<Page>

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 10549

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 JUNE 30, 2001

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 (NO FEE REQUIRED)

For the transition period from: not applicable

Commission File No. 0-17927

JANEX INTERNATIONAL, INC.
(Name of small business issuer in its charter)

COLORADO 84-1034251
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)

1609 FOURTH STREET
BERKELEY, CALIFORNIA 07724
(Address of principal executive offices) (Zip Code)

Issuer's telephone number, including area code: (510) 524-7400

Securities registered pursuant to Section 12(b) of the Act: NONE

Securities registered pursuant to Section 12(g) of the Act:

COMMON STOCK, NO PAR VALUE
--------------------------
(TITLE OF CLASS)

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

As of September 9, 2001, the issuer had 18,442,996 shares of its common stock
and 5,000,000 shares of preferred stock issued and outstanding. There are a
substantial number of additional shares committed for issuance. See Part II,
Item 5, Other Information in this Report.

<Page>

JANEX INTERNATIONAL, INC.
TABLE OF CONTENTS

<Table>

PART I
ITEM 1. FINANCIAL STATEMENTS..................................................................................... 3
CONSOLIDATED BALANCE SHEET............................................................................... 3
CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)........................................................ 4
CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)........................................................ 5
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)................................................... 6
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION.....................15
PART II. OTHER INFORMATION........................................................................................20
ITEM 1. LEGAL PROCEEDINGS........................................................................................20
ITEM 3. DEFAULTS UPON SENIOR SECURITIES..........................................................................23
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS......................................................23
ITEM 5. OTHER INFORMATION........................................................................................24
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.........................................................................27
SIGNATURES.........................................................................................................29
</Table>

-2-

JANEX INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET

<Table>
<Caption>
JUNE 30, 2001
(UNAUDITED)
--------------

ASSETS
Current assets:
Cash and cash equivalents ................................ $ 49,266
Accounts receivable, net ................................. 575,269
Inventories, net ......................................... 421,650
Other current assets ..................................... 203,229
------------
Total current assets ......................................... 1,249,414

Property and equipment, net .................................. 290,953
Goodwill, net ................................................ 3,282,701
------------
Total assets ................................................. $ 4,823,068
============
LIABILITIES AND SHAREHOLDERS' DEFICIT
Current liabilities:
Note payable - Shareholder ............................... $ 128,849
Notes payable - Banks ($1,120,000 in default) ............ 1,951,943
Accounts payable ......................................... 2,080,571
Accrued expenses ......................................... 1,400,535
Loans Payable ............................................ 259,809
Due to Related Parties ................................... 463,640
------------
Total current liabilities .................................... 6,285,347

Note payable-Bank, non-current portion ................... 2,831,000
------------
Total liabilities ............................................ 9,116,347

Shareholders' deficit:
Class A convertible preferred stock, no par value:
Authorized shares - 5,000,000
Issued and outstanding shares - 5,000,000 ................ 569,022
Common stock, no par value:
Authorized shares - 20,000,000
Issued and outstanding shares - 19,809,996 ............... 16,668,990
Less: Treasury stock, at cost: 17,330,129 ................ (3,173,433)
Additional paid-in capital ............................... 570,767
Accumulated deficit ...................................... (27,611,351)
------------
(12,976,005)
Common Stock issuable in acquisition.......................... 1,290,000

Due to Related Parties ....................................... 7,322,376

Due to Bank .................................................. 70,350
------------
Total Shareholders' Deficit .................................. (4,293,279)
------------
Total liabilities and shareholders' deficit .................. $ 4,823,068
============
</Table>

See accompanying summary of accounting policies and notes to financial
statements.

-3-

JANEX INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)

<Table>
<Caption>
FOR THE THREE MONTHS FOR THE SIX MONTHS
ENDED JUNE 30, ENDED JUNE 30,
------------------------------ ----------------------------
2000 2001 2000 2001
------------ ------------ ------------ ------------

Sales ....................................... $ 399 $ 1,174,293 2,927 1,796,775
Royalty Income .............................. (10,575) -- (4,617)

Less: Returns and Allowances ............ -- (13,839) -- (17,432)
Discounts - Domestic .............. -- (294,450) -- (326,296)
Discounts - International ......... -- (81,155) -- (139,731)
Freight ........................... -- 27,982 -- 46,591
Miscellaneous Charges ............. -- 812 -- 1,376
------------ ------------ ------------ ------------
Net Sales ................................... (10,176) 813,643 (1,690) 1,361,283

Cost of Sales
Direct .................................. 151 511,050 (279) 783,702
Indirect ................................ -- 142,454 -- 196,345
------------ ------------ ------------ ------------
151 653,504 (279) 980,047

Gross margin ...................... (10,025) 160,139 (1,969) 381,236

Operating Expenses:
Selling, general and
administrative .......................... 415,241 970,580 594,016 1,415,250
Stock based compensation ................ 725,000 203,940 6,795,950 266,440
Depreciation and amortization ........... -- 110,720 10,005 142,874
------------ ------------ ------------ ------------
Loss from operations ........................ (1,150,266) (1,125,101) (7,401,940) (1,443,328)
------------ ------------ ------------ ------------

Other (expense)
Interest (expense) ...................... (11,713) (39,894) (19,111) (66,074)
Other (expense) ......................... -- (10,567) -- (10,567)
------------ ------------ ------------ ------------
Total other income (expense) ................ (11,713) (50,461) (19,111) (76,641)

Net Earnings before R&D ..................... (1,161,979) (1,175,562) (7,421,051) (1,519,969)
R&D Project Expense ..................... -- (53,605) -- (63,478)
------------ ------------ ------------ ------------
Loss before income taxes .................... (1,161,979) (1,229,167) (7,421,051) (1,583,447)
Income tax provision ........................ -- -- (2,000) --
------------ ------------ ------------ ------------
Net Loss .................................... $ (1,161,979) $ (1,229,167) $ (7,423,051) $ (1,583,447)
============ ============ ============ ============

Loss per common share ....................... $ (0.11) $ (0.07) $ (0.52) $ (0.10)
============ ============ ============ ============

Weighted average number of Common
shares outstanding .......................... 10,652,926 17,376,882 14,362,266 16,183,571
============ ============ ============ ============
</Table>

See accompanying summary of accounting policies and notes to financial
statements.

-4-

JANEX INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)

<Table>
<Caption>
FOR THE SIX MONTHS
ENDED JUNE 30,
----------------------
2000 2001
------ ------

Cash flows from operating activities

Net loss ......................................... $(7,423,051) $(1,583,447)
Adjustments to reconcile net income (loss) to net
cash provided by (used in) operating activities:
Depreciation and amortization................ 10,005 142,874
Stock based compensation and services ....... 6,795,950 328,019
Allowance for doubtful accounts and slow
moving inventory............................ -- 7,307
Imputed interest............................. 16,250
Changes in operating assets and liabilities:
Accounts receivable ......................... (25,501) 458,337
Inventories ................................. -- 204,070
Other current assets ........................ (66,021) 9,893
Accounts payable, accrued expenses and other. 469,084 155,699
----------- -----------
NET CASH USED BY OPERATING ACTIVITIES ............ (239,534) (260,998)

Cash flows from investing activities
Paid for DaMert acquisition ................. -- (220,000)
Cash provided by DaMert at acquisition ...... -- 64,861
Paid for Futech acquisition and related
costs ...................................... -- (160,292)
Other ....................................... -- (15,650)
----------- -----------
NET CASH (USED) PROVIDED BY INVESTING ACTIVITIES . -- (331,081)

Cash flows from financing activities
Advances (reductions) from Futech Interactive
Products, Inc. ............................. (5,575)
Payments on borrowings ...................... -- (180,000)
Increase in loans ........................... -- 352,626
Loans from related parties .................. 246,388 463,640
----------- -----------
NET CASH (USED) PROVIDED BY FINANCING ACTIVITIES . 240,813 636,266
----------- -----------
Net change in cash and cash equivalents .......... 1,279 44,187

Cash and cash equivalents, beginning of year ..... 3,920 5,079
----------- -----------
CASH AND CASH EQUIVALENTS, END OF PERIOD ......... $ 5,199 $ 49,266
=========== ===========
</Table>

See accompanying summary of accounting policies and notes to financial
statements.

-5-

JANEX INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

THREE AND SIX MONTHS ENDED JUNE 30, 2001 AND 2000
(UNAUDITED)

1. DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION

Janex International, Inc. and subsidiaries (including DaMert Toys and Games,
Inc. and Interactive Technologies Group, Inc.) (the "Company") are in the
business of developing, marketing, and selling toys and functional children's
products which are manufactured by subcontractors. The Company sells its
products both domestically and internationally.

The consolidated financial statements include the accounts of the Company and
its wholly-owned subsidiaries. All inter-company accounts and transactions have
been eliminated in consolidation. All balance sheet accounts of the Company's
foreign subsidiaries are translated at the current exchange rate, at the balance
sheet date, while income statement items are translated at the average currency
exchange rates for each period presented. The resulting translation adjustments,
if significant (at the periods under review, the adjustment was not
significant), are recorded as comprehensive income.

