SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-QSB

(Mark One)

/x/ QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
    1934 For the quarterly period ended January 31, 2002

                                       or

/ / TRANSITION REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE
    ACT OF 1934 For the transition period from  _____________ to ______________

                       Commission File Number 33-19048-NY

                         MURRAY UNITED DEVELOPMENT CORP.
         ----------------------------------------------------------------
        (Exact Name of Small Business Issuer as specified in its charter)

             Delaware                                  22-2856171
---------------------------------         ------------------------------------
(State or other jurisdiction of           (I.R.S. employer identification no.)
incorporation or organization)

P.O. Box 224, Landing, New Jersey                        07850
---------------------------------                    --------------
(Address of principal executive offices)               (Zip Code)

Registrant's telephone number, including area code   (908) 979-3025
                                                     --------------

                                    No Change
          ------------------------------------------------------------
           (Former Name, Former Address, if changed since last report)

Indicate by check mark whether the Issuer:

(1) Has filed all reports required to be filed by Section 13 or 15(d) of the
Exchange Act during the past 12 months (or for such shorter period that the
registrant was required to file such reports):
Yes __x__        No ______

(2) Has been subject to such filing requirements for the past 90 days.
Yes __x__        No ______

      68,703,434 shares of the registrant's Common Stock ,$.0001 per share,
were outstanding as of March 10, 2002.


<PAGE>


                      MURRAY UNITED DEVELOPMENT CORPORATION

                                TABLE OF CONTENTS
                                   FORM 10-QSB

                          PART 1 FINANCIAL INFORMATION



  Item Number                                                        Page

  Item1.              Financial Statements

                      Balance Sheets                                    2

                      Statements of Operations                          4

                      Statements of Stockholders' Deficiency            6

                      Statements of Cash Flows                          7

                      Notes to Financial Statements                     8

  Item 2.             Management's Discussion and Analysis
                      Or Plan of Operation                             10


                            PART II OTHER INFORMATION

  Items 1- 6.                                                          15

  Signatures                                                           16



<PAGE>


                         PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

                      MURRAY UNITED DEVELOPMENT CORPORATION
                      (A Company in the Development Stage)
                                 BALANCE SHEETS
                                   (UNAUDITED)
                                     ASSETS

<TABLE>
<CAPTION>
                                           JANUARY 31, 2002             JULY 31, 2001
                                         --------------------       ----------------------

<S>                                      <C>                         <C>
Current assets

Cash & cash equivalents                    $            2,199         $             2,270
Loans Receivable                                        2,000                       2,000
                                         ---------------------      ----------------------


Total current assets                       $            4,199         $             4,270


Furniture & equipment, at cost, net of
     accumulated depreciation                          62,503                      66,669
                                         ---------------------      ----------------------

Total Assets                               $           66,702         $            70,939
                                         =====================      ======================


</TABLE>




    The accompanying notes are an integral part of the financial statements.

                                        2
<PAGE>

                      MURRAY UNITED DEVELOPMENT CORPORATION
                      (A Company in the Development Stage)
                                 BALANCE SHEETS
                                   (UNAUDITED)
                    LIABILITIES AND STOCKHOLDERS' DEFICIENCY

<TABLE>
<CAPTION>
                                                                           JANUARY 31,2002             JULY 31, 2001
                                                                        -----------------------      -------------------
<S>                                                                        <C>                       <C>
Current liabilities:
     Accounts payable and Accrued Expenses                                 $            20,983        $           6,518
     Note Payable Stockholder                                                                -                        -
                                                                        -----------------------      -------------------


    Total current liabilities                                                           20,983                    6,518

Other liabilities:
     Accrued Interest Payable                                                           50,758                   90,943
     Notes payable-other stockholder                                                 1,380,521                1,246,619
     Accrued Compensation                                                              148,128                  148,128
                                                                        -----------------------      -------------------

    Total other liabilities                                                          1,579,407                1,485,690
                                                                        -----------------------      -------------------

