<PAGE>

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

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

                                   FORM 10-KSB

(Mark One)

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

For the fiscal year ended  DECEMBER 31, 2002.
                           ------------------

                       Commission file Number   000-28107
                                                ---------

                                INCITATIONS, INC.
--------------------------------------------------------------------------------
                 (Name of Small Business Issuer in Its Charter)


             NEVADA                                       88-0335710
--------------------------------------        -------------------------------
  (State or Other Jurisdiction of                      (I.R.S. Employer
   Incorporation or Organization)                     Identification No.)


1800 MCGILL COLLEGE, SUITE 2480
MONTREAL, QUEBEC                                      H3A 3J6, CANADA
--------------------------------------        -------------------------------
(Address of Principal Business Office)                  (Zip Code)


                                 (514) 288-1687
--------------------------------------------------------------------------------
                (Issuer's Telephone Number, Including Area Code)


         Securities Registered under Section 12(g) of the Exchange Act:

                         COMMON STOCK, $0.0002 PAR VALUE
--------------------------------------------------------------------------------
                                (Title of Class)


     Check whether the issuer: (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for past 90 days.

Yes        No  X
   -----     -----

     Check if there is no disclosure of delinquent filers in response to Item
405 of Regulation S-B contained in this form, and no disclosure will be
contained, to the best of the 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.   X
                                      -----

     State issuer's revenues for its most recent fiscal year.   None
                                                              --------

     State the aggregate market value of the voting and non-voting common equity
held by non-affiliates computed by reference to the price at which the common
equity was sold, or the average bid and asked price of such common equity, as of
a specified date within the past 60


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days. $ 78,531

     Documents Incorporated by reference:   None
                                          --------

                    APPLICABLE ONLY TO CORPORATE REGISTRANTS

     The number of shares outstanding of each of the issuer's class of common
equity, as of March 14, 2003 is      27,142,325     .
                                 -------------------

     Transitional Small Business Disclosure Format (check one):
Yes      No  X
   -----   -----


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                                     PART I

ITEM 1.  DESCRIPTION OF BUSINESS

COMPANY BACKGROUND

Incitations, Inc. (the "Company"), a Nevada corporation, has its principal
offices at 1800 McGill College, Suite 2480, Montreal, Quebec, H3A 3J6 Canada.
The telephone number is (514) 288-1687. Through December 31, 2001, the Company
has generated no revenues from operations. The Company's auditors have expressed
doubt about the Company's ability to continue as a going concern. The Company
has current assets in the form of cash of $ 0 , total assets of $ 0  and
current liabilities of $393,727 as of December 31, 2002. The Company's net
losses through December 31, 2002 are $700,132.

The Company was incorporated in March 1995 under the name of Truco, Inc. and was
to engage in the business of manufacturing, selling and marketing a product
described as the "Belt Wallet." However, soon thereafter the Company elected not
to proceed with its intended business objective of marketing and selling the
"Belt Wallet" but instead elected to change its focus to the area of developing
proprietary technology and services using smart and remote memory cards and
wireless and land-line networks in the fields of commerce, publishing, and
network-based systems. The Company entered into a licensing agreement for the
exclusive right to market and manufacture a technology known as the "ARCard,
ARCommerce Reader, ARCinternet Computer", and its application programming
bundled together as the "ARCommerce Kit" as a way of doing business over the
Internet. On March 22, 1996, the Company changed its name to "Web Tech
Incorporated".

Subsequently, on November 30, 1996, in an effort to diversify its product and
manufacturing base, the Company acquired all the issued and outstanding shares
of Geo-Ram, Inc., a Texas corporation, by issuing 6,000,000 shares of the
Company's common stock to the shareholders of Geo-Ram, Inc. Geo-Ram, Inc. was in
the business of manufacturing geophysical equipment which included a new drill
bit, the "Duckbill Bit", designed to implant explosive charges and geophones for
seismic surveys in harsh and environmentally fragile geographic areas known as
transition zones. On March 18, 1997, the Company changed its name to "Cynergy,
Inc.".

However, the Company was neither able to (1) successfully develop and market the
"ARCommerce Kit", or (2) provide any further funding for the growth and
development of the geophysical equipment business. Consequently, the Company did
not continue its licensing of the "ARCommerce Kit" and further, on March 24,
1998, the Company entered into a Recission Agreement with the shareholders of
Geo-Ram, Inc. whereby the shareholders of Geo-Ram, Inc. returned the 6,000,000
shares that the Company issued in connection with the November 30, 1996
acquisition.

On September 22, 1999, the Company (1) entered into an Agreement and Plan of
Merger with Mercantile Factoring & Credit Corp. (formerly known as Advanced
Medical Technologies Research Corp.), a Nevada corporation (the "Merger"), (2)
changed its name to "Mercantile Factoring Credit Online Corp."("MFCO"), (3)
effected a reverse stock split of the Company's issued and outstanding shares of
common stock on a basis of one new share for every 17.784 old


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shares, and (4) elected four new directors to the Company's board of directors
(the "Board"). The Merger became effective upon the filing of the Articles of
Merger on September 29, 1999.

In February 2000, the Company determined that the then intended business of MFCO
(to provide an Internet web-site where (1) borrowers could post their offers to
borrow money secured by pledged collateral (primarily accounts receivable and
real estate), and (2) lenders could competitively bid to supply the money, with
the competition being in the form of the amount of money the lender was willing
to lend and the interest rate at which the lender was willing to supply the
money), would be difficult to initiate. Further, the Company determined that in
certain countries in which the Company had intended to offer its services, the
costs of complying with banking laws and regulations would be prohibitive. The
Company therefore decided to seek to enter into another business.

In October 2000, the Company contemplated changing its business strategy so as
to design, manufacture, market, and sell over the Internet women's intimate
apparel. In connection with such business strategy shift, the Company changed
its name to Incitations, Inc. As a result of the downturn in the marketplace at
the end of 2000 and the beginning of 2001, the Board elected not to proceed with
its then intended business objective.

The Company's current business plan is to seek, investigate, and, if warranted,
acquire one or more properties or businesses, and to pursue other related
activities intended to enhance shareholder value. The acquisition of a business
opportunity may be made by purchase, merger, exchange of stock, or otherwise,
and may encompass assets or a business entity, such as a corporation, joint
venture, or partnership. The Company does not have significant capital, and it
is unlikely that the Company will be able to take advantage of more than one
such business opportunity. See "Management's Discussion and Analysis or Plan of
Operation."

It is the view of the Staff of the Securities and Exchange Commission (the
"Staff") that, both before and after the business combination or transaction
with an operating entity or other person, the promoters or affiliates of blank
check companies, as well as their transferees, are "underwriters" of the
securities issued. It is also the view of the Staff that securities issued by a
blank check company can only be resold through registration under the Securities
Act of 1933, as amended (the "Act"), unless there is an applicable exemption.
Further, it is the view of the Staff that the shares owned by affiliates or
transferees of affiliates of the Company may not be sold pursuant to Rule 144.

GENERAL

At the present time the Company has not identified any business opportunity that
it plans to pursue, nor has the Company reached any agreement or definitive
understanding with any person concerning an acquisition.

It is anticipated that the Company's officers and directors will contact
broker-dealers and other persons with whom they are acquainted who are involved
in corporate finance matters to advise them of the Company's existence and to
determine if any companies or businesses they represent have an interest in
considering a merger or acquisition with the Company. No assurance can be given
that the Company will be successful in finding or acquiring a desirable business


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opportunity, given that little funds are available for acquisitions, or that any
acquisition that occurs will be on terms that are favorable to the Company or
its stockholders.

The Company's search will be directed toward small and medium-sized enterprises
which have a desire to become public corporations. See "Investigation and
Selection of Business Opportunities" below. The Company anticipates that the
business opportunities presented to it will (1) be recently organized with no
operating history, or a history of losses attributable to under-capitalization
or other factors; (2) be experiencing financial or operating difficulties; (3)
be in need of funds to develop a new product or service or to expand into a new
market; (4) be relying upon an untested product or marketing concept; or (5)
have a combination of the characteristics mentioned in (1) through (4). The
Company intends to concentrate its acquisition efforts on properties or
businesses that it believes to be undervalued. Given the above factors,
investors should expect that any acquisition candidate may have a history of
losses or low profitability.

The Company does not propose to restrict its search for investment opportunities
to any particular geographical area or industry, and may, therefore, engage in
essentially any business, to the extent of its limited resources. The Company's
discretion in the selection of business opportunities is unrestricted, subject
to the availability of such opportunities, economic conditions, and other
factors.

As a consequence of the registration of its securities, any entity which has an
interest in being acquired by, or merging into, the Company, is expected to be
an entity that desires to become a public company and establish a public trading
market for its securities. In connection with such a merger or acquisition, it
is highly likely that an amount of stock constituting control of the Company
would be issued by the Company or purchased from the current principal
shareholders of the Company by the acquiring entity or its affiliates. If stock
is purchased from the current shareholders, the transaction is very likely to
result in substantial gains to them relative to their purchase price for such
stock. In the Company's judgment, none of its officers and directors would
thereby become an "underwriter" within the meaning of the Section 2(11) of the
Act. The sale of a controlling interest by certain principal shareholders of the
Company could occur at a time when the other shareholders of the Company remain
subject to restrictions on the transfer of their shares.

Depending upon the nature of the transaction, the current officers and directors
of the Company may resign management positions with the Company in connection
with the Company's acquisition of a business opportunity. See "Factors Affecting
Future Performance - Lack of Continuity in Management." In the event of such a
resignation, the Company's current management would not have any control over
the conduct of the Company's business following the Company's combination with a
business opportunity.

It is anticipated that business opportunities will come to the Company's
attention from various sources, including its officers and directors, its other
stockholders, professional advisors such as attorneys and accountants,
securities broker-dealers, venture capitalists, members of the financial
community, and others who may present unsolicited proposals. The Company has no
plans, understandings, agreements, or commitments with any individual for such
person to act as a finder of opportunities for the Company.


