GARY S. SAUNDERS
CHAIRMAN & CEO
EKNOWLEDGE GROUP, INC. & SUBSIDIARY
1520 WEST 6TH STREET, SUITE 101
CORONA, CALIFORNIA 92882
(NAME AND ADDRESS OF PERSON AUTHORIZED TO RECEIVE NOTICES
AND COMMUNICATIONS ON BEHALF OF THE PERSON FILING STATEMENT)

FORM 10-QSB

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

[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

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM ____________ TO ____________

COMMISSION FILE NUMBER: 000-28881

EKNOWLEDGE GROUP, INC. & SUBSIDIARY
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

NEVADA 76-0430898
(JURISDICTION OF INCORPORATION) (I.R.S. EMPLOYER IDENTIFICATION NO.)

1520 W. 6TH STREET, SUITE 101, CORONA, CALIFORNIA 92882
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)

REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (909) 372-2800

AS OF SEPTEMBER 30, 2001, THE NUMBER OF SHARES OUTSTANDING OF THE
REGISTRANT'S COMMON STOCK WAS 28,231,931.

TRANSITIONAL SMALL BUSINESS DISCLOSURE FORMAT (CHECK ONE): YES [ ] NO [X]

PART I: FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS.

The financial statements, for the three months ended March 31, 2002,
included herein have been prepared by the Company, without audit pursuant to the
rules and regulations of the Securities and Exchange Commission. Certain
information and footnotes disclosure normally included in financial statements
prepared in accordance with generally accepted accounting principles have been
condensed or omitted pursuant to such rules and regulations, although the
Company believes that the disclosures are adequate to make the information not
misleading.

eKnowledge Group, Inc. and Subsidiary
Consolidated Balance Sheets

(unaudited) (audited)
March 31, 2002 December 31, 2001
- ---------------------------------------------------------------------------------------

ASSETS
CURRENT ASSETS
Cash and Cash Equivalents. . . . . . . . . . . 62,738 22,744
Accounts Receivable. . . . . . . . . . . . . . 1,950 1,950
Prepaid Expenses . . . . . . . . . . . . . . . 2,962 2,962
--------------- ------------------
TOTAL CURRENT ASSETS . . . . . . . . . . . . 67,650 27,656
PROPERTY AND EQUIPMENT
Furniture and Equipment. . . . . . . . . . . . 79,655 79,655
Less: Accumulated Depreciation . . . . . . . . (24,634) (20,593)
--------------- ------------------
PROPERTY AND EQUIPMENT, NET. . . . . . . . . 55,021 59,062
OTHER ASSETS
Deposits - Rent. . . . . . . . . . . . . . . . 7,637 7,637
Intangible Assets. . . . . . . . . . . . . . . 106,505 106,505
Less: Accumulated Amortization . . . . . . . . (61,635) (52,760)
--------------- ------------------
TOTAL OTHER ASSETS . . . . . . . . . . . . . 52,507 61,382
--------------- ------------------
TOTAL ASSETS . . . . . . . . . . . . . . . . 175,177 148,100
=============== ==================

LIABILITIES AND STOCKHOLDER'S EQUITY
CURRENT LIABILITIES
Accounts Payable . . . . . . . . . . . . . . . 249,067 264,171
Accrued Expenses . . . . . . . . . . . . . . . 697,107 738,351
Notes Payable. . . . . . . . . . . . . . . . . 52,500 52,500
Advances from Shareholders . . . . . . . . . . 517,162 517,162
Deposits Payable . . . . . . . . . . . . . . . 1,200 1,200
--------------- ------------------
TOTAL CURRENT LIABILITIES. . . . . . . . . . 1,517,037 1,573,384
LONG-TERM LIABILITIES
Other Liabilities. . . . . . . . . . . . . . . 2,701 2,701
Loans from Shareholders. . . . . . . . . . . . 13,000 13,000
--------------- ------------------
TOTAL LONG-TERM LIABILITIES. . . . . . . . . 15,701 15,701
--------------- ------------------
TOTAL LIABILITIES. . . . . . . . . . . . . . . . 1,532,738 1,589,085
STOCKHOLDER'S EQUITY
Common Stock . . . . . . . . . . . . . . . . . 34,691 31,361
Additional Paid-in Capital . . . . . . . . . . 2,261,516 2,056,357
Accumulated Deficit. . . . . . . . . . . . . . (3,653,768) (3,528,703)
--------------- ------------------
TOTAL STOCKHOLDER'S EQUITY . . . . . . . . . (1,357,561) (1,440,985)
--------------- ------------------
TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY 175,177 148,100
=============== ==================

