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

                                  FORM 10-KSB/A

                                   (Mark One)

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

                   For the fiscal year ended December 31, 2003

        |_| TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES
                              EXCHANGE ACT OF 1934

              For the transition period from ________ to __________

                         Commission file number 0-30119


                             DNAPRINT GENOMICS, INC.
                 (Name of small business issuer in its charter)


                                      UTAH
         (State or other jurisdiction of incorporation or organization)


                                   59-2780520
                      (I.R.S. Employer Identification No.)


                     900 COCOANUT AVENUE, SARASOTA, FL 34236
               (Address of principal executive offices) (Zip Code)


                                 (941) 366-3400
                           (Issuer's telephone number)


         Securities registered under Section 12(b) of the Exchange Act:

                                      NONE


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

                                (Title of class)
                          COMMON STOCK, PAR VALUE $.01

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

Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. |_|

State issuer's revenues for its most recent fiscal year. $709,638

State the aggregate market value of the voting and non-voting common equity held
by non-affiliates computed by reference to the price at which the common equity
was sold, or the average bid and asked price of such common equity, as of a
specified date within the past 60 days. (See definition of affiliate in Rule
12b-2 of the Exchange Act.) As of December 30, 2004, the aggregate market value
of the voting and non-voting common equity held by non-affiliates was
$11,446,923.

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date. As of December 30, 2004: 953,910,272.
<PAGE>

                       DOCUMENTS INCORPORATED BY REFERENCE

If the following documents are incorporated by reference, briefly describe them
and identify the part of the Form 10-KSB (e.g., Part I, Part II, etc.) into
which the document is incorporated: (1) any annual report to security holders;
(2) any proxy or information statement; and (3) any prospectus filed pursuant to
Rule 424(b) or (c) of the Securities Act of 1933 ("Securities Act"). The list
documents should be clearly described for identification purposes (e.g., annual
report to security holders for fiscal year ended December 24, 1990).

NONE.

TRANSITIONAL SMALL BUSINESS DISCLOSURE FORMAT (CHECK ONE):

Yes |_| No |X|


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                                TABLE OF CONTENTS

PART I
   Item 1.  Description of Business
   Item 2.  Description of Property
   Item 3.  Legal Proceedings
   Item 4.  Submission of Matters to a Vote of Security Holders

PART II
   Item 5.  Market for Common Equity and Related Stockholder Matters
   Item 6.  Management's Discussion and Analysis or Plan of Operation
   Item 7.  Financial Statements
            Independent Auditors' Report
            CONSOLIDATED BALANCE SHEET AS OF DECEMBER 31, 2003
            CONSOLIDATED STATEMENTS OF OPERATIONS
            CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
            CONSOLIDATED STATEMENTS OF CASH FLOWS
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
   Item 8.  Changes In and Disagreements With Accountants on Accounting and
            Financial Disclosure
   Item 8A. Controls and Procedures
   Item 8B. Other Information

PART III
   Item 9.  Directors, Executive Officers, Promoters and Control Persons;
            Compliance With Section 16(a) of the Exchange Act
   Item 10. Executive Compensation
   Item 11. Security Ownership of Certain Beneficial Owners and
            Management and Related Stockholder Matters
   Item 12. Certain Relationships and Related Transactions
   Item 13. Exhibits and Reports on Form 8-K
   Item 14. Principal Accountant Fees and Services

SIGNATURES

EX-10.42    Amendment to Funding Agreement
EX-23       Consent of Pender Newkirk & Company
EX-31.1     Section 302 Certification of CEO
EX-31.2     Section 302 Certification of CFO
EX-32.1     Section 906 Certification of CEO
EX-32.2     Section 906 Certification of CFO


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                                     PART I

                           FORWARD-LOOKING STATEMENTS

Although the "forward-looking statements" safe harbor does not apply to our
company because we issue "penny stock" and are exempt therefrom pursuant to
Section 27A(b)(1)(C) of the Securities Act of 1933, as amended, and Section
21E(b)(1)(C) of the Securities Exchange Act of 1934, as amended, certain
statements contained in this filing are "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995, such as
statements relating to financial results and plans for future business
development activities, and are thus prospective. These statements appear in a
number of places in this Annual Report and include all statements that are not
statements of historical fact regarding intent, belief or current expectations
of the Company, its directors or its officers with respect to, among other
things: (i) the Company's financing plans; (ii) trends affecting the Company's
financial condition or results of operations; (iii) the Company's growth
strategy and operating strategy; and (iv) the declaration and payment of
dividends. The words "may," "would," "could," "expect," "estimate,"
"anticipate," "believe," "intend," "plans," and similar expressions and
variations thereof are intended to identify forward-looking statements.
Investors are cautioned that any such forward-looking statements are not
guarantees of future performance and involve risks and uncertainties, many of
which are beyond the Company's ability to control. Actual results may differ
materially from those projected in the forward-looking statements as a result of
various factors. Among the key risks, assumptions and factors that may affect
operating results, performance and financial condition are changes in
technology, fluctuations in the Company's quarterly results, ability to continue
and manage its growth, liquidity and other capital resources issues,
competition, fulfillment of contractual obligations by other parties and the
other factors.

ITEM 1. DESCRIPTION OF BUSINESS.

BUSINESS DESCRIPTION

DNAPrint genomics, Inc. ("we" or the "Company"), which was organized for the
purpose of investing in all forms of investments was initially incorporated
under the laws of the State of Utah on January 3, 1983 as Lexington Energy, Inc,
and subsequently changed its focus to human genome sciences. We are a genomics
based science company focused on the sale of genetic testing products and
services. Our products are targeted toward three distinct markets:
pharmacogenomics, forensics and consumer products. We currently have three
products available for sale, ANCESTRYbyDNA 2.0 and 2.5, in the consumer products
market and DNAWitness 2.0 in the forensic market. We have no currently available
products for the pharmacogenomics market. We are currently developing products
for all three markets, which are in various stages of progress. We also provide
contract genotyping services to the contract service outsourcing market.

We are working to establish a technology platform, named ADMIXMAP, for the
identification of functional human genes through the measurement of population
structure. This system is currently for internal use solely by our scientists
and we do not generate revenue from any sales thereof. This platform of products
will allow us to measure population structure as it was inherited from our
ancestors. We can also measure certain effects of an individual's inherited
traits in relationship to the general population of people such as Native
American, East Asian, sub-Saharan African and Indo-European and any combination
of those four major population groups. We have identified characteristic markers
for these population groups and they are called Ancestry Information Markers or
"AIMS". For example, an inherited trait is eye color, hair color or skin color
as is the ability of an individual's body metabolism to respond to a particular
medication. By linking a drug's measurable response in an individual to our
AIMs, we are able to predict whether or not an individual may or may not respond
to a medication. There are many complex mathematical formulas involved in this
analysis and we plan to keep this technology and information closely guarded,
patented when appropriate and to sell our products and services to consumers,
physicians and law enforcement.

Currently, we have 12 full time employees and we expect to increase our
personnel in accordance with our operating plan. In addition to our full time
employees, composed of scientific and production staff, sales, administrative
and executive management, we outsource employees for specific services on an as
needed basis. These services include additional statistical geneticists,
mathematicians, and programmers, an advisory committee in medical and population
genetics, and general business and administrative support.

We continue to devote substantially all of our efforts to initiating and
developing our planned principal operations. While sales of our genealogy
product, ANCESTRYbyDNA(TM), are increasing, our forensic product,
DNAWitness(TM), has just been introduced in the marketplace. Our
pharmacogenomics products are still in development, and genotyping services are
in the initial introductory stage.

In addition, although we discuss distinct markets for our products, management
does not manage or make decisions regarding allocation of our assets and
resources or in assessing our performance based on segments. At this time, our
resources, including assets and personnel, are commingled among all areas of our
business.

HISTORY AND DEVELOPMENT OF THE BUSINESS 2001-2003

We began with the discovery and development of our TruLine products -
TruSeq(TM), SNiPscan(TM) and TruSpin(TM). We were actively engaged in human
identification analysis and used our proprietary TruLine products to reduce the
cost of producing a genetic profile to less than 50% of the standard price. Our
strategy was to sell our proprietary reagent to geneticists at universities,
hospitals and commercial laboratories working on genotyping projects. The
reagent kit was designed to save researchers money in reagent costs. Companies
that sold the reagents, however, made advances in their own reagents, which
lowered the cost and ultimately negated the benefit of using our products. The
technology was thus abandoned.


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<PAGE>

In 2001, Dr. Tony Frudakis, our founder, teamed with other newly hired
scientists to conduct research to develop new genomics products with consumer,
forensic and pharmacogenomics applications. Lack of funding required a reduction
in the amount of research conducted. We implemented cost cutting measures to
conserve cash. In spite of these hardships; we were able to continue our
research and development efforts on a reduced and limited basis throughout most
of 2002 and 2003.

During 2002, our Board of Directors began a search for new leadership. After an
exhaustive and difficult search for a new CEO/President, Mr. Richard Gabriel
finally agreed to accept the position without requiring immediate cash
compensation. Because we did not have cash available to pay Mr. Gabriel's
salary, he agreed to enter into an employment contract for one year that granted
him 30,000,000 shares of our stock in lieu of immediate cash compensation.

As CEO /President, Mr. Gabriel agreed to seek additional executive management,
particularly a Chief Financial Officer, a Chief Operating Officer and a Chief
Medical Officer and to locate a firm to represent us in raising investment
capital sufficient to build and sustain the business over the next 2-3 years.
Mr. Gabriel and the new management team have successfully completed these goals.

Mr. Gabriel hired our Chief Financial Officer and Chief Operating Officer,
Monica Tamborini, and our Chief Medical Officer, Dr. Hector J. Gomez. In May of
2003, Mr. Gabriel also convinced Ms. Tamborini and Dr. Gomez to agree to work
initially without requiring immediate cash compensation. They agreed to enter
into employment contracts with us for one year in return for stock grants of
20,000,000 and 25,000,000 shares respectively.

With executive management in place, we next developed a strategic plan to
achieve our short term goal of securing financing and our longer term goals of
growth and stability. Where prior management saw partnering and licensing
arrangements as the way to success, new management's view was that growth would
occur with proven success. Management has emphasized demonstrating that our
current products are viable, and management believes the shortest path to that
goal is through concentrating our initial sales efforts on the consumer and
forensic markets. While we expect pharmacogenomics products to outperform other
market products in the long run, their introduction to market has a longer time
horizon and requires larger investments of time, personnel and capital before
they produce revenue and generate cash flow. This is supported by the
Pharmaceutical Manufacturers Association which has confirmed that the drug
development process is lengthy and expensive.

Concurrently with building our new business plan, management sought investment
bankers to represent us in our search for financing. In April 2003, we engaged
an investment banking firm to assist us in our efforts to raise debt and/or
equity capital. In December 2003, we successfully agreed to place $8,000,000 of
our securities over approximately a 20-month period. Prior to completing this
transaction, we had received funds from earlier private offerings. Together,
these transactions gave us the critically required capital to fund our ongoing
operations until our new financing was in place.

During 2003, we continued to evolve from a research based company to revenue
generating genomic products company. Management continues to review investment
opportunities for our consumer products, and the forensic and pharmacogenomics
markets. Should opportunities mature, management will bring them before our
Board for investment consideration. We continue to seek new products;
technologies and relationships that can help build the markets and revenues we
seek to capture.

THE PHARMACOGENOMICS MARKET

Testing individuals to predict their genetic pre-disposition to drug response is
known as pharmacogenomics. Pharmacogenomics enables physicians to tailor drug
therapies (formulation and dosage) for individuals based on their genetic
composition. By using predictive response genetic testing, rates of therapeutic
success are increased and rates of adverse side effects are decreased.

Historically, drugs have been developed and approved by the FDA for the overall
population only. Drug discovery companies are now beginning to use
pharmacogenomics technologies to develop drugs that are suitable for individuals
or groups of individuals based upon their overall genetic composition. The
advent of genomics and genomic based diagnostic testing has brought about the
possibility of personalized medicine.

In a recent release, the FDA announced that pharmaceutical and
bio-pharmaceutical companies should consider genetic testing during clinical
trials and for post approval drug monitoring (go to www.fda.gov and search
'pharmacogenomics'). Pharmaceutical and bio pharmaceutical companies will need
to incorporate genetic testing in their drug discovery, clinical development as
well as post drug approval monitoring in the very near future.

The FDA estimates that 2.4 million patients had adverse drug reactions in 2000,
leading to the deaths of more than 125,000 patients. As part of the FDA's
mandate to reduce the number of deaths caused by adverse drug reactions, on
January 31, 2003 the FDA released an initial statement of initiatives related to
pharmacogenomics.

Within the next 12 months there will likely be a clearer path to market for
pharmacogenomic tests linked to drugs. Moreover, with greater FDA recognition of
pharmacogenomics, we believe the pharmaceutical industry is likely to accelerate
its rate of adoption for pharmacogenomics tests.


                                       5
<PAGE>

After its initial statement in January 2003, the FDA issued a more recent
guideline in November 2003. Titled "Guidance for Industry Pharmacogenomic Data
Submissions," we believe this guideline offers FDA support for pharmaceutical
companies developing drugs using genetic testing and genomic research for drug
approvals. Under the guideline, if a genetic test is new or is not widely
accepted, then its use is 'voluntary' to the drug's submission. If a test is
'validated and accepted' then the guidelines suggest its inclusion in the
submission. In both cases, our products and services can provide a valuable tool
for drug development and drug discovery management. We help identify patients
that might not respond favorably to a new medication, and thus eliminate those
patients from the treatment or clinical trial. This testing will improve the
drug's efficacy and reduce its toxicity, increasing the drug's chances for
meeting FDA requirements and ultimate approval.

The FDA continues to have an overriding influence in the pharmacology market and
its movements. Healthcare payers and government officials, however, including
Congress (on behalf of patients), are recognized forces in the market.
Increasingly, pharmaceutical companies must validate a drug's efficacy and cost
effectiveness in order for it to remain on lists of approved, reimbursable drugs
of healthcare payers (pharmacy benefit managers, managed care, Medicaid,
Medicare, and commercial insurers). For example, Pfizer recently agreed to
provide disease management, (defined as all secondary activities involved in the
diagnosis, prevention and treatment of diseases, beyond primary therapeutic
treatments), services to Florida Medicaid recipients in order to have its full
slate of drugs on the State Medicaid program's formulary. This deal is likely
the forerunner of similar initiatives by payers and pharmaceutical companies to
increase drug response rates and reduce drug costs through increased diagnostic
accuracy. Using a genomics test to determine the most appropriate drug and
dosage can lead to reduced health plan costs, while genomics testing can predict
a patient's drug response and minimize the high cost related to adverse drug
reactions.

GROWTH STRATEGIES FOR THE PHARMACOGENOMIC MARKET

By leveraging our proprietary technologies, we are positioned to serve the
growing compliance and operational needs of pharmaceutical companies.

A recent article in MedAd News in June 2003 titled, "From Blockbusters to
Multibusters" highlighted the first successful use of pharmacogenomics to obtain
the approval of a drug. Genetech's Herceptin(TM), according to IMS Health
sources, would not have made it to the market had not the company's scientists
discovered the HER-2 receptor which is found in 15-20% of the population. The
overall success rate of the drug in metastatic breast cancer in combination with
Taxol is just 6%. But with the HER-2 test to identify the patient, the drug's
efficacy is now 100%. Sales of the drug are projected to approach $400 million
in 2003.

This article highlights the potential explosion of pharmacogenomics and drug
approval within the pharmaceutical industry. If drugs are approved faster, the
current 400 drug targets that represent about $380 billion in sales could leap
to 4,000 targets with sales approaching $3 trillion by 2020.

We can, through research and development, and over time, identify the genes
involved with a patient's positive response to a drug. Once the genes have been
identified, researchers are then able to find the receptors coupled to those
genes; thereby providing a predictive test to determine those patients who will
respond positively to the drug. In addition, we can identify the genes that are
involved with the rejection of the drug and from that find the receptors coupled
to those genes. Both choices open new opportunities for drug development and the
treatment of existing diseases. To date, best estimates put the time somewhere
between one and two years and at a cost of $500,000 to $750,000 per gene set.

Additional benefits and future growth potential can result from:

ENHANCED DRUG MARKETING- By using our products and services, pharmaceutical
companies may enhance the effectiveness of their marketing campaign resulting in
improved profitability. The overlap of demographic segments and genetic
predispositions offers a compelling opportunity for focused drug marketing.
Armed with studies that indicate a drug is most effective within certain
demographic segments, pharmaceutical companies can more effectively engage in
target marketing. Although we do believe that pharmaceutical companies may
enhance the effectiveness of their marketing campaign by using our products and
services, as of December 31, 2003, no pharmaceutical companies have used our
products or services with respect to demographic segments, genetic
predispositions and drug marketing and achieved such results.

               1 Excerpts taken from Legg Mason equity research.

EXPANDED DRUG PATENT LIFE - There is also potential that packaging a drug with a
genomic diagnostic test may extend the drug's patent life. Pharmaceutical
companies that are struggling to find replacements for their aging drugs could
benefit from a patent extension. Although we do believe that pharmaceutical
companies can prepare a genomic diagnostic test and extend a drug's patent life,
as of December 31, 2003, no pharmaceutical companies have used our products or
services for such purpose or achieved such results. Our current technologies and
services could be utilized by a pharmaceutical company to identify and develop a
genomic diagnostic test. Alternatively, we could work with generic drug
manufacturers and assist them in developing a genetic diagnostic test for off
patent drugs. Our greatest, and possibly the most immediate, market potential is
to create a testing service for physicians and patients that will allow them to
determine if a particular medicine is right for the disease that has been
diagnosed.

INCREASED DRUG DEVELOPMENT SUCCESS RATES - By incorporating genomic variation,
clinical trials can be designed to include those patients most likely to benefit
from the proposed therapeutic product. The use of a genomics strategy has the
potential to yield improved response rates. While the number of clinical trial
participants may not be reduced, drug trial efficacy would be greatly enhanced.


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RESCUE FAILED DRUGS - A pharmaceutical company may choose to initiate new
clinical trials on drug candidates that previously failed. The failure of the
earlier trial could have been because the earlier trial was conducted on a broad
patient population. We could design a genetic test to predict patient response
which would allow a smaller, more clearly defined group of patients to be
identified for the new clinical trial; thereby enhancing the drug's efficacy and
compliance and improving the likelihood of approval within a targeted group.
Although we do believe that pharmaceutical companies can utilize our genetic
test to predict patient response, as of December 31, 2003, no pharmaceutical
companies have used our products or services for such purpose or achieved such
results. Approval may require a physician to use the test to determine if a
patient would be within the response group prior to prescribing the drug. We
believe that this strategy will lead to more drug approvals and longer product
life cycles, improving the return on capital for the pharmaceutical company and
increasing the use of our tests.

THE FORENSICS MARKET

Testing DNA to create a physical profile from crime scene DNA is a new market
based on evolving technologies. Common hereditary traits such as skin
pigmentation, eye color, hair color, earlobe attachment and height can
theoretically be predicted through analysis of DNA sequences. We believe that we
are the first to use DNA evidence to successfully profile crime scene DNA by
predicting the donor's continental genetic origin and linking that to our
photo-database gallery, providing law enforcement officers with a general
description of the donor.

The forensic market is expected to grow to $500 million in annual sales by 2005
according to Data Monitor. There are approximately 1,200,000 reported incidents
of violent crime (rape, robbery, and aggravated assault) in the U.S. each year.
In the vast majority of violent crimes, DNA evidence is left at a crime scene or
on a victim's body. Of these 1.2 million reported incidents, only about 600,000
cases result in arrests. Forensic DNA tests can enable a greater degree of
success in prosecuting violent criminals.

In addition, on March 11, 2003 Attorney General John Ashcroft announced that the
administration plans to commit $1 billion to DNA testing within the criminal
justice system over the next five years. The money will be used to develop
better genetics testing techniques, to eliminate DNA backlog of nearly 360,000
cases and to provide funds for police departments to use DNA testing more
frequently in their investigations, reducing the likelihood of wrongful
prosecution and imprisonment.

There is a recent trend in the legal system to test DNA evidence left at crime
scenes to confirm or invalidate the previous conviction of incarcerated
defendants. Our technology could be used to screen the DNA samples and
categorize them. For example, if test results shows that DNA from the crime
scene belongs to a an Indo European individual and the incarcerated individual
is an African American, that DNA would have priority for conventional testing
because the likelihood of vindication is high. In recent years there have been
more than 130 exonerations of previously convicted individuals based on DNA
evidence. With the use of DNAWitness(TM), the length of wrongful incarceration
for innocent individuals could be shortened, and, in some case, perhaps
eliminated.

FORENSIC PRODUCTS

DNAWITNESS(TM) 2.0

Law enforcement officers use this testing service to determine genetic heritage
from DNA samples obtained from crime scenes, narrowing the potential DNA donor
pool to a more focused group of likely donor candidates. This test reduces the
cost and time needed to process potential leads and ultimately, to apprehend
suspects. Current forensic DNA products in the market act like a fingerprint;
they can only be used to match DNA specimens. We have the first forensic product
that provides predictive or presumptive testing capability.

Current DNAWitness(TM) customers include medical examiner's offices, special
task forces, sheriffs' departments, and district attorney's offices and
detectives from various cities. These cities include the three largest U.S.
metropolitan areas: New York City, Los Angeles, and Chicago. To date, our
product is being used in nearly 20 crime scene investigations and cold cases.
Due to the sensitive nature and potential court proceedings associated with
investigations, we can only comment on our participation in cases once law
enforcement and prosecutors have approved the release of such information,
usually following the arrest and incarceration of a suspect. Based upon the
release of such information, we had sales from approximately 10 customers in
2003 and three of those were at reduced rates. The total revenue was
approximately $8,040. In addition, we performed approximately 32 pro bono tests
during 2003 for various agencies worldwide.

GROWTH STRATEGY IN FORENSICS

We provide a potential suspect's genetic heritage with DNAWitness(TM) 2.0. We
are investigating avenues to encourage federal, state and local governments,
crime laboratories and law enforcement agencies to use DNAWitness(TM) to help
solve cold cases, current serial killer cases and other violent crimes. We
believe DNAWitness(TM) could help revolutionize investigative procedures. By
using DNAWitness(TM) on a regular basis, witness information can be
corroborated, and where no witness is present, DNAWitness(TM) can provide a
"fuzzy sketch" of the donor, possibly reducing the cost of examining a large
donor pool and shortening the investigation.

Recently, we entered into a contract with the Lynn Peavey Company. Lynn Peavey
Company is a well recognized and highly respected supplier of crime scene
support materials to over 17,000 police and crime laboratories around the world.
Our product, DNAWitness(TM) 2.0, is now featured in the Lynn Peavey Company
catalog. We also plan to work with Lynn Peavey Company personnel to establish
and conduct seminars and training programs for detectives, crime laboratory
personnel and crime scene personnel on DNAWitness(TM).

We anticipate an increase in marketing and sales costs throughout 2004 as we
implement our marketing and sales plan to increase product awareness. We expect
to incur costs for additional sales personnel, the expenses associated with
trade shows and promotions, and our planned seminars and training programs.


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Our future plans also include seeking "ASCLD" accreditation of our laboratory
for forensics work tied to court testimony. Once accredited, we will also be
able to offer conventional DNA testing to our clients. Accreditation would allow
us to capture a portion of this market and to offer a full range of services to
our clients.

It is our intention, over time, to broaden our forensics product line.
Additional tests that we hope to add to our product line include eye and hair
color, and skin shade. Other tests that we could develop in the future include
bone mass, to predict body size, height, and detached and attached ear lobes.

THE CONSUMER PRODUCTS MARKET

There is an established market of consumers who research their genealogy and
ancestral origin. There is also a market for paternity and other tests related
to family lineage. We serve both of these consumer markets through direct sales
and independent distributors.

The consumer genealogy market is fueled by a natural desire to understand our
family lineage and our genetic heritage. The total world market is currently
estimated at $75 million and is expected to grow 5% annually. We are one of the
first companies to offer DNA tests that predict genetic heritage for this
market.

CONSUMER PRODUCTS

ANCESTRYBYDNA(TM) 2.0

We introduced our first product in the genealogy market in late 2002.
ANCESTRYbyDNA(TM) 2.0 determines genetic heritage and is marketed to consumers
interested in determining their BioGeographical Ancestry ("BGA"). We have
identified DNA sequences that are more prevalent in people from one continental
region or regions than another. Using complex statistical algorithms, the test
can determine, with confidence, to which of the major continental regions
-sub-Saharan African, Indo-European, East Asian or Native American - a person
belongs, as well as the relative proportions of each.

ANCESTRYBYDNA(TM) 2.5

We introduced the newest version of our genealogy product line in February,
2004. ANCESTRYbyDNA(TM) 2.5 increases the 71 marker assay of version 2.0 to 175
markers, improving accuracy over version 2.0. During its first month of
production, we have sold 100 ANCESTRYbyDNA(TM) 2.5 tests.

GROWTH STRATEGY IN CONSUMER PRODUCTS

Without a significant investment in sales or marketing, we have generated
considerable interest in ANCESTRYbyDNA(TM) 2.0. We have sold, on average, 13
ANCESTRYbyDNA(TM) tests per day during 2003. An average of 9.5 of those test
sales have come from our website and 4 tests per day from our distributors.
Sales of ANCESTRYbyDNA(TM) for 2003 were approximately $477,677. We do not
currently have specific information on the average price. However, in general
distributors, pricing is $99 and customer pricing is $158. This is for
ANCESTRYbyDNA(TM) 2.0 only. A later version was introduced in 2004 and has a
different pricing structure.

