UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-K

(Mark One)

|X|   ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
      ACT OF 1934 For the fiscal year ended June 30, 2005

                                       or

|_|   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
      EXCHANGE ACT OF 1934

      For the transition period from __________ to __________

      Commission file number __________

                             AccuPoll Holding Corp.
             (Exact name of registrant as specified in its charter)

                   Nevada                                    11-2751630
                   ------                                    ----------
      (State or other jurisdiction of                      (IRS Employer
       incorporation or organization)                  Identification Number)

                15101 Red Hill Ave., Suite 220, Tustin, CA 92780
               (Address of principal executive offices) (Zip Code)

        Registrant's telephone number including area code: (949) 200-4000

        Securities registered pursuant to Section 12(b) of the Act: None.

          Securities registered pursuant to Section 12(g) of the Act:
                         Common Stock, $0.001 par value

      Indicate by check mark, whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 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 |_| No |X|

      Indicate by check mark, if disclosure of delinquent filers in response to
Item 405 of Regulation S-K is not contained herein, and 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-K or any
amendment to this Form 10-K. |_|

      Indicate by check mark whether the registrant is a shell company (as
defined in Rule 12b-2 of the Exchange Act). Yes [_] No [X]

      Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Act). Yes |X| No |_|

      The aggregate market value of the voting and non-voting common equity held
by non-affiliates computed by reference to the average bid and asked price of
such common equity, as of the last business day of the registrant's most
recently completed second fiscal quarter was $10,902,845 (136,285,560 shares at
$0.08 per share).

      The number of shares outstanding of each of the registrant's classes of
common stock As of September 9, 2005, the registrant had 257,248,320 outstanding
shares of Common Stock.
<PAGE>

                                TABLE OF CONTENTS

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                                                                                                      Page
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                                     PART I
Item 1.     Business....................................................................................2
Item 2.     Properties.................................................................................17
Item 3.     Legal Proceedings..........................................................................18
Item 4.     Submission of Matters to a Vote of Security Holders........................................18

                                   PART II

Item 5.     Market for Registrant's Common Equity, Related Stockholder Matters and Issuer
               Purchases of Equity Securities..........................................................19
Item 6.     Selected Financial Data....................................................................20
Item 7.     Management's Discussion and Analysis of Financial Condition and Results of Operations......21
Item 7A.    Quantitative and Qualitative Disclosures About Market Risk.................................34
Item 8.     Financial Statements.......................................................................34
Item 9.     Changes In and Disagreements with Accountants on Accounting and Financial Disclosure.......35
Item 9A.    Controls and Procedures....................................................................35
Item 9B.    Other Information..........................................................................36

                                    PART III

Item 10.    Directors and Executive Officers of the Registrant.........................................38
Item 11.    Executive Compensation.....................................................................41
Item 12.    Security Ownership of Certain Beneficial Owners and Management and Related
              Stockholder Matters......................................................................44
Item 13.    Certain Relationship and Related Transactions..............................................46
Item 14.    Principal Accountant Fees and Services.....................................................47

                                    PART IV

Item 15.    Exhibits, Financial Statement Schedules....................................................47

SIGNATURES.............................................................................................50
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                                       1
<PAGE>

                                     PART I

ITEM 1.  BUSINESS

      This annual report contains forward-looking statements. These statements
relate to future events or our future financial performance. In some cases, you
can identify forward-looking statements by terminology such as "may," "will,"
"should," "expect," "plan," "anticipate," "believe," "estimate," "predict,"
"potential" or "continue," the negative of such terms, or other comparable
terminology. These statements are only predictions. Actual events or results may
differ materially from those in the forward-looking statements as a result of
various important factors. Although we believe that the expectations reflected
in the forward-looking statements are reasonable, such should not be regarded as
a representation by AccuPoll Holding Corp., or any other person, that such
forward-looking statements will be achieved. The business and operations of
AccuPoll Holding Corp. and its subsidiaries are subject to substantial risks,
which increase the uncertainty inherent in the forward-looking statements
contained in this annual report. Because these forward-looking statements
involve risks and uncertainties, there are important factors that could cause
actual results to differ materially from those expressed or implied by these
forward-looking statements, including our plans, objectives, expectations and
intentions and other factors discussed under "Risk Factors," included in our
Registration Statement on Form S-1, as amended, initially filed with the
Securities and Exchange Commission on January 31, 2005.

Introduction

      AccuPoll Holding Corp. is the publicly traded holding company for two
wholly owned subsidiaries: AccuPoll, Inc. and Z prompt, Inc. AccuPoll, Inc. is
our operating subsidiary that designs, develops, and sells our electronic voting
system. Z prompt, Inc. manages technology support services for mid-range to
fortune 1000 companies. In June 2005, the Company decided to wind-down the
operations of Z prompt. The wind-down is expected to be completed in the first
fiscal quarter of 2006. The activities, assets and liabilities of Z prompt are
presented as discontinued operations throughout this Form 10-K.

AccuPoll, Inc.

      We develop and market computerized voting systems and their associated
products and services for use in federal, state, local and private elections. On
June 17, 2005 we entered into our first agreement for the sale of our voting
system. We are actively in negotiations with multiple parties for further
agreements to provide our voting system products and services. As of September
22, 2005, we have entered into four agreements to provide products and services
relating to our voting system. We have developed a direct recording electronic
voting system that provides a voter-verified paper audit trail that is both
human and machine readable. It is difficult for humans to read and understand
barcodes and other encodings without using some form of scanning and translation
device. Our voting system provides a machine-readable format for easy machine
scanning of the ballot and also a format designed for human readability of the
ballot content without need of mechanical assistance. In 1990, the Federal
Election Commission (FEC) first established standards for designing and testing
voting equipment. These standards were subsequently updated in April 2002 by the
FEC.

      Our system was qualified as meeting the 1990 federal voting system
standards on March 25, 2004. We believe that our voting system is currently the
only electronic voting system qualified under the 1990 standards that produces a
voter-verified paper audit trail that is both human and machine readable. We do
not have knowledge if or when any of our competitors may develop voting systems
with all of these functions. As of August 30, 2005, according to the list of
certified voting systems posted on the National Association of State Election
Directors's web site (www.nased.org), there are only three other vendors (Avante
International, Diebold Election Systems, and Sequoia Voting Systems) with voting
systems that are qualified and produce a voter verified paper audit trail. In
each case, we believe that the voter verified paper audit trail produced is only
human readable. Our voter verified paper audit trail is not only human readable,
but is also machine-readable using the bar code printed on the voter verified
paper audit trail (VVPAT) record.

      Human readability means that the votes recorded on the VVPAT are in a form
that is readable directly by human eyes without any assistance from a machine.
Machine readability means that the votes are recorded on the VVPAT in a form
that is not readable directly by human eyes (e.g., bar code or other encoding)
without the assistance of a scanning device (e.g., bar code scanner). The
AccuPoll voting system provides both a machine-readable format for easy machine
scanning of the ballot, and also a human readable form for human readability of
the ballot content without need of mechanical assistance. As of this date, to
our knowledge, there is no other vendor with this capability. We do not have any
knowledge if other vendors may or may not be developing such capability for
their voting system, or when they will have such a voting system qualified under
the 2002 FEC voting system standards (2002 FEC voting system standards).

      On May 10, 2005, our direct recording electronic (DRE) voting system was
assigned an official NASED System Qualification Number (N-2-13-22-22-001 (2002))
as being qualified under the 2002 FEC voting system standards. We believe that
our direct recording electronic voting system was the first system with a voter
verified paper audit trail to be qualified under the 2002 FEC voting system
standards.

      As of August 30, 2005, the NASED web site now lists DRE voting systems
from the following vendors besides AccuPoll as qualified under the 2002 FEC
Voting System Standards: Diebold Election Systems, Election Systems and
Software, Hart InterCivic, Liberty Election Systems LLC, and Populex. Of these
vendors, only Diebold has a DRE voting system that produces a voter verified
paper audit trail.

      The 2002 FEC voting system standards call for three levels of tests to be
performed on voting systems to ensure that the end product works accurately,
reliably, and appropriately:

      1.    Qualification tests to be performed by independent testing
            authorities (ITAs) designated by the NASED;

      2.    Certification tests to be performed by the State; and

      3.    Acceptance tests to be performed by the jurisdiction acquiring the
            system.

      There are two types of ITAs - a Hardware ITA tests voting equipment
hardware and a Software ITA tests voting equipment software. There are currently
three labs that test voting equipment: Wyle Labs is accredited by NASED as a
Hardware ITA, Ciber Labs is accredited by NASED as a Software ITA, and SysTest
Labs is accredited by NASED as both a Hardware ITA and a Software ITA. A
Hardware ITA performs hardware environmental tests of the in-precinct voting
system hardware components and conducts system functional review testing of the
in-precinct voting system. A Software ITA performs system functional review of
the ballot creation and vote tabulation and reporting components, and performs
end-to-end functional testing of the entire voting system (i.e., ballot
creation, voting using the in-precinct voting system components, and tabulation
and reporting of results using election management system components).


                                       2
<PAGE>

      Once a voting system has passed all qualification tests, a formal report
by each ITA is submitted to the NASED Technical Review Committee for final
review and approval. Following approval by the NASED Technical Review Committee,
NASED will assign an official NASED System Qualification Number to the voting
system that vendors can use to demonstrate that the voting system is qualified
under the federal voting system standards.

      Certification testing is conducted by individual states in order to ensure
that the voting system complies with state election laws. Accordingly, state
certification criteria are not included in the federal voting system standards
since they may vary from state to state. Most states require that a voting
system be qualified under the federal voting system standards before applying
for state certification.

      Key benefits of our voting system include: an intuitive touch screen
interface, an audit capability that includes multiple copies of the electronic
records and a voter-verified paper audit trail that is both human and machine
readable. Additional benefits include the ability to support multiple languages,
to prevent overvotes, to provide under-vote warnings, the use of software based
on open source products (e.g., Linux) and open standards (e.g., XML, Unicode,
Java), and the use of non-proprietary hardware.

      As of August 30, 2005, our direct recording electronic voting system was
certified by the states of Alabama, Arkansas, Kentucky, Louisiana, Mississippi,
Missouri, Ohio, Pennsylvania, South Dakota, Texas, Utah and West Virginia.
Currently, we are in the process of applying for certification in additional
states.

      At this time there are some states that require direct recording
electronic voting systems be qualified under the 2002 FEC voting system
standards. Examples of such states include Illinois, Iowa, Kentucky, Missouri,
Pennsylvania, and North Carolina. As of May 10, 2005, our direct recording
electronic voting system was qualified under the 2002 FEC voting system
standards. Now that we have completed qualification testing under the 2002 FEC
voting system standards we are able to apply for state certification in states
that have such a requirement. There are also several states (Kansas, Tennessee
and Washington) that require us to conduct an election for public office in
another state before we can be certified by the state. The Company has
contracted to conduct elections in certain Texas counties in November 2005 which
should satisfy the above requirement.

      Our objective is to protect citizens' right to vote by insuring access,
accuracy, privacy and integrity in the voting process and in so doing to become
the leading provider of polling place electronic voting solutions that are
reliable, accurate, immediate, confidential, secure, easy-to-use and auditable.
Our website address is www.accupoll.com.

Z Prompt, Inc.

      In June 2005, with support of the Board of Directors, management of the
Company decided to begin winding down the activities of Z prompt, Inc. and to
close this subsidiary during the first fiscal quarter of 2006. Employees and
customers were notified in June 2005 and customer contracts were terminated,
without penalty, through August 31, 2005. Z prompt provides hardware maintenance
and technology support services primarily to mid- range to Fortune 1000
companies and to state and local governments. The Company purchased Z prompt,
Inc. in November 2003 to support its voting system business with technical
support. The decision to close the Z prompt subsidiary was reached after
analysis of Z prompt's contracts and long-term cash flow forecast together with
receipt by AccuPoll, Inc. of federal qualification to the 2002 FEC voting system
standards of its voting system in May 2005. Although Z prompt emerged from
bankruptcy in February 2005, it has not been profitable since its acquisition in
November 2003. Management evaluated the losses attributed to Z prompt and
determined that reaching sustained profitability in the subsidiary at any time
in the near future was unlikely. Further, with receipt of the "2002 standards"
qualification, the Company will now focus on seeking state certifications and
broadly marketing its voting system as well as fund raising to support these
endeavors.

Accupoll Holding Corp.

      AccuPoll Holding Corp. is subject to the informational requirements of the
Securities Exchange Act of 1934, and in accordance therewith file reports, proxy
or information statements and other information with the Securities and Exchange
Commission. Such reports, proxy statements and other information can be
inspected and copied at the public reference facilities maintained by the
Commission at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549.
Copies of such material can be obtained from the Public Reference Section of the
Commission at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C.20549, at
prescribed rates. In addition, the Commission maintains a web site that contains
reports, proxy and information statements and other information regarding
registrants that file electronically with the Commission. The address of the
Commission's web site is http://www.sec.gov.


                                       3
<PAGE>

      We are in the process of building a section of our website at
www.accupoll.com to make available our reports that we file with the Securities
and Exchange Commission. Until this section of our website is operational, we
voluntarily provide paper copies of our filings free of charge upon request.

Corporate History

      We were incorporated in the State of Nevada on January 30, 1985 with the
name "Kiwi Ventures, Ltd." On November 4, 1985, we changed our name to "Western
International Pizza Corporation" and owned and operated 17 Godfather's pizza
franchise restaurants in Arizona until we ceased those operations in
approximately 1990. From 1990 until May 2002, we had no assets and did not
conduct any material operations other than maintaining our good corporate
standing in the State of Nevada. Our plan of operation was to continue to seek
asset and business acquisitions that may benefit our stockholders.

      On May 20, 2002, we entered into a share exchange with AccuPoll, Inc. We
entered into the share exchange to acquire AccuPoll, Inc. because our management
believed the acquisition was an attractive business opportunity for our
shareholders and because since 1990 we had no material operations. The parties
involved in this transaction were AccuPoll, Inc., GCH Capital, and Western
International Pizza Corporation. Pursuant to the share exchange, all of the
outstanding common stock and warrants of AccuPoll, Inc. were exchanged for our
shares. As a result of the exchange, the stockholders of AccuPoll, Inc. acquired
75,500,000 shares of our common stock, which represented approximately 98.7% of
our issued and outstanding common stock immediately after the exchange. In
connection with the share exchange, we paid GCH Capital a consulting fee of
$50,000 for introducing the transaction to us, performing due diligence and
ensuring that regulatory filings were made. We paid GCH Capital an additional
$25,000 upon closing as additional consideration for such services. Following
the share exchange, we changed our name to "AccuPoll Holding Corp." Our voting
system business operates through AccuPoll, Inc.

      AccuPoll, Inc. was formed under the laws of the State of Delaware in
August 2001. Prior to completing the share exchange, AccuPoll, Inc., operated as
a private company focused on the design and development of our electronic voting
system. AccuPoll, Inc. entered into the share exchange in order to provide
liquidity to its shareholders and also to gain access to greater financing
alternatives available to public companies.

      We entered into a consulting agreement with GCH Capital effective April
23, 2002 pursuant to which GCH Capital agreed to assist us in structuring
financing arrangements, developing business relationships and procuring
customers. As consideration under the agreement, we granted GCH Capital warrants
to purchase 2 million shares of common stock at an exercise price of $0.06 per
share, valued at $500,000 (based on the Black-Scholes pricing model) as a
non-refundable pre-paid fee. The pre-paid consulting fees paid in warrants were
initially amortized over the service period of the consulting agreement.
However, as the delay in customers procuring voting system upgrades progressed
it became clear that the intended benefits from GCH Capital's consulting
agreement were not going to materialize. Accordingly, during the year ended June
30, 2003, we determined that we were no longer receiving any benefit from GCH
Capital and we accelerated the expense for the remaining $286,000 in the
consolidated statement of operations for the year ended June 30, 2003. The
consulting agreement expired by its terms on April 22, 2004.

      Pursuant to the share exchange, we issued Southampton Ltd. options to
purchase 1,200,000 shares of our common stock with an exercise price of $0.25.
The options were immediately exercised. From January 2002 to June 30, 2004,
Southampton Ltd. provided us advisory and placement agent services in connection
with the placement of our securities offerings in Europe (See "Certain
Relationships and Related Transactions" under Item 13 of this Form 10-K). The
options issued to Southampton Ltd. were additional consideration for the
advisory and placement agent services.


                                       4
<PAGE>

      On April 9, 2003, we purchased all of the outstanding capital stock of Z
prompt, Inc., a California corporation, from its stockholders in exchange for 8
million shares of our common stock. The primary reason for this purchase was to
acquire a nationwide network of qualified computer hardware technicians who
could assist with the maintenance of our AccuPoll Voting Station product -
specifically its integrated printer. In connection with the purchase of Z
prompt, Inc., we settled an outstanding promissory note of Z prompt, Inc. in the
principal amount of approximately $400,000 that was held by a former stockholder
of Z prompt, Inc. in exchange for 533,000 shares of our common stock. We also
advanced approximately $144,000 to Z prompt, Inc. in connection with the
acquisition. Our agreement for the purchase of Z prompt, Inc., provided that the
transaction could be rescinded by the former Z prompt, Inc. shareholders if our
electronic voting system was not certified by Wyle Labs by September 30, 2003.
We obtained certification from Wyle Labs on October 31, 2003 and, accordingly,
the Z prompt, Inc. acquisition was recorded for accounting purposes in November
2003. Based primarily on then-recent issuances of our common stock in financing
transactions, the estimated fair value of our common stock issued for the shares
of Z prompt, Inc. approximated $1.8 million ($0.213 per common share).

      Z prompt, Inc. was formed under the laws of the State of California on May
18, 2000. Since Z prompt's formation, it has been in the business of managing
technology support services for companies. Z prompt provides installation,
on-site and remote location services, help desk services, training, asset
management, inventory services and professional consulting in support of a
variety of network peripherals.

      In 2004 we formed NTSD Acquisition Corp, a Delaware corporation, to
facilitate the acquisition of NTS Data Services in 2004. Since the acquisition
of NTS Data Services was never consummated NTSD Acquisition Corp. was dissolved
on May 27, 2005.

Industry Background

      Elections, especially those in democratic countries, are held under the
auspices of various government systems. Until the 1960's almost all elections
were conducted with manually counted pre-printed paper ballots and
lever-activated mechanical voting machines, commonly known as lever machines.
Lever machines, which are cumbersome to use and consist of hundreds of moving
parts, require significant maintenance and are expensive to warehouse and
transport. This method of voting and recording of votes, in addition to being
inefficient, was susceptible to inaccuracies, significant time delays, other
mechanical difficulties, and in some instances manipulation. In 1964, the
Votomatic punch card voting system was patented. While this system has not been
actively manufactured since the mid 1980s, it remains the most widely used
system in North America. In the early 1980's, optical scan voting systems were
introduced and began to penetrate the election equipment market place on a
relatively small scale. According to a study conducted by the California
Institute of Technology and Massachusetts Institute of Technology, market
penetration for optical scan voting systems grew to slightly over 25% of the
installed voting machine base nationwide as of July 2001.

      In recent years, the election industry began to computerize in response to
increased public acceptance and familiarity with using computers. The benefit of
computers is that they offer the opportunity to count ballots accurately and
quickly. Additionally, computer technology has created the potential for more
convenient participation, accessibility for disabled voters to vote
independently and the elimination of pre-printed paper ballots. Service and
support have also become increasingly important components of the newer,
technologically advanced voting systems. While the employment of technology is
becoming more generally accepted, we believe that many voting systems currently
being marketed lag in the application of state-of-the-art computer technology.

      To our knowledge, of the voting systems on the market produced and sold by
the four largest voting system vendors (Diebold Election Systems, Sequoia Voting
Systems, Election Systems + Software and Hart InterCivic), only Diebold Election
Systems and Sequoia Voting Systems currently produces a direct recording
electronic voting system with a voter-verified paper audit trail. Of these two
vendors, only Diebold's DRE voting system is qualified under the 2002 FEC voting
system standards. As of August 30, 2005, Sequoia Voting Systems' DRE voting
system is qualified under the out-of-date 1990 FEC voting system standards. Many
of our competitors continue to receive poor reviews from the academic,
information-security and political communities for inadequate security,
deficient software coding standards, inadequate change management practices, and
lack of a voter verified paper audit trail. We believe that some of these
systems continue to operate with non-certified software, and lack flexible
functionality. Examples of poor reviews that products from these four vendors
have received are documented in the following sources:


                                       5
<PAGE>

      o     Electronic Voting System Usability Issues, a joint report by the
            Departments of Computer Science, and Government and Politics,
            University of Maryland, and the Department of Political Science,
            University of Rochester in April 2003

      o     Analysis of an Electronic Voting System published by the John
            Hopkins University Security Institute as Technical Report
            TR-2003-019 in July 2003. This report was reprinted in the IEEE
            Symposium on Security and Privacy 2004 by the IEEE Computer Society
            Press 2004.

      o     DRE Technical Security Assessment Report conducted by Compuware
            Corporation for the Ohio Secretary of State in November 2003.

      o     DRE Security Assessment by InfoSENTRY Services, Inc. for the Ohio
            Secretary of State in November 2003.

      o     RABA Report By RABA Technologies LLC for the Maryland Department of
            Legislative Services in January 2004.

      o     VerifiedVoting.org is a nonpartisan, nonprofit 501(c)(4)
            corporation, which lobbies for reliable and publicly verifiable
            election systems. The web site for VerifiedVoting.org is
            www.verifiedvoting.org.

      o     VotersUnite! is a national non-partisan organization dedicated to
            fair and accurate elections. It focuses on distributing
            well-researched information to elections officials, elected
            officials, the media, and the public; as well as providing activists
            with information they need to work toward transparent elections in
            their communities. The web site for VotersUnite! is
            www.votersunite.org.

      The following table provides examples of issues compiled by VotersUnite!
in regards to the four largest voting system vendors.

<TABLE>
<CAPTION>
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    Vendor              Date                 Location                                Description
----------------------------------------------------------------------------------------------------------------------
<S>              <C>                 <C>                        <C>
Diebold          July 2003                                      Study of Diebold  software by Johns  Hopkins and Rice
                                                                Universities  uncovers poor software coding practices
                                                                and security flaws.
----------------------------------------------------------------------------------------------------------------------
Diebold          March 2004          San Diego County, CA       25% of vote  encoders  failed  resulting in delays in
                                                                voting   throughout   the   county.   It  was   later
                                                                acknowledged  by Diebold that  federal  certification
                                                                of these encoders had not been completed.
----------------------------------------------------------------------------------------------------------------------
Diebold          April 2004          California                 Secretary  of State  calls  on  Attorney  General  to
                                                                bring  criminal  charges  against  Diebold for fraud.
                                                                Diebold   representatives   lied  to  the  California
                                                                Voting  Systems  Procedures  (VSP)  Panel in December
                                                                2003.  At  this  meeting  Diebold  claimed  that  the
                                                                Accuvote  TSx DRE voting was federal  certified  when
                                                                it was not.
----------------------------------------------------------------------------------------------------------------------
Diebold          November 2004       California                 Diebold   settles   lawsuit  for  $2.6  million  with
                                                                Alameda, San Diego and other counties.
----------------------------------------------------------------------------------------------------------------------
ES&S             March 2004          Johnson County, IN         ES&S technicians  installed  uncertified  software on
                                     Marion County, IN          voting  units  that  was  subsequently   used  in  an
                                                                election in violation of state election law.
----------------------------------------------------------------------------------------------------------------------
ES&S             October 2004        Bexar County, TX           Touch   screens   voting   units   registered   votes
                                     Craven County, NC          incorrectly.
----------------------------------------------------------------------------------------------------------------------
ES&S             November 2004       Craven County, NC          Vote totals in 9 of the  county's 26  precincts  were
                                                                electronically   doubled.   Correcting   the  mistake
                                                                changed the outcome of at least one contest.
----------------------------------------------------------------------------------------------------------------------
ES&S             November 2004       LaPorte County, IN         Touch  screen  voting  units  reported  300  votes in
                                                                every precinct eliminating over 50,000 voters.
----------------------------------------------------------------------------------------------------------------------
Hart             March 2004          Orange County, CA          Daisy-chained  voting units  shutdown when one of the
                                                                voting  units broke  resulting  in hundreds of voters
                                                                being turned away at polling place on Election Day.
----------------------------------------------------------------------------------------------------------------------
Hart             September 2004      Honolulu, HI               Voting machines  allowed voters to choose Green Party
                                                                ballot  even   though   there  were  no  Green  Party
                                                                candidates.  This  resulted  in at  least  22  voters
                                                                being disenfranchised.
----------------------------------------------------------------------------------------------------------------------
</TABLE>


                                       6
<PAGE>

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------
    Vendor              Date                 Location                                Description
----------------------------------------------------------------------------------------------------------------------
<S>              <C>                 <C>                        <C>
Hart             October 2004        Tarrant County, TX         Display of ballot on voting machines  confused voters
                                                                resulting  in  many  voters  undervoting  in  a  high
                                                                profile contest.
----------------------------------------------------------------------------------------------------------------------
Sequoia          August 2004         Hillsborough County, FL    Software  problems  result in long delays during vote
                                                                tabulation.
----------------------------------------------------------------------------------------------------------------------
Sequoia          September 2004      Clark County, NV           Software problems  resulted in delayed  tabulation of
                                                                voters in Las Vegas.
----------------------------------------------------------------------------------------------------------------------
Sequoia          September 2004      Snohomish County, WA       Sequoia  used  non-certified  software in election in
                                                                violation of state election law.
----------------------------------------------------------------------------------------------------------------------
Sequoia          October 2004        Palm Beach County, FL      Touch screen  voting units failed during early voting
                                                                resulting in a loss of voter confidence.
----------------------------------------------------------------------------------------------------------------------
</TABLE>

      Direct recording electronic voting systems are computer-based systems
first and voting appliances second. Because every computer system is susceptible
to programming bugs and/or possible tampering, we believe that computerized
voting systems must provide for an independent, voter verified record of each
voter's intent. We believe that in order to provide a system that the voter can
have confidence in, we must provide a voter with a voter-verified paper audit
trail. Our direct recording electronic voting system provides for both a secure
electronic recording of the voting process and an indelible voter-verified
paper-audit trail that satisfies the federal voting system standards for
record-keeping that is maintained independently from the electronic results.

Market Opportunity

      The U.S. presidential election of November 2000 had a significant and
disruptive impact on the nation. According to a report from California Institute
of Technology and Massachusetts Institute of Technology, approximately 1.5
million votes were lost in 2000 because of difficulties in either using voting
equipment or recording the results of those votes. See Report of the Caltech/MIT
Voting Technology Project, "Voting - What Is, What Could Be", issued in July
2001, available at http://www.vote.caltech.edu/reports. The difficulties
experienced with accuracy and verifiability, particularly with punch card
systems, have generated opportunities for manufacturers of electronic voting
systems. Following the 2000 election, the U.S. Congress enacted the Help America
Vote Act of 2002, or HAVA. HAVA was signed into law by President Bush on October
29, 2002. HAVA expanded the federal government's role in elections through
mandates, standards and funding. The U.S. Congress authorized a total of $3.9
billion to help states implement HAVA. In 2003, $650 million was disbursed to
the states under HAVA. Of this $650 million, half of the funds were designated
to replace punch card and lever voting machines and the balance could be used by
the states to comply with HAVA's requirements and implement other improvements
to the administration of elections. An additional $3 billion is authorized to
help states fund HAVA's requirements for updating voting systems, allowing
disabled voters to vote independently, providing provisional ballots, creating
and maintaining statewide voter registration lists, training poll workers, and
educating voters. These funds are distributed to states annually over a
three-year period after individual states certify that they have developed a
plan to use the funds to implement HAVA requirements. States are also obligated
to provide a five percent match. Beginning in May 2004, the newly created
Elections Assistance Commission began receiving state certifications, and as
each state's certification is processed, funds will be disbursed. Beginning on
January 1, 2006, HAVA requires that state voting systems:

      o     Permit the voter to review the votes selected and change or correct
            votes before the ballot is cast;

      o     Notify the voter if he or she casts more than one vote for a single
            office and provide an opportunity to correct the ballot;

      o     Produce a permanent paper record with a manual audit capacity;

      o     Provide disability access, including nonvisual access for the blind
            and visually impaired, in a manner that provides the same
            opportunity for access and participation (including privacy and
            independence) as for other voters;

      o     Provide alternative language accessibility; and

      o     Comply with error rate standards.


                                       7
<PAGE>

      Further, each state is required to adopt uniform and non-discriminatory
standards for what constitutes a vote and how it will be counted.

      According to the National Association of Secretaries of State there are
approximately 200,000 polling places in the United States, covering 7,000
jurisdictions, with 1.4 million polling place workers supervised by 22,000
election officials. These statistics are listed in the election reform
resolution adopted by the National Association of Secretaries of State on
February 6, 2001. According to surveys conducted by the National Association of
Counties the typical polling place in the United States is currently configured
to contain an average of seven voting stations (testimony of R. Doug Lewis for
the U.S. House of Administration, May 10, 2001; Mr. Lewis is the Executive
Director of the Election Center, a nonprofit organization dedicated to
promoting, preserving, and improving democracy). According to the Caltech/MIT
Voting Technology Project, on Election Day in November 2000, approximately 100
million voters in the United States used over 1.4 million voting machines where
approximately 60% of the population is currently using antiquated punch, lever,
or paper ballot technologies. See Report of the Caltech/MIT Voting Technology
project, "Voting - What Is, What Could Be", Issued in July 2001, available at
http://www.vote.caltech.edu/reports. These are the same machine types for which
HAVA mandates replacement by 2006. We are targeting these polling places with
our touch-screen direct recording electronic voting product.

      Nearly two years after the November 2000 Presidential Election, HAVA was
enacted into law on October 29, 2002 just prior to the November 2002 off-year
elections (i.e., highest contest is for Congress). According to the United
States Election Project (USEP), the voter turnout for the November 2002 election
was approximately 80 million voters. USEP is a source of timely information
regarding the United States electoral system. The Department of Public and
International Affairs at George Mason University host USEP (see
http://elections.gmu.edu). Historically, off-year elections have a much lower
voter turnout than in Presidential election years. According to USEP, this trend
continued with the November 2004 Presidential Election when voter turnout was
over 122 million.

      Between the 2000 and 2004 election years, the numbers and types of voting
machines remained consistent across the United States with the exception of the
states of Florida and Georgia where a significant transition to DRE voting
machines was implemented. The DRE voting machines implemented in Georgia in 2002
were from Diebold Election Systems. The DRE voting machines implemented in
Florida in 2001 were from ES&S and Sequoia Voting Systems. At that time, none of
the voting systems from these three vendors included a voter verified paper
audit trail. Sequoia was the first of these three vendors to implement a voter
verified paper audit trail, but they did not qualify such a voting system
capability until October 2004 according to the NASED's Qualified Voting Systems
list.

Our Products

      We have developed a direct recording electronic voting system that
provides a voter-verified paper audit trail that is both human and machine
readable. The AccuPoll developed voting system application software is
proprietary. Our direct recording electronic voting system consists of one or
more voting stations that offer voters an "ATM-like" interface, and that prepare
and print voter verified paper records, also known as "Proof of Vote" or "voter
verified paper audit trail," for machine or hand counting. Each in-precinct
voting station is physically connected by means of a local area network to a
voting administrative workstation. The entire in-precinct system is not
connected to any network outside of the polling place during voting hours. The
user-friendly touch screen interface provides the user easy to follow
instructions. The system is compact, sturdy and has an estimated useful life of
at least five years.

      Once a voter makes his or her choices, a Proof of Vote is printed on paper
by the voting station. The voter can then examine the Proof of Vote for accuracy
before depositing it into a ballot box. If the Proof of Vote does not accurately
reflect the voter's intent, that voter can then notify a polling place official.
The official will then void the electronic ballot and its corresponding Proof of
Vote, and allow the voter to re-vote. Importantly, while the Proof of Vote is
printed, the voter's electronic ballot is stored locally on the voting station
and is also immediately transmitted to the polling place voting administrative
workstation. Thus, when the polling place closes, multiple redundant copies of
the electronic ballots are available in addition to the paper Proofs of Vote. At
no time is the voter's identity associated with either the electronic ballot or
the paper Proof of Vote. Accordingly, each ballot is securely stored in multiple
locations and in forms that can be readily cross-audited against each of the
other ballot representations.


                                       8
<PAGE>

      We have based our voting system software on open source software (Linux,
Perl, Apache) and open standards (JAVA language, Unicode, and XML for the ballot
and behavior specifications). As a result, we have reduced the need to deploy
proprietary technologies that are expensive to acquire and maintain, and which
we believe often lack the flexibility to adapt quickly to meet changing voting
system standards. Our solutions are scalable in the software and hardware
design. Our hardware components are "off the shelf", and replacement parts, such
as printers, are readily available, thereby reducing maintenance costs and unit
downtime.

      We have designed our product with both the voter and election
administrator in mind. To our knowledge, we have created the only voting system
that has been qualified as meeting federal voting system standards and that
offers a voter-verified paper audit trail that is both human and machine
readable, and is readily accessible and easily employable by disabled voters.
Examples of our system's disability accommodating functions include a special
tactile keypad to facilitate ease of navigation for the blind, Braille text on
the keypad, audio ballot support in the voter's selected language, recognition
of non-human touch from users with prosthetic limbs, and wheelchair
accessibility. The touch screen function is user-friendly and was designed to
minimize potential errors. Other notable features include the ability to:

      o     support multiple languages, both on-screen and in audio (all
            languages supported by Java/Unicode);

      o     alter visual schemes to better enable those with modest visual
            impairments, such as color blindness or tunnel vision;

      o     notify electronically the voting administrator of equipment
            malfunction(s);

      o     spoil an erroneous ballot before the voter deposits his or her Proof
            of Vote into the ballot box;

      o     the ability to provide full support for provisional ballots as
            required by HAVA; and

      o     record write-in candidates.

      Elections officials also enjoy benefits from our system as it eliminates
the need for costly pre-printed paper ballots. The election tabulation and
reporting functions greatly enhance the reliability and accuracy of the voting
process. Furthermore, the non-proprietary hardware ensures greater
inter-operability and ease of repairs or upgrades.

      We have entered into a contract for the manufacture of our current product
which is comprised of a printer, touch screen, computer processing unit, smart
card reader, integrated case, power supply and related control software. The
contract requires us to acquire the product exclusively from this manufacturer
unless the manufacturer is unable to produce and deliver on time our required
quantity. We believe that other manufacturers would be available to manufacture
the product should this manufacturer become unavailable. The manufacturer may
change prices upon 60 days prior written notice to us. Unless sooner terminated,
the agreement expires in December 2006. As of September 22, 2004, the
manufacturer and its president own 766,000 shares of our common stock. For a
discussion of risks with respect to this arrangement, please see "Risk Factors -
Risks Relating to Our Business - We rely on a third-party manufacturer."

Product Design, Development and Manufacturing

      Web Tools International, Inc. began the design and development of the
software for the AccuPoll electronic voting system in November 2000. With the
incorporation of AccuPoll, Inc. in August 2001, all rights to the intellectual
property were assigned from Web Tools International, Inc. to AccuPoll, Inc. and
a service agreement between AccuPoll, Inc. and Web Tools International, Inc. was
signed for Web Tools International to continue development of the software. The
services agreement between AccuPoll, Inc. and Web Tools International, Inc.
terminated on March 31, 2004. The Company is solely responsible for any further
development of the voting system software. As of May 2005, we received
qualification under the 2002 FEC voting system standards. We may enhance the
software in the future based on customer feedback and/or to comply with any
changes in legislation. With the exception of any such future enhancements to
the software, we are satisfied that the software is capable of handling all
election types throughout the United States.

      The AccuPoll Voting System qualified under the 2002 FEC voting system
standards included the following components. For further information on the
AccuPoll Voting System, see our website at www.accupoll.com.


                                       9
<PAGE>

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------
                  Component                             Product Number                       Description
----------------------------------------------------------------------------------------------------------------------
<S>                                             <C>                             <C>
Voting Station                                  AVS-1000                        Voting  station  used  by  voters  to
                                                                                cast  ballots.   The  voting  station
                                                                                was  assigned   the   internal   name
                                                                                "Ballot  Buddy"  during the  internal
                                                                                design  process.  The physical voting
                                                                                station  is  manufactured  by  Source
                                                                                Technologies    and    loaded    with
                                                                                AccuPoll proprietary software.
----------------------------------------------------------------------------------------------------------------------
Voting Administrative Workstation               VAW-1000                        Control   unit  used  to  manage  the
                                                                                voting    stations   and   initialize
                                                                                GoVote  Keys  in the  polling  place.
                                                                                An   election    results   CDROM   is
                                                                                generated      by     the      Voting
                                                                                Administrative  Workstation after the
                                                                                polling  place is closed to  transfer
                                                                                the  election  results to the Central
                                                                                Count     Server.      The     Voting
                                                                                Administrative   Workstation   is   a
                                                                                commercial  off-the-shelf  laptop  PC
                                                                                loaded  with   AccuPoll   proprietary
                                                                                software.
----------------------------------------------------------------------------------------------------------------------
GoVote Keys                                     GVK-1000                        Smart   card  given  to  a  voter  to
                                                                                initiate   a  voting   session  on  a
                                                                                voting   station.   The  smart   card
                                                                                allowed  the  voter to cast a one and
                                                                                only  one  ballot.   The  smart  card
                                                                                used   as   the   GoVote   Key  is  a
                                                                                commercial off-the-shelf product.
----------------------------------------------------------------------------------------------------------------------
Central Count Server                            CCS-1000                        Used  to  tabulate  vote  totals  and
                                                                                generate  reports.  The Central Count
                                                                                Server  is  also   used  to   process
                                                                                write-in  candidate  names and manage
                                                                                provisional   ballots.   The  Central
                                                                                Count  Server is a desktop  or server
                                                                                class  computer  loaded with AccuPoll
                                                                                proprietary software.
----------------------------------------------------------------------------------------------------------------------
Central Vote Consolidator                       CVC-1000                        Used  to  verify  the   contents   of
                                                                                election  results  CDROM  before  the
                                                                                election  results are loaded into the
                                                                                Central  Count Server for  tabulation
                                                                                and   reporting.   The  Central  Vote
                                                                                Consolidator    is    a    commercial
                                                                                off-the-shelf  desktop  or  laptop PC
                                                                                loaded  with   AccuPoll   proprietary
                                                                                software.
----------------------------------------------------------------------------------------------------------------------
Ballot Builder                                  BBT-1000                        The  AccuPoll  Ballot  Builder  is  a
                                                                                commercial  off-the-shelf  laptop  PC
                                                                                loaded  with   AccuPoll   proprietary
                                                                                software.  Ballot  Builder is used to
                                                                                construct   the   ballot   definition
                                                                                required to conduct an election.
----------------------------------------------------------------------------------------------------------------------
</TABLE>


                                       10
<PAGE>

      In December 2001, AccuPoll, Inc. and Source Technologies, Inc. signed an
agreement for the design and manufacturing of the hardware platform for the
voting station. In return for absorbing the hardware design and engineering
costs for the voting station, Source Technologies received an exclusive supply
agreement to manufacture the voting station. The initial term of the agreement
is five years, and the agreement automatically renews for successive one-year
terms, unless either party gives the other party written notice of cancellation
at least 90 days prior to expiration of the current term. The rights and
obligations under the agreement may not be assigned or delegated by either
party, except in the event of a merger in which the assigning party is not the
surviving entity, or a transfer or sale of all or substantially all of the
assets or ownership interests in Source Technologies or AccuPoll or business to
another entity that is not a direct competitor of the non-assigning party. There
are no other termination provisions in the agreement. Source Technologies is
capable of adjusting its production output based on demand to over 20,000 units
per month. The lead-time to adjust production output is based on the
availability of components parts, not the ability by Source Technologies to
assemble the physical units. No additional effort is required at this time to
begin mass production. However, as part of an ongoing quality improvement
process, we will continue to explore opportunities to improve the manufacturing
process to better utilize economies of scale and improve the assembly process
once production begins. In the event that Source Technologies cannot manufacture
all the voting stations needed, our agreement with Source Technologies allows
for us to utilize additional manufacturing facilities to meet orders To date,
150 voting stations have been produced for use in voting and testing.