The financial statements include normal recurring adjustments. Interim
results are not necessarily indicative of the results of operations for the
full fiscal year.

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the amounts reported in the financial statements and accompanying notes.
Actual results could differ from those estimates.

The financial statements have been prepared assuming the Company will continue
as a going concern. The Company has incurred significant operating losses in the
past several years, continuing negative net worth, and negative working capital
at June 30, 2001. The Company has nominal cash and is experiencing a severe
working capital deficiency. Accordingly, management has been unable to devote
resources to the development of products or sales. Currently, the Company does
not have sufficient authorized and unissued shares of common stock to execute
its business and financial plans. The Company expects that the absence of
available shares of common stock will make it substantially more difficult for
it to raise capital, as any transaction involving its common stock will have to
be made subject to an increase in the number of authorized shares of such stock.
As soon as practicable, the Company plans to seek stockholder approval of an
increase in the number of authorized shares of common stock.

The Company has experienced a severe shortage of capital, which has had the
effect of substantially curtailing the Company's operating activities.

On February 15, 2001, the Company completed the acquisition of DaMert Company,
which is focused on the production, marketing and distribution of toys and
gifts. The consolidated statement of operations for the six months ended June
30, 2001 includes the operations of DaMert Toys and Games, Inc. from February
16, 2001 to June 30, 2001. On May 29, 2001, the Company acquired certain assets
and assumed certain liabilities of Futech Interactive Products, Inc., an Arizona
corporation ("Futech"), by virtue of an asset purchase ("Purchase"). Futech had
previously filed for protection from creditors under Chapter 11 of the United
States Bankruptcy Code. The United States Bankruptcy Court handling the Futech
bankruptcy proceeding approved the Company's purchase of certain

-6-

<Page>

Futech assets. The acquired assets of Futech consist of, among other things,
accounts receivable, patented technology and customer lists. The assets
acquired by the Company were used by Futech in connection with its toy
product business, which includes the design, manufacture and distribution of
such products. Those Products include interactive books, toys, games,
educational products and stationary. The Company intends to continue such use
of the assets acquired. The consolidated balance sheet at June 30, 2001
reflects the assets acquired and liabilities assumed.

The Company's ultimate ability to continue as a going concern depends on market
acceptance of products, an increase in revenues, and the achievement of
operating profits and positive cash flow. The Company will also require
additional financial resources from other sources to provide near-term operating
cash to enable the Company to execute its plans to move toward profitability.
Management believes that future financings, the acquisitions described elsewhere
in this Form 10Q-SB and potential additional sales from new product lines that
are being developed, will be sufficient to allow the Company to continue in
operation. The foregoing factors raise significant doubt as to the Company's
ability to continue as a going concern.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

CASH EQUIVALENTS

The Company considers all highly liquid investments with a maturity of three
months or less when purchased to be cash equivalents.

INVENTORIES

Inventories are stated at the lower of cost or market. Cost is determined using
the average cost method.

PROPERTY AND EQUIPMENT

Property and equipment are stated at cost. Depreciation is computed principally
by the straight-line method over the estimated useful lives of the assets which
range from three to ten years for molds, machinery and equipment, and furniture
and fixtures.

FAIR VALUE OF FINANCIAL INSTRUMENTS

At June 30, 2001, the Company has the following financial instruments: cash and
cash equivalents, accounts payable, accrued expenses, and short-term debt. The
carrying value of cash and cash equivalents, accounts payable, and accrued
expenses and short term debt approximates their fair value based on the
liquidity of these financial instruments or based on their short-term nature.

INTANGIBLE ASSETS

Intangible assets consist of goodwill.

Costs of business acquisitions in excess of net asset of subsidiaries acquired
(goodwill) are amortized on a straight-line basis over a ten year period. The
Company records impairment losses on long-lived assets used in operations when
events and circumstances indicate that the assets might be impaired and the

-7-

<Page>

estimated undiscounted cash flows from those assets are less than the carrying
amounts of those assets. This methodology includes intangible assets acquired.
Goodwill relating to specific intangible assets is included in the related
impairment measurements to the extent it is identified with such assets.

Management reviews goodwill periodically for possible impairment. This policy
includes recognizing write-downs if it is probable that measurable undiscounted
future cash flows and/or the aggregate net cash flows of an asset, as measured
by current revenues and costs (exclusive of depreciation) over the asset's
remaining depreciable life, are not sufficient to recover the net book value of
an asset.

In connection with the acquisition of Futech, the Company is evaluating the
patents and technology acquired in order to allocate goodwill to the
intangible assets acquired.

CONCENTRATION OF CREDIT RISK AND MAJOR CUSTOMERS

The Company transacts business on a credit basis with its customers. The Company
routinely assesses the financial strength of its customers and, as a
consequence, believes that its trade accounts receivable credit risk exposure is
limited. The Company does not require collateral to support customer
receivables. The Company maintains an allowance for potential credit losses and
such losses have been within management's expectations.

REVENUE RECOGNITION

The Company recognizes revenue upon shipment of the product to the customer,
with appropriate allowances made for estimated returns and uncollectible
accounts.

INCOME TAXES

Income taxes are accounted for in accordance with Statement of Financial
Accounting Standards (SFAS) 109 "Accounting for Income Taxes." The statement
employs an asset and liability approach for financial accounting and reporting
of deferred income taxes. Generally, SFAS 109 allows for recognition of deferred
tax assets in the current period for the future benefit of net operating loss
carryforwards and items for which expenses have been recognized for financial
statement purposes but will be deductible in future periods. A valuation
allowance is recognized, if the weight of available evidence indicates that it
is more likely than not that some portion or all of the deferred tax assets will
not be realized.

STOCK-BASED COMPENSATION

The company accounts for stock-based employee compensation arrangements in
accordance with provisions of Accounting Principles Board ("APB") Opinion No.
25, "Accounting for Stock Issued to Employees" and complies with the disclosure
provisions of SFAS No. 123, "Accounting for Stock Based Compensation." Under APB
Opinion No. 25, compensation expense for employees is based on the excess, if
any, on the date of grant, of the fair value of the company's stock over the
exercise price.

LOSS PER SHARE

Loss per common share is calculated in accordance with Statement of Financial
Accounting Standards (SFAS) No. 128, "Earnings Per Share," (Statement 128).
Basic earnings per share is computed using the weighted average number of common
shares outstanding. Diluted earnings per common share include the potential
exercise of employee stock options. Common share equivalents have

-8-

<Page>

been excluded from the calculation of loss per share for all periods presented,
as their effect is anti-dilutive.

Shares issuable in replacement of shares surrendered to the Company are not
included in the calculation of loss per share, as inclusion of such shares
would be anti-dilutive.

COMPREHENSIVE LOSS/INCOME

As of January 1, 1998, the Company adopted SFAS No. 130, "Reporting
Comprehensive Income," (Statement 130). Statement 130 establishes new rules for
the reporting and display of comprehensive loss/income and its components. The
components, relative to the company, include the effect of foreign currency
translation. Comprehensive loss for the Company is the same as net loss for all
periods presented as the effect of foreign currency translation is not material.

PENSION PLAN

The Company has a 401K Plan for the benefit of the employees of the Company.
Under the provisions of the 401K, employees may make contributions on a
tax-deferred basis to their 401K accounts, up to the legal limits provided for
by United States income tax regulations. The Company, at its discretion, may
contribute a portion of the Company's profits to the 401K. Such contributions
are allocated between members of the 401K plan based on a pre-stated formula.
Employer contributions vest with 401K participants at the rate of 20% per year,
beginning in year two and ending in year six of employment. The Company did not
make contributions to the 401K for 1999 and 2000, or for the six months ended
June 30, 2001.

NEW ACCOUNTING STANDARDS

The Financial Accounting Standards Board (FASB) issued several pronouncements
and interpretations and the Securities and Exchange Commission (SEC) issued
several Staff Accounting Bulletins (SAB). Certain of these pronouncements may
have future applicability, Statement of Financial Accounting Standards (SFAS)
No. 132 "Employers Disclosures about Pensions and other Postretirement
Benefits," effective June 15, 2000, and No. 137 "Accounting for Derivative
Instruments and Hedging Activities," effective June 15, 2000 would not have
impacted the financial statements as the Company has not participated in
derivative transactions nor does the company have a defined benefit plan.

In December 1999, the SEC issued SAB No. 101 "Revenue Recognition in Financial
Statements". SAB 101 summarizes certain areas of the SEC's views in applying
generally accepted accounting principles to revenue recognition in financial
statements. The Company believes that its current revenue recognition policies
comply with SAB 101.

In March 2000 the FASB issued FASB Interpretation No. 44 "Accounting for Certain
Transactions involving Stock Compensation", and interpretations of Accounting
Principles Board No. 25. This interpretation is effective July 1, 2000. The
effects of applying this interpretation would be recognized on a prospective
basis from July 1, 2000. The impact of this interpretation is not expected to be
material.

In August 1999, the SEC issued SAB No. 99 "Materiality". SAB 99 provides that
exclusive reliance on certain quantitative benchmarks to assess materiality in
preparing financial statements is inappropriate; misstatements are not
immaterial simply because they fall beneath a numerical threshold. Management
believes the company is in compliance with SAB 99.