Promotional efforts to date have been fruitful but sporadic. We have been
featured on or in ABC's Prime Time Thursday, the CBS Evening News with Dan
Rather, The New York Times, Miami Channel 10 WPLG, UPI, US News and World
Report, Popular Science Magazine, Tampa's Fox Channel 13 News, Germany's ZDF
News Channel, The Australian Broadcasting Corporation and The Sarasota-Bradenton
Herald Tribune KTTV Fox 11 in LA, ABC Tampa, Howard Stern's radio show, PBS WEDU
Sarasota, USA Today, and Dallas Morning News.

In order to build consistent sales, we have begun to implement formal sales and
marketing plans, including advertising and promotional campaigns. Implementing
these plans results in increased expenses for personnel, advertising, promotion,
and the collateral materials associated with these programs.

We have entered into a license agreement with Pearl Street Software. It will
provide a link within their new release of Family Tree Legends software allowing
our customers to upload their ANCESTRYbyDNA(TM) results to a secure web page.
Other family members will have the ability to add their test results, too.
Together, family members can "pool" their results and create and construct a
genetic family tree. Beta site tests are being conducted, and we anticipate
launch of the service in late 2004.

THE CONTRACT SERVICE OUTSOURCING MARKET

We provide universities and drug discovery companies the ability to screen for
genes responsible for certain disease states and to incorporate genetic
targeting in their drug discovery or disease pathology studies. The
pharmaceutical and drug discovery segments of the outsourcing market continue to
grow. In 1999, the US drug outsourcing market stood at $5 billion and was
expected to grow to $20 billion by 2002. Actual market value for 2002 was $18
billion, slightly lower than original expectations.


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As more researchers look to genotyping as a means of studying disease
progression and patients' reaction to medications, our outsourcing opportunities
should increase. We have one of approximately a dozen known Ultra High
Throughput SNP machines in the world. The Beckman Ultra High Throughput machine
is used to perform contract Genotyping, ANCESTRYbyDNA(TM) and DNAWitness(TM)
tests as well as our research projects, including, but not limited to,
OVANOME(TM). Eight machines are solely dedicated to internal research at
pharmaceutical companies and universities; one works exclusively on veterinary
applications; and two are believed to be owned by Orchid, the original inventor
and producer of the equipment.

CONTRACT GENOTYPING

Contract genotyping is the process of reading a genetic sequence and identifying
differences in the sequence letters. For example, in comparing diseased tissue
with normal tissue, we are able to see the differences in the sequence letters.
This information helps researchers understand how human differences are
expressed at the gene level. They can then search for and develop preventative
treatment and effective therapeutic courses to alleviate disease symptoms.

We use our laboratory capacity to provide university research laboratories and
other private companies with contract genotyping services. We perform all of the
work in our facilities to protect our customers' intellectual property and trade
secrets. We retain no intellectual property and do not contribute our
intellectual property to this screening service. We performed approximately
$218,936 of contracted genotyping services during 2003 with approximately three
customers.

GROWTH STRATEGY FOR CONTRACT GENOTYPING

We continue to pursue customers within the contract genotyping market. To date,
our customers have come to us either through client referrals or our general
website. In the future, we plan to concentrate our genotyping services on
specific diseases, including cancer, neurological disorders, and heart disease.
By concentrating on specific diseases, we hope to develop an expertise that will
attract customers in those areas requiring external assistance and additional
research capacity. Through this strategy, we will continue to build our
reputation as a reliable and cost effective supplier of high quality data using
our UHT SNP machine.

RESEARCH AND DEVELOPMENT

The primary objective of our near term research and development efforts in
pharmacogenomics will be to expand our library of predictive drug response tests
to include multiple therapeutic areas including commonly used FDA approved drug
therapies. We currently have two pharmacogenomic tests in development,
Ovanome(TM) and Statinome(TM). In addition, it is our goal to continue to
expand, improve and broaden our current products, ANCESTRYbyDNA(TM) and
DNAWitness(TM) through research and development. Although our products are
diverse and address different market areas and needs, the base technology is the
same. Research in one area often provides benefit to our other products.
Research spending in 2001 was approximately $1.9 million and for 2002 was
approximately $2.2 million, increasing to $2.7 million in 2003. We will continue
to support research and development because it is a vital component of our
overall strategy for sustained growth.

OVANOME(TM)

Our scientists are working on a genomic-based diagnostic tool to match ovarian
cancer patients with the most suitable form and dose of chemotherapy,
particularly, Taxol treated patients. Currently, cancer patients, especially
women with breast and uterine cancer are treated with anti-cancer drugs whose
efficacy is known in terms of population averages. In reality, individual cancer
patients exhibit unpredictable and unique responses to virtually all commonly
used chemotherapeutic compounds. Individual genetic differences have long been
suspected to play a role in this variable drug response. For cancer patients,
decisions about treatment regimes are often fateful, and second chances at
treatment are usually unsuccessful. A better understanding of the relationship
between genes and related chemistries and drug response can replace the current
trial and error process of chemotherapy treatment. This new drug prescription
strategy can help guide physicians and patients toward the optimal treatments at
the outset of therapy.

We have completed our initial phase of research and development on a test to
determine genetic predisposition for response to the Taxol-Carboplatin drug
combination. The Taxol-Carboplatin drug combination therapy is a treatment for
breast, ovarian, prostate and other cancers. In FDA clinical trials the
Taxol-Carboplatin drug combination therapy demonstrated efficacy in only 60-70%
of patients. In preliminary trials, our therapeutic response tests were 95%
effective in distinguishing Taxol-Carboplatin responders from non-responders.

We had previously identified a number of SNPs and certain AIMs associated with
variable Taxol/Carboplatin response in ovarian cancer patients. The markers were
useful for stratifying ovarian cancer patients into two groups: patients that
will respond to Taxol as intended, with essentially no risk of non-response, and
patients that carried a 50/50 risk of not responding. Since these results were
obtained, we have expanded our screen by an additional 11,000 AIMs/SNPs, and we
are still evaluating this data. After this data is evaluated and integrated with
our previous data, the next step is to blindly challenge the predictive power of
the markers and methods on other ovarian cancer patients that have been treated
or are being treated with Taxol/Carboplatin. We intend to extend these trials to
other Taxol derivatives and combinations to improve the overall market
penetration of our test.

We are identifying the next clinical group to establish a data set of patients
whose test information can be reviewed by the FDA either in a filing for a 510K
device application or as laboratory testing service provided to physicians. A
510K is an approval from the FDA that allows the sale of a diagnostic test in
the United States. FDA's review and approval process normally takes one to two
years from the start of the clinical trials to final approval. The length of a
clinical trial averages a year or more. The data obtained from the trial will
form the basis for a 510K filing. Once trials are completed, the data is
compiled, the report is written and finally the 510K is submitted for FDA review
and approval. FDA rules regarding pharmacogenomics testing are evolving, and
management believes that a 510K filing may not be required in order to perform
the service. We are seeking additional guidance from the FDA on this issue.


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Initial research results will be the basis for our continued development. We
must expand our studies and address other aspects of drug treatment performance
that will likely be required before Ovanome(TM) could be used in the clinic to
assist chemotherapy decisions.

We are developing a clinical trial for Ovanome(TM). We must validate our
research findings further through a clinical trial in order to commercialize
Ovanome(TM). The trial will use our test to predict trial participants'
responses to the Taxol and Carboplatin drug therapy. Our Chief Medical Officer,
Dr. Hector Gomez, will lead the clinical development process and expects to
enroll 250 patients in the trial.

STATINS AND ACE INHIBITORS

We are developing a test, Statinome(TM), for the cardiac drug market. Statins
are drugs used to treat patients at increased risk of heart disease. Statin
drugs are a category of drugs identified by the pharmaceutical industry which
are derived from a natural product source such as yeast or fungal extraction.
The Statins are a category of chemical compounds that, among other applications,
are used to treat high cholesterol levels in humans. A number of Statin drugs
exist, including Pravacol, Lipitor and Crestor. Approximately 50% of the U.S.
population is at risk of heart disease as a result of high cholesterol and
related hormonal and other chemical imbalances. While Statins have demonstrated
effectiveness at cholesterol reduction, reportedly decreasing incidence of heart
disease by 10.3% from 1990 to 1994, adverse reactions from statins can include
liver damage, kidney failure and a form of advanced muscular degeneration.
Approximately 2-5% of patients must discontinue statin use due to these adverse
side effects. If accepted for commercial use, we believe Statinome(TM) will
reduce substantially, the risks associated with adverse response.

Our current study includes two adverse side effects associated with statins,
liver and adverse muscular response. These two side effects comprise most of the
side effects associated with statins. We have identified numerous markers
associated with these potentially life-threatening responses. When scientists
look at markers on the DNA strand, it helps them establish a location along the
DNA strand which can be used as a reference or a checkpoint to determine if the
DNA matches other DNA samples obtained from different people. We have performed
initial research in conjunction with a group of physicians to study and classify
patients taking statins. The research combined liver toxicity studies with our
AIMs to determine and identify patient response.

After the liver studies, we conducted research on the second adverse side
effect, adverse muscular response. We have obtained hundreds of DNA samples from
individuals who have experienced adverse muscular (myopathological) response to
the two statin drugs currently on the market, Lipitor and Zocor. We screened
these samples at over 12,000 AIMs spread throughout the human genome. The 12,000
AIMs represents an increase of 11,000 over our original screenings.

We will continue to evaluate the data we have already received and seek clinical
patients to develop a comprehensive retrospective test. Our goals are to broaden
our products' reach across all statins, not just Lipitor and Zocor, and to
evaluate all potential toxic side effects relating to AIMs/SNPs.

In addition to statins, we are focusing on coronary diseases and cardiac
disorders and the associated drugs to treat those diseases. Among the most
widely used treatment protocols are a set of compounds known as ACE Inhibitors.
These compounds along with other medications are used to treat cardiac patients.
While statins are used to treat patients before they express a cardiac problem,
ACE inhibitors are used to treat patients after they express a cardiac problem,
including a heart attack or angina. ACE inhibitors show a wide range of
toxicities among patient groups, and we suspect their application to a broad
patient group can be stratified, providing patients a higher rate of efficacy in
treatment at reduced toxicities.

DNA WITNESS

In forensics, it is our intent to offer our products as a suite that includes
genetic heritage, eye and hair color tests. The tests will also be sold
separately as Heritage (genetic heritage), Retinome(TM) (eye color) and
Retinome-HA(TM) (hair color). Although hair and eye color remain the most
challenging research areas in genomics, we have successfully predicted, with 85%
accuracy, the eye color of individuals based on a donor DNA sample. Our goal is
to reach an accuracy rate of 95% or higher before commercializing this test.

We have filed a patent application for Retinome(TM), a test for the inference of
eye color from DNA. The SNP based method for testing eye color is the first of
its kind. The method employs complex math and human pigmentation gene SNP
combinations to predict human eye color accurately and sensitively. We have been
working over the past year to update the Retinome(TM) panel of SNPs in order to
predict eye color shade and actual eye colors with greater accuracy.

Currently, we have the ability to determine the first three distinctions, blue,
brown or some other color. Validation experiments necessary to define precise
accuracy continue. If test performance is satisfactory, we will begin selling
the test to the forensics community as an integrated component of the
DNAWitness(TM) 3.0 suite. Once we have reached this objective, our focus will
turn to increasing the bands of color from 2 to 3 or 4 distinct colors.


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We are attempting to accomplish for human hair color what has been accomplished
for eye color, through the development of the Retinome-HA(TM) test. If
successful, Retinome-HA(TM) will be available as an integrated component of the
DNAWitness(TM) 3.0 suite. We have also begun studies to add skin shade to our
expanded product line, but it will require further testing and experimentation
to advance this application.

We hope to enlist universities and other personnel to help us collect DNA
samples from across the globe. We have initiated plans to expand our scientific
advisory board to include other scientists who will actively contribute to our
effort in increasing the number of BGA sub-categories from our current four, to
as many as 20.

ANCESTRYBYDNA

In February 2004, we launched our 2.5 version of ANCESTRYbyDNA(TM), increasing
accuracy and the number of markers from 71 to 175 from ANCESTRYbyDNA(TM) 2.0. We
are developing ANCESTRYbyDNA(TM) 3.0, which will expand the resolution of
ANCESTRYbyDNA(TM) 2.5 by including the inference of population affiliations
within a continent and proportionality (proportion or range of a given ancestry
marker). ANCESTRYbyDNA(TM) 2.5 can predict mixture of continental origin, but
cannot predict mixtures of ancestral composition within a continent. For
example, ANCESTRYbyDNA(TM) 2.5 might indicate that someone is of Indo-European
descent, while ANCESTRYbyDNA(TM) 3.0 might indicate that someone is 60% Northern
European and 20% Indo-European and 20% Middle Eastern descent. If successful,
ANCESTRYbyDNA(TM) 3.0 will provide additional accuracy and a broader application
in the genealogy market.

These added benefits will assist our other two product categories, forensics and
pharmacogenomics, by broadening our abilities to identify and search for new
associations in phenotype descriptors for forensics and improving our
understanding of drug response across a wider population.

We are also adding features to our product including a 'genetic family tree'
capability that allows all family members willing to participate, to take our
test and add their data to the family genetic tree. If we are able to collect
enough associations, the data may help us predict the genetic profile of a
deceased ancestor. Currently we are able to predict only one generation back
with 70-80% statistical accuracy. This may be helpful to individuals wishing to
know more about a lost parent, grandparent or great grand parent, depending upon
how many generations are still living.

PATENTS

We have filed claims for international and domestic patent protection. The
patents will help ensure protection of our bioinformatics platforms, analytical
software, genome maps and genetic classifiers in forensic, consumer products,
and pharmacogenomics applications. The most significant patent applications
cover the bioinformatics platforms and genome maps. Other applications describe
the mathematical process of finding complex genetic information and the actual
processes that find the gene variants responsible for specific complex genetic
traits.

Two of our patents, 'Compositions...Pigmentation' and 'Compositions...Statin',
have entered National Phases and are pending review and we believe, approval in
the U.S. and designated countries. The pigmentation patent is important because
it includes the methods and compositions for determining skin shade, eye color
or any other pigmentation application. Our Statin patent includes the use of
method for determining a person's ability to respond favorably to a particular
Statin. We have covered all Statins and the use of our AIMs and any assay
developed that might use those markers in the development of the assay.

Additional national phases will begin for the other patents during the second
quarter of 2004 and will likely run through 2005. As discoveries warrant, we
will continue to apply for future additional patents. Listed below is our
current patent pending applications.

PENDING PATENT APPLICATIONS

      Efficient Methods and Apparatus for
        High-Throughput Processing of Gene Sequence Data        US2003/0171875A1
      Methods for the Identification of Genetic                 US2003/0171878A1
        Features for Complex Genetics Classifiers                   WO 03/048318
      Methods and Apparatus for use in Genetics                     WO 03/048999

      Classification Including Classification Tree
        Analysis
      Methods and Apparatus for use in Complex
        Genetics Classification                                     WO 03/048372
        Based on Correspondence Analysis
        and Linear-Quadratic Analysis
      Composition and Methods for the Inference                     US10/156,995
        of Pigmentation Traits                                    PCT/US02/16789
                                                                   AU2002/312112
                                                                     CA2,448,569
                                                                    EP02739467.5
                                                                   JP2003/500216


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<PAGE>

      Compositions and Methods for Inferring                        US10/188,359
        A Response to a Statin                                    PCT/US02/20847
                                                                   AU2002/316485
                                                                    EP02746794.3
                                                                   JP2003/509083
      Single Nucleotide Polymorphisms and
        Combinations Thereof Predictive of                        PCT/US02/38345
        Paclitaxel Responsiveness in Cancer Patients
      Compositions and Methods for Inferring                        US10/644,594
        Ancestry                                                  PCT/US03/26229

LICENSING AND PARTNERING AGREEMENTS

We have the rights to license, sell or partner our products exclusively within
the United States and abroad, subject to the terms of an option with Orchid
Biosciences. On October 24, 2001, we signed an Option agreement with Orchid
Biosciences of Princeton NJ, a leader in high-throughput genotyping. Under the
terms of the agreement, Orchid provided an up-front payment of $350,000 for the
option to negotiate exclusively for a license to co-develop and/or
co-commercialize certain products in the future. We will continue to negotiate
agreements with universities and businesses to apply our proprietary products
and resources to other product development projects.

COMPETITION

Our expertise finding and modeling AIMs form the cornerstone of our strategy to
penetrate the consumer products, forensic and pharmacogenomics markets with our
genomic testing products. We are one of the first companies to develop
infrastructure for this purpose. Due to limited competition in the field of
complex genomics classification to date, these market opportunities remain
attractive. Other companies and researchers seeking to develop genomic
classification or diagnostic products to bring to market are currently screening
hundreds of thousands to millions of markers across the genome. This process is
not commercially viable for many markets, due to cost.

By developing unique genome maps, however, we allow researchers to efficiently
and cost effectively discover and decipher complex, common genetic traits. Our
AIMs are novel because they allow a genome screen to be accomplished with as few
as 2,000 markers, making it cost effective to develop genomic based tests.

We compete against a limited number of companies in pharmacogenomics, including
Genaissance, Seryx, Variagenics, and Genset; deCODE Genetics, Celera Genomics,
Incyte Genomics, Orchid BioSciences, and Sequenom. The latter two principally
offer tools and services for sequencing and scoring SNPs, while Celera and
Incyte are involved primarily in creating SNP databases. DeCODE Genetics focuses
on gene discovery, drug target validation, as well as pharmacogenomic analysis
through use of its proprietary informatics system and its Icelandic Health
Sector Database. Genset also has an interest in pharmacogenomics through its
development of genomic markers using its proprietary technology platform;
however, it has dedicated its resources to internal drug discovery and
development in the areas of central nervous system and metabolic disorders.

In addition, we face competition in these areas from pharmaceutical,
biotechnology and diagnostic companies, academic and research institutions and
government and other publicly-funded agencies, both in the United States and
abroad, most of which have substantially greater capital resources, research and
development staffs, facilities, manufacturing and marketing experience,
distribution channels and human resources than do we. Our key competitors
include, but are not limited to, PPGx, Inc., a leading international developer
and supplier of research-based pharmacogenomics services and products which
recently announced the launch of its GeneTrials(TM) Bioinformatics Platform.
PPGx is a joint venture of PPD, Inc. (NASDAQ: PPDI) and Axys Pharmaceuticals,
Inc. (NASDAQ: AXPH). Also, large pharmaceutical companies have their own
internal research and development efforts that could surpass or eliminate our
technology from the market.

Entities have developed or plan to develop databases containing gene sequence,
genomic variation or other genomic information and are marketing or plan to
market their data to pharmaceutical and biotechnology companies or plan to make
freely available their databases. Said entities include, but are not limited to:

o Genaissance Pharmaceuticals: a provider of pharmacogenomic support services,
including high-throughput sequencing.

o Evolutionary Bioinformatics: Bioinformatics and genomics consulting,
specializing in comparative genomics, functional genomics and model organisms.

o deCODE Genetics: Advanced bioinformatics and high throughput genotyping
facility

o Celera Genomics: Drug discovery systems and services.

o Cellular Genomics: A biotechnology company focused on the discovery and
validation of novel drug targets.

o Correlogic Systems: Developing tools and processes for proteomic and
genomic-based clinical diagnostic systems and new drug discovery.


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o Epoch Biosciences: Technologies useful in genetic research, diagnostics, drug
development, infectious disease detection, prenatal testing and population
screening to assess risk of disease or to predict response to drugs.

o Eragen Biosciences: Designs, develops, and markets functional genomic and
drug/diagnostic discovery platform products, and technologies to the
pharmaceutical, biotechnology and agro-biology industries.

These competitors may discover, characterize or develop important technologies
applying genomics before us or our customers that are more effective than those
technologies which we develop or which our customers develop. Additionally,
these competitors may obtain regulatory approvals for their drugs and
diagnostics more rapidly than our customers for our developed proprietary
products and services do, any of which could limit our ability to market
effectively our developed proprietary products and services. If our patent
applications are not awarded or if our competitors develop and receive approval
of patents that supersede our applications, we could be forced to cease the
development of our products, services and technologies.

Similarly, we have competitors in the field of forensics that includes the
following list of companies:

o Orchid- The original inventors of Single Nucleotide Polymorphism analysis
machines and SNP technologies through its Orchid Cellmark division is considered
one of the premier independent DNA testing laboratories in forensics. This
competitor not only has the scientific background but the financial means and
expertise to create a product that eliminates our service, DNAWitness and
RETINOME from the forensics market.

o FSS- A United Kingdom based firm that processes nearly 85% of the UK's
criminal DNA samples also has the ability to create a product that is
competitive to our products and is exploring entering into the U.S. market as
well as other parts of Europe and Asia.

o Bode Systems, A division of Choicepoint- A significant competitor to the FSS
and Orchid has the ability to create and market a similar product to our
DNAWitness and RETINOME and eliminate us from the market.

o FBI, Quantico Laboratories- The Federal Bureau of Investigation (FBI) has
significant development resources and is contracting with Orchid and others to
develop identity tests that will help them identify potential DNA donors from
crime scene DNA. The bureau also invests federal research money on its own
research to develop testing process and procedures that it would approve for law
enforcement.

Forensic DNA and consumer DNA technologies have undergone, and are expected to
continue to undergo, rapid and significant change. Our future success will
depend in large part on maintaining a competitive position in these fields.
Others may rapidly develop new technologies that may result in our tests or
technologies becoming obsolete before we recover the expenses that we incur in
connection with the development of these products. Our products and services
could become obsolete if our competitors offer less expensive or more effective
discovery and development technologies, including technologies that may be
unrelated to genomics.

ITEM 2. DESCRIPTION OF PROPERTY.

We currently lease our operating facility at 900 Cocoanut Avenue, Sarasota,
Florida from JSD Sarasota LLC. This lease runs until May 31, 2005 and we have
the option to renew the lease for an additional five year term. The lease
requires monthly rent of approximately $5,400 (plus sales tax). The building
consists of approximately 4,000 square feet of laboratory and office space.


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                                  RISK FACTORS

BEFORE DECIDING TO INVEST IN US OR TO MAINTAIN OR INCREASE YOUR INVESTMENT, YOU
SHOULD CAREFULLY CONSIDER THE RISKS DESCRIBED BELOW, IN ADDITION TO OTHER
INFORMATION CONTAINED IN THIS REPORT. EACH OF THE FOLLOWING RISKS COULD CAUSE
OUR BUSINESS, FINANCIAL CONDITION AND RESULTS OF OPERATIONS TO BE MATERIALLY
HARMED. THESE RISKS COULD CAUSE THE TRADING PRICE OF OUR COMMON STOCK TO DECLINE
AND YOU COULD LOSE ALL OR PART OF YOUR INVESTMENT.

              RISKS RELATED TO OUR FINANCIAL CONDITION AND BUSINESS

REGULATORY OVERSIGHT OF OUR DEVELOPED PROPRIETARY PRODUCTS AND SERVICES MAY
INCREASE THE COSTS WE WILL INCUR TO MARKET OUR PRODUCTS AND SERVICES AND
ADVERSELY AFFECT OUR ABILITY TO MARKET OUR PRODUCTS AND SERVICES.

Currently, there is limited Food and Drug Administration, or FDA, regulation of
genetic tests. Within the field of personalized health and medicine,
governmental and other entities may enact patient privacy and healthcare laws
and regulations that may limit the generation and use of genomic variation data.
"Genomic variation data" is the information obtained when our scientists search
the gene for differences across the entire human genome for changes and
variations. We are looking for clues or information that would be able to link
to other biological information such as human disease, drug metabolism, eye
color or genetic ancestry. We have found, as have many other genetic scientists
across the globe, that the variation in the amount of information in certain
regions of the human genome is important to discovery.

If our products, services or technologies have already been used by the industry
and we are merely supplying an alternative source of supply, there is a
significant risk that our products, services or technologies do not meet the
standards set out by the Food and Drug Administration upon inspection of that
product, service or technology in the course of the FDA evaluating an
application for review or during a review inspection by the FDA. Also, customers
of our products, services or technologies will view or evaluate the product,
service or technology and may consider it too risky or not in compliance with
industry standards. In addition, the FDA may believe that certain action should
or should not be taken in the adoption of a new technology, service or product
and the industry may believe that the guidelines for applying this new
technology, product or service are too severe. In this case, the pharmaceutical
industry participants may decide not to use that product, service or technology
for fear that they will not be able to maintain the standards necessary to pass
an FDA review or inspection.

To the extent that FDA laws and regulations limit the use of our products and
services or impose additional costs on our customers, we may be unable to market
effectively our developed proprietary products and services and we may not
generate sufficient revenue to sustain our operations. Furthermore, we may be
directly subject to regulations as a provider of diagnostic information. A
diagnosis is the evaluation of a patient or a sample to determine what the
status of the patient might be. The information that results from this
evaluation is called 'diagnostic information' and would include such information
as height, weight, sex, age, blood pressure, sugar levels and many other pieces
of data. All of this information is usually recorded by the doctors into a
patient's health record and is reviewed and studied to determine the next course
of treatment for the patient.

To the extent that these regulations restrict the sale of our products and
services or impose other costs, we may be unable to provide our products and
services to our customers on terms sufficient to recover our expenses.

