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                     U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-KSB

                     ANNUAL REPORT UNDER SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                   For the fiscal year ended December 31, 2000

                         Commission file number: 0-6428

                           ASI Technology Corporation
                 (Name of Small Business Issuer in its charter)

            Nevada                                             88-0105586
(State or other jurisdiction of                             (I.R.S. Employer
 incorporation or organization)                          Identification Number)


                     980 American Pacific Drive, Suite #111
                             Henderson, Nevada 89014
                                 (702) 734-1888
          (Address and telephone number of principal executive offices)


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


    Securities registered pursuant to Section 12(g) of the Exchange Act:
                         Common Stock, par value $0.02

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

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

State issuer's revenues for its most recent fiscal year. $160,536

The aggregate  market value of the issuer's common stock held by  non-affiliates
as of March 15, 2001  (assuming for this purpose that only  directors,  officers
and 10% or more shareholders of registrant are affiliates of registrant),  based
on the  average  of  the  closing  bid  and  asked  prices  on  that  date,  was
approximately $-0-.

As of March 15, 2001 there were 2,711,664  shares of ASI Technology  Corporation
common stock, par value $0.02, outstanding.

Transitional Small Business Disclosure Format (check one): Yes ___ No _X_


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<TABLE>
                                                  TABLE OF CONTENTS

<CAPTION>
                                                                                                                 Page
                                                        PART I
<S>           <C>                                                                                                <C>
ITEM 1.       Description of Business                                                                             2
ITEM 2.       Description of Property                                                                            12
ITEM 3.       Legal Proceedings                                                                                  12
ITEM 4.       Submission of Matters to a Vote of Security Holders                                                12


                                                       PART II

ITEM 5.       Market for Common Equity and Related Stockholder Matters                                           13
ITEM 6.       Management's Discussion and Analysis or Plan of Operation                                          14
ITEM 7.       Financial Statements                                                                               21
ITEM 8.       Changes in and Disagreements with Accountants on Accounting and Financial Disclosure               21


                                                       PART III

ITEM 9.       Directors, Executive Officers, Promoters and Control Persons;
              Compliance With Section 16(a) of the Exchange Act                                                  21
ITEM 10.      Executive Compensation                                                                             23
ITEM 11.      Security Ownership of Certain Beneficial Owners and Management                                     24
ITEM 12.      Certain Relationships and Related Transactions                                                     24
ITEM 13.      Exhibits and Reports on Form 8-K                                                                   25

SIGNATURES
</TABLE>


                           FORWARD-LOOKING STATEMENTS

IN  ADDITION  TO   HISTORICAL   INFORMATION,   THIS   ANNUAL   REPORT   CONTAINS
FORWARD-LOOKING   STATEMENTS  WITHIN  THE  MEANING  OF  THE  PRIVATE  SECURITIES
LITIGATION  REFORM ACT OF 1995 AND THE COMPANY  DESIRES TO TAKE ADVANTAGE OF THE
"SAFE  HARBOR"  PROVISIONS  THEREOF.  THEREFORE,  THE COMPANY IS INCLUDING  THIS
STATEMENT FOR THE EXPRESS  PURPOSE OF AVAILING ITSELF OF THE PROTECTIONS OF SUCH
SAFE  HARBOR  WITH  RESPECT  TO  ALL OF  SUCH  FORWARD-LOOKING  STATEMENTS.  THE
FORWARD-LOOKING  STATEMENTS IN THIS REPORT  REFLECT THE COMPANY'S  CURRENT VIEWS
WITH RESPECT TO FUTURE  EVENTS AND  FINANCIAL  PERFORMANCE.  EXAMPLES OF FORWARD
LOOKING  STATEMENTS  INCLUDE THE EXPECTATIONS OF THE COMPANY WITH RESPECT TO ITS
STRATEGY.  THERE CAN BE NO ASSURANCES THAT THE COMPANY'S FINANCIAL GOALS WILL BE
REALIZED.  THESE  FORWARD-LOOKING  STATEMENTS  ARE SUBJECT TO CERTAIN  RISKS AND
UNCERTAINTIES, INCLUDING THOSE DISCUSSED HEREIN, THAT COULD CAUSE ACTUAL RESULTS
TO DIFFER  MATERIALLY  FROM  HISTORICAL  RESULTS OR THOSE  ANTICIPATED.  IN THIS
REPORT, THE WORDS "ANTICIPATES,"  "ESTIMATES," "BELIEVES," "EXPECTS," "INTENDS,"
"FUTURE,"  "GOAL,"  "OBJECTIVE"  AND  SIMILAR  EXPRESSIONS   GENERALLY  IDENTIFY
FORWARD-LOOKING STATEMENTS.  READERS ARE CAUTIONED TO CONSIDER THE SPECIFIC RISK
FACTORS  DESCRIBED BELOW AND NOT TO PLACE UNDUE RELIANCE ON THE  FORWARD-LOOKING
STATEMENTS CONTAINED HEREIN, WHICH SPEAK ONLY AS OF THE DATE HEREOF. THE COMPANY
UNDERTAKES NO OBLIGATION TO PUBLICLY REVISE THESE FORWARD-LOOKING  STATEMENTS TO
REFLECT EVENTS OR CIRCUMSTANCES THAT MAY ARISE AFTER THE DATE HEREOF.

In this report,  the terms "ASI," "the Company,"  "we," "us," and "our" refer to
ASI Technology Corporation.


                                     Part I

ITEM 1. DESCRIPTION OF BUSINESS.

Introduction

                                       2

<PAGE>


ASI Technology  Corporation is a development stage company,  incorporated  under
the laws of the State of Nevada. We own two patented plasma  technologies,  each
in an early  stage of  development.  We acquired  our  patented  plasma  antenna
technology  by purchase in August 1999 and acquired  our  patented  plasma sound
reduction  technology  for jet  engines by purchase  in  December  2000.  We are
engaged in developing our technologies  with the goal to  commercialize  through
licensing.

     o   Plasma  Antenna  Technology  - When  gas is  electrically  charged,  or
         ionized  to a  plasma  state  it  becomes  conductive,  allowing  radio
         frequency (RF) signals to be transmitted or received. We employ ionized
         gas enclosed in a tube as the  conducting  element of an antenna.  When
         the gas is not ionized,  the antenna element ceases to exist. This is a
         fundamental  change from  traditional  antenna  design  that  generally
         employs  solid metal wires as the  conducting  element.  We believe our
         plasma  antenna  offers  numerous  advantages   including  stealth  for
         military  applications  and higher  digital  performance  in commercial
         applications.  We also believe our technology can compete in many metal
         antenna  applications.  Our initial  efforts  have  focused on military
         markets.  General  Dynamics'  Electric Boat Corporation  sponsored over
         $160,000 of development in 2000 accounting for all of our revenues.

     o   Plasma Sound Reduction  Technology - This technology employs techniques
         to modulate  the plasma in jet engines to reduce noise  emissions.  Jet
         engine noise  emissions  are highly  regulated  and airlines and engine
         manufacturers  incur significant  costs to meet increasingly  stringent
         regulations.  Although our basic technology  concept has been tested in
         laboratory tests using hot plasma-type  flames, our goal is to validate
         this technology on reduced scale jet engines and thereafter develop and
         license the technology  for use in reducing the noise  emissions of jet
         engines.

Both of our plasma  technologies are in the early stage of development and there
can  be no  assurance  that  commercial  viability  will  be  achieved.  Further
development  is necessary in order to verify and  document  the  advantages  and
commercialize our technologies.

Prior to the purchase of the plasma  antenna  technology  ASI had no significant
assets or  liabilities.  During the period from 1995 until 1999 ASI was inactive
and engaged only in collecting  proceeds from prior asset sales,  reducing debts
and paying  corporate  costs. At the beginning of 1999 we commenced our strategy
of acquiring and developing new technologies for licensing.

ASI was incorporated on January 9, 1931 and has evolved through a number of name
changes and equity reorganizations. Our President, Jerry E. Polis, was appointed
President  and a  director  in 1973.  Prior  to the  acquisition  of our  plasma
technology  in August  1999,  ASI was  essentially  inactive.  ASI has not filed
Exchange Act reports since about 1982. On September 1, 2000 the Company  changed
its name from "ASI" to "ASI Technology Corporation" in connection with a capital
reorganization  which included a 1 for 10 reverse stock split. All share and per
share data included in this annual  report have been  adjusted to  retroactively
reflect the reverse stock split. The Company has 11,000,000  shares  authorized,
$0.02 par value, of which  10,000,000 are designated  common stock and 1,000,000
shares are  designated  preferred  stock.  As of the date of this annual  report
there were 2,711,664 shares of common stock issued and outstanding. There are no
shares of preferred stock issued or outstanding.

Our principal executive offices are located at 980 American Pacific Drive, Suite
#111,  Henderson,  Nevada 89014.  Our telephone number is (702) 734-1888 and our
Internet Web site is  www.asiplasma.com.  The information on our Web site is not
part of this annual report.

Key Business Developments in 1999 and 2000

Beginning  in early 1999 we  developed  a strategy  focusing  on  acquiring  and
exploiting technology. In August 1999 we purchased our plasma antenna technology
and commenced  development.  We have paid for research and prototype development
and also obtained  sponsored  development from General  Dynamics'  Electric Boat
Corporation.  In December 2000 we were offered the  opportunity  to purchase our
plasma sound reduction technology for jet engines. We believe these technologies
are compatible,  both employing plasma physics as an underlying concept and both
having military and commercial prospects.

In  addition  to the  acquisition  of our two  plasma  technologies,  management
efforts have focused on the following:

                                       3

<PAGE>

o    In October  1999 we completed  the sale of  1,500,000  shares of our common
     stock providing gross proceeds of $750,000 of which $250,000 was applied to
     purchase our plasma antenna technology.

o    We have established working relationships with:

     -   General  Dynamics  (Bath  Iron  Works  Corporation)  - Bath Iron  Works
         Corporation  has assisted us in focusing our  development and marketing
         efforts.  The first result of this  relationship  was our contract with
         the  General  Dynamics  Electric  Boat  Corporation   described  below.
         Although  we have no  formal  partnering  agreement,  Bath  Iron  Works
         Corporation has sponsored meetings and attended military  presentations
         on our behalf.  They continue to assist us in promoting our technology.
         There can be no assurance,  however, that we can consummate a strategic
         relationship with them or that their support will continue.

     -   University of  Tennessee's  Electrical  Engineering  and Plasma Physics
         Department - We have teamed with University of Tennessee to develop and
         evaluate  new plasma  prototypes.  We are paying  the  University  on a
         project by project basis. We have no written agreement and there can be
         no  assurance  that we can  continue to avail use of their  facilities,
         equipment or personnel.

o    In January 2000 we obtained our first sponsored  development purchase order
     for $89,710 from General Dynamics'  Electric Boat Corporation to develop an
     inflatable  plasma  antenna  prototype for satellite  communications.  This
     contract  was  completed  in August 2000 and a second phase was awarded for
     $78,696 to develop an advanced  prototype.  We are working to finalize  the
     second phase of this arrangement which we anticipate to complete by the end
     of the first quarter of 2001.

o    We have applied to extend  patent  coverage for our two issued U.S.  plasma
     antenna  patents  into  Canada,  Europe and  Australia.  We have filed four
     additional  patent  applications  in the United States and we are preparing
     additional  patent  applications  to broaden our portfolio of  intellectual
     property.

o    Through the services of the University of Tennessee we completed six plasma
     antenna prototypes in 2000 for demonstration to customers. We believe these
     laboratory  prototypes  demonstrate  important advantages of plasma antenna
     technology in a range of applications.

We have applied for additional  government  contracts  through various  military
agencies.  Upon completion of the second phase of the Electric Boat  Corporation
development, we intend to seek future contractual support for the development of
an advanced  boat-based  satellite  antenna system. We may also seek support for
our plasma sound reduction  technology from government and military sources at a
future date.  NASA has supported  research in the past on reducing  noise in jet
engines.  There can be no assurance that we can obtain future  development funds
from these or other sources.

Terms of Technology Purchase Agreements

Plasma Antenna

On August  20,  1999,  we signed a purchase  agreement  (the  "Antenna  Purchase
Agreement")  for  the  plasma  antenna   technology   with  Patriot   Scientific
Corporation  ("Patriot"),  an unaffiliated  company. The original plasma antenna
patent was issued in 1997. The plasma antenna  technology was invented by Elwood
G.  Norris,  who has  assisted  us as a  consultant  in further  developing  our
technology.

We purchased the plasma antenna  technology for an aggregate cash purchase price
of $250,000.  The Antenna  Purchase  Agreement  further provides that during the
five year period  ending on August 20,  2004,  we will pay to Patriot  royalties
equal to 5% of gross revenues  actually received by us from the sale of products
incorporating the technology or from the license or sublicense of the technology
to third parties, up to a maximum of $250,000 in future royalties. If we sell or
assign the  technology  during such five year  period,  we have agreed to pay to
Patriot  an  amount  equal to 5% of the  purchase  price  received  by us or the
balance of the $250,000 maximum royalty that remains unpaid,  whichever is less.
Thereafter no additional  payments are due or payable to Patriot  related to the
technology. There are no minimum future royalties.

                                       4

<PAGE>


The technology purchased from Patriot was comprised of the following:

     o   U.S. Patent #5,594,456 (Gas Tube RF Antenna) issued January 14, 1997.

     o   U.S.  Patent   Application   (Rugged  Gas  Tube  RF  Cellular  Antenna)
         subsequently issued on November 23, 1999 as #5,990,837.

     o   All related trade secrets and proprietary information.

     o   Results of Patriot's  research  and  development,  including  two final
         reports issued for U.S. Navy contracts.

