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

                                   Form 10-KSB

(Mark One)

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

     For the fiscal year ended December 31, 2001

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

For the transition period from _______________ to ________________

Commission file no.: 000-29201

                            Elva International, Inc.
                  --------------------------------------------
                 (Name of small business issuer in its charter)

           Florida                                                65-0790761
-------------------------------                              -------------------
(State or other jurisdiction of                             (I.R.S. Employer
incorporation or organization)                               Identification No.)


222 Lakeview Avenue, PMB 160-415
West Palm Beach, FL                                                 33401
- ---------------------------------------                    -------------------
(Address of principal executive offices)                          (Zip Code)

Registrant's telephone number: (925) 831-0504

                                       N/A
            ---------------------------------------------------------
          (Former name or former address, if changes since last report)

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

                                                        Name of each exchange on
     Title of each class                                     which registered

       None                                                     OTC: BB
 -----------------------------                         -------------------------
Securities registered under Section 12(g) of the Exchange Act:

                         Common Stock, $0.0001 par value
                                (Title of class)
                      ------------------------------------

Copies of Communications Sent to:
                                    Mintmire & Associates
                                    265 Sunrise Avenue, Suite 204
                                    Palm Beach, FL 33480
                                    Tel: (561) 832-5696 - Fax: (561) 659-5371



<PAGE>



     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  contained  in  this  form,  and no  disclosure  will be
contained,  to the  best of  registrant's  knowledge,  in  definitive  proxy  or
information  statements  incorporated  by reference in Part III of this Form 10-
KSB or any amendment to this Form 10-KSB. [X]

     The  Registrant's  revenue for the fiscal  year ended  December  31,  2001:
$400,493.

     The aggregate market value of the voting and non-voting  common equity held
by non-affiliates (computed by reference to the price at which the common equity
was sold, or the average bid and asked price of such common  equity) as of April
9, 2002 was $2,203,180.80.

     There were 9,437,727 shares of the registrant's common stock outstanding as
of December 31, 2001.

DOCUMENTS INCORPORATED BY REFERENCE:    None

Transitional Small Business Disclosure Format: Yes [ ] No [X]












<PAGE>


<TABLE>
<CAPTION>
                            SUMMARY TABLE OF CONTENTS

<S>        <C>                                                                               <C>
PART I.........................................................................................4

Item 1.    Description of Business.............................................................4

Item 2.    Description of Property............................................................23

Item 3.    Legal Proceedings..................................................................24

Item 4.    Submission of Matters to a Vote of Security Holders................................24

PART II.......................................................................................24

Item 5.    Market Price of and Dividends on the Registrant's Common Equity and Other
           Shareholder Matters................................................................24

Item 6.    Management's Discussion and Analysis or Plan of Operation..........................25

Item 7.    Financial Statements...............................................................28

Item 8.    Changes in and Disagreements with Accountants......................................28

PART III......................................................................................29

Item 9.    Directors, Executive Officers, Promoters and Control Persons.......................29

Item 10.   Executive Compensation.............................................................30

Item 11.   Security Ownership of Certain Beneficial Owners and Management.....................30

Item 12.   Certain Relationships and Related Transactions.....................................32

Item 13.   Index to Exhibits..................................................................33

SIGNATURES....................................................................................35
</TABLE>




<PAGE>



PART I

Forward Looking Statements

     Certain  statements  contained in this annual  filing,  including,  without
limitation, statements containing the words "believes", "anticipates", "expects"
and  words  of  similar  import,  constitute  forward-looking  statements.  Such
forward-looking  statements  involve known and unknown risks,  uncertainties and
other factors that may cause the actual results,  performance or achievements of
the Company,  or industry  results,  to be materially  different from any future
results,   performance   or   achievements   expressed   or   implied   by  such
forward-looking statements.

     Such factors include, among others, the following: international,  national
and local  general  economic and market  conditions:  demographic  changes;  the
ability of the Company to sustain, manage or forecast its growth; the ability of
the Company to successfully make and integrate acquisitions;  raw material costs
and availability; new product development and introduction;  existing government
regulations  and  changes  in,  or  the  failure  to  comply  with,   government
regulations;  adverse publicity;  competition; the loss of significant customers
or suppliers;  fluctuations  and  difficulty in forecasting  operating  results;
changes in business strategy or development  plans;  business  disruptions;  the
ability  to attract  and  retain  qualified  personnel;  the  ability to protect
technology; and other factors referenced in this and previous filings.

     Given these  uncertainties,  readers of this Form 10-KSB and  investors are
cautioned not to place undue reliance on such  forward-looking  statements.  The
Company  disclaims  any  obligation  to update any such  factors or to  publicly
announce the result of any revisions to any of the forward-  looking  statements
contained herein to reflect future events or developments.


Item 1.  Description of Business

(a) Development

     Elva  International,  Inc.  f/k/a Elva,  Inc. (the "Company" or "ELVA") was
organized as a Florida  corporation on August 15, 1997. The original  purpose of
the Company was to develop and apply new and profitable applications of computer
technology in the general marketplace. Introduction to a French company's unique
application  of such  technology  resulted in the entry into a  Voluntary  Share
Exchange  Agreement  between  the  Company  and the  shareholders  of the French
company  ELVA,  S.A.("ELVA,  SA").  Recognizing  that  ELVA,  SA had  invaluable
technology and computer  software  designing  assets,  the Company's  management
renamed the Company ELVA, INC. The United States Company's executive offices are
presently  located at 222 Lakeview Ave., PMB  160-415,West  Palm Beach, FL 33401
and its telephone number is (925) 831-0504. Its European and Asian subsidiaries'
offices are Elva S.A located at 74,av Edouard Vaillant, 92100 Boulogne,  France,
telephone  number:  33-(0)1-41-31-66-77  and Elva Asia Pte Ltd located at 7500 A
Beach Road, The Plaza  #14-306/307,  Singapore 199 591,  telephone number:  (65)
299-36-67.

     The Company  relied upon Section  4(2) of the  Securities  Act of 1933,  as
amended (the "Act") and Rule 506 of Regulation D promulgated  thereunder  ("Rule
506") for recent  issuances of its  unregistered  securities.  In each instance,
such  reliance  was based upon the fact that (i) the  issuance of the shares did
not involve a public  offering,  (ii) there were no more than  thirty-five  (35)
investors (excluding

                                        4

<PAGE>



"accredited investors"),  (iii) each investor who was not an accredited investor
either alone or with his  purchaser  representative(s)  has such  knowledge  and
experience  in financial  and business  matters that he is capable of evaluating
the merits and risks of the  prospective  investment,  or the issuer  reasonably
believes  immediately  prior to making any sale that such purchaser comes within
this  description,  (iv) the offers and sales were made in compliance with Rules
501 and 502, (v) the securities  were subject to Rule 144  limitations on resale
and (vi) each of the parties was a  sophisticated  purchaser and had full access
to the  information  on the Company  necessary  to make an  informed  investment
decision by virtue of the due diligence  conducted by the purchaser or available
to the purchaser prior to the transaction (the "506 Exemption").

     In February 2001, the Company changed its name to Elva International,  Inc.
from Elva, Inc. to more clearly reflect the business  objectives of the Company.
The change of the Company's name resulted in a new trading  symbol,  "EVII," the
mandatory exchange of the Company's old shares and a new CUSIP number.

     In May 2001, the Company's Board of Directors approved a one for ten (1 for
10) reverse split of the Company's  common stock to be effected on or about June
14, 2001.

     In May 2001,  the Company  entered into an agreement  with Perrot,  Ltd., a
Bahamian corporation ("Perrot") to provide the services of Lionel Rotcage as the
President,  Chief  Executive  Officer  and  Director  of the  Company.  For such
services,  Perrot  received  646,500 shares of the Company's  restricted  common
stock.  The term of the agreement is for a period of four (4) years. The Company
has  alleged a claim for return of all or part of the shares  issued as a result
of this transaction,  however the matter remains unresolved.  For such issuance,
the Company relied upon the 506 Exemption.  No state exemption was necessary, as
Perrot is a Bahamian corporation. See Part I, Item 1. "Description of Business -
(b) Business of Registrant - Employees and Consultants";  and Part III, Item 12.
"Certain Relationships and Related Transactions".

     In June 2001, the Company sold 125,000 post-split  restricted common shares
to Perrot for  $200,000.  For such  issuance,  the  Company  relied upon the 506
Exemption.   No  state  exemption  was  necessary,   as  Perrot  is  a  Bahamian
corporation.  See Part I, Item 1.  "Description  of  Business - (b)  Business of
Registrant  -  Employees  and  Consultants";  and Part  III,  Item 12.  "Certain
Relationships and Related Transactions".

     In  August  2001,  the  Company  issued  90,000  and  45,000  shares of its
unrestricted common stock pursuant to a Registration Statement filed on Form S-8
on July 13, 2001 to Jill E. Brand and Donald F. Mintmire for services  rendered.
See Part I, Item 1.  "Description  of Business - (b)  Business of  Registrant  -
Employees and  Consultants";  and Part III, Item 12. "Certain  Relationships and
Related Transactions".

     In August 2001,  pursuant to the Company's  Bylaws,  the Company's Board of
Directors  removed Lionel Rotcage as President and Chief  Executive  Officer and
Cedric Colnot as Vice-President of Technology.  Each resigned their positions as
directors of the Company.  Neither did so as a result of a disagreement with the
Registrant on any matter relating to the  Registrant's  operations,  policies or
practices and neither furnished the Registrant with a letter requesting that the
matter be disclosed. See Part I, Item 1. "Description of Business - (b) Business
of Registrant - Employees  and  Consultants";  and Part III,  Item 12.  "Certain
Relationships and Related Transactions".


                                        5

<PAGE>



     In  September  2001,  Serge  Parienti  was  appointed  President  and Chief
Executive Officer.  He was already a member of the Company's Board of Directors.
See Part I, Item 1.  "Description  of Business - (b)  Business of  Registrant  -
Employees and  Consultants";  and Part III, Item 12. "Certain  Relationships and
Related Transactions".

     In November  2001,  the Company  sold  1,769,000  shares of its  restricted
common  stock to Olex  Financial,  Ltd. for  $136,228.  For such  offering,  the
Company relied upon the 506 Exemption.  No state exemption was necessary as Olex
Financial,   Ltd.  is  a  foreign  entity.  See  Part  III,  Item  12.  "Certain
Relationships and Related Transactions".

     In November  2001,  the Company  sold  1,231,140  shares of its  restricted
common stock to five (5) persons for a total of $166,204. For such offering, the
Company relied upon the 506 Exemption.  No state exemption was necessary, as the
purchasers were from France and Kuwait.

     In November  2001,  the Company  issued  129,082  shares of its  restricted
common  stock  to Alain  Duffas  for  cancellation  of a debt in the  amount  of
$17,488. For such offering, the Company relied upon the 506 Exemption.  No state
exemption was necessary,  as Mr. Duffas is a French resident. See Part III, Item
12. "Certain Relationships and Related Transactions".

     In December 2001, the Company sold 168,500 shares of its restricted  common
stock to two (2) persons for a total of $84,250. For such offering,  the Company
relied  upon  the 506  Exemption.  No  state  exemption  was  necessary,  as the
investors were from France and Cypress.  The share  certificates were not issued
until January 2002.

     In December 2001, the Company  entered into a  non-exclusive  manufacturing
agreement with Sagem,  SA, a French  company  ("Sagem") to produce the Company's
smart-card product. The Company must meet certain minimum purchase requirements,
which  include the purchase of 100,000  cards in the first twelve (12) months of
the agreement for a total price of approximately $500,000. The twelve (12) month
period  has not  begun,  as Sagem is not yet  equipped  to  initiate  smart-card
production. The term of the agreement is for a period of three (3) years.

     In February 2002,  the Company's  Board of Directors  approved  issuance of
20,000 shares of its restricted common stock to Robert C. Pierre. Mr. Pierre had
asserted a claim for breach of an oral employment agreement. The Company settled
any such claim for the  20,000  shares  issued to Mr.  Pierre.  The shares  were
actually issued in March 2002. See Part I, Item 1. "Legal Proceedings"; and Part
III, Item 12. "Certain Relationships and Related Transactions".

     In March 2002, Serge Parienti resigned as the Company's President and Chief
Executive Officer. He was subsequently appointed  Vice-President.  He remained a
member of the Company's  Board of Directors.  Also in March 2002, Eric Danon was
appointed  President  and Chief  Executive  Officer  by the  Company's  Board of
Directors  and was also  appointed  to the Board of  Directors to fill a vacancy
until the next meeting of the shareholders in which Directors were elected.  See
Part I,  Item 1.  "Description  of  Business  - (b)  Business  of  Registrant  -
Employees and  Consultants";  and Part III, Item 12. "Certain  Relationships and
Related Transactions".





                                        6

<PAGE>



(b)  Business of Issuer.

General

     One of the main  objectives of ELVA is to participate in the  globalization
of e-commerce,  through  providing secure online purchasing and customer loyalty
incentives  between  individuals  and businesses.  The latter,  whether they are
banks or retailers,  telecommunication  operators or internet service providers,
issue cards in order to allow for payment and to promote customer loyalty.  ELVA
foresees  a consumer  that can order  goods and  services  with the same card in
stores,  online with any telephone set or computer,  anytime and anywhere,  with
maximum  security.  This system,  based on  VocaliD(R)  smart card  issuing,  is
described as the Company's "butterfly scheme."

