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

                                   Form 10-KSB

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

                   For the fiscal year ended December 31, 2001


[ ]               TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                  SECURITIES EXCHANGE ACT OF 1943

                  For the transition period from _________ to __________

                         Commission File Number 0-33215

                                EMPS CORPORATION
                               ------------------
                 (Name of Small Business Issuer in its charter)

         NEVADA                                                  87-0617371
         --------                                            -----------------
(State or other jurisdiction of                               (I.R.S. Employer
incorporation or organization)                               Identification No.)


  875 Donner Way, Unit 705, Salt Lake City, Utah                    84108
  ----------------------------------------------                  ---------
    (Address of principal executive Offices)                      (Zip Code)

                    Issuer's telephone number: (801) 582-1881

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

Securities registered pursuant to section 12(g) of the Exchange Act:
Common, $.001 par value

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

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

The issuer's revenue for its most recent fiscal year was: $-0-

The aggregate market value of the issuer's voting stock held as of January 30,
2002, by non-affiliates of the issuer was approximately $296,475.

As of January 30, 2002, issuer had 2,795,300 shares of its $.001 par value
common stock outstanding.

Transitional Small Business Disclosure Format.       Yes [ ] No [X]
Documents incorporated by reference: none
Exhibit Index is on page 30.

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         This Form 10-KSB contains certain forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995. For this
purpose any statements contained in this Form 10-KSB that are not statements of
historical fact may be deemed to be forward- looking statements. Without
limiting the foregoing, words such as "may," "will," "expect," "believe,"
"anticipate," "estimate" or "continue" or comparable terminology is intended to
identify forward-looking statements. These statements by their nature involve
substantial risks and uncertainties, and actual results may differ materially
depending on a variety of factors, many of which are not within the Company's
control. These factors include but are not limited to economic conditions
generally and in the industries in which the Company may participate;
competition within the Company's chosen industry, including competition from
much larger competitors; technological advances and failure by the Company to
successfully develop business relationships.

                                     PART I


Item 1.  Description of Business

Company History and Business

         EMPS Corporation (the "Company" or "EMPS") was incorporated under the
laws of the state of Nevada on July 14, 1998, for the purpose of researching and
developing commercial applications for patented technology for a high frequency
eddy current separator, which may be used to separate nonmagnetic particulate
materials from other materials without chemicals, heat or water. The Company is
in the development stage.

         On May 10, 1999, the Company acquired Patent No. 5,439,117 issued
August 8, 1995, and continuation in part Patent No. 5,772,043 issued June 30,
1998, from Particle Separation Technologies, L.C., a Utah limited liability
company. On February 5, 2001, the Company acquired Patent No. 6,095,337 issued
on August 1, 2000, from Particle Separation Technologies, L.C. This is a
continuation in part patent which expands the range of separable particle sizes
covered under the Company's earlier two patents. All three patents are titled
"System and Method for Separating Electronically Conductive Particles." The
Company acquired the entire right, title and interest in and to the said
inventions and patents in exchange for 800,000 pre-split restricted common
shares of the Company. The aggregate acquisition cost of the three patents is
$2,770. On January 30, 2001, the Company formed a wholly owned subsidiary, EMPS
Research Corporation, a Utah corporation ("ERC"). On February 14, 2001, in
exchange for 1,000,000 restricted common shares of ERC, the Company assigned its
three patents to ERC at their book value of $2,636, provided ERC $2,100 cash and
paid organizational costs of $264 on behalf of ERC. ERC will manage the research
and development efforts to develop and test prototype equipment for the Company.

         The Company filed a registration statement with the United States
Securities and Exchange Commission ("SEC") on Form SB-1 to register up to
200,000 shares of common stock. The registration statement went effective on
October 3, 2000, and closed on January 31,

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2001. A total of 65,100 shares were sold for proceeds in the amount of $65,100.
The Company later filed a Form 10-SB registration statement with the SEC on
October 10, 2001. The Form 10- SB went effective on December 5, 2001.

         During fiscal 2000 the Company filed an application for a research
grant with the Department of Energy ("DOE"), through its Office of Industrial
Technologies ("OIT") 2000 Inventions and Innovation ("I&I") program. Following
DOE evaluation, the Company was one of the 43 projects selected. The Company
received a research grant in the amount of one hundred ninety-nine thousand
dollars ($199,000) on or about January 16, 2001. This grant must be utilized to
research and develop the particle separation technology.

Description of the Company Technology

         The Company is engaged in the business of developing, marketing and
licensing its patented technology for use in commercially separating nonmagnetic
particulate material by building and testing a High Frequency Eddy-Current
Separator ("HFECS"). The Company will develop a prototype primarily for use in
recovering metals at foundries and smelters. The Company anticipates that the
HFECS prototype will be capable of separating one ton of particles or materials
per hour.

         No known system or method exists in industry for commercially
separating nonmagnetic fine particulate material, such as gold, from other
materials without chemicals, heat or water. These current methods are expensive
and can be environmentally unsafe.

         When water is used as a separation medium, the water carries the
particles through machinery, over vibrating tables or centrifugal apparatuses
which utilize specific gravity in the separation process. When water is
available, its usage often requires significant capital expenditures for pumping
systems, infrastructure and continual pump maintenance. Water separation systems
can be seasonally restrictive due to weather considerations. After separation,
additional energy is needed for the drying processes to remove the moisture from
the separated material.

         Chemical methods require great planning and care. Without proper
handling and disposal of the caustic chemicals typically used in these
processes, environmental disasters can occur. The long-term environmental
effects of chemical separation are only now beginning to be understood. Usually,
drying processes are needed to remove the moisture from the separated material.

         Methods utilizing heat require strict attention to the toxic gases
created in the energy- intensive burn process. Scrubbers and other apparatuses
are needed to capture furnace emissions.

         The Company's invention, uses novel principles that allow separation of
electrically conductive, nonmagnetic fine particles in a laboratory setting.
Applying the Company's technology on a full-scale basis may be more efficient
and safe than other technologies. The

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Company's technology, however, may prove to be ineffective, uneconomical and may
not achieve market acceptance on a full-scale or commercial level. That is why
the Company will produce a prototype for further testing and use to determine
its feasibility on a commercial scale.

         Electrodynamic separation of nonmagnetic free-flowing materials is
accomplished by introducing the material into a region of magnetic field
gradient that fluctuates with time. The variable field induces magnetic dipoles
in the conducting particles of the material, producing electrodynamic forces
that deflect the electrically conducting particles from the imposed magnetic
field. Therefore, when feed material is passed through the magnetic field, the
conducting particles are separated from the feed material. Research derived from
mathematical and actual working models indicate that the invention should
specifically address this problem in industry.

         The Company employs the use of an alternating magnetic field in certain
configurations to produce an electromagnetic force with frequencies set
according to the specific resistivity and size of the particulate material which
is to be separated from other material.

         Independent tests were performed on the Company's technology by the
Department of Metallurgical Engineering at the University of Utah. After careful
consideration by the faculty, it was determined that these experiments warranted
special Departmental attention due to the unique nature of the novel principles
involved. Independent test results with supporting calculations, data and
experiments were implemented by a special team, including two faculty members,
and are described by graduate student, Dongman Kim, in a Master's Thesis
entitled "Electrodynamic Separation of Conducting Particles in an Alternating
Magnetic Field" published in November, 1998. The Thesis concludes:

         "In this study, separation of conductive materials from mixed particles
         has been proved to be successful. Based on what is reported here, a
         pilot-scale unit can be built for further scale-up to a larger
         industrial-size unit."

         It is this prototype or "pilot-scale" unit that will be the focus of
the Company's financial and technical resources.

         The Company's invention provides a system and method for separating
electrically conductive, nonmagnetic fine particles which could not otherwise be
separated using flotation or filtration schemes. Further, the Company's
invention provides a system and method for separating electrically conductive,
nonmagnetic fine particles using characteristics such as the specific
resistivity and the size of the particle to determine the separation of one
material from other materials.

         The Company's invention provides a system for first separating
electrically conductive particulate material from one or more other materials.
The invention is particularly intended for use with materials in particulate
form but can also be used with materials in other forms. The Company's invention
can also be used in conjunction with other separation technologies, such as
flotation and filtration, which are known in the art. For example, the
separation techniques of

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the present invention can be used before or after materials have been subjected
to other separation techniques known in the art.

