Common use of Statements of Cash Flows Clause in Contracts

Statements of Cash Flows. 9 Notes to the Financial Statements.............................................11 72 [JONE▇, ▇▇NS▇▇ & ▇OMPANY LETTERHEAD] INDEPENDENT AUDITORS' REPORT The Board of Directors New Century Technologies Corporation (A Development Stage Company) Salt Lake City, Utah We have audited the accompanying balance sheets of New Century Technologies Corporation (a development stage company) as of February 28, 1997 and August 31, 1996 and 1995, and the related statements of operations, stockholders' equity, and cash flows for the periods then ended February 28, 1997, August 31, 1996, 1995 and 1994 and from inception on September 27, 1983 through February 28, 1997. 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. 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 New Century Technologies Corporation (a development stage company) as of February 28, 1997 and August 31, 1996 and 1995, and the results of its operations and its cash flows for the periods ended February 28, 1997, August 31, 1996, 1995 and 1994 and from inception on September 27, 1983 through February 28, 1997, in conformity with generally accepted accounting principles. The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 4 to the financial statements, the Company has no operating capital and has had no operations that together raise substantial doubt about its ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 4. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. /s/ Jone▇, ▇▇ns▇▇ & ▇ompany Jone▇, ▇▇ns▇▇ & ▇ompany March 29, 1997 73 NEW CENTURY TECHNOLOGIES CORPORATION (A DEVELOPMENT STAGE COMPANY) BALANCE SHEETS ASSETS AUGUST 31, FEBRUARY 28, -------------------------- 1997 1996 1995 ------------ ----------- ----------- CURRENT ASSETS Cash $ 59,785 $ -- $ -- ----------- ----------- ----------- Total Current Assets 59,785 $ -- $ -- ----------- ----------- ----------- TOTAL ASSETS $ 59,785 $ -- $ -- =========== =========== =========== LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Accounts payable $ 3,901 $ 3,716 $ 3,716 Accrued expense 18,060 15,560 10,560 Taxes payable 1,015 400 300 Notes payable -- shareholder (Notes 3 and 6) 50,000 50,000 50,000 ----------- ----------- ----------- Total Current Liabilities 72,976 69,676 64,576 ----------- ----------- ----------- COMMITMENT AND CONTINGENCY (Note 5) -- -- -- ----------- ----------- ----------- STOCKHOLDERS' EQUITY Common Stock $.001 par value, 50,000,000 shares authorized, 141,891 shares outstanding at February 28, 1997; 106,867 shares outstanding at August 31, 1996 and 1995 142 107 107 Additional paid-in capital 1,812,089 1,745,310 1,745,310 Loss accumulated during the development stage (1,825,422) (1,815,093) (1,809,993) ----------- ----------- ----------- Total Stockholders' Equity (13,191) (69,626) (64,576) ----------- ----------- ----------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 59,785 $ -- $ -- =========== =========== =========== The accompanying notes are an integral part of these financial statements 74 NEW CENTURY TECHNOLOGIES CORPORATION (A Development Stage Company) Statements of Operations From For The Inception on Six Months September 27, Ended For the Years Ended August 31, 1983 Through February 28, ------------------------------------ February 28, 1997 1996 1995 1994 1997 ------------ ------- -------- ----------- ------------- LOSS FROM DISCONTINUED OPERATIONS $(10,329) $(5,100) $(45,100) $(1,512,294) $(1,825,422) ======== ======= ======== =========== =========== WEIGHTED AVERAGE LOSS PER SHARE (Note 1) $ (0.07) $ (0.05) $ (0.42) $ (15.07) ======== ======= ======== =========== The accompanying notes are an integral part of these financial statements 5 75 NEW CENTURY TECHNOLOGIES CORPORATION (A Development Stage Company) Statements of Stockholders' Equity From inception on September 27, 1983 through February 28, 1997 Loss Accumulated Total Common Stock Additional During the Stock- ----------------- Paid-in Development holders' Shares Amount Capital Stage Equity ------ ------ ---------- ----------- -------- Issuance of 883 shares for $3.40 per share in October 1983 834 $1 $ 2,999 $ - $ 3,000 Issuance of 8,333 shares for $3.60 per share in October 1985 from public offering 8,333 8 29,992 - 30,000 Costs of public offering - - (6,324) - (6,324) Net loss from inception through August 31, 1987 - - - (23,599) (23,599) ----- -- ------- -------- -------- Balance, August 31, 1987 9,167 9 26,667 (23,599) 3,077 Net loss for the year ended August 31, 1988 - - - (4,256) (4,256) ----- -- ------- -------- -------- Balance, August 31, 1988 9,167 9 26,667 (27,855) (1,179) Net loss for the year ended August 31, 1989 - - - (100) (100) ----- -- ------- -------- -------- Balance, August 31, 1989 9,167 9 26,667 (27,955) (1,279) Payments of accounts payable by shareholder - - 1,179 - 1,179 Net loss for the year ended August 31, 1990 - - - (100) (100) ----- -- ------- -------- -------- Balance, August 31, 1990 9,167 9 27,846 (28,055) (200) Net loss for the year ended August 31, 1991 - - - (100) (100) ----- -- ------- -------- -------- Balance, August 31, 1991 9,167 $9 $27,846 $(28,155) $ (300) ----- -- ------- -------- -------- The accompanying notes are an integral part of these financial statements 6 76 NEW CENTURY TECHNOLOGIES CORPORATION (A Development Stage Company) Statements of Stockholders' Equity From inception on September 27, 1983 through February 28, 1997 LOSS ACCUMULATED TOTAL COMMON STOCK ADDITIONAL DURING THE STOCK- ------------------------ PAID-IN DEVELOPMENT HOLDERS' SHARES AMOUNT CAPITAL STAGE EQUITY --------- --------- ----------- --------------- ------------- Balance forward 9,167 $ 9 $ 27,846 $ (28,155) $ (300) Net loss for the year ended August 31, 1992 -- -- -- (3,205) (3,205) --------- --------- ----------- --------------- -------------- Balance, August 31, 1992 9,167 9 27,846 (31,360) (3,505) Issuance of shares to former directors for consulting services 833 1 165 -- 166 Issuance of shares for cash in August 1993 1,630 2 165,998 -- 166,000 Issuance of shares for services rendered and inventory 48,420 48 394,623 -- 394,671 Issuance of shares for cash in August 1993 550 1 12,499 -- 12,500 Net loss for the year ended August 31, 1993 -- -- -- (221,239) (221,239) --------- --------- ----------- -------------- ---------------- Balance, August 31, 1993 60,600 61 601,131 (252,599) 348,593 Issuance of shares for cash 41,017 41 1,042,184 -- 1,042,225 Issuance of shares for services 1,250 1 62,499 -- 62,500 Returned to authorized (2,500) (3) (497) -- (500) Net loss for the year ended August 31, 1994 -- -- -- (1,512,294) (1,512,294) --------- --------- ------------ -------------- ---------------- Balance, August 31, 1994 100,367 $ 100 $1,705,317 $(1,764,893) $ (59,476) --------- --------- ------------ -------------- ---------------- The accompanying notes are an integral part of these financial statements 77 NEW CENTURY TECHNOLOGIES CORPORATION (A Development Stage Company) Statements of Stockholders' Equity From inception on September 27, 1983 through February 28, 1997 LOSS ACCUMULATED TOTAL COMMON