U.S. SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                  Form 10-KSB/A


[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 NO: 0-31497

                             VIDEO WITHOUT BOUNDARIES INC.
                     (Name of small business in its charter)

                   FLORIDA                                  65-1001686
                   --------                                 ----------
         (State or other jurisdiction                      (IRS Employer
                of Incorporation)                       Identification No.)

                        888 EAST LAS OLAS BLVD, SUITE 710
                        ---------------------------------
            Address of Principal Executive Office (street and number)

                            FORT LAUDERDALE, FL 33304
                          ----------------------------
                            City, State and Zip Code

                    Issuer's telephone number: (954) 527-7780

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

(Issuers involved in bankruptcy proceedings during the past five years)
Check whether the issuer has filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by a court. Yes [ ] No [ ]

(Applicable only to corporate registrants)
State the number of shares outstanding of each of the issuer's classes of common
equity, as of February 29, 2004: 25,948,747 shares of common stock.


<PAGE>

EXPLANATORY NOTE

Video Without Boundaries, Inc. (the "Company") is filing this Amended Form
10-KSB (the "Amended Form 10-KSB/A") to restate the Company's Annual Report on
Form 10-KSB (the "Original Form 10-KSB") for the period ended December 31, 2003
as originally filed with the Securities and Exchange Commission on April 14,
2004. This Amended Form 10-KSB/A reflects restatements of the previously filed
audited financial statements as of December 31, 2003 and related changes in Item
6, Item 8A, and Item 12 resulting from the matters discussed below.

The restatement was undertaken due to the auditor of the 2003 fiscal year not
having been registered with the PCAOB at the time of the original Form 10-KSB
filing on April 14, 2004. The restatement corrects the accounting of the
following transactions: (1) the reversal of sales and cost of sales where
ownership of the product had not passed (2) reversal of a cash-in-transit entry
incorrectly made (3) reclassification of the purchase of a web portal and
MediaREADY software to property and equipment (4) increase in depreciation
expense on property and equipment (5) reclassification of a loan receivable to
investments and subsequent provision for decline in value (6) provision for bad
debts against loan receivable (7) expensing a prepayment to research and
development (8) revision of the interest charge on shareholder loans (9)
reversal of expenses charged to the Company by a shareholder (10) accrual for
salary to President (11) revision of interest on third party loans (12) booking
of financing expense to recognize the beneficial conversion feature of
convertible debentures, and revision of interest expense (13) correction to
classifications of various operating costs. The restatement also conforms
disclosure to current Form 10-KSB requirements.

This Amended Form 10-KSB/A does not attempt to modify or update any other
disclosures set forth in the Original Form 10-KSB, except as required to reflect
the effects of the noted restatements and as otherwise discussed above.
Additionally, this Amended Form 10-KSB/A and the Original Form 10-KSB is subject
to updating and supplementing as provided in the periodic reports that the
Company has filed and will file after the original filing date with the
Securities and Exchange Commission. In addition, the filing on this Amended Form
10-KSB/A shall not be deemed an admission that the original filing, when made,
included any untrue statement of material fact or omitted a material fact
necessary to make a statement made therein not misleading.

FACTORS THAT MAY AFFECT FUTURE RESULTS

This Form 10-KSB/A contains certain forward-looking statements within the
meaning of the Federal Securities Laws. Specifically, all statements other than
statements of historical facts included in this Form 10-KSB/A, as amended,
regarding our financial performance, business strategy and plans and objectives
of management for future operations are forward-looking statements and based on
our beliefs and assumptions. If used in this report, the words "anticipate,"
"believe," "estimate", "expect," "intend," and words or phrases of similar
import are intended to identify forward-looking statements. Such statements
reflect the current view of the Company with respect to future events and are
subject to certain risks, uncertainties, and assumptions, including but without
limitation, those risks and uncertainties contained in our Annual Report on Form
10-KSB. Although we believe that our expectations are reasonable, we can give no
assurance that such expectations will prove to be correct. Based upon changing
conditions, any one or more of these events described herein as anticipated,
believed, estimated, expected or intended may not occur. All prior and
subsequent written and oral forward-looking statements attributable to the
Company or persons acting on its behalf are expressly qualified in their
entirety by this cautionary statement.

<PAGE>

                                     PART I

ITEM 1.  DESCRIPTION OF BUSINESS

CORPORATE HISTORY

Video Without Boundaries, Inc. (f/k/a ValuSales.com, Inc.) a Florida corporation
(the "Company") was formed to create a single-source Internet and streaming
media product and solution's company providing Internet and Technology products
and services to various sized customers.

The Company was incorporated in the State of Florida, on March 19,1999, and had
no operations until on July 20, 1999 when it purchased assets for, $75,000, and
signed employment agreements with two individuals, which included the issuance
of 900,000 shares of common stock. The assets acquired were property and
equipment for $40,000 and inventory for $35,000. The common stock was valued at
par because the Company was privately owned and no market existed for the sale
of its stock.

On December 1, 1999, The Company (f/k/a ValuSales.com, Inc.) sold 2,673,000
shares of its common stock for $175,000 and used the proceeds to acquire an
inactive entity, September Project II Corp., which then changed its name to
Video Without Boundaries, Inc. and became the surviving entity.

For accounting purposes, the acquisition has been treated as a capital
transaction rather than a business combination. Accordingly, the 5,000,000
outstanding shares of September Project II, Corp. have been reflected as
outstanding since inception.

All significant interdivisional transactions and balances have been eliminated.

As of December 31, 2003, the Company has elected to operate with divisions
rather than create separate corporations for each business segment. The Company
was headquartered at 1975 E. Sunrise Blvd. 5th Floor, Fort Lauderdale, FL 33304.

GENERAL

As of December 31, 2003, the Company provided products and services in the
converging digital media on demand, enhanced home entertainment and emerging
interactive consumer electronics markets. The Company is focused on home
entertainment media products and solutions that enhance the consumer experience,
while providing new revenue opportunities for online music and movie content
providers. The Company is becoming a supplier of broadband products, services
and content including its ability to deliver broadcast quality digital video and
web interactivity at transfer rates as low as 56K.

As of December 31, 2003, the Company, a provider of streaming digital media and
video on demand (VOD) services, had recently taken actions to reduce the
company's operating cost. These changes will also balance the company's
investment across its two key markets: streaming digital media and video on
demand (VOD) services. Due to the continued decline in economic activity and
weakened capital and business spending for emerging technology products and
services, VWB has redirected its human and capital resources towards its most
profitable products and services, while reducing its exposure to unprofitable
markets.

As of December 31, 2003, the Company was attempting to develop new business
partnerships in regards to its streaming media business within the home
entertainment marketplace. Over the last 12 months, all major PC, consumer
electronics, and set-top box manufactures have added streaming media players
within their products to capitalize on the growth of broadband connections and
streaming content offered over the Internet. With more than 10 million broadband
households and nearly 35 million broadband-enabled screens, the Company is
attempting to capitalize on the growth of this market through its professional
services division and potential new partnerships and business ventures.

As of December 31, 2003, the Company is repositioning itself within the
entertainment and home broadband marketplace. The Company's goals are 1) to
become a producer & distributor of interactive consumer electronics equipment 2)
establish itself as a software infrastructure player within the home
entertainment media-on-demand marketplace, 3) attempt to capture revenue and


<PAGE>

market share from services and products within the video on demand (IP)
marketplace.

Media Convergence

Consumers are becoming acclimated to the benefits and quality of digital media
goods and on-line digital media. DVDs and CDs dominate the audio/video sales
market, and digital cameras and emailing images have become a standard method of
exchanging and sharing photographs.

The acceptance of digital media and storage options, coupled with new digital
distribution (IP) methods, is resulting in new convergence devices being
introduced to consumers that allow for:

     o    Universal Playback and storage of all digital media rented and
          purchased by the consumer

     o    Consumers to have "on-demand" or immediate access to all digital media
          purchased & available for rental.

     o    All forms of digital media to be played on all traditional audio/video
          equipment within the home, but also on relatively new, increasingly
          portable equipment (laptops, MP3 players)

As a result of the above, consumer interaction with media is changing in
significant ways. Supporting and exploiting this new consumer behavior requires:

     o    Simple to use devices that conform to existing consumer behavior and
          media needs

     o    Conceptual bridge between the "home PC" and the living room
          environment Robust Digital Rights Management (DRM) solution to support
          secure IP media delivery

Convergence Approaches

As of December 31, 2003, the existing industry participants are not successfully
integrating convergence functionality in devices suitable for the living room.
The result is that consumers: 1) have too many discrete devices connected to
their TVs; and 2) lack the basic PC functionality required to exploit their TVs
as "monitors" with which to access the Internet.

Industry                                   Product Line Example
--------                                   --------------------
PC Manufacturers:                           Multimedia PC "Media Station"
     o    Form factor (design) and connectivity is not living room & stereo/TV
          friendly
     o    Designed for early adopter market
     o    Expensive ($1,000-$2,000)

Networking/Wireless Approach:               Wireless PC to TV/Stereo Devices
     o    Complicated for consumers & expensive
     o    Does not support DVD/CD quality playback from PC to TV

Consumer Electronics Manufacturers:         Kenwood Soverign Product Line
     o    Offers limited and fixed chip-set functionality
     o    Cannot be upgraded or changed

Product Architecture ("MediaREADY 4000")

Based on the MediaREADY software, this product utilizes the basic form factor
and functionality of mainstream DVD players (top selling main platform of home
entertainment) and offers:

     o    "Simple-stupid" Graphical User Interface (GUI) functionality

     o    Internet Media Player that enables full-screen video playback on TV
          with DVD-like functionality (MPEG4)

     o    Killer IP applications (email, Internet browsing, internet-based
          audio/video streaming)

     o    Form factor and Audio/Video connecters that mimic and connect to all
          consumer electronics products

     o    Picture in picture (PIP) functionality (i.e. TV and Web at same time)

                                       2
<PAGE>

Advanced Features include:

     o    Progressive downloading, storage and playback of digital media files
          stored on inexpensive external USB and Firewire connected storage
          devices

     o    Networked digital media playback from any connected PC device within
          the home network.