     VocaliD(R) is a new technology  that marries the security of the smart card
technology with telecommunications  simple and basic feature: sound. Any country
can use  the  Company's  VocaliD(R)  smart  card  since a  simple  telephone  or
multimedia  computer  is enough to make it work.  From this point  forward,  the
Company's VocaliD(R) smart card will no longer require smart card readers.

     The  Company's  goal is to make its  VocaliD  technology  an  International
standard in the area of secure transactions mainly including  e-commerce issues.
This belief has been bolstered when the Company's VocaliD(R) first prototype was
awarded the " best new technology of the year" during the "Cartes 98" exhibition
which  is  acknowledged  by  the  industry  as the  most  important  smart  card
exhibition worldwide.

     After four years of  research  and  development,  including  the setting of
industrial processes,  the Company's VocaliD(R) is ready to enter its first mass
production cycle.

     The Company's  initial  VocaliD(R)  smart card  technology has designed and
implemented  a memory  card  product in  accordance  with a  proprietary  online
authentication protocol. The Company's smart card, VocaliD(R),  can be used from
an  ordinary  telephone,  a  magnetic  stripe  reader,  a chip card  reader or a
personal   computer.   The  basic   function  of  VocaliD(R)  is  secure  online
authentication  based on an exclusive and patented acoustic interface consisting
in the audio  transmission  cryptograms  through  telephone  sets and computer's
microphone  without smart card readers.  Nevertheless,  the Company is currently
developing a microprocessor version of VocaliD in order to provide a wider range
of applications  combining the acoustic  interface with major  traditional smart
card standards using smart card readers.

         Therefore, the Company believes it is strongly positioned in the
e-commerce sector thanks to VocaliD's acoustic interface while matching with
current magnetic stripe-based infrastructures and future chip card standard
applications.

     Then,  near-term  marketing  efforts are focused on positioning  VocaliD(R)
smart card as a universal  solution  for secure  e-commerce  while being used in
stores as a conventional  magnetic stripe card.. This is the way VocaliD(R) will
be, in a first step, introduced to the following sectors :

Banking
Retail
Internet
Telecommunications


                                        7

<PAGE>



     From year 2002, VocaliD(R) smart card will allow to provide a wide range of
applications  using smart card readers for real life transactions in addition to
its acoustic  interface  features  that  require no card readers for  e-commerce
related  transactions.  This technological  evolution is highly strategic for it
will lead to the deployment of VocaliD(R) smart cards in every country,  whether
they have magnetic stripe or chip readers.

     In  a  second  step,  VocaliD(R)  technology  will  be  introduced  to  the
healthcare sector and to cities and governments for  transportation / identity /
entertainment related applications.

     In  addition  to this new  generation  smart  card,  VocaliD(R)  technology
consists in software:

     The first family of  VocaliD(R)  software are to be  integrated in personal
computers and servers for e-commerce  applications  based on VocaliD's  acoustic
interface. These software are called "AXS" for "Authentication by Extraction and
Synchronization".

     The second  family of  VocaliD(R)  software  will allow  card  issuers  and
vendors  to  choose  and  integrate  a  wide  range  of  security  features  and
applications  within the chip card. These software are being currently enhanced,
conceived  and  developed  and  represent  a  large  part of the  future  of the
technology and one of the Company's main strategic issues.

     The  Company  believes  that  its ASIC  Design  engineers  have  sufficient
expertise  in  hardware  technology  and  VHDL  and  Verilog  modeling  computer
programming languages necessary for such development efforts.

VocaliD(R), the online Smart Card

     A  VocaliD(R)  smart card is a credit  card-sized  plastic card in which an
integrated circuit,  containing a specific chip is embedded.  The authentication
data on the  card  can be read  via the  emission  of a  secure  audio  sequence
generated by vibration of the card. The use of VocaliD's  acoustic  interface is
very simple:  pressing the module with the thumb  activates  the card that emits
the signal through the telephone set or the computer microphone. Once the remote
server  receives the data, it  authenticates  the card,  with the application of
ELVA's AXS software. Once the card is authenticated, the server may ask the card
holder to authenticate  himself by entering his PIN. Then the service is open or
the  payment  process  completed.  The above  sequence is not  reusable  for the
cryptographic  part of the information is random and synchronizes  only with the
server.

     E-commerce applications using VocaliD system do not require any information
/ application  to be stored within the card, in the computer or in the telephone
set. For  transactions  in the real world with a card  reader,  be it a magnetic
stripe or a chip reader,  VocaliD(R)  is used as a  traditional  card. As far as
online authentication is concerned,  telephone sets and computers microphone are
the natural readers of VocaliD(R) smart card.

     VocaliD   online   security   model  relies  on  the   combination  of  two
complementary features that perfectly meets the e-commerce requirements in terms
of security:

     No online transmission of fixed codes or credit card numbers: VocaliD smart
cards generate pseudo random cryptograms with each use for online authentication
synchronized with a remote server.  The cardholder no longer enters or announces
his credit card number when purchasing over

                                        8

<PAGE>



the Internet or any  telecommunication  network.  Even he does not know what are
the codes the card sends.

     Same level of security from  everywhere,  using any terminal:  an "acoustic
vehicle",   also  generated  by  the  card,  carries  the  above  pseudo  random
authentication  sequences.  The transmission of the latter is then possible from
any telephone set or computer's microphone. Therefore, this authentication model
can be required in every situation.

The VocaliD(R)'s natural environment is characterized by six trends and three
VocaliD(R) features:

Six trends

1.   Online   exchanges    explosion   (call   centers,    IVR,   internet   and
     telecommunication services)
2.   Convergence of e-commerce with conventional in-the-store purchasing
3.   Demand for secure online payment models
4.   Globalization  of card  concepts in daily life for payment,  multi  service
     options and co branding
5.   Tremendous  endeavors  of  smart  card  actors  to  market  their  products
     worldwide
6.   Evolution of stakes and  techniques in marketing,  bringing  about more and
     more customer relationship management issues


Three VocaliD(R) features

1.   Online multi access without card readers
2.   Security from any terminal
3.   Multi application through combined chip card based technologies


THE SMART CARD INDUSTRY

     At first mainly installed in pay telephones, smart cards are now being used
for mobile phones,  customer  loyalty  tracking,  payment,  transportation,  car
parking,  arcade games and vending  machines.  Any coin operated  machine can be
converted to a smart card format.  Other  applications  include automated teller
machines,  point-of-sale terminals, personal computers, electronic ticketing and
automatic  fare   collection.   Theoretically,   smart  cards  can  be  utilized
everywhere;  however,  one of the main problems of  traditional  off  line-based
smart card systems is the need for specific  readers,  which are  expensive  and
restrictive.  Therefore,  traditional  smart  card model  will  hardly  become a
standard in the e-commerce sector since that model would require every telephone
set and every computer to be fitted with card readers.

Smart Card History

     During the past 20 years,  smart  cards have  evolved  from a leading  edge
technology,  developed by a handful of industrial promoters  (historically based
in France),  to a mass market medium with worldwide  applications in such fields
as debit/credit  cards,  payment cards, mobile phones and security access cards.
The market has evolved from  straightforward  memory  applications to, where the
card stored basic data for a given application (typically pre-paid phone cards),
to truly interactive  application  devices where the microprocessor  carries the
"client" single application and -more and more so- multi applications.

                                        9

<PAGE>



Smart Card Market Trends

     With two thirds of the market,  Europe remains the main area for smart card
applications developments.


The  European  Microprocessor  smart card market by main  application  1998-2005
(units)

<TABLE>
<CAPTION>
Million units              2000     2001    2002     2003     2004     2004
                           ----     ----    ----     ----     ----     ----
<S>                       <C>      <C>     <C>      <C>      <C>       <C>
                           110      143     182      223       26       300
% growth                   277      296     273      223      191       132

Mobile phone               157      221     275      410      515
% growth                   336      402     249      487      257      132

Retail loyalty              16       17      21       34       42       50
% growth                   158       88     269      577      244       19

Pay TV& e-commerce          47       79     136      197      247      295
% growth                   979       67     722      447     25,5      194

Identification & access      7       13      20       37       45       52
% growth                  58,5       91     551     82,4      224      156

Health                      26       29      36       48       59       67
% growth                   6,5      136     253     31,2      238      135

Ticketing                   16       17      20       30       35       39
% growth                     7       81     176       50      167      114

Total                      379      518     691      977     1208     1386
% growth                   331       37     334      413      236      147
</TABLE>

         Source : IDC


     The Asia / Pacific smart card market is expected to grow rapidly during the
coming five years (+55% annual growth) to become by 2005 the second market,  not
far behind Europe;  enormous  volumes will occur,  specially in the mobile phone
sector

     The North American  smart card market is expected to grow more slowly,  due
to an already existing magstripe based  infrastructure,  and a high cost to face
in case of a shift to a new  infrastructure.  To justify this shift, smart cards
will have to integrate more than one service to make them really profitable.


                                       10

<PAGE>



         Smart card technology progressing towards IT markets

     Smart card technology is progressing towards a greater level of interaction
with  the  IT  industry,  due  to  the  booming  of B to C  and  B to B  network
infrastructures:  e-commerce,  Internet,  Intranets,  workgroups  etc. A rise in
smart card "online" use for mobile phones (+32% annual growth),  banking (+24% :
on/off  line),  pay TV and  electronic  commerce  (+51%) is  expected to sustain
growth of the industry over the next five years.

         A need for multi-application

     There  is  also  a  clear  demand  from  issuers  for  a  multi-application
development and operating platform allowing them to keep easier control on their
applications.  As far as contactless  smart cards are  concerned,  IDC considers
they will  become more and more  multi-application  cards and are likely to take
place in new markets (USA, Asia), where no existing contact infrastructure is in
place.

     The manufacturing cost of a traditional smart card varies from less than $1
to  approximately  $10 depending on the amount of information the card holds and
the complexity of the microchip or its operating system.  Similarly, the cost of
a reader  device can vary from $50 to $2,000,  depending on the  complexity  and
functionality of the terminal.

     Though  VocaliD  is a  smart  card  system,  the  true  market  size  to be
considered  for this  technology  must  mainly be based on the  number of people
purchasing or using online value added  services with  telephones and computers.
This is huge  compared  with the  traditional  smart  card  market  size  always
restricted by the deployment of smart card readers. For guidance, There were 250
million people using the Internet in the world last year, according to IDC; some
experts say they should be around 1 Billion within 2005.

VocaliD(R) is the fourth step in plastic card technology.

     Company analysis of the foregoing data indicates that VocaliD(R) smart card
technology  represents  the next step in the  evolution of  credit/debit/loyalty
instruments  and related  products and services.  VocaliD(R)  Smart card systems
differ from other  payment  mechanisms  in their ability to set up secure online
authentication  models without requiring  specific card readers.  Moreover,  the
philosophy of the system is the following: <<let the remote server carry out the
processing part>>.  This means that the card supplies the mobility and a part of
the  security  of the  system  while the server  supplies  the other part of the
latter and 100% of the applications. The sophisticated encryption algorithms and
other  security  mechanisms  that the chip employs  provide  secure  information
protection.  This  philosophy  matches with any remote  transaction  system that
requires security from anywhere the user stands.

     Historically,   magnetic   stripe   cards,   which   represent   the  first
technological step, were followed by chip cards, both of them working in contact
with the reader.  A new  interesting  recent family of chip cards is contactless
smart cards which are the third technological step. Those are slowly emerging in
specific  fields  like  transportation  where  the  card  does not need to be in
contact with the reader although the reader is still required.

     There  are two main  differences  between  magnetic  stripe  cards and chip
cards: The first type are not very secure (criminals duplicate  information from
the magnetic stripe of a credit or debit card

                                       11

<PAGE>



and use such clones for their own benefit) and work on-line. The second type are
really secure but mostly works  off-line.  What they have in common is that they
both require specific card readers ; therefore,  they cannot be used anytime nor
anywhere (at home for example).

     The  next  step in  plastic  card  evolution  is VICI  (Vibrating  Iso Card
Interface)  technology  providing  secure  e-commerce  features with an ISO card
without  card  readers.  The  latter is a chip  card  technology  that  combines
acoustic,  magnetic stripe and chip card features.  These combined  features are
patented by ELVA and VocaliD(R) is the first and still the only  VICI-based chip
card in the world.

     That is the solution for  reliable,  fast and  convenient  security for any
transaction  anytime and  anywhere.  The Company  believes  that  VocaliD(R)  is
already a standard in several  aspects:  it utilizes the ISO 7816 standard;  its
manufacturing is based on existing smart card processes and available equipment;
and its  marketing  medium is already  widely  used and  accepted by the general
public as well as user friendly.

     As a result of the Company's advanced authentication  protocol,  VocaliD(R)
enables higher value online services over the internet.

     The Company believes widespread acceptance and use of VocaliD(R) smart card
technology  will occur  following  the  transition  from  magnetic  stripe  only
infrastructure  to one that includes both  magnetic  stripe and audio  sequenced
smart cards which do not require new  readers.  This may be the most  acceptable
means to meet, on a worldwide scale, the eventual and unavoidable convergence of
traditional purchase in stores and secure electronic remote services.

     The Company  believes its technology  will open up new  opportunities  with
regard  to the way  people  interact  with  financial  institutions,  healthcare
providers,   retailers   and  others  by  enabling  an  individual  to  exchange
information and payment through the smart card VocaliD(R) microchip technology.

     The  Company  believes  it is  well  positioned  to take  advantage  of the
developing  VocaliD(R) smart card technology and utilization based upon a number
of  factors.  These  factors  include:(i)  our  engineering  know-how,  patents,
software tools and technical support,  (ii) our knowledge and under- standing of
the  technology  and  the  market,   (iii)  our   successful   development   and
implementation of our product,  (iv) our commitment to quality and innovation in
our product line,  and (v) our ability to create  applications  quickly in for a
rapidly changing industry.