In 2001, the FASB issued FASB Numbers 141 ("Business Combinations") and 142
("Goodwill and Other Intangible Assets"). The Company is evaluating the
impact of these pronouncements, which become effective in future periods.

-9-

3. NOTES PAYABLE - BANKS

Notes payable banks consist of the following:

<Table>

Acquisition Note (DaMert) $1,120,000
Acquisition Indebtedness (Futech) 3,000,000
Short-term note 331,942
----------
$4,451,942
==========
</Table>

(a) Acquisition Note

The Acquisition Note is payable as follows: $400,000 due May 15, 2001 (in
default) and $712,000 payable in five equal quarterly installments of $116,667
beginning August 15, 2001, and one final quarterly payment of $136,666. The note
is guaranteed by the Chairman and Chief Executive Officer. The payment due
August 15, 2001 ($116,667) has not been paid and is in default.

(b) Acquisition Indebtedness

In connection with completion of the Futech acquisition, the Company became
obligated to repay approximately $3,000,000 of bank indebtedness as follows: (i)
with respect to $1,500,000 of such indebtedness, interest only will be payable
monthly over three years and the principal ($1,500,000) will be payable on the
third anniversary of the closing of the transaction (May 2004); and (ii) with
respect to the remaining $1,500,000 of indebtedness, principal ($1,500,000) and
interest will be payable in thirty-six equal monthly installments commencing on
the closing of the transaction. $2,000,000 of the assumed indebtedness is to be
guaranteed by the Company's Chairman and CEO. This indebtedness will be secured
by certain collateral acquired from Futech. Repayment of principal and interest
on this indebtedness is estimated to cost approximately 75,000 per month, with a
$1,500,000 principal payment due in 2004. The definitive loan agreement is still
under negotiation.

The Short-term note is due October 1, 2001.

4. LITIGATION

See PART II. ITEM 1. LEGAL PROCEEDINGS in this Form 10Q-SB.

5. STOCK OPTIONS AND STOCK BASED COMPENSATION

In March 2000, the Company adopted the 2000 Combination Stock Option Plan and
amended and restated such plan in October, 2000 and June 2001 (the "Plan"). This
Plan is to be made available to employees of the Company and its subsidiaries
and to individuals whose services contribute to the growth and development of
the Company. Options to purchase up to 9,825,000 shares may be issued under the
Plan, and options may be awarded for up to ten (10) years. In each of February
and May 2001, the Company granted Vincent Goett, its chairman, immediately
exercisable options to purchase 1,000,000 shares of common stock at a price of
$.001 per share. The options have since been exercised. In May 2001, the Company
granted a consultant immediately exercisable options to purchase 995,000 shares
of Common Stock at a price of $.02 per share. 975,000 of the options have since
been exercised.

-10-

6. COMMON STOCK

The Company had 100,000 warrants outstanding with an exercise price of $.64 per
share, which expired unexercised on March 26, 2001.

In June 2001, two stockholders surrendered an aggregate 2,000,000 shares of
Company common stock to the Company. One of the stockholders surrendered 500,000
shares of common stock and the other stockholder, Frederick A. DaMert and Gail
Patton DaMert, as trustees of DaMert Trust, surrendered 1,500,000 shares. In
consideration of the surrender of the 2,000,000 shares, in addition to agreeing
to replace the 2,000,000 shares upon an increase to 125,000,000 in the number of
authorized common shares of the Company, the Company agreed to issue an
aggregate 1,250,000 shares to the surrendering stockholders as compensation for
surrendering their shares. Of the 1,250,000 compensation shares, 1,000,000 of
such shares are issuable to Gail Patton DaMert and Frederick A. DaMert, as
trustees of DaMert Trust. Gail Patton DaMert and Frederick A. DaMert are
officers of DaMert Toys and Games, Inc., the Company's wholly-owned subsidiary.
The foregoing stock issuances are all subject to an increase to 125,000,000 in
the number of the Company's authorized common shares.

Because the Company did not have sufficient authorized but unissued shares of
common stock to execute its business and financial plans, in March 2000,
Palmilla Ventures, an affiliate of Vincent Goett (the Company's Chairman),
agreed to surrender to the Company an aggregate of 10 million shares of its
common stock so that such shares could be restored to the status of authorized
but unissued shares of common stock. Of the aggregate 10 million shares
surrendered, 1,159,952 (6.0% of the outstanding common stock prior to surrender)
were being held for the benefit of Dan Lesnick, the then Chief Operating Officer
(now, President) and a Director, 2,182,417 (11.4% of the outstanding common
stock prior to surrender) were being held for the benefit of Mr. and Mrs. Howard
Moore, and 1,657,631 (8.6% of the outstanding common stock prior to surrender)
were being held for the benefit of Mr. Les Friedland, a former President.

Under this Agreement, as soon as possible following an increase to 65,000,000 in
the number of authorized but unissued shares, the Company will return the 10
million shares surrendered and will issue the surrendering shareholders, PRO
RATA, based on the number of shares surrendered, an aggregate of 2 million
additional shares of common stock as compensation for surrendering their shares.

In addition, if the price of the Company's common stock is lower when the 10
million replacement shares are issued than it was on the date the shares were
surrendered, the surrendering shareholders will be issued additional shares, PRO
RATA, based on the number of shares surrendered, such that the total replacement
shares issued is equal in value on the replacement date to the value of the
shares surrendered on the date of surrender. For example, if the value of 10
million shares on the date of surrender was $15 Million and the market price of
the Company's common stock on the replacement date was $1.00, the surrendering
shareholders would be issued 15 million shares of common stock on the
replacement date to replace the $15 Million in value surrendered at the
surrender date. For purposes of this arrangement, the "price" of the common
stock is based on a five day trailing average closing price, as quoted on the
OTC Bulletin Board.

On March 9, 2000, the date of surrender of the 10 million shares, the five-day
trailing average closing price of the common stock was $1.79, as quoted on the
OTC Bulletin Board. Based on the quoted price of the common stock, the value of
the 10 million shares surrendered was $17.9 million. On September 19, 2001, the
five-day trailing average closing price of the common stock was approximately
$.05, as quoted on the OTC Bulletin Board. If the Company were to replace, as of
September 19, 2001, the 10 million shares surrendered, the Company would be
obligated to issue approximately 358 million shares of its common stock in
replacement of the 10 million shares originally surrendered.

In November, 2000, Palmilla Ventures surrendered to the Company an additional
4,697,129 shares of its common stock. These shares are to be re-issued upon an
increase to 125,000,000 in the number of authorized shares of common stock.

-11-

7. ACQUISITIONS

By 1999, it was apparent to Company management that the level of sales was not
sufficient to sustain the Company as a going concern without significant growth
in revenue and profitability, and that there would need to be a substantial
increase in the Company's business volume and product availability to support
future growth. Accordingly, during 1999, Company management sought acquisitions
of, and relationships with, companies having complementary products. The Company
entered into a global merger agreement that involved the Company combining with
several other companies. The proposed merger transaction was not consummated and
the parties withdrew from the overall transaction. The Company believes that the
focus of the Company's management on the acquisitions had an adverse impact upon
the Company's financial condition and results of operations.

As a result, the Company experienced a severe shortage of capital during 2000,
which had the effect of substantially curtailing the Company's operating
activities, to the point that the Company had essentially become inactive from
an operating point of view. In order to restart the Company's business
operations, the Company has sought to acquire businesses that focus on
children's toys and educational products.

In February 2001, the Company completed the acquisition of DaMert Company, which
is focused on the production, marketing and distribution of toys and gifts. In
connection with the Acquisition of DaMert, the Company paid the following
consideration: (i) 2,000,000 shares of common stock; (ii) a promissory note in
the approximate amount of $129,000 to an officer of DaMert (in replacement of a
note in the same amount owed by DaMert to such officer); (iii) the issuance of
an aggregate of 3,000,000 shares of common stock to Amresco Financial I, L.P.
("Amresco") (a creditor of DaMert), of which 1,500,000 shares were issued at the
closing of the acquisition and the remaining 1,500,000 shares are issuable by
June 15, 2001 (Company currently in default); (iv) $220,000 in cash was paid (at
or before the closing) to Amresco in satisfaction of certain indebtedness of
DaMert; and (v) a promissory note, personally guaranteed by Vincent Goett, the
Company's Chairman, in the principal amount of $1,300,000 was issued to Amresco
(the note is payable as follows: $180,000 by April 15, 2001 (paid); $400,000 by
May 15, 2001 (Company currently in default); and the $720,000 is payable
beginning August 15, 2001 in five equal installments of $116,667 and one final
quarterly installment of $136,666) ($116,667 quarterly installment due August
15, 2001 not paid and in default). In addition, the Company issued options to
purchase an aggregate of 1,000,000 shares of the Company's common stock, at a
price of $.001 per share to Fred and Gail DaMert (who are employees of DaMert).
See Note 10, Subsequent Events, for a description of certain Company defaults
under the agreement with Amresco. The note is secured by certain personal
property of the Company. Amresco has since commenced litigation against the
Company as a result of the foregoing defaults. See Part II. Item 1. Legal
Proceedings in this Form 10Q-SB.

