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<TEXT>
                     U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-KSB

                 ANNUAL REPORT UNDER SECTION 13 OR 15 (d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                     For the fiscal year ended June 30, 2001

                        Commission file number 033-25900

                           Virtual Academics.com, Inc.
                           ---------------------------
                 (Name of Small Business Issuer in its Charter)

              Delaware                                        75-2228820
--------------------------------------------------------------------------------
   (State or Other Jurisdiction of                         (I.R.S. Employer
    Incorporation or Organization)                         Identification No.)

             6421 Congress Ave, Suite 201, Boca Raton, Florida 33487
             -------------------------------------------------------
               (Address of Principal Executive Offices) (Zip Code)

                                 (561) 994-4446
                                 --------------
                           (Issuer's Telephone Number)

              Securities registered under Section 12(b) of the Act:

                                      None

         Securities registered under Section 12(g) of the Exchange Act:

                                      None

Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15 (d) of the Exchange Act during the past 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 [ ]

Check if there is no disclosure of delinquent  filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure  will be contained,  to
the best of the  registrant's  knowledge,  in  definitive  proxy or  information
statements  incorporated  by  reference  in Part III of this Form  10-KSB or any
amendment to this Form 10-KSB. [X]

State issuer's revenues for its most recent fiscal year.  $2,632,037

State the aggregate market value of the voting stock held by non-affiliates
computed by reference to the price at which the stock was sold, or the average
bid and asked prices of such common equity, as of a specified date within the
past 60 days. $5,224,371 based on a price of $1.12 per share as of September 15,
2001.

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: As of September 15, 2001, the
Registrant had 8,604,617 shares of common stock outstanding.

Documents incorporated by Reference

                  None

Transitional Small Business Disclosure Format (Check One): Yes ____; No X

<PAGE>
                                TABLE OF CONTENTS

                                                                            Page

PART I........................................................................1

    Item 1.  Description of Business..........................................1

    Item 2.  Description of Property..........................................6

    Item 3.  Legal Proceedings................................................6

    Item 4.  Submission of Matters to a Vote of Security Holders..............6

PART II.......................................................................6

    Item 5.  Market for Common Equity and Related Stockholder Matters.........6

    Item 6.  Management's Discussion and Analysis or Plan of Operation........7

    Item 7.  Financial Statements.............................................9

    Item 8.  Changes In and Disagreements With Accountants on Accounting
                   and Financial Disclosure .................................10

PART III.....................................................................10

    Item 9.  Management......................................................10

    Item 10. Executive Compensation..........................................10

    Item 11. Security Ownership of Certain Beneficial Owners and Management..12

    Item 12. Certain Relationships and Related Transactions..................12

    Item 13. Exhibits and Reports on Form 8-K................................12








                                       -i-
<PAGE>
                                     PART I


ITEM 1.  DESCRIPTION OF BUSINESS.

BACKGROUND

         Through our subsidiaries, Virtual Academics.com, Inc. (the "Company" or
"VADC") is engaged in the online distance learning industry with a focus on the
international, mid-career adult and corporate training markets. Our management
has been engaged in this business since 1993, through various predecessor
entities (the "Predecessors"). We own and operate an online distance learning
university and nutrition academy that offers licensed certificate and degree
programs in a variety of concentrations to students in over 80 countries
worldwide. We are licensed by the State Education Departments of the States of
Alabama and Florida, respectively, and recognized by the provincially run
education agencies of China. In addition to online training, we develop wireless
applications for schools and enterprise companies. The VADC international
educational portal is located at www.virtualacademics.com.

         VADC was incorporated in the State of Delaware in 1988 but had no
significant business operations until December 1999, when Steven Bettinger and
Robert Bettinger acquired approximately 66 2/3% of the outstanding common stock
of the Predecessors from a former principal stockholder. Messrs. Bettinger then
contributed their membership interests in the Predecessors to the Company, which
changed its name to Virtual Academics.com, Inc. in January 2000. Our executive
offices are located at 6421 Congress Ave, Suite 201, Boca Raton, Florida 33487
and our telephone number is (561) 994-4446.

STRATEGY

         Our goal is to strengthen our position within the rapidly growing
online distance education industry, estimated at $5.5 billion by Piper Jaffray,
who is projecting a $50 billion industry by 2005. Key components of our strategy
include:

         Marketing Relationships with Business Entities. We have realized growth
from continuing marketing relationships with businesses that reimburse employees
to take educational courses, including:

         United Postal Service;
         Chase Manhattan Bank;
         Intel;
         Lucent; and
         Chrysler Corp.

         These employees represent a small part of our current student
population, however we expect it to be a growing part of the student population
in the future.

         Typically, we provide customized distance learning educational services
through our partners or to the workforce of its partners. Frequently, our
corporate partners sponsor students by paying directly or reimbursing their
employees' educational efforts.

         Forge Strategic Alliances with State-owned Educational Institutions
Worldwide. Through alliances such as an agreement with Renmin University, Peking
University and other universities in the Peoples Republic of China, we offer
dual-degree programs online throughout various countries. We anticipate growth
through this and other initiatives in Asia. By means of an agreement with
Yacambu and Santa Maria Universities of Venezuela, we plan to expand into Latin
America.

         Expand Global Enrollment and Recruitment Program. We intend to increase
our enrollment through a team of representatives. The representatives are
currently based in areas characterized by what management believes to be a large
number of students, including:

                     Canada;
         Malaysia;
         Argentina;
         Spain;
         China;
         Japan;
         Mexico;
         Korea;
         Brazil; and
         Venezuela

         We pay each representative a referral fee for every student enrolled in
one of our courses. We intend to continue to develop relationships with
additional representatives in geographic areas where we are not currently
represented.

                                        1
<PAGE>
         Expand through Acquisition. We are currently seeking to acquire
traditional educational institutions so that we may offer their traditional
curricula online. We will consider acquisitions of carefully selected
Internet-based educational institutions. While we continually evaluate certain
acquisition opportunities, we are not currently party to any definitive
agreements.

         Provide Turnkey Wireless Solutions. Using resources obtained through
research and development and certain partnerships, our wireless division has the
ability to provide turnkey wireless services to schools and enterprise
businesses, which desire to expand their technology and presence.

MARKET

         The United States and international education market may be divided
into the following segments:

o Kindergarten through twelfth grade (and overseas counterparts) schools; o
Vocational and technical training schools; o Workplace and consumer training and
o Degree-granting colleges and universities ("Higher Education").

         We operate in the Higher Education and workplace and consumer training
segments. The U.S. Department of Education estimated that adults over 24 years
of age comprised approximately 6.1 million, or 39.3%, of the 15.5 million
students enrolled in Higher Education programs in 1998. Currently, the U.S.
Bureau of Census estimates that approximately 76% of students, over the age of
24, work while attending school. The Department of Education estimates that by
the year 2003, the number of adult students over the age of 24 will remain
approximately the same at 6.1 million, or 40.1%, of the 15.2 million students
projected to be enrolled in Higher Education programs.

         We serve the needs of mid-career, working adults, American and foreign,
by providing:

o   Convenient access to a learning environment (primarily through our website);

o   Degree programs offered by licensed institutions that can be completed in a
    reasonable amount of time for a reasonable cost;

o   Programs that provide knowledge and skills with immediate practical value in
    the workplace;

o   Education provided by qualified faculty members with current practical
    experience in fields related to the subjects they instruct; and

o   Learning resources available electronically to all students in many
    languages regardless of geographical location.

         We believe that the requirements of the adult working population
represent a significant market opportunity to Higher Education institutions that
can offer programs that meet these unique needs.

         Most colleges and universities feature a more capital-intensive
teaching and learning structure characterized by:

o   Dormitories, student unions and other significant plant assets to support
    the needs of students;

o   Fully-configured library facilities and related full-time staff;

o   A high percentage of full-time tenured faculty with doctoral degrees; and

o   An emphasis on research and the related staff and facilities.

         In addition, the majority of colleges and universities provide the bulk
of their educational programming from September to mid-December and from
mid-January to May. As a result, most full-time faculty members only teach
during that limited period of time. While this structure serves the needs of the
full-time 18 to 24 year old student, it limits the educational opportunity for
working adults who must delay their education for up to five months during these
spring, summer and winter breaks. In addition, this structure generally requires
working adults to attend one or more courses three times a week, commute to a
central site, take work time to complete course requirements and, in
undergraduate programs, participate passively in an almost exclusively
lecture-based learning format primarily focused on a theoretical presentation of
the subject matter. For the majority of working adults, earning an undergraduate
degree in this manner would take seven to ten years. In recent years, many
traditional colleges and universities have begun offering more flexible programs
for working adults, although their focus appears to remain on 18 to 24-year old
students.

                                        2
<PAGE>
VADC ENTITIES

         We own and operate several educational entities, including:

o    Virtual Academics.com - www.virtualacademics.com is a web site through
     which all of our products, services and alliances can be accessed.

o    Barrington University - Founded in 1991, Barrington is licensed by the
     State of Alabama Department of Education and offers Bachelor and Master
     degrees via the traditional and wireless Internet.

o    Academy of Health Science and Nutrition- Founded in 2001, the Academy is
     licensed by the State of Florida Department of Education and offers
     certificate training in nutrition awareness via the traditional and
     wireless Internet.

o    VADC Wireless- Founded in 2001, we have developed wireless solutions for
     universities and enterprise businesses. Applications include the Campus
     Concierge, which enables schools to create a wireless environment for their
     administration, students and beyond. Additional applications include the
     Real Estate Concierge, which enables the Real Estate professional community
     to have wireless access to multiple listing services. See
     www.vadcrealty.com.

ACADEMIC PROGRAMS

         We offer several specialty academic programs, including:

         Chinese MBA. Offered in conjunction with Renmin University, the third
largest university in the People's Republic of China, our programs are dual
degrees for business school graduate students who desire degrees from an
American university to complement their degrees from Chinese universities.

         Spanish MBA. Offered in Spanish in conjunction with Jakambu University
through Barrington University, the program awards a degree to Spanish-speaking
students who desire a degree from an American university to complement their
degrees from Spanish universities.

         Certification Programs. We offer a complete certificate-training
library for the working adult, including certification in the following areas:

         Windows 98;
         HTML 4;
         Java;
         Windows NT 4;
         Windows NT MCSE;
         Microsoft Exchange Server;
         Visual C++; and
         Visual Basic.

TEACHING MODEL

         VADC's teaching structure has the following major characteristics:

         Tuition. All of our students must pay a registration fee to cover the
costs of books, study manuals and other materials necessary for their studies.
Generally, registration fees are approximately $450 and tuition fees range from
$850 to $6,500 per program. Scholarships and discounts are available to certain
students who demonstrate financial need. Frequently, tuition qualifies as a
tax-deductible expense incurred as part of an effort to maintain or improve
job-related skills.

         Curriculum. The standardized curriculum for each program is designed to
provide students with specified levels of knowledge and skills regardless of
delivery method or location. The curriculum provides for the achievement of
specific educational goals and is designed to integrate academic theory and
professional practice with a focus on application to the workplace. Although we
are responsible for academic requirements and educational goals, students and
their employers often provide input to our faculty in designing curricula, and
class projects are typically based on issues relevant to the companies and the
human resource departments of companies that employ our students.

