SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549
                                  ANNUAL REPORT

                                   Form 10-K/A

                                 Amendment No. 2

                                  ANNUAL REPORT
                     PURSUANT TO SECTION 13 or 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                   For the Fiscal Year Ended December 31, 2001

                             BREK ENERGY CORPORATION
               (Exact Name of Registrant as Specified in Charter)

              Nevada                  0-27753                 98-0206979
  (State or Other Jurisdiction      (Commission             (IRS Employer
        of Incorporation)           File Number)          Identification No.)

        19th Floor, 80 Gloucester Road, Wan Chai, Hong Kong      SAR
               (Address of Principal Executive Offices)       (Zip Code)

       Registrant's telephone number, including area code (852) 2801-5181

           Securities registered pursuant to Section 12(b) of the Act:

                                      None

           Securities registered pursuant to Section 12(g) of the Act:
                    Common Stock, par value $0.001 per share

Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 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 |_|

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not 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-K or any amendment to this
Form 10-K. |X|

Aggregate market value of the voting and non-voting common equity held by non-
affiliates of the registrant as of March 28,2002 was $13,233,022.

Number of shares of Common Stock outstanding as of March 28, 2002 was
22,055,037.

Documents incorporated by reference: None

<PAGE>

ITEM 1. BUSINESS

Brek Energy Corporation operates through its subsidiaries in the oil and gas
exploration and the electronic payment processing businesses. Before the middle
of 2001, its emphasis had been on the electronic payment processing business.
Since it acquired an interest in Gasco Energy, Inc., an oil and gas exploration
company, in July 2001, Brek's focus has been on that industry. Brek recently
acquired an interest in another company engaged in oil and gas exploration -
Vallenar Energy Corp.

Brek remains in development stage. It has earned insignificant revenues from its
electronic processing operations in its first three years through December
31,2001, and has not received any revenue from the oil and gas business. Brek's
longer-term ability to emerge from development stage depends upon developing its
oil and gas business and developing sufficient markets and demand for its
electronic processing business.

Brek has incurred operating losses of $11.46 million, $12.81 million and $6.35
million for the years ended December 31, 2001, 2000 and 1999. In addition, Brek
had a recovery from discontinued operations of $1.49 million for the year ended
December 31, 2001 versus a loss of $4.22 million for the year ended December 31,
2000. As at December 31, 2001 Brek's accumulated deficit was approximately $35.1
million. Brek expects its accumulated deficit to grow for the foreseeable
future. Brek did not raise any equity funds during the year ended December 31,
2001 and Brek will either have to raise new equity funds, sell some assets or
obtain debt financing sufficient to support Brek's requirements through the year
ended December 31, 2002. Any sale of equity by Brek will likely result in
substantial dilution to its shareholders.

Oil and Gas Exploration By Gasco Energy, Inc.

By agreement dated July 5, 2001, Brek acquired a series of preferred stock of
Gasco Energy, Inc. which is convertible into approximately 26% of the equity of
Gasco. Brek has elected to convert half of this preferred stock into common
stock. In February 2002, Brek entered into agreements with certain shareholders
of Gasco which provided for Brek to acquire additional 7,000,000 shares of
common stock of Gasco in exchange for 19,250,000 shares of Brek common stock.
The shareholders were Marc Bruner, Wet Coast Management Corp., Richard Jeffs,
Ralph Ruoss, Claudia Handschin, Turf Holdings Ltd., Tradewinds Investment Ltd.,
Seloz Gestion SA, Nicolas Mathys, Carrera Investments Ltd., Erich Hofer, Bruno
Sauter, Tom Fails and Equistar Capital LLC.

Gasco is engaged in locating and developing hydrocarbon prospects, primarily
located in the Rocky Mountain region. It applies new technologies to generate
and develop high-potential prospects. All of Gasco's properties are located in
the western United States.

Riverbend Project. Gasco's Riverbend Project consists of approximately 117,000
gross acres in the Uinta Basin of northeastern Utah, some of which is leased by
Gasco, some of which is subject to farmout and other agreements under which
Gasco may earn leasehold interests, and some of which is held by third parties.
A farmout agreement is one in which the owner of


                                     - 3 -
<PAGE>

a lease assigns it or a portion of it to another person who then has a right to
drill one or more wells on the leased property and to receive a portion of the
revenues, if any, from the wells. Gasco's geologic and engineering focus is
concentrated on three tight-sand formations in the basin: the Wasatch, Mesaverde
and Mancos formations.

In December 2000, Gasco entered into an agreement with Phillips Petroleum, a
major oil and gas company, that defined a 60,000-acre Area of Mutual Interest,
referred to herein as an AMI, within the Riverbend project, not all of which is
currently leased by either Gasco or Phillips. Under the terms of this agreement,
Phillips paid $1,000,000 to Gasco upon execution of the agreement, and later
expended $8,000,000 in connection with drilling and completing three producing
wells. As a result of Phillips' drilling, Gasco earned additional acreage under
certain farmout agreements during 2001. The agreement further afforded Phillips
the right to acquire an 80% interest in all of Gasco's leases and farmout
agreements within the AMI by assigning two leases within the AMI to Gasco.

There has been some uncertainty as to whether Phillips timely exercised its
right to acquire the 80% interest in all of Gasco's leases and contracts within
the AMI. However, Gasco has indicated its willingness, subject to the
satisfaction of certain conditions, to accept the assignment of the two leases,
which have since been tendered by Phillips, and to proceed with the assignment
of the 80% interest to Phillips, and Phillips has indicated that it will begin
drilling a new earning well in the AMI on April 17, 2002. Gasco is currently
considering whether or not to participate in this well.

During January 2002, Gasco entered into an agreement with Halliburton Energy
Services under which Halliburton has the option to earn a participation interest
proportionate to its investment (not to exceed 50%) by funding the completions
of Wasatch wells. Gasco, at its option, may elect to limit Halliburton's funding
and the resulting participation interest to 25%. Gasco and Halliburton will also
share technical information through the formation of a joint technical team.
Gasco began drilling the first Wasatch well during February 2002. Gasco
anticipates drilling three gross (1.5 net) wells in this area during 2002 and
has set its capital budget for this purpose at $3,000,000. After the wells
drilled under this agreement have reached payout status, as defined in the
agreement, Halliburton will retain an interest equal to 5% of Gasco's total
interest prior to payout. Payout occurs when the revenue from the production of
a well equals the cost of drilling, completing and equipping the well.

Greater Green River Basin Project. In Wyoming, Gasco established an AMI with
Burlington Resources covering approximately 330,000 acres in Sublette County
within the Greater Green River Basin. As of March 15, 2002, Gasco had leased
approximately 67,000 acres in this area. The exploration agreement governing the
AMI requires Burlington to drill two wells and to shoot 180 miles of
high-resolution two-dimension seismic. During 2001, three shallow wells were
drilled in this area for the purpose of holding acreage and earning expiring
leasehold. Two of the wells tested only the Fort Union and Upper Lance
formations and the third well tested all zones. All of these wells have been
cased and are in various stages of completion. They did not evaluate the deeper,
high-potential Middle and Lower Lance formations, which are prolific producers
in the nearby Jonah Field and Pinedale


                                     - 4 -
<PAGE>

Anticline area. Gasco and Burlington are targeting these deeper formations with
their ongoing seismic and exploration activities.

In 2001, Burlington drilled two wells and shot 80 miles of seismic. As of March
15, 2002, one of the wells drilled was being completed. Burlington has advised
Gasco that it plans to complete the second well, complete the seismic program
and drill additional wells during 2002. Gasco anticipates participating in the
drilling of one gross well in this area and has set its 2002 capital budget for
this purpose at $750,000.

During 2002, Gasco purchased additional real property in Sublette County,
Wyoming: a 50% interest in 21,613 acres for approximately $1,411,000; a 20%
interest in 4,098 acres for approximately $107,000; and leasehold interests
covering approximately 16,606 acres for approximately $1,500,000. In connection
with this last acquisition, Gasco received an exclusive option to purchase an
additional 72,583 acres in this area. Monthly payments of $300,000 are required
during 2002 in order to maintain this option. Gasco may elect to exercise its
option to complete the transaction at any time.

On February 26, 2002, Gasco began drilling a well in the Southwest Jonah field
located in the Greater Green River Basin in Sublette County, Wyoming. This was
the first well drilled within a newly created AMI with Cabot Oil and Gas,
consisting of nine sections (5,760 gross acres, 1,440 net acres). The well was
drilled to a total depth of 11,000 feet. The well encountered natural gas, but
not in sufficient quantities to be deemed economic, making it a "dry hole."
Gasco has an option to drill additional wells within the AMI if the new
interpretation of the well's data in integration with the seismic data warrants
such testing. The net dry hole cost of this well is estimated at $500,000.

Southern California Project. Gasco currently leases approximately 3,900 net
acres in the Kern and San Luis Obispo Counties of southern California. It has no
drilling or development plans for this acreage during 2002, but plans to
continue paying leasehold rentals and other minimum geological expenses to
preserve this acreage. Gasco may consider selling this acreage in the future.

Productive Gas Wells. The following table summarizes Gasco's productive and
shut-in gas wells as of December 31, 2001. Productive wells are producing wells
and wells capable of production. Shut-in wells are wells that are capable of
production but are currently not producing. Gross wells are the total number of
wells in which Gasco has an interest. Net wells are the sum of Gasco's
fractional interests owned in the gross wells.

                                                                 Gross       Net

Producing gas wells                                                4         1.5
Shut-in gas wells                                                  4         3.2
                                                                   -         ---

        Total                                                      8         4.7
                                                                   =         ===

<PAGE>

Gasco does not operate any of these wells. Of the four producing wells, three
are operated by Phillips Petroleum Company and one is operated by Wasatch Energy
Corp.

Oil and Gas Acreage. The following table sets forth the undeveloped leasehold
acreage, by area, held by Gasco as of December 31, 2001. Undeveloped acres are
acres on which wells have not been drilled or completed to a point that would
permit the production of commercial quantities of oil and gas, regardless of
whether or not such acreage contains proved reserves. Gross acres are the total
number of acres in which Gasco has a working interest. Net acres are the sum of
Gasco's fractional interests owned in the gross acres. In certain leases,
Gasco's ownership is not the same for all depths; therefore, the net acres in
these leases are calculated using the lowest ownership interest at any depth.

                                                       Gross                 Net

Utah                                                  116,997             81,034
Wyoming                                                52,363             45,232
California                                              3,868              3,866
                                                      -------            -------

           Total acres                                173,228            130,132
                                                      =======            =======

In 2002, Gasco acquired approximately 42,317 gross (28,233 net) undeveloped
acres in Sublette County Wyoming. On March 7, 2002, Gasco completed a strategic
exchange of acreage within the Uinta Basin in northeastern Utah, whereby it
received 3,359 gross acres (2,474 net) in exchange for 320 gross acres (160 net)
and the contractual right to earn Wasatch rights on approximately 2,463 net
Uinta Basin acres.

Gasco has an option to acquire 72,583 acres in the Greater Green River Basin.
Gasco can also earn a 37.5% interest in an additional 21,760 acres in Sublette
County Wyoming if it participates in the drilling of one well prior to November
2002. Gasco also has the right to earn a 20% interest in 21,951 gross acres
within the Uinta Basin by participating in the drilling of four wells prior to
February 2004.

Drilling Activity. The following table sets forth Gasco's drilling activity
during the year ended December 31, 2001. Gasco had no drilling activity during
the years ended December 31, 2000 and 1999.

                                                                 Gross       Net
Exploratory Wells:
Productive                                                         4         1.6
Dry                                                                2           2
                                                                   -         ---

Total wells                                                        6         3.6
                                                                   =         ===

Oil and Gas Exploration Projects by Vallenar Energy Corp.

<PAGE>

In March 2002, Brek acquired 2,512,500 shares of common stock of Vallenar Energy
Corp. which, together with the 733,333 shares of common stock issuable upon
conversion of preferred stock of Vallenar held by Brek, represents approximately
25% of Vallenar's equity. For as long as at least one-half of the preferred
stock is outstanding, it is entitled as a class to at least 26% of the total
voting power of Vallenar. Brek is entitled to designate one director who must
sit on the executive committee of the board or additional voting rights accrue
to the preferred stock. All decisions of this executive committee must be
unanimous. Brek is playing an active role in the management of Vallenar.

