SECURITIES AND EXCHANGE COMMISSION
                     Washington, D.C.  20549

                           FORM 10-KSB

[ X ]    Annual Report Pursuant to Section 13 or 15(d) of the Securities
         Exchange Act of 1934.

[   ]    Transition Report Pursuant to Section 13 or 15(d) of the Securities
         Exchange Act of 1934.

           For the fiscal year ended September 30, 2002

                Commission File Number: 000-28339

                          XVARIANT, INC.
                         ---------------
      (Exact name of Registrant as specified in its Charter)

              Nevada                                 84-1398342
   -------------------------------                 --------------------
   (State or other Jurisdiction of                 (I.R.S. Employer
    Incorporation or Organization)                 Identification No.)


  170 South Main Street #1050, Salt Lake City, Utah 84101
    --------------------------------------------------------
       (Address of Principal Executive Offices) (Zip Code)

Registrant's Telephone Number including Area Code:  (801) 536-5000

  Securities Registered Under Section 12(b) of the Exchange Act:
                              None.

   Securities Registered Pursuant to Section 12(g) of the Act:
                  Common Stock, Par Value $0.001

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

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

     State issuer's revenues for its most recent fiscal year.  $1,382,954.

     The aggregate market value of the voting and non-voting common equity
held by non-affiliates computed by reference to the average bid and asked
prices of such stock, as of January 22, 2003, was $15,024,005.

     As of January 22, 2003, the Registrant had outstanding 13,561,100 shares
of its common stock.

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


<PAGE> 1

                        TABLE OF CONTENTS

ITEM NUMBER AND CAPTION

PART I                                                                Page No.

Item 1.  Description of Business...........................................1
Item 2.  Description of Property...........................................7
Item 3.  Legal Proceedings.................................................7
Item 4.  Submission of Matters to a Vote of Security Holders...............7

PART II

Item 5.  Market for Common Equity and Related Stockholder Matters..........7
Item 6.  Management's Discussion and Analysis or Plan of Operation.........9
Item 7.  Financial Statements........................................14, F-1
Item 8.  Changes In and Disagreements With Accountants on Accounting
         and Financial Disclosure.........................................14

PART III

Item 9.  Directors, Executive Officers, Promoters and Control Persons;
         Compliance With Section 16(a) of the Exchange Act................15
Item 10. Executive Compensation...........................................16
Item 11. Security Ownership of Certain Beneficial Owners and Management
         and Related Stockholder Matters..................................17
Item 12. Certain Relationships and Related Transactions...................19
Item 13. Exhibits and Reports on Form 8-K.................................20
Item 14. Controls and Procedures..........................................20
Signatures................................................................21
Certifications............................................................22

The information contained in this Form 10-KSB for the fiscal year ended
September 30, 2002, is as of the latest practicable date except for financial
information, which relates to the fiscal year.


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<PAGE> 2

                              PART I
                 ITEM 1.  DESCRIPTION OF BUSINESS

History

      Xvariant, Inc. (the "Company") was organized on October 24, 1996, under
the laws of the State of Nevada, as "Almost Country Productions, Inc.," for
the purpose of producing and marketing music.  In approximately March 1997,
the Company sold 100,000 shares of its common stock at $.30 per share in an
offering pursuant to Rule 504 and Section 3(b) of the Securities Act of 1933.
In November, 2000 the Company discontinued its music production business and
actively sought new business opportunities.

      On March 15, 2001, the Company completed the acquisition of Real Estate
Federation, Inc. ("REF"), pursuant to a Stock Purchase Agreement (the
"Agreement") between the Company and the shareholders of REF.  (See
"Acquisition of REF" below).

      The Company changed its name to "Xvariant, Inc.," in August, 2001.

      In January, 2002, the Company completed the acquisition of 360House.com,
Inc., a Utah corporation ("360House"), pursuant to a Stock Exchange Agreement
(the "Exchange Agreement") among the Company, 360House, and the shareholders
of 360House.  (See "Acquisition of 360House" below).

      Acquisition of REF

      The Company acquired REF as a wholly owned subsidiary by issuing
20,500,000 shares of the Company's authorized common stock, 20,000,000 of
which were issued to the shareholders of REF in exchange for their interests
in REF, and 500,000 of which were issued as a fee to one of the Company's
shareholders.  The newly issued shares aggregated approximately 97% of the
then issued and outstanding shares of the Company, and resulted in a change in
control of the Company.  At the closing of the acquisition, REF had no
liabilities other than ordinary overhead expenditures, a real estate lease
obligation, employment agreements with the three founders of REF, and a
consulting agreement with another shareholder of REF.  REF had no significant
assets other than its intellectual property, copyrights, and computers used to
deliver its service.  It did, however, have a subscription agreement with one
of its shareholders to provide up to $2,500,000 in capital funding over the
next one-year period.  To date, approximately $2,300,000 has been received and
utilized to pursue Company business operations.

      On or about October 12, 2001, 5,500,000 shares were cancelled in
connection with Separation Agreements entered into by two of the founders,
Messrs. Craig and Knapp.  Messrs. Craig and Knapp were each reissued 100,000
shares of restricted common stock, and were paid $12,500 and $17,500,
respectively, as reimbursement for all accrued salary, benefits and expenses.
On or about July 12, 2002, Mr. Thomas Wright, a founder, agreed to cancel
4,400,000 shares owned by him pursuant to an employment arrangement of that
date.  Mr. Wright was paid a total of $12,500 as reimbursement for all accrued
salary, benefits and expenses.  A total of 500,000 shares of common stock was
reissued to Mr. Wright.

      Acquisition of Bid Trac

      In November, 2001, the Company issued 450,000 shares of restricted
common stock to Bid Trac, Inc. ("Bid Trac"), for the acquisition of certain
assets and software that allowed the Company to provide an additional on-line
service to its customers, and six contracts with customers subscribing to the
service.  In addition, the Company granted to Bid Trac, a warrant


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<PAGE> 3

to purchase up to 600,000 shares of common stock at an exercise price of $2.00
per share, exercisable at any time prior to November 21, 2011.  The warrant
provides that, in the event gross revenue derived from the Bid Trac service
contracts was less than $200,000 for the twelve months following the
acquisition, only 300,000 shares could be purchased by Bid Trac, and if gross
revenue was less than $100,000 for such twelve month period, then the warrant
terminated and no shares could be purchased.  Gross revenue from the Bid Trac
contracts aggregated less than $100,000 for the initial twelve months
following the acquisition.

      Acquisition of 360House

      In January, 2002, the Company completed the acquisition of 360House.com,
Inc., a Utah corporation ("360House"), under the terms of a Stock Exchange
Agreement (the "Exchange Agreement") among the Company, 360House, and the
shareholders of 360House.

      The Company acquired 360House as a wholly-owned subsidiary by initially
issuing 1,000,000 shares of the Company's authorized common stock to the
shareholders of 360House in exchange for all of the outstanding stock of
360House. In addition, the Exchange Agreement provides for the issuance of
additional shares of the Company's common stock based on the performance of
360House.   The Company has agreed to issue stock, including the 1,000,000
shares issued upon execution of the Agreement, at a price equal to either (a)
a value equal to six times 360House's earnings before interest, taxes,
depreciation and amortization ("EBITDA") in the twelve month period ending
December 31, 2003 ("Earnout Shares"); or (b) the value defined by a valuation
consultant agreed to by the parties (the "Earnout").  Either party may demand
an independent valuation, and the party making such demand must bear the cost.
The value of the Company's common stock for purposes of the Earnout, shall be
calculated based on the average closing price of the stock for the 30 trading
days prior to December 31, 2003.

      At the closing of the acquisition, 360House had no significant tangible
assets except computers, office furniture and equipment, and general files for
its three employees.  It had what it believed was, however, significant and
valuable intellectual property, including, trademarks and internally developed
software and web technology.  360House had no liabilities other than ordinary
overhead expenditures, and employment agreements with Glade Jones, the
President of 360House, and Andy Evans, the founder and Chief Executive Officer
of 360House.  Although the employment agreements are obligations of 360House,
the Company assumed the obligations to ensure that the salaries were paid for
the six months following the acquisition to the extent that 360House did not
have the cash flow to satisfy the salary obligations.  Additionally, the
Company had the obligation, for a period of six months from the acquisition,
to ensure that 360House operating expenses were paid to the extent there was a
cash shortfall in 360House in meeting such expenses, which condition has been
satisfied.

      The Exchange Agreement contains an option allowing the shareholders of
360House to unwind the transaction in certain events.  In the event the
shareholders of 360House do not desire to accept the Earnout Shares at
December 31, 2003, they may surrender all of their shares in the Company and
all of the issued and outstanding common stock of 360House shall be returned
to the shareholders of 360House.  In such event, however, the Company has the
option to retain the 360House shares and pay the value calculated at December
31, 2003 to the 360House shareholders in cash.  In addition, if at any time
prior to the issuance of the Earnout Shares,  the Company does anything that
negatively impacts the ability of 360House to conduct its business or would
result in a material adverse dilution of the 360House shareholders' interest
in the Company, the 360House shareholders may exercise their option to unwind
the transaction.


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<PAGE> 4


Business of Company

      Background

      Technology allows home buyers and sellers to review property listings
that interest them through the Internet instead of relying on multiple listing
services' printed materials that were previously only available to agents.
Internet listings generally appear only on each individual real estate
company's web sites or on the site of an aggregator of real estate listings.
A potential buyer or seller must peruse all of the major companies' sites to
locate a majority of the available product.  A real estate brokerage company
may spend a significant amount of marketing resources to drive people to its
Internet site only to have the prospect visit the site and quickly move on
leaving no trace of the prospect.  Additionally, a prospect may visit the site
of an aggregator and see a listing by a company, but have no direct contact
with the real estate agent who has helped the prospect get to that point.

      The Company has developed the technology and Internet search engines
that allow a real estate company to overcome the shortfalls of existing
technology and still take advantage of the public's desire to have ready
access to information.  The Company search engines unify the listings of
independent brokerage firms enabling prospective buyers to view listings from
many brokerage firms.

      In addition, and probably more important to real estate brokerage
companies, the Company's products are designed to capture data about the
prospect and store it for follow up by the Company's agents.  Management
believes the existence of qualified leads means more contact with interested
and qualified buyers for the agents, which in turn generates more sales
commissions.  Both the agents and the brokerage company benefit from this
collection of information.

      The collection of information for lead generation allows a brokerage
company to allocate marketing resources to drive people to their site secure
in the knowledge that a visit by a serious buyer will result in valuable
information being captured.   The Company's products allow its broker
customers to increase the effectiveness of the leads generated by visits to
their web sites through capturing valuable information about the prospective
buyer and giving the agents qualified leads the agent would not otherwise have
had.

      Services

      The Company provides Internet-delivered lead generation, lead
qualification, and digital imaging services primarily to the real estate
industry and in the last year has rebranded the services acquired from its
acquisitions to provide a unified suite of products for brokers and agents.
The Company is marketing its lead generation services as "LeadMaxx" and its
digital imaging services as "TourMaxx".

      LeadMaxx services include the following components:

      a.      "Plug in" IDX/VOX search engine customized to meet the needs and
desires of customer brokerage firms.  Real estate companies can choose as
little or as much as they desire to increase lead generation results.

      b.      LeadMaxx has a comprehensive, integrated backend that helps to
manage internet leads generated by using LeadMaxx and also can be used as a
front desk to manage other leads the broker generates.  The backend has
statistical reporting to show how many views each property gets from the
broker's web site and how many e-mail updates are sent

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<PAGE> 5

to potential buyers and tracks agent performance in converting leads to
appointments, showings and closings.

      c.      LeadMaxx offers lead qualification services through both e-mail
contact and call center personal contact with potential buyers, to ensure the
highest percentage of lead conversion.

      d.      LeadMaxx customizes each potential property buyer's experience
to the broker's Internet site by providing a personalized web page to store
favorite properties.  This allows a potential customer browsing the Internet
to schedule appointments to see properties while they are online, and the
program will send automatic, custom e-mail updates of new listings that come
with the brokerage firm's branding every morning to the potential customers'
e-mail addresses.

      e.      LeadMaxx personnel can also design and build, and the Company
hosts and maintains comprehensive, sophisticated, functional, service-oriented
productive web sites for its customers.

      TourMaxx services include the following components:

      a.      The TourMaxx  principal service includes a photography service
that presents a virtual tour of a real estate listing to better display a
listed home for potential buyers.  The virtual tour consists of 360 degree
views of as many rooms of a house as the agent or broker desires to feature.
The photos of the rooms must be shot with a 360 degree lens and then
"unwrapped" with Company software.  The Company has developed and trained a
network of independent photographers to take the photos in all those areas
where they have contracted with real estate companies to provide the service.
Because the photography does not require professionals to take the pictures,
the Company has found that it has been relatively easy to locate independent
contractors to provide this service.  The Company currently has a data base of
over 155 photographers serving this function and does not foresee any
significant difficulty in locating sufficient photographers in any area to
service their needs.  As virtual tours become more in demand nationwide, the
Company expects the market for virtual tours to grow rapidly.

      b.      TourMaxx also provides digital still photography of the exterior
and interior of any home and presents it on the Internet.  Management believes
website presentation and high-resolution copies of photos taken make this an
attractive and cost effective substitute when a virtual tour is not available.
These still tours can be done on a self service basis.  Agents can take their
own photos and upload them onto their website using the Company interface.
The Company also has a training cd-rom that explains the entire process from
start to finish with detailed explanations and informative videos.

      c.      TourMaxx allows an agent or brokerage to print advertisement
flyers with all of the listing information and photos of the house and its
rooms directly from the client's website.  With today's sophisticated color
printers the resulting product looks professionally printed at a fraction of
the cost.

      d.      TourMaxx services also include detailed statistical information
concerning the number of website visits by potential purchasers to the
individual listings and helps to gauge the effectiveness of the virtual tours
and many other features to make an agent more successful in selling their
product.

      e.      TourMaxx can communicate with buyers using automated surveys to
improve customer satisfaction.  Tour data is displayed at company, employee,
vendor/sub or customer level and is displayed in an easy to read chart, graph
and text format.

