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


/x/  Annual Report  Pursuant to Section 13 or 15(d) of the  Securities  Exchange
     Act of 1934 for the fiscal year ended August 31, 2002.

/ /  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                                             33-0198542
-------------------------------                           ----------------------
(State or other jurisdiction of                              (I.R.S. Employer
 incorporation or organization)                           Identification Number)

              9812-14 Glenoaks Blvd., Sun Valley, California 91352
       -----------------------------------------------------------------
               (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 /X/  No / /

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:  $710,103.

As of November 30, 2001, the aggregate  market value of the voting stock held by
non-affiliates of the Issuer,  16,414,353 shares, was $328,287. 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 $0.02.

The number of shares  outstanding of the Issuer's Common Stock,  par value $.001
per share, as of November 30, 2002, was 36,497,957 shares.

                    DOCUMENTS INCORPORATED BY REFERENCE: None

<PAGE>

                                     PART I

ITEM 1. DESCRIPTION OF BUSINESS
-------------------------------

ESSXsport  Corp. and its  subsidiaries  ("ESSXsport,"  "ESXS," or the "Company")
design,  develop,  manufacture  and market:  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,
Track and Field, Baseball, Volleyball, Football, and Soccer.

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  and  manufacturing   plant  are  in  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 women's products
have  increased due to the  empowerment  of women in certain  events.  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
purchase  transaction by which ESSXsport  acquired certain assets of Pacific Mat
for restricted  ESSXsport 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.

In September of 2001, the Company  experienced  some sales resistance due to the
"9-11" incident, but schools seemed to have established budgets in advance.

In May 2002, at the end of the school-buying  season, the Company  experienced a
slow down in product  demand  due to the  announcement  of a rule  change by the
National  Federation of High Schools  Association to upgrade the safety level of
certain events. A predominant  product to reduce schools risks was already being
sold by the  Company,  but most  institutions  waited to see if the rule changes
would be  mandated.  The NFHS  approved  this rule  change in  October  of 2002,
effective immediately.

The Company expects this new rule mandate to increase market sales potential for
the next three quarters. This will broaden the Company's market seasonality.

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 consists 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.  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.

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

THE MARKET

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 18%.

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),  and,  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, the Company expects to increase
its sales revenues through the development of

                                       4
<PAGE>

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, 2002, the Company had a backlog of approximately  $125,000. 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
believes that the 2003 fiscal year will even out the  seasonality for the market
and produce demand for earlier purchases and an extended buying season.

PATENTS AND TRADEMARKS.

The Company does not own or license any intellectual  property rights,  patents,
or  trademarks.  The Company  treats much of its technology as trade secrets and
takes what it  considers  appropriate  measures to  maintain  the secrecy of its
intellectual  property.  There can be no assurance that the measures the Company
takes to protect its  intellectual  property  rights and  technology  will deter
unauthorized use, copying or reverse engineering,  or that the Company will have
adequate legal redress in such cases.

EMPLOYEES.

The Company currently employs ten, full-time and two, part-time employees, eight
of  which  are  involved  in our  manufacturing  operations,  two in  marketing,
administration,  and 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
-------------------------------

Corporate,  manufacturing and assembly  facilities of approximately 7,200 square
feet are located at 9812 Glenoaks Boulevard,  Sun Valley,  California 91352. The
Company's  lease expires July 2004 and provides for monthly  payments of $4,627.
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, 2002. The Company has not held a security  holders'
meeting for two years.  A security  holders'  meeting is scheduled to be held in
April 2003.

                                       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,  markdown, or commissions,  and may
not necessarily represent actual transactions.


                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                             $ .18                     $ .05
Third Quarter                              $ .07                     $ .01
Fourth Quarter                             $ .04                     $ .01


                2003                     High Bid                   Low Bid
                ----                     --------                   -------

First Quarter                              $ .04                     $ .01
Second Quarter                             $ .25                     $ .01
(Through 12/13/02)


(b) As of November 30, 2002, 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.

