U.S. Securities and Exchange Commission
                             Washington, D.C. 20549

                                   FORM 10-KSB
(Mark One)
[x]ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
      ACT OF 1934

                      For the year ended December 31, 2001

[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT OF 1934

                         Commission file number 0-25037
                              stereoscape.com, inc.
                 (Name of small business issuer in its charter)

           Nevada                                   06-1469654
(State or other jurisdiction of          (IRS Employer identification no.)
incorporation or organization)

 704 Ginesi Drive, Morganville, New Jersey                 07751
 (Address of principal executive offices)                (Zip Code)

                                 (732) 617-8600
                           (Issuer's telephone number)
                        ---------------------------------
 Securities registered under section 12(b) of the Exchange Act:

   Title of each class              Name of each exchange on which registered
 ___________________________    _______________________________________________

Securities registered under Section 12(g) of the Exchange Act:
                         Common Stock, $0.001 par value
                         ------------------------------
                                (Title of class)

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

Check if there is no disclosure of delinquent  filers in response to Item 405 of
Regulation  S-B is met  contained  in  this  form,  and no  disclosure  will  be
contained,  to  the  best  of  registrant's   knowledge,   definitive  proxy  or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. ( )

State issuer's  revenues for its most recent fiscal year:  Revenues for the year
ended December 31, 2001 were $ 1,247,922.

State the  aggregate  market  value of the voting  stock held by  non-affiliates
computed  by  reference  to the  price at which  the  stock  was  sold,  as of a
specified  date within the past 60 days.  (See  definition  of affiliate in Rule
12b-2 of the Exchange Act).
Note; If determining whether a person is an affiliate will involve  unreasonable
effort and expense,  the issuer may calculate the aggregate  market value of the
common equity held by non-affiliates on the basis of reasonable assumptions,  if
the assumptions are stated.

The  aggregate  market  value of the voting stock held by  non-affiliates  as of
December 31, 2001 is $ 180,069.

                    (PROCEEDINGS DURING THE PAST FIVE YEARS)
Check whether the  registrant  filed all  documents  and reports  required to be
filed by Section 12, 13 or 15(d)of the  Exchange Act after the  distribution  of
securities under a plan confirmed by a court. Yes .......No ....... N/A

                   (APPLICABLE ONLY TO CORPORATE REGISTRANTS)
State the number of shares outstanding of each of the issuer's classes of common
equity as of the latest practicable date.

          Title of Each Class                 Number of Shares Outstanding
Common Stock, $.001 par value per share      (December 31, 2001) 180,068,610
                       DOCUMENTS INCORPORATED BY REFERENCE
If the following documents are incorporated by reference,  briefly describe them
and  identify  the part of the Form 10-KSB  (e.g.,  Part I, Part II,  etc.) into
which the document is incorporated:  (1) any annual report to security  holders;
(2) any proxy or information statement; and (3) any prospectus filed pursuant to
rule 424(b) or (c) of the Securities Act of 1933 ("Securities  Act"). The listed
documents should be clearly described for identification  purposes (e.g., annual
report to security holders for fiscal year ended December 24, 1990).

Transitional Small Business  Disclosure Format (Check one): Yes_____ ; No_____ .

<PAGE>

PART I

Item 1.Business

     Description of Business

     stereoscape.com, inc. ("SSCP" or the "Company") was incorporated on June 8,
1988 as a corporate shell developed to generate capital  resources which were to
be used to acquire or participate in a business or business entity.  The Company
began as a Development Stage Company, and on April 17, 1997 acquired 100% of the
outstanding  shares of American Buyers Club  International,  Inc.,  ("ABC") in a
business  combination  accounted  for as a purchase.  ABC became a wholly  owned
subsidiary  of the Company  through the  exchange  of  10,980,000  shares of the
Company's common stock for all of the outstanding shares of ABC.
     Effective  October 1, 2000 the  Company  acquired  100% of the  outstanding
shares of Marx Toys, Inc. ("Marx") in a business combination  accounted for as a
purchase.  Marx became a wholly  owned  subsidiary  of the  Company  through the
exchange  of  15,000,000  shares of the  Company's  common  stock for all of the
outstanding shares of Marx.
     On August 23, 2000 The Company  entered  into an asset  purchase  agreement
with the  principals of  epiggybank.com,  inc.  ("epiggybank"),  a financial and
educational  web site for  children.  The terms of the  agreement  included  the
transfer,  to the Company, of the "epiggybank" name, trademarks and intellectual
properties,  and other  assets being used in the  seller's  business.  Since the
sellers  have been  unable to deliver a valid  trademark  for  "epiggybank"  the
Company is in the process of  rescinding  the  transaction,  and to that end has
halted the shares issued in the transaction.
     On July 16, 2001 the  Company  acquired  all of the issued and  outstanding
stock of Toontz Toyz, Inc.  ("Toontz"),  a New Jersey  corporation.  "Toontz" is
involved in the development of intellectual properties,  which they will license
to other companies for the use in production of numerous products.
     ABC  sells  its  products   via  the  internet  and  through   print  media
advertising,  and in addition  through its  subsidiary,  Alpha Sound and Vision,
Inc.,  ("Alpha") which has closed its retail store and is concentrating on sales
through the internet and telephone sales.
     Marx,  which was  founded in 1919,  by Louis  Marx,  was one of the world's
largest toy  manufacturers  through much of the 20th  century.  Their  operation
includes executive offices in Miami, Florida, while the manufacturing is done in
Mexico,  China and Ohio.  Marx has been selling its product via the internet and
through telemarketing.  In the future they plan to expand their sales to include
major toy retailers. The Marx brand is synonymous with quality and value.
     References  herein the "SSCP" or "the Company" unless  otherwise  indicated
include stereoscape.com, ABC, Alpha, Marx and Toontz.