      Our voting system incorporates many hardware/firmware and software
components that are manufactured and provided by third parties. Third party
hardware used in our voting system is commercial off the shelf hardware (e.g.,
laptop PCs, touch screens) and can be sourced from multiple parties. The third
party software that we use in our voting systems is either open source software
for which there are alternate sources, or products from large, well established
software companies (i.e., Microsoft) which we expect to be available for the
foreseeable future.

Business Strengths

      Our key business strengths are described below:

      OUR PRODUCT IS A FEDERALLY QUALIFIED VOTING SYSTEM WITH A VOTER VERIFIED
PAPER AUDIT TRAIL THAT IS BOTH HUMAN AND MACHINE READABLE. On March 25, 2004,
the AccuPoll voting system was qualified as being compliant with the 1990
federal voting system standards as to hardware, and the 2002 FEC voting system
standards as to software. We believe that our technology is currently unmatched
in its capability to simultaneously produce multiple copies of electronic
ballots (recorded on both the polling place voting administrative workstation
and the local voting station), as well as generate an independent,
voter-verified paper audit trail, which is completely auditable and this both
human readable and can be scanned. We believe the ability of our system to
provide a fully auditable paper record of the election is critical, as HAVA
requires that any voting system purchased with federal funds produce a permanent
paper record with a manual audit capacity that will be available as an official
record for any recount. In May 2004 we submitted an updated version of our
direct recording electronic voting system for qualification testing under the
2002 FEC voting system standards. On May 10, 2005, our direct recording
electronic voting system was assigned an official NASED System Qualification
Number as being qualified under the 2002 FEC voting system standards. We believe
that our direct recording electronic voting system was the first system with a
voter verified paper audit trail to be qualified under the 2002 FEC voting
system standards. As of August 30, 2005, we also believe that our voter verified
paper audit trail is the only voter verified paper audit trail that is both
human readable and can be scanned.

      WE ARE WELL POSITIONED TO TAKE ADVANTAGE OF THE CURRENT MARKETPLACE AND
ENVIRONMENT OF ELECTION REFORM. We believe that we have designed a
technologically advanced electronic voting product that meets the current
federal voting system standards and the requirements of HAVA, as well as
addresses current voting systems' technology deficiencies. We believe that we
are first to market in terms of designing a voting system that complies with
both the requirements of HAVA and the federal voting system standards. Achieving
voting system standards compliance can be a lengthy and arduous process,
typically taking twelve or more months, thereby posing a significant barrier for
competitors. In addition to being qualified under the federal standards, we have
spent the past two years marketing our product to our target customer base and
thus we believe we are well positioned to begin generating sales once the states
begin disbursing their federal funds and we have received the appropriate state
certifications. With the recent availability of $2.35 billion to the states, we
believe that a number of significant purchasing decisions will be made prior to
the end of 2005. As of August 31, 2005, $2.26 billion of the $2.35 billion has
been distributed to the states.. The remaining funds are expected to be
distributed once the states complete the necessary requirements. However, the
portion of funds used by a state for acquisition of new voting systems will
depend upon each state's plan and we cannot assure you that states will use this
funding to purchase our product or that states will make purchasing decisions
this year.


                                       11
<PAGE>

      WE HAVE RELATIONSHIPS WITH WELL-KNOWN AND ESTABLISHED PARTNERS. We have
entered into teaming and reseller agreements with various established companies
that offer election-related services. We have entered into a teaming agreement
with Alternative Resources Corporation whereby Alternative Resources Corporation
will provide deployment and support services for our direct recording electronic
voting system. In addition, we have entered into a multi-state reseller
agreement with AmCad, LLC and Unisys Corporation whereby both companies will
assist with the marketing and deployment of our direct recording electronic
voting system.

      OUR EXPERIENCED MANAGEMENT TEAM HAS DEEP KNOWLEDGE OF INFORMATION
TECHNOLOGY. Our senior management collectively has 80 years of experience in the
information technology industry in coding and development marketing. Our
management team has held senior positions at leading information technology
firms, such as MCI Systemhouse and EDS, and has considerable experience in the
process of large-scale systems deployment.

Business Strategy

      We plan to leverage our business strengths in order to grow our
operations. The key elements to our business strategy are described below:

      LEVERAGE THE MARKETING STRENGTH AND INFRASTRUCTURE OF OUR PARTNERS. We
believe that the relationships that we are building with our marketing and
reselling partners will help to position us in critical larger markets. We
believe that we will gain enhanced credibility through associating with these
partners. Additionally, we believe that we have the ability to leverage their
resources and networks and in turn be better positioned to sell and deploy
programs into these larger target markets. Our partners are well known,
established companies that have considerable experience in providing technology
solutions and service support in the election process. We will continue to
maintain, and intend to expand, our strategic alliances with these and other
established partners in the election services business. Currently we have chosen
to develop partnering relationships on a state-by-state basis.

      EXPAND OUR TARGETED, INDEPENDENT MARKETING STRATEGY TO SMALL- AND
MID-SIZED CUSTOMERS. We have begun a direct marketing approach to reach small-
and mid-sized target markets. We initiated this marketing program by identifying
specific regions and developing a presence by attending trade shows and
conferences, which provides us with opportunities to meet, as well as educate,
our customers. We also market our system by means of our website and have
prepared a web-based virtual voting experience to further enhance the awareness
and understanding of our product. We are building awareness of the AccuPoll
product so as to be well positioned in our target markets as HAVA funding is
disbursed to the states. We are working to obtain all appropriate federal and
local certification with that timing in mind. Provided the Company is able to
secure sufficient working capital, we intend to grow our direct sales and
marketing force, engage additional lobbyists in our target states, engage local
sales/marketing agents, and build a robust sales support and delivery
organization that will reinforce our sales and marketing activities.

      MAINTAIN PRODUCT LEADERSHIP. As the developer of the first voting system
with a voter-verified paper audit trail that is both human- and machine-readable
and that is also qualified as compliant with the 2002 FEC voting system
standards, we believe that our product has the potential to become a leader in
the voting system market. We are firmly committed to ongoing research and
development and standardized product testing to insure that our electronic
voting system continues to be a leading platform in the market. We plan to
design and test new generations of our product with the intent of enhancing
functionality in anticipation of additional government requirements and market
demands (e.g., instant runoff voting).

      SELECTIVELY EXPAND INTO RELATED PRODUCT OFFERINGS. When appropriate, we
intend to acquire selectively related businesses that complement our core
product line and expand the range of services that we can offer our customer
base. As we find opportunities that broaden our offerings, we will consider
making additional acquisitions.


                                       12
<PAGE>

      EXPAND ADDRESSABLE MARKETS VIA ENTRY INTO FOREIGN VENUES. The standard
election process is universal by nature, and as part of its core technology, the
AccuPoll direct recording electronic voting system was designed and implemented
as a flexible platform that can be adapted to meet the needs of various
countries. We plan to expand our international sales effort in Europe, Canada,
Asia/Pacific and Latin America.

      As an initial introduction to the European market, we participated in the
European Union Parliamentary elections conducted in the region of Vigevano in
northern Italy in June 2004. This election marked the first time that an
electronic voting system with a voter verified paper audit trail had been used
in Italy. As a demonstration of the flexibility of the AccuPoll voting system,
voters selected from among 24 Italian parties represented by hundreds of
candidates to fill 20 seats in the new European Parliament. Beyond the ability
to produce a paper audit trail the AccuPoll voting system was selected based on
its multilingual capabilities. The Italian Ministry of Innovation will be
conducting separate tests in other European Union elections as a prelude to
electronic voting for Italy in the future. With over 500 million citizens and
more member states to be added in the future, the market potential in the
European Union for electronic voting systems has the potential to be greater
than that of the United States. The European market is not ready yet to adopt
electronic voting systems. Much like in the United States where the Help
American Vote Act required nearly two years to be enacted, a similar legislative
and education process will need to occur in the European Parliament. The
European Union will be watching closely how the United States market manages
implementation of the Help America Vote Act and the transition to electronic
voting systems.

      Our focus during 2005 and 2006 is the United States voting system market.
Before we begin to enter markets outside the United States, we will need to
assess the election laws and regulatory environment of any new market to
determine what, if any, changes are required to our voting system. As an
example, one possible change is the need to translate all voting system messages
and documentation to a new language for use in a specific country. While our
voting system is capable of supporting any written language, the change will
require a one time effort to perform the necessary language translation. The
costs of making any required changes to our voting system for use in any given
market is not know at this time. These costs will be determined as part of our
preparation and analysis before entering a new market.

      EXPAND ADDRESSABLE MARKETS BY CONDUCTING ELECTIONS FOR PRIVATE
ORGANIZATIONS. The standard election process is universal by nature, and as part
of its core technology, the AccuPoll direct recording electronic voting system
was designed and implemented as a flexible platform that can be used to conduct
elections for private organizations. There are thousands of private
organizations in the United States that conduct elections (e.g., unions,
political organizations, universities, sporting organizations) on a regular
basis. To date we have successfully conducted elections for the National
Federation of Republican Women, Local 148 of the United Auto Workers union, and
the Democratic Committee of Allegheny County, Pennsylvania.

Regulatory Matters and Government Contracts

      The following federal laws and regulations govern voting systems in the
United States: (1) Section 301 of the Help America Vote Act of 2002 ("HAVA"),
(2) the 2002 FEC Voting System Standards, and (3) the Voting Rights Act of 1965.

      Section 301(a)(1) of HAVA generally requires that voting systems: (1)
permit voters to verify (in a private and independent manner) the votes selected
by the voters on their ballot before the ballot is cast and counted; (2) provide
voters with the opportunity (in a private and independent manner) to change
their ballot or correct any error before the ballot is cast and counted; and (3)
if a voter selects more than one candidate for a single office, (a) notify the
voter that he or she has selected more than one candidate for a single office on
the ballot, (b) notify the voter before the ballot is cast of the effect of
casting multiple votes for the office, and (c) provide the voter with the
opportunity to correct the ballot before the ballot is cast and counted. Section
1(a)302of HAVA also requires that: (1) voting systems produce a permanent paper
record capable of being manually audited; (2) voting systems be accessible for
persons with disabilities in a manner that provides the same opportunity for
access and participation as for other voters; (3) voting systems provide
alternative language accessibility pursuant to the Voting Rights Act of 1965;
(4) voting systems comply with error rate standards established by the voting
system standards issued by the Federal Election Commission (i.e., the 2002 FEC
Voting System Standards); and (5) each state adopt uniform and nondiscriminatory
standards that define what constitutes a vote and what will be counted as a vote
for each category of voting system used in the state. It is important to note
that a voting system in HAVA is defined in Section 301(a)(6)(b) of HAVA and the
2002 FEC Voting System Standards, to mean the total combination of hardware,
software and documentation required to conduct an election from ballot
definition through election reporting including the maintenance and production
of any audit trail information. For a voting system to have proven that it meets
the error rate standard required by HAVA, the voting system must have been
qualified under the 2002 FEC Voting System Standards. Each state and
jurisdiction is required to comply with Section 301 of HAVA on and after January
1, 2006.


                                       13
<PAGE>

      The Election Assistance Commission ("EAC") is an independent bipartisan
agency charged with disbursing payments to states for replacement of voting
systems and election administration improvements, adopting voluntary voting
system guidelines, and serving as a national clearinghouse and resource of
information regarding election administration. Section 222(e) of HAVA provides
that the 2002 FEC Voting System Standards adopted by the Federal Election
Commission are deemed to be adopted by the EAC as the first set of voluntary
voting system guidelines adopted under HAVA. The primary goal of the 2002 FEC
Voting System Standards is to provide a mechanism for state and local election
officials to assure the public of the integrity of computer-based election
systems. This goal has remained unchanged since 1990. However, the methods for
achieving this goal have broadened over the last decade. The 2002 FEC Voting
System Standards provide a common set of requirements across all voting
technologies, using technology-specific requirements only where essential to
address the specified technology's impact on voting accuracy, integrity, and
reliability. The original 1990 FEC Voting System Standards classified systems as
either Punchcard and Marksense or Direct Recording Electronic ("DRE") and
defined separate standards for each technology. The 2002 FEC Voting System
Standards revises this terminology to specify standards for two separate
categories: paper-based voting systems and DRE voting systems. The major
differences between the 1990 and 2002 FEC Voting System Standards are: (1)
addition of documentation requirements to address voting system processes; (2)
upgraded hardware testing; (3) higher accuracy testing standards; (4) new and
more stringent software development standards; and (5) additional accessibility
requirements for disabled voters. Our voting system has been qualified as
compliant with both the 1990 FEC Voting System Standards and the 2002 FEC Voting
System Standards.

      HAVA establishes a Technical Guidelines Development Committee, chaired by
the Director of the National Institute of Standards and Technology, to assist
the EAC in the development of new or updated voluntary voting systems
guidelines. voting system On June 27, 2005, the EAC released a Because not even
a draft of the Voluntary Voting System Guidelines (VVSG, or the Guidelines") for
public comment. The proposed Guidelines update and augment the 2002 FEC Voting
System Standards, as required by HAVA, to address advancements in information
and computer technologies. EAC proposes that the Guidelines become effective
twenty-four months after final adoption, which is anticipated to take place in
October 2005. The Guidelines provide a set of specifications and requirements
against which voting systems can be tested to determine if they provide all the
basic functionality, accessibility and security capabilities required of voting
systems. The Guidelines are voluntary. States many adopt them entirely, in part
or not at all. Currently, at least thirty-six states require voting system
vendors to certify systems at the national level. EAC will accept public
comments on the draft VVSG for 90 days. a final version of the new Guidelines
has not yet been adopted standards , we cannot assure you that our voting system
can be certified under any new voting system guidelines approved by the EAC.

      The Voting Rights Act of 1965 guarantees minority language voters the
right to vote in an alternate language if the number of citizens who speak an
alternative language as their first language in a specific county exceeds a
defined threshold based on census results. Both accessibility standards and
alternate language support standards for voting systems are specified in the
2002 FEC Voting System Standards. Our DRE voting system has been qualified under
the 2002 FEC voting system standards as meeting these requirements. We believe
that our DRE voting system is also compliant with the requirements specified in
Section 301 of HAVA.

      We expect that our voting systems will be sold primarily to counties in
the United States and other United States governmental jurisdictions. Because we
expect our voting system to be sold under government contracts, any such
contracts that we enter into may be subject to renegotiation or profits, or
termination of contracts or subcontracts at the election of the government. In
the United States, our ability to sell our voting system products depends on the
qualification of each product through independent testing for compliance with
the federal voting system standards. In March 2004, our voting system was
qualified under the 1990 FEC Voting System Standards. In May 2004 we submitted
an updated version of our DRE voting system for qualification testing under the
2002 FEC Voting System Standards. On April 7, 2005, we announced that we had
completed all qualification testing under the 2002 FEC Voting System Standards.
On May 10, 2005, our DRE voting system was assigned an official NASED System
Qualification Number as being qualified under the 2002 FEC Voting System
Standards. In addition, most states require state-level certification before we
may sell our products to local jurisdictions in those states. Moreover, local
jurisdictions may require vendor qualification and acceptance level testing.
Because we plan to sell our products to government agencies, we will be subject
to laws, regulations and other procedures that govern procurement and contract
implementation by those agencies.


                                       14
<PAGE>

      As of August 31, 2005, twenty-six states (Alaska, Arkansas, California,
Colorado, Connecticut, Hawaii, Idaho, Illinois, Maine, Michigan, Minnesota,
Missouri, Montana, New Hampshire, New Jersey, Mexico, New York, Nevada, North
Carolina, Ohio, Oregon, South Dakota, Utah, Vermont, Washington and West
Virginia) have passed legislation requiring a voter verified paper ballot.
Another thirteen states (Arizona, Florida, Georgia, Indiana, Iowa, Kansas,
Maryland, Massachusetts, South Carolina, Tennessee, Texas, Virginia and
Wisconsin) are actively considering legislation that would make it a
requirement. In addition, federal legislation has been introduced in the U.S.
House and U.S. Senate to amend HAVA to expressly require a voter verified paper
audit trail.

      As of August 30, 2005, our direct recording electronic voting system was
certified by the states of Alabama, Arkansas, Kentucky, Louisiana, Mississippi,
Missouri, Ohio, Pennsylvania, South Dakota, Texas, Utah and West Virginia.
Currently, we are in the process of applying for certification in additional
states.

      We eventually intend to pursue opportunities in foreign markets for our
electronic voting system. By that time, we expect to have established
credibility in the elections industry worldwide through selling and deploying
our electronic voting system in the United States. Before we begin to enter
markets outside the United States, we will need to assess the election laws and
regulatory environment of any new market to determine what, if any, changes are
required to our voting system.

      Obtaining the necessary qualifications and certifications and complying
with government procurement requirements can be time consuming, involve
unexpected delays and may be costly. We are subject to a number of significant
risks and uncertainties associated with government regulation and procurement
that could materially and adversely affect our business.

Environmental Protection

      Our compliance with federal, state and local laws or regulations, that
govern the discharge of materials into the environment has not had a material
adverse effect upon our capital expenditures, earnings or competitive position
within our markets.

Competition

      The market for the manufacture and supply of computerized voting machines
is highly competitive. We anticipate that competition will intensify in the
future. As of September 22, 2005, we believe that our competitors, in
alphabetical order, included:

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------
                       Company Name                                         Product Name
---------------------------------------------------------------------------------------------------------
<S>                                                          <C>
Advanced Voting Solutions, a private company based in        WINvote
Frisco, Texas
---------------------------------------------------------------------------------------------------------
Avante International Technology, Inc., a private company     VOTE-TRAKKER
based in Princeton, NJ
---------------------------------------------------------------------------------------------------------
Diebold Elections Systems, Inc., a subsidiary of Diebold,    AccuVote-TS & AccuVote-TSx
Inc., based in McKinney, TX
---------------------------------------------------------------------------------------------------------
Election Systems & Software, a private company based in      Votronic, iVotronic & AutoMARK
Omaha, NE
---------------------------------------------------------------------------------------------------------
Guardian Voting Systems, a subsidiary of Danaher Controls,   ELECTronic 1242
based in Gurnee, IL
---------------------------------------------------------------------------------------------------------
Hart InterCivic, a private company based in Austin, TX       eSlate
---------------------------------------------------------------------------------------------------------
MicroVote General Corporation, a private company based in    MV-464 & Infinity
Indianapolis, IN
---------------------------------------------------------------------------------------------------------
Sequoia Voting Systems, a subsidiary of De La Rue, plc,      Edge & Advantage
based in Oakland, CA
---------------------------------------------------------------------------------------------------------
Unilect Corporation, a private company based in Dublin, CA   Patriot
---------------------------------------------------------------------------------------------------------
</TABLE>


                                       15
<PAGE>

      Based on a survey conducted by Election Data Services in 2004, the vendors
with the largest install base of electronic voting systems are listed in the
table below. (Overview of Voting Equipment Usage in the United, Direct Recording
Electronic Voting; Statement by Kimball W. Brace, President of Election Data
Services, Inc. to the Election Assistance Commission on May 5, 2004; Election
Data Services Inc. is a political consulting firm specializing in redistricting,
election administration, and the analysis and presentation of census and
political data with GIS (geographic information systems)).

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------
                                                 # of Counties  % of Counties With DRE    %  of  All
Company Name                                                         Voting Systems       Counties
------------------------------------------------------------------------------------------------------
<S>                                                    <C>                <C>                <C>
Avante International Technology, Inc.                  0                  0.0%               0.0%
------------------------------------------------------------------------------------------------------
Diebold Election Systems                              194                28.8%               6.2%
------------------------------------------------------------------------------------------------------
Election Systems & Software                           43                  6.4%               1.4%
------------------------------------------------------------------------------------------------------
Guardian Voting Systems                               142                21.1%               4.6%
------------------------------------------------------------------------------------------------------
Hart InterCivic                                        5                  0.7%               0.2%
------------------------------------------------------------------------------------------------------
MicroVote General Corporation                         107                15.9%               3.4%
------------------------------------------------------------------------------------------------------
Sequoia Voting Systems                                72                 10.7%               2.3%
------------------------------------------------------------------------------------------------------
Unilect Corporation                                    5                  0.7%               0.2%
------------------------------------------------------------------------------------------------------
Other                                                 107                15.9%               3.4%
------------------------------------------------------------------------------------------------------
</TABLE>

      It should be noted that Hart InterCivic was successful in winning
contracts in several large counties (Harris County, TX and Orange County, CA)
over the past two years and has overtaken MicroVote General Corporation as one
of the four most popular vendors. The install base for MicroVote General
Corporation, Guardian Voting Systems and Unilect Corporation has been stable for
the past several years as they have been overtaken by more modern voting systems
manufactured by Diebold Election Systems, Election Systems & Software and
Sequoia Voting Systems. Avante International Technology, Inc. has not sold any
voting systems to date.

      We believe that the following are the primary competitive factors in our
market:

      o     accessibility;

      o     auditability;

      o     brand recognition and market penetration;

      o     customer support and service;

      o     ease of use;

      o     government qualification and certification of products;

      o     price;

      o     reliability of services; and

      o     security.

      We believe that we compete favorably with respect to these factors.
However, many of our competitors have significantly greater market penetration,
brand-name recognition, engineering and marketing capabilities and financial,
technological and personnel resources than we do. As a result, they may be able
to develop and expand their customer base more quickly, adapt more swiftly to
new or emerging technologies and changes in customers' requirements, take
advantage of acquisitions and other business opportunities more readily, and
devote greater resources to the marketing and sale of services than we can. Our
competitors' products may offer different features than our products that might
make their products more attractive to some voting administrators. To the extent
that we do not compete successfully with respect to any of the primary
competitive factors in our market, our business may be materially harmed. On
June 17, 2005 we entered into our first agreement for the sale of our voting
system and we are actively in negotiations with multiple parties for further
agreements to provide our voting system products and services. Because we have
just recently begun to sell and/or lease our voting system and related services,
based on the above competitive factors and our technology, our present relative
position in the market for computerized voting machines is nominal.


                                       16
<PAGE>

Research and Development

      We expect that the pace of technological advances in the computer voting
machine industry will rapidly increase. Our ability to compete successfully is
heavily dependent upon our ability to ensure a continuing and timely flow of
competitive products and technology to the marketplace. Our internal product
development efforts are focused on designing and developing computerized voting
machines that adhere to industry standards and incorporate the technologies and
features that we believe are most desired by our customers.

      During each of the last three fiscal years we have invested the following
amounts of capital in company-sponsored research and development.

         ------------------------------------------------
                  Year                    Amount
         ------------------------------------------------
                  2003                  $1,643,926
         ------------------------------------------------
                  2004                   $ 765,511
         ------------------------------------------------
                  2005                  $1,185,689
         ------------------------------------------------

      No customer-sponsored research activities were conducted during the last
three fiscal years.

      We believe that continued strategic investment in product development is
essential for us to become competitive in the markets we serve. Without
significant additional financing, we will be unable to continue development of
our products.

Intellectual Property

      We rely upon trade secrets, technical know-how and continuing
technological innovation to develop and maintain our competitive position. The
products that we design require a large amount of engineering design and
manufacturing expertise. The majority of these technological capabilities,
however, are not protected by patents or licenses. We rely on the expertise of
our employees and our learned experiences in both design and manufacture of
these products. We have taken steps to protect both our intellectual property
and brand name in the marketplace. We have applied to the United States Patent
and Trademark Office (USPTO) for a systems and method patent with respect to our
electronic voting system that produces an official voter verifiable paper
ballot.

      We have also filed trademark applications with the USPTO to protect the
Accupoll brand name and logo. A Statement of Use for the AccuPoll trademark was
filed with the USPTO on June 14, 2005. On August 23, 2005, we were notified that
the Statement of Use for the AccuPoll logo had been accepted by the USPTO. We
expect to receive the official Certificate of Registration from the USPTO in the
near future.

Employees

      As of September 9, 2005, we had thirteen and six, respectively, full-time
employees and consultants. Our employees are not represented by a collective
bargaining organization. We believe our relationship with our employees is good.

ITEM 2. PROPERTIES

      We occupy approximately 10,000 square feet of office space located at
15101 Red Hill Ave. Suite # 220, Tustin, California. The monthly cost of the
lease is $1.10 per square foot. Our lease expires on June 30, 2006. We also
lease 2,614 square feet of office space in Amarillo, Texas, at Bank One Center,
18th floor, Suite 1804. The Amarillo lease expires on December 31, 2007. Rent
under the Amarillo lease is currently $2,355 per month, and is schedule to
increase to $2,465 per month and $2,575 per month during 2006 and 2007,
respectively.


                                       17
<PAGE>

ITEM 3. LEGAL PROCEEDINGS

      Together with our subsidiary, Z prompt, Inc., on January 31, 2005, we
filed an action for declaratory relief against Frank Ehret in Orange County
Superior Court, case # 05CC02714. Under the terms and conditions of the purchase
of Z prompt, Inc., Frank Ehret received 6,365,000 restricted shares of common
stock. Mr. Ehret alleges that we somehow prevented him from selling his shares.
We denied the allegations and are seeking a judicial determination on the
matter. On February 3, 2005, after receipt of the complaint, Mr. Ehret filed an
action in San Francisco Superior Court, case# CGC-05-438410, for breach of
contract, breach of the covenant of good faith and fair dealing, conversion and
failure to make payment due on a promissory note. The factual basis of the
complaint filed by Mr. Ehret is identical to the declaratory relief action that
we filed. We filed a motion to have the Ehret case transferred to Orange County
Court and Mr. Ehret stipulated to have his case moved to Orange County. No
discovery has taken place.

      In December 2004, we received notice that the Securities and Exchange
Commission was conducting a confidential investigation. The Securities and
Exchange Commission issued subpoenas to AccuPoll Holding Corp. and certain of
our officers, directors and affiliates. We responded to such subpoenas and have
not received any further correspondence or any communication from the Securities
and Exchange Commission regarding the investigation.

      In July 2004, Amarillo Economic Development Corporation ("AEDC") commenced
a lawsuit in the 108th District Court in Potter County, Texas against us, Frank
Wiebe and Dennis Vadura. In December 2002, we entered into a location incentive
agreement with AEDC, pursuant to which AEDC extended us a grant in the amount of
$250,000. The complaint alleges that we breached the terms of the location
incentive agreement with AEDC by failing to commence operations in Amarillo,
Texas within three months of the date of the agreement. The complaint seeks
repayment of the $250,000 grant plus interest and costs. On July 7, 2005, a
settlement agreement was reached with the AEDC. The settlement agreement called
for a payment of $255,000 to AEDC, which included the repayment of the $250,000
incentive grant plus $5,000 in attorney fees. As of August 31, 2005, all payment
due under the settlement agreement has been made.

      On March 23, 2004, our wholly-owned subsidiary, Z prompt, Inc., filed a
petition for relief under Chapter 11 of the United States Bankruptcy Code in the
United States Bankruptcy Court, Central District of California. The bankruptcy
proceeding was dismissed on February 1, 2005 upon motion of the U.S. Trustee in
the case.

      In October 2003, a former employee of Z prompt, Nathalie Luu, filed suit
against Z prompt and us in Superior Court of California, County of Orange,
California. The complaint alleged wrongful termination, intentional infliction
of emotional distress and retaliatory discharge, based on claims that the
plaintiff was terminated for reporting to management alleged fraudulent
accounting practices by Z prompt management. The former employee sought $112,000
in monetary damages including loss of wages, plus punitive damages. In February
2005 this lawsuit was settled for a sum of $50,000, requiring $10,000 payments
on the first of each month from August 2005 through and including December 2005.
We have made payments in accordance with this payment schedule as they become
due.

      In October 2003, Paul Musco, the ex-President of our wholly owned
subsidiary, Z prompt, Inc. filed suit against us and Z prompt in Superior Court
of California, County of Orange, California. The claim alleged breach of
contract, fraud and misrepresentation stemming from our acquisition of, and his
termination of his employment with, Z prompt. Mr. Musco sought damages in excess
of $800,000, plus punitive damages. We believed that Mr. Musco breached his
agreements with Z prompt and filed a cross complaint for breach of contract,
fraud, negligence and breach of fiduciary duty seeking $2,000,000. Mr. Musco has
filed his own cross-complaint against us, Dennis Vadura, Frank Wiebe and Craig
Hewitt alleging fraud and tortious interference with contract. Paul Musco
modified his complaint to include additional damages for alleged losses
resulting from his inability to sell his shares of AccuPoll Holding Corp. In
addition, Michael Shocket, a former employee, joined the suit and filed a cross
complaint against us, Z prompt, Dennis Vadura, Frank Wiebe and Craig Hewitt
alleging fraud, tortuous interference with contract and wrongful termination.
Michael Shocket was terminated from employment with us in April 2004 for cause.
On or about January 25, 2005, we settled this dispute in consideration for our
agreement to: (i) make total payments of $625,000 cash to Mr. Musco and Mr.
Shocket; and (ii) issue 1.5 million shares of restricted common stock to Mr.
Musco and Mr. Shocket. The settlement has been fully paid and the required
shares were issued in January 2005 at a fair market value of $0.10 per share.

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

      There was no matter submitted to a vote of security holders during the
fourth quarter of the fiscal year covered by this report.

                                       18
<PAGE>

                                     PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND
ISSUER PURCHASES OF EQUITY SECURITIES

Market Information

      Our common stock is currently quoted on the OTC Bulletin Board under the
symbol ACUP. For the periods indicated, the following table sets forth the high
and low bid prices per share of our common stock. The below prices represent
inter-dealer quotations without retail markup, markdown, or commission and may
not necessarily represent actual transactions.

                                                     Fiscal 2005
                                                  ------------------
                                                   High         Low
                                                  -----        -----
First Quarter Ended September 30, 2004            $1.44        $0.20
Second Quarter Ended December 31, 2004            $0.28        $0.06
Third Quarter Ended March 31, 2005                $0.30        $0.01
Fourth Quarter Ended June 30, 2005                $0.22        $0.09

                                                     Fiscal 2004
                                                  ------------------
                                                  High          Low
                                                  -----        -----
First Quarter Ended September 30, 2003            $2.00        $1.07
Second Quarter Ended December 31, 2003            $1.75        $1.35
Third Quarter Ended March 31, 2004                $3.85        $1.44
Fourth Quarter ended June 30, 2004                $3.57        $0.90

      As of September 9, 2005, there were approximately 1,975 stockholders of
record of our common stock. Our registrar and transfer agent is Signature Stock
Transfer, Inc., One Preston Park, 2301 Ohio Dr., Suite 100, Plano, Texas 75093;
telephone (972) 612-4120.

Dividend Policy

      We have not adopted any policy regarding the payment of dividends on our
common stock. We do not intend to pay any cash dividends on our common stock in
the foreseeable future. All cash resources are expected to be invested in
developing our business. There are no restrictions that materially limit our
ability to pay cash dividends.

Recent Sales of Unregistered Securities

      On September 13, 2004, we completed a private placement transaction with
11 accredited investors, pursuant to which we sold an aggregate of 3,666,668
shares of common stock, 1,833,334 Series A Warrants, 1,833,334 Series B Warrants
and 1,833,334 Series C Warrants. We received gross proceeds totaling
$1,649,900.10. For each two shares of common stock, we issued investors one A
Warrant, one B Warrant and one C Warrant. Each two shares and three warrants
were sold at a price of $0.90. The private placement was exempt from
registration under Rule 506 of Regulation D under the Securities Act of 1933, as
amended.

      During the three-month period ended September 30, 2004, we issued
18,806,248 shares of common stock in connection with a cashless exercise of
warrants. These warrants had originally been issued under a June 2002 consulting
agreement, and the aggregate value of the warrants is approximately $1,175,000.
The transaction was exempt from registration under Section 4(2) of the
Securities Act of 1933, as amended.

      During October 2004 Hyde Investments converted $200,000 of their
convertible debt into 3,200,000 shares of common stock. The transaction was
exempt from registration under Regulation S under the Securities Act of 1933, as
amended.

      In November, 2004, we completed a private placement transaction with 11
accredited investors, pursuant to which we sold an aggregate of 6,050,000 shares
of common stock, and 6,050,000 Series A warrants, 6,050,000 Series B warrants,
and 6,050,000 Series C warrants. We received gross proceeds totaling $605,000.
This private placement also triggered a reset to exercise prices of warrants
sold pursuant to the September 13, 2004 private placement described above. The
private placement was exempt from registration under Rule 506 of Regulation D
under the Securities Act of 1933, as amended.


                                       19
<PAGE>

      In January 2005, various European investors exercised 931,525 warrants at
an exercise price of $0.10 per share. The original warrant exercise price of
these warrants was $.75 and $.1224. The exercise was made at $0.10 due to an
anti-dilution adjustment caused by our November 2004 private placement. Due to
the adjustment, the number of shares issuable under the warrants increased to
2,783,930 common shares, which provided total proceeds of $274,000. As
consideration for exercising the warrants, for every warrant exercised we issued
investors a 5-year replacement warrant at $0.12. These transactions were exempt
from registration pursuant to Regulation S promulgated under the Securities Act
of 1933, as amended.

      On June 14, 2005, we sold an aggregate of 1,100 shares of Series A
Convertible Preferred Stock, warrants to purchase an aggregate of 1,100,000
shares of common stock with an exercise price of $0.10 per share, and warrants
to purchase an aggregate of 1,100,000 shares of common stock with an exercise
price of $0.125 per share, to one accredited investor. The Series A Preferred
Stock was sold for a per share purchase price of $100. For each share of Series
A Preferred Stock purchased investors received a $0.10 Warrant to purchase 1,000
shares of common stock and a $0.125 Warrant to purchase 1,000 shares of common
stock. The Warrants are exercisable for a term of three years. $50,000 of the
purchase price for the Series A Preferred Stock and the Warrants was paid in
cash to the Company and the remaining $60,000 of the purchase price was paid by
the issuance to the Company of a $60,000 principal amount interest-free
promissory note due and collected in August 2005. This transaction was made
pursuant to the exemption from registration requirements under Section 4(2) of
the Securities Act of 1933, as amended, and Rule 506, promulgated thereunder.

      On June 22, 2005, we sold an aggregate of 2,000 shares of Series A
Preferred Stock, $0.10 Warrants to purchase 2,000,000 shares of Common Stock and
$0.125 Warrants to purchase 2,000,000 shares of Common Stock to one accredited
investors for aggregate gross proceeds of $200,000. The Series A Preferred Stock
was sold for a per share purchase price of $100. For each share of Series A
Preferred Stock purchased investors received a $0.10 Warrant to purchase 1,000
shares of common stock and a $0.125 Warrant to purchase 1,000 shares of common
stock. The Warrants are exercisable for a term of three years. This transaction
was made pursuant to the exemption from registration requirements under Section
4(2) of the Securities Act of 1933, as amended, and Rule 506, promulgated
thereunder.

ITEM 6. SELECTED FINANCIAL DATA

      The following information presents selected financial data from continuing
operations since the inception of AccuPoll, Inc. in August 2001.

<TABLE>
<CAPTION>
                                                                                 (as restated)(2)    August 1, 2001
                                                 2005               2004              2003           to June 30, 2002
                                                 ----               ----              ----           ----------------
<S>                                          <C>               <C>               <C>                 <C>
Years (period) ended June 30 (from
  continuing operations):
  Net Sales                                  $     17,416      $         --      $         --        $         --
  Interest Expense                              2,173,721         4,406,237            29,900             303,875
  Net Loss (1)                                (10,443,447)      (12,148,774)       (4,848,567)         (2,406,580)
    Net Loss per share - continuing
      operations (basic & diluted)                  (0.05)            (0.09)            (0.05)              (0.04)
  Cash used in operating activities            (3,065,367)       (5,160,929)       (1,687,695)           (746,490)

At June 30:
  Total Assets - continuing
    operations                               $  1,391,486      $  2,843,711      $  1,550,605        $  1,111,017
  Long-Term Debt:
    Convertible Debt                            4,167,696         3,304,600                --                  --
    Equity Instruments Subject to
      Rescission, including interest            1,415,000         6,200,000         4,377,033                  --
  Convertible Redeemable Preferred Stock          310,000                --                --                  --
  Stockholders' (Deficit) Equity               (8,834,234)      (10,429,101)       (4,919,621)            778,219
</TABLE>


                                       20
<PAGE>

      (1)   Net loss from continuing operations includes loss on disposal of
            investment of $1,200,000 for the year ended June 30, 2004.

