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

                                   FORM 10-KSB
________________________________________________________________________________

[X]     ANNUAL REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT
        OF  1934

                                     For the fiscal year ended December 31, 2001

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


                            FLEETCLEAN SYSTEMS, INC.
             (Exact name of registrant as specified in its charter)

Commission file number:  000-27467

               Texas                                    76-0196431
               -----                                    ----------
(State  or  Other  Jurisdiction             (I.R.S. Employer Identification No.)
of Incorporation or Organization)


 P.O. Box 727, Hwy 834 East .7 miles, Hardin, Texas                77561
 --------------------------------------------------               --------
     (Address of Principal Executive Office)                     (Zip Code)

                                  936-298-9835
                                  ------------
              (Registrant's Telephone Number, Including Area Code)

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

Securities registered pursuant to Section 12(g) of the Exchange Act: Common
Stock

Check whether the issuer:  (1) filed all reports required to be filed by Section
13  or  15(d) of the Exchange Act during the past 12 months (or for such shorter
period  that the registrant was required to file such reports), and (2) has been
subject  to  such  filing  requirements  for  the  past  90  days.

Yes  [X]  No  [ ]

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

Issuer's  revenues  for  the  12  months ended December 31, 2001 were $1,802,611

The  aggregate  market  value  of the voting stock held by non-affiliates of the
registrant,  based  on  the  average  bid  and  ask  price on the OTC Electronic
Bulletin Board on March 26, 2002 was $468,262.   As of March 26, 2002 registrant
had  19,046,746  shares  of  Common  Stock  outstanding.

The registrant is incorporating by reference into Part III of this Form 10-KSB,
certain information contained in the registrant's proxy statement for its 2001
annual meeting of stockholders.


<PAGE>
     All references to Fleetclean Systems, Inc. common stock reflect a one for
203.991 forward common stock split in August 1996.

                                     PART I

     This annual report contains forward-looking statements.  These statements
relate to future events or our future financial performance and involve known
and unknown risks, uncertainties and other factors that may cause our or our
industry's actual results, levels of activity, performance or achievements to be
materially different from any future results, levels of activity, performance or
achievements expressed or implied by the forward- looking statements.

     In some cases, you can identify forward-looking statements by terminology
such as "may," "will," "should," "expects," "plans," "anticipates," "believes,"
"estimates," "predicts," "potential," or the negative of these terms or other
comparable terminology.  These statements are only predictions.  Actual events
or results may differ materially.

     Although we believe that the expectations reflected in the forward-looking
statements are reasonable, we cannot guarantee future results, levels of
activity, performance, or achievements.  Moreover, neither we nor any other
person assumes responsibility for the accuracy and completeness of these
forward-looking statements.  We are under no duty to update any of the forward-
looking statements after the date of this report to conform our prior statements
to actual results.

ITEM 1.     DESCRIPTION OF BUSINESS

Organization

     We were incorporated in Texas in 1986, under the name Eastex Chemex
Corporation, as a retail distributor of truck washing equipment and chemicals to
operators of large trucking fleets.  In July 1990, we changed our name to
Fleetclean Systems, Inc.

     Until 1992, we operated locally, in the Houston, Texas area.  Thereafter,
sales efforts were directed to large national trucking companies.  In 1994, we
acquired the assets and business accounts of Chemex Southwestern Inc. and began
to manufacture equipment and chemicals for retail distribution.  During 1994, we
opened a distribution warehouse in Statesville, North Carolina.  In January
1996, we acquired the Kentucky operations, including a distribution warehouse,
and customer accounts of Fleetcleaning Supply Company, Inc.  In June 1998, the
distribution warehouse was moved to Lafayette, Indiana and subsequently to
Warsaw, Indiana in June 1999.  In February 1999, we acquired the assets and
ongoing business accounts of Tri-State Chemex Corp of Providence, Rhode Island.
After this transaction, we have sales and service warehouses in Hardin, Texas;
Warsaw, Indiana; Statesville, North Carolina; and Providence, Rhode Island.  All
equipment is manufactured in Texas, with chemical mixing facilities operating in
Texas and Rhode Island.  Distribution and customer service is by our employees
who service specific geographic regions.

Products and Services

     Hand held high-pressure truck washing system
     --------------------------------------------

     We manufacture stainless steel pressure washing equipment for hand washing
of trucks.  The chemicals are formulated for two-step washing, which allows the
user to simply spray the chemical on the unit and rinse it off for complete
cleaning without brushing.  The chemical run off is neutral and is accepted in
municipal waste water systems nationwide with no special permitting required.
We know of no federal regulations that restrict our customers from discharging
wastewater into municipal sewer systems.  Each municipality has specific
requirements for accepting industrial wastewater.  We offer several different
types of chemicals, depending on the surface of the truck and upon the level of
cleaning required.


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<PAGE>
     We believe our customer base is stable in that we provide washing equipment
to our customers, on loan, at no charge, in return for the ongoing chemical
business, provided the customer purchases a pre-set amount of chemicals each
month.  Each customer that is provided the equipment agrees to purchase a
minimum of 200 gallons of chemicals exclusively from us, or agrees to pay a
rental fee of $250.  The current prices of chemicals are approximately $2.60 to
$7.00 per gallon.  Our personnel install the equipment at each customer's
facility, and provide instruction and training.  We believe customer turnover
has been low due to the quality of the products and the level of service
provided on a regular monthly basis.  Some customers have been serviced
continuously for ten years.

     As of December 31, 2001, we serviced 91 chemical customers on a regular
basis, which is a decrease of 16 from the 2000 level.  During 2000, we added two
new regular chemical customers.  The decrease in the number of chemical
customers served is due to our discontinuing service to customers who did not
meet our volume requirements.  Overall, chemical and equipment  sales declined
$66,063 in 2001 from 2000.


     Drive thru truck washing system
     -------------------------------

     We have also designed a drive thru truck wash system that washes a
tractor/trailer combination in approximately 90 seconds.  Unlike the hand
washing systems, drive thru washing systems are not provided on loan, but are
sold at prices of $55,000 - $95,000.  The system cleans without brushing by
means of two chemical spray arches and a rinse arch, each with separate pump
systems, a chemical mixing system, and a master control panel with appropriate
controls and sensors.  The system initially dispenses a pre-soak solution,
followed with a detergent solution, which reacts with the pre-soak solution to
finish cleaning.  Finally, the truck is rinsed, including an undercarriage
rinse, with a rinse pump dispensing water at a rate of approximately 230 gallons
per minute.  The system can handle trucks up to 8 feet 6 inches wide and 13 feet
6 inches high.  To date, we have sold seven drive thru wash systems.   One drive
thru system was sold in 2001.