         The Company's invention includes means for localizing a magnetic field
at a first location. The magnetic field is an alternating or oscillating field.
In contrast with prior technology, the present invention considers the size of
the particle when selecting the frequency. As the size of the particle to be
separated decreases, the frequency increases.

         The Company's invention exploits the characteristics of particle
electrical specific resistivity and particle size. Thus, in contrast to the
previously proposed schemes, the present invention considers the size of the
particles in the separation process. For example, some embodiments of the
present invention preferably include means for sorting particles having a
diameter not larger than about five millimeters and more preferably not larger
than about two millimeters. Embodiments of the present invention may also
comprise means for measuring the size of the particles of the electrically
conductive particulate material so that the operation of the system can be
adjusted for best efficiency. Moreover, in contrast to the previously proposed
schemes, the present invention considers the specific resistivity of the
particles in the separation process.

         Included in the Company's invention is a means for generating an
alternating current and for applying it to the means for localizing a magnetic
field. The frequency of the alternating current is set according to the specific
resistivity or conductivity of the desired material and the size of the
particles comprising the desired material. Selected embodiments of the present
invention preferably include means for increasing the frequency of the
alternating current as the size of the first particles decreases.

         The means for localizing a magnetic field and the means for generating
an alternating current cooperate together to create an alternating magnetic
field at a location, for example the gap, where separation occurs. Separation
occurs as a result of the alternating magnetic field deflecting the path of the
desired material in a different amount than the other material present in the
stream is deflected. Structures are also included to function as a means for
gathering the first particles as they are separated from the material stream.

         The method of the Company's invention preferably includes the steps of
generating an alternating magnetic field, introducing a stream of particles into
the magnetic field, the stream of particles including both the desired first
particles and undesired second particles. The step of adjusting the frequency of
the alternating magnetic field is carried out according to the specific
resistivity and the size of the first particles. By properly adjusting or
choosing the frequency of the alternating magnetic field, the first particles
are imparted a trajectory which is different than the trajectory of the other
particles in the particle stream. In order to adjust for the size of the
particles, the Company's invention increases the frequency of the alternating
magnetic field as the size of the first particles decreases.

         Since the size of the particles greatly influences the separation
process, it may be desirable to pre-sort the particles according to size or
adjust the size of the particles before being

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<PAGE>

subjected to the alternating magnetic field. Moreover, it is desirable to adjust
the velocity of the particles in the particle stream as they enter the magnetic
field.

         The particle stream is subjected to the magnetic field for a period of
time while the first particles are gathered into one location and the remaining
material gathered into another location. The Company's invention has particular
application for separating particles of gold from other materials.

         On a laboratory level, the Company's invention separates electrically
conductive, nonmagnetic particles based upon the particle's size and the
particle's specific electrical resistivity. We believe that applying our
technology on a full-scale basis, one type of desired electrically conductive,
nonmagnetic particle can be readily separated commercially from other undesired
electrically conductive, nonmagnetic particles. Even if the desired and
undesired particles are of substantially the same particle size, but the
particles have different specific electrical resistivities, the particles can be
separated from one another, using the Company's invention.

         The Company believes its invention can be carried out so that particles
can be separated from each other in a batch-by-batch fashion or in a continuous
flow process. The continuous flow process is presently preferred and more
efficient.

         Further, the Company's invention provides a system and method for
separating electrically conductive nonmagnetic materials which does not rely on
moving mechanical parts to achieve a separation of the particles. The Company's
invention also provides a system and method for separating electrically
conductive, nonmagnetic particles by producing a magnetic field which induces
eddy currents in the particles and causes movement of the particles which are to
be separated. Both the electrical conductivity and the size of the particle
determine the separation of one type of particle from other types of particles.

Research and Development

         The Company plans to develop and demonstrate a High-Frequency
Eddy-Current Separator ("HFECS") prototype. Research and development began in
February 2001 and is scheduled to be completed by February 2003. At the
conclusion of this twenty-four month period the prototype should be a fully
operational piece of equipment. The Company does not plan to market or
manufacture the equipment. Rather, it plans to research and develop and test the
prototype. If and when testing proves to be successful, the Company will seek to
license the technology for marketing and manufacture. The Company expects that
the prototype will work in smaller commercial settings.

         The Company anticipates that the I&I research grant will provide
sufficient funding for approximately two years of research and development. On
August 14, 2001, the Company, through it wholly-owned subsidiary, EMPS Research
Corporation entered into a Subcontract Agreement with the University of Utah.
The Subcontract Agreement commenced on August 15, 2001 and will continue in
effect until August 14, 2003. The Subcontract Agreement calls for the

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<PAGE>

University of Utah Department of Metallurgical Engineering to test the equipment
design and implementation, test a working prototype, and to do the needed data
analysis and computer modeling. The Subcontract Agreement contemplates that the
University of Utah will be paid approximately $105,000 over the two year period
for these services. To date, the University of Utah has not done any work for
the Company and has not been paid any funds. This Subcontract Agreement may be
terminated at any time by either party by written notice. Termination will not
relieve either party of any obligation or liability accrued prior to
termination.

         The Company also anticipates that $62,000 will be needed to design,
fabricate, and test the initial prototype. The Company is using Altaire Holdings
L.C. to design, fabricate, assemble and test the initial prototype. Altaire
Holdings, L.C., is an electronics lab in Ogden, Utah, and is not affiliated with
the Company or any of its officers, directors or control shareholders. Altaire
Holdings is performing these services pursuant to periodic work orders placed by
the Company.

         During the previous two fiscal years the Company spent no money on
research and development. During the current fiscal year the Company spent
approximately $62,000 on research and development.

Patents

         The Company, through its wholly owned subsidiary, EMPS Research
Corporation, owns U.S. Patents 5,772,043, 5,439,117, and 6,095,337, each
entitled "System and Method for Separating Electrically Conductive Particles."
The patents were issued on June 30, 1998, August 8, 1995 and August 1, 2000,
respectively. All three patents expire December 21, 2013. These patents cover
the technology which allows the Company to separate nonmagnetic particles from
feed material. These patents are very important to the Company's business and
add significant value because they give it an exclusive right to the covered
technology. Moreover, in the event someone else attempts to use this technology
before the patents expire, the Company may have a right to recover damages from
that party.

         While the Company believes it could continue to operate following the
expiration of the patents, the Company believes its business will be adversely
effected. Once the patents expire, the information covered by them will become
part of the public domain. It is anticipated that few purchasers would be
willing to pay the Company for a license for its technology when it is part of
the public domain. Similarly, once this information becomes part of the public
domain, others could use that technology to compete directly with the Company,
which could adversely effect the Company's business.

Competition

         The Company operates in a highly competitive environment against
companies that have greater resources than the Company. There are many occasions
in scientific and industrial applications where materials must be separated from
one another. Particularly in the mining industry, valuable metals must be
efficiently separated from other materials which are found in ore. In many
industrial applications, separation of particles having different sizes and
densities

                                        7
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relies on the earth's gravity as well as some additional process such as
filtration. All such arrangements which have been devised utilizing gravity to
separate particles of different densities include one or more drawbacks as are
recognized in the art. For example, such arrangements may require water as a
carrier for the particles to be separated. Disadvantageously, the water must be
removed from the particles after separation. Moreover, in some mining locations,
water is not readily available.

         To provide efficient separation without water, various apparatus and
techniques have been proposed which also utilize some electromagnetic properties
of materials, rather than density alone, to separate materials. While the task
of separating magnetic materials from non magnetic materials is a relatively
easy one, the task of separating a nonmagnetic material from other nonmagnetic
materials utilizing the magnetic properties of the materials has been the
subject of research in the industry. Still, many problems and drawbacks exist
with the proposed schemes. Particularly in the mining industry, there have been
numerous attempts to separate materials from one another, for example gold from
other materials, based on the differing magnetic properties of the materials.

         One example of a previous scheme is represented by U.S. Pat. No.
5,057,210 to Julius. The Julius reference recognizes that the creation of eddy
currents in conductive materials allows a magnetic field to move a nonmagnetic
material. The Julius reference, however, utilizes a rotating permanent magnet to
mechanically generate a changing magnetic field.

