SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                                  FORM 10-KSB/A

                                Amendment No. 2

/x/  Annual Report  Pursuant to Section 13 or 15(d) of the  Securities  Exchange
     Act of 1934 for the fiscal year ended August 31, 2001.

/ /  Transition Report under Section 13 or 15(d) of the Securities  Exchange Act
     of 1934.

                                     0-32923
                     -------------------------------------
                             Commission File Number

                                 ESSXSPORT CORP.
            --------------------------------------------------------
                 (Name of Small Business Issuer in its charter)

            Nevada                                          33-0198414
-------------------------------                  -------------------------------
(State or other jurisdiction of                          (I.R.S. Employer
incorporation or organization)                        Identification Number)

                 305 NE Loop 820, Suite 505, Hurst, Texas 76053
        ---------------------------------------------------------------
               (Address of principal executive offices) (Zip Code)

                   Issuer's telephone number: (817) 285-2886
             ------------------------------------------------------

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

          Securities registered pursuant to Section 12 (g) of the Act:
                          Common Stock $0.001 Par Value

Check whether Issuer:  (1) has filed all reports required to be filed by section
13 or 15 (d) of the  Securities and Exchange Act of 1934 during the preceding 12
months and (2) has been  subject  to such  filing  requirements  for the past 90
days. Yes / / No /X/

Indicate by check mark if disclosure of delinquent  filers  pursuant to Rule 405
of Regulation  S-K is not contained  herein,  and will not be contained,  to the
best of  issuer's  knowledge,  in  definitive  proxy or  information  statements
incorporated by reference in Part III of this Form or any amendment to this Form
10-KSB. / /

Issuer's Revenues for its most recent fiscal year: $698,904.

As of November 30, 2001, the aggregate  market value of the voting stock held by
non-affiliates  of the Issuer,  11,592,813  shares,  was $1,391,138.  The market
value of Common Stock of the Issuer,  par value $.001 per share, was computed by
reference  to the average of the  closing  bid and asked  prices of one share on
such date which was $0.12.

The number of shares  outstanding of the Issuer's Common Stock,  par value $.001
per share, as of November 30, 2001, was 32,876,417 shares.

                       DOCUMENTS INCORPORATED BY REFERENCE
                                       N/A

<PAGE>

                                     PART I

ITEM 1. DESCRIPTION OF BUSINESS

     ESSXsport  Corp.  and  its  subsidiaries   ("ESSXsport,"   "ESXS,"  or  the
"Company") design,  develop,  manufacture and market:  track and field equipment
and athletic  equipment for adults and children  under the  ESSXsport(TM)  brand
name and private  label for other  suppliers.  The  Company's  products  include
sports equipment for various sports.

OVERVIEW

     ESSXsport  was  incorporated  in  Nevada  in 1984 as  Southern  Development
Company,   Inc.   ("SDC").   In  December  1994,  SDC  merged  with   Integrated
Communications  Access Network,  Inc.  ("ICAN").  In March 1996, the Company was
renamed SDC and, in September  1998,  the Company  changed its name to ESSXsport
Corp. At that time, the Company had no assets and no liabilities.

     The  Company's  headquarters  are  in  Hurst,  Texas.  A  sales  office  is
maintained in Kuala Lumpur, Malaysia, which is devoted to sales of the Company's
products  in  the  Asian/Pacific  region.  It is  maintained  as a  geographical
convenience  in order to  communicate in a timely manner with customers in Asian
Markets. The Company has no significant International operations.

     Manufacturing facilities are located Sun Valley, California.

     The Company develops,  licenses,  and sells athletic  equipment,  and other
sports-oriented   products.   It  uses  traditional   distribution  channels  to
institutional and retail customers.  It also uses an eCommerce  Internet site to
sell its product line (www.eonlinesports.com).

     Typical  customers  of  ESSXsport  brand  equipment  buy the  products  for
professional use, educational use (middle school through university),  and local
competition.

     The Company's product line consists  primarily of track and field equipment
and some specialty  sports  products for other sports such as soccer,  football,
baseball, basketball, volleyball, and track and field.

     The Company's  initial focus reflects the management's  experience in track
and field. A growing sector in track and field, due to increasing  participation
by women, is pole-vaulting.  Over the past three years, sales of poles for women
have  doubled  annually.  The men's  market has also grown over the past several
years.

     Bruce Caldwell,  ESSXsport President,  invented the first women's pole, and
one of the Company's directors,  Earl Bell, is an Olympic Medallist and was also
a former  world  record  holder  in the  pole  vault.  As part of the  Company's
management  team, Mr. Bell is responsible for product  development and marketing
of ESSXsport pole vault products.

     Current management is experienced in product  development,  marketing,  and
sales of sports  equipment.  Additionally,  management seeks to develop business
relationships  with sports  equipment and apparel  distributors  and  well-known
athletes in order to promote its  products.  At this time no such  relationships
exist that are material to the Company.

                                        2
<PAGE>

     To the extent that adequate  financial and other  resources are  available,
the Company  plans to expand its  product  lines into the sport shoe and apparel
markets. To explore these opportunities, in October of 2000, the Company engaged
the services of Alberto CaberLotto, former President and founder of LOTTO Sports
of Italy. Mr. Alberto CaberLotto has begun to design a shoe product line for the
Company. Mr. Alberto CaberLotto also serves on the Company's board of directors.
Notwithstanding  the foregoing,  there can be no assurance that the Company will
be successful in designing and launching these products and, if launched,  there
can be no assurance that the Company will successfully sell such products.

     On April 15, 2000 the Company  entered into an agreement to acquire certain
assets of Pacific Mat, Inc. of California.(PMI) PMI had been a manufacturer of a
variety of sports-related matting, which is used to absorb impact of the athlete
with the ground.  Examples of such products  include  padding for volleyball net
supports, and floor padding below gymnastic equipment. This was a share purchase
transaction  by which  ESSXsport  acquired  certain  assets of  Pacific  Mat for
restricted ESXS common stock. Following the transaction, Ulrich Gag, Pacific Mat
president, joined ESSXsport as a director. He remains part of our management and
is  in  charge  of  the  Company's  manufacturing   operations  in  Sun  Valley,
California.

In August of 2001, the Company acquired the assets of the vaulting pole division
from  Innovative  Hockey  Inc.  Mexico.  A cash  payment of  $27,000  and 30,000
restricted  shares  were given for used  equipment.  The Company  upgraded  this
equipment  and bought  additional  equipment to produce  various high  composite
fiberglass shafts,  for sporting goods  applications.  Management  believes that
this  consolidation  of  manufacturing  facilities  will provide  enhanced  cost
control measures and better product delivery.

PRODUCTS

     The Company sells  equipment for athletes  under the ESSXsport  brand name.
The  Company  also  hopes  to  secure  the  rights  to  other   nationally   and
internationally recognized brand names in the future.

     ESSXsport  products are designed and manufactured to deliver  technological
performance  characteristics  that will  appeal to  internationally  competitive
athletes.

     The Company designs and markets  separate  product lines for men and women,
where appropriate. The suggested U.S. retail prices for ESSXsport products range
from $20 to $11,000 per item.

     The Company's track and field product line includes: vault poles (men's and
women's),  crossbars,  discus,  hammers,  javelins, pole tips, shots, standards,
starting blocks, training equipment,  hurdles, landing systems, books, and video
training aids.

     The Company's product line for football includes approximately 60 different
products,  including goal posts, pylons, marking systems,  sleds, pads, tackling
dummies, etc.