     A drive thru truck wash is a mechanical and electronic system that is sold
to a customer, typically not a tank truck carrier, but a dry freight box carrier
to clean the exteriors of trucks and trailers.  These systems are sold to
trucking companies that have a sufficient number of units to require high volume
production washing.  The systems, when sold, are installed at the customer's
maintenance facility, allowing them to clean their own tractor/trailer
combinations on a regular basis.  We sell maintenance and cleaning chemicals on
an ongoing basis to the owners of the drive thru truck wash systems.  During
2002, we intend to increase advertising for this segment of our business.

     Internal tank cleaning operations
     ---------------------------------

     Our chemical  business has grown primarily within the tank truck industry.
As a result, our management has become familiar with the characteristics and
needs of that industry, which prompted us to enter into "internal" tank cleaning
in 1999.  In March 1999, we acquired, on a lease purchase contract, a truck
terminal/tank wash facility in Hahnville, Louisiana.  After remodeling the
facility at a cost of approximately $300,000, the facility opened in August
1999.

     Internal tank cleaning is a necessary process in the functioning of
chemical and food tank trucks and trailers.  Most chemical or food tankers haul
a variety of products, though there are some unique situations where a trailer
is on a dedicated haul of one specific product.  In every case where a trailer
is loading a product different from the previous load, it must be thoroughly
cleaned internally, and in some cases externally.  This is done by taking the
trailer to a plant that is equipped with a steam boiler and high pressure pumps,
which are used through a spinner device to inject hot caustic or hot soap or hot
diesel in some cases at high pressure to clean the tank.  Rinsing and drying
completes the process.

     This internal tank cleaning facility is permitted by the Louisiana
Department of Environmental Quality, and currently holds an EPA permit as a
wastewater generator, and an air quality permit from the state of Louisiana. We


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<PAGE>
have completed our required permitting and expect no further fees or permits.
We are subject overall to regulation by the DOT, EPA, and OSHA and currently
believe we have complied with all regulatory requirements.  As a whole, we are
permitted by the DOT as a hazardous materials carrier.  These permits have been
in place since 1993.  We meet all DOT requirements and state requirements for
operation of trucks hauling hazardous materials.  Different states have
different permitting requirements, which are addressed state by state.  The
Hahnville facility is permitted by the EPA and the state of Louisiana as a
"small quantity" hazardous waste generator. Wastewater is disposed of off site
to a permitted waste disposal site.  Additionally, we have a boiler permit from
the Louisiana State Fire Marshall.

     The Hahnville facility also offers a variety of maintenance and inspection
services to its tank line customers, including oil changes, brake service, minor
tank repairs, and federally mandated DOT HM183 tank inspections.

     Since opening for business the third week of August 1999 the Hahnville
facility has seen steady growth in revenue, as shown below.  The facility became
profitable in June 2000 as a result of new contracts with new customers which
increased the number of trailers cleaned each month, and also increased the
service revenue.  The increase in tank wash revenue is responsible for our
overall sales increase. In 2001 tank cleaning sales increased by $375,747 from
the 2000 level.

     We believe we have complied with all applicable environmental regulations
with respect to our operations.  However, due to the nature of our business, we
may become subject to future laws regulating the chemicals used in our
operations.

     As a long-term objective, we intend to open additional tank cleaning
facilities.  We do not employ any processes or operations, which are limited by
availability of materials or suppliers, as all components of our products are
commercially available and can be purchased from a number of sources.  The
uniqueness of the products marketed is in the formulation of the chemicals to
proprietary formulas, which are strictly controlled.  All employees sign a
confidentiality and non-compete agreement, except the tank wash personnel who
have no access to secret information.

Intellectual Property

     We do not have a formal research and development division.  Our
expenditures on research and development have been limited to contracting with a
research chemist for assistance with certain new chemical formulas. There were
no research expenditures in 2001.
     We regard intellectual property rights as essential to our success, and we
rely extensively on trademark rights and confidentiality agreements, between and
amongst our partners, employees, and others, to protect our proprietary
interests.  We are the proprietor of a service mark on the Fleetclean Systems,
Inc. mark.  We do not currently hold any patents on our chemical formulas or on
the components comprising our drive thru washing system.

Marketing

     We have not entered into extensive advertising programs, but have grown
through direct sales efforts, and referrals from satisfied customers.  We
currently service 91 chemical customers in 24 states, plus 70 regular customers
at the tank wash facility.  Although we believe we compete in a fragmented
market with few large competitors, there is no assurance that we will not in the
future compete against larger companies with greater financial resources.

Employees

     We currently have 17 full-time employees.  No employees are covered by a
collective bargaining agreement.  We consider relations with our employees to be
satisfactory.


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<PAGE>
Competition

     Competition in the chemical distribution business is very fragmented, with
the bulk of the competition as locally owned family businesses.  There are
currently 332 commercial tank cleaning facilities in the country as listed in
the March 2002 issue of "Modern Bulk Transporter" magazine.  Of these, 36 are
limited to food grade only, and another 165 are operated by trucking firms
primarily to service their own trucks, leaving only 131 facilities as
independent full service commercial tank washes.  Of the 131 independent
facilities, 18 are owned and operated by Philip Services Corporation, which is
the country's largest chain of independent tank cleaning facilities.

     Tank trailers are divided into three basic categories, dry bulk (flour,
plastic pellets, sand, etc.); liquid food trailers; and chemical trailers.  For
obvious reasons of possible contamination, a food trailer would not normally be
used to haul chemicals, which in many cases would be hazardous.  In some
applications, certain types of food product trailers can be cleaned in a
general-purpose tank wash facility.  However some food product trailers must be
cleaned in special "food grade" wash bays, which requires all stainless steel
equipment and fixtures.  The Hahnville facility is a general-purpose chemical
tank wash and does not have a "food grade" bay, as we believe the local market
does not require such a facility.  However certain food products are cleaned in
the Hahnville facility.  There are tank washes that specialize in "food grade"
cleaning only and would not be able to clean a variety of chemical products
without voiding their "food grade" designation.