In the event that the quoted price of the Company's common stock does not
average at least $1.00 per share, over a twenty-day trading period during the 24
months following the closing, the Company will be obligated to pay Fred and Gail
DaMert in the aggregate (in cash or stock at their option) an amount equal to
the excess of $1 million over the product of 1 million and the highest 20 day
average quoted price of the common stock during the 24 months following the
closing.

-12-

<Page>

On May 29, 2001, the Company acquired certain assets of Futech Interactive
Products, Inc., an Arizona corporation ("Futech"), by virtue of an asset
purchase ("Purchase"). Prior to the acquisition, Vincent W. Goett, then
Chairman of the Board and a significant shareholder of the Company, was
interim Chief Executive Officer and a significant shareholder of Futech.
Futech had previously filed for protection from creditors under Chapter 11 of
the United States Bankruptcy Code. The United States Bankruptcy Court
handling the Futech bankruptcy proceeding approved the Company's purchase of
certain Futech assets. The acquired assets of Futech consist of, among other
things, accounts receivable, patented technology and customer lists.

The Purchase consideration paid by the Company consisted of: (i) an aggregate of
approximately 22 million shares of Janex common stock; (ii) the assumption of an
aggregate of approximately $3 million of indebtedness (definitive loan agreement
still under negotiation); and (iii) the payment of approximately $150,000 in
cash. The shares of common stock are issuable within approximately 150 days of
closing.

$2,000,000 of the $3,000,000 indebtedness assumed by the Company is to be
personally guaranteed by Vincent Goett, the Company's Chairman and CEO. The
$150,000 paid to/on behalf of Futech by the Company in connection with the
closing of the Purchase was loaned to the Company by Palmilla Ventures Limited
Partnership, a limited partnership controlled by Vincent Goett. The Purchase
transaction was approved by the United States Bankruptcy Court handling the
Futech bankruptcy proceeding.

8. RELATED PARTY TRANSACTIONS

In January 2001, the Company's Board of Directors authorized the Company to
borrow up to $1,300,000 from an affiliate of Vincent Goett, Palmilla Ventures
Limited Partnership ("Palmilla Ventures") (which borrowings may consist of Mr.
Goett's personal guarantee of Company obligations), of which, as of September
20, 2001, approximately $460,000 has already been advanced to or for the benefit
of the Company. The advances made by Palmilla Ventures are payable on demand and
bear interest at the rate of 10% per annum. Such advances are secured by all the
assets of the Company and DaMert Toys and Games, Inc., the Company's
wholly-owned subsidiary. If the Company defaults on its obligations under the
note, the secured party (or any assignee) would be able to force a sale of the
assets constituting the collateral to satisfy the debt. As additional
consideration for making the $1,300,000 loan to the Company, the Company has
agreed to issue Palmilla Ventures that number of shares of common stock equal to
approximately 19% of the issued and outstanding common stock, on a fully-diluted
basis, after giving effect to certain specified transactions. Based on the
amount advanced to date (approximately $312,000 of the total $1.3 million), the
Company is obligated to issue Palmilla Ventures that number of shares of common
stock equal to approximately 6.8% of the issued and outstanding common stock on
a fully-diluted basis, after giving effect to certain specified transactions. In
addition, in connection with the acquisition of DaMert in February 2001, Vincent
Goett personally guaranteed approximately $1,300,000 of the obligation of the
DaMert Company to Amresco Financial I, L.P. (a creditor of DaMert). In
consideration of making this guarantee, the Company has agreed to issue Mr.
Goett (or his designee) that number of shares of common stock equal to
approximately 19% of the issued and outstanding common stock, on a fully-diluted
basis, after giving effect to certain specified transactions. The issuance of
the foregoing shares is subject to an increase to 125,000,000 in the number of
authorized and unissued shares of the Company's common stock.

As described above, on May 29, 2001, the Company acquired certain assets of
Futech, by virtue of an asset purchase. $2,000,000 of the $3,000,000 of
indebtedness assumed by the Company is to be personally guaranteed by Vincent
Goett, the Company's Chairman and CEO.

-13-

<Page>

Prior to the acquisition, Vincent W. Goett, then Chairman of the Board and a
significant shareholder of the Company, was interim Chief Executive Officer and
a significant shareholder of Futech.

In May 2001, the Company's Board of Directors authorized the Company to borrow
up to an additional $2,000,000 (in addition to the $1,300,000 previously
authorized and described above) from an affiliate of Vincent Goett, Palmilla
Ventures Limited Partnership ("Palmilla Ventures") (which borrowings may take
the form of Mr. Goett's personal guarantee of loans to the Company by third
parties and discharge of accrued salary owing by the Company to Mr. Goett). Any
such advances made by Palmilla Ventures are to bear interest at the rate of 10%
per annum. To date, no such advances have been made. To the extent Mr. Goett
"loans" such additional amounts to the Company, then, as additional
consideration for making such loans to the Company, the Company has agreed to
issue Palmilla Ventures that number of shares of common stock equal to up to
approximately 19% of the issued and outstanding common stock, on a fully-diluted
basis, after giving effect to certain specified transactions (assuming the full
$2,000,000 is advanced; if less than the full $2,000,000 is advanced, Mr. Goett
will be entitled to a pro rata number of shares).

In addition, in connection with the acquisition of DaMert, Vincent Goett
personally guaranteed approximately $1,300,000 of the obligation of the DaMert
Company to Amresco Financial I, L.P. (a creditor of DaMert). In consideration of
making this guarantee, the Company has agreed to issue Mr. Goett (or his
designee) that number of additional shares of common stock equal to
approximately 19% of the issued and outstanding common stock, on a fully-diluted
basis, after giving effect to certain specified transactions. The issuance of
the foregoing shares is subject to an increase to 125,000,000 in the number of
authorized and unissued shares of our common stock.

As further consideration to Mr. Goett for loans to the Company and personal
guarantee of Company obligations, the Board of Directors in May, 2001 authorized
the Company to assume $331,000 of personal indebtedness of Mr. Goett, which
indebtedness is payable in September 2002.

In May 2001, the Board of Directors authorized the Company to pay Vincent Goett
$400,000 for inventory of children's products owned by Mr. Goett, having a cost
basis to Mr. Goett of $275,000. Assuming Mr. Goett delivers the inventory to the
Company, the $400,000 will be due in May of 2002, without interest.

In May 2001, the Board of Directors authorized the Company to acquire a patent
from Vincent Goett in exchange for 8,000,000 shares of the Company's common
stock. The patent concerns the use of liquid crystal display technology in
conjunction with Futech's conductive ink technology. The patent purchase has not
been consummated.

-14-

<Page>

increase to 125,000,000 in the number of the Company's authorized common shares.

9. ACCOUNTS RECEIVABLE FINANCING

In March 2001, the Company entered into an agreement of Purchase of Accounts
whereby the Company sells its interest in certain accounts receivable. The
purchaser will advance 80% of the receivables sold with the balance being
retained by the purchaser subject to certain provisions as to the collection
period of the account(s) sold. At June 30, 2001, approximately $150,000 of
receivables were sold.

10. SUBSEQUENT EVENTS

In July 2001, the Company signed a Letter of Intent to acquire a 60% ownership
in Joy Berry Books, a private company specializing in the production and
marketing of childrens' self-help print and electronic books authored by Joy
Berry. The parties are still in negotiations and there is no assurance the
transaction will be consummated.

The Company, in July 2001, also signed a Letter of Intent to acquire a 70%
ownership of Anvil Studios, Inc., a leading theatrical classical animation, 3D,
new media, and convergence content company. Under the proposed terms, the
Company would provide Anvil Studios with 11.6 million shares of its common stock
and $550,000 of working capital. Negotiations are continuing regarding
completion of the Acquisition Agreement and there is no assurance the
transaction will be consummated.

In August 2001, the Company granted Vincent Goett, its Chairman, immediately
exercisable options to purchase 750,000 shares at a per share price of $.001.
The options have since been exercised.

As described above, pursuant to a promissory note in the principal amount of
$1,300,000, the Company was obligated to pay Amresco $400,000 and $116,667 on
May 15 and August 15, 2001, respectively, which the Company has not paid as of
September 20, 2001. Further, the Company has not yet issued to Amresco the
1,500,000 shares of common stock that it was obligated to issue June 15, 2001
under the Agreement with Amresco. In September 2001, Amresco commenced
litigation against the Company due to the above referenced defaults. For a
description of this and certain other litigation commenced after June 30, 2001,
see Part II. Item 1. Legal Proceedings in this Form 10Q-SB.

11. DUE TO RELATED PARTIES (SHAREHOLDERS' DEFICIT)

Due to related parties represents shares to be issued in connection with
various share surrenders to the Company. The value ascribed to the shares
surrendered is based on the market value of the shares at the date of
surrender. Some of the shares are issuable following an increase to
65,000,000 in the number of authorized shares of common stock, while the
remaining shares are issuable following an increase to 125,000,000 in the
number of authorized shares.

12. INCOME TAX COMPLIANCE

The Company has not filed its 1999 and 2000 tax returns. Since the Company
has had continuous losses and has available net operating losses, the Company
believes that any tax liability would not be material.