      (2)   Subsequent to the original issuance of the Company's June 30, 2003
            financial statements, it was determined that consulting services,
            for which the Company had granted a warrant to purchase 1 million
            shares of common stock with an estimated fair value of $655,000, had
            not been and will not be performed. Therefore, the accompanying
            consolidated statements of operations for the year ended June 30,
            2003 and for the period from Inception through June 30, 2003 have
            been restated. The effect of such restatement was to reduce the
            previously reported net loss by $655,000 with no effect on (rounded)
            loss per common share.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

General

      We are in the business of developing and marketing computerized voting
machines and their associated products and services for use in federal, state,
local and private elections. We have developed a direct recording electronic
voting system that provides a voter-verified paper audit trail that is both
human and machine readable. Our voting system was qualified as meeting 2002 and
1990 FEC voting system standards on May 10, 2005 and March 25, 2004,
respectively. We believe that it is currently the only electronic voting system
qualified under both the 2002 and 1990 FEC voting system standards that provides
a voter-verified paper audit trail that is both human and machine readable.
Completion of qualification testing under the 2002 FEC voting system standards
enables us to apply for state certification in states that have such a
requirement. As of September 22, 2005, our direct recording electronic voting
system was certified by the states of Alabama, Arkansas, Kentucky, Mississippi,
Ohio, South Dakota, Utah and West Virginia, Pennsylvania, Texas, Louisiana and
Missouri. Currently, we are in the process of applying for certification in
additional states.

      We have completed two contracts to conduct private elections using our
voting system through September 22, 2005. These two contracts had a total value
of $17,416 and were to conduct a total of three elections for the union local in
Long Beach, CA. The completion of federal qualification testing under the 2002
FEC voting system standards will allow us to complete pending state
certification applications in several states. We had limited revenues during the
period from commencement of our voting system operations through June 30, 2005.
On June 17, 2005 we entered into our first agreement for the sale of our voting
system. We are actively in negotiations with multiple parties for further
agreements to provide our voting system products and services. As of September
22, 2005, we have entered into four agreements to provide products and services
relating to our voting system. We also receive cash flow through private
placements of our common stock and other securities (see also Liquidity and
Capital Resources discussion below).

      In June 2005, with support of the Board of Directors, management of the
Company decided to begin winding down the activities of Z prompt, Inc. and to
close this subsidiary during the first fiscal quarter of 2006. Employees and
customers were notified in June 2005 and customer contracts were terminated,
without penalty, through August 31, 2005. Z prompt provides hardware maintenance
and technology support services primarily to mid- range to Fortune 1000
companies and to state and local governments. The Company purchased Z prompt,
Inc. in November 2003 to support its voting system business with technical
support. The decision to close the Z prompt subsidiary was reached after
analysis of Z prompt's contracts and long-term cash flow forecast together with
receipt by AccuPoll, Inc. of federal qualification to 2002 FEC voting system
standards of its voting system in May 2005. Although Z prompt emerged from
bankruptcy in February 2005, it has not been profitable since its acquisition in
November 2003. Management evaluated the losses attributed to Z prompt and
determined that reaching sustained profitability in the subsidiary at any time
in the near future was unlikely. Further, with receipt of the 2002 FEC voting
systems standards qualification, the Company will now focus on seeking state
certifications and broadly marketing its voting system as well as fund raising
to support these endeavors. The net losses of Z prompt for the year ended June
30, 2005 and the period from November 1, 2003 through June 30, 2004 were
$1,270,523 and $3,230,479, respectively.are presented in the accompanying
consolidated statements of operations as discontinued operations.


                                       21
<PAGE>

      For the fiscal years ended June 30, 2005, 2004 and 2003, we incurred
losses from continuing operations of $10,443,447, $12,148,774, and $4,848,567,
respectively. As of June 30, 2005 we had an accumulated deficit of $34,458,370.
Cumulative cash used in operating activities of continuing operations was
approximately $10,660,000 from the Company's inception (August 9, 2001) through
June 30, 2005. The primary non-cash expenses comprising the difference between
the accumulated deficit and cumulative cash used in continuing operations are as
follows:

<TABLE>
<CAPTION>
                                                                  (rounded to thousands)

<S>                                                                         <C>
         Cumulative cash used in activities of continuing operations        $10,660,000
           Depreciation and amortization                                      3,001,000
           Estimated fair value of common stock, options and warrants
             granted for services                                             7,840,000
           Amortization of estimated fair value of warrants granted and
             beneficial conversion feature in connection with the
             issuance of convertible debt                                     5,432,000
           Convertible debt issued for services                               1,600,000
           Loss on disposal of investment                                     1,200,000
           Other, net                                                           224,000
                                                                            -----------
         Accumulated deficit resulting from continuing operations            29,957,000
           Cumulative losses of discontinued operations                       4,501,000
                                                                            -----------
         Accumulated deficit at June 30, 2005                               $34,458,000
                                                                            ===========
</TABLE>

      Over the next twelve months and through 2007, we plan to continue selling
our voting system throughout the United States. This plan coincides with the
2005-06 time period prescribed to meet the deadlines of the Help America Vote
Act. Beyond this period, we intend to pursue opportunities in foreign markets
for our electronic voting system. By that time, we expect to have established
credibility in the elections industry worldwide through selling and deploying
our electronic voting system in the United States. We do not have any plans
during 2006 to expand our sales force to begin marketing our direct recording
electronic voting system outside the United States. Before we begin to enter
markets outside the United States, we will need to assess the election laws and
regulatory environment of any new market to determine what, if any, changes are
required to our voting system. As an example, one possible change is the need to
translate all voting system messages and documentation to a new language for use
in a specific country. While our voting system is capable of supporting any
written language, the change will require a one time effort to perform the
necessary language translation. The cost of making any required changes to our
voting system for use in any given market is not known at this time. These costs
will be determined as part of our preparation and analysis before entering a new
market.

      We also plan to begin marketing services to conduct elections for private
organizations in the United States over the next twelve months. This is a
turnkey based service approach versus the sale or lease of a voting system to a
customer. Although we have conducted elections for private organizations in the
past and continue to receive requests to conduct such elections, this marketing
approach is not actively pursued by our sales and marketing team. We currently
conduct such elections principally as an educational tool for the voting public.

      The Election Assistance Commission began disbursing federal funds under
Title II of the Help America Vote Act to states in June 2004. However, many
states and counties were hesitant to make any voting system changes prior to the
November 2004 Presidential election that was less than five months away. As a
result, the purchase of new voting systems prior to the November 2004 election
was effectively frozen. We have experienced the resumption of voting system
purchase activity in the first quarter of 2005 as states and counties work
toward meeting the 2006 deadlines of the Help America Vote Act.

Results of Continuing Operations

Comparison of Year Ended June 30, 2005 to Year Ended June 30, 2004

      Revenues: For the year ended June 30, 2005 we had revenues from continuing
operations of approximately $17,000. For the year ended June 30, 2004 we had no
revenue from continuing operations. The increase was the result of revenues
generated from the rental of the Company's voting system in private elections of
union officials. As of June 30, 2005, the Company has not yet earned revenues
from the use or sale of its voting system in an election of public officials.


                                       22
<PAGE>

      General and Administrative Expenses: General and administrative expenses
were $2,466,929 for the year ended June 30, 2005 as compared to $2,047,089 for
the year ended June 30, 2004. The increase in general and administrative
expenses is the result of additional payroll costs of approximately $430,000.

      Professional Fees: Professional fees were $3,038,453 for the year ended
June 30, 2005 as compared to $4,264,156 for the year ended June 30, 2004.
Included in professional fees expense is the fair value of warrants issued for
services of approximately $2,560,000 and $846,000 during the years ended June
30, 2005 and 2004, respectively. The decrease in professional fees is due to
consulting fees incurred in fiscal 2004 to former shareholders of the Company.
No such services were rendered to the Company in fiscal 2005 and the consulting
agreement has been terminated.

      Interest Expense: Interest expense was $2,173,721 for the year ended June
30, 2005 as compared to $4,406,237 for the year ended June 30, 2004. The
decrease in interest expense is due to a reduction in non-cash beneficial
conversion charges and fair value of warrants granted in connection with
convertible debt and equity instruments to $1,377,371 in the year ended June 30,
2005 from $4,054,600 in 2004, offset by greater interest charges of
approximately $183,000 on higher debt balances during the year ended June 30,
2005 than the year ended June 30, 2004. The Company's convertible debt, which
comprises substantially all interest-bearing debt at June 30, 2005 and 2004,
bears interest at fixed rates and does not result in material rate fluctuation
between the two years.

      Amortization of Software Costs: Amortization of software costs was
$2,763,874 for the year ended June 30, 2005 compared to $231,292 for the year
ended June 30, 2004. In fiscal 2003, we commenced capitalization of software
development costs to meet federal 1990 voting system standards. Our system was
qualified as meeting certain 1990 FEC voting system standards in late March 2004
at which time we ceased further capitalization and began amortizing the
capitalized development costs. We amortized approximately $231,000 of these
costs in the year ended June 30, 2004 and $2,488,000 in the year ended June 30,
2005. Upon obtaining the 1990 FEC voting system standards we immediately began
to further develop our voting system to meet certain 2002 FEC voting system
standards, for which we received qualification in May 2005 at which time we
ceased further capitalization and began amortizing the capitalized development
costs of $1,053,000 incurred to meet the 2002 FEC voting system standards in
June 2005. We amortized approximately $276,000 of these costs in the year ended
June 30, 2005.

      Net Loss from Continuing Operations: For the year ended June 30, 2005, we
incurred a net loss from continuing operations of $10,443,447 or $0.05 per
common share. This compares to a net loss from continuing operations of
$12,148,774 or $0.09 per common share for the year ended June 30, 2004. The
decreased loss is partially due to a $1,225,703 decrease in professional fees
and a $2,232,516 decrease in interest expense. Additionally, in the year ended
June 30, 2004 we recorded a loss on the disposal of an investment totaling
$1,200,000. The Company commenced amortization of capitalized software
development costs in the fourth quarter of fiscal 2004. Accordingly, the
decrease in professional fees and interest expenses are offset by an increase in
amortization of software development costs of $2,532,082 for the year ended June
30, 2005 over the year ended June 30, 2004.

Comparison of Year Ended June 30, 2004 to Year Ended June 30, 2003

      Revenues: For the years ended June 30, 2004 and 2003 we had no revenues
from continuing operations as the Company was in the process of developing its
voting system during the periods.

      General and Administrative Expenses: General and administrative expenses
were $2,047,089 for the year ended June 30, 2004 as compared to $1,054,390 for
the year ended June 30, 2003. The increase in general and administrative
expenses is the result of increased development and certification costs of
approximately $274,000, additional personnel costs resulting in an increase of
approximately $305,000, increased travel costs of approximately $151,000,
increased facility costs and office expenses of approximately $219,000 to
support development and certification of the Company's voting system.

      Professional Fees: Professional fees were $4,264,156 for the year ended
June 30, 2004 as compared to $3,764,277 for the year ended June 30, 2003. The
increase in professional fees is due to higher costs of software engineering
services to develop our voting system.


                                       23
<PAGE>

      Interest Expense: Interest expense was $4,406,237 for the year ended June
30, 2004 as compared to $29,900 for the year ended June 30, 2003. The increase
in interest expense is due to non-cash beneficial conversion charges for equity
instruments issued in connection with fund raising activities.

      Loss on Disposal of Investment: In December 2003 we entered into an
agreement to purchase Material Technologies, Inc. for $1,200,000. The purchase
consideration was a borrowing under one of the Company's convertible debenture
facilities of the full $1,200,000. The Company subsequently un-wound the
Material Technologies Inc. transaction and expensed the entire $1,200,000 as a
loss on disposal of the investment in Material Technologies Inc.'s common stock
in the fiscal 2004 results of operations. At June 30, 2005, the Company remains
liable for the $1.2 million convertible debt.

      Net Loss from Continuing Operations: For the year ended June 30, 2004, we
incurred a net loss from continuing operations of $12,148,774 or $0.09 per
common share. This compares to a net loss of $4,848,567 or $0.05 per common
share for the year ended June 30, 2003. The increased loss is due primarily to
increased general and administrative expenses of $992,699, increased interest
expense of $4,376,337 and a loss on the disposal of an investment totaling
$1,200,000.

Liquidity and Capital Resources

      As described above, in May 2005 we received federal certification under
the 2002 federal voting system standards allowing us to complete pending state
certification applications in several states. We continue to negotiate with
jurisdictions interested in purchasing or leasing our voting system after we
complete state certifications. Through September 22, 2005 we have entered into
sales contracts with customer totaling $417,544. We expect these contracts to be
delivered from September 2005 through March 2006. We expect to secure additional
contracts for the sale or lease of our voting system during the next six months
and through 2006. This coincides with the 2005-06 time period prescribed to meet
the deadlines of the Help America Vote Act of 2002.

      From August 2001, the date of our inception, through June 30, 2005, we
have raised funds totaling approximately $13.5 million from the sale of common
stock and convertible notes and other securities. We have also issued common
stock, convertible notes and other securities in exchange for assets and
services.

      As of June 30, 2005 we had a cash overdraft of $56,357 and a working
capital deficiency of approximately $4.4 million. Our accumulated deficit as of
June 30, 2005 was approximately $34.5 million.

      Our monthly expenditures for continuing operations are approximately
$300,000 excluding non-cash software amortization charges and we expect these
expenditures, with the exception of sales and marketing costs, to remain flat
until we begin to deliver on expected voting system contracts. These monthly
expenses consist of approximately $175,000 for salary and benefit expenses,
$65,000 for general administration and office expenses, $35,000 in sales &
marketing expenses, and $25,000 for interest expense.

      Once we secure substantial contracts for our voting system and begin
delivery, we may need to increase our staff so we can meet demand for the voting
systems. We expect any resulting increase in spending will be supported by
revenues from voting system contracts. With the completion of qualification
testing under the 2002 FEC voting system standards, counties are expressing a
growing interest in our voting system. We have secured four contracts with
counties and are in negotiations now with several others to procure our voting
system. We cannot guarantee that these negotiations will result in signed
contracts, or when the contracts will be approved and signed by the appropriate
county authority.

      As per the going concern comment from our independent auditors, we do not
currently have sufficient capital resources to fund our planned operations over
the next twelve months or beyond.

      Management believes that we will require an additional $6.4 million in
financing over the next twelve months to pay past due payables and continue
operations. Of the $6.4 million in financing needed, management believes that we
will need approximately $2 million to pay past due payables, $3.8 million to
continue operations as currently conducted for the next twelve months and $0.6
million for further product development. Additional cash would be used to
develop sales and marketing efforts, to buy product inventory, increase our
sales staff and generally to improve our financial condition. Additional cash
would also be used to develop a new version of our hardware, which would help
lower costs and increase margins once product is sold. The potential dilutive
effects of a $6.4 million financing is dependent upon the market price of our
common stock, the number of securities issuable and transaction costs. For
example, if we entered into an equity financing at $0.10 per share, we would be
required to issue an additional 64 million shares of common stock for $6.4
million gross. Notwithstanding our expected need for $6.4 million in financing
during the next twelve months, we cannot guarantee that additional financing
will be available, or if available, will be on acceptable terms. If we do not
obtain additional financing, we will not be able to continue operations.


                                       24
<PAGE>

      In November 2003, we secured a $5 million dollar revolving credit
facility, in the form of two seven-month convertible notes (the November 2003
Debentures). The November 2003 Debentures bear interest at an annual rate of 10%
and originally matured on June 30, 2004, but were extended to June 30, 2005. The
November 2003 Debentures are convertible on 90 days written notice by the
holders at the lesser of (i) 50% of the average three lowest closing prices for
our common stock for the twenty days immediately preceding the conversion date
or (ii) $.0625 per share. At June 30, 2005, we had a balance of $2,509,000 under
the November 2003 Debentures. The November 2003 Debentures matured on June 30,
2005. See the following paragraph for further discussion of the November 2003
Debentures.

      We have a convertible debenture (the June 2003 Debenture) with Palisades
Holdings, LLC whereby Palisades Holdings, at its discretion, may provide us
loans of up to $1,250,000. The June 2003 Debenture bears interest at an annual
rate of 10% and originally matured on June 30, 2004, but was extended to June
30, 2005. The June 2003 Debenture is convertible on 90 days written notice by
Palisades Holdings at the lesser of (i) 50% of the average three lowest closing
prices for our common stock for the twenty days immediately preceding the
conversion date or (ii) $.0625 per share. On March 22, 2005, Palisades Holdings,
LLC converted $134,000 of the June 2003 Debenture into 2,144,000 shares of
common stock. At June 30, 2005, we had a balance of $918,000 under the June 2003
Debenture. The June 2003 Debenture matured on June 30, 2005.

      On September 26, 2005, in connection with the execution of a Conversion
and Settlement Agreement with Mutual General Releases between the holders of the
June 2003 and November 2003 Debentures ("2003 Debenture Holders") and the
Company, the 2003 Debenture Holders exercised their conversion rights under the
terms of the debentures on outstanding principal of $2,242,000 and received 59
million shares of the Company's common stock. All remaining principal and
accrued interest totaling approximately $1,300,000 was forgiven and an
unexercised warrant for 6,400,000 common shares issued in June 2003 in
connection with the June 2003 Debenture was canceled.

      We have a convertible debenture with C&S Consolidated Services Hong Kong.
The convertible debenture bears interest at an annual rate of 7% payable
semi-annually in cash with an original maturity date of October 14, 2004. The
maturity date of the debenture was extended to September 30, 2005 with a further
extension available to December 31, 2005. The debenture is convertible into
shares of common stock at a conversion price of $0.35 per share. At June 30,
2005, we had balance of $308,000 under such debenture.

      We have a convertible debenture with Philip G. Trubey, a Director of the
Company. The convertible debenture bears interest at an annual rate of 10%
payable upon maturity at October 21, 2005. The debenture is convertible into
shares of common stock of $0.10 per share. At June 30, 2005, we had balance of
$300,000 under such debenture.

      Our subsidiary Z prompt, Inc. has a line of credit with Bank of America
dated October 28, 2003 for a principal amount of $250,000. As of August 30,
2004, the note was in default. On February 3, 2005, the Bank of America withdrew
$172,579 (principal and interest) from the Z prompt checking account. The
outstanding balance at June 30, 2005 is approximately $62,000 including accrued
interest.

      We had a convertible debenture with four accredited investors. The
convertible debenture accrued interest at an annual rate of 8% and matured on
July 2, 2004. In October 2004, the entire remaining amount of the debenture was
converted into 3,125,000 shares of common stock of $.15 per share. There are no
material covenants or commitments outstanding on this convertible debenture.


                                       25
<PAGE>

      In December 2002, we entered into a location incentive agreement with the
Amarillo Economic Development Corporation (AEDC). In January 2003, we received a
$250,000 grant from the AEDC, which amount is included in accounts payable and
accrued expenses in the accompanying consolidated balance sheets at June 30,
2005 and 2004 since we have not yet fulfilled our obligations related to the
agreement. As part of the agreement, we granted the AEDC warrants to purchase
250,000 shares of our restricted common stock at an exercise price of $1.60 per
share. Additional cost associated with the Amarillo, Texas facilities is rent in
the amount of approximately $28,000 and approximately $26,000 for the years
ended June 30, 2005 and 2004, respectively. These are the only additional
expenses incurred in regards to the location incentives agreement to date. We
did not fulfill our minimum employment obligations under the agreement and, as
required, re-paid the $250,000 incentive grant to AEDC in August 2005.

      On September 13, 2004, we completed a private placement transaction with
eleven accredited investors, pursuant to which we sold an aggregate of 3,666,447
shares of common stock, 1,833,227 Series A Warrants, 1,833,227 Series B Warrants
and 1,833,227 Series C Warrants. We received gross proceeds approximating
$1,650,000. For each two shares of common stock, we issued investors one A
Warrant, one B Warrant and one C Warrant. Each two shares and three warrants
were sold at a total price of $0.90. The private placement was exempt from
registration under Rule 506 of Regulation D of the Securities Act of 1933, as
amended.

      The outstanding loan amount due form our subsidiary Z prompt, Inc. totaled
$2,165,206 as of June 30, 2005. The outstanding balance does not have any
specific repayment terms other than being due and payable to us as Z prompt can
afford to make payments. The loan does not bear any interest. The funds were
necessary for Z prompt to continue operations. In June 2005, management decided
to wind-down the operations of Z prompt. There is no material loss on the
closure of Z prompt. The wind-down is expected to be complete by September 30,
2005 with the exception of paying or otherwise retiring all debts of Z prompt.

      On November 4, 2004, we completed a private placement transaction with
eleven accredited investors, pursuant to which we sold an aggregate of 6,050,000
shares of common stock, 3,025,000 Series A Warrants, 3,025,000 Series B Warrants
and 3,025,000 Series C Warrants. We received gross proceeds totaling $605,000.
For each two shares of common stock, we issued investors one A Warrant, one B
Warrant and one C Warrant. Each two shares and three warrants were sold at a
total price of $0.20. The private placement was exempt from registration
requirements under Rule 506 of Regulation D of the Securities Act of 1933.

      In January 2005, various European investors exercised 931,525 warrants at
an exercise price of $0.10 per share. The original warrant exercise price of
these warrants was $.75 and $.1224. The exercise was made at $0.10 due to an
anti-dilution adjustment caused by our November 2004 private placement. Due to
the adjustment, the number of shares issuable under the warrants increased to
2,783,930 common shares, which provided total proceeds of $274,000. As
consideration for exercising the warrants, for every warrant exercised the
Company issued investors a 5-year replacement warrant at $0.12.

      On January 20, 2005, $80,000 of the Hyde Investments convertible debenture
was converted into 2,285,714 shares of common stock.

      In March 2005, various European investors exercised 7,416,000 warrants at
an exercise price of $0.06 per share. The proceeds raised from this transaction
were $445,000. An additional 1,000,000 warrants were exercised by another
European investor at an exercise price of $0.10 per share for proceeds of
$100,000.

      In March 2005, through three different financings the Company issued an
aggregate of 2,500,000 shares at $0.10 per share and approximately 7,417,000
shares at $0.06 per share for aggregate cash proceeds of approximately $626,000
net of commissions and costs.

      In March 2005, a Canadian investor purchased 1.5 million shares for a
price of $0.10 per share for proceeds of $150,000.


                                       26
<PAGE>

      Between June 14, 2005 and September 23, 2005, we sold an aggregate of
11,250 shares of Series A Convertible Preferred Stock ("Series A Preferred
Stock"), warrants to purchase an aggregate of 11,250,000 shares common stock
with an exercise price of $0.10 per share ("$0.10 Warrants"), and warrants to
purchase an aggregate of 11,250,000 shares of common stock with an exercise
price of $0.125 per share ("$0.125 Warrants"; the $0.10 Warrants and the $0.125
Warrants are collectively referred to as the "Warrants"), to accredited
investors in private placement transactions. As of September 23, 2005, we
received aggregate net proceeds of $834,298 from sales of Series A Preferred
Stock and Warrants. For each share of Series A Preferred Stock purchased
investors received a $0.10 Warrant to purchase 1,000 shares of common stock and
a $0.125 Warrant to purchase 1,000 shares of common stock. The Warrants are
exercisable for a term of three years. The stated value of the Series A
Preferred Stock is $100. The Series A Preferred Stock is convertible at any time
at the holders' option into that number of shares of common stock equal to the
stated value divided by $0.10, subject to adjustment for stock dividends, stock
splits, reclassifications, and similar events. We agreed to prepare and file
with the Securities and Exchange Commission a registration statement covering
the resale of the common stock issuable upon conversion of the Series A
Preferred Stock and upon exercise of the Warrants no later than 60 days after
the closing date. If such registration statement is not filed on or before 60
days after the closing date or if the registration statement is not declared
effective by the Securities and Exchange Commission on or before 60 days after
the closing date (or 90 days after the closing date if the registration
statement is reviewed by the Securities and Exchange Commission), then we must
pay to each investor liquidated damages equal to 5% percent of the aggregate
subscription amount paid by investors for each month that such event has not
occurred.

      Continental Advisors S.A. (Lux.) acted as placement agent in connection
with the sale of the Series A Preferred Stock and Warrants. In consideration for
its services as placement agent, we agreed to pay Continental Advisors S.A. an
amount in cash equal to 10% of the aggregate gross proceeds received by us and
to issue Continental Advisors S.A. warrants to purchase such number of shares of
Common Stock equal to 10% of aggregate gross proceeds. The warrants issuable to
Continental Advisors S.A. will have the same terms as the Warrants sold to
investors. One of our directors, Andreea M. Porcelli, is a consultant for
Continental Advisors S.A.

      Web Tools International, Inc., a related party, provided us with software
development services related to the product development of our electronic voting
system during the period April 1, 2002 until March 31, 2004. During that period
Web Tools International, Inc. billed us approximately $2.8 million. During the
nine months ended March 31, 2005, we made payments of $56,040 to Web Tools
International, Inc. As of June 30, 2005, the outstanding amount owed to Web
Tools International, Inc. was $1,420,210. The outstanding amount due to Web
Tools International, Inc. does not bear any interest. If we cannot repay this
loan, the entire amount of the loan may be recorded as a loss, which would
adversely affect our financial condition and prospects.

      We have offered and sold a substantial number of shares of common stock
and warrants and options to purchase common stock without registration under the
Securities Act of 1933, as amended (the "Securities Act"), or qualification
under state securities laws. If any offer or sale were not exempt from, or
otherwise not subject to, federal and state registration and qualification
requirements, the purchasers of such securities will have the right to rescind
the purchase.

      The Securities Act requires that any claim for rescission be brought
within one year of the violation. The time periods within which claims for
rescission must be brought under state securities laws vary and may be two years
from the date of the violation.

      At June 30, 2005, approximately 1.2 million shares of our outstanding
common stock, options and warrants are subject to rescission (using a two year
lookback), with a potential liability approximating $1.4 million, including
interest at 10% per annum. This number of warrants and options described above
does not include warrants and options to purchase a total of 3,600,000 shares of
common stock issued within two years of June 30, 2005 to our chief executive
officer, Dennis Vadura and our president, Frank Wiebe and a warrant to purchase
12,400,000 shares of common stock for which the holder has agreed in writing
that it will not assert any right to rescission that it may have. However, we
cannot assure you that this agreement is enforceable.

      Management is unable to determine at this time whether any claim for
rescission may be filed against us; however, there can be no assurance that
claims will not be asserted. In addition, regulatory agencies could launch a
formal investigation and/or institute an enforcement proceeding against us for
violations of federal and state registration and qualification requirements.


                                       27
<PAGE>

Capital Expenditures

      We anticipate certain capital expenditures related to developing and
testing subsequent versions of the voting system hardware and software. We
estimate such capital expenditures for hardware to be approximately $100,000
over the course of the fiscal year ending June 30, 2006. We will rely on future
fund raising in order to pay for development and testing of these subsequent
versions. We currently have no definitive plans to secure such financing.

Discontinued Operations (Z prompt, Inc.)

      In June 2005, with support of the Board of Directors, management of the
Company decided to begin winding down the activities of Z prompt, Inc. and to
close this subsidiary during the first quarter of 2006. Z prompt incurred a net
loss of approximately $1,270,000 in the year ended June 30, 2005. The decision
to close the Z prompt subsidiary was reached after analysis of Z prompt's
contracts and long-term cash flow forecast together with receipt by AccuPoll,
Inc. of federal certification to 2002 voting system standards ("2002 standards")
of its voting system in May 2005. Although Z prompt emerged from bankruptcy in
February 2005, it has not been profitable since its acquisition in November
2003. Management evaluated the losses attributed to Z prompt and determined that
reaching sustained profitability in the subsidiary at any time in the near
future was unlikely.

      On March 23, 2004, Z prompt, Inc. filed a petition for relief under
Chapter 11 of the United States Bankruptcy Code. The bankruptcy proceeding was
dismissed on February 1, 2005 upon a motion made by the U.S. Trustee in the
case. We incurred approximately $144,000 in legal and other fees and expenses in
connection with the bankruptcy proceedings of Z prompt, Inc.

      When Z prompt, Inc. filed for Chapter 11 bankruptcy protection, it had
outstanding debt of approximately $1.225 million payable to vendors and
non-secured creditors. Of the outstanding debt, $225,000 was unsecured debt in
connection with a line of credit from Bank of America. As of June 30, 2005, Z
prompt, Inc. had outstanding debts of approximately $544,000. Of this amount,
approximately $62,000 is outstanding from the Bank of America line of credit.
The balance of the debt is unsecured debt owed to vendors with whom we are
currently in negotiations for repayment.

Going Concern

      At June 30, 2005, we had an accumulated deficit of $34,458,370. During the
six months ended June 30, 2005, we completed two contracts to conduct private
elections using our voting system with a value of $17,416; however, these
contracts are not substantial and there is no assurance of additional future
revenues at this time. Consequently, we will require substantial additional
funding for continuing the development, obtaining regulatory approval, and
commercialization of our product. There is no assurance that we will be able to
obtain sufficient additional funds when needed or that such funds, if available,
will be obtainable on satisfactory terms.

      Management has taken actions to address these matters, which include:

      o     Retention of experienced management personnel with particular skills
            in the commercialization of such products;

      o     Attainment of technology to develop such products and additional
            products; and

      o     Raising additional funds through the sale of debt and/or equity
            securities.

      Federal, State and various foreign government regulations govern the sale
of our products. On May 10, 2005, we were issued NASED Qualification number
N-2-13-22-22-001 (2002), which confirms that our Voting System Product Version
2.5 has successfully completed the ITA qualification process and has been
certified by NASED under the 2002 FEC voting system standards. The federal
qualification number will allow us to pursue certification in states that
require voting system qualification under the 2002 FEC voting system standards.

      As of September 22, 2005, our Voting System product was certified in 11
states (Alabama, Arkansas, Kentucky, Louisiana, Missouri, Ohio, Pennsylvania,
South Dakota, Texas, Utah, and West Virginia), and we have pending state
certification applications in Kansas, Montana, and New Mexico, while Delaware
and Mississippi require only federal qualification. Given the new federal
qualification event, our ability to market our product is no longer at risk.
There is however, no assurance that we will be able to secure state
certification in all of the additional state jurisdictions where we may wish to
market our products in the future.


                                       28
<PAGE>

      We have incurred losses through June 30, 2005, and we have negative
working capital at that date of approximately $4.4 million, and have a lack of
operational history that, among other factors, raises doubt about our ability to
continue as a going concern. We intend to fund operations through sales of our
Voting System and associated services. As of September 22, 2005 we have only
been able to sell election services to four counties and the Long Beach Chapter
of the UAW Local 148 and we have no firm commitment by any other entities for
the purchase of any of our products or services. In the absence of significant
sales and profits, we may seek to raise additional funds to meet our working
capital requirements through debt and/or equity financing arrangements.

      Management believes that we will require an additional $6.4 million in
financing over the next twelve months to pay past due payables and continue
operations. Of the $6.4 million in financing needed, management believes that we
will need approximately $2 million to pay past due payables, $3.8 million to
continue operations as currently conducted for the next twelve months and $.6
million for product development. Additional cash would be used to develop sales
and marketing efforts to front load inventory, increase our sales staff and
generally to improve our financial condition. Additional cash would also be used
to develop a new version of our hardware, which would help lower costs and
increase margins once product is sold. The potential dilutive effects of a $6.4
million financing is dependent upon the market price of our common stock, the
number of securities issuable and transaction costs. For example, if we entered
into an equity financing at $0.10 per share, we would be required to issue an
additional 64 million shares of common stock for $6.4 million gross.
Notwithstanding our expected need for $6.4 million in financing during the next
twelve months, we cannot guarantee that additional financing will be available,
or if available, will be on acceptable terms. If we do not obtain additional
financing, we will not be able to continue operations.

      Our monthly expenditures for continuing operations are approximately
$300,000 excluding non-cash software amortization charges and we expect these
expenditures, with the exception of sales and marketing costs, to remain flat
until we begin to deliver on expected voting system contracts. These monthly
expenses consist of approximately $175,000 for salary and benefits expenses,
$65,000 for general administration and office expenses, $35,000 in sales &
marketing expenses, and $25,000 for interest expenses.

      These circumstances, combined with other potential liabilities raise doubt
about our ability to continue as a going concern. The accompanying consolidated
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.

      The accompanying consolidated financial statements have been prepared
assuming that we will continue as a going concern which contemplates, among
other things, the realization of assets and satisfaction of liabilities in the
ordinary course of business.

Inflation

      Our management believes that inflation has not had a material effect on
our results of operations.

Off-Balance Sheet Arrangements

      We do not have any off balance sheet arrangements that are reasonably
likely to have a current or future effect on our financial condition, revenues,
results of operations, liquidity or capital expenditures.

                                       29
<PAGE>

Contractual Obligations

      As of June 30, 2005, we had the following contractual obligations:


<TABLE>
<CAPTION>
                                                                   Payments due by period
                                                           ----------------------------------------
                                                                          Less than
Contractual Obligations                                       Total         1 year       1-3 years
-----------------------                                    ----------     ----------     ----------
<S>                                                        <C>            <C>            <C>
Operating Lease Obligations
     Greenberg Farrow Architecture - AccuPoll - Tustin     $  160,591     $  160,591
     Loutex Amarillo - AccuPoll - Texas office lease       $   90,894     $   45,204     $   45,690

Long-Term Debt
     Bank of America Line of Credit (Z prompt)             $   61,566     $   61,566
     Officers                                              $  260,000     $  260,000
     Philip G. Trubey (Director)                           $  156,250     $  156,250
     Notes Payable - AccuPoll                              $   15,000     $   15,000

Convertible Debt
     2003 Convertible Debentures                           $3,426,246     $3,426,246
     C&S Consolidated Services Hong Kong                   $  308,000     $  308,000
     Lemanik SA                                            $   75,000     $   75,000
     Philip G. Trubey (Director)                           $  300,000     $  300,000

Consulting Agreements
     National Strategies Inc.                              $  125,175     $  125,175
     Antara Communications                                 $   27,596     $   27,596

Other
     Amarillo Economic Development Corporation             $  250,000     $  250,000

Total                                                      $5,256,318     $5,210,628     $   45,690
</TABLE>

      On February 1, 2003 we entered in to a consulting agreement with National
Strategies Inc. The agreement is for a term of 12 months, and automatically
renews for additional year periods at the end of each one-year term, in absence
of 30 days advance written notice of termination from one of the parties. Under
the agreement, National Strategies is required to advise, consult and assist us
with securing contracts for the sale or lease of our election equipment in the
United States. We initially agreed to pay National Strategies $7,500 for the
first six months and $10,000 for the remaining six months of the first 12-month
term of the contract. Additionally, we agreed to pay National Strategies a
success fee of 5% of the total gross income from contracts received from any
clients introduced to us by National Strategies. This success fee is paid from
contract revenue. To date the monthly cash retainer portion of the agreement
with National Strategies, including the related consultants described below, has
been paid out of funds raised from investors.

      On January 23, 2004, an Addendum to the February 1, 2003 agreement was
made, and the compensation paragraph was changed. Under the new compensation
arrangement, we agreed to pay National Strategies $5,000 per month for the next
12-month term of the agreement. Also, we agreed to issue National Strategies
300,000 warrants, with a term of 10 years, to purchase shares of our common
stock at an exercise price of $1.16 per share.

      On March 1, 2004, under the same original consulting agreement dated
February 1, 2003 with National Strategies, a second addendum was made and we
agreed to hire Powers & Crane for legislative services in the State of New York
and we agreed to pay Powers & Crane $7,000 per month, until the end of the
contract. Payments to Powers & Crane are included in National Strategies'
monthly invoice.

      Also on March 1, 2004, under the same original consulting agreement dated
February 1, 2003 with National Strategies, another addendum was made and we
agreed to hire Walkovich Associates for services in the State of Connecticut and
we agreed to pay Walkovich Associates $2,000 for three months. Payments to
Walkovich Associates are included in National Strategies' monthly invoice.


                                       30
<PAGE>

      On April 1, 2004, under the same original consulting agreement dated
February 1, 2003 with National Strategies, a fourth addendum was made and we
agreed to hire The Tetris Group for services in the State of Utah. We agreed to
pay The Tetris Group $3,000 per month until the end of the contract. Payments to
The Tetris Group are also included in National Strategies' monthly invoice.

      As of June 30, 2005, we paid National Strategies and its related
consultants a total amount of $363,729 under the February 1, 2003 agreement, as
amended. The outstanding balance at June 30, 2005 from National Strategies'
monthly invoice was $130,410.

      As of September 22, 2005, we have paid in full the amounts due the
Amarillo Economic Development Corporation under the Amarillo Grant included in
the above table.

Business Trends

      There are three business trends evident in the market today that are
material to our operations. The first is the delay in the procurement cycle
until after the November 2004 election. This trend was influenced by two
factors: 1) the delay in the distribution of the federal funds by the United
States Election Assistance Commission, and 2) the presidential election in
November 2004. The delay in the distribution of the federal funds was caused by
the delay in nominating and confirming the Election Assistance Commissioners
(originally scheduled to be completed by April 2003, but instead was completed
in December 2003), and the delay on the part of some states in meeting all the
requirements for the funds to be released by the Election Assistance Commission.
With the delay in funding until June 2004, less than five months before the
November 2004 election, the majority of counties decided not to risk making any
changes until after the November 2004 election. At a public meeting of the
Election Assistance Commission on April 26, 2005 the following status was
reported in regards to distribution of Federal Funds under HAVA: As of April 22,
2005, over $1.7 billion of the $2.3 billion in federal funds appropriated under
Title II of HAVA has been distributed to the states and the remaining $600
million is waiting for states to complete the HAVA state plan certification
process. This is in addition to the $650 million of the Title I funds
appropriated under HAVA that was distributed in 2003.

      The second business trend is the growing momentum of the voter verified
paper ballot movement. As of August 31, 2005, twenty-six states (Alaska,
Arkansas, California, Colorado, Connecticut, Hawaii, Idaho, Illinois, Maine,
Michigan, Minnesota, Missouri, Montana, New Hampshire, New Jersey, New Mexico,
New York, Nevada, North Carolina, Ohio, Oregon, South Dakota, Utah, Vermont,
Washington and West Virginia) have passed legislation requiring a voter verified
paper ballot. Another thirteen states (Arizona, Florida, Georgia, Indiana, Iowa,
Kansas, Maryland, Massachusetts, South Carolina, Tennessee, Texas, Virginia and
Wisconsin) are actively considering legislation that would make it a
requirement. In addition, federal legislation has been introduced in the U.S.
House and U.S. Senate to amend HAVA to expressly require a voter verified paper
audit trail.