COMPETITIVE ADVANTAGES

     The Company believes its exclusive acoustic interface to be unique in terms
of its  ability to be  universal  read.  When  traditional  smart  card  require
specific card readers,  VocaliD(R) requires none. Therefore,  VocaliD's economic
advantage is huge and brings about a paramount  advantage in the worldwide  race
for smart card deployment in the e-commerce sector.

     Other acoustic  authentication  devices  exist,  but none of them are smart
cards ; since  they are not ISO format  devices,  they are more  expensive  than
VocaliD(R) (whose manufacturing is based on the smart card process with standard
industrial equipment). Moreover, other acoustic authentication devices cannot be
used  in  magnetic  stripe  or chip  readers,  which  means  that  they  are not
universal.  The Company  believes that its VocaliD(R)  allows for the merging of
e-commerce with the real world in

                                       12

<PAGE>



terms of secure  authentication and global marketing while being cost effective,
widely available and usable at the same time.

     The Company  continues to have a significant  commitment to innovation  and
quality in the development of products.  A stringent set of standards is adhered
to by  the  Company.  These  standards  include  (i)  compatibility  with  other
operating  systems:  our engineers design our software products to be compatible
with all major  operating  SYSTEMS for the  various  system  architectures.  The
Company  believes  that  the  compatibility  of our  products  is key to  market
acceptance   and  will  provide  a  distinct   advantage;   (ii)  market  driven
enhancements and product offerings:  our product design and architecture provide
flexibility  and  adaptability to emerging  technologies;  and (iii) support for
industry standards:  our engineers follow strict adherence to industry standards
as  promulgated  by the  International  Standards  Organization.  We also follow
different  operating  SYSTEMS  standards  and  recommended  configurations  when
developing our products for those operating SYSTEMS.

BUSINESS STRATEGY

     The Company has two objectives that will be achieved in two phases:

     To develop VocaliD(R) until the technology reaches international leadership
and becomes a leading  provider of smart card  solutions  across a wide range of
applications in the field of secure transactions,

     To Enlarge the Company's expertise and position in the security sector with
new services and products meant for Internet and Telecommunications.

Phase 1 : 2001 / 2002 : Launching and positioning VocaliD technology

     Introduction  of VocaliD  smart  card on its  market : Sales and  marketing
strategy:

         North America, Europe, Asia.

Segmentation

         Banking / e-banking / Payment cards
         Retail (Clicks and Mortars) / Payment and loyalty
         Telecommunications (Phone cards, Access cards for voice services and
         call centers) Dot coms (Internet Service Providers, e-commerce web
         sites, portals and e-market places)

Sales Strategy

     Setting up of a  distribution  network  made up of value  added  resellers,
system integrators, software firms.

     Direct  marketing  targeting  end  users  like  banks,  retailers,  telcos,
Internet actors.




                                       13

<PAGE>



Communication

         PR
         Web Site Internet / online advertising campaigns
         Direct Marketing
         Exhibitions



VocaliD demo platforms through strategic partnerships

     Continuous enhancement of VocaliD technology

     Design  of a new chip and  development  of a related  software  environment
meant for VocaliD  smart cards  wider range of multi  application  capabilities,
with and without  card  readers.  Main  endeavors  are firstly  meant to address
payment card sector.

     Improvement  of  VocaliD  smart  card  manufacturing  process  in  order to
increase volumes and productivity

Phase 2 : From  late 2002  early  2003 :  Towards  VocaliD  standardization  and
enhancement of the Company's project

     Making VocaliD an International standard

Segmentation

     Same as phase 1 plus Healthcare,  Cities and government for transportation,
identity, theaters, festivals and so on.

Sales and industry

     Expansion of the VocaliD International distribution network

     Phasing in a  licensing  policy  meant to enlarge  the  VocaliD  industrial
infrastructure,  thus  providing  multisourcing  while  enhancing  the Company's
revenue model.

     VocaliD related specific  expertise (VocaliD design center) : Endeavors for
healthcare, transportation and strategic clients' demand.

     Development of specific VocaliD-based multi application software

     Design of new chips for multi application smart cards.



                                       14

<PAGE>



Expansion of Elva's territory

     Integration  of new  security and  software  skills,  products and services
through acquisitions

     Conception  and  development  of  new  technologies  in  the  Internet  and
telecommunication related security,  identification / authentication area. These
technologies will be based on smart card systems or not.

Other Strategic Business Issues

         ELVA's customers

         Design of secure components

         Semiconductor manufacturers like ATMEL are ELVA's clients for the
         design of secure components.

VocaliD smart cards

     In most  industry  sectors,  a company  who wants to improve  its  customer
relationships  needs to merge its  marketing  tools like the web site,  the call
center and other  phone  applications  or even  online  private  access  issues.
Moreover,  in the retail and banking  sectors,  these  electronic  tools must be
married to the real world  stores by the same  payment and loyalty  device.  The
Company  believes  that  VocaliD(R)  is the  solution,  due to its secure  multi
reading features.

     The  Company's  VocaliD(R)customers  are, on one hand,  strategic end users
like banks,  telcos and  retailers  and, on the other hand,  VocaliD(R)resellers
like  system  integrators.  As a matter of fact,  the latter will be Elva's main
customers  since the Company do not intend to compete with them by selling large
volumes of Vocalid smart cards directly to card issuers. End users must actually
be considered as marketing targets, not as regular customers.

Marketing

     The Company  believes that if it is able to attain  recognition  as a smart
card standard in such large  markets as  e-commerce,  home  banking,  retail and
telecommunications,  VocaliD(R)  volumes may reach hundreds of millions of cards
within the next four years. However, there is no assurance that the Company will
be able to attain industry  standard  recognition.  VocaliD's ability to combine
acoustic features with traditional  chip-based contact applications will however
ensure the Company a significant market share in the industry.

     Moreover,  the Company has chosen to offer VocaliD(R)  through the creation
of a worldwide distribution network. New market entries and strong relationships
will strategically  create the company's  technology  exposure to any geographic
region.  Such a network and partnership  policy is being establish at present by
the  Company  with smart card  manufacturers,  system  integrators  and  several
different vendors.


                                       15

<PAGE>



     Marketing campaigns targeting end users like banks,  retailers and Internet
firms are scheduled to begin in 2001.  Moreover,  a partnership program aimed at
cooperation  with  system  integrators  will soon be  issued.  ELVA's  marketing
structure,  strategy and actions were established in Europe during 1999 and 2000
and are now being extended to North America and Asia.

     Pilot tests in cooperation with end users and system integrators are in the
planning  stages.  The first  version of the online smart card as an  industrial
product is  anticipated to be tested by several market leaders before the end of
the third quarter [Q3] of 2001.

CURRENT AND FUTURE MARKETS FOR VocaliD(R)

     Considering  basic  functions of its technology,  the Company  believes the
following industries are best suited for VocaliD(R) smart card technology

     Firstly  our  marketing  efforts  will be limited to the  following  market
segments:

     Banking including "in the store" and "e"-payment, e-banking, e-trading

     The banking  sector is the second  largest  market for smart  cards,  after
mobile  phone;  it comes to 110M units today in Europe and should  triple within
five  years,   according   to  IDC.   In   addition  to  that,   some  rules  of
interoperability have been jointly defined by Europay,  MasterCard and Visa (EMV
standards) to accelerate the move of debit and credit cards from magnetic stripe
to chip technology, worldwide.

     For this reason, the next VocaliD chip generation will be both acoustic and
EMV compatible to become a standard  payment card in the store with card readers
and online, where it will allow secure payment (e-trading...) and access control
to bank account or other value-added remote personalized services.

     Retail  industry  including  private  payment  and loyalty in the store and
online

     Retailers  have been made acutely  aware of the value of their contact with
the consumer.  The key to repeat  business is to accurately  identify,  and then
satisfy,  customer needs. Smart cards are capable of enabling retailers to track
customer  behavior  and  base  marketing  decisions  mined  from  this  valuable
information.  This  technology  can  also  reduce  the  risk of  fraud,  improve
inventory  management  and offer the customer  convenience  and better  service.
Moreover,  major  retailers  have  extended the number of access points to their
products and services (phones, computers,  webphones...). Now they need a way to
keep secure contact with their customers anytime,  anywhere, and whatever access
device may be used.

     VocaliD  technology  allows  convergence  between  in the store and  online
transactions by providing a single card with both "contact"  (magstripe or chip)
and  acoustic  /  online  capabilities.  To sum up,  with  VocaliD(R),  affinity
programs can be highly improved by the  combination of e-commerce,  exchanges by
phone and traditional purchasing within a unique secure environment.


                                       16

<PAGE>



     e-commerce applications including access to value added information

     IT sectors are highly competitive with major differentiation features based
on prices (low prices or even free). Sooner or later,  telecom operators and dot
coms will have to enrich their  services and move to higher  value-added if they
want to remain (or become) profitable.

     VocaliD is a secure  solution  for  customization  and  value-added  online
services,  and also allows enlargement of e-commerce service  telecommunications
including value-added phone cards and call centers.

     Value  added  phone  cards  allow  access to voice  services in addition to
rechargeable calling card application. For any company, a Vocalid smart card can
be a  secure  access  device  to  call  center  in  order  to  improve  customer
relationship management.

     The  Company  believes  the  following  markets  will  be best  suited  for
VocaliD(R) smart card technology in a second step, scheduled by the end of 2002,
early 2003:

     Cities and governments for transportation, ID, entertainment applications.

     The  traditional  smart card approach  concerning  multi-application  cards
consists in developing more and more  sophisticated  chips, with enlarged memory
and processing  capacity.  But many questions remain unsolved,  among which: how
can we make upgrades / removals / extensions of the  applications  accessible to
every citizen (or even service provider) ?

     VocaliD philosophy mainly consists in having networks and servers resources
work rather than chips:  VocaliD smart card allows  distant  authentication  and
access to  applications,  that are  stored  on a remote  server  accessible  via
networks  (Internet,   Intranet...).  Thus  upgrading,  adding  or  removing  an
application  are  centralized  processes  that require no change on smart cards.
Once this online principle is combined with the storage of simple data and basic
applications  within a VocaliD chip,  multi-application  features  become nearly
unlimited.  This will allow to combine,  for example  healthcare related payment
with secure access to medical  files from any phone or computer,  transportation
and entertainment related ticketing with ID devices such as driver license. Many
things are possible for we can separate  information and applications  that must
be used with card  readers  (and will be stored  within the chip) from those who
will be used  online  from  computers  and phones  (and will be stored on remote
servers) : this is an exclusive VocaliD model.

Health Care Industry

     The Company  believes that the  healthcare  industry,  with its millions of
participants,  voluminous,  individualized  information and payment requirements
can benefit  significantly  from VocaliD smart card technology.  In an emergency
situation,   a  quick  assessment  of  vital   information  such  as  allergies,
prescriptions and immunizations is critical for effective  healthcare  delivery.
Secure access with a simple telephone could be required.  Additionally,  patient
cards  can  be  used  to  improve  and  streamline  administrative  and  billing
procedures as well as insurance reimbursement.


                                       17

<PAGE>



     Every insurance company,  HMO, PPO, hospital  association,  and independent
provider  association  which  serves the United  States  health  care market can
benefit from the use of a VocaliD smart card system.  Only authentication of the
patient and thus of its medical files allow an efficient  medical  intervention.
VocaliD(R) is the only ISO smart card enabling a universal secure authentication
of the patient anywhere anytime, be it by telephone, over the internet, at home,
on the street or at the hospital, in the card holder's country or abroad.

     The Company  believes  its  advantage in this market will be based upon its
position  as the first to provide a  universal  smart  card  reading  mode.  The
opportunity  to reduce  health  care  costs,  improve the quality of health care
services,  and  facilitate  the payments  process  through a more user  friendly
medium  makes the use of a  VocaliD(R)  smart card  system very  attractive  and
viable.


VocaliD market segmentation

<TABLE>
<CAPTION>
     BASIC FUNCTIONS                TRANSVERSAL STRATEGIC                    Market segmentation
                                          FUNCTIONS
------------------------  ------------------------------------------ ---------------------------------------------
<S>                       <C>                                        <C>
Access control            Security / Added value                     Banking
Payment                   CRM (Customer Relationship                 *     Payment / online & in the store
                          management)                                *     e-banking / transactions & access
                          Convergence online / in the shop           to bank account, services
                          (for clicks & mortar)
                                                                     IT / e-commerce
                                                                     *     Telcos
                                                                     *     Dot coms
                                                                     *     SPs, Internet portals

                                                                     Retail
                                                                     *     Private payment
                                                                     *     Access control / Loyalty


                                                                     Multi-application / Citizen related
                                                                     *     Healthcare
                                                                     *     Cities and governments

------------------------  ------------------------------------------ ---------------------------------------------
</TABLE>


LICENSE AGREEMENTS AND INTELLECTUAL  PROPERTY RIGHTS

     We regard our technology as proprietary  and accept to license our products
(hardware and software)  generally under written license agreements  executed by
licensees.



                                       18

<PAGE>



     We have  registered  several  patents  and  some  patent  applications  are
pending.

