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                                  UNITED STATES
                       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 quarterly period ended  MARCH 31, 2001
                                               --------------

         [ ]   TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT

               For the transition period from ____________ to ____________

               Commission file number  033-23138-D
                                       -----------


                                 HEARTSOFT, INC.
--------------------------------------------------------------------------------
                 (Name of small business issuer in its charter)


        DELAWARE                                                 87-0456766
----------------------------                                 -------------------
(State or other jurisdiction                                  (I.R.S. Employer
    of organization)                                         Identification No.)


             3101 NORTH HEMLOCK CIRCLE, BROKEN ARROW, OKLAHOMA 74012
--------------------------------------------------------------------------------
                    (Address of principal executive offices)


                                 (918) 362-3600
--------------------------------------------------------------------------------
                           (Issuer's Telephone Number)


--------------------------------------------------------------------------------
              (Former name, former address and former fiscal year,
                          if changed since last report)

As of March 31, 2001, 14,703,652 shares of Heartsoft, Inc. Common Stock, $0.0005
par value, were outstanding.

Transitional Small Business Disclosure Format (Check one): Yes [ ]   No [X]

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<PAGE>

                                                                            PAGE
PART I.  FINANCIAL INFORMATION                                              ----

Item 1:  Balance Sheet as of March 31, 2001                                   3

         Statement of Operations For the Nine Month Periods
         Ended March 31, 2001 and March 31, 2000                              5

         Statement of Operations For the Three Month Periods
         Ended March 31, 2001 and March 31, 2000                              6

         Statement of Cash Flows For the Nine Month Periods
         Ended March 31, 2001 and March 31, 2000                              7

         Notes to Financial Statements                                        8

Item 2:  Management's Discussion and Analysis of Financial
         Condition, and Results of Operations                                13




PART II.  OTHER INFORMATION

Item 2:  Changes in Securities and Use of Proceeds                           20

Item 5:  Other Information                                                   21

Item 6:  Exhibits and Reports on Form 8-K                                    22


Signature Page                                                               29







INTRODUCTORY STATEMENT REGARDING ADOPTION OF FISCAL YEAR:

On August 4, 2000, the Board of Directors of Heartsoft, Inc. changed the
Company's fiscal year end from March 31 to June 30 effective for the fiscal year
beginning July 1, 2000. Therefore, "Fiscal Year 2001" will be for the period
July 1, 2000 to June 30, 2001 and the three months ended September 30, 2000,
December 31, 2000 and March 31, 2001 represents the first, second and third
quarters of Fiscal Year 2001, respectively.







                                        2
<PAGE>

PART I -- FINANCIAL INFORMATION

ITEM 1:  FINANCIAL STATEMENTS

                                  BALANCE SHEET
                              As of March 31, 2001
                                   (Unaudited)


ASSETS

Current assets:
   Cash                                                            $     13,135
   Accounts receivable, trade, net
      of allowance of $27,661                                            85,106
   Note receivable - officer                                            250,254
   Inventories, at cost                                                  61,660
   Other                                                                159,334
                                                                   ------------
Total current assets                                                    569,489

Property and equipment, at cost:
   Property and equipment                                               292,082
   Less accumulated depreciation                                       (140,577)
                                                                   ------------
Property and equipment, net                                             151,505

Other assets:
   Developed software, net                                              964,504
   Other                                                                  4,668
                                                                   ------------
Total other assets                                                      969,172
                                                                   ------------
Total assets                                                       $  1,690,166
                                                                   ============




















                                        3
<PAGE>
                                  BALANCE SHEET
                              As of March 31, 2001
                                   (Unaudited)







LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
   Accounts payable                                                $    452,667
   Notes payable                                                        965,059
   Accrued expenses                                                     237,108
                                                                   ------------
Total current liabilities                                             1,654,834

Long term liabilities:
   Notes payable                                                         25,245
                                                                   ------------
Total liabilities                                                     1,680,079

Commitments and contingencies                                              --

Stockholders' equity:
   Preferred stock, $0.01 par value, 5,000,000
       shares authorized, 817,000 shares issued                           8,170
   Common stock, $0.0005 par value, 30,000,000
       shares authorized, 14,703,652 shares issued                        7,352
   Additional paid-in capital                                         7,494,504
   Accumulated deficit                                               (7,499,939)
                                                                   ------------
Total stockholders' equity                                               10,087
                                                                   ------------
Total liabilities and stockholders' equity                         $  1,690,166
                                                                   ============



















                                        4
<PAGE>

                             STATEMENT OF OPERATIONS
                                   (Unaudited)


                                                    Nine Month Periods Ended
                                                           March 31,
                                                 ------------------------------
                                                     2001              2000
                                                 ------------      ------------
Net sales                                        $    366,774      $    177,273

Costs and expenses:
   Cost of production                                 253,183           140,058
   Sales and marketing                                667,783           385,899
   General and administrative                       1,224,416           875,154
   Depreciation and amortization                      125,685           119,551
                                                 ------------      ------------
Total operating expenses                            2,271,067         1,520,662
                                                 ------------      ------------

Operating loss                                     (1,904,293)       (1,343,389)

Other income and expense:
   Interest expense                                   210,381           130,971
   Other, net                                         (11,449)             (733)
                                                 ------------      ------------

                                                      198,932           130,238
                                                 ------------      ------------

Loss before income taxes                           (2,103,225)       (1,473,627)

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

Net income (loss)                                $ (2,103,225)     $ (1,473,627)
                                                 ------------      ------------

Earnings per share                               $      (0.18)     $      (0.14)
                                                 ------------      ------------















                                        5
<PAGE>

                             STATEMENT OF OPERATIONS
                                   (Unaudited)



                                                   Three Month Periods Ended
                                                            March 31,
                                                 ------------------------------
                                                     2001              2000
                                                 ------------      ------------

Net sales                                        $    158,441      $     24,576

Costs and expenses:
   Cost of production                                 151,338            82,781
   Sales and marketing                                232,384           174,499
   General and administrative                         350,274           413,263
   Depreciation and amortization                       52,033            60,979
                                                 ------------      ------------
Total operating expenses                              786,029           731,522
                                                 ------------      ------------

Operating loss                                       (627,588)         (706,946)

Other income and expense:
   Interest expense                                   125,851            93,843
   Other, net                                          (7,728)          (18,387)
                                                 ------------      ------------

                                                      118,123            75,456
                                                 ------------      ------------

Loss before income taxes                             (745,711)         (782,402)

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

Net income (loss)                                $   (745,711)     $   (782,402)
                                                 ------------      ------------

Earnings per share                               $      (0.06)     $      (0.07)
                                                 ------------      ------------












                                        6
<PAGE>
                             STATEMENT OF CASH FLOWS
                       Nine Month Periods Ended March 31,
                                   (Unaudited)


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

CASH FLOWS FROM OPERATING ACTIVITIES
Net loss                                          $ (2,103,225)    $ (1,473,627)
Adjustments to reconcile net loss to net cash
used in operating activities:
     Depreciation and amortization                     125,685          119,551
     Common stock issued for services                  781,090          148,221
     Changes in:
         Accounts receivable                           (20,694)          62,080
         Note receivable                                  --              3,101
         Other assets                                 (152,275)          (1,919)
         Inventories                                   (14,640)         (12,456)
         Accounts payable                              169,027           48,055
         Accrued expenses                              (10,657)          51,355
                                                  ------------     ------------
Net cash used in operating activities               (1,225,689)      (1,055,639)