Vallenar holds leases covering approximately 8,540 acres in the Rocksprings
Prospect, which is located in central Edwards County, Texas, and is a part of
the Geronimo Creek Prospect. The Geronimo Creek Prospect is a shallow, heavy oil
play within the Cretaceous aged Glen Rose limestone and Travis Peak sandstone.
It is a north-south oriented, faulted anticline having approximately 75 feet of
closure covering approximately 29,500 acres. Vallenar has advised Brek that it
intends to complete a one-to-two well, controlled situation core test to
determine the recovery factor of the oil. Assuming the core test results are
favorable, Vallenar's management has recommended that a five-acre pilot program
then be implemented to test recovery methods.

Electronic Payment Processing

Brek was formed on September 16, 1998 with the name of First Ecom.com, Inc., to
facilitate electronic payment processing of e-commerce transactions for banks
and their merchants through the medium of the Internet. It continues to do
business in this area through its wholly owned subsidiary First Ecom Systems
Limited, referred to herein as FESL. FESL has developed an electronic gateway to
convert consumers' credit card information collected by merchants on the
Internet into a format that can be processed by banks. FESL acts as a payment
system service provider between banks, online merchants and consumers. The
principal geographic area in which FESL provides its services is throughout
Asia. FESL charges banks service fees for processing transactions through this
gateway on their behalf. Brek's electronic payment processing business has not
generated any significant revenues to date, and management is reviewing various
options for this business.

Payment Processing Over the Internet.

To purchase goods or services over the Internet, a customer generally visits a
merchant's web site to view and select these goods or services. Purchases are
almost invariably paid for by credit card, and prior to furnishing the goods or
services a merchant requires the customer to submit his credit card details and
seek authorization to charge the card for the purchase.

To accept payment by credit card, a merchant must establish a bank account with
a financial institution and configure his web site for this purpose by credit
cards for goods or services ordered from him online. Payment then occurs in
three steps: authorization, settlement and funds transfer.

<PAGE>

After completing the order form and shipping details on a FESL-enabled
merchant's web site, a customer is redirected to a secure FESL payment page on
the site. The data is encrypted and sent to the FESL's gateway.

The payment gateway then routes the authorization request into the appropriate
card network (e.g. VISA, MasterCard, American Express), where it is forwarded to
the bank that issued the customer's credit card.

The issuing bank approves or declines the transaction. If it approves a
transaction, it blocks the relevant amount of funds in the consumer's account,
reducing the cardholder's available credit limit by the authorized amount. Its
response is routed back through the appropriate card network to FESL's payment
gateway and finally over the Internet to the merchant's web site and the
consumer simultaneously. The entire process typically takes less than 10
seconds, so the consumer is advised almost immediately whether or not his
purchase has been approved. The merchant may from time to time review the status
of transactions by accessing the Merchant Accounting & Reporting System
(referred to as MARS), FESL's proprietary software, using a web browser over the
Internet. This software records the status of all purchases made by consumers on
a FESL-enabled merchant's web site. A patent application for MARS was filed with
the United States Patent and Trademark Office on August 29, 2000 by the
inventor, Enzo Michelangeli, who assigned all his rights in the application to
Brek on November 20, 2000. The cost of this application was $18,800. MARS has
been licensed to Transworld Payment Solutions N.V.

In the case of approved purchases the merchant must ship the goods or provide
the services. Once this has been done, the merchant is permitted to request
settlement of the transaction, and does so by initiating the settlement request
in his MARS account, usually on a batch-by-batch basis.

The settlement request from the merchant is routed to the merchant's acquiring
bank. The acquiring bank will request payment from the bank that issued the
consumer's credit card. The issuing bank then releases the funds to the
merchant's bank, completing the payment process.

FESL's Operations and Technology.

FESL continues the program, started in 2000, of working directly with various
banks who in turn offer electronic payment services to their merchant customers.
FESL has enabled two banks, which currently have some 60 merchants whose
e-commerce transactions are authorized and approved through FESL's payment
gateway. From the time they were enabled in 2000 through January 31, 2002, these
banks executed over 250,000 transactions using the FESL's payment gateway.

In August 2001, FESL entered into an agreement with United Overseas Bank
(Malaysia) Bhd to process its ecommerce transactions. To date one merchant
customer of this bank has been activated.

<PAGE>

In 2002, FESL was certified by American Express to handle ecommerce transactions
for its merchants in the Asia Pacific region. The first merchants are expected
to be activated in the first half of 2002.

FESL owns and operates its own payment gateway technology and its merchant
accounting and reporting systems on redundant servers in Hong Kong. FESL
maintains engineers at all times to monitor the gateway. The servers have been
in constant operation since September 1999 without failure.

The software FESL provides to merchants to connect their web sites to FESL's
gateway encrypts the transaction information sent over the Internet to the
gateway, which in turn encrypts the information that it sends to payment switch.
This encryption is 128-bit key strength. A version of this software has been
developed in conjunction with Microsoft Corporation as a "plug-in" to the
Microsoft Site Server Commerce Edition suite of programs. Microsoft has no
rights in this software, and neither Brek not FESL have any agreements with
Microsoft.

Sold or Discontinued Businesses

Until March 31, 2001, Brek provided systems integration services through its
wholly owned subsidiary, Asia Internet Limited, which was acquired on March 31,
2000. In February 2001 Brek decided, due to the downturn in Internet related
business in Hong Kong and the surrounding area, to terminate this business. Asia
Internet Limited ceased operations effective as of March 31, 2001.

In June 2001 Brek acquired the remaining 50% of the equity of, and loans payable
by, First Ecommerce Data Services Limited, referred to as FEDS, which was
headquartered in Bermuda, from the Bank of Bermuda for cash of $4,289,542 plus
the cancellation of options to purchase 500,000 shares of Brek common stock. On
October 19, 2001, Brek sold its 100% interest in FEDS to Transworld Payment
Solutions N.V. for cash of $1,663,986 plus a note payable for 40% of FEDS
operating profits for the next three years with a minimum guaranteed amount of
$2 million and a maximum of $3 million. In addition, Brek was paid back loans
totaling $1,336,014.

In September 2001, Brek terminated its relationship with the Bank of Bermuda
pursuant to which it had acted as a master merchant for the bank.

Employees

Brek has significantly reduced its work force and as at February 15, 2002
employed 17 full-time personnel. Of these 9 work within the payment processing
business and the remainder support Brek's corporate functions and oil and gas
business. It is expected that additional personnel will be hired for the oil and
gas business to accomplish Brek's business plans. None of Brek's employees is a
member of a labor union.


<PAGE>

Sales and Marketing

The principal markets for any oil and gas produced by Brek are transmission
pipeline companies, utilities, refining companies and companies that actually
use the gas in their operations.

The principal market for FESL's ecommerce services are banks and their
merchants. In order for merchants to sell goods and services over the internet,
they and their banks must be able to accept and process ecommerce transactions
on widely-held credit cards such as MasterCard and Visa. FESL will continue to
focus its sales efforts in Hong Kong and other Asian markets. Its principal
marketing office is located in Hong Kong with representatives located in Europe
and Malaysia.

Competition

Oil and Gas Exploration. Brek's natural gas and petroleum exploration activities
take place in a highly competitive and speculative business atmosphere. In
seeking suitable natural gas and petroleum properties for acquisition, Brek
competes with a number of other companies operating in its areas of interest,
including large oil and gas companies and other independent operators with
greater financial resources. Management does not believe that Brek's competitive
position in the petroleum and natural gas industry will be significant.

Competition in the petroleum and natural gas exploration industry also exists in
the form of competition to acquire the most promising acreage blocks and
obtaining the most favorable prices for transporting the product. Brek is
relatively small compared to other petroleum and natural gas exploration
companies and may have difficulty acquiring additional acreage or projects, and
may have difficulty arranging for the transportation of product, in the event
Brek is successful in its exploration efforts.

Brek anticipates a tight market for obtaining drilling rigs and services, and
the manpower to run them. The current high level of drilling activity in Brek's
areas of exploration may have a significant adverse impact on the timing and
profitability of Brek's operations. In addition Gasco will be required to obtain
drilling permits for its wells, and there is no assurance that such permits will
be available timely or at all.

The prices of oil and gas are controlled by domestic and world markets.

      Electronic Payment Processing. The most dominant participant in credit
      card processing is First Data Corporation, which enjoys a near monopoly of
      the industry in North America. Outside of North America, however, First
      Data is not dominant. In Asia, FESL's principal market competition will
      come from three sources:

o     Large merchants having their own gateways;

o     Merchant banks maintaining their own gateways; and

o     Internet service providers and similar businesses that host merchant

<PAGE>

      web sites maintaining their own gateways.

Many of these competitors are substantially larger than Brek, have longer
operating histories and have much greater resources at their disposal.

FESL believes that competition will be on the basis of price and quality of
service. Because FESL's gateway is shared by many merchants and banks, FESL
believes that its prices will be competitive on the grounds of economies of
scale. It should be cheaper for each bank and merchant to share the cost of the
FESL's gateway rather than maintain its own. FESL also believes that it will
have an advantage over merchants and banks in maintaining the highest quality of
service possible. Competitors of FESL, however, will have greater resources to
allocate to the development and maintenance of a gateway should they choose to
do so.

Governmental Regulations and Environmental Laws

Brek, or a venture in which it participates, will be required to obtain local
government and other permits for drilling oil or gas wells. These permits are
issued by whichever of the State or the Bureau of Land Management is the lessor
under the lease where the well is proposed to be drilled. The BLM is the lessor
on most of Brek's leases. Each application for permit must be accompanied by an
Environmental Assessment Report, which will be prepared by a licensed, qualified
firm retained by Brek to evaluate the environmental impact of the well. The
permit will only be granted if the report recommends it in light of the
environmental assessment. The report usually takes one week to prepare and costs
approximately $2000. Permits can take up to 18 months to obtain and generally
cost less than $ 10,000. Gasco has applied for 14 permits, of which 10 have been
granted and four are pending. No permit application by Gasco has ever been
denied.

Exploration and production activities relating to oil and gas leases are subject
to numerous environmental laws, rules and regulations. The Federal Clean Water
Act requires the construction of a fresh water containment barrier between the
surface of each drilling site and the underlying water table.

Various federal, state and local laws and regulations covering the discharge of
materials into the environment, or otherwise relating to the protection of the
environment, may affect Brek's operations and costs through their effect on oil
and gas exploration, development and production operations. Environmental laws
and regulations have changed substantially and rapidly over the last 30 years,
and Brek anticipates that there will be continuing changes. Laws and regulations
protecting the environment have generally become more stringent in recent years,
and may in certain circumstances impose "strict liability," rendering a person
liable for environmental damages without regard to negligence or fault on the
part of such person. Such laws and regulations may expose Brek to liability for
the conduct of operations or conditions caused by others, or for acts of Brek
which were in compliance with all applicable laws at the time such acts were
performed. Increasingly strict environmental restrictions and limitations have
resulted in increased operating costs for Brek and other businesses throughout
the United States, and it is possible that the costs of compliance with

<PAGE>

environmental laws and regulations will continue to increase. The modification
of existing laws or regulations or the adoption of new laws or regulations
relating to environmental matters could have a material adverse effect on Brek's
operations. In addition, Brek's existing and proposed operations could result in
liability for fires, blowouts, oil spills, discharge of hazardous materials into
surface and subsurface aquifers and other environmental damage, any one of which
could result in personal injury, loss of life, property damage or destruction or
suspension of operations.

The Comprehensive Environmental Response, Compensation and Liability Act
("CERCLA"), also known as the "Superfund" law, requires payments for cleanup of
certain abandoned waste disposal sites, even though such waste disposal
activities were undertaken in compliance with regulations applicable at the time
of disposal. Under the Superfund law, liability is joint and several, and one
party may be required to bear more than its proportional share of cleanup costs
at a site where it has responsibility pursuant to the legislation if payments
cannot be obtained from other responsible parties. Other legislation mandates
cleanup of certain wastes at facilities that are currently being operated.
States also have regulatory programs that can mandate waste cleanup. CERCLA
authorizes the Environmental Protection Agency ("EPA") and, in some cases, third
parties to take actions in response to threats to the public health or the
environment and to seek to recover from the responsible classes of persons the
costs they incur. The scope of financial liability under these laws involves
inherent uncertainties.

