Yaak Resources, Inc.2002 10-KSB
                   U.S. SECURITIES AND EXCHANGE COMMISSION
                         Washington, D.C. 20549

                                  FORM 10-KSB

[X]  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
                                   ACT OF 1934
                 For the fiscal year ended: December 31, 2002

                                      OR

[  ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
                               EXCHANGE ACT OF 1934
For the transition period from                       to

                        Commission file number:  0-30489

                           YAAK RIVER RESOURCES, INC.
                  (Name of small business issuer in its charter)

      Colorado                                      84-1097796
(State or other jurisdiction of    (I.R.S. Employer Identification No.)
                            incorporation or organization)

                    2501 East Third Street, Casper, Wyoming 82609
              (Address of principal executive offices, including zip code)

                                   (307) 235-0012
                              (Issuer's telephone number)

Securities registered under Section 12(b) of the Exchange Act:      None

Securities registered under Section 12(g) of the Exchange Act:      Common
    Stock, par value $0.0001 per share

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 disclosure of delinquent filers pursuant to Item 405 of Regulation
S-B is not contained in this form, and no disclosure will be contained, to
the best of 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

The issuer's revenues for its most recent fiscal year were $ 0 .

The aggregate market value of the voting stock held by non-affiliates,
computed by reference to the average bid and asked prices of such stock
as of April 19, 2003, was approximately $495,000.

As of April 19, 2003, 67,308,857 shares of Series A Common Stock, par
value $0.0001 per share, were outstanding.



      DOCUMENTS INCORPORATED BY REFERENCE

Registration Statement 33-28106, as amended, is incorporated into Parts I
and IV of this Report.

Annual Report on Form 10-KSB for the fiscal year ended December 31, 1992, is
incorporated into Part IV of this Report

Transitional Small Business Disclosure Format:  Yes___     No  X

This Form 10-KSB consists of 25 pages.  Exhibits are indexed at page 14.


PART I


ITEM 1.     DESCRIPTION OF BUSINESS

General

      Yaak River Resources, Inc. (the "Registrant" or the "Company"),
was incorporated under the laws of the State of Colorado under the name
Andraplex Corporation on June 10, 1988, for the primary purpose of seeking
out acquisitions of properties, businesses, or merger candidates, without
limitation as to the nature of the business operations or geographic area
of the acquisition candidate.  From inception through the date of completion
of its initial public offering of securities, the Company's activities were
directed toward the acquisition of operating capital.

      The Company completed its initial public offering in 1989.  After
completion of the offering, the Company began the process of identification
and evaluation of prospective acquisition candidates and other business
opportunities.

Subsequent Business Plans and Business Operations

      From 1993 through 1998, the Company was a development-stage enterprise
that sought to engage in the mining of gold and other precious and base
metals.  Toward that objective, the Company acquired a number of mining
properties located in or near the Yaak Mining District in Lincoln County,
Montana.

      Together with its other activities, the Company sought to obtain
financing for development and operating purposes.  Those efforts, however,
failed to raise adequate working capital from outside sources.  An
insufficiency of capital, combined with regulatory impediments, prevented
commencement of significant mining operations.

      Owing to the perceived impracticability of continuing to pursue the
Company's historical business plan, management determined it to be in the
best interests of the Company and its shareholders that the plan be
abandoned, and that the Company dispose of its mining properties.  The
sale of the mining properties was consummated in July of 1999.

      In September of 1999, the Company acquired 91 unimproved lots located
in Teller County, Colorado. The lots are zoned for residential development,
and comprise a total of approximately 4.7 acres of land.  They are located
in the Pike's Peak region approximately six miles by road from the historic
mining town of Cripple Creek, Colorado, and approximately 40 miles by
highway from the Colorado Springs metropolitan area.  The lots shall be
referred to in this Report as the "Company Real Estate."

                                      -2-


      The Company acquired the Company Real Estate from Donald J. Smith,
who is the former President and a Director of the Company.  In connection
with the purchase, the Company's board of directors deemed the Company
Real Estate to have a total value of $162,000.  The purchase price was
paid in the form of approximately 23,000,000 treasury shares of the
Company's Series A Common Stock.

      In the fourth quarter of the year ended December 31, 2000,
management reached a determination that it would not be feasible for
the Company to develop the Company Real Estate.  Upon reaching that
determination, management adopted the new business plan summarized
under "Plan of Operations," below

Plan of Operations

      Management intends to seek out and pursue a business combination with
one or more existing private business enterprises that might have a desire
to take advantage of the Company's status as a public corporation.
Management does not intend to target any particular industry but, rather,
intends to judge any opportunity on its individual merits.

        In addition, management intends either to sell the Company Real
Estate as an undeveloped package or to spin off the Company Real Estate
into a private subsidiary corporation that has yet to be formed.

Competition

      The Company is and will remain an insignificant participant among the
firms that engage in mergers with and acquisitions of privately financed
entities.  Many established venture-capital and financial concerns have
significantly greater financial and personnel resources and technical
expertise than the Company.

      In view of the Company's limited financial resources and limited
management availability, the Company will continue to be at a significant
disadvantage compared to the Company's competitors.  See "Risk Factors --
Competition."

Employees

      The Company has no full time employees.  Its officers devote as much
time as they deem necessary to conduct the Company's business.  See "Item 10.
Executive Compensation."  See also "Risk Factors -- Dependence upon
Management" and "Risk Factors -- Limited Participation of Management."

Risk Factors

      An investment in the securities of the Company involves extreme risks
and the possibility of the loss of a shareholder's entire investment.  A
prospective investor should evaluate all information discussed in this
Report and the risk factors discussed below in relation to his financial
circumstances before investing in any securities of the Company.

      1.  No Currently Relevant Operating History.  The Company has no
currently relevant operating history, revenues from operations, or assets
other than the Company Real Estate and cash from private sales of stock.
The Company faces all of the risks of a new business and those risks
specifically inherent in the investigation, acquisition, or involvement
in a new business opportunity.  Purchase of any securities of the Company
must be regarded as placing funds at a high risk in a new or "start-up"
venture with all of the unforeseen costs, expenses, problems, and
difficulties to which such ventures are subject.

                                      -3-



      2.  No Assurance of Success or Profitability.  There is no assurance
that the Company will acquire a favorable business opportunity.  In addition,
even if the Company becomes involved in a business opportunity, there is no
assurance that it will generate revenues or profits, or that the market price
of the Company's Common Stock will be increased thereby.

      3.  Possible Business - Not Identified and Highly Risky.  The Company
has not identified and has no commitments to enter into or acquire a specific
business opportunity and therefore can disclose the risks and hazards of
a business or opportunity that it may enter into in only a general manner,
and cannot disclose the risks and hazards of any specific business or
opportunity that it may enter into.  An investor can expect a potential
business opportunity to be quite risky.  The Company's acquisition of or
participation in a business opportunity will likely be highly illiquid and
could result in a total loss to the Company and its stockholders if the
business or opportunity is unsuccessful.