CASH FLOWS FROM INVESTING ACTIVITIES
Capitalized software development costs                (325,849)        (166,907)
Advances on note receivable                           (276,254)            --
Collection of note receivable                           26,000             --
Payments for the purchase of property                  (64,338)         (70,530)
                                                  ------------     ------------
Net cash used in investing activities                 (640,441)        (237,437)



CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of debt                       1,089,008          299,543
Principal payments of debt                            (165,254)        (704,588)
Proceeds from issuance of common stock                 861,691        2,025,566
                                                  ------------     ------------
Net cash provided by financing activities            1,785,445        1,620,521
                                                  ------------     ------------
Net increase (decrease) in cash                        (80,685)         327,445
Cash at beginning of period                             93,820            4,177
                                                  ------------     ------------
Cash at end of period                             $     13,135     $    331,622
                                                  ============     ============









                                        7
<PAGE>
                                 HEARTSOFT, INC.
                      NOTES TO INTERIM FINANCIAL STATEMENTS
                                   (Unaudited)


         The accompanying unaudited financial statements have been prepared in
accordance with instructions to Form 10-QSB as prescribed by the Securities and
Exchange Commission. In the opinion of management, all adjustments required to
make a fair presentation of the results of operations of Heartsoft, Inc., a
Delaware corporation ("Heartsoft," or the "Company," including its subsidiary),
for the nine and three month periods ended March 31, 2001 have been included.
The results of operations for the nine month periods ended March 31, 2001 are
not necessarily indicative of the results of operations that may be achieved for
the remainder of the fiscal year.


NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

CHANGE IN YEAR END

         On August 4, 2000, the Board of Directors of the Company changed the
Company's fiscal year end from March 31 to June 30 effective for the fiscal year
beginning July 1, 2000. Therefore, "Fiscal Year 2001" will be for the period
July 1, 2000 to June 30, 2001 and the three months ended September 30, 2000,
December 31, 2000 and March 31, 2001 represents the first, second and third
quarters of Fiscal Year 2001, respectively.


NOTE 2 - RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS

         On September 20, 1998, Heartsoft and Intercap Funding LTD ("Intercap")
entered into an agreement whereby Intercap agreed to provide consulting advisory
services over a three year period, primarily related to capital formation, in
exchange for 1.2 million shares of Heartsoft's Convertible Preferred Stock. On
March 16, 2001, Heartsoft issued 1.2 million shares of its common stock to
satisfy the Company's obligation under the agreement.

         Upon issuance of the common stock, it was determined that the Company
had not previously given accounting recognition to the agreement. The Company's
financial statements as of March 31, 1999 and 2000, and June 30, 2000, as well
as each of the interim financial statements issued, will be restated to report
the accounting recognition for the agreement.

         The value of the agreement, based on the September 20, 1998, trading
price of the common stock into which the preferred stock was to have been
convertible, was $240,000. This value should have been allocated to general and
administrative expenses over the term of the agreement. The Company's legal
counsel has advised that the preferred stock called for in the agreement could
not have been validly issued prior to the time the services were rendered. As a
result, the obligation will be reported as an accrued liability as it is accrued
over the period October 1998 through March 2001. The Company's previously issued
financial statements will be amended to retroactively report the accrual. The
accumulated deficit reported in the accompanying balance sheet has been adjusted
to reflect the retroactive accrual of this obligation.



                                        8
<PAGE>

         On February 1, 1999 the Company also entered into a Non Circumvention
and Consulting Agreement with Intercap Funding LTD. Under the agreement,
Intercap was to provide Heartsoft with various services for a period of 180 days
and the agreement automatically renewed on the first day of each month
thereafter for nine months. Intercap was to receive a finder's fee in cash equal
to a certain percentage of all amounts invested in the Company. In addition, the
Company was to issue warrants equal to a specified percentage of the number of
shares purchased by any introduced parties. In connection with this agreement
the Company must issue 178,763 warrants to Intercap. The warrants are
exercisable over five years at values ranging from $1.3437 to $3.4375 per
warrant. The warrants are a cost of the capital that was raised and their
issuance will not affect the Company's financial statements.


NOTE 3 - NOTE RECEIVABLE

         On November 13, 2000, an officer of the Company borrowed $276,254 from
the organization. Per the unsecured promissory note the officer will repay the
principal amount together with interest at a per annum rate of 6.15% upon
maturity. The principal sum of the promissory note plus interest is due on
November 13, 2001. The officer may elect to pay all accrued interest on November
13, 2001 and extend the promissory note until November 13, 2002. As of March 31,
2001 the outstanding balance due the Company was $250,254 plus interest of
$6,470.


NOTE 4 - NOTES PAYABLE

Notes payable consist of the following at March 31, 2001:

         Note payable to a finance company, $4,575 monthly,
            due June 2001, bearing interest at 14.82%,
            secured by property and equipment                         $  28,322

         Note payable to a finance company, $738 monthly,
            due July 2003, bearing interest at 14.82%,
            secured by property and equipment                            15,713

         Note payable to an investment group, balloon payment
            due December 31, 2000, bearing interest at 8%.
            Investment group has elected to convert to common
            stock. As of March 31, 2001 conversion has not
            taken place                                                  60,000

         Note payable to a finance company, $1,490 monthly,
            due October 2003, bearing interest at 14.82%,
            secured by property and equipment                            36,269

         Note payable to a trust, balloon payment due May 9,
            2001, bearing interest at 6.15%                             250,000






                                        9
<PAGE>

         Note payable to a limited partnership, balloon payment
            due May 9, 2001, bearing interest at 6.15%                  250,000

         Note payable to investor, balloon payment due
            June 20, 2001, bearing interest at 8%                        10,000

         Note payable to a trust, balloon payment due August
            5, 2001, bearing interest at 6.15%                          250,000

         Note payable to an investment group, balloon payment
            due February 28, 2002, bearing interest at 8%.               40,000

         Note payable to investor, balloon payment due
            September 17, 2001, bearing interest at 8%                   50,000
                                                                     ----------
         Total                                                          990,304

         Current portion                                                965,059
                                                                     ----------
         Non-current portion                                         $   25,245
                                                                     ==========


         On November 9, 2000, the Company borrowed a total of $500,000 under two
separate promissory notes, each for the principal sum of $250,000. The principal
sum of both promissory notes plus interest at a per annum rate equal to 6.15%
are due on the earlier of May 9, 2001 or five business days after the Company
shall have received equity investments or debt financing in excess of $750,000.
In order to induce the parties to enter into the promissory notes, the Company
also issued the holders of each of the promissory notes 125,000 shares of common
stock of the Company. The discounted value of the 250,000 shares totaled
$150,000 and will be recorded as interest expense and amortized over the term of
the notes. For the nine months ended March 31, 2001 the Company recorded
$129,379 in interest expense associated with this financing arrangement. The
notes may be pre-paid in whole or in part at any time without penalty, but with
interest to the date of payment on the amount prepaid. If the Company defaults
on the promissory notes, the entire unpaid balance of principal and accrued
interest, from the date of default, bears interest at 15% per annum. On May 9,
2001 the Company and promissory note holders reached an Agreement to extend the
promissory notes for 60 days. In order to induce the parties to extend the
promissory notes, the Company agreed to: accrue interest at 15% per annum from
and after May 9, 2001, pay each note holder an additional fee of $10,000 which
will be added to the principal amount of each promissory note, issue an
additional 150,000 shares of common stock to each promissory note holder, and
further secure the two promissory notes by giving both holders a subordinate
claim against the intangible assets of the Company.