OUR SUCCESS WILL DEPEND, IN PART, ON HOW RAPIDLY THE PHARMACEUTICAL AND
BIOTECHNOLOGY INDUSTRY IMPLEMENTS GUIDANCE FROM THE U.S. DEPARTMENT OF HEALTH
AND THE FDA REGARDING A POTENTIAL EXPANSION OF REGULATION OF OUR INDUSTRY.
WITHOUT THIS IMPLEMENTATION BY THE PHARMACEUTICAL AND BIOTECHNOLOGY INDUSTRY, WE
MAY BE UNABLE TO MARKET EFFECTIVELY ANY TEST WE MAY HAVE AS WELL AS ANY OF OUR
SERVICES AND WE MAY NOT GENERATE SUFFICIENT REVENUE TO SUSTAIN OUR OPERATIONS.

The Secretary's Advisory Committee on Genetic Testing, an advisory panel to the
Secretary of the U.S. Department of Health and Human Services, has recommended
that the FDA expand its regulation of genetic testing to require FDA approval
for all new genetic tests and labeling of genetic tests. If the FDA adopts this
recommendation, it may require that we, or our customers, apply for FDA approval
as a prerequisite to marketing genetic tests that incorporate our intellectual
property. If the FDA were to deny any application of this kind, it could
adversely affect our business and we may be unable to generate sufficient
revenue to sustain our operations.

The FDA has only once required that a physician must have genomic variation
information determined about a patient before the doctor prescribes a drug. In
this one instance, the FDA has stipulated that this requirement can be fulfilled
with either gene expression information or genomic variation information. The
human genome is composed of four simple chemical compounds, A, C, T and G or
Adenine, Cytosine, Thymine and Guanine as found in the Merck Index of chemical
compounds. The Merck Index is a reference book found in most public libraries
which is compiled to provide more technical information on specific chemical
compounds and provide additional information on the discovery, use and
application of such chemical compounds, including, without limitation, A, T, C
and G. These four compounds align in a double stranded spiral or helix that is
coiled up inside the human cell. Helix is a term used by scientists to describe
in a visual way what they believe DNA looks like if we were able to see it with
the naked eye. However, DNA is microscopic and can only be indirectly seen
through laboratory methods. A helix is similar to the appearance of a corkscrew
which is used to open a bottle of wine. A double helix looks like two corkscrews
which are side by side. The cell uses the DNA to produce other compounds and
genetic scientists and biologists refer to the production of these proteins,
sugars, hormones, lipids and other chemical compounds vital to the healthy
functions of the cell as 'gene expression'. This means is that the DNA is either
turned on or turned off. When a gene is turned on it is expressing or producing
certain chemical compounds or causing other parts of the cell to produce
chemical compounds that are needed by the cell. When the cell has had enough of
a particular compound and doesn't need anymore of the compound, the gene is
often turned off and stops producing it. Scientists look directly at the gene
and also study the data obtained from testing the compounds that are produced by
the cell or looking at the gene expression information in a data set and
analyzing that information for hidden or related information that might help us
understand the function of the gene or section of a gene.


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On November 3, 2003, the FDA issued draft guidance that encourages drug and
biologic developers to conduct pharmacogenomic tests during drug development and
clarified how the FDA will evaluate the resulting data. "Pharmacogenomic tests"
are clinical laboratory tests of all kinds to determine whether a drug is
working or not working on a patient that is experiencing a particular illness or
expressing a disease. It has only been recently that genetic scientists have
been able to link genetic testing to the performance of a drug. The term often
used within the pharmaceutical industry to describe the testing of individuals
for their genetic influences on the effectiveness of a drug or more precisely is
there something in a person's genes that would either enhance or prevent the
treatment of that individual's disease with a particular drug and this is often
called 'pharma-co-genomic tests' or 'pharmacology and genomics' or the study of
pharmaceuticals and genetics.

The FDA guidance provides specific criteria and recommendations on the
submission of pharmacogenomic data in connection with Investigational New Drug
Applications, New Drug Applications and Biological License Applications. Before
any company or individual can treat a single human patient with a new chemical
entity often referred to as a NCE or a new biological entity, referred to as the
NBE, scientists must first prove that the potential drug is safe within existing
treatment regimes. For example, new chemical entities used to treat cancer might
be allowed to be much more toxic to other cells in the body than would a
treatment for other less lethal diseases. Scientists then perform a pre-clinical
or before filing for permission to the FDA to treat human patients and package
all the information into an application with the FDA called the 'Investigational
New Drug Application' or IND. The FDA has the right to request additional
testing prior to human testing or it may reject or approve the IND application
to perform further testing on humans using either the New Chemical Entity or the
New Biological Entity as described in the IND application. In addition,
"Biological License Applications" are the licensing of biological compounds.

The draft FDA guidance includes information on the type of data needed and how
the FDA will or will not use such data in regulatory decisions. The FDA asked
for voluntary submissions of research information in order to gain experience as
the field of pharmacogenomics evolves. In addition, the FDA held a workshop in
November 2003 to discuss its draft guidance and stated that the agency plans in
the near future to issue final guidance on the co-development of a
pharmacogenomic test and drug. Our success will depend, in part, on how rapidly
the pharmaceutical and biotechnology industry implements the guidance and,
accordingly, the validity of our test and services as a basis for identifying
genomic variation and for correlating drug response with genomic variation.
Without this implementation by the pharmaceutical and biotechnology industry, we
may be unable to market effectively any test we may have as well as any of our
services and we may not generate sufficient revenue to sustain our operations.

PUBLIC OPINION ON ETHICAL ISSUES RELATED TO THE CONFIDENTIALITY AND APPROPRIATE
USE OF GENETIC TESTING COULD REDUCE THE POTENTIAL MARKETS FOR OUR PRODUCTS AND
SERVICES, WHICH COULD PREVENT US FROM GENERATING SUFFICIENT REVENUE TO SUSTAIN
OUR OPERATIONS.

Public opinion on ethical issues related to the confidentiality and appropriate
use of genetic testing results may influence governmental authorities to call
for limits on, or regulation of the use of, genetic testing. In addition,
governmental authorities or other entities may call for limits on, or regulation
of the use of, genetic testing or prohibit testing for genetic predisposition to
certain conditions, particularly for those that have no known cure. The
occurrence of any of these events could reduce the potential markets for our
products and services, which could prevent us from generating sufficient revenue
to sustain our operations.

For example, the FDA has approved a medication for use in African Americans
called BilDil that was developed by a pharmaceutical company called NitroMed.
Recently, articles have appeared accusing the FDA and NitroMed of 'racial
discrimination' and claim that no drugs should be developed using genetic
testing that might separate out individuals by 'race, color or creed', without
regard to the benefit which might be caused for the African American patient.
According to such critics, the potential harm in the form of increased
discrimination far outweighs the benefits. Several noteworthy genetic scientists
have also voiced their opinions that our technology and technologies similar to
those developed by NitroMed and others are discriminating and should not be
developed or approved by our Federal, State or local governments.

IF WE DO NOT SUCCESSFULLY DISTINGUISH AND COMMERCIALIZE OUR DEVELOPED
PROPRIETARY PRODUCTS AND SERVICES, WE WILL NOT ATTRACT A SUFFICIENT NUMBER OF
CUSTOMERS. ACCORDINGLY, WE MAY BE UNABLE TO COMPETE SUCCESSFULLY WITH OUR
COMPETITORS OR TO GENERATE REVENUE SIGNIFICANT TO SUSTAIN OUR OPERATIONS.

Numerous entities are attempting to identify genomic variation predictive of
specific diseases and drug response and to develop products and services based
on these discoveries. We face competition in these areas from pharmaceutical,
biotechnology and diagnostic companies, academic and research institutions and
government and other publicly-funded agencies, both in the United States and
abroad, most of which have substantially greater capital resources, research and
development staffs, facilities, manufacturing and marketing experience,
distribution channels and human resources than do we. Our key competitors
include, but are not limited to, PPGx, Inc., a leading international developer
and supplier of research-based pharmacogenomics services and products which
recently announced the launch of its GeneTrials(TM) Bioinformatics Platform.
PPGx is a joint venture of PPD, Inc. (NASDAQ: PPDI) and Axys Pharmaceuticals,
Inc. (NASDAQ: AXPH). Also, large pharmaceutical companies have their own
internal research and development efforts that could surpass or eliminate our
technology from the market.


                                       15
<PAGE>

These competitors may discover, characterize or develop important technologies
applying genomics before us or our customers for our developed proprietary
products and services that are more effective than those technologies which we
develop or which our customers for our developed proprietary products and
services develop. Additionally, these competitors may obtain regulatory
approvals for their drugs and diagnostics more rapidly than our customers for
our developed proprietary products and services do, any of which could limit our
ability to market effectively our developed proprietary products and services.
If our patent applications are not awarded or if our competitors in the field of
genetic research as it applies to our technologies, products and services
develop and receive approval of patents that supersede our applications, we
could be forced to cease the development of our products, services and
technologies.

Some companies and governments are marketing or developing a number of databases
and informatics tools to assist participants in the healthcare industry and
academic researchers in the management and analysis of genomic data.
"Informatics tools" is a term used by scientists to describe software, computer
programs or mathematical programs that analyze data sets or collected
information that is stored in data files. Such computer programs can take an
apparently meaningless block of numbers that are recorded from a laboratory
experiment and evaluate trends, look for statistical relationships and group or
segregate the numbers according to their levels of importance to the scientist.
They are tools to evaluate information. Our competitors have developed or plan
to develop databases containing gene sequence, genomic variation or other
genomic information and are marketing or plan to market their data to
pharmaceutical and biotechnology companies or plan to make freely available
their databases. Said entities include, but are not limited to:

o Genaissance Pharmaceuticals: a provider of pharmacogenomic support services,
including high-throughput sequencing.

o Evolutionary Bioinformatics: Bioinformatics and genomics consulting,
specializing in comparative genomics, functional genomics and model organisms.

o deCODE Genetics: Advanced bioinformatics and high throughput genotyping
facility

o Celera Genomics: Drug discovery systems and services.

o Cellular Genomics: A biotechnology company focused on the discovery and
validation of novel drug targets.

o Correlogic Systems: Developing tools and processes for proteomic and
genomic-based clinical diagnostic systems and new drug discovery.

o Epoch Biosciences: Technologies useful in genetic research, diagnostics, drug
development, infectious disease detection, prenatal testing and population
screening to assess risk of disease or to predict response to drugs.

o Eragen Biosciences: Designs, develops, and markets functional genomic and
drug/diagnostic discovery platform products, and technologies to the
pharmaceutical, biotechnology and agro-biology industries.

In addition, numerous pharmaceutical and biotechnology companies, either alone
or in collaboration with our competitors, are developing genomic research
programs that involve the use of information that can be found in these
databases. Furthermore, companies have technologies for using genetic variation
in diagnostics and in the drug development process and have collaborations with
companies employing these technologies.

Genomic technologies have undergone, and are expected to continue to undergo,
rapid and significant change. Our future success will depend in large part on
maintaining a competitive position in the genomics field. Others may rapidly
develop new technologies that may result in our test or technologies becoming
obsolete before we recover the expenses that we incur in connection with the
development of these products. Our developed proprietary products and services
could become obsolete if our competitors offer less expensive or more effective
drug discovery and development technologies, including technologies that may be
unrelated to genomics.

WE ALSO FACE SERIOUS COMPETITION FROM COMPETITORS IN THE FORENSIC DNA TESTING
MARKET, CONSUMER DNA PRODUCTS MARKET AND THE CONTRACT SERVICES OUTSOURCING
MARKET WHICH WE ARE ALSO A PARTICIPANT. ACCORDINGLY, WE MAY BE UNABLE TO COMPETE
SUCCESSFULLY WITH OUR COMPETITORS IN SAID MARKETS TO GENERATE REVENUE
SIGNIFICANT TO SUSTAIN OUR OPERATIONS.

In the forensic DNA testing market, consumer DNA products market and contract
services outsourcing market, we have introduced new products in the last year
and improved our flagship product, ANCESTRYbyDNA, part of the consumer DNA
market, by upgrading it from a 2.0 version with 76 marker sets to our
ANCESTRYbyDNA 2.5 test with 171 marker sets. Additionally, we have increased our
ability to include DNA sampling from Northern European, Middle Eastern,
Mediterranean and Indo by introducing EURO-DNA 1.0. However, sales have not
improved as dramatically as expected as we have also increased our pricing of
our product from $199 to $249 for the ANCESTRYbyDNA product and a combined price
of $399 for inclusion of a EURO-DNA test along with the ANCESTRYbyDNA test
should the Indo-European score be equal to or greater than 50% of the reported
four component score value.


                                       16
<PAGE>

We remain skeptical that in the consumer market which is mainly supported by
genealogy enthusiasts that our potential gain or reward from developing products
for these markets will be limited by the sudden lack of interest. Our
competitors include companies like:

o Trace Genetics- A supplier of mitochondrial DNA testing for ancestry,
paternity testing and y-chromosome testing for ancestry.

o Sorenson Genetics- One of the larger suppliers of paternity and ancestry
testing.

o DNA Testing Center, Inc. - A testing service for mitochondrial, paternity and
y chromosome testing for the consumer market and forensics market as well.

Any one of these firms could with enough research and development create a
product that is competitive to our products, ANCESTRYbyDNA and EURO-DNA, and
reduce our current sales volumes.

Similarly, we have competitors in the field of forensics that includes the
following list of companies:

o Orchid- The original inventors of Single Nucleotide Polymorphism analysis
machines and SNP technologies through its Orchid Cellmark division is considered
one of the premier independent DNA testing laboratories in forensics. This
competitor not only has the scientific background but the financial means and
expertise to create a product that eliminates our service, DNAWitness and
RETINOME from the forensics market.

o FSS- A United Kingdom based firm that processes nearly 85% of the UK's
criminal DNA samples also has the ability to create a product that is
competitive to our products and is exploring entering into the U.S. market as
well as other parts of Europe and Asia.

o Bode Systems, A division of Choicepoint- A significant competitor to the FSS
and Orchid has the ability to create and market a similar product to our
DNAWitness and RETINOME and eliminate us from the market.

o FBI, Quantico Laboratories- The Federal Bureau of Investigation (FBI) has
significant development resources and is contracting with Orchid and others to
develop identity tests that will help them identify potential DNA donors from
crime scene DNA. The bureau also invests federal research money on its own
research to develop testing process and procedures that it would approve for law
enforcement.

Forensic DNA and consumer DNA technologies have undergone, and are expected to
continue to undergo, rapid and significant change. Our future success will
depend in large part on maintaining a competitive position in these fields.
Others may rapidly develop new technologies that may result in our tests or
technologies becoming obsolete before we recover the expenses that we incur in
connection with the development of these products. Our developed proprietary
products and services could become obsolete if our competitors offer less
expensive or more effective discovery and development technologies, including
technologies that may be unrelated to genomics.

ALTHOUGH MANY OF OUR COMPETITORS PRACTICE SIMILAR TECHNOLOGIES, THEIR APPROACH
TO DATA ANALYSIS MIGHT BE COMPLETELY DIFFERENT AND MORE EFFICIENT THAN OURS.
THIS MAY CAUSE OUR CONSUMERS TO CHOOSE OUR COMPETITOR'S PRODUCTS AND SERVICES
OVER OURS AND FORCE US TO CHANGE OUR PRODUCTS AND SERVICES TO THE MORE EFFICIENT
FORM OF DATA ANALYSIS OF OUR COMPETITORS.

We evaluate the mixture of genetic inheritance and relate that information to
biological information. Another perfectly reasonable approach is to evaluate
large groups of individuals in 'pools' of DNA and look for differences or
similarities amongst the data. Our approach may prove to be too cumbersome for
the industry to adapt and in fact may not want to accept because it is 'too
personal', meaning that overall 'generic' descriptors might be more immediately
valuable to the industry than knowing whether or not a single individual will
respond favorably to a medication treatment. The 'pooled' approach is more often
the approach that many pharmaceutical companies and our competitors practice.
Additionally, our technology depends upon looking at individuals within a
population pool and therefore projecting the results of many individual samples
upon a general population that may not be clearly identified. Our competitors
rely upon self reporting descriptors such as 'African American', 'Caucasian' or
'Hispanic' to pool their DNA samples. We do not presuppose the reported identity
of an individual but rather look at their inherited genetic markers that will
tell us what group with which to associate them. When scientists look at markers
on the DNA strand, it helps them establish a location along the DNA strand which
can be used as a reference or a checkpoint to determine if the DNA matches other
DNA samples obtained from different people. This approach may not be accepted by
the industry and a more standardized method, although not as accurate, may
become the standard significantly impacting our ability to promote, sell,
license of further develop our products, services or technologies within any of
our current markets that include, consumer, forensic and pharmaceuticals.

WE MAY NEVER BECOME PROFITABLE AND CONTINUE AS A GOING CONCERN BECAUSE WE HAVE
HAD LOSSES SINCE OUR INCEPTION WHICH MAY NEGATIVELY IMPACT OUR ABILITY TO
ACHIEVE OUR BUSINESS OBJECTIVES. WE MAY NEVER BE ABLE TO REDUCE THESE LOSSES,
WHICH WILL REQUIRE US TO SEEK ADDITIONAL DEBT OR EQUITY FINANCING THAT MAY NOT
BE AVAILABLE TO US.

We were incorporated under the laws of the State of Utah on January 3, 1983 as
Lexington Energy, Inc. We may never become profitable and continue as a going
concern because we have incurred losses and experienced negative operating cash
flow since our formation. For the year ended December 31, 2003, we had a net
loss of ($7,789,905) and a working capital deficit of ($1,540,922). We expect to
continue to incur significant expenses. Our operating expenses have been and are
expected to continue to outpace revenues and result in significant losses in the
near term. We may never be able to reduce these losses, which will require us to
seek additional debt or equity financing. If such financing is available you may
experience significant additional dilution.


                                       17
<PAGE>

OUR INDEPENDENT AUDITORS HAVE EXPRESSED DOUBT ABOUT OUR ABILITY TO CONTINUE AS A
GOING CONCERN, WHICH MAY HINDER OUR ABILITY TO OBTAIN FUTURE FINANCING.

In their report dated February 20, 2004 and April 11, 2003, our independent
auditors have expressed doubt about our ability to continue as a going concern
in our financial statements for the years ended December 31, 2003 and 2002. Our
ability to continue as a going concern is an issue raised as a result of
recurring losses from operations, a stockholders' deficit, and requirement for a
significant amount of capital financing to proceed with our business plan. Our
ability to continue as a going concern is subject to our ability to generate a
profit and/or obtain necessary funding from outside sources, including obtaining
additional funding from the sale of our securities, increasing sales or
obtaining loans and grants from various financial institutions where possible.

Our business plan targets the sale of unique, proprietary, genetic testing
products and services. Our products are geared towards three distinct markets:
pharmacogenomics (the study of pharmaceuticals and genetics), forensics and
consumer products. In the consumer products market, we introduced ANCESTRYbyDNA
2.0 and 2.5. ANCESTRYbyDNA was the first service of its kind and helped people
understand what their genetic inheritance was telling them. We gave information
on the four major groups that have been demonstrated by cultural anthropologists
and archeologists to be the origins of modern men and women. These four groups,
Native American, East Asian, Indo-European and Sub-Saharan African represent our
oldest sources of ancient inherited DNA. Founder populations were identified by
anthropologists and samples were either purchased or donated to build our
initial database of samples.

In forensics, our challenge was and is considerably different that in our
genealogy market. Forensic scientists, detectives and prosecutors are on the
other hand more interested in the physical description of an individual than
they are interested in inherited genealogy relationships. We have over the
course of the last 4 years since our formation, created unique databases of
information and are continuing to create more databases to help our genealogy
customers' link to the genetic heritage and allow our forensic investigators a
more detailed description of the crime scene sample donor. DNAWitness 2.0 is our
product which we will introduce to the forensic market.

When we decided to enter into the pharmaceutical market we in some cases is
combining both the technologies we have developed for the consumer market and
the forensics market. We have no currently available products for the
pharmacogenomics market. We are currently developing products for all three
markets, which are in various stages of progress.

WE MAY NEED IMMEDIATE FUNDS AND MAY NOT BE ABLE TO OBTAIN ANY ADDITIONAL
FINANCING IN THE AMOUNTS OR AT THE TIMES THAT WE MAY REQUIRE THE FINANCING OR,
IF WE DO OBTAIN ANY FINANCING THAT IT WOULD BE ON ACCEPTABLE TERMS. ACCORDINGLY,
WE MAY HAVE TO CURTAIL OUR BUSINESS IF WE CANNOT FIND ADEQUATE FUNDING.

We currently have no legally binding commitments with any third parties to
obtain any material amount of additional equity or debt financing. However,
management intends to continue its relationship with La Jolla Cove Investors,
Inc. and it will continue under its agreement to receive funding totaling $8
million. As of September 30, 2004, La Jolla Cove Investors, Inc. (LJCI)
converted $185,000 of convertible debenture into our common stock and exercised
non-detachable warrants to purchase 2,775,000 shares of our common stock. The
combined transactions resulted in us receiving cash of $2,931,695 net of
$188,305 of cash stock issuance costs. It is anticipated that the minimum
conversions of the outstanding debenture into common stock and the related
exercise of the non-detachable warrants will fund our operating activities
through 2004 and that together with the additional funding anticipated to be
received from Dutchess, our operations will be funded through 2006.

Despite the LJCI financing, we may need immediate funds and may not be able to
obtain any additional financing in the amounts or at the times that we may
require the financing or, if we do obtain any financing, that it would be on
acceptable terms because of the following:

- we have no assets to pledge as security for the loan
- we are in poor financial condition
- we maybe viewed as a high market risk

Our failure to obtain sufficient additional financing could result in the delay
or abandonment of some or all of our development, expansion and expenditures,
which could harm our business and the value of our common stock.

WE CANNOT ASSURE THAT WE WILL HAVE IN PLACE PATENT PROTECTION AND
CONFIDENTIALITY AGREEMENTS FOR OUR PROPRIETARY TECHNOLOGY. IF WE DO NOT
ADEQUATELY PROTECT OUR INTELLECTUAL PROPERTY RIGHTS, THERE IS A RISK THAT THEY
WILL BE INFRINGED UPON OR THAT OUR TECHNOLOGY INFRINGES UPON ONE OF OUR
COMPETITOR'S PATENTS. AS A RESULT, WE MAY EXPERIENCE A LOSS OF REVENUE AND OUR
OPERATIONS MAY BE MATERIALLY HARMED.

To the extent possible, we anticipate filing patent applications for protection
on future products that we develop. We cannot assure that patents applied for
will be issued, that any current or future patents will afford us commercially
significant protection of our products or that we will have adequate resources
to enforce our patents. Inasmuch as we intend to sell our products in foreign
markets, we also intend to seek foreign patent protection for our products and
technologies. The patent laws of other countries may differ from those of the
United States as to patentability of our products and technologies, and the
degree of protection afforded. Other companies may develop similar or equivalent
products and may obtain patent or similar rights prior to its obtaining
protection. We cannot assure that our products do not and will not infringe on
the patents of others, nor can we assure that we will have the financial or
other resources necessary to successfully defend a claim of violation of
proprietary rights. We also rely on confidentiality and nondisclosure
arrangements with our employees and entities we do business with. We cannot
assure that these agreements will provide us meaningful protection.


                                       18
<PAGE>

IF WE ARE UNABLE TO RETAIN THE SERVICES OF MS. MONICA TAMBORINI OR MESSRS.
RICHARD GABRIEL, TONY FRUDAKIS AND HECTOR GOMEZ, OR IF WE ARE UNABLE TO
SUCCESSFULLY RECRUIT QUALIFIED PERSONNEL, WE MAY NOT BE ABLE TO CONTINUE
OPERATIONS.

Our success depends to a significant extent upon the continued service of Mr.
Richard Gabriel, our President and Chief Executive Officer, Ms. Monica
Tamborini, our Chief Financial Officer and Chief Operating Officer, Mr. Tony
Frudakis, our Founder and Chief Scientific Officer, and Mr. Hector Gomez, our
Chairman of the Board and Chief Medical Officer. Loss of the services of Ms.
Tamborini or Messrs. Gabriel, Frudakis, and Gomez could have a material adverse
effect on our growth, revenues, and prospective business. We have employment
agreements in place with Ms. Tamborini and Messrs. Gabriel, Frudakis, and Gomez,
which are incorporated by reference from our Form 10-KSB, filed March 30, 2004.
The Employment Agreements between us and Ms Tamborini, and us and Messrs Gabriel
and Gomez, each dated as of May 16, 2003, are for the 1-year period commencing
on May 16, 2003 and terminate on May 15, 2004, unless automatically extended
pursuant to the terms thereof. Each of the Employment Agreements were
automatically extended by written notice on May 15, 2004. The Employment
Agreement between us and Mr. Frudakis, dated as of May 8, 2000, is for the
5-year period commencing on August 22, 2000 and terminating on August 22, 2005.