It is not anticipated that Brek will be required in the near future to expend
material amounts because of environmental laws and regulations, but inasmuch as
such laws and regulations are frequently changed, Brek is unable to predict the
ultimate future cost of compliance.

Brek believes it is presently in compliance with all applicable federal, state
or local environmental laws, rules or regulations; however, continued compliance
(or failure to comply) and future legislation may have an adverse impact on
Brek's present and contemplated business operations.

No assurance can be given as to what effect these present and future laws, rules
and regulations will have on Brek's current and future operations.

The Company

Brek was incorporated on February 12, 1999 in the state of Nevada in the United
States. On February 12, 1999, before issuing any shares of capital stock, Brek
consummated an agreement and plan of merger with JRL Resources Corp., a Florida
corporation, whereby JRL's 12,040,000 outstanding shares of common stock were
converted into 12,040,000 shares of Brek's common stock on a one-for-one basis.
JRL was incorporated in Florida on November 13, 1996 and was inactive from the
time of its formation until its merger with Brek. Before August 18, 1998, JRL
was named Vantage Sales Corp. Shortly before this merger, JRL had acquired all
the outstanding capital stock of First Ecommerce Asia Limited, which was then
Brek's only direct subsidiary, and is located in Hong Kong.

<PAGE>

First Ecommerce Asia Limited was incorporated in Hong Kong on September 16,
1998. Before December 10, 1998, it was named Gold Pacific Management Limited. On
January 28, 1999 all of First Ecommerce Asia Limited's outstanding shares of
common stock were exchanged for 985,000 of JRL's 1,025,000 then-outstanding
shares plus 3,015,000 newly issued shares, and it became a wholly owned
subsidiary of JRL. For accounting purposes, this transaction was treated as an
acquisition of JRL by First Ecommerce Asia Limited, and therefore the financial
information contained herein is only presented from September 16, 1998, the date
on which First Ecommerce Asia Limited was formed. JRL had no operations before
this date. When JRL was merged into Brek, First Ecommerce Asia Limited became
the subsidiary of Brek.

Brek's shareholders approved changing the name of the corporation from First
Ecom.com, Inc. to Brek Energy Corporation at the Annual Meeting on January 29,
2002. The amended articles of Brek were filed with the State of Nevada on
January 31, 2002.

Brek's headquarters are presently located at 19th Floor, 80 Gloucester Road, Wan
Chai, Hong Kong SAR.

Risk Factors

Brek is in development stage and an investment in Brek's common stock involves a
high degree of risk. Brek's business and results of operations could be
seriously harmed and the trading price of Brek's common stock could decline
should any of these risks come to fruition.

General Risks

Brek's Limited Operating History May Prevent it From Achieving Success

Brek has a limited operating history, which may prevent it from achieving
success. Its revenue and income potential are unproven. It will encounter
challenges and difficulties frequently encountered by early-stage companies in
new and rapidly evolving markets. Brek's date of inception was September 16,
1998. Chief among these challenges and difficulties are:

      Being able to adequately prove up its resources

      Locating and acquiring proper acquisition targets

      Locating and acquiring direct interests in oil and gas prospects

      Raising adequate additional equity and/or adequate financings

      Potential acquisitions being able to prove up their resources

<PAGE>

      Persuading banks to outsource their Internet credit card processing

      Processing a sufficient volume of Internet credit card transactions which,
      particularly in Asia, may not be present in sufficient quantity to
      generate required revenues

      Persuading banks and others to purchase the e-Acquirer and other products

It may fail to address any of these challenges and failure to do so would
seriously harm Brek's business and operating results. In addition, because of
Brek's limited operating history, it has limited insight into trends that may
emerge and affect Brek's business.

Brek has Incurred Losses and Expects Future Losses

Brek has experienced operating losses in each period since inception and expects
these operating losses to continue in the foreseeable future. Brek may not have
sufficient resources to increase its revenues enough to achieve profitability.
Brek's failure to increase its revenues significantly would seriously harm
Brek's business and operating results. In fact, Brek may not have any revenue
growth. On December 31, 2001, Brek had an accumulated deficit of approximately
$35.1 million, a significant portion of this loss, $10,461,322, was incurred
during the year ended December 31,2001, which included a non-recurring charge of
$3.16 million, a further write down of the investment in uniView of $0.314
million and a recovery from discontinued operations of $1.49 million. Brek has
recorded the non-recurring charge to reduce the carrying value of the stock of
its subsidiary First Ecommerce Data Services Limited to net realizable value.
This stock was subsequently sold for $3,451,235, which was its written-down
value. On June 30, 2002, Brek's accumulated deficit had grown to approximately
$40.4 million.

Brek May Not Be Able to Obtain Future Financing

Brek will be required to raise additional capital in 2002. It may not be able to
raise capital when needed on terms favorable to it or at all. Brek has relied on
the sale of its equity capital to fund working capital and the acquisition of
its assets. Any future financing will likely result in substantial dilution to
Brek's stockholders. Failure to generate operating cash flow or to obtain
additional financing could delay or cause indefinite postponement of further
exploration and development of its oil and gas prospects or result in the loss
or sale of such properties.

Brek May Not Be Able to Attract and Retain Personnel

Brek may not be successful in attracting, assimilating, or retaining qualified
personnel with knowledge and expertise in the various facets of oil and gas
exploration and development industry. Like other companies in Hong Kong, Brek
faces intense competition for qualified

<PAGE>

personnel there. Brek does not consider any of its employees to be of key
importance. Until August 31, 2002, it had an employment agreement with its chief
executive officer, but he resigned on that date. It currently has an employment
agreement with its chief financial officer. Brek does not carry life insurance
on any of its employees.

Brek Must Replace Its Chief Executive Officer

Gregory M. Pek informed Brek that he did not wish to extend his employment
agreement with Brek, which expired on August 31, 2002. Brek will have to engage
a new Chief Executive Officer in a timely enough fashion so that Brek is not
adversely affected.

Brek's Stock Price May Fluctuate

The market price of Brek's common stock may fluctuate significantly in response
to a number of factors, some of which (such as interest rates, general economic
conditions and trading multiples of comparable companies) are beyond Brek's
control, and some of which (such as operating results, announcements of new
products, new customers, acquisition of potential oil and gas entities and
prospects, results of exploration and development) are within Brek's control. In
addition, Brek's common stock is sometimes very thinly traded and this
characteristic may exaggerate any fluctuations. Brek's trading price may not be
an accurate reflection of its value.

Future Sales of Shares Could Depress Brek's Stock Price

If Brek's stockholders sell substantial amounts of Brek's common stock in the
public market, the market price of Brek's common stock could fall. All of Brek's
outstanding common stock is eligible for sale in the public market immediately.

Shareholders Will Receive No Dividends

Brek has never paid dividends and has no current plans to do so. Given Brek's
financial position, it is unlikely that it will pay any dividends in the
foreseeable future. Brek plans instead to retain earnings, if any, to fund
internal growth.

Difficulty of Enforcing Legal Process

It may be difficult or impossible to effect service of process within the United
States upon the directors of Brek (other than Andrew Leitch), to bring suit in
the United States or to enforce, in the U.S. courts, any judgment obtained there
against such persons predicated upon any civil liability provisions of the U.S.
federal securities laws. All of Brek's directors, except Andrew Leitch, reside
outside the United States. A substantial portion of the assets of such persons
are located outside the United States. Foreign courts may not entertain original
actions against Brek's directors or officers predicated solely upon U.S. federal
securities laws. Furthermore, judgments predicated upon any civil liability
provisions of the U.S. federal securities laws may not be directly enforceable
in foreign countries.

<PAGE>

Oil and Gas Exploration Risks

Oil or Gas Wells may be Unproductive or Uneconomic

The business of exploring for and producing oil and gas involves a substantial
risk of investment loss that even a combination of experience, knowledge and
careful evaluation may not be able to overcome. Drilling oil and gas wells
involves the risk that the wells will be unproductive or that, although
productive, the wells do not produce oil and/or gas in economic quantities.
Other hazards, such as unusual or unexpected geological formations, pressures,
fires, blowouts, loss of circulation of drilling fluids or other conditions may
substantially delay or prevent completion of any well. Adverse weather
conditions can also hinder drilling operations.

A productive well may become uneconomic in the event water or other deleterious
substances are encountered, which impair or prevent the production of oil and/or
gas from the well. In addition, production from any well may be unmarketable if
it is impregnated with water or other deleterious substances.

Some of the Risks of Drilling and Operating Oil or Gas Wells are Uninsurable

Brek may suffer losses from uninsurable hazards or from hazards which the
operator or Brek has chosen not to insure against because of high premium costs
or other reasons. Brek may become subject to liability for pollution, fire,
explosion, blowouts, cratering and oil spills against which Brek cannot insure
or against which Brek may elect not to insure. Such events could result in
substantial damage to oil and gas wells, producing facilities and other property
and personal injury. The payment of any such liabilities may have a material,
adverse effect on Brek's financial position.

No Assurance of Titles

If an examination of the title history of petroleum and natural gas lease that
Brek has purchased reveals that it has been purchased in error from a person who
was not the owner of the mineral interest purportedly covered by the lease,
Brek's interest would be worthless. In that event, the lease would be lost.

Brek plans not to undergo the expense of retaining lawyers to examine the title
to the mineral interest to be placed under lease or already placed under lease.
Rather, Brek will rely upon the judgment of petroleum and natural gas lease
brokers or land men who perform the fieldwork in examining records in the
appropriate governmental office before attempting to place under lease a
specific mineral interest.

If such an examination is ever done, it may reveal that curative work must be
done to correct deficiencies in the marketability of the title, and such
curative work entails expense. The work might include obtaining affidavits of
heirship or causing an estate to be administered.

Environmental Regulations May Prevent or Delay Drilling Oil or Gas Wells

<PAGE>

The petroleum exploration and production activities of Brek are subject to
certain federal, state and local laws and regulations relating to environmental
quality and pollution control. Such laws and regulations increase the costs of
these activities and may prevent or delay the commencement or continuance of a
given operation. Specifically, Brek is subject to legislation regarding
emissions into the environment, water discharges, and storage and disposition of
hazardous wastes. In addition, legislation has been enacted which requires well
and facility sites to be abandoned and reclaimed to the satisfaction of state
authorities. Such laws and regulations have been changed from time to time in
the past and may be changed again in the future to impose an even greater burden
on Brek.

Governmental Regulations May Increase Expenses and Delay or Prevent Drilling Oil
or Gas Wells

Any increases in the regulatory burden on the petroleum and natural gas industry
created by new legislation would increase Brek's cost of doing business. A major
risk affecting drilling is the need to obtain drilling permits. Delays in
obtaining drilling permits, the failure to obtrain a drilling permit for a well,
or a permit with unreasonable conditions or costs attached to it, could have a
material adverse effect on Brek's ability to develop its properties fully.
Petroleum and natural gas exploration, development and production are subject to
various types of regulation by local, state and federal agencies. Legislation
affecting the petroleum and natural gas industry is under constant review for
amendment and expansion. Also, numerous departments and agencies, both federal
and state, are authorized by statute to issue and have issued rules and
regulations binding on the petroleum and natural gas industry and its individual
members, some of which carry substantial penalties for failure to comply

Natural Gas and Oil Prices May Fall

A decline in the price of natural gas and oil prices would result in a
commensurate reduction in Brek's income for the production of oil and gas. In
the event prices fall substantially, Brek may not be able to realize a profit
from its production and would continue to operate at a loss. In recent decades,
there have been periods of both worldwide overproduction and underproduction of
hydrocarbons and periods of both increased and relaxed energy conservation
efforts. Such conditions have resulted in periods of excess supply of, and
reduced demand for, crude oil on a worldwide basis and for natural gas on a
domestic basis. These periods have been followed by periods of short supply of,
and increased demand for, crude oil and natural gas. The excess or short supply
of crude oil has placed pressures on prices and has resulted in dramatic price
fluctuations even during relatively short periods of seasonal market demand.

