SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-KSB

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

For the fiscal year ended June 30, 2002

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

For the transition period from _______  to _______

Commission file number 000-29511

                               eSAFETYWORLD, Inc.
                  (Exact name of small business in its charter)

         Nevada                     11-3496415
(State or of incorporation)                 (I.R.S. Employer Identification No.)

                          80 Orville Drive, Bohemia, NY
                    (Address of principal executive offices)

                                      11716
                                   (Zip Code)

Issuer's telephone number, including area code: 631-244-1454

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

Common Stock, par value $.001


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

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

         Issuer's revenues for its most recent fiscal year were $177,905. The
aggregate market value of common voting stock held by non-affiliates of the
Issuer was approximately $.02 computed by reference to the last sale price at
which the stock was sold on September 30, 2002. As of June 30, 2002, 3,000,000
shares of common stock were outstanding.


<PAGE>





                                     PART I


Item 1 -- BUSINESS

Introduction

         eSAFETYWORLD, Inc. was established as a Nevada corporation in July 1997
as The SL Group, Inc. and changed its name to eSAFETYWORLD, Inc. in August 1999.
We completed an initial public offering of 1,000,000 shares of our common stock
in February 2000 resulting in net proceeds of approximately $5,681,644. Our
address is 80 Orville Drive, Bohemia, NY 11716. Our telephone number is
631-244-1454, and our facsimile number is 631-244-1549.

         We conducted no material operations between July 1997 and August 1999,
other than to develop a business plan and strategy. The SL Group had no
operations but was used by our founders to establish the business of
eSAFETYWORLD's safety product business. Our officers and directors decided to
develop an e-commerce business to sell disposable safety garments and equipment.
In August 1999, we acquired certain intangible assets, including customer and
vendor lists, from the distribution division of Laminaire Corporation. The
adjusted purchase price consisted of 100,000 shares of our common stock and
notes payable in the aggregate principal amount of $400,000. The notes payable
bore interest at eight percent per annum and were payable in quarterly
installments. We had the right to offset the principal amount of a $102,000
demand note that we made to Laminaire, in whole or in part, against any
obligation due by us to Laminaire under these note agreements. In addition, we
had the right to offset any amounts paid by us to vendors or others on behalf of
and at the request of Laminaire. During the period August 1999 through March
2000, we operated the business related to the acquired customer lists
substantially the same way as Laminaire did except that we arranged for our
vendors to ship products directly to our customers. We paid administrative fees
of $48,000 to Laminaire during that period. Thereafter, we had no further
arrangements with Laminaire.

         The notes payable to Laminaire were fully satisfied by March 31, 2000.
We believe that we have several legal causes of action against Laminaire
relating to the purchase of the intangible assets, but Laminaire's financial
condition makes it unlikely that we would have any reasonable likelihood of
collecting a judgment.

         During the period following the completion of our public offering most
of our resources were devoted to the design and completion of our safety
products catalog and CD-ROM and the redesign of our safety products website.
During that time, the economic climate changed rapidly causing us to evaluate
our overall business strategies. Our evaluation process took place in a
declining economy and one in which many e-commerce businesses were failing. At
the same time, it was apparent that completing a secondary offering would be
difficult or impossible.

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Consulting Program

         In September 2000, we established a consulting program in response to
the evaluation of our business and to take advantage of the skills and contact
bases of our officers and directors. Our initial strategy was to assist emerging
or startup companies to develop an effective business strategy and take
advantage of general business opportunities. Fees due by these clients were
generally payable in cash or shares of their common stock, at the client's
option. In most cases the client was expected to pay in shares. We believed that
the skills and contacts of our officers and directors combined with our
willingness to accept equity securities in consideration for services gave us a
significant competitive advantage. We advised our clients that we would likely
distribute the shares of common stock received from our clients to our
shareholders as a dividend after such shares are registered by such client with
the Securities and Exchange Commission pursuant to the Securities Act of 1933,
as amended, although we were not committed or obligated to make such
distributions. We believed that revenues from this initiative were likely to
comprise a significant portion of our revenues and expanded the resources
devoted to this new endeavor. We also believed that our initiative of providing
dividends to our shareholders was a potentially attractive strategy for them. In
addition, as part of this consulting initiative, we helped establish a public
relations firm, Harbor Ridge Communications, Inc. which was intended to assist
our clients in a variety of ways including being introduced to the financial
community after their shares were publicly distributed. The function of this
strategy was limited to public and investor relations and, in no way, was
intended to assist in raising capital or other financing for these clients.
However, our and our clients' efforts to comply with applicable disclosure and
regulatory requirements have made it impractical to implement our proposed
strategy as planned and realizing the benefits therefrom. After filing the
registration statements, a variety of issues raised during the regulatory review
process significantly slowed down the entire process of realizing benefits from
the shares received or receivable from clients. These issues included whether
our dividend distributions resulted in our functioning as a statutory
underwriter, which in turn brought up questions as to whether we could receive
shares from clients based on available exemptions from registration. During the
fourth quarter of fiscal 2002 certain issues regarding certain startup or
development stage clients were raised.

         Our management has devoted a substantial portion of its time and
resources to the issues relating to the registration and dividend distribution
process of the shares to be received from consulting clients. The initial
concept was to distribute shares received from clients to the Company's
shareholders in a way that we believed had the potential to benefit both the
client and our shareholders, although the realization of benefits was never and
could never be assured. The concept has required a large commitment of time and
resources to clear the regulatory review process. We believe that we have
resolved satisfactorily many of the significant structural issues and concerns
of which we are aware. We, together with clients, continue to discuss
client-specific issues. However, there are no assurances that the current
client-specific issues will be resolved satisfactorily or that new issues and
concerns may arise or that issues that we believe have been resolved
satisfactorily may reopen.

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         We are considering a policy of not distributing the shares of startup
or development stage companies and focusing efforts on established small and
medium sized businesses. If we receive shares of stock from consulting clients
and opt not to distribute those shares to our shareholders, the estimated value
of the shares will be recorded as revenue upon receipt. If no market exists for
those shares, they will initially be recorded at the cost incurred to perform
the consulting services and such initial evaluation will be reviewed for
reasonableness and impairment whenever events or changes in circumstances
indicate that the related carrying amount may not be recoverable. If required,
impairment losses are recognized based on the excess of the asset's carrying
value over its fair value. We have established reserves and allowances for
account balances relating to clients whose carrying values are impaired because
client-specific issues have been raised as part of the regulatory review
process.

         We have not significantly marketed our consulting services. All of our
engagements have been referrals based on our management's contacts. We do not
anticipate soliciting or accepting new client engagements of a similar nature to
those undertaken in the past until or unless current uncertainties are resolved.
This means that the consulting initiative may not go forward if we ultimately
lack the resources necessary to resolve the issues satisfactorily. The
unanticipated delays relating to our client registration statements have caused
us to reconsider this strategy. Continued participation in the Harbor Ridge
project would require significant additional financial and management resources.
Given that we do not know whether our clients will be in a position to benefit
from those services in the near future, we have opted to discontinue our
participation in the Harbor Ridge initiative and write-off our investment.

         If the matters described above are resolved, we intend to market our
consulting services to attorneys, accountants and other professionals who
provide services to established small and medium-sized businesses. We are also
establishing a website for our consulting services operations at www.accixx.com.
We will outsource certain service requirements. We may outsource some of those
requirements to firms that are or were related to some of our officers and
directors. Any arrangements that we make with related parties will, in our
judgment, be on terms no less favorable to us than would be available from
unrelated parties. While our preference is to emphasize this portion of our
business, there can be no assurances that we will do so. We believe that our
competitive advantage is largely related to our willingness to take securities
for services. That strategy does not benefit us if we are unable to obtain
liquidity for the shares that are received. We do not intend to allow our
acquisition of shares of clients to cause us to become classified as an
investment company subject to the Investment Company Act of 1940. Our efforts
will be to engage established companies, including entities having the ability
to pay fees in cash. If we do decide to accept new client engagements, of which
there are no assurances, we will emphasize being engaged by:

o        Clients that have established businesses and are not in the development
         stage;

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o        Clients that are not affiliated with any of our officers or directors;
         and

o        Engagement terms that do not result in us being considered affiliated
         with or promoters of the client.

We believe that following the foregoing criteria will address most of the
client-specific issues that we have identified. However, no assurances can be
given that we will obtain client engagements meeting these criteria or that
other issues will not arise.

         Our available services generally consist of:

o        strategic planning and management consulting,

o        basic accounting services,

o        website development and hosting, and

o        e-business and technology services.

Specifically, we plan to work with established small and medium sized companies
to assist them in developing a strategic and financial plan that helps them to
identify and concentrate on those business areas that offer them the greatest
possibility of success given their availability of financial and capital
resources. We will also help them to design and develop financial reporting
systems, and are available to consult with them regarding their Internet
websites and e-business strategies. In certain cases, we may also provide
administrative support, and similar services. Finally, we are available to
assist clients in preparing written business plans and similar reports and
presentations.

         Our initial strategy was to offer consulting clients the option of
paying for our services in cash or by issuing shares of their common stock. We
initially anticipated that most engagements would be satisfied by the issuance
of shares by the client rather than cash, although no assurances could be given
in that regard. We reserved the right to distribute all or a portion of shares
received from our clients to our shareholders in the form of a dividend, but we
are not obligated to do so. Our standard engagement agreement required the
client to register shares prior to issuance to us. Our clients have experienced
extensive and unanticipated delays in complying with applicable disclosure and
regulatory requirements to complete such registrations. Because of those delays,
we have decided not to solicit new engagements for which services would be paid
in stock until or unless such issues are satisfactorily resolved. The delays
incur costs and require management resources to address the issues. Because of
these matters, several clients have withdrawn previously filed registration
statements that would have registered shares that were issuable to us and would
have been distributed to our shareholders as dividends.

         Because of our role in the dividend distributions, during the fourth
quarter of fiscal 2001, we concluded that we are a statutory "underwriter"

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<PAGE>

within the meaning of Section 2(11) of the Securities Act with regard to such
securities. Accordingly, as part of the dividend distribution process, we must
comply with the prospectus delivery requirements that would apply to a statutory
underwriter in connection with the distribution of client shares to our
stockholders. Further, we acknowledge to our clients whose shares we are
distributing as a dividend to our shareholders that we are familiar with the
anti-manipulation rules of the SEC, including Regulation M under the Securities
Exchange Act of 1934. These rules may apply to sales by us in the market,
following the creation of a public market for client shares, if such a market
ever develops.

         With certain exceptions, Regulation M prohibits any selling
stockholder, any affiliated purchasers and any broker-dealer or other person who
participates in an applicable distribution from bidding for or purchasing, or
attempting to induce any person to bid for or purchase, any security which is
the subject of the distribution until the entire distribution is complete.
Regulation M also prohibits any bids or purchases made in order to stabilize the
price of a security in connection with the distribution of that security. The
foregoing restrictions may affect the marketability of client shares that we
own.

         As previously indicated, we are evaluating the viability of
distributing these types of dividends to our shareholders in the future. If we
undertake such distributions, these rules will be relevant to us.

Competition - Competition in the consulting industry is intense and many of our
competitors have greater financial resources than us. We expect that competition
will come from a wide variety of professional accounting and consulting firms as
well as consulting services offered by venture firms, incubators, investment
banks and others. We intend to compete based on the reputations and contacts of
our management and the competent and creative approach to services that we
offer. We also are prepared to accept shares of clients' common stock to satisfy
our fees. We believe that the ability of a client to receive services without
having to pay cash fees gives us a significant marketing advantage with many
emerging companies. However, the delays experienced by our clients in the
registration process indicate that we may be unable to avail ourselves of this
principal competitive advantage in the future. In contacting prospective
clients, we emphasized our management team's wide breadth of expertise, thereby
offering the expertise of persons with major national firm experience combined
with the hands on approach of a local firm.

         No assurances can be given that our competitive strategy will be
successful.

Personal Care and Nutrition

         In December 2000, we established a subsidiary, Blue Marble World, Inc.,
to sell personal care and nutrition products through a direct marketing chain of
independent distributors. The independent distributors are expected to purchase
products from Blue Marble World's website or by use of faxes or a toll-free
telephone number. Blue Marble World has developed a family of products and
production techniques which we believe are distinctive, developed a distributor

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compensation plan and entered into arrangements with a contract manufacturer and
a fulfillment center. A substantial portion of our resources during the
six-months ended June 30, 2001 was devoted to the development of products, a
website, software associated with our distributor compensation program,
marketing materials and the final design of the distributor compensation plan.
These tasks are expected to be completed in 2003 .

         Blue Marble World filed a Registration Statement with the Securities
and Exchange Commission in June 2001 pursuant to a plan to distribute
approximately 81% of Blue Marble World's stock to our shareholders as a
dividend. Accordingly, Blue Marble World is reflected as a discontinued
operation in the accompanying consolidated financial statements. This
registration statement is currently in the process of review but there is no
assurance that it will be declared effective by the SEC and that such
distribution will occur.

Safety Products

Recent developments - During the past two years, many companies that are or were
based on Internet-sales strategies have experienced significant financial
problems and many have ceased operations. At the same time, these companies have
found that economic and financial market conditions have made it nearly
impossible to raise additional capital. Many of our initial customers were using
us to provide products that supplemented the principal supply or blanket orders
previously placed with large competitors. Many of these customers were involved
in the semiconductor or microprocessor businesses. The slumps in those
industries substantially reduced those companies' needs to supplement orders
placed under blanket purchase orders with other suppliers. Our order flow
declined significantly beginning during the quarter ended June 30, 2001 and
continued during the entire year ended June 30, 2002

         During the first quarter of fiscal 2002, we introduced a new product
under our high technology and specialty products plan. This product, which is
designed to help protect corporate mailrooms as well as the home, is our patent
pending MailSafe Containment Chamber. It is designed to allow an individual to
open mail or standard size overnight packages in a confined airtight
environment. MailSafe is air tight by design and testing and allows the operator
to view the envelope or package in safety from airborne material release. We
have applied for a provisional patent on our MailSafe Containment Chamber
product. We subsequently have been informed by Seavisions of South Florida, Inc.
that it claims to have filed for patent protection for a similar product before
we did. Based on the advice of our patent counsel, we believe that our
application for a provisional patent should be granted; however, no assurance
can be given in this regard. A significant demand for MailSafe has not
materialized after our marketing efforts were seriously impeded by regulatory
concerns when the product was initially introduced. We have sold 31 units. The
sale of MailSafe units is not profitable at that low level of production. In
addition, our limited experience makes it less likely that we will emphasize
engineered designed products in the future.

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<PAGE>

         The foregoing developments have resulted in our ongoing reassessment of
the Safety Products Business. We are currently exploring our strategic options
and have not come to any conclusion. Our options being considered are:

o        Separate the safety products and consulting businesses into different
         entities;

o        Merge the safety product business with a larger business in need of a
         e-business or distribution strategy (in which case the other entity
         might manage the combined businesses);

o        Continue the business without committing significant financial and
         other resources that can best be used expanding the consulting
         business; or

o        Some other alternatives not yet identified.

         Unless one or more of our products becomes highly successful, we are
likely to incur operating losses and negative cash flow during the next fiscal
year on this area of our business because of the current slack demand.

o        General Business Approach - We developed a distribution and selling
         system, incorporating elements of a traditional distribution business
         using catalogs, independent sales representatives and telemarketing
         with a business-to-business e-commerce site on the world wide web.

         Our business model was designed to take advantage of the Internet as a
selling medium. We believe that the Internet offers significant potential
long-term opportunities in the areas of e-commerce, including the ability to
reach a large potential market without the need for substantial advertising
expenditures.

         Our website is located at www.esafetyworld.com and has more than 15,000
SKUs. Customers who do not use the website can continue to order via toll free
telephone numbers or by facsimile. Sales from our website and other sources
continue to be minimal.

Market Niches and Background - We initially identified two initial market
niches:

Industrial safety and hazardous worksites--We sell products to "end users," that
are involved in manufacturing and construction. Use of these products has in
large part resulted from the adoption of OSHA and other governmental safety
standards and the awareness of industry and the general public for the need to
provide worker protection against hazardous materials contained in industrial
facilities, schools and buildings.

         These products include coveralls, shirts, pants, headwear, hoods,
aprons, smocks, lab coats, hazardous material handler suits, examination gowns,
sleeves, shoe covers and related items, as well as industrial first aid kits and
products.

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Research laboratories and controlled environment facilities--Controlled
environment facilities are one of the most effective approaches to achieving a
contamination controlled environment. A controlled environment facility is a
specially designed area in which particulate presence and environmental
conditions are carefully maintained. Controlled environment facilities are used
for product manufacture and assembly, testing, research and development,
packaging, aseptic processing and to perform medical/surgical procedures.
Controlled environment facilities are generally operated and maintained under
strict procedures to minimize the risk of introducing foreign particles. The
greatest demand for controlled environment products and services has been and
continues to be in the manufacture and assembly of products based on modern
technology. The semiconductor market is the largest market for clean rooms and
other contamination control products, as integrated circuits can be rendered
ineffective by minute particles, undetectable to the human eye, and must be
discarded.

         Most colleges and universities, as well as many companies maintain
research laboratories that require similar products as are required by
controlled environment facilities.

         We offer for sale a large variety of disposable items, including hats,
coats, boots and gloves and general laboratory supply items, that are used in
laboratories and critical environment facilities. We have also designed a series
of workstations, work benches, air showers and other accessories used in
controlled environment facilities. These items are manufactured to our
specifications by third party contractors. The demand for these manufactured
products fell significantly during the quarter ended June 30, 2001 and continued
throughout the year ended June 30, 2002.

Marketing - Our business plan was designed to offer customers a complete buying
and customer service solution. Specifically, we have provided an ordering
methodology that fits the needs and preferences of many types of customers or
potential customers. In addition, each selling effort is designed to encourage
customers to use or become familiar with our e-commerce site and our related
sales and customer service capabilities.

         We distributed traditional catalogs to the purchasing agents of
customers as well as to selected targeted customers and contacts made at
tradeshows. We also distribute CD-ROMS that contain the same information as our
catalog and includes a hot link to our website. This has not proven to be an
effective way to market the products.

Customer Service - We believe that a high level of customer service and support
is critical to retaining and expanding our customer base and encouraging repeat
purchases. A customer service representative is available five days a week to
provide customer assistance via e-mail or telephone.

Order Fulfillment and Vendors - A significant element of our strategic plan
involves having vendors drop ship products directly to our customers. Drop
shipment eliminates our requirements to maintain and store inventory. Our
understanding with all of our principal vendors calls for these vendors to drop
ship products directly to our customers. Products are purchased using purchase

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orders or verbal agreements. No long-term supply agreements, including
obligations to purchase inventory, exist. None of our arrangements is on a
commission or contingency basis. In every case, we are billed by our vendor
based on standard industry or negotiated terms and, in turn, bill our customers
in the same way. Our failure to collect from our customers in no way alleviates
or reduces our obligation to our vendors. There can be no assurances that we
will continue to be successful in negotiating these arrangements with vendors.

         Our success depends on our ability to have access to products in
sufficient quantities at competitive prices. Vendors may offer exclusive
allocations of product to distributors for limited periods of time. Some
potential vendors have their own online commerce efforts, which may eliminate or
reduce our ability to get sufficient product allocations from these vendors.
Competitors may also be able to secure products from vendors on more favorable
terms, fulfill customer orders more efficiently and adopt more aggressive
pricing or inventory availability policies than us. Our business will be
adversely affected if we are not able to offer our customers sufficient
quantities of products in a timely manner or have access to products at
acceptable prices and terms.

Competition - We believe that there are hundreds of competitors selling products
that are similar to those sold by us based on listings in industry catalogs,
including the Thomas Register. The National Safety Council, a trade organization
of manufacturers and distributors, has over 15,000 members. The most significant
national competitor is Grainger Inc., a distributor of industrial safety
products, which distributes through stores, catalogs and a website. There are
also significant competitors in each other product niche in which we
participate. Many of our other competitors are regional companies selling
through catalogs and independent sales representatives.

Software and Computer Resources

         Our strategy has been and is to license or otherwise obtain
commercially available technology and outsource services whenever possible
rather than seek internally developed solutions.

         In early 2001, we started to take steps to move our websites to our own
servers with backup capabilities in St. George, Utah in order to be able to:

o        Have access to a proprietary database that can be used for the website,
         catalogs and CD-ROMs;

o        Be able to increase the online customer service capabilities, add a
         message board and provide investor relation information on a timely and
         cost effective basis;

o        Be able to make timely changes and additions to the database without
         incurring significant incremental costs; and

o        Host websites designed for its consulting clients.

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         We have also increased our in-house capabilities to print catalogs and
marketing materials and create CD-ROMs.

Security

         We use the secure socket layer or "SSL" transaction protocol to protect
sensitive information transferred to and from our servers. SSL is currently used
for most web-based e-commerce projects to protect credit card and other
processing. The servers used by us may be vulnerable to computer viruses,
physical or electronic break-ins and similar disruptions. Our business may be
adversely affected by customers' perceptions of Internet security or if our
security measures do not prevent security breaches.

Personnel

         We have three full-time employees and officers at September 13, 2002.
Our strategic plan is to use dedicated consultants and to outsource as many
functions as possible. Growth is not expected to result in significant increases
in personnel.

Other Strategies

         If the issues described above relating to our consulting practice are
not resolved satisfactorily during the first half of the fiscal year ending June
30, 2003, we will have to consider other alternatives and strategies that may
offer benefits to our Company and shareholders before we exhaust our financial
resources completely. These alternatives will include, but not be limited to,
merger or joint venture opportunities. No such options have been discussed or
sought nor has any entity been engaged or authorized to seek such possible
transactions on our behalf.

Item 2 -- PROPERTIES

         We operate out of rented office space located at 80 Orville Drive,
Bohemia, NY 11716. The lease, which expires in October 2003 calls for minimum
monthly payments of approximately $1,900. The monthly rental also covers certain
communications, clerical and administrative services. We believe that our
existing facilities are adequate for our operations for the foreseeable future.

Item 3 -- LEGAL PROCEEDINGS

         In December 2001, the Securities and Exchange Commission initiated an
investigation of the Company. The investigation closely followed a decision by
NASDAQ to de-list the Company's common stock. As of this date, no charges have
been brought or threatened by the SEC against the Company or any individual as a
result of the investigation.

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         On March 7, 2002, Norwood Venture Corp. ("Norwood") commenced an action
in the Supreme Court of the State of New York, County of New York, against the
Company and various other defendants, including eSAFETYWORLD, Edward A. Heil and
K. Ivan F. Gothner. In this action, Norwood, a purported creditor of the now
defunct Laininaire has asserted a fraudulent conveyance claim against the
Company in connection with the Company's acquisition of certain intangible
assets from Laminaire in 1999 (the "1999 transaction"). The complaint also
asserts fraudulent conveyance and breach of fiduciary duty claims against
Messrs. Heil and Gothner in connection with the 1999 transaction. In addition,
the complaint asserts fraudulent misrepresentation and negligent
misrepresentation claims against Messrs. Heil and K. Ivan F. Gothner in
connection with an alleged February 2000 transaction in which Norwood allegedly
gave up a lien on certain Laminaire property in exchange for a lien on Laminaire
accounts receivable and inventory and other consideration. However, it does not
appear that such claims are asserted against Mr. Heil or Mr. Gothner in their
capacity as officers and/or directors of eSAFETYWORLD. After the commencement of
this action, the parties entered into negotiations to resolve the dispute. While
negotiations have continued, the parties have signed various stipulations
extending defendants' time to respond to the complaint.

Item 4 -- SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

                                      None

                                     Part II

Item 5 -- MARKET FOR OUR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

         We completed our initial public offering in February 2000. In December
2001, we were delisted from trading by The Nasdaq Stock Market Inc. because we
failed to timely file our Annual Report on Form 10-KSB, as required by Nasdaq
Marketplace Rules and because Nasdaq has also alleged that we may have violated
other Nasdaq Marketplace Rules, including the failure to pre-clear all press
releases with Nasdaq Stockwatch prior to dissemination. Our shares are now
quoted on the OTC Pinksheets under the symbol "SFTY." As a result, an investor
may find it more difficult to dispose of or obtain accurate quotations as to the
market value of our securities.

         Our stock is currently considered to be a "penny stock." Rule 15g-9
establishes the definition of a "penny stock," for purposes relevant to us, as
any equity security that has a market price of less than $5.00 per share or with
an exercise price of less than $5.00 per share, subject to a limited number of
exceptions such as being listed on a national exchange. For any transaction
involving a penny stock, unless exempt, the penny stock rules require that:

o        a broker or dealer approve a person's account for transactions in penny
         stocks;  and

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o        the broker or dealer receive from the investor a written agreement to
         the transaction setting forth the identity and quantity of the penny
         stock to be purchased.

In order to approve a person's account for transactions in penny stocks, the
broker or dealer must:

o        obtain financial information and investment experience and objectives
         of the person; and

o        make a reasonable determination that the transactions in penny stocks
         are suitable for that person and that person has sufficient knowledge
         and experience in financial matters to be capable of evaluating the
         risks of transactions in penny stocks.

         The broker or dealer must also deliver, prior to any transaction in a
penny stock, a disclosure schedule prepared by the SEC relating to the penny
stock market, which, in highlight form sets forth:

o        the basis on which the broker or dealer made the suitability
         determination; and

o        that the broker or dealer received a signed, written agreement from the
         investor prior to the transaction.

Disclosure also has to be made about:

o        the risks of investing in penny stock in both public offering and in
         secondary trading, and

o        commissions payable to both the broker-dealer and the registered
         representative, current quotations for the securities and the rights
         and remedies available to an investor in cases of fraud in penny stock
         transactions.

Finally, monthly statements have to be sent disclosing recent price information
for the penny stock held in the account and information on the limited market in
penny stocks.

          The table below sets forth the high and low sale prices for our common
stock since the completion of our public offering. The information reflects
inter-dealer prices, without retail mark-ups, mark-downs or commissions and may
not necessarily represent actual transactions.



                                       13

<PAGE>

     Quarter ended:                              High                  Low

     Fiscal 2000:
     March 31, 2000                            $9 1/2               $6 1/2
     June 30, 2000                              6 1/2                2 1/8

     Fiscal 2001:
     September 30, 2000                       2 15/16                 11/4
     December 31, 2000                       2 31/100             1 31/100
     March 31, 2001                          1 17/100               69/100
     June 30, 2001                            1 13/25                  3/4

     September 30, 2001                        1 3/50                  2/5
     December 31, 2001                          19/50                  2/5
     March 31, 2002                             41/50                 1/10
     June 30, 2002                             27/100               19/200

         There are approximately 1,200 stockholders of record of our common
stock. As of September 30, 2002, the last sale price of our common stock was
$.02. Interested parties can download copies of this annual report and future
quarterly reports from our website at www.esafetyworld.com.

         We have never paid cash dividends on our capital stock and do not
anticipate paying cash dividends in the foreseeable future. We currently intend
to retain any future earnings for reinvestment in our business. Any future
determination to pay cash dividends will be at the discretion of our board of
directors and will be dependent upon our financial condition, results of
operations, capital requirements and other relevant factors.

Item 6 -- MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
          FINANCIAL CONDITION

Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995

         Information set forth herein contains "forward-looking statements"
which can be identified by the use of forward-looking terminology such as
"believes," "expects," "may," "should" or "anticipates" or the negative thereof
or other variations thereon or comparable terminology, or by discussions of
strategy. No assurance can be given that the future results covered by the
forward-looking statements will be achieved. We caution readers that important
factors may affect our actual results and could cause such results to differ
materially from forward-looking statements made by or on our behalf. Such
factors include, but are not limited to, changing market conditions, the impact
of competitive products, pricing, acceptance of our products and other risks set
forth herein and in other filings that we make with the Securities and Exchange
Commission.

                                  Risk Factors

We have a limited operating history, have incurred significant operating losses
and anticipate continued losses.

                                       14
<PAGE>

          We have a limited operating history which has been materially and
adversely impacted by significant operating losses, changes in the economic
environment for e-business and ability to access capital. These changes have
resulted in a change in the focus of our business. Our independent auditors have
indicated that, in their opinion, these factors raise substantial doubt about
our ability to continue as a going concern. Management is reviewing all aspects
of the Company's operations in an effort to identify potentially profitable
opportunities and will seek additional funding if necessary. However, there are
no assurances that we will be successful in any of these endeavors.

We do not know whether our basic business strategy will succeed before our
resources are exhausted.

         If the issues relating to our consulting practice are not resolved
satisfactorily during the first half of the fiscal year ending June 30, 2003, we
will have to consider other alternatives and strategies that may offer benefits
to our Company and shareholders before we exhaust our financial resources
completely. These alternatives will include, but not be limited to, merger or
joint venture opportunities. No such options have been discussed or sought nor
has any entity been engaged or authorized to seek such possible transactions on
our behalf. We may be unable to resolve the issues affecting our consulting
practice and may be unable to implement a successful alternative strategy in
which case we may be unable to continue in business.

The distribution of Blue Marble World's shares may result in taxable gain to
eSAFETYWORLD which will have to pay the tax.

         The dividend of Blue Marble World's shares to our shareholders will be
a taxable event to eSAFETYWORLD. If we incur any corporate tax as a result of
this dividend, we may be forced to increase our debt or issue equity to pay the
tax, and there can be no assurance that these sources of funding will be
available. An increase in debt could negatively impact our financial position
and future results of operations.

Recipients of distributions of shares of Blue Marble World or shares of our
consulting clients may be confronted by potential taxation matters.

         We advise consulting clients who have the option to satisfy their
obligations to us through the issuance of shares that we may, but are not
obligated to, distribute to our shareholders as dividends. Any such dividends
and distributions received are taxable to our shareholders as ordinary income
for federal income tax purposes provided that we have current or accumulated
earnings and profits. We believe that the fair market value of a client's shares
will be established by subsequent trading, if any, that develops with respect to
such shares. However, the distribution is taxable even if a trading market for
the shares never develops. We accept shares of our client's common stock in
payment of fees for services which equates to a negotiated value of per share.
There can be no assurances that this negotiated price will in any way reflect
the price at which the shares will trade after the effectiveness of applicable
registration statements.

                                       15
<PAGE>

         The foreign, state and local tax consequences of receiving a
distribution may differ materially from the federal income tax consequences
described above. Shareholders should consult their tax advisor.

We may be unable to execute our dividend distribution strategy.

         The process of distributing shares of stock received from clients to
our shareholders as dividends has been delayed. We may exhaust our financial
resources before client registration statements are declared effective. In
addition, several clients have withdrawn registration statements because of the
delays and associated costs. These clients may be unable or unwilling to refile
registration statements if related issues involving other clients are resolved
satisfactorily. If such client shares are not distributed to our shareholders as
dividends, they may not be resold by us without registration under the
Securities Act.

         If a client that issues us shares is deemed to be a blank check
company, such client will have to comply with Rule 419 promulgated under the
Securities Act. Rule 419 includes within the definition of a blank check company
a company that is a "development stage company." Generally, a "development stage
company" is a company whose planned principal operations have not commenced or
whose planned principal operations have commenced, but there has been no
significant revenue therefrom. In that case, the shares that we receive would
not be subject to Rule 144 and would require registration prior to resale. There
are a significant number of restrictions placed on the sale of securities issued
by blank check companies that would make resale difficult or impossible even if
the shares are registered.

Any dividend of shares received from consulting clients will result in taxable
gain to us which will have to pay the tax.

         Any dividend of clients' shares will be a taxable event to us. If we
incur any corporate tax as a result of any dividend of those shares to our
shareholders, we may be forced to increase our debt or issue equity to pay such
tax, and there can be no assurance that these sources of funding will be
available. An increase in debt could negatively impact our financial position
and future results of operations.

We may not be able to conduct our consulting business as initially planned, if
at all.

         Our management has devoted a substantial portion of its time and
resources to the issues relating to the registration and distribution process of
the shares to be received from consulting clients. The initial concept was to
distribute shares received to our shareholders as a dividend in a way that we
believed had the potential to benefit both the client and our shareholders,
although the realization of benefits was not and never could be assured. The
concept has required a large commitment of time and resources to clear the
regulatory process. Based on the time already devoted to clearing client
registration statement, it is possible that we may exhaust our resources before
these registration statements are cleared. These delays have caused us to cease
accepting new clients and may ultimately result in the failure of the consulting
initiative.

                                       16
<PAGE>

Our future consulting engagements with clients, if any, may not be profitable.

         When making proposals for engagements, we plan to estimate the costs
and timing for completing the projects. These estimates will reflect our best
judgment regarding the efficiencies of our methodologies and professionals as we
plan to deploy them on projects. Any increased or unexpected costs or
unanticipated delays in connection with the performance of these engagements,
including delays caused by factors outside our control, could make these
contracts less profitable or unprofitable, which would have an adverse effect on
our profit margin.

         In addition, as consultants, a client will typically retain us on an
engagement-by-engagement basis, rather than under long-term contracts, and a
substantial majority of our contracts and engagements may be terminated by the
client with short notice and without significant penalty. Furthermore, because
large client projects in the future involve multiple engagements or stages,
there is a risk that a client may choose not to retain us for additional stages
of a project or that a client will cancel or delay additional planned
engagements. These terminations, cancellations or delays could result from
factors unrelated to our work product or the progress of the project, but could
be related to business or financial conditions of the client or the economy
generally. When contracts are terminated, we lose the associated revenues and we
may not be able to eliminate associated costs in a timely manner.

         In many cases, we may receive equity securities of our client in
satisfaction of our fee. These clients will often be small and have illiquid
markets or no markets for their securities. As a result we may be unable to sell
the shares or convert them to a more liquid asset.

The consulting and information technology markets are highly competitive, and we
may not be able to compete effectively.

         The management consulting, general business advisory services, and
e-business and technology services markets in which we will operate include a
large number of participants and are highly competitive. Our primary competitors
include:

o        large and regional accounting, consulting and other professional
         service firms;

o        information technology service providers;

o        application service providers;  and

o        local consulting arms within venture capital and similar firms.

                                       17
<PAGE>

There are no assurances that we will be able to compete in this marketplace in
the foreseeable future.

We may face damage to our professional reputation or legal liability if our
future clients are not satisfied with our services.

         As a professional services firm, we will depend to a large extent on
our future relationships with our clients and our reputation for high-caliber
professional services and integrity to attract and retain clients. As a result,
if a client is not satisfied with our services or products it, may be more
damaging in our business than in other businesses. Moreover, if we fail to meet
our contractual obligations, we could be subject to legal liability or loss of
client relationships. We expect that our contracts will typically include
provisions to limit our exposure to legal claims relating to our services and
the applications we develop, but these provisions may not protect us or may not
be enforceable in all cases. No assurances can be given that we will retain
clients in the foreseeable future.

We may need financing which may not be available.

         We do not have an established source of equity or debt financing. We
may require financing to establish our consulting services business and
implement our strategic plan. There can be no assurance that financing will be
available or found. If are unable to obtain financing, we may be unable to
achieve consistently profitable operations.

         Further, even if our consulting services business is successful, we may
not receive sufficient payments in cash from clients or may distribute all
shares of stock received to our shareholders, in which case we may be unable to
generate sufficient cash to meet our operating requirements.

         If we are unable to obtain financing or if the financing we do obtain
is insufficient to cover any operating losses we may incur, we may substantially
curtail or terminate our operations or seek other business opportunities through
strategic alliances, acquisitions or other arrangements that may dilute the
interests of existing stockholders.

Shareholders may be diluted significantly through our efforts to obtain
financing and satisfy obligations.

         We have no committed source of financing. Wherever possible, we will
attempt to use noncash consideration to satisfy obligations. In many instances,
we believe that the noncash consideration may consist of shares of our stock. In
addition, if a more liquid trading market develops for our common stock, we may
attempt to raise capital by selling shares of our common stock, possibly at a
discount to market. These actions will result in dilution of the ownership
interests of existing shareholders, and that dilution may be material.

                                       18
<PAGE>

Operations

         We had no revenue generating history prior to July 1, 1999. In August
1999, we acquired intangible assets, including customer and vendor lists, from
the Distribution Product Group of Laminaire Corporation. We devoted the period
starting in July 1999 and thereafter to developing our business plan, designing
and completing an e-commerce website, establishing fulfillment systems,
developing marketing tools and catalogs and establishing infrastructure. We
adopted a cautious approach in implementing our strategies because we were aware
of the experience of other smallcap and Internet companies as well as market
conditions made it obvious that further access to the capital markets would be
extremely difficult. Therefore, we became increasingly committed to a strategy
that does not require a high level of fixed costs or require major cash outlays
to establish brand recognition. We completed an initial public offering of our
common stock in February 2000.

         During the fourth calendar quarter of 2000, our evaluation of market
conditions as well as the capital markets caused us to consider augmenting our
initial business focus in order to increase the likelihood of successfully
achieving our business goals. As a result, we decided to take advantage of the
existing core skills of our management team and expand into two new areas,
personal care and nutrition products and business consulting. Neither of these
areas requires substantial capital commitments.

Safety Products Business - We market and distribute disposable industrial
safety, laboratory and critical environment products to companies whose
employees work in manufacturing, construction or critical environments and may
be exposed to environmental hazards. We operate a Business-to-Business
e-Commerce site over the Internet and also offer our customers ordering
solutions by making toll free numbers and catalogs available for customers who
prefer traditional ordering methods.

         During the past year, many companies that are or were based on
Internet-sales strategies have experienced significant financial problems. At
the same time, these companies have found that economic and financial market
conditions have made it nearly impossible to raise additional capital. Many of
our initial customers were using us to provide products that supplemented the
principal supply or blanket orders previously placed with large competitors.
Many of these customers were involved in the semiconductor or microprocessor
businesses. The slumps in those industries substantially reduced those
companies' needs to supplement orders placed under blanket purchase orders with
our competitors. Our order flow declined significantly during the year ended
June 30, 2002. We do not believe that this decline is short-term in nature and,
accordingly, wrote-off substantially all of the carrying value of goodwill
associated with this aspect of our business resulting in a net charge to
earnings of $ 1,063,386.

         The foregoing developments have resulted in our ongoing reassessment of
the Safety Products Business. We are currently exploring our strategic options
and have not come to any conclusion. Our options being considered are:

                                       19
<PAGE>

o        Separate the safety products and consulting businesses into different
         entities;

o        Merge the safety product business with a larger business in need of an
         e-business or distribution strategy (in which case the other entity
         might manage the combined businesses);

o        Continue the business without committing significant financial and
         other resources that can best be used expanding the consulting
         business; or

o        Some other alternatives not yet identified.

         Unless one or more of our products becomes highly successful, we are
likely to incur operating losses and negative cash flow during the next fiscal
year on this area of our business because of the current slack demand. The
executive principally responsible for our product business accepted an executive
position with another company effective May 20, 2002 and has not been replaced.

Consulting Program - Our management has devoted a substantial portion of its
time and resources to the issues relating to the registration and distribution
process of the shares to be received from consulting clients. The initial
concept was to distribute shares received to the Company's shareholders in a way
that we believed had the potential to benefit both the client and our
shareholders, although the realization of benefits was never and could never be
assured. The concept has required a large commitment of time and resources to
clear the regulatory process. We believe that we have resolved satisfactorily
many of the significant issues and concerns of which we are aware. We, together
with clients, continue to discuss client-specific issues . However, there are no
assurances that the current open issues will be resolved satisfactorily or that
new issues and concerns will not arise or that issues that we believe have been
resolved satisfactorily may reopen.

         The uncertainties and delays that have arisen appear, in our opinion,
to be related to our intent to distribute shares received from clients as
dividends to our shareholders and the fact that our business model calls for us
to work multiple engagements simultaneously. Therefore, we are considering a
policy of not distributing the shares if all issues pertaining to the proposed
distributions are not resolved shortly. Even if the issues are resolved
satisfactorily, we may decide not to distribute some or all shares received in
the future, particularly the shares of startup or development stage companies.
We plan to concentrate our efforts on established small and medium-sized
companies having no affiliation to any officer or director. If we receive shares
of stock from consulting clients and opt not to distribute those shares to our
shareholders, the estimated value of the shares will be recorded as revenue upon
receipt. If no market exists for those shares, they will initially be recorded
at the cost incurred to perform the work and such initial evaluation will be
reviewed for reasonableness and impairment whenever events or changes in
circumstances indicate that the related carrying amount may not be recoverable.

                                       20
<PAGE>

If required, impairment losses are recognized based on the excess of the asset's
carrying value over its fair value. We have established reserves and allowances
for account balances associated with clients whose carrying values are impaired
because client-specific issues have been raised during the registration review
process. As of June 30, 2002, we have recognized no revenues from our consulting
projects and have established write-downs and allowances of $636,360 in
connection with projects whose carrying values are impaired because they have
been delayed or postponed by clients or which have had client-specific issues.

         We have not significantly marketed our consulting services. All of our
engagements have been referrals based on our management's contacts. We will not
solicit or accept any new client engagements until or unless all open issues
have been satisfactorily resolved. This means that the consulting initiative may
not go forward if we ultimately lack the resources necessary to resolve the
issues satisfactorily. As part of this initiative, we had made convertible loans
to Harbor Ridge Communications, Inc., a public relations firm that we believed
would provide quality and professional services to our clients. The delays
relating to our client registration statements have caused us to reconsider this
strategy. Continued participation in the Harbor Ridge project would require
additional financial and management resources. Given that we do not know whether
our clients will ever be in a position to benefit from those services, we have
opted to discontinue our participation in the Harbor Ridge initiative and
write-off our investment resulting in a charge to operations of $545,338.

         On February 11, 2002, we agreed to acquire, subject to regulatory
approvals, a broker dealer for a purchase price of $37,000. If the regulatory
approvals were received, the broker dealer was to be used to perform appropriate
ministerial functions in the distribution of dividends and to give us the option
to consider expanding our corporate finance service offerings within the
consulting initiative. There was never any plan of performing any retail
brokerage functions. Subsequently, we believe that we satisfactorily resolved
the regulatory questions concerning the need for a broker dealer to be involved
in the dividend distribution process and do not believe that such involvement is
required. The delays and other issues associated with our consulting initiatives
have caused us to re-evaluate the potential current benefits of expanding our
consulting service offerings. We have, therefore, opted not to proceed with the
broker-dealer initiative and have established a reserve against the entire
purchase price.

Discontinued Operations - Personal Care and Nutrition - In December 2000, we
established a subsidiary, Blue Marble World, Inc., to sell personal care and
nutrition products through a direct marketing chain of independent distributors.
The independent distributors will purchase products from Blue Marble World's
website or by use of faxes or a toll-free telephone number. Blue Marble World
has developed a family of products and production techniques that we believe to
be distinctive, developed a distributor compensation plan and entered into an
agreement with a contract manufacturer and a fulfillment center. A substantial
portion of Blue Marble World's resources since inception were devoted to the
development of products, a website, software, marketing materials and the final
design of the distributor compensation plan.

         In June 2001, we filed a registration statement with the Securities and
Exchange Commission for the purpose of spinning off approximately 81% of Blue
Marble World's shares to eSAFETYWORLD's shareholders as a dividend. Accordingly,
Blue Marble World is reflected as a discontinued operation in the accompanying
financial statements.

                                       21
<PAGE>

Results of Operations

General:

Year ended June 30, 2002 compared to year ended June 30, 2001

         A significant portion of the Company's manpower and financial resources
during the 2002 period were devoted to the development of MailSafe and the
issues surrounding our delisting by NASDAQ. We incurred costs aggregating
$378,684 in reviewing and responding to NASDAQ and the SEC during that period.

         In addition, the manpower devoted to dealing with questions raised by
NASDAQ significantly reduced the resources available to devote to the consulting
engagements.

Revenue and Cost of Product Revenues

         Revenue and cost of revenues were not significant in either period. The
Company was not successful in increasing product sales in a generally depressed
economy.

Loss from Operations

The loss from operations in the 2002 period was caused by:

o        Unexpected delays and problems that prevented us from recognizing
         revenues from the consulting business;

o        Costs aggregating $378,684 relating to dealing with regulatory issues;
         and

o        The ongoing decline in safety products orders.

These factors resulted in us:

o        Not recognizing revenue on consulting engagements; and

o        Writing down substantially goodwill, investments and costs relating to
         the consulting initiative and previously recorded deferred income tax
         benefits. These writedowns aggregated $2,681,551

                                       22
<PAGE>

Outlook

         We are likely to incur operating losses and negative cash flow for the
foreseeable future unless the registration statements filed by consulting
clients are declared effective and liquid markets develop for the shares of
client stock that we receive. We cannot predict the likelihood or timing of
these events occurring. However, we believe that our strategy must be based on
developing the consulting business and overcoming the delays in realizing
revenues from that business. No assurances can be given as to our likelihood of
success in this regard. If we are unable to accomplish the goals of our
consulting initiative in the next few months, we will need financing. If we are
unable to obtain financing or if the financing we do obtain is insufficient to
cover our operating losses, we may substantially curtail or terminate our
operations or seek other business opportunities through strategic alliances,
acquisitions or other arrangements that may dilute the interests of existing
stockholders.

         If the issues described above relating to our consulting practice are
not resolved satisfactorily during the first half of the fiscal year ending June
30, 2003, we will have to consider other alternatives and strategies that may
offer benefits to our Company and shareholders before we exhaust our financial
resources completely. These alternatives will include, but not be limited to,
merger or joint venture opportunities. No such options have been discussed or
sought nor has any entity been engaged or authorized to seek such possible
transactions on our behalf.

Liquidity and Capital Resources

         We believe that the remaining net proceeds of our initial public
offering are sufficient to satisfy our working capital and business development
requirements for at least the next six months.

         We have no commitments for financing. We intend to engage the services
of an investment banking firm to assist us in raising capital if needed,
although no assurances can be given that we will be successful in those efforts.
We may pursue discretionary drawdown equity lines of credit or similar
facilities if our common stock begins to trade at sufficient volumes. However,
no assurances can be given that we will be successful in obtaining an equity
facility or any other investment capital if needed.

Seasonality

         The demand for many of our distribution products is seasonal. Our
customers have a reduced demand for products in the summer and during December
because many of our customers' employees take vacation, plants are often closed
during a portion of that period and there is a general reduction of business
activity in those months.

         We do not yet have a basis to determine whether our consulting business
will be seasonal.

Recent Accounting Pronouncements

         No new pronouncement issued by the Financial Accounting Standards
Board, the American Institute of Certified Public Accountants or the Securities
and Exchange Commission is expected to have a material impact on our financial
position or reported results of operations.

                                       23
<PAGE>

         In July 2001, the Financial  Accounting  Standards Board ("FASB")
issued Statement of Financial  Accounting  Standards No. 141 ("SFAS 141"),
Business  Combinations.  SFAS No. 141 requires the purchase  method of
accounting  for business  combinations  initiated after  June 30,  2001 and
eliminates  the  pooling-of-interest  method.  The  adoption  of SFAS No.  141
did not have an impact on the financial statements.

         In July 2001, the FASB issued Statement of Financial Accounting
Standards No. 142, Goodwill and Other Intangible Assets ("SFAS No. 142"), which
is effective for fiscal years beginning after December 15, 2001. SFAS 142
requires, among other things, the discontinuance of goodwill amortization. In
addition, the standard includes provisions upon adoption for the
reclassification of certain existing recognized intangibles as goodwill,
reassessment of the useful lives of existing recognized intangibles,
reclassification of certain intangibles out of previously reported goodwill and
the testing for the impairment of existing goodwill and other intangibles. We
wrote-off substantially all goodwill during the year ended June 30, 2002.
However, we probably would have had a significant write-off under pre-existing
accounting principles as well..

         In August 2001, the FASB issued Statement of Financial Accounting
Standards No. 143, Accounting for Asset Retirement Obligations ("SFAS No. 143"),
which is effective for all fiscal years beginning after June 15, 2002; however,
early adoption is encouraged. The FASB issued Statement of Financial Accounting
Standards No. 144, Accounting for the Impairment or Disposal of Long-Lived
Assets ("SFAS 144") which is effective for fiscal years beginning after December
15, 2001 and supersedes SFAS 121 while retaining many of its requirements. The
adoption of SFAS No. 143 and 144 did not have an impact on the financial
statements.

         In October 2001, the FASB issued Statement of Financial Accounting
Standards No. 144 ("SFAS 144"), Accounting for the Impairment or Disposal of
Long-Lived Assets, which supersedes Statement of Financial Accounting Standards
No. 121 ("SFAS 121"), Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to be Disposed Of and certain provisions of APB Opinion No.
30, Reporting Results of Operations - Reporting the Effects of Disposal of a
Segment of a Business and Extraordinary, Unusual and Infrequently Occurring
Events and Transactions. SFAS 144 requires that long-lived assets to be disposed
of by sale, including discontinued operations, be measured at the lower of
carrying amount or fair value, less cost to sell, whether reported in continuing
operations or in discontinued operations. SFAS 144 also broadens the reporting
requirements of discontinued operations to include all components of an entity
that have operations and cash flows that can be clearly distinguished,
operationally and for financial reporting purposes, from the rest of the entity.
The provisions of SFAS 144 are effective for fiscal years beginning after
December 15, 2001. The implementation of these standards is not expected to
impact on the Company's results of operations and financial position.

                                       24
<PAGE>

         In April 2002, the FASB issued Statement of Financial Accounting
Standards No. 145 ("SFAS 145") Rescission of FASB Statements Nos. 4, 44 and 64,
Amendment to FASB Statement No. 13 and Technical Corrections, which rescinds
FASB Statement No. 4, Reporting Gains and Losses from Extinguishment of Debt,
and an amendment of that Statement, FASB Statement No. 64, Extinguishments of
Debt Made to Satisfy Sinking-Fund Requirements. This Statement rescinded FASB
Nos. 4 and 64 which required that all gains and losses from the extinguishment
of debt be aggregated and, if material, be reported as an extraordinary item,
net of related income tax effects. This Statement also rescinds FASB Statement
No. 44, Accounting for Intangible Assets of Motor Carriers and amends FASB
Statement No. 13, Accounting for Leases, to eliminate an inconsistency between
the required accounting for sale-leaseback transactions and the required
accounting for certain lease modifications that have economic effects that are
similar to sale-leaseback transactions. This Statement also amends other
existing authoritative pronouncements to make various technical corrections.
Management does not believe that the adoption of this Statement will have a
material effect on our financial statements.

         In June 2002, the FASB issued Statement of Financial Accounting
Standards No. 146, Accounting for Costs Associated with Exit or Disposal
Activities ("SFAS 146"). SFAS 146 addresses significant issues regarding the
recognition, measurement, and reporting of costs associated with exit and
disposal activities, including restructuring activities. SFAS 146 also addresses
recognition of certain costs related to terminating a contract that is not a
capital lease, costs to consolidate facilities or relocate employees and
termination benefits provided to employees who are involuntarily terminated
under the terms of a one-time benefit arrangement that is not an ongoing benefit
arrangement or an individual deferred compensation contract. SFAS 146 is not yet
effective and the impact of adoption on the Company's financial position or
results of operations has not been determined.

         In November 2001, the Emerging Issues Task Force reached a consensus to
issue FASB Staff Announcement Topic No. D-103, which was re-characterized in
January 2002 as EITF Issue No. 01-14, Income Statement Characterization of
Reimbursement Received for Out-of-Pocket Expenses Incurred. This consensus
clarifies that reimbursements received for out-of-pocket expenses incurred
should be classified as revenue in the statement of operations. This consensus
should be applied in financial reporting periods beginning after December 15,
2001. Upon application of this consensus, comparative financial statements for
prior periods should be reclassified to comply with the guidance in this
consensus. The adoption of this consensus did not have a material effect on our
results of operations.

         On April 30, 2002, the SEC proposed a disclosure requirement for
companies to include a separately-captioned section regarding the application of
critical accounting policies in the "Management's Discussion and Analysis"
(MD&A) section of annual reports, registration statements and proxy and
information statements. The Application of Critical Accounting Policies section
would encompass both disclosure about the critical accounting estimates that are
made by the company in applying its accounting policies and disclosure
concerning the initial adoption of an accounting policy by a company.

                                       25
<PAGE>

         The SEC's proposals define an accounting estimate recognized in the
financial statements as a "critical accounting estimate" if:

o        the  accounting  estimate  requires a company to make  assumptions
         about  matters  that are highly  uncertain at the time the accounting
         estimate is made; and

o        different estimates that a company reasonably could have used in the
         current period, or changes in the accounting estimate that are
         reasonably likely to occur from period to period, would have a material
         impact on the presentation of a company's financial condition, changes
         in financial condition or results of operations.

The proposals would also require the following information in the MD&A section:

o        A quantitative discussion of changes in line items in the financial
         statements and overall financial performance if the company were to
         assume that the accounting estimate were changed, either by using
         reasonably possible near-term changes in certain assumption(s)
         underlying the accounting estimate or by using the reasonably possible
         range of the accounting estimate;

o        A quantitative and qualitative discussion of any material changes made
         to the accounting estimate in the past three years, the reasons for the
         changes, and the effect on line items in the financial statements and
         overall financial performance;

o        A statement of whether or not the company's senior management has
         discussed the development and selection of the accounting estimate, and
         the MD&A disclosure regarding it, with the audit committee of the
         company's board of directors;

o        If the company operates in more than one segment,  an identification of
         the segments of the company's  business the accounting estimate
         affects; and

o        A discussion of the estimate on a segment basis, mirroring the one
         required on a company-wide basis, to the extent that a failure to
         present that information would result in an omission that renders the
         disclosure materially misleading.

The proposals also would include a requirement that companies update this part
of the required disclosure to show material changes in their quarterly reports.

Item 7A -- QUANTATATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

         We do not use the interest rate derivative instruments to manage
exposure to interest rate changes.


                                       26
<PAGE>

Item 8 -- FINANCIAL STATEMENTS

         The financial statements filed as part of this Annual Report on Form
10-KSB are set forth starting on page 44.

Item 9 -- CHANGES AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
          DISCLOSURE

         On February 14, 2002, Eichler Bergsman & Co., LLP ("Eichler") advised
eSAFETYWORLD, Inc. that it was resigning as our auditors. Eichler's letter
stated: "Please be advised that our decision is based on business reasons and
not because of a disagreement with management regarding accounting principles."
Subsequently, we received letters from Eichler referring to, among other things,
"disagreements." The report of Eichler on our fiscal 2001 and 2000 financial
statements contained no adverse opinion, disclaimer of opinion or modification
of the opinion. While we did not consider the items referred to in Eichler's
Second Letter or Third Letter as the subject matter of disagreements,
particularly in light of Eichler's First Letter, we authorized Eichler to
respond fully to the inquiries of our successor accountant with respect thereto.
The matters referred to in Eichler's Second Letter and Third Letter were not the
subject of discussion between Eichler and our Audit Committee or Board of
Directors.

         While we did not consider the items referred to in Eichler's Second
Letter or Third Letter as the subject matter of disagreements, particularly in
light of Eichler's First Letter, we authorized Eichler to respond fully to the
inquiries of our successor accountant with respect thereto. The matters referred
to in Eichler's Second Letter and Third Letter were not the subject of
discussion between Registrant's Audit Committee or Board of Directors and
Eichler.

         We engaged Feldman Sherb & Co., P.C. ("Feldman Sherb") as our new
independent accountants as of February 14, 2002. During the two most recent
fiscal years and through February 14, 2002, we did not consult Feldman Sherb
regarding (i) the application of accounting principles to a specified
transaction, either completed or proposed, or the type of audit opinion that
might be rendered on our consolidated financial statements, and no written or
oral advice was provided to us that was an important factor considered by us in
reaching a decision as to an accounting, auditing or financial reporting issue;
or (ii) any matter that was either the subject of a "disagreement" or "event"
referred to in Eichler's Second Letter or Third Letter.

         In May 2002,  Sherb & Co.,  LLP. was formed and included  the  partners
and staff from Feldman  Sherb with whom we worked.  At that time we engaged
Sherb & Co. to be our independent auditors.

                                       27
<PAGE>

                                    PART III

DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS COMPLIANCE WITH
SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934

         Our executive officers and directors are as follows:

Name                                  Age      Position and Offices

Edward A. Heil                        51       Chairman, president and chief
                                               executive officer
R. Bret Jenkins                       43       Director, secretary, and chief
                                               financial officer
K. Ivan F. Gothner                    44       Director
Bridget C. Owens                      45       Director
Steven W. Schuster                    48       Director


         Set forth below is a brief description of the background of our
executive officers and directors, based on information provided by them to us.

Edward A. Heil is a founder of eSAFETYWORLD and has been our president and a
director since 1997. He is a certified public accountant and a managing
director, since January 1992 of EH Associates, LLC, a financial consulting firm.
From 1984 through December 1991 he was a partner in the accounting firm,
Deloitte & Touche, LLP. From 1973 to 1984 he was employed in various
professional capacities by Deloitte & Touche, LLP. Mr. Heil holds Bachelor of
Arts and Master of Business Administration degrees from New York University. Mr.
Heil is also a director of The StockGame Company, a client of ours. EH
Associates, LLC has a consulting contract to provide us with management and
financial services, pursuant to which Mr. Heil provides services.

R. Bret Jenkins is a founder of  eSAFETYWORLD  and has been a director since
1997 and became chief  financial  officer in October 1999. He has been in the
private  practice of securities and general  business law for the past 15 years.
Mr. Jenkins holds Bachelor of Arts and Juris Doctorate  degrees from the
University of Utah.  JPJ, Inc., a consulting  firm  controlled by Mr. Jenkins,
has a contract to provide us with business services.

K. Ivan F. Gothner became a director in September 2001 and is a managing
director and a founder of Adirondack Capital, LLC, a private merchant banking
firm established in 1993 that focuses on serving small and midsize growth
companies. In this capacity, Mr. Gothner performs consulting services for
emerging and small public companies. Mr. Gothner was associated with Kleinwort
Benson Limited, an investment banking firm, in 1986 and, from 1987 through 1990,
Mr. Gothner acted as the general manager of the KB Mezzanine Fund, LP., a
specialized fund. In 1990, Mr. Gothner joined Barclays Bank as a Senior Vice
President responsible for establishing an investment banking unit to serve small
and mid sized companies. Upon the sale of Barclays' "middle market" business at
the end of 1992, Mr. Gothner began to work independently in this area. Mr.
Gothner holds BA and MA degrees from Columbia University and also serves as a
director of Business Continuity Services Group, Inc. and The StockGame Company,
two of our clients.

Bridget  C. Owens has been a  director  since June 1999.  She  served as
special  assistant  to the board of  directors  of  Laminaire Corporation  from
1995 to February 2000.  Prior to that she was director of marketing for
Independent  Network Group,  Inc in 1994 and for Primac Inc., a privately-held
transportation company from 1992-1993.  Prior to Primac, Ms. Owens owned and
operated a trucking and transportation  company.  Ms. Owens currently operates a
consulting  business,  EDK Associates,  that provides  administrative  support
services.

                                       28
<PAGE>

Steven W. Schuster has been a director since August 1999. He has been a member
of McLaughlin & Stern, LLP since 1995. From 1997 through 1999, he was secretary
of Laminaire. Mr. Schuster has practiced corporate and securities law for the
past 20 years. He received a Bachelor of Arts degree from Harvard University and
a Juris Doctorate from New York University.

         Two officers and directors resigned effective September 30, 2002 in
order to devote their fulltime efforts to other endeavors:

James  Brownfiel  was an officer from August 1999 until May 2002. He became a
director in September  2000.  From 1996 to 1999, he was a general  manager for
Deshler  Mechanical  Corp.  From 1995 to 1996, he was a District  Manager for
Ferguson  Enterprises.  From 1994 to 1995, he was a project manager for Porter
Brothers Inc. He is a graduate of the University of Notre Dame. Mr.  Brownfiel
is Mr. Heil's son-in-law.

Claire A. Heil is a certified public accountant and became a Director and Chief
Administrative Officer in September 2000. Prior to that, she held professional
accounting positions at PriceWaterhouseCoopers, LLP, Wright Griffin Davis & Co.
and the University of Michigan. She is a graduate of the University of Notre
Dame and is Mr. Heil's daughter.

Board of Directors

         All directors hold office until the completion of their term of office,
which is not longer than three years, or until their successors have been
elected. We have a staggered board of directors. All officers are appointed
annually by the board of directors and, subject to existing employment
agreements, serve at the discretion of the board.

         The board of directors has an audit committee and compensation
committee. The audit committee reviews the results and scope of the audit and
other services provided by our independent auditors, review and evaluate our
system of internal controls. The compensation committee will manage our stock
option plan and review and recommend compensation arrangements for our officers.

         All directors are reimbursed by us for any expenses incurred in
attending directors' meetings. We also have officers and directors liability
insurance.


                                       29
<PAGE>

Item 10 -- Executive Compensation

         No officer, director or employee has received compensation of $100,000,
and no director, officer or employee has a contract or commitment to receive
annual compensation in excess of $100,000 except as described below:

     The following table summarizes the salaries and benefits paid to our
officers.

                                                     Long Term
                                                 Compensation Awards  Payouts

                        Annual Compensation (1)
                    -----------------------------
Name and                                  Other   Restr  Options           All
Principal                                 Annual  icted  /SARs     LTIP   Other
Position            Year  Salary(a) Bonus Compens Stock  (b)       Pay   Compens
                                          ation   Awards           outs   ation
                                                   ($)
                    ----   -------- ----  ------- ------  ----     ----  -------
Edward A. Heil      2002   $150,832  -0-  $12,000
                    2001   $140,000  -0-  $12,000   --     --       --       --
                    2000     28,717  -0-    3,000   --     --       --       --

R. Bret Jenkins     2002   $127,500  -0-    2,640
                    2001   $120,000  -0-    2,807   --     --       --       --
                    2000     25,000  -0-      -0-   --     --       --       --

James Brownfiel     2002    108,967  -0-   12,000
                    2001     90,494  -0-   12,000   --     --       --       --
                    2000     13,834  -0-    3,000   --     --       --       --

Claire A. Heil      2002    116,992  -0-    3,298
                    2001     73,267  -0-    2,674   --     --       --       --
                    2000        -0-  -0-      -0-   --     --       --       --

K. Ivan F. Gothner  2002     78,000  -0-    1,857   --     --       --       --
                    2001     12,000  -0-      -0-   --     --       --       --
                    2000        -0-  -0-      -0-   --     --       --       --


(a)      Represents amounts paid under consulting arrangements to entities
         controlled by our officers or direct employment agreements. The other
         compensation relates principally to the estimated cost of health care
         benefits.
(b)      Messrs.  Heil and Jenkins each have options to purchase  105,000
         shares and Mr.  Brownfiel  and Ms. Heil each have options to purchase
         80,000  shares.  All  options are  exercisable  at a price of $.87 per
         share,  the fair market  value at the date of grant. All options are
         exercisable. No options have been exercised through September 30, 2002.

                                       30
<PAGE>


                                 Equity Compensation Plan Information

                                                            Number of securities
                      Number of             Weighted-       remaining available
                      securities to         average         for future issuance
                      be issued upon        exercise price  under equity
                      exercise of           of outstanding  compensation plans
                      outstanding options,  options,       (excluding securities
                      warrants and rights   warrants and     reflected in column
                                            rights           (a))

Plan category             (a)                 (b)                 (c)
Equity compensation
plans approved by
security holders
Equity compensation
plans not approved
by security holders     450,000               $.87               450,000

Total                   450,000               $.87               450,000

         We have a stock option plan that expires in 2009 and enables us to
grant incentive stock options, non-qualified options and stock appreciation
rights for up to an aggregate of 450,000 shares of our common stock. The plan
was approved prior to the completion of our initial public offering and was
disclosed in the Registration Statement on Form SB-2 relating to that initial
public offering. Incentive stock options granted under the plan must conform to
applicable federal income tax regulations and have an exercise price not less
than the fair market value of shares at the date of grant or 110% of fair market
value for ten percent or more stockholders. Other options and stock appreciation
rights may be granted on terms determined by the compensation committee of the
board of directors.

         We have issued 450,000 options to our officers, directors and
consultants at an exercise price of $.87 per share, the closing price on the
date that such options were granted. All options were granted in October 2000
and are exercisable. No options have been exercised.

Consulting Agreements

         We have an agreement with EH Associates, LLC, an entity associated with
Mr. Heil, under which we will pay annual consulting fees of not less than
$150,000 in each of the three years in the period ending March 31, 2004. Mr.
Heil receives no compensation from us beyond the payments to EH Associates . The
contract automatically rolls over for one year on each anniversary date unless
terminated. Mr. Heil currently devotes an average of 50 to 60 hours per week to
us. In October 2002 the consulting agreement with EH Associates was amended to
reduce the term to one year commencing November 1, 2002 due to the diminished
resources of the Company and provides for payment at consultant's option.

         We have an agreement with JPJ, Inc., an entity associated with Mr.
Jenkins, under which we have agreed to pay minimum annual fees of $120,000 in
each of the three years in the period ending March 31, 2004 for legal, financial
and other business services. Mr. Jenkins receives no compensation from us beyond
the payments to JPJ, Inc. The contract automatically rolls over unless
terminated. Mr. Jenkins currently devotes an average of not less than 30 hours
per week to us. The contract automatically rolls over for one year on each
anniversary date unless terminated. In October 2002 the consulting agreement
with JPJ, Inc. was amended to reduce the term to one year, commencing November
1, 2002, due to the diminished resources of the Company and provides for payment
at consultant's option.

                                       31
<PAGE>

         We have an agreement with Adirondack Capital, LLC, an entity associated
with Mr. Gothner, under which we have agreed to pay minimum annual fees of
$120,000 in each of the three years in the period ending March 31, 2004 for
financial and other business services. Mr. Gothner receives no compensation from
us beyond the payments to Adirondack Capital, LLC. The contract automatically
rolls over unless terminated. Mr. Gothner currently devotes an average of 35
hours per week to us. The contract automatically rolls over for one year on each
anniversary date unless terminated.

         We have an agreement with EDK Associates, LLC under which we have
agreed to pay annual fees of not less than $52,000 in each of the three years in
the period ended July 31, 2003 for administrative, marketing and investor
relations services. Ms. Owens, a director, is the managing member and sole owner
of EDK Associates, LLC.

         We had entered into a three-year agreement with CH Associates, LLC, an
entity controlled by Ms. Heil that became effective at June 15, 2001 and calls
for minimum annual fees of not less than $100,000, as well as reimbursement of
business expenses. Ms. Heil currently devotes an average of 45 to 50 hours per
week to us and receives no other compensation from us. The contract
automatically rolls over for one year on each anniversary date unless
terminated. CH Associates, LLC requested that we terminate the agreement in
September 2002, and we agreed to do so.

Stock Option Grants in Fiscal 2001

         The following table sets forth the:

         o        number of shares underlying options granted during fiscal 2001
                  to the named executive officers,

         o        percentage that the option grant represents of the total
                  number of options granted to all of our employees during
                  fiscal 2001,

         o        per share exercise price of each such option, and

         o        expiration date of each such option.

                                       32
<PAGE>


                                 Percentage of
              Number of Shares   Total Options
             Underlying Options  Granted to
               Granted during    Employees in     Exercise       Expiration
Name             Fiscal 2001     2001              Price            Date
-------------- ----------------  -------------    ---------      -----------
Edward A. Heil    105,000           23.3             $.87           2010
R. Bret Jenkins   105,000           23.3             $.87           2010
James Brownfiel    90,000           20.0             $.87           2010
Claire A. Heil     90,000           20.0             $.87           2010

No options were granted during fiscal 2002. None of the options have been
exercised through September 30, 2002.

Conflicts of interest

         Certain of our key personnel are not required to commit full time to
our affairs and, accordingly, these individuals may have conflicts of interest
in allocating management time among their various business activities. In the
course of their other business activities, certain key personnel may become
aware of investment and business opportunities which may be appropriate for
presentation to us, as well as the other entities with which they are
affiliated. As such, they may have conflicts of interest in determining to which
entity a particular business opportunity should be presented.

         Each officer and director is, so long as he or she is officer or
director subject to the restriction that all opportunities contemplated by our
plan of operation that come to his or her attention, either in the performance
of their duties or in any other manner, will be considered opportunities of, and
be made available to us and the companies that he or she is affiliated with on
an equal basis. A breach of this requirement will be a breach of the fiduciary
duties of the officer or director. If we or the companies to which the officer
or director is affiliated each desire to take advantage of an opportunity, then
the applicable officer or director would abstain from negotiating and voting
upon the opportunity. However, the officer or director may still take advantage
of opportunities if we should decline to do so. Except as set forth above, we
have not adopted any other conflict of interest policy in connection with these
types of transactions.

Indemnification of Officers and Directors

         Section NRS 78.7502 of Nevada law provides that:

o        A  corporation  may, with certain  exceptions,  indemnify any person
         who was or is a party or is threatened to be made a party to  any
         threatened,  pending  or  completed  action,  suit  or  proceeding,
         whether  civil,  criminal,   administrative  or investigative,  if he
         acted in good faith and in a manner  which he  reasonably  believed  to
         be in or not opposed to the best interests of the corporation,  and,
         with respect to any criminal action or proceeding,  had no reasonable
         cause to believe his conduct was unlawful. The termination of any
         action, suit or proceeding by judgment,  order, settlement,  conviction
         or upon a plea of nolo contendere or its  equivalent,  does not, of
         itself,  create a presumption  that the person is liable pursuant to
         NRS 78.138 or did not act in good  faith and in a manner  which he
         reasonably  believed  to be in or not  opposed to the best interests of
         the corporation,  or that, with respect to any criminal action or
         proceeding,  he had reasonable cause to believe that his conduct was
         unlawful.

                                       33
<PAGE>

o        A corporation  may indemnify any person who was or is a party or is
         threatened to be made a party to any  threatened,  pending or
         completed  action or suit by or in the right of the  corporation  to
         procure a judgment in our favor by reason of the fact that he is or was
         a  director,  officer,  employee  or agent of the  corporation,  or is
         or was  serving at the request of the corporation as a director,
         officer,  employee or agent of another  corporation,  partnership,
         joint venture,  trust or other enterprise  against  expenses,
         including  amounts paid in settlement and attorneys' fees actually and
         reasonably  incurred by him in  connection  with the defense or
         settlement  of the action or suit if he acted in good faith and in a
         manner  which he reasonably  believed to be in or not opposed to the
         best  interests of the  corporation.  Indemnification  may not be made
         for any  claim,  issue or  matter  as to which  such a  person  has
         been  adjudged  by a court of  competent  jurisdiction,  after
         exhaustion of all appeals  therefrom,  to be liable to the  corporation
         or for amounts paid in settlement to the  corporation, unless  and only
         to the  extent  that  the  court in  which  the  action  or suit  was
         brought  or other  court of  competent jurisdiction  determines  upon
         application  that in view of all the  circumstances  of the case,  the
         person  is fairly  and reasonably entitled to indemnity for such
         expenses as the court deems proper.

To the extent that a director, officer, employee or agent of a corporation has
been successful on the merits or otherwise in defense of any action or in
defense of any claim, issue or matter therein, the corporation shall indemnify
him against expenses, including attorneys' fees, actually and reasonably
incurred by him in connection with the defense.

         NRS 78.751 generally provides that, with respect to any discretionary
indemnification pursuant to NRS 78.7502, the articles of incorporation, the
bylaws or an agreement made by the corporation may provide that the expenses of
officers and directors incurred in defending a civil or criminal action, suit or
proceeding must be paid by the corporation as they are incurred and in advance
of the final disposition of the action, suit or proceeding, upon receipt of an
undertaking by or on behalf of the director or officer to repay the amount if it
is ultimately determined by a court of competent jurisdiction that he is not
entitled to be indemnified by the corporation. The provisions of this subsection
do not affect any rights to advancement of expenses to which corporate personnel
other than directors or officers may be entitled under any contract or otherwise
by law.

         NRS 78.752 provides that a corporation may purchase and maintain
insurance or make other financial arrangements on behalf of any person who is or
was a director, officer, employee or agent of the corporation, or is or was
serving at the request of the corporation as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust or other

                                       34
<PAGE>

enterprise for any liability asserted against him and liability and expenses
incurred by him in his capacity as a director, officer, employee or agent, or
arising out of his status as such, whether or not the corporation has the
authority to indemnify him against such liability and expenses.

         The other financial arrangements made by the corporation pursuant to
subsection 1 may include the following:

o        The creation of a trust fund.

o        The establishment of a program of self-insurance.

o        The securing of our obligation of indemnification by granting a
         security interest or other lien on any assets of the corporation.

o        The establishment of a letter of credit, guaranty or surety.

No financial arrangement made pursuant to this subsection may provide protection
for a person adjudged by a court of competent jurisdiction, after exhaustion of
all appeals therefrom, to be liable for intentional misconduct, fraud or a
knowing violation of law, except with respect to the advancement of expenses or
indemnification ordered by a court.

         Our bylaws provide that we shall indemnify its officers, directors,
employees and other agents to the fullest extent permitted by Nevada law. In
addition, our certificate of incorporation provides that, to the fullest extent
permitted by Nevada law, our directors will not be liable for monetary damages
for breach of the directors' fiduciary duty of care to us or our shareholders.
This provision in the certificate of incorporation does not eliminate the
directors' duty of care, and in appropriate circumstances equitable remedies
including as an injunction or other forms of non-monetary relief would remain
available under Nevada law. Each director will continue to be liable for breach
of the director's duty of loyalty to us or our shareholders, for acts or
omissions not in good faith or involving intentional misconduct, for knowing
violations of law, for any transaction from which the director derived an
improper personal benefit and for improper distributions to shareholders. In
addition, this provision does not affect a director's responsibilities under any
other laws, including federal securities laws or state or federal environmental
laws.

         We have been advised that in the opinion of the SEC, this type of
indemnification is against public policy as expressed in the Securities Act of
1933 and is, therefore, unenforceable. In the event that a claim for
indemnification against these types of liabilities, other than the payment by us
of expenses incurred or paid by a director, officer or controlling person in the
successful defense of any action, suitor proceeding, is asserted by a director,
officer or controlling person in connection with the securities being
registered, we will submit the question of whether indemnification by us is
against public policy to an appropriate court and will be governed by the final
adjudication of the case.

                                       35
<PAGE>

ITEM 11 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED SHAREHOLDER MATTERS

         The following table sets forth information known to us regarding
beneficial ownership of our common stock as of September 30, 2002 by:

o        each person known or believed by us to own, directly or beneficially,
         more than 5% of our common stock,

o        each of our directors, and

o        all of our officers and directors as a group.

         Except as otherwise indicated, we believe that the beneficial owners of
the common stock listed below, based on information furnished by the owners,
have sole investment and voting power over to the shares.


Name of beneficial owner (1)      Number of shares           Percent of shares
                                     owned                      owned (3)


Edward A. Heil                      443,000                        14.77

R. Bret Jenkins (2)                 330,000                        11.00

James Brownfiel (3)                  73,500                         2.45

Claire A. Heil (3)                   73,500                         2.45

Steven W. Schuster                  100,000                         3.34

Bridget C. Owens                     50,000                         1.67

Directors and Officers As         1,070,000                        36.51
a Group (6 people)


1.       The  address  for all other  officers  and  directors,  except Mr.
         Schuster,  is 80 Orville  Drive,  Bohemia,  NY 11716.  Mr. Schuster's
         address is 260 Madison Avenue, New York, NY 10016.

2.       JPJ,  Inc. owns 225,000  shares.  It is an entity  controlled by Mr.
         Jenkins.  Shares held by it are  beneficially  owned and controlled by
         Mr. Jenkins.

3.       Mr. Brownfiel and Ms. Heil resigned as directors effective September
         30, 2002.

Item 12 -- CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Agreements with Blue Marble World - eSAFETYWORLD and Blue Marble World signed a
Business Management Agreement, as revised in September 2001, which requires Blue
Marble World to pay a management fee to eSAFETYWORLD in a sum equal to 10% of
Blue Marble World's gross revenues with a minimum monthly base fee of $3,500.
Payment shall be made monthly and may be made, at Blue Marble World's option, in
cash or shares of Blue Marble World's common stock. If payment is made in common
stock, eSAFETYWORLD shall have demand registration rights which may be exercised
once in each 12 month period. The number of shares that will be issuable will be

                                       36
<PAGE>

based on the closing bid price of Blue Marble World's shares on the last
business day of each month. If no bid price exists, the number of shares
issuable will be based on a price of $.50 per share. In addition, eSAFETYWORLD
shall be reimbursed for the costs incurred by it for outside contractors and
consultants. The agreement covers three years and automatically rolls over for
an additional year at the end of each contract year unless terminated by one of
the parties. Rates to be paid are to be renegotiated on each contract
anniversary date.

         At June 30, 2002, Blue Marble World owes eSAFETYWORLD an aggregate of
$368,019. The Amended Master Distribution Agreement between the two companies
stipulates that the liability to eSAFETYWORLD shall be paid from 50% of the
proceeds of any capital infusion that Blue Marble World obtains. If the balance
due to eSAFETYWORLD is not repaid in full by June 30, 2003, the remaining unpaid
balance shall be paid, without interest, in 12 equal monthly installments
commencing on July 1, 2003. If we are unable to pay the balance by June 30,
2004, the unpaid balance may, at eSAFETYWORLD's option, be converted into shares
of our common stock at a price per share equal to the closing average bid price
of such shares during the first 20 days of trading, If eSAFETYWORLD converts
amounts due it at any point after July 1, 2004, it shall have demand
registration rights with respect to the shares received upon conversion. Blue
Marble World shall pay all registration costs.

Other Transactions and Agreements

o        EH  Associates,  LLC  has a  contract  with us for  consultation  for
         financial  and  management  services.  Mr.  Heil is the controlling
         shareholder of EH Associates, LLC

o        JPJ Inc. has a contract with us for  consultation  for financial  and
         management  services.  Mr.  Jenkins is the  controlling shareholder of
         JPJ Inc.

o        CH Associates,  LLC has a contract with us for consultation for
         financial and management  services.  Ms. Heil, the daughter of Edward
         A. Heil,  is the  controlling  shareholder  of CH  Associates,  LLC.
         This  agreement was  terminated by both parties in September 2002.

o        EDK Associates,  LLC has a contract with us for administrative,
         marketing and investor relations  services.  Ms. Owens is the managing
         member and sole owner of EDK Associates, LLC.

o        Adirondack  Capital,  LLC has a contract with us for  consultation for
         financial and management  services.  Mr. Gothner is the controlling
         shareholder of Adirondack Capital, LLC.

                                       37
<PAGE>

         All future material affiliated transactions and future loans and loan
guarantees with our officers, directors, 5% shareholders, or their respective
affiliates, will be on terms that are as favorable to us as those generally
available from unaffiliated third parties.

         Additionally, we have and will maintain at least two independent
directors on our board of directors. All future significant transactions with
and loans to affiliates shall be approved or ratified by a majority of our
independent directors and other directors who do not have an interest in the
transactions and who, in certain instances, will have access, at our expense, to
counsel.

                                       38
<PAGE>

                                     PART IV

                        Exhibits and Reports on Form 8-K

a.       Exhibits

INDEX TO EXHIBITS


Number             Description

3.1                Registrant's Articles of Incorporation dated July 21, 1997*
3.2                Registrant's Amendment to Articles of Incorporation dated
                   August 23, 1999*
3.3                Registrant's Certificate of Correction to Articles of
                   Incorporation dated November 19, 1999*
3.4                Registrant's By-laws*
4.1                Form of common stock certificate*
4.2                1999 stock option plan*
10.1               Asset Purchase Agreement with Laminaire Corp.*
10.2               Agreement with EH Associates, LLC*
10.3               Agreement with JPJ, Inc.*
10.4               Agreement with EDK, LLC*
10.6               Employment Agreement with James Brownfiel*
10.20              Amended Consulting Agreement with JPJ, Inc.**
10.21              Amended Employment Agreement with James Brownfiel**
10.22              Amended Agreement with EH Associates, LLC.***
10.23              Employment Agreement with Claire A. Heil***
10.24              Amended Agreement with EDK, LLC***
10.25              Agreement with KMB, LLC.***
10.26              Amended Agreement with EH Associates, LLC****
10.27              Amended Agreement with JPJ, Inc****
10.28              Amended Agreement with CH Associates, LLC****
10.29              Employment Agreement with James Brownfiel ****
10.30              Management Agreement with Blue Marble World, Inc.
10.31              Master Distribution Agreement between Blue Marble World, Inc.
                   and eSAFETYWORLD, Inc.
10.32              Amended Agreement dated June 15, 2001 with CH Associates, LLC
10.33              Harbor Ridge Agreement
10.34              Agreement with Adirondack Capital, LLC*****
10.35              Agreement with Concord Consulting
10.36              Amended Agreement with EH Associates
10.37              Amended Agreement with JPJ, Inc.

                                       39
<PAGE>

99.01              Certification of CEO pursuant to 18 U.S.C. Section 1350,
                   as adopted pursuant to Section 906 of the Sarbanes-Oxley Act
                   of 2002
99.02              Certification of CFO pursuant to 18 U.S.C. Section 1350,
                   as adopted pursuant to Section 906 of the Sarbanes-Oxley Act
                   of 2002

        * Filed with the Registrant's Registration Statement on Form SB-2.
       ** Filed with the Registrant's Report on Form 10-QSB for the Three Months
          Ended March 31, 2000 *** Filed with this Annual Report on Form 10-KSB.
     **** Filed with the Registrant's Report on Form 10-QSB for the Three Months
          Ended March 31, 2001
    ***** Filed with the Registrant's Report on Form 10-QSB for the Three Months
          Ended March 31, 2002

b.       Report on Form 8-K
                  NONE


                                       40
<PAGE>




Pursuant to the requirements of Section 13 or 15(d) of the Securities and
Exchange Act of 1934, the Company has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.


                                                     /s/ Edward A. Heil
                                                         ------------------
                                                         EDWARD A. HEIL
                                                  Title: President
                                                  Date:  10/ 11 /02

                                                     /s/ R. Bret Jenkins
                                                         --------------------
                                                         R. BRET JENKINS
                                                  Title: Chief
                                                         Financial Officer
                                                  Date:  10/11/02



         Directors

                                                     /s/ K.  Ivan F. Gothner
                                                         -------------------
                                                         K. IVAN F. GOTHNER
                                                  Title: Director
                                                  Date:  10/10/02


                                                     /s/ Bridget C. Owens
                                                         ----------------
                                                         BRIDGET C. OWENS
                                                  Title: Director
                                                  Date:  10/11/02



                                                     /s/ Steven W. Schuster
                                                         ------------------
                                                         STEVEN W. SCHUSTER
                                                  Title: Director
                                                  Date:  10/11/02


                                       41
<PAGE>

  CERTIFICATIONS FOR FORM 10-K/10-KSB FOR PERIODS ENDING BEFORE AUGUST 29, 2002

         I, Edward A. Heil, certify that:

         1. I have reviewed this annual report on Form 10-K/10-KSB of
eSAFETYWORLD, 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.

Date:    October 11, 2002

/s/ Edward A. Heil

Edward A. Heil
Chairman and President


I, R. Bret Jenkins, certify that:

         1. I have reviewed this annual report on Form 10-K/10-KSB of
eSAFETYWORLD, 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.

Date:    October 11, 2002


/s/ R. Bret Jenkins

R. Bret Jenkins
Chief Financial Office


                                       42
<PAGE>

                                TABLE OF CONTENTS



INDEPENDENT AUDITORS' REPORT..................................................44

CONSOLIDATED BALANCE SHEET....................................................45

CONSOLIDATED STATEMENTS OF OPERATIONS.........................................47

CONSOLIDATED STATEMENTS OF CASH FLOWS.........................................48

CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY................................49

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS....................................50







                                       43
<PAGE>



                          INDEPENDENT AUDITORS' REPORT

To the Stockholders of
eSAFETYWORLD, Inc.:

We have audited the accompanying consolidated balance sheet of eSAFETYWORLD,
Inc. and subsidiaries as of June 30, 2002, and the related consolidated
statements of operations, stockholders' equity and cash flows for each of the
two years in the period then ended. These financial statements are the
responsibility of eSAFETYWORLD's management. Our responsibility is to express an
opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the 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 audits provide a
reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of
eSAFETYWORLD, Inc. and subsidiaries as of June 30, 2002, and the results of
their operations and their cash flows for the years ended June 30, 2002 and 2001
in conformity with accounting principles generally accepted in the United States
of America.

The accompanying consolidated financial statements have been prepared assuming
that eSAFETYWORLD will continue as a going concern. As discussed in Note 2 to
the consolidated financial statements, eSAFETYWORLD has experienced losses and
negative cash flow since its inception and has an accumulated deficit.
eSAFETYWORLD will be dependent on additional financing to sustain its
activities, and there is no assurance that such financing will be available.
These factors raise substantial doubt about eSAFETYWORLD's ability to continue
as a going concern. Management's plans in regard to these matters are also
described in Note 2. The consolidated financial statements do not include any
adjustments that might result from the outcome of this uncertainty.

                                         /s/ Sherb & Co., LLP

New York, New York
August 21, 2002




                                      F-1                                     44
<PAGE>




                               eSAFETYWORLD, Inc.


                           CONSOLIDATED BALANCE SHEET

                                  JUNE 30, 2002

                                     ASSETS





    Current Assets:
    Cash and cash equivalents                                       $ 1,064,308
    Accounts receivable, net of allowance for doubtful
        accounts of $3,000                                               15,531
    Inventories                                                          37,978
    Prepaid expenses and other                                           71,026
                                                                    ------------
             Total Current Assets                                     1,188,843

    Property and equipment, less accumulated depreciation of
        $115,317                                                        348,557

    Acquired intangibles, less accumulated amortization of
        $1,261,069                                                       50,000

    Other assets                                                        196,196

    Certificate of deposit, collateralizing notes payable and
        credit facilities with bank                                     749,684
                                                                    ------------
    Total Assets                                                    $ 2,533,280
                                                                   =============





                 See Notes to Consolidated Financial Statements.

                                      F-2                                     45
<PAGE>



                               eSAFETYWORLD, Inc.


                           CONSOLIDATED BALANCE SHEET


                                  JUNE 30, 2002

                      LIABILITIES AND STOCKHOLDERS' EQUITY




Current Liabilities:
Accounts payable, accrued expenses, and other                         $ 210,711
                                                                   -------------

Long-Term Liabilities:
Capital lease obligation                                                  7,102
Secured notes payable to  bank                                          235.293
                                                                   -------------

Total Long-term Liabilities                                             242,395
                                                                   -------------


Total Liabilities                                                       453,106
                                                                   -------------

Stockholders' Equity:
Preferred stock, no par value, 1,000,000 shares authorized;
    none issued                                                               -
Common stock, $.001 par value, 20,000,000 shares
    authorized; 3,000,000 shares issued  and
    outstanding                                                           3,000
Additional paid-in capital                                            6,388,644
Accumulated deficit                                                  (4,311,470)
                                                                   -------------
          Stockholders' Equity                                        2,080,174
                                                                   -------------
Total Liabilities and Stockholders' Equity                          $ 2,533,280
                                                                   =============





                 See Notes to Consolidated Financial Statements

                                      F-3                                     46
<PAGE>
                               eSAFETYWORLD, Inc.

                      CONSOLIDATED STATEMENTS OF OPERATIONS




                                                    For the Years Ended June 30,
                                                    ----------------------------
                                                      2002                2001
                                                  ---------------- -------------
         Revenues                                   $177,905           $384,975
         Cost of revenues                            154,684            350,007
                                                  ---------------- -------------
          Gross profit                                23,221             34,968
                                                  ---------------- -------------

         Expenses and Other:
         Selling and administrative expenses       1,074,832            347,102
         Other:
              Amortization and impairments         2,552,651            115,021
               Regulatory  and legal costs           378,684             -
              Other-net (principally interest)       (67,517)          (232,160)
                                                 ----------------- -------------
         Total Expenses and Other                  3,938,650            229,963
                                                 ----------------- -------------

         Pretax Loss from Continuing Operations   (3,915,429)          (194,995)
         Income Taxes (Benefit)                      128,900            (62,000)
                                                 ----------------- -------------
         Loss From Continuing Operations          (4,044,329)          (132,995)

         Discontinued Operations - net               (55,420)          (110,401)
                                                 ----------------- -------------
         Net Loss                                $(4,099,749)         $(243,396)
                                                 ================= =============

         Basic and Diluted Loss Per Share:
            Continuing operations                    $(1.35)              $(.04)
            Discontinued operations                    (.02)               (.04)
                                                       -----               -----
            Total                                    $(1.37)            $ .(.08)
                                                     =======            ========

         Weighted average number of common and
         common equivalent shares
         outstanding                              3,000,000           3,000,000
                                                  =========           =========



                 See Notes to Consolidated Financial Statements.
                                      F-4                                     47
<PAGE>



                               eSAFETYWORLD, Inc.

