAD product sales. In fiscal 2001, MIAD's
revenues from the custom assembled ULTRA line accounted for 12% of total revenue
as compared to 25% of its total revenue in the 2000 fiscal year and 45% of total
revenue in the 1999 fiscal year. This trend is partially due to the fact that
the pricing differential between the major brands (IBM, Compaq, etc.) and the
custom vendors (Dell, Gateway and MIAD ULTRA), which had been significant, has
narrowed at a very rapid rate. The economic downturn has also contributed to the
competitive pressures on pricing and margins. MIAD has a lower profit margin on
major vendor products which it resells, particularly laptop computers.
Management expects that revenues from service activities will, to a limited
extent, offset some of the lost revenues from product sales. Further, since
margins from service activities are currently higher than those from product
sales, it is anticipated that current gross margins can be maintained although
this cannot be assured.

         Cost of Sales and Gross Profit
         ------------------------------

         Our gross profit on product sales increased 12% to $1,185,122 in the
twelve months ended September 30, 2001 from $1,052,637 in the comparable period
in 2000. The gross profit on product sales is 14.7% in fiscal 2001 compared to
13.5% in the comparable period in fiscal 2000. Our margin was affected
positively by the increased amount of services provided which carry a higher
intrinsic margin. License fees payable to IBM for the fiscal year ended
September 30, 2001 were $18,000 compared to $16,500 in the fiscal year ended
September 30, 2000. Cost of sales includes the cost of materials for MIAD's
custom assembled systems, cost of purchases for products which are resold by
MIAD and the cost of parts in MIAD's service revenue. MIAD does not separately
quantify any of these costs.

         Operating Expenses
         ------------------

         Operating expenses increased to $1,393,348 (17% of revenue ) for the
twelve months ended September 30, 2001 from $1,200,895 ( 15% of revenue) in
fiscal 2000. This total dollar and percentage increase is partially attributable
to the salaries and travel expenses of the additional sales staff and sales
commissions. Operating costs were significantly affected by the Company's
investments in technical training, web and e- commerce development as well as
the Company's professional expenses incurred in becoming a reporting company.
Interest expense decreased from $21,294 in fiscal 2000 to $15,913 in fiscal
2001due to the reduction in loans payable.

LIQUIDITY AND CAPITAL RESOURCES

         As of September 30, 2001, we had cash on hand of $520,396 compared to
$259,977 as of the same date in 2000. The net working capital for fiscal 2001
was ($28,475) compared to the net working capital for fiscal 2000 of $124,771
reflecting a decrease in net working capital of $153,246. This decrease was due
to our operating losses for the year. During the twelve months ended September
30, 2001, we used

                                       19

<PAGE>



$268,589 for operating activities compared to generating $19,525 for the same
period in fiscal 2000. Cash flow from financing activities decreased from
$264,343 in the comparable period in fiscal 2000 to $1,307 in the twelve month
period ended September 30, 2001 due to the reduction in equity raised through
conversion of warrants net of loan repayments. Fixed asset additions were
essentially unchanged from $9,307 in fiscal 2000 to $9,477 in the year ended
September 30, 2001.

         Two suppliers have security interests subordinate to any bank security
interest for all of the assets of the Company. The total amount owed to these
two suppliers at year end September 30, 2001 was $969,313. MIAD's president has
personally guaranteed all the debts owing to Ingram Micro Canada, Inc., one of
the two suppliers. In addition, as of June 30, 2001 the loan from Metcan
Technologies had been repaid.

         Management believes that MIAD has sufficient cash and cash equivalents
to satisfy its capital needs for the current fiscal year ending September 30,
2002. MIAD does not require the addition of any material capital assets and does
not currently have any material commitments for capital expenditures or material
purchase commitments for the next fiscal year. The Company's liquidity is
derived primarily from cash flow from sales and external sources. The Company's
external sources of liquidity consist of the possible exercise of outstanding
warrants which would result in additional working capital, a possible increase
in the lines of credit with major distributors and possible bank financing. No
assurance can be given that additional warrants will be exercised by warrant
holders. In addition, increases in lines of credit with major distributors or
bank financing, if sought, may not be available, or if available, the terms may
not be satisfactory to the Company.

Twelve months ended September 30, 2000 compared to same period in 1999

RESULTS OF OPERATIONS
---------------------

         Revenues
         --------

         For the year ended September 30, 2000 our revenues increased by 144%
from $3,199,057 in the same period in 1999 to $7,802,650. This increase is
attributable to the results achieved by the sales representatives and senior
sales executive we added in the last half of fiscal 1999 and the first quarter
of fiscal 2000. Sales activities were facilitated by MIAD's enhanced
availability of computer system authorizations as well as the additional service
authorizations obtained by the Company during the year. Our increased sales
coverage generated a significant number of new major corporate and educational
accounts. The revenue increase is also due to our focus on promoting high- end
servers, workstations and laptop systems, particularly from Compaq and IBM which
were sold to the customer base during the period. Revenue from value-added
services for the fiscal year ended September 30, 2000 comprised less than 4% of
total revenues for the period and are considered immaterial.

                                       20

<PAGE>



         Since 1998, industry trends in Canada and the U.S. have changed MIAD's
product mix. In fiscal 2000, MIAD's revenues from the ULTRA(R) line accounted
for 25% of its total revenue as compared to 45% of total revenue in the 1999
fiscal year. This trend is partially due to the fact that the pricing
differential between the major brands (IBM, Compaq, etc.) and the custom vendors
(Dell and Gateway), which had been significant, is narrowing at a very rapid
rate. This was especially true in the fourth quarter of calendar 2000 due to the
unexpected and dramatic decline in demand for computer systems. In addition,
MIAD has a lower profit margin on major vendor products which it resells,
particularly laptop computers.

         Cost of Sales and Gross Profit
         ------------------------------

         Our gross profit on product sales increased 38% to $1,052,637 in the
twelve months ended September 30, 2000 from $761,905 in the comparable period in
1999. The gross profit on product sales is 13.5% compared to 23.8% in the
comparable period in 1999. This margin reduction was due to the significantly
higher proportion of IBM and Compaq sales in the current fiscal year,
particularly of laptops which carry a lower profit margin than our ULTRA(R) line
which also represented a higher percentage of our total revenue in the
comparable period in 1999. License fees payable to IBM for the fiscal year ended
September 30, 2000 were $16,500 and $11,250 for the fiscal year ended December
31, 1999. Cost of sales includes the cost of materials for MIAD's custom
assembled systems, cost of purchases for products which are resold by MIAD and
the cost of parts in MIAD's service revenue. MIAD does not separately quantify
any of these costs.

         Operating Expenses
         ------------------

         Operating expenses increased to $1,200,895 (15% of revenue) for the
twelve month period ended September 30, 2000 from $899,348 (28% of revenue) in
1999. This total dollar increase is primarily attributable to the additional
costs associated with the salaries and travel expenses of the additional sales
staff and sales commissions resulting from our increased revenues in the period.
The percentage reduction is due to the higher productivity of the organization,
particularly the sales staff in the fiscal year ended September 30, 2000.
Interest expense decreased from $28,040 in the 1999 period to $21,294 in the
year ended September 30, 2000 due to the reduction in loans payable.

