Skylynx Communications (PPLS) 10QSB/A 2002 Q1 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 UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

For the quarterly period ended SEPTEMBER 30, 2001

[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT

For the transition period from _______________ to _________________

        Colorado        
(State or other jurisdiction of incorporation or organization)       84-1446622      
(I.R.S. Employer
Identification No.)

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7318 Point of Rocks Road
           Sarasota, Florida 34242           
(Address of principal executive offices, including zip code)

Registrant's Telephone No., including area code: (941) 928-5110

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__________________________________

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS

Check whether the registrant filed all documents and reports required to be filed by Section l2, 13 or 15(d) of the Exchange Act after the distribution of securities under a plan confirmed by a court.

Yes [ ] No [ ] NOT APPLICABLE

APPLICABLE ONLY TO CORPORATE ISSUERS

State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date: 7,867,055 common stock as of November 14, 2001.

Transitional Small Business Disclosure Format (Check one): Yes [ ] No [x]

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.

(1) Yes [x] No[ ] (2) Yes [x] No [ ]

BASIC TECHNOLOGIES, INC.

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FORM 10-QSB
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2001

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TABLE OF CONTENTS

PART I FINANCIAL INFORMATION...........................................3

Item 1. Financial Statements
               Consolidated Balance Sheets

        September 30, 2001 and September 30, 2000 (Unaudited).........F1

        Consolidated Statements of Income (Loss)
        Three Months Ended September 30, 2001, and
        September 30, 2000 (Unaudited)................................F3

        Consolidated Statements of Changes in
        Stockholders' Equity (Deficit) September 30, 2001, and
        September 30, 2000 (Unaudited)................................F4

        Consolidated Statements of Cash Flows
        Three months Ended September 30, 2001, and
        September 30, 2000 (Unaudited)................................F5

        Notes & Schedules to Consolidated Financial Statements
        (Unaudited)...................................................F6

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

        (a) Plan of Operation For The Next Twelve         
            Months.....................................................3

        (b) Management's Discussion and Analysis of Financial Condition
        and Results of Operations......................................7

PART II OTHER INFORMATION

Item 1. Legal Proceedings ............................................11

Item 2. Changes in Securities ........................................12

Item 3. Default by the Company on its Senior Securities...............13

Item 4. Submission of Matters to a Vote of Securities Holdings........13

Item 5. Other Information.............................................13

Item 6. Exhibits and Reports on Form 8-K .............................14

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.

BASIC TECHNOLOGIES, INC.
Consolidated Balance Sheets

		September 30,	September 30,
		2001	2000
ASSETS
CURRENT ASSETS
	Cash	$        0	$25,893
	Accounts Receivable-Net	41,237	102,077
	Inventories	46,224	70,903
	Prepaid Expenses	689	6,650
	Deferred Tax Asset	134,354	290,993
	TOTAL CURRENT ASSETS	$  222,504	$  496,516
FIXED ASSETS
	Equipment	$  424,728	$1,404,838
	Land and Buildings	9,974	9,974
		434,702	1,414,812
	Less: Accumulated Depreciation	$ (101,332)	$ (153,867)
	TOTAL FIXED ASSETS	$  333,370	$1,260,945
OTHER ASSETS
	Certificate of Deposit	$  113,461	$        0
	Capitalized Loan Fees	28,219	0
	Deposits	760	3,376
	Organization Costs-Net	599	1,050
	Proved Developed Oil Reserves	3,711,000	3,711,000
	Acquisition Goodwill-Net	825,74	870,984
	Deferred Tax Asset	360,215	0
	TOTAL OTHER ASSETS	$5,039,996	$4,586,410
	TOTAL ASSETS	$5,595,870	$6,343,871