We do not maintain key-man insurance on the lives of Ms. Tamborini or Messrs.
Gabriel, Frudakis, and Gomez. If Ms. Tamborini or Messrs. Gabriel, Frudakis, and
Gomez were to resign, the loss could result in loss of sales, delays in new
product development and diversion of management resources, and we could face
high costs and substantial difficulty in hiring qualified successors and could
experience a loss in productivity while any such successor obtains the necessary
training and experience. In addition, in order to successfully implement and
manage our business plan, we are dependent upon, among other things,
successfully recruiting qualified personnel who are familiar with the specific
issues facing the deciphering of complex genetic traits. In particular, we must
hire and retain experienced management personnel to help us continue to grow and
manage our business, and skilled genetic technicians to further our research and
development efforts. Competition for qualified personnel is intense. If we do
not succeed in attracting new personnel or in retaining and motivating our
current personnel, our business could be harmed.

It is expected during 2004 that our personnel requirements will remain stable.
It is our intent, during 2005, to increase our marketing and sales personnel in
our forensic and possibly our consumer markets. Current plans expect to add up
to three personnel in these areas. It is also our intent to add a
shipping/receiving clerk in administration and as cash flow permits to increase
our research staff through the addition of up to two post doctors. The post
doctors would be responsible for internal research projects that will be
directed by our Chief Scientific Officer. In addition we are considering
increasing our programming staff in order to expedite our research projects.
Costs associated with the hiring process would include normal expenditures
including advertising costs and possible search fees from outside consultants.
For higher-level positions, additional interviews, sign on bonuses and
relocation expenses may also be incurred. Although this is our current personnel
hiring plan, conditions and other unforeseen factors could impact the decision
making process and as a result plans may change.

                       RISKS RELATING TO OUR COMMON STOCK

OUR COMMON STOCK IS SUBJECT TO "PENNY STOCK" RULES OF THE SEC AND THE TRADING
MARKET IN OUR STOCK IS LIMITED, WHICH MAKES TRANSACTIONS IN OUR STOCK CUMBERSOME
AND MAY REDUCE THE VALUE OF AN INVESTMENT IN OUR STOCK.

The Securities and Exchange Commission has adopted Rule 15g-9 which establishes
the definition of a "penny stock," for the purposes relevant to us, as any
equity security that has a market price of less than $5.00 per share or with an
exercise price of less than $5.00 per share, subject to certain exceptions. For
any transaction involving a penny stock, unless exempt, the rules require:

- that a broker or dealer approve a person's account for transactions in penny
  stocks; and
- the broker or dealer receive from the investor a written agreement
  to the transaction, setting forth the identity and quantity of the penny stock
  to be purchased.

In order to approve a person's account for transactions in penny stocks, the
broker or dealer must:

- obtain financial information and investment experience objectives of the
  person; and
- make a reasonable determination that the transactions in penny stocks are
  suitable for that person and the person has sufficient knowledge and
  experience in financial matters to be capable of evaluating the risks of
  transactions in penny stocks.

The broker or dealer must also deliver, prior to any transaction in a penny
stock, a disclosure schedule prepared by the Commission relating to the penny
stock market unless the broker or dealer or the transaction is exempt. A broker
or dealer is also required to disclose commissions payable to the broker or
dealer and the registered representative and current quotations for the
securities. Finally, a broker or dealer is required to send monthly statements
disclosing recent price information with respect to the penny stock held in a
customer's account and information with respect to the limited market in penny
stocks.


                                       19
<PAGE>

In addition, unless you have had an account with your brokerage firm for more
than one year, or you have previously bought three different penny stocks from
that firm, your brokerage firm must send you a written statement for you to sign
that accurately describes your financial situation, your investment experience,
and your investment goals, and that contains a statement of why your firm
decided that penny stocks are a suitable investment for you. The firm also must
get your written consent to buy the penny stock.

If penny stocks are sold to you in violation of federal or state securities
laws, you may be able to cancel your purchase and get your money back. If the
stocks are sold in a fraudulent manner, you may be able to sue the persons and
firms that caused the fraud for damages. If you have signed an arbitration
agreement, however, you may have to pursue your claim through arbitration.

OUR HISTORIC STOCK PRICE HAS BEEN VOLATILE AND THE FUTURE MARKET PRICE FOR OUR
COMMON STOCK IS LIKELY TO CONTINUE TO BE VOLATILE. FURTHER, THE LIMITED MARKET
FOR OUR SHARES WILL MAKE OUR PRICE MORE VOLATILE. THIS MAY MAKE IT DIFFICULT FOR
YOU TO SELL OUR COMMON STOCK FOR A POSITIVE RETURN ON YOUR INVESTMENT.

The public market for our common stock has historically been very volatile. Any
future market price for our shares is likely to continue to be very volatile.
This price volatility may make it more difficult for you to sell shares when you
want at prices you find attractive. We do not know of any one particular factor
that has caused volatility in our stock price. However, the stock market in
general has experienced extreme price and volume fluctuations that have often
been unrelated or disproportionate to the operating performance of companies.
Broad market factors and the investing public's negative perception of our
business may reduce our stock price, regardless of our operating performance.
Further, the market for our common stock is limited and we cannot assure you
that a larger market will ever be developed or maintained. The average daily
trading volume of our common stock over the past year was approximately 112,331
shares. Market fluctuations and volatility, as well as general economic, market
and political conditions, could reduce our market price. As a result, this may
make it difficult or impossible for you to sell our common stock.

IF WE FAIL TO REMAIN CURRENT ON OUR REPORTING REQUIREMENTS, WE COULD BE REMOVED
FROM THE OTC BULLETIN BOARD WHICH WOULD LIMIT THE ABILITY OF BROKER-DEALERS TO
SELL OUR SECURITIES AND THE ABILITY OF STOCKHOLDERS TO SELL THEIR SECURITIES IN
THE SECONDARY MARKET.

Companies trading on the OTC Bulletin Board, such as us, must be reporting
issuers under Section 12 of the Securities Exchange Act of 1934, as amended, and
must be current in their reports under Section 13 in order to maintain price
quotation privileges on the OTC Bulletin Board. If we fail to remain current on
our reporting requirements, we could be removed from the OTC Bulletin Board. As
a result, the market liquidity for our securities could be severely affected by
limiting the ability of broker-dealers to sell our securities and the ability of
stockholders to sell their securities in the secondary market.

ITEM 3. LEGAL PROCEEDINGS.

On October 27, 2003, DNAPrint genomics, Inc. filed suit in the Circuit Court of
the Twelfth Judicial Circuit of Florida in and for Sarasota County, Florida,
Civil Division moving for an emergency order requiring impoundment of any and
all computers and associated materials of one of our former employees. On
October 28, 2003, the Circuit Court Judge granted the order. The order was
carried out on the same day.

Our Complaint alleges that a former employee inappropriately took confidential
company materials and then disclosed or threatened to disclose the information.
The Complaint seeks return of the property, a permanent injunction against
further and future disclosures by the former employee, attorney's fees and
related costs.

On December 19, 2003, the former employee filed an Answer, Affirmative Defenses,
and Counterclaim with the Court generally denying the allegations of our claim.
In addition, the Defendant counterclaimed and sued us for breach of an
Employment Agreement, based on a purported failure to pay certain health
benefits, and stock options.

On January 9, 2004, the Court granted our Motion to Inspect, Examine and
Download Information from the Impounded Computer, subject to certain limitations
designed to protect the confidentiality of any information contained on the
computer.

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

NONE


                                       20
<PAGE>

                                     PART II

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

Our common stock is eligible for quotation on the OTC Bulletin Board. Set forth
below is a table summarizing the high and low bid quotations for our common
stock during its last two fiscal years.

SUMMARY OF QUARTERLY HIGH & LOW PRICE OF COMMON STOCK

                 QUARTER                   HIGH BID            LOW BID

            1st Quarter 2002                 .089               .050
            2nd Quarter 2002                 .074               .051
            3rd Quarter 2002                 .059               .020
            4th Quarter 2002                 .053               .016
            1st Quarter 2003                 .033               .013
            2nd Quarter 2003                 .185               .017
            3rd Quarter 2003                 .096               .047
            4th Quarter 2003                 .083               .023

The above table is based on Over-The-Counter quotations. These quotations
reflect inter-dealer prices, without retail mark-up, markdown or commissions,
and may not represent actual transaction. All historical data was obtained from
the integratIR.com OTCBB web site.

As December 30, 2004 there were 928 owners of record of our common stock.

We have never paid any cash dividends. The payment of dividends, if any, in the
future is within the discretion of our Board of Directors, and will depend upon
our earnings, capital requirements and financial condition, and other relevant
factors. Management does not expect to declare dividends in the foreseeable
future.

USE OF PROCEEDS

We filed, with the SEC, a Registration Statement on Form S-2 (Registration No.
333-111169), which was declared effective by the SEC on December 19, 2003. The
offering described in the Registration Statement has commenced, and as of
January 2, 2004, we had received $449,930 in proceeds associated with the
offering.

The offering relates to the issuance to La Jolla Cove Investors, Inc. ("LJCI")
of a $500,000, 8% convertible debenture with attached warrants. We pay interest
on a monthly basis with a principal balloon payment due on the maturity date of
November 24, 2005. Under the agreement, LJCI must convert at least 5% of the
face value of the debenture, and exercise the related warrants, each calendar
month.

As of December 31, 2003, we had used approximately $317,000 of the proceeds for
working capital, including payroll of approximately $49,000, lease repayment of
approximately $8,700, and miscellaneous monthly payments to our vendors for
materials and supplies of approximately $260,000. We intend to use the remaining
net proceeds from the offering for the purchase of capital equipment and for
working capital. In addition, we may use a portion of the proceeds to fund
acquisitions or lease real property.

SALES OF UNREGISTERED SECURITIES

In the fourth quarter of 2003, we issued 1,209,980 shares of our common stock in
exchange for services valued at approximately $66,104. These shares were issued
to four of our consultants who are "sophisticated investors". We believe the
transactions were exempt from registration under Rule 506 promulgated under the
Securities Act of 1933. The offerings were not underwritten.

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

The following discussion and analysis should be read in conjunction with the
balance sheet as of December 31, 2003 and the financial statements as of and for
the years ended December 31, 2003 and 2002 included with this Form 10-KSB.

                                     SUMMARY

Although we have been in existence for a number of years, management's efforts
to develop our business have not yet resulted in the generation of significant
revenues. Initially, management's efforts focused on developing licensing
relationships from our research and development. More recently, new management
has chosen to focus on increasing sales volume in the consumer market and
building sales in the forensic market while continuing to develop products for
introduction to the pharmacogenomics market. We continue to devote substantially
all of our efforts in initiating and developing our planned principal
operations. While sales of our genealogy product ANCESTRYbyDNA(TM) are
increasing, our forensic product, DNAWitness(TM) has just been introduced in the
marketplace. Sales of ANCESTRYbyDNA(TM) increased because the product had only
been introduced in late 2002 and in 2003, we have had the opportunity to
increase our customer base thereby increasing our sales. Our pharmacogenomics
products are still in development and genotyping services are in the initial
stage.


                                       21
<PAGE>

A priority of management throughout 2003 was to raise the capital necessary to
fund the implementation of their strategic plan. Late in 2003, we successfully
secured initial funding of $8,000,000. During 2003, management began to
implement the strategic plan, and throughout 2004 management expects to continue
to implement and refine operational procedures and controls to support future
growth and development. We intend to support research and development as a vital
component of our overall growth strategy. Until potential customers are familiar
with our technology and products, which will come from continued research and
development and proven market use, it is unlikely that we will generate
significant revenue. The following discussion of our historical financial
results should be read against that background.

Management plans to continue to focus on increasing sales in the market areas of
forensics and genealogy and to move towards introduction of new and expanded
products in these markets. We plan to continue market research within both
segments to further expand our knowledge and understanding of the most efficient
way to market and sell our products.

We will continue work on Ovanome, a Taxol screening diagnostic test, currently
under development that could be available for physician use in late 2006 or
early 2007 along with our continued efforts on other research and development
projects that are underway. We will continue to explore joint venture
opportunities, particularly within the pharmacogenomic segment in order to
potentially expand our position within the pharmaceutical market. A major goal
of our joint venture program is to seek opportunities for drug pipeline
acquisition.

Internally, management will continue to develop and implement organizational
policies and procedures to increase operating efficiency and move us closer
toward our goal of attaining and maintaining our planned principal operations.

Our plan of operations for the ensuing twelve months includes efforts to: 1)
increase sales of our existing products, ANCESTRYbyDNA(TM), DNAWitness(TM); 2)
introduce new and expanded products in the genealogy and forensic markets; 3)
continue promoting our genotyping services while continuing to concentrate on
research and development for both our existing products and our anticipated
pharmacogenomic products and services. It is anticipated that we will add
additional personnel in the laboratory and in administration, as growth
warrants. No significant personnel additions are expected for 2004. Capital
expenditures needed for the next twelve months are discussed in this 10-KSB/A
below under the section entitled "Liquidity and Capital Resources".

                              RESULTS OF OPERATIONS

REVENUES AND COST OF SALES

For the years ended December 31, 2003 and 2002, revenues were $709,638 and
$184,551, respectively. A $525,087 increase in revenues from the prior year is a
285% increase that was primarily a result of our sales of ANCESTRYbyDNA(TM)
version 2.0 to the general public, which commenced in the fourth quarter of
2002. Revenues for ANCESTRYbyDNA(TM) were approximately $477,677 for the year
ended December 31, 2003. An increase in our genotyping services also contributed
to our sales growth. Revenue for our genotyping services totaled approximately
$218,936 for the year ended December 31, 2003. Introduction of our forensic
product, DNAWitness(TM) did not significantly impact our revenues for 2003.
Revenues of DNAWitness(TM), introduced in the 4th quarter of 2003, totaled
approximately $8,040. Other miscellaneous revenues, including storage fees,
totaled approximately $4,985 in 2003.

To date, our genotyping service customers have come to us either through client
referrals or our general website. In the future, we plan to concentrate our
genotyping services on specific diseases, including cancer, neurological
disorders, and heart disease. By concentrating on specific diseases, we hope to
develop an expertise that will attract customers in those areas requiring
external assistance and additional research capacity. Through this strategy, we
will continue to build our reputation as a reliable and cost effective supplier
of high quality data using our UHT SNP machine.

Sales of ANCESTRYbyDNA(TM) were generated through advertising in Family Tree, a
genealogy periodical, and through public exposure that we received during the
year in newspapers, magazines and television. In addition, sales were generated
through our various distributors and from our website www.ancestrybydna.com.
Genotyping sales were generated primarily through work with universities.
Forensic sales were generated through marketing to various agencies, our
attendance at various trade shows and through our relationship with Lynn Peavey
catalog. As stated below, because we are a development stage enterprise and our
markets and sales techniques have yet to be standardized, we continue to seek
the most advantageous routes to market and sell our products.

Without a significant investment in sales or marketing, we have generated
considerable interest in ANCESTRYbyDNA(TM) 2.0. We have sold, on average, 13
ANCESTRYbyDNA(TM) tests per day during 2003. An average of 9.5 of those test
sales have come from our website and 4 tests per day from our distributors.

Promotional efforts to date have been fruitful but sporadic. We have been
featured on or in ABC's Prime Time Thursday, the CBS Evening News with Dan
Rather, The New York Times, Miami Channel 10 WPLG, UPI, US News and World
Report, Popular Science Magazine, Tampa's Fox Channel 13 News, Germany's ZDF
News Channel, The Australian Broadcasting Corporation and The Sarasota-Bradenton
Herald Tribune KTTV Fox 11 in LA, ABC Tampa, Howard Stern's radio show, PBS WEDU
Sarasota, USA Today, and Dallas Morning News.


                                       22
<PAGE>

In order to build consistent sales, we have begun to implement formal sales and
marketing plans, including advertising and promotional campaigns. Implementing
these plans results in increased expenses for personnel, advertising, promotion,
and the collateral materials associated with these programs.

Recently, we entered into a contract with the Lynn Peavey Company. Lynn Peavey
Company is a well-recognized and highly respected supplier of crime scene
support materials to over 17,000 police and crime laboratories around the world.
Our product, DNAWitness(TM) 2.0, is now featured in the Lynn Peavey Company
catalog. We also plan to work with Lynn Peavey Company personnel to establish
and conduct seminars and training programs for detectives, crime laboratory
personnel and crime scene personnel on DNAWitness(TM).

We anticipate an increase in marketing and sales costs throughout 2004 as we
implement our marketing and sales plan to increase product awareness. We expect
to incur costs for additional sales personnel, the expenses associated with
trade shows and promotions, and our planned seminars and training programs.

For the year ended December 31, 2003, cost of sales increased from $73,205 (40%
of revenues) in 2002 to $432,224 (61% of revenues) in 2003. Because of the small
sales volume, lack of historical comparisons and its dependence on the type of
testing conducted in a particular period, these results are not indicative of
the margins that we may attain if our long-term goals are achieved. During 2004,
we will continue to focus on increasing market awareness of our products,
particularly within the consumer and forensic markets.

While we continue to improve and refine our accounting systems, we currently do
not segregate product costs. We have been and continue to be a development stage
company as described in Financial Accounting Standards Board Statement No. 7. We
continue to devote substantially all of our efforts to initiating and developing
our planned principal operations. It is expected that our pharmacogenomic
products and services, once introduced, will be our major revenue generator.

Management does not manage on a product cost basis at this time. Further
management does not allocate resources based on product lines. For the most
part, personnel are not solely devoted to a product or a specific task. As a
development stage company, personnel are required to perform a multitude of
tasks including production and research and development. Revenue generation to
date has not been substantial or steady enough to warrant segregation of duties.
As such labor costs vary from period to period. Further we have not reached a
stage where economies of scale are available to us. Production costs vary from
period to period due to the level of revenue produced and research performed. It
is anticipated, as stated previously, that as we move from a development stage
company to an operating company, management will focus on product revenues,
costs and the associated margins. As part of our effort to move towards an
operating company, we continue to develop and refine our production processes
for our introduced products; so that over time and as sales increase, an
efficient process can be implemented and managed on an ongoing basis. In
addition, we continue to work towards designing and establishing a cohesive
marketing and sales effort for our introduced products. Although, both the
forensic and genealogy markets have been in existence for several years, our
products are new and unique to their markets and it requires market research and
testing in order to arrive at the best way to present our products. We continue
to test markets through primary market research and advertising. This effort is
ongoing and will continue to develop as we gather information.

RESEARCH AND DEVELOPMENT EXPENSES

In 2003 and 2002, the largest component of our operating expenses was research
and development costs, which consists of raw materials, laboratory supplies,
equipment expense, and facilities and employment-related costs. The expenses
were incurred in support of our currently available products, ANCESTRYbyDNA(TM)
and DNAWitness(TM), and for our anticipated pharmacogenomics products.

In 2003, we also conducted research for future enhancements to DNAWitness(TM).
The research included much needed sample collection for our eye and hair color
studies. In addition, investigative research and studies continued on our
pharmacogenomics products, including Ovanome(TM) and Statinome(TM) and a future
cardiac product. Some of this research involved the acquisition and evaluation
of new samples with corresponding medical histories.

For the year ended December 31, 2003, research and development costs increased
from $2,195,418 in 2002 to $2,654,259 in 2003, an increase of $458,841, or 21%.
This increase is primarily the result of the stock based compensation received
by our Chief Scientific Officer in return for his services to us.

Because we are in the development stage of our long-term business, it is not
possible to directly correlate our current research and development costs to our
future costs. Our prior management did not manage on a project cost basis with
respect to research and development. Current management is implementing revenue
recognition and project status measures which will disclose much of the
information requested. Our revenue generation to date has not been substantial
or steady enough to warrant segregation of time, costs and revenue. We are a
development stage enterprise with new products that are not available through
competitors for forensics and genealogy. For example, many of our products and
services are in the development stage, such as ANCESTRYbyDNA and DNAWitness, and
the segregation of each project by its particular cost, revenue and cash flow is
currently not feasible.

We will continue to support research and development as our long-term business
develops and it will remain a high priority and a necessary resource to sustain
future growth. We will continue to hire research and development personnel and
invest in the infrastructure required to support future innovation, including
equipment, supplies and other asset purchases. In order to advance our
pharmacogenomic product, Ovanome(TM), to commercialization, our development
costs for this product will increase in 2004. In addition, as we move other
pharmacogenomic products forward, research and development costs will likely
increase proportionately.


                                       23
<PAGE>

GENERAL AND ADMINISTRATIVE EXPENSES

Another significant component of our operating expenses is general and
administrative expenses. These expenses resulted from (i) accounting and other
fees associated with preparing the audited financial statements and other
regulatory compliance activities, (ii) legal fees associated with our patent
filings and maintenance, a lawsuit against a former employee and preparation of
our securities law filings, and (iii) administrative and other salaries and
expenses.

For the years ended December 31, 2003 and 2002, general and administrative
expenses increased $3,328,390, from $529,535 in 2002 to $3,857,925, in 2003.
$1,944,507 of this increase is stock based compensation for the three top
executives that were recruited during 2003. The remaining increase consists
primarily of consulting expenses. The increased consulting services resulted
principally from our consulting agreements with a former director and a
marketing consultant.

As discussed in Research and Development expenses, we are not able to
extrapolate current general and administrative costs to our future costs. As our
long-term business develops, we believe our general and administrative costs
will increase with revenue growth. For example, to increase sales, an increase
in marketing and sales expenditures will be required to broaden and expand our
market awareness and penetration. We expect all costs associated with normal
marketing and sales activities to increase, including trade shows, advertising
and promotion. In addition, our current facility of approximately 4,000 square
feet, will not meet our growth plans and we will need to expand our facilities
to accommodate new personnel, increased production and future research and
development. Our general and administrative cost will rise accordingly along
with the associated costs such as utilities, taxes and maintenance.

STOCK BASED SETTLEMENT EXPENSE

During 2003, Tampa Bay Financial, Inc. exercised a right to purchase 4,763,662
shares of our common stock at a price of $.05 per share. Because the fair market
value of our stock was $.082 at the date they exercised their right, we have
recognized $152,437 of expense, the difference between the fair market value and
the exercise price. This amount has been reflected as a settlement expense as
this right was granted to Tampa Bay Financial in connection with the termination
of their funding agreement.

INTEREST EXPENSE

For the years ended December 31, 2003 and 2002, interest expense increased
significantly from $453,247 in 2002, to $1,402,698 in 2003. During 2003, we
recorded interest expense of approximately $26,000 on related party notes and
certain capital leases, $5,000 on the convertible debenture and related deferred
financing fee, $500,000 related to the intrinsic value associated with the
convertible debt and non-detachable warrants and $872,000 for the issuance of
our common stock for the payment of related party notes payable, at an agreed
upon per share price which was less than the market price of our stock. We
accounted for the difference between the stock issue price and the market price
as interest expense. During 2002, we recorded interest expense of approximately
$46,000 on the related party notes and certain capital leases and $407,000 for
the issuance of our common stock for the payment of related party notes payable,
at an agreed upon per share price which was less than the market price of our
stock.

During 2004, we will continue to incur interest on the related party notes. The
amount, however, will be less than 2003 as the outstanding balance has been
reduced by our repayments on the notes and the satisfaction of $44,940 in notes
held by George Frudakis repaid in cash in January 2004. George Frudakis is a
shareholder of the Company and the father of our Chief Scientific Officer, Tony
Frudakis. There is no other relationship between the Company and George
Frudakis. We may elect to pay the remaining notes outstanding to Tony Frudakis
with common stock. If we elect to do so, these payments will result in
additional interest expense for the difference between the stock issue price and
the market price at the date the common stock is issued. Our interest expense
may also increase as a result of our convertible debenture that was entered into
in late 2003. We will have a full year of interest expense and related deferred
financing fee charge during 2004. There will be no additional interest expense
charge related to the intrinsic value associated with the convertible debt and
non-detachable warrants that are recorded.

                         LIQUIDITY AND CAPITAL RESOURCES

Our operating requirements generated a negative cash flow from operations as we
continue to engage in testing and development of our products. Our cash used by
operating activities for the year ended December 31, 2003 was $1,529,812. We
also invested in equipment of approximately $14,165 and had principal payments
on capital lease obligations of $78,200. The resulting cash shortfall was
financed primarily through sales of common stock, the issuance of a convertible
debenture and related party funding.

Based upon our current plans, we will continue to focus on increasing market
awareness of our products and developing sales for our currently available
products. It is difficult to predict what revenue stream, if any, they will
generate. We do not expect our revenue stream to cover costs of operations in
the immediate future. We anticipate that the funding from the minimum
conversions of the outstanding debenture into common stock and the related
exercise of the non-detachable warrants will fund our operating activities
through 2004. If additional funding is needed, we will attempt to raise these
funds through borrowing instruments or raising additional equity. Management is
confident that equity financing or debt will be available to fund our operations
until revenue streams are sufficient to fund operations; however, the terms and
timing of such equity or debt cannot be predicted.


                                       24
<PAGE>

Our consolidated financial statements are prepared using accounting principles
generally accepted in the United States of America applicable to a going
concern, which contemplate the realization of assets and liquidation of
liabilities in the normal course of business. We have incurred losses since our
inception, and have experienced and continue to experience negative cash flows
from operations. In addition, we have working capital and stockholders'
deficiencies of approximately $1,540,922 and $2,037,095 at December 31, 2003,
and will continue to have ongoing requirements for substantial additional
capital investment to accomplish our business plan over the next several years.
Over the past two years, our operations have been funded through related party
funding, sales of common stock and the issuance of a convertible debenture. We
continue to experience some success generating operating revenues; however, we
do not expect our revenue stream to be sufficient to cover costs of operations
in the immediate future. We anticipate that the funding we expect to receive
from the minimum conversions of the outstanding debenture into common stock and
the related exercise of the non-detachable warrants will fund our operating
activities through 2004. However, there can be no assurance the minimum
conversions of the outstanding debenture into common stock and the related
exercise of the non-detachable warrants will be exercised and/or that we will
have the cash flow to meet our operating requirements. These factors, among
others, indicate that we may be unable to continue as a going concern for a
reasonable period of time.

