UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549



FORM 10-KSB/A



Amendment No. 1

(Mark One)

[X] ANNUAL REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended March 31, 2002

[  ] TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ________ to ________

Commission File Number 0-30161



DICUT, INC.

(Name of small business issuer in its charter)





|Delaware                                                       |  | 52-2204952                          
|-------------------------------------------------------------- |  | ------------------------------------
|(State or other jurisdiction of incorporation or organization) |  | (I.R.S. Employer Identification No.)



2150 Northwest Parkway, S.E., Suite H, Marietta, Georgia 30067

(Address of Principal Executive Offices) (Zip Code)

(770) 952-2654

(Registrant's telephone number, including area code)

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



Securities registered under Section 12(g) of the Exchange Act:

Common Stock, $0.001 par value

(Title of class)



Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X  No ___

Check if there is no disclosure of delinquent filers in response to Item 405 of Regulation S-B contained in this form, and no disclosure will be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-KSB or any amendment to this Form 10-KSB. X

The issuer's revenues for its most recent fiscal year: $228,002.

The aggregate market value of the shares of Common Stock held by non-affiliates of the Registrant, as of April 1, 2002 was $331,200 based upon the closing bid price of $0.08 per share as reported by the trading and market services of the NASDAQ OTC Bulletin Board.

As of March 31, 2002, the Registrant had outstanding 14,640,000 shares of its Common Stock, $0.001 par value.

ITEM 3. LEGAL PROCEEDINGS.

On November 19, 2001, a legal proceeding was commenced in United States District Court, Southern New York, against the Company and Pierre Quilliam, President of the Company by Deborah Donoghue.  Ms. Donoghue alleges that she is a shareholder in the Company, and seeks recovery on behalf of the Company of short swing profits allegedly realized by Mr. Quilliam from purchases and sales of common stock in the Company by a company that Mr. Quilliam controls. Ms. Donoghue also asserts a claim against the Company for attorney's fees incurred in the case.  The Company elected not to respond to appear in the case on the grounds that applicable law indicated that the Company was not subject to the jurisdiction of the court in which the case was filed.

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

Disclosure Regarding Forward Looking Statements

This Annual Report on Form 10-KSB includes forward looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended ("Forward Looking Statements"). All statements other than statements of historical fact included in this report are Forward Looking Statements. In the normal course of its business, the Company, in an effort to help keep its shareholders and the public informed about the Company's operations, may from time-to-time issue certain statements, either in writing or orally, that contain or may contain Forward-Looking Statements. Although the Company believes that the expectations reflected in such Forward Looking Statements are reasonable, it can give no assurance that such expectations will prove to have been correct. Generally, these statements relate to business plans or strategies, projected or anticipated benefits or other consequences of such plans or strategies, past and possible future, of acquisitions and projected or anticipated benefits from acquisitions made by or to be made by the Company, or projections involving anticipated revenues, earnings, levels of capital expenditures or other aspects of operating results. All phases of the Company operations are subject to a number of uncertainties, risks and other influences, many of which are outside the control of the Company and any one of which, or a combination of which, could materially affect the results of the Company's proposed operations and whether Forward Looking Statements made by the Company ultimately prove to be accurate. Such important factors ("Important Factors") and other factors could cause actual results to differ materially from the Company's expectations are disclosed in this report. All prior and subsequent written and oral Forward Looking Statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by the Important Factors described below that could cause actual results to differ materially from the Company's expectations as set forth in any Forward Looking Statement made by or on behalf of the Company.

Overview

On December 12, 2001, the Company acquired 100% of the shares of National Data, Inc. ("National Data") in exchange for 10,500,000 shares of its $0.001 par value common stock.

National Data Inc., located in Marietta, Georgia, was established to provide key policies, products and services relating to digital data that assure ongoing business activity without threat, disruption, or loss. Digital data is relatively fragile and without special handling, data loss poses tremendous liability issues.  A key function of National Data's services is to reinforce and automate existing and proven safeguards (data backup, contingency planning, locking desktops, locking doors, etc.).

National Data's plan is to provide data services that safeguards valuable business information from avoidable natural disasters such as fires, floods, hurricanes, tornadoes, etc., as well as man made disasters such as hackers, disgruntled employees, viruses, worms and acts of terrorism.  National Data's IT auditing services will assist businesses by determining the company's business exposure, developing a recovery plan and then generating appropriate security policies.  The services provided by National Data will include Secure Backup, Disaster Recovery, Monitoring and Biometric vaulting.  Data will be protected and stored in a highly secure data center and all services monitored and supported 24/7 in the Network Operating Center.

National Data addresses the challenges of Business Continuity through a three faceted strategy: Logical (data) Controls, Physical (access) Controls and Procedural (policies and procedures) Controls. These services are:

1. Data Services (Logical)

- Secure off-site back-ups and data storage
- Disaster Recovery Services and Products/Preconfigured Servers
- Remote 24/7 monitoring of customer enterprise-systems, network and applications

1. IT Auditing Services (Procedural)

- Disaster Recovery Planning and Business Continuity Planning
- Vulnerability Assessment
- Security Policy and Documentation

1. Access Control Services (Physical)

- Physical Access software tools
- Logical Access software tools
- BioMeta plug-ins to tightly integrate and ensure data continuity
- Biometric vaulting ASP delivery model for selected access control services
- Secure backup for Video Data

The Company elected to complete the acquisition of National Data after considering a number of other acquisitions because the Board determined that National Data had good potential of becoming a profitable business at a reasonable capital cost.

Prior to the Company's acquisition of National Data, Mr. Kalra had devoted significant time and attention to development of National Data's product line and business and marketing plan.  In order to effectively proceed with the operations of National Data, the Company must obtain financing and will be approaching financial institutions and attempting to secure equity financing. However, there is no guarantee that such financing will be forthcoming.