      4.  Type of Business Acquired.  The type of business to be acquired
may be one that desires to avoid effecting a public offering and the
accompanying expense, delays, and federal and state requirements which
purport to protect investors.  Because of the Company's limited capital,
it is more likely than not that any acquisition by the Company will
involve other parties whose primary interest is the acquisition of a
publicly traded company.  Moreover, any business opportunity acquired may
be currently unprofitable or present other negative factors.

      5.  Impracticability of Exhaustive Investigation.  The Company's
limited funds and the lack of full-time management will likely make it
impracticable to conduct a complete and exhaustive investigation and
analysis of a business opportunity before the Company commits its capital
or other resources thereto.  Management decisions, therefore, will likely
be made without detailed feasibility studies, independent analysis, market
surveys, and the like which, if the Company had more funds available to it,
would be desirable.  The Company will be particularly dependent in making
decisions upon information provided by the promoter, owner, sponsor, or
others associated with the business opportunity seeking the Company's
participation.

      6.  Lack of Diversification.  Because of the limited financial
resources of the Company, it is unlikely that the Company will be able to
diversify its acquisitions or operations.  The Company's probable inability
to diversify its activities into more than one area will subject the Company
to economic fluctuations within a particular business or industry and
therefore increase the risks associated with the Company's operations.

      7.  Possible Reliance upon Unaudited Financial Statements.  The Company
generally will require audited financial statements from companies that the
Company proposes to acquire.  No assurance can be given, however, that
audited financials will be available to the Company.  In cases where audited
financials are unavailable, the Company will have to rely upon unaudited
information received from target companies' management that has not been
verified by outside auditors.  The Company is subject, moreover, to the
reporting provisions of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and thus will be required to furnish certain information
about significant acquisitions, including certified financial statements for
any business that the Company shall acquire.  Consequently, acquisition
prospects that do not have or are unable to obtain the required certified
statements may not be appropriate for acquisition so long as the reporting
requirements of the Exchange Act are applicable.

                                     -4-



      8.  Investment Company Regulation.  The Company does not intend to
become classified as an "investment company" under the Investment Company
Act of 1940 (the "Investment Act").  The Company believes that it will not
become subject to regulation under the Investment Act because (i) the Company
will not be engaged in the business of investing or trading in securities,
(ii) any merger or acquisition undertaken by the Company will result in the
Company's obtaining a majority interest in any such merger or acquisition
candidate, and (iii) the Company intends to discontinue any investment in a
prospective merger or acquisition candidate in which a majority interest
cannot be obtained.  Should the Company be required to register as an
investment company, it shall incur significant registration and compliance
costs.  The Company has obtained no formal determination from the Securities
and Exchange Commission (the "Commission") as to the status of the Company
under the Investment Act.  Any violation of the Investment Act will subject
the Company to materially adverse consequences.  Should the Commission find
that the Company is subject to the Investment Act, and order the Company to
register under such Act, the Company would vigorously resist such finding
and order.  Irrespective of whether the Commission or the Company were to
prevail in such dispute, however, the Company would be damaged by the costs
and delays involved.  Because the Company will not register under the
Investment Act, investors in the Company will not have the benefit of the
various protective provisions imposed on investment companies by such Act,
including requirements for independent directors.

      9.  Other Regulation.  An acquisition made by the Company may be of
a business that is subject to regulation or licensing by federal, state, or
local authorities.  Compliance with such regulations and licensing can be
expected to be a time-consuming, expensive process and may limit other
investment opportunities of the Company.

      10.  Dependence upon Management.  The Company will be heavily dependent
upon the skills, talents, and abilities of its management to implement its
business plan.  The Company's executive officers and directors may devote
as little as two hours per month to the affairs of the Company, which for a
company such as this that is heavily dependent upon management, may be
inadequate for Company business, and may delay the acquisition of any
opportunity considered.  Furthermore, management has little or no significant
experience in seeking, investigating, and acquiring businesses and will
depend upon its limited business knowledge in making decisions regarding the
Company's operations.  See "Item 9.  Directors, Executive Officers, Promoters
and Control Persons; Compliance with Section 16(a) of the Exchange Act."
Because investors will not be able to evaluate the merits of possible business
acquisitions by the Company, they should critically assess the information
concerning the Company's management.

      11.  Lack of Continuity in Management.  The Company does not have
employment agreements with its management, and there is no assurance that
the persons named herein will manage the Company in the future.  In
connection with acquisition of a business opportunity, the current management
of the Company probably will resign and appoint successors.  This may occur
without the vote or consent of the shareholders of the Company.

      12.  Conflicts of Interest.  Certain conflicts of interest exist
between the Company and its executive officers and directors.  Each of them
has other business interests to which they devote their primary attention,
and they may be expected to continue to do so although management time should
be devoted to the business of the Company.  As a result, conflicts of
interest may arise that can be resolved only through their exercise of such
judgment as is consistent with their fiduciary duties to the Company.

      13.  Indemnification of Officers and Directors.  The Company's Articles
of Incorporation provide for the indemnification of its directors, officers,
employees, and agents, under certain circumstances, against attorney's fees
and other expenses incurred by them in any litigation to which they become a
party arising from their association with or activities on behalf of the
Company.  The Company may also bear the expenses of such litigation for any
of its directors, officers, employees, or agents, upon such person's promise
to repay the Company therefor if it is ultimately determined that any such
person shall not have been entitled to indemnification.  This indemnification
policy could result in substantial expenditures by the Company which it will
be unable to recoup.

                              -5-


      14.  Director's Liability Limited.  The Company's Articles of
Incorporation exclude personal liability of its directors to the Company and
its stockholders for monetary damages for breach of fiduciary duty except
in certain specified circumstances.  Accordingly, the Company will have a
much more limited right of action against its directors than otherwise would
be the case.  This provision does not affect the liability of any director
under federal or applicable state securities laws.

      15.  Dependence upon Outside Advisors.  To supplement the business
experience of management, the Company may be required to employ accountants,
technical experts, appraisers, attorneys, or other consultants or advisors.
The selection of any such advisors will be made by management without any
input from shareholders.  Furthermore, it is anticipated that such persons
may be engaged on an "as needed" basis without a continuing fiduciary or
other obligation to the Company.