-15-

JANEX INTERNATIONAL, INC. AND SUBSIDIARIES

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATION

OVERVIEW

In February 2001, the Company completed the acquisition of DaMert Company, which
is focused on the production, marketing and distribution of toys and gifts. The
acquisition of DaMert had a significant impact on the Company's operations
during the preceding and current quarter. The DaMert acquisition has resulted in
a substantial increase in revenues, as well as associated operating expenses. In
addition, in May 2001, the Company completed the acquisition of certain assets
of Futech. See Part II. Item 5, Other Information. Our lack of operating capital
is materially and adversely affecting our ability to generate revenue from the
DaMert operations and the Futech assets.

As a result of consummating the DaMert and Futech acquisitions, the Company will
generate substantially more revenue in fiscal 2001, compared to fiscal 2000. The
Company also expects to incur substantially greater expenses in 2001, compared
to the prior year. The Company expects to incur negative cash flow for the
foreseeable future. The accounts of both Janex and DaMert were consolidated for
the first time in the interim financial statements for the period ended March
31, 2001. The consolidated statement of operations for the quarter ended June
30, 2001 reflects the operations of both Janex and DaMert for the full three
months ended June 30, 2001. The consolidated balance sheet as of June 30, 2001
also includes the assets acquired and liabilities assumed in connection with the
closing of the Futech asset purchase.

For a description of the Futech asset purchase, see Part II. Item 5, Other
Information.

MATERIAL CHANGES IN RESULTS OF OPERATIONS

THREE AND SIX MONTHS ENDED JUNE 30, 2001 AND JUNE 30, 2000

The following discussion compares the results of operations of the Company for
the three and six months ended June 30, 2000 and the consolidated results of
operations of the Company and its wholly-owned subsidiary, DaMert, for the three
and six months ended June 30, 2001. The consolidated results of operations for
the entire quarter ended June 30, 2001 include the operations of DaMert. The
acquisition of the Futech assets had no impact on the Company's results of
operations for the quarter ended June 30, 2001.

NET LOSS

Net loss for the three and six months ended June 30, 2001 was $1,229,167 and
$1,583,447, respectively, as compared to a net loss of $1,161,979 and
$7,423,051 for the comparable periods in 2000. Net losses during the three
and six months ended June 30, 2001 included non-cash stock-based compensation
charges in the amount of $203,940 and $266,440, respectively, as compared to
$725,000 and $6,795,950, for the comparable prior periods.

-16-

NET SALES

Net sales for the three and six months ended June 30, 2001 were $813,643 and
$1,361,283, respectively, consisting entirely of DaMert sales, as compared to
negative net revenue of $10,176 (resulting from royalty adjustments) and
$1,690 for the comparable periods in 2000. The increase in sales in 2001 is
attributable entirely to the operations of DaMert. Our lack of operating
capital continues to materially and adversely affect our ability to fund
growth in the Company's business. Due to the lack of operating capital, we
believe that DaMert will generate no more than approximately $4,000,000 in
revenue and that the Futech assets will generate no revenue, in each case for
Fiscal 2001. Further, until such time as we secure sufficient operating
capital, we will not be in a position to generate sales from the Futech
assets acquired.

At June 30, 2001, the Company had a backlog of approximately $308,921 of
unfilled orders, compared to a backlog of $269,727 at March 31, 2000. The
backlog is exclusively for DaMert product.

GROSS PROFIT

Gross profit was $160,139 and $381,236 for the three and six months ended June
30, 2001, respectively, as compared to a gross profit of a negative $10,025 and
$1,969 for the comparable periods in 2000. Gross profit is equal to revenues
less the cost of goods sold and royalties paid. The increase in gross profit in
2001 compared to 2000 is directly attributable to the increase in sales from the
introduction of DaMert products.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSE

Selling, general and administrative ("SG&A") expenses were $970,580 and
$1,415,250 for the three and six months ended June 30, 2001, respectively,
compared to $415,241 and $594,016 for the comparable periods in 2000, an
increase of $555,339 and $821,234, respectively. The increase in SG&A is
attributable primarily to the operations of DaMert.

STOCK-BASED COMPENSATION

For the three and six months ended June 30, 2001, the Company incurred
stock-based compensation (non-cash) in the amount of $203,940 and $266,440,
respectively, compared to $725,000 and $6,795,950 during the comparable periods
in 2000. The decrease in stock based compensation is due to a decrease in the
number of stock options granted and stock issuances in the period to employees
and consultants for services rendered. The Company expects that it will incur
additional stock based compensation in future periods.

DEPRECIATION AND AMORTIZATION

Depreciation and amortization for the three and six months ended June 30, 2001
was $110,720 and $142,874, respectively, compared to $-0- and $10,005 for the
comparable prior periods.

The increase in depreciation and amortization was attributable to the
operations of DaMert and the amortization of goodwill.

-17-

SEASONALITY AND QUARTERLY FLUCTUATIONS

The Company's business normally follows closely that of other companies with
child-oriented product lines, which tend to generate the greater part of both
sales and profits during the Christmas selling season. The Company expects that
sales will be higher in the third and fourth quarters of the year, as compared
to the first and second quarters of the year.

LIQUIDITY AND CAPITAL RESOURCES

We continue to experience a severe working capital deficiency and negative
cash flow. We currently have no cash reserves, and are unable to meet our
financial obligations as they become due or implement our business plans. We
have an immediate and urgent need for cash. Our working capital deficiency at
June 30, 2001 was $5,035,933, compared to a working capital deficiency of
$4,578,601 at December 31, 2000, an increase in working capital deficiency of
$457,332. The increase of $457,332 in our working capital deficiency is due
primarily to an increase in current bank debt of $1,620,000 (relating to both
the DaMert and Futech acquisitions), a $1,055,934 increase in accounts
payable and accrued expenses (resulting from the Company's continuing
inability to pay its vendors and service providers), a $614,115 increase in
amounts due to related parties, shareholders, and other loans payable (these
have become sources of financing for the Company during this time), partially
offset by a $1,226,517 increase in the Company's current assets, which
increased as a direct result of the acquisition of DaMert and includes assets
such as accounts receivable, inventory, and prepaid expenses, and
elimination, in connection with the Futech acquisition, of the $1,606,199
Futech claimed we owed it. Although we completed the acquisition of the
DaMert Company in February, 2001 and are now generating revenue, we are
continuing to incur negative cash flow. Further, our working capital
deficiency has increased significantly in connection with completing the
Futech acquisition in May 2001. The completion of the Futech acquisition will
also exacerbate our cash flow problems until we are able to benefit from any
increases in sales. We do not expect any sales related to the Futech assets
until at least 2002. Based on current cash on hand, we need to raise
additional funds immediately in order to continue as a going concern. We are
attempting to reduce the working capital deficiency by raising additional
capital in the form of either debt or equity financings. We continue to
experience great difficulty raising the capital we need to fund our
operations. We are also reviewing operating expenses, with the aim of
reducing them wherever possible. We may not be able to raise sufficient funds
to reduce the working capital deficiency or to fund our costs and expenses.

Currently, we do not have sufficient authorized and unissued shares of common
stock to execute our business and financial plans. We believe that the absence
of available shares of common stock has and will make it substantially more
difficult for us to raise capital, as any transaction involving our common stock
will have to be made subject to an increase in the number of authorized shares
of such stock. As soon as we obtain the necessary funds, we plan to seek
stockholder approval of an increase in the number of authorized shares of our
common stock. If we are unable to raise sufficient capital in a timely fashion
to reduce the working capital deficiency and to fund our operations, our
business will continue to be materially and adversely affected and we will not
be able to continue as a going concern. Our lack of operating capital is
currently having a material and adverse affect on our ability to generate
revenues.

Our auditors' report as of December 31, 2000 indicates, and our auditors
continue to believe, that certain factors raise substantial doubt about our
ability to continue as a going concern. Our auditors issued a going concern
opinion on both our and DaMert's financial statements because:

-18-

<Page>

- each of us has nominal cash;
- each of us has experienced declining revenues;
- we have continuing negative net worth;
- we have a severe working capital deficiency;
- we do not have sufficient authorized and unissued shares of common
stock to execute our business and financing plans; and
- each of us has recurring losses.

Our ultimate ability to continue as a going concern depends on: (1) obtaining
additional capital to provide near-term operating cash; and (2) generating
positive cash flow.

Based upon our current budget and business planning, we believe that we will
need approximately $4,000,000 of additional capital to fund our planned
operations over the next twelve months. We cannot be sure that we will be able
to internally generate or raise sufficient funds to continue our operations, or
that our auditors will not issue another going concern opinion. We are involved
in various legal proceedings, as described in Part II, Item 1: Legal
Proceedings. In connection with such proceedings, default judgments in the
aggregate amount of approximately $500,000 have been entered against us. We
currently do not have the ability to pay these judgments. The enforcement of
these judgments will have a material adverse effect on our business and
financial condition and our ability to continue as a going concern.