     The ESSXsport  soccer product line includes 13 products,  including  cones,
flags, anchor spikes, goals, nets, and other items.

     The  volleyball   product  line  consists  of  approximately  50  products,
including base pads, racks, equipment carts, lockers, flooring, and nets.

                                        3
<PAGE>

     The Baseball product line consist of  approximately  50 products  including
items purchased from other distributors for direct shipment delivery.

PRODUCT DEVELOPMENT

     In order to meet the demands of athletes,  the Company  seeks to engage the
opinions of professional  athletes,  including Olympic athletes,  trainers,  and
coaches.  To the  extent  possible,  the  Company  will also seek to enter  into
consulting  agreements with these athletic  professionals.  To date, the Company
has not  entered  into any  material  agreements  with  athletes,  trainers,  or
coaches.  The Company also seeks the advice of  international  distributors  and
suppliers to assist in the  development  of new  products  for the  Company.  At
present, the Company relies,  primarily, on the experience of its management for
product development.

MANUFACTURING

     The  Company  assembles  most  of  its  ESSXsport   products  sold  at  our
manufacturing facilities located in Sun Valley,  California.  Items manufactured
at that facility are produced for both brand name and private labeled  products.
Additional  products are purchased from other  manufacturers under private label
arrangements.  However,  the  Company  is not a party to any  contracts  in this
regard.

     The   Company's   leased   California   facilities   produce   mats,   foam
configurations,  landing  systems,  and vinyl covered foam  protection  pads for
several sports.  The Texas office is for corporate and accounting  functions and
is leased on a month to month basis.

     The Company is in compliance with all local  environmental  statutes at its
manufacturing facilities. The costs of compliance are not material.

THE MARKET

     The market for sporting goods and equipment is substantial.  U.S. shipments
of sporting and  recreational  goods and supplies were over $28 billion in 1997,
according to the U.S. Census Bureau. In the U.S. in 1997, there were over 24,000
retail outlets for sporting goods merchandise.

     Sports equipment is a fragmented market, reflecting the fact that dozens of
sports are played by amateurs and  professionals,  with each sport requiring its
own,  specific  types of equipment  and  accessories.  Accordingly,  it has been
difficult for the Company to quantify the precise size of its target markets.

     Financial  forecasts and growth are also  difficult to quantify  because of
the cyclical  nature of sports.  Forecasts have ranged from annual growth of the
industry from 11% to 20%.

COMPETITION

     Competition is characterized by very few large, multi-sport companies, such
as Collegiate  Pacific Inc (Symbol BOO),  Sport Supply Group Inc. (Symbol SSBY),
and The Harry Gill Co.  (Private),  Rather,  the industry is  characterized by a
wide variety of niche  manufacturers  and marketers that devote their activities
to a particular sport or sports category. Accordingly, market share is generally
a function of general use acceptance of products,  based on availability,  price
and performance capabilities.  The Company is relatively new and has not had the
ability  to  widely  promote  its  products.  Furthermore,  based  upon  current
resources,  it is unlikely that the Company will be able to promote its products
on the scale of its  competition,  that  have  resources  that are  considerably
greater than those of the Company. Accordingly,

                                        4
<PAGE>

the Company  expects to increase its sales revenues  through the  development of
strategic  relationships  and endorsements  whenever  possible.  There can be no
assurance  that the  Company  can  successfully  foster  such  relationships  or
endorsements, which could have a negative effect on sales.

BACKLOG; SEASONALITY; DISTRIBUTION

     As of August 31, 2001, the Company had a backlog of approximately  $25,000.
The Company  expects to use  incentives  (such as price  discounts),  pre-season
planning,  and just-in-time  inventory and manufacturing to reduce the effect of
any backlog of shipments on sales.  The Company,  to date,  has seen no material
disruption in its operations due to backlog.

     The Company's  product sales are seasonal in nature,  and traditionally 85%
of the  sales  are  concentrated  in  the  second  and  third  fiscal  quarters.
Management is exploring  methods to open this selling  window by broadening  the
product base, and offering incentives for early purchases.

EMPLOYEES.

     The Company currently employs six full-time  employees,  of which three are
involved in our manufacturing  operations,  two in marketing and  administration
and one in finance.  The employees are not unionized and management believes the
Company's relationship with its employees is good.

                                        5
<PAGE>

ITEM 2. DESCRIPTION OF PROPERTY

     The Company leases corporate  offices of approximately 500 square feet on a
month-to-month basis, at 305 NE Loop 820, Suite 505, Hurst, Texas 76052. Rent is
$150 per month.  Manufacturing  and assembly  facilities of approximately  7,200
square  feet are located at 9812  Glenoaks  Boulevard,  Sun  Valley,  California
91352. The Company does not anticipate changing its present leasing situation or
purchasing any real property in the near future.

ITEM 3. LEGAL PROCEEDINGS

The Company is not presently a party to any pending legal proceedings.

ITEM 4. SUBMISSION OF MATTER TO VOTE OF SECURITY HOLDERS

     The Company did not hold a security  holders  meeting in the fourth quarter
of its  fiscal  year ended  August 31,  2001.  A  security  holders'  meeting is
scheduled to be held in March 2002.

                                        6
<PAGE>

                                     PART II

ITEM 5. MARKET FOR THE REGISTRANTS
COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

     (a)  The Company's  Common Stock has limited  trading in the "pink sheets".
The following  table shows for the calendar  periods  indicated the high and low
closing bid quotation  for the  Company's  Common  Stock.  The  quotations  were
obtained  using  an  Internet  retrieval   service.   These  quotations  reflect
inter-dealer prices, without retail mark-up,  mark-down or commissions,  and may
not necessarily represent actual transactions.

                2000                     High Bid                  Low Bid
                ----                     --------                  -------

     First Quarter                       $  1.00                   $  1.00
     Second Quarter                      $  1.00                   $  1.00
     Third Quarter                       $  1.00                   $  1.00
     Fourth Quarter                      $  1.00                   $  1.00

                2001                     High Bid                  Low Bid
                ----                     --------                  -------

     First Quarter                       $   .90                   $   .01
     Second Quarter                      $   .92                   $   .68
     Third Quarter                       $   .68                   $   .05
     Fourth Quarter                      $   .78                   $   .05

                2002                     High Bid                  Low Bid
                ----                     --------                  -------

     First Quarter                       $   .25                   $   .05
     Second Quarter (Through             $   .18                   $   .05
     12/12/01)

     (b)  As of November 30, 2001, there were  approximately  414 record holders
of the Company's Common Stock.

     (c)  There have been no  dividends  declared  or paid by the Company on its
Common  Stock  during the past three years and the Company  does not  anticipate
paying cash dividends in the foreseeable future.

     (d)  Recent sales of securities are as follows:

          (1)  In January 2001,  the Company issued 1,500 shares of common stock
     to a  sports  consultant  to the  Company  for  consulting  work  performed
     relating to the pole vault  industry.  The  consultant  is a  sophisticated
     person and had full  access to all  relevant  information  relating  to the
     Company and its  business.  The share  certificates  were  affixed  with an
     appropriate  legend  restricting  transfers  and sales.  Accordingly,  this
     issuance was deemed to be exempt from registration pursuant to Section 4(2)
     of the  Securities  Act of 1933 (the  "Securities  Act") and the shares are
     deemed to be restrictive shares.