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The Company does not foresee that it would enter into a merger or acquisition
transaction with any business with which its officers or directors are currently
affiliated. However, existing corporate policy does not prevent the Company from
entering into a transaction with a related party, and management is unaware of
any circumstances under which this policy will change. Should the Company
determine in the future, contrary to foregoing expectations, that a transaction
with an affiliate would be in the best interests of the Company and its
stockholders, the Company is in general permitted by Nevada law to enter into
such a transaction if:

     o    The material facts as to the relationship or interest of the affiliate
          and as to the contract or transaction are disclosed or are known to
          the Board, and the Board in good faith authorizes the contract or
          transaction by the affirmative vote of a majority of the disinterested
          directors, even though the disinterested directors constitute less
          than a quorum; or

     o    The material facts as to the relationship or interest of the affiliate
          and as to the contract or transaction are disclosed or are known to
          the stockholders entitled to vote thereon, and the contract or
          transaction is specifically approved in good faith by a vote of the
          stockholders; or

     o    The contract or transaction is fair as to the Company as of the time
          it is authorized, approved or ratified, by the Board or the
          stockholders.

It is not the current intention of management to promote other blank check
entities. In addition, one of the Company's directors is a director of another
public company that is presently seeking a merger candidate similar to what the
Company is seeking. In the event that this director learns of an opportunity for
a public shell to merge with another company, that director has agreed that he
will present the opportunity to both companies and leave the negotiation of any
potential deal to the other officers and directors of each company to the extent
practicable. Ultimately, the proposed merger candidate will decide which company
it prefers to merge with based on its needs and requirements regarding total
shares authorized, number of shares outstanding, number of shareholders and
other factors which the Company cannot determine at the present will be most or
more important to a potential merger candidate.

INVESTIGATION AND SELECTION OF BUSINESS OPPORTUNITIES

To a large extent, a decision to participate in a specific business opportunity
may be made upon management's analysis of the quality of the other company's
management and personnel, the anticipated acceptability of new products or
marketing concepts, the merit of technological changes, the perceived benefit
the Company will derive from becoming a publicly held entity, and numerous other
factors which are difficult, if not impossible, to analyze through the
application of any objective criteria. In many instances, it is anticipated that
the historical operations of a specific business opportunity may not necessarily
be indicative of the potential for the future because of the possible need to
shift marketing approaches substantially, expand significantly, change product
emphasis, change or substantially augment management, or make other changes. The
Company will be dependent upon the owners of a business opportunity to identify
any such problems which may exist and to implement, or be primarily responsible
for the implementation of, required changes. Because the Company may participate
in a business


                                                                               6
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opportunity with a newly organized firm or with a firm which is entering a new
phase of growth, it should be emphasized that the Company will incur further
risks, because management in many instances will not have proved its abilities
or effectiveness, the eventual market for such company's products or services
will likely not be established, and such company may not be profitable when
acquired. The Company is unable to predict the approximate number of merger
candidates with which it might make contact.

It is anticipated that the Company will not be able to diversify, but will
essentially be limited to one such venture because of the Company's limited
financing. This lack of diversification will not permit the Company to offset
potential losses from one business opportunity against profits from another, and
should be considered an adverse factor affecting any decision to purchase the
Company's securities.

It is emphasized that management of the Company may effect transactions having a
potentially adverse impact upon the Company's shareholders pursuant to the
authority and discretion of the Company's management to complete acquisitions
without submitting any proposal to the stockholders for their consideration.
Holders of the Company's securities should not anticipate that the Company
necessarily will furnish such holders, prior to any merger or acquisition, with
financial statements, or any other documentation, concerning a target company or
its business. In some instances, however, the proposed participation in a
business opportunity may be submitted to the stockholders for their
consideration, either voluntarily by such directors to seek the stockholders'
advice and consent or because state law so requires.

The analysis of business opportunities will be undertaken by or under the
supervision of the Company's president, who is not a professional business
analyst. See "Directors, Executive Officers, Promoters and Control Persons."
Although there are no current plans to do so, Company management may hire and
pay a finder's fee to a registered broker-dealer to assist in the investigation
and selection of business opportunities. In addition, the Company may pay a
finder's fee to a registered broker-dealer who introduces candidates with which
the Company successfully merges or commits to a business combination. The
Company does not intend to have anyone solicit on its behalf candidates in
exchange for a fee. There will not be any general solicitation by anyone acting
as a finder. Since Company management has no current plans to use any outside
consultants or advisors to assist in the investigation and selection of business
opportunities, no policies have been adopted regarding use of such consultants
or advisors, the criteria to be used in selecting such consultants or advisors,
the services to be provided, the term of service, or regarding the total amount
of fees that may be paid. However, because of the limited resources of the
Company, it is likely that any such fee the Company agrees to pay would be paid
in stock and not in cash. Otherwise, the Company anticipates that it will
consider, among other things, the following factors:

     o    Potential for growth and profitability, indicated by new technology,
          anticipated market expansion, or new products;

     o    The Company's perception of how any particular business opportunity
          will be received by the investment community and by the Company's
          stockholders;

     o    Whether, following the business combination, the financial condition
          of the


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          business opportunity would be, or would have a significant prospect in
          the foreseeable future of becoming sufficient to enable the securities
          of the Company to qualify for listing on an exchange or on a national
          automated securities quotation system, such as NASDAQ, so as to permit
          the trading of such securities to be exempt from the requirements of
          Rule 15c2-6 recently adopted by the Securities and Exchange Commission
          (the "SEC"). See "Factors Affecting Future Performance - Regulation of
          Penny Stocks";

     o    Capital requirements and anticipated availability of required funds,
          to be provided by the Company or from operations, through the sale of
          additional securities, through joint ventures or similar arrangements,
          or from other sources;

     o    The extent to which the business opportunity can be advanced;

     o    Competitive position as compared to other companies of similar size
          and experience within the industry segment as well as within the
          industry as a whole;

     o    Strength and diversity of existing management, or management prospects
          that are scheduled for recruitment;

     o    The cost of participation by the Company as compared to the perceived
          tangible and intangible values and potential; and

     o    The accessibility of required management expertise, personnel, raw
          materials, services, professional assistance, and other required
          items.

The Company will contact persons and companies with which its officers have an
acquaintance to make known the search for an acquisition candidate for the
Company. The Company does not intend to advertise in media. The Company will
screen potential acquisitions initially based upon whether a candidate has a
going business, audited financial statements for prior fiscal years, and
management experience in the industry.

No investors are intended to be solicited by the Company in connection with an
acquisition.

No one has advanced operational funding to the Company in the past other than
certain shareholders. See "Interest of Management and Others in Certain
Transactions."

In regard to the possibility that the shares of the Company would qualify for
listing on NASDAQ, the current standards include, among other things, the
requirements that the issuer of the securities that are sought to be listed have
total stockholders' equity of at least $5,000,000 or total market capitalization
of at least $50,000,000, or net income of at least $750,000. Many, and perhaps
most, of the business opportunities that might be potential candidates for a
combination with the Company would not satisfy the NASDAQ listing criteria.

No one of the factors described above will be controlling in the selection of a
business opportunity, and management will attempt to analyze all factors
appropriate to each opportunity and make a determination based upon reasonable
investigative measures and available data. Potentially available business
opportunities may occur in many different industries and at various


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stages of development, all of which will make the task of comparative
investigation and analysis of such business opportunities extremely difficult
and complex. Potential investors must recognize that, because of the Company's
limited capital available for investigation and management's limited experience
in business analysis, the Company may not discover or adequately evaluate
adverse facts about the opportunity to be acquired.

The Company is unable to predict when it may participate in a business
opportunity. It expects, however, that the analysis of any future specific
proposals, none of which have been submitted to the Company, and the selection
of a business opportunity may take several months or more.

Prior to making a decision to participate in a business opportunity, the Company
will generally request that it be provided with written materials regarding the
business opportunity containing such items as a description of products,
services and company history; management resumes; financial information;
available projections, with related assumptions upon which they are based; an
explanation of proprietary products and services; evidence of existing patents,
trademarks, or services marks, or rights thereto; present and proposed forms of
compensation to management; a description of transactions between such company
and its affiliates during relevant periods; a description of present and
required facilities; an analysis of risks and competitive conditions; a
financial plan of operation and estimated capital requirements; audited
financial statements, or if they are not available, unaudited financial
statements, together with reasonable assurances that audited financial
statements would be able to be produced within a reasonable period of time not
to exceed 60 days following completion of a merger transaction; and other
information deemed relevant.

As part of the Company's investigation, the Company's executive officers and
directors may meet personally with management and key personnel, may visit and
inspect material facilities, obtain independent analysis or verification of
certain information provided, check references of management and key personnel,
and take other reasonable investigative measures, to the extent of the Company's
limited financial resources and management expertise.

It is possible that the range of business opportunities that might be available
for consideration by the Company could be limited by the impact of SEC
regulations regarding purchase and sale of "penny stocks." The regulations would
affect, and possibly impair, any market that might develop in the Company's
securities until such time as they qualify for listing on NASDAQ or on another
exchange which would make them exempt from applicability of the "penny stock"
regulations. See "Factors Affecting Future Performance - Regulation of Penny
Stocks."

Company management believes that various types of potential merger or
acquisition candidates might find a business combination with the Company to be
attractive. These include acquisition candidates desiring to create a public
market for their shares in order to enhance liquidity for current shareholders,
acquisition candidates which have long-term plans for raising capital through
the public sale of securities and believe that the possible prior existence of a
public market for their securities would be beneficial, and acquisition
candidates which plan to acquire additional assets through issuance of
securities rather than for cash, and believe that the possibility of development
of a public market for their securities will be of assistance in that process.
Acquisition candidates which have a need for an immediate cash infusion are not
likely to find a potential business combination with the Company to be an
attractive alternative.


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There are no current loan arrangements or arrangements for any financing
whatsoever relating to any business opportunities.

FORM OF ACQUISITION

It is impossible to predict the manner in which the Company may participate in a
business opportunity. Specific business opportunities will be reviewed as well
as the respective needs and desires of the Company and the promoters of the
opportunity and, upon the basis of that review and the relative negotiating
strength of the Company and such promoters, the legal structure or method deemed
by management to be suitable will be selected. Such structure may include, but
is not limited to leases, purchase and sale agreements, licenses, joint ventures
and other contractual arrangements. The Company may act directly or indirectly
through an interest in a partnership, corporation or other form of organization.
Implementing such structure may require the merger, consolidation or
reorganization of the Company with other corporations or forms of business
organization, and although it is likely, there is no assurance that the Company
would be the surviving entity. In addition, the present management and
stockholders of the Company most likely will not have control of a majority of
the voting shares of the Company following a reorganization transaction. Such a
transaction is commonly referred to as a "reverse merger." As part of such a
transaction, the Company's existing directors may resign and new directors may
be appointed without any vote by stockholders.