    Total liabilities                                                                1,600,390                1,492,208
                                                                        -----------------------      -------------------


Stockholders' deficiency:

Common Stock, par value $.0001:
     Authorized 200,000,000 shares;
     issued and outstanding
 68,703,434 shares and  68,703,434                                                       6,871                    6,871
Additional paid-in capital                                                           2,416,326                2,416,326
Deficit accumulated in the development stage                                        (3,956,885)              (3,844,466)
                                                                        -----------------------      -------------------

     Total stockholders' deficiency                                                 (1,533,688)              (1,421,269)
                                                                        -----------------------      -------------------

     Total Liabilities and Stockholders' Deficiency                        $            66,702        $          70,939
                                                                        =======================      ===================

</TABLE>



    The accompanying notes are an integral part of the financial statements.





                                        3
<PAGE>

                      MURRAY UNITED DEVELOPMENT CORPORATION
                      (A Company in the development Stage)
                            STATEMENTS OF OPERATIONS
               FOR THE SIX MONTHS ENDED JANUARY 31, 2002 AND 2001
                  AND CUMULATIVE AMOUNTS FROM OCTOBER 13, 1987
                               (DATE OF INCEPTION)
                                   (UNAUDITED)


<TABLE>
<CAPTION>
                                                                                       CUMULATIVE
                                                                                      AMOUNTS FROM
                                       2002                    2001                    INCEPTION
                                       ----                    ----                    ---------

<S>                               <C>                    <C>                     <C>
INCOME
Interest income                     $          -            $         -              $        66,465
                                  ---------------          -------------          -------------------

Total Income                                   -                      -                       66,465

EXPENSES
Research and Development costs                 -                      -                      854,653
Licensing fees-stockholder
     and affiliate                             -                      -                       57,260
General and administrative
     expenses                             61,661                 43,368                    2,600,970
Interest expense-stockholder
     and affiliate                        50,758                 44,906                      510,467
                                  ---------------          -------------          -------------------
Total Expenses                          (112,419)               (88,274)                  (4,023,350)
                                  ---------------          -------------          -------------------

Net loss                            $   (112,419)           $   (88,274)             $    (3,956,885)
                                  ---------------          -------------          -------------------

Net loss per common share                 (0.001)           $      (nil)                      (0.058)

Weighted average number of
     common shares out standing       68,703,434             68,703,434                   68,703,434
                                  ---------------          -------------          -------------------


</TABLE>


    The accompanying notes are an integral part of the financial statements.




                                        4
<PAGE>


                      MURRAY UNITED DEVELOPMENT CORPORATION
                      (A Company in the development Stage)
                            STATEMENTS OF OPERATIONS
                  THREE MONTHS ENDED JANUARY 31, 2002 AND 2001
                                   (UNAUDITED)

<TABLE>
<CAPTION>

                                             2002               2001
                                             ----               ----
INCOME
<S>                                     <C>                <C>
Interest income                         $             -     $            -
                                       -----------------   ----------------

Total Income                                          -                  -

EXPENSES
Research and Development costs                        -                  -
Licensing fees-stockholder
     and affiliate                                    -                  -
General and administrative expenses              26,461             15,907
Interest expense-stockholder
     and affiliate                               25,616             22,532
                                       -----------------   ----------------
Total Expenses                                  (52,077)           (38,439)
                                       -----------------   ----------------

Net loss                                $       (52,077)    $      (38,439)
                                       -----------------   ----------------

Net loss per common share               $          (nil)    $         (nil)


</TABLE>




     The accompanying notes are an integral part of the financial statements




                                        5

<PAGE>

                      MURRAY UNITED DEVELOPMENT CORPORATION
                      (A COMPANY IN THE DEVELOPMENT STAGE)
                 STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIENCY)
          SIX MONTHS ENDED JANUARY 31, 2002 AND CUMULATIVE AMOUNTS FROM
                      OCTOBER 13, 1987 (DATE 0F INCEPTION)
                                   (UNAUDITED)