          (2)  Between  February  18, 2000,  and February 18, 2001,  the Company
     issued  1,014,706  shares of  common  stock in a  private  placement  to 22
     non-accredited investors and 19 accredited investors. The stock was sold at
     $0.50 per share for an  aggregate  amount of  $507,353.  The  offering  was
     private in nature and the Company believes that all investors had access to
     the Company's records and to management for purposes of obtaining  business
     and financial information on the Company. The Company further believes that
     all  investors  were  capable  of  evaluating  the  merits  and risks of an
     investment  in the  Company.  Accordingly,  this  offering was deemed to be
     exempt from  registration  pursuant to Section 4(2) and/or  Regulation D of
     the

                                        7
<PAGE>

     Securities Act and the shares issued are deemed to be restricted securities
     and bear a legend to that effect.

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

     The  information  included  in this  discussion  contains  forward  looking
statements  that are based on  current  expectations  and  beliefs  and  involve
numerous  risks and  uncertainties  that could  cause  actual  results to differ
materially.  Readers are cautioned not to place undue  reliance on these forward
looking statements, which speak only as of the date hereof.

BACKGROUND
The company is engaged in the national  distribution of sports  equipment to the
institutional and wholesaler markets realizing the vast majority of its revenues
in  response  to  telemarketing  efforts  directing  sales  to our  dealers  and
distributors  of our product line. The market for sporting goods  merchandise is
estimated  to  consist  of annual  expenditures  of some $4  billion  for sports
equipment  in the  Institutional  arenas.  The  management  of the  company  has
extensive  experience in this  business  having  previously  worked for and also
founded  successful  companies in the sports equipment  industry for the past 25
years.

Since the company commenced its first marketing program in September of 1998, it
continues to add new customers  and promote new products each year.  The company
believes  that its unique  products  are the primary  reason for the increase in
revenues each year.

                                       8
<PAGE>

The company's fiscal year ends on August 31st.

YEAR ENDED AUGUST 31, 2001 COMPARED TO YEAR ENDED AUGUST 31, 2000

NET SALES
Net sales for the year  ended  August  31  2001,  increased  by  approximately
$207,000 or 42%, compared to the same period in 2000.  Management  believes that
if sales continue to increase,  as the company makes changes to its product mix,
the  historical  seasonal  window  will widen and provide  the  opportunity  for
greater sales revenues with greater potential gross profit margins.  The company
attributes the growth in its revenues for both years to brand awareness  through
marketing  activities,  and the overall growth of its customer base. As a result
of the  company's  expanded  operations  and marketing  activities,  the company
believes future  revenues will continue to grow from current levels.  Management
believes the  seasonality in its revenues will continue to be a factor in future
periods,  but may not impact the company as much as in  previous  years when the
selling window grows wider.

GROSS MARGIN
Gross  margin for the year ended August 31,  2001,  increased  by  approximately
$100,000, or 47%, compared to the same period in 2000. As a percentage of sales,
gross margin for the year ended August 31, 2001, was 45%, approximately the same
as the year ended August 31, 2000. This percentage should increase by the second
quarter of the new year as the Company expands its manufacturing  facilities and
brings in new equipment to produce more goods with a higher profit margin.

SELLING, GENERAL and ADMINISTRATIVE EXPENSES
Selling, General and Administrative expenses for the year ended August 31, 2001,
increased by approximately  $93,000,  or 21%,  compared to the year ended August
31, 2000. The increase is predominantly due to the increased expenses of setting
up the  eCommerce  site and the cost of rent and salaries for the  manufacturing
facility the Company acquired in California.  As a percentage of sales, selling,
general  and  administrative  expenses  for the  year  ended  August  31,  2001,
decreased to 77% from 90% for the year ended August 31, 2000.

NET INCOME
The Company's net (loss) decreased to approximately  $226,000 for the year ended
August 31,  2001,  compared  to  approximately  $237,000  loss for fiscal  2000.
Management is bringing its vaulting pole manufacturing  process in house for the
year ending August 31, 2002, which places it in a position to sell more vaulting
poles at a higher profit  margin.  This, in  combination  with other  Management
decisions,  should  enable the  Company to generate a profit for the year ending
August 31, 2002.

                                       9
<PAGE>

LIQUIDITY AND CAPITAL RESOURCES
Cash and cash  equivalents  totaled  approximately  $31,000 at August 31,  2001,
compared to approximately $17,000 at August 31, 2000.

Proceeds from  financing  activities  for the year ended August 31, 2001 totaled
$225,000 compared to $178,000 for fiscal 2000.

Current assets totaled approximately  $122,000 at August 31, 2001, providing the
Company with a current ratio of 1.1 when divided by its current  liabilities  of
approximately $113,000.

The  company  plans to expand by  evaluating  potential  acquisitions  and joint
ventures,  and the success of those  efforts may require  additional  bank debt,
equity financing, or private financing.

CAUTION REGARDING FORWARD-LOOKING STATEMENTS
The company occasionally makes forward-looking  statements concerning its plans,
goals,  product and service offerings,  and anticipated  financial  performance.
These  forward-looking  statements may generally be identified by  introductions
such as "outlook"  for an upcoming  period of time, or words and phrases such as
"should", "expect", "hope", "plans", "projected", "believes", "forward- looking"
(or  variants of those words and  phrases) or similar  language  indicating  the
expression of an opinion or view concerning the future.

These forward-looking statements are subject to risks and uncertainties based on
a number of factors  and actual  results  or events may differ  materially  from
those anticipated by such forward-looking statements. These factors include, but
are not limited to: the growth rate of the  company's  revenue and market share;
the consummation of new, and the  non-termination  of, existing  contracts;  new
competitors   entering  the  company's   business,   the  company's  ability  to
effectively  manage its  business  functions  while  growing  its  business in a
rapidly  changing  environment;  the  company's  ability to adapt and expand its
services in such an environment; the company's ability to successfully refinance
or extend its line of credit or obtain  alternative  sources of  financing;  the
effective  and  efficient  management  of the  company's  inventory  levels  and
processing of sales orders;  the quality of the company's  plans and strategies;
and the company's ability to execute such plans and strategies.

In  addition,  forward-looking  statements  concerning  the  company's  expected
revenue  or  earnings  levels  are  subject  to  many  additional  uncertainties
applicable to  competitors  generally and to general  economic  conditions  over
which  the  company  has no  control.  The  company  does not plan to  generally
publicly update prior  forward-looking  statements for  unanticipated  events or
otherwise  and,  accordingly,  prior  forward-looking  statements  should not be
considered  to be "fresh"  simply  because the  company has not made  additional
comments on those forward-looking statements.

                                       10
<PAGE>

ITEM 7. FINANCIAL STATEMENTS

     The financial  statement and supplementary  data listed in the accompanying
Index to Financial Statements are attached as part of this report.

List of Financial Statements.

The following financial statements of ESSXsport Corp. are included in Item 7:

     Consolidated Balance Sheets                                             F 3

     Consolidated Statements of Operations                                   F 4

     Consolidated Statements of Changes in Stockholders' Equity (Deficit)    F 5

     Consolidated Statements of Cash Flows                                   F 6

     Notes to Consolidated Financial Statements                              F 8

All other  schedules for which  provision is made in the  applicable  accounting
regulation of the Securities and Exchange  Commission are not required under the
related instructions or are inapplicable, and therefore have been omitted.

ITEM 8. CHANGES IN AND DISAGREEMENTS WITH
ACCOUNTANTSON ACCOUNTING AND FINANCIAL DISCLOSURE

     None.