      16.  Need for Additional Financing.  The Company's funds will not be
adequate to take advantage of any available business opportunities.  Even if
the Company were to obtain sufficient funds to acquire an interest in a
business opportunity, it may not have sufficient capital to exploit the
opportunity.  The ultimate success of the Company will depend upon its
ability to raise additional capital.  The Company has not investigated the
availability, source, or terms that might govern the acquisition of
additional capital and will not do so until it evaluates its needs for
additional financing.  When additional capital is needed, there is no
assurance that funds will be available from any source or, if available,
that they can be obtained on terms acceptable to the Company.  If not
available, the Company's operations will be limited to those that can be
financed with its modest capital.

      17.  Leveraged Transactions.  There is a possibility that any
acquisition of a business opportunity by the Company may be leveraged, i.e.,
the Company may finance the acquisition of the business opportunity by
borrowing against the assets of the business opportunity to be acquired,
or against the projected future revenues or profits of the business
opportunity.  This could increase the Company's exposure to larger losses.
A business opportunity acquired through a leveraged transaction is profitable
only if it generates enough revenues to cover the related debt and
expenses.  Failure to make payments on the debt incurred to purchase the
business opportunity could result in the loss of a portion or all of the
assets acquired.  There is no assurance that any business opportunity
acquired through a leveraged transaction will generate sufficient revenues
to cover the related debt and expenses.

      18.  Competition.  The search for potentially profitable business
opportunities is intensely competitive.  The Company expects to be at a
disadvantage when competing with many firms that have substantially greater
financial and management resources and capabilities than the Company.  These
competitive conditions will exist in any industry in which the Company may
become interested.

      19.  No Foreseeable Dividends.  The Company has not paid dividends on
its Common Stock and does not anticipate paying such dividends in the
foreseeable future.

      20.  Loss of Control by Present Management and Shareholders.  The
Company may consider an acquisition in which the Company would issue as
consideration for the business opportunity to be acquired an amount of the
Company's authorized but unissued Common Stock that would, upon issuance,
constitute as much as 95% of the voting power and equity of the Company.
The result of such an acquisition would be that the acquired company's
stockholders and management would control the Company, and the Company's
management could be replaced by persons unknown at this time.  Such a merger
could leave investors in the securities of the Company with a greatly
reduced percentage of ownership of the Company.  Management could sell its
control block of stock at a premium price to the acquired company's
stockholders, although management has no plans to do so.

      21.  Dilutive Effects of Issuing Additional Common Stock.  The majority
of the Company's authorized but unissued Common Stock remains unissued.  The
board of directors of the Company has authority to issue such unissued shares
without the consent or vote of the shareholders of the Company.  The issuance
of these shares may further dilute the interests of investors in the
securities of the Company and will reduce their proportionate ownership
and voting power in the Company.  See "Series B Common Shares Authorized,"
below.

                                      -6-



      22.  Thinly-traded Public Market.  There currently is only a thinly
traded or virtually inactive public market for the securities of the Company,
and no assurance can be given that a more active market will develop or that
an investor will be able to liquidate his investment without considerable
delay, if at all.  If a more active market should develop, the price may be
highly volatile.  Factors such as those discussed in this "Risk Factors"
section may have a significant impact upon the market price of the securities
of the Company.  Owing to what may be expected to be the low price of the
securities, many brokerage firms may not be willing to effect transactions
in the securities.  Even if an investor finds a broker willing to effect a
transaction in these securities, the combination of brokerage commissions,
state transfer taxes, if any, and any other selling costs may exceed the
selling price.  Further, many lending institutions will not permit the use
of such securities as collateral for any loans.

      23.  Broker-Dealer Sales of Company's Registered Securities.  The
Company's registered securities are covered by a Securities and Exchange
Commission rule that imposes additional sales practice requirements on broker-
dealers who sell such securities to persons other than established customers
and accredited investors.  For purposes of the rule, the phrase "accredited
investors" means, in general terms, institutions with assets in excess of
$5,000,000, or individuals having a net worth in excess of $1,000,000 or
having an annual income that exceeds $200,000 (or that, when combined with
a spouse's income, exceeds $300,000).  For transactions covered by the rule,
the broker-dealer must make a special suitability determination for the
purchaser and receive the purchaser's written agreement to the transaction
prior to the sale.  Consequently, the rule may affect the ability of broker-
dealers to sell the Company's securities and also may affect the ability of
investors in securities of the Company to sell their securities in any market
that might develop therefor.

      24.  Preferred Shares Authorized.  The Articles of Incorporation of
the Company authorize issuance of a maximum of 50,000,000 nonvoting shares
of Preferred Stock, par value $0.0001 per share.  No shares of Preferred
Stock have been issued or are outstanding on the date of this Report, and
there is no plan to issue any in the foreseeable future. Should a series of
Preferred Stock be issued, however, the terms of such series could operate
to the significant disadvantage of the holders of outstanding Series A
Common Stock or other securities of the Company.  Such terms could include,
among others, preferences as to dividends and distributions on liquidation.

      25.  Series B Common Shares Authorized.  The Articles of Incorporation
of the Company authorize issuance of a maximum of 250,000,000 nonvoting
shares of Series B Common Stock, par value $0.0001 per share.  No shares of
Series B Common Stock have been issued or are outstanding on the date of this
Report and there is no plan to issue any in the foreseeable future.  Should
Series B Common Stock be issued, however, such Stock could have a substantial,
dilutive effect upon the interests of the holders of outstanding Series A
Common Stock or other securities of the Company, and would reduce the
proportionate ownership of such holders in the Company.

      26.  Possible Rule 144 Sales.  The majority of the outstanding shares
of Common Stock held by present shareholders are "restricted securities"
within the meaning of Rule 144 under the Securities Act of 1933, as amended.
As restricted shares, these shares may be resold only pursuant to an
effective registration statement or under the requirements of Rule 144 or
other applicable exemption from registration under the Act and as required
under applicable state securities laws.  Rule 144 provides in essence that a
person who has held restricted securities for a period of one year may, under
certain conditions, sell every three months, in brokerage transactions, a
number of shares that does not exceed the greater of 1.0% of a company's
outstanding common stock or the average weekly trading volume during the four
calendar weeks prior to the sale.  There is no limit on the amount of
restricted securities that may be sold by a nonaffiliate after the restricted
securities have been held by the owner for a period of two years.  A
sale under Rule 144 or under any other exemption from the Act, if available,
or pursuant to subsequent registrations of shares of Common Stock of present
stockholders, may have a depressive effect upon the
price of the Common Stock in any market that may develop.  A total of
32,841,977 shares of Series A Common Stock (49.5% of the total number of
issued and outstanding shares) held by present shareholders of the Company
are available for sale under Rule 144, all of which will be subject to
applicable volume restrictions under the Rule.