In connection with our acquisition of DaMert, we issued a promissory note,
personally guaranteed by Vincent Goett, our Chairman, in the principal amount of
$1,300,000 to Amresco (then a creditor of DaMert), payable as follows: $180,000
by April 15, 2001 (paid); $400,000 by May 15, 2001 (Company currently in
default); and the remaining $720,000 is payable beginning August 15, 2001 in
five equal quarterly installments of $116,667 and one final quarterly
installment of $136,666 (Company currently in default of first quarterly payment
of $116,667 due August 15, 2001). This $1,300,000 promissory note is secured by
certain personal property of the Company. The Company was not able to pay
Amresco the $400,000 that was due on May 15, 2001 or the $116,667 that was due
August 15, 2001. Further, the Company has not yet issued to Amresco the
1,500,000 shares of common stock that it was obligated to issue June 15, 2001
under the Agreement with Amresco. On September 7, 2001, Amresco filed a lawsuit
against the Company and Vincent Goett alleging, among other things, the
foregoing defaults under the operative agreements. Amresco has accelerated all
amounts owed under the operative agreements and declared such amounts
immediately due and payable. The Company currently owes Amresco in excess of
$1,120,000. Amresco has also demanded possession of the collateral to satisfy
the debt. See Part II. Item 1. Legal Proceedings for further information. The
outcome of this litigation could have a material adverse effect upon our ability
to continue as a going concern.

In the event that the quoted price of the Company's common stock does not
average at least $1.00 per share over a twenty-day trading period during the 24
months following the closing of the DaMert acquisition in February 2001, the
Company will be obligated to pay Fred and Gail DaMert in the aggregate (in cash
or stock at their option) an amount equal to the excess of $1 million over the
product of 1 million and the highest 20-day average quoted price of the common
stock during the 24 months following the closing. Based on the current quoted
price of the common stock, we could be subject to a potentially significant
liability (estimated to be in excess of $950,000).

In connection with completion of the Futech acquisition, we are obligated to
repay approximately $3,000,000 of bank indebtedness we assumed as follows: (i)
with respect to $1,500,000 of such indebtedness, interest only will be payable

-19-

<Page>

monthly over three years and the principal ($1,500,000) will be payable on the
third anniversary of the closing of the transaction (May 2004); and (ii) with
respect to the remaining $1,500,000 of indebtedness, principal ($1,500,000) and
interest will be payable in thirty-six equal monthly installments commencing on
the closing of the transaction. $2,000,000 of the assumed indebtedness is to be
guaranteed by the Company's Chairman and CEO. This indebtedness will be secured
by certain collateral acquired from Futech. Repayment of principal and interest
on this indebtedness is estimated to cost approximately 75,000 per month, with a
$1,500,000 principal payment due in 2004. The definitive loan agreement is still
under negotiation.

At September 22, 2001, we were indebted to our Chairman in the amount of
approximately $460,000. This indebtedness is payable on demand and secured by
all the assets of the Company and DaMert. If the Company defaults on its
obligations under the note, the secured party (or any assignee) would be able to
force a sale of the assets constituting the collateral to satisfy the debt. In
addition, our board of directors has authorized us to acquire childrens'
products inventory owned by Mr. Goett for $400,000, which will be due and
payable May 2002 (assuming Mr. Goett delivers the inventory prior to such date).

At June 30, 2001, the Company has $332,000 outstanding under a line of credit
that bears interest at the bank's prime rate plus 0.25%. The debt has been
extended from time to time and is currently due October 1, 2001. The note is
personally guaranteed by three significant shareholders, one of whom is a
director and Officer of the Company. The note is collateralized by certificates
of deposit in the name of the shareholders and a UCC Security Agreement executed
by the Company covering all corporate assets. If the Company defaults on its
obligations under the note, the secured party (or any assignee) would be able to
force a sale of the assets constituting the collateral to satisfy the debt.
Interest on the note has been paid by one of the guarantors.

The Company, in July 2001, also signed a Letter of Intent to acquire a 70%
ownership of Anvil Studios, Inc., a leading theatrical classical animation, 3D,
new media, and convergence content company. Under the proposed terms, the
Company would provide Anvil Studios with 11.6 million shares of its common stock
and $550,000 of working capital. Negotiations are continuing regarding
completion of the acquisition agreement and there is no assurance the
transaction will be consummated.

CASH FLOWS

Our operating activities used $260,998 of cash for the six months ended June
30, 2001, as compared to using $239,534 for the comparable prior period.
Excluding the effects of stock based non-cash compensation, the increase in
cash used by our operating activities is primarily attributable to an
increase in net loss and a smaller increase in payables and acrued expenses,
compared to the prior period, offset by a larger decrease in accounts
receivable and inventory, compared to the prior period, and an increase in
depreciation.

-20-

<Page>

Our investing activities used $331,081 during the six months ended June 30,
2001, compared to generating no cash during the same period in 2000. The
increase in cash used by investing activities is primarily a result of our
acquisition of DaMert and Futech.

Our financing activities provided $636,266, compared to the previous year's
same period of $240,813. The increase in cash provided by financing
activities is attributable to increased loans (including from related
parties), partially offset by increased payments on borrowings.

As of June 30, 2001, subject to the availability of operating capital, we plan
to make capital expenditures over the next twelve months of up to $800,000 to
fund new product development, including initial licensing charges and tooling.

INFLATION

We do not believe that inflation has had a significant impact on our costs and
profits during the past two years.

FORWARD-LOOKING STATEMENTS

We have made forward-looking statements in this report that are subject to a
number of risks and uncertainties including, without limitation, those described
below and other risks and uncertainties indicated from time to time in our
filings with the SEC. These forward-looking statements are made pursuant to the
safe harbor provisions of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements include the information concerning possible or
assumed future results of operations. Also, when we use words such as "believe,"
"expect," "anticipate" or similar expressions, we are making forward-looking
statements. Readers should understand that the following important factors, in
addition to those discussed in the referenced SEC filings, could affect our
future financial results, and could cause actual results to differ materially
from those expressed in our forward-looking statements:

* the implementation of our growth strategy, including our ability
to consummate the planned acquisitions;

* the effects of the DaMert and Futech acquisitions and new
relationships with complementary companies;

* the availability of additional capital;

* variations in stock prices and interest rates;

* fluctuations in quarterly operating results; and

* other risks and uncertainties described in our filings with the
SEC.

We make no commitment to disclose any revisions to forward-looking statements,
or any facts, events or circumstances after the date hereof that may bear upon
forward-looking statements.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

On September 5, 2001, Amresco Financial I, L.P., as Plaintiff ("Amresco"),
served us with a complaint ("Complaint") which names us, Vincent Goett
("Goett"), our Chairman and Chief Executive Officer, and our subsidiary, DaMert
Toys and Games, Inc. ("DaMert") as Defendants. The case is pending in the
Superior Court of the State of California for the County of Alameda (Case

-21-

<Page>

No. 2001-022682). The Complaint alleges, among other things, that (i) we are
indebted to Amresco in the principal amount of $1,120,000 and for unpaid
interest in the amount of approximately $32,000, plus late charges and accruing
attorney's fees and costs; (ii) we have defaulted under the operative agreements
as follows: (a) failure to pay $400,000 due May 15, 2001, (b) failure to pay
$116,667 due August 15, 2001, and (c) failure to issue 1,500,000 shares of
common stock on June 15, 2001; (iii) that Goett has breached the guaranty
agreement by failing to pay the amounts we owe Amresco under the operative
agreements; (iv) that we have defaulted under the security agreements with
Amresco by failing to make the required payments and failing to issue the
1,500,000 shares of stock to Amresco; and (v) that Amresco is entitled to
immediate and exclusive possession of the collateral covered by its security
agreements with us. Amresco has accelerated the amounts due under the operative
agreements and has declared all such amounts (approximately $1,150,000) to be
immediately due and payable. Amresco also seeks certain injunctive relief and
the appointment of a receiver to take control of our subsidiary, DaMert Toys and
Games, Inc. The Company is in the process of preparing a response to this
lawsuit. The outcome of this litigation could materially and adversely affect
our financial condition and ability to continue as a going concern.

On July 5, 2001, Brian Walker, as Plaintiff ("Walker"), served DaMert with a
Complaint ("Complaint") which names DaMert as Defendant. The case is pending in
the United States District Court for the District of Oregon (Civil Case No.
CV-01-1038). The Complaint alleges that DaMert entered into an agreement with
Walker to manufacture and sell a certain product and that DaMert has breached
that agreement. The Complaint also alleges that DaMert has wrongfully withheld
from Walker prototypes and drawings Walker submitted to DaMert. The Complaint
seeks $250,000.00 for alleged breach of express contract; $250,000 for alleged
breach of implied contract; $250,000 for lost business opportunities arising out
of DaMert's alleged failure to return prototypes and drawings; and $250,000 for
punitive damages. We intend to vigorously defend against this lawsuit. There can
be no assurance as to the outcome of this litigation, which could have a
material and adverse affect upon the Company.

On May 16, 2000, Golden Books Family Entertainment, Inc., as plaintiff ("Golden
Books"), served us with a Second Amended Complaint which names Futech, Vincent
W. Goett ("Goett"), and us as defendants. We were not named in the original
complaint or the first amended complaint. The case was pending in the United
States Bankruptcy court for the Southern District of New York (Bankruptcy case
No. 99-10030). In March, 2001, Golden Books and the Company entered into a
stipulation to suspend this litigation until the earliest to occur of: (1) the
closing of the transactions contemplated by the agreement with Futech for the
Purchase and Sale of Assets, as amended (the "Agreement"); (2) rescission or
invalidation of the Agreement; or (3) July 2, 2001. In August 2001, we were
advised by counsel that Golden Books has agreed to withdraw its claims against
us.