                                        11
<PAGE>

                                    PART III

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

     Set forth below is information  with respect to our directors and executive
officers as of November 30, 2001.

           NAME                         POSITION WITH COMPANY             AGE

--------------------------------------------------------------------------------
Dato'Sri Ram Sarma        Chairman of the Board of Directors               48
Bruce Caldwell            President, CEO, COO, and Director                50
Wayne Farrar              Director and Chief Financial Officer             45
Earl Bell                 Director                                         42
Bonnie Caldwell           Secretary and Director                           48
A. Chandrakumanan         Director                                         39
Ulrich Gag                Director                                         50
Alberto Caberlotto        Director                                         52

DATO' SRI RAM SARMA  joined us in July of 1999 and  serves  as  Chairman  of the
Company's  Board of  Directors.  He also  serves on the boards of several  other
companies,  including a company listed on the Kuala Lumpur Stock Exchange and he
is the CEO of SRS Group,  an Asian company  located in Kuala  Lumpur,  Malaysia.
Dato'  Sri Ram does not sit on the  board of any other  U.S.  public  Companies.
Dato'Sri Ram Sarma is the owner of Ticket Express,  a ticketing  agency of Asia.
His companies have provided equipment and ticketing to the Commonwealth Games in
1998 and the equipment to the Malaysian  Games Sukma 98. Dato'Sri Ram Sarma is a
resident of Kuala Lumpur, Malaysia.

BRUCE  CALDWELL  was  elected  as  President,   Chief  Executive  Officer,   and
Co-Chairman  of the Board of Directors in September  1998. He was the founder of
FiberSport, Inc., a track and field company that provided the vaulting pole that
won the gold medal and world record in the 1980  Olympics.  He was employed as a
General  Manager of PORTaPIT  International,  a division of Sport Supply  Group,
Inc.,  from 1991 to 1998. He served as Director of Olympic  equipment  logistics
for the 1996 Atlanta  Olympic Games,  and equipment  logistics for the Malaysian
Games  (Sukma  98).  Mr.  Caldwell  is  the  author  of  "The  Elusive  Bar,"  a
comprehensive book on pole-vaulting.

BONNIE  CALDWELL was elected as the  Company's  Secretary  and a Director of the
Company in March 1999. She is the wife of Bruce Caldwell.  Mrs. Caldwell has had
18  years  of  experience  with a  non-profit  organization,  and  is  currently
implementing and working with Lawson software. She is currently the treasurer of
the Southwest Users Group Inc., which is an organization  that surmises business
procedures of Lawson applications software.

EARL BELL was elected to serve as a Director of the  Company in  September  1998
and is Chairman of the Company's  "Gold Medal  Athletes"  and "Coaches  Advisory
Board".  This board will  select and manage the  advisors  of the  Company in an
effort to have qualified  advice in specific  sports.  Mr. Bell is a former pole
vault  world  record  holder  (1976),  three-time  Olympian,  and  1984  Olympic
medallist.  He is a 5-time NCAA  champion.  He is currently the pole vault coach
with both men's and women's 1998 United  States  champions and the current men's
American  record  holder is under  his  direction.  The  United  States  Olympic
Committee  voted Mr.  Bell  "Coach of the Year" in 1998.  He has been the United
States National Champion in three decades.  Mr. Earl Bell is currently the coach
of the USATF Club Bell Athletics,

                                       12
<PAGE>

consisting of three Olympians and the current American record holder in the pole
vault  event.  Mr.  Bell has been the  President  of Bell  Athletics,  Inc.,  an
athletic training and supply company, for ten years.

A.  CHANDRAKUMANAN  joined the Company as a Director in July 1999. He negotiated
and handled the logistics for the Malaysian Games (Sukma 98) and coordinated the
supply of equipment for track and field, boxing,  basketball, and gymnastics. He
has been the  principal  owner of KRES  Private  Limited  (Singapore)  a stadium
equipment  supply  company,  for the past ten years.  His  expertise  is in team
attire and sports  equipment.  Mr.  Chandrakumanan  manages the Company's  Asian
Office in Kuala Lumpur, Malaysia.

WAYNE  FARRAR is a  Director  and  serves  as Chief  Financial  Officer  for the
Company.  Mr.  Farrar  joined the Board of  Directors  on December  1, 2000.  He
previously  worked for the accounting firm of Price Waterhouse  (1990-1991).  He
has a Master of Science Degree in Accounting from North Texas State  University.
He also has a  Bachelors  Degree  from  Baylor  University  and a Master of Arts
Degree from the University of Texas at Arlington. Mr. Farrar has been in private
practice as a Certified Public Accountant for the past ten years and is also the
Chief Financial Officer of Pinnacle International Corporation.

ULRICH GAG is a Director and serves as Operations Manager for the Company at its
facilities  in Sun  Valley,  California.  He has over 30  years'  experience  in
development  and  manufacturing  of  track  and  field  equipment.  Mr.  Gag  is
German-born  and came to the United States in 1972.  He worked  closely with Don
Gordon,  the original inventor of landing systems while at GSC/PORTaPIT.  He has
worked with the fabrication and  manufacturing  of vinyl,  canvas,  and breather
fabrics  used  in a  variety  of  products,  including  gymnastic  and  athletic
equipment.  He was a principal  owner of Pacific Mat,  Inc., for eight years and
joined ESSXsport Corp. in April 2000.

ALBERTO  CABERLOTTO  is a Director of the  Company.  Since  January,  2000,  Mr.
Caberlotto  has been a  design  consultant  in  Italy to the shoe  manufacturing
industry. From January 1990 to December 1999 he was the President and founder of
Lotto Italy, a $4 billion sales shoe company.  Mr. Caberlotto  has over 40 years
of  shoemaking  and  designing  experience.  Mr. Alberto  Caberlotto  joined the
ESSXsport Corp. in October 2000 and resides in Italy.

BOARD MEETINGS AND COMMITTEES

The Board of  Directors  of the Company  held a total of 3 meetings and acted by
unanimous  consent on  approximately  two occasions during the fiscal year ended
August 31, 2001.  All six of the U.S.  Directors  attended each of the meetings,
and the two Malaysian  directors attended all meetings with the exception of one
telephone conference. The Board currently has no committees.

None of the Directors of the Company who are full time  employees of the Company
are paid any  compensation for their services as a director other than in stock.
No family relationships exist between any of the executive officers or directors
of the Company, except for Bonnie Caldwell, who is the wife of Bruce Caldwell.

COMPLIANCE WITH SECTION 16(S) OF THE EXCHANGE ACT

Section  16(a) of the  Securities  Exchange Act of 1934  requires the  Company's
officers and directors,  and persons who own more than ten percent of its Common
Stock, to file reports of ownership and changes of ownership with the Securities
and  Exchange  Commission  ("SEC")  and each  exchange  on which  the  Company's
securities  are  registered.  Officers,  directors  and greater than ten percent
stockholders  are required by SEC  regulation to furnish the Company with copies
of all ownership forms they file.

Based  solely on its  review  of the  copies of such  forms  received  by it, or
written  representations  from  certain  persons that no Form 5 was required for
those persons, the Company believes that, during the year ended

                                       13
<PAGE>

August 31, 2001  officers,  directors,  and greater than ten percent  beneficial
owners complied with all applicable filing requirements.

ITEM 10. EXECUTIVE COMPENSATION.

The following table sets forth the compensation of the Company's Chief Executive
Officer during the last three complete fiscal years. No other officers  received
annual compensation in excess of $100,000 during the last completed fiscal year.