<TABLE>
<CAPTION>

                                                                                                    DEFICIT
                                          COMMON                                                 ACCUMULATED IN
                                           STOCK                           ADDITIONAL                THE
                                         NUMBER OF                          PAID IN              DEVELOPMENTAL
                                          SHARES            AMOUNTS         CAPITAL                  STAGE               TOTAL
                                       ------------        ---------       -----------           -------------        ------------

<S>                                   <C>                 <C>           <C>                   <C>                  <C>
Balance July 31, 2001                    68,703,434          $ 6,871       $ 2,416,326           $ (3,844,466)        $(1,421,269)
Net loss for the six months
     ended 01/31/2002                                                                                (112,419)           (112,419)
                                       ------------        ---------       -----------           -------------        ------------

                                        $68,703,434          $ 6,871       $ 2,416,326           $ (3,956,885)        $(1,533,688)
                                       ------------        ---------       -----------           -------------        ------------


</TABLE>



    The accompanying notes are an integral part of the financial statements.



                                        6
<PAGE>


                      MURRAY UNITED DEVELOPMENT CORPORATION
                      (A Company in the Development Stage)
                            STATEMENTS OF CASH FLOWS
                   SIX MONTHS ENDED JANUARY 31, 2002 AND 2001
                    CUMULATIVE AMOUNTS FROM OCTOBER 13, 1987
                               (DATE OF INCEPTION)
                                   (UNAUDTIED)

<TABLE>
<CAPTION>

                                                                       2002            2001             CUMULATIVE FROM INCEPTION
                                                                  ---------------------------------------------------------------
<S>                                                                  <C>             <C>                      <C>
OPERATING ACTIVITIES:
Net Loss                                                                 (112,419)       (88,274)                 (3,956,885)
Adjustments to reconcile net loss to net cash
  used in operating activities:
Depreciaiton & Amortization                                                 4,166          5,088                     197,995
Expenses paid through issuance of common stock by:
    Company                                                                     -              -                     472,537
    Principal Stockholder                                                       -              -                     220,900
Changes in operating assets and liabilities:
    Loans Receivable                                                                                                  (2,000)
    Accounts Payable Accrued Expenses                                     (25,720)       (88,808)                    219,868
                                                                  -----------------------------------------------------------
NET CASH USED IN OPERATING ACTIVITIES                                    (133,973)      (171,994)                 (2,847,585)
                                                                  -----------------------------------------------------------

Investing Activities:
    Purchase of furniture and equipment                                         -              -                    (260,497)
                                                                  -----------------------------------------------------------
Net cash provided by (used in) investing activities                             -              -                    (260,497)
                                                                  -----------------------------------------------------------

Financing activities:
    Note payable to stock holder: Proceeds                              $ 133,902       $164,794                  $1,432,188
    Principal payments                                                          -              -                     (51,667)
    Proceeds from the issuance of common stock(net)                             -              -                   1,729,760
                                                                  -----------------------------------------------------------
Net cash provided by financing activities                                 133,902        164,794                   3,110,281
                                                                  -----------------------------------------------------------
Net increase (decrease) in cash and cash equivalents                          (71)        (7,200)                      2,199
Cash and cash equivalents, beginning of period                              2,270          9,796                           -
                                                                  -----------------------------------------------------------
Cash and cash equivalents, end of period                                $   2,199       $  2,596                  $    2,199
                                                                  -----------------------------------------------------------
Supplemental disclosure of cash flow data:
  Interest Paid                                                         $       -       $      -                  $   32,420
                                                                  -----------------------------------------------------------

</TABLE>

                                        7

<PAGE>

                          NOTES TO FINANCIAL STATEMENTS

Note 1 - Organization and business and basis of presentation:

In the opinion of management, the accompanying unaudited condensed financial
statements reflect all adjustments, consisting of normal recurring accruals,
necessary to present fairly the Company's financial position as of January 31,
2002 and its' results of operations and cash flows for the six months ended
January 31, 2002. These unaudited condensed financial statements should be read
in conjunction with the financial statements and other information in the July
31, 2001 Form 10-KSB.