         The Company borrowed $75,000 on January 24, 2001 and $175,000 on
February 5, 2001 under a convertible promissory note for the principal sum of
$250,000. The principal sum of the convertible promissory note plus interest at
a per annum rate equal to 6.15% are due on the





                                       10
<PAGE>

earlier of August 5, 2001 or five business days after the Company shall have
received equity investments or debt financing in excess of $1,500,000. In order
to induce the party to enter into the convertible promissory note, the Company
issued the holder 125,000 shares of common stock of the Company and agreed to
pledge as collateral all intangible property. The holder of the convertible
promissory note may at his option convert the unpaid principal amount into
shares of common stock. The basic conversion rate shall be one share of common
stock for each $.666666 in principal amount of the note surrendered for
conversion. For the three months ended March 31, 2001 the Company recorded
$39,758 in interest expense associated with this financing arrangement. The note
may be pre-paid in whole or in part at any time without penalty, but with
interest to the date of payment on the amount prepaid.


NOTE 5 - ACCRUED EXPENSES

         On September 27, 2000, the Company and the holder of the Series A
preferred stock entered into an amendment to the Stock Purchase Agreement (the
"Amendment"). Under the terms of the original Stock Purchase Agreement, the
Company agreed to cause a registration statement relating to the common shares
into which the Series A preferred stock are convertible, and the common shares
issuable upon exercise of certain warrants to become effective by August 1,
2000. Also under the terms of the original Stock Purchase Agreement , the
Company would become liable under a penalty provision in the Stock Purchase
Agreement if the Company were unable to cause such registration statement to
become effective by August 1, 2000. Under the Amendment to the Stock Purchase
Agreement, the Company agreed to cause a registration statement relating to the
common shares into which the Series A preferred stock are convertible, and the
common shares issuable upon exercise of certain warrants to become effective
within a reasonable time after October 1, 2000. In addition, the Company agreed
to issue 300,000 shares of common stock to the Series A preferred stockholder in
exchange for the stockholder's agreement to release the Company from any and all
current and future liability that the Company might have under the penalty
provision. A liability totaling $227,810 associated with the 300,000 shares was
recorded. The stock was issued on January 3, 2001.

         In the quarter ended June 30, 2000, the Company sold 325,000 shares of
restricted common stock. In connection with the sale of the 325,000 shares,
Heartsoft agreed to file a registration statement. As of May 15, 2001 a
registration has not been filed. Starting October 1, 2000, a penalty of 10,000
shares per month was awarded until the 325,000 shares become free-trading. For
the nine months ending March 31, 2001 the Company recorded a liability of
$61,202 in penalties. As of May 15, 2001, these shares have not been issued.












                                       11
<PAGE>

NOTE 6  - EARNINGS PER SHARE

Basic and diluted EPS are computed as follows:


                                    Nine month periods ended
                                            March 31,
                                    2001                 2000
                                ---------------------------------
Basic EPS computation:

     Net loss                   $ (2,103,225)        $ (1,473,627)

     Weighted average
        Shares outstanding        11,964,180           10,667,555
                                ---------------------------------
     Basic and diluted
        Net loss per share      $      (0.18)        $      (0.14)
                                =================================


NOTE 7  - STOCKHOLDERS' EQUITY

STOCK OPTIONS

         The Heartsoft, Inc. Employee Benefit and Stock Option Plan ("Plan") was
effective June 15, 1997, and terminates June 30, 2005. Awards under the Plan may
be granted by the Heartsoft Board of Directors in the form of stock issuance,
incentive stock options, or nonqualified stock options. The total number of
shares of common stock as to which stock issuances or options may be granted
under the Plan is 2,000,000. The option price of incentive stock options shall
not be less than 100% of the fair market value of the stock on the date of
grant. The option price of nonqualified stock options shall not be less than 25%
of the fair market value of the stock on the date of grant. The duration of each
option granted shall not exceed 10 years.

         During the previous quarter, various officer's Employment Agreements
were amended resulting in the officers being granted Non-Qualified Stock Option
Agreements. The Company granted the officers a total of 1,200,000 options to
purchase shares of Common Stock at a price of $.5312 per share. The options
become vested and exercisable at different periods that range from December 31,
2000 through September 30, 2003. As of March 31, 2001 none of the options had
been exercised.


NOTE 8  - UNCERTAINTIES

         The Company has experienced recurring operating losses and negative
cash flows from operating activities, which increased to $2,103,225 and
$1,225,689, respectively, for the nine months ended March 31, 2001.





                                       12
<PAGE>

         In order to finance these negative cash flows, the Company secured
approximately $1,891,691 in funding during the nine months ended March 31, 2001
through placement of debt and common stock.

         Management released INTERNET SAFARI(TM) on February 7, 2001 and
anticipates introducing new products during fiscal year 2002. With new products
and a strengthened sales staff, management believes revenues from product sales
will increase. In order to finance the continuing costs of product development
and operating losses, management intends to raise additional capital through
equity offerings. However, the Company has no formal commitments for equity
placements. The ability of the Company to implement its operating plan and to
continue as a going concern depends on its ability to raise equity capital and,
ultimately, to achieve profitable operations.


NOTE 9  - SUBSEQUENT EVENTS

         To support the Company's policy of growth and to meet working capital
needs, the Company borrowed $100,000 on April 17, 2001, $50,000 on May 1, 2001
and $50,000 on May 11, 2001 under three separate promissory notes. The April 17,
2001 promissory note bears interest at 15% for 90 days, the May 1, 2001
promissory note bears interest at 15% for 30 days, and the May 11, 2001
promissory note bears interest at 8% for 30 days. Additionally, the Company sold
$30,000 of common stock on April 6, 2001.


ITEM 2:  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION
----------------------------------------------------------

         This Form 10-QSB contains "forward-looking" statements regarding
potential future events and developments affecting the business of Heartsoft,
Inc., a Delaware corporation ("Heartsoft" or the "Company," including its
subsidiary). Forward-looking statements may be indicated by the words "expects,"
"estimates," "anticipates," "intends," "predicts," "believes" or other similar
expressions. Forward-looking statements appear in a number of places in this
Form 10-QSB and may address the intent, belief or current expectations of
Heartsoft and its Board of Directors and Management with respect to Heartsoft
and its business. Heartsoft's ability to predict results or the effect of any
future events on Heartsoft's operating results is subject to various risks and
uncertainties.

GENERAL INFORMATION
-------------------

         Heartsoft is a publicly held Delaware Corporation, incorporated on
January 15, 1988, and traded in the Over the Counter Bulletin Board (OTCBB)
market under the symbol "HTSF." The Company is a provider of proprietary
internet and educational computer software products distributed to the education
and consumer markets. Its products are sold through an internal sales
organization, national and international resellers, United States based
catalogers with an annual aggregate circulation in excess of 5,000,000 catalogs
and online through four corporate


                                       13
<PAGE>

websites, www.heartsoft.com, www.internet-safari.com, www.thinkology.com, and
www.isafari.com.

         Through the nine month period ended March 31, 2001, the Company's
product line was comprised of approximately 50 educational software programs
that assist young children in pre-kindergarten through the 6th grade to practice
and learn basic curriculum subjects. On February 7, 2001, the Company released
its new secure Internet browser for children, INTERNET SAFARI(TM) Version 1.0.
The release of INTERNET SAFARI(TM) has broaden the Company's product line to
include an Internet-based software solution.

