As filed with the Securities and Exchange Commission on May 16, 2003

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

FORM 10-QSB

(Mark One)

|[X] | QUARTERLY REPORT PURSUANT TO SECTION 13 
      OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|--- | ----------------------------------------------------------------------------------------------

For the quarter ended March 31, 2003

OR

|[  ] | TRANSITION REPORT PURSUANT TO SECTION 13 
      OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|---- | -----------------------------------------------------------------------------------------------

For the transition period from __________to ______________

|Commission File Number 000-30095                      
|------------------------------------------------------
|                                                      
|CTI DIVERSIFIED HOLDINGS, INC.                        
|                                                      
|(Exact name of registrant as specified in its charter)

|Delaware                                                            | 33-0921967                                
|------------------------------------------------------------------- | ------------------------------------------
|                                                                    |                                           
|State or other jurisdiction of 
      incorporation or organization | (I.R.S. Employer
      Identification No.)

8709  50 Avenue, Edmonton AB., Canada T6E 5H4
  (Address of principal executive offices) (Zip Code)

(877) 644-6638
  (Registrants telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

|Title of each class                                         | Name of each exchange on which registered
|----------------------------------------------------------- | -----------------------------------------
|None                                                        | None                                     
|                                                            |                                          
|                                                            |                                          
|Securities registered pursuant to Section 12(g) of the Act:
|Common Stock, par value $.0001 per share                   
|                                                           
|(Title of class)                                           

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

Number of shares outstanding of the registrants class
  of common stock as of May 9, 2003: 19,783,375 plus 2033,493 shares approved
  for issuance but not yet issued.

Authorized share capital of the registrant: 50,000,000 common
  shares , par value of $0.0001

The Company recorded $nil revenue for the quarter ended March 31, 2003.

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FORWARD-LOOKING STATEMENTS

THIS QUARTERLY REPORT ON FORM 10-QSB CONTAINS PREDICTIONS,
  PROJECTIONS AND OTHER STATEMENTS ABOUT THE FUTURE THAT ARE INTENDED TO BE FORWARD-LOOKING
  STATEMENTS WITHIN THE MEANING OF SECTION 21E OF THE SECURITIES EXCHANGE
  ACT OF 1934, AS AMENDED (COLLECTIVELY, FORWARD-LOOKING STATEMENTS).
  FORWARD-LOOKING STATEMENTS INVOLVE RISKS AND UNCERTAINTIES. A NUMBER OF IMPORTANT
  FACTORS COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE IN THE FORWARD-LOOKING
  STATEMENTS. IN ASSESSING FORWARD-LOOKING STATEMENTS CONTAINED IN THIS QUARTERLY
  REPORT ON FORM 10-QSB, READERS ARE URGED TO READ CAREFULLY ALL CAUTIONARY STATEMENTS
   INCLUDING THOSE CONTAINED IN OTHER SECTIONS OF THIS QUARTERLY REPORT
  ON FORM 10-QSB. AMONG SAID RISKS AND UNCERTAINTIES IS THE RISK THAT THE COMPANY
  WILL NOT COMPLETE ITS PROPOSED ACQUISITIONS OR ANY OTHER SUITABLE ACQUISITIONS,
  THAT ITS MANAGEMENT IS ADEQUATE TO CARRY OUT ITS BUSINESS PLAN AND THAT THERE
  WILL BE ADEQUATE CAPITAL; IN ADDITION, IF SAID ACQUISITIONS ARE COMPLETED THEY
  MAY BE UNSUCCESSFUL FOR TECHNICAL, ECONOMIC OR OTHER REASONS.

CURRENCIES

All amounts expressed herein are in US dollars unless otherwise indicated.

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

Index

Consolidated Statements of Operations and Deficit for the three months ended
  March 31, 2003 and 2002

Consolidated Balance Sheet at March 31, 2003 and December 31, 2002

Consolidated Statement of Stockholders' Deficiency

Consolidated Statement of Cash Flows for the three months ended March 31, 2003
  and 2002

Notes to Consolidated Financial Statements

2

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CTI DIVERSIFIED HOLDINGS, INC. 
  (Formerly Unique Bagel Co., Inc.)
  (A Development Stage Enterprise)
  (Unaudited) 
  Consolidated Statements of Operations and Deficit 
  (Expressed in U.S. Dollars)

|                                                        |                 |   |   |                |   |   |                |  
|------------------------------------------------------- | --------------- | - | - | -------------- | - | - | -------------- | -
|                                                        | August 31, 1998 |   |   | Three months   |   |   | Three months   |  
|                                                        | (inception) to  |   |   | ended          |   |   | ended          |  
|                                                        | March 31, 2003  |   |   |                |   |   |                |  
|                                                        | (cumulative)    |   |   | March 31, 2003 |   |   | March 31, 2002 |  
|                                                        |                 |   |   |                |   |   |                |  
|Expenses                                                |                 |   |   |                |   |   |                |  
|Advertising and promotion                               | 4,122           |   |   | -              |   |   | 2,190          |  
|Automotive                                              | 2,391           |   |   | -              |   |   | -              |  
|Consulting                                              | 312,785         |   |   | 5,388          |   |   | 34,044         |  
|Depreciation                                            | 23,522          |   |   | 539            |   |   | 2,188          |  
|Insurance                                               | 706             |   |   | -              |   |   | -              |  
|Amortization of deferred charges                        | 2,601           |   |   | 2,601          |   |   | -              |  
|Interest and bank charges                               | 80,453          |   |   | 13,374         |   |   | 4,898          |  
|Interest paid to shareholders and related
      parties | 196,817         |   |   | 38,808         |   |   | 13,276         |  
|Investor relations and reporting costs                  | 197,135         |   |   | 34,037         |   |   | 1,921          |  
|Legal and accounting                                    | 155,740         |   |   | 7,228          |   |   | 31,051         |  
|Licences, dues and subscriptions                        | 2,829           |   |   | -              |   |   | -              |  
|Office                                                  | 73,348          |   |   | 3,134          |   |   | 8,772          |  
|Rent                                                    | 39,894          |   |   | -              |   |   | -              |  
|Telephone                                               | 14,518          |   |   | -              |   |   | 825            |  
|Travel                                                  | 144,141         |   |   | -              |   |   | 38,368         |  
|Utilities                                               | 1,975           |   |   | -              |   |   | -              |  
|Stock based compensation                                | 58,000          |   |   | 25,000         |   |   | -              |  
|Wages and benefits                                      | 177,580         |   |   | -              |   |   | -              |  
|                                                        |                 |   |   |                |   |   |                |  
|Loss from operations                                    | (1,488,557      | ) |   | (130,109       | ) |   | (137,533       | )
|Other items                                             |                 |   |   |                |   |   |                |  
|Impairment of goodwill                                  | (3,290,217      | ) |   | -              |   |   | -              |  
|Impairment of intangible assets                         | (472            | ) |   | -              |   |   | -              |  
|Impairment of investments                               | (560,850        | ) |   | -              |   |   | (27,420        | )
|Loss on disposition of assets                           | (40,283         | ) |   | -              |   |   | -              |  
|Interest and other items                                | 19,915          |   |   | 1,173          |   |   | 6,696          |  
|Forgiveness of debt                                     | 15,617          |   |   | -              |   |   | -              |  
|Loss on disposition of foreign subsidiaries             | (1,323,180      | ) |   | -              |   |   | -              |  
|                                                        |                 |   |   |                |   |   |                |  
|                                                        | (5,179,470      | ) |   | 1,173          |   |   | (20,724        | )
|                                                        |                 |   |   |                |   |   |                |  
|Net loss for the period                                 | (6,668,027      | ) |   | (128,936       | ) |   | (158,257       | )
|Deficit, beginning of period                            |                 |   |   | (6,539,091     | ) |   | (4,836,132     | )
|                                                        |                 |   |   |                |   |   |                |  
|Deficit, end of period                                  |                 |   | $ | (6,668,027     | ) | $ | (4,994,389     | )
|                                                        |                 |   |   |                |   |   |                |  
|Loss per share (Basic and diluted)                      |                 |   | $ | (0.01          | ) | $ | (0.01          | )
|Weighted average number of common shares outstanding    |                 |   |   | 19,668,472     |   |   | 17,808,744     |  
|                                                        |                 |   |   |                |   |   |                |  

