Skylynx Communications 10QSB/A 2002 Q2 Quarterly report (small business) (amended)

United States
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_________________

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FORM 10-QSB/A-1

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(Mark One)

[X] Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the period ended December 31, 2001

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

Commission file number: 0-27635

BASIC TECHNOLOGIES, INC.
(Exact name of registrant as specified in its charter)

Colorado
(State or other jurisdiction of incorporation or organization)

84-1446622
(I.R.S. Employer
Identification No.)

1026 West Main Street, Suite 104
Lewisville, Texas 75067
(Address of principal executive offices, including zip code)

Registrant's Telephone No., including area code: (927) 436-3789

__________________________________

Indicate by check mark whether the registrant (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____

As of January 31, 2002, there were 8,198,356 shares of the issuer's Common Stock outstanding.

INDEX

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PART I.	FINANCIAL INFORMATION	Page
Item 1.	Financial statements	3
	Consolidated Balance Sheet - December 31, 2001 and 2000	4
	Consolidated Statements of Income (Loss) - Six Months Ended December 31, 2001 and 2000	6
	Consolidated Statements of Changes in Stockholders' Equity (Deficit) - Six Months Ended December 31, 2001 and 2000	7
	Consolidated Statements of Cash Flows - Six Months Ended December 31, 2001 and 2000	8
	Notes to Unaudited Consolidated Financial Statements	9
Item 2.	Management's Discussion and Analysis of Plan of Operation	19
	Plan of Operation for the Next Twelve Months	19
	Management's Discussion and Analysis of Financial Condition and Results of Operations	22
PART II.	OTHER INFORMATION	28
Item 1.	Pending Legal Proceedings	28
Item 2.	Changes in Securities	28
Item 3.	Default by the Company on its Senior Securities	30
Item 4.	Submission of Matters to a Vote of Security Holders	30
Item 5.	Other Information	30
Item 6.	Exhibits and Reports Filed on Form 8-K	30

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PART I FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

The financial statements included herein have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Selected information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. However, in the opinion of management, all adjustments (which include only normal recurring accruals) necessary to present fairly the financial position and results of operations for the periods presented have been made. These financial statements should be read in conjunction with the accompanying notes, and with the historical financial information of the Company.

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BASIC TECHNOLOGIES, INC.
Consolidated Balance Sheets

		December 31,	December 31,
		2001	2000
ASSETS
CURRENT ASSETS
	Cash	$ 1,420	$ (4,114)
	Accounts Receivable-Net	43,271	114,973
	Inventories	46,224	70,903
	Prepaid Expenses	431	4,869
	Deferred Tax Asset	134,354	342,968
	TOTAL CURRENT ASSETS	$ 225,700	$ 529,599
FIXED ASSETS
	Equipment	$ 420,086	$1,404,838
	Land and Buildings	9,974	9,974
		430,060	1,414,812
	Less: Accumulated Depreciation	$ (109,674)	$ (182,250)
	TOTAL FIXED ASSETS	$ 320,386	$1,232,562
OTHER ASSETS
	Certificate of Deposit	$ 114,503	$ 110,298
	Capitalized Loan Fees	24,187
	Deposits	0	1,399
	Organization Costs-Net	487	938
	Proved Developed Oil Reserves	3,735,000	3,711,000
	Acquisition Goodwill-Net	814,430	859,680
	Deferred Tax Asset	397,734	0
	TOTAL OTHER ASSETS	$ 5,086,341	$4,683,315
	TOTAL ASSETS	$ 5,632,427	$6,445,476

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

BASIC TECHNOLOGIES, INC.
Consolidated Balance Sheets

		December 31,	December 31
		2001	2000
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
	Short Term Notes Payable	116,697	322,963
	Accounts Payable	239,072	262,800
	Accrued Taxes and Interest Payable	166,671	81,328
	Current Portion of Long Term Debt	48,162	67,310
	TOTAL CURRENT LIABILITIES	$ 570,602	$ 734,401
LONG TERM LIABILITIES
	Accrued Interest Payable	$ 42,105	$ 11,652
	Deferred Tax Liability	223,069	223,069
	Payables-Shareholders	560,735	466,693
	Capital Lease Payable	32,871	32,871
	Long Term Notes and Obligations	785,472	502,873
	Less: Current Maturities	(48,162)	(67,310)
	TOTAL LONG TERM LIABILITIES	$ 1,596,090	$ 1,169,848
	TOTAL LIABILITIES	$ 2,166,692	$ 1,904,249
STOCKHOLDERS' EQUITY
	Common Stock, $.00001 par value, 100,000,000 shares authorized and 7,912,507 issued and outstanding	$ 79	$ 78
	Preferred Stock, $.00001 par value, 10,000,000 shares authorized and no shares issued and outstanding	0	0
	Paid in Capital	5,315,056	5,206,407
	Paid Stock Subscriptions	1,657	500
	Treasury Stock (850,000 shares)	(768,150)	0
	Retained Earnings (Deficit)	(1,082,907)	(665,758)
	TOTAL STOCKHOLDERS' EQUITY	$ 3,465,735	$ 4,541,227
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY		$ 5,632,427	$ 6,445,476

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

BASIC TECHNOLOGIES, INC.
Consolidated Statements of Income
For the Six Months Ended

		December 31,	December 31,
		2001	2000
REVENUES		$ 176,817	$ 215,333
COST OF SALES		4,522	1,463
	GROSS PROFIT	$ 172,295	$ 213,870
OPERATING EXPENSES
	Selling, General and Administrative Expenses	326,163	410,893
	Interest	50,414	38,016
	Amortization	22,847	22,846
	Depreciation	23,955	56,766
	Bad Debt Expense	3,103	0
	TOTAL EXPENSES	$ 426,482	$ 528,521
	NET INCOME (LOSS) FROM OPERATIONS	$ (254,187)	$ (314,651)
OTHER INCOME (EXPENSE)
	(Loss) - Asset Sale	$ (1,018)	$ 0
	Gain - Debt Settlement	5,062	2,518
	Interest Income	2,369	190
	TOTAL OTHER INCOME (EXPENSE)	6,413	2,708
	NET INCOME (LOSS) BEFORE TAXES	$ (247,774)	$ (311,943)
	DEFERRED TAX BENEFIT	84,243	106,061
	NET INCOME (LOSS)	$ (163,531)	$ (205,882)
	Beginning Retained Earnings (Deficit)	(919,376)	(459,876)
	ENDING RETAINED EARNINGS (DEFICIT)	$ (1,082,907)	$ (665,758)
EARNINGS PER SHARE
	Income (Loss) for Common Stockholders	$ (0.02)	$ (0.03)

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

BASIC TECHNOLOGIES, INC.
Consolidated Statements of Changes in Stockholders' Equity
For the six months ended December 31, 2001 and December 31, 2000

		December 31,	December 31
		2001	2000
COMMON STOCK
	Balance at Beginning of Period	$ 78	$ 77
	Issuance of shares of stock for expenses/debt	1	1
	Balance at End of Period	$ 79	$ 78
STOCK SUBSCRIPTIONS
	Balance at Beginning of Period	$ 500	$ 28,500
	Subscriptions Received	52,859	16,000
	Stock Issued	(51,702)	(44,000)
	Balance at End of Period	$ 1,657	$ 500
PAID IN CAPITAL
	Balance at Beginning of Period	$ 5,258,105	$ 5,162,408
	Proceeds in Excess of Par Value of Common Stock Issued for Expenses	56,951	43,999
	Balance at End of Period	$ 5,315,056	$ 5,206,407
TREASURY STOCK
	Balance at Beginning of Period (850,000 shares)	$ (768,150)	$ 0
	Balance at End of Period	$ (768,150)	$ �� 0
RETAINED EARNINGS (DEFICIT)
	Balance at Beginning of Year	$ (919,376)	$ (459,876)
	Net Loss	(163,531)	(205,882)
	Balance at End of Year	$ (1,082,907)	$ (665,758)
TOTAL STOCKHOLDERS' EQUITY		$ 3,465,735	$ 4,541,227

