U. S. SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

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

                                   FORM 10-QSB

     [x]  Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
                              Exchange Act of 1934

                  For the Quarterly Period Ended June 30, 2001

                                       or

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

                  For the Transition Period From _____ To _____

                        Commission File Number: 000-26903


                               booktech.com, inc.
        -----------------------------------------------------------------
        (Exact name of small business issuer as specified in its charter)


            Nevada                                              88-0409153
            ------                                              ----------
(State or other jurisdiction of                           (IRS Employer ID. No.)
 incorporation or organization)

                  42 Cummings Park, Woburn, Massachusetts 01801
                  ---------------------------------------------
                    (Address of principal executive offices)


Registrant's telephone number, including area code: (781) 933-5400

Check whether the issuer (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding
12 months (or for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements for the past
90 days. Yes X No __

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date:

         Common Stock                                20,766,489  Shares
         ------------                                ------------------
       $.00042 Par Value                      (Outstanding on August 21, 2001)


<PAGE>


                        booktech.com, inc. AND SUBSIDIARY

                              INDEX TO FORM 10-QSB

PART I.   FINANCIAL INFORMATION

ITEM 1--Financial Statements:

         Unaudited Condensed Consolidated Statements of Operations for
           the Three Months Ended June 30, 2001 and 2000 ...................   3

         Unaudited Condensed Consolidated Statements of Operations for
           the Six Months Ended June 30, 2001 and 2000 .....................   4

         Unaudited Condensed Consolidated Balance Sheets as of
           June 30, 2001 and December 31, 2000 .............................   5

         Unaudited Condensed Consolidated Statements of Cash Flows for
           the Six Months Ended June 30, 2001 and 2000 .....................   6

         Notes to Unaudited Condensed Consolidated Financial Statements ....   7

ITEM 2--Management's Discussion and Analysis ...............................  17


PART II.   OTHER INFORMATION

ITEM 1--Legal Proceedings ..................................................  22

ITEM 3--Defaults Upon Senior Securities ....................................  22

ITEM 6--Exhibits and Reports on Form 8-K ...................................  23

Signatures .................................................................  24

Exhibit 11 .................................................................  25


                                       2
<PAGE>


PART 1. FINANCIAL INFORMATION

        booktech.com, inc. AND SUBSIDIARY

        CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
        (UNAUDITED)

<TABLE>
<CAPTION>
                                                               Three Months Ended June 30,
                                                               ---------------------------
                                                                    2001          2000
                                                               ------------   ------------
<S>                                                            <C>            <C>
NET SALES ...................................................  $    214,708   $    168,009

COST OF SALES ...............................................       241,284        351,043
                                                               ------------   ------------
              Gross margin ..................................       (26,576)      (183,034)
                                                               ------------   ------------
OPERATING EXPENSES
 Selling, marketing and general and administrative (excluding
   stock-based compensation costs of $471,223 in 2001 and
   $1,413,379 in 2000 .......................................     1,714,179      1,573,924

 Impairment of long lived assets ............................     3,549,164           --

 Stock-based compensation ...................................       471,223      1,413,379
                                                               ------------   ------------
              Total operating expenses ......................     5,734,566      2,987,303
                                                               ------------   ------------
LOSS FROM OPERATIONS ........................................    (5,761,142)    (3,170,337)
                                                               ------------   ------------
INTEREST EXPENSE TO RELATED PARTIES .........................        91,524           --
OTHER INTEREST EXPENSE ......................................        79,390         14,497
                                                               ------------   ------------
              Total interest expense ........................       170,914         14,497
                                                               ------------   ------------
INTEREST INCOME .............................................          --           26,679
                                                               ------------   ------------
NET LOSS ....................................................    (5,932,056)    (3,158,155)

ACCRUED DIVIDENDS ON PREFERRED STOCK ........................        64,771         64,771
                                                               ------------   ------------
NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS ................  $ (5,996,827)  $ (3,222,926)
                                                               ============   ============
NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS PER
 SHARE--BASIC AND DILUTED ...................................  $      (0.29)  $      (0.17)
                                                               ============   ============
SHARES USED IN COMPUTING BASIC AND DILUTED NET
 LOSS PER SHARE .............................................    20,766,489     18,739,033
                                                               ============   ============
</TABLE>

       See Notes to Unaudited Condensed Consolidated Financial Statements.


                                       3
<PAGE>


        booktech.com, inc. AND SUBSIDIARY

        CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
        (UNAUDITED)

<TABLE>
<CAPTION>
                                                                 Six Months Ended June 30,
                                                                ---------------------------
                                                                    2001           2000
                                                                ------------   ------------
<S>                                                             <C>            <C>
NET SALES ...................................................   $    821,299   $    492,743
COST OF SALES ...............................................      1,007,662        834,415
                                                                ------------   ------------
              Gross margin ..................................       (186,363)      (341,672)
                                                                ------------   ------------
OPERATING EXPENSES

 Selling, marketing and general and administrative (excluding
   stock-based compensation costs of $857,156 in 2001 and
   $1,660,793 in 2000).......................................      3,148,036      2,534,760

 Impairment of long lived assets ............................      3,549,164           --

 Stock-based compensation ...................................        857,156      1,660,793
                                                                ------------   ------------
              Total operating expenses ......................      7,554,356      4,195,553
                                                                ------------   ------------
LOSS FROM OPERATIONS ........................................     (7,740,719)    (4,537,225)
                                                                ------------   ------------
INTEREST EXPENSE TO RELATED PARTIES .........................        183,669         57,858
OTHER INTEREST EXPENSE ......................................         92,333         40,351
                                                                ------------   ------------
              Total interest expense ........................        276,002         98,209
                                                                ------------   ------------
INTEREST INCOME .............................................           --           26,679
                                                                ------------   ------------
NET LOSS ....................................................     (8,016,721)    (4,608,755)

ACCRUED DIVIDENDS ON PREFERRED STOCK ........................        128,214         64,771
                                                                ------------   ------------
NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS ................   $ (8,144,935)  $ (4,673,526)
                                                                ============   ============
NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS PER
 SHARE--BASIC AND DILUTED ...................................   $      (0.41)  $      (0.35)
                                                                ============   ============
SHARES USED IN COMPUTING BASIC AND DILUTED NET
 LOSS PER SHARE .............................................     20,079,210     13,277,210
                                                                ============   ============
</TABLE>


       See Notes to Unaudited Condensed Consolidated Financial Statements.


                                       4
<PAGE>


        booktech.com, inc. AND SUBSIDIARY

        CONDENSED CONSOLIDATED BALANCE SHEETS
        (UNAUDITED)

<TABLE>
<CAPTION>

                                                                                     June 30,      December 31,
                                                                                       2001            2000
                                                                                   ------------    ------------
<S>                                                                                <C>             <C>
ASSETS
CURRENT ASSETS:
 Cash ..........................................................................   $     17,118    $      4,611
 Accounts receivable, less allowance for uncollectible amounts and returns
  of $120,700 in 2001 and $78,100 in 2000 ......................................        253,430         205,503
 Other current assets ..........................................................         69,770          51,136
                                                                                   ------------    ------------
           Total current assets ................................................        340,318         261,250
                                                                                   ------------    ------------

PROPERTY AND EQUIPMENT, NET ....................................................      1,000,044       3,713,495

OTHER ASSETS:
Acquired technology and patent application .....................................           --           993,103
Acquired customer list, net ....................................................        400,000         944,138
Deposits and other assets ......................................................         24,353          75,854
                                                                                   ------------    ------------
           Total other assets...................................................        424,353       2,013,095
                                                                                   ------------    ------------
           TOTAL ...............................................................   $  1,764,715    $  5,987,840
                                                                                   ============    ============

LIABILITIES AND STOCKHOLDERS' DEFICIENCY
CURRENT LIABILITIES:
 Bank overdraft ................................................................   $       --      $     25,681
 Current portion of long-term debt .............................................        886,883         888,587
 Current portion of long-term debt due to related parties ......................      2,756,719       1,013,100
 Liability related to factored accounts receivable .............................        205,882            --
 Accounts payable, including past due amounts ..................................      4,247,286       4,009,090
 Accrued payroll ...............................................................        997,324         344,041
 Accrued interest expense to related parties ...................................        101,823          17,660
 Accrued other expenses ........................................................        202,585         181,192
                                                                                   ------------    ------------
           Total current liabilities ...........................................      9,398,502       6,479,351
                                                                                   ------------    ------------

LONG-TERM DEBT .................................................................         31,374          11,585
                                                                                   ------------    ------------
DEFERRED LEASE OBLIGATION ......................................................         78,750         101,250
                                                                                   ------------    ------------

COMMITMENTS AND CONTINGENCIES (Note 5)

STOCKHOLDERS' DEFICIENCY:
 Preferred stock, 5,000,000 shares authorized:
  Convertible Series A, par value $.00042,
   2,135,301 shares issued and outstanding; liquidation preference of
   $3,331,166 at June 30, 2001 and $3,398,688 at December 31, 2000 .............            897             897
  Convertible Series B, par value $.00042,
   No shares issued and outstanding at June 30, 2001; 1,100,000 shares
   issued and outstanding at December 31, 2000 .................................           --               462
 Common stock, authorized 54,523,810 shares, $.00042 par value, 20,766,489
   shares issued and outstanding at June 30, 2001;
   19,146,546 shares issued and outstanding at December 31, 2000 ...............          8,722           8,041
 Dividends payable in shares of common stock ...................................        128,214         195,736
 Additional paid-in capital ....................................................     14,836,142      12,883,890
 Deferred compensation .........................................................     (1,023,908)        (16,115)
 Accumulated deficit ...........................................................    (21,693,978)    (13,677,257)
                                                                                   ------------    ------------
           Total stockholders' deficiency ......................................     (7,743,911)       (604,346)
                                                                                   ------------    ------------
           Total ...............................................................   $  1,764,715    $  5,987,840
                                                                                   ============    ============
</TABLE>

        See Notes to Unaudited Condensed Consolidated Financial Statements.


