Future Educational Systems 10QSB 2002 Q1 Quarterly report (small business)

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-QSB

(Mark One)
x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2002 OR
o	TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION FROM _______ TO ________.

COMMISSION FILE NUMBER000-33365

FUTURE EDUCATIONAL SYSTEMS, INC.(Name of Small Business Issuer in its charter)

Nevada (State or other jurisdiction of incorporation or organization)	95-4871102 (I.R.S. Employer Identification No.)
1801 Avenue of the Stars, 6th Floor #6079 Los Angeles, California (Address of principal executive offices)	90067 (Zip code)
Registrant's telephone number: (310) 284-5992
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.      Yesx     Noo

State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date:
	On March 31, 2002, there were outstanding 39,893,339 shares of the Registrant's common stock, $0.01 par value.
Transitional Small Business Disclosure Format:      Yeso    Nox

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- TABLE OF CONTENTS -

PART I. FINANCIAL INFORMATION
	ITEM 1. FINANCIAL STATEMENTS
		INDEPENDENT AUDITORS' REPORT CONSOLIDATED BALANCE SHEETS CONSOLIDATED STATEMENTS OF OPERATIONS CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY CONSOLIDATED STATEMENTS OF CASH FLOWS NOTES TO CONSOLIDATED FINANCIAL STATEMENTS SCHEDULE OF GENERAL, ADMINISTRATIVE & DEVELOPMENT EXPENSES
	ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
PART II -- OTHER INFORMATION
	ITEM 1. LEGAL PROCEEDINGS ITEM 2. CHANGES IN THE RIGHTS OF THE COMPANY'S SECURITY HOLDERS ITEM 3. DEFAULTS UPON SENIOR SECURITIES ITEM 4. SUBMISSION OF MATTERS TO VOTE BY SECURITY HOLDERS ITEM 5. OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
SIGNATURES

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PART I

FINANCIAL INFORMATION

Item 1. Financial Statements

FUTURE EDUCATIONAL SYSTEMS, INC. (Formerly Island Resources, Inc.) AND SUBSIDIARIES
(Development Stage Companies)
CONSOLIDATED FINANCIAL STATEMENTS AND
SUPPLEMENTARY INFORMATION
March 31, 2002
(Unaudited)

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FUTURE EDUCATIONAL SYSTEMS, INC. (Formerly Island Resources, Inc.) AND SUBSIDIARIES
(Development Stage Companies)
CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2002
(Unaudited)

TABLE OF CONTENTS

		PAGE(S)
INDEPENDENT ACCOUNTANTS' REVIEW REPORT		1
CONSOLIDATED FINANCIAL STATEMENTS
	Balance Sheets	2
	Statements of Operations	3
	Statement of Changes in Stockholders' Deficit	4
	Statements of Cash Flows	5
	Notes to Financial Statements	6 - 14
SUPPLEMENTARY INFORMATION
	Consolidated Schedules of General, Administrative and Development Expenses	15

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JOSEFINA C. DE LA CRUZ, C.P.A.
A Professional Corporation

Josefina C. de la Cruz, CPA Rebecca Q. Masinsin, CPA Tomothy Vo, CPA Marissa B. Zacarias, Operations Manager	2700 N Main Street, Suite 900 Santa Ana, CA 92705 Tel. No. (714) 558-8703 Fax No. (714) 558-7940
INDEPENDENT ACCOUNTANTS' REVIEW REPORT To the Board of Directors Future Educational Systems, Inc. (formerly Island Resources, Inc.) and Subsidiaries Los Angeles, California We have reviewed the accompanying consolidated balance sheet of Future Educational Systems, Inc. (formerly Island Resources, Inc.) and Subsidiaries (Development Stage Companies) as of March 31, 2002, and the related consolidated statements of operations, changes in stockholders' deficit and cash flows for the three months then ended, in accordance with Statements on Standards for Accounting and Review Services issued by the American Institute of Certified Public Accountants. All information included in these consolidated financial statements is the representation of the management of Future Educational Systems, Inc. (formerly Island Resources, Inc.) and Subsidiaries. A review consists principally of inquiries of Company personnel and analytical procedures applied to financial data. It is substantially less in scope than an audit in accordance with auditing standards generally accepted in the United States of America, the objective of which is the expression of an opinion regarding the consolidated financial statements taken as a whole. Accordingly, we do not express such an opinion. Based on our review, we are not aware of any material modifications that should be made to the accompanying consolidated financial statements in order for them to be in conformity with accounting principles generally accepted in the United States of America. The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern. As discussed in Note 10 to the consolidated financial statements, the Company has no established source of revenue, suffered recurring losses from operations and has a net capital deficiency. These raise substantial doubts about its ability to continue as a going concern. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. Josefina C. de la Cruz, CPA A Professional Corporation Santa Ana, California May 14, 2002
MEMBER - AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS SEC PRACTICE GROUP CALIFORNIA SOCIETY OF CERTIFIED PUBLIC ACCOUNTANTS TAX PRACTICE GROUP