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

eKnowledge Group, Inc. and Subsidiary
Consolidated Statement of Operations
For Quarters ended March 31, 2002 and 2001

(UNAUDITED) (UNAUDITED)
MARCH 31, 2002 MARCH 31, 2001
- ---------------------------------------------------------------------------------

Sales. . . . . . . . . . . . . . . . . . . . $ 119,331 $ 21,703

Cost of sales. . . . . . . . . . . . . . . . 48,608 94,990
---------------- ----------------
Gross profit . . . . . . . . . . . . . . . . 70,723 (73,287)

Selling, general and administrative expenses 195,841 267,499
---------------- ----------------
Loss before other income & provision
of taxes . . . . . . . . . . . . . . . . . (125,118) (340,786)
Interest expense . . . . . . . . . . . . . . - (86)
Interest income. . . . . . . . . . . . . . . 45 55
Other income . . . . . . . . . . . . . . . . 8 -
---------------- ----------------
Loss before provision for income taxes . . . (125,065) (340,818)
Provision for income taxes . . . . . . . . . - -
---------------- ----------------
Net loss . . . . . . . . . . . . . . . . . . (125,065) (340,818)
================ ================
Weighted average shares outstanding. . . . . 31,777,680 19,555,556
================ ================
Loss per share, basic & diluted. . . . . . . (0.00) (0.02)
================ ================

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

eKnowledge Group, Inc. and Subsidiary
Consolidated Statement of Cash Flows
For Quarters ended March 31, 2002 and 2001

(unaudited) (unaudited)
March 31, 2002 March 31, 2001
- -----------------------------------------------------------------------------------

CASH FLOWS FROM OPERATION ACTIVITIES
Net loss. . . . . . . . . . . . . . . . . . . $ (125,065) $ (340,818)
ADJUSTMENTS TO RECONCILE NET INCOME TO
NET CASH PROVIDED BY OPERATING ACTIVITIES:
Depreciation and Amortization . . . . . . . 12,917 12,917
Finance Costs 35,217 -
Stock Base Compensation 59,174 -
Accounts Receivable . . . . . . . . . . . . - (4,450)
Inventory . . . . . . . . . . . . . . . . . - 916
Prepaid Expenses. . . . . . . . . . . . . . - 1,875
Accounts Payable. . . . . . . . . . . . . . (15,104) (23,365)
Accrued Expenses. . . . . . . . . . . . . . (41,244) 16,203
Deferred Liabilities. . . . . . . . . . . . - (651)
---------------- ----------------
NET CASH PROVIDED BY OPERATIONS . . . . . (74,105) (337,372)
---------------- ----------------
CASH FLOWS FROM INVESTING ACTIVITIES
Furniture and Equipment . . . . . . . . . . - (1,913)
---------------- ----------------
NET CASH PROVIDED BY INVESTING. . . . . . - (1,913)
---------------- ----------------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds of Notes Payable . . . . . . . . . - 24,427
Advances from Shareholders. . . . . . . . . - 210,992
Net Proceeds from Sale of Common Stock. . . 114,098 75,475
---------------- ----------------
NET CASH PROVIDED BY FINANCING ACTIVITIES 114,098 310,894
---------------- ----------------

NET INCREASE IN CASH. . . . . . . . . . . . $ 39,994 $ (28,391)
================ ================

CASH BALANCE AT BEGINNING OF PERIOD . . . . . 22,744 33,889
---------------- ----------------

CASH BALANCE AT END OF PERIOD . . . . . . . . 62,738 5,498
================ ================

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

eKnowledge Group, Inc. and Subsidiary
Consolidated Statement of Stockholders' (Deficit) Equity
As of March 31, 2002

ADDITIONAL TOTAL
COMMON STOCK PAID-IN ACCUMULATED STOCKHOLDERS'
DESCRIPTION SHARES AMOUNT CAPITAL DEFICIT EQUITY
- --------------------------------------------------------------------------------------------------------------------

