<PAGE> 1
                    SECURITIES AND EXCHANGE COMMISSION
                           Washington D.C.  20549

                                 FORM 10-QSB


[X]     Quarterly Report Under Section 13 or 15(d) of the Securities Exchange
Act of 1934

     For the Quarter Ended:   March 31, 2002

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

        For the Transition Period from _____________ to ____________

                    Commission File Number   0-25873
                                             -------

                       POWERBALL INTERNATIONAL, INC.
               ----------------------------------------------
               (Name of Small Business Issuer in its charter)

          Utah                                             84-1431425
-------------------------------                    --------------------------
(State or other jurisdiction of                    (I.R.S. Employer I.D. No.)
 incorporation or organization)

                2095 West 2200 South, West Valley City, Utah 84119
              -----------------------------------------------------
              (Address of principal executive offices and Zip Code)

                                 (801) 974-9120
              ----------------------------------------------------
              (Registrant's telephone number, including area code)


     Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.

(1)  Yes X    No     (2)  Yes X     No
        ---     ---          ---      ---

     Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.

Common Stock, Par Value $0.001                          4,259,750
--------------------------------                ----------------------------
       Title of Class                           Number of Shares Outstanding
                                                as of March 31, 2002
<PAGE>
<PAGE> 2
                         PART I FINANCIAL INFORMATION

                        ITEM 1.  FINANCIAL STATEMENTS

                   POWERBALL INTERNATIONAL, INC. & SUBSIDIARY


                            FINANCIAL STATEMENTS
                                (UNAUDITED)


     The financial statements included herein have been prepared by the
Company, without audit, pursuant to the rules and regulations of the
Securities and Exchange Commission.  Certain information and footnote
disclosures normally included in financial statements prepared in accordance
with generally accepted accounting principles have been condensed or omitted.
However, in the opinion of management, all adjustments (which include only
normal recurring accruals) necessary to present fairly the financial position
and results of operations for the periods presented have been made.  These
financial statements should be read in conjunction with the accompanying
notes, and with the historical financial information of the Company.


<PAGE>
<PAGE> 3

POWERBALL INTERNATIONAL, INC. AND SUBSIDIARY
(Development Stage Companies)

CONSOLIDATED BALANCE SHEETS
ASSETS
                                                     March 31,   December 31,
                                                       2002          2001
                                                   -----------   -----------
CURRENT ASSETS
 Cash in bank                                     $    469,472 $     552,583
 Supplies                                                   76             -
                                                   -----------   -----------
   Total Current Assets                                469,548       552,583
                                                   -----------   -----------
PROPERTY AND EQUIPMENT
 Equipment                                               7,770         7,770
 Leasehold improvements                                 23,923        23,923
                                                   -----------   -----------
                                                        31,693        31,693
 Less accumulated depreciation                         (21,639)      (20,758)
                                                   -----------   -----------
                                                        10,054        10,935
                                                   -----------   -----------
OTHER ASSETS
 Assets held for resale - net of valuation
  allowance                                              4,000         4,000
 Patents and assigned technology, net of
  amortization of $7,010 and $6,337                     19,921        20,595
                                                   -----------   -----------
   Total Other Assets                                   23,921        24,595
                                                   -----------   -----------
TOTAL ASSETS                                      $    503,523  $    588,113
                                                   ===========   ===========

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
 Accounts payable                                 $     46,148  $     24,408
 Accrued and deferred liabilities                        6,912         2,395
                                                   -----------   -----------
   Total Current Liabilities                            53,060        26,803
                                                   -----------   -----------
STOCKHOLDERS' EQUITY
 Common stock; $.001 par value, 25,000,000 shares
  authorized, 4,259,750, and 4,127,250 shares
  issued and outstanding respectively                   4,260          4,127
 Capital in excess of par value                     2,700,522      2,568,155
 Subscription receivable                             (151,250)      (187,500)
 Earnings (deficit) accumulated during the
  development stage                                (2,103,069)    (1,823,472)
                                                   -----------   -----------
   Total Stockholders' Equity                          450,463       561,310
                                                   -----------   -----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY        $    503,523  $    588,113
                                                   ===========   ===========

