<PAGE>

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

                                   Form 10-KSB

               [ ] ANNUAL REPORT UNDER SECTION 13 OR 15(D) OF THE
                         SECURITIES EXCHANGE ACT OF 1934
                              For Fiscal Year Ended
                                December 31, 2002

                        Commission File Number: 333-56046

                         SHADOWS BEND DEVELOPMENT, INC.
                    (Exact name of registrant in its charter)

                                     NEVADA
         (State or other jurisdiction of incorporation or organization)

                                   87-0617649
                      (IRS Employer Identification Number)

             200 Lafayette Street, Suite 750, Baton Rouge, LA 70801
               (Address of principal executive offices)(Zip Code)

                                 (225) 343-7811
                (Registrant's telephone no., including area code)

Securities registered pursuant to section 12(b) of the act: None
Securities registered pursuant to section 12(g) of the act
                                (TITLE OF CLASS):
                         Common Stock, $0.001 par value

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

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

The  number of shares  outstanding  of the  Company's  common  stock,  par value
$0.001, as of December 31, 2002 was: 4,311,833.
Documents Incorporated by Reference:
None The Company's revenues in fiscal 2002 were $675,203.
The aggregate market value, as of December 31, 2002, held by non-affiliates  was
$1,847.28
<PAGE>

<PAGE>                                                                         2

                         SHADOWS BEND DEVELOPMENT, INC.
                                   FORM 10-KSB

TABLE OF CONTENTS                                                           PAGE
PART I
Item 1.  Business..............................................................2
Item 2.  Properties............................................................4
Item 3.  Legal Proceedings.....................................................4
Item 4.  Submission of Matters to a Vote of Security Holders...................5
PART II
Item 5.  Market for Registrant's Common Equity and Related Stockholder
         Matters...............................................................6
Item 6.  Management's  Discussion and Analysis of Financial Condition and
         Results of Operations.................................................7
Item 7.  Financial Statements ................................................10
Item 8.  Changes  in and  Disagreements  With  Accountants  on  Accounting
         and Financial Disclosure.............................................11
PART III
Item 9.  Directors and Executive Officers of the Registrant...................11
Item 10. Executive Compensation...............................................12
Item 11. Security Ownership of Certain Beneficial Owners and
         Management...........................................................13
Item 12. Certain Relationships and Related Transactions.......................13
PART IV
Item 13. Exhibits and Reports on Form 8-K.....................................14

                                     PART I

ITEM  1.  DESCRIPTION  OF  BUSINESS  SHADOWS  BEND  ORGANIZATION
Shadows Bend Development, Inc. ("Shadows Ben" or the "Company") began in October
2000, as a result of the reverse  acquisition  described  below,  to develop and
operate  "specialty  care"  facilities  designed to help people  diagnosed  with
Alzheimer's  or other related  illnesses to manage their lives with the greatest
independence  and quality.  The business  plan  included  the  construction  and
acquisition of resident care facilities for persons  afflicted with  Alzheimer's
or other related dementia diseases.  Residents of these facilities are among the
four  million  plus  adults in the United  States  with  Alzheimer's  or related
dementia illnesses that want practical solutions at affordable costs.

Shadows  Bend was  incorporated  under the laws of the State of Idaho on May 25,
1967,  for the  primary  purpose of  exploring  for  commercial  silver and zinc
deposits.  The original name of the company was "Silver Beaver Mining Co., Inc."
The  Company had owned  various  unpatented  mining  claims near Couer d' Alene,
Idaho from 1967 until the last mining claim was  abandoned  in 1997.  The claims
were  abandoned  because the company did not have  adequate  working  capital in
order to pay the annual  maintenance  fee of $100 per  mining  claim to the U.S.
Bureau of Land  Management.  Shadows Bend has offices at 200  Lafayette  Street,
Suite 750, Baton Rouge, LA 70801.

On or about August 4, 2000,  the Company  entered into an agreement with Shadows
Bend Development,  Inc., a privately held Louisiana  corporation (the "Louisiana
Corporation"),  and the  shareholders of this entity.  At the time the agreement
was entered into, the Louisiana Corporation had purchased the land upon which it
intended to construct its first Alzheimer's  facility,  but it had not commenced
its principal operations to construct and operate an Alzheimer's  facility.  The
agreement  provided that on the closing date the  shareholders  of the Louisiana
Corporation  would exchange all of their shares,  which in the aggregate totaled
9,187,174 shares, for 9,187,174  post-reverse split shares of the Company,  such
that the shareholder of the Louisiana Corporation would own approximately 92% of
the outstanding  stock of the company.  Management of the Louisiana  Corporation
believed at the time that the reverse  acquisition  of the  Company,  a publicly
held  corporation,  would provide the Louisiana  Corporation  the opportunity to
create  a  public  market  for  its  stock,  thus  providing  liquidity  to  the
shareholders of the Louisiana  Corporation,  and, if a public trading market for
the  stock  were  to be  established,  management  could  more  easily  persuade
underwriters to raise funds for the Company's Alzheimer's projects.  The closing
of the reorganization agreement was held on October 13, 2000. As a result of the
closing of the reorganization agreement, old management resigned in favor of the
directors  and officers who were  designated by the  Louisiana  Corporation.  In
connection
<PAGE>
<PAGE>                                                                         3

with the transaction,  the Louisiana corporation paid a finder's fee of $150,000
to Milagro Holdings, Inc., an entity controlled by Howard M. Oveson, a principal
shareholder of the publicly held company prior to closing, and a finder's fee of
$100,000 to Spectrum Financial, Inc.

History of the Louisiana  Corporation The Louisiana Corporation was incorporated
under the laws of the State of  Louisiana  on January 20,  2000,  under the name
"Shadows  Bend  Development,  Inc." and is  authorized  to engage in any  lawful
business activity in which corporations formed in this state may engage,  either
for its own account or for others as agent.

In July 2000 the Louisiana  Corporation  acquired all of the ownership interests
in Diamond Holding,  L.L.C., a Louisiana  limited  liability company which owned
the property on which the Company  intended to construct  its first  facility in
Baton Rouge, Louisiana. The Louisiana Corporation issued approximately 45.72% of
its outstanding  stock pro rata to the members of the limited  liability company
which is now wholly owned by the Louisiana Corporation.  These members consisted
of Palisade  Properties,  Inc., a  corporation  controlled by Adolph and Leonard
LaPlace,  Thomas H. Normile,  and Capital  Resource  Holding,  L.L.C., a limited
liability  company  controlled  by J.  Byron  Bienvenu.  Each of  these  persons
exchanged their shares in the Louisiana  Corporation on a one-for-one  basis for
shares of the Company in the reverse acquisition in October 2000.

GENERAL INFORMATION ABOUT SHADOWS BEND DEVELOPMENT
The Company currently has no operations.

On June 1,  2002,  the  Company  purchased  Three Oaks  Corporation  for a total
purchase  price of  $1,824,942.  The  terms  of this  transaction  included  the
issuance of 150,000  shares of the Company  common stock valued at $67,500,  the
issuance of a promissory note payable in common stock of the Company of $518,564
and the assumption of liabilities totaling $1,306,378.

On June 1, 2002, the Company also purchased Holly Hills Corporate Services, Inc.
for a total purchase  price of $878,304.  This  acquisition  was structured in a
manner  similar to the Three Oaks  purchase and included the issuance of 100,000
shares of the  Company's  common  stock  valued at  $45,000,  the  issuance of a
promissory  note  payable in common  stock of the  Company of  $200,609  and the
assumption of liabilities totaling $677,695.

On December 31, 2002, Three Oaks Corporation and Holly Hills Corporate  Services
were  repossessed  for monies owed. The Company agreed to release the properties
for delinquent mortgage payments owed to the original lenders.

As indicated above, during 2000 the Company acquired 100% of Diamond Holding LLC
("Diamond"),  a company  that  owned a  six-acre  tract of land in Baton  Rouge,
Louisiana. The tract of land, which represented  substantially all of the assets
of  Diamond,  was  originally  part of a plan by the  Company  to  construct  an
Alzheimer's  disease  treatment  and  home  health  center  in Baton  Rouge.  In
connection  with the  acquisition  of Diamond,  the  six-acre  tract of land was
independently  appraised and recorded at  $1,110,000,  based upon the appraisal.
The acquisition of Diamond was a related party  transaction  because Diamond was
primarily owned and controlled by a 35% stockholder in the Company.  At the date
of acquisition  of Diamond,  there was a mortgage on the six-acre tract of land;
however,  a  cancellation  of  mortgage  was  filed  with the Clerk of Court and
Recorder in Baton Rouge, Louisiana on November 10, 2000.

Effective June 1, 2002, a stockholder, holding a note collateralized by the land
in Baton Rouge,  demanded  payment of the note.  The Company was unable to repay
the note and the land was taken in foreclosure. The Company recognized a loss of
$1,011,260 upon surrender of the land.