     The majority of the independent tank washes are small family owned
businesses.  Some of these family owned businesses are being considered as
potential acquisition candidates with a view to developing a national chain.  We
believe many of these businesses use antiquated, inefficient methods, and we
believe that an opportunity exists to become a significant service provider
nationwide by acquiring carefully selected facilities, while at the same time
building new modern facilities in key markets

RISK FACTORS THAT MAY AFFECT OUR RESULTS OF OPERATIONS AND FINANCIAL CONDITION.

     You should carefully consider the risks described below before making any
investment decision related to our securities.  The risks and uncertainties
described below are not the only ones facing our company.  Additional risks and
uncertainties not presently known to us or that we currently deem immaterial
also may impair our business operations.  If any of the following risks actually
occur, our business could be harmed.

WE DEPEND ON KEY PERSONNEL.

     Our success is substantially dependent on the continued service and
performance of our senior management and key personnel, specifically Kenneth A.
Phillips.  We had an employment agreement with Mr. Phillips that expired in July
2000, and has not been renewed.  Mr. Phillips continues as president of the
company without a contract.  The loss of the services of Mr. Phillips could have
a negative effect on our business.  In addition, we do not maintain a life
insurance policy for Mr. Phillips.

WE ARE EXPANDING OUR BUSINESS, WHICH WILL PLACE A SEVERE STRAIN ON OUR LIMITED
RESOURCES.

     We expect to expand our operations, and anticipate that further significant
expansion will be required to address potential growth in our customer base and
market opportunities.  This expansion may place a significant strain on our
limited resources.  We expect to hire new employees and increase our
infrastructure as part of our expansion.

INTEGRATION OF ACQUISITIONS

     Since 1994, we have completed several acquisitions, as described above.
The anticipated benefits from these, and future acquisitions, may not be
achieved unless the operations of the acquired business are successfully
combined with ours in a timely manner.  The integration of acquisitions requires
substantial attention from management.  The diversion of the attention of
management, and any difficulties encountered in the transition process, could


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<PAGE>
have an adverse impact on our business.  In addition, the process of integrating
various businesses could cause the interruption of, or a loss of momentum in,
the activities of some or all of these businesses, which could have an adverse
effect on our business.

WE DEPEND ON OUR INTELLECTUAL PROPERTY.

     Our success depends, in part, upon our intellectual property rights,
including our rights related to the development of our chemical formulas and the
design of our drive-thru truck washing systems.  We do not have patents on
either of these products.  We rely upon a combination of trade secret,
nondisclosure, and other contractual arrangements to protect our proprietary
rights.  We enter into confidentiality agreements with our employees, and
generally require that our consultants enter into such agreements.  There can be
no assurance that the steps taken in this regard will be adequate to deter
misappropriation of our proprietary information or that we will be able to
detect unauthorized use and take appropriate steps to enforce our intellectual
property rights.  In addition, although we believe that our services and
products do not infringe on the intellectual property rights of others, there
can be no assurance that such a claim will not be asserted against us in the
future, or that if asserted any such claim will be successfully defended.  A
successful claim against us could materially and adversely affect our business.

CONCENTRATION OF CONTROL

     Our  board  of  directors  beneficially  own  approximately  50%  of  our
outstanding  common  stock.  As a result, these stockholders have the ability to
substantially  influence  and  may effectively control, the outcome of corporate
actions  requiring  stockholder  approval,  including the election of directors.
This  concentration of ownership may have the effect of delaying or preventing a
change  in  control  of  Fleetclean  Systems.

OUR STOCK PRICE IS VOLATILE.

     The market for our securities is highly volatile.  The closing price of our
common stock has fluctuated widely.  The stock markets have in general
experienced extreme stock price volatility.  It is likely that the price of our
common stock will continue to fluctuate widely in the future.

PENNY STOCK REGULATIONS

     The SEC has adopted rules that regulate broker-dealer practices in
connection with transactions in "penny stocks."  Penny stocks generally are
equity securities with a price of less than $5.00.  The penny stock rules
require a broker-dealer, prior to a transaction in a penny stock not otherwise
exempt from the rules, to deliver a standardized risk disclosure document
prepared by the SEC that provides information about penny stocks and the nature
and level of risks in the penny stock market.  These disclosure requirements may
have the effect of reducing the level of trading activity in any secondary
market for a stock that becomes subject to the penny stock rules.  Our common
stock may be subject to the penny stock rules, and accordingly, investors in our
common stock may find it difficult to sell their shares in the future, if at
all.

ITEM 2.  DESCRIPTION OF PROPERTY

     Hardin, Texas.  We are purchasing 3.3 acres in Hardin, Texas, which serves
as corporate headquarters and our primary manufacturing facility, with a total
of 5,500 square feet of office, manufacturing, and warehouse space.  The current
mortgage balance is approximately $54,500.  We entered into a note payable in
September 1998, which provides for monthly payments of $941 for 120 months.

     Hahnville, Louisiana.  We have entered into a lease purchase contract with
Trimac Transportation for the purchase of 1.52 acres, in Hahnville, Louisiana.
The site has 52,844 square feet of 6 inch reinforced concrete paving and is
surrounded by a chain link fence.  The steel frame industrial building is 7,399
square feet and has two maintenance bays and one oversized cleaning bay capable
of handling two trailers at a time, plus a boiler/equipment room.  Finished
office area is 508 square feet plus a 612 square feet finished mezzanine with an
eating area and shower facility.  The purchase price on the property is $450,000
payable in monthly payments of $5,000.  One half of the payment is a lease
payment, and one half is applied to the principal balance, with a balloon
payment after 60 months of $250,000.  Payments began June 1, 1999.  In April


                                        5
<PAGE>
2000, we purchased an additional   acre across the street from the tank wash at
a cost of $100,000.  The purchase was financed by the seller on a five-year note
with monthly payments of $1,548.  The down payment was $25,000 and the balance
owed on December 31, 2001 was approximately $53,532.  We installed utilities on
the property and paved it for additional parking.  In November 2000, we
implemented a three-year agreement with a customer that allows them to place an
office trailer on the property in return for which we clean and service their
trucks and trailers.

     We rent, on a month-to-month basis, small warehouses in Statesville, North
Carolina; Providence, Rhode Island; and Monticello, Indiana at a total monthly
rental of $1,450.

