UNITED STATES
                   SECURITIES AND EXCHANGE COMMISSION
                         WASHINGTON, D.C.  20549

                               FORM 10-KSB

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

                For the fiscal year ended April 30, 2001

                       Commission File No. 0-29164

                     TRI-NATIONAL DEVELOPMENT CORP.
             (Name of Small Business Issuer in its charter)


           WYOMING                                   33-0741573
   (State of Incorporation)                          (I.R.S. ID)

                    480 CAMINO DEL RIO S., SUITE 140
                       SAN DIEGO, CALIFORNIA 92108
         (Address of registrant's principal executive officers)

                             (619) 718-6370
          (Registrant's telephone number, including area code)

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

       SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:

                  Common Stock, No Par Value Per Share
                            (Title of Class)



Indicate by check mark whether Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities and Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that
the Registrant was required to file such reports), and (2) has been subject
to such filing requirements for the past 90 days.   Yes X  No
                                                       ---   ---



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. [x]



As of April 30, 2001, 49,792,793 shares of the registrant's common stock
were outstanding.  The aggregate market value of the Registrants's free-
trading common stock, held by non-affiliates on August 14, 2001 was
approximately $2,600,000, based on the closing price of the stock on August
14, 2001.

<PAGE>
TRI-NATIONAL DEVELOPMENT CORP.

                               FORM 10-KSB
                FOR THE FISCAL YEAR ENDED APRIL 30, 2001

                            TABLE OF CONTENTS



                                                                     PAGE
                                                                     ----



                                 PART I

ITEM 1.        Business. . . . . . . . . . . . . . . . . . . . . . . .  3
ITEM 2.        Properties. . . . . . . . . . . . . . . . . . . . . . . 15
ITEM 3.        Legal Proceedings . . . . . . . . . . . . . . . . . . . 16
ITEM 4.        Submission of Matters to a Vote of Security Holders . . 16




                                 PART II

ITEM 5.        Market for Registrant's Common Stock and Related
               Stockholder Matters . . . . . . . . . . . . . . . . . . 17
ITEM 6.        Management's Discussion and Analysis of Results of
               Operations and Financial Condition. . . . . . . . . . . 20
ITEM 7.        Financial Statements and Supplementary Data . . . . . . 23
ITEM 8.        Changes in and Disagreements with Accountants on
               Accounting and Financial Disclosures. . . . . . . . . . 38



                                PART III

ITEM 9.        Directors and Executive Officers of the Registrant. . . 39
ITEM 10.       Executive Compensation. . . . . . . . . . . . . . . . . 42
ITEM 11.       Security Ownership of Certain Beneficial Owners and
               Management. . . . . . . . . . . . . . . . . . . . . . . 43
ITEM 12.       Certain Relationships and Related Transaction . . . . . 43



                                 PART IV

ITEM 13.       Exhibits and Reports on Form 8-K. . . . . . . . . . . . 44


Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44



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                                 PART I

ITEM 1.        BUSINESS

GENERAL

Tri-National Development Corp. is a multi-faceted international real estate
development, sales and management company.  The Company's development
efforts are focused in four major areas: residential development, resort
properties, commercial development and, indirectly through joint venture
agreements, senior and assisted living facilities.

The Company's projects include current and planned developments in Mexico
and the United States, with a primary focus on large scale, multi-use
projects in Northern Baja California, Mexico.  The Company started buying
property in 1991 some 50 miles south of the San Diego border, in a region
known as the "Gold Coast", the stretch of land in between Tijuana and
Ensenada.  Since that time, there has been an enormous amount of
development in the area, and the Company's property has seen dramatic
appreciation. Since then, the Company has significantly added to its real
estate holdings in this region through options and purchases of numerous
projects, utilizing its long standing relationships and reputation to
purchase quality properties at significant values.  This allows the Company
to become a major force in the ongoing development of this rapidly growing
region.

The Company is also actively pursuing, through various investments and
joint venture agreements, the development of senior and assisted living
facilities, primarily in the S.W. United States, to meet the growing need
for well-person care for aging baby boomers.  The Company sees significant
potential synergy between the Baja developments and the senior and assisted
living investments as the Company works with strategic partners to bring
U.S. quality medical care to Baja, thereby allowing the provision of senior
and assisted living facilities at a greatly reduced cost relative to
similar U.S. properties.

The Company was founded in 1988 by Michael Sunstein and became a publicly
traded Canadian corporation in 1989.  Since then, the Company has renounced
its original state of incorporation under the laws of the Province of
British Columbia, Canada and on February 24, 1997 applied for Certificate
of Registration and filed Articles of Continuation in the office of the
Secretary of State of Wyoming.  The Company is now incorporated under the
laws of the state of Wyoming in accordance with W.S. 17-16-1710 without any
break in corporate existence.  The Company is publicly traded on the NASDAQ
OTC BB under the symbol "TNAV" and under the symbol "TND" on the Hamburg
Stock Exchange and the Frankfurt Stock Exchange.  The Company maintains its
executive offices in San Diego, California at 480 Camino Del Rio S., Suite
140 and its telephone number is 619-718-6370.   As used herein, the term
"TND" or "Company" refers to Tri-National Development Corp. and its
subsidiaries, unless the context indicates otherwise.

BUSINESS STRATEGY

The Company remains tightly focused on its business strategy to maximize
shareholder value, which focuses on three priorities: growth, profitability
and liquidity through both domestic and international real estate
investments.  The Company has a long standing escrow to: (1) purchase and
expand Bajamar Ocean Front Hotel and Golf Resort ("Bajamar"), an existing
27-hole golf course with driving range and 81-room hotel located in Baja
California, Mexico, about 50 miles south of San Diego, California; (2)
construct and sell 328 ocean view timeshare units within Bajamar; (3)
purchase and develop the 2,500-acre Hills of Bajamar commercial,
residential and industrial project, located across the toll road from
Bajamar; (4) expand Plaza Rosarito, an existing 187,500 square foot
commercial shopping center and 15 acres of undeveloped ocean front land
zoned for a 450-room hotel and convention center, located in Rosarito
Beach, Baja California; (5) complete and expand Portal Del Mar, an existing
123-unit condominium development overlooking the Pacific Ocean; and (6)
develop and construct senior and assisted living facilities in the
Southwest U.S. and Mexico.

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The Company continues to explore opportunities to enter new markets and
plans to grow in its existing markets.  Growth in, both new and existing
markets, is expected to be supplemented by strategic acquisitions from time
to time.  The Company's business strategy could be materially affected by
various risk factors such as changes in general economic or political
conditions either nationally or in the regions in which the Company
operates or may commence operations, job growth and employment levels, home
mortgage interest rates or consumer confidence, among other things (See
"RISK FACTORS"). Nevertheless, the Company remains optimistic about its
ability to grow its business.

Land Acquisition and Development

Management believes that its business requires in-depth knowledge of local
markets in order to acquire land in desirable locations and on favorable
terms, to engage subcontractors, to plan communities keyed to local demand,
to anticipate customer tastes and price ranges in specific markets and to
assess the regulatory environment.

The development process generally consists of three phases: land
acquisition; land development and construction; and sale or lease.  The
development cycles vary depending on the extent of the government approvals
required, the size of the development, necessary site preparation, weather
conditions and marketing results.  When feasible, the Company acquires land
positions through the use of options.  In addition, the Company acquires
finished lots, condos and commercial building within its pricing
parameters, which reduces the development cycle and provides balance to its
real estate investment portfolio. In acquiring land, the Company considers
such factors as: current market conditions, with an emphasis on the prices
of comparable sales and leases, expected sales and lease rates, proximity
to metropolitan areas, population, industrial and commercial growth
patterns, estimated costs, customer preferences and environmental and
regulatory matters.  The Company employs standards for assessing all
proposed purchases based, in part, upon after tax cash flow and o7verall
return on investment. Consistent with these standards, the Company seeks to
minimize and defer all expenditures for purchases by utilizing options,
phasing land purchases and development, and relying upon non-recourse
seller financing or third party lenders.  In addition, the Company
emphasizes pre-sales in virtually all of its developments versus
speculative inventory.

The Company acts as the general contractor for its developments and hires
subcontractors for all production activities.  The use of subcontractors
enables the Company to reduce its investment in direct labor costs,
equipment and facilities.  The Company generally prices product only after
if has entered into contracts for the construction with subcontractors, an
approach which improves its ability to estimate costs accurately.

Sales

Sales by the Company are generally made pursuant to a standard sales
contract, which generally requires a customer deposit at the time of
execution and an additional payment upon mortgage approval.  Subject to
particular contract provisions, the Company generally permits customers to
cancel their obligations and obtain refunds of their deposits in the event
mortgage financing is unobtainable within a specified period of time.

Provided escrows can be closed on all of its current properties, Management
believes the Company's current supply of land is sufficient for its
reasonably anticipated needs over the next several years, and that it will
be able to acquire additional land on acceptable terms for future
developments absent great changes in current land acquisition market
conditions.

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<PAGE>
SAFE HARBOR STATEMENTS

Statements of the Company's or management's intentions, beliefs,
anticipations, expectations and similar expressions concerning future
events contained in this document constitute "forward looking statements"
as defined in the Private Securities Litigation Reform Act of 1995.  As
with any future event, there can be no assurance that the events described
in forward looking statements made in this report will occur or that the
results of future events will not vary materially from those described in
the forward looking statements made in this report.  Important factors that
could cause the Company's actual performance and operating results to
differ materially from the forward looking statements include, but are not
limited, changes in the general level of economic activity in the markets
served by the Company, competition in the real estate industry and other
industries where the Company markets its products and the introduction of
new products by competitors in those industries, delays in refining the
Company's construction and sales techniques, cost overruns on particular
projects, availability of capital sufficient to support the Company's level
of activity and the ability of the Company to implement its business
strategy.

THE PROPERTIES

CURRENT AND PLANNED DEVELOPMENTS IN MEXICO

Hills of Bajamar

The Hills of Bajamar property is a 2,500-acre parcel located in the
Municipality of Ensenada, on the Pacific Ocean side of Baja California,
Mexico, roughly 50 miles south of San Diego, California. The purchase
contract completed in 1992 through the Company's wholly-owned Mexican
subsidiary, Planificacion Desarollos de Jatay, S.A. de C.V.
("Planificacion"), provides for an overall purchase price of $6,000,000 for
the 2,500 acres ($2,400 per acre or $.60 per sq. meter).   The property is
being purchased on a gradual basis in 247-acre increments at $600,000
apiece.  In September 1998, the Company, in accordance with its contract,
had taken title to its second 247-acre parcel and in September 2000, in
accordance with its contract, the Company had taken title to its third 247-
acre parcel.  This last 247-acre parcel gives the Company title to a total
of approximately 750 acres with construction rights to all 2,500 acres and
places the unpaid balance of roughly 1,750 acres in trust with Banco Ixe.
Title to additional acres will be released to the Company as annual
payments are made to the seller. In the event the Company is unable to make
its scheduled annual payments, the Company maintains ownership of any the
property already paid for, while  the unpaid property in trust is subject
to cancellation and the property will be subject to refinancing under which
the Company may be required to pay a significantly higher price per acre.
Balance owing on the remaining 1,750 acres is $4,200,000 at $600,000
annually with no interest until 2003.

To date, the Company has contributed a total of $4,900,000 in cash and
stock toward this property and its development. Certified Mexican bank
appraisals completed in March of 1998 valued the property in excess of
$71,000 per acre. The purchase terms were negotiated in 1991 prior to four
events: (1) the passage of NAFTA; (2) the liberalization of foreign
ownership of land in Mexico; (3) the California Department of Real Estate
issuing a decree that the advertisement in California for sale of foreign
homes and land is no longer subject to their jurisdiction; and (4) the
mega-developments in the area (see below).

The Hills of Bajamar property is located in the region that has become
known as "the Gold Coast" because of the current and planned developments.
New developments in the region include: (1) access to U.S. title insurance;
(2) access to U.S. mortgage money; (3) a $200 million plan to privatize and
expand the port of Ensenada, which is well underway and is to include a 70
mile railroad link to the United States, Baja California's first container-
handling facility and a newly completed passenger cruise ship terminal; (4)
a $400 million power plant that will generate 440 megawatts, enough to
power one million homes, to be built in the Rosarito and Ensenada area; (5)
the legislation of casino gaming which would be a tremendous windfall for
the Mexican economy and the Baja California coast; (6) construction is
close to completion on Puerto Salina, a reported $150 million, 600-boat
marina that is located just one mile north of the Hills of Bajamar or 46
nautical miles south of San Diego; (7) Fox Studios has built a movie studio
located on a 150-acre site just north of the Hills of Bajamar with a
project cost in excess of $55 million for the filming of the movie, the

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Titanic.  There are many additional movies scheduled for filming at this
same studio.  Fox recently announced the addition of "Fox World", a $100
million theme park to the studio.

The Company's development focus is the creation of a large-scale world
class resort, also encompassing a residential and retirement complex on the
combined ultimate 4,000 acres of the Hills of Bajamar and the Bajamar Hotel
and Golf Resort.  The residential complex will include condominiums,
single-family housing, ranchettes and senior and assisted living, located
within a 1-hour drive from San Diego, California. The region caters
primarily to Southern California travelers already visiting Baja
California, and provides an alternative attraction to Palm Springs, Phoenix
and Las Vegas. Where these desert communities are only viable six months of
the year due to extreme heat in the summer, Baja California offers a year
round climate averaging 75 degrees Fahrenheit. Additionally, Baja
California offers the amenities available from its oceanfront location
including fishing, sailing, swimming, surfing, other water sports, and
oceanfront golf, a competitive advantage that desert communities cannot
provide.

The residential development is planned to be built around a medical campus
the Company plans to joint venture with International Health Networks, Inc.
on the southwest corner of the Hills of Bajamar property (see below).  The
medical campus will utilize the lower cost for support available in Mexico,
combined with the historic quality of medicine in the United States. The
medical campus will also provide services to the 2 million tourists
crossing the border each month, including the 500,000 people that cross for
work and business, and the 75,000 ex-patriots living in the region who
presently must rely on the Mexican health care system, which is designed
primarily for Mexican Nationals.

The roads and utilities to the Hills of Bajamar are to be completed by
Promar, S.A. de C.V. ("Promar"), a Mexican development company, pursuant to
a contract and in accordance with the master plan.  The Company has been
informed by Promar that the improvements to the property will be completed
by Bechtel Corp., a U.S. company, which also has been contracted by Promar
to build a new international airport 7 miles to the southeast of the
property.  The improvements are to be paid by Promar as an additional cost
to the airport.  This will significantly enhance the Hills of Bajamar,
while allowing Promar access to the airport from the main coast highway by
way of a toll road off ramp through a portion of the Hills of Bajamar.

Sales of Property at Hills of Bajamar

Vinas de Bajamar

The Company has completed the master plan for the first 1,250 acres known
as, Vinas de Bajamar, in conjunction with GMA International, a
world-renowned master planner, and Valcas Internacional, S.A. ("Valcas"),
the original builder of the Bajamar Ocean Front Hotel and Golf Resort and
several other resort, commercial and residential properties throughout
Mexico.

The zoning has been approved and a construction company has been retained
by Valcas to start cutting the roads in accordance with the master plan.
This allowed the Company to launch a 1,250 residential lot sales program in
August of 2000. During the year end April 30, 2001, the Company sold
approximately 50 lots at an average price of $30,000 each. The Company is
selling the lots starting at $20,000 each with 10% down and zero interest
financing for 8 years. Upon full sell out of the 1,250 residential lots,
the projected gross revenues would exceed $35 million with total down
payments of $3.5 million and annual mortgage payments of roughly $4
million.  Also included in the overall master plan is the development of an
18-hole golf course, 100-room hotel and roughly 250 acres for commercial
use, including a planned medical campus (see below).  Stewart Title of
Houston, Texas is doing all of the title work for this property.

Medical Campus

International Health Networks ("IHN"), a Nevada corporation, is headed up
by three prominent physicians, all of whom are also shareholders of the
Company, including Dr. Jerry Parker, who is a director and officer of the
Company.  IHN is a multitude of U.S. medical services designed for Mexico
that the Company has envisioned for the past several years as the magnet
for attracting the retiree market to Baja California, Mexico.

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The primary focus for IHN is a planned medical campus, to be built on Hills
of Bajamar property.  The medical campus was originally outlined by IHN in
1997 in an agreement that called for 150 acres at the south end of the
property at a price of $25,000 per acre with an option for an additional
100 acres at $60,000 per acre for 3 years. The Company retained the
construction rights to build all required facilities on the combined 250
acres and maintain a property management contract. The campus is to include
an acute care hospital associated with an recognized U.S. medical provider,
a medical school complete with dormitories, class rooms and auditorium,
medical exhibition center, R & D facilities for pharmaceutical industry and
facilities for long-term care combined with anti-aging and wellness
programs. This campus is important not only to the region, but to the
Company's desire to create a retirement mecca on its properties.  The
original contract is being revised at this date.