The Company  considered a public sale or private  placement of its common stock,
but no active  trading  market  for its  existing  outstanding  shares  had been
established  and,  accordingly,  this option,  under a business  plan to develop
Alzheimer's  care  facilities,  was remote.  The performance of the two acquired
facilities was not satisfactory, resulting in delinquencies on existing debt and
significantly  impacting the Company's ability to obtain additional conventional
loans or HUD financing. For these reasons, the Company returned the two acquired
companies to their former owners,  thereby  eliminating  the cash demands on the
Company.  This  relegated  the Company to the status of a  non-operating  public
shell that could be used to  re-capitalize a possibly more attractive  operating
company.  The Company's  long-term  viability as a going concern is dependent on
certain key factors as follows:

     * The  ability  of the  Company  to obtain  adequate  sources of funding to
       continue operations.

     * The  ability of the  Company to find a suitable  operating  company  with
       which to merge.
<PAGE>
<PAGE>                                                                         4

There can be no  assurance  that the Company  will be  successful  in  obtaining
financing or with respect to identifying a viable merger candidate and, if it is
successful, as to when such objectives may be achieved.

RISK FACTORS
Going Concern Risk
The Company has had deficits and  deficiencies in liquidity,  which impaired the
ability  of the  Company  to  continue  as a  going  concern.  In Note #2 to the
consolidated  financial  statements,  the  Company's  independent  auditors have
indicated  that these factors raise  substantial  doubt about the ability of the
Company to continue as a going  concern.  Since its  inception,  the Company has
suffered  recurring  losses from  operations  and has been dependent on existing
stockholders  and new  investors  to provide the cash  resources  to sustain its
operations.  During the years  ended  December  31,  2002 and 2001,  the Company
reported net losses of $(7,512,345) and $(456,318),  respectively,  and negative
cash flows from operations of $(5,309,881) and $(456,318) respectively.

The Company's long-term viability as a going concern is dependent on certain key
factors as follows:

     o The  ability  of the  Company  to obtain  adequate  sources of funding to
       continue operations.

     o The  ability of the  Company to find a suitable  operating  company  with
       which to merge.

There can be no  assurance  that the Company  will be  successful  in  obtaining
financing or with respect to identifying a viable merger candidate and, if it is
successful, as to when such objectives may be achieved.

Implementation of Business Strategy Dependent on Additional Financing
The Company must obtain financing to fund the pursuit of a merger partner and to
meet  obligations  as they become due. Any  additional  equity  financing may be
dilutive to the  interests of the  Company's  stockholders.  Loan terms,  to the
extent a lender were  identified,  would  increase  the  Company's  debt service
requirements  and further  restrict  operations.  There is no assurance that the
Company can obtain financing on favorable terms.

FLUCTUATIONS IN MARKET PRICE
The market  price of the  Company's  common stock has  fluctuated  significantly
since it began to be publicly  traded in 2002.  The  inability of the Company to
achieve  development goals, the inability of the Company to profitably  complete
projects, and the inability of the Company to raise sufficient operating capital
were contributing factors in the fluctuation of the market price.

RECENT FINANCING
The Company has made multiple  efforts to secure equity and/or  restructure  its
debt in order to maintain its acquired  operations  that were  unsuccessful  and
lead to the disposition of those transactions as described herein.

EMPLOYEES
As of July 6, 2004 Shadows Bend Development has 1 full-time employee.

ITEM 2. DESCRIPTION OF PROPERTY
Since  2000,  the  Company's  administrative  offices  have been  located at 200
Lafayette  Street,  Suite 750, Baton Rouge, LA 70801.  The Company rents a 1,456
square foot  facility at this location in Baton Rouge,  Louisiana,  at a cost of
approximately  $1,000 per month. The rental agreement is month-to-month  and may
be terminated by either party upon thirty days' prior written notice.

ITEM 3.  LEGAL  PROCEEDINGS
From time to time,  the  Company is involved  in  litigation  relating to claims
arising out of its operations in the normal course of business.

The  Company is a  defendant  in a lawsuit  filed on August 12, 2002 in the 19th
Judicial  District  Court,  Parish of East Baton Rouge,  State of Louisiana,  by
Jaguar  International for payment of services rendered,  and repayment of monies
purportedly  lent to the Company.  The Company received no funds from Jaguar and
filed an answer  and  reconvention  demand for  damages  and  injunctive  relief
against  Jaguar.  The  Company  believes  this suit is without  merit,  that the
Company will prevail  should the  litigation  continue,  and that the litigation
will have no material adverse affect on the Company.
<PAGE>
<PAGE>                                                                         5

ITEM 4.  SUBMISSION  OF  MATTERS  TO A VOTE OF  SECURITY  HOLDERS
Shadows Bend Development held its Annual Meeting of Shareholders on November 11,
2002. Michael Sciacchetano and Ivan Galindo were elected as Directors.

The following items were also voted upon:

Proposal Number Two - APPOINTMENT OF AUDITORS:
On May 3, 2002 the Company  appointed  the  accounting  firm of Ham,  Langston &
Brezina  as the  Company's  independent  accountants  to examine  the  Company's
financial statements for the year ended December 31, 2002.

This proposal received 22,494,105 affirmative votes and 23,612 negative votes.

Proposal Number Three - APPROVAL OF 2002 STOCK OPTION AND GRANT PLAN:
Here is a summary of the significant terms of the Plan approved by us on January
30, 2002.


Total Number of Shares Covered     5,000,000 shares
Administration                     Board of Directors administers the Plan
Eligible Persons                   Officers, key employees and other individual
                                   who may not be employees but have performed
                                   bona fide services to the Company.
Exercise Price                     Generally the closing price of the Company's
                                   stock on the date the Company grant the
                                   option, but could be lower.
Terms of Options                   Generally 10 years, but could be shorter
Exercise of Options                The holder of an option can choose to pay the
                                   exercise price of the option in cash, with
                                   the Company's common stock (valued at the
                                   closing price of the common stock on the
                                   exercise date) or by a cashless exercise. In
                                   a cashless exercise, the option holder
                                   instructs his or her stockbroker to sell the
                                   shares to be acquired upon exercise of the
                                   option and pay the exercise price to the
                                   Company.
Transferability                    Options are not transferable expect by will
                                   or by the laws of descent and distribution.
Term of Plan                       The Plan will expire on January 30, 2012,
                                   unless terminated earlier.

This proposal received 16,649,387 affirmative votes and 108,710 negative votes.

Proposal Number Four - STOCK CONSOLIDATION:
A stock  consolidation  may be required  depending  upon the situation to ensure
better market valuation of the Corporation's  common stock. The shareholders are
therefore  asked  to  pass  a  special  resolution   authorizing   directors  to
consolidate the issued capital of the Corporation  such that one share be issued
in exchange for up to ten old issued common shares of the Corporation,  at their
sole discretion within the next Annual Meeting.

This proposal received 22,382,218 affirmative votes and 114,841 negative votes.

Proposal Number Five - ACQUISITIONS:
Three Oaks Corporation is a 60+ bed Alzheimer care facility now operating in the
state of Florida.  Holly Hills  Corporate  Services is a room and board facility
now operating in the State of Illinois. The shareholder's are therefore asked to
pass a  special  resolution  ratifying  the  acquisitions  and  approving  other
acquisitions of similar Alzheimer dementia-care facilities.

This proposal received 16,739,490 affirmative votes and 29,100 negative votes.

Proposal Number Six - STOCK ISSUANCE FOR CONSULTING AND OTHER  SERVICES:  It may
be  beneficial  to  the  Corporation  to  offer  shares  to its  consultants  or
contractors  in  payment  of  services   rendered.   Such  issuance  allows  the
Corporation to conserve  funds for investment and other business  operations and
retain highly skilled

<PAGE>


<PAGE>                                                                         6

and qualified  consultants.  It is Management's  belief that it can successfully
negotiate with its  consultants  and contractors for full or partial payment for
service  fees  with  shares.  The  shareholders  are  therefore  asked to pass a
resolution authorizing the directors to issue such shares in compliance with the
United States Securities and Exchange Commission Act 1933 (Form S-8).

This proposal received 22,411,988 affirmative votes and 83,384 negative votes.

Proposal Number Seven - COMPENSATION PACKAGES FOR DIRECTORS:
Management  believes it is fair to  compensate  those  directors,  who  rendered
services,  in the form of shares and payment of salaries or back salaries.  Such
compensation will help directors'  continuing  commitment to the Corporation and
provide  further  incentive.  The  shareholders  are asked to pass a  resolution
approving  issuance of shares to the  directors  for  services  rendered  and to
ratify issuances to date, as well as for payment of additional  salaries or back
salaries as needed.

This proposal received 22,373,513 affirmative votes and 115,097 negative votes.