     o    Seamless DRM compatibility with mainstream Internet DRM technologies,
          but enhanced to base DRM ownership to "an individual" rather than a
          device via CAC Media's proprietary DRM technology

     o    Standard Linux-based operating system to support application
          scalability and extended power-on usage

In addition, the MediaREADY platform allows consumers to upgrade their units
with additional services based on a one-time or subscription charge. Retailers
and resellers of the MediaREADY line of products also participate in the
residual revenue stream offered by these upgrades. VWB offers value-added
applications and upgrades that include:

     o    Video Conferencing & IP Telephony

     o    Games (Single or Multiplayer)

     o    PVR (i.e. Tivo)

     o    Online Digital Media Rental and Purchase

STRATEGY

Product Marketing and Sales Approach

MediaREADY products provide retailers and resellers with royalty commissions
(sales incentive) on future upgrades and point-of-sale add-on purchases (i.e.
external storage for media). Since consumers already understand the basic
MediaREADY features (DVD, PVR, Internet Access) and broadly accept the $299 -
$399 price point, the key sales/marketing proposition is that the product:

     o    Consolidates several popular devices (and features) into one universal
          unit

     o    Is easily and inexpensively upgradeable via software downloads

     o    Stands out as the "best buy for the dollar" (also provides the best
          profit ($$) for the retailer/salesperson)

The company expects to become cash/flow positive primarily through Retail
Distribution (VAR and End User) and OEM Licensing Sales. In addition, VWB will
also receive incremental revenue streams based upon:

     o    Purchases of value-added applications through the MediaREADY platform

     o    Professional Services Revenue based upon customized value-added
          applications

In January 2003, the Company acquired all assets of Brokenremote.tv, for 500,000
shares of restricted common stock, a privately held on-line publisher and
subsidiary of CAC Media Inc. Brokenremote.tv publishes news and market analytics
about the emerging convergence of the Interactive TV & Consumer Electronics,
Video On Demand (VOD), & Broadband Internet Entertainment markets. The
acquisition will support the Company's attempt to build its brand recognition
within this new emerging market and leverage its existing relationships with
streaming media clients as new advertising clients. Brokenremote.tv provides
day-to-day news updates on topics such as: ongoing copyright and consumer rights
legislation regarding digital media distribution, Video on Demand, Interactive
TV, new technology standards and product announcements.

In addition to the acquisition of Brokenremote.tv, the Company has also made a
strategic investment in privately held CAC Media, Inc. The Company invested
$100,000 to complete the transaction. CAC Media, a privately held corporation,
specializes in interactive consumer electronics software development, digital
rights management, and digital media distribution infrastructure.

In February 2003, the Company agreed to a strategic alliance with Neon
Technology, Inc. a privately held corporation and a designer of advanced set-top
box hardware, under which the companies will collaborate on the design and
production of a line of next-generation multifunction set-top boxes for the

                                       3
<PAGE>

interactive consumer electronics marketplace. The Company and Neon Technology,
have been working together to develop a tightly integrated multifunction
interactive DVD player and set-top box solution. Next-generation interactive
set-top boxes will be the delivery point for new entertainment programs and
services for the home. They will combine Internet access, web browsing,
streaming media playback, video-on-demand, email, online shopping, and a host of
other capabilities into a single, unified system. Since this is a new market and
product, there are may be unforeseen delays in design and production because of
cash flow and manufacturing problems.

In February 2003, the Company debuted the MediaREADY Internet/DVD Player
(VWB-3000), an easy-to-use home entertainment device that makes it possible to
surf the Web, send email, watch DVD videos, and even sing karaoke from any
television. Similar in size and appearance to a conventional DVD player,
MediaREADY combines a DVD player and Web browser with a full-sized wireless
keyboard, a media player for playback of Web-based streaming media, Dolby
Digital 5.1 Surround Sound, picture-in-picture capability, a karaoke microphone
jack, and other features that enable consumers to access all popular forms of
home entertainment from the comfort of their couch. The DVD player supports CDs,
VCDs, SVCDs and CDs with MP3 files as well as DVDs, allowing users to play the
latest video and audio. MediaREADY supports all forms of Internet connection
including 56 kbps modem, dynamic DSL and cable modems, and 10/100 Base-T
Ethernet. The built-in Web browser includes SSL 3.0 for secure online shopping.
MediaREADY's VWB Internet PIP picture-in-picture feature allows users to
multi-task their favorite pastimes, such as viewing the Web while watching a DVD
movie or television program. A user-friendly, TV-optimized user interface allows
even first-time users to navigate with ease. The unit carries a manufacturer's
suggested retail price of $349 and ships with a remote control, microphone, and
all cables needed for easy hookup. The MediaREADY product is a result of the
strategic alliance with Neon Technology.

In March 2003 the Company licensed the Lafayette name for its MediaREADY set-top
boxes. As a result of this licensing agreement with Lafayette Electronics, The
Company will produce a set-top box under the Lafayette brand. The
Lafayette-branded units will appear in specialty retail stores and coincide with
the introduction of Lafayette's new line of home audio and video electronic
products designed to re-launch the Lafayette brand. Additionally, The Company
signed a Consulting Agreement with Steve Cavayero, President of Lafayette
Electronics for 50,000 shares of restricted common stock.

In April 2003 the Company announced the debut of a VAR program for its
MediaREADY(TM) Internet/DVD Player, the combo entertainment unit that brings
email, web surfing, karaoke, MP3, CD music playback, and more to any television.
Focused on specialty and high-end home electronics and computer retailers, the
VAR program gives merchants an exceptional opportunity to capitalize on the
developing market for convergent home entertainment devices.

In May 2003 the Company signed a manufacturing agreement with Lung Hwa
Electronics, a major consumer electronics manufacturer, to begin production of
the Company's new line of MediaREADY(TM) Internet/DVD Players. MediaREADY(TM), a
revolutionary combo entertainment device that brings email, web surfing,
karaoke, MP3, CD/DVD playback, and more to any television and home theater
system, will ship to retailers in September 2003.

Lung Hwa Electronics Co. Ltd., established in 1973, is a public company listed
on the Taiwan Stock Market (TSEC: 2424) with a current market capitalization of
$28 million (USD). Lung Hwa, an ISO 9001 certified manufacturer, consistently
provides the most qualified professional products to the market and has become
one of the leading 3C manufacturers in Taiwan. Foreseeing rapid business growth,
Lung Hwa invested in a new factory, Expert Electronics (Wujiang) Co. Ltd., in
Shanghai, China. The 45,000-square-foot factory produces 600,000 PCBA pieces and
200,000 Box Build sets each month. The huge capacity of the China factory
enables Lung Hwa to bring to market more cost-effective products. With 29 years
of innovation, Lung Hwa is expanding its product lines into two categories: EMS
(Electronics Manufacturing Services) and DMS (Design Manufacturing Services).

In June 2003, the Company began production of its new and more advanced
MediaREADY 4000 Internet/DVD player. The convergent device, which unifies DVD
playback, feature-rich TV, Internet, email, karaoke, and CD/MP3 playback with
local and networked digital storage along with a host of possible upgrades and

                                       4

<PAGE>

options, is expected to reach consumer electronics shelves in late November
2003. The biggest change in the MediaREADY(TM) 4000 is the addition of powerful
PC componentry, including an onboard hard drive for storage of digital
entertainment. The unit's new connectivity options, including Ethernet 10B/100BT
wired and wireless connections, USB 2.0 and 1394 connectors, enables the device
to download, play, and manage digital movies and other forms of digital
entertainment from the Internet, or from a home networked PC. An improved Web
browser and other feature upgrades ensure that the MediaREADY(TM) 4000 will be
the one-stop entertainment and communications choice for the new age of digital
technology.

In July 2003, the Company announced the selection of Sigma's EM8475 digital
media processor, for the Company's new MediaREADY(TM) 4000 Internet/DVD Player,
from Sigma Designs, Inc. (Nasdaq: SIGM), a leader in digital media processing
for consumer appliances. The EM8475, an advanced MPEG-4 decoder designed for
set-top box applications, will drive digital video playback on the MediaREADY
4000, a breakthrough in convergent home entertainment. Sigma Designs' EM8475
MPEG-4 digital processor is the premier product for IP video streaming in
set-top boxes and media gateways. Incorporating the company's award-winning
REALmagic(R) Video Streaming Technology, the chip was the industry's first
MPEG-4 chip to support full-resolution (720x576) and streaming video based on
ISMA specification 1.0. The EM8475 provides highly integrated solutions for
decoding of MPEG-4, as well as DVD, MPEG-2 and MPEG-1 formats.

The EM8475 enables the rapid development of adding PVR, progressive DVD playback
and streaming video playback functionality to advanced set-top boxes and other
PCI-based devices. In addition to providing state-of-the-art MPEG-4 playback
capability, the EM8475 will allow the MediaREADY(TM) 4000 to access
sophisticated online multimedia content containing audio, video, text, graphics
and interactivity. MPEG-4's object-oriented environment supports complex scene
manipulation at low bit rates, making it ideal for streaming content over
today's broadband connections.

Sigma Designs specializes in silicon-based MPEG decoding for steaming video,
progressive DVD playback, and advanced digital set-top boxes. The company's
award-winning REALmagic(R) Video Streaming Technology is used in both commercial
and consumer applications providing highly integrated solutions for high-quality
decoding of MPEG-1, MPEG-2, and MPEG-4. Headquartered in Milpitas, Calif., the
company also has offices in China, Europe, Hong Kong, Japan, Korea, and Taiwan.

In September 2003, VWB announced a partnership with Sound Choice(R), the leading
brand and distributor of karaoke sound tracks in the U.S., today announced an
alliance aimed at adding bundled karaoke music titles to VWB's new
MediaREADY(TM) 4000 Internet/DVD player. Under the terms of the agreement, VWB's
initial production run, will be factory-equipped with popular karaoke titles,
giving purchasers a chance to enjoy the fun of karaoke in the privacy of their
home. Sound Choice's premium-quality karaoke content will be presented on the
MediaREADY 4000 under Sound Choice's Performer's Choice(R) brand. The
Performer's Choice logo will appear on MediaREADY 4000 packaging; other
cooperative marketing activities will include the promotion and sale of
MediaREADY 4000 players on Sound Choice's websites.