BALANCE, JANUARY 1, 2001. . . . . . . . 19,555,556 $ 19,556 $ 914,762 $(1,150,734) $ (216,416)

Sale of shares for cash . . . . . . . . 5,120,277 5,120 236,750 241,870
Shares issued for services. . . . . . . 5,555,597 5,556 745,732 751,288
Shares issued for expense . . . . . . . 250,000 250 44,750 45,000
Shares issued for interest. . . . . . . 880,000 880 49,520 50,400
Finance cost attributed to shares sold. 64,843 64,843

Net loss. . . . . . . . . . . . . . . . (2,377,969) (2,377,969)

BALANCE, DECEMBER 31, 2001. . . . . . . 31,361,430 31,361 2,056,357 (3,528,703) (1,440,985)

Shares issued for cash. . . . . . . . . 1,890,356 1,890 112,208 114,098
Finance costs attributed to shares sold 35,217 35,217
Shares issued for services. . . . . . . 1,439,644 1,440 57,734 59,174

Net loss. . . . . . . . . . . . . . . . (125,065) (125,065)

BALANCE, MARCH 31, 2002 . . . . . . . . 34,691,430 $ 34,691 $2,261,516 $(3,653,768) $(1,357,561)
============ ============ ========== ============ ============

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

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Operations
- ----------------------
eKnowledge Group, Inc. (the "Company") provides educational training courses
over the internet and through other media sources. The Company was incorporated
in the State of Nevada on June 1, 1999 and conducts its operations from
facilities located in Corona, California.

Interim Financial Information
- -------------------------------
The accompanying unaudited interim financial statements have been prepared by
the Company in accordance with generally accepted accounting principles pursuant
to Regulation S-B of the Securities and Exchange Commission. Certain
information and footnote disclosures normally included in audited financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted. Accordingly, these interim financial statements
should be read in conjunction with the Company"s financial statements and
related notes as contained in Form 10-KSB for the year ended December 31, 2001.
In the opinion of management, the interim financial statements reflect all
adjustments, including normal recurring adjustments, necessary for fair
presentation of the interim periods presented. The results of operations for
the three months ended March 31, 2002 are not necessarily indicative of results
of operations to be expected for the full year.

NOTE 2 - CAPITAL STOCK

The Company has entered into various agreements with third parties to market
shares of its common stock and to obtain financing. In connection with these
agreements, the Company has issued a total of 7,894,283 shares in the names of
itself and the investment bankers. The shares are either to be held as
collateral or sold to investors. As of March 31, 2002, none of these shares are
reflected as issued and outstanding in the financial statements.

On February 1, 2002, the Company registered 3,500,000 shares in a Form S-8
registration statement. The stock will be used to provide compensation to
consultants, contractors, and directors of the Company for services rendered or
to be rendered for the benefit of the Company. The common stock is not subject
to any restriction on transferability. As of March 31, 2002, 1,439,644 of these
shares had been distributed.

During the period the Company sold 1,890,356 shares for $114,098. Because the
shares sold are restricted from trading for a period of time, the shares were
sold at a discount. The discount is recorded as finance costs in the amount of
$35,217.

NOTE 3 - NON-CASH FINANCIAL ACTIVITIES

During the quarter ended March 31, 2002, the Company had the following non-cash
activities:

- - The Company issued 1,439,664 shares of common stock, valued at $236,694,
for services.

NOTE 4 - GOING CONCERN

The accompanying financial statements have been prepared in conformity with
generally accepted accounting principles, which contemplate continuation of the
Company as a going concern. However, the Company has experienced net operating
losses of $3,653,768 since inception and has a working capital deficit of
$1,449,387. These factors raise substantial doubt about the Company's ability
to continue as a going concern.

Management is continuing to pursue financial investments through private
placement equity offerings. Currently, the Company has signed agreements for
various private placements. Additionally, the Company has reached agreements
with other companies for distribution of Company material through these
companies' existing distribution channels. Finally, the Company is entering
into strategic joint venture agreements to create and distribute content,
sharing costs of development.

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

The following discussion of our financial condition and results of operations
should be read in conjunction with our Condensed Consolidated Financial
Statements and related Notes thereto included elsewhere in this Report. The
discussion in this report contains forward-looking statements that involve risks
and uncertainties. Our actual results may differ significantly from the results
discussed in the forward-looking statements.