Proposal Number Eight - APPLICATION TO THE BBX:
The Bulletin  Board  Exchange (BBX) is scheduled to launch in the second quarter
of 2003,  pending  approval by the Securities and Exchange  Commission.  The BBX
will begin to accept  applications  on November 1,  2002 (date  dependent on SEC
approval).  The  shareholders  are  asked  to pass a  resolution  approving  the
application to the Bulletin Board Exchange.

This proposal received 22,469,896 affirmative votes and 23,116 negative votes.

Proposal Number Nine - FORMATION OF AN AUDIT COMMITTEE:
In  order  to list on the BBX,  issuers  will be  required  to  create  an audit
committee, a majority of which cannot be comprised of non-independent directors.
The  shareholders  are asked to pass a resolution  approving the formation of an
Audit Committee.

This proposal received 22,494,012 affirmative votes and 21,596 negative votes.

Proposal Number Ten - DIVIDEND ISSUANCE:
To improve  trading  liquidity  and broaden  ownership,  the board of  directors
approved a dividend  payment on January  23,  2002.  Shadows  Bend  shareholders
received two additional  shares for every one share of Shadows Bend common stock
held on the record  date.  The  effective  date for the dividend was February 5,
2002,  to  shareholders  of record as of the close of the market on January  29,
2002. Shareholders are asked to pass a resolution ratifying dividend issuance.

This proposal received 22,439,194 affirmative votes and 53,881 negative votes.

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
As of December  31,  2002,  Shadows  Bend had  4,311,833  shares of common stock
outstanding and had approximately 574 certificate stockholders of record.

Since January 2002, the Company  ('Registrant")  has been publicly  traded under
the  symbol  "SBDV"  on the OTC  Bulletin  Board  which is  operated  under  the
supervision  of the National  Association  of Securities  Dealers,  Inc. The OTC
Bulletin Board is a securities  market  utilizing a  sophisticated  computer and
telecommunications network. Market participants comprise market makers generally
dealing in "penny stocks", independent dealers who commit capital and stocks and
compete  with each other for orders.  The OTC Bulletin  Board has adopted  rules
that  require  companies  quoted on its system to be current in their  reporting
obligations  to the  SEC,  among  other  things.  The  Securities  and  Exchange
Commission has adopted rules, such as Rule l5c2-6,  which impose restrictions on
a broker-dealer's ability to trade in penny stocks. Prior to this, the Company's
stock was not  traded.  Registrant  is  authorized  to issue  50,000,000  Common
Shares.

The following  table sets forth certain  information  as to the high and low bid
quotations quoted on the OTC Bulletin Board for 2001 and 2002.  Information with
respect to  over-the-counter  bid quotations  represents prices between dealers,
does  not  include  retail  mark-ups,  markdowns  or  commissions,  and  may not
necessarily represent actual transactions.

<TABLE>
                                <S>                    <C>              <C>             <C>
                                                     Period            High             Low

                                                     2001
                           First Quarter
                           Second Quarter            Information for this time period

<PAGE>
<PAGE>                                                                         7

                           Third Quarter             was not readily available for
                           Fourth Quarter            inclusion in this report.

                                                     2002
                           First Quarter                               14.50            12.50
                           Second Quarter                               2.00             1.20
                           Third Quarter                                0.50             0.50
                           Fourth Quarter                              0.001            0.001
</TABLE>

The bid price of the Company's common stock was $N/A per share on July 6, 2004.

THE COMPANY'S TRANSFER AGENT AS OF JULY 6, 2004 IS:
                           Interstate Transfer Company
                           6084 S. 900 E., Suite 101
                           Salt Lake City, UT 84121


DIVIDENDS
The Company presently intends to retain future earnings to support the Company's
growth.  Any payment of cash dividends in the future will be dependent upon: the
amount of funds legally available, the Company's earnings;  financial condition;
and capital  requirements.  The Board of Directors has determined,  based on the
capital  needs of the Company,  that there will likely not be cash  dividends in
the foreseeable future.


                                     PART II

ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS
The following is a discussion of the Company's financial  condition,  results of
operations,  liquidity and capital resources.  This discussion should be read in
conjunction with the Company's  Consolidated  Financial Statements and the notes
thereto included elsewhere in this Form 10-KSB.

FORWARD-LOOKING INFORMATION-GENERAL
This report contains a number of forward-looking  statements,  which reflect the
Company's current views with respect to future events and financial  performance
including statements regarding the Company's projections.  These forward-looking
statements  are  subject to certain  risks and  uncertainties  that could  cause
actual  results  to  differ   materially  from   historical   results  or  those
anticipated.  In this report, the words  "anticipates",  "believes",  "expects",
"intends",   "future",  "plans",  "targets"  and  similar  expressions  identify
forward-looking statements. Readers are cautioned to not place undue reliance on
the forward-looking statements contained herein, which speak only as of the date
hereof  the  Company   undertakes  no   obligation  to  publicly   revise  these
forward-looking  statements,  to reflect events or circumstances  that may arise
after the date  hereof.  Additionally,  these  statements  are based on  certain
assumptions  that may prove to be  erroneous  and are  subject to certain  risks
including,  but not  limited  to,  the  Company's  dependence  on  limited  cash
resources,  and its  dependence  on certain key  personnel  within the  Company.
Accordingly,   actual  results  may  differ,   possibly  materially,   from  the
predictions contained herein.

GENERAL
Shadows  Bend was  founded to develop and operate  "specialty  care"  facilities
designed to help people diagnosed with Alzheimer's or other related illnesses to
manage their lives with the greatest independence and quality. The business plan
included the  construction  and  acquisition  of resident  care  facilities  for
persons afflicted with Alzheimer's or other related dementia diseases. Residents
of these  facilities are among the four million plus adults in the United States
with Alzheimer's or related dementia illnesses that want practical  solutions at
affordable costs.

The Company currently has no operations.

On June 1,  2002,  the  Company  purchased  Three Oaks  Corporation  for a total
purchase  price of  $1,824,942.  The  terms  of this  transaction  included  the
issuance of 150,000  shares of the Company  common stock valued at $67,500,  the
issuance of a promissory note payable in common stock of the Company of $518,564
and the assumption of liabilities totaling $1,306,378.
<PAGE>
<PAGE>                                                                         8

On June 1, 2002, the Company also purchased Holly Hills Corporate Services, Inc.
for a total purchase  price of $878,304.  This  acquisition  was structured in a
manner  similar to the Three Oaks  purchase and included the issuance of 100,000
shares of the  Company's  common  stock  valued at  $45,000,  the  issuance of a
promissory  note  payable in common  stock of the  Company of  $200,609  and the
assumption of liabilities totaling $677,695.

On December 31, 2002,  Three Oaks  Corporation and Holly Hills were  repossessed
for monies owed.  Shadows Bend agreed to release the  properties  for delinquent
mortgage payments owed to the original lenders.

During 2000 the Company  acquired  100% of Diamond  Holding LLC  ("Diamond"),  a
company that owned a six-acre tract of land in Baton Rouge, Louisiana. The tract
of land,  which  represented  substantially  all of the assets of  Diamond,  was
originally  part of a plan by the Company to  construct an  Alzheimer's  disease
treatment  and  home  health  center  in Baton  Rouge.  In  connection  with the
acquisition of Diamond,  the six-acre tract of land was independently  appraised
and recorded at $1,110,000, based upon the appraisal. The acquisition of Diamond
was a  related  party  transaction  because  Diamond  was  primarily  owned  and
controlled by a 35%  stockholder  in the Company.  At the date of acquisition of
Diamond,  there  was a  mortgage  on the  six-acre  tract  of land;  however,  a
cancellation of mortgage was filed with the Clerk of Court and Recorder in Baton
Rouge, Louisiana on November 10, 2000.

Effective June 1, 2002, a stockholder, holding a note collateralized by the land
in Baton Rouge,  demanded  payment of the note.  The Company was unable to repay
the note and the land was taken in foreclosure. The Company recognized a loss of
$1,011,260 upon surrender of the land.

The Company  considered a public sale or private  placement of its common stock,
but no active  trading  market  for its  existing  outstanding  shares  had been
established  and,  accordingly,  this option,  under a business  plan to develop
Alzheimer's  care  facilities,  was remote.  The performance of the two acquired
facilities was not satisfactory, resulting in delinquencies on existing debt and
significantly  impacting the Company's ability to obtain additional conventional
loans or HUD financing. For these reasons, the Company returned the two acquired
companies to their former owners,  thereby  eliminating  the cash demands on the
Company.  This  relegated  the Company to the status of a  non-operating  public
shell that could be used to  re-capitalize a possibly more attractive  operating
Company.  The Company's  long-term  viability as a going concern is dependent on
certain key factors as follows:

     * The  ability  of the  Company  to obtain  adequate  sources of funding to
       continue operations.

     * The  ability of the  Company to find a suitable  operating  company  with
       which to merge.

There can be no  assurance  that the Company  will be  successful  in  obtaining
financing or with respect to identifying a viable merger candidate and, if it is
successful, as to when such objectives may be achieved.