         Since its release, INTERNET SAFARI(TM) has been well received.
Beginning in January, 2001, the Company's education group has distributed
thousands of copies of a demo version of INTERNET SAFARI(TM) at major education
conferences in Florida and Texas, and the feedback from the many educators who
have seen or used the product is highly encouraging. Currently, nearly 50 school
districts have expressed interest in or requested proposals for purchasing
INTERNET SAFARI(TM) on a district-wide basis, and several thousand additional
leads are in the sales pipeline to be worked by Heartsoft's in-house sales team.

         The Company is currently exploring retail distribution opportunities
for INTERNET SAFARI(TM) through two software retailers and expects to make an
announcement regarding specific plans once details have been finalized. The
Company is also in preliminary discussions with several original equipment
manufacturers (OEMs) that could eventually lead to INTERNET SAFARI(TM) being
shipped with certain hardware configurations directory from the factory.
Additionally, the Company has had initial discussions with several Internet
Service Providers (ISPs) and hopes to develop an ISP distribution model in the
Fall 2001.

         To date, the Company has received several inquiries from international
distributors regarding the conversion, or localization, of INTERNET SAFARI(TM)
into four foreign languages. These opportunities will be explored in the future.

         The Company believes that its investment in the development of INTERNET
SAFARI(TM) represents a key element of its future and that the Company can
become a leading player in the children's Internet market.

         To accelerate the development of the potential of INTERNET SAFARI(TM)
and the many related opportunities, the Company began pursuing the private
placement of $5 million in additional capital. The capital will be raised
through a long-term convertible preferred stock in order to minimize short-term
dilution to common shareholders while simultaneously providing essential growth
capital. The Company has finalized an agreement with Santa Fe Capital to pursue
the placement of the first $1 million. Additionally, the Company finalized an
Investor and Public Relations Agreement with Strategic Initiatives to consult
officers of the Company on strategic investor and public relations matters.

         The additional capital will allow the Company to strengthen its brand
name awareness and position and utilize its technological infrastructure and
software development capabilities to continue refining and upgrading its current
and future products. Accordingly, the Company




                                       14
<PAGE>

intends to use the capital to invest heavily in marketing and advertising, new
partnerships and strategic alliances, and its technology infrastructure. The
Company believes that this program of expansion is necessary to continue
building its brand recognition and ability to generate revenues.

         Further, if the investments mentioned above are successful, the Company
anticipates that it will see an increase in revenues and a narrowing of losses
as percentage of revenues. The Company expects that the combination of increased
revenues and decreased expenses as percentage of revenues will lead to
profitability.

         For the nine-month period ended March 31, 2001, the Company experienced
a loss of $2,103,225 and accumulated a total deficit of $7,499,939. This loss
has been primarily caused by the Company's efforts in positioning itself for the
release of INTERNET SAFARI(TM) and is related, for the most part, to
development, marketing, and general and administrative expenses.

RESULTS OF OPERATIONS
---------------------

NINE MONTH PERIOD ENDED MARCH 31, 2001 VS. NINE MONTH PERIOD ENDED
MARCH 31, 2000

NET REVENUE

         Revenue for the nine months ended March 31, 2001 increased to $366,774
from $177,273 for the nine months ended March 31, 2000, an increase of $189,501
or 107%. The increase resulted from continuation of the Company's marketing
strategy to direct sales personnel efforts on promoting educational programs to
schools while maintaining existing reseller business. The strategy included
higher attendance at trade shows and increased marketing efforts that included
direct mail, email and fax campaigns that contributed to the increase in
revenues. Additionally, in March 31, 2000 a full year's adjustment, reducing
sales by $39,202, was made to sales for product that had been shipped for
review, pending final purchase approval by customers.

COST OF PRODUCTION

         Cost of production includes all costs associated with the acquisition
of raw materials, assembly of finished products, warehousing, shipping, and
payroll associated with production and shipping of finished products. This
expense category also includes labor costs associated with maintaining and
implementing enhancements to existing educational programs (software maintenance
costs) as well as miscellaneous costs related to the needs of the Production
Department. Cost of production for the nine months ended March 31, 2001 was
$253,183 compared to $140,058 for the nine months ended March 31, 2000, an
increase of $113,125 or 81%. Software maintenance costs associated with
maintaining and enhancing existing educational programs increased approximately
$53,772, primarily as a result of expensing Internet Safari labor costs
subsequent to its release. Payroll and benefit costs increased $30,470 primarily
from the addition of a technical support employee for part of the year, coupled
with annual increases for existing employees as well as an increase in benefits.
Expenses for office rent increased $14,092 as a result of leasing additional
office space.


                                       15
<PAGE>

SALES AND MARKETING

         Sales and marketing expenses for the nine months ended March 31, 2001
were $667,783 versus $385,899 for the nine months ended March 31, 2000, an
increase of $281,884 or 73%. Since the hiring of a Vice President of Sales and
Marketing in late 1999, the education sales division has been reorganized and
expanded. During fiscal year 2001, the Sales Department increased attendance at
industry trade shows that lead to increased expenses. Additionally, the Sales
Department utilized temporary personnel to fill selected positions, then upon
satisfactory completion of work assignments hired these individuals as full-time
employees that lead to an increase in contract labor. An approximate breakdown
by component of the major increases in sales and marketing expense follows:
payroll and benefits $176,926; travel and conferences $68,676; commissions
$31,365 from increased sales: and contract labor $18,185. The above increases
were partially offset by a $52,948 decrease in advertising expenses. Overall,
advertising expenses for the nine month period ended March 31, 2001 were lower
due to a stabilization in marketing material costs. Historically, it had been
necessary to ramp-up marketing materials which included purchasing, creating and
printing new sales materials and promotional items to meet the increased sales
presence.

GENERAL AND ADMINISTRATIVE

         Total general and administrative (G&A) expense for the nine months
ended March 31, 2001 was $1,224,416 compared to $875,154 for the same period in
2000, an increase of $349,262. The primary reason for this increase relates to
accruing penalties totaling $227,810 and $61,202, respectively. The first amount
in connection with amending a Stock Purchase Agreement whereby the Company
agreed to issue 300,000 shares of common stock in order to eliminate any
liability the Company might have under a penalty provision in that Stock
Purchase Agreement and the second amount for recording a penalty provision for
another Agreement (see Financial Statement Note 5 - Accrued Expenses).

         Additional factors causing the increase in G&A expense can be
attributed to taking the necessary steps to build the Company's infrastructure.
These factors include the addition of a Chief Financial Officer, addressing
regulatory reporting issues, and strengthening strategic customer and investor
relationships, all of which are critical to minimizing risks to the Company and
execution of its business plan. An approximate breakdown by component (excluding
the late registration filing penalty expense noted above) of other major
increases in G&A expense follows: payroll and benefits $92,226; professional
costs related to legal fees, and investment service fees $110,458 (see Financial
Statement Note 2 - Restatement of Previously Issued Financial Statements); and
amortization of debt issuance costs of $35,593. The above G&A expense increases
were partially offset with decreases resulting from a March 31, 2000 bonus
expense accrual for awards relating to the issuance of stock to employees for
$88,154, lower accounting and consulting fees totaling $47,427, and lower costs
for seminars and travel totaling $39,268.