                                       2
<PAGE>

     Products

     ABC and Alpha sell  products  for the home  entertainment  industry.  These
products  include  televisions  and a full  line  of  audio  equipment  such  as
speakers,  DVD  players,  amplifiers  and all  other  equipment  that  would  be
necessary to complete a home audio entertainment center.
     The Marx products  being sold include play sets,  such as Fort  Apache(TM),
Battleground(TM),  Cape Canaveral,  Castle of the Noble Knights and Remember the
Alamo! In addition, Marx sells action figures, which include the highly detailed
Noble Knights, Vikings, the ever popular Johnny West(TM) series, Warriors of the
World,  and General  Custer.  The company is engaged in  licensing  various Marx
molds along with the vintage Marx train line.
     "Toontz" is still in the developmental stage, and therefore, has not record
any sales or income through December 31, 2001.

     New Products and Expansion.

     The Home  Theater  Company is  continuously  evaluating  new  products  and
services to expand its product line. The constant changes in technology  require
the  company  to look for  outside  alliances  for  installation  and  technical
collaboration for home designing and installing home entertainment  centers. The
company presently  evaluating its present resources to accurately determine what
it will need to continue in this new and exciting world of home entertainment.
     Presently,  Marx is  primarily  bringing  back many of their toys that were
coveted  throughout  the years.  The play sets and action figures are being sold
for  collectors  and for  children as play toys.  In many cases,  the buyer will
purchase  2  similar  toys,  one for  show  and one for  play.  The  company  is
evaluating various  alternatives to introduce additional Marx vintage toys while
examining the potential of selling new toys under the Marx name. The company has
been discussing various licensing  arrangement with several board game designers
and manufacturers to promote and sell these new game boards under the Marx name.
The company  feels that this sector of the toy  industry  will open  substantial
revenue producing  channels for the company.  In one particular game board under
review the main  character  will be an  original  Marx  creation.  The  exciting
potential for these game boards are that they are designed for a larger audience
that would  include  both  children  and adults.  The company is also looking to
utilize  current  technology  to  enhance  the  marketability  of  several  Marx
creations for today's market.

                                       3
<PAGE>


     Product Line Exclusivity License & Trademark Agreements.

     The Home  Theater  Company  does not have  exclusive  licenses or trademark
agreements with any of its suppliers.
     Marx is currently licensing the rights to manufacture,  and distribute, the
well-known line of Marx Trains(TM).  These are carefully  crafted,  scale trains
made of  qualified  lithographed  tin  plate  metal.  They  are made to the same
specifications  that Marx made their metal  trains  from 1933 to 1955.  Marx has
also  entered  into  licensing  and  trademark  agreements  with  several  other
companies to produce Marx Toy products.

     Government Regulations.

     The costs and effects of compliance with  governmental  regulations are not
material to the Home Theater Company's, Marx or Toontz operations.


     Research & Development.

     The Home Theater  Company depends on the  manufacturers  of the products it
sells for the research and development of new products or enhanced products. The
Company is researching  the sale of other products that can be integrated into a
complete system for home automation,  which will simplify the installation,  and
design controls, for various home services used by the consumer.
     Marx Toys Inc. is in the process of reviewing its mold licensing  potential
while at the same time considering  updating some of its products where possible
with current technology. In addition the company is presently in negotiations to
license several new board games that the company feels will increase its product
line and revenue potential substantially.
     Toontz  is  presently  in  negotiation  licensing  the  development  of its
animation series that will provide exposure to the Toontz characters "Minook and
the Brainbots".  The company feels that the resources necessary to complete this
project  will  require  alliances  with  currently  established  groups  in  the
entertainment and animation industry.

     Cost and Effects of Compliance with Environmental Laws

     The  costs  and  effects  of  compliance  with  environmental  laws are not
material to the Home Theater Company', Marx or Toontz operations.

     Current Employees

     The Company currently  employs 6 persons,  on a full time basis, and 3 on a
part time basis. None of the Company's employees are members of unions.

                                       4
<PAGE>

     Item 2. Description of Property

     SSCP leases a 4,064 square foot facility at 3440 Highway 9 South, Freehold,
New Jersey 07728, of which  approximately 1,000 square feet had served as retail
space.  The  Company is  presently  in the  process of  assigning  this lease to
non-related third party.

     As of February 18, 2002 the Company moved its corporate headquarters to 704
Ginesi Drive,  Morganville,  NJ 07751. This office facility is leased at a basic
rent of $900 per month or $10,800  annually.  The lease has a  three-year  term,
which began in 2002, with rent escalation of 5% at the end of each year. Marx is
leasing  facilities for its executive  office, at 13899 Biscayne  Boulevard,  N.
Miami,  Florida,  33181.  The lease,  which  commenced  on June 1,  2001,  for a
one-year  period,  is leased  at a basic  rent of  $1,600  per month or  $19,200
annually. In addition, Marx entered into a lease agreement,  effective April 15,
2001,  for  warehouse  facilities  in Sebring,  Ohio.  The lease is for a 14,000
square foot space, which was subsequently modified to 12,000 square feet, with a
basic  rental of $3,000  per month or $36,000  annually.  The lease has a 5-year
term,  however Marx can  terminate  the lease after one year,  with three months
advance notification.


     Item 3. Legal Proceedings

     The Company is a party to a summons  issued  against Jay Horowitz  (and his
Company American Plastic Equipment,  Inc.), former owner of Marx, as a result of
a default by him on debt owed to a  non-related  third  party  (Mahoning  Valley
Plastics,  Inc.  and Marx Toys  Corp.).  The  complaint  is seeking  recovery of
personal property, which includes molds in possession of Marx, which was pledged
as  security  against  Horowitz's  debt The  Company  has been  advised by their
counsel,  that if  Mahoning  Valley  Plastics,  Inc.  and Marx  Toys  Corp.  are
successful  in  recovering  Marx  molds that a counter  suit will be  instituted
against  Horowitz.  However,  the company is  presently  seeking an out of court
settlement  of this  matter.  Other than this matter the Company has no material
legal proceedings by or against the Company, or any of its subsidiaries.


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

     None

                                       5
<PAGE>

     PART II

     Item 5. Market for Common Equity and Related Stockholder Matters

     The Company's  Common Shares are traded on the  Electronic  Bulletin  Board
under the symbol SSCP. The following  table sets forth the range of high and low
bid quotations for the common stock for the period indicated, as reported on the
Electronic  Bulletin Board.  On October 3, 2000 the Company  affected a 15 for 1
forward stock split.  All  calculations  and share amounts have been adjusted to
reflect the post-split value.
     The  quotations  are  inter-dealer  prices in the  over-the-counter  market
without retail mark-ups,  markdowns or commissions, and may not represent actual
transactions.