The $250,000 purchase price was expensed as acquired technology as there were no
other identifiable tangible assets acquired and since technological  feasibility
has not been  established  and no  future  alternative  uses of the  patents  or
technology currently exists.

                                       5

<PAGE>


Plasma Sound Reduction

On December  30,  2000,  we signed a purchase  agreement  (the "Sound  Reduction
Purchase  Agreement")  for the plasma sound  reduction  technology with American
Technology  Corporation  ("ATC"),  an unaffiliated  company.  The patent on this
technology  was issued in 1999 and the technology was also invented by Elwood G.
Norris.  We  anticipate  that Mr.  Norris  will  assist us as an advisor on this
technology.

We purchased the sound  reduction  technology  for $200,000 with an initial cash
payment of $100,000  and an  agreement  to make ten monthly  payments of $10,000
commencing February 1, 2001. We are obligated to pay royalties starting at 6% of
product  revenues in the first year of the agreement,  5% in the second year and
4%  thereafter  for the term of the  patent.  A royalty of 15% is due on license
revenues  and a fee of 10% of sale  proceeds is due on the  further  sale of the
technology.

The technology purchased from ATC was comprised of the following:

     o   U.S. Patent No. 5,966,452 for Sound Reduction Method and System for Jet
         Engines issued on October 12, 1999 and corresponding applications filed
         in Brazil,  Canada,  China, the European Patent Office (EPO), Japan and
         the Russian Federation.

     o   All related trade secrets, technical data and proprietary information.

     o   All market research, contact lists and related information.

The $200,000 purchase price was expensed as acquired technology as there were no
other identifiable tangible assets acquired and since technological  feasibility
has not been  established  and no  future  alternative  uses of the  patents  or
technology currently exists.

Description of the Technology

Plasma

The different states of matter generally found on earth are solid,  liquid,  and
gas. Sir William  Crookes,  an English  physicist,  identified a fourth state of
matter,  now called  plasma,  in 1879.  Plasma is by far the most common form of
matter.  Plasma in the stars and in the tenuous space between them makes up over
99% of the  visible  universe  and  perhaps  most of that which is not  visible.
Important to our technologies,  plasmas are conductive assemblies of charged and
neutral  particles  and fields that exhibit  collective  effects.  Plasmas carry
electrical currents and generate magnetic fields.

Plasma Antenna Technology

Since the discovery of radio frequency ("RF")  transmission,  antenna design has
been an integral part of virtually every  communication  and radar  application.
Technology  has  advanced to provide  unique  antenna  designs for  applications
ranging from  general  broadcast  of radio  frequency  signals for public use to
complex  weapon  systems.  In its most  common  form,  an antenna  represents  a
conducting metal surface that is sized to emit radiation at one or more selected
frequencies. Antennas must be efficient so the maximum amount of signal strength
is expended in the propagated wave and not wasted in antenna reflection.

Our plasma antenna  technology  employs ionized gas enclosed in a tube (or other
enclosure) as the conducting element of an antenna. We believe ionized gas is an
efficient  conducting element with a number of important  advantages.  Since the
gas is ionized only for the time of transmission or reception, unwanted trailing
signals or "ringing"  and  associated  effects of solid wire antenna  design are
eliminated.  The design  allows for extremely  short  pulses,  important to many
forms of digital  communication  and  radar.  The design  further  provides  the
opportunity  to  construct  an  antenna  that  can be  compact  and  dynamically
reconfigured for frequency, direction, bandwidth, gain and beamwidth. We believe
our plasma antenna  technology  will enable future  antennas to be designed that
are  efficient,  low in weight and smaller in size than  traditional  solid wire
antennas.

In September  1994,  Patriot filed a patent  application  on the plasma  antenna
technology.  Immediately  upon  receiving  notice of allowance in June 1995, the
invention  was  classified  secret by the U.S.  Department  of  Commerce  at the
request of a defense  agency.  In June 1996,  as a result of an  application  by
Patriot seeking declassification, the plasma antenna technology was declassified
allowing  exploitation for both  governmental and commercial  purposes.  In 1997
Patriot  completed a proof of concept contract funded by the U.S. Navy Office of
Naval  Research  to develop,  fabricate,  characterize  and  evaluate an ionized
plasma antenna element. This contract was designed to provide a

                                       6

<PAGE>


demonstration  of the ability to use ionized plasma as a conducting  path for RF
energy.  The results of this  investigation  indicated  that the plasma  antenna
element  behaved like a wire (metal)  antenna in both  transmit and receive mode
exhibiting  essentially the same  characteristics.  In 1998 Patriot  completed a
contract by the Office of Naval  Research  and issued a report  titled  "Ionized
Plasma  Antenna  Development  Concept" to the Office of Naval  Research  under a
Phase I Small Business  Innovation  Research  ("SBIR")  Program  Contract.  This
report concluded that a plasma antenna transmitted and received RF transmissions
comparable to a wire at various frequencies and exhibited low noise.

One distinguishing  feature of a plasma antenna is that the gas ionizing process
can manipulate resistance.  When deionized,  the gas has infinite resistance and
does not interact  with RF  radiation.  When  deionized the gas antenna will not
backscatter  radar  waves  (providing  stealth)  and will not absorb  high-power
microwave radiation (reducing the effect of electronic warfare countermeasures).

A second distinguishing feature is that after sending a pulse the plasma antenna
can be deionized,  eliminating  the ringing  associated with  traditional  metal
elements.  Ringing  and the  associated  noise  of a  metal  antenna  can  limit
capabilities in high frequency short pulse transmissions. In these applications,
metal  antennas  are  often   accompanied  by   sophisticated   computer  signal
processing.  By  reducing  ringing  and  noise,  we believe  our plasma  antenna
provides increased accuracy and reduces computer signal processing requirements.
These advantages may become  important in cutting edge  applications for impulse
radar and high-speed digital communications.

Based on the results of research and  development to date, we believe our plasma
antenna technology has the following major attributes:

     o   No antenna ringing provides an improved signal and reduces distortion.

     o   Since a plasma  antenna is composed of  non-metallic  elements it has a
         reduced radar cross section providing stealth.

     o   Changes in plasma density can change bandwidth over wide ranges.

     o   After the gas is  ionized,  a plasma  antenna  has a low noise floor an
         important attribute to many transmission and reception applications.

     o   A circular radar or reception scan can be performed electronically with
         no moving parts at a high speed.

     o   Plasma antenna elements can be constructed and configured into an array
         that is dynamically  reconfigurable  for frequency,  beamwidth,  power,
         gain, polarization and directionality - on the fly.

     o   With a  reconfigurable  plasma antenna many RF subsystems can share one
         antenna resource reducing the number and size of antenna structures.

     o   Mathematical  illustrations  indicate  that by selecting  the gases and
         changing  ion  density  that  the  electrical   aperture  (or  apparent
         footprint)  of a plasma  antenna  may be made to  perform on par with a
         metal counterpart having a larger physical size.

We have  funded  prototypes  developed  for us by the  University  of  Tennessee
demonstrating:

     o   the  operation of a plasma  antenna up to 2.5 GHz (a hertz is a unit of
         frequency of one cycle per second,  one gigahertz is one billion cycles
         per second), other experiments have been to 10 GHz

     o   use of a series of plasma tubes as a reflector

     o   use of plasma as a medium in a non-metallic wave guide (wave guides are
         hollow  structures  to carry  high  power  electromagnetic  waves to an
         antenna  element  similar in function to a coaxial cable in lower power
         applications)

     o   operation of flexible tube plasma antennas

     o   embedding of plasma antennas in shipboard composite structures

In addition we have generated analytical and mathematical support and models for
various plasma antenna measurements.  To date we have elected not to publish our
work as we continue to file patent applications.

Our results  indicate  that a plasma  antenna can be used for many  transmission
and/or  modulation  techniques:  such  as  continuous  wave,  phase  modulation,
impulse, AM, FM, chirp, spread spectrum or other digital techniques. And we have
determined  that plasma  antennas can be used over a large frequency range up to
20GHz and employ a variety of

                                       7

<PAGE>


gases (for example neon, argon, helium,  krypton,  mercury vapor and zenon). The
same  appears to be true as to its value as a receive  antenna.  Whether  and to
what extent the development of our technology will result in a commercial plasma
antenna exhibiting any of these attributes is presently unknown.  Plasma antenna
technology is still in an early stage of development and additional  testing and
commercial  prototype  demonstrations  will be required to determine  commercial
viability.

Plasma Sound Reduction Technology

Jet engines and more  specifically  the gas turbine jet engines employed in most
aircraft are notorious for their excessive noise level whether in aircraft or in
industry or on ships. The noise pollution can be uncomfortable and possibly even
dangerous to humans.  As a result there are a variety of government  regulations
imposed  requiring  aircraft to adhere to certain maximum noise levels and limit
the number of takeoff and landings of certain  aircraft  based on their level of
overall noise output.

In  the  mid  1980's  the  International  Civil  Aviation   Organization  (ICAO)
established  the  Committee on Aviation  Environmental  Protection  (CAEP) which
developed  international  aircraft  noise  certification  and phaseout rules for
certain  aircraft.  Most airports  have noise limits and budgets.  In the United
States,  the  Department  of  Transportation  ("DOT") and the  Federal  Aviation
Authority  ("FAA") have authority  under the Aviation Safety and Noise Abatement
Act of 1979, as amended and recodified, and under the Airport Noise and Capacity
Act of 1990, to monitor and regulate  aircraft engine noise.  Noise standards in
the U.S.  have been  codified  most  recently in 1999 by FAR  (Federal  Aviation
Regulation)  Part  36  -  Noise  Standards:   Aircraft  Type  and  Airworthiness
Certification.  A mandate went into effect  January 1, 2000,  requiring that all
operations  into and out of U.S.  airports  must be made with  Stage 3 (the most
strict regulated so far) noise level compliant  airplanes.  Stage 3 aircraft are
required to be about 12% quieter  than phased out Stage 2 aircraft.  The CAEP is
continuing to evaluate  further noise  reductions and  regulations and has begun
work on Stage 4 standards that could be codified  within one to two years and be
phased in over a number of years.

Numerous airports have imposed additional restrictions on airplane noise levels,
noise budgets,  mandatory flight paths and runway restrictions,  which limit the
ability  of  carriers  to  increase  services  or  operate  as  desired at these
airports.

Traditional noise reduction methods are typically passive consisting of mufflers
and baffling techniques. More active techniques may employ mixing inlet air with
exhaust  gases to reduce  exhaust  velocity.  These  various  methods  generally
provide  limited  noise  reduction  and  may add  weight  and  reduce  operating
efficiency  of engines.  Many older Stage 2 aircraft are flying today because of
inefficient  "hush-kits"  used to quiet the aircraft to meet Stage 3 compliance.
The cost to hush-kit an aircraft such as a Boeing 737 can approach $2 million.

The  science of noise  cancellation  and the  ability to create a sound wave 180
degrees out of phase with the  original  sound wave to  interfere  and cancel is
well known. Noise cancellation  algorithms and systems have been developed for a
variety of uses ranging from headphones to industrial  machinery.  These methods
generally use a speaker to produce the interfering and canceling wave.

Use of  active  electronic  noise  cancellation  technology  in jet and  turbine
engines has not been practical,  although  various methods have been proposed by
others,  due to the  difficulty  in  getting a timely  wave to the source of the
sound. The patent we purchased  describes a method of using the internal hot gas
plasma as the speaker  element to create a phase inverted wave to interfere with
the acoustic  noise wave inside a jet engine.  The patent  discusses  methods of
seeding the fuel with chemicals to enhance the  conductivity  in the jet engine.
It is  uncertain  whether  fuel  seeding is  required  for  performance  of this
technology and will have to be determined in actual testing.

Our  method  has to  date  only  been  tested  by the  inventor  by  creating  a
plasma-type flame and reducing the perceptible  level of noise.  There can be no
assurance  that this method will  function in a jet engine,  which is inherently
more complex.  Further there may also be practical  limitations to  implementing
the  technology  due to the need to sense noise  waves and couple the  generated
canceling  wave in the  appropriate  section or  sections of a  multi-stage  jet
engine.

While it is not  practical  to eliminate  the noise of a jet engine,  even small
reductions of several  decibels may provide  benefits  sufficient to justify the
cost of this form of noise reduction if it can be successfully commercialized. A
decibel (dB) is a logarithmic  unit of measure for sound pressure levels. A 3 dB
change  typically  relates to a doubling  of the level.  Typical  conversational
speech at one foot is about 60  decibels,  the average  pain level is 130 dB and
jet

                                       8

<PAGE>


engine noise levels can approach 160 Db at close range. On takeoff typical Stage
2 aircraft projected noise at 97 dB and the newer Stage 3 aircraft project sound
at about 87 dB.

Theory suggests,  but we have no experimental or other support,  that our method
of sound  reduction may smooth the  turbulence  exiting a jet engine and thereby
possibly provide  improvement in operating  efficiency or performance that could
reduce operating costs.

Our development  strategy is to test this method of noise reduction in a reduced
scale jet engine. These tests would be designed to seek solutions to some of the
implementation  issues and measure the noise reduction,  if any. The tests would
also determine the level of seeding, if any, necessary for optimal reduction. It
may also be  possible  in these tests to  determine  if there is any  measurable
operating  performance  improvement.  We have  commenced  discussions  with  one
university  to  determine  if they can  perform  this  experimental  work  under
contract.  There can be no assurance  that we will be successful in this effort.
If  unsuccessful  we would then have to pursue  other  universities,  commercial
laboratories or seek to obtain the necessary laboratory equipment and scaled jet
engine to  conduct  our own  testing  and  measurements.  We  currently  have no
established timetable for the completion of this work.

