8-K/A

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K/A

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported): April 16, 2003

S3I Holdings, Inc.

(formerly Axtion Foods, Inc.)

(Exact Name of Registrant as Specified in its Charter)

California	001-31347	98-0336674
(State or Other Jurisdiction	(Commission	(I.R.S. Employer
of Incorporation)	File Number)	Identification No.)

5927 Priestly Drive, Carlsbad, CA	92008
(Address of Principal Executive Offices)	(Zip Code)

Registrant’s telephone number, including area code: (760) 602-1946

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

This Form 8-K is being filed to report the information required by Items 7(a) and (b) of the registrant’s form 8-K filed on April 17, 2003.

TABLE OF CONTENTS

	Item 1. Change in control of registrant.
	Item 2. Acquisition or disposition of assets.
	Item 3. Bankruptcy or receivership.
	Item 4. Changes in registrant’s certifying accountant.
	Item 5. Other Events.
	Item 6. Resignation & Appointment of Directors.
	Item 7. Financial Statements and Exhibits.
	Item 8. Change in Fiscal Year.
	Item 9. Regulation FD Disclosure.
	Item 10. Amendments to the Registrant’s Code of Ethics or Waiver of a Provision of the Code of Ethics.
	Item 11. Temporary Suspension of Trading Under Registrant’s Employee Benefit Plans.
	Item 12. Results of Operations and Financial Conditions.
SIGNATURES
EXHIBIT 23.1
EXHIBIT 99.1
EXHIBIT 99.2

Item 1. Change in control of registrant.

See Item 2. herein.

Item 2. Acquisition or disposition of assets.

Effective April 16, 2003, S3I Holdings, Inc. (the “Company”) closed a definitive agreement to acquire all of the issued and outstanding capital stock of SecureSoft Systems, Inc., a Delaware corporation (“SSI”), making SSI a wholly-owned subsidiary of the Company, and exchanging all of SSI’s capital stock for shares of Company’s authorized but unissued shares of common stock as provided in a written agreement attached as Exhibit 10.1 to the Company’s Report on Form 8-K filed on April 17, 2003. In connection with this agreement, the Company changed its name from Axtion Foods, Inc. to S3I Holdings, Inc.

Further in connection with this agreement, the controlling shareholders of the Company have surrendered their stock in exchange for transfer of all right, title and interest to the sports nutrition products developed by the Company since its inception. In accordance with that agreement, it is the intention of the parties that the Company would acquire all of the issued and outstanding capital stock of SSI in exchange solely for the number of shares of the Company’s authorized but unissued common stock and that the exchange qualify as a tax-free reorganization under Section 368(a)(1)(B) of the Internal Revenue Code of 1986, as amended, and related sections thereunder; and the exchange qualify as a transaction in securities exempt from registration or qualification under the Securities Act of 1933 and under the applicable securities laws of each state or jurisdiction where the shareholders reside.

Further in connection with said agreement, the Company’s sole officer and director resigned and appointed Fred Villella, Wayne Yamamoto, and Luke C. Zouvas as directors of the Company. Those individuals accepted their appointment as directors of the Company.

Item 3. Bankruptcy or receivership.

None.

Item 4. Changes in registrant’s certifying accountant.

None.

Item 5. Other Events.

None.

Item 6. Resignation & Appointment of Directors.

See Item 2.

Item 7. Financial Statements and Exhibits.

(a)	Financial Statements of Business Acquired.
	The audited financial statements required by this Item 7 related to SecureSoft Systems, Inc. as of and for the year ended December 31, 2002, are filed as an exhibit hereto and are incorporated herein by reference.
(b)	Pro Forma Financial Information.
	The pro forma financial information required by this Item 7 for the combined results of S3I Holdings, Inc. and SecureSoft Systems, Inc. as of and for the period ended December 31, 2002, is filed as an exhibit hereto and is incorporated herein by reference.
(c)	Exhibits.

Exhibit	Description
23.1	Consent of Chisholm & Associates
99.1	SecureSoft Systems, Inc. audited (i) Balance Sheet as of December 31, 2002 and 2001; (ii) Statement of Income for the years ended December 31, 2002 and 2001; (iii) Statement of Cash Flows for the years ended December 31, 2002 and 2001; and (iv) related Notes to Financial Statements.
99.2	S3I Holdings, Inc. and SecureSoft Systems, Inc. unaudited pro forma (i) Combined Balance Sheet as of December 31, 2002; (ii) Combined Statement of Income for the year ended December 31, 2002; and (iii) related Notes to Combined Financial Statements.

Item 8. Change in Fiscal Year.

None.

Item 9. Regulation FD Disclosure.

None.

Item 10. Amendments to the Registrant’s Code of Ethics or Waiver of a Provision of the Code of Ethics.

None.

Item 11. Temporary Suspension of Trading Under Registrant’s Employee Benefit
Plans.

None.

Item 12. Results of Operations and Financial Conditions.

None.

SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	S3I HOLDINGS, INC.
Dated: July 2, 2003	By:	/s/ Fred Villella
		Name: Fred Villella Title: President

EX-23.1 3 a91191exv23w1.txt EXHIBIT 23.1 EXHIBIT 23.1 [CHISHOLM & ASSOCIATES LETTERHEAD] CONSENT OF INDEPENDENT AUDITORS We hereby consent to the use of our report for the fiscal years ended December 31, 2002 and 2001 dated February 6, 2003, in the Form 8K for S3I Holdings, Inc. /s/ CHISHOLM & ASSOCIATES Chisholm & Associates North Salt Lake, Utah June 30, 2003 EX-99.1 4 a91191exv99w1.txt EXHIBIT 99.1 EXHIBIT 99.1 SECURESOFT SYSTEMS, INC. Financial Statements December 31, 2002 and 2001 C O N T E N T S Independent Auditors' Report .......................................... 3 Balance Sheet ......................................................... 4 Statement of Operations ............................................... 5 Statement of Stockholders' Equity ..................................... 6 Statement of Cash Flows ............................................... 7 Notes to the Financial Statements ..................................... 8 2 INDEPENDENT AUDITOR'S REPORT To the Board of Directors and Stockholders of SecureSoft Systems, Inc. Carlsbad, CA We have audited the accompanying balance sheets of SecureSoft Systems, Inc. as of December 31, 2002 and 2001 and the related statements of operations, stockholders' equity and cash flows for the years then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of SecureSoft Systems, Inc. as of December 31, 2002 and 2001, and the results of its operations and its cash flows for the years then ended in conformity with generally accepted accounting principles in the United States of America. The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2, the Company has a negative current ratio and a lack of working capital which raises substantial doubt about its ability to continue as a going concern. Management's plans in regard to those matters are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. Chisholm & Associates North Salt Lake, Utah February 6, 2003 3 SECURESOFT SYSTEMS, INC. Balance Sheets

ASSETS December 31, 2002 2001 ----------- ----------- Current Assets Cash $ 23,594 $ 63,334 Accounts Receivable 17,300 15,000 Advances - Related Party 35,000 35,000 Inventory 5,244 -- ----------- ----------- Total Current Assets 81,138 113,334 Equipment, Net 19,226 14,935 Other Assets Software Development Costs, Net 170,298 103,054 Deposits 8,345 -- ----------- ----------- Total Other Assets 178,643 103,054 ----------- ----------- Total Assets $ 279,007 $ 231,323 =========== =========== LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities Accounts Payable $ 109,910 $ 104,978 Accrued Expenses 531,254 573,596 Current Portion of Long-Term Debt 195,032 166,507 ----------- ----------- Total Current Liabilities 836,196 845,081 Long-Term Liabilities Notes Payable 72,500 72,500 Notes Payable - Related Party 2,532 14,007 Convertible Debentures 120,000 80,000 Less: Current Portion of Long-Term Debt (195,032) (166,507) ----------- ----------- Total Long-Term Liabilities -- -- ----------- ----------- Total Liabilities 836,196 845,081 ----------- ----------- Stockholders' Equity Common Stock, Authorized 20,000,000 Shares, $.001 Par Value, Issued and Outstanding 14,622,197 14,622 14,622 Additional Paid in Capital 2,023,222 2,023,222 Retained Earnings (Deficit) (2,595,033) (2,651,602) ----------- ----------- Total Stockholders' Equity (557,189) (613,758) ----------- ----------- Total Liabilities and Stockholders' Equity $ 279,007 $ 231,323 =========== ===========