     We believe our present facilities are adequate for our current operations,
and that our properties are adequately covered by insurance.

ITEM 3.  LEGAL PROCEEDINGS

     None

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

     None.


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<PAGE>
                                    PART II

ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED SHAREHOLDER MATTERS

     Our common stock trades under the symbol "FLSY" on the OTC Electronic
Bulletin Board.  The market for our common stock on the OTC Electronic Bulletin
Board is limited, sporadic, and highly volatile.  The following table sets forth
the high and low sales closing per share of the common stock for the past two
fiscal years, as reported by the OTC Electronic Bulletin Board.  These prices
reflect inter-dealer prices, without retail mark-ups, mark-downs
or commissions, and may not necessarily represent actual transactions.

                             HIGH  LOW
     FISCAL 2000
     -----------

First Quarter                .453   .07
Second Quarter                .48  .141
Third Quarter                .141   .08
Fourth Quarter                .08  .041

     FISCAL 2001
     -----------
First Quarter                 .06   .05
Second Quarter                 05   .04
Third Quarter                  05   .03
Fourth Quarter                .04   .02

     On March 5, 2002, the closing price of our common stock as reported by the
OTC Electronic Bulletin Board was $.04.  We believe that as of March 30, 2002,
there were approximately 362 record owners of our common stock.  It is our
present policy not to pay cash dividends and to retain future earnings to
support our growth.  Any payment of cash dividends in the future will be
dependent upon the amount of funds legally available, our earnings, financial
condition, capital requirements, and other factors that the board of directors
may deem relevant.  We have not paid any dividends during the last two fiscal
years and do not anticipate paying any cash dividends in the foreseeable future.

     RECENT SALES OF UNREGISTERED SECURITIES

     In December 2001, we issued 1,000,000 shares of common stock to our
officers,  directors, employees, and consultants as a bonus.  We believe the
above transactions were exempt from registration pursuant to Section 4(2) of the
Securities Act, as the recipients were all accredited investors, or
sophisticated investors and since the transactions were non-recurring and
privately negotiated.

     There were no underwritten offerings employed in connection with the sales
and issuances of the unregistered securities in any of the transactions set
forth above.

ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS


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<PAGE>
     You must read the following discussion of the results of the operations and
financial condition of Fleetclean Systems in conjunction with our consolidated
financial statements, including the notes included in this Form 10-KSB filing.
Our historical results are not necessarily an indication of trends in operating
results for any future period.

     We are a national retail distributor of truck washing equipment and
chemicals to operators of large trucking fleets.  In 1994, we acquired the
assets and business accounts of Chemex Southwestern Inc. and began to
manufacture equipment and chemicals for retail distribution.  During 1994, we
opened a distribution warehouse in Statesville, North Carolina.  In January
1996, we acquired the Kentucky operations, including a distribution warehouse,
and customer accounts of Fleetcleaning Supply Company, Inc.  In February 1999,
we acquired the assets and ongoing business accounts of Tri-State Chemex Corp of
Providence, Rhode Island.  All equipment is manufactured in Texas, with chemical
mixing facilities operating in Texas and Rhode Island.  Distribution and
customer service is by our employees who service specific geographic regions.

     We generate revenues from: (a) the sales of chemicals for use with our
hand-held truck washing equipment, (b) sales of our drive-thru truck washing
system, and (c) from our internal tank cleaning operations.  We recognize
revenues at the point of sale.

YEAR ENDED DECEMBER 31, 2000 COMPARED TO THE YEAR ENDED DECEMBER 31, 1999

     Revenues

     Total revenues increased to $1,802,611  for the year ended December 31,
2001 compared with $1,451,265 for the year ended December 31, 2000.  The
increase of 24% was attributable to increased internal tank cleaning revenues
from the Hahnville facility during the year ended December 31, 2001.

     Cost of goods sold

For the year ended December 31, 2001, cost of goods sold increased to $576,783
from $413,363 during the year ended December 31, 2000.  The increase of 40% was
primarily attributable to increased direct labor and associated costs at the
Hahnville facility.  Our gross margins for the year ended December 31, 2001
declined to 68% from 72% for the year ended December 31, 2000.  The decline in
gross margins was due to the lower margins received from our internal tank
washing revenues in the Hahnville facility.

     General and Administrative Expenses

     For the year ended December 31, 2001, general and administrative expenses
decreased to $1,107,810 from $1,144,636 during the year ended December 31, 2000.
The decrease of 3% was primarily due to:

     -    a decrease in advertising costs;
     -    a decrease in investor relations costs;
     -    a decrease in interest expense, and;
     -    a decrease in professional fees.


     Net Loss

     For the year ended December 31, 2001, our net profit  was $39,238 compared
to net loss of $214,836  for the year ended December 31, 1999.  The profit was
primarily attributable to the increase in tank wash revenue as described above,
along with an overall decrease in expenses.

     Cash Flows


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<PAGE>
     Our operating activities provided net cash of $207,296 in fiscal 2001 and
$156,400 in fiscal 2000.  Net cash provided by operating activities in fiscal
2000 increased due to an increase in the net operating profit for the year and
from an increase in our depreciation of $14,857.

     Our investing activities used net cash of $92,006 in fiscal 2001 and
$339,627 in 2000. The $92,006 was for the purchase of new service, delivery
trucks.  There was no significant investing in land, buildings, or equipment in
2001, compared to $339,627 invested in expansion of the Hahnville facility in
2000, along with the purchase of a truck.

     Our financing activities used cash of $115,145 in fiscal 2001 compared with
$181,928 provided from financing in fiscal 2000.  The amount used in financing
was due to reducing notes payable.  There were no stock sales in 2001.

LIQUIDITY AND CAPITAL RESOURCES

     As of December 31, 2001, we had cash of $250 and negative working capital
of $75,501.  We continued to receive cash flow from operations during 2001 as
the Hahnville facility continued to generate positive cash flows.  We have only
operated the Hahnville facility since August 1999, and as such there is no
assurance that we will continue to generate positive cash flow from the
facility.  We estimate our monthly operating expenditure for fiscal 2002 will be
approximately $135,000, although unexpected expenses may increase our monthly
outlays.  In addition, we intend to make additional acquisitions during the
year, which will cause increased expenditures.