STOCK ADDITIONAL DURING THE STOCK- ------------------------ PAID-IN DEVELOPMENT HOLDERS' SHARES AMOUNT CAPITAL STAGE EQUITY --------- --------- ----------- ------------- ------------- Balance, August 31, 1994 100,367 $100 $1,705,317 $(1,764,893) $(59,476) Issuance of shares for cash at $5.00 per share 5,000 5 24,995 -- 25,000 Issuance of shares for services at $10.00 per share 1,500 2 14,998 -- 15,000 Net loss for the year ended August 31, 1995 -- -- -- (45,100) (45,100) ------- ---- ---------- ----------- -------- Balance, August 31, 1995 106,867 107 1,745,310 (1,809,993) (64,576) Net loss for the year ended August 31, 1996 -- -- -- (5,100) (5,100) ------- ---- ---------- ----------- -------- Balance, August 31, 1996 106,867 107 1,745,310 (1,815,093) (69,676) Payments of accounts payable by shareholder -- -- 1,814 -- 1,814 Issuance of shares for cash at $1.86 per share 35,000 35 64,965 -- 65,000 Fractional shares resulting from 1 for 20 reverse split 24 -- -- -- -- Net loss for the period ended February 28, 1997 -- -- -- (10,329) (10,329) ------- ---- ---------- ----------- -------- Balance, February 28, 1997 141,891 $142 $1,812,089 $(1,825,422) $(13,191) ======= ==== ========== =========== ======== The accompanying notes are an integral part of these financial statements From For the Inception on Six Months September 27, Ended For the Years Ended August 31, 1983 Through February 28, ------------------------------- February 28, 1997 1996 1995 1994 1997 -------- ------- -------- ----------- ------------- Cash Flows From Operations Net loss $(10,329) $(5,100) $(45,100) $(1,512,294) $(1,825,382) Amortization - - - - 1,877 Decrease in inventory - - - 400,000 400,000 Decrease in other assets - - - 4,000 - Increase in accounts payable 185 - - 1,571 - Increase in accrued expenses 2,500 5,000 5,000 5,000 18,060 Increase in taxes payable 615 100 100 100 1,015 Shares issued for services - - 15,000 62,500 77,500 Expenses paid by shareholder 1,814 - - - 5,595 Bad debt - note receivable - - - - 21,099 Loss from partnership interest - - - - 2,500 -------- ------- -------- ----------- ----------- Net Cash Flows Used From Operations (5,215) - (25,000) (1,039,123) (1,297,736) -------- ------- -------- ----------- ----------- Cash Flows From Investing Activities Organization costs - - - - (1,877) Note receivable - - - - (21,099) Investment in partnership - - - - (2,500) -------- ------- -------- ----------- ----------- Net Cash Flows Used From Investing Activities - - - - (25,476) -------- ------- -------- ----------- ----------- Cash Flows From Financing Activities Issuance (repayment) of notes payable - - - (2,602) 47,398 Issuance of common shares, net of stock offering costs 65,000 - 25,000 1,042,225 1,332,238 Stock returned to authorized - - - (500) (500) -------- ------- -------- ----------- ----------- Net Cash Flows Provided by Financing Activities $ 65,000 $ - $ 25,000 $1,039,123 $1,379,136 -------- ------- -------- ----------- ----------- The accompanying notes are an integral part of these financial statements. From For the Inception on Six Months September 27, Ended For the Years Ended August 31, 1983 Through February 28, ------------------------------ February 28, 1997 1996 1995 1994 1997 ------- ------- -------- ----------- ------------- Net Change in Cash $59,785 $ - $ - $ - $ 55,924 Cash at Beginning of Period - - - - - ------- ------- -------- ----------- --------- Cash at End of Period $59,785 $ - $ - $ - $ 55,924 ------- ------- -------- ----------- --------- Cash paid for: Interest $ - $ - $ - $ - $ - Income taxes $ 400 $ - $ - $ - $ 700 Non-Cash Financing Activities: Issuance of shares for services $ - $ - $15,000 $62,500 $ 77,500 Issuance of shares for inventory $ - $ - $ - $ - $400,000 The accompanying notes are an integral part of these financial statements. 80 NEW CENTURY TECHNOLOGIES CORPORATION (A Development Stage Company) Notes to the Financial Statements NOTE 1 -- SIGNIFICANT ACCOUNTING POLICIES

Statements of Cash Flows. 9 7 Notes to the Financial Statements.............................................11 72 [JONE......................... 9 ▇▇▇▇▇, ▇▇NS▇▇▇▇ & ▇OMPANY LETTERHEAD] COMPANY, LLC __________________________ CERTIFIED PUBLIC ACCOUNTANTS AND CONSULTANTS INDEPENDENT AUDITORS' REPORT ---------------------------- The Board of Directors New Century Technologies Corporation AMCI International, Inc. (A Development Stage Company) Salt Lake City, Utah We have audited the accompanying balance sheets sheet of New Century Technologies Corporation AMCI International, Inc. (a development stage company) as of February 28, 1997 and August December 31, 1996 and 1995, 1998 and the related statements of operations, stockholders' equityequity (deficit), and cash flows for the periods then years ended February 28, 1997, August December 31, 1996, 1995 1998 and 1994 1997 and from inception on September 27July 26, 1983 through February 28December 31, 19971998. 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. 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 New Century Technologies Corporation AMCI International, Inc. (a development stage company) as of February 28, 1997 and August December 31, 1996 and 1995, 1998 and the results of its operations and its cash flows for the periods years ended February 28, 1997, August December 31, 1996, 1995 1998 and 1994 1997 and from inception on September 27July 26, 1983 through February 28December 31, 1997, 1998 in conformity with generally accepted accounting principles. The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 4 2 to the financial statements, the Company is a development stage company and has no operating capital and has had no operations that together raise established source of revenue which raises substantial doubt about its ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 42. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. /s/ Jone▇▇▇▇▇, ▇▇ns▇▇▇▇ & Company ▇ompany Jone▇▇▇▇, ▇▇ns▇▇▇▇ & ▇ompany Company Salt Lake City, Utah March 299, 1997 73 NEW CENTURY TECHNOLOGIES CORPORATION 1999 AMCI INTERNATIONAL, INC. (A DEVELOPMENT STAGE COMPANYDevelopment Stage Company) BALANCE SHEETS Balance Sheet ASSETS AUGUST ------ December 31, FEBRUARY 28, -------------------------- 1997 1996 1995 1998 ------------ ----------- ----------- CURRENT ASSETS Cash $ 59,785 $ -- $ -- ----------- ----------- ----------- - Total Current Assets 59,785 $ -- $ -- ----------- ----------- ----------- - ---------- TOTAL ASSETS $ 59,785 $ -- $ -- =========== =========== =- ========== LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) ---------------------------------------------- CURRENT LIABILITIES Accounts payable $ 3,901 $ 3,716 $ 3,716 Accrued expense 18,060 15,560 10,560 Taxes payable 1,015 400 300 Notes payable -- shareholder (Notes 3 and 6) 50,000 50,000 50,000 ----------- ----------- ----------- 9,881 Total Current Liabilities 72,976 69,676 64,576 ----------- ----------- ----------- COMMITMENT AND CONTINGENCY (Note 5) -- -- -- ----------- ----------- 9,881 ----------- STOCKHOLDERS' EQUITY (DEFICIT) Common Stock stock: 50,000,000 shares authorized of $.001 0.001 par value, 