                                       5
<PAGE>


        booktech.com, inc. AND SUBSIDIARY

        CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
        (UNAUDITED)

<TABLE>
<CAPTION>
                                                                    Six Months Ended June 30,
                                                                   --------------------------
                                                                       2001          2000
                                                                   -----------    -----------
CASH FLOWS FROM OPERATING ACTIVITIES:
<S>                                                                <C>            <C>
 Net loss ........................................................ $(8,016,721)   $(4,608,755)
 Adjustments to reconcile net loss to cash used for operating
 activities:
  Depreciation and amortization ...................................    702,109         83,175
  Impairment of long lived assets .................................  3,549,164           --
  Stock-based compensation ........................................    857,156      1,660,793
  Related party interest expense satisfied by issuing convertible
  preferred stock, Series A .......................................       --           56,839
  Amortization of warrants and beneficial conversion feature on
  convertible notes payable to related parties ....................     99,246           --
 (Decrease) increase in cash from:
  Accounts receivable, net .......................................     (47,927)        90,593
  Other current assets ...........................................     (18,634)      (115,707)
  Deposits and other assets ......................................      51,501       (287,300)
  Accounts payable ...............................................     808,823       (603,431)
  Accrued payroll and other expenses .............................     674,676          2,919
  Accrued interest expense to related parties ....................      84,163         (9,798)
  Deferred lease obligation ......................................     (22,500)       (22,500)
                                                                   -----------    -----------
              Net cash used in operating activities ..............  (1,278,944)    (3,753,172)

CASH FLOWS FROM INVESTING ACTIVITIES:
 Expenditures for property and equipment .........................        (581)      (459,526)
 Payment of merger costs .........................................        --         (588,426)
                                                                   -----------    -----------
              Net cash used in investing activities ..............        (581)    (1,047,952)

CASH FLOWS FROM FINANCING ACTIVITIES:
 Net proceeds from factoring of accounts receivable ..............     205,882
 Repayment of bank overdraft .....................................     (25,681)          --
 Proceeds from notes issued to related parties ...................   1,119,746        317,951
 Repayments of notes to related parties ..........................     (46,000)      (456,710)
 Proceeds from other debt financings .............................      32,000      1,500,000
 Repayments of other debt financings .............................     (13,915)      (428,192)
 Net proceeds from issuance of common stock ......................      20,000      5,000,000
                                                                   -----------    -----------
              Net cash provided from financing activities ........   1,292,032      5,933,049

NET INCREASE IN CASH .............................................      12,507      1,131,925

CASH, BEGINNING OF PERIOD ........................................       4,611         82,753
                                                                   -----------    -----------

CASH, END OF PERIOD .............................................. $    17,118    $ 1,214,678
                                                                   ===========    ===========
</TABLE>

       See Notes to Unaudited Condensed Consolidated Financial Statements.


                                       6
<PAGE>


                        booktech.com, inc. AND SUBSIDIARY

         NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1.   NATURE OF BUSINESS AND BASIS OF PRESENTATION

     Nature of Business - booktech.com, inc., a Nevada corporation (the
"Company"), is a digital and on-demand publisher of custom textbooks, also known
as coursepacks, which are distributed primarily through college bookstores. The
Company is organized as one segment reporting to the chief operating
decision-maker, the Company's Chief Executive Officer.

     As discussed in Note 11, the Company has signed a term sheet to sell its
customer list and all course pack related assets (the "Existing Business"). As
of the date of this report, substantially all non-executive employees of the
Company have either been terminated or are no longer working at the Company. As
a result of the Company's lack of personnel and financial resources, the Company
is outsourcing the fulfillment of existing sales orders to the company acquiring
the Existing Business.

     Basis of Presentation - The accompanying condensed consolidated financial
statements are unaudited and have been prepared assuming that the Company will
continue as a going concern. As shown in the condensed consolidated financial
statements, the Company incurred net losses of $8,016,721 and $4,608,755 in the
six-month periods ended June 2001 and 2000, respectively and the Company's
current liabilities at June 30, 2001 and December 31, 2000 of $9,398502 and
$6,479,351, respectively, exceeded its current assets at those dates by
$9,058,184 and $6,218,101, respectively. Moreover, a majority of its accounts
payable of $4,247,286 and $4,009,090 at June 30, 2001 and December 31, 2000,
respectively, were beyond their normal payment terms..

     As a result of management and the Board of Director's decision to sell the
Existing Business pending shareholders approval, the Company does not expect any
future revenues from the existing business beyond August 3, 2001. Also, as
discussed in Notes 4, 5 and 6, the Company is in default on certain provisions
of its lending and other contractual agreements, and, accordingly, the amounts
are callable by the creditors and have been classified as current liabilities
within the accompanying condensed consolidated balance sheets. The Company has
not filed and has not paid payroll taxes since January 15, 2001. The Company has
settled a legal proceeding relative to the non-payment of certain obligations
and may not presently have available financing to satisfy its obligations
resulting from the court judgment. Further, as described in Note 5, a creditor
of the Company has obtained a court order for trustee process attachment and
attached one of the Company's bank accounts. The Company has historically
financed its operating losses and working capital needs principally by (a) loans
from its shareholders, directors and officers, (b) sales of common stock, (c)
trade credit and (d) borrowings from commercial lenders. Although the Company is
currently seeking additional financing to sustain a minimum level of operations
until the sale of the Existing Business is consummated, there can be no
assurance that any additional financing will be available to the Company on
commercially reasonable terms, or at all. Further, due to certain non-compliance
with financial reporting regulations, the American Stock Exchange (the "AMEX")
suspended trading of the Company's common stock in April 2001. On July 6, 2001,
the AMEX lifted the suspension after the Company completed the necessary
filings. There can be no assurance the AMEX will not suspend trading in the
Company's common stock in the future. Future suspensions, if implemented, would
preclude the Company from seeking financing through the public markets until
such time as the AMEX lifts the suspension. Management and the Company's Board
of Directors has not determined what actions with respect to any on going
business activities will occur after the sale of the Existing Business or in the
event that such sale is not completed. These factors, among other things, raise
substantial doubt about the Company's ability to continue as a going concern for
a reasonable period of time.

     Other than the provision for impairment of long-lived assets recorded in
the three-month period ended June 30, 2001, the condensed consolidated financial
statements do not include adjustments relating to the recoverability and
classification of recorded asset amounts and classification of liabilities
should the Company


                                       7
<PAGE>


be unable to continue as going concern. The Company's condensed consolidated
financial statements for the three and six month periods ended June 30, 2001
reflect an impairment charge of approximately $3.5 million related to
management's determination that capitalized costs related to a patent
application process ($993,103), internal use software ($1,506,969), computer
hardware ($497,735), the customer list acquired in 2000 ($441,141), and
furniture ($110,216) have been impaired and such assets will not be realized in
the future. Management of the Company has determined that despite the efforts of
management and outside advisors, the additional capital necessary to either
fully develop these assets to a point where revenues will be generated or use
such assets in revenue generating activities will not occur.

     The Company's continuation as a going concern is dependent upon its ability
to obtain additional financing or refinance current obligations. Management is
continuing its efforts to (1) obtain sufficient short-term financing to satisfy
short-term obligations; (2) reduce operating expenses through the reduction in
staffing and the renegotiation of certain contracts; and (3) negotiate extended
payment terms for current obligations with vendors and/or convert existing
obligations into equity. An investment-banking firm has been engaged by the
Company to assist management and the Board of Directors explore strategic
opportunities including, but not limited to, a sale or merger of the Company, a
recapitalization or other actions to obtain additional financial resources.