                                       16
<PAGE>

INTEREST EXPENSE

         Interest expense for the nine months ended March 31, 2001 was $210,381
compared to $130,971 for the same period in 2000, an increase of $79,410. The
primary reason for this increase relates to recording interest for financing
agreements made on November 9, 2000 and February 2, 2001, respectively. The
Company borrowed a total of $500,000 under two separate promissory notes and
issued 250,000 shares of common stock to induce the parties to enter into the
promissory notes. Additionally, the Company borrowed $250,000 under a
convertible promissory note and issued another 125,000 to induce the party to
enter into the convertible promissory note (see Financial Statement Note 4 -
Notes Payable).

THREE MONTH PERIOD ENDED MARCH 31, 2001 VS. THREE MONTH PERIOD
ENDED MARCH 31, 2000

NET REVENUE

         Revenue for the three months ended March 31, 2001 increased to $158,441
from $24,576 for the three months ended March 31, 2000, an increase of $133,865.
As noted previously, the increase is primarily the result of continuing the
implementation of a broad-based marketing strategy. The strategy included higher
attendance at trade shows and increased marketing efforts that included direct
mail, email and fax campaigns that contributed to the increase in revenues.
Additionally, in March 31, 2000 a full year's adjustment, reducing sales by
$39,202, was made to sales for product that had been shipped for review, pending
final purchase approval by customers.

COST OF PRODUCTION

         Cost of production includes all costs associated with the acquisition
of raw materials, assembly of finished products, warehousing, shipping, and
payroll associated with production and shipping of finished products. This
expense category also includes labor costs associated with maintaining and
implementing enhancements to existing educational programs as well as
miscellaneous costs related to the needs of the Production Department. Cost of
production for the three months ended March 31, 2001 was $151,338 compared to
$82,781 for the three months ended March 31, 2000, an increase of $68,557 or
83%. Software maintenance costs associated with maintaining and enhancing
existing educational programs increased approximately $44,031, primarily as a
result of expensing Internet Safari labor costs subsequent to its release.
Payroll and benefit costs increased $14,796 primarily from annual increases for
existing employees as well as an increase in benefits. Expenses for office rent
increased $5,857 as a result of leasing additional office space.

SALES AND MARKETING

         Sales and marketing expenses for the three months ended March 31, 2001
were $232,384 versus $174,499 for the three months ended March 31, 2000, an
increase of $57,885 or 33%. The continuation of the Company's marketing strategy
that includes higher attendance at industry trade-shows has resulted in
increased expenses in sales and marketing. An approximate breakdown by component
of the major increases in sales and marketing expense follows: payroll and
benefits $32,649; travel and conferences $28,434; and commissions $13,059 from


                                       17
<PAGE>
increased sales for the quarter. The above increases were partially offset by a
$27,206 decrease in advertising expenses.

GENERAL AND ADMINISTRATIVE

         Total general and administrative (G&A) expense for the three months
ended March 31, 2001 was $350,274 compared to $413,263 for the same period in
2000, a decrease of $62,989. During this period, penalties associated with late
registration filings totaled $46,951, amortization of debt issuance costs
totaled $35,593, and payroll and benefits increased approximately $18,965. The
above G&A expense increases were partially offset with decreases resulting from
a March 31, 2000 bonus expense accrual for awards relating to the issuance of
stock to employees totaling $93,965 and lower costs for seminars and travel
totaling $36,909.

LIQUIDITY AND CAPITAL RESOURCES
-------------------------------

         To support the Company's policy of growth and to meet working capital
needs during the development of INTERNET SAFARI(TM), the Company secured
approximately $1,891,691 in funding during the nine months ended March 31, 2001
through private placements of debt and common stock. A breakdown of this funding
is as follows:

o    On August 18, 2000, the Company borrowed $100,000 under a convertible
     promissory note agreement. On September 27, 2000, the Company amended this
     agreement to issue 80,000 shares of restricted common stock in lieu of a
     payment of $40,000. This stock issuance reduced the promissory note to
     $60,000 that is due on December 31, 2000. The Investment group has agreed
     to convert this debt into shares of common stock. As of March 31, 2001 the
     conversion has not taken place.

o    On November 9, 2000, the Company borrowed $500,000 under two separate
     promissory notes, each for the principal sum of $250,000. The principal sum
     of both promissory notes plus interest at a per annum rate equal to 6.15%
     are due on the earlier of May 9, 2001 or five business days after the
     Company shall have received equity investments or debt financing in excess
     of $750,000. In order to induce the parties to enter into the promissory
     notes, the Company issued the holders of each of the promissory notes
     125,000 shares of common stock of the Company, and Benjamin Shell, the
     Chairman and CEO of the Company, pledged collateral in the form of 500,000
     shares of common stock of the Company owned by him to secure the amounts
     under the promissory notes. The Notes may be pre-paid in whole or in part
     at any time without penalty, but with interest to the date of payment on
     the amount.

o    On December 20, 2000, the Company received a note from a private investor
     for $10,000. The note bears interest at 8% and is due and payable on June
     20, 2001.

o    On January 18, 2001, the Company borrowed $60,000 under a short-term
     promissory note from a private investor. The Company repaid the note in
     full on January 24, 2001.

o    On January 24, 2001 and February 5, 2001 the Company borrowed a total of
     $250,000 under a convertible promissory note for the principal sum of
     $250,000. The principal sum of the

                                       18
<PAGE>
     convertible promissory note plus interest at a per annum rate equal to
     6.15% are due on the earlier of August 5, 2001 or five business days after
     the Company shall have received equity investments or debt financing in
     excess of $1,500,000. In order to induce the party to enter into the
     convertible promissory note, the Company issued the holder 125,000 shares
     of common stock of the Company and agreed to pledge as collateral certain
     intangible assets. The holder of the convertible promissory note may at his
     option convert the unpaid principal amount into such number of fully paid
     and non-assessable shares of common stock. The basic conversion rate shall
     be one (1) share of common stock for each $.666666 in principal amount of
     the note surrendered for conversion. The Note may be pre-paid in whole or
     in part at any time without penalty, but with interest to the date of
     payment on the amount prepaid.

o    On February 01, 2001, the Company borrowed $60,000 under a verbal agreement
     from a private investor. The Company repaid the note in full on February
     06, 2001.

o    On March 1, 2001, the Company entered into a promissory note with a private
     investment group for $40,000. The note bears interest at 8% and is due and
     payable on February 28, 2002.

o    On March 17, 2001, the Company borrowed $50,000 under a short-term
     promissory note from a private investor. The note bears interest at 8% and
     is due and payable in six months.

o    During the nine months ended March 31, 2001, the Company sold 1,050,181
     shares of restricted common stock. Proceeds of the sale aggregated $861,691
     less offering expenses of $17,500. As of March 31, 2001, all shares have
     been issued.

         Additionally, to meet working capital needs certain officers of the
Company loaned the Company a total of $116,000 for the nine months ended March
31, 2001. A total of $71,000 has been repaid to the officers. These transactions
have been reflected in the officer's shareholder payable accounts.

         In order to maintain the current level of operations, the Company will
need to secure additional funding sources to meet its operating expenses. Such
funding sources may include, but are not limited to, additional private
placements of common or convertible equities, placement of debt with banks,
private or public investors, or other lending institutions and/or licensing
agreements with strategic partners. The Company believes that through a
combination of outside sources of capital and revenues generated from product
sales it will have sufficient sources of capital to meet its operating needs.
However, any substantial delays in receipt of or failure to obtain such capital
may prevent the Company from operating as a going concern, given its limited
revenues and capital reserves.