Market Opportunities and Strategy

Plasma Antenna

We believe our plasma  antenna offers  distinct  advantages and can compete with
most metal antenna  applications,  although  there can be no assurance that this
will be the case.  The  plasma  antenna's  advantages  over  conventional  metal
elements are most obvious in military  applications where stealth and electronic
warfare are primary concerns.  Other important military factors are weight, size
and the ability to reconfigure  and reduce the number of antennas  required on a
vehicle. Potential military applications include:

     |X| Shipboard/submarine antenna replacements.

     |X| Unmanned air vehicle sensor antennas.

     |X| IFF ("identification friend or foe") land-based vehicle antennas.

     |X| Stealth aircraft antenna replacements.

     |X| Broad band jamming equipment including for spread-spectrum emitters.

     |X| ECM (electronic counter-measure) antennas.

     |X| Phased array element replacements.

     |X| EMI  (Electromagnetic   Interference)/ECI   (Electronic   Compatibility
         Interference) mitigation.

     |X| Detection and tracking of ballistic missiles.

     |X| High power waveguides

Military antenna  installations can be quite  sophisticated and just the antenna
portion of a  communications  or radar  installation  on a ship or submarine can
cost in the  millions of dollars.  We believe  that we have the  opportunity  to
replace certain  existing  military  antennas with stealth  antennas and also to
create new applications.

We believe, based primarily on discussion with technical  consultants,  that our
plasma antenna technology has commercial  applications in telemetry,  broad-band
communications,  ground penetrating radar, navigation, weather radar, wind shear
detection  and  collision  avoidance,  high-speed  data (for  example  Internet)
communication  and  spread  spectrum  communication.  A part of our  development
strategy  is to  identify  the most  promising  commercial  markets  and  target
development efforts to provide solutions to prospective customers.

We  are  focusing  our  development  and  marketing  strategy  initially  on the
following major activities:

     o   Establish and expand development strategic relationships.

     o   Seek industry and military financial support.

     o   Identify primary market opportunities.

     o   Develop prototype antenna targeted at selected opportunities.

     o   Identify prospective licensing partners.

                                       9

<PAGE>


We have invested resources to review the overall patent and propriety aspects of
our technology. We have filed four new U.S. patent applications.  We continue to
review other areas where patent  applications  may be appropriate.  We have also
applied to obtain  rights to certain  patents  developed by Dr. Ted Anderson (an
ASI  consultant)  while working with the Navy.  There can be no assurance we can
obtain rights to use these patents.

Our goal is to license this technology to companies engaged in producing antenna
systems.  We do not presently intend to produce or manufacture  communication or
antenna systems.

There can be no assurance  our plasma  antenna  technology  can be  successfully
developed or commercialized.

Plasma Sound Reduction

We believe that our plasma sound reduction  technology,  if successfully proven,
may have  applications in most jet and gas turbine engine  applications  whether
for aircraft,  industry or ships.  We may have the  opportunity  to make certain
non-conforming  jet  engines or aircraft  become  conforming  to existing  noise
regulations  thereby  increasing the value of older engines.  This could have an
impact on existing aircraft.

Our goal is to prove the  technology  and  thereafter  license the technology to
either  engine  producers  or others  engaged in the  business of  servicing  or
providing technology for jet engines. It is not our present intent to produce or
manufacture systems.

Competition and Alternatives

The market for communication technology is extremely competitive. Many companies
produce antenna products that are generally competitive to the technology we are
developing. These companies are larger and have substantially greater financial,
research  and  marketing  resources  than we do.  We may not be able to  compete
successfully in this market.  Antenna  products are normally sold as a part of a
communication or radar system.  Accordingly, an antenna must be selected by such
a  supplier  and  incorporated  into a  system  prior to the  system  sale to an
end-user  of the  technology.  Communication  and radar  systems  are  generally
supplied by large companies many of whom have their own antenna products or have
existing  relationships  with  antenna  product  suppliers.  Accordingly,  to be
successful,  we will have to  demonstrate  to such  customers the  advantages of
using a plasma antenna in existing  systems or the ability of the plasma antenna
to be a key element in a new  communication or radar system.  For these reasons,
our  strategy  is to  attempt  to  develop  strategic  relationships  within the
communications and radar industries,  although there can be no assurance that we
will succeed in doing so.

Our proposed antenna  solutions will compete with existing metal and other types
of antenna products.

While our original  patent has caused others to experiment  with plasma antennas
thus  creating  potential  competitors,  it has  also  resulted  in  independent
confirmation of many of the advantages of a plasma antenna.  The Plasma Research
Laboratory of the Research  School of Physical  Sciences and  Engineering at the
Australian  National  University  (ANU) in Australia has been conducting  plasma
antenna research as a result of Patriot's initial work. Several technical papers
have  been  produced  and at  least  one  patent  application  has  been  filed.
Similarly,  while  employed  by the  Naval  Undersea  Warfare  Center,  Dr.  Ted
Anderson,  an ASI  consultant,  performed  analytical and  mathematical  work on
plasma   antennas  and  filed   patents  on  certain   applications   of  plasma
technologies.

Although  there are no existing  suppliers of plasma  antennas to our knowledge,
there is no assurance  that there will not be direct  competitors in the future.
The work of ANU, and Dr. Anderson,  while working for the Navy, is indicative of
the ongoing interest and work being performed in this field, which was pioneered
by Mr. Norris' original patent. We believe, but there can be no assurance,  that
our patents  will be an  important  factor in  establishing  our position in the
marketplace.

The market for jet engine  noise  reduction  systems  both passive and active is
highly  competitive.  Many companies  produce noise  reduction  systems that are
competitive to the system we intend to develop.  These  organizations are larger
and  have  substantially  greater  resources  than we do.  We may not be able to
compete  successfully  in this  market.  In  addition,  these  companies  expend
significant funds on research and development.  NASA is also conducting research
on methods to reduce noise in jet engines.  They or others may have developed or
may succeed in developing  technology  and systems that are more  effective than
those  proposed by us. There can be no assurance that

                                       10

<PAGE>


we will be able to compete successfully with such competitors or that additional
competition will not have a material adverse effect on our business.

Government Regulation

The  transmission  of RF energy is highly  regulated  throughout the world.  Our
antenna solutions will have to meet the regulatory  requirements associated with
the systems in which they are  employed.  We do not believe the  generation of a
plasma in an enclosed  structure will face any new regulatory  hurdles but there
can be no assurance that this will be the case.  There is currently a high level
of concern  about the  possible  health  effects of RF and other  transmissions.
Although we do not believe that there are any special  risk  factors  associated
with plasma  technology,  this  atmosphere  of public  concern  could  create an
adverse marketing environment.

Jet engines and jet engine noise are regulated domestically and internationally.
Since our  technology is designed to reduce this noise we do not believe we will
be subject to any  regulations not presently part of the jet engine and aircraft
regulatory  scheme.  If we should require some form of seeding of fuel as a part
of our system, this may be subject to additional regulation.

Intellectual Property Rights

We  purchased  one issued U.S.  patent and in November  1999 we were  granted an
additional  U.S.  patent on our  plasma  antenna  technology.  We have  filed to
protect  the key claims of these  patents in Europe and  Australia.  Although we
believe  we will be able to  obtain  foreign  rights on these  two  issued  U.S.
patents in Canada,  Europe and  Australia  there can be no  assurance  that such
foreign  patents  can  be  obtained.   We  have  filed  four  additional  patent
applications  on the plasma antenna  technology and we are preparing  additional
patent   applications   and  continue  to  work  to  broaden  our  portfolio  of
intellectual property.

We purchased one U.S.  patent on our plasma sound  reduction  technology.  Broad
foreign  rights  have been  applied  for and we are  currently  pursuing  patent
applications in Canada, Europe, Brazil, China, Japan and the Russian Federation.
We may consider additional patents in the future.

We have an ongoing policy of filing patent  applications  to seek protection for
novel  features  of our  products  and  technologies.  Prior to the  filing  and
granting of patents,  our policy is to disclose key  features to patent  counsel
and maintain these features as trade secrets. There can be no assurance that any
additional patents on our technology will be granted.

In  addition  to  such  factors  as  innovation,   technological  expertise  and
experienced  personnel,  we  believe  that a  strong  patent  position  will  be
important to compete  effectively  through licensing in our proposed markets. We
are investing significant  management,  legal and financial resources toward our
technology  patents.  The new technology  industry is  characterized by frequent
litigation  regarding patent and other  intellectual  property  rights.  Others,
including academic  institutions and competitors,  may hold patents in competing
areas.  Patents  filed by the Navy and by ANU or by others may limit our ability
to license our plasma antenna  technology in certain  areas.  Although we do not
believe  any  existing   patents  would  inhibit  our  ability  to  license  our
technology,  there can be no assurance that others will not assert claims in the
future. There can be no assurance that such claims, with or without merit, would
not have a material  adverse  effect on our  financial  condition  or results of
operations.

The  validity of our  existing  patents has not been  adjudicated  by any court.
Competitors  may bring legal action to challenge the validity of our existing or
future  patents or may attempt to  circumvent  the  protection  provided by such
patents. There can be no assurance that either of such activities by competitors
would not be successful.  The failure to obtain patent protection or the loss of
patent  protection on our technologies or the  circumvention of our patents,  by
competitors  could  have a  material  adverse  effect on our  ability to compete
successfully.

We generally  take  advantage of the Patent  Convention  Treaty  procedures  for
patent protection in foreign  countries.  This procedure is more cost efficient,
but  results in a delay in the  application  and  issuance  of foreign  patents;
however,  any  resulting  foreign  patents,  if and when issued,  enjoy the same
priority date as U.S. counterparts.

Our policy is to enter into  nondisclosure  agreements  with each  employee  and
consultant  or  third  party  to  whom  any of our  proprietary  information  is
disclosed.  These agreements prohibit the disclosure of confidential information
to others,  both during and  subsequent  to  employment  or the  duration of the
working  relationship.  They also provide for

                                       11

<PAGE>


assignment of inventions to us. There can be no assurance,  however,  that these
agreements  will not be breached,  that we will have  adequate  remedies for any
breach  or that  our  trade  secrets  will  not  otherwise  become  known  or be
independently developed by competitors.

Research and Development

For the years ended  December  31,  2000,  1999 and 1998 we  invested  $422,107,
$303,946 and $-0-  respectively,  on research  and  development,  including  the
acquired technology. In 2000 we recognized $160,536 of revenue from one customer
for  sponsored   research  and  development.   Future  levels  of  research  and
development expenditures will vary depending on the timing of further technology
development and the  availability  of funds to carry on additional  research and
development on currently owned technologies or in other areas.

Employees

We have no  employees  other than our two  executive  officers  who provide only
part-time services to the Company. We employ technical  consultants or others on
a  contract  or  project  by project  basis.  We have not  experienced  any work
stoppages and are not a party to a collective bargaining agreement.


ITEM 2. DESCRIPTION OF PROPERTY

Our principal executive offices are located at 980 American Pacific Drive, Suite
#111,  Henderson,  Nevada 89014,  which is the principal  business office of our
President,  Jerry E. Polis, who has other business  operations at this location.
We share approximately  2,600 square feet with other businesses  affiliated with
Mr.  Polis.  Commencing in September  1999 we began paying a company  affiliated
with Mr. Polis an  aggregate  of $500 per month for office rent and  bookkeeping
and administrative  services.  We believe these terms are no less favorable than
what could be obtained from outside providers.


ITEM 3. LEGAL PROCEEDINGS

We are not involved in any threatened or pending legal proceedings.


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

No matter was submitted to a vote of security  holders during the fourth quarter
of the fiscal year  covered by this  report.  However,  since the one meeting of
shareholders  held  during the last three  years was held on August 16, 2000 and
has not been previously reported, the matters are described below.

On August 16, 2000 we held a special  meeting of our  shareholders  at which the
following proposals were approved:

1.   Election of Directors:

                           Affirmative Votes      Negative Votes     Abstention
                           -----------------------------------------------------
     Jerry E. Polis            1,923,787             1,600               -0-
     Phil Carlino              1,923,787             1,600               -0-
     Eric M. Polis             1,923,737             1,650               -0-


2.   To ratify prior amendments to the Company's  articles of incorporation  and
     all lawful  actions taken by the board of directors and officers  since the
     1976 stockholders meeting.

                           Affirmative Votes      Negative Votes     Abstention
                           -----------------------------------------------------
                               1,895,098             8,125               -0-


3.   To  approve  a  one-for-ten  (1-for-10)  reverse  split of the  issued  and
     outstanding shares of our common stock.

                           Affirmative Votes      Negative Votes     Abstention
                           -----------------------------------------------------
                               1,892,917             4,140               -0-

                                       12

<PAGE>


4.   To adopt  Amended and Restated  Articles of  Incorporation  to, among other
     things, change our name from "ASI" to "ASI Technology  Corporation," reduce
     the authorized  number of shares of common stock from 50,000,000  shares to
     10,000,000  shares,  and effect other changes to conform to current  Nevada
     corporation law.

                           Affirmative Votes      Negative Votes     Abstention
                           -----------------------------------------------------
                               1,895,399             2,750               -0-

5.   To approve  Amended  and  Restated  Bylaws that  conform to current  Nevada
     corporation law.

                           Affirmative Votes      Negative Votes     Abstention
                           -----------------------------------------------------
                               1,920,381             3,150               -0-

6.   To adopt  the ASI 2000  Equity  Incentive  Plan  authorized  and  reserving
     250,000 shares of common stock.

                           Affirmative Votes      Negative Votes     Abstention
                           -----------------------------------------------------
                               1,897,553             3,555               -0-


                                     PART II

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Market Information

There has been no public trading market for our securities  since  approximately
1982. Although we intend to take the necessary steps to allow the trading of our
shares of common stock and quotations on the National  Association of Securities
Dealers,  Inc. ("NASD") OTC Electronic Bulletin Board, there can be no assurance
of when or if this can be  successfully  accomplished or that any market for our
common stock will develop in the future.