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<PAGE> 6

      f.      TourMaxx also includes a service to highlight community
amenities, facilities, vacant lots and available housing inventory for a
subdivision developer to allow the potential buyers to become acquainted with
the area in which they intend to live.

      TourMaxx virtual tour services have been customized to provide a similar
service for the construction industry, under the name "PhotoPhase."  With
Company software a builder can create an interactive photo scrapbook of the
construction process.  The photos can be taken by the Company photographers or
by the builder at various stages of the construction and then the photos are
uploaded to a web page to allow the builder to communicate with his potential
"spec" purchaser or custom purchaser.  This service comes with an automatic
survey module that lets the builder know the reaction of potential customers
throughout the build process.  The Company has recently entered into contracts
with two of the largest home builders in the United States, and proposes to
pursue this part of the real estate industry during 2003.

      The Company generates its revenue by charging fees for its services. The
Company charges a brokerage company or an individual agent a flat fee for each
real estate listing that employs a virtual tour, which fee ranges from $55 to
$99 per tour, depending on volume and other factors.  The Company also charges
for other service transactions.  The Company will enter into longer term
contracts with real estate brokerages to provide the TourMaxx services. The
contracts are generally for one to two years.  Fees for the LeadMaxx services
are a monthly service fee ranging from $500 to $5,000 based on the number of
real estate offices being served by the Company and the level of service being
performed.  Similarly, the LeadMaxx customer contracts are for periods ranging
from one to two years.  The Company may also charge a per lead fee of $3 to $5
for each lead qualified by the Company customer service personnel if the
customer chooses to employ that service.

      In the fiscal year ended September 30, 2002, approximately 78% of the
revenue derived by the Company was from providing the TourMaxx services and
22% was derived from LeadMaxx services.

      To date, the Company has marketed its services to the real estate
industry primarily through personal contact with larger brokerage companies.
The Company has attended major real estate trade shows since its inception as
an exhibitor.  The service introduction has been well received and resulted in
numerous contacts with real estate brokerages with which the Company has been
actively attempting to enter into service agreements.  In addition, marketing
literature has been selectively mailed to the largest brokerage companies
throughout the United States.  Combined, these sales efforts have resulted in
12 real estate brokerages in different states signing contracts to receive the
LeadMaxx services which have been implemented by the Company.  Approximately
15 brokerage companies have entered into contracts with the Company for the
TourMaxx services.  The Company provided an average of 1680 virtual tours per
month in the last fiscal year during the nine months since the 360House
acquisition, which is an increase of over 600 tours per month over the
previous year when the services were provided by 360House before the
acquisition by the Company.

      The Company also provides web design, web development, and supporting
web services to clients and prospective customers, and generates additional
income for the services it provides.



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Intellectual Property Protection

      The Company has developed certain Internet search engine technology it
believes gives the Company a competitive advantage in servicing its customers.
The Company has filed a preliminary patent application on the LeadMaxx search
engine application, and is waiting for a response from the patent office.  The
Company is unsure of its financial ability to complete the patent process, and
there can be no assurance that a patent will be issued.

      The Company protects its trade secrets through use of confidentiality
agreements with its employees and customers.

Major Customers

      Approximately 43% of all Company revenue for fiscal year 2002 was
derived from the Company's largest five customers.  As more customers are
added to the services it is expected that the percentage received from those
customers will be reduced significantly.  All five of these customers are
subscribers to the TourMaxx service.

Competition

      The Company is not aware of other competitors that provide all the same
services to the real estate industry as the Company.  However, there are many
companies that provide general Internet delivered services to the real estate
industry and many companies that provide virtual tour services.  The virtual
tour business has very low barriers to entry, as a result of which there are
numerous local and regional companies in the business.  To the Company's
knowledge, there are currently only three companies on a national level, one
of which is the Company.  Many of the competitive services include portions of
the services the Company provides and are perceived by potential customers as
being competitive even though they do not provide all of the services the
Company offers. Some or all of the competitors providing such services may
have greater financial resources than the Company.

Employees

      The Company and its two subsidiaries currently employ 17 people at the
Company's executive offices in Utah and one sales representative in
Pennsylvania and one in Illinois.  It also has engaged a consultant in
Atlanta.  The Company has used over 155 independent contractors who provide
photography services for the TourMaxx services and 26 independent sales agents
or affiliates in various states who coordinate sales efforts in their areas
and act as customer liaison for brokerage customers.  Such affiliates are
compensated based on a percentage of the revenue generated from customers they
service.

Consulting Agreement

      In the beginning of September, 2000, Applied Technology Consultants,
Inc., ("ATC") a Nevada Corporation, entered into a consulting agreement with
REF under the terms of which it is to be paid $5,000 per month for a term of
three years ending on August 31, 2003.  ATC is a shareholder in the Company.
In addition, ATC entered into an agreement under the terms of which it is
entitled to a finder's fee for locating investment capital funding for the
operations of the Company.  The finder's fee is to be a percentage of the
investment proceeds actually received by the Company and is to be paid as such
funds are received.  The finder's fee percentage is 5% of the first million
dollars received, 4% of the next million dollars received and 3% of any
additional funds received.  To date, ATC has received $33,600 in finder's fees
and $20,000 in consulting fees.  At September 30, 2002, the Company owed ATC
$211,750, of which $100,000 was for consulting services, $42,450 was for a
short term loan and the


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remainder for finder's fees.  Mr. Reed L. Benson, who is an officer and
director of the Company, is also an officer and director of ATC and derives
income from ATC.

Government Regulation

      The Company's business activities are subject only to general
governmental regulations.



                 ITEM 2.  DESCRIPTION OF PROPERTY

      The executive offices of the Company are located at 170 South Main
Street, Suite 1050, Salt Lake City, Utah 84101.  REF entered into a lease
beginning in September, 2000, for a three year term ending October 31, 2003.
The lease covers approximately 2,700 square feet of office space at a rate of
$4,616  per month.  The Company has no other properties.


                    ITEM 3.  LEGAL PROCEEDINGS

      There are no legal proceedings pending against the Company, and, to the
best knowledge of the Company, no litigation has been threatened.


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

      There were no shareholders' meetings during the fiscal year.


                             PART II
              ITEM 5.  MARKET FOR COMMON EQUITY AND
                   RELATED STOCKHOLDER MATTERS

      The Company's common stock is currently traded in the over-the counter
market on the NASD's Electronic Bulletin Board under the symbol "XVNT".  The
Company's stock began trading on November 20, 2000.  The following table sets
forth, for the respective periods indicated, the high and low bid quotations,
as adjusted for stock splits of the Company's common stock, as reported by the
National Quotation Bureau, and represents prices between dealers, does not
include retail markups, markdowns or commissions, and may not represent actual
transactions:

Calendar Quarters                       High Bid       Low Bid
-----------------                       --------       --------

Fiscal 2001

Quarter ended December 31, 2000         $  0.625       $ 0.625
Quarter ended March 31, 2001               3.25          0.25
Quarter ended June 30, 2001                3.25          2.75
Quarter ended September 30, 2001           3.50          2.75

Fiscal 2002

Quarter ended December 31, 2001         $  2.75        $ 0.66
Quarter ended March 31, 2002               2.00          0.51
Quarter ended June 30, 2002                3.25          2.14
Quarter ended September, 2002              5.00          2.75

Fiscal 2003

Quarter ended December 31, 2002         $  3.20        $ 2.90


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     On January 22, 2003, the closing bid price of the Company's common stock
was $2.80 per share, the high bid price was $2.80 share and the low bid price
was $2.80 share.  As of January 22, 2003, the Company had 13,561,100 shares of
its common stock issued and outstanding, and there were approximately 132
shareholders of record.

Payment of Dividends

     As of the date hereof, the Company has not paid or declared any cash
dividends.  Future payment of dividends by the Company, if any, is at the
discretion of the Board of Directors and will depend, among other criteria,
upon the Company's earnings, capital requirements, and its financial condition
as well as other relative factors.  Management intends to retain any and all
earnings to finance the development of its business, at least in the
foreseeable future.  Such a policy is likely to be maintained as long as
necessary to provide working capital for the Company's operations.

Recent Sales of Unregistered Securities

     The following sets forth all securities issued by the Company within the
past fiscal year without registration under the Securities Act of 1933, as
amended.  No underwriters were involved in any stock issuances nor were any
commissions paid in connection therewith.

     The issuance of qualified options is required to be based on market
value.  Accordingly, the exercise price is set based on the market price of
the Company's common stock on the date of grant, even though the options
convert into restricted stock.

     The Company believes that the following issuances of shares of common
stock, notes, debentures and other securities were exempt from the
registration requirements of the Securities Act of 1933, as amended, pursuant
to the exemption set forth in Section 4(2) thereof.  Each security was issued
subject to transfer restrictions.  Each certificate for each security bears a
restrictive legend.  Each investor made representations to the Company that he
or it was suitable for the investment, and that the security was acquired for
investment purposes.

     In October, 2001, the Company canceled 550,000 shares of stock held by
Mr. Carter Knapp, a former director of the Company, and issued to him 100,000
shares, all pursuant to his Separation Agreement.  Also, in October, 2001, the
Company canceled 4,950,000 shares of stock held by Mr. Rick Craig, a former
director of the Company, and issued to him 100,000 shares, all pursuant to his
Separation Agreement.

     In November, 2001, the Company issued 450,000 shares of restricted common
stock to Bid Trac, Inc. ("Bid Trac"), in exchange for certain assets,
including customer contracts and software that allows the Company to provide
an additional on line service to its customers and six customer contracts
subscribing to the service.  In addition, the Company granted to Bid Trac
warrants to purchase up to 600,000 shares of common stock at an exercise price
of $2.00 per share, at any time prior to November 21, 2011.  However, the
warrant provides that in the event gross revenue derived from the Bid Trac
subscription fees is less than $200,000 for the twelve months following the
acquisition, only 300,000 shares may be purchased by Bid Trac, and if gross
revenue is less than $100,000 for that period then the warrant terminates and
no shares may be purchased.

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     In November, 2001, the Company granted stock options to Mr. Reed L.
Benson, currently the CEO and  director of the Company, to purchase up to
500,000 shares of stock at $1.09 per share pursuant to the Company's Stock
Option Plan.  The option price represents the fair market value of the
Company's stock on the date of grant.  The options vest one third upon grant,
one third in one year from the date of grant, and one third in two years from
the date of grant, contingent upon  Mr. Benson remaining an officer or
director for such time.

     In addition, also in November, 2001, the Company granted options to an
outside independent contractor to purchase 100,000 shares of stock at an
exercise price of $1.09 per share.  All options vested upon grant.  The
contractor provides accounting services to the Company and the options are in
lieu of cash compensation.

     In January, 2002, the Company issued 500,000  shares to Mr. Glade M.
Jones, President of the Company, in partial consideration of the acquisition
of 360House (See "ITEM 1.  DESCRIPTION OF BUSINESS:  Acquisition of
360House").  The Company also issued 500,000 shares to Andy Evans also in
consideration of the acquisition of 360House.

     In March, 2002, the Company issued 165,000 shares of restricted stock to
an outside unrelated third party consultant in satisfaction of a pre-existing
verbal agreement related to services performed in 2001.

     In April, 2002, the Company issued 25,000 shares of restricted stock to
an outside unrelated third party consultant pursuant to a Consulting Agreement
and also granted options to the consultant to acquire 500,000 shares of
Company common stock at an exercise price of $0.65 per share.  The options are
for a term of ten years.  The options vest one third upon grant, one  third
one year from grant and one third two years from the date of grant.  If the
consultant ceases to consult with the Company by his choice at any time before
vesting, all of the unvested options expire.  If the Company terminates the
consultant's agreement all unvested options then become vested.

     Effective February 8, 2002, the Company granted an employee, Mr. Thomas
Wright, stock options to acquire up to 2,000,000 shares of common stock of the
Company, at an exercise price of $1.08 per share.  These options vest only
upon the achievement of certain milestones by the Company and personal
performance by the employee and, in addition, if the performance milestones
are met, they vest one third upon the date of grant, one third one year
thereafter and one third two years after the date of grant.  This grant was
made in conjunction with the cancellation of 4,400,000 shares of stock held by
Mr. Wright and the issuance of 500,000 shares of newly issued stock.

     Effective as of March 1, 2002, the Company issued stock options to six
employees which aggregate 165,000 shares at an exercise price of $1.08.  The
options are for a term of ten years or the date that is one year from the date
that an employee ceases to be an employee of the Company.   The options vest
in increments of one third each, with one third vesting on the date of grant
and one third each year thereafter until fully vested.


ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

Forward-Looking Information, Cautionary Statements and Risk Factors

     This report on Form 10-KSB includes "forward-looking statements" within
the meaning of Section 27A of the Securities Act of 1933, and Section 21E of
the Securities Exchange Act of 1934.  These forward-looking statements may
relate to such matters as anticipated financial performance, future revenues
or earnings, business prospects, projected ventures, new products and
services, anticipated market performance and similar matters.  When used in

                                9
<PAGE> 11

this report, the words "may," "will," "expect," "anticipate," "continue,"
"estimate," "project," "intend," and similar expressions are intended to
identify forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934
regarding events, conditions, and financial trends that may affect the
Company's future plans of operations, business strategy, operating results,
and financial position.  The Private Securities Litigation Reform Act of 1995
provides a safe harbor for forward-looking statements.  To comply with the
terms of the safe harbor, we caution readers that a variety of factors could
cause our actual results to differ materially from the anticipated results or
other matters expressed in our forward-looking statements.  These risks and
uncertainties, many of which are beyond our control, include (i) the
sufficiency of existing capital resources and the Company's ability to raise
additional capital to fund cash requirements for future operations; (ii)
uncertainties involved in the rate of growth of the Company's business and
acceptance of the products and services of REF; (iii) the ability of the
Company to achieve and maintain a sufficient customer base to have sufficient
revenues to fund and maintain operations; (iv) volatility of the stock market,
particularly within the technology sector; and (v) general economic
conditions.  Although the Company believes the expectations reflected in these
forward-looking statements are reasonable, such expectations may prove to be
incorrect.

Plan of Operation

     The Company continues to target the top 500 real estate brokerage firms
in the United States, and to actively undertake efforts to sell the Company's
products and services to such firms, as a means of attempting to secure a
larger share of the market in selected real estate markets in the United
States.  The Company will undertake active efforts to enter into contracts
with the larger real estate brokers in each of these market areas.

     The Company's plan of operation will depend on its ability to raise
substantial additional capital, of which there can be no assurance.  The
Company is a party to subscription agreements for the sale of its restricted
common stock totaling $2,500,000.  Through December 31, 2002, the Company has
received approximately $2,300,000 under the subscription agreements, but the
funding source is under no obligation to continue making capital investments
in the Company.  The Company has used, and will continue to use, these funds
to pay general and administrative expenses, and to develop its marketing plan,
which includes participation in trade shows and direct marketing as well as
traveling to meet one-on-one with real estate brokers.  Although additional
funding may be terminated at any time, the Company currently believes that
funding will continue until the subscription agreement is completed.  At the
time that the funding is completed, if the Company has not achieved a
breakeven status, the Company will begin a program of cost reduction and seek
additional investment capital to cover any cost shortfall.   It is anticipated
that cost reductions and additional investment, if received, will cover the
Company's working capital needs over the next twelve months.

     The Company originally developed technology designed to convert traffic
on real estate brokerages' web sites into leads by capturing vital prospect
information and delivering it to brokerages for follow up.  It was the intent
that the brokerage firms would obtain greater value from their sites because
of referrals generated through the Company's system.  The Company was to share
in the referral fees so generated.  In practice, the referral fee model has
not proved to be viable.

     However, what has proven to be more valuable in the Company system has
been the ability of the technology and the Web presentation to capture
valuable information concerning house buying prospects. The Company has added
customer service representatives who are charged with the responsibility of
contacting all those people visiting a client web site and qualifying the
prospect's present intent to engage in a real estate transaction.  If the
prospect is deemed to be an "imminent" prospect, the brokerage is contacted
and given the "hot" lead to be


                                10
<PAGE> 12


presented to an agent for follow up.  This service of qualifying prospect
leads and presenting to a customer is currently being sold by the Company.
The Company is charging its clients a monthly recurring service fee.   To
date, there are 15 brokerage customers that have engaged the Company to
provide the lead generation services, which generate approximately $20,000 per
month in service revenue.

     The Company determined that it needed to offer additional services to its
customers and to prospective customers in order to attract a larger customer
base.  The Company, in the past year,  acquired the Bid Trac product offering
and acquired 360House.com to increase its product offerings.  The Bid Trac
services have been largely converted to LeadMaxx and the combined offerings of
lead generation and a virtual tour capability has increased the Company's
exposure in the real estate industry and greatly increased the Company's
revenues.    Currently, all of the sales presentations made by the Company
consist of the bundled services of the LeadMaxx and TourMaxx services. Revenue
from the TourMaxx services constituted approximately 78% of the total revenue
of the Company for the year ended September 30, 2002.  The Company  intends to
continue to search for complementary services to offer to its customers and,
if acquired,  they will also be included in the bundle of services offered to
Company customers.

Results of Operation

     Revenues

     The Company has generated a total of $1,382,954 in revenue for the year
ended September 30, 2002, compared with revenue of $266,136 for the year ended
September 30, 2001. The increase in revenue is due primarily to the
acquisition of 360House. The revenue from virtual tours of approximately
$1,130,000, was all generated during the last three quarters of the fiscal
year following the 360House acquisition.

     Operating Expenses

     The Company incurred total operating expenses of $2,804,082 for the year
September 30, 2002, compared to total operating expenses of $1,556,864 for the
year ended September 30, 2001.  The increase of $1,247,218, as explained more
fully hereafter, is primarily due to expenses incurred in connection with the
issuance of stock and options for services to unrelated third parties,
payments of compensation to sales affiliates managing TourMaxx customer
accounts, increases in salaries and employee benefits, sales and marketing,
and photography services.

     The Company issued stock and stock options for consulting services to
unrelated third parties and incurred an expense of $434,952, which accounts
for approximately 35% of the increase in expenses.  The Company also paid its
sales affiliates approximately $500,000, which accounted for another 40% of
the increase in expenses.

     The Company's largest expense is for salaries and employee benefits,
which was in the amount of $914,745 for the year ended September 30, 2002
compared to $927,493 for the year ended September 30, 2001.  The Company
terminated several executive level employees at the beginning of the fiscal
year and the savings resulting from those terminations offset  an increase in
the number of employees. The decrease of $12,748 in salaries and employee
benefits results from the termination of the executives being offset by the
acquisition of 360House and its employees.    The Company has increased the
number of employees from 9 to 19, of which increase 10 is attributable to
360House.


                                11
<PAGE> 13

     The Company's sales and marketing expenses for the year ended September
30, 2002 was $610,510 compared to sales and marketing expenses of $81,548 for
the year ended September 30, 2001.  The increase of $528,962 is due primarily
to the addition of 360House sales and marketing expenses, which included
expenses of approximately $500,000 in payments to outside sales affiliates.

     The Company incurred photography expenses of $207,966 for the year ended
September 30, 2002, compared to photography expenses of $106,413 for the year
ended September 30, 2001.  The increase of $101,553 was attributed to the
acquisition of 360House and a general increase in the number of virtual tours
sold.

     The Company incurred consulting expenses of $494,787 for the year ended
September 30, 2002 compared to consulting expenses of $112,299 for the year
ended September 30, 2001 or an increase of $382,488.  This increase was due
primarily to issuances of stock and stock options for services, which
aggregated $434,952 and also to hiring of a Company consultant in Atlanta.

     Other expenses, which includes all expenses not specifically listed on
the Statement of Operations, such as printing, data communications
connections, telephone, and programming, aggregated $337,825 for the year
ended September 30, 2002 as compared to $123,917 for the year ended September
30, 2001.  The increase was due primarily to the addition of 360House and its
related general operating expenses.

     During the year ended September 30, 2002, the Company expended a total of
$5,517 compared to $62,772 for the year ended September 30, 2001, for
technology development and website design.  The decrease was due primarily to
completion of the Company's website design projects and hiring of in-house
personnel to perform that function.

     Net Losses

     The Company had a net loss in the amount of $1,460,116 for the year ended
September 30, 2002 compared to a net loss of $1,298,410 for the year ended
September 30, 2001.  The net loss increased by $161,706 in spite of the
operations of 360House and the increased revenues derived from the virtual
tour operations.  However, there were one-time expenses of $434,952 related to
the stock issuances for services as discussed above.

Liquidity and Capital Resources

     At September 30, 2002, the Company had cash of $5,127, total current
assets of $110,787, current liabilities of $638,296, and total stockholders'
equity of $689,665.  The Company experienced negative cash flow from
operations during the fiscal year ended September 30, 2002 of $678,896, which
was met by investor capital contributions pursuant to  subscription
agreements. The Company expects to continue to experience negative cash flow
until the sales and marketing of the LeadMaxx services and the TourMaxx
services result in contract revenue that exceed the fixed costs of operations,
which is estimated to be achieved sometime during the current fiscal year.

     The Company will continue to have the need for infusions of capital over
at least the next several months.  To date, the Company has met its working
capital needs through payments under subscription agreements, and anticipates
that such payments will continue over the next several months.  Since
September 30, 2002 and through January 21, 2003, the Company has received a
total of $225,000 in payments under subscription agreements, and anticipates
that payments will continue over the next several months, at a minimum of
$50,000 per month.  However, as of the date of this Form 10-KSB, the investors
under the subscription agreements

                                12

<PAGE> 14


have the right to suspend payments under the subscription agreements, which
are due to be fully satisfied after the payment of an additional approximate
$175,000.  Additional investor capital after the full funding of the existing
subscription agreements will result in greater dilution to the existing
shareholders.   Therefore, future payments under the subscription agreements
may depend, to some extent, on results of operations, and there can be no
assurance that the Company will be able to attract new investors or that the
current venture investors will continue to fund operations  if the Company
does not demonstrate increased revenues and other favorable operating results
over the next several months.  In the event payments under the subscription
agreements were to terminate, for any reason, the Company would be in
immediate need of another source of capital.  There can be no assurance that,
in such event, the Company will be able to locate a source of capital, or on
terms acceptable to the Company or to reduce costs sufficient to maintain the
operations of the Company at its current level.

Recent Accounting Pronouncements

     Statement of Financial Accounting Standards (SFAS) No. 141, "Business
Combinations," SFAS No. 142, "Goodwill and Other Intangible Assets", SFAS No.
143, "Accounting for Asset Retirement Obligations," and SFAS No. 144,
"Accounting for the Impairment or Disposal of Long-Lived Assets," were
recently issued.  SFAS No. 141, 142, 143, and 144 have no current
applicability to the Company or their effect on the financial statements would
not have been significant.

     In April 2002, the FASB issued Statement No. 145 "Rescission of FASB
Statements No. 4, 44, and 62, Amendment of FASB Statement No. 13, and
Technical Corrections" (SFAS 145). SFAS 145 will require gains and losses on
extinguishments of debt to be classified as income or loss from continuing
operations rather than as extraordinary items as previously required under
Statement of Financial Accounting Standards No. 4 (SFAS 4).  Extraordinary
treatment will be required for certain extinguishments as provided in APB
Opinion No. 30. SFAS 145 also amends Statement of Financial Accounting
Standards No. 13 to require certain modifications to capital leases be treated
as a sale-leaseback and modifies the accounting for sub-leases when the
original lessee remains a secondary obligor (or guarantor).  SFAS 145 is
effective for financial statements issued after May 15, 2002, and with respect
to the impact of the reporting requirements of changes made to SFAS 4 for
fiscal years beginning after May 15, 2002. The adoption of the applicable
provisions of SFAS 145 did not have an effect on our financial statements.

     In June 2002, the FASB issued Statement No. 146, "Accounting for Costs
Associated with Exit or Disposal Activities." SFAS 146 nullifies Emerging
Issues Task Force Issue No. 94-3 "Liability Recognition for Certain Employee
Termination Benefits and Other Costs to Exit an Activity (including Certain
Costs Incurred in a Restructuring)."  SFAS 146 applies to costs associated
with an exit activity that does not involve an entity newly acquired in a
business combination or with a disposal activity covered by SFAS 144.  SFAS
146 is effective for exit or disposal activities that are initiated after
December 31, 2002, with earlier application encouraged. We are currently
reviewing SFAS 146 and intend to implement them no later than January 1, 2003.

     In October 2002, the FASB issued Statement No. 147 "Acquisitions of
Certain Financial Institutions   an amendment of FASB Statements No. 72 and
144 and FASB Interpretation No. 9" (SFAS 147).  SFAS 147 removes acquisitions
of financial institutions from the scope of both Statement 72 and
Interpretation 9 and requires that those transactions be accounted for in
accordance with FASB Statements No. 141, Business Combinations, and No. 142,
Goodwill and Other Intangible Assets. Thus, the requirement in paragraph 5 of
Statement 72 to recognize (and subsequently amortize) any excess of the fair
value of liabilities assumed over the fair value of tangible and identifiable
intangible assets acquired as an unidentifiable intangible asset no longer


                                13
<PAGE> 15

applies to acquisitions within the scope of this Statement. In addition, this
Statement amends FASB Statement No. 144, Accounting for the Impairment or
Disposal of Long-Lived Assets, to include in its scope long-term
customer-relationship intangible assets of financial institutions such as
depositor- and borrower-relationship intangible assets and credit cardholder
intangible assets. Consequently, those intangible assets are subject to the
same undiscounted cash flow recoverability test and impairment loss
recognition and measurement provisions that Statement 144 requires for other
long-lived assets that are held and used.  SFAS 147 is effective October 1,
2002.  The adoption of the applicable provisions of SFAS 147 did not have an
effect on our consolidated financial statements.

     In December 2002, the FASB issued Statement No. 148 "Accounting for
Stock-Based Compensation   Transition and Disclosure   an amendment of FASB
Statement No. 123" (SFAS 148).  SFAS 148 provides alternate methods of
transition for a voluntary change to the fair value based method of accounting
for stock-based employee compensation.  In addition, this Statement amends the
disclosure requirements of Statement 123 to require prominent disclosures in
both annual and interim financial statements about the method of accounting
for stock-based employee compensation and the effect of the method used on
reporting results.  SFAS 148 is effective for fiscal years beginning after
December 15, 2003.  We are currently reviewing SFAS 148.