In May of 1999, the Company received the approvals from the Mexican
government for the development of a medical school and a four-year
university. The Company had originally planned to build this facility on
its Hills of Bajamar property, however it has redesigned it's concept plans
to build the school on the north end of Bajamar, upon closing of escrow if
that can occur in the near future.

NetRom, Inc.

In February of 1998, the Company sold 50 acres of its Hills of Bajamar
property to Netrom, Inc. (OTC BB:NRMM) of San Diego, California for $60,000
per acre for 1 million shares of NetRom's Convertible Preferred Stock, at
a value of $3.00 per share, plus a construction and multi-year management
contract (See "NOTES TO THE FINANCIAL STATEMENTS").  NetRom, Inc., a
developer of action sports CD-Rom and interactive internet programming, had
originally  intended to develop the site as a post-production multimedia
studio, with additional rights to use the site for Action Sports events.
NetRom is currently revising its corporate plans and is discussing revising
this acquisition.

Viper Networks, Inc. (formerly Taig Ventures, Inc.)

In June of 1998, the Company sold 50 acres of its Hills of Bajamar property
to Viper Networks, Inc. ("Viper"), a Utah corporation, for $60,000 per acre
for 3,000,000 shares of Viper's Convertible Preferred Stock, at a value of
$1.00 per share, plus a construction and multi-year management contract.
Viper, a telecommunications company, is based in San Diego, California.
The purpose of the acquisition by Viper was to develop infrastructure on
the site to offer local and long distance telephone service and internet
access to Baja California.  A communications facility in this region
follows on the privatization of Mexico's telecommunication services and a
proposed border-free telecommunications zone between San Diego and Tijuana
by the San Diego based International Communications Council.

Plazas Resort and Commercial Property

Plazas Resort and Commercial Property, is a planned 326-unit vacation
ownership (timeshare) complex and 26,000 square feet of commercial space,
already under construction, that will encompass 14+ acres located on the
golf course and facing the Pacific Ocean, within the Bajamar resort. While
we have been waiting for the June 1996 escrow to close on the Bajamar
Resort (see below), work has continued on the plans for the structures, as
well as, all of the marketing materials.  The Company anticipates there
will be great demand, since there is no real competition in the region,
certainly not on a golf course and on the ocean only 50 miles from San
Diego, California. To date, the Company has contributed in excess of
$5,200,000 in cash and stock toward the Plazas Resort.

Bajamar Ocean Front Hotel and Golf Resort

Bajamar Ocean Front Resort located in Baja California, Mexico on the
Pacific Ocean roughly 50 miles south of the San Diego border is the subject
of a June 1996 escrow established with Stewart Title Company of Houston,
Texas. The escrow was opened with Desarrollos Urbanos Baja California,
S.A., which is 1/2 owned by Grupo Situr, S.A., once the largest Mexican
resort development-company in Mexico. Subsequent to the opening of the
escrow, Grupo Situr's financial problems grew into a national issue and the
Mexican government

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became involved with several banks involved with Grupo Situr in an attempt
to work out the overall issues. The property at Bajamar, which is the
subject of our contract, is only a small fraction of the Grupo Situr
holdings.  However, all contracts and sales were put on hold until a
complete workout plan was effected with the banks. Consequently, the
Company has retained its escrow position and is patiently waiting for the
resolve.

The escrow includes the existing 27 holes of golf, the existing 81-room
hotel, the clubhouse, tennis courts, land and plans for an additional 102-
room hotel with conference center, land and plans for an additional 9 holes
of golf and approximately 300 acres of developed land for residential
housing adjacent to the golf courses. The closing of this escrow is also
important to the timeshare and/or fractional ownership program that is
located on land separate from this escrow (see above), however, located
within the Bajamar resort.  The timeshare and/or fractional ownership
program will benefit from a relationship with the adjacent golf courses and
hotel.  The Company had previously delayed the start of these programs in
anticipation of its escrow closing and thereby guaranteeing the
availability of these amenities.

Portal Del Mar

In February of 1999, the Company, through a Mexican subsidiary, signed
purchase agreements and provided the $500,000 down payment to acquire
Portal Del Mar for $1,250,000.  Portal Del Mar is a 123-unit, 2 and 3-
bedroom condominium development on 6 acres overlooking the Pacific Ocean in
Baja California, Mexico, just south of Rosarito Beach. The 126 ocean view
condominiums are in various stages of completion, with approximately 46
completed. The Company recently received a financing commitment for $7.5
million to complete the remaining 80 units, add a clubhouse, 3 tennis
courts, 2 pools and a spa with beach access and palapas.  Each condo
completed is intended to include an oversize terrace with ocean views.
Comparable condominiums located across the road are selling in the $250,000
range.  The Company arranged financing for the remaining $750,000 of
acquisition cost and closed escrow on this property in June of 1999 and
intends to initially operate this property as a hotel and eventually begin
timeshare sales in late 2001.  In March of 2001, the lender that provided
the remaining $750,000 to close escrow, converted their loan to a 33 1/3%
equity position in the project.

The Company expects to start timeshare sales at $5,000 per week with a
$1,500 down payment and the balance at 12% over 7 years.  Upon full sell
out of the 6,222 weeks at an average price of $5,000, the projected gross
revenues would exceed $31 million with down payments of $9 million and
annual mortgage payments of approximately $2.5 million.

Plaza Rosarito

On November 20, 1998, Tri-National Holdings, S.A. de C.V., a Mexican
subsidiary, purchased the Plaza San Fernando from Banco Bital with a $1
million cash down payment.  In July of 1999, Capital Trust Inc. of New York
provided the remaining $8 million necessary to close and complete the
escrow.  In March of 2001, the Company received a 60-day forbearance from
Capital Trust, Inc. for the repayment of the $8 million and has
subsequently defaulted (See "LEGAL PROCEEDINGS").  Plaza San Fernando's
appraised value is in excess of $33 million.  Fonatur, the tourism arm of
the Mexican government, has approved a $38 million loan for the
construction of a hotel and convention center on a portion of the property.
The Company intends to joint venture this component with a major U.S. hotel
operator.

The Company has renamed this property, Plaza Rosarito.  It is located in
the heart of Rosarito Beach in Baja California, Mexico, minutes from the
20th Century fox film studio where "Titanic" was filmed and down the street
from the famous Rosarito Beach Hotel.  Plaza Rosarito includes 15 acres of
undeveloped oceanfront land zoned for the 450-room hotel and convention
center, 18 acres of developed land, including 187,500 square feet of
existing steel, concrete and marble commercial space, 42 developed
residential lots and a 80% complete 36-unit condominium complex.  The
Company plans to sell the 30 condominiums at $100,000 each with a 20% down
payment and the balance at 11% over 10 years.  The Company's initial plans
are to sell the 42 residential lots at approximately $30,000 each with a
20% down payment and the balance at 11% over 10 years.  The Company has
initial plans and will start to execute multi-year, triple- net leases from
established preliminary commitments for approximately 100,000 square feet
of the existing commercial

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property at up to $2.00 per square foot per month from U.S. and Mexican
retail operations, consistent with comparable lease rates in the area,
which upon full lease up should generate in excess of $4 million annually
and become one of the most significant shopping centers in Baja California.
The Company has already pre-leased roughly 60% of the 187,500 square foot
shopping center.  Additionally, the Company received approval to sell the
commercial space as condominiums at up to $200 per square foot, with a 30%
down payment and the balance at 14% over 5 years.  This allows the Company
an additional exit vehicle if desired and an alternative to leasing.  The
down payments would be deposited into an escrow account, until the Company
completes approximately $1,500,000 in improvements, of which approximately
$800,000 has already been completed.  Upon full sell out, the projected
gross revenues generated from the property could be in excess of $35
million, with down payments over $11 million and annual mortgage payments
of roughly $5 million.

El Mirador

During the year end April 30, 2001, the Company opened escrow to acquire a
20,000 square foot commercial building situated a 6-acre parcel on a bluff
1,000 feet above sea level overlooking the Pacific Ocean with some of the
most dramatic views in Baja California, for a total purchase price of
$450,000.  Mirador is located directly south of the Bajamar Ocean Front
Hotel and Golf Resort and adjacent to the south rim of the Company's Hills
of Bajamar property.  The Company plans to utilize the commercial space as
a sales office for the Vinas de Bajamar residential lots, with long-term
plans to develop a 100-room hotel.

CURRENT AND PLANNED DEVELOPMENTS IN THE U.S.

Senior Independent and Assisted Living and Alzheimer's Care

Alpine Gardens East, Inc. ("AGE") is a Nevada corporation created to
acquire and develop senior and assisted living facilities primarily in the
S.W. United States. In January of 1998, the Company acquired 51% of this
corporation for a combination of cash and Class B Series B preferred stock.
AGE facilities are expected to combine housing, minimum health care and
personal support for elderly residents who need assistance with certain
activities of daily living, without the need of a complete nursing
facility.

Youngtown Gardens

In June of 1998, AGE closed on a 5.5 acre developed parcel to build its
first independent and assisted living project, known as Youngtown Gardens,
in Youngtown, Arizona, just north of Phoenix and adjacent to Sun City.  In
July of 1999, a formal ground breaking took place with the Mayor of
Youngtown and the Company for the recently finished construction on two
models. The project was completed with a $10,500,000 construction loan from
Vestin Mortgage (formerly Del Mar Mortgage).  This facility includes 40
two-bedroom units, 50 one-bedroom units and 36 units reserved for Alzheimer
and Dementia residents.

To reduce its liability during the fourth quarter ending April 30, 2001,
the Company successfully completed an assignment of the $10,500,000
construction loan to its minority partner in this project in exchange for
a reduced participation of 20% of the future profits.  The total retail
value of this project is in excess of $20,000,000.

Temecula Gardens

In November of 1999, the Company, through a joint venture agreement, closed
and completed escrow to acquire a fully-zoned 22-acre parcel of real
property with plans, located in Temecula, California for $4,300,000 for a
combination of cash and notes.  During the fourth quarter ending April 30,
2001, the joint venture filed for Chapter 11 Reorganization to receive the
time required to close on the necessary financing to pay off the bridge
loan of $2,900,000 and provide the construction financing.  The joint
venture plans to develop a fully-inclusive senior community that will offer
medical facilities, Alzheimer's and dementia care, independent and assisted
living and senior single family housing.  The joint venture has named this
project, The Arbors at Temecula, and plans to start construction in late-
2001.

                                    9
<PAGE>
Through AGE, the Company is in negotiations on five additional sites in its
primary market area of California, Nevada and Arizona.  There is no
assurance that any ongoing negotiations will result in future real estate
acquisitions or developments by AGE or the Company.

Tri-National Mortgage Company

The Company has formed a wholly-owned subsidiary with the anticipation that
it can arrange financing for prospective customers to facilitate sales of
residential lots, condominiums, single family homes and timeshare sales.
Management believes that the ability to offer customers financing on firm,
competitive terms as a part of the sales process is an important factor in
completing sales.  Not only could this facilitate sales, but the mortgages
could earn income while enhancing the balance sheet.  The principal sources
of income for this subsidiary are: (1) interest income earned on mortgage
loans (2) net gains from the sale of loans, if sold and (3) loan servicing
fees.

SUBSEQUENT EVENTS

On March 28, 2001, Tri-National Development Corp. (the "Company") entered
into agreements with Senior Care Industries, Inc., a publicly-listed Nevada
corporation ("Senior Care"), to sell certain real estate assets of the
Company for a combination of cash, assumed debt and convertible preferred
stock for a total of approximately $70,229,055. The purchase offer became
effective and escrow was to close on April 30, 2001.  Closing was subject
to a cash down payment at closing of $10,000,000, of which a $8,000,000
payment was to be made to Capital Trust, Inc. of New York for the repayment
of the loan made on the Company's Plaza Rosarito in July of 1999.

When Senior Care was unable to make the scheduled $10,000,000 cash down
payment, the Company on May 5, 2001 agreed, at the request of Senior Care,
to revise the agreements to state that the amount of cash consideration as
part of the overall purchase of the various assets would be dictated by
whatever terms and conditions Senior Care could negotiate with Capital
Trust's approval to payoff the $8,000,000 loan and additional obtain Tri-
National's parent company and subsidiaries Board of Directors approval
prior to closing.

As the payoff of this loan has been the most pressing issue facing the
Company and to assure the release of Tri-National's corporate guarantee, as
well as the personal guarantees given by Michael Sunstein and his wife, Dr.
Jerry Parker and his wife and Lic. Bersain Gutierrrez and his wife and the
subsequent judgments secured by Capital Trust in the amount of $8,300,000
held against each of these parties-individually and collectively, the
Contract for Deed for Plaza Rosarito, as stated, was subject to the
approval of Capital Trust.  Capital Trust has not accepted any of the
offers submitted by Senior Care and continues to enforce both the corporate
and personal guarantees and judgments.  In addition, Capital Trust has
requested and been granted a State of California court appointed receiver.
The receiver's sole responsibility was to place a mortgage on Plaza
Rosarito on behalf of Capital Trust, which could replace the corporate and
personal gurantees and subsequent judgments.  As detailed in our last
Annual Report, at the time the loan was made to complete this acquisition,
there was never a mortgage placed on the any of the properties that
comprise Plaza Rosarito primarily the 187,500 square foot shopping center
and the 15 acres of beachfront land, leaving the property free of all liens
and encumbrances and Capital Trust's $8,000,000 loan effectively unsecured
by Plaza Rosarito.  However, Capital Trust acknowledges that the Company
never took advantage of the situation as we could have by securing a
construction loan and placing a subsequent lien on the property in front of
Capital Trust.  This was a moral dilemma for Tri-National management since
the opportunity was obvious, and the need for such funding was paramount,
but Capital Trust was ethically if not legally entitled to a mortgage based
on the original contracts for their $8,000,000 loan.  After consideration,
the Company chose not to abuse the situation and continues to work with
Capital Trust to resolve the situation in a way that serves both parties.

Without a successful resolution to pay off Capital Trust, Senior Care
attempted to have TND accept 100% of the consideration being offered for
the assets be made in shares of their Convertible Preferred stock.  After
careful consideration and extensive due diligence, the Board of Directors
of the Company refused to accept

                                   10
<PAGE>
the terms and risks associated with the last proposal by Senior Care and
terminated the entire transaction effective close of business, July 2,
2001.

In spite of all the facts and documents to the contrary, Senior Care is now
claiming all of the Purchase Agreements that were previously executed were
not subject to either Board of Director or Capital Trust, Inc. approval.
Further, it was of the recent opinion of Judge Strauss of the California
State Court in San Diego that indeed the transaction had not closed and
then issued a restraining order against Senior Care Industries, Inc. and
its officers and directors from making any further actions regarding this
property.

Consequently, Senior Care has since advised Tri-National that it fully
intends to proceed with the Tender Offer it issued on May 22, 2001, wherein
Senior Care Industries, Inc. (OTC BB: SENC) filed an initial Form TO-T with
the U.S. Securities and Exchange Commission making and elaborating an offer
to buy up to 51% of the outstanding common stock of Tri-National
Development Corp. (OTC BB:TNAV).  "Senior Care is offering to buy up to 51%
of the outstanding Common shares of Tri-National Development Corp., or
approximately 20,000,000 common shares.  The terms of the offer are as
follows:  For every three (3) shares of Tri-National common stock that are
tendered, Senior Care is offering one (1) share of Senior Care common stock
plus one (1) warrant giving the holder the right at the holder's option to
purchase one (1) additional share of Senior Care common stock for a period
of one year by the payment of $1.00 to Senior Care".

The offer states "Shareholders of the Company may tender their Tri-National
common shares at any time after the date of the tender offer, May 22, 2001,
up to and including August 31, 2001.  It is not anticipated at this time
that shareholders will be able to tender their Tri-National common shares
after August 31, 2001.  If a total of 51% of the common shares of
Tri-National are not tendered to Senior Care by August 31, 2001, then Senior
Care may at its option (a) extend the offering period, (b) accept the
shares which have been tendered, or (c) opt not to accept any tendered
shares.  If more than 51% of the common shares of Tri-National are tendered
to Senior Care by August 31, 2001, then Senior Care may at its option (a)
accept the full amount tendered or (b) accept any amount between 51% and
the full amount tendered by accepting a fixed and equal percentage of all
blocks of shares tendered".

