U.S. SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                   FORM 10-KSB40


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

        For the fiscal year ended December 31, 2001

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

         For the transition period from       to
                                       -------  -------

                         Commission file number 0-27239

                                  EDUVERSE.COM
         ---------------------------------------------------------------
        (Exact name of small business issuer as specified in its charter)

            NEVADA                                                88-0277072
 ------------------------------                               -----------------
(State or other jurisdiction of                              (I.R.S. Employer
 incorporation of organization)                              Identification No.)


                               7583 Water View Way
                               Reno, Nevada 89511
                     --------------------------------------
                    (Address of Principal Executive Offices)

                                 (360) 332-7734
                            -------------------------
                           (Issuer's telephone number)

                          1135 Terminal Way, Suite 209
                             Reno, Nevada 89502-2168
               --------------------------------------------------
              (Former name, former address and former fiscal year,
                          if changed since last report)


     Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.

                               Yes   X    No
                                   -----    -----

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

     State the issuer's revenues for its more recent fiscal year (ending
December 31, 2001): $-0-.

     State the aggregate market value of the voting and non-voting common equity
held by non-affiliates computed by reference to the price at which the common
equity was sold, or the average bid and asked prices of such common equity, as
of January 31, 2002: $54,358.78.

     State the number of shares outstanding of each of the issuer's classes of
common equity, as of the most practicable date:

Class                                    Outstanding as of March 25, 2002

Common Stock, $.001 par value            1,000,000

<PAGE>


                                     PART I

ITEM 1. DESCRIPTION OF BUSINESS

BUSINESS HISTORY AND DEVELOPMENT

     General

     Eduverse.com, a Nevada corporation which currently trades on the OTC
Bulletin Board under the symbol "EDVS" (referred to in this Form 10-KSB as the
"Company"), through its former wholly-owned subsidiary Eduverse Dot Com Inc.
("Eduverse"), had primarily been a technology-based company engaged in the
business of developing and marketing interactive multimedia educational software
programs. During fiscal year 1999, however, the Company began exiting the
traditional method of selling its software through retail channels and focused
primarily on partnering with various governments to combine education, the
Internet and corporate advertising in marketing its new products. The Company
expected to generate a majority of its revenues from these software products by
charging fees for advertising that was to be placed within the software. The
Company intended to offer its software free to educational and other
institutions within approximately thirty countries, which operated private
computer networks and allowed advertisements to be displayed to their students,
and to collect advertising fees for advertisements placed within the software.

     During fiscal year 1999, revenues were derived from three sources: (i) the
retail sale of its software packages, (ii) distribution royalty fees, and (iii)
income derived from the sale of two website names. During fiscal year 1999, the
Company recognized no advertising revenues from its English Pro Network Edition
software. As a result, quarterly revenues began to decline during late fiscal
year 1999 resulting in a substantial net loss.

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<PAGE>


     Fiscal Year 2000

     During fiscal year 2000, quarterly revenues continued to decline as
compared to quarterly revenues earned in the same periods during 1999. Any
revenues earned were derived principally from the marketing and sale of the
Company's software packages. Seventy-seven percent (77%) of the Company's retail
software sale revenue was derived from two customers. Management of the Company
primarily attributed the decrease in revenues to the Company's decision to
discontinue retail software sales of its programs. Management of the Company
expected to generate the majority of its future revenues commencing third
quarter of 2000 from advertising revenues earned from fees charged for inclusion
of the advertiser's message on the Company's English Pro Network Edition
software. During fiscal year 2000, the Company recognized no advertising
revenues from its English Pro Network Edition software. In August 2000, the
Company sold its entire equity interest in ESL to Savoy Capital Limited. See
"Item 6. Management's Discussion and Analysis or Plan of Operation".

     Fiscal Year 2001

     At a special meeting held on March 2, 2001, the board of directors
unanimously approved a share purchase agreement dated March 2, 2001 (the "Share
Purchase Agreement") between the Company and Syncro-Data Systems, Ltd.
("Syncro-Data"), a corporation organized under the laws of British Columbia (the
"Proposed Transaction"), and directed that the Share Purchase Agreement be
submitted to shareholders of the Company for their approval. On June 1, 2001,
the Proposed Transaction was consummated pursuant to the terms of the Share
Purchase.

     The Share Purchase Agreement provided for the sale by the Company to
Syncro-Data of all of the issued and outstanding shares of common stock of
Eduverse, the Company's wholly-owned subsidiary, held by the Company. The Share
Purchase Agreement further provided that (i) Syncro-Data had paid the ongoing
expenses of Eduverse to date in the approximate amount of $50,000; (ii)
Syncro-Data had agreed to recognize certain liabilities of Eduverse; and (iii)
Eduverse would retain all of its right, title and interest in and to certain
intellectual property rights and other property, including accounts receivable,
contract revenue and outstanding cash in the approximate amount of $900.00.

     The Company and Syncro-Data closed the Proposed Transaction on June 30,
2001. Based upon review of a wide variety of factors considered in connection
with its evaluation of the sale of assets, the board of directors of the Company
believed that the sale of substantially all of the assets of the Company,
through consummation of the Share Purchase Agreement, would be fair to and in
the best interests of the Company and its shareholders.

     Fiscal Year 2002

     The Company terminated all development of its previous business
commensurate with the sale of the Company's wholly-owned subsidiary to
Syncro-Data on June 30, 2001, and ceased to actively market itself as a
technology-based company.

     Current management of the Company anticipates that during fiscal year 2002,
the Company will continue to undertake research relating to prospective new
business endeavors. Management anticipates that this research will result in the
Company entering into business operations that are not in the educational
software industry.

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<PAGE>


ITEM 2. PROPERTIES

     The Company does not own any real estate or other properties. The Company's
registered office is located at 7583 Water View Way, Reno, Nevada 89511.

ITEM 3. LEGAL PROCEEDINGS

     (a) On approximately September 5, 2001, a complaint was filed in the
Supreme Court of British Columbia by Mark Edward Bruk, a prior officer and
director of the Company, against the Company (the "Complaint"). The Complaint
filed by Mr. Bruk alleged that as the prior president and chief executive
officer of the Company, Mr. Bruk was entitled to receive amounts for alleged
unpaid salary, alleged unpaid benefits, and for alleged reimbursement of
expenses.

     On January 8, 2002, the Supreme Court of British Columbia set aside the
Complaint, and the Company obtained an Order from the Court stating that the
Court did not have jurisdiction to hear the claim. As of the date of this Annual
Report, Mr. Bruk has not filed a subsequent complaint against the Company in any
other court.

     (b) On approximately May 17, 2001, a complaint was filed with the
Securities and Exchange Commission against the Company ("SEC Complaint
HO-309021"). The SEC Complaint HO-309021 involves a previous investor of the
Company who had subscribed for shares of restricted Common Stock during October
2000 pursuant to a subscription agreement and who subsequently attempted to
rescind the transaction. On May 31, 2001, the Company answered SEC Complaint
HO-309021. As of the date of this Annual Report, management of the Company
believes that the potential damages sought by the investor are based on
groundless causes of action. Management intends to aggressively continue its
defense, and to further review its potential legal actions and legal remedies

     Except as disclosed above, management is not aware of any other legal
proceedings contemplated by any governmental authority or other party involving
the Company or its properties. No director, officer or affiliate of the Company
is (i) a party adverse to the Company in any legal proceedings, or (ii) has an
adverse interest to the Company in any legal proceedings. Management is not
aware of any other legal proceedings pending or that have been threatened
against the Company or its properties.

