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                        SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                  FORM 10-KSB

        ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
                              EXCHANGE ACT OF 1934
                  For the Fiscal Year Ended September 30, 2003

                          Commission File No. 2-95626-D

                               SIONIX CORPORATION
                 (Name of small business issuer in its charter)

                Nevada                                       87-0428526
    (State or other jurisdiction of                     (I.R.S. Employer
    incorporation or organization)                    Identification Number)

    9272 JERONIMO ROAD, SUITE 108, IRVINE, CA                 92618
    (Address of principal executive offices)                (Zip Code)

        Issuer's Telephone Number:    (949) 454-9283

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

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

                     COMMON STOCK, PAR VALUE $.001 PER SHARE
                                (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 is not 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 the year ended September 30, 2003 were $0.

        The aggregate market value of the voting stock held by non-affiliates as
of December 31, 2003, computed based on the closing price reported on the OTC
Bulletin Board, was $2,709,595.

        As of December 31, 2003, there were 82,108,949 shares of Common Stock of
the issuer outstanding.

        Documents Incorporated by Reference:       NONE

       Transitional Small Business Disclosure Format (Check one): Yes [ ] No [X]



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                                     PART I

ITEM 1. DESCRIPTION OF BUSINESS.

         Sionix designs and has commenced production and active marketing of
water treatment systems for improvement of the treatment of water for
municipalities, wastewater treatment, and industrial wastewater. Prior to
commencement of production, the Company's principal activities have been in the
areas of research, development and testing of its products. The Company was
initially incorporated in Utah in 1996, and reincorporated in Nevada in 2003.
Its executive offices and principal operations are located at 9272 Jeronimo
Road, Irvine, California 92618. Its telephone number is (949) 454-9283, and its
website is located at www.sionix.com.

INDUSTRY BACKGROUND

         DEMAND FOR CLEAN WATER. Only about three percent of the world's water
is fresh water, and most of that is frozen in ice and snow, leaving only 0.6
percent of all the world's water to be used for human consumption, including
agricultural uses. Some of this water can be used again, after it is cleaned.
But about 70 percent of all fresh water is used for irrigation, and most of this
cannot be recycled. In the U.S. about 30 percent of all irrigation water is
groundwater pumped from the High Plains aquifer, now drawn down so far that it
will take thousands of years to recharge it naturally. Approximately twenty
percent of the fresh water goes to industrial uses, leaving only about ten
percent for domestic drinking, cooking, and sanitation. Accordingly, the
purification and treatment of municipal drinking water and wastewater to
eliminate contaminants injurious to health and the environment is a worldwide
concern.

         The water purification industry is highly fragmented, consisting of
many companies involved in various capacities, including companies that design
fully integrated systems for processing millions of gallons of water for
municipal, industrial, and commercial applications. It is estimated that water
supply businesses generate approximately $400 billion in revenue worldwide
annually. Demand for water purification has continued to grow due to economic
expansion, population growth, scarcity of usable water, concerns about water
quality and regulatory requirements. Drinking water, regardless of its source,
may contain contaminants that can affect the health of consumers. Although
municipal agencies and water utilities in the United States are required to
provide drinking water which complies with the U.S. Safe Drinking Water Act, the
water supplied to homes and businesses from municipalities and utilities may
contain high levels of bacteria, toxins and parasites, as well as high levels of
chlorine used to eliminate contaminants. The quality of drinking water outside
the United States and other industrialized countries is ordinarily much worse,
with high levels of contaminants and often only rudimentary purification
systems. In the industrialized world, water quality is often compromised by
pollution, aging municipal water systems, and contaminated wells and surface
water. In addition, the specter of terrorism directed at intentional
contamination of water supplies has heightened awareness of the importance of
reliable and secure water purification. The importance of effective water
treatment is also critical from an economic standpoint, as health concerns and
impure water can impair consumers' confidence in food products, and discharge
violations can result in significant fines and penalties from regulatory
agencies.

         There are approximately 197,060 public rural water districts in the
United States. The great majority (94%, or more than 185,000) of these are
considered small to medium-sized public water systems, which support populations
of fewer than 10,000 people. On the local level, reports from the Environmental
Protection Agency (EPA) list 5,000 to 10,000 of 55,000 communities in the U.S.
that are currently in violation of the Safe Drinking Water Act at any given
time. Those numbers are expected to increase, as more stringent EPA rules are
implemented for small public water systems Those numbers are expected to
increase, as more stringent EPA rules are implemented for small public water
systems. The Association of Metropolitan Water Agencies estimates that $2
trillion will be needed over the next twenty years for repair, rehabilitation,
operation, and maintenance of the U.S. water and wastewater treatment
infrastructure. Based on market surveys by the American Water Works Association
(AWWA) and leading engineering-firms, the Company believes that water districts
using sand-anthracite filters cannot meet the new US-EPA Surface Water Treatment
Rules without massive installations of on-site chemical filter aids and
disinfection equipment, such as ozone or ultraviolet.

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         On an international level, water supply issues are viewed by many as
the next global crisis; while the quantity of available fresh water is
relatively fixed, the world population and demand for water is increasing. A
World Bank report predicts worldwide expenditures to augment water reserves will
exceed $600 billion over the next decade, as demand outstrips available supplies
due principally to agricultural development.

         The market for the treatment and purification of drinking water and the
treatment, recycling and reuse of wastewater has shown significant growth as
world demand for water of specified quality continues to increase and as
regulations limiting waste discharges to the environment continue to mount. In
1995, the world spent an estimated $335 billion for the purification of drinking
water, wastewater treatment and treatment of industrial process water and
fluids.

         EXISTING PURIFICATION SYSTEMS. Until the early twentieth century,
municipal water supplies consisted of flowing water directly from the source to
the end user with little or no processing. In the late 19th and early 20th
century, most larger municipal water systems instituted a form of filtration
called "slow sand filtration" to enhance the clarity and esthetics of delivered
waters. These municipal water filtration systems, however were extremely large
plants that are typically excavated into the landscape of the facility. The
surface area required for these filters could vary widely depending on the input
quality of the water; generally, this involves extremely large areas or
footprints. In a typical treatment facility, the first step adds to the raw
incoming water a substance which causes tiny, sticky particles (called "floc")
to form - these attract dirt and other particles suspended in the water. This
process of coagulation results in the heavy particles of dirt and floc clumping
together and falling to the bottom. These heavier particles form sediment which
is siphoned off, leaving the clearer water, which passes on to filtration. The
most common filtration method is known as "slow sand" or sand-anthracite, in
which the water flows into large shallow beds and passes down through layers of
sand, gravel and charcoal. The final process is disinfection, which is intended
to kill bacteria or other microorganisms left in the water and leave a residual
to keep the water safe through the delivery pipes to the customer. Chlorine is
the most commonly employed disinfectant, although chloramine, ozone, and
ultraviolet (UV) are also used.

         Today's trend in water filtration, due to the higher demands for water
and the reduction in clean or relatively clean source waters, is to clarify and
heavily filter all municipal water supplies. The smaller municipalities will
also be required to meet the added water quality goals of the larger systems and
will require the infrastructure to do so. Smaller municipalities ordinarily do
not have the technical or financial resources required to design build and
operate systems that will meet the new water quality criteria.

         While "slow sand" filtration is by far the most common treatment method
used in the United States, it has serious drawbacks. The treatment facilities
themselves occupy large tracts of land. The filtration beds are large, shallow
in-ground concrete structures, often hundreds of feet long to accommodate large
volumes of water. The water being filtered must remain in these beds for a
comparatively long time (known as "residence time") in order for low density
materials to settle out. The sand and charcoal filtering medium rapidly becomes
saturated and clogged. The bed must then be taken off-line and back-flushed,
which uses large volumes of water - water which becomes contaminated and is
therefore wasted. Additional settling ponds are necessary to "de-water" this
waste by evaporation so that the dried solids may be hauled to a landfill.

         The average life expectancy of a treatment plant is about 20 years,
after which they must be extensively renovated. Population growth necessitates
enlarging old facilities or building new ones, occupying still more valuable
land. This process requires lengthy environmental impact studies, long design
periods, and complex financing programs to fund costly construction budgets, as
lead times usually stretch out for years.

         Aside from cost and logistical issues, however, there are many
pathogens resistant to chlorine or small enough to pass through these existing
methods of filtration. Illnesses such as hepatitis, gastroenteritis,
Legionnaire's Disease, as well as increasingly pervasive chemical contaminants,
have become increasingly common.

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         One of the more difficult of these problems is monitoring and providing
a barrier against microscopic protozoan parasites such as cryptosporidium (3-4
microns in size) and Giardia lamblia oocysts (5-7 microns). These common
organisms exist naturally in the digestive systems of livestock and wild
animals, and end up in lakes and streams. They have caused severe illness in
millions of people in the United States. Conventional "slow sand" water
filtration beds, used in most of the nation's public water districts, will not
filter out these parasites - the best treatment facilities are only able to
remove particles larger than 10-15 microns.

         In recent years, there have been several serious public health
emergencies caused by microbes breaking through the filtration barrier in
treatment facilities. When ingested, they can cause diarrhea, flu-like symptoms
and dehydration. In persons with immune system impairment, the illness can be
life-threatening. In 1993, over 400,000 people in Milwaukee, Wisconsin became
ill and about 100 people died during a failure in the drinking water filtration
system.

        Most bodies of surface water in the United States, many of which supply
drinking water, are contaminated with these organisms. They are extremely
resistant to disinfection, and increasing disinfectant levels in the attempt to
kill them creates a new set of problems. Disinfectants such as chlorine can
react with organic matter in the water to form new chemicals known as
"disinfection byproducts". These byproducts, of which trihalomethanes (THM's)
are the most common, are thought to be health-threatening and possibly
cancer-causing. Recent modifications in the EPA-SDWA regulations have addressed
minimum acceptable levels of THM's. Therefore, physical removal of the organisms
from the water is vitally important to their control.

         The challenge of removing organic matter from water has been at the
crux of water treatment since antiquity. Organic matter causes water to be
cloudy (turbidity). High levels of turbidity can indicate the presence of
pathogens and signal that the filtration process is not working effectively. The
presence of high levels of organic matter makes disinfection more difficult and
clogs filter media, causing long back flush cycles, which in turn increases the
volume of back flush waste-water. In a typical treatment plant, this back flush
water can account for up to 20 percent of the raw water volume flowing through
the facility.

         Other filtration methods, such as reverse osmosis and activated
charcoal, may be required to remove contaminants such as organic and inorganic
chemicals, salts, color, odors, and viruses. However, they too are clogged
quickly by organic particles in the water. These filter media are comparatively
expensive - frequent back flush cycles drastically shorten filter life, thereby
increasing the cost of treatment.

         THE COMPANY'S STRATEGY. The Company was formed to develop advanced
water treatment technology for public and private potable drinking water systems
and wastewater treatment systems, as well as industrial systems, in order to
address these issues. In the United States alone there are approximately 200,000
public rural water districts, the great majority of which serve populations of
less then 10,000. The Company believes that a substantial portion of these
districts operate in violation of the U.S. Safe Drinking Water Act, and those
numbers are expected to increase as more stringent Environmental Protection
Agency rules for small public water systems become effective. In addition,
urbanization in the third world and the spread of agricultural activities has
increased the demand for public water systems. The company has initially
targeted (1) small to medium public water districts that provide communities
with drinking water or sewage treatment service and (2) water reclamation
systems of commercial-industrial clients that create and dispose of contaminated
wastewater.

          The Sionix system is a sealed unit, thus preventing tampering or
incursion by bio-terrorism or airborne contaminants due to the steel container
in which the Sionix system is assembled. Should catastrophic damage be incurred,
a replacement unit may be installed within a few days rather than many months or
years with in-ground systems.

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PRODUCTS AND TECHNOLOGY

         DISSOLVED AIR FLOTATION. Dissolved air flotation, or DAF, has been used
in water and wastewater treatment for more than eighty years, primarily in
Europe. Some of the first systems installed in the 1920's are still in operation
in Scandinavia. The DAF method involves injecting microscopic bubbles of air
under pressure into the water being treated. The air molecules bond with organic
matter in the water, and because of their lightness, the clumps float to the
surface, where they are skimmed away. Over the eight decades this technology has
been utilized, various improvements have been made in the technology. Until
recently, it has not been utilized widely in the United States, and then
primarily for wastewater treatment.