Senior Care has announced that it chooses to move forward with the tender
offer regardless of the termination of the sale of assets.  If Senior Care
is successful in acquiring 51% of the Company through the tender offer,
they would acquire controlling interest in the Company, thereby controlling
the assets in the proposed sale without ever closing the escrow or
providing any cash payments to the Company, and without Board of Directors
approval or a shareholders meeting to vote on the transaction.

It is the considered and unequivocal opinion of Management and the Board of
Directors, after considerable due diligence, that this Tender Offer is
absolutely and most clearly not in the best interests of the Company or its
shareholders and should be rejected.  Senior Care has repeatedly not
delivered on commitments it has made which were specific conditions of
their agreements with Tri-National.  They were unable to make any of the
above referenced cash payments to which they had committed in order to
resolve the Capital Trust debt and thereby free the Company to move
forward.  We believe there is no benefit to the transaction and that in the
long run, shareholders will realize no increased value or improvement of
their position at such time as their shares become liquid and tradable, and
that they will in fact have suffered very significant further dilution and
loss.  The Tender Offer has at this point in time become a hostile takeover
attempt, and we do not believe that it serves anyone but the insiders at
Senior Care.

RISK FACTORS AFFECTING FUTURE RESULTS REGARDING FORWARD-LOOKING STATEMENTS

The Company's business, results of operations and financial condition are
subject to many risks, including those set forth below.  Certain statements
contained in this report, including without limitation statements
containing the words "believes," "anticipates," "expects," and words of
similar import, constitute "forward-looking statements" within the meaning
of the Private Securities Litigation Reform Act of 1995.  Such forward-
looking statements involve known and unknown risks, uncertainties and other
factors which 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

                                   11
<PAGE>
statements.  The Company has made forward-looking statements in this report
concerning, among other things, the impact of future acquisitions and
developments, if any, and the level of future capital expenditures.  These
statements are only predictions, however; actual events or results may
differ materially as a result of risks facing the Company.  These risks
include, but are not limited to, those items discussed below.  Certain of
these factors are discussed in more detail elsewhere in this report,
including without limitation under the captions "Business" and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations."  Given these uncertainties, readers are cautioned not to place
undue reliance on such forward-looking statements, which speak only as of
the date of this report.  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 has executed numerous contracts for, among other things,
acquisition and development of real estate projects.  Several of the
Company's previously announced attempted acquisitions have after further
due diligence, been abandoned. Certain risks are inherent with the
implementation of the Company's business strategy.  These risks include,
but are not limited to, access to capital necessary to complete the
acquisitions and development, the Company's ability to sustain and manage
growth, governmental regulation, competition and risks common to the real
estate development industry.

CAPITAL REQUIREMENTS

The Company was organized to create and realize value by identifying and
making opportunistic real estate investments through the direct
acquisition, rehabilitation, development, financing and management of real
properties and/or participation in these activities through the purchase of
debt instruments or equity interests of entities engaged in such real
estate business.  The Company's business strategy is to maximize
shareholder value, focusing on three priorities: growth, profitability and
liquidity through both domestic and international real estate investments.
The Company's primary source of equity financing has been through private
placement of its securities, including short-term promissory Notes.  As of
April 30, 2001, the Company had roughly $12,000,000 of its short-term
corporate notes ("Notes") outstanding (See "NOTES TO THE FINANCIAL
STATEMENTS").

To continue its business strategy, the Company intends to fund its next
round of acquisitions, development and general working capital by
conducting additional private placements of common stock, preferred stock
and debentures.  In addition to the private placements, the Company is
seeking property specific mortgage financing, as well as joint venture
partners and the sale of existing properties.

Presuming the completion of various private placements and the
restructuring of current mortgages, including Capital Trust and the Notes,
the Company would hope to have sufficient funds to complete development of
several of its current projects, which will produce increased revenues to
the Company. In anticipating these projects begin producing an income, the
Company could move away from financing its operations through the sale of
securities. However, there is no assurance that the Company will be able to
do so.

THE COMPANY MAY FAIL TO RAISE REQUIRED CAPITAL

We require significant additional capital to restructure the Company's
existing debt, build out and operate planned properties and for general
working capital needs. Most critically, the $8,300,000 judgment held
against the Company and several of its officers and directors by Capital
Trust, Inc. and the $12,00,000 in nine-month corporate notes must both be
restructured.  We also require additional capital to invest in any new
opportunities. Capital markets have recently been volatile and uncertain.
These markets may not improve, and we may not be able to access these
markets to raise additional capital. If we fail to obtain required new
financing, the failure would have a material adverse effect on our business
and our financial condition. For example, if we are unable to access
capital markets, we may have to restrict our activities or sell our
interests, or in one or more of our subsidiaries or other ventures earlier
than planned or at a "distressed sale" price.

                                   12
<PAGE>
WE HAVE A HISTORY OF LOSSES AND ANTICIPATE FUTURE LOSSES

The Company experienced net losses of approximately $8,540,199 in the year
ended April 30, 2001, net income of $532,629 in the year ended April 30,
2000 and a net loss of $2,906,671 for the year ended April 30, 1999.
Losses are likely to be significant for at least the next year to possibly
two years as we restructure our debt and continue to invest additional
funds into existing projects to bring them to cash flow, as well as
investing in new projects. We may not generate profits in the short term or
at all. If we fail to achieve profitability, that failure could have a
negative effect on the market value of our common stock.

COMPETITION

The retirement and residential housing business are highly competitive, and
the Company competes with numerous housing producers ranging from regional
and national firms to small and local builders primarily on the basis of
price, location, financing, design, reputation quality and amenities.  In
addition, the Company competes with other housing alternatives including
existing homes and rental housing.

Vacation Ownership (Timeshare)

Resort timesharing has existed in Mexico since the early 1970's.  During
the past few years, timesharing has been one of the fastest-growing
vacation and real estate industries in the country.  On a worldwide basis,
it is estimated that over 3.75 million households own timesharing in more
than 5,000 timeshare projects.  It also estimated that worldwide sales
volume in the timeshare industry in 1998 was close to $6 billion.

There are 273 timeshare projects in Mexico, which is about six percent of
the world's total.  The timeshare projects are located in Cancun (44),
Puerto Vallarta (42), Acapulco (30), Mazatlan (78), Los Cabos (24), Ixtapa
(19), Manzanillo (14), Cozumel (5), Huatulco (4) and elsewhere around the
country (63).  About 21.5 percent of all overnight accommodations in the
nine major coastal resort destinations of Mexico are timeshare units,
including 40.1 percent in Puerto Vallarta.

On a historical basis, more than $6 billion of timeshare inventory has been
sold in Mexico.  This involves 795,300 intervals being sold to 568,100
customers, including 233,500 Mexican residents and 334,600 international
consumers.  Some 82 percent of the international buyers live in the United
States.  The 568,100 owners represent about 16 percent of the world's
total.  About $808 million of timesharing, about 15 percent of the world's
total was sold in Mexico in 1997.

This contributes significantly to Mexico's economy.  In 1997, the year-round
occupancy rate in built timeshare projects was about 76.5 percent,
compared to about 56.5 percent in the hotel industry.  The average
timeshare-vacationing party spends 9.4 nights while on their timeshare
vacation, including occupancy of their timeshare unit and other forms of
overnight accommodation.  The average visitor party is 3.8 persons.  These
figures mean that the timeshare industry annually generates almost 27
million visitor days in Mexico with over $7 billion in expenditures,
creates directly and indirectly 94,000 jobs and about $900 million in
payroll.

There are three vacation ownership properties to compete with in Baja
California, Mexico; the Rosarito Beach Hotel, the Grand Baja Club and
Hussongs Vacation Club in Ensenada, none of which are located on or near a
golf course.  However, the U.S. competition is the Four Seasons at Aviara
and Grand Pacific Resorts in Carlsbad, California, the Winner's Circle in
Del Mar, California, Pacific Monarch Resorts in Laguna Hills, California
and the Marriott in Palm Desert, California all at least a 1-3 hour drive
from the Players Club at Bajamar.

The majority of timeshare owners in Mexico are upper-middle income
households.  Most are between 40 and 60 years of age, college graduates and
married households.  The median income of U.S. owners in Mexico is more
than $68,000.  Almost one-third have incomes over $100,000.

                                   13
<PAGE>
Senior, Independent and Assisted Living

The health care industry is highly competitive and the Company expects the
assisted living business in particular will become more competitive in the
future.  The Company will face competition from numerous local, regional
and national providers of assisted living and long-term care whose
facilities and services are on either end of the senior care continuum from
skilled nursing facilities and acute care hospitals to companies providing
home based health care, and even family members.  In addition, the Company
expects that as assisted living receives increased attention among the
public and insurance companies, competition from current and new market
entrants, including companies focused on assisted living, will increase.
Some of the competitors in this industry operate on a not-for-profit basis
or as charitable organizations, while others have, or may obtain, greater
financial resources than those available to the Company.

RAPID GROWTH

Management of Growth

The Company is planning, subject to available financing, expansion both
internally and acquisitions and development.  In order to improve operating
results, the Company's management must manage growth and expansion
effectively.  The Company's ability to manage its growth effectively
requires it to expand its operational, financial and management information
systems and to continue to attract, train, motivate, manage and retain key
employees.  As the Company continues its expansion, it may become more
difficult to manage geographically dispersed operations.  The Company's
failure to effectively manage growth could have a material adverse effect
on the Company's results from operations.

External Growth

In line with its business strategy, the Company has entered into, and will
continue to enter into, a number of agreements to acquire properties for
development.  There can be no assurance that one or more of such
acquisitions will be completed or that the Company will be able to find
additional suitable properties to continue a steady rate of growth.  There
can be no assurance that suitable properties will be available for future
acquisition and development at prices attractive to the Company.  The
acquisition and development of properties are subject to a number of risks,
many of which are outside the Company's control.  There can be no assurance
that the Company will be able to complete its planned facilities in the
manner, for the amount or in the time frame currently anticipated.  Delays
in the progress or completion of development projects could affect the
Company's ability to generate revenue or to recognize revenue when
anticipated.

DEVELOPMENT AND CONSTRUCTION RISKS

As part of its business strategy during the next few years, the Company
plans to develop senior and assisted living, resort, commercial and
residential properties.  The Company's ability to achieve its development
plans will depend upon a variety of factors, many of which are beyond the
Company's control.  The successful development of additional properties
involves a number of risks, including the possibility that the Company may
be unable to locate suitable sites at acceptable prices or may be unable to
obtain, or may experience delays in obtaining, necessary zoning, land use,
building, occupancy, licensing and other required governmental permits and
authorizations.  Development schedules may be changed by the Company in
order to accommodate requirements of staffing of new projects and to allow
a phase-in of start-up losses inherent in the marketing and lease-up of new
facilities.  Certain construction risks are beyond the Company's control,
including strikes, adverse weather, natural disasters, supply of materials
and labor, and other unknown contingencies which could cause the cost of
construction to exceed estimates.  If construction is not commenced or
completed, or if there are unpaid subcontractors or suppliers, or if
required occupancy permits are not issued in a timely manner, cash flow
could be significantly reduced.  In addition, any property in construction
carries with it its own risks such as construction defects, cost overruns,
adverse weather conditions, the discovery of geological or environmental
hazards on the property and changes in zoning restrictions or the method of
applying such zoning restrictions.  The nature of licenses and approvals
necessary for development and construction, and the timing and likelihood
for obtaining them vary widely from country to country, state to state, and
from community to community within a state.

                                   14
<PAGE>
REGULATION AND ENVIRONMENTAL

The Company and its subcontractors must comply with various federal, state
and local ordinances, rules and regulations concerning zoning, building
design, construction and similar matters.  The operations of the Company
are affected by various federal, state and local environmental laws,
ordinances and regulations, including regulations pertaining to
availability of water, municipal sewage treatment capacity, land use,
protection of endangered species, population density and preservation of
the natural terrain and coastlines.  These and other requirements could
become more restrictive in the future, resulting in additional time and
expense to obtain approvals for development.  When acquiring land for
development or existing facilities, the Company typically obtains
environmental reports on the properties as part of its due diligence in
order to lessen its risk of exposure.

The Company is also subject to regulations and restrictions by the
government of Mexico concerning investments in business operations in this
country by U.S. companies, none of which has to date had a material adverse
effect on the Company's consolidated operations.  The Company's foreign
operations are also subject to exchange rate fluctuations, which could
affect the Company's financial statements and the reported profits.

VOLATILITY OF STOCK PRICE

Sales of substantial amounts of shares of Common Stock in the public market
or the perception that those sales could occur could adversely affect the
market price of the Common Stock and the Company's ability to raise
additional funds in the future in the capital markets.  The market price of
the Common Stock could be subject to significant fluctuations in response
to various factors and events, including the liquidity of the market for
the shares of the Common Stock, variations in the Company's operating
results, change in earnings estimates by the Company and/or securities
analysts, publicity regarding the industry or the Company and the adoption
of new statutes or regulations in any the Company's particular industries.
In addition, the stock market in recent years has experienced broad price
and volume fluctuations that often have been unrelated to the operating
performance of particular companies.  These market fluctuations may
adversely affect the market price of the shares of Common Stock.

CONTROL BY DIRECTORS AND EXECUTIVE OFFICERS

As of April 30, 2001, the Company's directors and executive officers and
their affiliates beneficially owned approximately 25.34% of the Company's
outstanding shares of Common Stock (See "SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT)."  As a result, these stockholders,
acting together, would be able to significantly influence many matters
requiring approval by the stockholders of the Company, including the
election of Directors. These shares are available for sale in accordance
with Rule 144. Rule 144 provides, in essence, that a shareholder who is an
affiliate of the Company, after holding restricted securities for a period
of one year, may every three months, sell them in an unsolicited brokerage
transaction in an amount equal to 1% of the Company's outstanding common
shares, or the average weekly trading volume, if any, during the four weeks
preceding the sale.  Non-affiliated shareholders holding restricted
securities are not subject to the 1% limitation and may sell unlimited
amounts of shares they own, under certain circumstances, after a one-year
holding period.  If a substantial part of the shares, which can be sold
were so sold, the price of the Company's common shares might be adversely
affected.

EMPLOYEES

As of April 30, 2001, the Company and its subsidiaries employed 5 people on
a full-time basis and 3 on a part-time basis.  The Company's success is
highly dependent on its ability to attract and retain qualified employees.
To date, the Company believes it has been successful in its efforts to
recruit qualified employees, but there is no assurance that it will
continue to be successful in the future.  The Company believes relations
with its employees are excellent.  No employees are represented by
collective bargaining agreements.

                                   15
<PAGE>
ITEM 2.        PROPERTIES

The Company leases one office facility in San Diego, California and one in
Ensenada, Baja California under operating leases that expire in 2001 and
the year 2002, respectively.  The leases generally require the Company to
pay all maintenance, insurance and property taxes and are subject to
certain minimum escalation provisions.

The Company also maintains additional operations in Rosarito Beach, Baja
California at its Plaza Rosarito site.

The Company believes that such properties, including the equipment located
therein, are suitable and adequate to meet the requirements of its
businesses.  The Company's facilities are fully used for current operations
of all segments and suitable additional space is available to accommodate
expansion needs, if required.

ITEM 3.        LEGAL PROCEEDINGS

Citizens Business Bank (formerly Chino Valley Bank)

In March 1992, the Company advanced $383,064 to MRI Medical Diagnostics,
Inc. for a joint venture interest in its subsidiary, MRI Grand Terrace,
Inc., a California corporation, to enable it to acquire a retirement hotel
located in Grand Terrace, California.  In addition to the joint venture
interest, the loan was evidenced by a 15% note receivable from MRI Medical
Diagnostics, Inc. and a second trust deed and an assignment of rents from
MRI Grand Terrace, Inc..  On March 22, 1993, MRI Grand Terrace, Inc. filed
a complaint against Chino Valley Bank, now known as Citizens Business Bank
(AMEX:CVB), as a result of the purchase of the residential retirement hotel
in Grand Terrace from the Chino Valley Bank.  MRI Grand Terrace, Inc.
claimed that the sellers of the property (Chino Valley Bank) had failed to
disclose that the property's parking lot encroached on the property of the
adjacent parcel of land. Contrary to the bank's representations, the
Conditional Use Permit (CUP) under which the hotel was operating was in
violation, which restricted the ability of TND and MRI Grand Terrace, Inc.
to operate, refinance or sell the facility.  MRI Grand Terrace, Inc.
stopped making mortgage payments to the mortgage holder (the same Chino
Valley Bank), which then filed a Notice of Default as an initial step to
foreclosure on the property.  MRI Grand Terrace, Inc. then sought
Bankruptcy protection in July of 1993, and was ultimately dismissed from
Bankruptcy in May of 1995.  The Chino Valley Bank subsequently sold the
property in foreclosure to itself.  TND filed it's own action against the
Chino Valley Bank in early 1995, claiming that it was defrauded and
misrepresented when it advanced the $383,064 for the closing in 1992.  The
Company purchased the stock of MRI Grand Terrace, Inc., as described in
Note 4 to these financial statements, in an effort to control both
lawsuits.  As a result of the uncertainty of the final results of the
lawsuits, the Company previously wrote off the investment.  In May of 1998,
TND and MRI Grand rrace, Inc. received judgments in their favor for fraud,
intentional misrepresentation and deceit/negligent misrepresentation in the
Superior Court of San Bernardino, California. TND and MRI Grand Terrace,
Inc. received judgments totaling almost $5 million dollars, including
punitive and compensatory damages, plus pre-trial interest.  Beginning May
7th, 1998 the $5 million judgment began accruing, post judgment interest of
10% or $1,400 per day until the full award is paid.  A 35% portion of the
award is due to the Company's attorney.  The attorneys, however, filed for
recovery of those fees as an additional award that was heard and approved
September 25, 1998. On December 3, 1998, the court awarded the Company an
additional $185,000 in legal fees.