RESULTS OF OPERATIONS
On June 1, 2002,  Shadows Bend purchased Three Oaks  Corporation  ("Three Oaks")
and Holly  Hills  Corporate  Services,  Inc.  ("Holly  Hills") for stock and the
assumption of  liabilities.  Shadows Bend Court in Pensacola,  Florida and Holly
Hills were  foreclosed  on  December  31,  2002 due to  mortgage  debt not being
serviced by the Company.  The previous  owners were  guarantors  of the debt and
have taken repossession of the property to avoid bank foreclosure.

COMPARISON OF YEAR ENDED  DECEMBER 31, 2002 TO YEAR ENDED  DECEMBER 31, 2001
For the years ended  December 31, 2002 and 2001, the Company had no revenue from
continuing operations.  However, operating expenses increased from $415,968 for
the year ended  December 31, 2001 to $4,907,700  for the year ended December 31,
2002. These expenses included a $3,520,000  increase in consulting  expenses and
other expenses associated with the operation of two facilities.

LIQUIDITY AND CAPITAL RESOURCES
Since its inception,  the Company has not generated  significant revenue and has
been  dependent on debt and equity raised from  individual  investors to sustain
its  operations.  During the twelve months ended December 31, 2002 and 2001, the
Company  incurred net losses of $(5,972,188)  and $(456,318),  respectively.  At
December 31, 2002,  the Company had negative  working  capital of  $(2,690,586).
These factors raise substantial doubt about the Company's ability to continue as
a going concern.

The Company's long-term viability as a going concern is dependent on certain key
factors as follows:
<PAGE>
<PAGE>                                                                         9

     * The  ability  of the  Company  to obtain  adequate  sources of funding to
       continue operations.

     * The  ability of the  Company to find a suitable  operating  company  with
       which to merge.

There can be no  assurance  that the Company  will be  successful  in  obtaining
financing or with respect to identifying a viable merger candidate and, if it is
successful, as to when such objectives may be achieved.

The Company's  discussion and analysis of its financial condition and results of
operations are based upon its consolidated financial statements, which have been
prepared in accordance  with  generally  accepted  accounting  principles in the
United  States.  The  preparation  of these  financial  statements  requires the
Company to make  estimates  and  judgments  that affect the reported  amounts of
assets, liabilities,  revenue and expenses, and related disclosure of contingent
assets  and  liabilities.  On  an  ongoing  basis,  the  Company  evaluates  its
estimates.  The Company  bases its  estimates on  historical  experience  and on
various  other  assumptions  that  are  believed  to  be  reasonable  under  the
circumstances.  These  estimates  and  assumptions  provide a basis  for  making
judgments  about the  carrying  values of assets  and  liabilities  that are not
readily  apparent  from other  sources.  Actual  results  may differ  from these
estimates under different  assumptions or conditions,  and these differences may
be material.

ACCOUNTING MATTERS AND RECENTLY ISSUED PRONOUNCEMENTS
In June 2001, the Financial Accounting Standards Board ("FASB") issued Statement
of Financial Accounting Standards ("SFAS") No. 141, "Business Combinations", and
No. 142,  "Goodwill  and Other  Intangible  Assets".  SFAS No. 141  requires all
business  combinations  initiated  after June 30, 2001 to be accounted for using
the purchase method. In addition,  companies are required to review goodwill and
intangible  assets  reported in  connection  with prior  acquisitions,  possibly
disaggregate and report separately  previously identified intangible assets, and
in certain cases reclassify  certain  intangible assets into goodwill.  SFAS No.
142  eliminates  the  amortization  of goodwill  and requires  that  goodwill be
reviewed  annually for  impairment.  SFAS No. 142 also  requires that the useful
lives of previously recognized intangible assets be reassessed and the remaining
amortization  periods be adjusted  accordingly.  SFAS No. 142 is  effective  for
fiscal  years  beginning  after  December  15, 2001 and affects all goodwill and
other  intangible  assets recorded on the Company's  balance sheet at that date,
regardless of when the assets were initially  recorded.  The  implementation  of
SFAS No. 142 did not have any impact on the  Company's  results of operations or
financial position.

In June 2001,  the FASB issued SFAS No. 143,  "Accounting  for Asset  Retirement
Obligations".  SFAS No. 143 addresses  accounting and reporting for  obligations
associated with the retirement of tangible  long-lived assets and the associated
asset retirement  costs.  This statement is effective for fiscal years beginning
after July 15, 2002. The  implementation of SFAS No. 143 did not have any impact
on the Company's results of operations or financial position.

In August 2001,  the FASB issued SFAS No. 144,  which  supercedes  SFAS No. 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
Be Disposed Of," and certain  provisions of APB Opinion No. 30,  "Reporting  the
Results of  Operations  -  Reporting  the  Effects of Disposal of a Segment of a
Business,  and  Extraordinary,  Unusual and  Infrequently  Occurring  Events and
Transactions."  SFAS No. 144 retains the fundamental  provisions of SFAS No. 121
related to: (i) the  recognition and measurement of the impairment of long-lived
assets to be held and used, and (ii) the measurement of long-lived  assets to be
disposed  by sale.  It provides  more  guidance  on  estimating  cash flows when
performing  recoverability  tests,  requires long-lived assets to be disposed of
other  than by sale to be  classified  as held  and  used  until  disposal,  and
establishes more restrictive  criteria to classify long-lived assets as held for
sale.  In  addition,  SFAS No.  144  supersedes  the  accounting  and  reporting
provisions  of APB Opinion  No. 30 for the  disposal of a segment of a business.
However,  it  retains  the  basic  provisions  of APB  Opinion  No. 30 to report
discontinued  operations  separately from continuing  operations and extends the
reporting  of a  discontinued  operation  to  a  component  of  an  entity.  The
implementation  of SFAS  No.  144 is not  expected  to have  any  impact  on the
Company's results of operations or financial position.

In June 2002,  the FASB issued SFAS No. 146,  "Accounting  for Costs  Associated
with Exit or Disposal  Activities,"  which  addresses  financial  accounting and
reporting for costs  associated with exit or disposal  activities and supersedes
Emerging Issues Task Force ("EITF") Issue No. 94-3, "Liability  Recognition for
Certain  Employee  Termination  Benefits  and  Other  Costs to Exit an  Activity
(including  Certain Costs Incurred in a  Restructuring)."  SFAS No. 146 requires
companies to recognize costs  associated  with exit or disposal  activities when
they are incurred rather than at the date of a commitment to an exit or disposal
plan. In addition, SFAS No. 146 establishes that fair value is the objective for

<PAGE>


<PAGE>                                                                        10

initial  measurement  of the  liability.  SFAS No. 146 is effective  for exit or
disposal  activities  initiated  after  December 31, 2002, but early adoption is
permitted. SFAS No. 146 was followed for 2002 disposal activities.

In December  2002,  the FASB issued  SFAS No. 148,  "Accounting  for Stock Based
Compensation",  which  amends  SFAS No.  123 to provide  alternative  methods of
transaction for an entity that  voluntarily  changes to the fair value method of
accounting for stock based employee compensation.  It also amends the disclosure
provisions of SFAS No. 123 to require prominent  disclosure about the effects on
reported net income of an entity's  accounting  policy decisions with respect to
stock based employee compensation.  Finally, SFAS No. 148 amends APB Opinion No.
28, "Interim  Financial  Reporting",  to require  disclosure of those effects in
interim consolidated financial statements.  SFAS No. 148 is effective for fiscal
years ended after  December  15,  2002,  but early  adoption is  permitted.  The
Company  continues to follow the provisions of APB Opinion No. 25 in recognizing
employee  stock-based  compensation;  however,  the Company began  following the
disclosure requirements of SFAS No. 148 in January 2003.

In  November  2002,  the FASB  issued  Interpretation  No.  45 ("FIN  No.  45"),
"Guarantor's  Accounting and Disclosure  Requirements for Guarantees,  Including
Indirect  Guarantees  of  Indebtedness  of  Others."  FIN No. 45  expands on the
accounting  guidance of Statements No. 5, 57, and 107 and  incorporates  without
change the provisions of FASB  Interpretation No. 34, which is being superseded.
FIN No. 45 will  affect  leasing  transactions  involving  residual  guarantees,
vendor and manufacturer guarantees, and tax and environmental  indemnities.  All
such  guarantees  will  need  to be  disclosed  in the  notes  to the  financial
statements  starting  with the  period  ending  after  December  15,  2002.  For
guarantees issued after December 31, 2002, the fair value of the obligation must
be reported on the balance sheet. Existing guarantees will be grand fathered and
will not be recognized on the balance sheet.  The  implementation  of FIN No. 45
did not have any impact on the  Company's  results of  operations  or  financial
position.