                           SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
                             Annual Compensation             Long-Term Compensation

                                             Other      Restricted                           All
                                            Annual        Stock      Securities     LTIP    Other
                 Year   Salary    Bonus      Comp.       Award(s)    Underlying    Payout   Comp.
                                   ($)        ($)          ($)       Options (#)    ($)      ($)
<S>              <C>    <C>       <C>     <C>             <C>           <C>        <C>      <C>
Bruce Caldwell   2001   $48,000    -0-        -0-          -0-           -0-        -0-      -0-
                 2000   $48,000    -0-    $460.00 (1)      -0-           -0-        -0-      -0-
                 1999   $48,000    -0-    $250.00 (2)      -0-           -0-        -0-      -0-
</TABLE>

---------------

(1)  As part of his  compensation in 2000, Mr. Caldwell  received 460,000 shares
     of stock at $0.001 per share.

(2)  As part of his  compensation in 1999, Mr. Caldwell  received 250,000 shares
     of stock at $0.001 per share.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT.

     The  following  table sets forth  information  concerning  ownership of the
Company's  Common  Stock as of  November  30,  2001,  (a) each  director  of the
Company,  (b) each person known to the Company to be a beneficial  owner of more
than five percent (5%) of its Common Stock, (c) each person named in the Summary
Compensation  Table, and (d) all executive officers and directors of the Company
as a group.

                                       14
<PAGE>

                  NAME AND TITLE                       NUMBER OF        PERCENT
                                                         SHARES         OF CLASS
--------------------------------------------------------------------------------

Dato'Sri Ram Sarma, Chairman of the Board                 110,000(2)      0.33%
Bruce Caldwell, President, CEO and Director             8,217,452(1)     24.99%
Wayne Farrar, Chief Financial Officer                   1,200,000         3.65%
Bonnie Caldwell, Secretary and Director                 2,006,400         6.10%
Earl Bell, Director                                       900,000         2.74%
A. Chandrakumanan                                         110,000(2)      0.33%
Ulrich Gag, Director                                      300,000         0.91%
Alberto Caberlotto                                        500,000         1.52%
KRES Private Ltd.                                       7,939,752(2)     24.15%
Officers and Directors as a Group (8 individuals)      13,343,852        40.59%

---------------

(1)  Does not include 12,000 shares owned by the minor son of Mr. Caldwell.
(2)  Dato'Sri Ram Sarma and A. Chandrakumanan are the principle  shareholders of
     KRES Private Ltd.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

     We have not  been a party  to any  transaction,  proposed  transaction,  or
series of  transactions  in which the amount involved  exceeds  $60,000,  and in
which, to our knowledge, any of our directors, officers, five percent beneficial
security holder,  or any member of the immediate family of the foregoing persons
has had or will have a direct or indirect material interest.

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

(a)  Exhibits

          Item      Description

          3.(i)     Articles of Incorporation and Amendments thereto.

          (ii)      By-Laws of  Registrant  -  incorporated  by  reference  from
                    Exhibit 3(a) to  Registrant's  Form 10-SB12G  filed June 25,
                    2001.

          10.(a)    Standard  Industrial Lease Agreement between the Company and
                    Glenoaks Business Park, dated May 15, 2001,  incorporated by
                    reference  from Exhibit  10(a)  Registrant's  Form  10-SB12G
                    filed June 25, 2001.

          (b)       Agreement for the Purchase of Assets between the Company and
                    Pacific Mat,  Inc.,  dated March 28, 2000,  incorporated  by
                    reference from Exhibit 10(b) to  Registrant's  Form 10-SB12G
                    filed June 25, 2001.

          (c)       Employment Agreement between the Company and Bruce Caldwell,
                    dated  September 10, 1998,  incorporated  by reference  from
                    Exhibit 10(c) to  Registrant's  Form 10-SB12G filed June 25,
                    2001.

          (d)       Employment  Agreement  between  the  Company and Ulrich Gag,
                    dated April 16, 2000, incorporated by reference from Exhibit
                    10(d) to Registrant's Form 10-SB12G filed June 25, 2001.

                                       15
<PAGE>

          (e)       Settlement  and  Release  Agreement  between the Company and
                    Fred  Gray and E.  Drew  Crowley,  dated  October  1,  2000,
                    incorporated by reference from Exhibit 10(e) to Registrant's
                    Form 10-SB12G filed June 25, 2001.

          21.       Subsidiaries of the Registrant.

(b)  Reports on Form 8-K.

     None.

                                       16
<PAGE>

                                   SIGNATURES

Pursuant to the  requirements of Section 13 or 15(d) of the Securities  Exchange
Act of 1934,  the  Registrant  has duly  caused  this Report to be signed on its
behalf by the undersigned, thereunto duly authorized.

                                        ESSXsport, Corp.


                                        By: __________________________________
                                            Bruce Caldwell, President

Pursuant to the  requirements  of the Securities and Exchange Act of 1934,  this
report has been signed below by the  following  persons on behalf of  registrant
and in the capacities indicated on the _____ day of December 2001.

             Signatures                                    Title


____________________________________        Chairman of the Board of Directors
Dato'Sri Ram Sarma


____________________________________        President, Chief Executive Officer,
Bruce Caldwell                              and Director


____________________________________        Director and Chief Financial Officer
Wayne Farrar


____________________________________        Director
Earl Bell


____________________________________        Secretary and Director
Bonnie Caldwell


____________________________________        Director
A. Chandrakumanan


____________________________________        Director
Ulrich Gag


____________________________________        Director
Alberto Caberlotto

                                       17
<PAGE>

                                 ESSXSPORT CORP.
                        CONSOLIDATED FINANCIAL STATEMENTS
                                 AUGUST 31, 2001

                          INDEX TO FINANCIAL STATEMENTS

                                                                      Pages
                                                                      -----

Independent Auditor's Report                                          F-2

Consolidated Balance Sheets as of August 31, 2001
     and 2000                                                         F-3

Consolidated Statements of Operations
     For the Years Ended August 31, 2001 and 2000                     F-4

Consolidated Statements of Stockholders' Equity
     For the Years Ended August 31, 2001 and 2000                     F-5

Consolidated Statements of Cash Flows
     For the Years Ended August 31, 2001 and 2000                     F-6 - F-7

Notes to Consolidated Financial Statements                            F-8 - F-14

<PAGE>

                          INDEPENDENT AUDITOR'S REPORT

To the Board of Directors
EssxSport Corp.
Irving, Texas

We have audited the accompanying  consolidated balance sheets of EssxSport Corp.
as of August 31,  2001 and 2000,  and the  related  consolidated  statements  of
operations,  changes in stockholders'  equity (deficit),  and cash flows for the
years then ended.  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 auditing standards generally accepted
in the  United  States of  America.  Those  standards  require  that we plan and
perform the audits 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 consolidated  financial statements referred to above present
fairly,  in all  material  respects,  the  consolidated  financial  position  of
EssxSport  Corp.  as of  August  31,  2001  and  2000,  and the  results  of its
operations  and its cash  flows for the years then  ended,  in  conformity  with
accounting principles generally accepted in the United States of America.

The accompanying  consolidated  financial statements have been prepared assuming
that the Company will continue as a going  concern.  As discussed in Note 2, the
Company has experienced  recurring  operating losses since  quasi-reorganization
and negative cash flow from  operations.  These issues raise  substantial  doubt
about the Company's ability to continue as a going concern.  Management's  plans
in regard to these matters are described in Note 2. The  consolidated  financial
statements do not include any adjustments  that might result from the outcome of
these uncertainties.