                                      -7-



Special Note Regarding Forward-Looking Statements

      Some of the statements under "Description of Business," "Risk Factors,"
"Management's Discussion and Analysis or Plan of Operation," and elsewhere in
this Report and in the Company's periodic filings with the Securities
and Exchange Commission constitute forward-looking statements.  These
statements involve known and unknown risks, significant uncertainties and
other factors what may cause actual results, levels of activity, performance
or achievements to be materially different from any future results, levels
of activity, performance or achievements expressed or implied by such forward-
looking statements.  Such factors include, among other things, those listed
under "Risk Factors" and elsewhere in this Report.

      In some cases, you can identify forward-looking statements by
terminology such as "may," "will," "should," "could," "intends," "expects,"
"plans," "anticipates," "believes," "estimates," "predicts," "potential" or
"continue" or the negative of such terms or other comparable terminology.

      The forward-looking statements herein are based on current expectations
that involve a number of risks and uncertainties.  Such forward-looking
statements are based on assumptions that the Company will obtain or have
access to adequate financing for each successive phase of its growth, that
there will be no material adverse competitive or technological change in
condition of the Company's business, that the Company's President and other
significant employees will remain employed as such by the Company, and that
there will be no material adverse change in the Company's operations,
business or governmental regulation affecting the Company.  The foregoing
ssumptions are based on judgments with respect to, among other things,
further economic, competitive and market conditions, and future business
decisions, all of which are difficult or impossible to predict accurately
and many of which are beyond the Company's control.

      Although management believes that the expectations reflected in
the forward-looking statements are reasonable, management cannot guarantee
future results, levels of activity, performance or achievements.  Moreover,
neither management nor any other persons assumes responsibility for the
accuracy and completeness of such statements.


ITEM 2.     DESCRIPTION OF PROPERTY

      See "Item 1.  Description of Business -- Subsequent Business Plans
                    and Business Operations"

      The Company has been provided office space in the offices of its
President, for which it pays no rent.


ITEM 3.      LEGAL PROCEEDINGS

      The Company is not a party to any threatened or pending legal
proceedings.


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

No matters were submitted to a vote of the Company's shareholders during
the fiscal year ended December 31, 2002.

                                      -8-


PART II

ITEM 5.    MARKET FOR THE COMPANY'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS

Market Information

      The Company's Series A Common Stock is traded on the over-the-counter
market on the "Electronic Bulletin Board" operated by the National
Association of Securities Dealers, Inc., under the symbol YAAKA.  The
Company's securities began trading during the first quarter of the Company's
fiscal year 1992.  The reported high and low bid prices for the Company's
Common Stock for the previous two fiscal years are set forth below.  The bid
prices shown reflect quotations between dealers, without adjustment for
markups, markdowns or commissions, and may not represent actual transactions
in the Company's securities.

                 Series A Common Stock:
                                                     Bid Price
                  Date                             High        Low

                  March 31, 2001                  $.03        $.01
                  June 30, 2001                   $.05        $.02
                  September 30, 2001              $.03        $.01
                  December 31, 2001               $.01        $.01

                  March 31, 2002                  $.03        $.01
                  June 30, 2002                   $.03        $.01
                  September 30, 2002              $.02        $.01
                  December 31, 2002               $.015       $.01


     As of April 19, 2003, the Company had nine market makers for its
securities.

      The Company's securities are classified as "designated securities,"
which classification places significant restrictions upon broker-dealers
desiring to make a market in such securities.  As a result, it may be
difficult for management to continue to interest market makers in the
Company's securities.  These difficulties may continue until such time as
the Company is able to meet the criteria to qualify as a non-designated
security, so that market makers may trade without complying with the
stringent requirements applicable to designated securities.

Holders

      At December 28, 2002, the Company had 59 shareholders of record.  This
does not include shareholders who hold stock in their accounts at
broker/dealers.

Dividends

      The Company has never paid a cash dividend on its common stock and
does not expect to pay a cash dividend in the foreseeable future.

                                      -9-


Unregistered Sales of Equity Securities

      During the fiscal year ended December 31, 2002, the Company sold an
aggregate of 1,000,000 shares of Series A Common Stock for total cash
consideration of $7,000 in the series transactions summarized in
the table set forth below.


Name of                                 Number of
Purchaser             Date of Purchase  Shares        Aggregate Consideration

Donald J. Smith      September 30, 2002  500,000        $ 3,500 in cash


Eric J. Sundsvold    June 30, 2002       500,000        $ 3,500 in cash



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

     See "Item 1.  Description of Business -- Plan of Operations."


ITEM 7.     FINANCIAL STATEMENTS

     Please see pages F-1 through F-7.


ITEM 8.     CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE

     Not applicable.

                                      -10-


PART III

ITEM 9.     DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT

     The directors and executive officers of the Company, and their
respective ages, positions held in the Company, and duration as such, are
as follows:

                       Name           Age        Positions Held and Tenure

                   Blaize N. Kaduru    52        President, Secretary and
                                                 Treasurer and a Director
                                                 since December 18, 2002

                   Robert Pike         73        Vice President and a Director
                                                 since December 21, 1999


Business Experience

     Set forth below is a brief account of the education and business
experience during at least the past five years of each of the Company's
directors and executive officers, indicating the principal occupation and
employment during that period, and the name and principal business of the
organization in which such occupation and employment were carried out.

Biographical Information

     BLAIZE N. KADURU. Mr. Kaduru is an Adjunct Professor, teaching economics
and business related college courses at Wharton Junior College in Sugarland,
Texas, since January 2003. Previously, he was Executive Vice President of
Business Development for Wireless Communications Technology, Inc., a spin-off
of Prodigy Communications Inc. in Houston, Texas.

     ROBERT PIKE.  Mr. Pike has been Vice President and a Director of
the Company since December 21, 1999.  Mr. Pike is a retired banker.  For
more than the past five years, he has been an investor.  Also for more than
the past five years, Mr. Pike has been President and sole owner of Bob Pike
Associates, Inc., a real estate consulting and inspection firm, based in
Englewood, Colorado, that serves financial institutions.


                                      -11-


ITEM 10.    EXECUTIVE COMPENSATION

Cash Compensation

     During the fiscal year ended December 31, 2002, no executive officer
of the Company received cash compensation other than reimbursement of
expenses incurred on behalf of the Company.

Compensation Pursuant to Plans

     None.

Other Compensation

     None.

Compensation of Directors

     None.

Termination of Employment and Change of Control Arrangements

     None.

                                      -12-



ITEM 11.     SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     As of December 28, 2002, the persons listed in the table set forth below
were known by the Company to own or control beneficially more than five
percent of its outstanding common stock, par value $0.0001 per share, its
only class of outstanding securities.  The table also sets forth the total
number of shares of these securities owned by the officers and directors of
the Company as a group.