         Faculty. Faculty applicants must possess an earned master's degree from
an accredited institution and have a minimum of five years' professional
experience in a field related to the subject matter in which they seek to
mentor. To help promote quality delivery of the curricula, faculty members are
required to:

o        Complete an initial assessment conducted by staff and faculty;
o        Complete a series of certification workshops related to grading,
         teaching, oversight of study group activities, adult learning theory,
         and use of the Internet;
o        Participate in ongoing development activities; and
o        Receive ongoing performance evaluations by students, peer faculty and
         staff.

                                        3
<PAGE>
         The results of these evaluations are used to establish plans to improve
individual faculty performance and to determine continued eligibility of faculty
members to instruct.

         Our faculty is comprised of approximately 35 full-time and 2 part-time
persons. Most faculty members are recruited as the result of referrals from
faculty, students and corporate contacts. All part-time faculties are contracted
with on a course-by-course basis.

         Online Chat. Our students are encouraged to participate in an
interactive live-chat email center, which provides a forum for potential
candidates or students to discuss any aspect of the educational process. This
feature is available 24-hours a day, seven days a week.

         Interactive Learning. Courses are designed to combine individual and
group activity with interaction between and among students and the instructor.
The curriculum requires a high level of student participation in order to
enhance the student's ability to complete the courses.

         Learning Resources. Students and faculty members are provided with
electronic and other learning resources for their information needs. These
extensive electronic resources minimize our need for capital-intensive library
facilities and holdings.

         Low Attrition Rate. The VADC schools currently have less than a 15%
student dropout rate, compared to a rate of more than 35% at traditional
universities. We feel that our customer service and our targeted client, the
mid-career adult, are the reasons for this success.

         Academic Quality. Any student having earned a high school diploma,
General Equivalency Diploma ("GED") or international equivalent may apply to
earn any VADC certificate or enter into a bachelor's degree program. Any student
having earned a Bachelor's degree or international equivalent, or registered in
one of the VADC universities' combination Bachelor's/Master's degree programs
may apply to enter into any VADC master's degree program.

OTHER OPERATIONS

         Wireless Technologies. We recognized very early on that wireless
technology would serve as an effective agent for communication and the delivery
of information. In doing so, we have recently allocated resources to develop a
business model to best capitalize on this burgeoning technology. We have split
our wireless business into three distinct areas: wireless applications,
enterprise solutions, and wireless training. Rather than focus strictly on
proprietary wireless applications, or third-party development, we are attempting
to position ourselves as a premier end-to-end wireless solutions provider. To
meet the demands of these new markets, in the fourth quarter of fiscal 2001, we
have enhanced our operations by upgrading to carrier-grade wireless technology
and industry-leading hardware, have enhanced security measures, and have hired
qualified information technology professionals to properly design and implement
customized wireless solutions.

         We believe that the suite of services currently being developed by us
are diversified enough to meet the demands of any size client. Rather than limit
our targeted market and services to strictly mid-to-large size companies, we
have decided to offer affordable wireless services and solutions to any size
client seeking to go wireless.

         The following describes some of the main applications we are currently
developing:

         Campus Concierge - Our wireless campus solution, "Campus Concierge"
provides any size school with the wireless faculty and student services they
need. By integrating our Campus Concierge in existing systems, schools can now
increase their reach by extending services beyond campus boundaries. By simply
using their handheld wireless devices, students can access grades and syllabi,
contact professors, learn of campus events, and access course content. Faculty
and staff also may access important department information, interact with
students, and gain mobile access to their personal information. In addition, the
Campus Concierge can integrate with existing campus security and police, and
emergency services for one-touch communication, and thus increasing campus
safety.

         Real Estate Concierge- Our wireless Real Estate Concierge application
offers real-time access to the Multiple Listing Service (MLS) database for real
estate agents to use while in the field. This service allows real estate agents
to have the most current information on MLS listings without having to return to
their computer, or otherwise connect with a host database. In addition, the Real
Estate Concierge offers a client management program to organize contacts.

         Convention Concierge- We believe that the convention market is a
significant and underserved market. We are developing a working model that will
allow the convention attendee to have access to all of the exhibitors, plus
various points-of-interest in the host city-all via a wireless handheld device.
Instead on having to carry cumbersome brochures, the attendee can now access a
database with all the exhibitors and their locations. Beyond the convention
walls, the Convention Concierge provides a complete search reference and guide
to various highlights within the host city.

The wireless products discussed above are currently being developed and in the
testing stage. We currently have not generated any revenues from these products.


                                        4
<PAGE>
COMPETITION

         General. The market for online distance learning services is relatively
new, intensely competitive, rapidly evolving and subject to rapid technological
change as the market is characterized by an increasing number of entrants that
have introduced or developed products and services similar to those offered by
us. We expect competition not only to persist, but also to increase. Increased
competition may result in course price reductions, reduced margins and loss of
market share. Competitors fall into several categories, including other online
distance learning providers, traditional "snail mail" correspondence courses and
traditional universities and colleges expanding their course offerings online.
Several current and potential competitors have longer operating histories,
larger established student bases, greater name recognition, longer relationships
with students and the public and significantly greater financial, technical,
marketing and public relations resources.

        Admissions Standards. To gain admission to the undergraduate programs,
applicants must have a high school diploma or GED and satisfy certain minimum
grade point average, employment and age requirements. Additional requirements
may apply to individual programs. Students already in undergraduate programs
elsewhere may petition to be admitted on provisional status if they do not meet
certain admission requirements.

         To gain admission to the graduate programs, students must have an
undergraduate degree from an accredited college or university or international
equivalent and satisfy minimum grade point average, work experience and
employment requirements. Additional requirements may apply to individual
programs. Students in graduate programs may petition to be admitted on
provisional status if they do not meet certain admission requirements.

         Academic Accountability. We utilize an institution-wide system for the
assessment of the educational outcomes of our students. The information
generated is used to improve the quality of the curriculum, the instruction and
the teaching/learning model. Our undergraduate and graduate students complete a
comprehensive cognitive (core degree subject matter) and affective (educational,
personal and professional values) assessment prior to and upon the completion of
their core degree requirements.

         Students in our programs evaluate both academic and administrative
quality. This evaluation begins with a registration survey and continues with
the evaluation of the curriculum, faculty, delivery method, instruction and
administrative services upon the conclusion of each course. The evaluation also
includes a survey of a random selection of graduates 2-3 years following their
graduation. The results provide an ongoing basis for improving our approach to
teaching, our selection of educational programs, and our instructional quality.

CUSTOMERS

         Our customers consist of working adult students, colleges and
universities, governmental agencies and employers. The following is an
approximate breakdown of students by the level of program they are seeking, as
of September 1, 2001:

                  Programs

         Combined Bachelor's/Master's Program        12%
         Master's Degree                             46%
         Bachelor's Degree                           41%
         Certificate Level                            1%
                                              -----------------
         Total programs                             100%
                                              =================

         Based on surveys we perform, the average age of our student is 35 years
old and approximately 65% of our students are male and 35% are female.
Additionally, our average student has some college experience and averages
approximately seven years of work experience.

MARKETING

         To date, the bulk of our marketing efforts have revolved around word of
mouth efforts. We also have been advertising in USA Today, Business Week and
other traditional print publications. In addition, we market ourselves over the
Internet through techniques to increase the number of times our website is
selected by search engines.

EMPLOYEES

         As of September 1, 2001, we had approximately 15 full-time employees.
None of our employees are represented by a labor union. We have not experienced
any work stoppages and generally believe that our relationship with our
employees is good.

                                        5
<PAGE>
GOVERNMENT REGULATION

         General. With the exception of state licensing regulation described
below, we are subject to little governmental regulation other than the
securities laws and regulations applicable to all publicly owned companies and
laws and regulations applicable to businesses generally. Relatively few laws or
regulations are currently directly applicable to access to, or commerce on, the
Internet. Due to the increasing popularity and use of the Internet, it is likely
that a number of laws and regulations may be adopted at the local, state,
national or international levels with respect to the Internet. Any new
legislation could inhibit the growth in use of the Internet and decrease the
acceptance of the Internet as a communications and commercial medium, which
could in turn decrease the demand for our services or otherwise have a material
adverse effect on our future operating performance.

         Licensing. Barrington University is licensed by the State Education
Department of Alabama, which provides the basis for recognition and acceptance
by employers, other higher education institutions and governmental entities of
the degrees and credits earned by students. Barrington's license has been
accepted until June 2002.

         Accreditation. Accreditation is a system for recognizing educational
institutions and their programs for performance, integrity and quality. In the
United States, this recognition comes primarily from regional associations.
Colleges and universities depend on accreditation in evaluating transfers of
credit and applications to graduate schools. Also, certain scholarship grants
are restricted to students attending institutions accredited by certain
associations.

         Our schools are members of the International Association of
Universities and Schools, an international membership organization that is not
recognized by the United Sates Department of Education.


ITEM 2.  DESCRIPTION OF PROPERTY.

         Our corporate headquarters are located at 6421 Congress Avenue, Suite
201, Boca Raton, Florida. This facility consists of approximately 5,000 square
feet of office space, leased from a non-affiliated third party at an annual rent
of approximately $39,000. The lease expires in July 2005. Additionally, we
maintain an office in Mobile, Alabama for administrative purposes and it
consists of approximately 1,500 square feet of office space, which we lease from
a non-affiliated third party.

         Our Canadian operations maintain approximately 3,500 square feet of
space in Vancouver, British Columbia, which is paid for by our representative at
that location.

         All of the foregoing facilities are in good condition and are adequate
for currently anticipated needs. We believe that in the event that the leases
with respect to any of the aforementioned facilities should not be renewed,
alternative space will be available at comparable rates.


ITEM 3.  LEGAL PROCEEDINGS.

         We are involved in litigation in the ordinary course of our business,
which would not have a material effect on our business or results of operations.
In particular, the Trade School Review Association ("Trade School") filed a
complaint against us on July 3, 2001 in the Superior Court for the State of
California for the County of San Diego. Trade School alleges in its complaint
that we have violated the Private Postsecondary and Vocational Education Reform
Act of 1989, California's false advertising statutes, and the Consumer Legal
Remedies Act. We intend to vigorously contest the lawsuit. Inasmuch as the
lawsuit is in its preliminary stages, we cannot express an opinion as to the
likelihood of a favorable or unfavorable outcome to the litigation.


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

           None


                                        6
<PAGE>
                                     PART II


ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

         Our common stock has been traded in the over-the-counter market and
quoted on the OTC Bulletin Board under the symbol "VADC.OB" since January 4,
2000. The reported high and low sale prices for the common stock are shown below
for the periods indicated. The prices reflect inter-dealer prices, without
retail mark-up, markdown or commissions, and may not always represent actual
transactions.
                                              High ($)      Low ($)
                                              --------     -------
First Quarter  (7/1/00-9/30/00)                  3.50         1.34
Second Quarter (10/01/00-12/31/00)               2.44         0.38
Third Quarter  (1/01/01-3/31/01)                 2.72         1.19
Fourth Quarter (4/01/01-6/30/01)                 3.15         1.50

         As of September 1, 2001, there were approximately 950 record owners of
our common stock.