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FUTURE EDUCATIONAL SYSTEMS, INC. (Formerly Island Resources, Inc.) AND SUBSIDIARIES
(Development Stage Companies)
CONSOLIDATED BALANCE SHEETS

		March 31,		December 31,
		2002		2001
		(Unaudited)		(Audited)
ASSETS
CURRENT ASSETS
	Cash and cash equivalents	$	617	$	14,851
	Accounts receivable	3,198		3,198
	Other receivables	19,243		15,835
	Total current assets	23,058		33,884
PROPERTY & EQUIPMENT, net (Note 3)		59,325		63,751
OTHER ASSETS
	Deposits	12,086		12,086
	Patents, licenses & trademarks, net (Note 4)	14,300		15,600
	Total other assets	26,386		27,686
TOTAL ASSETS		$	108,769	$	125,321
LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES
	Accounts payable	$	132,892	$	128,642
	Accrued expenses	55,183		54,720
	Income taxes payable	5,000		5,000
	Capital lease payable, current portion	3,861		4,890
	Notes payable (Note 5)	238,146		134,809
	Total current liabilities	435,082		328,061
MINORITY INTEREST (Note 6)		-		-
STOCKHOLDERS' DEFICIT (Note 7)
	Common Stock, $0.01 par value per share,       50,000,000 shares authorized; 39,893,339       shares issued and outstanding	398,933		398,933
	Paid-in Capital	1,287,676		1,287,676
	Accumulated deficit during development stage	(2,012,922)		(1,889,349)
	Total stockholders' equity (deficit)	(326,313)		(202,740)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT		$	108,769	$	125,321

See accompanying notes and independent accountants' review report.

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FUTURE EDUCATIONAL SYSTEMS, INC. (Formerly Island Resources, Inc.) AND SUBSIDIARIES
(Development Stage Companies)
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)

		Cumulative from July 23, 1996 (Date of Corporate Revival) to March 31, 2002
				For the three months ended
				March 31, 2002		March 31, 2001
Revenue
	Sales	$	106,972	$	3,802	$	17,602
	Cost of sales	(28,855)		-		4,361
Gross profit		78,117		3,802		13,241
Operating expenses
	General, administrative and development expenses	2,013,354		118,708		146,358
	Depreciation and amortization	55,043		5,726		5,905
	Total operating expenses	2,068,397		124,434		152,263
Net operating loss		(1,990,280)		(120,632)		(139,022)
Other income (expense)
	Interest income	1,998		-		4,004
	Interest expense	(29,640)		(2,941)		(3,105)
Net loss before minority interest		(2,017,922)		(123,573)		(138,123)
Minority interest's share of net loss		5,000		-		-
Net loss for the period		$	(2,012,922)	$	(123,573)	$	(138,123)
Basic earnings per share
	Net loss per common share			$	(0.00)	$	(0.00)
	Weighted average shares outstanding			39,893,339		30,580,605

See accompanying notes and independent accountants' review report

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FUTURE EDUCATIONAL SYSTEMS, INC. (Formerly Island Resources, Inc.) AND SUBSIDIARIES
(Development Stage Companies)
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
For the Period July 23, 1996 (Date of Corporate Revival) to March 31, 2002

