10QSB 1 syconet10qsb082002.txt U.S. SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-QSB (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED JUNE 30, 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: 0-29113 SYCONET.COM, INC. (Exact name of registrant as specified in its charter) Nevada 54-1838089 (State or jurisdiction of incorporation (I.R.S. Employer or organization) Identification No.) 5020 Campus Drive, Newport Beach, California 92660 (Address of principal executive offices) (Zip Code) Registrant's telephone number: (949) 474-2059 Securities registered pursuant to Section 12(b) of the Act: None Securities registered pursuant to Section 12(g) of the Act: Common Stock, $0.001 Par Value Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) been subject to such filing requirements for the past 90 days. Yes X No . As of June 30, 2002, the Registrant had 46,668,848 shares of common stock issued and outstanding. Transitional Small Business Disclosure Format (check one): Yes No X. TABLE OF CONTENTS PART I - FINANCIAL INFORMATION PAGE ITEM 1. FINANCIAL STATEMENTS BALANCE SHEET AS OF JUNE 30, 2002 3 STATEMENTS OF OPERATIONS FOR THE SIX AND THREE MONTHS ENDED JUNE 30, 2002 AND JUNE 30, 2001 4 STATEMENTS OF CASH FLOWS FOR THE SIX MONTHS ENDED JUNE 30, 2002 AND JUNE 30, 2001 5 NOTES TO FINANCIAL STATEMENTS 6 ITEM 2. PLAN OF OPERATION 9 PART II - OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS 13 ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS 13 ITEM 3. DEFAULTS UPON SENIOR SECURITIES 13 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS 14 ITEM 5. OTHER INFORMATION 14 ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K 14 SIGNATURE 14 PART I - FINANCIAL INFORMATION ITEM 1. FINANCAL STATEMENTS. SYCONET.COM, INC. BALANCE SHEET JUNE 30, 2002 (Unaudited) ASSETS Total Assets $ 0 LIABILITIES AND STOCKHOLDERS' DEFICIT Current Liabilities Current maturities of long-term debt $ 44,041 Accounts payable and accrued expenses 877,494 Stock subscriptions refund payable 18,700 Total current liabilities 940,235 Total liabilities 940,235 Stockholders' Equity (Deficit) Preferred stock, authorized 1,000,000 shares; no shares outstanding Common stock, $0.001 and $0.0001 par value, authorized 500,000,000 shares; issued and outstanding 46,668,848 46,669 Additional paid-in capital 6,719,709 Retained (Deficit) (7,706,613) Total stockholders' equity (deficit) (940,235) Total liabilities and stockholders' equity (deficit) 0 See Notes to Financial Statements SYCONET.COM, INC. STATEMENTS OF OPERATIONS (Unaudited)
Six Months Ended Three Months Ended June 30 June 30 2002 2001 2002 2001 Net sales $ - $ 25,834 $ - $ 444 Cost of goods sold - 91,378 - - Gross profit (loss - (65,544) - 444 Operating expenses: Selling, general and administrative expenses 32,176 404,136 24,517 19,014 Operating (loss) (32,176) (469,680) (24,517) (18,570) Non operating expenses, net 2,037 (38,071) 1,019 1,607 Net (loss) $(34,213) $(507,751) $(25,536) $ (20,177) Loss per common share, basic and diluted $ (0.00) $ (0.01) $ (0.00) $ (0.00) Weighted average shares outstanding 44,876,182 34,137,321 46,668,848 34,137,321
See Notes to Financial Statements SYCONET.COM, INC. STATEMENTS OF CASH FLOWS (Unaudited) Six Months Ended June 30 2002 2001 Cash Flows From Operating Activities: Net (loss) $(34,213) $(507,751) Adjustments to reconcile net (loss) to net cash (used in) operating activities: Bad debt recoveries (6,616) Depreciation - 38,528 Common stock issued for services 5,500 0 Impairment loss on property and equipment - 192,054 Changes in assets and liabilities: (Increase) decrease in accounts receivable - 37,050 (Increase) decrease in inventory - 91,328 (Increase) decrease in other assets - 4,387 Increase (decrease) in accounts payable and accrued expenses 28,713 43,283 Net cash (used in) operating activities 0 (107,737) Cash Flows From Investing Activities: Disposal of fixed assets 0 3,486 Net cash provided by investing activities 0 3,486 Cash Flows From Financing Activities: Proceeds from issuance of stock 0 51,502 Repayment of short-term loans to officers 0 40,000 Net cash provided by financing activities 0 91,502 Increase (decrease) in cash and cash equivalents 0 (12,749) Cash and Cash Equivalents Beginning 0 18,732 Ending $ 0 $ 5,983 Supplemental Disclosures of Cash Flow Information: Issuance of 5,500,000 common shares $ 5,500 $ 0 See Notes to Financial Statements SYCONET.COM, INC. NOTES TO FINANCIAL STATEMENTS (Unaudited) NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES The Corporation has prepared it financial statements as of June 30, 2002 in accordance with the rules and regulations of the Securities and Exchange Commission ("SEC"). These statements are unaudited and, in the opinion of management, include all adjustments (consisting of normal recurring adjustments and accruals) necessary to present fairly the financial condition and results of operations for the periods represented. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been omitted pursuant to such SEC rules and regulations. Operating results for the six months ended June 30, 2002 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2002. These financial statements and the accompanying notes should be read in conjunction with the audited financial statements included in the Company's Annual Report on Form 10-KSB for the year ending December 31, 2001. NOTE 2 - GOING CONCERN The accompanying financial statements have been prepared in conformity with generally accepted accounting principles, which contemplates continuation of the Corporation as a going concern. However, the Corporation has sustained substantial operating losses since inception and the Corporation has used substantial amounts of working capital in its operations. The Corporation presently has no assets, approximately $940,000 in current liabilities and a corresponding deficit amount. The above conditions raise substantial doubt about the entity's ability to continue as a going concern. In view of these matters, the Corporation's new management is seeking to enter into a business venture, merger or acquisition in order to remain in business. The Corporation is actively engaged in pursuing such an arrangement; however, the Corporation cannot assure that it will be able to find another company willing to take on the necessary risks involved in such an arrangement. Consequently there can be no assurance that the corporation will continue to exist. NOTE 3 - LOSS PER SHARE The effect on weighted average number of shares of diluted potential common stock are not included in the computation because their inclusion would have an antidilutive effect (reduce the loss per common share) applicable to the loss from operations for the six months ended June 30, 2002 and 2001. NOTE 4 - INCOME TAXES Deferred taxes are provided on the asset and liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carryforwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of asset and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. At June 30, 2002 and 2001 there were no temporary differences between books and tax. The operating loss carryforwards are fully reserved. NOTE 5 - LONG-TERM DEBT The carrying value of the Corporation's long-term debt approximates market value and is as follows: June 30 2002 2001 Note payable, due in monthly installment of $1,517, interest at 9.25%, uncollateralized, due on demand $26,380 $26,380 Note payable, interest at 9.25%, uncollateralized, due July 21, 2001 17,661 17,661 $44,041 $44,041 Less current maturities $44,041 $44,041 $ - $ - The above notes are in a default status. The Corporation is presently renegotiating the notes. NOTE 6 - INCOME TAX MATTERS The losses less non deductible stock-based compensation expense can be carried forward to off-set future taxable income, if any, through year 2021. No tax benefit has been recorded on the current and previous net operating loss carryforwards which were approximately $3,770,000 and $3,156,000 at December 31, 2001 and 2000 respectively. These losses expire at years 2021 and 2020, respectively. NOTE 7 - RELATED PARTY TRANSACTION Of the 5,500,000 shares issued (Note 9 - Stockholders' Equity) 1,800,000 were issued to Company officers. NOTE 8 - USE OF ESTIMATES The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. NOTE 9 - STOCK OPTIONS At June 30, 2002 there were 1,568,679 options vested and 1,657,000 options non- vested. NOTE 10 - STOCKHOLDERS' EQUITY The Corporation filed with the Securities Exchange Commission Form S-8 on February 6, 2002 registering 5,550,000 shares of its common stock as a "Non-Employee Directors and Consultants Retainer Stock Plan." The 5,550,000 shares were issued March 1, 2002 at a market value of $0.001 per share. On July 30, 2002 the Corporation amended the above S-8 filing to bring the Plan up to 25,000,000 shares including the 5,500,000 shares already issued. The Corporation increased its authorized common shares from 85,000,000 to 500,000,000 shares and changed the par value from $0.0001 to $0.001 (in connection with its re-domicile from Delaware to Nevada). This transaction was recorded as an increase in common stock ($37,052) and a decrease in additional paid-in capital. ITEM 2. PLAN OF OPERATION. The following discussion should be read in conjunction with the financial statements of the Registrant and notes thereto contained elsewhere in this report. Liquidity and Capital Resources. The Registrant's working capital decreased to a negative $940,235 at June 30, 2002 from a negative $911,522 at December 31, 2001. Since the Registrant has no operations or plans for such, and because its administrative expenses are minimal, it believes it has sufficient capital to fund its needs as