50,000,000 1,471,391 shares authorized, 141,891 shares issued and outstanding at February 28, 1997; 106,867 shares outstanding at August 31, 1996 and 1995 142 107 107 1,471 Additional paid-in capital 1,812,089 1,745,310 1,745,310 Loss 73,654 Deficit accumulated during the development stage (1,825,42285,006) (1,815,093) (1,809,993) ----------- ----------- ----------- Total Stockholders' Equity (13,191Deficit) (69,6269,881) (64,576) ----------- ----------- ----------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) $ 59,785 $ -- $ -- =========== =========== - =========== The accompanying notes are an integral part of these financial statements 74 NEW CENTURY TECHNOLOGIES CORPORATION AMCI INTERNATIONAL, INC (A The Development Stage Company) Statements of Operations From For The Inception on Six Months September 27, Ended For the Years Ended August July 26, December 31 1983 Through --------------------------- December 31, 1998 1997 1998 -------- ------- -------- REVENUES $ - $ - $ - -------- ------- -------- EXPENSES 10,869 4,136 85,006 -------- ------- -------- NET LOSS (10,869) (4,136) (85,006) ======== ======= ======== BASIC LOSS PER SHARE OF COMMON STOCK $ (0.01) $ (0.00) ======== ======= The accompanying notes are an integral part of these financial statements AMCI INTERNATIONAL, INC. (A Development Stage Company Statements of Stockholders' Equity (Deficit) Deficit Accumulated Common Stock Additional During the ---------------------------- Paid-in Development Shares Amount Capital Stage ------------ ---------- ---------- ------------- At inception on July 26, 1983 Through February 28- $ - - $ - Common stock issued for services at $0.20 per share 4,772 5 949 - Common stock issued for cash at approximately $2.00 per share 12,500 12 24,988 - Common stock issued to acquire subsidiary recorded at predecessor cost of $0.00 27,000 27 (27) - Net loss from inception July 26, ------------------------------------ February 281983 to December 31, 1994 - - - (27,155) ----------- ------- --------- --------- Balance, December 31, 1994 44,272 44 25,910 (27,155) Net loss for the year ended December 31, 1995 - - - (100) ----------- ------- --------- --------- Balance, December 31, 1995 44,272 44 25,910 (27,155) Common stock issued for services at approximately $0.03 per share 1,427,088 1,427 39,800 - Stock split adjustment 31 - - Contributed capital - - 1,920 - Net loss for the year ended December 31, 1996 - - - (42,746) ----------- ------- --------- --------- Balance, December 31, 1996 1,471,391 1,471 67,630 (70,001) Contributed capital - - 2,991 - Net loss for the year ended December 31, 1997 1996 1995 1994 1997 ------------ - - - (4,136) ----------- ------- -------- --------- Balance, December 31, 1997 $ 1,471,391 $ 1,471 $ 70,621 $ (74,137) ----------- ------------- LOSS FROM DISCONTINUED OPERATIONS $------- -------- --------- Contributed capital - - 3,033 - Net loss for the year ended December 31, 1998 - - - (10,32910,869) $----------- ------- -------- --------- Balance, December 31, 1998 1,471,391 $ 1,471 $ 73,654 $ (5,10085,006) $(45,100) $(1,512,294) $(1,825,422) =========== ======= ======== =========== =========== WEIGHTED AVERAGE LOSS PER SHARE The accompanying notes are an integral part of these financial statements AMCI INTERNATIONAL, INC. (Note 1A Development Stage Company Statement of Cash Flows From Inception on For the Years Ended July 26, December 31 1983 Through ----------------------- December 31, 1998 1997 1998 --------- -------- ------------ CASH FLOWS FROM OPERATING ACTIVITIES Net loss $ (10,869) $ (0.074,136) $ (0.0585,006) Adjustments to reconcile net loss to net cash used by operating activities: Contributed capital for expenses 3,033 2,991 7,944 Stock issued for services - - 42,181 Increase (decrease) in accounts payable 7,836 1,145 9,881 Net Cash Used by Operating Activities - - (25,000) --------- -------- --------- CASH FLOWS FROM INVESTING ACTIVITIES - - - --------- -------- --------- CASH FLOWS FROM FINANCING ACTIVITIES Issuance of common stock for cash - - 25,000 --------- -------- --------- Net Cash Provided by Financing Activities - - 25,000 --------- -------- --------- NET INCREASE (DECREASE) IN CASH - - - --------- -------- --------- CASH AT BEGINNING OF PERIOD - - - --------- -------- --------- CASH AT END OF PERIOD $ (0.42) - $ (15.07) - $ - ======== ======= ======== =========== CASH PAID FOR: Interest $ - $ - $ - Income taxes $ - $ - $ - NON-CASH FINANCING ACTIVITIES Contributed capital for expenses $ 3,033 $ 2,991 $ 7,944 Common stock issued for services $ - $ - $ 42,181 The accompanying notes are an integral part of these financial statements 5 75 NEW CENTURY TECHNOLOGIES CORPORATION AMCI INTERNATIONAL, INC. (A Development Stage Company) Statements of Stockholders' Equity From inception on September 27, 1983 through February 28, 1997 Loss Accumulated Total Common Stock Additional During the Stock- ----------------- Paid-in Development holders' Shares Amount Capital Stage Equity ------ ------ ---------- ----------- -------- Issuance of 883 shares for $3.40 per share in October 1983 834 $1 $ 2,999 $ - $ 3,000 Issuance of 8,333 shares for $3.60 per share in October 1985 from public offering 8,333 8 29,992 - 30,000 Costs of public offering - - (6,324) - (6,324) Net loss from inception through August 31, 1987 - - - (23,599) (23,599) ----- -- ------- -------- -------- Balance, August 31, 1987 9,167 9 26,667 (23,599) 3,077 Net loss for the year ended August 31, 1988 - - - (4,256) (4,256) ----- -- ------- -------- -------- Balance, August 31, 1988 9,167 9 26,667 (27,855) (1,179) Net loss for the year ended August 31, 1989 - - - (100) (100) ----- -- ------- -------- -------- Balance, August 31, 1989 9,167 9 26,667 (27,955) (1,279) Payments of accounts payable by shareholder - - 1,179 - 1,179 Net loss for the year ended August 31, 1990 - - - (100) (100) ----- -- ------- -------- -------- Balance, August 31, 1990 9,167 9 27,846 (28,055) (200) Net loss for the year ended August 31, 1991 - - - (100) (100) ----- -- ------- -------- -------- Balance, August 31, 1991 9,167 $9 $27,846 $(28,155) $ (300) ----- -- ------- -------- -------- The accompanying notes are an integral part of these financial statements 6 76 NEW CENTURY TECHNOLOGIES CORPORATION (A Development Stage Company) Statements of Stockholders' Equity From inception on September 27, 1983 through February 28, 1997 LOSS ACCUMULATED TOTAL COMMON STOCK ADDITIONAL DURING THE STOCK- ------------------------ PAID-IN DEVELOPMENT HOLDERS' SHARES AMOUNT CAPITAL STAGE EQUITY --------- --------- ----------- --------------- ------------- Balance forward 9,167 $ 9 $ 27,846 $ (28,155) $ (300) Net loss for the year ended August 31, 1992 -- -- -- (3,205) (3,205) --------- --------- ----------- --------------- -------------- Balance, August 31, 1992 9,167 9 27,846 (31,360) (3,505) Issuance of shares to former directors for consulting services 833 1 165 -- 166 Issuance of shares for cash in August 1993 1,630 2 165,998 -- 166,000 Issuance of shares for services rendered and inventory 48,420 48 394,623 -- 394,671 Issuance of shares for cash in August 1993 550 1 12,499 -- 12,500 Net loss for the year ended August 31, 1993 -- -- -- (221,239) (221,239) --------- --------- ----------- -------------- ---------------- Balance, August 31, 1993 60,600 61 601,131 (252,599) 348,593 Issuance of shares for cash 41,017 41 1,042,184 -- 1,042,225 Issuance of shares for services 1,250 1 62,499 -- 62,500 Returned to authorized (2,500) (3) (497) -- (500) Net loss for the year ended August 31, 1994 -- -- -- (1,512,294) (1,512,294) --------- --------- ------------ -------------- ---------------- Balance, August 31, 1994 100,367 $ 100 $1,705,317 $(1,764,893) $ (59,476) --------- --------- ------------ -------------- ---------------- The accompanying notes are an integral part of these financial statements 77 NEW CENTURY TECHNOLOGIES CORPORATION (A Development Stage Company) Statements of Stockholders' Equity From inception on September 27, 1983 through February 28, 1997 LOSS ACCUMULATED TOTAL COMMON STOCK ADDITIONAL DURING THE STOCK- ------------------------ PAID-IN DEVELOPMENT HOLDERS' SHARES AMOUNT CAPITAL STAGE EQUITY --------- --------- ----------- ------------- ------------- Balance, August 31, 1994 100,367 $100 $1,705,317 $(1,764,893) $(59,476) Issuance of shares for cash at $5.00 per share 5,000 5 24,995 -- 25,000 Issuance of shares for services at $10.00 per share 1,500 2 14,998 -- 15,000 Net loss for the year ended August 31, 1995 -- -- -- (45,100) (45,100) ------- ---- ---------- ----------- -------- Balance, August 31, 1995 106,867 107 1,745,310 (1,809,993) (64,576) Net loss for the year ended August 31, 1996 -- -- -- (5,100) (5,100) ------- ---- ---------- ----------- -------- Balance, August 31, 1996 106,867 107 1,745,310 (1,815,093) (69,676) Payments of accounts payable by shareholder -- -- 1,814 -- 1,814 Issuance of shares for cash at $1.86 per share 35,000 35 64,965 -- 65,000 Fractional shares resulting from 1 for 20 reverse split 24 -- -- -- -- Net loss for the period ended February 28, 1997 -- -- -- (10,329) (10,329) ------- ---- ---------- ----------- -------- Balance, February 28, 1997 141,891 $142 $1,812,089 $(1,825,422) $(13,191) ======= ==== ========== =========== ======== The accompanying notes are an integral part of these financial statements From For the Inception on Six Months September 27, Ended For the Years Ended August 31, 1983 Through February 28, ------------------------------- February 28, 1997 1996 1995 1994 1997 -------- ------- -------- ----------- ------------- Cash Flows From Operations Net loss $(10,329) $(5,100) $(45,100) $(1,512,294) $(1,825,382) Amortization - - - - 1,877 Decrease in inventory - - - 400,000 400,000 Decrease in other assets - - - 4,000 - Increase in accounts payable 185 - - 1,571 - Increase in accrued expenses 2,500 5,000 5,000 5,000 18,060 Increase in taxes payable 615 100 100 100 1,015 Shares issued for services - - 15,000 62,500 77,500 Expenses paid by shareholder 1,814 - - - 5,595 Bad debt - note receivable - - - - 21,099 Loss from partnership interest - - - - 2,500 -------- ------- -------- ----------- ----------- Net Cash Flows Used From Operations (5,215) - (25,000) (1,039,123) (1,297,736) -------- ------- -------- ----------- ----------- Cash Flows From Investing Activities Organization costs - - - - (1,877) Note receivable - - - - (21,099) Investment in partnership - - - - (2,500) -------- ------- -------- ----------- ----------- Net Cash Flows Used From Investing Activities - - - - (25,476) -------- ------- -------- ----------- ----------- Cash Flows From Financing Activities Issuance (repayment) of notes payable - - - (2,602) 47,398 Issuance of common shares, net of stock offering costs 65,000 - 25,000 1,042,225 1,332,238 Stock returned to authorized - - - (500) (500) -------- ------- -------- ----------- ----------- Net Cash Flows Provided by Financing Activities $ 65,000 $ - $ 25,000 $1,039,123 $1,379,136 -------- ------- -------- ----------- ----------- The accompanying notes are an integral part of these financial statements. From For the Inception on Six Months September 27, Ended For the Years Ended August 31, 1983 Through February 28, ------------------------------ February 28, 1997 1996 1995 1994 1997 ------- ------- -------- ----------- ------------- Net Change in Cash $59,785 $ - $ - $ - $ 55,924 Cash at Beginning of Period - - - - - ------- ------- -------- ----------- --------- Cash at End of Period $59,785 $ - $ - $ - $ 55,924 ------- ------- -------- ----------- --------- Cash paid for: Interest $ - $ - $ - $ - $ - Income taxes $ 400 $ - $ - $ - $ 700 Non-Cash Financing Activities: Issuance of shares for services $ - $ - $15,000 $62,500 $ 77,500 Issuance of shares for inventory $ - $ - $ - $ - $400,000 The accompanying notes are an integral part of these financial statements. 80 NEW CENTURY TECHNOLOGIES CORPORATION (A Development Stage Company) Company Notes to the Financial Statements December 31, 1998 NOTE 1 -- SIGNIFICANT ACCOUNTING POLICIES- ORGANIZATION AND HISTORY The Company was incorporated on July 26, 1983 under the laws of State of Utah as HJK, Ltd. The purpose of the business was to acquire and operate or lease natural resource properties and engage in mining, milling, production, buying and developing natural resource properties. On August 16, 1985 the Company issued 5,400,000 shares common stock to acquire 100% of the common stock of AMCI International, Inc. (AMCI). AMCI was engaged in manufacturing and selling quality furniture. The subsidiary was involuntarily dissolved on December 31, 1987. Presently, the Company is seeking a new business opportunity.

Statements of Cash Flows. 9 7 Notes to the Financial Statements.............................................11 72 [JONE......................... 9 ▇▇▇▇▇, ▇▇NS▇▇▇▇ & ▇OMPANY LETTERHEAD] COMPANY, LLC __________________________ CERTIFIED PUBLIC ACCOUNTANTS AND CONSULTANTS INDEPENDENT AUDITORS' REPORT ---------------------------- The Board of Directors New Century Technologies Corporation AMCI International, Inc. (A Development Stage Company) Salt Lake City, Utah We have audited the accompanying balance sheets sheet of New Century Technologies Corporation AMCI International, Inc. (a development stage company) as of February 28, 1997 and August December 31, 1996 and 1995, 1998 and the related statements of operations, stockholders' equityequity (deficit), and cash flows for the periods then years ended February 28, 1997, August December 31, 1996, 1995 1998 and 1994 1997 and from inception on September 27July 26, 1983 through February 28December 31, 19971998. 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. 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 New Century Technologies Corporation AMCI International, Inc. (a development stage company) as of February 28, 1997 and August December 31, 1996 and 1995, 1998 and the results of its operations and its cash flows for the periods years ended February 28, 1997, August December 31, 1996, 1995 1998 and 1994 1997 and from inception on September 27July 26, 1983 through February 28December 31, 1997, 1998 in conformity with generally accepted accounting principles. The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 4 2 to the financial statements, the Company is a development stage company and has no operating capital and has had no operations that together raise established source of revenue which raises substantial doubt about its ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 42. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. /s/ Jone▇▇▇▇▇, ▇▇ns▇▇▇▇ & Company ▇ompany Jone▇▇▇▇, ▇▇ns▇▇▇▇ & ▇ompany Company Salt Lake City, Utah March 299, 1997 73 NEW CENTURY TECHNOLOGIES CORPORATION 1999 AMCI INTERNATIONAL, INC. (A DEVELOPMENT STAGE COMPANYDevelopment Stage Company) BALANCE SHEETS Balance Sheet ASSETS AUGUST ------ December 31, FEBRUARY 28, -------------------------- 1997 1996 1995 1998 ------------ ----------- ----------- CURRENT ASSETS Cash $ 59,785 $ -- $ -- ----------- ----------- ----------- - Total Current Assets 59,785 $ -- $ -- ----------- ----------- ----------- - ---------- TOTAL ASSETS $ 59,785 $ -- $ -- =========== =========== =- ========== LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) ---------------------------------------------- CURRENT LIABILITIES Accounts payable $ 3,901 $ 3,716 $ 3,716 Accrued expense 18,060 15,560 10,560 Taxes payable 1,015 400 300 Notes payable -- shareholder (Notes 3 and 6) 50,000 50,000 50,000 ----------- ----------- ----------- 9,881 Total Current Liabilities 72,976 69,676 64,576 ----------- ----------- ----------- COMMITMENT AND CONTINGENCY (Note 5) -- -- -- ----------- ----------- 9,881 ----------- STOCKHOLDERS' EQUITY (DEFICIT) Common Stock stock: 50,000,000 shares authorized of $.001 0.001 par value, 50,000,000 1,471,391 shares authorized, 141,891 shares issued and outstanding at February 28, 1997; 106,867 shares outstanding at August 31, 1996 and 1995 142 107 107 1,471 Additional paid-in capital 1,812,089 1,745,310 1,745,310 Loss 73,654 Deficit accumulated during the development stage (1,825,42285,006) (1,815,093) (1,809,993) ----------- ----------- ----------- Total Stockholders' Equity (13,191Deficit) (69,6269,881) (64,576) ----------- ----------- ----------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) $ 59,785 $ -- $ -- =========== =========== - =========== The accompanying notes are an integral part of these financial statements 74 NEW CENTURY TECHNOLOGIES CORPORATION AMCI INTERNATIONAL, INC (A The Development Stage Company) Statements of Operations From For The Inception on Six Months September 27, Ended For the Years Ended August July 26, December 31 1983 Through --------------------------- December 31, 1998 1997 1998 -------- ------- -------- REVENUES $ - $ - $ - -------- ------- -------- EXPENSES 10,869 4,136 85,006 -------- ------- -------- NET LOSS (10,869) (4,136) (85,006) ======== ======= ======== BASIC LOSS PER SHARE OF COMMON STOCK $ (0.01) $ (0.00) ======== ======= The accompanying notes are an integral part of these financial statements AMCI INTERNATIONAL, INC. (A Development Stage Company Statements of Stockholders' Equity (Deficit) Deficit Accumulated Common Stock Additional During the ---------------------------- Paid-in Development Shares Amount Capital Stage ------------ ---------- ---------- ------------- At inception on July 26, 1983 Through February 28- $ - - $ - Common stock issued for services at $0.20 per share 4,772 5 949 - Common stock issued for cash at approximately $2.00 per share 12,500 12 24,988 - Common stock issued to acquire subsidiary recorded at predecessor cost of $0.00 27,000 27 (27) - Net loss from inception July 26, ------------------------------------ February 281983 to December 31, 1994 - - - (27,155) ----------- ------- --------- --------- Balance, December 31, 1994 44,272 44 25,910 (27,155) Net loss for the year ended December 31, 1995 - - - (100) ----------- ------- --------- --------- Balance, December 31, 1995 44,272 44 25,910 (27,155) Common stock issued for services at approximately $0.03 per share 1,427,088 1,427 39,800 - Stock split adjustment 31 - - Contributed capital - - 1,920 - Net loss for the year ended December 31, 1996 - - - (42,746) ----------- ------- --------- --------- Balance, December 31, 1996 1,471,391 1,471 67,630 (70,001) Contributed capital - - 2,991 - Net loss for the year ended December 31, 1997 1996 1995 1994 1997 ------------ - - - (4,136) ----------- ------- -------- --------- Balance, December 31, 1997 $ 1,471,391 $ 1,471 $ 70,621 $ (74,137) ----------- ------------- LOSS FROM DISCONTINUED OPERATIONS $------- -------- --------- Contributed capital - - 3,033 - Net loss for the year ended December 31, 1998 - - - (10,32910,869) $----------- ------- -------- --------- Balance, December 31, 1998 1,471,391 $ 1,471 $ 73,654 $ (5,10085,006) $(45,100) $(1,512,294) $(1,825,422) =========== ======= ======== =========== =========== WEIGHTED AVERAGE LOSS PER SHARE The accompanying notes are an integral part of these financial statements AMCI INTERNATIONAL, INC. (Note 1A Development Stage Company Statement of Cash Flows From Inception on For the Years Ended July 26, December 31 1983 Through ----------------------- December 31, 1998 1997 1998 --------- -------- ------------ CASH FLOWS FROM OPERATING ACTIVITIES Net loss $ (10,869) $ (0.074,136) $ (0.0585,006) Adjustments to reconcile net loss to net cash used by operating activities: Contributed capital for expenses 3,033 2,991 7,944 Stock issued for services - - 42,181 Increase (decrease) in accounts payable 7,836 1,145 9,881 --------- -------- --------- Net Cash Used by Operating Activities - - (25,000) --------- -------- --------- CASH FLOWS FROM INVESTING ACTIVITIES - - - --------- -------- --------- CASH FLOWS FROM FINANCING ACTIVITIES Issuance of common stock for cash - - 25,000 --------- -------- --------- Net Cash Provided by Financing Activities - - 25,000 --------- -------- --------- NET INCREASE (DECREASE) IN CASH - - - --------- -------- --------- CASH AT BEGINNING OF PERIOD - - - CASH AT END OF PERIOD $ (0.42) - $ (15.07) - $ - ======== ======= ======== =========== CASH PAID FOR: Interest $ - $ - $ - Income taxes $ - $ - $ - NON-CASH FINANCING ACTIVITIES Contributed capital for expenses $ 3,033 $ 2,991 $ 7,944 Common stock issued for services $ - $ - $ 42,181 The accompanying notes are an integral part of these financial statements 5 75 NEW CENTURY TECHNOLOGIES CORPORATION AMCI INTERNATIONAL, INC. (A Development Stage Company) Statements of Stockholders' Equity From inception on September 27, 1983 through February 28, 1997 Loss Accumulated Total Common Stock Additional During the Stock- ----------------- Paid-in Development holders' Shares Amount Capital Stage Equity ------ ------ ---------- ----------- -------- Issuance of 883 shares for $3.40 per share in October 1983 834 $1 $ 2,999 $ - $ 3,000 Issuance of 8,333 shares for $3.60 per share in October 1985 from public offering 8,333 8 29,992 - 30,000 Costs of public offering - - (6,324) - (6,324) Net loss from inception through August 31, 1987 - - - (23,599) (23,599) ----- -- ------- -------- -------- Balance, August 31, 1987 9,167 9 26,667 (23,599) 3,077 Net loss for the year ended August 31, 1988 - - - (4,256) (4,256) ----- -- ------- -------- -------- Balance, August 31, 