OVERVIEW

EKNOWLEDGE IS A LEADING PROVIDER OF E-LEARNING PRODUCTS AND SERVICES, delivering
interactive multimedia training and education programs over the Internet or on
CD-ROM. The company sits on the cutting edge of technology by incorporating
streaming video into many eKnowledge designed programs.

THE EKNOWLEDGE PRODUCTS consist of e-learning programs which are available for
purchase by organizations or individuals. Products are created by either the
eKnowledge content development department, or in a joint venture with other
organizations that have subject matter experts. Joint venture products are
resold by organizations on a revenue share basis. The eKnowledge products are
in the areas of Corporate and Professional Training, Academic Programs, and
Standardized Test Preparations.

THE EKNOWLEDGE SERVICES consist of taking other organizations' training,
education, marketing, and other programs and custom building them for delivery
over the Internet or on CD-ROM. By determining the organization's objectives
and how the program will be accessed, eKnowledge custom designs the program to
include the features which will achieve the program objectives while providing
the users with the best available method of delivery.

As one of the few providers of custom designed programs featuring
video-streaming, eKnowledge handles all aspects of development which the client
requires, from video production through hosting of the final product.
eKnowledge delivers effective video or audio based solutions to all users,
regardless of their Internet connection speed. eKnowledge programs effectively
supplement or replace existing live training, while offering the organization
with the ability to track user participation and performance.

eKnowledge offers services to corporations in the areas of employee training,
product training, computer applications training, customer service, and
marketing and sales. In addition, eKnowledge has developed programs for
consultants, publishers, universities, and professional and trade associations.

EKNOWLEDGE PRODUCTS:

GOVERNMENT ESSENTIALS TRAINING
Launched in September, 2001, the Government Essentials Training provides CD-Rom
and online training programs designed specifically for local government and
other public sector employees. The first programs launched are harassment
training programs authored by Fisher & Phillips. While Fisher & Phillips will
be providing content and instructors for all litigation prevention programs,
there are plans to develop programs well beyond this subject matter into any
appropriate topics for the public sector.

The company has seen tremendous growth in the Government Essentials offering.
During the first four months, September - December 2001, 12 cities purchased the
program. From January, 2001 through March 31, 2002, more than 200 Cities,
Counties, and Transit Authorities purchased the program.

What makes the Government Essentials Training program unique is the fact that
the public sector clients offer considerable input into the course content,
design, and features. This ensures that clients are receiving programs that
deliver their desired results. It also results in a product for which there is
a strong market demand, as it is designed in part by member s of the target
market.

Existing paying clients of the Government Essentials Training:

ARIZONA - Avondale, Chino Valley, Glendale, Litchfield Park, Prescott, Prescott
Valley, Yavapai County

CALIFORNIA - Alameda, Anaheim, Bellflower, Brisbane, Buena Park, Burbank, Chino,
Chino Hills, Chula Vista, Corona, Coronado, Covina, El Cajon, Fullerton, Galt,
Half Moon Bay, Imperial Beach, La Mesa, La Mirada, La Verne, Lakewood, Monrovia,
Montebello, Moreno Valley, Newport Beach, National City, Norwalk, Redwood City,
Riverside, Roseville, San Bernardino, San Dimas, San Mateo, Santa Fe Springs,
Temecula, Torrance, Visalia, West Sacramento

GEORGIA - Alpharetta, Gainesville, Rome

NEVADA - Clark County, Henderson, Las Vegas

OREGON - Clackamas County, Gresham, League of Oregon Cities, Metro District,
Milwaukie, Multnomah County

TEXAS - Dallas, Grapevine, Lewisville

UTAH - Bluffdale, Brigham, Cache County, Cedar, Centerville, Clearfield,
Clinton, Davis County, Draper, Enterprise, Escalante, Farmington, Glenwood,
Kanab, Layton, Lindon, Mapleton, Midway, Mt. Pleasant, Murray, Ogden, Orem,
Plain City, Provo, Riverdale, Roy, Sandy City, South Jordan, Spanish Fork,
Springville, Utah Risk Management Mutual Assoc. (25 Cities), Uintah, Washington
Terrace, Weber County, West Bountiful, West Jordan, West Valley