					Total
	Common Stock		Paid-in	Accumulated	Stockholders'
	Shares	Amount	Capital	Deficit	Equity (Deficit)
Balances, July 23, 1996 (Date of
Corporate Revival)	19,000,000	$190,000	$565,336	$(754,336)	$1,000
Net loss for the year ended December 31, 1996	-	-	-	(5,200)	(5,200)
Balances, December 31, 1996	19,000,000	190,000	565,336	(759,536)	(4,200)
Net loss for the year ended December 31, 1997	-	-	-	-	-
Balances, December 31, 1997	19,000,000	190,000	565,336	(759,536)	(4,200)
Net loss for the year ended December 31, 1998	-	-	-	(35,917)	(35,917)
Balances, December 31, 1998	19,000,000	190,000	565,336	(795,453)	(40,117)
Net loss for the year ended December 31, 1999	-	-	-	(100,185)	(100,185)
Balances, December 31, 1999	19,000,000	190,000	565,336	(895,638)	(140,302)
Retroactively stated to reflect 1 to 500
reverse stock split (rounded to
nearest fractional shares) on April 3, 2000	(18,961,293)	(189,613)	189,613	-	-
	38,707	387	754,949	(895,638)	(140,302)
Retroactively stated to reflect 1 to 15
forward stock split on September 22, 2000	541,898	5,419	(5,419)	-	-
Issuance of 30 million shares of stock in
exchange for 15 million shares of stock
of Your Future Holdings, Inc. on
December 22, 2000	30,000,000	300,000	(300,000)	-	-
Net loss for the year ended December 31, 2000	-	-	-	(259,620)	(259,620)
Balances, December 31, 2000	30,580,605	305,806	449,530	(1,155,258)	(399,922)
Issuance of 6 milliion shares of stock @$0.10 for
$600,000 in exchange for debt cancellation
on July 27, 2001	6,000,000	60,000	540,000	-	600,000
Issuance of 2,610,890 shares of stock @ $0.10
for $261,089 in exchange for debt cancellation
on September 28, 2001	2,610,890	26,109	234,980	-	261,089
Issuance of 701,844 shares of stock @ $0.10
per share on December 31,2001	701,844	7,018	63,166	-	70,184
Net Loss for the year ended December 31, 2001	-	-	-	(734,091)	(734,091)
Balances, December 31, 2001	39,893,339	398,933	1,287,676	(1,889,349)	(202,740)
Net Loss for the three months ended
March 31, 2002 (unaudited)	-	-	-	(123,573)	(123,573)
Balances, March 31, 2002	39,893,339	$398,933	$1,287,676	$(2,012,922)	$(326,313)

See accompanying notes and independent accountants' review report.

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FUTURE EDUCATIONAL SYSTEMS, INC. (Formerly Island Resources, Inc.) AND SUBSIDIARIES
(Development Stage Companies)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

	Cumulative from July 23, 1996 (Date of Corporate Revival) to March 31, 2002		For the three months ended
			March 31, 2002		March 31, 2001
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(2,012,922)	$	(123,573)	$	(105,502)
Adjustment to reconcile net loss to net cash used
in operating activities
Depreciation and amortization	55,165		5,726		5,905
Minority interest in net loss of subsidiaries	(5,000)		-		(32,621)
Increase in:
Accounts receivable	(19,032)		-		(8,700)
Other assets	(41,495)		(3,408)		-
Increase (decrease) in:
Accounts payable	111,552		4,250		(4,900)
Accrued liabilities	60,182		463		3,738
NET CASH USED IN OPERATING ACTIVITIES	(1,851,550)		(116,542)		(142,080)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property and equipment	(101,148)				-
Purchase of software license	(26,000)		-		(77)
NET CASH USED IN INVESTING ACTIVITIES	(127,148)		-		(77)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of common stock	75,184		-		-
Proceeds from notes payable	1,895,270		103,337		214,462
Proceeds from (payments of) capital lease	3,861		(1,029)		(2,482)
NET CASH PROVIDED BY FINANCING ACTIVITIES	1,974,315		102,308		211,980
NET INCREASE (DECREASE) IN CASH	(4,383)		(14,234)		69,823
CASH AT BEGINNING OF PERIOD	5,000		14,851		9,097
CASH AT END OF PERIOD	$	617	$	617	$	78,920

See accompanying notes and independent accountants' review report.