      The third business trend is the growing list of states that are requiring
direct recording electronic voting systems to be qualified under the 2002 FEC
voting system standards. This requirement is primarily focused in states where
electronic voting systems have not been previously used (e.g., Illinois,
Missouri, Iowa, Kentucky and North Carolina). However, the list of states
requiring qualification under the 2002 FEC voting system standards is growing
due to the interpretation of Section 301(a)(5) of HAVA that requires voting
systems meet the error rate standards specified in the 2002 FEC voting system
standards. Previously, some states only required a voting system to be qualified
under the now out-of-date 1990 FEC Voting System Standards. As per Section
301(a)(6)(d), the use of any voting system on and after January 1, 2006 that
does not meet the error rate standards specified in Section 301(a)(5) of HAVA
could be a violation of federal law.

      Overall the net impact of these trends on us is positive. We already have
a direct recording electronic voting system with a voter verified paper audit
trail qualified under the 2002 FEC voting system standards. This places us in a
position that as of August 30, 2005, we our one of only two vendors with a
direct recording electronic voting system that is qualified under the 2002 FEC
voting system standards with a voter verified paper audit trail.. This is
especially important in states like Missouri, Iowa and Illinois that have not
previously authorized direct recording electronic voting systems to be used in
the state, but must at a minimum meet the accessibility requirements under HAVA
(i.e., one direct recording electronic voting machine per polling place).


                                       31
<PAGE>

Critical Accounting Policies

      The preparation of financial statements and related disclosures in
conformity with accounting principles generally accepted in the United States of
America ("GAAP") requires management to make judgments, assumptions and
estimates that affect the amounts reported in our consolidated financial
statements and the accompanying notes. The amount of assets and liabilities
reported on our balance sheet and the amount of revenues and expenses reported
for each of our fiscal periods are affected by estimates and assumptions, which
are used for, but not limited to, the accounting for equity instruments subject
to rescission, software development costs, estimated allowance for doubtful
accounts, the realizability of our investments in affiliated companies and the
valuation of deferred tax assets. Actual results could differ from these
estimates. The following critical accounting policies are significantly affected
by judgments, assumptions and estimates used in the preparation of the financial
statements:

Capitalized Software Development Costs

      In accordance with Statement of Financial Accounting Standards ("SFAS")
No. 86 "Accounting for the Costs of Computer Software to be Sold Leased or
Otherwise Marketed," we capitalize certain costs related to the development of
new software products or the enhancement of existing software products for sale
or license. These costs are capitalized from the point in time that
technological feasibility has been established, as evidenced by a working model
or detailed working program design to the point in time that the product is
available for general release to customers. Capitalized development costs are
amortized on a straight-line basis over the estimated economic lives of the
products, beginning with the general product release to customers. Research and
development costs incurred prior to establishing technological feasibility and
costs incurred subsequent to general product release to customers are charged to
expense as incurred. We periodically evaluate whether events or circumstances
have occurred that indicate that the remaining useful lives of the capitalized
software development costs should be revised or that the remaining balance of
such assets may not be recoverable.

      The development of our voting system first met technological feasibility
requirements in fiscal 2003. At that time we commenced capitalization of
development costs to meet federal 1990 voting system standards. Our system was
qualified as meeting certain 1990 FEC voting system standards in late March 2004
at which time we ceased capitalization of costs and began amortizing them. The
costs of developing our voting system to 1990 FEC voting system standards
totaling approximately $2,720,000 are fully amortized at June 30, 2005. Upon
obtaining the 1990 voting system standards we immediately began to further
develop our voting system to meet certain 2002 FEC voting system standards, for
which we received qualification in May 2005. We began amortizing the capitalized
development costs incurred to meet the 2002 FEC voting system standards of
approximately $1,053,000 in June 2005. The Company periodically evaluates
whether events or circumstances have occurred that indicate that the remaining
useful lives of the capitalized software development costs should be revised or
that the remaining balance of such assets may not be recoverable. In July 2005,
the Company re-evaluated the estimated life of its software as a result of the
change to 2002 voting standards. Consequently, the estimated useful life was
reduced to one year.

Debt and Equity Transactions

      The Company issues debt with warrants and equity instruments to third
parties and non-employees. These issuances are recorded based the fair value of
these instruments. Warrants and equity instruments require valuation using the
Black Scholes model and other techniques, as applicable, and consideration of
various assumptions including but not limited to the volatility of our stock,
risk free rates and the expected lives of these equity instruments.

      Debt and equity issuances may have features which allow the holder to
convert at beneficial conversion terms, which are then measured using similar
valuation techniques and amortized to interest expense in the case of debt or
recorded as dividends in the casse of preferred stock instruments.

Equity Instruments Subject to Rescission

      We account for common stock and other equity instruments that may be
subject to rescission claims at estimated fair value (based on applicable
measurement criteria) in accordance with the Securities and Exchange
Commission's promulgated accounting rules and interpretive releases. Under the
Securities and Exchange Commission's interpretation of GAAP, reporting such
claims outside of stockholders' equity is required, regardless of how remote the
redemption event may be.


                                       32
<PAGE>

      We may be subject to possible claims for rescission with respect to the
sale or other issuances of certain common stock, options and warrants. The
consolidated balance sheets included elsewhere herein reflect an adjustment for
the matter described below.

      Approximately 1.2 million shares of our common stock, options and warrants
that were issued or granted in the United States without registration or
qualification under federal or state securities laws during 2003 and 2004 (using
a two-year lookback) may be subject to rescission. The fair value of these
securities was estimated based on a combination of (a) the selling price of the
common stock on the dates sold, (b) the price per the agreement for stock issued
in conversion of debt, (c) the fair value of the stock options and warrants on
their grant dates, and (d) an independent valuation. Based in part on advice of
counsel, the fair value of these options and warrants was estimated using the
Black-Scholes option-pricing model. Based on these measurement criteria, our
potential liability directly associated with the aforementioned securities
transactions is estimated to approximate $1.4 million (including interest at 10%
per annum) at June 30, 2005 plus legal fees and any fines or penalties that
might be assessed by regulatory agencies.

      The potential liability discussed above does not include options to
purchase a total of 3.6 million shares of common stock issued to our president
and to our chief executive officer because these two individuals are also
principal stockholders; acting together, they have the ability to control us.
The grant date estimated fair value of the options described in this paragraph
(excluding interest) approximates $1.4 million.

      Management is unable to determine at this time whether any claim for
rescission may be filed against us; however, there can be no assurance that such
claims will not be asserted. In addition, regulatory agencies could launch a
formal investigation and/or institute an enforcement proceeding against us.

Stock-Based Compensation

      We account for stock-based compensation issued to employees using the
intrinsic value based method as prescribed by Accounting Principles Board
Opinion No. 25 (APB 25), "Accounting for Stock issued to Employees." Under the
intrinsic value based method, compensation expense is the excess, if any, of the
fair value of the stock at the grant date or other measurement date over the
amount an employee must pay to acquire the stock. Compensation expense, if any,
is recognized over the applicable service period, which is usually the vesting
period.

      SFAS 123, "Accounting for Stock-Based Compensation," if fully adopted,
changes the method of accounting for employee stock-based compensation plans to
the fair value based method. For stock options and warrants, fair value is
estimated using an option pricing model that takes into account the stock price
at the grant date, the exercise price, the expected life of the option or
warrant, stock volatility and the annual rate of quarterly dividends.
Compensation expense, if any, is recognized over the applicable service period,
which is usually the vesting period.

      The adoption of the accounting methodology of SFAS 123 was optional and we
elected to continue accounting for stock-based compensation issued to employees
using APB 25; however, pro forma disclosures, as if we adopted the cost
recognition requirement under SFAS 123, are presented. For stock-based
compensation issued to non-employees, we use the fair value method of accounting
under the provisions of SFAS 123 and EITF 6-18, as applicable.

      Financial Accounting Standards Board (FASB) Interpretation No. 44 (FIN
44), "Accounting for Certain Transactions Involving Stock Compensation, an
Interpretation of APB 25" clarifies the application of APB 25 for (a) the
definition of employee for purposes of applying APB 25, (b) the criteria for
determining whether a plan qualifies as a non compensatory plan, (c) the
accounting consequence for various modifications to the terms of a previously
fixed stock option or award and (d) the accounting for an exchange of stock
compensation awards in a business combination. We believe that we account for
transactions involving stock compensation in accordance with FIN 44.

      SFAS 148, "Accounting for Stock-Based Compensation - Transition and
Disclosure, an amendment of SFAS No. 123," provides 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 SFAS 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.


                                       33
<PAGE>

Deferred Taxes and Valuation Allowance

      Deferred income taxes reflect the estimated tax effect of temporary
differences between the carrying amounts of assets and liabilities for financial
reporting purposes and the amounts reported for income tax purposes. The Company
records a valuation allowance for deferred tax assets when, based on
management's best estimate of taxable income (if any) in the foreseeable future,
it is more likely than not that some portion of the deferred tax assets may not
be realized.

Financial Reporting Related to Web Tools International, Inc.

      In January 2003, the FASB issued FIN No. 46, "Consolidation of Variable
Interest Entities, an Interpretation of ARB 51". The primary objectives of FIN
No. 46 are to provide guidance on the identification of entities for which
control is achieved through means other than voting rights (variable interest
entities), and how to determine when and which business enterprise should
consolidate the variable interest entity. This new model for consolidation
applies to an entity for which either: (a) the equity investors do not have a
controlling financial interest; or (b) the equity investment at risk is
insufficient to finance that entity's activities without receiving additional
subordinated financial support from other parties. In addition, FIN No. 46
requires that both the primary beneficiary and all other enterprises with a
significant variable interest in a variable interest entity make additional
disclosures. As amended in December 2003, the effective dates of FIN No. 46 for
us are as follows: (a) for interests in special-purpose entities: the first
period ended after December 15, 2003; and (b) for all other types of variable
interest entities: the first period ended after March 15, 2004.

      As disclosed in the notes to our accompanying consolidated financial
statements, we are associated with Web Tools International, Inc. through common
ownership; in addition, we were virtually Web Tools International's only
customer for software development services in fiscal 2003. Based on these and
other factors, we determined that (1) Web Tools International is a variable
interest entity and (2) we were its primary beneficiary as of January 1, 2004.
Therefore, effective January 1, 2004, the accounts of Web Tools International
were consolidated with those of AccuPoll. For reasons explained in the notes to
our June 30, 2005 consolidated financial statements, the accounts of Web Tools
International were de-consolidated effective April 1, 2004.

Recent Accounting Pronouncements

      We continue to assess the effects of recently issued accounting standards.
The impact of all recently adopted and issued accounting standards has been
disclosed in Note 1 of the accompanying annual consolidated financial
statements.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

      Changes in United States interest rates would affect the interest earned
on our cash and cash equivalents. Based on our overall interest rate exposure at
June 30, 2005, a near-term change in interest rates, based on historical
movements, would not materially affect the fair value of interest rate sensitive
instruments. Our debt instruments have fixed interest rates and terms and,
therefore, a significant change in interest rates would not have a material
adverse effect on our financial position or results of operations.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

      The financial information required by this Item is set forth beginning at
page F-1 of this annual report on Form 10-K and is incorporated herein by
reference..


                                       34
<PAGE>

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

      There has been no change in accountants nor any disagreements with
accountants on any matter of accounting principles or practices or financial
statement disclosure required to be reported under this Item.

ITEM 9A. CONTROLS AND PROCEDURES

(a)   Disclosure controls and procedures

      The Company maintains disclosure controls and procedures (as defined in
Rule 13a-15(e) and Rule 15d-15(e) under the Securities Exchange Act of 1934, as
amended)that are designed to ensure that information required to be disclosed in
the Company's Exchange Act reports is recorded, processed, summarized and
reported within the deadlines specified in the Securities and Exchange
Commission's rules and forms and that such information is accumulated and
communicated to the Company's management, including its Chief Executive Officer
and Chief Financial Officer, as appropriate, to allow for timely decisions
regarding required disclosure. In designing and evaluating the internal controls
over financial reporting, management recognizes that any controls and
procedures, no matter how well designed and operated, can provide only
reasonable assurance of achieving the desired control objectives, and management
is required to apply its judgment in evaluating the cost-benefit relationship of
possible controls and procedures.

      As of the end of the period covered by this Annual Report on Form 10-K,
the Company's management carried out an evaluation, under the supervision and
with the participation of its Chief Executive Officer and Chief Financial
Officer, of the Company's disclosure controls and procedures (as defined in Rule
13a-15(e) and Rule 15d-15(e) of the Exchange Act). Based on the evaluation, the
Company's Chief Executive Officer and Chief Financial Officer concluded that the
Company's disclosure controls and procedures were not effective in ensuring that
information required to be disclosed by the Company in the reports it files
under the Exchange Act is: (i) accumulated and communicated to the Company's
management, including its Chief Executive Officer and Chief Financial Officer,
as appropriate to allow timely decisions regarding required disclosure; and (ii)
recorded, processed summarized and reported within time periods specified in SEC
rules and forms.

(b)   Internal Control Over Financial Reporting

      The Company prepared and is responsible for the consolidated financial
statements that appear in this Annual Report on Form 10-K. These consolidated
financial statements have been prepared in conformity with accounting principles
generally accepted in the United States of America (GAAP), and therefore,
include amounts based on informed judgments and estimates. The Company is also
responsible for the preparation of other financial information that is included
in this Form 10-K.

      The Company's management is responsible for establishing and maintaining
adequate internal control over financial reporting as defined in Rules 13a-15(f)
and 15d-15(f) under the Securities Exchange Act of 1934. The Company's internal
control over financial reporting is designed to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of
consolidated financial statements for external purposes in accordance with GAAP.
The Company's internal control over financial reporting includes those policies
and procedures that: (i) pertain to the maintenance of records that, in
reasonable detail, accurately and fairly reflect the transactions and
dispositions of the assets of the Company; (ii) provide reasonable assurance
that transactions are recorded as necessary to permit preparation of
consolidated financial statements in accordance with GAAP, and that receipts and
expenditures of the Company are being made only in accordance with
authorizations of management and directors of the Company; and (iii) provide
reasonable assurance regarding prevention or timely detection of unauthorized
acquisition, use or disposition of the Company's assets that could have a
material effect on the consolidated financial statements.

      Because of its inherent limitations, internal control over financial
reporting may not prevent or detect misstatements. Also, projections of any
evaluation of effectiveness to future periods are subject to the risk that
controls may become inadequate because of changes in conditions, or that the
degree of compliance with the policies or procedures may deteriorate.


                                       35
<PAGE>

      The Company, under the supervision and with the participation of its Chief
Executive Officer and Chief Financial Officer, performed procedures to assess
the effectiveness of the Company's internal controls over financial reporting.
In completing these procedures and assessment management used the criteria
established in "Internal Control--Integrated Framework" issued by the Committee
of Sponsoring Organizations of the Treadway Commission (COSO). Based on these
procedures, the Company's Chief Executive Officer and Chief Financial Officer
concluded that the Company had material weaknesses, as described in the
Management Report on Internal Controls over Financial Reporting at page F-2 on
this Form 10-K and that the Company's internal controls over financial reporting
were not effective as of June 30, 2005.

(c)   Attestation Report of the Registered Public Accounting Firm

      Management's report on internal controls over financial reporting and the
related attestation report of Squar, Milner, Reehl and Williamson, LLP are
included in Item 14, pages F-2 and F-5 of this Report, respectively.

(d)   Changes in Internal Control Over Financial Reporting

      There has been no change in the Company's internal controls over financial
reporting during the quarter ended June 30, 2005 that has materially affected,
or is reasonable likely to materially affect, the Company's internal controls
over financial reporting.

ITEM 9B. OTHER INFORMATION

Entry into a Material Definitive Agreement; Creation of a Direct Financial
Obligation; Triggering Events That Accelerate or Increase a Direct Financial
Obligation

March 2005 Amendment and General Release

      On March 1, 2005, we entered into agreements with Palisades Capital, LLC,
Hyde Investments, LLC and Livingston Investments, Ltd. (the "Debenture Holders")
extending the maturity date to June 30, 2005 for the following debentures held
by those entities: (1) a debenture in the principal amount of up to $1.25
million issued June 20, 2003 and held by Palisades Capital, LLC; (2) a debenture
in the principal amount of up to $2.5 million issued November 20, 2003 and held
by Hyde Investments, LLC; and (3) a debenture in the principal amount of up to
$2.5 million issued November 20, 2003 and held by Livingston Investments, Ltd.
As consideration for the extensions on the maturity date of the debentures, we
agreed to increase the amount owing on each of the debentures by 10% and
accordingly pay $105,728, $122,326 and $95,604, respectively, to Palisades
Capital, LLC, Hyde Investments, LLC and Livingston Investments, Ltd. The amounts
outstanding on each the debentures at June 30, 2005 was $917,650, $1,345,587 and
$1,163,008, respectively, for debentures held by Palisades Capital, LLC, Hyde
Investments, LLC and Livingston Investments, Ltd. As described below, on
September 9, 2005, the Debenture Holders converted $2,242,000 of these
convertible debentures and forgave the remaining outstanding amount of such
debentures.


                                       36
<PAGE>

      In connection with the agreements extending the maturity date of the above
debentures, on March 1, 2005, we entered into a general release and settlement
agreement with GCH Capital, Ltd. and the Debenture Holders. We thereby released
all of such entities from all actions, causes of action, claims, costs, damages,
debts, demands, expenses, liabilities, losses and obligations of every nature,
which the entities has at any time owned or held or may at any time thereafter
own or hold for any reason. As described above, we further agreed that the
debentures held by the Debenture Holders would each be increased by 10% and
extended to June 30, 2005. Pursuant to the terms of the general release and
settlement agreement, Palisades Capital, LLC assigned to AccuPoll, Inc. a
certain warrant dated October 29, 2003 to purchase up to 5 million shares of our
common stock.

September 2005 Conversion and Settlement Agreement

      Effective September 9, 2005, in connection with the execution of a
Conversion and Settlement Agreement With Mutual Releases between AccuPoll
Holding Corp., AccuPoll, Inc., Dennis Vadura, Corporate Legal Services LLP, the
Debenture Holders and GCH Capital, Ltd., the Debenture Holders exercised their
conversion rights pursuant to the existing terms of the debentures on an
outstanding principal amount of $2,242,000 at a conversion price of $0.038 per
share for a total of 59 million shares of common stock to be issued in
installments through June 2006. All remaining principal and accrued interest
totaling approximately $1,300,000 was forgiven and an unexercised warrant for
6,400,000 common shares issued in June 2003 to GCH Capital, Ltd. was canceled.

      In connection with the Conversion and Settlement Agreement With Mutual
Releases, on September 26, 2005 we entered into a Registration Rights Agreement
pursuant to which we agreed to register the resale of 25 million shares of
common stock beneficially owned by the Debenture Holders. We agreed to prepare
and file such registration statement within 60 days after the effectiveness of
the current registration statement on file with the Securities and Exchange
Commission, or within 60 days following the abandonment or termination of such
registration statement, or within 180 days following September 26, 2005,
whichever date is earliest.

2004 and 2005 Incentive Stock Plans

      On September 22, 2005, our Board of Directors approved our 2005 Incentive
Stock Plan and authorized 60 million shares of common stock for issuance of
stock awards and stock options thereunder. The 2005 Incentive Stock Plan is
administered by our Board of Directors. Under the plan, options may be granted
which are intended to qualify as Incentive Stock Options under Section 422 of
the Internal Revenue Code of 1986, as amended or which are not intended to
qualify as Incentive Stock Options thereunder. The 2005 Incentive Stock Plan and
the right of participants to make purchases thereunder are intended to qualify
as an "employee stock purchase plan" under Section 423 of the Internal Revenue
Code. The primary purpose of the 2005 Incentive Stock Plan is to attract and
retain highly qualified officers, directors, key employees, and other persons,
and to motivate such officers, directors, key employees, and other persons to
serve our business, by providing them an opportunity to acquire or increase a
direct proprietary interest in our operations and future success.

      On October 18, 2004, our Board of Directors approved a 2004 Incentive
Stock Plan and authorized 12,500,000 shares of common stock for issuance of
stock awards and stock options thereunder. On September 22, 2005, our Board of
Directors approved the termination of the 2004 Incentive Stock Plan. As of
September 22, 2005, no securities were granted under the 2004 Incentive Stock
Plan and it had not been approved by our shareholders.

Non-Reliance on Previously Issued Financial Statements

      During August 2005, in connection with the preparation of this annual
report on Form 10-K for the fiscal year ended June 30, 2005, our chief executive
officer and other authorized members of our management and consulting staff
identified the below adjustments required to our financial statements for the
fiscal quarters ended September 30, 2004, December 31, 2004 and March 31, 2005.
Due to such adjustments, our financial statements for the periods ended
September 30, 2004, December 31, 2004 and March 31, 2005 should no longer be
relied upon. Among other things described below, our financial statements for
the quarter ended March 31, 2005 did not reflect the above-described March 2005
Amendments and Settlement Agreement with GCH Capital, Ltd. and the Debenture
Holders.

      In the fourth quarter of fiscal year 2005, we recorded adjustments that
affect the net loss reported in previous quarters. The effect of these
adjustments on the first three quarters of fiscal 2005 is summarized below:


                                       37
<PAGE>

<TABLE>
<CAPTION>
                                                                 Quarter Ended
                                                  ---------------------------------------------
                                                    9/30/04          12/31/04         3/31/05
                                                  -----------      -----------      -----------
<S>                                               <C>              <C>              <C>
Net loss, as previously reported                  $(3,687,072)     $(2,100,705)     $(2,026,401)
  Fair value of warrants granted for services         794,190         (693,700)        (639,967)
  Interest expense including BCFs                    (141,206)        (148,349)        (251,419)
  Capitalized R&D costs                              (132,255)              --               --
  Legal fees expenses                                      --           55,025          204,349
  Fund raising expenses                               381,517               --           66,035
                                                  -----------      -----------      -----------
Net loss, as restated                             $(2,784,826)     $(2,887,729)     $(2,647,403)
                                                  ===========      ===========      ===========
</TABLE>

      In the first fiscal quarter, we recorded professional fees expense to
recognize the fiscal 2005 amortization of the fair value of warrants issued for
services in fiscal 2004. We expensed an amount greater than was appropriate in
the first fiscal quarter and no expense was recorded for this fair value
amortization in the second or third fiscal quarters. An adjustment was recorded
in the fourth fiscal quarter to expense the proper amortization for the fiscal
year.

      During the course of the fiscal year 2005, we borrowed under convertible
debenture agreements and recorded the beneficial conversion features as a debt
discount. The underlying borrowings occurred in each of the first three fiscal
quarters; however, the beneficial conversion feature ("BCF") was not recorded in
our accounts until the fourth fiscal quarter.

      In the first fiscal quarter, we capitalized certain costs more
appropriately classified as research and development. An adjustment was made in
the fourth fiscal quarter to expense these costs.

      In the second and third fiscal quarters, we issued shares of common stock
for legal services and recorded expense for the fair market value of the shares
issued. The expense recorded exceeded amounts due for services provided through
March 31, 2005.

      During the first and third fiscal quarters, we expensed costs associated
with fund raising activities rather than offsetting the proceeds of funds
raised. An adjustment was recorded in the fourth fiscal quarter to reduce
expense and additional paid-in capital.

      Our chief executive officer and other authorized members of our management
and consulting staff has discussed the above matters with our independent
registered public accounting firm.

                                    PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

      Our current directors and executive officers are as follows:

Name (1) (2)           Age   Position
----                   ---   --------
William E. Nixon       45    President, Chief Executive Officer and Director
Dennis Vadura          43    Chief Technology Officer and Chairman of the Board
Frank J. Wiebe         44    Chief Operating Officer, Secretary, Treasurer and
                             Director
Diana Dimadi           36    Acting Chief Financial Officer and Principal
                             Accounting Officer
Chester Noblett, Jr.   60    Executive Vice President, Sales
Jo-Ann Zakielarz       52    Vice President, Government Affairs/Global Alliances
Andreea M. Porcelli    36    Director
Philip G. Trubey       41    Director

(1)   We do not have a separately designated executive committee, nominating
      committee or audit committee of the Board of Directors.

(2)   Our executive officers hold office until their successors are elected and
      qualified, or until their death, resignation or removal.


                                       38
<PAGE>

      The background and principal occupations of each director and executive
officer are as follows:

      Mr. Nixon was appointed President, Chief Executive Officer and a director
on July 1, 2005. From 2001 to 2004, Mr. Nixon served as the President of Senco
Sensors, Inc., a Canadian designer, marketer and manufacturer of safety
products. Additionally, from 2003-2004 Mr. Nixon served as Chief Executive
Officer of Senco Sensors, Inc. From 1988 to 2001, Mr. Nixon served in various
positions, including Controller of Peer Review Analysis, Vice President of
Finance and Administration, Chief Financial Officer and Executive Vice
President, of CORE, INC., a Nasdaq company that provides healthcare management
services. Mr. Nixon served as Chief Financial Officer of CORE, INC. from 1993 to
2001 and as Executive Vice President of CORE, INC. from 1994 to 2001.

      Mr. Vadura was appointed Chief Technology Officer and Chairman of the
Board on July 1, 2005. Mr. Vadura was our Chief Executive Officer from May 20,
2002 until July 1, 2005. Mr. Vadura also has been one of our directors since May
20, 2002. From April 2000 to the present, Mr. Vadura has been the Chief
Executive Officer of Web Tools International, Inc. From April 1999 to April
2000, Mr. Vadura was a senior technical architect employed by Electronic Data
Systems. From 1996 to April 1999, Mr. Vadura was employed by companies acquired
by Electronic Data Systems in similar positions.

      Mr. Wiebe was appointed Chief Operating Officer on July 1, 2005. Mr. Wiebe
was our President from May 20, 2002 until July 1, 2005. From March 31, 2005
until April 6, 2005, Mr. Wiebe served as our interim Acting Chief Financial
Officer. Mr. Wiebe has also been one of our directors and our Secretary and
Treasurer since May 20, 2002. From May 2000 to the present, Mr. Wiebe has been
the Vice President of Web Tools International, Inc. From November 1992 to May
2000, Mr. Wiebe was a Strategic Program Manager with Electronic Data Systems'
E.solutions business unit.

      Ms. Dimadi was appointed Acting Chief Financial Officer and Principal
Accounting Officer on April 6, 2005. Ms. Dimadi was employed as the Company's
Corporate Controller since April 2004. Ms. Dimadi has also worked as a hotel
accountant for Woolley's Petite Suites, LLC since April 2001. From June 2000 to
April 2004, Ms. Dimadi was Controller for New Century Companies, a public
company engaged in manufacturing tools machines. From September 1998 to June
2000, Ms. Dimadi was A/R Supervisor for El Monte RV, a private company engaged
in renting and selling recreational vehicles.

      Mr. Noblett has been Vice President of Sales since July 2002 and is
responsible for our sales organization. He was Chief Executive Officer for eSAT
from June 1999 until December 2001. From January1997 to February 1998, Mr.
Noblett served as interim Chief Financial Officer of eSAT and subsequently
served as Chief Operating Officer as eSAT until June 1999.

      Ms. Zakielarz was hired as Vice President of Government Relations and
Global Alliances in January 2003. Ms. Zakielarz was with Unisys Corp. for 13
years where she developed, promoted and implemented technology solutions for
state and local election officials. Her experience ranged from selling and
consulting on the implementation of precinct voting systems to
statewide-centralized voter registration systems.

      Ms. Andreea M. Porcelli became a director on May 20, 2002. From August 2,
2002 to the present Ms. Porcelli has been an independent consultant with
Continental Advisors S.A. (Lux.). From October 2000 to August 2002, she was a
registered representative of Schneider Securities, Inc. From May 2000 to October
2000, she was a registered representative of Berry-Shino Securities, Inc. From
March 1999 to May 2000, Ms. Porcelli was a registered representative of Paulson
Investment Company, Inc.

      Mr. Philip G. Trubey was appointed to our Board of Directors on August 27,
2004. Mr. Trubey was the CEO of Merchandising Avenue, an e-commerce
infrastructure startup from 1999 to 2001. In 1994, Mr. Trubey founded and
operated Websense, Inc., an enterprise software company, until 1999.

Family Relationships

      There are no family relationships between or among our directors,
executive officers or persons nominated or charged by us to become directors or
executive officers.


                                       39
<PAGE>

Involvement in Legal Proceedings

      For a description of the involvement of our executive officers and
directors in certain legal proceedings during the past five years, please refer
to Item 3 of this Form 10-K.

      Based solely in reliance on representations made by our officers and
directors, during the past five years, none of the following occurred with
respect to such persons: (1) no petition under the federal bankruptcy laws or
any state insolvency law was filed by or against, or a receiver, fiscal agent or
similar officer was appointed by a court for the business or property of such
persons; (2) other than the Z prompt bankruptcy described in Item 3 of this Form
10-K, there has been no petition under the federal bankruptcy laws or any state
insolvency law filed by or against, or a receiver, fiscal agent or similar
officer appointed by a court for the business or property of any partnership in
which such persons were a general partner at or within two years before the time
of such filing, or any corporation or business association of which such persons
were executive officers at or within two years before the time of such filing;
(3) no such persons were convicted in a criminal proceeding or are a named
subject of a pending criminal proceeding (excluding traffic violations and other
minor offenses); (4) no such persons were the subject of any order, judgment or
decree, not subsequently reversed, suspended or vacated, of any court of any
competent jurisdiction, permanently or temporarily enjoining, barring,
suspending or otherwise limiting their involvement in any type of business
practice, or in securities or banking or other financial institution activities;
and (5) no such persons were found by a court of competent jurisdiction in a
civil action by the SEC or by the Commodity Futures Trading Commission to have
violated any Federal or state securities or commodities law, and the judgment
has not been reversed, suspended or vacated.

AUDIT COMMITTEE FINANCIAL EXPERT

      We do not have an audit committee financial expert (as defined in Item 401
of Regulation S-K) serving on our Board of Directors. We have not yet employed
an audit committee financial expert on our Board due to the inability to attract
such a person. Within the past fiscal year, we obtained Directors and Officers
insurance which we expect will help to attract such a member to our Board. In
addition, our financial position and the pending litigation against us has made
it difficult to place such an individual on our Board of Directors.

CODE OF ETHICS

      We have adopted a Code of Ethics and Business Conduct that applies to all
of our officers, directors and employees. The Code of Ethics was filed as
Exhibit 14.1 to our annual report for the fiscal year ended June 30, 2004 on
Form 10-K filed with the Securities and Exchange Commission on September 28,
2004. Upon request, we will provide to any person without charge a copy of our
Code of Ethics. Any such request should be made to Attn: Frank Wiebe, AccuPoll
Holding Corp., 15101 Red Hill Ave # 220, Tustin, CA 92780. Our telephone number
is (949) 200-4000. We are in the process of building a section of our website at
www.accupoll.com where our Code of Ethics will be available to investors.

COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT

      Section 16(a) of the Securities Exchange Act of 1934 requires our
directors and executive officers and persons who beneficially own more than ten
percent of a registered class of our equity securities to file with the SEC
initial reports of ownership and reports of change in ownership of common stock
and other equity securities of our company. Officers, directors and greater than
ten percent stockholders are required by SEC regulations to furnish us with
copies of all Section 16(a) forms they file. Based solely on the review of
copies of such reports furnished to us, we believe that during the fiscal year
ended June 30, 2005, our executive officers, directors and all persons who own
more than ten percent of a registered class of our equity securities complied
with all Section 16(a) filing requirements, except: (1) Ms. Dimadi did not file
a Form 3; (2) Mr. Nixon filed his Form 3 late; (3) Mr. Hewitt, our former Chief
Financial Officer, did not file a Form 4 indicating his resignation as Chief
Financial Officer, reported four transactions late and filed two Form 4s late;
(4) Mr. Trubey filed his Form 3 late; (5) Mr. Vadura did not file a Form 4
indicating issuance of options; and (6) Mr. Weibe did not file a Form 4
indicating issuance of options.


                                       40
<PAGE>

ITEM 11. EXECUTIVE COMPENSATION

      The following table sets forth information concerning the total
compensation that we have paid or that has accrued on behalf of our chief
executive officer and other executive officers with annual compensation
exceeding $100,000 (collectively, the "named executive officers") during the
fiscal years ending June 30, 2005, 2004 and 2003.

                           Summary Compensation Table

<TABLE>
<CAPTION>
                                                                                            Long-Term
                                                                                          Compensation
                                                                              --------------------------------------
                                                 Annual Compensation                    Awards             Payouts
                                          ----------------------------------- --------------------------- ----------
                                                                                            Securities               All
                                                               Other          Restricted    Under-                   Other
                                                               Annual         Stock         lying         LTIP       Compen-
Name and                                  Salary      Bonus    Compen-        Award(s)      Options/      Payouts    sation
Principal Position               Year     ($)         ($)      sation ($)     ($)           SARs (#)      ($)        ($)
-------------------------------------------------------------------------------------------------------------------------------
<S>                              <C>     <C>           <C>          <C>        <C>           <C>            <C>       <C>
William E. Nixon,
  Chief Executive Officer(1)     2005         -0-     -0-          -0-           -0-               -0-      -0-       -0-

Frank Wiebe,                     2005    $139,150     -0-          -0-           -0-               -0-      -0-       -0-
  Chief Operating Officer        2004    $126,500     -0-          -0-           -0-               -0-      -0-       -0-
                                 2003    $115,000     -0-          -0-           -0-         1,200,000      -0-       -0-

Dennis Vadura,                   2005    $139,150     -0-          -0-           -0-               -0-      -0-       -0-
  Chief Technology Officer       2004    $126,500     -0-          -0-           -0-               -0-      -0-       -0-
                                 2003    $115,000     -0-          -0-           -0-         2,400,000      -0-       -0-

Chester Noblett, Jr.             2005    $105,000     -0-          -0-         $71,925             -0-      -0-       -0-
  Executive Vice President       2004    $102,000     -0-          -0-           -0-               -0-      -0-       -0-
                                 2003    $  82,731    -0-          -0-           -0-           500,000      -0-       -0-
</TABLE>

(1)   Mr. Nixon was appointed Chief Executive Officer on July 1, 2005. Prior to
      July 1, 2005, Mr. Vadura was our Chief Executive Officer.

-     Personal benefits received by the named executive officers are valued
      below the levels which would otherwise require disclosure under the rules
      of the U.S. Securities and Exchange Commission.

-     We do not currently provide any contingent or deferred forms of
      compensation arrangements, annuities, pension or retirement benefits to
      our directors, officers or employees.

Options Grants

      We made no grants of stock options during fiscal years ended June 30, 2005
and 2004 to any of the named executive officers.

Option Exercises in Last Fiscal Year

      None of the named executive officers exercised any stock options during
the fiscal years ended June 30, 2005, 2004 and 2003.

Executive Employment Agreements

      On July 1, 2005, we entered into an employment agreement with William E.
Nixon, as our President and Chief Executive Officer. The employment agreement
has a two-year term and provides for an annual base salary of $155,000. If we
enter into contracts in the aggregate, for the sale or lease of our voting
systems exceeding a contract value of $10 million, Mr. Nixon's annual base
salary will increase to $225,000. The agreement also provides that Mr. Nixon is
entitled to participate in our pension, bonus, life insurance and other benefit
plans in effect from time to time. In addition, Mr. Nixon is entitled to
participate in our management stock incentive plan, from which we agreed to
immediately grant Mr. Nixon 20 million incentive stock options. On September 22,
2005, the Company's Board of Directors approved this grant. Bonus compensation,
if any, is to be determined by the Board of Directors or the Compensation
Committee of the Board of Directors, but cannot exceed 100% of Mr. Nixon's then
applicable annual salary. Under the agreement, if Mr. Nixon voluntarily resigns
or is terminated with cause (as defined in the agreement), he will only be
entitled to receive his compensation through the date of termination. If Mr.
Nixon's employment is terminated by him for good reason (as defined in the
agreement) or by us without cause, he will be entitled to a lump-sum severance
payment in an amount equal to his then current annual salary and we will be
required to provide all of his benefits for a twelve month period. If Mr. Nixon
is permanently disabled during the employment term, we will pay him his then
current annual salary and provide all benefits through the remainder of the
calendar year and a three-month period thereafter. If Mr. Nixon dies during the
employment term, we will pay his then current annual salary through the calendar
month in which such death occurs.


                                       41
<PAGE>

      On July 1, 2005, we entered into an employment agreement with Mr. Vadura
as our Chief Technology Officer and an employment agreement with Mr. Wiebe as
our Chief Operating Officer. The July 1, 2005 employment agreements replace Mr.
Vadura's and Mr. Wiebe's employment agreements dated May 20, 2002. The July 1,
2005 employment agreements have a two-year term and provide for an annual base
salary of $155,000. If we enter into contracts in the aggregate, for the sale or
lease of our voting systems exceeding a contract value of $10 million, Mr.
Vadura's annual base salary will increase to $225,000 and Mr. Wiebe's annual
base salary will increase to $200,000. The agreements also provide that Messrs.
Vadura and Wiebe are entitled to participate in our pension, bonus, life
insurance and other benefit plans in effect from time to time. Bonus
compensation, if any, is to be determined by the Board of Directors or the
Compensation Committee of the Board of Directors, but cannot exceed 100% of Mr.
Vadura's and Mr. Wiebe's then applicable annual salaries. Under the agreements,
if Messrs. Vadura or Wiebe voluntarily resign or if they are terminated with
cause (as defined in the agreement), they will only be entitled to receive their
compensation through the date of termination. If Mr. Vadura's or Mr. Wiebe's
employment is terminated by them for good reason (as defined in the agreement)
or by us without cause, they will be entitled to a lump-sum severance payment in
an amount equal to their then current annual salary and we will be required to
provide all of their benefits for a twelve month period. If Messrs. Vadura or
Wiebe is permanently disabled during the employment term, we will pay them their
then current annual salary and provide all benefits through the remainder of the
calendar year and a three-month period thereafter. If Messrs. Vadura or Wiebe
dies during the employment term, we will pay their then current annual salary
through the calendar month in which such death occurs.

      On May 29, 2004, we renewed the agreement with Hewitt & Associates, Inc.
which provided for the services of Craig Hewitt as our consultant Chief
Financial Officer. This agreement provided for compensation of $7,500 per month.
On March 31, 2005, the parties mutually agreed to terminate the agreement and in
accordance therewith Mr. Hewitt resigned as our Chief Financial Officer.