The Company was incorporated on October 13, 1987 under the laws of the State of
Delaware. It was organized to further develop and exploit commercially certain
technology for a rotary internal combustion engine that would utilize
alternative fuels. The patent and related rights to the use of the technology
have been assigned to the Company.

The Company has been in the development stage since inception. Activities of the
Company have been limited to the acquisition of funds from the sale of its
common stock; the acquisition of the licensing rights for and, subsequently,
title to, the engine technology; research and development related to the
development of an initial fuel-driven prototype of the engine that was
successfully tested on a preliminary basis in January 1990; additional testing
and development of the engine prototype to obtain performance data for the
demonstration of the engine to potential licensees;and research relating to the
ability of a proprietary cleaning solution, which will be licensed to the
Company, to remove air pollutants from coal burning flue gas and certain air
pollutants and contaminants from building air. The proprietary cleaning
solution, for which we have applied for trademark protection under the name
Klenz-Safe, is owned by a corporation whose sole shareholders are Mr. Anthony
Campo and Mr. Dwight Foster, the Chairman of the Board and the President and
Chief Executive Officer of the Company, respectively. The Company intends to
continue research and development on the Klenz-Safe product during the ensuing
12-month period. Funding will be provided through loans from the Chairman of the
Company, at his sole discretion. In addition, the Company intends to continue
its research and development efforts with respect to its rotary engine during
the next 12-month period, provided it is able to raise the funds necessary to
conduct such research, of which there can be no assurances.

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. However, as of January 31, 2002, the
Company had not been able to commercially utilize its engine or Klenz-Safe
technologies to generate revenues or cash flows from operating activities. As a
result, it has suffered recurring losses from operations from inception that
have generated the net stockholders' deficiency of $1,533,688 as of January 31,
2002 and have also generated significant working capital deficiencies from time
to time.

                                        8

<PAGE>

Management does not expect the Company to generate any significant revenues or
positive operating cash flows during the twelve-month period subsequent to
January 31, 2002. The limited amount of liquid resources available at January
31, 2002 and the inability to generate operating revenues and cash flows raise
substantial doubts about the Company's ability to continue as a going concern.

Management believes that continuation of the Company as a going concern during
the twelve-month period subsequent to January 31, 2002 and thereafter will
depend upon the Company's ability to obtain sufficient additional working
capital to fund research and development activities on its Klenz-Safe and rotary
engine technologies and the general and administrative expenses to be incurred
during the remaining development period. Potential sources of such working
capital include: the private or public sale of common stock (the Company has
historically depended primarily on the sale of equity securities to finance its
operations); the exercise of a substantial portion of the 15,398,000 outstanding
Class B warrants prior to their proposed expiration on March 11, 2003,
14,898,000 of which are exercisable at $0.15 per share and 500,000 of which are
exercisable at $.225 per share; and borrowing additional amounts from related
parties or other sources. However, there can be no assurances that such
financing will be available. The accompanying financial statements do not
include any adjustments that might result from the uncertainties related to the
ability of the Company to continue as a going concern.

Note 2 - Summary of other significant accounting policies:

Depreciation:
         Depreciation of furniture and equipment is provided over the estimated
useful lives of the related assets using declining balance methods.

Research and development:
         Costs and expenses related to research and development are expensed as
incurred.

Net loss per common share:
         Net loss per common share was computed on the basis of the weighted
         average number of shares of common stock outstanding during each
         period. The effect of assuming the exercise of outstanding warrants was
         antidilutive and, accordingly, not included in the computation of net
         loss per share.

Note 3 - Related party transactions:

         Information as to agreements with, and notes payable to, related
         parties is set forth in the financial statements in the July 31, 2001
         Form 10-KSB

Note 4 - Stockholder's Equity:

         Information as to stockholders' equity is set forth in the financial
         statements in the July 31, 2001 Form 10-KSB.