it evaluates any options for future business opportunities. To meet existing operating expenses, the Registrant, as needed, secures short term loans. By doing so the Registrant maximizes its ability to generate income as it has no other means of revenue. Prior to 2001, the Registrant has funded its operations primarily through private equity financing from accredited investors pursuant to Regulation D, which is a limited offer and sale of securities without registration under the Securities Act of 1933. During the first six months of 2002, net cash provided by financing was $0 as compared to $91,502 provided by financing during the first six months of 2001. The Registrant has made no provision for any current or deferred U.S. federal, state income tax or benefit for any of the periods presented. The Registrant cannot provide an assurance as to when profits will materialize, if at all. Therefore, the Registrant cannot predict when it can use the net operating loss carry-forwards, which begin to expire in 2017, and which may be subject to certain limitations imposed under Section 382 of the Internal Revenue Code of 1986. Due to the uncertainty concerning the Registrant's ability to realize the related tax benefit, it has provided a full valuation allowance on the deferred tax asset, which consists primarily of net operating loss carry-forwards. Net cash used in operations was $0 during the first six months of 2002 compared to $(107,737) during the comparable 2001 six months. Net cash used in investing activities was $0 for the first six months of 2002 and 2001. Because of the Registrant's recurring losses, $0 assets and approximately $940,000 in liabilities and stockholders' deficit, its independent accountants have expressed substantial doubt as to the Registrant's ability to continue as a going concern. Inflation The Registrant's management does not believe that inflation has had or is likely to have any significant impact on the Registrant's operations. Management believes that the Registrant will be able to increase subscriber rates after its wireless systems are launched, if necessary, to keep pace with inflationary increases in costs. Capital Expenditures. There were no capital expenditures during the three months ended June 30, 2002. Twelve-Month Plan of Operation. The Registrant intends to take advantage of any reasonable business proposal presented which management believes will provide the Registrant and its stockholders with a viable business opportunity. The board of directors will make the final approval in determining whether to complete any acquisition, and unless required by applicable law, the articles of incorporation or bylaws or by contract, stockholders' approval will not be sought. The investigation of specific business opportunities and the negotiation, drafting, and execution of relevant agreements, disclosure documents, and other instruments will require substantial management time and attention and will require the Registrant to incur costs for payment of accountants, attorneys, and others. If a decision is made not to participate in or complete the acquisition of a specific business opportunity, the costs incurred in a related investigation will not be recoverable. Further, even if an agreement is reached for the participation in a specific business opportunity by way of investment or otherwise, the failure to consummate the particular transaction may result in the loss to the Registrant of all related costs incurred. Currently, management is not able to determine the time or resources that will be necessary to locate and acquire or merge with a business prospect. There is no assurance that the Registrant will be able to acquire an interest in any such prospects, products or opportunities that may exist or that any activity of the Registrant, regardless of the completion of any transaction, will be profitable. If and when the Registrant locates a business opportunity, management of the Registrant will give consideration to the dollar amount of that entity's profitable operations and the adequacy of its working capital in determining the terms and conditions under which the Registrant would consummate such an acquisition. Potential business opportunities, no matter which form they may take, will most likely result in substantial dilution for the Registrant's shareholders due to the issuance of stock to acquire such an opportunity. Risk Factors Connected with Plan of Operation. (a) Limited Prior Operations, History of Operating Losses, and Accumulated Deficit May Affect Ability of Registrant to Survive. The Registrant has had limited prior operations to date. Since the Registrant's principal activities recently have been limited to organizational activities, and seeking new business ventures, it has no recent record of any revenue-producing operations. Consequently, there