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

                                   FORM 10-KSB

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

                   For the fiscal year ended December 31, 2003
                   -------------------------------------------

[_] TRANSITION  REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES  EXCHANGE ACT
OF 1934 For the transition period from           to
                                       ---------    ---------

                         Commission File Number 0-11808

                             MB SOFTWARE CORPORATION
             (Exact name of Registrant as specified in its charter)

             Texas                                      59-2220004
--------------------------------------------------------------------------------
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
 incorporation or organization)

2225 E. Randol Mill Road Suite 305, Arlington, Texas    76011-6306
--------------------------------------------------------------------------------
 (Address of principal executive offices)               (Zip Code)

Registrant's telephone number, including area code: (817) 633-9400

           Securities registered pursuant to Section 12(b) of the Act:

     Title of Each Class               Name of Each Exchange on Which Registered
     -------------------               -----------------------------------------
           Common                                 OTC BULLETIN BOARD

           Securities registered pursuant to Section 12(g) of the Act:
                 Common Stock $ .001 par value (Title of Class)

Check  whether  the issuer  (1) has filed all  reports  required  to be filed by
Section 13 or 15(d) of the Securities  Exchange Act of 1934 during the preceding
12 months (or for such shorter  period that the  registrant was required to file
such reports), and (2) has been subject to such filing requirements for the past
90 days. [ ] Yes [X] No

Indicate by check mark if disclosure  of  delinquent  filers in response to Item
405 of Regulation S-B is not contained in this form,  and no disclosure  will be
contained,  to the  best of  registrant's  knowledge,  in  definitive  proxy  or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. [ ]

Issuer's  revenues for its most recent  fiscal year:  $0. The  aggregate  market
value  of the  voting  stock  held by  non-affiliates  of the  registrant  as of
December 31, 2003 was approximately $ 2,453.01.

As of December 31, 2003 5,822,810  shares of the Issuer's $.001 par value common
stock were outstanding.

Transitional Small Business Disclosure Format:  Yes [ ] No [X]


<PAGE>

                             MB SOFTWARE CORPORATION
                                   Form 10-KSB
                      For the Year Ended December 31, 2003


                                                                            Page
                                                                            ----


 ITEM 1.  BUSINESS  ..........................................................1

 ITEM 2.  PROPERTIES..........................................................6

 ITEM 3.  LEGAL PROCEEDINGS...................................................6

 ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.................6

 ITEM 5.  MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED
                 SHAREHOLDER MATTERS..........................................6

 ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION...........7

 ITEM 7.  FINANCIAL STATEMENTS ...............................................8

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

 ITEM 9.   DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS
           AND CONTROL PERSONS................................................9

 ITEM 10. EXECUTIVE  COMPENSATION............................................10

 ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
                  MANAGEMENT.................................................10

 ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.....................11

 ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K...................................12

ITEM 14.  CONTROLS AND PROCEDURES............................................13

<PAGE>


                                     PART 1


<PAGE>

ITEM 1.  BUSINESS

MB Software  Corporation  (the "Company") was incorporated in 1982 as a Colorado
corporation and was reincorporated in the State of Texas in 2002. The Company is
positioned and seeks to be the leading provider of real time  prescription  drug
monitoring services to healthcare professionals and regulatory agencies.

We seek to establish ourselves as the leader for emerging electronic  healthcare
transactions. Historically, little more than billing and eligibility information
have  been   transmitted   electronically   among   healthcare   providers   and
administrators.  However, with the increased prevalence of Internet connectivity
and adoption,  the emergence of new  standards  and HIPAA  legislation,  and the
growing  financial  crisis  facing  the  healthcare  industry,  a new  breed  of
electronic transactions, applications and online services are emerging.

To secure our  position  in this new  market,  we believe  that we are meeting a
critical market demand for  prescription  drug tracking with the offering of our
Veriscriptm  services through the Company's wholly owned,  indirect  subsidiary,
VPS Holding,  LLC.  Veriscrip is currently the Company's only product  offering.
Our first customer for Veriscrip is the Commonwealth of Kentucky,  where a pilot
project  will go live in April  which we  believe  will be the  first  real time
tracking system of its kind in the United States. Veriscrip allows physicians to
electronically  write scripts via any Windows(R) or Palm(R)  compatible  device,
complete with payor-specific drug formulary information, and electronically send
prescriptions  to any  pharmacy.  In  addition,  Veriscrip  provides  a tracking
mechanism to allow  regulators to see when and where scripts were filled.  These
services are being marketed to state agencies to as a method to help them manage
the abuse of prescription  drugs and reduce their Medicaid  expenses  related to
abuse of pharmacy benefits.

Our primary objective is to successfully  complete the Kentucky pilot and secure
contracts  with  other  states to  provide  real time  drug  diversion  tracking
solutions tailored to each state. Beyond what we believe to be a compelling case
for curbing abuse from a  humanitarian  perspective,  state agencies who enforce
compliance  using  Veriscrip  should enjoy Medicaid  savings from a reduction in
pharmacy  benefit  fraud.  Given the  fragile  financial  position of most state
Medicaid programs, we believe this will be of huge benefit to them.

Our  Veriscrip  business  model is based on  providing  electronic  prescription
writing  and  tracking  services.  We believe  that the  largest  portion of our
revenue  will  come from  government  agencies  who will pay for these  services
through a variety of  mechanisms  including,  but not  limited to license  fees,
transaction fees, and cost savings sharing.

Industry Overview

Historically,  the healthcare  transactions  market has been almost  exclusively
comprised of companies offering healthcare providers with "EDI" (Electronic Data
Interchange)  solutions  for  submitting  medical  claims  electronically,   and
acquiring patient eligibility status from insurance  companies.  Dominating this
market  are large  companies  such as WebMD,  ProxyMed,  NDCHealth,  and Per Se'
Technologies.  These companies have large user bases which consistently transmit
their medical billings through the respective networks.  These transactions have
existed since the 1980's and margins from these  transactions  are  increasingly
declining.

However,  with the increased  prevalence of Internet  connectivity and adoption,
the emergence of new standards and HIPAA legislation,  and the growing financial
crisis  facing  the  healthcare  ,  a  new  breed  of  electronic  transactions,
applications  and online  services are  emerging.  These  services will begin to
provide  transactions that further connect "trading partners" in healthcare much
the same way other industries connect throughout supply chains.

<PAGE>

Fueling the growth of a particular  set of  transactions  is the rising abuse of
prescription  drugs.  The high profile  cases  featuring  celebrities  who abuse
prescription  drugs,  combined  with  increased  prevalence of statistics in the
media of  prescription  drug related deaths have increased the pressure on state
and  federal  legislators  to pass  regulations  and  implement  controls on the
systems which administer  prescription drugs. This industry has emerged as "Drug
Diversion  Tracking,"  and is  currently  addressed or is being  considered  for
legislation  in most states.  To address this  problem,  a number of states have
implemented tracking systems that are retrospective and involve heavy amounts of
manual  intervention.  Federal  endorsement  has  come  from a  number  of areas
including the DEA's Hal Rogers fund,  which provides grants to state agencies to
either initiate or enhance their drug monitoring programs.  We expect to meet an
existing need with an enhanced product offering,  which will bring monitoring to
a real time basis, and significantly  reduce financial and human loss associated
with drug abuse.

Although not  directly  competitive,  there are a number of  companies  offering
prescription  writing software  similar to Veriscrip.  These offerings are often
installed at physician  locations on a variety of hardware  platforms  and allow
physicians  to write scripts  electronically.  Few of these  offerings  have the
means to transmit  those  scripts to  pharmacies,  and to the  knowledge  of our
management,  none are packaging their solution for drug diversion tracking.  The
landscape for electronic  scripts includes both the applications  used to create
scripts as well as the networks  involved in handling both the script orders and
the  financial  side of these  transactions.  We believe that we have a solution
that provides both the application to create electronic  prescriptions,  and the
network  that can deliver a script to any  pharmacy in the US. In  addition,  we
offer services to state agencies that allows them to track the  prescribing  and
dispensing of prescription drugs in real time.

Risk Factors of the Business

We have sought to identify what we believe to be the most  significant  risks to
our business. However, we cannot predict whether, or to what extent, any of such
risks may be realized nor can we guarantee that we have  identified all possible
risks that might arise.  Investors  should  carefully  consider all of such risk
factors  before making an investment  decision with respect to our Common Stock.
We provide the  following  cautionary  discussion  of risks,  uncertainties  and
possible inaccurate assumptions relevant to our business. These are factors that
we think  could  cause our actual  results to differ  materially  from  expected
results. Other factors besides those listed here could affect us.

Lack of Operating History
-------------------------

We entered into the electronic healthcare  transactions in November of 2003 with
our  acquisition  of VPS Holding,  LLC.  Thus, we have only a limited  operating
history with which you can evaluate our current business model and our prospects
and the  historical  financial  data may be of limited value in  evaluating  our
future revenue and operating expenses.  Further, you may lose your investment if
we are unable to  successfully  market our services and  implement  our business
plan. We have not been profitable to date.  Even if we become  profitable in the
future,  we cannot  accurately  predict  the level of, or our ability to sustain
profitability.  Because we have not yet been  profitable  and cannot predict any
level of  future  profitability,  you bear the risk of a  complete  loss of your
investment in the event our business plan is unsuccessful.

Inability to Obtain Funding
---------------------------

We may not be able to obtain additional  funding when needed,  which could limit
future  expansion and marketing  opportunities,  as well as result in lower than
anticipated   revenues.   We  may  require   additional   financing   to  pursue
relationships  with other  business  opportunities.  If the market  price of the
common stock declines,  some potential  financiers may either refuse to offer us
any  financing or will offer  financing  at  unacceptable  rates or  unfavorable
terms. If we are unable to obtain  financing on favorable terms, or at all, this
unavailability  could  prevent  us from  expanding  our  business,  which  could
materially impact our future potential revenues.



                                       2
<PAGE>

Continued Control by Existing Management
----------------------------------------

You may lack an effective  vote on corporate  matters and management may be able
to act  contrary  to  your  objectives.  Our  officers  and  board  members  own
approximately  92% of the 5,822,810  shares of our outstanding  common stock. If
management  votes together,  it will influence the outcome of corporate  actions
requiring shareholder approval, including the election of directors, mergers and
asset sales.  As a result,  new  stockholders  may lack an  effective  vote with
respect to the election of directors and other corporate matters.  Therefore, it
is possible  that  management  may take actions  with  respect to its  ownership
interest, which may not be consistent with your objectives or desires.

Unproven Business Model
-----------------------

We believe  there is a strong  market  demand  for  prescription  drug  tracking
services,  as highlighted by recent,  well  publicized  cases of celebrities who
abuse controlled substances. However, these services are new and have never been
offered  before in this form,  and therefore lack a proven  business  model.  We
expect to inure strong revenue from the services we will offer to state agencies
but the soundness of our pricing has not yet been tested.

Lack of State Budgets (Funding for programs such as Veriscrip)
--------------------------------------------------------------

In the event that State agencies are unable to find the appropriate funds to pay
for services or provide internal staff to manage their  implementations,  we may
fail to  secure  state  contracts  and  revenue  and  ultimately  be  forced  to
discontinue operations.

User resistance
---------------

In the event that state  legislation  does not strongly  support the adoption of
real time  monitoring,  our  implementations  could fail,  resulting  in loss of
revenue or inability to garner  revenue  secured by existing  contracts.  In the
event that  resistance is organized,  it could even overturn  legislation  which
will enforce adoption of services such as Veriscrip.

Regulations
-----------

HIPAA and other healthcare  legislation remains in a period of maturing,  during
which time a number of  unforeseen  changes  related  to  privacy or  healthcare
transaction  standards  could  impact our  business.  Although  not  expected to
preclude use from  offering our  services,  such changes could cause us to incur
additional  expenses  in  order  to make  changes  to our  product  and  service
offerings.