It is likely that the Company will acquire its participation in a business
opportunity through the issuance of common stock or other securities of the
Company. Although the terms of any such transaction cannot be predicted, it
should be noted that in certain circumstances the criteria for determining
whether or not an acquisition is a so-called "tax free" reorganization under the
Internal Revenue Code of 1986, depends upon the issuance to the stockholders of
the acquired company of a controlling interest (i.e. 80% or more) of the common
stock of the combined entities immediately following the reorganization. If a
transaction were structured to take advantage of these provisions rather than
other "tax free" provisions provided under the Internal Revenue Code, the
Company's current stockholders would retain in the aggregate 20% or less of the
total issued and outstanding shares. This could result in substantial additional
dilution in the equity of those who were stockholders of the Company prior to
such reorganization. Any such issuance of additional shares might also be done
simultaneously with a sale or transfer of shares representing a controlling
interest in the Company by the current officers, directors and principal
shareholders. See "Description of Business - General".

It is anticipated that any new securities issued in any reorganization would be
issued in reliance upon exemptions, if any are available, from registration
under applicable federal and state securities laws. In some circumstances,
however, as a negotiated element of the transaction, the Company may agree to
register such securities either at the time the transaction is consummated, or
under certain conditions or at specified times thereafter. The issuance of
substantial additional securities and their potential sale into any trading
market that might develop in the Company's securities may have a depressive
effect upon such market.

The Company will participate in a business opportunity only after the
negotiation and execution of a written agreement. Although the terms of such
agreement cannot be predicted, generally such an agreement would require
specific representations and warranties by all of the parties


                                                                              10
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thereto, specify certain events of default, detail the terms of closing and the
conditions which must be satisfied by each of the parties thereto prior to such
closing, outline the manner of bearing costs if the transaction is not closed,
set forth remedies upon default, and include miscellaneous other terms.

As a general matter, the Company anticipates that it, and/or its officers and
principal shareholders will enter into a letter of intent with the management,
principals or owners of a prospective business opportunity prior to signing a
binding agreement. Such a letter of intent will set forth the terms of the
proposed acquisition but will not bind any of the parties to consummate the
transaction. Execution of a letter of intent will by no means indicate that
consummation of an acquisition is probable. Neither the Company nor any of the
other parties to the letter of intent will be bound to consummate the
acquisition unless and until a definitive agreement concerning the acquisition
as described in the preceding paragraph is executed. Even after a definitive
agreement is executed, it is possible that the acquisition would not be
consummated should any party elect to exercise any right provided in the
agreement to terminate it on specified grounds.

It is anticipated that the investigation of specific business opportunities and
the negotiation, drafting and execution of relevant agreements, disclosure
documents and other instruments will require substantial management time and
attention and substantial costs for accountants, attorneys and others. If a
decision is made not to participate in a specific business opportunity, the
costs theretofor incurred in the related investigation would not be recoverable.
Moreover, because many providers of goods and services require compensation at
the time or soon after the goods and services are provided, the inability of the
Company to pay until an indeterminate future time may make it impossible to
procure goods and services.

In all probability, upon completion of an acquisition or merger, there will be a
change in control through issuance of substantially more shares of common stock.
Further, in conjunction with an acquisition or merger, it is likely that
management may offer to sell a controlling interest at a price not relative to
or reflective of any value of the shares sold by management, and at a price
which could not be achieved by individual shareholders at the time.

INVESTMENT COMPANY ACT AND OTHER REGULATION

The Company may participate in a business opportunity by purchasing, trading or
selling the securities of such business. The Company does not, however, intend
to engage or hold itself out as engaging primarily in such activities.
Specifically, the Company intends to conduct its activities so as to avoid being
classified as an "investment company" under the Investment Company Act of 1940
(the "Investment Act"), and to avoid application of the costly and restrictive
registration, regulation and other provisions of the Investment Act. The Company
will only seek to acquire a majority interest in another entity.

Section 3(a) of the Investment Act contains the definition of an "investment
company," and it excludes any entity that does not engage primarily in the
business of investing, reinvesting or trading in securities, or that does not
engage in the business of investing, owning, holding or trading "investment
securities" (defined as "all securities other than government securities or
securities of majority-owned subsidiaries") the value of which exceeds 40% of
the value of its


                                                                              11
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total assets (excluding government securities, cash or cash items). The Company
intends to implement its business plan in a manner which will result in the
availability of this exception from the definition of an "investment company."
Consequently, the Company's participation in a business or opportunity through
the purchase and sale of investment securities will be limited to the purchase
of a majority interest in another entity.

The Company's plan of business may involve changes in its capital structure,
management, control and business, especially if it consummates a reorganization
as discussed above. Each of these areas is regulated by the Investment Act, in
order to protect purchasers of investment company securities. Since the Company
will not register as an investment company, stockholders will not be afforded
these protections.

Any securities which the Company might acquire in exchange for its common stock
will be "restricted securities" within the meaning of the Act. If the Company
elects to resell such securities, such sale cannot proceed unless a registration
statement has been declared effective by the SEC or an exemption from
registration is available. Section 4(1) of the Act, which exempts sales of
securities not involving a distribution, would in all likelihood be available to
permit a private sale. Although the plan of operation does not contemplate
resale of securities acquired, if such a sale were to be necessary, the Company
would be required to comply with the provisions of the Act to effect such
resale.

An acquisition made by the Company may be in an industry that is regulated or
licensed by federal, state or local authorities. Compliance with such
regulations can be expected to be a time-consuming and expensive process.

COMPETITION

The Company expects to encounter substantial competition in its efforts to
locate attractive opportunities, primarily from business development companies,
venture capital partnerships and corporations, venture capital affiliates of
large industrial and financial companies, small investment companies, and
wealthy individuals. Many of these entities and individuals will have
significantly greater experience, resources and managerial capabilities than the
Company and will therefore be in a better position than the Company to obtain
access to attractive business opportunities. The Company also will possibly
experience competition from other public "blank check" companies, some of which
may have more funds available than does the Company.

NO RIGHTS OF DISSENTING SHAREHOLDERS

The Company does not intend to provide Company shareholders with complete
disclosure documentation including audited financial statements, concerning a
possible target company prior to acquisition, because Nevada law vests authority
in the Board to decide and approve matters involving acquisitions within certain
restrictions. It is possible that a transaction would be structured as an
acquisition, not a merger, with the Company being the parent company and the
acquiree being merged into a wholly-owned subsidiary, and therefore, a
shareholder would have no right of dissent under Nevada law.


                                                                              12
<PAGE>

NO TARGET CANDIDATES FOR ACQUISITION

None of the Company's officers, directors, promoters, affiliates, or associates
have had any preliminary contact or discussion with any specific candidate for
acquisition. There are no present plans, proposals, arrangements, or
understandings with any representatives of the owners of any business or company
regarding the possibility of an acquisition transaction.

ADMINISTRATIVE OFFICES

The Company currently maintains its offices at 1800 McGill College, Suite 2480,
Montreal, Quebec H3A 3J6 which is the office address of its president. Other
than this office, the Company does not currently maintain any other office
facilities, and does not anticipate the need for maintaining additional office
facilities at any time in the foreseeable future.

RESEARCH AND DEVELOPMENT

The Company has not spent any time during the last two fiscal years on research
and development.

EMPLOYEES

The Company is a development stage company and currently has no employees.
Management of the Company expects to use consultants, attorneys and accountants
as necessary, and does not anticipate a need to engage any full-time employees
so long as it is seeking and evaluating business opportunities. The need for
employees and their availability will be addressed in connection with the
decision whether or not to acquire or participate in specific business
opportunities. Although there is no current plan with respect to its nature or
amount, remuneration may be paid to or accrued for the benefit of, the Company's
officers prior to, or in conjunction with, the completion of a business
acquisition for services actually rendered. See "Executive Compensation" and
under "Certain Relationships and Related Transactions."

FACTORS AFFECTING FUTURE PERFORMANCE

Conflicts of Interest.  Certain conflicts of interest may exist between the
Company and its officers and directors. They have other business interests to
which they devote their attention, and may be expected to continue to do so
although management time should be devoted to the business of the Company. As a
result, conflicts of interest may arise that can be resolved only through
exercise of such judgment as is consistent with fiduciary duties to the Company.
See "Directors, Executive Officers, Promoters and Control Persons."

It is anticipated that Company's officers and directors may actively negotiate
or otherwise consent to the purchase of a portion of his or her common stock as
a condition to, or in connection with, a proposed merger or acquisition
transaction. In this process, the Company's officers may consider his or her own
personal pecuniary benefit rather than the best interests of other Company
shareholders, and the other Company shareholders are not expected to be afforded
the opportunity to approve or consent to any particular stock buy-out
transaction. There is an inherent conflict of interest in such a situation, and
as long as a person is an officer or director, such person would have a
fiduciary duty to act in the best interest of the shareholders.


                                                                              13
<PAGE>

Need For Additional Financing.  The Company has very limited funds, and such
funds may not be adequate to take advantage of any available business
opportunities. Even if the Company's funds prove to be sufficient to acquire an
interest in, or complete a transaction with, a business opportunity, the Company
may not have enough capital to exploit the opportunity. The ultimate success of
the Company may depend upon its ability to raise additional capital. The Company
has less than $3,000 in assets, has no business operations or revenues, and
therefore, its ability to raise additional capital will be severely limited. The
Company has not investigated the availability, source, or terms that might
govern the acquisition of additional capital and will not do so until it
determines a need for additional financing. If additional capital is needed,
there is no assurance that funds will be available from any source or, if
available, that they can be obtained on terms acceptable to the Company.
Accordingly, the Company's business opportunities will be limited to those that
can be completed with little or no capital. See "Management's Discussion and
Analysis or Plan of Operation."