     As of December 31, 2001, we had notes payable aggregating $825,421 to
financial institutions and entities due through September 2008 at interest rates
ranging from 8.25% to 14.7%.  Of these notes payable, $174,344 is due during the
year ended December 31, 2002.  In addition we are currently leasing several
other properties on a month-to-month basis with aggregate lease payments of
$1,450 per month.

     We do not have any significant credit facilities available with financial
institutions or other third parties and we rely on internal cash flow for
operations.  At the present time, we have no commitments for any external
financing, and if we are able to generate external funding, it will likely be on
a best-efforts basis and may involve substantial dilution to our present
shareholders.  In addition, although we have received advances from our officers
in the past, we do not expect that we will be able to rely on such advances in
the future.

     If we are unable to generate external funding, we will be required to
curtail our expansion plans.  We believe our current financial situation is
adequate for continued operations.   We believe we can sustain our current
operations if we discontinue all growth expenditures, and use all cash flows
from operations to fund our current operations.

ITEM 7.  CONSOLIDATED FINANCIAL STATEMENTS

     The financial statements commencing on page F-1 have been audited by Malone
& Bailey, PLLC, independent certified public accountants, to the extent and for
the periods set forth in their reports appearing elsewhere herein and are
included in reliance upon such reports given upon the authority of said firm as
experts in auditing and accounting.

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

     This information was previously reported on our form 8K filed August 3,
2001, as amended on August 28, 2001.


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<PAGE>
                         PART III

ITEMS 9 TO 12 INCLUSIVE.

     These items have been omitted in accordance with the general instructions
to Form 10-KSB.  Prior to April 30, 2002, we will file a definitive proxy
statement or information statement that will involve the election of directors.
The information required by these items will be included in such proxy statement
or information statement and are incorporated by reference in this annual
report.

ITEM 13.  EXHIBITS AND REPORTS ON FORM 8-K

     (a)     The following exhibits are to be filed as part of the annual
report:

      EXHIBIT NO.   IDENTIFICATION OF EXHIBIT

      Exhibit 3.1   Articles of Incorporation of Fleetclean Systems, Inc.
                    (filed previously as Exhibit 2.1 to the company's Form
                    10-SB, file no. 000-27467)

      Exhibit 3.2   Amended and Restated Bylaws of Fleetclean Systems,
                    Inc. (filed previously as Exhibit 2.2 to the company's Form
                    10-SB, file no. 000-27467)

      Exhibit 4.1   Common Stock Certificate of Fleetclean Systems, Inc.
                    (filed previously as Exhibit 2.1 to the company's Form
                    10-SB, file no. 000-27467)

     Exhibit 10.1   Lease/Purchase Agreement (filed previously as
                    Exhibit 6.4 to the company's Form 10-SB/A, amendment #2,
                    file no. 000-27467)


     (b)     There have been no reports filed on Form 8-Kduring the forth
             quarter of fiscal 2001.


                                       10
<PAGE>
                                   SIGNATURES
                                   ----------


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

                              Fleetclean Systems, Inc.


                                  /s/ Kenneth A. Philips
                              By: ----------------------------------
                                  Kenneth A. Philips, President


                        _________________________________

     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.


Signature                      Title                               Date
---------                      -----                               ----

/s/ Kenneth A. Philips
-----------------------        Chairman of the Board              March 29, 2002
Kenneth A. Philips             and President

/s/ Jay G. Phillips
-----------------------        Director and Vice-President        March 29, 2002
Jay G. Phillips                Customer Service

/s/ Richard R. Royall
-----------------------        Director                           March 29, 2002
Richard R. Royall


                                       11
<PAGE>
                          INDEPENDENT AUDITORS' REPORT

To the Board of Directors
Fleetclean Systems, Inc.

We have audited the accompanying balance sheet of Fleetclean Systems, Inc. as of
December 31, 2001, and the related statements of operations, stockholders'
equity, and cash flows for the year then ended.  These financial statements are
the responsibility of the Company's management.  Our responsibility is to
express an opinion on these financial statements based on our audit.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Fleetclean Systems, Inc. as of
December 31, 2001, and the results of its operations and its cash flows for the
year then ended, in conformity with accounting principles generally accepted in
the United States.


Malone & Bailey, PLLC
Houston, Texas
www.malone-bailey.com

February 12, 2002


<PAGE>
                          INDEPENDENT AUDITORS' REPORT


To the Board of Directors
Fleetclean Systems, Inc.


We have audited the statements of operations, stockholders' equity and cash
flows for the year ended December 31, 2000.  These financial statements are the
responsibility of the Company's management.  Our responsibility is to express an
opinion on these financial statements based on our audit.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the results of its operations and cash flows for the year
ended December 31, 2000, in conformity with accounting principles generally
accepted in the United States.


McManus & Co., P.C.
Rockaway, New Jersey
April 5, 2001


<PAGE>
<TABLE>
<CAPTION>
                            FLEETCLEAN SYSTEMS, INC.
                                  BALANCE SHEET
                                DECEMBER 31, 2001


                                    ASSETS

<S>                                                     <C>
Current assets
  Cash                                                  $      250
  Accounts receivable                                      256,361
  Employee advances                                          4,777
  Inventory                                                143,624
  Prepaid expenses                                           7,978
                                                        -----------
    Total current assets                                   412,990

Property and equipment, net                              1,489,035

Goodwill net of accumulated amortization of $39,709        164,153
Other assets                                                 2,345
                                                        -----------
                                                        $2,068,523
                                                        ===========

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
  Current portion of long-term debt and capital leases  $  174,344
  Bank overdraft                                            38,106
  Accounts payable                                         213,814
  Accrued expenses                                          62,227
                                                        -----------
    Total current liabilities                              488,491
                                                        -----------

Long-term debt and capital leases                          651,077

Commitments

STOCKHOLDERS' EQUITY (DEFICIT):
  Common stock, $.01 par value, 50,000,000 shares
  authorized, 18,796,746 shares issued and outstanding     187,967
Additional paid in capital                               1,293,918
Accumulated deficit                                       (552,930)
                                                        -----------
  Total Stockholders' Equity                               928,955
                                                        -----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY              $2,068,523
                                                        ===========

           See accompanying summary of accounting policies
                 and notes to financial statements.
</TABLE>