            Name and Address of            Number of Shares      Percentage
             Beneficial Owner             Owned Beneficially      of Class

             Donald J. Smith                  31,661,977(1)           47.0%
             2501 E. Third St.
             Casper, WY  82609

             Eric J. Sundsvold                 6,842,105              10.2%
             5121 S. Ironton Way
             Englewood, CO  80111

             Darrell Benjamin                  4,325,000               6.4%
             6658 S. Starlight Rd.
             Morrison, CO  80465



             All officers and directors       32,341,977              48.8%
             as a group (three persons)


(1)     The figure shown includes 10,000 shares held in the name of Suvo
        Corp.  Mr. Smith is the owner of Suvo Corp.


Changes in Control

      The Company knows of no arrangement or understanding, the operation of
which may at a subsequent date result in a change of control of the Company.


ITEM 12.    CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     During the fiscal year ended December 31, 2002, the Company did not
engage in any related-party transactions other than certain sales of shares.
See "Item 5.  Market for the Company's Common Equity and Related Stockholder
Matters -- Unregistered Sales of Equity Securities."

     There were no transactions, or series of transactions, for the fiscal
year ended December 31, 2002, nor are there any currently proposed
transactions, or series of the same, to which the Company is a party, in
which the amount involved exceeds $60,000 and in which to the knowledge
of the Company any director, executive officer, nominee, five-percent
shareholder or any member of the immediate family of the foregoing persons
have or will have a direct or indirect material interest.


                                      -13-


PART IV

ITEM 13.     EXHIBITS AND REPORTS ON FORM 8-K

Exhibits

      Exhibit No.      Description                 Location

         3.1           Articles of Incorporation   Incorporated by reference
                                                   to Exhibit 3.1 to the
                                                   Registrant's Registration
                                                   Statement on Form S-18,
                                                   Registration No. 33-28106,
                                                   effective July 21, 1989

         3.2           Bylaws                    Incorporated by reference to
                                                   to Exhibit 3.2 to the
                                                   Registrant's Registration
                                                   Statement on Form S-18,
                                                   Registration No. 33-28106,
                                                   effective July 21, 1989

         3.3           Amendment to Articles of    Incorporated by reference
                       Incorporation               to the Company's Annual
                                                   Report on Form 10-KSB for
                                                   the fiscal year ended
                                                   December 31, 1992

         4.1           Rights of Stockholders      Included in Exhibits 3.1,
                                                   3.2, and 3.3, above.


Reports on Form 8-K

      No reports on Form 8-K were filed during the fourth quarter of the
Company's fiscal year ended December 31, 2002.

                                      -14-


PART II  FINANCIAL INFORMATION

ITEM 7.  FINANCIAL STATEMENTS

       (a)  The audited financial statements of registrant for the
year ended December 31, 2002, follow.  The financial statements
reflect all adjustments which are, in the opinion of management,
necessary to a fair statement of the results for the period
presented.


                               YAAK RIVER RESOURCES, INC.
                             (A Development Stage Company)

                                  FINANCIAL STATEMENTS
                          Years Ended December 31, 2002 and 2001



To the Board of Directors
Yaak River Resources, Inc.
Casper, Wyoming

We have audited the accompanying balance sheets of Yaak River Resources, Inc. (A
Development  Stage  Company) as of December  31, 2002 and 2001,  and the related
statements of operations,  cash flows, and changes in  stockholders'  equity for
years  ended  December  31,  2002  and  2001 and for the  period  June 10,  1988
(inception)  to  December  31,  2002.   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 audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States. 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  statements
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 financial position of Yaak River Resources,  Inc. at
December 31, 2002 and 2001, and the results of its operations and its cash flows
for the years ended  December 31, 2001 and 2000 and for the period June 10, 1988
(inception)  to  December  31, 2002 in  conformity  with  accounting  principles
generally accepted in the United States.

The  accompanying  financial  statements  have been  prepared  assuming that the
Company  will  continue  as a  going  concern.  As  described  in  Note 1 to the
financial statements,  the Company is in the development stage, conditions exist
which raise substantial doubt about the Company's ability to continue as a going
concern  unless  it is  able to  generate  sufficient  cash  flows  to meet  its
obligations  and sustain its operations.  Management's  plans in regard to these
matters are  described in Note 6. The  financial  statements  do not include any
adjustments that might result from the outcome of this uncertainty.



Denver, Colorado
April 11, 2003


                                      F-1



                          Yaak River Resources, Inc.
                         (A Development Stage Company)
                                BALANCE SHEETS
                                  December 31,
                                                                 2002            2001
                                                                 ----            ----
ASSETS:
Current Assets:
Cash ........................................................   $     754    $   3,749
Investment - Properties .....................................      35,743       35,743
                                                                ---------    ---------
                                                                ---------    ---------
Total Current Assets ........................................      36,497       39,492
                                                                ---------    ---------

Other Assets:
Organizational Costs - Net of Amortization ..................        --           --
                                                                ---------    ---------
                                                                ---------    ---------
Total Other Assets ..........................................        --           --
                                                                ---------    ---------

TOTAL ASSETS ................................................   $  36,497    $  39,492
                                                                =========    =========


LIABILITIES AND STOCKHOLDERS' EQUITY:
Current Liabilities:
Accounts Payable ............................................   $     764    $   1,329
                                                                ---------    ---------
Total Current Liabilities ...................................         764        1,329
                                                                ---------    ---------


STOCKHOLDERS' EQUITY:
Preferred Stock, par value $.0001 per share,
  50,000,000 shares authorized, issued and outstanding - none        --           --
Series A Common Stock, par value $.0001 per share;
  250,000,000 shares, Issued and outstanding -
  67,308,857 and 66,308,857 shares in 2002 and 2001,
  respectively ..............................................       6,730        6,630
Series B Common Stock, par value $.0001 per share;
  250,000,000 shares authorized, issued and outstanding,
  None ......................................................        --           --
Capital paid in excess of par value .........................     378,099      371,199
Deficit accumulated during the development stage ............    (349,096)    (339,666)
                                                                ---------    ---------

Total Stockholders' Equity ..................................      35,733       38,163
                                                                ---------    ---------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY ..................   $  36,497    $  39,492
                                                                =========    =========

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


                                      F-2


                          Yaak River Resources, Inc.
                         (A Development Stage Company)
                            Statements of Operations

                                                                  June 10, 1988
                                         Year Ended               (Inception) to
                                         December 31,             December 31,
                                    2002           2001               2002
                                    ----           ----           --------------

Revenue ...................   $       --      $       --      $       --

Expenses:
Amortization ..............           --              --             1,500
Bank Charges ..............             21              16             582
Legal & Accounting ........          8,845          15,307         106,259
Director Fees .............           --              --               800
Office Expense ............           --              --             7,990
Stock Fees & Other Costs ..            564              60          10,948
Administration/Consulting .           --               967         127,075
Mining Assessments & Fees .           --              --            75,479
Bad Debt ..................           --              --             6,250
Rent/Telephone ............           --              --            12,213
                              ------------    ------------    ------------
  Total Expenses ..........          9,430          16,350         349,096