Our long term needs for cash and capital beyond the 12-month horizon will depend
on the availability of funding and sales growth. Our current cash expenditure
rate of approximately $370,000 per month will allow us to continue operations
with little or no growth. At December 31, 2003 we had received approximately
$449,930 in proceeds from our agreement with La Cove Investors, Inc. It is
anticipated that we will continue to receive approximately $375,000 per month up
to the full amount of the agreement of $8,000,000; at current cash expenditure
rates, this would supply funding for a total of approximately 21 months, ending
September 2006. Current cash flow consists of salaries and wages, lease
repayments, material and sample purchases for production and research and
development, selling general and administrative expenses, and limited capital
purchases.

We have issued securities, including our convertible debentures and our
convertible preferred stock, that are convertible into our common stock at a
continuously adjustable conversion price based on a discount on the trading
price of our common stock. As the holders of our convertible securities convert
into shares of our common stock and more of our common stock is issued pursuant
thereto, the market price of our common stock could decrease significantly and
make raising capital impractical or impossible during time periods in which we
may need to raise capital to fund our operations and market and sell our
products and services. In addition, the issuance of our common stock upon
exercise or conversion of our other securities may create a downward pressure on
the market price of our common stock. This may make it more difficult for us to
raise the necessary capital we need in order for fund our operations or raise
capital on terms that are acceptable to us.

Implementing our plan of operations results in increased expenses for personnel,
advertising, promotion, and the collateral materials associated with these
plans. Availability of funding and sales growth will determine to what extent
and how quickly these plans can be implemented. Costs will vary according to
timing and level of commitment. To date, management has maintained a lower level
of commitment in order to preserve liquidity. A new ad has been developed and
placed for ANCESTRYbyDNA and a new promotional package is being developed.

CAPITAL EXPENDITURES

During 2004, we anticipate developing the required infrastructure to realize our
2004 operational growth plan, including acquiring or leasing property, equipment
and other operating assets.

We are actively seeking to acquire or lease a new building that has 15,000 to
20,000 square feet with additional expansion potential. We estimate that lease
costs will be between $15 and $25 per square foot. This does not include fit out
or other associated costs such as utilities, taxes and maintenance. The initial
build out of 7,000 square feet is estimated at approximately $780,000 which
includes laboratory, office and warehouse space. Additional costs for equipment,
furniture and fixtures are estimated at $257,000. Timing of the incurrence of
the expense will depend upon the length of time required to find the appropriate
facility.

In addition, it is anticipated that new laboratory and computer equipment will
be purchased during 2004. Computer purchases for programming, modeling and
business use is estimated at $100,000 and scientific and business programs and
software at $65,000. Capital expenditures for laboratory equipment are estimated
at $500,000 which includes a new robotic SNP machine at a value of approximately
$250,000.

RELATED PARTY TRANSACTIONS

We have entered into certain related party transactions during the year ended
2003 and 2002. See item 7 for a discussion of these transactions.

OFF-BALANCE SHEET ARRANGEMENTS

As of December 31, 2003, we have no off-balance sheet arrangements.

             CRITICAL ACCOUNTING POLICIES AND RESULTS OF OPERATIONS

The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that have a significant impact on the results we
report in our financial statements. Some of our accounting policies require us
to make difficult and subjective judgments, often as a result of the need to
make estimates of matters that are inherently uncertain. Actual results may
differ from these estimates under different assumptions or conditions. Below, we
discuss this further, as well as the estimates and judgments involved.


                                       25
<PAGE>

ASSET IMPAIRMENT

We review our long-lived assets for impairment whenever events or changes in
circumstances indicate that the carrying amount of the asset exceeds its fair
value and may not be recoverable. In performing the review for recoverability,
we estimate the future cash flows expected to result from the use of the asset
and its eventual disposition. If the sum of the expected future cash flows
(undiscounted and without interest charges) is less than the carrying amount of
the asset, an impairment loss is recognized. Otherwise, an impairment loss is
not recognized. Management estimates the fair value and the estimated future
cash flows expected. Any changes in these estimates could impact whether there
was impairment and the amount of the impairment. Since we are in the
developmental stage, we do not have much history to determine our estimated cash
flows. If we do not meet our targeted cash flows for our services and if the
estimated disposition of the equipment is lower, this could result in a
write-down of our equipment. Our equipment is very specialized equipment related
to genomics research and there probably will not be a large demand for our used
equipment. The amount of our net fixed assets is the amount of the maximum risk
if our assumptions were not correct. Each year the assets will have higher
depreciation and the maximum risk will decrease correspondingly.

ACCRUALS AND DEFERRED COMPENSATION

We estimate the various accruals we record based upon the information we have
available at the time the accruals are recorded. Any changes to these estimates
could impact the accrual and related expense accounts. We recorded an accrual
for federal and state income taxes that we agreed to pay for various executives
on stock grants based upon the information we had at the time the entry was
recorded. This estimate could change based upon the actual tax that is paid by
the various executives which is based upon their actual circumstances at the
time they file their taxes compared to the accrual we booked based upon
estimated assumptions. During 2004, the accrual for federal and state income
taxes payable for various executives on stock grants decreased by approximately
$50,000 based upon actual taxes paid vs. our 2003 estimated accrual. We do not
anticipate this accrual changing during the rest of 2004.

ALLOCATION OF RESEARCH AND DEVELOPMENT COSTS

Prior to 2004, our research and development costs were derived by allocating
certain costs based on total labor effort. The percentage of total labor effort
expended on research and development was an estimate by management. During 2004,
we refined our process of allocating costs by identifying and directly expensing
certain costs related to research and development and allocating certain other
costs based on total labor effort that is estimated by management and employees.
With some of these costs, a percentage of a total purchase order price is
allocated to research and development. Also during 2004, we implemented a time
card process that gives us a more refined estimate of certain employees' time.
We continue to refine our process of estimating specific invoice costs to
research and development as well as our process of identifying time associated
with research and development. These refinements to estimates could increase or
decrease our income statement expense categories of research and development,
cost of sales and selling, general and administrative. Over time we believe this
change in allocating costs during 2004 based upon actual labor effort vs.
estimated labor effort for 2003 will result in a lower allocation of
administrative costs to research and development. Also, as the Company hires
employees, the department in which the employee is hired will have a direct
impact on the allocation of administrative costs to research and development.
For example if a person is hired in research and development the allocation to
research and development for other administrative costs will increase as labor
effort percentage for research and development will have increased. If a person
is hired in administration, the allocation to research and development for other
administrative costs will decrease as the labor effort percentage for research
and development will have decreased. changes to these estimates could have a
significant impact on the accrual and related compensation expense and/or
deferred compensation.


                                       26
<PAGE>

ITEM 7. FINANCIAL STATEMENTS.

                             DNAPRINT GENOMICS, INC.
                        (A DEVELOPMENT STAGE ENTERPRISE)

                   CONSOLIDATED FINANCIAL STATEMENTS AS OF AND
                   FOR VARIOUS PERIODS ENDED DECEMBER 31, 2003
                    AND 2002 AND INDEPENDENT AUDITORS' REPORT




                                       27
<PAGE>

                             DNAPRINT GENOMICS, INC.
                        (A DEVELOPMENT STAGE ENTERPRISE)

                                TABLE OF CONTENTS

                                                                            PAGE

Independent Auditors' Reports                                               F-1

Consolidated Financial Statements:

Consolidated Balance Sheet as of December 31, 2003                          F-3

Consolidated Statements of Operations for the years ended
  December 31, 2003 and 2002, and for the period
  December 10, 1998 (date of inception) to December 31, 2003                F-4

Consolidated Statements of Stockholders' Deficit for the period
  ended December 10, 1998 to December 31, 1998 and for the years
  ended December 31, 1999, 2000, 2001, 2002 and 2003                        F-5

Consolidated Statements of Cash Flows for the years ended
  December 31, 2003 and 2002 and for the period
  December 10, 1998 (date of inception) to December 31, 2003                F-8

Notes to Financial Statements                                               F-10


                                       28
<PAGE>

                          INDEPENDENT AUDITORS' REPORT

Board of Directors
DNAPrint genomics, Inc. and Subsidiary
Sarasota, Florida

We have audited the accompanying consolidated balance sheet of DNAPrint
genomics, Inc. and Subsidiary (a development stage enterprise) as of December
31, 2003 and related consolidated statements of operations, changes in
stockholders' equity, and cash flows for the year then ended and for the period
from December 10, 1998 (inception) through December 31, 2003. These consolidated
financial statements are the responsibility of the management of DNAPrint
genomics, Inc. and Subsidiary. Our responsibility is to express an opinion on
these consolidated financial statements based on our audit. The consolidated
financial statements as of December 31, 2002, and for the period from December
10, 1998 (inception) to December 31, 2002, were audited by other auditors whose
report dated April 11, 2003, included an explanatory paragraph regarding
substantial doubt about the Company's ability to continue as a going concern.
The consolidated financial statements for the period from December 10, 1998
(inception) through December 31, 2002 include total sales and net loss of
$270,938 and $6,849,650, respectively. Our opinion on the statements of
operations, shareholders' equity, and cash flows for the period from December
10, 1998 (inception) through December 31, 2003, insofar as it relates to amounts
for periods through December 31, 2002, is based solely on the report of other
auditors.

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

In our opinion, based on our audit and the report of other auditor's on the
previous years financial statements, the consolidated financial statements
referred to above present fairly, in all material respects, the consolidated
financial position of DNAPrint genomics, Inc. and Subsidiary as of December 31,
2003 and the consolidated results of its operations and its cash flows for the
year then ended and the period from December 10, 1998 (inception) through
December 31, 2003, in conformity with accounting principles generally accepted
in the United States of America.

The accompanying consolidated financial statements of DNAPrint genomics, Inc.
and Subsidiary have been prepared assuming that the Company will continue as a
going concern. As more fully described in Note B, the Company has had recurring
operating losses since inception, has negative working capital as of December
31, 2003, and has used approximately $1,530,000 of cash in operations for the
year ended December 31, 2003. These conditions raise substantial doubt about the
Company's ability to continue as a going concern. Management's plans regarding
these matters are also described in Note B. The consolidated financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.


                          /s/ Pender Newkirk & Company

                          Pender Newkirk & Company
                          Certified Public Accountants
                          Tampa, Florida
                          February 20, 2004


                                       F-1
<PAGE>

INDEPENDENT AUDITORS' REPORT

To the Board of Directors and stockholders of DNAPrint genomics, Inc. and
subsidiary:

We have audited the accompanying consolidated statements of operations,
stockholders deficit and cash flows of DNAPrint genomics, Inc. and subsidiary
(collectively the "Company"), a development stage enterprise, for the year ended
December 31, 2002. These consolidated financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.

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

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the results of operations and cash flows of
the Company for the year ended December 31, 2002, in conformity with accounting
principles generally accepted in the United States of America.

The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in Notes A and B
to the consolidated financial statements, the Company is in the development
stage, has recurring losses from operations, a stockholders' deficit and
requirements for a significant amount of capital financing to proceed with its
business plan. These factors, among others, raise substantial doubt about the
Company's ability to continue as a going concern. Management's plans in regard
to these matters are also described in Note B. The consolidated financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.


                        /s/ Kingery, Crouse & Hohl, P.A.

                        April 11, 2003
                        Kingery & Crouse & Hohl, P.A.
                        Tampa, Florida


                                       F-2
<PAGE>

                             DNAPRINT GENOMICS, INC.
                        (A DEVELOPMENT STAGE ENTERPRISE)

               CONSOLIDATED BALANCE SHEET AS OF DECEMBER 31, 2003

ASSETS

CURRENT ASSETS:

      Cash and cash equivalents                                    $    265,921
      Accounts receivable (net of allowance
        for doubtful accounts of $500)                                    9,303
      Stock proceeds receivable                                         422,955
      Deferred compensation                                             220,067
      Prepaid expenses                                                   83,010
      Total current assets                                            1,001,256
      PROPERTY AND EQUIPMENT (net of accumulated
        depreciation and amortization of $321,327)                      282,305
      OTHER ASSETS                                                        5,000
      TOTAL                                                        $  1,288,561
      LIABILITIES AND STOCKHOLDERS' DEFICIT
      CURRENT LIABILITIES:
      Accounts payable                                             $    582,602
      Accrued expenses                                                  256,593
      Accrued compensation expense                                    1,283,206
      Deferred revenue                                                   62,118
      Notes payable to related parties                                  298,043
      Capital lease obligation                                           59,616
      Total current liabilities                                       2,542,178
      Capital lease obligation - long-term                                5,613
      Accrued expenses payable with common stock                        307,865
      Convertible debenture                                             470,000
      Total liabilities                                               3,325,656
      STOCKHOLDERS' DEFICIT:
      Preferred stock, $.01 par value, 10,000,000
        shares authorized; -0- shares issued and
        outstanding                                                          --
      Common stock, $.01 par value, 1,500,000,000
        shares authorized; 523,898,635 shares issued
        and outstanding                                               5,238,986
      Common stock subscribed                                         1,153,663
      Additional paid-in capital                                     16,360,817
      Deferred stock compensation                                      (735,356)
      Deficit incurred prior to development stage                    (7,427,422)
      Deficit accumulated during the development stage              (16,627,783)
      Total stockholders' deficit                                    (2,037,095)
      TOTAL                                                        $  1,288,561

See notes to consolidated financial statements


                                       F-3
<PAGE>

                             DNAPRINT GENOMICS, INC.
                        (A DEVELOPMENT STAGE ENTERPRISE)

                      CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                                                                            For the Period
                                                                               December
                                                                               10, 1998
                                                                               (date of
                                           For the Year     For the Year      inception)
                                          Ended December   Ended December     to December
                                             31, 2003         31, 2002         31, 2003
                                          -------------    -------------    -------------
<S>                                       <C>              <C>              <C>
SALES                                     $     709,638    $     184,551    $     980,576
                                          -------------    -------------    -------------
COST OF SALES                                   432,224           73,205          605,100
                                          -------------    -------------    -------------

GROSS PROFIT                                    277,414          111,346          375,476
                                          -------------    -------------    -------------

OTHER OPERATING EXPENSES:
Research and development                      2,654,259        2,195,418        7,084,525
General and administrative                    3,857,925          529,535        5,848,955
                                          -------------    -------------    -------------
     Total other operating expenses           6,512,184        2,724,953       12,933,480
                                          -------------    -------------    -------------

LOSS FROM OPERATIONS                         (6,234,770)      (2,613,607)     (12,558,004)
                                          -------------    -------------    -------------

OTHER INCOME (EXPENSE):
Sale of option to Orchid Biosciences                 --               --          353,090
Loss on disposal of investments                      --               --         (349,006)
Stock based settlement expense                 (152,437)              --         (152,437)
Interest expense                               (902,698)        (453,247)      (1,386,428)
Intrinsic value of convertible debt and
  non-detachable warrants                      (500,000)              --         (500,000)
                                          -------------    -------------    -------------
Other expense                                        --          (46,770)         (46,770)
                                          -------------    -------------    -------------
     Total other income (expense) - net      (1,555,135)        (500,017)      (2,081,551)
                                          -------------    -------------    -------------

NET LOSS                                  $  (7,789,905)   $  (3,113,624)   $ (14,639,555)
                                          =============    =============    =============

NET LOSS PER SHARE  - Basic and
     Diluted                              $        (.02)   $        (.01)   $        (.04)
                                          =============    =============    =============

SHARES USED IN COMPUTING NET
   LOSS PER SHARE - Basic and Diluted       499,603,483      451,366,200      393,357,702
                                          =============    =============    =============
</TABLE>

See notes to consolidated financial statements


                                       F-4
<PAGE>

                             DNAPRINT GENOMICS, INC.
                        (A DEVELOPMENT STAGE ENTERPRISE)

            CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)

<TABLE>
<CAPTION>
                                                                                          Deficit    Deficit     Accum-
                                                                                         incurred  accumulated   ulated
                                                                    Stock     Deferred   prior to     during      Other
                                          Additional    Common     Subscrip-    Stock      devel-      the       Compre-
                       Common Stock         Paid-In     Stock       tions      Compen-     opment  development  hensive
                     Shares      Amount     Capital   Subscribed  Receivable   sation      stage      stage      Income    Total
                  -----------------------------------------------------------------------------------------------------------------
<S>               <C>           <C>        <C>        <C>          <C>          <C>    <C>        <C>          <C>      <C>
BALANCES,
 DECEMBER 10,
 1998              29,400,986    294,010   4,977,381                      --       --  (7,427,422)(44,244,627) 222,443  (46,178,215)

Stock issued
 for acquisition
 of DNAPrint
 genomics, Inc.
 (FL) in Pooling
 of Interests      192,000,00  1,920,000    (920,000) (1,000,000)         --                                                     --

Common stock
 issued for
 reorganization/
 court order at
 $0.02 per share  125,000,000  1,250,000   1,687,480                                                                      2,937,480

Adjustment due
 to subsidiaries
 liquation in
 bankruptcy                                                                                        63,355,809            63,355,809

Net loss for
 the year ended
 December 31,
 1999                                                                                             (20,061,513)          (20,061,513)

BALANCES,
 DECEMBER 31,
 1999             346,400,986  3,464,010   5,744,861          --  (1,000,000)      --  (7,427,422)   (950,331) 222,443       53,561

Stock issued for
advertising and
marketing services
at $.02 per share   8,000,000     80,000      80,000                                                                        160,000

Increases in stock
 issued for
 acquisition of
 land at
 $.075 per share   30,000,000    300,000   1,700,000                                                                      2,000,000

Net loss for the
 year ended
 December 31,
 2000                                                                                                (191,789)             (191,789)

Unrealized loss
 on securities                                                                                       (197,298)             (197,298)

Subscription
 receivable
  payments                                                           539,500                                                539,500

Deferred stock
 compensation
 related to stock
 option grants                               731,450                         (731,450)

Dividend paid in
 common stock of
 Heroes, Inc.                                                                                      (1,988,228)           (1,988,228)

BALANCES,
 DECEMBER 31,
  2000            384,400,986  3,844,010   8,256,311          --    (460,500)(731,450) (7,427,422) (3,130,348)  25,145      375,746

Common stock
 issuances:                                                                                                         --

 Via 506 Private
  Placement at
  $.05 per share   14,324,000    143,240     572,960                      --       --          --          --       --      716,200

  For consulting
   services at
   $.05 per share     800,000      8,000      32,000                      --       --          --          --       --       40,000

  Through funding
   agreement with
   TBFI at
   $.05 per share   7,816,620     78,166     312,665                      --       --          --          --       --      390,831

  From exercise of
   nonqualified
   stock options
   at $.05 per
   share           11,250,000    112,500     574,375                      --       --          --          --       --           --

  For bankruptcy
   settlements at
   $.02 per share  10,695,768    106,958     106,958                      --       --          --          --       --      213,916

Loss on investment         --         --          --                      --       --          --          --  (25,145)     (25,145)

Recovery of
 subscription
 receivables               --         --          --                 460,500       --          --          --       --      460,500

Deferred stock
compensation
related to stock
option grants              --         --      22,100                      --  (22,100)         --          --       --           --

Amortization of
 deferred stock
 compensation              --         --          --                      --  219,530          --          --       --      219,530

Net loss for
 the year ended
 December 31, 2001         --         --          --                      --       --          --  (2,593,906)      --   (2,593,906)

BALANCES,
 DECEMBER 31,
 2001             429,287,374  4,292,874   9,877,369          --          -- (534,020) (7,427,422) (5,724,254)      --      484,547
</TABLE>

(Continued)

See notes to consolidated financial statements


                                       F-5
<PAGE>

<TABLE>
<CAPTION>
                                                                                          Deficit    Deficit     Accum-
                                                                                         incurred  accumulated   ulated
                                                                    Stock     Deferred   prior to     during      Other
                                          Additional    Common     Subscrip-    Stock      devel-      the       Compre-
                       Common Stock         Paid-In     Stock       tions      Compen-     opment  development  hensive
                     Shares      Amount     Capital   Subscribed  Receivable   sation      stage      stage      Income    Total
                  -----------------------------------------------------------------------------------------------------------------
<S>               <C>           <C>        <C>        <C>          <C>          <C>    <C>        <C>          <C>      <C>
Common
 stock issuances:

 Via 506 Private
  Placement at
  $.018 per share   1,388,888     13,889      11,111                      --       --          --          --       --       25,000

 For consulting
  services at
  $.04 per share       50,000        500       1,500                      --       --          --          --       --        2,000

 For consulting
  services at
  $.063 per share      42,063        420       2,229                      --       --          --          --       --        2,649

 For consulting
  services at
  $.067 per share      50,000        500       2,850                      --       --          --          --       --        3,350

 From exercise
  of nonqualified
  stock options at
  $.051 per share   2,555,555     25,556      97,943                      --       --          --          --       --      123,499

 From exercise
  of nonqualified
  stock options at
  $.059 per share   2,500,000     25,000     122,500                      --       --          --          --       --      147,500

 From exercise of
  employee stock
  options             944,978      9,450      (9,450)                     --       --          --          --       --           --

 For settlement of
  related party
  notes
  payable at
  $.035 per share  14,547,355    145,473     771,010                      --       --          --          --       --      916,483

 Per settlement
  agreement with
  TBFI                     --         --      34,200                      --       --          --          --       --       34,200

 Deferred stock
  compensation
  related
  to stock option
  grants                   --         --     171,800                      -- (171,800)         --          --       --           --

 Amortization of
  deferred stock
  compensation             --         --          --                      --  269,694          --          --       --      269,694

 Net loss for the
  year ended
  December 31,
  2002                     --         --          --                      --       --          --  (3,113,624)      --   (3,113,624)

 BALANCES,
  DECEMBER 31,
  2002            451,366,213 $4,513,662 $11,083,062   $      --          -- $(436,126)$(7,427,422)$(8,837,878) $   --  $(1,104,702)

Common stock
  issuances:
                                                                                                                        -----------
 For settlement of
  related party
  notes payable
  and interest
  at $0.032        17,307,983    173,079     380,776                                                                         53,855

 For settlement of
  related party
  notes payable
  and interest at
  $0.032            8,067,238     80,672     177,479                                                                         58,151

 For settlement of
  related party
  notes payable
  and interest at
  $0.074            2,710,043     27,100     173,443                                                                        200,543

 For settlement of
  related party
  notes payable
  and interest
  at $0.072         8,092,592     80,926     501,741                                                                         82,667

 For consulting
  services at
  $.030
  per share         2,780,867     27,809      55,617                                                                         83,426

 For consulting
  services at
  $.048
  per share           333,725      3,337      12,665                                                                         16,002

 For consulting
  and scientific
  advisory board
  services at
  $.073
  per share           269,937      2,699      17,133                                                                         19,832

 For scientific
  advisory board
  services at
  $.048 per share     100,000      1,000       3,750                                                                          4,750

 For accounting
  services at
  $.026
  per share            84,150        841       1,358                                                                          2,199

 For legal
  services at
  $.068 per share      58,330        583       3,360                                                                          3,943

 For legal
  services at
  $.077 per share      70,778        708       4,756                                                                          5,464
</TABLE>

(Continued)

See notes to consolidated financial statements


                                       F-6
<PAGE>

<TABLE>
<CAPTION>
                                                                                          Deficit    Deficit     Accum-
                                                                                         incurred  accumulated   ulated
                                                                    Stock     Deferred   prior to     during      Other
                                          Additional    Common     Subscrip-    Stock      devel-      the       Compre-
                       Common Stock         Paid-In     Stock       tions      Compen-     opment  development  hensive
                     Shares      Amount     Capital   Subscribed  Receivable   sation      stage      stage      Income    Total
                  -----------------------------------------------------------------------------------------------------------------
<S>               <C>           <C>        <C>        <C>          <C>          <C>    <C>        <C>          <C>      <C>
For legal
 services at
 $.064 per share       63,594        636       3,447                                                                          4,083

For legal
 services at
 $.05 per share        59,803        598       2,422                                                                          3,020

For legal
 services at
 $.048 per share      128,074      1,281       4,918                                                                          6,199

For consulting
 services at
 $.031
 per share            134,589      1,346       2,876                                                                          4,222

For legal
 services at
 $0.027 per
 share                843,912      8,439      14,566                                                                         23,005

For consulting
 services at
 $.050                652,166      6,522      25,781                                                                         32,303

From exercise
 of nonqualified
 stock options at
 $.029 per share    5,882,352     58,824     111,764                                                                        170,588

From exercise of
 nonqualified
 stock options at
 $.135 per share    4,166,666     41,667     520,833                                                                        562,500

From exercise of
 nonqualified
 stock
 options at
 $.110 per share    4,166,666     41,667     416,666                                                                        458,333

From exercise of
 nonqualified
 stock options
 at $.072 per
 share              3,030,303     30,303     187,879                                                                        218,182

From exercise of
 nonqualified
 stock
 options at
 $.061 per share    3,225,806     32,258     164,516                                                                        196,774

Via 506 private
 placement at
 $A.015 per share     666,667      6,667       3,333                                                                         10,000

Via 506 private
 placement at
 $.014 per share    2,777,778     27,778      12,222                                                                         40,000

For settlement
 with TBFI. at
 $.082 per share    4,763,662     47,637     342,983                                                                        390,620