Competition
-----------

There are  currently a number of companies  offering  solutions  for  electronic
prescription  services.  Any or several of these companies may seek to enter our
market and focus on regulatory  tracking.  Given their larger  existing  install
bases,  we may have  difficulty  competing  for contracts if put out for bid. In
addition,  large  companies  in  related  industries  (such  as  medical  claims
processing or financial  transaction  processing for scripts) may elect to enter
our market space and leverage their existing  relationships  with large pharmacy
chains, pharmacy benefits managers, or even physician software providers. A move
like this by any number of large  companies would present a number of challenges
to our ability to capture customers required to either fill or bid on contracts.

Dividends
---------

We have not paid and do not currently  intend to pay dividends,  which may limit
the  current  return you may  receive on your  investment  in our common  stock.
Future  dividends  on our  common  stock,  if any,  will  depend  on our  future
earnings,  capital  requirements,  financial  condition  and other  factors.  We
currently  intend to retain  earnings,  if any,  to  increase  our net worth and


                                       3
<PAGE>

reserves.  Therefore,  we do not anticipate that any holder of common stock will
receive any cash,  stock or other dividends on his shares of common stock at any
time in the near future.  You should not expect or rely on the potential payment
of dividends as a source of current income.

Applicable SEC rules  governing the trading of "Penny Stocks" limits the trading
--------------------------------------------------------------------------------
and  liquidity of our common  stock,  which may affect the trading  price of our
--------------------------------------------------------------------------------
common stock.
-------------

Our common stock currently  trades on the OTC Bulletin  Board.  Since our common
stock continues to trade below $5.00 per share, our common stock is considered a
"penny  stock"  and is  subject  to SEC  rules  and  regulations,  which  impose
limitations upon the manner in which our shares can be publicly traded.

These  regulations  require the delivery,  prior to any transaction  involving a
penny stock, of a disclosure  schedule explaining the penny stock market and the
associated risks.  Under these  regulations,  certain brokers who recommend such
securities to persons  other than  established  customers or certain  accredited
investors must make a special written suitability determination regarding such a
purchaser and receive such purchaser's  written agreement to a transaction prior
to sale.  These  regulations have the effect of limiting the trading activity of
our common  stock and  reducing the  liquidity  of an  investment  in our common
stock.

Stockholders  should be aware that,  according  to the  Securities  and Exchange
Commission  Release No. 34- 29093,  the market for penny  stocks has suffered in
recent years from patterns of fraud and abuse. These patterns include:

     -    Control of the market for the security by one or a few  broker-dealers
          that are often related to the promoter or issuer;

     -    Manipulation of prices through  prearranged  matching of purchases and
          sales and false and misleading press releases;

     -    "Boiler room"  practices  involving  high  pressure  sales tactics and
          unrealistic price projections by inexperienced sales persons;

     -    Excessive and undisclosed bid-ask differentials and markups by selling
          broker-dealers; and

     -    The  wholesale  dumping  of  the  same  securities  by  promoters  and
          broker-dealers  after prices have been manipulated to a desired level,
          along with the  inevitable  collapse of those  prices with  consequent
          investor losses.

Furthermore,  the "penny stock" designation may adversely affect the development
of any public  market  for the  Company's  shares of common  stock or, if such a
market develops,  its  continuation.  Broker-dealers  are required to personally
determine whether an investment in "penny stock" is suitable for customers.

Penny  stocks  are  securities  (i) with a price of less than five  dollars  per
share; (ii) that are not traded on a "recognized" national exchange; (iii) whose
prices are not quoted on the NASDAQ automated  quotation  system  (NASDAQ-listed
stocks must still meet  requirement  (i)  above);  or (iv) of an issuer with net
tangible  assets  less than  $2,000,000  (if the issuer  has been in  continuous
operation  for at least three years) or $5,000,000  (if in continuous  operation
for less  than  three  years),  or with  average  annual  revenues  of less than
$6,000,000 for the last three years.

Section  15(g) of the  Exchange  Act, and Rule 15g-2 of the  Commission  require
broker-dealers  dealing in penny stocks to provide  potential  investors  with a
document  disclosing  the risks of penny stocks and to obtain a manually  signed
and dated written receipt of the document before  effecting any transaction in a
penny stock for the  investor's  account.  Potential  investors in the Company's
common  stock are urged to obtain  and read  such  disclosure  carefully  before
purchasing any shares that are deemed to be "penny stock."

Rule 15g-9 of the Commission requires  broker-dealers in penny stocks to approve
the account of any investor for  transactions  in such stocks before selling any
penny stock to that investor.  This procedure  requires the broker-dealer to (i)
obtain from the investor information  concerning his or her financial situation,


                                       4
<PAGE>

investment  experience and investment  objectives;  (ii)  reasonably  determine,
based on that  information,  that  transactions in penny stocks are suitable for
the investor and that the investor has sufficient knowledge and experience as to
be reasonably capable of evaluating the risks of penny stock transactions; (iii)
provide the investor with a written  statement  setting forth the basis on which
the  broker-dealer  made the  determination  in (ii) above;  and (iv)  receive a
signed and dated copy of such  statement from the investor,  confirming  that it
accurately reflects the investor's  financial situation,  investment  experience
and investment  objectives.  Compliance with these requirements may make it more
difficult for the Company's stockholders to resell their shares to third parties
or to otherwise dispose of them.

Future sales of large amounts of common stock could adversely  effect the market
--------------------------------------------------------------------------------
price of our common stock and our ability to raise capital.
-----------------------------------------------------------

Future sales of our common stock by existing  stockholders  pursuant to Rule 144
under the  Securities  Act of 1933,  or following  the exercise of future option
grants,  could  adversely  affect the  market  price of our  common  stock.  Our
directors and executive  officers and their family  members are not under lockup
letters or other forms of  restriction  on the sale of their common  stock.  The
issuance of any or all of these additional  shares upon exercise of options will
dilute the voting power of our current stockholders on corporate matters and, as
a result,  may cause the market price of our common stock to decrease.  Further,
sales of a large  number of shares of common  stock in the public  market  could
adversely  affect the  market  price of the  common  stock and could  materially
impair our future  ability to generate  funds  through  sales of common stock or
other equity securities.

Dependence on Executive Officers and Technical Personnel
--------------------------------------------------------

The success of our business plan depends on attracting qualified personnel,  and
failure to retain the necessary  personnel could adversely  affect our business.
Competition for qualified  personnel is intense,  and we may need to pay premium
wages to attract  and  retain  personnel.  Attracting  and  retaining  qualified
personnel  is  critical  to our  business.  Inability  to attract and retain the
qualified  personnel necessary would limit our ability to implement our business
plan successfully.

Adverse Effect of Shares Eligible for Future Sale
-------------------------------------------------

Future sales of large amounts of common stock could adversely  affect the market
price of our common stock and our ability to raise capital.  Future sales of our
common stock by existing  stockholders pursuant to Rule 144 under the Securities
Act, or following the exercise of outstanding  options,  could adversely  affect
the  market  price of our common  stock.  Substantially  all of the  outstanding
shares  of  our  common  stock  are  freely  tradable,  without  restriction  or
registration under the Securities Act, other than the sales volume  restrictions
of Rule 144 applicable to shares held  beneficially by persons who may be deemed
to be affiliates.  Our directors and executive officers and their family members
are not under lockup  letters or other forms of restriction on the sale of their
common  stock.  The  issuance  of any or all of  these  additional  shares  upon
exercise of options will dilute the voting power of our current  stockholders on
corporate  matters  and, as a result,  may cause the market  price of our common
stock to decrease. Further, sales of a large number of shares of common stock in
the public  market could  adversely  affect the market price of the common stock
and could  materially  impair our future ability to generate funds through sales
of common stock or other equity securities.

Potential Fluctuations in Quarterly Results
-------------------------------------------

Significant  variations in our quarterly  operating results may adversely affect
the market price of our common  stock.  Our  operating  results have varied on a
quarterly  basis  during  our  operating  history,  and we expect to  experience
significant   fluctuations  in  future  quarterly   operating   results.   These
fluctuations have been and may in the future be caused by numerous factors, many
of  which  are  outside  of  our  control.  We  believe  that   period-to-period
comparisons of our results of operations  will not necessarily be meaningful and
that you should not rely upon them as an indication of future performance. Also,


                                       5
<PAGE>

it is likely  that our  operating  results  could be below the  expectations  of
public market  analysts and investors.  This could  adversely  affect the market
price of our common stock.

Employees
---------

The Company does not currently have any employees.  However, it does utilize the
administrative  services of an employee of an entity controlled by the President
of the Company and intends to hire full time  employees in the first  quarter of
2004.

Reports to Security Holders
---------------------------

The Company is required to deliver  period and other  reports to the  Securities
and  Exchange  Commission  ("Commission").  The  public  may  read  and copy any
materials that are filed by the Company with the Commission at the  Commission's
Public  Reference Room at 450 Fifth Street,  N.W.,  Washington,  D.C. 20549. The
public may obtain  information on the operation of the Public  Reference Room by
calling the Commission at 1-800-SEC-0330.  The statements and forms filed by the
Company with the Commission have been filed electronically and are available for
viewing  or  copy on the  Commission  maintained  Internet  site  that  contains
reports,  proxy, and information  statements,  and other  information  regarding
issuers that file electronically  with the Commission.  The Internet address for
this site can be found at: http://www.sec.gov.

ITEM 2. PROERTIES

The Company's principal executive office is located at 2225 E. Randol Mill Road,
Suite  305,  Arlington,  TX  76011.  These  premises  are  leased  by an  entity
controlled by the President of the Company. At present, the Company pays no rent
and the Company does not anticipate requiring any additional office space in the
next twelve months.

ITEM 3. LEGAL PROCEEDINGS

None. On March 8, 2004,  VPS Holdings,  LLC.,  received a letter from  attorneys
representing  Nevoca.com.  The  letter  implies  that  the  Company's  Veriscrip
technology  may  violate a patent  held by Nevoca.  We do not  believe  that our
technology  violates the Nevoca patent and have not  entertained any discussions
regarding  licensing the Nevoca patent.

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

No  matter  was  submitted  to a  vote  of the  security  holders,  through  the
solicitation  of proxies or otherwise,  during the fourth quarter ended December
31, 2003.

                                     PART II

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

The Company's  common stock is quoted on the Over the Counter  Bulletin Board, a
service maintained by the National  Association of Securities Dealer, Inc. under
the symbol "MBSB".  Trading in the common stock in the  over-the-counter  market
has been  limited  and  sporadic  and the  quotations  set  forth  below are not
necessarily  indicative  of actual  market  conditions.  Further,  these  prices
reflect  inter-dealer prices without retail mark-up,  mark-down,  or commission,
and may not necessarily reflect actual transactions.



                                       6
<PAGE>

The high and low sales prices are as follows for the periods indicated:

              -------- ----------------------- --------- ---------
                YEAR       QUARTER ENDING         HIGH      LOW
              -------- ----------------------- --------- ---------
                2002     March 31, 2002*         $0.05     $0.02
              -------- ----------------------- --------- ---------
                         June 30, 2002*          $0.01     $0.01
              -------- ----------------------- --------- ---------
                         September 30, 2002*     $0.01     $0.01
              -------- ----------------------- --------- ---------
                         December 31, 2002*      $0.01     $0.01
              -------- ----------------------- --------- ---------
                2003     March 31, 2003*         $0.01     $0.01
              -------- ----------------------- --------- ---------
                         June 30, 2003*          $0.01     $0.01
              -------- ----------------------- --------- ---------
                         September 30, 2003      $0.01     $0.01
              -------- ----------------------- --------- ---------
                         December 31, 2003       $0.01     $0.01
              -------- ----------------------- --------- ---------

*does not reflect split adjusted price  resulting from 100:1 reverse stock split
effective June 24, 2002.