The accompanying notes are an integral part of these financial statements. 4 SECURESOFT SYSTEMS, INC. Statements of Operations

For the Year Ended December 31, --------------------------------- 2002 2001 ------------ ------------ Revenues $ 2,499,843 $ 549,900 Cost of Sales 231,646 93,285 ------------ ------------ Gross Profit (Loss) 2,268,197 456,615 ------------ ------------ Operating Expenses General & Administrative 2,167,337 1,533,147 ------------ ------------ Total Operating Expenses 2,167,337 1,533,147 ------------ ------------ Net Operating Income (Loss) 100,860 (1,076,532) ------------ ------------ Other Income(Expense) Interest Income 43 10 Interest Expense (43,774) (8,756) Other Income (Expense) 240 1,122 ------------ ------------ Total Other Income(Expense) (43,491) (7,624) ------------ ------------ Income (Loss) Before Income Taxes 57,369 (1,084,156) Income Tax Expense 800 800 ------------ ------------ Net Income (Loss) $ 56,569 $ (1,084,956) ============ ============ Net Income (Loss) Per Share $ 0.00 $ (0.08) ============ ============ Weighted Average Shares Outstanding 14,622,197 14,398,281 ============ ============

The accompanying notes are an integral part of these financial statements. 5 SECURESOFT SYSTEMS, INC. Statements of Stockholders' Equity (Deficit)

Common Stock Additional Retained ------------------------- Paid-in Earnings Shares Amount Capital (Deficit) ------ ------ ------- --------- Balance December 31, 2000 14,037,867 14,038 1,409,306 (1,566,646) January 2001 - stock issued for services at $1.00 per share 139,000 139 138,861 -- February 2001 - stock issued for cash at $1.50 per share 60,330 60 90,440 -- June 2001 - stock issued for services at $1.00 per share 300,000 300 299,700 -- October 2001 - stock issued for services at $1.00 per share 85,000 85 84,915 -- Net income (loss) for the period ended December 31, 2001 -- -- -- (1,084,956) ---------- ------ --------- ---------- Balance, December 31, 2001 14,622,197 14,622 2,023,222 (2,651,602) Net income (loss) for the year ended December 31, 2002 -- -- -- 56,569 ---------- ------ --------- ---------- Balance, December 31, 2002 14,622,197 $14,622 $2,023,222 $(2,595,033) ========== ======= ========== ===========

The accompanying notes are an integral part of these financial statements. 6 SECURESOFT SYSTEMS, INC. Statements of Cash Flows

For the Year Ended December 31, ----------------------------- 2002 2001 --------- ----------- Cash Flows from Operating Activities: Net Income (Loss) $ 56,569 $(1,084,956) Adjustments to Reconcile Net Loss to Net Cash Provided by Operations: Depreciation & Amortization 51,370 5,719 Stock Issued for Services -- 524,000 Change in Operating Assets and Liabilities: (Increase) Decrease in: Accounts Receivable (2,300) 5,000 Inventory (5,244) -- Increase (Decrease) in: Accounts Payable 4,931 69,249 Accrued Expenses (42,342) 315,996 --------- ----------- Net Cash Provided(Used) by Operating Activities 62,984 (164,992) Cash Flows from Investing Activities: Payments for Software Development Costs (109,819) (31,054) Payments for Deposits (8,345) -- Payments for Equipment (13,086) (10,855) --------- ----------- Net Cash Provided (Used) by Investing Activities (131,250) (41,909) Cash Flows from Financing Activities: Proceeds from Issuance of Common Stock -- 90,500 Proceeds from Issuance of Notes Payable 323,313 365,007 Principal Payments on Notes Payable (294,787) (216,100) --------- ----------- Net Cash Provided (Used) by Financing Activities 28,526 239,407 --------- ----------- Increase (Decrease) in Cash (39,740) 32,506 Cash and Cash Equivalents at Beginning of Period 63,334 30,828 --------- ----------- Cash and Cash Equivalents at End of Period $ 23,594 $ 63,334 ========= =========== Cash Paid For: Interest $ 43,517 $ 2,412 ========= =========== Income Taxes $ 800 $ -- ========= =========== Non-Cash Investing and Financing Activities: Shares Issued for Services $ -- $ 524,000 ========= ===========

The accompanying notes are an integral part of these financial statements. 7 SECURESOFT SYSTEMS, INC. Notes to the Financial Statements December 31, 2002 and 2001 NOTE 1 - Summary of Significant Accounting Policies a. Organization SecureSoft Systems, Inc. (the Company), was organized under the laws of the State of Delaware in August 1999. The Company is engaged in the business of developing HIPPA compliance software. b. Accounting Method The Company recognizes income and expense on the accrual basis of accounting. c. Revenue Recognition Revenue from the sale of software and consulting is recognized when an agreement is made, delivery is complete, no significant obligations remain unfulfilled and collection of the receivable is probable. In instances where a significant obligation exists, revenue recognition is delayed until the obligation has been satisfied. d. Receivables Accounts receivable is recorded net of an allowance account when management deems a receivable to be uncollectible. As of December 31, 2002 and 2001, all accounts receivable is deemed to be fully collectible. e. Cash and Cash Equivalents The Company considers all highly liquid investments with maturities of three months or less to be cash equivalents. f. Inventory Inventory consists of computer equipment which is held for resale. The equipment is stated at the lower of cost or market. g. Property and Equipment Property and Equipment consists of the following at December 31, 2002 and 2001:

2002 2001 -------- -------- Computers and Equipment $ 34,740 $ 21,655 Accumulated Depreciation (15,514) (6,720) -------- -------- Total Property & Equipment $ 19,226 $ 14,935 ======== ========

The provision for depreciation is calculated using the straight-line method over the estimated useful lives of the assets. Depreciation expense for the periods ended December 31, 2002 and 2001 is $8,795 and $5,719, respectively. In accordance with SFAS No. 144, the Company records impairment of long-lived assets to be held and used or to be disposed of when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than the carrying amount. At December 31, 2002 and 2001, no impairments have been recognized. 8 SECURESOFT SYSTEMS, INC. Notes to the Financial Statements December 31, 2002 and 2001 NOTE 1 - Summary of Significant Accounting Policies (Continued) h. Software Development Costs In accordance with SFAS No. 86, software development costs are expressed as incurred until technological feasibility has been established, at which time such costs are capitalized until the product is available for general release to customers. Capitalized costs are then amortized on a straight-line basis over the estimated product life, or on the ratio of current revenues to total projected product revenues, whichever is greater. Total capitalized software development costs at December 31, 2002 and 2001 was $212,873 and $103,054, respectively. Amortization expense for the periods ended December 31, 2002 and 2001 was $42,575 and $0, respectively. Research and development costs are expressed as incurred. During 2002 and 2001, there were no research and development expenses. i. Provision for Income Taxes No provision for income taxes has been recorded due to net operating loss carryforwards totaling approximately $2,595,000 that will be offset against future taxable income. These NOL carryforwards begin to expire in the year 2019. Deferred tax assets and the valuation account is as follows at December 31, 2002 and 2001:

2002 2001 --------- --------- Deferred tax asset: NOL carrryforward $ 882,300 $ 901,545 Valuation allowance (882,300) (901,545) --------- --------- Total $ -- $ -- ========= =========

j. Stock Options As permitted by SFAS No. 123, the Company has elected to measure and record compensation cost relative to stock option costs in accordance with APB Opinion 25 which requires the Company to make pro forma disclosures of net income (loss) and basic earnings (loss) per share as if the fair values of the valuing stock options have been applied. k. Earnings (Loss) Per Share The computation of earnings (loss) per share of common stock is based on the weighted average number of shares outstanding at the date of the financial statements. Fully dilutive earnings per share has not been presented because it equals primary earnings per share.