                                        9

<PAGE>

Item 2. Management's Discussion And Analysis Of Financial Condition Or
        Plan Of Operation.

The following discussion and analysis provides information which we believe is
relevant to an assessment and understanding of our results of operations and
financial condition. This discussion should be read in conjunction with the
financial statements and notes thereto appearing elsewhere herein.

Statements in this Form 10-QSB that are not statements of historical or current
fact constitute "forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. Such forward-looking statements
involve known and unknown risks, uncertainties and other unknown factors that
could cause our actual results to be materially different from the historical
results or from any future results expressed or implied by such forward-looking
statements. In addition to statements that explicitly describe such risks and
uncertainties, readers are urged to consider statements labeled with the terms
"believes," "belief," "intends," "anticipates" or "plans" to be uncertain and
forward-looking. The forward-looking statements contained herein are also
subject generally to other risks and uncertainties that are described from time
to time in our reports filed with the Securities and Exchange Commission.

We are a developmental stage company that commenced operations on October 13,
1987. We are attempting to exploit commercially certain technologies that we are
in the process of developing. One of such technologies is a proprietary cleaning
solution owned by Foster-Campo Corp.("Foster-Campo"), a New York corporation
owned and operated by Mr. Anthony Campo and Mr. Dwight Foster, the Chairman of
the Board and the President and Chief Executive Officer, respectively, of the
Company. We have reached an agreement in principle with Foster-Campo under which
we will license the right to use Foster-Campo's proprietary solution solely for
removing environmental pollutants from flue gases and for removing pollutants
and contaminants from building air. We are also attempting to develop the
Rotorcam Engine, a rotary internal combustion engine that provides significant
advantages over conventional reciprocating engines.

We have not derived any revenues from the license or sale of our technology and
have incurred cumulative losses from our inception on October 13, 1987 through
January 31, 2002 of $3,956,885.

Results Of Operations

Our revenues from our inception on October 13, 1987 through January 31, 2002
aggregating $66,465 were derived from interest earned. Interest income was zero
in the periods ended January 31, 2002 and January 31,2001 as a result of a
decrease in the amount of funds available for investment.


                                       10

<PAGE>

The cumulative loss from inception includes research and development costs of
$854,653. Research and development costs were $0 during the quarters ended
January 31, 2002 and January 2001. We have had to reduce substantially our
research and development activities due to liquidity problems.

Our cumulative loss from inception includes general and administrative expenses
of $2,600,970. General and administrative expenses increased to $61,661 in
January, 2002 from $43,368 in January, 2001, or a 42% increase. Increased
general and administrative expenses can be attributed to increased legal and
other professional expenses.

Our cumulative loss from inception also includes past licensing fees of $0
during the quarterly period ended January 31, 2002 and ,cumulatively $57,260
since inception. The elimination of licensing fees is the result of the legal
settlement reached in fiscal 1994.

The cumulative loss from inception also includes interest expense of $510,467 on
promissory notes payable to our principal stockholder and Chairman. Interest
expense increased to $50,758 as of January 31, 2002 from $44,906 in January,
2001, primarily as a result of increased loans to us by our chairman and
principal stockholder.

Our net loss of $112,419 in the period ended January, 2002 increased by $24,145,
or 27%, over the net loss of $88,274 in January 31, 2001. Increases in general
and administrative costs and interest expense caused the overall increase.

Liquidity And Capital Resources

At January 31, 2002, we had cash and short-term investments totaling
$2,199(compared to liquid assets of $2,270 at July 31, 2001), a working capital
decrease of $71 (compared with a working capital decrease of $7,526 at July 31,
2001) and a total stockholders' deficiency of $1,533,688(compared to a
deficiency of $1,421,2697 at July 31, 2001). The stockholders' deficiency
increased due to the net loss of $112,419 incurred in the six months ended
January 31, 2002.