WASHINGTON - King County, Clark County, Association of Washington Cities (157
Cities), Airway Heights, Algona, Asotin, Battle Ground, Benton City, Black
Diamond, Blaine, Bonney Lake, Brewster, Bridgeport, Brier, Buckley, Burien,
Burlington, Carnation, Cashmere, Castle Rock, Chehalis, Chelan, Cheney,
Chewelah, Clarkston, Cle Elum, Clyde Hill, Colfax, College Place, Colville,
Concrete, Connell, Cosmopolis, Coulee Dam, Coupeville, Covington, Davenport,
Dayton, Deer Park, DuPont, Duvall, East Wenatchee, Eatonville, Edgewood, Elma,
Entiat, Ephrata, Everson, Ferndale, Fife, Fircrest, Forks, Friday Harbor, Gig
Harbor, Gold Bar, Goldendale, Grand Coulee, Grandview, Granger, Granite Falls,
Ilwaco, Kalama, Kelso, Kenmore, Kettle Falls, La Center, La Conner, Lake Forest
Park, Lake Stevens, Lakewood, Langley, Leavenworth, Long Beach, Lynden, Mabton,
Maple Valley, Mattawa, McCleary, Medical Lake, Medina, Mill Creek, Millwood,
Milton, Monroe, Montesano, Morton, Mossyrock, Moxee, Mukilteo, Napavine,
Newcastle, Newport, Nooksack, Normandy Park, North Bend, North Bonneville,
Oakville, Ocean Shores, Odessa, Okanogan, Omak, Oroville, Orting, Othello,
Pacific, Palouse, Pe Ell, Pomeroy, Port Orchard, Port Townsend, Poulsbo,
Prosser, Quincy, Rainier, Raymond, Reardan, Republic, Ridgefield, Ritzville,
Roslyn, Roy, Royal City, Ruston, Sammamish, Sedro-Woolley, Selah, Sequim,
Snohomish, Snoqualmie, Soap Lake, South Bend, Stanwood, Steilacoom, Stevenson,
Sultan, Sumas, Tekoa, Tenino, Tieton, Toledo, Tonasket, Toppenish, Union Gap,
University Place, Vader, Vancouver, Waitsburg, Wapato, Warden, Washougal,
Waterville, West Richland, Westport, White Salmon, Wilbur, Winlock, Winthrop,
Woodinville, Woodland, Yelm, Zillah, Washington State Transit Insurance Pool (13
Transit Authorities), Ben Franklin Transit, Clallam Transit, Community Transit,
Grays Harbor Transit, Intercity Transit, Island Transit, Jefferson Transit,
Kitsap Transit, LINK, Pacific Transit, Mason Transit, SKAT, Whatcom Transit,
Grays Harbor Transit, Pierce Transit, C-TRAN.

The Government Essentials training programs are scheduled to expand to include
Fire Departments, Water Districts, Parks & Recreation Departments, Transit
Authorities, and Hospital Training. Content is currently being arranged to be
produced in the eKnowledge studio for delivery upon the Internet and CD-ROM's.
Depending upon funding, Sales and Marketing expansion is scheduled to being in
Third Quarter 2002.

PREVENTIONPOINT
Launched October 17, 2001, PreventionPoint (www.preventionpoint.com) is an
online Human Resources community that provides training and services geared
toward litigation prevention and risk limitation, including:

Online compliance training for managers and employees. Referrals to Preferred
HR Service Providers. These are vendors that provide preventative services,
like screening, drug testing, etc. Customizable employee handbooks, as
well as HR forms and compliance kits.

Prevention Point is a Joint Venture between eKnowledge and Fisher & Phillips, a
prestigious labor law firm established in 1943. $500,000 dollars in funding and
$500,000 in intellectual property has been committed to Prevention Point.
Additionally, Prevention Point will be marketed to the thousands of clients of
Fisher & Phillips.

In addition to the revenues that will be derived from the Company's ownership
interest of Prevention Point - the Company will derive the benefits of the
relationships the Fisher & Phillips attorneys have with their clients in
acquiring more and substantial e-learning work for eKnowledge.