Conversion of
 debt to common
 stock and
 exercise of
 non-detachable
 warrants           1,063,829     10,638      29,362                                                                         40,000

Conversion of
 debt to common
 stock and
 exercise of
 non-detachable
 warrants           1,030,912     10,309      29,691                                                                         40,000

Amortization of
 deferred stock
 compensation                                                      1,378,637                                              1,378,637

Deferred stock
 compensation
 costs                                                            (1,848,750)                                            (1,848,750)

Stock
 options cancelled                          (170,883)                170,883                                                     --

Common
 stock subscribed                          1,836,824   1,153,663                                                          2,990,487

Intrinsic value
 of convertible
 debt and warrants                           500,000                                                                        500,000

Stock issuance
costs                                       (173,523)                                                                      (173,523)

Warrants issued
 for stock
 issuance costs                               80,000                                                                         80,000

Net loss for
 the year ended
 December 31,
  2003                                                                                             (7,789,905)           (7,789,905)

BALANCES,
 DECEMBER 31,
 2003             523,898,635  5,238,986  16,360,817   1,153,663          -- (735,356) (7,427,422)(16,627,783)      --   (2,037,095)
</TABLE>

See notes to consolidated financial statements


                                       F-7
<PAGE>

                             DNAPRINT GENOMICS, INC.
                        (A DEVELOPMENT STAGE ENTERPRISE)

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                                     FOR THE PERIOD
                                                  FOR THE            FOR THE        DECEMBER 10, 1998
                                                 YEAR ENDED         YEAR ENDED     (DATE OF INCEPTION)
                                                DECEMBER 31,       DECEMBER 31,         THROUGH
                                                   2003               2002          DECEMBER 31, 2003
                                                ------------       ------------    -------------------
<S>                                             <C>                <C>                <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss                                        $ (7,789,905)      $ (3,113,624)      $(14,639,555)
Adjustments to reconcile net loss
 to net cash used in operating activities:
Depreciation and amortization                        125,640            179,146            488,917
Provision for bad debts                               (1,750)            13,488             11,738
Impairment of assets                                      --            254,434            254,434
Loss on disposal of investments                           --                 --             11,772
Loss on disposal of property and
 equipment                                                --              5,039              5,039
Amortization of deferred stock
 compensation                                        174,231            269,694            663,455
Amortization of deferred
 compensation                                        740,101                 --            740,101
Common stock issued for interest
 expense on related party notes
 payable                                             893,052            407,326          1,300,378
Common stock issued for
 reorganization/court order                               --                 --            343,000
Common stock issued for services                   1,647,254              7,999          2,236,668
Common stock issued for
 bankruptcy settlement                                    --                 --             28,080
Stock issued for settlement                          152,437                 --            152,437
Intrinsic value of convertible
 debt and non-detachable warrants                    500,000                 --            500,000
Stock based compensation                           1,943,906                 --          1,943,906
(Increase) decrease in
 receivables                                           2,058            (23,099)           304,650
Decrease (increase) in prepaid
 expenses and other assets                        (1,452,380)             9,824         (1,471,133)
Increase in accounts payable and
 accrued liabilities                               1,535,544            418,398          2,327,979
NET CASH USED IN OPERATING
 ACTIVITIES                                       (1,529,812)        (1,571,375)        (4,798,134)
CASH FLOWS FROM INVESTING
 ACTIVITIES:
Purchases of property and
 equipment                                           (14,165)           (16,454)          (775,529)
Proceeds from disposal of
 property and equipment                                   --             10,100             10,100
Net bankruptcy adjustment                                 --                 --            511,274
NET CASH USED IN INVESTING
 ACTIVITIES                                          (14,165)            (6,354)          (254,155)
CASH FLOWS FROM FINANCING
 ACTIVITIES:
Proceeds from notes payable -
 related party                                       231,657          1,255,379          1,487,036
Proceeds from settlement with
 Tampa Bay Financial                                 238,183             34,200            272,383
Advances from Tampa Bay
 Financial, net                                           --             50,815            384,581
Proceeds from issuance of common
 stock                                               906,478            295,999          2,393,427
Proceeds from convertible
 debenture                                           500,000                 --            500,000
Repayment of notes payable                                --                 --           (350,800)
Collections from stock
 subscriptions                                            --                 --            836,960
Principal payments on capital
 lease obligation                                    (78,200)           (89,876)          (205,377)
NET CASH PROVIDED BY FINANCING
 ACTIVITIES                                        1,798,118          1,546,517          5,318,210
NET INCREASE (DECREASE) IN CASH
 AND CASH EQUIVALENTS                                254,141            (31,212)           265,921
CASH AND CASH EQUIVALENTS,
 BEGINNING OF PERIOD                                  11,780             42,992                 --
CASH AND CASH EQUIVALENTS, END
 OF PERIOD                                      $    265,921       $     11,780       $    265,921
</TABLE>

(Continued)


                                       F-8
<PAGE>

<TABLE>
<CAPTION>
                                                                                     FOR THE PERIOD
                                                  FOR THE            FOR THE        DECEMBER 10, 1998
                                                 YEAR ENDED         YEAR ENDED     (DATE OF INCEPTION)
                                                DECEMBER 31,       DECEMBER 31,         THROUGH
                                                   2003               2002          DECEMBER 31, 2003
                                                ------------       ------------    -------------------
<S>                                             <C>                <C>                <C>
SUPPLEMENTAL DISCLOSURE
 OF CASH FLOW INFORMATION:
Approximate Interest Paid                       $         --       $     24,000       $     53,300
Income taxes paid                               $         --       $         --       $         --
SUPPLEMENTAL DISCLOSURE OF NON-CASH
 INVESTING AND FINANCING ACTIVITIES:
Stock subscription receivable arising
 from acquisition of DNAPrint
 genomics, Inc. (Florida)                       $         --       $         --       $  1,000,000
Common stock issued for related party
 notes payable                                  $    702,164       $    509,158       $  1,211,322
Unrealized loss on long-term
 investments                                    $         --       $         --       $   (222,443)
Common stock issued for land
 subsequently swapped for investment
 in Heroes, Inc                                 $         --       $         --       $  2,000,000
Dividend paid in stock of Heroes,
 Inc.                                           $         --       $         --       $ (1,988,228)
Common stock issued for
 reorganization /court order arising
 from conversion of claim to stock              $         --       $         --       $ (2,905,500)
Conversion of Tampa Bay Financial
 advances to stock                              $         --       $         --       $    453,331
Equipment leased under capital lease            $     11,193       $         --       $    259,905
Deferred compensation on grants of
 stock options                                  $         --       $    171,800       $    925,350
Deferred compensation reduced for
 stock options cancelled                        $   (170,883)      $         --       $   (170,883)
Stock to be issued for compensation             $  2,588,250       $         --       $  2,588,250
Debenture converted into common stock           $     30,000       $         --       $     30,000
Warrants issued for stock issuance
 costs                                          $     80,000       $         --       $     80,000
</TABLE>

See notes to consolidated financial statements


                                       F-9
<PAGE>

                             DNAPRINT GENOMICS, INC.
                        (A DEVELOPMENT STAGE ENTERPRISE)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NATURE OF OPERATIONS

DNAPrint genomics, Inc. ("DNAP Utah"), which was organized for the purpose of
investing in all forms of investments, was initially incorporated under the laws
of the State of Utah on January 3, 1983 as Lexington Energy, Inc, and
subsequently changed its focus to human genome sciences. In connection with this
change in focus, on July 15, 2000, DNAP Utah acquired DNAPrint genomics, Inc. a
Florida corporation ("DNAP Florida") through the issuance of 192,000,000 shares
of its common stock which was accounted for as a pooling of interests. DNAP
Florida specializes in the research and development of genomic products and
provides scientific services and tests to the genealogy, forensic,
pharmaceutical and genetics markets. As a result of this acquisition, the
accompanying consolidated financial statements include the accounts of DNAP Utah
and its wholly-owned operating subsidiary, DNAP Florida (collectively referred
to as "we", "us", "our"). All significant intercompany accounts and balances
have been eliminated in consolidation.

On December 10, 1998, one of our predecessors, Catalyst Communications, Inc,
filed a petition for relief under Chapter 11 of the federal bankruptcy laws of
the United States Bankruptcy Court for the Middle District of Florida, Tampa
Division (Case No. 98-21641-8P1). We emerged from Chapter 11 on June 7, 2000 and
accordingly were no longer under the protection of the bankruptcy court as of
such date. Because holders of our existing voting shares immediately before
confirmation received more than 50% of the voting shares of the reorganized
equity, we did not qualify for fresh start accounting under SOP 90-7.

On October 19, 2000, we merged with S.D.E. Holdings 1, Inc., an unrelated Nevada
company. S.D.E. Holdings, Inc., was a reporting company under Section 12 (g) of
the Securities Exchange Act of 1934. The purpose of the merger was to allow us
to file a 211 application with the National Association of Securities Dealers,
Inc., as a successor reporting company to become listed on the NASD OTC Bulletin
Board. S.D.E. Holdings had no substantive assets, liabilities, revenues or
expenses since its inception, and all equity of S.D.E. Holdings, 1, Inc. was
cancelled as part of the transaction.

DNAPrint genomics, Inc. has been and continues to be a development stage company
as described in Financial Accounting Standards Board Statement No. 7. We
continue to devote substantially all of our efforts in initiating and developing
our planned principal operations. While sales of our genealogy product
ANCESTRYbyDNA(TM) are increasing, our forensic product, DNAWitness(TM) has just
been introduced in the marketplace. Our pharmacogenomics products are still in
development and genotyping services are in the initial introductory stage.

REVENUE RECOGNITION

In accordance with SEC Staff Accounting Bulletin Topic 13, revenues are
recognized when we have persuasive evidence an arrangement exists including a
fixed price, collection is reasonably assured, the services have been provided
and delivered to the customer and no additional performance is required by us.
We are currently providing ancestry, forensic, and genotyping services. Deferred
revenue represents the unearned portion of payments received in advance of
ancestry tests being completed and delivered to our customers. Our services are
performed at the request of our customers and after the agreement/arrangement
has been entered into, we do not generally give refunds to our customer as we
have begun to incur or incurred the costs associated with that service. Our
software program ADMIXMAP is currently for internal use solely by our scientists
and we do not generate revenue from any sales thereof.

USE OF ESTIMATES

The preparation of financial statements in accordance with accounting principles
generally accepted in the United States of America requires management to make
certain estimates and assumptions that affect the reported amounts of assets and
liabilities and the disclosure of contingent assets and liabilities at the date
of the financial statements and the reported amounts of revenues and expenses
during the reporting period. Estimates that are critical to the accompanying
consolidated financial statements include the accrual and related compensation
and/or deferred compensation for federal and state income taxes that we have
agreed to pay for various executives on stock grants (see Note G). It is at
least reasonably possible that our estimates could change in the near term with
respect to these matters.

We estimate the various accruals we record based upon the information we have
available at the time the accruals are recorded. Any changes to these estimates
could impact the accrual and related expense accounts. We recorded an accrual
for federal and state income taxes that we agreed to pay for various executives
on stock grants based upon the information we had at the time the current
financial statements were prepared. This estimate could change based upon the
actual tax that is paid by the various executives compared to the accrual we
booked. Some changes to these estimates could have a significant impact on the
accrual and related compensation expense and/or deferred compensation.

FINANCIAL INSTRUMENTS

Our financial instruments include cash, receivables, current assets and current
liabilities. We believe the estimated fair value of such financial


                                      F-10
<PAGE>

instruments at December 31, 2003 approximate their carrying value as reflected
in the consolidated balance sheets due to their short-term nature. It is not
practicable for us to estimate the fair value of our convertible debenture as
there are not currently any quoted market prices available. We are in
development stage and it is difficult to get debt financing as well as this
debenture has a convertible feature, thus it is difficult to determine what the
fair value would be. The carrying amount for this convertible debenture at
December 31, 2003 is $470,000 and the interest rate is 8% payable monthly.

ACCOUNTS RECEIVABLE

Accounts receivable consist of ancestry, forensic, and genotyping services to
customers. We generally require prepayment for ancestry services, and perform
ongoing credit evaluations of our customers. We record an allowance for doubtful
accounts to allow for any amounts that may not be recoverable, which is based on
an analysis of our prior collection experience, customer credit worthiness, and
current economic trends. Based on management's review of accounts receivable, an
allowance for doubtful accounts of $500 is considered adequate. We determine
receivables to be past due based on the payment terms of original invoices.

CONCENTRATIONS OF CREDIT RISK

Financial instruments, which potentially subject us to significant
concentrations of credit risk, consist primarily of cash and receivables. With
respect to cash and cash equivalents, we maintained all of our cash and cash
equivalents in deposit accounts with one financial institution in the United
States, which deposit accounts at times may exceed federally insured limits.
Generally, these deposits may be redeemed upon demand and, therefore, bear
minimal risk.

PROPERTY AND EQUIPMENT

Property and equipment are recorded at the lower of cost or fair value. Major
additions are capitalized, while minor additions and maintenance and repairs,
which do not extend the useful life of an asset, are charged to operations when
incurred. When property and equipment are sold or otherwise disposed of, the
asset account and related accumulated depreciation account are relieved, and any
gain or loss is included in operations. Depreciation is provided primarily using
the straight-line method over the assets' estimated useful lives of three to ten
years. Amortization of leasehold improvements, included with depreciation, is
computed using the straight-line method over the estimated useful life of the
asset or the term of the lease, whichever is shorter. Estimated useful lives are
periodically reviewed and, where appropriate, changes are made prospectively.
For income tax purposes, we use the accelerated methods for all assets as
required by the Internal Revenue Service.

LONG LIVED ASSETS

We periodically review our long-lived assets for indications of impairment. If
the value of an asset is considered impaired, an impairment loss is recognized.
During the year ended December 31, 2002, we recognized impairment losses
aggregating $254,434, on two pieces of our equipment. These amounts are included
in other operating expenses in our December 31, 2002 consolidated statement of
operations. The impairment losses resulted because we projected negative cash
flows for the foreseeable future; accordingly, the assets have been written down
to their estimated fair market values (as determined by management). There was
no impairment of long-lived assets during the year ended December 31, 2003.

RESEARCH & DEVELOPMENT

Research and Development ("R&D") expenses are fully charged to the consolidated
statements of operations when incurred. All of our R&D is performed internally
and no R&D is contracted nor do we perform R&D for other entities. We do have
consulting arrangements which provides added depth to our team. These
arrangements are typically based upon a fee paid monthly or quarterly. We also
purchase samples that we use in our testing and these samples are expensed when
purchased. Our R&D costs also include salaries and related personnel expenses,
direct materials, laboratory supplies, equipment expenses and administrative
expenses that are allocated to R&D based upon personnel costs.

INCOME TAXES

Deferred tax assets and liabilities are recognized for the estimated future tax
consequences attributable to differences between the financial statements
carrying amounts of existing assets and liabilities and their respective income
tax bases. Deferred tax assets and liabilities are measured using enacted tax
rates expected to apply to taxable income in the years in which those temporary
differences are expected to be recovered or settled. The effect on deferred tax
assets and liabilities of a change in tax rates is recognized as income in the
period that included the enactment date.

Valuation allowances have been established against our deferred tax assets due
to uncertainties in our ability to generate sufficient taxable income in future
periods to make realization of such assets more likely than not. We have not
recognized an income tax benefit for our operating losses generated during 2003
and 2002 based on uncertainties concerning our ability to generate taxable
income in future periods. There was no income tax receivable at December 31,
2003 and 2002. In future periods, tax benefits and related deferred tax assets
will be recognized when management considers realization of such amounts to be
more likely than not.


                                      F-11
<PAGE>

STATEMENT OF CASH FLOWS

For purposes of the statement of cash flows, we consider all highly liquid
investments purchased with an original maturity of three months or less to be
cash equivalents.

ADVERTISING

Advertising costs, which approximated $2,075 and $4,600, respectively, for the
years ended December 31, 2003 and 2002, are expensed as they are incurred.

STOCK-BASED COMPENSATION

We account for equity instruments issued to employees for services based on the
fair value of the equity instruments issued and account for equity instruments
issued to those other than employees based on the fair value of the
consideration received or the fair value of the equity instruments, whichever is
more reliably measurable. We recognize as expense the fair value of all
stock-based awards to employees on the date of grant and to those other than
employees based upon the measurement date. The amount related to the value of
the stock awards is amortized on a straight-line basis over the required service
periods.

For all stock option awards to employees and board of directors, we have elected
to apply the intrinsic value based method of accounting as prescribed by
Accounting Principles Board Opinion No. 25 " Accounting for Stock Issued to
Employees " and related Interpretations. Under the intrinsic value based method,
compensation cost is the excess, if any, of the quoted market price of the stock
at grant date or other measurement date over the amount an employee must pay to
acquire the stock. The following table illustrates the effect on net income and
earnings per share had we applied the fair value recognition provisions of BASB
Statement No. 123 to stock-based employee compensation:

                                                           2003          2002

Net loss as reported                                    $7,789,905    $3,113,624
Total stock-based employee compensation
 expenses determined under fair value based
 method for all awards, net of related tax effects          42,195        99,000
Pro forma net loss                                      $7,832,100    $3,212,624
Loss per share basic and diluted:
As reported                                             $      .02    $      .01
Pro forma                                               $      .02    $      .01

See footnote G, for additional disclosure and discussion of our option plan and
option activity.

RECENT PRONOUNCEMENTS

In December 2002, the Financial Accounting Standards Board (FASB) issued SFAS
148, " Accounting for Stock-Based Compensation-Transition and Disclosure" . This
Statement amends FASB Statement No. 123, " Accounting for Stock-Based
Compensation ", to provide alternative methods of transition for a voluntary
change to the fair value based method of accounting for stock-based employee
compensation. In addition, this Statement amends the disclosure requirements of
Statement 123 to require prominent disclosures in both annual and interim
financial statements about the method of accounting for stock-based employee
compensation and the effect of the method used on reported results. We adopted
SFAS 148 on January 1, 2003. We continue to use the intrinsic value method of
accounting under APB Opinion No. 25, "Accounting for Stock Issued to Employees"
to account for our stock-based employee compensation.

In January 2003, the FASB issued Interpretation No. 46, " Consolidation of
Variable Interest Entities, an Interpretation of Accounting Research Bulletin
No. 51 " (the "Interpretation"). The Interpretation requires the consolidation
of variable interest entities in which an enterprise absorbs a majority of the
entity's expected losses, receives a majority of the entity's expected residual
returns, or both, as a result of ownership, contractual, or other financial
interests in the entity. Currently, entities are generally consolidated by an
enterprise that has controlling financial interest through ownership of a
majority voting interest in the entity. The Interpretation was originally
immediately effective for variable interest entities created after January 31,
2003, and effective in the fourth quarter of the Company's fiscal 2003 for those
created prior to February 1, 2003. However, in October 2003, the FASB deferred
the effective date for those variable interest entities created prior to
February 1, 2003, until the Company's first quarter of fiscal 2004. The Company
has substantially completed the process of evaluating this interpretation and
believes its adoption will not have a material impact on its consolidated
financial statements.

In May 2003, the FASB issued SFAS No. 150, "Accounting for Certain Financial
Instruments with Characteristics of both Liabilities and Equity". This statement
establishes standards for how an issuer classifies and measures in its statement
of financial position certain financial instruments with characteristics of both
liabilities and equity. In accordance with the standard, a financial instrument
that embodies an obligation for the issuer is required to be classified as a
liability (or an asset in some circumstances). SFAS No. 150 is effective for
financial instruments entered into or modified after May 31, 2003, and otherwise
is effective at the beginning of the first interim period beginning after June
15, 2003. The adoption of SFAS No. 150 did not have any impact on our financial
statements.


                                      F-12
<PAGE>

NET LOSS PER COMMON SHARE

Basic net loss per share is computed by dividing the net loss available to
common stockholders by the weighted average number of common shares outstanding
during the period. Diluted net loss per share is computed by dividing the net
loss for the period by the weighted average number of common and common
equivalent shares outstanding during the period. Common equivalent shares
outstanding as of December 31, 2003 and 2002, which consist of employee stock
options, warrants, convertible debenture as well as the issuance of common stock
under compensation agreements, have been excluded from diluted net loss per
common share calculations because they are anti-dilutive. Accordingly, basic and
diluted net loss per share is identical as of December 31, 2003 and 2002 and for
the period December 10, 1998 to December 31, 2003.

NOTE B - GOING CONCERN

Our consolidated financial statements are prepared using accounting principles
generally accepted in the United States of America applicable to a going
concern, which contemplate the realization of assets and liquidation of
liabilities in the normal course of business. We have incurred losses since our
inception, and have experienced and continue to experience negative cash flows
from operations. In addition, we have working capital and stockholders'
deficiencies of approximately $1,540,922 and $2,037,095 at December 31, 2003,
and will continue to have ongoing requirements for substantial additional
capital investment to accomplish our business plan over the next several years.
Over the past two years, our operations have been funded through related party
funding, sales of common stock and the issuance of a convertible debenture. We
continue to experience some success generating operating revenues; however, we
do not expect our revenue stream to be sufficient to cover costs of operations
in the immediate future. We anticipate that the funding we expect to receive
from the minimum conversions of the outstanding debenture into common stock and
the related exercise of the non-detachable warrants will fund our operating
activities through 2004. However, there can be no assurance the minimum
conversions of the outstanding debenture into common stock and the related
exercise of the non-detachable warrants will be exercised and/or that we will
have the cash flow to meet our operating requirements. These factors, among
others, indicate that we may be unable to continue as a going concern for a
reasonable period of time.

NOTE C - PROPERTY AND EQUIPMENT - NET

Property and equipment consists of the following at December 31, 2003:

                                                           2003

       Leased equipment under capital lease             $  86,122
       Furniture, fixtures and other equipment            347,697
       Leasehold improvements                             169,813
       Subtotal                                           603,632
       Less accumulated depreciation and amortization    (321,327)
       Property and equipment - net                     $ 282,305

Accumulated depreciation and amortization includes $36,429 of accumulated
depreciation of leased equipment as of December 31, 2003.

NOTE D - INCOME TAXES

We recognized losses for both financial and tax reporting purposes during each
of the periods in the accompanying statements of operations. Accordingly, no
provision for income taxes and/or deferred income taxes payable has been
provided for in the accompanying financial statements.

Since our acquisition of DNAP Florida, we have incurred net operating losses for
income tax purposes of approximately $8,500,000. These net operating loss carry
forwards expire in various years through the year ended December 31, 2023,
however because we have experienced changes in control and have incurred
significant operating losses, utilization of the income tax loss carry forwards
are not assured. As a result, the non-current deferred income tax asset arising
from these net operating loss carry forwards and from other temporary
differences are not recorded in the accompanying balance sheets because we
established a valuation allowance to fully reserve such assets due to the
uncertainty of our realization of this benefit.

In addition to the above, we also incurred significant net operating losses
prior to our acquisition of DNAP Florida. However, because of our bankruptcy
proceedings, changes in control, and various other matters the availability of
these losses to offset future taxable income is so uncertain that no deferred
income tax asset has been recorded.

At December 31, 2003 our non-current net deferred income tax assets (assuming an
effective income tax rate of approximately 38%) consisted of the following:


                                      F-13
<PAGE>

Non-current deferred income tax asset:

                                     AMOUNTS

Deferred income tax asset:

Net operating loss carry forwards                                   $ 3,189,000
Bonuses                                                                 704,000
Option expense                                                          250,000
Impairment of assets                                                     96,000
Total deferred income tax asset                                       4,239,000
Deferred income tax liability:
Deferred stock compensation included in employee
 compensation in 2003                                                  (242,000)
Total deferred income tax liability                                    (242,000)
Less valuation allowance                                             (3,997,000)
Net deferred income tax asset                                       $        --

Differences between the federal benefit computed at a statutory rate and our
effective tax rate and provision are as follows as of December 31, 2003 and
2002:

                                                          2003          2002

Statutory benefit                                    $ (2,648,000)   (1,059,000)
State tax benefit, net of federal effect                 (283,000)     (124,000)
Increase in deferred income tax valuation
 allowance                                              1,937,000     1,126,000
Intrinsic value of convertible debt and
 non-detachable warrants                                  328,000            --
Non-deductible expenses                                   473,000            --
Non-deductible interest expense                           188,000            --
Other                                                       5,000        57,000
                                                     $         --            --

NOTE E - CONVERTIBLE DEBENTURE

On November 25, 2003, we closed on a $500,000, 8% convertible debenture with
non-detachable warrants with La Jolla Cove Investors, Inc. ("LJCI"). We pay
interest on a monthly basis with a principal balloon payment due on the maturity
date of November 24, 2005. LJCI has the right to convert the debenture and
exercise the warrants after the first full calendar month after the registration
statement was filed (which was filed on December 19, 2003). Per the agreement,
LJCI shall convert at least 5% of the face value of the debenture each calendar
month into common shares of the Company. The number of common stock shares into
which this debenture may be converted is equal to the dollar amount of the
debenture being converted multiplied by sixteen, minus the product of the
conversion price multiplied by fifteen times the dollar amount of the debenture
being converted, and the entire foregoing result shall be divided by the
conversion price. The conversion price is equal to the lesser of (i) $0.20 or
(ii) 80% of the average of the five lowest daily value weighted average price of
our common stock during the twenty trading days prior to LJCI's election to
convert.