We had 1,067  holders of record of our common stock at December 31, 2000,  which
we believe  approximates the number of beneficial  owners.  We have never paid a
cash dividend on our common stock and do not expect to pay cash dividends in the
foreseeable future.

                                       13

<PAGE>


Recent Sales of Unregistered Securities

No equity  securities  were sold during the three years ended  December 31, 2000
under an exemption from the Securities Act other than described in the following
paragraphs. All such sales were made under an exemption from either Section 4(2)
or Rule 506 of Regulation D under the Securities Act.

On October 29, 1999 we completed  the closing of a private  offering and sale of
1,500,000  shares of  common  stock at $0.50  per  share  for cash  proceeds  of
$750,000.

We sold the securities without an underwriter or cash commission. The securities
were offered and sold without  registration under the Securities Act of 1933, as
amended (the "Act"),  in reliance  upon the  exemption  provided by Section 4(2)
thereunder and/or Regulation D, Rule 506 and appropriate  legends were placed on
the shares of common stock.

In December  1999 we issued an  aggregate  of 30,000  shares of common  stock to
three technical  consultants for services  rendered valued at $0.50 per share or
$15,000.  The securities  were offered and sold without  registration  under the
Securities  Act of 1933, as amended (the "Act"),  in reliance upon the exemption
provided by Section 4(2) thereunder and  appropriate  legends were placed on the
shares of common stock.


ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.

Overview

We acquired two plasma technologies in August 1999 and December 2000, each in an
early stage of development. Since the August 1999 purchase of our plasma antenna
technology we have devoted most of our expenditures to develop and commercialize
the  technology.  At the end of  December  2000 we  acquired  additional  plasma
technology,  our jet engine noise reduction  technology.  Our principal business
activity is to:

     o   Develop for future licensing our patented plasma antenna technology for
         military and commercial applications.

     o   Test,  validate  and  develop  our  patented  plasma jet  engine  noise
         reduction  technology  for  licensing  for  use in the  commercial  and
         military  markets  for  aircraft  engines  and  industrial  gas turbine
         engines.

At the  beginning  of 1999 we  commenced  our  strategy  seeking to acquire  and
develop  new  technologies  for  licensing.  Because  no  significant  operating
revenues  have  occurred and because we have  devoted most of our efforts  since
1999 to developing new  technology,  we are considered to be in the  development
stage.  Our financial  statements are presented on the basis that we are able to
continue as a going concern,  which  contemplates  the realization of assets and
the  satisfaction of liabilities in the normal course of business.  We have only
recently commenced  operations and our continued existence is dependent upon our
ability to obtain  working  capital and financing to meet our  obligations  on a
timely  basis  and  to  fund  the  development  and   commercialization  of  our
technologies.   The  accompanying   financial  statements  do  not  include  any
adjustments  that would be necessary  should we be unable to continue as a going
concern  and  therefore  be required  to realize  our assets and  discharge  our
liabilities in other than the normal course of business and at amounts different
from those reflected in the accompanying financial statements.

Results of Operations - 2000 vs. 1999

Revenues

Our revenues for 2000 consisted of $160,536 of development  contract revenue. We
had no revenues in 1999.

The  development  revenue  of  $160,536  consisted  of two  purchase  orders for
development  from one customer,  General  Dynamics'  Electric Boat  Corporation.
Phase I of this order was  granted in January  2000 for  $89,710  and  prototype
development  was  completed  in  August  2000.  Phase  II to  generate  a second
generation  prototype was awarded in August 2000 for $78,696 and at December 31,
2000 a total of  $70,826  had been  recognized  as revenue  with the  balance of
$7,870  recorded as deferred  revenue since the entire  purchase  order had been
billed as of December 31, 2000 and was  collected in January 2001. We anticipate
that the final  demonstration  and work on this purchase order will be completed
in the first  quarter  of 2001 and all  significant  costs  associated  with the
purchase order had been incurred, paid or accrued at December 31, 2000.

                                       14

<PAGE>


Although we have applied for additional  government and industry  sponsored work
for 2001, and will as part of our strategy  continue to seek such support in the
future,  there can be no assurance  of any  additional  development  revenues in
future periods.

Research and Development

Research and development costs in 2000 totaled  $422,107,  which was an increase
of $118,161 over the $303,946 incurred in 1999. We only commenced development of
our plasma antenna technology in August of 1999. As a result,  1999 expenditures
only reflect five months of work with limited work performed in the early months
of the period.

Research and development costs in 2000 included $132,000 of technical consultant
costs and $60,261 paid to the  University of Tennessee for  prototypes  and work
under the Electric Boat Corporation arrangement. Our 1999 costs included $26,950
of  technical  consultant  costs  including  $10,000  related to the issuance of
20,000 shares of our common stock to two consultants for services.

Also included in research and  development  costs for 2000 and 1999 are $200,000
and $250,000, respectively, related to purchases of technology in an early stage
of development  that are expected to eventually lead to new products or systems,
although  there can be no assurance that this will be the case. The amounts paid
for technology were expensed upon acquisition because technological  feasibility
had not been  established and no known future  alternative uses exist. The value
assigned to purchased  technology  represents  the amounts paid as there were no
material   identifiable  assets  requiring  an  allocation  of  costs  based  on
discounted cash flows. Management believes the technology is unique and does not
have an  estimate  of the cost of  developing  the  technology  to the  point of
commercial viability or how long such development may take.

We have no agreements to purchase  additional  technology  and have no immediate
plans to purchase additional technology.

Subsequent  patent  costs  related  to the  acquired  technology  have also been
expensed as incurred  because the  technology  being  developed  has not reached
technological  feasibility  and requires  further  development,  refinement  and
testing.

Research and  development  costs will vary  significantly  from year to year and
quarter to quarter.  Our technical  consultants are on month to month agreements
and we expect  future  payments  will vary  depending on  elections  made on the
amount of Company funded  research and  development and depending on the amount,
if any, of future awarded sponsored  development.  Future expenditures will also
depend  on  the  availability  of  financial  resources  to  fund  research  and
development.

Marketing and Promotion Costs

Marketing and promotion costs in 2000 were $67,585  compared to $30,238 in 1999.
These costs  relate  primarily  to travel and  personnel  and  consulting  costs
related to visits with  prospective  development  sponsors.  In 2000 we expended
$46,737 in travel costs and $20,000 of contributed services of officers. A total
of $40,000 of services was contributed in 2000 with $20,000 allocated to general
and   administrative   costs.   These   costs  are   reflected   as   additional
paid-in-capital.  Marketing  and  promotion  costs in 1999  included  $15,238 of
travel costs, $10,000 of contributed services and $5,000 related to the issuance
of 10,000 shares of our common stock for services. Marketing and promotion costs
in 1999 included only five months of activity on new technology.

Marketing and promotion costs will vary from year to year and quarter to quarter
depending on elections  regarding the use of personnel and  consultants  and the
elections made on travel to visit prospective sponsors.

General and Administrative Costs

General and administrative  costs in 2000 were $62,029, an increase from $20,441
in 1999.  These  costs in 2000  consisted  primarily  of $20,000 in  contributed
services,  $13,614 of office  costs,  $17,554 of legal fees,  $6,000 of rent and
administrative expenses paid to a company affiliated with our President. General
and  administrative  costs in 1999

                                       15

<PAGE>


included $10,000 in contributed  services,  $3,249 of office costs and $2,831 of
legal fees.  The increase in 2000 reflects  operations  for twelve months versus
limited operations in the first seven months in 1999.

General  and  administrative  costs  will vary from year to year and  quarter to
quarter  depending on elections  regarding changes in personnel and consultants,
legal costs and other expenses.

Net Loss

We had a net loss of  $372,743  in 2000  compared  to a net loss of  $349,212 in
1999. The net loss in 1999 included  $1,608 of interest  expense on a short-term
bank loan used to help  acquire  the  plasma  antenna  technology.  There was no
interest  expense in 2000.  Interest  income in 2000 was  $18,442,  which was an
increase  from  interest  income  of $7,021  in 1999  with the  increase  due to
carrying a higher money market account balance.

We anticipate  continued losses until we are able to  commercialize  and license
our  technologies.  The level of future losses will be dependent on our expenses
and  future  revenues,  if  any,  and  elections  made  regarding  research  and
development, marketing and administrative costs.

The loss for the period from  inception  of the  development  stage  (January 1,
1999) to December 31, 2000 was $721,955 and consisted of the losses for 1999 and
2000.

Results of Operations - 1999 vs. 1998

Revenues

Our revenues for 1998 totaled $1,960 which  consisted of final royalty  payments
related to assets sold in a prior year. There were no revenues in 1999.

Research and Development

Research and development costs in 1999 totaled $303,946.  There were no research
and  development  costs in 1998 as we were  inactive.  Our 1999  costs  included
$26,950 of technical consultant costs, including $10,000 related to the issuance
of 20,000 shares of our common stock for services. We only commenced development
of our plasma antenna technology in August of 1999 so 1999 expenditures  reflect
only five months of work.

In 1999 we expensed  $250,000 relating to the purchase of technology in an early
stage of  development  that is expected to  eventually  lead to new  products or
systems,  although  there can be no  assurance  that this will be the case.  The
amount paid for technology was expensed upon acquisition  because  technological
feasibility had not been established and no known future alternative uses exist.
The value assigned to purchased  technology  represents the amount paid as there
were no material  identifiable  tangible assets requiring an allocation of costs
based on discounted cash flows. There was no comparable item in 1998. Management
believes the  technology  is unique and does not have an estimate of the cost of
developing the technology to the point of commercial  viability or how long such
development may take.

Marketing and Promotion Costs

Marketing and promotion costs in 1999 aggregated  $30,238  including  $15,238 of
travel costs, $10,000 of contributed services and $5,000 related to the issuance
of 10,000 shares of our common stock for services. Marketing and promotion costs
in 1999  included  only  five  months of  activity  on new  technology.  We were
inactive in 1998 and had no marketing and promotion costs.

General and Administrative Costs

General and  administrative  costs in 1999 were $20,441 and included  $10,000 in
contributed  services,  $3,249  of  office  costs  and  $2,831  of  legal  fees.
Comparable  costs in 1998 were $1,586.  The increase in 1999 reflects  increased
operations after the acquisition of our first technology.

Net Loss

We had a net loss of $349,212 in 1999  compared to net income of $3,001 in 1998.
The net loss in 1999  included  $1,608 of  interest  expense  on a bank loan and
$7,021 of interest  income.  There was no interest  expense in 1998 and interest
income of $2,627. We were basically  inactive until August 1999,  accounting for
the large increase in the loss in 1999 versus 1998.

                                       16

<PAGE>


Liquidity and Capital Resources

In October 1999 we completed a private  placement of 1,500,000  shares of common
stock at $0.50 per share for gross  proceeds of $750,000 and net proceeds  after
legal fees of $735,000.  Prior to this  transaction and the August 1999 purchase
of our plasma antenna technology, we had no significant assets or operations.

As of  December  31,  2000  and  1999 we had  cash  of  $153,968  and  $422,551,
respectively.  Net  cash  used in  operating  activities  was  $172,268  in 2000
consisting  primarily of a $372,743 net loss and a $80,304  increase in accounts
receivable.  These  amounts  were  offset by $40,000 in  non-cash  services  and
$200,000 in acquired technology expensed during the year. We expended $96,315 on
investing  activities,  primarily  the  purchase of our plasma  sound  reduction
technology. The net decrease in cash in 2000 was $268,583.

Net cash used in operating  activities was $72,531 in 1999 consisting  primarily
of a $349,212 net loss.  This amount was offset by $20,000 in non-cash  services
and  $250,000  in  acquired  technology  expensed  during the year.  We expended
$246,314 on investing  activities,  primarily the purchase of our plasma antenna
technology.  Cash flows  provided by  investing  activities  was $735,000 of net
proceeds from our private placement of common stock. The net increase in cash in
1999 was $416,155.

Our  principal  source of liquidity  at December  31, 2000  consisted of cash of
$153,968  and accounts  receivable  of $80,304,  which was  collected in January
2001. We have no other unused sources of liquidity at this time.

At December 31, 2000 we had no outstanding commitments for capital expenditures.
We are  committed  to  additional  payments of $100,000  for the purchase of our
plasma sound reduction technology.

We do not believe  inflation had a significant  impact on our operations  during
1999 or 2000 or that it will have a significant  impact on operations during the
next twelve months.

Based on current expectations and business  conditions,  we expect that our cash
resources  are  sufficient  to meet our cash  requirements  for the next  twelve
months.  This will require  reductions in expenditures  for outside  consultants
should  we  not  obtain  any  additional  development  support.  Management  has
significant   flexibility   to  adjust  the  level  of  research  and  marketing
expenditures  based on the  availability  of  resources.  However  reductions in
research and development could delay  development  progress and adversely affect
our ability to generate  future  revenues from our  technologies.  Our business,
expansion or contraction  thereof, is subject to many factors,  some outside our
control or that we are unable to anticipate. Business opportunities may arise or
we may  elect to  increase  our  investments  in  research  and  development  or
marketing in the future. Accordingly, there can be no assurance that our current
expectations  regarding the  sufficiency  of currently  available cash resources
will prove to be accurate.

Should additional  funding be required in the future,  there can be no assurance
it will be available to us or on what terms.  Potential sources of funds include
debt financing or additional  equity  offerings.  Any equity  issuances could be
dilutive to existing shareholders and such dilution could be material.