<PAGE>
<TABLE>
<CAPTION>
                            FLEETCLEAN SYSTEMS, INC.
                            STATEMENTS OF OPERATIONS


                                                      For the Years Ended
                                                          December 31,
                                                    --------------------------
                                                        2001          2000
                                                    ------------  ------------
<S>                                                 <C>           <C>
Net sales                                           $ 1,802,611   $ 1,451,265
Cost of goods sold                                      576,783       413,363
                                                    ------------  ------------
Gross profit                                          1,225,828     1,037,902
                                                    ------------  ------------

Operating expenses:
  Salaries and benefits                                 520,895       505,063
  General and administrative                            360,675       400,436
  Depreciation and amortization                         198,215       183,358
  Legal and professional                                 47,893        61,675
  Gain on sale of assets                                (19,868)       (5,896)
                                                    ------------  ------------
                                                      1,107,810     1,144,636
                                                    ------------  ------------

Income (loss) from operations                           118,018      (106,734)

Other income (expense):
  Interest expense                                      (87,923)     (110,250)
  Other                                                   2,682         2,148
                                                    ------------  ------------
                                                        (85,241)     (108,102)
                                                    ------------  ------------

Net income (loss) before benefit for income taxes        32,777      (214,836)
Benefit for income taxes                                  6,461             -
                                                    ------------  ------------
Net income (loss)                                   $    39,238   $  (214,836)
                                                    ============  ============


Net income (loss) per share:
  Basic                                             $      0.00   $     (0.02)
                                                    ============  ============
  Diluted                                           $      0.00   $     (0.02)
                                                    ============  ============

Weighted average shares outstanding:
  Basic                                              18,048,081    13,953,064
                                                    ============  ============
  Diluted                                            18,048,081    13,953,064
                                                    ============  ============

                See accompanying summary of accounting policies
                       and notes to financial statements.
</TABLE>


<PAGE>
<TABLE>
<CAPTION>
                            FLEETCLEAN SYSTEMS, INC.
                       STATEMENTS OF STOCKHOLDERS' EQUITY
                        FOR THE YEARS ENDED DECEMBER 31, 2001

                              Common stock        Additional
                        -----------------------     paid in    Accumulated
                          Shares      Amount        capital      deficit       Total
                        ----------  -----------  ------------  ----------  ----------
<S>                     <C>         <C>          <C>           <C>         <C>
Balance, January 1,
1999                    10,590,014  $   105,900  $    817,318  $(377,332)  $ 545,886

Issuance of stock for
cash                     1,937,804       19,378       280,622          -     300,000

Issuance of stock or
services                   675,622        6,756        25,447          -      32,203

Issuance of stock for
conversion of warrants     283,332        2,833        11,332          -      14,165

Issuance of stock for
conversion of debt       3,639,974       36,400       145,599          -     181,999

Issuance of stock for
incentive compensation     850,000        8,500         8,925          -      17,425

Issuance of stock for
payments                    70,000          700         2,800          -       3,500

Net loss                         -            -             -   (214,836)   (214,836)
                        ----------  -----------  ------------  ----------  ----------

Balance, December 31,
2000                    18,046,746      180,467     1,292,043   (592,168)    880,342

Issuance of stock for
compensation               750,000        7,500         1,875          -       9,375

Net income                       -            -             -     39,238      39,238
                        ----------  -----------  ------------  ----------  ----------
Balance at December
31, 2001                18,796,746  $   187,967  $  1,293,918  $(552,930)  $ 928,955
                        ==========  ===========  ============  ==========  ==========

                See accompanying summary of accounting policies
                       and notes to financial statements.
</TABLE>


<PAGE>
<TABLE>
<CAPTION>
                            FLEETCLEAN SYSTEMS, INC.
                            STATEMENTS OF CASH FLOWS

                                                        For the Years Ended
                                                           December 31,
                                                      ----------------------
                                                         2001        2000
                                                      ----------  ----------
<S>                                                   <C>         <C>
CASH FLOWS FROM OPERATING ACTIVITES:
Net income (loss)                                     $  39,238   $(214,836)
Adjustments to reconcile net income (loss) to cash
  used in operating activities:
  Stock issued for services                                   -      32,203
  Stock issued for conversion of debt                         -     181,999
  Stock issued for compensation                           9,375           -
  Depreciation and amortization                         198,215     183,358
  Gain on sale of assets                                (19,868)          -
Changes in operating assets and liabilities:
  Accounts receivable                                   (56,768)    (39,940)
  Employee advances                                       1,232      (1,221)
  Inventory                                              20,470     (12,371)
  Prepaid expenses                                        3,022       3,054
  Other assets                                            5,575      (5,575)
  Deferred tax asset                                     24,583      (2,162)
  Accounts payable                                      (27,959)     59,778
  Accounts payable - overdraft                           38,106           -
  Accrued expenses                                        3,120     (30,050)
  Deferred tax liability                                (31,045)      2,163
                                                      ----------  ----------

NET CASH PROVIDED BY OPERATING ACTIVITIES               207,296     156,400
                                                      ----------  ----------

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment                     (131,352)   (339,627)
Proceeds from the sale of property and equipment         39,346           -
                                                      ----------  ----------

NET CASH USED IN INVESTING ACTIVITIES                   (92,006)   (339,627)
                                                      ----------  ----------

CASH FLOWS FROM FINANCING ACTIVITES:
Proceeds on notes payable                                49,783      14,697
Payments on notes payable                              (164,928)          -
Advances officer                                              -    (167,859)
Issuance of common stock                                      -     335,090
                                                      ----------  ----------
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES
                                                       (115,145)    181,928
                                                      ----------  ----------

NET INCREASE (DECREASE) IN CASH                             145      (1,299)
                                                      ----------  ----------
Cash, beg. of period                                        105       1,404
                                                      ----------  ----------
Cash, end of period                                   $     250   $     105
                                                      ==========  ==========

SUPPLEMENTAL CASH FLOW INFORMATION:
Interest paid                                         $  87,923   $ 110,250
Income taxes paid                                     $       -   $       -

                See accompanying summary of accounting policies
                       and notes to financial statements.
</TABLE>


<PAGE>
                            FLEETCLEAN SYSTEMS, INC.
                        NOTES TO THE FINANCIAL STATEMENTS
                                DECEMBER 31, 2001

NOTE  1  DESCRIPTION OF BUSINESS AND SUMMARY OF ACCOUNTING POLICIES

Fleetclean  Systems, Inc. (the Company) incorporated as a Texas corporation and
commenced business on June 1, 1986.  The Company is engaged in the business of
sales and service of truck washing equipment to the trucking industry (large
fleet operations).