Per the agreement, if LJCI would be deemed the beneficial owner of more than
4.99% of the then outstanding share of our common stock, then LJCI shall not
have the right to convert any portion of this debenture that would exceed 4.99%

The non-detachable warrants must be exercised concurrently with the conversion
of debt to common stock by LJCI. LJCI has the right to exercise warrants
equaling fifteen times the dollar amount of the debenture being converted at an
exercise price of $1.00. If LJCI does not convert at least 5% of the warrants
per month, then LJCI will not be able to collect interest on the debenture for
that month. The 7,500,000 warrants issued to LJCI expire on November 25, 2006.

On February 18, 2004, the Convertible debenture and Warrant to Purchase Common
Stock agreements were amended between LJCI and us. If LJCI does not convert at
least 5% of the face value of the debenture and exercise at least 5% of the
warrants in any particular calendar month, LJCI may wire to us $375,000 less the
dollar amount of warrants exercised in that month within five business days of
the end of the month. Should LJCI fail to wire DNAP such funds, LJCI shall not
be entitled to collect interest on the debenture for that month. If breached
more than once, than DNAP may terminate the agreements with LJCI and the
debenture becomes due six months thereafter with accrued interest.


                                      F-14
<PAGE>

If the debenture principal amount declines below $100,000, LJCI shall be
permitted, for a period of 30 days, to add up to $250,000 of additional
principal to the debenture on the same terms and conditions as the debenture,
except that such additional principal shall bear interest at 2%.

During 2003, we recorded $500,000 for the intrinsic value associated with the
convertible debt and non-detachable warrants which was recorded as interest
expense and capitalized $30,070 of deferred financing costs which will be
amortized to interest expense over the two-year life of the note. Additionally,
during 2003, we recorded $5,000 of interest expense on this note including
amortization of deferred financing costs of $3,000.

During December 2003, LJCI converted $30,000 of convertible debentures into our
common stock and exercised 450,000 of the non-detachable warrants. See Note G
below for a further discussion of this conversion. LJCI converted additional
debentures into common stock after yearend. See Note J below for additional
information on these conversions.

NOTE F - NOTES PAYABLE TO RELATED PARTIES

In addition to the notes outstanding at December 31, 2002 of $746,222, during
2003, we received additional funds of $231,657 from our Chief Scientific Officer
and his father in accordance with a funding agreement we entered into with them
in February 2002 and which was subsequently amended during October 2002. We also
had rent payments of $22,328 which were paid by issuing notes payable to George
Frudakis (the rent was owed to a company he owned). George Frudakis is a
shareholder of the Company and the father of our Chief Scientific Officer, Tony
Frudakis. There is no other relationship between the Company and George
Frudakis. The principal and 8% interest on these notes were due at December 30,
2003. The funding agreement provided that if we are unable to pay the notes and
accrued interest, the lender's only remedy is to require us to issue shares of
our stock as consideration for satisfaction of the debt. The number of shares to
be issued in satisfaction of the debt will be based on a price of $.035 per
share if the weighted average price of our stock is $.05 per share or above;
alternatively if the weighted average price of our stock is less than $.05, the
number of shares due will be calculated using a 40% discount to the market
price. Notwithstanding this, in no event will the shares to be issued under this
arrangement be based on a price of less than $.01 per share.

During January and July 2003, we elected to satisfy approximately $549,000 and
$174,000, respectively of the related party notes and accrued interest and as
satisfaction for same we issued 25,375,221 and 10,802,635, respectively shares
of our common stock. Because the issuance price was less than the fair market
value of our shares at the time of issuance, we recognized additional interest
expense in January and July, 2003 of approximately $263,000 and $609,000,
respectively as a result of these transactions.

At December 31, 2003, our notes payable to related parties is $298,043. The
notes of approximately $45,000 and accrued interest of approximately $4,000 owed
to George Frudakis was paid in full during January 2004. Subsequent to year-end,
the Company and Tony Frudakis agreed to extend the funding agreement with him
under the same terms until December 31, 2004. While we currently anticipate
having the funds to satisfy this remaining indebtedness at its maturity, if we
liquidate the indebtedness using discounted stock, then we will be required to
record additional interest expense arising from the difference between the fair
value and issuance price of our stock.

NOTE G - CERTAIN EQUITY TRANSACTIONS

COMMON STOCK

CONVERSION OF DEBENTURE AND EXERCISE OF WARRANTS

At December 31, 2003, LJCI converted $30,000 of convertible debentures into our
common stock and exercised 450,000 of the non-detachable warrants. This combined
transaction resulted in us recording a receivable of $422,955 (the funds were
sent by LJCI to our investment banking firm which wired us the funds early in
January 2004) which is net of $27,045 stock issuance costs and we issued
12,403,861 shares of the our common stock of which 2,094,741 were issued at
yearend and 10,309,120 were issued in early January 2004. At December 31, 2003,
we have $103,091 recorded in our common stock subscribed equity account for the
unissued shares.

STOCK ISSUED FOR PAYMENT OF RELATED PARTY NOTES

During January and July, 2003, we elected to satisfy approximately $549,000 and
$174,000, respectively of the related party notes and accrued interest and as
satisfaction for same we issued 25,375,221 and 10,802,635, respectively shares
of our common stock. Because the issuance price was less than the fair market
value of our shares at the time of issuance, we recognized additional interest
expense in January and July, 2003 of approximately $263,000 and $609,000,
respectively as a result of these transactions.

STOCK ISSUED FOR SERVICES

During 2003, we issued stock in lieu of cash payment to several service
providers including legal, accounting and marketing services. The total number
of shares issued in lieu of cash was 1,443,230 at a value of approximately
$52,135, which has been recorded as an expense during the year.


                                      F-15
<PAGE>

2002 Private Placement. During 2003, we received $50,000 for 3,444,445 shares of
common stock issued related to the 2002 private placement.

AGREEMENT WITH TAMPA BAY FINANCIAL, INC.

On June 24, 2003, Tampa Bay Financial, Inc. exercised a right to purchase
4,763,662 shares of our common stock at a price of $.05 per share. Because the
fair market value of our stock was $.082 at the date they exercised their right,
we have recognized $152,437 of expense during 2003. This amount has been
reflected as a settlement expense as this right was granted to Tampa Bay
Financial in connection with the termination of their funding agreement. In
accordance with the terms of this agreement, Tampa Bay Financial, Inc. retains
the rights to purchase an additional 14,786,018 shares of our common stock at a
price of $.05 per share at any time through February 2005. These shares remain
in escrow pursuant to such agreement.

SERVICE AGREEMENT

On July 14, 2003, we entered into an agreement with Sema4, Inc. d.b.a Semaphore.
In the agreement, Semaphore agrees to provide consulting and support services
for investor relations and general counsel activities. Semaphore will bill us at
an agreed upon hourly rate for investor relation services and general counsel
activities. Semaphore agreed to defer, until financing is completed, 60% of the
general counsel fees and 50% of the investor relation fees. The deferred billing
may be converted to equity at Semaphore's choosing and at a 20% discount. The
value of the stock will be based on the past fifteen day moving average prior to
the date of the valuation which will be the date of the invoice. During December
2003, we issued 652,166 shares of common stock with a value of approximately
$32,000. The discount amount of approximately $7,000 has been recorded as an
expense during the period.

During February 2004, we issued an additional 24,034 shares of common stock to
Semaphore with a value of approximately $1,300 and a discount amount of
approximately $300 for services that were provided during 2003. We recorded the
expense for these services during 2003 and at December 31, 2003, we have $240
recorded in our common stock subscribed equity account for the unissued shares.

CONSULTING AGREEMENT

During 2003, we issued stock under an ongoing agreement with a consultant who
provided us with certain marketing services. We received $500,000 in cash under
the option agreement and the consultant received approximately 20,471,793 shares
at a fair market value of approximately $1,606,000. As a result, we have
recognized approximately $1,106,000 in consulting expense during 2003.

CONSULTING AGREEMENT WITH SCIENTIFIC ADVISORY BOARD MEMBER

During June 2002, we entered into an agreement with a member of our Scientific
Advisory Board, to collaborate with us to develop a kit product that could be
used to infer Ancestry Admixture Ratios in human beings. We have agreed to
compensate the consultant with quarterly payments of $4,000 and 50,000 shares of
our common stock for the term of this contract. We have also agreed to provide
the consultant with a number of shares of our common stock equal to 2.5% of the
Net Revenues derived from a product developed with his help. The term of this
agreement is two years, and the parties may agree to renew it for consecutive
two-year terms. This individual also receives 50,000 shares of common stock
annually for the services he provides as a Scientific Advisory Board member.
During 2003, we issued 603,662 shares of common stock at a fair market value of
approximately $36,000 as payment for the quarterly shares owed, commission on
net revenues owed and the annual shares owed for providing the Scientific
Advisory Board services.

SCIENTIFIC ADVISORY BOARD MEMBER

On November 20, 2000, we entered into an agreement to pay 50,000 shares of
common stock annually for five years for the services performed as a member of
the scientific advisory board member. During 2004, this scientific advisory
board member was issued 100,000 shares of common stock at a fair market value of
approximately $5,000 in payment for his services provided during 2002 and 2003.

AGREEMENT WITH FORMER DIRECTOR LUCHESE

In February 2002, we entered into a Consulting Agreement and a Stock Purchase
Option with one of our former directors (this director resigned in January
2003). Under this agreement, the director has agreed to provide us substantial
management, business development and strategic planning advice through at least
May 31, 2003. As consideration for these services, and successful completion of
various other milestones, we agreed to issue up to 28,000,000 options of our
stock to this director at an exercise price of $0.01 per share. 1,680,000 of
these options were to be earned by this director by providing services as
required by the Consulting Agreement, but without the achievement of any
particular performance milestones. We recorded an expense of approximately
$56,000 during 2002 and $11,000 during 2003 related to the 1,680,000 options.

In addition to the consulting agreement discussed above, in November 2002, we
engaged this individual to provide us with consulting services valued at $25,000
per month (payable in shares of our common stock) for a period of four months.
As of December 31, 2002 we had recognized $50,000 of consulting expenses under
this arrangement, and in January 2003, we issued 2,780,867 shares of our common
stock as consideration for such liability (because the shares were issued at a
price less than the fair market value of our stock on the date of issuance, we
recorded additional consulting expenses in 2003).


                                      F-16
<PAGE>

We entered into a conversion agreement with this individual on May 16, 2003. As
consideration for services provided in 2003, we have agreed to pay this director
approximately $110,000 and such amount has been included in consulting fees and
other liabilities in the accompanying financial statements. In accordance with
this agreement all of the 28,000,000 options were cancelled on May 16, 2003 and
since no milestones were met, no further expense was required to be recorded for
these options.

STOCK AWARD

In addition to the above, we previously had an agreement to award 30,000,000
shares of our common stock to our Chief Science Officer when certain performance
measures were met. At December 31, 2002 and March 31, 2003, it was not probable
that the shares would ever be issued and accordingly no stock based compensation
was recorded through such date. During the second quarter of 2003, the Board of
Directors approved the immediate vesting of these shares as the criteria the
Board of Directors had set had been met, and in addition agreed to pay the
related federal and state income taxes that this officer will incur as a result
of these stock grants. As a result, we have recognized approximately $1,047,000
of compensation during 2003. At December 31, 2003, approximately $308,000 is
owed to him for the related federal and state income taxes and is recorded in
the accrued compensation expense liability account. Since the shares have not
been issued as of December 31, 2003, $300,000 is recorded in the common stock
subscribed equity account with the remaining balance to additional paid in
capital. During the fourth quarter the estimate for the stock compensation and
the related bonus was revised from $1,334,000 to $1,047,000 based upon
additional information received during the quarter. The effect of this change of
estimates is recorded during the fourth quarter 2003.

DEFERRED COMPENSATION AND STOCK TO BE ISSUED TO EXECUTIVES

In May 2003, we entered into one-year employment agreements with three of our
officers. These agreements automatically extend for unlimited successive
one-year periods unless it is terminated in accordance with the agreement which
includes either party furnishing the other with written notice at least sixty
days prior to the expiration of such period. As consideration for their
services, we have agreed to issue, at no cost to the executives, a total of
75,000,000 shares of our common stock, and to pay the related federal and state
income taxes they will incur as a result of these stock grants. We have
estimated that the total compensation expense under these agreements will
approximate $2,809,000 over the term of the employment agreements, and have
recognized approximately $1,945,000 of compensation expense (based on the amount
of service provided through December 31, 2003) during 2003. At December 31,
2003, the deferred compensation asset account has a remaining balance of
$220,067 and the deferred stock compensation contra-equity account has a
remaining balance of $735,356. These remaining amounts will be amortized to
compensation expense over the remaining terms of the agreements. At December 31,
2003, approximately $960,000 is owed to these executives for the related federal
and state income taxes and is recorded in the accrued compensation expense
liability account. The shares have not been issued as of December 31, 2003;
therefore approximately $750,000 is recorded in the common stock subscribed
equity account with the remaining balance to additional paid in capital. During
the fourth quarter the estimate for the stock compensation and the related bonus
was revised from $3,650,000 to $2,809,000 based upon additional information
received during the quarter. The effect of this change of estimates is recorded
during the fourth quarter 2003.

AGREEMENT WITH INVESTMENT BANKING FIRM

In April 2003, we engaged an investment-banking firm to assist us in our
long-term financial planning efforts, including our efforts to raise debt and/or
equity capital. Pursuant to the agreement, we have granted this firm, for a
period of twelve months, exclusive authorization to act as our agent (on a best
efforts basis) in substantially all of our investment banking activities, which
may include efforts to place various securities (potentially through private
and/or public transactions), and to assist us in obtaining grant money from
various governmental entities. As consideration for such services, we have
agreed to compensate this entity as follows:

o A non-refundable retainer, payable in warrants to purchase stock of our
Company valued at $80,000. During 2003, these 3,636,363 warrants were recorded
as stock issuance costs in additional paid-in-capital. These warrants have an
exercise price of $0.022 and expire in five years. During 2003, none of these
warrants were exercised.

o Upon closing of a transaction, a fee equal to the greater of $165,000 or 6% of
the aggregate dollar value of the aggregate consideration paid by investors
(provided however that if the total raised is less than $1,000,000, then the fee
shall be 16.5% of the amount raised).

o Upon closing of a transaction, warrants to purchase (at a nominal price)
shares of our common stock having a value equal to 4% of the aggregate
consideration paid by investors. We get to apply a credit of one-half the value
of the $80,000 warrants discussed above to these warrants. As of December 31,
2003, no additional warrants were required to be issued.

o Upon the receipt of any grant money, warrants to purchase (at a nominal price)
such number of shares of our common stock having a value of $35,000.

In addition, we have agreed to compensate this entity for any merger and
acquisition services provided. In addition to billings on a time and expense
basis, this compensation shall include a success fee equal to a percentage of
any transaction value.


                                      F-17
<PAGE>

EMPLOYEE STOCK OPTIONS AND AWARDS

We have a stock option plan that provides for the granting of stock options and
awards to officers, and employees. The objectives of this plan include
attracting and retaining the best personnel, providing for additional
performance incentives, and promoting our success by providing employees the
opportunity to acquire common stock. We are authorized to grant options for up
to 19,200,000 common stock shares, of which 7,387,500 have been granted as of
December 31, 2003. The Board of Directors granted 2,600,000 options to one of
the board members and these were outstanding at December 31, 2003. Options were
granted at exercise prices from $ .006 - $ .03 per share (or approximately 40 %
of the market price of our stock on the respective grant dates). With the
exception of the options issued to one of our directors, which vests monthly
over four years, the options issued vest 25% per year for four years and all
expire in ten years.

The status of our stock options are summarized below:

                                                                     WEIGHTED
                                                     NUMBER OF       AVERAGE
                                                      SHARES      EXERCISE PRICE

        Outstanding at December 31, 2001            10,850,000    $    0.008
        Granted                                      4,280,000         0.022
        Exercised                                   (1,037,500)        0.006
        Cancelled                                           --            --
        Outstanding at December 31, 2002            14,092,500         0.013
        Granted                                             --            --
        Exercised                                           --            --
        Cancelled                                   (5,142,500)        0.007
        Outstanding at December 31, 2003             8,950,000    $    0.015
        Options exercisable at December 31, 2003     6,744,792    $    0.012

        Options available for
         grant at December 31, 2003                 11,812,500

The following table summarizes the information about our stock options
outstanding at December 31, 2003:

<TABLE>
<CAPTION>
                                                   WEIGHTED
                                                    AVERAGE          WEIGHTED                        WEIGHTED
                                                   REMAINING         AVERAGE                          AVERAGE
                               NUMBER             CONTRACTUAL        EXERCISE       NUMBER           EXERCISE
EXERCISE PRICE               OUTSTANDING          LIFE (YEARS)        PRICE      EXERCISABLE          PRICE
<S>                           <C>                     <C>           <C>           <C>               <C>
   $.006                      4,962,500               6.77          $   0.006     4,821,875         $   0.006
   $.010                        125,000               6.74              0.010        93,750             0.010
   $.020                      1,262,500               7.63              0.020       637,500             0.020
   $.030                      2,600,000               8.16              0.030     1,191,667             0.030
                              8,950,000               7.30          $   0.015     6,744,792         $   0.012
</TABLE>

We account for our stock-based compensation using the intrinsic value method
prescribed by Accounting Principles Board Opinion No. 25, "Accounting for Stock
Issued to Employees". With respect to stock options granted during 2002, we
recorded deferred stock compensation of approximately $174,000 for the
differences between the exercise prices and the fair values of the common stock
underlying the options on the dates of the grants. These amounts are being
amortized consistent with the method described in FASB Interpretation No. 28
over the vesting period of the individual options. There were no options granted
during 2003. Had our compensation expense for stock-based compensation plans
been determined based upon fair values at the grant dates for awards under this
plan in accordance with SFAS No. 123, "Accounting for Stock-Based Compensation,"
our net loss and pro forma net loss per share amounts would have increased as
follows:

                                            2003              2002
         Net loss:
         As reported                    $7,789,905         $3,113,624
         Pro forma                      $7,832,100         $3,212,624
         Loss per share:
         As reported                    $      .02         $      .01
         Pro forma                      $      .02         $      .01


                                      F-18
<PAGE>

The weighted average fair value of options granted during 2002, estimated on the
date of grant using the Black-Scholes option-pricing model, was $.04 to $.05.
The fair value of options granted was estimated on the dates of the grants using
the following approximate assumptions: dividend yield of 0 %, expected
volatilities of 112%, risk-free interest rates of 5%, and expected lives of 4
years.

NOTE H - OTHER COMMITMENTS AND CONTINGENCIES

OPERATING LEASE COMMITMENTS

We rent our operating facility under a two-year operating lease agreement
expiring on May 31, 2005 with an option to extend the lease an additional five
years at the same rental rate. Prior to August 26, 2003, this operating facility
was leased from Atlantic Pacific Corporation, a related entity controlled by the
father of our Chief Scientific Officer. Future minimum lease payments under this
lease are $64,653 for 2004 and $26,939 for 2005.

Rent expense amounted to $107,689 and $64,700 for the years ended December 31,
2003 and December 31, 2002, respectively. This included a charge of $41,865
which was for renegotiating the lease (prior lease expired in 2010) with
Atlantic Corporation (a related entity controlled by the father of one of our
major shareholders) and is expected to be paid in common stock.

The above amounts are not necessarily indicative of the amounts which would have
been incurred had comparable transactions been entered into with independent
parties. On August 26, 2003, this building was sold to a non-related party
entity.

OBLIGATIONS UNDER CAPITAL LEASES

We have capitalized rental obligations under leases of equipment. The
obligations, which mature in 2005 and 2006, represent the total present value of
future rental payments discounted at the interest rates implicit in the leases.
Future minimum lease payments under capital leases are:

                                   YEAR ENDING
                                   DECEMBER 31,

     2004                                                         $ 65,674
     2005                                                            5,877
     2006                                                              293
     Total minimum lease payments                                   71,844
     Less amount representing interest                               6,615
     Present value of net minimum lease payments                    65,229
     Less current portion                                          (59,616)
                                                                  $  5,613

EMPLOYMENT AGREEMENT WITH CHIEF SCIENTIFIC OFFICER

On May 8, 2001, we entered into an employment agreement with Tony Frudakis, our
Chief Science Officer. The agreement runs for a term that commenced August 22,
2001 and expires August 22, 2005, subject to extension from year to year by
mutual agreement. The agreement initially provided a base salary of $95,000 per
year to Dr. Frudakis. We increased this salary to $130,000 per year in 2001, and
our Board of Directors may increase the salary form time to time at its
discretion. The employment agreement also permits the Board of Directors to
authorize payment of discretionary bonuses or other benefits to Dr. Frudakis.

SCIENTIFIC ADVISORY BOARD AND BOARD OF CONSULTANT

Currently we have two Scientific Advisory Board members and one Board of
Consultant member. For the services performed by these three members, we are
committed to issue 50,000 shares of our common stock each year to each member.
The remaining commitments of common stock shares for these individuals are
150,000 shares in 2004, 150,000 shares in 2005, 50,000 shares in 2006 and 50,000
shares in 2007.

During June 2002, we entered into a two-year consulting agreement with a member
of the Scientific Advisory Board. For his services, we have agreed to pay him
quarterly 50,000 shares of common stock and $4,000 through the term of this
agreement.

CONSULTING AGREEMENT

We entered into a consulting agreement on June 1, 2003 with an individual for
certain marketing services. For these services the individual would be paid
5,000,000 shares of our common stock upon our acceptance of the services
provided. At December 31, 2003, we accrued $280,000 in the accrued expenses to
be paid with stock account for the services that had been performed during 2003.
On January 19, 2004, we accepted the services that were provided and issued the
5,000,000 shares of our common stock.


                                      F-19
<PAGE>

LITIGATION

We are involved in certain legal actions arising in the ordinary course of
business. We are defending these proceedings. While it is not feasible to
predict or determine the outcome of these matters, we do not anticipate that any
of these matters or these matters in the aggregate will have a material adverse
effect on our business or our consolidated financial position or results of
operations.

NOTE I - OTHER RELATED PARTY TRANSACTIONS

AGREEMENTS WITH DIRECTORS

On February 26, 2002, we agreed to pay one of our Board of Directors $20,000
annual compensation and 2,600,000 of stock options for his Board of Director
services. The options have an exercise price of $0.03 and expire in four years.
We recorded an expense associated with these services of $20,000 and $16,667 for
the years ended 2003 and 2002, respectively. At December 31, 2003 we have an
accrual recorded for $16,667 related to these services.

GENBIOMICS, LLC CONSULTING AGREEMENT

A consulting agreement between GenBiomics, LLC and us was terminated on April 1,
2003. The original consulting agreement was signed on May 17, 2002 and was an
agreement that we entered into for consultation and advice on the development of
our scientific and business plans. Since that time, two of GenBiomics members
have agreed to become executives in our Company and Board of Director members
and as a result the prior consulting agreement was terminated. At December 31,
2003, we had accrued $35,475 owed to GenBiomics for the services provided prior
to the termination of this agreement. During 2003 and 2002, we recorded
consulting expense related to this agreement of $10,000 and $41,250,
respectively.

NOTE J - SUBSEQUENT EVENTS

CONVERSION OF DEBENTURE AND EXERCISE OF WARRANTS

From yearend to February 20, 2004, LJCI converted $20,000 of convertible
debentures into our common stock and exercised 300,000 of the non-detachable
warrants. This combined transaction resulted in us receiving cash of $211,425
which is net of the $13,575 stock issuance costs and a receivable of $70,465
from our investment banking firm. We issued 8,030,416 shares of our common
stock. Early in 2004, we also issued the 10,309,120 shares of stock to LJCI that
was unissued at December 31, 2003 (see Note G above).

CONSULTING AGREEMENT

On January 19, 2004, we accepted the services that were provided from a certain
marketing consultant and issued the 5,000,000 common stock shares we had
committed to this individual as payment for these services.

RELATED PARTY NOTES PAYMENT

During late January 2004, we paid in full the notes and related accrued interest
totaling approximately $49,000 owed to George Frudakis, father of our Chief
Scientific Officer. George Frudakis is a shareholder of the Company and the
father of our Chief Scientific Officer, Tony Frudakis. There is no other
relationship between the Company and George Frudakis.


                                      F-20
<PAGE>

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

We dismissed our accounting firm Kingery, Crouse, and Hohl on September 19, 2003
and engaged Pender, Newkirk and Company (PNC). Our Board of Directors approved
the change. Kingery, Crouse, and Hohl's reports on our consolidated financial
statements for each of the years ended December 31, 2002 and 2001 did not
contain any adverse opinion or disclaimer of opinion, nor were they qualified or
modified as to uncertainty, audit scope for accounting principles, except that
the report of Kingery, Crouse and Hohl on our financial statements for the
fiscal year ended December 31, 2002 contains an expression of substantial doubt
regarding our ability to continue as a going concern.

There were no disagreements with our former accountants and we filed an 8K with
the SEC noting the change on September 19, 2003.

ITEM 8A. CONTROLS AND PROCEDURES

As of the end of the period covered by this report, we conducted an evaluation,
under the supervision and with the participation of our chief executive officer
and chief financial officer of our disclosure controls and procedures (as
defined in Rule 13a-15(e) and Rule 15d-15(e) of the Exchange Act). Based upon
this evaluation, our chief executive officer and chief financial officer
concluded that our disclosure controls and procedures are effective 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 Commission's rules and forms. There was
no change in our internal controls or in other factors that could affect these
controls during our last fiscal quarter that has materially affected, or is
reasonably likely to materially affect, our internal control over financial
reporting.