New Accounting Pronouncements and Issues

In December 1999, the staff of the  Securities  and Exchange  Commission  issued
Staff Accounting Bulletin No. 101, "Revenue Recognition in Financial Statements"
(SAB  101).  SAB 101 as amended to date (a)  summarizes  certain of the  staff's
views  in  applying   generally  accepted   accounting   principles  to  revenue
recognition in financial  statements and (b) requires companies to analyze their
revenue  recognition  policies for compliance with generally accepted accounting
principles  summarized  in SAB 101 no later  than the  fourth  quarter of fiscal
years  beginning after December 15, 1999 or for our 2000 year. We believe we are
recognizing revenues within the framework of SAB 101.

In  March  2000,   the  Financial   Accounting   Standards   Board  issued  FASB
Interpretation  No. 44,  "Accounting  for Certain  Transactions  Involving Stock
Compensation, an Interpretation of APB Opinion No. 25", which clarifies guidance
for  certain  issues  that  arose in the  application  of APB  Opinion  No.  25,
"Accounting for Stock Issued to Employees".  FASB  Interpretation  No. 44, which
was effective July 1, 2000, is not expected to have any impact on our results of
operations.

Tax Loss Carryforwards

                                       17

<PAGE>


As of  December  31,  2000,  we had  approximately  $250,000 of federal tax loss
carryforwards.  These  losses  create a deferred tax asset.  We have  recorded a
valuation allowance to reduce the net deferred tax asset to zero because, in our
assessment,  it is more likely than not that the  deferred tax asset will not be
realized.  There  may  also  be  limitations  on the  utilization  of  tax  loss
carryforwards to offset any future taxes.

Business Risks

This report  contains a number of  forward-looking  statements  that reflect our
current  views with respect to future events and  financial  performance.  These
forward-looking  statements  are  subject  to certain  risks and  uncertainties,
including  those  discussed  below,  that could cause  actual  results to differ
materially from historical  results or those  anticipated.  In this report,  the
words  "anticipates,"   "believes,"   "expects,"  "intends,"  "future,"  "goal,"
"objective" and similar expressions identify forward-looking statements. Readers
are cautioned to consider the specific risk factors  described  below and not to
place undue reliance on the forward-looking  statements  contained herein, which
speak only as of the date hereof.  We undertake no obligation to publicly revise
these  forward-looking  statements,  to reflect events or circumstances that may
arise after the date hereof.

         We are a  start-up  company  and our lack of  operating  history  makes
evaluating our business  difficult.  Until we acquired the plasma  technology in
August 1999 we were inactive.  As a result,  we have limited relevant  operating
history with which you may evaluate  our  business.  Our business is in the very
early stage of  development,  and our proposed  operations are subject to all of
the risks inherent in a start-up or early stage business  enterprise,  including
the likelihood of continued operating losses. The likelihood of our success must
be considered in light of the problems,  expenses,  difficulties,  complications
and delays  frequently  encountered in connection  with the growth of a start-up
business,  the  development  of new  technologies  and  products and channels of
licensing,  and current and future  development in several key technical fields,
as well as the competitive and regulatory environments in which we will operate.
You must consider the numerous  risks and  uncertainties  an early stage company
like  ours  faces in  attempting  to  develop  and  establish  a market  for new
technology. These risks include our ability to:

     o   Develop our technology to commercial viability;

     o   Establish new development and strategic relationships;

     o   Create a commercialization strategy, and

     o   Respond  to a highly  competitive  market for  communication  and noise
         reduction technology.

     If we are unsuccessful in addressing these risks, we will in all likelihood
be unable to generate  future  revenues.  There can be no assurance that we will
achieve profitability in the future, or that profitability,  if achieved, can be
sustained.

     Our  technologies  are in  early  stages  of  development  and  may  not be
successful.  Our business  plan  contemplates  that  virtually all of our future
revenues,  if any, will be  attributable to our plasma  technologies,  which are
both  still  in the  early  stage  of  development.  We  have  not  demonstrated
commercial prototypes incorporating our technology and there can be no assurance
that we will be successful in doing so. In order to attract commercial interest,
we believe we must develop  prototypes for both military and private sector user
applications in order to demonstrate  commercial  viability of our technologies.
Our  objective  is to  license  our  technologies  to  companies  that then must
incorporate our technologies into  communication  products or jet engines (we do
not intend to manufacture  products  ourselves).  Even if one or more prototypes
can be developed successfully, we cannot provide any assurance that commercially
viable  technology or products  incorporating  our  technology can be completed,
developed,  manufactured  or  sold  due  to the  inherent  risks  of  technology
development,  limitations on financing,  competition,  obsolescence, loss of key
personnel and other factors.  We have generated limited revenues from our plasma
antenna  technology,  no revenues from our plasma sound technology and we cannot
assure that there will be any  revenues in the future.  The  development  of new
technology  is also  subject  to  significant  delays  and  cost  overruns  from
unforeseen technical hurdles and other factors. In addition, as discussed below,
we will rely on outside  consultants to provide us with the necessary  expertise
to  develop  our  technology   rather  than  an  in-house  staff  of  technology
developers,  thereby  possibly  increasing  the costs  and  risks of  technology
development.

     We expect to sustain losses during development of our technology. We expect
to incur research,  development and marketing  expenditures without the prospect
of  significant  revenues  for  the  foreseeable  future.  We may not be able to
generate  revenue  from our  technology  in the  future.  Even if we do generate
revenues,  we cannot

                                       18

<PAGE>


assure that we will be able to generate  sufficient  revenue to offset operating
costs or to achieve or sustain profitability.

     We may not be able to  obtain  sufficient  funds  to  continue  or grow our
business.  Based on, among other things,  our proposed  plan of  operations  and
certain assumptions regarding our expected expenditures, we believe we will have
sufficient  resources to fund our operations  during the next twelve months.  If
our plans change,  our assumptions  change or prove to be inaccurate,  we may be
required during the next twelve months to seek additional  financing to fund the
costs  of  operations.  We have  no  current  commitments  or  arrangements  for
additional  financing and there can be no assurance  that  additional  financing
will be available on acceptable  terms,  or at all. The failure to have adequate
financial  resources  could  require  that  we  terminate   development  of  our
technology and our operations.  Consequently,  investors could lose their entire
investment  if we are  unable  to  generate  positive  cash  flow or  raise  the
additional  capital  necessary  to  fund  our  operations.  Even  if  additional
financing is available to us, using equity or convertible  debt  securities will
result in a reduction of the percentage  ownership of our  stockholders and they
may experience additional dilution of their investment.

     If we fail to establish and maintain consulting and strategic relationships
our ability to develop our  technology  will suffer.  We currently have month to
month  consulting  agreements  with Elwood G. Norris,  Dr. Ted Anderson,  Delmar
Kintner  and Dr.  Igor  Alexeff.  These  individuals  have been  involved in the
development  and  marketing  of our  technology.  We do not have  any  technical
employees or staff and will depend on these or other consulting relationships to
continue the development of our technology,  implement  intellectual  protection
strategies,  identify and manage the  execution of  technical  development,  and
market and license  our  technology.  Each of these  individuals,  however,  may
terminate  their  relationship  with us at any time.  There can be no assurance,
therefore,  that  any  of  these  individuals  will  continue  their  consulting
relationships  with us for the time  necessary  to complete  development  of our
technology.  Although  we believe  that there are other  consultants  capable of
working on our technology, the loss or unavailability of these individuals could
result in delays or added costs of development, materially impede development or
adversely affect our ability to continue in business.

     We also believe that our success  will depend,  in part,  on our ability to
establish additional consulting or strategic  relationships to develop,  produce
and  market our  technology.  Our  success  will also  depend on our  ability to
develop and maintain  strategic  development  and marketing  relationships  with
antenna  producers,  distributors,  end-users  and jet engine  manufacturers  or
entities  engaged in  supplying or servicing  the jet engine  market.  If we are
unable to develop  such  relationships  our chances for future  success  will be
substantially diminished.

     Our  ability  to  protect  our  intellectual  property  and  technology  is
uncertain.  Our success depends, and will continue to depend, to a great extent,
on our ability to maintain patent  protection for our technology and to preserve
our trade secrets and to operate without infringing the property rights of third
parties.  We cannot  guarantee  that  existing  or  pending  patents  will be of
sufficient  scope or  strength  to give us  competitive  advantages  or that any
patents that may be issued to us will not be challenged or invalidated.  We have
not performed any analysis of patents of others that may limit our ability to do
business.  We are aware of other parties that are currently  conducting research
in the area of gas  plasma  antennas  and they have  filed at least one  patent.
Further,  we have not  obtained any foreign  patents to date  although we may be
granted  foreign  patents  in the  future.  Consequently,  we may not be able to
protect our technology or products that are sold outside of the United States.

     Despite our efforts to protect our proprietary rights, unauthorized parties
may attempt to copy aspects of our technology or proposed  products or to obtain
and use  information  that we  consider  proprietary.  The  available  means  of
protecting our  proprietary  rights may not be adequate and our  competitors may
independently  develop  similar  technology,  duplicate  our  products or design
around  patents  issued  to us or our  other  intellectual  property.  We cannot
guarantee our intellectual property will provide us meaningful protection or any
commercial advantage.

     Defending against intellectual property claims could be expensive and could
disrupt our business.  The high technology industry is characterized by vigorous
protection  and pursuit of  intellectual  property  rights that have resulted in
significant and often protracted and expensive litigation. There is currently no
pending  intellectual  property  litigation  against  us. We  cannot  guarantee,
however,  that our  technologies  or products do not and will not  infringe  the
patents or  proprietary  rights of third  parties.  The risk of such  claims may
increase as the number of products and competitors in our industry segment grows
and the functionality of products in different industry segments  overlaps.  Any
such claims,  with or without merit, could be  time-consuming,  result in costly
litigation,  cause  product  shipment  delays,  preclude  or hinder new  product
development  or require us to enter into royalty or licensing

                                       19

<PAGE>


agreements.  Such  agreements,  if  required,  may  not be  available  on  terms
acceptable to us or at all. A successful challenge to our plasma antenna patents
or our plasma sound reduction  patent would have a materially  adverse effect on
our  business  prospects.  We are  required  to  pay  certain  royalties  to the
companies that sold us our  technology.  Any dispute that may arise between such
company and us could adversely affect our business.

     Competition and obsolescence could preclude us from realizing revenues. The
market for  communication  and jet engine  technology is extremely  competitive.
Many companies  produce antenna  products and noise  reduction  systems that are
competitive to the products or systems we intend to develop. These companies are
larger and have  substantially  greater resources than we do. We may not be able
to compete  successfully in this market.  In addition,  these  companies  expend
significant funds on research and development. They or others may have developed
or may succeed in developing  technology  and products  that are more  effective
than those  proposed by us.  There can be no  assurance  that we will be able to
compete  successfully with such competitors or that additional  competition will
not have a material adverse effect on our business.

     The  communications  market and jet engine markets are highly regulated and
we may be  subject  to  environmental  regulations.  The  transmission  of radio
frequency  signals  and jet engine  noise  emissions  are highly  regulated  and
controlled in most major markets throughout the world.  Communications equipment
and jet engine equipment,  including our proposed products, must be manufactured
and tested to meet strict  standards and often must be certified for use.  These
factors  increase the time and risk of  introducing  new  technology.  We or our
future  licensees may not be able to obtain  timely  regulatory  approvals.  The
failure to obtain any necessary  approvals would adversely  impact our business.
Our plasma  antenna  technology  was at one time  classified  secret by the U.S.
government.  There  can  be  no  assurance  that  future  improvements,   patent
applications or embodiments of the technology will not be classified  secret and
limit the market available to us to approved government entities.

     Federal,  state  and  local  regulations  impose  various  controls  on the
storage, handling, discharge and disposal of certain substances that may be used
in anticipated antenna manufacturing  processes. We intend to conform and expect
any contractors or licensees to conform to governmental  regulations  applicable
to operations and  facilities,  including those related to  environmental,  land
use, public utility utilization and fire code matters. There can be no assurance
that such  governmental  regulations  will not  impose  the need for  additional
capital  equipment  or other  process  requirements  or restrict  our ability to
continue or expand our operations.

     We may be subject to product  liability  and recall  claims  exceeding  any
future insurance coverage.  Although we intend to rely on strategic partners for
the  manufacture  and  sale  of  antenna  and jet  engine  products  or  systems
incorporating our technology,  we may become subject to product liability claims
and lawsuits from time to time. We face risk of product  liability claims in the
event that the use of such products results in personal injury. We also face the
possibility  that  defects in the design or  manufacture  of products or systems
might  necessitate  a  recall.  There  can be no  assurance  that  we  will  not
experience  losses due to product  liability,  claims or recalls in the  future.
There  can  be no  assurance  that  insurance  coverage  will  be  available  on
acceptable  terms or at all, or that any insurance  coverage will be adequate to
cover such losses. A product liability or other judgment against us in excess of
future  insurance  coverage,  if any is  obtained,  or a  product  recall  could
adversely affect our business.

     Our  officers,  directors  and  consultants  devote only  part-time  to our
business  resulting  in  possible   conflicts.   Our  officers,   directors  and
consultants  devote  only  part-time  services  to our  company  and have  other
employment  and  business  interests  to which they  devote  attention  and will
continue to do so, resulting in potential conflicts of interest. There can be no
assurance these conflicts or the unavailability of full-time management will not
adversely impact our operations and chances for success.

     We may  issue  additional  shares of  authorized  common  stock and  future
preferred stock. Our Articles of Incorporation authorize up to 11,000,000 shares
of  stock,  par  value of  $0.02  per  share,  of which  10,000,000  shares  are
designated common stock and 1,000,000 shares are designated preferred stock. The
Board of Directors  has the power without  prior  stockholder  approval to issue
additional shares of previously  authorized and unissued common stock and one or
more  series  of  preferred  stock  with  such  rates of  dividends,  redemption
provisions,  liquidation preferences,  voting rights,  conversion privileges and
any other  characteristics  as the Board may deem  necessary.  This power  would
include the right to issue  preferred  stock with  rights to receive  dividends,
liquidating  distributions and other benefits that may be superior to the rights
of holders of common stock.  If any  subsequent  issuance of preferred  stock is
approved, such

                                       20

<PAGE>


preferred stock could adversely affect the holders of outstanding  common stock.
In  addition,  the  authority  to issue  additional  shares of common  stock and
preferred  stock could  discourage,  delay or prevent a takeover of us and could
have a depressive effect on the market price for our securities.