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

BASIC TECHNOLOGIES, INC.
Consolidated Balance Sheets

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		September 30,	September 30,
		2001	2000
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
	Cash Deficit	$     8,316	$         0
	Short Term Notes Payable	116,697	401,259
	Accounts Payable	252,124	227,886
	Accrued Taxes and Interest Payable	152,094	58,360
	Current Portion of Long Term Debt	45,390	68,998
	TOTAL CURRENT LIABILITIES	$   574,621	$   756,503
LONG TERM LIABILITIES
	Accrued Interest Payable	$33,264	$         0
	Deferred Tax Liability	223,069	223,069
	Payables-Shareholders	585,374	463,104
	Capital Lease Payable	32,871	32,871
	Long Term Notes and Obligations	679,353	305,203
	Less: Current Maturities	(45,390)	(68,998)
	TOTAL LONG TERM LIABILITIES	$ 1,508,541	$   955,249
	TOTAL LIABILITIES	$ 2,083,162	$ 1,711,752
STOCKHOLDERS' EQUITY
	Common Stock, $.00001 par value, 100,000,000 shares
	authorized and 7,867,005 issued and outstanding	$        78	$        77
	Preferred Stock, $.00001 par value, 10,000,000   shares authorized and no shares issued and   outstanding	0	0
	Paid in Capital	5,263,355	5,162,408
	Paid Stock Subscriptions	27,500	34,500
	Treasury Stock (850,000)	(768,150)	0
	Retained Earnings (Deficit)	(1,010,075)	(564,866)
	TOTAL STOCKHOLDERS' EQUITY	$ 3,512,708	$ 4,632,119
	TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$ 5,595,870	$ 6,343,871

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

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

		September 30,	September 30,
		2001	2000
REVENUES		$    93,924	$   105,262
COST OF SALES		2,175	779
	GROSS PROFIT	$    91,749	$   104,483
OPERATING EXPENSES
	Selling, General and Administrative   Expenses	185,691	211,943
	Interest	24,408	13,761
	Amortization	11,423	11,423
	Depreciation	12,016	28,383
	Bad Debt Expense	1,958	0
	TOTAL EXPENSES	$   235,496	$   265,510
	NET INCOME (LOSS) FROM OPERATIONS	$  (143,747)	$  (161,027)
OTHER INCOME (EXPENSE)
	(Gain)- Debt Settlement	$     5,062	$     1,818
	Interest (Income)	1,262	133
	TOTAL OTHER INCOME (EXPENSE)	6,324	1,951
	NET INCOME (LOSS) BEFORE TAXES	$  (137,423)	$  (159,076)
DEFERRED TAX BENEFIT		46,724	54,086
	NET INCOME (LOSS)	$   (90,699)	$  (104,990)
	Beginning Retained Earnings (Deficit)	(919,376)	(459,876)
	ENDING RETAINED EARNINGS (DEFICIT)	$(1,010,075)	$  (564,866)
EARNINGS PER SHARE
	Income (Loss) for Common Stockholders	$     (0.01)	$     (0.01)

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

BASIC TECHNOLOGIES, INC.
Consolidated Statements of Changes in Stockholders' Equity
For the periods ended September 30, 2001 and September 30, 2000

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		September 30	September 30
		2001	2000
COMMON STOCK
	Balance at Beginning of Year	$         78	$        77
	Issuance of 5,250 shares of stock for expenses	0	0
	Balance at End of Year	$         78	$        77
STOCK SUBSCRIPTIONS
	Balance at Beginning of Year	$        500	$    28,500
	Subscriptions Received (For expenses payments)	27,000	6,000
	Balance at End of Year	$     27,500	$    34,500
PAID IN CAPITAL
	Balance at Beginning of Year	$  5,258,105	$ 5,162,408
	Proceeds in Excess of Par Value of Common Stock   Issued for Expenses	5,250	0
	Balance at End of Year	$  5,263,355	$  5,162,408
TREASURY STOCK
	Balance at Beginning of Year (850,000 shares)	$   (768,150)	$          0
	Balance at End of Year	$   (768,150)	$          0
RETAINED EARNINGS (DEFICIT)
	Balance at Beginning of Year	$   (919,376)	$   (459,876)
	Net Loss	(90,699)	(104,990)
	Balance at End of Year	$(1,010,075)	$   (654,866)
	TOTAL STOCKHOLDERS' EQUITY	$ 3,512,708	$  4,632,119