        We have never paid cash dividends on our common stock. We intend to keep
future earnings, if any, to finance the expansion of our business. We do not
anticipate that any cash dividends will be paid in the foreseeable future.

         During the quarter ended June 30, 2001, we issued 1,100,000 shares of
common stock to Gilder Funding Corp. to satisfy a $550,000 note receivable from
a private placement prior to going public. Such shares were issued pursuant to
the exemption from registration afforded by Section 4(2) of the Securities Act
of 1933,as amended.


ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS.

GENERAL

         The following discussion and analysis should be read in conjunction
with the financial statements appearing elsewhere in this report. These
financial statements reflect our consolidated financial position and operations
for the fiscal year ended June 30, 2001 ("Fiscal 2001").

         This report, including the following discussions and analysis, may
contain forward-looking statements. These statements consist of any statement
other than a recitation of historical fact and can be identified by the use of
forward-looking terminology such as "may," "expect", "anticipate," estimate" or
"continue" or the negative or other variations of these words or comparable
terminology. The reader is cautioned that all forward-looking statements are
necessarily speculative and there are certain risks and uncertainties that could
cause actual events or results to differ materially from those referred to in
any forward-looking statements. We do not have a policy of updating
forward-looking statements and thus it should not be assumed that silence over
time means that actual events are bearing out as we estimated in any
forward-looking statements.

         Through our subsidiaries, we are engaged in the online distance
learning business with a focus on the international, second-career adult and
corporate training markets. We currently operate our main school, Barrington
University, from Mobile, Alabama, where the State of Alabama Department of
Education, Code of Alabama, Title 16-46-1 through 10, licenses the school. We
offer degrees and training programs to students in over 80 countries and in
multiple languages. The programs are "virtual" in their delivery format and can
be completed from a laptop, home computer or through a wireless device.

         Our branch school in China, Wuhan Barrington College, was approved by
the Hubei Province  Education  Department on November 3, 2000 - File [2000]#115.
This Wuhan  Barrington  College is licensed in cooperation  with the Hubei Union
University,  which now has over 2,000 students.  We also have established a dual
degree program with the  Universidad  Yacambu of Lara Venezuela to offer Spanish
language degree  programs.  With this agreement,  we will now have  governmental
approved  curriculum in Spanish to market to the global Hispanic  community.  In
addition to degree completion  programs,  we are focusing on training  corporate
personnel,  continuing  education  (CE)  courses  and  wireless  technology  for
education, which we believe is a major growth area.

         Additionally, we are currently developing affordable wireless platforms
to provide companies with quality training services for their employees. Our
staff will work directly with human resource departments to ensure the training
is scalable and applicable to their employees' needs. We will enable our
Wireless Application Protocol (WAP) technology to provide seamless information
to all employees, regardless if they are at home, in the office or out in the
field. Through a pilot program, we are currently offering a limited number of
our business courses through the wireless Palm Pilot and other WAP enabled
equipment. This technology will provide students the means to post messages,
communicate with instructors and fellow students, complete exams, and to review
syllabi and grades.

         We have received full licensure from the Alabama Department of
Education for Barrington University, which is owned by Virtual Academics.com,
Inc.

                                        7
<PAGE>
SEASONALITY IN RESULTS OF OPERATIONS

         We experience seasonality in our results of operations primarily as a
result of changes in the level of student enrollments and course completion.
While we enroll students throughout the year, average enrollments and course
completion and related revenues generally are lower in December and January than
in other quarters due to seasonal breaks in December and January. Accordingly,
costs and expenses historically increase as a percentage of tuition and other
net revenues as a result of certain fixed costs not significantly affected by
the seasonal second quarter declines in net revenues.

         We experience a seasonal increase in new enrollments in August of each
year when most other colleges and universities begin their fall semesters. As a
result, instructional costs and services and selling and promotional expenses
historically increase as a percentage of tuition and other net revenues in the
fourth quarter due to increased costs in preparation for the August peak
enrollments.

         We anticipate that these seasonal trends in the second and fourth
quarters will continue in the future.


RESULTS OF OPERATIONS

Year Ended June 30, 2001 compared to Year Ended June 30, 2000

Revenues

          For Fiscal 2001, we had a 128.7% increase in earned revenues to
$2,632,037 from $1,150,664 for the fiscal year ended June 30, 2000("Fiscal
2000"). The increase in revenues is due primarily to an increase in the number
of students that have been registered. Substantial increases in revenue and
profitability can be achieved through modest improvements in student course
completion rates. Unearned revenue represents the portion of tuition revenue
invoiced but not earned and is reflected as a liability in the accompanying
consolidated balance sheets. Since we will recognize tuition and registration
revenue based on the number of courses actually completed in each student's
course of study, student course completion efforts, if successful, are extremely
beneficial to operating results. School personnel typically employ an approach
based upon establishing personal relationships with students; for example,
students may receive a telephone call from a school counselor if they have not
completed courses. Our operating results may be impacted negatively by the
registration of new students because we incur costs to enroll students but
registration fees are initially deferred and then recognized with tuition over
the course of the study period, under the guidelines of SEC Staff Accounting
Bulletin 101.

For the year ended June 30, 2001, unearned revenues' activity consisted of the
following:


         Unearned revenue at the beginning of Fiscal 2001:       $    1,444,665
         Tuition from students during Fiscal 2001:                    4,438,969
         Earned revenue:                                             (2,632,037)
                                                                 ---------------

        Unearned revenue at the end of Fiscal 2001:              $    3,251,597
                                                                 ===============


Instruction and Educational Support

         Instruction and educational support expenses consist primarily of
student supplies such as textbooks as well as postage and shipping, credit card
fees, computer related expenses, and printing fees. For fiscal 2001,
instructional and educational support expenses increased by 66% to $423,951 or
16% of net revenues as compared to $254,832 or 22% of net revenues fiscal 2000.
The increase in instructional and educational support expenses was attributable
to the increased cost of postage and delivery incurred for shipping books and
supplies to our foreign students and increased credit card fees due to the fact
that we encourage students to join our tuition payment program whereby students
pay monthly by credit card. Instructional and educational support expenses
decreased as a percentage of net revenue due to the fact that computer-related
expenses remained relatively stable in relation to the increase in net revenues.


                                        8
<PAGE>
Selling and Promotion

         Selling and promotion expense consists primarily of recruiting fees and
advertising. For fiscal 2001, selling and promotion expenses increased by 14% to
$426,831 or 16% of net revenues as compared to $374,943 or 32% of net revenues
for fiscal 2000. The increase in selling and promotion expenses is attributable
to our increased advertising efforts. For fiscal 2001, advertising expense
amounted to approximately $218,300 as compared to $59,500 for fiscal 2000.
Additionally, our recruiting fees decreased to $163,458 for fiscal 2001 from
$216,300 for fiscal 2000. The decrease is attributable to our decreased use of
recruiters to obtain students. The decrease in selling costs as a percentage of
revenue is due to the increased level of sales. Although we are currently
running advertisements in various national publications and newspapers in order
to attract more students, we expect our advertising budget to remain constant
through the end of fiscal 2002.

General and Administrative Expenses

         General and administrative expenses, which includes payroll,
professional fees, rent, travel and entertainment, insurance, bad debt, and
other expenses, were $1,666,621 for fiscal 2001 as compared to $942,598 for
fiscal 2000. This amounted to 63% of net revenues for fiscal 2001 as compared to
82% for fiscal 2000. The increase was primarily due to three factors:

         First, personnel-related costs increased by 135% to $596,123 for fiscal
2001 from $280,345 for the fiscal 2000. This reflected a growth in the number of
employees from five at June 30, 2000 to 15 at June 30, 2001 as a result of the
growth that we are experiencing. Our staffing increases were needed to handle
student relations, develop new programs, and perform administrative tasks and to
develop our wireless technologies. Second, due to continuing analysis of our
tuition receivables, we incurred bad debt expense of $448,481 for fiscal 2001 as
compared to $43,764 for fiscal 2000.

Interest Income

Interest income was $93,451 for fiscal 2001 as compared to $7,031 for fiscal
2000. In connection with the collection of the $550,000 promissory note related
to the private placement, we collected approximately $54,000 of interest income.
We currently invest our excess cash balances in primarily two interest-bearing
accounts with two financial institutions.

As a result of the foregoing factors, we recognized net income of $322,766 or
$.04 per share for fiscal 2001 as compared to a net loss of $(408,546) or $(.06)
per share for fiscal 2000.

LIQUIDITY AND CAPITAL RESOURCES

         As of June 30, 2001, we had $1,775,206 in cash and equivalents on hand
to meet our obligations, which represented an increase of $1,309,523 from the
beginning of Fiscal 2001.

         In February 2000, the Company consummated a private placement to an
investor of 2,200,000 shares of common stock. This private placement raised a
total of $990,000. Of the 2,200,000 shares sold, 1,100,000 shares were sold for
$440,000 in cash and the balance of the shares were sold for a $500,000, 7%
unsecured promissory note, which was paid in June 2001. All of the funds from
this private placement will be used as working capital.

         For fiscal 2001 and 2000, we had a positive cash flow from operating
activities of $820,818 and $115,932, respectively. We expect that our operations
will continue to provide positive cash flows.

         We feel that with continued positive cash flow, we are well capitalized
to fund our operations over the ensuing 12-month period, including the expected
growth during this period.

RECENT ACCOUNTING PRONOUNCEMENTS

         In June 2001, the Financial Accounting Standards Board issued
Statements of Financial Accounting Standards No. 141, Business Combinations, and
No. 142, Goodwill and Other Intangible Assets (the "Statements"). Statement No.
141 is effective for all business combinations initiated after June 30, 2001,
while Statement No. 142 is effective for fiscal years beginning after December
15, 2001. Under the new rules, goodwill and intangible assets deemed to have
indefinite lives will no longer be amortized but will be subject to annual
impairment tests in accordance with the Statements. Other intangible assets will
continue to be amortized over their useful lives. The Company will apply the new
rules on accounting for goodwill and other intangible assets beginning in the
first quarter of 2002. Application of the non-amortization provisions of
Statement No. 142 are not expected to have a material effect on the Company's
financial position or results of operations.

In December 1999, the Securities and Exchange Commission released Staff
Accounting Bulletin No. 101 ("SAB 101"), Revenue Recognition in Financial
Statements, which was adopted in fiscal 2001. SAB 101 did not have a material
effect on our financial position or results of operations in fiscal 2001.

ITEM 7.  FINANCIAL STATEMENTS

         The financial statements required by this report are included,
commencing on page F-1.