Patents : ELVA holds 4 French patents and has 2 patents applications (duration :
from the date of registration, 20 years) :

# 95 15735 on 1995, December 29th for "dispositif portatif d'acces a au moins un
service dispense par un serveur",  or portable device for access to at least one
service  provided by a server  Foreign  patent  applications  pending:  European
patent #96944094 0 (12/27/96)

96 01872 on 1996, February 15th for "procede pour faire autoriser par un serveur
l'acces  a  un  service  a  partir  de  dispositifs  portatifs  a  microcircuits
electroniques  de type carte a memoire par exemple",  or a method for enabling a
server to authorize access to a service from portable devices having  electronic
microcircuits, E.G devices of the smart card type:

Foreign patent applications pending:

Canada : #2,246,301                 (08/12/98)
Europe : #97905199 2                (02/13/97)
USA : #09/125,222                   (02/13/97)
Japan : #529050/97                  (08/13/98)

# 97 08939 on 1997,  July 15th for << procede et  systeme de  transmission  sous
forme  vocale  d'une  sequence de donnees  binaires a partir  d'un  transducteur
piezoelectrique  >>, or << method and system for voice  transmission of a binary
data sequence from a piezoelectric transducer >>

Foreign patent applications pending:

Canada : #2,297,259                 (01/11/00)
Europe : #98935089 7                (03/07/98)
USA : Pending                       (01/13/00)
Japan : #503509/2000                (01/17/00)

# 97 013902 on 1997,  November  5th for <<  procede  pour  emettre  des  signaux
acoustiques  a partir d'une carte a memoire ou a puce,  et carte pour la mise en
oeuvre du procede >>, or << method to emit  acoustic  signals from a smart card,
and card to implement this method >>

Foreign patent applications pending: PCT/FR98/02354 (11/04/98)

Canada : #2,308038                  (04/07/00)
Europe : #98954511 6                (04/07/00)
USA : # 09/530587                   (05/05/00)
Japan : # 2000-519539               (04/07/00)


French patent  application  # 99 09074 on 1999,  July 13th for - carte a memoire
pour  emettre  des  signaux  acoustiques  >>, or << smart card to emit  acoustic
signals -.

                                       19

<PAGE>




French  patent  application  # 00 08072 on 2000,  June 23rd for "  procede  pour
selectionner  un mode de  fonctionnement  d'une carte a puce...",  or "method to
select a operating mode of the smart card..."

     The Company also relies on a combination of copyright,  trademark and trade
secret  laws to protect  our  products.  We  require  employee  and  third-party
non-disclosure   and   confidentiality   agreements   as  well.   Despite  these
precautions,  it may be  possible  for  unauthorized  parties  to  copy  certain
portions of our products or reverse  engineer or obtain and use information that
we regard as proprietary.

Because  the   software   development   industry  is   characterized   by  rapid
technological change, we believe that factors, such as (i) the technological and
creative skills of our personnel, (ii) new product developments,  (iii) frequent
product   enhancements,   (iv)  name  recognition,   and  (v)  reliable  product
maintenance  are  important  to   establishing   and  maintaining  a  technology
leadership position and improve the various legal protections  available for our
technology.

COMPETITIVE ENVIRONMENT

     The market for the  Company's  products  and services is  characterized  by
rapidly  changing   technology,   evolving   industry   standards  and  frequent
introduction of new products and services.  The Company's success will partially
depend upon its ability to enhance its  existing  products  and  services and to
introduce new competitive products and services with features that meet changing
consumer requirements.  In addition,  there can be no assurance that services or
technologies  developed  by one or more of the  Company's  present or  potential
competitors  could not render  obsolete  both  present and future  products  and
services of the Company.

     There also can be no assurance that the Company's  services will receive or
maintain  substantial market acceptance.  Changes in customer  preferences could
adversely  affect  levels of market  acceptance  of the  Company's  products and
services and the Company's operating results.

     The market that the Company  operates in is  characterized  by  competition
from new entrants, as well as competition by established participants.  Although
the Company  believes  that it will be able to establish  and maintain a sizable
market niche, there can be no assurance that a competitor with greater financial
and human  resources  than the Company will not enter the Company's  market with
products and services similar or identical to those of the Company.

     The Company's ability to compete  successfully will depend in large part on
its ability to protect any  proprietary  technology it may develop.  The Company
currently has several  patents with respect to its product or service designs or
processes,  and will moreover  attempt to protect its technology by limiting the
people with knowledge of its  specifications to those with a need to know and by
having such persons execute  confidentiality  agreements.  The Company will also
rely, to the extent  possible,  on trade secret law to protect its  intellectual
property.  There can be no assurance,  however,  that any intellectual  property
protection or trade secret  protection will be sufficient to protect the Company
and its  business  from  others  seeking to copy or  appropriate  the  Company's
proprietary information.

                                       20

<PAGE>



     To establish,  maintain or increase the Company's  market share position in
the smart card industry, we will continually need to enhance our current product
offerings,  introduce  new product  features  and  enhancements,  and expand our
professional service capabilities. We currently compete principally on the basis
of the specialized nature of our technology and ability to expeditiously install
and implement a VocaliD(R) smart card system. Our product features and functions
facilitate  integration with a wide range of operating  systems and platforms to
insure product  quality,  ease of use and  reliability.  The Company believes it
competes favorably in all of these areas.

     Our  competitors  vary in size and in the scope and breadth of the products
and services  offered.  We may encounter  competition  from a number of sources,
including Sun MicroSystems, Inc., Bull, Gemplus, Innovatron, Proton, Avtivecard,
Oberthur Card Systems,  Philips Electronics,  Mondex,  Microsoft,  Schlumberger,
Siemens,  DigiCash,.  We  compete  against  numerous,  smaller,   privately-held
companies  with  fewer  resources  based on  breadth  of  product  features  and
functionality, as well as larger, publicly-held companies with greater resources
and having greater product and market diversification.

     Nevertheless,  most of those  competitors may become partners and/or ELVA's
licensees and then, they could as well be considered as ELVA's  leverages.  This
would be due to the high  potential  of  VocaliD(R)  that  might help smart card
industrialists to enter US market for instance (which they could not do so far),
thanks to an online/readerless positioning.

     Many of our current and  potential  competitors,  both  privately-held  and
publicly-held,  have greater  financial,  technical,  marketing and distribution
resources  than ours.  As a result,  they may be able to respond more quickly to
new or emerging technologies,  including and changes in customer requirements or
to  devote  greater  resources  to the  development  and  distribution  of their
products, maybe including VocaliD(R). In addition,  because there are relatively
low  barriers  to  entry  in the  software  marketplace,  we  expect  additional
competition from other established or emerging companies as the VocaliD(R) smart
card market  continues to expand.  Increased  competition is likely to result in
pricing pressures,  reduced gross margins and loss of market share, any of which
could materially adversely affect our business,  financial condition and results
of  operations.  We also expect that  competition  will  increase as a result of
software industry consolidations. There can be no assurance that we will be able
to  compete   successfully  against  current  and  future  competitors  or  that
competitive  pressures we encounter  will not  materially  adversely  affect our
business, financial condition and results of operations.

Dependence on Key Customers and Suppliers

     The Company is currently dependent upon a limited number of customers,  the
loss of whom would have an adverse material impact on operations.



                                       21

<PAGE>



Government Regulation

     The Company's  operations are subject to various  federal,  state and local
requirements  which  affect  businesses   generally,   such  as  taxes,   postal
regulations, labor laws, and environment and zoning regulations and ordinances.

     Although  certain  aspects of our services  may be subject to  Regulation E
promulgated by the Federal  Reserve Board,  we believe that most of our services
are not subject to Regulation E. Regulation E governs certain  electronic  funds
transfers  made by  regulated  financial  institutions  and  providers of access
devices and  electronic  fund transfer  systems.  Regulation E requires  written
receipt for transactions,  monthly statements,  pre-transaction  disclosures and
error resolution procedures.  There can be no assurance that the Federal Reserve
Board will not require  all of our  services  to comply  with  Regulation  E, or
revise  Regulation E, or adopt new rules and  regulations  for electronic  funds
transfers  that could result in an increase in our operating  costs,  reduce the
convenience and functionality of our services and products,  possibly  resulting
in reduced market  acceptance  which would have a material adverse effect on our
business, financial condition or operating results.

     We believe that current state and federal regulations concerning electronic
commerce  do not apply to our current  product  line.  However,  there is a move
towards  taxation  of  Internet  use by several  states  including  the State of
Washington.  There are some  strategic  plans  under  consideration  to  conduct
commerce  on the  Internet  using  our  core  technology.  We  have  an  ongoing
regulatory  compliance program  pertaining to transactions  utilizing smart card
technology and subscribe to industry watch  publications that address regulatory
issues.

Research and Development

     The Company  continues to make  investments in research and  development to
continue to  development  of our smart card  technology.  Currently  the dynamic
nature of the VocaliD(R)  smart card  technology  industry places large research
and  development  demands  on  businesses  that  desire to  remain  competitive.
Competing with larger firms with  substantially  greater capital  resources,  we
have devoted  significant  portions of available  resources to remain abreast of
industry  developments  and to offer  competitive  products and services.  As of
December  31,  2000,  our product  development  staff  consisted  of 6 employees
located in France.  Our total expenses for product  development,  deployment and
other  operating  expenses  during  1999  and  2000  were$459,340  and  $552,135
respectively.  We  anticipate  that  we  will  continue  to  commit  substantial
resources to product development in the future.

Reports to Security Holders

     The Company will send out audited  annual  reports to its  shareholders  if
required  by  applicable  law.  Until such time,  the  Company  does not foresee
sending out such reports.

     The  Company  will make  certain  filings  with the SEC as needed,  and any
filings the Company  makes to the SEC are  available and the public may read and
copy any materials the Company files with SEC at the SEC's Public Reference Room
at 450 Fifth Street, N.W. Washington, D.C. 20549. The

                                       22

<PAGE>



public may also obtain information on the operation of the Public Reference Room
by calling the SEC at  1-800-SEC-0330.  The SEC also  maintains an Internet site
that contains reports, proxy and information  statements,  and other information
regarding issuers that file electronically with the SEC at (http://www.sec.gov).

Item 2. Description of Property

     The  United  States  corporate  headquarters  of ELVA  are  located  at 222
Lakeview Ave., PMB 160-415,  West Palm Beach, FL 33480 and its telephone  number
is (949)  831-0504.  European and Asian  subsidiaries'  offices of Elva S.A, are
located at 74,av Edouard  Vaillant,  92100 Boulogne,  France,  telephone number:
33-(0)1-41-31-66-77  and Elva Asia Pte Ltd  located  at 7500 A Beach  Road,  The
Plaza #14-306/307, Singapore 199 591, telephone number: (65) 299-36-67.

Item 3. Legal Proceedings

     From time to time,  we may be  involved  in  litigation  relating to claims
arising out of our  operations in the normal course of business.  The Company is
not currently a party to any legal proceedings.

     In February 2002,  the Company's  Board of Directors  approved  issuance of
20,000 shares of its restricted common stock to Robert C. Pierre. Mr. Pierre had
asserted a claim for breach of an oral employment agreement. The Company settled
any such claim for the  20,000  shares  issued to Mr.  Pierre.  The shares  were
actually issued in March 2002. See Part III, Item 12. "Certain Relationships and
Related Transactions".

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

         None.


PART II

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

Market Information

<TABLE>
<S>                                <C>                 <C>
2002                               HIGH                 LOW
------                             --------            -----
March 31, 2002                      0.75                0.27
</TABLE>




                                       23

<PAGE>


<TABLE>
<S>                                <C>                 <C>
2001                               HIGH                 LOW
-------                            -------             -----
December  31, 2001                  1.45                0.22
September 30, 2001                  4.25                1.01
June 30, 2001                       1.75                0.36
March 31, 2001                      4.64                0.88

2000                               HIGH                 LOW
-------                            -------             -----
December  31, 2000                  2.00                0.94 * 2:1 Stock Split October 2, 2000
September 30, 2000                  3.00                1.50
June 30, 2000                       7.50                3.00
March 31, 2000                     11.00                1.75

1999                               HIGH                 LOW
-------                            -------             -----
December  31, 1999                  4.13                3.88
September 30, 1999                   N/A                 N/A
June 30, 1999                        N/A                 N/A
March 31, 1999                       N/A                 N/A
</TABLE>

     The  approximate  number of holders of record of common  equity is 83 as of
April 9, 2002.

Dividends

     The Company has never  declared  or paid any cash  dividends  on its common
stock and does not intend to declare any dividends in the foreseeable future.


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

12 Month Plan of Operations

     Certain  statements  contained in this annual  filing,  including,  without
limitation, statements containing the words "believes", "anticipates", "expects"
and words of  similar  import,  constitute  forward-  looking  statements.  Such
forward-looking  statements  involve known and unknown risks,  uncertainties and
other factors that may cause the actual results,  performance or achievements of
the Company,  or industry  results,  to be materially  different from any future
results,   performance   or   achievements   expressed   or   implied   by  such
forward-looking statements.

     Such factors include, among others, the following: international,  national
and local  general  economic and market  conditions:  demographic  changes;  the
ability of the Company to sustain, manage or forecast its growth; the ability of
the Company to successfully make and integrate acquisitions;  raw material costs
and availability; new product development and introduction;  existing government
regulations and changes in,

                                       24

<PAGE>



or the  failure  to comply  with,  government  regulations;  adverse  publicity;
competition;  the loss of significant  customers or suppliers;  fluctuations and
difficulty in forecasting  operating  results;  changes in business  strategy or
development  plans;  business  disruptions;  the  ability to attract  and retain
qualified  personnel;  the  ability to  protect  technology;  and other  factors
referenced in this and previous filings.