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

BASIC TECHNOLOGIES, INC.
Consolidated Statements of Cash Flows
For the six months ended

		December 31,	December 31,
		2001	2000
CASH FLOWS FROM OPERATING ACTIVITIES
	Net Income (Loss)	$ (163,531)	$ (205,882)
	Adjustments to reconcile net income to net cash provided by operating activities:
	Loss - Asset Sale	1,018	0
	Gain - Note Payoff	(5,062)	(2,518)
	Depreciation / Amortization / Loan Fees	54,864	79,612
	Increase in Accounts Receivable	(9,937)	(6,091)
	Increase in Deferred Tax Asset (net)	(84,243)	(106,061)
	Increase in Accounts Payable and Accrued Liabilities	71,014	73,442
	Increase in Prepaid Expenses	(431)	(4,869)
	Increase in Deposits		4,465
	Increase in Bad Debt Reserve	3,103	0
	Expenses Paid With Stock	17,290	0
NET CASH USED BY OPERATING ACTIVITIES		$ (115,915)	$ (167,902)
NET CASH USED BY INVESTING ACTIVITIES
	Proceeds - Sale of Fixed Assets	$ 15,000	$ 0
	Purchase of Fixed Assets	(18,426)	0
NET CASH USED BY INVESTING ACTIVITIES		$ (3,426)	$ 0
CASH FLOWS FROM FINANCING ACTIVITIES
	Stock Subscriptions Received	$ 1,157	$ 0
	Proceeds From Sale of Common Stock	0	16,000
	Principal Payments on Bank and Other Notes	(12,122)	(39,687)
	Proceeds of Notes Payable	90,000	135,000
	Proceeds of Shareholder Loans	39,044	29,813
NET CASH PROVIDED BY FINANCING ACTIVITIES		$ 118,079	$ 141,446
NET DECREASE IN CASH		$ (1,262)	$ (26,456)
CASH AT BEGINNING OF PERIODS		2,682	22,342
CASH AT END OF PERIODS		$ 1,420	$ (4,114)

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

BASIC TECHNOLOGIES, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2001 and December 31, 2000

NOTE 1 - NATURE OF ACTIVITIES AND SIGNIFICANT ACCOUNTING POLICIES

Nature of Activities and Basis of Accounting

The Company, a Corporation, is engaged in the diversified operations of environmental remediation and recovery of oil and gas properties in Texas and Oklahoma, and development of oil and gas ventures and related interests, and as an internet service provider and e-business consultant in Hawaii, with its corporate headquarters located in Lewisville, Texas. The Company incorporated in the state of Colorado on January 21, 1998 and its fiscal year end is June 30.

The accompanying financial statements have been prepared on the accrual basis of accounting in accordance with generally accepted accounting principles.

Consolidation

The Company was formed as a parent holding company to operate through subsidiaries. The financial statements consolidate the activities of the parent along with:

	Yankee Development Corp., a Texas corporation
	P & A Remediation, LLC, a Texas limited liability company
	Simpco, Inc., a Texas corporation
	P & A Remediation, LLC, an Oklahoma limited liability company
	Cyber Cities Technologies, Inc., an Hawaii corporation
	Oilfieldjunk.com, LLC, a Texas limited liability company

All significant intercompany transactions and balances have been eliminated.

Cash

For purposes of the statement of cash flows, the Company considers all short term securities purchased with a maturity of three months or less to be cash equivalents. There are no restrictions on any balances.

Accounts Receivable

Bad debt expense is recognized by use of the allowance method, with additions to the allowance and expense for this period, and total bad debt expense of $3,103. There were no additions or bad debt expense in the prior year's same period. There are no significant concentrations of credit risk.

Inventories

Inventories are shown at cost, using the first-in, first-out method. In addition to direct purchases, inventory is acquired through the performance of services (See note about revenues).

Pipe inventory, in the form of a 35-mile long abandoned oil gathering pipeline, was acquired for $35,000. The Company plans to dig up the pipeline and prepare it for sale, once survey and staffing problems are resolved.

Fixed Assets

These assets are carried at acquisition cost. Depreciation is provided using the straight-line method over the estimated economic lives of the assets, which range from 40 years for buildings to 3 to 15 years for all other assets.

The Company rebuilt and upgraded certain newly acquired used operating equipment prior to placing the equipment in the field. All upgrade costs, including related payroll costs, were capitalized.

Intangibles

Amortization of Organization Costs is calculated over 60 months. Goodwill, created from the purchase of Cyber Cities Technologies, Inc. is being amortized over 20 years.

Capitalized Loan Fees

$32,750 in fees were paid to certain shareholders to extend repayment terms, through the issuance or subscription for common stock. Fees are amortized over the loan terms, with $8,062 expensed for this period. There was no amortization in the prior year's same period.

Income Taxes

Income from the corporation is taxed at regular corporate rates per the Internal Revenue Code. There are no provisions for current taxes due to net available operating losses.

Deferred Tax Liability

The Company purchased Cyber Cities Technologies, Inc. and accounted for the transaction using the "purchase" method of accounting. This requires the acquisition to be accounted for at the fair value of the assets received or given up, whichever is more readily available. Further, this transaction caused a Deferred Tax Liability to be booked, due to the difference between the book basis and tax basis of the assets received. The offset to this entry increased Goodwill.

Common Stock

The Company's common stock is stated at par value ($.00001) and the paid in capital represents the difference between the fair value of the assets received and the common stock at par value. There are no provisions for stock options, stock compensation, conversion rights, redemption requirements or unusual voting rights.

There are 850,000 shares of common stock held in treasury for resale by the Company.

Revenues

Services

The Company sells services as an Internet service provider and consultant in Hawaii.

Services for oil well plugging are provided using two types of contracts: cash and salvage. Under the salvage type, the Company receives as its compensation specified types of used oil well equipment or pipe. Revenue is recognized and the items taken into inventory based upon the relevant wholesale market prices, or the prices at which the Company could buy the items for resale on the open market. No such services were performed during the period.

Sales

Inventory, whether acquired by purchase or through services, is resold to oil and construction customers. No sales were made during the period.

Revenues of $4,254 have been earned from oil and gas production during the fiscal period and $1,345 was earned for the prior year's same period.

Interest

Interest expensed for the period is $50,415 and $38,016 for the prior year's same period. No interest has been capitalized.

Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.

NOTE 2 - INVESTMENTS IN WHOLLY OWNED SUBSIDIARIES

On April 23, 1998, the Company issued 5,305,625 restricted common shares in exchange for 100% of Yankee Development Corporation. Upon consummation of the transaction, the former owners of Yankee Development Corporation controlled approximately 90% of the issued and outstanding shares of Basic Technologies, Inc. and Yankee Development Corporation became a wholly owned subsidiary of Basic Technologies, Inc. The transaction was consummated as a purchase of assets, rather than a pooling of interests. The valuation assigned to the purchase of Yankee Development Corporation is based on the underlying net assets, which consist of working interests in proven oil and gas reserves discounted to net present value of net revenues less development and operating costs. The discount applied was 10%. The oil and gas reserves are the only substantial assets in the subsidiary company.