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

<PAGE>
<PAGE> 4

POWERBALL INTERNATIONAL, INC. AND SUBSIDIARY
(Development Stage Companies)

CONSOLIDATED STATEMENTS OF OPERATIONS

                                           For the      For the    (Deficit)
                                          3 months     3 months   Accumulated
                                            Ended        Ended     During the
                                           March 31,    March 31, Development
                                             2002         2001       Stage
                                          -----------  ----------  ----------
REVENUE                                  $          - $         - $         -

EXPENSES
 Equity in loss from limited liability
  company                                           -           -     446,549
 General and administrative                     7,924      19,927     195,736
 Professional fees                            133,326      11,797     567,158
 Depreciation and amortization expense          1,554       1,204      23,868
 Research and development                     138,798     123,371     866,216
                                          -----------  ----------  ----------
                                              281,602     156,299   2,099,527
                                          -----------  ----------  ----------
OPERATING LOSS                               (281,602)   (156,299) (2,099,527)

OTHER INCOME AND EXPENSE
 Interest income                                2,005       2,181      14,578
 Asset writedown                                    -           -      (3,497)
 Limited sales of tanks, net of direct
  production costs of $1,046                        -           -      13,003
                                          -----------  ----------  ----------
INCOME (LOSS) BEFORE INCOME TAXES            (279,597)   (154,118) (2,075,443)
 Minimum State franchise tax                        -           -         400
                                          -----------  ----------  ----------
NET INCOME (LOSS) BEFORE CUMULATIVE
EFFECT OF ACCOUNTING CHANGE                  (279,597)   (154,118) (2,075,843)

Cumulative effect of accounting change
 for organization costs                             -           -     (27,226)
                                          -----------  ----------  ----------
NET INCOME (LOSS)                        $   (279,597)$  (154,118)$(2,103,069)
                                          ===========  ==========  ==========
EARNINGS (LOSS) PER SHARE BEFORE
ACCOUNTING CHANGE                        $      (0.07)$     (0.05)$     (1.14)
                                          ===========  ==========  ==========
CUMULATIVE EFFECT OF ACCOUNTING CHANGE   $      (0.00)$     (0.00)$     (0.01)
                                          ===========  ==========  ==========
EARNINGS (LOSS) PER SHARE                $      (0.07)$     (0.05)$     (1.16)
                                          ===========  ==========  ==========
WEIGHTED AVERAGE NUMBER OF COMMON SHARES    4,134,861   3,312,556   1,817,042
                                          ===========  ==========  ==========



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

<PAGE>
<PAGE> 5

POWERBALL INTERNATIONAL, INC. AND SUBSIDIARY
(Development Stage Companies)

 CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
                                                    For the       For the      Cumulative
                                                   3 months      3 months      During the
                                                   March 31,      March 31,    Development
                                                      2002          2001         Stage
                                                  -----------    ----------    ----------
<S>                                            <C>            <C>           <C>
CASH FLOWS FROM OPERATING ACTIVITIES
 Net (loss)                                      $   (279,597)  $  (154,118)  $(2,103,069)
 Adjustments to reconcile net (loss) to
  net cash provided by operating activities
  Cumulative change in accounting principle                 -             -        27,226
  Stock issued for services                           118,750             -       399,250
  Expense stockholder loan                                  -             -         6,294
  Decrease in investment in limited
   liability company                                        -             -       446,548
  Depreciation and amortization                         1,554         1,204        27,365
 Changes in assets and liabilities
  Increase in supplies                                    (76)            -           896
  Increase in organization costs                            -             -       (28,465)
  Increase in accounts payable                         21,741        (2,510)       24,231
  Increase in accrued expenses                          4,517       (10,257)        6,723
                                                  -----------    ----------    ----------
   Net cash (used) by operating activities           (133,111)     (165,681)   (1,193,001)
                                                  -----------    ----------    ----------
CASH FLOWS FROM INVESTING ACTIVITIES
 Acquisition of joint venture partner -
  net of cash                                               -             -        17,016
 Related party loans                                        -             -      (509,000)
 Investment in limited liability company                    -             -      (250,000)
 Purchase of equipment and leasehold
  improvements                                              -        (7,497)      (13,067)
 Additional patent costs                                    -             -        (7,416)
                                                  -----------    ----------    ----------
   Net cash provided (used) by
    investing activities                                    -        (7,497)     (762,467)
                                                  -----------    ----------    ----------
CASH FLOWS FROM FINANCING ACTIVITIES
 Sale of common stock                                  70,000        60,000     2,496,000
 Subscription receivable                              (20,000)            -       (20,000)
 Direct costs of stock sale                                 -             -       (51,060)
                                                  -----------    ----------    ----------
   Net Cash Provided By Financing Activities           50,000        60,000     2,424,940
                                                  -----------    ----------    ----------
NET INCREASE (DECREASE) IN CASH                       (83,111)     (113,178)      469,472