is only a limited operating history upon which to base an assumption that the Registrant will be able to achieve its business plans. In addition, the Registrant has no assets. As a result, there can be no assurance that the Registrant will generate significant revenues in the future; and there can be no assurance that the Registrant will operate at a profitable level. Accordingly, the Registrant's prospects must be considered in light of the risks, expenses and difficulties frequently encountered in connection with the establishment of a new business. The Registrant has incurred losses from operations: $576,724 for the year ended December 31, 2000, $646,939 for the year ended December 31, 2001, and $34,213 for the six months ended June 30, 2002. At June 30, 2002, the Registrant had an accumulated deficit of $7,706,613. This raises substantial doubt about the Registrant's ability to continue as a going concern. (b) Need for Additional Financing May Affect Operations and Plan of Business. The working capital requirements associated with any adopted plan of business of the Registrant may be significant. The Registrant anticipates that it must seek financing to to start-up a new business line (an amount which is as yet to be determined. However, such financing, when needed, may not be available, or on terms acceptable to management. If funding is insufficient at any time in the future, the Registrant may not be able to take advantage of business opportunities or respond to competitive pressures, any of which could have a negative impact on the business, operating results and financial condition. In addition, if additional shares were issued to obtain financing, current shareholders may suffer a dilutive effect on their percentage of stock ownership in the Registrant. (c) Loss of Any of Current Management Could Have Adverse Impact on Business and Prospects for Registrant. The Registrant's success is dependent upon the hiring of key administrative personnel. None of the Registrant's officers, directors, and key employees have an employment agreement with the Registrant; therefore, there can be no assurance that these personnel will remain employed by the Registrant. Should any of these individuals cease to be affiliated with the Registrant for any reason before qualified replacements can be found, there could be material adverse effects on the Registrant=s business and prospects. In addition, all decisions with respect to the management of the Registrant will be made exclusively by the officers and directors of the Registrant. Shareholders of the Registrant will only have rights associated with such ownership to make decisions which effect the Registrant. The success of the Registrant, to a large extent, will depend on the quality of the directors and officers of the Registrant. Accordingly, no person should invest in the shares unless he is willing to entrust all aspects of the management of the Registrant to the officers and directors. (d) Limitations on Liability, and Indemnification, of Directors and Officers May Result in Expenditures by Registrant. The bylaws of the Registrant and the Nevada Revised Statutes generally provide for permissive indemnification of officers and directors and the Registrant may provide indemnification under such provisions. Any indemnification of directors, officer, or employees, could result in substantial expenditures being made by the Registrant in covering any liability of such persons or in indemnifying them. (e) Potential Conflicts of Interest May Affect Ability of Officers and Directors to Make Decisions in the Best Interests of Registrant. The officers and directors have other interests to which they devote time, either individually or through partnerships and corporations in which they have an interest, hold an office, or serve on boards of directors, and each will continue to do so notwithstanding the fact that management time may be necessary to the business of the Registrant. As a result, certain conflicts of interest may exist between the Registrant and its officers and/or directors which may not be susceptible to resolution. All of the potential conflicts of interest will be resolved only through exercise by the directors of such judgment as is consistent with their fiduciary duties to the Registrant. It is the intention of management, so as to minimize any potential conflicts of interest, to present first to the board of directors of the Registrant, any proposed investments for its evaluation. (f) Non-Cumulative Voting May Affect Ability of Shareholders to Influence Registrant Decisions. Holders of the shares are not entitled to accumulate their votes for the election of directors or otherwise. Accordingly, the holders of a majority of the shares present at a meeting of shareholders will be able to elect all of the directors of the Registrant, and the