On February 7, 2002, the Company issued 30,000 shares of restricted common stock
to  Innovative  Hockey,  Inc.  in  exchange  for  high  composite  manufacturing
equipment obtained in August 2001. This was an "arms-length" transaction, and an
exemption  from  registration  is  claimed  pursuant  to  Section  4(2)  of  the
Securities Act of 1933.

                                       7
<PAGE>

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 company  currently  focuses on several niche areas of their  expertise Track
and Field,  Baseball,  Soccer,  Volleyball,  and Football. 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.

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

YEAR ENDED AUGUST 31, 2002 COMPARED TO YEAR ENDED AUGUST 31, 2001

NET SALES

Net sales for the year ended August 31 2002, increased by approximately  $11,000
or, 2% compared to the same period in 2001 . Management  believes its sales were
stifled  this past year by the  effects of the "9-11"  incident,  however  still
maintained  stability and slight  growth as a result of the  company's  expanded
operations and new rule changes currently being established by both the NCAA and
National  Federation of High Schools.  The company believes future revenues will
continue to grow from current levels. Management believes the seasonality in its
revenues  will flatten out this next year and provide  earlier  sales due to the
new rule changes.

Over 8,000 High Schools will need to upgrade or buy new landing  systems to keep
up with the growing  participation  in the sport of Track and Field. The company
may not be able to capture the majority  market  share,  however the company has
been producing systems for the past year that already meet the new rule mandates
to be in affect come October 1st 2002.

GROSS MARGIN

Gross  margin for the year ended August 31,  2002,  increased  by  approximately
$61,000,  or 20%,  compared  to the same  period in 2001.  The company has taken
strides  to  produce  a new  design  for the main  product,  which  will lead to
increased potential profits this next year.

                                       8
<PAGE>

SELLING, GENERAL, AND ADMINISTRATIVE EXPENSES

Selling, General and Administrative expenses for the year ended August 31, 2002,
decreased by approximately $49,000 or 9%, compared to the year ended August 31,
2001. The decrease is predominantly due to the better manufacturing costs as the
infrastructure moves into play.

NET INCOME

The Company's net loss  decreased to  approximately  $126,000 for the year ended
August 31,  2002,  compared to  approximately  $226,000  (loss) for fiscal 2001.
Better  management  and refining the  manufacturing  process keeps  reducing our
losses as we progress.

LIQUIDITY AND CAPITAL RESOURCES

Cash and cash  equivalents  totaled  approximately  $9,000 at August  31,  2002,
compared to approximately $31,000 at August 31, 2001.

Cash flows from financing activities for the year ended August 31, 2002 totaled
approximately $13,000. Current assets totaled approximately $155,000 at August
31, 2002. 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.

                                       9
<PAGE>

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  generally  does not plan to
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.

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           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  ACCOUNTANTS  ON  ACCOUNTING  AND
--------------------------------------------------------------------------------
FINANCIAL DISCLOSURE
--------------------

     None.

                                       10
<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                50
Bruce Caldwell           President, CEO, COO, CFO, and Director            51
Earl Bell                Director                                          43
Bonnie Caldwell          Secretary and Director                            48
A. Chandrakumanan        Director                                          40
Ulrich Gag               Director                                          51
Alberto Caberlotto       Director                                          53

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
medalist.  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,  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.

                                       11
<PAGE>

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.

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 one meeting  during the
fiscal year ended August 31, 2002.  The Board  currently has no  committees  but
intends to establish an audit  committee in early  February  2003 to comply with
the new Sarbanes Oxley Act.

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 August 31, 2002,
other than the inadvertent,  late filing of a Form 4 by Mr. Caldwell relating to
his  conversion  of a note into  3,591,540  shares of  common  stock,  officers,
directors,  and greater than ten percent  beneficial  owners  complied  with all
applicable filing requirements.

                                       12
<PAGE>

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.