Record Holders
--------------

As of December 31, 2003, there were  approximately  2000  shareholders of record
holding a total of 5,822,810  shares of common stock.  The holders of the common
stock are  entitled  to one vote for each  share  held of record on all  matters
submitted  to a vote  of  stockholders.  Holders  of the  common  stock  have no
preemptive  rights and no right to  convert  their  common  stock into any other
securities. There are no redemption or sinking fund provisions applicable to the
common stock.

Dividends
---------

The Company has not declared any cash  dividends  since  inception  and does not
anticipate  paying any  dividends  in the  foreseeable  future.  The  payment of
dividends is within the  discretion of the board of directors and will depend on
the Company's earnings,  capital  requirements,  financial condition,  and other
relevant  factors.  There are no restrictions that currently limit the Company's
ability to pay dividends on its common stock other than those generally  imposed
by  applicable  state law. The Company has  determined  that it will utilize any
earnings in the expansion of its business.

ITEM 6.  MANAGEMENT'S PLAN OF OPERATION

Plan of Operation
-----------------

The  Company  currently  has limited  business  operations,  maintaining  leased
offices in Arlington,  TX, and  Lexington,  KY.  Business  activities  currently
include  sales  and  marketing  activities  to  state  organizations,   and  the
implementation and management of the KY pilot program.

Through its  informal  pre-marketing  and  marketing  activities,  and its pilot
program,  the  Company  continues  to  refine  its  strategy  to secure a strong
position in the online healthcare  transactions  market.  Management  intends to
draft this strategy into a formal business plan, internally fund operations, and
may consider  raising  external funds upon successful  implementation  of the KY
pilot.

Pursuant  to its  strategy,  the  Company  secured a license  for an  additional
prescription  transaction  system that it will  incorporate  into its  Veriscrip
offering.  The  company's  primary  expenses are  expected to be  marketing  and
development/customization for state by state projects.

During 2004, the Company  anticipates hiring a number of management,  marketing,
and  technical  staff to secure  contracts  and  further  increase  our  product
offering.



                                       7
<PAGE>

Liquidity and Capital Resources

As of December 31, 2003, the Company had no  significant  assets other than it's
contract for the Kentucky pilot project.  The Company anticipates that its major
shareholders  will contribute  sufficient funds to satisfy the cash needs of the
Company through calendar year ending December 31, 2004. However, there can be no
assurances to that effect, as the Company has minimal revenues and the Company's
need for  capital  may change  dramatically  if it  acquires  an  interest  in a
business  opportunity  during that  period,  or secures a contract  with a state
agency.

Going Concern
-------------

The independent auditors' report contains language indicating that the financial
statements  have been  prepared on a going  concern  basis,  which  contemplates
realization of assets and  liquidation of liabilities in the ordinary  course of
business. The Company has continuously incurred losses from operations and has a
significant  accumulated deficit. The appropriateness of using the going concern
basis is dependent upon the Company's ability to obtain additional  financing or
equity  capital  and,  ultimately,  to  achieve  profitable  operations.   These
conditions  raise  substantial  doubt  about its  ability to continue as a going
concern.  The  financial  statements do not include any  adjustments  that might
result from the outcome of this uncertainty.

It is the Company's  belief that it will continue to incur nominal losses for at
least the next twelve months, and as a result will require additional funds from
debt or equity investments to meet such needs. Without realization of additional
capital,  it would be unlikely  for the Company to continue as a going  concern.
The Company  anticipates  that its officers  and  shareholders  will  contribute
sufficient  funds to satisfy  the cash needs of the  Company for the next twelve
months.  However,  there can be no assurances to that effect, as the Company has
no revenues and the Company's need for capital may change  dramatically if it is
successful  in acquiring a new  business.  If the Company  cannot  obtain needed
funds,  it may be  forced to  curtail  or cease its  activities.  To meet  these
objectives,  management's plans are to (i) raise capital by obtaining  financing
through private placement efforts, (ii) issue common stock for services rendered
in lieu of cash payments and (iii) obtain loans from  officers and  shareholders
as necessary.

The Company's future ability to achieve these objectives cannot be determined at
this time. The accompanying  financial statements do not include any adjustments
that  might  result  from the  outcome  of this  uncertainty  and  should not be
regarded as typical for normal operating periods.

ITEM 7.  FINANCIAL STATEMENTS

The financial statements of the Company are filed as an exhibit hereto.

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

None.

ITEM 8A. CONTROLS AND PROCEDURES

The chief executive  officer and the principal  financial officer of the Company
have  concluded  based on their  evaluation as of a date within 90 days prior to
the date of the filing of this Report,  that the Company's  disclosure  controls
and procedures are effective to ensure that information required to be disclosed
by the Company in the reports filed or submitted by it under the  Securities Act
of 1934, as amended, is recorded, processed,  summarized and reported within the
time periods  specified in the  Securities and Exchange  Commission's  rules and
forms, and include  controls and procedures  designed to ensure that information
required to be disclosed by the  Commission in such reports is  accumulated  and
communicated  to  the  Company's   management,   including  the  president,   as
appropriate to allow timely decisions regarding required disclosure.

There were no significant changes in the Company's internal controls or in other
factors that could significantly affect these controls subsequent to the date of
such evaluation.




                                       8
<PAGE>

                                    PART III

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

The following table sets forth certain  information  regarding the directors and
executive officers of the Company:

                                                                      Year First
Name                     Age       Position                             Elected
----                    -----      --------                             -------

Scott A. Haire            39       Chairman, Chief Executive
                                   Officer, President and Director        1993
Gilbert A. Valdez         60       Director                               1996
Araldo A. Cossutta        79       Director                               1994
Steven W. Evans           53       Director                               1994
Robert E. Gross           59       Director                               1994
Thomas J. Kirchhofer      63       Director                               1994

Executive  Officers of the Compa ny are elected on an annual  basis and serve at
the  discretion of the Board of Directors.  Directors of the Company are elected
on an  annual  basis.  All  directors  agreed to  remain  until the 2004  annual
meeting.

Scott A. Haire is Chairman of the Board,  Chief Executive  Officer and President
of the Company.  Prior to founding MedBanc Data Corporation,  he was an employee
of the  Company  from  November  1993 to June 1994.  Previously,  Mr.  Haire was
president of Preferred  Payment  Systems,  a company  specializing in electronic
claims and insurance system related projects.

Gilbert A. Valdez is Chief  Operating  Officer of the Company and past President
and CEO of four major financial and healthcare  corporations.  Most recently, he
served as CEO of Hospital Billing and Collection Services,  Inc., a $550 million
healthcare receivables financing entity located in Wilmington,  Delaware;  Datix
Corporation, an Atlanta-based corporate divestiture from Harris-Lanier; Medaphis
Corporation, an interstate, multi-dimensional healthcare service agency based in
Atlanta;  and NEIC, a national consortium of 40 major insurance companies formed
for development of electronic claim billing  standards.  Mr. Valdez has 30 years
of senior healthcare receivables financing experience.

Araldo A.  Cossutta is President of Cossutta and  Associates,  an  architectural
firm  based  in New  York  City,  with  major  projects  throughout  the  world.
Previously,  he was a partner  with I.M. Pei & Partners and is a graduate of the
Harvard  Graduate  School of Design and the Ecole des Beaux  Arts in Paris.  Mr.
Cossutta was a significant  shareholder  in Personal  Computer Card  Corporation
("PC3") and was chairman of PC3 at the time of its acquisition by the Company in
November  1993.  He is also was a large  shareholder  and  director  of Computer
Integration Corporation of Boca Raton, Florida from 1993 to 2000.

Steven W. Evans is a Certified Public Accountant and President of Evans Phillips
& Co., PSC, an accounting firm which he established in 1976 in Barbourville  and
Middlesboro,  Kentucky.  He is also a founder and active in PTRL, which operates
contract research laboratories located in Kentucky,  North Carolina,  California
and Germany. He is also a founder and active in the management of environmental,
financial and hotel corporations in Kentucky and Tennessee.

Robert E. Gross is President of R. E. Gross & Associates,  providing  consulting
and systems  projects  for clients in the  multi-location  service,  banking and
healthcare  industries.  From 1987 to 1990,  he was vice  president  - technical
operations for Medaphis  Physicians Service Corp.,  Atlanta,  Georgia.  Prior to
that,  he held  executive  positions  with  Chi-Chi's,  Inc.,  Royal  Crown  and
TigerAir. He also spent 13 years as an engineer with IBM.



                                       9
<PAGE>
<TABLE>
<CAPTION>

Thomas J. Kirchhofer is president of Synergy Wellness  Centers of Georgia,  Inc.
He is past president of the Georgia Chiropractic Association.

Compliance with Section 16(a) of the Exchange Act
-------------------------------------------------

Based  solely upon a review of Forms 3, 4 and 5 furnished  to the  Company,  one
transaction  conducted  by each of Messrs.  Haire,  Cossutta  and Evans that was
required to be reported by Section 16(a) of the Securities Exchange Act of 1934,
was reported late during the period ended December 31, 2003..

ITEM  10.  EXECUTIVE COMPENSATION

Executive Compensation
----------------------

Except as set forth below, no compensation in excess of $100,000 was awarded to,
earned  by, or paid to any  executive  officer of the  Company  during the years
2003,  2002, and 2001. The following  table and the  accompanying  notes provide
summary  information for each of the last three fiscal years concerning cash and
non-cash compensation paid or accrued by the Company's current and past officers
over the past three years.

                           SUMMARY COMPENSATION TABLE

------------------------------------------------------------------------------------------------------------------
                                Annual Compensation                          Long Term Compensation
------------------------------------------------------------------------------------------------------------------
                                                                        Awards                    Payouts
------------------------------------------------------------------------------------------------------------------
                                                   Other      Restricted    Securities
Name and                                          Annual        Stock       Underlying      LTIP       All Other
Principal        Year     Salary       Bonus    Compensation   Award(s)       Options      payouts    Compensation
Position                    ($)         ($)         ($)          ($)          SARs(#)        ($)          ($)
------------------------------------------------------------------------------------------------------------------
<S>              <C>     <C>           <C>      <C>           <C>           <C>            <C>        <C>
Scott A. Haire   2003       -0-          -           -            -              -            -            -
                 2002    $ 60,000        -           -            -              -            -            -
                 2001    $120,000        -           -            -              -            -            -
------------------------------------------------------------------------------------------------------------------
</TABLE>

Compensation of Directors
-------------------------

The Company's  directors are not currently  compensated  for their services as a
director of the Company and are not currently reimbursed for out-of-pocket costs
incurred in attending meetings.

Board of Directors Committees
-----------------------------

The  board  of  directors  has not  yet  established  an  audit  committee  or a
compensation  committee.  An  audit  committee  typically  reviews,  acts on and
reports  to the  board  of  directors  with  respect  to  various  auditing  and
accounting matters, including the recommendations and performance of independent
auditors,  the scope of the annual  audits,  fees to be paid to the  independent
auditors, and internal accounting and financial control policies and procedures.
Certain stock exchanges  currently  require  companies to adopt a formal written
charter that establishes an audit committee that specifies the scope of an audit
committee's  responsibilities  and the  means  by  which it  carries  out  those
responsibilities.  In order to be listed on any of these  exchanges,  we will be
required to establish an audit committee.

The board of directors has not yet established a compensation committee.

ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth certain  information  concerning the ownership of
the  Company's  common stock as of December 31, 2003,  with respect to: (i) each
person known to the Company to be the beneficial owner of more than five percent


                                       10
<PAGE>

of the  Company's  common stock;  (ii) all  directors;  and (iii)  directors and
executive  officers  of the  Company  as a group.  The  notes  accompanying  the
information in the table below are necessary for a complete understanding of the
figures provided below.