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

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

			September 30,	September 30,
			2001	2000
CASH FLOWS FROM OPERATING ACTIVITIES
	Net Income (Loss)		$    (90,699)	$  (104,990)
	Adjustments to reconcile net income to net   cash provided by operating activities:
		Gain - Debt Settlement	(5,062)	0
		Depreciation and Amortization	23,439	39,806
		Changes in Accounts Receivable	(9,861)	6,805
		Changes in Inventories	0	0
		Changes in Deferred Tax Asset (net)	(46,724)	(54,086)
		Changes in Accounts Payable and   Accrued Liabilities	49,551	3,908
		Changes in Prepaid Expenses	(689)	(6,650)
		Increase in Bad Debt Reserve	1,958	0
		NET CASH USED BY OPERATING   ACTIVITIES	$    (78,087)	$  (115,207)
	NET CASH USED BY INVESTING ACTIVITIES
		Purchase of Equipment	(3,426)	0
		NET CASH USED BY INVESTING   ACTIVITIES	$     (3,426)	$         0
CASH FLOWS FROM FINANCING ACTIVITIES
	Principal Payments on Bank and Other Notes		4,242	(22,466)
	Proceeds of Notes Payable		0	115,000
	Proceeds of Shareholder Loans		66,273	26,224
		NET CASH PROVIDED BY FINANCING   ACTIVITIES	$     70,515	$   118,758
		NET INCREASE IN CASH	$    (10,998)	$     3,551
		CASH AT BEGINNING OF PERIODS	2,682	22,342
		CASH AT END OF PERIODS	$     (8,316)	$    25,893

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

BASIC TECHNOLOGIES, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2001 and September 30, 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

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 $1958. 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 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.

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 revenues have been earned from oil and gas production during the fiscal period and $1,345 was earned for the prior fiscal period.

Interest

Interest expensed for the period is $24,408 and $13,761 for the prior fiscal 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 $23.25 per barrel, and the current price of oil is $17.75; 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.

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, is intended to be the owner and lessor of the consolidated entities' operating equipment. The transaction was accounted for under the purchase method.

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.

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.

NOTE 3 - EMPLOYEE BENEFITS

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

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 $3,850 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                   $ 14,850
2003                     10,000
Total                  $ 24,850

Total equipment rental expense for the period was $2,420 and $11,563 for the prior fiscal 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 $23.25 per barrel, and the current price of oil is $17.75 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.

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 September 30, 2001          $ 46,724
Prior Years                               447,875
Gross deferred tax asset                  $494,569

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.

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.

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               $ 40,029
2003                299,114
2004                330,362
2005                  9,848
Total              $679,353

Short Term Notes Payable

Between November, 1999 and June, 2001, the Company issued promissory notes totaling $ 409,291 for short term 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 pro- ceeds. Maturities varied, and renewal and extension provisions were avail- able.

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. The balances are classified as long term obligations.

NOTE 13 - SUPPLEMENTAL DISCLOSURES-STATEMENT OF CASH FLOWS

Operating activities reflect interest paid of $ for the current period and $ for the prior fiscal year's period. Debt of $41,000 was retired through the issuance of 41,000 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 three months ended September 30, 2001

		Oil & Gas	Environmental	Equipment	Internet &
		Production	Remediation	Leasing	E-Business	Eliminations	Consolidated
Sales to Unaffiliated Customers		$        0	$         0	$       0	$   93,924	$	$    93,924
Inter-Segment Sales		0					0
	Total Sales	$        0	0	0	103,917	0	93,924
Operating Income (Loss)		$        0	(9,453)	(10,664)	(59,363)		(79,480)
Corporate Expenses							(64,267)
	Total Operating Income (Loss)						(143,747)
Depreciation & Amortization		0	231	7,828	12,001	0	20,060
Corporate Expenses							3,379
	Total Depreciation & Amortization						23,439
Interest Revenue (Not Allocated to Segments)							1,262
Interest Expense		$        0	5,341	2,822	1,124	0	9,287
Corporate Expenses							15,121
	Total Interest Expense						24,408
							0
Segment Assets		$3,711,000	249,328	252,207	742,174	(218,522)	4,736,187
General Corporate Assets							859,683
	Total Assets						5,595,870
Expenditures for Segment Assets		$	$         0	$      0	$    3,426	$         0	$    3,426

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

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

(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 two limited liability companies, P & A Remediation, LLC, a Texas limited liability company (hereafter PAR Texas); and P & A Remediation, LLC, an Oklahoma limited liability company (hereafter PAR Oklahoma). 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 has performed environmental remediation and salvage operations for the oil industry, and markets and sells construction materials, pipe, steel tubulars and used oil field equipment obtained from salvage operations or acquired for resale on the secondary market. Simpco owns certain reconditioned oil field equipment and vehicles that are leased to P & A Remediation for use in conducting oil field plugging, remediation and salvage activities. CCTech provides high speed internet access for residential and business customers in the state of Hawaii. CCTech also has the capability to host commercial websites world wide. Simpco, Inc., and Yankee Development Corporation own assets, but do not do business with any source outside of the Company. With skeleton staffing, P & A Remediation has done limited business with any source outside of the Company.

Subject to securing the necessary equity infusion or long term financing, Company management hopes to re-establish currently suspended day to day operation in its Olney, Texas, yard location and to potentially acquire and reinstitute the Nowata, Oklahoma, location. The Texas yard would house the Company's threading equipment, there to establish a pipe thread- ing and testing facility complementary to the facilities in the to be acquired Nowata, Oklahoma location. Both locations will have large capacity pipe threading, straightening, and testing facilities that are not readily available in the Texas and Oklahoma markets. Company management is of the opinion that a significant portion of the enhanced (due to the increase in the price of oil) pipe testing market 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 ven ture partners could be existing competitors 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 operations of the Company's pipe threading and testing facilities. Further, Company management believes they number in the thousands as of the date hereof, and that the pipe threading and testing facility may have an effective life of many years to come based upon the lack of available services in the market today. However, there can be no assurance that this pipe testing and threading market phenomenon will continue, that the Company can establish complementary and efficient day to day operations in its facilities, that the Company will 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 of the re-establishment of operations of PAR Oklahoma, Company management hopes to re-establish day to day operations in the to be acquired Nowata, Oklahoma, location. It is management's plan to use the to be acquired location's operations to complement the reorganized Texas yard and it's to be established pipe threading and testing facility. In addition to the Oklahoma pipe threading and testing, Company management hopes to re-establish a base for oil & gas well plugging and environmental remediation operations out of the Oklahoma yard. Based upon EPA reports on the Lake Oologah project (that the Company successfully bid and won the first eight one (81) well phase), Company management believes that the abandoned and inactive wells that are candidates for this EPA project number in the thousands as of the date hereof, and that the project may have an effective life of five years and pot entially as much as $16 million in revenue available. Re-established operations will not include previous PAR and Simpco mid-level management and should involve the operations of three separate crews and sets of remediation equipment, rather than the one set and one crew used by PAR Oklahoma in the initial eighty one (81) well phase of the Simpco contracted project.

The re-establishment of day to day operations in Nowata, Oklahoma, will require the Company securing skilled employees, contractual consultants, or joint venture partners, to work locally in northeast Oklahoma. The consultants and / or venture partners referred could be competitors in the oil well plugging market. Negotiations with the same 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 EPA project will continue, that the Company will win any of the contracts for the project, 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. 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 no 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 market 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 plans to diversify its operations through the acquisition of companies engaged in businesses unrelated to the oil and gas business. The Company is 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 and current cash and receivables balances. 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 registration and approval of a second issue of capital stock to be made available for public purchase, 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 anticipated 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 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, w hich 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 September 30, 2001, the Company had approximately $105,100 in cash and certificates of deposit and $41,200 in current receivables.

The Company also has significant debt service requirements. At September 30, 2001, our interest-bearing liabilities were $836,000 and the expected annual interest expense associated with it is approximately $92,000. 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 year's 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 our 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 two wholly owned limited liability companies: Yankee; Simpco; CCTech; PAR Texas; and PAR Oklahoma. 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 (Railroad Commission District 7B & 7C) and in north Texas (Railroad Commission District 9). PAR Texas' environmental remediation and salvage business involved the plugging of oil wells and the remediation and clean-up of oil fields in accordance with government rules and regulations applicable to the environment, and the salvage or purchase for resale on the secondary market of construction materials, pipe, steel tubulars and used and reconditioned oil field equipment. To the extent practicable, PAR Texas performed its services, including testing, threading and reworking of steel pipe recovered from the field, at the oil field salvage yards leased by the Company in Ballinger and Olney, Texas. 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 which are operators of oil wells and fields requiring PAR Texas's plugging, remediation and/or salvage services. The company's operations were limited to the north central and central west regions of Texas. Since the commencement of active plugging business operations by PAR Texas in April 1999, through June 30, 2000 the company's plugging activities (approximately 131 wells) have generated gross revenues from services approximating $391,470. In addition, aggregate gross revenues approximating $113,892 generated during the period from the date of the company's inception in October 1998 through March 2000, were attributable to resales by the company of used and reconditioned oil field equipment purchased for resale.

Since March 2000, PAR Texas' active well plugging and pipe sales operations in Texas have been suspended. All personnel of the Ballinger, Texas, yard have been dismissed for cause and the yard is no longer rented. Other than storage of equipment at three locations, there is no 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. Since March of 2000, PAR Texas has maintained operations of the Olney yard with a skeleton crew, there only to maintain legal integrity of lease space and to protect company assets. A large amount 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 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 scope of the overall EPA project could span more than five (5) years, and include the plugging of more than six thousand (6,000) shallow oil wells in the project area. With the scope consciously in mind, 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 wel ls for a period in excess of ninety (90) days.

PAR Oklahoma desired to expand its customer base to include private and publicly-held oil and/or gas companies which are operators of oil wells and fields requiring PAR Oklahoma's plugging, remediation and/or salvage services, throughout the state of Oklahoma. The company's operations were limited to the northeast region of Oklahoma. Since the commencement of business operations by PAR Oklahoma in November, 1999, and the award of the first phase of the EPA project in January 2000, the company's activities included the plugging of all eighty-one wells, and earned $72,900 on the first awarded contract.

Since the end of June 2000, the Company's well plugging operations in Oklahoma have been 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 continued suspension of active operations of PAR Texas and PAR Oklahoma 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 and the proposed Nowata, Oklahoma, 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. There can be no assurance if, or as to when, operations will resume.

The Company has 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 has used its operations and experience from its initial entry into the field to develop what Company management believes is 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 Texas and PAR Oklahoma for the past two years has exceeded Company management's expectations and capital budgets, and though there is 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 mid-management. 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 two year's operations have established a physical and potential base of operations in both north Texas and northeast Oklahoma that will potentially allow PAR Texas and PAR Oklahoma to generate significant revenue in the pipe threading / testing industry and in the environmental remediation business. This revenue figure assumes successfully meeting the expansion funding requirements and operations are re-ins tituted as planned by Company management.

With regard to the subsidiaries (collectively P & A Remediation and Simpco), 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 net sales or revenues or income from continuing suspended plugging and remediation operations. There are no unforeseen significant ele- ments of income or loss that may arise from the Company's continuing suspended operations. Any material changes from period to period in one or more line items of the our financial statements could be caused only by an unforeseen outcome to settlement with the former owners of Simpco. There are no seasonal aspects that may have a material effect on the financial condition or results of suspen ded operations.