In September 2003, VWB announced it was demonstrating its breakthrough
MediaREADY 4000(TM) convergent Internet/DVD Player to OEM manufacturers at
Computex Taipei 2003. The MediaREADY 4000, one of the world's first integrated
consumer set-top devices, combines popular media entertainment options including
DVD/MPEG-1/MPEG-2/MPEG-4 playback, feature-rich television, email, web surfing,
karaoke, CD/MP3 playback and more, with an open source, Linux-based architecture
that allows it to support virtually any kind of OEM configuration or upgrade.
The Company's MediaREADY 4000 has partnered with Lung Hwa Electronics Co., Ltd.,
a leading worldwide consumer electronics equipment manufacturer, to produce the
convergent device. The MediaREADY 4000 is being demonstrated at Computex Taipei
2003 from the Lung Hwa Electronics exhibit, Booths 427, 429, and 431.

In November 2003, the Company announced that it has expanded its trade credit
facilities to more than $10 million (USD) in order to ensure ample production
financing for its new line of branded MediaREADY(TM) convergent Internet/DVD
players. The $10 million in credit facilities includes a new line of credit from
the Company's primary manufacturing partner.

                                       5

<PAGE>

As of December 31, 2003 the Company has minimal revenue but will derive
substantially all of its revenues from product sales and licensing fees
associated with the sale of its MediaREADY line of set-top boxes on an order by
order basis which will start in 2004.

Agreements and purchase orders that may be entered into in connection with
product sales are generally on an order by order basis. If customers terminate
purchase orders or if the Company is unable to acquire new customer and orders
for its products, the Company's business, financial condition, and results of
operations could be materially and adversely affected. In addition, because a
proportion of the Company's expenses is relatively fixed, a variation in the
number of products sold can cause significant variations in operating results
from quarter to quarter.

The Company's product sales will vary in size; therefore, a customer that
accounts for a significant portion of the Company's revenues in one period may
not generate a similar amount of revenue in subsequent periods. No customer
accounted for more than 10.0% of the Company's revenues in the periods ended
December 31, 2002 or December 31, 2003. The Company does not know the scope of
its product sales or customer profile as yet because the products are so new.
Any cancellation, deferral, or significant reduction in future orders could have
a material adverse affect on the Company's business, financial condition, and
results of operations.

CLIENTS

The Company has focused and will continue to focus on long-term relationships
with clients that will range from retail consumers to small, medium, and large
business customers. If its clients terminate purchase orders or if the Company
is unable to enter into new engagements or sell its new products and services
its business, financial condition and results of operations could be materially
and adversely affected.

No client accounted for more than 10% of the Company revenues in 2003 or 2002.
Although, the Company does not believe that it will derive a significant portion
of its revenues from a limited number of clients, there is a risk that it may do
so since many of the Companies products are new and more difficult to sell. Any
cancellation, deferral or significant reduction in work performed for clients or
a significant number of smaller clients could have a material adverse affect on
it's business, financial condition and results of operations.

SALES AND MARKETING

As of December 31, 2003, the Company plans to promote itself by direct sales
efforts using telephone sales, conventional media advertising, and Internet
marketing. These advertisements are targeted at small, medium, and large
business customers as well as retail consumers who are likely to respond to
specific ads or visit specific web sites to make a purchase. The Company employs
two inside and outside sales people to help customers and to prospect business
from various forms of lead generation. The Company also plans to engage
independent sales agents in various geographic areas as well as product dealers
and resellers.

Our marketing strategy is to promote and enhance our brand by participating in
targeted industry conferences and seminars, engaging in a public relations
campaign. This strategy is designed to strengthen our brand name and generate
new clients by increasing the awareness of our brand with high quality
comprehensive converging digital media on demand, enhanced home entertainment
and emerging interactive consumer electronics companies. As previously
mentioned, the sales and marketing of our products and services is dependent on
the company to continue to raise capital and grow revenues.

We believe that establishing and maintaining a good reputation and name
recognition is critical for attracting and expanding our customer base. We also
believe that the importance of product acceptance and market validation will
increase due to the growth in the converging digital media on demand, enhanced
home entertainment and emerging interactive consumer electronics markets. If the
various product markets and customers do not perceive our products and services
to be effective or of high quality, our brand name and reputation could be
materially and adversely affected.

                                       6

<PAGE>

COMPETITION

Many of the Company competitors have longer operating histories, larger client
bases, longer relationships with clients, greater brand or name recognition and
significantly greater financial, technical, marketing and public relations
resources. Several of these competitors may provide or intend to provide a
broader range of products and services than the Company. Furthermore, greater
resources may enable a competitor to respond more quickly to new or emerging
technologies and changes in customer requirements and to devote greater
resources to the development, promotion and sale of its products and services
than we can. In addition, competition may intensify in the converging digital
media on demand, enhanced home entertainment and emerging interactive consumer
electronics markets by major companies which could have an adverse on the
Company.

As of December 31, 2003 the Company has no portion of the converging digital
media on demand, enhanced home entertainment and emerging interactive consumer
electronics markets as it develops its products for launch and there can be no
assurances it that it will be able to penetrate these markets in the future
because of the need for the Company to raise additional capital.

EMPLOYEES

As of December 31, 2003 the Company employed a total of 5 on a full-time and
part-time basis. In addition the company had consulting agreements with 4
outside individuals or firms for sales and marketing, technical consulting, and
public relations. None of the employees belong to a union and the Company has
not experienced any work stoppages. The Company believes that its labor
relations are satisfactory.

SUBSEQUENT EVENT

On August 11, 2004 (with an effective date of June 1, 2004) the Company entered
into a stock purchase agreement with the sole shareholder of a privately held
company engaged in the business of selling and distributing electronic products.
The principal terms of the agreement provide for the Company to acquire all of
the issued and outstanding shares of the acquired entity for a purchase price of
$1,500,000 plus the issuance of 1,000,000 restricted common stock shares in the
acquiring entity. Additional considerations included in this stock purchase
agreement require the Company to collateralize an existing line of credit in the
amount of $2,500,000 as well as retain the services of the selling shareholder,
pursuant to a consulting agreement dated August 11, 2004, for a term consistent
with the fulfillment of the stock purchase agreement. The Company, at time of
closing, gave their initial deposit of $350,000, but has defaulted on the
remaining balance due and is also in default of the collateralization provision.
Currently, management is negotiating with the seller in an attempt to cure the
default and/or rescind the transaction. Management believes that the ultimate
resolution of this default may have a material adverse effect on Video Without
Boundaries, Inc. financial condition, results of operations and liquidity.

SUBSEQUENT EVENT

On August 11, 2004 (with an effective date of June 1, 2004) the Company entered
into a stock purchase agreement with the sole shareholder of a privately-held
company engaged in the business of selling and distributing electrical products.
The principal terms of the agreement provide for the Company to acquire all of
the issued and outstanding shares of the acquired entity for a purchase price of
$1,500,000 plus the issuance of 1,000,000 restricted common stock shares in the
acquiring entity. Additional considerations included in this stock purchase
agreement require the Company to collateralize an existing line of credit in the
amount of $2,500,000 as well as retain the services of the selling shareholder,
pursuant to a consulting agreement dated August 11, 2004, for a term consistent
with the fulfillment of the stock purchase agreement. The Company, at time of
closing, gave their initial deposit of $350,000, but has defaulted on the
remaining balance due and is also in default of the collateralization provision.
Currently, management is negotiating with the seller in an attempt to cure the
default. In the event that a resolution of the default is not successful then
the acquisition will be rescinded and the deposit forfeited. Management believes
that this would have a material adverse effect on the Company's financial
statements. In addition, previously filed financial statements reflecting
consolidated operations would require restatement.

ITEM 2.  DESCRIPTION OF PROPERTY

As of December 31, 2003 the Company's corporate office were located at 1975 East
Sunrise Blvd. 5th Floor, Fort Lauderdale, FL 33304. Pursuant to a written lease,
the Company leased approximately 450 square feet at an annual rent of $7,200.
The lease is for a term of 1 year. The company had a sales and technical office
at 20 SW 27th Ave. suite 101 Pompano Beach, FL 33069. Pursuant to a written
lease, the company leased approximately 1,000 square feet at an annual rent of
$12,000.

ITEM 3.  LEGAL PROCEEDINGS

As of December 31, 2003, the Company is not a party to any pending legal
proceedings, and no such proceedings are known to be contemplated. In addition,
no director, officer or affiliate of the Company, and no owner of record or
beneficial owner of more than 5.0% of the securities of the Company, or any
associate of any such director, officer or security holder is a party adverse to
the Company or has a material interest adverse to the Company in reference to
pending litigation.

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

No matters were submitted to a vote of the security holders of the Company
during the fourth quarter of the fiscal year which ended December 31, 2003.

                                       7

<PAGE>

                                    PART II

ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

As of December 31, 2003, the Company's Common Stock traded in the
over-the-counter market under symbol VDWB on the OTC Electronic Bulletin Board.
There was no trading in the Company's Common Stock prior to May 2000. The
following table shows the quarterly high and low bid prices for the calendar
year 2003 as reported by the National Quotations Bureau Incorporated. These
prices reflect inter-dealer quotations without adjustments for retail markup,
markdown or commission, and do not necessarily represent actual transactions.

        YEAR              PERIOD                   HIGH              LOW
        ----              ------                   ----              ---
        2003             First Quarter             $5.25            $0.20
                         Second Quarter            $2.00            $0.375
                         Third Quarter             $0.83            $0.27
                         Fourth Quarter            $0.55            $0.145

As of December 31, 2003, there were approximately 181 holders of record of the
Company's Common Stock. Holders of the Company's Common Stock are entitled to
dividends when, as and if declared by the Board of Directors out of funds
legally available therefore. The Company does not anticipate the declaration or
payment of any dividends in the foreseeable future.

The Company intends to retain earnings, if any, to finance the development and
expansion of its business. Future dividend policy will be subject to the
discretion of the Board of Directors and will be contingent upon future
earnings, if any, the Company's financial condition, capital requirements,
general business conditions and other factors. Therefore, there can be no
assurance that any dividends of any kind will ever be paid.

The Company's transfer agent is Interwest Transfer Co., Inc., which is located
at 1981 East 4800 South, Suite 100, Salt Lake City, UT 84117 and Interwest's
telephone number is (801) 272-9294.