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FUTURE EDUCATIONAL SYSTEMS, INC. (Formerly Island Resources, Inc.) AND SUBSIDIARIES
(Development Stage Companies)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2002
(Unaudited)

NOTE 1 - HISTORY AND ORGANIZATION OF THE COMPANY
	The accompanying consolidated financial statements include the accounts of Future Educational Systems, Inc. ("FESI"), formerly known as Island Resources, Inc., and its Subsidiaries, Learning Program, Inc. ("LPI") formerly Your Future Holdings, Inc. and Your Future, Inc. ("YFI") collectively referred to as "the Company". LPI is a 100% owned subsidiary and YFI is a 70% subsidiary of LPI. FESI has been in the development stage since inception, and has no history of operations and revenue. Future Educational Systems, Inc. was originally incorporated as Programmed Bookkeeping Systems, Inc. ("PBSI") on September 18, 1968 under the laws of the State of New York. PBSI was changed to Island Resources, Inc. ("ISI") effective December 6, 1983. The ISI's corporate charter was voided on September 25, 1991 for non-payment of state taxes. The corporate charter was revived by re-incorporation effective July 23, 1996. FESI has been a dormant corporation for several years until it was revived in 1996. On November 20, 2000, Island Resources, Inc., New York (New York ISI) merged with Island Resources, Inc. in Nevada (Nevada ISI). Nevada ISI was incorporated on July 19, 2000 and became the surviving company on November 20, 2000, the effective date of the merger. The company's name was then changed from Island Resources Inc. to Future Educational Systems, Inc. Your Future Holdings, Inc. (now Learning Programs, Inc.) was incorporated on January 24, 2000 under the laws of the State of Nevada. The name change became effective on December 18, 2001 upon amendment of its articles of incorporation. Other than the issuance of stocks to its original shareholders and acquisition of 70% of Your Future, Inc., a development stage company, Learning Programs, Inc. has no operations and revenues as of March 31, 2002. Your Future, Inc. (YFI) was organized under the laws of the State of South Carolina on June 4, 1997 and conducts business from its headquarters in North Charleston, South Carolina. YFI is the only company that has operations. Your Future Inc., markets training products and services to individuals which are focused on enhancing personal development, job performance, career shifts, and entry into the workforce. Emphasis is on Life Skills and Basic Skills, Computer Applications, Computer Programming, Software and Hardware Certification. YFI also provides ancillary products and services to corporate clients in the areas of Custom Interactive CDROM; Safety, Health and Compliance including Behavioral Based Loss Control; Videography, and Foreign Language Products. YFI does not have sufficient source of revenue to cover its operating expenses and therefore as of report date, YFI is still classified as a development stage company.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
	Consolidation Policy
		The company has adopted the provisions of Accounting Research Bulletin No. 51 (ARB 51), "Consolidated Financial Statements," as amended by Statement of Financial Accounting Standard No. 94 (SFAS 94), "Consolidation of All Majority-Owned Subsidiaries" for its consolidation guidelines whereby a parent company that has a controlling financial interest represented by direct or indirect ownership of more than 50% voting interest be consolidated, except those in which (a) control of the subsidiary is temporary or (b) significant doubt exists regarding the parent's ability to control the subsidiary.

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FUTURE EDUCATIONAL SYSTEMS, INC. (Formerly Island Resources, Inc.) AND SUBSIDIARIES
(Development Stage Companies)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2002
(Unaudited)

	The consolidated financial statements include the accounts of the Company. All significant intercompany accounts and transactions have been eliminated in consolidation. Investments in unconsolidated affiliates are accounted for using the equity method when the Company owns at least 20% but no more than 50% of such affiliates. Under the equity method, the Company records its proportionate share of profits and losses based on its percentage interest in earnings of companies 50% or less owned.
Use of Estimates
	The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.
Cash and Cash Equivalents
	The Company considers all highly liquid investments with maturity of three months or less to be cash equivalents for purpose of reporting cash flows.
Property and equipment
	Property and equipment are recorded at cost. Maintenance and repairs are charged to expense as incurred; major renewals and betterments are capitalized. Depreciation is calculated on a straight-line basis over the estimated useful lives of the respective assets, as follows:
			Years
		Building and improvements	32
		Furniture and equipment	5 - 7
		Transportation and equipment	5 - 18
		Software	3
	Leasehold improvements are amortized over their estimated useful lives or the lives of the related leases, whichever is shorter.

Intangible Assets
	Intangible assets consist of patent licenses and trademarks, and un-amortized loan fees. Intangible assets are amortized on the straight-line basis over their estimated useful lives or contractual lives as follows:
		Trademark	10 years
		Patent	10 years
		Licenses	5 years

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FUTURE EDUCATIONAL SYSTEMS, INC. (Formerly Island Resources, Inc.) AND SUBSIDIARIES
(Development Stage Companies)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2002
(Unaudited)

Year End
	FESI and its Subsidiaries have selected December 31 as their year-end.