1988 9,167 9 26,667 (27,855) (1,179) Net loss for the year ended August 31, 1989 - - - (100) (100) ----- -- ------- -------- -------- Balance, August 31, 1989 9,167 9 26,667 (27,955) (1,279) Payments of accounts payable by shareholder - - 1,179 - 1,179 Net loss for the year ended August 31, 1990 - - - (100) (100) ----- -- ------- -------- -------- Balance, August 31, 1990 9,167 9 27,846 (28,055) (200) Net loss for the year ended August 31, 1991 - - - (100) (100) ----- -- ------- -------- -------- Balance, August 31, 1991 9,167 $9 $27,846 $(28,155) $ (300) ----- -- ------- -------- -------- The accompanying notes are an integral part of these financial statements 6 76 NEW CENTURY TECHNOLOGIES CORPORATION (A Development Stage Company) Statements of Stockholders' Equity From inception on September 27, 1983 through February 28, 1997 LOSS ACCUMULATED TOTAL COMMON STOCK ADDITIONAL DURING THE STOCK- ------------------------ PAID-IN DEVELOPMENT HOLDERS' SHARES AMOUNT CAPITAL STAGE EQUITY --------- --------- ----------- --------------- ------------- Balance forward 9,167 $ 9 $ 27,846 $ (28,155) $ (300) Net loss for the year ended August 31, 1992 -- -- -- (3,205) (3,205) --------- --------- ----------- --------------- -------------- Balance, August 31, 1992 9,167 9 27,846 (31,360) (3,505) Issuance of shares to former directors for consulting services 833 1 165 -- 166 Issuance of shares for cash in August 1993 1,630 2 165,998 -- 166,000 Issuance of shares for services rendered and inventory 48,420 48 394,623 -- 394,671 Issuance of shares for cash in August 1993 550 1 12,499 -- 12,500 Net loss for the year ended August 31, 1993 -- -- -- (221,239) (221,239) --------- --------- ----------- -------------- ---------------- Balance, August 31, 1993 60,600 61 601,131 (252,599) 348,593 Issuance of shares for cash 41,017 41 1,042,184 -- 1,042,225 Issuance of shares for services 1,250 1 62,499 -- 62,500 Returned to authorized (2,500) (3) (497) -- (500) Net loss for the year ended August 31, 1994 -- -- -- (1,512,294) (1,512,294) --------- --------- ------------ -------------- ---------------- Balance, August 31, 1994 100,367 $ 100 $1,705,317 $(1,764,893) $ (59,476) --------- --------- ------------ -------------- ---------------- The accompanying notes are an integral part of these financial statements 77 NEW CENTURY TECHNOLOGIES CORPORATION (A Development Stage Company) Statements of Stockholders' Equity From inception on September 27, 1983 through February 28, 1997 LOSS ACCUMULATED TOTAL COMMON STOCK ADDITIONAL DURING THE STOCK- ------------------------ PAID-IN DEVELOPMENT HOLDERS' SHARES AMOUNT CAPITAL STAGE EQUITY --------- --------- ----------- ------------- ------------- Balance, August 31, 1994 100,367 $100 $1,705,317 $(1,764,893) $(59,476) Issuance of shares for cash at $5.00 per share 5,000 5 24,995 -- 25,000 Issuance of shares for services at $10.00 per share 1,500 2 14,998 -- 15,000 Net loss for the year ended August 31, 1995 -- -- -- (45,100) (45,100) ------- ---- ---------- ----------- -------- Balance, August 31, 1995 106,867 107 1,745,310 (1,809,993) (64,576) Net loss for the year ended August 31, 1996 -- -- -- (5,100) (5,100) ------- ---- ---------- ----------- -------- Balance, August 31, 1996 106,867 107 1,745,310 (1,815,093) (69,676) Payments of accounts payable by shareholder -- -- 1,814 -- 1,814 Issuance of shares for cash at $1.86 per share 35,000 35 64,965 -- 65,000 Fractional shares resulting from 1 for 20 reverse split 24 -- -- -- -- Net loss for the period ended February 28, 1997 -- -- -- (10,329) (10,329) ------- ---- ---------- ----------- -------- Balance, February 28, 1997 141,891 $142 $1,812,089 $(1,825,422) $(13,191) ======= ==== ========== =========== ======== The accompanying notes are an integral part of these financial statements From For the Inception on Six Months September 27, Ended For the Years Ended August 31, 1983 Through February 28, ------------------------------- February 28, 1997 1996 1995 1994 1997 -------- ------- -------- ----------- ------------- Cash Flows From Operations Net loss $(10,329) $(5,100) $(45,100) $(1,512,294) $(1,825,382) Amortization - - - - 1,877 Decrease in inventory - - - 400,000 400,000 Decrease in other assets - - - 4,000 - Increase in accounts payable 185 - - 1,571 - Increase in accrued expenses 2,500 5,000 5,000 5,000 18,060 Increase in taxes payable 615 100 100 100 1,015 Shares issued for services - - 15,000 62,500 77,500 Expenses paid by shareholder 1,814 - - - 5,595 Bad debt - note receivable - - - - 21,099 Loss from partnership interest - - - - 2,500 -------- ------- -------- ----------- ----------- Net Cash Flows Used From Operations (5,215) - (25,000) (1,039,123) (1,297,736) -------- ------- -------- ----------- ----------- Cash Flows From Investing Activities Organization costs - - - - (1,877) Note receivable - - - - (21,099) Investment in partnership - - - - (2,500) -------- ------- -------- ----------- ----------- Net Cash Flows Used From Investing Activities - - - - (25,476) -------- ------- -------- ----------- ----------- Cash Flows From Financing Activities Issuance (repayment) of notes payable - - - (2,602) 47,398 Issuance of common shares, net of stock offering costs 65,000 - 25,000 1,042,225 1,332,238 Stock returned to authorized - - - (500) (500) -------- ------- -------- ----------- ----------- Net Cash Flows Provided by Financing Activities $ 65,000 $ - $ 25,000 $1,039,123 $1,379,136 -------- ------- -------- ----------- ----------- The accompanying notes are an integral part of these financial statements. From For the Inception on Six Months September 27, Ended For the Years Ended August 31, 1983 Through February 28, ------------------------------ February 28, 1997 1996 1995 1994 1997 ------- ------- -------- ----------- ------------- Net Change in Cash $59,785 $ - $ - $ - $ 55,924 Cash at Beginning of Period - - - - - ------- ------- -------- ----------- --------- Cash at End of Period $59,785 $ - $ - $ - $ 55,924 ------- ------- -------- ----------- --------- Cash paid for: Interest $ - $ - $ - $ - $ - Income taxes $ 400 $ - $ - $ - $ 700 Non-Cash Financing Activities: Issuance of shares for services $ - $ - $15,000 $62,500 $ 77,500 Issuance of shares for inventory $ - $ - $ - $ - $400,000 The accompanying notes are an integral part of these financial statements. 80 NEW CENTURY TECHNOLOGIES CORPORATION (A Development Stage Company) Company Notes to the Financial Statements December 31, 1998 NOTE 1 -- SIGNIFICANT ACCOUNTING POLICIES- ORGANIZATION AND HISTORY The Company was incorporated on July 26, 1983 under the laws of State of Utah as HJK, Ltd. The purpose of the business was to acquire and operate or lease natural resource properties and engage in mining, milling, production, buying and developing natural resource properties. On August 16, 1985 the Company issued 5,400,000 shares common stock to acquire 100% of the common stock of AMCI International, Inc. (AMCI). AMCI was engaged in manufacturing and selling quality furniture. The subsidiary was involuntarily dissolved on December 31, 1987. Presently, the Company is seeking a new business opportunity.