As of December 31, 2003,  there were 5,822,810 shares of common stock issued and
outstanding.

                                                Amount and Nature
Title      Name of Beneficial                     of Beneficial          Percent
Class      Owner of Group (1)                       Ownership           of Class
-----      ------------------                       ---------           --------

Common     Scott A. Haire2                          1,971,667              34%

Common     Araldo A. Cossutta3                      1,725,000              30%

Common     Steven W. Evans4                         1,333,333              23%

Common     Thomas J. Kirchhofer5                        1,500               *

Common     Robert E. Gross6                             2,000               *

Common     Gilbert Valdez7                              6,000               *

Common     All Directors and Executive Officers
           As a Group (six in number)               5,357,713              92%

Common     Robert Shaw8                               110,000               2%

Common     Imagine Investments                         45,000               *%

* Less than 1%

(1)  Unless  otherwise  noted,  the address for each person or entity  listed is
     2225 E. Randol Mill Road, Suite 305, Arlington, Texas, 76011.
(2)  Includes  33,000  shares  subject  to  stock  options  that  are  presently
     exercisable.
(3)  Includes   1,000  shares  subject  to  stock  options  that  are  presently
     exercisable.
(4)  Includes 2,000 shares subject to options that are presently exercisable.
(5)  Consists 1,500 of shares subject to options that are presently exercisable.
(6)  Consists 2,000 of shares subject to options that are presently exercisable.
(7)  Includes 3,000 shares subject to options that are presently exercisable.
(8)  Mr. Shaw has sole voting and dispositive power with respect to 1,506 shares
     and shares voting and dispositive power with respect to 131,494 shares. Mr.
     Shaw is presently principally occupied as an executive officer and director
     of  Consolidated  National  Corporation  ("CNC"),  a privately held company
     organized  under the laws of the State of Florida.  CNC has sole voting and
     dispositive power with respect to 21,494 shares.  The principal business of
     CNC is investment,  management and consulting.  Mr. Shaw is an affiliate of
     RMS Investments,  Ltd., a limited  partnership  organized under the laws of
     the State of Florida  ("RMS").  RMS has sole voting and  dispositive  power
     with respect to 110,000 shares.  The principal business of RMS Investments,
     Ltd. is investment  holdings.  Mr. Shaw is also a director and President of
     Imagine.  Each of Mr. Shaw, CNC and RMS have their  principal  business and
     principal office address at 504 Clubside Circle, Venice, Florida 34293.


ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Effective August 1, 2002, the Company sold its 99% equity interest in eAppliance
Innvoations,  LLC to  eAppliance  Payment  Solutions,  LLC in  exchange  for the
assumption by eAppliance  Payment  Solutions,  LLC of  substantially  all of the
Company's  liabilities.  Mr. Scott A. Haire,  the Company's  President and Chief


                                       11
<PAGE>

Executive  Officer  directly owns 0.5%, of the  membership  interests in Payment
Solutions, and beneficially may be deemed to own an additional 57.8% through HEB
LLC and SAH, LLC. Mr. Haire is also the Manager of Payment Solutions.

Mr.  Gilbert  Valdez and Mr.  Araldo  Cossutta,  each a director of the Company,
directly  own 0.5%,  and 16.44%,  respectively,  of the  membership  interest in
Payment Solutions.  Mr. Cossutta may be deemed to beneficially own an additional
8.38%  of the  membership  interests  of  Payment  Solutions  thorough  Patricia
Cossutta, his wife.

Mr.  Richard F. Dahlson,  a partner with the law firm of Jackson  Walker L.L.P.,
the Company's  chief legal  counsel,  owns 7.51% of the  membership  interest in
Payment Solutions.

Effective November 10, 2003, the Company acquired MB Holding Corporation through
a merger  transaction,  for an aggregate of  5,000,000  shares of the  Company's
common stock.  Messrs.  Haire and  Cossutta,  were the sole owners of MB Holding
Corporation.  In connection  with the acquistion,  Mr. Steven Evans,  one of the
Company's  directors,  received a portion of the 5,000,000  shares issued in the
acquistion.

ITEM 13.  EXHIBITS AND REPORTS ON FORM 8-K

(a)      Exhibits.

         Exhibit No.

         3.1      Articles of  Incorporation.  (incorporated by reference to the
                  Company's  Form 10-QSB for the fiscal  quarter  ended June 30,
                  2002)

         3.2      Bylaws.  (incorporated  by  reference  to the  Company's  Form
                  10-QSB for the fiscal quarter ended June 30, 2002)

         10.1     Restructure  and Settlement  Agreement dated as of November 5,
                  2001  by  and  among  MB  Software   Corporation,   Healthcare
                  Innovations, LLC, Imagine Investments,  Inc., and XHI(2), Inc.
                  (incorporated  by reference to the  Company's  Form 10-QSB for
                  the fiscal quarter ended September 30, 2001)

         10.2     Agreement and Plan of Merger, dated as of November 10, 2003 by
                  and among MBH Acquisition,  Inc., MB Software Corporation,  MB
                  Holding Corporation, and all of the stockholders of MB Holding
                  Corporation.  (incorporated  by  reference  to  the  Company's
                  Current  Report  on Form 8-K,  filed  with the  commission  on
                  November 21, 2003)

         31.1     Certification  of Principal  Executive  Officer and  Principal
                  Financial  Officer in accordance with 18 U.S.C.  Section 1350,
                  as adopted by Section 302 of the Sarbanes-Oxley Act of 2002*

         32.1     Certification  of Principal  Executive  Officer and  Principal
                  Financial  Officer in accordance with 18 U.S.C.  Section 1350,
                  as adopted by Section 906 of the Sarbanes-Oxley Act of 2002*

*  Filed herewith

(b)      Reports on Form 8-K. None.

         The Company  filed one Current  Report on Form 8-K on November 21, 2003
         reporting the acquisition of MB Holding  Corporation  under Items 2 and
         7, of such Report.



                                       12
<PAGE>

ITEM 14.  PRINCIPAL ACCOUNTANT FEES AND SERVICES

         Clancy and Co.,  P.L.L.C.  served as the  independent  auditors  of the
Company for the years ended December 31, 2003 and 2002.  The Company's  board of
directors  pre-approves  all  services  performed  by  the  Company's  principal
auditor.

         During  2003 and 2002,  the Company  retained  its  principal  auditor,
Clancy and Co.,  P.L.L.C.,  to provide services in the following  categories and
amounts:


                                  2003               2002

Audit Fees                     $ 9,000.00        $ 11,850.00
Audit-Related Fees                --                4,650.00
Tax Fees                          --                 --
All Other Fees                    --                  870.00
                               ----------        -----------
Total                          $ 9,000.00        $ 17,370.00

         The Audit fees for the years ended  December 31, 2003 and 2002 were for
professional  services  rendered  for the  audit of the  consolidated  financial
statements of the Company.

                                   SIGNATURES

In  accordance  with  Section 13 or 15(d) of the Exchange  Act,  the  registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized, this 6th day of April 2004.

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

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

/s/ Scott A. Haire     CEO, President, Chairman and Principal
------------------     Financial Officer                           April 7, 2004
Scott A. Haire


























                                       13
<PAGE>

                                INDEX TO EXHIBITS


(a)      Exhibits

         31.1     Certification  of Principal  Executive  Officer and  Principal
                  Financial  Officer in accordance with 18 U.S.C.  Section 1350,
                  as adopted by Section 302 of the Sarbanes-Oxley Act of 2002

         32.1     Certification  of Principal  Executive  Officer and  Principal
                  Financial  Officer in accordance with 18 U.S.C.  Section 1350,
                  as adopted by Section 906 of the Sarbanes-Oxley Act of 2002




























                                       14
<PAGE>

                    MB SOFTWARE CORPORATION AND SUBSIDIARIES
                   Index to Consolidated Financial Statements
--------------------------------------------------------------------------------


Independent Auditors' Report . . . . . . . . . . . . . . . . . . . . . . . . F-2

Consolidated Balance Sheet . . . . . . . . . . . . . . . . . . . . . . . . . F-3

Consolidated Statements of Operations . . . . . . . . . . . . . . . . . . . .F-4

Consolidated Statements of Changes in Stockholders' Equity (Deficiency) . . .F-5

Consolidated Statements of Cash Flows . . . . . . . . . . . . . . . . .F-6 - F-7

Notes to the Consolidated Financial Statements . . . . . . . . .  . . F-8 - F-20


































                                      F-1
<PAGE>

                          INDEPENDENT AUDITORS' REPORT


To the Board of Directors and Stockholders of
MB Software Corporation

We have  audited  the  accompanying  consolidated  balance  sheet of MB Software
Corporation,  a  Texas  Corporation,  and  Subsidiaries  (the  "Company")  as of
December  31,  2003,  and the related  consolidated  statements  of  operations,
changes in stockholders' equity (deficiency), and cash flows for the years ended
December 31, 2003 and 2002.  These  consolidated  financial  statements  are the
responsibility of the Company's management.  Our responsibility is to express an
opinion on these financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing standards
in the  United  States of  America.  Those  standards  require  that we plan and
perform the audit 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 of the financial statements provide a reasonable basis for our opinion.

In our opinion, the consolidated  financial statements referred to above present
fairly, in all material  respects,  the consolidated  financial  position of the
Company as of December 31, 2003,  and the results of their  operations and their
cash flows for the preceding two years then ended,  in conformity with generally
accepted accounting principles 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 2 to the
financial  statements,  the  Company  has  incurred  recurring  losses and has a
significant accumulated deficit. These factors raise substantial doubt about the
Company's ability to continue as a going concern.  Management's  plans in regard
to these matters are also  discussed in Note 2. The financial  statements do not
include any adjustments that might result from the outcome of this uncertainty.


Clancy and Co., P.L.L.C.
Phoenix, Arizona

March 10, 2004




















                                      F-2
<PAGE>

                    MB SOFTWARE CORPORATION AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEET
                                DECEMBER 31, 2003

ASSETS
------
Current Assets
   Cash                                                             $       385
   Due from related parties (Note 4)                                    467,760
                                                                    -----------
Total current assets                                                    468,145

Other Assets
   License, net of amortization of $31,667 (Note 3)                      68,333
                                                                    -----------

Total Assets                                                        $   536,478
                                                                    ===========

LIABILITIES AND STOCKHOLDERS' DEFICIENCY
----------------------------------------
Current liabilities
   Accounts payable                                                 $    56,724
   Notes payable (Note 5)                                               457,500
   Accrued interest payable (Note 5)                                     45,154
                                                                    -----------
Total current liabilities                                               559,378

Stockholders' Deficiency
   Preferred stock, $10 par value, 5,000,000 shares authorized;
      issued and outstanding none                                          --
   Common stock:  $0.001 par value;  20,000,000 shares authorized;
      issued and outstanding 5,822,810                                    5,823
   Additional paid-in capital                                         9,032,385
   Accumulated deficit                                               (9,049,069)
                                                                    -----------
                                                                        (10,861)
   Less: treasury stock, at cost;  4,089 shares                         (12,039)
                                                                    -----------
Total stockholders' deficiency                                          (22,900)
                                                                    -----------

Total Liabilities and Stockholders' Deficiency                      $   536,478
                                                                    ===========




















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

                                      F-3
<PAGE>
<TABLE>
<CAPTION>

                    MB SOFTWARE CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                 FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002

                                                              2003           2002
                                                          -----------    -----------
<S>                                                       <C>            <C>
Revenues - license                                        $      --      $   125,000

Operating Expenses
   Selling, general and administrative                        382,826        715,884
                                                          -----------    -----------

Loss from operations                                         (382,826)      (590,884)