minority shareholders will not be able to elect a representative to the Registrant's board of directors. (g) Absence of Cash Dividends May Affect Investment Value of Registrant's Stock. The board of directors does not anticipate paying cash dividends on the shares for the foreseeable future and intends to retain any future earnings to finance the growth of the Registrant's business. Payment of dividends, if any, will depend, among other factors, on earnings, capital requirements, and the general operating and financial condition of the Registrant, and will be subject to legal limitations on the payment of dividends out of paid-in capital. (h) No Assurance of Continued Public Trading Market and Risk of Low Priced Securities May Affect Market Value of Registrant's Stock. There has been only a limited public market for the common stock of the Registrant. The common stock of the Registrant is not currently traded on any exchange. As a result, an investor may find it difficult to dispose of, or to obtain accurate quotations as to the market value of the Registrant's securities. In addition, the common stock is subject to the low-priced security or so called "penny stock" rules that impose additional sales practice requirements on broker- dealers who sell such securities. The Securities Enforcement and Penny Stock Reform Act of 1990 requires additional disclosure in connection with any trades involving a stock defined as a penny stock (generally, according to recent regulations adopted by the U.S. Securities and Exchange Commission, any equity security that has a market price of less than $5.00 per share, subject to certain exceptions), including the delivery, prior to any penny stock transaction, of a disclosure schedule explaining the penny stock market and the risks associated therewith. The regulations governing low-priced or penny stocks sometimes limit the ability of broker- dealers to sell the Registrant's common stock and thus, ultimately, the ability of the investors to sell their securities in the secondary market. (j) Shares Eligible For Future Sale. Approximately 20,000,000 shares of common stock which are currently held, directly or indirectly, by affiliates of the Registrant have been issued in reliance on the private placement exemption under the Securities Act of 1933. Such shares will not be available for sale in the open market without separate registration except in reliance upon Rule 144 under the Securities Act of 1933. In general, under Rule 144 a person (or persons whose shares are aggregated) who has beneficially owned shares acquired in a non-public transaction for at least one year, including persons who may be deemed affiliates of the Registrant (as that term is defined under that rule) would be entitled to sell within any three-month period a number of shares that does not exceed the greater of 1% of the then outstanding shares of common stock, or the average weekly reported trading volume during the four calendar weeks preceding such sale, provided that certain current public information is then available. If a substantial number of the shares owned by these shareholders were sold pursuant to Rule 144 or a registered offering, the market price of the common stock could be adversely affected. Forward Looking Statements. The foregoing Plan of Operation contains "forward looking statements" within the meaning of Rule 175 of the Securities Act of 1933, as amended, and Rule 3b-6 of the Securities Act of 1934, as amended, including statements regarding, among other items, the Registrant's business strategies, continued growth in the Registrant's markets, projections, and anticipated trends in the Registrant's business and the industry in which it operates. The words "believe," "expect," "anticipate," "intends," "forecast," "project," and similar expressions identify forward-looking statements. These forward- looking statements are based largely on the Registrant's expectations and are subject to a number of risks and uncertainties, certain of which are beyond the Registrant's control. The Registrant cautions that these statements are further qualified by important factors that could cause actual results to differ materially from those in the forward looking statements, including, among others, the following: reduced or lack of increase in demand for the Registrant's products, competitive pricing pressures, changes in the market price of ingredients used in the Registrant's products and the level of expenses incurred in the Registrant's operations. In light of these risks and uncertainties, there can be no assurance that the forward- looking information contained herein will in fact transpire or prove to be accurate. The Registrant disclaims any intent or obligation to update "forward looking statements." PART II - OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS. The Registrant is not a party to any material pending legal proceedings and, to the best of its knowledge, no such action by or against the Registrant has been threatened. ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS. None. ITEM 3. DEFAULTS UPON SENIOR SECURITIES. The Registrant is current carrying a note payable in the principal amount of $26,380, due in monthly installment of $1,517, interest at 9.25%, uncollateralized, and due on demand. In addition, the Registrant is carrying a note payable in the principal amount of $17,661, interest at 9.25%, uncollateralized, and due July 21, 2001. Both these notes are in a default status. The Registrant is presently renegotiating these notes. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. None. ITEM 5. OTHER INFORMATION. None. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K. Exhibits. Exhibits included or incorporated by reference herein are ser forth in the Exhibit Index. Reports on Form 8-K. No reports on Form 8-K were filed during the second quarter of the fiscal year covered by this Form 10-QSB. SIGNATURE 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. Syconet.com, Inc. Dated: August 20, 2002 By: /s/ Gary Borglund Gary Borglund, President EXHIBIT INDEX Number Description 3.1 Certificate of Incorporation, dated June 26, 1997 (incorporated by reference to Exhibit 3.1 of the Form 10-SB filed on January 25, 2000). 3.2 Certificate of Amendment of the Certificate of Incorporation, dated March 11, 1998 (incorporated by reference to Exhibit 3.1a of the Form 10-SB filed on January 25, 2000). 3.3 Certificate of Amendment of Certificate of Incorporation, dated February 17, 1999 (incorporated by reference to Exhibit 3.1b of the Form 10-SB filed on January 25, 2000). 3.4 Certificate of Amendment of Certificate of Incorporation, dated June 21, 2000 (incorporated by reference to Exhibit 3.1c of the Form SB-2/A filed on June 27, 2000). 3.5 Bylaws (incorporated by reference to Exhibit 3.2 of the Form 10-SB filed on January 25, 2000). 4.1 Specimen Common Stock Certificate (incorporated by reference to Exhibit 4 of the Form 10-SB/A filed on March 21, 2000). 4.2 1997 Incentive Compensation Program, as amended (incorporated by reference to Exhibit 10.1 of the Form SB-2 POS filed on August 28, 2000). 4.3 Common Stock Purchase Warrant issued to Alliance Equities, Inc., dated May 21, 2000 (incorporated by reference to Exhibit 4.1 to the Form SB-2 filed on June 2, 2000). 4.4 Form of Redeemable Common Stock Purchase Warrant to be issued to investors in the private placement offering, dated January 27, 2000 (incorporated by reference to Exhibit 4.2 to the Form SB-2/A filed on June 27, 2000). 4.5 Redeemable Common Stock Purchase Warrant issued to Diversified Leasing Inc., dated May 1, 2000 (incorporated by reference to Exhibit 4.3 of the Form SB-2/A filed on June 27, 2000). 4.6 Redeemable Common Stock Purchase Warrant issued to John P. Kelly, dated August 14, 2000 (incorporated by reference to Exhibit 4.4 of the Form SB-2 POS filed on August 28, 2000). 4.7 Redeemable Common Stock Purchase Warrant for Frank N. Jenkins, dated August 14, 2000 (incorporated by reference to Exhibit 4.5 of the Form SB-2 POS filed on August 28, 2000). 4.8 Redeemable Common Stock Purchase Warrant for Ronald Jenkins, dated August 14, 2000 (incorporated by reference to Exhibit 4.6 of the Form SB-2 POS filed on August 28, 2000). 4.9 Non-Employee Directors and Consultants Retainer Stock Plan, dated July 1, 2001 (incorporated by reference to Exhibit 4.1 of the Form S-8 filed on February 6, 2002). 4.10 Consulting Services Agreement between the Registrant and Richard Nuthmann, dated July 11, 2001 (incorporated by reference to Exhibit 4.2 of the Form S-8 filed on February 6, 2002). 4.11 Consulting Services Agreement between the Registrant and Gary Borglund, dated July 11, 2001 (incorporated by reference to Exhibit 4.3 of the Form S-8 filed on February 6, 2002). 4.12 Consulting Services Agreement between the Registrant and Richard Epstein, dated July 11, 2001 (incorporated by reference to Exhibit 4.4 of the Form S-8 filed on February 6, 2002). 10.1 Funding Agreement between the Registrant and Alliance Equities, Inc., dated December 16, 1999 (incorporated by reference to Exhibit 10.1 of the Form 10-SB filed on January 25, 2000). 10.2 Addendum to the between the Registrant and Alliance Equities, Inc., dated August 4, 2000 (incorporated by reference to Exhibit 10.6 of the Form SB-2 POS filed on August 28, 2000). 16.1 Letter on Change in Certifying Accountant (incorporated by reference to Exhibit 16 of the Form 8-K/A filed on August 24, 2001). 16.2 Letter on Change in Certifying Accountant (incorporated by reference to Exhibit 16 of the Form 8-K/A filed on March 7, 2002). 21 Subsidiaries of the Registrant (incorporated by reference to Exhibit 21 of the Form 10-SB/A filed on March 21, 2000).