<TABLE>
<CAPTION>
                                                        SUMMARY COMPENSATION TABLE

                                    Annual Compensation                      Long-Term Compensation
                              ------------------------------         -------------------------------------
                        Year      Salary      Bonus                   Restricted    Securities      LTIP       All
                                                           Other
                                                          Annual         Stock                                Other
                                               ($)         Comp.       Award(s)     Underlying     Payout     Comp.
                                                            ($)           ($)       Options (#)      ($)       ($)
<S>                     <C>         <C>        <C>       <C>              <C>           <C>          <C>       <C>
Bruce Caldwell          2002        $48,000    -0-          -0-           -0-           -0-          -0-       -0-
                        2001        $48,000    -0-          (1)           -0-           -0-          -0-       -0-
                        2000        $48,000    -0-         $460           -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.

                                       13
<PAGE>

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, 2002 (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.

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

Dato'Sri Ram Sarma, Chairman of the Board              4,079,876 (1)     11.20%
Bruce Caldwell, President, CEO and Director            8,217,452 (2)     22.50%
Bonnie Caldwell, Secretary and Director                2,006,400          5.50%
Earl Bell, Director                                      900,000          2.47%
A. Chandrakumanan                                      4,079,876 (3)     11.20%
Ulrich Gag, Director                                     300,000          0.82%
Alberto Caberlotto                                       500,000          1.37%

Officers and Directors as a Group (7 individuals)     20,083,604         55.00%


_______________

(1)  Includes  3,969,876  shares owned by Kres Private  Ltd., a Company of which
     Mr. Sarma owns 50% interest.
(2)  Does not include 12,000 shares owned by the minor son of Mr. Caldwell.
(3)  Includes  3,969,876  shares owned by Kres Private  Ltd., a Company of which
     Mr. Chandrakumanan owns 50% interest.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
--------------------------------------------------------

On February 7, 2002, Bruce Caldwell,  the President and principal shareholder of
the  Company,  converted  the  balance  of a note  owing to him of  $3,591  into
3,591,540  shares of restricted  common stock.  The  conversion,  at the rate of
$0.001 per share was in  accordance  with an agreement  entered into between the
Company and Mr. Caldwell in July 2001.

                                       14
<PAGE>

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.

          (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.

(b)  Reports on Form 8-K.

     None.

ITEM 14. CONTROL AND PROCEDURES
-------------------------------

In the  90-day  period  before the filing of this  report,  the chief  executive
financial  officer  of  the  Company  has  evaluated  the  effectiveness  of the
Company's  disclosure  controls and procedures.  These  disclosure  controls and
procedures  are  those  controls  and other  procedures  we  maintain  which are
designed to insure that all of the  information  required to be disclosed by the
Company in all its periodic  reports filed with the SEC is recorded,  processed,
summarized  and reported,  within the time periods  specified in the SEC's rules
and forms.  Disclosure  controls and  procedures  include,  without  limitation,
controls  and  procedures  designed  to ensure that  information  required to be
disclosed by the Company in its reports filed or submitted  under the Securities
Exchange Act of 1934 is  accumulated  and  communicated  to Company  management,
including the chief  executive and chief financial  officers of the Company,  as
appropriate to allow those persons to make timely decisions  regarding  required
disclosure.

Subsequent to date when the disclosure  controls and procedures  were evaluated,
there have not been any  significant  disclosure  controls or procedures,  or in
other factors,  that could significantly affect such controls or procedures.  No
significant  deficiencies  or material  weaknesses in the controls or procedures
were detected; so no corrective actions needed to be taken.

                                       15
<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: /s/ Bruce Caldwell
                                            --------------------------
                                            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 13th day of December 2002.