The bank filed its appeal on June 16, 1999 and we filed our answer to their
appeal September 16 1999, with oral arguments held on September 6, 2000.
The Appellate Court came back with a recommendation for a retrial based on
inconsistent verdicts in the first trial.   This gave Tri-National the
right to cross appeal.   However, we decided not to exercise this right on
the basis of the additional damages we believe we could show in the second
trial that were not permitted in the first trial.  Currently, the court has
ordered the case to arbitration prior to scheduling the second trial.  Due
to uncertainty of arbitration and the outcome of the second trial, the
Company has written off the original judgment.

                                   16
<PAGE>
Short Term Corporate Notes

The Company has made private offerings of its securities, including its
common stock and nine-month corporate notes ("Notes"), in reliance on
exemptions from the registration requirements of the Securities Act of 1933
and applicable state securities laws. The Company became the subject of a
cease and desist order issued by the Wisconsin Securities Division, based
on sales of its Notes to Wisconsin residents.  The nine-month promissory
note program was brought to the Company by the investment banking firm,
Johnson, Richards & Company, Inc., and the Company relied on
representations made by that firm that a federal exemption was available
under the right terms and conditions.  With the proceeds being used for
specific projects etc., the Notes were considered commercial paper and
exempt from securities registration.  Although the Company believes it
properly met the criteria for exemption, because it used the proceeds to
acquire real estate and is arguing that the sales met the requirements of
the Wisconsin private offering exemption, it has paid off all of the Notes
due in Wisconsin.  The Company has also agreed to a voluntary cease and
desist order in California and North Carolina with respect to sales of
those same Notes in that state.  The California Department of Corporations
and the North Carolina Department of Corporations both required the Company
to offer rescission to investors in that offering and all California and
North Carolina investors accepted that rescission offer.  This requires the
Company to repay all California and North Carolina investors their
principal only, which the Company has already started paying.  The
California order does not prohibit future exempt or qualified sales of the
Company's securities in California.

Additionally, the Louisiana Commissioner of Securities and Connecticut
Department of Banking are currently examining the sales of the Notes to its
residents.  In the event that it is found that the sales did not meet the
requirements of applicable exemptions from registration, it is the position
that the Company must refund all investments in the Notes to Louisiana and
Connecticut purchasers.  The Company issued approximately $1,500,000 in
Notes to Louisiana investors.  The Company has already started to pay off
Notes due in Louisiana and intends to meet the balance of the refund
obligation with a combination of revenues generated by Plaza Rosarito,
equity and/or debt financing and the leveraging of portions of its real
estate portfolio.   There can be no absolute assurance, however, that the
violations will in fact be cured in this manner and therefore it is
possible that further remedial action may be required.

Because the Company has relied on federal and state exemptions for
placement of its Notes, other states may find that the Company did not
comply with the various blue sky exemptions. The consequences of any such
violations may vary from state to state, but could include the requirement
that the Company rescind some or all of the sales in such states at the
request of the affected subscribers and prepare formal registration
statements and/or other documentation at the request of the securities
regulators. Additionally, the Company and/or its officers may be subject to
civil and/or criminal fines or penalties including, but not limited to, a
sanction with regard to the Company's ability to make any public offering
in the future.  It is believed that the Company can continue its operations
through its development of cash and revenues from its ongoing operations
despite the rescission offer in California and potential refund to
Louisiana investors.

New England International Surety

As stated, to implement its business strategy, the Company initially funded
acquisitions, development and general working capital by issuing a Private
Placement of nine-month Corporate Notes at 10% interest per annum. The
investors principal and interest are guaranteed by the Company and further
bonded by New England International Surety Co., for up to $15 million. The
Company collateralized the $15 million in bonding from New England
International Surety Co. with a portion of its Hills of Bajamar property
and paid over $1,000,000 in bonding fees.    As of April 30, 2000 the
Company placed $11,664,984 in Corporate Notes, of which all are due.  The
Company intends to repay the principal and interest with cash flow
generated from operations, property specific mortgages and the sale of its
Series B Convertible Debentures.  New England International Surety Co. has
not performed and the matter has been turned over to legal counsel to
pursue the recovery of the bonding fees through litigation.

                                   17
<PAGE>
Capital Trust, Inc.

On November 20, 1998, Tri-National Holdings, S.A. de C.V., a Mexican
subsidiary, purchased the Plaza San Fernando from Banco Bital with a $1
million cash down payment.  In July of 1999, Capital Trust Inc. of New York
provided the remaining $8 million necessary to close and complete the
escrow.  In March of 2001, the Company received a 60-day forbearance from
Capital Trust, Inc. for the repayment of the $8 million and has
subsequently defaulted.  In response to the default, Capital Trust, Inc.
entered previous executed confession of judgment in New York on August 29,
2000, in the amount of $8,300,000 against Tri-National Development Corp.
and the following officers and directors individually: Michael and Linda
Sunstein, as personal guarantors, Dr. Jerry and Annmarie Parker, as
personal guarantors, and Bersain and Laura Gutierrez, as personal
guarantors.  All of the personal guarantors signed confessions of judgment
as part of the closing documents for the loan as a condition of receiving
the loan from Capital Trust, Inc..  The confessions of judgment were in
addition to posting of collateral of 3,500,000 common shares of
Tri-National Development Corp. by the Company and a total of 3,135,000
common shares of Tri-National Development Corp. owned personally by Michael
Sunstein and Dr. Jerry Parker.  In February of 2001, Capital Trust, Inc.
entered the judgment "sister-state" in California.  The Company filed a
motion to vacate the sister-state judgment based on its unconstitutionality
in the State of California and was denied.  The Company immediately filed
an appeal, however, without the necessary funds to post an appeal bond, the
Company was unable to stay the enforcement and Capital Trust, Inc. is
moving forward with any and all collections efforts, including retaining a
third-party, post-judgment receiver appointed by the State of California,
however, the appeal process is continuing.  The receiver's sole
responsibility was identified as proceeding to obtain a lien on the Plaza
Rosarito property in favor of Capital Trust, Inc., as this was not
completed at the closing of the loan and to date has not been completed.

First Regional Bank CBO Norman Lizt

In April of 1999, the Company acquired 2.39 acres of undeveloped land in
San Marcos, California with plans to develop a 60-unit Alzheimer's care
facility for a note for $450,000 (the "Note").  The Note was collateralized
by the real property and 980,000 common shares of the Company.  The Company
was unable to get the proper permits and approvals for the development of
an Alzheimer's facility and subsequently was unable to receive the required
the financing for the repayment of the Note.  The seller, First Regional
Bank CBO Norman Lizt, is seeking a foreclosure of both the 2.39 acre parcel
and the 980,000 common shares.

An action for judicial foreclosure of purchase-money deed of trust against
the Company and the following officers and directors, individually as
guarantors: Michael Sunstein, Jason Sunstein and Dr. Jerry Parker was
entered by the seller with judgments on July 11, 2001.  The Company is
currently negotiating the settlement of this matter.

Commercial Money Center

This was an action and judgment entered April 17, 2001 against both the
Company and its wholly-owned subsidiary, Greater San Diego Imaging Center
in the San Diego Superior Court, regarding a lease on the MRI equipment
previously owned and operated by Greater San Diego Imaging Center, a
California corporation.  The Company has since settled this action for a
total of $265,000.

Investment Funding Associates

This was an action and judgment entered June 5, 2001 against both the
Company and Michael Sunstein in the U.S. Southern District of Florida
regarding loan brokerage fees in connection with the Plaza Rosarito.  The
Company has since settled this action for a total of $250,000.

Planning Associates of the Carolinas, Inc.

This was an ongoing action in the North Carolina Superior Court Moore
County against the Company in connection with outstanding commissions for
the nine-month corporate notes sold by the principal owner

                                   18
<PAGE>
and agent, Michael Kohut, to his clients in North Carolina.  Settlement is
still pending for the issuance of common shares of the Company.

Fulciniti and Newstat

This was an action by indirect participants in a 1993 private placement
against the Company and Ron Yates, a former officer of the Company.
Plaintiffs (and others) had provided funds for stock subscription of then
company officer, Ron Yates.  The Company gave Note to Yates in lieu of
shares.  Parties entered agreement to purchase Note and other common shares
of the Company from Ron Yates and Associates.  The escrow was never opened,
the Note and common shares never tendered by Ron Yates & Associates.
Cross-complaint by Ron Yates against the Company and Michael Sunstein on
various claims.  Cross-complaint by the Company and Michael against Yates
for declaratory relief. The settlement is pending for $75,000 stipulated
judgment against the Company in favor of plaintiff, Fulcinit and Newstat.
The claims of Fuciniti and Newstat against Yates were assigned to the
Company with mutual dismissals, without prejudice as to the Company and
Michael Sunstein and Ron Yates.

IOS Capital

This was action brought in San Diego Superior Court on April 13, 2001
against the Company by IOS Capital regarding an office equipment lease for
$15,000.  Settlement pending.

Craig Lanser

This is an action brought in San Diego Superior Court on August 2, 2001
against the Company and its directors by Craig Lanser, a prior consultant
to the Company, for breach of alleged written agreements.  Mr. Lanser is
seeking $50,000 and 340,000 common shares of the Company.  The Company
plans to fight this action and file its answer September 1, 2001.

Gary P. McCracken

This was an action brought in San Diego Superior Court against the Company
and New England International Surety, the bonding company for the nine-
month corporate notes ("Notes"), for the repayment of the principal and
interest of a Note in the amount of $44,685.  The Company plans to settle
this action as soon as funds are available.

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

There were no matters submitted to security holders for a vote during the
Company's fourth quarter of the year ending April 30, 2001.

                                 PART II

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

The following table sets forth the trading history of the Common Stock on
the Over the Counter Bulletin Board through June 30, 2001, as reported by
FT Interactive Data.  The quotations reflect inter-dealer prices, without
retail mark-up, mark-down or commission and may not represent actual
transactions.  As of April 30, 2001, there were 49,792,793 shares issued
and outstanding.

                                   19
<PAGE>
                        HIGH BID     LOW BID      HIGH ASK      LOW ASK

1999 QUARTER

First (1/1 - 3/30)      $1.00000    $0.62500      $1.03130     $0.68750
Second (4/1 - 6/30)      1.00000     0.62500       1.06250      0.68750
Third (7/1 - 9/30)       1.00000     0.56250       1.06250      0.56250
Fourth (10/1 - 12/31)    0.90625     0.37500       1.00000      0.43750

2000 QUARTER

First (1/1 - 3/30)      $0.78125    $0.43750      $0.84375     $0.50000
Second (4/1 - 6/30)      0.43750     0.25000       0.46875      0.28125
Third (7/1 - 9/30)       0.93750     0.90625       1.03130      0.90625
Fourth (10/1 - 12/31)    0.87500     0.37500       1.00000      0.43750

2001 QUARTER

First (1/1 - 3/30)      $0.75000    $0.43750      $0.87500     $0.50000
Second 4/1 - 6/30)       0.43750     0.25000       0.50000      0.28125

HOLDERS

As of April 30, 2001, there were approximately 1,150 registered holders of
the Company's Common Stock.  Because many of our shares are held by brokers
and other institutions on behalf of stockholders, we are unable to estimate
the total number of beneficial stockholders represented by these record
holders.

DIVIDEND POLICY

The Company has never declared or paid cash dividends on its Common Stock,
and may elect to retain its net income in the future to increase its
capital base.  The Company does not currently anticipate paying cash
dividends on its Common Stock in the foreseeable future.

STOCK FOR VINAS DE BAJAMAR LOTS CONVERSION

During the year end April 30, 1998, the Company carried out a Private
Placement to existing shareholders for approximately 4,000 square foot
residential lots at the Hills of Bajamar.  The cash price per lot was
$10,000 and the stock price per lot was 5,000 shares of Common Stock at a
value of $2.00 per share.  A total of 15 shareholders subscribed to the
Private Placement for a total 22 lots, totaling 110,000 shares of Common
Stock.  In August of 2000, the Buyers selected, on average, 7,000 square
foot lots within its Vinas de Bajamar development and the Company cancelled
their respective stock certificates.  The Company anticipates a similar
offering to the shareholders in the near future.

STOCK ISSUED FOR SERVICES

In an effort to preserve cash, the Company issued shares of Common Stock in
the Company for services for the year end April 30, 2001.   Services
included full-time and part-time employees, outside consultants, marketing,
architects, engineers, land planners, accounting and legal services, web
site design and other professional services.

STOCK ISSUED TO CAPITAL TRUST, INC.

A total of 4,000,000 restricted common shares were issued to Capital Trust,
Inc. of New York.  There were 500,000 shares issued as a retainer for
investment banking services and 3,500,000 shares in connection with the $8
million loan for the closing of Plaza Rosarito (See "BUSINESS").  The
4,000,000 common shares will be canceled upon repayment of the loan.  As
the 3,500,000 shares were issued for collateral purposes

                                   20
<PAGE>
only, they are not included in the issued and outstanding calculations.  In
addition, 2,000,000 restricted common shares were issued to The A.J. Hester
Group, which are currently subject to recall.

STOCK ISSUED TO VILLA SERENA

A total of 1,200,000 restricted common shares were issued to Villa Serena
Homeowners Association as collateral for a $300,000 loan.  The 1,200,000
common shares will be canceled upon repayment of the loan. As these shares
were issued for collateral purposes only, they are not included in the
issued and outstanding calculations.

STOCK ISSUED TO SILVER POINTE INVESTMENTS, LLC

A total of 2,112,000 were transferred to Silver Pointe Investments, LLC as
collateral for a $750,000 loan.  The 2,112,000 common shares will be
canceled upon repayment of the loan.  As these shares were issued for
collateral purposes only, they are not used in the issued and outstanding
calculations.

STOCK ISSUED TO NORMAN LIZT

A total of 980,000 restricted common shares were issued to Norman Lizt as
collateral for a $400,000 loan in connection with the acquisition of the
land in San Marcos, California.  As these shares were issued for collateral
purposes only, they are not included in the issued and outstanding
calculations.

STOCK ISSUED TO PACIFIC HORIZON

A total of 9,000,000 restricted common shares were issued to Pacific
Horizon as collateral for a $2,700,000 loan in connection with the bridge
loan for the land in Temecula, California.  As these shares were issued for
collateral purposes only, they are not included in the issued and
outstanding calculations.

WARRANTS GRANTED AND EXERCISED DURING THE YEAR

Not applicable.

RECENT SALES OF SECURITIES

The Company offered and completed a private placement of 3,000,000 shares
of its common stock from April of 2000 and closed in January of 2001 at
various prices based upon the market value of the Company common stock. The
Use of Proceeds for the private placement was for general working capital.
The shares issued pursuant to this private placement are restricted
securities as defined by Rule 144.


ITEM 6.        MANAGEMENT'S DISCUSSION AND ANAYSIS OF RESULTS OF OPERATIONS
               AND FINANCIAL CONDITION

OVERVIEW

The Company was organized to create and realize value by identifying and
making opportunistic real estate investments through the direct
acquisition, rehabilitation, development, financing and management of real
properties and/or participation in these activities through the purchase of
debt instruments or equity interests of entities engaged in such real
estate business.  The Company's business strategy is to maximize
shareholder value, focusing on three priorities: growth, profitability and
liquidity through both domestic and international real estate investments.
The Company's primary source of equity financing has been through private
placement of its securities, including short-term corporate notes
("Notes").  As of April 30, 2001, the Company had roughly $12,000,000
outstanding pursuant to private placement offerings of its Notes, which are
all now due.  The Company intends to repay the principal and interest with
cash flow generated from operations, property specific mortgages and
additional private placements of its securities.