Brek May Not Be Able to Compete in This Industry

Brek's competitors may be able to pay more for petroleum and natural gas
properties than Brek and may be able to better evaluate prospects than Brek. In
addition, Brek's competitors may have a greater ability to continue exploration
activities during periods of low hydrocarbon market prices. Brek's ability to
acquire additional properties and to discover

<PAGE>

reserves in the future will depend upon its ability to evaluate and select
suitable properties and to consummate transactions in a highly competitive
environment. The petroleum and natural gas industry is intensely competitive and
Brek competes with other companies, which have greater resources. Many of its
competitors not only explore for and produce crude petroleum and natural gas but
also carry on refining operations and market petroleum and other products on a
regional, national or worldwide basis. There is also competition between the
petroleum and natural gas industry and other industries with respect to the
supply of energy and fuel to industrial, commercial and individual customers.
There is no assurance that Brek will be able to effectively compete against such
companies.

Electronic Payment Processing Risks

Brek May Fail to Expand Its Customer Base

Brek's success in the payment processing business is substantially dependent on
the growth of its customer base of banks that use its e-Acquirer system. If it
fails to increase its customer base, its business and operating prospects would
be seriously harmed. Brek's ability to attract customers will depend on a
variety of factors, including the price and quality of Brek's products and
services as well as Brek's ability to market its products and services
effectively.

Brek May Not Be Able to Compete in The Processing Market

Brek's competitors have extensive customer bases and strong customer
relationships that they could leverage, including relationships with Brek's
current and potential customers. This competition will impede Brek's ability to
expand its customer base. Brek's payment processing markets are new, rapidly
evolving and highly competitive, and it expects this competition to persist and
intensify in the future. Brek's failure to maintain and enhance its competitive
position could seriously harm its business and operating prospects. It will
encounter competition from a number of sources. These competitors also have
significantly more established customer service organizations than Brek does.

Brek May Not Be Able to Develop Adequate Sales and Marketing Capabilities

Brek needs to expand its marketing and sales operations in order to increase
market awareness of Brek's services and generate increased revenues. Brek may
lack the resources to enable this expansion, however. Brek has only been
marketing its payment processing services since early 1999. Brek's services
require sophisticated sales effort targeted at senior management of Brek's
prospective customers, which are principally banks and large international
conglomerates. Competition for qualified sales personnel is intense, however,
and Brek may not be able to hire enough qualified individuals in the future.

Use of the Internet and Growth of E-commerce May Not Continue

Demand for Brek's payment processing business depends on consumers' using the
internet for e-commerce. Any reduction in such use will reduce the demand for
Brek's payment processing services. Rapid growth in the use of the Internet has
occurred only recently. As a

<PAGE>

result, its acceptance and use may not continue to develop at historical rates,
and a sufficiently broad base of consumers may not adopt, or continue to use,
the Internet and other online services as a medium of commerce. Demand and
market acceptance for recently introduced services and products over the
Internet are subject to a high level of uncertainty, and there exist few proven
services and products.

The Internet may not be accepted as a long-term commercial marketplace for a
number of reasons, including potentially inadequate development of the necessary
network infrastructure or delayed development of enabling technologies and
performance improvements. Brek's success will depend, in large part, upon third
parties maintaining the Internet infrastructure to provide a reliable network
backbone with the necessary speed, data capacity, security and hardware for
reliable Internet access and services.

Cautionary Statement Regarding Forward-Looking Statements

In the interest of providing the shareholders with certain information regarding
Brek's future plans and operations, certain statements set forth or incorporated
by reference in this registration statement relate to management's future plans
and objectives. Such statements are forward-looking statements within the
meanings of Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended. All statements other
than statements of historical fact included in this report, including, without
limitation, statements regarding Brek's future financial position, business
strategy, budgets, projected costs and plans and objectives of management for
future operations, are forward-looking statements. Forward-looking statements
generally can be identified by the use of forward-looking terminology such as
"may," "will," "expect," "intend," "project," "estimate," "anticipate,"
"believe," or "continue" or the negative thereof or similar terminology.
Although any forward-looking statements contained or incorporated by reference
in this registration statement or otherwise expressed by or on behalf of Brek
are, to the knowledge and in the judgment of the officers and directors of Brek,
believed to be reasonable, there can be no assurances that any of these
expectations will prove correct or that any of the actions that are planned will
be taken.

Forward-looking statements involve known and unknown risks and uncertainties,
which may cause Brek's actual performance and financial results in future
periods to differ materially from any projection, estimate or forecasted result.
Important factors that could cause actual results to differ materially from Brek
expectations include those discussed under the caption "Risk Factors" above. All
subsequent written and oral forward-looking statements attributable to Brek, or
persons acting on its behalf, are expressly qualified in their entirety by these
important factors. Brek assumes no duty to update or revise its forward-looking
statements based on changes in internal estimates or expectations or otherwise.

ITEM 2. PROPERTIES

Brek currently leases an office of approximately 2,500 square feet at the
address of its headquarters in Hong Kong for $6,870 per month plus government
rates. This lease expires

<PAGE>

on February 28, 2003. Gasco and Vallenar hold oil and gas leases as described
above, and each leases office space.

ITEM 3. LEGAL PROCEEDINGS

Neither Brek, Gasco nor Vallenar is a party to any legal proceedings, which, in
Brek's opinion, after consultation with legal counsel, could have a material
adverse effect on Brek.

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

At Brek's 2000 Annual Meeting held on January 19, 2001, the shareholders elected
the six Board Members for terms which expire at the 2001 Annual Meeting. The
shareholders also ratified the appointment of Deloitte Touche Tohmatsu as Brek's
Independent Accountants. At Brek's 2001 Annual Meeting held on January 29, 2002
the shareholders elected the seven Board Members for terms which expire at the
2002 Annual Meeting, ratified the appointment of Deloitte Touche Tohmatsu as
Brek's Independent Accountants, approved the creation of the 2001 Stock
Option/Warrant Plan and approved amending the articles of Brek to change its
name to Brek Energy Corporation and to increase the number of authorized common
shares from 200 million share with a par value of $0.001 to 300 million shares
with a par value of $0.001. Although a proposal to amend Brek's articles to
create 50 million preferred shares received more affirmative votes than negative
ones, it did not receive the approval of a majority of all the outstanding
stock, as required by Nevada law.

ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS

Brek's common stock has traded on the Nasdaq National Market System under the
symbol "FECC" from June 6, 2000 until February 19, 2002 when the symbol was
changed to "BREK". Prior to that it traded on the OTC under the symbol "FECC"
since March 8, 1999. Brek's common stock has also traded on the Berlin
over-the-counter stock exchange since January 27, 2000 and has been listed on
the Bermuda Stock Exchange since December 23, 1999. In addition, Brek's Units
(each of which consists of one share of common stock and a warrant to purchase
one third of a share of common stock) were listed on the Bermuda Stock Exchange
from December 23, 1999 until March 12, 2001 when the units were "unbundled"
after which the units only consist of a warrant to purchase one third of a share
of common stock of Brek. The following table sets forth the high and low closing
prices for the common stock for the periods indicated.

<PAGE>

Year/Quarter                                                 High           Low
------------                                                 ----           ---

                                      2001

Fourth Quarter                                               0.62           0.30
Third Quarter                                                0.90           0.32
Second Quarter                                               1.35           0.81
First Quarter                                                1.88           0.75

                                      2000

Fourth Quarter                                              $4.00          $0.75
Third Quarter                                               10.03           4.34
Second Quarter                                              23.00           7.88
First Quarter                                               32.50           7.94

As of February 28, 2002 there were approximately 107 holders of record of the
common stock. On March 28, 2002, the closing sales price of Brek's common stock
was $0.60 per share.

Brek has not paid any cash dividends on its Common Stock and does not presently
intend to do so. Future dividend policy will be determined by its Board of
Directors on the basis of its earnings, capital requirements, financial
condition and other factors deemed relevant.

The transfer agent and registrar of Brek's Common stock is Nevada Agency and
Trust Company, 50 West Liberty, Suite 880, Reno, Nevada 895O1. The transfer
agent and registrar of Brek's Units is The Bank of Bermuda Limited, 6 Front
Street, Hamilton, Bermuda.

Recent Sales of Unregistered Securities

On March 28, 2002 the Company issued 2,845,000 shares of common stock at $0.50
per share producing aggregate proceeds of $1,397,500, which is net of related
share issue cost of $25,000, received by the Company. The sales were to 14
investors, of which 12 were non-US persons outside the United States and two
were accredited investors in the United States. These investors were Gregory
Pek, Kenneth Telford, Ian Robinson, Liechtenstein Global Trust, Bonia Ng, Greg
Gudbranson, Happy Profit International Limited, Ultratech Capital Management,
Warwick Ventures Limited Roger Glenn, and Colin Low. Of these investors, Messrs.
Pek and Robinson are directors of the Company, and Messrs. Pek and Telford are
executive officers of the Company. Brek has been advised that the persons
indicated below have the power to vote and dispose of Brek's shares held by the
following investors: Liechtenstein Global Trust - Furst Hans-Adam von
Liechtenstein, c/o LGT Group Foundation, Herrengase 12, FL-9490 Vaduz; Happy
Profit International Limited - Brian Langdon-Pratt, 1219 Bank of America Tower,
12 Harcourt Road, Central, Hong Kong; Ultratech Capital Management - Patrick
Thomson, Tradewinds Building, Suite 401, Bay Street, Nassau, Bahamas; and
Warwick Ventures Limited - Stuart Smith, c/o LOM Securities Bermuda Ltd., 27
Reid Street, Hamilton HN11, Bermuda. This information was obtained from the
shareholders of record or their agents. In the case of Liectenstein Global
Trust, the information was obtained from a bank in Switzerland. Brek has no way
of independently verifying the accuracy of this information and does not know
whether this information is correct.

The issuances and sales were exempt under Section 4(2) under the Securities Act
of 1933, as amended, and Regulations S and D thereunder. All expenditures of
proceeds so far have been for normal overhead and other general corporate
purposes. See "Management's Discussion and Analysis of Financial Condition and
Results of Operations - Liquidity and Capital Resources."

<PAGE>

ITEM 6. SELECTED FINANCIAL DATA

The following selected financial data should be read in conjunction with Brek's
audited consolidated financial statements appearing elsewhere herein. For the
period from September 16, 1998 (date of inception) to December 31, 1998, the
consolidated financial statements are not presented as all amounts are $Nil.

<TABLE>
<CAPTION>
                                                    Year ended           Year ended            Year ended
                                                December 31, 2001     December 31, 2000     December 31, 1999
                                                -----------------     -----------------     -----------------
<S>                                                <C>                    <C>                  <C>
Revenue

Payment processing                                     301,978                 38,223               2,634

Operating expenses

Sales and marketing                                    611,628              2,113,149           1,563,246

General and administrative                           7,153,141              8,297,692           4,241,389
Systems and technology                                 836,134              1,489,056             552,221
Charges for impairment of certain
long-lived and prepaid assets                        3,159,505                949,418                  --
                                                   -----------            -----------          ----------

Total expenses                                      11,760,408             12,849,315           6,356,856

Loss from operations                               (11,458,430)           (12,811,092)         (6,354,222)
                                                   -----------            -----------          ----------

Other income/(expenses)
Interest income                                        704,725              1,527,959              36,761
Interest expense                                            --                 (2,121)           (471,424)
Loss on write down of marketable securities           (314,339)            (1,632,353)                 --
                                                   -----------            -----------          ----------

                                                       390,386               (106,515)           (434,663)
                                                   -----------            -----------          ----------

Equity in loss of affiliates                          (882,146)              (292,118)                 --
                                                   -----------            -----------          ----------

Loss from continuing operations                    (11,950,190)           (13,209,725)         (6,788,885)
                                                   -----------            -----------          ----------

Income (loss) from discontinued operations
Net income (loss)                                     (236,683)            (4,219,736)                 --
Gain on discontinuance (net of $Nil
tax effects)                                         1,725,551                     --                  --
                                                   -----------            -----------          ----------

                                                     1,488,868             (4,219,736)                 --
                                                   -----------            -----------          ----------

Loss before cumulative effect
of accounting change                               (10,461,322)           (17,429,461)         (6,788,885)

Cumulative effect of accounting change                      --               (380,000)                 --
                                                   -----------            -----------          ----------

Net loss                                           (10,461,322)           (17,809,461)         (6,788,885)
                                                   ===========            ===========          ==========

Basic and diluted loss per share
applicable to common stockholders
Continuing operations                                    (0.62)                 (0.73)              (0.56)
Discontinued operations                                   0.08                  (0.23)                 --
Cumulative effect of accounting change                      --                  (0.02)                 --
                                                   -----------            -----------          ----------

                                                         (0.54)                 (0.98)              (0.56)
Weighted average shares used in
computing per share amounts                         19,210,037             18,064,980          12,043,662
                                                    ==========             ==========          ==========

<CAPTION>
Balance Sheet Data:
                                                       2001                   2000                1999
                                                        US                    $US                 $US$
<S>                                                 <C>                    <C>                 <C>
Current Assets                                       2,596,852             32,282,424          12,159,946
Note Receivable                                      1,865,244                     --                  --
Loan Receivable                                        270,055                     --                  --
Property and Equipment                                 257,321                578,866           1,046,237
Total Assets                                        23,497,378             35,969,172          13,206,183
Deferred Rent                                               --                     --              62,017
Obligation under capital lease                              --                     --               3,788
(including current installments)
Total Liabilities                                      271,379                509,373           1,263,936
Stockholders Equity                                 23,225,999             35,459,799          11,942,247
</TABLE>

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

General

During 2001 Brek rationalized its operations, changed its primary focus to oil
and gas exploration, combined its payment gateway and related products into a
new e-Acquirer product, and limited its marketing objectives to enabling banks
in Asia. Brek discontinued the systems integration business of Asia Internet
Limited as part of the rationalization of operations.