Inflation

     During fiscal 2002, there was no material impact on the Company from
inflation.

ITEM 7.  FINANCIAL STATEMENTS

     The following financial statements required by this Item 7 begin on Page
F-1 and are located following the signature page and officer certification.
All information which has been omitted is either inapplicable or not required.

     Independent Auditors' Reports
      Report of HJ & Associates, LLC for year ended September 30, 2002....F-1
      Report of Grant Thornton LLP for year ended September 30, 2001......F-2

     Consolidated Balance Sheet as of September 30, 2002..................F-3

     Consolidated Statements of Operations for the years ended
     September 30, 2002 and September 30, 2001 ...........................F-4

     Consolidated Statements of Stockholders' Equity for the years
     ended September 30, 2002 and 2001, and cumulative from
     September 1, 2000 (inception) through September 30, 2000.............F-5

     Consolidated Statements of Cash Flows for the years ended
     September 30, 2002 and September 30, 2001............................F-7

     Notes to Consolidated Financial Statements...........................F-9


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

      During the fiscal year, there have been no disagreements with
accountants, but the Company changed its accountants from Grant Thornton LLP,
to HJ & Associates, L.L.C. on or about August 7, 2002.  The Company reported
this change in accountants in a Form 8-K filed on or about August 14, 2002.
(See "ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K").

                                14
<PAGE> 16


                             PART III
      ITEM 9.  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND
                CONTROL PERSONS, COMPLIANCE WITH
                SECTION 16(a) OF THE EXCHANGE ACT

     The following table sets forth (i) the names of the executive officers,
(ii) their ages as of the date of this Form 10-KSB and (iii) the capacities in
which they serve Xvariant:

Name               Age     Position                           Officer Since
-----------------  ------  ---------------------------------  --------------
Reed L. Benson      56     Chief Executive Officer,           2001
                           Chief Financial Officer
                           and Director

Glade M. Jones      38     President and Director             2002*

Andy Evans          29     Chief Technical Officer            2002*
                           and Director

*Messrs. Jones and Evans were appointed directors in connection with the
acquisition of 360House.  (See "ITEM 1. BUSINESS: Acquisition of 360House").

      Reed L. Benson was appointed Chief Executive Officer, President and a
Director of the Company on October 12, 2001.  On November 15, 2002, he
resigned as President, but continues to serve the Company as a Director and as
Chief Executive Officer and Chief Financial Officer.  From October, 1999 to
October, 2001, Mr. Benson was engaged in the private practice of law and
business management of personal assets.  From July 1995 to October, 2001, Mr.
Benson served as Vice President, Secretary, and General Counsel for Data
Broadcasting Corporation, a publically-traded company providing real time
financial market information to private investors.  From August 1987 to July
1995, Mr. Benson was General Counsel and Secretary of Broadcast International,
Inc., a publically-traded company which furnished satellite communications
services for businesses.  Mr. Benson is President of Applied Technology
Consultants, Inc., which has a consulting contract with the Registrant (See
"ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS").  Mr. Benson is a
licensed attorney in the State of Utah. He received his J.D. degree, from the
University of Utah in 1976.

      Glade M. Jones was appointed Executive Vice President and Director of
the Company on January 28, 2002 and was appointed President of the Company on
November 15, 2002.  From September 2000 to January 2002, Mr. Jones served as
President of 360House.com, Inc., a privately held corporation providing
Internet delivered  photographic virtual tours of real estate for real estate
brokerage companies.  From January 1997  to September 2000 Mr. Jones was
President of Calute Homes, a privately held residential construction company
and prior to that was Vice President of Calute Homes from May 1992 to January
1997.  From January 1992 to September 2000 he was also Vice President of
Blackburn Jones Real Estate, Inc., a privately held real estate brokerage
company.  Mr. Jones received his Masters of Business Administration from
Brigham Young University in 1992.

      Andy Evans was appointed Chief Technical Officer and Director of the
Company on January 28, 2002.  Mr. Evans was a founder of 360House.com, Inc. in
January 2000 and has served as the Chief Executive Officer from then to the
present.  He is the creator of all technology, graphics and back-end database
powering the 360House web site.  From December 1998 to January 2000, Mr. Evans
was active in web development and design as an independent entrepreneur  and
formed various small start up companies which were sold or the technology was
incorporated in 360House.  In June 1999, he formed I-Ball Interactive, which


                                15
<PAGE> 17

was a high end custom web development company.  In  July 1998 he formed
AndyArt.com, an online resource for web development, which was sold in 1999.
From May 1996 to December 1998, Mr. Evans was employed by Vyzynz, Inc. as the
head of web design.

Section 16 (a) Beneficial Ownership Compliance

      Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's executive officers, directors and persons who own more than ten
percent of the Company's Common Stock, to file initial reports of beneficial
ownership on Form 3, changes in beneficial ownership on Form 4 and an annual
statement of beneficial ownership on Form 5, with the SEC.  Such executive
officers, directors and greater than ten percent shareholders are required by
SEC rules to furnish the Company with copies of all such forms that they have
filed.

      Based solely on its review of the copies of such forms received by the
Company and representations from certain reporting persons, the Company
believes that all Section 16(a) filing requirements applicable to its
executive officers, directors and ten-percent shareholders were filed, except
that Reed L. Benson filed a Form 3 late, on or about December 18, 2001.


                 ITEM 10.  EXECUTIVE COMPENSATION

Summary of Cash and Certain Other Compensation

     The following sets forth the compensation of Xvariant's Chief Executive
Officer and the other officers who were executive officers as of September 30,
2002 and whose total annual salary and bonuses exceeded $100,000 for the three
fiscal years ended September 30, 2002.

Summary Compensation Table

                                                       Long Term
                                      Annual         Compensation
                                     Compensation       Awards
                                 ------------------- ------------
                      Fiscal                                      All other
Name and Principal  Year Ended                                    Compensa-
Position            September 30  Salary($) Bonus($)  Options(#)  tion ($)
------------------- ------------ ---------- -------- ------------ ------------
Reed L. Benson        2002           0(1)      0       500,000(2)      0
Chief Executive       2001           0         0            0          0
Officer               2000           0         0            0          0
------------------- ------------ ---------- -------- ------------ ------------
Glade M. Jones        2002        70,000(3)    0            0          0
President             2001           0         0            0          0
                      2000           0         0            0          0
------------------- ------------ ---------- -------- ------------ ------------
Andy Evans            2002        70,000(3)    0            0          0
Chief Technical       2001           0         0            0          0
Officer               2000           0         0            0          0
------------------- ------------ ---------- -------- ------------ ------------
Thomas E. Wright      2002           0         0            0       12,500(4)
                      2001       147,500       0            0          0
                      2000           0         0            0          0
------------------- ------------ ---------- -------- ------------ ------------
Rick Craig            2002           0         0            0       12,500(4)
                      2001       147,500       0            0          0
                      2000           0         0            0          0
------------------- ------------ ---------- -------- ------------ ------------
Carter M. Knapp       2002           0         0            0       17,500(4)
                      2001       105,000       0            0          0
                      2000           0         0            0          0
------------------- ------------ ---------- -------- ------------ ------------


                                16
<PAGE> 18

(1)  Does not reflect consulting fees earned by Applied Technology
Consultants, Inc., of which Mr. Benson is an officer and director, under a
consulting agreement providing for a $5,000 per month consulting fee and other
consideration.  (See "ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS").

(2)  Exercisable at $1.09 per share.  (See "ITEM 5.  MARKET FOR COMMON EQUITY
AND RELATED STOCKHOLDER MATTERS:  Recent Sales of Unregistered Securities").

(3)  Includes compensation from the Company's subsidiary, 360House.

(4)  Reflects amounts paid to these individuals in connection with their
resignation as officers and directors and employees of the Registrant under
separation agreements.  (See "ITEM 1.  DESCRIPTION OF BUSINESS:  Acquisition
of REF").


    ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
          AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

      The following table sets forth the beneficial ownership of the common
stock of the Company, at January 22, 2003, by each director, current executive
officer and executive officer named in the Summary Compensation Table
appearing above, and each person who, to the knowledge of the Company, owned
beneficially more than 5% of the Company's common stock.

                                         Beneficial Ownership
                              -----------------------------------------------
                              Amount of and Nature of      Percent of
Beneficial Owner              Beneficial Ownership (1)     Total (2)
----------------------------- -------------------------  --------------------
Calico, Ltd.
PO Box 267
Leeward Highway
Providenciales
Turks and Caicos Islands        6,200,000    Direct            45.7%

Reed L. Benson (3)
CEO and Director
170 South Main Street #1050
Salt Lake City, Utah 84101        995,384    Direct (3)         7.2%

Glade M. Jones
President and Director
170 South Main Street #1050
Salt Lake City, Utah 84101        500,000    Direct             3.7%


Andy Evans
Chief Technical Officer
and Director
1962 West 8350 South
West Jordan, Utah 84088           500,000    Direct             3.7%

All current directors,
current executive officers
and former executive officers
as a group (3 persons)          1,995,384                      14.4%




                                17
<PAGE> 19


(1)  The table in this section is based upon information supplied by officers,
directors and principal stockholders and Schedules 13D and 13G, if any, filed
with the SEC.  Unless otherwise indicated in the footnotes to the table and
subject to the community property laws where applicable, each of the
stockholders named in this table has sole voting and investment power with
respect to the shares shown as beneficially owned by him.

(2)  Applicable percentage of ownership for the officers and directors is
based on 13,894,434 shares of common stock, which were outstanding on January
20, 2003, and which includes 333,334 shares held by such officers and
directors which may be acquired upon exercise of currently exercisable
options.

(3)  Includes 333,334 shares which may be acquired upon exercise of presently
exercisable options.  (See "ITEM 10. EXECUTIVE COMPENSATION").  Also includes
100,000 shares held by Applied Technology Consultants, Inc., an entity in
which Mr.  Benson has shared voting control, and 12,050 shares held by Double
RR, LLC, an entity in which Mr. Benson has shared voting control.

Stock Option Grants

      On November 23, 2001, Mr. Reed L. Benson was granted options to purchase
500,000 shares of the Company's common stock at the closing price of the stock
of that day which was $1.09 per share.  The options vest 1/3 upon grant, 1/3
one year from the date of grant and 1/3 two years from the date of grant.  The
options expire ten years from the date of grant.

Compensation of Directors

      There are no non-employee directors of the Company and employees receive
no additional compensation for serving as directors.

Employment Contracts and Termination of Employment and Change of Control
Arrangements

      Mr. Reed L. Benson, CEO, is not a salaried employee of the Company, and
is not compensated directly by the Company.  He is President of Applied
Technology Consultants, Inc. ("ATC"), which has a consulting agreement with
the Company at $5,000 per month.  The Company currently owes ATC approximately
$226,750 under the consulting agreement.  Mr. Benson may derive compensation
from ATC and indirectly from the Company at such time as the Company is able
to pay the amount owed to ATC.  (See "ITEM 12.  CERTAIN RELATIONSHIPS AND
RELATED TRANSACTIONS").

      The Company's wholly owned subsidiary, 360House.com, Inc. ("360House")
has entered into employment agreements with Messrs. Jones and Evans which
provide for significant benefits. Each of the employment agreements provides
for a term that expires January 31, 2007 and for a monthly salary of $10,000,
with a bonus  equal to 12.5% of the net profits of 360House paid quarterly.
If their employment is terminated by the Company without cause, they are
entitled to termination benefits for the remainder of the contractual term
equal to their  base salary for such period.

      The Company currently has no other compensation plan or arrangement with
respect to any of the executive officers named on the Summary Compensation
Table, which results or will result from the resignation, retirement, or other
termination of such individual's employment with the Company or from a change
in control of the Company or a change in the individual's responsibilities
following a change in control.

                                18
<PAGE> 20

Compensation Committee Interlocks and Insider Participation

      The Company does not currently have a Compensation Committee.

Board Meetings

      During the year ended September 30, 2002, the Board has taken five
separate actions by consent resolution, but no formal meetings have been held.
From October 12, 2001 to January 29, 2002,  Mr. Reed L. Benson  served as the
sole director of the Company.

     ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

      The Company entered into consulting agreement with Applied Technology
Consultants, Inc., a Nevada corporation, in September, 2000, which provides
for a payment of $5,000 per month as a consulting fee for a three year term.
The Agreement also provides for a finder's fees for locating investment
capital funding for the operations of the Company.  The finder's fee is to be
a percentage of the investment proceeds actually received by the Company and
is to be paid as such funds are received.  To date, ATC has received $33,600
in finder's fees and $20,000 in consulting fees.  At December 31, 2002, the
Company owed ATC approximately $226,750, $115,000 of which is for consulting
fees.  In addition, ATC loaned the Company $79,000 on a short term note
bearing interest at 6% per annum, of which $36,550 has been repaid.  Mr. Reed
L. Benson, a director and officer of the Company, is also an officer and
director of ATC and derives compensation from ATC.

      Reed L. Benson has also loaned the Company $18,500 and another entity to
which he is related has loaned the Company $68,864.  Both of these loans are
short term loans that bear interest at 6% per annum.