     Given these  uncertainties,  readers of this Form 10-KSB and  investors are
cautioned not to place undue reliance on such  forward-looking  statements.  The
Company  disclaims  any  obligation  to update any such  factors or to  publicly
announce the result of any  revisions to any of the  forward-looking  statements
contained herein to reflect future events or developments.

     The  Company's  plan of  operations  for the next  twelve (12) months is to
continually  refine its strategy for  capitalizing  on recent  trends within the
Smart Card  industry  and to exploit such trends to its  advantage.  The Company
plans to develop new and varied  VocaliD(R)  Smart Card  systems,  concepts  and
ventures. We will also further refine our current VocaliD(R) Smart Card Web site
to make it a more  complete  one stop  information  source to the  industry  and
future clients.

     The Company  believes it can  capitalize on the general  Internet  trend of
increasing  consumer  usage and  increasing  levels of  e-commerce  transactions
through  providing the market the  Company's  VocaliD(R)  Smart Card,  which the
Company  believes will increase  levels of  person-to-person  communication  and
which may directly increase levels of advertising and Web site linkage revenues.
The  Company   believes  that  it  is  well   positioned  to  profit  from  such
opportunities.

     The Company's  business  strategy is to develop its  VocaliD(R)  Smart Card
system to provide  consumers with versatile high quality,  easy to use, personal
and secure communications.  The Company believes the ease of use and versatility
of its online Smart Card system will differentiate itself among the array of off
line smart card options and that this differentiation  strategy will allow it to
carve out a profitable  market niche.  In addition to the primary revenue stream
derived from fees earned  through the usage of the  Company's  VocaliD(R)  Smart
Card, the Company  believes that its market niche will allow it to  successfully
gain consumer "hits" to its VocaliD(R)  Smart Card Web site. Such "hits" are the
major factor in  determining  advertising  revenue  over the  Internet  (through
banner ad sales) and may allow the  Company to  realize  an  additional  revenue
stream through charging  advertising  fees for banner ad placements.  Therefore,
while the Company plans to generate its primary revenue by charging fees for the
use of its  VocaliD(R)  Smart Card  system,  the  Company  believes  it may also
generate  significant  revenue by attracting interest ("hits") to its VocaliD(R)
Smart Card Web site.

     The Company plans to seek out strategic alliances,  joint venture partners,
and business partners with other high-technology firms in which shared resources
of  such  could  provide  enhanced  shareholder  value.  The  Company  plans  to
continually scan the environment for such partnering  opportunities.  Particular
attention  will  be  paid  to  the  possibilities  of  developing  international
corporate  strategic  alliances,  partnering  with  successful  U.S.  technology
start-ups, and finding merger and acquisition candidates or counter-parties with
firms operating in the U.S. and/or abroad.




                                       25

<PAGE>



Results of Operations -For the Twelve Months Ending December 31, 2001 & 2000

Financial Condition, Capital Resources and Liquidity

     For the  twelve  months  ending  December  31,  2001 and  2000 the  Company
recorded revenues of $400,493 and $394,296  respectively.  For the twelve months
ending  December  31,  2001 and 2000 the Company  had total  salary  expenses of
$370,266 and $378,237 respectively.

     For the twelve months ending  December 31, 2001 and 2000,  the Company had,
on a  consolidated  unaudited  basis,  general  and  administrative  expenses of
$813,473 and $631,489, respectively.

     For the twelve months ending December 31, 2001 and 2000, the Company had on
a  consolidated  unaudited  basis total  operating  expenses of  $1,949,603  and
$1,653,120.

Net Losses

     For the twelve  months  ending  December  31,  2001 and 2000,  the  Company
reported a net loss from operations including currency translation of $1,448,350
and $1,138,080 respectively.

     The ability of the Company to continue as a going concern is dependent upon
its ability to obtain clients who will utilize the Company's  VocaliD(R) product
and whether the Company can attract an adequate  number of clients.  The Company
believes  that in order to be able to expand its initial  operations in terms of
sales and marketing, it must establish new offices in USA and abroad, hire staff
and acquire through  purchase or lease computer and office equipment to maintain
accurate  financial  accounting  and client data. In this regard the Company has
established a new United States office in Danville,  California near the silicon
valley.  The  Company  is  already  registered  with the  Secretary  of State of
California  to do business  and is  anticipating  the  penetration  of the North
American market from its Californian office.

Employees

     ELVA intends to hire new persons in North America, Asia and Europe in order
to widen its marketing worldwide and to ensure the evolution of the technology

     At December 31, 2001, at ELVA had a total of 13 employees,  of which 4 were
employed in sales and marketing,  7 were employed in product  development  and 2
were employed in administration and finance.  Our future performance  depends in
significant part upon the continued  service of our key technical and management
personnel, and our continuing ability to attract and retain highly qualified and
motivated  personnel  in all  areas  of our  operations.  Competition  for  such
personnel is intense.  We provide no assurance that we can retain key managerial
and  technical  employees  or that we can  attract,  assimilate  or retain other
highly qualified personnel in the future. Our employees are not represented by a
labor  union.  We have not  experienced  any work  stoppages  and  consider  our
employee relations to be good.

     The Company  will  attempt to maintain  diversity  within its  customer and
advertising base in order to decrease its exposure to downturns or volatility in
any particular market segment. As part of this selection

                                       26

<PAGE>



strategy,  the  Company  intends to offer its  services to those  consumers  and
strategic   partners  which  have  a  reputation  for  reputable  dealings  and,
eliminating  customers and advertisers  that it believes present a higher credit
risk.  Where  feasible,  the Company will  evaluate  beforehand  each  customer,
supplier, partner, strategic partner, and advertiser for their creditworthiness.

     In May 2001,  the Company  entered into an agreement with Perrot to provide
the services of Lionel Rotcage as the  President,  Chief  Executive  Officer and
Director of the Company.  For such services,  Perrot received  646,500 shares of
the Company's restricted common stock. The term of the agreement is for a period
of four (4) years.  The Company has alleged a claim for return of all or part of
the shares issued as a result of this  transaction,  however the matter  remains
unresolved.  For such issuance,  the Company  relied upon the 506 Exemption.  No
state  exemption was necessary,  as Perrot is a Bahamian  corporation.  See Part
III, Item 12. "Certain Relationships and Related Transactions".

     In June 2001, the Company sold 125,000 post-split  restricted common shares
to Perrot for  $200,000.  For such  issuance,  the  Company  relied upon the 506
Exemption.   No  state  exemption  was  necessary,   as  Perrot  is  a  Bahamian
corporation.   See  Part  III,  Item  12.  "Certain  Relationships  and  Related
Transactions".

     In  August  2001,  the  Company  issued  90,000  and  45,000  shares of its
unrestricted common stock pursuant to a Registration Statement filed on Form S-8
on July 13, 2001 to Jill E. Brand and Donald F. Mintmire for services  rendered.
See Part III, Item 12. "Certain Relationships and Related Transactions".

     In August 2001,  pursuant to the Company's  Bylaws,  the Company's Board of
Directors  removed Lionel Rotcage as President and Chief  Executive  Officer and
Cedric Colnot as Vice-President of Technology.  Each resigned their positions as
directors of the Company.  Neither did so as a result of a disagreement with the
Registrant on any matter relating to the  Registrant's  operations,  policies or
practices and neither furnished the Registrant with a letter requesting that the
matter be disclosed.  See Part III, Item 12. "Certain  Relationships and Related
Transactions".

     In  September  2001,  Serge  Parienti  was  appointed  President  and Chief
Executive Officer.  He was already a member of the Company's Board of Directors.
See Part III, Item 12. "Certain Relationships and Related Transactions".

     In March 2002, Serge Parienti resigned as the Company's President and Chief
Executive Officer. He was subsequently appointed  Vice-President.  He remained a
member of the Company's  Board of Directors.  Also in March 2002, Eric Danon was
appointed  President  and Chief  Executive  Officer  by the  Company's  Board of
Directors  and was also  appointed  to the Board of  Directors to fill a vacancy
until the next meeting of the shareholders in which Directors were elected.  See
Part III, Item 12. "Certain Relationships and Related Transactions".

Research and Development Plans

     For the next twelve months there is a plan for funding  extensive  research
and development efforts. Our goal is to enhance the technology features in terms
of personalization and security. For that purpose,

                                       27

<PAGE>



the chip  capabilities  and the software  environment  will both be enlarged and
improved in order to supply a more  efficient  access to the technology for each
end user and for any application.

     Other  investments  related  to the  manufacturing  process  are also being
scheduled.  Therefore, the Company foresees significant changes in the number of
employees.

Item 7. Financial Statements




                          INDEX TO FINANCIAL STATEMENTS


Independent Auditor's Report. . . . . . . . . . . . . . . . . . . . . . . . .F-2

Consolidated Balance Sheets..................................................F-3

Consolidated Statements of Operations and Comprehensive Income (Loss)........F-4

Consolidated Statements of Stockholders' Equity (Deficiency).................F-5

Consolidated Statements of Cash Flows........................................F-6

Notes to Consolidated Financial Statements...................................F-7











<PAGE>



                          INDEPENDENT AUDITORS' REPORT



The Board of Directors and Stockholders
Elva International, Inc.
West Palm Beach, Florida

We  have  audited  the   accompanying   consolidated   balance  sheets  of  Elva
International,  Inc.,  (the  "Company")  as of December 31, 2001 and the related
consolidated   statements  of  operations  and   comprehensive   income  (loss),
stockholders' equity (deficiency) and cash flows for the year ended December 31,
2001. These  consolidated  financial  statements are the  responsibility  of the
Company's  management.  Our  responsibility  is to  express  an opinion on these
consolidated financial statements based on our audits.

We  conducted  our  audits  in  accordance  with  generally   accepted  auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable  assurance about whether the  consolidated  financial  statements are
free of material  misstatement.  An audit includes  examining,  on a test basis,
evidence  supporting the amounts and disclosures in the  consolidated  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 the Company as of
December 31, 2001 and the results of their  operations  and their cash flows for
the year  ended  December  31,  2001,  in  conformity  with  generally  accepted
accounting principles.

The accompanying  consolidated  financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in Note 4 to the
consolidated financial statements,  the Company has experienced net losses since
inception.   The  Company's  financial  position  and  operating  results  raise
substantial doubt about its ability to continue as a going concern. Management's
plans  with  regard  to  these  matters  are  also  described  in  Note  4.  The
consolidated  financial  statements  do not include any  adjustments  that might
result from the outcome of this uncertainty.



                                                /s/Durland & Company, CPAs, P.A.

                                                   Durland & Company, CPAs, P.A.

Palm Beach, Florida
March 15, 2002








                                       F-2

<PAGE>

<TABLE>
<CAPTION>
                            Elva International, Inc.
                           Consolidated Balance Sheets
                                  December 31,


                                                                                        2001                   2000
                                                                                --------------------- ----------------------
<S>                                                                             <C>                    <C>
                                          ASSETS
CURRENT ASSETS
  Cash and equivalents                                                          $              16,739 $              300,071
  Accounts receivable                                                                          78,698                 13,959
  VAT tax receivable                                                                           45,800                 54,998
   Inventory                                                                                   64,705                      0
                                                                                --------------------- ----------------------
          Total current assets                                                                205,942                369,028
                                                                                --------------------- ----------------------

PROPERTY AND EQUIPMENT
  Computers and equipment                                                                     145,241                 95,281

        Less accumulated depreciation                                                        (76,388)               (46,792)
                                                                                --------------------- ----------------------
          Net property and equipment                                                           68,853                 48,489
                                                                                --------------------- ----------------------

OTHER ASSETS
  Deposits and other assets                                                                    38,050                 20,330
  Income tax credit receivable                                                                189,136                209,141
  Patent                                                                                      421,782                420,110

        Less accumulated amortization                                                        (78,364)               (61,364)
                                                                                --------------------- ----------------------

          Net other assets                                                                    570,604                588,217
                                                                                --------------------- ----------------------
Total Assets                                                                    $             845,399 $            1,005,734
                                                                                ===================== ======================

                    LIABILITIES AND STOCKHOLDERS' EQUITY ( DEFICIENCY)
CURRENT LIABILITIES
   Accounts payable                                                             $             297,546 $              136,337
   Accrued Expenses
       Trade                                                                                   22,311                 61,541
       Payroll and taxes                                                                      205,249                149,232
       Deferred revenue                                                                        27,150                      0
   Current portion of long-term debt                                                            2,687                  2,837
   Advances from shareholders                                                                 169,331                 45,304
   Conditional government subsidy                                                              97,819                108,956
                                                                                --------------------- ----------------------
          Total current liabilities                                                           822,093                504,207
                                                                                --------------------- ----------------------

LONG-TERM DEBT
   Conditional government subsidy                                                             195,637                217,910
   Other long-term debt                                                                         2,687                  5,675
   Long-term debt - related party                                                                   0                      0
                                                                                --------------------- ----------------------
          Total long-term debt                                                                198,324                223,585
                                                                                --------------------- ----------------------
Total Liabilities                                                                           1,020,417                727,792
                                                                                --------------------- ----------------------
Minority interest in consolidated subsidiary                                                        0                      0
                                                                                --------------------- ----------------------

STOCKHOLDERS' EQUITY (DEFICIENCY)
   Preferred stock, $0.0001 par value, authorized 10,000,000 shares;
     none issued and outstanding                                                                    0                      0
   Common stock, $0.0001 par value, authorized 50,000,000 shares;
     9,606,222 and 54,020,000 issued and outstanding shares                                       961                  5,402
   Additional paid-in capital                                                               4,662,817              2,620,505
   Deferred compensation                                                                  (1,042,481)                      0
   Accumulated comprehensive income (loss)                                                     12,625               (27,801)
   Deficit                                                                                (3,808,940)            (2,320,164)
                                                                                --------------------- ----------------------
          Total stockholders' equity (deficiency)                                           (175,018)                277,942
                                                                                --------------------- ----------------------
Total Liabilities and Stockholders' Equity (Deficiency)                         $             845,399 $            1,005,734
                                                                                ===================== ======================
</TABLE>