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

     Pursuant to a Definitive Proxy Statement dated April 16, 2001, a
shareholders' special meeting was held on June 1, 2001 in which the shareholders
of the Company voted and approved certain proposals. Fifty-two percent (52%) of
the outstanding shares of common stock entitled to vote, represented in person
or by proxy, was required for a quorum at the special meeting. The affirmative
vote of shareholders holding at least a majority of the shares of common stock
present, or represented, at the special meeting, was required to approve certain
proposals as follows:

     1.   the approval of the sale of substantially all of the Company's assets,
          which included approval of a share purchase agreement dated March 2,
          2001 between the Company and Syncro-Data Systems, Ltd. (the "Share
          Purchase Agreement"). The Share Purchase Agreement provided for the

                                       4

<PAGE>


          sale by the Company to Syncro-Data of all of the issued and
          outstanding shares of common stock of Eduverse Dot Com, Inc., the
          Company's wholly-owned subsidiary (24,871,592 votes for and 11,200
          votes against);

     2.   the authorization of the board of directors to effect a reverse stock
          split of fifty-for-one (the "Reverse Stock Split") of the Company's
          issued and outstanding Common Stock, which the board of directors
          authorized and effectuated in the best interests the Company and its
          shareholders on June 8, 2001 (28,833,076 votes for and 14,802 votes
          against);

     3.   the adoption of an amendment (the "Amendment") to the Company's
          Articles of Incorporation, as amended (the "Articles"), which would
          effect the Reverse Stock Split, without having any effect upon the
          authorized and unissued shares of Common Stock (28,831,846 votes for
          and 13,404 votes against);

     4.   the election of the following two (2) persons to serve as directors of
          the Company until their successor shall have been elected and
          qualified: Grant Atkins and Herb Ackerman (28,831,846 votes for and
          13,802 votes against); and

     5.   the ratification of the selection of LaBonte & Co. as the independent
          public accountants of the Company for the fiscal year ending December
          31, 2001 (28,831,846 votes for and 13,802 votes against).

     No other matters or business were introduced or voted upon by the
shareholders at the special meeting.

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

MARKET INFORMATION

     The Company's common stock is traded on the OTC Bulletin Board under the
symbol "EDVS". The market for the Company's common stock is limited, volatile
and sporadic. The following table sets forth the high and low sales prices
relating to the Company's common stock for the last two fiscal years. These
quotations reflect inter-dealer prices without retail mark-up, mark-down, or
commissions, and may not reflect actual transactions.

                                      FISCAL YEARS ENDED
                  ------------------------------------------------------------
                  DECEMBER 31, 2001                  DECEMBER 31, 2000
                  ------------------------------------------------------------
                  HIGH BID          LOW BID          HIGH BID         LOW BID
                  ------------------------------------------------------------

First Quarter     $0.030            $0.022           $2.781           $0.410
Second Quarter    $0.200            $0.350           $1.531           $0.500
Third Quarter     $1.200            $0.250           $0.812           $0.420
Fourth Quarter    $1.000            $0.150           $0.530           $0.090

HOLDERS

     As of March 25, 2002, the Company had approximately 101 shareholders of
record.

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<PAGE>


DIVIDENDS

     No dividends have ever been declared by the board of directors of the
Company on its common stock. The Company's losses do not currently indicate the
ability to pay any cash dividends, and the Company does not indicate the
intention of paying cash dividends on its common stock in the foreseeable
future.

TRANSFER AGENT

     The Company's transfer agent is Global Stock Transfer, Inc., 191 University
Blvd., Suite 410, Denver, Colorado 80206, telephone (303) 355.4646, and
facsimile (303) 355.5532.

RECENT SALES OF UNREGISTERED SECURITIES

     During fiscal year ended December 31, 2001, to provide capital, the Company
has sold stock in private placement offerings or issued stock in exchange for
debts of the Company or pursuant to contractual agreements as follows:

     o    On March 14, 2001, the Company entered into a settlement agreement
          with a creditor whereby the Company agreed to issue 2,989,000 shares
          of restricted common stock at $0.04377 per share under Rule 903(b)(3)
          of Regulation S of the Securities Act of 1933, as amended (the
          "Securities Act"). Under the terms of the settlement agreement, the
          creditor agreed to accept the 2,989,000 shares of common stock as
          payment for an aggregate debt in the amount of $130,836.12 owed to
          such creditor. In accordance with the Reverse Stock Split, the
          2,989,000 shares were reduced to 59,780 shares of common stock.

     o    On March 14, 2001, the Company entered into a settlement agreement
          with a creditor whereby the Company agreed to issue 1,663,000 shares
          of restricted common stock at $0.04271 per share under Rule 903(b)(3)
          of Regulation S of the Securities Act. Under the terms of the
          settlement agreement, the creditor agreed to accept the 1,663,000
          shares of Common Stock as payment for an aggregate debt in the amount
          of $71,022.20 owed to such creditor. The Company issued 1,663,000
          shares in reliance upon the exemption from registration provided by
          Regulation S. In accordance with the Reverse Stock Split, the
          1,663,000 shares were reduced to 33,260 shares of common stock.

     o    On March 14, 2001, the Company entered into a settlement agreement
          with a creditor whereby the Company agreed to issue 1,163,000 shares
          of restricted common stock at $0.0427 per share under Rule 903(b)(3)
          of Regulation S of the Securities Act. Under the terms of the
          settlement agreement, the creditor agreed to accept the 1,163,000
          shares of Common Stock as payment for an aggregate debt in the amount
          of $49,657.27 owed to such creditor. The Company issued 1,163,000
          shares in reliance upon the exemption from registration provided by
          Regulation S. In accordance with the Reverse Stock Split, the
          1,163,000 shares were reduced to 23,260 shares of common stock.

     o    On March 14, 2001, the Company entered into a settlement agreement
          with a creditor whereby the Company agreed to issue 260,000 shares of
          restricted common stock at $0.04264 per share under Rule 903(b)(3) of

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<PAGE>


          Regulation S of the Securities Act. Under the terms of the settlement
          agreement, the creditor agreed to accept the 260,000 shares of Common
          Stock as payment for an aggregate debt in the amount of $11,086.83
          owed to such creditor. The Company issued 260,000 shares in reliance
          upon the exemption from registration provided by Regulation S. In
          accordance with the Reverse Stock Split, the 260,000 shares were
          reduced to 5,200 shares of common stock.

     o    On March 14, 2001, the board of directors of the Company authorized
          the execution of a settlement agreement between the Company and
          Investor Communications International, Inc. ("ICI") and the subsequent
          issuance of 15,230,000 shares of its restricted common stock. The
          Company had incurred debt inclusive of accrued interest in the
          aggregate amount of $456,896.55 with ICI pursuant to past financial,
          administrative and managerial services performed by ICI on behalf of
          the Company. Therefore, the Company entered into a settlement
          agreement dated March 14, 2001 with ICI, whereby ICI agreed to settle
          the debt owed to it by the Company and accept the issuance of
          restricted common shares of the Company as settlement for all interest
          and principle due and outstanding as of the date of the Settlement
          Agreement. On March 14, 2001, the Company issued 15,230,000 shares of
          its restricted common stock to ICI. In accordance with the Reverse
          Stock Split, the 15,230,000 shares were reduced to 304,600 shares of
          restricted common stock.

     o    On March 14, 2001, the Company entered into a settlement agreement
          with a creditor whereby the Company agreed to issue 1,753,000 shares
          of restricted common stock at $0.03 per share under Rule 903(b)(3) of
          Regulation S of the Securities Act. Under the terms of the settlement
          agreement, the creditor agreed to accept the 1,753,000 shares of
          common stock as payment for an aggregate debt in the amount of
          $52,592.97 owed to such creditor. The Company issued 1,753,000 shares
          in reliance upon the exemption from registration provided by
          Regulation S. In accordance with the Reverse Stock Split, the
          1,753,000 shares were reduced to 35,060 shares of common stock.

     o    On December 12, 2001, the Company entered into a settlement agreement
          with ICI whereby the Company agreed to issue 249,870 shares of its
          restricted common stock at $0.15 per share under Section 4(2) of the
          Securities Act. Under the terms of the settlement agreement, ICI
          agreed to accept the 249,870 shares of stock as payment for an
          aggregate debt in the amount of $37,480.55 owed to ICI by the Company
          for past financial, administrative and managerial services performed
          by ICI on behalf of the Company. The Company issued 249,870 shares in
          reliance upon the exemption from registration provided by Section
          4(2).