FOR THE YEARS ENDED DECEMBER 31, --------------------------------- 2002 2001 ---- ---- Income (Loss) Numerator $ 56,569 $ (1,084,956) Shares (Denominator) 14,622,197 14,398,281 ----------- ------------ Per Share Amount $ 0.00 $ (0.08) =========== ============

9 SECURESOFT SYSTEMS, INC. Notes to the Financial Statements December 31, 2002 and 2001 NOTE 1 - Summary of Significant Accounting Policies (Continued) l. Use of Estimates in the Preparation of Financial Statements The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and expenses during the reporting period. In these financial statements, assets, liabilities and expenses involve extensive reliance on management's estimates. Actual results could differ from those estimates. m. Financial Instruments The recorded amounts for financial instruments, including cash equivalents, receivables, investments, accounts payable and accrued expenses, and long-term debt approximate their market values as of December 31, 2002 and 2001. The Company has no investments in derivative financial instruments. NOTE 2 - Going Concern The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. The Company has negative working capital and is dependent upon financing to continue operations. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. It is management's plan to continue to increase revenues through additional contracts to provide services. The Company will also raise funds from investors as needed or negotiate loan instruments to provide necessary capital. NOTE 3 - Related Party Transactions During 2002 and 2001 an officer loaned the Company $273,312 and $25,007, respectively. During 2002 and 2001, the Company paid to the officer $284,787 and $16,000, respectively. As of December, 2002 and 2001, the balance of the note payable is $1,032 and $12,507, respectively. During 2002 and 2001, an officer loaned the Company $0 and $5,000, respectively. During 2002 and 2001, the Company paid the officer $0 and $3,500, respectively. As of December 31, 2002 and 2001, the balance of the note is $1,500 and $0 respectively. During 2001, former employees loaned the Company $62,500. In 2001, the former employees were paid $76,600. As of December 31, 2002 and 2001, the balance of the notes payable is $0. During 2000, the Company advanced $35,000 to an officer. As of December 31, 2002 and 2001, the balance of the advance is $35,000. NOTE 4 - Commitments and Contingencies In September 2002, the Company committed to an operating lease for office space. The lease requires a monthly payment of $5,695. The lease expires in June 2005. 10 SECURESOFT SYSTEMS, INC. Notes to the Financial Statements December 31, 2002 and 2001 NOTE 4 - Commitments and Contingencies (Continued) Future minimum lease payments on operating lease obligations are as follows at December 31, 2002: 2003 $ 68,340 2004 68,340 2005 34,170 -------- Total Operating Lease Obligations $170,850 ======== Rent expense from operating leases at December 31, 2002 and 2001 was $43,530 and $107,085. NOTE 5 - Long-Term Liabilities Long-term liabilities are detailed as follows at December 31, 2002 and 2001:

December 31, 2002 2001 --------- --------- Notes Payable: Note payable to an individual, bears interest at 10%, unsecured, payable upon demand $ 72,500 $ 72,500 --------- --------- Total Notes Payable 72,500 72,500 --------- --------- Notes Payable Related Party: Note payable to an officer, bears interest at 10%, unsecured, payable upon demand 1,032 12,507 Note payable to an officer, non-interest bearing, unsecured, payable upon demand 1,500 1,500 --------- --------- Total Notes Payable Related Party 2,532 14,007 --------- --------- Convertible Debentures: Note payable to a corporation, bears interest at 12%, unsecured, convertible into common stock at $0.50 per share until maturity; thereafter price is $0.25 per share, principal due at maturity, matured March 31, 2002, past due 70,000 80,000 Note payable to a corporation, bears interest at 12%, unsecured, convertible into common stock at $0.50 per share until maturity; thereafter price is $0.25 per share, principal due at maturity, matured December 31, 2002, past due 50,000 -- --------- --------- Total Convertible Debentures $ 120,000 $ 80,000 --------- --------- Total Long Term Liabilities $ 195,032 $ 166,507 --------- --------- Less current portion $(195,032) $(166,507) --------- --------- Net Long Term Liabilities $ -- $ -- ========= =========

11 SECURESOFT SYSTEMS, INC. Notes to the Financial Statements December 31, 2002 and 2001 NOTE 5 - Long Term Liabilities (Continued) Future minimum principal payments on long term liabilities are as follows at December 31, 2002: 2003 195,032 2004 -- 2005 -- 2006 -- 2007 -- -------- Total $195,032 ======== NOTE 6 - STOCK OPTIONS In December 2002, the Company granted stock options to qualified employees. The options expire 5 years from the date of issuance. The exercise price is $0.50. The total number of options granted was 285,000. The fair value of the stock options was determined using the Black-Scholes pricing model with the following assumptions: stock price at grant date of $0.50, risk free rate of 4.0%, life of 5 years, volatility of 0% with no dividend yield. In December 2002, the Company granted stock options to a qualified employee. The options expire 10 years from the date of issuance. The exercise price is $0.50. The total number of options granted was 600,000. The fair value of the stock options was determined using the Black-Scholes pricing model with the following assumptions: stock price at grant date of $0.50, risk free rate of 4.0%, life of 10 years, volatility of 0% with no dividend yield. In February 2002, the Company granted stock options to a qualified employee. The options expire 10 years from the date of issuance. The exercise price is $0.50. The total number of options granted was 219,387. The fair value of the stock options was determined using the Black-Scholes pricing model with the following assumptions: stock price at grant date of $0.50, risk free rate of 4.0%, life of 10 years, volatility of 0% with no dividend yield. In February 2002, the Company granted stock options to a qualified non-employee for services. The options expire 4 years from date of issuance. The exercise price is $0.50 per share. The total number of options granted was 50,000. The Company valued the options at $0. The fair value of the stock options was determined using the Black-Scholes pricing model with the following assumptions: stock price at grant date $0.50, risk free rate of 4.0%, life of 4 years, volatility of 0% with no dividend yield. In October 2001, the Company granted stock options to a qualified non-employee for services. The options expire 4 years from date of issuance. The exercise price is $0.50 per share. The total number of options granted was 80,000. The Company valued the options at $0. The fair value of the stock options was determined using the Black-Scholes pricing model with the following assumptions: stock price at grant date $0.50, risk free rate of 4.0%, life of 4 years, volatility of 0% with no dividend yield. 12 SECURESOFT SYSTEMS, INC. Notes to the Financial Statements December 31, 2002 and 2001 NOTE 6 - STOCK OPTIONS (Continued) In July 2001, the Company granted stock options to a qualified non-employee for services. The options expire 4 years from date of issuance. The exercise price is $1.00 per share. The total number of options granted was 100,000. The Company valued the options at $0. The fair value of the stock options was determined using the Black-Scholes pricing model with the following assumptions: stock price at grant date $1.00, risk free rate of 4.0%, life of 4 years, volatility of 0% with no dividend yield. In July 2001, the Company granted stock options to a qualified employee. The options expire 5 years from the date of issuance. The exercise price is $0.50. The total number of options granted was 5,000. The fair value of the stock options was determined using the Black-Scholes pricing model with the following assumptions: stock price at grant date of $0.50, risk free rate of 4.0%, life of 5 years, volatility of 0% with no dividend yield. In July 2001, the Company granted stock options to a qualified employee. The options expire 5 years from the date of issuance. The exercise price is $1.00. The total number of options granted was 250,000. The fair value of the stock options was determined using the Black-Scholes pricing model with the following assumptions: stock price at grant date of $1.00, risk free rate of 4.0%, life of 5 years, volatility of 0% with no dividend yield. In June 2001, the Company granted stock options to a qualified non-employee for services. The options expire 4 years from date of issuance. The exercise price is $0.50 per share. The total number of options granted was 50,000. The Company valued the options at $0. The fair value of the stock options was determined using the Black-Scholes pricing model with the following assumptions: stock price at grant date $0.50, risk free rate of 4.0%, life of 4 years, volatility of 0% with no dividend yield. In May 2001, the Company granted stock options to a qualified employee. The options expire 5 years from the date of issuance. The exercise price is $0.50. The total number of options granted was 100,000. The fair value of the stock options was determined using the Black-Scholes pricing model with the following assumptions: stock price at grant date of $0.50, risk free rate of 4.0%, life of 5 years, volatility of 0% with no dividend yield. In April 2001, the Company granted stock options to qualified employees. The options expire 5 years from the date of issuance. The exercise price is $0.50. The total number of options granted was 20,000. The fair value of the stock options was determined using the Black-Scholes pricing model with the following assumptions: stock price at grant date of $0.50, risk free rate of 4.0%, life of 5 years, volatility of 0% with no dividend yield. In April 2001, the Company granted stock options to a qualified non-employee for services. The options expire 4 years from date of issuance. The exercise price is $0.50 per share. The total number of options granted was 30,000. The Company valued the options at $0. The fair value of the stock options was determined using the Black-Scholes pricing model with the following assumptions: stock price at grant date $0.50, risk free rate of 4.0%, life of 4 years, volatility of 0% with no dividend yield. 13 SECURESOFT SYSTEMS, INC. Notes to the Financial Statements December 31, 2002 and 2001 NOTE 6 - STOCK OPTIONS (Continued) In March 2001, the Company granted stock options to a qualified employee. The options expire 5 years from the date of issuance. The exercise price is $0.50. The total number of options granted was 15,000. The fair value of the stock options was determined using the Black-Scholes pricing model with the following assumptions: stock price at grant date of $0.50, risk free rate of 4.0%, life of 5 years, volatility of 0% with no dividend yield. In February 2001, the Company granted stock options to a qualified employee. The options expire 5 years from the date of issuance. The exercise price is $0.50. The total number of options granted was 50,000. The fair value of the stock options was determined using the Black-Scholes pricing model with the following assumptions: stock price at grant date of $0.50, risk free rate of 4.0%, life of 5 years, volatility of 0% with no dividend yield. In January 2001, the Company granted stock options to a qualified non-employee for services. The options expire 2 years from date of issuance. The exercise price is $0.50 per share. The total number of options granted was 300,000. The Company valued the options at $0. The fair value of the stock options was determined using the Black-Scholes pricing model with the following assumptions: stock price at grant date $0.50, risk free rate of 4.0%, life of 2 years, volatility of 0% with no dividend yield. In January 2001, the Company granted stock options to a qualified non-employee for services. The options expire 4 years from date of issuance. The exercise price is $0.25 per share. The total number of options granted was 250,000. The Company valued the options at $0. The fair value of the stock options was determined using the Black-Scholes pricing model with the following assumptions: stock price at grant date $0.25, risk free rate of 4.0%, life of 4 years, volatility of 0% with no dividend yield. A summary of the option activity follows:

Weighted Average Options Exercise Outstanding Price ----------- ----- Outstanding, January 1, 2001 2,720,000 $0.92 Granted 1,250,000 0.59 Exercised -- -- Canceled/forfeited 1,224,375 0.57 Balances, December 31, 2001 2,745,625 0.92 Outstanding, January 1, 2002 2,745,625 $0.92 Granted 1,154,387 0.50 Exercised -- -- Canceled/forfeited 695,000 1.30 Balances, December 31, 2002 3,205,012 $0.47

Number of Weighted Options Average Weighted Outstanding at Remaining Average Exercise December 31, Contractual Exercise Prices 2002 Life Price ------ ---- ---- ----- $ 0.25 166,667 0.75 $ 0.25 $ 0.50 2,413,345 0.66 $ 0.50 $ 1.00 100,000 0.63 $ 1.00 $ 1.59 525,000 0.30 $ 1.59

14 SECURESOFT SYSTEMS, INC. Notes to the Financial Statements December 31, 2002 and 2001 NOTE 6 - STOCK OPTIONS (Continued) Proforma Net Income (Loss):

December 31, December 31, 2002 2001 ------- ----------- Net income(loss) as reported $56,569 $(1,084,956) Pro forma net income(loss) 56,569 (1,084,956) Basic income (loss) per share as reported 56,569 (1,084,956) Pro forma income (loss) per share 56,569 (1,084,956)

NOTE 7 - Subsequent Event On April 16, 2003, the Company completed an Agreement and Plan of Share Exchange with S3I Holdings (formerly Axtion Foods, Inc.) (S3I), a public California company. Pursuant to the agreement, the Company exchanged all of their outstanding shares of common stock for 15,702,197 shares of common stock of S3I. The acquisition has been recorded as a reverse acquisition whereby the Company is the accounting survivor and S3I is the legal survivor. 15 EX-99.2 5 a91191exv99w2.txt EXHIBIT 99.2 EXHIBIT 99.2 S3I HOLDINGS, INC. PROFORMA CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2002 S3I HOLDINGS, INC. Proforma Consolidated Balance Sheet

S3I Holding, Inc. SecureSoft (formerly Axtion Proforma Systems, Inc. Foods, Inc.) Proforma Consolidated Balance Balance Adjustments Balance 12/31/02 12/31/02 DR CR 12/31/02 ----------- --------- ----------- ---------- ---------- (unaudited) (unaudited) (unaudited) ASSETS Current Assets Cash and Cash Equivalents $ 23,594 $ 916 $ 24,510 Prepaid Expenses -- 10,960 10,960 Accounts Receivable, Net 17,300 -- 17,300 Advances - Related Party 35,000 -- 35,000 Inventory 5,244 -- 5,244 ----------- --------- ---------- Total Current Assets 81,138 11,876 93,014 ----------- --------- ---------- Equipment, Net 19,226 16,214 35,440 ----------- --------- ---------- Other Assets Software Development Costs, Net 170,298 -- Deposits 8,345 -- 8,345 ----------- --------- ---------- Total Other Assets 178,643 -- 8,345 ----------- --------- ---------- Total Assets $ 279,007 $ 28,090 $ 136,799 =========== ========= ========== LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities Accounts Payable & Accrued Expenses $ 641,164 $ 21,316 $ 662,480 Current Portion of Long-Term Debt 195,032 -- 195,032 ----------- --------- ---------- Total Current Liabilities 836,196 21,316 857,512 ----------- --------- ---------- Long-Term Liabilities Convertible Debentures 120,000 -- 120,000 Notes Payable 72,500 -- 72,500 Notes Payable- Related Party 2,532 2,532 Less: Current Portion of Long-Term Debt (195,032) -- (195,032) ----------- --------- ---------- Total Long-Term Liabilities -- -- -- ----------- --------- ---------- Stockholders' Equity Preferred Stock, Authorized 10,000,000 Shares, No Par Value, None Issued and Outstanding -- -- -- Common Stock, Authorized 100,000,000 Shares, No Par Value, 22,684,197 Shares Issued and Outstanding 14,622 157,539 14,622 1,716,781 1,874,320 Additional Paid in Capital 2,023,222 -- 2,023,222 -- Retained Earnings (Deficit) (2,595,033) (150,765) 150,765 (2,595,033) ----------- --------- ---------- Total Stockholders Equity (557,189) 6,774 (720,713) ----------- --------- ---------- Total Liabilities and Stockholders Equity $ 279,007 $ 28,090 $ 136,799 =========== ========= ==========

2 S3I HOLDINGS, INC. Proforma Statement of Operations

S3I Holding, Inc. SecureSoft (formerly Axtion Systems, Inc. Foods, Inc.) Proforma For January 1, 2002 For January 1, 2002 Proforma Consolidated through through Adjustments Balance December 31, 2002 December 31, 2002 DR CR December 31, 2002 ----------------- ----------------- -- -- ----------------- (unaudited) (unaudited) (unaudited) Revenues $ 2,499,843 $ 13,362 $2,513,205 ----------- --------- ---------- Cost of Goods Sold 231,646 4,449 236,095 ----------- --------- ---------- Gross Profit (Loss) 2,268,197 8,913 2,277,110 ----------- --------- ---------- Selling, General & Administrative 2,167,337 91,386 2,258,723 ----------- --------- ---------- Total Operating Expenses (2,167,337) (91,386) 2,258,723 ----------- --------- ---------- Income (Loss) from Operations 100,860 (82,473) 18,387 ----------- --------- ---------- Other Income (Expense) (44,291) (16,414) (60,705) ----------- --------- ---------- Net Income (Loss) $ 56,569 $ (98,887) $ (42,318) =========== ========= ==========

3 S3I HOLDINGS, INC. Notes to Pro Forma Consolidated Financial Statements December 31, 2002 NOTE 1 - Summary of Transaction On April 16, 2003, the Company completed an Agreement and Plan of Share Exchange between S3I Holding, Inc. (formerly Axtion Foods, Inc.) a public California corporation (S3I) (the Company) and SecureSoft Systems, Inc. a private Delaware corporation (SecureSoft). Pursuant to the plan, the Company canceled 20,000,000 shares of common stock and issued 15,702,197 shares of common stock for all of the outstanding common stock of SecureSoft and changed its name to S3I Holdings, Inc. The reorganization was recorded as a reverse acquisition using the purchase method of accounting. NOTE 2 - Management Assumptions The pro forma consolidated balance sheet and statements of operations assumes that the entities were together as of December 31, 2002. The pro forma consolidated balance sheet assumes the cancellation of 20,000,000 shares of common stock and issuance of 15,702,197 shares of common stock and the elimination of the retained deficit of S3I. There are no proforma adjustments for the statement of operations. 4 -----END PRIVACY-ENHANCED MESSAGE-----

EX-23.1

                                                                    EXHIBIT 23.1


                       [CHISHOLM & ASSOCIATES LETTERHEAD]


                        CONSENT OF INDEPENDENT AUDITORS


     We hereby consent to the use of our report for the fiscal years ended
December 31, 2002 and 2001 dated February 6, 2003, in the Form 8K for S3I
Holdings, Inc.