In  January  2003,  the  FASB  issued  Interpretation  No.  46 ("FIN  No.  46"),
"Consolidation  of  Variable  Interest  Entities."  FIN No. 46 expands  upon and
strengthens  existing  accounting  guidance that addresses when a company should
include in its financial  statements the assets,  liabilities  and activities of
another entity. A variable interest entity is a corporation, partnership, trust,
or any other legal structure used for business purposes that either (a) does not
have equity investors with voting rights or (b) has equity investors that do not
provide sufficient financial resources for the entity to support its activities.
FIN No. 46 requires a variable  interest  entity to be consolidated by a company
if that  company is subject to a majority of the risk of loss from the  variable
interest  entity's  activities  or is  entitled  to  receive a  majority  of the
entity's residual returns or both. The consolidation  requirements of FIN No. 46
apply  immediately to variable interest entities created after January 31, 2003.
The consolidation  requirements apply to older entities in the first fiscal year
or interim period beginning after July 15, 2003.  Disclosure  requirements apply
to any financial statements issued after January 31, 2003. The implementation of
FIN No. 46 did not have any impact on the  Company's  results of  operations  or
financial position.

ITEM 7. FINANCIAL STATEMENTS

The financial statements of the Company are set forth beginning on page F-1.

ITEM  8.  CHANGES  IN AND  DISAGREEMENTS  WITH  ACCOUNTANTS  ON  ACCOUNTING  AND
FINANCIAL DISCLOSURE
On May 3, 2002,  Shadows Bend  Development,  Inc. (the "Company")  dismissed its
independent  auditor,  Clyde  Bailey,  PC ("Clyde  Bailey,  PC") and engaged the
services  of Ham,  Langston & Brezina,  LLP,  Certified  Public  Accountants  of
Houston,  Texas ("Ham,  Langston & Brezina") as its new independent auditors for
its current  fiscal year,  ending  December 31, 2002.  The Company's  Board (the
"Board") authorized the dismissal of Clyde Bailey, PC and the engagement of Ham,
Langston & Brezina.
<PAGE>

<PAGE>                                                                        11

During the two most recent fiscal years of the Company ended  December 31, 2001,
and  the  subsequent   interim  period  through  May  3,  2002,  there  were  no
disagreements  between the Company and Clyde Bailey, PC under Item 304(a)(1)(iv)
or on any matter of  accounting  principles or  practices,  financial  statement
disclosure, or auditing scope or procedure, which disagreements, if not resolved
to Clyde Bailey,  PC's satisfaction,  would have caused Clyde Bailey, PC to make
reference  to the subject  matter of the  disagreement  in  connection  with its
reports;  and there were no reportable  events described under Item 304(1)(v) of
Regulation S-B.

The audit reports of Clyde Bailey, PC on the consolidated  financial  statements
of the Company as of and for the fiscal  years ended  December 31, 2000 and 2001
did not contain  any adverse  opinion or  disclaimer  of opinion,  nor were they
qualified or modified as to audit scope or accounting principles.  The financial
statement  which  accompanies  the  Company's  Form  10-KSB  for the year  ended
December  31,  2001  and  that  were  filed  with the  Securities  and  Exchange
Commission on April 18, 2002 did contain a going concern disclosure stating that
the financial  statements were prepared based on the assumption that the Company
would  continue as a going concern.  A letter from Clyde Bailey,  PC is attached
hereto as Exhibit 16.1,  indicating its concurrence with the disclosures in this
and the preceding paragraph.

During the two most recent fiscal years of the Company ended  December 31, 2001,
and the  subsequent  interim  period  through  May 3, 2002,  the Company did not
consult  with Ham,  Langston  & Brezina  regarding  either  the  application  of
accounting principles to a specified  transaction,  either completed or proposed
or  the  type  of  audit  opinion  that  might  be  rendered  on  the  Company's
consolidated financial statements, nor has Ham, Langston & Brezina, LLP provided
the Company a written report or oral advice  regarding such  principles or audit
opinion.

ITEM 8A. CONTROLS AND PROCEDURES
Michael  Sciacchetano,  the Company's Chief  Executive  Officer and Acting Chief
Accounting  Officer,  has concluded that the Company's  disclosure  controls and
procedures are  appropriate  and effective.  He has evaluated these controls and
procedures as of a date within 90 days of the filing date of this report on Form
10-KSB.  There were no significant changes in the Company's internal controls or
in other factors that could  significantly  affect these controls  subsequent to
the date of their  evaluation,  including any corrective  actions with regard to
significant deficiencies and material weaknesses.


                                    PART III

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

The directors and officers of the Company, as of December 31, 2002 are set forth
below.  The  directors  hold  office for their  respective  term and until their
successors  are duly  elected.  The  officers  serve at the will of the Board of
Directors.

Directors and Executive Officers

Set forth below is the names,  ages, and positions of the executive officers and
directors of the Company

    Name                          Age        Office
    Michael Sciacchetano          35         President, Director and Principal
                                             Financial Accounting Officer
    Ivan Galindo                  24         Director

MICHAEL  SCIACCHETANO  has served as  President  and  Director  of Shadows  Bend
Development  since its  inception in January  2000.  From  September  1999 until
present he has been the president and CEO of Holly Hills Corporate Services,  an
assisted living facility  structured for the care of Alzheimer residents located
in  Marion,  Illinois.  From  August  1997  until  present  he has also been the
president of Trace  Resources,  a company which manages  healthcare  facilities,
diagnostic imaging companies and home care agencies. From 1993 until 1997 he was
the  administrator  and owner of Southern Nursing Home Care, a 200+ patient home
health agency.

IVAN GALINDO has served as Director since  September  2002. He is currently vice
president of marketing  for the Rogo Letter with an emphasis on the  development
of new business.  He has held this position since January of 2002. Prior to that
position  he managed the  cleaning  operation  and  marketing  for a  commercial
cleaners  from 1998  through  December  2001.  The Rogo  Letter was  retained by
Shadows Bend Development.
<PAGE>
<PAGE>                                                                        12

All  officers  and  directors  listed above will remain in office until the next
annual meeting of the Company's  stockholders,  and until their  successors have
been duly elected and  qualified.  There are no  agreements  with respect to the
election of Directors.  The Company has not compensated the Company's  Directors
for service on the Company's  Board of  Directors,  any  committee  thereof,  or
reimbursed  for expenses  incurred for  attendance  at meetings of the Company's
Board of Directors  and/or any  committee of the  Company's  Board of Directors.
Officers are  appointed  annually by the  Company's  Board of Directors and each
Executive  Officer serves at the discretion of the Company's Board of Directors.
The  Company  does not have any  standing  committees.  The  Company's  Board of
Directors  may in the future  determine  to pay  Directors'  fees and  reimburse
Directors for expenses related to their activities.

None of the Company's  Officers and/or  Directors have ever filed any bankruptcy
petition,  been convicted of or been the subject of any criminal  proceedings or
the subject of any order,  judgment or decree  involving  the  violation  of any
state or federal securities laws.

Certain Legal Proceedings

No existing  director,  or  executive  officer of the Company has  appeared as a
party in any legal  proceeding  material  to an  evaluation  of his  ability  or
integrity during the past five years.

Compliance with Section 16(a) of the Exchange Act

Based solely upon a review of activity provided by the Company's transfer agent,
there have been no changes  regarding  Section 16(a) of the Securities  Exchange
Act of 1934,  as amended (the  "Exchange  Act"),  which  requires the  Company's
officers,  directors and persons who own more than 10% of the  Company's  Common
Stock to file reports of ownership and changes in ownership with the SEC and the
National Association of Securities Dealers, Inc. Officers, directors and greater
than 10%  stockholders  are required by  regulation  to furnish the Company with
copies of all forms they file pursuant to Section 16(a) of the Exchange Act.

ITEM 10. EXECUTIVE COMPENSATION

Compensation of Executive Officers
There was no compensation  awarded to, earned by, or paid to any named executive
officer by any person for services rendered in any capacities to the Company and
its subsidiaries for the fiscal years ended December 31, 2002.

There  were  no  employment  agreements  with  any  of the  Company's  executive
officers. Each of the officers is currently providing hourly consulting services
to the Company  through  Trace  Resources  LLC, an entity  controlled by Michael
Sciacchetano,  an officer,  director,  and principal shareholder of the Company.
Management  believes that the fees being charged for the consulting  work are at
or below fees that would be charged by outside, unrelated consultants.  The fees
for these services, which at December 31, 2002, totaled approximately $72,000 is
being  accrued  and will be paid  when,  and if,  the  Company is able to secure
funding for its  operations.  It is  anticipated  that if the Company is able to
secure  funding  to  construct  and  operate  its  first  facility,  each of the
executive  officers  would cease  providing  consulting  services,  would become
full-time employees,  and would receive compensation  commensurate with industry
standards.  It is also  anticipated  that each would negotiate and enter into an
employment  agreement,  which would also cover the services  thereafter rendered
for the Louisiana Corporation and any other future subsidiary.  The Company will
be  adopting  a stock  option  and/or  stock  benefit  plan  for its  employees,
directors, and consultants in 2002.