WEAVER AND TIDWELL, L.L.P.

Fort Worth, Texas
November 30, 2001

3717

                                       F-2
<PAGE>

                                 ESSXSPORT CORP.
                           CONSOLIDATED BALANCE SHEETS
                            AUGUST 31, 2001 AND 2000

<TABLE>
<CAPTION>
                                                                         2001           2000
                                                                      ----------     ----------
                                     ASSETS

CURRENT ASSETS
<S>                                                                   <C>            <C>
    Cash                                                              $   30,943     $   17,309
    Accounts receivable                                                   26,361         41,378
    Stock subscriptions receivable                                         5,000          8,900
    Income taxes receivable                                                   --          1,752
    Inventory                                                             59,444         38,397
    Prepaid expenses                                                          --          7,278
                                                                      ----------     ----------

         Total current assets                                            121,748        115,014

PROPERTY AND EQUIPMENT
    Equipment                                                            117,526         67,013
    Furniture and fixtures                                                 3,640          3,640
                                                                      ----------     ----------

                                                                         121,166         70,653
    Less accumulated depreciation                                         41,745         19,384
                                                                      ----------     ----------

                                                                          79,421         51,269
                                                                      ----------     ----------
OTHER ASSETS
    Intangible assets, net of accumulated amortization                    15,362         20,262
    Deposits                                                               2,857            937
                                                                      ----------     ----------

TOTAL ASSETS                                                          $  219,388     $  187,482
                                                                      ==========     ==========

                      LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
    Accounts payable                                                  $   43,377     $   40,615
    Accrued expenses                                                      58,006         34,801
    Notes payable - related parties                                       11,591         23,052
                                                                      ----------     ----------

         Total current liabilities                                       112,974         98,468

STOCKHOLDERS' EQUITY
    Common stock, $0.001 par value
       300,000,000 shares authorized; issued and outstanding
       2001 32,916,567 shares, 2000 35,498,347 shares                     32,917         35,498
    Additional paid-in capital                                           623,715        377,794
    Retained deficit (since September 1, 1998 quasi-reorganization
       in which a deficit of $2,399,744 was eliminated)                 (550,218)      (324,278)
                                                                      ----------     ----------

                                                                         106,414         89,014
                                                                      ----------     ----------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                            $  219,388     $  187,482
                                                                      ==========     ==========
</TABLE>

The Notes to Consolidated Financial Statements
  are an integral part of these statements.
                                       F-3
<PAGE>

                                 ESSXSPORT CORP.
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                      YEARS ENDED AUGUST 31, 2001 AND 2000

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

NET SALES                                             $  698,904     $  491,930

COST OF SALES                                            385,704        278,637
                                                      ----------     ----------

       Gross profit                                      313,200        213,293

SELLING, GENERAL AND
    ADMINISTRATIVE EXPENSES                              536,711        443,715
                                                      ----------     ----------

       Loss from operations                             (223,511)      (230,422)

OTHER INCOME (EXPENSE)
    Miscellaneous income                                     555             --
    Interest expense                                      (2,984)        (6,530)
                                                      ----------     ----------

                                                        (225,940)      (236,952)
Income tax expense                                            --             --
                                                      ----------     ----------

NET LOSS                                              ($ 225,940)    ($ 236,952)
                                                      ==========     ==========

Earnings (loss) per share:
    Basic                                             ($     .01)    ($     .01)
                                                      ==========     ==========

Weighted average number
    of shares outstanding:
       Basic                                          35,293,427     34,911,848
                                                      ==========     ==========

The Notes to Consolidated Financial Statements
  are an integral part of these statements.
                                       F-4
<PAGE>

                                 ESSXSPORT CORP.
                      CONSOLIDATED STATEMENTS OF CHANGES IN
                         STOCKHOLDERS' EQUITY (DEFICIT)
                      YEARS ENDED AUGUST 31, 2001 AND 2000

<TABLE>
<CAPTION>
                                              Common Stock              Additional
                                     -----------------------------       Paid-in         Retained
                                        Shares           Amount          Capital         Deficit           Total
                                     ------------     ------------     ------------    ------------     ------------

<S>                                  <C>              <C>              <C>             <C>              <C>
BALANCE, AUGUST 31, 1999               17,018,412     $     17,018     $     56,859    ($    87,326)    ($    13,449)
    Cancellation of
       old common stock                  (777,551)            (777)             777                               --
    Contributed capital                                                      50,802                           50,802
    Issuance of common                                                                                            --
       stock for services               5,409,500            5,409                                             5,409
    Issuance of common
       stock for liquidation of
       notes payable                   13,270,000           13,270           10,650                           23,920
    Issuance of common
       stock for cash                     447,986              448          184,936                          185,384
    Issuance of common
       stock for assets                   130,000              130           64,870                           65,000
    Stock subscription receivable                                             8,900                            8,900
    Net loss                                                                               (236,952)        (236,952)
                                     ------------     ------------     ------------    ------------     ------------

BALANCE, AUGUST 31, 2000               35,498,347           35,498          377,794        (324,278)          89,014
    Cancellation of old
       common stock                    (3,150,000)          (3,150)           3,150                               --
    Contributed capital                                                      10,500                           10,500
    Issuance of common
       stock for services                   1,500                2              748                              750
    Issuance of common
       stock for subscription
       receivable                          17,800               18              (18)                              --
    Issuance of common
       stock for cash                     538,920              539          226,551                          227,090
    Issuance of common stock
       for subscription receivable         10,000               10            4,990                            5,000
    Net loss                                                                               (225,940)        (225,940)
                                     ------------     ------------     ------------    ------------     ------------

BALANCE, AUGUST 31, 2001               32,916,567     $     32,917     $    623,715    ($   550,218)    $    106,414
                                     ============     ============     ============    ============     ============
</TABLE>

The Notes to Consolidated Financial Statements
  are an integral part of these statements.
                                       F-5
<PAGE>

                                 ESSXSPORT CORP.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                      YEARS ENDED AUGUST 31, 2001 AND 2000

<TABLE>
<CAPTION>
                                                                         2001           2000
                                                                      ----------     ----------
CASH FLOWS FROM OPERATING ACTIVITIES
<S>                                                                   <C>            <C>
    Cash received from customers                                      $  714,476     $  472,577
    Cash paid to suppliers                                              (886,874)      (624,778)
    Interest paid                                                         (2,984)        (3,728)
                                                                      ----------     ----------

       Net cash used in operating activities                            (175,382)      (155,929)


CASH FLOWS FROM INVESTING ACTIVITIES
    Capital expenditures                                                 (35,513)        (8,289)
                                                                      ----------     ----------

       Net cash used in investing activities                             (35,513)        (8,289)


CASH FLOWS FROM FINANCING ACTIVITIES
    Cash received for common stock                                       235,990        185,384
    Repayments on notes payable                                          (21,461)        (6,992)
    Advances under notes payable                                          10,000             --
                                                                      ----------     ----------

       Net cash provided by financing activities                         224,529        178,392
                                                                      ----------     ----------

       Net increase in cash                                               13,634         14,174

CASH, BEGINNING OF YEAR                                                   17,309          3,135
                                                                      ----------     ----------

CASH, END OF YEAR                                                     $   30,943     $   17,309
                                                                      ==========     ==========
</TABLE>