CASH - BEGINNING OF PERIOD                            552,583       298,069             -
                                                  -----------    ----------    ----------
CASH - END OF PERIOD                             $    469,472   $   184,891   $   469,472
                                                  ===========    ==========    ==========
SUPPLEMENTAL INFORMATION
 Interest paid during the period                 $          -   $         -   $         -
                                                  ===========    ==========    ==========
 Income taxes paid during the period             $          -   $         -   $         -
                                                  ===========    ==========    ==========
 Stock issued to pay royalties and expenses
  of related entity                              $          -   $         -   $    97,000
                                                  ===========    ==========    ==========
 Stock issued to pay finders fee                 $          -   $    60,000   $   251,794
                                                  ===========    ==========    ==========
 Stock issued to acquire Powerball
  Industries, Inc.                               $          -   $         -   $  (370,658)
                                                  ===========    ==========    ==========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.

<PAGE>
<PAGE> 6

POWERBALL INTERNATIONAL, INC. AND SUBSIDIARY
 (Development Stage Companies)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE   1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization  -  The Company was incorporated on July 9, 1997 under the laws
of the State of Utah. At the present time, the Company and its subsidiary are
in the development stage. The Company was formed for the purpose of raising
capital to invest in a joint venture which acquired a license to certain
technology relating to the production of hydrogen, to generate hydrogen for
sale, and to market hydrogen generating equipment and products. During the
beginning of the second quarter ended June 30, 2000, the Company acquired the
remaining 50% interest in Powerball Technologies, LLC, for 1,500,000 shares of
the Company's common which was issued to the other joint interest member. At
that time, Powerball Technologies, LLC became a wholly owned subsidiary of the
Company.  The Company, through its  wholly owned subsidiary and prior to the
year 2000 its joint venture, is involved in research and development efforts
of commercializing the technology.

Consolidation policy  -  Prior to the acquisition , the Company accounted for
its investment in the Limited Liability company using the equity method of
accounting. The acquisition has been accounted for using the purchase method
of accounting.   The consolidated balance sheet, statement of operation, and
statement of cash flows at March 31, 2002 and December 31, 2001, include the
accounts of Powerball International, Inc. (Company) and its wholly-owned
operating subsidiary, Powerball Technologies, Inc.  Intercompany transactions
and balances have been eliminated in consolidation.

Amortization of Organization Costs  -  The Company was amortizing its
organization costs over a  sixty (60) month period using the straight-line
method.  In 1998, the Accounting Standards Executive Committee (AcSEC) of the
American Institute of Certified Public Accountants issued Statement of
Position (SOP) 98-5. "Reporting on the Costs 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 $27,226.

Intangible Asset - At the time of the acquisition, the patent technology held
by the joint venture was assigned to the Company and was recorded at the
historical cost as recorded on the books of the Subsidiary. This cost plus
additional costs related to the technology obtained is being amortized over
ten years on a straight-line basis.

Income Taxes  -  The Company provides for income taxes based on the liability
method, which required recognition of deferred tax assets and liabilities
based on differences between financial reporting and tax bases of assets and
liabilities measured using enacted tax rates and laws that are expected to be
in effect when the differences are expected to reverse.