         SIONIX DAF-225 WATER TREATMENT SYSTEMS. The dissolved air flotation
system developed by Sionix employs patented technology. It removes upwards of
99.5 percent of the organic particles in water, and provides an absolute barrier
against microbial contaminants such as cryptosporidium and Giardia lamblia. Each
DAF-225 Water Treatment System is a highly efficient, self-contained water
treatment system or pre-treatment process using ordinary air, with minimal
chemical filter aids. This helps ordinary filters meet new USEPA Safe Drinking
Water Act regulations. Our goal is to provide effective, practical and
economical solutions to problems caused by pollution and toxic chemicals that
seriously threaten public health and our environment. Sionix's systems
significantly reduce the risk of bacterial or parasitic contamination,
particularly cryptosporidium, giardia, and e-coli, with minimal or no
disinfecting by-products. Our systems are designed for quick installation, easy
access for simple maintenance and are cost-effective for even the smallest water
utilities or commercial applications. This technology is designed to support
public water treatment plants, sewage treatment plants, water reclamation
facilities, commercial air conditioning cooling towers, emergency water systems
for floods, earthquakes and other natural disasters. The Sionix system occupies
a small footprint, is self-contained and portable. Equally important, in most
cases, it does not require costly and time consuming environmental studies.

         The Company's DAF Particle Separator utilizes and refines this
technology for a highly efficient pre-treatment process using ordinary oxygen.
In addition, it helps ordinary filters meet new EPA Safe Drinking Water Act
(SDWA) regulations and eliminates potentially cancer-causing disinfection
by-product precursors while reducing the risk of bacterial or parasitic
contamination, particularly THM's, cryptosporidium and giardia. The Company's
patented equipment systems are designed for quick installation, easy access for
simple maintenance and to be cost-effective for even the smallest water
utilities or commercial applications.

        By reducing turbidity to extremely low levels, the Sionix system
remediates against disinfection byproducts such as Trihalomethanes (THM's). Used
in conjunction with filtration or disinfection technology which may be required
by specific raw water conditions, it reduces back-flushing cycle times, thereby
lengthening the life of post-DAF equipment.

         Completely modular, the Company customizes each system installation
with filtration and disinfection options appropriate for the user. The entire
unit is built into a standard thirty-foot or forty-foot ISO transportable
container, making it easy to move by truck, train, plane, helicopter, or ship.
Standard configuration includes a small control and testing laboratory located
in the front of the container. The addition of a generator module makes the
system self-powered. The customer can operate and control the entire system from
a remote site via hardwired or wireless communications. Sionix builds its
systems for quick installation (typically under 48 hours) and ease of
maintenance. A comprehensive service and maintenance program (part of all
equipment leases) includes a standard upgrade path.

         A single unit will produce a minimum of 200 gallons of potable water
per minute (about 288,000 gallons per day), enough for a community of 2,400
people and its infrastructure - which is about 500-600 homes in the United
States, based on U.S. Government guidelines. It is important to note that per
capita usage of water in the U.S. is among the highest in the world. Two or more
units can be ganged together for increased capacity.

         The Sionix water purification systems are ideal for small to
medium-sized potable water treatment utilities. They serve equally well in
commercial/industrial uses where incoming process water must be treated to high
levels of purity, or wastewater must be decontaminated before discharge. The
products also address water quality issues faced by commercial and industrial
facilities that process water or produce toxic wastewater, such as food and
beverage processing plants, dairy products facilities, and fresh water
aquaculture installations, such as fish farms.

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         A major problem facing the water treatment industry is the difficulty
in monitoring and disposing of microscopic parasites such as Cryptosporidium
(4-5 microns) and Giardia cysts (7-12 microns), common chlorine-resistant
organisms that have infected millions of people in the United States.
Sand-anthracite water filtration beds, in use in most of the nation's public
water districts, will not filter out these parasites and experience frequent
breakthroughs of Cryptosporidium sized particles.

         The Company uses a more efficient method of saturating recirculated
post-filter water with excess dissolved air, and injecting this excess air in
the form of microscopic bubbles in a DAF particle separator. Pressurized water
can hold an excess amount of dissolved air and forms microscopic bubbles when
injected into water, which has a lower pressure. A booster pump recirculates a
small amount (approximately 10%) of the post-filtered water through the
dissolved air-saturation system. Oxygen and nitrogen molecules are transferred
directly into the recirculated high-pressure water without forming air bubbles.

         This method of transferring air into water is 100% efficient, and
reduces the amount of energy required to saturate recirculated water with excess
dissolved air. The Sionix DAF separator provides a denser concentration of white
water bubbles. This process requires less energy than a conventional system, and
a fraction of the floor space.

         In general, water districts using sand-anthracite filters cannot meet
the new EPA Surface Water Treatment rules without a massive increase in on-site
chemical filter-aids, additional filtering and the installation of ozone or
other disinfection equipment. Plant operators must continually test raw influent
water to adjust chemical filter aid dosage properly. Chemical and metal (alum)
filter-aids increase sludge volume and landfill disposal problems.

         The Company's systems include automatic computer controls to optimize
ozone concentration levels and reduce monthly energy costs. Higher ozone contact
concentration levels using smaller sized generators are possible if most of the
algae are removed first by DAF. Extended contact time increases collision rate
of ionized ozone molecules with negatively charged organic suspended particles.
By utilizing the Sionix DAF particle separator to pre-treat the feedwater, less
energy is required to create the appropriate amount of ozone. By creating a
turbulent flow of water and gas within the mixing chamber, the Company has
achieved a much higher saturation with less ozone (and a minimum of excess
ozone) than in other mixing methods. This equipment was designed to match
flow-throughs with the Sionix DAF particle separator, can also be manifolded to
create more flow-through, is installed, not constructed, and can be used with or
without the DAF system, depending on the quality of the feedwater.

         PRIVATE LABEL PRODUCTS. In January of 2004 the Company entered into a
Private Label Manufacturing Agreement EPD Wearnes (USA) Inc. under which EPD
will manufacture certain water filtration products and accessories for the
Company to be marketed and sold under the Sionix brand name. We believe the
arrangement with EPD will allow us to expand our product line beyond our DAF
systems, so that we can offer a full range of water filtration products and
systems and capitalize on our marketing efforts. In addition to appealing to a
wider range of water systems, it would allow us to offer several other methods
and technologies, including granular media filtration, micro-filtration,
membrane filtration and alternative disinfection technologies. The agreement is
for an initial term of two years.

MARKETING AND CUSTOMERS

         THE MARKET. The potable water market includes residential, commercial,
and food service customers. Demand is driven both by consumers' desire to
improve the taste and quality of their drinking water and by the expanded
concern of regulatory agencies. Water safety concerns have driven the growth of
the consumer bottled water market to over $2 billion in the United States, as
well as the growth in the water filtration market.

         According to industry data, it is estimated that one billion people in
the world do not have safe drinking water. Demand is driven both by consumers'
desire to improve the taste and quality of their drinking water and by the
expanded concern of regulatory agencies. There is significant market potential
in Asian, Pacific and Latin American countries, where the quality of drinking
water has been found to be severely deficient in several regions. Outbreaks of
cryptosporidium and giardia cyst in the United States and Australia have also
raised health concerns in major developed countries. Water safety concerns have
driven the growth of the consumer bottled water market to over $2 billion in the
United States, as well as the growth in the water filtration market.

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         In the United States, the Company plans to initially target the
established base of small to medium water providers, as well as industrial users
(such as the dairy industry, meat and poultry producers, cruise ship operators,
food and beverage processors, pharmaceuticals, cooling tower manufacturers and
oil and gas producers) and disaster relief agencies with a need for a clean,
consistent water supply. Outside the United States, the Company plans to market
principally to local water systems and international relief organizations.

         The Company's marketing efforts emphasize that its products are easily
expandable and upgradable; for example, adding ozone and microfiltration
equipment to a DAF unit is similar to adding a new hard drive to a personal
computer. Each piece of equipment comes with state-of-the-art telemetry and
wet-chemistry monitoring that expands as the system does. The Company plans to
provide lease financing for all of its products, not only making it easy for a
customer to acquire the equipment, but also guaranteeing that the customer will
always have access to any refinements and improvements made to the Company's
products.

         Pilot study requirements and potential adverse environmental effects
can generally be more easily addressed with Sionix' prepackaged plant approach.
The company's initial approach to the market place is to supply the best of
practice process for the largest number of water types encountered. The
following is a brief description of the types of customers to be targeted:

         DOMESTIC WATER UTILITIES. There are approximately 197,060 public rural
water districts in the United States. The great majority (94%, or more than
185,000) of these are considered small to medium-sized public water systems,
which support populations of fewer than 10,000 people. Reports of the EPA in the
Federal Registry list over 50,000 communities in the United States that are
currently in violation of the Safe Drinking Water Act. These numbers are
expected to increase, as more stringent EPA rules for small public water systems
become effective. Many of these systems do not have the financial capability to
reach compliance with these rules. The burden of acquiring additional land, the
time and money involved in environmental impact studies, and the actual
construction costs of extensive, permanent in-ground facilities have created a
situation where it is extremely difficult for many of these utilities to come
into compliance.

         The Company believes that the Sionix system can provide a comprehensive
solution for these utilities. It avoids most of the above problems, occupies a
small footprint, is self-contained and portable. Equally important, in most
cases, it does not require costly and time consuming environmental studies.

         INDUSTRIAL WASTEWATER PURIFICATION. Many industries use water in their
manufacturing process which results in contamination. This wastewater must be
treated and purified before it can be reused or released into the ocean or
streams. Principal markets are: pharmaceutical manufacturers, producers of paper
products, the dairy industry, and silicon chip manufacturers. The small
footprint, low cost, and predictably efficient output of the Sionix DAF system
make it an excellent choice for customers in these markets.

         FOOD AND BEVERAGE INDUSTRY. The production of beer and wine, soft
drinks, and food products require water of a specific purity that must be
controlled and monitored as part of the production process. The food service
industry has an increasing need for consistent global product quality. Food
service includes water used for fountain beverages, steam ovens, coffee and tea.
Specifically, restaurants have become increasingly aware of the need for water
filtration to control the taste and quality of the water used in their
businesses. The Sionix DAF system is well adapted to this need; its built-in
SCADA (Supervisory Control and Data Acquisition) monitoring system enables
real-time control over process water purity.

         HEALTHCARE INDUSTRY. Hospitals require clean, uncontaminated water for
their normal day-to-day operations. They also produce contaminated water that
may require treatment before being reused or released. The Sionix DAF system
will process waste-water to a specific and controlled purity. The systems can be
used to filter water going into or coming out of use. In such exacting
situations, the customer may be able to reuse contaminated water or ensure
decontamination before discharge.

         WASTEWATER UTILITIES (SEWAGE TREATMENT). The Sionix DAF system will
treat any degree of contamination. Sewage overflows are a major problem in many
communities. The DAF unit can function as a cost-effective emergency alternative
to mitigate the problem of overflows.

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         MILITARY MARKETS. Rapid deployment of large numbers of troops requires
a reliable water supply on short notice, often under very arduous conditions.
Also, permanent military facilities frequently lack a predictably pure water
supply. Challenges include the threat of unexpected contamination by dirt,
chemicals, or other foreign material. The ease of transport, speed of setup, and
high reliability of the Sionix DAF unit should serve this market. Furthermore,
the Sionix system is a sealed unit, thus preventing tampering or incursion by
airborne contaminants. The steel ISO container in which the Sionix system is
built also protects it from small arms' fire. Bacterial contaminants are removed
by the DAF system, and customized barriers can be added for special situations.

         THIRD-WORLD MARKETS. In addition to the domestic market, fast spreading
urbanization in third-world countries has created a growing demand for public
water systems. Most of the fatal waterborne illnesses occur in these countries.
Industrial and agricultural contamination of water supplies is epidemic because
environmental controls are neither adequate nor well enforced. The need for
affordable and easily installed water purification systems which will remove
pernicious bacterial and parasitic contamination of ground and surface water
supplies is extensive, as documented in the United Nations report, "The Global
Water and Sanitation Assessment 2000."

         EMERGENCIES AND NATURAL DISASTERS. During natural disasters such as
earthquakes, floods, hurricanes, and tornadoes, it is the role of the National
Guard and the Federal Emergency Management Agency (FEMA) to assist local
authorities with emergency services. Damage to local utilities can disrupt the
drinking water supply and cause the failure of wastewater (sewage) treatment
plants. The Sionix system can help address both of these problems. The system is
completely self-contained, can be easily transported from place to place, is
highly efficient, and can be equipped with its own power package.

         DESALINIZATION. Reverse osmosis (RO) is among the most efficient
desalinization processes available today. An RO desalinization system requires
prefiltration to reduce clogging of the filter membrane by organic matter.
Placed in front of an RO filter unit in a desalinization system, the Sionix DAF
unit will greatly lengthen the time between costly back-flushes and prolong the
life of the RO filters.

         MARKETING. Sionix plans to market its products through participation in
industry groups, selected advertising in specialized publications, trade shows,
and direct mail. Ultimately, each of the first 20-plus systems built will be a
reference site for one of the primary market segments. Sionix initially will
utilize in-house marketing in conjunction with outsourced marketing consultants.
For worldwide marketing, discussions are currently underway with established
marketing firms in Singapore (for the Pacific Rim) and in Mexico.

PATENTS

         The Company holds seven U.S. patents on technology incorporated into
the Sionix Particle Separator Treatment System and related components. One
patent covers an automatic backflushing system using air pressure to activate
the valves and another concerns the ozone mixing system. The Company also holds
several patents on the inline wet-chemistry water quality monitoring system, and
regularly processes new patent applications. The extent to which patents provide
a commercial advantage or inhibit the development of competing products varies.
To some extent, however, the Company is required to rely upon common law
concepts of confidentiality and trade secrets, as well as economic barriers
created by the required investments in tooling and technical personnel and the
development of customer relationships, to protect its proprietary products. The
Company has filed four additional patent applications which are currently
pending The Company plans to file for several additional patents in 2004.

COMPETITION

         The Company's products will compete with other producers of water
filtration and purification equipment, such as U.S. Filter and Cuno, Inc., many
of which are more established and have significantly greater resources. The
Company will also compete with large architectural/engineering firms that design
and build water treatment plants and waste water facilities. In addition to
conventional methods such as chlorination and ozonation, the Company's products
may also compete with other new technologies for water filtration. Competitive
factors include system effectiveness, operational cost, practicality of
application, pilot study requirements and potential adverse environmental
effects. In competing in this marketplace, the Company will have to address the
conservative nature of public water agencies and fiscal constraints on the
installation of new systems and technologies.

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REGULATORY MATTERS

         Process water treatment plants and wastewater plants must comply with
clean water standards set by the Environmental Protection Agency under the
authority of the Clean Water Act and standards set by states and local
communities. In many jurisdictions, including the United States, because process
water treatment facilities and wastewater treatment systems require permits from
environmental regulatory agencies, delays in permitting could cause delays in
construction or usage of the systems by prospective customers.

         In 1974, the Safe Drinking Water Act (SDWA) was passed. It empowered
the EPA to set maximum levels of contamination allowable for health-threatening
microbes, chemicals, and other substances which could find their way into
drinking water systems, and gave the agency the power to delegate enforcement.

         By 1986, Congress was dissatisfied with the speed with which the EPA
was regulating and enforcing contaminant limits. The SDWA revision that year set
rigid timetables for establishing new standards and ordered water systems to
monitor their supplies for many substances not yet regulated by EPA standards.
Additionally, it limited polluting activities near public groundwater wells used
as drinking water sources - an acknowledgment of the growing threat to
underground water supplies. It named 83 contaminants and set out a program for
adding 25 more every three years, as well as specifying the "best available
technology" for treating each contaminant.

         The timetable for imposing these regulations was rigid and tended to
treat all contaminants as equally dangerous, regardless of relative risk. The
cost to water districts for monitoring compliance became a significant burden
-especially to small or medium-sized districts. The 1986 law authorized the EPA
to cover 75 percent of state administrative costs, but in actuality, only about
35 percent was funded. By 1993, the EPA reported that more than 16,000 community
systems were out of compliance with the act, but state regulators had taken
enforcement action against fewer than 9 percent of the violators.

         Congress updated the SDWA again in 1996, improving on the existing
regulations in two significant ways. First, they changed the focus of
contaminant regulations to reflect the risk of adverse health effects, the rate
of occurrence of the contaminant in public water systems, and the estimated
reduction in health risk resulting from regulation. Along with this, a thorough
cost-benefit analysis must be performed by the EPA, with public health
protection the primary basis for determining the level at which drinking water
standards are set. Second, states were given greater flexibility to implement
the standards while arriving at the same level of public health protection. In
addition, a revolving loan fund was established to help districts build
necessary improvements to their systems.

TESTING AND CERTIFICATION

         As outside testing and certification of products is a key element in
sales to public utilities, government agencies and major companies, we are in
the process of seeking such third party testing and certification for the DAF
225 Water Filtration System. In the water treatment industry, the preferred
method to achieve test certification is by NSF International(R), a testing
laboratory and consumer safety organization in Ann Arbor, Michigan. We are in
the process of submitting our application and supporting documentation to NSF
for evaluation in its U.S. Environmental Protection Agency/ Environmental
Technology Verification Program. The Environmental Technology Verification
program is a joint effort by NSF and the U.S Environmental Protection Agency,
which provides independent performance evaluation of drinking water equipment
and components. We believe such certification will assist us in foreign sales as
well, since NSF is a recognized testing and evaluation company throughout the
world, and is actively involved in establishing international standards.

         We believe that certification of results by NSF, when successfully
completed, will afford our DAF 225 Water Treatment System the credentials
required for sales to domestic and foreign public utilities and agencies, as
well as private companies. Certification should also provide our sales team with
data to present to engineers, architects and public officials around the world.
While we have commenced our application, we cannot predict the time frame for
approval, or whether our products will be approved and certified. We are also
pursuing establishment of a testing site, where the DAF 225 would be installed
in an operating water system on a "beta" basis and actively monitored by our
engineers and the customer or agency.

                                       8

<PAGE>

RESEARCH AND DEVELOPMENT

         The Company invests significantly in the development of products for
new applications. Only direct costs associated with tooling for new products are
capitalized. All other costs, including salaries and wages of employees included
in research and development, are expensed as incurred. Most of the Company's
research and development efforts are in connection with development and
refinement of the DAF Particle Separator and related components.

RAW MATERIALS

         Materials and components to be used by the Company for manufacturing
will be carefully selected based on stringent specifications for usage and
operating conditions. Every effort will be made to specify parts from multiple
sources for independence from manufacturers and distributors. In developing its
products, the Company has avoided using hard-to-get special parts to further
minimize dependency from vendors. Simplicity in design and the use of common,
widely used and readily available components is emphasized.

EMPLOYEES

         The Company has four full-time employees, none of whom are covered by
any collective bargaining agreement. The Company considers its relationship with
its employees to be good.

ITEM 2. DESCRIPTION OF PROPERTY.

         The Company's office/manufacturing facility is located in Irvine,
California and is leased pursuant to a lease expiring in July of 2004. The
facility consists of approximately 3,400 square feet, including office area and
adjoining manufacturing/ warehouse area. Management believes the Company's
facility will provide adequate space for its office, product assembly and
warehouse activities, although it may lease additional space for component
assembly and warehouse uses, depending on demand. The Company believes that
suitable additional space will be available to accommodate planned expansion.

ITEM 3. LEGAL PROCEEDINGS.

         In October of 2003 the action by certain shareholders against the
Company pending in Orange County, California (Sullivan, et al v. Sionix
Corporation, et al, Case No. 03CC00283) was dismissed without prejudice for
failure to state a cause of action. In December of 2003 the plaintiffs re-filed
the action, including a derivative suit on behalf of the corporation. The
Company has filed a demurrer and motion to strike, as well as a motion to
require the plaintiffs to post bond with respect to the derivative action. A
hearing on these motions is set for January 2004. The Company believes the
action is without merit and plans to vigorously contest the matter.

         In similar proceedings pending in Federal Court in Kansas (Fuehr, et al
v. Sionix, et al), Sionix responded to the complaint with a motion requesting
that the Court dismiss the action. In October 2003, the plaintiffs in the Kansas
case dismissed the action without prejudice. That case has not been re-filed.

         As a part of the proceedings against Jack Moorehead in San Diego
Superior Court, the Company sought and obtained an order prohibiting Wade Cowart
from effecting sales of his Sionix stock. In order to obtain the order, Sionix
posted a security bond of $100,000, and Mr. Cowart was restrained from selling
shares of the Company's Common Stock. Mr. Cowart filed a motion seeking to
proceed against the bond, and was successful. Accordingly, the bond was released
to Mr. Cowart, and the proceeding has been terminated.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

            At its 2003 Annual Meeting of Shareholders, held on May 21, 2003,
the shareholders approved the change of the Company's jurisdiction to the State
of Nevada, through a merger with a newly-organized Nevada corporation. No
shareholders exercised dissenters' rights in connection with the reincorporation
merger. The shareholders also approved an increase in the authorized capital of
the corporation from 100 million shares to 150 million shares, and elected
directors. The following is a description of the votes cast:

                                       9



<PAGE>

   Matter            Votes in Favor       Votes Against      Abstain or Withhold
   ------            --------------       -------------      -------------------

Reincorporation        44,287,237           3,953,082             440,000

Increase In
Authorized Capital     40,548,990           8,141,329                 -0-

Election of Directors:

Nominee                  For                 Against               Withhold
-------                  ---                 -------               --------

James J. Houtz         44,550,104           3,271,420              868,795
Robert McCray          47,859,715             226,800              603,804
Joan Horowitz          43,459,972           4,626,543              603,804
Rodney Anderson        41,192,083           3,156,839            4,340,804
Dr. Joseph Katz        47,141,083             723,632              825,604

                                     PART II

ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

         The Company's Common Stock is listed and traded on the OTC Bulletin
Board under the symbol "SINX". The following table represents the high and low
closing prices for the Company's common stock for each quarter of the two fiscal
years ended September 30, 2003.

         Fiscal 2003                        High             Low
         -----------                        ----             ---

         First Quarter                     $.48             $.20
         Second Quarter                     .25              .12
         Third Quarter                      .22              .12
         Fourth Quarter                     .16              .05

         Fiscal 2002                        High             Low
         -----------                        ----             ---

         First Quarter                      $.21            $.12
         Second Quarter                      .27             .13
         Third Quarter                       .27             .14
         Fourth Quarter                      .44             .30

         There were approximately 988 holders of record of the Company's common
stock as of September 30, 2003. The Company has never declared or paid any cash
dividend on its shares of common stock.

         During the quarter ended September 30, 2003, the Company issued
3,622,348 shares of Common Stock to a private investor for cash, at a price of
$.08 per share.

         The Company believes such sales were exempt from the registration
requirements of the Securities Act of 1933, as amended, by virtue of Section 4
(2) thereof and Regulation D thereunder.

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

         GENERAL. The Company has formulated its business plans and strategies
based on certain assumptions of the Company's management regarding the size of
the market for the products the Company will be able to offer, the Company's
anticipated share of the market, and the estimated prices for and acceptance of
the Company's products. Although these plans and assumptions are based on the
best estimates of management, there can be no assurance that these assessments
will prove to be correct. No independent marketing studies have been conducted
on behalf of or otherwise obtained by the Company, nor are any such studies
planned. Any future success that the Company might enjoy will depend upon many
factors, including factors which may be beyond the control of the Company or
which cannot be predicted at this time. These factors may include product
obsolescence, increased levels of competition, including the entry of additional
competitors and increased success by existing competitors, changes in general
economic conditions, increases in operating costs including cost of supplies,
personnel and equipment, reduced margins caused by competitive pressures and
other factors, and changes in governmental regulation imposed under federal,
state or local laws.

                                       10



<PAGE>

         RESULTS OF OPERATIONS (YEAR ENDED SEPTEMBER 30, 2003 COMPARED TO YEAR
ENDED SEPTEMBER 30, 2002). During the 2003 fiscal year the focus of the
Company's efforts was on preparation for commencement of manufacturing and
distribution of its products, including the DAF (Dissolved Air Flotation),
Automatic Back-Flush Filtration System, O-Zone Mixing Chamber and other related
products.

         The Company is continuing its engineering focus on hardware and water
filtration equipment. The Company has completed testing, and has previewed its
products with experienced treatment plant managers and certified operators to
gauge their level of acceptance. Also, the Company has arranged for lease and
maintenance financing for its product lines.

         For the year ended September 30, 2003, the Company reported a loss of
$1,721,991, or $.02 per share. This compares with a loss of $1,243,309, or $.02
per share for the year ending September 30, 2002. The increase in the net loss
is principally due to increased general and administrative expenses, as well as
substantially increased reduced research and development costs.

         RESULTS OF OPERATIONS (YEAR ENDED SEPTEMBER 30, 2002 COMPARED TO YEAR
ENDED SEPTEMBER 30, 2001).

         LIQUIDITY AND CAPITAL RESOURCES. On September 30, 2003, the Company had
cash and cash equivalents of approximately $102,937. The principal source of
liquidity has been sales of securities. Management anticipates that additional
capital will be required to finance the Company's operations. The Company
believes that anticipated proceeds from sales of securities and other financing
activities, plus possible cash flow from operations during the 2004 fiscal year,
will be sufficient to finance the Company's operations. However, the Company has
no commitments for financing, and there can be no assurance that such financing
will be available or that the Company will not encounter unforeseen difficulties
that may deplete its capital resources more rapidly than anticipated. Also, the
Company may not be able to generate revenues from operations during the fiscal
year.

         As of September 30, 2003, the Company had an accumulated deficit of
$12,487,480. It can be expected that the future operating results will continue
to be subject to many of the problems, expenses, delays and risks inherent in
the establishment of a developmental business enterprise, many of which the
Company cannot control.

         GOING CONCERN OPINION. We currently have insufficient assets to
continue our operations, unless we secure additional financing. As a result of
our recent losses, negative cash flows from operations, and accumulated deficits
at September 30, 2003, there is doubt about the Company's ability to continue as
a going concern.

ITEM 7.  FINANCIAL STATEMENTS

                               SIONIX CORPORATION

                          INDEX TO FINANCIAL STATEMENTS

Independent Auditors' Report...........................................12

Balance Sheet..........................................................13

Statements of Operations...............................................14

Statements of Stockholders' Deficit....................................15

Statements of Cash Flows...............................................18

Notes to the Financial Statements......................................19

                                       11



<PAGE>

                          INDEPENDENT AUDITORS' REPORT

To the Board of Directors and Stockholders
Sionix Corporation

We have audited the accompanying balance sheet of Sionix Corporation (a Nevada
corporation) as of September 30, 2003 and the related statements of operations,
stockholders' equity, and cash flows for the years ended September 30, 2003 and
2002 and for the period from October 3, 1994 (inception) to September 30, 2003.
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 auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Sionix Corporation as of
September 30, 2003 and the results of its operations and its cash flows for the
years ended September 30, 2003 and 2002 and for the period from October 3, 1994
(inception) to September 30, 2003, in conformity with accounting principles
generally accepted in the United States of America.

The Company's financial statements are prepared using the generally accepted
accounting principles applicable to a going concern, which contemplates the
realization of assets and liquidation of liabilities in the normal course of
business. The Company has deficit accumulated from inception amounting
$12,487,480 at September 30, 2003 including a net loss of $1,721,991 incurred in
the year ended September 30, 2003. These factors as discussed in Note 11 to the
financial statements, raises substantial doubt about the Company's ability to
continue as a going concern. Management's plans in regard to these matters are
also described in Note 11. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.

/s/ KABANI & COMPANY, INC.

                                       12



<PAGE>
<TABLE>

                                   SIONIX CORPORATION
                              (A Development Stage Company)
                                      BALANCE SHEET
                                   SEPTEMBER 30, 2003

                                         ASSETS
<S>                                                                        <C>
CURRENT ASSETS:
          Cash & cash equivalents                                          $    102,937
          Prepaid expense                                                       130,649
          Inventory                                                             365,078
          Other receivable                                                       15,000
                                                                           -------------
                    Total current assets                                        613,664

PROPERTY AND EQUIPMENT, NET                                                     142,566

OTHER ASSETS
          Restricted cash                                                       100,000
          Deposits                                                                6,831
                                                                           -------------
                    Total other assets                                          106,831

                                                                           -------------
                                                                           $    863,061
                                                                           =============

                    LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
          Accounts payable                                                 $     75,222
          Accrued expenses                                                        3,866
          Accrued interest                                                       28,354
          Notes payable - related parties                                        40,000
          Notes payable under equity line of credit                             500,000
                                                                           -------------
                    Total current liabilities                                   647,442

COMMITMENTS & CONTINGENCIES

STOCKHOLDERS' EQUITY
          Common stock, $0.001 par value; 150,000,000 shares authorized;
              89,458,153 shares issued and 85,112,470 shares outstanding         85,112
          Additional paid-in capital                                         12,625,336
          Stock to be cancelled; 7,349,204 shares of common stock                (7,349)
          Deficit accumulated from inception                                (12,487,480)
                                                                           -------------
                    Total stockholders' equity                                  215,619

                                                                           -------------
                                                                           $    863,061
                                                                           =============

       The accompanying notes are an integral part of these financial statements.
</TABLE>

                                       13



<PAGE>
<TABLE>

                                         SIONIX CORPORATION
                                    (A Development Stage Company)
                                      STATEMENTS OF OPERATIONS
<CAPTION>
                                                                                        CUMULATIVE
                                                                                      FROM INCEPTION
                                                         YEAR ENDED SEPTEMBER 30,   (OCTOBER 3, 1994) TO
                                                           2003            2002      SEPTEMBER 30, 2003
                                                       -------------   -------------   -------------
<S>                                                    <C>             <C>             <C>
REVENUES                                               $         --    $         --    $         --

EXPENSES:

General and administrative                                1,557,407       1,383,876       9,778,717
Research and development                                    138,469          68,550       1,423,612
Impairment of intangible assets                                  --          76,736       1,117,601
Depreciation and amortization                                24,789          21,158         399,985
                                                       -------------   -------------   -------------
                                                          1,720,665       1,550,320      12,719,915
                                                       -------------   -------------   -------------

OPERATING LOSS                                           (1,720,665)     (1,550,320)    (12,719,915)

OTHER INCOME (EXPENSE)
Interest income                                               3,192           7,810          53,321
Interest expense                                             (4,618)         (3,950)       (211,342)
Loss on settlement of debts                                      --         (19,066)        (36,047)
Legal settlement                                              1,000         323,117         434,603
                                                       -------------   -------------   -------------
                                                               (426)        307,911         240,535
                                                       -------------   -------------   -------------

LOSS BEFORE INCOME TAXES                                 (1,721,091)     (1,242,409)    (12,479,380)

Income taxes                                                    900             900           8,100
                                                       -------------   -------------   -------------

NET LOSS                                               $ (1,721,991)   $ (1,243,309)   $(12,487,480)
                                                       =============   =============   =============

BASIC AND DILUTED NET LOSS PER SHARE                   $      (0.02)   $      (0.02)
                                                       =============   =============

BASIC AND DILUTED WEIGHTED AVERAGE NUMBER OF COMMON
   STOCK OUTSTANDING                                     78,867,828      66,338,502
                                                       =============   =============

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

</TABLE>

                                                 14



<PAGE>
<TABLE>

                                                   SIONIX CORPORATION
                                              (A Development Stage Company)
                                      STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
                                 FROM INCEPTION (OCTOBER 3, 1994) TO SEPTEMBER 30, 2002
<CAPTION>

                                COMMON STOCK                                                                 DEFICIT       TOTAL
                          ---------------------  ADDITIONAL   STOCK      STOCK       STOCK     UNAMORTIZED ACCUMULATED STOCKHOLDERS'
                           NUMBER OF              PAID-IN     TO BE   SUBSCRIPTION   TO BE     CONSULTING     FROM        EQUITY
                             SHARES     AMOUNT    CAPITAL     ISSUED   RECEIVABLE  CANCELLED      FEES      INCEPTION    (DEFICIT)
                          ----------- --------- ------------ -------- ------------ ---------- ------------- ---------- -------------
<S>                       <C>         <C>       <C>          <C>      <C>          <C>        <C>           <C>        <C>
Shares issued for
  cash-Oct 1994               10,000  $     10  $        90       --  $        --  $      --  $         --  $      --  $        100

Net loss for period
  Oct 3, 1994 to
  Dec 31, 1994                    --        --           --       --           --         --            --     (1,521)       (1,521)
                          ----------- --------- ------------ -------- ------------ ---------- ------------- ---------- -------------

Balance December
  31, 1994                    10,000        10           90       --           --         --            --     (1,521)       (1,421)

Shares issued for
  assignment right         1,990,000     1,990       (1,990)      --           --         --            --         --            --

Issuance of shares
  for service                572,473       572      135,046       --           --         --            --         --       135,618

Issuance of shares
  for debt                 1,038,640     1,038    1,164,915       --           --         --            --         --     1,165,953

Issuance of shares
  for cash                   232,557       233    1,119,027       --           --         --            --         --     1,119,260

Issuance of shares
  for subscription
  note receivable            414,200       414    1,652,658       --   (1,656,800)        --            --         --        (3,728)

Issuance of shares for
  future production cost     112,500       113      674,887       --     (675,000)        --            --         --            --

Net loss for the year
  ended December 31, 1995         --        --           --       --           --         --            --   (914,279)     (914,279)
                          ----------- --------- ------------ -------- ------------ ---------- ------------- ---------- -------------

Balance December
  31, 1995                 4,370,370     4,370    4,744,633       --   (2,331,800)        --            --   (915,800)    1,501,403

Issuance of shares for
  reorganization          18,632,612    18,633      (58,033)      --           --         --            --         --       (39,400)

Issuance of shares
  for cash                   572,407       573      571,834       --           --         --            --         --       572,407

Issuance of shares
  for service                 24,307        24       24,283       --           --         --            --         --        24,307

Net loss for the
  nine month ended
  September 30, 1996              --        --           --       --           --         --            --   (922,717)     (922,717)
                          ----------- --------- ------------ -------- ------------ ---------- ------------- ---------- -------------

Balance September
  30, 1996                23,599,696    23,600    5,282,717       --   (2,331,800)        --            -- (1,838,517)    1,136,000

Share issued for cash        722,733       723      365,857       --           --         --            --         --       366,580

Share issued for service     274,299       274       54,586       --           --         --            --         --        54,860

Cancellation of shares      (542,138)     (542)    (674,458)      --      675,000         --            --         --            --

Net loss for the
  year ended
  September 30, 1997              --        --           --       --           --         --            --   (858,915)     (858,915)
                          ----------- --------- ------------ -------- ------------ ---------- ------------- ---------- -------------

Balance September
  30, 1997                24,054,590  $ 24,055  $ 5,028,702  $    --  $(1,656,800) $      --  $        -- $(2,697,432) $    698,525

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

                                                               15



<PAGE>

                                                   SIONIX CORPORATION
                                              (A Development Stage Company)
                                      STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
                                 FROM INCEPTION (OCTOBER 3, 1994) TO SEPTEMBER 30, 2002

                                COMMON STOCK                                                                 DEFICIT       TOTAL
                          ---------------------  ADDITIONAL   STOCK      STOCK       STOCK     UNAMORTIZED ACCUMULATED STOCKHOLDERS'
                           NUMBER OF              PAID-IN     TO BE   SUBSCRIPTION   TO BE     CONSULTING     FROM        EQUITY
                             SHARES     AMOUNT    CAPITAL     ISSUED   RECEIVABLE  CANCELLED      FEES      INCEPTION    (DEFICIT)
                          ----------- --------- ------------ -------- ------------ ---------- ------------- ---------- -------------

Balance September
  30, 1997                24,054,590  $ 24,055  $ 5,028,702  $    --  $(1,656,800) $      --  $         --$ (2,697,432) $   698,525

Share issued for cash      2,810,000     2,810      278,190       --           --         --            --          --      281,000

Share issued for service     895,455       895       88,651       --           --         --            --          --       89,546

Shares issued for
  compensation             2,200,000     2,200      217,800       --           --         --            --          --      220,000

Cancellation of shares    (2,538,170)   (2,538)  (1,534,262)      --    1,656,800         --            --          --      120,000

Net loss for the
  year ended
  September 30, 1998              --        --           --       --           --         --            -- (1,898,376)   (1,898,376)
                          ----------- --------- ------------ -------- ------------ ---------- ------------- ---------- -------------

Balance September
  30, 1998                27,421,875    27,422    4,079,081       --           --         --            -- (4,595,808)     (489,305)

Shares issued
  for compensation         3,847,742     3,847      389,078       --           --         --            --         --       392,925

Share issued
  for service                705,746       706      215,329       --           --         --            --         --       216,035

Share issued for cash      9,383,000     9,383      928,917       --           --         --            --         --       938,300

Net loss for the
  year ended September
  30, 1999-Restated               --        --           --       --           --         --            -- (1,158,755)   (1,158,755)
                          ----------- --------- ------------ -------- ------------ ---------- ------------- ---------- -------------

Balance September
  30, 1999                41,358,363    41,358    5,612,405       --           --         --            -- (5,754,563)     (100,800)

Share issued for cash     10,303,500    10,304    1,020,046       --           --         --            --         --     1,030,350

Shares issued for
  compensation             1,517,615     1,518    1,218,598       --           --         --            --         --     1,220,116

Shares issued for
  service                    986,844       986      253,301       --           --         --            --         --       254,287

Net loss for the
  year ended
  September 30, 2000              --        --           --       --           --         --            --  (2,414,188)  (2,414,188)
                          ----------- --------- ------------ -------- ------------ ---------- ------------- ---------- -------------

Balance September
  30, 2000                54,166,322    54,166    8,104,350       --           --         --            --  (8,168,751)     (10,235)

Shares issued for
  service and
  prepaid expenses         2,517,376     2,517      530,368       --           --         --      (141,318)         --      391,567

Share issued for cash      6,005,000     6,005      594,495       --           --         --            --          --      600,500

100,000 share to be
  issued for cash                 --        --           --   10,000           --         --            --          --       10,000

639,509 Shares to be
  issued for debt
  settlement in 2001              --        --           --  103,295           --         --            --          --      103,295

Net loss for the
  year ended
  September 30, 2001              --        --           --       --           --         --            --  (1,353,429) $(1,353,429)
                          ----------- --------- ------------ -------- ------------ ---------- ------------- ---------- -------------

Balance September
  30, 2001                62,688,698  $ 62,688  $ 9,229,213 $ 113,295 $        --  $      --  $  (141,318) $(9,522,180) $ (258,302)

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

                                                          16



<PAGE>

                                                   SIONIX CORPORATION
                                              (A Development Stage Company)
                                      STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
                                 FROM INCEPTION (OCTOBER 3, 1994) TO SEPTEMBER 30, 2002

                                COMMON STOCK                                                                 DEFICIT       TOTAL
                          ---------------------  ADDITIONAL   STOCK      STOCK       STOCK     UNAMORTIZED ACCUMULATED STOCKHOLDERS'
                           NUMBER OF              PAID-IN     TO BE   SUBSCRIPTION   TO BE     CONSULTING     FROM        EQUITY
                             SHARES     AMOUNT    CAPITAL     ISSUED   RECEIVABLE  CANCELLED      FEES      INCEPTION    (DEFICIT)
                          ----------- --------- ------------ -------- ------------ ---------- ------------- ---------- -------------

Balance September
  30, 2001                 62,688,698    62,688    9,229,213  113,295           --         --     (141,318) (9,522,180)    (258,302)

Shares issued for
  service and
  prepaid expenses          1,111,710  $  1,112  $   361,603  $    --  $        --   $     --    $  54,400 $        --   $  417,115

Shares issued as
  contribution                100,000       100       11,200       --           --         --           --          --       11,300

Shares issued for
  compensation                 18,838        19        2,897       --           --         --           --          --        2,916

Share issued for cash      16,815,357    16,815    1,560,782  (10,000)          --         --           --          --    1,567,597

Shares issued for
  debt settlement           1,339,509     1,340      208,639 (103,295)          --         --           --          --      106,684

Shares to be issued
  for services related
  to equity raising -
  967,742 shares                   --        --     (300,000) 300,000           --         --           --          --           --

Cancellation of shares     (7,533,701)   (7,534)          --       --           --         --           --          --       (7,534)

Net loss for the
  year ended
  September 30, 2002               --        --           --       --           --         --           --  (1,243,309)  (1,243,309)
                          ----------- --------- ------------ -------- ------------ ---------- ------------- ---------- -------------

Balance September
  30, 2002                 74,540,411    74,540   11,074,334  300,000           --         --      (86,918)(10,765,489)     596,467

Shares issued for
  services                  2,467,742     2,468      651,757 (300,000)          --         --           --          --      354,225

Shares issued for
  capital equity line       8,154,317     8,154      891,846       --           --         --           --          --      900,000

Amortization of
  consulting fees                  --        --           --       --           --         --       86,918          --       86,918

Cancellation of shares        (50,000)      (50)          50       --           --         --           --          --           --

7,349,204 shares to
  be cancelled                     --        --        7,349       --           --     (7,349)          --          --           --

Net loss for the year
  ended September 30, 2003         --        --           --       --           --         --           --  (1,721,991)  (1,721,991)
                          ----------- --------- ------------ -------- ------------ ---------- ------------- ----------- ------------
Balance September
  30, 2003                 85,112,470 $  85,112 $ 12,625,336 $     -- $         -- $   (7,349) $        -- $(12,487,480) $  215,619
                          =========== ========= ============ ======== ============ ========== ============= ============ ===========

                       The accompanying notes are an integral part of these financial statements.
</TABLE>

                                       17



<PAGE>
<TABLE>

                                                 SIONIX CORPORATION
                                           (A Development Stage Company)
                                              STATEMENTS OF CASH FLOWS
<CAPTION>

                                                                                                       Cumulative
                                                                                                     FROM INCEPTION
                                                                        YEAR ENDED SEPTEMBER 30,   (OCTOBER 3, 1994) TO
                                                                          2003            2002      SEPTEMBER 30, 2003
                                                                      -------------   -------------   -------------
<S>                                                                   <C>             <C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
 Net loss                                                             $ (1,721,991)   $ (1,243,309)   $(12,487,480)
 Adjustments to reconcile net loss to net cash used in
 operating activities:
    Depreciation and amortization                                          111,707          21,158         486,903
    Issuance of common stock for compensation                                   --           2,916       1,835,957
    Issuance of common stock for services & prepaid consulting fees        354,225         374,015       1,894,460
    Write-down of obsolete assets                                               --              --          38,862
    Impairment of intangible assets                                             --          76,736       1,117,601
    Loss on settlement of debts                                                 --          19,066          36,047
    Other                                                                       --              --          40,370
    Increase in other current assets                                      (303,601)       (177,008)       (510,727)
    Increase in deposits                                                        --              --          (6,831)
    Increase (decrease) in accounts payable                                 (3,331)        (65,002)        145,222
    Increase in accrued interest                                             3,950           3,950          45,336
    Increase (decrease) in accrued expense                                     349        (110,436)            733
                                                                      -------------   -------------   -------------
                  Total adjustments                                        163,299         145,395       5,123,933
                                                                      -------------   -------------   -------------
        Net cash used in operating activities                           (1,558,692)     (1,097,914)     (7,363,547)
                                                                      -------------   -------------   -------------

   CASH FLOWS FROM INVESTING ACTIVITIES
    Decrease (increase) of certificate of deposit                               --          40,000        (100,000)
    Purchase of patents                                                         --              --        (135,033)
    Purchase of equipment                                                 (138,955)        (14,281)       (378,508)
                                                                      -------------   -------------   -------------
        Net cash provided by (used in) investing activities               (138,955)         25,719        (613,541)
                                                                      -------------   -------------   -------------

   CASH FLOWS FROM FINANCING ACTIVITIES:
    Proceeds from issuance of notes to related party                            --              --         345,773
    Proceeds from notes payable under equity line of credit                500,000              --         500,000
    Repayment of notes payable to related party                            (56,645)        (60,000)       (151,842)
    Issuance of common stock for cash                                      900,000       1,567,597       7,376,094
    Receipt of cash for stock to be issued                                      --              --          10,000
                                                                      -------------   -------------   -------------
        Net cash provided by financing activities                        1,343,355       1,507,597       8,080,025
                                                                      -------------   -------------   -------------

   Net increase (decrease) in cash & cash equivalents                     (354,292)        435,402         102,937

   CASH & CASH EQUIVALENTS, BEGINNING                                      457,229          21,827              --
                                                                      -------------   -------------   -------------

   CASH & CASH EQUIVALENTS, ENDING                                    $    102,937    $    457,229    $    102,937
                                                                      =============   =============   =============

  SUPPLEMENTAL DISCLOSURE OF NON-CASH
  INVESTING AND FINANCING ACTIVITIES:
    Stock issued for consulting services & prepaid                    $    354,225    $     66,462    $    884,593
                                                                      =============   =============   =============
    Acquisition of intangible for debt                                $         --    $         --    $  1,185,475
                                                                      =============   =============   =============
    Settlement of debt with equity                                    $         --    $     58,864    $  1,269,247
                                                                      =============   =============   =============
    Shares to be issued in raising equity                             $         --    $    300,000    $    300,000
                                                                      =============   =============   =============

  CASH PAID FOR:
    Interest                                                          $        668    $         --    $      2,802
                                                                      =============   =============   =============
    Income taxes                                                      $        900    $        900    $      8,100
                                                                      =============   =============   =============

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

</TABLE>
                                       18



<PAGE>

1.     ORGANIZATION AND DESCRIPTION OF BUSINESS

         Sionix Corporation (the "Company") was incorporated in Utah in 1985.
The Company was formed to design, develop, and market an automatic water
filtration system primarily for small water districts.

         The Company has completed its reincorporation as a Nevada corporation,
effective July 1, 2003. The reincorporation was completed pursuant to an
Agreement and Plan of Merger between Sionix Corporation, a Utah corporation
("Sionix Utah") and its wholly-owned Nevada subsidiary, Sionix Corporation
("Sionix Nevada"). Under the merger agreement, Sionix Utah merged with and into
Sionix Nevada, and each share of Sionix Utah's common stock was automatically
converted into one share of common stock, par value $0.001 per share, of Sionix
Nevada. The merger was effected by the filing of Articles of Merger, along with
the Agreement and Plan of Merger, with the Secretary of State of Nevada.

         The Company is in the development stage and its efforts have been
principally devoted to research and development, organizational activities, and
raising capital.

2.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     CASH AND CASH EQUIVALENTS

         Cash and cash equivalents represent cash and short-term highly liquid
investments with original maturities of three months or less.

     RESTRICTED CASH

         Restricted cash represents a certificate of deposit which matures 180
days from the purchase date. The certificate of deposit is recorded at cost
which approximates the market. At September 30, 2003, the certificate of deposit
was pledged as collateral under a compensating balance arrangement associated
with a security bond required by court.

     PREPAID EXPENSE

         Prepaid expense includes the advance payments made to various companies
to build the parts and equipment product.

     INVENTORY

         Inventory is stated at the lower of cost or market, cost being
determined using the first-in, first-out (FIFO) method. Inventory amounting
$365,078 at September 30, 2003, comprised of a finished unit available for sale.

     PROPERTY AND EQUIPMENT

         Property and equipment is stated at cost. The cost of additions and
improvements are capitalized while maintenance and repairs are expensed as
incurred. Depreciation of property and equipment is provided on a straight-line
basis over the estimated five year useful lives of the assets.

     INTANGIBLE ASSETS

         The Company had intangible assets comprised of patents. The Company
evaluates intangible assets and other long-lived assets for impairment, at least
on an annual basis and whenever events or changes in circumstances indicate that
the carrying value may not be recoverable from its estimated future cash flows.
Recoverability of intangible assets and other long-lived assets is measured by
comparing their net book value to the related projected undiscounted cash flows
from these assets, considering a number of factors including past operating
results, budgets, economic projections, market trends and product development
cycles. If the net book value of the asset exceeds the related undiscounted cash
flows, the asset is considered impaired, and a second test is performed to
measure the amount of impairment loss. Potential impairment of goodwill after
July 1, 2002 is being evaluated in accordance with SFAS No. 142. The SFAS No.
142 is applicable to the financial statements of the Company beginning July 1,
2002.

         During the year ended September 30, 2002, an impairment loss of $76,736
was recognized which represented the total net book value of the intangible
assets at that time.

                                       19



<PAGE>

     RESEARCH AND DEVELOPMENT

         Research and development costs are expensed as incurred.

     PROVISION FOR INCOME TAXES

         Deferred taxes are provided for on a liability method for temporary
differences between the financial reporting and tax basis of assets and
liabilities that will result in taxable or deductible amounts in the future.
Deferred tax assets and liabilities are adjusted for the effects of changes in
tax laws and rates on the date of enactment. Deferred tax assets are reduced by
a valuation allowance when, in the opinion of management, it is more likely than
not that some portion or all of the deferred tax assets will be realized.

     ADVERTISING

         The cost of advertising is expensed as incurred. Total advertising
costs were $47,943 and $31,813 for the years ended September 30, 2003 and 2002,
respectively.

     STOCK BASED COMPENSATION

         The Company has adopted the disclosure provisions only of SFAS 123 and
continues to account for stock based compensation using the intrinsic value
method prescribed in accordance with the provisions of APB No. 25, Accounting
for Stock Issued to Employees, and related interpretations. Common stock issued
to employees for compensation is accounted for based on the market price of the
underlying stock, generally the average low bid price.

         The Company accounts for stock-based compensation issued to
non-employees and consultants in accordance with the provisions of SFAS 123 and
the Emerging Issues Task Force consensus in Issue No. 96-18 ("EITF 96-18"),
"Accounting for Equity Instruments that are Issued to Other Than Employees for
Acquiring or in Conjunction with Selling, Goods or Services". Common stock
issued to non-employees in exchange for services is accounted for based on the
fair value of the services received.

     BASIC AND DILUTED NET LOSS PER SHARE

         Net loss per share is calculated in accordance with Statement of
Financial Accounting Standards 128, Earnings Per Share ("SFAS 128"). Basic net
loss per share is based upon the weighted average number of common shares
outstanding. Diluted net loss per share is based on the assumption that all
dilutive convertible shares and stock options were converted or exercised.
Dilution is computed by applying the treasury stock method. Under this method,
options and warrants are assumed to be exercised at the beginning of the period
(or at the time of issuance, if later), and as if funds obtained thereby were
used to purchase common stock at the average market price during the period.

         Weighted average number of shares used to compute basic and diluted
loss per share is the same in these financial statements since the effect of
dilutive securities is anti-dilutive.

     FAIR VALUE OF FINANCIAL INSTRUMENTS

         Statement of financial accounting standard No. 107, Disclosures about
fair value of financial instruments, requires that the company disclose
estimated fair values of financial instruments. The carrying amounts reported in
the statements of financial position for current assets and current liabilities
qualifying as financial instruments are a reasonable estimate of fair value.

     USE OF ESTIMATES

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

     RECLASSIFICATIONS

         Certain items in the prior year financial statements have been
reclassified to conform to current period's presentation. These
reclassifications have no effect on the previously reported income (loss).

                                       20



<PAGE>

     REPORTING SEGMENTS

         Statement of financial accounting standards No. 131, Disclosures about
segments of am enterprise and related information (SFAS No. 131), which
superceded statement of financial accounting standards No. 14, Financial
reporting for segments of a business enterprise, establishes standards for the
way that public enterprises report information about operating segments in
annual financial statements and requires reporting of selected information about
operating segments in interim financial statements regarding products and
services, geographic areas and major customers. SFAS No. 131 defines operating
segments as components of an enterprise about which separate financial
information is available that is evaluated regularly by the chief operating
decision maker in deciding how to allocate resources and in assessing
performances. The company adopted this standard in 1998 and the implementation
of this standard did not have a material impact on its financial statements.
During the years ended September 30, 2003 and 2002, the Company only operated in
one segment therefore segment disclosure has not been presented.

     REVENUE RECOGNITION

         The Company's policy to recognize revenues is in accordance with SEC
Staff Accounting Bulletin No. 101, or other specific authoritative literature,
as applicable. Accordingly, revenues from products sales are recorded when all
four of the following criteria are met: (i) persuasive evidence of an
arrangement exists; (ii) delivery has occurred or services have been rendered;
(iii) the Company's price to the buyer is fixed or determinable; and (iv)
collectibility is reasonably assured. The Company's policy is to report its
sales levels on a net revenue basis, with net revenues being computed by
deducting from gross revenues the amount of actual sales returns and the amount
of reserves established for anticipated sales returns.

         The Company's policy for shipping and handling costs, billed to
customers, is to include it in revenue in accordance with Emerging Issues Task
Force ("EITF") issue No. 00-10, "Accounting for Shipping and Handling Revenues
and Costs." The purpose of this issue was to clarify the classification of
shipping and handling revenues and costs. The consensus reached was that all
shipping and handling billed to customers should be recorded as revenue.
Accordingly, the Company records its shipping and handling amounts within net
sales and operating expenses.

         The Company has not earned any revenue since its inception.

     ACCOUNTING DEVELOPMENTS

         In November 2002, the FASB issued FASB Interpretation No. 45,
"Guarantor's Accounting and Disclosure Requirements for Guarantees, Including
Indirect Guarantees of Indebtedness of Others" (FIN 45). FIN 45 requires that
upon issuance of a guarantee, a guarantor must recognize a liability for the
fair value of an obligation assumed under a guarantee. FIN 45 also requires
additional disclosures by a guarantor in its interim and annual financial
statements about the obligations associated with guarantees issued. The
recognition provisions of FIN 45 are effective for any guarantees issued or
modified after December 31, 2002. The disclosure requirements are effective for
financial statements of interim or annual periods ending after December 15,
2002. The adoption of FIN 45 does not have a material impact on the Company's
financial position or results of operations or cash flows.

         In December 2002, the FASB issued SFAS No. 148 "Accounting for Stock
Based Compensation-Transition and Disclosure". SFAS No. 148 amends SFAS No. 123,
"Accounting for Stock Based Compensation", to provide alternative methods of
transition for a voluntary change to the fair value based method of accounting
for stock-based employee compensation. In addition, this Statement amends the
disclosure requirements of Statement 123 to require prominent disclosures in
both annual and interim financial statements about the method of accounting for
stock-based employee compensation and the effect of the method used, on reported
results. The Statement is effective for the Companies' interim reporting period
ending January 31, 2003. The adoption of SFAS No. 148 does not have a material
impact on the Company's financial position or results of operations or cash
flows.

                                       21



<PAGE>

         On April 30 2003, the FASB issued FASB Statement No. 149 (FAS 149),
AMENDMENT OF STATEMENT 133 ON DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES. FAS
149 amends and clarifies the accounting guidance on (1) derivative instruments
(including certain derivative instruments embedded in other contracts) and (2)
hedging activities that fall within the scope of FASB Statement No. 133 (FAS
133), ACCOUNTING FOR DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES. FAS 149 also
amends certain other existing pronouncements, which will result in more
consistent reporting of contracts that are derivatives in their entirety or that
contain embedded derivatives that warrant separate accounting. FAS 149 is
effective (1) for contracts entered into or modified after June 30, 2003, with
certain exceptions, and (2) for hedging relationships designated after June 30,
2003. The guidance is to be applied prospectively. The adoption of SFAS No. 149
does not have a material impact on the Company's financial position or results
of operations or cash flows.

         On May 15, 2003, the Financial Accounting Standards Board (FASB) issued
FASB Statement No. 150 (FAS 150), ACCOUNTING FOR CERTAIN FINANCIAL INSTRUMENTS
WITH CHARACTERISTICS OF BOTH LIABILITIES AND EQUITY. FAS 150 changes the
accounting for certain financial instruments that, under previous guidance,
could be classified as equity or "mezzanine" equity, by now requiring those
instruments to be classified as liabilities (or assets in some circumstances) in
the statement of financial position. Further, FAS 150 requires disclosure
regarding the terms of those instruments and settlement alternatives. FAS 150
affects an entity's classification of the following freestanding instruments: a)
Mandatorily redeemable instruments b) Financial instruments to repurchase an
entity's own equity instruments c) Financial instruments embodying obligations
that the issuer must or could choose to settle by issuing a variable number of
its shares or other equity instruments based solely on (i) a fixed monetary
amount known at inception or (ii) something other than changes in its own equity
instruments d) FAS 150 does not apply to features embedded in a financial
instrument that is not a derivative in its entirety. The guidance in FAS 150 is
generally effective for all financial instruments entered into or modified after
May 31, 2003, and is otherwise effective at the beginning of the first interim
period beginning after June 15, 2003. For private companies, mandatorily
redeemable financial instruments are subject to the provisions of FAS 150 for
the fiscal period beginning after December 15, 2003. The adoption of SFAS No.
150 does not have a material impact on the Company's financial position or
results of operations or cash flows.

3.   PROPERTY AND EQUIPMENT

             Equipment and machinery                $  317,463
             Furniture and fixtures                     22,183
                                                    -----------
                                                       339,646
             Less accumulated depreciation            (197,080)
                                                    -----------
                                                    $  142,566
                                                    ===========

         Depreciation expenses for fiscal year ended September 30, 2003 and 2002
were $24,789 and $12,156, respectively.

4.   NOTES PAYABLE - RELATED PARTIES

         The Company has received advances in the form of unsecured promissory
notes from stockholders in order to pay ongoing operating expenses. These notes
are at interest rates up to 13% and are due on demand. As of September 30, 2003,
notes payable amounted to $40,000. Accrued interest on the notes amounted to
$28,354 at September 30, 2003. Interest expenses on the notes for the year ended
September 30, 2003 and 2002 amounted to $4,618 and $3,950, respectively.

                                       22



<PAGE>

5.   NOTES PAYABLE UNDER EQUITY LINE OF CREDIT

         On September 17, 2002, the Company entered into an agreement with
Cornell Capital Partners, LP (Investor), pursuant to which the Investor will
purchase the Company's Common Stock, par value $.001 per share (the "Common
Stock"), for an aggregate price of up to Seven Million Five Hundred Thousand
Dollars ($7,500,000). The Equity Line of Credit agreement provides that the
investor will advance under promissory notes, at the request of the Company, in
a segregated escrow account and the Company shall deposit shares of the
Company's common stock, which shall be purchased by the investor as set forth in
the Equity Line of Credit agreement per the "Purchase Price". "Purchase Price"
shall be set at one hundred percent (100%) of the Market Price during the
Pricing Period. Market price is defined under the agreement as lowest closing
Bid Price (as reported by Bloomberg L.P.) of the Common Stock during the Pricing
Period. The Pricing Period is defined under the agreement as the five
consecutive trading days after the advance notice date. The request is held in
escrow by a law firm, which releases such requests to the Holder every seven
calendar days commencing on January 6, 2003. If the notes are not fully paid
when due, the outstanding principal owed will be payable in full together with
interest at the rate of 24% per annum or the highest rate permitted by law, if
lower. All amounts due under the notes are 162 calendar days of the date of the
notes.

         The termination date of this agreement is earliest of; (1) the Investor
makes payment of Advances of $7,500,000, (2) any stop order or suspension of the
effectiveness of the Registration Statement for an aggregate of fifty (50)
Trading Days or (3) the Company shall at any time fail materially to comply with
the requirements of the agreement and such failure is not cured within thirty
(30) days after receipt of written notice from the Investor or (4) the date
occurring twenty-four (24) months after the Effective Date.

         To induce the Investor to execute and deliver the Equity Line of Credit
Agreement, the Company has agreed to provide certain registration rights under
the Securities Act of 1933, as amended, and the rules and regulations there
under, or any similar successor statute (collectively, the "1933 Act"), and
applicable state securities laws.

         During the Commitment Period, the Company shall not, without the prior
written consent of the Investor, issue or sell (i) any Common Stock without
consideration or for a consideration per share less than the Bid Price on the
date of issuance or (ii) issue or sell any warrant, option, right, contract,
call, or other security or instrument granting the holder thereof the right to
acquire Common Stock without consideration or for a consideration per share less
than the Bid Price on the date of issuance, provided, however, that the Investor
is given ten (10) days prior written notice and nothing in this section shall
prohibit the issuance of shares of Common Stock pursuant to existing contracts
or commitments, upon exercise of currently outstanding options or convertible
securities, or in connection with any acquisition. On the date hereof, the
Company shall obtain from each officer and director a lock-up agreement, as
defined below, in the form annexed hereto as Schedule 2.6(b) agreeing to only
sell in compliance with the volume limitation of Rule 144. Commitment Period is
defined under the agreement as the period commencing on the earlier to occur of
the effective date or such earlier date as the Company and investor may mutually
agree in writing, and expiring on the earliest to occur of (i) the date on which
the investor shall have made payment of advances pursuant to the agreement in
the aggregate amount of $7,500,000, (ii) the date the agreement is terminated,
or (iii) the date occurring 24 months after the effective date.

         On each Advance Date the Company shall pay to the Investor, directly
from the gross proceeds held in escrow, an amount equal to four percent (4%) of
the amount of each Advance. The Company agrees to pay all reasonable fees and
costs incurred by the Holder in collecting or securing or attempting to collect
or secure the notes. Under the agreement, upon the execution of this Agreement
the Company was to issue to the Investor, shares of the Company's Common Stock
in an amount equal to Two Hundred Ninety Thousand Dollars ($290,000) divided by
the Closing Bid Price on the Closing Date. Upon the execution of the Agreement
the Company was to issue to the Placement Agent shares of the Company's Common
Stock in an amount equal to Ten Thousand Dollars ($10,000) divided by the
Closing Bid Price of the Company's Common Stock on the date hereof. The Company
has disclosed such shares totaling $300,000 in the financial statements for the
year ended September 30, 2002 as shares to be issued and reduction from equity
amount since it was the cost of raising equity. These shares were issued during
the year ended September 30, 2003.

                                       23



<PAGE>

         During the year ended September 30, 2003, the Company received
$1,307,500 proceeds from promissory notes to Cornell Capital Partners, LP, net
of 4% fee of $56,000 and $36,500 for escrow and other fees. The Company has
settled $900,000 by issuing shares of common stock during the year ended
September 30, 2003 (note 7). The notes payable outstanding at September 30, 2003
amounted to $500,000.

6.    INCOME TAXES

         Since the Company has not generated taxable income since inception, no
provision for income taxes has been provided (other than minimum franchise taxes
paid to the States). Differences between income tax benefits computed at the
federal statutory rate and reported income taxes are primarily attributable to
the valuation allowance for net operating losses (NOL) and other permanent
differences.

         At September 30, 2003, the Company has a net operating loss
carryforward for federal tax purposes of $9,146,000, which, if unused to offset
future taxable income, will be expired beginning in 2012 through 2023.

         The Company has deferred tax assets of $3,652,000 at September 30, 2003
relating to its net operating losses. The Company provided a 100% valuation
allowance for these deferred tax assets. The Company recorded no benefit for
income taxes during the periods presented. During the periods ended September
30, 2003 and 2002, the Company's total valuation allowance increased
approximately $192,000 and $72,000, respectively.

7.  STOCKHOLDERS' EQUITY

         COMMON STOCK

         During the year ended September 30, 2003, the Company issued 2,467,742
shares of its common stock for services at prices from $0.14 to $0.40 per share
for total amount of $354,225, of which 967,742 shares were for the services
recorded in the prior year related to the Equity Line of Credit agreement. The
valuation of shares was based upon market value of the shares at the time of the
consummation of the transaction.

         The Company issued 12,500,000 shares to the Investor in pursuant to the
Equity Line of Credit during the year ended September 30, 2003 (note 5).
8,154,317 shares from these shares were issued to settle the notes total of
$900,000, 4,345,683 shares remained in the escrow.

         Per the settlement agreement filed with the Federal court, 50,000
shares of the Company's common stock were cancelled during the year ended
September 30, 2003.

         As of September 30, 2003, the Company has 7,349,204 shares of common
stock to be cancelled. These shares were awarded to certain officers/consultant
of the Company in the prior years and were subject to restrictions and could not
be sold until certain conditions were met. Per the agreements between the
officers/consultants and the Company on September 30, 2003, as the conditions in
the agreements were not met, the share awards were cancelled.

         COMMON STOCK OPTIONS

         In April 2001, the Company granted options to an employee to purchase
308,892 shares at an exercise price of $0.15. The market price of the shares at
the grant date was $0.15 per share. The options vested as follows: 37,434
immediately, May 31, August 31 and November 30, 2001 37,434 each respectively;
Feb 28, May 31, Aug 31 and November 30, 2002, 39,789 each respectively. The
options expire on April 2010. No options were exercised under the plan through
September 30, 2003.

2001 Executive Officers Stock Option Plan

         On October of 2000, the company entered into amendments to the
employment agreement with each of the executive officers eliminating the
provisions of stock bonuses. In lieu of the bonus provision, the Company adopted
the 2001 Executive Officers Stock option Plan. The Company reserved 7,576,680
shares for issuance under the plan.

         In April 2001, the Company granted options to purchase 7,034,140 shares
to three of the officers vesting at various dates through March 31, 2006. The
exercise price of the options is $0.15 per share and the market value at the
date of the grant was $.0.15.

                                       24



<PAGE>

A summary of the Company's option activity is listed below:

                                                      Weighted-     Weighted-
                                        Weighted-     Average        Average
                                         Average      Exercise       Exercise
              Stock        Stock        Remaining     Price of       Price of
Exercise     Options      Options      Contractual     Options        Options
 Price     Outstanding   Exercisable      Life       Outstanding    Exercisable
 -----     -----------   -----------      ----       -----------    -----------
 $ 0.15     7,343,032     3,825,962    2.44 years      $ 0.15         $ 0.15

         The fair value of the warrants was calculated using the Black-Scholes
option valuation model with the following weighted-average assumptions for the
year ended September 30, 2001: dividend yields of 0%; risk free interest rates
of 6%; expected volatility of 100% and expected lives of 4.9 years.

         The Company has adopted the disclosure-only provisions of SFAS No. 123.
Because the exercise price of the options granted was greater than the fair
value of the common stock at the grant date, no compensation cost has been
recognized. Had compensation cost for the Company's stock option plan been
determined based on the fair value at the grant date for awards consistent with
the provisions of SFAS No. 123, the Company's net loss and loss per share for
the year ended September 30, 2003 and 2002 would have been as follows:

                                             2003            2002
                                        -------------    -------------
Net loss as reported                    $ (1,721,991)    $ (1,243,309)
Net loss, pro forma                     $ (1,938,984)    $ (1,498,316)
Basic loss per share as reported        $      (0.02)    $      (0.02)
Basic loss per share, pro forma         $      (0.02)    $      (0.02)

8.    EARNING (LOSS) PER SHARE

         Earnings (loss) per share were determined by dividing net income for
the periods by the weighted average number of both basic and diluted shares of
common stock and common stock equivalents outstanding. Stocks to be issued are
regarded as common stock equivalents and are considered in diluted earnings per
share calculations.

         Weighted average number of shares used to compute basic and diluted
loss per share is the same since the effect of dilutive securities is
antidilutive.

9.   LEASES

     On August 6, 1998, the Company entered into a three-year
noncancelable-operating lease relating to its office facility which expired on
August 30, 2001. On November 16, 2001, the Company extended the lease to October
31, 2004. Rent expense totaled $67,730 and $49,657 during fiscal year 2003 and
2002, respectively. Future minimum rental payments are as follows for the fiscal
year ended September 30:

                         2004                         44,854
                         2005                          3,752
                                                   ---------
                         Total                     $  48,606
                                                   =========

                                       25



<PAGE>

10.  LITIGATION AND COMMITMENT

LITIGATION:

          The lawsuit which was filed by the Company against its former
President, Dascore, LLC, an entity controlled by the former President and in a
business related to that of the Company; and a former officer and director of
the Company (the "Defendants"), was settled. The Company alleged, that the
Defendants had (1) infringed on certain patents owned by the Company, through
knowledge gained in their former positions; (2) sold or attempted to sell
technology owned by the Company and covered by patents; (3) conspired to convert
technology, money and equipment owned by the Company to pay personal expenses,
and (4) defrauded the Company and breached their fiduciary duties in connection
with their departure by retention of property owned by the Company. As a result
of this settlement, the Company recorded a gain of $79,999 in the year ended
September 30, 2002, for the settlement award. The Company also recorded $17,618
as an extraordinary gain on settlement of debts for forgiven amount of note
payable as per the settlement. In addition, all of outstanding stocks held by
the defendants totaling 7,533,701 shares were returned to the Company and
cancelled by the Company. Certain defendants appealed the settlement, but the
judgment of the court was affirmed on January 21, 2003.

         The Company's counsel was served with a motion in the Federal case by
the attorneys of Mr. Wade Cowart. The motion seeks to have the Company pay
damages of up to $100,000 in connection with a restraining order that the
Federal court previously issued against Mr. Cowart. The Company posted the
potential maximum liability of $100,000 as security bond. Mr. Cowart made
motions seeking recovery on the bond posted by the Company for the original
injunction. The motion has been briefed and is awaiting the decision of the
Court.

         A malpractice case brought by the Company against its former counsels,
Wenthur and Chachas was settled in January 2002. The court granted $20,000 to
the defendants. The Company has recorded $50,000; the difference of $70,000
previously recorded expense and the settlement amount, as a gain on settlement
in the financial statement for the year ended September 30, 2002.

         An action filed by the Company for professional negligence,
malpractice, breach of fiduciary duty and breach of contract against Gilliam,
Duncan & Harms, its previous patent counsel was settled in June 2002. The
complaint alleged that the patent attorneys represented the Company and Jack
Moorehead, former President of the Company, contemporaneously and failed to
advise the corporation of the inherent conflict of interest in representing both
parties. The action further alleged the patent attorneys aided Moorehead and
others in misappropriating the Company's intellectual property and trade
secrets. The action went to trial, and in December 2001 a minute order was
issued announcing a judgment in favor of Sionix against the defendants. Harms
filed a voluntary bankruptcy on December 27, 2001. Sionix filed a Complaint in
the U.S. bankruptcy court, alleging claims against Harms and disputing the
dischargeability of the debts owed by Harms to Sionix. Upon settlement
agreement, the Company received $200,000 as a full and final settlement for this
Complaint. The Company has recorded this settlement amount of $200,000 as a gain
on settlement in the financial statement for the year ended September 30, 2002.
In connection with this case, the Company also received $1,500 as a settlement
for dismissal of certain parties from this action.

         The Company was the defendant in a collection action brought by a law
firm that had previously represented it, Murphey & Murphey v. Sionix
Corporation. The law firm sued the Company for the collection of $156,618 in
legal fees. The Company has filed a cross-complaint alleging, among other
things, malpractice and breach of fiduciary duty. On September 25, 2002, the
Company settled the case with payment terms of $165,000 resulting in a
settlement loss of $8,382. The Company paid $145,000 in the fiscal year 2002 and
paid $20,000 in 2003.

         In July 2003, an action was filed by a group of the Company
shareholders located in San Diego, alleging a variety of international and
negligent acts on the part of the Company, its officers and directors. On
September 4, 2003, the Company and its co-defendants filed demurrers and motions
to strike against the complaint. The court granted the Company and
co-defendants' motions. The court granted the shareholder group a period of
forty five days to amend their complaint and re-file same with court.

                                       26



<PAGE>

         In August 2003, an action was filed in Kansas by a group of the Company
shareholders located in several states, alleging a variety of international and
negligent acts on the part of the Company, its officers and directors. Though
originally filed in the state court, the case was moved to the United States
District Court, in and for the District of Kansas. In October 2003, the Company
and its co-defendants filed a motion to dismiss the Kansas case. On October 24,
2003, the Kansas shareholder plaintiffs voluntarily dismissed their action.
Costs were assessed against the plaintiffs by the court.

      DISSOLUTION OF JOINT VENTURE:

         In October 2000, the Company and the Environmental Products Division of
Hoffinger Industries, Inc. ("EPD") entered into a Joint Venture Agreement to
form Sionix/EDP (the "Joint Venture"), a limited liability corporation, to
develop, market, sell and manufacture water filtration technology products. On
December 12, 2002, the joint venture was dissolved.

11. GOING CONCERN

         The accompanying financial statements have been prepared assuming that
the Company will continue as a going concern. This basis of accounting
contemplates the recovery of the Company's assets and the satisfaction of its
liabilities in the normal course of business. Through September 30, 2003, the
Company had incurred cumulative losses of $12,487,480, including current loss of
$1,721,991. The Company's successful transition from a development stage company
to attaining profitable operations is dependent upon obtaining financing
adequate to fulfill its research and development activities, production of its
equipment and achieving a level of revenues adequate to support the Company's
cost structure. Management's plan of operations anticipates that the cash
requirements for the next twelve months will be met by obtaining capital
contributions through the sale of common stock and cash flow from operations.
However, there is no assurance that the Company will be able to implement its
plan. In that regard, on September 17, 2002, the Company entered into an
agreement with an investor, pursuant to which the Investor will purchase the
Company's Common Stock, par value $.001 per share for an aggregate price of up
to Seven Million Five Hundred Thousand Dollars ($7,500,000) (Note 5).

ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
        FINANCIAL DISCLOSURE.

         Not applicable.

ITEM 8A. CONTROLS AND PROCEDURES

         Under the supervision and with the participation of our Chief Executive
Officer and Chief Financial Officer, we conducted an evaluation of our
disclosure controls and procedures, as such term is defined under Rule 13a-14(c)
promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), within 90 days of the filing date of this report. Based on this
evaluation, our Chief Executive Officer and the Chief Financial Officer
concluded that the Company's disclosure controls and procedures are effective.

         Disclosure controls and procedures are designed to ensure that
information required to be disclosed in reports under the Exchange Act are
processed and reported within the time periods specified by law.

                                    PART III

                                       27



<PAGE>

ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE
        WITH SECTION 16(a) OF THE EXCHANGE ACT.

         The Company's directors, executive officers and key employees are as
follows:

  Name                  Age     Positions
  ----                  ---     ---------

James J. Houtz           63      President, Chief Operating Officer and a
                                   Director

Joan Horowitz Houtz      60      Secretary, Treasurer and a Director

Robert E. McCray         67      Chief Financial Officer and a Director

Paul M. Berry            43      Executive Vice President and a Director

Rodney Anderson          75      Director

         Mr. Houtz has been President, Chief Operating Officer and a director of
the Company since March 1998. For more than five years prior to that time he was
a self-employed consultant in the areas of engineering and new product
development.

         Mr. McCray has been Chief Financial Officer and a director of the
Company since July 1998. Prior to that time he was employed by San Clemente
Hospital and Medical Center, as Supervisor-Accounts Payable and Supervisor-Data
Processing

         Mrs. Houtz has been Secretary/Treasurer and a director of the Company
since April 1998. Prior to that time she was employed by Coldwell Banker in
office management. She is the spouse of James J. Houtz.

         Mr. Anderson has been President of R.J. Metal Products, Anaheim,
California, for the past 20 years, and has been engaged in the engineering and
manufacturing of metal products for 50 years. He has served on the Company's
Board of Directors since 2001.He has also served on the board of directors of
three corporations.

         Mr. Berry has been Executive Vice President of the Company since
October 2003 and a director since December 2003. For more than ten years prior
to that time, he was Vice President and General Manager of EPD Wearnes (U.S.A.)
Inc., a manufacturer of water filtration equipment, and its predecessor, the EPD
Division of Hoffinger Industries. While there he directed the daily operations
as well as domestic and international sales, research and development,
manufacturing and customer service. He also supervised development of Asian
manufacturing facilities and products.

         Directors serve for one year and until their successors are duly
elected and qualified. The Company has not established an executive committee of
the Board of Directors or any committee that would serve similar functions such
as an audit, incentive compensation or nominating committee.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

            Section 16(a) of the Securities Exchange Act of 1934, as amended,
and the rules thereunder require the Company's officers and directors, and
persons who own more than 10% of a registered class of the Company's equity
securities, to file reports of ownership and changes in ownership with the
Securities and Exchange Commission and to furnish the Company with copies. Based
solely on its review of the copies of the Section 16(a) forms received by it, or
written representations from certain reporting persons, the Company believes
that, during the last fiscal year, all Section 16(a) filing requirements
applicable to its officers, directors and greater than 10% beneficial owners
were complied with.

ITEM 10. EXECUTIVE COMPENSATION.

                                       28



<PAGE>

         The following table sets forth certain information concerning the
compensation of the four most highly compensated officers of the Company for the
past three fiscal years:
<TABLE>
<CAPTION>

                                                                              LONG-TERM COMPENSATION
                                                                  ---------------------------------------------
                                         ANNUAL COMPENSATION             AWARDS                   PAYOUTS
                                      --------------------------- -----------------------   -------------------
                                                          OTHER                SECURITIES                 ALL
                                                          ANNUAL  RESTRICTED   UNDERLYING                OTHER
     NAME AND                   FISCAL                    COMPEN-  STOCK        OPTIONS/       LTIP    COMPEN-
PRINCIPAL POSITION              YEAR    SALARY    BONUS   SATION   AWARDS         SARs        PAYOUTS    SATION
------------------              ----    ------    -----   ------   ------         ----        -------    ------

<S>                             <C>    <C>          <C>      <C>       <C>    <C>                  <C>       <C>
James J. Houtz, President...    2001   $101,136    -0-      -0-       -0-     6,171,000 shares    -0-       -0-
                                2002   $131,047    -0-      -0-       -0-         -0-             -0-       -0-
                                2003   $133,782    -0-      -0-       -0-         -0-             -0-       -0-

Robert McCray, CFO..........    2001   $ 54,238    -0-      -0-       -0-       583,200 shares    -0-       -0-
                                2002   $ 69,809    -0-      -0-       -0-         -0-             -0-       -0-
                                2003   $ 71,061    -0-      -0-       -0-         -0-             -0-       -0-

Joan Horowitz Houtz, Secretary....    2001   $ 21,275    -0-      -0-       -0-       279,940 shares    -0-       -0-
                                2002   $ 27,411    -0-      -0-       -0-         -0-             -0-       -0-
                                2003   $ 27,936    -0-      -0-       -0-         -0-             -0-       -0-
</TABLE>

         The following table sets forth certain information as of September 30,
2002 with respect to options held by the Named Executive Officers. The Company
has no outstanding stock appreciation rights, either freestanding or in tandem
with options. No options were issued during the past fiscal year.
<TABLE>
<CAPTION>

                     SHARES                 NUMBER OF UNEXERCISED       VALUE OF UNEXERCISED
                  ACQUIRED ON    VALUE           OPTIONS AT           IN-THE-MONEY OPTIONS AT
                    EXERCISE    REALIZED     SEPTEMBER 30, 2003        SEPTEMBER 30, 2003 (1)
      NAME            (#)         ($)     EXERCISABLE/UNEXERCISABLE   EXERCISABLE/UNEXERCISABLE
      ----            ---         ---     -------------------------   -------------------------
<S>                   <C>         <C>       <C>                              <C>
James J. Houtz....    N/A         -0-        3,085,500/3,085,500             -0-/ -0-
Robert McCray.....    N/A         -0-          291,600/291,600               -0-/ -0-
Joan Horowitz Houtz.....    N/A         -0-          139,970/139,970               -0-/ -0-
</TABLE>

(1) Assumes that a share of Common Stock was valued at $.09 per share on
September 30, 2003 (the closing price of the Common Stock on that date as
reported by the OTC Bulletin Board). Values are reflected as zero as the
exercise prices of all options exceeded the market price.

         Mr. Houtz is employed pursuant to an Employment Agreement expiring on
September 30, 2008. The agreement  provides for salary to Mr. Houtz of
$136,893 per year, which amount is increased by 10% each year.

         Mr. McCray is employed pursuant to an Employment Agreement expiring on
September 30, 2005. The agreement  provides for salary to Mr. McCray of
$76,212 per year, which amount is increased by 10% each year.

         Mrs. Houtz is employed pursuant to an Employment Agreement expiring on
September 30, 2006. The agreement  provides for salary to Mrs. Houtz of
$29,266 per year, which amount is increased by 10% each year.

         Mr. Berry is employed pursuant to an Employment Agreement, expiring on
September 30, 2006. The agreement  provides for salary to Mr. Berry of
$102,204 per year, which amount is increased by 10% each year.

                                       29



<PAGE>

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
         RELATED STOCKHOLDER MATTERS.

         The following table sets forth ownership information as of September
30, 2003 with respect to all officers and directors and promoters, and each
shareholder who beneficially owns more than 5% of the outstanding shares:

Name and Address                    No. of Shares             Percentage
----------------                    -------------             ----------

James J. Houtz                       3,085,500 (1)               3.75%
9272 Jeronimo Road, Suite 108
Irvine, CA 92618

Robert E. McCray                       291,600 (1)                 * %
9272 Jeronimo Road, Suite 108
Irvine, CA 92618

Joan Horowitz Houtz                    139,970 (1)                 * %
9272 Jeronimo Road, Suite 108
Irvine, CA 92618

All Directors and Officers             3,517,070 (1)             4.28%
as a Group (3 Persons)

(1) Consists solely of shares issuable upon exercise of currently exercisable
options.

         The Company believes that all persons named in the table have sole
voting and investment power with respect to all shares of common stock
beneficially owned by them. For purposes hereof, a person is considered to be
the beneficial owner of securities that can be acquired by such person within 60
days from the date hereof. upon the exercise of warrants or options or the
conversion of convertible securities. Each beneficial owner's percentage
ownership is determined by assuming that any such warrants, options or
convertible securities that are held by such person (but not those held by any
other person) and which are exercisable within 60 days from the date hereof,
have been exercised.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

         During the fiscal year ended September 30, 2002, the Company paid
$44,262 to RJ Metal Products, an affiliate of Rodney Anderson, a member of the
Board of Directors of the Company, for production manufacturing of the Company's
products.

      On September 30, 2003, James J. Houtz, President and a director of the
Company, assigned 6,917,650 shares of Common Stock of the Company held by him to
the Company for cancellation. The shares had been issued to Mr. Houtz during
1999 and 2000 as stock bonuses, subject to certain restrictions and conditions.
As the conditions have not been met, Mr. Houtz and the Company agreed to the
cancellation of the shares. The cancelled shares have been restored to the
status of authorized but unissued shares.

         On September 30, 2003, Robert E. McCray, Vice President/ Chief
Financial Officer and a director of the Company, assigned 237,160 shares of
Common Stock of the Company held by him to the Company for cancellation. The
shares had been issued to Mr. McCray during 1999 and 2000 as stock bonuses,
subject to certain restrictions and conditions. As the conditions have not been
met, Mr. McCray and the Company agreed to the cancellation of the shares. The
cancelled shares have been restored to the status of authorized but unissued
shares.

         On September 30, 2003, Joan Horowitz Houtz, Secretary and a director of
the Company, assigned 194,394 shares of Common Stock of the Company held by her
to the Company for cancellation. The shares had been issued to Mrs. Houtz during
1999 and 2000 as stock bonuses, subject to certain restrictions and conditions.
As the conditions have not been met, Mrs. Houtz and the Company agreed to the
cancellation of the shares. The cancelled shares have been restored to the
status of authorized but unissued shares. Mrs. Houtz is the spouse of James J.
Houtz, President of the Company.

                                       30



<PAGE>

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

(a) The following exhibits are filed herewith or incorporated by reference:

 No.           Description
 ---           -----------

3.1      Amended and Restated Articles of Incorporation of the Company (1)

3.2      Amended and Restated Bylaws of the Company (1)

10.1     Industrial Lease between the Company and The Irvine Company, dated
         August 6, 1998 (2)

10.2     Employment Agreement, dated September 30, 2003, between the Registrant
         and James J. Houtz

10.3     Employment Agreement, dated September 30, 2003, between the Registrant
         and Robert E. McCray

10.4     Employment Agreement, dated September 30, 2003, between the Registrant
         and Joan Horowitz Houtz

10.5     Letter Agreement, dated September 30, 2003, between the Registrant and
         James J. Houtz

10.6     Letter Agreement, dated September 30, 2003, between the Registrant and
         Robert E. McCray

10.7     Letter Agreement, dated September 30, 2003, between the Registrant and
         Joan C. Horowitz

10.8     Private Label Manufacturing Agreement, dated January 8,2004, between
         Registrant and EPD Wearnes (USA), Inc.

31.1     Certification of Chief Executive Officer Pursuant to Section 302 of the
         Sarbanes-Oxley Act of 2002.

31.2     Certification of Chief Financial Officer Pursuant to Section 302 of the
         Sarbanes-Oxley Act of 2002.

32.1     Certification of Chief Executive Officer and Chief Financial Officer
         Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.


(1) Incorporated by reference from Registrant's Registration Statement on Form
S-8, filed with the Commission on July 26, 1996, and incorporated herein by
reference.

(2) Incorporated by reference from the Company's Annual Report on Form 10-KSB
for the fiscal year ending September 30, 1999, filed on January 14, 2000.

(b) Reports on Form 8-K

        None.

                                       31



<PAGE>

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

The following is a summary of the fees billed to the Company by Kabani &
Company, Inc. for professional services rendered for the fiscal years ended
September 30, 2003 and 2002:

Fee Category               Fiscal 2003 Fees            Fiscal 2002 Fees
-------------              ----------------            -----------------

Audit Fees                     $32,450                     $28,750

Audit-Related Fees                -0-                         -0-

Tax Fees                         3,250                       1,750

All Other Fees                    -0-                         -0-

Total Fees                     $35,700                     $30,500

         AUDIT FEES. Consists of fees billed for professional services rendered
for the audit of the Company's consolidated financial statements and review of
the interim consolidated financial statements included in quarterly reports and
services that are normally provided by Kabani & Company, Inc. in connection with
statutory and regulatory filings or engagements.

         Audit-Related Fees. Consists of fees billed for assurance and related
services that are reasonably related to the performance of the audit or review
of the Company's consolidated financial statements and are not reported under
"Audit Fees." There were no Audit-Related services provided in fiscal 2003 or
2002.

         Tax Fees. Consists of fees billed for professional services for tax
compliance, tax advice and tax planning.

         All Other Fees. Consists of fees for products and services other than
the services reported above. There were no management consulting services
provided in fiscal 2003 or 2002.

         POLICY ON AUDIT COMMITTEE PRE-APPROVAL OF AUDIT AND PERMISSIBLE
NON-AUDIT SERVICES OF INDEPENDENT AUDITORS

         The Company has no audit committee. The Board of Directors' policy is
to pre-approve all audit and permissible non-audit services provided by the
independent auditors. These services may include audit services, audit-related
services, tax services and other services. Pre-approval would generally be
provided for up to one year and any pre-approval would be detailed as to the
particular service or category of services, and would be subject to a specific
budget. The independent auditors and management are required to periodically
report to the Board of Directors regarding the extent of services provided by
the independent auditors in accordance with this pre-approval, and the fees for
the services performed to date. The Board of Directors may also pre-approve
particular services on a case-by-case basis.

                                       32



<PAGE>

                                   SIGNATURES

         In accordance with Section 13 or 15(d) of the Exchange Act, the
Registrant caused this amendment to be signed on its behalf by the undersigned,
thereunto duly authorized.

                                        Sionix Corporation

Date: January 13, 2004                  By: /s/ James J. Houtz
                                            --------------------------------
                                            James J. Houtz, President

         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.

Signature                           Title                        Date
---------                           -----                        ----

(1) Principal Executive Officer

/s/ James J. Houtz           President and a Director      January 13, 2004
------------------------
James J. Houtz

(2) Principal Financial and Accounting Officer

/s/ Robert McCray           Chief Financial Officer        January 13, 2004
------------------------        and a Director
Robert McCray

(3) Directors

/s/ Joan Horowitz Houtz     Secretary and a Director       January 13, 2004
------------------------
Joan Horowitz Houtz

/s/ Rodney Anderson         Director                       January 10, 2004
------------------------
Rodney Anderson

/s/ Paul M. Berry           Executive Vice President       January 13, 2004
------------------------       and a Director
Paul M. Berry

                                       33