     There is no public market for our common stock.  There is no present active
public  market for our common stock.  Although we intend to pursue  developing a
trading market in the future, there is no assurance we can be successful.  If we
establish a trading  market there is no assurance  that there will be any market
liquidity or that we can maintain a trading market in the future.


Item 7. Financial Statements

Our financial statements required to be included in this Item 7 are set forth in
a separate  section of this report and commence  immediately  following page 25.
The financial statements include for this filing two years of balance sheets and
three years of statements of operations, cash flows and stockholders' equity.

Item  8.  Changes  In and  Disagreements  With  Accountants  on  Accounting  and
Financial Disclosure

Prior to engaging  McGladrey & Pullen,  LLP in  December  2000,  during the last
three  years the  Company has had no  independent  accountant  and there were no
disagreements with accountants or reportable events under this item.


                                    PART III

Item 9. Directors, Executive Officers, Promoters and Control Persons; Compliance
with Section 16(a) of the Exchange Act

Directors and Officers

The  following  table sets forth  information  with respect to each director and
executive officer of ASI as of March 15, 2001:

         Name                      Age       Position
         Jerry E. Polis            69        President and Director since 1973
         Phil Carlino              74        Director since 1973
         Eric M. Polis             30        Secretary, Treasurer and Director
                                             since August 2000
         Dawayne R. Jacobs         58        Director since August 2000

There is no arrangement  between any of the directors or executive  officers and
any other person or persons,  pursuant to which he was or is to be selected as a
director or  executive  officer.  Jerry E. Polis is the father of Eric M. Polis.
There is no other blood relationship between or among the directors or executive
officers of ASI.

Each director  serves until the next annual meeting or until their  successor is
elected or appointed.

     Jerry E. Polis has been President and a director since 1973.  Since 1963 he
     has been self-employed primarily in real estate investment,  and since 1964
     he has  owned  and  operated  Polis  Realty.  From  1968 to the sale of his
     ownership  in January  1997,  he was active as a co-owner  of the Taco Bell
     franchises for the State of Nevada  (operated under privately owned Las Cal
     Corporation).  In 1994 he co-founded Commercial Bank of Nevada, an unlisted
     publicly owned bank located in Las Vegas,  Nevada, which was sold through a
     merger to a NYSE bank group in June 1998.  He was a director of  Commercial
     Bank from 1994 and Chairman  from May 1996 until its sale.  Mr. Polis was a
     director of ValueStar Corporation, a publicly traded corporation, from July
     1995 to November 2000. Mr. Polis graduated from Penn State  University with
     a B.A. Degree in Commerce in 1953.

     Phil Carlino has been a Director  since 1973 and until August 2000 serviced
     as  Treasurer.  Since  1963 he has  served as  President  of  Fremont  Coin
     Company, a wholesale coin business in Las Vegas,  Nevada; since 1974 he has
     been President of Carlino & Carlino,  an advertising agency, and since 1958
     he has served as President of Carlino Silver Company,  which buys and sells
     gold and silver bullion.  Mr. Carlino is also active in Nevada state health
     agency charities.

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<PAGE>


     Eric M. Polis has been  Secretary of the Company  since July 2000.  He is a
     licensed  real  estate  agent in Nevada  and since  1993 has been  property
     manager for Polis  Realty.  He  obtained a B.S. in Business  Administration
     from the University of Arizona in 1993.

     Dawayne R. Jacobs  founded  Jacobs  Marketing  Inc., a general  merchandise
     manufacturing  representative firm located in Plymouth,  Minnesota in 1982.
     He has served as its  President  and CEO since  1982.  He also  founded The
     Accessory  Group,  Henderson,  Nevada in 1995, a manufacturer  and national
     distributor  of  proprietary  products,  and serves as its Chief  Executive
     Officer. In 1993 he founded International Rainwear Inc., Henderson, Nevada,
     a national distributor of rainwear that was sold in 1997.

Other Significant Consultants

We have  utilized  the  following  consultants  who are key  consultants  to our
business:

     Elwood G.  Norris is a director  and chief  executive  officer of  American
     Technology Corporation. He was formerly a director and chairman of Patriot.
     He is an  inventor  of  the  plasma  antenna  and  plasma  sound  reduction
     technologies and has developed more than 35 U.S. patented technologies. His
     inventions  include  a  transcutaneous  Doppler,  a concept  evolving  into
     today's Sonogram devices for imaging the human body. He invented HyperSonic
     sound, a method of producing sound  in-the-air  without a loudspeaker.  His
     innovative  products  have  received  awards  including  the 1997  Discover
     Magazine  Award for  technical  innovation,  twice earning a Product of the
     Year award from Popular Science,  a Business Week Product of the Year award
     and an Eddy Award from MacUser magazine.

     Dr. Igor  Alexeff is past  President  of the  Nuclear  and Plasma  Sciences
     Society of the Institute of Electrical  and Electronic  Engineers  ("IEEE")
     and a past  chairman  of the  Plasma  Science  and  Applications  Committee
     ("PSAC").  He is a  Professor  Emeritus  at  the  University  of  Tennessee
     Electrical and Computer Engineering  department.  He is a plasma scientist,
     inventor,  publisher and researcher and has led the prototyping work on our
     plasma antennas.

     Dr. Ted Anderson has a Ph.D in physics  from New York  University  with his
     education emphasizing electrodynamics,  optoelectronics, atomic physics and
     fluid  dynamics.  He is  currently  a  professor  at Union  College and the
     Rensselaer  Polytechnic  Institute.  Dr. Anderson has  significant  antenna
     experience from his work with the Naval Undersea  Warfare Center and Norden
     Systems. He has developed many of our mathematical models and has published
     on plasma antenna applications.

     Delmar R. Kintner is Vice  President of Corporate  Development  of Emerging
     Concepts,  Inc. He obtained a Masters Degree in Electrical Engineering from
     George  Washington  University in 1967. He has over 20 years  experience in
     strategic   corporate   development  with  specific  emphasis  on  military
     projects.  He has  participated  in a number  of  engineering  studies  for
     branches  of the  military  including  Air Force  and Navy SBIR  contracts,
     studies for NAVSEA and NraD.  He is  experienced  in  military  antenna and
     communications  as well as ECM  (electronic  counter  measures),  radar and
     stealth  technologies.  Mr.  Kintner  assisted  Patriot in its  initial two
     military projects.

These  consultants  have been engaged pursuant to written  agreements,  those of
which had an original  term,  such term has expired and the  engagement of these
consultants is effectively on a month to month basis.

Conflicts of Interest

Certain  conflicts of interest now exist and will  continue to exist  between us
and certain of our officers, directors and consultants due to the fact that they
have other employment or business  interests to which they devote some attention
and they are expected to continue to do so. We have not established  policies or
procedures  for the  resolution  of current or  potential  conflicts of interest
between us and management,  consultants or affiliated entities.  There can be no
assurance  that members of management  will resolve all conflicts of interest in
our favor.  Our officers and directors  are  accountable  to us as  fiduciaries,
which means that they are legally obligated to exercise good faith and integrity
in handling  our  affairs.  Failure by them to conduct our  business in our best
interests may result in liability to them.

                                       22

<PAGE>


It is  conceivable  that our areas of interest  could  overlap or conflict  with
other business  interests of our management or our consultants.  We believe that
the our areas of focus,  products  and  technology  directions  are  unique  and
distinct from other  businesses in which our management and  consultants  may be
involved  such that no conflict  in business  lines or  loyalties  will  result.
Because of this  unlikelihood,  no steps  have been  taken to  resolve  possible
conflicts,  and any such conflicts,  should they arise, will be addressed at the
appropriate time.

Section 16(a) Beneficial Ownership Reporting Compliance

During the prior three years none of the officers or  directors  have filed Form
3s, Form 4s or Form 5s. On or prior to the date of this report the  officers and
directors have filed initial reports on Form 3.

During the last fiscal year,  no director or officer would have been required to
file a Form 4  reflecting  any  changes in security  ownership  as there were no
reportable acquisition or dispositions during the year.

Other than Jerry E. Polis,  we are not aware of any person  beneficially  owning
more than 10% of the Company's common stock.

Item 10. Executive Compensation

<TABLE>
There is shown  below  information  concerning  the  compensation  of our  chief
executive  officer (the "Named Executive  Officer") for the years ended December
31, 2000, 1999 and 1998. No other executive  officer's salary and bonus exceeded
$100,000 during the fiscal year ended December 31, 2000.

<CAPTION>
                                         Summary Compensation Table
                                                                                 Long Term
                                             Annual Compensation                Compensation
                              ----------------------------------------------    -------------
                                                                             Securities Underlying
Name and                      Fiscal                            Other Annual       Options
Principal Position             Year       Salary       Bonus    Compensation    (# of Shares)
------------------             ----       ------       -----    ------------    -------------
<S>                            <C>        <C>          <C>        <C>                <C>
Jerry E. Polis, President      2000       $-0- (1)     $-0-       $200 (1)           -0-
                               1999       $-0- (1)     $-0-       $200 (1)           -0-
                               1998       $-0-         $-0-       $ -0-              -0-


<FN>
(1)  Director  fees.  Mr. Polis  received no  compensation  as an officer of the
     corporation  for any  period.  The  Company  recorded  $10,000  in 1999 and
     $20,000 in 2000 as contributed services for Mr. Polis.
</FN>
</TABLE>

On August 16, 2000 the  shareholders  approved  the 2000 Equity  Incentive  Plan
reserving an aggregate of 250,000  shares of common stock for issuance under the
plan.  At December 31, 2000 there were no options  outstanding  pursuant to this
plan or any other arrangements.

Other than the 2000 Equity Incentive Plan, we do not have any stock appreciation
rights plans in effect and have no long-term incentive plans, as those terms are
defined in Securities and Exchange Commission regulations.

The directors  receive  compensation  of $100 per meeting for their  services as
directors and Mr. Jerry E. Polis,  Chairman of the Board, receives $200 for each
meeting.  None of the  officers  currently  receive any  compensation  for their
services as officers of the Company.  We may begin compensating  management at a
future  date.  There are no  employment  contracts  with any of our  officers or
directors.

                                      23

<PAGE>

Item 11. Security Ownership of Certain Beneficial Owners and Management

<TABLE>
The following table sets forth, as of March 15, 2001, the Common Stock ownership
of each of our directors and officers,  all our executive officers and directors
as a group,  and each person known by us to be a beneficial  owner of 5% or more
of our common stock.  Except as otherwise noted, each person listed below is the
sole beneficial  owner of the shares and has sole investment and voting power as
to such shares.

<CAPTION>

                     Name and Address                             Amount & Nature
                      of Beneficial                                of Beneficial               Percent
                         Owner                                       Ownership                 of Class
                         -----                                       ---------                 --------
<S>                                                                  <C>                         <C>
                  Jerry E. Polis                                     593,297(1)                  21.9%
                  President and Director
                  980 American Pacific Drive, #111
                  Henderson, Nevada 89014

                  Phil Carlino,                                       30,000                      1.1%
                  Director
                  3375 Glen Avenue, Suite 6
                  Las Vegas, Nevada 89121

                  Eric M. Polis                                       50,000                      1.8%
                  Secretary, Treasurer and Director
                  980 American Pacific Drive, #111
                  Henderson, Nevada 89014

                  Dawayne R. Jacobs                                  100,000(2)                   3.7%
                  Director
                  980 American Pacific Drive, #111
                  Henderson, Nevada 89014

                  Newport Pacific Ltd.                               200,000                      7.4%
                  1005A Lippo Center, Tower 1
                  89 Queensway
                  Hong Kong

                  R. Kirk Avery                                      150,000                      5.5%
                  6121 Vista de la Mesa
                  La Jolla, California 92037

                  All directors and officers as a group              773,297                     28.5%
                    (4 persons)

<FN>
--------------------
(1)  Includes 400,000 shares held by the Polis Family Trust and 63,000 shares by
     Davric Corporation, a company controlled by Mr. Polis.

(2)  Shares held by family trust.
</FN>
</TABLE>


Item 12. Certain Relationships and Related Transactions

Mr. Jerry E. Polis  advanced us $100,000 in August  1999,  the proceeds of which
were  used  to pay a  portion  of the  purchase  price  for our  plasma  antenna
technology  and to fund  continued  patent  research.  This  advance was applied
toward Mr. Polis'  purchase of 200,000 shares of our common stock in the private
placement completed in October 1999. Mr. Eric M. Polis purchased $25,000 (50,000
shares) of our common stock in the private placement.

We currently share office space with Davric Corporation, an entity controlled by
Mr. Jerry E. Polis. We are paying Davric  Corporation  $500 per month for use of
this space and associated administrative costs.

                                       24

<PAGE>


Item 13. Exhibits and Reports on Form 8-K

(a) Exhibits

Each exhibit listed below is filed with this Annual Report on Form 10-KSB.


    Exhibit
     Number                     Description of Exhibit
     ------                     ----------------------

     3.1        Restated Articles of Incorporation of ASI Technology Corporation
                as filed with the  Secretary  of State of Nevada on September 1,
                2000.

     3.2        Bylaws of the Company.

     4.1        Form of Certificate evidencing common stock of the Company.

    10.1        2000  Equity  Incentive  Plan  ratified by the  shareholders  on
                August 1, 2000.