Other Income (Expense)
   Net assets related to Portalook written off                   --         (292,347)
   Write off of receivables - related party                      --         (397,359)
   Forgiveness of debt - unrelated party                         --          195,986
   Interest expense                                           (45,154)      (187,124)
   Interest income                                               --           14,497
                                                          -----------    -----------
Total other income (expense)                                  (45,154)      (666,347)
                                                          -----------    -----------

Loss before benefit for income taxes                         (427,980)    (1,257,231)

Benefit for income taxes (Note 7)                                --          (78,676)
                                                          -----------    -----------

Loss from continuing operations                              (427,980)    (1,178,555)

Discontinued operations
   Income from operations, net of tax effect of $78,676          --          152,720
                                                          -----------    -----------

Net loss                                                  $  (427,980)   $(1,025,835)
                                                          ===========    ===========


Loss from continuing operations                              (427,980)   $(1,178,555)
Plus cumulative preferred stock dividends                        --         (113,333)
                                                          -----------    -----------
Loss available to common stockholders                     $  (427,980)   $(1,291,888)
                                                          ===========    ===========

Basic and diluted loss per share:
   Continuing operations                                  $     (0.28)   $     (1.50)
   Discontinued operations                                       --             0.19
                                                          -----------    -----------
                                                          $     (0.28)   $     (1.31)
                                                          ===========    ===========

Weighted average common shares outstanding                  1,521,440        785,676
                                                          ===========    ===========
</TABLE>








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

                                      F-4
<PAGE>
<TABLE>
<CAPTION>

                    MB SOFTWARE CORPORATION AND SUBSIDIARIES
           CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
                        YEARS DECEMBER 31, 2003 AND 2002

                                                Series A      Series A
                                               Preferred     Preferred         Common         Common
                                                 Stock         Stock           Stock          Stock
                                                 Shares        Amount          Shares         Amount
                                              --------------------------------------------------------
<S>                                           <C>            <C>            <C>            <C>
Balance, December 31, 2001                        340,000    $ 3,400,000        734,000    $       734

Common stock issued for cash                         --             --            1,000              1

Restructure and Settlement Agreement
    datedNovember 5, 2001 (settled
    on May 8, 2002) (Note 3)                     (340,000)    (3,400,000)        45,000             45

Common stock issued for consulting services
    rendered                                         --             --           46,000             46
Capital restructuring (Note 3)                       --             --             --             --

Fractional shares adjustment                         --             --           (3,190)            (3)
Net loss                                             --             --             --             --
                                              --------------------------------------------------------

Balance, December 31, 2002                           --          822,810      8,632,456        (12,039)


Common stock issued for license (Note 3)             --             --        5,000,000          5,000

Gain on sale of assets between entities
     under common control                            --             --             --             --

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

Balance, December 31, 2003                           --      $      --        5,822,810    $     5,823
                                              ========================================================

                                              Additional
                                                Paid-In     Accumulated     Treasury
                                                Capital       Deficit         Stock
                                              ----------------------------------------

Balance, December 31, 2001                    $ 2,084,057   $(7,569,033)   $   (12,039)

Common stock issued for cash                          999          --             --

Restructure and Settlement Agreement
    datedNovember 5, 2001 (settled
    on May 8, 2002) (Note 3)                    4,254,161          --             --

Common stock issued for consulting services
    rendered                                       45,954          --             --
Capital restructuring (Note 3)                  2,247,282          --             --

Fractional shares adjustment                            3          --             --
Net loss                                             --      (1,052,056)          --
                                              ----------------------------------------

Balance, December 31, 2002
                                                     --             823     (8,621,089)

Common stock issued for license (Note 3)           96,221          --             --

Gain on sale of assets between entities
     under common control                         303,708          --             --

Net loss                                             --        (427,980)          --
                                              ----------------------------------------

Balance, December 31, 2003                    $ 9,032,385   $(9,049,069)   $   (12,039)
                                              ========================================

</TABLE>




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

                                      F-5
<PAGE>
<TABLE>
<CAPTION>

                    MB SOFTWARE CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                     YEARS ENDED DECEMBER 31, 2003 AND 2002

                                                                                   2003           2002
                                                                               --------------------------
<S>                                                                            <C>            <C>
Cash flows from operating activities
Loss from continuing operations                                                $  (427,980)   $(1,178,555)
Adjustments to reconcile loss from continuing operations to net cash used in
      operating activities
   Gain on sale of assets between entities under common control                    303,708           --
   Accretion of debt                                                                  --           68,747
   Depreciation and amortization                                                    20,000         83,147
   Stock issued for consulting services                                               --           46,000
   Net assets written off - Portalook                                                 --          292,347
   Disposal of fixed assets                                                           --            5,038
   Write off of receivables - related party                                           --          397,359
   Forgiveness of debt - unrelated party                                              --         (195,986)
   Other noncash items                                                                --          (12,944)
Changes in assets and liabilities:
   (Increase) decrease in prepaid expenses and other                                  --          (12,919)
    Increase (decrease) in accounts payable and accrued liabilities                 89,848         59,135
                                                                               --------------------------
Net cash used in continuing operations                                             (14,424)      (448,631)
Net cash provided by discontinued operations                                          --         (138,176)
                                                                               --------------------------
Net cash used in operating activities                                              (14,424)      (586,807)

Cash flows from investing activities
   Acquisition of license                                                             --         (100,000)
                                                                               --------------------------
Net cash flows provided by investing activities                                       --         (100,000)

Cash flows from financing activities
   Cash contributions                                                                 --           75,000
   Advances from related parties                                                  (442,860)       (24,900)
   Cash overdraft                                                                     --          (23,652)
   Common stock issued for cash                                                       --            1,000
   Principal payments on borrowings                                                   --          (68,226)
   Proceeds from loans and warrants                                                457,500        727,754
                                                                               --------------------------
Net cash provided by financing activities                                           14,640        686,976
                                                                               --------------------------

Increase in cash                                                                       216            169

Cash and cash equivalents, beginning of year                                           169           --
                                                                               --------------------------

Cash and cash equivalents, end of year                                         $       385    $       169
                                                                               ==========================

Cash paid during the year for:
   Interest                                                                    $      --      $    66,911
                                                                               ==========================

   Income taxes                                                                $      --      $      --
                                                                               ==========================
</TABLE>


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

                                      F-6
<PAGE>
<TABLE>
<CAPTION>

                    MB SOFTWARE CORPORATION AND SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                     YEARS ENDED DECEMBER 31, 2003 AND 2002

                                                                                 2003         2002
                                                                              -----------------------
<S>                                                                           <C>          <C>
Supplemental noncash investing and financing activities:

   Exchange of assets between entities under common control                   $  101,221
                                                                              ==========

   Fair value of assets exchanged in connection with the Restructure and
    Settlement Agreeement dated November 5, 2001                                           $3,943,928
                                                                                           ==========

   Liabilities disposed of in connection with capital restructuring                        $2,247,282
                                                                                           ==========

   Forgiveness of debt - unrelated party notes payable and accrued interest                $  195,986
                                                                                           ==========

   Notes receivable, impaired                                                              $  397,359
                                                                                           ==========
</TABLE>

































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

                                      F-7
<PAGE>

                    MB SOFTWARE CORPORATION AND SUBSIDIARIES
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2003

NOTE 1 - ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
---------------------------------------------------------

Organization and Nature of Operations

MB Software  Corporation (the "Company") was originally formed on July 14, 1983,
in the State of Utah and after several name changes and a change of domicile, is
now known as MB Software  Corporation,  a Texas Corporation,  with an authorized
capital of  20,000,000  shares of $0.001 par value  common  stock and  5,000,000
shares of $10 par value preferred stock.

Effective  June 13,  2002,  the  Company  reincorporated  in the  State of Texas
through a merger of the Company with a newly formed wholly-owned subsidiary.  At
the effective date of the merger, each share of the Company's outstanding common
stock was converted into one share of the reincorporated  company's common stock
and all options to purchase shares of the Company's  common stock were converted
into options to purchase shares of the reincorporated  company's common stock at
the time of the merger.  All of the  Company's  officers  and  directors  became
officers  and  directors of the  reincorporated  company  after the merger.  The
reincorporation  was approved at the Company's  Annual  Meeting of  Shareholders
held on February 11, 2002.

Effective  June 24, 2002,  the Company  effected a one-for-one  hundred  reverse
stock split and amended the Company's  Articles of  Incorporation  to reduce the
number  of  authorized  shares  of  common  stock  from  150,000,000  shares  to
20,000,000  shares,  and increased the number of authorized  shares of preferred
stock from 1,000,000 shares to 5,000,000 shares (the  "Amendment").  The reverse
stock  split and  Amendment  were  approved by the Board of  Directors  and by a
majority of the Company's shareholders on June 21, 2002.

The Company has  acquired  the license to  proprietary  software  that  provides
real-time  prescription   monitoring  by  electronically   capturing  electronic
prescriptions for scheduled drugs from physicians'  offices,  transmitting those
prescriptions  to  participating   pharmacies   electronically,   and  providing
associated information on those prescriptions to State Regulators.

Significant Accounting Policies

Principles  of  consolidation  and  presentation  - The  consolidated  financial
statements include the accounts of the Company and its wholly-owned subsidiaries
and its  majority-owned  (99%)  subsidiary.  The minority interest (1%) is owned
0.5% by the Company's president and majority  stockholder and 0.5% by a director
of the Company. The Company fully consolidates the assets, liabilities, revenues
and expenses of its  majority-owned  subsidiary  because it has control over the
operating and financing decisions of this subsidiary,  and the operating results
or financial  position would not differ from those that would have been obtained
if the entity was wholly-owned.  All intercompany transactions and balances have
been eliminated upon consolidation.

The Company's financial  statements include the combined statements of financial
position,  results of  operations  and cash flows for the  entities  merged as a
result of certain  merger  agreements  completed  during  2003.  (See Note 3 for
details) The Company  remains as the reporting  entity and its balance sheet and
other financial  information have been updated as of the beginning of the period
as  though  the  assets  and  liabilities  had been  transferred  at that  date.
Financial statements and financial information presented for the prior year have
been  restated  to  furnish  comparative  information.  All  restated  financial
statements  reflect the  combined  results of  operations  and cash flows of the
previously separate entities.


                                      F-8

<PAGE>

Business  combinations  - Transfers  and exchanges of assets  between  companies
under common control are accounted for at historical cost in a manner similar to
that in a pooling of interests  accounting.  The excess of the cost of the asset
acquired over the net assets sold at their book values are charged to additional
paid-in capital.

Accounting  basis - The Company's  financial  statements  are prepared using the
accrual basis of accounting.


Use of estimates - The  preparation of financial  statements in conformity  with
generally  accepted  accounting  principles  in the  United  States  of  America
requires  management to make estimates and assumptions  that affect the reported
amounts  of assets and  liabilities  and  disclosure  of  contingent  assets and
liabilities at the date of the financial  statements and the reported amounts of
revenues and expenses  during the reporting  period.  Management  makes its best
estimate of the ultimate outcome for these items based on historical  trends and
other information available when the financial statements are prepared.  Changes
in estimates  are  recognized in accordance  with the  accounting  rules for the
estimate,  which  is  typically  in the  period  when  new  information  becomes
available to management. Actual results could differ from those estimates.

Business and credit risk concentrations - The Company maintains its cash in bank
deposit accounts at high quality financial institutions.  The balances at times,
may exceed Federally insured limits.

Cash and cash equivalents - The Company considers all cash on hand and in banks,
demand and time deposits, and all other highly liquid investments purchased with
original maturities of three months or less to be cash equivalents.

Property and equipment - Property and equipment are stated at cost. Depreciation
for financial  statement  purposes is computed  principally on the straight-line
method over the estimated  useful lives of the related  assets ranging from five
to seven years.  Maintenance and repairs are expensed as incurred.  Replacements
and betterments are capitalized.  Depreciation expense amounted to $nil for 2003
(2002: $10,016).