Statements of Cash Flows. 9 Notes to the Financial Statements.............................................11 72 [JONE▇, ▇▇NS▇▇ & ▇OMPANY LETTERHEAD] . . . . . . . . . . . . . . . . . . . 10 INDEPENDENT AUDITORS' REPORT The Board of Directors New Century Technologies Corporation Bethurum Labor▇▇▇▇▇▇▇, Inc. (A Development Stage Company) Salt Lake City, Utah We have audited the accompanying balance sheets sheet of New Century Technologies Corporation Bethurum Labor▇▇▇▇▇▇▇, Inc., (a development stage company) ), as of February 28, 1997 and August December 31, 1996 and 1995, 2000 and the related statements of operations, stockholders' equityequity (deficit), and cash flows for the periods then years ended February 28, 1997, August December 31, 1996, 1995 2000 and 1994 1999 and for the period from inception on September 27April 22, 1983 through February 28December 31, 19972000. 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. 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 New Century Technologies Corporation Bethurum Labor▇▇▇▇▇▇▇, Inc. (a development stage company) ), as of February 28, 1997 and August December 31, 1996 and 1995, 2000 and the results of its operations and its cash flows for the periods years ended February 28, 1997, August December 31, 1996, 1995 2000 and 1994 1999 and for the period from inception on September 27April 22, 1983 through February 28December 31, 1997, 2000 in conformity with generally accepted accounting principles. The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 4 2 to the financial statements, the Company has is a development stage company with no significant operating capital and has had no operations that together raise results to date, which raises substantial doubt about its ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 42. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. /s/ Jone▇HJ & Associates, ▇▇ns▇▇ & ▇ompany Jone▇LLC Salt Lake City, ▇▇ns▇▇ & ▇ompany Utah March 29, 1997 73 NEW CENTURY TECHNOLOGIES CORPORATION 2000 BETHURUM LABOR▇▇▇▇▇▇▇, INC. (A DEVELOPMENT STAGE COMPANYDevelopment Stage Company) BALANCE SHEETS Balance Sheet ASSETS AUGUST December 31, FEBRUARY 28, -------------------------- 1997 1996 1995 ------------ ----------- ----------- 2000 CURRENT ASSETS Cash $ 59,785 $ -- $ -- ----------- ----------- ----------- - Total Current Assets 59,785 $ -- $ -- ----------- ----------- ----------- - TOTAL ASSETS $ 59,785 $ -- $ -- =========== =========== =========== - LIABILITIES AND STOCKHOLDERS' STOCKHOLDERS EQUITY (DEFICIT) CURRENT LIABILITIES Accounts payable $ 3,901 $ 3,716 $ 3,716 Accrued expense 18,060 15,560 10,560 Taxes payable 1,015 400 300 Notes payable -- shareholder (Notes 3 and 6) 50,000 50,000 50,000 ----------- ----------- ----------- 3,007 Total Current Liabilities 72,976 69,676 64,576 ----------- ----------- ----------- COMMITMENT AND CONTINGENCY (Note 5) -- -- -- ----------- ----------- ----------- 3,007 STOCKHOLDERS' EQUITY (DEFICIT) Common Stock stock; authorized 100,000,000 common shares at $.001 0.001 par value, 50,000,000 ; 3,300,750 shares authorized, 141,891 shares issued and outstanding at February 28, 1997; 106,867 shares outstanding at August 31, 1996 and 1995 142 107 107 3,301 Additional paid-in capital 1,812,089 1,745,310 1,745,310 Loss 346,174 Subscription receivable (100,000) Deficit accumulated during the development stage (1,825,422252,482) (1,815,093) (1,809,993) ----------- ----------- ----------- Total Stockholders' Equity (13,191Deficit) (69,6263,007) (64,576) ----------- ----------- ----------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) $ 59,785 $ -- $ -- =========== =========== =========== The accompanying notes are an integral part of these financial statements 74 NEW CENTURY TECHNOLOGIES CORPORATION - BETHURUM LABOR▇▇▇▇▇▇▇, INC. (A Development Stage Company) Statements of Operations From For The Inception on Six Months September 27April 22, Ended For the Years Ended August 1983 Through December 31, 1983 Through February 28December 31, ------------------------------------ February 28, 1997 1996 1995 1994 1997 ------------ ------- -------- ----------- ------------- 2000 1999 2000 REVENUES $ - $ - $ - EXPENSES General and administrative 244,787 4,404 288,727 Total Expenses 244,787 4,404 288,727 LOSS FROM DISCONTINUED OPERATIONS $(10,329244,787) (4,404) (288,727) OTHER (EXPENSE) INCOME Other income 40,000 - 40,000 Interest expense - (1,647) (3,755) Total Other (Expense) Income 40,000 (1,647) 36,245 NET LOSS $ (204,787) $ (6,051) $(5,100252,482) $(45,100) $(1,512,294) $(1,825,422) ======== ======= ======== =========== =========== WEIGHTED AVERAGE BASIC AND DILUTED LOSS PER SHARE $ (Note 10.10) $ (0.070.02) $ (0.05) $ (0.42) $ (15.07) ======== ======= ======== =========== The accompanying notes are an integral part of these financial statements 5 75 NEW CENTURY TECHNOLOGIES CORPORATION WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING 1,970,832 350,750 BETHURUM LABOR▇▇▇▇▇▇▇, INC. (A Development Stage Company) Statements of Stockholders' Equity (Deficit) From inception Inception on September 27April 22, 1983 through February 28to December 31, 1997 Loss 2000 Deficit Accumulated Total Additional Stock During the Common Stock Additional During the Stock- ----------------- Paid-in Subscription Development holders' Shares Amount Capital Receivable Stage Equity ------ ------ ---------- ----------- -------- Issuance of 883 shares for $3.40 per share in October 1983 834 $1 $ 2,999 $ - $ 3,000 Issuance of 8,333 shares for $3.60 per share in October 1985 from public offering 8,333 8 29,992 - 30,000 Costs of public offering - - (6,324) - (6,324) Net loss from Balance on inception through August 31, 1987 - - - (23,599) (23,599) ----- -- ------- -------- -------- Balance, August 31, 1987 9,167 9 26,667 (23,599) 3,077 Net loss for the year ended August 31, 1988 - - - (4,256) (4,256) ----- -- ------- -------- -------- Balance, August 31, 1988 9,167 9 26,667 (27,855) (1,179) Net loss for the year ended August 31, 1989 - - - (100) (100) ----- -- ------- -------- -------- Balance, August 31, 1989 9,167 9 26,667 (27,955) (1,279) Payments of accounts payable by shareholder - - 1,179 - 1,179 Net loss for the year ended August 31, 1990 - - - (100) (100) ----- -- ------- -------- -------- Balance, August 31, 1990 9,167 9 27,846 (28,055) (200) Net loss for the year ended August 31, 1991 - - - (100) (100) ----- -- ------- -------- -------- Balance, August 31, 1991 9,167 $9 $27,846 $(28,155) $ (300) ----- -- ------- -------- -------- The accompanying notes are an integral part of these financial statements 6 76 NEW CENTURY TECHNOLOGIES CORPORATION (A Development Stage Company) Statements of Stockholders' Equity From inception on September 27, 1983 through February 28, 1997 LOSS ACCUMULATED TOTAL COMMON STOCK ADDITIONAL DURING THE STOCK- ------------------------ PAID-IN DEVELOPMENT HOLDERS' SHARES AMOUNT CAPITAL STAGE EQUITY --------- --------- ----------- --------------- ------------- Balance forward 9,167 $ 9 $ 27,846 $ (28,155) $ (300) Net loss for the year ended August 31, 1992 -- -- -- (3,205) (3,205) --------- --------- ----------- --------------- -------------- Balance, August 31, 1992 9,167 9 27,846 (31,360) (3,505) Issuance of shares to former directors for consulting services 833 1 165 -- 166 Issuance of shares for cash in August 1993 1,630 2 165,998 -- 166,000 Issuance of shares for services rendered and inventory 48,420 48 394,623 -- 394,671 Issuance of shares for cash in August 1993 550 1 12,499 -- 12,500 Net loss for the year ended August 31, 1993 -- -- -- (221,239) (221,239) --------- --------- ----------- -------------- ---------------- Balance, August 31, 1993 60,600 61 601,131 (252,599) 348,593 Issuance of shares for cash 41,017 41 1,042,184 -- 1,042,225 Issuance of shares for services 1,250 1 62,499 -- 62,500 Returned to authorized (2,500) (3) (497) -- (500) Net loss for the year ended August 31, 1994 -- -- -- (1,512,294) (1,512,294) --------- --------- ------------ -------------- ---------------- Balance, August 31, 1994 100,367 $ 100 $1,705,317 $(1,764,893) $ (59,476) --------- --------- ------------ -------------- ---------------- The accompanying notes are an integral part of these financial statements 77 NEW CENTURY TECHNOLOGIES CORPORATION (A Development Stage Company) Statements of Stockholders' Equity From inception on September 27, 1983 through February 28, 1997 LOSS ACCUMULATED TOTAL COMMON STOCK ADDITIONAL DURING THE STOCK- ------------------------ PAID-IN DEVELOPMENT HOLDERS' SHARES AMOUNT CAPITAL STAGE EQUITY --------- --------- ----------- ------------- ------------- Balance, August 31, 1994 100,367 $100 $1,705,317 $(1,764,893) $(59,476) Issuance of shares for cash at $5.00 per share 5,000 5 24,995 -- 25,000 Issuance of shares for services at $10.00 per share 1,500 2 14,998 -- 15,000 Net loss for the year ended August 31, 1995 -- -- -- (45,100) (45,100) ------- ---- ---------- ----------- -------- Balance, August 31, 1995 106,867 107 1,745,310 (1,809,993) (64,576) Net loss for the year ended August 31, 1996 -- -- -- (5,100) (5,100) ------- ---- ---------- ----------- -------- Balance, August 31, 1996 106,867 107 1,745,310 (1,815,093) (69,676) Payments of accounts payable by shareholder -- -- 1,814 -- 1,814 Issuance of shares for cash at $1.86 per share 35,000 35 64,965 -- 65,000 Fractional shares resulting from 1 for 20 reverse split 24 -- -- -- -- Net loss for the period ended February 28, 1997 -- -- -- (10,329) (10,329) ------- ---- ---------- ----------- -------- Balance, February 28, 1997 141,891 $142 $1,812,089 $(1,825,422) $(13,191) ======= ==== ========== =========== ======== The accompanying notes are an integral part of these financial statements From For the Inception on Six Months September 27, Ended For the Years Ended August 31, 1983 Through February 28, ------------------------------- February 28, 1997 1996 1995 1994 1997 -------- ------- -------- ----------- ------------- Cash Flows From Operations Net loss $(10,329) $(5,100) $(45,100) $(1,512,294) $(1,825,382) Amortization - - - - 1,877 Decrease in inventory - - - 400,000 400,000 Decrease in other assets - - - 4,000 - Increase in accounts payable 185 - - 1,571 - Increase in accrued expenses 2,500 5,000 5,000 5,000 18,060 Increase in taxes payable 615 100 100 100 1,015 Shares issued for services - - 15,000 62,500 77,500 Expenses paid by shareholder 1,814 - - - 5,595 Bad debt - note receivable - - - - 21,099 Loss from partnership interest - - - - 2,500 -------- ------- -------- ----------- ----------- Net Cash Flows Used From Operations (5,215) - (25,000) (1,039,123) (1,297,736) -------- ------- -------- ----------- ----------- Cash Flows From Investing Activities Organization costs - - - - (1,877) Note receivable - - - - (21,099) Investment in partnership - - - - (2,500) -------- ------- -------- ----------- ----------- Net Cash Flows Used From Investing Activities - - - - (25,476) -------- ------- -------- ----------- ----------- Cash Flows From Financing Activities Issuance (repayment) of notes payable - - - (2,602) 47,398 Issuance of common shares, net of stock offering costs 65,000 - 25,000 1,042,225 1,332,238 Stock returned to authorized - - - (500) (500) -------- ------- -------- ----------- ----------- Net Cash Flows Provided by Financing Activities $ 65,000 $ - $ 25,000 $1,039,123 $1,379,136 -------- ------- -------- ----------- ----------- The accompanying notes are an integral part of these financial statements. From For the Inception on Six Months September 27, Ended For the Years Ended August 31, 1983 Through February 28, ------------------------------ February 28, 1997 1996 1995 1994 1997 ------- ------- -------- ----------- ------------- Net Change in Cash $59,785 $ - $ - $ - $ 55,924 Cash at Beginning of Period - - - - - ------- ------- -------- ----------- --------- Cash at End of Period $59,785 $ - $ - $ - $ 55,924 ------- ------- -------- ----------- --------- Cash paid for: Interest $ - $ - $ - $ - $ - Income taxes Issuance of common stock for cash at inception at approximately $.05 per share 30,000 30 1,470 - - Issuance of common stock for cash at $0.06 per share 250,000 250 14,750 - - Common stock issued during reorganization agreement 1,000,000 1,000 (1,000) - - Cancellation of common stock from divestiture agreement (975,000) (975) 975 - - Net loss from inception on April 22, 1983 through December 31, 1986 - - - - (18,049) Balance, December 31, 1986 305,000 305 16,195 - - Net loss for the year ended December 31, 1987 - - - - (124) Balance, December 31, 1987 305,000 305 16,195 - (18,173) Net loss for the year ended December 31, 1988 - - - - (134) Balance, December 31, 1988 305,000 305 16,195 - (18,307) Net loss for the year ended December 31, 1989 - - - - (144) Balance, December 31, 1989 305,000 305 16,195 - (18,451) Net loss for the year ended December 31, 1990 - - - - (156) Balance, December 31, 1990 305,000 $ 400 305 $ 16,195 $ - $ (18,607) Net loss for the year ended December 31, 1991 - - - - (169) Balance, December 31, 1991 305,000 305 16,195 - (18,776) Net loss for the year ended December 31, 1992 - - - - (182) Balance, December 31, 1992 305,000 305 16,195 - (18,958) Net loss for the year ended December 31, 1993 - - - - (196) Balance, December 31, 1993 305,000 305 16,195 - (19,154) Net loss for the year ended December 31, 1994 - - - - (213) Balance, December 31, 1994 305,000 305 16,195 - (19,367) Net loss for the year ended December 31, 1995 - - - - (229) Balance, December 31, 1995 305,000 305 16,195 - (19,596) Expenses paid on the Company's behalf - - 473 - - Net loss for the year ended December 31, 1996 - - - - (6,385) Balance, December 31, 1996 305,000 305 16,668 - (25,981) Expenses paid on the Company's behalf - - 3,167 - - Net loss for the year ended December 31, 1997 - - - - (422) Balance, December 31, 1997 305,000 $ 305 $ 19,835 $ - $ (26,403) Expenses paid on the Company's behalf - - 1,218 - - Common stock issued for services at $0.10 per share 45,750 46 4,529 - - Net loss for the year ended December 31, 1998 - - - - (15,241) Balance, December 31, 1998 350,750 351 25,582 - (41,644) Expenses paid on the Company's behalf (unaudited) - - 5,754 - - Net loss for the year ended December 31, 1999 - - - - (6,051) Balance, December 31, 1999 350,750 $ 351 $ 31,336 $ - $ (47,695) Expenses paid on Company's behalf - - 5,288 - - Common stock issued for cash at $0.01 per share 1,250,000 1,250 11,250 - - Common stock issued for cash at $0.12 per share 1,700,000 1,700 298,300 (100,000) - Net loss for the year ended December 31, 2000 - - - - (204,787) Balance, December 31, 2000 3,300,750 $ 3,301 $ 346,174 $(100,000) $(252,482) BETHURUM LABOR▇▇▇▇▇▇▇, INC. (A Development Stage Company) Statements of Cash Flows From Inception on April 22, For the Years Ended 1983 Through December 31, December 31, 2000 1999 2000 CASH FLOWS FROM OPERATING ACTIVITIES Net loss $ (204,787) $ (6,051) $ (252,482) Adjustments to reconcile net loss to net cash (used) by operating activities: Common stock issued for services - - 4,575 Changes in operating assets and liabilities: Increase (decrease) in accounts payable (11,354) (1,350) 3,007 Increase (decrease) in accrued interest (1,647) 1,647 - Net Cash (Used) by Operating Activities (217,788) (5,754) (244,900) CASH FLOWS FROM INVESTING ACTIVITIES - - - CASH FLOWS FROM FINANCING ACTIVITIES Issuance of common stock 212,500 - 229,000 Additional paid-in capital 5,288 5,754 15,900 Net Cash Provided by Financing Activities 217,788 5,754 244,900 NET INCREASE IN CASH - - - CASH AT BEGINNING OF PERIOD - - - CASH AT END OF PERIOD $ - $ - $ - CASH PAID FOR: Interest $ 700 Non- $ - $ - Income taxes $ - $ - $ - SCHEDULE OF NON-Cash Financing Activities: Issuance of shares CASH FINANCING ACTIVITIES Common stock issued for services $ - $ - $15,000 $62,500 $ 77,500 Issuance of shares for inventory $ - $ - $ - $ - $400,000 The accompanying notes are an integral part of these financial statements4,575 BETHURUM LABOR▇▇▇▇▇▇▇, INC. 80 NEW CENTURY TECHNOLOGIES CORPORATION (A Development Stage Company) Notes to the Financial Statements December 31, 2000 and 1999 NOTE 1 -- - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES