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


                                  FORM 10-KSB


     [x]  ANNUAL  REPORT  PURSUANT  TO  SECTION  13 OR 15(d)  OF THE  SECURITIES
EXCHANGE ACT OF 1934 for the period ended December 31, 2000

     [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES  EXCHANGE
ACT OF 1934 for the transition period from ___ to ____.

                        Commission file number: 0-25791

                               AIRTRAX, INC.
                           ----------------------
                 (Name of Small Business Issuer in its charter)

            New Jersey                            22-3506376
      -----------------------                ---------------------
     (State of Incorporation)                (I.R.S. Employer I.D.
      Number)


          870B Central Avenue, Hammonton, New Jersey 08037
     -------------------------------------------------------------
     (Address of principal executive offices)        (Zip Code)

                    Issuer's telephone number 609-567-7800.

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

         Title of each class       Name of exchange on which
         to be registered          each class is to be registered

            None                              None


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

                          Common Stock
                         (Title of Class)

     Check  whether  issuer  (1) filed all  reports to be filed by Section 13 or
15(d) of the Exchange Act during the past 12 months (or 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.

1). Yes: X   No
2). Yes: X   No

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

     State issuer's revenues for the most recent fiscal year. $83,464

     As of  March  31,  2001,  the  aggregate  market  value of the  voting  and
non-voting  common equity held by  non-affiliates  as approximately  $7,756,945.
This calculation is based upon the average bid price of $2.50 and asked price of
$2.65 of the common stock on March 31, 2001.

     The number of shares issued and  outstanding of issuer's  common stock,  no
par value, as of December 31, 2000 was 5,040,621.

                      DOCUMENTS INCORPORATED BY REFERENCE

                                     None.
<PAGE>


                                  AIRTRAX, INC.
                                   FORM 10-KSB
                   For the fiscal year ended December 31, 2000

                                TABLE OF CONTENTS
<TABLE>
<CAPTION>

                                                                                              Page
                                     PART I
<S>           <C>                                                                             <C>
Item 1.       Description of Business                                                           3

Item 2.       Description of Properties                                                         9

Item 3.       Legal Proceeding                                                                  9

Item 4.       Submission of Matters to a Vote of Security Holders                              10

                                     PART II

Item 5.       Market for Common Equity and Related Stockholder Matters                         10

Item 6.       Management's Discussion and Analysis or Plan of Operations                       10

Item 7.       Financial Statements                                                             15

Item 8.       Changes in and Disagreements with Accountants on Accounting and
              Financial Disclosure                                                             15

                                    PART III

Item 9.       Directors, Executive Officers, Promoters, and Control Persons                    15

Item 10.      Executive Compensation                                                           17

Item 11.      Security Ownership of Certain Beneficial Owners and Management                   19

Item 12.      Certain Relationships and Related Transactions                                   20

Item 13.      Exhibits and Reports on Form 8-K                                                 21

Signatures                                                                                     22

Index to Financial Statements                                                                  F-1
</TABLE>
                                        2
<PAGE>

PART I

Item 1. Description of Business.

INTRODUCTION.

     AirTrax, Inc. ("AirTrax" or "Company") was incorporated in the State of New
Jersey on April 17,  1997.  On May 19, 1997,  the Company  entered into a merger
agreement   with  a  predecessor   company  that   initiated  and  advanced  the
omni-directional technology. The predecessor company was incorporated on May 10,
1995. The Company became the surviving company in the merger.

     Effective November 5, 1999, the Company merged with MAS Acquisition IX Corp
("MAS"),  and  became  the  surviving  company in the  merger.  Pursuant  to the
Agreement and Plan of Merger, as amended,  each share of common stock of MAS was
converted to 0.00674  shares of AirTrax.  After giving effect to fractional  and
other reductions, MAS shareholders received 57,280 shares of AirTrax as a result
of the merger.

     As used in this Form 10-KSB,  the terms  "Company"  or "AirTrax"  refers to
AirTrax, Inc. and companies previously acquired.

     AirTrax  is a  development  stage  company  that  has  developed  an  omni-
directional  wheel  technology  intended  to  be  used  for  various  commercial
applications.

     The  Company's  executive  offices  are  located  at 870B  Central  Avenue,
Hammonton,  New Jersey 08037,  its telephone  number is (609) 567-7800,  and its
web-site is www.airtrax.com.

                                        3
<PAGE>

THE COMPANY.

OMNI-DIRECTIONAL TECHNOLOGY.

Prior History.
------------

     An early stage  omni-directional  wheel was patented by a Swedish inventor.
The  technology  was purchased by the United States Navy and was advanced at the
Naval Surface Warfare  Center.  The Navy held the patent until its expiration in
1990.  In January  1996,  the Company  entered into a  Cooperative  Research and
Development  Agreement ("CRADA") with the Navy to transfer the technology to the
Company. Since CRADA, the Company has advanced the development of the technology
for various applications  including use on forklifts and other material handling
equipment.

Technology Description.
----------------------

     An omni-directional  vehicle employing the Company's  technology is capable
of traveling in any direction.  On a four-wheel  omni-directional  vehicle, each
omni-directional wheel has its own independent electric or hydraulic motor. Each
motor is AC powered  eliminating  brushes and  commutators of  conventional,  DC
powered motors. The motion of the vehicle is controlled by coordinating all four
wheels through a microprocessor that receives input from an  operator-controlled
joystick.  The joystick controls all vehicle movement (starting,  steering,  and
stopping).  Conventional  drive  trains,  steering  racks,  and foot  petals for
braking  and  acceleration  are all  non-existent.  The steel  framework  of the
Company's  omni-directional  forklift is  mobilized  with four  omni-directional
wheels.  The electric or hydraulic motor for each wheel turns its own wheel hub.
Each wheel hub is encircled  with  multiple  tapered  rollers that are offset 45
degrees. The tapered rollers, covered with polyurethane,  are extremely durable.
By  independently  controlling  the rotation of each wheel,  the vehicle has the
capability of traveling in any direction.  The technology  allows the vehicle to
move  forward,  laterally,  diagonally,  or  completely  rotate  within  its own
footprint,  thereby allowing it to move into confined spaces without difficulty.
The navigational options of an omni-directional vehicle are virtually limitless.
The  omni-directional  wheel can be manufactured  in almost any size,  depending
upon the application. For instance, management believes the wheel can be used on
miniature vehicles or massive load-carrying vehicles. Presently, the Company has
incorporated omni-directional technology into three pilot forklifts.

EXISTING AND PROPOSED PRODUCTS.

ATX Series Omni-Directional Forklift.
------------------------------------

     The  Company  anticipates  that  its  omni-directional   forklift  will  be
available in the following  series with rated lift capacities  ranging from 3000
through 6000 pound, in increments of 1000 pounds;

     ATX  Series.   The  ATX  series  is  the  standard  version  featuring  the
revolutionary  omni-directional technology. As described,  conventional steering
racks and foot petals are  non-existent  allowing  impediment  free  ingress and
egress.   This  forklift  will  deliver  unequaled   maneuverability   providing
significantly   improved  operating   efficiencies  in  the  materials  handling
industry.  This model is  expected to retail at prices  higher  than  comparably
sized standard forklifts.

                                        4
<PAGE>

     ATX-E Series. This series will include the omni-directional technology, and
will have a feature that permits the upper section of the forklift to extend and
retract very similar to a "reach truck". This extend/retract feature effectively
reduces  the  overall  dimension  of  the  machine  while  carrying  a  load  to
approximately 84 inches enabling it to traverse an eight-foot aisle sideways. At
this time,  the Company has initiated but not completed the  engineering  design
and analysis of the ATX-E Series.

     In the future,  the Company may attempt to add a rotational  feature to its
forklift  allowing loads to be transferred  from one side to the other while the
forklift  remains  stationary.  The  Company  will be  required  to  complete an
engineering  design and analysis as well as a market  feasibility  study of this
vehicle prior to its development, for which no assurances can be given.

     The Company expects the retail price of the ATX series forklift (3000 pound
capacity  rated) to range between  $35,900 to $37,900 per unit. The retail price
of a similar rated, standard (non-omni-directional) forklift ranges from $18,000
to $23,500 per unit.

Omni-directional Wheelchair.
---------------------------

     The Company has conducted a preliminary design of an omni-directional wheel
for  wheelchair  applications.  It will require  additional  funds to complete a
structural  and  ergonomic  design  of a  proto-type  wheelchair,  as well as to
construct the proto-type for further evaluation and testing. Although management
recognizes the potential  utilitarian  benefit and significant market size of an
omni-directional  wheelchair, no assurances can be given that the product can be
successfully developed by the Company.

Military Products.
-----------------

     During 1999, the Company was awarded a Phase I research  contract under the
Department of Defense's Small Business  Innovation  Research program ("SBIR") to
develop an omni-directional  Multiple Purpose Mobility Platform (MP2). The Phase
I contract  studied  the  application  of the  omni-directional  technology  for
military  use and was  supervised  by the  Naval  Air  Warfare  Center  Aircraft
Division  in  Lakehurst,   New  Jersey.   The   contemplated  use  includes  the
installation  of jet engines on military  aircrafts  and the  transportation  of
munitions  and other  military  goods.  The Company  completed  the Phase I base
contract  in 1999 and was  subsequently  granted  a Phase I option  from NAWC to
further  define the uses of the MP2.  In July 2000,  the  Company  was awarded a
Phase II research contract under the SIBR program. The Phase II contract with an
option will not exceed 42 months and will further study the  feasibility  of the
MP2 for military  purposes,  and will culminate with the  construction of one or
more proto-type  devices.  Contract  revenues range from $750,000 to $1 million.
The SBIR program enables the Government to place  production  orders for awarded
products under a Phase III contract. Although management believes the underlying
omni-directional  technology for the proposed MP2 has significant  potential for
both  commercial  and military  applications,  no  assurances  can be given that
Company will be awarded the Phase III  Contract nor that any product  sales from
the United States military under a Phase III contract will result.

                                        5
<PAGE>

     In  addition  to the  military  applications  relating  to  SBIR  contracts
discussed  above,  the  Company has  proposed to adapt its ATX  omni-directional
forklift  product  line  for use  on-board  Military  Sealift  Command  and Navy
re-supply ships.  This application will involve  upgrading  materials,  sealing,
coatings, and electromagnetic hardening to enable its machine to function in the
corrosive  shipboard  environment.  In January 2001, the Company  responded to a
request  for  proposal  from the United  States  Navy to supply two 4,000  pound
capacity omni-directional  forklifts suitable for shipboard testing and use. The
Company's  proposal  included options to buy additional  units. This proposal is
currently   under   evaluation   by  the  Navy.   The  Company   believes   that
omni-directional  technology  will  enhance  long load  handling in the confined
spaces  on-board Navy and MSC re-supply  ships  currently in inventory.  It also
believes that the United  States Navy,  as well as foreign  naval  applications,
represents a significant market opportunity for omni-directional forklift sales.
The Company  estimates  potential use on 21 US Navy and MSC re-supply  ships, 12
aircraft  carriers,  and 11 amphibious  warfare ships,  with each ship requiring
between 10 and 15 omni-directional  fork lifts. At this time, the Company cannot
predict the likely result of its proposal to the Navy,  nor whether future sales
to the United States Navy or any foreign government will result.

Other Products.
---------------

     Since 1995, the Company and its predecessor  have  manufactured  and sold a
helicopter  ground  handling  device.  Sales  to date  have  been  limited,  and
management  believes  that future sales will be  insignificant.  Although it has
received a patent on an  omni-directional  ground handling devise, at this time,
the Company does not expect to develop this product.

     During 2000, the Company  completed a feasibility  study for a hybrid power
supply module for forklifts and other battery powered mobility  machines.  It is
designed to replace a standard battery enabling  operation on either fossil fuel
or battery power. The module will consist of a generator  coupled to a specially
designed battery with micro-processor  controls.  Its unique hybrid feature will
enable a forklift  to be powered  indoors  by battery  without  noise or exhaust
pollution,  and by fossil fuel in non pollution  sensitive areas. The battery is
designed to re-charge  during  fossil fuel use thereby  eliminating  re-charging
downtime customarily  experienced by battery powered forklifts.  The Company has
filed a patent  application  for the unique features of the hybrid power module.
The further  development  of this product will be subject to available  funds to
complete an engineering  design of module,  however,  no assurances can be given
that the product can be successfully developed by the Company.

                                        6
<PAGE>

CURRENT OPERATIONS.

     Since 1995,  substantially  all of the Company's  resources and  operations
have directed towards the development of the omni-directional  wheel and related
components for forklift and other material  handling  applications.  Many of its
components,  including the unique shaped  wheels,  motors and frames,  have been
specially designed by the Company and specially manufactured. Three pilot models
of  the  commercial   omni-directional   forklift  are  currently   operational.
Additional  testing and minor  component  refinement  will be required  prior to
commercial production and sale. Testing by Underwriters  Laboratory,  and by the
Company to meet the  stability  standards  of the  American  National  Standards
Institute  (ANSI  B56) also  will be  required.  The  Company  anticipates  that
required  testing and  component  refinement  should be  completed in the second
quarter of 2001, and expects to initiate the  commercial  sale of its ATX series
forklift  during  the  third  quarter  of  2001.  Although  management  does not
anticipate any material  functionality defects during the final test period, the
results of additional testing and component  refinement may delay the initiation
of product sales. Initial sales of the ATX series will be limited to 3,000 pound
capacity rated models. Delivery of initial orders is anticipated to occur within
eight to 12 weeks from placement.

MANUFACTURING AND SUPPLIERS.

     The Company has entered into an arrangement with an equipment  manufacturer
located in Willow Grove, Pennsylvania to commercially assemble the forklift. The
Company expects to enter into  arrangements with one or more other facilities to
satisfy its future  production  requirements.  The Company  believes  that these
arrangements  will be suitable for its  production  needs during fiscal 2001. In
addition,  it is  conceivable  the Company may establish  its own  manufacturing
facility in the future if economically advantageous.

     Components for the Company's forklifts consist of over the counter products
and  products  that have been  specially  designed and  manufactured  by various
suppliers in collaboration with the Company. The Company believes that continual
refinements  of certain  components  will  occur  during the first six months of
initial  production  in response to user  feedback.  The Company  will strive to
improve product  functionality  which may require additional  refinements in the
future.  The need for  additional  refinements  on a  continuing  basis may slow
projected product sales.

     The Company  considers the  specially  designed and  manufactured  products
proprietary,  and has entered into exclusive contractual agreements with certain
suppliers  to  protect  the  proprietary   nature  of  these   products.   These
arrangements  prohibit the supplier from producing the same or similar  products
for other companies. In addition, while the Company maintains single sources for
the over the counter components, it believes that other sources are available if
necessary.

MARKETING.

     The Company intends to establish an exclusive dealer network nationally and
internationally  for its forklift  product  line.  Each dealer likely will be an
existing equipment distributor,  and will be granted a designated territory.  In
addition,  each  dealer  will be  required  to  purchase  a number of  forklifts
commensurate with the size of its territory.  In March 2001, the Company hired a
director of dealer sales to  establish a national  dealer  network.  The Company
will  initiate  dealer  solicitation  during  the  second  quarter  of 2001.  In
addition,  the Company plans to increase user awareness  through direct mailings
to dealers and large users, television advertising, and trade shows.

                                        7
<PAGE>

MARKETS

Forklifts.
---------

     The Company's initial market focus will be directed to the forklift market.
The Company believes the commercial  version of the omni-  directional  forklift
will  revolutionize the materials handling and warehousing  industries  creating
potential   markets   globally.   Industry  data   indicates  that  during  1998
approximately  174,000  and  550,000  units were sold in the  United  States and
worldwide,  respectively (Modern Materials Handling).  Based upon an average per
unit sale price of $28,500  (Company  estimate),  the total market in the United
States would  approximate $5 billion in 1998. This amount  represents sales of a
broad range of vehicles with price ranges from $18,000 to $23,000 for a standard
3000 pound rated vehicle to $80,000 or more for  specialty  narrow aisle or side
loaders.  Of the total  market,  management  expects to compete  with  mid-range
electrical  and fossil fuel  riders,  and some  specialty  narrow  aisle or side
loaders.

Man Lifts.
---------

     Man lifts are used in the construction and warehousing industries,  and are
ideally suited for omni  directional  technology.  According to data provided by
the United  Department of Commerce,  this market consists of approximately  $1.2
billion in annual sales. Man lifts range in size from single user lifts to large
off road machines.  Of the total market,  the Company  expects to compete with a
range of indoor man lifts.

COMPETITION

     Although the Company  believes that  initially it will not confront  direct
competition  for its  omni-directional  technology,  it does  anticipate  facing
competition  from competing  technologies  in the future.  In the near term, the
Company expects to confront competition with conventional products (ie. standard
forklifts)  on the basis of price and  reliability.  In addition,  many of these
manufacturers  are  subsidiaries of major national and  international  equipment
companies,  and have significantly  greater financial,  engineering,  marketing,
distribution  and other resources than the Company.  In addition,  the patent on
omni-directional  technology  expired in 1990.  Although  the Company has sought
patent  protection for certain aspects of its  technology,  no assurances can be
given that such patent protection will effectively thwart competition.

PATENTS AND PROPRIETARY RIGHTS

     The Company has filed patent applications  encompassing  certain aspects of
the  omni-directional  wheel, as well as features specific to the forklift.  The
Company also anticipates that it will make future patent  applications  relating
to various aspects of its  omni-directional  technology.  Recently,  the Company
filed a patent  application  for its power  module.  The Company also has made a
preliminary  filing for foreign patent protection which comports with the patent
applications  filed in the United States.  At this time, no patents,  foreign or
domestic,  have been  issued  for any of the  Company's  technology  other  than
helicopter  ground handling device  described  below.  The Company also seeks to
protect its  proprietary  technology  through  exclusive  supply  contracts with
manufacturers for specially  designed and manufactured  components.  In December
1997,  the  Company  was  awarded a patent  for an  omni-directional  helicopter
ground-handling device.

                                        8
<PAGE>

BACKLOG

     The Company had no backlog for the year ended  December 31, 2000.  There is
no seasonal impact on the Company's sales.

FACILITIES

     The Company  maintains its  administrative  offices at 870B Central Avenue,
Hammonton,  New Jersey 08361 on premises  owned by the president of the Company.
As of December 31, 2000, the arrangement between the parties has been rent-free.
In addition, the Company maintains limited offices at H&R Industries, Inc. ("H&R
Industries"),  located at 100 Park Avenue,  Warminster,  Pennsylvania 18974. H&R
Industries provides contract manufacturing and assembly services to the Company.
As of December 31, 2000, the arrangement between the parties has been rent-free.

PRODUCT LIABILITY

     Due to nature of the  Company's  business,  the Company may face claims for
product liability resulting from the use or operation of the Company's forklifts
or other products.

     Presently,  the Company does not maintain any product liability  insurance.
It intends to obtain such insurance  commensurate  with the initial  shipment of
its omni-directional forklifts.

EMPLOYEES

     As of December 31, 2000, the Company has five employees  which includes its
President and Executive Vice President. The Company has no collective bargaining
agreements  with its employees and believes its relations with its employees are
good.


Item 2. Description of Property.

     The Company  maintains its  administrative  offices at 870B Central Avenue,
Hammonton,  New Jersey 08037 on premises  owned by the president of the Company.
As of December 31, 2000, the arrangement between the parties has been rent-free.
In addition, the Company maintains limited offices at H&R Industries, Inc. ("H&R
Industries"),  located at 100 Park Avenue,  Warminster,  Pennsylvania 18974. H&R
Industries provides contract manufacturing and assembly services to the Company.
As of December 31, 2000, the arrangement between the parties has been rent-free.


Item 3. Legal Proceedings.

     In accordance with the agreements  relating to the merger  transaction with
MAS  Acquisition  IX Corp.  ("MAS"),  the Company was required to issue  114,867
shares  of  common  stock  to MAS  shareholders  and make a cash  payment  to an
affiliate of the majority shareholder of MAS in the amount of $50,000. Following
the merger,  the Company  asserted  claims  against the  affiliate  and majority
shareholder  relating to certain  representations  attendant to the  transaction
made by such parties. The claims involved the amount of the common stock and the
cash  payable by the  Company.  During the first  quarter of 2001,  the  parties
settled the disagreement,  pursuant to which the Company agreed to total payment
of  $28,806.47  and  57,280  shares  of  common  stock  to  be  issued  the  MAS
shareholders.

                                        9
<PAGE>

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

     On December  13,  2000,  the  Company's  Board of  Directors  approved  and
recommended  that the  Certificate of  Incorporation  be amended to increase the
Company's  authorized common stock from 5,000,000 shares to 10,000,000 shares. A
consent of  shareholders  holding in excess of a majority of the voting  capital
stock  approving the  amendment  was executed on December 15, 2000.  The Company
filed with the  Securities  and Exchange  Commission a  Preliminary  Information
Statement on December 22, 2000 and a Definitive Information Statement on January
23, 2001 in respect of the action by the majority of shareholders.

PART II

     Item 5. Market Price of and Dividends on the Registrant's Common Equity and
Related Stockholder Matters.

     The  Company's  common  stock has traded on the NASDAQ OTC  Bulletin  Board
since March 6, 2000 under the symbol  "AITX".  Prior to such time, the Company's
common stock traded on the National Quotation Bureau's "pink sheets".

     The table below sets forth the high and low bid prices of the Common  stock
of the  Company as  reported  by NASDAQ.  The  quotations  reflect  inter-dealer
prices,  without  retail  mark-up,   mark-down,   or  commissions  and  may  not
necessarily represent actual transactions. There is an absence of an established
trading  market  for the  Company's  common  stock,  as the  market is  limited,
sporadic and highly volatile. The absence of an active market may have an effect
upon the high and low priced as reported.

2000                                  Low Bid    High Bid
1st Quarter                            $2.25       $2.25
2nd Quarter                             1.50        2.50
3rd Quarter                             1.50        1.875
4th Quarter                             1.4375      1.75

     As of  December  31,  2000,  there  are 848  shareholders  of record of the
Company's  common stock.  Although  there are no  restrictions  on the Company's
ability to declare or pay  dividends,  the Company has not  declared or paid any
dividends since its inception' and does not anticipate  paying  dividends in the
future.


Item 6. Management's Discussion and Analysis.

     The  following  discusses  the  financial  results of the  Company  for the
periods indicated.

                                       10
<PAGE>

Results of Operations

Fiscal year end 2000 compared with fiscal year end 1999.

     The  Company  has been a  development  stage  company for the 2000 and 1999
periods and has not engaged in full scale operations for the periods  indicated.
The limited  revenues  for the  periods  have been  derived  from the sales of a
non-omni-directional product and from contracts with the United States Navy that
relate to the research and potential application of omni-directional  technology
for  military  use.  Consequently,  management  believes  that  the year to year
comparisons   described  below  are  not  indicative  of  future  year  to  year
comparative results.

     Revenues  for fiscal 2000 were $83,464  representing  an increase of $4,162
from  revenues  of $79,302  for the 1999  period.  Revenues  for the 2000 period
consisted of $31,082 in sales of a non  omni-directional  product and $52,383 in
contract  revenues from the United States Navy.  Revenues for 1999  consisted of
$9,354 in sales of a non omni-  directional  product  and  $69,709  in  contract
revenues from the United States Navy.

     Cost of sales for 1999 was $7,453 which  reflects a decrease of $2,630 from
$10,083 in 1999. Cost of sales consists of parts and manufacturing  costs of the
non-omni-directional product.

     General and administrative expenses which includes administrative salaries,
depreciation  and overhead for the 2000 period totaled $756,991 which represents
a decrease of $8,391 from $765,382  incurred in 1999. The slight decrease is due
primarily  to lower  advertising  costs and  professional  fees offset by higher
interest  and  prototype  development  costs and  increases  payroll and related
taxes.

Liquidity and Capital Resources

     Since its inception,  the Company has financed its  operations  through the
private  placement  of  its  common  stock.  During  1999,  the  Company  raised
approximately  $872,268 net of offering costs from the private  placement of its
common stock.  During 2000,  the Company  raised  approximately  $430,858 net of
offering costs from the private placement of its common stock.

     As of December 31, 2000, the Company's working capital was $68,989.

     During  2000,  the Company was  approved by the State of New Jersey for its
technology tax transfer program pursuant to which the Company could sell its net
operating losses and research and development  credits as calculated under state
law. During the fourth quarter of 2000, the Company received $122,561 for losses
and credits that  accrued  through  December 31, 1999.  (see Note 6 to financial
statements)

     The Company  anticipates  that its cash  requirements  for the  foreseeable
future  will be  significant.  In  particular,  management  expects  substantial
expenditures for inventory and product production in anticipation of the rollout
of its  omni-directional  forklift,  which is  projected  to occur in the  third
quarter of 2001. The Company intends to fund its operations through the issuance
of equity and/or debt securities. Presently, the Company is seeking capital from
one or more  funding  sources;  however,  at this time no  arrangement  has been
finalized.  No  assurances  can be given that the Company will be  successful in
obtaining   sufficient   capital  to  fund  the  initiation  of  its  production
activities.  If the  Company  is unable to obtain  sufficient  funds in the near
future,  such event will delay the rollout of its product and likely will have a
material adverse impact on the Company and its business  prospects.  In order to
facilitate  additional funding, on December 15, 2000, a majority of shareholders
approved  the  increase  of its  authorized  capital  stock  of the  Company  to
10,000,000 common shares.

                                       11
<PAGE>

     Fixed assets, net of accumulated depreciation,  totaled $67,219 on December
31, 2000.

Disclosure Regarding Forward Looking Statement and Cautionary Statement.

     Forward  Looking  Statements.  Certain of the statements  contained in this
Annual Report on Form 10-KSB includes  "forward looking  statements"  within the
meaning  of  Section  21E of the  Securities  Exchange  Act of 1934,  as amended
("Exchange  Act").  All  statements  other than  statements of historical  facts
included  in this  Form  10-KSB  regarding  the  Company's  financial  position,
business strategy,  and plans and objectives of management for future operations
and capital  expenditures,  and other matters,  are forward looking  statements.
These forward  looking  statements are based upon  management's  expectations of
future events.  Although the Company believes the expectations reflected in such
forward looking statements are reasonable,  there can be no assurances that such
expectations  will  prove  to  be  correct.   Additional  statements  concerning
important  factors that could cause actual results to differ materially from the
Company's  expectations  ("Cautionary  Statements")  are disclosed  below in the
Cautionary Statements section and elsewhere in this Form 10-KSB. All written and
oral forward looking statements attributable to the Company or persons acting on
behalf of the Company  subsequent  to the date of this Form 10-KSB are expressly
qualified in their entirety by the Cautionary Statements.

     Cautionary Statements.  Certain risks and uncertainties are inherent in the
Company's  business.  In addition to other  information  contained  in this Form
10-KSB, the following Cautionary Statements should be considered when evaluating
the forward looking statements contained in this Form 10-KSB:

     NEED FOR ADDITIONAL  CAPITAL.  The Company will require  additional capital
immediately  and  long  term to meet its  ongoing  operating  requirements.  The
immediate  need includes  funds to complete the final testing of its pilot model
forklifts.  In the  future,  in order to  initiate  full scale  production,  the
Company will require  significant funds for inventory,  manufacturing  costs and
for other  working  capital  needs.  The Company  intends on raising the capital
through a private or public financing of debt or equity.  Presently, the Company
has no  commitment  for any such funding.  No  assurances  can be given that the
Company will be successful in obtaining  such  financing on terms  acceptable to
the Company or on any terms. The inability to obtain such financing could have a
material adverse affect on the Company.

     LACK OF COMMERCIAL PRODUCT.  The Company has developed the pilot version of
its  unique,  omni-directional  forklift.  The  commercial  introduction  of the
product is subject, however, to additional testing and component refinement. Due
to the unique performance  attributes of the forklift, the forklift will undergo
a  series  of  unprecedented  tests  relating  to  these  attributes.   Although
management  is  confident  in the  performance  capabilities  of  the  forklift,
management  has not performed  these tests  separately.  If the forklift  cannot
perform these tests  successfully,  the  commercial  sale of the product will be
delayed.  It also is conceivable that as of result of testing,  the forklift may
be redesigned to lessen certain of the  competitive  advantages of the forklift.
The occurrence of either event may have a negative impact upon the operations of
the Company.

                                       12
<PAGE>

     LACK OF A  DETERMINED  PRODUCT  PRICES  AND IMPACT ON PROFIT  MARGINS.  The
Company  is  assessing  present  and  projected  component  pricing  in order to
establish  a pricing  policy for the ATX Series  forklifts.  The Company has not
completed  its  assessment  as current  prices for certain  forklift  components
reflect  special  development  charges which are expected to be reduced as order
volume for such components increase and as manufacturing  efficiencies  improve.
The Company  intends to price its forklifts so as to maximize  sales yet provide
sufficient  operating margins.  Given the uniqueness of its product, the Company
is uncertain of pricing sensitivity of product in the market. Consequently,  the
pricing  policy for its forklifts may be subject to change,  and actual sales or
operating margins may be less than projected.

     LIMITED OPERATING HISTORY. The Company is a development stage company, and,
together with its predecessor,  has been in operation since 1995. However, since
1995,  the  Company's  operations  have been limited to the  development  of its
omni-directional  products,  and limited revenue has been generated  during this
period. Consequently, its business may be subject to the many risks and pitfalls
commonly experienced by development stage companies.  There can be no assurances
that future operations will be profitable.

     LACK OF  INDICATIONS OF PRODUCT  ACCEPTABILITY.  The success of the Company
will be  dependent  upon  its  ability  to  sell  omni-directional  products  in
quantities  sufficient to yield  profitable  results.  To date,  the Company has
received limited  indications of the commercial  acceptability of certain of its
omni-directional  products.  Accordingly,  no  assurances  can be given that the
Company's  omni-directional  products  can be marketed  and sold in a commercial
manner.

     PROTECTION  OF  INTELLECTUAL  PROPERTY.  The success of the Company will be
dependent,  in part,  upon the  protection of its  proprietary  omni-directional
technology  from  competitive  use.  The patent for the  omni-directional  wheel
expired  in 1990.  The  Company,  however,  has filed for patent  protection  of
certain other aspects of its  omni-directional  wheel, and for features specific
to its  forklift,  although a patent has not been  issued.  In  addition  to the
patent  applications,  the Company  relies on a  combination  of trade  secrets,
nondisclosure  agreements  and  other  contractual  provisions  to  protect  its
intellectual property rights. Nevertheless,  these measures may be inadequate to
safeguard the Company's underlying technology.  If these measures do not protect
the  intellectual  property  rights,  third  parties  could  use  the  Company's
technology,  and  its  ability  to  compete  in  the  market  would  be  reduced
significantly.  In addition,  if the sale of the  Company's  product  extends to
foreign  countries,  the  Company  may not be able to  effectively  protect  its
intellectual property rights in such foreign countries.

                                       13
<PAGE>

     In the  future,  the  Company  may be  required  to protect or enforce  its
patent,  if any, and patent  rights  through  patent  litigation  against  third
parties, such as infringement suits or interference proceedings.  These lawsuits
could be  expensive,  take  significant  time,  and  could  divert  management's
attention  from other business  concerns.  These actions could put the Company's
patents, if any, at risk of being invalidated or interpreted  narrowly,  and any
patent applications at risk of not issuing. In defense of any such action, these
third parties may assert claims against the Company.  The Company cannot provide
any assurance  that it will have  sufficient  funds to vigorously  prosecute any
patent  litigation,  that it will  prevail  in any of these  suits,  or that the
damages or other remedies awarded, if any, will be commercially valuable. During
the course of these suits,  there may be public  announcements of the results of
hearings,   motions  and  other  interim  proceedings  or  developments  in  the
litigation. If securities analysts or investors perceive any of these results to
be negative, it could cause the Company's stock to decline.

     LACK OF  ESTABLISHED  DISTRIBUTION  CHANNELS.  The Company does not have an
established channel of distribution for its forklift product line. It intends on
establishing  a network of  designated  dealers  throughout  the United  States.
Although  the  Company has  received  indications  of interest  from a number of
equipment  distributors,  to  date,  such  indications  have  been  limited.  No
assurances can be given that the Company will be successful in establishing  its
intended dealer network.

     FEATURES OF PREFERRED  STOCK.  The Company has 275,000  shares of preferred
stock  outstanding  that are held by an  affiliate of the  President.  The stock
carries a 10 for 1 voting  right  and a stated  value of $5.00  per  share.  The
preferred stock carries a liquidation  preference  equal to the stated value and
an annual,  cumulative dividend preference of five percent, all to the detriment
of common  shareholders.  In  addition,  the  holder  may elect to  receive  the
dividend in the form of common stock at a deep discount to the market price (see
Item 12 Certain Relationships and Related Transactions).

     MANAGEMENT. The ability of the Company to successfully conduct its business
affairs will be dependent upon the  capabilities  and business acumen of current
management  including  Peter  Amico,  the  Company's   President.   Accordingly,
shareholders  must be willing to entrust all aspects of the business  affairs of
the  Company  to its  current  management.  Further,  the loss of any one of the
Company's  management team could have a material adverse impact on its continued
operation.

     CONTROL  EXERCISED BY MANAGEMENT.  The existing officers and directors will
control  approximately 70% of the shareholder  votes. This control by management
is in the form of common  stock  and  preferred  stock  that has 10 for 1 voting
rights.  Consequently,  management  will control the vote on all matters brought
before shareholders,  and holders of common stock may have no power in corporate
decisions usually brought before shareholders.

     NATURE  OF  BUSINESS/INSURANCE.  The  manufacture,  sale  and use of  omni-
directional  forklifts  and other  mobility or material  handling  equipment  is
generally  considered to be an industry of a high risk with a high  incidence of
serious  personal  injury or property  loss.  In addition,  although the Company
intends to provide on-site safety demonstrations,  the unique, sideways movement
of the forklift may heighten  potential safety risks.  Despite the fact that the
Company intends to maintain  sufficient  liability insurance for the manufacture
and use of its products,  one or more  incidents of personal  injury or property
loss resulting from the operation of its products could have a material  adverse
impact on the business of the Company.

                                       14
<PAGE>

     COMPETITION. Although management believes its product will have significant
competitive advantages to conventional forklifts,  the Company will be competing
in an  industry  populated  by  some  of  the  foremost  equipment  and  vehicle
manufacturers  in the world.  Substantially  all of these companies have greater
financial,  engineering and other resources than the Company.  No assurances can
be given that any  advances  or  developments  made by such  companies  will not
supersede  the  competitive   advantages  of  the  Company's  omni-  directional
forklift.  In addition,  many of the Company's  competitors  have  long-standing
arrangements  with Equipment  distributors  and carry one or more of competitive
products in addition to forklifts.  These  distributors are prospective  dealers
for the Company. It therefore is conceivable that some distributors may be loath
to  enter  into any  relationships  with the  Company  for fear of  jeopardizing
existing relationships with one or more competitors.

     PENNY STOCK  REGULATION.  The Company's common stock may be deemed a "penny
stock" under federal securities laws. The Securities and Exchange Commission has
adopted  regulations  that  define a "penny  stock"  generally  to be any equity
security  that has a market  price of less than  $5.00  per  share,  subject  to
certain   exceptions.   These  regulations   impose  additional  sales  practice
requirements  on any  broker/dealer  who sell  such  securities  to  other  than
established investors and accredited investors. For transactions covered by this
rule, the broker/dealer  must make certain  suitability  determinations and must
receive the  purchaser's  written consent prior to purchase.  Additionally,  any
transaction  may require the  delivery  prior to sale of a  disclosure  schedule
prescribed  by the  Commission.  Disclosure  also  is  required  to be  made  of
commissions payable to the broker/dealer and the registered  representative,  as
well as current quotations for the securities.  Finally,  monthly statements are
required to be sent disclosing recent price information for the penny stock held
in the account of the customers and  information  on the limited market in penny
stocks. These requirements  generally are considered restrictive to the purchase
of such stocks, and may limit the market liquidity for such securities.

Item 7. Financial Statements.

     The Financial  Statements  that  constitute Item 7 of this Annual Report on
Form 10-KSB are included in Item 13 below.


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

     None.

PART III

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

     The directors and executive  officers of the Company,  their ages,  and the
positions  they hold are set forth  below.  The  directors  of the Company  hold
office until the next annual  meeting of  stockholders  of the Company and until
their successors in office are elected and qualified.  All officers serve at the
discretion of the Board of Directors.

                                       15
<PAGE>

OFFICERS AND DIRECTORS

Name                       Age       Title
Peter Amico                57     President and Chairman
D. Barney Harris           40     Executive Vice President and Director
John Watt Jr.              63     Secretary and Director
Frank A. Basile, Esq.      64     Director
James Hudson               56     Director
Daniel H. Luciano, Esq.    49     Director

     Peter  Amico - Mr.  Amico  is the  founder  of the  Company  and  has  been
President and Chairman of the Company and its predecessor since its inception in
April 1995.  Prior to 1995, Mr. Amico was president and majority  shareholder of
Titan  Aviation and Helicopter  Services,  Inc.  ("Titan").  He has an extensive
background  in sales and in structural  design.  His career in sales has spanned
over thirty years and he has held sales positions at Firestone Tire & Rubber and
Union Steel  Products,  Inc. As a consequence of helicopter  accident  involving
Titan, Mr. Amico filed for bankruptcy protection in 1996.

     D. Barney  Harris - Mr.  Harris has been a Director  of the  Company  since
December 1998 and a Vice President  since July 1999. From 1997 to July 1999, Mr.
Harris was employed by UTD, Inc.  Prior to 1997, Mr. Harris was employed by EG&G
as a Senior  Engineer and Manager of the Ocean Systems  Department  where he was
responsible  for the  activities of 45  scientists,  engineers and  technicians.
During this period while  performing  contract  services for the US Navy, he was
principally  responsible for the design of the omni-directional  wheel presently
used by the Company.  Mr.  Harris  received his B.S.M.E.  from the United States
Merchants Marine Academy in 1982.

     John Watt Jr. - Mr. Watt has been  Secretary  and a Director of the Company
since  August  1998.  Since  March 2001,  Mr.  Watt has  retired  from full time
employment  and  currently  is  performing  limited  consulting  services to the
Company.  From 1990 to the March 2001, he has been the President of Watt-Bollard
Associates,  Inc., a manufacturers'  representative sales agency located in Fort
Washington, Pennsylvania.