Income Taxes

Income taxes are provided for using the liability method of accounting in accordance with Statement of Financial Accounting Standards No. 109 (SFAS 109), "Accounting for Income Taxes". A deferred tax asset or liability is recorded for all temporary differences between financial and tax reporting. Deferred tax expense (benefit) results from the net change during the year of deferred tax assets and liabilities.

Research and Development Costs

All research and development (R&D) costs are expensed in the period incurred in accordance with Statement of Financial Accounting Standards No. 2 (SFAS 2). Additionally, assets used in R&D activity, such as equipment, facilities, and patents that have alternative future uses in other R&D activities or otherwise are capitalized. Depreciation and amortization on such capitalized R&D-related assets is charged to R&D expense. All expenditures in conjunction with an R&D project, including personnel costs, materials, equipment, facilities, and intangibles, for which the Company has no alternative future use beyond the specific project for which the items were purchased, are expensed. Indirect costs, including general and administrative expenses, which are directly related to the R&D project, are also expense when incurred.

Reporting on Costs of Start-Up Activities
	Statement of Position 98-5 (SOP 98-5), "Reporting on the Costs of Start-Up Activities" provides guidance on the financial reporting of start-up costs and organization costs. It requires most costs of start-up activities and organization costs to be expended as incurred. With the adoption of SOP 98-5, there has been little or no effect on the company's financial statements.

Derivative Instruments

Statements of Financial Accounting Standards No. 133 (SFAS 133), "Accounting for Derivative Instruments and Hedging Activities" is effective for financial statements for all fiscal quarters of all fiscal years beginning after June 15, 2000. SFAS 133 standardizes the accounting for derivative instruments, including certain derivative instruments embedded in other contracts, by requiring that an entity recognize those items as assets or liabilities in the statement of financial position and measure them at fair value. SFAS 133 also addresses the accounting for certain hedging activities. The Company currently does not have any derivative instrument nor is it engaged in hedging activities, thus the company does not believe implementation of SFAS 133 will have a material impact on its financial statement presentation or disclosures.

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FUTURE EDUCATIONAL SYSTEMS, INC. (Formerly Island Resources, Inc.) AND SUBSIDIARIES
(Development Stage Companies)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2002
(Unaudited)

Stock-based Compensation

Statement of Financial Accounting Standards No. 123 (SFAS 123), "Accounting for Stock-Based Compensation" allows companies to choose whether to account for employee stock-based compensation on a fair value method, or to account for such compensation under the intrinsic value method prescribed in Accounting Principles Board Opinion No. 25, (APB 25), "Accounting for Stock Issued to Employees". The Company has chosen to account for employee stock-based compensation using APB 25.

Comprehensive Income

The Company adopted Statement of Financial Accounting Standards No. 130 (SFAS 130), "Reporting Comprehensive Income." On January 1, 1998. SFAS 130 establishes standards for the reporting and display of comprehensive income, its components and accumulated balances in a full set of general-purpose financial statements. SFAS 130 defines comprehensive income to include all changes in equity except those resulting from investments by owners and distributions to owners. Among other disclosures, SFAS 130 requires that all items that are required to be recognized under current accounting standards as components of comprehensive income be reported in a financial statement that is presented with the same prominence as other financial statements.

Earnings Per Share
	Basic earnings per share amounts are calculated using the weighted average number of shares of common stock outstanding during the period. Diluted earnings per share assumes the conversion, exercise or issuance of all potential common stock instruments such as options, warrants, and convertible securities, unless the effect is to reduce a loss or increase earnings per shares.

Advertising Costs
	Advertising costs are charged to operations when incurred.

Segment Reporting
	The company adopted Statement of Financial Accounting Standards No. 131 (SFAS 131), "Disclosures about Segments of an Enterprise and Related Information" on January 1, 1998. The Company's results of operations and financial position were not affected by implementation of SFAS 131 as it operates in only one segment.

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FUTURE EDUCATIONAL SYSTEMS, INC. (Formerly Island Resources, Inc.) AND SUBSIDIARIES
(Development Stage Companies)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2002
(Unaudited)

NOTE 3 - PROPERTY AND EQUIPMENT, NET
	Property and equipment consists of the following:
			March 31, 2002		December 31, 2001
		Computer	$	50,361	$	50,361
		Office Equipment	31,713		31,713
		Classroom Furniture	19,074		19,074
			101,148		101,148
		Accumulated depreciation	(41,823)		(37,397)
		Property and equipment, net	$	59,325	$	63,751
	Depreciation expense for the three months ended March 31, 2002 and for the year ended December 31, 2001 amounted to $4,426 and $18,414, respectively.