/s/ CHISHOLM & ASSOCIATES

Chisholm & Associates
North Salt Lake, Utah
June 30, 2003

EX-99.1

                                                                    EXHIBIT 99.1




                            SECURESOFT SYSTEMS, INC.

                              Financial Statements
                           December 31, 2002 and 2001

                                 C O N T E N T S
                                                                            
Independent Auditors' Report ..........................................        3

Balance Sheet .........................................................        4

Statement of Operations ...............................................        5

Statement of Stockholders' Equity .....................................        6

Statement of Cash Flows ...............................................        7

Notes to the Financial Statements .....................................        8







                                       2

                          INDEPENDENT AUDITOR'S REPORT


To the Board of Directors and Stockholders of
SecureSoft Systems, Inc.
Carlsbad, CA

We have audited the accompanying balance sheets of SecureSoft Systems, Inc. as
of December 31, 2002 and 2001 and the related statements of operations,
stockholders' equity and cash flows for the years then ended. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of SecureSoft Systems, Inc. as of
December 31, 2002 and 2001, and the results of its operations and its cash flows
for the years then ended in conformity with generally accepted accounting
principles in the United States of America.

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 2, the Company
has a negative current ratio and a lack of working capital which raises
substantial doubt about its ability to continue as a going concern. Management's
plans in regard to those matters are also described in Note 2. The financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.

Chisholm & Associates
North Salt Lake, Utah
February 6, 2003



                                       3

                            SECURESOFT SYSTEMS, INC.

                                 Balance Sheets



                                     ASSETS

                                                                               December 31,
                                                                         2002                2001
                                                                      -----------         -----------
                                                                                    
Current Assets
  Cash                                                                $    23,594         $    63,334
  Accounts Receivable                                                      17,300              15,000
  Advances - Related Party                                                 35,000              35,000
  Inventory                                                                 5,244                --
                                                                      -----------         -----------
    Total Current Assets                                                   81,138             113,334

  Equipment, Net                                                           19,226              14,935

Other Assets

  Software Development Costs, Net                                         170,298             103,054
  Deposits                                                                  8,345                --
                                                                      -----------         -----------
    Total Other Assets                                                    178,643             103,054
                                                                      -----------         -----------
    Total Assets                                                      $   279,007         $   231,323
                                                                      ===========         ===========

                      LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities

  Accounts Payable                                                    $   109,910         $   104,978
  Accrued Expenses                                                        531,254             573,596
  Current Portion of Long-Term Debt                                       195,032             166,507
                                                                      -----------         -----------
    Total Current Liabilities                                             836,196             845,081
Long-Term Liabilities
  Notes Payable                                                            72,500              72,500
  Notes Payable - Related Party                                             2,532              14,007
  Convertible Debentures                                                  120,000              80,000
  Less: Current Portion of Long-Term Debt                                (195,032)           (166,507)
                                                                      -----------         -----------
    Total Long-Term Liabilities                                              --                  --
                                                                      -----------         -----------

    Total Liabilities                                                     836,196             845,081
                                                                      -----------         -----------

Stockholders' Equity

  Common Stock, Authorized 20,000,000 Shares, $.001 Par Value,
    Issued and Outstanding 14,622,197                                      14,622              14,622
  Additional Paid in Capital                                            2,023,222           2,023,222
  Retained Earnings (Deficit)                                          (2,595,033)         (2,651,602)
                                                                      -----------         -----------
Total Stockholders' Equity                                               (557,189)           (613,758)
                                                                      -----------         -----------
    Total Liabilities and Stockholders' Equity                        $   279,007         $   231,323
                                                                      ===========         ===========




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

                                        4

                            SECURESOFT SYSTEMS, INC.

                            Statements of Operations



                                                 For the Year Ended
                                                     December 31,
                                           ---------------------------------
                                              2002                  2001
                                           ------------         ------------
                                                          
Revenues                                   $  2,499,843         $    549,900

Cost of Sales                                   231,646               93,285
                                           ------------         ------------
Gross Profit (Loss)                           2,268,197              456,615
                                           ------------         ------------

Operating Expenses

  General & Administrative                    2,167,337            1,533,147
                                           ------------         ------------
    Total Operating Expenses                  2,167,337            1,533,147
                                           ------------         ------------
Net Operating Income (Loss)                     100,860           (1,076,532)
                                           ------------         ------------

Other Income(Expense)
  Interest Income                                    43                   10
  Interest Expense                              (43,774)              (8,756)
  Other Income (Expense)                            240                1,122
                                           ------------         ------------
    Total Other Income(Expense)                 (43,491)              (7,624)
                                           ------------         ------------

Income (Loss) Before Income Taxes                57,369           (1,084,156)

Income Tax Expense                                  800                  800
                                           ------------         ------------
Net Income (Loss)                          $     56,569         $ (1,084,956)
                                           ============         ============
Net Income (Loss) Per Share                $       0.00         $      (0.08)
                                           ============         ============

Weighted Average Shares Outstanding          14,622,197           14,398,281
                                           ============         ============



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

                                        5

                            SECURESOFT SYSTEMS, INC.

                  Statements of Stockholders' Equity (Deficit)




                                                     Common Stock               Additional          Retained
                                              -------------------------          Paid-in            Earnings
                                                Shares           Amount          Capital           (Deficit)
                                                ------           ------          -------           ---------

                                                                                      
Balance December 31, 2000                     14,037,867         14,038         1,409,306         (1,566,646)
January 2001 - stock issued for
  services at $1.00 per share                    139,000            139           138,861               --

February 2001 - stock issued for
  cash at $1.50 per share                         60,330             60            90,440               --

June 2001 - stock issued for
  services at $1.00 per share                    300,000            300           299,700               --

October 2001 - stock issued for
  services at $1.00 per share                     85,000             85            84,915               --

Net income (loss) for the period ended
  December 31, 2001                                 --             --                --           (1,084,956)
                                              ----------         ------         ---------         ----------
Balance, December 31, 2001                    14,622,197         14,622         2,023,222         (2,651,602)

Net income (loss) for the year ended
  December 31, 2002                                 --             --                --               56,569

                                              ----------         ------         ---------         ----------
Balance, December 31, 2002                    14,622,197        $14,622        $2,023,222        $(2,595,033)
                                              ==========        =======        ==========        ===========



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

                                        6

                            SECURESOFT SYSTEMS, INC.

                            Statements of Cash Flows



                                                               For the Year Ended
                                                                  December 31,
                                                          -----------------------------
                                                            2002                2001
                                                          ---------         -----------
                                                                      
Cash Flows from Operating Activities:
  Net Income (Loss)                                       $  56,569         $(1,084,956)
  Adjustments to Reconcile Net Loss to Net Cash
    Provided by Operations:
     Depreciation & Amortization                             51,370               5,719
     Stock Issued for Services                                 --               524,000
  Change in Operating Assets and Liabilities:
     (Increase) Decrease in:
     Accounts Receivable                                     (2,300)              5,000
     Inventory                                               (5,244)               --
     Increase (Decrease) in:
     Accounts Payable                                         4,931              69,249
     Accrued Expenses                                       (42,342)            315,996
                                                          ---------         -----------

  Net Cash Provided(Used) by Operating Activities            62,984            (164,992)

Cash Flows from Investing Activities:
  Payments for Software Development Costs                  (109,819)            (31,054)
  Payments for Deposits                                      (8,345)               --
  Payments for Equipment                                    (13,086)            (10,855)
                                                          ---------         -----------

  Net Cash Provided (Used) by Investing Activities         (131,250)            (41,909)

Cash Flows from Financing Activities:
  Proceeds from Issuance of Common Stock                       --                90,500
  Proceeds from Issuance of Notes Payable                   323,313             365,007
  Principal Payments on Notes Payable                      (294,787)           (216,100)
                                                          ---------         -----------

  Net Cash Provided (Used) by Financing Activities           28,526             239,407
                                                          ---------         -----------

Increase (Decrease) in Cash                                 (39,740)             32,506

Cash and Cash Equivalents at Beginning of Period             63,334              30,828
                                                          ---------         -----------