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

The following discussion of the financial condition and results of operations of
the Company should be read in conjunction with the Financial Statements,
including the Notes thereto, of the Company included elsewhere in this Form
10-KSB as amended.

OVERVIEW

As of December 31, 2003, the Company provided products and services in the
converging digital media on demand, enhanced home entertainment and emerging
interactive consumer electronics markets. VWB is focused on home entertainment
media products and solutions that enhance the consumer experience, while
providing new revenue opportunities for online music and movie content
providers. VWB is becoming a supplier of broadband products, services and
content including its ability to deliver broadcast quality digital video and web
interactivity at transfer rates as low as 56K.

The Company provided streaming digital media and video on demand (VOD) services,
and recently taken actions to reduce the company's operating cost. These changes
will also balance the company's investment across its two key markets: streaming
digital media and video on demand (VOD) services. Due to the continued decline
in economic activity and weakened capital and business spending for emerging
technology products and services, VWB has redirected its human and capital
resources towards its most profitable products and services, while reducing its
exposure to unprofitable markets.

The Company is attempting to develop new business partnerships in regards to its
streaming media business within the home entertainment marketplace. Over the
last 12 months, all major PC, consumer electronics, and set-top box manufactures
have added streaming media players within their products to capitalize on the
growth of broadband connections and streaming content offered over the Internet.
With more than 10 million broadband households and nearly 35 million
broadband-enabled screens, VWB is attempting to capitalize on the growth of this
market through its professional services division and potential new partnerships
and business ventures.

As of December 31, 2003, the Company was repositioning itself within the
entertainment and home broadband marketplace. The Company's goals are 1) to
become a producer & distributor of interactive consumer electronics equipment 2)
establish itself as a software infrastructure player within the home
entertainment media-on-demand marketplace, 3) attempt to capture revenue and
market share from services and products within the video on demand (IP)
marketplace.

Media Convergence

Consumers are becoming acclimated to the benefits and quality of digital media
goods and on-line digital media. DVDs and CDs dominate the audio/video sales
market, and digital cameras and emailing images have become a standard method of
exchanging and sharing photographs.

                                       8

<PAGE>

The acceptance of digital media and storage options, coupled with new digital
distribution (IP) methods, is resulting in new convergence devices being
introduced to consumers that allow for:

     o    Universal Playback and storage of all digital media rented and
          purchased by the consumer

     o    Consumers to have "on-demand" or immediate access to all digital media
          purchased & available for rental.

     o    All forms of digital media to be played on all traditional audio/video
          equipment within the home, but also on relatively new, increasingly
          portable equipment (laptops, MP3 players)

As a result of the above, consumer interaction with media is changing in
significant ways. Supporting and exploiting this new consumer behavior requires:

     o    Simple to use devices that conform to existing consumer behavior and
          media needs

     o    Conceptual bridge between the "home PC" and the living room
          environment Robust Digital Rights Management (DRM) solution to support
          secure IP media delivery

Convergence Approaches

The existing industry participants are not successfully integrating convergence
functionality in devices suitable for the living room. The result is that
consumers: 1) have too many discrete devices connected to their TVs; and 2) lack
the basic PC functionality required to exploit their TVs as "monitors" with
which to access the Internet.

Industry                                   Product Line Example
--------                                   --------------------
PC Manufacturers:                          Multimedia PC "Media Station"
     o    Form factor (design) and connectivity is not living room & stereo/TV
          friendly
     o    Designed for early adopter market
     o    Expensive ($1,000-$2,000)

Networking/Wireless Approach:              Wireless PC to TV/Stereo Devices
     o    Complicated for consumers & expensive
     o    Does not support DVD/CD quality playback from PC to TV

Consumer Electronics Manufacturers:        Kenwood Soverign Product Line
     o    Offers limited and fixed chip-set functionality
     o    Cannot be upgraded or changed

Product Architecture ("MediaREADY 4000")

Based on the MediaREADY software, this product utilizes the basic form factor
and functionality of mainstream DVD players (top selling main platform of home
entertainment) and offers:

     o    "Simple-stupid" Graphical User Interface (GUI) functionality

     o    Internet Media Player that enables full-screen video playback on TV
          with DVD-like functionality (MPEG4)

     o    Killer IP applications (email, Internet browsing, internet-based
          audio/video streaming)

     o    Form factor and Audio/Video connecters that mimic and connect to all
          consumer electronics products

     o    Picture in picture (PIP) functionality (i.e. TV and Web at same time)

Advanced Features include:

     o    Progressive downloading, storage and playback of digital media files
          stored on inexpensive external USB and Firewire connected storage
          devices

     o    Networked digital media playback from any connected PC device within
          the home network.

                                       9

<PAGE>

     o    Seamless DRM compatibility with mainstream Internet DRM technologies,
          but enhanced to base DRM ownership to "an individual" rather than a
          device via CAC Media's proprietary DRM technology

     o    Standard Linux-based operating system to support application
          scalability and extended power-on usage

In addition, the MediaREADY platform allows consumers to upgrade their units
with additional services based on a one-time or subscription charge. Retailers
and resellers of the MediaREADY line of products also participate in the
residual revenue stream offered by these upgrades. VWB offers value-added
applications and upgrades that include:

     o    Video Conferencing & IP Telephony

     o    Games (Single or Multiplayer)

     o    PVR (i.e. Tivo)

     o    Online Digital Media Rental and Purchase

Historically the Company has derived substantially all of its revenues from fees
and product sales for services and products generated on an order by order
basis. Video Without Boundaries services and products are provided on a
fixed-price basis and on a time and material basis.

In addition, because a proportion of the Company's expenses is relatively fixed,
a variation in the number of client purchase orders can cause significant
variations in operating results from quarter to quarter.

The Company's orders vary in size and scope; therefore, a client that accounts
for a significant portion of the Company's revenues in one period may not
generate a similar amount of revenue in subsequent periods. No client accounted
for more than 10.0% of the Company's revenues in the period ended December 31,
2003.

The Company does not believe that it will derive a significant portion of its
revenues from a limited number of clients in the near future. However, there is
a risk that the source of the Company's revenues may be generated from a small
number of clients. These clients may not retain the Company in the future. Any
cancellation, deferral, or significant reduction in work performed for these
principal clients or a significant number of smaller clients could have a
material adverse affect on it's business, financial condition, and results of
operations.

Quarter-to-quarter fluctuations in margins

The Company's operating results and quarter-to-quarter margins may fluctuate in
the future as a result of many factors, some of which are beyond the Company's
control. Historically, the Company's quarterly margins have been impacted by:

     o    the number of client purchase orders completed;

     o    seasonality;

     o    the number of days during the quarter;

     o    marketing and business development expenses;

     o    pricing changes; and

     o    economic conditions generally or in the information technology
          products and services markets.

The Company expects these fluctuations to continue.

RESULTS OF OPERATIONS

Year Ended December 31, 2003 Compared to Year Ended December 31, 2002.

REVENUES

Net sales are comprised of product and services sales, net of returns and
allowances. In 2003, revenues were $1,770 compared to $5,621 for 2002. The
decrease in net sales was due to the consolidation and elimination of
non-profitable company divisions while investing in the development of new
digital media products for future sales.

                                       10

<PAGE>

Cost of sales decreased from $3,921 in 2002 to $1,046 in 2003. As a percentage
of net sales, the Company's gross margin was 30.2% for 2002 and 40.9% for 2003.
This increase in gross margin is due to the decrease in consulting services. The
current margin is not necessarily indicative of anticipated future margins.

GENERAL AND ADMINISTRATIVE

General and administrative expense includes personnel costs, administrative
expenses, general office expenses, depreciation expenses, advertising costs,
professional fees, and research and development. General and administrative
expenses were $1,210,680 representing 684% as a percentage of revenue for the
year ended December 31, 2003 compared to $944,880 representing 168% as a
percentage of revenue for the year ended December 31, 2002. The increase in
general and administrative expenses as a percentage of revenue was a result of
company investment in the development of new products and services.

Net cash used in operating activities was $122,844 for the year ended December
31, 2003. Net cash used in operating activities was primarily attributable to
net losses.

Net cash provided by financing activities was $450,677 for the year ended
December 31, 2003. Net cash provided by financing activities resulted from an
advance from a shareholder and a Convertible Debenture.

LIQUIDITY AND CAPITAL RESOURCES

As of December 31, 2003, the Company had ($1,404,471) of working capital. On
February 28, 2004 the Company secured financing for $1,100,000; however, the
Company believes that its current working capital, the new financing and cash
generated from operations will not be sufficient to meet the Company's cash
requirements for the next twelve months without the ability to obtain profitable
operations and/or obtain additional financing. Our independent public accountant
has included as a footnote in their report on our financial statements, stating
that certain factors raise substantial doubt about our ability to continue as a
going concern.

If the Company is not successful in generating sufficient cash flow from
operations or in raising additional capital when required in sufficient amounts
and on acceptable terms, these failures could have a material adverse effect on
the Company's business, results of operations and financial condition. If
additional funds are raised through the issuance of equity securities, the
percentage ownership of the Company's then-current stockholders would be
diluted.

There can be no assurance that the Company will be able to raise any required
capital necessary to achieve its targeted growth rates and future continuance on
favorable terms or at all.

SUBSEQUENT EVENT

On August 11, 2004 (with an effective date of June 1, 2004) the Company entered
into a stock purchase agreement with the sole shareholder of a privately held
company engaged in the business of selling and distributing electronic products.
The principal terms of the agreement provide for the Company to acquire all of
the issued and outstanding shares of the acquired entity for a purchase price of
$1,500,000 plus the issuance of 1,000,000 restricted common stock shares in the
acquiring entity. Additional considerations included in this stock purchase
agreement require the Company to collateralize an existing line of credit in the
amount of $2,500,000 as well as retain the services of the selling shareholder,
pursuant to a consulting agreement dated August 11, 2004, for a term consistent
with the fulfillment of the stock purchase agreement. The Company, at time of
closing, gave their initial deposit of $350,000, but has defaulted on the
remaining balance due and is also in default of the collateralization provision.
Currently, management is negotiating with the seller in an attempt to cure the
default and/or rescind the transaction. Management believes that the ultimate
resolution of this default may have a material adverse effect on Video Without
Boundaries, Inc. financial condition, results of operations and liquidity.