Use of Estimates - The preparation of financial statements in conformity with
the 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 revenue and expenses
during the reporting period. Actual results could differ from those estimates.

<PAGE>
<PAGE> 7

POWERBALL INTERNATIONAL, INC. 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 investment instruments purchased with a maturity of
three months or less to be cash equivalents.  The Company had no noncash
financing activities for the nine months ended March 31, 2002 and the year
ended December 31, 2001.

Net Income (Loss) Per Common Share - Basic earnings (loss) per common share
(EPS) is calculated by  dividing net income (loss) for the period by the
weighted average number of the Company's common shares outstanding and, if
applicable, EPS is computed by dividing net income by diluted common
equivalent shares from stock options and warrants, as calculated using the
treasury stock method.

Fully diluted earnings per common share reflect the calculation of the number
of common equivalent shares based on the stock price at the end of the period.
Fully diluted per common share amounts are not reported because the Company
has had losses for every period since inception and thus a diluted earnings
per share computation would be antidilutive for March 31, 2002 and December
31, 2001.  Per Financial Accounting Statement No. 128 if there is a loss from
continuing operations, diluted EPS is the same as basic EPS.

Issuance of Shares for Services and Other Expenses  -  Valuation of shares
issued for royalties, services and expenses of the Company and in behalf of
its joint venture partner, prior to its acquisition,  were based on the fair
market value of the above items at the time of issuance

Research and Development Costs  -  Research and Development costs to both
future and present products are charged to operations as incurred

NOTE   2  -  RECEIVABLE - RELATED PARTY

Prior to the business combination, the Company had a receivable from related a
party that was an unsecured non-interest bearing loan, which had no repayment
terms.   The Company now accounts for the related party loan as an
intercompany transfer and is eliminated in consolidation.  The receivable was
due from Powerball Technologies, LLC ( A Development Stage Company).
Powerball International, Inc. was a 50% owner of Powerball Technologies, LLC,
until the second quarter 2000 merger.

NOTE  3  -  BUSINESS COMBINATION

The Company in the second quarter ended June 30, 2000 completed its plan of
merger with Powerball Technologies, Inc. (PIC) in a business combination
accounted for as a purchase.  The Company acquired the net assets of PIC for
1,500,000 shares of the Company's common stock.  PIC's only business activity
was its joint interest investment in Powerball Technologies, LLC.   The merger
caused Powerball Technologies, LLC (Tech) to become a wholly-owned subsidiary
of the Company.  The results of operations of Tech is included in the
financial statements since the first day of the quarter ended June 30, 2000.
The merger was recorded at historical cost values and thus there is no
amortization of the cost of the merger over the fair value of the net assets
of PIC.

<PAGE>
<PAGE> 8

POWERBALL INTERNATIONAL, INC. AND SUBSIDIARY
 (Development Stage Companies)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE   4  -  INVESTMENT IN LIMITED LIABILITY COMPANY

The Company and Powerball Industries, Inc. formed a limited liability company
called Powerball Technologies, LLC (LLC) to license the Technology; to further
develop the Technology; to build a sodium hydride pellet recycling plant; to
manufacture tanks in which hydrogen is generated; to demonstrate the
commercial viability of the Technology; and to commercialize the Technology.
Powerball Industries, Inc. assigned the Technology License to the LLC for a
50% ownership interest in the LLC. The Company invested $250,000 in the LLC
for a 50% ownership interest.  The LLC is a development Stage Company.  For
the quarter ended March 31, 2000, equity in the loss of the LLC was recognized
in the Company's financial statements.