Cash and Cash Equivalents at End of Period                $  23,594         $    63,334
                                                          =========         ===========

Cash Paid For:
  Interest                                                $  43,517         $     2,412
                                                          =========         ===========
  Income Taxes                                            $     800         $      --
                                                          =========         ===========
Non-Cash Investing and Financing Activities:
  Shares Issued for Services                              $    --           $   524,000
                                                          =========         ===========




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

                                        7

                            SECURESOFT SYSTEMS, INC.
                        Notes to the Financial Statements
                           December 31, 2002 and 2001

NOTE 1 - Summary of Significant Accounting Policies

      a.    Organization

            SecureSoft Systems, Inc. (the Company), was organized under the laws
      of the State of Delaware in August 1999. The Company is engaged in the
      business of developing HIPPA compliance software.

      b.    Accounting Method

            The Company recognizes income and expense on the accrual basis of
      accounting.

      c.    Revenue Recognition

            Revenue from the sale of software and consulting is recognized when
      an agreement is made, delivery is complete, no significant obligations
      remain unfulfilled and collection of the receivable is probable. In
      instances where a significant obligation exists, revenue recognition is
      delayed until the obligation has been satisfied.

      d.    Receivables

            Accounts receivable is recorded net of an allowance account when
      management deems a receivable to be uncollectible. As of December 31, 2002
      and 2001, all accounts receivable is deemed to be fully collectible.

      e.    Cash and Cash Equivalents

            The Company considers all highly liquid investments with maturities
      of three months or less to be cash equivalents.

      f.    Inventory

            Inventory consists of computer equipment which is held for resale.
      The equipment is stated at the lower of cost or market.

      g.    Property and Equipment

            Property and Equipment consists of the following at December 31,
      2002 and 2001:





                                                   2002             2001
                                                 --------         --------
                                                            
Computers and Equipment                          $ 34,740         $ 21,655
Accumulated Depreciation                          (15,514)          (6,720)
                                                 --------         --------
Total Property & Equipment                       $ 19,226         $ 14,935
                                                 ========         ========



            The provision for depreciation is calculated using the straight-line
      method over the estimated useful lives of the assets. Depreciation expense
      for the periods ended December 31, 2002 and 2001 is $8,795 and $5,719,
      respectively.

            In accordance with SFAS No. 144, the Company records impairment of
      long-lived assets to be held and used or to be disposed of when indicators
      of impairment are present and the undiscounted cash flows estimated to be
      generated by those assets are less than the carrying amount. At December
      31, 2002 and 2001, no impairments have been recognized.



                                       8

                            SECURESOFT SYSTEMS, INC.
                        Notes to the Financial Statements
                           December 31, 2002 and 2001

NOTE 1 - Summary of Significant Accounting Policies (Continued)

      h. Software Development Costs

            In accordance with SFAS No. 86, software development costs are
      expressed as incurred until technological feasibility has been
      established, at which time such costs are capitalized until the product is
      available for general release to customers. Capitalized costs are then
      amortized on a straight-line basis over the estimated product life, or on
      the ratio of current revenues to total projected product revenues,
      whichever is greater. Total capitalized software development costs at
      December 31, 2002 and 2001 was $212,873 and $103,054, respectively.
      Amortization expense for the periods ended December 31, 2002 and 2001 was
      $42,575 and $0, respectively. Research and development costs are expressed
      as incurred. During 2002 and 2001, there were no research and development
      expenses.

      i. Provision for Income Taxes

            No provision for income taxes has been recorded due to net operating
      loss carryforwards totaling approximately $2,595,000 that will be offset
      against future taxable income. These NOL carryforwards begin to expire in
      the year 2019.

            Deferred tax assets and the valuation account is as follows at
      December 31, 2002 and 2001:




                                 2002              2001
                              ---------         ---------
                                          
Deferred tax asset:
   NOL carrryforward          $ 882,300         $ 901,545
   Valuation allowance         (882,300)         (901,545)
                              ---------         ---------
Total                         $    --           $    --
                              =========         =========



      j. Stock Options

            As permitted by SFAS No. 123, the Company has elected to measure and
      record compensation cost relative to stock option costs in accordance with
      APB Opinion 25 which requires the Company to make pro forma disclosures of
      net income (loss) and basic earnings (loss) per share as if the fair
      values of the valuing stock options have been applied.

      k. Earnings (Loss) Per Share

            The computation of earnings (loss) per share of common stock is
      based on the weighted average number of shares outstanding at the date of
      the financial statements. Fully dilutive earnings per share has not been
      presented because it equals primary earnings per share.



                                     FOR THE YEARS ENDED
                                          DECEMBER 31,
                               ---------------------------------
                                  2002                 2001
                                  ----                 ----

                                            
Income (Loss) Numerator        $    56,569        $ (1,084,956)

Shares (Denominator)            14,622,197          14,398,281
                               -----------        ------------
Per Share Amount               $      0.00        $      (0.08)
                               ===========        ============



                                       9

                            SECURESOFT SYSTEMS, INC.
                        Notes to the Financial Statements
                           December 31, 2002 and 2001

NOTE 1 - Summary of Significant Accounting Policies (Continued)

      l. Use of Estimates in the Preparation of Financial Statements

            The preparation of financial statements in conformity with generally
      accepted accounting principles requires management to make estimates and
      assumptions that affect reported amounts of assets and liabilities,
      disclosure of contingent assets and liabilities at the date of the
      financial statements and expenses during the reporting period. In these
      financial statements, assets, liabilities and expenses involve extensive
      reliance on management's estimates. Actual results could differ from those
      estimates.

      m. Financial Instruments

            The recorded amounts for financial instruments, including cash
      equivalents, receivables, investments, accounts payable and accrued
      expenses, and long-term debt approximate their market values as of
      December 31, 2002 and 2001. The Company has no investments in derivative
      financial instruments.

NOTE 2 - Going Concern

            The accompanying financial statements have been prepared assuming
      that the Company will continue as a going concern. The Company has
      negative working capital and is dependent upon financing to continue
      operations. The financial statements do not include any adjustments that
      might result from the outcome of this uncertainty. It is management's plan
      to continue to increase revenues through additional contracts to provide
      services. The Company will also raise funds from investors as needed or
      negotiate loan instruments to provide necessary capital.

NOTE 3 - Related Party Transactions

            During 2002 and 2001 an officer loaned the Company $273,312 and
      $25,007, respectively. During 2002 and 2001, the Company paid to the
      officer $284,787 and $16,000, respectively. As of December, 2002 and 2001,
      the balance of the note payable is $1,032 and $12,507, respectively.

            During 2002 and 2001, an officer loaned the Company $0 and $5,000,
      respectively. During 2002 and 2001, the Company paid the officer $0 and
      $3,500, respectively. As of December 31, 2002 and 2001, the balance of the
      note is $1,500 and $0 respectively.

            During 2001, former employees loaned the Company $62,500. In 2001,
      the former employees were paid $76,600. As of December 31, 2002 and 2001,
      the balance of the notes payable is $0.

            During 2000, the Company advanced $35,000 to an officer. As of
      December 31, 2002 and 2001, the balance of the advance is $35,000.

NOTE 4 - Commitments and Contingencies

            In September 2002, the Company committed to an operating lease for
      office space. The lease requires a monthly payment of $5,695. The lease
      expires in June 2005.



                                       10

                            SECURESOFT SYSTEMS, INC.
                        Notes to the Financial Statements
                           December 31, 2002 and 2001

NOTE 4 - Commitments and Contingencies (Continued)

            Future minimum lease payments on operating lease obligations are as
      follows at December 31, 2002:
                                      
      2003                               $ 68,340
      2004                                 68,340
      2005                                 34,170
                                         --------
Total Operating Lease Obligations        $170,850
                                         ========





            Rent expense from operating leases at December 31, 2002 and 2001 was
      $43,530 and $107,085.