     James  Hudson - Mr.  Hudson has been a Director  of the  Company  since May
1998. From 1980 to present, he has been President of Grammer,  Dempsey & Hudson,
Inc., a steel distributor located in Newark, New Jersey.

     Frank A. Basile, Esq. - Mr. Basile has been a Director of the Company since
April  1999.  Mr.  Basile  has  been a  practicing  attorney  since  1963 and is
president of the law firm Basile & Testa  located in Vineland,  New Jersey.  The
firm was one of seven law firms selected by the State of New Jersey to represent
the State in a class action lawsuit against the tobacco industry.

     Daniel H.  Luciano,  Esq. - Mr.  Luciano has been a Director of the Company
since March 2000. Mr. Luciano has been a practicing  attorney since 1977 with an
emphasis on corporate and securities law.

                                       16
<PAGE>

Item 10. Executive Compensation.

     The compensation  for all directors and officers  individually for services
rendered to the Company for the fiscal years ended December 31, 1999 and 2000 is
set forth in the following table:

SUMMARY COMPENSATION
                                                     Long Term
                        Annual Compensation          Compensation Awards (4)
                      ___________________________    _______________________
Name and
Principal                Salary    Bonus    Other    Stock Options #
Position          Year     ($)      ($)      ($)
--------          ----   ------    -----    -----    ----------------
Peter Amico(1)    2000 $75,000(2)  $-0-     $-0-         100,000
Chairman and      1999 $84,065(2)   -0-     $6,500(3)     25,000
President
------------------------------------------------------------------
 (1). The Company and Mr. Amico are parties to an employment agreement governing
      Mr. Amico's  employment with the Company (see below). The Company became a
      reporting  company  during fiscal 1999,  and  disclosure is made for years
      1999 and 2000.

 (2). Mr. Amico's annual salary under his employment agreement for 1999 and 2000
      is $75,000.  In 2000,  $65,538 was paid with the balance deferred to 2001.
      In 1999, the amount includes an amount accrued from 1998.

 (3). During 1999, Mr. Amico was paid a finder's fee in connection  with certain
      private placements.

 (4)  The  Company  has no Long Term  Compensation  Awards  other that the stock
      options indicated.

     The Company and Peter  Amico,  as  President,  have  entered into a written
employment  agreement  for a period from April 1997 to June 2000.  The agreement
was extended to December 31, 2000. Pursuant to the agreement, Mr. Amico receives
a salary of $75,000 per year for fiscal 1999 through June 2000. In addition, the
agreement  provides Mr.  Amico with stock  options to acquire up to a maximum of
50,000 shares per annum.  Of the options,  10,000 shares are  exercisable  for a
total  consideration  of a $1.00  beginning  year three of the contract,  25,000
shares are  exercisable  at 30% of the lowest price paid for the stock in the 30
day period preceding  exercise for each year of the contract,  and 15,000 shares
are  exercisable  at 15% of the  lowest  price  paid for the stock in the 30 day
period preceding exercise beginning year three of the contract.

     The Company and D. Barney Harris,  as Vice  President,  have entered into a
written  employment  agreement  for  period  of  five  years.  Pursuant  to  the
agreement,  Mr. Harris  receives an annual salary of $75,000,  subject to annual
review by the Company.  In addition,  Mr.  Harris is entitled to receive  annual
stock options not exceeding 25,000 shares of common stock, of which 2,500 shares
are exercisable for a total  consideration  of $1.00,  10,000 are exercisable at
35% of the  lowest  price  paid  for the  stock in the 30 day  period  preceding
exercise for each year of the contract,  and 12,500 is  exercisable  at 17.5% of
the lowest price paid for the stock in the 30 day period preceding  exercise for
each year of the contract.

                                       17
<PAGE>

Option Grants in Fiscal Year 2000


                       % of Total
                       Options to    Exercise or  Market price
             Options   Employee in      Base       on date of
Name         Granted   Fiscal Year   Price ($/sh)     Grant     Expiration Date

Peter Amico  50,000     100%              (1)            (1)         None
President
And Chairman

 (1). During 2000,  pursuant to his  employment  agreement,  Mr. Amico  received
      options for,  10,000 shares  exercisable  for a total  consideration  of a
      $1.00 or $0.0001 per share, 25,000 shares exercisable at 30% of the lowest
      price  paid for the stock in the 30 day  period  preceding  exercise,  and
      15,000  shares  exercised 15% of lowest price paid for the stock in the 30
      day  period  preceding  exercise.  Market  price  on date of  grant in not
      provided due to lack of a specific grant date.


Aggregate Option Exercises
In Last Fiscal Year and FY-End Option Values


                                                                    Value of
                                             # of Securities       Unexercised
                                               Unexercised        In-the-Money
                                                Options at         Options at
                   Shares                        FY-End(#)         FY-End($)at
                Acquired On      Value         Exercisable/       Exercisable/
Name            Exercise (#)   Realized       Unexercisable     Unexercisable(1)

Peter Amico      100,000      $201,624(1)          0/0                $0/$0
President and
Chairman

 (1). Options for, 10,000 shares were exercised for a total  consideration  of a
      $1.00 or $0.0001  per share  (market  price on  exercise  date was $2.25),
      50,000 shares were  exercised at $0.84375 per share,  or 30% of the lowest
      price paid for the stock in the 30 day period preceding exercise,  (market
      price on exercise date was $2.25),  25,000 shares were  exercised at $0.45
      per share,  or 30% of lowest price paid for the stock in the 30 day period
      preceding exercise, (market price on exercise date was $2.875), and 15,000
      shares were exercised at $0.225 per share, or 15% of lowest price paid for
      the  stock  in the 30 day  period  preceding  exercise,  (market  price on
      exercise date was $2.875).

Compensation of Directors
-------------------------
     The Company's directors are compensated at the rate of $250 per meeting and
are  reimbursed for expenses  incurred by them in connection  with the Company's
business.  In  addition,  each  director  receives  per year a stock  option  to
purchaser 5,000 shares of common stock exercisable at $0.50 per share.

     Other than as described  above, the Company does not have any other form of
compensation  payable to its officers or  directors,  including any stock option
plans,  stock  appreciation  rights,  or long term incentive plan awards for the
periods indicated in the table.

                                       18
<PAGE>

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

     The following table identifies as of March 31, 2001  information  regarding
the current directors and executive officers of the Company and those persons or
entities who  beneficially  own more than 5% of its common  stock and  Preferred
Stock of the Company:

                                                 Percentage of   Percentage of
                  Common Stock    Preferred      Common Stock    Preferred Stock
                  Beneficially    Voting Stock   Beneficially    Beneficially
Name(1)             Owned(2)      Rights(3)      Owned(2)        Owned(3)
--------------------------------------------------------------------------------
Peter Amico
President and
Chairman           1,839,558(4)    2,750,000(5)     35.2%              100%

D. Barney Harris      92,400(6)         -0-          1.8%               -0-
Vice President and
Director

Frank Basile         117,225(7)         -0-          2.2%               -0-
Director

James Hudson          60,800(8)         -0-          1.2%               -0-
Director

John Watt Jr.        104,000(9)         -0-          2.1%               -0-
Secretary and
Director

Daniel H. Luciano     26,914(10)        -0-          0.5%               -0-
Director

All directors      2,240,897(11)   2,750,000        42.7%              100%
and executive
officers as a
group (5 persons)
-----------------
 (1). The address of each beneficial owner is the address of the Company.
 (2). Based on  5,208,288  shares of common  stock  outstanding  as of March 31,
      2001,  except that shares of common stock  underlying  options or warrants
      exercisable within 60 days of the date hereof are deemed to be outstanding
      for purposes of calculating the beneficial  ownership of securities of the
      holder of such options or warrants.
 (3). Based upon  275,000  outstanding  shares of  preferred  stock after giving
      effect to the 10 for 1 voting rights.
 (4)  Includes  1,714,558 shares held by Arcon Corp., a corporation wholly owned
      by Mr. Amico  ("Arcon") , 100,000  shares held by Mr. Amico  individually,
      stock  options  for 25,000  shares  exercisable  pursuant  to Mr.  Amico's
      employment agreement, however, excludes common stock that may be issued to
      Arcon as a dividend on the preferred stock.
 (5). Represents shares held by Arcon.
 (6). Represents shares held by Mr. Harris individually.
 (7). Includes  90,000  shares  held  individually,  7,225  shares  held  by  an
      affiliate,  10,000 shares held by Mr. Basile's  spouse,  and 10,000 shares
      issuable upon exercise of director's options for years 2000 and 2001.

                                       19
<PAGE>

 (8). Includes  11,300  shares  held  individually,  44,500  shares  held  by an
      affiliate and 5,000 shares  issuable  upon exercise of director's  options
      for 2001.
 (9). Includes  100,000  shares held jointly with his wife, and 4,000 held by an
      affiliate.
 (10).Includes  21,914  shares  held  individually,  and 5,000  shares of common
      stock issuable upon exercise of director's options for 2001.
 (11). Includes (4),(6),(7),(8),(9), and (10).

Item 12. Certain Relationships and Related Transactions.

     Arcon Cop.,  a  corporation  wholly  owned by the  Company's  chairman  and
president,  owns 275,000 shares of preferred stock of the Company. Each share of
Preferred  Stock  is  entitled  to 10  voting  rights  on all  matters  on which
shareholders  are entitled to vote.  The preferred  stock has a stated value per
share of $5.00 and an annual dividend per share equal to 5% of the stated value.
Dividends are  cumulative and the holder has a right during any quarter to waive
any cash  dividend  and  receive the  dividend in the form of common  stock at a
price per share equal to 30% of the lowest private  offering or trading price of
the common stock.  The  preferred  stock is not  convertible  into common stock,
however, has a preference over common stockholders upon liquidation equal to the
stated value per share. At December 31, 1998,  unpaid dividends on the preferred
stock totaled $92,114. An additional $68,750 in dividends accrued during each of
the years 1999 and 2000.  During 1999,  the holder  received  cash  dividends of
$40,498, and dividends in the form of 305,737 shares of common stock, which were
valued at $120,366.  During 2000, the holder  received  dividends in the form of
95,558  shares of common  stock,  which were valued at $56,751.  At December 31,
2000, $11,999 in dividends remains unpaid.