3

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CTI DIVERSIFIED HOLDINGS, INC. 
  (Formerly Unique Bagel Co., Inc.) 
  (A Development Stage Enterprise)
  (Unaudited) 
  Consolidated Balance Sheets 
  (Expressed in U.S. Dollars)

|                                                            |                |            |                   |  
|----------------------------------------------------------- | -------------- | ---------- | ----------------- | -
|                                                            | March 31, 2003 |            | December 31, 2002 |  
|                                                            |                |            |                   |  
|                                                            |                |            |                   |  
|ASSETS                                                      |                |            |                   |  
|Current                                                     |                |            |                   |  
|Cash and cash equivalents                                   | $              | 13,998     |                   | $
|                                                            |                |            |                   |  
|Total current assets                                        |                | 13,998     |                   |  
|Notes receivable                                            |                | 888,506    |                   |  
|Discount on long term debt, net of accumulated amortization |                | 67,935     |                   |  
|Deferred charges                                            |                | 28,617     |                   |  
|Fixed assets                                                |                | 6,654      |                   |  
|                                                            |                |            |                   |  
|Total assets                                                | $              | 1,005,710  |                   | $
|                                                            |                |            |                   |  
|LIABILITIES                                                 |                |            |                   |  
|Current                                                     |                |            |                   |  
|Accounts payable and accrued liabilities                    | $              | 538,441    |                   | $
|Notes payable                                               |                | 362,741    |                   |  
|Due to shareholders                                         |                | 215,342    |                   |  
|                                                            |                |            |                   |  
|Total current liabilities                                   |                | 1,116,524  |                   |  
|Long term debt                                              |                | 988,049    |                   |  
|                                                            |                |            |                   |  
|Total liabilities                                           |                | 2,104,573  |                   |  
|                                                            |                |            |                   |  
|STOCKHOLDER'S EQUITY (DEFICIENCY)                           |                |            |                   |  
|Capital stock                                               |                | 1,979      |                   |  
|Additional paid-in capital                                  |                | 5,578,047  |                   |  
|Accumulated other comprehensive income (loss)               |                | (10,862    | )                 |  
|Deficit accumulated during development stage                |                | (6,668,027 | )                 |  
|                                                            |                |            |                   |  
|Total shareholders' deficiency                              |                | (1,098,863 | )                 |  
|                                                            |                |            |                   |  
|Total liabilities and shareholders' deficiency              | $              | 1,005,710  |                   | $
|                                                            |                |            |                   |  
|Commitments                                                 |                |            |                   |  

APPROVED ON BEHALF OF THE BOARD: ______________, Director  ______________,
  Director

4

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CTI DIVERSIFIED HOLDINGS, INC.
  (Formerly Unique Bagel Co., Inc.) 
  (A Development Stage Enterprise) 
  (Unaudited) 
  Statement of Stockholders' Deficiency 
  From August 11, 1998 (Date of Inception) to March 31, 2003

5

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6

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CTI DIVERSIFIED HOLDINGS, INC.
  (Formerly Unique Bagel Co., Inc.) 
  (A Development Stage Enterprise) 
  (Unaudited) 
  Statement of Stockholders' Deficiency 
  From August 11, 1998 (Date of Inception) to March 31, 2003



7

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CTI DIVERSIFIED HOLDINGS, INC. 
  (Formerly Unique Bagel Co., Inc.) 
  (A Development Stage Enterprise) 
  (Unaudited) 
  Consolidated statement of cash flows 
  (Expressed in U.S. Dollars)

---

|                                                                   | August 31, 1998 |            |              |   |              |   |   |         
|------------------------------------------------------------------ | --------------- | ---------- | ------------ | - | ------------ | - | - | --------
|                                                                   | (inception) to  |            | Three Months |   | Three Months |  
|                                                                   | March 31, 2003  |            | March 31,    |   | March 31,    |  
|                                                                   | (cumulative)    |            | 2003         |   | 2002         |  
|                                                                   |                 |            |              |   |              |   |   |         
|Cash flows from operating activities                               |                 |            |              |   |              |   |   |         
|Net loss                                                           | $               | (6,668,027 | )            | $ | (128,936     | ) | $ | (158,257
|Adjustments to reconcile
      net income to net cash provided by  |                 |            |              |   |              |   |   |         
|operating
      activities:                                        |                 |            |              |   |              |   |   |         
|Depreciation                                                       |                 | 23,522     |              |   | 539          |   |   | 2,188   
|Stock-based
      compensation                                     |                 | 58,000     |              |   | 25,000       |   |   | -       
|Impairment
      of goodwill                                       |                 | 3,290,217  |              |   | -            |   |   | -       
|Amortization
      of deferred charges and discount on promissory  |                 |            |              |   |              |   |   |         
|notes                                                              |                 | 8,157      |              |   | 7,685        |   |   | -       
|Impairment
      of investments                                    |                 | 560,850    |              |   | -            |   |   | 27,420  
|Loss
      on disposition of assets                                |                 | 40,183     |              |   | -            |   |   | -       
|Loss
      on disposition of subsidiaries                          |                 | 1,323,180  |              |   | -            |   |   | -       
|Forgiveness
      of debt                                          |                 | (15,617    | )            |   | -            |   |   | -       
|Shares
      issued for service                                    |                 | 33,000     |              |   | -            |   |   | -       
|                                                                   |                 |            |              |   |              |   |   |         
|                                                                   |                 | (1,346,535 | )            |   | (95,712      | ) |   | (128,649
|Change in assets
      and liabilities:                            |                 |            |              |   |              |   |   |         
|Decrease
      (increase) in prepaid expenses                      |                 | -          |              |   | -            |   |   | (2,031  
|Increase
      (decrease) in accounts payable and accrued          |                 |            |              |   |              |   |   |         
|liabilities                                                        |                 | 573,019    |              |   | (1,229       | ) |   | 46,895  
|Net
      liabilities acquired on acquisition of subsidiary        |                 | (779,625   | )            |   | -            |   |   | -       
|                                                                   |                 |            |              |   |              |   |   |         
|                                                                   |                 | (1,553,141 | )            |   | (96,941      | ) |   | (83,785 
|                                                                   |                 |            |              |   |              |   |   |         
|Cash flows from (used in) financing activities                     |                 |            |              |   |              |   |   |         
|Issuance of promissory
      notes                                 |                 | 3,201,329  |              |   | 988,049      |   |   | -       
|Increase in notes payable                                          |                 | 450,541    |              |   | 32,200       |   |   | 211,592 
|Increase in due to
      shareholders                              |                 | 754,351    |              |   | 10,995       |   |   | 3,293   
|                                                                   |                 |            |              |   |              |   |   |         
|                                                                   |                 | 4,406,221  |              |   | 1,031,244    |   |   | 214,885 
|                                                                   |                 |            |              |   |              |   |   |         
|Cash flows (used in) investing activities                          |                 |            |              |   |              |   |   |         
|Capital expenditures                                               |                 | (74,161    | )            |   | -            |   |   | -       
|Proceeds on sale of
      New York Bagel Inc.                      |                 | 6,066      |              |   | -            |   |   | -       
|Investment in or advances
      to foreign subsidiaries            |                 | (1,329,057 | )            |   | -            |   |   | -       
|Investment in or advances
      to Sentry Telecom Systems Inc.     |                 | (567,449   | )            |   | -            |   |   | (24,800 
|Investment in notes
      receivable                               |                 | (888,506   | )            |   | (888,506     | ) |   | -       
|Proceeds on sales of
      assets                                  |                 | 24,886     |              |   | -            |   |   | -       
|                                                                   |                 |            |              |   |              |   |   |         
|                                                                   |                 | (2,828,221 | )            |   | (888,506     | ) |   | (24,800 
|                                                                   |                 |            |              |   |              |   |   |         
|Effect of exchange rate changes                                    |                 | (10,861    | )            |   | (33,221      | ) |   | -       
|Increase in cash and cash equivalents                              |                 | 13,998     |              |   | 12,576       |   |   | 106,303 
|Cash and cash equivalents, beginning of period                     |                 | -          |              |   | 1,422        |   |   | 949     
|                                                                   |                 |            |              |   |              |   |   |         
|Cash and cash equivalents, end of period                           |                 | 13,998     |              | $ | 13,998       |   | $ | 107,252 
|                                                                   |                 |            |              |   |              |   |   |         
|Supplementary disclosure - non-cash transactions                   |                 |            |              |   |              |   |   |         
|Cash flows from (used in) financing
      activities               |                 |            |              |   |              |   |   |         
|Forgiveness of debt
      - related party                          | $               | (212,054   | )            | $ | -            |   | $ | -       
|Conversion of notes
      payable, amounts due to shareholders and |                 |            |              |   |              |   |   |         
|account payable to
      common stock                              |                 | 3,316,136  |              |   | 34,525       |   |   | -       
|Shares allotted for
      debt settlement                          |                 | 1,016,872  |              |   | -            |   |   | -       
|Issuance of shares
      on acquisition of Subsidiary              |                 | 1,851,598  |              |   | -            |   |   | -       
|                                                                   |                 |            |              |   |              |   |   |         
|                                                                   |                 | 5,972,552  |              |   | 34,525       |   |   | -       
|                                                                   |                 |            |              |   |              |   |   |         
|Cash flows (used in) investing activities                          |                 |            |              |   |              |   |   |         
|Investment in subsidiary                                           |                 | (1,851,598 | )            |   | -            |   |   | -       
|                                                                   |                 |            |              |   |              |   |   |         