                                     2001                         2000
                                 Common Shares               Common Shares
       Period                 High          Low           High           Low
                            ----------------------------------------------------

January 1 - March 31         0.0500        0.0100        0.2625        0.0250

April 1 - June 30            0.0400        0.0200        0.1333        0.0229

July 1 - September 30        0.0400        0.0200        0.2479        0.0375

October 1 - December 31      0.0300        0.0100        0.2344        0.0156



     As of April 13,  2002,  there were 100  holders of record of the  Company's
common stock. The Company has not paid a cash dividend on its common stock since
its inception.
     The Company expects that for the foreseeable  future,  any earnings will be
retained  for use in the  business or other  corporate  purposes,  and it is not
expected  that  cash or share  dividends  will be paid.  However,  there  are no
restrictions on the payment of dividends, either by contract or regulation.

                                       6
<PAGE>

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

     Management's  Discussion and Analysis of Financial Condition and Results of
Operations should be read in conjunction with the Audited Consolidated Financial
Statements and related notes, which are contained elsewhere in this report.

     Results of operations for stereoscape.com,  inc. and subsidiaries are being
presented on a consolidated basis.

     Year Ended December 31, 2001 Compared to Year Ended December 31, 2000

     Net  sales  for the  year  ended  December  31,  2001  decreased  45.4%  to
$1,239,888  from  $2,269,233  for the year ended December 31, 2000. The decrease
was the result of  reduction  in consumer  spending  caused by outside  economic
factors,  the effects on the economy of the events of September 11, 2001,  and a
restructuring of the product line.

     Gross  profit  for the year  ended  December  31,  2001  increased  8.3% to
$320,072 from $295,535 for the year ended  December 31, 2000. As a percentage of
net sales,  gross profit increased to 25.8% in the 2001 period compared to 13.0%
in the 2000  period.  The increase in gross profit was the result of increase in
proportion  of sales derived from Marx Toys  products,  which are sold at larger
mark ups.

     Selling,  general and  administrative  expenses for year ended December 31,
2001 increased 55.4% to $1,513,287 from $973,899 for the year ended December 31,
2000. The increase in selling, general and administrative expense was the result
of a full year of operating expenses incurred by Marx Toys, in 2001, as compared
to one-month in the year 2000.

     Net losses for the year ended December 31, 2001  increased to  ($1,193,215)
compared to net losses of ($678,364)  for the year ended  December 31, 2000. The
increase in net losses is due to a decrease in sales of 45.4% and an increase in
selling, general and administrative expenses by 55.4%.

     The Company expects to require  additional  capital and at the present time
has no definitive plans but it is exploring various opportunities.  There can be
no  assurance of the ability of the Company to raise such  capital.  The Company
has no agreements or commitments with any person to raise such capital.

     Liquidity and Capital Resources

     At December 31, 2001 the Company had equity of $13,111,  which represents a
decrease of ($789,403) in the net equity of $802,514 at December 31, 2000.

     The Company has  historically  financed its business through cash flow from
operations and borrowings  from  executives,  which may be utilized from time to
time.

     Subsequent to the year-end the Company entered into a financing arrangement
for  $300,000.  The  transaction  includes a $200,000 loan payable on January 2,
2003 with interest at 12% per annum payable monthly and the purchase of $100,000
of common stack at $.01 per share.

     While no specific  acquisitions  are  presently  under  consideration,  the
Company  is  actively  seeking  acquisitions  and  anticipates  it  may  require
additional  capital in order to fund any  acquisitions or substantial  growth in
its current business.

                                       7
<PAGE>


     Anticipated Future Growth

     Management  believes  that the  future  growth of the  Company  will be the
result of  restructuring  of its core  businesses.  In this  effort the  Company
intends  to  consider  these  four  efforts;  (1)  expand the toy sales to major
national and regional  retailers,  (2) pursue  promotional deals for the sale of
vintage  Marx  products  on a large  scale,  (3)  expand the toy line to include
products  licensed and sold under the Marx name,  (4) entering  into a strategic
alliance with a strong partner in the entertainment  and animation  industry for
animation and licensing prospects.


     Forward Looking Statements

     Management's  Discussion and Analysis of Financial Condition and Results of
Operations contain information regarding management's planned growth,  financing
and prospective  business  opportunities.  These  statements are forward looking
statements  that involve  risks and  uncertainties.  The  following is a list of
factors, among others, that could cause actual results to differ materially from
the forward looking statements:  business conditions and growth in the Company's
market and industry and in the general economy;  competitive  factors  including
increased  competition  and price  pressures;  availability of raw materials and
purchased  products at  competitive  prices;  and  inadequate or  unsatisfactory
financing sources.

                                       8
<PAGE>


     Item 7. Financial Statements

     Response  submitted as a separate section of this report commencing on page
F-1.


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

                           None

     PART III

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

     Incorporated  by reference  from the proxy  statement,  which will be filed
within 30 days of the filing of this report.


     Item 10. Executive Compensation

     Incorporated  by reference  from the proxy  statement,  which will be filed
within 30 days of the filing of this report.

     Item 11. Security Ownership of Certain Beneficial Owners and Management

     Incorporated  by reference  from the proxy  statement,  which will be filed
within 30 days of the filing of this report.

     Item 12. Certain Relationships and related Transactions

     Incorporated  by reference  from the proxy  statement,  which will be filed
within 30 days of the filing of this report.

     Item 13. Exhibits and Reports on Form 8-K

     (a) (1) and (2) The  response to this  portion of Item 13 is submitted as a
separate report commencing on Page F-1.