2.   MERGER TRANSACTION

     On March 31, 2000, EG Acquisitions Corporation, a Nevada corporation, the
wholly-owned sole subsidiary of Ebony & Gold Ventures, Inc. ("Ebony & Gold"),
merged with and into booktech.com, inc., a Massachusetts corporation
("booktechMass"), pursuant to an Agreement and Plan of Merger (the "Merger")
dated March 31, 2000. Following the Merger, the business to be conducted by
Ebony & Gold was the business conducted by booktechMass prior to the Merger. In
conjunction with the Merger, Ebony & Gold, which is the legal acquirer and
surviving legal entity, changed its name to booktech.com, inc.

     Pursuant to its terms, the Merger involved several transactions, including
the sale of 4,666,667 shares of the Company's common stock, with warrants to
purchase an additional 833,333 shares of common stock, in a Private Placement
(the "Private Placement") to certain accredited investors for an aggregate
purchase price of $7,000,000, including conversion of the notes payable,
advances and accrued interest owed to Verus Investment Holdings, Inc. (at the
time of the Merger, the Company received net cash proceeds of $5,000,000 from
the Private Placement). The Merger was accounted for as a capital transaction
and was treated as a reverse acquisition, as the shareholders of booktechMass
received the larger portion of the voting interests in the combined enterprise.
The Merger costs totaled $582,938, which have been reflected as a reduction in
additional paid-in capital.

     Under the terms of the Merger, the Company was required to use its best
efforts to file a registration statement to register 5,111,667 shares of common
stock by July 31, 2000 and an additional registration statement to register
1,928,823 shares of common stock within six (6) months of the effective date of
the first registration statement or within 30 days of the exercise, in whole or
in part, by Verus Investments Holdings, Inc. of its warrant to purchase 833,333
shares of common stock. Such registration statements have not been filed by the
Company.

3.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     Condensed Consolidated Financial Statements (Unaudited) - The condensed
consolidated financial statements furnished herein are unaudited and in the
opinion of management, reflect all adjustments which are of a normal recurring
nature, necessary to fairly state the Company's financial position, cash flows
and the results of operations for the periods presented and have been prepared
on a basis substantially consistent with the audited financial statements as of
and for the year ended December 31, 2000. Certain information and footnote
disclosures normally included in financial statements prepared in accordance
with accounting principles generally accepted in the United States of America
for annual periods have been condensed or omitted.


                                       8
<PAGE>


3.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Accordingly, these unaudited condensed consolidated financial statements should
be read in conjunction with the Company's annual financial statements included
in a Form 10-KSB on file with the Securities and Exchange Commission. The
operating results for the interim periods presented are not necessarily
indicative of expected performance for the entire year.

     Concentration of Credit Risk and Major Customer Information - Financial
instruments that potentially expose the Company to significant concentrations of
credit risk consist principally of accounts receivable. The Company performs
ongoing credit evaluations of its customers and does not require collateral. In
addition, the Company maintains allowances for potential credit losses, and such
losses, in the aggregate, have not exceeded management expectations. One
customer accounted for 33% and 49% of net sales for the three month period ended
June 30, 2001 and 2000 respectively. One customer accounted for 23% and 50% of
net sales for the six-month periods ended June 30, 2001 and 2000, respectively.
This same customer accounted for 23% and 16% of the accounts receivable at June
30, 2001 and December 31, 2000, respectively.

     Principles of Consolidation - The condensed consolidated financial
statements include the accounts of the Company and its wholly owned subsidiary
after the elimination of all significant intercompany balances.

     Stock-Based Compensation - The Company accounts for stock options granted
to employees using the intrinsic value method in accordance with Accounting
Principles Board Opinion ("APB") No. 25, "Accounting for Stock Issued to
Employees", and complies with the disclosure provisions of Statement of
Financial Accounting Standards ("SFAS") No. 123, "Accounting for Stock-Based
Compensation."

     Equity instruments issued to non-employees are accounted for in accordance
with the provisions of SFAS No. 123 and Emerging Issues Task Force ("EITF")
Issue No. 96-18, "Accounting for Equity Instruments That Are Issued To Other
Than Employees for Acquiring, or in Conjunction with Selling, Goods or
Services". All transactions in which goods or services are the consideration
received for the issuance of equity instruments are accounted for based on the
fair value of the consideration received or the fair value of the equity
instrument issued, whichever is more reliably measurable. The measurement date
of the fair value of the equity instrument issued is the earlier of the date on
which the counterparty's performance is complete or the date on which it is
probable that performance will occur.

     Net Loss per Common Share - Basic net loss per common share is computed by
dividing net loss attributable to common stockholders by the weighted average
number of common shares outstanding for the period. Diluted net loss per common
share reflects, in addition to the weighted average number of common shares, the
potential dilution if common equivalent shares outstanding were exercised and/or
converted into common stock, unless the effect of such equivalent shares was
antidilutive. Basic and diluted loss per common share are the same since
potentially dilutive stock options, common stock warrants, common stock issuable
upon the conversion of the convertible preferred stock and unvested restricted
stock for the three and six month periods ended June 30,2001 and 2000 are
antidilutive. Such anti-dilutive shares total 4,806,405, 4,458,263, 4,209,496
and 2,951,394 for the three and six month periods ended June 30, 2001 and 2000,
respectively.

     Recent Accounting Pronouncements - On June 29, 2001, Statement of Financial
Accounting Standards ("SFAS") No. 141, "Business Combinations" was approved by
the Financial Accounting Standards Board ("FASB"). SFAS No. 141 requires that
the purchase method of accounting be used for all business combinations
initiated after June 30, 2001. Goodwill and certain intangible assets will
remain on the balance sheet and not be amortized. On an annual basis, and when
there is reason to suspect that their values have been diminished or impaired,
these assets must be tested for impairment, and write-downs may be necessary.
The Company is required to implement SFAS No. 141 on July 1, 2001 and it has not
determined the impact, if any, that this statement will have on its consolidated
financial position or results of operations.

     On June 29, 2001, SFAS No. 142, "Goodwill and Other Intangible Assets" was
approved by the FASB. SFAS No. 142 changes the accounting for goodwill from an
amortization method to an impairment-only approach. Amortization of goodwill,
including goodwill recorded in past business combinations, will cease upon


                                       9
<PAGE>


adoption of this statement. The Company is required to implement SFAS No. 142 on
January 1, 2002 and it has not determined the impact, if any, that this
statement will have on its consolidated financial position or results of
operations.

     One January 1, 2001, the Company adopted the pronouncements of SFAS No.
133, "Accounting for Derivative Instruments and Hedging Activities". The effect
of this adoption did not impact the Company's financial Statements.

     Supplemental Cash Flow Information - The following table sets forth certain
supplemental cash flow information for the six-month periods ended June 30, 2001
and 2000:

<TABLE>
<CAPTION>

                                                                                      2001           2000
                                                                                    -------         ------
     <S>                                                                            <C>          <C>
     Cash paid during the period for interest ..................................    $ 5,367         $10,829
     Non-Cash Financing Activities
       Conversion of accounts payable into long-term debt ......................    570,627            --
       Dividends on convertible preferred stock, Series A, paid in shares of
         Common stock ..........................................................    195,736            --
       Conversion of convertible preferred stock, Series B, into common
         Stock .................................................................        462            --
       Conversion of related party loans and accrued interest into preferred
         Stock .................................................................       --         3,216,171
       Acquisition of technology and related patent application with the
         issuance of common stock ..............................................       --           993,103
       Conversion of Verus Investment Holdings, Inc. notes payable, advances
         and related accrued interest into common stock ........................       --         2,024,537
       Property and equipment acquired through the issuance of debt and trade
         credit ................................................................       --         2,096,099
       Liabilities to the former officers of Ebony & Gold Ventures, Inc.
         forgiven in conjunction with the reverse merger .......................       --            17,564


4.   NOTES PAYABLE AND OTHER DEBT (INCLUDING RELATED PARTY FINANCINGS)

Notes payable and other debt consist of the following at:

<CAPTION>

                                                                                      June 30,      December 31,
                                                                                        2001           2000
                                                                                    -----------     -----------
     <S>                                                                            <C>             <C>
     Related Party Obligations:
          Notes payable to Verus Investment Holdings, Inc. (1) .................    $ 2,139,007     $ 1,139,261
          Note payable to Copytron, Inc. (1) ...................................         50,000          50,000
          Note payable to Xerox (1) ............................................        455,627            --
          Notes payable to stockholders(1) .....................................        149,000            --
          Note payable other(1) ................................................         40,000            --

     Other Obligations:
          Capital lease obligations (1) ........................................        872,730         883,105
          Ford Motor Credit Company (2) ........................................         15,803          17,067
          Note payable to bank (2) .............................................         29,724            --
                                                                                    -----------     -----------

          Subtotal .............................................................      3,751,891       2,089,433
          Less: unamortized discount ...........................................        (76,915)       (176,161)
                                                                                    -----------     -----------
             Total debt.........................................................      3,674,976       1,913,272
          Less: Current portion of debt due to related parties..................     (2,756,719)     (1,013,100)
                Current portion of other debt...................................       (886,883)       (888,587)
                                                                                    -----------     -----------
         Long-term debt.........................................................    $    31,374     $    11,585
                                                                                    ===========     ===========
</TABLE>

(1)  Classified as current liability at June 30, 2001 and December 31, 2000.

(2)  Classified in accordance with scheduled repayment terms.


                                       10
<PAGE>


     Notes payable to Verus Investment Holdings, Inc. - During the second
quarter of 2001, Verus Investment Holdings, Inc. ("Verus"), a stockholder and a
British Virgin Islands Corporation controlled by a director of the Company,
loaned the Company $1,000,000 through a promissory note. This note is secured by
all assets of the Company, not previously secured, whether now owned by the
Company or hereafter acquired and carries interest at a rate at 8% and is
convertible at any time at a conversion price of the lower of $.73 or the
average of AMEX reported closing prices from the 21st to 40th trading days after
the Company's stock is relisted; or the average of closing prices report by the
AMEX for the five trading days prior to the date of the conversion notice. Since
the fair market value of the Company's common stock was $.73 on the date the
$1,000,000 convertible note payable was issued and until the 41st trading day
following the day the Company began trading (or July 6, 2001), we can not
determine whether there is a beneficial conversion feature through June 30,
2001.

     During 2000, Verus provided financing totaling $939,261 through a
promissory note and $200,000 through a convertible note to fund the Company's
working capital needs. These notes are unsecured, carry interest at a rate of 8%
and 10%, respectively per annum and mature December 31, 2001 and November 22,
2001, respectively. The $200,000 convertible note is convertible, at the option
of the holder, into shares of common stock on the earlier of 1) November 22,
2001 at a conversion rate of $2.35 per share or 2) at any time at a conversion
rate of $2.94 per share when the average price, as defined in the convertible
note agreement, exceeds $3.675 per share.

     Since the fair market value of the Company's common stock was $2.56 on the
date the $200,000 convertible note payable was issued and the note could
ultimately be converted at a lower per share value, the convertible note
contained a beneficial conversion feature. In accordance with Emerging Issues
Task Force Issue No. 00-27 "Application of Issue No. 98-5 to Certain Convertible
Instruments" the Company allocated $101,276 of the proceeds received to the
beneficial conversion feature which was recorded as a discount on the issuance
of the debt and an increase to additional paid-in capital. The discount is being
amortized and recognized through a charge to interest expense over the twelve
month period ending November 22, 2001. No portion of the convertible note has
been converted as of June 30, 2001.

     In addition during 2000, Verus was granted warrants to purchase 50,000
shares of common stock at $2.94 per share in connection with the financing
transactions. The fair value of the warrants of $83,317 was recorded as a
discount on the issuance of the convertible notes and an increase in additional
paid-in capital. The discount is being amortized and recognized through a charge
to interest expense using the effective interest method through the maturity
date of November 22, 2001.

     Note payable to Copytron, Inc. - On August 2, 2000, the Company purchased
the customer list of Copytron for an initial cost of $1.0 million, including
$100,000 payable in cash at closing, $200,000 in promissory notes and the
balance payable in shares of its common stock. The note, which carries interest
at a rate of 6% per annum, was payable in three installments with the last
installment of $100,000 due on October 9, 2000. The Company did not pay $50,000
against the last installment of the note as of June 30, 2001. Accordingly, the
Company is in default under the terms of the promissory note and the note is
classified as a current liability.

     Note payable to Xerox - On January 10, 2001, the Company refinanced
$455,627 of accounts payable due to Xerox under the services agreement with a
promissory note. The note is payable in monthly installments of $41,339,
including interest at a rate of 16% per annum, beginning on February 15, 2001.
The final payment will be due on January 10, 2002 unless the Company defaults
under the terms of the note in which case, the promissory note becomes fully due
and payable. The Company has not made the required payments under the promissory
note in 2001 and, accordingly, the Company is in default under the terms of the
note and the note is classified as a current liability. A stockholder has
personally guaranteed the Company's performance under


                                       11
<PAGE>


this note. A member of Xerox's executive management served as a member of the
Company's Board of Directors until July 27, 2001, at which time he resigned from
his position with the Company.

     Notes payable stockholders -Through June 30, 2001, the Company has borrowed
notes of $195,000 from several officers and key employees. The notes are payable
at various dates through June 30, 2001, are unsecured and accrue interest at
annual rates ranging from 5%-8%. Through June 30, 2001, $46,000 of these notes
were repaid by the Company. At June 30, 2001, $149,000 notes are in default.

     Note payable other -As of June 30, 2001, the Company has an outstanding
note of $40,000 from a director of the Company. It is non-interest bearing and
is unsecured.

     Capital lease obligations - The Company leases computer hardware and
software and certain office equipment under non-cancelable leases expiring at
various dates through 2004. The Company is in arrears and is accordingly in
default on certain provisions of these leases. Accordingly, the Company has
classified the leases as a current liability (see Note 5 with respect to Hewlett
Packard).

     Ford Motor Credit Company - On March 2, 2000, the Company financed the
purchase of a motor vehicle. The loan is due in 48 monthly installments of $435,
including interest at an annual rate of 0.9%, with a final maturity on April 15,
2004.

     Note payable to bank - On January 15, 2001, the Company borrowed $32,000
from a bank. The loan is payable in 48 monthly installments of $793, including
interest at an annual rate of 8.75%, with a final maturity on December 15, 2004.
The loan is secured by a Company vehicle.

5.   COMMITMENTS AND CONTINGENCIES

     Litigation - The Company was previously in litigation with Advizex, Inc.
related to outstanding amounts owed by the Company to Advizex. A settlement was
reached on June 5, 2001. The Company entered into a Consent Judgment, which will
require the Company to pay $120,000 in cash beginning in July 2001 in equal
installments over a twelve month period. In addition, the Company will issue
164,384 shares of its common stock to Advizex with a value of $120,000 based on
the June 5, 2001 market price per share of $.73. The Company made the July
payment.

     The Company was named a defendant in an action filed by Hewlett Packard
Company ("Hewlett Packard") on August 9, 2001. In its complaint, Hewlett Packard
seeks damages in the amount of $913,511 due to the Company's alleged breach of
contract. In connection with this action, Hewlett Packard obtained a court order
for trustee process attachment and attached one of the Company's bank accounts
in the amount of approximately $90,000. The Company is currently negotiating a
settlement of Hewlett Packard's claims.

     Purchase of Copytron, Inc. Customer List - In connection with the purchase
of the customer list on August 2, 2000, the Company is required to issue
additional shares of common stock on August 2, 2001 and 2002, up to a maximum
fair market value of $150,000 on each date, if the revenues generated from the
customer list for the 12 month periods ended August 1, 2001 and August 1, 2002
exceed specified target amounts. The Company believes that no additional shares
will be issued for the 12 month period ended August 1, 2001. In addition, the
Company also entered into a two-year consulting agreement (extendable for a
third year at the option of the Company) with a principal of Copytron. The
consulting agreement provides for annual cash compensation of $50,000, which was
to be paid in the amount of $4,666 monthly. Approximately $27,996 and $9,300
related to the consulting agreement are accrued at June 30, 2001 and December
31, 2000 respectively. On the one year anniversary of the agreement, and in the
event that the fair value of the Company's common stock is less than the fair
market value, as defined in the agreement, the Company is obligated to pay,
either in cash or common stock at the discretion of the Company, an amount,
which when combined with the value of the original issuance of the Company's
common stock has an aggregate value of $700,000. The Company intends to satisfy
this requirement by issuing additional shares of common stock. As calculated
using the fair value of the Company's common stock as defined in the agreement,
the Company would be obligated to issue an additional 1,761,702 shares.


                                       12
<PAGE>


     Services Agreement - In March 1999, the Company entered into an agreement
with Xerox Corporation ("Xerox") to provide reproduction services. The term of
the agreement is 60 months and includes base payment increases over the term of
the agreement. The total amount of the base service payments is being charged to
expense using the straight-line method over the term of the agreement. The
Company has recorded a deferred credit to reflect the excess of the service
expense over cash payments since the inception of the agreement. The deferred
credits of $123,750 and $146,250 are reflected within accrued other expense and
deferred lease obligation within the accompanying condensed consolidated balance
sheets at June 30, 2001 and December 31, 2000, respectively. A member of Xerox's
executive management served as a member of the Company's Board of Directors
until July 27, 2001, at which time he resigned from his position with the
Company. Future annual scheduled minimum payments as of June 30, 2001 under the
service agreement are as follows:

                  2001                                  $   447,138
                  2002                                      894,276
                  2003                                      894,276
                  2004                                      223,569
                                                         ----------
                                     Total               $2,459,259
                                                         ==========

     At December 31, 2000, the Company was past due on prior service payments.
On January 10, 2001, the amounts due to Xerox were refinanced into a promissory
note. At June 30, 2001, the Company was in default under the terms of the
promissory note. The Company paid $0 and $959,834 to Xerox under the Services
Agreement during the six-month period ended June 30, 2001 and 2000,
respectively.

     Payroll Taxes - The Company has not filed and has not paid payroll taxes
since January 15, 2001. Accrued payroll taxes, penalties and interest have been
estimated and included in these financial statements.

     Accounts Receivable Factoring Agreement - On March 17, 2001, the Company
factored with recourse the majority of accounts receivable and has received net
proceeds of $205,882. Amounts are advanced to the Company based on an advance
rate of 80%. Fees for these services are expected to average 6% of amounts
factored. Due to the full recourse provisions, the Company is accounting for the
factor transactions in a manner similar to borrowing.

6.   TRANSACTIONS WITH RELATED PARTIES

     On May 14, 2001, William G. Christie was appointed President, Chief
Executive Officer and Chairman of the Board of Directors. In connection with his
appointment, Mr. Christie was granted an option to purchase up to an aggregate
of 2,307,388 shares of common stock at an exercise price of $.00042 per share.
One third of the option vested on May 14, 2001, and the remaining options will
vest in equal installments on the first and second anniversary of Mr. Christie's
appointment. (See Note 9)

     As of June 30, 2001, the Company has an outstanding note of $40,000 from a
director of the Company. It is non-interest bearing and is unsecured.

     On March 31, 2001 the Company issued, at fair market value, 2,000 shares of
common stock and options to purchase 184,000 shares of common stock to two of
its Directors.

     On February 13, 2001 the Company borrowed $100,000 from a shareholder and
officer of the Company. This borrowing is unsecured and is due and payable on
June 30, 2001 with interest at 8% per annum. As of June 30, 2001 the Company is
in default for the full amount.

     On January 19, 2001 the Company borrowed $40,000 from two additional
officers. These promissory notes are unsecured, and payable with interest at a
rate of 5% per annum, and are currently in default.

     On January 5, 2001, the Company borrowed $55,000 from two of its officers.
These promissory notes are unsecured, bear interest at 5% per annum and are
currently in default. As of August 21, 2001, $48,000 has been repaid.


                                       13
<PAGE>


     A member of Xerox's executive management served as a member of the
Company's Board of Directors until July 27, 2001, at which time he resigned from
his position with the Company. The Company purchases services from Xerox under
an equipment supplier contract that expires on March 1, 2004 and is currently in
default on payments under the contract and a note to Xerox (see Note 4).

     In conjunction with the Merger on March 31, 2000, a total of $2,815,000 in
loans from shareholders plus the related accrued interest of $401,171 were
converted into 2,135,301 shares of Series A preferred stock.

     During the six months ended June 30, 2000, the Company repaid $456,710 in
principal on loans from shareholders. On March 31, 2000, the Company received
$317,951 in advances from a shareholder.

     On March 31, 2000, pursuant to the terms of the Merger Agreement, the
Company sold to certain investors 4,666,667 shares of its common stock and
warrants to purchase 833,333 shares of its common stock for an aggregate
purchase price of $7,000,000 including conversion of the notes payable, advances
and accrued interest owed to Verus.

7.   COMMON AND PREFERRED STOCK

     On March 31, 2001, as required under the Series B Preferred Stock
Agreement, 1,100,000 shares of the Series B Preferred Stock automatically
converted each whole share of Series B Preferred Stock into one fully paid and
non-assessable share of common stock.

     On March 22, 2001, the Company entered into an equity line of credit with a
private investor. Under the terms of this agreement, upon the effective
registration of additional shares of Company common stock, the investor will
purchase up to an aggregate of $10 million of such common stock over the course
of 36 months from the date of the agreement at a purchase price equal to 91% of
the market price as defined therein. The Company has not determined whether such
a filing is practical, or if made could be declared effective. The amount of
shares to be put to the investor by us is subject to certain average daily
trading volumes for the Company's common stock in the U.S financial markets. In
connection with this agreement, the Company issued 250,000 shares of common
stock for no additional consideration to an affiliate of the investor with a
fair market value of $.85 per share on March 22, 2001. The Company has recorded
$212,500 in stock-based compensation in the six months ended June 30, 2001
related to these shares.

     On March 15, 2001, the Company offered to issue 500,000 shares of its
common stock to Dutchess Advisors, Ltd. ("Dutchess") as consideration for their
advisory services in connection with the Company's current efforts to secure
additional financing through a private placement. The shares would be issued
pursuant to Regulation D under the Securities Act, as amended. Of the total
shares that could be issued, 100,000 shares contain piggyback registration
rights. The Company rescinded the offer on June 22, 2001 and no shares have been
offered to Dutchess. An additional finder's fee may be paid in cash to Dutchess
upon completion of a private placement transaction.

     On February 8, 2001, the Company sold 40,000 shares of its common stock to
an accredited investor for $20,000. The proceeds were used to fund the Company's
working capital requirements.

     On January 1, 2001, the Company issued 113,668 common stock shares as
payment for the $195,736 stock dividend accrued at December 31, 2000.

     In the event of any liquidation, dissolution or winding up of the Company,
either voluntary or involuntary (a "Liquidation Event"), the holders of the
Series A preferred stock have a liquidation preference over any distribution to
securities junior to the Series A Preferred Stock equal to $1.50 per share plus
any accrued but unpaid dividends. Dividends on the Series A preferred stock
accrue daily at the annual rate of 8%. At June 30, 2001 and December 31, 2000,
the liquidation preference approximated $3.3 million and $3.4 million,
respectively.


                                       14
<PAGE>


8.   IMPAIRMENT OF LONG LIVED ASSETS

     The Company's condensed consolidated financial statement for the three and
six month periods ended June 30, 2001 reflect an impairment charge of
approximately $3.5 million related to management's determination that
capitalized costs related to a patent application process ($993,103), internal
use software ($1,506,969), computer hardware ($497,735), the customer list
acquired in 2000 ($441,141), and furniture ($110,216) have been impaired and
such assets will not be realized in the future. Management of the Company has
determined that despite the efforts of management and outside advisors, the
additional capital necessary to either fully develop these assets to a point
where revenues will be generated or use such assets in revenue generating
activities will not occur.

9.   STOCK-BASED COMPENSATION

     The Company accounts for stock options granted to employees and
non-employee directors in accordance with APB No. 25. Under APB No. 25,
compensation expense is recorded when fixed award options are granted with
exercise prices at less than the fair value of the common stock on the date of
grant. Options with a cashless exercise feature are accounted for as variable
award options. Variable award options are subject to remeasurement criteria and
could result in additional future compensation expense until such time as the
options are either exercised, forfeited or expire without exercise.

     The Company recorded stock-based compensation expense of $857,156 and
$1,660,793 during the six-month periods ended June 30, 2001 and 2000. Additional
stock-based compensation expense will be recorded in the future as the deferred
compensation of $1,023,908 at June 30, 2001 is amortized over the remaining
two-year vesting period, and variable award options are remeasured at each
reporting date. William G. Christie was appointed President, Chief Executive
Officer and Chairman of the Board of Directors on May 14, 2001. In connection
with his appointment, Mr. Christie was granted an option to purchase up to an
aggregate of 2,307,388 shares of common stock at an exercise price of $.00042
per share. One third of the option vested on May 14, 2001, and the remaining
options will vest in equal installments on the first and second anniversary of
Mr. Christie's appointment. The Company recognized deferred compensation of
$1,683,424 upon the issuance of the option of which $666,373 was reflected as
compensation expense during the three months ended June 30, 2001.

10.  NET LOSS PER SHARE

     A reconciliation of net loss and weighted-average common shares outstanding
for purposes of calculating basic and diluted net income per share is as follows
for the three and six months ended June 30:

<TABLE>
<CAPTION>

     Three Months Ended June 30:                                                     2001           2000
     ---------------------------                                                 -----------    -----------
     <S>                                                                         <C>            <C>
     NUMERATOR:
        Net loss .............................................................   $(5,932,056)   $(3,158,155)
        Preferred stock dividends ............................................        64,771         64,771
                                                                                 -----------    -----------
        Net loss attributable to common stockholders .........................   $(5,996,827)   $(3,222,926)
                                                                                 ===========    ===========

     DENOMINATOR:
        Weighted average number of common shares outstanding:
           Common stock ......................................................    20,766,489     18,739,933
             Effect of potentially dilutive common shares ....................          --             --
                                                                                 -----------    -----------
             Total ...........................................................    20,766,489     18,739,933
                                                                                 ===========    ===========

     Six Months Ended June 30:                                                      2001            2000
     -------------------------                                                   -----------    -----------

     NUMERATOR:
        Net loss .............................................................   $(8,016,721)   $(4,608,755)
        Preferred stock dividends ............................................       128,214         64,771
                                                                                 -----------    -----------
        Net loss attributable to common stockholders .........................   $(8,144,935)   $(4,673,526)
                                                                                 ===========    ===========

     DENOMINATOR:
        Weighted average number of common shares outstanding:
           Common stock ......................................................    20,079,210     13,277,210
             Effect of potentially dilutive common shares ....................          --             --
                                                                                 -----------    -----------
             Total............................................................    20,079,210     13,277,210
                                                                                 ===========    ===========
</TABLE>


                                       15
<PAGE>


11.  SUBSEQUENT EVENTS

     On August 3, 2001, the Company signed a term sheet relating to the sale of
the Company's existing business coursepack-related assets (including all master
coursepacks, all orders for coursepacks, and any other tangible and intangible
asset necessary to conduct the coursepack business of booktech.com on a
going-forward basis) to Pro Quest Information and Learning Company (the
"Purchaser") for $400,000. Payment terms include a non-refundable $100,000 down
payment within one (1) business day of execution of the term sheet, plus 30% of
net revenues recognized by the purchaser each week from an outsourcing agreement
to fulfill the Company's existing sales orders. The down payment and the weekly
revenue sharing will be credited against the final purchase price at closing.
The maximum purchase price to be paid by the Purchaser is $700,000. Pursuant to
the terms of the purchase agreement, the transaction must be completed by
October 1, 2001. The closing of the sale may be subject to approval by the
Company's shareholders.

     On August 9, 2001, the Company entered into an interim financing agreement
with Genesis Alternative Investments LLC (the "Lender"). The Company will issue
a convertible promissory note in the principal amount of $100,000 to the Lender.
The note is convertible at the option of the holders into shares of the
Company's common stock at the lower of (i) $0.25 per share, (ii) the average of
the three lowest AMEX reported closing prices during the sixty (60) trading days
prior to the conversion notice, or (iii) a 25% discount of the average closing
price reported by the AMEX for the five trading days prior to the conversion
notice. The note carries interest at a rate of 10% per annum, is due on October
7, 2001 and is secured by certain assets. The note is subject to mandatory
prepayment in the event the Company completes an equity financing of at least
$250,000 prior to October 7, 2001. In connection with this agreement, the
Company will also issue 400,000 common stock warrants to the Lender. The fair
value of the warrants will be recorded as discount on the issuance of the debt
and amortized to interest expense over the life of the note.

     On July 31, 2001, the Company retained the advisory and investment banking
services of Atlas Capital services, Inc. ("Atlas") to explore strategic
alternatives available to the Company, including, but not limited to, (i) an
investment in the Company, (ii) a sale, merger, joint venture or otherwise,
whether effected in a single transaction or a series of related transactions, in
which, 50% or more of the voting power of the Company or all or a substantial
portion of its business or assets are combined with or transferred to another
company (excluding reincorporations), or (iii) the restructuring of the
Company's activities. Atlas's engagement was to be for a minimum period of three
(3) months, with subsequent cancellation at any time, with or without cause,
upon written notice. In addition to reimbursement of all reasonable out-of
pocket expenses, Atlas will also be paid a transaction fee relative to the
strategic alternatives enumerated immediately above. If its restructuring
services are deemed to have been utilized, Atlas will be paid approximately 5%
of the outstanding stock of the Company. If its financing services are utilized,
Atlas will be paid (i) cash equal to 10% of all consideration received by the
Company and (ii) warrants to purchase 10% of the aggregate number of
fully-diluted and/or exercised or converted shares of the Company's common stock
as are purchased in the transaction. In the event a merger occurs, Atlas shall
be paid 5% of the outstanding common stock of the post-merger Company.

                                      *****


                                       16
<PAGE>




                          PART I. FINANCIAL INFORMATION

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS

SAFE HARBOR STATEMENT

     Certain statements in this Form 10-QSB, including information set forth
under the following Management's Discussion and Analysis and Results of
Operations, contain trend analysis and other "forward-looking statements." These
statements relate to future events or other future financial performance, and
are identified by terminology such as "may", "will", "should", "expects",
"anticipates", "plans", "intends", believes", "estimates", or "continues" or the
negative of such terms or other comparable terminology. These statements are
only predictions. Actual events or results could differ materially from those
set forth in the forward-looking statements. Moreover, this discussion and
analysis should be read in conjunction with the accompanying condensed
consolidated financial statements for the periods specified and the associated
notes beginning on page 3. Further reference should be made to the Company's
audited financial statements as of December 31, 2000 and for the year then
ended.

Overview

     We are a digital and on-demand publisher of custom textbooks, also known as
coursepacks, which are distributed primarily through college bookstores and
online retailers. We are subject to a number of risks similar to those of other
companies in an early stage of development. Principal among these risks are
dependencies on key individuals, competition from other substitute products and
larger companies, the successful development and marketing of our products, and
the need to obtain adequate additional financing necessary to fund our
operations.

     Our business is highly seasonal in nature. More than 75% of our revenues
are normally generated in the third and fourth quarters of the calendar year
since that period includes the traditional educational publishing selling
season. Accordingly, our operating losses have generally been greater in the
first half of the year during a period when publishing revenues are at their
lowest levels. Moreover, we rely upon a few customers for a significant portion
of our revenues - see Note 3 to the Unaudited Condensed Consolidated Financial
Statements, "Concentration of Credit Risk and Major Customer Information."

     As discussed in Note 11, the Company has signed a term sheet to sell its
customer list and all course pack related assets (the "Existing Business"). We
do not expect that after August 3, 2001, we will generate any further sales
revenue. Also, as of the date of this report, substantially all non-executive
employees of the Company have either been terminated or are no longer working at
the Company. As a result of the Company's lack of personnel and financial
resources, the Company is outsourcing the fulfillment of existing sales orders
to the company acquiring the Existing Business.

     Basis of Presentation - The discussion below assumes we can continue to do
business on a going concern basis, which contemplates the realization of assets
and the satisfaction of liabilities in the normal course of business. As shown
in the condensed consolidated financial statements, the Company incurred net
losses of $8,016,721 and $4,608,755 in the six-month periods ended June 2001 and
2000, respectively and the Company's current liabilities at June 30, 2001 and
December 31, 2000 of $9,398502 and $6,479,351, respectively, exceeded its
current assets at those dates by $9,058,184 and $6,218,101, respectively.
Moreover, a majority of its accounts payable of $4,247,286 and $4,009,090 at
June 30, 2001 and December 31, 2000, respectively, were beyond their normal
payment terms and the Company was in default on many of its debt obligations.

     As a result of management and the Board of Director's decision to sell the
Existing Business, the Company does not expect any future revenues after August
3, 2001. As discussed in Notes 4, 5 and 6, the Company is in default on certain
provisions of its lending and other contractual agreements, and, accordingly,
the amounts are callable by the creditors and have been classified as current
liabilities within the accompanying condensed consolidated balance sheets. The
Company has not filed and has not paid payroll taxes since January 15, 2001. The
Company has settled a legal proceeding relative to the non-payment of certain
obligations and may not presently have available financing to satisfy its
obligations resulting from the court judgment. Further, as described in Note 5,
a creditor of the Company has obtained a court order for trustee process
attachment and attached the Company's


                                       17
<PAGE>


bank account. The Company has historically financed its operating losses and
working capital needs principally by (a) loans from its shareholders, directors
and officers, (b) sales of common stock, (c) trade credit and (d) borrowings
from commercial lenders. Although the Company is currently seeking additional
financing to sustain a minimum level of operations until the sale of the
Existing Business is consummated, there can be no assurance that any additional
financing will be available to the Company on commercially reasonable terms, or
at all. Further, due to certain non-compliance with financial reporting
regulations, the American Stock Exchange (the "AMEX") suspended trading of the
Company's common stock in April 2001. On July 6, 2001, the AMEX lifted the
suspension after the Company completed the necessary filings. There can be no
assurance the AMEX will not suspend trading in the Company's common stock in the
future. Future suspensions, if implemented, would preclude the Company from
seeking financing through the public markets until such time as the AMEX lifts
the suspension. Management and the Company's Board of Directors has not
determined what actions with respect to any on going business activities will
occur after the sale of the Existing Business or in the event that such sale is
not completed. These factors, among other things, raise substantial doubt about
the Company's ability to continue as a going concern for a reasonable period of
time.

     Other that the provision for impairment of long-lived assets recorded in
the three-month period ended June 30, 2001, the condensed consolidated financial
statements do include adjustments relating to the recoverability and
classification of recorded asset amounts and classification of liabilities
should the Company be unable to continue as going concern. The Company's
condensed consolidated financial statements for the three and six month periods
ended June 30, 2001 reflect an impairment charge of approximately $3.5 million
related to management's determination that capitalized costs related to a patent
application process ($993,103), internal use software ($1,506,969), computer
hardware ($497,735), the customer list acquired in 2000 ($441,141), and
furniture ($110,216) have been impaired and such assets will not be realized in
the future. Management of the Company has determined that despite the efforts of
management and outside advisors, the additional capital necessary to either
fully develop these assets to a point where revenues will be generated or use
such assets in revenue generating activities will not occur.

     The Company's continuation as a going concern is dependent upon its ability
to obtain additional financing or refinance current obligations. Management is
continuing its efforts to (1) obtain sufficient short-term financing to satisfy
short-term obligations; (2) reduce operating expenses through the reduction in
staffing and the renegotiation of certain contracts; and (3) negotiate extended
payment terms for current obligations with vendors and/or convert existing
obligations into equity. An investment-banking firm has been engaged by the
Company to assist management and the Board of Directors explore strategic
opportunities including, but not limited to, a sale or merger of the Company, a
recapitalization or other actions to obtain additional financial resources.

     On May 11, 2001, Morris A. Shepard, Ph.D. resigned as President, Chief
Executive Officer and Director of the Company. William G. Christie was appointed
President, Chief Executive Officer and Chairman of the Board of Directors on May
14, 2001. In connection with his appointment, Mr. Christie was granted an option
to purchase up to an aggregate of 2,307,388 shares of common stock at an
exercise price of $.00042 per share. One third of the option vested on May 14,
2001, and the remaining options will vest in equal installments on the first and
second anniversary of Mr. Christie's appointment.

     During the period covered by this report and from June 30, 2001 to the date
of this report, we significantly reduced the number of employees of the Company.
As of August 17, 2001 we have three (3) full time employees and three (3) part
time employees.

RESULTS OF OPERATIONS - THREE MONTHS ENDED JUNE 30, 2001 AND 2000

     Net sales increased 28% to $214,708 in 2001 from $168,009 in 2000.
Approximately $60,000 of the increase was due to sales generated from the
purchase of the Copytron customer list. Sales to Tufts University accounted for
an additional $30,000 and sales to Houghton Mifflin accounted for $28,000. Sales
to Barnes and Noble College Bookstores decreased by $73,000. Sales to Barnes and
Noble College Bookstores accounted for approximately 10% and 52% of net sales in
2001 and 2000, respectively.


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<PAGE>


     Cost of sales were $241,284 in 2001, or 112.4% of net sales, in 2001
compared to $351,043, or 208.9% of net sales in 2000. The lower cost of sales
percentage in 2001 was primarily due to lower print, bind and production costs
as the company engaged various outsource partners to fulfill orders.

     Selling, marketing, and general and administrative expenses (excluding
stock-based compensation) increased to $1,714,179 in 2001 from $1,573,924 in
2000. There are two factors which contributed to the increase of costs. First,
an increase of approximately $295,000 in depreciation and amortization expense
related to property and equipment and to the acquisition of Copytron's customer
list in 2000. Second, an increase in service contracts for $247,000 which
represents the value of the service contracts that we are no longer using in the
production process. Legal expenses also increased due to the costs normally
associated with being a public company. With the exception of the three
increases noted, there was an overall general decrease in selling and
administrative expenses.

     During the three months ended June 30, 2001, we recorded an impairment
charge of approximately $3.5 million related to management's determination that
capitalized costs related to a patent application process ($993,103), internal
use software ($1,506,969), computer hardware ($497,735), the customer list
acquired in 2000 ($441,141), and furniture ($110,216) have been impaired and
such assets will not be realized in the future. Management of the Company has
determined that despite the efforts of management and outside advisors, the
additional capital necessary to either fully develop these assets to a point
where revenues will be generated or use such assets in revenue generating
activities will not occur.

     Stock-based compensation costs were $471,223 in 2001 compared to $1,413,379
in 2000. The stock-based compensation represents the amortization of deferred
compensation on fixed awards, the remeasurement of compensation on variable
award options, and the expense associated with awards of common stock. The
amount in 2000 is due primarily to stock compensation recorded from the issuance
of a greater number of stock and stock option awards with exercise prices below
the fair market value of the Company's common stock.

     Interest expense increased to $170,914 in 2001 from $14,497 in 2000. The
increase is attributed to higher debt level and to the amortization of debt
discounts.

     Due to the uncertainty that exists regarding the future realization of our
tax net operating loss carryforwards, we have fully reserved our deferred tax
assets.

     The net loss increased to $5,932,056 2001 from $3,158,155 in 2000 primarily
due to the provision for impairment of long-lived assets net of $942,156
decrease in stock-based compensation and the improvement on our gross margin.

RESULTS OF OPERATIONS - SIX MONTHS ENDED JUNE 30, 2001 AND 2000

     Net sales increased 67% to $821,299 in 2001 from $492,743 in 2000.
Approximately $200,000 of the increase was due to sales generated from the
purchase of the Copytron customer list. Sales to Harvard Printing and Publishing
Services accounted for an additional $80,000 increase in revenue. We reported
increased sales with Persues Books, Tuft University and Houghton Mifflin for
$38,000, $30,000 and $29,000 respectively. Sales to Barnes and Noble College
Bookstores were lower by $80,000. One customer, Barnes and Noble College
Bookstores accounted for approximately 27% and 50% of net sales in 2001 and
2000, respectively. Sales to Harvard Printing and Publishing Services accounted
for approximately 11% and 2% of net sales in 2001 and 2000, respectively.

     Cost of sales were $1,007,662 in 2001, or 122.7% of net sales, in 2001
compared to $834,415, or 169.3% of net sales in 2000. The lower cost of sales
percentage in 2001 was primarily due to economies of scale as the higher fixed
production costs are spread over the higher sales volume in the first quarter.
In addition, as a result of using the outsource partners in the second quarter,
we were able to lower print and bind and production costs further.

     Selling, marketing, and general and administrative expenses (excluding
stock-based compensation) increased to $3,148,036 in 2001 from $2,534,760 in
2000. Approximately $700,000 of the increase is attributed to increases in
depreciation and amortization expense related to property and equipment and to
the acquisition of a customer list in 2000. Legal expenses also increased due to
the costs normally associated with being a public company. An increase


                                       19
<PAGE>


in service contracts for $247,000 which represents the value of the service
contracts that we are no longer using in the production process.

     During the six months ended June 30, 2001, we recorded an impairment charge
of approximately $3.5 million related to management's determination that
capitalized costs related to a patent application process ($993,103), internal
use software ($1,506,969), computer hardware ($497,735), the customer list
acquired in 2000 ($441,141), and furniture ($110,216) have been impaired and
such assets will not be realized in the future. Management of the Company has
determined that despite the efforts of management and outside advisors, the
additional capital necessary to either fully develop these assets to a point
where revenues will be generated or use such assets in revenue generating
activities will not occur.

     Stock-based compensation costs were $857,156 in 2001 compared to $1,660,793
in 2000. The stock-based compensation represents the amortization of deferred
compensation on fixed awards, the remeasurement of compensation on variable
award options, and the expense associated with awards of common stock. The
amount in 2000 is primarily due to stock compensation recorded from the issuance
of a greater number of stock and stock option awards with exercise prices below
the fair market value of the Company's common stock.

     Interest expense increased to $276,002 in 2001 from $98,209 in 2000. The
increase is attributed to higher debt level, and amortization of debt discounts,
and interest owed to factor.

     Due to the uncertainty that exists regarding the future realization of our
tax net operating loss carryforwards, we have fully reserved our deferred tax
assets.

     The net loss increased to $8,016,721 in 2001 from $4,608,755 in 2000
primarily due to the provision for impairment of long-lived assets net of
$803,637 decrease in stock-based compensation and a $600,000 increase in
depreciation and amortization.

FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES

     To meet our financing needs, we have primarily depended upon loans from
stockholders, directors and officers and sales of our common stock. We have also
relied significantly on (1) the issuance of common stock to finance the purchase
of assets; (2) trade credit; and (3) common stock awards to employees and
non-employees as compensation for their services. Other sources of financing
have included bank debt. We have generally not been in compliance with the
provisions contained in certain of our debt agreements, and accordingly, the
amounts outstanding under these agreements have been classified as a current
liability. As such, we have generally operated from a negative working capital
position. At June 30, 2001 and December 31, 2000, our current liabilities of
$9,398,502 and $6,479,351, respectively, exceeded our current assets by
$9,058,184 and $6,218,101, respectively, and a majority of our accounts payable
at June 30, 2001 and December 31, 2000 are beyond the normal payment terms.

     As shown in our financial statements, we incurred net losses of $ 8,016,721
and $4,608,755 during the six-month periods ended June 30, 2001 and 2000,
respectively. Accordingly, we are currently seeking additional financing to fund
our operations through the sale of Existing Business. From November 2000 through
April 2001, all senior officers deferred their salaries in anticipation of our
securing additional financing. As the new financing has not been secured, the
deferred officers' salaries have been accrued as a liability in the accompanying
condensed consolidated financial statements as of June 30, 2001 and December 31,
2000. On May 6, 2001, we resumed payment of the officers' salaries through the
period ending June 17, 2001. From the period June 18, 2001 through July 29,
2001, the Company did not process any payroll.

     Our cash balance is not sufficient to fund the Company's operations.
Accordingly, we are currently seeking additional sources of equity or debt
financing to fund our operations. Until new financing can be secured on a more
permanent basis, we will require interim financing. For the three month period
ending June 30, 2001, Verus Investment Holdings, Inc loaned the Company
$1,000,000 and a director loaned the Company $40,000. We do not anticipate
additional financing from these shareholders.


                                       20
<PAGE>


     On March 22, 2001, we entered into an equity line of credit with a private
investor. Under the terms of this agreement, upon the effective registration of
additional shares of Company common stock, the investor will purchase up to an
aggregate of $10 million of such common stock over the course of 36 months from
the date of the agreement at a purchase price equal to 91% of the market price
as defined therein. The Company has not determined whether such a filing is
practical or if a filing if made could be declared effective. The amount of
shares to be put to the investor by us is subject to certain average daily
trading volumes for our common stock in the U.S financial markets. In connection
with this agreement, we are obligated to issue 250,000 shares of common stock
for no additional consideration to an affiliate of the investor with a fair
market value of $.85 per share on March 22, 2001. We recorded $212,500 in stock
based compensation during the six months ended June 30, 2001 related to this
issuance.

     On March 17, 2001, we factored with recourse the majority of our accounts
receivable and have received net proceeds of $205,882. Fees for these services
are expected to average 6% of amounts factored.

     On March 15, 2001, we offered to issue 500,000 shares of our common stock
to Dutchess Advisors, Ltd. ("Dutchess") as consideration for their advisory
services in connection with our current efforts to secure additional financing
through a private placement. The shares would be issued pursuant to Regulation D
under the Securities Act, as amended. Of the total shares that could be issued,
100,000 shares contain piggyback registration rights. On June 22, 2001, we
rescinded the offer and no shares have been offered to Dutchess. An additional
finder's fee may be paid in cash to Dutchess upon completion of a private
placement transaction.

     On February 13, 2001, we borrowed $100,000 from a shareholder and officer
of the Company. The borrowing is unsecured, is due and payable on June 30, 2001
with interest at 8% per annum and is currently in default.

     On February 8, 2001, we sold 40,000 shares of our common stock to an
accredited investor for $20,000. The issuance was made pursuant to Section 4(2)
of the Securities Act.

     On January 19, 2001, we borrowed $40,000 from two of the Company's
officers. These promissory notes are secured, carry interest at a rate of 5% per
annum and are currently in default.

     On January 10, 2001, we refinanced $455,627 of accounts payable due to
Xerox under the services agreement with a promissory note as described in the
notes to the accompanying condensed consolidated financial statements. The note
is payable in monthly installments of $41,339, including interest at a rate of
16% per annum, beginning on February 15, 2001. The final payment will be due on
January 10, 2002, unless we default under the terms of the note, in which case,
the promissory note becomes fully due and payable. We have not made the required
payments under the promissory note in 2001 and, accordingly, we are in default
under the terms of the note.

     On January 5, 2001, we borrowed $55,000 from two of the Company's officers.
These promissory notes are unsecured and bear interest at a rate of 5% per annum
and are currently in default. Through the date of this report, we have repaid
$46,000.

     Until new financing can be secured on a more permanent basis, we will
require interim financing. Verus Investment Holdings, Inc. ("Verus") provided
$1,139,261 in interim financing to fund our working capital needs during the
year ended December 31, 2000. During the second quarter of 2001, Verus made an
additional loan of $1,000,000 through a promissory note. In connection with the
Merger, $1,500,000 of the loans provided in 2000 and $500,000 in loans
outstanding at December 31, 1999 were converted into 1,333,333 shares of common
stock. The remaining loans of $939,261 and $200,000 outstanding at December 31,
2000, carry interest at a rate of 8% and 10%, respectively per annum, are
unsecured and mature December 31, 2001 and November 22, 2001, respectively. The
$200,000 note is convertible at the option of the holder, into shares of common
stock on the earlier of i) November 22, 2001 at a conversion rate of $2.35 per
share or ii) at anytime at a conversion rate of $2.94 per share when the average
price of our common stock, as defined in the convertible agreement, exceeds
$3.675. In addition, Verus was granted warrants to purchase 50,000 shares of our
common stock at an exercise price of $2.94 per share.

     During the year ended December 31, 2000, the cost of our property and
equipment increased by $3,518,818, primarily due to the purchase of a new
management information system. The total $3,518,818 of property and


                                       21
<PAGE>


equipment purchases was financed as follows: $833,686 through debt (primarily
capital leases), $1,862,318 through accounts payable and the balance of $822,814
in cash. We are not currently planning to make any significant capital outlays
in 2001. For the period ending June 30, 2001, we had no material capital outlays
and made payments against capital leases for approximately $11,000.

     As discussed in Note 11, the Company has signed a term sheet to sell its
customer list and all course pack related assets (the "Existing Business"). As
of the date of this report, substantially all non-executive employees of the
Company have either been terminated or are no longer working at the Company. As
a result of the Company's lack of personnel and financial resources, the Company
is outsourcing the fulfillment of existing sales orders to the company acquiring
the Existing Business.

RECENTLY ISSUED ACCOUNTING STANDARDS

     On June 29, 2001, Statement of Financial Accounting Standards (SFAS) No.
141, "Business Combinations" was approved by the Financial Accounting Standards
Board (FASB). SFAS No. 141 requires that the purchase method of accounting be
used for all business combinations initiated after June 30, 2001. Goodwill and
certain intangible assets will remain on the balance sheet and not be amortized.
On an annual basis, and when there is reason to suspect that their values have
been diminished or impaired, these assets must be tested for impairment, and
write-downs may be necessary. The Company is required to implement SFAS No. 141
on July 1, 2001 and it has not determined the impact, if any, that this
statement will have on its consolidated financial position or results of
operations.

     On June 29, 2001, SFAS No. 142, "Goodwill and Other Intangible Assets" was
approved by the FASB. SFAS No. 142 changes the accounting for goodwill from an
amortization method to an impairment-only approach. Amortization of goodwill,
including goodwill recorded in past business combinations, will cease upon
adoption of this statement. The Company is required to implement SFAS No. 142 on
January 1, 2002 and it has not determined the impact, if any, that this
statement will have on its consolidated financial position or results of
operations.

     The adoption of SFAS No. 133, "Accounting for Derivative Instruments and
Hedging Activities", on July 1, 2001 did not impact the Company's financial
statements.

                           PART II. OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

     The Company was previously in litigation with Advizex, Inc. for which a
settlement was reached on June 5, 2001. The Company entered into a Consent
Judgment on July 11, 2001 which will require the Company to pay $120,000 in cash
beginning in July 2001 in equal installments over a twelve month period. In
addition, the Company will issue 164,384 shares of its common stock to Advizex
with a value of $120,000 based on a market price of $.73 per share on June 5,
2001. The 164,384 shares are in the process of being issued as of the date of
this report.

     The Company was named a defendant in an action filed by Hewlett Packard
Company ("Hewlett Packard") on August 9, 2001. In its complaint, Hewlett Packard
seeks damages in the amount of $913,511 due to the Company's alleged breach of
contract. In connection with this action, Hewlett Packard obtained a court order
for trustee process attachment and attached the Company's bank accounts in the
amount of approximately $90,000. The Company is currently negotiating a
settlement of Hewlett Packard's claims, although there can be no assurances that
we will be successful in reaching any such settlement.


                                       22
<PAGE>


ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

     The Company is in default on substantially all of its notes and other debt
obligations. (see Note 4 to the Unaudited Condensed Consolidated Financial
Statements).

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

(a)  Exhibits:

     10.1 Term Sheet with Pro Quest Information and Learning Company, dated
          August 3, 2001
     10.2 Agreement with Atlas Capital Services, dated July 31, 2001
     10.3 Agreement with Genesis Alternative Investments LLC, dated August 9,
          2001
     10.4 Security Agreement between booktech.com and Verus Investments Holdings
          Inc., dated June 1, 2001
     10.5 Convertible Promissory Note between booktech.com and Verus Investments
          Holdings Inc. dated June 1,2001
     11.1 Computation of Net Loss Per Share

(b)  Reports on Form 8-K

     The registrant filed a report on Form 8-K on August 2, 2001, which reported
(i) the Company's engagement of Atlas Capital Services Inc. and (ii) that two
members of the Company's Board of directors, Mr. Barry Romeril and Ms. Sherry
Turkle, resigned effective July 27, 2001 and July 29, 2001, respectively.

     The registrant filed a report on Form 8-K on May 23, 2001, which reported
that (i) Morris A. Shepard resigned as the Company's President and Chief
Executive Officer, (ii) the Company appointed William G. Christie as President
and Chief Executive Officer and (iii) certain stock-based compensation and other
common share information included in its interim reports for the quarters ended
March 31, 2000, June 30, 2000 and September 30, 2000 was incorrect and that the
Company expected to file amended Forms 10-QSB for each such period.


                                       23
<PAGE>



                                   SIGNATURES

     Pursuant to the requirements 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.

August 23,  2001                                     booktech.com, inc.

                                                    /S/ _______________________
                                                        Ted Bernhardt
                                                        Chief Financial Officer
                                                        Principal Financial and
                                                        Accounting Officer)





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