          Signatures                         Title


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


  /s/  Bruce Caldwell             President, Chief Executive Officer,
--------------------------------  and Director
Bruce Caldwell


  /s/  Earl Bell                  Director
--------------------------------
Earl Bell


  /s/  Bonnie Caldwell            Secretary and Director
--------------------------------
Bonnie Caldwell


                                  Director
--------------------------------
A. Chandrakumanan


  /s/  Ulrich Gag                 Director
--------------------------------
Ulrich Gag


                                  Director
--------------------------------
Alberto Caberlotto

                                       16
<PAGE>

                                 ESSXsport Corp.
                        CONSOLIDATED FINANCIAL STATEMENTS
                                 AUGUST 31, 2002


                          INDEX TO FINANCIAL STATEMENTS

                                                                      Pages
                                                                      -----

Independent Auditor's Report                                          F-2

Consolidated Balance Sheet as of August 31, 2002 and 2001             F-3

Consolidated Statements of Operations
         For the Years Ended August 31, 2002 and 2001                 F-4

Consolidated Statements of Changes in Stockholders' Equity
         For the Years Ended August 31, 2002 and 2001                 F-5

Consolidated Statements of Cash Flows
         For the Years Ended August 31, 2002 and 2001                 F-6 - F-7

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

<PAGE>

                                 ESSXSPORT CORP.

                          CONSOLIDATED FINANCIAL REPORT

                                 AUGUST 31, 2002

<PAGE>

                                 C O N T E N T S


                                                                            Page
                                                                            ----

INDEPENDENT AUDITOR'S REPORT...................................................1


CONSOLIDATED FINANCIAL STATEMENTS

     Consolidated Balance Sheets...............................................2

     Consolidated Statements of Operations.....................................3

     Consolidated Statements of Changes in Stockholders' Equity................4

     Consolidated Statements of Cash Flows.....................................5

     Notes to Consolidated Financial Statements................................7

<PAGE>

                          INDEPENDENT AUDITOR'S REPORT


To the Board of Directors
EssxSport Corp.
Sun Valley, California

We have audited the accompanying  consolidated balance sheets of EssxSport Corp.
as of August 31,  2002 and 2001,  and the  related  consolidated  statements  of
operations,  changes in stockholders'  equity, 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,  2002 and  2001,  and the  results  of their
operations  and their 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 5, 2002

<PAGE>

                                                                          Page 2

                                 ESSXSPORT CORP.
                           CONSOLIDATED BALANCE SHEETS
                            AUGUST 31, 2002 AND 2001

<TABLE>
<CAPTION>
                                                                         2002            2001
                                                                     ------------    ------------
                                      ASSETS

CURRENT ASSETS
<S>                                                                  <C>             <C>
    Cash                                                             $      8,872    $     30,943
    Accounts receivable                                                    38,168          26,361
    Stock subscriptions receivable                                           --             5,000
    Inventory                                                             107,552          59,444
                                                                     ------------    ------------

          Total current assets                                            154,592         121,748

PROPERTY AND EQUIPMENT
    Equipment                                                             171,389         117,526
    Furniture and fixtures                                                  3,640           3,640
                                                                     ------------    ------------

                                                                          175,029         121,166
    Less accumulated depreciation                                          89,411          41,745
                                                                     ------------    ------------

                                                                           85,618          79,421
                                                                     ------------    ------------
OTHER ASSETS
    Intangible assets, net of accumulated amortization                     10,462          15,362
    Deposits                                                                2,175           2,857
                                                                     ------------    ------------

TOTAL ASSETS                                                         $    252,847    $    219,388
                                                                     ============    ============

                       LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
    Accounts payable                                                 $    136,909    $     43,377
    Accrued expenses                                                       50,885          58,006
    Current portion of obligation under capital lease                      11,193            --
    Notes payable - related parties                                        29,300          11,591
                                                                     ------------    ------------

          Total current liabilities                                       228,287         112,974

LONG-TERM OBLIGATION UNDER CAPITAL LEASE                                   15,556            --
                                                                     ------------    ------------

          Total liabilities                                               243,843         112,974

STOCKHOLDERS' EQUITY
    Common stock, $0.001 par value
       300,000,000 shares authorized; issued and outstanding
       2002 36,497,957 shares; 2001 32,916,567 shares                      36,498          32,917
    Additional paid-in capital                                            649,005         623,715
    Retained deficit (since September 1, 1998 quasi-reorganization
       in which a deficit of $2,399,744 was eliminated)                  (676,499)       (550,218)
                                                                     ------------    ------------

                                                                            9,004         106,414
                                                                     ------------    ------------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                           $    252,847    $    219,388
                                                                     ============    ============
</TABLE>

The Notes to  Consolidated  Financial  Statements  are an  integral  part of the
statements.