The Notes to Consolidated Financial Statements
  are an integral part of these statements.
                                       F-6
<PAGE>

                                 ESSXSPORT CORP.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                      YEARS ENDED AUGUST 31, 2001 AND 2000
                                   (continued)

<TABLE>
<CAPTION>
                                                                         2001           2000
                                                                      ----------     ----------
RECONCILIATION OF NET LOSS TO NET
     CASH USED IN OPERATING ACTIVITIES
<S>                                                                   <C>            <C>
     Net loss                                                         ($ 225,940)    ($ 236,952)
     Adjustments to reconcile net loss to net
        cash used in operating activities:

        Issuance of common stock for services                                750          5,409
        Issuance of common stock for supplies                                 --          8,270
        Interest waived by shareholders
            recorded as contributed capital                                   --          2,802
        Salary waived by shareholder
            recorded as contributed capital                               10,500         48,000
        Depreciation                                                      22,361         15,996
        Amortization                                                       4,900          1,738
        Change in operating assets and liabilities
            Accounts receivable                                           15,017        (19,353)
            Income tax receivable                                          1,752         (1,752)
            Inventory                                                    (21,047)       (37,414)
            Prepaid expenses                                               7,278         14,722
            Intangible assets                                                 --         (5,000)
            Deposits                                                      (1,920)          (937)
            Accounts payable                                               2,762         26,794
            Accrued expenses                                               8,205         21,748
                                                                      ----------     ----------

               Net cash used in operating activities                  ($ 175,382)    ($ 155,929)
                                                                      ==========     ==========


SUPPLEMENTAL SCHEDULE OF NON-CASH
     INVESTING AND FINANCING ACTIVITIES
        Common stock issued for services                              $      750     $    5,409
        Common stock issued for supplies                                      --          8,270
        Purchase of equipment included in accounts payable                15,000         44,730
        Common stock issued in
            exchange for subscription receivable                           5,000             --
        Common stock issued
            in exchange for intangible assets                                 --         12,000
        Common stock issued to liquidate notes payable                        --         23,920
        Intangible asset costs included in accounts payable                   --          5,000
</TABLE>

The Notes to Consolidated Financial Statements
  are an integral part of these statements.
                                       F-7
<PAGE>

                                 ESSXSPORT CORP.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

  ORGANIZATION AND QUASI-REORGANIZATION

     EssxSport Corp. was incorporated in Nevada in 1984 as Southern  Development
     Company,   Inc.  (SDC).  In  December  1994,  SDC  merged  with  Integrated
     Communications  Access Network,  Inc. (ICAN). ICAN's main business activity
     centered   around  the   interactive   television  and   telecommunications
     industries.  In March 1996, ICAN changed its name back to SDC. In September
     1998,  the  Company,  under new  management,  changed its name to EssxSport
     Corp. and changed its business focus to the sport equipment industry. Prior
     to September 1, 1998, the Company was in the development stage.

     Effective  September 1, 1998, the Company's Board of Directors approved the
     elimination  of the  Company's  accumulated  deficit  through an accounting
     reorganization     of    its     stockholders'     equity    accounts    (a
     quasi-reorganization).   At  that  date,  the  Company  had  no  assets  or
     liabilities and, therefore,  the  quasi-reorganization  did not involve any
     revaluation.  September  1,  1998 is the  beginning  date of the  Company's
     fiscal year and is also the  effective  date of the  Company's new business
     focus under new management.  The  quasi-reorganization  was accomplished by
     eliminating the accumulated  deficit by a transfer from additional  paid-in
     capital and common stock of an amount equal to the  accumulated  deficit at
     August 31, 1998.

  NATURE OF OPERATIONS

     The Company sells  several  lines of sporting gear and equipment  under the
     brand name  EssxSport.  The Company  contracts with  manufacturers  for the
     production of shoes,  team apparel,  pole vaults and landing  systems,  and
     various  other  lines,  primarily  targeting  the track  and field  market,
     marketing  directly to end users via the internet,  catalog sales and trade
     shows.  Some  of  the  Company's  products  are  assembled  at  a  contract
     manufacturing  facility in Mexico.  All transactions with foreign companies
     are conducted in U.S.  dollars to eliminate the risk of exposure to foreign
     currency fluctuations.

  PRINCIPLES OF CONSOLIDATION

     The  consolidated  financial  statements  include  EssxSport  Corp. and its
     wholly- owned  subsidiary,  eonlinesports.com.  EssxSport  Corp is the sole
     shareholder of eonlinesports.com.  All intercompany  transactions have been
     eliminated.

  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 report amounts of assets and  liabilities  and
     disclosure of contingent assets

                                      F-8
<PAGE>

                                 ESSXSPORT CORP.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED

  USE OF ESTIMATES - CONTINUED

     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.

  REVENUE RECOGNITION

     Revenue is recognized when products are delivered to customers.

  ACCOUNTS RECEIVABLE AND CONCENTRATIONS

     No  allowance  for  doubtful  accounts  has  been  provided.  All  accounts
     considered to be uncollectible have been charged off, and in the opinion of
     management,  losses,  if  any,  on  the  remaining  accounts  will  not  be
     significant.

     Sales to related  companies  totaled  $96,626 and $44,200 in 2001 and 2000,
     respectively.  Sales to two other unrelated  companies totaled $360,246 and
     $190,562 for 2001 and 2000, respectively. At August 31, 2001, approximately
     11% of the Company's accounts receivable was due from one company.

  INVENTORY

     Inventory  consists of goods held for resale and are stated at the lower of
     cost or market value.  During the years ended August 31, 2001 and 2000, 45%
     and 70% of inventory purchases were from one and two vendors, respectively.

  PROPERTY AND EQUIPMENT

     Property and equipment is stated at cost. Depreciation is computed using an
     accelerated  method over the  estimated  useful  lives of the assets  which
     range from five to seven years.  Gains and losses on sales and dispositions
     of fixed assets are included in operations in the year realized.

  ADVERTISING COSTS

     All advertising costs are expensed as incurred. Advertising expense for the
     years ended August 31, 2001 and 2000 were $3,990 and $10,643, respectively.

  INCOME TAXES

     The Company uses the liability method in accounting for income taxes. Under
     this method,  deferred tax assets and liabilities  are determined  based on
     difference between

                                       F-9
<PAGE>

                                 ESSXSPORT CORP.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED

  INCOME TAXES - CONTINUED

     differences  between financial reporting and income tax carrying amounts of
     assets and  liabilities  and are  measured  using the enacted tax rates and
     laws that will be in effect when the differences are expected to reverse.

  STATEMENT OF CASH FLOWS

     For purposes of the  statement  of cash flows,  the Company  considers  all
     highly liquid  investments with initial  maturities of three months or less
     from date of purchase to be cash equivalents.

  EARNINGS (LOSS) PER COMMON SHARE

     Basic  earnings  (loss) per common share is computed  based on the weighted
     average  number  of  common  shares  outstanding  for the  period.  Diluted
     earnings  (loss) per share have not been presented  since the effects would
     be antidilutive.

  RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

     FASB has issued SFAS No. 142 "Goodwill and Other Intangible  Assets".  This
     Statement  addresses  financial   accounting  and  reporting  for  acquired
     goodwill and other  intangible  assets and also  addresses how goodwill and
     other  intangible  assets  should be  accounted  for  after  they have been
     initially  recognized.  Goodwill and intangible assets that have indefinite
     useful lives will no longer be amortized but rather will be tested at least
     annually for impairment by comparing to fair value.  The provisions of this
     statement  will be  required  for the fiscal year  beginning  June 1, 2002.
     Implementation  of these  provisions will not have a material impact on the
     carrying value of the Company's intangible assets upon adoption.