      On April 15, 2004, we entered into an agreement to employ Ms. Dimadi as
our Corporate Controller. This agreement was amended on April 6, 2005 to add the
responsibilities as Acting Chief Financial Officer. Under the amended agreement,
Ms. Dimadi is entitled to an annual base salary of $75,000. The agreement may be
terminated by us with or without cause upon immediate notice to Ms. Dimadi. Upon
termination, we will have no future financial obligations other than to fulfill
what compensation has been earned by Ms. Dimadi up to the date of termination.

      On May 20, 2002, we entered into employment agreements with Dennis Vadura,
our Chief Executive Officer, and Frank Wiebe, our President, Secretary and
Treasurer. Each employment agreement has a five-year term and provides for an
annual base salary of $115,000, with a minimum annual 10% increase (beginning in
fiscal 2004) as determined by our board of directors. The agreements also
provide that Messrs. Vadura and Wiebe will be entitled to participate in our
management stock incentive plan as soon as reasonably practicable. Bonus
compensation, if any, is to be determined by the Board of Directors or the
Compensation Committee of the Board of Directors, but cannot exceed 100% of
their then applicable annual salary. Under the agreements, if either Mr. Vadura
or Mr. Wiebe voluntarily resign or are terminated with cause (as defined in the
agreements), he will only be entitled to receive his compensation through the
date of termination. If either Mr. Vadura's or Mr. Wiebe's employment is
terminated by either officer for good reason (as defined in the agreements) or
by us without cause, he will be entitled to a lump-sum severance payment in an
amount equal to his then current annual salary and we will be required to
provide all of his benefits for a twelve month period. If either Mr. Vadura or
Mr. Wiebe is permanently disabled, we will pay him his then current annual
salary and provide all benefits through the remainder of the calendar year and a
three-month period thereafter. If either Mr. Vadura or Mr. Wiebe dies, we will
pay his then current annual salary through the calendar month in which such
death occurs.


                                       42
<PAGE>

Executive Consulting Agreements

      On June 10, 2005, we agreed to amend the terms of the July 2002 consulting
agreement with Chester Noblett, Jr. such that his new title would be Executive
Vice President and his consulting retainer fee would increase to an annual rate
of $175,000 at which time the Company raises $3 million in new financing, as
defined, and Texas certifies AccuPoll's voting system and we receive orders from
counties within Texas. As of September 22, these criteria have not been met. We
also agreed to issue Mr. Noblett options to purchase up to 3 million shares of
common stock. Those options were approved in connection with the adoption of the
Company's 2005 Incentive Stock Plan approved by the Board of Directors on
September 22, 2005.

      On July 24, 2002, we entered into a consulting agreement with Mr. Noblett
to provide sales and marketing and other operational and business development
services to the Company under the title of Vice President of Sales. The
agreement provides that Mr. Noblett will provide services to the Company as an
independent contractor and will be compensated at a bi-weekly rate of $3,461.54
until annual sales of the Company reached $10 million. In October 2004, the
Company issued 287,701 shares of restricted common stock to Mr. Noblett in the
form of a bonus. The shares were valued at $0.25 per share.

Benefit Plans

      Except for the 2005 Incentive Stock Plan and the 2002 Consultant
Compensation Plan described below, we do not have any pension plan, profit
sharing plan, or similar plans for the benefit of our officers, directors or
employees. However, we may establish such plans in the future.

      On September 22, 2005, our Board of Directors approved our 2005 Incentive
Stock Plan and authorized 60 million shares of common stock for issuance of
stock awards and stock options thereunder. The 2005 Incentive Stock Plan is
administered by our Board of Directors. Under the plan, options may be granted
which are intended to qualify as Incentive Stock Options under Section 422 of
the Internal Revenue Code of 1986, as amended or which are not intended to
qualify as Incentive Stock Options thereunder. The 2005 Incentive Stock Plan and
the right of participants to make purchases thereunder are intended to qualify
as an "employee stock purchase plan" under Section 423 of the Internal Revenue
Code. The primary purpose of the 2005 Incentive Stock Plan is to attract and
retain highly qualified officers, directors, key employees, and other persons,
and to motivate such officers, directors, key employees, and other persons to
serve our business, by providing them an opportunity to acquire or increase a
direct proprietary interest in our operations and future success.

      On October 18, 2004, our Board of Directors approved a 2004 Incentive
Stock Plan and authorized 12,500,000 shares of common stock for issuance of
stock awards and stock options thereunder. On September 22, 2005, our Board of
Directors approved the termination of the 2004 Incentive Stock Plan. As of
September 22, 2005, no securities were granted under the 2004 Incentive Stock
Plan and it had not been approved by our shareholders.

      We have a 2002 Consultant Compensation Plan which authorizes us to grant
non-qualified stock options with or without stock appreciation rights (SAR's)
and stock bonuses to our consultants. There are 12,000,000 shares of common
stock available for grant to participants under the plan. Our board of directors
determined to adopt the plan to retain and compensate employees and consultants
and to provide additional incentives for employees and consultants. Shares
involved in the unexercised portion of any terminated or expired option may
again be available for grant, provided that to the extent any option in whole or
in part is surrendered as the result of the exercise of a SAR, the shares
subject to the surrendered portion of the option will no longer be available for
use under the plan. The exercise price of any option issued under the plan may
not be less than 85% of the fair market value of the shares on the date of
grant.

Board Compensation

      Except for the 2004 Incentive Stock Plan and the 2002 Consultant
Compensation Plan described above, we do not have any formal or informal
arrangements or agreements to compensate our directors for services they provide
as members of our Board of Directors.

Performance Graph

      The following performance graph assumes an investment of $100 on 6/30/2002
and compares the change to June 30, 2004, in the market prices of our common
stock with the change a broad market index (S & P 500 - U.S.) and a Special
Composite Index comprised of the following Companies: GPTX, NCR, and TRMM. We
have paid no dividends. The performance of the indices is shown on a total
return (dividend reinvestment) basis. The graph lines merely connect the prices
on the dates indicated and do not reflect fluctuations between those dates.


                                       43
<PAGE>

<TABLE>
<CAPTION>
                                6/30/01           6/30/02           6/30/03           6/30/04           6/30/05
                                -------           -------           -------           -------           -------
<S>                               <C>             <C>                <C>              <C>               <C>
ACUP                              N/A             $100.00            $79.17           $ 84.39           $ 11.30
S&P 500                           N/A             $100.00            $98.44           $115.25           $120.36
Special Composite  *              N/A             $100.00            $79.86           $164.02           $220.87
</TABLE>

* Includes the following three companies: GPTX, $5.95/share at 6/30/02,
$4.39/share at 6/30/03, $3.70/share at 6/30/04 and $4.38 at 6/30/05; NCR,
$34.60/share at 6/30/02, $26.76/share at 6/30/03, $49.59/share at 6/30/04 and
$35.12 at 6/30/05; and TRMM, $0.85/share at 6/30/02, $1.85/share at 6/30/03,
$14.49/share at 6/30/04 and $16.82 at 6/30/05.

[LINE GRAPH OMITTED]

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

      The following table sets forth certain information, as of September 9,
2005 with respect to the beneficial ownership of the outstanding common stock by
(i) any holder of more than five (5%) percent; (ii) each of our directors and
named executive officers; and (iii) our directors and named executive officers
as a group. Except as otherwise indicated, each of the stockholders listed below
has sole voting and investment power over the shares beneficially owned.


                                       44
<PAGE>

                                                              Percentage of
                                         Common Stock          Common Stock
Name of Beneficial Owner (1)        Beneficially Owned (2)    Ownership (2)
--------------------------------------------------------------------------------
Dennis Vadura (3) (4) (5) (11)               59,426,560           23.1%
Frank Wiebe (3) (4) (6) (12)                 44,467,040           17.3%
Andrea M. Porcelli                                    0             *
Philip G. Trubey (7)                         20,464,220            7.9%
Hyde Investments LLC (8)                     23,890,830            9.3%
Livingston Investments Ltd. (9)              20,034,161            7.8%
Palisades Holdings LLC (10)                  16,675,036            6.5%
--------------------------------------------------------------------------------
All named executive officers and            124,357,820            48.3%
directors as a group (4 persons)

      *     Less than 1%.

      (1)   Except as otherwise indicated, the address of each beneficial owner
            is c/o AccuPoll Holding Corp., 15101 Red Hill Ave. Suite # 220,
            Tustin, Ca 92780.

      (2)   Applicable percentage ownership is based on 257,248,320 shares of
            common stock outstanding as of September 9, 2005, together with
            securities exercisable or convertible into shares of common stock
            within 60 days of September 9, 2005 for each stockholder. Beneficial
            ownership is determined in accordance with the rules of the
            Securities and Exchange Commission and generally includes voting or
            investment power with respect to securities. Securities that are
            currently exercisable or exercisable within 60 days of September 9,
            2005 are deemed to be beneficially owned by the person holding such
            securities for the purpose of computing the percentage of ownership
            of such person, but are not treated as outstanding for the purpose
            of computing the percentage ownership of any other person.

      (3)   Includes 3,064,000 shares of common stock held by Web Tools
            International, Inc., a company owned and controlled by Messrs.
            Vadura and Mr. Wiebe.

      (4)   Includes 18,400,000 shares of common stock as to which Messrs.
            Vadura and Wiebe have shared voting power pursuant to irrevocable
            proxies granted by stockholders. Messrs. Vadura and Wiebe have no
            economic interest in such stock.

      (5)   Includes an option to purchase 2,400,000 shares at an exercise price
            of $.91 per share which expires on June 18, 2013; and an option to
            purchase 4,032,000 shares at an exercise price of $.3125 per share
            which expires on May 29, 2012

      (6)   Includes an option to purchase 1,200,000 shares at an exercise price
            of $.91 per share which expires on June 18, 2013; and an option to
            purchase 2,016,000 shares at an exercise price of $.3125 per share
            which expires on May 29, 2012.

      (7)   Includes 9,057,970 shares of common stock underlying warrants
            exercisable at $0.10 per share and assumes conversion of $300,000
            debt (due October 21, 2005) at $0.10 per share into 3,000,000
            shares.

      (8)   Includes 22,290,803 shares to be issued in connection with
            Conversion and Settlement Agreement with Mutual Releases dated
            September 26, 2005. Shares to be issued in installments through May
            2006.

      (9)   Includes 20,034,161 shares to be issued in connection with
            Conversion and Settlement Agreement with Mutual Releases dated
            September 26, 2005. Shares to be issued in installments through May
            2006.

      (10)  Includes 16,675,036 shares to be issued in connection with
            Conversion and Settlement Agreement with Mutual Releases dated
            September 26, 2005. Shares to be issued in installments through
            March 2006.

      (11)  Assumes conversion of $230,000 debt (extended to September 30, 2005)
            at $0.10 per share into 2,300,000 shares.

      (12)  Assumes conversion of $30,000 debt (extended to September 30, 2005)
            at $0.10 per share into 300,000 shares.

Securities Authorized for Issuance Under Equity Compensation Plans

      The following table shows information with respect to each equity
compensation plan under which our common stock is authorized for issuance as of
the fiscal year ended June 30, 2005.


                                       45
<PAGE>

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------
           Plan category              Number of securities       Weighted average        Number of securities
                                        to be issued upon       exercise price of      remaining available for
                                           exercise of         outstanding options,     future issuance under
                                      outstanding options,     warrants and rights    equity compensation plans
                                       warrants and rights                              (excluding securities
                                                                                       reflected in column (a)
-----------------------------------------------------------------------------------------------------------------
                                               (a)                      (b)                     (c)
-----------------------------------------------------------------------------------------------------------------
<S>                                        <C>                        <C>                     <C>
Equity compensation plans approved
by security holders                            -0-                     -0-                       N/A
-----------------------------------------------------------------------------------------------------------------
Equity compensation plans not
approved by security holders               116,577,876                $0.13                   2,062,376
-----------------------------------------------------------------------------------------------------------------
Total                                      116,577,876                $0.13                   2,062,376
-----------------------------------------------------------------------------------------------------------------
Notes                                  (1) (2) (3) (4) (5)                                       (6)
-----------------------------------------------------------------------------------------------------------------
</TABLE>

(1)   Included in the total are 54,915,066 warrants issued with exercise prices
      between $.06 and $1.55 per share from inception through June 30, 2005, in
      connection with debt instruments, minus 3,312,500 of these warrants
      exercised into shares of common stock at prices ranging from $0.06-$0.50
      per share and 5,000,000 warrants transferred to the Company pursuant to a
      release agreement executed in March 2005..

(2)   Included in the total are 89,440,695 warrants issued with exercise prices
      between $.06 and $1.55 per share from inception through June 30, 2005, in
      connection with equity instruments, minus 45,624,314 of these warrants
      exercised into shares of common stock at prices between $.06 and $.35 per
      share.

(3)   Included in the total are 7,865,551 warrants issued with exercise prices
      between $.06 and $.75 per share from inception through June 30, 2005, for
      placement agent fees, minus 631,000 of these warrants exercised into
      shares of common stock at prices between $.06 and $.75 per share.

(4)   Included in the total are 7,598,036 warrants issued with exercise prices
      between $.06 and $1.54 per share from inception through June 30, 2005, for
      services rendered, minus 1,153,660 of these warrants exercised into shares
      of common stock at prices between $.08 and $.75 per share.

(5)   Included in the total are 13,050,000 options issued to employees and
      consultants with exercise prices between $.31 and $1.54 per share from
      inception through June 30, 2005, for employment services, minus 550,000 of
      these options exercised into shares of common stock at prices between $.31
      and $.75 per share and minus 20,000 options cancelled.. Such options were
      granted under the Plan described in Note 6 below.

(6)   We have a 2002 Consultant Compensation Plan which authorizes us to grant
      non-qualified stock options with or without stock appreciation rights
      (SAR's) and stock bonuses to our consultants. There are 12,000,000 shares
      of common stock available for grant to participants under the plan. Our
      board of directors determined to adopt the plan to retain and compensate
      employees and consultants and to provide additional incentives for
      employees and consultants. Shares involved in the unexercised portion of
      any terminated or expired option may again be available for grant,
      provided that to the extent any option in whole or in part is surrendered
      as the result of the exercise of a SAR, the shares subject to the
      surrendered portion of the option will no longer be available for use
      under the plan. The exercise price of any option issued under the plan may
      not be less than 85% of the fair market value of the shares on the date of
      grant.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

      In April 2002, we entered into a Master Services Agreement whereby Web
Tools International, Inc. (WTI) provided substantially all non-production
services related to the manufacture of our voting system. Under the agreement we
were charged hourly rates for WTI's employees who worked on developing the
computer software for the Company's Voting System. In addition, we reimbursed
WTI for all reimbursable expenses, as defined in the agreement. We were not
charged for the use of the office space or fixed assets of WTI. All overhead
related charges were included in the basic hourly rates charged to us by WTI.
The agreement expired on March 31, 2004. All ideas, inventions, concepts,
know-how, methods, methodologies, processes, algorithms, techniques,
compilations, software and other works of authorship of any nature created or
developed by WTI during the course of performance of the agreement are our
exclusive property. WTI is owned and operated by Dennis Vadura and Frank Wiebe.
Mr. Vadura is our Chief Executive Officer, a director and stockholder. Mr. Wiebe
is our President, Treasurer, Secretary, a director and a stockholder. During the
fiscal year ended June 30, 2004, WTI invoiced approximately $1,450,000 to us
under the terms of the agreement, of which approximately $1,487,000 remained due
and payable as of June 30, 2004. Our management believes the terms of this
agreement are at least as favorable as could be obtained from unrelated third
parties.


                                       46
<PAGE>

      From January 2002 to June 30, 2004, Andreea M. Porcelli, a member of our
board of directors, has assisted us in the placement of our securities offerings
in Europe. In connection with these services, Continental Advisors S.A. received
$640,000 in cash and warrants to purchase an aggregate of 2,232,752 shares of
our common stock at exercise prices ranging from $0.10 to $0.1224 per share. The
payments to Montalcino Ltd, Southampton Ltd. and Continental SA were pursuant to
agreements between those companies and Continental Advisors Srl. Ms. Porcelli is
one of three associates of Continental Advisors Srl. Continental Advisors Srl
received approximately 60% of the cash and warrants and the balance was paid to
Montalcino Ltd., Southampton Ltd. and Continental SA for their services in
connection with the private placements. In connection with private placements of
our securities in Europe during the fiscal year ended June 30, 2005, Continental
Advisors Srl received $112,000 in cash and warrants to purchase an aggregate of
1,187,000 shares of our common stock with an exercise price of $0.10 per share.

      From June 2005 to present, Continental Advisors S.A. (Lux..) acted as
placement agent in connection with the sale of shares of our Series A Preferred
Stock and warrants. In consideration for its services as placement agent, we
agreed to pay Continental Advisors S.A. an amount in cash equal to 10% of the
aggregate gross proceeds received by us and to issue Continental Advisors S.A.
warrants to purchase such number of shares of common stock equal to 10% of
aggregate gross proceeds. Ms. Porcelli, is a consultant for Continental Advisors
S.A.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

AUDIT FEES

      The aggregate fees incurred for professional services rendered by our
principal accountants for the audit of our financial statements, the reviews of
our annual report on Form 10-K, the review of our unaudited financial statements
included in our quarterly reports filed with the Securities and Exchange
Commission, and for other services normally provided in connection with
statutory filings approximated $107,000 and $137,000 for the years ended June
30, 2005 and 2004, respectively.

AUDIT-RELATED FEES

      We incurred fees of approximately $50,000 and $11,000 for the years ended
June 30, 2005 and 2004, respectively, for professional services rendered by our
principal accountants that are reasonably related to the performance of the
audit or review of our financial statements and not included in "Audit Fees."

TAX FEES

      The aggregate fees incurred for professional services rendered by our
principal accountants for tax compliance were approximately $6,000 and $6,000,
for the years ended June 30, 2005 and 2004, respectively.

ALL OTHER FEES

      We did not incur any fees for other professional services rendered by our
principal accountants during the years ended June 30, 2005 and 2004.

AUDIT COMMITTEE PRE-APPROVAL POLICIES

      The board of directors acts as the audit committee, and consults with
respect to audit policy, choice of auditors, and approval of out of the ordinary
financial transactions.

                                     PART IV

ITEM 15 EXHIBITS, FINANCIAL STATEMENT SCHEDULES

Financial statements and financial statement schedules that have been omitted
are not required.

(a) FINANCIAL STATEMENT SCHEDULES. The information required by this Item is
either not applicable, included in the notes to consolidated financial
statements, or is not significant.


                                       47
<PAGE>

(b) Exhibits.

 Exhibit
 Number                                   Description
----------     -----------------------------------------------------------------

3.1            Certificate of Designation of Preferences, Rights and Limitations
               of Series A Convertible Preferred Stock (Incorporated by
               reference to the Company's Form 8-K filed with the Securities and
               Exchange Commission on June 29, 2005)

4.1            Subscription Agreement, dated September 8, 2004 (Incorporated by
               reference from Exhibit 4.1 to Form 8-K, filed September 17, 2004)

4.2            Schedules to September 8, 2004 Subscription Agreement

4.3            Form of Legal Opinion in connection with September 8, 2004
               Subscription Agreement

4.4            Form of Common Stock Purchase Warrant A (Incorporated by
               reference from Exhibit 4.2 to Form 8-K, filed September 17, 2004)

4.5            Form of Common Stock Purchase Warrant B (Incorporated by
               reference from Exhibit 4.3 to Form 8-K, filed September 17, 2004)

4.6            Form of Common Stock Purchase Warrant C (Incorporated by
               reference from Exhibit 4.4 to Form 8-K, filed September 17, 2004)

4.7            Form of Placement Agent Warrant (Incorporated by reference from
               Exhibit 4.5 to Form 8-K, filed September 17, 2004)

4.8            Form of Funds Escrow Agreement (Incorporated by reference from
               Exhibit 4.6 to Form 8-K, filed September 17, 2004)

4.9            Subscription Agreement, dated November 4, 2004 (Incorporated by
               reference from Exhibit 4.1 to Form 8-K, filed November 10, 2004)

4.10           Schedules to November 4, 2004 Subscription Agreement

4.11           Form of Legal Opinion in connection with November 4, 2004
               Subscription Agreement

4.12           Form of Common Stock Purchase Warrant A (Incorporated by
               reference from Exhibit 4.1 to Form 8-K, filed November 10, 2004)

4.13           Form of Common Stock Purchase Warrant B (Incorporated by
               reference from Exhibit 4.1 to Form 8-K, filed November 10, 2004)

4.14           Form of Common Stock Purchase Warrant C (Incorporated by
               reference from Exhibit 4.1 to Form 8-K, filed November 10, 2004)

4.15           Form of Placement Agent Warrant (Incorporated by reference from
               Exhibit 4.1 to Form 8-K, filed November 10, 2004)

4.16           Form of Funds Escrow Agreement (Incorporated by reference from
               Exhibit 4.1 to Form 8-K, filed November 10, 2004)

4.17           Amendment No. 4 to Debenture held by Palisades Capital, LLC

4.18           Amendment No. 4 to Debenture held by Hyde Investments, Ltd.

4.19           Amendment No. 4 to Debenture held by Livingston Investments, Ltd.

4.20           Letter Agreement dated July 29, 2005 (Incorporated by reference
               to the Company's Form 8-K filed with the Securities and Exchange
               Commission on August 18, 2005)

4.21           Securities Purchase Agreement dated as of July 28, 2005 by and
               among AccuPoll Holding Corp. and the purchasers identified on the
               signature pages thereto (Incorporated by reference to the
               Company's Form 8-K filed with the Securities and Exchange
               Commission on August 18, 2005)

4.22           Securities Purchase Agreement dated as of June 22, 2005 by and
               among AccuPoll Holding Corp. and the purchasers identified on the
               signature pages thereto (Incorporated by reference to the
               Company's Form 8-K filed with the Securities and Exchange
               Commission on June 29, 2005)

4.23           Disclosure Schedules to Securities Purchase Agreement dated as of
               June 22, 2005 by and among AccuPoll Holding Corp. and the
               purchasers identified on the signature pages thereto
               (Incorporated by reference to the Company's Form 8-K filed with
               the Securities and Exchange Commission on June 29, 2005)

4.24           Form of Legal Opinion (Incorporated by reference to the Company's
               Form 8-K filed with the Securities and Exchange Commission on
               June 29, 2005)

4.25           Form of Common Stock Purchase Warrant with exercise price of
               $0.10 per share (Incorporated by reference to the Company's Form
               8-K filed with the Securities and Exchange Commission on June 29,
               2005)


                                       48
<PAGE>

4.26           Form of Common Stock Purchase Warrant with exercise price of
               $0.125 per share (Incorporated by reference to the Company's Form
               8-K filed with the Securities and Exchange Commission on June 29,
               2005)

4.27           Form of Registration Rights Agreement among AccuPoll Holding
               Corp. and the purchasers signatory thereto (Incorporated by
               reference to the Company's Form 8-K filed with the Securities and
               Exchange Commission on June 29, 2005)

4.28           Form of Escrow Agreement (Incorporated by reference to the
               Company's Form 8-K filed with the Securities and Exchange
               Commission on June 29, 2005)

9.1            Proxy in favor of Dennis Vadura and Frank Wiebe from Picasso, LLC
               (Incorporated by reference from Exhibit 10.9 to the Form 10-KSB
               for the fiscal year ended June 30, 2002, filed October 7, 2002)

9.2            Proxy in favor of Dennis Vadura and Frank Wiebe from ViperTrust
               (Incorporated by reference from Exhibit 10.10 to the Form 10-KSB
               for the fiscal year ended June 30, 2002, filed October 7, 2002)

9.3            Proxy in favor of Dennis Vadura and Frank Wiebe from Aramis
               Investment, LLC (Incorporated by reference from Exhibit 9.3 to
               Form 10-KSB/A for the fiscal year ended June 30, 2003, filed June
               8, 2004)

9.4            Proxy in favor of Dennis Vadura and Frank Wiebe from The Glacier
               Trust (Incorporated by reference from Exhibit 9.4 to Form
               10-KSB/A for the fiscal year ended June 30, 2003, filed June 8,
               2004)

9.5            Proxy in favor of Dennis Vadura and Frank Wiebe from Morpheus
               Trust (Incorporated by reference from Exhibit 9.5 to Form
               10-KSB/A for the fiscal year ended June 30, 2003, filed June 8,
               2004)

10.1           Teaming Agreement dated July 9, 2004, by and between AccuPoll,
               Inc. and Alternative Resources Corporation (Incorporated by
               reference from Exhibit 10.12 to Form 10-K for the fiscal year
               ended June 30, 2004, filed September 28, 2004)

10.2           Exclusive Supply Agreement dated December 20, 2001 by and between
               Source Technologies, Inc. and AccuPoll, Inc. (Certain redacted
               portions of this Agreement are the subject of a pending request
               for confidential treatment)

10.3           General Release and Settlement Agreement entered into March 1,
               2005 by and between GCH Capital, Ltd., Livingston Investments,
               Ltd., Hyde Investments, Ltd, Palisades Capital, LLC and AccuPoll
               Holding Corp.

10.4           Conversion and Settlement Agreement With Mutual Releases dated
               September 26, 2005, by and between AccuPoll Holding Corp,
               AccuPoll, Inc., Dennis Vadura, Corporate Legal Services, LLP,
               Palisades Capital, LLC, Hyde Investments, LLC, Livingston
               Investments, Ltd. and GCH Capital, Ltd.

10.5           Registration Rights Agreement dated as of September 26, 2005, by
               and among AccuPoll Holding Corp., Palisades Capital, LLC, Hyde
               Investments, LLC and Livingston Investments, Ltd.

10.6           Employment Agreement of Diana Dimadi dated April 15, 2004
               (Incorporated by reference from Exhibit 10.1 to Form 8-K filed
               April 6, 2005)

10.7           Amendment to Employment Agreement of Diana Dimadi dated April 6,
               2005 (Incorporated by reference from Exhibit 10.2 to Form 8-K
               filed April 6, 2005)

10.8           Office Lease Agreement dated December 18, 2002 by and between
               Loutex Amarillo, LP and AccuPoll, Inc.

10.9           2004 Incentive Stock Plan

10.10          2005 Incentive Stock Plan

14.1           Code of Ethics (Incorporated by reference from Exhibit 14.1 to
               Form 10-K for the fiscal year ended June 30, 2004, filed
               September 28, 2004)

21.1           List of Subsidiaries

31.1           Certification by Chief Executive Officer, required by Rule
               13a-14(a) or Rule 15d-14(a) of the Exchange Act

31.2           Certification by Chief Financial Officer, required by Rule
               13a-14(a) or Rule 15d-14(a) of the Exchange Act

32.1           Certification by Chief Executive Officer, required by Rule
               13a-14(b) or Rule 15d-14(b) of the Exchange Act and Section 1350
               of Chapter 63 of Title 18 of the United States Code

32.2           Certification by Chief Financial Officer, required by Rule
               13a-14(b) or Rule 15d-14(b) of the Exchange Act and Section 1350
               of Chapter 63 of Title 18 of the United States Code


                                       49
<PAGE>

                                   SIGNATURES

      Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

                                    ACCUPOLL HOLDING CORP.

Dated:   September 28, 2005         By:   /s/ William E. Nixon
                                          --------------------------------------
                                          William E. Nixon,
                                          President and Chief Executive Officer

Dated:   September 28, 2005         By:   /s/ Diana Dimadi
                                          --------------------------------------
                                          Diana Dimadi,
                                          Chief Financial Officer and Principal
                                          Accounting Officer

      Pursuant to the requirements of the Securities Exchange Act of 1934, 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
---------                        -----                       ----

/s/ Dennis Vadura                Chairman of the Board       September 28, 2005
-------------------------
Dennis Vadura

/s/ Frank J. Wiebe               Director                    September 28, 2005
-------------------------
Frank J. Wiebe

/s/ William E. Nixon             Director                    September 28, 2005
-------------------------
William E. Nixon

/s/ Andreea M. Porcelli          Director                    September 28, 2005
-------------------------
Andreea M. Porcelli

/s/ Philip G. Trubey             Director                    September 28, 2005
-------------------------
Philip G. Trubey


                                       50
<PAGE>

                          INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
                                                                                                      Page
<S>                                                                                                   <C>
Index to financial statements..........................................................................F-1

Management's Report on Internal Controls over Financial Reporting......................................F-2

Report of Independent Registered Public Accounting Firm over Internal
   Control over Financial Reporting....................................................................F-5

Report of Independent Independent Registered Public Accounting Firm....................................F-7

Consolidated Balance Sheets at June 30, 2005 and 2004..................................................F-8

Consolidated Statements of Operations for the years ended June 30, 2005, 2004 and 2003.................F-9

Consolidated Statements of Stockholders' Deficit for the years ended June 30, 2005, 2004 and 2003.....F-10

Consolidated Statements of Cash Flows for the years ended June 30, 2005, 2004 and 2003................F-13

Notes to consolidated financial statements............................................................F-15
</TABLE>


                                      F-1
<PAGE>

        MANAGEMENT'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

Board of Directors and Stockholders
AccuPoll Holding Corp.

We prepared and are responsible for the consolidated financial statements that
appear in our Annual Report. These consolidated financial statements have been
prepared in conformity with accounting principles generally accepted in the
United States of America (GAAP), and therefore, include amounts based on
informed judgments and estimates. We also accept responsibility for the
preparation of other financial information that is included in this document.

The management of the Company is responsible for establishing and maintaining
adequate internal control over financial reporting as defined in Rules 13a-15(f)
and 15d-15(f) under the Securities Exchange Act of 1934. The Company's internal
control over financial reporting is designed to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of
consolidated financial statements for external purposes in accordance with GAAP.
The Company's internal control over financial reporting includes those policies
and procedures that: (i) pertain to the maintenance of records that, in
reasonable detail, accurately and fairly reflect the transactions and
dispositions of the assets of the Company; (ii) provide reasonable assurance
that transactions are recorded as necessary to permit preparation of
consolidated financial statements in accordance with GAAP, and that receipts and
expenditures of the Company are being made only in accordance with
authorizations of management and directors of the Company; and (iii) provide
reasonable assurance regarding prevention or timely detection of unauthorized
acquisition, use or disposition of the Company's assets that could have a
material effect on the consolidated financial statements.

Because of its inherent limitations, internal control over financial reporting
may not prevent or detect misstatements. Also, projections of any evaluation of
effectiveness to future periods are subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree of compliance
with the policies or procedures may deteriorate.

A material weakness is a significant deficiency (within the meaning of PCAOB
Auditing Standard No. 2), or combination of significant deficiencies, that
results in there being more than a remote likelihood that a material
misstatement of the financial statements will not be prevented or detected on a
timely basis.

As of the end of the year ended June 30, 2005, our management, under the
supervision and with the participation of our Chief Executive Officer and Chief
Financial Officer, assessed the effectiveness of our internal control over
financial reporting. Management participated in a review and analysis of our
internal controls over financial reporting for Sarbanes-Oxley compliance. As
part of that review, management used the criteria established in "Internal
Control--Integrated Framework" issued by the Committee of Sponsoring
Organizations of the Treadway Commission (COSO). As a result of that review and
analysis, our management concluded that we had material weaknesses in internal
controls over financial reporting attributable to insufficient resources in
financial reporting and accounting departments and a lack of formalized
procedures, ineffective corporate governance, segregation of duties in
accounting functions and and lack of adequate controls over our management
information systems and inadequately designed controls over accounting and
financial reporting, as more fully described below. Because of the foregoing
material weaknesses, management concluded that our internal control over
financial reporting was not effective as of June 30, 2005 based on the criteria
established in COSO.


                                      F-2
<PAGE>

Material Weaknesses

Insufficient resources and procedures in accounting and financial reporting
functions

Management determined that the Company has insufficient staffing in the
financial reporting and accounting departments regarding the specialized
knowledge and expertise in GAAP to prevent errors in financial reporting and
related disclosures, and to comply with accounting pronouncements. In addition,
the Company has insufficient formal disciplines and procedures in place to
provide appropriate review of accounting schedules, analyses, reconciliations,
assumptions and estimates used in preparation of financial statements and
disclosures. The lack of adequate resources and procedures prevents (i) adequate
interpretation and monitoring of recent or relevant financial accounting
standards, (ii) adequate preparation and review of accounting analyses and
reconciliations, and (iii) adequate preparation and review of required
disclosures.

Segregation of duties

Management determined that the Company has inadequate segregation of duties and
functions to provide appropriate separation of incompatible roles and
responsibilities in order to support prevention and detection of misstatements
in the financial statements and disclosures, inappropriate transactions, misuse
of assets, or fraud.

Formal corporate governance structure

Management concluded that the Company has insufficient or lacking formal
governance procedures and structures. The insufficient or lacking procedures and
structures include, but are not limited to, (i) a failure to authorize and
empower standing committees of the Board, including an audit committee and a
compensation committee, (ii) a failure to approve governance structures
including charters, delegations of authority, codes of ethics and appropriate
conduct for officers and directors, controls regarding conflicts of interest,
definition of roles and responsibilities, approval of budgets, and (iii) a lack
of an internal audit function.

Systems access

Management has determined that the Company as inadequate controls over network
access and software application access. These related controls include the a)
review and approval of initial network access and software application access to
new employees, b) the removal of network access and software application access
to terminating employees, c) the routine review of network access and software
application rights of all employees to insure that evolving access rights have
not created segregation of duties conflicts and that each employee's current
access is consistent with current job responsibilities requirements, and d)
circumvention of network access and software application access controls.

Remediation Plan

Management plans to recruit and retain additional qualified staff and/or
resources in the accounting and financial reporting functions. These staff
and/or resources will monitor and interpret financial accounting standards,
develop and maintain financial reporting policies and procedures, develop
position papers on relevant accounting pronouncements and oversee the Company's
filings and compliance with GAAP and SEC regulations.

Formal policies and procedures in the accounting department will be expanded,
documented and implemented. These procedures will include the utilization of
checklists and review procedures, development and implementation of additional
analyses and reconciliations, utilization of project management tools, and
monitoring of control compliance.

The accounting department, as deemed necessary, will be expanded and/or
realigned to provide appropriate segregation of duties and supervisory reviews.


                                      F-3
<PAGE>

We will enhance our existing corporate governance structure with the creation of
an audit committee and a compensation committee. The board of directors will
approve appropriate charters for such committees. In addition, the board of
directors plans to approve appropriate delegation of authority documents, codes
of ethics, and codes of appropriate conduct.

An internal audit function will be developed to perform periodic reviews to
evaluate adherence to formalized procedures and controls over the financial
reporting processes performed by the Company.

Management will continue to evaluate cost effective improvements to the existing
network access and software application access controls in the management
information system area.

/s/ Dennis Vadura
---------------------------------------
Dennis Vadura
Chairman of the Board

/s/ William E. Nixon
---------------------------------------
William E. Nixon
President and Chief Executive Officer

/s/ Diana Dimadi
---------------------------------------
Diana Dimadi
Chief Financial Officer


                                      F-4
<PAGE>

          REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM OVER
                    INTERNAL CONTROL OVER FINANCIAL REPORTING

To the Board of Directors and Stockholders of
AccuPoll Holding Corp.

      We have audited management's assessment, included in the accompanying
Management Report on Internal Control Over Financial Reporting, that AccuPoll
Holding Corp and subsidiaries (the "Company") did not maintain effective
internal control over financial reporting as of June 30, 2005, because of the
effect of the material weaknesses identified in management's assessment based on
criteria established in Internal Control-Integrated Framework issued by the
Committee of Sponsoring Organizations of the Treadway Commission. The Company's
management is responsible for maintaining effective internal control over
financial reporting and for its assessment of the effectiveness of internal
control over financial reporting. Our responsibility is to express an opinion on
management's assessment and an opinion on the effectiveness of the Company's
internal control over financial reporting based on our audit.

      We conducted our audit in accordance with the standards of the Public
Company Accounting Oversight Board (United States). Those standards require that
we plan and perform the audit to obtain reasonable assurance about whether
effective internal control over financial reporting was maintained in all
material respects. Our audit included obtaining an understanding of internal
control over financial reporting, evaluating management's assessment, testing
and evaluating the design and operating effectiveness of internal control, and
performing such other procedures as we considered necessary in the
circumstances. We believe that our audit provides a reasonable basis for our
opinions.

      A company's internal control over financial reporting is a process
designed by, or under the supervision of, the company's principal executive and
principal financial officers, or persons performing similar functions, and
effected by the company's board of directors, management and other personnel to
provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance
with generally accepted accounting principles. A company's internal control over
financial reporting includes those policies and procedures that (i) pertain to
the maintenance of records that, in reasonable detail, accurately and fairly
reflect the transactions and disposition of the assets of the company; (ii)
provide reasonable assurance that transactions are recorded as necessary to
permit preparation of financial statements in accordance with generally accepted
accounting principles, and that receipts and expenditures of the company are
being made only in accordance with authorizations of management and directors of
the company; and (iii) provide reasonable assurance regarding prevention or
timely detection of unauthorized acquisition, use or disposition of the
company's assets that could have a material effect on the financial statements.

      Because of the inherent limitations of internal control over financial
reporting, including the possibility of collusion or improper management
override of controls, material misstatements due to error or fraud may not be
prevented or detected on a timely basis. Also, projections of any evaluation of
the effectiveness of the internal control over financial reporting to future
periods are subject to the risk that the controls may become inadequate because
of changes in conditions, or that the degree of compliance with the policies or
procedures may deteriorate.

      A material weakness is a significant deficiency, or combination of
significant deficiencies, that results in more than a remote likelihood that a
material misstatement of the annual or interim financial statements will not be
prevented or detected. The following material weaknesses have been identified
and included in management's assessment:

      1.    The Company has insufficient staffing in the financial reporting and
            accounting departments regarding the specialized knowledge and
            expertise in GAAP to prevent errors in financial reporting and
            related disclosures, and to comply with accounting pronouncements.
            In addition, the Company has insufficient formal disciplines and
            procedures in place to provide appropriate review of accounting
            schedules, analyses, reconciliations, assumptions and estimates used
            in preparation of financial statements and disclosures. The lack of
            adequate resources and procedures prevents (i) adequate
            interpretation and monitoring of recent or relevant financial
            accounting standards, (ii) adequate preparation and review of
            accounting analyses and reconciliations, and (iii) adequate
            preparation and review of required disclosures.