<PAGE>

                                                                          Page 3

                                 ESSXSPORT CORP.
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                      YEARS ENDED AUGUST 31, 2002 AND 2001



                                                       2002            2001
                                                   ------------    ------------

NET SALES                                          $    710,103    $    698,904

COST OF SALES                                           335,630         385,704
                                                   ------------    ------------

       Gross profit                                     374,473         313,200

SELLING, GENERAL AND
    ADMINISTRATIVE EXPENSES                             488,007         536,711
                                                   ------------    ------------

       Loss from operations                            (113,534)       (223,511)

OTHER INCOME (EXPENSE)
    Miscellaneous income                                  3,000             555
    Interest expense                                    (15,747)         (2,984)
                                                   ------------    ------------

                                                       (126,281)       (225,940)
Income tax expense                                         --              --
                                                   ------------    ------------

NET LOSS                                           ($   126,281)   ($   225,940)
                                                   ============    ============


Earnings (loss) per share:
    Basic                                          ($       .00)   ($       .01)
                                                   ============    ============

Weighted average number of shares outstanding:
       Basic                                         34,911,423      35,293,427
                                                   ============    ============

The Notes to  Consolidated  Financial  Statements  are an  integral  part of the
statements.

<PAGE>

                                                                          Page 4

                                 ESSXSPORT CORP.
                           CONSOLIDATED STATEMENTS OF
                         CHANGES IN STOCKHOLDERS' EQUITY
                      YEARS ENDED AUGUST 31, 2002 AND 2001

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

    Cancellation of old
       common stock                            ( 40,150)          ( 40)              40                                  -
    Contributed capital                                                          25,250                             25,250
    Issuance of common
       stock for equipment                       30,000             30                                                  30
    Issuance of common
       stock for note payable
       to related party                       3,591,540          3,591                                               3,591
    Net loss                                                                                    ( 126,281)       ( 126,281)
                                           ------------- --------------  ---------------  ----------------  ---------------

BALANCE, AUGUST 31, 2002                     36,497,957       $ 36,498        $ 649,005         ($676,499)         $ 9,004
                                           ============= ==============  ===============  ================  ===============
</TABLE>

The Notes to  Consolidated  Financial  Statements  are an  integral  part of the
statements.

<PAGE>

                                                                          Page 5

                             ESSXSPORT CORP.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                      YEARS ENDED AUGUST 31, 2002 AND 2001



                                                           2002          2001
                                                        ---------     ---------
CASH FLOWS FROM OPERATING ACTIVITIES
    Cash received from customers                        $ 701,296     $ 714,476
    Cash paid to suppliers                               (706,806)     (886,874)
    Interest paid                                         (15,747)       (2,984)
                                                        ---------     ---------

       Net cash used in operating activities              (21,257)     (175,382)


CASH FLOWS FROM INVESTING ACTIVITIES
    Capital expenditures                                  (13,863)      (35,513)
                                                        ---------     ---------

       Net cash used in investing activities              (13,863)      (35,513)


CASH FLOWS FROM FINANCING ACTIVITIES
    Cash received for common stock                          5,000       235,990
    Repayments on obligation under capital lease          (13,251)         --
    Repayments on notes payable                            (8,700)      (21,461)
    Advances under notes payable                           30,000        10,000
                                                        ---------     ---------

       Net cash provided by financing activities           13,049       224,529
                                                        ---------     ---------

       Net increase (decrease) in cash                    (22,071)       13,634

CASH, BEGINNING OF YEAR                                    30,943        17,309
                                                        ---------     ---------

CASH, END OF YEAR                                       $   8,872     $  30,943
                                                        =========     =========

The Notes to  Consolidated  Financial  Statements  are an  integral  part of the
statements.