NOTE 2. GOING CONCERN

     The accompanying  consolidated  financial  statements have been prepared in
     conformity   with   generally   accepted   accounting   principles,   which
     contemplates  continuation of the Company as a going concern.  However, the
     Company has  incurred  significant  losses  since its  quasi-reorganization
     effective  September 1, 1998.  Additionally,  it has experienced  recurring
     negative cash flow from operations.  These factors raise  substantial doubt
     about  the  Company's   ability  to  continue  as  a  going  concern.   The
     accompanying  financial  statements do not include any adjustments relating
     to the recoverability and classification of recorded assets, or the amounts
     and  classification of liabilities that might be necessary in the event the
     Company cannot continue in existence.

                                      F-10
<PAGE>

                                 ESSXSPORT CORP.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 2. GOING CONCERN - CONTINUED

     In view of  these  matters,  the  continued  existence  of the  Company  is
     dependent upon its ability to increase the  profitability of its operations
     while  obtaining  funding  to  meet  the  Company's   immediate   financing
     requirements.  Management  believes that actions being taken by the Company
     to  reduce  costs  and focus on its core  products,  for  which  management
     believes there is a significantly expanding market, provide the opportunity
     to continue as a going  concern.  However,  there can be no assurance  that
     these plans will be successful.

NOTE 3. INVENTORIES

          The major components of inventories are as follows:

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

          Raw materials                                $   37,979    $   30,669
          Finished goods                                   21,465         7,728
                                                       ----------    ----------

                                                       $   59,444    $   38,397
                                                       ==========    ==========

NOTE 4.   NOTES PAYABLE
                                                          2001          2000
                                                       ----------    ----------

          Note payable to an officer,  shareholder
          and  employee  of  the  Company,  due on
          demand, non-interest bearing, unsecured.
          Convertible  into shares of common stock
          at a rate of $0.001 per share                $    3,591    $    5,052

          Note payable to an officer,  shareholder
          and  employee  of  the  Company,  due on
          demand, non-interest bearing, unsecured.
          Convertible  into shares of common stock
          at a rate of $0.05 per share                      8,000            --

          Note    payable    to   an    affiliated
          corporation and shareholder, retired.                --        18,000
                                                       ----------    ----------

                                                       $   11,591    $   23,052
                                                       ==========    ==========

NOTE 5. INCOME TAXES

     Deferred  income tax assets and  liabilities  are computed for  differences
     between the  financial  statement  and tax basis of assets and  liabilities
     that will result in taxable or  deductible  amounts in the future  based on
     enacted tax laws and rates applicable to the

                                      F-11
<PAGE>

                                 ESSXSPORT CORP.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 5. INCOME TAXES - CONTINUED

     period in which the  differences  are  expected to affect  taxable  income.
     Valuation  allowances are established when necessary to reduce deferred tax
     assets to the amount expected to be realized.

     Income tax expense is the tax payable or refundable  for the period plus or
     minus the change during the period in deferred tax assets or liabilities.

     The net deferred tax asset at August 31, 2001 and 2000 was comprised of the
     following:

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

          Current deferred tax asset                   $  185,856    $  109,410
          Current deferred tax liability                       --            --
          Less valuation allowance                       (185,856)     (109,410)
                                                       ----------    ----------

          Net deferred tax asset                       $       --    $       --
                                                       ==========    ==========

     Deferred  tax  assets are due to a net  operating  loss  carryforward.  Net
     operating   losses   available  to  offset   future   taxable   income  are
     approximately   $547,000  and  expire  in  2021.  The  valuation  allowance
     increased $76,446 and $80,117 for the years ended August 31, 2001 and 2000,
     respectively.

     The  Company  has no tax  provision  or  benefit  in  2001  or  2000 as the
     Company's net operating losses provide no recognizable benefit.

NOTE 6. INTANGIBLE ASSETS

     Included in intangible assets at August 31, 2001 and 2000 is the following:

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

         Patterns                                      $   12,000    $   12,000
         Non-compete agreement                             10,000        10,000
                                                       ----------    ----------

                                                           22,000        22,000
         Accumulated amortization                          (6,638)       (1,738)
                                                       ----------    ----------

                                                       $   15,362    $   20,262
                                                       ==========    ==========

     The patterns are being  amortized  on the  straight-line  basis over a five
     year  period.   The  non-compete   agreement  is  being  amortized  on  the
     straight-line basis over the expected non-compete period of four years.

                                      F-12
<PAGE>

                                 ESSXSPORT CORP.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 7. COMMITMENTS AND CONTINGENCIES

     During the year ended August 31, 1999, the Company was named defendant in a
     lawsuit related to an exchange agreement whereby the Company was to acquire
     100% of  another  entity.  The  Company  claimed  the  agreement  was never
     consummated.  The parties  have come to a mutually  agreed upon  settlement
     and, therefore,  on November 28, 2000, the suit was dismissed.  The Company
     is prohibited from disclosing the settlement terms, however, the settlement
     did not have a material effect on the financial position of the Company.

     The Company has sold  customer  accounts  receivable  to a factor with full
     recourse. The factor retains portions of the amounts for which the accounts
     were sold as a reserve  which is released  to the Company as the  customers
     make  monthly  payments.  Sales of recourse  contracts  were  approximately
     $418,000 and $211,000  during the years ended August 31, 2001 and 2000. The
     balance  outstanding under recourse contracts was approximately  $32,520 at
     August 31,  2001.  In the event of default,  the Company  pays the factor a
     predetermined  amount or repossesses the secured  account.  The Company has
     not experienced any  repossession  losses and losses under present recourse
     obligations are not expected to be significant.  Accordingly,  no provision
     has  been  made for  future  losses  that may  result  under  the  recourse
     arrangements. It is reasonably possible that the Company's estimate of near
     term repossessions and losses could change.

     The  Company  leases  office and  warehouse  space  under  operating  lease
     agreements   through  2004.   Rent  expense  under  these   agreements  was
     approximately  $16,000 and $6,000 for the years  ended  August 31, 2001 and
     2000, respectively.

     The approximate future minimum lease payments on operating leases at August
     31, 2001 are as follows:

                        2002                    $ 50,400
                        2003                      50,400
                        2004                      42,000
                                                --------

                       Total                    $142,800
                                                ========

NOTE 8. STOCKHOLDERS' EQUITY

     Included  in  additional  paid-in  capital at August  31,  2001 and 2000 is
     $106,500  and  $96,000,  respectively,  of  accrued  salaries  waived by an
     officer and contributed to the Company. For the years ended August 31, 2001
     and 2000 $10,500 and $48,000, respectively, of the waived amounts have been
     included in selling,  general and  administrative  expenses and contributed
     capital.

                                      F-13
<PAGE>

                                 ESSXSPORT CORP.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 8. STOCKHOLDERS' EQUITY - CONTINUED

     In July 2001,  the holder of a note  payable  from the  Company  requested,
     under the terms of the note  agreement,  to convert the note into shares of
     common stock at a rate of $0.001 per share.  The note holder is an officer,
     shareholder and employee of the Company.  The unpaid  principal  balance of
     the note is $3,591,  which is convertible  into 3,591,540  shares of common
     stock. As of November 30, 2001, the conversion has not been completed.

                                      F-14