National Data was formed on November 28, 2001 by Mr. Kalra for the purpose of continuing the development of the business described herein.  Prior to the formation of National Data, Mr. Kalra and the other officers and employees of the Company (except for Mr. Quilliam) were employed by subsidiaries of Nexus Group International, Inc., a Canadian public company, which was engaged in the facial biometric business.   The officers and employees left Nexus when Nexus decided to stop funding the operations of the subsidiaries.  National Data's officers and employees believed that the future of biometrics, while exciting, needed to be developed with other security and business continuity products and services to become successful.  The business plan they developed as employees of National Data encompasses, in their judgment, a well-rounded approach to Logical, Physical and Procedural security concerns and needs of the small and medium business market.

Results of Operation

For the period from inception (November 28, 2001) to March 31, 2002, the Company recorded revenues of $228,002.  Approximately 95% of the Company's revenues in the year ended March 31, 2002 were derived from a serious of contracts and purchase orders with the U.S. Veterans Administration to provide data protection and security products and services.  During the year ended March 31, 2001, the Company did not have any revenues and was still in the development stage.

For the period from inception (November 28, 2001) to March 31, 2002, the Company incurred operating expenses of $802,815, which was substantially greater than the Company's revenues during this period, resulting in a net loss of ($575,040).  The Company's large operating expenses were primarily attributable to costs incurred in the commencement of active operations, and represented largely by accrued salaries of the officers and key employees who joined the Company at its inception.  The Company expects that it will incur operating losses for the foreseeable future until its level of revenues increases to match its expenses.

Liquidity and Sources of Capital

As of March 31, 2002, the Company had current assets of $189,014, current liabilities of ($887,255), a working capital deficit of ($698,241) and negative common shareholders' equity of ($519,697).  A substantial portion of the working capital deficit is attributable to accrued salaries of the executive officers, and loans made by the executive officers to the Company.

The Company's working capital is currently insufficient for the Company to implement its business plan.  Therefore, the Company is exploring alternatives to raise capital, and plans to raise capital by any means possible, including loans, issuances of common stock, or issuances of securities convertible into common stock.  To date, the Company has relied upon loans from officers and the deferral of management salaries to satisfy its working capital needs.  Until the Company is able to raise capital, the Company plans to continue deferring the salary of key employees and payment to some vendors.

ITEM 7.  FINANCIAL STATEMENTS.

The financial statements required by Item 310 of Regulation S-B are attached hereto as Exhibit A.

ITEM 10.  EXECUTIVE COMPENSATION

The following table sets forth the compensation earned by the Company's Chief Executive Officers during the last three fiscal years and other officers who received compensation in excess of $100,000 during any of the last three fiscal years. In accordance with Item 402(a)(5), the Company has omitted certain columns from the table required by Item 402(b).

Summary Compensation Table

|                                                                     | Annual Compensation
|-------------------------------------------------------------------- | -------------------
|Name and Principal Position                                          | Year               
|Fred McNorton, President and Director (1)                            | 2002
2001
2000     
|                                                                     |                    
|Stephen Nemergut, President and Director (2)                         | 2002
2001
2000     
|                                                                     |                    
|Pierre Quilliam, Chief Executive Officer, President and Director (3) | 2002
2001
2000     
|                                                                     |                    
|Raj Kalra, Chief Executive Officer and Director (4)                  | 2002
2001
2000     

(1)  Mr. McNorton's served as President from inception of the Company to August 8, 2001.

(2)  Mr. Nemergut served as President from August 8, 2001 to September 19, 2001.

(3)  Mr. Quilliam served as Secretary/Treasurer of the Company from August 8, 2001 to September 19, 2001.  He then served as Chief Executive Officer of the Company from September 19, 2001 to December 12, 2001, and as President from September 19, 2001 to the present.  Mr. Quilliam's compensation is based on an employment agreement dated December 12, 2001 that provides for a base salary of $175,000 per year.

(4)  Mr. Kalra served as Chief Executive Officer of the Company from December 12, 2001 to the present.  Mr. Kalra's compensation is based on an employment agreement dated December 12, 2001 that provides for a base salary of $175,000 per year.

The Company did not grant any options or stock appreciation rights or make an award under any long-term incentive plan to any of its named executive officers during the last fiscal year.  On March 14, 2002, the Company's board of directors approved a resolution to issue Messrs. Kalra and Quilliam stock purchase warrants upon the completion of each acquisition by the Company.  Under the resolution, the value of the stock purchase warrants would be equal to fifty percent (50%) of the value of the consideration paid for each such acquisition.  However, the resolution contains no method for determining the value of noncash consideration paid for an acquisition, the terms of the stock purchase warrants that are to be issued to Messrs. Kalra and Quilliam, or the method of valuing those warrants.  To date, no stock purchase warrants have been issued to Messrs. Kalra and Quilliam under the resolution.

The Company did not re-price any options or stock appreciation rights during the last fiscal year.  The Company did not have outstanding any options or stock appreciation rights at the end of each of its last two fiscal years.  During the last fiscal year, no options or stock appreciation rights were exercised by any of the named executive officers.

Employment and Deferred Compensation Agreements

On December 12, 2001, the Company entered into identical Employment Agreements with Raj Kalra and Pierre Quilliam.  The Employment Agreements provide that Messrs. Kalra and Quilliam shall be employed by the Company for a term of three years, and are entitled to a base salary of $175,000 in the first year, $200,000 in the second year, and $225,000 in the third year.  Messrs. Kalra and Quilliam are also be entitled to a commission on sales generated by them consistent with the Company's commission policy for all sales personnel.  In addition, they are each entitled to an incentive bonus equal to 10% of the Company's adjusted net profits for the fiscal year beginning in 2002.  Further, they are each entitled to 8 weeks paid holiday and 14 personal days, sick leave, medical and group insurance, participation in pension or profit sharing plans of the Company, and a car allowance of up to $2,000 per month.  In the event of a termination of the Employment Agreement without cause by the Company, they will be entitled to severance equal to 75% of their remaining base salary under the Employment Agreements.  The Employment Agreements contain provisions prohibiting them from competing with the Company or soliciting customers or employees from the Company for a period of one year following the termination of their employment.