                                      F-5
<PAGE>

      2.    The Company has inadequate segregation of duties and functions to
            provide appropriate separation of incompatible roles and
            responsibilities in order to support prevention and detection of
            misstatements in the financial statements and disclosures,
            inappropriate transactions, misuse of assets, or fraud.

      3.    The Company has insufficient or lacking formal governance procedures
            and structures. The insufficient or lacking procedures and
            structures include, but are not limited to, (i) a failure to
            authorize and empower standing committees of the Board, including an
            audit committee and a compensation committee, (ii) a failure to
            approve governance structures including charters, delegations of
            authority, codes of ethics and appropriate conduct for officers and
            directors, controls regarding conflicts of interest, definition of
            roles and responsibilities, approval of budgets, and (iii) a lack of
            an internal audit function.

      4.    The Company has inadequate controls over network access and software
            application access. These related controls include the (i) review
            and approval of initial network access and software application
            access to new employees, (ii) the removal of network access and
            software application access to terminating employees, (iii) the
            routine review of network access and software application rights of
            all employees to insure that evolving access rights have not created
            segregation of duties conflicts and that each employee's current
            access is consistent with current job responsibilities requirements,
            and d) circumvention of network access and software application
            access controls.

      These deficiencies were concluded to be material weaknesses due to (i) the
significance of the misstatements identified, (ii) the absence of other controls
to prevent or detect the misstatements, and (iii) the potential pervasiveness of
the impact of the deficiencies on other significant account balances and
disclosures. These material weaknesses were considered in determining the
nature, timing, and extent of audit tests applied in our audit of the
consolidated financial statements as of and for the year ended June 30, 2005, of
the Company, and this report does not effect our report on such consolidated
financial statements.

      In our opinion, management's assessment that the Company did not maintain
effective internal control over financial reporting as of June 30, 2005, is
fairly stated, in all material respects, based on the criteria established in
Internal Control-Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission. Also in our opinion, because of the
effect of the material weaknesses described above on the achievement of the
objectives of the control criteria, the Company has not maintained effective
internal control over financial reporting as of June 30, 2005, based on the
criteria established in Internal Control-Integrated Framework issued by the
Committee of Sponsoring Organizations of the Treadway Commission.

      We do not express an opinion or any other form of assurance on
management's statement referring to the remediation activities it plans to
undertake or the costs and related benefits of implementing new controls.

      We have also audited, in accordance with the standards of the Public
Company Accounting Oversight Board (United States), the consolidated financial
statements as of June 30, 2005 and 2004 and for each of the years in the three
year period ended June 30, 2005, of the Company and our report dated September
27, 2005, expressed an unqualified opinion on those consolidated financial
statements.

/s/ SQUAR, MILNER, REEHL & WILLIAMSON, LLP

Newport Beach, California
September 27, 2005


                                      F-6
<PAGE>

             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors
AccuPoll Holding Corp.

We have audited the accompanying consolidated balance sheets of AccuPoll Holding
Corp. and subsidiaries ("the "Company") as of June 30, 2005 and 2004, and the
related consolidated statements of operations, stockholders' deficit and cash
flows in each of the years in the three year period ended June 30, 2005. These
consolidated financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these consolidated
financial statements based on our audits.

We conducted our audits in accordance with standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audits to obtain reasonable assurance about whether the
consolidated financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the consolidated 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 consolidated financial statements referred to above present
fairly, in all material respects, the financial position of AccuPoll Holding
Corp. and subsidiaries as of June 30, 2005 and 2004, and the consolidated
results of their operations and their cash flows in each of the years in the
three year period ended June 30, 2005 in conformity with accounting principles
generally accepted in the United States of America.

The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in Note 1, the
Company has losses from operations through June 30, 2005 and an accumulated
deficit of approximately $34.5 million at that date, negative working capital at
June 30, 2005 approximating $4.4 million and a lack of operational history.
These factors, among others, raise substantial doubt about the Company's ability
to continue as a going concern. Management's plans in regard to these matters
are described in Note 1. The consolidated financial statements do not include
any adjustments that may result from the outcome of this uncertainty.

We have also audited, in accordance with the standards of the Public Company
Accounting Oversight Board (United States), the effectiveness of the Company's
internal control over financial reporting as of June 30, 2005 based on the
criteria established in Internal Control-Integrated Framework issued by the
Committee of Sponsoring Organizations of the Treadway Commission, and our report
dated September 27, 2005 expressed an unqualified opinion on management's
assessment of the lack of effectiveness of the Company's internal control over
financial reporting and an adverse opinion on the effectiveness of the Company's
internal control over financial reporting because of the existence of material
weaknesses.

/s/ SQUAR, MILNER, REEHL & WILLIAMSON, LLP
------------------------------------------
SQUAR, MILNER, REEHL & WILLIAMSON, LLP
NEWPORT BEACH, CALIFORNIA

SEPTEMBER 27, 2005


                                      F-7
<PAGE>

                             ACCUPOLL HOLDING CORP.
                           CONSOLIDATED BALANCE SHEETS
                             June 30, 2005 and 2004

<TABLE>
<CAPTION>
                                                                            2005             2004
                                                                       ------------      ------------
<S>                                                                    <C>               <C>
                                     ASSETS

CURRENT ASSETS
  Cash                                                                 $         --      $    113,789
  Inventory                                                                 275,243            16,269
  Prepaid expenses and other current assets                                 276,172           131,700
  Assets of discontinued operations                                          27,497           279,316
                                                                       ------------      ------------
         Total Current Assets                                               578,912           541,074

PROPERTY & EQUIPMENT, net                                                    14,038            10,258
CAPITALIZED SOFTWARE DEVELOPMENT COSTS, net                                 797,652         2,544,207
OTHER ASSETS                                                                 28,381            27,488
                                                                       ------------      ------------

         TOTAL ASSETS                                                  $  1,418,983      $  3,123,027
                                                                       ============      ============

                      LIABILITIES AND STOCKHOLDERS' DEFICIT

CURRENT LIABILITIES
  Cash overdraft                                                       $     56,357      $         --
  Accounts payable and accrued expenses                                   1,745,158         1,515,550
  Related party payable                                                   1,420,210         1,228,070
  Notes and accrued interest to related parties                             416,250                --
  Notes payable                                                              15,000            30,000
  Convertible debt, net of discount                                         626,125         3,304,600
  Put liability related to warrant issuance                                 163,760           163,760
  Liabilities of discontinued operations                                    543,786         1,110,148
                                                                       ------------      ------------
         Total Current Liabilities                                        4,986,646         7,352,128

EQUITY INSTRUMENTS SUBJECT TO RESCISSION                                  1,415,000         6,200,000

CONVERTIBLE DEBT, including accrued interest of $115,325                  3,541,571                --

COMMITMENTS AND CONTINGENCIES                                                    --                --

CONVERTIBLE SERIES A REDEEMABLE PREFERRED
  STOCK, $0.01 par value, 80,000 shares authorized; 3,100 and
  zero shares outstanding at June 30, 2005 and 2004, respectively;
  preference on liquidation of $100 per share                               310,000                --

STOCKHOLDERS' DEFICIT
  Common stock, par value of $0.001, 600,0000,000 shares
  authorized; 235,591,757 and 158,482,171 shares issued and
  outstanding at June 30, 2005 and 2004, respectively                       235,592           158,482
  Additional paid-in capital                                             25,448,544        12,046,817
  Subscription receivable                                                   (60,000)               --
  Accumulated Deficit                                                   (34,458,370)      (22,634,400)
                                                                       ------------      ------------
         Total Stockholders' Deficit                                     (8,834,234)      (10,429,101)
                                                                       ------------      ------------

         TOTAL LIABILITIES, REDEEMABLE PREFERRED STOCK AND
         STOCKHOLDERS' DEFICIT                                         $  1,418,983      $  3,123,027
                                                                       ============      ============
</TABLE>

        SEE ACCOMPANYING NOTES TO THESE CONSOLIDATED FINANCIAL STATEMENTS


                                      F-8
<PAGE>

                             ACCUPOLL HOLDING CORP.
                      CONSOLIDATED STATEMENTS OF OPERATIONS

                    Years Ended June 30, 2005, 2004, and 2003

<TABLE>
<CAPTION>
                                                                                                   2003
                                                              2005               2004          (as restated)
                                                         -------------      -------------      -------------
<S>                                                      <C>                <C>                <C>
NET SALES                                                $      17,416      $          --      $          --

COST OF SALES                                                   17,886                 --                 --
                                                         -------------      -------------      -------------

GROSS LOSS                                                        (470)                --                 --

EXPENSES
  General and administrative                                 2,466,929          2,047,089          1,054,390
  Professional fees                                          3,038,453          4,264,156          3,764,277
  Interest                                                   2,173,721          4,406,237             29,900
  Amortization of software costs                             2,763,874            231,292                 --
  Loss on disposal of investment                                    --          1,200,000                 --
                                                         -------------      -------------      -------------
                                                            10,442,977         12,148,774          4,848,567
                                                         -------------      -------------      -------------
NET LOSS FROM CONTINUING OPERATIONS                        (10,443,447)       (12,148,774)        (4,848,567)

DISCONTINUED OPERATIONS

  Net loss from discontinued operations                     (1,270,523)        (3,230,479)                --
                                                         -------------      -------------      -------------

NET LOSS                                                 $ (11,713,970)     $ (15,379,253)     $  (4,848,567)
                                                         =============      =============      =============

Basic and diluted loss per share
  Continuing operations                                  $       (0.05)     $       (0.09)     $       (0.05)


  Discontinued operations                                        (0.01)             (0.03)                --
                                                         -------------      -------------      -------------

  Net loss                                               $       (0.06)     $       (0.12)     $       (0.05)
                                                         =============      =============      =============

Weighted average number of common shares outstanding       207,458,783        130,782,481        106,687,447
                                                         =============      =============      =============
</TABLE>

        SEE ACCOMPANYING NOTES TO THESE CONSOLIDATED FINANCIAL STATEMENTS


                                      F-9
<PAGE>

                             ACCUPOLL HOLDING CORP.
                CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT

                    Years Ended June, 30 2005, 2004 and 2003

<TABLE>
<CAPTION>
                                                                                                  Common
                                                                         Common Stock              Stock       Additional
                                                                   --------------------------   Subscription    Paid-in
                                                                      Shares        Amount       Receivable     Capital
                                                                   ------------  ------------  ------------   ------------
<S>                                                                 <C>          <C>           <C>            <C>
Balance at June 30, 2002 (as restated)                              102,797,408  $    102,797  $    (12,500)  $  1,990,125

Issuance of common stock for services                                   448,764           450            --        497,140
Issuance of common stock in connection with cashless exercise of
  warrants                                                              208,540           209            --           (209)
Proceeds from the issuance of common stock in connection with the
  exercise of warrants                                                4,185,346         4,185            --        468,869
Proceeds from the issuance of common stock for cash                   5,305,905         5,305            --        823,327
Commissions and costs paid for fund raising activity                         --            --            --       (281,944)
Beneficial conversion feature in connection with the issuance of
  convertible debt                                                           --            --            --         50,000
Estimated fair value of warrants granted in connection with the
  issuance of notes payable                                                  --            --            --         20,000
Estimated fair value of warrants granted for services                        --            --            --      1,839,000
Estimated fair value of options granted for services                         --            --            --        273,084
Liability incurred in connection with the issuance of warrants               --            --            --       (113,750)
Equity instruments subject to rescission                                     --            --            --     (3,185,309)
Interest on equity instruments subject to rescission                         --            --            --       (157,753)
Write-off of subscription receivable                                         --            --        12,500             --

Net loss                                                                     --            --            --             --
                                                                   ------------  ------------  ------------   ------------

Balance at June 30, 2003 (restated)                                 112,945,963  $    112,946  $         --   $  2,222,580
                                                                   ============  ============  ============   ============

<CAPTION>
                                                                                       Total
                                                                    Accumulated    Stockholders'
                                                                      Deficit         Deficit
                                                                   ------------   ------------
<S>                                                                <C>            <C>
Balance at June 30, 2002 (as restated)                             $ (2,406,580)  $   (326,158)

Issuance of common stock for services                                        --        497,590
Issuance of common stock in connection with cashless exercise of
  warrants                                                                   --             --
Proceeds from the issuance of common stock in connection with the
  exercise of warrants                                                       --        473,054
Proceeds from the issuance of common stock for cash                          --        828,632
Commissions and costs paid for fund raising activity                         --       (281,944)
Beneficial conversion feature in connection with the issuance of
  convertible debt                                                           --         50,000
Estimated fair value of warrants granted in connection with the
  issuance of notes payable                                                  --         20,000
Estimated fair value of warrants granted for services                        --      1,839,000
Estimated fair value of options granted for services                         --        273,084
Liability incurred in connection with the issuance of warrants               --       (113,750)
Equity instruments subject to rescission                                     --     (3,185,309)
Interest on equity instruments subject to rescission                         --       (157,753)
Write-off of subscription receivable                                         --         12,500

Net loss                                                             (4,848,567)    (4,848,567)
                                                                   ------------   ------------

Balance at June 30, 2003 (restated)                                $ (7,255,147)  $ (4,919,621)
                                                                   ============   ============
</TABLE>

....continued

        SEE ACCOMPANYING NOTES TO THESE CONSOLIDATED FINANCIAL STATEMENTS


                                      F-10
<PAGE>

                             ACCUPOLL HOLDING CORP.
           CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT, Continued

                    Years Ended June, 30 2005, 2004 and 2003

<TABLE>
<CAPTION>
                                                                         Common Stock              Stock       Additional
                                                                   --------------------------   Subscription    Paid-in
                                                                      Shares        Amount       Receivable     Capital
                                                                   ------------  ------------  ------------   ------------
<S>                                                                 <C>          <C>           <C>           <C>
Balance at June 30, 2003 (restated), brought forward                112,945,963  $    112,946  $         --  $  2,222,580

Issuance of common stock for services                                    35,000            35            --        34,915
Issuance of common stock in connection with cashless exercise of
  options                                                             6,030,307         6,030            --        (6,030)
Issuance of common stock in connection with the conversion of
  convertible debt and accrued interest                               3,881,250         3,881            --       772,369
Proceeds from the issuance of common stock in connection with the
  exercise of warrants                                               20,502,794        20,503            --     3,778,113
Proceeds from the issuance of common stock for cash                   6,553,857         6,554            --       799,518
Commissions and costs paid for fund raising activity                         --            --            --      (277,000)
Beneficial conversion feature in connection with the issuance of
  convertible debt                                                           --            --            --     3,641,800
Estimated fair value of warrants granted in connection with the
  issuance of convertible debt                                               --            --            --       362,800
Estimated fair value of warrants granted for services                        --            --            --       786,000
Liability incurred in connection with the issuance of warrants               --            --            --       (50,010)
Acquisition of Z prompt                                               8,533,000         8,533            --     1,804,729
Equity instruments subject to rescission                                     --            --            --    (1,500,967)
Interest on equity instruments subject to rescission                         --            --            --      (322,000)

Net loss                                                                     --            --            --            --
                                                                   ------------  ------------  ------------  ------------

Balance at June 30, 2004                                            158,482,171  $    158,482  $         --  $ 12,046,817
                                                                   ============  ============  ============  ============

<CAPTION>
                                                                                        Total
                                                                     Accumulated    Stockholders'
                                                                       Deficit         Deficit
                                                                    ------------   ------------
<S>                                                                <C>            <C>
Balance at June 30, 2003 (restated), brought forward               $ (7,255,147)  $ (4,919,621)

Issuance of common stock for services                                        --         34,950
Issuance of common stock in connection with cashless exercise of
  options                                                                    --             --
Issuance of common stock in connection with the conversion of
  convertible debt and accrued interest                                      --        776,250
Proceeds from the issuance of common stock in connection with the
  exercise of warrants                                                       --      3,798,616
Proceeds from the issuance of common stock for cash                          --        806,072
Commissions and costs paid for fund raising activity                         --       (277,000)
Beneficial conversion feature in connection with the issuance of
  convertible debt                                                           --      3,641,800
Estimated fair value of warrants granted in connection with the
  issuance of convertible debt                                               --        362,800
Estimated fair value of warrants granted for services                        --        786,000
Liability incurred in connection with the issuance of warrants               --        (50,010)
Acquisition of Z prompt                                                      --      1,813,262
Equity instruments subject to rescission                                     --     (1,500,967)
Interest on equity instruments subject to rescission                         --       (322,000)

Net loss                                                            (15,379,253)   (15,379,253)
                                                                   ------------   ------------

Balance at June 30, 2004                                           $(22,634,400)  $(10,429,101)
                                                                   ============   ============
</TABLE>

....continued

        SEE ACCOMPANYING NOTES TO THESE CONSOLIDATED FINANCIAL STATEMENTS


                                      F-11
<PAGE>

                             ACCUPOLL HOLDING CORP.
           CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT, Continued

                    Years Ended June, 30 2005, 2004 and 2003

<TABLE>
<CAPTION>
                                                                         Common Stock               Stock       Additional
                                                                   --------------------------    Subscription    Paid-in
                                                                      Shares        Amount        Receivable     Capital
                                                                   ------------  ------------   ------------   ------------
<S>                                                                 <C>           <C>           <C>            <C>

Balance at June 30, 2004, brought forward                           158,482,171   $    158,482   $         --   $ 12,046,817

Issuance of common stock for services                                 5,427,701          5,427             --        553,498
Issuance of common stock in connection with cashless exercise of
  warrants                                                           19,637,978         19,638             --        (19,638)
Issuance of common stock in connection with the conversion of
  convertible debt and accrued interest                              14,104,714         14,105             --        912,395
Proceeds from the issuance of common stock in connection with the
  exercise of warrants                                                1,418,666          1,419             --        223,581
Proceeds from the issuance of common stock for cash                  35,111,738         35,112        (60,000)     3,281,181
Commissions and costs paid for fund raising activity                         --             --             --       (587,002)
Beneficial conversion feature in connection with the issuance of
  convertible debt                                                           --             --             --      1,544,245
Estimated fair value of warrants granted for services                        --             --             --      2,559,867
Issuance upon settlement of litigation                                1,508,789          1,509        148,500             --
Cancellation of shares issued in prior year                            (100,000)          (100)            --            100
Equity instruments previously subject to rescission                          --             --             --      4,785,000
Imputed dividend on preferred stock issuance                                 --             --             --             --

Net loss                                                                     --             --             --             --
                                                                   ------------   ------------   ------------   ------------

Balance at June 30, 2005                                            235,591,757   $    235,592   $    (60,000)  $ 25,448,544
                                                                   ============   ============   ============   ============

<CAPTION>
                                                                                       Total
                                                                    Accumulated    Stockholders'
                                                                      Deficit         Deficit
                                                                   ------------   ------------
<S>                                                                <C>            <C>

Balance at June 30, 2004, brought forward                           $(22,634,400)  $(10,429,101)

Issuance of common stock for services                                         --        558,925
Issuance of common stock in connection with cashless exercise of
  warrants                                                                    --             --
Issuance of common stock in connection with the conversion of
  convertible debt and accrued interest                                       --        926,500
Proceeds from the issuance of common stock in connection with the
  exercise of warrants                                                        --        225,000
Proceeds from the issuance of common stock for cash                           --      3,256,293
Commissions and costs paid for fund raising activity                          --       (587,002)
Beneficial conversion feature in connection with the issuance of
  convertible debt                                                            --      1,544,245
Estimated fair value of warrants granted for services                         --      2,559,867
Issuance upon settlement of litigation                                   150,009
Cancellation of shares issued in prior year                                   --             --
Equity instruments previously subject to rescission                           --      4,785,000
Imputed dividend on preferred stock issuance                            (110,000)      (110,000)

Net loss                                                             (11,713,970)   (11,713,970)
                                                                    ------------   ------------

Balance at June 30, 2005                                            $(34,458,370)  $ (8,834,234)
                                                                    ============   ============
</TABLE>

        SEE ACCOMPANYING NOTES TO THESE CONSOLIDATED FINANCIAL STATEMENTS


                                      F-12
<PAGE>

                             ACCUPOLL HOLDING CORP.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                    Years Ended June 30, 2005, 2004 and 2003

<TABLE>
<CAPTION>
                                                                                                  2003
                                                              2005              2004          (as restated)
                                                          ------------      ------------      ------------
<S>                                                       <C>               <C>               <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss from continuing operations                       $(10,443,447)     $(12,148,774)     $ (4,848,567)
Adjustments to reconcile net loss from continuing
  operations to net cash used in operating activities
    Depreciation and amortization                            2,769,685           231,769                --
    Loss on disposal of fixed assets                             3,162               400                --
    Estimated fair value of warrants granted in
      connection with notes payable                                 --                --            20,000
    Estimated fair value of options and warrants
      granted for services                                   2,559,867           786,000         2,112,084
    Estimated fair value of common stock issued for
      services                                                 708,935            34,950           497,590
    Amortization of estimated fair value of warrants
      granted and beneficial conversion feature in
      connection with the issuance of convertible
      notes payable                                          1,377,371         4,054,600                --
    Convertible debt issued for services                       323,658         1,276,000                --
    Loss on disposal of investment                                  --         1,200,000                --
    Write off of subscription receivable                            --                --            12,500
    Write off of prepaid consulting                                 --                --           286,000
    Changes in operating assets and liabilities:
      Inventories                                             (258,974)          (16,269)               --
      Prepaid Expenses                                        (144,472)         (129,200)           (2,500)
      Other Assets                                                (893)          117,960                --
      Accounts payable and accrued expenses                    864,920           448,105           755,211
      Related party payables                                   192,140           355,130            10,000

      Increase in software development costs                (1,017,319)       (1,371,600)         (530,013)
                                                          ------------      ------------      ------------
Net cash used in continuing operations                      (3,065,367)       (5,160,929)       (1,687,695)
                                                          ------------      ------------      ------------
  Net loss from discontinued operations                     (1,270,523)       (3,230,479)               --
  Changes in net assets and liabilities of                          --                --                --
    discontinued operations                                   (314,543)        2,641,726                --
                                                          ------------      ------------      ------------

Net cash used in discontinued operations                    (1,585,066)         (588,753)               --
                                                          ------------      ------------      ------------

Net cash used in operating activities                       (4,650,433)       (5,749,682)       (1,687,695)
                                                          ------------      ------------      ------------

CASH FLOWS FROM INVESTING ACTIVITIES
Increase in deferred acquisition costs                              --                --          (144,206)
Purchases of property and equipment                            (12,753)          (11,135)               --
Proceeds from related party note receivable                         --                --           300,000

Cash of acquired entity                                             --             2,368                --
                                                          ------------      ------------      ------------

Net cash (used in) provided by investing activities            (12,753)           (8,767)          155,794
                                                          ------------      ------------      ------------
</TABLE>

....continued

        SEE ACCOMPANYING NOTES TO THESE CONSOLIDATED FINANCIAL STATEMENTS


                                      F-13
<PAGE>

                             ACCUPOLL HOLDING CORP.
                CONSOLIDATED STATEMENTS OF CASH FLOWS, Continued

                    Years Ended June 30, 2005, 2004 and 2003

<TABLE>
<CAPTION>
                                                                                                   2003
                                                               2005              2004          (as restated)
                                                           ------------      ------------      ------------
<S>                                                             <C>               <C>               <C>
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of notes payable to related
  parties                                                       416,250           210,950           175,000
Principal payments of notes payable to related parties               --          (195,000)               --
Proceeds from issuance of convertible notes payable           1,200,000         1,528,600            50,000
Principal payments of convertible notes payable                (312,500)               --                --
Principal payments of notes payable                             (15,000)               --                --
Proceeds from issuance of preferred stock                       310,000                --                --
Proceeds from issuance of common stock                        2,669,290           806,072           546,688
Proceeds from issuance of commons stock upon exercise
  of warrants, net                                              225,000         3,521,616           473,057
                                                           ------------      ------------      ------------

Net cash provided by financing activities                     4,493,040         5,872,238         1,244,742
                                                           ------------      ------------      ------------

Net increase (decrease) in cash                                (170,146)          113,789          (287,159)
  Cash at beginning of period                                   113,789                --           287,159
                                                           ------------      ------------      ------------
  Cash (overdraft) at end of period                        $    (56,357)     $    113,789      $         --
                                                           ============      ============      ============

SUPPLEMENTAL CASH FLOW INFORMATION
  Cash paid during the year for interest                   $         --      $         --      $         --
                                                           ============      ============      ============
  Cash paid during the year for income taxes               $      3,318      $        800      $        800
                                                           ============      ============      ============
</TABLE>

SUPPLEMENTAL DISCLOSURE OF NON-CASH FINANCING AND INVESTING ACTIVITIES

Non-cash financing and investing activities consist of the following:

<TABLE>
<CAPTION>
                                                                                                2003
                                                              2005             2004         (as restated)
                                                          ------------     ------------     ------------
<S>                                                       <C>              <C>              <C>
Fair value of beneficial conversion feature with
  convertible debt                                        $  1,389,245     $  3,641,800     $     50,000
                                                          ============     ============     ============
Change in equity instruments subject to rescission        $ (4,785,000)    $  1,822,967     $  3,343,062
                                                          ============     ============     ============
Convertible debt issued in settlement of accrued
  interest                                                $    519,987     $         --     $         --
                                                          ============     ============     ============
Common stock issued upon debt conversion                  $    926,500     $    776,250     $         --
                                                          ============     ============     ============
Issuance of common stock for acquisition of Z prompt,
  Inc                                                     $         --     $  1,813,262     $         --
                                                          ============     ============     ============
Imputed dividend on convertible redeemable preferred
  stock                                                   $    110,000     $         --     $         --
                                                          ============     ============     ============
Liability incurred in connection with issuance of
  warrants                                                $         --     $     50,010     $    113,750
                                                          ============     ============     ============
Fair value of warrant issued with convertible debt        $     45,000     $    362,800     $     20,000
                                                          ============     ============     ============
Write-off of subscription receivable                      $         --     $         --     $     12,500
                                                          ============     ============     ============
Par value of common stock issued with cashless
  exercise of warrants and options                        $     19,538     $      6,030     $        209
                                                          ============     ============     ============
</TABLE>

        SEE ACCOMPANYING NOTES TO THESE CONSOLIDATED FINANCIAL STATEMENTS


                                      F-14
<PAGE>

AccuPoll Holding Corp.
Notes to Consolidated Financial Statements June 30, 2005

NOTE 1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

ORGANIZATION

AccuPoll Holding Corporation, a Nevada corporation (the "Parent Company"),
principally operates through its wholly owned subsidiary AccuPoll, Inc., which
was incorporated on August 9, 2001 in Delaware. AccuPoll, Inc. is engaged in the
design and development of a voting system with an intuitive touch-screen
interface (the "Voting System") that provides a polling place electronic voting
solution that is reliable, accurate, immediate, secure, easy to use,
confidential and auditable primarily to states and counties in the United
States. The Voting System has the ability to simultaneously produce two
different electronic audit trails (recorded on both the polling place
administrative work station and the local voting station), in addition to
generating a printed-paper ballot. The Parent Company completed a reverse
acquisition with a publicly traded company (see Note 2) in May 2002, and its
common stock is quoted on the Over-The-Counter Bulletin Board under the symbol
"ACUP." For financial reporting purposes, the Parent Company was classified as a
development stage enterprise until November 2003.

PRINCIPLES OF CONSOLIDATION

GENERAL

The accompanying consolidated financial statements include the accounts of the
Parent Company and its wholly-owned subsidiary AccuPoll, Inc. In addition, the
accounts of Z prompt, Inc. ("Z prompt"), a wholly-owned subsidiary, are included
in such financial statements as discontinued operations. All significant
inter-company balances and transactions have been eliminated in consolidation.

Except where the context requires otherwise, the entities named in the preceding
paragraph are hereinafter collectively referred to as the "Company."

BANKRUPTCY OF Z PROMPT

Z prompt filed voluntary bankruptcy in March 2004. The Company is the single
largest pre-petition creditor of Z prompt.

Management determined that it would not have been meaningful to de-consolidate
the accounts of Z prompt at June 30, 2004 because the Company (a) had a
substantial negative investment in Z prompt as of June 30, 2004, and (b)
expected to re-gain control of this subsidiary based on the expectation that Z
prompt will be able to negotiate a confirmed reorganization plan and emerge from
bankruptcy by approximately March 2005. In addition, as described in Note 9, the
Company and certain of its officers and principal stockholders were involved in
civil litigation with certain former stockholders and officers of Z prompt. The
Z prompt bankruptcy case was dismissed in February 2005. See Note 3 for
additional information regarding Z prompt.

AFFILIATED ENTITY

As further explained below in the "Variable Interest Entity" section of this
note, the accounts of affiliate Web Tools International, Inc. ("WTI") were
consolidated with those of the Company as of January 1, 2004 in accordance with
Financial Accounting Standards Board ("FASB") Interpretation ("FIN") No. 46. For
reasons discussed in Note 8 under the caption "Master Services Agreement' and
below under the caption "Variable Interest Entity", WTI was de-consolidated as
of April 1, 2004.


                                      F-15
<PAGE>

GOING CONCERN/LIQUIDITY CONSIDERATIONS

In May 2005 the Company received federal certification of its Voting System
allowing the Company to market the system to prospective customers. The Company
has entered into revenue-generating contracts from its Voting System operations
in the fourth quarter of fiscal year 2005 with two Texas counties; however there
is no assurance of any future revenues or how the product will be received by
the market at large. The Company will require substantial additional funding for
continuing the development and marketing of its product. There is no assurance
that the Company will be able to obtain sufficient additional funds when needed
or that such funds, if available, will be obtainable on terms satisfactory to
the Company.

Management has taken actions to address these matters, which include:

o Retention of experienced management personnel with particular skills in the
commercialization and marketing of such products;

o Attainment of technology to develop such products and additional products; and

o Raising additional funds through the sale of debt and/or equity securities.

Federal, State and various foreign government regulations govern the sale of the
Company's products. There can be no assurance that the Company will receive
further regulatory approvals which may be required to market its products.

The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern which contemplates, among
other things, the realization of assets and satisfaction of liabilities in the
ordinary course of business. The Company has incurred losses through June 30,
2005, has an accumulated deficit and negative working capital at that date of
approximately $34.5 million and $4.4 million, respectively, and has a lack of
operational history which, among other factors, raise substantial doubt about
its ability to continue as a going concern. The Company intends to fund
operations through sales of the Voting System, and although the Company just
recently received federal certification of its Voting System in May 2005 and has
entered into sales contracts, there is no commitment by any customers or
prospects for the purchase of any of the proposed products in quantities
sufficient to fund the operations of the Company. In the absence of significant
sales and profits, the Company may seek to raise additional funds to meet its
working capital requirements through debt and/or equity financing arrangements.
Management believes that we will require an additional $6.4 million in financing
over the next twelve months to pay past due payables and continue operations. Of
the $6.4 million in financing needed, management believes that we will need
approximately $2 million to pay past due payables, $3.8 million to continue
operations as currently conducted for the next twelve months and $0.6 million
for product development. The successful outcome of future activities cannot be
determined at this time, and there is no assurance that, if achieved, the
Company will have sufficient funds to execute its intended business plan or
generate positive operating results.

These circumstances raise substantial doubt about the Company's ability to
continue as a going concern. The accompanying consolidated financial statements
do not include any adjustments that might result from the outcome of this
uncertainty.

OTHER RISKS AND UNCERTAINTIES

The Company intends to operate in an industry that is subject to intense
competition, government regulation and technological change. The Company's
operations are subject to significant risks and uncertainties including
financial, operational, technological, regulatory and other risks associated
with an emerging business, including the potential risk of business failure.

From time to time, the Company maintains cash balances at certain institutions
in excess of the FDIC limit of $100,000. The Company has not incurred any losses
on such balances and believes it is not exposed to any significant credit risks
on cash.


                                      F-16
<PAGE>

USE OF ESTIMATES

The Company prepares its consolidated financial statements in conformity with
accounting principles generally accepted in the United States of America
("GAAP"), which require 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 reported
amounts of revenues and expenses during the reporting period. Significant
estimates made by management include realization of long-lived assets, equity
instruments subject to rescission, valuation of stock options and warrants, and
the continued consolidation of a wholly-owned subsidiary in bankruptcy. Actual
results could differ from those estimates.

SOFTWARE DEVELOPMENT COSTS

In accordance with Statement of Financial Accounting Standards ("SFAS") No. 86
"Accounting for the Costs of Computer Software to be Sold, Leased, or Otherwise
Marketed," the Company capitalizes certain costs related to the development of
new software products or the enhancement of existing software products for sale
or license. These costs are capitalized from the point in time that
technological feasibility has been established, as evidenced by a working model
or detailed working-program design to the point in time that the product is
available for general release to customers. Capitalized software development
costs are amortized on a straight-line basis over the estimated economic life of
the products, beginning (as applicable) with the general product release to
customers or when the Voting System qualified under certain federal standards.
Research and development costs incurred prior to establishing technological
feasibility and costs incurred subsequent to the events described in the
preceding sentence are charged to expense as incurred.

The development of our voting system first met technological feasibility
requirements in fiscal 2003. At that time we commenced capitalization of
development costs to meet federal 1990 voting system standards. Our system was
qualified as meeting certain 1990 federal voting system standards in late March
2004 at which time we ceased capitalization of costs and began amortizing them.
The costs of developing our voting system to 1990 standards totaling
approximately $2,720,000 are fully amortized at June 30, 2005. Upon obtaining
the 1990 voting system standards we immediately began to further develop our
voting system to meet certain 2002 federal voting system standards, for which we
received qualification in May 2005. We began amortizing the capitalized
development costs incurred to meet the 2002 voting system standards of
approximately $1,053,000 in June 2005. The Company periodically evaluates
whether events or circumstances have occurred that indicate that the remaining
useful lives of the capitalized software development costs should be revised or
that the remaining balance of such assets may not be recoverable. In July 2005,
the Company re-evaluated the estimated life of its software as a result of the
change to 2002 voting standards. Consequently, the estimated useful life was
reduced to one year.

FAIR VALUE OF FINANCIAL INSTRUMENTS

SFAS No. 107, "Disclosures About Fair Value of Financial Instruments," requires
disclosure of fair value information about financial instruments when it is
practicable to estimate that value. The carrying amount of the Company's
accounts payable and accrued expenses approximates their estimated fair values
due to the short-term maturities of those financial instruments. In the opinion
of management, the fair value of payables to related parties cannot be estimated
without incurring excessive costs; for that reason, the Company has not provided
such disclosure. Other information about related-party liabilities (such as the
carrying amount, the interest rate, and the maturity date) is provided, where
applicable, elsewhere in these notes to consolidated financial statements.

STOCK-BASED COMPENSATION

The Company accounts for stock-based compensation issued to employees using the
intrinsic value based method as prescribed by Accounting Principles Board
Opinion No. 25 ("APB 25"), "Accounting for Stock Issued to Employees." Under the
intrinsic value based method, compensation is the excess, if any, of the fair
value of the stock at the grant date (or other measurement date) over the amount
an employee must pay to acquire the stock. Compensation, if any, is recognized
over the applicable service period, which is usually the vesting period.


                                      F-17
<PAGE>

SFAS No. 123, "Accounting for Stock-Based Compensation," if fully adopted,
changes the method of accounting for employee stock-based compensation to the
fair value based method. In addition, under this pronouncement, the fair value
of options and warrants issued to non-employees is estimated using an option
pricing model that takes into account the stock price at the grant date, the
exercise price, the expected life of the equity instrument, and the annual rate
of quarterly dividends. Compensation expense, if any, is recognized over the
applicable service period, which is usually the vesting period.

FIN No. 44, "Accounting for Certain Transactions Involving Stock Compensation,
an Interpretation of APB 25," clarifies the application of APB 25 for (a) the
definition of "employee" for purposes of applying APB 25, (b) the criteria for
determining whether a plan qualifies as a non-compensatory plan, (c) the
accounting consequences of various modifications to the terms of a previously
fixed stock option or award, and (d) accounting for an exchange of stock
compensation awards in a business combination. Management believes that the
Company accounts for transactions involving stock-based employee compensation in
accordance with FIN No. 44.

SFAS No. 148, "Accounting for Stock-Based Compensation - Transition and
Disclosure, an amendment of SFAS 123," was issued in December 2002 and is
effective for fiscal years ended after December 15, 2002. SFAS No. 148 provides
alternative methods of transition for a voluntary change to the fair value
method of accounting for stock-based employee compensation. In addition, this
Statement amends the disclosure requirements of SFAS No. 123 to require
prominent disclosure in both annual and interim financial statements about (a)
the method of accounting for stock-based employee compensation and (2) the
effect of the method used on reported results.

The adoption of the accounting methodology of SFAS No. 123 is optional for
stock-based employee compensation, and the Company has elected to continue
accounting for options issued to employees using APB 25. However, pro forma
disclosures, as if the Company adopted the cost recognition requirements of SFAS
No. 123, are required to be presented.

On October 18, 2004, the Company adopted the AccuPoll Holding Corp. 2004
Incentive Stock Option Plan (2004 ISOP). In April 2005, the Company's Board of
Directors approved the distribution of stock options under the 2004 ISOP to
certain employees and consultants. Prior to the adoption of the 2004 ISOP, there
have been non-plan options granted by the Company to certain employees. There is
no stock-based employee compensation expense reflected in net loss for fiscal
2005, fiscal 2004, or 2003 because (a) no options issued under the 2004 ISOP
have vested as of June 30, 2005, and (b) non-plan options granted to employees
had an exercise price equal to or greater than the market value of the
underlying common stock on the grant date. The following table illustrates the
effect on net loss and loss per common share if the Company had applied the fair
value recognition provisions of SFAS 123 to stock-based employee compensation.

<TABLE>
<CAPTION>
                                                           2005              2004              2003
                                                       ------------      ------------      ------------
<S>                                                    <C>               <C>               <C>
Net loss attributable to common stockholders *         $(11,835,970)     $(15,701,253)     $ (5,006,567)
Add: total stock-based employee compensation
  expense determined under fair value based method
  for all awards                                           (726,840)       (1,421,100)         (598,230)
                                                       ------------      ------------      ------------
  Pro-forma net loss                                   $(12,562,810)     $(17,122,353)     $ (5,604,797)
Basic and diluted loss per common share:
  As reported                                          $      (0.06)     $      (0.12)     $      (0.05)
  Pro-forma                                            $      (0.06)     $      (0.13)     $      (0.05)
</TABLE>

* These amounts include interest related to certain equity instruments subject
to rescission (see Note 10).