    10.1.1      Standard  form of stock option  agreement  under the 2000 Equity
                Incentive Plan.

    10.2        Purchase Agreement dated August 20, 1999 between the Company and
                Patriot Scientific Corporation.

    10.3        Purchase  Agreement  dated December 29, 2000 between the Company
                and American Technology Corporation.

-------------------
(b) Reports on Form 8-K.

None


                                       25

<PAGE>


INDEPENDENT AUDITOR'S REPORT

To the Board of Directors
ASI Technology Corporation
Las Vegas, Nevada

We have audited the accompanying balance sheets of ASI Technology Corporation (a
Development  Stage  Company) as of December  31, 2000 and 1999,  and the related
statements  of  operations,  stockholders'  equity  and cash flows for the years
ended December 31, 2000,  1999 and 1998 and for the period from inception of the
development  stage on January 1, 1999 through December 31, 2000. These financial
statements   are  the   responsibility   of  the   Company's   management.   Our
responsibility  is to express an opinion on these financial  statements based on
our audits.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects,  the financial position of ASI Technology  Corporation as
of December 31, 2000 and 1999,  and the results of its  operations  and its cash
flows for the years ended  December 31,  2000,  1999 and 1998 and for the period
from inception of the development  stage on January 1, 1999 through December 31,
2000 in conformity with generally accepted accounting principles.

The accompanying  financial  statements have been prepared  assuming the Company
will  continue as a going  concern.  As  discussed  in Note 10 to the  financial
statements,  the Company has suffered  recurring  losses from operations and may
require additional capital in order to fund the development of its technologies.
This raises substantial doubt about the Company's ability to continue as a going
concern.  Management's  plans in regard to these  matters are also  described in
Note 10. The  financial  statements  do not include any  adjustments  that might
result from the outcome of this uncertainty.


/s/ McGladrey & Pullen, LLP

Las Vegas, Nevada
January 10, 2001

                                        1

<PAGE>


<TABLE>
ASI TECHNOLOGY CORPORATION
(A Development Stage Company)

<CAPTION>
BALANCE SHEETS
December 31, 2000 and 1999                                                                             2000                 1999
-----------------------------------------------------------------------------------------------------------------------------------
<S>                                                                                                 <C>                 <C>
ASSETS
Current Assets
  Cash  and cash equivalents                                                                        $   153,968         $   422,551
  Accounts receivable (Note 4)                                                                           80,304                --
  Note receivable - current (Note 5)                                                                      4,393               4,016
  Prepaid expenses                                                                                       13,045               8,995
                                                                                                    -----------         -----------
    Total current assets                                                                                251,710             435,562

  Note receivable - less current portion (Note 5)                                                        15,575              19,637
                                                                                                    -----------         -----------
                                                                                                    $   267,285         $   455,199
                                                                                                    ===========         ===========

LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
  Accounts payable                                                                                  $    43,530         $     6,571
  Unearned revenue (Note 4)                                                                               7,870                --
  Contract obligation payable (Note 3)                                                                  100,000                --
                                                                                                    -----------         -----------
    Total current liabilities                                                                           151,400               6,571
                                                                                                    -----------         -----------

Commitments (Note 3)

Stockholders' Equity (Notes 6 and 7)
  Common stock, $.02 par value; 10,000,000 shares authorized, 2,711,664 shares
    issued and outstanding each year                                                                     54,233           1,487,664
  Additional paid-in capital                                                                          3,025,292           1,551,861
  Accumulated deficit                                                                                (2,963,640)         (2,590,897)
                                                                                                    -----------         -----------
                                                                                                        115,885             448,628
                                                                                                    -----------         -----------
                                                                                                    $   267,285         $   455,199
                                                                                                    ===========         ===========

<FN>
See Notes to Financial Statements.
</FN>
</TABLE>

                                                                  2
<PAGE>


<TABLE>
ASI TECHNOLOGY CORPORATION
(A Development Stage Company)

<CAPTION>
STATEMENTS OF OPERATIONS
For the Years Ended December 31, 2000, 1999 and 1998 and For the Period from
Inception of Development Stage on January 1, 1999 to December 31, 2000
                                                                                                                    From Inception
                                                                                                                    of Development
                                                                                                                       Stage on
                                                                                                                    January 1, 1999
                                                                                                                    to December 31,
                                                                    2000               1999              1998             2000
-----------------------------------------------------------------------------------------------------------------------------------
<S>                           <C>                               <C>                <C>                <C>               <C>
Revenues
  Development contracts (Note 4)                                $   160,536        $      --          $      --         $   160,536
  Other revenue                                                        --                 --                1,960              --
                                                                -----------        -----------        -----------       -----------
                                                                    160,536               --                1,960           160,536
Operating Expenses
  Research and development (Note 3)                                 422,107            303,946               --             726,053
  Marketing and promotion                                            67,585             30,238               --              97,823
  General and administrative (Note 9)                                62,029             20,441              1,586            82,470
                                                                -----------        -----------        -----------       -----------
                                                                    551,721            354,625              1,586           906,346
                                                                -----------        -----------        -----------       -----------

Income (Loss) from Operations                                      (391,185)          (354,625)               374          (745,810)
                                                                -----------        -----------        -----------       -----------

Nonoperating Income (Expense)
  Interest income                                                    18,442              7,021              2,627            25,463
  Interest expense                                                     --               (1,608)              --              (1,608)
                                                                -----------        -----------        -----------       -----------

Income (Loss)                                                   $  (372,743)       $  (349,212)       $     3,001       $  (721,955)
                                                                ===========        ===========        ===========       ===========

Basic and Diluted Income (Loss) per Common Share                $     (0.14)       $     (0.21)       $      0.01
                                                                ===========        ===========        ===========

Weighted Average Number of Common
  Shares Outstanding                                              2,711,664          1,625,198          1,181,664
                                                                ===========        ===========        ===========

<FN>
See Notes to Financial Statements.
</FN>
</TABLE>

                                                                 3

<PAGE>


<TABLE>
ASI TECHNOLOGY CORPORATION
(A Development Stage Company)

<CAPTION>
STATEMENTS OF STOCKHOLDERS' EQUITY
For the Years Ended December 31, 2000, 1999 and 1998 and For the Period from
Inception of Development Stage on January 1, 1999 to December 31, 2000

                                                                                                                          Deficit
                                                                                                                        Accumulated
                                                    Common Stock                                                         During the
                                               -------------------------    Additional    Accumulated                   Development
                                                  Shares       Amount     Paid-In Capital   Deficit         Total          Stage
-----------------------------------------------------------------------------------------------------------------------------------
<S>                                              <C>         <C>            <C>           <C>            <C>            <C>
Balance, December 31, 1997                       1,181,664   $ 1,181,664    $ 1,087,861   $(2,244,686)   $    24,839    $      --
  Net income                                          --            --             --           3,001          3,001           --
                                               -----------   -----------    -----------   -----------    -----------    -----------
Balance, December 31, 1998                       1,181,664     1,181,664      1,087,861    (2,241,685)        27,840           --

  Sale of stock, net of offering costs of
    $15,000 (Note 6)                             1,500,000       300,000        435,000          --          735,000           --
  Stock issued for services (Note 6)                30,000         6,000          9,000          --           15,000           --
  Contributed services (Note 6)                       --            --           20,000          --           20,000           --
  Net loss                                            --            --             --        (349,212)      (349,212)      (349,212)
                                               -----------   -----------    -----------   -----------    -----------    -----------
Balance, December 31, 1999                       2,711,664     1,487,664      1,551,861    (2,590,897)       448,628       (349,212)

  Contributed services (Note 6)                       --            --           40,000          --           40,000           --
  Net loss                                            --            --             --        (372,743)      (372,743)      (372,743)
  1 for 10 reverse stock split                        --      (1,433,431)     1,433,431          --             --             --
                                               -----------   -----------    -----------   -----------    -----------    -----------
Balance, December 31, 2000                       2,711,664   $    54,233    $ 3,025,292   $(2,963,640)   $   115,885    $  (721,955)
                                               ===========   ===========    ===========   ===========    ===========    ===========

<FN>
See Notes to Financial Statements.
</FN>
</TABLE>

                                                                 4

<PAGE>


<TABLE>
ASI TECHNOLOGY CORPORATION
(A Development Stage Company)

<CAPTION>
STATEMENTS OF CASH FLOWS
For the Years Ended December 31, 2000, 1999 and 1998 and For the Period from
Inception of Development Stage on January 1, 1999 to December 31, 2000

                                                                                                                    From Inception
                                                                                                                    of Development
                                                                                                                       Stage on
                                                                                                                    January 1, 1999
                                                                                                                    to December 31,
                                                                      2000            1999              1998             2000
-----------------------------------------------------------------------------------------------------------------------------------
<S>                                                                <C>              <C>              <C>              <C>
Cash Flows from Operation Activities
  Net income (loss)                                                $(372,743)       $(349,212)       $   3,001        $(721,955)
  Adjustments to reconcile net income (loss) to net
    cash used in operating activities:
    Contributed services                                              40,000           20,000             --             60,000
    Common stock issued for services                                    --             15,000             --             15,000
    Acquired in-process research and development                     200,000          250,000             --            450,000
    Changes in working capital components:
      (Increase) in accounts receivable                              (80,304)            --               --            (80,304)
      (Increase) in prepaid expenses                                  (4,050)          (8,995)            --            (13,045)
      Increase in unearned revenue                                     7,870             --               --              7,870
      Increase in accounts payable                                    36,959            6,571             --             43,530
      (Decrease) in due to related party                                --             (5,895)         (10,971)          (5,895)
                                                                   ---------        ---------        ---------        ---------
        Net cash used in operating activities                       (172,268)         (72,531)          (7,970)        (244,799)
                                                                   ---------        ---------        ---------        ---------

Cash Flows from Investing Activities
  Payments on note receivable                                          3,685            3,686            3,373            7,371
  Purchase of in-process research and development                   (100,000)        (250,000)            --           (350,000)
                                                                   ---------        ---------        ---------        ---------
      Net cash provided by (used in)
        investing activities                                         (96,315)        (246,314)           3,373         (342,629)
                                                                   ---------        ---------        ---------        ---------

Cash Flows from Financing Activities
  Proceeds from related party loan                                      --            100,000             --            100,000
  Proceeds from bank debt                                               --            100,000             --            100,000
  Payments on bank debt                                                 --           (100,000)            --           (100,000)
  Net proceeds from sale of common stock                                --            635,000             --            635,000
                                                                   ---------        ---------        ---------        ---------
      Net cash provided by financing activities                         --            735,000             --            735,000
                                                                   ---------        ---------        ---------        ---------

      Net increase (decrease) in cash                               (268,583)         416,155           (4,597)         147,572

Cash and cash equivalents, beginning of year                         422,551            6,396           10,993            6,396
                                                                   ---------        ---------        ---------        ---------

Cash and cash equivalents, end of year                             $ 153,968        $ 422,551        $   6,396        $ 153,968
                                                                   =========        =========        =========        =========

Supplemental Cash Flow Information
  Cash paid during the year for:
    Interest                                                       $    --          $   1,608        $    --

Supplemental Schedule of Noncash Investing and
  Financing Activities
  Purchased technology financed by seller obligation               $ 100,000        $    --          $    --
  Contributed services                                             $  40,000        $  20,000        $    --
  Common stock issued for services                                 $    --          $  15,000        $    --
  Related party loan applied toward the purchase
    of common stock                                                $    --          $ 100,000        $    --

<FN>
See Notes to Financial Statements.
</FN>
</TABLE>


                                                                 5
<PAGE>


ASI TECHNOLOGY CORPORATION
(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

Note 1. Nature of Business

     ASI Technology  Corporation,  a Nevada Corporation ("Company") acquired two
plasma  technologies in August 1999 and December 2000, each in an early stage of
development.  The Company is engaged in the development and commercialization of
the  technologies.  From 1995 until  December  1998,  the Company was  inactive,
engaged only in collecting  proceeds from prior asset sales,  reducing debts and
paying  corporate  costs.  At the  beginning of 1999 the Company  commenced  its
strategy,  seeking to acquire and develop new  technologies  for licensing.  The
deficit incurred during the development stage represents the accumulated deficit
since January 1, 1999, the inception of the Company's current activities.

     Because the Company has devoted most of its efforts  since  January 1, 1999
to research  and  development,  and its planned  principal  operations  have not
commenced, the Company is considered to be in the development stage.

     Formerly ASI, the Company  changed its name to ASI  Technology  Corporation
effective on September 1, 2000 in connection with a capital reorganization which
included  a 1 for 10  reverse  stock  split.  The  effect of the stock  split is
presented within the statement of stockholders' equity by transferring an amount
equal to the par  value  for the  reduction  in  shares  to  additional  paid in
capital. All references in the financial statements to shares, share prices, per
share amounts and stock plans have been adjusted retroactively for the split.

Note 2. Summary of Significant Accounting Policies

     The following is a summary of significant  accounting  policies used in the
preparation of these financial statements:

Use of estimates

The preparation of financial  statements in conformity  with generally  accepted
accounting principles requires management to make estimates and assumptions that
affect  the  reported  amounts  of assets  and  liabilities  and  disclosure  of
contingent  assets and  liabilities at the date of the financial  statements and
the  reported  amounts of revenues  and expenses  during the  reporting  period.
Actual results could differ from those estimates.

Financial instruments and concentration of credit risk

The Company's financial instruments that are exposed to concentrations of credit
risk consist primarily of cash.

The Company's cash is maintained in bank deposit  accounts which, at times,  may
exceed federally  insured limits.  The Company has not experienced any losses in
such accounts.  The Company believes it is not exposed to any significant credit
risk on cash and cash equivalents.