Regulation of Penny Stocks.  The Company's securities will be subject to a SEC
rule that imposes special sales practice requirements upon broker-dealers who
sell such securities to persons other than established customers or accredited
investors. For purposes of the rule, the phrase "accredited investors" means, in
general terms, institutions with assets in excess of $5,000,000, or individuals
having a net worth in excess of $1,000,000 or having an annual income that
exceeds $200,000 (or that, when combined with a spouse's income, exceeds
$300,000). For transactions covered by the rule, the broker-dealer must make a
special suitability determination for the purchaser and receive the purchaser's
written agreement to the transaction prior to the sale. Consequently, the rule
may affect the ability of broker-dealers to sell the Company's securities and
also may affect the ability of purchasers in this offering to sell their
securities in any market that might develop therefore.

In addition, the SEC has adopted a number of rules to regulate "penny stocks."
Because the securities of the Company constitute "penny stocks" within the
meaning of the rules, the rules would apply to the Company and to its
securities. The rules may further affect the ability of owners of common stock
to sell the securities of the Company in any market that might develop for them.
Shareholders should be aware that, according to the SEC, the market for penny
stocks has suffered in recent years from patterns of fraud and abuse. Such
patterns include (1) control of the market for the security by one or a few
broker-dealers that are often related to the promoter or issuer; (2)
manipulation of prices through prearranged matching of purchases and sales and
false and misleading press releases; (3) "boiler room" practices involving
high-pressure sales tactics and unrealistic price projections by inexperienced
sales persons; (4) excessive and undisclosed bid-ask differentials and markups
by selling broker-dealers; and (5) the wholesale dumping of the same securities
by promoters and broker-dealers after prices have been manipulated to a desired
level, along with the resulting inevitable collapse of those prices and with
consequent investor losses. The Company's management is aware of the abuses that
have occurred historically in the penny stock market. Although the Company does
not expect to be in a position to dictate the behavior of the market or of
broker-dealers who participate in the market, management will strive within the
confines of practical limitations to prevent the described patterns from being
established with respect to the Company's securities.

Lack of Operating History.  The Company shifted its current business focus in
January 2001 for the purpose of seeking a business opportunity. Due to the
special risks inherent in the


                                                                              14
<PAGE>

investigation, acquisition, or involvement in a new business opportunity, the
Company must be regarded as a new or start-up venture with all of the unforeseen
costs, expenses, problems, and difficulties to which such ventures are subject.

No Assurance of Success or Profitability.  There is no assurance that the
Company will acquire a favorable business opportunity. Even if the Company
should become involved in a business opportunity, there is no assurance that it
will generate revenues or profits, or that the market price of the common stock
will be increased thereby.

Possible Business - Not Identified and Highly Risky.  The Company has not
identified and has no commitments to enter into or acquire a specific business
opportunity and therefore can disclose the risks and hazards of a business or
opportunity that it may enter into in only a general manner, and cannot disclose
the risks and hazards of any specific business or opportunity that it may enter
into. An investor can expect a potential business opportunity to be quite risky.
The Company's acquisition of or participation in a business opportunity will
likely be highly illiquid and could result in a total loss to the Company and
its stockholders if the business or opportunity proves to be unsuccessful. See
"Description of Business."

Type of Business Acquired.  The type of business to be acquired may be one that
desires to avoid effecting its own public offering and the accompanying expense,
delays, uncertainties, and federal and state requirements which purport to
protect investors. Because of the Company's limited capital, it is more likely
than not that any acquisition by the Company will involve other parties whose
primary interest is the acquisition of control of a publicly traded company.
Moreover, any business opportunity acquired may be currently unprofitable or
present other negative factors.

Impracticability of Exhaustive Investigation.  The Company's limited funds and
the lack of full-time management will likely make it impracticable to conduct a
complete and exhaustive investigation and analysis of a business opportunity
before the Company commits its capital or other resources thereto. Management
decisions, therefore, will likely be made without detailed feasibility studies,
independent analysis, market surveys and the like which, if the Company had more
funds available to it, would be desirable. The Company will be particularly
dependent in making decisions upon information provided by the promoter, owner,
sponsor, or others associated with the business opportunity seeking the
Company's participation. A significant portion of the Company's available funds
may be expended for investigative expenses and other expenses related to
preliminary aspects of completing an acquisition transaction, whether or not any
business opportunity investigated is eventually acquired.

Lack of Diversification.  Because of the limited financial resources that the
Company has, it is unlikely that the Company will be able to diversify its
acquisitions or operations. The Company's probable inability to diversify its
activities into more than one area will subject the Company to economic
fluctuations within a particular business or industry and therefore increase the
risks associated with the Company's operations.

Reliance upon Financial Statements.  The Company generally will require audited
financial statements from companies that it proposes to acquire. Given cases
where audited financials are not available, the Company will have to rely upon
interim period unaudited information received


                                                                              15
<PAGE>

from target companies' management that has not been verified by outside
auditors. The lack of the type of independent verification which audited
financial statements would provide, increases the risk that the Company, in
evaluating an acquisition with such a target company, will not have the benefit
of full and accurate information about the financial condition and recent
interim operating history of the target company. This risk increases the
prospect that the acquisition of such a company might prove to be an unfavorable
one for the Company or the holders of the Company's securities.

Moreover, the Company will be subject to the reporting provisions of the
Exchange Act, and thus will be required to furnish certain information about
significant acquisitions, including audited financial statements for any
business that it acquires. Consequently, acquisition prospects that do not have,
or are unable to provide reasonable assurances that they will be able to obtain,
the required audited statements would not be considered by the Company to be
appropriate for acquisition so long as the reporting requirements of the
Exchange Act are applicable. Should the Company, during the time it remains
subject to the reporting provisions of the Exchange Act, complete an acquisition
of an entity for which audited financial statements prove to be unobtainable,
the Company would be exposed to enforcement actions by the SEC and to
corresponding administrative sanctions, including permanent injunctions against
the Company and its management. The legal and other costs of defending a SEC
enforcement action would have material, adverse consequences for the Company and
its business. The imposition of administrative sanctions would subject the
Company to further adverse consequences.

In addition, the lack of audited financial statements would prevent the
securities of the Company from becoming eligible for listing on NASDAQ, or on
any existing stock exchange. Moreover, the lack of such financial statements is
likely to discourage broker-dealers from becoming or continuing to serve as
market makers in the securities of the Company. Without audited financial
statements, the Company would almost certainly be unable to offer securities
under a registration statement pursuant to the Act, and the ability of the
Company to raise capital would be significantly limited until such financial
statements were to become available.

Other Regulation.  An acquisition made by the Company may be of a business that
is subject to regulation or licensing by federal, state, or local authorities.
Compliance with such regulations and licensing can be expected to be a
time-consuming, expensive process and may limit other investment opportunities
of the Company.

Dependence upon Management; Limited Participation of Management.  The Company
currently has only three individuals who are serving as its officers and
directors on a part-time basis. The Company will be heavily dependent upon the
skills, talents, and abilities of current management to implement its business
plan, and may, from time to time, find that the inability of the officers and
directors to devote their full time attention to the business of the Company
results in a delay in progress toward implementing its business plan. See
"Directors, Executive Officers and Significant Employees." Because investors
will not be able to evaluate the merits of possible business acquisitions by the
Company, they should critically assess the information concerning the Company's
officers and directors.

Lack of Continuity in Management.  The Company does not have an employment
agreement with its officers and directors, and as a result, there is no
assurance they will continue to manage


                                                                              16
<PAGE>

the Company in the future. In connection with acquisition of a business
opportunity, it is likely the current, and subsequently new, officers and
directors and of the Company may resign subject to compliance with Rule 14f-1
promulgated under the Exchange Act. A decision to resign will be based upon the
identity of the business opportunity and the nature of the transaction, and is
likely to occur without the vote or consent of the stockholders of the Company.

Indemnification of Officers and Directors.  Nevada law provides for the
indemnification of its directors, officers, employees, and agents, under certain
circumstances, against attorneys' fees and other expenses incurred by them in
any litigation to which they become a party arising from their association with
or activities on behalf of the Company. The Company will also bear the expenses
of such litigation for any of its directors, officers, employees, or agents,
upon such person's promise to repay the Company therefor if it is ultimately
determined that any such person shall not have been entitled to indemnification.
This indemnification policy could result in substantial expenditures by the
Company which it will be unable to recoup.

Director's Liability Limited.  Nevada law excludes personal liability of its
directors to the Company and its stockholders for monetary damages for breach of
fiduciary duty except in certain specified circumstances. Accordingly, the
Company will have a much more limited right of action against its directors than
otherwise would be the case. This provision does not affect the liability of any
director under federal or applicable state securities laws.

Dependence upon Outside Advisors.  To supplement the business experience of its
officers and directors, the Company may be required to employ accountants,
technical experts, appraisers, attorneys, or other consultants or advisors. The
selection of any such advisors will be made by the Company's president without
any input from stockholders. Furthermore, it is anticipated that such persons
may be engaged on an "as needed" basis without a continuing fiduciary or other
obligation to the Company. In the event the president of the Company considers
it necessary to hire outside advisors, he may elect to hire persons who are
affiliates, if they are able to provide the required services.

Leveraged Transactions.  There is a possibility that any acquisition of a
business opportunity by the Company may be leveraged, i.e., the Company may
finance the acquisition of the business opportunity by borrowing against the
assets of the business opportunity to be acquired, or against the projected
future revenues or profits of the business opportunity. This could increase the
Company's exposure to larger losses. A business opportunity acquired through a
leveraged transaction is profitable only if it generates enough revenues to
cover the related debt and expenses. Failure to make payments on the debt
incurred to purchase the business opportunity could result in the loss of a
portion or all of the assets acquired. There is no assurance that any business
opportunity acquired through a leveraged transaction will generate sufficient
revenues to cover the related debt and expenses.

Competition.  The search for potentially profitable business opportunities is
intensely competitive. The Company expects to be at a disadvantage when
competing with many firms that have substantially greater financial and
management resources and capabilities than the Company. These competitive
conditions will exist in any industry in which the Company may become
interested.


                                                                              17
<PAGE>

Loss of Control by Management and Stockholders.  The Company may consider an
acquisition in which the Company would issue as consideration for the business
opportunity to be acquired, an amount of the Company's authorized but unissued
common stock that would, upon issuance, represent the great majority of the
voting power and equity of the Company. Such an acquisition would result in the
acquired company's stockholders and management controlling the Company, and the
likelihood that the Company's management would be replaced by persons unknown at
this time. Such a merger may result in a greatly reduced percentage of ownership
of the Company by its current shareholders.