In 1994 the Company expanded its operations to include the manufacture of
equipment and blending of washing materials with its own chemical formulas.

During 1999, the Company acquired a truck terminal / internal tank wash facility
in Hahnville, Louisiana under a lease purchase contract.

Use of Estimates

The preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities at
the date of the balance sheet.  Actual results could differ from those
estimates.

Cash Equivalents

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

Inventory

Inventories are valued at the lower of cost or market.  Cost is determined by
using the average cost method.  Inventories consist primarily of parts and
chemicals.

Long-lived Assets

Property, plant and equipment are stated at cost less accumulated depreciation.
Major renewals and improvements are capitalized; minor replacements, maintenance
and repairs are charged to current operations.  Depreciation is computed by
applying the straight-line method over the estimated useful lives of the
buildings (thirty nine years) and by applying the straight-line or accelerated
methods over the estimated useful lives of machinery and equipment (five to
seven years). Leasehold improvements are amortized over the shorter of the
useful life of the improvement or the life of the related lease. The Company
performs reviews for the impairment of long-lived assets whenever events or
changes in circumstances indicate that the carrying amount of an asset may not
be recoverable.

Goodwill

Goodwill relates to the value of a company acquired. The cost of the goodwill is
amortized on a straight-line basis over the estimated life of fifteen years.
Goodwill is reviewed for impairment whenever events or changes in circumstances
indicate that the carrying amount of an asset may not be recoverable.


<PAGE>
Revenue Recognition

The Company recognizes revenue when persuasive evidence of an arrangement
exists, delivery has occurred, the sales price is fixed or determinable and
collectibility is probable.  These criteria are generally met at the time
product is shipped.  Shipping and handling costs are included in cost of goods
sold.

Income Taxes

The asset and liability approach is used to account for income taxes by
recognizing deferred tax assets and liabilities for the expected future tax
consequences of temporary differences between the carrying amounts and the tax
basis of assets and liabilities.  The Company records a valuation allowance to
reduce the deferred tax assets to the amount that is more likely than not to be
realized.

Earnings Per Common Share

Basic earnings (loss) per common share is computed using the weighted average
number of common shares outstanding during the period.  Diluted earnings per
common share is computed using the combination of dilutive common share
equivalents and the weighted average number of common shares outstanding during
the period.  Diluted earnings per common share for 2001 is based on the weighted
average number of common shares outstanding during the period plus the inclusion
of common share equivalents.  No incremental shares were used in the calculation
of diluted loss per common share for 2001 and 2000, respectively.  Warrants to
purchase 316,667 shares of common stock in 2001 were outstanding but not
included in the computation of diluted earnings per common share because the
exercise price was greater than the average market price of the common shares.

Stock-Based Compensation

The Company accounts for stock-based compensation under the intrinsic value
method.  Under this method, the Company recognizes no compensation expense for
stock options granted when the number of underlying shares is known and exercise
price of the option is greater than or equal to the fair market value of the
stock on the date of grant.

Advertising

Advertising costs are expensed as incurred.  Advertising expenses were $3,372
and $26,119 for the years ended December 31, 2001 and 2000, respectively.

Recent Pronouncements

In June 2001, the Financial Accounting Standards Board issued FAS 142, Goodwill
and Other Intangible Assets.  Under FAS 142, goodwill and intangible assets with
indefinite lives are no longer amortized but are reviewed at least annually for
impairment.  The amortization provisions of FAS 142 apply to goodwill and
intangible assets acquired after June 30, 2001.  With respect to goodwill and
intangible assets acquired prior to July 1, 2001, The Company is required to
adopt FAS 142 effective January 1, 2002.  Application of the non-amortization
provisions of FAS 142 for goodwill is expected to result in an increase in
operating income of approximately $14,000 in 2002.  At December 31, 2001, the
Company had goodwill of approximately $164,000.  Pursuant to FAS 142,  the
Company will test its goodwill for impairment upon adoption and, if impairment
is indicated, record such impairment as a cumulative effect of an accounting
change.  The Company is currently evaluating the effect that the adoption may
have on its consolidated results of operation and financial position.

Reclassifications

Certain prior year amounts have been reclassified to conform to the current year
presentation.


<PAGE>
NOTE 2 - ACCOUNTS RECEIVABLE

Accounts receivable consist of the following:

<TABLE>
<CAPTION>
                                         December 31,
                                       ------------------
                                         2001      2000
                                       --------  --------
<S>                                    <C>       <C>
Accounts receivable                    $259,619  $202,852
Less: Allowance for doubtful accounts     3,258     3,258
                                       --------  --------
                                       $256,361  $199,594
                                       ========  ========
</TABLE>

NOTE 3 - PROPERTY, PLANT, AND EQUIPMENT:

Components of property, plant, and equipment, at December 31, 2001 and 2000
are as follows:

<TABLE>
<CAPTION>
                                                         December 31,
                                                   ------------------------
                                                      2001         2000
                                                   -----------  -----------
<S>                                                <C>          <C>
  Demonstration equipment                          $  456,059   $  443,600
  Furniture and fixtures                               38,681       37,208
  Machinery and equipment                             309,561      302,742
  Leasehold improvements                                3,012        3,012
  Land                                                270,330      270,330
  Building                                            454,849      454,849
  Tank cleaning equipment                             354,667      338,289
  Transportation equipment                            358,643      386,574
                                                   -----------  -----------
                                                    2,245,802    2,236,604
  Less: accumulated depreciation and amortization    (756,767)    (674,819)
                                                   -----------  -----------
                                                   $1,489,035   $1,561,785
                                                   ===========  ===========
</TABLE>

Depreciation expense totaled $184,624 and $169,800 in 2001 and 2000,
respectively.