                                       6

<PAGE>


ASI TECHNOLOGY CORPORATION
(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

Note 2. Summary of Significant Accounting Policies (continued)

Financial instruments and concentration of credit risk (continued)

The carrying values of financial  instruments including cash, accounts and notes
receivable,  accounts payable and contract obligation payable  approximated fair
market  value  because  of  the  immediate  or  short-term   maturity  of  these
instruments.  Management  believes the repayment  terms for the note  receivable
approximate  generally available terms for similar instruments and, accordingly,
the carrying value of the note receivable approximates fair value.

Revenue recognition

Revenue resulting from development  contracts is recognized under the percentage
of completion  method based upon costs incurred relative to total contract costs
or when the related  contractual  obligations  have been  fulfilled and fees are
billable.  Costs associated with development  contracts are included in research
and development.

Patents

Patent  costs  related to the  acquired  technology  were  expensed  as incurred
because the technology being developed has not reached technological feasibility
and requires further development, refinement and testing.

Research and development costs

Research and development costs are expensed as incurred.

Income taxes

The Company  accounts for income taxes under  Statement of Financial  Accounting
Standards  ("SFAS") No. 109. Temporary  differences are differences  between the
tax basis of assets and liabilities and their reported  amounts in the financial
statements that will result in taxable or deductible  amounts in future years. A
valuation  allowance  is recorded by the Company to the extent it is more likely
than not that a deferred tax asset will not be realized.

Stock options

The Company applies APB Opinion 25,  "Accounting for Stock Issued to Employees,"
and related  Interpretations in accounting for stock options issued to employees
which  requires  recognition  of expense  when the option price is less than the
fair value of the underlying common stock at the date of grant.

The Company has adopted the  disclosure-only  provisions  of SFAS  Statement No.
123,  "Accounting  for  Stock-Based  Compensation."  To provide the required pro
forma  information for employees,  the Company  estimates the fair value of each
stock option at the grant date by using the Black-Scholes

                                       7

<PAGE>


ASI TECHNOLOGY CORPORATION
(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

option-pricing  model.  Under SFAS No. 123,  compensation cost is recognized for
stock options granted to  nonemployees  using the  Black-Scholes  Option-pricing
model.

                                       8

<PAGE>


ASI TECHNOLOGY CORPORATION
(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

Note 2. Summary of Significant Accounting Policies (continued)

Statement of cash flows

For purposes of the  statement of cash flows,  the Company  considers all highly
liquid  investments  purchased with an original maturity of three months or less
to be cash equivalents.

Income (loss) per common share

Basic earnings (loss) per share is computed by dividing income (loss)  available
to  common  stockholders,  by the  weighted  average  number  of  common  shares
outstanding  for the  year.  Diluted  earnings  (loss)  per  share  reflect  the
potential  dilution of securities  that could share in the earnings (loss) of an
entity.  There were no dilutive  securities  outstanding during any of the years
presented.

Comprehensive income (loss)

The Company follows SFAS No. 130, "Reporting Comprehensive Income." SFAS No. 130
establishes  standards for reporting and display of comprehensive income and its
components in a full set of general- purpose financial statements.  There was no
difference  between the  Company's net loss and its  comprehensive  loss for the
period presented in the accompanying consolidated statements of operations.

Note 3. Purchase of Technology

Plasma antenna technology

On August 20,  1999 the Company  entered  into a purchase  agreement  to acquire
plasma antenna technology.  This technology purchase included one issued and one
pending  patent  (subsequently  issued)  and the results of prior  research  and
development  by the seller.  The cash purchase price of $250,000 was expensed as
there were no other identifiable assets acquired, commercial feasibility has not
been established, there are no current cash flows generated from this technology
and no future alternative uses of the patents or technology exist. Management is
unable to determine the fair value of the plasma antenna technology. There is no
ready market for the patents or  technology,  which is still in the early stages
of development. Management believes this technology is unique and no alternative
future uses of the technology exists.  Furthermore,  management does not have an
estimate of the cost of  developing  the  technology  to the point of commercial
viability or how long such  development  may take. As a result,  future earnings
and cash flows are highly uncertain.  Traditional  valuation methods rely on the
market values of similar  assets,  replacement  costs or  projections  of future
earnings and cash flows.

The Company is also  obligated  to pay the seller a royalty of 5% of ASI's gross
revenues (as  defined)  from the  technology  for a period of five years up to a
maximum of $250,000 in royalties. There are no minimum royalties.

                                       9

<PAGE>


ASI TECHNOLOGY CORPORATION
(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

Note 3. Purchase of Technology (continued)

Although  the use of the plasma  antenna  technology  has  generated  all of the
revenues  in 1999 and  2000,  the  technology  is  still  in an  early  stage of
development and there can be no assurance that the planned commercial  viability
will be achieved.  The revenues  generated were related to development grants to
explore commercial uses of the technology.

Sound reduction technology

In December 2000, the Company entered into a purchase agreement to acquire sound
reduction  technology for jet engines.  This  technology  employs  techniques to
modulate the plasma in a jet engine to reduce noise.  This  technology  purchase
included one issued U.S. patent and multiple foreign patent applications and the
results of prior research and  development by the seller.  Of the aggregate cash
purchase  price of  $200,000,  a total of $100,000  was paid at closing with the
balance due in ten equal monthly  installments of $10,000 commencing February 1,
2001.  The  $200,000  purchase  price  was  expensed  as  there  were  no  other
identifiable assets acquired,  commercial  feasibility has not been established,
there are no current cash flows  generated  from this  technology  and no future
alternative  uses of the patents or  technology  exist.  Management is unable to
determine the fair value of the sound  reduction  technology.  There is no ready
market for these  patents or  technology,  which is still in the early stages of
development.  Management  believes this  technology is unique and no alternative
future uses of the technology exists.  Furthermore,  management does not have an
estimate of the cost of  developing  the  technology  to the point of commercial
viability or how long such  development  may take. As a result,  future earnings
and cash flows are highly uncertain.  Traditional  valuation methods rely on the
market values of similar  assets,  replacement  costs or  projections  of future
earnings and cash flows.

The  Company  is also  obligated  to pay  royalties  starting  at 6% of  product
revenues in the first year, 5% in the second year and 4% thereafter for the term
of the initial patent. A royalty of 15% is due on license  revenues  received by
the Company and a fee of 10% of sale  proceeds is due on the further sale of the
technology. There are no minimum royalties.

The Company's sound reduction technology will require further development before
it can be commercialized into products or licensed to others and there can be no
assurance that commercial viability will be achieved.

Note 4. Development Contracts

In January  2000 and August  2000 the Company  obtained  two cost plus fixed fee
development  contracts as subcontracts with a prime government  contractor which
funded further development of the Company's  technology.  The first contract was
for an  aggregate  of  $89,710  which was  completed  in August  2000.  Accounts
receivable of $80,304 at December 31, 2000  represents  amounts billed under the
contracts and $7,870 represented deferred revenue at December 31, 2000.

                                       10

<PAGE>


ASI TECHNOLOGY CORPORATION
(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

Note 5. Note Receivable

The Company has an unsecured note receivable from the prior sale of assets. This
9% note is due in monthly  installments  of  principal  and interest of $500 and
matures in November 2004.

Note 6. Stockholders' Equity

On August 23, 2000 the Company's  shareholders  approved a reorganization of the
Company's  share  capital,  whereby each ten shares of common stock were reverse
split into one share of common stock of $0.02 par value. This reorganization was
effected  on  September  1,  2000  with  the  filing  of  restated  articles  of
incorporation  in the  State  of  Nevada.  As a  result  of this  share  capital
reorganization the Company has 11,000,000 shares authorized, $0.02 par value, of
which 10,000,000 are designated common stock and 1,000,000 shares are designated
preferred stock.  There were no issued or outstanding  shares of preferred stock
at December 31, 2000.

All share and per share data included in these  financial  statements  have been
retroactively adjusted to reflect the abovementioned reverse stock split.

In October 1999,  the Company  completed the sale of 1,500,000  shares of common
stock at $0.50 per share for gross proceeds of $750,000.  Officers and directors
of the Company purchased an aggregate of 275,000 of these shares.

In December  1999,  the Company  issued  30,000  shares of common stock to three
consultants for services. These shares were valued at $15,000.

During 1999 and 2000 two  shareholders,  including  one  officer  and  director,
contributed services to the Company without compensation.  These services valued
at  $20,000  in 1999 and  $40,000 in 2000 have been  expensed  and  treated as a
capital contribution.

Note 7. Stock Option Plan

The Company's  shareholders approved the 2000 Equity Incentive Plan (the "Plan")
on August 23, 2000 under which the Company is authorized to grant  incentive and
nonstatutory  stock  options to acquire  up to 250,000  shares of the  Company's
common stock to employees and consultants. The term of the Plan is ten years and
the term of  options  granted  may not  exceed ten years from the date of grant.
Options may be granted at a price no less than 100% of the fair market value.

As of December 31, 2000, the Company had not granted any options under the Plan.

                                       11

<PAGE>


ASI TECHNOLOGY CORPORATION
(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

Note 8. Income Taxes

Net deferred tax assets  consist of the following  components as of December 31,
2000 and 1999:

                                                         2000             1999
                                                       --------         --------
Deferred tax assets:
Research and development costs                         $159,000         $ 89,000
Contributed services                                     21,000            7,000
Loss carryforwards                                       87,000           41,000
                                                       --------         --------
                                                        267,000          137,000
Less valuation allowance                                267,000          137,000
                                                       --------         --------
                                                       $   --           $   --
                                                       ========         ========


A valuation  allowance  is required  for those  deferred tax assets that are not
likely to be realized.  Realization is dependent upon future earnings during the
period loss carryforwards are expected to be available. Because of the uncertain
nature of the ultimate realization of tax losses, a complete valuation allowance
is recorded against the deferred tax asset arising from net operating losses.

For tax purposes,  the Company has a loss carryforward of approximately $250,000
as of December 31, 2000 that expires December 31, 2014.

The income tax  provision  differs from the amount of income tax  determined  by
applying  the  U.S.  federal  income  tax  rate to  pretax  income  (loss)  from
continuing operations for the years ended December 31, 2000, 1999 and 1998.


                                               2000         1999        1998
                                            ---------    ---------    ---------
Computed "expected" tax (credit)            $(130,000)   $(122,000)   $   1,000
Increase (decrease) in income taxes
resulting from:
Expiration of loss carryforward                  --        171,000         --
Increase (decrease) in valuation allowance    130,000      (46,000)        --
Other                                            --         (3,000)      (1,000)
                                            ---------    ---------    ---------
                                            $    --      $    --      $    --
                                            =========    =========    =========

                                       12

<PAGE>


ASI TECHNOLOGY CORPORATION
(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

Note 9. Related Party Transactions

Commencing in September 1999, the Company began paying a company affiliated with
its  President an aggregate of $500 per month for office rent,  bookkeeping  and
administrative services with such payments aggregating $6,000 in 2000 and $1,500
in 1999.  During 2000 and 1999, the Company also paid companies  affiliated with
its President a total of $15,283 and $2,419,  respectively as reimbursement  for
travel and related costs.

A consultant to the Company  previously served as a director and chairman of the
Corporation from which the Company purchased the plasma antenna technology. This
consultant  also  serves  as a  director  and  chief  executive  officer  of the
Corporation from which the sound reduction technology was purchased.

Note 10. Ability to Continue as a Going Concern

The Company's  financial  statements have been presented on the basis that it is
able to continue as a going  concern,  which  contemplates  the  realization  of
assets and the satisfaction of liabilities in the normal course of business.

The Company has incurred  significant  losses in connection with the acquisition
and  development  of its technology and has limited funds with which to operate.
Management anticipates receiving additional contracts for further development of
it  technology;  however,  there can be no assurance that such contracts will be
obtained. Consequently,  additional capital resources may be required to further
develop the Company's  technology to the point where it is commercially  viable.
The Company also plans to use  resources to  strengthen  and expand its patents,
establish   certain   strategic   relationships   and  identify  primary  market
opportunities.  Shortly  thereafter,  the Company expects to begin licensing its
product,  which management believes will generate sufficient revenue to continue
the Company's operations.  However,  there is no assurance that the Company will
be  able to  successfully  commercialize  its  products  or be able to  generate
sufficient  revenue  through the licensing of its product to provide  sufficient
working capital.  Management does not have an estimate of the additional capital
necessary to develop the technology to the point of commercial viability.

The accompanying financial statements do not include any adjustments which would
be  necessary  should the Company be unable to  continue as a going  concern and
therefore be required to realize its assets and  discharge  its  liabilities  in
other than the normal  course of business  and at amounts  different  from those
reflected in the accompanying financial statements.

                                       13

<PAGE>


                                   SIGNATURES

In  accordance  with  Section 13 or 15(d) of the Exchange  Act,  the  Registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.


                                          ASI TECHNOLOGY CORPORATION


                                          By: /s/ JERRY E. POLIS
                                              ------------------
                                              Jerry E. Polis
                                              President

Date:  March 23, 2001

<TABLE>
In  accordance  with the Exchange  Act, this report has been signed below by the
following  persons on behalf of the  registrant and in the capacities and on the
dates indicated.

<CAPTION>
         Name                           Position                                             Date
         ----                           --------                                             ----
<S>                                 <C>                                                  <C>
/s/ JERRY E. POLIS                  President                                            March 23, 2001
    --------------                  and Director
    Jerry E. Polis                  (principal executive officer)


/s/ ERIC M. POLIS                   Secretary, Treasurer and Director                    March 23, 2001
    -------------                   (principal financial and accounting officer)
    Eric M. Polis


/s/ PHIL CARLINO                    Director                                             March 23, 2001
    ------------
    Phil Carlino


/s/ DAWAYNE R. JACOBS               Director                                             March 23, 2001
    -----------------
    Dawayne R. Jacobs
</TABLE>

                                                    35