Compensation of Directors
Directors are permitted to receive fixed fees and other  compensation  for their
services as  directors.  The board of  directors  has the  authority  to fix the
compensation  of  directors.  No  amounts  have  been paid to,  or  accrued  to,
directors in their capacity as directors.  There is no current compensation plan
or arrangement for the directors' services.

ITEM 11. SECURITY  OWNERSHIP OF CERTAIN  BENEFICIAL  OWNERS AND MANAGEMENT
Based upon information received from the persons concerned, each person known to
us to be the  beneficial  owner of more than  five  percent  of the  outstanding
shares of the  Company's  Common  Stock,  each  director,  each of the Company's
executive officers and all of the Company's  directors and executive officers as
a group,  owned  beneficially  as of July 6, 2004,  the number and percentage of
outstanding  shares of the  Company's  Common Stock  indicated in the  following
table:
<PAGE>
<PAGE>                                                                        13

<TABLE>
                        <S>                                 <C>                     <C>

                  Name and Address of
                  Beneficial Owner                   Number of Shares (1)       Percentage (2)


                  Michael W. Sciacchetano                 3,110,374                51.7%
                  200 Lafayette Street
                  Suite 200
                  Baton Rouge, LA 70821

                  Executive officers and
                  directors as a group
                  (1 person)                               3,110,374                51.7%

                  Palisade Properties, Inc.                1,058,400                17.6%
                  Leonard LaPlace
                  Adolph LaPlace
                  6989 Menlo Dr.
                  Baton Rouge, LA 70808
</TABLE>


(1) Unless  otherwise  indicated,  all shares are held directly with sole voting
and investment power.
(2)  Based  on  6,016,054  shares  of the  Company's  Common  Stock  issued  and
outstanding.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
In connection with the closing of the reverse  acquisition of the Company by the
Louisiana Corporation in October 2000, the Louisiana Corporation paid a finder's
fee of $150,000 to Milagro Holdings, Inc., one of the selling shareholders and a
shareholder owning in excess of 5% of the outstanding common shares. In December
2000 the  Company  borrowed  $50,000  from Three  Oaks  Manor,  Inc.,  an entity
controlled  by  Michael  Sciacchetano,   an  officer,  director,  and  principal
shareholder of the Company, and issued a promissory note to the lender. The note
is non-interest  bearing, but includes a service fee of $10,000. In addition the
Company have agreed to issue 20,000 shares to the lender.  The principal  amount
of the loan,  the  service  fee,  and the stock are due on or before  January 2,
2003.  These funds were used to repay,  in part, the $150,000  borrowed in April
2000.

Trace Resources LLC, an entity controlled by Michael  Sciacchetano,  an officer,
director, and principal shareholder of the Company, provides consulting services
to the Company in  connection  with the  planning and  development  of its first
facility.  Each of the  officers  provides  consulting  services  to the Company
through this  entity.  For the year ended  December  31,  2002,  the Company had
accrued  approximately $72,000 to Trace Resources for these consulting services.
Trace  Resources  has agreed not to seek payment of these fees until the Company
has received  funding for the first facility.  The parties have agreed that this
consulting  arrangement will continue,  and fees will continue to accrue,  until
the  funding  is  received,  at which  time each of the  officers  would  become
full-time employees.

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

         a. Documents Filed with Report

            1. Financial Statements

               The  financial  statements  listed on the  accompanying  Index to
               Financial Statements are filed as part of this Report.

            2. Exhibits

   Exhibit No.         Description of Exhibit                               Page

     31.1              Certification of Chief Executive Officer              E-2
                       Pursuant to Rule 13a-14(a) under the
                       Securities Exchange Act of 1934(1)
<PAGE>
<PAGE>                                                                        14

     31.2              Certification of Chief Executive Officer              E-4
                       Pursuant to Rule 13a-14(a) under the
                       Securities Exchange Act of 1934(1)

     32                Certification Pursuant to Rule 13a-14(b)              E-6
                       under the Securities Exchange Act of 1934
                       and Section 1350 of Chapter 63 of Title 18
                       of United States Code (1)


   (1)  Filed or, in the case of Exhibit 32, furnished herewith.

        b. Reports on Form 8-k

           1. None

<PAGE>


<PAGE>








                         SHADOWS BEND DEVELOPMENT, INC.
                    (A CORPORATION IN THE DEVELOPMENT STAGE)
                                   __________




                        CONSOLIDATED FINANCIAL STATEMENTS
         WITH REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
                  for the year ended December 31, 2002 and 2001


























                                       F-1

<PAGE>
<PAGE>


                         SHADOWS BEND DEVELOPMENT, INC.
                    (A CORPORATION IN THE DEVELOPMENT STAGE)
                                TABLE OF CONTENTS
                                   __________

                                                                            Page

Reports of Independent Registered Public Accounting Firm                     F-3

Consolidated Financial Statements:

  Consolidated Balance Sheet as of December 31, 2002                         F-5

  Consolidated Statement of Operations for the years ended
    December 31, 2002 and 2001                                               F-6

  Consolidated Statement of Stockholders' Equity for the
    years ended December 31, 2002 and 2001                                   F-7

  Consolidated Statement of Cash Flows for the years ended
    December 31, 2002 and 2001                                               F-9

Notes to Consolidated Financial Statements                                  F-10






































                                       F-2

<PAGE>










<PAGE>




             Report of Independent Registered Public Accounting Firm



To the Board of Directors and Stockholders
Shadows Bend Development, Inc.


We have  audited the  accompanying  consolidated  balance  sheet of Shadows Bend
Development,  Inc.  and  subsidiaries  as of  December  31, 2002 and the related
consolidated  statements of operations,  stockholders' equity (deficit) and cash
flows for the year then ended. These consolidated  financial  statements are the
responsibility of the Company's management.  Our responsibility is to express an
opinion on these consolidated financial statements based on our audit.

We conducted  our audit in accordance  with the standards of the Public  Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit 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  audit  provides  a
reasonable basis for our opinion.

In our opinion, the consolidated  financial statements referred to above present
fairly, in all material respects, the consolidated financial position of Shadows
Bend Development, Inc. and subsidiaries as of December 31, 2002, and the results
of their  operations  and their cash flows for the year the year then ended,  in
conformity with accounting principles generally accepted in the United States of
America.

The  accompanying  financial  statements  have been  prepared  assuming that the
Company  will  continue  as a  going  concern.  As  discussed  in  Note 2 to the
financial statements,  the Company has suffered recurring losses,  negative cash
flows from operations and has a net capital deficiency at December 31, 2002 that
raise  substantial  doubt  about its  ability to  continue  as a going  concern.
Management's  plans with  regard to this  matter are also  discussed  in Note 2.
These financial statements do not include any adjustments that might result from
the outcome of this uncertainty.





                                    /s/ Ham, Langston & Brezina, L.L.P.

Houston, Texas
July 10, 2004,













                                       F-3







<PAGE>






<PAGE>


             Report of Independent Registered Public Accounting Firm



To the Board of Directors and Stockholders
Shadows Bend Development, Inc.


I  have  audited  the  accompanying   consolidated   statements  of  operations,
stockholders'  equity  (deficit) and cash flows for the year ended  December 31,
2001. These  consolidated  financial  statements are the  responsibility  of the
Company's  management.  My  responsibility  is to  express  an  opinion on these
consolidated financial statements based on my audit.

I conducted my audit in  accordance  with the  standards  of the Public  Company
Accounting Oversight Board (United States).  Those standards require that I plan
and perform the audit 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.  I believe that my audit provides a reasonable
basis for my opinion.

In my opinion,  the consolidated  financial statements referred to above present
fairly,  in all material  respects,  the consolidated  results of operations and
cash flows of Shadows Bend  Development,  Inc.  for the year ended  December 31,
2001, in conformity with accounting  principles generally accepted in the United
States.

The  accompanying  financial  statements  have been  prepared  assuming that the
Company  will  continue  as a  going  concern.  As  discussed  in  Note 2 to the
consolidated financial statements,  the Company has no viable operations to date
and little or no tangible assets that raise  substantial doubt about its ability
to continue as a going  concern.  The  financial  statements  do not include any
adjustments that might result from the outcome of this uncertainty.





                                               /s/ Clyde Bailey P.C.

Houston, Texas
March 30, 2002



















                                       F-4
<PAGE>
<PAGE>



                         SHADOWS BEND DEVELOPMENT, INC.
                    (A CORPORATION IN THE DEVELOPMENT STAGE)
                           CONSOLIDATED BALANCE SHEET
                                December 31, 2002
                                   __________
<TABLE>
        <S>                                                                                                 <C>

     ASSETS

Current assets:
  Cash and cash equivalents                                                                             $     -

    Total current assets                                                                                      -

      Total assets                                                                                      $     -


LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
  Accounts payable                                                                                          31,178
  Accounts payable to related parties                                                                      142,686

    Total current liabilities                                                                              173,864

Stockholders' equity:
  Common stock, $0.001 par value, 50,000,000 shares
    authorized, 4,311,833 shares issued and outstanding                                                      4,312
  Additional paid-in capital                                                                             7,886,012
  Accumulated deficit                                                                                   (8,064,188)

    Total stockholders' equity                                                                            (173,864)

      Total liabilities and stockholders' equity                                                         $     -
</TABLE>




































                 The accompanying notes are an integral part of
                    These consolidated financial statements.
                                       F-5
<PAGE>

<PAGE>

                         SHADOWS BEND DEVELOPMENT, INC.
                    (A CORPORATION IN THE DEVELOPMENT STAGE)
                      CONSOLIDATED STATEMENT OF OPERATIONS
                 for the years ended December 31, 2002 and 2001
                                   __________


<TABLE>
        <S>                                                                                 <C>               <C>

                                                                                            2002             2001


Loss from operation of discontinued
  long-term health segment                                                              $(7,512,345)      $  (456,318)

Net loss                                                                                $(7,512,345)      $  (456,318)


Basic and diluted net loss per common share                                             $     (1.77)      $     (0.42)

Basic and diluted weighted average shares outstanding                                     4,034,785         1,083,303
</TABLE>











































                 The accompanying notes are an integral part of
                    These consolidated financial statements.
                                       F-6
<PAGE>

<PAGE>

                         SHADOWS BEND DEVELOPMENT, INC.
                    (A CORPORATION IN THE DEVELOPMENT STAGE)
  UNAUDITED CONSOLIDATED CONDENSED STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)
                 for the years ended December 31, 2002 and 2001
                                   __________
<TABLE>
<S>                                   <C>    <C>      <C>               <C>         <C>        <C>              <C>             <C>

                                                                   Additional    Unissued
                                         Common Stock                Paid-In      Common      Subscription   Accumulated
                                      Shares         Amount          Capital      Stock        Receivable     Deficit        Total

Balance at December 31, 2000        3,000,173      $  3,001       $  763,199   $     -       $      -         $(95,525      $670,675

Common stock issued for consul-
  ting services                       826,417           826          351,878         -              -             -          352,704

Net loss                                 -             -                -            -              -         (456,318)    (456,318)

Balance at December 31, 2001        3,826,590         3,827        1,115,077         -              -         (551,843)      567,061

Common stock issued to acquire
  Holly Hills Corporate
  Services, Inc.                       10,000            10           44,990      155,609           -              -         200,609

Common stock issued to acquire
  Three Oaks Corporation               15,000            15           67,485      451,064           -              -         518,564

Adjustment of purchase price for
  Stock not issued                       -             -                -        (606,673)          -              -       (606,673)

Common stock issued in exchange
  for subscription receivable         150,000           150        1,152,595         -        (1,152,745)          -             -

Subscription receivable treated
  as compensation                        -             -                -            -         1,152,745           -       1,152,745

Common stock issued for
  employee compensation               103,750           103           31,058         -              -              -          31,161

Common stock to be issued in re-
  payment of a note payable to
  a related party                        -             -                -         356,251           -              -         356,251

Cancellation of debt to related
  party without issuance of
  common stock                           -              -             356,251    (356,251)         -               -             -

Stock options issued for
  consulting services                     -             -           1,175,000        -              -              -       1,175,000

Common stock issued for consul-
  ting services                        215,000           215        2,344,785        -              -              -       2,345,000
</TABLE>




                 The accompanying notes are an integral part of
                    These consolidated financial statements.
                                   (Continued)
                                       F-7
<PAGE>

<PAGE>

                         SHADOWS BEND DEVELOPMENT, INC.
                    (A CORPORATION IN THE DEVELOPMENT STAGE)
  UNAUDITED CONSOLIDATED CONDENSED STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)
                 for the years ended December 31, 2002 and 2001
                                   __________
<TABLE>
<S>                                    <C>    <C>    <C>           <C>         <C>              <C>             <C>             <C>

                                                                Additional    Unissued
                                         Common Stock            Paid-In       Common       Subscription  Accumulated
                                      Shares         Amount      Capital       Stock         Receivable      Deficit
Cancellation of shares                   (8,507)        (8)            8          -               -             -              -
Capital contribution upon
  Return of Holly Hills Corporate
  Services, Inc. and Three Oaks
  Corporation to former owners              -            -      1,598,763          -              -              -        1,598,763

Net loss                                    -            -           -             -              -         (7,512,345)  (7,512,345)

Balance at December 31, 2002          4,311,833   $  4,312     $7,886,012    $     -        $     -        $(8,064,188)  $ (173,864)
</TABLE>



































                 The accompanying notes are an integral part of
                    These consolidated financial statements.
                                       F-8
<PAGE>

<PAGE>

                         SHADOWS BEND DEVELOPMENT, INC.
                    (A CORPORATION IN THE DEVELOPMENT STAGE)
                 CONSOLIDATED CONDENSED STATEMENT OF CASH FLOWS
                 for the years ended December 31, 2002 and 2001
                                   __________

<TABLE>
<S>                                                                                        <C>                  <C>

                                                                                        2002                  2001

Cash flows from operating activities:
  Net loss                                                                          $(7,512,345)          $  (456,318)
  Adjustments to reconcile net loss to net cash
    provided (used) by operating activities
      Loss from operation of discontinued long-term
        health segment                                                                7,512,345               456,318
                                                                                           -                     -

      Net cash provided (used) by continuing operations                                    -                     -
      Net cash provided (used) by discontinued operations                                36,484               (29,594)

        Net cash provided (used) by operating activities                                 36,484               (29,594)

Cash flows from investing activities:
  Capital expenditures                                                                     -                  (27,070)

                                                                                           -                  (27,070)
      Net cash provided (used) by continuing operations                                    -                     -
      Net cash provided (used) by discontinued operations                                  -                  (27,070)

        Net cash used by investing activities                                              -                  (27,070)

Cash flows from financing activities:
  Proceeds from notes payable                                                              -                   57,000
  Payments of notes payable                                                             (37,871)                 -

                                                                                        (37,871)               57,000
      Net cash provided (used) by continuing operations                                    -                     -
      Net cash provided (used) by discontinued operations                               (37,871)               57,000

        Net cash provided (used) by financing activities                                (37,871)               57,000


Net increase (decrease) in cash and cash equivalents                                     (1,387)                  336

Cash and cash equivalents at beginning of period                                          1,387                 1,051

Cash and cash equivalents at end of period                                          $      -              $     1,387

</TABLE>





















              The accompanying notes are an integral part of these
             unaudited consolidated condensed financial statements.
                                       F-9
<PAGE>
<PAGE>

                         SHADOWS BEND DEVELOPMENT, INC.
                    (A CORPORATION IN THE DEVELOPMENT STAGE)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   __________


1.     Organization and Summary of Significant Accounting Policies

       Shadows Bend  Development,  Inc. (the "Company") is a Nevada  Corporation
       that was  previously  involved  in an effort to buy or develop  long-term
       care facilities equipped for the care of Alzheimer patients;  however, on
       December  31,  2002,  those  efforts  were  discontinued  and the Company
       disposed of all operations  associated  with long-term  care. The Company
       was established in its current form in an August 4, 2000 recapitalization
       transaction  with  Silver  Beaver  Mining  Company,  Inc.  The Company is
       considered  a  development  stage  enterprise  as defined in Statement of
       Financial  Accounting  Standards  ("SFAS")  No. 7 because the Company had
       devoted  substantially  all of its efforts to capital raising efforts and
       the  establishment  of a new  business.  The  Company  commenced  planned
       principal operations commenced upon acquisition of Three Oaks Corporation
       and Holly  Hills  Corporate  Services,  Inc.,  however,  lack of  funding
       resulted in those operations ceasing (See Note 5).

       Following is a summary of the Company's significant accounting policies:

       Significant Estimates

       The preparation of consolidated  financial  statements in conformity with
       accounting  principles generally accepted in the United States of America
       requires  management to make  estimates and  assumptions  that affect the
       reported  amounts of assets and  liabilities and disclosure of contingent
       assets  and  liabilities  at  the  dates  of the  consolidated  financial
       statements and the reported  amounts of revenues and expenses  during the
       periods.  Actual results could differ from estimates making it reasonably
       possible that a change in the estimates could occur in the near term.

       Principles of Consolidation

       The consolidated financial statements include the accounts of the Company
       and its wholly owned  subsidiaries  after  elimination of all significant
       inter-company accounts and transactions.

       Concentrations of Credit Risk

       Financial  instruments  which  subject the Company to  concentrations  of
       credit risk include cash and cash  equivalents  and accounts  receivable.
       The Company  maintains its cash and cash equivalents with major financial
       institutions  selected based upon  management's  assessment of the banks'
       financial  stability.  Balances  periodically exceed the $100,000 federal
       depository insurance limit. The Company has not experienced any losses on
       deposits.  Accounts receivable generally arise from services to customers
       in Florida and Louisiana. Collateral is generally not required for credit
       granted.  The Company  provides an allowance for potential  credit losses
       when necessary.