     As of December  31,  1999,  a loan in the amount of  $20,589.59  from Arcon
Corp. is  outstanding.  The loan is due on demand and bears  interest at 12%. In
July 2000,  Arcon Corp.  purchased  33,334 shares of common stock at a price per
share of $1.500 for a total consideration of $50,001.

     Mrs.  Patricia  Amico,  the  wife  of the  Company's  President,  performed
services  to the  Company  during  1999 and 2000.  The  amount of such  services
totaled $8,099 and $9,930.  Mr.  Timothy Smith,  the son in law of the Company's
President, performed services to the Company during 1999 and 2000. The amount of
such services totaled $17,236 and $4,644.

     Mr.  John Watt,  a director of the  Company,  received  commissions  during
fiscal  1999 and 2000  from  certain  suppliers  and  fabricators  that  conduct
business with the Company.  The amount of such commission for each year was less
that $10,000.

     Mr. Frank  Basile,  a director of the  Company,  is a partner of a law firm
that  performed  legal  services to the Company during fiscal 1999 and 2000. The
billing amount for such services for each year was less than $10,000.

     Mr. Daniel Luciano, a director of the Company, performed legal services for
the Company during fiscal 2000. The billing amount of such services for the year
approximated $20,000.

                                       20
<PAGE>

     During 2000, each director of the Company, other than Mr. Amico, received a
stock  option to acquire  5,000  shares of common  stock at a price per share of
$0.50.

PART IV

Item 13. Exhibits and reports on Form 8-K.
(a)(1). Exhibits

EXHIBIT INDEX
 3(i)(a). Certificate of  Incorporation  of AirTrax,  Inc. dated April 11, 1997.
          (Incorporated  by reference to the  Company's  Form 8-K filed with the
          Securities  and Exchange  Commission on November 19,  1999).  3(i)(b).
          Certificate of Amendment to Certificate of  Incorporation  of AirTrax,
          Inc.  dated  November  11,  1999.  (Incorporated  by  reference to the
          Company's Form 8-K filed with the  Securities and Exchange  Commission
          on November 19, 1999).

 3(i)(c). Certificate  of  Correction of the Company dated April 30, 2000 (filed
          herewith).

 3(i)(d). Certificate of Amendment of Certificate of  Incorporation  dated March
          19, 2001 (filed herewith).

 3(ii)(a).Amended  and  Restated  By-Laws  of  the  Company.   (Incorporated  by
          reference  to the  Company's  Form 8-K filed with the  Securities  and
          Exchange Commission on November 19, 1999).

 10(i)    Agreement and Plan of Merger by and between MAS  Acquisition  IX Corp.
          and AirTrax,  Inc. dated November 5, 1999.  (Incorporated by reference
          to the  Company's  Form 8-K filed  with the  Securities  and  Exchange
          Commission on January 13, 2000).

 10(ii).  Employment  agreement  dated  April 1, 1997 by and between the Company
          and Peter Amico.  (Incorporated  by reference  to the  Company's  Form
          8-K/A filed with the Securities and Exchange Commission on January 13,
          2000).

 10(iii). Employment  agreement  dated July 12, 1999, by and between the Company
          and D. Barney Harris. (Incorporated by reference to the Company's Form
          8-K/A filed with the  Securities  and Exchange  Commission on November
          19, 1999).

 99(i)    Consulting  Agreement by and between MAS Financial  Corp. and AirTrax,
          Inc.  dated  October  26,  1999.  (Incorporated  by  reference  to the
          Company's Form 8-K filed with the  Securities and Exchange  Commission
          on November 19, 1999).

(b). Reports on Form 8-K.

          Not Applicable

                                       21
<PAGE>

                                   SIGNATURES

     In accordance  with Section 13 or 15(d) of the  Securities  Exchange Act of
1934,  the  registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.

AirTrax, Inc.

                                            April 16, 2001
/s/ Peter Amico
---------------
    Peter Amico
    Chairman and
    Principal Executive Officer

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


/s/Peter Amico                               April 16, 2001
--------------
   Peter Amico
   Director

/s/D. Barney Harris                          April 16, 2001
-------------------
   D. Barney Harris
   Director

/s/John Watt                                 April 16, 2001
------------
   John Watt
   Director

/s/Daniel H. Luciano                         April 16, 2001
--------------------
   Daniel H. Luciano
   Director


                                       22
<PAGE>



                                  AIRTRAX, INC.

                          (A Development Stage Company)

                              FINANCIAL STATEMENTS

                                DECEMBER 31, 2000









                                    CONTENTS






                                                                         Page

Accountant's Audit Report                                                  1

Balance Sheets                                                             2

Statements of Operations                                                   3

Statements of Changes in Stockholder's Equity                              4

Statements of Cash Flows                                                   5

Notes to Financial Statements                                              6




                                       F-1

<PAGE>



Board of Directors
AirTrax, Inc.

     I  have  audited  the  accompanying  balance  sheet  of  AirTrax,  Inc.  (a
development  stage company) as of December 31, 2000, and the related  statements
of operations,  changes in  stockholders'  equity,  and cash flows for the years
ended  December  31,  2000  and  1999.   These  financial   statements  are  the
responsibility  of the Company  management.  My  responsibility is to express an
opinion on these financial statements based on my audit.

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

     In my opinion,  the financial  statements referred to above present fairly,
in all material respects, the financial position of AirTrax, Inc. as of December
31,  2000,  and the results of its  operations  and its cash flows for the years
ended  December  31,  2000  and  1999  in  conformity  with  generally  accepted
accounting principles.





                                                      ROBERT G. JEFFREY, CPA





March 30, 2001
Wayne, New Jersey
                                       -1-
<PAGE>


                                  AIRTRAX, INC.
                          (A Development Stage Company)
                                 BALANCE SHEETS
                                December 31, 2000
<TABLE>
<CAPTION>


                                     ASSETS
<S>                                                               <C>                   <C>
Current Assets
         Cash                                                     $      23,663
         Accounts receivable                                             34,382
         Inventory                                                      764,875
         Prepaid expenses                                                 6,938
         Deferred tax asset                                              61,285
                                                                  --------------
                  Total current assets                                                   $    891,143

Fixed Assets
         Office furniture and equipment                                  35,303
         Automotive equipment                                            16,915
         Shop equipment                                                  20,660
         Casts and tooling                                               76,687
                                                                  --------------
                                                                        149,565
         Less, accumulated depreciation                                  82,346
                                                                  --------------
                  Net fixed assets                                                             67,219

Other Assets
         Patents - net                                                   45,331
         Utility deposits                                                    65
                                                                  --------------
                  Total other assets                                                           45,396
                                                                                         --------------
              TOTAL ASSETS                                                               $  1,003,758
                                                                                         ==============


                      LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities
         Accounts payable                                         $     763,210
         Accrued liabilities                                             35,630
         Stockholder note payable                                        23,314
                                                                  --------------
                  Total current liabilities                                              $    822,154
Stockholders' Equity
         Common stock - authorized, 5,000,000 shares without
            par value; issued and outstanding - 5,040,621 and         2,408,549
         Preferred stock - authorized, 500,000 shares without
            par value; 275,000 issued and outstanding                    12,950
         Deficit accumulated during the development stage            (2,032,943)
         Deficit prior to development stage                            (206,952)
                                                                  --------------
                  Total stockholders' equity                                                  181,604
                                                                                         --------------
              TOTAL LIABILITIES AND
                STOCKHOLDER'S EQUITY                                                     $  1,003,758
                                                                                         ==============
</TABLE>

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

                                       -2-
<PAGE>

                                  AIRTRAX, INC.
                          (A Development Stage Company)
                      STATEMENTS OF OPERATIONS and DEFICIT
                      ACCUMULATED DURING DEVELOPMENT STAGE
                 For the Years Ended December 31, 2000 and 1999
<TABLE>
<CAPTION>


                                                                                    May 19, 1997
                                                                                  (Date of Inception)
                                                   YEAR 2000          YEAR 1999   to December 31, 2000
                                                -------------      -------------  ---------------------
<S>                                             <C>                <C>            <C>
SALES                                           $    83,464        $    79,302          $      229,835

COST OF GOODS SOLD                                    7,453             10,083                  63,511
                                                -------------      -------------  ---------------------
                  Gross Profit                       76,011             69,219                 166,324

OPERATING AND ADMINISTRATIVE EXPENSES               734,230            757,630               2,125,631

OPERATING LOSS                                     (658,219)          (688,411)             (1,959,307)
                                                -------------      -------------  ---------------------
OTHER INCOME AND (EXPENSE)
         Interest expense                           (22,761)            (7,752)                (38,850)
         Other income                                    26             10,548                  12,261
                                                -------------      -------------  ---------------------
NET LOSS BEFORE INCOME TAXES                       (680,954)          (685,615)             (1,985,896)
                                                -------------      -------------  ---------------------
INCOME TAX BENEFIT (STATE):
         Current                                     61,285                  -                  61,285
         Prior years                                122,288                  -                 122,288
                                                -------------      -------------  ---------------------
                  Total Benefit                     183,573                  -                 183,573
                                                -------------      -------------  ---------------------
LOSS ACCUMULATED DURING
         DEVELOPMENT STAGE                        $(497,381)       $  (685,615)         $   (1,802,323)
                                                =============      =============
PREFERRED STOCK DIVIDENDS DURING
         DEVELOPMENT STAGE                                                                    (230,620)
                                                                                  ---------------------
DEFICIT ACCUMULATED DURING DEVELOPMENT
         STAGE                                                                              (2,032,943)
                                                                                  =====================
NET LOSS PER SHARE - Basic and Diluted                $(.12)             $(.18)
                                                =============      =============
</TABLE>