The principal shareholder of the Company, Yuan Guillemin may actively negotiate
for the purchase of a portion of his common stock as a condition to, or in
connection with, a proposed merger or acquisition transaction. It is anticipated
that a substantial premium may be paid by the purchaser in conjunction with any
sale of shares by the principal shareholder made as a condition to, or in
connection with, a proposed merger or acquisition transaction. The fact that a
substantial premium may be paid to a member of the Company's management to
acquire their shares creates a conflict of interest for him and may compromise
his state law fiduciary duties to the Company's other shareholders. In making
any such sale, the principal shareholder may consider his own personal pecuniary
benefit rather than the best interests of the Company and the Company's other
shareholders, and the other shareholders are not expected to be afforded the
opportunity to approve or consent to any particular buy-out transaction
involving shares held by the principal shareholder.

Public Market Limited.  The common stock currently trades on the OTC Bulletin
Board, and therefore it is difficult for a shareholder to liquidate his
investment without considerable delay. In addition, the price of the common
stock may be highly volatile. Factors such as those discussed in this "Risk
Factors" section have a significant impact upon the market price of the
securities offered hereby. Owing to the low price of the securities, many
brokerage firms may not be willing to effect transactions in the securities.
Even if a purchaser finds a broker willing to effect a transaction in these
securities, the combination of brokerage commissions, state transfer taxes, if
any, and any other selling costs may exceed the selling price. Further, many
lending institutions will not permit the use of such securities as collateral
for any loans.

Rule 144 Sales.  All of the outstanding shares of common stock held by present
officers, directors, and stockholders are "restricted securities" within the
meaning of Rule 144 under the Act. As restricted shares, these shares may be
resold only pursuant to an effective registration statement or under the
requirements of Rule 144 or other applicable exemptions from registration under
the Act and as required under applicable state securities laws. Rule 144
provides in essence that a person who has held restricted securities for one
year may, under certain conditions, sell every three months, in brokerage
transactions, a number of shares that does not exceed the greater of 1% of a
company's outstanding common stock or the average weekly trading volume during
the four calendar weeks prior to the sale. There is no limit on the amount of
restricted securities that may be sold by a nonaffiliate after the restricted
securities have been held by the owner for a period of two years. Non-affiliate
shareholders who have held their shares for under Rule 144(k) two years are
eligible to have freely tradable shares. A sale under Rule 144 or under any
other exemption from the Act, if available, or pursuant to subsequent
registration of shares of common stock of present stockholders, may have a
depressive effect upon the price of the common stock in any market that may
develop. All shares become


                                                                              18
<PAGE>

available for resale (subject to volume limitations for affiliates) under Rule
144, one year after date of purchase subject to applicable volume restrictions
under the Rule. It is the view of the Staff that securities issued by a blank
check company can only be resold through registration under the Securities Act
unless there is an applicable exemption. Rule 144 would not be available for
resale transactions in such a situation. Rule 144 would also not be available
for shares held by Yvan Guillemin, Worldnet Connections, Inc. or their
transferees. See "Security Ownership of Management and Certain Security Holders"
for a list of those persons who own Company securities.

Blue Sky Considerations.  Because the securities registered hereunder have not
been registered for resale under the blue sky laws of any state, the holders of
such shares and persons who desire to purchase them in any trading market that
might develop in the future, should be aware that there may be significant state
blue sky law restrictions upon the ability of investors to sell the securities
and of purchasers to purchase the securities. Some jurisdictions may not under
any circumstances allow the trading or resale of blind-pool or "blank check"
securities. Accordingly, investors should consider the secondary market for the
Company's securities to be a limited one. See "Description of Securities."

Blue Sky Restrictions.  Many states have enacted statutes or rules which
restrict or prohibit the sale of securities of "blank check" companies to
residents so long as they remain without specific business companies. To the
extent any current shareholders or subsequent purchaser from a shareholder may
reside in a state which restricts or prohibits resale of shares in a "blank
check" company, warning is hereby given that the shares may be "restricted" from
resale as long as the Company is a shell company.

At the date of this report, the Company has no intention of offering further
shares in a private offering to anyone. Further, the policy of the Board is that
any future offering of shares will only be made after an acquisition has been
made and can be disclosed in appropriate Current Report on Form 8-K filings.

In the event of a violation of state laws regarding resale of "blank check"
shares the Company could be liable for civil and criminal penalties which would
be a substantial impairment to the Company. At date of this report, all
shareholders' shares bear a "restrictive legend," and the Company will examine
each shareholders' resident state laws at the time of any proposed resale of
shares now outstanding to attempt to avoid any inadvertent breach of state laws.

ITEM 2.  DESCRIPTION OF PROPERTY

The Company does not own or lease any property. The Company's registered
business address is 1495 Ridgeview Drive, Suite 220, Reno, Nevada 89509. The
Company also maintains a place of business care of the President at 1800 McGill
College, Suite 2480, Montreal, Quebec, H3A 3J6 Canada.

ITEM 3.  LEGAL PROCEEDINGS

None.


                                                                              19
<PAGE>

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

No matters were submitted to a vote of security holders.


                                                                              20
<PAGE>

                                     PART II

ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

The Company's common stock is quoted on the OTC Bulletin Board. The following
table sets forth the range of high and low bid price information for the common
stock based on quotations from the OTC Bulletin Board and the OTC "Pink
Sheets"for the periods indicated (:


2000
----
First Quarter                       9/32                      1/32

Second Quarter                      3/32                      1/32

Third Quarter                       17/32                     1/4

Fourth Quarter                      1/8                       1/32


2001
----
First Quarter                       .15                       .02

Second Quarter                      .05                       .02

Third Quarter                       .04                       .05

Fourth Quarter                      .04                       .04


2002
----

First Quarter                       .065                      .015

Second Quarter                      .05                       .01

Third Quarter                       .25                       .04

Fourth Quarter                      .46                       .05


As of March 17, 2003, there were approximately 390 holders of record of the
common stock.


                                                                              21
<PAGE>

SALES OF UNREGISTERED SECURITIES

As a result of the Merger, in September 1999, the Company issued 4,500,000
(22,500,000 post-split) shares to Mercantile Factoring & Credit Corp. Such
shares were subsequently transferred to Yvan Guillemin. This transfer was exempt
from registration based on ss. 4(2) of the Act.

In July 1999, Worldnet entered into an agreement with the Company to provide
funds from time to time to the Company. In February 2001, the agreement between
Worldnet and the Company was terminated and the Company delivered 2,679,050
shares to Worldnet in exchange for the cancellation of the note. See "Interest
of Management and Others in Certain Transactions." This transfer was also exempt
from registration based on ss. 4(2) of the Act because the transaction was by an
issuer not involved in any public offering. Pursuant to Rule 506 of Regulation D
of the Act, the transaction is exempt because there was only one purchaser of
securities from the issuer and the purchaser either was an accredited investor
or had such knowledge and experience in financial and business matters that he
is capable of evaluating the merits and risks of the prospective investment.

It is the view of the Staff that, both before and after the business combination
or transaction with an operating entity or other person, the promoters or
affiliates of blank check companies, as well as their transferees, are
"underwriters" of the securities issued. It is also the view of the Staff that
securities issued by a blank check company can only be resold through
registration under the Act unless there is an applicable exemption.

DIVIDENDS

The Company has not paid dividends on its common stock and does not anticipate
paying such dividends in the foreseeable future.

INDEMNIFICATION OF DIRECTORS AND OFFICERS

LIMITATION ON LIABILITY; INDEMNIFICATION OF DIRECTORS AND OFFICERS

The Company's Articles of Incorporation and Bylaws includes certain provisions
whereby officers and directors of the Company shall be indemnified against
certain liabilities to the Company or its shareholders.

The Articles of Incorporation limits a director's and /or an officer's liability
to the Company and its shareholders for damages resulting from the breach of
fiduciary duty of care as a director or officer involving any act or omission of
any such director or officer, except when such breach results from (i) acts or
omissions which involve intentional misconduct, fraud or knowing violation of
law, or (ii) the unlawful payments of dividends in violation of Section 78.300
of the Nevada Revised Statutes.

The Bylaws provides for the indemnification of all past and present directors
and officers of the Company for all expenses actually and necessarily incurred
by them in connection with the defense of any action, suit or proceeding in
which they, or any of them, are made parties, or a party by reason of being or
having been a director or an officer of the Company, except in


                                                                              22
<PAGE>

relation to matters as to which any such director or officer shall be adjudged
in such action, suit or proceeding to be liable for negligence or misconduct in
the performance of a duty or duties.

The Company believes that these provisions will facilitate the Company's ability
to continue to attract and retain qualified individuals to serve as directors
and officers of the Company.

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

The Company remains in the development stage and, since inception, has
experienced significant liquidity problems and has no capital resources or
stockholder's equity. The Company has current assets in the form of cash of $ 0,
total assets of $ 0 and current liabilities of $393,727 as of December 31, 2003.
The Company will need additional capital in the next twelve months for any
expenditures, and at present has no source of such capital.

Over the next twelve months, the Company's business plan is to seek,
investigate, and, if warranted, acquire one or more properties or businesses,
and to pursue other related activities intended to enhance shareholder value.
The acquisition of a business opportunity may be made by purchase, merger,
exchange of stock, or otherwise, and may encompass assets or a business entity,
such as a corporation, joint venture, or partnership. The Company does not have
significant capital, and it is unlikely that the Company will be able to take
advantage of more than one such business opportunity. The Company cannot predict
to what extent its lack of liquidity and capital resources will impair the
consummation of a business combination or whether it will incur further
operating losses through any business entity which the Company may eventually
acquire.

The Company's operations during the next 12 months will be limited solely to the
seeking of an appropriate merger or acquisition candidate. The Company does not
intend to pay any salaries nor incur any expenses other than those expenses
necessary to ensure that the Company remains in good standing with the State of
Nevada and in compliance with the regulatory requirements of the SEC and other
regulatory bodies. The majority shareholder of the Company has orally committed
to advance to the Company whatever funds may be necessary to maintain regulatory
compliance until the Company completes a merger or acquisition.

The Company currently has no product research and development that it will
perform over the term of the business plan. There is no current plan to purchase
or sell any significant equipment. The Company currently has no plans to
purchase or sell any significant equipment or to make any significant changes in
the number of employees.