At January 31, 2002, we had current liabilities in excess of current assets of
$16,785. We have not been able to commercially utilize our technologies to
generate any revenue through that date, and as a result, we have suffered
recurring losses from operations from inception that have generated the net
capital deficiencies at January 31, 2002 as well as July 31, 2001 and
significant working capital deficiencies from time to time. We do not expect to
generate any significant revenues or positive operating cash flows during the
twelve-month period subsequent to January 31, 2002.

Cash flows used by operating activities were $133,973 and $171,994 in January,
2002 and January 2001, respectively. The limited amount of liquid resources
available at January 31, 2002, and our inability to generate operating revenues
and cash flows, raise substantial doubts about our ability to continue as a
going concern.

                                       11

<PAGE>

PLAN OF OPERATION

         We are a developmental stage company that commenced operations on
October 13, 1987. Our present plan is to attempt to exploit commercially certain
technologies that we are in the process of developing. In February 2002 we
reached an agreement in principle with Mr. Anthony Campo, the Chairman of the
Company, and with Mr. Dwight Foster, the President and Chief Executive Officer
of the Company, pursuant to which we would obtain a license to use and sell a
proprietary cleaning solution owned by Foster-Campo Corp. ("Foster-Campo"), a
corporation owned by Mr. Foster and Mr. Campo. The license will be limited to
use of the formula to remove air pollutants from flue gases and to remove
pollutants and contaminants from building air. Under the terms of the proposed
license, Foster-Campo will manufacture and supply the cleaning solution to our
customers without cost to us, for which Foster-Campo will receive a royalty
payment of 50% of our net profit on our sales of the proprietary solution.

In June 2000 Penn State Energy Institute, which is a facility of Penn State
University, agreed to conduct laboratory tests of the application of the
Klenz-Safe solution to the reduction of sulfur from coal burning flue gas. When
coal burning flue gas was introduced through Klenz-Safe using the Company's
proprietary methodology, the capture rate of sulfur exceeded 99.2% and
maintained a minimum of 98% rate throughout the testing. We are presently
negotiating with a utility company to conduct field tests in working power
generating stations to determine whether application of the liquid using our
know-how will achieve results that will provide a commercial advantage over
competing technologies. Management believes that it will be able to reach an
agreement with one or more utility companies to field test our technology
without cost to us. Such testing is expected to take 4 to 12 months to be
completed. If the field tests are successful, we intend to attempt to license
our technology to power generating plants. Management believes that if we
commence sale of the Klenz-Safe solution for sulfur reduction, the cost of
compliance with environmental laws will not be significant. We cannot provide
any assurances that the results of the field tests will be successful or, even
if they are successful, that we will be able to achieve successful
commercialization of our Klenz-Safe technology.

We have also contracted with a certified indoor air quality laboratory to
perform a series of laboratory tests on Klenz-Safe to determine its ability to
remove pollutants and contaminants from building air. The tests will determine
the capture efficiency of the solution with regard to: air pollutants, including
carbon dioxide, carbon oxide and nitrous oxide; indoor air vapor contaminants;
dust and pollen particles; and metal vapors such as sulfur and mercury. The
initial testing has determined that the Klenz-Safe solution does not itself
release any volatile compounds into the air being cleaned, which is an important
threshold determination for indoor and outdoor cleaning applications. Testing to
determine the ability of Klenz-Safe to remove harmful pollutants and
contaminants from the air has not yet been completed.

To date, the cost of the research at Penn State was approximately $9,000, and
the cost of the research by the certified air quality laboratory was
approximately $5,000. Funding for such research was provided by loans to the
Company from our Chairman, Mr. Anthony Campo.

                                       12

<PAGE>

We have filed an application with the US Patent and Trademark Office (PTO) for
protection of the trademark, "Klenz-safe", which we intend to use in connection
with sales of the cleaning solution if we determine that this technology is
commercially viable. The method of the application of the solution for removal
of sulfur from coal burning flue gas was developed by a consultant to the
Company and is the proprietary know-how of Murray United Development Corp. for
which a provisional patent application has been filed with the PTO. No
assurances can be given that the PTO will grant a patent on such know-how.