         Another example of a previous scheme is represented by U.S. Pat. No.
5,161,695 to Roos. The Roos reference also recognizes that the creation of eddy
currents in conductive materials allows a changing magnetic field to move
particles of a nonmagnetic material. The Roos reference, however, utilizes
permanent magnets, as does the Julius reference. The scheme of the Roos
reference is ineffective.

         By relying on mechanically generated fields through the use of rotating
permanent magnets, the Julius and Roos technologies fail to recognize an
additional critical aspect of the use of induced eddy currents in electrically
conductive, nonmagnetic materials. Electromagnetically generated induced eddy
currents, such as those created by the Company's technology, are capable of
producing much higher frequencies and stronger field currents, which allow for
separation of a significantly broader range of particulate sizes.

         The primary object of the Company's invention is to provide a practical
system and method for separating electrically conductive nonmagnetic fine
materials. It is also an object of the Company's invention to provide a system
and method for separating electrically conductive nonmagnetic materials which
does not rely on moving mechanical parts to achieve separation of the materials.
It is further the object of the Company's invention to provide a system and
method for separating electrically conductive nonmagnetic fine materials from
each other which does not require any liquid.

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Advertising and Marketing Strategy

         The Company plans to focus its operations on developing a functional
prototype and to seek contracts with entities for licensing its technology for
third party manufacturing and use. It is unlikely the Company will secure any
licensing agreements until the prototype is further along in its development.
Until the time a functional prototype is constructed, approximately two years
from February 2001, the Company's advertising and marketing will be limited.

         The Company's marketing efforts, if any, will be primarily directed
towards potential licensees of its technology to third parties. The Company may
begin immediately seeking such relationships through limited advertizing and
marketing through interaction with the target industry and direct contact sales.
The Company may seek further exposure through trade journals and symposia.
Additionally, the Company may also position itself to assist in environmental
clean-up operations through existing companies involved in governmental
projects.

Employees

         The Company currently has no full time employees. The officers and
directors work on a part time, as needed, basis with no commitment for full time
employment. The Company also has a part time project manager and has contracted
with the University of Utah and Altaire Holdings, to research, develop and test
the prototype. Raj Rajamani and Vladimir Saveliev have agreed to consult with
the Company on an as needed basis. Rajamani and Saveliev will be compensated on
an as used hourly basis. Rajamani is to be compensated at a rate of $45.10 per
hour. Saveliev is to be compensated at a rate of $31.75 per hour. To date, the
Company has not used the services of either Rajamani of Saveliev, nor has either
of them received any compensation from the Company. The Company does not foresee
hiring any further employees until revenues and operations warrant the addition
of employees.

Reports to Security Holders

         The Company files annual and quarterly reports with the Securities and
Exchange Commission ("SEC"). The public may read and copy any materials filed by
the Company with the SEC at the SEC's Public Reference Room at 450 Fifth Street,
N.W., Washington, D.C. 20549. The public may obtain information on the operation
of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The Company
is an electronic filer and the SEC maintains an Internet site that will contain
reports and other information regarding the Company which may be viewed at
http://www.sec.gov.

Item 2:  Description of Property

Property & Facilities

         The Company uses one-quarter of an 800 square foot office condominium
located at 875 Donner Way, Unit 705, Salt Lake City, Utah 84108 for its
corporate offices. The Company

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currently pays no rent for this space pursuant to a verbal agreement with
Particle Separation Technologies, L.C. This free rent is of nominal value. There
is no lease agreement with Particle Separation Technologies, L.C. If at any time
Particle Separation Technologies, L.C., decides it needs or wants the space, the
Company has no right to continue to occupy the space and could be forced to
move.

Item 3:  Legal Proceedings.

         To the knowledge of management, there is no material litigation or
governmental agency proceeding pending or threatened against the Company or its
management. Further, the Company is not aware of any material pending or
threatened litigation or governmental agency proceeding to which the Company or
any of its directors, officers or affiliates are or would be a party.

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

         None.

                                     PART II

Item 5.  Market Price of and Dividends on Registrants Common Equity and Other
         Shareholder Matters.

         The Company's shares are currently traded on the Over-the-Counter
Bulletin Board ("OTCBB") under the symbol EPSC. As of January 30, 2002, the
Company had 79 shareholders holding 2,795,300 common shares. Of the issued and
outstanding common stock, approximately 335,300 are free trading, the balance
are "restricted securities" as that term is defined in Rule 144 promulgated by
the Securities and Exchange Commission.

         The published bid and ask quotations from the first available date
through January 28, 2002 are included in the chart below. These quotations
represent prices between dealers and do not include retail markup, markdown or
commissions. In addition, these quotations do not represent actual transactions.

                                         Closing Bid        Closing Ask
2001                                    High      Low      High        Low
----                                    -------------      ---------------
Dec 26 (First Available Price)
Through
Dec. 31                                 1.25       1.00    None         None

2002
Jan 28                                  1.01               2.75

         The above information was obtained from Pink Sheets, LLC located at 304
Hudson Street, 2nd Floor, New York, New York 10013.

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<PAGE>

         Currently, none of the Company's common shares are subject to
outstanding options or warrants to purchase, or securities convertible into,
common equity of the Company. The Company has no agreements to register shares
on behalf of shareholders currently holding unregistered securities. The Company
has not paid, nor declared, any dividends since its inception and does not
intend to declare any such dividends in the foreseeable future. The Company's
ability to pay dividend is subject to limitations imposed by Nevada law. Under
Nevada law, dividends may be paid to the extent that the corporation's assets
exceed it liabilities and it is able to pay its debts as they become due in the
usual course of business.

Recent Sales of Unregistered Securities.

         On January 25, 2002, the Company sold 15,000 shares of its restricted
common stock to Robert Tew at a price of $.30 per share for a total price of
$4,500. The shares were issued pursuant to an exemption from registration under
Section 4(2) of the Securities Act of 1933.

         On January 25, 2002, the Company sold 45,000 shares of its restricted
common stock to Whisper Investment Co., a Utah limited liability company, at a
price of $.30 per shares for a total price of $13,500. The shares were issued
pursuant to an exemption from registration under Section 4(2) of the Securities
Act of 1933.

Description of Common Stock.

         The Company's authorized capital stock consists of 150,000,000 shares
of common stock with a $.001 par value. As of the date of this Form 10-KSB
report, the Company has 2,795,300 outstanding shares of common stock, all of
which is validly issued, fully paid and nonassessable. The Company filed a
Certificate of Amendment to its Articles of Incorporation with the State of
Nevada on January 3, 2002, to increase the authorized capital stock of the
corporation from Fifty Million shares to One Hundred and Fifty Million shares
and to correspondingly increase the total issued and outstanding common stock
thereby effecting a three-for-one forward stock split.

         Holders of the Company's common stock are entitled to receive dividends
when declared by the Board of Directors out of funds legally available
therefore. Any such dividends may be paid in cash, property or shares of the
Company's common stock. All dividends are subject to the discretion of the Board
of Directors, and will depend upon, among other things, the Company's operating
and financial conditions, its capital requirements and its general business
conditions. Therefore, there can be no assurance that any additional dividends
on the Company's common stock will be paid in the future.

         All shares of the Company's common stock have equal voting rights and,
when validly issued and outstanding, have one vote per share on all matters to
be voted upon by the shareholders. Cumulative voting in the election of
directors is not allowed, and a quorum for shareholder meetings shall result
from a majority of the issued and outstanding shares present in person or by
proxy. Accordingly, the holders of a majority of the shares of common stock
present, in person or by proxy at any legally convened shareholders' meeting at
which the Board

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of Directors is to be elected, will be able to elect all directors and the
minority shareholders will not be able to elect a representative to the Board of
Directors.

         There are no pre-emptive or conversion rights, no redemption or sinking
fund provisions, and shares are not liable for further call or assessment. Each
share is entitled to share pro rata any assets available for distribution to
holders of its equity securities upon liquidation.

Description of Stock Options.

         The Board of Directors has adopted the EMPS Corporation 1998 Stock
Option Plan (the "Plan") allowing it to offer key employees, officers,
directors, consultants and advisors, an opportunity to acquire a proprietary
interest in the Company. The various types of incentive awards which may be
provided under the Stock Option Plan will enable the Company to respond to
changes in compensation practices, tax laws, accounting regulations and the size
and diversity of its business. To date, the Company has registered 280,000
shares under the Plan pursuant to an S-8 registration statement, 140,000 of
which have been issued. The Company has not granted any options pursuant to the
Plan as of the date of this report. The total number of shares reserved and
available for distribution under the Plan as of the date of this report is
260,000 shares. These shares would underlie options issued by the Company
pursuant to the Plan. Option holders will not be protected against dilution if
the Company issues additional shares in the future. Neither the options, nor the
shares underlying the option have preemptive rights.

         In the case of any reclassification, change, consolidation, merger,
sale or conveyance of our shares to another corporation, the Company will make
adequate provision whereby the registered holder of any outstanding option will
have the right thereafter to receive an exercise of the options immediately
prior to the reclassification, change, consolidation, merger, sale or conveyance
of the Company shares.

         Other provisions of the options are set forth below. This information
is subject to the provisions of the Plan and the Stock Option Certificates
representing the options. The following information is a summary of the EMPS
Corporation 1998 Stock Option Plan and is qualified by reference to the plan.

         1. The shares underlying the Options offered pursuant to the Plan are
subject to the same rights and restrictions as other shares.

         2. Once an option is granted, it may not be called by the Company.

         3. The options may not be sold prior to six months from the date of the
grant of the related award without our prior approval.

         4. Unless exercised within the time provided for exercise, the options
will automatically expire.

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<PAGE>

         5. The exercise price per share purchasable under a stock option shall
be determined by the Committee at the time of grant and may not be less that
100% of Fair Market Value of the shares, provided however, that the exercise
price of an Incentive Stock Option granted to a 10% Stockholder shall not be
less than 110% of the Fair Market Value of the shares.

         6. There is no minimum number of shares which must be purchased upon
exercise of the option.

         7. The option holders, in certain instances, are protected against
dilution of their interest represented by the underlying shares upon the
occurrence of stock dividends, stock splits, reclassifications and mergers.

Transfer Agent.

         The Company's transfer agent and registrar is Interwest Transfer
Company, Inc., 1981 East 4800 South, Suite 100, Salt Lake City, Utah 84117,
Telephone (801) 272-9294.

Iten 6:  Plan of Operations

         The Company's primary operations are to develop and demonstrate its
HFECS prototype.

         On or about January 16, 2001, the Company received a research grant in
the amount of $199,000 from the Department of Energy ("DOE"), through its Office
of Industrial Technologies 2000 Inventions and Innovation ("I&I") program for
use in developing an HFECS prototype.

         Altaire Holdings is assisting the Company in designing, fabricating and
assembling the prototype HFECS. Altaire will also be responsible for field
testing and training. Altaire began work on the prototype in February 2001 and
has finished much of the design, fabrication and assembly of the initial
prototype. Based on the work remaining to be completed, the Company expects
Altaire to finish the initial prototype for testing during the first quarter of
2002. The funds to pay Altaire have and will come from the I&I grant money.

         As of December 31, 2001, the Company has spent approximately $62,000 of
the I&I grant money. Approximately, $42,000 has been paid to Altaire. To date
the Company has also paid $20,000 to Stephen Smoot, a related party, in project
management fees associated with the application for and ongoing reporting
obligations associated with the I&I grant from the U.S. Department of Energy.
The Company does not expect to pay any additional project management fees.

         The Company has retained the University of Utah to test and analyze
equipment design and implementation, design working scale models and perform the
needed data analysis and computer modeling once the prototype is fully
functional. The University of Utah will also assess and develop a plan for
commercializing the technology. For these services, the University of Utah will
receive $104,968. The funds to pay for these services will come from the I&I
research grant received by the Company.

                                       13
<PAGE>

         The Company will use the remaining $32,000 of the I&I grant money for
travel expenses, patent updates and legal, management and accounting fees. The
proceeds remaining from the SB-1 offering, approximately $34,000, should be
sufficient to meet the working capital needs of the Company for the next twelve
months.

         The Company believes it can satisfy its cash requirements until
February 2003 from proceeds of its public offering and the I&I grant.
Thereafter, the Company will need to seek additional funding to finance
operations. To raise additional capital, the Company may have to sell additional
equity securities in accordance with federal and state securities laws. The
Company may also seek additional funds through debt financing.

         Based on projections submitted to the U.S. Department of Energy under
the terms of the I&I grant, following anticipated completion of the design,
fabrication, and assembly of the initial prototype in February 2002, the
University of Utah is scheduled to perform testing of the initial prototype.
Analysis of the data collected by the University of Utah during testing is
scheduled to occur from July 2002 to September 2002. Prototype demonstration is
scheduled to occur from July 2002 to October 2002. Based on the outcome of the
testing and prototype demonstrations, the University of Utah and Altaire are
scheduled to perform field testing in commercial settings, collect and analyze
field data, and make appropriate alterations from October 2002 to February 2003.

         Also, from March 2002 to January 2003, the University of Utah will also
perform market analysis for the Company's product. At this time, the Company
believes the primary market for its technology are nonferrous metal foundries.
The Company believes there are nearly 2,500 such foundries located in the United
States.

         The Company does not plan to market or manufacture the equipment.
Rather, it plans to research, develop and test the prototype. If and when
testing proves to be successful, the Company will seek to license the technology
for marketing and manufacture. The Company expects that the prototype will work
in smaller commercial settings.

         It is the Company's intent to pursue outside sources through licensing
agreements to market and exploit the commercial applications of this technology.
To date, however, the Company has no firm commitments or license arrangements in
place.

         The Company anticipates that its general and administrative expenses
will vary significantly from the general and administrative expenses incurred
during the last fiscal year. This significant increase is due primarily to the
fact that during last fiscal year the Company's primary general and
administrative expenses were related to applying for the I&I grant from the
Department of Energy. Since receiving the I&I grant in January 2001, the Company
has undertaken active operations associated with the development of the
Company's technology.

         The Company currently has no plans to purchase additional property,
plant or equipment.

                                       14
<PAGE>

Item 7:  Financial Statements



                        EMPS CORPORATION AND SUBSIDIARY
                         (Development Stage Companies)

                       CONSOLIDATED FINANCIAL STATEMENTS

                                      WITH

                          INDEPENDENT AUDITOR'S REPORT


                        EMPS CORPORATION AND SUBSIDIARY
                         (Development Stage Companies)


CONTENTS


                                                                      PAGE


Independent Auditor's Report                                           16

Consolidated Balance Sheets                                            17

Consolidated Statements of Operations                                  18

Consolidated Statement of Stockholders' Equity                         19

Consolidated Statements of Cash Flows                                  20

Notes to Consolidated Financial Statements                             21

                                       15
<PAGE>

Independent Auditor's Report


Board of Directors
EMPS CORPORATION


I have audited the accompanying consolidated balance sheets of EMPS Corporation
and subsidiary (development stage companies) as of December 31, 2001 and 2000
and the related consolidated statements of operations, stockholders' equity and
cash flows for the years ended December 31, 2001 and 2000 and the period from
inception (July 14, 1998) to December 31, 2001. These financial statements are
the responsibility of the Company's management. My responsibility is to express
an opinion on these financial statements based on my audits.

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

In my opinion, the financial statements referred to above present fairly, in all
material respects, the consolidated financial position of EMPS Corporation and
subsidiary (development stage companies) at December 31, 2001 and 2000, and the
consolidated results of their operations and their consolidated cash flows for
the years ended December 31, 2001 and 2000 and the period from Inception (July
14, 1998) to December 31, 2001 in conformity with accounting principles
generally accepted in the United States of America.


/s/ David T. Thomson, P.C.
Salt Lake City, Utah
January 30, 2002

                                       16
<PAGE>
<TABLE>
<CAPTION>
                         EMPS CORPORATION AND SUBSIDIARY
                          (Development Stage Companies)

                           CONSOLIDATED BALANCE SHEETS

                                     ASSETS

                                                                                     December 31,      December 31,
                                                                                         2001              2000
                                                                                   ---------------    --------------
<S>                                                                                  <C>                <C>
CURRENT ASSETS:
     Cash on hand                                                                    $     40,835       $    50,012
     Prepaid Expenses                                                                       1,050                 -
                                                                                     ------------       -----------

               Total Current Assets                                                        41,885            50,012
                                                                                     ------------       -----------

OTHER ASSETS
     Deferred offering costs                                                                    -             5,472
     Patents, net of amortization of $180 and $130                                          4,601               670
                                                                                     ------------       -----------

               Total Other Assets                                                           4,601             6,142
                                                                                     ------------       -----------

TOTAL ASSETS                                                                         $     46,486       $    56,154
                                                                                     ============       ===========

                               LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
     Accounts payable                                                                $     59,810       $    26,138
     Accrued interest payable                                                                   -               514
     Franchise tax payable                                                                    100                 -
     Deferred revenue                                                                       3,231                 -
     Due to Parent                                                                              -             5,051
                                                                                     ------------       -----------

               Total Current Liabilities                                                   63,141            31,703
                                                                                     ------------       -----------

STOCKHOLDERS' EQUITY (DEFICIT):
     Common stock; $.001 par value, 50,000,000
       shares authorized, 865,100, and 850,000
       shares issued and outstanding respectively                                             865               850
     Additional paid-in capital                                                            32,630            26,907
     Deficit accumulated during the development stage                                     (50,150)           (3,306)
                                                                                     ------------       -----------

               Total Stockholders' Equity (Deficit)                                       (16,655)           24,451
                                                                                     ------------       -----------

TOTAL LIABILITIES AND STOCKHOLDERS'  EQUITY                                          $     46,486       $    56,154
                                                                                     ============       ===========
</TABLE>
                                       17
<PAGE>
<TABLE>
<CAPTION>
                                                EMPS CORPORATION AND SUBSIDIARY
                                                  (Development Stage Companies)

                                              CONSOLIDATED STATEMENTS OF OPERATIONS



                                                                     For the              For the           Cumulative
                                                                    Year Ended           Year Ended         During The
                                                                   December 31,         December 31,        Development
                                                                       2001                 2000               Stage
                                                               -----------------    -----------------   ----------------
<S>                                                                <C>                   <C>              <C>
REVENUE                                                            $       -             $      -         $       -

EXPENSES
     General and administrative                                       47,610                  795            48,994
     Amortization expense                                                184                   54               414
                                                                   ---------             --------         ---------

          Total Expenses                                              47,794                  849            49,408
                                                                   ---------             --------         ---------

NET INCOME (LOSS) FROM OPERATIONS                                    (47,794)                (849)          (49,408)

OTHER INCOME (EXPENSE)
     Grant revenue, net of grant expenses of $62,157,
       $-0-, and $62,157                                                   -                    -                 -
     Interest income                                                     978                   22             1,000
     Other income                                                         51                    -                51
     Interest expense                                                    (79)                (446)             (684)
                                                                   ---------             --------         ---------

          Total income (expense)                                         950                 (424)              367
                                                                   ---------             --------         ---------

NET INCOME (LOSS) BEFORE CUMULATIVE
EFFECT OF ACCOUNTING CHANGE                                          (46,844)              (1,273)          (49,041)
     Cumulative effect of accounting change
     for organization costs                                                -                    -            (1,109)
                                                                   ---------             --------         ---------

NET INCOME (LOSS)                                                  $ (46,844)            $ (1,273)        $ (50,150)
                                                                   =========             ========         =========

EARNINGS (LOSS) PER SHARE BEFORE ACCOUNTING CHANGE                 $   (0.05)            $  (0.00)        $   (0.06)

CUMULATIVE EFFECT OF ACCOUNTING CHANGE                                     -                    -             (0.00)
                                                                   ---------             --------         ---------

EARNINGS (LOSS) PER SHARE                                          $   (0.05)            $  (0.00)        $   (0.06)
                                                                   =========             ========         =========

WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING                        863,842              804,167           819,905
                                                                   =========             ========         =========
</TABLE>
                                       18
<PAGE>
<TABLE>
<CAPTION>
                                         EMPS CORPORATION AND SUBSIDIARY
                                          (Development Stage Companies)

                                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                                                                          For The         For The       Cumulative
                                                                         Year Ended      Year Ended     During The
                                                                        December 31,    December 31,    Development
                                                                            2001            2000           Stage
                                                                       --------------- --------------- --------------
<S>                                                                         <C>              <C>           <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
     Cash from grant                                                        $  68,228        $      -      $  68,228
     Cash from interest received                                                  978              22          1,000
     Cash from other income                                                        50               -             50
     Cash paid for interest                                                       (79)              -            (79)
     Cash paid for grant expenses                                             (62,157)              -        (62,157)
     Cash paid for expense                                                    (21,171)           (245)       (21,663)
                                                                            ---------        --------      ---------

          Total cash used in operating activities                             (14,151)           (223)       (14,621)
                                                                            ---------        --------      ---------

CASH FLOW FROM INVESTING ACTIVITIES:
     Patents                                                                   (4,115)              -         (4,115)
     Organization costs                                                             -               -         (1,000)
                                                                            ---------        --------      ---------

          Total cash used in investing activities                              (4,115)              -         (5,115)
                                                                            ---------        --------      ---------

CASH FLOWS FROM FINANCING ACTIVITIES:
     Capital contributed to the Company                                             -               -          1,000
     Advances (payments) from Parent                                           (5,051)          1,340              -
     Sale of common stock for cash                                             15,100          50,000         65,100
     Deferred offering costs                                                     (960)         (1,105)        (5,529)
                                                                            ---------        --------      ---------

          Total cash provided by financing activities                           9,089          50,235         60,571
                                                                            ---------        --------      ---------

NET INCREASE (DECREASE) IN CASH                                                (9,177)         50,012         40,835

CASH - BEGINNING OF PERIOD                                                     50,012               -              -
                                                                            ---------        --------      ---------

CASH - END OF PERIOD                                                        $  40,835        $ 50,012       $ 40,835
                                                                            =========       =========      ========

RECONCILIATION OF NET INCOME (LOSS) TO NET CASH
   PROVIDED (USED) BY OPERATING ACTIVITIES

NET INCOME (LOSS)                                                           $ (46,844)       $ (1,273)     $ (50,150)
                                                                            ---------        --------      ---------

Adjustment to reconcile net income (loss) to net
     cash provided (used) by operating activities
          Cumulative effect of accounting change                                    -               -          1,109
          Amortization of organization and patent costs                           185              54            414
          Change in assets and liabilities
            (Increase) in prepaid expense                                      (1,050)              -         (1,050)
            Increase in deferred revenue                                        3,231               -          3,231
            Increase (decrease) in accrued interest                              (514)            386              -
            Increase in franchise tax payable                                     100               -            100
            Increase (decrease) in accounts payable                            30,741             610         31,725
                                                                              -------            ----        ------

                    Total Adjustments                                          32,693           1,050         35,529
                                                                              -------          ------        ------

NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES                            $ (14,151)       $   (223)     $ (14,621)
                                                                            =========        ========      =========

NONCASH TRANSACTIONS
     Part of consideration to purchase Subsidiary shares                    $       -        $      -      $   2,636
                                                                            =========        ========      =========
     Accounts payable for organizations costs                               $       -        $      -      $     209
                                                                            =========        ========      =========
     Accounts payable for deferred offering costs                           $       -        $ 19,838      $  29,670
                                                                            =========        ========      =========
     Commons stock issued for assignment of patents                         $       -        $      -      $     800
                                                                            =========        ========      =========
</TABLE>
                                       19
<PAGE>
<TABLE>
<CAPTION>
                                         EMPS CORPORATION AND SUBSIDIARY
                                          (Development Stage Companies)

                                 CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY

                                                                                                            Deficit
                                                                                                          Accumulated
                                                                        Common Stock        Additional     During The
                                                                  ------------------------    Paid-in      Development
                                                                    Shares       Amount       Capital         Stage
                                                                  ------------ ------------ ------------ ----------------
<S>                                                                  <C>           <C>       <C>              <C>
BALANCE, July 14, 1998 (inception)                                         -       $   -     $      -         $       -

Shares issued to parent in exchange for assignment
  of patents at par value of $.001 per share,
  July 14, 1998                                                      800,000         800            -                 -

Capital contributed to the Company to pay costs                            -                    1,000

Net income (loss) from inception (July 14, 1998) to
  December 31, 1998                                                        -           -            -              (120)
                                                                     -------       -----     --------         ---------

BALANCE, December 31, 1998                                           800,000         800        1,000              (120)

Net income (loss) for the year ended
  December 31, 1999                                                        -           -            -            (1,913)
                                                                     -------       -----     --------         ---------

BALANCE, December 31, 1999                                           800,000         800        1,000           (2,033)

Issuance of shares for cash pursuant to
  public offering of common stock at $1.00
  per share on December 25, 2000                                      50,000          50       49,950                 -

Offering costs associated with shares issued                               -           -      (24,043)                -

Net income (loss) for the year ended
  December 31, 2000                                                        -           -            -            (1,273)
                                                                     -------       -----     --------         ---------

BALANCE, December 31, 2000                                           850,000         850       26,907            (3,306)

Issuance of shares for cash pursuant to the completion
  of a public offering of common stock at $1.00
  per share on January 31, 2001                                       15,100          15       15,085                 -

Offering costs associated with shares issued
  issued                                                                   -           -       (9,362)                -

Net income (loss) for the year ended
  December 31, 2001                                                        -           -            -           (46,844)
                                                                     -------       -----     --------         ---------

BALANCE, December 31, 2001                                           865,100       $ 865     $ 32,630         $ (50,150)
                                                                     =======       =====     ========         =========
</TABLE>

                                       20
<PAGE>

                        EMPS CORPORATION AND SUBSIDIARY
                         (Development Stage Companies)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         Organization - EMPS Corporation (The Company) was organized under the
         laws of the State of Nevada on July 14, 1998 and has elected a fiscal
         year end of December 31st. The Company was formed for the purpose of
         furthering development and marketing of patented technology for
         commercially separating nonmagnetic particulate material from other
         materials without heat or water. On January 31, 2001, the Company
         formed a wholly owned subsidiary by issuing cash and other
         consideration for all of the issued and outstanding shares of EMPS
         Research Corporation (Research) (See note 9). The Company and its
         Subsidiary have not commenced planned principle operations and are
         considered development stage companies as defined in SFAS No. 7. The
         Company has acquired three patents having to do with the business
         purpose outlined above.

         Financial statements - The accompanying financial statements include
         only the accounts of EMPS Corporation and it's wholly-owned subsidiary
         (Research) and are not presented on a consolidated basis with Particle
         Separation Technologies, L.C., (PST) which is its Parent Company. At
         December 31, 2001 and 2000, PST owned 92.5%, and 94% of the common
         stock of EMPS Corporation respectively.

         Consolidation Policy - The consolidated balance sheet, statement of
         operations, and statement of cash flows at December 31, 2001, include
         the accounts of the Company and it's wholly-owned subsidiary
         (Research). The consolidated statement of operations and statements of
         cash flows at December 31, 2001 and 2000 excludes the Research
         financial information because Research was not in existence at that
         time. Intercompany transactions and balances have been eliminated in
         consolidation.

         Net Earnings Per Share - The computation of net income (loss) per share
         of common stock is based on the weighted average number of shares
         outstanding during the period presented.

         Organization Costs - The Company was amortizing its organization costs,
         which reflected amounts expended to organize the Company, over sixty
         (60) months using the straight-line method. In 1998, the Accounting
         Standards Executive Committee (AsSEC) of the American Institute of
         Certified Public Accountants issued Statement of Position (SOP) 98-5,
         "Reporting on the Cost of Start-up Activities." The SOP requires costs
         of start-up activities and organization costs to be expensed as
         incurred. During 1999, the Company adopted the SOP and recognized a
         charge for the cumulative effect of accounting change of $1,109.

         Assignment of Patent Rights - The Company is amortizing its cost
         associated with the acquisition of its patents over a remaining life of
         12.8 years using the straight-line method. This life is the legally
         remaining protected lives of the patents. Amortization expense shown
         from 1999 forward is for patents only.

         Income Taxes - Due to losses at December 31, 2001 and 2000, no
         provisions for income taxes has been made. There are deferred income
         taxes resulting from income and expense items being reported for
         financial accounting and tax reporting purposes in different periods.
         The difference arises from the accelerating of the write-off of
         organization costs for financial statement purposes as compared to
         amortizing over 60 months for tax purposes.

                                       21
<PAGE>

                        EMPS CORPORATION AND SUBSIDIARY
                         (Development Stage Companies)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED

         Cash and Cash Equivalents - For purposes of the statement of cash
         flows, the Company considers all highly liquid debt instruments
         purchased with a maturity of three months or less to be cash
         equivalents. The Company did not have non-cash investing activities
         during 2001 and 2000.

         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 period.
         Actual results could differ from those estimates.

         Grant revenue recognition - The DOE grant is funded on a cost
         reimbursement basis and payments received from the grant are treated as
         earned and recognized as revenue at the time expenditures reimbursable
         under the grant are made by the Company. The grant has provisions for
         advance payments. A grant receivable is recorded if expenditures exceed
         amounts received under the grant and deferred revenue is recorded if
         payments exceed costs expended under the grant.

         Reclassification - Certain accounts have been reclassified to conform
         with current presentation.

NOTE 2 - EQUITY TRANSACTIONS

         The Company on July 14, 1998 issued 800,000 of $.001 par value common
         stock to PST to acquire Patents to technology explained above in the
         organization footnote. The stock was valued at par value for a total
         acquisition cost of $800 (see Note 4). At December 31, 1998 $1,000 was
         contributed to the Company to pay certain cost to organize the Company.
         The Company has recorded the contributed capital as additional paid-in
         capital in its financial statements.

         Effective January 31, 2001, the Company completed a public offering of
         its common stock. The stock was sold at $1.00 per share. The Company
         sold 65,100 shares of its common stock for a total of $65,100. The
         direct costs of the offering were $33,405.

NOTE 3 - RELATED PARTY TRANSACTIONS

         PST (see financial statements - note 1) is providing free office space
         to the Company; the free rent has been determined to have only nominal
         value. At December 31, 2000, PST had paid in behalf of the Company
         certain accounting, legal and other professional fees, and other minor
         expenses in the amount of $5,051. These were treated as short-term
         advances and had accrued interest at 9% per annum until payment was
         made in 2001.

         The Company has no employees. Starting in the first quarter of 2001 and
         through the second quarter of 2001, compensation was paid to the
         project manager of the government grant issued to Research (see note 8)
         in the amount of $20,000. The project manager is a related party to
         Research through PST.

                                       22
<PAGE>

                        EMPS CORPORATION AND SUBSIDIARY
                         (Development Stage Companies)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 3 - RELATED PARTY TRANSACTIONS - CONTINUED

         As of December 31, 2001 and 2000 no compensation was paid or accrued to
         any officers or directors of the Corporation holding Research's stock
         due to the fact that it is of only nominal value.

NOTE 4 - ASSIGNMENTS OF PATENTS TO THE COMPANY

         As outlined above, PST has assigned patents for its technology to the
         Company in exchange for common stock of the Company. The term of the
         assignment is for the length of time covered under the letters of
         Patent. At the time of the assignment, the costs of the patents were
         recorded at no more than the cost of the patents to PST. During the
         year ending December 31, 2001, the Company paid, using cash, additional
         legal fees on the third patent for a cost of $1,970. These patents were
         then assigned to Research. (See Note 9).

NOTE 5 - STOCK OPTION PLAN

         The Company has adopted a stock option plan. The total number of shares
         of common stock reserved and available for distribution under the Plan
         shall be 400,000 shares. At December 31, 2001 and 2000 no options have
         been granted. The Company can grant incentive stock options or
         non-qualified stock options. The grant-holding period, the term of the
         grant, the grant exercise price, when the grant can be exercisable, and
         the method of exercise are detailed in the stock option plan.

NOTE 6 - INCOME TAXES

         At December 31, 2001 and 2000, the Company had net federal operating
         losses (NOL) of $47,285 and $2,681, which can be carried forward to
         offset operating income. The Company's NOL's will expire between the
         years 2021 and 2018. Valuation allowances of $7,519 and $496 have been
         established for deferred tax assets associated with the above NOL's for
         2001 and 2000 and for the amortizing of organization costs for tax
         purposes from 2000 forward. The change in the NOL allowances for 2001
         and 2000 was $7,023 and $191.

NOTE 7 - DEPARTMENT OF ENERGY AWARD

         The Department of Energy (DOE), through its Office of Industrial
         Technologies (OIT) 2000 Inventions and Innovation (I&I) Program has
         awarded a grant to Research. Research's application was titled
         "Development of a High-Frequency Eddy-Current Separator". The grant was
         approved in the amount of $199,000. The project period is from February
         1, 2001 to January 1, 2003. Specific amounts have been subcontracted to
         two entities to assist in the research to be conducted under the grant.
         Through December 31, 2001, Research has incurred grant expenses in the
         amount of $62,157.

                                       23
<PAGE>

                        EMPS CORPORATION AND SUBSIDIARY
                         (Development Stage Companies)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 8 - FORMATION OF WHOLLY OWNED SUBSIDIARY

         On January 31, 2001, the Company formed EMPS Research Corporation
         (Research) as a wholly owned Subsidiary by giving cash and other
         consideration in exchange for 1,000,000 shares of Research common
         stock. Research was incorporated on January 31, 2001 in the State of
         Utah. The Company owns all of the issued and outstanding common shares
         of Research (1,000,000 shares). The consideration given by the Company
         to Research for its shares was $2,100 of cash, payment of organization
         costs of $264 on behalf of Research, and the assignment of three
         Patents owned by the Company to Research at their book value
         (historical costs) at time of assignment in the amount of $2,636. Thus,
         the Company paid a total price of $5,000 for the 1,000,000 shares of
         common stock of Research.

NOTE 9 - SUBSEQUENT EVENTS

         Subsequent to December 31, 2001, the Company's board of directors
         adopted a resolution to increase the authorized capital stock of the
         Company from 50 million shares of common stock to 150 million shares
         and also authorized the Company to increase its total issued and
         outstanding shares of common stock by effecting a three-for-one forward
         stock split. The Company's total issued and outstanding common stock
         immediately following the forward split was 2,595,300 shares. The par
         value of the common stock will remain at $.001 per share.

         Also subsequent to December 31, 2001, the Company had the following
         stock and debt transactions. The Company sold 60,000 shares of
         restricted common stock for cash at a price of $ .30 per share for a
         total amount of $18,000. The Company pursuant its Stock Option Plan and
         by resolution of the Board of Directors approved a grant and issuance
         of 140,000 common shares as complete and full payment of all
         outstanding legal fees to its legal counsel. The shares issued are to
         be valued at fair market value at time of issuance. The amount owed to
         legal counsel at December 31, 2001 was $55,664. After this transaction
         the Company has available for distribution under the Stock Option Plan
         260,000 shares.

                                       24
<PAGE>

Item 8:  Changes in and disagreements with accountants on accounting and
         financial disclosure

                  None.

                                    PART III

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

         The following table sets forth the Company's directors, executive
officers, promoters and control persons, their ages, and all offices and
positions held within EMPS. Directors are elected for a period of one year and
thereafter serve until their successor is duly elected by the stockholders and
qualified. Officers and other employees serve at the will of the Board of
Directors.

Name of Director   Age    Term Served as          Positions with EMPS
----------------   ---    --------------          -------------------

Louis Naegle       36     Since August 26, 1998   President, Treasurer, and
                                                  Director

Timothy L. Adair   36     Since May 18, 1999      Principal Accounting Officer,
                                                  Secretary and Director

         The above individuals will serve as the Company's officers and/or
directors. A brief description of their positions, proposed duties and their
background and business experience follows:

         Louis Naegle, President, Treasurer and Director. Mr. Naegle graduated
from the University of Utah in 1991 with a Bachelor of Arts degree in Political
Science. Mr. Naegle brings over 13 years experience in marketing and sales. He
earned top sales awards while working for a large international home builder. In
1996-1997, he owned a successful sales consulting business with annual sales
revenue of about $70,000. From 1994 through 1998, Mr. Naegle was employed as a
sales agent for Equimark Properties, Inc. Since 1998, he has been a licensed
real estate broker. Mr. Naegle has sold over $30,000,000 in real estate. He
currently owns LISN Investments, LC., a limited liability company used for the
purchase and sale of real estate. He also brings experience from the
international arena where he served as liaison in the former Soviet Union for
SATCO International, a trading company specializing in tourism and sales of
consumer products.

         Timothy L. Adair, Principal Accounting Officer, Secretary and Director.
For more than ten years, Mr. Adair has worked at Intermountain Health Care in
Salt Lake City. Mr. Adair

                                       25
<PAGE>

currently acts as a HR Analysis Manager where he works specifically with
Information Systems/Processes and Financial Analysis. Mr. Adair graduated from
Brigham Young University in 1988 with a Bachelor of Science degree in Mechanical
Engineering and received a Masters of Business Administration from Brigham Young
University in 1990. Prior to his current position, Mr. Adair has six years
previous experience as a Financial Analyst and a Compensation Analyst. Mr. Adair
has had nearly ten years of real estate investment and management experience. He
is a Partner of Adlaw, a real estate holding and management partnership. He is
also a Member of Forest Property Management LLC, a limited liability company
used for the purchase and sale of real estate and accounting services.

Key Consultants

         Raj K. Rajamani, Ph.D. During the past five years, Dr. Rajamani has
been a professor at the Metallurgical Engineering Department of the University
of Utah. Dr. Rajamani received his Bachelor of Science in Chemical Engineering
at the Annamalai University in Madras, India and received his M. Tech. in
Chemical Engineering from the Indian Institute of Technology in Kanpur, India.
He later received both an M.E. in Chemical Engineering and a Ph.D. in Metallurgy
from the University of Utah. Dr. Rajamani has done research and published
extensively on ultra fine grinding, computational fluid dynamics applications,
electrodynamic separation of particles and has done modeling of grinding
kinetics and charge motion in comminution machines. Dr. Rajamani supports the
Company as a consultant on an as needed basis. Dr. Rajamani is 53 years old.

         Vladimir Leonidovich Saveliev, Ph.D. During the past five years, Dr.
Saveliev has worked as a Senior Researcher at the Institute of Ionosphere and
Higher Energy Physics, Academy of Sciences of the Republic of Kazakhstan, in
Almaty, Kazakhstan. Dr. Saveliev specializes in the fields of plasma physics,
electrodynamics, propagation of radio waves, kinetic theory, applied
mathematics, Monte-Carlo method and numerical simulation. His extensive
education includes a 1966 Specialized Physics, Mathematics and Chemistry
certificate, a 1971 Master of Science degree from Novosibirsk State University
in Physics, 1982 Degree, Candidate of Physical and Mathematical Sciences, which
is equivalent to a Ph.D. Defended at the Institute of Theory and Applied
Mechanics, Novosibirsk Scientific Center and a 1990 Academic Rank of Senior
Researcher, certified by the High Certification Committee at Ministry Council of
USSR. Dr. Saveliev began his professional career at the Institute of High Energy
Physics, Academy of Sciences of SazSSR in 1971. He has been advisor to the Ph.D.
Thesis of several scientists and a Senior Researcher, Scientific Consultant,
Leading Researcher. He is a member of the American Mathematic Society, Referee
of European Physics Letters and other journals, Expert of Ministry of Science -
Academy of Sciences Republic of Kazakhstan. Dr. Saveliev is widely published in
the areas of electromagnetics, plasma dynamics and ionosphere excitation. Dr.
Saveliev is 52 years old.

Compliance with Section 16(a) of the Exchange Act

         Directors and executive officers are required to comply with Section
16(a) of the Securities Exchange Act of 1934, which requires generally that such
persons file reports

                                       26
<PAGE>

regarding ownership of and transactions in securities of the Company on Forms 3,
4, and 5. A Form 3 is an initial statement of ownership of securities, which is
to be filed by the officers and directors owning shares in the Company within 10
days after the effective date of the Company's filing on Form 10-SB. Form 4 is
to report changes in beneficial ownership and is due on or before the tenth day
of the month following any month in which they engage in any transaction in the
Company's common stock. Form 5 covers annual statement of changes in beneficial
ownership which is due 90 days after the fiscal year end of the Company.

         Based solely on a review of Forms 3 and 5 and amendments thereto
furnished to the Company during its most recent fiscal year, it appears that
Louis Naegle and Timothy L. Adair inadvertently failed to timely file Form 3s.
Those reports have since been filed and both individuals have timely filed Form
5s.

Indemnification of Directors and Officers.

         There are no provisions in the Nevada corporation law or the Articles
of Incorporation of the Company requiring the Company to indemnify any of its
officers and directors. The Articles of Incorporation of the Company provide for
indemnification as follows:

         1) No director of the Corporation shall be personally liable to the
         Corporation or its stockholders for monetary damages for any action
         taken or an failure to take any action as a director, except as
         provided in this Article.

         2) The limitation of liability contemplated in this Article shall not
         extend to (a) the amount of a financial benefit received by a director
         to which he is not entitled, (b) an intentional infliction of harm on
         the corporation or the shareholders, (c) an intentional violation of
         criminal law, or (d) unlawful distributions.

         3) Any repeal or modification of this Article by the stockholders of
         the corporation shall not adversely affect any right or protection of a
         director of the corporation existing at the time of such repeal or
         modification.

         Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to officers and directors of the Company pursuant
to the provisions of the Company's Certificate of Incorporation, the Company has
been informed that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act of
1933 and is therefore unenforceable.



Item 10: Executive Compensation.

         The following chart sets forth the compensation paid by the Company to
each of its Executive Officers and Directors during the last three fiscal years:

                                       27
<PAGE>
<TABLE>
<CAPTION>
                                          SUMMARY COMPENSATION TABLE

                                                     Long Term Compensation                      Annual Compensation

                                                                                  Awards         Payouts          Restricted
Name and Principal                            Bonus  Other Annual     Stock      All Other
Position                   Year     Salary     $     Compensation  Options/ LTIP Awards SARs                 Payout Compensation
--------                   ----     ------    ---    ------------               ------ ----                 -------------------
<S>                        <C>         <C>     <C>         <C>            <C>         <C>            <C>              <C>
Louis Naegle               2001       -0-     -0-         -0-            -0-         -0-            -0-              -0-
President                  2000       -0-     -0-         -0-            -0-         -0-            -0-              -0-
                           1999       -0-     -0-         -0-            -0-         -0-            -0-              -0-

Tim Adair                  2001       -0-     -0-         -0-            -0-         -0-            -0-              -0-
Secretary                  2000       -0-     -0-         -0-            -0-         -0-            -0-              -0-
                           1999       -0-     -0-         -0-            -0-         -0-            -0-              -0-
</TABLE>


         No other compensation has been paid directly or accrued to any other
officer or director of the Company to date. The Company has no policy for
compensating its directors for attendance at Board of Directors meetings or for
other services as directors.

         Compensation of officers and directors is determined by the Company's
Board of Directors and is not subject to shareholder approval. The Company has
no agreement at this time, with any officer, director or key employee, regarding
employment with the Company or compensation for services.

         The Company has no retirement, pension, or benefit plan at the present
time, however, the Board of Directors may adopt plans as it deems to be
reasonable under the circumstances.

Employment Contracts and Termination of Employment and Change in Control
Arrangement

         The Company has no employment agreements with its executive officers
and currently has no other employees. In the past three years no executive
officer has received any amounts in connection with an executive officer's
resignation, retirement, or other termination. No executive officer received any
amounts in the last three years in connection with a change in control of the
Company of a change in the executive officer's responsibilities after a change
in control.

Item 11: Security Ownership of Certain Beneficial Owners and Management

         The term "beneficial owner" refers to both the power of investment and
the right to buy and sell shares of EMPS. It also refers to rights of ownership
or the right to receive distributions from EMPS and proceeds from the sale of
EMPS shares. Since these rights may be held or

                                       28
<PAGE>

shared by more than one person, each person who has a beneficial ownership
interest in shares is deemed to be the beneficial owners of the same shares
because there is shared power of investment or shared rights of ownership.


Type of                                        Amount & Nature of
Security  Name and Address                     Beneficial Ownership   % of Class
--------  ----------------                     --------------------   ----------

Common    Louis Naegle                                 -0-               -0-
          1020 E. 900 N.
          Bountiful, UT 84010

Common    Timothy L. Adair                             -0-               -0-
          4811 S. 1115 E.
          Salt Lake City, UT 84117

Common    Particle Separation Technologies L.C.    2,400,000             86%
          3500 Pine Valley Road
          Woodland, Utah 84036

--------------------------------------------------------------------------------
All officers and directors                             -0-               -0-
as a group (2 persons)
--------------------------------------------------------------------------------
                   TOTAL                           2,400,000             86%
--------------------------------------------------------------------------------

         Mr. Naegle and Mr. Adair are officers and directors of EMPS.

         The Stephen & Jill Smoot Family Trust is the beneficial owner of
Particle Separation Technologies, L.C. Therefore, shares that are in the
registered name of Particle Separation Technologies, L.C., are counted as shares
owned by The Stephen & Jill Smoot Family Trust. Stephen Smoot and Jill Smoot are
the trustees of the Stephen & Jill Smoot Family Trust, which was established for
the benefit of their six children. As trustees, Mr. and Mrs. Smoot have voting
and investment power over the shares held in the Trust and may be deemed to be
the beneficial owners of the shares held by the Trust.

Change in Control

         To the knowledge of the management, there are no present arrangements
or pledges of the Company's securities that may result in a change in control of
the Company.

                                       29
<PAGE>

Item 12: Certain Relationships and Related Transactions.

         From February 2001 to May 2001, the Company paid $20,000 to Stephen
Smoot in project management fees. Mr. Smoot has completed the services he was
retained to perform and the Company does not expect to pay him any addition
project management fees, associated with the application for and ongoing
reporting obligations associated with the I&I grant from the U.S. Department of
Energy. Mr. Smoot is a trustee of the Stephen and Jill Smoot Family Trust, which
is the beneficial owner of Particle Separation Technologies, L.C. Particle
Separation Technologies, L.C., holds approximately 86% of the Company's issued
and outstanding common shares.

         The Company does not anticipate engaging in any additional significant
dealings with affiliates. If, however, there are dealings with related parties
in the future, the Company will attempt to deal on terms competitive in the
market and on the same terms that either party would deal with a third person.

                                     PART IV

Item 13: Exhibits, financial statements, schedules and reports on Form 8-K.

         (a) The financial statements are listed in Item 7 of Part II of this
report.

         (b) Reports on Form 8-K:

         The Company filed a current report on Form 8-K with the Securities and
Exchange Commission on January 7, 2002, reporting a change under Item 5 or Other
Information. Under Item 5 the Company reported that it increased its authorized
capital stock of the corporation from Fifty Million shares to One Hundred and
Fifty Million shares and correspondingly increased its total issued and
outstanding common stock thereby effecting a three-for-one forward stock split.
There were no financial statements filed, nor were financial statements required
to be filed, in connection with this Form 8-K.

         (c) Exhibits

Exhibit
Number      Title of Document                                Location

3.1         Articles of Incorporation                        As filed (1)

3.2         Bylaws                                           As filed (1)

4.1         EMPS Corporation 1998 Stock Option Plan          As filed (1)

                                       30
<PAGE>

10.1        Assignment of Patents                            As filed (1)

10.2        Assignment of Patents                            As filed (2)

10.3        Assignment of Patents                            As filed (2)

10.4        Subcontract Agreement                            As filed (3)

21.1        Subsidiaries of Registrant                       As filed (2)

99.1        Award of grant from the Department of Energy     As filed (3)

(1)      Incorporated by reference to the Form SB-1 filed by the Company on
         September 9, 1999.
(2)      Incorporated by reference to the Form 10-SB filed by the Company on
         October 10, 2001.
(3)      Incorporated by reference to the Form 10-SB/A-1 filed by the Company on
         November 21, 2001.

                                       31
<PAGE>

                                   SIGNATURES


         In accordance with Section 12 of the Securities Exchange Act of 1934,
the registrant caused this registration statement to be signed on its behalf,
thereunto duly authorized.


                                       EMPS CORPORATION


Date: January 31, 2002
                                       /s/ Louis Naegle
                                       ---------------------------------------
                                       Louis Naegle
                                       President



Date: January 31, 2002                 /s/ Timothy L. Adair
                                       ---------------------------------------
                                       Timothy L. Adair
                                       Principal Accounting Officer, Secretary


                                       32