There are no arrangements, agreements or understandings between non-management
shareholders and management under which non-management shareholders may directly
or indirectly participate in or influence the management or affairs of the
Company. No shareholders have been approved to fund any potential advances in
the next twelve months nor is there any basis for believing that shareholder
advances would be available in the next twelve months.

There are no current plans, understandings, agreements, or commitments with
anyone to act as a finder of opportunities for the Company. In the case that
such efforts will ever be undertaken, it


                                                                              23
<PAGE>

is unknown at this time who if anyone would act as a finder. Such a finder would
be engaged or used prior to or concurrent with acquisition of an opportunity.

During the period from March 28, 1995 through December 31, 2002 the Company has
engaged in no significant operations other than organizational activities,
acquisition of capital and preparation for registration of its securities under
the Exchange Act. No revenues were received by the Company during this period.
The Company has incurred operating expenses from inception through December 31,
2002 of $700,132. The net loss on operations was ($88,087) for the year ended
December 31, 2002. Such losses will continue unless revenues and business can be
acquired by the Company. There is no assurance that revenues or profitability
will ever be achieved by the Company.

The Company does not have capital sufficient to meet the Company's cash needs,
including the costs of compliance with the continuing reporting requirements of
the Exchange Act. The Company will have to seek loans or equity placements to
cover such cash needs. In the event the Company is able to complete a business
combination during this period, lack of its existing capital may be a sufficient
impediment to prevent it from accomplishing the goal of competing a business
combination. There is no assurance, however, that without funds it will
ultimately allow the Company to complete a business combination. Once a business
combination is completed, the Company's needs for additional financing are
likely to increase substantially.


                                                                              24
<PAGE>

ITEM 7.  FINANCIAL STATEMENTS

                                INCITATIONS, INC.
                          (A Development Stage Company)
                              FINANCIAL STATEMENTS
                                  (U.S. Funds)


                                DECEMBER 31, 2002


                                    CONTENTS


                                                                            PAGE

INDEPENDENT AUDITOR'S REPORT                                                   I

FINANCIAL STATEMENTS                                                          II

     Balance Sheet                                                            II

     Statements of Operations                                                III

     Statement of Stockholders' Equity (Deficit)                              IV

     Statements of Cash Flows                                                  V

     Notes to Financial Statements                                          VI-X


                                                                              25
<PAGE>

                               JULITO F. LONGKINES
                           Certified Public Accountant
                       3160 Steeles Avenue East, Suite 300
                            Markham, Ontario L3R 3Y2
                            Telephone - 905-475-2222

Member: American Institute of Certified Public Accountants
        Illinois CPA Society

                          INDEPENDENT AUDITOR'S REPORT

To the Shareholders of
INCITATIONS, INC.

I have audited the balance sheet of INCITATIONS, INC. (A DEVELOPMENT STAGE
COMPANY) as at December 31, 2002 and the statements of operations, stockholders'
equity (deficit) and cash flows for the years ended December 31, 2002 and 2001
and for the period from inception, March 28, 1995 to December 31, 2002. These
financial statements are the responsibility of the company's management. My
responsibility is to express an opinion on these financial statements based on
my audit.

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

In my opinion, these financial statements present fairly, in all material
respects, the financial position of the company as at December 31, 2002 and the
results of its operations and its cash flows for the years ended December 31,
2002 and 2001 and for the period from inception, March 28, 1995 to December 31,
2002 in conformity with generally accepted accounting principles in the United
States of America.

The accompanying financial statements have been prepared assuming the company
will continue as a going concern. As discussed in Note 6 to the financial
statements, the company is a development stage company with no significant
operating revenues to date. Because the company has no significant sources of
revenue, there is substantial doubt about its ability to continue as a going
concern. Management's plans in regard to these matters are also described in
Note 6. The financial statements do not include any adjustments that might
result from the outcome of this uncertainty.


                                       JULITO F. LONGKINES
                                       Certified Public Accountant

Markham, Ontario
February 28, 2003


                                                                              26
<PAGE>

                                INCITATIONS, INC.
                          (A Development Stage Company)

                                  BALANCE SHEET
                                  (U.S. Funds)

                                DECEMBER 31, 2002

<TABLE>
<CAPTION>
<S>                                                           <C>
                                     ASSETS
CURRENT
Cash                                                                  $      --
                                                                      =========
                                   LIABILITIES
CURRENT
Accounts payable                                                       $158,891
Advances from related company (Note 5)                                  234,836
                                                                      ---------
                                                                        393,727
                                                                      =========
                               CAPITAL DEFICIENCY
AUTHORIZED
       300,000,000     Common stock at $0.0002 par value
ISSUED AND OUTSTANDING
        27,142,325     Common stock                                      27,834
ADDITIONAL PAID-IN CAPITAL                                              278,571
DEFICIT ACCUMULATED DURING THE DEVELOPMENT STAGE                       (700,132)
                                                                      ---------
                                                                       (393,727)
                                                                      =========
                                                                      $     --
                                                                      =========
</TABLE>

See accompanying notes to financial statements.


                                                                              27
<PAGE>

                                INCITATIONS, INC.
                          (A Development Stage Company)

                            STATEMENTS OF OPERATIONS
                                  (U.S. Funds)

<TABLE>
<CAPTION>
                                                                          From the Date of
                                                                            Inception on
                                               For the Years Ended        March 28, 1995 to
                                                   December 31               December 31
                                               2002            2001               2002
                                           -----------     ------------        ----------
<S>                                       <C>           <C>                <C>
REVENUE                                    $        --     $        --         $      --
EXPENSES                                        88,087          95,677           700,132
                                           -----------     ------------        ----------
NET LOSS FROM OPERATIONS                   $   (88,087)    $   (95,677)        $(700,132)
                                           ============    ============        ==========
Weighted average number of shares           27,142,325      26,807,414
                                           ===========     ===========
Basic loss per share                       $     (0.00)    $     (0.01)
                                           ===========     ===========
</TABLE>

See accompanying notes to financial statements.


                                                                              28
<PAGE>

                                INCITATIONS, INC.
                          (A Development Stage Company)

                  STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
                                  (U.S. Funds)

                    FOR THE PERIOD FROM THE DATE OF INCEPTION
                       MARCH 28, 1995 TO DECEMBER 31, 2002

<TABLE>
<CAPTION>
                                                                                                   Deficit
                                                                                   Additional    Accumulated
                                                     Common Stock      Paid-in    Development     During the
                                                       Shares          Amount      Capital          Stage
                                                          #              $            $               $
                                                     -----------    -----------   -----------    -----------
<S>                                                 <C>            <C>           <C>            <C>
Inception on March 28, 1995                                 --             --            --             --
Common stock issued for cash at $0.0058 per share      1,850,540           --            --             --
Common stock issued for cash at $0.0334 per share      1,862,349           --            --             --
Net loss for the period ended December 31, 1995             --             --            --             --
                                                     -----------    -----------   -----------    -----------
Balance, December 31, 1995                             3,712,889           --            --             --
Net loss for the year ended December 31, 1996               --             --            --           (1,500)
                                                     -----------    -----------   -----------    -----------
Balance, December 31, 1996                             3,712,889           --            --           (1,500)
Net loss for the year ended December 31, 1997               --             --            --             (535)
                                                     -----------    -----------   -----------    -----------
Balance, December 31, 1997                             3,712,889           --            --           (2,035)
Common stock issued for cash at $0.0356 per share
  (Note 4)                                               421,728           --            --             --
Net loss for the year ended December 31, 1998               --             --            --           (3,035)
                                                     -----------    -----------   -----------    -----------
Balance, December 31, 1998                             4,134,617           --            --           (5,070)
Common stock cancelled (Note 4)                          (28,115)          --            --             --
Common stock cancelled (Notes 3 and 4)                (2,534,615)          --            --             --
Common stock cancelled (Note 4)                         (383,612)          --            --             --
Common stock issued in exchange for all issued and
  outstanding common shares of MFCC (Note 3)          22,500,000         25,000        (2,000)          --
Common stock issued for professional fees at $0.02
  per share (Note 4)                                     775,000            155        15,345           --
Net loss for the year ended December 31, 1999               --             --            --         (429,997)
                                                     -----------    -----------   -----------    -----------
Balance, December 31, 1999                            24,463,275         25,155        13,345       (435,067)
Net loss for the year ended December 31, 2000               --             --            --          (81,301)
                                                     -----------    -----------   -----------    -----------
Balance, December 31, 2000                            24,463,275         25,155        13,345       (516,368)
Conversion of loan payable into common stock
    (Note 4)                                           2,679,050          2,679       265,226           --
Net loss for the year ended December 31, 2001               --             --            --          (95,677)
                                                     -----------    -----------   -----------    -----------
Balance December 31, 2001                             27,142,325         27,834       278,571       (612,045)
                                                     ===========    ===========   ===========    ===========
Net loss for the year ended December 31, 2002               --             --            --          (88,087)
                                                     -----------    -----------   -----------    -----------
Balance December 31, 2002                             27,142,325         27,834       278,571       (700,132)
                                                     ===========    ===========   ===========    ===========
</TABLE>


See accompanying notes to financial statements.


                                                                              29
<PAGE>

                                INCITATIONS, INC.
                          (A Development Stage Company)

                            STATEMENTS OF CASH FLOWS
                                  (U.S. Funds)

<TABLE>
<CAPTION>
                                                                                From the Date Of
                                                                                  Inception on
                                                           For the Years Ended   March 28, 1995
                                                               December 31       to December 31
                                                            2002        2001         2002
                                                         ---------    ---------    ---------
<S>                                                     <C>          <C>          <C>
CASH FLOWS FROM OPERATING ACTIVITIES
  Loss from operations                                   $ (88,087)   $ (95,677)   $(700,132)
  Increase in accounts payable                              59,846       10,965      158,891
  Write-off of investment in shares of stock                  --           --        250,000
                                                         ---------    ---------    ---------
                                                           (28,241)     (84,712)    (291,241)
                                                         ---------    ---------    ---------

CASH FLOWS FROM INVESTING ACTIVITIES
  Amount paid for the acquisition of Cynergy shares           --           --       (250,000)
  Accounts payable acquired on merger                         --           --         (2,000)
                                                         ---------    ---------    ---------
                                                              --           --       (252,000)
                                                         ---------    ---------    ---------

CASH FLOWS FROM FINANCING ACTIVITIES
  Advances from a related company                           25,336       84,712      234,836
  Issuance of common stock                                    --           --         40,500
  Increase in loans payable                                   --           --        267,905
                                                         ---------    ---------    ---------
                                                            25,336       84,712      543,241
                                                         ---------    ---------    ---------

DECREASE IN CASH                                              --           --         (2,905)
  CASH, beginning of year                                    2,905        2,905         --
                                                         ---------    ---------    ---------
  CASH, end of year                                           --      $   2,905         --
                                                         =========    =========    =========

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
  Interest paid                                          $    --      $    --      $    --
                                                         =========    =========    =========
  Income taxes paid                                      $    --      $    --      $    --
                                                         =========    =========    =========

SUPPLEMENTAL DISCLOSURE OF NON-CASH FINANCING ACTIVITY
  Issuance of common shares on cancellation of debt      $    --      $ 267,905    $ 267,905
                                                         =========    =========    =========
</TABLE>


See accompanying notes to financial statements.