                                   21
<PAGE>
To continue its business strategy, the Company intends to fund its next
round of acquisitions, development and general working capital by
conducting private placements of common stock, preferred stock and
debentures.  In addition to the private placements, the Company is seeking
property specific mortgage financing, as well as joint venture partners and
sale of existing properties.

Following the completion of various private placements and the
restructuring of current mortgages, including Capital Trust and the Notes,
the Company would hope to have sufficient funds to complete development of
several of its current projects, which will produce revenues to the
Company. Once these projects begin producing an income, the Company could
move away from financing its operations through the sale of securities.
However, there is no assurance that the Company will be able to do so.

RESULTS OF OPERATIONS

YEAR ENDED APRIL 30, 2001 COMPARED TO YEAR ENDED APRIL 30, 2000.  During
the year ended April 30, 2001, the Company had a net loss of $8,540,199 or
$(0.21) per share compared to net income of $532,629 or $.015 per share for
the same period ended April 30, 2000.  This change is primarily
attributable to significant write-down of investments and marketable
securities, specifically the reduced market values of NetRom, Inc., Taig
Ventures, Inc. and Alpine Gardens East, Inc..  Operating expenses for the
year end April 30, 2001 was $2,720,680, a decrease from $5,992,159 for the
year ending April 30, 2000.  This decrease is attributable to cessation of
the Company's offering of its nine-month notes and associated legal,
accounting and interest, and the resulting decrease in corporate note
expense to $(7,056) for the year ended April 30, 2001, compared to
$2,271,959 for the year ended April 30, 2000.  For the year ended April 30,
2000, the Company had total revenues of $112,060 compared with $194,579 in
total revenues for the preceding fiscal year end.

The Company's general and administrative expense for the year ended April
30, 2001 decreased to $783,421 from $1,571,391 for the same period ending
April 30, 2000.  This decrease is attributable to Company's cost-cutting
measures implemented during the year end.

LIQUIDITY AND CAPITAL RESERVES

Net change in cash during the fiscal year ended April 30, 2001 was
$(72,325), compared to a net change in cash of $(379,729 for the fiscal
year ended April 30, 2000.  Net cash used by operating activities totaled
$(2,078,152) for the year ended April 30, 2001, an decrease of from
$(3,359,784) for the year ended April 30, 2000.  This difference is
attributable primarily to an decrease in interest and associated expenses
paid on corporate Notes during the fiscal year ended April 30, 2001 as
compared to the same period in 2000.

Net cash used by investing activities totaled $310,381 during the year
ended April 30, 2001, compared to $(22,794,712) provided during the year
ended April 30, 2000.  This difference is primarily attributable to an
increase in expenditures for the acquisition and development of the Plaza
Rosarito and Youngtown Gardens.

Net cash provided by financing activities totaled $1,695,446 for the year
ended Apirl 30, 2001, a decrease from $25,774,767 for the year ended April
30, 2000.  The decrease primarily attributable to construction financing
and mortgages for the acquisition and development of the Company's
properties, including Alpine Gardens East, Youngtown Gardens, Temecula
Gardens, Carlsbad and San Marcos, California properties, the Hills of
Bajamar, Plaza Rosarito and Portal Del Mar during the year ended April 30,
2000.

At April 30, 2000, the Company's cash, which includes cash reserves and
cash available for investment, was $8,969, down from $81,294 at the
preceding fiscal year end.

PLAN OF OPERATION

To date, the Company has obtained funds for the acquisition of its
properties from the sale of common stock and 9-month promissory notes
("Notes").  Recently, state and federal securities regulators have begun to

                                   22
<PAGE>
target nine-month note programs, primarily being offered by sham and/or
start-up companies.  The Company has agreed to voluntarily cease sales of
its Notes, although management feels that the program met the requirements
of federal and state exemptions from registration for sales of commercial
paper.  Due to the cessation of its Note sales, the Company has experienced
an immediate need for alternative funding both to service the existing
Notes and for the completion of development on its current projects.

We have been extremely busy in our efforts to achieve our immediate goals
of (1) bringing our various properties to a point where they generate cash
flow, (2) refinancing current debt, and (3) obtaining new financing both to
fund additional acquisitions and further improve our existing properties.
Successful achievement of these goals would virtually insure realization of
the Company's vision of enhancing shareholder value by creating long-term
profitability based on consistent, predictable income streams.

In seeking new capital, the major obstacles the Company has faced have been
the approximately $12,000,000 in unsecured 9-month notes outstanding and
the $8,000,000 judgment against the Company and several of its executive
officers held by Capital Trust, Inc. of New York for the loan the Company
received to complete the acquisition of Plaza Rosarito.  The funds from
these loans and notes were used primarily for the acquisition of portions
of our significant portfolio of properties over the last couple of years.
However, in accordance with Generally Accepted Accounting Principles
("GAAP"), we are required to carry these assets on the Company's books at
cost.  The presence of the two outstanding liabilities effectively offsets
the Company's total assets on our balance sheet specifically because we
cannot reflect the true market value of those assets.  This has made
obtaining new financing on a corporate level virtually impossible.  In
addition, the $8,000,000 judgments against several of the Company's
executive officers by virtue of their personal guarantees on the Capital
Trust loan has made obtaining financing on a personal level for the benefit
of the Company, which the officers were willing to do, also virtually
impossible.

In addition to looking to both the private and public sectors for direct
cash infusions on either a debt and/or equity basis, the Company has been
aggressively searching for appropriate joint venture partners to obtain the
necessary financing and management expertise to accomplish its goals.  To
date, almost all of the potential joint venture candidates with whom the
Company has been engaged in negotiations have yet to make any firm
commitment in the form of the cash we need to address these liabilities.
They are, however, still very interested and have indicated that if we can
find a creative way to resolve or contain one or both of the above
referenced liabilities, then they would be willing to proceed.

The Company is continuing to aggressively pursue several alternatives for
the financing necessary to complete construction of the Plaza Rosarito
shopping center and resolve the $8,000,000 judgment due to Capital Trust.
We believe we are making very significant progress toward a solution that
will restore the liquidity of the Company, address the outstanding
liabilities, and allow rapid and profitable development of both the
Rosarito property and the Hills of Bajamar.  It is our intention that the
rewards of any such success go to the shareholders who have remained with
us through this long and difficult endeavor.  Although the Company is
confident it will resolve this matter with Capital Trust and retain
participation in these properties, we are required to point out that there
can be no assurances that it will be successful in its efforts



                                   23
<PAGE>
ITEM 7.        FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

               INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
                     TRI-NATIONAL DEVELOPMENT CORP.

                                                                     PAGE
                                                                     ----

Report of Don Harrison, CPA  - Independent Auditor . . . . . . . . . . 25
Consolidated Balance Sheets as of April 30, 2001 and 2000. . . . . . . 26
Consolidated Statements of Operations for year ended April 30, 2001. . 27
Consolidated Statements of Cash Flows for year ended April 30, 2001. . 28
Notes to Consolidated Financial Statements . . . . . . . . . . . . . . 29









                                   24
<PAGE>
                      INDEPENDENT AUDITOR'S REPORT
                      ----------------------------



I have audited the accompanying balance sheets of Tri-National Development
Corp. as of April 30, 2000 and 2001, and the related statements of income,
retained earnings and cash flows for the years then ended.  These financial
statements are the responsibility of the Company's management.  My
responsibility is to express an opinion on these financial statements based
on my audits.

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

The accompanying financial statements have been prepared assuming the
Company will continue as a going concern.  As discussed in Note 22 to the
financial statements, the Company has suffered major losses from operations
and has an excessive net working capital that raises  substantial doubt
about its ability to continue as a going concern.  Management's plans in
regard to these matters are also described in Note 22.  The financial
statements do not include any adjustments that might result from the
outcome of this uncertainty.

In my opinion, except for the going concern uncertainty discussed in the
preceding paragraph, the financial statements referred to above present
fairly, in all material respects, the financial position of Tri-National
Development Corporation as of April 30, 2000 and 2001, and the results of
its operations and its cash flows for the years then ended in conformity
with generally accepted accounting principles.


/s/ DON HARRISON
Don Harrison
A CPA

August 14, 2001



                                   25
<PAGE>
TRI-NATIONAL DEVELOPMENT CORPORATION
CONSOLIDATED  BALANCE SHEETS

<TABLE>
<CAPTION>
                                                     April 30, 01        April 30, 00
ASSETS:                                              ------------        ------------
-------
<S>                                                  <C>                 <C>
Current  assets:
----------------
Cash in banks                                        $      8,969        $     81,294
Accounts receivable, net                                  352,665           1,715,844
Citizens Business Bank Judgment Receivable (Note 2)                         6,092,065
                                                     ------------        ------------
    Total current assets                                  361,634           7,889,202
                                                     ------------        ------------

Investments:
------------
NetRom, Inc. convertible preferred stock (Note 3)                           1,292,794
Taig convertible preferred stock (Note 4)               1,150,000           3,000,000
MRI medical diagnostics, Inc. (Note 5)                                         18,185
Hills of bajamar (Note 6)                               4,951,195           4,219,577
Plaza resort timeshares (Note 7)                       14,648,501          14,645,085
Assisted living-Youngtown (Note 8)                                         16,999,119
Assisted living-Other Locations in process (Note 9)       579,974           2,450,516
Plaza rosarito (Note 10)                               11,472,349          11,883,398
Portal del mar condominiums (Note 11)                   1,645,122           1,484,232
Hall of fame fitness center (Note 12)                                          50,708
Alpine Gardens East (13)                                2,373,923           4,295,270
El Mirador Center (14)                                     50,000                   -
International health network (Note 15)                     17,334              17,334
                                                     ------------        ------------
    Total investments                                  36,888,399          60,356,219
                                                     ------------        ------------

Other assets:
-------------
Cash in banks - Restricted (16)                           114,692           5,126,879
Capitalized equipment lease                                     -             408,264
Property, furniture, and equipment, net                         -               3,169
Other Assets                                                                   34,654
                                                     ------------        ------------
    Total other assets                                    114,692           5,572,965

                                                     ------------        ------------
    Total Assets                                     $ 37,364,725        $ 73,818,387
                                                     ============        ============

Liabilities and stockholders' equity:
-------------------------------------
Current liabilities:
--------------------
Accounts payable and accrued liabilities             $  4,703,837        $  2,300,319
Citizens Business Bank Judgment expenses (Note 2)               -           3,171,838
Loans payable-short term-1 year or less (Note 17)      21,357,469          33,686,763
                                                     ------------        ------------
    Total current liabilities                          26,061,306          39,158,920


Deferred revenue                                                -           4,502,035
Notes payable-net of current portion (Note 18)          9,079,055          20,796,075
                                                     ------------        ------------
    Total Liabilities                                  35,140,361          64,457,030
                                                     ------------        ------------

Stockholders' equity:
---------------------
Common stock                                           16,648,437          13,814,089
Paid in Capital                                                             1,431,142
Convertible preferred stock                                                         -
Accumulated deficit (Note 19)                         (14,424,073)         (5,883,874)
                                                     ------------        ------------
    Total stockholders' equity                          2,224,364           9,361,357
                                                     ------------        ------------

Total Liabilities and Stockholders' Equity           $ 37,364,725        $ 73,818,387
                                                     ============        ============
</TABLE>

See accompanying notes.

                                   26
<PAGE>
TRI-NATIONAL DEVELOPMENT CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
AND CHANGES IN RETAINED EARNINGS


<TABLE>
<CAPTION>
                                                                Year Ended
                                                      --------------------------------
                                                      April 30, 01        April 30, 00
                                                      ------------        ------------
<S>                                                  <C>                 <C>
Revenues:
---------

  Revenues                                           $     12,060        $    194,579
                                                     ------------        ------------

Operating Expenses:
-------------------

  Corporate note expense (Excluding interest)              (7,056)          2,271,959
  Consulting fees                                         286,608             317,875
  Sales and marketing                                      94,428             478,011
  Legal, accounting and insurance                         153,634             248,696
  Interest expense                                      1,421,645           1,298,806
  General and administrative                              783,421           1,571,391
                                                     ------------        ------------
    Total operating expenses                            2,732,680           6,186,738

                                                     ------------        ------------
Loss from Operations                                   (2,720,620)         (5,992,159)

Other Expenses and Losses
-------------------------
  Write-down of Investments                            (3,560,660)           (112,252)
  Write-down of Marketable Securities                  (1,310,979)                  -
  Judgment Losses                                        (947,940)
  Loss on sale of securities                                    -          (1,251,978)
                                                     ------------        ------------

Loss before taxes                                      (8,540,199)         (7,356,388)

less:income tax                                                 -                   -

Extraordinary items - net of tax                                -           7,889,017

                                                     ------------        ------------
Net income (loss)                                      (8,540,199)            532,629

Accumulated Deficit, beginning                         (5,883,874)         (6,416,502)

                                                     ------------        ------------
Accumulated Deficit, ending                          $(14,424,073)       $ (5,883,874)
                                                     ============        ============

Earnings (Loss) per share-fully diluted              $     (0.205)       $      0.015

Earnings per share-fully diluted
 (Extraordinary item)                                $          -        $       0.23
</TABLE>



See accompanying notes.

                                   27
<PAGE>
TRI-NATIONAL DEVELOPMENT CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS


<TABLE>
<CAPTION>
                                                                Year Ended
                                                      --------------------------------
                                                      April 30, 01        April 30, 00
                                                      ------------        ------------
<S>                                                  <C>                 <C>
Cash flows from operating activities
------------------------------------
  Net cash loss from operations                      $ (2,225,652)       $ (3,449,062)
  Accounts receivable                                     147,500             111,875
  Accounts Payable                                              -             (22,597)
                                                     ------------        ------------
      Net cash from operating activities               (2,078,152)         (3,359,784)
                                                     ------------        ------------

Cash flows from Investing activities
------------------------------------
  Furniture and Equipment                                                      25,687
  Alpine Gardens East                                    (365,954)             (5,669)
  MRI Medical Diagnostics                                  18,184               6,453
  Assisted Living-Youngtown                                     -          (4,862,054)
  Assisted Living-Other Projects                        1,942,898          (1,933,095)
  NetRom Convertible Preferred Stock                            -             455,228
  Hills of Bajamar                                       (708,852)            (51,234)
  Plaza Rosarito                                         (436,649)         (8,546,694)
  Portal Del Mar                                                -          (1,384,232)
  Hall of Fame Fitness Center Building                          -                (150)
  International Health Network                                  -               1,166
  Capitalized equipment lease                                   -             (70,810)
  Plaza Resort Timeshares                                  (3,416)         (1,290,541)
  El Mirador                                              (50,000)
  Restricted cash - build out of Youngtown                      -          (5,126,879)
  Other Assets                                            (85,830)            (11,888)
                                                     ------------        ------------
      Net Cash used by investing activities               310,381         (22,794,712)
                                                     ------------        ------------

Cash flows from financing activities
------------------------------------
  Notes and Loans Payable                                (538,402)         25,682,124
  Common Stock Private Placements & Warrants            2,233,848              92,643
                                                     ------------        ------------
      Net Cash provided by financing activities         1,695,446          25,774,767
                                                     ------------        ------------


      Net increase (decrease) in cash                     (72,325)           (379,729)
      Cash at beginning of period                          81,294             461,023
                                                     ------------        ------------
      Cash at end of period                          $      8,969        $     81,294
                                                     ============        ============
</TABLE>







See accompanying notes.

                                   28
<PAGE>
                     TRI-NATIONAL DEVELOPMENT CORP.
                    NOTES TO THE FINANCIAL STATEMENTS
              FOR THE YEAR ENDING APRIL 30, 2001 (Audited)


NOTE 1.   DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT
          ACCOUNTING POLICIES

ORGANIZATION AND BUSINESS ACTIVITY

Tri-National Development Corp. ("TND" or the "Company") is a multi-faceted
international real estate development, sales and management company,
publicly traded under the symbol "TNAV" on the NASDAQ OTC BB and under the
symbol "TND" on the Hamburg Stock Exchange and the Frankfurt Stock
Exchange.  The Company's development efforts are focused in four major
areas: residential development, resort properties, commercial development
and senior and assisted living facilities.