     (a) (3)

     Exhibit No.       Description of Exhibit                               Note

         3.1     Certificate of Incorporation, as amended                     1
         3.2     By-laws, as amended                                          1
        10.1     1998 Incentive and Non-Qualified Stock Option Plan           1
        10.2     Acquisition Agreement of American Buyers Club Int'l, Inc.    1
        10.3     Employment Agreement for Steve Wise                          1
        10.4     Employment Agreement for Gary Hyman                          1
        10.5     Employment Agreement for Steven Campanella                   1
        10.6     Acquisition Agreement of Marx Toys, Inc.                     2
        10.7     Acquisition Agreement of Toontz Toyz, Inc.                   3
        21       Subsidiaries of the Registrant                               1

     Note 1: Filed with the Company's  Form 10SB filed on November 6, 1998,  and
incorporated by reference herein.
     Note 2: Filed with the Company Form 8-K for the  acquisition  of Marx Toys,
Inc. and incorporated by reference herein.
     Note 3: Filed with the Company Form 8-K for the acquisition of Toontz Toys,
Inc. and incorporated by reference herein.

(b)      Reports on Form 8-K.

     Form 8-K was filed on March 30, 2001, to report the acquisition of Marx.

                                       9
<PAGE>

                                   SIGNATURES

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

       tereoscape.com, inc.


By:   /s/ Mario Bassani                                          April 15, 2002
      -----------------
          Mario Bassani
          Chief Executive Officer (Principal Executive Officer)
          Chairman of the Board of Directors

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


By:   /s/ Mario Bassani                                          April 15, 2002
      -----------------
          Mario Bassani
          Chief Executive Officer (Principal Executive Officer)
          Chairman of the Board of Directors


By:   /s/ Gary B. Hyman                                          April 15, 2002
      -----------------
          Gary B. Hyman
          Chief Financial Officer (Principal Accounting Officer)
          Director

By:   /s/ Steven Wise                                            April 15, 2002
      ---------------
          Steven Wise
          Director

                                       10
<PAGE>

                 stereoscape.com, inc. and Subsidiary Companies
                                      Index

                              Financial Statements

         Included in Part II

         Report of Independent Certified Public Accountants

         Consolidated Balance Sheet at December 31, 2001

         Consolidated Statements of Operations for the Years Ended
                December 31, 2001 and 2000

         Consolidated Statements of Changes in Stockholders'
                Equity for the Years Ended December 31, 2001 and 2000

         Consolidated Statements of Cash Flows for the Years Ended
                December 31, 2001 and 2000

         Notes to Consolidated Financial Statements

                                      F-1
<PAGE>

                          INDEPENDENT AUDITORS' REPORT

Board of Directors and Stockholders of
stereoscape.com, inc.
Morganville, New Jersey

We have audited the accompanying  consolidated balance sheet of stereoscape.com,
inc.  and  subsidiary  companies  as of  December  31,  2001,  and  the  related
consolidated statements of operations,  changes in stockholders' equity and cash
flows for the years ended December 31, 2001 and 2000. These financial statements
are the  responsibility of the Company's  management.  Our  responsibility is to
express an opinion on the financial statements based on our audits.

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

In our opinion, the consolidated  financial statements referred to above present
fairly, in all material  respects,  the financial  position of  stereoscape.com,
inc. and  subsidiary  companies as of December 31, 2001,  and the results of its
operations  and cash flows for the years  ended  December  31,  2001 and 2000 in
conformity with accounting principles generally accepted in the United States of
America.

Certain  conditions  indicate  that the  Company  may be unable to continue as a
going concern. As discussed in Note 3 to the financial  statements,  the Company
has suffered losses from operations and has a working capital deficiency.  These
conditions  raise  substantial  doubt  about its  ability to continue as a going
concern.  The  financial  statements do not include any  adjustments  that might
result from the outcome of this  uncertainty.  Management  plans with regards to
this matter are discussed in Note 3.

/s/ Ehrenkrantz Sterling & Co., LLC
Certified Public Accountants
Livingston, New Jersey
March 26, 2002

                                      F-2
<PAGE>

                 stereoscape.com, inc. AND SUBSIDIARY COMPANIES
                           CONSOLIDATED BALANCE SHEET
                                DECEMBER 31, 2001

                                     ASSETS
Current Assets
          Cash                                                         $ 33,406
          Accounts and notes receivable                                  18,506
          Inventories                                                   702,870
          Other current assets                                           87,087
                                                                     -----------
            Total Current Assets                                        841,869
                                                                     -----------
Property and equipment, at cost, net                                     68,625

Intangible assets, net                                                  176,086

Other Assets                                                             11,032
                                                                     -----------

TOTAL ASSETS                                                        $ 1,097,612
                                                                     ===========

                      LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities
          Accounts payable                                            $ 394,536
          Accrued expenses                                              142,358
          Merchandise credits                                            83,745
          Notes and loans payable                                       463,862
                                                                     -----------
            Total Current Liabilities                                 1,084,501
                                                                     -----------

Commitments and Contingencies                                                -

                              STOCKHOLDERS' EQUITY
Common Stock
          Par value, $.001, 200,000,000 shares authorized,
             180,068,610 shares issued and outstanding                  180,069
Additional paid in capital                                            2,455,272
Deficit                                                              (2,622,230)
                                                                     -----------

Total Stockholders' Equity                                               13,111
                                                                     -----------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                          $ 1,097,612
                                                                     ===========

                 See notes to consolidated financial statements.

                                      F-3
<PAGE>

                 stereoscape.com, inc. AND SUBSIDIARY COMPANIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS


                                                              Years Ended
                                                      December 31,
                                                          2001            2000
                                                --------------------------------

Sales                                                $ 1,239,888    $ 2,269,233


Cost of sales                                            919,816      1,973,698
                                                --------------------------------

Gross profit                                             320,072        295,535


Selling, General and Administrative expenses           1,513,287        973,899
                                                --------------------------------

Net Loss                                             $(1,193,215)     $(678,364)
                                                ================================


Net Loss per share, basic and diluted                   $ (0.008)      $ (0.009)

Weighted average number of
   shares, basic and diluted                         145,544,199     73,262,341



                 See notes to consolidated financial statements.