Revenue  recognition - Revenue from licenses is recognized when the license term
begins and the licensed  technology  is  physically  delivered to the  customer.
Revenues from discontinued  operations consist of sales of the Company's medical
clinic fees, which are recognized at the time the medical services are rendered.
(See Note 11 for discontinued operations)

Software  development - The Company capitalizes software development costs after
technological  feasibility has been  established 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." Software costs are
amortized  over the greater of the ratio that current gross revenues bear to the
current and future gross  revenues or amortized  using the  straight-line  basis
over the estimated  economic life of the  software.  Net software  license costs
purchased  from  Portalook of $307,316  were  written off during 2002.  Software
development  costs incurred by the Company for 2002 were $70,000.  There were no
software development costs for 2003.

Long-lived assets - Long-lived assets and certain identifiable intangibles to be
held and used by the Company are  reviewed  for  impairment  whenever  events or
changes in  circumstances  indicate that the carrying amount of an asset may not
be recoverable.  The Company  continuously  evaluates the  recoverability of its
long-lived  assets  based on  estimated  future  cash  flows  and the  estimated
liquidation value of such long-lived assets, and provides for impairment if such
undiscounted  cash flows are  insufficient to recover the carrying amount of the
long-lived  assets.  If  impairment  exists,  an adjustment is made to write the
asset down to its fair value,  and a loss is recorded as the difference  between
the carrying value and fair value.  Fair values are  determined  based on quoted
market values,  discounted  cash flows or internal and external  appraisals,  as
applicable.  Assets to be disposed of are carried at the lower of carrying value
or estimated net realizable value.


                                      F-9
<PAGE>

Intangible  assets  -  Intangible  assets  represent  a  license  that is  being
amortized  over a period  of sixty  months.  Amortization  for 2003 was  $20,000
(2002:   $11,667).  The  gross  carrying  amount  is  $100,000  and  accumulated
amortization is $31,667.  The aggregate  amortization for each of the succeeding
years is as follows:  2004:  $20,000;  2005: $20,000;  2006: $20,000;  and 2007:
$8,333.

Income taxes - The Company  accounts for income  taxes under the  provisions  of
SFAS No. 109, "Accounting for Income Taxes." Under SFAS No. 109, deferred income
tax assets and liabilities  are computed for  differences  between the financial
statements and tax bases of assets and  liabilities  that will result in taxable
or  deductible  amounts  in the  future,  based on  enacted  tax laws and  rates
applicable  to the  periods  in which the  differences  are  expected  to affect
taxable income.  Valuation allowances are established when necessary,  to reduce
deferred  income tax assets to the amount  expected to be  realized.  Income tax
expense is the tax payable or refundable for the period plus or minus the change
during the period in deferred tax assets and liabilities.

Stock-based  compensation - The Company  accounts for  stock-based  compensation
using the  intrinsic  value method  prescribed in  Accounting  Principles  Board
("APB") Opinion No. 25, "Accounting for Stock Issued to Employees." Compensation
cost for stock  options,  if any, is measured as the excess of the quoted market
price of the  Company's  stock at the date of grant over the amount an  employee
must  pay to  acquire  the  stock.  SFAS  No.123,  "Accounting  for  Stock-Based
Compensation,"  established  accounting  and  disclosure  requirements  using  a
fair-value-based  method of accounting  for  stock-based  employee  compensation
plans.  The Company has elected to remain on its current method of accounting as
described above, and has adopted the pro forma disclosure  requirements  only of
SFAS No. 123. In December  2002, the FASB issued SFAS No. 148,  "Accounting  for
Stock-Based  Compensation - Transition and  Disclosure",  amending FASB No. 123,
and "Accounting for Stock-Based  Compensation".  This statement amends Statement
No.  123 to  provide  alternative  methods  of  transition  for an  entity  that
voluntarily changes to the fair value based method of accounting for stock-based
employee compensation. SFAS No. 148 amends APB Opinion No. 28 "Interim Financial
Reporting"  to require  disclosure  about  those  effects  in interim  financial
information.  The Company adopted the disclosure provisions and amendment to APB
No. 28, effective for interim periods beginning after December 15, 2002.

Earnings  per share - Basic  earnings or loss per share is based on the weighted
average number of common shares outstanding.  Diluted earnings or loss per share
is based on the  weighted  average  number  of  common  shares  outstanding  and
dilutive common stock equivalents.  Basic earnings/loss per share is computed by
dividing net  income/loss  (numerator) by the weighted  average number of common
shares outstanding  (denominator) for the period. All earnings or loss per share
amounts in the financial  statements  are basic  earnings or loss per share,  as
defined by SFAS No.  128,  "Earnings  Per Share."  Diluted  earnings or loss per
share does not differ  materially  from basic earnings or loss per share for all
periods  presented.  Convertible  securities that could potentially dilute basic
earnings or loss per share in the future, such as options and warrants,  are not
included in the computation of diluted  earnings or loss per share because to do
so would be antidilutive.  All per share and per share  information are adjusted
retroactively to reflect stock splits and changes in par value.

Related party  transactions  - A related  party is generally  defined as (i) any
person that holds 10% or more of the Company's  securities  and their  immediate
families,  (ii)  the  Company's  management,  (iii)  someone  that  directly  or
indirectly  controls,  is  controlled  by or is under  common  control  with the
Company,  or (iv)  anyone who can  significantly  influence  the  financial  and
operating  decisions of the Company. A transaction is considered to be a related
party  transaction when there is a transfer of resources or obligations  between
related parties. (See Note 4)

Recent  accounting  pronouncements  - The Financial  Accounting  Standards Board
("FASB")  has  issued  the  following  pronouncements,  none  of  which  have  a
significant affect on the financial statements:


                                      F-10

<PAGE>

January 2003 - FASB issued FASB Interpretation No. 46 ("FIN 46"), "Consolidation
of Variable Interest Entities, an Interpretation of ARB No. 51." FIN 46 requires
certain variable interest entities to be consolidated by the primary beneficiary
of  the  entity  if  the  equity  investors  in  the  entity  do  not  have  the
characteristics  of a controlling  financial  interest or do not have sufficient
equity at risk for the  entity to  finance  its  activities  without  additional
subordinated  financial support from other parties.  FIN 46 is effective for all
new variable  interest  entities created or acquired after January 31, 2003. For
variable  interest  entities  created or acquired prior to February 1, 2003, the
provisions  of FIN 46 must be applied  for the first  interim  or annual  period
beginning after June 15, 2003.

April  2003 - SFAS No.  149,  "Accounting  for  Amendment  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 FASB Statement No. 133, Accounting for Derivative  Instruments and Hedging
Activities.  This Statement is generally effective for contracts entered into or
modified   after  June  30,  2003,   and  all   provisions   should  be  applied
prospectively.

May 2003 - SFAS No. 150,  "Accounting  for Certain  Financial  Instruments  with
Characteristics of both Liabilities and Equity," which establishes standards for
how an  issuer  classifies  and  measures  certain  financial  instruments  with
characteristics  of both  liabilities  and equity.  It  requires  that an issuer
classify a financial  instrument  that is within its scope as a liability (or an
asset  in  some  circumstances).  This  Statement  is  effective  for  financial
instruments  entered  into or modified  after May 31,  2003,  and  otherwise  is
effective at the beginning of the first interim period  beginning after June 15,
2003. It is to be implemented by reporting the cumulative  effect of a change in
an accounting  principle for financial  instruments  created before the issuance
date of the Statement and still  existing at the beginning of the interim period
of adoption. Restatement is not permitted.


NOTE 2 - GOING CONCERN
----------------------

The financial  statements  have been prepared on a going  concern  basis,  which
contemplates  realization  of  assets  and  liquidation  of  liabilities  in the
ordinary course of business.  The Company has continuously  incurred losses from
operations and has a significant  accumulated  deficit.  The  appropriateness of
using the going concern basis is dependent upon the Company's  ability to obtain
additional  financing or equity capital and,  ultimately,  to achieve profitable
operations.  These  conditions  raise  substantial  doubt  about its  ability to
continue as a going concern.

It is the  Company's  belief that it will  continue to incur losses for at least
the next twelve months,  and as a result will require additional funds from debt
or equity investments to meet such needs. To meet these objectives, management's
plans are to (i) raise capital by obtaining  financing from debt financing and /
or equity financing through private placement  efforts,  (ii) issue common stock
for  services  rendered in lieu of cash  payments  and (iii)  obtain  loans from
shareholders as necessary.  Without  realization of additional capital, it would
be  unlikely  for the  Company  to  continue  as a going  concern.  The  Company
anticipates  that its shareholders  will contribute  sufficient funds to satisfy
the cash needs of the Company for the next twelve months.  However, there can be
no assurances  to that effect,  as the Company has no revenues and the Company's
need for capital may change  dramatically  if it is  successful in expanding its
current  business or  acquiring a new  business.  If the Company  cannot  obtain
needed funds, it may be forced to curtail or cease its activities.

Management  believes  that  actions  presently  taken to  revise  the  Company's
operating and financial  requirements provide the opportunity for the Company to
continue as a going  concern.  The  Company's  future  ability to achieve  these
objectives  cannot  be  determined  at this  time.  The  accompanying  financial
statements do not include any adjustments  that might result from the outcome of
this uncertainty.


                                      F-11

<PAGE>

NOTE 3 - ACQUISITIONS AND DISPOSITIONS
--------------------------------------

Portalook, Inc. ("Portalook")

In July of 2001,  the  Company  acquired  certain  assets  and  assumed  certain
liabilities  of  Portalook,   a  California   based  company,   which  developed
proprietary   technology  for  use  in  enabling  Internet  Transaction  Devices
("ITD's") to be used as transaction processing devices in the field.

North Florida Physical Medicine, LLC ("NFPM")

On July 31, 2001 the  Company  purchased  certain  assets  including:  inventory
valued at $140,000,  property and  equipment  valued at $84,000,  and a software
license valued at $420,000 from  Portalook.  The purchase price was allocated to
the assets  acquired  based on their  relative fair values on the purchase date.
The  purchase  price for the assets was cash of $40,000,  a payable of $184,000,
assumed  liability  of $30,000 and  3,000,000  shares of common  stock valued at
$390,000,  based on the fair value of the common stock on the purchase date. The
purchase  of  the  Portalook   assets  allowed  the  Company  to  sell  internet
transaction devices and to develop supporting services.