Cost of Acquiring Yankee Development Shares $3,711,000

The valuation of the oil and gas reserves is based on the market price of oil. At the time of the valuation, the price used was $15/bbl. The price of oil at the balance sheet date was $21.00 per barrel, and the current price of oil is $21.00; however, the reserves are not to be revalued in excess of their original valuation.

In October 1998, the Company formed a Limited Liability Company (P & A Remediation, LLC) with Simpco, Inc. (a wholly owned subsidiary) with the intention of developing environmental remediation in oil and gas fields. The Company owns 99% of the stock of P & A Remediation, LLC, and Simpco, Inc. owns 1%. See also Note 5. As of the statement date, operations in this entity have been transferred to another subsidiary.

In January, 1999, the Company issued debt and 850,000 shares of its authorized but previously unissued shares of voting common stock in exchange for all of the outstanding common stock of Simpco, Inc., a Texas corporation. That corporation, now a wholly owned subsidiary, was intended to be the owner and lessor of the consolidated entities' operating equipment. The transaction was accounted for under the purchase method. As of the statement date, operations in this entity have been transferred to another subsidiary.

On November 24, 1999, P&A Remediation LLC, an Oklahoma Limited Liability Company, was formed for the purpose of beginning remediation and sales operations in Oklahoma. See also Note 5. As of the statement date, operations in this entity have ceased.

Effective January 1, 2000, the Company issued 979,232 shares of its authorized but unissued shares of voting common stock in exchange for all of the assets and operations, subject to certain liabilities, of Cyber City Honolulu, Inc., a Hawaii corporation. Included in the exchange was the acquisition of all intangibles including all trade names, customer lists, goodwill and other intangibles. The assets and liabilities were then transferred into a newly formed, wholly owned Hawaii corporation, Cyber Cities Technologies, Inc. The acquisition was accounted for using the "purchase" method of accounting. The predecessor and successor companies are a regional Internet service provider and Internet web page hosting service. The Company recognized goodwill in the amount of $681,848. A related deferred tax liability of $223,069 was recognized, which increased the acquisition goodwill to $904,917.

On November 27, 2001, a Texas limited liability company, Oilfieldjunk.com, LLC, was formed as a wholly owned subsidiary for the purpose of continuing the suspended operations of other previously noted subsidiaries.

NOTE 3 - EMPLOYEE BENEFITS

There are currently no qualified or non-qualified employee pensions, profit sharing, or other plans authorized for any class of employees. Group health insurance is provided to employees.

NOTE 4 - LEASES

Capital Leases

There is one equipment lease, the terms of which mandate accounting as a capital lease. The leased assets are depreciated with interest imputed.

Amortization of capitalized lease costs is included with depreciation. Payment on this lease has been suspended pending the results of negotiation on terms. Total remaining obligations are $32,871.

Operating Leases

One subsidiary, which operates as an Internet service provider, leased certain computer/communication equipment. Rental payments due under existing leases are $1,485 for balance of the year ended June 30, 2002.

There are no contingent rentals, subleases or related party leases of equipment.

Leases for some physical facilities are on a month-to-month basis. Two facilities are occupied under long-term leases. Future lease commitments are:

	Years Ending
	June 30	Amount
	2002	$ 9,900
	2003	10,000
	Total	$ 19,900

Total equipment rental expense for the period was $4,857 and $21,695 for the prior year's same period.

NOTE 5 - COMMITMENTS AND CONTINGENCIES

There are a few small lawsuits over disputed open commercial accounts. The full potential cost is included in accounts payable.

NOTE 6 - PROVEN DEVELOPED OIL RESERVES

The Company owns, through a subsidiary, proven developed oil reserves on 2300 acres in west Texas. Valuation at the time of acquisition was based upon the discounted net present value of net revenues, after development and operating costs. The applied discount rate was 10%, and the oil price used was $15.00 per barrel. The price of oil at the statement date was $21.00 per barrel, and the current price of oil is $21.00 per barrel, but the reserves are not to be revalued. Recoverable oil reserves are estimated to be 880,000 barrels. See also Note 2 above.

In December 2001, the Company acquired, through a subsidiary, producing working interests in wells in Archer County, Texas by issuing a promissory note for $24,000.

NOTE 7 - INCOME TAXES

Starting in 1998, the Company has adopted Statement of Financial Accounting Standards No. 109, Accounting for Income Taxes ("SFAS No. 109"), which requires the use of the liability method in the computation of income tax expense and the current and deferred income taxes payable. Under SFAS No. 109, income tax expense consists of taxes payable for the year and the changes during the year in deferred assets and liabilities. Deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases and financial reporting bases of assets and liabilities. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized.

As there is a net operating loss in the current fiscal year, the Company has calculated a deferred tax asset (benefit) as follows:

	Fiscal Period December 31, 2001	$ 84,243
	Prior Years	447,875
	Gross deferred tax asset	$ 532,088

The deferred tax benefit has been allocated between current and long term assets.

The Company has also recorded a deferred tax liability for the difference between book bases and tax bases for the acquisition of Cyber Cities Technologies, Inc.

Deferred tax liability $223,069

NOTE 8 - SEGMENT REPORTING

The Company has adopted SFAS No. 131, and uses the Management approach to determine and disclose reportable segment information. The Company's four reportable business segments are based upon distinctive types of activities or services: environmental remediation; equipment leasing; oil and gas production; and Internet and e-business services. A full description of these segments is included in Note 1. All segments operate within the United States. The equipment leasing segment provides service only to the environmental segment. This segment is intended to be rolled into the remediation activity in future periods.

The accounting policies of the segments are the same as those described in the summary of significant policies. Inter-segment services are recorded using internal transfer prices set by the Company.

NOTE 9 - EARNINGS PER SHARE

Basic earnings (loss) per share are computed by dividing the net loss by the weighted average number of common shares outstanding during the period. There are no provisions or contracts that would create dilutive potential common stock.

NOTE 10 - ACCRUALS

Local and federal taxes, as well as interest on notes and other payables have been accrued.

No accrual of vacation time is made, because no employee met eligibility requirements at the statement date.

NOTE 11 - LONG-TERM DEBT

In March, 1999, the Company issued $50,000 in notes payable, due in March 2003 for working capital. These were refinanced in March 2001, with additional funding. The new notes totaled $52,979, with payoff in February 2005. Principal and interest accrued at 10% are payable monthly, and the notes are secured by equipment.

In March, 1999, the Company issued a $11,500 mortgage payable, due in March 2004 for the purchase of real estate. Principal and interest accrued at 10% are payable monthly and the mortgage is secured by real estate.

In February, 1999, the Company assumed $71,700 in unsecured notes payable, due March 2004 for the purchase of inventory. A $35,000 note has been cancelled in a lawsuit settlement. Interest accrued at 7%, as well as the entire principal balance, is due at maturity.

From November, 1998 through May 1999, the Company issued six notes for a total of $73,975 in notes payable for vehicle and equipment purchases, due from August 2000 through March 2004. Principal and interest accrued at rates from 7.85% to 16.5% are payable monthly and the notes are secured by vehicles and equipment.

In August, 1999, the Company issued $19,000 in unsecured notes maturing in August 2003 for working capital. Principal and interest accrued at 11.5% are payable monthly.

In November, 1999, the Company issued a note for a total of $18,300 for a vehicle purchase, due from December 1999 through November 2003. Principal and interest accrued at 17.5% is payable monthly and the note is secured by a vehicle.

In December, 2000, the Company renewed and extended a short-term note of $100,000 to mature in November, 2002. Accrued interest of 10% is payable at maturity, and the accrued interest is classified as a long-term liability.

In December, 2000, the Company issued a promissory note for $110,298 to acquire a certificate of deposit maturing in January, 2002. The note bears interest of 10%, and both principal and interest are payable at maturity in December, 2003.

In October, 2001, the Company issued a promissory note for $75,000 for working capital, with interest at 10%, with both interest and principal maturing in October, 2003.

In December, 2001, the Company issued a $24,000 note, at 9% interest, both interest and principal maturing in December, 2004, for the purchase of producing oil working interests.

In October, 2001, the Company issued a $15,000 promissory note, at 10% interest, both principal and interest maturing in October, 2003, for funds to acquire equipment.

Certain installment notes payable for equipment purchases are non-interest bearing. On these notes, interest has been imputed at 9%, the related asset has been discounted, and the imputed/discounted interest is included in interest expense.

There are no restrictive or subordinate covenants other than standard liens. Certain debts have the option to be converted to common stock at a price of $1.00 per share.

Maturities of long term debt are as follows:

	Year Ending
	June 30	Amount
	2002	$ 32,148
	2003	299,114
	2004	420,362
	2005	33,848
	Total	$ 785,472

Short Term Notes Payable

Between November, 1999 and June, 2001, the Company issued short term promissory notes totaling $ 409,291 for working capital needs.

Interest rates varied from 10% to 12%, payable monthly on some notes, and at maturity on others. Some notes were secured by equipment and contract proceeds. Maturities varied, and renewal and extension provisions were available.

Certain short-term notes were converted to long-term maturities.

NOTE 12 - RELATED PARTY TRANSACTIONS

Open account cash advances have been made by various shareholders. As of the financials statement date, no promissory notes, interest rates or repayment schedules have been set. Interest is scheduled to begin accruing on January 1, 2002. The balances are classified as long term obligations.

NOTE 13 - SUPPLEMENTAL DISCLOSURES-STATEMENT OF CASH FLOWS

Operating activities reflect interest paid of $28,348 for the current period and $38,016 for the prior fiscal year's period. Debt of $7,412 was retired through the issuance of 7,412 shares of common stock.

NOTE 14 - COMPREHENSIVE INCOME

The Company had no elements of comprehensive income during the period.

BASIC TECHNOLOGIES, INC.
Table of Reportable Segments
For the six months ended December 31, 2001

	Oil & Gas Production	Environmental Remediation	Equipment Leasing	Internet & E-Business	Eliminations
	Oil & Gas Production	Environmental Remediation	Equipment Leasing	Internet & E-Business	Eliminations	Consolidated
Sales to Unaffiliated Customers	$ 4,254	$ 0	$ 0	$ 172,563	$ 0	$ 176,817
Inter-Segment Sales	0	0	0	0	0	0
Total Sales	$ 4,254	0	0	172,563	0	176,817
Operating Income (Loss)	$ 2,149	(20,594)	(34,944)	(97,874)	0	(151,263)
Corporate Expenses						(102,924)
Total Operating Income (Loss)						(254,187)
Depreciation & Amortization	$ 0	2,996	13,046	24,001	0	40,043
Corporate Expenses						6,759
Total Depreciation & Amortization						46,802
Interest Revenue (Not Allocated to Segments)						2,369
Interest Expense	$ 0	11,858	5,384	1,614	0	18,856
Corporate Expenses						31,558
Total Interest Expense						50,414
Segment Assets	$ 3,735,000	294,775	0	736,389	0	4,766,164
General Corporate Assets						866,263
Total Assets						5,632,427
Expenditures for Segment Assets	$ 24,000	$ 15,000	$ 0	$ 311	$ 0	$ 39,311
Expenditures for Segment Fixed Assets	$ 0	$ 15,000	$ 0	$ 311	$ 0	$ 15,311
Corporate Assets						0
Total Expenditures for Fixed						15,311

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

BASIC TECHNOLOGIES, INC.
Table of Reportable Segments
For the six months ended December 31, 2000

	Oil & Gas Production	Environmental Remediation	Equipment Leasing	Internet & E-Business	Elimin- ations	Consoli- dated
Sales to Unaffiliated Customers	$ 1,345	$ 0	$ 0	$ 213,988	$ 0	$ 215,333
Inter-Segment Sales	0	�� 0	0	0	0	0
Total Sales	$ 1,345	0	0	213,988	0	215,333
Operating Income (Loss)	$ (914)	(42,756)	(50,913)	(78,909)		(173,492)
Corporate Expenses						(141,159)
Total Operating Income (Loss)						(314,651)
Depreciation & Amortization	$ 0	1,217	49,610	28,507	0	79,334
Corporate Expenses						278
Total Depreciation & Amortization						79,612
Interest Revenue (Not Allocated to Segments)						190
Interest Expense	$ 0	11,931	3,821	1,702	0	17,454
Corporate Expenses						20,562
Total Interest Expense						38,016
Segment Assets	$ 3,711,000	385,022	1,152,291	772,452	(247,676)	5,773,089
General Corporate Assets						672,387
Total Assets						6,445,476
Expenditures for Segment Assets	$ 0	$ 0	$ 0	$ 0	$ 0	$ 0

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

</R>

ITEM 2.	Management's discussion and analysis of Financial Condition and results of Operations
(a)	Plan of Operation for the Next Twelve Months

The Company serves as a holding company for three wholly-owned corporate subsidiaries, Yankee Development Corporation (hereafter Yankee); Simpco, Inc. (hereafter Simpco); and Cyber Cities Technologies, Inc. (hereafter CCTech) and three limited liability companies, P & A Remediation, LLC, a Texas limited liability company (hereafter PAR Texas); P & A Remediation, LLC, an Oklahoma limited liability company (hereafter PAR Oklahoma); and oilfieldjunk.com LLC. a Texas limited liability company. PAR Texas and PAR Oklahoma are collectively 'P & A Remediation'. Yankee owns a working interest in proven, developed oil reserves on 2,300 acres in Tom Green County, Texas. The assets owned by Yankee are held by production of other leases, and thus do not require annual bonus or delay rental payments, and have no legal commitments of any kind to maintain the legal integrity of the assets. Through P & A Remediation, the Company previously (1999 - 2000) performed environmental remediation and salvage operations for the oil industry, and markets and sold construction materials, pipe, steel tubulars and used oil field equipment obtained from salvage operations or acquired for resale on the secondary market. Simpco owned certain reconditioned oil field equipment and vehicles that were leased to P & A Remediation for use in conducting oil field plugging, remediation and salvage activities. In July 2000, actively developing operations of P & A Remediation and Simpco were terminated with the joint cessation of operations due to command and control problems with then mid-level management of P & A Remediation. In August 2000, litigation with the previous mid-level management of P & A Remediation was instituted which prevented the day to day operations of P & A Remediation to continue. Simpco, then acting solely as a leasing company to its sister subsidiaries, had severely limited opportuniti es to collect its revenue from the adverse possession of its leased assets from the then adversarial litigants, the same being the previous mid-level management of P & A Remediation. Burdened with the ongoing legal expenses required to attempt to protect its interests, and with the lack of collected revenue from its legal adversaries, P & A Remediation continued to operate minimally in anticipation of a favorable legal settlement of its then pending litigation, while actively seeking operating financing for the implementation of its operating business plan from other market sources. During the second fiscal quarter of 2001, all assets of P & A Remediation and Simpco were conveyed to Basic Technologies, Inc., (or assigns) for and in consideration of the assumption of or forgiveness of debts owed by P & A Remediation and Simpco to Basic Technologies, Inc., or assigns. CCTech provides high speed internet access for residential and business customers in the state of Hawaii. CCTech also has th e capability to host commercial websites world wide.

Simpco, Inc. previously owned assets, but did not do any business with any source outside of the Company. With the August 2001 mediated settlement of litigation with the previous mid-level management of P & A Remediation (the same being the previous owners of Simpco), Simpco agreed to relinquish ownership of a majority of its hard assets to the previous owners of Simpco, Inc. This fact, coupled with the uncovering of other potential unauthorized business and financial commitments undertaken in the name of Simpco by the previous owners of Simpco, prompted the ongoing operations of Simpco as an intercompany leasing company to be suspended, and the remaining assets of Simpco to be conveyed for and in consideration of the assumption or forgiveness of the above referenced debt.

With skeleton staffing, during the period from March 2000 through November 2001, P & A Remediation has done limited business with outside sources.

Yankee Development Corporation owns assets, but has done minimal business to date.

Subject to securing the necessary equity infusion or long term financing, Company management hoped to re-establish currently suspended day to day operations in its Olney, Texas, yard location and to potentially acquire and reinstitute the Nowata, Oklahoma, location, in an ongoing operation of P & A Remediation, LLC. The financial repercussions of the negotiated settlement of the August 2000 instituted litigation have precluded ongoing operations of Simpco and P & A Remediation in Texas and Oklahoma.

In November 2001, the Company formed Oilfieldjunk.com LLC., a Texas limited liability company, to attempt to assimilate the potentials for operations of the Company's previous operations in the environmental remediation business. A new month to month agreement was reached with the owner of the Olney, Texas, yard and with such, the Company will house the Company's threading equipment, there to attempt to establish an operating pipe threading and testing facility. If the market proves advantageous, the complementary facilities in the previously identified Nowata, Oklahoma, location may be attempted to be reacquired by the Company. With such, both locations would have large capacity pipe threading, straightening, and testing facilities that are not readily available in the north Texas and Oklahoma markets.

Company management is of the opinion that a significant portion of the pipe testing market in north Texas may be immediately available to the Company. The implementation of this plan will require the Company securing skilled employees, contractual consultants, or joint venture partners, to establish the day to day operations. The consultants and / or venture partners could be previously identified potential competitors of the Company's previous operations in the pipe market. Based upon industry knowledge, Company management believes that the oil & gas operators, steel tubular and pipe dealers, and re-sale equipment marketers are candidates for services of the Company's pipe threading and testing facilities. However, there can be no assurance that this pipe testing and threading market will continue, that the Company can establish complementary and efficient day to day operations in its facilities, that the Company wi ll have the resources to complete the work under any such operations, or that the Company after establishing operations, will be able to operate profitably.

Subject to securing the equity infusion or long term financing necessary to finance the implementation and operation in the north Texas market, Company management may review potential operations in the northeast Oklahoma market in the pipe threading / testing business and related environmental remediation businesses (oil well plugging and salvage operations).

Negotiations with potential skilled employees, contractual consultants, and/or joint venture partners, in Texas are currently in the beginning phases with Company management. There can be no assurance that the Company can successfully negotiate with consultants or skilled employees to the Company's benefit, that the previously identified markets will continue, that the Company will be able to secure any contracts for any of the market jobs, that the Company will have the resources to complete the work under any such contracts, or that the Company, if it receives any such contracts, will be able to complete them profitably.

Company management is currently seeking negotiations with outside financial partners for a joint venture, or private placement, to raise sufficient capital for Yankee to cause the proper drilling and completion of a sufficient number of wells to prove or disprove the Yankee Unit field's engineering and reserves study. This program under consideration and negotiation could possibly mean the drilling of up to sixteen (16) initial wells, at a total cost of up to $2,400,000 to the financial partners. As of the date of this report, there exist no agreements, arrangements or understandings with respect to any potential source of funding. The results of drilling such wells can never be determined in advance. The industry has a history of unprofitable efforts resulting from dry holes, or commercial wells which fail to produce in quantities sufficient to provide an economic return. Yankee Development, since inception, has generated negligible revenues from the production of oil. No assurance can be given that Yankee Development will successfully negotiate the funding of its development program, generate any revenues, or achieve profitability from the production of the proven developed reserves owned as of the date hereof, or from oil and/or gas properties, if any, acquired in the future.

The Company intends to develop a plan for internal growth of the existing markets of its internet subsidiary, CCTech, which services the consumers of the State of Hawaii with high speed Internet Access for residence and business uses. Currently doing business and maintaining offices on the islands of Oahu and Maui, CCTech has the capability to provide computer and internet commerce consultation services to businesses nationwide. The development of a nationwide marketing plan of a 'business to business' division is being planned. It is contingent upon the Company securing financing necessary to re-align and reorganize Company infrastructure to expand its core business to the islands of Kauai and the Big Island of Hawaii. This expansion will allow CCTech to be the only regional statewide ISP in the market. Once in place and operating, a long term plan for nationwide internet service will be implemented. A review of marke t opportunities available to the Company is currently in process by Company management. There can be no assurance that the Company can successfully secure financing necessary to make the expansion to state-wide operations, that the market available for the core business will continue, that the Company will be able to get new customers in newly opened markets, that the Company will have the resources to provide services if such markets are opened, and if it will be able to operate them profitably.

The Company hopes to diversify its plan of operations through the acquisition of companies engaged in businesses unrelated to the oil and gas business. The Company is not presently engaged in negotiations for the acquisition of companies operating in industries related and unrelated to the Company's core business.

The activities of the Company in all subsidiaries to date have been primarily focused on securing long term financing or equity infusion; evaluating and forming mid-level management teams; researching and testing actual project operations and profitability; and developing and identifying market opportunities that can be taken advantage of by the Company's positions in its various subsidiaries. Accordingly, management does not consider the historical results of operations to be representative of future results of operation of the Company. This Form 10-QSB should be read in conjunction with previous filings filed by the Company.

The Company expects to meet our capital needs for the next 3 months with operating cash flow, current cash and receivables balances, and proceeds of to be negotiated operating financing with various market sources. Operating beyond 3 months, or to make any significant expansion, will require the proceeds from the sale or issuance of capital stock, lease financing, or additional debt. Other than any extraordinary legal expenses caused by settled litigation with former mid-level management of P & A Remediation, or unforeseen additional filing fees and legal expenses related to the cessation of operations of Simpco, Inc., and P & A Remediation, LLC. (Texas), we do not anticipate any out of budget operational shortfalls in the coming fiscal year. We regularly examine financing alternatives based on prevailing market conditions and expect to access the capital markets from time to time based on our current and anticipat ed cash needs and market opportunities. Over the longer term, we will be dependent upon obtaining the long term equity infusion or financing necessary to implement our upgraded operations in both the newly created environmental remediation subsidiaries and in the internet subsidiaries. Each subsidiary will be then be dependent upon positive operating cash flow and, to the extent cash flow is not sufficient, the availability of additional financing, to meet our debt service obligations. Insufficient funding may require us to delay or abandon some of our planned future expansion or expenditures, which could have a material adverse effect on our growth and ability to realize economies of scale.

Our business strategy has required, and is expected to continue to require, substantial capital to fund acquisitions, working capital, capital expenditures, and interest expense.

As of December 31, 2001, the Company had approximately $115,900 in cash and certificates of deposit and $43,200 in current receivables.

The Company also has significant debt service requirements. At December 31, 2001, our interest-bearing liabilities were $980,000 and the expected annual interest expense associated with it is approximately $50,000. The interest expense and principal repayment obligations associated with our debt could have a significant effect on our future operations.

Our anticipated expenditures are inherently uncertain and will vary widely based on many factors, including operating performance and working capital requirements, the cost of additional acquisitions and investments, the requirements for capital equipment to operate our business and our ability to raise additional funds. Accordingly, we may need significant amounts of cash in excess of our plan, and no assurance can be given as to the actual amounts of our future expenditures. We will have to increase revenue without a commensurate increase in costs to generate sufficient cash to enable us to meet our debt service obligations. There can be no assurance that we will have sufficient financial resources if operating losses increase or additional acquisition or other investment opportunities become available.

The Company is not in the business of producing any item that would require product research and development, other than the continual market analysis by Company and subsidiary management.

Other than, and subject to, securing the required financing necessary to implement upgraded operations in its environmental and internet subsidiaries, and the implementation of the same, there is (1) no expected purchase or sale of plant and significant equipment; or (2) no expected significant changes in the number of employees, relative to the size of previous years operations.

(b)	Management's Discussion and Analysis of Financial Condition and Results of Operations.

The following Management's Discussion and Analysis of Financial Condition and Results of Operations contains certain forward-looking statements regarding future financial condition and results of operations and the company's business operations. We have based these statements on our expectations about future events. The words "may," "intend," "will," "expect," "anticipate," "objective," "projection," "forecast," "position" or negatives of those terms or other variations of them or by comparable terminology are intended to identify forward-looking statements. We have based these statements on our current expectations about future events. Although we believe that our expectations reflected in or suggested by our forward-looking statements are reasonable, we cannot assure you that these expectations will be achieved. Our actual results may differ materially from what we currently expect. Important factors which could cause ou r actual results to differ materially from the forward-looking statements include, without limitation (1) general economic and business conditions, (2) ability to cost effectively integrate multiple technologies, (3) effect of future competition, and (4) failure to raise needed capital.

The Company serves as a holding company for three wholly-owned corporate subsidiaries and three wholly owned limited liability companies: Yankee; Simpco; CCTech; PAR Texas; PAR Oklahoma; and Oilfieldjunk.com. PAR Texas and PAR Oklahoma are collectively 'P & A Remediation'.

In Texas, the Company created PAR Texas in October 1998 to take advantage of the environmental remediation opportunities available in central west Texas and in north Texas. PAR Texas' environmental remediation and salvage business involved the plugging of oil wells and the remediation and clean-up of oil fields, and the salvage or purchase for resale on the secondary market of construction materials, pipe, steel tubulars and used and reconditioned oil field equipment. Although PAR Texas desired to expand its customer base to include governmental agencies such as the State of Texas' Railroad Commission, the Company's customers were limited to private and publicly-held oil and/or gas companies. The company's operations were limited to the north central and central west regions of Texas.

In March 2000, PAR Texas' active well plugging and pipe sales operations in Texas were suspended. All personnel of the Ballinger, Texas, yard were dismissed for cause and the yard is no longer rented. There is no longer Company activity in Ballinger, Texas.

In October 1999, Company management decided to shift the operating focus of PAR Texas' Olney, Texas, yard from day to day local Texas operations to move forward to build necessary equipment to operate and to establish operations in Oklahoma. From March of 2000 to October 2001, PAR Texas had maintained operations of the Olney yard with one part time helper, there only to maintain legal integrity of lease space and to attempt to protect company assets. A large amount of equipment had been removed by mid-level management to storage locations in Texas and / or transported to Nowata, Oklahoma, to establish operations there with PAR Oklahoma. In early October 2001, PAR Texas ceased operations and any remaining equipment or inventory in the PAR Texas yards was sold or conveyed to settle debts.

In Oklahoma, the Company created PAR Oklahoma in October 1999 to take advantage of the environmental remediation opportunities available with the January 2000 implementation of the Lake Oologah oilwell plugging and environmental remediation project. The then mid-level management of PAR Oklahoma went forward with the intent of taking steps necessary to be the absolute lowest bidder to insure a base position in the overall development of the EPA project. With the OCC bid contract in hand, PAR Oklahoma, with its then mid-level management, went forward with what was anticipated would be a sixty (60) to ninety (90) day project. The economic and engineering estimates of the then mid-level management had serious short comings, and such caused the delay of the initial phase of plugging eighty one (81) oil wells for a period in excess of ninety (90) days.

In July 2000, the Company's well plugging operations in Oklahoma were suspended pending reorganization of equipment and employees, and the acquisition of additional equipment and required local management to efficiently operate in the EPA project. The Company now has no operations in the State of Oklahoma.

The suspension of operations of PAR Texas and active PAR Oklahoma operations are a result of multiple factors. These include management's overall review of staffing and a reorganization of equipment and employees to efficiently serve the available markets of the Olney, Texas, location; the financing requirements of doing the same reorganization; and the now settled litigation between the former mid-level management of PAR Texas and PAR Oklahoma. The Company has decided that sufficient market damage was done by the then mid-level management, that actual legal operations of PAR Texas and Simpco will not resume. It is not known, at this time, if operations of PAR Oklahoma will resume.

The Company had a significant capital investment in PAR Texas, PAR Oklahoma, and Simpco. In addition to third party acquisition costs, and costs to manufacture, refurbish and upgrade the acquired equipment of Simpco, the Company issued stock and debt instruments for the equity of the previous owners of Simpco in equipment. Since the creation of PAR Texas and PAR Oklahoma, the Company had used its operations and the experience from its initial entry into the field to develop what Company management believed to be a successful plan for continued operations. The Company entered the market undercapitalized and under supplied, relative to the needs of the then target industry. Upon industry entry, Company management had contemplated a significant investment and negative cash flow for the initial two years of operations while building a solid basis for expansion in the future. The negative cash flow from operations of PAR Tex as and PAR Oklahoma for the years 1999, 2000, and 2001, exceeded Company management's expectations and capital budgets, and though there was a corresponding increase in equity of the Company, the operating cash budget had significant shortfalls in the estimation of cash reserves necessary for the refurbishment of equipment acquired in the Simpco transaction. Company management is of the opinion that this was due to an understatement of equipment refurbishment budget figures provided by the then mid-level management of PAR Texas (the former owners of Simpco). Revenues from sales of pipe, tubulars, and equipment were also over estimated by the same mid-level management. Though the operating cash loss had an immediate negative effect on Company equity position, these year's operations had established a physical and potential base of operations in both north Texas and northeast Oklahoma that could possibly allow PAR Texas and PAR Oklahoma (or a comparable legal operation) to generate significant revenue in th e pipe threading / testing industry and in the environmental remediation business. Sufficient market damage was done to PAR Texas, and sufficient legal obstacles have been put in place as a result of the Company's relationships with the then mid-level management of PAR Texas (the former owners of Simpco), that Company management has decided to not attempt to resume operations in PAR Texas or Simpco. Revenue figures assume a successful meeting of the expansion funding requirements, and that operations are re-instituted as planned by Company management. There is no assurance as to if, or when, Company operations may be re-instituted in any field related to the environmental remediation / salvage, or secondary market sales of oilfield related equipment or pipe (tubulars) inventory business.

With regard to the natural resources subsidiaries (re-instituted operations may be attempted in the Company's newly created subsidiary, Oilfieldjunk.com LLC.), there are no known trends, events or uncertainties that have or are reasonably likely to have a material impact on our short-term or long-term liquidity, or on our internal and external sources of liquidity. Likewise, there are no material commitments for capital expenditures. There are no known trends, events or uncertainties that have had or that are reasonably expected to have a material impact on the potential net sales or revenues or income from the Company's re-entry into previously suspended plugging and remediation operations. There are no unforeseen significant elements of income or loss that may arise from the Company's re-entry into previously suspended operations. Any material changes from period to period in one or more line items of our financial sta tements could be caused only by an unforeseen events related to the settlement with the former owners of Simpco, or the failure of the former owners of Simpco to fulfill the obligations of the arbitrated settlement agreement. There are no seasonal aspects that may have a material effect on the financial condition or results of suspended operations.

There has been no development activity with the Company's proven oil & gas reserves in Yankee. There is a significant uncertainty inherent to the oil & gas production and development industry. The worldwide trend of increasing crude oil and natural gas prices prompted Company management to investigate numerous possible financing vehicles that may be required to secure the equity infusion or long term financing necessary to develop Yankee's assets. With the worldwide increase in the price of oil, there has been renewed drilling and production activity in the areas of Texas where the company has interests. This renewal of activity may create unforeseen delays in the availability of subcontractors for all phases of an oil & gas well drilling and development program. This delay could cause financial difficulty and shortage of cash flow budgets that are relied upon to profitably and efficiently develop the Compan y's asset.

Other than other historical industry and public information, Company management is not aware of any known trends, events or uncertainties that have or are reasonably likely to have a material impact on the Company's short-term or long-term liquidity, or on our internal and external sources of liquidity. We have no material commitments for capital expenditures in Yankee. Other than historical and public information, there are no known trends, events or uncertainties that have had or that are reasonably expected to have a material impact on the net sales or revenues or income from continuing operations without development of the Company's oil & gas reserves. Should the Company be successful in securing the financing necessary to fund the development of the oil & gas reserves, there could be a significant element of income or loss that could arise from our continuing operations. This significant element would be a r esult of the Company being able to successfully develop to production its proven oil & gas reserves, or disproving the reserves and engineering premise of such with the drilling of dry holes that result in no oil & gas production. The cause for such material changes from period to period in one or more line items of our financial statements would be the results of the Company's development drilling program. Though the Texas seasons create moderate difficulty with any outside operations, there are limited seasonal aspects that might have a material effect on the financial condition or results of operation of the development drilling program. No assurance can be given that Yankee Development will successfully negotiate the funding of its development program, generate any revenues, or achieve profitability from the production of the proven developed reserves owned as of the date hereof, or from oil and/or gas properties, if any, acquired in the future.

The Company has a significant stock investment in its internet subsidiary, CCTech, and intends to develop a plan for internal growth of its existing markets. With an effective January 1, 2000, acquisition by the Company, the subsidiary has a stated purpose to provide services to the consumers of the State of Hawaii with high speed Internet Access for residence and business uses. With operations currently on the islands of Oahu and Maui, CCTech has operated at a relative breakeven position in comparison to its fiscal operations prior to acquisition by the Company. Company management originally made the decision to increase the payroll burden on operations by providing for the payment of executive salaries at the Honolulu office. This increase in operating expenses kept revenue from operations at a relatively flat growth curve. These salaries were eliminated during the most recent fiscal quarter. A development of a nation wide marketing plan of a 'business to business' division, and the expansion of the current operations to include statewide operations and expanded broadband capabilities to handle DSL customers is considered critical to continued success in the regional internet service provider's operations. This expansion is contingent upon the Company securing financing necessary to re-align and re-organize Company infrastructure to expand its core business to the islands of Kauai and the Big Island of Hawaii. There can be no assurance that the Company can successfully secure financing necessary to make the expansion to state-wide operations, that the market available for the core business will continue, that the Company will be able to get new customers in newly opened markets, that the Company will have the resources to provide services if such markets are opened, and if it will be able to operate them profitably.

The expansion of the Company's core business of dialup and DSL service to previously unserved markets may have a profound effect on the internet subsidiary's bottom line. A significant market share and volume increase in operating revenue could require only incremental increases in operating costs of the core infrastructure of the subsidiary's Honolulu based main operations center. The reconfiguring and re-allocation of the subsidiary's infrastructure will allow the expansion of the nationwide 'business to business' portal and to allow the expansion of local business broad band development.

There are significant uncertainties inherent to the internet. However, in the core business of the regional ISP operations of CCTech, there are no known trends that have or are reasonably likely to have a material impact on the small business issuer's short-term or long-term liquidity, or on our internal and external sources of liquidity. Other than the need for expansion for profitable operations, there are no known material commitments for capital expenditures, or known trends, events or uncertainties that have had or that are reasonably expected to have a material impact on the net sales or revenues or income from continuing operations. There are no known significant elements of income or loss that do not arise from our continuing operations, and there are no seasonal aspects that had a material effect on the financial condition or results of operation.

PENDING SPIN-OFF AND CHANGE IN CONTROL

In December 2001, we entered into a Letter of Understanding which provided for a series of transactions which, if consummated, would result in the spin-off by the Company of its oil and gas assets and operations and a change in control of the Company.

Under the Letter of Understanding, the Company formed and organized a new wholly-owned subsidiary under the name "Founders Industries, Inc." ("Founders"). The Company transferred to Founders, solely in consideration of Founders common stock, all of the Company's interest in its existing subsidiaries. The executive officers and directors of Founders are the same persons who served those positions in Basic. The intention is to prepare a registration statement to be filed with the Securities and Exchange Commission (the "Commission") registering the distribution of the Founders common stock to the shareholders of Basic, pro rata. The previously announced record date for the spin-off distribution is February 8, 2002. No estimate can be made as to when the registration statement will be filed with the Commission. When the registration statement is declared effective by the Commission, of which there can be no assurance, ownership of Founders will be distributed to the Basic shareholders as of the record date and Founders will be a separate reporting company for whose securities a public trading market may develop.

As part of the foregoing spin-off, the Letter of Understanding provided that the Basic board of directors would be increased to seven members: four of whom were existing directors, to whom were added Gary Brown, Steve Jesson and William Chastain. These new directors , elected on December 13, 2001, were elected to the board and charged with the responsibility to develop the Company's ISP and telecommunications businesses. Concurrently, Mr. Brown was elected to serve as President and CEO of Basic, filling the vacancy created by the voluntary resignation of Bryan Walker. As part of developing Basic's telecommunications operations, concurrently with the spin-off of Founders, it has been agreed that Founders would reconvey its interest in the Honolulu ISP, Cyber Cities, to Basic for nominal consideration.

Mr. Brown has agreed in the Letter of Understanding that the costs and expenses incurred in preparing and filing the Founders registration statement and completing the spin-off would be borne by his group of investors. Further, Mr. Brown was granted an option to purchase from the Shelton Voting Trust, the Company's principal and controlling shareholder, an aggregate of 4.9 million shares of common stock at a price of $.002 per share. The option is only exercisable after the Founders registration statement has been filed with the Commission.

If all of the transactions provided for in the Letter of Understanding are completed, of which there can be no assurance, Basic's oil and gas operations will be distributed to Basic's shareholders, pro rata, as part of the Founders spin-off, Founders will become a separate publicly reporting company, and Mr. Brown will acquire control of a majority of the outstanding voting securities of Basic. No estimate can be made as to when, if at all, these transactions will be completed.

FORWARD LOOKING STATEMENTS

When used in this Quarterly Report on Form 10-QSB, in documents incorporated herein and elsewhere by us from time to time, the words "believes," "anticipates," "expects" and similar expressions are intended to identify forward-looking statements concerning our business operations, economic performance and financial condition, including in particular, our business strategy and means to implement the strategy, our objectives, the amount of future capital expenditures required, the likelihood of our success in developing and introducing new products and expanding the business, and the timing of the introduction of new and modified products or services. These forward looking statements are based on a number of assumptions and estimates which are inherently subject to significant risks and uncertainties, many of which are beyond our control and reflect future business decisions which are subject to change.

A variety of factors could cause actual results to differ materially from those anticipated in our forward-looking statements, including general economic trends, the availability of working capital and developments in energy technology that could adversely impact our operations. We caution that such factors are not exclusive. Consequently, all of the forward-looking statements made in this document are qualified by these cautionary statements and readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this Quarterly Report on Form 10-QSB. We undertake no obligation to publicly release the results of any revisions of such forward-looking statements that may be made to reflect events or circumstances after the date hereof, or thereof, as the case may be, or to reflect the occurrence of unanticipated events.

PART II OTHER INFORMATION

Item 1. Pending Legal Proceedings

Company management does not know of any legal proceedings to which the Company or its subsidiaries are parties or to which the property of any of such companies is the subject which are pending, threatened or contemplated, or of any unsatisfied judgment5s against the Company or its subsidiaries except as described below.

PAR Texas has ceased operations, and with current trade accounts payable of approximately $60,000 is involved in some disputes on open accounts, a number of which have resulted in suits on sworn account being filed in four counties in the State of Texas. In each matter, PAR Texas has responded to the action by the Movant with denial of their statements and claims against the company and made other contacts to attempt a negotiated resolution. Each of the matters has either been brought to judgment or is being negotiated for a settlement as of the date hereof. The disputed account balances total less than $20,000 and management does not believe the disputes are likely to have a material adverse effect on the Company's financial condition. The Company has accrued what it believes to be amounts sufficient to properly reflect its liabilities in these cases.

In August of 2000, three lawsuits were filed in Federal and state courts in Texas and Oklahoma, with the Company opposing the former owners of Simpco, as well as former employees. All three matters were resolved in a mediated global settlement agreement in August of 2001. The agreement called for a return of the bulk of the assets acquired in the Simpco transaction; certain post-Simpco acquisition acquired and improved assets; and the release of an undetermined portion of the accounts receivable due from the State of Oklahoma, in return for the return to treasury of the originally issued 850,000 shares of Common Stock, as well as the cancellation of $145,000 in promissory notes. A loss of $77,378 was incurred in this agreement, and reflected in the June 30, 2001 financial statements under the contingency provisions of generally accepted accounting principles. The three lawsuits have been dismissed with prejudice to re-filing the same, though th e actual settlement and return of the Company's assets have not been completed as of December 31, 2001. Company management intends to vigorously pursue the return of the Company's equipment as mutually agreed in the arbitrated settlement agreement between the parties.

Item 2. Changes in Securities

(a) There have been no material modifications to the instruments defining the rights of the holders of any class of registered securities.

(b) There have been no material limitations or qualifications on the rights evidenced by any class of registered securities by the issuance or modification of any other class of securities.

(c) The Company continued a private placement offering for additional funding. At the balance sheet date, $500 in funds had been received for additional stock, but the shares have not been issued, pending receipt of certain documents. The amounts received are included in stockholders' equity.

(d) During July of 2001, the Company issued 5,250 shares of restricted common stock for the payment of certain fees and authorized the future issuance of 27,000 shares of restricted common stock for the payment of certain fees.

(e) During October of 2001, the Company issued 6,250 shares of restricted common stock for the payment of certain fees and authorized the future issuance of 14,250 shares of restricted common stock for the payment of certain fees.

(f) During October of 2001, for the year ending June 30, 1999, the Company authorized stock options exercisable at $.001 per share, totalling 60,000 shares as consideration for the services of Bryan L. Walker acting as Chief Executive Officer of the Company. For the year ending June 30, 1999, the Company authorized stock options exercisable at $.001 per share, totalling 30,000 shares as consideration for the services of Richard C. Smith acting as Chief Financial Officer of the Company. For each of the years ending June 30, 2000, and June 30, 2001, the Company authorized stock options exercisable at $.001 per share, totalling 100,000 shares, per year, as additional consideration for the services of Bryan L. Walker acting as Chief Executive Officer of the Company. For each of the years ending June 30, 2000, and June 30, 2001, the Company authorized stock options exercisable at $.001 per share, totalling 75,000 shares, per year, as consideration for the services of Richard C. Smith acting as Chief Financial Officer of the Company. For the year ending June 30, 2002, the Company authorized stock options exercisable at $.001 per share proportionate to the amount of time served in office, totalling 100,000 and 75,000 shares respectively to Bryan L. Walker and Richard C. Smith as consideration for their services acting as Chief Executive and Chief Financial Officers of the Company. The option exercise date was January 3, 2002, and all options were exercised.

(g) During October of 2001, for the years ending June 30, 1999; June 30, 2000; June 30, 2001; and June 30, 2002; the Company authorized stock options exercisable at $.001 per share proportionate to the amount of time served in office, totalling 10,000 shares per fiscal year, to the non-salaried members of the Board of Directors, as consideration for their services acting as Directors of the Company. Michael Bacon is the only Director that has been paid an executive salary and was not offered the option. The option exercise date was January 3, 2002, and all options were exercised.

(h) During December of 2001, for and in consideration of the introduction of, and the successful negotiation of, a 'Letter Of Understanding For Corporate Redirection' with an investment group led by Gary L. Brown, the Company authorized stock options exercisable at $.001 per share, totalling 250,000 shares, for the services of Bryan L. Walker and Richard C. Smith (acting for the Company); and stock options exercisable at $.001 per share, totalling 250,000 shares, for the services of Kent Brandt (acting for American Merger Consultants). The options were exercised on January 3, 2002.

(i) During December of 2001, the Company issued 24,702 shares of restricted common stock for the payment of certain fees and debts of the Company.

(j) During October of 2001, the Company established a Qualified Employee Medical Reimbursement Program for certain qualified employees and officers of the Company.

Unless otherwise noted, all of the foregoing issuances of the Company's securities were undertaken without registration under the Securities Act of 1933, as amended (the "Securities Act") in reliance upon the exemption contained in Section 4(2) of the Securities Act. In each instance, the securities were acquired for investment purposes and were subject to appropriate restrictions on transfer.

Item 3. Defaults Upon Senior Securities

(a) There has been no material default in the payment of principal, interest, a sinking or purchase fund installment, or any other material default not cured within 30 days, with respect to any indebtedness of the small business issuer exceeding 5 percent of the total assets of the issuer.

(b) There is no material arrearage in the payment of dividends and there has been no other material delinquency not cured within 30 days, with respect to any class of preferred stock of the registrant which is registered or which ranks prior to any class of registered securities, or with respect to any class of preferred stock of any significant subsidiary of the registrant.

Item 4. Submission Of Matters To A Vote Of Security Holders

There were no matters submitted to a vote of security holders during the reporting period.

Item 5. Other Information.

None, except as previously disclosed.

Item 6. Exhibits and Reports Filed on Form 8-K

Exhibits

1.0 Letter of Understanding dated December 13, 2001.

There were no reports on Form 8-K filed during the period covered by this filing.

SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
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		Basic Technologies, Inc.
Date: February 22, 2002	Signature:	/s/ Gary L. Brown Gary L. Brown President and Chief Executive Officer

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Skylynx Communications (PPLS) Inactive 10QSB/A2002 Q2 Quarterly report (small business) (amended)