By way of background, the proceeding originally commenced in June 1999. The
Second Amended Complaint alleges, among other things, (i) that Futech is
indebted to Golden Books in the amount of $1 million under a promissory note
dated August 14, 1996 ("Note"), (ii) that Futech has defaulted on its
obligations under the Note, (iii) that Goett has personally guaranteed
performance of Futech's obligations under the Note, (iv) that Goett in January
2000 caused Futech to transfer all or virtually all of its assets to the
Company, and (v) that the transfer was made by Goett and Futech knowingly with
intent to deplete Futech of assets and that we accepted the transfer knowingly
and with intent to assist Goett and Futech in depleting Futech of assets and
thereby rendering it judgment-proof or, in the alternative, that Futech, on or
about January 2000, transferred to us Futech's Interactive Books division and
all of the assets and liabilities thereof. On the basis of the foregoing, the

-22-

<Page>

Second Amended Complaint alleges that Futech, Goett and the Company (or in the
alternative Goett and the Company) are jointly and severally liable for the $1
million under the Note, plus interest, costs and reasonable attorney's fees.

The Second Amended Complaint also alleges (i) that Futech transferred its assets
to us with intent to hinder, delay or defraud Golden Books in pursuit of its
claim against Futech, (ii) that such transfer was made without receiving a
reasonably equivalent value for the transfer, (iii) that Futech was insolvent at
the time of transfer (or became insolvent as a result), (iv) that the transfer
included all or substantially all of Futech's assets to the Company, (v) that
the transfer of Futech assets to us was a "fraudulent conveyance" under Arizona
law, and (vi) that Goett conspired with Futech and Janex to effect the asset
transfer with the intent and for the purpose of hindering, delaying and
defrauding Futech's creditors, including rendering Futech judgment-proof, and
that such conduct was malicious and intended to injure Golden Books.

Based on the foregoing, Golden Books claimed it was entitled to garnishment,
avoidance of the transfer, and attachment or other provisional remedy and $1
million, plus interest and punitive damages.

As described above, we have consummated the planned acquisition of the specified
Futech assets (excluding assets constituting collateral of Golden Books) and,
further, the U.S. Bankruptcy Court has approved the acquisition of such assets.
In August 2001, we were advised by counsel that Golden Books has agreed to
withdraw its claims against us.

On June 20, 2000, Jon Weber, d/b/a Alma Designs, as plaintiff ("Weber"), served
us with a Complaint which names Futech and us as defendants. The case is pending
in the United States District court for the Northern District of California, San
Jose Division (Case No.CA-00 20670). The Complaint alleges, among other things,
(i) that the defendants solicited the plaintiff to ship goods valued in excess
of $240,000, and failed to pay for the goods after their sale, (ii) that Futech
issued purchase orders to the plaintiff, (iii) that we are the parent company of
Futech, and that we caused Futech to transfer substantially all of its liquid
assets to us, and (iv) that the defendants fraudulently induced the plaintiff to
ship the merchandise knowing that it did not have sufficient funds to pay the
amount due and with the intent of not paying the amounts due. On the basis of
the foregoing, the Complaint demands judgment for $243,000, interest and costs
and punitive damages of $200,000. On August 2, 2000, the Court awarded a Default
Judgment against us and Futech in the amount of approximately $237,000. We are
not the parent company of Futech and, although we have consummated the
acquisition of Futech's assets, we did so pursuant to Bankruptcy Court approval.
We intend to attempt to have the Default Judgment vacated, as we believe that we
have strong defenses against the foregoing claims. We cannot assure you that we
will be able to have the Default Judgment vacated, and we have accrued the full
amount of the default judgment as of June 30, 2001. Even if we are able to have
the Default Judgment vacated, we cannot give you any assurance as to the outcome
of the litigation, which could have a material adverse affect on us.

On January 26, 2000, Caterpillar, Inc., as plaintiff ("Caterpillar"), served us
with a Complaint which names us and Futech as defendants. The case was pending
in the Circuit Court of the Tenth Judicial Circuit of Illinois, Peoria County
(case No. 00 L26). The Complaint alleged that we are indebted to Caterpillar in
the amount of $45,000 in unpaid minimum royalty payments under a Trademark
Merchandise License Agreement dated April 15, 1997. On May 23, 2000, the Court
awarded a Default Judgment against us and Futech in the amount of $60,621.80.

-23-

<Page>

On May 16, 2000, A.H. Warner Properties. L.L.C., as plaintiff ("Warner"), served
us with a Complaint which names us, Futech, and others as defendants. The case
was pending in the Superior Court of the State of California for the County of
Los Angeles (case No.00B03229). The Complaint alleges that we are indebted to
Warner for unpaid rent pursuant to a lease for a property located in Woodland
Hills, California, and seeks judgment for the debt and interest, legal fees and
expenses. The lease on the subject property expired on June 30, 2000. On July
17, 2000, the Court awarded a Default Judgment against us in the amount of
approximately $22,000.

On June 30, 2000, CarrAmerica Realty Corporation, L.P., as Plaintiff, served us
with a Complaint which names us and others as defendants. On July 7, 2000 we
were served with a first amended Complaint which changed the Plaintiff to
CarrAmerica Realty, L.P. ("Carr"). The case is pending in the Superior Court of
the State of Arizona in and for the County of Maricopa (case No. CV2000-012389).
The Complaint alleges that, on or about June 1, 2000, we issued a check for
$61,812.78 which was returned to Carr for insufficiency of funds. The Complaint
further alleges that we intended to defraud Carr. We issued the check to Carr in
payment of a portion of the rent owed by Futech Interactive Products, Inc.
("Futech") to Carr on a property located in Phoenix, Arizona. Carr seeks
judgment against us for twice the amount of the check (that is, $123,635.56), in
addition to interest, court costs and reasonable attorneys' fees. On September
14, 2000 we answered the amended Complaint and asserted several affirmative
defenses. The outcome of this litigation is uncertain and could materially
adversely affect our financial condition.

On October 24, 2000 Carr served us and Futech, among others, with a Complaint
for forcible entry and detainer. The case was filed in the Superior Court of the
State of Arizona, in and for the County of Maricopa (case no. CU2000-019259).
The Complaint alleges that Carr's lease with Futech was deemed rejected by
operation of law in connection with Futech's bankruptcy proceeding and sought to
have all the defendants vacate the leased premises. We have stipulated to a
judgment ordering the defendants (including us) to vacate the premises leased by
Futech at 2999 North 44th Street, Phoenix, Arizona, and we have since vacated
such premises. On March 8, 2001, Carr filed a motion for summary judgment
against us, seeking judgment in the approximate amount of $75,000. The Company
has not filed a responsive pleading and the due date for such pleading has
passed. The Company anticipates that a judgment will be entered against it in
the approximate amount of $75,000.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

As described above, pursuant to a promissory note in the principal amount of
$1,300,000, the Company was obligated to pay Amresco $400,000 on May 15, 2001
and $116,667 on August 15, 2001, which the Company has not paid as of September
20, 2001. Further, the Company has not yet issued to Amresco the 1,500,000
shares of common stock that it was obligated to issue June 15, 2001 under the
agreement with Amresco. The Company's default and the related litigation could
have a material adverse effect on the Company's financial condition and its
ability to continue as a going concern. See Paragraph II, Item 1. Legal
Proceedings for further information.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

There were no matters submitted to a vote of the Company's security holders
during the three months ended June 30, 2001, through the solicitation of proxies
or otherwise.

-24-

<Page>

ITEM 5. OTHER INFORMATION

RELATED PARTY TRANSACTIONS

On May 29, 2001, the Company acquired certain assets of Futech Interactive
Products, Inc., an Arizona corporation ("Futech"), by virtue of an asset
purchase. Futech had previously filed for protection from creditors under
Chapter 11 of the United States Bankruptcy Code. The United States Bankruptcy
Court handling the Futech bankruptcy proceeding approved the Company's
purchase of certain Futech assets. The acquired assets of Futech consist of,
among other things, accounts receivable, patented technology and customer
lists.

The consideration paid by the Company for the acquired assets consisted of: (i)
an aggregate of up to approximately 22 million shares of Janex common stock;
(ii) the assumption of an aggregate of approximately $3 million of indebtedness;
and (iii) the payment of approximately $150,000 in cash. The shares of common
stock are issuable within approximately 150 days of the closing.

$2,000,000 of the $3,000,000 of indebtedness assumed by the Company is to be
personally guaranteed by Vincent Goett, the Company's Chairman/CEO. The $150,000
paid to/on behalf of Futech by the Company in connection with the closing of the
acquisition was loaned to the Company by Palmilla Ventures Limited Partnership,
a limited partnership controlled by Vincent Goett, the Company Chairman/CEO.

Prior to the acquisition, Vincent W. Goett, then Chairman of the Board and a
significant shareholder of the Company, was interim Chief Executive Officer and
a significant shareholder of Futech.