SUBSEQUENT EVENT

On August 11, 2004 (with an effective date of June 1, 2004) the Company entered
into a stock purchase agreement with the sole shareholder of a privately-held
company engaged in the business of selling and distributing electrical products.
The principal terms of the agreement provide for the Company to acquire all of
the issued and outstanding shares of the acquired entity for a purchase price of
$1,500,000 plus the issuance of 1,000,000 restricted common stock shares in the
acquiring entity. Additional considerations included in this stock purchase
agreement require the Company to collateralize an existing line of credit in the
amount of $2,500,000 as well as retain the services of the selling shareholder,
pursuant to a consulting agreement dated August 11, 2004, for a term consistent
with the fulfillment of the stock purchase agreement. The Company, at time of
closing, gave their initial deposit of $350,000, but has defaulted on the
remaining balance due and is also in default of the collateralization provision.
Currently, management is negotiating with the seller in an attempt to cure the
default. In the event that a resolution of the default is not successful then
the acquisition will be rescinded and the deposit forfeited. Management believes
that this would have a material adverse effect on the Company's financial
statements. In addition, previously filed financial statements reflecting
consolidated operations would require restatement.

ITEM 7.  FINANCIAL STATEMENTS

The Company's financial statements and the notes thereto appear on pages F-1
through F-15 of this report.

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

None

ITEM 8A.  CONTROLS AND PROCEDURES

The Company's principal executive, financial and accounting officer evaluated
the effectiveness of the design and operation of the Company's disclosure
controls and procedures as of the end of the period covered by this annual
report, as amended. Based on the evaluation, such person concluded that the
Company's disclosure controls and procedures as of the end of the period covered
by this annual report, as amended, have been designed and are functioning
effectively to provide reasonable assurance that the information required to be
disclosed by the Company in reports filed under the Securities Exchange Act of
1934, is recorded, processed, summarized and reported within the time period
specified in the SEC's rules and forms. There have been no changes in our
internal controls or in other factors that could significantly affect internal
controls that occurred during the fiscal year ending December 31, 2003, except
as follows; subsequent to the audit of the fiscal year ending December 31, 2003,
the Company has retained the services of two consultants with substantial
auditing, accounting and business experience. Their services are expected to
enhance our controls and procedures as we begin to maintain and ship products.
The Company believes that a control system, no matter how well designed and
operated, cannot provide absolute assurance that all control issues and
instances of fraud, if any, within a company have been detected.

ITEM 8B.

Not applicable.

                                       11

<PAGE>

                                    PART III

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

Directors and Executive Officers as of December 31, 2003. The following are the
Directors and Executive Officers of the Company. None of the Directors hold
similar positions in any reporting company. The Directors named below will serve
until the next annual meeting of the Company's stockholders. Thereafter,
Directors will be elected for one-year terms at the annual stockholders'
meeting.

V. Jeffrey Harrell, age 38, is the Chairman of the Board, President, CEO,
Principal Financial and Accounting Officer, and Secretary of the Company and has
held these positions since December 1999. Mr. Harrell joined the Company from
the financial services industry where he worked as Vice President and partner.
Previously he worked as Director of IT and Cost Accountant for two major
manufacturers.

The Company has not adopted yet the code of ethics for its Officers but intends
to adopt code of ethics at its meeting of the Board of Directors in the near
future.

ITEM 10.  EXECUTIVE COMPENSATION

The Company paid the following salaries to its executives:

                                            2001           2002         2003
                                            ----           ----         ----
V. Jeffrey Harrell,                         $32,600        $29,025      $32,250
President, CEO, and
Chairman of the Board

None of the executives received any stock options or stock dividends. The above
executive did not received reimbursement for health insurance. The director was
not compensated for any Board of Directors meetings.

ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

As of December 31, 2003, the Company had 15,448,747 shares of its Common Stock
issued and outstanding. The following table sets forth, as of December 31, 2003,
the beneficial ownership of the Company's Common Stock (i) by the only persons
who are known by the Company to own beneficially more than 5% of the Company's
Common Stock; (ii) by each director of the Company; and (iii) by all directors
and officers as a group.

                  Name and                     Amount
                  Address of                     of
Title of          beneficial                  beneficial       Percent of
Class             owner                         owner            class
-----             -----                         -----            -----

Common         V. Jeffrey Harrell             1,523,440           9.9%
               PO Box 30057
               Ft. Lauderdale, FL 33303

                                       12

<PAGE>

ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The director named above will serve until the next annual meeting of the
Company's stockholders. Thereafter, directors will be elected for one-year terms
at the annual stockholders' meeting. Officers will hold their positions at the
pleasure of the board of directors, absent any employment agreement, of which
none currently exists or is contemplated. There is no arrangement or
understanding between any of the directors or officers of the Company and any
other person pursuant to which any director or officer was or is to be selected
as a director or officer.

None of the executives received any stock options or stock dividends. The
executive did not receive reimbursement for health insurance as part of
compensation. The directors were not compensated for any Board of Directors
meetings.

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

(a) The Exhibits listed below are filed as part of this Annual Report.

3.1      Articles of Incorporation (incorporated by reference from Registration
         Statement on Form 10SB filed with the Securities and Exchange
         Commission under File No. 0-31497 filed 09/11/00)

3.2      Amended Articles of Incorporation (incorporated by reference from
         Registration Statement on Form 10SB filed with the Securities and
         Exchange Commission under File No. 0-31497 filed 09/11/00)

3.3      Bylaws (incorporated by reference from Registration Statement on Form
         10SB filed with the Securities and Exchange Commission under File No.
         0-31497 filed 09/11/00)

10.1     Office Lease (incorporated by reference from Registration Statement on
         Form 10SB Amendment #1 filed with the Securities and Exchange
         Commission under File No. 0-31497 filed 11/06/00)

10.2     Office Lease (incorporated by reference from Registration Statement on
         Form 10SB Amendment #1 filed with the Securities and Exchange
         Commission under File No. 0-31497 filed 11/06/00)

10.3     Office Lease (incorporated by reference from Annual Report filed with
         the Securities and Exchange Commission under File No. 0-31497 filed
         06/28/02)

10.4     Office Lease (incorporated by reference from Annual Report filed with
         the Securities and Exchange Commission under File No. 0-31497 filed
         06/28/02)

10.5     Office Lease (incorporated by reference from Quarterly Report filed
         with the Securities and Exchange Commission under File No. 0-31497
         filed 05/15/03)

10.10    Executive Employment Contract - Pete Fisher (incorporated by reference
         from Registration Statement on Form 10SB Amendment #1 filed with the
         Securities and Exchange Commission under File No. 0-31497 filed
         11/06/00)

10.11    Executive Employment Contract - Jonathan Silverstein (incorporated by
         reference from Registration Statement on Form 10SB Amendment #1 filed
         with the Securities and Exchange Commission under File No. 0-31497
         filed 11/06/00)

31.1     Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1     Certification Pursuant to 18 USC Section 1350, Section 906 of the
         Sarbanes-Oxley Act of 2002

No reports on Form 8-K were filed by the Company during the third quarter of
it's fiscal year ending December 31, 2003.

                                       13

<PAGE>

                                  Signatures


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


                                            VIDEO WITHOUT BOUNDARIES, INC.

August 31, 2005                             By: /s/ V. JEFFREY HARRELL
                                            ---------------------------
                                            V. Jeffrey Harrell,
                                            President and Chief
                                            Executive Officer


















                                       14

<PAGE>

                         VIDEO WITHOUT BOUNDARIES, INC.

                              FINANCIAL STATEMENTS

                 FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002


                                    CONTENTS


                                                                         Page

Reports of Public Accounting Firms......................................F-1-F-2

Financial Statements:

  Balance Sheets..........................................................F-3

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

  Statement of Stockholders' Deficit......................................F-5

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

  Notes to Financial Statements........................................F-7-F-15
















                                      F-1

<PAGE>
                            BAUM & COMPANY, P.A.
                        1515 UNIVERSITY DRIVE, SUITE 209
                          CORAL SPRINGS, FLORIDA 33071

                          INDEPENDENT AUDITOR'S REPORT


Board of Directors
Video Without Boundaries, Inc.
888 Las Olas Boulevard, Suite 710
Ft. Lauderdale, Florida  33301

We have audited the accompanying balance sheets of Video Without Boundaries,
Inc. as of December 31, 2003 and 2002 and the related statements of
stockholders' (deficit), operations, and cash flows for the years ended December
31, 2003 and 2002. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audit.

We conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statement is free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statements presentation. We believe that our audit provides a
reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Video Without Boundaries, Inc.
as of December 31, 2003 and 2002 and the results of its operations and its cash
flows for the years ended December 31, 2003 and 2002 in conformity with
accounting principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 4 to the
financial statements, the Company has suffered recurring losses from operations
and has a net capital deficiency that raise substantial doubt about its ability
to continue as a going concern. Management's plans in regard to these matters
are also described in Note 4. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.

As discussed in Note 3 to the financial statements, the accompanying balance
sheets and related statements of stockholders' (deficit), operations, and cash
flows have been restated to reflect the proper accounting for certain
transactions which took place during the years ending December 31, 2003 and
2002.


                                                       /s/ Baum & Co.