                                      F-4
<PAGE>

                 stereoscape.com, inc. AND SUBSIDIARY COMPANIES
           CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
                     YEARS ENDED DECEMBER 31, 2001 AND 2000


                               Common Stock    Additional
                           -------------------  Paid-in
                             Shares     Amount  Capital    Deficit     Total
--------------------------------------------------------------------------------

Balance at
   December 31, 1999       44,719,905  $44,720   $149,656  $(750,651) $(556,275)

Issuance of  stock for
   acquisitions            24,000,000   24,000    756,938         -     780,938

Issuance of common stock
under private placements    2,903,505    2,904    107,096         -     110,000
Issuances for options
   and other               47,555,200   47,555  1,098,660         -   1,146,215

Net Loss                           -        -         -     (678,364   (678,364)
--------------------------------------------------------------------------------

Balance at
   December 31, 2000      119,178,610 $119,179  $2,112,35$(1,429,015)  $802,514

Issuance of stock
  for acquisition          10,000,000   10,000     90,000         -     100,000

Issuance of common stock
under private placements   42,590,000   42,590  1,086,910       $ -   1,129,500

Issuances for options
   and other                8,300,000    8,300     22,950       $ -      31,250

Impariment relating to
 value of long-lived assets        -        -    (856,938)      $ -    (856,938)
Net Loss                           -        -          -  (1,193,215)(1,193,215)
--------------------------------------------------------------------------------

Balance at
   December 31, 2001     180,068,610 $180,069  $2,455,272$(2,622,230)   $13,111
================================================================================



                 See notes to consolidated financial statements.

                                      F-5
<PAGE>


                 stereoscape.com, inc. AND SUBSIDIARY COMPANIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                                                         Years Ended
                                                          December 31
                                                        2001             2000
                                              ----------------------------------
Cash flows from operating activities:
          Net loss                                 $ (1,193,215)      $(678,364)
Adjustments to reconcile net loss to
   net cash used in operations:
          Depreciation and amortization                  37,130          12,479
     Changes in operating assets:
          Accounts and notes receivable                   4,856         (12,397)
          Inventories                                  (425,722)        (23,969)
          Other current assets                          (24,388)        (20,443)
     Changes in operating liabilities:
          Accounts payable                              151,683         (41,845)
          Accrued expenses payable                     (166,454)       (333,715)
          Merchandise credits                           (16,476)        100,221
          Notes and loans payable                       347,030         145,752
                                              ----------------------------------

Net cash used in operating activities                (1,285,556)       (852,281)
                                              ----------------------------------

Cash flow from investing activities:
          Purchases of fixed assets                      (6,850)       (105,777)
          Acquisition of intangible assets              (54,500)        (25,303)
                                              ----------------------------------
Net cash used in investing activities                   (61,350)       (131,080)
                                              ----------------------------------

Cash flow from financing activities:
          Issuance of capital stock                   1,160,749       1,189,992
          Repayment of note receivable                    9,375               -
                                              ----------------------------------

Net cash provided by financing activities             1,170,124       1,189,992
                                              ----------------------------------

Increase (decrease) in cash                            (176,782)        206,631

Cash, beginning of year                                 210,188           3,557
                                              ----------------------------------

Cash, end of year                                      $ 33,406       $ 210,188
                                              ==================================

Supplemental disclosure of cash flow information:
          Interest paid                                $ 21,196         $ 3,951

Supplementary Disclosure of Non-Cash Transactions:

In 2001 the Company issued 10,000,000 shares of common stock for the acquisition
of Toontz Toyz,  Inc., and the Company  impaired  assets  totaling  $856,938 and
reduced additional  paid-in-capital for the related value in excess of par value
of the shares issued.

In 2000 the Company issued 24,000,000 shares of common stock for the acquisition
of Marx Toys, Inc. and epiggybank.com, Inc. and 1,125.000 shares of common stock
in payment of certain liabilities.

                 See notes to consolidated financial statements.

                                      F-6
<PAGE>


                 stereoscape.com, inc. AND SUBSIDIARY COMPANIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


     NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     ORGANIZATION

     stereoscape.com,  inc.  ("Company")  was established in 1988 under the name
Alliance Health Enterprises, Inc. In April 1997 the Company's Board of Directors
approved a change in the Company's name to Alliance Technologies,  Inc. at which
time the Company acquired American Buyers Club  International,  Inc. ("ABC"). In
April 1997 ABC formed Alpha Sound and Vision, Inc. as a wholly owned subsidiary.
In  December  1998 the  Company's  Board of  Directors  approved a change in the
Company's name to  stereoscape.com,  inc. On August 23, 2000 the Company entered
into a stock  purchase  agreement with the  principals of  epiggybank.com,  inc.
("epiggybank"),  a financial and educational web site for children. The terms of
the agreement included the transfer,  to the Company,  of the "epiggybank" name,
trademarks  and  intellectual  properties,  and other  assets  being used in the
seller's  business>  Since  the  sellers  have been  unable  to  deliver a valid
trademark  for  "epiggybank"  the  Company is in the process of  rescinding  the
transaction,  and to that end has halted the shares  issued in the  transaction.
Effective October 1, 2000 the Company acquired Marx Toys, Inc.  ("Marx").   Marx
is located in North Miami, Florida and sells collectible action figures and play
sets primarily through the Internet and via telemarketing.
     On July 16, 2001,  the Company  acquired all of the issued and  outstanding
shares of Toontz Toys Inc. Toontz is involved in the development of intellectual
properties, which they will license to manufacturers of different products.
     "ABC" is located in  Morganville,  New Jersey and sells high  quality  home
entertainment  equipment. The Company's business is obtained through advertising
in trade magazines and via the Internet.

     FINANCIAL STATEMENT PRESENTATION

     The consolidated  financial  statements include the accounts of the Company
and its wholly owned subsidiary companies.  All material inter-company balances
are eliminated.

     INVENTORIES

     Inventories  are stated at the lower of cost or market as determined by the
first-in, first-out method.

     INTANGIBLE ASSETS

     Trademarks,  domain  names,  copyrights  and other  intangible  assets  are
recorded at cost less accumulated  amortization of $3,917 and are amortized over
their  estimated  useful lives.  Intangible  assets are reviewed for  impairment
whenever events or  circumstances  indicate  impairment  might exist or at least
annually.  The Company  assesses the  recoverability  of its assets by comparing
projected  undiscounted  cash flows  associated  with those assets against their
respective  carrying  amounts.  Impairment  if any is based  upon the  excess of
carrying amount over the fair value of those assets.