Compensation of Directors

The Company currently does not pay its directors any compensation for their services as directors, but would reimburse directors for any reasonable out-of-pocket expenses incurred in attendance at board meetings or any expenses generated in connection with the performance of services on the behalf of the Company.

ITEM 11.   SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth certain information, as of March 31, 2002, as to the Company's common stock beneficially owned by (i) each executive officer and director of the Company, (ii) all directors and executive officers of the Company as a group, and (iii) any person who is known by the Company to be the beneficial owner of more than 5% of the outstanding shares of the Company's common stock.

|Name and Address of Beneficial Owner                                              | Amount and Nature of Beneficial Ownership | Percent of Class (1)
|--------------------------------------------------------------------------------- | ----------------------------------------- | --------------------
|Raj Kalra
2150 Northwest Parkway, N.E., Suite H     Marietta, Georgia 30067       | 10,500,000                                | 71.7%               
|Pierre Quilliam (2)
2150 Northwest Parkway, N.E., Suite H
Marietta, Georgia 30067 | 1,000                                     | --%                 
|All Officers and Directors as a Group                                             | 10,501,000                                | 71.7%               

(1)  Based upon 14,640,000 common shares issued and outstanding as of March 31, 2002.

(2)  Mr. Quilliam's shares are held by a company that he controls.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

The Company purchased furniture totaling $125,215 from Raj Kalra, the CEO, director and shareholder of the Company in exchange for a note payable. In addition, Mr. Kalra loaned the Company $29,210. The notes are due upon demand and bears zero interest.

The Company was loaned $98,720 from Pierre Quilliam, the Company's president, director, and shareholder. The note is due upon demand and bears zero interest.

The Company was loaned $10,000 from AJ Galliano, the Company's Chief Technical Officer. The note is due upon demand and bears zero interest.

On March 14, 2002, the Company's board of directors approved a resolution to issue Messrs. Kalra and Quilliam stock purchase warrants upon the completion of each acquisition by the Company.  Under the resolution, the value of the stock purchase warrants would be equal to fifty percent (50%) of the value of the consideration paid for each such acquisition.  However, the resolution contains no method for determining the value of noncash consideration paid for an acquisition, the terms of the stock purchase warrants that are to be issued to Messrs. Kalra and Quilliam, or the method of valuing those warrants.  To date, no stock purchase warrants have been issued to Messrs. Kalra and Quilliam under the resolution.

ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K.

1. Exhibits.

|Exhibit Number | Description and Incorporation by Reference                                                                                                                                                                           
|-------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|2              | Agreement to acquire all of the issued and outstanding shares of National Data, Inc. (incorporated by reference from the Form 8-K/A of the Company filed February 14, 2002)                                          
|3.1            | Certificate of Incorporation of Dicut, Inc., a Delaware corporation, filed May 31, 1994 (incorporated by reference from the Form 10-SB of the Company filed on March 30, 2000)                                       
|3.2            | Certificate of Amendment to Certificate of Incorporation of Dicut, Inc., a Delaware corporation, filed October 25, 1999 (incorporated by reference from the Form 10-SB of the Company filed on March 30, 2000)       
|3.2            | By-Laws of the Company (incorporated by reference from the Form 10-SB of the Company filed on March 30, 2000)                                                                                                        
|4.1            | Form of Common Stock Certificate of the Company (incorporated by reference from the Form 10-SB of the Company filed on March 30, 2000)                                                                               
|10.1           | Executive Employment Agreement of Raj Kalra (incorporated by reference from the Form 8-K/A of the Company filed February 14, 2002)                                                                                   
|10.2           | Executive Employment Agreement of Pierre Quilliam (incorporated by reference from the Form 8-K/A of the Company filed February 14, 2002)                                                                             
|10.3           | Board Resolution approving option plan for Raj Kalra and Pierre Quilliam                                                                                                                                             
|10.4           | Dicut, Inc. 2002 Employee, Consultant and Advisor Stock Compensation Plan (incorporated by reference to the Registration Statement on Form S-8 of the Company filed on February 25, 2002, Registration No. 333-83386)
|10.5           | Dicut, Inc. 2002 Stock Option Plan (incorporated by reference to the Registration Statement on Form S-8 of the Company filed on February 25, 2002, Registration No. 333-83386)                                       
|11             | Statement re: computation of earnings per share (included within financial statements filed pursuant to Part II, Item 7).                                                                                            
|16             | Letter on change in independent public auditors (incorporated by reference from the Form 8-K of the Company filed on May 16, 2001)                                                                                   
|22             | Subsidiaries of the Registrant                                                                                                                                                                                       
|24             | Consent of Beckstead and Watts, LLP                                                                                                                                                                                  



(b) Reports on Form 8-K. During the fourth quarter of 2002, the Company filed the following reports on Form 8-K:

- On February 14, 2002, the Company filed an amendment to a Form 8-K originally filed on December 27, 2001, reporting in Item 1 of a change of control of the Company, in Item 2 of the acquisition of National Data, Inc., in Item 5 of certain other material events, and in Item 7 of the filing of audited and pro forma financial statements relating to the acquisition of National Data, Inc. of documents relating to the acquisition.
- On March 21, 2002, the Company filed a Form 8-K reporting on Item 2 on the execution of an agreement to acquire DataAssure Systems, Inc., in Item 5 on the filing of an action by a shareholder on behalf of the Company against Pierre Quilliam to recover short-swing profits, and in Item 7 on the filing of exhibits relating to the acquisition of DataAssure Systems, Inc.



SIGNATURES

In accordance with Section 13 of 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.

|                         | DICUT, INC.                       
|------------------------ | ----------------------------------
|Dated: February 17, 2003 | /s/ Raj Kalra                     
|                         | Raj Kalra, Chief Executive Officer



In accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.



|Dated: February 17, 2003 | /s/ Raj Kalra                       
|------------------------ | ------------------------------------
|                         | Chairman and Chief Executive Officer
|                         |                                     
|Dated: February 17, 2003 | /s/ Pierre Quilliam                 
|                         | Pierre Quilliam, Director           
|                         |                                     
|Dated: February 17, 2003 | /s/ Kerry Moody                     
|                         | Kerry Moody, Director               



DICUT, INC.

(A DEVELOPMENT STAGE COMPANY)



CONSOLIDATED BALANCE SHEET



AS OF



MARCH 31, 2002



AND



CONSOLIDATED STATEMENT OF OPERATIONS,

CHANGES IN STOCKHOLDERS' EQUITY, AND



CASH FLOWS



FOR THE PERIOD



NOVEMBER 28, 2001 (DATE OF INCEPTION)

THROUGH



MARCH 31, 2002







DICUT, INC.

TABLE OF CONTENTS

|                                                | Page
|----------------------------------------------- | ----
|Independent Auditors' Report                    | 1   
|Consolidated Balance Sheet                      | 2   
|Consolidated Statements of Operations           | 3   
|Consolidated Statements of Shareholders' Equity | 4   
|Consolidated Statements of Cash Flows           | 5   
|Footnotes                                       | 6   







BECKSTEAD AND WATTS, LLP

CERTIFIED PUBLIC ACCOUNTANTS

3340 Wynn Road, Suite C

Las Vegas, NV 89102

702.257.1984

702.362.0540 fax

INDEPENDENT AUDITOR'S REPORT

July 15, 2002

Board of Directors

Dicut, Inc.

Marietta, Georgia

We have audited the Consolidated Balance Sheet of Dicut, Inc. (the "Company") (A Development Stage Company), as of March 31, 2002, and the related Consolidated Statement of Operations, Stockholders' Equity, and Cash Flows for the period November 28, 2001 (Date of Inception) to March 31, 2002. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on my audit.

We conducted my audit in accordance with generally accepted auditing standards in the United States of America. Those standards require that I 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 statement presentation. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. I believe that my audit provides a reasonable basis for my opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Dicut, Inc. (A Development Stage Company) as of March 31, 2002, and the results of its operations and cash flows for the period November 28, 2001 (Date of Inception) to March 31, 2002, in conformity with generally accepted accounting principles in the United States of America.

The accompanying financial statements have been prepared assuming the Company will continue as a going concern. As discussed in Note 3 to the financial statements, the Company has had limited operations and have not commenced planned principal operations. This raises substantial doubt about its ability to continue as a going concern. Management's plan in regard to these matters are also described in Note 3. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Beckstead and Watts, LLP

G. Brad Beckstead, CPA

Partner





DICUT, INC.

(a Development Stage Company)

Consolidated Balance Sheet



|                                                                                                       | September 30, 2002    
|------------------------------------------------------------------------------------------------------ | ----------------------
|ASSETS                                                                                                 |                       
|                                                                                                       |                       
|Current Assets                                                                                         |                       
|Cash                                                                                                   | $            24,896   
|Accounts receivable                                                                                    | 152,890               
|Employee advances                                                                                      | 8,000                 
|Deposits                                                                                               | 1,650                 
|Other current assets                                                                                   | 1,578                 
|Total current assets                                                                                   | 189,014               
|                                                                                                       |                       
|Fixed assets, net                                                                                      | 178,544               
|                                                                                                       |                       
|Total Assets                                                                                           | $            367,558  
|                                                                                                       |                       
|LIABILITIES AND STOCKHOLDERS' DEFICIT                                                                  |                       
|                                                                                                       |                       
|Current Liabilities                                                                                    |                       
|Accounts payable                                                                                       | 218,121               
|Accrued salaries and wages                                                                             | 259,947               
|Accrued executive compensation                                                                         | 102,083               
|Loans from shareholders - related party                                                                | 263,146               
|Notes payable                                                                                          | 34,000                
|Payroll taxes payable                                                                                  | 9,731                 
|Accrued interest payable                                                                               | 227                   
|Total current liabilities                                                                              | 887,255               
|                                                                                                       |                       
|Stockholders' (Deficit)                                                                                |                       
|Common stock, $0.001 par value, 20,000,000 shares authorized, 16,603,333 shares issued and outstanding | 14,640                
|Additional paid-in capital                                                                             | 36,473                
|Treasury stock                                                                                         | 4,230                 
|(Deficit) accumulated during development stage                                                         | (575,040)             
|                                                                                                       | (519,697)             
|                                                                                                       |                       
|Total Liabilities and Stockholders' Equity                                                             | $              367,558



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



DICUT, INC.

(a Development Stage Company)

Consolidated Statement of Operations



|                                                                       | November 28, 2001 (inception) to March 31, 2002
|---------------------------------------------------------------------- | -----------------------------------------------
|                                                                       |                                                
|Revenue                                                                | $              228,002                         
|                                                                       |                                                
|Expenses                                                               |                                                
|General and administrative expenses                                    | 232,941                                        
|Salaries and wages                                                     | 303,160                                        
|Executive compensation                                                 | 102,083                                        
|Consulting expense                                                     | 82,000                                         
|Commission expense                                                     | 40,000                                         
|Bad debt expense                                                       | 32,229                                         
|Depreciation                                                           | 10,402                                         
|Total Expenses                                                         | $               802,815                        
|                                                                       |                                                
|Net operating income (loss)                                            | (269,978)                                      
|                                                                       |                                                
|Other expense:                                                         |                                                
|Interest expense                                                       | 227                                            
|                                                                       |                                                
|Net (loss)                                                             | $              (575,040)                       
|                                                                       |                                                
|Weighted number of common shares outstanding - basic and fully diluted | 13,932,097                                     
|                                                                       |                                                
|Net (loss) per share - basic and fully diluted                         | $                    (0.04)                    









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





DICUT, INC.

(a Development Stage Company)

Consolidated Statement of Cash Flows



|                                                                                | November 28, 2001 (inception) to March 31, 2002
|------------------------------------------------------------------------------- | -----------------------------------------------
|                                                                                |                                                
|Cash Flows From Operating Activities                                            |                                                
|Net (loss)                                                                      | $        (575,040)                             
|Depreciation                                                                    | 10,402                                         
|Adjustments to reconcile net (loss) to net cash (used) by operating activities: |                                                
|(Increase) in accounts receivable                                               | (152,890)                                      
|(Increase) in employee advances                                                 | (8,000)                                        
|(Increase) in deposits                                                          | (1,650)                                        
|(Increase) in other current assets                                              | (1,578)                                        
|Increase in accounts payable                                                    | 212,958                                        
|Increase in accrued salaries and wages                                          | 259,947                                        
|Increase in accrued executive compensation                                      | 102,083                                        
|Increase in payroll taxes payable                                               | 9,731                                          
|Increase in accrued interest payable                                            | 227                                            
|Net cash (used) by operating activities                                         | (143,810)                                      
|                                                                                |                                                
|Cash Flows From Investing Activities                                            |                                                
|Purchase of fixed assets                                                        | (3,225)                                        
|Net cash (used) by investing activities                                         | (3,225)                                        
|                                                                                |                                                
|CashFlowsFrom Financing Activities                                              |                                                
|Proceeds from shareholder loans                                                 | 137,931                                        
|Proceeds from loans                                                             | 34,000                                         
|Net cash provided by financing activities                                       | 171,931                                        
|                                                                                |                                                
|Net decrease in cash                                                            | 24,896                                         
|Cash - beginning                                                                | -                                              
|Cash - ending                                                                   | $            24,896                            
|                                                                                |                                                
|Supplemental disclosures                                                        |                                                
|Interest paid                                                                   | $                      -                       
|Income taxes paid                                                               | $                      -                       



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

DICUT, INC.

(a Development Stage Company)

Consolidated Statement of Changes in Stockholders' Equity



|                                                 | Common Stock | Additional Paid-In Capital | Treasury Stock     | (Deficit) Accumulated during Development Stage | Total Stockholders' Equity
|------------------------------------------------ | ------------ | -------------------------- | ------------------ | ---------------------------------------------- | --------------------------
|Shares                                           | Amount      
|March 1997                                       |              |                            |                    |                                                |                           
|Issuance of Founder shares                       | 4,230,000    | $                    1     | $           9,399  | $                --                            | $                      -- 
|Balance, March 31, 1997                          |              |                            |                    |                                                |                           
|                                                 |              |                            |                    |                                                |                           
|January 1998 504 Offering                        | 4,140,000    | 1                          | 9,199              | --                                             | --                        
|                                                 |              |                            |                    |                                                | --                        
|Balance, March 31, 1998                          | 8,370,000    | 2                          | 18,598             | --                                             | --                        
|                                                 |              |                            |                    |                                                |                           
|Net (loss) for the year ended March 31, 1999     |              |                            |                    |                                                | --                        
|Balance, March 31, 1999                          | 8,370,000    | 2                          | 18,598             | --                                             | --                        
|                                                 |              |                            |                    |                                                |                           
|October 1999, Amended par value                  | --           | 184                        | (184)              | --                                             |                           
|January 2000 reclassification of paid-in capital | --           | 8,184                      | (8,184)            | --                                             |                           
|Net (loss) for the year ended March 31, 2000     |              |                            |                    |                                                | --                        
|Balance, March 31, 2000                          | 8,370,000    | 8,370                      | 10,230             | --                                             | --                        
|                                                 |              |                            |                    |                                                |                           
|Net (loss) for the year ended March 31, 2001     |              |                            |                    |                                                | --                        
|Balance, March 31, 2001                          | 8,370,000    | 8,370                      | 10,230             | --                                             | --                        
|                                                 |              |                            |                    |                                                |                           
|December 2001 Return to treasury stock           | (4,230,000)  | (4,230)                    | --                 | 4,230                                          |                           
|December 2001 Shares issued for acquisition      | 10,500,000   | 10,500                     | 50,006             | --                                             |                           
|March 2002 Recapitalization adjustment           | --           | --                         | (23,763)           | --                                             |                           
|Net (loss) for the year ended March 31, 2002     |              |                            |                    |                                                | (575,040)                 
|Balance, March 31, 2002                          | 14,640,000   | $          14,640          | $           36,473 | $           4,230                              | $           (575,040)     





DICUT, INC.

(A DEVELOPMENT STAGE COMPANY)

NOTES

NOTE 1 - HISTORY AND ORGANIZATION OF THE COMPANY

The Company was organized May 31, 1994 (Date of Inception) under the laws of the State of Delaware, as Dicut, Inc. The Company has minimal operations and in accordance with SFAS #7, the Company is considered a development stage company. The Company is authorized to issue 20,000,000 shares of $0.001 par value common stock.

NOTE 2 - ACCOUNTING POLICIES AND PROCEDURES

CASH AND CASH EQUIVALENTS

For the purpose of the statements of cash flows, all highly liquid investments with an original maturity of three months or less are considered to be cash equivalents. There are no cash equivalents as of March 31, 2002.

FIXED ASSETS

The cost of fixed assets is depreciated over the estimated useful life of the fixed assets utilizing the straight-line method of depreciation based on the following estimated useful lives

|Computer equipment     | 3 years
|---------------------- | -------
|Furniture and fixtures | 7 years

REVENUE RECOGNITION

We provide services under time-and-material, unit-price, or fixed-price contracts which can extend up to 5 years.

Under time-and-material and certain unit-price and fixed-price contracts under which costs are generally incurred in proportion with contracted billing schedules, revenue is recognized when the customer may be billed.

Such method is expected to result in reasonably consistent profit margins over the contract term. For certain unit-price and fixed-price contracts, we follow the guidance contained in AICPA Statement of Position ("SOP") 81-1, Accounting for Performance of Construction-Type and Certain Production-Type Contracts. SOP 81-1 requires the use of percentage-of-completion accounting for long-term contracts that contain enforceable rights regarding services to be provided and received by the contracting parties, consideration to be exchanged, and the manner and terms of settlement, assuming reasonably dependable estimates of revenue and expenses can be made. The percentage-of-completion methodology generally results in the recognition of reasonably consistent profit margins over the life of a contract. Amounts recognized in revenue are calculated using the percentage of services completed, on a current cumulative cost to total cost basis. Cumulative revenues recognized may be less or greater than cumulative costs and profits billed at any point in time during a contract's term. The resulting difference is recognized as unbilled or deferred revenue.

Any estimation process, including that used in preparing contract accounting models, involves inherent risk. We reduce the inherent risk relating to revenue and cost estimates in percentage-of-completion models through corporate policy, approval and monitoring processes. Risks relating to service delivery, usage, productivity and other factors are considered in the estimation process. If sufficient risk exists, a zero-profit methodology is applied to a specific client contract's percentage-of-completion model whereby the amount of revenue recognized is limited to the amount of costs incurred until such time as the risks have been partially or wholly mitigated through performance. This methodology is primarily used at the inception of our largest outsourcing contracts where the amount of profit to be recognized on a contract over its term is not yet determinable. Our estimates of revenues and expenses on client contracts change periodically in the normal course of business, occasionally due to modifications of our contractual arrangements. In addition, the implementation of cost saving initiatives and achievement of productivity gains generally results in a reduction of estimated total contract expenses on affected client contracts. For client contracts accounted for under the percentage-of-completion method, such changes would be reflected in results of operations as a change in accounting estimate in the period the revisions are determined. For all client contracts, provisions for estimated losses on individual contracts are made in the period in which the loss first becomes apparent.

ADVERTISING COSTS

The Company expenses all costs of advertising as incurred. There were advertising costs in the amount of $350 included in general and administrative expenses as of March 31, 2002.

USE OF ESTIMATES

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

FAIR VALUE OF FINANCIAL INSTRUMENTS

Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of March 31, 2002. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values. These financial instruments include cash and accounts payable. Fair values were assumed to approximate carrying values for cash and payables because they are short term in nature and their carrying amounts approximate fair values or they are payable on demand.

IMPAIRMENT OF LONG-LIVED ASSETS

Long-lived assets held and used by the Company are reviewed for possible impairment whenever events or circumstances indicate the carrying amount of an asset may not be recoverable or is impaired. No such impairments have been identified by management at March 31, 2002.

REPORTING ON THE COSTS OF START-UP ACTIVITIES

Statement of Position 98-5 (SOP 98-5), "Reporting on the Costs of Start-Up Activities," which provides guidance on the financial reporting of start-up costs and organizational costs, requires most costs of start-up activities and organizational costs to be expensed as incurred. SOP 98-5 is effective for fiscal years beginning after December 15, 1998. With the adoption of SOP 98-5, there has been little or no effect on the Company's financial statements.

LOSS PER SHARE

Net loss per share is provided in accordance with Statement of Financial Accounting Standards No. 128 (SFAS #128) "Earnings Per Share". Basic loss per share is computed by dividing losses available to common stockholders by the weighted average number of common shares outstanding during the period. The Company had no dilutive common stock equivalents, such as stock options or warrants as of March 31, 2002.

DIVIDENDS

The Company has not yet adopted any policy regarding payment of dividends. No dividends have been paid or declared since inception.

SEGMENT REPORTING

The Company follows Statement of Financial Accounting Standards No. 130, "Disclosures About Segments of an Enterprise and Related Information." The Company operates as a single segment and will evaluate additional segment disclosure requirements as it expands its operations.

INCOME TAXES

The Company follows Statement of Financial Accounting Standard No. 109, "Accounting for Income Taxes" ("SFAS No. 109") for recording the provision for income taxes. Deferred tax assets and liabilities are computed based upon the difference between the financial statement and income tax basis of assets and liabilities using the enacted marginal tax rate applicable when the related asset or liability is expected to be realized or settled. Deferred income tax expenses or benefits are based on the changes in the asset or liability each period. If available evidence suggests that it is more likely than not that some portion or all of the deferred tax assets will not be realized, a valuation allowance is required to reduce the deferred tax assets to the amount that is more likely than not to be realized. Future changes in such valuation allowance are included in the provision for deferred income taxes in the period of change.

Deferred income taxes may arise from temporary differences resulting from income and expense items reported for financial accounting and tax purposes in different periods. Deferred taxes are classified as current or non-current, depending on the classification of assets and liabilities to which they relate. Deferred taxes arising from temporary differences that are not related to an asset or liability are classified as current or non-current depending on the periods in which the temporary differences are expected to reverse.

RECENT PRONOUNCEMENTS

In June 2001, SFAS No. 141, "Business Combinations," and SFAS No. 142, "Goodwill and Other Intangible Assets," were issued. SFAS No. 141 requires that all business combinations initiated after June 30, 2001 be accounted for using the purchase method of accounting, and that identifiable intangible assets acquired in a business combination be recognized as an asset apart from goodwill, if they meet certain criteria. The impact of the adoption of SFAS No. 141 on our reported operating results, financial position and existing financial statement disclosure is not expected to be material.

SFAS No. 142 applies to all goodwill and identified intangible assets acquired in a business combination. Under the new standard, all goodwill and indefinite-lived intangible assets, including that acquired before initial application of the standard, will not be amortized but will be tested for impairment at least annually. The new standard is effective for fiscal years beginning after December 15, 2001. Adoption of SFAS No. 142 will result in the elimination of approximately $82,000 of annual amortization. The Company does not expect to recognize any impaired goodwill as of January 1, 2002.