NOTE 5 - Long-Term Liabilities

            Long-term liabilities are detailed as follows at December 31, 2002
      and 2001:



                                                                                    December 31,
                                                                               2002              2001
                                                                            ---------         ---------
                                                                                        
Notes Payable:
Note payable to an individual, bears interest at
10%, unsecured, payable upon demand                                         $  72,500         $  72,500
                                                                            ---------         ---------

    Total Notes Payable                                                        72,500            72,500
                                                                            ---------         ---------

    Notes Payable Related Party:

    Note payable to an officer, bears interest at
    10%, unsecured, payable upon demand                                         1,032            12,507

    Note payable to an officer, non-interest
    bearing, unsecured, payable upon demand                                     1,500             1,500
                                                                            ---------         ---------

    Total Notes Payable Related Party                                           2,532            14,007
                                                                            ---------         ---------

  Convertible Debentures:

    Note payable to a corporation, bears interest at 12%, unsecured,
    convertible into common stock at $0.50 per share until maturity;
    thereafter price is $0.25 per share, principal due at maturity,
    matured March 31, 2002, past due                                           70,000            80,000

    Note payable to a corporation, bears interest at 12%, unsecured,
    convertible into common stock at $0.50 per share until maturity;
    thereafter price is $0.25 per share, principal due at maturity,
    matured December 31, 2002, past due                                        50,000              --
                                                                            ---------         ---------

   Total Convertible Debentures                                             $ 120,000         $  80,000
                                                                            ---------         ---------


         Total Long Term Liabilities                                        $ 195,032         $ 166,507
                                                                            ---------         ---------


         Less current portion                                               $(195,032)        $(166,507)
                                                                            ---------         ---------

            Net Long Term Liabilities                                       $    --           $    --
                                                                            =========         =========






                                       11

                            SECURESOFT SYSTEMS, INC.
                        Notes to the Financial Statements
                           December 31, 2002 and 2001

NOTE 5 - Long Term Liabilities (Continued)

            Future minimum principal payments on long term liabilities are as
      follows at December 31, 2002:
                              
   2003                          195,032
   2004                             --
   2005                             --
   2006                             --
   2007                             --
                                --------
     Total                      $195,032
                                ========




NOTE 6 - STOCK OPTIONS

      In December 2002, the Company granted stock options to qualified
      employees. The options expire 5 years from the date of issuance. The
      exercise price is $0.50. The total number of options granted was 285,000.
      The fair value of the stock options was determined using the Black-Scholes
      pricing model with the following assumptions: stock price at grant date of
      $0.50, risk free rate of 4.0%, life of 5 years, volatility of 0% with no
      dividend yield.

      In December 2002, the Company granted stock options to a qualified
      employee. The options expire 10 years from the date of issuance. The
      exercise price is $0.50. The total number of options granted was 600,000.
      The fair value of the stock options was determined using the Black-Scholes
      pricing model with the following assumptions: stock price at grant date of
      $0.50, risk free rate of 4.0%, life of 10 years, volatility of 0% with no
      dividend yield.

      In February 2002, the Company granted stock options to a qualified
      employee. The options expire 10 years from the date of issuance. The
      exercise price is $0.50. The total number of options granted was 219,387.
      The fair value of the stock options was determined using the Black-Scholes
      pricing model with the following assumptions: stock price at grant date of
      $0.50, risk free rate of 4.0%, life of 10 years, volatility of 0% with no
      dividend yield.

      In February 2002, the Company granted stock options to a qualified
      non-employee for services. The options expire 4 years from date of
      issuance. The exercise price is $0.50 per share. The total number of
      options granted was 50,000. The Company valued the options at $0. The fair
      value of the stock options was determined using the Black-Scholes pricing
      model with the following assumptions: stock price at grant date $0.50,
      risk free rate of 4.0%, life of 4 years, volatility of 0% with no dividend
      yield.

      In October 2001, the Company granted stock options to a qualified
      non-employee for services. The options expire 4 years from date of
      issuance. The exercise price is $0.50 per share. The total number of
      options granted was 80,000. The Company valued the options at $0. The fair
      value of the stock options was determined using the Black-Scholes pricing
      model with the following assumptions: stock price at grant date $0.50,
      risk free rate of 4.0%, life of 4 years, volatility of 0% with no dividend
      yield.



                                       12

                            SECURESOFT SYSTEMS, INC.
                        Notes to the Financial Statements
                           December 31, 2002 and 2001

NOTE 6 - STOCK OPTIONS (Continued)



      In July 2001, the Company granted stock options to a qualified
      non-employee for services. The options expire 4 years from date of
      issuance. The exercise price is $1.00 per share. The total number of
      options granted was 100,000. The Company valued the options at $0. The
      fair value of the stock options was determined using the Black-Scholes
      pricing model with the following assumptions: stock price at grant date
      $1.00, risk free rate of 4.0%, life of 4 years, volatility of 0% with no
      dividend yield.

      In July 2001, the Company granted stock options to a qualified employee.
      The options expire 5 years from the date of issuance. The exercise price
      is $0.50. The total number of options granted was 5,000. The fair value of
      the stock options was determined using the Black-Scholes pricing model
      with the following assumptions: stock price at grant date of $0.50, risk
      free rate of 4.0%, life of 5 years, volatility of 0% with no dividend
      yield.

      In July 2001, the Company granted stock options to a qualified employee.
      The options expire 5 years from the date of issuance. The exercise price
      is $1.00. The total number of options granted was 250,000. The fair value
      of the stock options was determined using the Black-Scholes pricing model
      with the following assumptions: stock price at grant date of $1.00, risk
      free rate of 4.0%, life of 5 years, volatility of 0% with no dividend
      yield.

      In June 2001, the Company granted stock options to a qualified
      non-employee for services. The options expire 4 years from date of
      issuance. The exercise price is $0.50 per share. The total number of
      options granted was 50,000. The Company valued the options at $0.

      The fair value of the stock options was determined using the Black-Scholes
      pricing model with the following assumptions: stock price at grant date
      $0.50, risk free rate of 4.0%, life of 4 years, volatility of 0% with no
      dividend yield.

      In May 2001, the Company granted stock options to a qualified employee.
      The options expire 5 years from the date of issuance. The exercise price
      is $0.50. The total number of options granted was 100,000. The fair value
      of the stock options was determined using the Black-Scholes pricing model
      with the following assumptions: stock price at grant date of $0.50, risk
      free rate of 4.0%, life of 5 years, volatility of 0% with no dividend
      yield.

      In April 2001, the Company granted stock options to qualified employees.
      The options expire 5 years from the date of issuance. The exercise price
      is $0.50. The total number of options granted was 20,000. The fair value
      of the stock options was determined using the Black-Scholes pricing model
      with the following assumptions: stock price at grant date of $0.50, risk
      free rate of 4.0%, life of 5 years, volatility of 0% with no dividend
      yield.

      In April 2001, the Company granted stock options to a qualified
      non-employee for services. The options expire 4 years from date of
      issuance. The exercise price is $0.50 per share. The total number of
      options granted was 30,000. The Company valued the options at $0. The fair
      value of the stock options was determined using the Black-Scholes pricing
      model with the following assumptions: stock price at grant date $0.50,
      risk free rate of 4.0%, life of 4 years, volatility of 0% with no dividend
      yield.



                                       13

                            SECURESOFT SYSTEMS, INC.
                        Notes to the Financial Statements
                           December 31, 2002 and 2001

NOTE 6 - STOCK OPTIONS (Continued)

      In March 2001, the Company granted stock options to a qualified employee.
      The options expire 5 years from the date of issuance. The exercise price
      is $0.50. The total number of options granted was 15,000. The fair value
      of the stock options was determined using the Black-Scholes pricing model
      with the following assumptions: stock price at grant date of $0.50, risk
      free rate of 4.0%, life of 5 years, volatility of 0% with no dividend
      yield.

      In February 2001, the Company granted stock options to a qualified
      employee. The options expire 5 years from the date of issuance. The
      exercise price is $0.50. The total number of options granted was 50,000.
      The fair value of the stock options was determined using the Black-Scholes
      pricing model with the following assumptions: stock price at grant date of
      $0.50, risk free rate of 4.0%, life of 5 years, volatility of 0% with no
      dividend yield.

      In January 2001, the Company granted stock options to a qualified
      non-employee for services. The options expire 2 years from date of
      issuance. The exercise price is $0.50 per share. The total number of
      options granted was 300,000. The Company valued the options at $0. The
      fair value of the stock options was determined using the Black-Scholes
      pricing model with the following assumptions: stock price at grant date
      $0.50, risk free rate of 4.0%, life of 2 years, volatility of 0% with no
      dividend yield.

      In January 2001, the Company granted stock options to a qualified
      non-employee for services. The options expire 4 years from date of
      issuance. The exercise price is $0.25 per share. The total number of
      options granted was 250,000. The Company valued the options at $0. The
      fair value of the stock options was determined using the Black-Scholes
      pricing model with the following assumptions: stock price at grant date
      $0.25, risk free rate of 4.0%, life of 4 years, volatility of 0% with no
      dividend yield.

      A summary of the option activity follows:



                                                   Weighted
                                                    Average
                                     Options       Exercise
                                   Outstanding       Price
                                   -----------       -----

                                               
Outstanding, January 1, 2001        2,720,000        $0.92
Granted                             1,250,000         0.59
Exercised                                --           --
Canceled/forfeited                  1,224,375         0.57
Balances, December 31, 2001         2,745,625         0.92

Outstanding, January 1, 2002        2,745,625        $0.92
Granted                             1,154,387         0.50
Exercised                                --           --
Canceled/forfeited                    695,000         1.30
Balances, December 31, 2002         3,205,012        $0.47






                  Number of           Weighted
                   Options             Average       Weighted
                Outstanding at        Remaining      Average
 Exercise        December 31,        Contractual     Exercise
  Prices            2002                Life          Price
  ------            ----                ----          -----


                                        
$    0.25          166,667             0.75        $    0.25
$    0.50        2,413,345             0.66        $    0.50
$    1.00          100,000             0.63        $    1.00
$    1.59          525,000             0.30        $    1.59




                                       14

                            SECURESOFT SYSTEMS, INC.
                        Notes to the Financial Statements
                           December 31, 2002 and 2001

NOTE 6 -  STOCK OPTIONS (Continued)

      Proforma Net Income (Loss):



                                                  December 31,     December 31,
                                                     2002              2001
                                                    -------        -----------
                                                             
Net income(loss) as reported                        $56,569        $(1,084,956)
Pro forma net income(loss)                           56,569         (1,084,956)
Basic income (loss) per share as reported            56,569         (1,084,956)
Pro forma income (loss) per share                    56,569         (1,084,956)


NOTE 7 - Subsequent Event

      On April 16, 2003, the Company completed an Agreement and Plan of Share
      Exchange with S3I Holdings (formerly Axtion Foods, Inc.) (S3I), a public
      California company. Pursuant to the agreement, the Company exchanged all
      of their outstanding shares of common stock for 15,702,197 shares of
      common stock of S3I. The acquisition has been recorded as a reverse
      acquisition whereby the Company is the accounting survivor and S3I is the
      legal survivor.

                                       15

EX-99.2

                                                                    EXHIBIT 99.2

                               S3I HOLDINGS, INC.


                                    PROFORMA
                                  CONSOLIDATED
                              FINANCIAL STATEMENTS

                                DECEMBER 31, 2002

                               S3I HOLDINGS, INC.
                       Proforma Consolidated Balance Sheet



                                                               S3I Holding, Inc.
                                                 SecureSoft     (formerly Axtion                                      Proforma
                                                Systems, Inc.     Foods, Inc.)               Proforma                Consolidated
                                                   Balance         Balance                  Adjustments                Balance
                                                  12/31/02         12/31/02            DR                CR           12/31/02
                                                 -----------       ---------       -----------       ----------       ----------
                                                 (unaudited)      (unaudited)                                        (unaudited)
                                                                                                      
                                                            ASSETS
Current Assets
  Cash and Cash Equivalents                      $    23,594       $     916                                          $   24,510
  Prepaid Expenses                                        --          10,960                                              10,960
  Accounts Receivable, Net                            17,300              --                                              17,300
  Advances - Related Party                            35,000              --                                              35,000
  Inventory                                            5,244              --                                               5,244
                                                 -----------       ---------                                          ----------
  Total Current Assets                                81,138          11,876                                              93,014
                                                 -----------       ---------                                          ----------
  Equipment, Net                                      19,226          16,214                                              35,440
                                                 -----------       ---------                                          ----------
Other Assets
  Software Development Costs, Net                    170,298              --
  Deposits                                             8,345              --                                               8,345
                                                 -----------       ---------                                          ----------
  Total Other Assets                                 178,643              --                                               8,345
                                                 -----------       ---------                                          ----------
  Total Assets                                   $   279,007       $  28,090                                          $  136,799
                                                 ===========       =========                                          ==========

                                                 LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities
  Accounts Payable & Accrued Expenses            $   641,164       $  21,316                                          $  662,480
  Current Portion of Long-Term Debt                  195,032              --                                             195,032
                                                 -----------       ---------                                          ----------
  Total Current Liabilities                          836,196          21,316                                             857,512
                                                 -----------       ---------                                          ----------
Long-Term Liabilities
  Convertible Debentures                             120,000              --                                             120,000
  Notes Payable                                       72,500              --                                              72,500
  Notes Payable- Related Party                         2,532           2,532
  Less: Current Portion of Long-Term Debt           (195,032)             --                                            (195,032)
                                                 -----------       ---------                                          ----------
  Total Long-Term Liabilities                             --              --                                                  --
                                                 -----------       ---------                                          ----------
Stockholders' Equity
  Preferred Stock, Authorized 10,000,000
   Shares, No Par Value, None Issued and
   Outstanding                                            --              --                                                  --
  Common Stock, Authorized 100,000,000
  Shares, No Par Value, 22,684,197 Shares
  Issued and Outstanding                              14,622         157,539            14,622        1,716,781        1,874,320
  Additional Paid in Capital                       2,023,222              --         2,023,222                                --
  Retained Earnings (Deficit)                     (2,595,033)       (150,765)                           150,765       (2,595,033)
                                                 -----------       ---------                                          ----------
  Total Stockholders Equity                         (557,189)          6,774                                            (720,713)
                                                 -----------       ---------                                          ----------
  Total Liabilities and Stockholders Equity      $   279,007       $  28,090                                          $  136,799
                                                 ===========       =========                                          ==========



                                       2

                               S3I HOLDINGS, INC.
                        Proforma Statement of Operations



                                                                   S3I Holding, Inc.
                                                  SecureSoft        (formerly Axtion
                                                 Systems, Inc.        Foods, Inc.)                                   Proforma
                                             For January 1, 2002  For January 1, 2002         Proforma             Consolidated
                                                   through              through              Adjustments              Balance
                                              December 31, 2002     December 31, 2002      DR           CR      December 31, 2002
                                              -----------------     -----------------      --           --      -----------------
                                                 (unaudited)          (unaudited)                                   (unaudited)
                                                                                                 
Revenues                                         $ 2,499,843          $  13,362                                          $2,513,205
                                                 -----------          ---------                                          ----------
Cost of Goods Sold                                   231,646              4,449                                             236,095
                                                 -----------          ---------                                          ----------
Gross Profit (Loss)                                2,268,197              8,913                                           2,277,110
                                                 -----------          ---------                                          ----------
Selling, General & Administrative                  2,167,337             91,386                                           2,258,723
                                                 -----------          ---------                                          ----------
Total Operating Expenses                          (2,167,337)           (91,386)                                          2,258,723
                                                 -----------          ---------                                          ----------
  Income (Loss) from Operations                      100,860            (82,473)                                             18,387
                                                 -----------          ---------                                          ----------
Other Income (Expense)                               (44,291)           (16,414)                                            (60,705)
                                                 -----------          ---------                                          ----------
Net Income (Loss)                                $    56,569          $ (98,887)                                         $  (42,318)
                                                 ===========          =========                                          ==========



                                       3

                               S3I HOLDINGS, INC.
              Notes to Pro Forma Consolidated Financial Statements
                                December 31, 2002


NOTE 1 - Summary of Transaction

      On April 16, 2003, the Company completed an Agreement and Plan of Share
Exchange between S3I Holding, Inc. (formerly Axtion Foods, Inc.) a public
California corporation (S3I) (the Company) and SecureSoft Systems, Inc. a
private Delaware corporation (SecureSoft). Pursuant to the plan, the Company
canceled 20,000,000 shares of common stock and issued 15,702,197 shares of
common stock for all of the outstanding common stock of SecureSoft and changed
its name to S3I Holdings, Inc. The reorganization was recorded as a reverse
acquisition using the purchase method of accounting.

NOTE 2 - Management Assumptions

      The pro forma consolidated balance sheet and statements of operations
assumes that the entities were together as of December 31, 2002.

      The pro forma consolidated balance sheet assumes the cancellation of
20,000,000 shares of common stock and issuance of 15,702,197 shares of common
stock and the elimination of the retained deficit of S3I.

      There are no proforma adjustments for the statement of operations.


                                       4