-25-

<Page>

In May 2001, the Company's Board of Directors authorized the Company to borrow
up to an additional $2,000,000 (in addition to the $1,300,000 previously
authorized and described above) from an affiliate of Vincent Goett, Palmilla
Ventures Limited Partnership ("Palmilla Ventures") (which borrowings may take
the form of Mr. Goett's personal guarantee of loans to the Company by third
parties and discharge of accrued salary owing by the Company to Mr. Goett). Any
such advances made by Palmilla Ventures are to bear interest at the rate of 10%
per annum. To date no such advances have been made. To the extent Mr. Goett
"loans" such additional amounts to the Company, then, as additional
consideration for making such loans to the Company, the Company has agreed to
issue Palmilla Ventures that number of shares of common stock equal to up to
approximately 19% of the issued and outstanding common stock, on a fully-diluted
basis, after giving effect to certain specified transactions (assuming the full
$2,000,000 is advanced; if less than the full $2,000,000 is advanced, Mr. Goett
will be entitled to a pro rata number of shares).

In May 2001, the Board of Directors authorized the Company to purchase from
Vincent Goett for $400,000 children's products inventory owned by Mr. Goett,
having a cost basis to Mr. Goett of $275,000. Assuming Mr. Goett delivers the
inventory to the Company, the $400,000 will be payable in May of 2002, without
interest.

In May 2001, the Board of Directors authorized the Company to acquire a patent
from Vincent Goett in exchange for 8,000,000 shares of the Company's common
stock. The patent concerns the use of liquid crystal display technology in
connection with Futech's conductive ink technology. The patent purchase has not
been consummated.

-26-

<Page>

-27-

<Page>

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.

(A) EXHIBITS. The following exhibits have been or are being filed herewith,
and are numbered in accordance with Item 601 of Regulation S-B:

<Table>
<Caption>
EXHIBIT
NUMBER DESCRIPTION

2.7 Agreement for Purchase and Sale of Assets between Futech Interactive Products, Inc. ("Futech") and the
Company, dated as of October 23, 2000. (Superseded by Exhibit 2.8 hereto)(1)

2.8 Agreement for Purchase and Sale of Assets between among others the Company and Futech, dated as of May 15,
2001 (Supersedes Exhibit 2.7 hereto) (2)

2.9 Merger Agreement between, among others, the Company and DaMert Company dated March 2000, as amended by the
First Amendment thereto dated May 10, 2000. (Superseded by Exhibit 2.11 hereto)(3)

2.10 Merger Agreement between, among others, the Company and DaMert Company, dated November 9, 2000.
(Superseded by Exhibit 2.11 hereto) (1)

2.11 Merger Agreement between, among others, the Company and DaMert Company, dated February 14, 2001.
(Supersedes Exhibits 2.9 and 2.10 hereto) (4)

3.1 Articles of Incorporation. (5)

3.2 Amendment No. 1 to Articles of Incorporation. (6)

3.3 Statement of Resolution Establishing Series for Shares. (6)

3.4 Amendment No. 2 to Articles of Incorporation. (6)

3.5 Bylaws of the Company. (7)

3.6 Articles of Amendment to Articles of Incorporation, dated August 11, 1994 and filed on August 16, 1994. (8)

4.1 Specimen Common Stock Certificate. (6)

16 Letter of BDO Seidman, LLP. (9)

16.1 Letter of Ernst & Young, LLP. (10)

99.1 Amended and Restated 2000 Combination Stock Option Plan. (11)
</Table>

---------

(1) Incorporated by reference to the Company's Quarterly Report on Form
10-QSB for the quarter ended September 30, 2000.

(2) Incorporated by reference to an Exhibit to the Company's Current Report
on Form 8-K filed on June 13, 2001.

(3) Incorporated by reference to the Company's Quarterly Report on Form
10-QSB for the quarter ended March 31, 2000.

(4) Incorporated by reference to an Exhibit to the Company's Current Report
on Form 8-K filed March 1, 2001.

-28-

<Page>

(5) Incorporated by reference to Exhibit 3(a) to the Company's Registration
Statement on Form 8-A, filed with the Commission on August 15, 1989 and
declared effective on September 1, 1989.

(6) Incorporated by reference to an exhibit to the Company's Registration
Statement on Form S-1 filed August 8, 1990.

(7) Incorporated by reference to Exhibit 3(b) to the Company's Registration
Statement on Form 8-A, filed with the Commission on August 15, 1989 and
declared effective on September 1, 1989.

(8) Incorporated by reference to an exhibit to the Company's Registration
Statement filed with the Commission December 20, 1994.

(9) Incorporated by reference to Exhibit 16 to the Company's Form 8-K filed
with the Commission of March 10, 1999.

(10) Incorporated by reference to Exhibit 16 to the Company's Form 8-K filed
with the Commission on April 28, 2000.

(11) Incorporated by reference to Exhibit 99.1 to the Company's Form S-8
Registration Statement filed June 13, 2001 with the Commission.

(B) REPORTS ON FORM 8-K

On June 13, 2001, the Company filed a Current Report on Form 8-K, dated, May 29,
2001,to report the acquisition of certain assets of Futech Interactive Products,
Inc. On June 21, 2001, the Company filed a Form 8-K/A, which amended its current
Report on Form 8-K filed March 1, 2001 with respect to the acquisition of DaMert
Company.

-29-

SIGNATURES

In accordance with Section 13 or 15(d) of the Securities Act of 1934, the
registrant has caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.

Dated: September 20, 2001 JANEX INTERNATIONAL, INC.

By: /s/ Vincent Goett
----------------------------------
Vincent Goett,
Chief Executive Officer

In accordance with the Securities Exchange Act of 1934, this report has been
signed by the following persons on behalf of the registrant in the capacities
and on the dates indicated.

Signatures Title Date
---------- ----- ----

/s/ Vincent Goett Chairman, President, September 20, 2001
--------------------------- Chief Executive Officer
Vincent Goett (principal executive
Officer and director)

/s/ Daniel Lesnick
--------------------------- Director September 20, 2001
Daniel Lesnick (director)

-30-

EXHIBIT INDEX

<Table>
<Caption>
EXHIBIT
NUMBER DESCRIPTION

2.7 Agreement for Purchase and Sale of Assets between Futech Interactive Products, Inc. ("Futech") and the
Company, dated as of October 23, 2000. (Superseded by Exhibit 2.8 hereto)(1)

2.8 Agreement for Purchase and Sale of Assets between among others the Company and Futech, dated as of May 15,
2001 (Supersedes Exhibit 2.7 hereto) (2)

2.9 Merger Agreement between, among others, the Company and DaMert Company dated March 2000, as amended by the
First Amendment thereto dated May 10, 2000. (Superseded by Exhibit 2.11 hereto)(3)

2.10 Merger Agreement between, among others, the Company and DaMert Company, dated November 9, 2000.
(Superseded by Exhibit 2.11 hereto) (1)

2.11 Merger Agreement between, among others, the Company and DaMert Company, dated February 14, 2001.
(Supersedes Exhibits 2.9 and 2.10 hereto) (4)

3.1 Articles of Incorporation. (5)

3.2 Amendment No. 1 to Articles of Incorporation. (6)

3.3 Statement of Resolution Establishing Series for Shares. (6)

3.4 Amendment No. 2 to Articles of Incorporation. (6)

3.5 Bylaws of the Company. (7)

3.6 Articles of Amendment to Articles of Incorporation, dated August 11, 1994 and filed on August 16, 1994. (8)

4.1 Specimen Common Stock Certificate. (6)

16 Letter of BDO Seidman, LLP. (9)

16.1 Letter of Ernst & Young, LLP. (10)

99.1 Amended and Restated 2000 Combination Stock Option Plan. (11)
</Table>
---------

(1) Incorporated by reference to the Company's Quarterly Report on
Form 10-QSB for the quarter ended September 30, 2000.

(2) Incorporated by reference to an Exhibit to the Company's Current Report
on Form 8-K filed on June 13, 2001.

(3) Incorporated by reference to the Company's Quarterly Report on Form
10-QSB for the quarter ended March 31, 2000.

(4) Incorporated by reference to an Exhibit to the Company's Current Report
on Form 8-K filed March 1, 2001.

-31-

<Page>

(5) Incorporated by reference to Exhibit 3(a) to the Company's Registration
Statement on Form 8-A, filed with the Commission on August 15, 1989 and
declared effective on September 1, 1989.

(6) Incorporated by reference to an exhibit to the Company's Registration
Statement on Form S-1 filed August 8, 1990.

(7) Incorporated by reference to Exhibit 3(b) to the Company's Registration
Statement on Form 8-A, filed with the Commission on August 15, 1989 and
declared effective on September 1, 1989.

(8) Incorporated by reference to an exhibit to the Company's Registration
Statement filed with the Commission December 20, 1994.

(9) Incorporated by reference to Exhibit 16 to the Company's Form 8-K filed
with the Commission of March 10, 1999.

(10) Incorporated by reference to Exhibit 16 to the Company's Form 8-K filed
with the Commission on April 28, 2000.

(11) Incorporated by reference to Exhibit 99.1 to the Company's Form S-8
Registration Statement filed June 13, 2001 with the Commission.

-32-