Baum & Company, P.A.
Coral Springs, Florida
August 31, 2005



                                      F-2
<PAGE>
                         VIDEO WITHOUT BOUNDARIES, INC.
                                 BALANCE SHEETS
                                   DECEMBER 31
<TABLE>
<CAPTION>
                                ASSETS
                                                                             2003             2002
                                                                         ------------     -----------
                                                                         Restated (1)
<S>                                                                      <C>              <C>
 Current assets:
     Cash  and cash equivalents                                          $        20      $    12,047
     Accounts receivable, net of allowance for doubtful accounts of
              $-0- in 2003 and 2002, respectively                                 --              621
     Inventory                                                                 3,250               --
     Loans receivable, net of provision for bad debts of
       $70,000 in 2003 and 2002, respectively                                     --           10,000
                                                                         -----------      -----------

         Total current assets                                                  3,270           22,668
                                                                         -----------      -----------

  Property and equipment, net                                                514,553           82,220
                                                                         -----------      -----------

 Other assets:
     Investments (at cost), net of allowance for decline in value of
       $93,000 and $-0- in 2003 and 2002, respectively                            --               --
     Deposits                                                                  1,850               --
                                                                         -----------      -----------

                                                                               1,850               --
                                                                         -----------      -----------

         Total assets                                                    $   519,673      $   104,888
                                                                         ===========      ===========

               LIABILITIES AND STOCKHOLDERS' DEFICIT

Current liabilities:
     Checks drawn in excess of bank balance                                    2,693               --
     Accounts payable trade                                                  224,762           85,374
     Accrued salary to president                                             238,725          120,975
     Notes payable and accrued interest - shareholders'                      903,661          510,926
     Notes payable  and accrued interest                                      37,900           54,300
                                                                         -----------      -----------

         Total current liabilities                                         1,407,741          771,575
                                                                         -----------      -----------


 Stockholders' deficit:
       Common stock - $.001 par value, 50,000,000 shares authorized,
          15,448,747 and  119,087 shares issued and outstanding at
          December 31, 2003 and 2002, respectively                            15,449              119
       Additional paid-in capital                                          3,152,679        1,519,138
       Accumulated deficit                                                (4,056,196)      (2,185,944)
                                                                         -----------      -----------

         Total stockholders' deficit                                        (888,068)        (666,687)
                                                                         -----------      -----------

         Total liabilities and stockholders' deficit                     $   519,673      $   104,888
                                                                         ===========      ===========
</TABLE>

(1) See note 3 - restatement of financial statements

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


                                      F-3
<PAGE>
                         VIDEO WITHOUT BOUNDARIES, INC.
                            STATEMENTS OF OPERATIONS
                 FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002
<TABLE>
<CAPTION>
                                                         2003             2002
                                                     ------------     -----------
                                                     Restated (1)
<S>                                                  <C>              <C>
Sales                                                $     1,770      $     5,621

Cost of sales                                              1,046            3,921
                                                     -----------      -----------

         Gross profit                                        724            1,700
                                                     -----------      -----------


Operating expenses:
     Selling, general and administrative                 936,153          950,737
     Depreciation                                        234,527           18,081
     Research and development                             40,000           46,062
     Loss due to decline in value of investments          93,000               --
     Interest and financing expense                      567,296           41,522
                                                     -----------      -----------

                                                       1,870,976        1,056,402
                                                     -----------      -----------

Net loss                                             $(1,870,252)     $(1,054,702)
                                                     ===========      ===========



Basic and fully diluted loss per share               $     (0.47)     $    (17.31)
                                                     ===========      ===========


Weighted-average number of shares
     used in computing per share amounts               3,996,667           60,925
                                                     ===========      ===========
</TABLE>

 (1) See note 3 - restatement of financial statements

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

                                      F-4
<PAGE>
                         VIDEO WITHOUT BOUNDARIES, INC.
                       STATEMENTS OF STOCKHOLDERS' DEFICIT
                 FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002
                                  Restated (1)
<TABLE>
<CAPTION>
                                                             COMMON STOCK            ADDITIONAL
                                                      --------------------------       PAID-IN       ACCUMULATED
                                                        SHARES          AMOUNT         CAPITAL         DEFICIT           TOTAL
                                                      ----------     -----------     -----------     -----------      -----------
<S>                                                   <C>            <C>             <C>             <C>              <C>
Balance December 31, 2001                                  2,762     $         3     $   431,205     $(1,131,242)        (700,034)

Stock issued for services                                 78,035              78         261,922              --          262,000

Stock issued for convertible debentures and
     related accrued interest                             34,123              34         526,515              --          526,549

Stock issued for cash                                      2,500               3          37,497              --           37,500

Stock issued for loans receivable                          1,667               1          24,999              --           25,000

Accounting recognition of  beneficial conversion
      feature on debentures                                   --              --         237,000              --          237,000

Net loss for the year                                         --              --              --      (1,054,702)      (1,054,702)
                                                      ----------     -----------     -----------     -----------      -----------

Balance December 31, 2002                                119,087             119       1,519,138      (2,185,944)        (666,687)

Stock issued for services                                885,000             885         249,115              --          250,000

Stock issued for development of software                 200,000             200         159,800              --          160,000

Stock issued for convertible debentures and
     related accrued interest                            949,660             950         754,970              --          755,920

Notes payable to stockholders' contributed
     as capital                                       12,795,000          12,795         220,156              --          232,951

Stock issued for purchase of web portal                  500,000             500         249,500              --          250,000

Net loss for the year                                         --              --              --      (1,870,252)      (1,870,252)
                                                      ----------     -----------     -----------     -----------      -----------

Balance December 31, 2003                             15,448,747     $    15,449     $ 3,152,679     $(4,056,196)     $  (888,068)
                                                      ==========     ===========     ===========     ===========      ===========
</TABLE>

(1) See note 3 - restatement of financial statements

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

                                      F-5
<PAGE>
                            VIDEO WITHOUT BOUNBARIES

                            STATEMENTS OF CASH FLOWS

                 FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002


<TABLE>
<CAPTION>

                                                                                         2003            2002
                                                                                      -----------    -----------
                                                                                      Restated (1)
<S>                                                                                   <C>            <C>
Cash flows from operating activities:
    Net loss                                                                          $(1,870,252)   $(1,054,702)
    Adjustments to reconcile net loss to net cash
        used in operating activities:
            Depreciation                                                                  234,527         18,081
            Bad debts                                                                        --           95,000
            Interest on debentures converted to stock                                      14,460         36,049
            Interest on shareholder loans and notes payable                                55,376          3,300
            Interest and discount accretion on convertible debentures                     496,460           --
            Selling, general and administrative expenses                                  348,233           --
            Loss due to decline in value of investments                                    93,000           --
            Stock issued for services                                                     250,000        262,000
           Change in assets and liabilities
                           (Increase) decrease in accounts receivable                         621           (621)
                           (Increase) in inventories                                       (3,250)          --
                           (Increase) decrease in other assets                             (1,850)        50,950
                           Increase in checks drawn in excess of bank balance               2,693           --
                           Increase (Decrease) in accounts payable                        139,388        (84,050)
                           Increase in accrued salary to president                        117,750        120,975
                                                                                      -----------    -----------

                                       Net cash used in operating activities             (122,844)      (553,018)
                                                                                      -----------    -----------

Cash flows from investing activities:

    Purchases of stock in closely held corporation                                        (93,000)          --
    Purchases of property, plant and equipment                                           (246,860)        (8,803)
                                                                                      -----------    -----------

                                        Net cash used in investing activities            (339,860)        (8,803)
                                                                                      -----------    -----------

Cash flows from financing activities:

    Proceeds from shareholder loans                                                       269,050        301,240
    Repayment of shareholder loans                                                        (43,373)          --
    Advances of loans receivable                                                             --          (80,000)
    Proceeds from issue of debentures                                                     245,000        298,000
    Payment of notes payable                                                              (20,000)        (5,000)
    Proceeds from issuance of stock                                                          --           37,500
                                                                                      -----------    -----------

                                          Net cash provided by financing activities       450,677        551,740
                                                                                      -----------    -----------

Net decrease in cash and cash equivalents                                                 (12,027)       (10,081)

Cash and cash equivalents at beginning of year                                             12,047         22,128
                                                                                      -----------    -----------

Cash and cash equivalents at end of year                                              $        20    $    12,047
                                                                                      ===========    ===========

</TABLE>

(1) See note 3 - restatement of financial statements

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


                                      F-6
<PAGE>
                         VIDEO WITHOUT BOUNDARIES, INC.
                          NOTES TO FINANCIAL STATEMENTS
                 FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002


NOTE 1 - BUSINESS DESCRIPTION

Video Without Boundaries, Inc. ("the Company ") or ("VWB") is in the converging
digital media on demand, enhanced home entertainment and emerging interactive
consumer electronics markets. VWB is focused on home entertainment media
products and solutions that enhance the consumer experience, while providing new
revenue opportunities for online music and movie content providers. VWB, is a
leading supplier of broadband products, services and content including its
ability to deliver broadcast quality digital video and web interactivity at
transfer rates as low as 56K.


NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BASIS OF PRESENTATION

The Company was incorporated in the State of Florida, on March 19, 1999 under
the name of ValuSALES.com, Inc. The company changed its name to Video Without
Boundaries, Inc. on November 16, 2001.

REVENUES

The Company recognizes revenues on product sales when the product is shipped and
title has passed to customer. Service revenue is recognized when the services
are performed.

USE OF ESTIMATES

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

INVENTORY

Inventory is valued using the first-in, first-out method of accounting and is
stated at the lower of cost or net realizable value.


PROPERTY AND EQUIPMENT

Property and equipment is recorded at cost, net of accumulated depreciation,
which is provided for by a charge to operations over the estimated useful life
of the assets using the straight-line method. The useful life of the assets is
3-4 years.

                                      F-7

<PAGE>

Expenditures that extend the useful life of the respective assets are
capitalized and depreciated over the lives of the respective assets.
Maintenance, repairs and other expenses that do not extend their useful life are
expensed as incurred.

FINANCIAL INSTRUMENTS

The Company's financial instruments are cash, accounts receivable, loans
receivable, accounts payable, accrued expenses, and notes payable.The recorded
values of cash, accounts receivable, loans receivable, accounts payable, and
accrued expenses approximates their fair values based on their short-term
nature. The fair value of notes payable is based on current rates at which the
Company could borrow funds with similar remaining maturities, and the carrying
amount approximates fair value.

INCOME TAXES

The Company follows Statement of Financial Accounting Standards No. 109
"Accounting for Income Taxes" (SFAS No. 109). Under the asset and liability
method of SFAS No. 109, deferred tax assets and liabilities are recognized for
the future tax consequences attributed to differences between the financial
statement carrying amounts of existing assets and liabilities and their
respective tax base. Deferred tax assets and liabilities are measured using
enacted tax rates expected to apply to taxable income in the years in which
those temporary differences are expected to be recovered or settled. Under SFAS
No. 109, the effect on deferred tax assets and liabilities of a change in tax
rates is recognized in income in the period that includes the enactment date. If
it is more likely than not that some portion of a deferred tax asset will not be
realized, a valuation allowance is recognized.

