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

                                   FORM 10-KSB

                 ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (D)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                     For the Fiscal Year Ended June 30, 2003

                          Commission File No. 000-30486

                   ADVANCED COMMUNICATIONS TECHNOLOGIES, INC.
             (Exact name of registrant as specified in its charter)

          FLORIDA                                       65-0738251
-------------------------------          ---------------------------------------
(State or other jurisdiction of          (I.R.S. employer identification number)
incorporation or organization)


                    420 LEXINGTON AVENUE, NEW YORK, NY 10170
                     (Address of principal executive office)

                                 (646) 227-1600
                         (Registrant's telephone number)

              SECURITIES REGISTERED UNDER SECTION 12(b) OF THE ACT:

                   TITLE OF EACH CLASS TO BE REGISTERED: NONE

           SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:

           COMMON STOCK, NO PAR VALUE, 5,000,000,000 SHARES AUTHORIZED

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

     Indicate by check mark if disclosure of delinquent  filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's  knowledge,  in definitive proxy or information  statements
incorporated  by reference  in Part III of this Form 10-KSB or any  amendment to
this Form 10-KSB.

<PAGE>

     The  aggregate  market  value as of October  1, 2003 of the  voting  common
equity held by non-affiliates is $552,311.

              APPLICABLE ONLY TO REGISTRANTS INVOLVED IN BANKRUPTCY
                     PROCEEDINGS DURING PRECEDING FIVE YEARS

     Indicate by checkmark  whether the  Registrant  has filed all documents and
reports to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act of
1934 subsequent to the  distribution  of securities  under a plan confirmed by a
court.

                             YES ____   NO ____

                    APPLICABLE ONLY TO CORPORATE REGISTRANTS

     Indicate  the  number of  shares  outstanding  of each of the  Registrant's
classes of common  stock,  as of the latest  practicable  date. As of October 1,
2003 there were  280,474,473  shares of the  Company's no par value common stock
issued and outstanding.

     This Form  10-KSB  contains  "forward-looking  statements"  relating to the
Registrant  which  represent the  Registrant's  current  expectations or beliefs
including,  but not limited to, statements concerning  Registrant's  operations,
performance,  financial  condition and growth.  For this purpose,  any statement
contained in this Form 10-KSB that are not  statements  of  historical  fact are
forward-looking  statements.  Without  limiting the generality of the foregoing,
words  such  as  "may",   "anticipation",   "intend",  "could",  "estimate",  or
"continue"  or the  negative or other  comparable  terminology  are  intended to
identify  forward-looking  statements.  These statements by their nature involve
substantial  risks and  uncertainties,  such as  credit  losses,  dependence  on
management and key personnel and  variability of quarterly  results,  ability of
Registrant to continue its growth strategy and competition, certain of which are
beyond  the  Registrant's  control.  Should  one  or  more  of  these  risks  or
uncertainties  materialize or should the underlying assumptions prove incorrect,
actual outcomes and results could differ  materially from those indicated in the
forward-looking statements.

                                       i
<PAGE>

                   ADVANCED COMMUNICATIONS TECHNOLOGIES, INC.
                                   FORM 10-KSB


                                TABLE OF CONTENTS

PART I.........................................................................1
        Item 1.  Business......................................................1
        Item 2.  Description Of Property.......................................2
        Item 3.  Legal Proceedings.............................................2
        Item 4.  Submission Of Matters To A Vote Of Security Holders...........3
PART II........................................................................4
        Item 5.  Market For Common Equity And Related Stockholder Matters......4
        Item 6.  Management's Discussion And Analysis Of Financial Condition
                 And Results Of Operations.....................................5
        Item 7.  Financial Statements.........................................12
        Item 8.  Changes In And Disagreements With Accountants On Accounting
                 And Financial Reporting......................................12
        Item 8A. Changes In And Disagreements With Accountants On Accounting
                 And Financial Reporting......................................12
PART III......................................................................13
        Item 9.  Directors and Executive Officers of the Registrant...........13
        Item 10. Executive Compensation.......................................15
        Item 11. Security Ownership Of Certain Beneficial Owners And
                 Management and Related Stockholder Matters...................15
        Item 12. Certain Relationships and Related Transactions...............16
        Item 13. Exhibits, Financial Statement Schedules and Reports on
                 Form 8-K.....................................................17
        Item 14. Principal Accountant Fees and Services.......................20
EXHIBIT 31.1......................................................EXHIBIT 31.1-1
EXHIBIT 32.1......................................................EXHIBIT 32.1-1
ADVANCED COMMUNICATIONS TECHNOLOGIES, INC. AND SUBSIDIARIES CONSOLIDATED
FINANCIAL STATEMENTS AS OF JUNE 30, 2003 AND 2002............................F-i
INDEPENDENT AUDITORS' REPORT...............................................F-iii

                                       ii
<PAGE>

                                     PART I


ITEM 1.  BUSINESS

     In April 1999, we merged with and into Advanced Communications  (Nevada), a
Nevada  corporation.  Pursuant  to this  merger,  the  shareholders  of Advanced
Communications  (Nevada) received 90% of the Company's  outstanding common stock
and the Company received all of Advanced Communications (Nevada)'s assets. These
assets  included  all of the  North  and South  American  rights  to market  and
distribute  SpectruCell,   a  wireless  software  defined  radio  ("SDR")  based
communications  platform that is being developed to offer mobile  communications
network  providers the  flexibility  of  processing  and  transmitting  multiple
wireless  communications  signals through one base station.  We are not aware of
any formal oral or written  agreement  documenting the transfer of the rights of
Advanced  Communications  (Nevada) in  SpectruCell to the Company at the time of
the merger except for the Company's Proxy Statement  prepared for a shareholders
meeting held on March 25, 1999 (the "Proxy Statement"). Proposal #6 of the Proxy
Statement  stated that Advanced  Communications  (Nevada) would merge all of its
assets into the Company,  which  included  all of the rights to a product  being
developed called SpectruCell.

     As of June 30, 2003, we did not have any meaningful  assets other than cash
and our ownership  rights to market and distribute  SpectruCell in the North and
South  American  markets.  We have no  tangible  assets.  It is our belief  that
SpectruCell is still under  development in Australia by an unrelated third party
in which we have no interest.  Moreover,  it is uncertain  whether the product's
development will ever be completed and a commercially  viable product brought to
market.  Consequently,  we have  no  current  business  or  ongoing  operations.
However, we intend to focus our efforts on identifying and acquiring an existing
profitable  business  or  businesses.  We have not  identified  any  prospective
business candidates to date.

     FINANCIAL CONDITION

     We had net losses of $1,869,031 and $4,332,693  during the years ended June
30, 2003 and 2002, respectively. As of June 30, 2003, we had cash of $22,527 and
current  liabilities  of  $4,067,322.  We do not have  sufficient  cash or other
assets to meet our current liabilities.  In order to meet those obligations,  we
will need to raise  cash from the sale of  securities  or from  borrowings.  Our
independent auditors have added an explanatory paragraph to their audit opinions
issued in connection  with the years 2003 and 2002 financial  statements,  which
states that our ability to continue as a going concern  depends upon our ability
to resolve liquidity problems,  principally by obtaining capital from our Equity
Line of Credit,  commencing sales and generating  sufficient  revenues to become
profitable.  Our  ability  to obtain  funding  and to  identify  and  acquire an
existing profitable operating business will determine our ability to continue as
a going concern.  Our financial  statements do not include any adjustments  that
might result from the outcome of this uncertainty.

        COMPANY HISTORY

     We were incorporated on April 30, 1998 and were inactive from April 1998 to
June 1998  except  for the  issuance  of  founders'  shares.  On April 7,  1999,
Advanced Communications  (Nevada) merged with and into the Company.  Pursuant to
this merger, the shareholders of Advanced  Communications (Nevada) (of which Mr.
Roger  May  was  the  principal  shareholder)  received  90%  of  the  Company's
outstanding common stock and the Company received all of Advanced Communications
(Nevada)'s  assets that included all of the North and South  American  rights to
market  and  distribute  a  wireless   software   defined  radio  technology  in
development known as SpectruCell.

     Mr.  May  and  his  related  entities,   including  Global   Communications
Technology  Pty Ltd,  his wholly  owned  entity,  as majority  owner of Advanced
Communications (Nevada), received approximately 42,000,000 shares in the Company
under the share exchange.

     Media  Forum,  the  surviving  entity,  subsequently  changed  its  name to
Advanced  Communications  Technologies,  Inc. Upon completion of the merger,  we
changed our trading symbol to "ADVC."

     On January 31, 2000,  we acquired  Smart  Investments.com,  Inc.  through a
stock  exchange  with Smart  Investments'  sole  shareholder.  Immediately  upon
completion of that acquisition, we elected successor issuer status in accordance
with Rule  12g-3  promulgated  under the  Securities  Exchange  Act of 1934,  as
amended,  and consequently  became a "reporting  company" in compliance with the
NASD's requirements.

                                       1
<PAGE>

     On July 20, 1999, we formed Advanced Global Communications, Inc. ("AGC"), a
Florida   corporation.   AGC  was   established   to  develop  and  operate  our
international  telecommunications network from the United States to Pakistan and
India, as well as to acquire other switching and  telecommunications  companies.
The network was established in 2000 and operated until 2001, when the regulatory
climate in Pakistan and India made it legally and  economically  impractical  to
operate.  During the fiscal year ended June 30, 2001, we ceased  operating AGC's
international  telecommunications network and wrote-off our entire investment in
various telephone equipment and network costs.

     On April 5, 2000, we entered into a Stock Purchase  Agreement with Advanced
Communications  Technologies  Pty Ltd  (Australia) to acquire a 20% interest for
$19,350,000. The majority owner of Advanced Communications (Australia) was Roger
May, who was the Chief Executive Officer,  Chairman of the Board of Directors of
our Company until  November 30, 2001. In  consideration  for our purchase of the
stock,  we  issued  5,000,000  shares  of our  common  stock  having  a value of
$11,850,000  and a  $7,500,000  unsecured  non-interest  bearing note payable in
installments.  The note payable was payable in three equal monthly  installments
commencing  May 31,  2000.  Under  the terms of the April  2000  Stock  Purchase
Agreement,  the monthly installment deadline was extended indefinitely,  without
interest,  to allow us to raise the cash portion of the purchase  price  through
the sale of  securities.  Upon raising such funds,  our company was obligated to
repay Advanced  Communications  (Australia)'s  note payable after  deducting for
reserves needed for current operations,  working capital and the development and
expansion  of  its  operations  and  the  operations  of  its  subsidiaries,  as
determined  by  its  Board  of  Directors.   On  November  11,  2002,   Advanced
Communications  (Australia)  issued a Notice of Termination to the Company which
stated that the April 2000 Stock Purchase  Agreement was terminated  immediately
due to the  Company's  insolvency.  Our company  believes that it has no further
obligation  to pay the  unsecured  note since the Stock  Purchase  Agreement was
unilaterally terminated by Advanced Communications (Australia).

     In November 2000, we formed Advanced Network  Technologies  (USA),  Inc., a
Delaware  corporation,  owned 70% by us and 30% by Advanced Network Technologies
Pty. Ltd.  Advanced Network intended to acquire wireless network  infrastructure
in North and South America.  This  infrastructure  was intended to help showcase
SpectruCell within a working network environment.  To date, no acquisitions have
been made.  Advanced Network  Technologies (USA), Inc. is presently inactive and
had no revenues or expenses for the fiscal years ended June 30, 2003 or 2002.

     EMPLOYEES AND CONSULTANTS

     As of September 19, 2003 we have no full time  employees and four part time
consultants.  None of our consultants  are covered by any collective  bargaining
agreement.


ITEM 2.  DESCRIPTION OF PROPERTY

     As of August 1, 2002, the Company relocated its principal  executive office
from  California to 420 Lexington  Avenue,  New York, NY 10170 within the office
facility of Danson  Partners,  LLC, a privately  owned  company that employs our
President and Chief Financial Officer. No rent or facility use fee is charged to
the Company by Danson  Partners,  LLC.  The  Company is a party to a  three-year
office lease that  commenced  January 1, 2002 and ends December 31, 2004 for its
former  California  office located at 880 Apollo Street,  Suite 200, El Segundo,
CA. The monthly  rent is $7,634  inclusive of the cost of monthly  parking.  The
minimum  lease  payment for the  remaining  life of the lease is  $137,412.  The
Company has engaged Grubb & Ellis to find a suitable  subtenant to assume all or
a portion of the Company's remaining lease obligation.  As of June 30, 2003, the
Company's  former office space remains vacant and the Company is indebted to the
landlord for $101,946.


ITEM 3.  LEGAL PROCEEDINGS

     As of June 30, 2003, management has settled all of its outstanding lawsuits
and has recorded the financial statement impact of such settlements. The Company
is  currently  involved in disputes  with  various  creditors  regarding  unpaid
professional  and other  fees.  A number of  creditors  have filed and  obtained
judgments  against the  Company  for unpaid  fees and  services in the amount of
$105,815.  The Company has  previously  recorded this expense and has determined
that these  judgments  will not have a material  adverse impact on the Company's
financial condition.

     Management  does not believe that the  contingencies  described  below will
have a material adverse impact on the future financial condition of the Company.

                                       2
<PAGE>

     CONTINGENCIES

     INDEMNIFICATION  OF DIRECTORS AND EMPLOYEES IN RE: ADVANCED  COMMUNICATIONS
     (AUSTRALIA) v. COMPANY DIRECTORS AND EMPLOYEES

     On or about May 10,  2002,  Advanced  Communications  Technologies  Pty Ltd
(Australia)  filed  suit in the  Superior  court of  Orange  County,  California
against the Company, all of its directors, its former president, and some of its
former and present employees,  including the Company's receptionist. On or about
May 17, 2002, Advanced Communications (Australia) voluntarily dismissed the suit
as to the Company but not as to the individual defendants.

     The complaint sets forth multiple  causes of action against the defendants,
including  various  business  torts.  The  basis of the  complaint  was that the
defendants improperly interfered with and conspired to ruin plaintiff's business
and conspired to force plaintiff into bankruptcy.

     In July 2003, the individual directors and employees who had been served in
the case were successful in having the complaint  dismissed for failure to state
any valid  causes of  action  and a  judgment  was  entered  by the Court in the
individual's  favor.  Consequently,  the  Company  is  no  longer  obligated  to
indemnify the directors and former employees in this case.


     INDEMNIFICATION  AGREEMENT  BETWEEN  THE  COMPANY  AND  JACK  HALPERIN  RE:
     NEEDHAM/DUPONT LAWSUIT

     On or  about  July  2000,  the  Company  entered  into  an  indemnification
agreement  with Jack Halperin,  Esq., our then SEC counsel,  whereby the Company
agreed to indemnify Mr. Halperin for all costs and damages  incurred as a result
of Mr.  Halperin  being named a defendant in the  Needham/DuPont  lawsuit  filed
against the  Company,  Mr. May and Mr.  Halperin in July 2000.  Mr. May executed
this agreement on behalf of the Company. The agreement includes a provision that
prohibits  the  Company  from  entering  into any  settlement  agreement  in the
Needham/DuPont  lawsuit  unless  such  settlement  agreement  provides  for  the
unconditional  release of Mr. Halperin from any claim. On November 14, 2002, the
Company settled the Needham/DuPont  lawsuit without obtaining a full release for
Mr.  Halperin.  To date,  no claim for  indemnity  has been  filed  against  the
Company.


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

     On July 9, 2003 a Special Meeting of Stockholders  was held in New York. At
this meeting,  our stockholders  authorized the following change to our Articles
of Incorporation:

     1. To  increase  our  authorized  shares of common  stock from  200,000,000
shares to 5,000,000,000.

     The  following  illustrates  the  certified  record of the  results  of our
shareholder vote:

     NUMBER OF VOTES FOR        NUMBER OF VOTES AGAINST        NUMBER ABSTAINED
     -------------------        -----------------------        ----------------

         109,363,744                  21,014,521                    51,900

     A Certificate of Amendment to our Articles of  Incorporation  embodying the
above change was filed with the Florida Secretary of State on July 10, 2003.

                                       3
<PAGE>

                                     PART II


ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

     PRICE RANGE OF COMMON STOCK

     Our common stock is currently traded on the Over-the-Counter Bulletin Board
("OTCBB") under the symbol "ADVC".  As of October 1, 2003 there were 280,474,473
common shares  outstanding and  approximately  459 holders of record. We believe
that the number of beneficial owners is substantially greater than the number of
record  holders  because a large portion of our common stock is held in "broker"
or "street names".

     The following table sets forth, for the fiscal periods  indicated,  the bid
price range of our common stock:

                                                  HIGH BID      LOW BID
                                                  --------      -------
        2002
        Quarter Ended September 30, 2001            $.41        $.250
        Quarter Ended December 31, 2001              .38         .170
        Quarter Ended March 31, 2002                 .26         .060
        Quarter Ended June 30, 2002                  .08         .020

        2003
        Quarter Ended September 30, 2002           $.080        $.005
        Quarter Ended December 31, 2002             .015         .004
        Quarter Ended March 31, 2003                .010         .002
        Quarter Ended June 30, 2003                 .011         .006


     Such market quotations  reflect the high bid and low prices as reflected by
the OTCBB or by prices, without retail mark-up,  markdown or commissions and may
not necessarily represent actual transactions.

     We did not pay any  dividends  during  fiscal  2003 and have never paid any
dividends on our capital stock.  We currently  expect that we will retain future
earnings  for use in the  operation  and  expansion  of our  business and do not
anticipate paying any cash dividends in the foreseeable  future. Any decision on
the future  payment of  dividends  will  depend on our  earnings  and  financial
position  at that time and such other  factors as the Board of  Directors  deems
relevant.

     RECENT SALES OF UNREGISTERED SECURITIES

     All  issuances  of  restricted  stock have been valued based on the closing
price of the stock as of the date the Company's Board of Directors  approved the
grant of shares or under the terms of our Convertible Debentures.

     On September 18, 2003,  September 25, 2003 and October 1, 2003, the Company
agreed to  issue,  in the  aggregate,  85,787,623  shares  of  common  stock for
$200,000 to Cornell Capital Partners, L.P. under the terms of the Equity Line of
Credit. The Company netted $192,500 after underwriting and escrow fees.

     On September 4, 2003,  holders of our 5% Convertible  Debentures elected to
convert  $82,375 of debentures  at a conversion  price of $.00138 per share into
59,692,027 shares of common stock.

     On January 22, 2003,  holders of our 5% Convertible  Debentures  elected to
convert  $56,000 of  debentures  at a conversion  price of $.0032 per share into
17,500,000 shares of common stock.

     On January 22, 2003,  Cornell Capital Partners,  L.P.  converted $62,500 of
our 10%  Convertible  Debentures  at a conversion  price of $.001 per share into
62,500,000 shares of common stock.

     On October 10, 2002, the Company's Board of Directors approved the issuance
of 100,000 shares each or 500,000 shares in the  aggregate,  to Messrs.  Danson,
Prouty,  Lichtman,  Roche and Finch,  having a value of $1,000 each or $5,000 in

                                       4
<PAGE>

the  aggregate,  in partial  satisfaction  of unpaid prior legal and  consulting
fees. These shares were issued on December 5, 2002.

     On both  August  26,  2002 and  September  24,  2002,  the  Company  issued
1,460,725  and  664,275  shares  of  common  stock to AJW  Partners  LLC and New
Millennium  Capital  Partners II, LLC,  respectively  (an aggregate of 4,250,000
shares)  in full  settlement  of the  Company's  outstanding  obligation  on the
remaining September 30, 1999 12% Convertible Debenture.

     With respect to the sale of unregistered  securities  referenced above, all
transactions  were exempt  from  registration  pursuant to Rule 506  promulgated
under the  Securities  Act of 1933 (the "1933 ACT").  These  offerings  may have
qualified  for other  exemptions as well.  In each  instance,  the purchaser had
access to sufficient information regarding Advanced Communications so as to make
an informed investment decision. More specifically,  Advanced Communications had
a reasonable  basis to believe that each purchaser was an "accredited  investor"
as defined  in  Regulation  D of the 1933 Act,  which  information  was based on
representations  received from such  investors,  and otherwise had the requisite
sophistication to make an investment in Advanced Communications' securities.
<TABLE>
     SELECTED FINANCIAL DATA
<CAPTION>
                                                  FOR THE YEARS ENDED JUNE 30,
                                          ---------------------------------------------
                                                2003            2002           2001
                                          ---------------  --------------  ------------
<S>                                       <C>              <C>             <C>
Revenue                                   $         --     $         --    $     50,000
Cost of Revenue                                     --               --          57,310
Gross Profit (Loss)                                 --               --          (7,310)
Operating Expenses                           1,216,776        2,314,570       3,334,581
Operating (Loss)                            (1,216,776)      (2,314,570)     (3,341,891)
(Loss) from Investment                              --               --      (3,571,654)
(Loss) from Goodwill Impairment                     --       (1,700,000)    (12,399,864)
Other Expense                                 (652,255)        (318,123)       (419,157)
(Loss) Before Income Taxes                  (1,869,031)      (4,332,693)    (19,732,566)
Provision for Income Taxes                          --               --              --
Net (Loss)                                  (1,869,031)      (4,332,693)    (19,732,566)
Net (Loss) Per Share:
  Basic and Diluted                       $       (.01)    $       (.04)   $       (.22)
Pro Forma Weighted Average Shares:
  Basic and Dilutive                       152,960,499      100,576,484      87,976,428
                                          ==============   =============   =============

Cash                                      $     22,527     $     11,093    $      6,816
Working Capital (Deficiency)                (4,044,795)      (3,252,643)     (2,421,719)
Total Assets                                    70,748          114,852       2,041,940
Total Debt                                   6,030,922        5,054,902       4,611,702
Stockholders' (Deficiency)/Equity           (5,960,174)      (4,940,050)     (2,569,762)
</TABLE>


ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS

     The following  discussion  should be read in conjunction with our financial
statements and the related notes and the other financial  information  appearing
elsewhere in this report. In addition to historical  information,  the following
discussion  and  other  parts  of this  Annual  Report  contain  forward-looking
information that involves risks and uncertainties.

     As of June 30,  2003,  the  Company  had limited  resources,  had  incurred
cumulative net operating  losses of $31,717,679 and expects to incur  additional
losses until either the Company identifies and acquires an alternative operating
business or the SpectruCell product, when developed, is made available to us for
sale to military and commercial  customers in North and South America.  Based on
the past litigation with Advanced Communications  (Australia),  it is unclear if
the SpectruCell  product will ever be commercially  developed and made available
to us.  Moreover,  given the prior litigation  between the Company,  Mr. May and
Advanced  Communications  (Australia),  we have no reliable  information  on the
status of the SpectruCell  product and when it will be available,  if at all, to
military  users  and be field  tested  for  commercial  applications.  Until the
Company  identifies  and  acquires  an  alternative  operating  business it will
continue to minimize its  infrastructure  costs while accessing  capital through
the periodic draw down of our Equity Line of Credit facility. The Company has no

                                       5
<PAGE>

plans to rely  solely on the  SpectruCell  product  as a future  revenue  source
because there is no assurance that SpectruCell will ever be completed and become
a commercially  viable product or that we will be able to exercise our rights to
market and distribute SpectruCell in North and South America. The Company's main
focus is to reduce its overall debt and consider the  acquisition of alternative
operating  businesses.  To date,  the  Company  has not  identified  any  viable
acquisition candidate.

     SIGNIFICANT ACCOUNTING POLICIES

     Financial  Reporting  Release No. 60,  which was  recently  released by the
Securities  and  Exchange  Commission,  requires  all  companies  to  include  a
discussion of critical accounting policies or methods used in the preparation of
financial  statements.   The  following  is  a  brief  discussion  of  the  more
significant  accounting policies and methods used by us. In addition,  Financial
Reporting  Release No. 61 was recently  released by the  Securities and Exchange
Commission to require all  companies to include a discussion  to address,  among
other things, liquidity, off-balance sheet arrangement,  contractual obligations
and commercial commitments.

     USE OF ESTIMATES

     In preparing consolidated financial statements in conformity with generally
accepted  accounting  principles in the United States of America,  management is
required to make estimates and assumptions  that affect the reported  amounts of
assets and liabilities  and the disclosure of contingent  assets and liabilities
at the date of the consolidated  financial  statements and revenues and expenses
during the reported period. Actual results could differ from those estimates.

     FAIR VALUE OF FINANCIAL INSTRUMENTS

     The  carrying   amounts  of  the  Company's   accounts   payable,   accrued
liabilities,  debentures,  and loans payable  approximate  fair value due to the
relatively short period to maturity for these instruments.

     PROPERTY AND EQUIPMENT

     Property  and  equipment  are  stated  at  cost  and   depreciated,   using
accelerated methods, over the estimated useful lives of 5 years.

     LOSS PER SHARE

     Net loss per  common  share  (basic and  diluted)  is based on the net loss
divided by the weighted average number of common shares  outstanding during each
year.  Common stock  equivalents  are not included in the computation of diluted
net loss per common share because the effect would be anti dilutive.

     RECENT ACCOUNTING PRONOUNCEMENTS

     In April 2003, the Financial  Accounting  Standards  Board ("FASB")  issued
Statement of Financial  Accounting  Standards  ("SFAS") No. 149,  "Amendment  of
Statement 133 on Derivative  Instruments and Hedging  Activities".  SFAS No. 149
amends  and  clarifies   financial   accounting  and  reporting  for  derivative
instruments,   including  certain  derivative   instruments  embedded  in  other
contracts  (collectively  referred to as derivatives) and for hedging activities
under  SFAS  No.  133,  "Accounting  for  Derivative   Instruments  and  Hedging
Activities".  The  changes  in SFAS  No.  149  improve  financial  reporting  by
requiring  that  contracts  with  comparable  characteristics  be accounted  for
similarly.  This  statement is effective for contracts  entered into or modified
after June 30, 2003 and all of its provisions should be applied prospectively.

     In May  2003,  the  FASB  issued  SFAS No.  150,  "Accounting  For  Certain
Financial Instruments with Characteristics of both Liabilities and Equity". SFAS
No.  150  changes  the  accounting  for  certain   financial   instruments  with
characteristics   of  both   liabilities   and  equity  that,   under   previous
pronouncements, issuers could account for as equity. The new accounting guidance
contained in SFAS No. 150  requires  that those  instruments  be  classified  as
liabilities in the balance sheet.

     SFAS  No.  150  affects  the  issuer's   accounting   for  three  types  of
freestanding financial  instruments.  One type is mandatorily redeemable shares,
which the issuing company is obligated to buy back in exchange for cash or other
assets. A second type includes put options and forward purchase contracts, which
involves  instruments  that do or may require the issuer to buy back some of its
shares in exchange for cash or other assets.  The third type of instruments that
are  liabilities  under this Statement is  obligations  that can be settled with
shares,  the monetary value of which is fixed, tied solely or predominantly to a

                                       6
<PAGE>

variable  such as a market  index,  or  varies  inversely  with the value of the
issuers' shares. SFAS No. 150 does not apply to features embedded in a financial
instrument that is not a derivative in its entirety.

     Most of the  provisions of Statement 150 are  consistent  with the existing
definition  of  liabilities  in FASB  Concepts  Statement  No. 6,  "Elements  of
Financial Statements". The remaining provisions of this Statement are consistent
with the  FASB's  proposal  to  revise  that  definition  to  encompass  certain
obligations  that a  reporting  entity  can or must  settle by  issuing  its own
shares. This Statement shall be effective for financial instruments entered into
or modified after May 31, 2003 and otherwise shall be effective at the beginning
of  the  first  interim  period  beginning  after  June  15,  2003,  except  for
mandatorily redeemable financial instruments of a non-public entity, as to which
the effective date is for fiscal periods beginning after December 15, 2003.

     YEAR ENDED JUNE 30, 2003 COMPARED TO YEAR ENDED JUNE 30, 2002

     OVERALL RESULTS OF OPERATIONS

     For the fiscal year ended June 30,  2003,  we  incurred an overall  loss of
$(1,869,031)  or ($.01) per share which was a substantial  decrease from the net
loss of $(4,332,693) or $(0.04) per share for the comparable period in the prior
year. The decrease of $2,463,662 in the fiscal 2003 net loss from fiscal 2002 is
attributable to the $1,700,000 write-off of our remaining investment in Advanced
Communications  (Australia)  that  occurred  in fiscal  2002 and an  approximate
$800,000 reduction in corporate overhead in fiscal 2003 compared to fiscal 2002.

     REVENUE

     We did not generate any revenue during either fiscal year.

     OPERATING EXPENSES

     Total operating  expenses for the fiscal years ended June 30, 2003 and June
30, 2002 were  $1,216,776  and  $2,314,570  respectively  and  represents  a 47%
decrease from the prior fiscal year. Of these amounts $629,741 and $1,228,780 or
52% and 53%  respectively,  were for  professional  services  rendered  of which
$5,000 and  $677,634  during the fiscal  years  ended June 30, 2003 and June 30,
2002,  respectively,  was paid via the issuance of  restricted  common stock and
represent a non-cash  expense.  Professional  and consulting fees for the fiscal
year ended June 30, 2003 decreased significantly from the comparative period due
to the  curtailment of our operations  commencing  August 1, 2002, as well as an
overall reduction in legal fees associated with the Company's  settlement of all
of its  remaining  lawsuits  and its  litigation  with  Roger  May and  Advanced
Communications (Australia).

     Depreciation and amortization expense decreased by $82,355 to $425,812 from
$508,167  due to  $300,000  of  amortization  of  goodwill  associated  with our
investment in Advanced  Communications  (Australia)  included in the fiscal 2002
amounts  reduced by  additional  amortization  of deferred  commitment  fees and
financing costs in the amount of $218,645 in fiscal 2003.

     Other  general and  administrative  expenses  amounted to $128,362  for the
fiscal year ended June 30, 2003, which decreased  $279,410 or 69% from the prior
fiscal year due principally to the curtailment of our overhead  expenses.  Total
general and administrative  expenses for the fiscal year ended June 30, 2003 was
principally  from accrued rent on our El Segundo  office and Proxy  solicitation
costs (printing and mailing) as well as other stock costs.

     OTHER EXPENSES

     Interest  expense  increased  $110,638  from the fiscal year ended June 30,
2002 due  principally  to the  issuance,  in November  2002,  of our 10% Secured
Convertible  Debentures and the overall higher level of interest bearing debt in
fiscal 2003 compared to fiscal 2002.  Interest  expense  incurred for the twelve
months  ended June 30, 2003 was  $428,761 and was  principally  attributable  to
$119,721 of discount amortized relating to the beneficial  conversion feature of
the Company's  10% Secured  Convertible  Debentures we issued in November  2002,
$283,139 of accrued and penalty  interest on the 5%  Convertible  Debentures due
January 2004,  $8,829 of interest on the 8% Note Payable due 2005 and $12,522 of
interest  on the  10%  Secured  Convertible  Debentures  issued  November  2002.
Interest of  $318,123  for the  comparative  fiscal year ended June 30, 2002 was
attributable entirely to interest on the 5% Convertible  Debentures we issued in
January 2002 and included  $250,000 of interest  attributable  to the  intrinsic
value of the beneficial conversion feature of these Convertible Debentures.

                                       7
<PAGE>

     Other expense for the fiscal year ended June 30, 2002 includes a $1,700,000
loss from  impairment  of goodwill  associated  with our  investment in Advanced
Communications  (Australia).  The  impairment  loss of  $1,700,000  was based on
management's  evaluation,  in  accordance  with  FASB  121 and  SFAS  142 of the
carrying value of our investment in Advanced Communications (Australia).

     During  the fiscal  year  ended June 30,  2003,  the  Company  settled  its
remaining lawsuits and recorded $223,494 of settlement  expense.  For the fiscal
year ended June 30, 2002, the Company recorded  $80,000 of expense  attributable
to the settlement of the World IP lawsuit.

     LIQUIDITY AND CAPITAL RESOURCES

     At June 30, 2003, our principal source of liquidity was $22,527 of cash. On
July 16, 2003, we entered into an Equity Line of Credit  Agreement  with Cornell
Capital Partners,  L.P., a private limited  partnership.  Pursuant to the Equity
Line of Credit, we may, at our discretion,  periodically sell to Cornell Capital
Partners  shares  of  common  stock  for a total  purchase  price of up to $30.0
million.  For each share of common  stock  purchased  under the  Equity  Line of
Credit, Cornell Capital Partners will pay 91% of the lowest closing bid price of
our  common  stock on the  Over-the-Counter  Bulletin  Board or other  principal
market on which our common stock is traded for the 5 days immediately  following
the notice date.  The  effectiveness  of the sale of the shares under the Equity
Line of Credit is  conditioned  upon us  registering  the shares of common stock
with the Securities and Exchange Commission.

     On July 31, 2003, the Securities  and Exchange  Commission  issued an order
declaring   effective  our  Registration   Statement  and  the  sale  of  up  to
4,500,000,000  shares  of  common  stock.  To date the  Company  has made  three
advances under the Equity Line of Credit for an aggregate  amount of $200,000 in
exchange  for  agreeing to issue  85,787,623  shares of common  stock to Cornell
Capital  Partners,  L.P. The Company  netted  $192,500 from these advances after
deducting  fees and  escrow  agent  expenses.  With the  Equity  Line of  Credit
facility now  available to us, we  anticipate  that we will,  from time to time,
request  advances  from  Cornell  Capital  Partners,  L.P.  to  provide  us with
sufficient working capital to reorganize and settle our outstanding obligations.

     We  anticipate  that our cash  needs  over the next 12  months  consist  of
general  working  capital needs of $300,000,  plus the repayment of  outstanding
indebtedness of $4,067,322.  These obligations include  outstanding  Convertible
Debentures and interest thereon in the amount of $1,234,349, as well as accounts
payable and accrued expenses in the amount of $1,560,165,  accrued  compensation
of $172,183  and an  unsecured,  non-interest-bearing  loan payable to an entity
wholly-owned  by Roger May, a former officer and director.  As of June 30, 2003,
we had a working  capital  deficiency of $4,044,795.  As a result of our working
capital   shortfall  during  fiscal  2003,  we  ceased  virtually  all  business
operations,  except for minimal operations in attempting to raise capital and to
file reports with the Securities and Exchange Commission.

     The  Company  has total  liabilities  of  $6,030,922  as of June 30,  2003.
Included  in  this  total  are  contractual  obligations  of  $3,011,837.  These
contractual  obligations,  along with the dates on which such  payments are due,
are  described  below:
<TABLE>
                                                        PAYMENTS  DUE BY  PERIOD
                                      ----------------------------------------------------------------
                                                         1            2-3           4-5       AFTER 5
CONTRACTUAL OBLIGATIONS                   TOTAL     YEAR OR LESS     YEARS         YEARS       YEARS
------------------------------------  ------------- ------------  ----------     ---------   ---------
<S>                                    <C>           <C>          <C>            <C>         <C>
Notes Payable and Interest Thereon     $   217,323*  $   95,774   $  121,549     $     --    $     --
Convertible Debentures and Interest
  Thereon                                1,234,349    1,034,327      200,022           --          --
Accounts Payable and Accrued
  Expenses                               1,560,165    1,560,165           --           --          --
                                       -----------   ----------   ----------     --------    --------
Total Contractual Obligations          $ 3,011,837   $2,690,266   $  321,571     $     --    $     --
                                       ===========   ==========   ==========     ========    ========
---------------

*    Excludes $1,791,166 due to Advanced  Communications  (Australia).  The Company believes that this
     obligation  has  been  cancelled  by  Advanced   Communications   (Australia)   due  to  Advanced
     Communications  (Australia)'s  unilateral  revocation of the Stock  Purchase  Agreement and is no
     longer obligated to pay this.
</TABLE>

     Our only source of funds to repay these obligations will come from advances
under our  Equity  Line of Credit  facility.  We have no other  source of funds,
internal or external with which to repay our contractual obligations.

     Below is a  discussion  of our  sources and uses of funds for the 12 months
ended June 30, 2003:

                                       8
<PAGE>

     NET CASH USED IN OPERATING ACTIVITIES

     Net cash used in operating  activities  was $123,566 and  $1,103,254 in the
fiscal  years  ended June 30,  2003 and 2002,  respectively.  The use of cash by
operating  activities  was  principally  the  result of net losses  during  both
reporting periods together with a reduction in accrued compensation and deferred
revenue  in the  fiscal  year  ended  2002,  offset  by  non  cash  charges  for
depreciation  and  amortization,  stock issued for services and the write-off of
goodwill in the aggregate  amount of $564,357 and $3,135,801 for the fiscal year
ended June 30, 2003 and 2002 respectively.  In addition,  cash used in operating
activities for fiscal 2003 was substantially  reduced by a $637,672 and $304,490
increase in accounts payable and accrued interest payable, respectively.

     NET CASH USED IN INVESTING ACTIVITIES

     We used net cash of $25,000 during the fiscal year ended June 30, 2002, for
the  repayment of our loan payable to Advanced  Communications  (Australia).  No
cash was used in investing activities for the fiscal year ended June 30, 2003.

     NET CASH PROVIDED BY FINANCING ACTIVITIES

     Net cash provided by financing  activities for the year ended June 30, 2003
was $135,000 and was from the proceeds on the sale of Convertible Debentures and
the issuance of a short-term promissory note to Cornell Capital Partners, L.P.

     Net cash provided by financing  activities for the year ended June 30, 2002
was  $1,134,206  and was due to the net  proceeds  received  from the sale of 5%
Convertible  Debentures in January 2002 in the amount of $863,000  (inclusive of
cash received from the $325,000  December 2001 bridge loan and net of $26,000 in
financing  fees),  $130,000  received  from  the  private  placement  of  equity
securities  that  commenced  December 2000 and ended August 2001 and $259,736 of
loan proceeds received from Global Communications  Technology Pty Ltd, an entity
wholly owned by Roger May, a former officer and director of the company.

     Net cash used by  financing  activities  for the fiscal year ended June 30,
2002 of $118,530  resulted  entirely from the payment of the  Grassland  Capital
Group loan  payable  and  accrued  interest  that was in  default  and which was
subject to a judgment against the Company.

     EQUITY LINE OF CREDIT

     In July 2003, we entered into an Equity Line of Credit with Cornell Capital
Partners, L.P. Pursuant to the Equity Line of Credit, we may, at our discretion,
periodically sell to Cornell Capital Partners shares of common stock for a total
purchase price of up to $30.0 million.  For each share of common stock purchased
under the Equity Line of Credit,  Cornell  Capital  Partners will pay 91% of the
lowest  closing bid price of our common stock on the  Over-the-Counter  Bulletin
Board or other  principal  market on which our common  stock is traded for the 5
days  immediately  following  the notice  date.  Cornell  Capital  Partners is a
private limited  partnership whose business operations are conducted through its
general partner,  Yorkville Advisors, LLC. In connection with the Equity Line of
Credit, we paid Cornell Capital Partners a commitment fee of $740,000, which was
paid by the issuance of 2,960,000  shares of common stock.  The number of shares
issued for the  commitment  fee was equal to $0.25 per share.  Further,  Cornell
Capital  Partners  will retain a fee of 3% of each advance under the Equity Line
of Credit.  In  addition,  we engaged  Westrock  Advisors,  Inc.,  a  registered
broker-dealer,  to advise us in connection  with the Equity Line of Credit.  For
its services, Westrock Advisors, Inc. received 40,000 shares of our common stock
valued at $10,000.  The effectiveness of the sale of the shares under the Equity
Line of Credit is  conditioned  upon us  registering  the shares of common stock
with the Securities and Exchange Commission. On July 16, 2003, the Company filed
a Registration  Statement with the Securities and Exchange Commission seeking to
register  4,073,290,000 shares of common stock for sale under the Equity Line of
Credit. On July 31, 2003, the Securities and Exchange Commission issued an order
declaring our Registration Statement effective.

     Pursuant to the Equity Line of Credit,  we may periodically  sell shares of
common  stock to Cornell  Capital  Partners,  L.P. to raise  capital to fund our
working  capital needs.  The periodic sale of shares is known as an advance.  We
may request an advance  every 5 trading  days.  A closing will be held 7 trading
days after such written  notice at which time we will  deliver  shares of common
stock and Cornell Capital Partners,  L.P. will pay the advance amount,  less the
3% retention. We may continue to request advances until Cornell Capital Partners
has  advanced  $30.0  million  or two  years  after  the  effective  date of our
Registration  Statement,  whichever  occurs first. The amount of each advance is
subject to an aggregate  maximum  advance amount of $2 million in any thirty-day
period.  To date,  the Company has made three  advances under the Equity Line of

                                       9
<PAGE>

Credit aggregating  $200,000 in exchange for agreeing to issue 85,787,623 shares
of common stock to Cornell  Capital  Partners.  The Company netted $192,500 from
these advances after deducting fees and escrow agent expenses.

     RISKS RELATED TO OUR BUSINESS

     WE DO NOT HAVE A PRODUCT TO SELL, WHICH MEANS THAT WE DO NOT HAVE A PRODUCT
     TO SELL IN ORDER TO TRY TO ATTAIN PROFITABLE OPERATIONS

     The  SpectruCell  product  is in  development  and our rights to market and
distribute the product, if developed, are uncertain. As a result, we do not have
a product to sell in order to attain profitable operations.

     WE WILL NEED TO ACQUIRE AN EXISTING  OPERATING BUSINESS OR COMPANY IN ORDER
     TO GENERATE REVENUE

     We cannot  predict when, if at all, our rights to the  SpectruCell  product
will generate sales revenue.  Consequently,  we will need to acquire an existing
operating business or businesses, in order to generate future revenue and attain
profitable operations.

     THE  CONVERSION OF OUR  OUTSTANDING  DEBENTURES  WILL CAUSE DILUTION TO OUR
     EXISTING  SHAREHOLDERS,  WHICH  MEANS THAT OUR  PER-SHARE  INCOME AND STOCK
     PRICE COULD DECLINE

     The issuance of shares upon the  conversion of the  outstanding  debentures
will have a dilutive impact on our stockholders. We currently have $1,049,125 of
outstanding  Convertible  Debentures.  Of that total,  $187,500  of  Convertible
Debentures is convertible at a fixed price of $0.001 per share, which would upon
conversion  result in the issuance of  187,500,000  shares of common stock.  The
balance of $861,625 of  Convertible  Debentures are  convertible  into shares of
common  stock at a price  equal to equal to either  (a) an  amount  equal to one
hundred twenty percent (120%) of the closing bid price of the common stock as of
the closing date or $0.40, whichever is higher, or (b) an amount equal to eighty
percent  (80%) of the lowest  closing bid price of the common stock for the five
trading days  immediately  preceding the conversion date. If such conversion had
taken  place at $0.0032  (i.e.,  80% of the recent  price of  $0.004),  then the
holders of the Convertible  Debentures would have received 269,257,812 shares of
common stock. As a result,  our net income per share could  decrease,  in future
periods, and the market price of our common stock could decline.

     THE  CONVERSION  OF OUR  OUTSTANDING  DEBENTURES  COULD  CAUSE A CHANGE  OF
     CONTROL

     The issuance of shares upon the  conversion of the  outstanding  debentures
could result in a change of control.  Cornell Capital Partners holds Convertible
Debentures,  which if  converted  would  result in the  issuance of  343,750,000
shares of our common stock.  After such  conversions,  Cornell Capital Partners,
L.P.  would  own a total  of  368,639,824  shares  or  approximately  57% of our
outstanding  shares.  In  such  event,  Cornell  Capital  would  be our  largest
shareholder  and would be able to  exercise  control of our  company by electing
directors,  increasing the number of authorized  shares of common stock that our
company could issue or otherwise.

     OUR RELATIONSHIP  WITH MR. MAY AND ADVANCED  COMMUNICATIONS  (AUSTRALIA) IS
     SIGNIFICANTLY IMPAIRED

     Given the prior  litigation  by the Company  against  Mr. May and  Advanced
Communications  (Australia)  over our ownership  rights to market and distribute
SpectruCell  and the  Company's  20% stock  interest in Advanced  Communications
(Australia),  it is likely  that the  Company  will  continue  to be involved in
substantive  litigation  against Mr. May and other parties to protect its rights
to, and interest in, the SpectruCell technology for the North and South American
markets.

     Even if we are able to prevail  against  Mr. May,  Advanced  Communications
(Australia) or its successor in interest or other parties as to SpectruCell,  or
settle our disputes with those parties,  the success of the SpectruCell  project
and our  financial  viability  on this basis is subject to many other  risks and
contingencies, including, but not limited to, the ones mentioned below.

     WE HAVE HISTORICALLY LOST MONEY AND LOSSES MAY CONTINUE IN THE FUTURE

     We have  historically  lost money.  In the fiscal years ended June 30, 2003
and 2002,  we had a net loss of  ($1,869,031)  and  ($4,332,693)  or ($.01)  and
($0.04) per share, respectively. Future losses are likely to occur. Accordingly,
we may  experience  significant  liquidity  and cash flow  problems  because our
operations  are not  profitable.  No  assurances  can be  given  that we will be
successful in reaching or maintaining profitable operations.

                                       10
<PAGE>

     OUR  INDEPENDENT  AUDITORS  HAVE  ADDED  A  GOING  CONCERN  OPINION  TO OUR
     FINANCIAL  STATEMENTS,  WHICH  MEANS  THAT WE MAY  NOT BE ABLE TO  CONTINUE
     OPERATIONS UNLESS WE OBTAIN ADDITIONAL FUNDING

     Our independent auditors have added an explanatory paragraph to their audit
opinions issued in connection with the years 2003 and 2002 financial statements,
which  states that our ability to continue as a going  concern  depends upon our
ability  to  resolve  liquidity   problems,   commencing  sales  and  generating
sufficient  revenues  to become  profitable.  Our  ability to obtain  additional
funding and pay off our obligations  will determine our ability to continue as a
going  concern.  Our financial  statements do not include any  adjustments  that
might result from the outcome of this uncertainty.

     WE HAVE A WORKING CAPITAL  DEFICIT,  WHICH MEANS THAT OUR CURRENT ASSETS ON
     JUNE 30, 2003 WERE NOT  SUFFICIENT  TO SATISFY OUR CURRENT  LIABILITIES  ON
     THAT DATE

     We had a working capital  deficit of $4,044,795 as of June 30, 2003,  which
means that our current  liabilities  exceeded our current  assets by $4,044,795.
Current assets are assets that are expected to be converted into cash within one
year and, therefore,  may be used to pay current liabilities as they become due.
Our working  capital deficit means that our current assets on June 30, 2003 were
not sufficient to satisfy all of our current liabilities on that date.

     THE PRICE OF OUR COMMON STOCK MAY BE AFFECTED BY A LIMITED  TRADING  VOLUME
     AND MAY FLUCTUATE SIGNIFICANTLY

     Prior to this  offering  there has been a  limited  public  market  for our
common stock and there can be no assurance  that an active  trading  market will
develop.  An absence of an active  trading  market  could  adversely  affect our
stockholders'  ability  to sell  our  common  stock in short  time  periods,  or
possibly at all. Our common stock has  experienced,  and is likely to experience
in the future,  significant  price and volume  fluctuations that could adversely
affect the market  price of our common  stock  without  regard to our  operating
performance. In addition, we believe that factors such as quarterly fluctuations
in our financial  results and changes in the overall economy or the condition of
the  financial  markets  could cause the price of our common  stock to fluctuate
substantially.