     The accompanying notes are an integral part of the financial statements


                                       F-3

<PAGE>


<TABLE>
<CAPTION>
                            Elva International, Inc.
      Consolidated Statements of Operations and Comprehensive Income (Loss)
                             Year Ended December 31,


                                                                                 2001                      2000
                                                                        ----------------------    ----------------------
<S>                                                                     <C>                       <C>
REVENUES                                                                $              400,493    $              394,296
                                                                        ----------------------    ----------------------

OPERATING EXPENSES
    Salaries                                                                           370,266                   378,237
    Advertising                                                                         72,007                    51,138
    Depreciation and amortization                                                       53,853                    40,121
    General and administrative                                                         813,473                   631,489
    Research and development                                                           640,004                   552,135
                                                                        ----------------------    ----------------------

          Total operating expenses                                                   1,949,603                 1,653,120
                                                                        ----------------------    ----------------------

 Operating Loss                                                                    (1,549,110)               (1,258,824)
                                                                        ----------------------    ----------------------

OTHER INCOME (EXPENSE):
    Interest income                                                                      4,031                    11,322
    Interest expense                                                                  (16,056)                  (20,987)
    Foreign currency transaction gain (loss)                                           (3,334)                     2,089
    Gain (loss) on sale of property and equipment                                        (765)                         0
    Reserve for impairment of assets                                                  (12,107)                         0
                                                                        ----------------------    ----------------------

          Total other income (expense)                                                (28,231)                   (7,576)
                                                                        ----------------------    ----------------------

Net loss before tax credit and minority interest                                   (1,577,341)               (1,266,400)

    Foreign income tax credit                                                           88,565                   102,554
    Minority interest in consolidated subsidiary income (loss)                               0                         0
                                                                        ----------------------    ----------------------

Net loss                                                                           (1,488,776)               (1,163,846)

Other comprehensive income (loss):
    Foreign currency translation gain (loss)                                            40,426                    25,766
                                                                        ----------------------    ----------------------

Comprehensive loss                                                      $          (1,448,350)    $          (1,138,080)
                                                                        ======================    ======================

Net loss per common share                                               $             (0.22)      $             (0.02)
                                                                        ======================    ======================

Weighted average number of common shares outstanding                                 6,637,532                49,615,592
                                                                        ======================    ======================
</TABLE>








     The accompanying notes are an integral part of the financial statements


                                       F-4

<PAGE>



<TABLE>
<CAPTION>
                            Elva International, Inc.
          Consolidated Statements of Stockholders' Equity (Deficiency)



                                                                                                Accum.                    Total
                                                                   Add'l.                       Comp.                Stockholders'
                                      Number of       Common       Paid-in       Deferred      Income                    Equity
                                        Shares         Stock       Capital          Comp.        (Loss)   Deficit     (Deficiency)
                                      ------------  -----------   ------------  -----------  ---------  -----------   -------------
<S>                                   <C>           <C>           <C>           <C>          <C>        <C>           <C>
BEGINNING BALANCE,
December 31, 1998                       21,500,000  $     2,150   $    828,401  $         0  $ (52,349) $  (432,606)  $     345,596

Year ended December 31, 1999:
   Other comprehensive income (loss)             0            0              0            0     (1,176)           0          (1,176)
   Net loss                                      0            0              0            0          0     (723,712)       (723,712)
                                      ------------  -----------   ------------  -----------  ---------  -----------   -------------

BALANCE, December 31, 1999              21,500,000        2,150        828,401            0    (53,525)  (1,156,318)       (379,292)

Year ended December 31, 2000:
   Conversion of debt of
        subsidiary for stock             1,720,000          172        557,305            0          0            0         557,477
   Shares issued for cash                3,790,000          379      1,237,500            0          0            0       1,237,879
   Shares issued to effect 2 for
        1 forward split                 27,010,000        2,701         (2,701)           0          0            0               0
   Other comprehensive income (loss)             0            0              0            0     25,724            0          25,724
   Net loss                                      0            0              0            0          0   (1,163,846)     (1,163,846)
                                      ------------  -----------   ------------  -----------  ---------  -----------   -------------

BALANCE, December 31, 2000              54,020,000        5,402      2,620,505            0    (27,801)  (2,320,164)        277,942

Year ended December 31, 2001:
   1 for 10 reverse split              (48,618,000)      (4,862)         4,862            0          0            0               0
   Shares issued for cash                3,293,640          329        586,354            0          0            0         586,683
   144 shares issued for services          646,500           65      1,163,635   (1,163,700)         0            0               0
   S-8 shares issued for services          135,000           14        269,986            0          0            0         270,000
   Conversion of debt of subsidiary
        for stock                          129,082           13         17,475            0          0            0          17,488
   Deferred compensation amortization            0            0              0      121,219          0            0         121,219
   Other comprehensive income (loss)             0            0              0            0     40,426            0          40,426
   Net loss                                      0            0              0            0          0   (1,488,776)     (1,488,776)
                                      ------------  -----------   ------------  -----------  ---------  -----------   -------------

ENDING BALANCE, December 31, 2001        9,606,222  $       961   $  4,662,817  $(1,042,481) $  12,625  $(3,808,940)  $    (175,018)
                                      ============  ===========   ============  ===========  =========  ===========   =============
</TABLE>










     The accompanying notes are an integral part of the financial statements


                                       F-5

<PAGE>


<TABLE>
<CAPTION>
                            Elva International, Inc.
                      Consolidated Statements of Cash Flows
                             Year Ended December 31,


                                                                                        2001                     2000
                                                                                --------------------     ---------------------
<S>                                                                             <C>                      <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss                                                                        $         (1,488,776)    $          (1,163,846)
Adjustments to reconcile net loss to net cash used by operating activities:
     Minority interest in consolidated subsidiary income                                           0                         0
     Depreciation and amortization                                                            53,853                    40,121
     Common stock issued for services                                                        270,000                         0
     Amortization of deferred compensation                                                   121,219                         0
     Foreign exchange transaction gain (loss)                                                  3,334                         0
     Amortization of government subsidy                                                      (14,712)                        0
     Reserve for impairment of assets                                                         12,107                         0
Changes in operating assets and liabilities:
     (Increase) decrease in accounts receivable                                              (66,318)                   37,503
     (Increase) decrease in inventory                                                        (77,807)                        0
     (Increase) decrease in VAT receivable                                                     6,386                   (15,710)
     (Increase) decrease in deposits and other assets                                        (19,043)                   (5,368)
     (Increase) decrease in income tax credit receivable                                      88,565                  (104,572)
     Increase (decrease) in accounts payable                                                 161,345                    92,821
     Increase (decrease) accrued expense - trade                                             (36,656)                   28,914
     Increase (decrease) payroll and taxes                                                    64,775                    28,598
     Increase (decrease) in deferred revenue                                                  27,162                         0
                                                                                --------------------     ---------------------

Net cash  provided (used) by operating activities                                           (894,566)               (1,061,539)
                                                                                --------------------     ---------------------

CASH FLOW FROM INVESTING ACTIVITIES:
     Purchase of property and equipment                                                      (56,013)                  (28,313)
     Sales of property and equipment                                                             112                         0
     (Increase expenditure) application patent                                               (24,258)                 (128,773)
                                                                                --------------------     ---------------------

Net cash provided (used) by investing activities                                             (80,159)                 (157,086)
                                                                                --------------------     ---------------------

CASH FLOW FROM FINANCING ACTIVITIES:
     Shareholder advances                                                                    161,154                    44,067
                                                                                                                        ======
     Shareholder advance repayments                                                          (59,201)                        0
     Receipt of conditional government subsidy                                                     0                    61,278
     Proceeds of  long term debt - related party                                                   0                   189,402
     Debt payments                                                                            (2,728)                  (93,706)
     Issuance of common stock for cash                                                       586,683                 1,237,879
                                                                                --------------------     ---------------------

Net cash provided by financing activities                                                    685,908                 1,438,920
                                                                                --------------------     ---------------------

Effect of exchange rates on cash                                                               5,485                   (17,700)
                                                                                --------------------     ---------------------

Net increase (decrease) in cash and equivalents                                             (283,332)                  202,595

CASH and equivalents, beginning of period                                                    300,071                    97,476
                                                                                --------------------     ---------------------

CASH and equivalents, end of period                                             $             16,739     $             300,071
                                                                                ====================     =====================

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Interest paid in cash                                                           $             16,056     $              20,987
                                                                                ====================     =====================

Non-Cash Financing Activities:
  Common stock issued to settle long-term debt of subsidiary                    $             17,488     $             557,477
                                                                                ====================     =====================
</TABLE>



     The accompanying notes are an integral part of the financial statements


                                       F-6

<PAGE>



                            Elva International, Inc.
                   Notes to Consolidated Financial Statements


(1) Summary of Significant Accounting Principles
     The Company Elva, Inc., (the "Company"), is a Florida chartered corporation
     which  conducts  business  from its  offices in West Palm  Beach,  Florida,
     Paris,  France and Singapore.  The Company was  incorporated  on August 15,
     1997 as Computer Research Technologies, Inc., and changed its name to Elva,
     Inc. on January 25, 1999. Prior to the acquisition of ELVA, SA, the Company
     was  principally  seeking  financing  to  allow  it to  begin  its  planned
     operations.   The  Company  is  principally  involved  in  the  smart  card
     technology  industry through its French  subsidiary,  ELVA, SA. In November
     2000, the Company formed a wholly owned  subsidiary,  Elva Asia,  PTE, Ltd,
     under the laws of Singapore.  The following  summarize the more significant
     accounting and reporting policies and practices of the Company:

     a) Use of estimates In preparing  the  consolidated  financial  statements,
     management is required to make  estimates and  assumptions  that affect the
     reported amounts of assets and liabilities as of the date of the statements
     of financial condition,  and revenues and expenses for the year then ended.
     Actual results may differ significantly from those estimates.

     b) Significant  acquisition In December 1998, Elva, Inc. issued  14,160,000
     shares  of  common  stock  to  acquire  substantially  all the  issued  and
     outstanding  shares of the common stock of ELVA, SA, a French  corporation,
     in a reverse merger, which was accounted for as a recapitalization of ELVA,
     SA. There remains a four-tenths of one percent  minority  interest in ELVA,
     SA,  which is owned by two of the major  stockholders  of Elva,  Inc.  as a
     result of this acquisition. This minority interest is required under French
     corporate law. As a result of this reverse merger, the former  stockholders
     of ELVA, SA now control Elva, Inc. Prior to this reverse merger, Elva, Inc.
     had nominal assets and  liabilities.  Elva, Inc.  accounted for the reverse
     merger as an issuance of stock for the net  monetary  assets of Elva,  Inc.
     or, in this case, as a capitalization  of the accumulated  deficit of Elva,
     Inc. to the date of the merger.

     c)  Principles  of  consolidation  The  consolidated  financial  statements
     include  the  accounts of Elva,  Inc.  and its wholly  owned  subsidiaries.
     Inter-company balances and transactions have been eliminated.

     d) Net loss per common  share Basic net loss per  weighted  average  common
     share is computed by dividing the net loss by the weighted  average  number
     of common shares outstanding during the period.

     e) Property and  equipment  All property and equipment are recorded at cost
     and depreciated over their estimated useful lives,  using the straight-line
     method.  Upon  sale  or  retirement,  the  costs  and  related  accumulated
     depreciation  are  eliminated  from  their  respective  accounts,  and  the
     resulting  gain or loss is included in the results of  operations.  Repairs
     and  maintenance  charges  which do not  increase  the useful  lives of the
     assets are charged to  operations  as  incurred.  Depreciation  expense was
     $31,662  and  $19,648  for the  years  ended  December  31,  2001 and 2000,
     respectively.

     f) Cash and equivalents The company  considers  investments with an initial
     maturity of three months or less as cash equivalents.

     g) Patents The Company  acquired  two French  patents,  Nos.  95-15735  and
     96-01872, from the founders of ELVA, SA. The Company is amortizing the cost
     of these patents over the remaining life of the patents.  Patents in France
     have a 20 year life.  Amortization  expense was $22,191 and $20,473 for the
     years ended December 31, 2001and 2000 respectively.

     h) Revenue  recognition  The Company's sole source of revenue has been from
     licensing its patented technology.  The Company records revenue when earned
     under  its  licensing  agreement.   The  Company  intends  to  license  its
     technology  to  others  as well.  In  December  2001,  the  Company  signed
     contracts with  Schlumberger  Sema and with SAGEM,  S.A. to manufacture the
     VOCALID cards on a subcontract basis. The

                                       F-7

<PAGE>



                            Elva International, Inc.
                   Notes to Consolidated Financial Statements


(1) Summary of Significant Accounting Principles (Continued)
     h)  Revenue  recognition  (continued)  Company  believes  that it  would be
     prohibitively   expensive  for  it  to  establish  its  own   manufacturing
     facilities  and to do so would  distract it from its efforts at getting its
     technology accepted as the world standard.

     i) Foreign currency transaction and translation gains(losses) The principal
     operating  entity of the  Company is its  subsidiary,  ELVA,  SA,  which is
     located in France.  The  functional  currency of ELVA,  SA, as well as on a
     consolidated  basis,  is the  French  Franc,  (FF).  ELVA,  SA has only one
     customer which is located in the US. ELVA, SA bills this customer in FF and
     is paid in US Dollars,  (USD).  ELVA, SA records a transaction gain or loss
     at the time of receipt of payment  consisting of the difference between the
     amount of FF billed and the amount of FF the USD payment is converted into.
     On a consolidated basis the Company's  reporting currency is the US Dollar.
     The  Company  translated  the  income  statement  items  using the  average
     exchange  rate for the  period and  balance  sheet  items  using the end of
     period  exchange  rate,  except for equity items,  which are  translated at
     historical rates, in accordance with SFAS 52.

     j) Research & development  Research & development  expenses are expensed in
     the period incurred.

     k) Software development costs The software developed by the Company is used
     exclusively by licensors of the Company's technology.  As such, the Company
     is not selling the software. Costs incurred in developing the software have
     been expensed in the period in which incurred.

     l) VAT tax receivable In France, as in many other countries, the government
     charges a Value Added Tax, (VAT), that is similar in nature to sales tax in
     the US. There are three major differences.  First is that VAT is charged at
     each  point  of sale.  Second  is that  there  are no  exemptions  from the
     collection  of VAT.  Finally,  each  company  files a VAT  return  with the
     government  monthly reflecting the gross VAT collected and VAT paid. If the
     VAT paid is  greater  than the amount  collected,  the  Company  receives a
     refund from the government approximately five months later.