WE THE PEOPLE
The company entered into a joint venture agreement with the We The People
organization to produce a website and a pay-per-view webcast for February 27 -
28, 2002. Additionally, the company secured the rights to fulfill and receive a
commission upon orders of the webcast for future delivery and sales upon
electronic transcript, CD-ROM, DVD, and video. Sales of the webcast may be
purchased from www.givemeliberty.org or www.bostonteapartyii.com
--------------------- ------------------------

SAFE SCHOOLS SERIES
Launched in September, 2001, eKnowledge owns the intellectual property to a
series of products entitled, "The Safe School Series." This series is being
developed to include 4 - 6 titles. The Safe School Series teaches students
appropriate conduct, involves parents in the process to increase accountability,
and shields schools from legal liability by documenting student participation.
Organizations such as the National Educators Association and the Red Cross are
also involved in this project.

The first in the series, "Acceptable Use Policy" (AUP) or "The Internet Driver's
License" was first marketed by our distribution partners in September, 2001.

The series is being marketed and distributed through a distribution agreement
the company has entered into with Education World. Education World currently
provides products and services to thousands of school districts nationwide.
Their website is www.educationworld.com

TEST PREPARATION
eKnowledge owns the intellectual property to 6 full service test preparation
courses and 30+ supplemental test preparation courses: SAT (2,000,000 annual
takers), ACT (1,000,000) , LSAT (100,000), GMAT (270,000), GRE (400,000), TOEIC
(2,000,000). These courses are high quality programs similar to a "live
seminar" yet intended to be delivered over the Internet via video streaming or
upon CD-ROM. To replicate the hundreds of hours of lectures and workshops, the
thousands of practice questions & explanatory answers, and the practice tests
would be in excess of $3 million dollars.

On August 3, 2001 eKnowledge Group, Inc. signed an exclusive distribution
contract for the eKnowledge HOME LSAT (Law School Admissions Test) Program with
the law fraternity, Phi Alpha Delta. The Phi Alpha Delta pre-law organization is
the largest pre-law organization in the U.S.

Our distribution partners in K - 12, Education World, will also leverage their
contacts for SAT & ACT at the high school level.

STRATEGIC ALLIANCE AGREEMENT WITH INTELLIGENT DECISIONS, INC.
On November 20, 2001 eKnowledge Group, Inc. entered into a Strategic Alliance
Agreement with Intelligent Decisions, Inc. The agreement appoints Intelligent
Decisions (ID) as a non-exclusive value-added reseller of e-learning software
and services (ESS) to Government Entities and other customers of ID.

ID is headquartered in Chantilly, Virginia, and is one of the fastest growing
systems integrators located in the Washington, DC metropolitan area. ID also
offers comprehensive consulting service capabilities including E-business
applications, network development and management, business intelligence and
advanced systems integration. ID has assumed a major role as a supplier to the
Federal Government and other customers for a variety of Information Technology
products and consulting solutions. To facilitate this capability, ID manages a
robust GSA Schedule contract and a number of Blanket Purchase Agreements with
Government Agencies as well as some Government Wide Acquisition Contracts.

A sample of U.S. agency customers include the Department of Defense, the
National Security Administration, Department of Labor, Department of Energy,
Marine Corps, Army, Department of Justice, Department of State and the Federal
Aviation Administration. Commercial customers include IBM, Remax, SRA, DynCorp,
and more. The ID website is www.intelligent.net
-------------------

E-LEARNING JOINT VENTURES
eKnowledge will enter into Joint Venture relationships where the company feels
eKnowledge can enhance a product and service offering. eKnowledge will make an
investment of time and material for an equity position in the venture. Ventures
considered typically have the following traits: A Strong Distribution Channel;
Unique Offering; Market Demand; Favorable Gross Margins; Barriers to Entry;
Quality Management; Well Funded, etc.