     OUR  COMMON  STOCK IS DEEMED TO BE  "PENNY  STOCK,"  WHICH MAY MAKE IT MORE
     DIFFICULT   FOR   INVESTORS  TO  SELL  THEIR  SHARES  DUE  TO   SUITABILITY
     REQUIREMENTS

     Our common  stock is deemed to be "penny  stock" as that term is defined in
Rule  3a51-1  promulgated  under  the  Securities  Exchange  Act of 1934.  These
requirements  may reduce the  potential  market for our common stock by reducing
the number of potential investors. This may make it more difficult for investors
in our common stock to sell shares to third  parties or to otherwise  dispose of
them. This could cause our stock price to decline. Penny stocks are stock:

     o    With a price of less than $5.00 per share;

     o    That are not  traded  on a  "recognized"  national  exchange;

     o    Whose prices are not quoted on the Nasdaq automated quotation system
          (Nasdaq listed  stock  must  still  have a price of not less  than
          $5.00  per share); or

     o    In issuers  with net  tangible  assets less than $2.0  million (if the
          issuer has been in  continuous  operation for at least three years) or
          $5.0 million (if in  continuous  operation for less than three years),
          or with average  revenues of less than $6.0 million for the last three
          years.

     Broker/dealers  dealing in penny stocks are  required to provide  potential
investors  with a  document  disclosing  the  risks of penny  stocks.  Moreover,
broker/dealers  are required to determine whether an investment in a penny stock
is a suitable investment for a prospective investor.

     WE COULD FAIL TO ATTRACT OR RETAIN KEY PERSONNEL

     Our success  largely depends on the efforts and abilities of key executives
and  consultants,  including  Wayne Danson,  our  President and Chief  Financial
Officer.  The loss of the  services  of Mr.  Danson  could  materially  harm our
business  because  of the  cost  and  time  necessary  to  replace  and  train a
replacement.  Such a loss would also  divert  management's  attention  away from
operational issues. We do not presently maintain a key-man life insurance policy
for Mr. Danson.

                                       11
<PAGE>

ITEM 7.  FINANCIAL STATEMENTS

     The financial statements required by item 8 are included in the Form 10-KSB
beginning on page F-1.


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

     None.


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

     (a)  EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES:

     As of June 30, 2003, we carried out an  evaluation,  under the  supervision
and with the  participation  of our Chief Executive  Officer and Chief Financial
Officer,  of the  effectiveness  of the design and  operation of our  disclosure
controls and procedures.  Based on this evaluation,  our Chief Executive Officer
and  Chief  Financial  Officer  concluded  that  our  disclosure   controls  and
procedures  are  effective  in  timely  alerting  them to  material  information
required  to be  included  in our  periodic  reports  that  are  filed  with the
Securities  and Exchange  Commission.  It should be noted that the design of any
system  of  controls  is  based  in part  upon  certain  assumptions  about  the
likelihood of future events,  and there can be no assurance that any design will
succeed in achieving  its stated goals under all  potential  future  conditions,
regardless of how remote. In addition,  we reviewed our internal  controls,  and
there have been no  significant  changes in our  internal  controls  or in other
factors that could significantly affect those controls subsequent to the date of
their last valuation.

     (b)  CHANGES IN INTERNAL CONTROLS:

     There were no significant  changes in the Company's internal controls or in
other factors that could  significantly  affect these controls during the fiscal
year covered by this Report or from the end of the reporting  period to the date
of this Form 10-KSB.

                                       12
<PAGE>

                                    PART III


ITEM 9.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

     The following table sets forth the names and ages of our current  directors
and executive officers,  their principal offices and positions and the date each
such person became a director or executive  officer.  Our executive officers are
elected  annually by the Board of Directors.  Our directors serve one-year terms
until their  successors are elected.  The executive  officers serve terms of one
year or until their  death,  resignation  or removal by the Board of  Directors.
There are no family relationships or understandings between any of the directors
and executive officers.  In addition,  there was no arrangement or understanding
between any executive  officer and any other person pursuant to which any person
was selected as an executive officer.

     Our directors and officers are as follows:

 NAME AND ADDRESS                         AGE      POSITION
------------------------------------    ------     -----------------------------

 Wayne I. Danson                          50       President, Chief Financial
 420 Lexington Avenue                              Officer and Director
 New York, NY 10170

 Dr. Michael Finch                        55       Director
 37 Walnut Street
 Wellesley, MA 02481

 Jonathan J. Lichtman                     51       Director
 120 Palmetto Park Road
 Boca Raton, FL 33432

 Randall Prouty                           51       Director
 420 Lexington Avenue
 New York, NY 10170

 Wilbank J. Roche                         57       Director
 2530 Wilshire Boulevard
 Santa Monica, CA 90403


     The directors  named above will serve until the next annual  meeting of our
shareholders  or until  their  successors  shall be  elected  and  accept  their
positions.  Mr. Danson is party to a written consulting  agreement that entitled
him to  $20,000  per month in cash and stock for the  period  September  1, 2000
through August 31, 2001 and, as extended orally, to December 31, 2001. Effective
January 1, 2002,  Mr. Danson agreed to orally  extend his  consulting  agreement
with  Advanced  Communications  through  December  31, 2003 at a monthly rate of
$12,500. Mr. Danson is reimbursed for reasonable out-of-pocket expenses relating
to activities for Advanced Communications.

     Our directors do not receive any cash  compensation for their services as a
director, but are reimbursed for all of their out-of-pocket expenses incurred in
connection  with the  rendering of services as a director.  The  directors  were
compensated  through  the grant and  issuance  of 100,000  shares of  restricted
common  shares  for each of the fiscal  years  ended 2002 and 2001 in which they
have served as directors. No grant of shares was made for fiscal 2003.

     WAYNE I. DANSON,  PRESIDENT,  CHIEF  FINANCIAL  OFFICER AND  DIRECTOR.  Mr.
Danson has served as the Company's  Chief  Financial  Officer since  December 1,
1999,  was appointed a Director on January 3, 2000,  and appointed  President on
April 30,  2002.  Mr.  Danson is the  Managing  Director  and  Founder of Danson
Partners, LLC, a financial advisory firm specializing in middle market companies
in the real estate and technology industries.  Prior to forming Danson Partners,
LLC  in  May  1999,   Mr.   Danson  was   co-head  and   Managing   Director  of
PricewaterhouseCoopers  LLP's  Real  Estate  Capital  Markets  Group.  Prior  to
rejoining  PricewaterhouseCoopers in 1996, Mr. Danson was a Managing Tax Partner
with Kenneth  Leventhal & Company in New York and Washington  D.C., where he was
also  Kenneth  Leventhal's  National  Director  of its  International  and  Debt
Restructure Tax Practices.  Prior to his involvement  with Kenneth  Leventhal in
1988,  Mr.  Danson was a Managing  Director  with Wolper Ross & Co., Ltd. in New
York, a closely held financial services company specializing in financial tax,

                                       13
<PAGE>

pension  consulting,  designing  financial  instruments  and  providing  venture
capital and investment  banking services.  Mr. Danson graduated with honors from
Bernard M. Baruch College with a BBA in Accounting and an MBA in Taxation. He is
a certified  public  accountant and a member of the AICPA and the New York State
Society of CPAs.

     Mr.  Danson is a consultant to the Company who spends  approximately  20-30
hours, on average, per week on Company matters.

     JONATHAN J. LICHTMAN,  SECRETARY AND DIRECTOR. Mr. Lichtman was appointed a
Director on November 9, 1999 and is  currently a partner with the Boca Raton law
firm of Levinson & Lichtman,  LLP, where he specializes in structuring corporate
and partnership transactions,  including real estate syndications.  Mr. Lichtman
is also currently a general  partner of several real estate  partnerships in New
York,  North Carolina and Florida.  Prior to forming  Levinson and Lichtman LLP,
Mr. Lichtman was an attorney with English,  McCaughan and O'Bryan,  PA, where he
performed  legal work for domestic and  international  clients,  as well as real
estate partnerships and development.  Mr. Lichtman obtained his J.D. degree, cum
laude,  from Syracuse  University  College of Law and his LLM degree in taxation
from the  University  of Miami  School  of Law.  He is also a  certified  public
accountant and is licensed to practice law in Florida and New York.

     DR.  MICHAEL FINCH,  DIRECTOR.  Dr. Finch was appointed a Director on March
10,  1997 and  since  1998,  has been  Chief  Technology  Officer  of New  Media
Solutions,  responsible for the conception,  planning,  creation,  execution and
deployment  of all  software  products and  projects.  For the four years before
that,  he was employed by Media Forum (first in the UK, and then in the U.S.) as
Director  of  Product  Development.   He  was  responsible  for  developing  and
implementing  Media  Forum's  software   capabilities  and  strategy,   managing
technical  and complex  software  projects for high-end  clients,  and pre-sales
demonstrations  to clients of Media Forum's software stance and expertise.  From
1983 to 1993, Dr. Finch was a Financial Software Engineer,  who designed,  wrote
and implemented  sophisticated real-time computer programs for trading Financial
Instruments and Commodities on the Chicago and New York Futures exchanges. Prior
to 1983, Dr. Finch was a research scientist and mathematician,  with an academic
career at four UK universities. He obtained a Doctorate of Mathematics at Sussex
University for original  research into Einstein's  Theory of General  Relativity
and its application to Neutron Stars. He lectured at Queen Mary's College London
on advanced mathematics.

     RANDALL PROUTY, DIRECTOR. Mr. Prouty, was appointed a Director on March 10,
1997,  and is  currently  the  President  and CEO of World  Associates,  Inc., a
publicly traded development stage company.  Mr. Prouty served as Chairman of the
Board of the Company from November 30, 2001 until  December 12, 2002. He is also
the sole  owner of  Bristol  Capital,  Inc.,  a firm  active in  consulting  and
business  development work for companies seeking access to capital markets,  and
through  which he is  incubating  other  e-business  ventures.  Mr.  Prouty is a
licensed real estate and mortgage broker in the State of Florida.  His technical
background includes being a qualified  Webmaster and developing  e-businesses on
the web.

     WILBANK J. ROCHE, DIRECTOR. Mr. Roche was appointed a Director on March 25,
1999 and is  currently  a  principal  with the law firm of Roche & Holt in Santa
Monica,  California.  Mr. Roche was an honors  graduate  from the  University of
California  in  1976,  as well as from  Loyola  University  School  of Law,  Los
Angeles,  in 1979. He was admitted to the  California  State Bar in 1979 and has
been  practicing law actively since that time. Mr. Roche worked for law firms in
the Los Angeles area from 1976 to 1983, when he opened his own office.  In 1985,
he formed Roche & Holt.  Mr.  Roche's law practice has revolved  largely  around
representing  small businesses and their owners. In that regard, he has provided
legal services in connection with the formation, purchase, sale, and dissolution
of numerous entities,  as well as in connection with their on-going  operations.
In the past several  years,  he has devoted  substantial  time to clients in the
telecommunications business.

     COMMITTEES OF THE BOARD OF DIRECTORS

     In a board  meeting  held on May 15 2001,  both an audit  and  compensation
committee  was  established.  The  audit  committee  will  report  to the  board
regarding the appointment of our independent public  accountants,  the scope and
results of our annual  audits,  compliance  with our  accounting  and  financial
policies and  management's  procedures and policies  relative to the adequacy of
our internal  accounting  controls.  The audit committee is comprised of Messrs.
Prouty and Finch.  The  compensation  committee of the board of  directors  will
review and make recommendations to the board regarding our compensation policies
and all forms of  compensation  to be provided  to our  executive  officers.  In
addition,  the compensation  committee will review bonus and stock  compensation
arrangements  for all  employees.  The  compensation  committee  is comprised of
Messrs. Roche and Prouty.

     The Board of Directors also  established an  Acquisitions  Committee and an
Advanced Communications (Australia) Committee.  Messrs. Prouty, Danson, Lichtman
and Roche  currently  serve on the  Acquisitions  Committee and Messrs.  Prouty,

                                       14
<PAGE>

Danson,   Lichtman,  Roche  and  Finch  serve  on  the  Advanced  Communications
(Australia)  Committee,  which will address and make all  decisions  relating to
SpectruCell matters.


ITEM 10.  EXECUTIVE COMPENSATION

     SUMMARY COMPENSATION TABLE

     The  following  table shows all cash  compensation  accrued  and/or paid by
Advanced Communications,  as well as certain other compensation paid or accrued,
for the fiscal years ended June 30, 2003, 2002 and 2001. Other than as set forth
herein, no executive officer's cash salary and bonus exceeded $100,000 in any of
the applicable  years.  The following  information  includes the dollar value of
base salaries,  bonus awards,  the value of restricted  shares issued in lieu of
cash  compensation  and certain  other  compensation,  if any,  whether  paid or
deferred.
<TABLE>
<CAPTION>
                               ANNUAL COMPENSATION                  LONG-TERM COMPENSATION
                     ------------------------------------------- ------------------------------
                                                                          AWARDS     PAYOUTS
                                                                 ------------------- --------
                                                       OTHER     RESTRICTED
                                                      ANNUAL       STOCK     OPTIONS/  LTIP      ALL OTHER
                              SALARY        BONUS   COMPENSATION   AWARD(S)    SARS   PAYOUTS  COMPENSATION
NAME AND                   ------------     -----   ------------  ----------  ------- -------  -------------
PRINCIPAL POSITION   YEAR      ($)           ($)        ($)         ($)         (#)     ($)        ($)
-------------------- ----  ------------     -----   ------------  ----------  ------- -------  -------------
<S>                  <C>   <C>                <C>     <C>        <C>           <C>    <C>          <C>
Wayne I. Danson,     2003  $190,138(1)                           $     --
President and CFO    2002  $149,933(2)                           $110,000(2)
                     2001  $235,931(3)        --      --         $167,500(3)   --     --           --
-------------------

(1)  Represents  accrued fees and  out-of-pocket  expenses.  Mr. Danson received $3,000 in cash and $1,000 in
     stock for fiscal 2003 services rendered.

(2)  Represents accrued fees and out-of-pocket  expenses. Mr. Danson received $65,000 in cash for fiscal 2002
     services and $32,775 for  reimbursement  of prior and current  out-of-pocket  expenses.  Mr.  Danson was
     appointed President on April 30, 2002.

(3)  Represents the value of accrued fees and stock-based compensation earned by Mr. Danson during the fiscal
     year ended June 30, 2001.  Stock-based  compensation  amounted to $167,500.  Of accrued  consulting fees
     earned in the amount of $235,931,  only  $23,105 was paid in cash to Mr.  Danson.  In August  2001,  Mr.
     Danson agreed to receive  500,000  shares of our  restricted  common stock in lieu of $150,000 of unpaid
     consulting fees.
</TABLE>

     Advanced Communications has no deferred compensation, stock options, SAR or
other bonus  arrangements for its employees and/or directors.  During the fiscal
year ended June 30, 2003, all decisions  concerning  executive  compensation are
made by our compensation committee.

     EMPLOYMENT AND CONSULTING AGREEMENTS

     On November 29, 1999,  we entered into a consulting  agreement  with Danson
Partners, LLC to provide the functions customarily provided by a Chief Financial
Officer. As compensation for these services,  we paid $5,000 monthly in advance,
plus  100,000  restricted  shares  of  common  stock.  Starting  April 1,  2000,
compensation for these services  increased to $10,000 per month. On September 1,
2000,  we entered  into  another  one-year  consulting  agreement  with Wayne I.
Danson,  the Chief Financial  Officer. A signing bonus of 75,000 shares of stock
was issued,  valued at $67,500.  This contract  expired August 31, 2001, but was
orally  extended to December 31, 2001.  As  compensation,  Mr.  Danson  receives
$10,000 per month in cash and $10,000 per month in stock.  Effective  January 1,
2002,   Mr.   Danson   agreed  to  orally  extend  his  contract  with  Advanced
Communications through December 31, 2003, at a monthly rate of $12,500.


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

     The following table contains  information about the beneficial ownership of
our common stock as of October 1, 2003 for:

     o    each person who beneficially owns more than five percent of the common
          stock;

     o    each of our directors;

                                       15
<PAGE>

     o    the named executive officers; and

     o    all directors and executive officers as a group.

     Unless  otherwise  indicated,  the address for each person or entity  named
below is c/o Advanced Communications  Technologies,  Inc., 420 Lexington Avenue,
New York, NY 10170.

     Beneficial  ownership is  determined  in  accordance  with the rules of the
Securities and Exchange  Commission and generally  includes voting or investment
power with respect to securities.  Except as indicated by footnote,  and subject
to community  property  laws where  applicable,  the persons  named in the table
below have sole voting and investment power with respect to all shares of common
stock  shown as  beneficially  owned  by  them.  The  percentage  of  beneficial
ownership  is based on  280,474,473  shares of common  stock  outstanding  as of
October 1, 2003.
<TABLE>
<CAPTION>
                                                              COMMON STOCK
                                                           BENEFICIALLY OWNED
                                         --------------------------------------------------------
NAME/ADDRESS                                     NUMBER                      PERCENT(1)
---------------------------------------  ------------------------  ------------------------------
<S>                                              <C>                                     <C>
Advanced Communications Tech (Australia)         10,000,000(2)                           3.57%
Roger May                                        18,228,000(2)                           6.50%
Wayne Danson                                      2,811,214(3)                           1.00%
Jonathan J. Lichtman                              2,710,334(4)                           0.97%
Dr. Michael Finch                                   591,334                                 *
Randall Prouty                                    2,218,056                                 *
Wilbank Roche                                       650,000                                 *
                                         ------------------------  ------------------------------

All Officers and Directors as a Group             8,980,938                              3.20%
                                         ========================  ==============================

--------------------

(1)  Percentage of outstanding  shares is based on 280,474,473  shares of common stock outstanding
     as of October 1, 2003,  together with shares deemed  beneficially  owned by each shareholder.
     Beneficial  ownership  is  determined  in  accordance  with the rules of the  Securities  and
     Exchange  Commission  and  generally  includes  voting or  investment  power with  respect to
     securities.

(2)  No shares are owned  directly by Mr. May. All shares are  beneficially  owned through  Global
     Communications  Technologies Pty Ltd, an entity controlled by Mr. May. Global  Communications
     Technologies  owns  a  majority  of  the  shares  of  Advanced  Communications   Technologies
     (Australia) Pty Ltd which owns 10,000,000 shares of the Company.

(3)  Includes  2,461,214 shares  beneficially  owned by Mr. Danson's  affiliated  entity and adult
     children.

(4)  Excludes 396,666 shares beneficially owned through various family trusts. Mr. Lichtman has no
     beneficial ownership in these shares.

*    Less than 1%.
</TABLE>

ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     On  January  15,  2002,   Advanced   Communications   moved  its  corporate
headquarters from Irvine to El Segundo,  California.  The lease has a three-year
term commencing on January 1, 2002. As of August 1, 2002, the Company  relocated
its principal  executive  office from  California to 420 Lexington  Avenue,  New
York, NY 10170 within the office facility of Danson  Partners,  LLC, a privately
owned company that employs our President and Chief Financial Officer. No rent or
facility use fee is charged to the Company by Danson Partners, LLC.

     On  September  1, 2000,  Mr.  Danson  entered  into a  one-year  consulting
agreement  with our company for the period  September 1, 2000 through August 31,
2001. Under the terms of the consulting  agreement,  Mr. Danson received $10,000
per month in cash and $10,000 per month in stock for his services.  Mr. Danson's
agreement expired on August 31, 2001. Mr. Danson has agreed to orally extend his
consulting agreement with Advanced Communications through December 31, 2003 at a
monthly rate of $12,500.  As of June 30, 2003, the Company owes Danson Partners,
LLC $274,911 for unpaid consulting fees and expenses.

                                       16
<PAGE>

     Jonathan J. Lichtman, Secretary and a director of the Company, is a partner
at  Levinson &  Lichtman,  LLP, a law firm in Boca  Raton,  FL that the  Company
retained to provide legal  services  during the fiscal years 2003 and 2002.  The
Company has paid Levinson & Lichtman,  LLP $0 and $43,184 and $1,000 and $90,000
in the form of cash and stock  respectively,  for legal services rendered during
fiscal years 2003 and 2002.

     Wilbank Roche,  a director of the Company,  is a partner at Roche & Holt, a
law firm in Los Angeles,  CA that the Company retained to provide legal services
during the fiscal years 2003 and 2002.  The Company has paid Roche & Holt $0 and
$13,515 and $1,000 and $15,000 in the form of cash and stock, respectively,  for
legal services rendered during the fiscal years ended 2003 and 2002.

     Effective  July 1, 2002,  the Company  entered into a six month  consulting
agreement  with  Randall  Prouty,  Chairman  of the Board and a director  of the
Company,  pursuant to which Mr.  Prouty has agreed to provide  certain  business
services, such as dispute resolution,  corporate communications  strategies, and
business  acquisitions  to the Company.  Pursuant to the terms of the consulting
agreement,  Mr. Prouty will accrue $10,000 in monthly  compensation for services
provided to the Company. During the fiscal year ended June 30, 2002, the Company
issued 1,100,000 shares of restricted  common stock having a value of $55,000 to
Mr. Prouty and $10,986 in cash  compensation for business  services  rendered to
the Company.  Mr. Prouty's contract expired December 31, 2002. During the fiscal
year ended June 30, 2003,  the Company paid Mr. Prouty $0 and $1,000 in the form
of cash and stock respectively, for services rendered.


ITEM 13.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

     (a)  FINANCIAL STATEMENTS:

          (i)  Registrant.

     (b)  EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K:

          (i)  Exhibits:
<TABLE>
<CAPTION>
EXHIBIT NO.    DESCRIPTION                                   LOCATION
-----------    --------------------------------------------  -------------------------------------
<S>            <C>                                           <C>
1.1            Exchange Agreement between MRC Legal          Incorporated by reference to Exhibit
               Services Corporation and Advanced             1.1 to Company's Form 8-K filed on
               Communications Technologies, Inc. dated as    February 4, 2000
               of January 31, 2000

2.1            Articles of Incorporation of Media Forum      Incorporated by reference to Exhibit
               International, Inc.                           2.1 to the Company's Form S-8 filed
                                                             on February 9, 2000

2.2            Second Amendment to Articles of               Incorporated by reference to Exhibit
               Incorporation of Telenetworx, Inc.            2.2 to the Company's Form S-8 filed
                                                             on February 9, 2000

2.3            Third Amendment to Articles of                Incorporated by reference to Exhibit
               Incorporation of Media Forum International,   2.3 to the Company's Form S-8 filed
               Inc.                                          on February 9, 2000

2.4            Bylaws of the Company                         Incorporated by reference to Exhibit
                                                             2.4 to the Company's Form S-8 filed
                                                             on February 9, 2000

2.5            Articles of Incorporation as currently in     Incorporated by reference to Exhibit
               effect for the Company                        3.1 to Form S-1 Registration
                                                             Statement filed on August 14, 2001

2.6            Bylaws, as currently in effect                Incorporated by reference to Exhibit
                                                             3.2 to Form S-1 Registration
                                                             Statement filed on August 14, 2001

                                                 17
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT NO.    DESCRIPTION                                   LOCATION
-----------    --------------------------------------------  -------------------------------------
<S>            <C>                                           <C>
2.7            Fourth Amendment to Articles of               Incorporated by reference to Exhibit
               Incorporation                                 2.7 to the Form SB-2 filed with the
                                                             SEC on March 5, 2002
2.8            Fifth Amendment to Articles of Incorporation  Incorporated by reference to Exhibit
                                                             2.8 to the Form SB-2 filed with the
                                                             SEC on July 16, 2003

10.1           Lease Agreement dated as of November 27,      Incorporated by reference to Exhibit
               2001 between the Company and Continental      10.1 to the Form SB-2 filed with the
               Development, L. P. II                         SEC on March 5, 2002

10.2           Stock Purchase Agreement between Advanced     Incorporated by reference to Exhibit
               Communications Technologies, Inc. and         10.2 to the Form S-1 Registration
               Advanced Communications Technologies          Statement filed on August 14, 2001
               (Australia) Pty Ltd.

10.3           Agreement dated June 27, 2000, between        Incorporated by reference to Exhibit
               Ladenburg Thalmann & Co. and the Company      10.3 to the Company's Form S-1
                                                             Registration Statement filed on
                                                             August 14, 2001

10.4           Common Stock Purchase Agreement dated         Incorporated by reference to Exhibit
               December 14, 2000, between the Company and    10.4 to the Company's Form S-1
               Wanquay Ltd.                                  Registration Statement filed on
                                                             August 14, 2001

10.5           Registration Rights Agreement dated           Incorporated by reference to Exhibit
               December 14, 2000, between the Company and    10.5 to the Company's Form S-1
               Wanquay Ltd.                                  Registration Statement filed on
                                                             August 14, 2001

10.6           Escrow Agreement dated December 14, 2000,     Incorporated by reference to Exhibit
               among the Company, Wanquay Ltd. and Epstein   10.6 to the Company's Form S-1
               Becker & Green                                Registration Statement filed on
                                                             August 14, 2001

10.7           Consulting Agreement with M. Richard Cutler   Incorporated by reference to Exhibit
               dated January 31, 2000                        10.1 to the Company's Form S-8 filed
                                                             on February 9, 2000

10.8           Stock Purchase Agreement dated April 5,       Incorporated by reference to Exhibit
               2000, between Advanced Communications         10.5 to the Company's Form 10-QSB
               Technologies, Inc. and Advanced               filed on May 24, 2000
               Communications Technologies Pty Ltd.

10.9           Securities Purchase Agreement dated January   Incorporated by referenced to
               10, 2002, by and among Advanced               Exhibit 10.9 to the Company's Form
               Communications Technologies, Inc. and Buyers  10-QSB filed on February 12, 2002

10.10          Investor Registration Rights Agreement        Incorporated by reference to Exhibit
               dated January 10, 2002, by and among          10.10 to the Company's Form 10-QSB
               Advanced Communications Technologies, Inc.    filed on February 12, 2002
               and Investors

10.11          Transfer Agent Instructions                   Incorporated by reference to Exhibit
                                                             10.11 to the Company's Form 10-QSB
                                                             filed on February 12, 2002

10.12          Escrow Agreement dated January 10, 2002, by   Incorporated by reference to Exhibit
               and among Advanced Communications             10.12 to the Company's Form 10-QSB
               Technologies, Inc., Buyers and First Union    filed on February 12, 2002
               National Bank

                                                18
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT NO.    DESCRIPTION                                   LOCATION
-----------    --------------------------------------------  -------------------------------------
<S>            <C>                                           <C>
10.13          Equity Line of Credit Agreement dated July    Incorporated by reference to Exhibit
               2003, by and between Cornell Capital          10.13 to the Form SB-2 filed with
               Partners, LP and Advanced Communications      the SEC on July 16, 2003
               Technologies, Inc.

10.14          Registration Rights Agreement dated July      Incorporated by reference to Exhibit
               2003, by and between Advanced                 10.14 to the Form SB-2 filed with
               Communications Technologies, Inc.             the SEC on July 16, 2003

10.15          Placement Agent Agreement dated July 2003,    Incorporated by reference to Exhibit
               by and between Advanced Communications        10.15 to the Form SB-2 filed with
               Technologies, Inc. and Westrock Advisors,     the SEC on July 16, 2003
               Inc.

10.16          Escrow Agreement dated July 2003, by and      Incorporated by reference to Exhibit
               among Advanced Communications Technologies,   10.16 to the Form SB-2 filed with
               Inc., Cornell Capital Partners, LP, Butler    the SEC on July 16, 2003
               Gonzalez LLP and First Union National Bank

10.17          License and Distribution Agreement dated as   Incorporated by reference to Exhibit
               of July 5, 2000, between Advanced             10.17 to the Company's Amendment to
               Communications Technologies, Inc. and         Form 10-KSB filed on May 23, 2002
               Advanced Communications Technologies
               (Australia) Pty. Ltd.

10.18          Letter of Intent dated September 7, 2001      Incorporated by reference to Exhibit
               re: Purchase of Advanced Communications       10.18 to Amendment No. 1 to the
               (Australia)                                   Company's Form 10-QSB for the
                                                             quarter ended December 31, 2001

10.19          Securities Purchase Agreement, dated          Incorporated by reference to Exhibit
               November 2002, by and among Advanced          10.19 to the Company's Form 10-KSB
               Communications and Buyers                     for the year ended June 30, 2002
                                                             filed on December 6, 2002

10.20          Investor Registration Rights Agreement,       Incorporated by reference to Exhibit
               dated November 2002, by and among Advanced    10.20 to the Company's Form 10-KSB
               Communications and Investors                  for the year ended June 30, 2002
                                                             filed on December 6, 2002

10.21          Secured Convertible Debenture                 Incorporated by reference to Exhibit
                                                             10.21 to the Company's Form 10-KSB
                                                             for the year ended June 30, 2002
                                                             filed on December 6, 2002

10.22          Escrow Agreement, dated November 2002, by     Incorporated by reference to Exhibit
               and among Advanced Communications, Buyers,    10.22 to the Company's Form 10-KSB
               and Wachovia Bank, N.A.                       for the year ended June 30, 2002
                                                             filed on December 6, 2002

10.23          Irrevocable Transfer Agent Instructions,      Incorporated by reference to Exhibit
               dated November 2002                           10.23 to the Company's Form 10-KSB
                                                             for the year ended June 30, 2002
                                                             filed on December 6, 2002

10.24          Security Agreement, dated November 2002, by   Incorporated by reference to Exhibit
               and among Advanced Communications and         10.24 to the Company's Form 10-KSB
               Buyers                                        for the year ended June 30, 2002
                                                             filed on December 6, 2002

                                                19
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT NO.    DESCRIPTION                                   LOCATION
-----------    --------------------------------------------  -------------------------------------
<S>            <C>                                           <C>
10.25          Middletons Lawyers Letter, dated November     Incorporated by reference to Exhibit
               11, 2002, terminating the April 2000 Stock    10.25 to the Company's Form 10-KSB
               Purchase Agreement between Advanced           for the year ended June 30, 2002
               Communications Technologies, Inc. and         filed on December 6, 2002
               Advanced Communications (Australia)

10.26          Consulting Agreement dated July 1, 2002,      Incorporated by reference to Exhibit
               between Advanced Communications and Randall   10.26 to the Company's Third Amended
               H. Prouty                                     Form 10-KSB for the year ended June
                                                             30, 2002 filed on June 13, 2003

10.27          Proxy Statement, dated March 25, 1999         Incorporated by reference to Exhibit
                                                             10.27 to the Company's Third Amended
                                                             Form 10-KSB for the year ended June
                                                             30, 2002 filed on June 13, 2003

31.1           Certification by Chief Executive Officer      Provided herewith
               and Chief Financial Officer pursuant to
               Sarbanes-Oxley Section 302

32.1           Certification by Chief Executive Officer      Provided herewith
               and Chief Financial Officer pursuant to 18
               U.S. C. Section 1350:
</TABLE>


          (ii) Reports on Form 8-K:

     None.


ITEM 14.  PRINCIPAL ACCOUNTANT FEES AND SERVICES

     AUDIT FEES. The aggregate fees billed for  professional  services  rendered
was  $32,143  and  $44,818  for the  audit  of the  Company's  annual  financial
statements for the fiscal years ended June 30, 2003 and 2002, respectively,  and
the reviews of the financial  statements  included in the Company's Forms 10-QSB
for those fiscal years.

     AUDIT-RELATED  FEES.  The  aggregate  fees  billed  in each of the last two
fiscal years for assurance and related services by the principal accountant that
are  reasonably  related  to the  performance  of the  audit  or  review  of the
Company's financial statements and not reported under the caption "Audit Fee."

     TAX FEES.  No fees were  billed  in each of the last two  fiscal  years for
professional  services rendered by the principal  accountant for tax compliance,
tax advice and tax planning services.

     ALL OTHER FEES. Other than the services described above, the aggregate fees
billed for  services  rendered  by the  principal  accountant  was  $16,099  and
$18,364,  respectively, for the fiscal years ended June 30, 2003 and 2002. These
fees related to the review of the Company's Registration Statement.

                                       20
<PAGE>

                                   SIGNATURES

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

                                   ADVANCED COMMUNICATIONS TECHNOLOGIES, INC.