Net Loss Accumulated During
the Development Stage .....   $     (9,430)   $    (16,350)   $   (349,096)
                              ============    ============    ============
Nel Loss per common share
  is less than $.002 ......   $         *     $        *
                              ============    ============
Weighted average number of
 common shares outstanding      66,683,857      65,183,857
                              ============    ============

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


                                      F-3


                           Yaak River Resources, Inc.
                          (A Development Stage Company)
                            Statements of Cash Flows


                                                                                June 10, 1988
                                                             Year Ended         (Inception) to
                                                            December 31,        December 31,
                                                        2002           2001         2002
                                                        ----           ----     --------------

Cash Flows from Operating Activities:
Net Loss Accumulated During the
  Development Stage ..............................   $  (9,430)   $ (16,350)   $(349,096)
Adjustments to reconcile net loss to net cash
  used in operating activities
  Amortization and Depreciation ..................        --           --          1,500
  Organization Costs .............................        --           --         (1,500)
   Stock issued for services .....................        --           --          8,800
  (Decrease) Increase in Accounts Payable ........        (565)       1,329          764
                                                     ---------    ---------    ---------
Net Cash Flows Used In Operating Activities ......      (9,995)     (15,021)    (339,532)
                                                     ---------    ---------    ---------
Cash Flows from Investing Activities:
  Exchange of properties - net ...................        --           --        147,167
  Investment Purchase ............................        --           --       (305,410)
                                                     ---------    ---------    ---------
Net Cash Flow Used In Investing Activities .......        --           --       (158,243)
                                                     ---------    ---------    ---------
Cash Flows from Financing Activities:
  Loan from LP Investors .........................        --           --           --
  Proceeds from Long-Term Debt ...................        --           --        189,500
  Payment of Long-Term Debt ......................        --           --        (45,000)
  Proceeds from Sale of Stock ....................       7,000       10,500      354,029
                                                     ---------    ---------    ---------
Net Cash Flows Provided by Financing Activities ..       7,000       10,500      498,529
                                                     ---------    ---------    ---------
Net Increase (Decrease) in Cash ..................      (2,995)      (4,521)         754

Cash at beginning of period ......................       3,749        8,270         --
                                                     ---------    ---------    ---------
Cash at end of period ............................   $     754    $   3,749    $     754
                                                     =========    =========    =========
Supplemental Disclosure of Cash Flow Information:
  Cash paid during the period for interest .......   $    --      $    --      $    --
                                                     =========    =========    =========
  Cash paid during the period for income taxes ...   $    --      $    --      $    --
                                                     =========    =========    =========
Noncash Investing and financing activities:
 In 1999, the Company exchanged properties with
  a book value of $182,910 to a related party in
  payment of liabilities of $147,167 and land with
  book value of $35,743
In 2000, the Company issued 3,124,857 shares of
  of common stock in payment of notes payable
  of $22,000


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

                                      F-4


                           Yaak River Resources, Inc.
                          (A Development Stage Company)
                            Statements of Cash Flows

                                                                                      Deficit
                                                                      Capital Paid  Accum. During
                                                          Common      In Excess of  the Development
                                           # of Shares    Stock       Par Value        Stage         Totals
                                           ----------     -------     ------------  ---------------  ------

June 10, 1988 (Inception) ..............         --     $     --     $     --     $     --      $     --

Issuance of common stock:
  January 6, 1989 (for services) .......   10,000,000        1,000          500         --           1,500
  January 6, 1989 (for cash) ...........    5,000,000          500         --           --             500
  November 27, 1989 (Public offering) ..    2,666,000          266       12,353         --          12,619
Net Loss ...............................         --           --           --         (3,765)       (3,765)
                                           ----------   ----------   ----------   ----------    ----------
Balance - December 31, 1989 ............   17,666,000        1,766       12,853       (3,765)       10,854
                                           ----------   ----------   ----------   ----------    ----------

Net Loss ...............................         --           --           --        (10,129)      (10,129)
                                           ----------   ----------   ----------   ----------    ----------
Balance - December 31, 1990 ............   17,666,000        1,766       12,853      (13,894)          725
                                           ----------   ----------   ----------   ----------    ----------

Net Loss ...............................         --           --           --           (300)         (300)
                                           ----------   ----------   ----------   ----------    ----------
Balance - December 31, 1991 ............   17,666,000        1,766       12,853      (14,194)          425
                                           ----------   ----------   ----------   ----------    ----------

Issuance of common stock:
  January 10, 1992 (for assets YRML) ...   30,000,000        3,000      134,910         --         137,910
Net Loss ...............................         --           --           --        (47,589)      (47,589)
                                           ----------   ----------   ----------   ----------    ----------
Balance - December 31, 1992 ............   47,666,000        4,766      147,763      (61,783)       90,746
                                           ----------   ----------   ----------   ----------    ----------

Issuance of common stock:
  June 30, 1993 (for cash) .............    6,000,000          600      149,400         --         150,000
  June 30, 1993 (for services) .........    3,000,000          300         --           --             300
Net Loss ...............................         --           --           --        (54,951)      (54,951)
                                           ----------   ----------   ----------   ----------    ----------
Balance - December 31, 1993 ............   56,666,000        5,666      297,163     (116,734)      186,095
                                           ----------   ----------   ----------   ----------    ----------

Net Loss ...............................         --           --           --        (26,293)      (26,293)
                                           ----------   ----------   ----------   ----------    ----------
Balance - December 31, 1994 ............   56,666,000        5,666      297,163     (143,027)      159,802
                                           ----------   ----------   ----------   ----------    ----------

Net Loss ...............................         --           --           --        (17,764)      (17,764)
                                           ----------   ----------   ----------   ----------    ----------
Balance - December 31, 1995 ............   56,666,000        5,666      297,163     (160,791)      142,038
                                           ----------   ----------   ----------   ----------    ----------

Net Loss ...............................         --           --          7,500      (19,842)      (12,342)
                                           ----------   ----------   ----------   ----------    ----------
Balance - December 31, 1996 ............   56,666,000        5,666      304,663     (180,633)      129,696
                                           ----------   ----------   ----------   ----------    ----------

Net Loss ...............................         --           --           --        (24,037)      (24,037)
                                           ----------   ----------   ----------   ----------    ----------
Balance - December 31, 1997 ............   56,666,000        5,666      304,663     (204,670)      105,659
                                           ----------   ----------   ----------   ----------    ----------