                                      F-18
<PAGE>

SFAS No. 123-R, "Share-Based Payment", a revision to SFAS No. 123, was issued in
December 2004 and requires that the compensation costs relating to share-based
payment transactions (including the cost of all employee stock options) be
recognized in the financial statements. That cost will be measured based on the
estimated fair value of the equity or liability instruments issued. SFAS No.
123-R covers a wide range of share-based compensation arrangements including
share options, restricted share plans, performance-based awards, share
appreciation rights, and employee share purchase plans. SFAS No. 123-R replaces
SFAS No. 123, and supersedes APB Opinion No. 25. Due to a recent SEC
announcement delaying the effective date, the Company will be required to apply
SFAS No. 123-R as of July 1, 2006. Thus, the Company's consolidated financial
statements will reflect an expense for (a) all share-based compensation
arrangements granted after June 30, 2005 and for any such arrangements that are
modified, cancelled, or repurchased after that date, and (b) the portion of
previous share-based awards for which the requisite service has not been
rendered as of that date, based on the grant-date estimated fair value.

BENEFICIAL CONVERSION FEATURE

The convertible feature of certain notes payable (see Notes 6) provide for a
rate of conversion that is below market value. This feature is normally
characterized as a beneficial conversion feature ("BCF"). Pursuant to Emerging
Issues Task Force ("EITF") Issue No. 98-5 ("EITF 98-5"), "Accounting For
Convertible Securities with Beneficial Conversion Features or Contingently
Adjustable Conversion Ratio," and EITF Issue No. 00-27, "Application of EITF
Issue No. 98-5 To Certain Convertible Instruments," the Company has estimated
the fair value of such BCF to these notes payable.

For the years ended June 30, 2005, 2004, and 2003, the Company recorded BCFs
totaling approximately $1,544,245, $3,641,800, and $50,000, respectively, and
expensed to interest expense approximately $1,377,000, $3,640,000 and $50,000,
respectively.

DISCONTINUED OPERATIONS

In accordance with SFAS No. 144, the Company accounts for the results of
operations of a component of an entity that has been disposed or that meets all
of the "held for sale" criteria, as discontinued operations, if the component's
operations and cash flows have been (or will be) eliminated from the ongoing
operations of the entity as a result of a disposal transaction and the Company
will not have any significant continuing involvement in the operations of the
component after the disposal transaction. The "held for sale" or "of
discontinued operations" classification requires having the appropriate
approvals by our management, Board of Directors, as applicable, and meeting
other criteria. A component of an entity subject to shut-down is classified as
discontinued operations when on-going operations cease. Consequently, in June
2005, Z prompt, Inc. was classified as discontinued operations when management
approvals were obtained, customer contracts terminated, and employees were
notified, among other conditions.

CASH AND CASH EQUIVALENTS

The Company considers all highly liquid investments with an original maturity of
three months or less at the date of acquisition to be cash equivalents. There
were no cash equivalents at June 30, 2005 and 2004.

INVENTORIES

Inventories are stated at the lower of cost or estimated market, and consist
entirely of finished goods (Voting System machines). Cost is determined on a
weighted average basis that approximates the first-in, first-out method. Market
is estimated by comparison with recent purchases or net realizable value. The
net realizable value is estimated based on management's forecast for sales of
the Company's products or services in the ensuing years. The industry in which
the Company operates is characterized by technological advancement and change.
Should demand for the Company's products prove to be significantly less than
anticipated, the ultimate realizable value of the Company's inventory could be
substantially less than the amount shown in the accompanying consolidated
balance sheets.


                                      F-19
<PAGE>

REVENUE RECOGNITION

The Company records sales when goods are shipped to the customer or upon the
completion of the service. Amounts received prior to the completion of the
earnings process, such as maintenance contracts paid in advance, are included in
deferred revenues in the accompanying consolidated balance sheets.

The Securities and Exchange Commission (the "SEC") has issued Staff Accounting
Bulletin No. 104 ("SAB 104"), "Revenue Recognition," which outlines the basic
criteria that must be met to recognize revenue and provides guidance for
presentation of revenue and for disclosures related to revenue recognition
policies in financial statements filed with the SEC. Management believes that
the Company's revenue recognition accounting policy conforms to SAB 104.

INDEFINITE-LIFE INTANGIBLE ASSETS

Goodwill represents the excess of the purchase price over the estimated fair
value of identifiable net assets acquired. The Company has applied the
provisions of SFAS No. 142, "Goodwill and Other Intangible Assets," in
accounting for goodwill. SFAS No. 142 requires that goodwill and other
intangible assets that have indefinite lives not be amortized, but instead be
tested at least annually for impairment when events or changes in circumstances
indicate that the asset might be impaired. For indefinite-life intangible
assets, impairment is tested by comparing the carrying value of the asset to the
estimated fair value of the reporting unit to which they are assigned. The
Company has no indefinite life assets at June 30, 2005.

IMPAIRMENT OF LONG LIVED-ASSETS

The Company periodically evaluates the carrying value of its long-lived assets
under the provisions of SFAS No. 144, "Accounting for the Impairment or Disposal
of Long-Lived Assets." SFAS No. 144 addresses financial accounting and reporting
for the impairment or disposal of long-lived assets, and supersedes (a) SFAS No.
121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to be Disposed Of," and (b) the accounting and reporting provisions of
APB Opinion No. 30 ("Reporting the Effects of the Disposal of a Segment of a
Business, and Extraordinary, Unusual and Infrequently Occurring Events and
Transactions") for the disposal of a segment of a business as previously defined
in that Opinion. SFAS No. 144 also amends Accounting Research Bulletin ("ARB")
No. 51, "Consolidated Financial Statements," to eliminate the exception to
consolidation of a subsidiary when control is likely to be temporary.

SFAS No. 144 requires impairment losses to be recorded on long-lived assets used
in operations, including amortizable intangible assets when indicators of
impairment are present. Indicators of impairment include an economic downturn or
a change in the assessment of future operations. In the event a condition is
identified that may indicate an impairment issue, an assessment is performed
using a variety of methodologies, including analysis of undiscounted future cash
flows, estimates of sales proceeds and independent appraisals. If such assets
are impaired, the expense recognized is the amount by which the carrying amount
of the asset exceeds the estimated fair value. Assets to be disposed of are
reported at the lower of the carrying value or the estimated fair market value,
less cost to sell.

Goodwill related to the Z prompt acquisition totaling $2,542,752 was written-off
during the year ended June 30, 2004 and is included in Net Loss from
Discontinued Operations in the accompanying consolidated statement of
operations.

DEFERRED INCOME TAXES AND VALUATION ALLOWANCE

Deferred income taxes reflect the estimated tax effect of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts reported for income tax purposes. The Company records a
valuation allowance for deferred tax assets when, based on management's best
estimate of taxable income (if any) in the foreseeable future, it is more likely
than not that some portion of the deferred tax assets may not be realized.


                                      F-20
<PAGE>

ADVERTISING

The Company expenses the cost of advertising as incurred. Advertising expense
approximated $97,000, $170,000, and $310,000 for the years ended June 30, 2005,
2004 and 2003, respectively.

RESEARCH AND DEVELOPMENT

Certain expenditures for research and development activities relating to
computer software to be sold, leased or otherwise marketed are charged to
expense as incurred. Such expenditures approximated $188,000 and $137,000 for
the years ended June 30, 2005 and 2004, respectively. There were no such
expenditures for the year ended June 30, 2003.

LOSS PER COMMON SHARE

Under SFAS No. 128, "Earnings per Share," basic earnings per share is computed
by dividing net loss available to common shareholders by the weighted-average
number of common shares outstanding during the period of computation. Diluted
earnings per common share is computed similar to basic earnings per common
share, except that the denominator is increased to include the number of
additional common shares that would have been outstanding if the potential
common shares had been issued and the additional common shares were dilutive
(approximating 413,000,000, 75,000,000, and 31,700,000 shares at June 30, 2005,
2004, and 2003, respectively), based on the treasury stock method. Because the
Company has incurred net losses, basic and diluted losses per common share are
equal because additional potential common shares would be anti-dilutive.

<TABLE>
<CAPTION>
                                                           2005               2004               2003
                                                      -------------      -------------      -------------
<S>                                                   <C>                <C>                <C>
Net loss, as reported                                 $ (11,713,970)     $ (15,379,253)     $  (4,848,567)
Interest related to equity instruments subject to
  rescission                                               (122,000)          (322,000)          (158,000)
                                                      -------------      -------------      -------------
Net loss attributable to common stockholders          $ (11,835,970)     $ (15,701,253)     $  (5,006,567)
                                                      =============      =============      =============
Weighted-average common shares used to compute
  basic and diluted loss per common share               207,458,783        130,782,481        106,687,447
Basic and diluted loss per common share               $       (0.06)     $       (0.12)     $       (0.05)
                                                      =============      =============      =============
</TABLE>

DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

SFAS No. 133, "Accounting For Derivative Instruments and Hedging Activities" (as
amended by SFAS Nos. 137, 138, 140, 141 and 145), establishes accounting and
reporting standards for derivative instruments, including certain derivative
instruments embedded in other contracts, and for hedging activities. It requires
that an entity recognize all derivatives as either assets or liabilities on the
balance sheet at their fair value. The Company has no derivatives or hedging
activities as of June 30, 2005, 2004 or 2003.

COMPREHENSIVE INCOME

SFAS No. 130, "Reporting Comprehensive Income," establishes the standards for
reporting and display of comprehensive income and its components in a full set
of general-purpose financial statements. The adoption of SFAS 130 has not
materially impacted the Company's financial position or results of operations.

SEGMENT INFORMATION

SFAS 131, "Disclosures about Segments of an Enterprise and Related Information,"
changed the way public companies report information about segments of their
business in their annual financial statements and requires them to report
selected segment information in their quarterly reports issued to shareholders.
It also requires entity-wide disclosures about the products and services an
entity provides, the foreign countries in which it holds significant assets and
its major customers. At June 30, 2005, 2004, and 2003 the Company operates in
one segment, as disclosed in the accompanying consolidated statements of
operations.


                                      F-21
<PAGE>

VARIABLE INTEREST ENTITY

In December 2003, the FASB issued FIN No. 46-R, "Consolidation of Variable
Interest Entities (revised December 2003), an Interpretation of ARB 51." The
primary objectives of FIN No. 46-R are to provide guidance on the identification
of entities for which control is achieved through means other than voting rights
(variable interest entities, or "VIEs"), and how to determine when and which
business enterprise (if any) should consolidate the VIE. This new model for
consolidation applies to an entity for which either: (a) the equity investors do
not have a controlling financial interest; or (b) the equity investment at risk
is insufficient to finance that entity's activities without receiving additional
subordinated financial support from other parties. In addition, FIN No. 46-R
requires that both the primary beneficiary and all other enterprises with a
significant variable interest in a VIE make additional disclosures. As amended
in December 2003, the effective dates of FIN No. 46-R for the Company are as
follows: (a) For interests in special-purpose entities: the first period ended
after December 15, 2003; and (b) For all other types of VIEs: the first period
ended after March 15, 2004.

The Company is associated with WTI through common ownership; in addition, until
April 2004 the Company was a major customer of WTI for software development
services. (WTI derived approximately 75% and 98% of their revenue from services
provided to the Company for the year ended June 30, 2003 and the seven months
ended January 31, 2004, respectively). Based on these and other factors, the
Company determined that, as of January 1, 2004, (i) WTI is a VIE and (ii) the
Company was its primary beneficiary. Therefore, effective January 1, 2004, the
accounts of WTI were consolidated with those of the Company. For reasons
explained in Note 8 under the caption "Master Services Agreement", the accounts
of WTI were de-consolidated effective April 1, 2004.

SIGNIFICANT RECENT ACCOUNTING PRONOUNCEMENTS

In April 2003, the FASB issued SFAS No. 149, "Amendments of Statement 133 on
Derivative Instruments and Hedging Activities," which amends and clarifies
financial accounting and reporting for derivative instruments, including certain
derivative instruments embedded in other contracts and for hedging activities
under SFAS No. 133. This pronouncement is effective for contracts entered into
or modified after June 30, 2003 (with certain exceptions), and for hedging
relationships designated after June 30, 2003. The adoption of SFAS No. 149 did
not have a material impact on the Company's consolidated financial statements.

In May 2003, the FASB issued SFAS No. 150, "Accounting for Certain Financial
Instruments with Characteristics of both Liabilities and Equity." SFAS No. 150
establishes standards for how a company classifies and measures certain
financial instruments with characteristics of both liabilities and equity, and
is effective for public companies as follows: (i) in November 2003, the FASB
issued FASB Staff Position ("FSP") FAS 150-03 ("FSP 150-3"), which defers
indefinitely (a) the measurement and classification guidance of SFAS No. 150 for
all mandatorily redeemable non-controlling interests in (and issued by)
limited-life consolidated subsidiaries, and (b) SFAS No. 150's measurement
guidance for other types of mandatorily redeemable non-controlling interests,
provided they were created before November 5, 2003; (ii) for financial
instruments entered into or modified after May 31, 2003 that are outside the
scope of FSP 150-3; and (iii) otherwise, at the beginning of the first interim
period beginning after June 15, 2003. The Company adopted SFAS No. 150 on the
aforementioned effective dates. The adoption of this pronouncement did not have
a material impact on the Company's results of operations or financial condition.

In December 2003, the FASB issued a revision of SFAS No. 132, Employers'
Disclosures About Pensions And Other Postretirement Benefits. This pronouncement
("SFAS No. 132-R") expands employers' disclosures about pension plans and other
post-retirement benefits, but does not change the measurement or recognition of
such plans required by SFAS No. 87, No. 88, or No. 106. SFAS No. 132-R retains
the existing disclosure requirements of SFAS No. 132, and requires certain
additional disclosures about defined benefit post-retirement plans. Except as
described in the following sentence, SFAS No. 132-R is effective for foreign
plans for fiscal years ending after June 15, 2004; after the effective date,
restatement for some of the new disclosures is required for earlier annual
periods. Some of the interim-period disclosures mandated by SFAS No. 132-R (such
as the components of net periodic benefit cost, and certain key assumptions) are
effective for foreign plans for quarters beginning after December 15, 2003;
other interim-period disclosures will not be required for the Company until the
first quarter of 2005. Since the Company does not have any defined benefit
post-retirement plans, the adoption of this pronouncement did not have any
impact on the Company's results of operations or financial condition.


                                      F-22
<PAGE>

In December 2004, the FASB issued SFAS No. 153, "Exchange of Nonmonetary Assets,
and Amendment of APB No. 29, "Accounting for Nonmonetary Transaction " The
amendments made by SFAS No. 153 are based on the principle that exchanges of
nonmonetary assets should be measured using the estimated fair value of the
assets exchanged. SFAS No. 153 eliminates the narrow exception for nonmonetary
exchanges of similar productive assets, and replaces it with a broader exception
for exchanges of nonmonetary assets that do not have commercial substance. A
nonmonetary exchange has "commercial substance" if the future cash flows of the
entity are expected to change significantly as a result of the transaction. This
pronouncement is effective for nonmonetary exchanges in fiscal periods beginning
after June 15, 2005. The adoption of this pronouncement is not expected to have
any impact on the Company's results of operations or financial condition.

In May 2005, the FASB issued SFAS No. 154, "Accounting Changes and Error
Corrections," which replaces APB Opinion No. 20 and FASB Statement No. 3. This
pronouncement applies to all voluntary changes in accounting principle, and
revises the requirements for accounting for and reporting a change in accounting
principle. SFAS No. 154 requires retrospective application to prior periods'
financial statements of a voluntary change in accounting principle, unless it is
impracticable to do so. This pronouncement also requires that a change in the
method of depreciation, amortization, or depletion for long-lived, non-financial
assets be accounted for as a change in accounting estimate that is effected by a
change in accounting principle. SFAS No. 154 retains many provisions of APB
Opinion 20 without change, including those related to reporting a change in
accounting estimate, a change in the reporting entity, and correction of an
error. The pronouncement also carries forward the provisions of SFAS No. 3 which
govern reporting accounting changes in interim financial statements. SFAS No.
154 is effective for accounting changes and corrections of errors made in fiscal
years beginning after December 15, 2005. The Statement does not change the
transition provisions of any existing accounting pronouncements, including those
that are in a transition phase as of the effective date of SFAS No. 154. The
Company identified adjustments to its previously reported quarterly results for
fiscal 2005. (See Note 12) There was no impact to prior years.

Other significant recent accounting pronouncements issued by the FASB (including
its Emerging Issues Task Force), the American Institute of Certified Public
Accountants, and the SEC are discussed elsewhere in these notes to the
consolidated financial statements. In the opinion of management, significant
recent accounting pronouncements did not or will not have a material effect on
the consolidated financial statements, other than FIN No. 46 as discussed above.

STOCK DIVIDEND

Effective July 18, 2002, the Company's Board of Directors approved a stock
dividend that was accounted for as a four-for-one stock split. All references
throughout these consolidated financial statements and notes to the number of
shares, per share amounts, stock options, and market prices of the Company's
common stock have been restated to reflect such stock dividend.

REDEEMABLE PREFERRED STOCK

Preferred stock which has one of the following characteristics (1) redeemable at
a fixed or determinable price on a fixed or determinable date or dates, (2)
redeemable at the option of the holder, or (3) with conditions for redemption
which are not solely within our control, is reported outside of stockholders'
equity (deficit), regardless of how remote the redemption event may be, pursuant
to SEC interpretation. See also Note 10.


                                      F-23
<PAGE>

EQUITY INSTRUMENTS SUBJECT TO RESCISSION

The Company accounts for common stock and other equity instruments that may be
subject to rescission claims at estimated fair value (based on applicable
measurement criteria) in accordance with the SEC's promulgated accounting rules
and interpretive releases. Since equity instruments subject to rescission are
redeemable at the holder's option or upon the occurrence of an uncertain event
not solely within the Company's control, such equity instruments are outside the
scope of SFAS No. 150 and its related interpretations. Under the SEC's
interpretation of GAAP, reporting such claims outside of stockholders' equity
(as "mezzanine equity") is required, regardless of how remote the redemption
event may be. See also Note 10.

RESTATEMENTS

As previously reported, the accompanying consolidated statement of operations
for the year ended June 30, 2003 has been restated as described in the following
paragraph. All financial information included in these notes to consolidated
financial statements that relates to the quarters ended September 30, 2003 and
December 31, 2003 reflects (a) the applicable adjustments described in the
amended Form 10-Q's for such periods, and (b) the restatement of the balance
sheets as of those dates to reflect equity instruments subject to rescission. In
addition, all financial information included in these notes to consolidated
financial statements for the first three quarters of fiscal 2003 has been
adjusted.

Subsequent to the original issuance of the Company's June 30, 2003 financial
statements, it was determined that consulting services, for which the Company
had granted a warrant to purchase 1 million shares of common stock with an
estimated fair value of $655,000, had not been and will not be performed.
Therefore, the accompanying consolidated statements of operations for the year
ended June 30, 2003 and for the period from Inception through June 30, 2003 have
been restated. The effect of such restatement was to reduce the previously
reported net loss by $655,000 with no effect on (rounded) loss per common share.

RECLASSIFICATIONS

Certain reclassifications have been made to the 2004 and 2003 financial
statement presentation to conform to the current year's presentation.

NOTE 2. REVERSE ACQUISITION

On May 20, 2002, Western International Pizza Corporation ("WIPC"), a publicly
traded company, entered into a Stock Exchange Agreement (the "Exchange
Agreement") with AccuPoll, Inc ("AccuPoll") in a tax-free share exchange under
Section 368(a)(1)(B) of the Internal Revenue Code. Such transaction was
accounted for as a reorganization. In May 2002, pursuant to a Certificate filed
with the Nevada Secretary of State, WIPC effected a one for 2,000 reverse split
of all the outstanding shares of its common stock. Thereafter, in May 2002, WIPC
effected a 1 for 5 reverse stock split of all the outstanding shares of its
common stock. Pursuant to the Exchange Agreement, all of the outstanding common
and preferred stock and outstanding warrants of AccuPoll were exchanged for
shares of WIPC on a 1 for 1.532 basis. By virtue of the reorganization, the
stockholders of AccuPoll acquired 75,500,000 restricted common shares of WIPC.

Management accounted for the reorganization as a capital stock transaction.
Accordingly, the reorganization was reported as a recapitalization of the
Company and AccuPoll is considered the acquirer for accounting purposes. Through
its former stockholders, the Company is deemed the acquirer for accounting
purposes because of (a) its majority ownership of WIPC, (b) its representation
on WIPC's board of directors, and (c) the executive management positions held by
former officers of AccuPoll.


                                      F-24
<PAGE>

NOTE 3. PURCHASE OF BUSINESS

On April 9, 2003, the Company entered into an agreement with Z prompt (a
California corporation) to purchase all of the outstanding capital stock of Z
prompt from its stockholders in exchange for 8 million shares of the Company's
restricted common stock. The primary reason for this purchase was to acquire a
nationwide network of qualified computer hardware technicians who could assist
with the maintenance of the AccuPoll Ballot Buddy product - specifically its
integrated printer.

Additionally, the Company was required to settle an outstanding promissory note
of Z prompt in the principal amount of approximately $400,000 that was held by a
former stockholder of Z prompt, in exchange for 533,000 shares of restricted
common stock of the Company. The Company advanced Z Prompt approximately
$144,000 in connection with the acquisition; such advances were initially
recorded as deferred acquisition costs because of the contingency described in
the following paragraph.

The agreement between AccuPoll and the Z prompt stockholders provided that the
transaction could be rescinded by the former Z prompt shareholders if AccuPoll's
electronic voting system was not certified by Wyle Labs by September 30, 2003.
Such certification was obtained on October 31, 2003; accordingly, the Z prompt
acquisition was recorded for accounting purposes in November 2003.

Based on an independent valuation, the estimated fair value of AccuPoll's common
stock issued for the Z prompt acquisition approximated $1.8 million ($0.213 per
common share). Among other factors, the valuation utilized information from
then-recent issuances of the Company's common stock in equity-raising
transactions.

The purchase price was allocated to the business acquired based on the estimated
fair value of the assets acquired and liabilities assumed, as follows:

           Assets                                    $    183,329
           Goodwill                                     2,542,752
           Liabilities                                  (912,819)
                                                     ------------
                                                     $  1,813,262
                                                     ============

The results of operations of Z prompt are included in the accompanying
consolidated financial statements from November 1, 2003. The following pro forma
summary presents condensed consolidated results of operations as if Z prompt had
been acquired as of the beginning of the years ended June 30, 2004 and 2003:

                                         2004                2003
                                    --------------       ------------
      Net Loss                      $  (14,043,674)      $ (5,761,013)
      Net Loss per common share     $        (0.11)      $      (0.05)

The above amounts are based upon certain assumptions and estimates, which the
Company believes are reasonable. The pro forma results of operations do not
purport to necessarily be indicative of the results which would have been
obtained had the business combination occurred as of the beginning of the
aforementioned years, or which may be obtained in fiscal 2005 and thereafter.

See Notes 1, 4 and 9 for additional information related to Z Prompt.

NOTE 4. DISCONTINUED OPERATIONS

Shut down Z prompt, Inc. Subsidiary

In June 2005, with support of the Board of Directors, management of the Company
decided to wind down the activities of Z prompt, Inc. and to close this
subsidiary during the first quarter of 2006. Employees and customers were
notified in June 2005 and customer contracts were terminated, without penalty.

The decision to close the Z prompt subsidiary was reached after analysis of Z
prompt's contracts and long-term cash flow forecast together with receipt by
AccuPoll, Inc. of federal certification (to federally mandated "2002 standards")
of its Voting System in May 2005. Although Z prompt emerged from bankruptcy in
February 2005 (see Note 1), it has not been profitable since its acquisition in
November 2003. Management evaluated the losses attributed to Z prompt and
determined that reaching sustained profitability in the subsidiary at any time
in the near future was unlikely. Further, with receipt of the "2002 standards"
federal certification, the Company will now focus on seeking state
certifications and broadly marketing its Voting System as well as fund raising
to support these endeavors.


                                      F-25
<PAGE>

The wind down process entailed terminating customer contracts, reducing staff,
collecting outstanding balances due Z prompt and paying its obligations. Funds
available from Z prompt operations including the collection of amounts due and
the sale of assets are not sufficient to settle all debts of Z prompt. The
Company may have to assume responsibility for payment of this deficiency,
including its line of credit facility with a bank in the amount of $61,566 at
June 30, 2005.

Results of Discontinued Operations

Based on management's decision to shut down the Z prompt subsidiary in June 2005
together with the termination of customer contracts, staff reductions and
partial repayment of the outstanding obligations, the Company has accounted for
the activities of the subsidiary as discontinued operations in all periods
presented.

Revenues and expenses from Z prompt for the year ended June 30, 2005 and the
period from acquisition (November 1, 2003) to June 30, 2004 are summarized
below:

                                                       2005             2004
                                                   -----------      -----------
      Sales                                        $ 1,318,048      $ 1,508,656
      Cost of Sales                                  1,241,390        1,185,797
                                                   -----------      -----------
        Gross Profit                                    76,658          322,859
      Expenses
        General and administrative                     677,349          881,876
        Professional fees and legal settlements        656,577               --
        Interest                                        13,255          128,710
        Impairment of goodwill
                                                            --        2,542,752
                                                   -----------      -----------

      Net loss from discontinued operations        $(1,270,523)     $(3,230,479)
                                                   ===========      ===========

There is no loss recognized by the Company related to the discontinuance of Z
prompt.

Net Assets and Liabilities of Discontinued Operations

At June 30, 2005 and 2004, the net assets and liabilities of the discontinued
operations were as follows:

<TABLE>
<CAPTION>
                                                                2005            2004
                                                             ----------     ----------
<S>                                                          <C>            <C>
      Assets of discontinued operations
        Accounts receivable, net of allowance of $20,000
          and $27,312 at June 30, 2005 and 2004,
          respectively                                       $   13,684     $  254,895
        Inventories                                               8,793         20,667
        Fixed assets, net of accumulated depreciation                --          3,754
        Other                                                     5,020             --
                                                             ----------     ----------
          Totals                                             $   27,497     $  279,316
                                                             ==========     ==========
      Liabilities of discontinued operations
        Accounts payable and accrued expenses                $  471,900     $  810,520
        Deferred revenues                                        10,320         74,628
        Line of credit                                           61,566        225,000
                                                             ----------     ----------
          Totals                                             $  543,786     $1,110,148
                                                             ==========     ==========
</TABLE>


                                      F-26
<PAGE>

Z prompt has a revolving line of credit agreement (the "Line") with a financial
institution which is in default at June 30, 2005. The Line bears interest at a
variable rate when not in default and an additional 7% when in default equating
to 13% per annum at June 30, 2005. A shareholder of the Company, who is a former
majority shareholder of Z prompt, has guaranteed the Line. The Line is not
collateralized by assets of the Company or Z prompt, Inc. At June 30, 2005 and
2004 the outstanding borrowings under the Line total $61,566 and $225,000,
respectively, and are included in "liabilities of discontinued operations" in
the accompanying consolidated balance sheets.

NOTE 5. NOTES PAYABLE

At June 30, 2005 and 2004, we have notes payable as follows:

                                               2005         2004
                                             --------     --------
      Notes payable to officers              $260,000     $     --
      Note payable to director                156,250           --
                                             --------     --------
        Notes payable to related parties      416,250           --
      Other                                    15,000       30,000
                                             --------     --------
                                             $431,250     $ 30,000
                                             ========     ========

The notes payable to officers are non-interest bearing and are due September 30,
2005.

In May 2005, we borrowed $156,250 from a Director of the Company under a note
payable which bears interest at 10% per annum and is due on demand.

During the year ended June 30, 2003, the Company borrowed an aggregate of
$165,000 for working capital purposes from a related party. The note calls for
interest at 8% and is due on demand. Per the note agreement, the Company issued
the creditor warrants (with an estimated value of $20,000) to purchase 40,000
shares of restricted common stock of the Company. At June 30, 2004, this note
was paid in full.

NOTE 6. CONVERTIBLE NOTES PAYABLE

At June 30, 2005 and 2004, we have convertible notes payable as follows:

                                               2005           2004
                                            ----------     ----------
      Convertible notes payable, net of
        discount                            $3,796,121     $3,304,600
      Convertible note payable to
        Director, net of discount              256,250             --
                                            ----------     ----------
                                            $4,052,371     $3,304,600
                                            ==========     ==========

June 2003 Debenture

In June 2003 the Company secured a convertible debenture ("June 2003 Debenture")
which, at the discretion of the convertible debenture grantor (the "Grantor"),
may provide us loans of up to $1,250,000, as amended. The convertible debenture
bears interest at an annual rate of 10% and originally matured on December 31,
2003, but has been extended to June 30, 2005. The debenture is convertible on
ninety days written notice by Grantor at the lesser of (i) 50% of the average
three lowest closing prices for our common stock for the twenty days immediately
preceding the conversion date or (ii) $0.0625 per share. In connection with such
borrowing, the Company granted a warrant to purchase 6,400,000 shares of the
Company's restricted common stock at an exercise price of $0.0625 per common
share. The warrant vested upon grant and expires in July 2008. The Company
recorded the relative fair value of the warrant and the beneficial conversion
feature as a debt discount in the total amount of approximately $200,000. The
discount associated with the warrant was amortized to interest expense over the
original term of the related debt. The discount associated with the beneficial
conversion feature was insignificant, and was recorded as interest expense upon
issuance.


                                      F-27
<PAGE>

In October and November 2003, the Company issued additional warrants to the
Grantor to purchase six million shares of the Company's restricted common stock
at an exercise price of $0.0625 per share in connection with a deferral of the
maturity date of the above convertible debt instrument to December 2004 and an
increase of the available borrowings to $1,250,000 from the original amount of
$600,000. The warrant vested upon grant and expires in October 2008. The Company
recorded the relative fair value of the warrant, which approximated $40,000, as
a debt discount which was amortized to interest expense over the extended term
of the convertible debenture.

In June 2004, the Company paid $76,000 in the form of additional principal
borrowings to extend the maturity date of the convertible debenture instrument
to December 31, 2004.

In March 2005, the Company paid $95,604 and $120,046 in the form of additional
principal borrowings to extend the maturity date of the convertible debenture
instrument to June 30, 2005 and add accrued interest to debenture principal,
respectively. The $95,604 extension fee was charged to interest expense. The
Company recorded the beneficial conversion feature as a debt discount in the
total amount of approximately $215,650 and amortized it to interest expense
through June 30, 2005, the amended term of the related debt. Also in March 2005,
the Grantor exercised its right to convert $134,000 of the loan to common stock
and was issued 2,144,000 of the Company's common shares.

At June 30, 2005 and 2004, we had net borrowings outstanding of $917,650 and
$836,000, respectively, under the June 2003 Debenture.

The November 2003 Debentures

In November 2003, the Company secured a revolving credit facility, in the form
of two seven-month convertible debentures ("November 2003 Debentures") which, at
the discretion of the convertible debenture grantor (the "Grantor"), may provide
us loans of up to $5 million, as amended. The debentures bear interest at an
annual rate of 10% and originally matured on June 30, 2004, but have been
extended to June 30, 2005. The debentures are convertible on ninety days written
notice by the holders at the lesser of (i) 50% of the average three lowest
closing prices for our common stock for the twenty days immediately preceding
the conversion date or (ii) $.0625 per share.

Included in the November 2003 Debentures balance is $1,200,000 borrowed in
December 2003 in connection with a transaction with Material Technologies, Inc.
(see Note 10). The Company subsequently un-wound the Material Technologies Inc.
transaction and expensed the entire $1,200,000 as a loss on disposal of the
investment in Material Technologies Inc.'s common stock in the fiscal 2004
results of operations. At June 30, 2005, the Company remains liable for the $1.2
million convertible debt as part of the total borrowings under such debentures.

In June 2004, the Company paid $130,000 in the form of additional principal
borrowings to extend the maturity date of the convertible debentures instruments
to December 31, 2004.

During July 2004 through August 2004, the Company borrowed funds of $200,000
under the November 2003 Debentures. The Company recorded the beneficial
conversion feature as a debt discount in the total amount of approximately
$200,000 and amortized it to interest expense through December 31, 2004, the
term of the related debt.

During October 2004 through January 2005, the Grantor exercised its right to
convert $480,000 of the loans to common stock and was issued 8,835,714 of the
Company's common shares.

In March 2005, the Company paid $228,054 and $380,541 in the form of additional
principal borrowings to extend the maturity date of the convertible debentures
instruments to June 30, 2005 and add accrued interest to debenture principal,
respectively. The $228,054 extension fee was charged to interest expense. The
Company recorded the beneficial conversion feature as a debt discount in the
total amount of approximately $608,595 and amortized it to interest expense
through June 30, 2005, the amended term of the related debt.


                                      F-28
<PAGE>

At June 30, 2005 and 2004, we had net borrowings outstanding of $2,508,595 and
$2,180,000, respectively, under the November 2003 Debentures.

Subsequent Events - June 2003 Debenture and November 2003 Debentures

In August 2005, holders of the November 2003 Debentures exercised their
conversion rights on principal of $120,000 and received 1,920,000 common shares
of the Company.

Effective September 9, 2005, in connection with the execution of a Conversion
and Settlement Agreement with Mutual General Releases between the holders of the
June 2003 and November 2003 debentures ("2003 Debenture Holders") and the
Company, the 2003 Debenture Holders exercised their conversion rights under the
terms of the debentures on outstanding principal of $2,242,000 and received 59
million shares of the Company's common stock to be issued in installments
through June 2006. All remaining principal and accrued interest totaling
approximately $1,300,000 was forgiven and an unexercised warrant for 6,400,000
common shares issued in June 2003 in connection with the June 2003 Debenture was
canceled. Consequently, the June 2003 and November 2003 Debentures principal
balance of $3,426,246 plus accrued interest of $115,325 totaling $3,541,571 is
classified as a long-term liability in the accompanying consolidated balance
sheet at June 30, 2005.

In connection with the Conversion and Settlement Agreement With Mutual Releases,
on September 26, 2005 we entered into a Registration Rights Agreement pursuant
to which we agreed to register the resale of 25 million shares of common stock
beneficially owned by the Debenture Holders. We agreed to prepare and file such
registration statement within 60 days after the effectiveness of the current
registration statement on file with the Securities and Exchange Commission, or
within 60 days following the abandonment or termination of such registration
statement, or within 180 days following September 26, 2005, whichever date is
earliest.

Other Debentures

In July 2003, the Company borrowed $500,000 under a subordinated convertible
note payable, which bears interest at 7% per annum. All borrowings were due six
months from the receipt of proceeds, with semi-annual interest payments on the
outstanding balance. In December 2003, the note was converted into 1,666,667
shares of the Company's restricted common stock at $0.30 per share. A BCF
approximating $500,000 was recorded during the quarter ended September 30, 2003.
Such discount was amortized to interest expense during the three months ended
September 30, 2003 as the subordinated convertible note was convertible upon
issuance.

In January 2004, the Company borrowed $250,000 from a Director of the Company
under a convertible note payable which bears interest at 7% per annum. All
borrowings, including interest, were due in July 2004. The note was convertible
into restricted common stock of the Company at a rate of $0.12 per share, at any
time at the option of the note holder. In June 2004, the January Note was
converted into 2,083,333 shares of the Company's common stock. A beneficial
conversion feature approximating $250,000 was recorded upon issuance of the note
and expensed over the term.

In January 2004, the Company borrowed $288,600 under a convertible note payable.
The debenture bears interest at an annual rate of 7% and originally matured on
June 30, 2004, but has been extended to June 30, 2005. The debentures are
convertible on ninety days written notice by the holders at $.10 per share. In
connection with such borrowing, the Company granted a warrant to purchase
824,571 shares of the Company's restricted common stock at an exercise price of
$0.35 per common share. The warrant vested upon grant and expires in January
2009. The Company recorded the relative fair value of the warrant and the
beneficial conversion feature as a debt discount in the total amount of
approximately $155,600. The discount associated with the warrant was amortized
to interest expense over the original term of the related debt. The discount
associated with the beneficial conversion feature was insignificant, and was
recorded as interest expense upon issuance. In January 2005, accrued interest of
$19,400 was added to the debenture principal and the maturity date was extended
to June 14, 2005, with further extensions available to the Company through
September 14, 2005, in exchange for the issuance by the Company of a warrant to
purchase 3,080,000 common shares at $.10 per share. The warrant is exercisable
upon issuance and expires December 31, 2008. The Company has exercised its
option to extend the maturity of the debenture through September 14, 2005.


                                      F-29
<PAGE>

In April 2004, the Company borrowed $75,000 under a convertible note payable.
The debenture bears interest at an annual rate of 7% and matures on October 15,
2005. The debenture is convertible on ninety days written notice by the holders
at $.10 per share. The Company recorded the beneficial conversion feature as a
debt discount in the total amount of $22,500 and is amortizing the discount to
interest expense over the term of the related debt. The unamortized discount at
June 30, 2005 is $13,125.

In July 2004, the Company borrowed $625,000 under convertible notes payable. The
convertible note bears interest at an annual rate of 8% and matured on September
30, 2007. The note is convertible on ninety days written notice by Grantor at
the lesser of (i) 50% of the average three lowest closing prices for our common
stock for the twenty days immediately preceding the conversion date or (ii)
$0.10 per share, as amended. In connection with such borrowing, the Company
granted warrants to purchase 312,500 shares of the Company's restricted common
stock at an exercise price of $0.10 per common share, as amended. The warrants
vested upon grant and expire in July 7, 2007. The Company recorded the relative
fair value of the warrant and the beneficial conversion feature as a debt
discount in the total amount of approximately $312,500. The discount associated
with the BCF and warrant was recorded to interest expense. In September 2004,
convertible notes of $312,500 were converted to 3,125,000 shares of common stock
and the remaining principal of $312,500 plus accrued interest was repaid by the
Company.

In April 2005, the Company borrowed $300,000 from a Director of the Company
under a convertible note payable which bears interest at 10% per annum and
matures on October 21, 2005. The note is convertible into restricted common
stock of the Company at a rate of $0.10 per share, at any time at the option of
the note holder. In connection with such borrowing, the Company (a) granted a
warrant to purchase 3,000,000 shares of the Company's restricted common stock at
an exercise price of $0.10 per common share, vesting upon grant and expiring in
April 2010, and (b) canceled two outstanding warrants issued in December 2003 to
purchase an aggregate 9,057,970 shares of the Company's restricted common shares
at $1.55 per share and reissued two replacement warrants to purchase an
aggregate 9,057,970 shares at $.10 per share, vesting upon grant and expiring in
December 2008, the same expiration date of the original two warrants. The
Company recorded the relative fair value of the three warrants and the
beneficial conversion feature as a debt discount in the total amount of $75,000
and is amortizing the discount to interest expense over the term of the related
debt. The unamortized discount at June 30, 2005 is $43,750.