SUMMARY OF RISK FACTORS
-----------------------

         To date, the Company has funded its operations primarily through
revenues generated by various products and debt and equity financings. The
Company will need additional capital before INTERNET SAFARI(TM) begins
generating a sufficient cash flow to sustain operations and anticipated growth.
Additionally, Heartsoft is subject to other risks and uncertainties. A

                                       19
<PAGE>

summary of risk factors is discussed in Part III of Heartsoft's Form 10-KSB for
the transition period April 1, 2000 to June 30, 2000, which was filed on
September 28, 2000.

PART II -- OTHER INFORMATION

ITEM 2.  CHANGES IN SECURITIES

RECENT SALES OF UNREGISTERED SECURITIES
---------------------------------------

         During the nine months ended March 31, 2001, the Company has issued the
following securities without registering the securities under the Securities Act
of 1933:

========================   =====================================================
    CLASS OF PERSONS                         CONSIDERATION
========================   =====================================================
Individuals and            A total of 1,050,181 shares of common stock were sold
Investment Partnerships    for an aggregate cash consideration of $861,691 less
                           offering expenses of $17,500. As of March 31, 2001
                           all shares have been issued.
------------------------   -----------------------------------------------------
Investment                 A total of 375,000 shares of common stock were issued
Partnerships               to induce parties to enter into three separate
                           promissory notes.
------------------------   -----------------------------------------------------
Individuals                A total of 249,500 shares of common stock were issued
                           for investor relations, marketing and financial
                           services as well as finder fees associated with
                           financing arrangements.
------------------------   -----------------------------------------------------
Investment Group           A total of 404,634 shares of common stock were issued
                           to an investment group. 80,000 shares were issued in
                           exchange for satisfaction of debt, 300,000 shares
                           were issued in association with the revision of the
                           penalty agreement dated September 27, 2000 and 24,634
                           shares of common stock were issued for conversion of
                           preferred stock.
------------------------   -----------------------------------------------------
Employees                  A total of 11,000 shares of common stock were granted
                           for services.
------------------------   -----------------------------------------------------
Individual                 A total of 8,000 shares of common stock were granted
                           for conversion of convertible preferred stock.
------------------------   -----------------------------------------------------
Investment Advisor         A total of 1,200,000 shares of common stock were
                           issued for investment services. (See Financial
                           Statement Note 2-Restatement of Previously Issued
                           Financial Statements)
------------------------   -----------------------------------------------------
Individual                 A total of 325,000 shares of common stock were issued
                           to an investor for prior year cash consideration. See
                           note in Part II, Item 2 of Heartsoft's Form 10-QSB,
                           filed on February 14, 2001.
========================   =====================================================

                                       20
<PAGE>

         The Company has agreed to issue a total of 100,000 shares of common
stock associated with penalty provisions resulting from delays in filing a
registration statement (see Financial Statement Note 5 - Accrued Expenses). All
other shares noted as un-issued in the December 31, 2000 10-QSB, have been
issued as of March 31, 2001.

         The Company relied on the exemption set forth in Section 4(2) of the
Securities Act of 1933, as amended, in connection with the issuances of stock
set forth above. All parties listed above are sophisticated persons or entities,
performed services for the Company or had prior or existing relationships with
members of Company's management staff at the time of the transactions listed
above.


ITEM 5.  OTHER INFORMATION.

         As disclosed in Note 2 to the Financial Statements entitled Restatement
of Previously Issued Financial Statements there were two recently discovered
consulting agreements one of which will have an impact on the Company's
financial statements. The Company will amend its historical financial statements
to reflect the accrued expenses associated with this agreement. A preliminary
review of the agreement indicates the following impact on the balance sheets and
statement of operations presented on Form 10-KSB for the periods indicated
below:

<TABLE><CAPTION>
                                             March 31, 1999   March 31, 2000   June 30, 2000
                                              ------------     ------------     ------------
<S>                                           <C>              <C>              <C>
Balance Sheet:
--------------
   Accrued expenses previously reported       $     92,900     $     54,052     $     76,569
   Correction to accrued expenses                   50,803          147,118          171,197
                                              ------------     ------------     ------------
   Restated accrued expenses                  $    143,703     $    201,170     $    247,766

   Accumulated deficit previously reported    $ (3,230,708)    $ (4,754,841)    $ (5,225,517)
   Correction to accumulated deficit               (50,803)        (147,118)        (171,197)
                                              ------------     ------------     ------------
   Restated accumulated deficit               $ (3,281,511)    $ (4,901,959)    $ (5,396,714)

</TABLE>












                                       21
<PAGE>
<TABLE><CAPTION>

Statement of Operations:
------------------------
<S>                                           <C>              <C>              <C>
   G&A expense previously reported            $    544,751     $    925,162     $    328,568
   Correction to G&A expense                        50,803           96,315           24,079
                                              ------------     ------------     ------------
   Restated G&A Expense                       $    595,554     $  1,021,477     $    352,647

   Net loss previously reported               $   (527,081)    $ (1,524,133)    $   (470,676)
   Correction to net loss                          (50,803)         (96,315)         (24,079)
                                              ------------     ------------     ------------
   Restated net loss                          $   (577,884)    $ (1,620,448)    $   (494,755)

   Earnings per share previously reported     $      (0.07)    $      (0.14)    $      (0.04)
   Correction to earnings per share                   --              (0.01)            --
                                              ------------     ------------     ------------
   Restated earnings per share                $      (0.07)    $      (0.15)    $      (0.04)
</TABLE>

         See Part I - Note 2 to the Financial Statements entitled Restatement of
Previously Issued Financial Statements regarding the recently discovered
Consulting Agreement between Heartsoft, Inc. and Intercap Funding LTD, dated
September 20, 1998 and the Non Circumvention and Consulting Agreement between
Heartsoft, Inc. and Intercap Funding LTD, dated February 1, 1999.


ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.

         (a) Exhibits:

EXHIBIT NO.                          DESCRIPTION
--------------------------------------------------------------------------------
   3.1       Articles of Incorporation of the Company. (Incorporated by
             reference to the Company's Form 10-KSB/A for the period ended March
             31, 1999, which was filed on January 22, 2000.)

   3.2       By-Laws of the Company. (Incorporated by reference to the Company's
             Form 10-KSB/A for the period ended March 31, 1999, which was filed
             on January 22, 2000.)

   4.1       Specimen of Certificate for Heartsoft, Inc. Common Stock.
             (Incorporated by reference to the Company's Form 10-KSB/A for the
             period ended March 31, 1999, which was filed on January 22, 2000.)

   10.1      Equipment Lease with Auto & Equipment Leasing by Flex, Inc. dated
             February 12, 1998. (Incorporated by reference to the Company's Form
             10-KSB/A for the period ended March 31, 1999, which was filed on
             January 22, 2000.)

   10.2      Software Agreement dated May 16, 1997 between Heartsoft, Inc. and
             Heartsoft 1997 Limited Partnership. (Incorporated by reference to
             the Company's Form 10-KSB/A for the period ended March 31, 1999,
             which was filed on January 22, 2000.)



                                       22
<PAGE>

   10.3      Acquisition Note dated May 16, 1997 from Heartsoft 1997 Limited
             Partnership. (Incorporated by reference to the Company's Form
             10-KSB/A for the period ended March 31, 1999, which was filed on
             January 22, 2000.)