NOTE   5  -  STOCK OFFERINGS AND COMMON STOCK TRANSACTIONS

On January 22, 2001, the Company completed a subscription agreement for a
private placement of 150,000 units at $4.00 per unit, each unit consisting of
1 unit of common stock and 1 warrant to purchase 1 share of stock at an
exercise price of $6.00, exercisable for two years from the date of issuance.
The total subscription price was $600,000 and was paid by the issuance of a
promissory note for the same amount.  The note was to be paid in monthly
installments of $50,000, $50,000, $50,000, $100,000, $150,000 and $200,000 at
the end each month starting with February 2001.   The note was unsecured,
carried no interest and was subject to prepayment.  The shares under the
subscription would be held in escrow until the note was satisfied.   As of
March 31, 2001 the subscription receivable had a balance of $550,000.  In
connection with the private placement, the Company was to pay a finder's fee
to an individual consisting of 15,000 shares of restricted common stock and a
warrant to purchase up to 15,000 shares of common stock on the same terms as
the above private placement warrants.  This fee was treated as a direct cost
of the private placement.  In June 2001, the Company cancelled the
subscription agreement for nonpayment in the amount of $550,000.  A total of
13,750 shares were issued under agreement for payments prior to the
cancellation, 1,250 of the shares issued represented the finder's fee.  The
recipient of the finder's fee became an officer of the Company.  Direct costs
of this private placement were $5,000.

During October and November of 2001, the Company completed two separate
private placements of its common stock.  Under the October private placement,
it sold 356,000 shares of common stock at $1.00 per share for $356,000.  Under
the November private placement, it sold 161,000 shares of common stock at
$2.50 for $402,500.  Direct costs associated with these private placements was
$6,512.

During February, October and November of 2001, 110,000 warrants were exercised
at a $1,00 per share for a total amount of $110,000.  Of this amount, $10,000
was received in the year 2000 and was treated as a deferred liability for that
year.  Consideration for 20,000 of the above warrants exercised was provided
by services rendered to the Company by an officer and stockholder.

During October 2001, an officer and director of the Company was issued 100,000
shares of common stock valued at $150,000.  During December 2001, another
officer of the Company was issued 10,000 shares of common stock valued at
$33,000.  During October 2001, a vendor was issued 100,000 shares of common
stock for services to be rendered per an agreement between the vendor and the
Company.  The shares issued were valued at $190,000.

<PAGE>
<PAGE> 9

POWERBALL INTERNATIONAL, INC. AND SUBSIDIARY
 (Development Stage Companies)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE   5  -  STOCK OFFERINGS AND COMMON STOCK TRANSACTIONS (Continued)

From January to March 2002, warrants for 50,000 shares of common stock at
$1.00 per share were exercised for a total amount received of $50,000, and
warrants for 20,000 shares of common stock at $1.00 per share were exercised
and subscribed for $20,000.

On March 26, 2001, the Board of Directors credited Robert Ipson, CEO, for
services rendered to the Company, with $50,000 towards the exercise of his
outstanding $1.00 options for the purchase of the Company's common stock.  The
Board also credited Phillip McStotts, Board member and consultant to the
Company, with $12,500 toward the exercise of his outstanding $1.00 warrants
for purchase of the Company's common stock.  These shares were subsequently
issued on April 1, 2002.

NOTE   6 -  INCOME TAXES

Due to losses at December 31, 2001 and 2000, the Company had no income tax
liability and thus no provision for taxes was recorded.  The Company had a
deferred tax benefit of $4,330 derived from the amortizing of organization
costs for tax reporting and expensing of organization costs for financial
reporting purposes.  At December 31, 2001, the Company has a net operating
loss carryforward of approximately $1,910,736 which will expire between the
years 2012 and 2021.  A Valuation allowance of $649,650 has been established
for those tax credits which are not expected to be realized.  The change in
the valuation allowances for 2001 was $318,069.

The Subsidiary which is a Limited Liability Company is not a tax paying entity
for Federal or State income tax purposes and, thus, no income tax expense has
been recorded. Instead, its earnings and losses since the merger are included
in the Parent's income tax return.


<PAGE>
<PAGE> 10

          ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                     CONDITION AND RESULTS OF OPERATIONS

Cautionary Statement Regarding Forward-looking Statements
---------------------------------------------------------
This report may contain "forward-looking" statements.  Examples of forward-
looking statements include, but are not limited to: (a) projections of
revenues, capital expenditures, growth, prospects, dividends, capital
structure and other financial matters; (b) statements of plans and objectives
of our management or Board of Directors; (c) statements of our future economic
performance; (d) statements of assumptions underlying other statements and
statements about us and our business relating to the future; and (e) any
statements using the words "anticipate," "expect," "may," "project," "intend"
or similar expressions.