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

                                       -3-
<PAGE>

                                  AIRTRAX, INC.
                          (A Development Stage Company)
                  STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
                      For the Year Ended December 30, 2000
<TABLE>
<CAPTION>


                                         COMMON               PREFERRED         DEFICIT ACCUMULATED   DEFICIT PRIOR
                                         STOCK                  STOCK               DURING                 TO
                                    Shares     Amount       Shares     Amount   DEVELOPMENT STAGE     DEVELOPMENT STAGE       TOTAL
                                 ---------------------------------------------------------------------------------------------------
<S>                              <C>         <C>           <C>       <C>        <C>                   <C>                 <C>
Balance, December 31, 1998       3,610,095   $  848,301    275,000   $  12,950  $     (632,332)       $     (206,952)     $  21,967

Sales of stock under Rule
 504, Regulation D, offering       614,552      872,268                                                                     872,268
Shares issued as dividend on
 Preferred stock                   305,737      120,366                               (120,366)                                   -

Shares issued for services          18,629       17,238                                                                      17,238

Net loss for the period                                                               (685,615)                            (685,615)

Cash dividends on preferred stock                                                     (40,498)                              (40,498)
                                 ---------------------------------------------------------------------------------------------------

Balance, December 31, 1999       4,549,013    1,858,173    275,000      12,950     (1,478,811)              (206,952)       185,360

Sales of stock under Rule
 504, Regulation D, offering       330,719      430,858                                                                     430,858

Shares issued as dividend on
 Preferred stock                    95,558       56,751                               (56,751)                                    -

Shares issued for services          65,331       62,767                                                                      62,767

Net loss for the period                                                              (497,381)                             (497,381)
                                 ---------------------------------------------------------------------------------------------------

Balance, December 31, 2000       5,040,621   $2,408,549    275,000   $  12,950  $  (2,032,943)        $     (206,952)     $ 181,604
                                 ===================================================================================================
</TABLE>

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

                                       -4-
<PAGE>

                                  AIRTRAX, INC.
                          (A Development Stage Company)
                            STATEMENTS OF CASH FLOWS
                 For the Years Ended December 31, 2000 and 1999
<TABLE>
<CAPTION>

                                                                                                      May 19, 1997
                                                                                                 (Date of Inception)
                                                              Year 2000         Year 1999        to December 31, 2000
                                                              -----------       ----------       ---------------------
<S>                                                           <C>               <C>              <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net Loss                                                      $(497,381)        $(685,615)       $     (1,802,323)
Adjustments to reconcile net income to net cash
   consumed by operating activities:
         Depreciation and amortization                           33,191            30,740                 104,622
         Value of common stock issued for services               62,767            17,238                  80,802
         Accrual of deferred tax benefit                        (61,285)                                  (61,285)
         Changes in current assets and liabilities:
             Increase in accounts payable and
                 accrued liabilities                            256,424           421,967                 798,840
            Decrease (Increase) in prepaid expense                    -             2,649                  (7,003)
            Decrease (increase) in accounts receivable           37,071           (68,271)                (34,383)
             Increase in inventory                             (253,350)         (488,553)               (764,875)
                                                              -----------       ----------       ---------------------
                  Net Cash Consumed By
                       Operating Activities                    (422,563)         (769,845)             (1,685,605)

CASH FLOWS FROM INVESTING ACTIVITIES
Acquisitions of equipment                                        (5,460)          (63,373)               (149,564)
Additions to patent cost                                         (1,138)           (4,981)                (67,607)
                                                              -----------       ----------       ---------------------
                  Net Cash Consumed By
                        Investing Activities                     (6,598)          (68,354)               (217,171)

CASH FLOWS FROM FINANCING ACTIVITIES
Net proceeds of common stock sales                              430,858           872,268               1,943,678
Proceeds of sales of preferred stock                                  -                 -                  12,950
(Repayment) proceeds of stockholder loans                       (26,686)           50,000                  23,314
Preferred stock dividends paid in cash                                -           (40,498)                (53,503)
                                                              -----------       ----------       ---------------------
                  Net Cash Provided By
                      Financing Activities                      404,172           881,770               1,926,439
                                                              -----------       ----------       ---------------------
                  Net Increase (Decrease) In Cash               (24,989)           43,571                  23,663
         Balance at beginning of period                          48,652             5,081                       -
                                                              -----------       ----------       ---------------------
         Balance at end of period                             $  23,663         $  48,652        $         23,663
                                                              ===========       ==========       =====================

</TABLE>

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

                                       -5-
<PAGE>

                                  AIRTRAX, INC.
                          (A Development Stage Company)
                          NOTES TO FINANCIAL STATEMENTS
                                December 31, 2000



1.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization Of Company

     The Company was formed  April 17, 1997.  On May 19, 1997,  it merged with a
predecessor which had initiated and advanced the development of omni-directional
technology.  On November 5, 1999,  the Company  merged with MAS  Acquisition  IX
Corp.  ("MAS"),  a reporting  company under Federal  securities law. Pursuant to
this merger agreement,  the Company assumed the reporting status of MAS. In both
merger  transactions,  the  Company  was the  surviving  entity.  For  financial
accounting purposes,  the reverse merger with MAS was accounted for as a pooling
of interests.

Business

     The  Company  has  designed  a  forklift  vehicle  using   omni-directional
technology obtained under a contract with the United States Navy Surface Warfare
Center in Panama City, Florida. The right to exploit this technology grew out of
a Cooperative  Research and  Development  Agreement  with the Navy.  Significant
resources have been devoted during the past two years to the  construction  of a
prototype of this  omni-directional  forklift  vehicle.  It is expected to be in
full  commercial  production  during the third quarter of 2001. At that time, it
will be offered to industrial users.

     The Company has also  developed a traditional  helicopter  ground  handling
machine which has been marketed by the Company on a limited basis.

Development Stage Accounting

     The  Company is a  development  stage  company,  as  defined  in  Financial
Accounting  Standards  (FAS)  Statement  No. 7.  Generally  accepted  accounting
principles  that  apply  to  established   operating   enterprises   govern  the
recognition of revenue by a development  stage enterprise and the accounting for
costs and expenses. From inception to December 31, 2000, the Company has been in
the  development  stage and all its efforts have been devoted to the development
of a forklift  vehicle  with  omni-directional  technology  that is suitable for
market.  Only small amounts of revenue have been realized  through  December 31,
2000.

Basis of Presentation

     The Company has  incurred  losses from  inception  to December  31, 2000 of
$1,802,323.  Activities have been financed  primarily through private placements
of equity  securities.  The Company may need to raise additional capital through
the issuance of debt or equity securities to fund its operations.


                                       -6-

<PAGE>

                                  AIRTRAX, INC.
                          (A Development Stage Company)
                          NOTES TO FINANCIAL STATEMENTS
                                December 31, 2000


1.       continued

Cash

     For purposes of the  statements  of cash flows,  the Company  considers all
short-term debt securities  purchased with a maturity of three months or less to
be cash equivalents.

Inventory

     Inventory  consists  principally of component  parts and supplies which are
being used to assemble forklift vehicles. Inventories are stated at the lower of
cost (determined on a first in-first out basis) or market.

Fixed Assets

     Fixed  assets are  recorded  at cost.  Depreciation  is  computed  by using
accelerated  methods,  with useful lives of seven years for  furniture  and shop
equipment and five years for computers and automobiles.

Income Taxes

     Deferred  income  taxes are  recorded  to reflect the tax  consequences  or
benefits  to future  years of  temporary  differences  between  the tax bases of
assets and liabilities, and of net operating loss carryforwards.

Intangible Assets

     Patents

     The Company  incurred  costs to acquire and protect  certain patent rights.
     These costs were  capitalized  and are being  amortized over a period of
     fifteen (15) years on a straight-line basis.

     Prototype Equipment

     The cost of developing  and  constructing  the  prototype  omni-directional
     helicopter  handling vehicle and the omni-directional forklift  vehicle  is
     expensed as incurred.

Use of Estimates

     The  preparation  of financial  statements  in  conformity  with  generally
accepted  accounting  principles  requires  management  to  make  estimates  and
assumptions  that affect certain  reported amounts and disclosures of contingent
assets and liabilities at the date of the financial  statements and the reported
amounts of revenues and expenses  during the reporting  periods.  Actual results
could differ from those estimated.

                                       -7-
<PAGE>

                                  AIRTRAX, INC.
                          (A Development Stage Company)
                          NOTES TO FINANCIAL STATEMENTS
                                December 31, 2000


1.       continued

Fair Value of Financial Instruments

     The carrying amounts of the Company's financial instruments,  which include
cash equivalents, accounts receivable, accounts payable and accrued liabilities,
approximate their fair values at December 31, 2000.

Advertising Costs

     The  Company  expenses  advertising  costs when the  advertisement  occurs.
Advertising costs amounted to $28,440 in 2000 and $81,021 in 1999.

Segment Reporting

     Management treats the operations of the Company as one segment.

Revenue Recognition

     Revenue is realized from product sales. Recognition occurs upon delivery.

Common Stock

     Common  stock is often  issued  in return  for  product,  services,  and as
dividends on the preferred  stock.  These issuances are assigned values equal to
the value of the product or service  received or the market  value of the common
stock, with appropriate discounts, whichever is most clearly evident.