                                   By:     /s/ Wayne I. Danson
                                      ------------------------------------------
                                   Name:   Wayne I. Danson
                                   Title:  President and Chief Financial Officer
                                   Date:   October 10, 2003

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

<TABLE>
<CAPTION>
SIGNATURE                             TITLE                          DATE
---------                             -----                          ----
<S>                             <C>                                  <C>
/s/ Wayne I. Danson
---------------------------     President (Principal Executive       October 10, 2003
Wayne I. Danson                 Officer), Chief Financial Officer
                                (Principal Accounting Officer)
                                and Director



/s/ Jonathan Lichtman, Esq.
---------------------------     Secretary and Director               October 10, 2003
Jonathan Lichtman, Esq.



/s/ Dr. Michael Finch
---------------------------     Director                             October 10, 2003
Dr. Michael Finch



/s/ Wilbank J. Roche, Esq.
---------------------------     Director                             October 10, 2003
Wilbank J. Roche, Esq.

                                          86
</TABLE>
<PAGE>

                                  EXHIBIT 31.1


                   ADVANCED COMMUNICATIONS TECHNOLOGIES, INC.
                  OFFICER'S CERTIFICATE PURSUANT TO SECTION 302

     I, Wayne I. Danson,  the President and Chief Financial  Officer of Advanced
Communications Technologies, Inc. certify that:

     1.   I  have   reviewed   this  Form  10-KSB  of  Advanced   Communications
Technologies, Inc.;

     2.   Based on my  knowledge,  this  report  does  not  contain  any  untrue
statement of a material fact or omit to state a material fact  necessary to make
the statements made, in light of the  circumstances  under which such statements
were made, not misleading with respect to the period covered by this report;

     3.   Based on my knowledge,  the financial statements,  and other financial
information included in this report, fairly present in all material respects the
financial condition,  results of operations and cash flows of the small business
issuer as of, and for, the periods presented in this report;

     4.   The small  business  issuer's  other  certifying  officer(s) and I are
responsible for establishing and maintaining  disclosure controls and procedures
(as  defined  in  Exchange  Act Rules  13a-15(e)  and  15d-15(e))  for the small
business issuer and have:

          (a)  Designed such disclosure controls and procedures,  or caused such
disclosure  controls and  procedures to be designed  under our  supervision,  to
ensure  that  material  information  relating  to  the  small  business  issuer,
including its  consolidated  subsidiaries,  is made known to us by others within
those  entities,  particularly  during the period in which this  report is being
prepared;

          (b)  Omitted;

          (c)  Evaluated  the  effectiveness  of  the  small  business  issuer's
disclosure  controls and procedures and presented in this report our conclusions
about the effectiveness of the disclosure controls and procedures, as of the end
of the period covered by this report based on such evaluation; and

          (d)  Disclosed  in  this  report  any  change  in the  small  business
issuer's  internal  control over financial  reporting  that occurred  during the
small business  issuer's most recent fiscal quarter (the small business issuer's
fourth  fiscal  quarter  in the case of an annual  report)  that has  materially
affected,  or is reasonably  likely to  materially  affect,  the small  business
issuer's internal control over financial reporting; and

     5.   The small  business  issuer's other  certifying  officer(s) and I have
disclosed,  based  on our  most  recent  evaluation  of  internal  control  over
financial  reporting,  to the small  business  issuer's  auditors  and the audit
committee  of the  small  business  issuer's  board  of  directors  (or  persons
performing the equivalent functions):

          (a)  All  significant  deficiencies  and  material  weaknesses  in the
design or  operation  of internal  control over  financial  reporting  which are
reasonably  likely to adversely  affect the small business  issuer's  ability to
record, process, summarize and report financial information; and

          (b)  Any fraud,  whether or not material,  that involves management or
other  employees  who have a  significant  role in the small  business  issuer's
internal control over financial reporting.

Date: October 10, 2003              /s/ Wayne I. Danson
                                    --------------------------------------------
                                    Wayne I. Danson
                                    President and Chief Financial Officer

     The introductory  paragraph of Section 4 of this  certification that refers
to the certifying  officers'  responsibility  for  establishing  and maintaining
internal control over financial  reporting for the company, as well as paragraph
4(b),  have been omitted in accordance  with Release No.  33-8238 (June 5, 2003)
because the compliance period has been extended for small business issuers until
the first fiscal year ending on or after April 15, 2005.

                                EXHIBIT 31.1 - 1
<PAGE>

                                  EXHIBIT 32.1


                   ADVANCED COMMUNICATIONS TECHNOLOGIES, INC.
          CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED
           PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

     In   connection   with  the  Annual   Report  of  Advanced   Communications
Technologies,  Inc.  (the  Company) on Form 10-KSB for the period ended June 30,
2003 as filed with the  Securities  and Exchange  Commission  on the date hereof
(the Report),  I, Wayne I. Danson,  President and Chief Financial Officer of the
Company,  certify, pursuant to 18 U.S.C. ss.1350, as adopted pursuant to Section
906 of the Sarbanes-Oxley Act of 2002, that:

     (1)  The Report fully  complies with the  requirements  of section 13(a) or
15(d) of the Securities Exchange Act of 1934; and

     (2)  The  information  contained  in the  Report  fairly  presents,  in all
material  respects,  the  financial  condition  and results of operations of the
Company.

     A signed  original of this  written  statement  required by Section 906 has
been provided to Advanced Communications Technologies, Inc. and will be retained
by Advanced  Communications  Technologies,  Inc. and furnished to the Securities
and Exchange Commission or its staff upon request.

Date:  October 10, 2003                 /s/ Wayne I. Danson
                                        ----------------------------------------
                                        Wayne I. Danson
                                        President and Chief Financial Officer

     A signed  original of this  written  statement  required by Section 906, or
other  document  authentications,   acknowledging,  or  otherwise  adopting  the
signature  that  appears in typed form  within  the  electronic  version of this
written  statement  required  by Section  906,  has been  provided  to  Advanced
Communications   Technologies,   Inc.   and  will  be   retained   by   Advanced
Communications  Technologies,  Inc. and furnished to the Securities and Exchange
Commission or its staff upon request.

                                EXHIBIT 32.1 - 1
<PAGE>

                             ADVANCED COMMUNICATIONS
                       TECHNOLOGIES, INC. AND SUBSIDIARIES
                        CONSOLIDATED FINANCIAL STATEMENTS
                          AS OF JUNE 30, 2003 AND 2002


                                      F-i
<PAGE>

                   ADVANCED COMMUNICATIONS TECHNOLOGIES, INC.
                                AND SUBSIDIARIES



                                    CONTENTS


PAGE         1       INDEPENDENT AUDITORS' REPORT

PAGE         2       CONSOLIDATED BALANCE SHEETS AS OF JUNE 30, 2003 AND 2002

PAGE         3       CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE YEARS ENDED
                     JUNE 30, 2003 AND 2002

PAGE         4       CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS'
                     DEFICIENCY FOR THE YEARS ENDED JUNE 30, 2003 AND 2002

PAGE       5 - 6     CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED
                     JUNE 30, 2003 AND 2002

PAGES     7 - 21     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                      F-ii
<PAGE>

                          INDEPENDENT AUDITORS' REPORT


To the Board of Directors of:
  Advanced Communications Technologies, Inc. and Subsidiaries

We have  audited  the  accompanying  consolidated  balance  sheets  of  Advanced
Communications  Technologies,  Inc., and Subsidiaries ("Company") as of June 30,
2003 and 2002 and the related consolidated statements of operations,  changes in
stockholders'  deficiency  and cash flows for the years  ended June 30, 2003 and
2002. These  consolidated  financial  statements are the  responsibility  of the
Company's  management.  Our  responsibility  is to  express  an opinion on these
consolidated financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the  United  States of  America.  Those  standards  require  that we plan and
perform the audits to obtain reasonable assurance about whether the consolidated
financial  statements  are free of  material  misstatement.  An  audit  includes
examining,  on a test basis,  evidence supporting the amounts and disclosures in
the  consolidated  financial  statements.  An audit also includes  assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation.  We believe that our
audits provide a reasonable basis for our opinion.

In our opinion, the consolidated  financial statements referred to above present
fairly  in  all  material   respects,   the   financial   position  of  Advanced
Communications Technologies, Inc. and Subsidiaries as of June 30, 2003 and 2002,
and the  results of their  operations  and their cash flows for the years  ended
June 30,  2003 and  2002 in  conformity  with  accounting  principles  generally
accepted in the United States of America.

The accompanying  consolidated  financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in Note 8 to the
consolidated financial statements,  the Company's net loss of $1,869,031 for the
year ended June 30, 2003, a working capital deficiency of $4,044,795, a negative
cash  flow  from  operations  of  $123,566  and a  stockholders'  deficiency  of
$5,960,174  raise  substantial  doubt  about its  ability to continue as a going
concern.  Management's  plans in regards to these matters are also  described in
Note 8. The accompanying  consolidated  financial  statements do not include any
adjustments that might result from the outcome of this uncertainty.



WEINBERG & COMPANY, P.A.

Boca Raton, Florida
October 2, 2003

                                     F-iii
<PAGE>

<TABLE>
<CAPTION>
                      ADVANCED COMMUNICATIONS TECHNOLOGIES, INC. AND SUBSIDIARIES
                                      CONSOLIDATED BALANCE SHEETS
                               FOR THE YEARS ENDED JUNE 30, 2003 AND 2002


                                                                             JUNE 30,
                                                             -----------------------------------------
                                                                    2003                 2002
                                                             -----------------------------------------
                                                 ASSETS
                                                 ------
<S>                                                         <C>                    <C>
    CURRENT ASSETS
    Cash                                                      $       22,527       $       11,093
                                                             -------------------- --------------------
    TOTAL CURRENT ASSETS                                              22,527               11,093
                                                             -------------------- --------------------
    PROPERTY AND EQUIPMENT (NET)                                           -               17,274
                                                             -------------------- --------------------
    OTHER ASSETS
    Security Deposits                                                  7,700               13,225
    Other Receivables                                                      -                9,927
    Deferred Financing Costs, net of accumulated
      amortization                                                    40,521               63,333
                                                             -------------------- --------------------
   TOTAL OTHER ASSETS                                                 48,221               86,485
                                                             -------------------- --------------------

TOTAL ASSETS                                                  $       70,748       $      114,852
------------                                                 ==================== ====================

                                LIABILITIES AND STOCKHOLDERS' DEFICIENCY
                                ----------------------------------------

LIABILITIES
    CURRENT LIABILITIES
    Accounts Payable                                          $    1,560,165        $     872,493
    Accrued Compensation                                             172,183              172,183
    Loan Payable to Shareholder                                    1,055,736            1,055,736
    8% Note Payable-Current Portion                                   57,831                    -
    12% Note Payable                                                  35,000                    -
    12% Convertible Debentures                                             -              100,407
    5% Convertible Debentures due 1/04                               944,000            1,000,000
    Interest Payable                                                 242,407               62,917
                                                             -------------------- --------------------
    TOTAL CURRENT LIABILITIES                                      4,067,322            3,263,736
                                                             -------------------- --------------------
    LONG-TERM LIABILITIES
    10% Secured Convertible Debentures due 11/04, net of
      discount of $130,729                                            56,771                    -
    8% Note Payable-Non Current Portion                              115,663                    -
    Note Payable-ACT-Australia                                     1,791,166            1,791,166
                                                             -------------------- --------------------
    TOTAL LONG TERM LIABILITIES                                    1,963,600            1,791,166
                                                             -------------------- --------------------

TOTAL LIABILITIES                                                  6,030,922            5,054,902
                                                             -------------------- --------------------

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' DEFICIENCY
    Preferred Stock, $.01 Par Value, 25,000,000 Shares
      Authorized, none issued and outstanding                              -                    -
    Common Stock, No Par Value, 200,000,000 Shares
      Authorized, 198,852,622 and 114,102,622 shares
      issued and outstanding, respectively                        25,945,005           25,471,098
    Deferred Commitment fees, net of accumulated
      amortization                                                  (187,500)            (562,500)
    Accumulated Deficit                                          (31,717,679)         (29,848,648)
                                                             -------------------- --------------------
    TOTAL STOCKHOLDERS' DEFICIENCY                                (5,960,174)          (4,940,050)
                                                             -------------------- --------------------

TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIENCY                $       70,748       $      114,852
----------------------------------------------               ==================== ====================

                      See accompanying notes to consolidated financial statements

                                                  F-1
</TABLE>
<PAGE>
<TABLE>
                      ADVANCED COMMUNICATIONS TECHNOLOGIES, INC. AND SUBSIDIARIES
                                 CONSOLIDATED STATEMENTS OF OPERATIONS
                               FOR THE YEARS ENDED JUNE 30, 2003 AND 2002
<CAPTION>
                                                                             JUNE 30,
                                                             -----------------------------------------
                                                                   2003                    2002
                                                             -----------------       -----------------
<S>                                                          <C>                     <C>
REVENUES                                                     $             -         $            -

OPERATING EXPENSES

     Consulting Fees                                                  18,587                (10,149)
     Depreciation and Amortization                                   425,812                508,167
     Impairment of Fixed Assets                                       14,274                      -
     Loss from impairment of goodwill                                      -              1,700,000
     Professional Fees                                               629,741              1,228,780
     Other Selling, General and Administrative Expenses              128,362                407,772
     Stock-Based Compensation                                              -                180,000
                                                             -----------------       -----------------

TOTAL OPERATING EXPENSES                                           1,216,776              4,014,570
                                                             -----------------       -----------------

LOSS FROM OPERATIONS                                              (1,216,776)            (4,014,570)
                                                             -----------------       -----------------

OTHER EXPENSES
     Interest expense                                               (428,761)              (318,123)
     Lawsuit Settlements                                            (223,494)                     -
                                                             -----------------       -----------------

TOTAL OTHER EXPENSES                                                (652,255)              (318,123)
                                                             -----------------       -----------------

NET LOSS                                                     $    (1,869,031)        $   (4,332,693)
--------                                                     =================       =================

Net Loss Per Share- Basic and Dilutive                       $         (0.01)        $        (0.04)
                                                             =================       =================

Weighted Average Number of Shares

Outstanding During the Period- Basic and Dilutive                152,960,499            100,576,484
                                                             =================       =================


                      See accompanying notes to consolidated financial statements

                                                  F-2
</TABLE>
<PAGE>
<TABLE>

                                     ADVANCED COMMUNICATIONS TECHNOLOGIES, INC. AND SUBSIDIARIES
                                   CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIENCY
                                             FOR THE YEARS ENDED JUNE 30, 2003 AND 2002
<CAPTION>
                                                                                COMMON STOCK
                                       COMMON STOCK                             TO BE ISSUED            DEFFERRED
                                --------------------------    ACCUMULATED   -----------------------     COMMITMENT
                                  SHARES         AMOUNT         DEFICIT      SHARES       AMOUNT           FEES          TOTAL
                                ------------   -------------------------------------------------------------------------------------
<S>                               <C>          <C>           <C>            <C>          <C>          <C>             <C>
BALANCE AT JUNE 30, 2001           94,489,916  $22,696,193   $(25,515,955)   833,334     $250,000     $       -       $(2,569,762)
                                ----------------------------------------------------------------------------------------------------

Stock issued for services           6,334,679      677,634                    (33,334)    (10,000)                        667,634
Stock issued for extinguishments
  of debt                           1,190,000      357,001                                                                357,001
Stock issued for conversion of
  convertible debt                  4,250,000      100,343                                                                100,343
Stock issued for cash               1,233,333      260,000                  (800,000)    (240,000)                         20,000
Stock warrants issued for cash              -      110,000                                                                110,000
Stock issued for offering costs       137,727            -                                                                      -
Stock and warrants issued from
  repricing of previously issued
  shares                            2,146,967            -                                                                      -
Stock issued to Directors for
  services                          1,000,000      180,000                                                                180,000
Stock issued for commitment fees    3,000,000      750,000                                             (562,500)          187,500
Capital contribution                        -        9,927                                                                  9,927
Stock issued in settlement of
  lawsuit                             320,000       80,000                                                                 80,000
Interest on beneficial conversion-
  Convertible Debentures                    -      250,000                                                                250,000

Net (loss) for the year                                        (4,332,693)                                             (4,332,693)
                                ----------------------------------------------------------------------------------------------------

BALANCE AT JUNE 30, 2002          114,102,622   25,471,098    (29,848,648)          -    $      -      (562,500)       (4,940,050)
                                ----------------------------------------------------------------------------------------------------

Stock issued for services             500,000        5,000                                                                  5,000
Stock issued for conversion of
  convertible debt                 84,250,000      218,907                                                                218,907
Interest on beneficial
  conversion-Convertible
  Debentures                                       250,000                                                                250,000
Amortization of deferred
  commitment fees                                                                                       375,000           375,000
Net loss for the year                                          (1,869,031)                                             (1,869,031)
                                ----------------------------------------------------------------------------------------------------

BALANCE AT JUNE 30, 2003          198,852,622  $25,945,005   $(31,717,679)          -    $      -     $(187,500)      $(5,960,174)
------------------------        ====================================================================================================

                                    See accompanying notes to consolidated financial statements

                                                                F-3
</TABLE>
<PAGE>
<TABLE>
                      ADVANCED COMMUNICATIONS TECHNOLOGIES, INC. AND SUBSIDIARIES
                                 CONSOLIDATED STATEMENTS OF CASH FLOWS
                               FOR THE YEARS ENDED JUNE 30, 2003 AND 2002
<CAPTION>
                                                                            JUNE 30,
                                                            ------------------------------------------
                                                                    2003                 2002
                                                            --------------------- --------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
-------------------------------------
<S>                                                              <C>                  <C>
Net loss                                                         $   (1,869,031)      $   (4,332,693)

Adjustments to reconcile net loss to net cash used in
  operating activities:

Depreciation and amortization                                            545,083              508,167

Stock issued for services                                                  5,000              847,634

Stock issued in settlement of lawsuit                                          -               80,000

Lawsuit Settlements                                                      223,494                    -

Loss from impairment of goodwill                                               -            1,700,000

Impairment of Fixed Assets                                                14,274                    -

Interest Expense on Beneficial Conversion Feature                              -              250,000

Changes in operating assets and liabilities:

(Increase) decrease in assets

  Prepaid expense                                                              -               10,000

  Deposits and other receivables                                          15,452                7,700

Increase (decrease) in liabilities:

  Accounts payable and accrued expenses                                  637,672               28,288

  Interest payable                                                       304,490               62,917

  Deferred revenue and other                                                   -               41,600

  Accrued compensation                                                         -            (306,867)
                                                            --------------------- --------------------

     Net cash used in operating activities                             (123,566)          (1,103,254)
                                                            --------------------- --------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
-------------------------------------

Purchase of fixed assets                                                       -              (1,675)

Repayment of loan to unconsolidated affiliate                                  -             (25,000)
                                                            --------------------- --------------------

     Net cash used in investing activities                                     -             (26,675)
                                                            --------------------- --------------------
CASH FLOWS FROM FINANCING ACTIVITES:
------------------------------------

Repayment of note payable                                                      -            (118,530)

Loan proceeds from shareholder                                                 -              259,736

Proceeds from issuance of common stock
  and warrants net of offering costs                                           -              130,000

Proceeds from issuance of convertible debentures, net                    100,000              889,000

Proceeds from short-term loan                                             35,000              299,000

Repayment of short-term loan                                                   -            (325,000)
                                                            --------------------- --------------------

     Net cash provided by financing activities                           135,000            1,134,206
                                                            --------------------- --------------------
Net increase in cash
                                                                          11,434                4,277

Cash at beginning of year                                                 11,093                6,816
                                                            --------------------- --------------------

CASH AT END OF YEAR                                                 $     22,527         $     11,093
-------------------                                         ===================== ====================

                                                  F-4
</TABLE>
<PAGE>


     SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:

     During the year ended June 30, 2003, the Company issued 4,250,000 shares of
common stock valued at $100,407 in full  settlement  of the  September  1999 12%
Senior Secured Convertible Debentures.

     During the year ended June 30, 2003,  the Company  issued 500,000 shares of
common  stock valued at $5,000 in partial  settlement  of unpaid prior legal and
consulting fees.

     During the year ended June 30,  2003,  the  Company  converted  $125,000 of
accrued interest into 10% Secured Convertible Debentures and incurred $25,000 of
financing  costs  associated  with the  issuance of its 10% Secured  Convertible
Debentures.

     During the year ended June 30,  2003,  the Company  issued  17,500,000  and
62,500,000  shares  of  common  stock  valued  at  $56,000  and  $62,500  on the
conversion  of  5%  Convertible  Debentures  and  10%  Convertible   Debentures,
respectively.

     During the year ended June 30, 2002, the Company issued 1,190,000 shares of
common stock,  valued at $357,001,  in partial  payment of notes payable held by
Advanced Communications (Australia), a non-related company.

     During the year ended June 30, 2002 the Company issued  4,250,000 shares of
common stock,  valued at $100,343,  for the conversion of its September 1999 12%
Secured Convertible Debentures.

                                      F-4A
<PAGE>

           ADVANCED COMMUNICATIONS TECHNOLOGIES, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   FOR THE YEARS ENDED JUNE 30, 2003 AND 2002


NOTE 1.  BASIS OF CONSOLIDATION AND SIGNIFICANT ACCOUNTING POLICIES

(A)  ORGANIZATION

     Unless the context  requires  otherwise,  "we",  "us",  or "our"  refers to
Advanced  Communications  Technologies,  Inc. and subsidiaries  ("Company") on a
consolidated basis.

     Advanced  Communications  Technologies,  Inc.,  a Nevada  corporation,  was
incorporated on April 30, 1998 and was inactive from its date of formation until
April  1999 when it merged  with and into the  Company in a reverse  merger.  In
consideration  for 90% of the  stock  of the  Company,  Advanced  Communications
Technologies,  Inc (Nevada) (of which Roger May, our former Chairman and CEO was
the principal  shareholder)  transferred all of its assets which included all of
the rights and interest in the  SpectruCell  technology  for the North and South
American  territories.  For  accounting  purposes,  the merger was treated as an
acquisition of all of the assets of the Company and as a recapitalization of the
Company. In July 1999, the Company formed Advanced Global  Communications,  Inc.
("AGC") as a wholly  owned  subsidiary  to conduct its  international  telephone
network  distribution  business.  On July 1, 2001, AGC ceased operations and has
been inactive since this date. On January 31, 2000, the Company  acquired all of
the then issued and outstanding shares of  SmartInvestment.com,  Inc. ("Smart"),
an inactive  reporting  company,  for 200,000 shares of restricted common stock.
The Company elected successor issuer status to become a fully reporting company.

     The  Company's  primary  asset is the ownership of the rights to market and
distribute a software defined radio wireless technology known as SpectruCell, in
the  North  and  South  American  territories  which  is being  developed  by an
unrelated  party. The Company expects to generate revenue from the marketing and
distribution of the SpectruCell  product when and if it becomes  available to us
and  from  other  investment  activities.  The  Company  has not  generated  any
meaningful revenue to date. It is uncertain if the SpectruCell product will ever
be commercially developed and made available to us.

(B)  PRINCIPLES OF CONSOLIDATION

     The accompanying  consolidated financial statements include the accounts of
the  Company  and  its  inactive  subsidiaries.   All  significant  intercompany
transactions and balances have been eliminated in consolidation.

(C)  USE OF ESTIMATES

     In preparing consolidated financial statements in conformity with generally
accepted  accounting  principles in the United States of America,  management is
required to make estimates and assumptions  that affect the reported  amounts of
assets and liabilities  and the disclosure of contingent  assets and liabilities
at the date of the consolidated  financial  statements and revenues and expenses
during the reported period. Actual results could differ from those estimates.

(D)  FAIR VALUE OF FINANCIAL INSTRUMENTS

     The  carrying   amounts  of  the  Company's   accounts   payable,   accrued
liabilities,  debentures,  and loans payable  approximate  fair value due to the
relatively short period to maturity for these instruments.

(E)  PROPERTY AND EQUIPMENT

     Property  and  equipment  are  stated  at  cost  and   depreciated,   using
accelerated methods, over the estimated useful lives of 5 years.

(F)  LONG-LIVED ASSETS

     The  Company  reviews  long-lived  assets and certain  identifiable  assets
related to those assets for  impairment  whenever  circumstances  and situations
change such that there is an  indication  that the  carrying  amounts may not be
recoverable (See Note 2).

                                      F-5
<PAGE>

(G)  INCOME TAXES

     The Company  accounts for income taxes under SFAS No. 109  "ACCOUNTING  FOR
INCOME  TAXES".  Under SFAS No. 109,  deferred  tax assets and  liabilities  are
recognized for the future tax consequences  attributable to differences  between
the financial  statement carrying amounts of existing assets and liabilities and
their  respective tax bases.  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.

     The  Company has made no current  provision  (benefit)  for Federal  income
taxes  because of  financial  statement  and tax losses since its  inception.  A
valuation  allowance has been used to offset the recognition of any deferred tax
assets arising from net operating loss  carryforwards  due to the uncertainty of
future  realization.  The use of any tax loss carryforward  benefits may also be
limited as a result of changes in Company ownership.

(H)  CONCENTRATION OF CREDIT RISK

     The Company maintains its cash in bank deposit  accounts,  which, at times,
may exceed federally insured limits.  The Company has not experienced any losses
in such accounts and believes it is not exposed to any  significant  credit risk
on cash and cash equivalents.

(I)  LOSS PER SHARE

     Net loss per  common  share  (basic and  diluted)  is based on the net loss
divided by the weighted average number of common shares  outstanding during each
year.  Common stock  equivalents  are not included in the computation of diluted
net loss per common share because the effect would be anti dilutive.

(J)  RECENT ACCOUNTING PRONOUNCEMENTS

     In April 2003, the Financial  Accounting  Standards  Board ("FASB")  issued
Statement of Financial  Accounting  Standards  ("SFAS") No. 149,  "Amendment  of
Statement 133 on Derivative  Instruments and Hedging  Activities".  SFAS No. 149
amends  and  clarifies   financial   accounting  and  reporting  for  derivative
instruments,   including  certain  derivative   instruments  embedded  in  other
contracts  (collectively  referred to as derivatives) and for hedging activities
under  SFAS  No.  133,  "Accounting  for  Derivative   Instruments  and  Hedging
Activities".  The  changes  in SFAS  No.  149  improve  financial  reporting  by
requiring  that  contracts  with  comparable  characteristics  be accounted  for
similarly.  This  statement is effective for contracts  entered into or modified
after June 30, 2003 and all of its provisions should be applied prospectively.

     In May  2003,  the  FASB  issued  SFAS No.  150,  "Accounting  For  Certain
Financial Instruments with Characteristics of both Liabilities and Equity". SFAS
No.  150  changes  the  accounting  for  certain   financial   instruments  with
characteristics   of  both   liabilities   and  equity  that,   under   previous
pronouncements, issuers could account for as equity. The new accounting guidance
contained in SFAS No. 150  requires  that those  instruments  be  classified  as
liabilities in the balance sheet.

     SFAS  No.  150  affects  the  issuer's   accounting   for  three  types  of
freestanding financial  instruments.  One type is mandatorily redeemable shares,
which the issuing company is obligated to buy back in exchange for cash or other
assets. A second type includes put options and forward purchase contracts, which
involves  instruments  that do or may require the issuer to buy back some of its
shares in exchange for cash or other assets.  The third type of instruments that
are  liabilities  under this Statement is  obligations  that can be settled with
shares,  the monetary value of which is fixed, tied solely or predominantly to a
variable  such as a market  index,  or  varies  inversely  with the value of the
issuers' shares. SFAS No. 150 does not apply to features embedded in a financial
instrument that is not a derivative in its entirety.

     Most of the  provisions of Statement 150 are  consistent  with the existing
definition  of  liabilities  in FASB  Concepts  Statement  No. 6,  "Elements  of
Financial Statements". The remaining provisions of this Statement are consistent
with the  FASB's  proposal  to  revise  that  definition  to  encompass  certain
obligations  that a  reporting  entity  can or must  settle by  issuing  its own
shares. This Statement shall be effective for financial instruments entered into
or modified after May 31, 2003 and otherwise shall be effective at the beginning
of  the  first  interim  period  beginning  after  June  15,  2003,  except  for
mandatorily redeemable financial instruments of a non-public entity, as to which
the effective date is for fiscal periods beginning after December 15, 2003.

                                      F-6
<PAGE>

     Management does not expect the impact from these statements' pronouncements
to have a material impact on the Company's  consolidated  financial  position or
results of operations.


NOTE 2.  PROPERTY AND EQUIPMENT
                                             2003                   2002
                                       ----------------       ----------------

Computer and office equipment          $       32,909         $       32,909
Less:  Accumulated depreciation               (18,635)               (15,635)
       Impairment loss                        (14,274)                    --
                                       ----------------       ----------------
PROPERTY AND EQUIPMENT, NET            $           --         $       17,274
                                       ================       ================

     Depreciation  expense for the years ended June 30, 2003 and 2002 was $3,000
and $4,000  respectively.  The Company has determined  these fixed assets are no
longer used in its  operations,  and  consequently  impaired  $14,274 during the
fourth quarter.


NOTE 3.  NOTES AND LOAN PAYABLE

(A)  NOTE PAYABLE TO ADVANCED COMMUNICATIONS (AUSTRALIA)

     The  Company  had a  non-interest  bearing and  unsecured  note  payable to
Advanced Communications  (Australia) of $7,500,000 as of April 5, 2000. The note
was payable in three equal  monthly  installments  commencing  on May 31,  2000.
Under the terms of the Stock  Purchase  Agreement  with Advanced  Communications
(Australia), the monthly installment payments were extended indefinitely without
interest  to allow  the  Company,  on a best  efforts  basis,  to raise the cash
portion  of  the  purchase  price  through  a  private  or  public  offering  of
securities.  There are no default,  penalty or acceleration provisions under the
terms of the Stock Purchase Agreement.  Upon raising funds pursuant to a private
or public offering,  the Company was obligated to repay Advanced  Communications
(Australia)'s  note with those funds  remaining  after  deduction  for  reserves
needed for current operations, working capital and the development and expansion
of its operations and the operations of its  subsidiaries,  as determined by the
Company's Board of Directors.

     During the fiscal year ended June 30, 2002 the Company  repaid in both cash
and common stock,  $5,326,833 and $382,001 of the obligation,  respectively.  No
payments  were made during the fiscal year ended June 30,  2003.  As of June 30,
2003  and  2002,   the  balance  of  the   Company's   obligation   to  Advanced
Communications (Australia) was $1,791,166.

     On November 11, 2002, Advanced  Communications  (Australia) issued a Notice
of  Termination  to the Company which stated that the April 2000 Stock  Purchase
Agreement was terminated immediately due to the Company's insolvency. The effect
of the Notice of  Termination  was to cancel the  Company's  stock  interest  in
Advanced  Communications  (Australia).  Management  is of the  belief  that as a
result  of  Advanced  Communications  (Australia)'s  termination  of  the  Stock
Purchase Agreement,  no further money is owed, and we have no further obligation
to Advanced  Communications  (Australia).  The financial  statements reflect the
above  amount as a long-term  liability  until such time as the Company  obtains
evidence that the $1,791,166 has been extinguished.

(B)  LOAN PAYABLE TO SHAREHOLDER

     As of June 30,  2003 and  2002,  the  Company  owed  Global  Communications
Technology Pty, an Australian company  wholly-owned by Mr. May, a former officer
and director of the Company,  $1,055,736,  for funds  advanced to the Company to
provide working capital.  This loan is non-interest  bearing and unsecured,  and
has no scheduled date for repayment.  The Company  believes that the loan is not
due upon demand.  However,  since the actual  repayment terms are not known with
any specificity  because the terms are not confirmed in a written document,  the
loan has been classified as a current liability.

(C)  8% NOTE PAYABLE

     On  November  14,  2002,  the  Company  settled  its  litigation  with  the
Needham/DuPont  plaintiffs  by agreeing to release  the  plaintiffs'  stock from
restriction  and  issuing  a three  year 8%  promissory  note  for  $173,494  to
reimburse  the  plaintiffs  for their legal costs.  The note is payable in three
equal annual  installments of principal and interest commencing December 1, 2003
with additional  installments  due on December 1, 2004 and December 1, 2005. The
current  portion of the note payable of $57,831 has been classified as a current
liability on the balance sheet.