     DEPRECIATION AND AMORTIZATION

     Depreciation  and  amortization  is computed  utilizing  the  straight-line
method over the estimated useful lives of the assets,  which range between three
and fifteen years.

                                      F-7
<PAGE>

     ADVERTISING COSTS

     The  Company  expenses  production  costs of print,  radio  and  television
advertisements  as of the first date the  advertisements  take place.  All other
advertising  costs are expensed as incurred.  Advertising  expenses  included in
selling, administrative and general expenses were $47,870 in 2001 and $82,493 in
2000.

     EARNINGS PER COMMON SHARE

     Earnings  per common  share is  computed  by  dividing  net  income  (loss)
available to common shareholders by the weighted-average number of common shares
outstanding  during the period. On October 4, 2000 the Company affected a 15 for
1 forward stock split.  All calculations and share amounts have been adjusted to
reflect the  post-split  value.  Diluted  earnings  per share do not reflect the
potential  dilution that could occur if  securities or other  contracts to issue
common shares were  exercised or converted into common shares or resulted in the
issuance of common shares as the impact of such would be antidilutive  given the
net losses incurred.

     REVENUE RECOGNITION AND FINANCIAL STATEMENTS

     Net sales are recognized at the time merchandise is shipped to customers.

     In December 1999, the  Securities and Exchange  Commissions  (?SEC?) issued
SEC Staff Accounting  Bulletin (?SAB?) No. 101; Revenue Recognition in Financial
Statements.? SAB 101 summarized certain of the SEC's views in applying generally
accepted accounting  principles to revenue recognition in financial  statements.
SAB 101 will be  effective  for the Company in the first  quarter of fiscal year
2001. The Company has adopted SAB 101 and believes that its revenue  recognition
policy is consistent with the guidance of SAB 101.

     FAIR VALUE OF FINANCIAL INSTRUMENTS

     The fair value of a financial instrument represents the amount at which the
instrument could be exchanged in a current  transaction between willing parties,
other  than a forced  sale or  liquidation.  Significant  differences  can arise
between the fair value and  carrying  amount of financial  instruments  that are
recognized at historical cost amounts.

     USE OF ESTIMATES

     The  preparation  of financial  statements  in  conformity  with  generally
accepted  accounting  principles  requires  management  to  make  estimates  and
assumptions  that affect the reported  amounts in the financial  statements  and
accompanying notes. Actual results could differ from these estimates.

     WARRANTY

     A  subsidiary  of the Company  sells its products  with the  manufacturer's
factory warranty.  In addition,  the Company offers extended  warranties,  at an
additional cost. A third party for whom the Company pays a fixed fee underwrites
the extended warranties.

                                      F-8
<PAGE>

     RECENT ACCOUNTING PRONOUNCEMENTS

     In July 2001,  the  Financial  Accounting  Standards  Board  (FASB)  issued
Statement of Financial  Accounting  Standards  No. 141  "Business  Combinations"
(SFAS 141) and Statement of Financial Accounting Standards No. 142 "Goodwill and
Other  Intangible  Assets"  (SFAS  142).  SFAS 141  requires  that all  business
combinations  initiated  after June 30, 2001be  accounted for using the purchase
method of  accounting,  thereby  eliminating  use of the  pooling  of  interests
method.  SFAS 141 also requires that an intangible  asset acquired in a business
combination  be  recognized  apart from  goodwill if: (i) the  intangible  asset
arises from  contractual  or other legal rights or (ii) the acquired  intangible
asset is capable of being separated from the acquired enterprise,  as defined in
SFAS 141.
     SFAS 142 requires,  among other things, that goodwill not be amortized, but
should be subject to impairment  testing at the "reporting  unit level" at least
annually and more frequently  upon the occurrence of certain events,  as defined
by SFAS  142.  A  reporting  unit is the  same  level as or one  level  below an
operating segment, as defined by Statement of Financial Accounting Standards No.
131 "Disclosures About Segments of an Enterprise and Related Information."
     The  Company  is  required  to  apply  SFAS  141 to  business  combinations
initiated after June 30, 2001 and is required to adopt SFAS 142 at the beginning
of fiscal  2002,  with the  exception  of goodwill  and  intangible  assets with
indefinite lives acquired after June 30, 2001, which will be immediately subject
to the non-amortization and amortization provisions as defined by SFAS 142.

     LONG-LIVED ASSETS

     In  accordance  with  SFAS  No.  121,  Accounting  for  the  Impairment  of
Long-Lived Assets and for Long-Lived Assets to be disposed of, long-lived assets
to be held and used by the Company are reviewed to determine whether an event or
change in circumstances  indicates that the carrying amount of the asset may not
be recoverable. For long-lived assets to be held and used, the Company bases its
evaluation on such impairment indicators as the nature of the assets, the future
economic  benefit  of  the  assets,  any  historical  or  future   profitability
measurements, as well as other external market conditions or factors that may be
present.  If such impairment  indicators are present or other factors exist that
indicate  that the  carrying  amount of the asset  may not be  recoverable,  the
Company  determines  whether  impairment  has  occurred  through  the  use of an
undiscounted  cash  flows  analysis  of  assets  at the  lowest  level for which
identifiable  cash  flows  exist.  If  impairment  has  occurred,   the  Company
recognizes  a loss  for the  difference  between  the  carrying  amount  and the
estimated  value of the  asset.  The fair value of the asset is  measured  using
discounted  cash flow  analysis or other  valuation  techniques.  See Note 7 for
impairment of assets.

     INCOME TAXES

     The Company accounts for income taxes under the asset and liability method.
Deferred  tax  assets  and   liabilities  are  recognized  for  the  future  tax
consequences  attributable  to  differences  between  the  financial  statements
carrying  amounts of existing assets and  liabilities  and their  respective tax
bases and operating loss and tax credit  carryforwards.  Deferred tax assets and
liabilities  are measured  using enacted tax rates  expected to apply to taxable
income in the years in which  those  temporary  differences  are  expected to be
recovered or settled. The effect of a change in tax rates on deferred tax assets
and  liabilities  is  recognized  in  income in the  period  that  includes  the
enactment date.

     CONCENTRATION OF CREDIT RISK

     The Company  maintains its cash with various financial  institutions  which
are insured by the Federal Deposit Insurance Corporation up to $100,000.

                                      F-9
<PAGE>


     NOTE 2 - ACQUISITIONS

     Effective July 16, 2001, the Company  acquired Toontz Toyz, Inc., which was
accounted for as a purchase,  whereby Toontz became a wholly owned subsidiary of
the Company.  In connection with the accounting,  the Company issued  10,000,000
restricted shares of common stock, for $.01 per share, valued at $100,000.
     The Company acquired intangible assets including  trademarks,  domain names
and copyrights.  There were no material operations for Toontz Toyz Inc. prior to
July 16, 2001, date of acquisition.


     NOTE 3 - GOING CONCERN

     The  financial  statements  have been  prepared  assuming  the Company will
continue  as a going  concern.  The  Company  has a net  loss  of  approximately
($1,193,000)  and a working capital  deficiency of  approximately  ($242,600) at
December 31, 2001 which raises  substantial doubt about the Company's ability to
continue as a going concern.  The Company  intends to raise  additional  capital
through  short term and long term  borrowings,  a private  placement or a public
offering.  The Company  believes that upon  obtaining  proceeds from  additional
financing the  substantial  doubt about the  Company's  ability to continue as a
going concern will be eliminated.


     NOTE 4 - INVENTORIES

     Inventories consist of the following at December 31, 2001:

            Finished goods                              $563,596
            Raw materials                                139,274
                                                        ---------

                                                        $702,870
                                                        =========

     NOTE 5 - PROPERTY AND EQUIPMENT, at cost

     Fixed assets consist of the following at December 31, 2001:

              Furniture and equipment                          $ 96,376
              Leasehold improvemens                               5,974
                                                         ---------------
                                                                102,350
              Less - accumulated depreciation                   (33,725)
                                                         ---------------

                                                               $ 68,625
                                                         ===============

                                      F-10
<PAGE>

     NOTE 6 - NOTES AND LOANS PAYABLE

     In April 2001 the Company  received  loans,  totaling  $375,000,  for which
promissory  notes,  due in April 2002, were issued.  The notes are  non-interest
bearing.  In  addition,Company  has  granted  the  payees  options  to  purchase
3,900,000 shares of its common stock at an exercise price of $.04 per share. The
right to exercise the option shall terminate in April 2003.

     At the Balance Sheet date, Marx Toys, Inc. had a $100,000 revolving line of
credit, expiring in January 2002, with a financial institution, with interest of
prime  plus  1% per  annum  (5.75%  as of  December  31,  2001).  A  shareholder
guarantees the  liability.  The financial  institution  has extended the loan by
requiring the Company to make monthly payments until the loan is renegotiated.


         NOTE 7 - COMMITMENTS AND CONTINGENCIES

     LEASES

     The Company and a subsidiary  lease office  facilities in Morganville,  New
Jersey and warehouse  facilities in Sebring,  Ohio requiring minimum annual rent
of  approximately  $78,576.  The leases  expire  April 2004 and April 2006,  and
require the Company to pay various operating  expenditures of the facilities and
contain  provisions  for rent  escalations.  Rent  expense  totaled  $39,633 and
$35,581 for 2001 and 2000,  respectively.  The New Jersey  facility  contains an
option to renew and is guaranteed by the Chief Financial Officer of the Company.

     Future minimum  commitments  under operating lease  arrangements are due as
follows:


Years Ending December 31,                               Amount
---------------------------------------------------------------------
2002                                                         $98,960
2003                                                          90,324
2004                                                          49,581
                                                   ------------------
                                                           $ 238,865
                                                   ==================


     LITIGATION

     The Company is a party to a summons  issued  against Jay Horowitz  (and his
Company American Plastic Equipment,  Inc.), former owner of Marx, as a result of
a default by him on debt owed to a  non-related  third  party  (Mahoning  Valley
Plastics,  Inc.  and Marx Toys  Corp.).  The  complaint  is seeking  recovery of
personal property, which includes molds in possession of Marx, which was pledged
as  security  against  Horowitz's  debt The  Company  has been  advised by their
counsel,  that if  Mahoning  Valley  Plastics,  Inc.  and Marx  Toys  Corp.  are
successful  in  recovering  Marx  molds that a counter  suit will be  instituted
against  Horowitz.  The  security  interest  is in the sum of  $675,000  and was
recorded  prior to the  Company's  ownership  of the  molds.  The  Complaint  is
presently pending in the Mohoning County Court of Common Pleas. A magistrate has
ruled  against the Company and the case is now on appeal to a judge.  Management
is contesting the case  vigorously.  It is presently  unclear if the unfavorable
outcome of the magistrate's ruling can be overcome. The loss would be limited to
the value of the molds  subject to the UCC-1  filing.  However,  the  company is
presently  seeking an out of court  settlement  of this matter.  Other than this
matter the Company has no material legal  proceedings by or against the Company,
or any of its subsidiaries.
     Management  has decided to impair its molds  arising  from the  acquisition
totaling $875,938, as failure to reach an out of court settlement will result in
a return of the molds or return of assets of equal value.

     EMPLOYMENT AGREEMENT

     As part of the acquisition of Toontz Toyz, Inc. the Company entered into an
employment agreement with an employee, dated June 1, 2001. The agreement,  which
is for a period of three years,  commencing June 1, 2001, includes a base salary
of $100,000 per annum. In addition,  he will receive a one time incentive bonus,
during the term of the agreement,  in the amount of $125,000, if and when Toontz
Toyz, Inc. achieves $5,000,000 in gross revenues.

