<PAGE>

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                   FORM 10-QSB
                   Quarterly Report Under Section 13 or 15(d)
                     of the Securities Exchange Act of 1934

                  For the quarterly period ended September 30, 2002
                        Commission file number 000-25499


                              Flexxtech Corporation
                       -----------------------------------
        (Exact name of small business issuer as specified in its charter)


                      Nevada                              88-0390360
         ------------------------------         ----------------------------
         State or other jurisdiction of         (IRS Employer Identification
         incorporation or organization                    Number)


         20902 Bake Parkway, Suite 112
               Lake Forest, CA                             92630
         ------------------------------         ----------------------------
     (Address of principal executive offices)           (Zip Code)


                                 (949) 460-7744
                 ----------------------------------------------
                (Issuer's telephone number, including area code)


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


                      APPLICABLE ONLY TO CORPORATE ISSUERS:

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date:

As of September 30, 2002, the issuer had outstanding 41,035,754 shares of its
Common Stock, $0.001 par value.

<PAGE>

PART I - FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS.

     (A) BALANCE SHEET

     (B) STATEMENT OF OPERATIONS

     (C) STATEMENT OF CASH FLOWS


                              FLEXXTECH CORPORATION
                           CONSOLIDATED BALANCE SHEET
                               SEPTEMBER 30, 2002
                                   (UNAUDITED)

                                     ASSETS
Current Asset:
               Cash and cash equivalents                           $      6,275
               Accounts receivable                                          300
               Marketable securities - available for sale                88,923
               Deposits & other current assets                            1,576
                                                                   -------------
       Total Current Asset                                               97,074
                                                                   -------------

Property & equipment, net                                                 4,323

                                                                   -------------
TOTAL ASSETS                                                       $    101,397
                                                                   =============


                        LIABILITIES STOCKHOLDERS' DEFICIT
Current Liabilities:
               Accrued expenses                                    $    174,773
               Loans payable - Current                                   76,284
               Loans payable- Related parties                         2,037,798
                                                                   -------------
       Total Current Liabilities                                      2,288,855

Long-term Liabilities:
               Convertible debt                                         679,473

STOCKHOLDERS' DEFICIT
        Common stock, authorized 100,000,000 shares at $.001 par
              value, issued and outstanding 41,035,754 shares            39,543
         Additional paid in capital                                  14,013,934
         Shares to be issued                                             14,750
         Accumulated deficit                                        (16,935,158)
                                                                   -------------
             Total Stockholders' Deficit                             (2,866,931)
                                                                   -------------

TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT                        $    101,397
                                                                   =============

                                       2
<PAGE>

<TABLE>
                                                        FLEXXTECH CORPORATION
                                                CONSOLIDATED STATEMENTS OF OPERATIONS
                                                             (UNAUDITED)
<CAPTION>

                                                                      THREE MONTHS ENDED                  NINE MONTHS ENDED
                                                                         SEPTEMBER 30,                       SEPTEMBER 30,
                                                                    2002              2001               2002             2001
                                                                                    (RESTATED)                         (RESTATED)
                                                                -------------     -------------     -------------     -------------
<S>                                                             <C>               <C>               <C>               <C>
Net revenue                                                     $         --      $         --      $         --      $         --
Cost of revenue                                                           --                --                --                --
                                                                -------------     -------------     -------------     -------------
            GROSS PROFIT/(LOSS)                                           --                --                --                --

General and Administrative expenses                                  253,164         6,516,486         1,110,984         6,964,800

                                                                -------------     -------------     -------------     -------------
            LOSS FROM OPERATIONS                                    (253,164)       (6,516,486)       (1,110,984)       (6,964,800)

Other income (expenses)
    Realized loss on sale of marketable securities                        --           (23,750)               --           (75,708)
    Litigation settlement                                                 --                --           (41,743)               --
    Gain on settlement of note receivable                            192,314                --           192,314                --
    Other income                                                          --               612                --             9,551
    Interest expense                                                 (86,525)          (80,017)         (240,533)         (102,152)
                                                                -------------     -------------     -------------     -------------
          Total other income (expenses)                              105,789          (103,155)          (89,962)         (168,309)

                                                                -------------     -------------     -------------     -------------
LOSS FROM CONTINUING OPERATIONS BEFORE
  INCOME TAXES & EXTRAORDINARY ITEM                                 (147,375)       (6,619,641)       (1,200,946)       (7,133,109)

Provision of Income tax                                                   --               800             1,600             4,800

                                                                -------------     -------------     -------------     -------------
LOSS FROM CONTINUING OPERATIONS BEFORE
    EXTRAORDINARY ITEM                                              (147,375)       (6,620,441)       (1,202,546)       (7,137,909)

DISCONTINUED OPERATIONS:
  Loss from operations of  discontinued subsidiary
    (Less applicable income taxes of $800)                           (95,711)         (754,848)       (1,502,172)       (1,122,157)
  Gain (loss) from disposal of subsidiary                            327,012        (1,318,071)          327,012        (1,318,071)
                                                                -------------     -------------     -------------     -------------
                                                                     231,301        (2,072,919)       (1,175,160)        (2,440,228)

NET LOSS BEFORE EXTRAORDINARY ITEM                                    83,926        (8,693,360)       (2,377,706)       (9,578,137)

EXTRAORDINARY ITEM - LOSS ON SETTLEMENT
    OF DEBTS                                                        (150,000)         (820,000)         (322,443)         (820,000)
                                                                -------------     -------------     -------------     -------------

NET LOSS                                                             (66,074)       (9,513,360)       (2,700,149)      (10,398,137)

OTHER COMPREHENSIVE LOSS:
    Unrealized loss on investments available for sale                     --           (21,130)               --          (169,130)
                                                                -------------     -------------     -------------     -------------

COMPREHENSIVE LOSS                                              $    (66,074)     $ (9,534,490)     $ (2,700,149)     $(10,567,267)
                                                                =============     =============     =============     =============


Basic and diluted loss per share from continuing operations     $      (0.00)     $      (0.49)     $      (0.05)     $      (0.60)
                                                                -------------     -------------     -------------     -------------

Basic and diluted loss per share from discontinued operations           0.01             (0.16)            (0.04)            (0.21)
                                                                -------------     -------------     -------------     -------------

Basic and diluted loss per share from extraordinary items              (0.01)            (0.06)            (0.01)            (0.07)
                                                                -------------     -------------     -------------     -------------

                                                                -------------     -------------     -------------     -------------
Basic and diluted loss per share                                       (0.00)            (0.71)            (0.10)            (0.88)
                                                                =============     =============     =============     =============


                                                                -------------     -------------     -------------     -------------
Basic and diluted weighted average shares outstanding              3,327,646        13,320,116        26,632,300        11,872,125
                                                                =============     =============     =============     =============

                                                                 3
</TABLE>
<PAGE>

<TABLE>
                                       FLEXXTECH CORPORATION
                               CONSOLIDATED STATEMENTS OF CASH FLOWS
                    FOR THE NINE MONTH PERIODS ENDED SEPTEMBER 30, 2002 AND 2001
                                            (UNAUDITED)
<CAPTION>

                                                                         2002              2001
                                                                                        (RESTATED)
                                                                    -------------     -------------
<S>                                                                 <C>               <C>
CASH FLOWS FROM OPERATING ACTIVITIES

Net Loss                                                            $ (2,700,149)     $(10,398,137)
Adjustments to reconcile net loss to cash used in
operating activities
      Depreciation and amortization                                      154,979           265,437
      Amortization of goodwill                                                --            71,989
      Issuance of stocks for consulting services & compensation          826,591         6,438,855
      Issuance of marketable securities for consulting services           15,000                --
      Loss on sale of marketable securities                                   --            75,708
      Loss on settlement of debt                                         322,443           820,000
      Gain on settlement of note receivable                             (192,314)               --
      Disposal of subsidiaries                                          (327,012)        1,318,071
      (Increase) / decrease in current assets
           Accounts receivable                                          (120,233)          445,173
           Insurance receivable                                               --           247,490
           Inventory                                                    (173,818)          103,726
           Prepaid expense                                               (17,871)         (130,838)
           Deposits & other current assets                                     6            10,544
      Increase /(decrease) in current liabilities
           Accounts payable                                             (748,008)          136,460
           Accrued expenses                                               12,151           225,892
           Customers' deposit and other current liabilities                   --            12,865
                                                                    -------------     -------------
           NET CASH USED IN OPERATING ACTIVITIES                      (2,948,235)         (356,765)
                                                                    -------------     -------------

CASH FLOWS FROM INVESTING ACTIVITIES
           Sale of marketable securities                                      --            98,443
           Cash balance with disposed subsidiary                         (26,335)               --
           Acquisition of property & equipment                                --           (78,278)
                                                                    -------------     -------------
           NET CASH PROVIDED BY INVESTING ACTIVITIES                     (26,335)           20,165
                                                                    -------------     -------------

CASH FLOWS FROM FINANCING ACTIVITIES
          Proceeds from sales of common stock                            825,879           170,136
          Proceeds from shares to be issued                                   --            42,700
         (Payments) repayment of notes receivable                       (110,300)           13,880
          Proceeds from borrowings                                     2,671,564         1,168,168
          Payments of loans                                             (777,082)       (1,404,457)
                                                                    -------------     -------------
          NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES          2,610,061            (9,573)
                                                                    -------------     -------------

NET DECREASE IN CASH AND CASH EQUIVALENTS                               (364,509)         (346,173)

CASH AND CASH EQUIVALENTS -BEGINNING                                     370,784           519,865
                                                                    -------------     -------------

CASH AND CASH EQUIVALENTS -ENDING                                   $      6,275      $    173,692
                                                                    =============     =============

                                                 4
</TABLE>
<PAGE>

                              FLEXXTECH CORPORATION
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

         1.       BASIS OF PREPARATION:

         The accompanying unaudited condensed interim financial statements have
         been prepared in accordance with the rules and regulations of the
         Securities and Exchange Commission for the presentation of interim
         financial information, but do not include all the information and
         footnotes required by generally accepted accounting principles for
         complete financial statements. The audited financial statements for the
         two years ended December 31, 2001 and 2000 was filed on April 16, 2002
         with the Securities and Exchange Commission and is hereby referenced.
         In the opinion of management, all adjustments considered necessary for
         a fair presentation have been included. Operating results for the
         three-month and nine-month periods ended September 30, 2002 are not
         necessarily indicative of the results that may be expected for the year
         ended December 31, 2002.

         BASIC AND DILUTED NET LOSS PER SHARE

         Net loss per share is calculated in accordance with the Statement of
         financial accounting standards No. 128 (SFAS No. 128), "Earnings per
         share". SFAS No. 128 superseded Accounting Principles Board Opinion
         No.15 (APB 15). Net loss per share for all periods presented has been
         restated to reflect the adoption of SFAS No. 128. Basic net loss per
         share is based upon the weighted average number of common shares
         outstanding. Diluted net loss per share is based on the assumption that
         all dilutive convertible shares and stock options were converted or
         exercised. Dilution is computed by applying the treasury stock method.
         Under this method, options and warrants are assumed to be exercised at
         the beginning of the period (or at the time of issuance, if later), and
         as if funds obtained thereby were used to purchase common stock at the
         average market price during the period.

         ISSUANCE OF SHARES FOR SERVICE

         The Company accounts for the issuance of equity instruments to acquire
         goods and services based on the fair value of the goods and services or
         the fair value of the equity instrument at the time of issuance,
         whichever is more reliably measurable.

         RECLASSIFICATIONS

         For comparative purposes, prior years' consolidated financial
         statements have been reclassified to conform with report
         classifications of the current year.

         2.     RECENT PRONOUCEMENTS

         In June 2001, the Financial Accounting Standards Board ("FASB") issued
         Statement of Financial Accounting Standards ("SFAS") No. 143,
         "Accounting for Asset Retirement Obligations". SFAS 143 addresses
         financial accounting and reporting for obligations associated with the
         retirement of tangible long-lived assets and the associated asset
         retirement costs. This Statement is effective for financial statements
         issued for fiscal years beginning after June 15, 2002.

                                        5
<PAGE>

         SFAS No. 144, "Accounting for the Impairment or Disposal of Long-Lived
         Assets," was issued in August 2001. SFAS No. 144 is effective for
         fiscal years beginning after December 15, 2001, and addresses financial
         accounting and reporting for the impairment or disposal of long-lived
         assets. This statement supersedes SFAS No. 121 "Accounting for the
         Impairment of Long-Lived Assets and for Long-Lived Assets to Be
         Disposed Of," and the accounting and reporting provisions of APB
         Opinion No. 30, "Reporting the Results of Operations - Reporting the
         Effects of Disposal of a Segment of a Business, and Extraordinary,
         Unusual and Infrequently Occurring Events and Transactions," for the
         disposal of a segment of a business.

         In May 2002, the Board issued SFAS No. 145, Rescission of FASB
         Statements No. 4, 44, and 64, Amendment of FASB Statement No. 13, and
         Technical Corrections ("SFAS 145"). SFAS 145 rescinds the automatic
         treatment of gains or losses from extinguishments of debt as
         extraordinary unless they meet the criteria for extraordinary items as
         outlined in APB Opinion No. 30, Reporting the Results of Operations,
         Reporting the Effects of Disposal of a Segment of a Business, and
         Extraordinary, Unusual and Infrequently Occurring Events and
         Transactions. SFAS 145 also requires sale-leaseback accounting for
         certain lease modifications that have economic effects that are similar
         to sale-leaseback transactions and makes various technical corrections
         to existing pronouncements. The provisions of SFAS 145 related to the
         rescission of FASB Statement 4 are effective for fiscal years beginning
         after May 15, 2002, with early adoption encouraged. All other
         provisions of SFAS 145 are effective for transactions occurring after
         May 15, 2002, with early adoption encouraged.

         In June 2002, the FASB issued SFAS No. 146 " Accounting for Costs
         Associated with exit or Disposal Activities." This Statement addresses
         financial accounting and reporting for costs associated with exit or
         disposal activities and nullifies Emerging Issues Task Force (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)." This Statement requires that a liability
         for a cost associated with an exit or disposal activity be recognized
         when the liability is incurred. Under Issue 94-3 a liability for an
         exit cost as defined, was recognized at the date of an entity's
         commitment to an exit plan.

         The Company does not anticipate that adoption of above pronouncements
         will have a material effect on our earnings or financial position.

         3.     PRINCIPLES OF CONSOLIDATION:

         The accompanying consolidated financial statements include the accounts
         of Flexxtech Corporation (the "Parent"), and its 100% owned subsidiary,
         Flexxtech Holdings, Inc., collectively referred to as the "Company".
         Flexxtech Holdings, Inc.'s has a 100% owned subsidiary, Primavera
         Corporation, a Texas Corporation. All significant inter-company
         accounts and transactions have been eliminated in consolidation.

                                       6
<PAGE>

         4.      GOING CONCERN

         The accompanying financial statements have been prepared in conformity
         with generally accepted accounting principles which contemplate
         continuation of the Company as a going concern. However, the Company
         has accumulated deficit of $16,935,158 including a net loss of
         $2,700,149 for the period ended September 30, 2002. The continuing
         losses have adversely affected the liquidity of the Company. The
         Company faces continuing significant business risks, including but not
         limited to, its ability to maintain vendor and supplier relationships
         by making timely payments when due.

         In view of the matters described in the preceding paragraph,
         recoverability of a major portion of the recorded asset amounts shown
         in the accompanying balance sheet is dependent upon continued
         operations of the Company, which in turn is dependent upon the
         Company's ability to raise additional capital, obtain financing and to
         succeed in its future operations. The financial statements do not
         include any adjustments relating to the recoverability and
         classification of recorded asset amounts or amounts and classification
         of liabilities that might be necessary should the Company be unable to
         continue as a going concern.

         Management has taken the following steps to revise its operating and
         financial requirements, which it believes are sufficient to provide the
         Company with the ability to continue as a going concern. Management
         devoted considerable effort during the period ended September 30, 2002,
         towards (i) obtaining additional equity financing through various
         private placements (ii) reduction of salaries and general and
         administrative expenses (iii) disposal of some of the non-profitable
         subsidiaries and (iv) evaluation of its distribution and marketing
         methods. In that regard, during the nine-month period ended September
         30, 2002, the Company disposed off a subsidiary in Texas, which was
         incurring losses to the Company.

         5.      INCOME TAXES

         No provision was made for Federal income tax since the Company has
         significant net operating loss carryforwards. Through September 30,
         2002, the Company incurred net operating losses for tax purposes of
         approximately $16,400,000. The net operating loss carryforwards may be
         used to reduce taxable income through the year 2017. Net operating loss
         for carryforwards for the State of California are generally available
         to reduce taxable income through the year 2007. The availability of the
         Company's net operating loss carryforwards are subject to limitation if
         there is a 50% or more positive change in the ownership of the
         Company's stock. The provision for income taxes consists of the state
         minimum tax imposed on corporations.

         Temporary differences which give rise to deferred tax assets and
         liabilities at September 30, 2002 comprised of depreciation and
         amortization and net operating loss carry forward. The gross deferred
         tax asset balance as of September 30, 2002 was approximately
         $6,560,000. A 100% valuation allowance has been established against the
         deferred tax assets, as the utilization of the loss carrytforwards
         cannot reasonably be assured.

                                       7
<PAGE>

         The following is a reconciliation of the provision for income taxes at
         the U.S. federal income tax rate to the income taxes reflected in the
         Consolidated Statements of Operations:

<TABLE>
<CAPTION>
                                                       September 30,   September 30,
                                                           2002            2001
                                                       -------------   -------------
<S>                                                         <C>            <C>
         Tax expense (credit) at statutory rate-federal     (34)%          (34)%
         State tax expense net of federal tax                (6)            (6)
         Permanent differences                                1              1
         Changes in valuation allowance                     (39)           (39)
                                                           ------         ------
         Tax expense at actual rate                          --             --
                                                           ======         ======
</TABLE>

         6.      STOCKHOLDERS' EQUITY

         During the nine month periods ended September 30, 2002 and 2001, the
         Company issued stocks at various times, as described per the following.
         The stocks were valued at the average fair market value of the freely
         trading shares of the Company as quoted on OTCBB on the date of
         issuance.

         STOCK SPLIT

         On December 29, 2000, the Board of Directors of the Company declared a
         13.09322865 to 1 forward stock split of the Company's common stock. The
         stockholders approved an increase in the authorized number of shares of
         common stock from 26 million to 100 million. On April 14, 2000, the
         Company effected a 2-for-1 forward stock split of its common stock. On
         April 29, 2000, the Company effected a reverse stock split of 1:3 and
         on March 26, 2001, the Company effected a 3:2 forward stock split. The
         financial statements have been retroactively restated for the effects
         of stock splits.

         COMMON STOCK:

         On July 9, 2001, the Company reacquired 750,000 shares of common stock
         issued to a related party, related through common shareholder, in
         exchange of various notes receivable. The notes were receivable from a
         Corporation totaling $1,250,000. The notes, carried interest ranging
         from 8% to 12% per year, were secured and due on demand. The company
         returned the notes to the related party.

         The Company exchanged a note receivable from a related party for
         450,000 shares of the Company's common stock valued at $80,000,
         resulting in an extraordinary loss of $820,000.

         During six-month period ending June 30, 2001, the Company issued
         135,907 shares of common stock for cash amounting $132,716, 156,820
         shares for services amounting $ 153,683 and 20,000 shares for
         compensation amounting $ 19,600.

                                       8
<PAGE>

         During the quarter ended September 30, 2001, the Company issued 40,996
         shares of common stock for cash amounting $37,420, 455,574 shares for
         services amounting $ 414,572 and 6,429,333 shares for consulting
         services to a related party for $ 5,851,000.

         During the period ended September 30, 2001, the Company cancelled
         1,535,000 shares of common stock it has in its treasury.

         During the first quarter ended March 31, 2002, the Company sold
         2,135,749 shares for cash in the amount of $343,358. Through September
         30, 2002, the Company has received subscription of $14,750 for 31,000
         shares of common stock to be issued. The Company issued 226,670 shares
         of common stock for consulting services amounting $113,000 to related
         parties. The Company issued 210,000 shares of common stock for
         compensation amounting $92,400.The Company issued 850,000 shares of
         common stock to a related party, related by common major shareholders,
         as a collateral against a debt of $283,700. The Company has not
         recorded any value for such shares since the shares are issued as
         collateral and are returnable.

         During the second quarter ended June 30, 2002, the Company sold
         3,675,215 shares for cash in the amount of $480,833. The Company issued
         2,082,654 shares of common stock for consulting services amounting
         $479,644. The Company also settled debts amounting $259,200 by issuing
         1,216,284 shares of common stock valued at $431,644, thereby recording
         an extraordinary loss on settlement of $172,443. Included in debt
         settled was an amount due to a related party of $200,000. Included in
         the settled debt were convertible debt amounting 59,200.

         During the quarter ended September 30, 2002, the Company issued
         1,875,000 shares for finders fee related to sale of common stock. The
         shares issued for finders' fees were valued at $93,750. The finders'
         fees were adjusted from the cash value of shares issued in the equity
         section in the financial statements. Included in those shares were
         1,500,000 shares valued at $75,000 to a Company owned by a major
         shareholder of the Company. The Company issued 2,000,000 shares valued
         at $100,000 to an investor for price difference adjustment. Price
         difference adjustment is excess amount received from investor on sale
         of common stock over the market price. The Company issued 35,000 shares
         for consulting services amounting $$3,233. The Company issued 1,500,000
         shares to the president of the Company for as compensation amounting
         $138,596. The Company issued 2,015,200 shares of common stock valued on
         conversion of debentures amounting $140,527. There was no gain or loss
         on conversion since the Company had booked the difference on conversion
         feature at the time of issuance of debentures. The Company also settled
         a debt of $100,000 payable to a Company owned by the majority
         shareholder of the Company, by issuing 5,000,000 shares valued at
         $250,000 resulting in an extraordinary loss of $150,000 on settlement
         of the debt. During the three month period ended September 30, 2002,
         the Company sold 344,120 shares of common stock for cash in the amount
         of $17,088. The Company issued marketable securities, 1,500,000 shares
         of a publicly traded Company valued at $225,000 in price settlement to
         an investor (note 10). The price settlement amount has been adjusted
         from the additional paid in capital.

                                       9
<PAGE>

         CONVERTIBLE DEBENTURES:

         In the year ended December 31, 2001, the company issued debentures
         amounting $720,000, carrying an interest rate of 6% per annum, due in
         August 2003. The holders are entitled to, at any time or from time to
         time, convert the conversion amount into shares of common stock of the
         Company, par value $.001 per share at a conversion price for each share
         of common stock equal to the lower of (a) 120% of the losing bid price
         per share (as reported by Bloomberg, LP) on the closing date, and (b)
         80% of the lowest closing bid price per share (as reported by
         Bloomberg, LP) of the Company's common stock for the five trading days
         immediately preceding the date of conversion. During the three month
         period ended September 30, 2002, the Company issued 2,015,200 shares of
         common stock in conversion of debentures amounting $140,527.

         The Company recorded, in accordance with EITF 00-27 and 98-5, a
         beneficial conversion feature on the issuance of the convertible
         debentures amounting $55,000 in the period ended September 30, 2001,
         reflected in the interest expense in the financial statement. The
         Company recorded, a beneficial conversion feature on the issuance of
         the convertible debentures amounting $125,000 in the three-month period
         ended December 31, 2001. The beneficial conversion feature represents
         the difference between the fair value of the shares and the discounted
         conversion price multiplied by the number of shares.

         CONVERTIBLE PROMISSORY NOTES PAYABLE

         In the year ended December 31, 2001, the Company issued convertible
         promissory notes of $59,200 due on March 1, 2004 and $100,000 due on
         April 1, 2004, carrying an interest rate of 10% per annum. The note of
         $59,200 was settled by issuance of 216,284 shares of common stock. The
         holder of $100,000 promissory notes is entitled to convert the
         conversion amount into shares of common stock of the Company, par value
         $.001, at any time, per share at a conversion price for each share of
         common stock equal $7.00 per share of common stock. The note is secured
         and collateralized by shares of common stock of the Company at one
         share per every five dollars ($5.00) of the principal.

         STOCK OPTION PLAN

         The Company has adopted a Stock option plan for the granting of options
         to employees, consultants and other providers of goods and services to
         the Company. The Company has set aside 1,000,000 shares of common stock
         under the plan. No option has been granted under the plan through
         September 30, 2002.

         7.      LITIGATION

         In April 2001, a suit was brought against the Company and certain
         officers and directors for alleged breach of contract. The Company has
         denied all the claims and believes it is a frivolous suit. The Company
         settled the litigation by agreeing to pay the plaintiffs a sum of
         $8,000, 82,500 shares of restricted common stock and 90,000 options to
         purchase common stock of the Company at $1.66 per share, with an
         expiration date of January 1, 2004. Management does not believe
         implication of this litigation will have any other material impact on
         the Company's financial statements.

                                       10
<PAGE>

         In June 2002, a suit was brought against the Company for alleged breach
         of contract. The suit was brought by a Note Holder for the return of
         principal and interest of $100,000 plus 10% interest. The loan was made
         on April 11, 2001. The Company has not responded to the suit and is in
         negotiation with the Note Holder. The Company believes it is a
         frivolous suit. However, should a settlement not be reached, and the
         plaintiff is awarded a judgment, the judgment may have an adverse
         material impact on the Company and its financial statements.

         During day-to-day operations, the Company may be involved in
         litigation, negotiation and settlement matters that may occur in the
         day-to-day operations of the Company and its subsidiary. Management
         does not believe implication of these litigations will have any other
         material impact on the Company's financial statements.

         8.       SUPPLEMENTAL DISCLOSURE OF CASH FLOWS

         The Company prepares its statements of cash flows using the indirect
         method as defined under the Financial Accounting Standard No. 95.

         The Company paid income taxes of $-0- and interest of $26,500 during
         the nine month period ended September 30, 2002. The Company paid income
         taxes of $-0- and interest of $74,088 during the nine month period
         ended September 30, 2001.

         The statement of cash flows does not include effect of non-cash
         transaction of issuance of shares (note 6) for consulting services and
         compensation.

         The statement of cash flows does not include effect of disposal of
         subsidiary (note 11).

         9.       DISPOSAL OF SUBSIDIARY

         DISPOSAL IN THE PERIOD ENDED SEPTEMBER 30, 2002:

         On August 20, 2002, the Company sold North Texas Circuit Board. North
         Texas Circuit Board (NTCB), a Texas Company which was 100% owned by
         Primavera, a 100% owned subsidiary of Flexxtech Holdings, Inc. The
         Company owns 100% ownership of Flexxtech Holdings, Inc. NTCB
         manufactures printed circuit boards. Per the Share-purchase agreement
         between the Company and the purchaser (P), the following facts are
         related to the transaction:

         NTCB executed certain promissory notes payable to a bank in Texas. The
         notes were secured by the assets and 100% of the outstanding shares of
         NTCB. In June 2002, the Company signed an agreement with a non-related
         party to borrow money on various promissory notes, payable in sixty
         days after the signing of the notes and bearing an interest rate of 7%
         per annum. The Notes were secured by the properties of NTCB. Total
         outstanding amount on such promissory notes amounted to $576,000 at
         June 30, 2002. Subsequent to June 30, 2002, NTCB borrowed additional
         amount on promissory notes amounting $1,122,188. In July 2002, "P"
         purchased all the right, title and interest of bank in the bank notes
         amounting $557,672. "P" also acquired security interest held by bank as
         collateral. At the date of the agreement, total sum of $2,255,860 was

                                       11
<PAGE>

         owed to "P" by NTCB. Since NTCB was in default in the payments of its
         obligations, "P" exercised its option under the notes and the security
         agreements. At the Closing of the transaction, Primavera sold all of
         the duly issued fully paid capital stock of NTCB in consideration of
         the amount equal to outstanding debt to "P". It was also, agreed
         between the parties that "P" will pay 10% of the after tax profit of
         NTCB to the Company for a period of five years subsequent to the
         consummation of the transaction. As further consideration to "P", the
         Company and its subsidiaries released "P" from all debts and
         obligations otherwise owed by NTCB to the Company. The disposal of NTCB
         resulted in a net gain of $327,012 to the Company as follows:


             Value of the NTCB at disposal:                   (in 000)
                                                              --------
             Assets                                            $2,806
             Liabilities                                        3,133
             Consideration received                                --
                                                               -------
             Gain on disposal                                  $  327
                                                               =======

         Following is the results of the NTCB operations included in the loss
         from discontinued operations for all periods presented:

                                                       PERID ENDED
                                                      SEPTEMBER 30,
                                                    2002         2001
                                                  --------     --------
                                                  (Dollars in thousands)

         Revenue                                  $ 2,358      $ 4,814
         Expenses:
           Costs of revenue                         2,652        4,674
           Operating expenses                       1,208        1,242
                                                  --------     --------
         Total expenses                             3,860        5,916
                                                  --------     --------
         Loss from discontinued operations        $(1,502)     $(1,102)
                                                  ========     ========

         DISPOSAL IN THE PERIOD ENDED SEPTEMBER 30, 2001:

         On July 1st, 2001, the Company sold two of its subsidiaries to its
         previous owners. Mardock, Inc. in exchange for 200,000 shares of its
         common stock and OpiTV.com for 110,000 shares of its common stock
         (including return of 60,000 shares by an officer of OpiTV). Mardock,
         Inc. was established in 1986 and was a designer, manufacturer, and
         distributor of apparel and promotional products to the corporate
         community. OpiTV.com, a Nevada Corporation, was formed on October 12,
         1999. OpiTV.com was an I-Commerce technology company. Through June 30,
         2001, OpiTV.com has not generated any revenue. The valuation of the
         310,000 at $62,000 was based upon estimated fair value of the shares.

                                       12
<PAGE>

         The Company also, disposed off its subsidiary, Flexx Capital Partners
         (FCP). FCP, a Nevada Corporation, was formed on December 1, 2000. FCP
         did not have any operations during the years ended December 31, 2001
         and 2000. The subsidiary was acquired for $5,000 and disposed off for
         zero amounts. The disposal of subsidiaries resulted in net loss of
         $1,318,071. Following is the summary of the transactions ((Dollars in
         thousands):

                                               Mardock     OpiTV       Total
                                               --------   --------   --------
         Investment                            $   600    $   850    $ 1,450
         Value of the Companies at disposal:
         Assets                                    196          2        198
         Liabilities                              (250)       (23)      (273)
         Consideration received                    (40)       (22)       (62)
                                               --------   --------   --------
         Loss on disposal                      $   506    $   807      1,313
                                               ========   ========   ========

         Loss on disposal of Flexx Capital
           Partners                                                        5
                                                                     --------
         Total loss on disposal of
           subsidiaries                                              $ 1,318
                                                                     ========

         Following is the results of the Mardock operations included in the loss
         from discontinued operations for all periods presented:

                                                              PERIOD ENDED
                                                           SEPTEMBER 30, 2001
                                                         (Dollars in thousands)
                                                         ----------------------
         Revenue                                                 $ 274
         Expenses:
            Costs of revenue                                       138
            Operating expenses                                     150
         Total expenses                                            288
                                                                 ------
         Loss from discontinued operations                       $ (14)
                                                                 ======

         Following is the results of the OpiTV included in the loss from
         discontinued operations for all periods presented:

                                                              PERIOD ENDED
                                                           SEPTEMBER 30, 2001
                                                         (Dollars in thousands)
                                                         ----------------------
         Revenue                                                   $--
         Expenses:
            Costs of revenue                                        --
            Operating expenses                                       6
         Total expenses                                              6
                                                                   ----
         Loss from discontinued operations                         $(6)
                                                                   ====

         Flexx Capital Partners did not have any operation since its inception.

                                       13
<PAGE>

         10.    PRIOR PERIOD ADJUSTMENTS

         ADJUSTMENTS AT SEPTEMBER 30, 2001:
         ----------------------------------

         Subsequent to the issuance of the Company's consolidated financial
         statements for the nine-month period ended September 30, 2001, the
         Company determined that certain transactions and presentation in the
         financial statements had not been accounted properly in the Company's
         financial statements. The Company's 2001 financial statements have been
         restated to correct errors as follows:

                  (1) The failure to record the debenture conversion provision
         of $55,000 in the three-month period ended September 30, 2001.

                  (2) Incorrect recording of stock issued for consulting
         services. The Company had issued certain shares during nine-month
         period ending September 30, 2001 and recorded at an anticipated fair
         value. The Company is now adjusting to record such shares at the
         average cash price of shares issued in the period ended September 30,
         2001.

         During the nine-month period September 30, 2001, the Company issued
         7,061,727 shares of common stock for services amounting $ 6,438,855.
         Included in the shares issued for services were 6,429,333 shares issued
         to a related party for services $ 5,851,000.

         The effect of the correction of these errors is as follows:

                                               Year ended September 30, 2001
                                               AS PREVIOUSLY        AS
                                                  REPORTED       RESTATED
                                               -------------   -------------
         STATEMENT OF OPERATIONS:

            Interest expense                   $    261,966    $    316,966
            Consulting expense                 $  2,126,286    $  6,328,718
            Net loss                           $ (6,140,705)   $(10,398,137)
            Basic and diluted loss per share   $      (0.52)   $      (0.88)

         ADJUSTMENTS AT DECEMBER 31, 2001:

         The Company also recorded the debenture conversion provision of
         $125,000 in the three month period ended December 31, 2001.

         The Company had recorded the decline in market value as a temporary
         loss in the statements of Operations for the year ended December 31,
         2001. The Company now believes the decline in market value was other
         than temporary. Accordingly, a loss of $575,500 has been recognized as
         the realized loss in the statement of Operations for the year ended
         December 31, 2001. In deciding the whether the loss was other than
         temporary, the Company considered the length of time and the extent to
         whether the market value has been less than cost, the financial
         condition of the issuer, change in market value of the security
         subsequent to the year end but prior to issuance of the financial
         statements:

                                       14
<PAGE>

         The effect of the correction of errors is as follows:

                                                   Year ended December 31, 2001
                                                   AS PREVIOUSLY        AS
                                                     REPORTED        RESTATED
                                                   -------------   -------------
         STATEMENT OF SHAREHOLDERS' DEFICIT

           Accumulated deficit:                    $ (9,277,077)   $(14,235,009)
           Additional paid-in capital              $  7,388,776    $ 11,771,208


         STATEMENT OF OPERATIONS:
           Interest expense                        $    261,966    $    441,966
           Consulting expense                      $  2,126,286    $  6,328,718
           Realized loss on marketable securities  $         --    $    575,500
           Net loss                                $ (7,434,926)   $(12,392,858)
           Basic and diluted loss per share        $      (0.56)   $      (0.93)

         10.      MARKETABLE SECURITES - AVAILABLE FOR SALE AND GAIN ON
                  SETTLEMENT OF NOTE RECEIVABLE

         In August 2002, the Company settled a note receivable of $129,300 in
         exchange of 1,461,880 common stock of Sonic Jet Performance Inc
         (Sonic), a publicly traded company, 730,940 Class A and B warrants
         exercisable at $.01 per common share of Sonic. The shares and warrants
         of Sonic were valued $328,923 based upon the average fair market value
         of the freely trading shares of the Company as quoted on OTCBB on the
         date of issuance. The transaction resulted in a gain to the Company of
         $192,314, recorded as gain on settlement of note receivable in the
         financial statements. The Company exercised 730,940 Class A warrants on
         the same day and transferred 1,500,000 shares of Sonic valued at
         $225,000 to an investor for price difference adjustment. The Company
         also issued 100,000 shares of sonic valued at $15,000 to a consultant
         for consulting services rendered during the period ended September 30,
         2002. As of September 30, 2002, the Company owns 592,820 shares of
         Sonic valued at $88,923. There was no significant change in fair value
         of the shares on September 30, 2002. Following is a summary of
         investment securities classified as available for sale as on September
         30, 2002:
<TABLE>
<CAPTION>
                                                                          Unrealized gain/
                                                Cost Basis    Fair Value      (loss)
                                                ----------    ----------  ----------------
<S>                                              <C>           <C>           <C>
         Marketable equity securities-Common
           stock Acquired in 2002                $ 88,923      $ 88,923      $    --
</TABLE>

                                       15
<PAGE>

11.      SUBSEQUENT EVENTS

         a) On October 7, 2002, 10,272,144 shares of common stock were issued in
         the name of Delaware Charter Guarantee and Trust, FBO Greg Mardock, the
         president of the Company, in exchange for a Promissory Note of $45,500
         principal amount and interest of $5,860.72.

         b) On October 8, 2002, Edward R. Fearon, former President of Primavera
         and Escamilla Capital Corporation, a related entity, received 1,250,000
         and 1,750,000 shares respectively. These shares were issued in exchange
         for notes issued by Primavera Corporation to BECO M-A, L.P. and BECO
         Joint Venture No. 1 amounting $76,595.

         c) On October 31, 2002, $2,000,000 in debt owed by the Company to
         Western Cottonwood Corporation, a related entity, was agreed to be
         converted to 200 shares of Series A Preferred Stock of the Company.

         d) On November 5, 2002 Western Cottonwood Corp was issued 15,000,000
         shares of common stock in exchange for $75,000 in Promissory Notes.

         e) On October 29, 2001, the Company acquired 80% of the outstanding
         Common Shares of W3M, Inc. (dba "Paradigm Cabling Systems"), a
         privately held California corporation ("Paradigm"), in a stock for
         stock exchange. Pursuant to the terms of the acquisition, 80% of the
         outstanding capital stock of Paradigm was transferred to the Company on
         said date. In exchange, the Company agreed as soon as practical to
         issue 142.5 shares of a new Series A Convertible Preferred Stock of
         Flexxtech Corporation (hereinafter the "Series A Preferred"), to the
         exchanging shareholders of Paradigm.

         Paradigm was incorporated in California in May of 1998, under its
         current corporate name, W3M, Inc. Paradigm is a full service computer
         cabling, networking and telecommunications integrator contractor,
         providing networks from stem to stern in house, for larger, medium and
         smaller industrial, educational and residential complexes.

         The Series A Preferred is to be convertible, in whole or in part at the
         option of the holder, into shares of the Common Stock of the Company.
         Each one share of Series A Preferred is to be convertible into the
         number of shares of the Company's Common Stock obtained by dividing
         $10,000 by 85% of the average of the lowest three intra day bids for
         the Company's Common Stock on the primary exchange or public market in
         what the Company's Common Stock is listed, over the ten trading days
         immediately preceding the conversion date, and multiplying the result
         by 120%. Fractional common shares on conversion are rounded to the
         nearest whole share. The Series A Preferred is to have a liquidation
         preference equal to $15,000 per Series A share, after which each share
         will share on a pro rata basis with the Common Stock, based upon the
         number of shares into which the Series A Preferred would have been
         convertible on the date of liquidation, distribution of assets,
         dissolution or winding up. The Series A Preferred is to also have
         various other anti-dilution protections.

         The Company at its sole discretion, has the option to redeem all or
         part of the Series A Preferred at a redemption price equal to the
         greater of $12,000 per share, or the market value of the Common Stock
         into which the Series A Preferred is convertible on the date of
         redemption.

                                       16
<PAGE>

         Because the Company's Articles of Incorporation do not provide for
         Preferred Stock, before the Series A Preferred can be authorized and
         issued, the shareholders of the Company, by majority in capital
         interest, must adopt amendments to the company's Articles of
         Incorporation. In the event the Company has not obtained the necessary
         shareholder approvals amending its Articles to create the class of
         Series A Preferred Stock, and is unable to issue the required Series A
         Preferred shares and deliver the certificates evidencing said shares to
         the Paradigm exchanging shareholders by the close of business at 5 p.m.
         Pacific Standard Time, on January 31, 2003, then in such event the
         Paradigm exchanging shareholders' entitlement to Series A Preferred
         Shares converts automatically and without further action on their part,
         into a right to immediately receive in lieu of said Series A Preferred
         Stock, that number of shares of the Company's Common Stock to which the
         Paradigm exchanging shareholders would have been entitled had they been
         previously issued the Series A Preferred Stock, and then elected on
         January 31, 2003 to have all of their Series A Preferred Stock
         converted into the Company's Common Stock in accord with the above
         described Series A Preferred conversion provisions.

         As part of the transaction, the Company agreed to use its best efforts
         to arrange in the future for an infusion of $250,000 in additional
         capital, either as debt or equity or some combination of both, to
         Paradigm, in order to increase its working capital.

         In connection with the acquisition of Paradigm, one of the four
         existing vacancies on the Board of Directors of the Company was filled
         by the appointment on September 16, 2002, of the President of Paradigm
         to the Board of Directors of the Company to fill one of the existing
         Board vacancies.

                                       17
<PAGE>

Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations

CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS

This Report on Form 10-QSB contains forward-looking statements, including
(without limitation) statements concerning possible or assumed future results of
operations and those preceded by, followed by or that include the words
"believes," "could," "expects," "anticipates," or similar expressions. For those
statements, we assert the protection of the safe harbor for forward-looking
statements contained in the Private Securities Litigation Reform Act of 1995.
You should understand that various events could cause those results to differ
materially from those expressed in such forward-looking statements: materially
adverse changes in economic conditions in the markets that we and our
subsidiaries serve; competition from others in the markets and industry segments
occupied by us and our subsidiaries; the ability to enter, the timing of entry
and the profitability of entering new markets; greater than expected costs or
difficulties related to the integration of the businesses acquired by our
subsidiaries; and other risks and uncertainties as may be detailed from time to
time in our public announcements and SEC filings.

The discussion and financial statements contained herein are for the three
months ended September 30, 2002 and September 30, 2001. The following discussion
regarding the financial statements of the Company should be read in conjunction
with the financial statements of the Company included herewith.

Overview:

Flexxtech Holdings, Inc. is a wholly-owned subsidiary of our Company. At
September 30, 2002, the major holding for Flexxtech was Primavera Corporation,
the parent company of North Texas Circuit Board (NTCB). On August 20, 2002 NTCB
was sold to BC Electonics for the sum of $2,255,859.99, which was the amount due
and owing to BC Electronics by NTCB, such sum being the balance due under the
Notes("Purchaser's Debt"). In addition, Purchaser, as consideration for the
Stock of NTCB, shall pay ten percent (10%) of the after tax profit of NTCB to
Flexxtech, as the designee of Primavera, for a period of five (5) years. The
direct settlement cost and related expenses I settlement of all liabilities of
NTCB existing prior to June 19, 2002 will be treated as a reduction in amounts
due under said Payments and will be deducted from payments. The five year
payment period shall begin January 1, 2003 and shall continue through December
31, 2007. Additional Nature, Amount and Payment of Consideration can be viewed
in the Share Purchase Agreement, filed on Form 8-K on September 19, 2002 and
amended and filed on Form 8K-A on October 28, 2002.

Subsequent to September 30, 2002, we acquired 80% of W3M, Inc. (dba Paradigm
Cabling Systems), the sole business of the Company as of November 1, 2002,
became the business carried on by its 80%-owned subsidiary, Paradigm.

Paradigm was incorporated in California in May of 1998, under its current
corporate name, W3M, Inc. It is a full service computer cabling, networking and
telecommunications integrator contractor, providing networks from stem to stern
in house, for larger, medium and smaller industrial, educational and residential
complexes. During the 9-1/2 months through October 14, 2002, Paradigm booked in
excess of $1,000,000 in sales of products and services.

                                       18
<PAGE>

We continue to raise money for our operations and those of Paradigm. Funds are
being raised on private placements pursuant to Regulation D, Rule 506, as
amended and Regulation S, as amended.

While there is no assurance that we will be successful in raising additional
capital, we are actively seeking private equity financing to assure that we will
be capable of financing the continuation of our business. Any additional capital
raised above and beyond what we need as our monthly expenditure would be used in
increasing marketing and sales efforts and future investments and acquisitions.
Should we fail to raise additional funding, we will be forced to curtail our
growth, both through internal development and through investments and
acquisitions. As only a holding company to date, we do not generate our own
revenues, but we rely on additional financing to pay our operating expenses.

THREE MONTHS AND NINE MONTHS ENDED SEPTEMBER 30, 2002 AS COMPARED TO THREE
MONTHS AND NINE MONTHS ENDED SEPTEMBER 30, 2001

Results of Operations
---------------------

We have generated consolidated revenues of $0 for the three months ended
September 30, 2002 as compared to $0 for the three months ended September 30,
2001. We have generated consolidated revenues of $0 for the nine months ended
September 30, 2002 as compared to $0 for the nine months ended September 30,
2001. The revenue was netted out when we disposed of our subsidiary, North Texas
Circuit Board Co., on August 20, 2002, the only revenue generating business of
the Company. Currently, our cash needs include, but are at no means limited to,
rent, salaries and wages, cash raising expenses and to fund operation of our
subsidiary and subsequent acquisition, Paradigm Cabling Systems. All of our
revenues moving forward will be attributed from the our newly acquired
subsidiary, Paradigm Cabling Systems, Inc. If we are unable to continue to raise
additional funds in the immediate future to fund Paradigm Cabling Systems, Inc.,
it will have an adverse effect on our sales and earnings.

Net Revenues
------------

We had net revenues of $0 for the quarter ended September 30, 2002 as compared
to $0 for the quarter ended September 30, 2001.Are net revenues for nine months
ended September 30, 2002 were $0 as compared to $0 for the nine months ended
September 30, 2001. Our revenues were netted out to $0 based on our sale and
disposal of our subsidiary North Texas Circuit Board Co. during the quarter.

Cost of Revenue
---------------

We incurred Cost of Revenue of $0 for the quarter ended September 30, 2002 as
compared to $0 for the quarter ended September 30, 2001. We incurred Cost of
Revenue of $0 for the nine months ended September 30, 2002 as compared to $ 0
for the nine months ended September 30, 2001. Our Cost of Revenue were a result
of our sale and disposal of North Texas Circuit Boards Co. during the quarter.

                                       19
<PAGE>

General, Administrative and Selling Expenses
--------------------------------------------

         We incurred costs of $253,164 for the quarter ended September 30, 2002
as compared to $6,516,486 for the quarter ended September 30, 2001. We incurred
costs of $1,110,984 for the nine months ended September 30, 2002 as compared to
$6,964,800 for the nine months ended September 30, 2001. Our costs decreased
substantially as a result of the sale of North Texas Circuit Board during the
quarter and the restated adjustments from the prior periods.

Net loss before income taxes and loss on discontinued segments
--------------------------------------------------------------

We had a loss before taxes and discontinued segments of $147,375 for the quarter
ended September 30, 2002 as compared to a loss of $6,619,641 for the quarter
ended September 30, 2001. We had a loss before taxes and discontinued segments
of $1,200,946 for the nine months ended September 30, 2002 as compared to a loss
of $7,133,109 for the nine months ended September 30, 2001. Much of the loss
came from the issuance of common stock for services, the sale of North Texas
Circuit Board Co. and the adjustments made in the financial statement for prior
periods.

Net loss
--------

We had a net loss of $66,074 for the quarter ended September 30, 2002 as
compared to a net loss of $9,513,360 for the quarter ended September 30, 2001.
We had a net loss of $2,700,149 for the nine months ended September 30, 2002 as
compared to a loss of $10,398,137 for the nine months ended September 30, 2001.
As a result of our sale of North Texas Circuit Board Co. our Net Loss for the
quarter and nine months was considerably lower.

Comprehensive Loss
------------------

We had a Comprehensive Loss of $66,074 for the quarter-end September 30, 2002 as
compared to a Comprehensive Loss of $9,534,490 for the quarter-end September 30,
2001. We had a Comprehensive Loss of $2,700,149 for the nine months ended
September 30, 2002 as compared to a Comprehensive Loss of $10,567,267 for the
nine months ended September 30, 2001.

Basic and diluted loss per share
--------------------------------

Our basic and diluted loss per share for the three month period ended September
30, 2002 was $0.00 as compared to $.71 for the three month period ended
September 30, 2001. Our basic and diluted loss per share for the nine month
period ended September 30, 2002 was $.10 as compared to $.88 for the nine month
period ended September 30, 2001. Our Basis and diluted loss per share was
significantly lower for the quarter and nine months based on the sale of North
Texas Circuit Board Co. and the increase in shares outstanding.

                                       20
<PAGE>

Litigation
----------

In April 2001, a suit was brought against the Company and certain officers and
directors for alleged breach of contract. The Company has denied all the claims
and believes it is a frivolous suit. The management of the Company plans to
rigorously defend the Company. Management does not believe implication of this
litigation will have any material impact on the Company's financial statements.
In 2002, the Company settled the litigation by agreeing to pay the plaintiffs a
sum of $8,000, 82,500 shares of restricted common stock and 90,000 options to
purchase common stock of the Company at $1.66 per share, with an expiration date
of January 1, 2004.

In June 2002, a suit was brought against the Company for alleged breach of
contract. The suit was brought by a Note Holder for the return of principal and
interest of $100,000 plus 10% interest. The loan was made on April 11, 2001. The
Company has not responded to the suit and is in negotiation with the Note
Holder. The Company believes it is a frivolous suit. However, should a
settlement not be reached, and the plaintiff is awarded a judgment, the judgment
may have an adverse material impact on the Company and its financial statements.

During day-to-day operations, the Company may be involved in litigation,
negotiation and settlement matters that may occur in the day to day operations
of the Company and its subsidiary.

Convertible Debenture
---------------------

During the negotiation and sale of North Texas Circuit Board Co., BC
Electronics, purchased for $102,000 the Giga 8800 Automatic CNC Drilling Machine
that was originally funded by a $240,000 Convertible Debenture The secured
parties Dutchess Private Equities Fund, L.P. received $25,500 and David Wykoff
received $76,500. This totals a payment of $102,000 on a $240,000 Debenture.
$138,000 remains as principle plus interest and liquidated damage.

Conversion of Note Receivable
-----------------------------

On September 4, 2002, pursuant to an Agreement to Convert Promissory Notes dated
July 3, 2002, the Company converted $146,188 of principal and interest into
29,238 Units at $5.00 per Unit in Sonic Jet Performance. The Company received
1,461,880 shares of common stock, 730,940 Class A Warrants, and 730,940 Class B
Warrants. The Class B Warrants were exercised at $.01 per shares, with a note
due to Sonic Jet of $7,309.40 on December 31, 2002. The Class A Warrants are
exercisable at $.20 per share and were received on November 14, 2002. The Total
Sonic Jet shares received were 2,192,820 and were distributed as follows:
1,500,000 to Temple Securities to readjust and settle a purchase of Flexxtech
Common stock from the 2nd quarter of 2002 and as a Settlement and Release.
100,000 shares to Corporate Developers, Inc. for consulting services and 592,820
to Flexxtech Corporation.

                                       21
<PAGE>

Change in Securities
--------------------

We have sold shares of common stock of the Company periodically pursuant to
Regulation D, Rule 506, as amended, and Regulation S, as amended. In the three
months ended September 30, 2002, pursuant to Regulation D, we sold 100,000
shares at $.025 per share for proceeds of $2,500. We sold 50,000 shares at $0.02
for a net amount of $1,000.

Pursuant to Regulation D, in exchange for Public Relations, compensation and
consulting services, the Company issued 250,000 shares at $0.14, 135,000 shares
at $0.12, and 3,000,000 shares at $0.09. No cash was received for these shares.
2,015,209 shares were issued for conversion of notes held by various 6%
Convertible Debenture holders whereas May Davis was the selling agent, totaling
a sum of $127,600. 5,000,000 shares were issued to Western Cottonwood
Corporation as payment for a Demand Note for $100,000.

In the three months ended September 30, 2002, pursuant to Regulation S, we sold
194,120 shares at 0.07 cents per share for proceeds of $13,879.24. Pursuant to
Regulation S, we issued 2,000,000 shares to Temple Securities, to readjust and
settle the purchase price for shares purchased in the second quarter of 2002. In
addition, Temple Securities received 1,500,000 shares of Common Stock of Sonic
Jet Performance as part of a Settlement and Release Agreement

In the three months ended September 30, 2002, we sold a total of 150,000 shares
pursuant to the exemptions afforded by Regulation D resulting in gross proceeds
of $3,500. In the three months ended September 30, 2002, we sold a total of
194,120 shares pursuant to the provisions of Regulation S resulting in gross
proceeds of $13,879.24.

We utilized the services of finders in placing the Offering. We did not utilize
the services of brokers or underwriters. The Offering was self-underwritten. The
Offering expenses were approximately $2,606.89 or 15%of the gross Offering
proceeds. The balance of the Offering expenses were related to general sales
expenses, including, but not limited to, due diligence, accounting and legal
expenses.

SHARES ISSUED FOR FEES/COMPENSATION
-----------------------------------
REGULATION D
Max Capital Holdings, Inc.          250,000  Fees
Elfranco Hoogenhout                  10,000  Goodwill
Max Capital Holdings, Inc.          125,000  Fees
Atlantis Partners, Inc.           1,500,000  Fees
Greg Mardock                      1,500,000  Compensation

                                       22
<PAGE>

SHARES ISSUED AS PAYMENT ON A DEMAND NOTE
-----------------------------------------
Western Cottonwood Corporation    5,000,000  Payment on Demand note of $100,000


SHARES ISSUED FOR THE CONVERSION OF DEBT OF $127,600 PURSUANT TO 6% CONVERTIBLE
-------------------------------------------------------------------------------
DEBENTURE OFFERING.
-------------------
REGULATION D
Robert Duch                            165,625    $10,600.00
Andrew Geiss                           165,625    $10,600.00
Neil Jones                             165,625    $10,600.00
Bonney Goldstein Revocable Trust       165,625    $10,600.00
Frank Demato                           176,666    $10,600.00
John & Diana McNeish                   165,625    $10,600.00
Terry & Carol Connor                   281,250    $18,000.00
Daniel Grillo                          281,250    $18,000.00
Howard & Elaine Bull                   281,250    $18,000.00
John R. Williams                        41,667    $ 2,500.00
Koenraad Trust                          41,667    $ 2,500.00
Steven R. LeMott                        41,667    $ 2,500.00
Carl B. Ziegler                         41,667    $ 2,500.00

SHARES ISSUED AS ADJUSTMENT AND SETTLEMENT TO 2ND QUARTER PURCHASE.
-------------------------------------------------------------------
REGULATION S
Temple Securities             2,000,000    Cash purchase

Shares were issued by Pacific Stock Transfer as a readjustment to reflect the
stock split.

REGULATION D
Azad Capital                     25,000    Adjustment from Stock Transfer Agent

We continue to offer the Shares to persons who are "accredited investors," as
defined under Rule 506 of Regulation D of the Securities Act of 1933 as amended
(the "Act"). An additional thirty-five (35) non-accredited investors may
participate in the Offering. Accredited investors must have a net worth or joint
net worth with their spouse of $1,000,000.00 or more, or have individual income
in excess of $200,000.00 (or $300,000.00 joint income with a spouse) in each of
the two most recent years and who reasonably expects an income of $200,000.00
(or $300,000.00 joint income with a spouse) in the current year.

                                       23
<PAGE>

The Offering is being conducted by us as a self underwriting. Shares in the
Offering are available only through us. We have the option to extend the
Offering indefinitely. We are making the Offering on a best efforts basis. This
means that we have not established any minimum amount of proceeds that must be
generated in the Offering. Accordingly, investors who subscribe for Shares in
the earlier stages of the Offering will assume a substantially greater risk than
investors who subscribe for Shares later in the Offering.

Even if we sell a substantial amount of the Shares covered by the Offering and
raise maximum proceeds, such proceeds may be insufficient to implement our
business plan. There is no guarantee that the funds generated by the Offering
will be sufficient to cover the financial requirements for our growth.

We have arbitrarily set the price of the Shares in the Offering at a discount to
the current trading market. The price of the Shares is based upon the amount of
capital that we desire to raise and the percentage of our outstanding capital
stock that we are willing to sell at this point in our development. We have
established the price of the Shares and the value of our company without an
independent appraisal. The price has no relationship to book value per share,
current earnings or other generally accepted measurements of value. The Offering
may involve immediate and substantial dilution.

Liquidity and Capital Resources
-------------------------------

The Company must continue to raise capital to fulfill its plan. If the Company
is unable to raise any additional capital its operations will be curtailed and
it may have to liquidate its current investments for operating capital. As of
September 30, 2002, the Company had total Current Assets of $97,074 and Current
Liabilities of $2,288,855. Cash and cash equivalents were $6,275. Stockholder's
Deficit was $2,866,931. Subsequent to September 30, 2002, we acquired Paradigm
Cabling Systems, Inc, Management continues to make necessary cost cutting
efforts to reduce the debt and increase productivity of the Company. In its
turn-around effort, management feels additional capital will be needed to
complete a full turnaround. The Company will continue to raise capital for
Paradigm Cabling Systems.

As a result of the sale of North Texas Circuit Board Company, the Company has
reduced its debt substantially. Management continues to negotiate down its
existing debt and converting such debt to equity.

Subsidiaries
------------

Flexxtech Holdings, Inc. is a wholly-owned subsidiary of our Company. At
September 30, 2002, the major holding for Flexxtech was Primavera Corporation,
the parent company of North Texas Circuit Board (NTCB). On August 20, 2002 NTCB
was sold to BC Electonics for the sum of $2,255,859.99, which was the amount due
and owing to BC Electronics by NTCB, such sum being the balance due under the
Notes("Purchaser's Debt"). In addition, Purchaser, as consideration for the
Stock of NTCB, shall pay ten percent (10%) of the after tax profit of NTCB to
Flexxtech, as the designee of Primavera, for a period of five (5) years. The
direct settlement cost and related expenses I settlement of all liabilities of

                                       24
<PAGE>

NTCB existing prior to June 19, 2002 will be treated as a reduction in amounts
due under said Payments and will be deducted from payments. The five year
payment period shall begin January 1, 2003 and shall continue through December
31, 2007. Additional Nature, Amount and Payment of Consideration can be viewed
in the Share Purchase Agreement, filed on Form 8-K on September 19, 2002 and
amended and filed on Form 8K-A on October 28, 2002.

Listed below are the subsidiaries of the Company. Various smaller investments
are not listed because they represent in total less than five percent (5%) of
the total portfolio assets and management may change them from time to time.

PRIMAVERA CORPORATION
---------------------

Our wholly-owned subsidiary, Primavera Corporation, sold 100% of the shares of
its wholly-owned subsidiary, North Texas Circuit Board Company (NTCB) of Grand
Prairie, Texas, to BC Electronics, Incorporated. All closing documents were
completed and the transaction was consummated on September 13, 2002. Details on
the transaction, including agreements, and reasons for sale of NTCB, were filed
on Form 8-K on September 19, 2002 and amended and filed on Form 8-K/A on October
28, 2002.

PARADIGM CABLING SYSTEMS, INC.
------------------------------

Subsequent to September 30, 2002, we acquired 80% of the outstanding Common
shares of W3M, Inc. (dba "Paradigm Cabling Systems"), a privately held
California corporation ("Paradigm"), in a stock for stock exchange. Pursuant to
the terms of the acquisition, 80% of the outstanding capital stock of Paradigm
was transferred to the Company on said date. Additional information on this
purchase and on information on Paradigm Cabling Systems may be viewed on our
Form 8-K filed on September 20, 2002 and Amended 8K-A filed on November 7, 2002.

Substantial Indebtedness
------------------------

We have a substantial amount of indebtedness. As a result of our level of debt
and the terms of our debt instruments:

         -        our vulnerability to adverse general economic conditions is
                  heightened;
         -        we will be required to dedicate a substantial portion of our
                  cash flow from operations to repayment of debt, limiting the
                  availability of cash for other purposes;
         -        we are and will continue to be limited by financial and other
                  restrictive covenants in our ability to borrow additional
                  funds, consummate asset sales, enter into transactions with
                  affiliates or conduct mergers and acquisitions;
         -        our flexibility in planning for, or reacting to, changes in
                  its business and industry will be limited; o we are sensitive
                  to fluctuations in interest rates because some of our debt
                  obligations are subject to variable interest rates; and

                                       25
<PAGE>

         -        our ability to obtain additional financing in the future for
                  working capital, capital expenditures, acquisitions, general
                  corporate purposes or other purposes may be impaired.

Our ability to pay principal and interest on our indebtedness and to satisfy our
other debt obligations will depend upon our future operating performance, which
will be affected by prevailing economic conditions and financial, business and
other factors, some of which are beyond our control. If we are unable to service
our indebtedness, we will be forced to take actions such as reducing or delaying
capital expenditures, selling assets, restructuring or refinancing our
indebtedness, or seeking additional equity capital. There is no assurance that
we can effect any of these remedies on satisfactory terms, or at all.

Item 3. Subsequent Events

On October 1, 2002, Flexxtech Corporation acquired 80% of the outstanding Common
shares of W3M, Inc. (dba "Paradigm Cabling Systems"), a privately held
California corporation ("Paradigm"), in a stock for stock exchange. Pursuant to
the terms of the acquisition, 80% of the outstanding capital stock of Paradigm
was transferred to the Company on said date. Additional information on this
purchase and on information on Paradigm Cabling Systems may be viewed on our
8K-A filed on November 7, 2002.

On October 7, 2002, 10,272,144 shares common shares were issued in the name of
Delaware Charter Guarantee and Trust, FBO Greg Mardock in exchange for a
Promissory Note of $45,500 principal amount and interest of $5,860.72 at which
Greg Mardock is a Note Holder.

On October 8, 2002, Edward R. Fearon and Escamilla Capital Corporation received
1,250,000 and 1,750,000 shares respectively. These shares were issued in
exchange for notes issued by Primavera Corporation to BECO M-A, L.P. and BECO
Joint Venture No. 1. The exchange amount for the notes as of September 30, 2002
are $76,595.00. Edward R. Fearon also received 3,000,000 shares for consulting
services relating to the NTCB sale to BC Electronics.

On October 31, 2002, $2,000,000 in debt owed by Flexxtech to Western Cottonwood
Corporation was agreed to be converted to 200 shares of Series A Preferred Stock
of Flexxtech Corporation. Additional terms of the exchange can be viewed in The
Exchange Of Debt For Agreement To Issue Stock, filed as an Exhibit on Form 8-K
on November 7, 2002.

On November 5, 2002, Western Cottonwood Corporation was issued 15, 000,000
shares of common stock in exchange for $75,000 in Promissory Notes.

On November 15, 2002 we filed an Information Statement on Form 14C for the
following reasons: To Change the Name of the Company from Flexxtech Corporation
to Paradigm Holdings, Inc.; to approve and authorize a series of new Preferred
Stock and to approve of and authorize a 1 for 200 reverse stock split. We are
not soliciting proxies, and shareholders are asked not to send a proxy. We have
our 50% written consent from seven shareholders.

Item 4.  Defaults Upon Senior Securities

         Not Applicable.

                                       26
<PAGE>

Item 5.  Submission of Matters to a Vote of Security Holders

         On November 15, 2002 we filed an Information Statement on Form 14C.

Item 6.  Other Information.

         Not Applicable.

Item 7.  Exhibits and Reports on Form 8-K.

         (a)      Exhibits filed with this Report

         99.1 Certification of Greg Mardock pursuant to 18 U.S.C. 1350, as
         adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.


         (b)      Reports on Form 8-K

                  (1)      On November 7, 2002 the registrant filed an 8-K/A
                           pursuant to the acquisition of W3M, Inc. (dba
                           Paradigm Cabling Systems)

                  (2)      On October 28, 2002 the registrant filed an 8-K/A
                           pursuant to the sale of North Texas Circuit Board
                           Company, a subsidiary of Primavera Corporation, which
                           is a subsidiary of Flexxtech Holdings, Inc., a
                           subsidiary of Flexxtech Corporation.

                  (3)      On September 20, 2002 the registrant filed an 8-K
                           pursuant to the acquisition of W3M, Inc.

                  (4)      On September 19, 2002 the registrant filed an 8-K
                           pursuant to the sale of North Texas Circuit Board
                           Company, and the resignation of certain directors and
                           the appointment of Michael Cummings as a new
                           director.


                                   SIGNATURES

         In accordance with the requirements of the Securities Exchange Act of
1934, the Registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.

                                           FLEXXTECH CORPORATION
                                           (Registrant)

Date:  November 19, 2002                   By:  /s/ Greg Mardock
                                                --------------------
                                                Greg Mardock
                                                President

                                       27
<PAGE>

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

                  CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

I, Greg Mardock, President, Chief Executive Officer and Chief Financial Officer
(principal executive officer) of Flexxtech Corporation (the "Registrant"),
certifies that:

1. I have reviewed this quarterly report on Form 10-QSB of Flexxtech
Corporation.

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

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

4. The registrant's other certifying officers, which at this time there are
none, and I are responsible for establishing and maintaining disclosure controls
and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the
registrant and we have:

a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others within those entities, particularly during the
period in which this quarterly report is being prepared;

b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and

c) presented in this quarterly report our conclusions about the effectiveness of
the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent function):

a) all significant deficiencies in the design or operation of internal controls
which could adversely affect the registrant's ability to record, process,
summarize and report financial data and have identified for the registrant's
auditors any material weaknesses in internal controls; and

b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls; and

                                       28
<PAGE>

6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.


/S/ GREG MARDOCK
-----------------------
GREG MARDOCK
DATE: NOVEMBER 19, 2002

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

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