In July 2001, SFAS No. 143, "Accounting for Asset Retirement Obligations," was issued which requires the recognition of a liability for an asset retirement obligation in the period in which it is incurred. When the liability is initially recorded, the carrying amount of the related long-lived asset is correspondingly increased. Over time, the liability is accreted to its present value and the related capitalized charge is depreciated over the useful life of the asset. SFAS No. 143 is effective for fiscal years beginning after June 15, 2002. The impact of the adoption of SFAS No. 143 on the Company's reported operating results, financial position and existing financial statement disclosure is not expected to be material.

In August 2001, SFAS No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets," was issued. This statement addresses the financial accounting and reporting for the impairment or disposal of long-lived assets and broadens the definition of what constitutes a discontinued operation and how results of a discontinued operation are to be measured and presented. The provisions of SFAS No. 144 are effective for financial statements issued for fiscal years beginning after December 15, 2001. The impact of the adoption of SFAS No. 144 on our reported operating results, financial position and existing financial statement disclosure is not expected to be material.

STOCK-BASED COMPENSATION

The Company accounts for stock-based awards to employees in accordance with Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees" and related interpretations and has adopted the disclosure-only alternative of FAS No. 123, "Accounting for Stock-Based Compensation."  Options granted to consultants, independent representatives and other non-employees are accounted for using the fair value method as prescribed by FAS No. 123.

YEAR END

The Company has adopted March 31 as its fiscal year end.

NOTE 3 - GOING CONCERN

These consolidated financial statements have been prepared in accordance with generally accepted accounting principles applicable to a going concern which contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business. As at March 31, 2002, the Company has recognized minimal revenue to date and has accumulated operating losses of approximately $(574,813) since inception. The Company's ability to continue as a going concern is contingent upon the successful completion of additional financing arrangements and its ability to achieve and maintain profitable operations. Management plans to raise equity capital to finance the operating and capital requirements of the Company. Amounts raised will be used to further development of the Company's products, to provide financing for marketing and promotion, to secure additional property and equipment, and for other working capital purposes. While the Company is expending its best efforts to achieve the above plans, there is no assurance that any such activity will generate funds that will be available for operations.

These conditions raise substantial doubt about the Company's ability to continue as a going concern. These financial statements do not include any adjustments that might arise from this uncertainty.

NOTE 4 - FIXED ASSETS

Fixed assets are recorded at cost. Depreciation is computed using the straight-line method. Estimated service lives of fixed assets range from 3 to 7 years.

The Company acquired fixed assets totaling $188,946 and recorded depreciation expense of $10,402 as of March 1, 2002.

Some of the computer equipment valued at $125,215 was purchased from Raj Kalra, the CEO, director and shareholder of the Company. As of March 31, 2002, the Company has made no payments to Mr. Kalra for the assets. In addition, the Company acquired fixed assets totaling $60,506 from National Data, Inc.; a company formerly owned 100% by Mr. Kalra.

NOTE 5 - ACCRUED EXECUTIVE COMPENSATION

On December 12, 2001, the Company entered into a three year Employment Agreement with Raj Kalra, it's CEO, director and shareholder, whereby the Company is to pay Mr. Kalra an annual base salary of $175,000 for the first year, $200,000 in the second year and $225,000 in the third year. For the period ended March 31, 2002, the amount accrued was $51,042. In addition, Mr. Kalra will receive a bonus equal to 10% of the adjusted net profits beginning with the year ended March 31, 2002. As of March 31, 2002, no accruals have been made for bonuses.

On December 12, 2001, the Company entered into a three year Employment Agreement with Pierre Quilliam, it's President, director and shareholder, whereby the Company is to pay Mr. Quilliam an annual base salary of $175,000 for the first year, $200,000 in the second year and $225,000 in the third year. For the period ended March 31, 2002, the amount accrued was $51,042. In addition, Mr. Quilliam will receive a bonus equal to 10% of the adjusted net profits beginning with the year ended March 31, 2002. As of March 31, 2002, no accruals have been made for bonuses.

NOTE 6 - LOANS FROM SHAREHOLDERS - RELATED PARTY

The Company purchased furniture totaling $125,215 from Raj Kalra, the CEO, director and shareholder of the Company in exchange for a note payable. In addition, Mr. Kalra loaned the Company $29,210. The notes are due upon demand and bears zero interest.

The Company was loaned $98,720 from Pierre Quilliam, the Company's president, director, and shareholder. The note is due upon demand and bears zero interest.

The Company was loaned $10,000 from AJ Galliano, the Company's Chief Technical Officer. The note is due upon demand and bears zero interest.

NOTE 7 - NOTES PAYABLE

On January 31, 2002, the Company was loaned $34,000 from Partner's Group. The note is due on January 31, 2003 and bears 4% interest. As of March 31, 2002, the Company has accrued interest in the amount of $227.

NOTE 8 - INCOME TAXES

The Company accounts for income taxes under Statement of Financial Accounting Standards No. 109, "Accounting for Income Taxes" ("SFAS No. 109"), which requires use of the liability method. SFAS No. 109 provides that deferred tax assets and liabilities are recorded based on the differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes, referred to as temporary differences. Deferred tax assets and liabilities at the end of each period are determined using the currently enacted tax rates applied to taxable income in the periods in which the deferred tax assets and liabilities are expected to be settled or realized.

The provision for income taxes differs from the amount computed by applying the statutory federal income tax rate to income before provision for income taxes. The sources and tax effects of the differences are as follows:

|U.S federal statutory rate | (34.0%)
|-------------------------- | -------
|Valuation reserve          | 34.0%  
|Total                      | -%     

As of March 31, 2002, the Company has a net operating loss carry forward of approximately $574,813 respectively, for tax purposes, which will be available to offset future taxable income. If not used, this carry forward will expire in 2022.

NOTE 9 - STOCKHOLDER'S EQUITY

The Company is authorized to issue 20,000,000 shares of its $0.001 par value common stock.

All share and per share amounts have been retroactively restated to reflect the splits discussed below.

