EMERGING GAMMA CORPORATION
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                          NOTES TO FINANCIAL STATEMENTS
                          -----------------------------
                             MARCH 31, 2002 AND 2001
                             -----------------------

1.   DESCRIPTION OF ORGANIZATION:
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Emerging Gamma  Corporation (the "Company") was  incorporated  under the laws of
the State of  Delaware  on  February  10,  1993,  for the purpose of seeking out
business opportunities,  including acquisitions, that the Board of Directors, in
its discretion, believes to be good opportunities. Coincident with the formation
of the  Company,  three  similar  companies  were  formed,  managed  by the same
officers and directors, which are engaged in the same business. The Company will
be heavily dependent on the skills,  talents, and abilities of its management to
successfully implement its business plan. An affiliate of a director is expected
to be the source for most business  opportunities  submitted to the Company. Due
to its currently  limited funds,  it is likely that the Company will not be able
to compete with larger and more experienced entities for business  opportunities
which  are  less  risky  and are  more  attractive  to such  entities;  business
opportunities in which the Company ultimately participates will likely be highly
risky and speculative.

The  Company's  proposed  business is  sometimes  referred to as a "blind  pool"
because investors  entrust their investment  monies to the Company's  management
before they have a chance to authorize any ultimate use to which their money may
be directed.  Consequently, the Company's potential success is heavily dependent
on the Company's  management,  which will have virtually unlimited discretion in
searching for and entering into a business opportunity.

2.   SIGNIFICANT ACCOUNTING POLICIES:
     --------------------------------

The Company  considers  all highly liquid  investments  with a maturity of three
months or less when  purchased to be cash  equivalents.  At March 31, 2002,  all
cash was invested in a money market account.

The Company  follows the asset and liability  method of accounting  for deferred
income taxes prescribed by Statement of Financial  Accounting  Standards No. 109
"Accounting for Income Taxes".  The Statement  provides for the recognition of a
deferred tax asset for  deductible  temporary  timing  differences,  capital and
operating loss carryforwards,  and tax credit carryforwards, net of a "valuation
allowance".  The valuation  allowance is provided for that portion of the asset,
for which it is deemed more likely than not, that it will not be realized.

There are no temporary  differences between financial reporting and tax basis of
assets  and  liabilities.  The  Company  has  incurred  a  cumulative  loss from
operations  since  inception.  Therefore,  a full  valuation  allowance has been
provided  against the deferred tax asset  resulting  from the net operating loss
(NOL) carryforward. No benefit was provided for the net loss incurred in 2002 or
2001. The net operating loss  carryforward  at March 31, 2002 was  approximately
$7,700, approximately $6,600 of which will be available to offset future taxable
income over the next 20 years.

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The company  accounts for stock options is  accordance  with APB Opinion No. 25,
"Accounting for Stock Issued to Employees",  whereby no compensation  expense is
recognized upon grant. The fair value and other pro forma  disclosures  required
by  Statement  of  Financial  Accounting  Standards  No.  123,  "Accounting  for
Stock-based Compensation", have not been included in the financial statements as
such disclosures are not considered material to the financial statements.

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

3.   RELATED PARTY TRANSACTIONS:
     ---------------------------

Officers and  directors  will be  compensated  based on actual time and expenses
devoted to the  Company's  business.  During 2002 and 2001, a consulting  fee of
$750 per month was paid to the Company's Chief Financial Officer.

4.   STOCK OPTION PLAN:
     ------------------

The Company's  1993 Stock Option Plan (the "Plan")  provides for the issuance of
up to 2 million  shares of common  stock at no less than 85% of market  value at
the time of grant (for  non-qualified  options)  and no less than 110% of market
value for incentive stock options (110% if the optionee holds 10% or more of the
Company's  common  stock).  During 1993 the Company  granted  options to current
stockholders  to purchase 4,300 shares of common stock at $15 per share.  During
1994,  the Company  granted  options to a consultant to purchase 2,000 shares of
common stock at $12 per share. All of the options are currently  exercisable and
expire on December 31, 2002.  All options were excluded from the  computation of
diluted earnings per share because they were antidilutive.

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