                                                                              31
<PAGE>

                                INCITATIONS, INC.
                          (A Development Stage Company)

                          NOTES TO FINANCIAL STATEMENTS
                                  (U.S. Funds)

                                DECEMBER 31, 2002

1.   ORGANIZATION AND DESCRIPTION OF BUSINESS

     Incitations, Inc. ("Incitations" or the "Company") was incorporated under
     the laws of the state of Nevada on March 28, 1995 under the name of Truco,
     Inc. The shareholders approved a name change on March 22, 1996, March 18,
     1997, September 13, 1999 and October 3, 2000 to Web Tech, Inc., Cynergy,
     Inc., Mercantile Factoring Credit Online Corp. and to its present name,
     respectively.

     Prior to the merger in September 1999 (Note 3), the Company's activities
     had been in the development of proprietary technology and services using
     smart and remote memory cards and wireless and landline networks in the
     fields of commerce, publishing and network based systems.

     The financial statements of the Company are prepared in accordance with
     generally accepted accounting principles in the United States of America.

2.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     (a)  Accounting Method

     The Company's financial statements are prepared using the accrual method of
     accounting.

     (b)  Income Taxes

     No provision for income taxes has been made due to the inactive status of
     the Company. The Company has net operating loss carry-forwards of
     approximately $539,000, including Cynergy's net operating loss
     carry-forward of $92,000 at the time of merger, which expire up to 2017,
     and a capital loss carry forward of $250,000. The potential tax benefit of
     the loss carry-forwards has been offset in full by a valuation allowance.

     (c)  Estimates

     The preparation of financial statements in accordance with generally
     accepted accounting principles in the United States of America requires
     management to make estimates and assumptions that affect the reported
     amount of assets and liabilities and disclosure of contingent assets and
     liabilities at the date of the financial statements and the reported amount
     of revenues and expenses during the reported period. These estimates are
     reviewed periodically, and, as adjustments become necessary, they are
     reported in earnings in the period in which they become known.


                                                                              32
<PAGE>


                                INCITATIONS, INC.
                          (A Development Stage Company)

                          NOTES TO FINANCIAL STATEMENTS
                                  (U.S. Funds)

                                DECEMBER 31, 2002


2.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

     (d)  Basic Loss per Common Share

     Basic loss per common share has been calculated based on the weighted
     average number of shares of common stock outstanding during the period.

3.   BUSINESS COMBINATION

     On September 29, 1999, the Company and Mercantile Factoring & Credit Corp.
     ("MFCC") completed their agreement to merge upon the filing of the Articles
     of Merger with the Secretary of State of the state of Nevada.

     Pursuant to a separate transaction, MFCC bought 2,534,615 shares of the
     Company (61.3%) from the shareholders for cash of $250,000 and, prior to
     the merger, contributed those shares to the Company for cancellation. The
     investment was written off and charged to expenses on the statement of
     operations for the year ended December 31, 1999.

     Under the merger agreement, the Company issued 22,500,000 post-merger
     shares to the former owner of MFCC in consideration for all of the issued
     and outstanding common shares of MFCC. As the former shareholder of MFCC
     obtained control (91.97%) of the Company through the share exchange, this
     transaction has been accounted for in these financial statements as a
     reverse takeover and the purchase method of accounting has been applied.
     Under reverse takeover accounting, MFCC is considered to have acquired
     Incitations with the results of operations included in these financial
     statements from the date of acquisition. MFCC was then merged into the
     Company.

4.   STOCK TRANSACTIONS

     In March 1995, the Company issued 1,850,540 shares of common stock to
     individuals at $0.029 per share for cash.

     At the end of 1995, the Company completed a public offering. A total of
     1,862,348 shares of common stock were issued at $0.0334 per share. The
     stock offering costs were offset against the proceeds of the common stock.
     On January 10, 1996, the Company effected a 10-for-1 reverse stock split.
     On March 28, 1996, the Company effected a 6-for-1 forward stock split and
     changed its par value from $0.01 per share to $0.001 per share. The
     authorized shares were 300,000,000 after these amendments. The financial
     statements reflect the stock splits on a retroactive basis.

     On March 24, 1998, the Company entered into a Rescission Agreement with the
     shareholders of Geo Ram, Inc. whereby the shareholders of Geo Ram, Inc.
     returned the


                                                                              33
<PAGE>

                                INCITATIONS, INC.
                          (A Development Stage Company)

                          NOTES TO FINANCIAL STATEMENTS
                                  (U.S. Funds)

                                DECEMBER 31, 2002


     6,000,000 shares issued in connection with the Share Exchange Agreement
     dated November 30, 1996. The rescission has been reflected on a retroactive
     basis.

4.   STOCK TRANSACTIONS (Continued)

     Based on a letter of Understanding, dated May 25, 1998, the Company
     acquired the rights to purchase a 100% working interest, subject to a 21%
     royalty (79% net revenue interest), in oil and gas leases consisting of 960
     acres for a total of $240,000. The leases were located in San Joaquin
     Valley, Kern County, California.

     The Company decided not to proceed with the option. No further payments
     were made and the option expired. The initial payment of $15,000 was paid
     by shareholders who were issued 421,728 shares of common stock at $0.0356
     per share.

     On September 3, 1999, the Company cancelled 28,115 common stock and
     credited the paid-in capital for the original par value.

     On September 13, 1999, the Company effected a 17.784 for 1 reverse stock
     split. The financial statements reflect the stock splits on a retroactive
     basis.

     On September 22 and 23, 1999, the Company cancelled 2,534,615 and 383,612
     common stock, respectively, and credited the paid-in capital for the
     original par value.

     In accordance with the merger agreement (Note 3), the Company issued
     22,500,000 common shares at $0.001 per share to the former owner of MFCC in
     exchange for all issued and outstanding shares of MFCC.

     The Company issued 400,000 and 375,000 common shares at $0.02 per share in
     September 1999 as finders' and legal fees, respectively, in connection with
     the merger.

     On October 3, 2000, the Company effected a 5 for 1 stock split. The
     financial statements reflect the stock splits on a retroactive basis.

     The company issued 2,679,050 common shares at $0.10 per share on February
     15, 2001 in connection with the cancellation of the financing agreement and
     conversion of loan payable.

     In April 2001, the par value of the Company's common stock was changed from
     $0.001 to $0.0002 per Certificate of Amendment to the Articles of
     Incorporation.

5.   ADVANCES FROM A RELATED COMPANY

     The advances from a related company are unsecured and non-interest bearing
     with no specific terms of repayment.


                                                                              34
<PAGE>

                                INCITATIONS, INC.
                          (A Development Stage Company)

                          NOTES TO FINANCIAL STATEMENTS
                                  (U.S. Funds)

                                DECEMBER 31, 2002


6.   GOING CONCERN

     The Company financial statements are prepared using generally accepted
     accounting principles in the United States of America applicable to a going
     concern which contemplates the realization of assets and liquidation of
     liabilities in the normal course of business. The Company has not
     established revenues sufficient to cover its operating costs and allow it
     to continue as a going concern.

     Over the next twelve months, the Company's business plan is to seek,
     investigate, and, if warranted, acquire one or more properties or
     businesses, and pursue other related activities intended to enhance
     shareholder value. The acquisition of a business opportunity may be made by
     purchase, merger, exchange of stock, or otherwise, and may encompass assets
     or a business entity, such as a corporation, joint venture or partnership.
     The Company does not have significant capital, and it is unlikely that the
     Company will be able to take advantage of more than one such business
     opportunity.

     The Company's operations during the next 12 months will be limited solely
     to the seeking of an appropriate merger or acquisition candidate. The
     Company does not intend to pay any salaries nor incur any expenses other
     than those expenses necessary to ensure that the Company remains in good
     standing with the State of Nevada and in compliance with the regulatory
     requirements of the SEC and other regulatory bodies. The majority
     shareholder of the Company has orally committed to advance to the Company
     whatever funds may be necessary to maintain regulatory compliance until the
     Company completes a merger or acquisition.

7.   RECENT ACCOUNTING PRONOUNCEMENTS

     Under Staff Accounting Bulletin 74, the Company is required to disclose
     certain information related to new accounting standards which had not yet
     been adopted due to delayed effective dates.

          (i)  Statement of Financial Accounting Standard No. 146 (SFAS 146)

               In July 2002, the FASB issued SFAS 146, which addresses
               significant issues regarding the recognition, measurement, and
               reporting of costs that are associated with exit and disposal
               activities, including restructuring activities that are currently
               accounted for pursuant to the guidance that the Emerging Issues
               Task force ("EITF") has set forth in EITF issue No. 94-3,
               "Liability Recognition for Certain Employee Termination Benefits
               and Other Costs to Exit an Activity (Including Certain Costs
               Incurred in a Restructuring)." SFAS 146 revises the accounting
               for certain lease termination costs and employee termination
               benefits, which are generally recognized in connection with
               restructuring activities. The adoption of this Statement is not
               expected to have a material effect on the Company's


                                                                              35
<PAGE>

                                INCITATIONS, INC.
                          (A Development Stage Company)

                          NOTES TO FINANCIAL STATEMENTS
                                  (U.S. Funds)

                                DECEMBER 31, 2002


               financial statements.