Net Loss ...............................         --           --           --        (78,712)      (78,712)
                                           ----------   ----------   ----------   ----------    ----------
Balance - December 31, 1998 ............   56,666,000        5,666      304,663     (283,382)       26,947
                                           ----------   ----------   ----------   ----------    ----------

Net Loss ...............................         --           --           --        (15,204)      (15,204)
                                           ----------   ----------   ----------   ----------    ----------
Balance - December 31, 1999 ............   56,666,000        5,666      304,663     (298,586)       11,743
                                           ----------   ----------   ----------   ----------    ----------

Issuance of common stock for cash ......    3,000,000          300       20,700         --          21,000
Issuance of common stock for cash ......    1,000,000          100        6,900         --           7,000
Issuance of common stock for services ..    1,000,000          100        6,900         --           7,000
Issuance of common stock for debt ......    3,142,857          314       21,686         --          22,000
Net Loss for year ......................         --           --           --        (24,730)      (24,730)
                                           ----------   ----------   ----------   ----------    ----------
Balance - December 31, 2000 ............   64,808,857        6,480      360,849     (323,316)       44,013
                                           ----------   ----------   ----------   ----------    ----------

Issuance of common stock for cash ......    1,500,000          150       10,350         --          10,500
Net Loss ...............................         --           --           --        (16,350)      (16,350)
                                           ----------   ----------   ----------   ----------    ----------
Balance - December 31, 2001 ............   66,308,857        6,630      371,199     (339,666)       38,163
                                           ----------   ----------   ----------   ----------    ----------

Issuance of common stock for cash ......    1,000,000          100        6,900         --           7,000
Net Loss for year ......................         --           --           --         (9,430)       (9,430)
                                           ----------   ----------   ----------   ----------    ----------
Balance - December 31, 2002 ............   67,308,857   $    6,730   $  378,099   $ (349,096)   $   35,733
                                           ==========   ==========   ==========   ==========    ==========


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

                                      F-5




                           YAAK RIVER RESOURCES, INC.
                          (A Development Stage Company)
                          Notes to Financial Statements
                                December 31, 2002


Note 1 - Summary of Significant Accounting Policies:

     The  Company:

     On June 10, 1988, Yaak River Resources, Inc. (the Company) was incorporated
     under the laws of Colorado  under the name of  Andraplex  Corporation.  The
     name was changed at the annual  shareholder's  meeting on January 10, 1992.
     The Company's  primary  purpose is to engage in selected  acquisitions  and
     development of mineral and mining properties.

     The Company's fiscal year end is December 31.

     Development Stage Company

     The Company  has not earned  significant  revenue  from  planned  principal
     operations.  Accordingly,  the Company's activities have been accounted for
     as those of a  "Development  Stage  Enterprise"  as set forth in  Financial
     Accounting   Standards   Board  Statement  No.  7  ("SFAS  7").  Among  the
     disclosures  required by SFAS 7 are that the Company's financial statements
     be  identified  as  those  of a  development  stage  company,  and that the
     statements  of  operation,  stockholders'  equity  (deficit) and cash flows
     disclose activity since the date of the Company's inception.

     Basis of Accounting:

     The  accompanying  financial  statements  have been prepared on the accrual
     basis of accounting  in accordance  with  accounting  principles  generally
     accepted in the United States.

     Cash and Cash Equivalents:

     For purposes of the statement of cash flows, the Corporation  considers all
     cash and other highly liquid  investments with initial  maturities of three
     months or less to be cash equivalents.

     Estimates:

     The  preparation  of financial  statements  in  conformity  with  generally
     accepted  accounting  principles  requires management to make estimates and
     assumptions   that  affect  certain   reported   amounts  and  disclosures.
     Accordingly, actual results could differ from those estimates.

     Income Taxes

     The Company  accounts for income taxes under SFAS No. 109,  which  requires
     the asset and liability  approach to accounting  for s income taxes.  Under
     this method,  deferred  tax assets and  liabilities  are measured  based on
     differences  between  financial  reporting  and tax  bases  of  assets  and
     liabilities  measured using enacted tax rates and laws that are expected to
     be in effect when differences are expected to reverse.

                                      F-6



                           YAAK RIVER RESOURCES, INC.
                          (A Development Stage Company)
                          Notes to Financial Statements
                                December 31, 2002

Note 1 - Summary of Significant Accounting Policies: (Continued)

     Net (Loss) Per Common Share:

     The net (loss) per common  share of the Series A Common  Stock is  computed
     based on the weighted average number of shares outstanding.

     Other Comprehensive Income

     The Company has no material components of other comprehensive income (loss)
     and accordingly, net loss is equal to comprehensive loss in all periods.

Note 2 - Purchase of Properties:

     On  January  10,  1992,  at  the  Annual  Meeting  of   Shareholders,   the
     shareholders  voted  unanimously  to  purchase  certain  mineral and mining
     properties  (the  Properties)  located in the State of  Montana,  including
     leases,  drawings,  engineering  studies and other  tangible and intangible
     assets  associated  with the  Properties.  The seller of the Properties was
     Yaak River Mines,  Ltd. They received  30,000,000 shares of Series A Common
     Stock.  The issuance of the 30,000,000  shares of Series A Common Stock was
     exempt from  registration  under the exemption  provided in Section 4(2) of
     the Securities Act of 1933, as amended.

     The Company is the beneficiary of 16,000,000 of the above shares, which are
     being held in the Con Tolman Memorial Trust C. 8,000,000  additional shares
     of the Company were placed in the trust as part of the original purchase of
     the Company.

     On November 20, 1999,  the Company  voted to close the Con Tolman  Memorial
     Trust and  exchange of  23,168,000  shares for 92 building  lots in Victor,
     Colorado.  The  remaining  832,000  shares were  transferred  to Yaak River
     Resources, Nevada in lieu of payment of shareholder loans.

Note 3 - Capital Stock Transactions

     Initial Public Offering:

     In the Company's initial public offering,  which was closed on November 27,
     1989,  the Company  sold  2,580,000  units (the Units).  86,000  additional
     shares  were issued to the  underwriters.  Each Unit  consisted  of one (1)
     share of Series A Common Stock, one (1) A Warrant  exercisable at $.05, one
     (1) B Warrant  exercisable at $.10. Costs,  consisting of $9,444 and 86,000
     shares of Series A Common Stock, incurred to complete the registration were
     offset against the gross proceeds.

     Other Transactions

     In 2000, the Company issued 4,000,000 shares for $28,000 in cash, 1,000,000
     shares for services  estimated at $7,000, and 3,142,857 for cancellation of
     debt in the amount of $22,000.

     In 2001, the Company issued 1,500,000 shares for $10,500 in cash.