On June 19, 2002, Brek acquired the remaining 50% of First Ecommerce Data
Services Limited ("FEDS") from the Bank of Bermuda for $4,289,542, of which
$3,581,993 was for equity of FEDS, $668,007 was to acquire the bank's interest
in a shareholder loan owed by FEDS to the bank and $39,542 was for costs of the
transaction. Warrants to purchase 500,000 shares of Brek common stock held by
the bank were cancelled in connection with this transaction, but their exercise
price far exceeded the then-market price of Brek's common stock so they were
deemed to be of no value. Their exercise price was $12 per share, and the last
trade in Brek's stock on June 19, 2002, was at $0.86 per share.

On October 19, 2002, Brek sold 100% of FEDS to Transworld Payment Solutions N.V.
for $1,663,007 plus a Note for a minimum of $2,000,000 (having a present value
of $1,885,896). Under the terms of the note, Transworld is required to pay by
March 1 in each of 2003, 2004 and 2005, 40% of the net operating profits
realized by FEDS in the preceding year, but not less than $350,000, $650,000 and
$1,000,000, respectively, nor more than $500,000, $1,000,000 and $1,500,000,
respectively, on each date. Brek expects to receive the minimum payments set
forth above and no more. At the time of the sale of FEDS, Brek also received
$1,336,014 as the repayment of shareholder loans owed by FEDS to Brek, half of
which were acquired from the Bank of Bermuda on June 19, 2002. Brek and
Transworld have never been affiliated with each other in any way.

During 2001, Brek acquired a 26% non-dilutable voting interest in Gasco Energy,
Inc. for $19 million and advanced $270,055 to Vallenar Energy Corp., which
subsequent to the year end formed part of the $350,000 acquisition of preferred
shares of Vallenar, which have a 26% non-dilutable voting interest.

<PAGE>

The majority of Brek's revenues during 2001 came from the operations carried on
through First Ecommerce Data Services Limited during the period of time that it
was a wholly-owned subsidiary however, Brek is still a development stage
enterprise and has insufficient operating history on which to base an evaluation
of its business and prospects. Any such evaluation must be made in light of the
risks frequently encountered by companies in their early states of development,
particularly for companies in the rapidly evolving sector related to the
Internet. See "Item 1. Business - Risk Factors". There is no assurance that Brek
will be successful in addressing these risks and if it fails to do so, its
financial condition and results of operations would be materially adversely
affected.

Crititical Accounting Policies

Brek prepares its consolidated financial statements in accordance with
accounting principles generally accepted in the United States of America. The
preparation of Brek's financial statements requires it to make estimates and
assumptions that affect the amounts of assets and liabilities reported and the
disclosure of contingent assets and liabilities at the date of the financial
statements and the amount of revenues and expenses reported during the period
covered by the financial statements. On an on-going basis, Brek evaluates its
estimates and judgments, including those related to its investments. Actual
results may differ from those used in making any such estimates and judgments.

The following critical accounting policies affect the more significant
assumptions and estimates used in the preparation of Brek's consolidated
financial statements.

Investment in Affiliate

Brek has accounted for its interest in Gasco using the equity method. Gasco has
incurred operating losses since Brek's investment in July 2001. Sustained
operating losses of this affiliate or other adverse events could result in
Brek's inability to recover the carrying value of the investment, which may
require Brek to record an impairment charge in the future. Through December 31,
2001, Brek has not recorded an impairment charge for this investment.

Income Taxes

Brek records a valuation allowance to reduce its deferred tax assets to the
amount that it believes is more likely than not to be realized. If in the future
Brek determines that it will be able to realize its deferred tax assets in
excess of their recorded amount, it will adjust the deferred tax asset
accordingly, which will increase income in the period the determination is made.
Likewise, if Brek determines that it will not be able to realize all or part of
its net deferred tax asset in the future, an adjustment to the deferred tax
asset would be charged to income in the period the determination is made.


<PAGE>

Impairment of Assets

Brek reviews all assets on a regular basis to ensure that there is no impairment
in the carrying value. If it determines that there has been a permanent decline
in, or Brek has become unable to recover, the carrying value of the asset, an
impairment charge will be recorded, which will have an adverse effect upon
Brek's future operating results.

Results of Operations

Revenues

Total revenues for 2001 were $301,978 as compared to $38,223 in 2000 and $2,634
in 1999. The systems integration revenue of $816,648 in 2000 which related
directly to Asia Internet Limited which was acquired on March 31,2000 was
reclassified to discontinued operations. Of the total revenue, $250,567 was due
to consolidation of FEDS revenue for the period from June 19, 2001 to October
19, 2001.

Operating Expenses

Total operating expenses incurred for 2001, 2000 and 1999 were $11,760,408,
$12,849,315 and $6,356,856, respectively. The year 2001 included a non-recurring
charge of $3,159,505 for impairment of long-lived assets, resulting from the
write-down of the carrying value of First Ecommerce Data Services Limited as at
September 30, 2001 based on the sale proceeds in October 2001, versus a similar
charge of $949,418, which resulted from a review of the carrying value of Brek's
electronic payment processing assets, in the 2000 year and no charge in 1999. Of
the total operating expenses, $936,586 was due to consolidation of FEDS expenses
for the period June 19,2001 to October 19,2001. A reclassification of the
expenses in 2000 of Asia Internet Limited to discontinued operations was made.
Significant components of operating expenses for 2001 and 2000 consisted of the
following

Expenses                                                 Amount
                                                         ------

                                             2001          2000          1999
                                             ----          ----          ----

Operating expenses

Sales and marketing                          611,628     2,113,149     1,563,246
General and administrative                 7,153,141     8,297,692     4,241,389
Systems and technology                       836,134     1,489,056       552,221
Charges for impairment of certain
long-lived and prepaid assets              3,159,505       949,418            --
                                          ----------    ----------     ---------

Total expenses                            11,760,408    12,849,315     6,356,856
                                          ==========    ==========     =========

The decrease in expenses during the 2001 year is attributable to Brek decreasing
the number of employees to a low of 14, decreased sales and marketing efforts,
decreased systems development and the discontinuance of the operations of Asia
Internet Limited.

<PAGE>

Other Income and Expenses

Interest income decreased to $704,725 in 2001 as compared to $1,527,959 in 2000
and $36,761 in 1999. This decrease was due to Brek's decreased cash position
during the year and a significant reduction in interest rates. The most
significant aspect related to the decrease in cash was due to the acquisition of
the preferred stock in Gasco Energy, Inc.

Interest expense reduced to $nil in 2001 as compared to $2,121 in 2000 and
$471,424 in 1999 as Brek did not have any borrowings during 2001.

The equity in loss of affiliates for 2001 of $882,146 consisted of Brek's share
of the losses before the acquisition of the remaining 50% interest of First
Ecommerce Data Services Limited on June 18, 2001, of $390,052 and Brek's share
of the losses of Gasco Energy, Inc. after the acquisition of its preferred stock
on July 19, 2001. Of $492,094 versus $292,118 in 2000 attributable wholly to
First Ecommerce Data Services Limited and $nil in 1999.

During 2001, Brek recorded a loss of $314,339 on the write down its investment
in shares of uniView Technologies Corporation, a NASDAQ listed company. Brek
purchased 735,295 shares, since reduced to 91,912 due to a share consolidation
in September 2001, of uniView in a August 2000 private placement for $2 million.
The closing market price on December 31, 2001 was $0.58. Brek recorded a loss of
$1,632,353 during the year ended December 31, 2000.

During 2001, Brek discontinued the operations of its systems integration
business carried on through its subsidiary Asia Internet Limited. The
discontinuation of these operations resulted in a recovery of $1,488,868 due to
the reversal of unvested stock compensation costs of $1,852,570. These
operations had an operating loss of $236,683 during 2001 versus a loss of
$4,219,736 for 2000. There were no systems integration operations during 1999.

There is no cumulative effect of accounting change this year as compared to last
year.

Liquidity and Capital Resources

Brek did not have any fund raising activities during 2001.

On March 28, 2002, Brek had $2.5 million of cash, cash equivalents and
marketable securities available to fund operations. Brek significantly lowered
its ongoing expenditures and overhead during the 2001 year by reducing the
number of employees, closing offices and leasing more affordable office space.
Although Brek believes that its current cash balances, cash equivalents,
investments and equity holdings could meet its working capital and capital
expenditure needs for 2002, Brek does expect that it will need to raise funds in
order to achieve its desired business objectives on a more timely basis. Because
Brek is not currently generating sufficient cash to fund its operations, Brek
may need to rely on external financing to meet future capital and operating
requirements. Any projections of future cash needs and cash flows are subject to
substantial uncertainty. Brek's capital requirements depend upon several
factors, including the rate of market acceptance, its ability to expand its
customer

<PAGE>

base and increase revenues, its level of expenditures for marketing and sales,
purchases of equipment, acquisitions of oil and gas entities and prospects and
other factors. If Brek's capital requirements vary materially from those
currently planned, Brek may require additional financing sooner than
anticipated. Brek can make no assurance that financing will be available in
amounts or on terms acceptable to Brek, if at all. Further, if Brek issues
equity securities, stockholders may experience additional dilution or the new
equity securities may have rights, preferences or privileges senior to those of
existing holders of common stock, and debt financing, if available, may involve
restrictive covenants which could restrict Brek's operations or finances. If
Brek cannot raise funds, if needed, on acceptable terms, Brek may not be able to
continue its operations, grow market share, take advantage of future
opportunities or respond to competitive pressures or unanticipated requirements
which could negatively impact Brek's business, operating results and financial
condition.

Brek leases office and other premises under non-cancellable operating leases
that call for payments of $216,419 during 2002 and $76,032 during 2003.

Brek does not anticipate receiving any income from its investments in Gasco or
Vallenar for the foreseeable future. The Note Receivable is due, without
interest, as follows:

                             March 1, 2003 - $350,000
                             March 1, 2004 - $650,000
                             March 1, 2005 - $1,000,000

Brek has entered into employment agreements with all of its employees. These
agreements require severance payments ranging from four to 16 weeks' salary upon
termination without cause. If the employees were all terminated without cause,
Brek would have a liability for minimum severance pay of approximately $330,000.

The proceeds of $1,422,500 that Brek received upon the issuance of 2,845,000
shares of its common stock on March 28, 2002 is being used to pay operating
expenses of Brek.

SELECTED UNAUDITED QUARTERLY CONSOLIDATED RESULTS OF OPERATIONS

The following table sets forth unaudited quarterly statements of operations data
for the four quarters ended December 31, 2001 and 2000. We believe this
unaudited information has been prepared substantially on the same basis as the
annual audited consolidated financial statements appearing elsewhere in this
report. We believe this data includes all necessary adjustments, consisting only
of normal recurring adjustments, necessary for fair presentation. You should
read the quarterly data together with the consolidated financial statements and
the notes to those statements appearing elsewhere in this report. The
consolidated results of operations for any quarter are not necessarily
indicative of the operating results for any future period. We expect that or
revenues may fluctuate significantly and in fact may be significantly less due
to the closure of the systems integration business.

<PAGE>

<TABLE>
<CAPTION>
                                               Three months ended     Three months ended   Three months ended    Three months ended
                                                December 31, 2001     September 30, 2001      June 30, 2001         March 31, 2001
                                                -----------------     ------------------      -------------         --------------
<S>                                                 <C>                   <C>                   <C>                 <C>
Revenue

Payment processing                                      59,142               205,928                24,152              12,756
                                                    ----------            ----------            ----------          ----------

Operating expenses

Sales and marketing                                    217,317               206,049                15,506             172,756
General and administrative                           1,970,356             1,725,000             1,581,343           1,876,442
Systems and technology                                 171,599               483,860                62,187             118,488
Charges for impairment of certain
long-lived and prepaid assets                               --             3,159,505                    --                  --
                                                    ----------            ----------            ----------          ----------

Total expenses                                       2,359,272             5,574,414             1,659,036           2,167,686
                                                    ----------            ----------            ----------          ----------

Loss from operations                                (2,300,130)           (5,368,486)           (1,634,884)         (2,154,930)
                                                    ----------            ----------            ----------          ----------

Other income/(expenses)
Interest income                                         13,921                56,504               246,698             387,602
Interest expense                                            --                    --                    --                  --
Loss on write down of marketable securities             (6,434)             (307,905)                   --                  --
                                                    ----------            ----------            ----------          ----------

                                                         7,487              (251,401)              246,698             387,602
                                                    ----------            ----------            ----------          ----------

Equity in loss of affiliates                          (336,393)             (155,701)             (194,653)           (195,399)
                                                    ----------            ----------            ----------          ----------

Loss from continuing operations                     (2,629,036)           (5,775,588)           (1,582,839)         (1,962,727)
                                                    ----------            ----------            ----------          ----------

Income (loss) from discontinued operations
Net income (loss)                                       (7,627)                   --                 2,271            (231,327)
Gain on discontinuance                                      --                    --                    --           1,725,551
                                                    ----------            ----------            ----------          ----------

                                                        (7,627)                   --                 2,271           1,494,224
                                                    ----------            ----------            ----------          ----------

Loss before cumulative effect
of accounting change                                (2,636,663)           (5,775,588)           (1,580,568)           (468,503)

Cumulative effect of accounting change                      --                    --                    --                  --
                                                    ----------            ----------            ----------          ----------

Net loss                                            (2,636,663)           (5,775,588)           (1,580,568)           (468,503)
                                                    ==========            ==========            ==========          ==========

Basic and diluted loss per share
applicable to common stockholders
Continuing operations                                    (0.14)                (0.30)                (0.08)              (0.10)
Discontinued operations                                     --                    --                    --                0.08
                                                    ----------            ----------            ----------          ----------

                                                         (0.14)                (0.30)                (0.08)              (0.02)
Weighted average shares used in
computing per share amounts                         19,210,037            19,210,037            19,210,037          19,210,037
                                                    ==========            ==========            ==========          ==========
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
                                               Three months ended     Three months ended   Three months ended    Three months ended
                                                December 31, 2001     September 30, 2001      June 30, 2001         March 31, 2001
                                                -----------------     ------------------      -------------         --------------
<S>                                                 <C>                   <C>                   <C>                 <C>
Revenue

Payment processing                                      10,336                17,355                 5,730               4,802
System integration revenue                             178,814               233,133               404,701                  --
                                                    ----------            ----------            ----------          ----------

Total revenue                                          189,150               250,488               410,431               4,802

Direct costs                                           226,765               269,279               340,244                  --
                                                    ----------            ----------            ----------          ----------

Gross profit                                           (37,615)              (18,791)               70,187               4,802
                                                    ----------            ----------            ----------          ----------

Operating expenses

Sales and marketing                                   (250,338)              491,206               698,203             519,983
General and administrative                           2,697,181             2,223,961             2,742,270           1,872,501
Systems and technology                                 729,081             1,251,266             1,424,850             244,369
Non-recurring charges for impairment of
certain long-lived and prepaid assets                2,405,829                    --                    --                  --
                                                    ----------            ----------            ----------          ----------

Total expenses                                       5,581,753             3,966,433             4,865,323           2,636,853

Operating loss                                      (5,619,368)           (3,985,224)           (4,795,136)         (2,632,051)

Other income/(expenses)
Interest income                                        398,944               476,273               474,090             179,603
Interest expense                                          (387)                  (85)               (1,385)               (264)
Loss on write down of marketable
securities                                          (1,448,553)             (183,800)                   --                  --
                                                    ----------            ----------            ----------          ----------

Total other income (expenses)                       (1,049,996)              292,388               472,705             179,339
                                                    ----------            ----------            ----------          ----------

Equity in loss of affiliates                          (177,695)             (114,423)                   --                  --

Loss before cumulative effect of
accounting change                                   (6,847,060)           (3,807,259)           (4,322,431)         (2,452,712)
                                                    ----------            ----------            ----------          ----------

Cumulative effect of accounting
change                                                (380,000)                   --                    --                  --

Net loss                                            (7,227,060)           (3,807,259)           (4,322,431)         (2,452,712)
                                                    ==========            ==========            ==========          ==========

Basic and diluted loss per share
applicable to common stockholders
Before cumulative effect of accounting change            (0.36)                (0.20)                (0.24)              (0.15)
Cumulative effect of accounting change                   (0.02)                   --                    --                  --
                                                    ----------            ----------            ----------          ----------

                                                         (0.38)                (0.20)                (0.24)              (0.15)
                                                    ==========            ==========            ==========          ==========

Weighted average shares used in
computing per share amounts                         19,210,037            18,935,312            18,210,037          15,879,359
                                                    ==========            ==========            ==========          ==========
</TABLE>

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Foreign Exchange Risk

Brek intends to continue marketing its payment processing services throughout
Hong Kong and the Asia-Pacific region as well as North America and Europe. As a
result, its financial results could be affected by factors such as changes in
foreign currency exchange rates or weak economic conditions in its existing and
potential markets, however, the fact that the Hong Kong dollar, Brek's
functional currency, is pegged to the U.S. dollar reduces Brek's risk.

Brek expects that its initial oil and gas acquisitions will be in the United
States. If Brek makes acquisitions outside of the United States its financial
results could be affected by factors such as changes in foreign currency
exchange rates or weak economic conditions.

Financial Instruments

Brek primarily invests in fixed rate investments with short maturities, which do
not present a material interest rate risk, however, Brek's interest income is
sensitive to changes in the general level of Hong Kong and U.S. interest rates.
There have been no significant changes in Brek's exposure to changes in either
interest rates or foreign currency exchange rates for the year ended December
31, 2001. Its exposure to interest rates is limited as it does not have variable
rate and long-term borrowings. Brek is subject to variable interest rates on its
bank

<PAGE>

deposits that are cash and short-term investments. These investments are held at
cost because there are no significant market price movements. As of December 31,
2001, a hypothetical 10% immediate increase or decrease in interest rates would
increase or decrease Brek's annual interest expense and income by approximately
$nil and $1,617,000, respectively.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The consolidated financial statements and reports of Brek's independent public
accountants are filed as part of this report on pages F-1 through F-35.

The consolidated financial statements and reports of the independent public
accountants of Gasco Energy, Inc. are filed as part of this report on pages F-36
through F-55.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

Brek has had no disagreements with its Independent Accountants on accounting and
financial disclosure.

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The names, ages, and terms of office of directors and executive officers of Brek
are set forth below:

Name (1)                  Age   Position With Company

Gregory M. Pek            47    Director, President, and Chief Executive Officer
Ravi K. Daswani           35    Director
Douglas Moore             43    Director
Ian G. Robinson           63    Director, Chairman of the Board
James Pratt               53    Director
Andrew Leitch (2)         58    Director
Kenneth G.C. Telford      53    Secretary, and Chief Financial Officer

      (1) None of Brek's officers or directors, other than Andrew Leitch, is a
      resident or citizen of the United States

      (2) Mr. Leitch was appointed a Member of Brek's Board of Directors in
      April 2002.

Gregory M. Pek has been a Director of Brek since March 3, 1999 and has been a
Director of First Ecommerce Asia Limited since its inception. Mr. Pek was
President and Chief Executive Officer since March 3, 1999 until June 27, 2000.
Mr. Pek assumed the position of President and co-Chief Executive Officer on
October 16, 2000 until August 31, 2001 when he became Chief Executive Officer
upon the resignation of Mr. Daswani. He was from March 1994 to February 1999 an
executive officer of David Resources Company Limited, a

<PAGE>

petroleum and wine trading company, Kong Tai International Holdings Company
Limited, a real property investment company and from September 1998 to February
1999 a director of Singapore Hong Kong Properties Investment Limited, a real
property investment company. Before 1994, Mr. Pek was a director and officer of
a number of public companies in Canada. Mr. Pek is a director of Gasco Energy,
Inc. and Vallenar Energy Corp., which are subsidiaries of Brek.

Ravi K. Daswani has been a Director of Brek since March 3, 1999 and was a
Director of First Ecommerce Asia Limited since its inception until July 2001.
Mr. Daswani was Chief Operating Officer of Brek from March 3, 1999 until August
31,2001 and co-Chief Executive Officer from October 16, 2000 to August 31,2001
when he retired to pursue other business interests. From December 1997 to
February 1999 Mr. Daswani was the managing director and co-owner of Asia
Internet Limited, a Hong Kong Internet service provider. For more than three
years before December 1997, he was the managing director of a wholesale and
retail apparel business called Daswani S.A., a Panamanian company. He has
established international operations trading in dry goods, consumer electronics,
apparel and Internet services in Africa, Latin America and Asia.

Ian Robinson has been a Director of Brek since February 24, 2000, was appointed
Vice-Chairman on November 29, 2000 and Chairman on January 19, 2001. For more
than the last five years Mr. Robinson has been the managing director of Robinson
Management Limited, which provides financial planning and business advice,
forensic accounting services and insolvency services. Mr. Robinson has 45 years
of experience as a Chartered Accountant and was a former senior partner of the
Hong Kong office of the international accountancy firm Ernst & Young, an
accountancy and auditing services firm. He has been based in Hong Kong since
1980 servicing the Asia region and has had experience in major countries around
the world. Mr. Robinson specializes in corporate rescue, restructuring,
insolvency, investigation, business valuation and trouble shooting generally.
Mr. Robinson also is a member of the Supervisory Board and the Executive
Committee of the Hong Kong Housing Society, a non-governmental provider of low
and middle income housing.

Douglas Moore has been a Director of Brek since October 27, 1999. Mr. Moore is
the Chief Executive Officer of Henderson Cyber Limited, the high technology
ecommerce subsidiary of the Henderson Group, which consists of Henderson Land
Development Company Limited, a property development company, and its
subsidiaries. Mr. Moore is also the Head of Strategic Planning of Henderson
Land. From 1994 until early 2000, Mr. Moore was the Head of the Hong Kong Market
of Credit Suisse, a bank, and a director of Credit Suisse Investment Advisory
(Hong Kong) Limited, the bank's investment advisory subsidiary. Prior to 1994,
Mr. Moore practiced international and Canadian tax law with the Hong Kong office
of McMillan Binch, a Canadian law firm. He is a Canadian and a Hong Kong lawyer.

James Pratt was appointed to Brek's Board of Directors in June 2000. Mr. Pratt
is Deputy Chairman of the GSM Association, which is a wireless
telecommunications industry representative body consisting of more than 636
wireless network operators and key manufacturers and suppliers to the wireless
industry. Mr. Pratt was previously Managing Director of Asia Wireless, a
division of Telstra International, Telstra Corporation of Australia

<PAGE>

where he oversaw all of Telstra Group's wireless operations and investments
throughout the Asia Pacific Region. Mr. Pratt was formerly Chief Executive
Officer of Peoples Phone, a wireless telecom provider in Hong Kong, since 1996.
Prior to this he was general manager of the telecommunications division of
Mitsubishi Electric Australia. Mr. Pratt has more than thirty years
international management experience in the Asia Pacific telecommunications
industry.