      On or about October 12, 2001, Thomas Wright, Carter Knapp and Rick
Craig, resigned as officers and directors, and contributed shares of
restricted common stock back to the Company for cancellation.  (See "ITEM 1.
BUSINESS: Acquisition of REF").

      On November 23, 2001, Mr. Reed L. Benson was granted options to purchase
500,000 shares of the Company's common stock at the closing price of the stock
on that day, which was $1.09 per share.  The options vest 1/3 upon grant, 1/3
one year from the date of grant and 1/3 two years from the date of grant.  The
unexercised portion of the options expires ten years from the date of grant.

                                19

<PAGE> 21

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

     (a) Exhibits

      Exhibit No.
      -----------

      2.1**    Stock Exchange Agreement between Xvariant, Inc. and
               360House.com, Inc. dated as of January 29, 2002

      10.1*    Asset Purchase Agreement by and between
               Xvariant, Inc. and Bid Trac, Inc.

      10.2*    Common Stock Warrant

      10.3**   Employment Agreement between 360House.com, Inc. and
               Glade M. Jones dated as of December 1, 2001.

      10.4**   Employment Agreement between 360House.com, Inc. and
               Andy Evans dated as of December 1, 2001.

*  Previously filed with the Registrant's Report on Form 10-KSB filed on
   January 15, 2002.
** Previously filed with the Registrant's Current Report on Form 8-K filed on
   February 6, 2002.

      (b)  Reports on Form 8-K

      The Registrant filed a report on Form 8-K on or about November 7, 2001,
reporting the change of control as a result of the departure of certain
officers and directors under Separation Agreements.  The Registrant filed a
report on Form 8-K on or about February 6, 2002, reporting the acquisition of
360House.com, Inc., and filed a report on Form 8-K on or about August 14,
2002, and as amended on August 28, 2002, reporting the change of the
Registrant's accountants to HJ & Associates, L.L.C.  No other reports on Form
8-K were filed during the year ended September 30, 2002.

                ITEM 14.  CONTROLS AND PROCEDURES

      Evaluation of Disclosure Controls and Procedures.  Based upon an
evaluation under supervision and with the participation of Registrant's
management, as of a date within 90 days of the filing date of this Annual
Report on Form 10-KSB, Registrant's principal executive officer and principal
financial officer has concluded that the Registrant's disclosure controls and
procedures (as defined in Rules 13a-14(c) and 15d-14(c)) under the Securities
Exchange Act of 1934, are effective to ensure that information required to be
disclosed (in reports that we file or submit under that Exchange Act) is
recorded, processed, summarized and reported within the  time periods
specified in SEC rules and forms.

      Changes in Internal Accounting.  There were no significant changes in
Registrant's internal controls or other factors that could significantly
affect these controls subsequent to the date of their evaluation.  There were
no significant deficiencies or material weaknesses, and therefore there were
no corrective actions taken.  However, the design of any system of controls is
based in part upon the assumptions about the likelihood of future events, and
there is no certainty that any design will succeed in achieving its stated
goal under all potential future considerations, regardless of how remote.

                                20
<PAGE> 22

                            SIGNATURES

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

                                  XVARIANT, INC.


Date: January 24, 2003            /s/ Reed L. Benson
                                  ------------------------------------
                                  By:  Reed L. Benson
                                  Its:  Chief Executive Officer, Chief
                                  Financial Officer and Director

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


Date: January 24, 2003            /s/ Reed L. Benson
                                  ------------------------------------
                                  By:  Reed L. Benson
                                  Its:  Chief Executive Officer, Chief
                                  Financial Officer and Director


Date: January 24, 2003            /s/ Glade M. Jones
                                  ------------------------------------
                                  By:  Glade M. Jones
                                  Its:  President and Director


Date: January 29, 2003            /s/ Andy Evans
                                  ------------------------------------
                                  By:  Andy Evans
                                  Its:  Chief Technical Officer and Director




                                21
<PAGE> 23

                    CERTIFICATION PURSUANT TO
          18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO
          SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Reed L. Benson, certify that:

1.      I have reviewed this annual report on Form 10-KSB of Xvariant, Inc.;

2.       Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this annual report;

3.       Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
Registrant as of, and for, the periods presented in this annual report;

4.       As the certifying officer of the Registrant, I am responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the Registrant and have:

      a.      designed such disclosure controls and procedures to ensure that
material information relating to the Registrant, including its consolidated
subsidiaries, is made known to us by others within those entities,
particularly during the period in which this annual report is being prepared;

      b.      evaluated the effectiveness of the Registrant's disclosure
controls and procedures as of a date within 90 days prior to the filing date
of this annual report (the "Evaluation Date"); and

      c.      presented in this annual report Registrant's conclusions about
the effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;

5.       I have disclosed, based on our most recent evaluation, to the
Registrant's auditors and the audit committee of Registrant's board of
directors (or persons performing the equivalent functions):

      a.      all significant deficiencies in the design or operation of
internal controls which could adversely affect the Registrant's ability to
record, process, summarize and report financial data and have identified for
the Registrant's auditors any material weaknesses in internal controls; and

      b.      any fraud, whether or not material, that involves management or
other employees who have a significant role in the Registrant's internal
controls; and

6.       I have indicated in this annual report whether there were significant
changes in internal controls or in other factors that could significantly
affect internal controls subsequent to the date of our most recent evaluation,
including any corrective actions with regard to significant deficiencies and
material weaknesses.

Date: January 24, 2003                  /s/ Reed L. Benson
                                        -------------------------------------
                                        Reed L. Benson
                                        Chief Executive Officer and Chief
                                        Financial Officer


                                22
<PAGE> 24



                     CERTIFICATE PURSUANT TO
          18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO
          SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

      In connection with the Annual Report of Xvariant, Inc. (the "Company")
on Form 10-KSB for the period ending September 30, 2002 as filed with the
Securities and Exchange Commission on the date hereof (the "Report"), I, Reed
L. Benson, Chief Executive Officer and Chief Financial Officer of the Company,
certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant of Section
906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge and
belief:

      (1)   The Report fully complies with the requirements of section 13(a)
            or 15(d) of the Securities Exchange Act of 1934; and

      (2)   The information contained in the Report fairly presents, in all
            material respects, the financial condition and results of
            operations of the Company.



      Date:  January 24, 2003          /s/ Reed L. Benson
                                       ----------------------------------
                                       Reed L. Benson
                                       Chief Executive Officer and Chief
                                       Financial Officer




                                23
<PAGE> 25


                   INDEPENDENT AUDITORS' REPORT


The Board of Directors
Xvariant, Inc. and Subsidiaries
Salt Lake City, Utah

We have audited the accompanying consolidated balance sheet of Xvariant, Inc.
and Subsidiaries as of September 30, 2002 and the related statements of
operations, stockholders' equity, and cash flows for the year then ended.
These consolidated financial statements are the responsibility of the
Company's management.  Our responsibility is to express an opinion on these
consolidated financial statements based on our audit.

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

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the consolidated financial position
of Xvariant, Inc. and Subsidiaries as of September 30, 2002 and the results of
their operations and their cash flows for the year then ended, in conformity
with accounting principles generally accepted in the United States of America.

The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern.  As discussed in Note 3 to
the consolidated financial statements, the Company has a stockholders' deficit
and negative working capital, which raises substantial doubt about its ability
to continue as a going concern.  Management's plans with regard to these
matters are also described in Note 3.  The consolidated financial statements
do not include any adjustments that might result from the outcome of this
uncertainty.


/s/ HJ & Associates, LLC

HJ & Associates, LLC
Salt Lake City, Utah
January 21, 2003



                               F-1

<PAGE> 26



                      REPORT OF INDEPENDENT
                   CERTIFIED PUBLIC ACCOUNTANTS


The Directors and Stockholders of
Xvariant, Inc.

We have audited the accompanying consolidated statements of operations,
stockholders' equity and cash flows of Xvariant, Inc. and Subsidiary for the
year ended September 30, 2001.  These financial statements are the
responsibility of the Company's management. Our responsibility is to express
an opinion on the financial statements based on our audit.

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

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the consolidated results of
operations and consolidated cash flows of Xvariant, Inc. and Subsidiary for
the year ended September 30, 2001, in conformity with accounting principles
generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern.  The Company has generated net
losses of $1,352,731 from September 1, 2000 (inception) through September 30,
2001.  In addition, the Company has limited operating capital with current
liabilities exceeding current assets by $203,119 and has had limited revenue
from inception through September 30, 2001.  As discussed in Note 3,
realization of a major portion of the assets is dependent upon the Company's
ability to meet its future financing requirements and the success of its
future operations.  These factors raise substantial doubt about the Company's
ability to continue as a going concern.  Management's plans in regards to
these matters are also described in Note 3.  The consolidated financial
statements do not include any adjustments that might result from the outcome
of this uncertainty.

/s/Grant Thornton LLP

Salt Lake City, Utah
December 31, 2001


                               F-2

<PAGE> 27



                 XVARIANT, INC. AND SUBSIDIARIES
                   Consolidated Balance Sheet

                              ASSETS

                                                              September 30,
                                                                  2002
                                                             --------------
CURRENT ASSETS

  Cash (Note 2)                                              $       5,127
  Accounts receivable, net (Note 2)                                105,660
                                                             --------------

    Total Current Assets                                           110,787
                                                             --------------

PROPERTY AND EQUIPMENT, NET (Note 4)                               106,371
                                                             --------------
OTHER ASSETS

  Other non-current assets, net                                     44,232
  Goodwill (Note 12)                                             1,068,048
                                                             --------------

    Total Other Assets                                           1,112,280
                                                             --------------

    TOTAL ASSETS                                             $   1,329,438
                                                             ==============

               LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES

  Cash overdraft                                             $       6,942
  Trade accounts payable and accrued expenses                      509,970
  Deferred revenue                                                  14,425
  Note payable, related party (Note 6)                               3,500
  Lines of credit, related parties (Note 6)                         73,314
  Current maturities of long-term obligation (Note 7)               30,145
                                                             --------------

    Total Current Liabilities                                      638,296
                                                             --------------
LONG-TERM LIABILITIES

    Long-term obligations, less current maturities (Note 7)          1,477
                                                             --------------

    Total Liabilities                                              639,773
                                                             --------------
STOCKHOLDERS' EQUITY

  Common stock, $0.001 par value, 50,000,000 shares
   authorized; 13,561,100 shares issued and outstanding             13,561
  Additional paid-in capital                                     3,914,491
  Stock subscription receivable (Note 9)                          (425,540)
  Accumulated deficit                                           (2,812,847)
                                                             --------------

    Total Stockholders' Equity                                     689,665
                                                             --------------

    TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY               $   1,329,438
                                                             ==============


       The accompanying notes are an integral part of these
                consolidated financial statements.

                               F-3

<PAGE> 28

                 XVARIANT, INC. AND SUBSIDIARIES
              Consolidated Statements of Operations

                                                      For the Years Ended
                                                          September 30,
                                                  ----------------------------
                                                       2002           2001
                                                  -------------- -------------

REVENUES                                          $   1,382,954  $    266,136
                                                  -------------- -------------
OPERATING EXPENSES

  Salaries and employee benefits                        914,745       927,493
  Sales and marketing                                   610,510        81,548
  Technology development and website design               5,517        62,772
  Other                                                 337,825       123,917
  Bad debt expense                                       14,095             -
  Photography services                                  207,966       106,413
  Consulting services                                   494,787       112,299
  Rent                                                   65,269        53,749
  Depreciation and amortization                          95,809        41,554
  Travel                                                 57,559        47,119
                                                  -------------- -------------

    Total Operating Expenses                          2,804,082     1,556,864
                                                  -------------- -------------

Loss From Operations                                 (1,421,128)   (1,290,728)
                                                  -------------- -------------
OTHER EXPENSE

  Interest expense                                      (13,054)       (7,682)
  Loss on disposal of subsidiary (Note 13)              (25,934)            -
                                                  -------------- -------------

    Total Other Expense                                 (38,988)       (7,682)
                                                  -------------- -------------

Loss before income taxes                             (1,460,116)   (1,298,410)

Income taxes                                                  -             -
                                                  -------------- -------------

NET LOSS                                          $  (1,460,116) $ (1,298,410)
                                                  ============== =============

BASIC LOSS PER SHARE                              $       (0.10) $      (0.06)
                                                  ============== =============

WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING        13,945,785    21,121,100
                                                  ============== =============


       The accompanying notes are an integral part of these
                consolidated financial statements.

                                   F-4

<PAGE> 29
<TABLE>
<CAPTION>

                        XVARIANT, INC. AND SUBSIDIARIES
                Consolidated Statements of Stockholders' Equity


                                                     Additional
                                Common stock         Paid-in      Subscription  Accumulated  Total
                              Shares       Amount    Capital      Receivable    Deficit      Equity
                           ------------ ------------ ------------ ------------- ------------ ------------

                         <c>          <c>          <c>          <c>          <c>          <c>
Balance, September 1, 2000
 (inception)                         -  $         -  $         -  $          -  $         -  $         -

Issuance of common stock    10,000,000       10,000    2,495,500    (2,505,500)           -            -

Payment received on common
 stock subscriptions                 -            -            -        50,000            -       50,000

Net loss for the period              -            -            -             -      (54,321)     (54,321)
                           ------------ ------------ ------------ ------------- ------------ ------------
Balance at
 September 30, 2000         10,000,000       10,000    2,495,500    (2,455,500)     (54,321)      (4,321)

Recapitalization            11,121,000       11,121      (11,121)            -            -            -

Payments received on common
 stock subscriptions                 -            -      (45,150)    1,240,000            -    1,194,850

Net loss for the year                -            -            -             -   (1,298,410)  (1,298,410)
                           ------------ ------------ ------------ ------------- ------------ ------------
Balance at
 September 30, 2001         21,121,000       21,121    2,439,229    (1,215,500)  (1,352,731)    (107,881)

Cancellation of common
 stock in conjunction
 with officer separation
 agreements                 (9,900,000)      (9,900)       9,900             -            -            -

Issuance of common stock
 in conjunction with
 officer separation
 agreements                    700,000          700         (700)            -            -            -

Issuance of stock for
 asset purchase                450,000          450        69,550            -            -       70,000

Expense incurred through
 issuance of stock options           -            -       197,302            -            -      197,302

Issuance of common stock
 for purchase of subsidiary  1,000,000        1,000     1,009,000            -            -    1,010,000
                           ------------ ------------ ------------ ------------- ------------ ------------

Balance Forward             13,371,100  $    13,371  $  3,724,281 $ (1,215,500) $(1,352,731) $ 1,169,421
                           ------------ ------------ ------------ ------------- ------------ ------------



              The accompanying notes are an integral part of these
                       consolidated financial statements.

                                      F-5
</TABLE>
<PAGE> 30
<TABLE>
<CAPTION>

                        XVARIANT, INC. AND SUBSIDIARIES
          Consolidated Statements of Stockholders' Equity (Continued)



                                                     Additional
                                Common stock         Paid-in      Subscription  Accumulated  Total
                              Shares       Amount    Capital      Receivable    Deficit      Equity
                           ------------ ------------ ------------ ------------- ------------ ------------

                         <c>          <c>          <c>          <c>          <c>          <c>
Balance Forward             13,371,100  $    13,371  $ 3,724,281  $ (1,215,500) $(1,352,731) $ 1,169,421

Issuance of common stock
 for services                  190,000          190      237,460             -            -      237,650

Payment received on common
 stock subscription                  -            -      (47,250)      789,960            -      742,710

Net loss for the year ended
 September 30, 2002                  -            -            -             -   (1,460,116)  (1,460,116)
                           ------------ ------------ ------------ ------------- ------------ ------------
Balance at
 September 30, 2002         13,561,100  $    13,561  $ 3,914,491  $   (425,540) $(2,812,847) $   689,665
                           ============ ============ ============ ============= ============ ============





The accompanying notes are an integral part of these consolidated financial statements.

                                      F-6

</TABLE>
<PAGE> 31
<TABLE>
<CAPTION>


                      XVARIANT, INC. AND SUBSIDIARIES
                   Consolidated Statements of Cash Flows


                                                                         For the Years Ended
                                                                             September 30,
                                                                     -----------------------------
                                                                         2002           2001
                                                                     -------------- --------------
<S>                                                                  <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES

 Net loss                                                            $  (1,460,116) $  (1,298,410)
 Adjustments to reconcile net loss to net cash
  used by operating activities:
    Depreciation and amortization                                           95,809         41,554
    Bad debt expense                                                        14,095              -
    Loss on disposal of subsidiary                                          25,934              -
    Common stock and options issued for services                           434,952              -
 Changes in operating assets and liabilities:
    (Increase) in accounts receivable                                     (108,650)       (25,714)
    (Increase) decrease in prepaid expenses                                  8,700         (8,700)
    Increase in accounts payable and accrued expenses                      313,379        142,811
    (Decrease) in deferred revenue                                          (2,999)             -
                                                                     -------------- --------------

      Net Cash Used by Operating Activities                               (678,896)    (1,148,459)
                                                                     -------------- --------------
CASH FLOWS FROM INVESTING ACTIVITIES

 Purchase of fixed assets                                                  (20,837)       (71,000)
 Cash received in stock exchange agreement                                   2,179              -
 Cash given up in disposal of subsidiary                                   (16,545)             -
                                                                     -------------- --------------

      Net Cash Used by Investing Activities                                (35,203)       (71,000)
                                                                     -------------- --------------

CASH FLOWS FROM FINANCING ACTIVITIES

  Net increase in lines of credit - related party                           43,314         36,000
  Changes in cash overdraft                                                (17,202)        24,144
  Payments on notes payable - related party                                (46,291)             -
  Proceeds from notes payable - related party                                3,500              -
  Principal payments on leases payable                                     (23,350)       (19,625)
  Proceeds from stock subscription receivable                              789,960      1,240,000
  Commissions on stock subscription receivable                             (47,250)       (45,150)
                                                                     -------------- --------------

      Net Cash Provided by Financing Activities                            702,681      1,235,369
                                                                     -------------- --------------

NET INCREASE (DECREASE) IN CASH                                            (11,418)        15,910

CASH AT BEGINNING OF PERIOD                                                 16,545            635
                                                                     -------------- --------------

CASH AT END OF PERIOD                                                $       5,127  $      16,545
                                                                     ============== ==============



The accompanying notes are an integral part of these consolidated financial statements.

                                    F-7

</TABLE>
<PAGE> 32
<TABLE>
<CAPTION>


                      XVARIANT, INC. AND SUBSIDIARIES
             Consolidated Statements of Cash Flows (Continued)



                                                                         For the Years Ended
                                                                             September 30,
                                                                     -----------------------------
                                                                         2002           2001
                                                                     -------------- --------------
<S>                                                                  <C>            <C>
SUPPLEMENTAL CASH FLOW INFORMATION

CASH PAID FOR:

  Interest                                                           $      12,785  $       7,682
  Income taxes                                                       $           -  $           -

NON-CASH INVESTING AND FINANCING ACTIVITIES:

  Capital lease obligation for fixed assets                          $           -  $      52,205
  Common stock and options issued for services                       $     434,952  $           -
  Common stock issued in asset purchase                              $      70,000  $           -
  Common stock issued in stock exchange agreement                    $   1,010,000  $           -










The accompanying notes are an integral part of these consolidated financial statements.

                                    F-8

</TABLE>
<PAGE> 33




                 XVARIANT, INC. AND SUBSIDIARIES
            Notes to Consolidated Financial Statements
                   September 30, 2002 and 2001


NOTE 1 - ORGANIZATION AND BUSINESS ACTIVITY

         Xvariant, Inc. (Xvariant) was incorporated under the laws of the
state of Nevada on October 24, 1996, under the name Almost Country
Productions, Inc.

         On March 15, 2001, Xvariant acquired Real Estate Federation, Inc.
("REF") in a transaction recorded as a recapitalization of REF with Xvariant
being the legal survivor and REF being the accounting survivor and the
operating entity. REF was established to provide technology for the real
estate market that enhances the use of the Internet in the home-buying
process. The technology allows potential homebuyers to search for real estate
properties from all participating real estate brokers' listings. REF had a
wholly owned subsidiary, Xvariant, Inc. (a Utah corporation) which designed
web sites for real estate brokers along with other real estate related
services. Xvariant (the Utah corporation) was disposed of in October 2001 (see
Note 13).

         During January 2002, the Xvariant completed the acquisition of
360House.com, Inc. (360House), pursuant to a stock exchange agreement.
Xvariant acquired 360House by issuing 1,000,000 shares of common stock to the
shareholders of 360House in exchange for all of the issued and outstanding
shares of 360House (see Note 12). In addition, the exchange agreement provides
for issuance of additional shares of Xvariant's common stock based on the
performance of 360House. Xvariant agreed to issue common stock, including the
1,000,000 shares issued upon execution of the agreement, at a price equal to
either 1) a value equal to six times 360House's earnings before interest,
taxes, depreciation, and amortization during the twelve month period ending
December 31, 2003; or 2) the value defined by a valuation consultant mutually
agreeable by the parties. Either party may demand an independent valuation.
360house provides services to the real estate industry principally in the form
of photographic virtual tours of real estate properties available for viewing
on the internet and other video media.

         The Company was formed on September 1, 2000 and in prior periods was
engaged in the development of technology and Internet services targeted at the
real estate industry and was considered to be in the development stage through
December 31, 2001.  The Company began substantial operations in January 2002
with the acquisition of 360house (see Note 12) and became an operating company
during the year ended September 30, 2002.

         The consolidated financial statements include Xvariant and its wholly
owned subsidiaries, Real Estate Federation, Inc. and 360House.com, Inc.,
collectively referred to as "the Company."  All significant intercompany
accounts and transactions have been eliminated.


                               F-9

<PAGE> 34




                 XVARIANT, INC. AND SUBSIDIARIES
            Notes to Consolidated Financial Statements
                   September 30, 2002 and 2001

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         a.  Accounting Methods

         The Company's consolidated financial statements are prepared using
the accrual method of accounting.  The Company has elected a September 30,
year-end. 360House had a December 31, year end with the accompanying
consolidated financial statements including the results of financial position
and results of operations of 360House as of and for the nine months ended
September 30, 2002 which approximates the period from the date of its
acquisition by Xvariant as discussed in Note 12.

         b.  Basic Loss Per Share

         The computations of basic loss per share of common stock are based on
the weighted average number of common shares outstanding during the period of
the consolidated financial statements.

                                                        September 30,
                                                      2002         2001
                                                   ------------- -------------

         Numerator - loss                          $ (1,460,116) $ (1,298,410)

         Denominator - weighted average number of
          shares outstanding                         13,945,785    21,121,100
                                                   ------------- -------------

         Loss per share                            $      (0.10) $      (0.06)
                                                   ============= =============

         The Company has excluded 3,265,000 of common stock equivalents from
the basic net loss per share calculation as they are anti-dilutive.

         c.  Newly Issued Accounting Pronouncements

         In April 2002, the FASB issued Statement No. 145 "Rescission of FASB
Statements No. 4, 44, and 62, Amendment of FASB Statement No. 13, and
Technical Corrections" (SFAS 145). SFAS 145 will require gains and losses on
extinguishments of debt to be classified as income or loss from continuing
operations rather than as extraordinary items as previously required under
Statement of Financial Accounting Standards No. 4 (SFAS 4).  Extraordinary
treatment will be required for certain extinguishments as provided in APB
Opinion No. 30. SFAS 145 also amends Statement of Financial Accounting
Standards No. 13 to require certain modifications to capital leases be treated
as a sale-leaseback and modifies the accounting for sub-leases when the
original lessee remains a secondary obligor (or guarantor).  SFAS 145 is
effective for financial statements issued after May 15, 2002, and with respect
to the impact of the reporting requirements of changes made to SFAS 4 for
fiscal years beginning after May 15, 2002. The adoption of the applicable
provisions of SFAS 145 did not have an effect on our consolidated financial
statements.

                               F-10
<PAGE> 35




                 XVARIANT, INC. AND SUBSIDIARIES
            Notes to Consolidated Financial Statements
                   September 30, 2002 and 2001


NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

         c.  Newly Issued Accounting Pronouncements (Continued)

         In June 2002, the FASB issued Statement No. 146, "Accounting for
Costs Associated with Exit or Disposal Activities." SFAS 146 nullifies
Emerging Issues Task Force Issue No. 94-3 "Liability Recognition for Certain
Employee Termination Benefits and Other Costs to Exit an Activity (including
Certain Costs Incurred in a Restructuring)."  SFAS 146 applies to costs
associated with an exit activity that does not involve an entity newly
acquired in a business combination or with a disposal activity covered by SFAS
144.  SFAS 146 is effective for exit or disposal activities that are initiated
after December 31, 2002, with earlier application encouraged. We are currently
reviewing SFAS 146 and intend to implement it no later than January 1, 2003.

         In October 2002, the FASB issued Statement No. 147 "Acquisitions of
Certain Financial Institutions   an amendment of FASB Statements No. 72 and
144 and FASB Interpretation No. 9" (SFAS 147).  SFAS 147 removes acquisitions
of financial institutions from the scope of both Statement 72 and
Interpretation 9 and requires that those transactions be accounted for in
accordance with FASB Statements No. 141, Business Combinations, and No. 142,
Goodwill and Other Intangible Assets. Thus, the requirement in paragraph 5 of
Statement 72 to recognize (and subsequently amortize) any excess of the fair
value of liabilities assumed over the fair value of tangible and identifiable
intangible assets acquired as an unidentifiable intangible asset no longer
applies to acquisitions within the scope of this Statement. In addition, this
Statement amends FASB Statement No. 144, Accounting for the Impairment or
Disposal of Long-Lived Assets, to include in its scope long-term
customer-relationship intangible assets of financial institutions such as
depositor- and borrower-relationship intangible assets and credit cardholder
intangible assets. Consequently, those intangible assets are subject to the
same undiscounted cash flow recoverability test and impairment loss
recognition and measurement provisions that Statement 144 requires for other
long-lived assets that are held and used.  SFAS 147 is effective October 1,
2002.  The adoption of the applicable provisions of SFAS 147 did not have an
effect on our consolidated financial statements.

         In December 2002, the FASB issued Statement No. 148 "Accounting for
Stock-Based Compensation   Transition and Disclosure   an amendment of FASB
Statement No. 123" (SFAS 148).  SFAS 148 provides alternate methods of
transition for a voluntary change to the fair value based method of accounting
for stock-based employee compensation.  In addition, this Statement amends the
disclosure requirements of Statement 123 to require prominent disclosures in
both annual and interim financial statements about the method of accounting
for stock-based employee compensation and the effect of the method used on
reporting results.  SFAS 148 is effective for fiscal years beginning after
December 15, 2003.  We are currently reviewing SFAS 148.

         d.  Accounts Receivable

         Accounts receivable are shown net of an allowance for doubtful
accounts of $32,371 and a return allowance of $1,320 as of September 30, 2002.


                               F-11
<PAGE> 36




                 XVARIANT, INC. AND SUBSIDIARIES
            Notes to Consolidated Financial Statements
                   September 30, 2002 and 2001


NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

         e.  Property and Equipment

         Property and equipment is recorded at cost.  Major additions and
improvement are capitalized.  The cost and related accumulated depreciation of
equipment retired or sold are removed from the accounts and any differences
between the undepreciated amount and the proceeds from the sale are recorded
as gain or loss on sale of equipment.  Depreciation is computed using the
straight-line method over the estimated useful life of the assets as follows:



                  Description               Estimated Useful Life
                  -----------               ---------------------
                  Furniture and fixtures        3-4 years
                  Machinery and equipment         3 years
                  Computers                       3 years


         f. Goodwill

         As of January 1, 2002, the Company adopted Statement of Financial
Accounting Standard (SFAS) No. 142, "Goodwill and Other Intangible Assets"
(SFAS 142).  SFAS 142 requires the accounting for goodwill on an
impairment-only approach.  SFAS 142 requires that goodwill be tested for
impairment annually, or more frequently if circumstances indicate potential
impairment, by comparing the fair value of the asset to its carrying amount.
Such testing requires, that each of the Company's reporting units, as defined
in SFAS 142, be identified and that the Company's assets and liabilities,
including the existing goodwill and intangible assets, be assigned to those
reporting units.  The Company has determined that it has a single reporting
unit attributable to its goodwill.  SFAS 142 also requires the Company to
assess the fair value of the Company.  In determining fair value, the Company
considered the guidance in SFAS 142, including the Company's market
capitalization, control premiums, discounted cash flows and other indicators
of fair value.  Based on this analysis, goodwill totaling $1,065,048 does not
appear to be impaired at September 30, 2002.

                               F-12

<PAGE> 37




                 XVARIANT, INC. AND SUBSIDIARIES
            Notes to Consolidated Financial Statements
                   September 30, 2002 and 2001


NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

         g.  Provision For Taxes

         Deferred taxes are provided on a liability method whereby deferred
tax assets are recognized for deductible temporary differences and operating
loss and tax credit carryforwards and deferred tax liabilities are recognized
for taxable temporary differences.  Temporary differences are the differences
between the reported amounts of assets and liabilities and their tax bases.
Deferred tax assets are reduced by a valuation allowance when, in the opinion
of management, it is more likely than not that some portion or all of the
deferred tax assets will not be realized.  Deferred tax assets and liabilities
are adjusted for the effects of changes in tax laws and rates on the date of
enactment.

         Net deferred tax liabilities consist of the following components as
of September 30, 2002 and 2001:


                                                          2002     2001
                                                    ------------- ------------
         Deferred tax assets:

          NOL Carryover                             $    914,218  $   504,000

         Deferred tax liabilities:

          Depreciation                                   (33,740)           -

         Valuation allowance                            (880,478)    (504,000)
                                                    ------------- ------------

          Net deferred tax asset                    $          -  $         -
                                                    ============= ============

The income tax provision differs from the amount of income tax determined by
applying the U.S. federal income tax rate to pretax income from continuing
operations for the years ended September 30, 2002 and 2001 due to the
following:

                                                         2002         2001
                                                    ------------- ------------

         Book income                                $   (569,445) $  (441,000)
         Stock for services/Options expense              169,570            -
         Depreciation                                    (20,200)           -
         State tax expense                               (20,375)     (43,000)
         Meals & Entertainment                             4,820            -
         Penalty                                           1,795            -
         Valuation allowance                             433,835      484,000
                                                    ------------- ------------

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


                               F-13
<PAGE> 38




                 XVARIANT, INC. AND SUBSIDIARIES
            Notes to Consolidated Financial Statements
                   September 30, 2002 and 2001



NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

         g.  Provision For Taxes (Continued)

         At September 30, 2002, the Company had net operating loss
carryforwards of approximately $2,323,000  that may be offset against future
taxable income from the year 2002 through 2022.  No tax benefit has been
reported in the September 30, 2002 consolidated financial statements since the
potential tax benefit is offset by a valuation allowance of the same amount.

         Due to the change in ownership provisions of the Tax Reform Act of
1986, net operating loss carryforwards for Federal income tax reporting
purposes are subject to annual limitations.  Should a change in ownership
occur, net operating loss carryforwards may be limited as to use in future
years.

         h.  Estimates

         The preparation of consolidated financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the consolidated financial statements and the reported amounts of revenues and
expenses during the reporting period.  Actual results could differ from those
estimates.

         i.  Advertising

         The Company follows the policy of charging the costs of advertising
to expense as incurred. During the years ended September 30, 2002 and 2001,
the Company expensed $112,928, and $81,548, respectively.

         j.  Revenue Recognition

         The Company recognizes revenue from real estate lead commissions as
escrow is closed.  Revenue from photographic virtual tours and related
services are recognized as projects are completed and available for viewing.
Revenue is recognized on other services rendered as they are performed.

         k. Concentration of Risks

         During the years ended September 30, 2002 and 2001, one customer
accounted for approximately 30% and 97% of sales, respectively.

                               F-14

<PAGE> 39



                 XVARIANT, INC. AND SUBSIDIARIES
            Notes to Consolidated Financial Statements
                   September 30, 2002 and 2001


NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

         l. Stock Options

         As permitted by FASB Statement 123 "Accounting for Stock Based
Compensation" (SFAS No. 123), the Company elected to measure and record
compensation cost relative to employee stock option costs in accordance with
Accounting Principles Board ("APB") Opinion 25, "Accounting for Stock Issued
to Employees," and related interpretations and make proforma disclosures of
net income and earnings per share as if the fair value method of valuing stock
options had been applied.  Under APB Opinion 25, compensation cost is
recognized for stock options granted to employees when the option price is
less that the market price of the underlying common stock on the date of
grant.

         m. Reclassifications

         Certain balances in the 2001 consolidated financial statements have
been reclassified to conform to the current year's presentation.

         n. Technology Development and Website Designs

         The costs of computer software developed or obtained for internal
use, during the preliminary project phase, as defined under Statement of
Position 98-1 "Accounting for the Costs of Computer Software Developed or
obtained for Internal use", are expensed as incurred.  The costs of web site
development, during the planning stage, as defined under Emerging Issues Task
Force No. 00-2 "Accounting for Web Site Development Costs", are expenses as
incurred.  Computer software and web site development costs incurred during
the application and infrastructure development stage, including external
direct costs of materials and services consumed in developing software,
creating graphics and web site content, payroll, and interest costs, are
capitalized and amortized over the estimated useful life, beginning when the
software is ready for use and after all substantial testing is completed and
the web site is operational.

       Any costs incurred since the web site and related software have become
operational have been expenses as incurred.

NOTE 3 - GOING CONCERN

         The Company's consolidated financial statements are prepared using
generally accepted accounting principles in the United States of America
applicable to a going concern which contemplates the realization of assets and
liquidation of liabilities in the normal course of business.  The Company has
incurred losses which have resulted in an accumulated deficit of $2,812,847 at
September 30, 2002, a working capital deficit of $527,509 and has limited
internal financial resources.  These factors combined raise substantial doubt
about the Company's ability to continue as a going concern.  The accompanying
consolidated financial statements do not include any adjustments relating to
the recoverability and classification of asset carrying amounts or the amount
and classification of liabilities that might result from the outcome of this
uncertainty.

                               F-15
<PAGE> 40

                 XVARIANT, INC. AND SUBSIDIARIES
            Notes to Consolidated Financial Statements
                   September 30, 2002 and 2001

NOTE 3 - GOING CONCERN (Continued)

         The Company expects that growth in revenue from operations will
continue to increase.  Additionally, the Company anticipates that the
remaining $425,540 subscription receivable discussed in Note 9 will be
collected during the coming fiscal year. Accordingly, the Company believes
that based on these factors, it has the ability to sustain operations for the
next twelve months. However, there can be no assurance that generation of
operating revenues and collection of the subscription receivable will be
sufficient to enable the Company to maintain its operations. If the Company's
plans are not successful, it will be necessary for the Company to secure
additional debt and equity financing which also cannot be assured.

NOTE 4 - PROPERTY AND EQUIPMENT

         Property and equipment consists of the following:
                                                             September 30,
                                                                 2002
                                                             -------------
         Furniture and fixtures                              $     36,695
         Machinery and equipment                                   29,692
         Computers                                                151,202
                                                             -------------
                                                                  217,589
           Accumulated depreciation                              (111,218)
                                                             -------------

           Net property and equipment                        $    106,371
                                                             =============

           Depreciation expense for the years ended September 30, 2002 and
2001 was $60,809 and $41,554, respectively.

NOTE 5 - ASSET PURCHASE

         During November 2001, pursuant to an asset purchase agreement, the
Company issued to an unrelated entity 450,000 shares of its common stock and
agreed to issue up to an additional 600,000 in the form of a warrant with a
term of 10 years exercisable at $2.00 per share. The exercise of the warrants
are contingent upon gross revenue derived from the assets purchased as
follows:

         If gross revenue generated from the assets purchased was greater than
$200,000 for the twelve months following the acquisition, all 600,000 warrants
were to be available for exercise. If gross revenue was less than $200,000
only 300,000 warrants were to be exercisable and if gross revenue were less
than $100,000 none of the warrants would be exercisable. At September 30,
2002, none of the revenue thresholds had been achieved and no warrants were
exercisable in conjunction with the asset purchase. Subsequent to September
30, 2002, and upon the expiration of the 12-month period from the date of the
execution of the asset purchase agreement, none of the revenue thresholds had
been met. Accordingly, no warrants to purchase shares of the Company's common
stock pursuant to that agreement are exercisable.

                               F-16
<PAGE> 41



                 XVARIANT, INC. AND SUBSIDIARIES
            Notes to Consolidated Financial Statements
                   September 30, 2002 and 2001



NOTE 5 - ASSET PURCHASE (Continued)

   The assets purchased in connection with this transaction consisted of
various items including customer contracts and software. The assets were
valued at $70,000 on the date of purchase based on the net present value of
the contracts acquired.  Amortization expense of $35,000 has been recorded
during the year ended September 30, 2002.

NOTE 6 - NOTES PAYABLE - RELATED PARTY

         The Company has two $250,000 uncollateralized lines of credit with
two companies controlled by related parties.  The credit lines bear interest
at 6 percent and matured in June 2002.  The balances outstanding at September
30, 2002 were $42,450 and $30,864, respectively.  The credit lines are
currently in default.

         During the year ended September 30, 2000 a related party loaned
360House $30,291 to pay for operating expenses.  The note is due on demand.
Interest is being imputed on the note at 8% per annum.  360house made payments
of $4,000 on the note prior to entering into  the stock exchange agreement
discussed in Notes 1 and 12.  The note and accrued interest were paid in full
during the year ended September 30, 2002.

         During the year ended September 30, 2001 a related party sold to
360House office equipment and software with a fair market value of $20,000 in
exchange for a note payable.  The note is due on demand.  Interest is being
imputed on the note at 8% per annum.  The note and accrued interest were paid
in full during the year ended September 30, 2002.

         During the year ended September 30, 2002, a related party paid
Company expenses of $3,500.  The note is due on demand.  Interest is being
imputed on the note at 6% per annum.  No payments have been made on the note.

NOTE 7 - LONG-TERM OBLIGATIONS

         The Company leases office space under a long-term operating lease
agreement and leases equipment under long-term capital lease agreements.
Minimum rentals on capital leases have been capitalized at the cost of the
leased equipment or the present value of the rentals at the inception of the
leases and the obligation for such amounts recorded as liabilities.
Amortization of the capitalized assets, which is included in depreciation and
amortization expense, is computed on the straight-line basis over the life of
the asset or the lease term, whichever is shorter, and interest expense is
accrued on the basis of the outstanding lease obligations.


                               F-17
<PAGE> 42




                 XVARIANT, INC. AND SUBSIDIARIES
            Notes to Consolidated Financial Statements
                   September 30, 2002 and 2001


NOTE 7 - LONG-TERM OBLIGATIONS (Continued)

         Future minimum lease payments under capital and operating leases are
as follows:

                                                       Capital    Operating
                                                       Leases     Leases
                                                       ---------- ----------
   Year ending September 30,
            2003                                       $  32,696  $  55,391
            2004                                           1,516      4,616
            Thereafter                                         -          -
                                                       ---------- ----------
            Total minimum lease payments                  34,212  $  60,007
                                                                  ==========
            Less amount representing interest              2,590
                                                       ----------

            Present value of net minimum lease payments   31,622

            Less current maturities                       30,145
                                                      -----------

                                                      $    1,477
                                                      ===========

NOTE 8 - RELATED PARTY TRANSACTIONS

         In addition to the related party notes payable discussed in Note 6,
the Company has the following related party transactions:

         The Company entered into an agreement on September 1, 2000 with an
attorney to provide legal and other consulting services.  The attorney is also
a shareholder of the Company.  The agreement stipulates monthly payments of
$3,500 for a term of five years with an option to renew for an additional
two-years.  The base consulting fee is subject to a yearly increase of 10
percent or a cost of living adjustment whichever is greater.  Consulting fees
paid in conjunction with this agreement totaled $-0- and $31,500 for the years
ended September 30, 2002, and 2001, respectively.  The agreement was cancelled
during the year ended September 30, 2002.

         The Company also entered into a consulting agreement with another
shareholder, Applied Technologies Consulting (ATC).  A director and officer of
the Company is also an officer and director of ATC and derives compensation
from ATC.  Under the agreement, ATC will provide business and financial
advisory services for the Company for a monthly consulting fee of $5,000.  The
agreement was entered into September 1, 2000 and extends for a period of three
years.  The consulting fee for the first two months of the contract was waived
by ATC.  Total consulting fee expense for the years ended September 30, 2002
and 2001 totaled $60,000 and $45,000, respectively.  Included in accounts
payable at September 30, 2002 is approximately $169,300 of amounts payable to
ATC.  Included in the accounts payable balance, are amounts owed for
commissions related to the subscription agreement discussed at Note 9.


                               F-18
<PAGE> 43




                 XVARIANT, INC. AND SUBSIDIARIES
            Notes to Consolidated Financial Statements
                   September 30, 2002 and 2001


NOTE 8 - RELATED PARTY TRANSACTIONS (Continued)

         The Company has a Technology Development Agreement and Assignment
with two officers of the Company that are also shareholders of the Company.
The agreement stipulates that the Company will pay a royalty of three percent
of gross revenues (as defined) on all revenues, except those that are directly
related to the real estate industry.

NOTE 9 - CONTINGENCIES

         The Company entered into subscription agreements totaling $2,505,500
of which $2,079,960 was received during the period September 1, 2000
(inception) through June 30, 2002, resulting in net cash to the Company of
$1,987,560 and a balance due of $425,540.

         The investor may suspend payments under the subscription agreement in
the event that by March 31, 2001, and at all times thereafter the Company has
not achieved, and does not continue to achieve monthly net revenues equal to
35 percent of the monthly net revenues set forth in the Company's business
plan. At times, the Company had not achieved the required monthly net
revenues.


         Under the agreement a shareholder is entitled to receive a business
brokerage commission in consideration of its services in locating businesses
with the capacity to fund the Company's business plan. The commission shall be
an amount equal to five percent of the first million dollars, four percent of
the second million, three percent of the third million, two percent of the
fourth million and one percent of all amounts thereafter.  To date the Company
has paid or accrued a total of $92,400 pursuant to the commission agreement.

         At September 30, 2001, the Company had employment agreements with
certain officers of the Company. Salaries covered by these agreements totaled
$400,000 annually over the next three years. The agreements also included
total bonuses of $550,000 in the first year to $750,000 annually and stock
option clauses upon meeting specified business objectives and time
requirements. During October 2001, the Company entered into separation
agreements with these officers of the Company under terms of which they
terminated their employment effective October 1, 2001, and surrendered all
Company stock owned by them for cancellation, which totaled 5,500,000 shares
of common stock. In conjunction with the separation agreements the officers
received 100,000 shares of common stock each, which are subject to certain
restrictions. Also in connection with one of the separation agreements, the
Company transferred to the former officer all of the issued and outstanding
shares of Xvariant, Utah which was a wholly-owned subsidiary of the Company
without significant net assets at September 30, 2001.

                               F-19
<PAGE> 44



                 XVARIANT, INC. AND SUBSIDIARIES
            Notes to Consolidated Financial Statements
                   September 30, 2002 and 2001


NOTE 9 - CONTINGENCIES (Continued)

         In connection with another separation agreement, an officer
terminated his employment as of October 1, 2001 and the Company has agreed to
engage this former officer as an independent consultant. The consulting
agreement is a month-to-month arrangement with either party being able to
terminate the arrangement upon 30 days prior written notice. The Company will
pay the former officer the sum of $10,000 per month for his consulting
services. The former officer is also eligible for certain bonuses, total
compensation shall not exceed $20,000 per month.

          At September 30, 2002, the Company has employment agreements with
two of the officers of the Company.  The agreement stipulates total annual
salaries of $240,000 annually for the next 4 years.  The agreement also
provides for bonuses based on net income.

NOTE 10 - COMMON STOCK TRANSACTIONS

          During the year ended September 30, 2001, the Company issued
11,121,100 in connection with the recapitalization between Xvariant and the
Real Estate Federation, Inc. (see Note 1).

          During the year ended September 30, 2002, the Company cancelled
9,900,000 common shares and issued 700,000 common shares pursuant to the
separation agreements with former officers of the Company.

         In November 2001, the Company issued 450,000 shares of common stock
for the purchase of assets (see Note 5) and issued an additional 1,000,000
shares pursuant to a stock exchange agreement executed in January 2002 (see
Note 12).

         Additionally, the Company issued 165,000 shares of common stock in
January 2002 to an unrelated individual for services rendered valued at a
price of $0.91 per share. An additional 25,000 shares were issued to the same
individual in July 2002 for services rendered valued at $3.50 per share. The
value of the shares issued approximated the fair market value of the shares on
the date of authorization.

NOTE 11 - STOCK OPTIONS AND WARRANTS

         During November 2001, the Company approved a stock option plan
authorizing the Company to grant up to a maximum of 2,500,000 shares of
qualified and nonqualified options to employees, officers, directors, and
others.

         During November 2001, the Company granted stock options to its
president to purchase up to 500,000 shares of common stock at $1.09 per share.
The options vest one third upon grant, one third one year from the date of
grant, and one third two years from the date of grant, contingent upon the
president remaining an officer for such time.  In addition, the Company
granted options to purchase 100,000 shares of common stock to an outside
consultant at $1.09 per share which vest upon grant.

                               F-20

<PAGE> 45




                 XVARIANT, INC. AND SUBSIDIARIES
            Notes to Consolidated Financial Statements
                   September 30, 2002 and 2001


NOTE 11 - STOCK OPTIONS AND WARRANTS (Continued)

         In conjunction with an asset purchase agreement entered into in
November 2001, the Company granted to an unrelated entity a warrant to
purchase up to 600,000 shares of common stock at an exercise price of $2.00
per share, exercisable at any time prior to November 21, 2011 based on
achieving certain gross revenue thresholds (see Note 5). As of September 30,
2002, none of the gross revenue thresholds had been achieved and, accordingly,
no related warrants were exercisable.

         During February 2002, the Company granted stock options to an
employee of the Company to purchase up to 2,000,000 shares of common stock at
$1.08 per share.  The options vest based on the performance of the Company and
the time the employee remains employed by the Company.  At September 30, 2002,
no options had vested under this agreement.

         In addition, the Company granted options to purchase 500,000 shares
of common stock to an outside consultant at $0.65 per share which vest one
third upon grant, one third one year from the date of grant and one third two
years from date of grant, contingent upon the consultant continuing to provide
services during the vesting periods.

         During March 2002, the Company granted stock options to employees of
the Company to purchase up to a total of 165,000 shares of common stock at
$1.08 per share.  The options vest one third upon grant, one third one year
from the date of grant, and one third two years from the date of grant,
contingent upon the employees remaining employees of the Company for such
time.

          A summary of the status of the Company's outstanding stock options
as of September 30, 2002 and 2001 and changes during the years then ended is
presented below:

                                           2002                2001
                                 ----------------------- --------------------
                                               Weighted             Weighted
                                               Average              Average
                                               Exercise             Exercise
                                    Shares     Price       Shares   Price
                                 ------------ ---------- ---------- ---------
          Outstanding, beginning
            of year                        -  $       -           - $      -
          Granted                  3,865,000       1.17           -        -
          Expired/Cancelled                -          -           -        -
          Exercised                        -          -           -        -
                                 ------------ ---------- ---------- ---------

          Outstanding end of year  3,865,000  $    1.17           - $      -
                                 ============ ========== ========== =========

          Exercisable                488,329  $    0.95           - $      -
                                 ============ ========== ========== =========




                               F-21
<PAGE> 46




                 XVARIANT, INC. AND SUBSIDIARIES
            Notes to Consolidated Financial Statements
                   September 30, 2002 and 2001

NOTE 11 - STOCK OPTIONS (Continued)

                             Outstanding                Exercisable
                 --------------------------------- ----------------------
                              Weighted
                 Number       Average     Weighted  Number       Weighted
                 Outstanding  Remaining   Average   Exercisable  Average
Range of         at Sept. 30, Contractual Exercise  at Sept. 30, Exercise
Exercise Prices  2002         Life        Price     2002         Price
---------------- ------------ ----------- --------- ------------ ---------
$    0.65            500,000       9.42   $   0.65      166,667  $   0.65
     1.08          2,165,000       9.36       1.08       54,996      1.08
     1.09            600,000       9.15       1.09      266,660      1.09
     2.00            600,000       9.15       2.00            -         -
                 ------------ ----------- --------- ------------ ---------

$ 0.65-2.00        3,865,000       9.13   $   1.17      488,329  $   0.95
                 ============ =========== ========= ============ =========

         The Company estimates the fair value of each stock option at the
grant date by using the Black-Scholes option pricing model based on the
following assumptions:


                                                    For the Year
                                                       Ended
                                                 September 30, 2002
                                                 ------------------
         Risk free interest rate                     4.90% - 4.93%
         Expected life                                   10 years
         Expected volatility                           203% - 224%
         Dividend yield                                      0.00%

         Of the 3,865,000 options issued, 2,665,000 were issued to employees
or employee directors and were accounted for under APB 25, "Accounting for
Stock Issued to Employees." All of these shares were issued either at or above
the market price of the Company's common stock on the date of issue and no
compensation expense was recognized.  Had compensation cost for the issuance
of the options been determined based on the fair value at the grant dates
consistent with the method of FASB Statement 123, "Accounting for Stock Based
Compensation," the Company's net loss and loss per share would have been
increased to the pro forma amounts indicated below:

                                                      For the Years Ended
                                                         September 30,
                                                    2002            2001
                                                  ------------- -------------
         Net (loss) as reported                   $ (1,460,116) $ (1,298,410)
         Pro forma net loss                       $ (1,670,919) $ (1,298,410)
         Basic (loss) per share as reported       $      (0.10) $      (0.06)
         Pro forma                                $      (0.12) $      (0.06)



                               F-22
<PAGE> 47




                 XVARIANT, INC. AND SUBSIDIARIES
            Notes to Consolidated Financial Statements
                   September 30, 2002 and 2001

NOTE 12 - BUSINESS COMBINATION

          During January 2002, the Company, through a purchase combination,
acquired all of the outstanding common shares of 360house.com, Inc.
(360house).  The results of 360house's operations have been included in the
consolidated financial statements since that date.  360house is a provider of
virtual tours primarily targeted at the real estate industry.

          The aggregate purchase price was $1,010,000 which was paid in common
stock.  The value of the 1,000,000 shares issued was determined based on the
value of the Company's common shares on the date of closing.

          The following table summarizes the estimated fair values of the
assets acquired and liabilities assumed at the date of acquisition.

          Current assets                          $      12,282
          Property and Equipment                         30,365
                                                  --------------

              Total Assets Acquired                      42,647
                                                  --------------

              Total Liabilities Assumed                (100,695)
                                                  --------------

              Net Assets (Liabilities) acquired   $     (58,048)
                                                  ==============

          Goodwill associated with this transaction has been recorded at
$1,068,048.  The Company assesses the amount reported as goodwill on an annual
basis, or on an interim basis when events and circumstances warrant for
possible impairment.  No impairment of goodwill was recorded during the year
ended September 30, 2002.

          Unaudited pro forma consolidated results of operations for the years
ended September 30, 2002 and 2001 as though 360house had been acquired as of
October 1, 2000 and 2001 follow:

                                                   For the Years Ended
                                                      September 30,
                                                   2002           2001
                                               ------------- -------------
          Revenue                              $  1,488,354  $    347,084
          Operating expenses                     (2,939,082)   (1,764,815) (1)
                                               ------------- -------------

          Operating loss                         (1,450,728)   (1,417,731)
                                               ------------- -------------

          Net loss                             $ (1,467,760) $ (1,425,413)
                                               ============= =============
          Basic and diluted
           loss per share                      $      (0.11) $      (0.06)
                                               ============= =============

          (1)  For the year ended September 30, 2001, proforma operating
               expenses include $106,805 amortization of goodwill.  Due to a
               change in accounting principles with the adoption of SFAS 142,
               amortization of goodwill is not included in proforma operating
               expenses for the year ended September 30, 2002.

                               F-23
<PAGE> 48




                 XVARIANT, INC. AND SUBSIDIARIES
            Notes to Consolidated Financial Statements
                   September 30, 2002 and 2001

NOTE 13- DISPOSAL OF SUBSIDIARY

         In conjunction with an employee separation agreement entered into
with one of the former officers of the Company in October 2001, the Company
transferred all of the issued and outstanding shares of Xvariant, the Utah
corporation, to the former officer.  At the date of transfer, Xvariant, the
Utah corporation, had a net book value of $25,934 from cash, accounts
receivable and accounts payable.  All revenue generated by Xvariant, the Utah
corporation, was from services provided by 360house before 360house was a
wholly owned subsidiary. Effective as of a date approximating the acquisition
of 360House, the revenues and related contractual arrangement previously
derived by Xvariant, the Utah corporation, were assumed by REF. As such, the
disposal of this entity was not considered or accounted for as a discontinued
operation.  The disposal resulted in a loss of $25,934.

NOTE 14 - SUBSEQUENT EVENTS

          Subsequent to September 30, 2002, the Company received payments of
approximately $200,000 on the outstanding subscription receivable balance.

          Subsequent to September 30, 2002, an officer of the Company loaned
the Company $15,000.  Interest is being imputed at a rate of 6% per annum.




                               F-24