                      CONSOLIDATED STATEMENTS OF CASH FLOWS



                                             For the Years Ended June 30,
                                          --------------------------------------
                                               2002                2001
                                          ------------------ -------------------
Cash flows from operating activities:
Loss from continuing operations           $(4,044,329)          $(132,995)
Adjustments to reconcile net loss to net
 cash used by operating activities:
Loss from discontinued operations,
 net of taxes                                 (55,420)           (110,401)
Depreciation and amortization and
 impairments                                2,624,874             157,941
Deferred tax benefit                          129,000            (124,000)
Decrease in accounts receivable                21,542              53,808
Increase in inventories                        (1,200)           (421,451)
Decrease in prepaid expenses and other           -                 47,999
Increase in other assets                     (365,716)          (109,613)
Increase in accounts payable, accrued
 expenses, and other                           77,810             87,100
                                          ------------------ -------------------
Net cash used by continuing operations     (1,613,439)          (551,612)
                                          ------------------ -------------------

Cash flows from investing activities:
Loans/investments                              (109,050)         (573,288)
(Increase) decrease in certificates
 of deposit                                     (11,487)        1,261,803
Purchase of software and equipment              (79,663)         (479,203)
                                          ------------------ -------------------
Net cash provided by (used in) investing
 activities                                    (200,200)          209,312
                                          ------------------ -------------------
Cash flows from financing activities:
Borrowings                                         -              319,886
Repayment of debt                               (51,860)          (25,631)
Settlement costs                                   -              (40,000)
                                          ------------------ -------------------
Net cash provided by (used in) financing
 activities                                     (51,860)          254,255
                                          ------------------ -------------------
Net decrease  in cash                        (1,865,499)          (88,045)
Cash and cash equivalents - beginning         2,929,807         3,017,852
                                          ------------------ -------------------
Cash and cash equivalents - ending           $1,064,308       $ 2,929,807
                                          ================== ===================

SUPPLEMENTAL INFORMATION:

            Cash paid for:
Income taxes                                    $ 1,919          $ 16,188
                                          ================== ===================

Interest                                        $13,945           $ 8,981
                                          ================== ===================

                 See Notes to Consolidated Financial Statements.

                                      F-5                                     48
<PAGE>



                               eSAFETYWORLD, Inc.



                 CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
                 FOR THE TWO YEARS ENDED JUNE 30, 2002 and 2001




                            Common Stock     Additional
                        --------------------  Paid-in    Accumulated
                          Shares     Amount   Capital     Deficit       Total
                        ---------   -------  ----------  ---------   ----------
Balance, July 1, 2000   3,000,000   $ 3,000 $ 6,428,644   $ 31,675   $6,463,319
Net loss                     -         -           -      (243,396)    (243,396)
Adjustment for
settlement of offering
costs                        -         -        (40,000)      -         (40,000)
                       ----------   ------- ----------- -----------  ----------
Balance, June 30, 2001  3,000,000     3,000   6,388,644    (211,721)  6,179,923

Net Loss                    -          -            -    (4,099,749) (4,099,749)
                       ----------   ------- ----------- ------------ ----------
Balance, June 30, 2002  3,000,000   $ 3,000 $ 6,388,644  $(4,311,470)$2,080,174
                       ==========   ======= ============ =========== ===========















                 See Notes to Consolidated Financial Statements.

                                      F-6                                     49
<PAGE>

                               eSAFETYWORLD, Inc.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 1--BUSINESS

         eSAFETYWORLD,  Inc.  was  incorporated  as a Nevada  corporation  in
July 1997 as The SL Group,  Inc.  and changed its name to eSAFETYWORLD, Inc. in
August 1999.  It completed an initial public offering of its common stock in
February 2000.

         The Company was initially engaged in the sale and distribution of
industrial safety, cleanroom, laboratory supply and first aid products on the
world wide web and through conventional use of catalogs and toll free telephone
numbers. The Company also began providing consulting services to other companies
in the summer of 2000. In December 2000, the Company established a subsidiary,
Blue Marble World, Inc., to sell personal care, personal first aid, and
nutrition products to independent distributors. It is in the process of spinning
off the shares of Blue Marble World, which remains in the development stage, to
its shareholders.

         Blue Marble World filed a registration statement with the Securities
and Exchange Commission in July 2001 pursuant to a plan by the Company to
distribute 81% of Blue Marble World's stock to eSAFETYWORLD's shareholders as a
dividend. Accordingly, Blue Marble World is reflected as a discontinued
operation in the accompanying financial statements. Throughout its existence,
Blue Marble World functioned as a startup or development stage company without
any revenues. A summary of Blue Marble World's operating activities for the
years ended June 30, 2002 and 2001 follows:

                                                          2002            2001
                                                         ------        ---------
Product development costs                              $  6,498        $ 52,966
Marketing costs                                            -             63,505
General and administrative                               48,922          64,930
                                                         ------        ---------
Pretax loss during the development stage                 55,420         181,401

Income tax (benefit)                                       -            (71,000)
                                                         ------         --------
Loss incurred during the development stage             $ 55,420        $110,401
                                                         ======         ========

The startup costs incurred relate principally to work performed by employees and
consultants of eSAFETYWORLD relating to the formulation of products, the design
and development of a website and software, the design and preparation of sales
literature and forms, and the establishment of a distribution network. Such
amounts were allocated to Blue Marble World at cost without any markup based on

                                      F-7                                     50
<PAGE>

the estimated percentage of time that each employee or consultant worked for the
benefit of Blue Marble World. The amount of estimated time and expense was
determined based on reference to specific time and expense reports. There were
no allocations of general overhead. Management believes that the allocation by
specific identification is reasonable.

At June 30, 2002, Blue Marble World's balance sheet consisted of:

ASSETS:

CURRENT ASSETS:
Inventories                                                            $ 37,978
Prepaid Expenses                                                         11,526

WEBSITE , COMPUTER and SOFTWARE                                          89,694
                                                                         ------

TOTAL ASSETS                                                          $ 139,198
                                                                       =========

LIABILITIES AND STOCKHOLDER'S DEFICIT:

Due to eSAFETYWORLD                                                   $ 368,019
Accounts Payable                                                            600

Common stock                                                              7,400

Accumulated deficit                                                    (236,821)
                                                                       --------
Total LIABILITIES AND STOCKHOLDER'S DEFICIT                           $ 139,198
                                                                       =========

NOTE 2--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         A summary of the Company's significant accounting and financial
reporting policies follows.

Principles of Consolidation - The accompanying consolidated financial statements
include the accounts of eSAFETYWORLD, Inc. and its subsidiary, Blue Marble
World, Inc. (collectively referred to herein as the "Company"). All intercompany
transactions and account balances are eliminated in consolidation. Through June
30, 2002, Blue Marble World's operations were limited to start-up activities.

                                      F-8                                     51
<PAGE>

Use of Estimates -- The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting periods. Actual results could differ from these estimates. The
principal assumptions inherent in the accompanying financial statements relate
to the realizability and life of the acquired intangibles that were
substantially written off during the year ended June 30, 2002, the value of
consideration received from consulting clients and the realizability of certain
investments. In future periods, the ultimate realizability and valuation of
assets, principally the equity securities issued by clients, received in
satisfaction for consulting services will involve assumptions and estimates.

Revenue Recognition -- Revenue for product sales is recognized in the period in
which the product is shipped.

         Long-term service contracts are generally agreements to provide
services over a period of time of one year or more and with respect to which the
Company has no contractual right to adjust the prices or terms at or on which
its services are supplied during the term of the contract without the consent of
the customer or client. The initial clients of the Company's consulting business
have opted to pay the Company by issuing shares of their common stock. The
Company decided to distribute a significant portion of the shares to be received
from its clients to its shareholders. Because of the Company's role in the
planned dividend distributions, during the fourth quarter of fiscal 2001, it
concluded that it is likely functioning as a statutory "underwriter" within the
meaning of Section 2(11) of the Securities Act of 1933 with respect to those
distributions. The Company may not be able to rely on the exemption afforded
under Section 4(2) of the Securities Act with respect to the receipt of such
shares from clients. In addition, the Company also concluded during the year
ended June 30, 2002 that clearing certain other technical matters pertaining to
the distribution process with applicable regulatory agencies would require more
time than had been anticipated. The changes in facts and circumstances that
arose during the fourth quarter of the fiscal year ended June 30, 2001 resulted
in the Company recognizing that more uncertainties existed than were originally
known or could have been known. Accordingly, in the quarter ended June 30, 2001
and thereafter it opted to change the means by which it estimated revenue on
consulting agreements from recognizing revenue as work is performed to
recognizing revenue after the shares to be received from clients have been
registered by clients and a market value has been established. All consulting
revenue recognized prior to March 31, 2001 was written off at June 30, 2001. No
consulting revenue has been recognized during the year ended June 30, 2002
because no registration statements filed by clients were deemed effective by the
SEC.

         If the Company receives shares of stock from consulting clients and
elects not to distribute those shares to its shareholders, the estimated value
of the shares will be recorded upon receipt. If no market exists for those
shares, they will initially be recorded at the cost incurred to perform the work
and such initial evaluation will be reviewed for reasonableness thereafter. If
we conclude that the issuer in which eSAFETYWORLD has an interest is or may be a
blank check company or the value is otherwise impaired, the carrying value of
such investment will be substantially reduced or written off.

                                      F-9                                     52
<PAGE>

Inventories - Product inventories consist of finished goods acquired from third
parties. Such costs, are stated at the lower of cost or market. Cost is
determined based on the first-in, first-out cost flow assumption.

 Advertising -- The Company charges advertising costs to expense as incurred.
Costs related to CD-ROMs, promotional literature and catalogs produced by
outside vendors are charged to operations when mailed or distributed.

Basic and Diluted Earnings (Loss) Per Share -- Basic earnings (loss) per common
and common equivalent share are calculated by dividing net income by the
weighted average number of common and common equivalent shares outstanding
during each period. The assumed exercise of options or convertible instruments
outstanding during both periods would have been antidilutive.

Fixed Assets - Fixed assets consist of the following at June 30, 2002:

                        Furniture and fixtures                         $ 10,812
                        Website development costs                       252,430
                        Software                                         48,731
                        Database                                         96,711
                        Equipment                                        10,015
                        Patent                                            9,201
                        Assets acquired under capital lease              35,974
                                                                      ----------
                        Total                                           463,874

                        Less - Accumulated depreciation                (115,317)
                                                                      ----------
                        Net                                            $348,557
                                                                      ==========


         Fixed assets are stated at cost less accumulated depreciation.
Depreciation is computed using the straight-line method based upon the estimated
useful life of five years.

         Website development costs are capitalized in accordance with Consensus
Position 00-2 of the Emerging Issues Task Force.

         Expenditures for repairs and maintenance are charged to expense as
incurred. Upon retirement, sale or other disposition of property and equipment,
the cost and accumulated depreciation are eliminated from the accounts and gain
or loss is included in operations.

Marketable Securities - The Company will classify equity securities received in
connection with its consulting business as available-for-sale in accordance with

                                      F-10                                    53
<PAGE>

the provisions of Statement of Financial Accounting Standards No. 115,
"Accounting for Certain Investments in Debt and Equity Securities." These
securities will be carried at fair market value, with unrealized gains and
losses reported in stockholders' equity as a component of other comprehensive
income (loss). Gains or losses on securities sold will be based on the specific
identification method and reported in operations in the period sold.

Long-lived Assets -- Long lived assets, including intangibles, to be held and
used are reviewed for impairment whenever events or changes in circumstances
indicate that the related carrying amount may not be recoverable. If required,
impairment losses on assets to be held and used are recognized based on the
excess of the asset's carrying value over its fair value. Long-lived assets to
be sold are reported at the lower of carrying amount or fair value reduced by
estimated disposal costs.

Intangibles - The intangible assets acquired from Laminaire Corporation were
being amortized on the straight-line basis over ten years. Statement No. 141 of
the Financial Accounting Standards Board, Business Combinations, and Statement
No. 142, Goodwill and Other Intangible Assets mandate that goodwill recorded on
corporate balance sheets, arising from acquisitions completed prior to June 30,
2001 should no longer be amortized. From the date of effectiveness of these
pronouncements, all goodwill will be accounted for using an impairment approach
which means that it will be written down only in periods in which the recorded
value of goodwill exceeds its fair value.

         The Company has experienced a material decline in the demand for its
disposable safety products and believes that such decline may not be short-term
in nature. Accordingly, it has written off $1,063,386, representing
substantially all of the carrying value of its goodwill at June 30, 2002.

Blue Marble Startup Costs - The costs directly associated with the startup of a
new subsidiary's business are charged to operations as incurred and are included
in Discontinued Operations in the accompanying Statements of Operations.

Statement of Cash Flows -- For the purposes of this statement, investments and
time deposits having an initial term of 90 days or less are considered to be
cash equivalents.

         The Company maintains substantially all of its cash and certificates of
deposit with one bank. The aggregate cash balances maintained at that bank
exceed the balance insured by the Federal Deposit Insurance Corporation. The
cost of all monetary investments at June 30, 2002 approximates their market
value.

Income Taxes -- The Company complies with Statement of Financial Accounting
Standards No. 109 ("SFAS 109"), "Accounting for Income Taxes." Under SFAS 109,
the liability method is used in accounting for income taxes. Under this method,
deferred tax assets and liabilities are determined based on the differences
between financial reporting and tax bases of assets and liabilities and are
measured using the enacted tax rates and laws that will be in effect when the
differences are expected to reverse.

                                      F-11                                    54
<PAGE>

         At June 30, 2002, the Company has no recorded deferred tax benefit. In
addition, during the year ended June 30, 2002, the Company fully reserved
deferred tax benefits of $128,900 recorded in prior periods. The Company has net
operating loss carryforwards of approximately $4,300,000 and has fully reserved
the potential tax benefit therefrom because realization of such benefit is not
more likely than not.

Basis of Presentation - The accompanying consolidated financial statements have
been prepared assuming that the Company will continue as a going concern. As of
June 30, 2002, the Company had experienced losses of $4,311,470 since its
inception. There is substantial doubt that the Company will be able to continue
as a going concern unless it can develop profitable operations and/or obtain
additional funding. Management is reviewing all aspects of the Company's
operations in an effort to identify potentially profitable opportunities and
will seek additional funding if necessary. However, there are no assurances that
the Company will be successful in any of these endeavors. The consolidated
financial statements do not include any adjustments that might be necessary
should the Company be unable to continue as a going concern.

Recent Accounting Pronouncements

         In July 2001, the Financial Accounting Standards Board (the "FASB")
issued Statement of Financial Accounting Standards No. 142, Goodwill and Other
Intangible Assets ("SFAS No. 142"), which is effective for fiscal years
beginning after December 15, 2001. SFAS 142 requires, among other things, the
discontinuance of goodwill amortization. In addition, the standard includes
provisions upon adoption for the reclassification of certain existing recognized
intangibles as goodwill, reassessment of the useful lives of existing recognized
intangibles, reclassification of certain intangibles out of previously reported
goodwill and the testing for the impairment of existing goodwill and other
intangibles. The Company wrote-off substantially all goodwill during the year
ended June 30, 2002.

         In August  2001,  the FASB issued  Statement  of Financial  Accounting
Standards  No. 143,  Accounting  for Asset  Retirement Obligations
("SFAS No. 143"),  which is effective  for all fiscal years  beginning  after
June 15, 2002;  however,  early  adoption is encouraged.  The adoption of SFAS
No. 143 did not have an impact on the financial statements.

         In October 2001, the FASB issued Statement of Financial Accounting
Standards No. 144 ("SFAS 144"), Accounting for the Impairment or Disposal of
Long-Lived Assets, which supersedes Statement of Financial Accounting Standards
No. 121 ("SFAS 121"), Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to be Disposed Of and certain provisions of APB Opinion No.
30, Reporting Results of Operations - Reporting the Effects of Disposal of a
Segment of a Business and Extraordinary, Unusual and Infrequently Occurring
Events and Transactions. SFAS 144 requires that long-lived assets to be disposed

                                      F-12                                    55
<PAGE>

of by sale, including discontinued operations, be measured at the lower of
carrying amount or fair value, less cost to sell, whether reported in continuing
operations or in discontinued operations. SFAS 144 also broadens the reporting
requirements of discontinued operations to include all components of an entity
that have operations and cash flows that can be clearly distinguished,
operationally and for financial reporting purposes, from the rest of the entity.
The provisions of SFAS 144 are effective for fiscal years beginning after
December 15, 2001. The implementation of these standards is not expected to
impact on the Company's results of operations and financial position.

         In April 2002, the FASB issued Statement of Financial Accounting
Standards No. 145 ("SFAS 145") Rescission of FASB Statements Nos. 4, 44 and 64,
Amendment to FASB Statement No. 13 and Technical Corrections, which rescinds
FASB Statement No. 4, Reporting Gains and Losses from Extinguishment of Debt,
and an amendment of that Statement, FASB Statement No. 64, Extinguishments of
Debt Made to Satisfy Sinking-Fund Requirements. This Statement rescinded FASB
Nos. 4 and 64 which required that all gains and losses from the extinguishment
of debt be aggregated and, if material, be reported as an extraordinary item,
net of related income tax effects. This Statement also rescinds FASB Statement
No. 44, Accounting for Intangible Assets of Motor Carriers and amends FASB
Statement No. 13, Accounting for Leases, to eliminate an inconsistency between
the required accounting for sale-leaseback transactions and the required
accounting for certain lease modifications that have economic effects that are
similar to sale-leaseback transactions. This Statement also amends other
existing authoritative pronouncements to make various technical corrections.
Management does not believe that the adoption of this Statement will have a
material effect on the Company's financial statements.

         In July 2002, the FASB issued Statement of Financial Accounting
Standards No. 146, Accounting for Costs Associated with Exit or Disposal
Activities ("SFAS 146"). SFAS 146 addresses significant issues regarding the
recognition, measurement, and reporting of costs associated with exit and
disposal activities, including restructuring activities. SFAS 146 also addresses
recognition of certain costs related to terminating a contract that is not a
capital lease, costs to consolidate facilities or relocate employees and
termination benefits provided to employees who are involuntarily terminated
under the terms of a one-time benefit arrangement that is not an ongoing benefit
arrangement or an individual deferred compensation contract. SFAS 146 is not yet
effective and the impact of adoption on the Company's financial position or
results of operations has not been determined.

         In November 2001, the Emerging Issues Task Force reached a consensus to
issue FASB Staff Announcement Topic No. D-103, which was re-characterized in
January 2002 as EITF Issue No. 01-14, Income Statement Characterization of
Reimbursement Received for Out-of-Pocket Expenses Incurred. This consensus
clarifies that reimbursements received for out-of-pocket expenses incurred
should be classified as revenue in the statement of operations. This consensus
should be applied in financial reporting periods beginning after December 15,
2001. Upon application of this consensus, comparative financial statements for
prior periods should be reclassified to comply with the guidance in this
consensus. The adoption of this consensus did not have a material effect on the
Company's results of operations.

                                      F-13                                    56
<PAGE>

Reclassifications - Certain prior period amounts have been reclassified to
conform with the current presentation.

Fiscal Year - The Company's fiscal year ends on June 30.

NOTE 3 -- OTHER ASSETS

         At June 30, 2002, Other assets consisted of:

Deposits                                                                $10,000
Deferred contract costs - net                                           180,196
Note receivable                                                           6,000
                                                                        --------
Total                                                                  $196,196
                                                                       ========



         During the year ended June 30, 2002, the Company reassessed its
strategies, objectives and resources and opted to cease involvement with
entities or investments that were associated with certain aspects of its
consulting initiative because the Company believed that it no longer possessed
the resources to pursue those efforts. Accordingly, it fully reserved for its
investment in Harbor Ridge Communications, Inc. and a broker dealer. This
resulted in a net charge of $545,338. which is included in the caption
"Amortization and impairment" in the accompanying Statements of Operations.

         The Company made a bridge loan in the principal amount of $100,000 to
SwapIt during 2001 at the recommendation of the Company's underwriter. The
bridge loan was converted to equity in July 2001 at which time the business
became known as Oakland Technologies. Oakland Technologies has been unable to
obtain the financing necessary to implement its business plan and the carrying
amount of the investment has been fully reserved. The charge associated with the
writedown is included in the caption "Amortization and impairment" in the
accompanying Statements of Operations.

         The deferred contract costs relate to consulting clients. The Company
cannot predict a timeframe in which the registration statements filed by its
clients will be declared effective. Various technical issues have slowed the
registration process significantly and created timing uncertainties as the
issues became known or were raised pertaining to client filings. The Company has
written-off or established reserves for projects that have been delayed or
deferred by clients or for which issues exist that could seriously delay or
impair the Company's ability to realize a benefit from the shares issued or
issuable by clients. The related charge of $636,360 is included in the caption
"Amortization and impairment" in the accompanying Statements of Operations.

NOTE 4 -- COMMITMENTS AND CONTINGENCIES


                                      F-14                                    57
<PAGE>

Consulting and Employment Agreements

         The Company has consulting agreements with four consulting firms,
including three entities controlled by officers or directors under which the
Company will pay minimum annual consulting fees of $390,000 in each of the three
years in the period ending June 30, 2005. None of these officers or directors
receives any other cash compensation from the Company for their services but
receive reimbursement for expenses including healthcare.

Rent

         The Company is obligated under the terms of two short-term operating
leases for office space which call for minimum monthly payments of approximately
$1,900 through September 30, 2003.

Equipment Leases

         The Company leases servers, computers and similar equipment under
various capital leases. Future minimum lease payments under these leases are as
follows:


Year Ending June 30,                                                  Amount

2003                                                                $ 14,800
2004                                                                   7,400
                                                                       -----
Total                                                                 22,200
Interest                                                               2,313
                                                                       -----
Present value of minimum commitments                                 $19,887
                                                                     =======

Current portion (included in accounts payable and
accrued expenses)
                                                                     $12,785
Long-term portion                                                     $7,102
                                                                      ======


         Assets acquired under capital leases are capitalized using interest
rates appropriate at the inception of each lease. Such assets are summarized
below at June 30, 2002:


Computer equipment:
Cost                                                                   $ 35,974
Accumulated depreciation                                                 10,792
                                                                         ------
Net                                                                    $ 25,182
                                                                       ========

Related Party Transaction

                                      F-15                                    58
<PAGE>

         Several consulting clients are affiliated with officers and directors
of the Company. No revenue has been recognized with respect to these client
engagements.

Legal Matters

         On March 7, 2002, Norwood Venture Corp. ("Norwood") commenced an action
in the Supreme Court of the State of New York, County of New York, against the
Company and various other defendants, including eSAFETYWORLD and two directors.
In this action, Norwood, a purported creditor of the now defunct Laininaire
Corporation ("Laminaire") has asserted a fraudulent conveyance claim against the
Company in connection with the Company's acquisition of certain intangible
assets from Laminaire in 1999 (the "1999 transaction"). The complaint also
asserts fraudulent conveyance and breach of fiduciary duty claims against the
two directors in connection with the 1999 transaction. In addition, the
complaint asserts fraudulent misrepresentation and negligent misrepresentation
claims against the two directors in connection with an alleged February 2000
transaction in which Norwood allegedly gave up a lien on certain Laminaire
property in exchange for a lien on Laminaire accounts receivable and inventory
and other consideration. However, it does not appear that such claims are
asserted against the two directors in their capacity as officers and/or
directors of eSAFETYWORLD.

         After the commencement of this action, the parties entered into
negotiations to resolve the dispute. While negotiations have continued, the
parties have signed various stipulations extending defendants' time to respond
to the complaint. The Company will respond to the complaint if a satisfactory
settlement is not reached.

         In December 2001, the Securities and Exchange Commission initiated an
investigation of the Company. The investigation closely followed a decision by
NASDAQ to de-list the Company's common stock. As of this date, no charges have
been brought or threatened by the SEC against the Company or any individual as a
result of the investigation.

Pledge

         The Company has pledged certificates of deposit of $749,684 in
connection with credit facilities and loans.

NOTE 5 --  STOCKHOLDERS'  EQUITY

         The Company was incorporated in the state of Nevada and is authorized
to issue up to 20,000,000 shares of common stock having a par value of $.001 per
share and 1,000,000 shares of preferred stock. There are 3,000,000 shares of
common stock issued and outstanding. Each share of common stock entitles the
holder to one vote on each matter submitted to the stockholders. The holders of
common stock:

                                      F-16                                    59
<PAGE>

o        have equal  ratable  rights to dividends  from funds legally  available
         for payment of dividends  when, as and if declared by the board of
         directors;

o        are entitled to share ratably in all of the assets  available for
         distribution  to holders of common stock upon  liquidation, dissolution
         or winding up of our affairs;

o        do not have preemptive, subscription or conversion rights, or
         redemption  or access to any sinking fund; and

o        are  entitled to one  non-cumulative  vote per share on all matters
         submitted  to  stockholders  for a vote at any meeting of stockholders.

The Company's certificate of incorporation authorizes the issuance of 1,000,000
shares of preferred stock with designations, rights and preferences determined
from time to time by its board of directors. Its board of directors is
empowered, without stockholder approval, to issue shares of preferred stock with
voting, liquidation, conversion, or other rights that could adversely affect the
rights of the holders of the common stock. It has no present intention to issue
any shares of preferred stock. There can be no assurance that it will not do so
in the future. No preferred stock may be issued without the underwriter's
consent for 12 months following the effective date of the Company's public
offering.

         The Company has not paid any dividends on its common stock to date.

Stock Option Plan

         The Company has a stock option plan that expires in 2009 under which it
may grant incentive stock options, non-qualified options and stock appreciation
rights for up to an aggregate of 450,000 shares of common stock. Incentive stock
options granted under the plan must conform to applicable federal income tax
regulations and have an exercise price not less than the fair market value of
shares at the date of grant or 110% of fair market value for ten percent or more
stockholders. Other options and stock appreciation rights may be granted on
terms determined by the compensation committee of the board of directors.

         In October 2000, the Company granted 450,000 options with an exercise
price equal to the market price per share at the date of grants which was $.87
per share. All options are exercisable but none have been exercised.

Other Options Granted

         The Company granted to a public relations firm options to purchase
200,000 shares of the Company's common stock at prices ranging from $3.75 to
$7.00 per share. The options will expire two years after a registration
statement covering the shares underlying the options is deemed effective. Such
registration statement has not been filed.

                                      F-17                                    60
<PAGE>

NOTE 6-- BLUE MARBLE WORLD

         Blue Marble World filed a Registration Statement with the Securities
and Exchange Commission in July 2001 pursuant to a plan to distribute 81% of
Blue Marble World's stock to the Company's shareholders as a dividend.

         The Company and Blue Marble World signed a Business Management
Agreement, which as amended requires Blue Marble World to pay a management fee
to the Company in a sum equal to 10% of Blue Marble World's gross revenues with
a monthly minimum fee requirement of $3,500. Payment may be made, at Blue Marble
World's option, in cash or shares of Blue Marble World's common stock. If
payment is made in common stock, the Company shall have demand registration
rights which may be exercised once in each 12 month period. The number of shares
that will be issuable will be based on the closing bid price of Blue Marble
World's shares on the last business day of each month. If no bid price exists,
the number of shares issuable will be based on a price of $.50 per share. In
addition, the Company shall be reimbursed for the costs incurred by it for
outside contractors and consultants. The agreement covers three years and
automatically rolls over for an additional year at the end of each contract year
unless terminated by one of the parties. Rates to be paid are to be renegotiated
on each contract anniversary date.

         At June 30, 2002, Blue Marble World owes the Company an aggregate of
$368,019. The Master Distribution Agreement between the two companies stipulates
that the liability to the Company shall be paid from 50% of the proceeds of any
capital infusion that Blue Marble World obtains. If the balance due to the
Company is not repaid in full by June 30, 2003, the remaining unpaid balance
shall be paid, without interest, in 12 equal monthly installments commencing on
July 31, 2003. If Blue Marble World is unable to pay the balance by July 31,
2004, the unpaid balance may, at the Company's option, be converted into shares
of our common stock at a price per share equal to the closing average bid price
of such shares during the first 20 days of trading, If the Company converts
amounts due it at any point after July 31, 2004, it shall have demand
registration rights with respect to the shares received upon conversion and
shall pay all registration costs. The master agreement was negotiated between
affiliated parties. Accordingly, the Company can make no assurances that any of
this agreement, or that any of the transactions provided for in this agreement,
will be effected on terms at least as favorable to the Company as could have
been obtained from unaffiliated third parties.

Commissions - Blue Marble World has entered into a distributor contract with
Blue Marble Base. Two of the Company's officers and directors control Blue
Marble Base. Blue Marble World is obligated to pay Blue Marble Base a commission
based upon its distributor compensation plan even if these two individuals are
not associated with Blue Marble World in the future.

Commitments - Blue Marble World has entered into a three-year consulting
agreement with its president, Thomas Swenson, who has no other affiliation with
the Company, effective on June 1, 2001, under which he is entitled to receive:

                                      F-18                                    61
<PAGE>

o        Downline positions and placement as is mutually agreed by the parties.
         The commission will be paid in the same manner other distributors
         receive payment pursuant to Blue Marble World's compensation plan.

o        A percentage of sales of products in the United States and other
         countries agreed to by the parties equal to 4% of the first $100,000 in
         monthly sales for the term of this agreement; 3% of monthly sales
         between $100,000 to $300,000 per month for the term of this agreement;
         2% of monthly sales between $300,000 to $1,000,000; and 1% of monthly
         sales above $1,000,000 for the term of this agreement. The payment will
         be made 30 days after the close of each month.

o        An option to acquire 50,000 shares of Blue Marble World's common stock.
         The exercise price of the option shall be the opening price on the date
         that Blue Marble World's shares commence trading on the OTC Bulletin
         Board. The option becomes exercisable as follows: 10,000 shares 30 days
         after the shares begin trading and 10,000 shares every thirty day
         thereafter until the option on all 50,000 shares becomes fully
         exercisable.
     .
o        An additional option to acquire up to 25,000 shares of Blue Marble
         World's common stock which becomes exercisable when monthly sales equal
         or exceed $25,000 per month for three consecutive months; 25,000 shares
         when monthly sales equal or exceed $50,000 for three consecutive
         months; 100,000 shares when monthly sales equal or exceed $100,000 for
         three consecutive months; and 100,000 shares when monthly sales equal
         or exceed $200,000 for three consecutive months. The exercise price of
         the option shall be the average closing bid price for the 31st through
         the 60th day following the date on which the Company's shares commence
         trading on the OTC Bulletin Board.

         The president shall receive a fee of $4,000 per month when and if Blue
Marble World raises a minimum of $200,000 in equity financing from sources other
than eSAFETYWORLD. Such payments will continue until Mr. Swenson's monthly
payments from commissions exceed $5,000 per month. In other months, the
consulting fee shall be reduced using the following formula - ($4,000 minus
payments received from commissions minus $1,000).





                                      F-19                                    63