(2)  Stockholders'  Equity  The  Company  has  authorized  50,000,000  shares of
     $0.0001 par value common stock and  10,000,000  shares of $0.0001 par value
     preferred  stock.  Rights and  privileges of the preferred  stock are to be
     determined  by the Board of Directors  prior to  issuance.  The Company has
     21,500,000,  shares of common stock issued and  outstanding at December 31,
     2001and September 30, 1999.

     In September 1997, the Company issued  9,000,000  shares to its founder for
     services  rendered to the  Company  valued at $9,000.  In April  1998,  the
     Company completed a Regulation D Rule 504 Placement for 1,757,376 shares in
     exchange for $17,574  cash. In April 1998, a majority  shareholder  donated
     9,000,000  shares of common stock to the Company.  In June 1998,  9,000,000
     shares were issued for $32,500 in cash.  During the third  quarter of 1998,
     the Company issued 2,700,000 shares of common stock for $54,000 in cash. In
     December 1998,  9,557,376  shares were donated to the Company.  In December
     1998, the Company issued  14,160,000 shares for 26,326 of the 26,336 shares
     issued and outstanding of ELVA, SA, a French corporation.  Additionally, in
     conjunction with this acquisition, the Company issued 3,440,000 shares to a
     third party in  settlement  of a $204,550  loan the third party had made to
     ELVA,  SA. As the common stock of the Company was not listed at the date of
     acquisition, the fair value of the stock issued to settle this debt was not
     determinable and the Company elected to use the loan amount  outstanding to
     value this transaction.

     In July  2000,  the  Company  sold  3,490,000  shares of common  stock to a
     British  Virgin  Islands  investment  company in exchange for $1,139,893 in
     cash. In July 2000,  the Company sold 300,000  shares of common stock to an
     individual  in  exchange  for  $97,985 in cash.  In July 2000,  the Company
     agreed  to  exchange  1,720,000  shares of common  stock  for  $557,477  of
     existing  long-term debt. All three of these transactions were concluded at
     $0.3266  per share.  On October 5, 2000,  the  stockholders  of the Company
     voted to increase the number of

                                       F-8

<PAGE>



                            Elva International, Inc.
                   Notes to Consolidated Financial Statements


(2)  Stockholders'  Equity  (Continued)  authorized  shares of common stock from
     50,000,000 to 100,000,000  with no change in par value. In conjunction with
     the increase in the authorized shares, the Company issued 27,010,000 shares
     of common  stock to effect a two for one  forward  split of the then issued
     and outstanding shares.

     In June 2001, the Company  completed a 1 for 10 reverse split of its shares
     of common stock.  5,402,000  shares were issued and  outstanding  following
     this action.  In June 2001,  the Company sold 125,000  shares of restricted
     common stock to a company  controlled  by the new  President of the Company
     for $200,000 in cash, or $1.60 per share.

     In  June  2001,  the  new  President  of the  Company  was  issued  646,500
     restricted common shares as sole compensation for the four-year term of his
     employment  agreement.  These shares were valued at $1.80 per share, or 50%
     of the then  current  market price of the stock due to size of the block of
     shares,  the  current  lack  of  significant  trading  volume  and  the 144
     restriction  on the shares,  or a total of  $1,163,700.  The  Company  will
     amortize  this deferred  compensation  at a rate of $72,731 per quarter for
     the four-year term of the employment agreement. In August 2001, the Company
     issued 135,000 shares for services valued at $270,000, or $2.00 per share.

     In November 2001,  the Company  issued 129,082 shares of restricted  common
     stock to convert $17,488 of debt of ELVA, SA. In November and December, the
     Company issued 3,168,640 shares of restricted  common stock in exchange for
     $386,683 in cash

(3)  Income  Taxes  Deferred  income taxes  (benefits)  are provided for certain
     income and expenses which are  recognized in different  periods for tax and
     financial  reporting  purposes.  The Company had net operating  loss carry-
     forwards for income tax purposes of approximately $3,809,000,  which expire
     $68,000 on December  31, 2011,  $132,000 on December 31, 2117,  $232,000 on
     December 31, 2118,  $724,000 on December 31, 2119,  $1,164,000  on December
     31, 2020, and $1,488,800 on December 31, 2021.

     The amount recorded as a deferred tax asset,  cumulative as of December 31,
     2001and 2000 is approximately $1,524,000 and $928,000,  respectively, which
     represents  the  amount of tax  benefits  of the loss  carry-forwards.  The
     Company has  established a valuation  allowance for this deferred tax asset
     of $1,524,000, as the Company has no history of profitable operations.

     The significant  components net deferred tax asset as of December 31, 2001,
are:


Net operating losses              $     1,524,000
Valuation allowance                    (1,524,000)
                                  ---------------
Net deferred tax asset            $             0
                                  ===============

     The Company's  subsidiary,  ELVA, SA, applied for research and  development
     income tax credits with the French  government for the years ended December
     31, 2001, 2000, 1999 and 1998. The credits are applied for on the Company's
     annual income tax return in mid-1999,  2000 and 2001.  The amounts  applied
     for were approximately $88,600, $104,500,  $94,800, $15,300 and $94,400 for
     2001, 2000, 1999, 1998 and 1997, respectively.  In the 4th quarter of 1999,
     2000 and 2001,  ELVA,  SA was  notified  by the  French  government  of the
     approval of the application for 1997, 1998 and 1999, respectively, and that
     payment by the  government  would occur in late 2002 and 2003.  The Company
     sold the 1997  receivable to its bank on a non-recourse  basis, in exchange
     for cash in the amount of $94,400.  It is now expected that the  government
     will  approve  the 2000  and 2001  credits.  They are  expected  to be paid
     $94,800 in 2002 and  $88,600  in 2003.  The  Company  expects to sell these
     receivables  to its bank in March 2002 under the same terms and  conditions
     as the 1997 credit.  In 1996,  ELVA, SA entered its technology in an annual
     technology competition. This competition is administered by ANVAR, a French
     quasi-governmental  agency  established  to reward  technology  advances by
     French com-

                                       F-9

<PAGE>



                            Elva International, Inc.
                   Notes to Consolidated Financial Statements


(3)  Income Taxes  (Continued)  mercial  enterprises.  Elva  received one of the
     awards from ANVAR for its technology.  The Company  believes,  based on the
     foregoing,  that it is more likely than not that the Company  will  receive
     these ongoing tax credits from the French government.  These credits reduce
     the income tax benefit of its net  operating  loss  carry-forwards  for the
     French subsidiary on a one for one basis.

(4)  Going  Concern  As  shown  in  the  accompanying   consolidated   financial
     statements,  the  Company  incurred  net  losses  totaling  $1,488,800  and
     $1,164,000  for the years ended  December  31, 2001 and 2000,  and reflects
     stockholders'  deficit of  approximately  $175,000 as of December 31, 2001.
     These conditions raise  substantial  doubt as to the ability of the Company
     to continue as a going concern. The ability of the Company to continue as a
     going concern is dependent upon increasing  sales and obtaining  additional
     capital and financing.  The Company has retained a registered broker/dealer
     to raise  additional  funds for the Company in an amount up to  $5,000,000.
     The  financial  statements  do not  include any  adjustments  that might be
     necessary if the Company is unable to continue as a going concern.

(5) Related Party Transactions
     (a) Patents The Company  acquired  two French  patents,  Nos.  95-15735 and
     96-01872,  from the founders of ELVA,  SA for 21,069 shares of common stock
     of ELVA,  SA  valued  at  $320,700,  based on their  historical  cost,  and
     approximately  $3,333  per  month,  for the life of the  patents as royalty
     payments,  beginning in March 1997.  These ELVA, SA shares were part of the
     original issue shares of ELVA, SA, and accordingly had no fair market value
     at that time. After  approximately 8 months,  the principals  realized that
     the Company did not have the cash flow to continue to make the  payments to
     them and  continue  to develop the  marketing  efforts  and  suspended  the
     payments. In February 1999, the Company and the founders entered into a new
     agreement  which  called  for total  additional  payment  of  approximately
     $116,700,  with an initial payment of approximately  $25,000, and quarterly
     payments of approximately $11,500,  beginning on February 1, 2000. This new
     agreement also encompassed the international  patent application filed with
     the World  Organization of Intellectual  Property,  principally for the US,
     Canada,  Europe and Japan. It also encompasses the trademark "VOCALID," No.
     96-605347, registered at INPI in January 11, 1996.

     (b) Long-term debt In 1998, ELVA, SA received approximately $204,500 from a
     third party as a loan.  In December  1998,  as part of the reverse  merger,
     Elva,  Inc. issued  3,440,000  shares of common stock in settlement of this
     debt. In March,  May and September 1999, March and July 2000, ELVA received
     additional  traunches of this loan from the now related party, in the total
     amount of approximately $650,000. In July 2000, the Company entered into an
     agreement  with the holder of its related party  long-term debt to exchange
     1,720,000  shares of common stock for  $557,477 of the  existing  long-term
     debt, and paid off the remaining balance of approximately  $90,000 in cash.
     The Company  also  received a $16,000  conditional  loan from an  unrelated
     company,  under which the Company  would not be liable for repayment if the
     Company hired at least one former technical  employee of the other company.
     The Company  has not done so and is repaying  this loan at a rate of $3,000
     per year. The repayment schedule is per the original agreement.

(6)  Commitments  The  Company is  committed  under an  operating  lease for its
     office space. The Company is obligated under the lease for its office space
     for payments of $33,000 in 2002 and 2003, respectively. The Company can, at
     its option, elect to extend this lease for up to one additional  three-year
     period.   The  Company   leases  its  office   space  in   Singapore  on  a
     month-to-month  basis. The Company's rent expense was approximately $65,000
     and $55,500 for the years ended December 31, 2001 and 2000 respectively.

(7)  Concentration of Customers The Company's sole source of revenue to date has
     been one customer, a US based company. Accordingly, its revenue and related
     accounts receivable at all periods presented are all related to this single
     source. The Company is endeavoring to expand its customer base.



                                      F-10

<PAGE>



                            Elva International, Inc.
                   Notes to Consolidated Financial Statements


(8)  Patent License In 1997, the Company  entered into a  non-exclusive  license
     with a U.S.  company,  Atmel Corp.,  to license the Company's  patent.  The
     Company  received an initial  license fee of $100,000,  and will receive an
     additional  $50,000 fee once the 10  millionth  unit is delivered by Atmel.
     The Company also receives a royalty per total units sold:

<TABLE>
<CAPTION>
               Quantity                 First 1 mm      To 10 mm      To 100 mm     Over 100 mm
                                      --------------  ------------  -------------  -------------
<S>                                       <C>            <C>           <C>           <C>
Unit price less than $0.51                $0.02          $0.015        $0.01         $0.0005
Unit price greater than $0.50             $0.025         $0.02         $0.015        $0.01
</TABLE>

(9)  Conditional   Government   Subsidies  The  Company  has  received   several
     government grants which are conditional as to repayment.  The grants are to
     be applied as  reductions  of  salaries  and  employment  taxes paid to new
     employees.  They are  intended by the  government  to induce  increases  in
     employment,  as France has experienced high  unemployment over the last few
     years.  To date the Company has been  increasing  employment  and  applying
     accumulated  grants as offsets to salary  expense and at present is not yet
     obligated to repay any of these grants. The Company does not expect to have
     to repay any of the grant amounts.  These grants, if required to be repaid,
     do not require the payment of  interest.  The term for adding the  required
     employees  under these  grants is three  years.  The Company has  amortized
     approximately  $14,700 and $15,500 of the grants against salary expense for
     the years ending December 31, 2001 and 2000, respectively.


                                      F-11




<PAGE>


Item 8. Changes in and Disagreements with Accountants.

         None.

PART III

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

DIRECTORS AND EXECUTIVE OFFICERS

     The following table sets forth certain  information with respect to each of
our executive officers and directors. Our directors are generally elected at the
annual shareholders' meeting and hold office until the next annual shareholders'
meeting or until their successors are elected and qualified.  Executive officers
are elected by our board of directors  and serve at its  discretion.  Our bylaws
authorize the board of directors to be constituted of not less than one and such
number as our board of directors may  determine by  resolution or election.  Our
board of directors currently consists of three members.