On March 15, 1997, the Company issued 4,230,000 shares of its $0.001 par value common stock to two of its founders and directors valued at $9,400.

On January 31, 1998, the Company issued 4,140,000 of its $.001 par value common stock for total cash of $9,200 pursuant to a Regulation D, Rule 504 of the SEC 1933 Securities Act offering.

On October 25, 1999, the State of Delaware approved the Company's restated Articles of Incorporation, which changed the par value from $0.00001 to $0.001.

On January 15, 2000, the Company effected a 45-for-1 forward stock split of its $0.001 par value common stock.

On December 12, 2001, the Company cancelled 4,230,000 shares of its $0.001 par value common stock and returned the shares to treasury stock.

On December 12, 2001, the Company issued 10,500,000 shares of its $0.001 par value common stock to the shareholders of National Data, Inc. ("NDI") in exchange for 100% of the outstanding common stock of NDI. The acquisition was valued at $60,506, the cost of the underlying fixed assets.

There have been no other issuances of common stock.

NOTE 10 - WARRANTS AND OPTIONS

As of March 31, 2002, there are no warrants or options outstanding to acquire any additional shares of common stock.

NOTE 11 - RELATED PARTY TRANSACTIONS

On December 12, 2001, the Company entered into a three year Employment Agreements with Raj Kalra, it's CEO, director and shareholder and Pierre Quilliam, it's President, director and shareholder, whereby the Company is to pay each individual an annual base salary of $175,000 for the first year, $200,000 in the second year and $225,000 in the third year. For the period ended March 31, 2002, the amounts accrued was $102,083. In addition, each individual will receive a bonus equal to 10% of the adjusted net profits beginning with the year ended March 31, 2002. As of March 31, 2002, no accruals have been made for bonuses.

The Company purchased furniture totaling $125,215 from Raj Kalra, the CEO, director and shareholder of the Company in exchange for a note payable. In addition, Mr. Kalra loaned the Company $29,210. The notes are due upon demand and bears zero interest.

The Company was loaned $98,720 from Pierre Quilliam, the Company's president, director, and shareholder. The note is due upon demand and bears zero interest.

The Company was loaned $10,000 from AJ Galliano, the Company's Chief Technical Officer. The note is due upon demand and bears zero interest.

The officers and directors of the Company are involved in other business activities and may, in the future, become involved in other business opportunities. If a specific business opportunity becomes available, such persons may face a conflict in selecting between the Company and their other business interests. The Company has not formulated a policy for the resolution of such conflicts.

NOTE 12 - REVERSE ACQUISITION AGREEMENT WITH NATIONAL DATA, INC. (NDI)

On December 12, 2001, the Company entered into an agreement with NDI whereby the Company acquired all of the issued and outstanding common stock of NDI in exchange for 10,500,000 voting shares of the Company's $0.001 par value common stock. The acquisition was accounted for using the purchase method of accounting as applicable to reverse acquisitions because the former stockholders of the NDI controlled the Company's common stock immediately upon conclusion of the transaction. Under reverse acquisition accounting, the post-acquisition entity was accounted for as a recapitalization of NDI. The common stock issued was recorded at $60,506, being the fair value of the Company's assets on the acquisition date.

Unaudited Pro-forma revenue, net income and income per share assuming the transaction had been completed on November 28, 2001 (date of inception of NDI) is as follows:

|                          | Nine months ended December 31
|------------------------- | -----------------------------
|                          | 2001                         
|Revenue                   | $                -           
|Net income for the period | $                -           
|Income per share          | $          0.00              

The continuing company has retained March 31 as its fiscal year end.

NOTE 13 - CONTRACTS AND AGREEMENTS

On December 12, 2001, the Company has assumed a lease for office space with future minimum annual rental payments as follows:

|YEAR  | ANNUAL RENT
|----- | -----------
|2002  | $  58,413  
|2003  | 60,166     
|2004  | 61,971     
|Total | $180,550   

During the period ended March 31, 2002, the Company has paid a total of $20,514 for rent expense.

On January 29, 2002, the Company signed a contract for approximately $2 million to supply the NDI Smart Card Solution to a major manufacturer in the computer-based training industry.

On February 21, 2002, the Company signed a Purchase Agreement to acquire 100% of the shares of DataAssure Systems, Inc. in exchange for 1,500,000 shares of the Company's $0.001 par value common stock. Pursuant to the Agreement, the Company has also agreed to repay $85,000 in loans made to DataAssure by DataAssure shareholders. As of March 31, 2002, the Company is still working on the due diligence and has not finalized this acquisition.

On March 24, 2002, the Company signed a Purchase Agreement to acquire 100% of the ownership of Arcore Technologies, LLC (Arcore) in exchange for $2,000,000 to be paid in $25,000 installments commencing ninety days with a balloon payment of $250,000. In addition, Arcore will receive royalties equal to 5% of the net sales of any software products and technology acquired. As of March 31, 2002, the Company was still working on the due diligence and has not finalized this acquisition.

NOTE 14 - MATERIAL EVENTS

The Company has identified alleged short swing profits under Section 16(b) of the Securities Exchange Act of 1934 incurred by Pierre Quilliam, the Company's president, with respect to purchases and sales of the Company's securities in the period from August 2001 to March 2002. Mr. Quilliam has agreed to repay any short swing profits by offsetting personal loans made to the Company and accrued salary owed pursuant to his employment agreement. As of March 31, 2002, Mr. Quilliam has not repaid any monies to the Company.

NOTE 15 - SUBSEQUENT EVENTS

The Company is utilizing the services of a data center to house its central computer. A lease is being negotiated with an anticipated monthly lease payment of $4,500 for 36 months.

On April 5, 2002, the Company signed a Management and Option to Purchase Agreement with Expidant, Inc. (Expidant). The Company will be the general manager of Expidant until July 1, 2006 and has the option to purchase Expidant for $10, which expires of July 1, 2006.

On June 6, 2002, the Company cancelled the Purchase Agreement with Arcore Technologies, LLC.