     On approximately April 26, 2001, pursuant to a private transaction not
involving a public sale, Vaughn Barbon, an individual and resident of Canada
("Barbon") sold 2,000,000 shares of restricted common stock to Syncro-Data at a
price of $0.01 per share for an aggregate consideration of approximately
$20,000. On April 26, 2001, Barbon held of record 3,018,953 shares of restricted
common stock. The 2,000,000 shares of common stock acquired by Syncro-Data were
restricted securities. Syncro-Data executed a document in which it acknowledged
that the securities had not been registered under the Securities Act of 1933, as
amended, that it understood the economic risk of an investment in the
securities, and that it had the opportunity to ask questions of and receive

                                       7

<PAGE>


answers from management of the Company concerning any and all matters related to
the acquisition of securities. No underwriter was involved in the transaction,
and no commissions or other remuneration were paid in connection with the sale
and purchase of the securities. In accordance with the Reverse Stock Split, the
2,000,000 shares were reduced to 40,000 shares of common stock.

ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND
        RESULTS OF OPERATIONS

     The following discussions of the results of operations and financial
position of the Company should be read in conjunction with the financial
statements and notes pertaining to them that appear elsewhere in this Form
10-KSB.

GENERAL

     The Company had previously been a software development company specializing
in Internet delivery platforms for E-Education (the "E-Education Software").
During fiscal year 2000, the Company focused primarily on the research,
development and design of a new e-commerce educational delivery model that
provided users with free access to online education. The Company anticipated
that the majority of its future revenues would be from advertising revenues
generated from inclusion of an advertiser's message on the Company's E-Education
Software.

     During fiscal year ended December 31, 2000, the Company derived its
revenues principally from the retail marketing and sale of its E-Education
Software to customers generally in the retail software distribution and
generated no revenues from advertisers.

     During fiscal year ended December 31, 2001, the Company terminated
development of any new software programs and upgrades to existing products,
withdrew its software products and services from the marketplace, and ceased to
actively market itself as a technology-based company. As a result, the Company
did not generate any revenues during fiscal year ended December 31, 2001.

RESULTS OF OPERATIONS

For Fiscal Year Ended December 31, 2001 compared with Fiscal Year Ended December
31, 2000.

     The Company's net losses during fiscal year ended December 31, 2001 were
approximately $384,540 compared to a net loss of approximately $1,291,831 (a
decrease of $907,291).

     Net revenues during fiscal year ended December 31, 2001 were $-0- compared
to net revenues during fiscal year ended December 31, 2000 of $29,341. The lack
of revenues during fiscal year ended December 31, 2000 resulted from the
Company's decision to discontinue retail sales of its software products and the
divestiture of Eduverse. During fiscal year ended December 31, 2000, gross
revenues were $31,811. Cost of revenues during fiscal year ended December 31,
2000 was $2,470. Cost of revenues generally consisted of expenses associated
with the physical production of the "boxed" software packages that were sold in
the retail market.

     During fiscal year ended December 31, 2001, the Company recorded operating
expenses of $379,863 compared to $489,848 of operating expenses recorded during
fiscal year ended December 31, 2000 (a decrease of $109,985). During fiscal year

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ended December 31, 2001, operating expenses consisted only of general and
administrative expenses. Although there was a decrease in operating expenses
during fiscal year ended December 31, 2001, general and administrative expenses
increased by $314,489 from $65,374 incurred during fiscal year ended December
31, 2000 compared to $379,863 incurred during fiscal year ended December 31,
2001. This increase in general and administrative expenses during fiscal year
ended December 31, 2001 was primarily due to an increase in expenses related to
the negotiation, consummation and sale of Eduverse, the termination of previous
operating activities, and required shareholder approval of the Share Purchase
Agreement dated March 2, 2001. See "Item 4. Submission of Matters to a Vote of
Security Holders."

     General and administrative expenses generally include corporate overhead,
administrative salaries, selling expenses, consulting costs and professional
fees. Of the $379,863 incurred as general and administrative expenses, an
aggregate of $290,700 was incurred payable to Investor Communications
International, Inc. ("ICI") for services rendered by ICI including, but not
limited to, financial, administrative and investor relations management. During
fiscal year ended December 31, 2001, the Company incurred $225,000 to ICI, which
together with other unpaid fees and advances of $231,896, which resulted in an
aggregate of $456,896 due and owing ICI. This amount was settled pursuant to a
settlement agreement dated March 14, 2001 between the Company and ICI whereby
ICI agreed to accept the issuance of 15,230,000 shares of restricted common
stock in settlement and release of the $456,896 due and owing. Subsequent to the
settlement an additional $65,700 in fees was accrued to ICI. Of the additional
$65,700 incurred, $37,481 was settled pursuant to a settlement agreement dated
December 12, 2001 between the Company and ICI whereby ICI agreed to accept the
issuance of 249,870 shares of restricted common stock in settlement and release
of the $37,481 due and owing. A director of the Company is employed by ICI and
is part of the management team provided by ICI to the Company. See "PART I. Item
5. Market for Registrant's Common Equity and Related Stockholder Matters -
Recent sales of Unregistered Securities".

     There were no selling and marketing expenses incurred during fiscal year
ended December 31, 2001 as compared to $416,167 incurred during fiscal year
ended December 31, 2000. There were no research and development expenses
incurred during fiscal year ended December 31, 2001 as compared to the $5,000
incurred during fiscal year ended December 31, 2000. This resulted primarily
from the Company's termination of the development of its software programs and
upgrades, the withdrawal of its software products and services from the
marketplace, the sale of operating subsidiary interests, and the discontinuation
of marketing itself as a technology-based company.

     During fiscal year ended December 31, 2001, the Company realized a net gain
on disposal of its subsidiary, Eduverse, of $107,505 as compared to the $141,847
gain on the disposal of ESL realized during fiscal year ended December 31, 2000.

     During fiscal year ended December 31, 2001, the Company realized a net loss
from discontinued operations in the amount of $112,182 as compared to $973,171
during fiscal year ended December 31, 2000. These losses resulted from the
discontinued business operations involving the Company's previously owned
subsidiary interests and its software products.

     As discussed above, the decrease in net loss during fiscal year ended
December 31, 2001 as compared to fiscal year ended December 31, 2000 is
attributable primarily to the realization of the loss of $112,182 compared to

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$973,171 from discontinued operations and the decrease in operating expenses.
The Company's net losses during fiscal year ended December 31, 2001 was
approximately ($384,540) or ($0.57) per common share compared to a net loss of
approximately ($1,291,831) or ($4.61) per common share during fiscal year ended
December 31, 2000. The weighted average of common shares outstanding were
676,154 for fiscal year ended December 31, 2001 compared to 280,101 for fiscal
year ended December 31, 2000, after giving retroactive effect to the fifty for
one share consolidation completed on June 8, 2001.

LIQUIDITY AND CAPITAL RESOURCES

     The Company must raise additional capital. Further, the Company has not
generated sufficient cash flow to fund its operations and activities.
Historically, the Company has relied upon internally generated funds, funds from
the sale of shares of stock and loans from its shareholders and private
investors to finance its operations and growth. The Company's future success and
viability are entirely dependent upon the Company's current management to
successfully research and identify new business endeavors, and to raise
additional capital through further private offerings of its stock or loans from
private investors. There can be no assurance, however, that the Company will be
able to successfully research, identify and acquire new business endeavors and
to raise additional capital. The Company's failure to successfully identify and
acquire new business endeavors and to raise additional capital will have a
material and adverse affect upon the Company and its shareholders. The Company's
financial statements have been prepared assuming that it will continue as a
going concern, and accordingly, do not include adjustments relating to the
recoverability and realization of assets and classification of liabilities that
might be necessary should the Company be unable to continue in operation.

     As of December 31, 2001, the Company's current assets were $-0- and its
current liabilities were $173,026, which resulted in a working capital deficit
of $173,026. The Company's current liabilities consist primarily of accounts
payable and accrued liabilities in the amount of $130,185 and amounts due to
related party in the amount of $42,841. During fiscal year ended December 31,
2001, loans payable in the amount of $494,377 were settled by execution of
settlement agreements and issuance by the Company of restricted shares of common
stock. See "Item 5. Market for Registrant's Common Equity and Related
Stockholder Matters".

     As of December 31, 2000, the Company's total stockholders' deficit
decreased to ($173,026) from ($561,951) at December 31, 2000.