NAME                 AGE         POSITION
-------------       ------       -----------------
Eric Danon            45         President, CEO and Director
Patrick Misko         42         Vice President of Finance and Director
Serge  Parienti       39         Vice president of Marketing and Director

     There are no family  relationships  between or among the executive officers
and directors of the Company.



                                       28

<PAGE>



Compliance with Section 16(a) of the Securities Exchange Act of 1934:

     Section 16(a) of the Securities Exchange Act of 1934, as amended,  requires
the Company's executive officers and directors and persons who own more than 10%
of a  registered  class of the  Company's  equity  securities,  to file with the
Securities and Exchange Commission (hereinafter referred to as the "Commission")
initial statements of beneficial ownership,  reports of changes in ownership and
annual  reports  concerning  their  ownership,  of Common Stock and other equity
securities of the Company on Forms 3, 4 and 5, respectively. Executive officers,
directors  and  greater  than  10%   shareholders  are  required  by  Commission
regulations to furnish the Company with copies of all Section 16(a) reports they
file. To the Company's knowledge, all executive officers,  directors and greater
than 10% beneficial  owners of its common Stock,  and have complied with Section
16(a) filing  requirements  applicable to them during the Company's  fiscal year
ended December 31,2001 up to the first quarter ended March 31, 2002.

Business Experience

Officers and Directors

     The  following is a brief  description  of the business  background  of our
executive officers, and directors:

Eric Danon:  Chairman & CEO (Elva, Inc.),  President - Director Geneneral (ELVA,
S.A.).

Graduate of the french Ecole Normale  Superieure de Saint Clud  (1077-1982),  he
holds a Masters  Degree in Physics ( Agregation  de sciences  physiques - 1980).
Graduate  of the  french  Instiut  d'Etudes  Politiques  (1981-1983)  and  Ecole
Nationale d'Administration (1984-1986)

Eric Danon began his career in the miistry of foreign affairs in 1986, in charge
of  economic  relations  between  France and North  America.  Then he joined the
cabinet of the minister of foreign affairs (1988-1991),  with the responsibility
of  politico-military  affairs. In 1991, he entered the Direction des Satellites
of Aerospatiale  SNO, and, a year later, the Direction de la Strategie.  Back to
the misitry of foreign affairs in 1997, he became head of the division in charge
i.a. of the fight against cybercrime, and in 1999, Directeur de Cabinet (Head of
staff) of the minister of  cooperation  and  development.  In 2001,  he left the
ministry,  created his own company and became a  consultant  in various  sectors
including high tech strategies and international cooperation.

Patrick  Misko:  Vice-President  of  Finance  for  ELVA  INTERNATIONAL,  INC.and
Director, and President of ELVA, SA

Graduate of  Accounting  and  Economy  Universities,  he managed a voice  server
company  for 3  years.  Then he  joined  Olivetti  as key  account  manager  for
computing and vocal products.His  previous function was Director of sales in the
computer  industry and in IVR  (interactive  vocal response) field. He knows the
market  of  vocal  identification  card as well as its  major  players,  such as
manufacturers, integrators and VAR's.


Serge Parienti:  Vice-President of marketing for ELVA  INTERNATIONAL,  INC., and
Managing Director of ELVA, SA

Graduate of a bio industry high school, he made a special study of industrial
marketing and communication. He has spent 8 years as a consultant in several
sectors among which: strategic, marketing and communication advisor in
telecommunications, information technologies, pharmaceutics and biotechnology
sectors. Just before joining ELVA, he was outstandingly involved in internet
related to projects.

Item 10. Executive Compensation

     At such time, it is expected  that the Board of Directors  will approve the
payment of salaries in a reasonable  amount to its officer for his services.  At
such time, the Board of Directors may, in its discretion, approve the payment of
additional cash or non-cash compensation for services to the Company.

                                       29

<PAGE>



     The Company does not provide  officers  with  pension,  stock  appreciation
rights, long-term incentive or other plans but has the intention of implementing
such plans in the future.

Compensation of Directors

     The Company has no standard  arrangements for compensating the directors of
the Company for their attendance at meetings of the Board of Directors.

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

Security Ownership of Certain Beneficial Owners

     The following  table  summarizes  certain  information  with respect to the
beneficial  ownership  of  company  shares as of April 9,  2002,  regarding  the
ownership of common stock by each shareholder known to be the owner of more than
5% of the  outstanding  shares,  each  director and all  executive  officers and
directors as a group.  Except as otherwise  indicated,  each of the shareholders
has sole voting and investment  power with respect to the shares of Common Stock
beneficially owned.

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------
                                                                         (1)                          (1)
Title of Class            Name and Address                      Amount and Nature                Percent of
                          of Beneficial Owner                   of Beneficial Owner                 Class
--------------------------------------------------------------------------------------------------------------
<S>                    <C>                                          <C>                            <C>
Common Stock           Patrick Misko(1)                                936,416                       9.7%
                       538 avenue de l'Hautil
                       78955 Carrieres sous Poissy, FRANCE

--------------------------------------------------------------------------------------------------------------
Common Stock           Serge Parienti(1)                               253,000                       2.6%
                       74, Avenue Edouard Vaillant
                       92100 BOULOGNE BILLANCOURT
                       FRANCE
--------------------------------------------------------------------------------------------------------------
Common Stock           Eric Danon(1)                                         0                         0%
                       74, Avenue Edouard Vaillant
                       92100 BOULOGNE BILLANCOURT
                       FRANCE
--------------------------------------------------------------------------------------------------------------
All Executive Officers, Directors                                    1,189,416                      12.4%
as a group
</TABLE>


                                                         30

<PAGE>


<TABLE>
<CAPTION>
Certain Beneficial Owners
--------------------------------------------------------------------------------------------------------------
                                                                         (1)                          (1)
Title of Class            Name and Address                      Amount and Nature                Percent of
                          of Beneficial Owner                   of Beneficial Owner                 Class
--------------------------------------------------------------------------------------------------------------
<S>                    <C>                                          <C>                            <C>
Common Stock           Olex Financial, Ltd.(1)                       1,769,000                     18.4%
                       VANDERPOOL PLAZA
                       ROAD TOWN
                       TORTOLA, FRANCE
-----------------------------------------------------------------------------------------------------------
Common Stock           Cedric Colnot                                 1,085,009                     11.3%
                       17 RUE JEAN-JACQUES ROUSSEAU
                       F-94200 IVRY SUR SEINE
                       FRANCE
-----------------------------------------------------------------------------------------------------------
Common Stock           Fatma Bennaceur(1)                              992,842                     10.3%
                       AL MASSALAH COMPLEX
                       BLOCK 7
                       RBNEID AL GAR
                       KUWAIT
-----------------------------------------------------------------------------------------------------------
Common Stock           Gerlach & Company                               708,000                      7.4%
                       20 EXCHANGE PLACE
                       NEW YORK, NY 10043
-----------------------------------------------------------------------------------------------------------
Common Stock           S C AL-DOSARI DAVID                             688,000                      7.1%
                       31 RUE BAYEN
                       75017 PARIS
                       FRANCE
-----------------------------------------------------------------------------------------------------------
Common Stock           Lionel Rotcage                                  646,500                      6.7%
                       ROMONA BAY CLUB
                       PO BOX ELH 27
                       HARBOUR ISLANDS
                       BAHAMAS

                                                                     5,889,351                    61.2%
</TABLE>

(1)  Based  upon  9,626,227  shares of the  Company's  common  stock  issued and
     outstanding as of April 9, 2002.

Item 12. Certain Relationships and Related Transactions

     In May 2001,  the Company  entered into an agreement  with Perrot,  Ltd., a
Bahamian corporation ("Perrot") to provide the services of Lionel Rotcage as the
President,  Chief  Executive  Officer  and  Director  of the  Company.  For such
services,  Perrot  received  646,500 shares of the Company's  restricted  common
stock.  The term of the agreement is for a period of four (4) years. The Company
has alleged a claim for

                                       31

<PAGE>



return of all or part of the  shares  issued  as a result  of this  transaction,
however the matter remains  unresolved.  For such  issuance,  the Company relied
upon the 506  Exemption.  No state  exemption  was  necessary,  as  Perrot  is a
Bahamian corporation.

     In June 2001, the Company sold 125,000 post-split  restricted common shares
to Perrot for  $200,000.  For such  issuance,  the  Company  relied upon the 506
Exemption.   No  state  exemption  was  necessary,   as  Perrot  is  a  Bahamian
corporation.

     In  August  2001,  the  Company  issued  90,000  and  45,000  shares of its
unrestricted common stock pursuant to a Registration Statement filed on Form S-8
on July 13, 2001 to Jill E. Brand and Donald F. Mintmire for services rendered.

     In August 2001,  pursuant to the Company's  Bylaws,  the Company's Board of
Directors  removed Lionel Rotcage as President and Chief  Executive  Officer and
Cedric Colnot as Vice-President of Technology.  Each resigned their positions as
directors of the Company.  Neither did so as a result of a disagreement with the
Registrant on any matter relating to the  Registrant's  operations,  policies or
practices and neither furnished the Registrant with a letter requesting that the
matter be disclosed.

     In  September  2001,  Serge  Parienti  was  appointed  President  and Chief
Executive Officer. He was already a member of the Company's Board of Directors.

     In November  2001,  the Company  sold  1,769,000  shares of its  restricted
common  stock to Olex  Financial,  Ltd. for  $136,228.  For such  offering,  the
Company relied upon the 506 Exemption.  No state exemption was necessary as Olex
Financial, Ltd. is a foreign entity.

     In November  2001,  the Company  issued  129,082  shares of its  restricted
common  stock  to Alain  Duffas  for  cancellation  of a debt in the  amount  of
$17,488. For such offering, the Company relied upon the 506 Exemption.  No state
exemption was necessary, as Mr. Duffas is a French resident.

     In February 2002,  the Company's  Board of Directors  approved  issuance of
20,000 shares of its restricted common stock to Robert C. Pierre. Mr. Pierre had
asserted a claim for breach of an oral employment agreement. The Company settled
any such claim for the  20,000  shares  issued to Mr.  Pierre.  The shares  were
actually issued in March 2002.

     In March 2002, Serge Parienti resigned as the Company's President and Chief
Executive Officer. He was subsequently appointed  Vice-President.  He remained a
member of the Company's  Board of Directors.  Also in March 2002, Eric Danon was
appointed  President  and Chief  Executive  Officer  by the  Company's  Board of
Directors  and was also  appointed  to the Board of  Directors to fill a vacancy
until the next meeting of the shareholders in which Directors were elected.


                                       32

<PAGE>


<TABLE>
<CAPTION>
Item 13.          Index to Exhibits
---------         -----------------------
<S>      <C>      <C>
3(i).1   [1]      Articles of Incorporation effective August 15, 1997.

3(i).2   [1]      Amended Articles of Incorporation filed January 29, 1999.

3(i).3   [2]      Amended Articles of Incorporation filed November 2000.

3(i).4   [2]      Amended Articles of Incorporation filed March 2001.

3(i).5    [2]     Articles of Association of ELVA ASIA PTE LTD effective October 30, 2000.

3(ii).1  [1]      Bylaws.

5.1      [3]      Opinion of Mintmire & Associates.

10.1     [1]      Letter of Intent between the Company and ELVA, SA. dated December 19, 1998.

10.2     [2]      Lease Agreement for California.

10.3     [2]      Lease Agreement for Asian office for ELVA ASIA PTE LTD.

10.4     [3]      Elva International, Inc. Year 2001 Employee/Consultant Stock Compensation Plan
                  (formerly Exhibit 10.1 and Exhibit 10.6).

10.5     [4]      Perrot, Ltd. Services Agreement dated May 1, 2001 (formerly filed as Exhibit 10.4).

10.6     [4]      Perrot, Ltd. Supplemental Agreement dated May 1, 2001 (formerly filed as Exhibit
                  10.5).

10.7     *        Non-Exclusive Manufacturing Agreement dated December 6, 2001 (in French).

23.1     [3]      Consent of Durland & Company, CPAs, P.A.

23.2     [3]      Consent of  Mintmire & Associates  (contained  in the  opinion  filed as Exhibit 5.1)
--------------------------------------------------
</TABLE>

[1]  Previously filed as an exhibit to the Company's  Registration  Statement on
     Form 10-SB January 27, 2000.
[2]  Previously  filed as an  exhibit  to the  Company's  Annual  Report on Form
     10-KSB filed April 16, 2001.
[3]  Previously filed as an exhibit to the Company's  Registration  Statement on
     Form S-8 July 13, 2001.
[4]      Previously filed as an exhibit to the Company's Quarterly Report on
         Form 10-QSB filed August 14, 2001.
*        Filed herewith

         (b)      No Reports on Form 8-K have been filed.

                                       33

<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.


                            Elva International, Inc.
                                  (Registrant)


Date:    April 12, 2002    /s/Eric Danon
                           ------------------------------------------------
                           Eric Danon, President, CEO & Director

                           /s/Serge Pariente
                           ------------------------------------------------
                           Serge Parienti, VP and Director

                           /s/Patrick Misko
                           ------------------------------------------------
                           Patrick Misko, VP and Director

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

Signature                                Title                      Date


By: /s/Eric Danon
    --------------------------     President, CEO & Director    April 12, 2002
      Eric Danon


By: /s/Serge Pariente
    --------------------------     VP & Director                April 12, 2002
      Serge Pariente


By: /s/Patrick Misko
    --------------------------     VP & Director                April 12, 2002
      Patrick Misko





                                       34