                                      F-7
<PAGE>

     Interest of $8,829 was accrued on the note payable as of June 30, 2003.

(D)  12% NOTE PAYABLE

     On June 19, 2003, the Company issued a 12% promissory note for $35,000. The
face amount of this note plus interest  shall be payable in its entirety 60 days
from the date  hereof.  The note  payable for $35,000 has been  classified  as a
current liability on the balance sheet.

     The Company  incurred  $5,000 in financing fees in regard to this note, and
has  included the full amount as interest  expense at June 30,  2003.  This note
plus interest was paid on October 1, 2003 in the amount of $36,188.


NOTE 4.  CONVERTIBLE DEBENTURES

5% CONVERTIBLE DEBENTURES DUE JANUARY 2004

     In January 2002, the Company  issued,  in the  aggregate,  $1 million of 5%
Convertible  Debentures to Cornell Capital Partners,  LP and 15 other accredited
individual investors.

     These  debentures  are  convertible  into shares of common stock at a price
equal to either  (a) an  amount  equal to 120% of the  closing  bid price of the
common  stock as of the closing  date or $.40,  whichever  is higher,  or (b) an
amount equal to 80% of the lowest  closing bid price of the common stock for the
five trading days immediately  preceding the conversion date. These  Convertible
Debentures  accrue  interest at a rate of 5% per year and are convertible at the
holder's option.  These Convertible  Debentures have a term of two years. At the
Company's  option,  these debentures may be paid in cash at maturity or redeemed
at a 20% premium prior to January 2004.

     The Convertible Debentures contain a beneficial conversion feature computed
at its intrinsic value that is the difference  between the conversion  price and
the fair value on the debenture issuance date of the common stock into which the
debt is  convertible,  multiplied by the number of shares into which the debt is
convertible at the commitment date. Since the beneficial  conversion  feature is
to be  settled by  issuing  equity,  the  amount  attributed  to the  beneficial
conversion  feature,  of $250,000,  was recorded in the June 30, 2002  financial
statements as interest expense and a component of equity on the issuance date.

     The Company  incurred  $80,000 of financing  costs  associated  with the 5%
Convertible  Debentures that is being amortized over the life of the debentures.
Amortization of $40,000 and $16,667 related to these debentures was expensed for
the fiscal years ended June 30, 2003 and 2002 respectively.

     During the three months ended  December 31, 2002, the Company paid $125,000
of accrued interest on the 5% Convertible  Debentures with the proceeds from the
10% Secured Convertible Debentures issued on November 22, 2002.

     On January 22, 2003,  debenture  holders  elected to convert $56,000 of the
debentures at a price of $.0032 per share,  into 17,500,000 shares of restricted
common stock. As of June 30, 2003, the balance due on these debentures after the
aforementioned conversion is $944,000.

     As  of  June  30,  2003  and  2002,   interest  of  $221,056   and  $62,917
respectively, is accrued on these debentures.

10% SECURED CONVERTIBLE DEBENTURES DUE NOVEMBER 2004

     On November  22,  2002,  the Company  entered  into a  Securities  Purchase
Agreement with Cornell Capital  Partners,  L.P.,  whereby it agreed to issue and
sell Two  Hundred  Fifty  Thousand  Dollars  ($250,000)  of Secured  Convertible
Debentures.  These Secured  Convertible  Debentures have a term of two years and
are convertible  into shares of common stock at a price equal to $.001 per share
commencing on December 31, 2002.  These Secured  Convertible  Debentures  accrue
interest at a rate 10% per year and are convertible at the holder's  option.  At
the Company's option,  these debentures may be paid in cash or redeemed at a 20%
premium on or before  December 15, 2002 and at a 50% premium after  December 15,
2002 and prior to November  2004. In  connection  with the  Securities  Purchase
Agreement,  the Company  entered  into a Security  Agreement in favor of Cornell
Capital  Partners,  L.P.  whereby it granted a security  interest  in all of its
assets as security for its obligations under the Secured Convertible Debentures,
as well as all other  obligations of Advanced  Communications to Cornell Capital
Partners,  L.P.  whether  arising  before,  on or after the date of the Security
Agreement,  including,  without limitation,  those obligations of the Company to

                                      F-8
<PAGE>

Cornell Capital  Partners,  L.P. under the Convertible  Debentures dated January
2002.

     The Convertible Debentures contain a beneficial conversion feature computed
at its intrinsic value that is the difference  between the conversion  price and
the fair value on the debenture issuance date of the common stock into which the
debt is  convertible,  multiplied by the number of shares into which the debt is
convertible at the commitment  date. The amount  attributable  to the beneficial
conversion  feature of $250,000,  will be recorded as a discount on the debt and
accreted over a 24 month period as interest expense in accordance with paragraph
19 of EITF 00-27.  For the fiscal year ended June 30, 2003, the Company accreted
$61,979 of debt discount as interest expense.

     The Company  received  $100,000 in cash from the sale of these  debentures,
paid  $125,000 in accrued  interest  due on the 5%  convertible  debentures  and
incurred $25,000 of financing costs associated with these Convertible Debentures
that is being amortized over the life of the debentures. Amortization expense of
$7,812  related to these  debentures was recorded for the fiscal year ended June
30, 2003.

     On January 22, 2003,  Cornell  Capital  Partners,  L.P.  elected to convert
$62,500 of debentures at a conversion  price of $.001 per share into  62,500,000
shares of restricted common stock. As of June 30, 2003, the balance due on these
debentures  after the  aforementioned  conversion  and write off of the  related
discount, in the amount of $57,292, is $187,500.

     As of June 30, 2003 interest of $12,522, is accrued on these debentures.

     Future maturities of long-term debt as of June 30, 2003 are as follows:

                        YEAR              AMOUNT
                  ---------------    ----------------

                   June 30, 2004      $    57,831
                   June 30, 2005          245,331
                   June 30, 2006           57,832
                                      -------------
                       TOTAL          $   360,994
                                      =============


NOTE 5.  STOCKHOLDERS' DEFICIENCY

     On July 9, 2003,  the  Company's  stockholders  authorized  a change in the
Company's  Articles of  Incorporation  increasing  the  authorized  no par value
common shares from 200,000,000 to  5,000,000,000.  A Certificate of Amendment to
the Company's Articles of Incorporation incorporating the above change was filed
with the Florida Secretary of State on July 10, 2003 (See Note 9).

(A)  EQUITY LINE OF CREDIT FACILITY

     In January 2002 (as revised in July 2003),  the Company  entered into a $30
million  Equity Line of Credit  facility  with  Cornell  Capital  Partners,  LP.
Pursuant to the Equity  Line of Credit,  the  Company  may,  at its  discretion,
periodically  issue and sell to Cornell  Capital  Partners,  LP shares of common
stock for a total purchase of $30 million. The amount of each advance is subject
to an  aggregate  monthly  maximum  advance  amount of $2  million in any 30-day
period.  Cornell Capital  Partners,  LP will purchase the shares of common stock
for a 9% discount to the lowest closing bid price of the Company's  common stock
during the 5 trading days after a notice  date.  In  addition,  Cornell  Capital
Partners,  LP will  retain 3% of each  advance  under the Equity Line of Credit,
together with a one-time commitment fee of $740,000, paid in 2,960,000 shares of
common stock. Cornell Capital Partners,  LP intends to sell any shares under the
Equity Line of Credit at the then prevailing  market price. As of June 30, 2003,
the Company has not drawn down any funds on this line (See Note 9).

     The  Company  has   engaged   Westrock   Advisors,   Inc.,   a   registered
broker-dealer,  to advise  it in  connection  with the  Equity  Line of  Credit.
Westrock Advisors,  Inc. was paid a fee of 40,000 shares of the Company's common
stock, which was equal to $10,000.

     For the fiscal  years  ended June 30, 2003 and 2002,  the Company  recorded
amortization  expense of $375,000 and $187,500  respectively  in connection with
the  $750,000  two year  commitment  fee and the  balance  has been  recorded as
deferred commitment fees and classified as part of stockholders' deficiency.

                                      F-9
<PAGE>

     On July 31, 2003,  the SEC declared  effective the  Company's  Registration
Statement.  On September 18, 2003,  September 25, 2003 and October 1, 2003,  the
Company  sold,  in the  aggregate,  $200,000  of common  stock in  exchange  for
agreeing to issue 85,787,623 shares to Cornell Capital Partners,  L.P. under the
terms of the Equity Line of Credit (See Note 9).

(B)  STOCK ISSUED FOR CONVERTIBLE DEBENTURES

     On January  22,  2003,  holders  of the  Company's  5% and 10%  Convertible
Debentures  converted  $56,000  and  $62,500  of  Convertible   Debentures  into
17,500,000 and 62,500,000 shares respectively, of the Company's common stock.

     On August 26, 2002 and September  24, 2002,  the Company  issued  4,250,000
shares of stock to the 12% Convertible  Debenture  holders in full settlement of
the Company's outstanding obligation of $100,407.

(C)  STOCK ISSUED FOR SERVICES

     On October 10, 2002, the Company's Board of Directors approved the issuance
of 100,000  shares each or 500,000  shares in the  aggregate to Messrs.  Danson,
Prouty,  Lichtman,  Roche and Finch,  having a value of $1,000 each or $5,000 in
the  aggregate,  in partial  satisfaction  of unpaid prior legal and  consulting
fees. These shares were issued on December 5, 2002.


NOTE 6.  RELATED PARTIES

(A)  LEGAL COUNSEL

     Certain of the Company's  legal counsel are  stockholders  and directors of
the Company.  The Company has paid these attorneys $0 and $56,699 and $2,000 and
$105,000 in the form of cash and stock  respectively,  for legal services during
the fiscal years 2003 and 2002. The Company owes these attorneys an aggregate of
$309,457 at June 30, 2003.

(B)  PRESIDENT AND CHIEF FINANCIAL OFFICER

     The Company's President and Chief Financial Officer, who is also a director
and stockholder,  and a company in which he is the Managing Director and Founder
have been contracted to provide  financial  consulting  services to the Company.
The Company has paid this consultant  $3,000 and $65,000 and $1,000 and $110,000
in the form of cash and stock  respectively,  for financial  services during the
fiscal years 2003 and 2002. The Company owes this consultant a total of $274,911
at June 30, 2003.

(C)  CHAIRMAN OF THE BOARD

     The  Company's  former  Chairman  of the Board was  contracted  to  provide
business  services and is also a director and  stockholder  of the Company.  The
Company  has paid this  consultant  $0 and $10,986 and $55,000 and $1,000 in the
form of cash and stock  respectively,  for business services rendered during the
fiscal years 2003 and 2002. The Company owes this  consultant a total of $50,323
at June 30, 2003.


NOTE 7.  COMMITMENTS AND CONTINGENCIES

(A)  LEASE AGREEMENT

     The Company is a party to a three-year  office lease commencing  January 1,
2002 and ending  December 31, 2004. The monthly rent is $7,634  inclusive of the
cost of monthly parking. The minimum lease payment for the remaining life of the
lease is $137,412.  On August 1, 2002, the Company notified the landlord that it
relocated its office from  California to New York. The Company has engaged Grubb
& Ellis to find a suitable subtenant to assume all or a portion of the Company's
remaining  lease  obligation.  As of June 30, 2003, the Company's  former office
space remains vacant and is indebted to the landlord for $101,946.

(B)  INDEMNIFICATION  OF DIRECTORS AND EMPLOYEES IN RE: ADVANCED  COMMUNICATIONS
     (AUSTRALIA) v. COMPANY DIRECTORS AND EMPLOYEES

     On or about May 10, 2002, Advanced Communications (Australia) filed suit in
the Superior court of Orange County,  California against the Company, all of its
directors,  its former president,  and some of its former and present employees,

                                      F-10
<PAGE>

including  the  Company's  receptionist.  On or  about  May 17,  2002,  Advanced
Communications  (Australia) voluntarily dismissed the suit as to the Company but
not as to the individual defendants.

     The complaint sets forth multiple  causes of action against the defendants,
including  various  business  torts.  The  basis  of the  complaint  is that the
defendants improperly interfered with and conspired to ruin plaintiff's business
and conspired to force plaintiff into bankruptcy.

     In July 2003,  the  individual  directors and employees  prevailed in their
defense against Advanced  Communications  (Australia) and a judgment was entered
by the Court in the individuals' favor.  Consequently,  the Company is no longer
obligated to indemnify the directors and former employees in this case.

(C)  INDEMNIFICATION  AGREEMENT  BETWEEN  THE  COMPANY  AND  JACK  HALPERIN  RE:
     NEEDHAM/DUPONT LAWSUIT

     On or  about  July  2000,  the  Company  entered  into  an  indemnification
agreement  with Jack Halperin,  Esq., our then SEC counsel,  whereby the Company
agreed to indemnify Mr. Halperin for all costs and damages  incurred as a result
of Mr.  Halperin  being named a defendant in the  Needham/DuPont  lawsuit  filed
against the  Company,  Mr. May and Mr.  Halperin in July 2000.  Mr. May executed
this agreement on behalf of the Company. The agreement includes a provision that
prohibits  the  Company  from  entering  into any  settlement  agreement  in the
Needham/DuPont  lawsuit  unless  such  settlement  agreement  provides  for  the
unconditional  release of Mr. Halperin from any claim. On November 14, 2002, the
Company settled the Needham/DuPont  lawsuit without obtaining a full release for
Mr.  Halperin.  To date,  no claim for  indemnity  has been  filed  against  the
Company.

(D)  LEGAL MATTERS

     As of June 30, 2003, management has settled all of its outstanding lawsuits
and has recorded the financial statement impact of such settlements. The Company
is  currently  involved in disputes  with  various  creditors  regarding  unpaid
professional  and other  fees.  A number of  creditors  have filed and  obtained
judgments  against the  Company  for unpaid  fees and  services in the amount of
$105,815.  The Company has  previously  recorded this expense and has determined
that these  judgments  will not have a material  adverse impact on the Company's
financial condition.

     Management does not believe that the  contingencies  described above (7(C),
and 7(D)) will have a material adverse impact on the future financial  condition
of the Company.


NOTE 8.  GOING CONCERN

     The Company's  consolidated  financial statements for the fiscal year ended
June 30, 2003, have been prepared on a going concern basis,  which  contemplates
the  realization of assets and the settlement of liabilities  and commitments in
the normal course of business. The Company's net loss of $1,869,031 and negative
cash flows from  operations of $123,566 for the fiscal year ended June 30, 2003,
working  capital  deficiency  of  $4,044,795  and  stockholders'  deficiency  of
$5,960,174,  raise  substantial  doubt  about its ability to continue as a going
concern.

     The ability of the Company to continue as a going  concern is  dependent on
the Company's ability to raise additional  capital,  implement its business plan
and acquire an existing profitable business enterprise.  Management  anticipates
that the issuance of  securities  under its Equity Line of Credit  facility will
generate sufficient  resources for the continuation of the Company's  operations
and the implementation of its business plan.

     The consolidated  financial  statements do not include any adjustments that
might result from the outcome of this uncertainty.


NOTE 9.  SUBSEQUENT EVENTS

     On July 9, 2003,  a Special  Shareholders  Meeting was held  approving  the
Company's  Proxy  Statement  which sought a change in the Company's  Articles of
Incorporation  increasing the authorized no par common stock from 200,000,000 to
5,000,000,000.

     On July 31, 2003, the Securities and Exchange Commission declared effective
the Company's Registration Statement.

                                      F-11
<PAGE>

     On September 4, 2003,  holders of the Company's 5%  convertible  debentures
converted  $82,375  of  convertible  debentures  into  59,692,027  shares of the
Company's common stock.

     On September 18, 2003,  September 25, 2003 and October 1, 2003, the Company
agreed to  issue,  in the  aggregate,  85,787,623  shares  of  common  stock for
$200,000 to Cornell Capital Partners, L.P. under the terms of the Equity Line of
Credit. The Company netted $192,500 after underwriting and escrow fees (See Note
5).

                                      F-12