   10.4      Assumption Agreement dated April 30, 1997 by and among Heartsoft
             1997 Limited Partnership, Heartsoft, Inc. and Limited Partners.
             (Incorporated by reference to the Company's Form 10-KSB/A for the
             period ended March 31, 1999, which was filed on January 22, 2000.)

   10.5      Joint Venture Agreement dated May 16, 1997 between Heartsoft, Inc.
             and Heartsoft 1997 Limited Partnership. (Incorporated by reference
             to the Company's Form 10-KSB/A for the period ended March 31, 1999,
             which was filed on January 22, 2000.)

   10.6      Software Agreement dated July 30, 1997 between Heartsoft, Inc. and
             Heartsoft II 1997 Limited Partnership. (Incorporated by reference
             to the Company's Form 10-KSB/A for the period ended March 31, 1999,
             which was filed on January 22, 2000.)

   10.7      Acquisition Note dated July 30, 1997 from Heartsoft II 1997 Limited
             Partnership. (Incorporated by reference to the Company's Form
             10-KSB/A for the period ended March 31, 1999, which was filed on
             January 22, 2000.)

   10.8      Assumption Agreement dated July 30, 1997 by and among Heartsoft II
             Limited Partnership, Heartsoft, Inc. and Limited Partners.
             (Incorporated by reference to the Company's Form 10-KSB/A for the
             period ended March 31, 1999, which was filed on January 22, 2000.)

   10.9      Joint Venture Agreement dated July 30, 1997 between Heartsoft, Inc.
             and Heartsoft II 1997 Limited Partnership. (Incorporated by
             reference to the Company's Form 10-KSB/A for the period ended March
             31, 1999, which was filed on January 22, 2000.)

   10.10     Software Agreement dated October 28, 1997 between Heartsoft, Inc.
             and Heartsoft III 1997 Limited Partnership. (Incorporated by
             reference to the Company's Form 10-KSB/A for the period ended March
             31, 1999, which was filed on January 22, 2000.)

   10.11     Acquisition Note dated October 28, 1997 from Heartsoft III 1997
             Limited Partnership. (Incorporated by reference to the Company's
             Form 10-KSB/A for the period ended March 31, 1999, which was filed
             on January 22, 2000.)

   10.12     Assumption Agreement dated July 30, 1997 by and among Heartsoft III
             1997 Limited Partnership, Heartsoft, Inc. and Limited Partners.
             (Incorporated by reference to the Company's Form 10-KSB/A for the
             period ended March 31, 1999, which was filed on January 22, 2000.)







                                       23
<PAGE>

   10.13     Joint Venture Agreement dated October 28, 1997 between Heartsoft,
             Inc. and Heartsoft III 1997 Limited Partnership. (Incorporated by
             reference to the Company's Form 10-KSB/A for the period ended March
             31, 1999, which was filed on January 22, 2000.)

   10.14     Letter Agreement by and between Heartsoft, Inc. and the Weather
             Channel Enterprises, Inc. dated September 1, 1999. (Incorporated by
             reference to the Company's Form 10-KSB for the period ended March
             31, 2000, which was filed on July 14, 2000.)

   10.15     Co-branding Program Agreement by and between Heartsoft, Inc. and
             Ask Jeeves, Inc. dated September 16, 1999. (Incorporated by
             reference to the Company's Form 10-KSB for the period ended March
             31, 2000, which was filed on July 14, 2000.)

   10.16     Lease dated November, 1999 for commercial office space in Broken
             Arrow, Oklahoma. (Incorporated by reference to the Company's Form
             10-KSB for the period ended March 31, 2000, which was filed on July
             14, 2000.)

   10.17     Lease dated January, 2000 for commercial office space in Broken
             Arrow, Oklahoma. (Incorporated by reference to the Company's Form
             10-KSB for the period ended March 31, 2000, which was filed on July
             14, 2000.)

   10.18     Stock Purchase Agreement by and between Heartsoft, Inc. and Hi-Tel
             Group, Inc. dated March 1, 2000 with Certificate of Designation of
             the Series A Convertible Preferred Stock attached as Exhibit A and
             Common Share Purchase Warrant between Heartsoft, Inc. attached as
             Exhibit B. (Incorporated by reference to the Company's Form 10-KSB
             for the period ended March 31, 2000, which was filed on July 14,
             2000.)

   10.19     Web Service Agreement by and between Heartsoft, Inc. and Gaggle,
             Inc. dated June 9, 2000. (Incorporated by reference to the
             Company's Form 10-KSB for the period ended March 31, 2000, which
             was filed on July 14, 2000.)

   10.20     Amendment to Stock Purchase Agreement by and between Heartsoft,
             Inc. and Hi-Tel Group, Inc. dated September 27, 2000. (Incorporated
             by reference to the Company's Form 10-KSB for the transition period
             ended June 30, 2000 which was filed on September 28, 2000.)












                                       24
<PAGE>

   10.21     Amendment to Heartsoft, Inc. Common Share Purchase Warrant by and
             between Heartsoft, Inc. and Hi-Tel Group, Inc. dated September 27,
             2000 (Incorporated by reference to the Company's Form 10-KSB for
             the transition period ended June 30, 2000, which was filed on
             September 28, 2000.)

   10.22     Original Equipment Manufacturing (OEM) Licensing Agreement by and
             between Heartsoft, Inc. and International Academy of Science dated
             April 28, 2000. (Incorporated by reference to the Company's Form
             10-QSB for the period ended September 30, 2000, which was filed on
             November 14, 2000.)

   10.23     Co-Branding License Agreement by and between Heartsoft Inc and
             Merriam-Webster, Incorporated dated August 14, 2000. (Incorporated
             by reference to the Company's Form 10-QSB for the period ended
             September 30, 2000, which was filed on November 14, 2000.)

   10.24     Promissory Note dated August 18, 2000 between Heartsoft, Inc. and
             Hi-Tel Group, Inc. (Incorporated by reference to the Company's Form
             10-QSB for the period ended September 30, 2000, which was filed on
             November 14, 2000.)

   10.25     Equipment Lease with Auto & Equipment Leasing by Flex, Inc. dated
             July 31, 2000. (Incorporated by reference to the Company's Form
             10-QSB for the period ended September 30, 2000, which was filed on
             November 14, 2000.)

   10.26     Trademark License Agreement by and between Heartsoft, Inc. and Ask
             Jeeves dated September 8, 2000. (Incorporated by reference to the
             Company's Form 10-QSB for the period ended September 30, 2000,
             which was filed on November 14, 2000.)

   10.27     Letter Agreement granting Benjamin Shell, CEO of Heartsoft, Inc., a
             non-exclusive license to use the Yahooligans logo dated September
             19, 2000. (Incorporated by reference to the Company's Form 10-QSB
             for the period ended September 30, 2000, which was filed on
             November 14, 2000.)

   10.28     Amendment to Promissory Note between Heartsoft, Inc. and Hi-Tel
             Group, Inc. dated November 8, 2000. (Incorporated by reference to
             the Company's Form 10-QSB for the period ended September 30, 2000,
             which was filed on November 14, 2000.)













                                       25
<PAGE>

   10.29     Promissory Note dated November 9, 2000 between Heartsoft, Inc. and
             Alan W. Carlton Revocable Living Trust. (Incorporated by reference
             to the Company's Form 10-QSB for the period ended September 30,
             2000, which was filed on November 14, 2000.)