NOTE 4 - Major Customers

The Company has two and one customers that accounted for more than 10% of net
sales, and collectively, these customers accounted for 36% and 24% of net sales
for the years ended December 31, 2001 and 2000, respectively.  The breakdown is
as follows at December 31:

Customer    2001      2000
--------  --------  --------

  A       $329,467  $353,296
  B       $319,451  $      -


<PAGE>
NOTE 5 - LONG-TERM DEBT

Long-term debt consists of the following:

<TABLE>
<CAPTION>
                                  Maturity  Interest
                    Collateral      Date      rate        2001        2000
                   -------------  --------  ---------  ----------  ----------
<S>                <C>            <C>       <C>        <C>         <C>
Southwest Bank     Forklift        10/4/02      10.0%  $   3,004   $   6,276
Case Credit        1999 Truck      8/10/03      10.6%          -      19,503
Case Credit        1999 Trucks     10/6/03       9.6%     45,424      67,184
Trimac Bulk        Land, building
Trans.             and equipment   2/29/04      6.79%    340,405     375,973

Southwest Bank     2000 Truck      8/10/04      8.25%     17,595      23,290

Granite Financial  Equipment       8/15/04      14.7%     64,700      83,146
1st Liberty
National           2001 Truck     12/13/04      10.5%     29,048      36,875
1st Liberty
National           2001 Truck     12/13/04      10.5%     29,048      36,875
D. Vial            Land            4/14/05      8.75%     53,532      66,785
1st Liberty        Receivables
National           and inventory  12/27/05      10.5%    137,427     163,673
1st Liberty
National           Land/building    9/4/08     9.875%     55,455      60,986
Southwest Bank     2001 Truck      1/16/05      8.25%     26,424           -
Southwest Bank     2001 Truck      1/16/05      8.25%     23,359           -
                                                         825,421     940,566
                                                       ----------  ----------
Less: current portion of long-term debt and capital
  Leases                                                (174,344)   (152,095)
                                                       ----------  ----------
         Long-term debt and capital leases             $ 651,077   $ 788,471
                                                       ==========  ==========
</TABLE>

All notes are personally guaranteed by the President of the Company.

Principal repayments for each of the next five years are as follows:

                                       Amount
                                     ---------
                    2002             $ 174,344
                    2003               184,581
                    2004               385,169
                    2005                56,544
                    2006                 9,946
                    Thereafter          14,837
                                     ---------
                                     $ 825,421
                                     =========

NOTE 6 - SHAREHOLDERS' ADVANCES

During 2000, the Company converted approximately $167,000 of shareholder
advances into 3,539,974 shares of the Company's restricted common stock.


<PAGE>
NOTE 7 - INCOME TAXES

The provision (benefit) for federal income tax consists of the following for the
years ended December 31,:

<TABLE>
<CAPTION>
                                      2001        2000
                                   ----------  ----------
<S>                                <C>         <C>
  Current provision (benefit)      $       -   $       -
  Deferred provision (benefit)        (6,461)          -
                                   ----------  ----------
                                   $  (6,461)  $       -
                                   ==========  ==========
</TABLE>

Deferred income taxes consist of the following at December 31,:

<TABLE>
<CAPTION>
                                      2001        2000
                                   ----------  ----------
<S>                                <C>         <C>
  Short-term:
    Deferred tax assets            $ 162,000   $ 238,917

  Long-term:
    Deferred tax liability                 -     (51,854)
    Valuation allowance             (162,000)   (193,524)
                                   ----------  ----------
                                   $       -   $  (6,461)
                                   ==========  ==========
</TABLE>


The following is a reconciliation of income taxes calculated at the United
States federal statutory rate to the income tax provision (benefit):

<TABLE>
<CAPTION>
                                     For the years ended
                                        December 31,
                                   ----------------------
                                      2001        2000
                                   ----------  ----------
<S>                                <C>         <C>
  Provision (benefit) for income
  taxes at U.S. statutory rate            34%       (34)%
  Other items, net                      (20)%          -
  Effect of utilization of net
  operating loss carryforwards          (34)%         34%
                                   ----------  ----------
  Income tax provision (benefit)        (20)%          0%
                                   ==========  ==========
</TABLE>

The Company had taxable income of approximately $32,000 and an income tax loss
of $241,028 for the years ended December 31, 2001 and 2000, respectively.  The
Company has net operating losses carry-forwards of approximately $476,000 which
will expire in years from 2011 through 2020, respectively.

NOTE 8 - COMMITMENTS

The Company currently leases a facility located in Johnson City, Rhode Island on
a month-to-month basis. The monthly rental payment is $900 and is terminable
upon thirty days notice.

The Company currently leases a facility located in Statesville, North Carolina
on a month-to-month basis.  The monthly rental payment is $250 and is terminable
upon  thirty days notice.

The Company currently leases a facility located in Monticello, Indiana on a
month-to-month basis.  The monthly rental payment is $300 and is terminable upon
thirty days notice.


<PAGE>
Minimum future lease rentals are as follows:

   December 31,    Amount
                 --------
   2002          $ 18,600
   2003            18,600
   2004            18,600
   2005             7,750

Rent expense was $19,025 and $24,338 for the years ending December 31, 2001
and 2000, respectively.

NOTE 9 - WARRANTS

The  Company  has  issued and outstanding the following warrants which have not
yet  been exercised at December 31, 2001:

The Company issued 66,667 stock purchase warrants to Eugene Snowden, expiring
December 15, 2002.  The warrants are to purchase fully paid and non-assessable
shares of the Company's common stock, par value $0.01 per share at a purchase
price of $0.05 per share.

The Company issued 66,667 stock purchase warrants to Eugene Snowden, expiring
December 15, 2003.  The warrants are to purchase fully paid and non-assessable
shares of the Company's common stock, par value $0.01 per share at a purchase
price of $0.05 per share.

The Company issued 100,000 stock purchase warrants to Eugene Snowden, expiring
January 1, 2003.  The warrants are to purchase fully paid and non-assessable
shares of the Company's common stock, par value $0.01 per share at a purchase
price of $0.05 per share.

The Company issued 83,334 stock purchase warrants to Ken Philips, CEO expiring
October 15, 2002.  The warrants are to purchase fully paid and non-assessable
shares of the common stock, par value $.01 per share at a purchase price of $.05
per share.

NOTE 10 - EMPLOYEE STOCK OPTION PLAN

During 2000, both the directors and the shareholders ratified the "2000 Stock
Option  Plan".  This plan has 5,000,000 shares of the Company common stock
reserved for  issuance.  At December 31, 2001, no options have been
granted pursuant to the plan.


<PAGE>