NOTE 4 - PATENT, LICENSES, AND TRADEMARKS
	YFI has obtained a license agreement as an authorized learning center for PACE Learning Systems, Inc. at a cost of $26,000, which is amortized for five (5) years.
			March 31, 2002		December 31, 2001
		License Fee	$	26,000	$	26,000
		Accumulated amortization	(11,700)		(10,400)
		License Fee, net	$	14,300	$	15,600
	Amortization expense for three months ended March 31, 2002 and for the year ended December 31, 2001 amounted to $1,300 and $5,200, respectively.

NOTE 5 - NOTES PAYABLE
	Investors have advanced funds to FESI. These notes are non-interest bearing and payable on demand for $13,900. The notes payable under YFI are payable on demand to shareholders at 9% annual interest. Accrued interest at March 31, 2002 is $2,941.

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FUTURE EDUCATIONAL SYSTEMS, INC. (Formerly Island Resources, Inc.) AND SUBSIDIARIES
(Development Stage Companies)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2002
(Unaudited)

	At March 31, 2002, notes payable by the Company are:
			FESI		LPI		YFI		TOTAL
Notes payable to investors			$	42,722	$	64,707	$	-	$	107,429
Notes payble to officers			-		-		130,717		130,717
		Total	$	42,722	$	64,707	$	130,717	$	238,146

NOTE 6 - MINORITY INTEREST
	On March 28, 2000, a stock agreement with conditional promissory note was entered between LPI and YFI. LPI acquired approximately 70% of YFI's total issued and outstanding shares consisting of eight million seven hundred fifty thousand (8,750,000) shares for one million dollars ($1,000,000). The business combination was accounted for under a pooling of interest. Under the pooling of interest method, the historical costs of the separate companies' assets and liabilities are combined and became the recorded amounts of the company's assets and liabilities. The combining companies' stockholders' equity accounts are also combined. Terms and conditions of the agreement are:
		Initial payment was three hundred twenty thousand dollars ($320,000),the balance of six hundred eighty thousand ($680,000) is payable in installments as set forth in the agreement starting January 31, 2001 until November 30, 2001. The obligation is represented by a non-interest bearing promissory note, the full payment of which was due November 30, 2001. Negotiations are in process for the extension and revision of the stock purchase agreement. At March 31, 2002, the balance of the conditional note receivable by YFI is $183,159. Other than the minority interest below, all the inter-company accounts, including this promissory note, have been eliminated.
	Minority interests in YFI consist of 30% of its issued and outstanding common shares. At March 31, 2002, minority interests consist of:

	March 31, 2002		December 31, 2001
Common Stock, no par value	$	5,000	$	5,000
Accumulated Deficit	(5,000)		(5,000)
	$	-	$	-

The majority interest absorbed the entire accumulated deficit attributed to the minority interest in excess of the balance of the capital stock pursuant to Accounting Research Bulletin No. 51 (ARB 51), paragraph 15. If future earnings will materialize, the majority interest will be credited to the extent of such losses previously absorbed.

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FUTURE EDUCATIONAL SYSTEMS, INC. (Formerly Island Resources, Inc.) AND SUBSIDIARIES
(Development Stage Companies)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2002
(Unaudited)

NOTE 7 - STOCKHOLDERS' DEFICIT
	The authorized common stock of Future Educational Systems, Inc. consists of 50,000,000 shares with $0.01 par value per share. From July 23, 1996, (date of corporate revival) to December 31, 1999, there were 19,000,000 shares issued and outstanding. On April 3, 2000, the issued and outstanding shares were retroactively restated to reflect a 1:500 reverse stock split as of April 3, 2000. After the reverse stock split, total shares outstanding as restated are 38,707 shares. On September 22, 2000, a 1 to 15 forward stock split was effected on the issued and outstanding shares of 38,807 shares resulting to a restated number of shares of 580,605. On December 22, 2000, Future Educational Systems, Inc. entered into a stock exchange agreement with Learning Programs, Inc. (LPI, formerly Your Future Holdings, Inc.). Under the agreement, FESI exchanged 30,000,000 of its common shares for 15,000,000 of LPI's common shares, representing 100% of LPI's issued and outstanding shares. On July 27, 2001, a stock purchase agreement was entered between Future Educational Systems, Inc. and Asean Commercial Holdings, Ltd. whereby FESI issued 6,000,000 shares of its common stock to Asean Commercial Holdings, Ltd. in exchange for $600,000 cancellation of debt. On September 28, 2001, 2,610,890 common shares were issued for $261,089 representing cancellation of note payable to Ridgeway Commercial Ventures, Limited. On December 31, 2001 a stock purchase agreement was entered between Future Educational Systems, Inc. and Clayport Investment Limited whereby FESI issued 701,844 shares of its common stock in exchange for cancellation of debt amounting to $70,184. At March 31, 2002, total common shares issued and outstanding is 39,893,339 shares which are designated as follows:
		Regular shares	30,508,020
		Restricted shares	9,385,319
		Total	39,893,339