NOTE 7. INCOME TAXES

Income tax expense, all current, for the years ended June 30, 2005, 2004 and
2003 differed from the amounts computed by applying the U.S. Federal income tax
rate of 34 percent to the loss before income taxes as a result of the following:

<TABLE>
<CAPTION>
                                                       2005             2004             2003
                                                   -----------      -----------      -----------
<S>                                                <C>              <C>              <C>
Computed "expected" tax benefit                    $(3,551,000)     $(4,756,000)     $(1,649,000)
Adjustment in income taxes resulting from:
  Change in valuation allowance                      4,151,000        4,334,000        1,891,000
  Other                                                 23,400               --              800
  State and local income taxes, net of federal        (621,000)        (439,600)        (242,000)
  Goodwill impairment                                       --          864,000               --
                                                   -----------      -----------      -----------
                                                   $     2,400      $     2,400      $       800
                                                   ===========      ===========      ===========
</TABLE>

The tax effects of temporary differences that give rise to significant portions
of the deferred tax assets at June 30, 2005, 2004 and 2003 are presented below:

<TABLE>
<CAPTION>
                                             2005              2004              2003
                                         ------------      ------------      ------------
<S>                                      <C>               <C>               <C>
Net operating losses                     $  8,139,000      $  4,052,000      $    199,000
Stock-based compensation                    1,327,000         1,327,000         1,327,000
Start-up costs                              1,142,000         1,142,000         1,142,000
Loss on investments                           480,000           480,000                --
Capitalized research and development           70,000            70,000            70,000
Other                                         139,000            75,000            74,000
                                         ------------      ------------      ------------
Deferred Tax Asset                         11,297,000         7,146,000         2,812,000
Less: Valuation allowance                 (11,297,000)       (7,146,000)       (2,812,000)
                                         ------------      ------------      ------------
                                         $         --      $         --      $         --
                                         ============      ============      ============
</TABLE>


                                      F-30
<PAGE>

As of June 30, 2005, the Company had tax net operating loss carryforwards
("NOLs") of approximately $20 million and $21.5 million available to offset
future taxable income for Federal and State purposes, respectively. The Federal
and State carryforwards expire in varying amounts through 2025. Effective
September 11, 2002, pursuant to California revenue and tax code section 24416.3,
no net operating loss deduction will be allowed for any taxable year beginning
on or after January 1, 2002, and before January 1, 2004. For any suspended
losses, the carryforward period is extended by one year for losses incurred in
tax years beginning on or after January 1, 2002, and before January 1, 2003; and
by two years for losses incurred in taxable years beginning before January 1,
2002.

Due to the change in ownership provisions of the Internal Revenue Code Section
382, net operating loss carryforwards for Federal and State income tax reporting
purposes are subject to annual limitations. Should an additional change in
ownership occur, net operating loss carryforwards may be limited as to their use
in future years.

In 2005, 2004 and 2003, the Company concluded that a full valuation allowance
against its net deferred tax assets was appropriate. SFAS 109 requires that a
valuation allowance must be established when it is more likely than not that all
or a portion of deferred tax assets will not be realized. In making such
determination, a review of all available positive and negative evidence must be
considered, including scheduled reversal of deferred tax liabilities, projected
future taxable income, tax planning strategies, and recent financial
performance. The accounting guidance further states that forming a conclusion
that a valuation allowance is not needed is difficult when there is negative
evidence such as cumulative losses in recent years. As a result of the Company's
recent cumulative losses, the Company concluded that a full valuation allowance
should be recorded in 2005, 2004 and 2003.

NOTE 8. OTHER RELATED PARTY TRANSACTIONS

MASTER SELLING AGREEMENT

The Company compensates a European entity, to which a member of the Company's
Board of Directors is affiliated, in the form of cash and warrants for monies
raised through certain investors and/or creditors. During the years ended June
30, 2005 and 2004, the Company paid commissions of $112,000 and $500,000,
respectively, and granted warrants to purchase 1,187,000 and 145,752 shares,
respectively, of the Company's common stock. The warrants vest upon grant and
are exercisable for three years from the date of grant on the same terms as the
underlying equity or debt securities.

MASTER SERVICES AGREEMENT

In April 2002, the Company entered into a Master Services Agreement (the
"Services Agreement") whereby WTI provided substantially all non-production
services related to the Company's Voting System. Under the Services Agreement,
the Company was charged hourly rates for the services of WTI employees who
worked on developing the computer software for the Company's Voting System. In
addition, the Company paid WTI for all reimbursable expenses, as defined in the
Services Agreement. The Company was not charged for the use of the office space
or fixed assets of WTI; overhead-related charges were included in the basic
hourly rates charged by WTI to the Company. All inventions, concepts, know-how,
methodologies, processes, algorithms, techniques, compilations, software and
other works of authorship of any nature created or developed by WTI during the
life of the Services Agreement remain the exclusive property of AccuPoll.

WTI, which was incorporated in 1996, is in the business of software engineering
in various computer languages with an emphasis on Linux/Apache, Sun Solaris, and
Microsoft NT/Win2K platforms. WTI is owned and operated by Dennis Vadura and
Frank Wiebe. Mr. Vadura is the Company's chief executive officer (former), a
director, and a principal stockholder; Mr. Wiebe is the Company's president
(former) and treasurer, a director, and a principal stockholder (collectively
the "controlling stockholders"). During the years ended June 30, 2004 and 2003,
WTI invoiced approximately $1,450,000 and $1,300,000, respectively, to the
Company under the terms of the Services Agreement, of which approximately
$1,420,000 and $1,487,000 is due and payable at June 30, 2005 and 2004,
respectively. The amount due bear no interest and are payable within thirty days
of receipt of invoice.


                                      F-31
<PAGE>

The Services Agreement expired on March 31, 2004. Since that date, the Company
has not used the services of WTI because the software for the Voting System is
substantially complete; any additional computer programming that may be
necessary has been provided by Company employees (some of whom are former WTI
employees). At this time, WTI is virtually a dormant entity with just two minor
customers and only a few employees. Although the Company's June 30, 2005 payable
to WTI is a substantial amount (see the preceding paragraph), there is no intent
to pay this liability in the foreseeable future. Given its minimal operations at
this time, management believes that WTI is no longer dependent for its continued
existence upon additional subordinated financial support from the Company or its
controlling stockholders. For these reasons, management has concluded that the
Company is no longer the primary beneficiary of WTI and, therefore, has
de-consolidated the accounts of WTI as of April 1, 2004.

NOTE 9. OTHER COMMITMENTS AND CONTINGENCIES

CONSULTING AGREEMENTS

In July and September 2004, for fund raising services rendered the Company
became liable to grant warrants to purchase a total of 6,187,128 common shares
upon the exercise of warrants issued to investors in the PIPE I and PIPE II
offerings (see Note 11). If granted the warrants will include the same terms as
the investor warrants exercisable into common shares of 2,062,376 at each $0.14,
$0.18 and $0.60.

In April 2002, the Company issued consultants 3,840,000 shares of common stock
at $0.08 per share, valued at $313,344 (based on the market value on the date of
grant), of which $286,000 was included in the June 30, 2002 consolidated balance
sheet as prepaid consulting. The related consulting services were to be provided
through April 2004, however during the year ended June 30, 2003, the Company
determined it was no longer receiving benefit from the consultant and expensed
the remaining $286,000 in the accompanying consolidated statement of operations
for the year ended June 30, 2003.

The Company has entered into general consulting/lobbying agreements with various
third parties to provide services related to the marketing and sale of the
Company's product in certain cities; such agreements expired through April 2004.
Pursuant to the agreements, the Company will pay commissions on sales within the
various territories, as defined.

LITIGATION

Z prompt

In October 2003, a former officer and principal stockholder of Z prompt (the
"plaintiff") filed a lawsuit against the Company and Z prompt (hereinafter
collectively referred to as the "defendants") alleging breach of contract,
conversion, and fraud relating to (a) the plaintiff's employment contract with Z
prompt, (b) the merger agreement described in Note 3, and/or (c) a Z prompt
promissory note (approximately $167,000 plus interest) payable to the plaintiff.
The plaintiff was seeking minimum compensatory damages (including deferred
salary and collection of the promissory note) of approximately $1.6 million, an
unstated amount in excess of $1 million based on the fraud allegation, and
punitive damages according to proof.

In December 2003, the defendants sued the plaintiff in a cross-complaint,
alleging (among other things) breach of good faith/fair dealing covenant, breach
of contract, fraud, misrepresentation, negligence, and breach of fiduciary duty.
The cross-complainants are seeking (a) compensatory damages of approximately
$1,960,000, (b) the rescission of all agreements between the plaintiff and the
defendants (such as the aforementioned merger agreement), (c) the cancellation
of all Company stock currently owned by the plaintiff, and (d) punitive damages
in an unstated amount. This cross-complaint was amended in February 2004 to name
two other former officers/stockholders of Z prompt as additional defendants.


                                      F-32
<PAGE>

In January 2004, the plaintiff amended his complaint to name certain
officers/stockholders of the Company as additional defendants, alleging fraud
and interference with contract. This action seeks compensatory damages in excess
of $2 million and punitive damages according to proof.

In June 2004, the Bankruptcy Court granted the plaintiff relief from the
automatic stay provided by the Bankruptcy Code (see Note 12) regarding the
litigation described above. In the same action, Z prompt agreed to withdraw its
motion in Bankruptcy Court seeking rejection of the executory contracts
described above.

In January 2005, a Confidential Mutual General Release Agreement was executed
settling the October 2003 lawsuit described above (as amended). In settlement of
all obligations, the Company was required to (a) issue 1.5 million restricted
shares of the Company's commons stock, (b) pay $625,000 to the plaintiff from
March through June 2005, and (c) indemnify plaintiff on Company debt guaranteed
by plaintiff. In January 2005 the Company issued 1.5 million common shares and
as of June 30, 2005 all cash amounts due have been paid. The net consideration
to the Company comprises the cash amount paid and the fair market value of
common shares issued ($150,000) less obligations to plaintiff previously
recorded by the Company. These obligations were originally classified at
"liabilities subject to compromise" on the consolidated balance sheet at June
30, 2004. These "liabilities subject to compromise" amounts were the obligation
of the Company's discontinued operation, Z prompt, and therefore have been
reclassified to "liabilities of discontinued operation" in the accompanying
consolidated balance sheet at June 30, 2004. The net consideration of this
settlement which totaled $775,000 is included in net loss from discontinued
operations in the accompanying statement of operations for the year ended June
30, 2005.

Amarillo

In 2003, the Company entered into a Location Incentives Agreement (the "LIA")
with the Amarillo Economic Development Corporation ("AEDC") to establish the
Company's customer service center and voting machine repair operations in
Amarillo, Texas. According to the terms of the LIA, the AEDC paid the Company
$250,000 upon execution of a lease for facilities in Amarillo. The funds
advanced under the LIA are to be used solely for the operations in Amarillo. If
the Company did not meet certain minimum employment requirements (as defined in
the LIA), it is required to repay all amounts advanced. The Company recorded the
advance in the accompanying consolidated balance sheets in accounts payable and
accrued expenses as of June 30, 2005 and 2004. The Company did not meet the
minimum employment requirements. Therefore, as of September 14, 2005 has
returned the $250,000 advance plus a $5,000 in attorney fees. In connection with
the LIA, during 2003 the Company granted warrants to purchase 250,000 shares of
its restricted common stock at an exercise price of $1.04 per share, valued at
approximately $174,000 based on the Black-Scholes pricing model. The warrants
vested on the grant date, and expire in November 2012.

Employee Matters

In October 2003, a former employee of Z prompt filed suit against Z prompt and
the Company in Superior Court of California, County of Orange, California. The
complaint alleged wrongful termination, intentional infliction of emotional
distress and retaliatory discharge, based on claims that the plaintiff was
terminated for reporting to management alleged fraudulent accounting practices
by Z prompt management. The former employee sought $112,000 in monetary damages
including loss of wages, plus punitive damages. In February 2005 this lawsuit
was settled for a sum of $50,000, requiring $10,000 payments on the first of
each month from August 2005 through and including December 2005. We have made
payments in accordance with this payment schedule as they become due.

Other

      Together with the Company's subsidiary, Z prompt, Inc., on January 31,
2005, the Company filed an action for declaratory relief against Frank Ehret in
Orange County Superior Court, case # 05CC02714. Under the terms and conditions
of the purchase of Z prompt, Inc., Frank Ehret received 6,365,000 restricted
shares of common stock. Mr. Ehret alleges that the Company somehow prevented him
from selling his shares. The Company denied the allegations and are seeking a
judicial determination on the matter. On February 3, 2005, after receipt of the
complaint, Mr. Ehret filed an action in San Francisco Superior Court, case#
CGC-05-438410, for breach of contract, breach of the covenant of good faith and
fair dealing, conversion and failure to make payment due on a promissory note.
The factual basis of the complaint filed by Mr. Ehret is identical to the
declaratory relief action that the Company filed. The Company filed a motion to
have the Ehret case transferred to Orange County Court and Mr. Ehret stipulated
to have his case moved to Orange County. No discovery has taken place.

      In September 2003, the Company was served with a lawsuit filed in the
Supreme Court of New York, County of New York, by Stern & Co Communications LLC,
d/b/a Stern + Co. Stern alleging that it breached a contract with them by
failing to tender payment in full for services rendered. Stern sought to recover
damages in the amount of $35,000, and a warrant to purchase 36,000 shares of our
common stock. In November 2003, the Company entered into a stipulated settlement
agreement with Stern. In consideration for a full release of Stern's claims, the
Company issued Stern 15,000 shares of common stock and granted a warrant to
purchase 15,000 shares of common stock at an exercise price equal to the closing
stock price on the date of issuance.


                                      F-33
<PAGE>

General

From time to time, the Company may be involved in various claims, lawsuits or
disputes arising in the normal operations of its business. Other than the matter
described in Note 10 - Mezzanine Securities, the Company is not currently
involved in any such matters which management believes could have a material
adverse effect on the Company's financial position or results of operations.

EXCLUSIVE SUPPLY AGREEMENT

The Company has an exclusive supply contract expiring in 2006 with a vendor to
manufacture the Voting System product. Per the agreement, if the supplier is
unable to produce and deliver on time the required quantity of product, the
Company may obtain the Voting System product from another supplier.

Z PROMPT LIABILITIES

As discussed in Note 4, the Company decided to wind-down the operations of its
subsidiary, Z prompt, Inc. Funds available from Z prompt operations including
the collection of amounts due and the sale of assets are not sufficient to
settle all debts of Z prompt. The Company may have to assume responsibility for
payment of this deficiency, including its line of credit facility with a bank in
the amount of $61,566 at June 30, 2005.

LEASE COMMITMENTS

The Company rents office space under operating lease agreements which expire
June 30, 2006 and December 31, 2007. Rent expense for the years ended June 30,
2005, 2004 and 2003 were $179,099, $127,378 and $17,611 respectively. The
minimum annual rent payable under such leases approximates $206,000, $30,000 and
$15,000 in the years ending June 30, 2006, 2007 and 2008, respectively.

SEC INVESTIGATION

In December 2004, the Company received notice that the Securities and Exchange
Commission was conducting an investigation. The Securities and Exchange
Commission issued subpoenas to the Company and certain of its officers,
directors and affiliates. The Company responded to such subpoenas and has not
received any further correspondence or any communication from the Securities and
Exchange Commission regarding the investigation. An evaluation of the likelihood
of an unfavorable outcome and an estimate of the amount or range of potential
loss cannot be made at this time.

NOTE 10. MEZZANINE SECURITIES

EQUITY INSTRUMENTS SUBJECT TO RESCISSION

The Company may be subject to possible claims for rescission with respect to the
sale or other issuances of certain common stock, options and warrants. The
accompanying consolidated balance sheets reflect an adjustment for the matter
described below.


                                      F-34
<PAGE>

Approximately 26.6 million shares of the Company's common stock, options and
warrants that were issued or granted in the United States without registration
or qualification under federal or state securities laws during 2003 and 2004
which may be subject to rescission for a period of no more than two years from
the date of issue. The fair value of these securities was estimated based on a
combination of (a) the selling price of the common stock on the dates sold, (b)
the price per the agreement for stock issued in conversion of debt, (c) the fair
value of the stock options and warrants on their grant dates, and (d) an
independent valuation. Based in part on advice of counsel, the fair value of
these options and warrants was estimated using the Black-Scholes option-pricing
model. Based on these measurement criteria, the Company's potential liability
directly associated with the aforementioned securities transactions is estimated
to approximate$1.4 million and $6.2 million (including interest) at June 30,
2005 and 2004, respectively, plus legal fees and any fines or penalties that
might be assessed by regulatory agencies. As the two year rescission period from
the date of each subject issuance expires the Company reduces the contingent
liability associated with that issuance and increases additional paid-in capital
on its consolidated balance sheet.

Management is unable to determine at this time whether any claim for rescission
may be filed against the Company; however, there can be no assurance that such
claims will not be asserted. In addition, regulatory agencies could launch a
formal investigation and/or institute an enforcement proceeding against the
Company. The ultimate outcome of the matters discussed above is not presently
determinable. Accordingly, management is unable to estimate the total liability,
if any, that the Company may incur as a result of such contingencies. Regardless
of how remote a rescission event may be, GAAP as interpreted by the SEC requires
that equity securities subject to rescission be reported outside of the
stockholders' equity section of the balance sheet until the applicable statutes
of limitations expire through April 2006.

Based on advice of counsel, the potential liability discussed above does not
include options to purchase a total of 3.6 million shares of common stock issued
to the Company's president and to its chief executive officer because these two
individuals are also principal stockholders of the Company; acting together,
they have the ability to control the Company. The estimated fair value of the
options described in this paragraph (excluding interest) approximated $1.4
million at June 30, 2005 and 2004.

PREFERRED STOCK

2005 Series A

In June 2005, the Company filed a certificate of designation with respect to
30,000 shares of a single Series A, non-voting preferred stock ("2005 Series
A"). Preferred shareholders have preference to common shareholders in the event
of liquidation of the Company such that for each share of Preferred Stock, the
preferred shareholder is entitled to an amount equal to the Stated Value, as
defined, per share plus any accrued and unpaid dividends thereon and any other
fees or liquidated damages owing thereon before any distribution or payment
shall be made to the holders of any Junior Securities, as defined. Each share of
2005 Series A preferred stock has a Stated Value of $100 and is convertible into
1,000 of the Company's common shares, as adjusted, at the option of the
preferred shareholder. Upon the occurrence of certain events defined in the
certificate of designation, shareholders may at their option redeem their
preferred stock for cash or common shares for an amount no less than 120% of the
Stated Value.

In June 2005, subsequent to the filing of the preferred stock certificate of
designation, the Company sold 3,100 units, each unit comprised of one share of
2005 Series A preferred stock, a warrant to purchase 1,000 shares of the
Company's common stock at $.10 per share, and a warrant to purchase 1,000 shares
of the Company's common stock at $.125 per share. The warrants are exercisable
upon grant and expire three years from the date of grant. The Company recorded
the relative fair value of the warrants as an imputed dividend in the amount of
$110,000. The Company received $250,000 cash proceeds and a promissory note of
$60,000 from preferred unit issuance. The promissory note was collected in
August 2005.

2003 Series A

In December 2003, the Company entered into an agreement to issue 8,471 shares of
its cumulative convertible Series A Preferred Stock ("2003 Series A") and
$1,200,000 of convertible notes payable in exchange for 3,325,000 shares of free
trading common stock of Material Technologies, Inc., a publicly traded company
whose common stock is quoted on the Over-The-Counter Bulletin Board under the
symbol "MTNA." In attempting to execute such transaction, the Company's intent
was to gain access to capital markets through the potential sale of MTNA common
stock.


                                      F-35
<PAGE>

At that time, the Company had not filed a certificate of designation with
respect to any series of preferred stock. On May 7, 2004, management entered
into an agreement whereby the Company exchanged the 3,325,000 shares of common
stock of Material Technologies, Inc. in return for the 8,471 shares of 2003
Series A. Accordingly, as of May 7, 2004, no preferred stock was issued or
outstanding. However, the Company remains liable on the $1.2 million convertible
note payable; see Note 6 for additional information.

The accounting adjustment for the transaction described in the preceding
paragraph has been reflected in the accompanying June 30, 2004 consolidated
financial statements of the Company as "loss on disposal of investment". This
adjustment of the Company's financial statements increased the previously
reported net loss for the quarter ended December 31, 2003 by approximately $1.2
million ($0.01 per common share).

NOTE 11. STOCKHOLDERS' EQUITY (DEFICIT)

COMMON STOCK

Selected significant common stock transactions for the years ended June 30,
2003, 2004, and 2005 are as follows:

2005

In July 2004, the Company issued 18,806,248 shares of common stock to eight
different shareholders, as a result of a cashless exercise of warrants with an
exercise price of $0.0625 per share.

In September 2004, the Company issued 3,666,669 shares of common stock at $0.45
per share for cash in connection with the first round a private placement (PIPE
I) for proceeds of approximately $1,453,000 net of commissions and costs. In
November 2004, the Company issued an additional 12,832,332 shares to the
subscribers of PIPE I to provide them with the same price per share ($0.10) as
subscribers of the second round of the same placement (PIPE II) in October 2004.

In September 2004, the Company issued 2,083,333 shares of common stock in
connection with the conversion of convertible debentures with a principal
balance of $312,500 ($0.15 per share conversion price) and issued an additional
312,500 shares of common stock in connection with the cashless exercise of
warrants originally granted with these converted debentures. In December 2004,
an additional 1,041,667 shares of common stock were issued related to the
September conversion resulting in a revised conversion price of $0.10 per share.

In October 2004, the Company issued 6,050,000 shares of common stock at $0.10
per share for cash in connection with PIPE II for cash proceeds of approximately
$520,000 net of commissions and costs.

In October and December 2004 and January 2005, the Company issued an aggregate
of 8,835,714 shares of common stock resulting from the conversion of $480,000 of
convertible subordinated debentures (the November 2003 Debenture, see Note 6)

In January 2005, the Company issued 1,500,000 shares of common stock in
settlement of litigation (see Note 9). The issuance was recorded at $0.10 per
share, the fair market value at date of issuance.

From October 2004 through February 2005, the Company issued 4,400,000 shares of
common stock at $0.05-$0.17 per share in exchange for legal services. The
issuances were recorded at fair market value of the shares at the date of
issuance.

In November 2004 and February 2005, the Company issued 700,000 shares of commons
stock at $0.10 per shares and issued approximately 964,000 shares of common
stock in connection with the exercise of warrants at $0.10 per share for cash
proceeds of approximately $184,000 net of commissions and costs.

In March 2005, through three different financings the Company issued an
aggregate of 2,500,000 shares at $0.10 per share and approximately 7,417,000
shares at $0.06 per share for aggregate cash proceeds of approximately $626,000
net of commissions and costs.


                                      F-36
<PAGE>

2004

In August 2003, the Company issued 7,000,000 shares of restricted common stock
as collateral for potential loan proceeds approximating $1,650,000 ("Secured
Note"), less applicable commissions. The Secured Note accrues interest at 4.5%,
will require quarterly interest-only payments through maturity, and matures two
years from receipt of proceeds. As of the date of this filing, the Company has
not received any proceeds or paid any related commissions.

During the quarter ended March 31, 2004, the Company issued 13,884,534 shares of
restricted common stock in connection with the exercise of warrants for proceeds
of approximately $2.3 million, net of commissions approximating $400,000.

During the quarter ended March 31, 2004, the Company also issued 1,724,167
shares of restricted common stock in connection with the conversion of a
$500,000 note payable plus accrued interest approximating $17,000.

In May, 2004, the Company issued 1,960,000 shares of common stock to three
different shareholders, as a result of a net exercise of warrants with an
exercise price of $0.0625 per share.

In June, 2004, the Company issued 3,105,262 shares of common stock to three
different shareholders, as a result of a net exercise of warrants with an
exercise price of $0.0625 per share.

In June, 2004, the Company issued 2,156,250 shares of common stock as a result
of convertible debt of $250,000 which was converted at $0.1224 per share.

2003

During April and June 2003, the Company issued 3,642,480 shares of common stock
at $0.1224 per share for gross cash proceeds of approximately $448,000 in
connection with a private placement.

During the year, the Company issued an aggregate of 840,000 shares at $0.25 per
share for cash to four different shareholders.

During the year, the Company issued 4,185,346 shares of common stock as a result
of the exercise of warrants with an exercise price ranging from $0.0625-$0.25
per share for total proceeds of approximately $473,000.

WARRANTS

From time to time, the Company issues warrants pursuant to various consulting
agreements and in connection with financing arrangements.

During the year ended June 30, 2005, the Company granted warrants to purchase
approximately 3,312,000 shares of the Company's restricted common stock at an
exercise price ranging from $0.10-$0.12 per share valued at approximately
$1,436,000 (based on the Black-Scholes pricing model) for services rendered in
connection with fund raising activities. As fund raising costs are accounted for
as a reduction of additional paid-in capital and the fair value of warrants are
accounted for as an increase in additional paid-in capital, there is no net
affect on the accompanying 2005 consolidated financial statements. For fund
raising services, the Company is obligated to grant additional warrants to
purchase up to 6,187,128 shares of common stock only upon the exercise of
warrants issued to investors in connection with the PIPE I and PIPE II
financings. The contingent warrants are exercisable at the same price as the
investors; 2,062,376 shares at each $0.14, $0.18 and $0.60. No other warrants
with a material fair value were issued for services during the year ended June
30, 2005.


                                      F-37
<PAGE>

During the year ended June 30, 2004, the Company granted warrants to purchase
3,721,000 shares of the Company's restricted common stock at an exercise price
ranging from $0.18-$1.80 per share valued at approximately $6,697,000 (based on
the Black-Scholes pricing model) for consulting for services rendered. The fair
value of these warrants is amortized to expense over the term the services are
rendered. Accordingly, approximately $2,560,000 and $846,000 and has been
expensed in the accompanying consolidated statement of operations for the years
ended June 30, 2005 and 2004, respectively. The remainder of $1,775,000 will be
expensed in fiscal 2006.

During the year ended June 30, 2003, the Company granted warrants to purchase
250,000 shares of the Company's restricted common stock at an exercise price of
$0.91 per share valued at $206,000 (based on the Black-Scholes pricing model) to
a consultant for services rendered, which was expensed in the accompanying
consolidated statement of operations for the year ended June 30, 2003. In
connection with the issuance, the warrant holder may cause the Company to
re-purchase any warrants not previously exercised by the warrant holder on or
after June 2006 for $0.46 per share. Accordingly, a related liability of
$113,750 representing the Company's re-purchase liability is included in the
accompanying consolidated balance sheets at June 30, 2005 and 2004.

A summary of changes in warrants during each period is presented below:

                                                                Weighted Average
                                           Number of Warrants     Exercise Price
                                           ------------------   ---------------

Balance, June 30, 2002                             24,611,488      $       0.07

Warrants granted                                   15,340,813              0.29
Warrants exercised                                 (4,393,886)            (0.11)
Warrants cancelled                                 (3,972,000)            (0.25)
                                                 ------------

Balance at June 30, 2003                           31,586,415      $       0.15

Warrants granted                                   52,681,292              0.48
Warrants exercised                                (21,067,794)            (0.22)
Warrants cancelled                                         --                --
                                                 ------------

Balance at June 30, 2004                           63,199,913      $       0.40

Warrants granted                                   81,200,227              0.20
Warrants exercised                                (19,670,709)            (0.06)
Warrants cancelled                                (20,631,557)            (0.86)
                                                 ------------

Balance at June 30, 2005                          104,097,874      $       0.22
                                                 ============

The following table summarizes information related to warrants outstanding at
June 30, 2005, all of which are fully exercisable:

                                          Weighted Average
                                             Remaining
                                             Contractual
      Exercise Price          Number            Life         Exercise Price
      --------------          ------            ----         --------------
    $0.01 - $0.09               8,878,698        2.7             $0.06
    $0.10 - $0.25              73,774,019        3.5              0.13
    $0.26 - $0.50              13,711,500        3.8              0.47
    $0.75 - $0.90               6,908,657        1.8              0.76
    $1.00 - $1.55                 825,000        4.5              1.26

    Totals                    104,097,874        3.4             $0.22


                                      F-38
<PAGE>

The following outlines the significant assumptions used to calculate the
estimated fair value information presented utilizing the Black-Scholes pricing
model for the years ended June 30:

                                     2005            2004           2003
                                     ----            ----           ----
Discount rate                        3.90%          2.00%           3.50%
Volatility                           216%         72% - 112%     105% - 170%
Expected life in years                 3              3               3
Expected Dividend yield               --              --             --

STOCK OPTIONS

From time to time, the Company issues non-plan stock options pursuant to various
agreements and other compensatory arrangements to employees and third parties.

In October 2004, the Company adopted The AccuPoll Holding Corp. 2004 Incentive
Stock Plan (the 2004 ISP). As of September 22, 2005, no options had been granted
under the 2004 ISP and it had not been put to vote by the Company's
shareholders. On September 22, 2005, the Company's Board of Directors approved
the termination of the 2004 ISP.

On September 22, 2005, the Company's Board of Directors approved the adoption of
The AccuPoll Holding Corp. 2005 Incentive Stock Plan (2005 ISP), reserved 60
million shares of common stock for issuance under this plan, and authorized the
issuance options to purchase 51,538,000 shares of the Company's common stock to
qualified grantees, The 2005 ISP allows the Company to issue either stock awards
or restricted stock purchase offers (or options to purchase stock), as defined,
to directors, officers, employees and consultants of the Company. The exercise
price of options shall be no less than 100% (110% for grantees owning more than
10% of the Company's common stock, as defined) of the fair market value on the
date of grant. Options shall vest no less than 20% per year and no sooner than
one year from the date of grant unless approved by the Board of Directors and
shall expire no later than ten years from the date of grant. Unvested options
shall terminate upon cessation of the grantee's status as a director, officer,
employee or consultant to the Company.

A summary of changes in stock options during each year is presented below:

                                                                Weighted Average
                                      Number of Stock Options     Exercise Price
                                      -----------------------     --------------

Balance, June 30, 2002                              6,780,000      $       0.31

Options granted                                     5,670,000              0.94
Options exercised                                          --                --
Options cancelled                                          --                --
                                                 ------------

Balance at June 30, 2003                           12,450,000      $       0.60

Options granted                                       600,000              1.54
Options exercised                                    (550,000)            (0.51)
Options cancelled                                          --                --
                                                 ------------

Balance at June 30, 2004                           12,500,000      $       0.65

Options granted                                            --                --
Options exercised                                          --                --
Options cancelled                                     (20,000)            (0.91)
                                                 ------------

Balance at June 30, 2005                           12,480,000      $       0.63
Exercisable at June 30, 2005                       12,435,000      $       0.63


                                      F-39
<PAGE>

<TABLE>
<CAPTION>
Per Share values at grant date of options issued             Weighted Average          Weighted Average
during:                                                         Fair Value               Exercise Price
                                                                ----------               --------------
<S>                                                                <C>                       <C>
Year ended June 30, 2004:

  Less than fair market value                                          N/A                       N/A
  Equal to fair market value                                       $  0.74                   $  1.54
  Greater than fair market value                                       N/A                       N/A

Year ended June 30, 2005:

  Less than fair market value                                          N/A                       N/A
  Equal to fair market value                                       $  0.63                   $  0.63
  Greater than fair market value                                       N/A                       N/A
</TABLE>

The following table summarizes information related to options at June 30, 2005:

<TABLE>
<CAPTION>
                                     Options Outstanding                         Options Exercisable
                                     -------------------                         -------------------
                                             Weighted Average
                                         Remaining                                             Weighted
                                         Contractual                                           Average
  Exercise Price             Number         Life         Exercise Price           Number    Exercise Price
  --------------          -----------       ----         --------------        -----------  --------------
<S>                         <C>             <C>              <C>                 <C>             <C>
       $0.31                6,480,000       6.92             $0.31               6,480,000       $0.31
       $0.91                5,400,000       7.62             $0.91               5,400,000       $0.91
       $1.54                  600,000       7.44             $1.54                 555,000       $1.54

  Totals                   12,480,000       7.25             $0.63              12,435,000       $0.63
</TABLE>

The following outlines the significant assumptions used to calculate the
estimated fair value information presented utilizing the Black-Scholes pricing
model for the years ended June 30:

                                           2005          2004        2003
                                           ----          ----        ----
Discount rate                              N/A          2.00%        3.50%
Volatility                                 N/A           72%         170%
Expected life in years                     N/A            3            3
Expected Dividend yield                    N/A            --          --

NOTE 12. QUARTERLY INFORMATION (UNAUDITED)

Selected quarterly financial data

Selected quarterly financial data for each of the quarters in the years ended
June 30, 2005 and 2004 are as follows:

<TABLE>
<CAPTION>
    Quarter Ended                  Net Sales            Gross Loss          Net Loss        Net Loss per Share
    -------------                  ---------            ----------          --------        ------------------
<S>                              <C>                  <C>               <C>                    <C>
Fiscal 2005 (as restated):
  September 30                   $        --          $        --       $   (2,791,746)        $      (0.02)
  December 31                    $        --          $        --       $   (2,877,948)        $      (0.01)
  March 31                       $        --          $        --       $   (2,792,539)        $      (0.01)
  June 30                        $    17,416          $      (470)      $   (1,981,214)        $      (0.01)

Fiscal 2004:
  September 30                   $        --          $        --       $   (1,612,690)        $      (0.01)
  December 31                    $        --          $        --       $   (3,530,699)        $      (0.03)
  March 31                       $        --          $        --       $   (4,182,881)        $      (0.03)
  June 30                        $        --          $        --       $   (2,822,504)        $      (0.02)
</TABLE>


                                      F-40
<PAGE>

In the fourth quarter of fiscal year 2005, the Company recorded adjustments that
affect the net loss reported in previous quarters. The effect of these
adjustments on the first three quarters of fiscal 2005 is summarized below:

<TABLE>
<CAPTION>
                                                                 Quarter Ended
                                                  ---------------------------------------------
                                                    9/30/04          12/31/04         3/31/05
                                                  -----------      -----------      -----------
<S>                                               <C>              <C>              <C>
Net loss, as previously reported                  $(3,687,072)     $(2,100,705)     $(2,026,401)
  Fair value of warrants granted for services         794,190         (693,700)        (639,967)
  Interest expense including BCFs                    (141,206)        (148,349)        (251,419)
  Capitalized R&D costs                              (132,255)              --               --
  Legal fees expenses                                      --           55,025          204,349
  Fund raising expenses                               381,517               --           66,035
                                                  -----------      -----------      -----------
Net loss, as restated                             $(2,784,826)     $(2,887,729)     $(2,647,403)
                                                  ===========      ===========      ===========
</TABLE>

In the first fiscal quarter, the Company recorded professional fees expense to
recognize the fiscal 2005 amortization of the fair value of warrants issued for
services in fiscal 2004. The Company expensed an amount greater than was
appropriate in the first fiscal quarter and no expense was recorded for this
fair value amortization in the second or third fiscal quarters. An adjustment
was recorded in the fourth fiscal quarter to expense the proper amortization for
the fiscal year.

During the course of the fiscal year 2005, the Company borrowed under
convertible debenture agreements and recorded the beneficial conversion features
as a debt discount. The underlying borrowings occurred in each of the first
three fiscal quarters however the BCF was not recorded in the Company's accounts
until the fourth fiscal quarter.

In the first fiscal quarter, the Company capitalized certain costs more
appropriately classified as research and development. An adjustment was made in
the fourth fiscal quarter to expense these costs.

In the second and third fiscal quarters, the Company issued shares of common
stock for legal services and recorded expense for the fair market value of the
shares issued. The expense recorded exceeded amounts due for services provided
through March 31, 2005.

During the first and third fiscal quarters, the Company expensed costs
associated with fund raising activities rather than offsetting the proceeds of
funds raised. An adjustment was recorded in the fourth fiscal quarter to reduce
expense and additional paid-in capital.

See the "Restatements and Reclassifications" section of Note 1 for additional
information.

NOTE 13 SUBSEQUENT EVENTS (UNAUDITED)

In August 2005, holders of the November 2003 Debentures exercised their right to
convert $120,000 of principal into 1,920,000 shares of the Company's common
stock. See also Note 6.

The Company did not meet minimum employment requirements under a Location
Incentives Agreement with the Amarillo Economic Development Corporation
("AEDC"). As a result the Company was liable for the repayment of $250,000 cash
advance. As of September 14, 2005, the Company had returned the $250,000 advance
plus attorney fees of $5,000.. See also Note 9 under the caption "Other".

On September 22, 2005, the Company's Board of Directors approved the termination
of the The AccuPoll Holding Corp. 2004 Incentive Stock Plan (the 2004 ISP). In
October 2004, the Company adopted the 2004 ISP. As of September 22, 2005, no
options had been granted under the 2004 ISP and it had not been approved by the
Company's shareholders. Also on September 22, 2005, the Company's Board of
Directors approved the adoption of The AccuPoll Holding Corp. 2005 Incentive
Stock Plan (2005 ISP), reserved 60 million shares of common stock for issuance
under this plan, and authorized the issuance options to purchase 51,538,000
shares of the Company's common stock to qualified grantees. See also Note 11
under the caption "Stock Options".


                                      F-41
<PAGE>

On September 26, 2005, the Company executed a Conversion and Settlement
Agreement with Mutual General Releases whereby, effective September 9, 2005, the
June 2003 Debenture and November 2003 Debentures exercised their rights under
the debenture agreements and converted $2,242,000 of principal in exchange for
59 million shares of the Company's common stock to be issued in installments
through June 2006. The remaining principal and accrued interest totaling
approximately $1,300,000 was forgiven by the debenture holders. In connection
with the agreement, an outstanding warrant to purchase 6,400,000 shares of
common stock at $0.0625 was cancelled and the Company agreed to register for
resale 25 million shares of common stock beneficially owned by the debenture
holders no later than 180 days following September 26, 2005 or earlier as
defined. See also Note 6.


                                      F-42