     The Company has not generated positive cash flows from operating
activities. For fiscal year ended December 31, 2001, net cash from operating
activities was $2,377 compared to $879,738 of net cash used in operating
activities for fiscal year ended December 31, 2000 (an increase of $882,115). As
noted above, the main decrease was comprised of a net loss of $379,863 for
fiscal year ended December 31, 2001 compared to a net loss of $460,507 for
fiscal year ended December 31, 2000 (a decrease of $80,644). Stock issued in
payment for services increased to $238,202 for fiscal year ended December 31,
2001 compared to $118,576 for fiscal year ended December 31, 2000. Changes in
non-cash working capital items decreased to $138,984 for fiscal year ended
December 31, 2001 compared to $372,308 for fiscal year ended December 31, 2000.

     The Company's cash flow from investing activities during fiscal year ended
December 31, 2001 was $-0- compared to $2,861 from investing activities during
fiscal year ended December 31, 2000, which consisted of purchase of fixed
assets.

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     Net cash used in financing activities was $2,377 for fiscal year ended
December 31, 2001 compared to cash flow from investing activities of $807,787
for fiscal year ended December 31, 2000. Net cash provided by financing
activities during fiscal year ended December 31, 2000 resulted primarily from
(i) advances in the amount of $183,776, and (ii) the issuance of common stock in
the amount of $608,000 for fiscal year. Net cash used in financing activities
was $2,377 for fiscal year ended December 31, 2001 resulting primarily from cash
disposed on the sale of the Company's subsidiary, Eduverse.

     Current management of the Company anticipates a possible increase in
operating expenses in order to successfully research and identify new business
endeavors. The Company may finance these expenses with further issuance of
common stock of the Company. The Company believes that any anticipated private
placements of equity capital and debt financing, if successful, may be adequate
to fund the Company's operations over the next six months. Thereafter, the
Company expects it will need to raise additional capital to meet long-term
operating requirements. The Company may encounter business endeavors that
require significant cash commitments or unanticipated problems or expenses that
could result in a requirement for additional cash before that time. If the
Company raises additional funds through the issuance of equity or convertible
debt securities other than to current shareholders, the percentage ownership of
its current shareholders would be reduced, and such securities might have
rights, preferences or privileges senior to its common stock. Additional
financing may not be available upon acceptable terms, or at all. If adequate
funds are not available or are not available on acceptable terms, the Company
may not be able to take advantage of prospective new business endeavors or
opportunities, which could significantly and materially restrict the Company's
business operations.

AUDIT COMMITTEE

     As of the date of this Annual Report, the Company has not appointed members
to an audit committee and, therefore, the respective role of an audit committee
has been conducted by the board of directors of the Company. When established,
the audit committee's primary function will be to provide advice with respect to
the Company's financial matters and to assist the board of directors in
fulfilling its oversight responsibilities regarding finance, accounting, tax and
legal compliance. The audit committee's primary duties and responsibilities will
be to: (i) serve as an independent and objective party to monitor the Company's
financial reporting process and internal control system; (ii) review and
appraise the audit efforts of the Company's independent accountants; (iii)
evaluate the Company's quarterly financial performance as well as its compliance
with laws and regulations; (iv) oversee management's establishment and
enforcement of financial policies and business practices; and (v) provide an
open avenue of communication among the independent accountants, management and
the board of directors.

     The board of directors has considered whether the regulatory provision of
non-audit services is compatible with maintaining the principal independent
accountant's independence.

     Audit Fees

     As of the date of this Annual Report, the Company has incurred
approximately $14,400 in fees to its principal independent accountant for
professional services rendered during fiscal year ended December 31, 2001 in
connection with preparation of the Company's audited financial statements. For
fiscal year ended December 31, 2001, the Company incurred approximately $10,200
as fees billed by its principal independent accountant for all other non-audit
services (including reviews of the Company's quarterly financial statements).

ITEM 7. FINANCIAL STATEMENTS

     The information required under Item 310(a) of Regulation S-B is included in
this report as set forth in the "Index to Consolidated Financial Statement".

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

          Auditors' Report dated January 31, 2002
          Consolidated Balance Sheets
          Consolidated Statements of Operations
          Consolidated Statement of Stockholders' Equity
          Consolidated Statements of Cash Flows
          Notes to Consolidated Financial Statements

                                       11

<PAGE>



                                TABLE OF CONTENTS
                                -----------------

                                                                          Page
                                                                          ----

Auditors' Report.......................................................    F-2

Consolidated Balance Sheet.............................................    F-3

Consolidated Statements of Operations..................................    F-4

Consolidated Statement of Stockholders' Equity (Deficit)...............    F-5

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

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

                                      F-1

<PAGE>




LABONTE & CO.                                     1205 - 1095 West Pender Street
----------------------------------------          Vancouver, BC  Canada
C H A R T E R E D  A C C O U N T A N T S          V6E 2M6
----------------------------------------          Telephone      (604) 682-2778
                                                  Facsimile      (604) 689-2778
                                                  Email    rjl@labonteco.com


                                AUDITORS' REPORT
--------------------------------------------------------------------------------


To the Stockholders and Board of Directors of eduverse.com

We have audited the consolidated balance sheets of eduverse.com as at December
31, 2001 and 2000 and the consolidated statements of operations, stockholders'
equity and cash flows for the years then ended. These consolidated financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audit.

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

In our opinion, these financial statements present fairly, in all material
respects, the financial position of the Company as at December 31, 2001 and 2000
and the results of its operations and its cash flows and the changes in
stockholders' equity for the years then ended in accordance with United States
generally accepted accounting principles.

                                            /s/  LaBonte & Co.
                                            ----------------------------------
                                                 LaBonte & Co.

                                            CHARTERED ACCOUNTANTS
Vancouver, B.C.
January 31 ,2002


COMMENTS BY AUDITORS FOR U.S. READERS ON CANADA-UNITED STATES REPORTING
-----------------------------------------------------------------------
DIFFERENCES
-----------

In the United States, reporting standards for auditors would require the
addition of an explanatory paragraph following the opinion paragraph when the
financial statements are affected by conditions and events that cast substantial
doubt on the Company's ability to continue as a going concern, such as those
described in Note 1. Our report to the stockholders and Board of Directors dated
January 31, 2002 is expressed in accordance with Canadian reporting standards
which do not permit a reference to such conditions and events in the auditors'
report when these are adequately disclosed in the financial statements.


                                            /s/  LaBonte & Co.
                                            ----------------------------------
                                                 LaBonte & Co.

                                            CHARTERED ACCOUNTANTS


Vancouver, B.C.
January 31, 2002

                                      F-2

<PAGE>
<TABLE>
<CAPTION>

                                          EDUVERSE.COM

                                   CONSOLIDATED BALANCE SHEET


                                                                    December 31,   December 31,
                                                                            2001           2000
                                                                     -----------    -----------

                                             ASSETS

CURRENT ASSETS
   <S>                                                               <C>            <C>
   Accounts receivable                                               $      --      $    17,004
   Taxes recoverable                                                        --           12,381
   Prepaid expenses and other                                               --           56,080
                                                                     -----------    -----------


                                                                            --           85,465

FIXED ASSETS, net of depreciation                                           --           35,321
                                                                     -----------    -----------


TOTAL ASSETS                                                         $      --          120,786
                                                                     ===========    ===========



                         LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

CURRENT LIABILITIES
   Bank overdraft                                                    $      --      $     1,011
   Accounts payable and accrued liabilities                              130,185        262,950
   Due to related party                                                   42,841        225,000
   Loans payable                                                            --          193,776
                                                                     -----------    -----------

                                                                         173,026        682,737
                                                                     -----------    -----------

CONTINGENCIES (Notes 1 and 6)

STOCKHOLDERS' EQUITY (DEFICIT)
   Capital Stock (Note 4)
   Common stock, $.001 par value, 50,000,000 shares authorized
      1,000,000 post-consolidation shares issued and outstanding          37,755         14,347
   Additional paid-in capital                                          2,994,633      2,201,675
   Common stock subscriptions                                             15,000         25,000
   Accumulated deficit                                                (3,220,414)    (2,835,874)
   Accumulated other comprehensive income                                   --           32,901
                                                                     -----------    -----------