The Company was incorporated on July 31, 1979 as Rocket Energy Resources
Ltd. under the laws of the Province of British Columbia, Canada by
registration of its Memorandum and Articles. The Company changed its name
to MRI Medical Technologies, Inc. in April of 1989.  On December 7, 1992,
the Company changed its name to Tri-National Development Corp. and
recapitalized on the basis of five (5) common shares of MRI Medical
Technologies, Inc. for one (1) common share of Tri-National Development
Corp.  In January of 1997, the Shareholders approved a special resolution
to change the corporate domicile from Vancouver, B.C. to the state of
Wyoming.  On February 24, 1997, the Company's Articles of Continuation were
accepted by the state of Wyoming and it is now incorporated in good
standing under the laws of the State of Wyoming.  The Company maintains its
executive offices in San Diego, California at 480 Camino Del Rio S. in
Suite 140 and its telephone number is 619-718-6370.

PRINCIPLES OF CONSOLIDATION

The consolidated financial statements include the accounts of Greater San
Diego Imaging Center, a 100% owned subsidiary, Tri-National Holdings, S.A.
de C.V., a 60% owned subsidiary, Planificacion Desarrollos de Jayay, SA de
CV, a 100% owned subsidiary, Inmobilaria Plaza Baja California, S.A., a
100% owned subsidiary, and Alpine Gardens East, Inc., a 51% owned
subsidiary.  All material intercompany accounts and transactions have been
eliminated in the consolidation.

EARNINGS PER SHARE

Primary earnings per share have been computed based on the weighted average
number of shares and equivalent shares outstanding during each period.  The
dilutive effect of stock options and warrants has been considered in the
computation of equivalent shares and is included from the respective dates
of issuance.

The fully diluted computation is based on the number of shares for the year
ending April 30, 2000 and 2001.  The computation contemplates the dilutive
effects of common stock equivalent shares as well as conversion of the
convertible preferred stock.

Since the date of issuance of the warrants and options, both primary and
fully diluted earnings per share computations limit the assumption of the
repurchase of treasury shares to a maximum of 20% of the outstanding shares
of the Company.

In prior quarters, the Company had inadvertently included common stock
issued as collateral for loans in the total issued and outstanding.  In the
current quarter and year end, the Company has made the proper calculations
and deducted common shares issued as collateral from the total issued and
outstanding.

                                   29
<PAGE>
FURNITURE AND EQUIPMENT

Furniture and equipment are stated at cost and depreciated over the
estimated useful lives of the assets (three to five years) using the
straight line method.

NOTE 2.   CITIZENS BUSINESS BANK JUDGMENT RECEIVABLE

In March 1992, the Company advanced $383,064 to MRI Medical Diagnostics,
Inc. for a joint venture interest in its subsidiary, MRI Grand Terrace,
Inc., a California corporation, to enable it to acquire a retirement hotel
located in Grand Terrace, California.  In addition to the joint venture
interest, the loan was evidenced by a 15% note receivable from MRI Medical
Diagnostics, Inc. and a second trust deed and an assignment of rents from
MRI Grand Terrace, Inc..  On March 22, 1993, MRI Grand Terrace, Inc. filed
a complaint against Chino Valley Bank, now known as Citizens Business Bank
(AMEX:CVB), as a result of the purchase of the residential retirement hotel
in Grand Terrace from the Chino Valley Bank.  MRI Grand Terrace, Inc.
claimed that the sellers of the property (Chino Valley Bank) had failed to
disclose that the property's parking lot encroached on the property of the
adjacent parcel of land. Contrary to the bank's representations, the
Conditional Use Permit (CUP) under which the hotel was operating was in
violation, which restricted the ability of TND and MRI Grand Terrace, Inc.
to operate, refinance or sell the facility.  MRI Grand Terrace, Inc.
stopped making mortgage payments to the mortgage holder (the same Chino
Valley Bank), which then filed a Notice of Default as an initial step to
foreclosure on the property.  MRI Grand Terrace, Inc. then sought
Bankruptcy protection in July of 1993, and was ultimately dismissed from
Bankruptcy in May of 1995.  The Chino Valley Bank subsequently sold the
property in foreclosure to itself.  TND filed it's own action against the
Chino Valley Bank in early 1995, claiming that it was defrauded and
misrepresented when it advanced the $383,064 for the closing in 1992.  The
Company purchased the stock of MRI Grand Terrace, Inc., as described in
Note 4 to these financial statements, in an effort to control both
lawsuits.  As a result of the uncertainty of the final results of the
lawsuits, the Company previously wrote off the investment.  In May of 1998,
TND and MRI Grand rrace, Inc. received judgments in their favor for fraud,
intentional misrepresentation and deceit/negligent misrepresentation in the
Superior Court of San Bernardino, California. TND and MRI Grand Terrace,
Inc. received judgments totaling almost $5 million dollars, including
punitive and compensatory damages, plus pre-trial interest.  Beginning May
7th, 1998 the $5 million judgment began accruing, post judgment interest of
10% or $1,400 per day until the full award is paid.  A 35% portion of the
award is due to the Company's attorney.  The attorneys, however, filed for
recovery of those fees as an additional award that was heard and approved
September 25, 1998. On December 3, 1998, the court awarded the Company an
additional $185,000 in legal fees.

The bank filed its appeal on June 16, 1999 and we filed our answer to their
appeal September 16 1999, with oral arguments held on September 6, 2000.
The Appellate Court came back with a recommendation for a retrial based on
inconsistent verdicts in the first trial.   This gave Tri-National the
right to cross appeal.   However, we decided not to exercise this right on
the basis of the additional damages we believe we could show in the second
trial that were not permitted in the first trial.  Currently, the court has
ordered the case to arbitration prior to scheduling the second trial.  Due
to uncertainty of arbitration and the outcome of the second trial, the
Company has written off the original judgment.

NOTE 3.   NETROM, INC. CONVERTIBLE PREFERRED STOCK

In January of 1998, the Company, on behalf of its wholly-owned Mexican
subsidiary, Planificacion y Desarrollo Regional Jatay, S.A. de C.V., sold
50 acres of its Hills of Bajamar property to NetRom, Inc., a California
publicly traded corporation for $60,000 per acre, for a total purchase
price of $3,000,000, plus construction and management contracts on said 50
acres.

NetRom, Inc. delivered to Tri-National Development Corp. at closing,
1,000,000 shares of its Preferred Convertible stock at a value of $3.00 per
share for a total value of $3,000,000.  The preferred stock accumulated
interest at a rate of 15% per annum and was to be convertible into common
stock at $3.00 per share or market price for the 10 day average prior to
the date of conversion, whichever is less, but in no event less than $1.50
per share.  The conversion date was at the option of Tri-National
Development Corp.,

                                   30
<PAGE>
however, no sooner than 12 months from the date of closing and in no case
later than 15 days after the common stock of NetRom, Inc. trades at or
above $4.00 per share for a period of thirty consecutive days.

Additionally, NetRom, Inc. provided TND warrants to purchase 1,000,000
common shares at a price of $1.25 per share, presumed that NetRom, Inc.
would achieve its stated projection of $.31 per share in earnings for the
year ending December 31, 1998.  In the event that NetRom, Inc. fell below
the $.31 per share earnings projection, but no lower than $.21 in earnings
for that period, then the warrant price would fall to $1.00 per share.
Further, if the earnings fell to between $.11 and $.21, then the option
price would be reduced to $.75 per share and in the event the earnings fell
below $.11 per share, the option price would be reduced to $.50 per share.
The price and terms for the property were based on arms length negotiations
between the parties and was approved by the Board of Directors of TND and
the shareholders of NetRom, Inc. at their Annual Meeting of Shareholders,
held on January 19, 1998.

In April of 1999, the Company converted the 1,000,000 shares of Netrom,
Inc. preferred shares to 2,320,345 shares of restricted common shares and
released for sale shares within the volume limitations pursuant to Rule
144.  As of April 30, 2001, the Company has sold 1,820,345 shares at an
average price of approximately $.30.  Current NetRom, Inc. management is in
the process of renegotiating this contract.

NOTE 4.   VIPER NETWORKS, INC. (FORMERLY TAIG VENTURES, INC.) PREFERRED
          CONVERTIBLE STOCK

In June of 1998, the Company, on behalf of its wholly-owned Mexican
subsidiary, Planificacion y Desarrollo Regional Jatay, S.A. de C.V., a
Mexican corporation, sold 50 acres of its Hills of Bajamar property to Taig
Ventures, Inc., a Utah telecommunications corporation for $60,000 per acre,
for a total purchase price of $3,000,000, plus construction and management
contracts on said 50 acres.

Taig Ventures, Inc. delivered to Tri-National Development Corp. at closing,
3,000,000 shares of its Convertible Preferred Non-Voting Class B shares at
a value of $1.00 per share for a total value of $3,000,000.  The preferred
stock accumulates interest at a rate of 15% per annum and will be
convertible into common stock at $1.00 per share or market price for the 10
day average prior to the date of conversion, whichever is less, but in no
event less than $.75 per share.  The conversion date is at the option of
Tri-National Development Corp., however, no sooner than 12 months from the
date of closing and in no case later than 15 days after the common stock of
Taig Ventures, Inc. trades at or above $2.00 per share for a period of
thirty consecutive days.

Additionally, Taig Ventures, Inc. provided TND warrants to purchase
1,000,000 common shares at a price of $3.00 per share, presuming that
Taig's common shares are trading at $4.00 or higher; $2.00 per shares if
Taig's common shares are trading between $3.00 and $4.00 per share; $1.25
per share if Taig's common shares are trading between $2.00 and $3.00; and
in no event less than $.75.  The price and terms for the property are based
on arms length negotiations between the parties and was approved by the
Board of Directors of TND and the shareholders of Taig Ventures, Inc. at
their Annual Meeting of Shareholders, held on April 30, 1999.

On November 15, 2000, Taig Ventures, Inc. executed a definitive Securities
Purchase Agreement and Plan of Reorganization (the "Purchase Agreement")
pursuant to which Taig Ventures, Inc., acquired 100% of the outstanding
common shares of Viper Networks, Inc. ("VIPER-CA"), a California
corporation, in exchange for 36,000,000 common shares of Taig Ventures,
Inc..

The acquisition was effected through a Plan of Reorganization (the
"Reorganization"), with Viper Networks, Inc. as the surviving corporation.
Upon consummation of the Purchase Agreement, Reorganization and approval by
the shareholders and the Board of Directors of Taig Ventures, Inc. at an
Extraordinary Meeting of the Shareholders held December 29, 2000, (1) the
name of the Company was changed to Viper Networks, Inc., leaving VIPER-CA,
as a wholly-owned subsidiary and (2) a reverse split of the common stock
was effected on a 1 for 12 basis.  The preferred shares were not affected
by the reverse split of the common stock.

                                   31
<PAGE>
The Company is confident Viper Networks, Inc. will complete its filings
with the U.S. Securities and Exchange Commission and make application to
the NASD or another stock exchange for the public trading of their common
stock, there can be no assurances that they will be successful in their
efforts.  As such, the Company has reduced the value of the preferred stock
on its balance sheet from $3,000,000 to $1,150,000.

NOTE 5.   MRI MEDICAL DIAGNOSTICS, INC.

In 1992 the Company sold its wholly owned subsidiary, MRI Medical
Diagnostics Inc., a California corporation to Petro-Global, Inc., a
Colorado publicly traded corporation.  In return, the Company received
6,000,000 restricted common shares of the purchaser, Petro-Global, Inc.,
plus certain mineral properties and leases.  In 1992, the mineral
properties were written down to a nil value in the records and the name was
changed from Petro-Global, Inc. to MRI Medical Diagnostics, Inc.(MRI-Med).
MRI-Med filed for Chapter 11 bankruptcy protection in July 1993 in
conjunction with the Chino Valley Bank action (see Note 2).  After
dividends in kind totaling 2,000,000 shares in 1992 and 1993 to TND
shareholders, and due to uncertainty in the underlying value of the
remaining 4,000,000 MRI-Med shares held by the Company, the carrying cost
of these shares was written-off in 1994.  Tri-National Development Corp.
filed a reorganization plan on behalf of MRI-Med in August 1995 and, in
settlement of the litigation described in Note (2), the Company received
5,900,000 shares of MRI-Med at a deemed value of $0.50 per share, ordered
by the U.S. Federal Bankruptcy Court, plus 1,400,000 shares for
reimbursement of current expenses.  In July of 1997, MRI-Med recapitalized
on a 1 for 5 basis.  The investment is recorded in the books at a cost of
$496,994.  The Company declared and paid a stock dividend of 750,000 shares
of MRI-Med to TND shareholders of record August 31, 1997 and declared a
second stock dividend of an additional 750,000 to TND shareholders of
record January 27, 1998. After the stock dividends paid to TND shareholders
in 1992, 1993, 1997 and 1998, and shares sold to finance the
reorganization, the Company retained approximately 415,000 post-split
shares of MRI-Med. In September 2000, MRI-Med completed a reverse merger
with HomeZipr, Inc., a Delaware corporation, specializing in providing
residential mortgages.  MRI-Med subsequently completed a name change to
HomeZipr, Inc. and recapitalized its common stock on a 1 for 18 basis.
HomeZipr, Inc. now trades on the NASDAQ OTC BB under the symbol, "HZPR".

NOTE 6.   REAL ESTATE DEVELOPMENT PROPERTY: HILLS OF BAJAMAR

The Hills of Bajamar property is a 2,500-acre parcel located in the
Municipality of Ensenada, on the Pacific Ocean side of Baja California,
Mexico, roughly 50 miles south of San Diego, California. The purchase
contract completed in 1992 through the Company's wholly-owned Mexican
subsidiary, Planificacion Desarollos de Jatay, S.A. de C.V.
("Planificacion"), provides for an overall purchase price of $6,000,000 for
the 2,500 acres ($2,400 per acre or $.60 per sq. meter).   The property is
being purchased on a gradual basis in 247-acre increments at $600,000
apiece.  In September 1998, the Company, in accordance with its contract,
had taken title to its second 247-acre parcel and in September 2000, in
accordance with its contract, the Company had taken title to its third 247-
acre parcel.  This last 247-acre parcel gives the Company title to a total
of approximately 750 acres with construction rights to all 2,500 acres and
places the unpaid balance of roughly 1,750 acres in trust with Banco Ixe.
Title to additional acres will be released to the Company as annual
payments are made to the seller. In the event the Company is unable to make
its scheduled annual payments, the Company maintains ownership of any the
property already paid for, while  the unpaid property in trust is subject
to cancellation and the property will be subject to refinancing under which
the Company may be required to pay a significantly higher price per acre.
Balance owing on the remaining 1,750 acres is $4,200,000 at $600,000
annually with no interest until 2003.

NOTE 7.   PLAZAS RESORT TIMESHARES AND COMMERCIAL PROPERTY

In December of 1996, the Company entered into an acquisition agreement with
Valcas Internacional, S.A., to acquire 100% of the stock of Inmobilaria
Plaza Baja California, S.A., a Mexican corporation, including its existing
assets, which include 16+ developed acres of ocean front land within the
Bajamar resort with plans for 328 vacation ownership (timeshare) units for
$13,079,055, payable with notes for $9,079,055 and 1,000,000 Class B Series
B Convertible Preferred shares with a value of $4.00 per share(See "NOTES
PAYABLE"). During the Company's year end April 30, 2000, the Company paid
$200,000 additional as it modified the original contract and converted the
Class B Series B Preferred shares to common.

                                   32
<PAGE>
NOTE 8.   ALPINE GARDENS EAST, INC.

Alpine Gardens East, Inc. ("AGE") is a Nevada corporation created to
acquire and develop senior and assisted living facilities primarily in the
S.W. United States. In January of 1998, the Company acquired 51% of this
corporation for a combination of $270,500 in cash and 864,500 shares of
Class B Series B preferred stock.  The Class B Series B preferred stock was
converted to 864,500 common shares during year end April 30, 2000.  AGE
facilities are expected to combine housing, minimum health care and
personal support for elderly residents who need assistance with certain
activities of daily living, without the need of a complete nursing
facility.  The Company has reduced the value of this investment to
$2,373,823, as it no longer maintains a majority interest in the Youngtown
Gardens (See Note 9).

NOTE 9.   ASSISTED LIVING - YOUNGTOWN

In June of 1998, AGE closed on a 5.5 acre developed parcel to build its
first independent and assisted living project, known as Youngtown Gardens,
in Youngtown, Arizona, just north of Phoenix and adjacent to Sun City.  In
July of 1999, a formal ground breaking took place with the Mayor of
Youngtown and the Company for the recently finished construction on two
models. The project was completed with a $10,500,000 construction loan from
Vestin Mortgage (formerly Del Mar Mortgage).  This facility includes 40
two-bedroom units, 50 one-bedroom units and 36 units reserved for Alzheimer
and Dementia residents.