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FUTURE EDUCATIONAL SYSTEMS, INC. (Formerly Island Resources, Inc.) AND SUBSIDIARIES
(Development Stage Companies)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2002

NOTE 8 - INCOME TAXES
	There is no provision for federal and state income taxes for the three months ended March 31, 2002 due to the net loss sustained during the period. The Company currently has no issues that create timing differences that would mandate deferred tax expense. Net operating losses would create possible tax assets in future years. Due to the uncertainty as to the utilization of net operating loss carry-forwards, a valuation allowance has been made to the extent of any tax benefit that net operating losses may generate. The Company's total deferred tax asset as of March 31, 2002 is as follows:
		Estimated Net Operating Loss Carry Forward	$	2,017,922
		Estimated Current Tax Asset Value of Net Operating Loss Carry      Forwards at Current Prevailing Federal Tax Rate	$	302,700
		Valuation Allowance	(302,700)
		Net Deferred Tax Asset	$	-
		Current Income Tax Expense	$	-
		Deferred Income Tax Benefit	$	-

NOTE 9 - COMMITMENTS
	On August 1, 2000, Your Future, Inc. entered into a lease agreement to lease office and training facility under a five-year lease agreement, expiring on July 31, 2005. Future minimum rental payments are as follows:
		Year Ending December 31	Lease Commitments
		2002	$	78,485
		2003	108,255
		2004	108,255
		2005	63,149
	YFI's rent expense for the three months ended March 31, 2002 and March 31, 2001 amounted to $18,787 and $2,500, respectively.

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FUTURE EDUCATIONAL SYSTEMS, INC. (Formerly Island Resources, Inc.) AND SUBSIDIARIES
(Development Stage Companies)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2002

NOTE 10 - GOING CONCERN

These financial statements are presented on the basis that the Company is a going concern. Going concern contemplates the realization of assets and the satisfaction of liabilities in the normal course of business over a reasonable length of time. The accompanying balance sheet shows that current liabilities exceed current assets by approximately $412,000 on March 31, 2002. Your Future, Inc. is the only subsidiary that has operations. Although YFI generates revenue from its operations, YFI has continually suffered from financial losses since its inception. YFI has yet to expand its market to generate profit. FESI and LPI do not have established source of revenues sufficient to cover their operating costs and continue as a going concern. Current sources of funds for operating costs of the Company include periodic funding of and advances from its investors. Funding from investors has been set for a specified period. After such period expires, the Company's only source of fund would be advances from its investors.

NOTE 11- CONTINGENCY

In the fourth quarter of 2001, three separate lawsuits were filed against Your Future, Inc. by three (3) shareholders who were formerly employees of YFI. The cases filed were allegations of breach of contract, violation of South Carolina Payment of Wages Act and a suit on promissory note. The aforementioned cases were incident to the company's downsizing cost reduction, and subsequent termination of employment of the three employees. As of report date, the cases are pending and the ultimate outcome of these litigations are unknown at this time.

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FUTURE EDUCATIONAL SYSTEMS, INC. (Formerly Island Resources, Inc.) AND SUBSIDIARIES
(Development Stage Companies)Consolidated Schedules of Development, General and Administrative Expenses
(Unaudited)

	Cumulative from		For the three months ended
	Inception to
	March 31, 2002		March 31, 2002		March 31, 2001
Development expenses	$	511,425	$	-	$	-
Service contract fees	397,640		47,150		28,000
Salaries and wages	316,366		12,834		56,717
Rent	295,008		28,072		29,779
Professional fees	249,248		17,120		11,222
Office expenses	70,939		6,599		7,790
Travel expenses	67,345		435		2,609
Telephone	61,924		2,262		3,400
Taxes and licenses	28,173		1,065		5,319
Bank charges	8,660		992		349
Dues and subscription	3,601		-		273
Insurance	925		79		-
Directors' fees	2,100		2,100		900
	$	2,013,354	$	118,708	$	146,358

See accompanying notes and independent accountants' review report.

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Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

     All statements, trend analysis and other information contained in this Report relative to markets for the products of Future Educational Systems,Inc. ("Company" or "Registrant") and trends in revenues, gross margin and anticipated expense levels, as well as other statements including words such as "believe," "anticipate," "expect," "estimate," "plan" and "intend" and other similar expressions, constitute forward-looking statements. Those forward-looking statements are subject to business and economic risks, and the Company's actual results of operations may differ from those contained in the forward-looking statements. The following discussion of the financial condition and results of operations of the Company should also be read in conjunction with the Financial Statements and Notes related thereto included elsewhere in this report.

     (a) Revenues

     The first quarter ended March 31, 2002 generated $3,802 in sales revenue for the Company, compared to the $17,602 sales revenue for the same period in year 2001.

     The decrease in revenue was primarily attributable to the operating subsidiary, Your Future, Inc. ("YFI"), and was due mainly to limited funds for marketing and expansion.

     (b) General, Administrative and Development Expenses

     The Company incurred general, administrative and development expenses in the amount of $118,708 for the three months ended March 31, 2002, compared to $146,358 for the same period in year 2001.

     For the three months ended March 31, 2002, salaries and wages amounted to $12,834. For the same period in year 2001, salaries and wages amounted to $56,717. The decrease is explained by the reduction in manpower made during mid-2001.

     Service contract fees and professional fees in the total amount of $64,270 comprised approximately 54% of the total general, administrative and development expenses for the three months ended March 31, 2002. For the same period in year 2001, service contract fees and professional fees in the amount of $39,222 comprised approximately 26.8% of general, administrative and development expenses.

     The increase in percentage of service contract and professional fees may be attributed to legal and accounting expenses incurred in order to file its registration statements and to comply with SEC reporting requirements

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     (c) Depreciation and Amortization

     Depreciation and amortization expense amounted to $5,726 during the first quarter of year 2002, and $5,905 during the same period in year 2001.

     (d) Net Loss per Share

     Net loss per common share was at $0 for the three months ended March 31, 2002 and March 31, 2001. The decrease was attributable mainly to additional issuance of common shares by Issuer and decrease in net loss.

     (e) Liquidity

     As of March 31, 2002, the Company had an accumulated deficit during development stage in the amount of $2,012,922.

     The Company is dependent mostly on cash flows from financing activities to fund its operations. Cash flow from operating activities of YFI has been insufficient to meet financial obligations of the Company and its subsidiaries. Proceeds from financing activities for the three months ended March 31, 2002 amounted to $103,337, compared to $214,462 for the same period in year 2001. Notes from investors are converted to common stock of the Company pursuant to the safe harbor provisions of Regulation S promulgated under the Securities Act of 1933.

     YFI is presently wholly dependent on its Georgia WorkForce Investment Act ("WIA") contract and does not have sufficient funding to carry it through the first two months to gain income from allowed invoicing procedures.

     The Company believes that its major investors intend to continue providing advances to fund day-to-day operations of the Company and its subsidiaries. These advances may initially be recorded as note payable obligations of the Company. The payable balances, as in prior years, may be paid off in the form of additional common shares. The dilution to common shareholders is dependent on the issue price and the amount of advances converted into common shares.

PART II.

OTHER INFORMATION

     Item 1 -- Legal Proceedings

     None

     Item 2 -- Changes in the Rights of the Company's Security Holders

     None

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     Item 3 -- Defaults by the Company on its Senior Securities

     None

     Item 4 -- Submission of Matter to Vote of Security Holders

     None

     Item 5 -- Other Information

     None

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

     (a) The Articles of Incorporation and by-laws of the company appear in Form 10SB12G filed November 21, 2001 and Amended Form 10SB12G filed May 6, 2002, and are incorporated herein by reference.

     (b) No reports on Form 8-K were filed during the quarter for which this report is filed.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
Dated: May 20, 2002	Future Educational Systems, Inc.      /SIGNATURE/By: Gilbert Cheang President

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