Mr. Andrew Leitch was appointed to Brek Energy's board of directors in April
2002. Mr. Leitch is both a Chartered Accountant (Canada) and a Certified Public
Accountant (USA). He has an international and diversified career spanning some
25 years with Deloitte & Touche, an accountancy and auditing services firm, and
has held senior executive positions in certain varied commercial enterprises.
Mr. Leitch has 20 plus years of experience in international business. He worked
as the Chief Operating Officer for Vapotronics Inc., a biotech company in San
Diego from 2000-2001. While Mr. Leitch was with Deloitte & Touche, Hong Kong
from 1994-2000, he was the Vice Chairman of the Management Committee (1997-2000)
and Executive Director of Corporate Finance (1994-1997). Mr. Leitch currently
holds a board position with Citicorp Everbright China Fund Limited, an
investment fund.

Kenneth G.C. Telford has been Brek's Chief Financial Officer and Secretary since
July 1, 2000. Mr. Telford is both a Chartered Accountant (Canada) and Certified
Public Accountant (USA). Mr. Telford has been a partner in Sadovnick Telford +
Skov, Chartered Accountants in Canada and Telford Sadovnick, PLLC, Certified
Public Accountants in the United States since 1994. Mr. Telford was also
previously a partner in the international accounting firm Touche Ross & Co. (now
Deloitte & Touche) as well as Chief Operating Officer and Chief Financial
Officer of an automotive rental company called Tropical Rent a Car Systems, Inc.
Mr. Telford has advised numerous companies, operating in both North America and
Asia Pacific, on a broad range of financial and business matters including the
financial management requirements of U.S. publicly listed companies. Mr. Telford
is a director of Vallenar Energy Corp., which is a subsidiary of Brek.

<PAGE>

ITEM 11. EXECUTIVE COMPENSATION

<TABLE>
<CAPTION>
                                                   Annual compensation                         Long term compensation
                                                                                                 Awards     Payouts

                                                                                              Shares of
                                                                                Restricted   common stock
                                                                  Other annual    stock       underlying      LTIP     All Other (2)
Name and Principal Position    Year      Salary       Bonus       compensation   award(s)      options       Payouts   Compensation
<S>                            <C>     <C>           <C>             <C>            <C>         <C>             <C>         <C>
Gregory Pek, CEO               2001     $218,710     $107,097        $15,484                    75,000
                               2000      238,172           --             --        --         200,000          --          --
                               1999      167,742           --             --        --         100,000          --          --

Ravi Daswani, Co-CEO [1]       2001      154,839      109,677          4,473                    75,000
                               2000      238,172           --             --        --         200,000          --          --
                               1999      167,742           --             --        --         100,000          --          --

Kenneth Telford, CFO           2001      259,994      117,419         13,005                   200,000

                                         Does not
                               2000    exceed 100,000                                          100,000

Steve Corbin, President,
First Ecom Systems
Limited                        2001      202,581       45,800          1,548        --          50,000          --          --

                               2000      Does not          --             --        --          30,000          --          --
                                          exceed
                                         100,000

                               1999      Does not          --             --        --          20,000          --          --
                                          exceed
                                         100,000

Barry Conn, Senior Vice
President, First Ecom
Systems Limited                2001      157,419           --           1,548       --          25,000          --          --

                               2000      Does not          --             --        --          20,000          --          --
                                          exceed
                                         100,000
</TABLE>

      (1)   resigned as co-ceo on August 31, 2001

      (2)   Other annual compensation consisted of housing expense, directors
            fees and employer contributions to the mandatory provident fund in
            Hong Kong (which is a program similar to Social Security in the
            United States)

Directors and executive officers were granted options to purchase Brek's common
stock during the year as follows:

Option grants in Fiscal year ended Dec. 31, 2001

<TABLE>
<CAPTION>
                                                                Individual grants
                                                                                                      Potential realizable value
                                                                                                      at assumed annual rates of
                                                                                                       Stock price appreciation
                                                                                                           for option term
                            Number of        Percent of
                            securities     Total options
                            underlying       granted to        Exercise                              Value at
                         options granted    employees in       of base       Market    Expiration   grant date
Name                           (1)          fiscal year     price ($/Sh)     price        Date           0%         5%         10%
<S>                         <C>                <C>             <C>           <C>       <C>            <C>        <C>         <C>
Gregory Pek, CEO             75,000             5.9%           $0.40         $0.41     31-Oct-06        750       9,246      19,523
Ravi Daswani (2)             75,000             5.9%            0.40          0.41     31-Oct-06        750       9,246      19,523
Ian Robinson                 75,000             5.9%            0.40          0.41     31-Oct-06        750       9,246      19,523
Douglas Moore               125,000             9.8%            0.40          0.41     31-Oct-06      1,250      15,409      32,539
James Pratt                  75,000             5.9%            0.40          0.41     31-Oct-06        750       9,246      19,523
Marc Bruner (3)              75,000             5.9%            0.40          0.41     31-Oct-06        750       9,246      19,523
Ken Telford                 200,000            15.6%            0.40          0.41     31-Oct-06      2,000      24,655      52,062
Steve Corbin                 50,000             3.9%            0.40          0.41     31-Oct-06        500       6,164      13,015
Barry Conn                   25,000             2.0%            0.40          0.41     31-Oct-06        250       3,082       6,508
</TABLE>

(1)   All of the options granted are fully vested and exercisable until October
      31, 2006

(2)   Resigned as Co-CEO August 2001.

(3)   Resigned May 4, 2002.

<PAGE>

Total effective options as at Dec. 31, 2001 1,280,000

No share options were exercised during the year; share options outstanding in
the hands of directors and senior management as of December 31, 2001 were as
follows:

<TABLE>
<CAPTION>
                                                          Number of securities underlying      Value of Unexercised In-The-
                                                           unexercised options at fiscal       Money options at fiscal year
                             Shares                                 year end(#)                          end (1) ($)
                           acquired on       value       ---------------------------------    ------------------------------
           Name           exercise (#)    realized ($)      Exercisable      Unexercisable    Exercisable      Unexercisable
<S>                            <C>            <C>             <C>                 <C>              <C>            <C>
Gregory Pek, CEO                0              0               75,000              0               $0              0
Ravi Daswani (2)                0              0               75,000              0                0              0
Ian Robinson                    0              0               75,000              0                0              0
Douglas Moore                   0              0              125,000              0                0              0
James Pratt                     0              0               75,000              0                0              0
Marc Bruner (3)                 0              0               75,000              0                0              0
Ken Telford                     0              0              200,000              0                0              0
Steve Corbin                    0              0               50,000              0                0              0
Barry Conn                      0              0               25,000              0                0              0
</TABLE>

(1)   Based on a December 31, 2001 closing price of US$0.40 per share.

(2)   Resigned as Co-CEO August 2001.

(3)   Resigned May 4, 2002.

Directors' Compensation

Directors, who are not officers of Brek, are paid fees of $10,280 per year in
connection with their serving on the Board. The Chairman of the Board receives
$54,000 per year. Directors are reimbursed for out-of-pocket expenses incurred
with attending Board meetings.

Employment Agreements

Gregory Pek.

Brek entered into an employment agreement with Gregory Pek, its President and
Chief Executive Officer, the term of which commenced in January 1999. This
agreement provided that Brek would pay Mr. Pek a monthly salary of HK $100,000
(approximately USD 12,820) plus an additional month's salary per calendar year
of service as a year-end payment. In January 2000 Mr. Pek's monthly salary was
increased to HK $150,000 (approximately USD 19,230); however, in December 2000
Mr. Pek agreed to have his monthly salary temporarily reduced to HK $100,000
(approximately USD 12,820). Brek entered into new six-month employment
agreements with Mr. Pek covering the period from March 1, 2001 to August 31,
2001. During this period, Mr. Pek's aggregate monthly salary was HK $165,000
(approximately USD 21,150) plus an additional lump-sum payment equal to four
months' salary was paid to Mr. Pek in August 2001. In August 2001 Brek entered
into new one-year employment agreements with Mr. Pek that provide for an
aggregate monthly salary of HK $165,000 (approximately USD 21,150) plus an
additional month's salary per calendar year of service as a year-end payment.
These agreements will terminate on August 31, 2002. At the

<PAGE>

request of Mr. Pek, his agreements are not being extended past August 31, 2002.
Because the agreements are not being extended, Brek must pay a termination
payment to Mr. Pek in August 2002 equal to three months' salary. Brek believes
that it will be able to engage another Chief Executive Officer in a timely
fashion, and that no harm will come to Brek due to Mr. Pek's decision not to
continue as its Chief Executive Officer.

Ravi Daswani.

Brek entered into an employment agreement with Ravi Daswani, who served as the
Senior Vice President and Chief Operating Officer until his resignation in
August 2001, the term of which commenced in January 1999. This agreement
provided that Brek would pay Mr. Daswani a monthly salary of HK $100,000
(approximately USD 12,820) plus an additional month's salary per calendar year
of service as a year-end payment. In January 2000 Mr. Daswani's monthly salary
was increased to HK $150,000 (approximately USD 19,230); however, in December
2000 Mr. Daswani agreed to have his monthly salary temporarily reduced to HK
$100,000 (approximately USD 12,820). Brek entered into a new six-month
employment agreement with Mr. Daswani covering the period from March 1, 2001 to
August 31, 2001. Under this agreement, Mr. Daswani was paid (i) a monthly salary
of HK $150,000 (approximately USD 19,230), (ii) an additional lump-sum payment
equal to four months' salary on August 31, 2001 and (iii) a prorated portion of
one month's salary, equal to HK $100,000 (approximately USD 12,820), on August
31, 2001. At the request of Mr. Daswani, his agreements were not renewed.

Kenneth Telford.

Brek entered into employment agreements with Kenneth Telford, its Chief
Financial Officer, the terms of which commenced in March 2001. Pursuant to these
agreements, Brek paid Mr. Telford an aggregate monthly salary of HK $165,000
(approximately USD 21,250), for the period from March 1, 2001 through September
30, 2001, issued Mr. Telford warrants to purchase 50,000 shares of Brek's common
stock at an exercise price of USD 1.25 per share and paid Mr. Telford an
additional lump-sum payment in August 2001 equal to four months' salary. The
agreements also provided for an additional month's salary per calendar year of
service as a year-end payment. In August 2001 Brek entered into new one-year
employment agreements with Mr. Telford that provide for an aggregate monthly
salary of HK $165,000 (approximately USD 21,250) plus an additional month's
salary per calendar year of service as a year-end payment. This agreement will
terminate on August 31, 2002 unless Brek chooses to extend the term of the
agreement. If Brek does not choose to extend the term of the agreement, the
agreement provides that Brek must pay a termination payment to Mr. Telford in
August 2002 equal to three months' salary.

Brek and Mr. Telford have agreed to extend his employment for one year beginning
in August 2002. Under the new arrangement with Mr. Telford, he will be paid
$27,000 per month. In addition, he will have the option of working less than
full time if he chooses, and if he receives payment from other than Brek for
time devoted to a job other than being an executive of Brek, Brek may reduce its
payments to Mr. Telford by an amount equal to 80%

<PAGE>

of the amount of such other payments in excess of $3,000 (which reduction may
not exceed $10,000).

Report of Compensation Committee
of the Board of Directors

Notwithstanding anything to the contrary set forth in any of Brek's previous or
future filings under the Securities Act of 1933 or the Securities Exchange Act
of 1934 (the "Exchange Act') that might incorporate this Form 10-K Annual Report
or future filings with the Securities and Exchange Commission, in whole or in
part, the following report shall not be deemed to be incorporated by reference
into any such filing.

Membership and Role of the Compensation Committee

The Compensation Committee consists of the following non-employee members of
Brek's Board of Directors: Douglas Moore, Ian Robinson and James Pratt. The
Compensation Committee reviews and determines Brek's executive compensation
objectives and policies, administers Brek's stock plans and grants stock
options.

In Hong Kong, competition for executive talent is intense in our industry. With
this perspective, the Compensation Committee reviews and sets the compensation
of Brek's executive officers.

Executive Compensation Program

Objectives

The objectives of Brek's executive compensation program are to:

o     Attract and retain highly talented and productive executives

o     Provide incentives for superior performance

o     Align the interests of executive officers with the interests of Brek's
      stockholders by basing a significant portion of compensation upon Brek's
      performance

Components

Brek's executive compensation program combines the following two components, in
addition to the benefit plans offered to all employees: base salary and
long-term incentive compensation consisting of stock option grants.