CONVERTIBLE DEBENTURES

Convertible debentures with beneficial conversion features, are accounted for in
accordance with guidance supplied by Emerging Issues Task Force ("EITF") No 98-5
"Accounting for Convertible Securities with Beneficial Conversion Features or
Contingently Adjustable Conversion Ratios" and EITF No. 00-27 "Application of
Issue 98-5 to Certain Convertible Instruments."

In addition, since the debt is convertible into equity at the option of the note
holder at the date of issuance at beneficial conversion rates, an embedded
Beneficial Conversion Feature ("BCF") has been recorded as discount against the
debentures in the accompanying balance sheet and as an increase to additional
paid-in capital at the time of issuance.

For convertible debt, the recorded debt discount is calculated at the issuance
date as the difference between the conversion price and the relative fair value
of the common stock into which the security is convertible. The discount has
been accredited through interest and financing costs during 2003.

CASH AND CASH EQUIVALENTS

The Company considers all highly liquid investments with original maturities of
three months or less to be cash equivalents.

                                      F-8

<PAGE>

CONCENTRATION OF CREDIT RISK

Financial instruments that potentially subject the Corporation to concentration
of credit risk consist primarily of accounts receivable. The Company believes
that it is not exposed to any significant credit risk on accounts receivable.

NOTE 3 - RESTATEMENT OF FINANCIAL STATEMENTS

The restatement was undertaken due to the auditor of the 2003 fiscal year not
having been registered with the PCAOB at the time of the original Form 10-KSB
filing on April 14, 2004. The restatement corrects the accounting of the
following transactions:


(1)      reversal of sales and cost of sales where ownership of the product had
         not passed (2) reversal of sales and cash-in-transit entry incorrectly
         made (3) reclassification of the purchase of a web portal and media
         ready software to property and equipment (4) increase in depreciation
         expense on property and equipment (5) reclassification of a loan
         receivable to investments and subsequent provision for decline in value
         (6) provision for bad debts against loan receivable (7) expensing a
         prepayment to research and development (8) revision of the interest
         charge on shareholder loans (9) reversal of expenses charged to the
         Company by a shareholder (10) accrual for salary to president (11)
         revision of interest on third party loans (12) booking of financing
         expense to recognize the beneficial conversion feature of convertible
         debentures, and revision of interest expense (13) correction to
         classifications of various operating costs.

The components of the restatement are explained in the notes below the table.
<TABLE>
<CAPTION>

                                                                   Adjustment to
                                                     As filed        restate        Restated
                                                     --------        -------        --------
<S>                                                <C>             <C>            <C>
Balance sheet data as at December 31, 2003
  Cash(a)                                           $    73,912    $   (73,892)   $        20
  Accounts receivable (b)                               300,000       (300,000)          --
  Property and equipment (b) (c)                         94,198        420,355        514,553
  Investments (d)                                          --             --             --
  Deposit (d)                                           163,000       (163,000)          --
  Media ready software (c)                              198,668       (198,668)          --
  Prepaid box tooling (e)                                40,000        (40,000)          --
  Notes payable shareholders (a)                      1,238,258       (334,597)       903,661
  Checks drawn in excess of bank balance (a)               --            2,693          2,693
  Accrued salary to president (g)                          --          238,725        238,725
  Interest payable (h)                                    7,301         (7,301)          --
  Notes payable (i)                                      30,000          7,900         37,900
  Additional paid-in capital (j)                      2,789,851        362,828      3,152,679
  Accumulated deficit (a) (c) (d) (e) (f) (g) (h)    (3,430,750)      (625,446)    (4,056,196)
                                    (i) (j)
</TABLE>


                                      F-9

<PAGE>

<TABLE>
<CAPTION>
<S>                                                <C>             <C>          <C>

Statement of operations for the year ended
December 31, 2003
  Revenues (a)                                      $   190,770    $  (189,000)   $     1,770
  Cost of sales (a)                                     176,046       (175,000)         1,046
  Selling, general and administrative (f) (g) (k)     1,277,027       (340,874)       936,153
                                       (l)
  Depreciation (c)                                         --          234,527        234,527
  Research and development (e)                             --           40,000         40,000
  Loss due to decline in value of investments (d)          --           93,000         93,000
  Interest and finance expense  (f) (h) (i) (j)            --          567,296        567,296

  Net loss                                           (1,262,302)      (607,950)    (1,870,252)
  Basic and fully diluted loss per share                  (0.32)         (0.15)         (0.47)
</TABLE>


As a consequence of changes made to the balance sheet and statement of
operation, as noted above, the statement of cash flows and changes in
stockholders' equity have been restated accordingly.

     a) Cash

     The Company identified an amount of $14,000 that had incorrectly been
     booked to cash-in-transit. This comprised sales and cost of sales of
     $189,000 and $175,000, respectively. It was determined that ownership of
     the product had not passed. The Company has reversed this entry to sales
     and cost of sales for the year ended December 31, 2003 and reversed the net
     entry of $14,000 to cash-in-transit at December 31, 2003.

     The Company has reclassed checks drawn in excess of the bank balance
     totaling $2,693 as a liability.

     The Company identified an incorrect entry of $62,585 to cash-in-transit and
     shareholders funds. This entry has been reversed at December 31, 2003.

     b) Accounts Receivable

     The Company discovered that the purchase of a web portal had been recorded
     as an accounts receivable. This asset, totaling $300,000 has now been
     reclassed to property and equipment.

     c) Property and Equipment

     The Company has booked depreciation on a web portal of $75,000 (see note b)
     in order to write off this asset on a straight line basis over its useful
     life. Accordingly, depreciation expense has been increased by $75,000 for
     the year ended December 31, 2003 with a corresponding increase in
     accumulated depreciation of $75,000 at December 31, 2003.

     The Company has booked additional depreciation on computer hardware
     totaling $19,527 in order to write off this asset on a straight line basis
     over its useful life. Accordingly, depreciation expense has been increased
     by $19,527 for the year ended December 31, 2003, with a corresponding
     increase in accumulated depreciation at December 31, 2003. The Company had
     also revised its charge for depreciation on this asset in the year ended
     December 31, 2002 which resulted in a reduction in depreciation during 2002
     of $16,214.


                                      F-10

<PAGE>

     The Company has reclassed media ready software totaling $198,668 to
     property and equipment.

     d) Investments

     The Company has reviewed the classification of a deposit of $163,000 with
     CAC Media and has determined that the correct accounting treatment is to
     show this amount as an investment in CAC Media. The Company additionally
     reviewed the investment for possible impairment and has decided to provide
     for a decline in value of $163,000.

     e) Prepaid Box Tooling

     Management has reviewed the prepaid box tooling asset and determined that
     this meets the criterion of a research and development expenditure.
     Accordingly, the amount of $40,000 has been expensed to research and
     development in the year ended December 31, 2003.

     f) Notes Payable and Accrued Interest - Shareholders

     An incorrect entry to cash-in-transit and shareholder funds has been
     reversed (see note a).

     It was determined that interest had not been properly accrued on the
     shareholder loans at the rate of 8% per annum, as stipulated in the
     relevant agreements. Accordingly, the Company has booked an additional
     amount of $9,621 as interest expense for the year ended December 31, 2003
     with a corresponding increase in the liabilities on shareholder loans of
     $9,621 at December 31, 2003.

     Management has reviewed the documentation relating to expenses paid on
     behalf of the Company by a major shareholder. Due to the inability of the
     shareholder to produce suitable documentation to support the expenses paid
     on behalf of the Company, and reflected as shareholder loans, the amount
     due to the shareholder has been reversed by the Company. Accordingly, the
     liabilities to the shareholders' has been reduced by $9,536 at December 31,
     2003 with a corresponding reduction in selling, general and administrative
     expenses of $9,536 for the year ended December 31, 2003.

     The liability on shareholder loans was reduced by $252,854 at December 31,
     2002 due to a restatement of the financial statements for the 2002 year.

     g) Accrued Salary to President

     Management has accrued the salary of the President which resulted in an
     increase in salary expense totaling $117,750 for the year ended December
     31, 2003 and a corresponding increase in accrued salary to president of
     $117,750 at December 31, 2003.

     The Company recorded an accrual for the president's salary of $120,975 at
     December 31, 2002 due to a restatement of the financial statements for
     2002. This has resulted in a total liability for accrued salary to
     president of $238,725 at December 31, 2003.
<PAGE>

     h) Interest Payable

     An entry to reduce accrued interest on debentures and increase interest
     payable totaling $5,400 has been reversed.

     The Company determined that accrued interest totaling $1,900 had been
     incorrectly recorded. Accordingly, interest expense for the year ended
     December 31, 2003 was reduced by $1,901 with a corresponding reduction in
     the accrual of $1,900 at December 31, 2003.

     i) Notes Payable and Accrued Interest

     Management determined that interest had to be recognized totaling $3,600 on
     a third party note. Accordingly, interest expense for the year ended
     December 31, 2003 was increased by $3,600 with a corresponding increase in
     the accrual for notes payable and interest of $3,600 at December 31, 2003.

     The Company recorded an accrual for third party interest totaling $4,300 at
     December 31, 2002 due to a restatement of the financial statements for that
     year. This has resulted in an increase in the accrual for notes payable and
     accrued interest of $4,300 at December 31, 2003.

     j) Additional Paid-In Capital

     The Company completed a review of all debenture documents relating to the
     issuance of convertible debentures which revealed that the Company had not
     properly accounted for the beneficial conversion feature contained within
     each debenture. Accordingly, the Company has booked a financing expense
     totaling $496,460 to recognize the accretion of the debt discount which
     resulted from the beneficial conversion feature, with a corresponding
     increase in additional paid-in capital of $496,460 at December 31, 2003.

     The Company recognized the discount in the debentures at December 31, 2002
     with a total of $237,000 being moved from convertible debentures to
     additional paid-in capital, as part of a restatement of the financial
     statements for 2002. The Company had initially, booked this entry in 2003
     and the restatement of the financial statements for 2002 has now resulted
     in a reversal of the 2003 entry.

     Due to a restatement of the 2002 financial statements the Company had
     increased additional paid-in capital by $103,368 including the correction
     of $237,000 relating to the convertible debentures mentioned above. These
     corrections have also caused an increase in additional paid-in capital at
     December 31, 2003.

     k) Other Reclassifications

     Management has evaluated the nature of the expenses previously classified
     in the statement of operations and determined that the following
     reclassifications are required:

     Depreciation of $234,527 had been included with selling, general and
     administrative expenses and this has now been reclassed to a separate line
     item.

                                      F-11


<PAGE>

     Interest expense of $60,033 had been included with selling, general and
     administrative expenses and this has now been reclassed to a separate line
     item.

     l) Selling, General and Administrative

     During its revision of the 2002 financial statements the Company wrote off
     an investment in Cornerstone Entertainment totaling $210,871. This write
     off had initially taken place in 2003 and this write off has now been
     reversed in the current year. The result of the adjustment is to reduce
     selling, general and administrative expenses by $210,871 for the year ended
     December 31, 2003.

     During its revision of the 2002 financial statements the Company wrote off
     a $25,000 receivable as a bad debt. This write off had initially taken
     place in 2003 and this write off has now been reversed in the current year.
     The result of the adjustment is to reduce selling, general and
     administrative expenses by $25,000 for the year ended December 31, 2003.

NOTE 4 - GOING CONCERN

The accompanying financial statements have been prepared on a going concern
basis. The Company has generated minimal revenue since its inception and has
incurred net losses of approximately $4.1 million. The Company's ability to
continue as a going concern is dependent upon its ability to obtain the
necessary financing to meet its obligations and repay its liabilities arising
from normal business operations when they become due, to fund possible
acquisitions, and to generate profitable operations in the future. While the
Company has sustained losses, certain current shareholders' of the Company have
committed to fund the operational needs of the Company. Additionally, management
plans to continue to provide for its capital requirements by issuing additional
equity securities and debt. The outcome of these matters cannot be predicted at
this time and there are no assurances that if achieved, the Company will have
sufficient funds to execute its business plan or generate positive operating
results.

These matters, among others, raise substantial doubt about the ability of the
Company to continue as a going concern. These financial statements do not
include any adjustments to the amounts and classification of assets and
liabilities that may be necessary should the Company be unable to continue as a
going concern.

NOTE 5 - ACCOUNTS RECEIVABLE

Accounts receivable consist of the following:

                                                          2003             2002
                                                          ----             ----

Trade receivables                                         $ --             $621
                                                          ====             ====


NOTE 6 - LOANS RECEIVABLE

The Company loaned $10,000 to an unrelated organization to provide financing for
the development of a software browser. The loan was non-interest bearing,
non-collateralized and repayable on demand. The loan has been reclassified to
property and equipment at December 31, 2003.

                                      F-12

<PAGE>

The Company loaned $70,000 to an unrelated organization under a bridge financing
agreement. The loan was non-interest bearing, non-collateralized and payable on
demand. A bad debt provision ws made against this receivable at December 31,
2002.


NOTE 7 - PROPERTY AND EQUIPMENT

Property and equipment consists of the following:


                                                      2003               2002
                                                    ---------         ---------
Computer equipment                                  $ 150,027         $ 145,980
Software                                              360,603              --
Web portal                                            300,000              --
Furniture and equipment                                 2,210              --
                                                    ---------         ---------
                                                      812,840           145,980
Less accumulated depreciation                        (298,287)          (63,760)
                                                    ---------         ---------

                                                    $ 514,553         $  82,220
                                                    =========         =========

For the years ended December 31, 2003 and 2002, depreciation totaled $234,527
and $18,081, respectively.

On June 14, 2004 the web portal was sold to a major stockholder of the Company
for $300,000.

NOTE 8 - NOTES PAYABLE

The Company is obligated to two shareholders for $903,661 advanced to fund
operations. The notes are collateralized by the assets of the Company, bear
interest at 8% per annum and are repayable on demand. During the years ended
December 31, 2003 and 2002, the Company incurred interest on these notes
totaling $51,776 and $18,035, respectively.

The Company has an obligation for money due to two former debenture holders
totaling $37,900 who have elected not to convert debentures into common stock.
The notes are non-collateralized, bearing interest at 12% per annum and
repayable on demand. During the years ended December 31, 2003 and 2002, the
Company incurred interest on these notes totaling $3,600 and $3,300,
respectively.

NOTE 9 - CONVERTIBLE DEBENTURES

During 2001 through 2003 the Company issued convertible debentures in the
amounts of $268,000 and $482,000, respectively. The debentures mature 90 days
after issuance, with interest accruing at the rate of 12% per annum. The 2001
issuance entitles the holder of each debenture to have the right at anytime
before maturity, to convert the principal and accrued interest into shares of
common stock of the Company at $0.05 per share. During 2002 the holders of the
2001 debenture issuance converted their debentures and associated interest into
stock amounting to $526,549.

The 2003 and 2002 issuances entitles the holder of each debenture to have the
right at anytime before maturity, to convert the principal and accrued interest
into shares of restricted common stock at 50% of the bid price of the stock. As
a consequence of the latter beneficial conversion feature the discount
associated with the conversion feature reduced the amounts due to the debenture
holders to zero at December 31, 2002. The recorded debt discount was calculated
as the difference between the conversion price and the relative fair value of
the common stock into which the security is convertible. During 2003 the holders
of the 2002 debenture issue converted their debentures and associated interest
and finance expense into stock amounting to $755,920.

                                      F-13

<PAGE>

NOTE 10 - STOCKHOLDERS' EQUITY

Effective September 13, 2002, the Company effectuated a one-for-three-hundred
reverse stock split. All share and per share data prior to that date has been
restated to reflect the split.


NOTE 11 - RELATED PARTIES

During 2003, the Company expensed an amount of $ 150,000 for the salary of the
President. At December 31, 2003 an amount of $238,725 was unpaid and has been
accrued.

Consulting services were provided to the Company by two major stockholders.
During the year ended December 31, 2003 the Company issued 12,795,000 post-
split shares of restricted common stock, valued at $232,951 to two organizations
affiliated with these stockholders.


NOTE 12 - SUPPLEMENTAL CASH FLOW INFORMATION

<TABLE>
<CAPTION>

                                                                         2003         2002
                                                                     ------------    -------

<S>                                                                 <C>             <C>
Supplemental Disclosure of Cash Flow Information:

     Cash paid during the period for interest                        $        --     $   --
                                                                     =============   ========

     Cash paid during the period for income tax                      $        --     $   --
                                                                     =============   ========


Non-cash movements affecting investing and financing transactions:

     Stock issued for services                                       $     250,000   $262,000
                                                                     =============   ========
     Stock issued for convertible debentures                         $     755,920   $526,549
                                                                     =============   ========
     Stock issued for development of software                        $     160,000   $   --
                                                                     =============   ========
     Notes payable to stockholders' contributed as capital           $     232,951   $   --
                                                                     =============   ========
     Stock issued for purchase of web portal                         $     250,000   $   --
                                                                     =============   ========
</TABLE>


NOTE 13 - INCOME TAXES

The provision for federal income taxes as of December 31, 2003 and 2002 consists
of the following:

                                                     2003                2002
                                                  ---------           ---------
Current (benefit)                                 $(564,231)          $(293,667)
Valuation allowance                                 564,231             293,667
                                                  ---------           ---------

                                                  $    --             $    --
                                                  =========           =========

                                      F-14

<PAGE>

Deferred income taxes reflect the net tax effect of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes. Significant components of
the net deferred taxes, at December 2003 and 2002 are as follows:

                                                     2003               2002
                                                 -----------        -----------

Deferred tax assets:
Net operating loss carryforward                  $(1,228,462)       $  (664,231)
Valuation allowance                                1,228,462            664,231
                                                 -----------        -----------

                                                 $      --          $      --
                                                 ===========        ===========

SFAS No. 109 requires a valuation allowance to reduce the deferred tax assets
reported, if any, based on the weight of the evidence, it is more likely than
not that some portion or all of the deferred tax assets will not be realized.
Management has determined that a valuation allowance of $1,228,462 and $664,231
at December 31, 2003 and 2002 respectively, is necessary to reduce the deferred
tax assets to the amount that will more likely than not be realized. The change
in the valuation allowance during the years ended December 31, 2003 and 2002 was
$564,231 and $293,667, respectively.

The Company has incurred net operating losses since inception. At December 31,
2003 and 2002, the Company had a net operating loss carryforward for tax
purposes amounting to approximately $3.7 million and $2.1 million, respectively.
Tax losses will begin expiring in the year 2019.

The federal statutory tax rate reconciled to the effective tax rate during the
years ended December 31, 2003 and 2002 is as follows:

                                                             2003         2002
                                                             ----         ----

Tax at U.S. statutory rate                                   35.0%        35.0%
State tax rate, net of federal benefits                       5.5%         5.5%
Change in valuation allowance                               (40.5)%      (40.5%)
                                                             ----         ----

Effective tax rate                                            0.0%         0.0%
                                                             ====         ====

NOTE 14 - SUBSEQUENT EVENT

On August 11, 2004 (with an effective date of June 1, 2004) the Company entered
into a stock purchase agreement with the sole shareholder of a privately-held
company engaged in the business of selling and distributing electrical products.
The principal terms of the agreement provide for the Company to acquire all of
the issued and outstanding shares of the acquired entity for a purchase price of
$1,500,000 plus the issuance of 1,000,000 restricted common stock shares in the
acquiring entity. Additional considerations included in this stock purchase
agreement require the Company to collateralize an existing line of credit in the
amount of $2,500,000 as well as retain the services of the selling shareholder,
pursuant to a consulting agreement dated August 11, 2004, for a term consistent
with the fulfillment of the stock purchase agreement. The Company, at time of
closing, gave their initial deposit of $350,000, but has defaulted on the
remaining balance due and is also in default of the collateralization provision.
Currently, management is negotiating with the seller in an attempt to cure the
default. In the event that a resolution of the default is not successful then
the acquisition will be rescinded and the deposit forfeited. Management believes
that this would have a material adverse effect on the Company's financial
statements. In addition, previously filed financial statements reflecting
consolidated operations would require restatement.


                                      F-15