   10.30     Letter Agreement dated November 9, 2000 between Heartsoft, Inc. and
             Alan W. Carlton Revocable Living Trust. (Incorporated by reference
             to the Company's Form 10-QSB for the period ended September 30,
             2000, which was filed on November 14, 2000.)

   10.31     Promissory Note dated November 9, 2000 between Heartsoft, Inc. and
             June Limited Partnership. (Incorporated by reference to the
             Company's Form 10-QSB for the period ended September 30, 2000,
             which was filed on November 14, 2000.)

   10.32     Letter Agreement dated November 9, 2000 between Heartsoft, Inc. and
             June Limited Partnership. (Incorporated by reference to the
             Company's Form 10-QSB for the period ended September 30, 2000,
             which was filed on November 14, 2000.)

   10.33     Joint Security Agreement dated November 9, 2000 between Heartsoft,
             Inc., Benjamin Shell, Alan W. Carlton Revocable Living Trust, and
             June Limited Partnership. (Incorporated by reference to the
             Company's Form 10-QSB for the period ended September 30, 2000,
             which was filed on November 14, 2000.)

   10.34     Amended and Restated Engagement Agreement by and between Heartsoft,
             Inc. and Juanita Seng dated September 7, 1999. (Incorporated by
             reference to the Company's Form 10-QSB for the period ended
             December 31, 2000, which was filed on February 14, 2001.)

   10.35     Employment Agreement by and between Heartsoft, Inc. and Rodger
             Graham dated August 28, 2000. (Incorporated by reference to the
             Company's Form 10-QSB for the period ended December 31, 2000, which
             was filed on February 14, 2001.)

   10.36     Amended and Restated Engagement Agreement by and between Heartsoft,
             Inc. and Dana Swift dated October 6, 2000. (Incorporated by
             reference to the Company's Form 10-QSB for the period ended
             December 31, 2000, which was filed on February 14, 2001.)














                                       26
<PAGE>


   10.37     Promissory Note by and between Benjamin P. Shell and Heartsoft,
             Inc., dated November 13, 2000. (Incorporated by reference to the
             Company's Form 10-QSB for the period ended December 31, 2000, which
             was filed on February 14, 2001.)

   10.38     Electronic Agreement Summary dated November 14, 2000 granting
             Heartsoft, Inc. permission to use Binney & Smith's Crayola logo and
             link to it's web sight. (Incorporated by reference to the Company's
             Form 10-QSB for the period ended December 31, 2000, which was filed
             on February 14, 2001.)

   10.39     Equipment Lease with Auto & Equipment Leasing by Flex, Inc. dated
             November 15, 2000. (Incorporated by reference to the Company's Form
             10-QSB for the period ended December 31, 2000, which was filed on
             February 14, 2001.)

   10.40     Letter Agreement dated November 20, 2000 granting Heartsoft, Inc.,
             a non-exclusive license to use CBS Sportsline.com (SPLN) logos.
             (Incorporated by reference to the Company's Form 10-QSB for the
             period ended December 31, 2000, which was filed on February 14,
             2001.)

   10.41     Electronic Agreement Summary dated November 27, 2000 granting
             Heartsoft, Inc. permission to use Timeforkids.com's logo and link
             to it's web sight. (Incorporated by reference to the Company's Form
             10-QSB for the period ended December 31, 2000, which was filed on
             February 14, 2001.)

   10.42     Non-Qualified Stock Option Agreement by and between Heartsoft, Inc.
             and Rodger Graham dated December 4, 2000. (Incorporated by
             reference to the Company's Form 10-QSB for the period ended
             December 31, 2000, which was filed on February 14, 2001.)

   10.43     Non-Qualified Stock Option Agreement by and between Heartsoft, Inc.
             and Juanita Seng dated December 4, 2000. (Incorporated by reference
             to the Company's Form 10-QSB for the period ended December 31,
             2000, which was filed on February 14, 2001.)

   10.44     Non-Qualified Stock Option Agreement by and between Heartsoft, Inc.
             and Dana Swift dated December 4, 2000. (Incorporated by reference
             to the Company's Form 10-QSB for the period ended December 31,
             2000, which was filed on February 14, 2001.)

   10.45     Letter Agreement by and between Heartsoft, Inc., and The Glenn A.
             Chalker Revocable Trust dated January 24, 2001. (Incorporated by
             reference to the Company's Form 10-QSB for the period ended
             December 31, 2000, which was filed on February 14, 2001.)






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<PAGE>


   10.46     Security Agreement by and between Heartsoft, Inc. and The Glenn A.
             Chalker Revocable Trust dated January 24, 2001. (Incorporated by
             reference to the Company's Form 10-QSB for the period ended
             December 31, 2000, which was filed on February 14, 2001.)

   10.47     Convertible Promissory Note by and between Heartsoft, Inc. and The
             Glenn A. Chalker Revocable Trust dated January 24, 2001.
             (Incorporated by reference to the Company's Form 10-QSB for the
             period ended December 31, 2000, which was filed on February 14,
             2001.)

   10.48     Consulting Agreement by and between Heartsoft, Inc. and Intercap
             Funding LTD dated September 20, 1998.

   10.49     Non Circumvention and Consulting Agreement by and between Intercap
             Funding LTD dated February 1, 1999.

   10.50     Promissory Note by and between Heartsoft, Inc. and Greg Dhuevetter
             dated January 18, 2001.

   10.51     Promissory Note by and between Heartsoft, Inc. and Hi Tel Group,
             Inc. dated March 1, 2001.

   10.52     Consulting Agreement by and between Heartsoft, Inc. and Wealth
             Capital Corporation dated March 6, 2001.

   10.53     Promissory Note by and between Heartsoft, Inc. and Greg Dhuevetter
             dated March 17, 2001.

   10.54     Investor Relations/Public Relations Consultant Contract by and
             between Heartsoft, Inc. and Charles J. Fabiano of Strategic
             Initiatives dated April 2, 2001.

   10.55     Promissory Note by and between Heartsoft, Inc. and Dale Hill dated
             April 17, 2001.

   10.56     Non-Exclusive Consulting Agreement by and between Heartsoft, Inc.
             and Santa Fe Capital Group dated April 23, 2001.

   10.57     Promissory Note by and between Heartsoft, Inc. and Dale Hill dated
             May 1, 2001.

   10.58     Extension Agreement and Amendment to Joint Security Agreement by
             and between June Limited Partnership and Alan W. Carlton Revocable
             Living Trust and Heartsoft, Inc. and Benjamin P. Shell, Jr. dated
             May 9, 2001.



                                       28
<PAGE>



   10.59     Promissory Note by and between Heartsoft, Inc. and George Fenimore
             III dated May 11, 2001.

   21.1      Subsidiaries of Heartsoft. (Incorporated by reference to the
             Company's Form 10-KSB/A for the period ended March 31, 1999, which
             was filed on January 22, 2000.)



             (b)  Reports on Form 8-K:

                  No reports on Form 8-K were filed during the three-month
                  period ended March 31, 2001.




                                   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.


                                                     HEARTSOFT, INC.
                                             -------------------------------
                                                      (Registrant)



Date:    5/15/01                             /s/  Benjamin P. Shell
      --------------                         -------------------------------
                                             Benjamin P. Shell,
                                             Chairman of the Board,
                                             President, and Chief
                                             Executive Officer
                                             (Principal Executive Officer)




Date:    5/15/01                             /s/ Rodger Graham
      --------------                         -------------------------------
                                             Rodger Graham,
                                             Chief Financial Officer
                                             (Principal Financial Officer)





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