7.   RECENT ACCOUNTING PRONOUNCEMENTS (Continued)

          (ii) Statement of Financial Accounting Standard No. 148 (SFAS 148)

               In December 2002, the FASB issued SFAS No. 148, "Accounting for
               Stock-Based Compensation - Transition and Disclosure". SFAS No.
               148 amends the transition and disclosure provisions of SFAS No.
               123. The Company is currently evaluating SFAS No. 148 to
               determine if it will adopt SFAS No. 123 to account for Employee
               stock options using the fair value method and, if so, when to
               begin transition to that method.

          (iii) FASB Interpretation No. 45 (FIN 45)

In November 2002, the FASB issued FIN 45, which expands previously issued
accounting guidance and disclosure requirements for certain guarantees. FIN 45
requires the Company to recognize an initial liability for the fair value of an
obligation assumed by issuing a guarantee. The provision for initial recognition
and measurement of the liability will be applied on a prospective basis to
guarantees issued or modified after December 31, 2002. The adoption of FIN 45 is
not expected to materially affect the Company's financial statements.


                                                                              36
<PAGE>



                                    PART III

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

The following table sets forth certain information with respect to the directors
and executive officers of the Company. There is no arrangement or understanding
between any director or officer and any other person pursuant to which such
person was selected as a director and/or officer of the Company. There is no
family relationship among any directors or executive officers of the Company.

Name                                   Age              Position
---------------------------            ---              --------
Dominique M. Bellemare                  42              President/Director
Christelle Morrison                     21              Secretary/Director
Yvan Guillemin                          53              Vice President/Director


Dominique M. Bellemare has been serving as the Company's president and as a
director since being elected to the Board at a special meeting of the Company's
shareholders in September 1999. Mr. Bellemare currently devotes approximately
five percent (approximately 5 hours per month) of his time to the business of
the Company. Unless Mr. Bellemare resigns in connection with the Company's
acquisition of a business opportunity, Mr. Bellemare will devote a greater
percentage of his time to the new business of the Company. Mr. Bellemare is an
attorney qualified to practice law in the Province of Quebec. Since 1998, Mr.
Bellemare has been serving as Senior Vice-President and Senior Counsel for
Credit Mutuel. Prior to that from the period of 1991 through 1998, Mr. Bellemare
was a partner at the law firm of Bloomfield Bellemare. See "Interest of
Management and Others in Certain Transactions."

Christelle Morrison has been serving as a director since being elected to the
Board by unanimous consent in lieu of a meeting in August 2000. Ms. Morrison
currently devotes approximately one percent (approximately 1 hour per month) of
her time to the business of the Company in connection with administrative
matters. Ms. Morrison serves as the Company's Secretary. In conjunction with
these duties, she also serves as an officer and/or director for several private
Nevada corporations, none of which is a parent, subsidiary or affiliate of the
Company. Ms. Morrison resides in the state of Nevada where she has been employed
as a legal secretary since her high school graduation in 1998.

Yvan Guillemin has been serving as a director since being elected to the Board
at a special meeting of the Company's shareholders in September 1999. Mr.
Guillemin currently devotes approximately five percent (approximately 5 hours
per month) of his time to the business of the Company. Mr. Guillemin graduated
from the Paris School of Commerce and directed a series of businesses in Paris,
France. Mr. Guillemin is the President of Polo Conseil, whose principal business
is to organize equestrian sporting events and the importation and distribution
of polo sporting goods. He has a personal stable of two hundred fully trained
polo ponies which are rented to various industrialists throughout Europe. Mr.
Guillemin maintains a staff of over ten people to deal with the business of
organizing equestrian sporting events and the distribution of polo sporting
goods in Europe and Argentina. In addition, Mr. Guillemin was also a pioneer in
developing and manufacturing the stretch material used in equestrian clothing
which is used


                                                                              37
<PAGE>

today in over 50% of all riding clothes manufactured in Europe. Mr. Guillemin is
the sole shareholder of Worldnet which company has provided all of the financing
of the Company to date. See "Certain Relationships and Related Transactions."

Each director has been elected to hold office until the next annual meeting of
shareholders and until his successor has been qualified and elected.

There is no family relationship among any directors or officers of the Company.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
executive officers, directors, and persons who own more than ten percent of a
registered class of the Company's equity securities to file reports of ownership
with the Securities and Exchange Commission ("SEC") and NASD. Executive
officers, directors, and greater than ten-percent stockholders are required by
SEC regulation to furnish the Company with copies of all Section 16(a) forms
they file.

The Company believes that all filing requirements applicable under Section 16(a)
to its executive officers, directors and 10% stockholders were complied with for
2002.

ITEM 10.  EXECUTIVE COMPENSATION

To date, the Company has not paid any compensation to any of its executive
officers or directors. Although there is no current plan with respect to its
nature or amount, remuneration may be paid to or accrued for the benefit of, the
Company's officers prior to, or in conjunction with, the completion of a
business acquisition for services actually rendered.

Directors of the Company who are not employees of the Company have not received
any compensation for attending meetings of the Board. It is currently the
intention of the Company to maintain this policy. However, directors are
reimbursed for their expenses in attending such meetings.


                                                                              38
<PAGE>

ITEM 11.  SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN BENEFICIAL OWNERS

As of April 5, 2002, the Company had 27,142,325 shares of common stock issued
and outstanding. The following table sets forth certain information with respect
to the beneficial ownership of the Company's common stock as of March 14, 2002
by (1) each of the Company's directors, (2) each of its executive officers, (3)
each person or entity who is known to the Company to beneficially own ten
percent or more of the outstanding common stock, and (4) all directors and
executive officers of the Company as a group.

<TABLE>
<CAPTION>
Name and Address of                    Number of Shares      Percentage of Class
Beneficial Owner(1)                  Beneficially Owned(2)    Beneficially Owned
-------------------                  --------------------    -------------------
<S>                                 <C>                     <C>
Dominique M. Bellemare                       -0-                   ---
Christelle Morrison                          -0-                   ---
Yvan Guillemin(3)                         25,179,050               93%
All officers and directors as
  a group (3 persons)                     25,179,050               93%
</TABLE>

----------
(1)  In care of Incitations, Inc., 1495 Ridgeview Drive, Suite 220, Reno, Nevada
     89509.

(2)  Beneficial ownership has been determined in accordance with Rule 13d-3 of
     the Exchange Act. Generally, a person is deemed to be the beneficial owner
     of a security if he or it has the right to acquire voting or investment
     power within 60 days of the date of this report. Except as otherwise noted,
     each individual or entity has sole voting and investment power over the
     securities listed. All share holdings reflect the Company's 5-for-1 stock
     split in October 2000. See "Description of Securities."


                                                                              39
<PAGE>

(3)  Includes 2,679,050 shares owned by Worldnet Connections, Inc. ("Worldnet"),
     of which Mr. Guillemin, a director of the Company, owns all the issued and
     outstanding shares. Prior to the date hereof, Worldnet entered into an
     agreement with the Company to provide funds from time to time to the
     Company. Such loan was convertible into shares of the Company's common
     stock based on a conversion ratio of 60,000 shares of common stock for
     every $100,000 advanced by Worldnet. In February 2001, the agreement
     between Worldnet and the Company was terminated and the Company delivered
     2,679,050 shares to Worldnet in exchange for the cancellation of the note.
     See "Interest of Management and Others in Certain Transactions."


                                                                              40
<PAGE>

ITEM 12.  INTEREST OF MANAGEMENT AND OTHERS IN CERTAIN TRANSACTIONS

Mr. Yvan Guillemin, a director of the Company, owns all of the issued and
outstanding shares of Worldnet's common stock. In July 1999, Worldnet entered
into an agreement with the Company to provide funds from time to time to the
Company. In February 2001, the agreement between Worldnet and the Company was
terminated and the Company delivered 2,679,050 shares to Worldnet in exchange
for the cancellation of the note. Although the original financing agreement with
Worldnet was cancelled, Worldnet continues to advance monies to the Company to
cover certain ongoing expenses. As of December 31, 2002, $234,836 in advances
were made by Worldnet to the Company. The advances are non-interest bearing with
no specific terms of repayment.

No other member of the Board or officer of the Company, to the Company's
knowledge, has any material interest resulting from any relationship or business
affiliation with the Company.


ITEM 13:

A)  INDEX TO EXHIBITS

Exhibit No.   Exhibit Name/Description
-----------   ------------------------

3.1           Articles of Incorporation of Registrant*

3.2           By-laws of Registrant*

3.3           Articles of Merger*

4.1           Form of Unsecured Convertible Note*

10.1          Loan Agreement by and between Mercantile Factoring and Credit
              Corp. and Worldnet, dated July 30, 1999*

10.2          Agreement and Plan of Merger, dated as of September 22, 1999 by
              and among Mercantile Factoring and Credit Corp. and Cynergy, Inc.*

10.3          Lease Agreement between Credit Mutuel de Montreal CMM Inc., and
              MFCO, dated October 1, 1999*

99.1          Certification

99.2          Certification of the Chief Executive Officer and Chief Financial
              Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
              Section 906 of the Sarbanes-Oxley Act of 2002.

*    Previously Filed
                                                                              41
<PAGE>



B)  REPORTS ON FORM 8K

There were no reports filed on Form 8K during the last quarter of the period
covered by this report.


ITEM 14.  CONTROL AND PROCEDURES.

A)  EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

The Company's Chief Executive Officer and Chief Financial Officer, Dominique M.
Bellemare, has reviewed the Company's disclosure controls and procedures within
90 days prior to the filing of this report. Based upon that review, Mr.
Bellemare believes that the disclosure controls and procedures are effective in
ensuring that material information related to the Company is made known.

B)  CHANGES IN INTERNAL CONTROLS

There were no signifiacnt changes in the Company's internal controls or in other
factors that could significally affect these controls during the quarter covered
by this report or from the end of the reporting period to the date of this Form
10KSB.


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<PAGE>

                                   SIGNATURES

In accordance with Section 13 or 15(d) of the Securities Exchange Act of 1934,
the Registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.

                                       Incitations, Inc.


Date:       March 17, 2003              By: /s/ Dominique M. Bellemare
     --------------------------------      -------------------------------------
                                            Dominique M. Bellemare
                                            President and Director

Date:       March 17, 2003              By: /s/ Christelle Morrison
     --------------------------------      -------------------------------------
                                            Christelle Morrison
                                            Secretary and Director


Date:       March 17, 2003              By: /s/ Yvan Guillemin
     --------------------------------      -------------------------------------
                                            Yvan Guillemin
                                            Vice President and Director


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