                                        9
<PAGE>
                  Virtual Academics.com, Inc. and Subsidiaries

                        CONSOLIDATED FINANCIAL STATEMENTS

                                  June 30, 2001



                                    CONTENTS



Report of Independent Certified Public Accountants..........................F-2

Consolidated Financial Statements:

Consolidated Balance Sheets.................................................F-3

Consolidated Statements of Operations.......................................F-4

Consolidated Statement of Changes in Stockholders' Equity...................F-5

Consolidated Statements of Cash Flows.......................................F-6

Notes to Consolidated Financial Statements..........................F-7 to F-16
















                                      F - 1
<PAGE>
                              REPORT OF INDEPENDENT
                          CERTIFIED PUBLIC ACCOUNTANTS



Board of Directors
Virtual Academics.com, Inc.

We have audited the accompanying consolidated balance sheet of Virtual
Academics.com, Inc. and Subsidiaries (the "Company") as of June 30, 2001 and
2000 and the related consolidated statements of operations, stockholders' equity
and cash flows for the two years then ended. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Virtual
Academics.com, Inc. and Subsidiaries at June 30, 2001 and 2000, and the
consolidated results of their operations and their consolidated cash flows for
the two years ended June 30, 2001, in conformity with accounting principles
generally accepted in the United States of America.


/s/ Grant Thornton LLP
Miami, Florida
August 17, 2001















                                      F-2
<PAGE>
<TABLE>
<CAPTION>
                           VIRTUAL ACADEMICS.COM, INC. AND SUBSIDIARIES
                                   CONSOLIDATED BALANCE SHEETS


                                ASSETS
                                                                         June 30       June 30,
                                                                           2001          2000
                                                                       -------------  ------------
CURRENT ASSETS:
<S>                                                                    <C>            <C>
    Cash and Cash Equivalents                                          $  1,775,206   $   465,683
    Tuition Receivable (Net of Allowance for Doubtful Accounts
             of $193,000 and $72,000, respectively)                       2,119,182       958,438
    Prepaid Recruiting Fees                                                 145,018        90,835
    Other Prepaid Expenses                                                   25,830        47,859
                                                                       -------------  ------------

        Total Current Assets                                              4,065,236     1,562,815
                                                                       -------------  ------------

PROPERTY AND EQUIPMENT:
    Computer Equipment and Software                                          69,274        22,577
    Furniture, Fixtures and Office Equipment                                 46,932        35,386
    Leasehold Improvements                                                    3,051             -
                                                                       -------------  ------------
                                                                            119,258        57,963

    Less: Accumulated Depreciation                                          (32,647)      (16,033)
                                                                       -------------  ------------

        Total Property and Equipment                                         86,611        41,930
                                                                       -------------  ------------

OTHER ASSETS:
    Tuition Receivable (Net of Allowance for Doubtful Accounts
            of $172,000 and $28,000, respectively)                          379,921       277,371
    Prepaid Recruiting Fees                                                  16,511        45,285
    Deferred Tax Asset                                                      114,681             -
    Security Deposits                                                         7,941         7,032
                                                                       -------------  ------------

        Total Other Assets                                                  519,054       329,688
                                                                       -------------  ------------

        Total Assets                                                   $ 4,670,901    $ 1,934,433
                                                                       =============  ============

                       LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
    Accounts Payable                                                   $     15,392   $     9,069
    Unearned Revenues                                                     2,914,678     1,023,136
    Accrued Recruiting Fees                                                  89,318        99,406
    Other Accrued Expenses                                                  137,874       132,574
                                                                       -------------  ------------

        Total Current Liabilities                                         3,157,262     1,264,185
                                                                       -------------  ------------

NON-CURRENT LIABILITIES:
    Unearned Revenues                                                       336,919       421,529
    Accrued Recruiting Fees                                                  19,286        38,977
                                                                       -------------  ------------

        Total Non-Current Liabilities                                       356,205       460,506
                                                                       -------------  ------------

        Total Liabilities                                                 3,513,467     1,724,691
                                                                       -------------  ------------

STOCKHOLDERS' EQUITY:
    Preferred Stock ($.001 Par Value; 1,000,000 Shares Authorized)
          No Shares Issued and Outstanding )                                      -             -
    Common Stock ($.001 Par Value; 11,000,000 Shares Authorized;
     8,604,617 and 7,483,233 Shares Issued and Outstanding,
     respectively)                                                            8,604         7,483
    Additional Paid-in Capital                                            1,346,944     1,273,140
    Note Receivable from Subscription                                             -      (550,000)
    Accumulated Deficit                                                    (198,115)     (520,881)
                                                                       -------------  ------------

        Total Stockholders' Equity                                        1,157,433       209,742
                                                                       -------------  ------------

        Total Liabilities and Stockholders' Equity                     $  4,670,901   $ 1,934,433
                                                                       =============  ============


        The accompanying notes are an integral part of these consolidated financial statements
                                                 F-3
</TABLE>
<PAGE>
<TABLE>
<CAPTION>

                               VIRTUAL ACADEMICS.COM, INC. AND SUBSIDIARIES
                                  CONSOLIDATED STATEMENTS OF OPERATIONS




                                                                                     For the year ended
                                                                                           June 30
                                                                            -------------------------------------
                                                                                   2001                2000
                                                                            ------------------  -----------------


<S>                                                                         <C>                 <C>
NET REVENUES                                                                $       2,632,037   $      1,150,664
                                                                            ------------------  -----------------

COSTS AND EXPENSES:
    Instructional and Educational Support                                             423,951            254,832
    Selling and Promotion                                                             426,831            374,943
    General and Administrative                                                      1,666,621            942,598
                                                                            ------------------  -----------------

        Total Operating Expenses                                                    2,517,403          1,572,373
                                                                            ------------------  -----------------

INCOME (LOSS) FROM OPERATIONS                                                         114,634           (421,709)

OTHER INCOME:
    Interest Income                                                                    93,451              7,031
                                                                            ------------------  -----------------

INCOME BEFORE INCOME TAXES                                                            208,085           (414,678)

INCOME TAX BENEFIT                                                                   (114,681)            (6,132)
                                                                            ------------------  -----------------

NET INCOME (LOSS)                                                           $         322,766   $       (408,546)
                                                                            ==================  =================

BASIC AND DILUTED:
      Net Income (loss) Per Common Share:                                   $            0.04   $          (0.06)
                                                                            ==================  =================

      Weighted Common Shares Outstanding                                            7,786,459          6,804,506
                                                                            ==================  =================












            The accompanying notes are an integral part of these consolidated financial statements
                                                     F-4
</TABLE>
<PAGE>
<TABLE>
<CAPTION>

                                                VIRTUAL ACADEMICS.COM, INC. AND SUBSIDIARIES
                                       CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
                                                   For the year ended June 30, 2001





                                                                                               NOTE
                                                                                            RECEIVABLE
                                                    COMMON STOCK $.001 Par    ADDITIONAL       FROM                       TOTAL
                                                   ------------------------    PAID-IN       ISSUANCE   ACCUMULATED    STOCKHOLDERS'
                                                       Shares      Amount      CAPITAL       OF STOCK     DEFICIT         EQUITY
                                                   ------------ -----------  ------------  -----------  ------------  --------------

<S>                                                <C>          <C>          <C>           <C>          <C>           <C>
Balance at June 30, 1998                               746,660  $      746   $         -   $        -   $   (28,978)  $     (28,232)

Net Income                                                   -           -             -            -       182,766         182,766

Distributions                                                -           -             -            -      (150,292)       (150,292)
                                                   ------------ -----------  ------------  -----------  ------------  --------------

Balance at December 31,1999                            746,660         746             -            -         3,496           4,242

Net Income to December 8, 1999                               -           -             -            -       112,335         112,335

Distributions                                                -           -             -            -       (88,250)        (88,250)

Adjustments for Reverse Merger                       5,600,073       5,600        37,902            -       (27,581)         15,921
                                                   ------------ -----------  ------------  -----------  ------------  --------------

Balace at December 8, 1999                           6,346,733       6,346        37,902            -             -          44,248

Net Loss from December 9, 1999 to June 30, 2000              -           -             -            -      (520,881)       (520,881)

Issuance of Stock as Compensation to Consultants        36,500          37       246,338            -             -         246,375

Sale of Stock                                        1,100,000       1,100       438,900            -             -         440,000

Stock Subscribed for                                         -           -       550,000     (550,000)            -               -
                                                   ------------ -----------  ------------  -----------  ------------  --------------

Balance at June 30, 2000                             7,483,233       7,483     1,273,140     (550,000)     (520,881)        209,742

Net Income                                                   -           -             -            -       322,766         322,766

Issuance of Stock Options as Compensation to
  Consultants                                                -           -        17,820            -             -          17,820

Payment of Subscription Receivable                   1,100,000       1,100        (1,100)     550,000                       550,000

Issuance of Stock for Services                           1,000           1         1,799                                      1,800

Issuance of Stock as Compensation to Consultants        20,384          20        55,285            -             -          55,305
                                                   ------------ -----------  ------------  -----------  ------------  --------------

Balance at June 30, 2001                             8,604,617  $    8,604   $ 1,346,944   $        -   $  (198,115)  $   1,157,433
                                                   ============ ===========  ============  ===========  ============  ==============




                           The accompanying notes are an integral part of these consolidated financial statements
                                                                   F-5
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                                              VIRTUAL ACADEMICS.COM, INC.
                                        CONSOLIDATED STATEMENTS OF CASH FLOWS



                                                                                      For the year ended June 30
                                                                               -----------------------------------------
                                                                                     2001                  2000
                                                                               -----------------   ---------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
<S>                                                                            <C>                 <C>
    Net Income                                                                 $        322,766    $           (408,546)
    Adjustments to Reconcile Net Income to Net Cash Flows
        Provided by Operating Activities:
           Depreciation                                                                  16,614                   7,587
           Consulting Expense on Common Stock Issued to Non-employees                    55,305                 246,375
           Consulting Expense on Stock Options Issued to Non-employees                   17,820                       -
           Expense associated on Common Stock Issued to Non-employees                     1,800                       -

           (Increase) Decrease in:
             Tuition Receivable                                                      (1,160,744)               (401,897)
             Prepaid Recruiting Fees                                                    (54,183)                 53,568
             Other Prepaid Expenses                                                      22,029                 (47,859)
           Other Assets:
             Tuition Receivable Non Current                                            (102,550)               (138,236)
             Prepaid Recruiting Fees Non Current                                         28,774                 (30,974)
             Deferred Tax Asset                                                        (114,681)                      -
             Security Deposits                                                             (909)                 (2,632)

           Increase (Decrease) in:
              Accounts Payable                                                            6,324                  (8,190)
              Unearned Revenues                                                       1,891,542                 384,749
              Accrued Recruiting Fees                                                   (10,088)                (26,484)
              Income Taxes Payable                                                            -                  (4,427)
              Other Accrued Expenses                                                      5,300                 127,132
         Other Liablities:
              Unearned Revenues Non Current                                             (84,610)                358,261
              Accrued Recruting Fees Non Current                                        (19,691)                  7,505
                                                                               -----------------   ---------------------

Net Cash Flows Provided by Operating Activities                                         820,818                 115,932
                                                                               -----------------   ---------------------

CASH FLOWS FROM INVESTING ACTIVITIES:
    Acquisition of Property and Equipment                                               (61,295)                (27,642)
                                                                               -----------------   ---------------------

Net Cash Flows Used in Investing Activities                                             (61,295)                (27,642)
                                                                               -----------------   ---------------------

CASH FLOWS FROM FINANCING ACTIVITIES:
    Proceeds from Issuance of Common Stock                                                    -                 440,000
    Proceeds from the Note Recievable                                                   550,000
    Adjustments made pursruant to the reverse merger                                          -                  15,921
    Distribution to Members prior to Merger                                                   -                 (88,250)
                                                                               -----------------   ---------------------

Net Cash Flows Provided by Financing Activities                                         550,000                 367,671
                                                                               -----------------   ---------------------

Net Increase in Cash and Cash Equivalents                                             1,309,523                 455,961

Cash and Cash Equivalents - Beginning of Period                                         465,683                   9,722
                                                                               -----------------   ---------------------

Cash and Cash Equivalents - End of Period                                      $      1,775,206    $            465,683
                                                                               =================   =====================

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:

Cash paid during the year for:
   Interest                                                                    $              -    $                 29
                                                                               =================   =====================
   Income Taxes                                                                $              -    $                  -
                                                                               =================   =====================

                   The accompanying notes are an integral part of these consolidated financial statements
                                                                F-6
</TABLE>
<PAGE>
                  Virtual Academics.com, Inc. and Subsidiaries
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  June 30, 2001



NOTE A - OWNERSHIP AND OPERATIONS

   Virtual Academics.com, Inc. (the "Company") is engaged in distance learning
   through its subsidiaries to provide Internet education to students throughout
   the world. The business is conducted under the names of Barrington University
   (the "School") and Virtual Academics.com, Inc.