                                                                        (173,026)      (561,951)
                                                                     -----------    -----------

TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT                          $      --      $   120,786
                                                                     ===========    ===========


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

                                              F-3
</TABLE>

<PAGE>


                                  EDUVERSE.COM

                      CONSOLIDATED STATEMENTS OF OPERATIONS


                                                      Year ended     Year ended
                                                    December 31,   December 31,
                                                            2001           2000
                                                     -----------    -----------
REVENUES
   Software sales                                    $      --      $    25,359
   Other income                                             --            6,452
                                                     -----------    -----------

                                                            --           31,811
   Cost of revenues                                         --           (2,470)
                                                     -----------    -----------

NET REVENUE                                                 --           29,341
                                                     -----------    -----------

EXPENSES
   Depreciation                                             --            3,307
   General and administrative                            379,863         65,374
   Selling and marketing                                    --          416,167
   Research and development                                 --            5,000
                                                     -----------    -----------

                                                         379,863        489,848
                                                     -----------    -----------

OPERATING LOSS FROM CONTINUING OPERATIONS               (379,863)      (460,507)

LOSS FROM DISCONTINUED OPERATIONS (Note 5)              (112,182)      (973,171)

GAIN ON DISPOSAL OF EDUVERSE DOT COM INC. (Note 5)       107,505           --

GAIN ON DISPOSAL OF ESL (Note 5)                            --          141,847
                                                     -----------    -----------

NET LOSS FOR THE PERIOD                              $  (384,540)   $(1,291,831)
                                                     ===========    ===========



BASIC NET LOSS PER SHARE                             $     (0.57)   $     (4.61)
                                                     ===========    ===========

WEIGHTED AVERAGE POST-CONSOLIDATION
   COMMON SHARES OUTSTANDING                             676,154        280,101
                                                     ===========    ===========


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

                                      F-4

<PAGE>
<TABLE>
<CAPTION>


                                                EDUVERSE.COM

                                       STATEMENT OF STOCKHOLDERS' EQUITY

                                FOR THE YEARS ENDED DECEMBER 31, 2001 AND 2000


                                                                                                   Additional
                                                       Number of                    Shares to      Paid - in
                                                         Shares         Amount      be Issued       Capital
                                                      -----------    -----------   -----------    -----------
<S>                                                   <C>           <C>           <C>            <C>
Balance, December 31, 1999                             13,187,434    $    13,185   $     3,078    $ 1,384,683

Issuance of common stock for cash                         856,666            857          --          607,143
Issuance of common stock for cash received in 1999           --                2        (3,078)         3,076
Issuance of common stock for services rendered            289,334            289          --          164,367
Common stock to be issued for services rendered              --             --          25,000           --
Issuance of common stock for interest expense              14,000             14          --            6,986
Stock-based compensation                                     --             --            --           35,420
Foreign currency translation loss                            --             --            --             --
Net loss, year ended December 31, 2000                       --             --            --             --
                                                      -----------    -----------   -----------    -----------

Balance, December 31, 2000                             14,347,434         14,347        25,000      2,201,675

Common stock issued for cash received in 2000             100,000            100       (10,000)         9,900
Issuance of common stock for services rendered          8,371,187          8,371          --          253,831
Issuance of common stock for debt                      14,686,813         14,687          --          491,996
Stock consolidation, 50:1                             (36,755,304)          --            --             --
Issuance of common stock for debt                         249,870            250          --           37,231
Foreign exchange realized on disposal of subsidiary          --             --            --             --
Net loss, year ended December 31, 2001                       --             --            --             --
                                                      -----------    -----------   -----------    -----------

Balance, December 31, 2001                              1,000,000    $    37,755   $    15,000    $ 2,994,633
                                                      ===========    ===========   ===========    ===========


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

                                                     F-5
</TABLE>

<PAGE>
<TABLE>
<CAPTION>


                                          EDUVERSE.COM

                                 STATEMENT OF STOCKHOLDERS' EQUITY

                         FOR THE YEARS ENDED DECEMBER 31, 2001 AND 2000

                                           (Continued}



                                                      Accumulated    Accumulated       Total
                                                         Other         Deficit
                                                     Comprehensive
                                                        Income
                                                      -----------    -----------    -----------
<S>                                                   <C>            <C>            <C>
Balance, December 31, 1999                            $     1,673    $(1,544,043)   $  (141,424)

Issuance of common stock for cash                            --             --          608,000
Issuance of common stock for cash received in 1999           --             --             --
Issuance of common stock for services rendered               --             --          164,656
Common stock to be issued for services rendered              --             --           25,000
Issuance of common stock for interest expense                --             --            7,000
Stock-based compensation                                     --             --           35,420
Foreign currency translation loss                          31,228           --           31,228
Net loss, year ended December 31, 2000                       --       (1,291,831)    (1,291,831)
                                                      -----------    -----------    -----------

Balance, December 31, 2000                                 32,901     (2,835,874)      (561,951)

Common stock issued for cash received in 2000                --             --             --
Issuance of common stock for services rendered               --             --          262,202
Issuance of common stock for debt                            --             --          506,683
Stock consolidation, 50:1                                    --             --             --
Issuance of common stock for debt                            --             --           37,481
Foreign exchange realized on disposal of subsidiary       (32,901)          --          (32,901)
Net loss, year ended December 31, 2001                       --         (384,540)      (384,540)
                                                      -----------    -----------    -----------

Balance, December 31, 2001                            $      --      $(3,220,414)   $  (173,026)
                                                      ===========    ===========    ===========


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

                                           F-5(Con't)
</TABLE>

<PAGE>
<TABLE>
<CAPTION>


                                              EDUVERSE.COM

                                  CONSOLIDATED STATEMENTS OF CASH FLOWS


                                                                            Year ended       Year ended
                                                                          December 31,     December 31,
                                                                                  2001             2000
                                                                             ---------        ---------
CASH FLOWS FROM OPERATING ACTIVITIES
  <S>                                                                        <C>              <C>
  Net operating loss from continuing operations                              $(379,863)       $(460,507)
  Adjustments to reconcile net loss to net cash from operating activities:
  - stock based compensation                                                      --             35,420
  - Common stock issued for services rendered                                  238,202          118,576
  - Common stock issued for interest expense                                      --              7,000
  - Depreciation                                                                  --              3,307
  - Net changes in working capital items                                       138,984          372,308
                                                                             ---------        ---------

Cash flows from continuing operations                                           (2,677)          76,104

Cash flows from discontinued operations                                          5,054         (955,842)
                                                                             ---------        ---------

CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES                                   2,377         (879,738)
                                                                             ---------        ---------


CASH FLOWS FROM FINANCING ACTIVITIES
  Sale of common stock                                                            --            608,000
  Cash received on common stock to be issued                                      --             15,000
  Bank overdraft (repayment)                                                    (1,011)           1,011
  Cash disposed of on sale of subsidiary                                        (1,366)            --
  Loans payable                                                                   --            183,776
                                                                             ---------        ---------

CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES                                  (2,377)         807,787
                                                                             ---------        ---------

CASH FLOWS FROM INVESTING ACTIVITIES
  Purchase of capital assets                                                      --             (2,861)
                                                                             ---------        ---------

CASH FLOWS USED IN INVESTING ACTIVITIES                                           --             (2,861)
                                                                             ---------        ---------

EFFECT OF FOREGIN EXCHANGE RATE CHANGES ON CASH                                   --             31,228
                                                                             ---------        ---------

INCREASE (DECREASE) IN CASH                                                       --            (43,584)

CASH, BEGINNING OF YEAR                                                           --             43,584
                                                                             ---------        ---------

CASH, END OF YEAR                                                            $    --          $    --
                                                                             =========        =========


OTHER SIGNIFICANT NON-CASH TRANSACTIONS
During the year ended December 31, 2001 the Company issued 14,686,813
pre-consolidation common shares in settlement of debt of $506,683 and 8,371,187
pre-consolidation common shares for payment of current services of $262,202 of
which $24,000 were incurred by eduverse dot com, inc. The Company also issued
249,870 post-consolidation common shares in settlement of debt of $37,481.