We also intend to continue our research and development efforts on the Rotorcam
engine during the ensuing twelve month period provided funding for such research
is made available to us. In July 1998, principally, through the efforts of Mr.
Dwight Foster, our President and Chief Executive Officer, we were able to obtain
the services of Southwest Research Institute ("SRI") to evaluate our engine
technology. SRI is generally considered to be one of the country's foremost
independent research institutes with approximately 2,500 scientists, engineers
and support personnel. SRI conducts an average of 1,500 nationally and
internationally sponsored projects each year.

Under our agreement with SRI, SRI agreed to provide an engineering study of the
Rotorcam Engine at a cost of $9,750. SRI's study included an evaluation of
existing Rotorcam Engine hardware and data, including test data on the current
prototype, and design and analytical data that we had obtained to date. In
addition, SRI agreed to prepare an evaluation report summarizing its findings
and a technical and cost proposal for the next phase of work.

In December 1998, SRI issued its Report in which SRI concluded that there were
three (3) significant advantages of the Rotorcam Engine over conventional
reciprocating engines: higher torque at a specified rpm, a potential of improved
cycle efficiency and energy savings, and the improvement of overall efficiency
and packaging resulting from the ability to eliminate a gear box.

In response to the Report, assuming funding becomes available, which we cannot
provide you any assurances will occur, we have determined to redesign and
rebuild a Second Prototype to address the issues raised by SRI in its Report. We
estimate that the cost of such Second Prototype will be approximately $350,000
to $375,000 and that it will take approximately 15 to 18 months from the time
such funding becomes available to complete.

If the Second Prototype shows clear advantages of the Rotorcam Engine over
conventional reciprocating engines in a specific market, and if the necessary
funds are then available, we plan to commission the development of a Third
Prototype, which would be designed to address the performance, cost, reliability
and producibility issues associated with the chosen market.

We estimate that the cost to develop such a Third Prototype would be between $2
million and $3 million and that it would take between 18 to 24 months from the
time the Second Prototype

                                       13

<PAGE>

is completed and such funding becomes available to complete. During this phase
of development we plan to commission the production of several variations of the
Third Prototype that would be used for different purposes, including performance
development, durability assessment, and demonstrators to be used in field
testing.

We are attempting to locate a funding source for the $350,000 to $375,000 amount
required to complete the Second Prototype. Possible sources for funding include,
exercise of our 15,398,000 outstanding Class B Warrants, an offering our equity
securities, and/or borrowing from private sources. We intend to attempt to raise
the funds necessary to complete the Second Prototype from such sources but we
cannot give you any assurances that we will be able to do so. If we are unable
to raise such funds, we may never be able to further develop the Rotorcam
Engine.

On April 20, 2000, we filed a Registration Statement with the United States
Securities and Exchange Commission ("SEC"), which became effective on May 3,
2000. The Registration Statement, together with the qualification or exemptions
from qualification obtained in several states where holders of our Class B
Warrants reside, permit such holders to exercise their Class B Warrants under
the laws of the United States and those states where we have either qualified or
obtained an exemption from qualifying the shares of our Common Stock for which
the Warrants are exercisable. To date, none of such Class B Warrant holders have
exercised their Class B Warrants due principally to the fact that the market
price of our Common Stock has been lower than the exercise price of the Class B
Warrants since the effective date of the Registration Statement. Unless the
market price of our Common Stock shall exceed the exercise price of the Class B
Warrants in the future, it is unlikely that any of the holders of such Warrants
will exercise them and we may not be able to raise the funds needed to develop
the Second Prototype from such source.