8

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|1. | Basis of Presentation
      The accompanying unaudited consolidated financial statements
        have been prepared in accordance with generally accepted accounting principles
        for interim financial information and with the instructions to Form 10-QSB
        and Article 10 of Regulation S-X. Accordingly, they do not include all
        of the information and notes required by generally accepted accounting
        principles for complete financial statements. The preparation of financial
        statements in conformity with accounting principles generally accepted
        in the United States requires the Company's management to make estimates
        and assumptions that affect the reported amounts of assets and liabilities
        and disclosure of contingent assets and liabilities at the date of the
        financial statements as well as the reported amounts of revenues and expenses
        during the reporting period. In the opinion of management, the accompanying
        financial statements include all adjustments which are normal, recurring
        and necessary in order to make the interim financial statements not misleading.
        Operating results for interim periods are not necessarily indicative of
        the results that may be expected for the year.
      For further information, refer to the audited financial
        statements and notes thereto included in the CTI annual report on Form
        10-KSB for the fiscal year ended December 31, 2002.
      The accompanying unaudited consolidated financial statements
        have been prepared on a going concern basis, which contemplates the realization
        of assets and the discharge of liabilities in the normal course of business
        for the foreseeable future. The Company has no current source of revenue.
        The future of the Company as a "going concern" is highly dependent upon
        the Company's ability to attract new equity or debt financing. The Company
        currently has no revenue from operations, is in a start-up phase with
        it's existing assets and has no significant assets, tangible or intangible.
        There can be no assurance that the Company will generate revenues in the
        future, or that we will be able to operate profitably in the future, if
        at all. The Company has incurred significant net losses in each fiscal
        year since inception of operations. In order to continue with it's revised
        business plan, the Company will require additional equity or debt financing
        to fund its continued operations. There can be no assurance the Company
        will be successful in obtaining additional financing on favorable terms,
        it at all.
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|2. | Summary of significant accounting policies                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      

9

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|2. | Summary of significant accounting policies,
      continued
|-- | -----------------------------------------------------------
|   |                                                            
|   | (c)                                                        
|   |                                                            
|   | (d)                                                        
|   |                                                            
|   | (e)                                                        
|   |                                                            
|   | (f)                                                        
|   |                                                            
|   | (g)                                                        

10

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|2. | Summary of significant accounting policies,
      continued
|-- | -----------------------------------------------------------
|   |                                                            
|   | (h)                                                        
|   |                                                            
|   | (i)                                                        
|   |                                                            
|   | (j)                                                        
|   |                                                            
|   | (k)                                                        
|   |                                                            
|   | (l)                                                        
|   |                                                            
|   | (m)                                                        

11

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|3. | Notes receivable
      On February 6, 2003, the Company entered into a letter
        of intent to purchase a 51% interest in Flowstar Technologies Inc.("Flowstar")
        and Flowray Inc. ("Flowray"), two companies located in Alberta, Canada
        in exchange for 750,000 shares of common stock of the Company, a cash
        payment of CDN$1,750,000, advances by way of promissory notes bearing
        interest at 5% per annum and secured by a general security agreement totaling
        $1,500,000 CDN, and such number of additional common shares of the Company
        equal in value to CDN$500,000 calculated at the prior two months average
        market price after discount of 20%. The acquisition may complete in stages,
        with each stage being subject to fulfillment of certain closing conditions.
        The first closing of the transactions contemplated by the letter of intent
        will not occur until the parties have signed a formal share purchase and
        subscription agreement and all closing conditions have been fulfilled
        or waived by the parties. As of May 8, 2003, negotiations are ongoing
        with respect to the finalizing of a formal agreement.
      The notes receivable consist of advances and accrued
        interest made to Flowray and Flowstar of $878,017 and acquisition related
        expenses of $10,489. The advances bear interest at 5% per annum, and are
        secured by a general security agreement covering the assets of Flowstar
        and Flowray. 25% of the advances are due on each of March 30, 2004, September
        30, 2004, and March 30, 2005, with the balance plus accrued interest due
        on September 30, 2005.
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|4. | Fixed assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       

| |                    |   |        |  |   |                |  |   |          |  |                   |                | 
| | ------------------ | - | ------ |  | - | -------------- |  | - | -------- |  | ----------------- | -------------- | 
| |                    |   |        |  |   | March 31, 2003 |  |   |          |  | December 31, 2002 |               
| |                    |   |        |  |   |                |  |   |          |  |                   |                | 
| |                    |   |        |  |   | Accumulated    |  |   | Net book |  |                   |                | 
| |                    |   | Cost   |  |   | depreciation   |  |   | value    |  |                   | Net book value | 
| |                    |   |        |  |   |                |  |   |          |  |                   |                | 
| | Computer equipment | $ | 16,720 |  | $ | 10,066         |  | $ | 6,654    |  | $                 | 7,193          | 
| |                    |   |        |  |   |                |  |   |          |  |                   |                | 
| |                    | $ | 16,720 |  | $ | 10,066         |  | $ | 6,654    |  |                   | 7,193          | 
| |                    |   |        |  |   |                |  |   |          |  |                   |                | 

|5. | Notes payable
      The notes payable bears interest at the Bank of Montreal prime rate plus
        5% per annum, compounded monthly. The note is secured by certain assets
        of Sentry. On January 15, 2003, two shareholders of the Company personally
        guaranteed payment of $100,000 of the note. As of May 2003, the Company
        is in default of the repayment agreement. As at March 31, 2003, the Bank
        of Montreal prime rate was 4.75%.
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|6. | Due to shareholders
      The amounts due to shareholders consist of notes payable,
        which bear interest at rates ranging from 7% to prime plus 5% and expenses
        paid by shareholders on behalf of the Company.                                                                                                                                                                                                                                             

12

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|7. | Long term debt
      The notes payable are due to AHC Holdings Inc., ("AHC")
        a private company beneficially owned and controlled by a Director of the
        Company. The loan has been structured as a borrowing facility, is unsecured
        and bears interest at 15% per annum. All advances are due on December
        31, 2005. The Company granted AHC warrants to purchase 1,000,000 shares
        of common stock at a price of $0.15 per share in connection with the loan
        (see note 8(b)).
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|8. | Stockholders' Equity (Deficiency)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | (i)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       

13

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|8. | Stockholders' Equity (Deficiency) continued
|-- | -------------------------------------------
|   |                                            
|   | (b)                                        

| |  | Number of warrants |  | Exercise price | Expiry date  
| |  | ------------------ |  | -------------- | -------------
| |  |                    |  |                |              
| |  | 702,770            |  | $2.20          | June 2003    
| |  | 601,380            |  | $1.50          | June 2003    
| |  | 1,500,000          |  | $0.15          | March 2006   
| |  | 300,000            |  | $0.25          | December 2006
| |  |                    |  |                |              
| |  | 3,104,150          |  |                |              
| |  |                    |  |                |              

|**9.** | Commitments
      On January 27, 2003, the Company entered into an agreement
        with PGN Holdings Inc., under which PGN would lend CTI up to $250,000
        US dollars. The loan has been structured as a borrowing facility, is unsecured
        and all advances bear interest at 8% per annum. PGN has the right to convert
        all or any portion of the principal sum and accrued and unpaid interest
        outstanding into fully paid and non-assessable common shares of CTI on
        the basis of one share for each US $0.50 of principal and interest outstanding.
        All advances, regardless of the date advanced, are due on January 1, 2004.
        As of May 9, 2003, the Company has not borrowed any funds under this facility.
      On March 28, 2003, the Company entered into an agreement
        with the Howard Group under which the Howard Group would provide an investor
        and financial relations program. In consideration for these services,
        the Company has agreed to pay the Howard Group $5,000 in Canadian Funds
        per month to February 2004, and has agreed to grant an option to acquire
        200,000 shares of the Company at an exercise price of $0. 20 US dollars
        per share expiring three years from the date of issue. As of March 31,
        2003 this option has not been granted.
|------ | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

14

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|10. | Subsequent Events
      In April 2003 and on May 7, 2003, AHC advanced the Company
        $67,725 CDN and $136,261 CDN respectively, by way of promissory note under
        the borrowing facility described in Note 7.
      On May 7, 2003, the Company loaned $100,000 CDN to Flowray
        by way of a promissory note. The note is secured by a general security
        agreement and bears interest at a rate of 5% per annum.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                          
|11. | Related Party Transactions                                                                                                                                                                                                                                                                                                                                                                                                               
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                      

|                                                             |                |  |                | 
|------------------------------------------------------------ | -------------- |  | -------------- | 
|                                                             | Three month    |  | Three month    | 
|                                                             | period ended   |  | period ended,  | 
|                                                             | March 31, 2003 |  | March 31, 2002 | 
|                                                             |                |  |                | 
|                                                             |                |  |                | 
|Consulting fees paid or accrued to a director of the Company | -              |  | 6,000          | 
|Interest paid to shareholders and related parties            | 38,808         |  | 13,276         | 
|                                                             |                |  |                | 

| | (b) | See notes 7 and 8(b).
| | --- | ---------------------

Management is of the opinion that the terms and conditions
  of the above noted related party transactions are consistent with standard business
  practice.

15

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ITEM 2. MANAGEMENTS PLAN OF OPERATIONS

CTI Diversified Holdings, Inc. (formerly Unique Bagel Co.,
  Inc.) was incorporated under the laws of the state of Delaware on August 11,
  1998. On January 10, 2001 we changed our name to CTI Diversified Holdings, Inc.
  (referred to herein as we, CTI, the Company
  or our Company).

Subsequent to ceasing our primary operations in the third
  quarter of 2002, which we conducted through our 90% controlled subsidiary Sentry
  Telecom Systems Inc., we undertook a process of analyzing our future strategic
  direction and business plan for our Company. It became apparent that capital
  markets were no longer receptive to emerging high technology, telecommunications
  companies such as Sentry, and we began to revise our business plan to better
  position our company to take advantage of positive trends in the oil and gas
  industry.

Prior to the end of January 2003, we were successful in converting
  approximately $1,309,000 of our outstanding debt to equity, secured new financing
  of approximately $1,400,000 through an unsecured loan (See Part II Item II),
  and adopted a new business plan. Our new mandate is to realize enhanced capital
  appreciation for our stockholders, by providing our expertise to emerging companies
  offering timely product solutions and/or strategic investment opportunities
  in the petroleum production and service industries.

Although there can be no assurance of future success, we intend to carry out
  our new mandate by:

|1. | Investing primarily in companies or
        products where early stage product development has been completed. Early
        stage product development generally means any basic research surrounding
        a potential product or service and the development of working prototypes.
        This will enable us to minimize risks associated with early stage start
        ups, reduce both the time frame and amount of capital required for commercialization
        of proposed products, and thus maximize any potential return to our stockholders.
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|2. | Generally acquire a controlling or majority
        equity position to fully participate in the target companys strategic
        business plan and corporate governance.                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|3. | Contribute our business expertise to assist
        in the further development of the target companys business and operations.
        We believe that a combination of our skills in conjunction with the targets
        skills will maximize the probability of potential success.                                                                                                                                                                                                                                                                       

We currently have no revenue from operations, we are in a start-up
  phase with our existing assets and we have no significant assets, tangible or
  intangible. There can be no assurance that we will generate revenues in the
  future, or that we will be able to operate profitably in the future, if at all.
  We have incurred significant net losses in each fiscal year since inception
  of our operations.

In order to continue with our revised business plan, we will
  require additional equity or debt funding within approximately 6 months if we
  do not complete any acquisitions, and we may require funding sooner if we identify
  and complete an acquisition or investment. There can be no assurance we will
  be successful in obtaining additional financing on favorable terms, if at all.
  We have limited funds to maintain our own ongoing expenses, and we currently
  have significant current liabilities that will need to be paid in the ordinary
  course of business. Without an infusion of new capital, the Company will not
  be able to maintain current operations beyond these periods.

We are also continuing to experience negative cash flows from
  operations. We will likely be required to place additional securities in new
  financings to make up for such negative cash flow. Such transactions may have
  a negative or depressing effect on the trading prices for our publicly-traded
  common stock.

Rapid growth often places considerable operational, managerial
  and financial strain on a company. To ensure the success of our new business
  plan, we must proactively adhere to the following:

|1. | Improve, upgrade and expand our business infrastructure
|-- | -------------------------------------------------------

16

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|2. | Hire, train and retain key management for our company and
      ensure any target company does the same                                           
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                   
|3. | Advance the commercialization development programs for target
      companies so they become cash flow positive as soon as is practically possible
|   |                                                                                                                                                   
|4. | Maintain adequate financial resources                                                                                                             

Our Company's future opportunities for success greatly depends
  on the continued employment of and performance by senior management, including
  the successful hiring of a permanent Chief Executive Officer experienced in
  the oil and gas industry, and any applicable key personnel employed by potential
  target companies. We would be materially adversely affected if one or more of
  the senior management team do not continue to perform in their present positions,
  if we are unable to hire an experienced President and CEO, or if we or potential
  targets are unable to hire and train a sufficient number of qualified management,
  professional, technical and regulatory personnel.

Management Changes

On February 28, 2003, Mr. Donald E. Farnell resigned as our
  acting Chief Financial Officer. On March 5, 2003, Mr. Alfred Comeau and Mr.
  Terry Mereniuk were appointed to our Board of Directors. On March 31, 2003,
  Mr. Farnell resigned his positions as Director, Chairman, President and CEO.
  On April 9, 2003, Mr. John Anderson, a Director of our Company, was appointed
  interim President and CEO, replacing Mr. Farnell. Mr. Terry Mereniuk was appointed
  Chief Financial Officer. On April 24, 2003, Mr. Anderson was appointed Secretary/Treasurer.

Proposed Acquisition

For purposes of this foregoing discussion regarding a proposed
  acquisition, we are assuming a currency conversion rate of 1 Canadian Dollar
  being equivalent to 0.71 US Dollar. This is the approximate exchange rate as
  of the date of this report.

On March 27, 2003 we announced our intention to proceed with
  our first acquisition. We entered into a Memorandum of Agreement dated March
  27, 2003 with Flowray Inc. ("Flowray") and Flowstar Technologies Inc. ("Flowstar")
  under which we have advanced $1,290,000 Canadian dollars or approximately $915,000
  by way of a loan to Flowray and Flowstar for operating purposes. Flowray and
  Flowstar, as borrowers, have provided our Company with a promissory note for
  each advance. The borrowers have agreed to pay us interest on the promissory
  notes at the rate of 5% per annum, calculated monthly on the last day of each
  month, not in advance, from the date of each promissory note on the outstanding
  balance. The promissory notes are due as follows: 25% of the outstanding balance
  of the promissory notes on March 30, 2004, a further 25% on September 30, 2004,
  a further 25% on March 30, 2005, and the balance together with all accrued interest
  on September 30, 2005.

As security for the repayment of the promissory notes, Flowray
  and Flowstar have granted us a security interest in all of their present and
  after-acquired personal property. The President, director and a shareholder
  of each of Flowray and Flowstar, has agreed to postpone his rights as holder
  of security interests and security agreements on the personal property of the
  borrowers to all rights and security interests of the Company. Notwithstanding
  the postponement, he is entitled to repayment of shareholders loans up to $65,032.70
  Canadian dollars (approximately $46,000) advanced previously to the borrowers,
  and reimbursement from the borrowers of expenses incurred in the ordinary course
  of business.

If we close this intended acquisition, $540,000 of the existing
  $915,000 loan to Flowray and Flowstar will remain as a loan. The balance of
  the loan, or $375,000, will be applied to the purchase price for the acquisition
  of Flowray shares. In addition to the loan of $540,000, we have agreed to increase
  the loan by an additional $525,000, for a total loan of $1,065,000 or $1,500,000
  Canadian dollars. The loan will be secured by the general security agreement
  already signed by the borrowers and will bear interest at 5% per annum. The
  loan may be repaid depending upon the cash flow of Flowray and Flowstar and
  at the discretion of the boards of directors of the borrowers.

Business of Flowstar and Flowray.

Flowray and Flowstar are private companies incorporated in
  Alberta, Canada. Since inception, Flowray has been developing a new system for
  measuring the flow of gas in upstream petroleum production applications.

17

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This system is known as the Digital Chart Recorder or DCR-900.
  The DCR-900 system consists of a turbine based flow measurement signal generating
  device, temperature and pressure probes and a flow computer, which performs
  all of the flow calculations. This system has recently received approval from
  the Canadian Standards Association (CSA) and has received independent verification
  of accuracy from Southwest Research Institute in Houston Texas.

The companies are currently in the process of field-testing
  the product. 25 DCR-900 units have recently been installed in customer applications
  for testing in western Canada. 12 additional installations are planned in the
  United States by June 30, 2003. There have been no commercial sales of the product
  as of the date hereof. The companies anticipate that they will be in a position
  to generate commercial sales in the next several months.

Flowstar has secured the right to manufacture, market and distribute
  the products that have been developed by Flowray, in exchange for a 10% royalty
  on sales. Flowstar also represents and distributes independent third party products,
  and is positioning itself to be a leading supplier of flow measurement equipment
  to the petroleum industry.

Flowray and Flowstar currently have no significant tangible
  assets. The intellectual property assets of Flowray include a US provisional
  patent application filed on or about March 3, 2003 for the technology used in
  the DCR-900 system. Flowray also has an exclusive worldwide marketing agreement
  with an unrelated party for a gas turbine under a private label arrangement
  with Flowstar. Flowray also holds the intellectual property for liquid based
  totalizers, burner igniters, and windows based gas flow calculation software,
  all of which Flowstar markets. Flowstar also markets a line of liquid turbines
  for which there is no intellectual property. The patents expired long ago.

Flowray has given Cal-Scan Services Ltd. ("Cal-Scan"), a private
  Canadian company, a right of first refusal to engineer, supply or manufacture
  the DCR-900 product according to Flowray's specifications. One of the shareholders
  of Flowray and Flowstar is also a principal of Cal-Scan. Cal-Scan is also the
  owner of a trade secret, which is incorporated in the design of Flowray's DCR-900
  system. For each DCR-900 unit purchased from Cal-Scan, Flowray has agreed to
  pay Cal-Scan a $200 Canadian dollar (approximately $140) fee for use of the
  trade secret. Details of Cal-Scan's trade secret will be provided to a mutually
  agreeable trust agent, to be held in escrow and not disclosed to Flowray, except
  if any of the following events occur:

|   | a)                                                                                                                                                                                                                                                                                | Cal-Scan is declared bankrupt;
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------
|   |                                                                                                                                                                                                                                                                                  
|b) | Cal-Scan refuses to perform any manufacturing
        or engineering of the DCR-900 product and refuses to allow a third party
        or Flowray to manufacture the produce or refuses to supervise a third
        party or Flowray to continue the engineering of the product.

Flowray has also granted Cal-Scan an irrevocable, exclusive
  license to use Flowray's technology related to differential pressure orifice
  plate system flow measurement, in oil field production well testing. Cal-Scan's
  license will permit it to manufacture, market, and sell flow measurement products,
  or sub-license or assign these rights, in markets other than turbine based flow
  measurement. The term of Cal-Scan's license will continue for the life of Flowrays
  patent. If Flowray fails to purchase at least 100 units within the first two
  years from January 1, 2003, 200 units in year three and 300 per year thereafter,
  then Cal-Scan's license to use Flowray's technology will be extended to its
  entire subject matter without any restriction on the market. If Flowray is declared
  bankrupt, Flowray has agreed to assign to Cal-Scan all its rights to the flow
  measurement technology, including patents and patent applications. Flowray also
  granted Cal-Scan a distributorship for the DCR-900 product. Any cost savings
  resulting from revisions to the product will be split equally between Flowray
  and Cal-Scan.

Details of intended acquisition of up to 51% of Flowray
  and Flowstar.

Under a letter of intent dated February 6, 2003, we have agreed
  to acquire up to 51% of the issued and outstanding share capital of both Flowray
  and Flowstar. It is intended this will be accomplished by way of transfer of
  previously issued shares from the current shareholders of the companies and
  by the purchase of shares from treasury of Flowray. The consideration we are
  to pay pursuant to the acquisition includes:

|   | 1.                                                                                                                                                                                 | the issuance to the shareholders of Flowstar
        of an aggregate of 750,000 shares of our common stock at a deemed price
        of $0.13 per share in exchange for the transfer of 51% of the issued shares
        of Flowstar;
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                   
|2. | the payment of an aggregate of $750,000
        Canadian dollars or approximately $532,000, to Flowray in consideration
        of the issuance of treasury shares to the Company;

18

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|   | 3.                                                                                                                                                                                                                                                                                                                              | the payment of an aggregate of $1,000,000
        Canadian dollars or approximately $710,000 to the shareholders of Flowray
        in consideration of the transfer of certain of their shares of Flowray;
        and
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                
|4. | the issuance to the shareholders of Flowray
        and Flowstar of such number of additional shares of common stock of the
        Company equal in value to $500,000 Canadian dollars or $355,000, calculated
        at the average market price for two months prior to the date of issuance
        and discounted by 20%.

Two shareholders each hold 50% of the current issued share
  capital of Flowray and Flowstar. The acquisition of 51% of Flowray and Flowstar
  may complete in stages. The first closing of the transactions contemplated by
  the letter of intent will not occur we have signed a formal share purchase and
  subscription agreement and all closing conditions have been fulfilled or waived
  by the parties. We may make the cash payments in instalments required to be
  paid on or before certain deadlines over the period ending January 15, 2004.
  Should we proceed, we will issue the first allotment of 750,000 shares on the
  first closing date. The second allotment of shares worth $355,000 is due on
  or before January 15, 2004. See Liquidity and Capital Resources
  in this Section for our planned payments for this acquisition.

We have agreed that all of our common stock to be issued to
  the shareholders of Flowray and Flowstar are to be registered or qualified for
  sale under applicable securities laws within 120 days of the date of issuance.

On the first closing date, the board of directors of each
  of Flowray and Flowstar will be comprised of three directors, two of whom will
  be nominated by our Company and one of whom will be nominated by the two existing
  shareholders.

Upon our acquisition of 51% of the issued shares of Flowray
  and Flowstar, we will have the option to purchase the remaining 49% of the issued
  shares of Flowray or Flowstar, or both, at the fair market value based on a
  valuation prepared by an independent business valuator. Our option to purchase
  the remaining 49% may be exercised at any time without an expiry date. If the
  existing shareholders of Flowstar and Flowray receive an offer from a third
  party to purchase their remaining 49% interest, we will have the right of first
  refusal to purchase the interest on the same terms as the offer.

We have not yet completed the transaction to acquire the interest
  in Flowstar and Flowray. Completion is subject to satisfactory due diligence
  and completion of documentation, among other things. There can be no assurance
  that we will complete this transaction on terms described herein, or at all.

Plan of Operation Overview

The following discussion of the plan of operation, financial
  condition, results of operations, cash flows and changes in financial position
  of our Company should be read in conjunction with our most recent financial
  statements and notes appearing elsewhere in this Form 10-QSB; and our 10-KSB
  filed on April 30, 2003.

We have not generated any revenues from products, services
  or operations since the inception of our company. As such, we are including
  herein a discussion of our plan of operation for the next 12 months for our
  revised business plan.

In addition, though not required for regulatory purposes,
  we are also including some additional summary analysis and information regarding
  our financial condition, liquidity and capital resources. This analysis should
  be read jointly with the financial statements, related notes, and the cautionary
  statement regarding forward-looking statements, which appear elsewhere in this
  filing.

Plan of Operation for the Next Twelve Months

Our future operations are dependent upon the identification
  and successful completion of additional long-term or permanent equity financing,
  the continued support of creditors and shareholders, and, ultimately, the achievement
  of profitable operations. There can be no assurances that we will be successful
  which would significantly affect our ability to roll out our revised business
  plan. If not, we will likely be required to reduce operations or liquidate assets.
  We will continue to evaluate our projected expenditures relative to its available
  cash and to seek additional means of financing in order to satisfy its working
  capital and other cash requirements.

Our plan over the next several weeks is to complete the Flowstar
  and Flowray acquisition on terms described previously. If we do complete, our
  company will require additional cash of $1,960,000 Canadian Dollars, or

19

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approximately $1,391,000 to fully complete the transaction. Cash payments are scheduled as follows:

| | $355,000 by June 1, 2003   
| | ---------------------------
| | $426,000 by July 1, 2003   
| | $433,000 by August 1, 2003 
| | $177,000 by January 1, 2004
| | $1,391,000                 

|Additionally, we are currently
        experiencing a working capital deficiency of approximately $1,100,000.
        Our current cash on hand is $13,998 and we have approximately $348,000
        remaining credit under the loan from AHC (See Part II, Item 2).
        Our shortfall prior to operating requirements is therefore $2,129,000
        should we draw the balance of the AHC loan, and should we complete the
        acquisition. We also anticipate that we will require $30,000 monthly for
        corporate costs or $360,000 annually, for all of which we will need to
        raise additional funding.
      These estimates may differ significantly after our needs
        are more fully developed. Our operations have been funded to date by debt
        and equity financing. We are relying on these sources of funding in order
        to provide our company with sufficient capital to continue our development
        and operational plans. There can be no assurance that the past trend will
        continue, which would significantly affect the financial condition of
        our Company and our ability to close the Flowstar and Flowray transaction.
      Over the next 12 months, we also plan to closely monitor
        and implement solutions to successfully manage our proposed future growth.
        This will include:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|Cash on hand is currently
        our only source of liquidity. We do not have any lending arrangements
        in place with banking or financial institutions and we do not anticipate
        that we will be able to secure these funding arrangements in the near
        future. To the extent that we require additional funds to support our
        operations or the expansion of our business, we may sell additional equity
        or issue debt. Any sale of additional equity securities will result in
        dilution to our stockholders. There can be no assurance that additional
        financing, if required, will be available to our company or on acceptable
        terms.
      We do not anticipate making any major purchases of capital
        assets in the next 12 months, or conducting any research and development.
        Our current corporate employee count is expected to remain the same for
        the next 12 months. Given the change in our business plan, we anticipate
        that any change in capital assets, research and development and employees
        would be subject to change in any targeted operating business we may acquire,
        including that of Flowstar and Flowray, should we complete the purchase.
      Results from Operations  2003 Compared to 2002
      We incurred a net loss for the first quarter ended March
        31, 2003 of $128,936 compared to a net loss of $158,257 for the comparable
        period. This loss includes general and administrative costs totaling $130,109
        compared to $137,533 for the first quarter ended March 31, 2002. In March
        2003, the Company approved the issuance of 1,000,000 share purchase warrants
        to AHC, a company controlled by a Director of our Company, and 500,000
        share purchase warrants to a Director of the Company in consideration
        for services rendered with respect to the placement of a loan facility
        with AHC.
      The Companys remaining operating costs for the
        period consisted primarily of legal and accounting fees relating to the
        preparation of the Companys 10KSB, interest charges on its
        debt, and investor relations costs.
      The Company had income from other items of $1,173 for
        the first quarter of 2003 compared to a net loss of

20

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$20,724 for same period in fiscal 2002. The income from other
  items for the first quarter of 2003 consisted of interest earned on promissory
  notes. The loss of $20,724 in the same period of fiscal 2002 was a result of
  a recorded impairment in the Companys investments of $27,420.

Liquidity and Capital Resources  2003 Compared to 2002

Since inception, we have been dependent on investment capital
  and debt financing from our shareholders as our primary source of liquidity.
  We have not generated any revenue or income from our operations. We had an accumulated
  deficit at March 31, 2003 of $6,668,027.

During the first quarter of 2003, our cash position increased
  to $13,998 from $1,422. We used $96,941 of cash for operations in the first
  quarter of fiscal 2003 compared to $83,785 in the same period of fiscal 2002.
  We also used $888,506 in investing activities in the first quarter of 2003,
  which consisted of advances made and accrued interest charged to Flowstar for
  the period. The net cash used in operating and investing activities was financed
  by $1,031,244 from financing activities, resulting in a net increase in our
  cash position for the period of $12,576. The cashflow from financing activities
  is primarily a result of loan advances made to the Company by AHC (See Part
  II, Item 2).

During the year we issued stock valued at $34,525 in settlement of accounts payable.

The Company had $2,104,573 in total liabilities at March 31,
  2003 compared to $1,109,082 at the end of fiscal 2002. The increase is a result
  of loan advances made by AHC to the Company during the first quarter of 2003.
  The loan advances from AHC were used to fund working capital requirements of
  the Company as well as to advance approximately $880,000 to Flowstar.

ITEM 3. CONTROLS AND PROCEDURES

Under the supervision and with the participation of our management,
  including our principal executive officer and principal financial officer, we
  have evaluated the effectiveness of the design and operation of our disclosure
  controls and procedures within 90 days of the filing date of this quarterly
  report, and, based on their evaluation, our principal executive officer and
  principal financial officer have concluded that these controls and procedures
  are effective. There were no significant changes in our internal controls or
  in other factors that could significantly affect these controls subsequent to
  the date of their evaluation.

Disclosure controls and procedures are our controls and other
  procedures that are designed to ensure that information required to be disclosed
  by us in the reports that we file or submit under the Exchange Act is recorded,
  processed, summarized and reported, within the time periods specified in the
  Securities and Exchange Commissions rules and forms. Disclosure controls
  and procedures include, without limitation, controls and procedures designed
  to ensure that information required to be disclosed by us in the reports that
  we file under the Exchange Act is accumulated and communicated to our management,
  including our principal executive office and principal officer, as appropriate
  to allow timely decisions regarding required disclosure.

PART II  OTHER INFORMATION

ITEM 1.        LEGAL PROCEEDINGS

CTI and Cobratech, a subsidiary of our Company, have been
  sued by Rajesh Taneja in the Supreme Court of British Columbia, Canada. Mr.
  Taneja is a past contractor of Cobratech. The action was commenced on December
  20, 2001. Mr. Taneja is suing the company for unspecified damages for wrongful
  dismissal. The Company disputes the claim and has filed a Statement of Defence
  denying the allegations of wrongful dismissal. We intend to vigorously defend
  the claim. No trial date has been set, and no Examinations for Discovery have
  been conducted.

21

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ITEM 2.        CHANGES
  IN SECURITIES AND USE OF PROCEEDS

Effective December 2, 2002, we have agreed to issue 2,033,493
  shares of our common stock at an agreed price of $0.50 per share, for an aggregate
  total of $1,016,746, for the settlement of debts owed by our Company. The price
  of $0.50 was significantly in excess of the trading price of our stock at the
  time of the transaction, and was an agreed price between the parties. 608,394
  shares will be issued to a company beneficially holding 12.76% of our common
  stock, including the exercise of certain warrants. Mr. John Anderson, our President,
  CEO and Director, is to receive 215,484 shares. As of the date hereof, the shares
  have not yet been issued. We are planning to claim an exemption from registration
  under Regulation S when the shares are issued.

On March 4, 2003, we issued 143,035 shares of our common stock
  to a past employee of Sentry as a settlement of debt of $28,661 and 29,320 shares
  of our common stock to a consultant as a settlement of debt of $5,864. The common
  stock issued under these transactions was valued at $0.20, being the midpoint
  of the bid and ask on the date of the transaction. We are claiming an exemption
  from registration under Regulation S.

On May 12, 2003 our Board of Directors recinded the issuance
  of 1,000,000 common shares to each of Mr. Donald Farnell and Mr. John Anderson,
  previously approved on October 31, 2002. The decision to recind the proposed
  issuance was approved by Mr. Farnell and Mr. Anderson. Mr. Farnell was our President,
  CEO and Chairman until his resignation on March 31, 2003. Mr Anderson is our
  Interim President and CEO, and a Director. The Board also recinded the issuance
  of 80,000 common shares to a consultant, previously approved on February 28,
  2003. None of these shares were issued as of May 12, 2003. The original transactions
  on October 31, 2002 and February 28, 2003 were previously described in our Form
  10 KSB filed on April 30, 2003.

We did not pay any commissions for the above noted transactions.

On January 28, 2003 we entered into a loan agreement with
  AHC Holdings Inc., a private Alberta company wholly owned by Comeau Industries
  Ltd., of which Mr. Alfred Comeau is the majority shareholder. Mr. Comeau was
  appointed a Director of our Company on March 5, 2003. Under the terms of the
  loan agreement, AHC agreed to make available up to $2,000,000 Canadian dollars
  or approximately $1,370,000. As at May 9, 2003, we had borrowed $1,605,008 Canadian
  dollars, or approximately $1,140,000. All advances under the loan are secured
  by promissory notes. We have agreed to pay interest to AHC at the rate of 15%
  per annum. The principal and all accrued and unpaid interest are due on December
  31, 2005. In connection with the loan, we issued AHC a warrant to purchase up
  to 1,000,000 shares of our common stock exercisable at a price of $0.15 per
  share until March 6, 2006. We also issued a warrant to Terry Mereniuk, of Edmonton,
  Alberta, for his services to the Company for a finders fee for the loan from
  AHC. The warrant entitles Mr. Mereniuk to purchase up to 500,000 shares of our
  common stock exercisable at a price of $0.15 per share until March 6, 2006.
  Mr. Mereniuk is a Director and CFO of our Company. We are claiming an exemption
  from registration under Regulation S for the warrants.

ITEM 3.        DEFAULTS UPON SENIOR
  SECURITIES

On January 15, 2003, $100,000 was due under a loan agreement
  dated July 3, 2001 with Sentry, our 90.7% controlled subsidiary. The loan was
  from an unrelated party and is secured by certain property of Sentry. The amount
  remains unpaid as of the date hereof. The lender has not yet issued a demand
  for payment. Two significant shareholders of our Company have personally guaranteed
  payment of the $100,000.

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

We submitted no matters to a vote of security holders during
  the quarter ended March 31, 2003.

ITEM 5.        OTHER INFORMATION

On February 28, 2003, Mr. Donald E. Farnell resigned as our acting Chief Financial Officer. On March 5, 2003, Mr. Alfred Comeau and Mr. Terry Mereniuk were appointed to our Board of Directors. On March 31, 2003, Mr. Farnell resigned his positions as
Director, Chairman, President and CEO. On April 9, 2003, Mr. John Anderson, a Director of our Company, was appointed interim President and CEO, replacing Mr. Farnell. Mr.

22

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Terry Mereniuk was appointed Chief Financial Officer. On April
  24, 2003, Mr. Anderson was appointed Secretary/Treasurer.

On May 12, 2003, weappointed Mr. Brad Belke as our
  Chief Technical Advisor to our Board of Directors. Mr. Belke is a Vice President
  for Flowstar.

ITEM 6.        EXHIBITS AND REPORTS
  ON FORM 8-K.

(a) Pursuant to Rule 601 of Regulation SB, the following exhibits are included herein or incorporated by reference.

|Exhibit                                                                                                                                                                                                                                                                                                                                                                      |             |                                                                                                                                                                                                                                                                                                                                               
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Number                                                                                                                                                                                                                                                                                                                                                                       | Description
|                                                                                                                                                                                                                                                                                                                                                                             |             |                                                                                                                                                                                                                                                                                                                                               
|2.0*                                                                                                                                                                                                                                                                                                                                                                         |             | Share Purchase Agreement dated, for reference, December
        20, 2000, between the persons defined as Vendors and as listed in Schedule
        "A" to the agreement, Cobratech Industries Inc., and Unique Bagel Co.,
        Inc. (Incorporated by reference to Exhibit 2.0 to the Companys Form
        10-KSB filed on April 17, 2001)
|                                                                                                                                                                                                                                                                                                                                                                             |             |                                                                                                                                                                                                                                                                                                                                               
|2.1*                                                                                                                                                                                                                                                                                                                                                                         |             | Share Purchase Agreement dated, for reference, January
        18, 2002, between the Company, Neil Cox and Leila Lolua, for the purchase
        of 7,160,000 shares of Sentry Telecom Systems Inc. in exchange for 500,000
        shares of the Company                                                                                     
|                                                                                                                                                                                                                                                                                                                                                                             |             |                                                                                                                                                                                                                                                                                                                                               
|2.2*                                                                                                                                                                                                                                                                                                                                                                         |             | Financial Statements of Cobratech for the period
        ending October 15, 2000, and year ending December 31, 1999. (Incorporated
        by reference to Form 8-K filed on March 27, 2001)                                                                                                                                                  
|                                                                                                                                                                                                                                                                                                                                                                             |             |                                                                                                                                                                                                                                                                                                                                               
|2.3.1*                                                                                                                                                                                                                                                                                                                                                                       |            
|Loan Agreement dated January 28, 2003 between the
        Company and AHC Holdings Ltd. Addendum to the Loan Agreement dated February
        6, 2003 providing AHC a warrant to purchase 1,000,000 shares of the Companys
        common stock at $0.15 per share as a bonus for providing the Loan. (Incorporated
        by reference to Form 8-K filed April 28, 2003).
|                                                                                                                                                                                                                                                                                                                                                                             |             |                                                                                                                                                                                                                                                                                                                                               
|2.3.2*                                                                                                                                                                                                                                                                                                                                                                       |             | Finders Fee Agreement dated January 28, 2003
        between the Company and Terry Mereniuk, under which Mr. Mereniuk was granted
        a warrant to purchase 500,000 shares of the Companys common stock
        for $0.15 per share. (Incorporated by reference to Form 8-K filed April
        28, 2003).                              
|                                                                                                                                                                                                                                                                                                                                                                             |             |                                                                                                                                                                                                                                                                                                                                               
|2.3.3*                                                                                                                                                                                                                                                                                                                                                                       |             | Share Purchase Warrants dated March 6, 2003 issued
        to Terry Mereniuk and AHC Holdings Ltd. (Incorporated by reference to
        Form 8-K filed April 28, 2003).                                                                                                                                                                      
|                                                                                                                                                                                                                                                                                                                                                                             |             |                                                                                                                                                                                                                                                                                                                                               
|2.3.4*                                                                                                                                                                                                                                                                                                                                                                       |             | Letter of Intent to purchase a 51% equity interest
        in Flowstar and Flowray dated February 6, 2003 (Incorporated by reference
        to Form 8-K filed on April 28, 2003).                                                                                                                                                            
|                                                                                                                                                                                                                                                                                                                                                                             |             |                                                                                                                                                                                                                                                                                                                                               
|2.3.5*                                                                                                                                                                                                                                                                                                                                                                       |             | Amendment to the Letter of Intent dated April 9,
        2003 extending deadlines for certain cash payments (Incorporated by reference
        to Form 8-k filed on April 28, 2003).                                                                                                                                                          
|                                                                                                                                                                                                                                                                                                                                                                             |             |                                                                                                                                                                                                                                                                                                                                               
|3.1.1*                                                                                                                                                                                                                                                                                                                                                                       |             | Articles of Incorporation of Unique Bagel Co., Inc.
        a Delaware corporation (now CTI Diversified Holdings, Inc.) dated August
        11, 1998. (Incorporated by reference to Exhibit 2.2 of the Companys
        Form 10SB12G, filed with the SEC on March 24, 2000.)                                                                
|                                                                                                                                                                                                                                                                                                                                                                             |             |                                                                                                                                                                                                                                                                                                                                               
|3.1.2*                                                                                                                                                                                                                                                                                                                                                                       |             | Certificate of Amendment of the Certificate of Incorporation
        of Unique Bagel Co., Inc., a Delaware corporation dated January 10, 2001,
        changing the name Unique Bagel to CTI Diversified Holdings, Inc. ((incorporated
        by reference to Exhibit 3.1.2 to the Companys Form 10-KSB filed
        on April 17, 2001)    

