You should read this section together with our consolidated financial statements and related notes thereto included elsewhere in this report. In addition to the historical information contained herein, this report contains forward-looking statements that involve risks and uncertainties. Forward-looking statements are not based on historical information but relate to future operations, strategies, financial results, or other developments. Forward-looking statements are necessarily based upon estimates and assumptions that are inherently subject to significant business, economic and competitive uncertainties, and contingencies, many of which are beyond our control and many of which, with respect to future business decisions, are subject to change. Certain statements contained in this Form 10-K, including, without limitation, statements containing the words.

"believe", "anticipate", "estimate", "expect", are of the opinion that and words of similar import, constitute "forward-looking statements." You should be aware that our actual growth and results could differ materially from those contained in the forward-looking statements and as a result you should not place any undue reliance on these forward-looking statements.

We assume no obligation to update any forward-looking statements as a result of new information, future events, or developments, except as required by applicable securities laws.





PLAN OF OPERATIONS

We are presently a development stage company conducting virtually no business operation, other than our efforts to effect a Business Combination with a Target Business which we consider to have significant growth potential. Since the filing of our bankruptcy in 2001, we have neither engaged in any operations nor generated any revenue. We receive no cash flow. We will carry out our plan of business as discussed above. See "Description of Business". We cannot predict to what extent our liquidity and capital resources will be diminished prior to the consummation of a Business Combination or whether our capital will be further depleted by the operating losses, if any, of the Target Business which we effectuate a Business Combination with. The continuation of our business is dependent upon our ability to obtain adequate financing arrangements, effectuate a Business Combination and ultimately, engage in future profitable operations. Presently, we are not in a position to meet our cash requirements for the next 12 months. We do not generate any cash revenue or receive any type of cash flow.

Prior to the occurrence of a Business Combination, we may be required to raise capital through the sale or issuance of additional securities in order to ensure that we can meet our operating the effectuation of a Business Combination. There can be no assurance that we will be successful with this endeavor.

We had no revenues in either 2004 or 2003. We incurred operating expenses of $21 which resulted in a loss per share of $0.00 in 2004 as compared to operating expenses of $123,253 and a net loss per share of $(0.01) in 2003.

LIQUIDITY AND CAPITAL RESOURCES

As of December 31, 2004 we had $-0- in cash.

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GOING CONCERN

The accompanying financial statements have been prepared assuming the Company will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business for the twelve months following the date of these financial statements. As of December 31, 2004 the Company had no cash and an accumulated deficit of $18,327,798.

Because the Company does not expect that existing operational cash flow will be sufficient to fund presently anticipated operations, this raises substantial doubt about the Company's ability to continue as a going concern. Therefore, the Company will need to raise additional funds and is currently exploring alternative sources of financing. offering any form of financing. Historically, the Company raised capital through private placements, to finance working capital needs and may attempt to raise capital through the sale of common stock or other securities and obtaining some short-term loans. The Company will be required to continue to so until its operations become profitable.

RECENT ACCOUNTING PRONOUNCEMENTS

The FASB issued the following pronouncements during and subsequent to 2004, none of which are expected to have a significant affect on the financial statements:





AUDIT COMMITTEE REPORT



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