There has been no 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 Company's asset. Other than other historical industry and public information, Company management is not a ware 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 result 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 dril ling 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 has made the decision to increase the payroll burden on operations by providing for the payment of executive salaries of the Honolulu office. This increase in operating expenses has kept revenue from operations at a relatively flat growth curve. The development of a nationwide marketing plan of a 'business to business' division, and the expansion of the current operations to include statewide operations and expanded broadband c apabilities 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 reorganize 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 un-served 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.

PART II - OTHER INFORMATION

Item 1. 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 judgments against the Company or its subsidiaries except as described below.

PAR Texas with current trade accounts payable of approximately $101,000 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.

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 restrict- ed 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 Comp- any authorized stock options exercisable at $.10 per share, totaling 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 $.10 per share, totaling 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 $.10 per share, totaling 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 $.10 per share, totaling 75,000 shares, per year, as consideration for the services of Richard C. Smith acting as Chief Financial Office r of the Company. For the year ending June 30, 2002, the Company authorized stock options exercisable at $.10 per share proportionate to the amount of time served in office, totaling 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.

(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 $.10 per share proportionate to the amount of time served in office, totaling 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.

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

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 items submitted to a Vote of Security Holders during the reporting period.

Item 5. Other Information.

As of September 30, 2001, according to the register of Corporate Stock Transfer, our Transfer Agent, supplemented with the quarter's stock issuances, we had approximately 172 shareholders of record of our 7,867,055 outstanding shares of common stock.

(a) On September 6, 2000, the Board of Directors authorized the corporation to initiate discussions with Sierra Brokerage Services, Inc., of Columbus, Ohio, to enlist their sponsorship of the Company's application to list and trade its common stock on trading mechanisms of NASD. Such application was made and approved for listing on the OTC Bulletin Board by NASD staff on March 23, 2001. Our common stock commenced trading on the electronic Bulletin Board under the symbol BTEC on March 26, 2001. Under NASD rules, there were no high and low closing bid quotations in the over-the-counter market for the common stock, as reported by the single sponsoring market maker during the period from March 23 through the first 30 days. Quotations would represent inter-dealer quotations, without adjustment for retail markups, mark-downs or commissions, and may not necessarily represent actual transactions. The Company has made no public announcements regarding the availability of its common stock in public markets.

(b) On September 20, 2000, the Company executed a contract with Neil Rand d/b/a Corporate Imaging, 5800 West Glenn Drive, Suite 250, Glendale, Arizona 85301, to be provided business management, public and investor relations and other related corporate advisory services. As compensation for his services, Neil Rand was to receive an initial payment of fifty thousand (50,000) shares of common stock in the Company, and a monthly payment of five thousand (5,000) shares for his services. The monthly payment of shares were to start upon NASD approval of the listing of the Company's stock on a NASD venue. The Company voided the contract based upon non-performance and misrepresentations on the part of Neil Rand. Demand for the return of the securities has been made with no response from Neil Rand.

(c) On May 24, 2001, the Company signed a memorandum of understanding to set forth the terms of the acquisition of two corporations in the business as a local internet service provider in the state of Hawaii, collectively doing business as Inter-Pacific Network Services. This understanding was agreed to be unpublicized and subject to the Company being able to secure financing sufficient to acquire and pro- vide operating capital for its combined internet operations. The Company is currently negotiating the terms of financing the business acquisitions.

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

There were no reports of Form 8-K filed during the fiscal year covered by this filing.

There are no exhibits submitted with the filing of this Form 10QSB.

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.

BASIC TECHNOLOGIES, INC.
(Registrant)

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Date July 29, 2002                                                        By: /S/ GARY L. BROWN                                      
                                                                        Gary L. Brown,President

                                                                                          By: /S/ BRYAN L. WALKER                                
                                                                                                 Bryan L. Walker, Former President
                                                                                                 during period of report
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