                                      F-7


                           YAAK RIVER RESOURCES, INC.
                          (A Development Stage Company)
                          Notes to Financial Statements
                                December 31, 2002


Note 4 - Yaak River Resources Timber Division, Limited Partnership:

     On August 14, 1992,  the Company formed a limited  partnership,  Yaak River
     Resources  Timber  Division  L.P.  (the  Partnership);  a Colorado  limited
     partnership,  with  subscriptions  for 40 Units at  $5,000  per Unit for an
     aggregate  price of $200,000.  Each Unit  contains  1/40th  interest in the
     Partnership and 150,000 shares of Series A Common Stock of the Company. The
     Company  is the  general  Partner  of  the  Partnership.  As a part  of the
     formation  of the  Partnership,  the  Company  agreed to reserve  6,000,000
     shares of its Series A Common  Stock for the  Partnership.  Said  6,000,000
     shares of Series A Common Stock  represents the shares offered in the Units
     issued by the  Partnership.  The  Partnership was formed for the purpose of
     developing  certain  available  natural  resources on properties  under the
     management of the Company.

     On June 30, 1993,  the Company sold Six Million  (6,000,000)  shares of its
     $0.0001 par value Series Common Stock for the issuance to the purchasers of
     the  Limited  Partnership  interests  in the Yaak River  Resources,  Timber
     Division L.P., for $150,000.

     On November 20, 1999,  the Company voted to terminate the  Partnership  and
     asset interests be distributed prorata.

Note 5 - Income Taxes

     There has been no provision  for U.S.  federal,  state,  or foreign  income
     taxes for any period because the Company has incurred losses in all periods
     and for all jurisdictions.

     Deferred income taxes reflect the net tax effects of temporary  differences
     between  the  carrying  amounts of assets  and  liabilities  for  financial
     reporting   purposes  and  the  amounts  used  for  income  tax   purposes.
     Significant components of deferred tax assets are as follows:

         Deferred tax assets
            Net operating loss carryforwards                       $ 349,096
            Valuation allowance for deferred tax assets             (349,096)
                                                                     -------
         Net deferred tax assets                                   $   --
                                                                     =======

     Realization  of deferred tax assets is dependent upon future  earnings,  if
     any,  the timing and amount of which are  uncertain.  Accordingly,  the net
     deferred tax assets have been fully offset by a valuation allowance.  As of
     December 31, 2002,  the Company had net  operating  loss  carryforwards  of
     approximately  $349,096  for federal and state income tax  purposes.  These
     carryforwards,  if not utilized to offset taxable income begin to expire in
     2002.  Utilization  of the net operating loss may be subject to substantial
     annual limitation due to the ownership change  limitations  provided by the
     Internal Revenue Code and similar state  provisions.  The annual limitation
     could  result  in  the   expiration  of  the  net  operating   loss  before
     utilization.




                                      F-8


                           YAAK RIVER RESOURCES, INC.
                          (A Development Stage Company)
                          Notes to Financial Statements
                                December 31, 2002


Note 6 - Going Concern:

     The accompanying financial statements have been prepared in conformity with
     accounting  principles  generally  accepted  in the  United  States,  which
     contemplates  continuation of the Company as a going concern. The Company's
     operations  have  generated  no  income  during  the  current  year and the
     Company's deficit is $349,096.

     The future  success of the  Company is likely  dependent  on its ability to
     attain additional  capital to develop its proposed products and ultimately,
     upon its ability to attain future  profitable  operations.  There can be no
     assurance that the Company will be successful in obtaining such  financing,
     or that it will attain positive cash flow from operations.













                                      F-9


                                  SIGNATURES

     Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this Report to be signed
on its behalf by the undersigned, thereunto duly authorized.


Date:  April 29, 2003                      YAAK RIVER RESOURCES, INC.


                                   By: /s/   Blaize N. Kaduru
                                             Blaize N. Kaduru, President
                                             Secretary and Treasurer


     Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following person on behalf of the
Registrant and in the capacities and on the dates indicated.

          Name                       Title                            Date

/s/ Blaize N. Kaduru              President, Secretary, Treasurer,   April 29, 2003
    Blaize N. Kaduru              and a Director
                                 (Principal Executive Officer,
                                  Principal Financial Officer and
                                  Principal Accounting Officer)

/s/ Robert Pike                   Vice President and a Director      April 29, 2003
    Robert Pike


                                      -15-


                                 Certification

I,  Blaize  N.  Kaduru,  President,  Secretary  and  Treasurer,  of  Yaak  River
Resources, Inc. (the "Company:), certify that:

        1. I have reviewed this Form 10-KSB of the Company;

     2. Based on my  knowledge,  this annual  report does not contain any untrue
statement of a material fact or omit to state a material fact  necessary to make
the statements made, in light of the  circumstances  under which such statements
were made,  not  misleading  with  respect to the period  covered by this annual
report;


     3. Based on my knowledge,  the financial  statements,  and other  financial
information  included  in this annual  report,  fairly  present in all  material
respects the financial  condition,  results of operations  and cash flows of the
registrant as of, and for, the periods presented in this annual report;


     4. The  registrant's  other  certifying  officers and I are responsible for
establishing and maintaining  disclosure  controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:


          a) designed  such  disclosure  controls and  procedures to ensure that
     material information relating to the registrant, including its consolidated
     subsidiaries,  is  made  known  to  us by  others  within  those  entities,
     particularly  during  the  period  in which  this  annual  report  is being
     prepared;


          b) evaluated the effectiveness of the registrant's disclosure controls
     and procedures as of a date within 90 days prior to the filing date of this
     annual report (the "Evaluation Date"); and


          c)  presented  in  this  annual  report  our  conclusions   about  the
     effectiveness  of the  disclosure  controls  and  procedures  based  on our
     evaluation as of the Evaluation Date;


     5. The registrant's other certifying  officers and I have disclosed,  based
on our most  recent  evaluation,  to the  registrant's  auditors  and the  audit
committee  of  registrant's  board  of  directors  (or  persons  performing  the
equivalent function):


          a) all significant deficiencies in the design or operation of internal
     controls which could adversely affect the  registrant's  ability to record,
     process,  summarize and report  financial data and have  identified for the
     registrant's auditors any material weaknesses in internal controls; and


          b) any fraud,  whether or not material,  that  involves  management or
     other employees who have a significant  role in the  registrant's  internal
     controls; and


     6. The registrant's other certifying  officers and I have indicated in this
annual report whether or not there were significant changes in internal controls
or in other factors that could significantly affect internal controls subsequent
to the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.


Dated: April 29, 2003                           /s/ Blaize N. Kaduru
                                                Blaize N. Kaduru, President
                                                Secretary, Treasurer,
                                                and Principal Executive Officer,
                                                Principal Financial Officer and
                                                Principal Accounting Officer



                                      -16-