To reduce its liability during the fourth quarter ending April 30, 2001,
the Company successfully completed an assignment of the $13,000,000
construction loan and accrued interest and penalties to its minority
partner in this project in exchange for a reduced participation of 20% of
the future net profits after debt service

NOTE 10.  ASSISTED LIVING - OTHER LOCATIONS IN PROCESS

In October of 1998, the Company entered into a purchase agreement to
acquire 3.66 acres of undeveloped property overlooking the Pacific Ocean in
Carlsbad, California for $2,900,000, with a $125,000 down payment.  The
Company, through its majority owned subsidiary, Alpine Gardens East,
planned to develop and operate this assisted living facility, with an
Alzheimer's care component.  As of April 30, 2001, the Company had paid a
total of $125,000 in connection with this investment, prior to forgoing its
rights to complete the acquisition due to limited available funds.

In November of 1999, the Company, through a joint venture agreement, closed
and completed escrow to acquire a fully-zoned 22-acre parcel of real
property with plans, located in Temecula, California for $4,300,000 for a
combination of cash and notes.  During the fourth quarter ending April 30,
2001, the joint venture filed for Chapter 11 Reorganization to receive the
time required to close on the necessary financing to pay off the bridge
loan provide the construction financing.  The joint venture has plans to
develop a fully-inclusive senior community that will offer medical
facilities, Alzheimer's and dementia care, independent and assisted living
and senior single family housing.  The joint venture named this project,
The Arbors at Temecula, and plans to start construction in late- 2001.

In April of 1999, the Company acquired 2.39 acres of undeveloped land in
San Marcos, California for $800,000 (See "Legal Proceedings").  The Company
plans to develop a 60-unit Alzheimer's care facility.

NOTE 11.  PLAZA ROSARITO

On November 20, 1998, Tri-National Holdings, S.A. de C.V., a Mexican
subsidiary, which is a 50/50 after cost of money joint ventrue with
Bersain Guttierrez Zenteno, a Mexican national, purchased the Plaza
San Fernando from Banco Bital with a $1 million cash down payment.
In July of 1999, Capital Trust Inc. of New York provided the
remaining $8 million necessary to close and complete the escrow.
In March of 2001, the Company received a 60-day forbearance from
Capital Trust, Inc. for the repayment of the $8 million and has
subsequently defaulted (See "LEGAL PROCEEDINGS").  Plaza San Fernando's
appraised value is in excess of $23 million.  Fonatur, the tourism arm of
the Mexican government, has approved a $38 million

                                   33
<PAGE>
loan for the construction of a hotel and convention center on a portion of
the property.  The Company intends to joint venture this component with a
major U.S. hotel operator.

The Company has renamed this property, Plaza Rosarito.  It is located in
the heart of Rosarito Beach in Baja California, Mexico, minutes from the
20th Century fox film studio where "Titanic" was filmed and down the street
from the famous Rosarito Beach Hotel.  Plaza Rosarito includes 15 acres of
undeveloped oceanfront land zoned for the 450-room hotel and convention
center, 18 acres of developed land, including 187,500 square feet of
existing steel, concrete and marble commercial space, 42 developed
residential lots and a 80% complete 36-unit condominium complex.  The
Company plans to sell the 30 condominiums at $100,000 each with a 20% down
payment and the balance at 11% over 10 years.  The Company's initial plans
are to sell the 32 residential lots at approximately $30,000 each with a
20% down payment and the balance at 11% over 10 years.  The Company has
initial plans and will start to execute multi-year, triple- net leases from
established preliminary commitments for approximately 100,000 square feet
of the existing commercial property at up to $2.00 per square foot per
month from U.S. and Mexican retail operations, consistent with comparable
lease rates in the area, which upon full lease up should generate in excess
of $4 million annually and become one of the most significant shopping
centers in Baja California. The Company has already received letters of
interest for roughly 60% of the 187,500 square foot shopping center.
Additionally, the Company received approval to sell the commercial space as
condominiums at up to $200 per square foot, with a 30% down payment and the
balance at 14% over 5 years.  This allows the Company an additional exit
vehicle if desired and an alternative to leasing.  The down payments would
be deposited into an escrow account, until the Company completes
approximately $1,500,000 in improvements, of which approximately $800,000
has already been completed. Upon full sell out, the projected gross
revenues generated from the property could be in excess of $35 million,
with down payments over $11 million and annual mortgage payments of roughly
$5 million.

NOTE 12.  PORTAL DEL MAR CONDOMINIUMS

In February of 1999, the Company, through a Mexican subsidiary, signed
purchase agreements and provided the $500,000 down payment to acquire
Portal Del Mar for $1,250,000.  Portal Del Mar is a 123-unit, 2 and 3-
bedroom condominium development on 6 acres overlooking the Pacific Ocean in
Baja California, Mexico, just south of Rosarito Beach. The 126 ocean view
condominiums are in various stages of completion, with approximately 46
completed. The Company is seeking a financing commitment for $7.5 million
to complete the remaining 80 units, add a clubhouse, 3 tennis courts, 2
pools and a spa with beach access and palapas.  Each condo completed is
intended to include an oversize terrace with ocean views.  Comparable
condominiums located across the road are selling in the $250,000 range.
The Company arranged financing for the remaining $750,000 of acquisition
cost and closed escrow on this property in June of 1999 and intends to
initially operate this property as a hotel and eventually begin timeshare
sales in late 2001.  In March of 2001, the lender that provided the
remaining $750,000 to close escrow, converted their loan to a 33 1/3%
equity position in the project.

The Company expects to start timeshare sales at $5,000 per week with a
$1,500 down payment and the balance at 12% over 7 years.  Upon full sell
out of the 6,222 weeks at an average price of $5,000, the projected gross
revenues would exceed $31 million with down payments of $9 million and
annual mortgage payments of approximately $2.5 million.

NOTE 13.  HALL OF FAME FITNESS CENTER

In February of 1999, the Company, through a Mexican subsidiary, signed
purchase agreements and provided a non-refundable $50,000 down payment to
acquire the former Banco Atlantico building for $950,000.  The former Banco
Atlantico building is a 20,000 square foot, 2-story commercial building in
the heart of the banking district in Tijuana, Mexico.  With a primary focus
over the last year of restructuring the $8 million loan with Capital Trust,
the Company was unable to provide the necessary funds to close this escrow
and has subsequently written off the down payment.

                                   34
<PAGE>
NOTE 14.  EL MIRADOR

During the year ended April 30, 2001, the Company signed agreements to
acquire a 20,000 square foot commercial building situated a 6-acre parcel
on a bluff 1,000 feet above sea level overlooking the Pacific Ocean with
some of the most dramatic views in Baja California, for a total purchase
price of $450,000.  Mirador is located directly south of the Bajamar Ocean
Front Hotel and Golf Resort and adjacent to the south rim of the Company's
Hills of Bajamar property.  The Company plans to utilize the commercial
space as a sales office for the Vinas de Bajamar residential lots, with
long-term plans to develop a 100-room hotel.

NOTE 15.  INTERNATIONAL HEALTH NETWORKS, INC.

International Health Networks, (IHN) is Nevada corporation and a majority-
owned non-active of the Company.  IHN is intended to be a multitude of U.S.
medical services designed for Mexico that the Company has envisioned for
the past several years as the magnet for attracting the retiree market in
Baja California, Mexico.

The primary focus for IHN will be a planned medical campus, to be built on
Hills of Bajamar property.  The medical campus was originally conceived for
by IHN in 1997 and called for 150 acres at the south end of the property.
The Company would retain the construction rights to build all required
facilities on the combined 250 acres and maintain a property management
contract. The campus would include an acute care hospital associated with
a recognized U.S. medical provider, a medical school complete with
dormitories, class rooms and auditorium, medical exhibition center, R & D
facilities for pharmaceutical industry and facilities for long-term care
combined with anti-aging and wellness programs. This campus would be
important not only to the region, but to the Company's desire to create a
retirement mecca on its properties.

NOTE 16.  CASH IN BANKS - RESTRICTED

The restricted cash in banks is funds left over from the $8 million loan
from Capital Trust, Inc. that the Company did not have signature authority.
The funds have since been recovered  by the receiver (See "LEGAL
PROCEEDINGS").

NOTE 17.  LOANS PAYABLE SHORT-TERM

The Company has made private offerings of its securities, including its
common stock and nine-month corporate notes ("Notes"), in reliance on
exemptions from the registration requirements of the Securities Act of 1933
and applicable state securities laws. The Company became the subject of a
cease and desist order issued by the Wisconsin Securities Division, based
on sales of its Notes to Wisconsin residents.  The nine-month promissory
note program was brought to the Company by the investment banking firm,
Johnson, Richards & Company, Inc., and the Company relied on
representations made by that firm that a federal exemption was available
under the right terms and conditions.  With the proceeds being used for
specific projects etc., the Notes were considered commercial paper and
exempt from securities registration.  Although the Company believes it
properly met the criteria for exemption, because it used the proceeds to
acquire real estate and is arguing that the sales met the requirements of
the Wisconsin private offering exemption, it has paid off all of the Notes
due in Wisconsin.  The Company has also agreed to a voluntary cease and
desist order in California and North Carolina with respect to sales of
those same Notes in that state.  The California Department of Corporations
and the North Carolina Department of Corporations both required the Company
to offer rescission to investors in that offering and all California and
North Carolina investors accepted that rescission offer.  This requires the
Company to repay all California and North Carolina investors their
principal only, which the Company has already started paying.  The
California order does not prohibit future exempt or qualified sales of the
Company's securities in California.

Additionally, the Louisiana Commissioner of Securities and Connecticut
Department of Banking are currently examining the sales of the Notes to its
residents.  In the event that it is found that the sales did not meet the
requirements of applicable exemptions from registration, it is the position
that the Company must refund all investments in the Notes to Louisiana and
Connecticut purchasers.  The Company issued approximately $1,500,000 in
Notes to Louisiana investors.  The Company has already started to pay off
Notes due in

                                   35
<PAGE>
Louisiana and intends to meet the balance of the refund obligation with a
combination of revenues generated by Plaza Rosarito, equity and/or debt
financing and the leveraging of portions of its real estate portfolio.
There can be no absolute assurance, however, that the violations will in
fact be cured in this manner and therefore it is possible that further
remedial action may be required.

Because the Company has relied on federal and state exemptions for
placement of its Notes, other states may find that the Company did not
comply with the various blue sky exemptions. The consequences of any such
violations may vary from state to state, but could include the requirement
that the Company rescind some or all of the sales in such states at the
request of the affected subscribers and prepare formal registration
statements and/or other documentation at the request of the securities
regulators. Additionally, the Company and/or its officers may be subject to
civil and/or criminal fines or penalties including, but not limited to, a
sanction with regard to the Company's ability to make any public offering
in the future.  It is believed that the Company can continue its operations
through its development of cash and revenues from its ongoing operations
despite the rescission offer in California and potential refund to
Louisiana investors.

Short-term notes payable at April 30, 2001, consisted of the following:

    Corporate Notes payable
       9-month notes, interest at 10%,
       currently due                            $11,294,331

    Note payable to Capital Trust
       Guaranteed by 3 officers and
       Directors and a first trust deed on
       Plaza Rosarito, interest at 12%
       due November 21, 2001                      8,432,183

    Notes payable, short term
       interest at 10%, due January 31, 2001      1,630,955
                                                -----------

TOTAL                                           $21,357,469
                                                ===========

NOTE 18. LONG-TERM NOTES PAYABLE

Long-term notes payable at April 30, 2001, consisted of the following:

    Note payable and cash payable to
       DUBSCA upon closing of vacation
       ownership (timeshare) project            $ 9,079,055
                                                -----------

TOTAL                                           $ 9,079,055
                                                ===========

NOTE 20.  PROPERTY, FURNITURE AND EQUIPMENT

Furniture and equipment consists of the following:

                                                April 30, 2001
                                                --------------


     Furniture and equipment                    $33,080
     Less accumulated depreciation              (33,080)
                                                --------
                                                $      0
                                                ========

                                   36
<PAGE>
NOTE 21.  LEASES

The Company leases one office facility in San Diego, California and one in
Ensenada, Baja California under operating leases which expire in 2001 and
the year 2002, respectively.  The leases generally require the Company to
pay all maintenance, insurance and property taxes and are subject to
certain minimum escalation provisions.  The Company also leases autos,
equipment and computers.

Future minimum operating lease payments as of April 30, 2001 are as
follows:

     2001                                       $210,700
     2002                                        252,840
                                                --------
                                                $463,540
                                                ========

NOTE 22.  GOING CONCERN

We require significant additional capital to restructure the Company's
existing debt, build out and operate planned properties and for general
working capital needs. Most critically, the $8,300,000 judgment held
against the Company and several of its officers and directors by Capital
Trust, Inc. and the $12,000,000 in nine-month corporate notes must both be
restructured.  We also require additional capital to invest in any new
opportunities. Capital markets have recently been volatile and uncertain.
These markets may not improve, and we may not be able to access these
markets to raise additional capital. If we fail to obtain required new
financing, the failure would have a materially adverse effect on our
business and our financial condition. For example, if we are unable to
access capital markets, we may have to restrict our activities or sell our
interests, or in one or more of our subsidiaries or other ventures earlier
than planned or at a "distressed sale" price.

The Company experienced net losses of approximately $8,540,199 in the year
ended April 30, 2001, net income of $532,629 in the year ended April 30,
2000 and a net loss of $2,906,671 for the year ended April 30, 1999.
Losses are likely to be significant for at least the next year to possibly
two years as we restructure our debt and continue to invest additional
funds into existing projects to bring them to cash flow, as well as
investing in new projects. We may not generate profits in the short term or
at all. If we fail to achieve profitability, that failure could have a
negative effect on the market value of our common stock.

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

None.









                                   37
<PAGE>
                                PART III

ITEM 9.        DIRECTORS AND EXECUTIVE OFFICERS OF REGISTRANT

INDEMNIFICATION OF DIRECTORS AND OFFICERS

The By-Laws of the Company provide for indemnification of officers and
directors.  The specific provision of the By-Laws related to such
indemnification is as follows:

PART 19

INDEMNITY AND PROTECTION
DIRECTORS, OFFICERS AND EMPLOYEES

19.1 Subject to the provisions of the Company Act, the Directors shall
cause the Company to indemnify a Director or former Director of the Company
and the Directors may cause the Company to the Company is or was a
shareholder the heirs or personal representatives of any such person
against all costs, charges and judgment, actually and reasonably incurred
by him or them including an amount paid to settle an action or satisfy a
judgement in a civil, criminal or administrative action or proceeding to
which he is or they are made a party by reason of his being or having been
a Director of the Company or a director of any such corporation.  Each
Director of the Company on being elected or appointed shall be deemed to
have contracted with the Company on the terms of the foregoing indemnity.

19.2 Subject to the provisions of the Company Act, the Directors may cause
the Company to indemnify any officer, employee or agent of the Company or
of a corporation of which the Company is or was a shareholder
(notwithstanding that he is also a Director) and the heirs or personal
representatives against all costs, charges and expenses whatsoever incurred
by him or them and resulting from his acting as of officer, employee or
agent of the Company (if he shall not be a full time employee of the
Company and notwithstanding that he is also a Director), and his heirs and
legal representatives against all costs, charges and expenses whatsoever
incurred by him or them and Secretary by the Company Act or these Articles
and each such Secretary and Assistant Secretary shall on being appointed be
deemed to have contracted with the Company on the terms of the foregoing
indemnity.

19.3 The failure of a Director or officer of the Company to comply with the
provisions of the Company Act or of the Memorandum or these Articles shall
not invalidate any indemnity to which he is entitled under this Part.

19.4 The Directors may cause the Company to purchase and maintain insurance
for the benefit of any person who is or was serving as a Director, officer,
employee or agent of any corporation of which the Company is or was a
shareholder and his heirs or personal representatives against any liability
incurred by him as such Director, officer, employee or agent.



                                   38
<PAGE>
OFFICERS AND DIRECTORS

The following table sets forth the name, age and position of each of the
persons who were serving as executive officers and directors of the Company
as of April 30, 2000.

<TABLE>
<CAPTION>
                                    POSITIONS HELD
NAME                    AGE         WITH THE CORPORATION               SINCE
----                    ---         ---------------------              -----
<S>                     <C>         <C>                                <C>
Michael A. Sunstein     59          Director, CEO &                    1989
                                    President
Gilbert Fuentes         69          Chief Financial Officer            1996
Paul G. Goss*           58          V.P. Legal Counsel, U.S.           1996
Bersain Gutierrez       44          V.P. Legal Counsel, Mexico         1998
Shane Kennedy           37          Director                           1994
Dr. Jerry Parker        64          Director and                       1996
                                    V.P. Medical Development
Jay Pasternak           44          Director                           1994
Dr. Robert Rosen        54          Director                           1989
Jason Sunstein          30          Secretary and                      1989
                                    V.P. Investor Relations
Ted Takacs              53          Director                           1994
</TABLE>

Mr. Goss provides services to the Company as required.