<PAGE>

                                                                          Page 6

                                 ESSXSPORT CORP.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                      YEARS ENDED AUGUST 31, 2002 AND 2001
                                   (continued)

<TABLE>
<CAPTION>
                                                                 2002            2001
                                                             ------------    ------------
RECONCILIATION OF NET LOSS TO NET
     CASH USED IN OPERATING ACTIVITIES
<S>                                                          <C>             <C>
     Net loss                                                ($   126,281)   ($   225,940)
     Adjustments to reconcile net loss to net
        cash used in operating activities:

        Issuance of common stock for services                          --             750
        Issuance of common stock for equipment                         30              --
        Salary waived by shareholder
            recorded as contributed capital                        25,250          10,500
        Depreciation                                               47,666          22,361
        Amortization                                                4,900           4,900
        Change in operating assets and liabilities
            Accounts receivable                                   (11,807)         15,017
            Income tax receivable                                      --           1,752
            Inventory                                             (48,108)        (21,047)
            Prepaid expenses                                           --           7,278
            Deposits                                                  682          (1,920)
            Accounts payable                                       93,532           2,762
            Accrued expenses                                       (7,121)          8,205
                                                             ------------    ------------

               Net cash used in operating activities         ($    21,257)   ($   175,382)
                                                             ============    ============

SUPPLEMENTAL SCHEDULE OF NON-CASH
     INVESTING AND FINANCING ACTIVITIES
        Common stock issued for services                     $         --    $        750
        Purchase of equipment included in accounts payable             --          15,000
        Common stock issued in
            exchange for subscription receivable                       --           5,000
        Common stock issued to liquidate notes payable              3,591              --
        Equipment financed                                         40,000              --
</TABLE>

The Notes to  Consolidated  Financial  Statements  are an  integral  part of the
statements.

<PAGE>

                                                                          Page 7

                                 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.

     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 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.

<PAGE>

                                                                          Page 8

                                 ESSXSPORT CORP.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED

     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  $61,370 and $96,626 in 2002 and 2001,
     respectively.  Sales to two other unrelated  companies totaled $342,513 and
     $360,246 for 2002 and 2001, respectively. At August 31, 2002, approximately
     41% of the Company's  accounts  receivable was due from two  companies.  At
     August 31, 2001, approximately 11% of the Company's accounts receivable was
     due from one company.

     INVENTORY

     Inventory is stated at the lower of cost  (first-in,  first-out  method) or
     market value.  During the years ended August 31, 2002 and 2001, 21% and 45%
     of inventory purchases were from 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.

     SHIPPING AND HANDLING COSTS

     All  shipping and  handling  costs  incurred by the Company are included in
     selling,   general  and   administrative   expense  on  the  statements  of
     operations.  The costs totaled  approxi-mately  $36,000 and $46,000 for the
     years ended August 31, 2002 and 2001, respectively.

     ADVERTISING COSTS

     All advertising costs are expensed as incurred. Advertising expense for the
     years ended August 31, 2002 and 2001 were $4,393 and $3,990, respectively.


                                       17
<PAGE>

                                                                          Page 9

                                 ESSXSPORT CORP.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED

     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 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.

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 nor the amounts
     and  classification of liabilities that might be necessary in the event the
     Company cannot continue in existence.

     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.