We believe that if the Second Prototype is successfully completed, we will be
able to raise sufficient funds to complete the Third Prototype from research
grants, licensing fees and/or equity financing. However, since a decision to
proceed with a Third Prototype will depend on the results obtained from the
Second Prototype, we cannot give you any assurances that we will decide to build
a Third Prototype or that we will, in fact, be able to obtain sufficient funds
to complete such Third Prototype. Since a Third Prototype is essential to our
ability to market the Rotorcam Engine, any determination by us that it is not
advisable to produce the Third Prototype, or our financial inability to do so,
will have a materially adverse effect on our ability to successfully market the
engine.

Although Management was previously considering potential mergers with businesses
owned by Mr. Campo and Mr. Foster and/or third parties, it has no plans to
pursue such mergers at this time.

                                       14
<PAGE>

                           PART II - OTHER INFORMATION

Item 1. Legal Proceedings - None

Item 2. Changes in Securities and Use of Proceeds

On March 5, 2002, Mr. Anthony Campo, the Chairman of the Board and Executive
Vice President of the Company, exercised a right to convert $30,500 of
indebtedness owed by the Company to Mr. Campo into 5,000,000 shares of our
Common Stock. The number of shares for which Mr. Campo exercised his conversion
right was computed at a rate of $.0075 for each such share of Common Stock. Mr.
Campo's conversion right is contained in a Promissory Note dated August 1, 2001
in the principal amount of $1,337,552 issued by the Company to Mr. Campo. Under
the terms of the Promissory Note, Mr. Campo was given the right to convert all
or any portion of the unpaid principal and/or interest of the Note at a rate of
one share of Common Stock for each 3/4 of one cent of such principal and
interest converted, up to a maximum of 100,000,000 shares. The terms of such
Promissory Note are further described in our Form 10-KSB for the fiscal year
ended July 31, 2001. The shares, which were issued to Mr. Campo on March 12,
2002, are exempt from registration pursuant to Section 4(2) of the Securities
Act of 1933 and are "restricted" securities in accordance with the terms of said
Act.

Item 3. Defaults upon Senior Securities

The promissory note to Mr. Campo, dated August 1, 2001, in the amount of
$1,337,552, consolidated amounts we owed to Mr. Campo under our prior notes .
The August 1, 2001 note bears interest at 7.5% per annum, which is payable
quarterly on each November 1, February 1, May 1 and August 1, and matures on
August 1,2002. We have defaulted on our quarterly interest payments due on
November 1,2001 and February 1, 2002. As of January 31, 2002, a total of $50,158
in unpaid interest was owed to Mr. Campo under the August 1, 2001 note. Since we
do not have any revenues, it is doubtful that we will be able to pay any
interest or principal amounts due under the August 1, 2001 note until such time
as we have operating revenues, or we raise funds from an independent source,
both of which events may not occur at any time. Mr. Campo has the right at any
time to declare amounts due under such note immediately due and payable.

Item 4.  Submission of Matters to a Vote of Security Holders - None

Item 5.  Other Information-None

Item 6.  Exhibits and Reports on Form 8-K
         (A) Exhibits-None

         (B) Reports on Form 8-K
                 There were no reports on Form 8-K during the quarter ended
                 January 31, 2002

                                       15
<PAGE>
                                   SIGNATURES

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

                                  MURRAY UNITED DEVELOPMENT CORPORATION
                                  (Registrant)



                                 By:             /S/ Dwight Foster
                                    -------------------------------------------
                                        President and Chief Executive Officer

                              Dated: March 14, 2002


                                 By:            /S/ Anthony S. Campo
                                     ------------------------------------------
                                     Anthony S. Campo, Executive Vice President
                                                     Secretary and Treasurer
                                                     Chief Financial Officer

                              Dated: March 14, 2002

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

                                                        /S/ Anthony S. Campo
                                              ------------------------------
                                                           Anthony S. Campo,
                                                       Chairman of the Board

                                                           /S/ Dwight Foster
                                              ------------------------------
                                                     Dwight Foster, Director


                                                       /S/ Francis Pecorella
                                              ------------------------------
                                                 Francis Pecorella, Director


                                                       Dated: March 14, 2002


                                       16