    The International Association of Universities and Schools and the Global
   Accreditation Association accredits the School; the Alabama Department of
   Education licenses the School. The Company's administrative and sales office
   is located in Boca Raton, Florida. There are also arrangements with several
   international universities that confer dual degrees with the School whereas,
   based on the School's approval of the curriculum, a degree will be issued by
   the School upon completion of the students' studies at an international
   university. The Company caters to a wide variety of students.

   On December 8, 1999, Steve Bettinger and Robert Bettinger (the "Bettingers")
   acquired 4,200,000 shares of Donnebrooke Corp. from a principal stockholder.
   After the purchase of these shares, Donnebrooke Corp. had 6,346,733 shares
   outstanding. Accordingly, the Bettingers owned approximately 66% of
   Donnebrooke Corp.'s outstanding common shares after the purchase. In
   connection with the purchase of Donnebrooke Corp.'s shares, the Bettingers,
   also owners of International Educational Group, LLC, and its subsidiaries,
   Barrington University, Inc., an Alabama Corporation, and Spanish University
   of America Foundation, Inc., transferred their interests in these companies
   to Donnebrooke Corp. Donnebrooke Corp. then changed its name to Virtual
   Academics.com, Inc.

   Since Donnebrooke was inactive and had no operations at the time of these
   transactions, for accounting purposes the acquisitions of the Bettingers'
   entities were accounted for as a reverse merger and recapitalization.
   Therefore, the financial statements of the Company reflect the assets,
   liabilities and operations of the Bettingers' entities as if they had been
   the reporting entity since inception.

NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

   Basis of Presentation

   The consolidated financial statements include the accounts of the Company and
   its subsidiaries, all of which are wholly owned. All significant intercompany
   accounts and transactions have been eliminated.


                                   (continued)

                                       F-7
<PAGE>
                  Virtual Academics.com, Inc. and Subsidiaries
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                                  June 30, 2001

NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued

   Management Estimates

   The preparation of these financial statements in conformity with accounting
   principles generally accepted in the United States of America requires
   management to make estimates and assumptions that affect the reported amounts
   of assets and liabilities and disclosure of contingent assets and liabilities
   at the date of the financial statements and the reported amounts of revenues
   and expenses during the reported period. Examples are the provision for
   doubtful accounts, unearned revenue, and prepaid and accrued recruiting fees.
   Actual results could differ from those estimates.

   Cash and Cash Equivalents

         For purposes of the statement of cash flows, the Company considers all
   highly liquid instruments purchased with a maturity of three months or less
   and money market accounts to be cash equivalents.

   Fair Value of Financial Instruments

   The carrying value of cash and cash equivalents, tuition receivables and
   accounts payable approximate fair value due to the short term maturities of
   these instruments.

   Property and Equipment

   Property and equipment are stated at cost. Depreciation and amortization are
   provided using the straight-line method over the estimated economic lives of
   the assets, which are from five to seven years. Depreciation expense was
   approximately $16,620 and $7,600 for the years ended June 30, 2001 and 2000,
   respectively.

   Expenditures for major renewals and betterments that extend the useful lives
   of property and equipment are capitalized. Expenditures for maintenance and
   repairs are charged to expense as incurred.

   Stock-based Compensation

   Options granted under the Company's Performance Equity Plan are accounted for
   under APB 25, "Accounting for Stock Issued to Employees", and related
   interpretations. The Company's policy is to grant options with an exercise
   price equal to the quoted market price of its stock on the grant date.
   Accordingly, no compensation cost is recognized for those options granted.
   Stock issued in lieu of compensation is valued at the fair market value of
   the stock at the date of issuance.


                                   (continued)
                                       F-8
<PAGE>
                  Virtual Academics.com, Inc. and Subsidiaries
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                                  June 30, 2001



NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued

   Revenue Recognition

   The school's curriculum is designed to allow a student to earn a degree or
   certificate by self-study. Each student, upon registration, is given an
   identification number and a password to begin his/her studies. Enrollment is
   completed upon the receipt of an initial payment at which time all of the
   course materials, which include core textbooks, are delivered to the student.
   The school offers a variety of degree and certificate programs and students
   are requested to complete payment within one year of enrollment, but two-year
   payment plans are offered upon request. All payment plans are without
   interest. Degrees are not conferred if a student has not fully paid.

   Through September 2000, revenue was recognized as earned as the student
   completed his or her course of study. A 24-month period was used as the
   estimated time period for the average degree completion, and revenue was
   recognized on the straight-line method over this 24-month period. Revenue
   earned from students participating in dual degree programs with foreign
   universities was recognized when the degree was issued upon graduation.

   The Company has developed a new database of student activity, which allows it
   to more easily and accurately track student data including student progress
   on a course-by-course basis. Accordingly, the Company changed its method of
   calculating revenue to be recognized each quarter. For students registering
   on or after October 1, 2000, the Company recognizes tuition and registration
   revenue based on the number of courses actually completed in each student's
   course of study. For example, if a student completes three out of his or her
   nine required courses, the Company will recognize 33% of the tuition
   regardless of the amount of time that the student has taken to fulfill these
   requirements. The Company will utilize the previous method for all students
   registered prior to October 1, 2000. The change in accounting method did not
   have a material effect on the consolidated financial statements.

   In fiscal 2001 and 2000, one recruiter's recruiting efforts accounted for
   approximately 20% and 25% of the Company's total revenues, respectively.

   Tuition Receivable

   The Company, in the ordinary course of business finances the tuition, without
   interest, over a period of up to twenty-four months. Because a significant
   part of the tuition is deferred, the Company does not impute interest with
   respect to receivables that mature in more than one year.



                                   (continued)
                                       F-9
<PAGE>
                  Virtual Academics.com, Inc. and Subsidiaries
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                                  June 30, 2001

NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued

   Tuition Receivable - Continued

   Tuition receivables are stated at the amount of unpaid principal, reduced by
   an allowance for loan losses. Provisions for estimated losses on student
   loans are charged to income in amounts sufficient to maintain the allowance
   at a level considered adequate to cover the losses of tuition receivables
   based upon historical trends, economic conditions and other information. In
   the fourth quarter of fiscal 2001 and 2000, the Company increased the
   provision for estimated losses on student loans by approximately $56,000 and
   $38,000, respectively.

   Recruiting Fees

   Students learn about the School via the Internet or are recruited through a
   worldwide network of recruiters. Recruiters are paid upon receipt of tuition
   payment by the student. Recruiting fees are accrued for the tuition due the
   Company, and prepaid for the revenue that has been deferred. The Company
   amortizes recruiting fees using the same method as the Company recognizes the
   related tuition revenue.

   Research and Development

   All costs incurred for research and development are expensed. These costs
   were insignificant in both fiscal 2001 and 2000.

   Instruction and Education Support

   Instruction and educational support consists of supplies such as textbooks
   to students, computer software and Internet expenses.

   Advertising

   Advertising is expensed as incurred. Advertising expenses for the years ended
   June 30, 2001 and 2000 totaled $217,675 and $59,506, respectively.

   Income Taxes

   Deferred tax assets and liabilities are recorded based on the difference
   between the tax basis of assets and liabilities and their carrying amounts
   for financial reporting purposes. In addition, the current or deferred tax
   consequences of a transaction are measured by applying the provisions of
   enacted tax laws to determine the amounts of taxes payable currently or in
   future years.

                                   (continued)
                                      F-10
<PAGE>
                  Virtual Academics.com, Inc. and Subsidiaries
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                                  June 30, 2001

   Computer Software

   The Company accounts for the costs of computer software developed or obtained
   for internal use in accordance with Statement of Position 98-1, "Accounting
   for the Costs of Computer Software Developed or Obtained for Internal Use".
   The Company capitalized software development costs amounting to $12,000.
   Computer software costs are recorded at cost and are being amortized using
   the straight-line method over five years.

   Earnings Per Share

   Basic net earnings per share equals net earnings (loss) divided by the
   weighted average shares outstanding during the year. The computation of
   diluted net earnings per share does not include dilutive common stock
   equivalents in the weighted average shares outstanding as they would be
   antidilutive in 2000. The reconciliation between the computations is as
   follows:

                       Net (Loss) Income    Basic Shares      Basic EPS
                       -----------------  --------------   -------------
         2001            $    322,766       7,532,576      $      .04
         2000            $   (408,546)      6,804,506      $     (.06)

   Not included in basic shares are the weighted average common stock
   equivalents of 457,500 because they are anti-dilutive in 2000.

   Recent Accounting Pronouncements

   In June 2001, the Financial Accounting Standards Board issued Statements of
   Financial Accounting Standards No. 141, Business Combinations, and No. 142,
   Goodwill and Other Intangible Assets. Statement No. 141 is effective for all
   business combinations initiated after June 30, 2001, while Statement No. 142
   is effective for fiscal years beginning after December 15, 2001. Under the
   new rules, goodwill and intangible assets deemed to have indefinite lives
   will no longer be amortized but will be subject to annual impairment tests in
   accordance with the Statements. Other intangible assets will continue to be
   amortized over their useful lives. The Company will apply the new rules on
   accounting for goodwill and other intangible assets beginning in the first
   quarter of 2002. Application of the non-amortization provisions of the
   Statement are not expected to have a material effect on the Company's
   financial position or results of operations.

   In December 1999, the Securities and Exchange Commission released Staff
   Accounting Bulletin No. 101 ("SAB 101"), Revenue Recognition in Financial
   Statements, which was adopted in fiscal 2001. SAB 101 did not have a material
   effect on the Company's financial position or results of operations in fiscal
   2001.