<PAGE>

                                                                         Page 10

                                 ESSXSPORT CORP.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 3. INVENTORIES

     The major components of inventories are as follows:
                                                            2002          2001
                                                         ---------     ---------
              Raw materials                              $  74,927     $  37,979
              Work-in-process                               15,811            --
              Finished goods                                16,814        21,465

                                                         $ 107,552     $  59,444


NOTE 4. NOTES PAYABLE
                                                            2002          2001
                                                         ---------     ---------

     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, converted in 2002                        $      --     $   3,591

     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, repaid in 2002                                  --         8,000

     Note  payable  to an  officer,  shareholder  and
     employee of the Company, due on demand,  bearing
     an annual interest rate of 7%, unsecured.              29,300            --
                                                         ---------     ---------

                                                         $  29,300     $  11,591
                                                         =========     =========

NOTE 5. OBLIGATION UNDER CAPITAL LEASE

     The  Company  has  entered  into a  capital  lease for  certain  production
     equipment.  Obligations  under  capital  lease  have been  recorded  in the
     accompanying  financial  statements at the present value of future  minimum
     lease  payments,  discounted  at an  imputed  interest  rate  of  25%.  The
     capitalized  cost and accumulated  depreciation of this equipment at August
     31, 2002 was $40,000 and $12,000, respectively.


                                       18
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                                                                         Page 11

                                 ESSXSPORT CORP.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 5. OBLIGATION UNDER CAPITAL LEASE - CONTINUED

     Future  minimum  payments  under  capital  leases  and the  asset  purchase
     agreement at August 31 are as follows:

         2003                                            $  17,786
         2004                                               17,786
                                                         ---------
         Total future payments                              35,572
         Amount representing interest                    (   8,823)
                                                         ---------
         Present value of future payments                   26,749
         Less current portion                               11,193
                                                         ---------
         Non-current portion                             $  15,556
                                                         =========

NOTE 6. 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  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, 2002 and 2001 was comprised of the
     following:

                                                           2002         2001
                                                         ---------    ---------
         Current deferred tax asset                      $ 228,670    $ 185,856
         Current deferred tax liability                         --           --
         Less valuation allowance                        ( 228,670)   ( 185,856)
                                                         ---------    ---------
         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   $448,000  and  expire  in  2021.  The  valuation  allowance
     increased $42,814 and $76,446 for the years ended August 31, 2002 and 2001,
     respectively.

     The  Company  has no tax  provision  or  benefit  in  2002  or  2001 as the
     Company's net operating losses provide no recognizable benefit.


                                       19
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                                                                         Page 12

                                 ESSXSPORT CORP.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 7. INTANGIBLE ASSETS

     Included in intangible assets at August 31, 2002 and 2001 is the following:

                                                           2002          2001
                                                         ---------    ---------
         Patterns                                        $  12,000    $  12,000
         Non-compete agreement                              10,000       10,000
                                                         ---------    ---------

                                                            22,000       22,000
         Accumulated amortization                        (  11,538)   (   6,638)
                                                         ---------    ---------

                                                         $  10,462    $  15,362
                                                         =========    =========

     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.

NOTE 8. COMMITMENTS AND CONTINGENCIES

     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
     $450,000 and $418,000  during the years ended August 31, 2002 and 2001. The
     balance  outstanding under recourse contracts was approximately  $80,500 at
     August 31,  2002.  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  $50,000 and $16,000 for the years ended  August 31, 2002 and
     2001, respectively.

     The approximate future minimum lease payments on operating leases at August
     31, 2002 are as follows:

         2003                          $   50,400
         2004                              42,000
                                       ----------
         Total                         $   92,400
                                       ==========

<PAGE>

                                                                         Page 13
                                 ESSXSPORT CORP.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 9. STOCKHOLDERS' EQUITY

     Included  in  additional  paid-in  capital at August  31,  2002 and 2001 is
     $20,000  and  $106,500,  respectively,  of  accrued  salaries  waived by an
     officer and contributed to the Company. For the years ended August 31, 2002
     and 2001 $20,000 and $10,500, respectively, of the waived amounts have been
     included in selling,  general and  administrative  expenses and contributed
     capital.

     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 was converted  into  3,591,540  shares of common
     stock on February 7, 2002.


                                       20
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