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

                                                  F-6
</TABLE>

<PAGE>


                                  EDUVERSE.COM

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2001
================================================================================

NOTE 1 - NATURE OF OPERATIONS AND BASIS OF PRESENTATION
--------------------------------------------------------------------------------

Organization

eduverse.com (the "Company") was incorporated on October 22, 1991, under the
laws of the State of Nevada, as Ward's Futura Automotive, Ltd. The Company's
name was subsequently changed to Perfect Future, Ltd. On June 11, 1998 its name
was changed to Eduverse Accelerated Learning Systems, Inc. and on May 19, 1999
to eduverse.com.

Description of business

The Company's financial statements have been prepared on a going concern basis,
which contemplates the realization of assets and the settlement of liabilities
and commitments in the normal course of business for the foreseeable future. The
Company incurred a loss of $379,863 from continuing operations for the year
ended December 31, 2001, and as of December 31, 2001 had a working capital
deficiency of $173,026. Management recognizes that the Company must obtain
additional financial resources by raising capital to enable it to continue
normal operations. However, no assurances can be given that the Company will be
successful in raising additional capital. Further, there can be no assurance,
assuming the Company successfully raises additional funds, that the Company will
achieve positive cash flow. Management has been unable to raise additional
equity capital to implement its marketing and development initiatives for its
current operations and is therefore looking at other business opportunities for
the Company. On March 2, 2001, the Company entered into an agreement and sold
its subsidiary eduverse dot com, inc. effective June 30, 2001. Refer to Note 5.
These factors raise substantial doubt regarding the Company's continuation as a
going concern.

These financial statements do not include any adjustments to the carrying values
and classification of assets and liabilities which may be necessary if the
Company is unable to continue as a going concern.


NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
--------------------------------------------------------------------------------

Principles of consolidation
The consolidated financial statements include the accounts of the Company and
its wholly-owned subsidiary: M&M Information and Marketing Services Inc.
(incorporated in Nevada, USA) and the results of operations for eduverse dot
com, inc. to June 30, 2001 (refer to Note 5). All significant intercompany
accounts and transactions have been eliminated.

Use of Estimates and Assumptions
Preparation of the Company's financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect certain reported amounts and disclosures. Accordingly,
actual results could differ from those estimates.

Cash and Cash Equivalents
The Company considers all liquid investments, with an original maturity of three
months or less when purchased, to be cash equivalents.

Financial instruments
At December 31, 2001, the Company has the following financial instruments:
accounts payable and accrued liabilities. The carrying value of these
instruments is considered to approximate fair value based on their short term
nature.

Net Loss per Common Share
Basic earnings (loss) per share includes no dilution and is computed by dividing
income (loss) available to common stockholders by the weighted average number of
common shares outstanding for the period. Dilutive earnings (loss) per share
reflects the potential dilution of securities that could share in the earnings
(loss) of the Company. Because the Company does not have any potentially
dilutive securities, the accompanying presentation is only of basic loss per
share.

                                      F-7

<PAGE>


EDUVERSE.COM
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2001 AND 2000
================================================================================

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (con't)
--------------------------------------------------------------------------------

Foreign Currency Translation
The financial statements are presented in United States dollars. In accordance
with Statement of Financial Accounting Standards No. 52, "Foreign Currency
Translation", foreign denominated monetary assets and liabilities are translated
to their United States dollar equivalents using foreign exchange rates which
prevailed at the balance sheet date. Revenue and expenses are translated at
average rates of exchange during the period. Related translation adjustments are
reported as a separate component of stockholders' equity, whereas gains or
losses resulting from foreign currency transactions are included in results of
operations.

Income Taxes
The Company follows the liability method of accounting for income taxes. Under
this method, deferred income tax assets and liabilities are recognized for the
estimated tax consequences attributable to differences between the financial
statement carrying values and their respective income tax basis (temporary
differences). The effect on deferred income tax assets and liabilities of a
change in tax rates is recognized in income in the period that includes the
enactment date. At December 31, 2001 a full deferred tax asset valuation
allowance has been provided and no deferred tax asset benefit has been recorded.

Comprehensive income
Comprehensive income is defined as the change in equity from transactions,
events and circumstances, other than those resulting from investments by owners
and distributions to owners. Comprehensive income to date consists only of the
net gain resulting from translation of the foreign currency financial statements
of the Company's former wholly-owned subsidiary, eduverse dot com inc.

Stock-Based Compensation
The Company accounts for stock-based compensation in respect to stock options
granted to employees and officers using the intrinsic value based method in
accordance with APB 25. Stock options granted to non-employees are accounted for
using the fair value method in accordance with SFAS No. 123. In addition, with
respect to stock options granted to employees, the Company provides pro-forma
information as required by SFAS No. 123 showing the results of applying the fair
value method using the Black-Scholes option pricing model.

The Company accounts for equity instruments issued in exchange for the receipt
of goods or services from other than employees in accordance with SFAS No. 123
and the conclusions reached by the Emerging Issues Task Force in Issue No.
96-18. Costs are measured at the estimated fair market value of the
consideration received or the estimated fair value of the equity instruments
issued, whichever is more reliably measurable. The value of equity instruments
issued for consideration other than employee services is determined on the
earliest of a performance commitment or completion of performance by the
provider of goods or services as defined by EITF 96-18.

Recent Accounting Pronouncements
On March 31, 2000, the Financial Accounting Standards Board ("FASB") issued FASB
Interpretation No.44, Accounting for Certain Transactions Involving Stock
Compensation - An Interpretation of APB Opinion No. 25 ("FIN 44"), which
provides guidance as to certain applications of APB 25. FIN 44 is generally
effective July 1, 2000 with the exception of certain events occurring after
December 15, 1998. The Company has determined that the implementation of this
standard does not have a material impact on its financial statements.


NOTE 3 - RELATED PARTY TRANSACTIONS
--------------------------------------------------------------------------------

On October 9, 2000 the Company entered into a management services agreement with
Investor Communications, Inc. ("ICI"), a significant shareholder, to provide
management and investor relations services for the Company. During the year
ended December 31, 2001, the Company incurred $225,000 to ICI which together
with other unpaid fees and advances of $231,896 resulted in total unpaid amounts
of $456,896 which were settled by the issuance of 15,230,000 pre-consolidation
common shares. An additional $65,700 in fees was accrued to ICI since the debt
settlement and on December 12, 2001 the Company issued 249,870 shares of common
stock to ICI in settlement of an additional $37,481 of debt. At December 31,
2001, $42,841 remains owing to ICI for fees, cash advances and amounts paid on
behalf of the Company.

                                      F-8

<PAGE>


EDUVERSE.COM
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2001 AND 2000
================================================================================

NOTE 3 - RELATED PARTY TRANSACTIONS (con't)
--------------------------------------------------------------------------------

General and administrative expenses including salaries of $12,000 and consulting
fees of $3,500 were paid to a significant shareholder who was also a former
director of eduverse dot com, inc. during the year ended December 31, 2001.

A director of the Company has been contracted by ICI and is part of the
management team provided to the Company. This director received $18,250 from
Investor Communications during the year relating to eduverse.com.


NOTE 4 - CAPITAL STOCK
--------------------------------------------------------------------------------

Authorized

The authorized capital of the Company consists of 50,000,000 voting common
shares with $0.001 par value and 5,000,000 non-voting preferred shares with
$.001 par value.

Issued

On March 14, 2001, the Company entered into settlement agreements with certain
creditors including stockholders, a former director and officers to settle debts
totalling $768,885 by the issuance of 23,058,000 pre-consolidation common shares
at prices ranging from $.03 to $.04271 per share.

The Company received shareholder approval for a reverse stock split of 50:1
which took place on June 8, 2001 which resulted in a reduction of the issued and
outstanding shares of common stock from 37,505,434 shares to 750,130 shares.

On December 12, 2001 the Company issued to ICI 249,870 shares of common stock at
$0.15 per share in settlement of $37,481 of debt owing by the Company to ICI.