                                       -8-

<PAGE>

                                  AIRTRAX, INC.
                          (A Development Stage Company)
                          NOTES TO FINANCIAL STATEMENTS
                                December 31, 2000


2.       RELATED PARTY TRANSACTIONS

     During the year 2000,  95,558  shares of common  stock of the Company  were
issued  in lieu of cash  dividends  on the  preferred  stock  in the  amount  of
$56,751,  as permitted by the terms of the preferred stock issue.  The preferred
stock is wholly owned by the majority shareholder (see Note 4 for description of
the preferred stock). This majority shareholder is a corporation wholly owned by
the president of the Company.

     A total of 129,999  shares were issued to the President and Vice  President
of the Company pursuant to their  respective  employment  agreements  yielding a
total of $60,851.  Three  non-employee  directors  each received 5,000 shares of
common stock upon exercise of their director options yielding a total of $7,500.
In addition, the majority stockholder purchased 33,334 shares for $50,001 during
the 2000 period. The majority shareholder  corporation made loans to the Company
during 1999 and 2000.  The related notes accrued  interest at 12%, which totaled
$5,519 for the year 2000.  The unpaid  balance of  principal  and  interest  was
$23,314 at December 31, 2000, and was due on demand.

     During  2000,  a board  member  received  5,539  shares of common  stock in
exchange for professional services rendered to the Company valued at $9,000, and
an affiliate of a board member received 2,097 shares of common stock in exchange
for professional services rendered to the Company valued at $6,208.

     Since June 1999, the Company has made its headquarters in premises owned by
the Company president, which to date has been rent free.

3.       PRIVATE PLACEMENT OFFERINGS

     The Company  conducted  private  placement  offerings  during  2000.  These
offerings  were exempt under the  Securities  Act of 1933,  as amended,  and the
rules and  regulations  promulgated  thereunder.  A total of  330,719  shares of
common stock was sold under the offerings resulting in net proceeds of $430,858.





                                       -9-
<PAGE>

                                  AIRTRAX, INC.
                          (A Development Stage Company)
                          NOTES TO FINANCIAL STATEMENTS
                                December 31, 2000


4.       PREFERRED STOCK

     The Company is  authorized  to issue  500,000  shares of  preferred  stock,
without  par value.  At  December  31,  2000,  275,000 of these  shares had been
issued.  Each of these shares  entitles the holder to a 5%  cumulative  dividend
based on a $5 per share stated value. If sufficient cash is not available, or at
the option of the  shareholder,  these dividends may be paid in common stock. If
payment is in stock, it is to be valued at a price  calculated at thirty percent
of the lower of the last price traded in either a public or private  transaction
during the  applicable  quarter.  This issue of preferred  stock also provides a
voting right of 10 votes for each share.  The holder of this preferred  stock is
the majority shareholder of the Company,  which is a corporation wholly owned by
the Company's President and Chairman.

     At December 31,  1998,  unpaid  dividends on this issue of preferred  stock
totaled $92,114.  An additional  $68,750 in dividends accrued during each of the
years 1999 and 2000. During 1999, the holder received cash dividends of $40,498,
and dividends in the form of 305,737  shares of common stock,  which were valued
at $120,366.  During 2000, the holder  received  dividends in the form of 95,558
shares of common  stock,  which were valued at $56,751.  At December  31,  2000,
$11,999 in dividends remains unpaid.

     The  characteristics  of the remaining  225,000 preferred shares authorized
have not been specified.












                                      -10-

<PAGE>

                                  AIRTRAX, INC.
                          (A Development Stage Company)
                          NOTES TO FINANCIAL STATEMENTS
                                DECEMBER 31, 2000


5.       LOSS PER SHARE

     Basic and  diluted  loss per share is based on the net loss  divided by the
weighted average number of common shares outstanding during the period.

                                                          Year Ended  2000
                                                          ----------------
<TABLE>
<CAPTION>

                                                               Weighted
                                                Income       Average Shares     Per Share
                                                (Loss)        Outstanding         Amount
                                              ----------     --------------     ----------
<S>                                           <C>            <C>                <C>
Net Loss                                      $(497,381)
Adjustment for preferred stock dividends        (68,750)


Loss allocable to common shareholders -
         Basis and Diluted                    $(566,131)       4,746,637        $  (.12)
                                              ==========     ==============     ==========

                                                          Year Ended  1999
                                                          ----------------

Net loss                                      $(685,615)
Adjustment for preferred stock dividends        (68,750)

Loss allocable to common shareholders -
         Basis and Diluted                    $(754,365)       4,239,465        $  (.18)
                                              ==========     ==============     ==========

</TABLE>













                                      -11-

<PAGE>

                                  AIRTRAX, INC.
                          (A Development Stage Company)
                          NOTES TO FINANCIAL STATEMENTS
                                DECEMBER 31, 2000

6.       INCOME TAXES

     The Company has  experienced  losses  each year since its  inception.  As a
result,  it has incurred no Federal income tax. The Internal Revenue Code allows
net operating  losses (NOL's) to be carried  forward and applied  against future
profits for a period of twenty years.  At December 31, 2000, the Company had NOL
carryforwards  of  $1,885,253  available  for Federal taxes and $586,773 for New
Jersey taxes.  The potential tax benefit of the state NOL's has been  recognized
on the books of the Company; the potential benefit of the Federal NOL's has been
offset by a valuation allowance.  If not used, these Federal  carryforwards will
expire as follows:

                             2017      $129,092
                             2018       486,799
                             2019       682,589
                             2020       586,773

     During the year 2000,  the  Company  realized  $122,561  from the sale,  as
permitted  by New Jersey  law,  of its  rights to use the New  Jersey  NOL'S and
research and  development  credits that had accrued  through  December 31, 1999.
These  potential  New Jersey  offsets  are,  thus,  no longer  available  to the
Company.

     Under Statement of Financial  Accounting  Standards No. 109, recognition of
deferred  tax assets is  permitted  unless it is more  likely  than not that the
assets will not be  realized.  The Company has  recorded  deferred tax assets as
follows:

                                       Current         Non-current        Total
                                       ----------------------------------------
    Deferred Tax Assets                $243,418        $441,483        $684,901
    Valuation Allowance                 182,133         441,483         623,616
                                       ----------------------------------------
                   Balance Recognized  $ 61,285       $      -         $ 61,285
                                       ========================================

     The entire  balance of the valuation  allowance  relates to Federal  taxes.
Since state tax benefits for years prior to 2000 were  realized  during the year
2000,  no reserve  is deemed  necessary  for the  benefit of state tax losses of
2000.  The state tax benefit  recognized  in 2000 is composed of the proceeds of
sale of benefits of prior years,  plus benefits expected from current losses, as
follows:

                   Proceeds of sale of prior amounts       $122,288
                   Current benefits                          61,285
                                                           ---------
                                                           $183,573
                                                           =========


                                      -12-

<PAGE>

     AIRTRAX,  INC. (A Development Stage Company) NOTES TO FINANCIAL  STATEMENTS
DECEMBER 31, 2000


7.       RENTALS UNDER OPERATING LEASES

     Office  equipment is leased  under an operating  lease that expires in June
2003.  The following is a schedule of future minimum  rental  payments  required
under the operating lease:

                           Year Ending
                           December 31,          Amount
                           ------------        --------
                              2001             $  6,857
                              2002                6,857
                              2003                2,857
                                               --------
                                               $ 16,571
                                               ========

     Rent expense amounted to $7,036 in 2000 and $5,743 in 1999.


8.       SUPPLEMENTAL DISCLOSURES OF CASH FLOWS INFORMATION

     Cash paid for interest and income taxes is presented below:

                                    2000           1999
                                 -------         ------

         Interest                $22,761         $7,752
         Income taxes                200            200

     There were no noncash investing  activities during either 2000 or 1999. The
following noncash financing activities occurred:

     a. Shares of common  stock were  issued for  services during 2000 and 1999,
        totaling 65,331 and 17,238, respectively.

     b. Preferred  stock  dividends  were  partially  satisfied  by the issuance
        during  2000 of 95,558  shares of common  stock and by the  issuance  of
        305,737 shares during 1999.









                                      -13-

<PAGE>

                                  AIRTRAX, INC.
                          (A Development Stage Company)
                          NOTES TO FINANCIAL STATEMENTS
                                DECEMBER 31, 2000

9.       CONTINGENCIES

     Pursuant to  agreements  relating to the merger  transaction  with MAS, the
Company  was  required  to issue  114,867  shares  of  common  stock  to  former
shareholders  of MAS (MAS Common  Stock) and make a cash payment to an affiliate
of the  majority  shareholder  of MAS in the  amount  of  $25,000.  The  Company
asserted claims against the majority shareholder. The claims involved the amount
of the MAS  Common  Stock  and the  cash  due to the  majority  shareholder  and
affiliate under the merger agreement.  At December 31, 2000, the Company had not
issued  the MAS  Common  Stock.  The  matter  was  settled  early in 2001 by the
issuance of 57,280 shares of common stock to the MAS shareholders.

     The Company had an employment  agreement with its president,  which expired
December 31, 2000. The agreement  provided,  in part, for options permitting the
president to acquire up to 50,000 shares of common stock per year, with portions
of these  options  accumulating  if not  exercised.  Options were  exercised for
100,000 shares during the year 2000;  these yielded  proceeds of $48,376.  There
were no options  outstanding at December 31, 2000. A renewal of the  president's
contract  is  currently  being  discussed  and a new  contract is expected to be
executed shortly.





















                                      -14-
<PAGE>

                                 EXHIBIT INDEX

Exhibit No     Description                                                 Page

 3(i)(c).      Certificate  of  Correction of the Company dated
               April 30, 2000 (filed herewith)...............................2

 3(i)(d).      Certificate of Amendment of Certificate of Incorporation
               dated March 19, 2001 (filed herewith).........................4

 21            Subsidiaries of the Company.................................. 5

                                        1