         In fiscal year 1999 a long-standing client of the Company encountered
severe financial difficulties, became insolvent and ceased all operations. As a
result, the Company was unable to collect the debt of approximately $61,000 and
it was ultimately written-off.

LIQUIDITY AND CAPITAL RESOURCES

         As of September 30, 2000 we had cash on hand of $259,977 compared to
$24,466 as of the same date in fiscal 1999. The net working capital for fiscal
2000 was $124,771

                                       21

<PAGE>



compared to the net working capital for fiscal 1999 of $(47,774), reflecting an
increase in net working capital of $172,545. This increase was due to the net
cash proceeds received from the exercise of warrants in the amount of $351,866
and the net increase in accounts receivable of $155,304 as of the September 30,
2000 year end. During the twelve month period ended September 30, 2000 we used
$19,525 for operating activities compared to $27,085 for the same period in
1999. Cash flow from financing activities increased from $59,746 in the
comparable period in 1999 to $264,343 in the twelve month period ended September
30, 2000 due to the additional equity raised through conversion of warrants net
of loan repayments. Fixed asset additions were essentially unchanged from $9,631
in 1999 to $9,307 in the year ended September 30, 2000.

         The loan payable from Metcan Technologies, Inc. is secured by a general
security agreement covering MIAD's accounts receivable and inventory. In
addition, two other suppliers have security interests subordinate to that of
Metcan Technologies and any bank security interest for all of the assets of the
Company. The total amount owed to the two suppliers at the year ended September
30, 2000 was $968,000. As of June 30, 2001, the loan from Metcan Technologies
had been repaid. MIAD's president has personally guaranteed all of the debts
owing to one of these suppliers, Ingram Micro Canada, Inc.

Recent Accounting Pronouncements

         "Statement of Financial Accounting Standard" ("SFAS") No. 133,
"Accounting for Derivative Instruments and Hedging Activities" and SFAS No. 138,
"Accounting for Certain Derivative Instruments and Certain Hedging Activities,
an Amendment of FAB 133" establishes accounting and reporting standards for
derivative instruments, including certain derivative instruments embedded in
other contracts, and for hedging activities. It requires an entity to recognize
all derivatives as either assets or liabilities in the statement of financial
position, and measure those instruments at fair value. Changes in the fair value
of those derivatives will be reported in earnings or other comprehensive income
depending on the use of the derivative and whether the derivative qualifies for
hedge accounting. SFAS No. 133 and SFAS No. 138 are effective for all fiscal
years beginning after June 30, 2000. The Company adopted SFAS No. 133, as
amended by SFAS No. 138, on January 1, 2001.

         The Company has identified no embedded derivative instruments requiring
separate accounting treatment engage in hedging activities.

         Staff Accounting Bulletin No. 101 provides guidance for applying
generally accepted accounting principles to revenue recognition in financial
statements filed with the SEC. For transactions that are addressed within the
scope of GAAP, revenue recognition should be recognized in accordance with GAAP.
For transactions not explicitly addressed by GAAP, Staff Accounting Bulletin No.
101 requires that all of the following conditions should be met: persuasive
evidence that an arrangement exists, delivery has occurred or services have been
rendered, the price is fixed or determinable, and that collectability is
reasonably assured. Staff Accounting Bulletin No. 101 does not have a material
effect on the Statement of Operations of the Company.


                                       22

<PAGE>



         The Company requires that a quote be kept on file for billing purposes.
Once a quote is accepted by a customer, the Company requests a purchase order
showing the products and the quoted price. Evidence of an arrangement exists as
a quote and a purchase order from the customer also exists. The Company invoices
its customers when it ships the products. The products are shipped using a
common carrier. The Company ships FOB our warehouse and the customer is deemed
to have received the goods once they have left our warehouse. The price is fixed
by a quotation from the Company and purchase order from the customer stating the
products and the pricing. Collection is reasonably assured as the Company has
performed a credit check on the customer and the customer and the Company have
discussed the products and their intended use, so there is little chance of the
products being returned due to incompatibility. The above satisfies the SAB No.
101 on revenue recognition.

         In July 2001, SFAS No. 141, "Business Combinations," and SFAS No. 142,
"Goodwill and Other Intangible Assets," were issued. SFAS No. 141 changes
certain accounting methods used for business combinations. Specifically, it
requires use of the purchase method of accounting for all business combinations
initiated after June 30, 2001, thereby eliminating use of the
pooling-of-interests method. SFAS No. 142 establishes new guidance on how to
account for goodwill and intangible assets after a business combination is
completed. Among other things, goodwill and certain other intangible assets will
no longer be amortized, but will now be tested for impairment at least annually,
and expensed only when impaired. This statement will apply to existing goodwill
and intangible assets, beginning with fiscal years starting after December 15,
2001. Early adoption of the statement is permitted for certain companies with a
fiscal year beginning after March 15, 2001.

         MIAD is currently evaluating these statements but does not expect that
they will have a material impact on its financial position, results of
operations, or cash flows.

Forward-Looking Statements
--------------------------

         In connection with the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995(the "Reform Act"), the Company is providing
cautionary statements identifying important factors that could cause the
Company's actual results to differ materially from those projected in
forward-looking statements made herein. Any statements that express, or involve
discussions as to, expectations, beliefs, plans, objectives, assumptions of
future events or performance are not statements of historical facts and may be
forward-looking. These forward-looking statements are based largely on the
Company's expectations and are subject to a number of risks and uncertainties,
including but not limited to, economic, competitive, regulatory, growth
strategies, available financing and other factors discussed elsewhere in this
report and in documents filed by the Company with the SEC. Many of these factors
are beyond the Company's control. Actual results could differ materially from
the forward-looking statements made. In light of these risks and uncertainties,
there can be no assurance that the results anticipated in the forward-looking

                                       23

<PAGE>



information contained in this report will, in fact, occur. Any forward-looking
statement speaks only as of the date on which such statement is made, and the
Company undertakes no obligation to update any forward-looking statement or
statements to reflect events or circumstances after the date on which such
statement is made or to reflect the occurrence of unanticipated events. New
factors emerge from time to time and it is not possible for management to
predict all of such factors, nor can it assess the impact of each such factor on
the business or the extent to which any factor, or combination of factors, may
cause actual results to differ materially from those contained in any
forward-looking statements.

ITEM 7.  FINANCIAL STATEMENTS

         The financial statements of the Company required by Regulation S-B are
attached to this report. Reference is made to Item 13 below for an index to the
financial statements an financial statement schedules.

ITEM 8.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE MATTERS

         There have been no changes or disagreements with our accountants on
accounting and financial disclosure.