It is Brek's policy to set base salary levels and long-term incentive
compensation on a comparable level with an average of those of select
corporations to which Brek compares

<PAGE>

itself for purposes of executive compensation. Brek selects such corporations on
the basis of a number of factors, such as their size and complexity, the nature
of their businesses, the regions in which they operate, the structure of their
compensation programs and the availability of compensation information. The
corporations selected for such comparison may vary from year to year based upon
market conditions and changes in both Brek's and the corporations' businesses
over time. Brek believes that competitive compensation levels are necessary to
attract and retain the high-caliber executives necessary for the successful
conduct of Brek's business.

Each component of Brek's executive compensation program serves a specific
purpose in meeting Brek's objectives. The components of Brek's executive
compensation program are described below, except for any variations arising from
individual provisions of employment agreements that Brek enters into upon hiring
an executive.

Base Salary

The Compensation Committee annually reviews the salaries of Brek's executives.
When setting base salary levels in a manner consistent with the objectives
outlined above, the Committee considers competitive market conditions for
executive compensation, Company performance and individual performance. The
measures of individual performance considered in setting 2001 salaries included,
to the extent applicable to an individual executive officer, a number of
quantitative and qualitative factors such as Brek's historical and recent
financial performance in the principal area of responsibility of the officer
(including such measures as gross margin, net income, sales, customer count and
market share), the individual's progress toward non-financial goals within his
area of responsibility, individual performance, experience and level of
responsibility and other contributions to Brek's success. The Compensation
Committee has not found it practicable, nor has it attempted, to assign relative
weights to the specific factors used in determining base salary levels, and the
specific factors used may vary among individual officers. As is typical for most
corporations, payment of base salary is not conditioned upon the achievement of
any specific, pre-determined performance targets.

Long-term incentive compensation.

Brek believes that option grants align executive interests with stockholder
interests by creating a direct link between compensation and stockholder return,
give executives a significant, long-term interest in Brek's success, and help
retain key executives in a competitive market for executive talent.

Brek's Stock Option Plan authorizes the Committee to grant stock options to
executives. Option grants are made from time to time to executives whose
contributions have or will have a significant impact on Brek's long-term
performance. Brek's determination of whether option grants are appropriate each
year is based upon individual performance measures established for each
individual. Options are not necessarily granted to each executive during each
year. Generally, options granted to executive officers vest in equal annual
installments over a period of two years and expire five years from the date of
grant.

<PAGE>

Replacement Option Grants

(On October 31, 2001, the named executives set forth below rescinded options and
warrants to purchase Brek's common stock, and Brek reissued a new number of new
options having five-year terms and exercise prices equal to the then-fair value
of the stock (which were lower than the exercise prices of the options and
warrants rescinded). See "Report of Compensation Committee of the Board of
Directors."

<TABLE>
<CAPTION>
                                                                                                               Length (months) of
                                                                                      Exercise price of       option/warrant term
                                                    Number of options/warrants         options/warrants       remaining at Date of
                                          New             rescinded                        rescinded                Replacement
                         Number of     exercise     --------------------------     ----------------------    ---------------------
Name                  new options(1)     price      Options           Warrants      Options      Warrants    Options      Warrants
<S>                      <C>             <C>        <C>                 <C>           <C>           <C>         <C>          <C>
Gregory Pek, CEO          75,000         0.40       150,000                 --        5.05           --         46           --
                                                     50,000                 --        7.65           --         32           --
Ravi Daswani(2)           75,000         0.40       150,000                 --        5.05           --         46           --
                                                     50,000                 --        7.65           --         32           --
Ian Robinson              75,000         0.40        50,000             50,000        5.05          1.25        46           53
Douglas Moore            125,000         0.40       100,000             30,000        5.05          1.25        46           53
James Pratt               75,000         0.40        50,000             30,000        5.05          1.25        46           53
Ken Telford              200,000         0.40       100,000             50,000        5.05          1.25        46           53
Steve Corbin              50,000         0.40        20,000             50,000        5.05          1.25        46           53
                                                     10,000                 --        7.65           --         32           --
Barry Conn                25,000         0.40        20,000             25,000        5.05          1.25        46           53
</TABLE>

----------
(1)   All new options expire on October 31, 2006

(2)   Resigned as Co-CEO August 2001.

Benefits. Brek believes that it must offer a competitive benefit program to
attract and retain key executives.

During 2001, Brek provided medical and other benefits to its executive officers
that are generally available to Brek's other employees.

Compensation of the Chief Executive Officer. The chief Executive Officer's
compensation plan for 2001 included the same elements and performance measures
as the plans of Brek's other executive officers.

Submitted by:        Douglas Moore
                     Ian Robinson
                     James Pratt

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth the current beneficial ownership of Brek's common
stock by (i) each person known by Brek to beneficially own five percent or more
of Brek's outstanding

<PAGE>

common stock, (ii) Brek's Chief Executive Officer and Directors and (iii) all of
Brek's Executive officers and Directors as a group. Except as otherwise
indicated, all shares of Common Stock are beneficially owned, and investment and
voting power is held, by the person named as owner.

Name and Address of                              Number of Shares     Percentage
Beneficial Owner                                Beneficially Owned     Ownership
                                                ------------------     ---------

Gregory M. Pek                                    1,782,500(1)(2)        8.05%
Ravi K. Daswani                                     485,461(1)(2)        2.19%
Power Technology Investment Corporation(10)       1,333,333(3)(4)        5.96%
Douglas Moore                                       391,667(2)(4)(5)     1.76%
Ian Robinson                                        595,000(1)(2)        2.69%
James Pratt                                          95,000(1)(2)        0.43%
Andrew Leitch                                             0              0.00%
Kenneth Telford                                     300,000(2)(6)        1.35%
Steve Corbin                                         65,415(2)(7)        0.30%
Barry Conn                                           25,000(2)(8)        0.11%

Executive Officers and
Directors as a group                              3,740,043(9)          16.39%

----------
(1)   Includes options to purchase 75,000 shares of common stock.

(2)   All options expire on October 31, 2006 and are exercisable for $0.40 per
      share.

(3)   Includes warrants to purchase 333,333 shares of common stock.

(4)   All warrants expire on March 5, 2005 and are exercisable for $11.40 per
      share.

(5)   Includes options to purchase 125,000 shares and warrants to purchase
      66,667 shares of common stock.

(6)   Includes options to purchase 200,000 shares

(7)   Includes options to purchase 50,000 shares.

(8)   Includes options to purchase 25,000 shares.

(9)   Includes options to purchase 700,000 shares and warrants to purchase
      66,667 shares of common stock.

(10)  Power Technology Investment Corporation is a wholly owned subsidiary of
      Power Corporation of Canada, a Canadian corporation the shares of which
      are listed on the Toronto Stock Exchange and traded under the symbol
      "POW".

<PAGE>

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

During the year ended December 31, 2001, Brek paid consulting fees of $28,629 to
former directors Ermanno Pascutto ($16,129) and Eric Pinkney ($12,500).

During 2001, Brek advanced $270,055 to Vallenar. Gregory Pek and Ken Telford are
also directors of Vallenar, and certain shareholders of Brek's affiliate, Gasco,
are also shareholders of Vallenar.

Effective as of March 31, 2000 Brek acquired 100% of the issued and outstanding
shares of Asia Internet Limited for cash of $1.2 million and 24,870 shares of
the Common Stock of Brek then valued at $623,988. AIL was considered a related
party to Brek as Ravi Daswani, a 30% shareholder of AIL, was also a director and
stockholder of Brek. This purchase price was approved by all the directors of
Brek except for Mr. Daswani, who abstained. None of the other directors had any
affiliation with AIL. AIL provided technical support, system maintenance and
other professional services to Brek and purchased computer and office equipment
on behalf of Brek. During the year ended December 31, 2000 and prior to the
acquisition of AIL by Brek, Brek paid $91,871 (1999: $465,442) to AIL for the
above services. During the year ended December 31, 2000, the amounts charged by
AIL to Brek for technical support, system maintenance and other professional
services, and purchase of computer and office equipment on Brek's behalf were
$283,157 for services and $15,290 for purchases, respectively (1999: $401,054
for services and $148,526 for purchases, respectively).

On March 31, 2000, Brek completed the acquisition of AIL and AIL's assets and
liabilities have been consolidated into Brek's financial statements as of that
date.

Ermanno Pascutto, a director and shareholder of Brek was a partner in a law firm
(the "firm") to which Brek paid legal fees in the ordinary course of its
business. The amount paid by Brek and charged by the firm during the year ended
December 31, 2000 was $373,497 (1999: $315,056 advanced to the firm by Brek and
$395,364 the amount charged by the firm). Effective from June 15, 2000, the
director resigned from the firm and entered into a consultancy agreement
directly with Brek for a monthly fee of $16,129. For the year ended December 31,
2000, $106,153 has been paid to this former director.

During the year ended December 31, 2000, Eric Pinkney, then a director of Brek,
received consulting fees of $25,000 of which Brek paid in the ordinary course of
its business.

During 1999, Cody Cain, then a director of Brek, was a partner in a professional
firm to which Brek had paid consultancy fees in the ordinary course of its
business. The amount charged by the firm to Brek during the year ended December
31, 1999 was $234,319. As at December 31, 1999, Brek owed the firm $109,227.

Mssers. Pek, Robinson and Telford agreed in February 2002 to subscribe for
200,000 , 500,000 and 100,000 shares of Brek common stock, respectively, at
$0.50 per share, the

<PAGE>

prevailing market price of the stock at the time of the agreement. These
transactions were completed in March 2002.

Brek believes that the above transactions are on terms at least as favorable to
it as could have been obtained in an arm's length transaction.

ITEM 14. EXHIBITS, FINANCIAL STATEMENTS, AND REPORTS ON FORM 8-K

FINANCIAL STATEMENTS

Previously filed

EXHIBITS

3.1         Amended and Restated Articles of Incorporation***

3.2         By-laws*

4.1         Specimen Stock Certificate*

10.1        Vallenar Stock Purchase Agreement

10.2        Employment Agreements of Gregory Pek:

10.2.1      Hong Kong Service Agreement

10.2.2      Offshore Service Agreement

10.2.3      Supplemental Service Agreement

10.3        Employment Agreements of Kenneth Telford:

10.3.1      Hong Kong Service Agreement

10.3.2      Offshore Service Agreement

10.3.3      Supplemental Service Agreement

11.1        Computation of Earnings (Loss) Per Share***

21.1        List of Subsidiaries***

23.1        Consent of Deloitte Touche Tohmatsu***

23.2        Consent of KPMG***

<PAGE>

23.3        Consent of Deloitte & Touche, LLP***

23.4        Consent of Wheeler Wasoff, P.C.***

23.5        Consent of HJ & Associates, LLC***

*           Incorporated by reference to Brek's Registration Statement on Form
            10 filed October 21, 1999

***         Previously filed.

REPORTS ON FORM 8-K

Form 8-K Filed on November 2, 2001 in Regard to Disposal of FEDS Shares

Form 8-KA Filed on November 7, 2001 in Regard to Acquisition of Shares of Gasco
Energy, Inc.

Form 8-KA Filed on December 3, 2001 in Regard to Disposal of FEDS Shares

<PAGE>

                                   SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized on the 17th day of September, 2002.

                            BREK ENERGY CORPORATION.


                                              /S/ Kenneth G.C. Telford
                                              ----------------------------------
                                              Kenneth G.C. Telford Secretary and
                                              Chief Financial Officer

Signature                                        Title
---------                                        -----

/S/ Gregory M. Pek                  Director, President, and Chief
------------------------------      Executive Officer (principal
Gregory M. Pek                      executive officer)


/S/ Ravi K. Daswani                 Director
------------------------------
Ravi K. Daswani


/S/ Douglas Moore                   Director
------------------------------
Douglas Moore


/S/ Ian G. Robinson                 Director & Chairman of the Board
------------------------------
Ian G. Robinson


/S/ James Pratt                     Director
------------------------------
James Pratt


/S/ Andrew Leitch                   Director
------------------------------
Andrew Leitch


/S/ Kenneth G.C. Telford            Secretary & Chief Financial Officer
------------------------------      (principal accounting officer)
Kenneth G.C. Telford