Set forth below is biographical information about each of the Company's
executive officers and directors.

MICHAEL A. SUNSTEIN.  Mr. Sunstein has been the Chief Executive Officer and
a Director of the Company since its founding 1989.  Prior to joining the
Company, Mr. Sunstein spent 15 years in the housing industry, primarily
with Kaufman and Broad Homes, Inc., a New York Stock Exchange listed
company, where he served as President of the Midwestern Division and acting
President of the East Coast Division.  In those capacities he was
responsible for the financial, building and delivery of approximately
$30,000,000 in housing sales annually.  He resigned from Kaufman and Broad
and started his own firm in the building and materials and single-family
home industry in Michigan, prior to moving to San Diego in 1982.

GILBERT FUENTES.  Mr. Fuentes has been the Chief Financial Officer since
1996.  He has 25 years of experience in the banking industry.  He has held
the positions of President and Chief Executive Officer, Senior Vice
President, Chief Financial Officer, Treasurer and Comptroller for multi-
billion dollar banking organizations.  He has authored several articles in
the fields of finance and cash management, as well as the 1992 and 1993
Economic Forecast of the United States and Mexico, published by the U.S.
Mexico Foundation.  Mr. Fuentes has developed innovative cash management
systems, investment strategies and strategic financial plans that resulted
in millions of dollars of incremental income for his former employers.

PAUL G. GOSS.  Mr. Goss has been a Vice President and General Counsel to
the Company since September of 1996.  Mr. Goss has been the Executive Vice
President and General Counsel for One Capital Corporation, a private
merchant bank with offices in New York and Denver since 1990.  Prior to
joining One Capital Corporation, Mr. Goss was engaged in the private
practice of law in Denver, Colorado with a concentration in real estate,
corporate and securities law.  He is a member of the Denver and Colorado
Bar Associations.  Mr. Goss has a Masters in Business Administration in
addition to his law degree from the University of Denver.

LIC. BERSAIN GUTIERREZ.  Mr. Gutierrez joined the Company in October of
1998 as V.P. Legal Counsel, Mexico and Director of Mexican Operations.  He
has been instrumental in negotiating, coordinating title  policies, surveys
and the filing and approval for Municipal zoning and permits for the
Company's real estate projects in Mexico.  Prior to joining the Company,
Mr. Gutierrez held high positions in the Secretaria de Hacienda y Credito
Publico (I.R.S. of Mexico), as well as District Attorney for the Federal
District of Mexico

                                   39
<PAGE>
City.  He also held high positions in the Procudaria de Justicia del D.F.
(the F.B.I. of Mexico).  Mr. Gutierrez graduated with honors from the law
school of Universidad Autonoma de Mexico in 1979.

SHANE KENNEDY.  Mr. Kennedy has been a Director of the Company since 1994.
Mr. Kennedy has been an insurance adjuster for the Insurance Corporation of
British Columbia since 1990 and is also President of Northern Trader
Incorporated, which is an import and export company.  He is Canadian
citizen.  Mr. Kennedy received his B.A. degree in Political Science from
the University of British Columbia.

DR. JACOB J. PARKER.  Dr. Parker has been a Director and V.P. Medical
Development of the Company since 1996.  Dr. Parker is currently Medical
Director and Director of Radiology for several MRI centers and breast
imaging centers in Northern California since 1973.  He was previously Chief
of Radiology and Nuclear Medicine at Ross General Hospital, Clinical
Professor of Radiology at the University of California, Irvine, and
Instructor of Radiology at the University of Southern California Medical
Center from 1970 to 1988.  Dr.Parker received his M.D. from the University
of Manitoba, Canada in 1962.

JAY PASTERNAK.  Mr. Pasternak has been a Director of the Company since
1994.  He is a Canadian citizen who has spent the last ten years in the
private practice of mental health counseling at the Denwood Institute in
Toronto, Canada, Ontario Hydro, Futures Ontario and the Hubar Memorial
Hospital, all Canadian government facilities.  Mr. Pasternak is a C.L.S.
graduate from McMaster University in Hamilton, Ontario (1994) and a Human
Services Counselor graduate from George Brown University 1996.

DR. ROBERT R. ROSEN.  Dr. Rosen has been a Director of the Company since
1989. Dr. Rosen is an opthamologist and is presently Executive Director of
MAC-IPA, a 47 physician multi-specialty IPA in Montgomery County,
Tennessee, where he is responsible for policy, long range strategic
planning, physician recruitment, contracting and utilization review.  From
1993 to 1995 he was Medical Director of the MidSouth Eye Center in
Clarksville, Tennessee, a private practice, and Medical Director of EYE PA,
a nationwide integrated delivery system for eyecare, a subsidiary of
EYECORP/PRG.  From 1992 to 1993 he was Associate Medical Director of East
County Physician Medical Group (IPA) in San Diego, California and from 1977
to 1993 he was President and Medical Director of Eye Care Professionals in
San Diego, a single specialty medical corporation.  He was also Medical
Director of the Pearle Eye Foundation from 1987 to 1993, a non-profit
corporation and he also served as Medical Director for Pearle Visioncare,
a California Knox-Keane HMO from 1986 until 1993. Dr. Rosen was Assistant
Clinical Professor of Opthamology at the University of California, San
Diego from 1977 until 1993.

JASON A. SUNSTEIN.  Mr. Sunstein has been Senior Vice President and
Secretary for the Company since 1989. He has been instrumental in all
aspects of financing and long-term planning for Tri-National Development
Corp. and its subsidiaries.  He attended San Diego State University where
he majored in Finance and is a licensed securities broker.  He is the son
of Michael Sunstein.

THEODORE TAKACS.  Mr. Takacs has been a Director of the Company since 1994.
Mr. Takacs is a Canadian citizen who for the last ten years has been
engaged in labor relations consulting and negotiation.  He is presently a
Constituency Assistant to the Honorable Bill Barlee in Osoyoos, British
Columbia where he also owns and operates an orchard.

ADVISORY TEAM

The Company has assembled a team of advisors to consult the Company from
time to time on various business matters.  The following are key members of
the advisory team:

DOUGLAS MORGAN.  Mr. Morgan joined the Company in 1989 as a shareholder and
in September of 1998 as a consultant for internet marketing, web design and
computer software, hardware and networking.  Mr. Morgan is a Magna Cum
Laude graduate from both Massachusetss Institute of Technology with a
Bachelors Degree and Stanford University with a Masters Degree, both in
Computer Science and Electrical Engineering.  He has over 25 years of
experience in the computer industry with an early background in
programming, design and project management with companies such as Computer
Sciences Corp., Hughes, NCR and Hewlett Packard.

                                   40
<PAGE>
DANIEL LOMAX.  Mr. Lomax has been involved with the Company in various
capacities since 1990 and most recently as President of Solymar, the
construction company contracted to build the Company's assisted living
facilities.  Mr. Lomax entered the general contracting and development
business in the State of California in 1960 with single-family homes,
remodeling, commercial projects and major shopping center tenant
improvements.  In 1975, Mr. Lomax received his BI heavy construction
license from the State of Arizona and started designing, building and
financing single-family town homes, single-family lot homes and
condominiums, exceeding 1,500 units.

LOUIS LESSER.  Mr. Lesser has been a consultant to the Company since 1991
on financing and real estate transactions.  Mr. Lesser has successfully
built, owned and operated numerous real estate companies, hotel properties
and oil and gas companies since 1935, including Chairman and President of
Louis Lesser Enterprises, Inc. of Beverly Hills, CA, which was listed on
the American Stock Exchange.  Louis Lesser Enterprises built developed and
operated over $1,000,000,000 of commercial and residential real estate
properties and over $500,000,000 of housing projects for the Army, Navy,
Air Force and Marine Corps. all over the U.S.

DAVID SONNENBLICK.  Mr. Sonnenblick has been a consultant to the Company
since 1996 on financing, real estate transactions and mergers and
acquisitions.  Mr. Sonnenblick is currently the Managing Director of the
Los Angeles office for Sonnenblick Goldman Co., a national 105-year old
investment banking firm, headquartered in New York.  Mr. Sonnenblick has
successfully closed transactions valued in excess of $1,000,000,000 on
behalf of his clients.  Mr. Sonnenblick attended the University of Denver
where he was an honors student and completed his studies at the University
of Colorado where he received a B.A. in Economics in 1982.

NORM EDWARDS.

Mr. Edwards has been a consultant to the Company since 1999 on
administration, financing and mergers and acquisitions.  Mr. Edwards has
consulted with various companies for the past 26 years in areas of
corporate development.  Mr. Edwards obtained his Bachelors of Science
degree in Business Administration from the California State Polytechnic
College in Pomona, California in 1961.  Mr. Edwards is a retired USAF Lt.
Colonel, Command Pilot.

The Company does not have a standing audit or nominating committee of its
board of directors, or committees performing similar functions.  However,
the Company plans to form such committees, as it is a requirement for
listing on most exchanges and NASDAQ.

ITEM 10.  EXECUTIVE COMPENSATION

The Company has granted stock options to members of the board of directors
in 1996, 1997, 1998 and 2000 outlined below.  Other than these stock
options, the Company does not pay compensation to its directors, nor does
it maintain any pension, retirement or other arrangement. The board of
directors for the Company held a total of eight (8) regular meetings during
its last fiscal year. All directors attended each of the meetings via
telephone conferencing.  It is anticipated that in light of the recent
litigation abuses the Board of Directors has been exposed to, the Company's
position on this non-compensation issue may in fact addresses in the coming
fiscal year.

STOCK OPTIONS GRANTED AND EXERCISED DURING THE YEAR

A total of 1,500,000 Qualified Employee Stock Options were approved
pursuant to the Tri-National Development Corp. 2000 Equity Incentive Plan
approved by the shareholders at the Annual Meeting of the Shareholders held
on December 29, 2000.  The 2000 Equity Incentive Plan expires December 29,
2010.  The 1,500,000 Qualified Employee Stock Options have not yet been
issued.

Total compensation paid to officers of the Company for its past three
fiscal years is set forth below:

                                   41
<PAGE>
                       SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
                                                        Long Term Compensation
                                                   --------------------------------
                              Annual Compensation           Awards        Payouts
                    ---------------------------------------------------------------
                                             Other             Securities
                                            Annual    Rstrctd.   Under-             All Other
Name and                                    Compe-     Stock     lying     LTIP      Compe-
Principal                                   nsation   Award(s)  Options   Payouts    nsation
Position       Year    Salary($)  Bonus($)    ($)       ($)      (#)        ($)       ($)

-------------------------------------------------------------------------------------------
<S>            <C>     <C>        <C>       <C>       <C>       <C>       <C>       <C>
Michael        1998    $120,000   $     0   $     0   $     0         0   $     0   $     0
A.             1999    $144,000   $     0   $     0   $     0         0   $     0   $     0
Sunstein,      2000    $144,000   $     0   $     0   $     0         0   $     0   $     0
CEO &
President


Gilbert        1998    $ 60,000   $     0   $     0   $     0         0   $     0   $     0
Fuentes,       1999    $ 72,000   $     0   $     0   $     0         0   $     0   $     0
CFO &          2000    $ 84,000   $     0   $     0   $     0         0   $     0   $     0
Treasurer


Paul G.        1998    $      0   $     0   $     0   $66,000         0   $     0   $     0
Goss, V.P      1999    $ 30,000   $     0   $     0   $68,250         0   $     0   $     0
& U.S.         2000    $ 36,000   $     0   $     0   $25,000         0   $     0   $     0
Counsel


Jason A.       1998    $ 60,000   $     0   $     0   $     0         0   $     0   $     0
Sunstein,      1999    $ 72,000   $     0   $     0   $     0         0   $     0   $     0
Secretary      2000    $ 84,000   $     0   $     0   $     0         0   $     0   $     0
& V.P
</TABLE>

(1)  There are seven six directors for the fiscal year ended April 30,
     2001.

(2)  Norman Edwards and Douglas Morgan of the Advisory Team received
     minimal consulting fees during the year ended April 30, 2001.

(3)  A total of 1,500,000 Qualified Employee Stock Options were approved
     pursuant to the Tri-National Development Corp. 2000 Equity Incentive
     Plan.  The 1,500,000 Qualified Employee Stock Options have not yet
     been issued.

                                   42
<PAGE>
ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth certain information regarding beneficial
ownership of the Common Stock as of April 30, 2001 (based on a total of
49,792,793 outstanding shares of Common Stock) by (1) all persons know by
the Company to own beneficially more than 5% of the common stock, (II) each
of the Company's Directors, (III) each of the Named Executive Officers, and
(IV) all executive officers and directors as a group.  Except as otherwise
indicated, the Company believes the persons named in the table have sole
voting and investment power with respect to all shares beneficially owned,
subject to community property laws where applicable.

NAME AND ADDRESS OF            SHARES BENEFICIALLY         PERCENTAGE
BENEFICIAL OWNER (1)                 OWNED             BENEFICIALLY OWNED
-------------------            -------------------     --------------------
Michael A. Sunstein (2)            4,663,240                 %9.4
Jason A. Sunstein (3)              2,992,430                  6.0
The A.J. Hester Group              2,000,000                  4.0
C/o Josephtal and Co.
200 Park Ave., 24th Fl.
New York, NY  10166
Jerry Parker, M.D.                 1,850,857                  3.7
Gilbert Fuentes (III)                675,000                  1.4
Paul G. Goss                         125,000                  *
Dr. Robert Rosen                     140,000                  *
Jay Pasternak                        121,287                  *
Ted Takacs                            50,000
Shane Kennedy                          1,200                  *
Advisory Team                      3,750,000                  7.5
All Directors and Officers as
  a Group                         12,619,014                  25.34
TOTAL OF ABOVE                    16,369,014                  32.90

(1)  Except where otherwise noted, the address of the Company's directors
and executive officers is c/o Tri-National Development Corp., 480 Camino
Del Rio S., Suite 140, San Diego, California 92108.

(2)  Includes 2,000,000 held by Palomar Investements, Inc.

(3)  Includes 2,392,430 shares held by Delanorte Investments, Inc.

(4)  Does not include a total of 1,500,000 Qualified Employee Stock Options
that were approved pursuant to the Tri-National Development Corp. 2000
Equity Incentive Plan.  The 1,500,000 Qualified Employee Stock Options have
not yet been issued.

ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Jason Sunstein, as President of Delanorte Investments, Inc. loaned the
Company $358,865 over the last two years.  The loan was converted to
2,392,430 common shares during the year ended April 30, 2001.

Michael Sunstein, as President of Palomar Investments, Inc., loaned the
Company $300,000 over the last two years.  The loan was converted to
2,000,000 common shares during year ended April 30, 2001.



                                   43
<PAGE>
                                 PART IV

ITEM 13.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

The following documents are filed as a part of the report:

(a)  FINANCIAL STATEMENTS.  The following consolidated financial statements
of the Company are included in Part II, Item 7 of this report:

     Independent Auditors' Report
     Consolidated Balance Sheets as of April 30, 2001 and 2000
     Consolidated Statements of Operations for the year ended April 30, 2001
     Consolidated Statements Cash Flows for the ended April 30, 2001
     Consolidated Statements of Shareholders' Equity for the year ended
     April 30, 2001
     Notes to Consolidated Financial Statements

(b)  REPORTS ON FORM 8-K.  For the year end April 30, 2001, one report
on Form 8-K was filed by the Company on December 12, 2000 and the Company
also filed three reports on Form 8-K after the year end on May 24, 2001,
May 29, 2001 and July 10, 2001 are incorporated by reference herein.

(c ) EXHIBITS.  The following exhibits are filed as a part of this report:

EXHIBIT
NUMBER                   DESCRIPTION
------                   -----------

None.

SIGNATURES:

Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be
signed on its behalf by this undersigned, thereunto duly authorized, in the
City of San Diego, California, on this 14th day of August, 2001.

TRI-NATIONAL DEVELOPMENT CORP.
a Wyoming Corporation


BY:     Michael A. Sunstein                  BY:     Gilbert Fuentes
TITLE:  Chief Executive Officer, President   TITLE:  Chief Financial
        Director                                     Officer, Treasurer


                                             BY:     Jason A. Sunstein
                                             TITLE:  Vice President,
                                                     Secretary




                                   44