Stock options

In 1998, the Board of Directors approved the creation of the "1998 Employee
Stock Purchase Plan" pursuant to which the Company has reserved 500,000
pre-consolidation shares of common stock; the "1998 Stock Option Plan" pursuant
to which the Company reserved 2,500,000 pre-consolidation shares of common
stock; and the "1998 Directors' Stock Option Plan" pursuant to which the Company
reserved 150,000 pre-consolidation shares of common stock. No options have been
granted under the 1998 Employee Stock Purchase Plan.

In 2000, the Company granted 225,000 stock options to consultants at the market
price of the underlying stock on the date of grant. Of these options granted,
75,000 were subject to vesting at 10% per month commencing June 1, 2000.
Compensation expense of $35,420, relating to the options vested in the year in
connection with these grants, was recorded in 2000.

Effective December 31, 2000 the Board of Directors cancelled the remaining
2,425,000 options previously granted in connection with the 1998 Stock Option
Plan and the 1998 Directors' Stock Option Plan and as a result, as at December
31, 2000 and 2001 the Company has no stock options outstanding under any of the
plans.

Pro forma information regarding net income and earnings per share is required by
SFAS No. 123, which also requires that the information be determined as if the
Company had accounted for its employee stock options under the fair value method
of that statement. The fair value of each option granted in 2000 was estimated
at the date of grant using the Black-Scholes option pricing model with the
following weighted average assumptions: risk free interest rates of 5%; dividend
yield of 0%; volatility factors of the expected market price of the Company's
common stock of 133% and a weighted average expected life of the option of 3.75
years.

                                      F-9

<PAGE>


EDUVERSE.COM
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2001 AND 2000
================================================================================

NOTE 7 - CAPITAL STOCK (cont')
--------------------------------------------------------------------------------

For purposes of pro-forma disclosures, the estimated fair value of the options
is amortized to expense over the vesting period. The Company's pro-forma
information relating to the granting and vesting of stock options is as follows:

                                                      2001              2000
                                                  -----------       -----------

Net loss                          As reported     $  (384,540)      $(1,291,831)
APB 25 compensation expense       As reported            --              35,420
SFAS 123 compensation expense     Pro-forma              --            (241,020)
                                                  -----------       -----------


                                  Pro-forma       $  (384,540)      $(1,497,431)
                                                  ===========       ===========


Pro-forma net loss per share
     Basis and fully diluted      Pro-forma       $     (0.57)      $     (0.11)
                                                  ===========       ===========


NOTE 5 - DISPOSAL OF SUBSIDIARIES
--------------------------------------------------------------------------------

On March 2, 2001, the Company entered into an agreement with Syncro-Data
Systems, Ltd. ("Syncro"), a private British Columbia company, to sell the
Company's subsidiary, eduverse dot com inc. ("eduverse") in consideration for
advances of $50,000 to eduverse for operating expenses and assumption of all
debts of eduverse. The agreement was subject to shareholder approval which was
received on June 1, 2001. The sale was effective June 30, 2001 and resulted in a
gain on disposal of $107,505. The results of operations of eduverse for the
period ended June 30, 2001 and the year ended December 31, 2000 have been
separately disclosed as loss from discontinued operations.

On August 15, 2000 the Company sold its entire interest of ESL Pro Systems Inc.
in consideration of $1 to Savoy Capital Limited. As a result of this transaction
the company realized a gain on disposal of $141,847. ESL had no operations for
the period January 1, 2000 to August 15, 2000.


NOTE 6 - LEGAL ACTIONS
--------------------------------------------------------------------------------

On September 5, 2001 Mark Edward Bruk, former Chairman, President and C.E.O. of
eduverse.com filed a Writ of Summons and Statement of Claim in the Supreme Court
of British Columbia. In the Writ the Plaintiff claims $85,305.97 in unpaid
salary, unreimbursed expenses, employee benefits, vacation pay and other sundry
payments. The Company applied to the Court in British Columbia, Canada to strike
the claim for lack of jurisdiction. On January 8, 2002 the Supreme Court of
British Columbia set aside the Writ of Summons and Statement of Claim and the
Company obtained an Order from the Court that it did not have jurisdiction to
hear the claim. Mr. Bruk has also been ordered to pay the costs of the
application.

On May 17, 2001 a complaint was filed with the SEC against the Company involving
a previous investor of the Company who had subscribed for shares in October 2000
pursuant to a subscription agreement and who subsequently attempted to rescind
the transactions. The Company has answered the complaint and the outcome is not
presently determinable.


NOTE 7 - INCOME TAXES
--------------------------------------------------------------------------------

The Company's net operating loss carryforwards for U.S. income tax purposes
amount to approximately $1,180,000 at December 31, 2001. These carryforwards
will expire, if not utilized, beginning in 2014. The potential tax benefit of
these losses has not been recorded as a full deferred tax asset valuation
allowance has been provided due to the uncertainty regarding the realization of
these losses.

                                      F-10

<PAGE>


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

     On November 9, 2000, Ernst & Young LLP, the principal independent
accountant of the Company resigned due to a mutual understanding between
management of the Company and Ernst & Young LLP. On November 9, 2000, the board
of directors of the Company approved and authorized the engagement of LaBonte &
Co., Chartered Accountants, #1205 - 1095 West Pender Street, Vancouver, British
Columbia V6E 2M6 as the principal independent accountant for the Company.

     During the Company's two most recent fiscal years and any subsequent
interim period preceding the resignation of Ernst & Young LLP, there were no
disagreements with Ernst & Young LLP nor LaBonte & Co. which were not resolved
on any matter concerning accounting principles or practices, financial statement
disclosure, or auditing scope or procedure, which disagreements, if not resolved
to the satisfaction of Ernst & Young LLP or LaBonte & Co., would have caused
either Ernst & Young LLP or Labonte & Co. to make reference to the subject
matter of the disagreements in connection with its respective reports. Neither
Ernst & Young LLP nor LaBonte & Co., as the Company's principal independent
accountant, provided an adverse opinion or disclaimer of opinion to the
Company's financial statements, nor modify its opinion as to uncertainty, audit
scope or accounting principles, except the respective reports for the year ended
December 31, 2000 and 2001 contained an explanatory paragraph describing
conditions that raise substantial doubt about the Company's ability to continue
as a going concern as described in note 1 to the consolidated financial
statements for the year ended December 31, 2001.

                                       12


                                    PART III

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

IDENTIFICATION OF DIRECTORS AND EXECUTIVE OFFICERS

         As of the date of this Annual Report, the directors and executive
officers of the Company are as follows:

Name                      Age                 Position with the Company
----                      ---                 -------------------------

Grant Atkins               41                 President, Secretary/
                                              Treasurer and Director

Herbert Ackerman           71                 Director

     GRANT ATKINS has been the President, Secretary and Treasurer and a Director
of the Company since March 1, 2001. For the past six years, Mr. Atkins has been
self-employed as a financial and project coordination consultant to clients in
government and private industry. He has extensive multi-industry experience in
the fields of finance, administration and business development. For the past
four years, Mr. Atkins has been a director and the secretary for Intergold
Corporation, an OTC Bulletin Board company, for which he has provided
organization and controller duties since its formation. Mr. Atkins is also the
director and president for Vega-Atlantic Corporation, an OTC Bulletin Board
public company engaged in the exploration and development of oil and gas, gold
and other minerals within the United States and internationally, and Hadro
Resources, Inc., an OTC Bulletin Board public company engaged in oil and natural
gas exploration and development within the United States and internationally.

     HERBERT ACKERMAN has been a self-employed businessman from April 1995 to
September 1997 who consulted with various enterprises primarily in the mineral
resources exploration fields on fundraising. From September 1997 to the present,
Mr. Ackerman acts as the President of Montoro Resources Inc. listed on the
Canadian Venture Exchange (CDNX), a company involved in exploration of gold,
zinc and copper. In his capacity as President of Montoro Resources Inc., Mr.
Ackerman administers the day-to-day operations, provides investor relations
duties, arranges various financings, and seeks and evaluates general business

                                       13

<PAGE>


prospects of interest. Mr. Ackerman has also been the secretary/treasurer of
Vega-Atlantic Corporation, an OTC Bulletin Board public company engaged in oil
and natural gas exploration and development within the United States and
internationally.

COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT

     Section 16(a) of the Exchange Act requires the Company's directors and
officers, and the persons who beneficially own more than ten percent of the
common stock of the Company, to file reports of ownership and changes in
ownership with the Securities and Exchange Commission. Copies of all filed
reports are required to be furnished to the Company pursuant to Rule 16a-3
promulgated under the Exchange Act. Based solely on the reports received by the
Company and on the representations of the reporting persons, the Company
believes that these persons have complied with all applicable filing
requirements during the fiscal year ended December 31, 2001.

ITEM 10. EXECUTIVE COMPENSATION

COMPENSATION OF OFFICERS AND DIRECTORS

     During fiscal year 1999, Mark Bruk entered into an employment agreement.
The employment agreement entered into with Mark Bruk provided for an annual
salary of $60,000. During fiscal year 2000, the Company accrued $54,400 in
salary and paid $54,400 to Mark Bruk as compensation pursuant to the employment
agreement. As of October 5, 2000, the employment agreement with Mark Bruk was
terminated in accordance with its provisions. See "Summary Compensation Table"
below.

     On April 3, 1999, Marc Crimeni, Robert Harris, Jeffrey Mah and Lorne
Reicher, respectively, entered into employment agreements. The respective
employment agreements entered into with Messrs. Crimeni, Harris, Mah and Reicher
provided for annual salaries of $60,000, $32,000, $72,000 and $60,000,
respectively, for each individual. During fiscal year 2000, the Company accrued
an aggregate of $224,000 in salaries and paid an aggregate of $152,000 to the
individuals named above as compensation pursuant to the respective employment
agreements. As of the date of this Annual Report, all of the employment
agreements with the respective individuals have been terminated in accordance
with their provisions due to the proposed sale of Eduverse. See "Summary
Compensation Table" below.

     On October 9, 2000, the Company entered into a management service agreement
with Investor Communications International, Inc. ("ICI"). The management service
agreement provides that the Company will make monthly payments to ICI in the
amount of $75,000 for services rendered. ICI provides a wide range of
management, financial and administrative services to the Company. Grant Atkins
may derive remuneration from the Company indirectly through ICI. As of fiscal
year ended December 31, 2001, the Company accrued approximately $290,700 and
paid approximately $-0- to ICI for services rendered. On March 14, 2001 and
December 12, 2001, the Company entered into settlement agreements with ICI
pursuant to which ICI agreed to settle the aggregate debt of $456,897 and
$37,480, respectively, due and owing ICI by the Company and accept the issuance
of 15,230,000 and 249,870, respectively, shares of restricted common stock.

     As of the date of this Annual Report, all executive officers and directors
of the Company are reimbursed for any out-of-pocket expenses incurred by them on
behalf of the Company. Any executive compensation is subject to change
concurrent with Company requirements.

                                       14

<PAGE>


         Summary Compensation Table
         --------------------------

                               Annual Compensation           Awards    Payouts
                              ---------------------        ----------  -------
                                 $      $       $         $      #         $
Name and Position             Salary  Bonus   Other      RSA  Options  TIP Other
-------------                 ------  -----   -----      ---  -------   ------
                                                 (1)
Mark E. Bruk            1999  $65,000   0       0         0      0        0
Pres./Treasurer         2000   54,000   0       0         0      0        0
and Director            2001     0      0       0         0      0        0

                                                 (1)
Marc Crimeni            1999  $60,000   0       0         0      0        0
President/Treasurer     2000   60,770   0       0         0      0        0
and Director            2001     0      0       0         0      0        0

                                                 (1)
Robert Harris           1999  $24,000   0       0         0      0        0
Secretary and Director  2000   28,000   0       0         0      0        0
                        2001     0      0       0         0      0        0

Peter O'Donnell         1999     0      0       0         0      0        0
Director                2000     0      0       0         0      0        0
                        2001     0      0       0         0      0        0

                                                 (1)
Jeffrey Mah             1999  $72,000   0       0         0      0        0
Chief Tech. Officer     2000   69,885   0       0         0      0        0
                        2001     0      0       0         0      0        0

                                                 (1)
Lorne Reicher           1999  $40,000   0       0         0      0        0
V.President Operations  2000   41,300   0       0         0      0        0
                        2001     0      0       0         0      0        0

Gary Powers             2000     0      0       0         0      0        0
Director                2001     0      0       0         0      0        0

                                                 (2)
Grant Atkins            2000     0      0       0         0      0        0
President, Secretary,   2001     0      0    $18,250      0      0        0
Treasurer and Director

Herbert Ackerman        2001     0      0       0         0      0        0
--------------------------------------
(1)
  Received pursuant to contractual provisions of respective employment
Agreements, which have been terminated.
(2)
  Grant Atkins may indirectly receive compensation from the Company through the
contractual relationship between the Company and ICI.

                                       15

<PAGE>


STOCK OPTIONS AND PURCHASE PLANS

     During fiscal years ended 1998, 1999 and 2000, the Board of Directors of
the Company authorized the grant of stock options to certain officers, directors
and significant consultants as reflected below in the "Aggregated Options/SAR
Exercises and Fiscal Year-End Options/SAR Value Table".

     1998 Stock Option Plans. During 1998, the Board of Directors and
shareholders of the Company adopted the 1998 Stock Option Plan (the "1998 Plan")
pursuant to which the Company reserved 2,500,000 shares of common stock and the
1998 Directors' Stock Option Plan (the "1998 Directors' Plan") pursuant to which
the Company reserved 150,000 shares of common stock.

     Effective December 31, 2000, the board of directors cancelled 2,425,000
options previously granted in connection with the 1998 Plan and the 1998
Directors' Plan and, as a result, the Company has no stock options outstanding
under any of the plans. As of the date of this Annual Report, the 1998 Plan has
been terminated in accordance with its provisions and the 1998 Directors Plan
has been terminated in accordance with its provisions.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     The following table sets forth the name and address, as of the date of this
Annual Report, and the approximate number of shares of common stock of the
Company owned of record or beneficially by each person who owned of record, or
was known by the Company to own beneficially, more than five percent (5%) of the
Company's common stock, and the name and shareholdings of each officer and
director, and all officers and directors as a group as of the date of this
Annual Report.

--------------------------------------------------------------------------------
Title of Class        Name and Address         Amount and Nature     Percent of
                    of Beneficial Owner       of Beneficial Owner       Class

--------------------------------------------------------------------------------
                                                          (1)
Common Stock      Investor Communications           554,470             55.45%
                  International, Inc.
                  435 Martin Street, Suite 2000
                  Blaine, Washington 98230

                                                           (1)
Common Stock      Marc Crimeni                       61,939              6.19%
                  1235 West Pender Street
                  Vancouver, British Columbia
                  Canada V6E 2V1

                                                           (1)
Common Stock      Syncro-Data Systems, Inc.          88,340              8.83%
                  1235 West Pender Street
                  Vancouver, British Columbia
                  Canada V6E 2V1

                                                           (1)
Common Stock      Mark E. Bruk                       67,266              6.72%
                  1235 West Pender Street
                  Vancouver, British Columbia
                  Canada V6E 2V1


Common Stock      All current officers and directors      0                 0%
                  as a group (2 persons)
--------------------------------------------------------------------------------
(1)
  These are restricted shares of Common Stock.

                                       16

<PAGE>


ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

     The officers/directors of the Company are engaged in other businesses,
either individually or through partnerships and corporations in which they may
have an interest, hold an office or serve on the boards of directors. Certain
conflicts of interest, therefore, may arise between the Company and the
respective officer/director. Such conflicts can be resolved through the exercise
by such officer/director of judgment consistent with his fiduciary duties to the
Company. The officers/directors of the Company intend to resolve such conflicts
in the best interests of the Company. Moreover, the officers/directors will
devote their time to the affairs of the Company as they deem necessary.

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

     (a)  The following exhibits are filed as part of this Annual Report:
          None.

     (b)  Reports on Form 8-K.

          (i)  Form 8-K filed on February 13, 2002.


SIGNATURES

     In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

                                          EDUVERSE.COM

Dated: March 21, 2002                     By:  /s/  GRANT ATKINS
                                              ----------------------------------
                                                    Grant Atkins, President

                                       17