General
-------
We have completed the construction of our pilot sodium plant in Salt Lake
City, Utah.  The pilot plant has successfully produced small quantities of
elemental sodium.  Operational procedures have been developed that produce
consistent and repeatable sodium production yields.  We have retained the
services of a professional chemical and mechanical engineering firm to scale
up the methodologies in the pilot plant to achieve results that management
hopes will yield commercially useful hourly sodium production quantities.

We are currently in discussions and working out specifics for a number of
demonstration projects for our Hydrogen On Demand generators.  Powerball has
agreed to produce a version of its patented hydrogen generation system for use
as an emergency backup fuel supply for a hydrogen powered mining vehicle, code
named ZEUS. The zero emission utility solution (ZEUS) mining vehicle project
is under the direction of the Spokane Research Laboratory (SRL) of the
National Institute of Occupational Safety and Health (NIOSH). We are also
currently exploring the use of a Powerball hydrogen system to power fuel cells
on ocean oil platforms with an oil field services company.  We are also
engaged in discussions with a fuel cell manufacturer regarding a project aimed
at powering cellular telephone repeater tower electronics in Africa. We
anticipate being able to make an announcement of intent on some of these
projects before the end of the fiscal year.

Results of Operations
---------------------
Three Months Ended March 31, 2002 compared with March 31, 2001
--------------------------------------------------------------
Revenues.  We expect that our initial revenues will be generated primarily by
the production of sodium.  Additional revenues may be derived from the
licensing of the Technology and/or manufacturing and sale of hydrogen
generation systems. We had no revenues for the three months ended March 31,
2002 and 2001, respectively, and have had no revenues since July 9, 1997
("Inception").

Operating Expenses.  Our total operating expenses for the three months ended
March 31, 2002 were $281,602, compared to total operating expenses of $156,299
for the three months ended March 31, 2001.  The increase in operating expenses
is attributable primarily to an increase in professional fees of $121,529 and
an increase in research and development costs of $15,427.  The increase in
professional fees is due primarily to the compensation paid to two officers in
the form of credit towards the exercise of outstanding options and warrants,
plus the amortized payment of fees to a third party investor research firm.

<PAGE>
<PAGE> 11

In the period ended March 31, 2002, Robert Ipson, our C.E.O., received a
credit of $50,000 towards the exercise of his existing options to purchase our
common stock at $1.00 per share, and Phillip McStotts, our secretary and
treasurer, received a credit of $12,500 towards the exercise of his existing
warrants to purchase our common stock at $1.00 per share.  Total expense
recorded as professional fees for these two officers for the three months
ended March 31, 2002 was $62,500.  There was no comparable expense for the
prior year period.

In October 2001, we entered into an investor research contract with
TheInvestorOnline, a third party vendor, for services to be performed over a
one year period.  Upon signing the contract, we paid $35,000 cash and issued
100,000 shares of our restricted common stock valued at $1.90 per share for
total consideration of $225,000.  This expense is being amortized over the one
year period in which the services are to be performed.  Total expense recorded
as professional fees to this vendor for the three months ended March 31, 2002
was $56,250.  There was no comparable expense for the prior year period.

In the next twelve months, we expect that operating costs will increase mainly
due to additional fees for third party design and/or engineering consultants
involved scaling up the pilot plant sodium process.  We also anticipate
incurring additional fees for officers' services.

Other Income.  Other income for the three month period ended March 31, 2002
consisted of $2,005 of interest income, compared to $2,181 of interest income
for the three months ended March 31, 2001.

We experienced a net loss of $279,597 for the three months ended March 31,
2002 compared to a net loss of $154,118 for the three months ended March 31,
2001.  Our net loss since inception has been $2,103,069. The net loss per
share for the three months ended March 31, 2002 was $0.07, based on the
weighted average number of shares outstanding of 4,134,861 shares, compared to
$0.05 based on weighted average number of shares outstanding of 3,312,556 at
March 31, 2001.  The net loss per share since inception has been $1.16, based
on the weighted average number of shares outstanding of 1,817,042.