   Reclassifications

   Certain 2000 amounts have been reclassified to conform to the 2001
   presentation.

                                   (continued)
                                      F-11
<PAGE>
                  Virtual Academics.com, Inc. and Subsidiaries
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                                  June 30, 2001



NOTE C - COMMITMENTS AND CONTINGENCIES

   Employment Agreements

   The Company has entered into employment agreements with two of its executive
   officers for a 24-month period ending January 1, 2003, subject to automatic
   renewals of 12-month terms unless terminated by the Company or the employee
   with 30-days' prior written notice.

   In addition to an annual salary of $220,000 and $85,000 for the President and
   Chief Executive Officer and the Chairman of the Board and Secretary,
   respectively, the agreements entitle the officers to receive options to
   purchase 100,000 shares of common stock of the Company each year of
   employment at fair market value. These options, a total of 200,000 options
   each for fiscal 2001 and 2000, were issued under the Company's stock option
   plan (see Note D). These options vest 1/3 per year, beginning one year from
   the date of grant. The agreements also provide for the receipt of an annual
   bonus at the discretion of the Board of Directors.

   Leases

   The Company leases its Florida and Alabama offices under leases that expire
   through fiscal 2006. The office lease agreements have certain escalation
   clauses and renewal options. Future minimum rental payments required under
   this operating lease is as follows:

                   Period Ended June 30, 2002            $ 60,658
                   Period Ended June 30, 2003              38,698
                   Period Ended June 30, 2004              31,950
                   Period Ended June 30, 2005              33,228
                   Period Ended June 30, 2006               2,880

Rent expense for the twelve-month periods ended June 30, 2001 and 2000 was
$50,638 and $51,722, respectively.

Capital Raising

On June 21, 2000, the Company entered into an agreement with an investment
banker to arrange a private placement or series of private placements of debt or
equity securities of the Company. No warrants or other compensation were issued
or paid to the investment banker and as of June 30, 2001 the agreement had
expired. The Company does not intend to renew or extend the agreement.




                                   (continued)
                                      F-12
<PAGE>
                  Virtual Academics.com, Inc. and Subsidiaries
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                                  June 30, 2001

NOTE C - COMMITMENTS AND CONTINGENCIES - Continued

Litigation

The Company is involved in litigation in the ordinary course of business, which
would not have a material effect on our business or results of operations. In
particular, the Trade School Review Association ("Trade School") filed a
complaint against the Company on July 3, 2001 in the Superior Court for the
State of California for the County of San Diego. Trade School alleges in its
complaint that the Company have violated the Private Postsecondary and
Vocational Education Reform Act of 1989, California's false advertising
statutes, and the Consumer Legal Remedies Act. The Company intends to vigorously
contest the lawsuit. Inasmuch as the lawsuit is in its preliminary stages, the
Company cannot express an opinion as to the likelihood of a favorable or
unfavorable outcome to the litigation.

NOTE D - COMMON STOCK

On February 1, 2000, the Company adopted a stock option plan (the "2000
Performance Equity Plan") for periods not to exceed ten years. The majority
shareholders of the Company approved the Plan. The plan provides options
exercisable for a maximum of 1,000,000 shares of common stock to be granted.
Both incentive and nonqualified stock options may be granted under the Plan. The
exercise price of options granted pursuant to this plan is determined by a
committee but may not be less than 100% of the fair market value on the day of
grant. For holders of 10% or more of the combined voting power of all classes of
the Company's stock, options may not be granted at less than 110% of the fair
value of the common stock at the date of grant and the option may not exceed 5
years. There were no options exercised during the fiscal years 2001 and 2000.
There were 147,500 and no options forfeited during fiscal 2001 and 2000,
respectively.

The exercise prices of all options granted by the Company equal the market price
at the dates of grant. No compensation expense has been recognized. Had
compensation cost for the stock option plan been determined based on the fair
value of the options at the grant dates consistent with the method of SFAS 123,
"Accounting for Stock Based Compensation", the Company's net earnings and
earnings per share would have been changed to the pro forma amounts indicated
below for the year ended June 30, 2001:

                  Net earnings
                      As reported                     $ 322,766
                      Pro forma                         291,291

                  Basic earnings per share
                      As reported                           .04
                      Pro forma                             .04



                                   (continued)
                                      F-13
<PAGE>
                  Virtual Academics.com, Inc. and Subsidiaries
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                                  June 30, 2001


NOTE D - COMMON STOCK - Continued

The above pro forma disclosures may not be representative of the effects on
reported net earnings for future years as options vest over several years and
the Company may continue to grant options to employees.

The fair value of each option grant is estimated on the date of grant using the
binomial option-pricing model with the following weighted-average assumptions
used for grants in 2001: dividend yield of -0- percent; expected volatility
ranging from 52 percent to 318 percent; risk-free interest rate ranging from
5.73 percent to 5.79 percent and an expected holding periods of 5 years.

A summary of the status of the Company's outstanding stock options as of June
30, 2001 and 2000 and changes during the year ending on that date is as follows:

<TABLE>
<CAPTION>
                                                                               Weighted
                                                                                Average
                                                                               Exercise
                                                             Shares             Price
                                                        --------------      --------------
<S>                                                     <C>                 <C>
          Outstanding at June 30, 1999                              -        $          -
          Granted                                             457,500                2.51
          Exercised                                                 -                   -
          Forfeited                                                 -                   -
                                                        --------------      --------------
          Outstanding at June 30, 2000                        457,500       $        2.51

           Granted                                            361,000                 .66
           Exercised                                                -                   -
           Forfeited                                         (147,500)               2.50
                                                        --------------       -------------

           Outstanding at June 30, 2001                       671,000        $       1.51
                                                        ==============       =============

           Options exercisable at end of year                 103,333        $       2.51
                                                        ==============       =============

          Weighted-average fair value of options
               granted during the year                       2001                2000
                                                        --------------       -------------
                                                                $0.40             $1.29
</TABLE>
<TABLE>
<CAPTION>
The following information applies to options outstanding at June 30, 2001:

                                                   Options Outstanding            Options Exercisable
                                               ----------------------------    -----------------------
                                                 Weighted -
                                                  Average        Weighted -                   Weighted -
                                                 Remaining        Average                      Average
                                                Contractual      Exercise                     Exercise
     Range of Exercise Prices      Shares          Life            Price          Shares        Price
     ------------------------   -----------    ------------     -----------    -------------- ----------
<S>  <C>                        <C>                <C>            <C>              <C>           <C>
     $2.50 to $2.65                310,000            8.96          $ 2.51           103,333       2.51
     $.55 to $2.12                 361,000            9.42          $  .66                 -          -

</TABLE>

                                   (continued)
                                      F-14
<PAGE>
                  Virtual Academics.com, Inc. and Subsidiaries
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                                  June 30, 2001


NOTE D - COMMON STOCK - Continued

On November 20, 2000, the Company granted 25,000 options at an exercise price of
$2.12 under this plan. On December 31, 2000, the Company granted 336,000 options
at an exercise price of $.55 under this plan. Of the 336,000 options granted,
66,000 were granted to consultants.

Additionally, the Company cancelled 30,000 options during fiscal 2001. There
were no options exercised during the fiscal year ended 2001.

The exercise price of all options granted by the Company equals the market price
at the date of grant. Accordingly, no compensation expense has been recognized
on options granted to employees. The Company granted 66,000 options to
consultants. These options were valued using the Black-Scholes pricing method at
a fair value of $.27 per option. Accordingly, the Company recorded consulting
expense of $17,820.

In February 2000, the Company entered into a subscription agreement for a total
of 2,200,000 shares of common stock. The shares were purchased for an aggregate
amount of $990,000. The purchase price was payable as $440,000 in cash for the
initial 1,100,000 shares of common stock and the issuance of a 7% promissory
note in the principal amount of $550,000 for the remaining 1,100,000 shares of
common stock. The note matured on February 2, 2001 and was paid in full in May
2001. The remaining shares of common stock were issued by the Company in June
2001.

On December 26, 2000, the Board of Directors authorized the Company to
repurchase, in the open market, up to 200,000 shares of the common stock of the
Corporation, to demonstrate its belief that the per share price of the Company's
common stock is significantly undervalued and to indicate to outside investors
its confidence in the current and future business prospects of the Company. As
of June 30, 2001, no shares have been repurchased.

In fiscal 2000, the Company agreed to issue 20,834 shares of common stock as
compensation to consultants. Accordingly, expense of $55,305 was recorded based
upon the fair value of the stock at issuance and paid-in capital was
correspondingly credited in fiscal 2000. The Company issued these shares on July
25, 2000.

On May 16, 2001, the Company issued 1,000 shares of common stock as compensation
to an independent contractor. Expense of $1,800 was recorded based upon the fair
value of the stock at issuance and paid-in capital was correspondingly credited.


                                   (continued)
                                      F-15
<PAGE>
                  Virtual Academics.com, Inc. and Subsidiaries
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                                  June 30, 2001


NOTE E - INCOME TAXES

Benefit for income taxes for the year ended June 30, 2000 of $6,132 represents
an accrual that was reversed which was made prior to the reverse merger.

Deferred tax assets and liabilities are provided for significant income and
expense items recognized in different years for tax and financial reporting
purposes. Temporary differences, which give rise to net deferred tax assets
follow:

                                                  2001               2000
                                             ---------------    ----------------
Deferred tax benefits (liability) - current
  Allowance for doubtful accounts            $       86,325     $        39,466
  Cash to accrual conversion                                             (8,500)
Deferred tax benefits - noncurrent
  Depreciation                                        2,363               5,755
  Net operating loss carryforward                    25,993             141,452
  Other, net                                              -                   -
                                             ---------------    ----------------
   Total deferred tax assets                        114,681             178,173

Less:  Valuation allowance                                -            (178,173)
                                             ---------------    ----------------

                                             $      114,682     $             -
                                             ===============    ================

In fiscal 2000, the Company's effective tax rate is lower than the statutory
rate due to the 100% valuation allowance on the deferred tax assets. The Company
recorded a full valuation allowance for the deferred tax assets at June 30, 2000
as the Company's ability to realize these benefits is not "more likely than
not". Accordingly, no net deferred tax assets are reported in the accompanying
balance sheets at June 30, 2000. As of June 30, 2001, the Company is not
recording a valuation allowance on the deferred tax assets because the Company's
ability to realize these benefits is "more likely than not". The deferred tax
asset is reported in the accompanying balance sheet at June 30, 2001.

NOTE F - RELATED PARTY TRANSACTIONS

The Company's Chief Executive Officer and President, and its Chairman of the
Board and Secretary, are also both the majority shareholders of a consulting
company that renders Internet consulting services to the Company. During the
years ended June 30, 2001 and 2000, fees paid to the consulting company amounted
to approximately $48,000 and $31,000, respectively.



                                      F-16
<PAGE>
ITEM 8.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
         FINANCIAL DISCLOSURE

                  None

                                    PART III

ITEM 9.  MANAGEMENT

         The following individuals comprise our management team:

     Steven M.  Bettinger,  30 years  old,  has  served  as our Chief  Executive
Officer,  President and Director  since 1993,  when he founded the Company.  Mr.
Bettinger also founded Barrington University in 1993. Mr. Bettinger also founded
in 1999 and serves as an executive officer and director of Continuing  Care.com,
a web portal  developer for senior living and the senior service  industry.  Mr.
Bettinger  received his B.S. in Business  Administration  (honors) from Syracuse
University. Steven Bettinger is Robert Bettinger's son.

     Robert K. Bettinger,  64 years old, has served as the Chairman of our Board
of Directors of the Company since 1993.  Mr.  Bettinger is also the President of
Barrington  University,  VADC's primary Internet school. Mr. Bettinger graduated
with an  education  degree  from Long Island  University.  Mr.  Bettinger  was a
teacher,  counselor and  administrator in the New York public school system from
1960 to 1977. Robert Bettinger is Steve Bettinger's father.

     Steven E. Kincade, 49 years old, has served as a director since April 2001.
Since May 2001, Mr. Kincade has served as Vice President of Carrier Management -
Worldwide for Research in Motion Limited, a designer,  manufacturer and marketer
of  wireless  solutions  for the  mobile  communications  workplace  located  in
Waterloo,  Ontario, Canada. From July 1992 to May 2001, Mr. Kincade was employed
by  Motorola  as Vice  President  of  Enterprise  and  Partner  Solutions,  Vice
President of Wireless Advanced Messaging and other positions. From February 1985
to June 1992,  Mr.  Kincade was  employed by EDS/SHL  Systemhouse,  Inc. as Vice
President and General Manager.

     Andrew  Lockwood,  33 years old, has served as a director since April 2000.
Since  September  2001,  he has served as President  of the Shochet  division of
BlueStone  Capital  Corp.,  a New York based  investment  broker  and  financial
services firm that acquired certain assets of Shochet Securities,  Inc in August
2001.  From April 2000 to August 2001, Mr. Lockwood has served as Executive Vice
President--Business  Development  and General Counsel of Shochet Holding Corp. a
publicly traded financial  services  company based in South Florida.  From April
1999 to April 2000,  Mr.  Lockwood was employed as an attorney in the  corporate
and securities  department of Atlas  Pearlman,  P.A., a law firm located in Fort
Lauderdale,  Florida.  From 1996 to March 1999, Mr.  Lockwood was employed as an
attorney in the corporate securities department of Graubard,  Mollen & Miller, a
law firm  located in New York City.  Mr.  Lockwood  received  his J.D.  from St.
John's  University  School of Law and his B.A.  from  Wesleyan  University.  Mr.
Lockwood  is a member in good  standing  of each of the New York and Florida Bar
Associations.

     Jack P. Phelan,  51 years old,  has served as a director  since March 2000.
Since June 1998,  Mr. Phelan served as President of Helios  International  Asset
Management, a registered investment advisor located in Boca Raton, Florida. From
January 1995 to June 1998,  Mr.  Phelan  served as President of  Nicholson/Kenny
Capital  Management,  an  investment  management  firm  located  in Boca  Raton,
Florida.  Mr. Phelan is a member of the  Association  of  Investment  Management
Research,  the New York Society of Security  Analysis,  the  Financial  Analysts
Society of South Florida,  the International  Society of Financial  Analysts and
the  International  Association  for  Financial  Planning.  Mr. Phelan is also a
member of MENSA and the International Society of Philosophical Enquiry.

     Directors  are  elected at each  annual  meeting of  stockholders  and hold
office until the next annual  meeting of  stockholders.  Executive  officers are
elected by and serve at the  discretion of the Board of Directors.  The Board of
Directors held five meetings  during Fiscal 2001 and consented to  approximately
10 corporate resolutions. There are no committees of the Board of Directors.

ITEM 10. EXECUTIVE COMPENSATION

SUMMARY COMPENSATION TABLE

         The table below sets forth information relating to the compensation the
Company paid during the past two fiscal years to: (i) the President and Chief
Executive Officer; and (ii) each other executive officer who earned more than
$100,000 during Fiscal 2001 (the "Named Executive Officers").
<TABLE>
<CAPTION>

                                                                                     Long-Term
                                     Annual Compensation                            Compensation
----------------------------------------------------------------------------------------------------------------
                                                                          Restricted   Securities
                                                         Other Annual       Stock      Underlying
Name and Principal                     Salary    Bonus   Compensation       Awards       Options     All Other
Position                Fiscal Year      ($)      ($)         ($)            ($)         SAR (#)    Compensation
-----------------------------------------------------------------------------------------------------------------
<S>                     <C>           <C>          <C>         <C>        <C>             <C>          <C>
Steven M. Bettinger,    2001          $195,461    -0-         -0-         $55,000 (1)     100,000       -0-
President and Chief
Executive Officer       2000          $133,692    -0-         -0-        $250,000 (2)     100,000       -0-

(1)      Represents value of 100,000 stock options granted to Steve Bettinger at an exercise price of $.55
(2)      Represents value of 100,000 stock options granted to Steve Bettinger at an exercise price of $2.50
</TABLE>


                                       10
<PAGE>
EMPLOYMENT AGREEMENTS

         We were a party to an employment agreement with Steven M. Bettinger,
our President and Chief Executive Officer, which was entered into December 1,
1999 for a term of two years. The employment agreement provided for an annual
salary of $150,000, and a bonus determined in the sole discretion of the
Company's Board of Directors. Effective January 1, 2001, the Board of Directors
approved a new two year employment agreement, which provides an increase in
salary for Mr. Bettinger to $250,000 per year and a bonus to be determined in
the sole discretion of the Company's Board of Directors. In connection with the
employment agreements mentioned herein, Mr. Steven M. Bettinger was granted
options under the 2000 Plan to purchase a total of 200,000 (100,000 each year)
shares of common stock in fiscal 2001 and fiscal 2000 at an exercise price equal
to the fair value market value on the date of grant. These options vest 1/3 per
year beginning one year from the date of grant. The employment agreement
entitles Mr. Steven M. Bettinger to receive options to purchase 100,000 shares
of common stock of the Company each year of employment at fair value on the date
of grant. The employment agreement provides for automatic 12-month renewals
unless the employment agreement is terminated by the Company or Steven M.
Bettinger with 30 days prior written notice. We intend to renew this employment
agreement.

         We were a party to an employment agreement with Robert K. Bettinger,
our Chairman of the Board of Directors and Secretary, which was entered into
December 1, 1999 for a period of two years. The employment agreement provided
for an annual salary of $10,800 and a bonus determined in the sole discretion of
the Company's Board of Directors. Effective January 1, 2001, our Board of
Directors approved a new two year employment agreement, which provides for an
increase in salary for Robert Bettinger to $85,000 per year and a bonus to be
determined in the sole discretion of the Company's Board of Directors. In
connection with the employment agreements mentioned herein, Mr. Robert K.
Bettinger was granted options under the 2000 Plan to purchase a total of 200,000
shares (100,000 each year) of common stock in fiscal 2001 and fiscal 2000 at an
exercise price equal to the fair market value on the date of grant. The options
vest 1/3 per year beginning one year from the date of grant. The employment
agreement entitles Mr. Robert K. Bettinger to receive options to purchase
100,000 shares of common stock of the Company each year of employment at fair
value on the date of grant. The employment agreement provides for automatic
12-month renewals unless the employment agreement is terminated by the Company
or Robert K. Bettinger with 30 days prior written notice. We intend to renew
this employment agreement.

OPTION GRANTS IN LAST FISCAL YEAR

         The following table sets forth information concerning individual grants
of options made during Fiscal 2001 to the Named Executive Officers.
<TABLE>
<CAPTION>

                                                                       % of Total
                                            Number of Shares        Options Granted   Exercise or
                                           Underlying Options       to Employees in    Base Price      Expiration
                                             Granted (#)(1)           Fiscal Year        ($/Sh)           Date
---------------------------------------------------------------------------------------------------------------------
<S>                                             <C>                        <C>           <C>                     <C>
Steven M. Bettinger..............               100,000                    27.7%         $0.55          December 2010

Robert K. Bettinger                             100,000                    27.7%         $0.55          December 2010
</TABLE>

STOCK OPTIONS HELD AT END OF FISCAL 2001

         The following table indicates the total number and value of exercisable
and unexercisable stock options held by Named Executive Officers as of June 30,
2001. No options to purchase stock were exercised by either of the Named
Executive Officers in fiscal 2001.
<TABLE>
<CAPTION>

   Number of Securities                                                            Value of Unexercised
                                          Underlying Unexercised                           In-the-Money
                                      Options at Fiscal Year-End (#)              Options at Fiscal Year-End ($) (1)
                                   --------------------------------------    -----------------------------------------
Name                                 Exercisable         Unexercisable        Exercisable             Unexercisable
-------------------------------    ----------------    ------------------    ------------------    -------------------
<S>                                   <C>                    <C>              <C>                       <C>
Steven M. Bettinger                      33,333                 166,667          $ 46,666                  $ 233,333
Robert K. Bettinger                      33,333                 166,667          $ 46,666                  $ 233,333
-------------
</TABLE>

(1) Based on the OTC Bulletin Board last sales price for the Company's common
stock on September 1, 2001 in the amount of $1.40 per share.

2000 PERFORMANCE EQUITY PLAN

         On February 1, 2000, the Company adopted and implemented the 2000 Plan.
The purpose of the 2000 Plan is to advance the interests of the Company by
providing an additional incentive to attract and retain qualified and competent
persons as employees, officers, directors and consultants upon whose efforts and
judgment the success of the Company is largely dependent. The 2000 Plan was
effective as of February 1, 2000, and, unless sooner terminated by the Board of
Directors of the Company in accordance with the terms thereof, shall terminate
on February 1, 2010. The number of shares of common stock that may be issued
upon the exercise of options granted under the 2000 Plan is 1,000,000. As of
June 30, 2001, options to purchase a total of 671,000 shares had been granted
pursuant to the 2000 Plan, all of which are outstanding and 103,333 of which are
exercisable.


                                       11
<PAGE>
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

         The following table provides certain information regarding our common
stock beneficially owned as of September 15, 2001 by:

o each person who is known by us to own beneficially 5% or more of our common
stock; o each of our executive officers and directors; and o all of our
executive officers and directors as a group.

         In accordance with SEC rules, options or warrants not exercisable
within 60 days of this report are not considered part of the holder's beneficial
ownership. As of September 15, 2001, there were 8,604,617 shares of common stock
outstanding. Unless otherwise stated, the address for the beneficial shareholder
is 6421 Congress Ave., Suite 201, Boca Raton, Florida 33487.
<TABLE>
<CAPTION>


           Name and Address of               Number of Shares of Common Stock
           the Beneficial Owner                     Beneficially Owned                       Percentage %
------------------------------------------------------------------------------------------------------------------------

<S>                                                      <C>                                     <C>
Steven M. Bettinger                                      2,870,000                               31.03
Robert K. Bettinger                                      1,470,000                               14.70
Steven E. Kincade                                            0                                     0
Andrew Lockwood                                              3,333                                 0
Jack Phelan                                                  0                                     0
Gilder Funding Corp. (1)
   12000 N. Bayshore Drive, Suite 210,
   North Miami, FL  33181                                1,193,889                               13.87
 -----------------------------------------------------------------------------------------------------------------------
All executive officers and
Directors as a group (5 persons)                         3,940,000                               52.4%
------------------------------------------------------------------------------------------------------------------------
(1)  Gilder Funding Corp. holdings include beneficial ownership of 704,444 shares of common stock owned by Private Trust Corp.
     and Warren & Marianne Gilbert.
</TABLE>

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         Steven Bettinger and Robert Bettinger are also the majority
shareholders of a consulting company that renders Internet consulting services
to the Company. During the years ended June 30, 2001 and 2000, fees paid to the
consulting company amounted to approximately $48,000 and $31,000, respectively.

ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K

(a)      Exhibits

          3.1     Registrant's Certificate of Incorporation(1)
          3.2     Registrant's Amended and Restated Bylaws(1)
         10.1     2000 Performance Equity Plan *(1)
         10.2     Employment Agreement between the Registrant and Steven M.
                  Bettinger(2)
         10.3     Employment Agreement between the Registrant and Robert K.
                  Bettinger(2)
         21.1     Subsidiaries of the Registrant (2)

  * Management Compensation Plan or Arrangement

(1)      Incorporated herein by reference to the comparable exhibits filed with
         Registrant's Form 10-KSB for the fiscal year ended June 30, 2000.

(2)      Filed herewith

(b)      Reports on 8-K

         None




                                       12
<PAGE>
                                   SIGNATURES

         In accordance with Section 13 or 15(d) of the Securities Exchange Act
of 1934, as amended, the registrant caused this report to be signed on its
behalf by the undersigned and duly authorized on September 20, 2001.



                           Virtual Academics.com, Inc.

                           By: /s/ Steven M. Bettinger
                               ------------------------
                               Steven M. Bettinger
                               Chief Executive Officer and President


         Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed by the following persons in the capacities and on
the date indicated above.

<TABLE>
<CAPTION>

SIGNATURE                                    TITLE                               DATE
---------                                    -----                               ----
<S>                           <C>                                          <C>
/s/ Steven M. Bettinger       Chief Executive Officer, President and       September 20, 2001
-----------------------       Director
Steven M. Bettinger

/s/ Robert K. Bettinger       Chairman of the Board of Directors           September 20, 2001
-----------------------       (Principal Accounting and Financial
Robert K. Bettinger           Officer)

/s/Andrew Lockwood            Director                                     September 20, 2001
-----------------------
Andrew Lockwood

/s/ Jack P. Phelan            Director                                     September 20, 2001
-----------------------
Jack P. Phelan

/s/ Steven Kincade            Director                                     September 20, 2001
-----------------------
Steven Kincade
</TABLE>































                                       13






</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.2
<SEQUENCE>3
<FILENAME>exhibit10-2.txt
<DESCRIPTION>EMPLOYMENT AGREEMENT - STEVEN M. BETTINGER
<TEXT>
                           VIRTUAL ACADEMICS.COM, Inc.

                          6421 Congress Ave, Suite 201
                            Boca Raton, Florida 33487






Mr. Steven Bettinger
Virtual Academics.com, Inc.
6421 Congress Avenue, Suite 201
Boca Raton, FL 33487

Re: Offer of Employment:

Dear Steven:

         On behalf of Virtual Academics.com, Inc. ("company"), I am pleased to
offer you the position of President and Chief Executive Officer. In this
capacity, your responsibilities will include the daily supervision of all of the
company's operations, including business development, academic integrity of its
online courses, investor relations, positioning of its global market share and
human resource management. You will report directly to the Chairman of the Board
and the board of directors of the company. This letter clarifies and confirms
other terms of your employment with the company.


I.       Start Date.  Your employment will start on the date written below.

II.      Salary. Your base annual salary will be $250,000, payable in accordance
         with the company's standard payroll practice and subject to applicable
         withholding taxes. Because your position is exempt from overtime pay,
         your salary will compensate you for all hours worked. Your base salary
         will be reviewed periodically by the company's board of directors or
         its compensation committee, and any increases will be effective as of
         the date determined by the board or compensation committee.

III.     Stock Options. In addition to the compensation above, you will be
         entitled to receive options to purchase 100,000 shares of common stock
         of the company each year of your employment with the company. The
         options will be exercisable at a price equal to the fair market value
         of the common stock on the date of grant. This stock will bear
         appropriate restrictive legends under the Securities Act of 1933, as
         amended, and will be payable at year end of each year in which you are
         entitled to receive the options.

<PAGE>
IV.      Bonus. In addition to your base salary, you will be eligible to receive
         an annual bonus, at the sole discretion of the board of directors. The
         bonus may take the form of cash, options to purchase common stock of
         the company or restricted stock of the company.

V.       Benefits.  You will also be entitled, during the term of your
         employment, to such vacation, medical and other employee benefits as
         the company may offer from time to time, subject to applicable
         eligibility requirements.  The company reserves the right to make any
         modification to this benefits package that it deems appropriate. You
         are also entitled to a company car.

VI.      Term and Termination . The term of this agreement is 24 months, subject
         to automatic renewals of 12-month terms unless terminated by the
         company or you with 30 days' prior written notice to the company's
         board of directors. The company may terminate you with or without
         cause. The following constitutes "cause":

         A.  Any act of fraud or embezzlement;

         B.  Your conviction of any felony involving an act of dishonesty, moral
             turpitude, deceit or fraud;

         C.  Any act of dishonesty or misconduct (whether in connection with
             your responsibilities as an employee of the company or otherwise)
             that either materially impairs the company's business, goodwill or
             reputation or materially compromises your ability to represent the
             company with the public;  or

         D.  Your material failure to perform your lawful duties to the company
             after receiving written notice from the board of directors
             describing such failure in reasonable detail.


VII.     Additional Provisions. Your acceptance of this offer will bind you to
         accepting the terms of your employment described in this letter. You
         indicate your acceptance by signing both copies of this letter, keeping
         one copy for your files. This letter supercedes any and all previous
         offers, discussions or other communications, including electronic
         communications and including the employment letter dated December 1st,
         1999, you may have had with the company. Any modifications must be in
         writing and signed by both parties.
<PAGE>
                  We are excited about your joining us, and look forward to a
         profitable and mutually beneficial working relationship.


                                                      Sincerely,
         Dated as of January 1, 2001


                                                       Robert K. Bettinger
                                                       Chairman of the Board and
                                                       Secretary

         ACCEPTANCE

         I accept employment with Virtual Academics.com,  Inc. under the terms
         set forth in this letter:




         Steven M. Bettinger





</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.3
<SEQUENCE>4
<FILENAME>exhibit10-3.txt
<DESCRIPTION>EMPLOYMENT AGREEMENT - ROBERT K.  BETTINGER
<TEXT>
                           VIRTUAL ACADEMICS.COM, Inc.

                          6421 Congress Ave, Suite 201
                            Boca Raton, Florida 33487





Mr. Robert K. Bettinger
Virtual Academics.com, Inc.
6421 Congress Avenue, Suite 201
Boca Raton, FL 33487

Re: Offer of Employment:

Dear Robert:

         On behalf of Virtual Academics.com, Inc. ("company"), I am pleased to
offer you the position of Chairman of the Board and Secretary of the company. In
this capacity, your responsibilities will include the oversight of all of the
company's operations, including development of strategic alliances with
synergistic entities and other business development and positioning of its
global market share. You will report directly to the board of directors of the
company. This letter clarifies and confirms other terms of your employment with
the company.


I.       Start Date.  Your employment will start on the date written below.

II.      Salary. Your base annual salary will be $85,000, payable in accordance
         with the company's standard payroll practice and subject to applicable
         withholding taxes. Because your position is exempt from overtime pay,
         your salary will compensate you for all hours worked. Your base salary
         will be reviewed periodically by the company's board of directors or
         its compensation committee, and any increases will be effective as of
         the date determined by the board or compensation committee.

III.     Stock Options. In addition to the compensation above, you will be
         entitled to receive options to purchase 100,000 shares of common stock
         of the company each year of your employment with the company. The
         options will be exercisable at a price equal to the fair market value
         of the common stock on the date of grant. This stock will bear
         appropriate restrictive legends under the Securities Act of 1933, as
         amended, and will be payable at year-end of each year in which you are
         entitled to receive the stock.



<PAGE>
IV.      Bonus.  In addition to your base salary, you will be eligible to
         receive an annual bonus, at the sole discretion of the board of
         directors.  The bonus may take the form of cash, options to purchase
         common stock of the company or restricted stock of the company.

V.       Benefits.  You will also be entitled, during the term of your
         employment, to such vacation, medical and other employee benefits as
         the company may offer from time to time, subject to applicable
         eligibility requirements.  The company reserves the right to make any
         modification to this benefits package that it deems appropriate.

VI.      Term and Termination . The term of this agreement is 24 months, subject
         to automatic renewals of 12-month terms unless terminated by the
         company or you with 30 days' prior written notice to the company's
         board of directors. The company may terminate you with or without
         cause. The following constitutes "cause":

         A.  Any act of fraud or embezzlement;

         B.  Your conviction of any felony involving an act of dishonesty, moral
             turpitude, deceit or fraud;

         C.  Any act of dishonesty or misconduct (whether in connection with
             your responsibilities as an employee of the company or otherwise)
             that either materially impairs the company's business, goodwill or
             reputation or materially compromises your ability to represent the
             company with the public;  or

         D.  Your material failure to perform your lawful duties to the company
             after receiving written notice from the board of directors
             describing such failure in reasonable detail.


VII.     Additional Provisions. Your acceptance of this offer will bind you to
         accepting the terms of your employment described in this letter. You
         indicate your acceptance by signing both copies of this letter, keeping
         one copy for your files. This letter supercedes any and all previous
         offers, discussions or other communications, including electronic
         communications, and including the employment letter dated December 1st,
         1999, you may have had with the company. Any modifications must be in
         writing and signed by both parties.
<PAGE>
                  We are excited about your joining us, and look forward to a
         profitable and mutually beneficial working relationship.

                                           Sincerely,

         Dated as of January 1, 2001


                                           Steven M. Bettinger
                                           Chief Executive Officer and President

         ACCEPTANCE

         I accept employment with Virtual Academics.com,  Inc. under the terms
         set forth in this letter:




         Robert K. Bettinger





</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-21.1
<SEQUENCE>5
<FILENAME>exhibit21-1.txt
<DESCRIPTION>SUBSIDIARIES OF THE REGISTRANT
<TEXT>
 Exhibit 21.1     Subsidiaries of the Registrant

                                                             State Incorporated
                  Barrington University, Inc.                     Alabama
                  China Academics.com, Inc.                       Florida
                  The Spanish University of America, Inc.         Florida
                  Academy of Health and Nutrition, Inc.           Florida

</TEXT>
</DOCUMENT>
</SUBMISSION>