REVENUES are derived from contracts for services and product sales. FEES ON
CONTRACTS FOR SERVICES are determined by the length of the program being
developed, the complexity of the program features, the level of participation in
the design and content development, and any continuing service or support to be
provided. Revenues on contracts for services are generally recognized as they
are earned. REVENUES FROM PRODUCT SALES are currently recognized in their
entirety upon the sale for all products developed by the eKnowledge content
development team. Joint venture product sales where e-commerce is managed by
eKnowledge, revenues are recognized immediately. For joint venture product
sales where commerce is managed by the other organization, eKnowledge revenue
will be recognized upon a scheduled accounting of sales.

eKnowledge incurred net losses of $125,065 in the three months ending March 31,
2002, and has yet to achieve operating income or net income. The company is
negotiating financing to meet the funding required for operational and expansion
needs.

eKnowledge has experienced growth in its client base, in the amount of
intellectual property owned by the company, and in the number of joint venture
products expected to produce significant revenues. In recent filings, based
upon Prevention Point projections profitability was projected for August 2002.
This is doubtful as Prevention Point has taken longer than anticipated to
realize significant sales. We anticipate strong sales in Quarter Two, 2002, from
Prevention Point and believe it will begin to be on projections whereby the
company would start to receive our projected $400,000 annual beginning in
Quarter Three, 2002 through Quarter Two, 2003.

Due to the rapid sales success in Government Essentials the company has decided
to allocate the necessary resources to grow this offering as quickly as prudence
allows. Based upon sales and financing the company plans to expand the
Government Essentials offering and sales force beginning in Third Quarter 2002.
This expansion will have an impact upon profitability while revenues from the
expansion take time to be realized. To grow revenue and shareholder value, the
company must invest in infrastructure growth, intellectual property development,
and continued marketing, among other things. As a result, the company expects
to continue to incur annual operating losses through much of 2002.

FUNDING ANALYSIS

On April 22, 2001, eKnowledge entered into an executed agreement with H. Pester
of German concern ICCF, whereby an equity investment of $5,000,000.00 US was to
be infused in June of 2001. An extension was requested by Pester and granted
by eKnowledge. To date Pester has not fulfilled his equity investment
commitment but maintains he will honor his contract.

Additionally, the company secured an additional commitment of a timed
investment of $1,000,000 through TMG of Switzerland. This commitment has
not been fulfilled.

The company has been funded through sales of product and services and outside
equity investments.

In March of 2002 the company entered into a consulting agreement with A. G.
Spencer Corporation for global strategy consulting services. A. G. Spencer has
brought both funding opportunities and a potential merger for the company to
consider.

RESULTS OF OPERATIONS

Three Months Ended March 31, 2002 Compared to Three Months Ended March 31, 2001.

REVENUE

TOTAL REVENUE increased from $21,703 in the three months ended March 31, 2001
to $119,331 in the three months ended March 31, 2002. The increase in
revenue was attributable to Government Essentials sales and paid e-Learning work
for We The People. Neither the Government Essentials program or the work from
We The People was in existence for the company in the Three Months Ended March
31, 2001.

COST OF SALES

TOTAL COST OF SALES decreased from $94,990 in the three months ended March
31, 2001 to $48,608 in the three months ended March 31, 2001. The decreases
were attributable to a decrease in programmer staffing and the use of strategic
outsourcing.

SALES AND MARKETING

SALES AND MARKETING EXPENSES consist of sales and marketing personnel costs, as
well as travel, trade shows, public relations, and other marketing literature
and overhead. Sales and marketing expenses were $37,174 in the three months
ended March 31, 2001 and $6,327 in the three months ended March 31, 2002. The
decrease is attributable to a decrease in sales personnel, sales travel and the
attendance at fewer trade shows. The company has determined that marketing
eKnowledge products and services is better served through the current in-house
marketing strategy rather than attendance at expensive trade shows.

Sales and marketing expenses are expected to increase in absolute dollars in
the future as we continue to increase our sales and marketing efforts in
both products and services.

GENERAL AND ADMINISTRATIVE

General and administrative expenses consist primarily of salaries and other
personnel-related expenses for our administrative, executive and other
personnel. General and administrative expenses decreased from $267,499 for
the
three months ended March 31, 2001 to $195,841 in the three months ended March
31, 2002. The decrease is due to the decreased number of employees and
budget trimming brought about due to the Pester $5 million dollar commitment not
being realized. General and administrative expenses are expected to increase
in absolute dollars in the future

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, this
Form 10-Q Report for the Quarter ended March 31, 2002, has been signed below by
the following person on behalf of the Registrant and in the capacity and on the
date indicated.

/s/ Gary S. Saunders /s/Scott Hildebrandt /s/Chris DeSantis
Gary S. Saunders Scott Hildebrandt Chris DeSantis

/s/Wayne Saunders
Wayne Saunders