Liquidity and Capital Resources
-------------------------------
At March 31, 2002, we had current assets of $469,548 and current liabilities
of $53,060 for working capital of $416,488.  At March 31, 2002, we had
property and equipment of $10,054, net of depreciation, other assets held for
resale, net of valuation allowance, of $4,000, and patents and license
agreements, net of amortization, of $19,921.

Our cash used in operations for the three months ended March 31, 2002 was
$133,111, compared to $165,681 for the same period the prior year.  Since
inception, our operations have been funded primarily by cash received from
capital contributions and the issuance of common stock for cash.

We did not engage in investing activities for the three months ended March 31,
2002.  Investment activities used $7,497 for the purchase of equipment and
leasehold improvements during the prior year period.

Cash flows from financing activities during the three months ended March 31,
2002 totaled $50,000, all from the issuance of common stock through the
exercise of previously outstanding warrants.  An additional $20,000 for the
exercise of warrants for the purchase of 20,000 shares of common stock at an
exercise price of $1.00 has been recorded as a subscription receivable.

<PAGE>
<PAGE> 12

Our working capital has come mainly through the sale of our securities.
Proceeds generated from the sale of our securities have funded the our
operations, including continued research and development activities.  At March
31, 2002, we believe we have sufficient funds for operations through the
remainder of the fiscal year.

In August 2001, we initiated a private placement of our restricted common
stock to certain existing shareholders.  The original private placement was
intended to raise a maximum of $200,000 through the sale of 80,000 shares at a
price of $2.50 per share.  However, prior to the fulfillment of the private
placement, due to market conditions and the need for additional capital, in
October 2001, our Board of Directors amended the private placement, to permit
the sale of up to 400,000 shares at a price of $1.00 per share.  We sold a
total of 356,000 shares for aggregate proceeds of $356,000.

In November, we initiated a private placement of our restricted common stock
at a price of $2.50 per share.  We issued a total of 161,000 shares for
aggregate proceeds of $402,500.

As a potential source of additional funds, we also have certain outstanding
warrants due to expire prior to the end of the fiscal year which may be
exercised by the holders.  However, at this time the exercise price of some of
the warrants exceeds the market price of our common stock so we consider the
exercise of such warrants unlikely.

We have outstanding warrants for a total of 110,000 shares of our common stock
at an exercise price of $1.00 per share exercisable until June 6, 2002.  These
warrants were issued in connection with a private placement in March and April
1999.

We have outstanding warrants for a total of 167,500 shares of our common stock
at an exercise price of $5.00 per share exercisable until June 25, 2002.
These warrants were issued in June 2000 as an inducement to certain warrant
holders to exercise previously outstanding warrants.

Also outstanding are warrants for a total of 110,000 shares of our common
stock at an exercise price of $6.00 per share exercisable until July 11, 2002.
These warrants were issued in connection with a private placement in July
2000.

We anticipate that within the next year additional funds may be needed to
allow us to enter into other markets for hydrogen technology.  There can be no
assurance that any additional required funding will be available to us.

We expect that during the next year our primary expenditures will be for
further research and development aimed at commercialization of sodium and
powerball production, and expenses and professional and related fees
associated with our ongoing reporting obligations.  We believe we have
sufficient working capital to meet our ongoing operating expenses through the
end of the fiscal year.

                          PART II - OTHER INFORMATION

                          ITEM 1.  LEGAL PROCEEDINGS
     None.

                        ITEM 2.  CHANGES IN SECURITIES
     None.


<PAGE>
<PAGE> 13

                   ITEM 3.  DEFAULTS UPON SENIOR SECURITIES
     None.

           ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
     None.

                           ITEM 5.  OTHER INFORMATION

     None.

               ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

(a)     Exhibits.
        ---------
     None.


(b)     Reports on Form 8-K.
        --------------------
     None.



                                  SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the
Company has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.

                                     POWERBALL INTERNATIONAL, INC.


Dated: May 13, 2002                  By/S/Robert K. Ipson, Chairman and
                                     Chief Financial Officer