23

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|3.1.3* |  | Memorandum of Incorporation of Cobra
        Energy Ltd., a British Columbia corporation, dated October 24, 1997. (Incorporated
        by reference to Exhibit 3.1.3 to the Companys Form 10-KSB filed
        on April 17, 2001)                                                                   
|------ |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       |  |                                                                                                                                                                                                                                                                                                       
|3.1.4* |  | Altered Memorandum of Cobra Energy Ltd.,
        a British Columbia corporation, dated September 7, 1999, changing the
        name Cobra Energy Ltd., to Cobratech Industries Inc. ((incorporated by
        reference to Exhibit 3.1.4 to the Companys Form 10-KSB filed on
        April 17, 2001)
|       |  |                                                                                                                                                                                                                                                                                                       
|3.2*   |  | Bylaws of Unique Bagel Co., Inc. (now
        CTI Diversified Holdings, Inc., a Delaware corporation), dated August
        11, 1998. (Incorporated by reference to Exhibit 3.1of the companys
        Form 10SB12G, filed with the SEC on March 24, 2000)                                           
|       |  |                                                                                                                                                                                                                                                                                                       
|3.2.1* |  | Bylaws/Articles of Cobra Energy Ltd.,
        a British Columbia corporation, dated October 24, 1997. (Incorporated
        by reference to Exhibit 2.0 to the Companys Form 10-KSB filed on
        April 17, 2001)                                                                                 
|       |  |                                                                                                                                                                                                                                                                                                       
|10.1*  |  | Audit committee charter (incorporated
        by reference to the Companys Form 10-KSB filedon April 29, 2003).                                                                                                                                                                                      
|       |  |                                                                                                                                                                                                                                                                                                       
|10.2*  |  | Audit committee terms of reference (Incorporated
        by reference to the Companys Form 10-KSB filed on April 29, 2003).                                                                                                                                                                          
|       |  |                                                                                                                                                                                                                                                                                                       
|16.0*  |  | David J. Maxwell Ltd - Letter re: Change
        in Certifying Accountant (incorporated by reference to the Companys
        Form 10-KSB filed on April 17, 2001)                                                                                                                                    
|       |  |                                                                                                                                                                                                                                                                                                       
|21.1*  |  | Schedule of Subsidiaries of CTI Diversified
        Holdings, Inc. (incorporated by reference to Exhibit 21.1 to the Companys
        Form 10-KSB filed on April 17, 2001)                                                                                                                           
|       |  |                                                                                                                                                                                                                                                                                                       
|23.1*  |  | Consent of Moore Stephens Ellis Foster
        Ltd. Chartered Accountants (incorporated by reference to the Companys
        Form 10-KSB filed on April 17, 2001)                                                                                                                                    

* Previously filed

Reports on Form 8-K

April 29, 2003reporting the loan from AHC, the loan
  to Flowstar and Flowray, the proposed transaction to acquire an interest in
  Flowstar and Flowray, the resignation of Mr. Donald Farnell, the appointment
  of Mr. John Anderson as President & CEO, and the appointment of Mr. Terry
  Mereniuk as CFO.

24

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the
  Securities Exchange Act of 1934, the registrant has duly caused this report
  to be signed on its behalf by the undersigned, thereunto duly authorized, on
  this 15 day of May, 2003.

|                   | CTI DIVERSIFIED HOLDINGS INC.                       
|------------------ | ----------------------------------------------------
|                   |                                                     
|Date: May 15, 2003 | By: /s/ John Anderson                               
|                   |                                                     
|                   | John Anderson, Chief Executive Officer and Director 
|                   |                                                     
|                   |                                                     
|                   | By: /s/ Terry Mereniuk                              
|                   |                                                     
|                   | Terry Mereniuk, Chief Financial Officer and Director

25

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CERTIFICATIONS

|I, John Anderson, certify that:
|-------------------------------
|                               
|1.                             
|                               
|2.                             
|                               
|3.                             
|                               
|4.                             
|                               
|                               
|                               
|                               
|                               
|                               
|                               
|5.                             
|                               
|                               
|                               
|                               
|                               
|6.                             

Date: May 15, 2003

|/s/John Anderson                
|--------------------------------
|                                
|John Anderson, President and CEO

26

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|I, Terry Mereniuk, certify that:
|--------------------------------
|                                
|1.                              
|                                
|2.                              
|                                
|3.                              
|                                
|4.                              
|                                
|                                
|                                
|                                
|                                
|                                
|                                
|5.                              
|                                
|                                
|                                
|                                
|                                
|6.                              

Date: May 15, 2003

|/s/ Terry Mereniuk                     
|---------------------------------------
|                                       
|Terry Mereniuk, Chief Financial Officer

27

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CERTIFICATION OF CHIEF FINANCIAL OFFICER and CHIEF EXECUTIVE
  OFFICERPURSUANT TO 
  18 U.S.C. SECTION 1350, 
  AS ADOPTED PURSUANT TOSECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Report of CTI Diversified Holdings,
  Inc. (the Company) on Form 10QSB for the quarter ended March 31,
  2003, as filed with the Securities and Exchange Commission on the date hereof
  (the Periodic Report), I, John Anderson, Chief Executive Officer
  and I, Terry Mereniuk, Chief Financial Officer of the Company, certify, pursuant
  to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
  Act of 2002, that:

1.
      
      the Periodic Report fully complies with the requirements
        of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and2.
      
      the information contained in the Periodic Report fairly
        presents, in all material respects, the financial condition and results
        of operations of the Company.


|Dated: May 15, 2003 | /s/ John Anderson  
|------------------- | -------------------
|                    |                    
|                    | John Anderson, CEO 
|                    |                    
|                    | /s/ Terry Mereniuk 
|                    |                    
|                    | Terry Mereniuk, CFO

28

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