                                      F-11
<PAGE>


     NOTE 8 - INCOME TAXES

The income tax provision is comprised of the following for the years ended:

                                                        December 31,
                                               2001                       2000
                            ----------------------------------------------------
Current
     Federal                                $     -                    $     -
     State                                        -                          -
Deferred
     Federal                                (405,693)                  (230,644)
     State                                  (107,400)                   (61,000)
                            ----------------------------------------------------
Sub-total                                   (513,093)                  (291,644)

Valuation allowance                          513,093                    291,644
                            ----------------------------------------------------

Income tax provision                        $     -                    $     -
                            ====================================================

     The difference  between the U.S.  federal  statutory rate and the Company's
effective tax rate are as follows:
                                                  Year Ended December 31,
                                              2001                       2000
                            ----------------------------------------------------
Federal statutory tax rate                     34.0%                      34.0%
Other                                          (1)                        (1)
Valuation allowance                           (33)                       (33)
                            ----------------------------------------------------

Effective tax rate                             0.00%                      0.00%
                            ====================================================

     Deferred tax assets (liabilities) are comprised of the following:

                                                             December 31, 2001
                                                       -------------------------

Net operating loss carryforwards                                  $2,622,000

Less:  valuation allowance                                        (2,622,000)
                                                       -------------------------

                                                                        $ -
                                                       =========================


     The  Company  has   available  net   operating   loss  carry   forwards  of
approximately  $2,622,000  for federal and state income taxes  expiring  between
2003 and 2021 to offset future taxable income.
     A deferred tax asset  results from the benefit of utilizing  net  operating
loss carry forwards in future years. A valuation allowance has been provided for
the entire benefit.
     The Company  will  continue to assess the  recoverability  of its  deferred
income  tax  asset  and  adjustments  may be  necessary  based  on the  evidence
available at that time. The difference  between the expected rate of tax and the
actual tax expense  relates  entirely  to state tax  expense  and the  valuation
allowance.

                                      F-12
<PAGE>

     NOTE 9 - STOCK PLANS

     The Company's  1998 Incentive and  Nonqualified  Stock Option Plan provides
for the  granting  of  options  to  purchase  shares of common  stock to certain
employees of the Company.  Exercise and vesting terms for options  granted under
this plan are  determined  at each grant date.  All options when granted will be
granted  at not less than  fair  market  value at dates of grant.  At the end of
2001,  23,225,000 options were available for grant under the plan and 23,225,000
shares of common stock were reserved for issuance  under the 1998  Incentive and
Nonqualified  Stock Option Plan. As of December 31, 2001 the  following  options
were granted and exercised under this plan.

     SFAS No. 123 "Accounting for Stock-Based Compensation" ("SFAS No. 123") was
effective for the Company for fiscal 1998. SFAS No. 123 encourages (but does not
require)  compensation  expense to be measured based on fair value of the equity
instrument  awarded.  In accordance with APB No. 25 "Accounting for Stock Issued
to  Employees" no  compensation  cost has been  recognized  in the  Consolidated
Statements of Income for the Company's stock option plans. If compensation  cost
for the company's  stock option plans had been determined in accordance with the
fair value method  prescribed by SFAS No. 123, the company's net loss would have
been  $1,425,469 and $2,761,012 for 2001 and 2000  respectively.  This pro forma
information  may not be  representative  of the amounts to be expected in future
years as the fair value method of accounting  prescribed by SFAS No. 123 has not
been applied to options granted prior to 1996.


         Stock options transactions are summarized as follows:


                                        2001 Options            2000 Options
                                                Weighted                Weighted
                                                 Average                 Average
                                                Exercise                Exercise
                                     Shares        Price        Shares     Price
--------------------------------------------------------------------------------

Outstanding, beginning of year   20,075,000      $0.0278    15,525,000   $0.0300

Granted                          14,200,000      $0.0292    51,615,495    0.0401

Exercised                        (8,300,000)     $0.0123   (33,696,760)   0.0375

Forfeited                        (2,750,000)     $0.0667   (13,368,735)   0.0380
--------------------------------------------------------------------------------


Outstanding, end of year         23,225,000      $0.0395    20,075,000    0.0278
                               =================================================

Options and warrants
   exercisable at year-end       23,225,000      $0.0395    15,855,000    0.0364
                               =================================================

Weighted-average fair value of     $ 0.0272                   $ 0.0314
   options granted during the year


     The fair  value of each  option  granted is  estimated  on the date of each
grant using the Black-Scholes  option-pricing  model with the following weighted
average  assumptions used for grants in 2001 and 2000,  respectively:  Risk free
interest rate 5.5% and 5.5%;  vested  immediately;  expected life within 5 years
and within 5 years;  expected volatility of 335% and 111%; dividend yield 0% and
0%. The fair values generated by the  Black-Scholes  model may not be indicative
of the future benefit, if the option holder may receive any that.


     NOTE 10 - SEGMENT INFORMATION

     The  Company  adopted  Statement  Financial  Accounting  Standard  No.  131
"Disclosures about Segments of an Enterprise and Related Information (SFAS 131)"
in 2000.
     The accounting  policies and detail of operations of the operating segments
are the  same as  those  described  in the  summary  of  significant  accounting
policies.  There are no material inter-segment sales or transfers.  All revenues
are  generated  within the United  States and all  revenue-producing  assets are
located therein.  Management evaluates a segment's performance based upon profit
or loss from operations before income taxes.

                  Sales
                       Home Theatre                           $862,263
                       Toy Products                            377,625
                       Intellectual Properties Development          -
                                                          -------------
                           Total Sales                      $1,239,888
                                                          =============

                  Operating loss
                       Home Theatre                          $(399,117)
                       Toy Products                           (525,179)
                       Intellectual Properties Development    (127,468)
                                                          -------------
                                                            (1,051,764)
                  Corporate other expenses                     141,451
                                                          -------------

                  Loss before income taxes                 $(1,193,215)
                                                          =============


                  Assets
                       Home Theatre                          $ 114,342
                       Toy Products                            700,100
                       Intellectual Properties Development     201,652
                       Parent Company                           81,518
                                                          -------------
                           Total assets                    $1,,097,612
                                                          =============

                  Depreciation and amortization expense
                       Home Theatre                            $ 7,246
                       Toy Products                             27,384
                       Intellectual Properties Development       2,500
                                                          -------------
                           Total depreciation and amortization $37,130
                                                          =============


     NOTE 11 - SUBSEQUENT EVENTS

     In  January  2002  the  Company  entered  into a  financing  agreement  for
$300,000.  The  agreement  consists  of a  promissory  note,  in the  amount  of
$200,000,  which is due January 2, 2003.  Interest  only is payable on a monthly
basis, at the rate of 12% per annum. In exchange for the remaining  $100,000 the
Company has agreed to issue 10,000,000 shares of stock.

                                      F-13
<PAGE>