ITEM 8B. OTHER INFORMATION

None.


                                       53
<PAGE>

                                    PART III

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

Our directors are elected at our annual meetings by a plurality of the shares
represented and our officers serve at the pleasure of the Board of Directors.
Our current officers and directors are:

    NAME                 AGE                POSITION

Tony Frudakis             36   Director, Secretary, Chief Scientific Officer
Richard Gabriel(2)        55   Director, Chief Executive Officer, President
Hector Gomez              64   Director, Chief Medical Officer
Monica Tamborini(3)       47   Chief Financial Officer, Chief Operating Officer

(2) Married to Monica Tamborini
(3) Married to Richard Gabriel

Dr. Frudakis has served on our board and has been an officer since our
inception. Dr. Gomez has served as a director since 2002 and as an officer since
May of 2003. Mr. Gabriel has served as a director since 2002 and as an officer
since March of 2003. Ms. Tamborini has been an officer since May of 2003.

Tony Frudakis, Ph.D. Dr. Frudakis, our founder, has been with us since the
Company's inception. He has served in many capacities, including CEO/President.
Dr. Frudakis now serves as Chief Scientific Officer (CSO) and is responsible for
executing research and development goals and objectives, under the direction of
the Board of Directors. As a member of the Board of Directors, Dr. Frudakis also
participates in strategic planning, concentrating on his field of expertise,
biologic and genomics science and innovation.

Prior to DNAPrint genomics, Inc., Dr. Frudakis founded GAFF biologic, our
predecessor in interest, in 1998. He served as its President and Chief Executive
Officer. Early in his career, Dr. Frudakis was a research scientist for Corixa
Corporation. While at Corixa he developed several new techniques for RNA
fingerprinting, managed and executed high-throughput gene discovery programs for
various cancers and was instrumental in the company's early success in
attracting research and development partners. In all, his work has resulted in a
patent portfolio for over 350 unique genes and 2 products.

Richard Gabriel. Mr. Gabriel joined us in January of 2003 as a member of our
Board of Directors. As Chief Executive Officer (CEO), he, along with our other
Board members, formulates and communicates strategic direction. He continues in
that capacity and in addition, in March of 2003, he agreed to join us as
President. In his role as President, Mr. Gabriel is responsible for and oversees
all aspects of the organization.

Prior to joining us, Mr. Gabriel consulted for several start-up companies while
working as a partner at Genbiomics, LLC and as head of Life Sciences Practice at
Semaphore, Inc. From 1998 until 2001, Mr. Gabriel served as Chief Executive
Officer and President of Calix Corporation, parent company to Pharm-Eco
Laboratories, Inc. He was one of five Core Team Members that set the overall
strategic direction for Pharm-Eco Laboratories, Inc. and helped guide
Pharm-Eco's high performance self-directed organization. He obtained his MBA
from Suffolk University's Executive MBA Program, Boston, Massachusetts in 1985
and his B.S. in Chemistry from Ohio Dominican College, Columbus, Ohio in 1978.

Hector Gomez MD, Ph.D. Dr. Gomez has served on our board of directors since
March 1, 2002 and serves as Chairman of the Board. In addition, in May of 2003,
Dr. Gomez agreed to join us as Chief Medical Officer (CMO). In this capacity, he
is responsible for overseeing and managing our efforts to commercialize our
pharmacogenomic products.

In addition to his duties with us, he is a partner in Genbiomics, LLC, a
consulting firm. From 2001 to 2002, he was Chief Executive Officer of Zengen,
Inc., a biotechnology company. From 2000 to 2001, he was Chief Executive Officer
of Nutri Logics, Inc., a consumer products company. Prior to joining Nutri
Logics, from 1994 to 1999, he was Chief Executive Officer of Transcend
Therapeutics, a biotechnology company. Concurrent with these positions, since
1999, Dr. Gomez has served as a Clinical Associate Professor of Pharmacology and
Medicine at the University of South Florida, College of Medicine (voluntary
faculty). His research career to date has focused on the clinical pharmacology
of Hypertension, Hypokalemia, Hyperglycemia, Hyperuricemia and
Hypercholesteremia drugs.

Monica Tamborini. In May of 2003, Ms. Tamborini joined us as Chief Financial
Officer (CFO) and Chief Operating Officer (COO). As CFO, Ms. Tamborini oversees
and manages all accounting functions, including financial reporting, as well as
helping to obtain outside capital to fund our operations. As COO, she is
responsible for seeing that operations run efficiently and effectively and that
we have the necessary personnel and infrastructure required to execute the
Board's strategic plan of operations.

Prior to joining us, Ms. Tamborini had served in controller and CFO positions
since 1988. From 1992 to 2001, she was CFO for Calix Corp and its subsidiary
Pharm-eco Laboratories. Ms. Tamborini was also one of the five core team members
for Pharm-eco Laboratories that set the overall strategic direction of the
company. Her main focus was operations and finance. From 2001 through 2003, Ms.
Tamborini had no professional experience with respect to the capacities at which
she now serves our company.


                                       54
<PAGE>

Ms. Tamborini serves on our audit committee and has been designated by our Board
of Directors as our Audit Committee Financial Expert. Ms Tamborini, in the Board
of Directors' opinion, has the required experience as noted in Item 401 of the
SEC rules and regulations. She has an understanding of generally accepted
accounting principles and financial statements and has the ability to assess the
general application of such principles in connection with the accounting for
estimates, accruals and reserves. She also has over 20 years experience
preparing and evaluating financial statements that had a breadth and level of
complexity of accounting issues that are generally comparable to the breadth and
complexity of issues that can reasonably be expected to be raised by our
financial statements and she has an understanding of internal controls and
procedures for financial reporting and an understanding of audit committee
functions. Because of her positions as chief operating officer and chief
financial officer, Ms. Tamborini is not "independent" with respect to the
Company.

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

The following table sets forth the names, number of late reports; number of late
reported transactions and known that failures to file a required report with
respect to required filings under Section 16(a) the Exchange Act by our
officers, directors and stockholders.

          NAME            LATE REPORTS       TRANSACTIONS        KNOWN FAILURE

      Tony Frudakis            7                 21                    0
      Richard Gabriel          2                  1                    0
      Hector Gomez             2                  1                    0
      Monica Tamborini         2                  1                    0

CODE OF ETHICS

We have adopted a code of ethics that applies to our principal executive
officer, principal financial officer and our controller. The text of the code of
ethics is available for public viewing at our website at www.dnaprint.com. In
addition, we will briefly describe on our website the nature of any amendment to
our code of ethics and the nature of any waiver of a provision of our code of
ethics, the name of the person to whom the waiver was granted, and the date of
the waiver.

ITEM 10. EXECUTIVE COMPENSATION.

The compensation and awards that have been earned by our executives is listed
below.

(4) The dollar value of the restricted stock is calculated by multiplying the
closing market price of our unrestricted stock on the date of grant, May 16,
2003, by the number of shares awarded as required in instructions to Item
402(b)(2)(iii)(C). For book purposes, the value is calculated by applying a 15%
discount on the closing price. 5 Because the grantees can not sell their stock
for cash to cover the tax liability that will be due, we agreed to cover the tax
liability associated with the stock grant in cash by the date that the tax will
be due by the grantee. This was earned in 2003 but will be paid in 2004.

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
                                                                                   RESTRICTED
                                                                                      STOCK             ALL OTHER
        NAME AND PRINCIPAL CAPACITY                      YEAR     SALARY            AWARDS (4)      COMPENSATION (5)
<S>                                                      <C>     <C>              <C>                 <C>
Richard Gabriel(6)
Director, Chief Executive                                2002    $       0        $       0            $       0
Officer, President                                       2003    $       0        $ 870,000 (7)        $ 444,808

Hector Gomez, M.D., Ph.D. Director, Chairman of the      2002                     $  20,000
Board, Chief Medical Officer                             2003                     $ 725,000 (8)        $ 277,988

Tony Frudakis, Ph.D. 9 Chief Scientific Officer          2001    $ 130,000
Director, Secretary                                      2002    $ 130,000
                                                         2003    $ 130.000        $ 870,000(10)        $ 307,888

Monica Tamborini(11)
Chief Financial Officer,
Chief Operations Officer                                 2003    $       0        $ 580,000(12)        $ 257,372
</TABLE>


                                       55
<PAGE>

EMPLOYMENT AGREEMENTS

On May 8, 2001, we entered into an Employment Agreement with Tony Frudakis, our
Chief Scientific Officer. The Agreement runs for a term that commenced August
22, 2001 and expires August 22, 2005, subject to extension from year to year by
mutual agreement. The Agreement provided a base salary of $95,000 per year to
Dr. Frudakis. We increased this salary to $130,000 per year in 2001, and our
Board of Directors may increase the salary from time to time in its discretion.
The Employment Agreement also permits the Board of Directors to pay
discretionary bonuses or other benefits to Dr. Frudakis. Upon termination of
employment, the Agreement prohibits Dr. Frudakis from competing with the Company
for a period of two years in the state of Florida. On November 30, 2001, we also
entered into a Performance Stock Agreement with Dr. Frudakis that requires us to
grant him 30 million shares of our restricted stock upon achieving certain
milestones. The Board of Directors renegotiated the milestones in light of
changes in the Company's operational strategy. Thereafter, Dr. Frudakis met the
milestone and we granted the stock in 2003.

In May 2003, we entered into one-year employment agreements with Richard
Gabriel, Hector Gomez, and Monica Tamborini. These agreements automatically
extend for unlimited successive one-year periods unless terminated in accordance
with the agreement. As consideration for the first year of employment, we have
agreed to issue, at no cost to the executives, a total of 75,000,000 shares of
our common stock, and to pay the related federal and state income taxes they
will incur as a result of these stock grants. The Agreements prohibit them from
competing with us for a period of two years from the date of termination or
leaving our employ.

COMPENSATION OF DIRECTORS

On February 22, 2002, we entered into an agreement with Dr. Gomez when he joined
our board of directors. In consideration of Dr. Gomez' agreement to serve on the
Board of Directors, we granted him options to purchase 2,600,000 shares of our
stock at an exercise price of $0.03 per share. The options vest ratably over a
period of four years from the date of the contract. As of February 20, 2004
approximately 1,191,667 options to purchase shares had vested and no vested
shares had been exercised. In addition, we agreed to pay him a cash director's
fee of $20,000 per year.

(6) Mr. Gabriel joined our Board of Directors during 2002 and became our Chief
Executive Officer and President in 2003.
(7) Calculated on 30,000,000 shares at a price of .029, the close price of the
stock on May 16, 2003, the date the award was granted by the Board of Directors.
(8) Calculated on 25,000,000 shares at a price of .029, the close price of the
stock on May 16, 2003, the date the award was granted by the Board of Directors.
(9) Dr. Frudakis has been with us since inception and has held many titles and
positions during that time including CEO, President and CFO. Dr. Frudakis is
currently our CSO.
(10) Calculated on 30,000,000 shares at a price of .029, the close price of the
stock on May 16, 2003, the date the award was granted by the Board of Directors.
(11) Ms. Tamborini joined us in 2003.
(12) Calculated on 20,000,000 shares at a price of .029, the close price of the
stock on May 16, 2003, the date the award was granted by the Board of Directors.

                          FISCAL YEAR END OPTION VALUES

                      Number of Securities Underlying       Value of Unexercised
                           Unexercised Options at               In-the-Money
                              Fiscal Year End                    Options at
Name                     Exercisable/Unexercisable             Fiscal Year End

Hector Gomez                     2,600,000                       $101,400(13)

                           1,191,667/1,408,333

There were no options exercised during fiscal year 2003.

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

The following table sets forth, as of February 20, 2004 certain information
concerning beneficial ownership of shares of our stock and the approximate
percentage of shares of our stock owned by (i) each person known to us to own 5%
or more of the outstanding shares of stock, (ii) each director and executive
officer, and (iii) all directors and executive officers as a group.


                                       56
<PAGE>

TITLE OF        NAME AND ADDRESS OF             AMOUNT OF         PERCENTAGE OF
 CLASS          BENEFICIAL OWNER(14)       BENEFICIAL OWNERSHIP     CLASS (15)

Common           Tony Frudakis                   60,782,937            9.39%
Common           Richard Gabriel                 30,000,000            4.64%
Common           Hector Gomez                    26,191,667(16)        4.04%
Common           Monica Tamborini                20,000,000            3.09%
Common           Directors and Officers
                  as a Group (4 persons)        135,782,937           20.98%

SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS

The following table sets forth certain information, as of December 31, 2003,
with respect to compensation plans (including individual compensation
arrangements) under which our equity securities of the registrant are authorized
for issuance.

<TABLE>
<CAPTION>
                                                                                                          NUMBER OF SECURITIES
                                    NUMBER OF SECURITIES             WEIGHTED-AVERAGE                REMAINING AVAILABLE FOR FUTURE
                                        TO BE ISSUED                 EXERCISE PRICE OF                   ISSUANCE UNDER EQUITY
                                      UPON EXERCISE OF                  OUTSTANDING                        COMPENSATION PLANS
                                    OUTSTANDING OPTIONS,             OPTIONS, WARRANTS              (EXCLUDING SECURITIES REFLECTED
                                    WARRANTS AND RIGHTS                 AND RIGHTS                           IN COLUMN (A))
                                              (A)                           (B)                                       (C)
<S>                                         <C>                         <C>                                       <C>
Equity compensation plans
approved by security
holders                                             0                          N/A                                         0

Equity compensation plans
not approved by security
holders                                     8,950,000                   $    0.015                                40,350,000

Total                                       8,950,000                   $    0.015                                40,350,000
</TABLE>

The material features of the equity compensation plans reflected in the
foregoing table are described in Note G to our financial statements contained in
Item 7 of this Annual Report on Form 10-KSB, under the caption "Employee Stock
Options and Awards."

(13) Calculated based on the closing price of .069 on December 31, 2003 less the
exercise price of .03 multiplied by 2,600,000.

(14) Unless otherwise noted, c/o DNAPrint genomics, Inc., 900 Cocoanut Avenue,
Sarasota, FL 34236.

(15) Percentage of ownership is based on 547,238,171 shares of Common Stock
outstanding at February 20, 2004 and the addition of the subscribed stock for
the executives of 105,000,000 shares. The total shares used for percentage of
class calculation is 647,238,171.

(16) Represents 25,000,000 shares directly owned by Dr. Gomez and 1,191,667
shares which may currently be acquired by exercise of options.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

Until August 2003, we leased our principal office from Pacific Atlantic
Corporation, a corporation controlled by George Frudakis, the father of Tony
Frudakis. On October 15, 2001, we signed a lease for this space. The lease ran
for 10 years at $5,333 per month plus increases annually based on increases in
the Consumer Price Index. In June of 2003, we renegotiated the lease. The new
two year operating lease expires on May 31, 2005 with an option to extend the
lease an additional five years at monthly rent of approximately $5,400. The
building was sold to JSD Sarasota, LLC on August 26, 2003.

In connection with the renegotiation of the lease, we agreed to pay Mr. Frudakis
an amount equal to 6 months rent, payable in our common stock. On July 28, 2004,
we issued 1,522,364 shares of our common stock in exchange for a charge valued
at $41,900 for renegotiating our building lease. These shares were issued to Mr.
Frudakis, an accredited and sophisticated investor. We believe the transaction
was exempt from registration under Section 4(2) of the Securities Act of 1933
and Rule 506 promulgated thereunder.

On February 24, 2002, we entered into a Consulting Agreement and a Stock
Purchase Option with Jack Luchese. At the time, Mr. Luchese was one of our
directors. Under these agreements, and in addition to his service as one of our
directors, Mr. Luchese agreed to provide us substantial management, business
development and strategic planning advice through at least May 31, 2003. The
sole consideration that we were obliged to pay under the Consulting Agreement
was the grant of options to purchase stock under the Stock Purchase Option.

The Stock Purchase Option provided for the issuance of up to 28,000,000 shares
of our stock to Mr. Luchese at an exercise price of $0.01 per share. As of
December 31, 2002, we had recognized $50,000 of consulting expenses under this
arrangement, and in January 2003, we issued 2,780,868 shares of our common stock
as consideration for such liability (as noted above, because the shares were
issued at a price less than the fair market value of our stock on the date of
issuance, we recorded additional consulting expenses in 2003.) During the second
quarter of 2003, we negotiated a Conversion Agreement with Mr. Luchese. In
return for payment of $110,000, the agreement terminated all contracts between
Mr. Luchese and us.


                                       57
<PAGE>

In February 2002, we entered into a funding agreement with 4 shareholders, one
of whom is Dr. Tony Frudakis, our Chief Scientific Officer, and one of our
directors, and another of whom is George Frudakis, Dr. Frudakis' father. These
shareholders initially agreed to loan us $2,000,000 between March 2002 and
December 2002. These loans were to be repaid along with all accrued interest at
8% on January 31, 2003. In June 2002, we elected to satisfy $509,160 of these
notes through the issuance of 14,547,355 shares of our common stock.

During October 2002 the terms of this agreement were modified, effectively
terminating the participation of two of the shareholders. Pursuant to the
amended agreement, the remaining two shareholders (including Dr. Frudakis and
Mr. Frudakis) agreed to loan us $1,000,000 between December 2002 and December
2003. These loans were scheduled to mature, along with all accrued interest at
8%, on December 31, 2003. In the event of our default, the lenders' only remedy
is to require us to issue shares of our stock as consideration for satisfaction
of the debt. The number of shares to be issued for satisfaction of the debt will
be based on a price of $.035 per share if the weighted average price of our
stock is $.05 per share or above; alternatively if the weighted average price of
our shares is less than $.05, the number of shares due will be calculated using
a 40% discount to the market price. Notwithstanding this, in no event will the
shares to be issued under this arrangement be based on a price of less than $.01
per share.

At December 31, 2003, our notes payable to related parties approximated
$298,043. The notes of approximately $45,000 and accrued interest of
approximately $4,000 owed to George Frudakis were paid in full during January
2004. Subsequent to yearend, Tony Frudakis agreed to extend his funding
agreement under the same terms until December 31, 2004.

We agreed to pay one of our directors, Hector Gomez, $20,000 annually for his
role as Chairman of our Board of Directors. In addition, he has an option to
purchase 2,600,000 shares of our common stock at an exercise price of $0.03. The
options vest over in four years.

On April 1, 2003, we terminated a consulting agreement with GenBiomics, LLC. The
original consulting agreement was signed on May 17, 2002. Since that time, two
of GenBiomics members have agreed to become officers and directors of the
Company. As a result, the prior consulting agreement was terminated. As of
December 31, 2003, we had accrued $35,475 owed to GenBiomics for the services
provided prior to the termination of the agreement. During 2003 and 2002, we
recorded consulting expense related to this agreement of $10,000 and $41,250,
respectively.


                                       58
<PAGE>

ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K.

(a) Exhibits

3           Articles of Amendment to the Articles of Incorporation
10.1        Supply & License Agreement+
10.2        Agreement & Plan of exchange between Catalyst Communications, Inc.
            and DNAPrint Genomics, Inc. and Shareholders+
10.3        Equipment Agreement dated September 19, 2001 between Orchid
            Biosciences, Inc. and the Company.++
10.4        Purchase Agreement dated September 19, 2001 between Orchid
            Biosciences, Inc. and the Company.++
10.5        Employment Agreement dated May 8, 2001 between Tony Frudakis and the
            Company.++
10.6        Lease Agreement dated October 15, 2001 between Pacific Atlantic
            Corporation and the Company.++
10.7        Option Agreement dated September 19, 2001 between Orchid
            Biosciences, Inc. and the Company.++
10.8        Equipment Lease Agreement dated May 18, 2001 between Orchid
            Biosciences, Inc. and the Company.+++
10.9        Funding and Stock Subscription Agreement dated June 8, 2001 between
            Tampa Bay Financial, Inc. and the Company.+++
10.10       Consulting and Marketing License Agreement between the Company and
            Mark Neuhaus.&
10.11       Agreement dated February 22, 2002, among the Company, Tampa Bay
            Financial, Inc., Carl Smith, Mathew Veal, and the Company.&&
10.12       Contract Genotyping Agreement dated January 15, 2002 between the
            Company and GenoMed LLC.&&
10.13       Funding Agreement dated February 22, 2002 among the Company Tony
            Frudakis, George Frudakis, Carl Smith Iii, and Richard Craig Hall.&&
10.14       Performance Stock Agreement dated November 30, 2001 between the
            Company and Tony Frudakis. &&
10.15       Consulting Agreement dated February 24, 2002 between the Company and
            Jack Luchese. &&
10.16       Stock Purchase Option dated February 25, 2002 between the Company
            and Jack Luchese. &&
10.17       Consulting Agreement dated June 12, 2002 between Mark Shriver and
            the Company. &&&
10.18       Letter of Commitment between Mark Shriver and the Company's
            Scientific Advisory Board. &&&
10.19       Agreement between Startup Florida and the Company. &&&
10.20       Service Agreement dated April 15, 2002 between Altura LLC and the
            Company. &&&
10.21       License Agreement between Penn State Research Foundation and the
            Company. &&&
10.22       Private Placement Agreement between John Oskarep and the Company.
            &&&
10.23       Consulting Agreement dated May 17, 2002 between Genbiomics LLC and
            the Company. &&&
10.24       Amendment to Consulting Agreement between Genbiomics LLC and the
            Company dated May 31, 2002. &&&
10.25       Amendment to Consulting Agreement between Mark Shriver and the
            Company. &&&
10.26       Funding Agreement between Tony Frudakis, George Frudakis and the
            Company.#
10.27       Employment Agreement between the Company and Richard Gabriel. ##
10.28       Employment Agreement between the Company and Monica Tamborini. ##
10.29       Employment Agreement between the Company and Hector Gomez. ##
10.30       Termination Agreement between the Company and Genbiomics, LLC. ###
10.31       Lease between Florida West Construction dba Pacific Atlantic Corp
            and DNAPrint genomics, Inc. ###
10.32       Amendment to Consulting Agreement between DNAPrint genomics, Inc.
            and Mark Neuhaus. ###


                                       59
<PAGE>

10.33       Conversion Agreement between the Company and Jack Luchese. ##
10.34       Amendment to Funding Agreement between DNAPrint genomics, Inc. and
            Tony Frudakis.*
10.35       Securities Purchase Agreement with La Jolla*
10.36       Registration Rights Agreement with La Jolla*
10.37       Convertible Debenture with La Jolla*
10.38       Warrant with La Jolla*
10.39       Letter Agreements with La Jolla*
31.1        Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer,
            Richard Gabriel
31.2        Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer,
            Monica Tamborini
32.1        Section 1350 Certification, Richard Gabriel
32.2        Section 1350 Certification, Monica Tamborini

+     Incorporated by reference from Form 8-K, filed November 6, 2000.
++    Incorporated by reference from Form 10-KSB, filed April 2, 2001.
+++   Incorporated by reference from Form 10-QSB, filed August 15, 2001.
&     Incorporated by reference from Form 10-QSB, filed November 15, 2001.
&&    Incorporated by reference from Form 10-KSB, filed April 9, 2002.
&&&   Incorporated by reference from Form 10-QSB, filed August 14, 2002.
#     Incorporated by reference from Form 10-QSB, filed November 14, 2002.
##    Incorporated by reference from Form 10-QSB, filed August 15, 2003.
###   Incorporated by reference from Form 10-QSB, filed November 14, 2003.


* Incorporated by reference from Form S-2, filed December 15, 2003.

(b) Reports on Form 8-K.

None.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES.

AUDIT FEES

During 2002, we were billed by our accountants, Kingery, Crouse, and Hohl,
approximately $36,000 for audit and review fees. During 2003, we were billed by
Kingery, Crouse and Hohl, approximately $17,000 for audit and review fees
associated with our 10-QSB and 10-KSB filings. In addition during 2003, we were
billed by Pender, Newkirk and Company, our new accountants, approximately
$49,000 for audit and review fees.

AUDIT RELATED FEES

During 2002 and 2003, we were billed by an outside accountant that we hired as a
consultant to help us with our SEC filings, including our 10-KSB 2002 and our
10-QSB for March 31, 2003. We were billed approximately, $8,000 by this
consultant.

In addition, during 2003, we engaged an outside accountant to help us with our
10-KSB filing for 2003. We were billed approximately $12,000 for these services.

TAX FEES

During 2002, we engaged an outside accountant to file our tax returns. We were
billed approximately $500 for these services. This amount was for services
supplied to us for preparation of our tax forms, including form 1120. In
addition, during 2003, we were billed approximately $1,400 by our accountants
Pender, Newkirk and Company for the tax services that they supplied us. These
services did not include the preparation and filing of our 1120 tax forms but
for researching other tax issues as requested by us.

ALL OTHER FEES

None


                                       60
<PAGE>

                                   SIGNATURES

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

DNAPrint genomics, Inc.


By: /s/ Richard Gabriel

    Richard Gabriel, CEO, Director
    Date: May 11, 2005

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

SIGNATURE                      TITLE                 DATE


/s/ Richard Gabriel            CEO/President        May 11, 2005
---------------------
Richard Gabriel


/s/ Monica Tamborini           CFO                  May 11, 2005
---------------------
Monica Tamborini


/s/ Hector Gomez               Director             May 11, 2005
---------------------
Hector Gomez


/s/ Tony Frudakis              Director             May 11, 2005
---------------------
Tony Frudakis


                                       61