During the second quarter of 2002, the Company wrote off the net assets acquired
in the transaction and it no longer sells internet  transaction devices. The net
assets of $292,257 included accounts receivable of $7,250, software license (net
of   amortization)   of  $307,316,   inventory  of  $131,740,   server  (net  of
depreciation) of $68,600, deferred revenues of $16,149, payable of $184,000, and
the  remaining  assumed  liability of $22,500.  The Company does not believe any
further  recourse  will  arise as a result of its  actions,  however  there is a
remote possibility it could be contingently  liable for these  liabilities.  The
financial statements do not include any reserves for future claims. (See Note 8)

On November 5, 2001,  the Company  entered  into a  Restructure  and  Settlement
Agreement with Imagine Investments, Inc. ("Imagine"),  which was approved by the
shareholders  on  February  11,  2002.  Pursuant to the  agreement,  the Company
transferred  its  interest  in NFPM and  issued  common  stock in  exchange  for
settlement of debt and preferred  stock. As a result of this agreement,  certain
assets,  liabilities and operations of NFPM are presented as discontinued.  (See
Note 11)

On May 8, 2002, the Company  completed the Restructure and Settlement  Agreement
with Imagine for the sale of the Company's  medical clinics business (NFPM).  In
accordance with the agreement,  proceeds ($4,634,203) represented the conversion
of  340,000  shares  of  Series  A  Convertible  Preferred  Stock  ($3,400,000),
dividends in arrears ($45,644), convertible debt ($800,000) and accrued interest
on the debt  ($388,559),  all held by Imagine,  into 4,500,000  shares of common
stock and the Company conveyed to Imagine its ownership in NFPM. The fair market
value of the  consideration  given was $690,275  representing  the net assets in
NFPM  ($629,999)  and the fair market  value of the  4,500,000  shares of common
stock  ($60,276).  No  gain  or  loss  on the  transaction  with  the  preferred
stockholder  was  recognized.  The  transaction  resulted  in a net  increase in
stockholders' equity of approximately  $850,000.  The calculation of the gain or
loss did not include $1,178,977 of cumulative  preferred stock dividends,  which
were  not  required  to be paid to  Imagine  as part of the sale  because  these
dividends were cumulative,  but have never been declared as a result of past net
losses.  The  exclusion of the  dividends in the  calculation  does not have any
effect on total stockholders' equity. (See Note 11)

eAppliance Innovations, LLC

Effective  August 1, 2002, the Company sold its ninety-nine  percent interest in
e-Appliance Innovations, LLC, a Nevada limited liability company, to e-Appliance
Payment   Solutions,   LLC,  a  Nevada  limited   liability   company  ("Payment
Solutions"),   in  exchange  for  the   assumption   by  Payment   Solutions  of
substantially all the Company's liabilities. E-Appliance Innovations constituted


                                      F-12

<PAGE>

substantially  all of the assets of the Company,  and held all of the  Company's
rights to the  Company's  proprietary  technology  designed  to enable  Internet
transaction  devices (ITDs) to be used as transaction  processing devices in the
field and the software programs implementing this technology that were developed
or acquired by the Company (the  "Technology").  In  connection  with this sale,
Payment  Solutions  granted the Company a  worldwide,  royalty-free,  perpetual,
non-exclusive license to use the Technology to develop, market, sell and operate
electronic client services to be made available to clients through the Company's
computer network.  The transaction  resulted in a decrease in liabilities and an
increase  in  total  stockholders'  equity  of  approximately  $2,247,000.   The
transaction occurred between entities under common control.

MB Holding Corporation ("MBH")

On  November  10,  2003,  the  Company  completed  a merger  agreement  with MBH
Acquisition, Inc. ("MBHAI"), a Nevada Corporation and wholly-owned subsidiary of
the Company,  and MB Holding Corporation  ("MBH"), a Nevada  Corporation,  under
reorganization within the meaning of Internal Revenue Code Section 368(a). MBHAI
was a newly formed entity for the purpose of the merger, and it had no assets or
liabilities of any kind whatsoever.  Subsequent to the merger, MBHAI's existence
ceased and MBH continued as the surviving entity.  MBH, through its wholly-owned
subsidiary  Envoii  Healthcare  L.L.C.  ("Envoii"),  a Nevada limited  liability
company,  has  developed a system for  transmitting  electronic  documents  in a
secure environment.  This system is targeted toward meeting the privacy and data
security requirements of the healthcare industry imposed by the Health Insurance
Portability and Accountability Act of 1996.

The  consideration  paid by the Company for MBH  consisted  of an  aggregate  of
5,000,000  restricted  shares of the  Company's  common  stock.  The shares were
issued to Scott  Haire  ("Haire")  and Araldo  Cossutta  ("Cossutta"),  the sole
stockholders of MBH, in proportionate share to their respective holdings in MBH.
Both Haire and  Cossutta are  directors  of the  Company,  and Haire is also the
Company's  Chairman of the Board,  Chief  Executive  Officer and President.  The
shares were issued by the Company  pursuant to an exemption  (Section 4(2)) from
the registration requirements of the Securities Act of 1933, as amended.

The shares were valued at the historical  cost basis of the  transferred  entity
because the assets were transferred  between entities under common control. As a
result of the net assets  transferred,  the  Company  remains  as the  reporting
entity and its balance sheet and other financial  information  have been updated
as of the beginning of the period as though the assets and  liabilities had been
transferred  at  that  date.  Financial  statements  and  financial  information
presented  for  the  prior  year  have  been  restated  to  furnish  comparative
information.  All restated financial  statements reflect the combined results of
operations and cash flows of the previously separate entities.

Prior to and  contingent  upon the  merger  agreement  discussed  above,  Envoii
completed a merger with Envoii Acquisition LLC ("EAI", newly formed for purposes
of the merger only) and MBH, under reorganization within the meaning of Internal
Revenue Code Section 368(a).  Subsequent to the merger,  EAI's existence  ceased
and Envoii was the surviving  company and now a wholly-owned  subsidiary of MBH.
The membership interests in Envoii were owned 67% Haire (majority shareholder of
MB Software  Corporation  and its  Chairman/CEO/President)  and 33%  Cossutta (a
director of MB Software Corporation). MBH's outstanding shares were 1,000, which
were held by the sole  shareholders  of Haire (669  shares)  and  Cossutta  (331
shares).

Envoii Deployment License Agreement

On June 14, 2002, Envoii Healthcare, L.L.C. purchased a license from Envoii Inc.
(unrelated  party) for  $100,000.  The license  granted  Envoii  Healthcare  the
exclusive right to Envoii Inc.'s proprietary  software and Helathcare  Exclusive
domain for its own business.  The term of the  agreement  was for 24 months.  On
July 24,  2002,  Envoii  Healthcare,  L.L.C.  transferred  the license to Envoii
Technologies,  Inc. Both  entities to the  transaction  are  controlled by Scott
Haire, the Company's President, Chairman, and CEO.



                                  F-13

<PAGE>

During 2003,  Envoii Inc.  declared  bankruptcy  and Envoii  Healthcare,  L.L.C.
bought certain assets pursuant to an Asset Purchase  Agreement dated May 6, 2003
for $75,000.  Envoii  Healthcare  also paid  approximately  $40,000 for expenses
incurred in connection with the Envoii Inc. bankruptcy. On July 24, 2003, Envoii
Healthcare,  L.L.C. and Envoii  Technologies,  Inc.  (identical  parties in each
entity) completed an Asset Purchase Agreement for the purchase of certain assets
for consideration of $375,000 with a cost basis of $71,292 for a net gain on the
transaction  of  $303,708.   Envoii  Healthcare  and  Envoii   Technolgoies  are
controlled by the same person, Haire, which is the Company's President, Chairman
and CEO, and Cossutta,  one of the Company's directors.  Both Haire and Cossutta
converted  notes  payable  totaling  $240,800  to capital  and then  applied the
capital to the purchase  price of the  transaction  leaving a net balance due of
$134,200 at December 31, 2003.  Since the transaction  occurred between entities
under common control, no gain on the transaction was recognized, but credited to
additional paid-in capital. (See Note 4)


NOTE 4 - RELATED PARTY TRANSACTIONS
-----------------------------------

Amounts due from related parties

Amounts  due from  related  parties  at  December  31,  2003  totaling  $467,760
represent (1) $333,560 of funds advanced,  as necessary,  from various  entities
controlled  by the president of this Company and (2) $134,200  representing  the
balance  due  from an  entity  controlled  by the  Company's  President  for the
purchase of certain assets  pursuant to an Asset Purchase  Agreement  dated July
24, 2003 between Envoii Healthcare, L.L.C. and Envoii Technologies,  L.L.C. (See
Note 3), both related parties.

The amounts due are interest-free, unsecured and repayable on demand.

Note receivable

Notes  receivable due from Scott A. Haire,  a related  party,  dated November 1,
1999,  bearing  interest  at 8% per annum,  for the  original  principal  sum of
$350,000 and accrued  interest through June 30, 2002 of $47,359 were written off
during 2002 as management deemed it impaired.

Notes payable

The Company  converted  various notes payable to shareholders  and other related
parties  during 2003 and 2002.  Interest  expense  incurred  under related party
notes payable for the year ended December 31, 2002 was approximately $126,000.

Administrative services

The  Company  provides  limited  administrative   services  to  other  companies
affiliated through common ownership of Company shareholders.

Merger acquisition

On November 10, 2003, the Company  completed a merger  agreement with MBH, whose
directors  and officers are the same as the  Company's  directors  and officers.
(See Note 3 for details)

Divestiture of Assets

Effective  August 1, 2002, the Company sold  substantially  all of its assets to
Payment  Solutions,  in exchange  for the  assumption  by Payment  Solutions  of
substantially  all of  the  Company's  liabilities.  Mr.  Scott  A.  Haire,  the
Company's  President  and Chief  Executive  Officer  directly  owns 0.5%, of the
membership interests in Payment Solutions, and beneficially may be deemed to own
an additional  57.8% through HEB LLC and SAH, LLC. Mr. Haire is also the Manager
of Payment Solutions. (See Note 3 for details)


                                      F-14

<PAGE>

Mr. Gilbert  Valdez,  and Mr. Araldo  Cossutta,  each a director of the Company,
directly  own 0.5%,  and 16.44%,  respectively,  of the  membership  interest in
Payment Solutions.  Mr. Cossutta may be deemed to beneficially own an additional
8.38%  of the  membership  interests  of  Payment  Solutions  thorough  Patricia
Cossutta, his wife.

Mr.  Richard F. Dahlson,  a partner with the law firm of Jackson  Walker L.L.P.,
the Company's  chief legal  counsel,  owns 7.51% of the  membership  interest in
Payment Solutions.

Properties

The Company's  headquarters  are located at 2255 E. Randol Mill Road, Suite 305,
Arlington,  Texas,  76011.  The Company was  obligated  for rent expense under a
noncancelable  lease at the rate of $2,720 per month until the Company  divested
its assets.  (See Note 3) Subsequent to that date,  the Company has not paid any
rent  expense.  The fair market  value of the rent has not been  included in the
financial statements because the amount is immaterial.


NOTE 5 - NOTES PAYABLE
----------------------

Notes payable at December 31 consists of the following:

Convertible promissory note payable              [1]    $   200,000
Convertible promissory note payable              [2]        100,000
Promissory notes payable                         [3]        157,500
                                                        ------------
                                                        $   457,500
                                                        ============





[1]  Convertible  promissory note payable  represents one note with  outstanding
principal  convertible  (in  denominations  of  $10,000  or  integral  multiples
thereof) into shares of the Company's  common stock at the  conversion  price of
$1.00 per share;  maturity  date is December 26, 2003;  interest rate is 10% per
annum or in the event of default  15% per annum;  personally  guaranteed  by the
Company's president. The note is currently in default.

[2]  Convertible  promissory note payable  represents one note with  outstanding
principal  convertible  into  shares  of  the  Company's  common  stock  at  the
conversion  price of $0.50 per share  equal to the total value of the note after
the  first  quarterly  interest  payment,  which is due on  February  28,  2004;
maturity date is also February 28, 2004; interest rate is 10% per annum.

[3] Promissory notes payable represents five different notes bearing interest at
10% per annum and  originally  convertible  into shares of the Company's  common
stock at the conversion  price of $0.50 to $1.00 per share;  the notes mature at
various dates through August 28, 2003, and which are currently in default.

Accrued interest on the above notes at December 31, 2003 was $45,154.  Aggregate
principal maturities on debt are as follows: 2003: $357,500 and 2004: $100,000.


NOTE 6 - PREFERRED STOCK
------------------------

The  Series  A  Senior  Cumulative  Convertible  Participating  Preferred  Stock
("Series A Stock") is entitled  to receive  cash  dividends  of $1 per share per
annum accruing from the date of issuance. Such dividends are cumulative and must
be paid before any dividends can be paid on the common stock. The Series A Stock
is convertible  into common stock, at the option of the holders,  into a maximum


                                      F-15

<PAGE>

of 29,267,324  shares of common stock upon: (a) the sale of substantially all of
the  assets of the  Company;  (b) a change in control  of the  Company;  (c) the
dissolution of the Company; or (d) October 1, 2000. If the Series A Stock is not
converted into common stock,  it becomes  redeemable at the option of the holder
any time after  October 1, 2000 at a redemption  price of $10 per share.  Should
the Company  fail to redeem any share of the Series A Stock  after a  redemption
request,  the Series A stockholders  shall have the right to elect a majority of
the  Company's  board of  directors  and the Company  shall pay  interest on the
redemption  price at the rate of prime plus 5% until actually  redeemed.  During
2002,  dividends in arrears on preferred  stock of  $1,178,977  were canceled in
connection with the sale of the Company's medical clinics business (NFPM).  (See
Note 3)


NOTE 7 - INCOME TAXES
---------------------

The deferred tax  consequences  of temporary  differences in reporting items for
financial  statement  and income tax purposes are  recognized,  as  appropriate.
Realization  of the future tax  benefits  related to the  deferred tax assets is
dependent on many factors,  including the Company's  ability to generate taxable
income  within  the net  operating  loss  carryforward  period.  Management  has
considered  these  factors  in  reaching  its  conclusion  as to  the  valuation
allowance for financial reporting purposes.

At December 31, 2003 deferred tax asset results from the deferred tax benefit of
net  operating  losses for the  parent  company's  operations  only as the other
entities  combined  file separate tax returns.  The net current and  non-current
deferred  tax assets  have a 100%  valuation  allowance,  as the  ability of the
Company to generate  sufficient  taxable income in the future is uncertain.  The
net change in the valuation allowance for 2003 was approximately  $15,000 (2002:
$1,028,000).

The Company  generated net operating losses for financial  reporting and Federal
income tax  reporting  prior to its  reorganization  in 1993. As of December 31,
2003,   subject  to  limitations   under  Internal  Revenue  Code  Section  382,
approximately  $469,000  of  these  losses  are  available  for  use  after  the
reorganization,  which  expire  in  2008  if not  previously  utilized.  The net
operating loss  carryforward at December 31, 2003 is  approximately  $10,500,000
and will begin to expire in 2008, if not previously utilized.

The components of tax expense (benefit) are as follows:

                                                          2003          2002
                                                       ----------    ----------
Current                                                $     --      $  (78,676)
Deferred                                                     --            --
                                                       ----------    ----------
Income tax expense (benefit)                           $     --      $  (78,676)
                                                       ==========    ==========






A reconciliation  of expected federal income tax expense  (benefit) based on the
U.S.  Corporate income tax rate of 34% to actual expense  (benefit) for 2003 and
2002 is as follows:

                                                          2003          2002
                                                       ----------    ----------
Expected federal income tax benefit                    $  (15,270)   $ (357,699)
Valuation allowance and other                              15,270       279,023
                                                       ----------    ----------
Income tax  expense (benefit)                          $     --      $  (78,676)
                                                       ==========    ==========






                                      F-16

<PAGE>
<TABLE>
<CAPTION>

Deferred tax asset at December 31, 2003 is as follows:

Current deferred tax asset                                          $      --
Valuation allowance                                                        --
                                                                    -----------
Net current deferred tax asset                                             --

Non-current deferred tax asset                                      $ 3,585,000
Valuation allowance                                                  (3,585,000)
                                                                    -----------
Net non-current deferred tax asset                                  $      --
                                                                    ===========



NOTE 8 - COMMITMENTS AND CONTINGENCIES
--------------------------------------

Commitments

During 2002, the Company was committed  under  non-cancelable  leases for office
space and equipment. Lease and rental expense for 2002 was $16,320. (See Note 4)

Contingencies

From time to time,  the  Company  is  involved  in various  lawsuits  and claims
arising in the  normal  course of  business.  Management  believes  it has valid
defenses  in these  cases and  defends  them  vigorously.  While the  results of
litigation  cannot be predicted with  certainty,  management  believes  adequate
reserves  have  been  provided  for  claims  that  have at  least  a  reasonable
possibility  for loss and has not  provided  a  reserve  on those  for  which an
adverse outcome is remote. (See Note 3)


NOTE 9 - STOCK OPTIONS
----------------------

Effective May 5, 1994, the Board of Directors approved an Incentive Stock Option
Plan  (the  "Plan")  for  key  executives  and  employees.  All  of  the  52,000
outstanding stock options are fully vested at December 31, 2003.

A summary of changes in the Company's  incentive  stock options issued under the
Plan and other compensatory options follows:

                                                                                                Combined
                                    Plan          Options      Compensatory      Options         Total
                                ----------------------------   ------------------------------------------
                                                  Weighted                      Weighted
                                                   Average                       Average
                                                  Exercise                      Exercise
                                   Options          Price         Options         Price         Options
                                ----------------------------   ------------------------------------------
<S>                             <C>             <C>            <C>            <C>            <C>
Outstanding at 12/31/01                1,500           15.00         52,000           5.00         53,500
Granted, Exercised                      --              --             --             --             --
Forfeited                             (1,500)          15.00           --             --           (1,500)
                                ----------------------------   ------------------------------------------
Outstanding at 12/31/02                 --              --           52,000   $       5.00         52,000
Granted, Exercised, Forfeited           --              --             --             --             --
                                ----------------------------   ------------------------------------------
Outstanding at 12/31/03                 --              --           52,000   $       5.00         52,000
                                ============================   ==========================================
</TABLE>



                                      F-17

<PAGE>
<TABLE>
<CAPTION>

Had compensation  been determined based on the fair value at the grant date, the
Company's net loss would have been reduced as follows:

Net loss                                     2003              2002
                                         ------------      ------------
     As reported                         $    427,980      $ 1,025,835
     Pro forma                           $    665,912      $ 1,263,767
Basic and diluted loss per share
     As reported                         $       0.28      $      1.31
     Pro forma                           $       0.44      $      1.61







The weighted  average  contractual  life is .9 years.  The fair value of options
granted  during 2001 was  estimated  on the date of grant  using a  Black-Sholes
option pricing model and the following  assumptions:  a risk-free rate of return
of 2.76%; a weighted average expected life of 2.25 years; expected volatility of
228%;  and no  dividends.  The  weighted-average  fair value of options  granted
during 2001 was  $237,932.  Options  granted  during 2001 were to employees  and
directors and, as a result, no compensation cost was recognized.


NOTE 10 - STOCK WARRANTS

During 2001, the Company issued warrants to several stockholders of the Company.
Of the total warrants issued, warrants to purchase 25,000 shares of common stock
were attached to debt, while the other 4,000 were compensatory.

A summary  of the  Company's  warrants  issued and other  compensatory  warrants
follows:

                                      Warrants Attached                  Other                 Combined
                                           To Debt              Compensatory Warrants            Total
                                ----------------------------   ------------------------------------------
                                                  Weighted                      Weighted
                                                   Average                       Average
                                                  Exercise                      Exercise
                                   Warrants         Price         Warrants        Price         Warrants
                                ----------------------------   ------------------------------------------
<S>                             <C>             <C>            <C>            <C>            <C>
Outstanding at 12/31/01               25,000            1.00          4,000           1.00         29,000
Granted                                7,000            1.00           --             --            7,000
Exercised                               --              --             --             --             --
Forfeited                               --              --             --             --             --
Canceled                             (32,000)                        (4,000)                      (36,000)
                                ----------------------------   ------------------------------------------
Outstanding at 12/31/02                 --              --             --             --             --
                                ============================   ==========================================
</TABLE>

All of the 29,000  outstanding  stock warrants were fully vested at December 31,
2001.  During 2002, the Company granted  additional  warrants in connection with
loans made to the Company and then canceled all of the  outstanding  warrants in
connection with its divestiture of assets.  (See Note 3) Warrants granted during
2002 were to employees and  directors.  No  compensation  was recognized for the
warrants  attached to debt. Had  compensation  been determined based on the fair
value at the grant date,  there would be no material  impact on net loss or loss
per share.

The fair value of  warrants  granted  during 2002 was  estimated  on the date of
grant using a Black-Sholes option pricing model and the following assumptions: a
risk-free  rate of return of 3.28%;  a weighted  average  expected  life of 2.04
years; expected volatility of 227%; and no dividends.  The weighted-average fair
value of warrants granted during 2002 was $306,568.


                                      F-18

<PAGE>

NOTE 11 - DISCONTINUED OPERATIONS
---------------------------------

On November 5, 2001,  the Company  entered  into a  Restructure  and  Settlement
Agreement with Imagine Investments,  Inc. (Imagine).  Pursuant to the agreement,
which was  approved  by the  shareholders  on  February  11,  2002,  the Company
transferred  its  interest in North  Florida  Physical  Medicine,  LLC (NFPM) to
Imagine and Imagine  converted its  convertible  preferred stock and convertible
debt to common  stock  and,  accordingly,  no gain or loss was  recorded  on the
transaction.

Results of  operations  included in  discontinued  operations  are as follows at
December 31:

Condensed operating results                                              2002
---------------------------                                          -----------
Revenues:
   Medical fees                                                          740,619
Expenses:
   Selling, general and administrative expenses                          509,223
                                                                     -----------
Income (loss) before taxes                                               231,396
   Income tax provision                                                   78,676
                                                                     -----------
Income (loss) from discontinued operations                           $   152,720
                                                                     ===========

NOTE 12 - SUBSEQUENT EVENTS

In January 2004, the Company,  through its  wholly-owned  subsidiary MBH and its
wholly-owned  subsidiary Envoii,  completed a merger agreement with VPS Holding,
LLC, a Kentucky limited  liability  company,  ("VPSH"),  VP Acquisition,  LLC, a
Kentucky limited liability company and a wholly-owned  subsidiary of Envoii, and
James K. Millard,  the sole member of VPSH,  under a  reorganization  within the
meaning of Internal Revenue Code Section 368(a).  Subsequent to the merger, VPSH
continues as the surviving entity and wholly-owned subsidiary of Envoii.

The purpose of the merger was to obtain the rights to the intellectual  property
and  know-how  related to  prescription  drug  monitoring  databases  for use in
controlled substance prescription  environments,  as well as by third parties in
non-controlled  substance prescription  environments.  The original technologies
were developed and pursued by Equity Technologies & Resources,  Inc. ("ETCR"), a
public company that trades on the Nasdaq Over-the-counter  bulletin board on the
"pink  sheets",   and  its  wholly-owned   subsidiary,   Verified   Prescription
Safeguards, Inc. ("VPS").

On April 23, 2003,  ETCR,  VPS, VPSH and Envoii had entered into a Joint Venture
Agreement, which terminated upon the completion of this merger. VPSH was awarded
a contract by the State of Kentucky  for the  development  and  deployment  of a
prescription drug monitoring pilot project utilizing the intellectual  property.
Pursuant to a "Patent and License  Agreement  and Release"  dated  January 2004,
ETCR and VPS grant to VPSH an exclusive, world-wide,  sub-licensable,  right and
license to all of the respective rights,  title, and interest of ETCR and VPS in
and to the technologies and the patent application, and all related intellectual
properties claimed therein.

In consideration of the rights granted to VPSH under the agreement,  VPSH agreed
to pay ETCR the following royalties:  (a) an initial royalty of 2/3 of the first
$150,000  in gross  revenues  received  by VPSH  from the State of  Kentucky  in
connection with the Pilot Project. In the event the State of Kentucky extends or
expands the Pilot  Project,  the  parties  agree that all  revenues  received in
connection  with such  extension or expansion are the property of VPSH;  (b) for
all other projects  incorporating or utilizing the intellectual  property,  VPSH
agrees to pay a royalty of 25% of the net revenues if the project was undertaken
VPSH as a direct result of an initial  introduction  to the customer by ETCR, or
5% of the net revenues if the project was  undertaken by VPSH without an initial
introduction  to the customer by ETCR. Net revenues means the revenues  actually
received by VPSH from the  applicable  project less the direct costs incurred by
VPSH in connection with performing the project. Other terms and conditions apply
as more fully described in the agreement.


                                      F-19