                                    PART III

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

         (a) Identification of Directors and Executive Officers
             --------------------------------------------------

         As of September 30, 2001, the directors and executive officers of the
Company, their ages, positions in the Company, the dates of their initial
election or appointment as director or executive officer and the expiration of
their terms as directors are as follows:
<TABLE>
<CAPTION>
                                                                                       Period Served as
Name                         Age                Position                               Director
----                         ---                --------                               --------
<S>                          <C>                <C>                                    <C>
Michael Green                58                 President, Chief Executive             Since
                                                Officer and Director                   November 1996

Adrienne Green               61                 Secretary and Director                 Since December
                                                                                       1998*

Joseph Misetich              63                 Vice-President, Senior                      N/A
                                                Sales Executive
</TABLE>
-------------
* Ms. Green also served as a director from March 1993 to November 1996. She
resigned as an officer and director on December 3, 2001.

                                       24
<PAGE>

         Michael Green has been our President and Chief Executive Officer and
Managing Director of our Board of Directors since September 1998. A chartered
accountant by training, Mr. Green has extensive experience in sales, marketing
and finance of computer products in Canada. From 1993 until September 1998, Mr.
Green was our Business Development Manager and was our only direct sales
representative in our early years of development. Mr. Green was President of
Technical Logistics Systems, a Canadian distributor of specialized printers and
computers from 1983 to 1992 when he joined Adrienne Green, his sister, to form
MIAD Systems Ltd. in 1993. From 1977 to 1983 he was one of the founders of ESSNA
Ltd., the distributor of Epson printers in Canada. From 1968 to 1972, Mr. Green
was an accountant with Price Waterhouse. After completing his required program
for licensing as a chartered accountant at Price Waterhouse, Mr. Green became
controller of Mercedes-Benz Canada from 1972 to 1974, then Controller of Memorex
Canada (a computer peripheral products company) from 1974 to 1977. Mr. Green
obtained his Bachelor of Arts degree from the University of Toronto and his
Chartered Accountant Certification in Ontario with Price Waterhouse.

         Adrienne Green has been our Secretary since March 1993, a director
since December 1998, and was our President from March 1993 to September 1998.
She also served as a director from March 1993 to November 1996. In March 1993,
she joined Michael Green, her brother, to form MIAD Systems Ltd. In 1990, she
joined Fourth Party Maintenance Inc. as administrator. Ms. Green is an educator
by profession, specializing in teaching French in the Toronto school system from
1960 to 1990. Ms. Green obtained her Bachelor of Arts Degree from the University
of Toronto, Trinity College.

         Joseph Misetich is Vice-President and Senior Sales Executive since
October 1999. Mr. Misetich's career in the Canadian IT industry spans over 40
years. He was President and Business Development Manager at Clove Computers
Ltd., a Toronto based microcomputer reseller from 1985 to October 1999. After IT
operations responsibilities at the Canadian National Railroad, Mr. Misetich,
starting in 1970, progressed through sales positions at Pertec Canada and
Motorola Computer Systems Canada.

         All directors hold office until the next annual meeting of shareholders
of the Company and until their successors are elected and qualified. Officers
hold office until the first meeting of directors following the annual meeting of
shareholders and until their successors are elected and qualified, subject to
earlier removal by the Board of Directors.



                                       25

<PAGE>


          Involvement in Certain Legal Proceedings:

         None of our officers, directors, promoters or control persons have been
involved in the past five (5) years in any of the following:

         (1)      Any bankruptcy petition filed by or against any business of
                  which such person was a general partner or executive officer
                  either at the time of the bankruptcy or within two years prior
                  to that time;

         (2)      Any conviction in a criminal proceedings or being subject to a
                  pending criminal proceeding (excluding traffic violations and
                  other minor offenses);

         (3)      Being subject to any order, judgment or decree, not
                  subsequently reversed, suspended or vacated, or any court of
                  competent jurisdiction, permanently or temporarily enjoining,
                  barring, suspending or otherwise limiting his involvement in
                  any type of business, securities or banking activities; or

         (4)      Being found by a court of competent jurisdiction (in a civil
                  action), the SEC or the U.S. Commodity Futures Trading
                  Commission to have violated a federal or state securities laws
                  or commodities law, and the judgment has not been reversed,
                  suspended, or vacated.


         (b) Directorships
             -------------

         None of the Company's executive officers or directors is a director of
any company with a class of equity securities registered pursuant to Section 12
of the Securities exchange Act of 1934 (the "Exchange Act") or subject to the
requirements of the Exchange Act or any company registered as an investment
company under the Investment Company Act of 1940.


         (c) Identification of Certain Significant Employees
             -----------------------------------------------

         None


         (d) Family Relationships
             --------------------

         Michael Green, our President and Chief Executive Officer and a
director, and Adrienne Greene, our Secretary and a director, are brother and
sister.


                                       26

<PAGE>



ITEM 10. EXECUTIVE COMPENSATION

         The following table sets forth the compensation of our management for
the past three fiscal years. Michael Green, our President and Chief Executive
Officer and Joseph Misetich, our Vice-President and Senior Sales Executive were
the only members of our management that earned more than $100,000 in the year
ended September 30, 2001 and 2000. Michael Green was the only officer to earn
more than $100,000 in the year ended September 30, 1999.
<TABLE>
<CAPTION>

                                                  Summary Compensation Table

                                                                              Long Term Compensation
                                                                              ----------------------
                                   Annual Compensation                        Awards                            Payouts
                                   -------------------                        ------                            -------
Name and                                                    Annual                                                         Other
principal         Calendar      Base                        compen-      Restricted         Under-lying      LTI           Comp-
position          Year          Salary        Bonus         sation       Stock Awards       Options          Pay-outs      ensation
--------          ----          ------        -----         ------       ------------       -------          --------      --------
<S>               <C>           <C>           <C>           <C>          <C>                <C>             <C>            <C>
Michael           2001          180,000       15,000        195,000      none               none             none          none
Green
President         2000          180,000       26,000        206,000      none               none             none          none
CEO and
Director          1999          135,000       15,000        150,000      none               none             none          none


Adrienne          2001          77,000        5,000         82,000       none               none             none          none
Green
Secretary and     2000          77,000        5,000         82,000       none               none             none          none
Director
                  1999          77,000        5,000         82,000       none               none             none          none


Joseph            2001          57,000        92,500        149,500      none               none             none          none
Misetich
Vice              2000          50,000        92,300        142,300      none               none             none          none
President
(1)               1999          12,500        5,100         17,600       none               none             none          none
</TABLE>

----------------
1) Mr. Misetich did not join us until October 1999.




                                       27

<PAGE>


Compliance with Section 16(a) of the Exchange Act
-------------------------------------------------

         All reports required by Section 16(a) of the Exchange Act were not
timely filed by all directors and beneficial owners of more than ten (10%)
percent of any class of equity securities of the Company registered pursuant to
Section 12 of the Act. The Form 3 for each of Messrs. Green and Misetech and for
Ms. Green were filed in November 2001.


Option Grants in 2001
---------------------

         None

Aggregated Option/SAR Exercises and Fiscal Year End Options/SAR Value Table
---------------------------------------------------------------------------

         None

Long Term Incentive Plan ("LTIP") Awards Table
----------------------------------------------

         None

Compensation of Directors
-------------------------

         None


Employment Contracts and Termination of Employment and Change of Control
------------------------------------------------------------------------
Arrangements
------------

         (a)  Employment Agreements

    Mr. Green currently has a one year employment agreement that provides for an
annual salary of $200,000 (Canadian) per year. He also is entitled to earn a
sales commission at the rate of $5,000 for each $1,000,000 of sales achieved by
us in the fiscal year up to the first $10,000,000 of sales. If sales exceed
$10,000,000, he will receive a bonus of $20,000. For sales above $10,000,000,
his bonus will be $12,000 for each $1,000,000 of sales. Mr. Green also will be
entitled to receive a bonus of 4% of our pre-tax profit. The employment
agreement also provides a covenant by Mr. Green that he will not compete with or
solicit any business of MIAD for a three year period from October 1, 2000. This
employment agreement was extended for an additional one year term and expires on
September 30 2002. In addition, Mr. Green has personally guaranteed all debts
owing to Ingram Micro Canada, Inc., one of MIAD's major suppliers.

         Mr. Misetich has a one year employment agreement that provides for an
annual salary of $60,000 (Canadian per year). He is entitled to earn sales
commission based on his personal sales and a bonus based on the profitability of
business closed. The employment agreement also provides

                                       28

<PAGE>



a covenant that Mr. Misetich will not compete with or solicit any business of
MIAD for a one year period from October 2, 2000. This employment agreement was
extended for an additional one year term and expires on September 30, 2002.

         (b) Termination of Employment Agreements

                  None

          (c) Change of Control Arrangements

                  None


ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

         (a) Security Ownership of Certain Beneficial Owners
             -----------------------------------------------

         The following information relates to those persons who are the
beneficial owners of five percent or more of our outstanding voting common
stock:
<TABLE>
<CAPTION>

Title of                Name and Address of                 Amount and Nature of
Class                   Beneficial Owner                    Beneficial Owner (1)            Percentage of Class (2)
-----                   ----------------                    ----------------                -------------------
<S>                     <C>                                 <C>                             <C>
Common                  Michael Green                       1,960,000                       52.8%
                        178 Ridley Blvd.
                        Toronto, Ontario, Canada

Common                  Adrienne Green                        490,000                       13.2%
                        5096 Bloomington Road
                        Stouffville, Ontario,
                        Canada
</TABLE>

---------------
(1)  These shares are directly owned by each individual.

(2)  Percentage is based upon 3,711,400 shares of common stock outstanding on
     September 30, 2001.


         (b) Security Ownership of Management
         ------------------------------------

         The following table has been completed for each of the shares of common
stock beneficially owned by our directors, nominees, and executive officers and
all officers and directors as a group:


                                       29

<PAGE>

<TABLE>
<CAPTION>

                         Name and Address of            Amount and Nature of
Title of Class           Beneficial Owner               Beneficial Owner (1)           Percentage of Class (2)
--------------           ----------------               --------------------           -----------------------
<S>                      <C>                            <C>                            <C>
Common                   Michael Green                  1,960,000                      52.8%
                         178 Ridley Blvd.
                         Toronto, Ontario,
                         Canada

Common                   Adrienne Green (3)             490,000                        13.2%
                         5096 Bloomington
                         Road
                         Stouffville, Ontario,
                         Canada

Common                   Joseph Misetich                85,000                         2.3%
                         6 Allonsius Drive
                         Etobicoke, Ontario,
                         Canada M9C3N5
All officers and                                        2,535,000                      68.3%
directors as a
group (3
persons)
</TABLE>

---------------
(1)  These shares are directly owned by each individual.

(2)  Percentage is based upon 3,711,400 shares of common stock outstanding on
     September 30, 2001.

(3)  Ms. Green resigned as an officer and director on December 3, 2001.


Stock Option Plan

         In June 1999 the Board of Directors approved a Stock Option Plan (the
"Plan") which authorizes that up to a maximum of 15% of the Company's issued and
outstanding common stock is available to be issued under the Plan to those
persons who can participate in the Plan in accordance with its terms. The Plan
provides that no resident of the United States may be a participant in the Plan
unless such participation would not violate any applicable securities or other
laws of the United States or any state, territory or possession of the United
States.

         Options to purchase an aggregate of 160,000 shares of our common stock
were approved by the Board of Directors in June 1999 for two persons and
ratified by our shareholders when they approved the Plan at our shareholders
meeting held on April 24, 2001. These options have an exercise price of $.20
(USD) per share and are exercisable, in whole or in part, at any time from

                                       30

<PAGE>



April 24, 2001 until June 17, 2004. The exercise price was determined by the
Board at a time prior to the Company's common stock being listed for trading in
the "pink sheets". In September 2001, the Board granted an option to purchase
40,000 shares of our common stock to one person. These options are exerciseable,
in whole or in part, at $1.75 (USD) per share for four years commencing on
September 24, 2002. The exercise price was the market price of a share of our
common stock on the date of grant.


ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         During the past two (2) years, we have not entered into a transaction
with a value in excess of $60,000 with an officer, director or beneficial owner
of 5% or more of our common stock except as described under Item 4. entitled
"Employment Agreements" and as follows:

         In July 2000, we entered into security agreements with each of our two
major suppliers. Our President, Michael Green, has personally guaranteed all of
the debts owing to Ingram Micro Canada, Inc., one of these suppliers. The amount
of the debt guaranteed by Mr. Green to Ingram Micro at September, 2001 was
$688,085 (Canadian).


ITEM 13. EXHIBITS, FINANCIAL STATEMENTS AND REPORTS ON FORM 8-K

         (a)      Documents filed as a part of this Report
                  ----------------------------------------

                  See Part F/S below for an index to the Financial Statements
                  attached which are included as an integral part of this
                  Report.

         (b)      Reports on Form 8-K
                  -------------------

                  A report on Form 8-K was filed with the SEC on December 17,
2001.


PART F/S.  FINANCIAL STATEMENTS OF MIAD SYSTEMS, LTD.

           Independent Auditor's Report
           Audited Balance Sheet as of September 30, 2001 and 2000 Audited
           Statements of Operations for the year ended September 30, 2001
                   and 2000
           Audited Statement of Shareholders' Equity (Deficit) for the year
                   ended September 30, 2001 and 2000
           Audited Statements of Cash Flows for the year ended
                   September 30, 2001 and 2000
           Notes to Audited Financial Statements


                                       31

<PAGE>


                                INDEX TO EXHIBITS

   3.0    Articles of Incorporation of MIAD Systems Ltd.*
   3.1    Articles of Amendment of Articles of Incorporation*
   3.2    Bylaws*
   4.0    Warrant Certificate*
   10.0   Office Lease dated November 14, 1996*
   10.1   Lease Renewal Agreement dated September 13, 2001
   10.2   Employment Agreement for Michael Green dated October 1, 1999*
   10.3   Renewal Employment Agreement for Michael Green dated October 1, 2001
   10.4   Employment Agreement for Joseph Misetich*
   10.5   Renewal Employment Agreement for Joseph Misetech dated October 1, 2001
   10.6   Stock Option Plan*
   10.7   Security Agreement with Merisel Canada, Inc.*
   10.8   Security Agreement with Ingram Micro Canada, Inc.*

-----------------------------------------------------------------
* Filed as an exhibit to Form 10-SB filed with the SEC on July 10, 2001





                                       32

<PAGE>



                                 SIGNATURE PAGE


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



                                                MIAD  SYSTEMS, LTD.


Date:   January 10, 2002                        By: /s/ Michael A.S. Green
                                                    ----------------------
                                                Michael A. S. Green, President
                                                and Principal Financial Officer




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


/s/ Michael A.S. Green                          January 10, 2002
----------------------                          ----------------
 President and Director




                                       33


                                      F-14
<PAGE>
                               MIAD SYSTEMS LTD.

                              FINANCIAL STATEMENTS
                FOR THE YEARS ENDED SEPTEMBER 30, 2001 AND 2000

                                      AND

                          INDEPENDENT AUDITORS' REPORT


<PAGE>


                               MIAD SYSTEMS LTD.

                         INDEX TO FINANCIAL STATEMENTS


                                                                          Page
--------------------------------------------------------------------------------

Independent Auditors' Report                                              F-2

Balance Sheets                                                            F-3

Statements of Operations                                                  F-4

Statement of Shareholders' Equity (Deficit)                               F-5

Statements of Cash Flows                                                  F-6

Notes to Financial Statements                                         F-7 - F-13




                                      F-1
<PAGE>

                          INDEPENDENT AUDITORS' REPORT



To the Board of Directors of
MIAD Systems Ltd.


We have audited the balance sheets of MIAD Systems Ltd. (the "Company") as at
September 30, 2001 and 2000, and the related the statements of operations,
shareholders' equity (deficit) 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 audits in accordance with auditing standards generally accepted
in Canada. Those standards require that we plan and perform the audit to obtain
reasonable assurance whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of the Company as of September 30,
2001 and 2000 and the results of its operations and its cash flows for the years
then ended in accordance with accounting principles generally accepted in
Canada. There are no differences between United States GAAP and Canadian GAAP as
they relate to the financial statements of MIAD Systems Ltd.; see note 10 for
certain disclosure differences.


                                     /s/ Brodeur Dennis Chartered Accountants



                                            Brodeur Dennis Chartered Accountants

Richmond Hill, Ontario
November 27, 2001


                                      F-2

<PAGE>

                               MIAD SYSTEMS LTD.
                                 BALANCE SHEETS
                          SEPTEMBER 30, 2001 and 2000
                   (All Amounts Expressed in Canadian Dollars)
<TABLE>
<CAPTION>


                                                     ASSETS                            2001                 2000
-------------------------------------------------------------------------------------------------------------------
<S>                                                                               <C>                   <C>
Current assets:
   Cash and cash equivalents                                                      $   520,396           $   259,977
   Accounts receivable, net (Notes 2, 4 and 5)                                        486,367             1,579,327
   Inventories (Notes 2, 4 and 5)                                                     243,856               196,753
   Prepaid expenses                                                                    19,195                27,695
                                                                                  -----------           -----------

         Total current assets                                                       1,269,814             2,063,752

Capital assets (Note 3)                                                                31,375                28,557
                                                                                  -----------           -----------
         TOTAL                                                                    $ 1,301,189           $ 2,092,309
                                                                                  ===========           ===========


                                                 LIABILITIES
-------------------------------------------------------------------------------------------------------------------
Current liabilities:
   Accounts payable and accrued charges (Note 5)                                  $ 1,298,289             1,882,490
   Current portion of loans payable (Note 4)                                               --                56,491
                                                                                  -----------           -----------
         Total current liabilities                                                  1,298,289             1,938,981
                                                                                  -----------           -----------

         Total liabilities                                                          1,298,289             1,938,981
                                                                                  -----------           -----------

                                           SHAREHOLDERS' EQUITY (DEFICIT)
-------------------------------------------------------------------------------------------------------------------
Capital stock (Note 6)

   First Preference shares without par value , authorized - unlimited;
          issued and outstanding - Nil
   Common shares without par value, authorized - unlimited; issued and
         outstanding 3,711,400 at September 30, 2001; 3,673,400 at
         September 30, 2000                                                           590,299               532,501

Deficit                                                                              (587,399)              379,173
                                                                                  -----------           -----------
         Total stockholders' equity (deficit)                                           2,900               153,328
                                                                                  -----------           -----------
         TOTAL                                                                    $ 1,301,189           $ 2,092,309
                                                                                  ===========           ===========
</TABLE>




See notes to financial statements


                                      F-3
<PAGE>

                               MIAD SYSTEMS LTD.
    STATEMENTS OF OPERATIONS FOR THE YEARS ENDED SEPTEMBER 30, 2001 and 2000
                  (All Amounts Expressed in Canadian Dollars)




                                                       2001             2000
-------------------------------------------------------------------------------
Sales, net                                          $ 8,085,766     $ 7,802,650

Cost of sales, net                                    6,900,644       6,750,013
                                                    -----------     -----------

Gross Margin                                          1,185,122       1,052,637
                                                    -----------     -----------

Operating Expenses
   Wages and benefits                                   989,433         854,814
   Salesmen's auto, travel and promotion                167,306         139,859
   Rent                                                  48,103          43,312
   Professional fees                                     54,291          35,397
   Office and general                                    42,330          25,984
   Telephone                                             27,901          24,752
   Insurance                                             18,308          23,770
   Interest on loans payable                             15,913          21,294
   Bank charges                                           8,977           9,157
   Advertising                                            3,507           7,432
   Utilities                                              5,620           5,128
   Bad Debts                                              5,000            (248)
   Depreciation                                           6,659          10,244
                                                    -----------     -----------

Total operating expenses                              1,393,348       1,200,895
                                                    -----------     -----------

Loss before provision for income taxes                 (208,226)       (148,258)
                                                    -----------     -----------

Provision for income taxes                                   --              --
                                                    -----------     -----------

Net loss                                            $  (208,226)    $  (148,258)
                                                    ===========     ===========

Net loss per common share
   Basic and fully diluted (Note 10(i))                   (0.06)          (0.04)

Weighted average common shares outstanding:
   Basic and fully diluted                            3,685,268       3,512,322


See notes to financial statements


                                      F-4
<PAGE>

                               MIAD SYSTEMS LTD.

                  STATEMENT OF SHAREHOLDERS' EQUITY (DEFICIT)
                FOR THE YEARS ENDED SEPTEMBER 30, 2001 AND 2000
                  (All Amounts Expressed in Canadian Dollars)
<TABLE>
<CAPTION>


                                                 Common Shares
                                           Shares             Amount             (Deficit)              Total
                                         ---------           ---------           ---------            ---------

<S>                                      <C>                 <C>                 <C>                  <C>
Balances September 30, 1999              3,322,500           $ 147,635           $(230,915)           $ (83,280)
   Shares issued for service               110,000              33,000                  --               33,000
   Exercise of warrants                    240,900             351,866                  --              351,866
   Net loss for the year ended
     September 30, 2000                         --                  --            (148,258)            (148,258)
                                         ---------           ---------           ---------            ---------

Balances September 30, 2000              3,673,400             532,501            (379,173)             153,328
   Exercise of warrants                     38,000              57,798                  --               57,798
   Net loss for the year ended
     September 30, 2001                         --                  --            (208,226)            (208,226)
                                         ---------           ---------           ---------            ---------
Balances September 30, 2001              3,711,400           $ 590,299           $(587,399)           $   2,900
                                         =========           =========           =========            =========
</TABLE>


See notes to financial statements


                                      F-5
<PAGE>

                                MIAD SYSTEMS LTD.

                            STATEMENTS OF CASH FLOWS
                FOR THE YEARS ENDED SEPTEMBER 30, 2001 and 2000
                  (All Amounts Expressed in Canadian Dollars)

<TABLE>
<CAPTION>


                                                                      2001                      2000
-------------------------------------------------------------------------------------------------------
<S>                                                               <C>                       <C>
Cash flows from operating activities
   Net loss                                                       $  (208,226)              $  (148,258)
   Adjustments to reconcile net loss to net cash
    used in operating activities
          Depreciation                                                  6,659                    10,244
          Common shares issued for services                                --                    33,000
          Changes in certain assets and liabilities
               Accounts receivable                                  1,092,960                (1,314,352)
               Inventories                                            (47,103)                  (44,045)
               Prepaid expenses                                         8,500                   (25,500)
               Accounts payable and accrued charges                  (584,201)                1,469,386
                                                                  -----------               -----------

Net cash used in operating activities                                 268,589                   (19,525)
                                                                  -----------               -----------
Cash flows from investing activities
   Purchases of property and equipment                                 (9,477)                   (9,307)
                                                                  -----------               -----------
Net cash used in investing activities                                  (9,477)                   (9,307)

Cash flows from financing activities
   Repayment on loans payable                                         (56,491)                  (87,523)
   Net proceeds from private placement                                 57,798                   351,866
                                                                  -----------               -----------
Net cash provided by financing activities                               1,307                   264,343
                                                                  -----------               -----------
Net increase in cash and cash equivalents                             260,419                   235,511

Cash and cash equivalents at beginning of year                        259,977                    24,466
                                                                  -----------               -----------

Cash and cash equivalents at end of year                          $   520,396               $   259,977
                                                                  ===========               ===========

Supplemental Disclosure of Cash Flow Information

   Interest paid in cash during the period                        $    15,913               $    21,294
                                                                  ===========               ===========
   Income taxes paid in cash during the period                    $        --               $        --
                                                                  ===========               ===========
</TABLE>


See notes to financial statements


                                      F-6
<PAGE>

                               MIAD SYSTEMS LTD.

                       NOTES TO THE FINANCIAL STATEMENTS
                    YEARS ENDED SEPTEMBER 30, 2001 and 2000
                  (All Amounts Expressed in Canadian Dollars)


1. Description of Business
--------------------------------------------------------------------------------

      MIAD Systems Ltd. (the "Company") was incorporated in 1993 under the laws
      of the Province of Ontario and is primarily engaged in computer
      manufacturing, distribution and integration, network design,
      implementation and support.

2. Significant Accounting Policies
--------------------------------------------------------------------------------

   Basis of Accounting

      These financial statements are prepared in accordance with Canadian
      generally accepted accounting principles ("GAAP") which differ in certain
      respects with United States GAAP. United States GAAP disclosure
      requirements are presented in Note 10.

   Allowance for Doubtful accounts

      At September 30, 2001 and 2000, the allowance for doubtful accounts on
      accounts receivable was $5,000 and Nil respectively.

   Capital Assets and Depreciation

      Capital assets are recorded at cost less accumulated depreciation. The
      useful lives of internal computers is eight years. The useful live of
      furniture and fixtures is eight years. Depreciation based upon the
      estimated useful lives of the assets is calculated as follows.

                   Office Equipment     - 30% declining balance method
                   Computer equipment   - 30% declining balance method

   Cash and Cash Equivalents

      Cash and cash equivalents include all highly liquid investments with an
      original maturity of three months or less. The Company periodically
      maintains cash balances in financial institutions in excess of insured
      limits.

   Concentrations of Credit Risk

      The company has no significant off-balance sheet concentration of credit
      risk such as foreign exchange contracts, options contracts or other
      foreign currency hedging arrangements. Financial instruments that
      potentially subject the Company to a concentration of credit risk consist
      primarily of accounts receivable. Concentration of credit risk with
      respect to accounts receivable is limited to certain customers to whom the
      Company makes substantial sales. During fiscal year ended September 30,
      2001, one customer accounted for 36% of the Company's revenue and had a
      nil balance in accounts receivable at year end. No single customer
      accounted for 10% of the accounts receivable at September 30, 2001. During
      the fiscal year ended September 30, 2000 , one customer accounted for 13%
      of the Company's revenue and 49% of the accounts receivable at year end
      and another customer accounted for 14% of the Company's Revenue accounted
      for 9% of the accounts receivable at year end.

   Foreign Currency Transactions

      Monetary assets and liabilities denominated in a foreign currency are
      translated into Canadian dollars at the rate of exchange prevailing at the
      balance sheet date.


                                      F-7
<PAGE>
                               MIAD SYSTEMS LTD.

                       NOTES TO THE FINANCIAL STATEMENTS
                    YEARS ENDED SEPTEMBER 30, 2001 and 2000
                  (All Amounts Expressed in Canadian Dollars)


2. Significant Accounting Policies Continued
--------------------------------------------------------------------------------

   Fair Value of financial instruments

      Cash, receivables, and accounts payable and accrued charges are reflected
      in the financial statements at fair value due to the short term maturity
      of those instruments. The fair values of the company's loans payable are
      the same as the recorded amounts because rates and terms approximate
      current market conditions.


   Inventories

      Inventories are valued at the lower of cost or net realizable value, with
      cost being determined on an average cost basis. As at September 30, 2001
      and 2000, inventory by major classification was as follows: 2001 2000

                                                  2001                2000
                                                  ----                ----

                    Finished goods            $  50,894           $  14,103
                    Component parts             192,962             182,650
                                                -------             -------
                                              $ 243,856           $ 196,753
                                              =========           =========

   Net Loss per Common Share

      Basic net loss per share is computed by dividing net loss available to the
      common shareholders by the weighted average number of common shares
      outstanding for the period. Diluted net loss per share is computed by
      giving effect to all dilutive securities convertible into common shares.

   Revenue Recognition

      Revenues from the sales of products are recognized upon shipment and when
      all significant contractual obligation have been satisfied and collection
      is reasonably assured. The company ships products FOB our warehouse and
      uses common carriers to deliver the goods. Provision is made for an
      estimate of product returns and doubtful accounts and is based on
      historical experience.


      Revenue from the sales of software is recognized at the date of shipment
      to customers. The company ships software products FOB our warehouse and
      uses common carriers to deliver the goods.

      Revenue from network installations are recognized after the completion of
      the installation.

   Use of Estimates

      The preparation of financial statements in conformity with accounting
      principles generally accepted in Canada requires the Company's management
      to make estimates that affect the reported amounts of assets and
      liabilities and disclosure of contingent assets and liabilities at the
      date of the financial statements and the reported amounts of revenues and
      expenses during the reporting years presented. Actual results could differ
      from those estimates.




                                      F-8
<PAGE>

                               MIAD SYSTEMS LTD.

                       NOTES TO THE FINANCIAL STATEMENTS
                    YEARS ENDED SEPTEMBER 30, 2001 and 2000
                  (All Amounts Expressed in Canadian Dollars)


3. Capital assets
--------------------------------------------------------------------------------

                                             Accumulated        Net        Net
                               Cost          Depreciation       2001       2000
                            ----------------------------------------------------

   Office equipment         $  51,081       $  34,788      $  16,293   $  19,734
   Furniture and fixtures      35,215          20,133         15,082       8,823
                            ----------------------------------------------------
                            $  86,296       $  54,921      $  31,375   $  28,557
                            ====================================================

During the year ended September 30, 2001, the Company charged depreciation of
$6,659 and during the year ended September 30, 2000 charged depreciation of
$10,244.


4. Loans Payable                                           2001          2000
--------------------------------------------------------------------------------


   (i)  Metcan Information Technologies                  $     --     $  101,000
        Repayments monthly of $6,664 blended principal
        and interest at 15% per annum
        Matures July 31, 2001

   (ii) 636090 Ontario Limited                                 --         43,014
        Repayments of $5,000 blended principal
        and interest at 15% per annum
        Matures June 30, 2000
                                                         -----------------------
Total Debt                                                     --        144,014

Less: Current Portion                                          --         79,014
                                                         -----------------------
Long term Debt                                           $     --    $    65,000
                                                         =======================

   The above loans were secured by a General Security Agreement covering
   accounts receivable and inventory.

5. Accounts payable
--------------------------------------------------------------------------------

   During 2000, the Company signed General Security Agreements with two of its
   suppliers granting security over all of the assets of the company ranking
   after Metcan Information Technologies Inc.'s General Security Agreement and
   after any banking security. One supplier is owed $688,085 and the second
   supplier is owed $281,228. The company purchases the majority of its products
   from these two suppliers. The president of the company has personally
   guaranteed all debts owing to one of the suppliers.


                                      F-9
<PAGE>

                               MIAD SYSTEMS LTD.

                       NOTES TO THE FINANCIAL STATEMENTS
                    YEARS ENDED SEPTEMBER 30, 2001 and 2000
                  (All Amounts Expressed in Canadian Dollars)



6. Capital Stock
--------------------------------------------------------------------------------

i)  In October 1999, 25,000 common shares were issued for past services with an
    aggregate consideration of $5,000 U.S. ($7,500 Cdn.) and 85,000 common
    shares were issued to an officer as incentive to execute an employment
    agreement with an aggregate consideration of $17,000 U.S. ($25,500 Cdn.)

ii) During the year ended September 30, 2000, 240,900 common shares were issued
    on the exercise of 240,900 warrants for the aggregate consideration of
    $240,900 U.S. ($351,866Cdn.). At September 30, 2000, 654,600 warrants remain
    outstanding.


iii)During the year, 38,000 common shares were issued on the exercise of 38,000
    warrants for the aggregate consideration of $38,000 U.S. ($57,798 Cdn,). At
    September 30, 2001, 616,600 warrants remain outstanding

iv) The Company is authorized to issue an unlimited number of shares of common
    stock without par value (which is the common form of incorporation in
    Canada), of which 3,711,400 shares are issued and outstanding as of
    September 30, 2001. The holders of common stock are entitled to one vote per
    share held and have the sole right and power to vote on all matters on which
    a vote of shareholders is taken. The holders of the common stock do not have
    any preemptive rights to subscribe for or purchase any shares of any class
    of stock.

    The company is authorized to issue an unlimited number of first preference
    shares without par value of which none are issued and outstanding. The
    shares may be issued in one or more series with the designation, rights,
    privileges, restrictions and conditions to be fixed by the board by articles
    of amendment to the certificate of incorporation which must be approved by
    special resolution of the shareholders.

    The Company has authorized common stock purchase warrants which entitle the
    holder to purchase one share of restricted common stock at an exercise price
    of $1.00 U.S. per share at any time prior to March 31, 2002. Until
    exercised, holders of the warrants have none of the rights of shareholders
    of the company.

7. Tax Losses
--------------------------------------------------------------------------------

   The Company has unrecorded non-capital income tax loss carryforwards that may
   be used to reduce future tax liabilities. Due to the uncertainty regarding
   the ultimate utilization of the net operating loss carryforwards, the Company
   has not recorded any net benefit of the loss carryforwards. These losses will
   expire in the following years:

                      2003       $  92,000
                      2006       $ 126,000
                      2007       $ 123,000
                      2008       $ 195,000



                                      F-10
<PAGE>

                               MIAD SYSTEMS LTD.

                       NOTES TO THE FINANCIAL STATEMENTS
                    YEARS ENDED SEPTEMBER 30, 2001 and 2000
                  (All Amounts Expressed in Canadian Dollars)


8.  Lease Obligations
--------------------------------------------------------------------------------

    The company is committed under various lease agreements as follows;

i)  Premises

    The Company's rent expense for the year ended September 30, 2001 was $48,103
    and the rent expense for the year ended September 30, 2000 was $43,312. The
    Company has negotiated an extension to the current lease for a term of four
    years ending November 30, 2005 at a rent of approximately $7,000 per month.

ii) Vehicles

    The Company is leasing three vehicles at aggregate annual costs of
    approximately $36,000. These leases expire at varying dates.

9.  Licencing Agreement
--------------------------------------------------------------------------------

    The company entered into a licencing agreement with International Business
    Machines Corporation (IBM) whereby the company has nonexclusive rights to
    sell certain licensed products in Canada. The company is required to pay
    flat annual fee for this right. The company paid $18,000 for fiscal 2001 and
    $16,500 for fiscal 2000.

10. United States GAAP Disclosure Requirements
--------------------------------------------------------------------------------

(i) Net Loss Per Common Share
--------------------------------------------------------------------------------

    Under United States GAAP, SFAS No.128, "Earnings Per Share", requires the
    companies to replace the presentation of primary earnings per share ("EPS")
    with a presentation of basic EPS. The statements also requires dual
    presentation of basic and fully diluted EPS for all entities with complex
    capital structures. For the years ended September 30, 2001 and September 30,
    2000, basic and diluted weighted average common shares include only common
    shares outstanding. The inclusion of stock warrants and the stock option
    plan would be antidilutive and as a result are not included. The stock
    warrants, if exercised would have increased common shares outstanding at
    September 30, 2001 and September 30, 2000 by 616,600 and 654,600 shares,
    respectively.

(ii)Revenue Recognition
--------------------------------------------------------------------------------

    The Company recognizes revenue in accordance with the provisions of
    Statement of Position 97-2, Software Revenue Recognition. Revenue from
    Software license fees is recognized when there is evidence of an
    arrangement, the product has been shipped, fees are fixed and determinable
    and the collection of the related receivable is probable.

    In December 1999, the Securities and Exchange Commission ("SEC") issued
    Staff Accounting Bulletin ("SAB") No. 101, "Revenue Recognition". This SAB
    provides guidance on the recognition, presentation, and disclosure of
    revenue in the financial statements and is effective no later than the
    fourth quarter of fiscal years beginning after December 15, 1999. The SAB
    No. 101 draws on the existing accounting rules and defines the basic
    criteria that must be met before we can record revenue. The impact of
    adopting SAB 101 did not have a significant effect on the results of
    operations or financial position.


                                      F-11
<PAGE>


                               MIAD SYSTEMS LTD.

                       NOTES TO THE FINANCIAL STATEMENTS
                    YEARS ENDED SEPTEMBER 30, 2001 and 2000
                  (All Amounts Expressed in Canadian Dollars)


(iii) Freight Costs
--------------------------------------------------------------------------------

    Freight costs incurred for delivering goods to customers are included in
    cost of goods sold and amounted to $40,066 and $ 51,151 in 2001 and 2000,
    respectively. The Company generated $24,081 and $21,014 of freight revenues
    recharged to customers in 2001 and 2000, respectively, and these amounts are
    included in sales.

(iv)Statement of Comprehensive Income
--------------------------------------------------------------------------------

    In Accordance with SFAS No. 130, "Reporting Comprehensive Income", the
    Company is required to report its comprehensive income. Other comprehensive
    income refers to revenue, expenses, and gains and losses that under
    generally accepted accounting principles are included in comprehensive
    income but are excluded from net income, as these amounts are recorded
    directly as an adjustment to stockholders' equity. A statement of
    comprehensive income is not presented since the Company has no items of the
    comprehensive income. Comprehensive income is the same as net income for the
    years presented herein.

(v) Equity Based Compensation
--------------------------------------------------------------------------------

    The company stock option plan authorizes the granting of stock options to
    employees. Under the plan, the exercise price of the option equals the
    market price of the the Company's stock on the grant date. The option vests
    equally over four years with a maximum term of ten years.

    The Company currently accounts for its equity based compensation using the
    accounting prescribed by Accounting Principles Board Opinion No. 25,
    Accounting for Stock Issued to Employees. Since the Company is not required
    to adopt the fair value based recognition provisions prescribed under SFAS
    No.123, accounting for stock based compensation, it has elected only to
    comply with disclosure requirements in SFAS No.123, which include disclosing
    pro forma net income as if the fair value based method of accounting had
    been applied. Fair value of the options was determined using an
    option-pricing model which considers the exercise price and expected life of
    the option as of the grant date, expected dividends on the units, volatility
    and the risk-free interest rate for the expected term of the option. No
    compensation was recognized under the Stock Option Plan during the period
    June 1, 1999 (inception) to September 30, 2001. Had compensation cost for
    the Company's Stock Option Plan been determined based on the fair value at
    the grant date consistent with the method of FASB statement 123, $4,241 of
    compensation expense would have been recognized. This resulted in no
    material impact on earnings per share.

    The following table summarizes the stock option plan activity:

                                                 Stock Options   Exercise Price

                Granted                             160,000           0.20
                Granted                              40,000           1.75
                Exercised                                --             --
                Cancelled                                --             --

               Balance, September 30, 2001          200,000             --
                                                  ------------------------------

               Exercisable, September 30, 2001       80,000
                                                  ==============================


                                      F-12
<PAGE>


                               MIAD SYSTEMS LTD.

                       NOTES TO THE FINANCIAL STATEMENTS
                    YEARS ENDED SEPTEMBER 30, 2001 and 2000
                  (All Amounts Expressed in Canadian Dollars)


vi) Income taxes
--------------------------------------------------------------------------------

    The Company accounts for income taxes in accordance with SFAS No. 109,
    "Accounting for Income Taxes." Deferred taxes are provided on a liability
    method whereby deferred tax assets are recognized for deductible temporary
    differences, operating loss carryforwards , and tax credit carryforwards,
    and deferred tax liabilities are recognized for taxable temporary
    differences. Temporary differences are the differences between the reported
    amounts of assets and liabilities and their tax bases. Deferred tax assets
    are reduced by a valuation allowance when, in the opinion of management, it
    is more likely than not that some portion or all of the deferred tax assets
    will not be realized. Deferred tax assets and liabilities are adjusted for
    the effects of changes in tax laws and rates on the date of enactment.

    A summary of the provision for income taxes for the year ended September 30,
    2001 is as follows:


      Currently Payable                                   $       --
      Deferred benefit                                       224,150
      Valuation allowance                                   (224,150)
                                                          ----------
      Provision for income taxes                          $       --
                                                          ==========

    Deferred tax assets (liabilities) at September 30, 2000 are as follows:

      Available Non-capital losses                        $  136,400
      Expenses not currently deductible for taxes             87,750
      Less: Valuation allowance                             (224,150)
                                                          ----------
      Net deferred tax assets                             $       --
                                                          ==========

    The Company has used an estimated federal tax rate of 26% and an estimated
    provincial tax rate of 14% for all deferred tax computations. The Company
    has recorded a valuation allowance in accordance with the provisions of SFAS
    No. 109 to reflect the estimated amount of deferred tax assets that may not
    be realized. The Company has available non-capital losses as of September
    30, 2001 of approximately $536,000. The non-capital losses will expire
    beginning in 2003.

(vii)Litigation
--------------------------------------------------------------------------------

    From time to time the Company is exposed to claims and legal actions in the
    normal course of business, some of which are initiated by the Company.
    Management believes that the settlement or resolution of such actions, if
    any, will not have a material effect on the financial position or results of
    operations of the Company.

(viii)Recent Accounting Pronouncements
--------------------------------------------------------------------------------

    In June 1998, FASB issued SFAS No.133, "Accounting for Derivative
    Instruments and Hedging Activities" SFAS No.138, "Accounting for Certain
    Derivative Instruments and Certain Hedging Activities, an Amendment of FASB
    133" establishes accounting and reporting standards for derivative
    instruments, including certain derivative instruments embedded in other
    contracts, and for hedging activities. It requires an entity to recognize
    all derivatives as either assets or liabilities in the statement of
    financial position, and measure those instruments at fair value. Changes in
    the far value of those derivatives will be reported in earnings or other
    comprehensive income depending on the use of the derivative and whether the
    derivative qualifies for hedge accounting. SFAS NO. 133 and SFAS No.138 are
    effective for all fiscal years beginning after June 30, 2000. The Company
    will adopt SFAS No. 133, as amended by SFAS No.138, on October 1, 2000. The
    company does not expect this adoption to have any impact on reported
    earnings, comprehensive income, or financial position as the company has
    identified no embedded derivative instruments requiring separate accounting
    treatment or engage in hedging activities


                                      F-13