       Cash and Cash Equivalents

       The Company  considers all highly liquid  short-term  investments with an
       original  maturity  of three  months or less when  purchased,  to be cash
       equivalents.

       Property and Equipment

       Property and equipment is stated at cost.  Depreciation is computed using
       the straight-line  method over the estimated useful lives of 5 to 7 years
       for  fixtures  and  equipment  and 30 years for  buildings.  Additions or
       improvements  that  increase the value or extend the life of an asset are
       capitalized. Expenditures for normal maintenance and repairs are expensed
       as  incurred.  Disposals  are  removed  from the  accounts  at cost  less
       accumulated  depreciation  and  any  gain  or loss  from  disposition  is
       reflected  in  operations  currently.  All  Company  assets  were  either
       repossessed or returned to their previous owners in 2002
<PAGE>
<PAGE>

       Impairment of Long-Lived Assets

       In the event facts and  circumstances  indicate the  carrying  value of a
       long-lived asset, including associated  intangibles,  may be impaired, an
       evaluation  of  recoverability  is performed by comparing  the  estimated
       future  undiscounted  cash flows associated with the asset to the asset's
       carrying  amount  to  determine  if  a  write-down  to  market  value  or
       discounted cash flow is required.

                                      F-10

<PAGE>


                         SHADOWS BEND DEVELOPMENT, INC.
                    (A CORPORATION IN THE DEVELOPMENT STAGE)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   __________


1.     Organization and Summary of Significant Accounting Policies, continued

       Impairment of Long-Lived Assets, continued

       Management  periodically  evaluates  the  carrying  value  of  long-lived
       assets.  The evaluation of  recoverability  is performed by comparing the
       estimated future undiscounted cash flows associated with the asset to its
       carrying  amount.  Such  an  evaluation  was  used to  determine  that an
       impairment  write-down of certain  long-lived assets was necessary in the
       third quarter in 2002 (See Note 4).

       Income Taxes

       The Company uses the  liability  method of  accounting  for income taxes.
       Under this method,  deferred income taxes are recorded to reflect the tax
       consequences  on future  years of temporary  differences  between the tax
       basis of assets and liabilities and their financial  amounts at year-end.
       The Company provides a valuation  allowance to reduce deferred tax assets
       to their net realizable value.

       Stock-Based Compensation

       Financial  Accounting  Standard  No.  123,  "Accounting  for  Stock-Based
       Compensation"  ("SFAS No.  123")  established  financial  accounting  and
       reporting  standards for  stock-based  employee  compensation  plans.  It
       defined a fair value based  method of  accounting  for an employee  stock
       option or similar equity  instrument and encouraged all entities to adopt
       that method of accounting for all of their  employee  stock  compensation
       plans  and  include  the cost in the  income  statement  as  compensation
       expense.  However,  it also  allows  an  entity to  continue  to  measure
       compensation  cost for those plans using the intrinsic value based method
       of accounting  prescribed by Accounting  Principles Board ("APB") Opinion
       No. 25, "Accounting for Stock Issued to Employees".  The Company accounts
       for  compensation  cost for stock  option  plans in  accordance  with APB
       Opinion No. 25.

       Loss Per Share

       Basic  and  diluted  net loss per share is  computed  on the basis of the
       weighted average number of shares of common stock outstanding during each
       period.  Potentially  dilutive options that were outstanding  during 2002
       were not  considered  in the  calculation  of diluted  earnings per share
       because the  Company's  net loss  rendered  their  impact  anti-dilutive.
       Accordingly,  basic and  diluted  loss per share were  identical  for the
       period from inception, August 13, 2002, to December 31, 2002.

       Fair Value of Financial Instruments

       The Company includes fair value  information in the notes to consolidated
       financial statements when the fair value of its financial  instruments is
       different  from the book  value.  When the book value  approximates  fair
       value, no additional disclosure is made.

       Comprehensive Income (Loss)

       The Company has  adopted  Statement  of  Financial  Accounting  Standards
       ("SFAS")  No.  130,  Reporting  Comprehensive  Income,  which  requires a
       company to display an amount representing comprehensive income as part of
       the Company's  basic  consolidated  financial  statements.  Comprehensive
       income  includes  such  items as  unrealized  gains or losses on  certain
       investment   securities   and  certain   foreign   currency   translation
       adjustments. The Company's consolidated financial statements include none
       of the additional elements that affect comprehensive income. Accordingly,
       comprehensive income and net income are identical.









                                      F-11
<PAGE>
<PAGE>


                         SHADOWS BEND DEVELOPMENT, INC.
                    (A CORPORATION IN THE DEVELOPMENT STAGE)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   __________


1.     Organization and Summary of Significant Accounting Policies, continued

       Recently Issued Accounting Pronouncements

       In June 2001, the Financial  Accounting  Standards  Board ("FASB") issued
       Statement of Financial  Accounting  Standards ("SFAS") No. 141, "Business
       Combinations",  and No. 142, "Goodwill and Other Intangible Assets". SFAS
       No. 141 requires all business combinations  initiated after June 30, 2001
       to be accounted for using the purchase method. In addition, companies are
       required to review goodwill and intangible  assets reported in connection
       with prior  acquisitions,  possibly  disaggregate  and report  separately
       previously  identified intangible assets, and in certain cases reclassify
       certain  intangible  assets into  goodwill.  SFAS No. 142  eliminates the
       amortization of goodwill and requires that goodwill be reviewed  annually
       for  impairment.  SFAS No. 142 also  requires  that the  useful  lives of
       previously  recognized  intangible assets be reassessed and the remaining
       amortization periods be adjusted  accordingly.  SFAS No. 142 is effective
       for fiscal  years  beginning  after  December  15,  2001 and  affects all
       goodwill and other  intangible  assets recorded on the Company's  balance
       sheet  at  that  date,  regardless  of when  the  assets  were  initially
       recorded.  The  implementation of SFAS No. 142 did not have any impact on
       the Company's results of operations or financial position.

       In June  2001,  the FASB  issued  SFAS No.  143,  "Accounting  for  Asset
       Retirement Obligations".  SFAS No. 143 addresses accounting and reporting
       for  obligations  associated  with the retirement of tangible  long-lived
       assets and the  associated  asset  retirement  costs.  This  statement is
       effective  for  fiscal  years   beginning   after  June  15,  2002.   The
       implementation  of SFAS No. 143 did not have any impact on the  Company's
       results of operations or financial position.

       In August 2001, the FASB issued SFAS No. 144, which  supercedes  SFAS No.
       121,  "Accounting  for  the  Impairment  of  Long-Lived  Assets  and  for
       Long-Lived  Assets to Be  Disposed  Of," and  certain  provisions  of APB
       Opinion No. 30,  "Reporting  the Results of  Operations  - Reporting  the
       Effects  of  Disposal  of a Segment  of a  Business,  and  Extraordinary,
       Unusual and Infrequently Occurring Events and Transactions." SFAS No. 144
       retains the  fundamental  provisions  of SFAS No. 121 related to: (i) the
       recognition and measurement of the impairment of long-lived  assets to be
       held and  used,  and (ii) the  measurement  of  long-lived  assets  to be
       disposed by sale. It provides more guidance on estimating cash flows when
       performing   recoverability  tests,  requires  long-lived  assets  to  be
       disposed  of other than by sale to be  classified  as held and used until
       disposal,   and  establishes  more   restrictive   criteria  to  classify
       long-lived assets as held for sale. In addition,  SFAS No. 144 supersedes
       the  accounting  and  reporting  provisions of APB Opinion No. 30 for the
       disposal  of a segment  of a  business.  However,  it  retains  the basic
       provisions  of APB  Opinion  No.  30 to  report  discontinued  operations
       separately  from  continuing  operations  and extends the  reporting of a
       discontinued operation to a component of an entity. The implementation of
       SFAS  No.  144 did not  have  any  impact  on the  Company's  results  of
       operations or financial position.

       In June  2002,  the FASB  issued  SFAS  No. 146,  "Accounting  for  Costs
       Associated with Exit or Disposal  Activities," which addresses  financial
       accounting  and  reporting  for costs  associated  with exit or  disposal
       activities  and  supersedes  Emerging  Issues Task Force  ("EITF")  Issue
       No. 94-3,   "Liability   Recognition  for  Certain  Employee  Termination
       Benefits  and Other Costs to Exit an Activity  (including  Certain  Costs
       Incurred  in  a  Restructuring)."  SFAS  No. 146  requires  companies  to
       recognize costs associated with exit or disposal activities when they are
       incurred  rather than at the date of a commitment  to an exit or disposal
       plan.  In  addition,  SFAS  No. 146  establishes  that fair  value is the
       objective  for initial  measurement  of the  liability.  SFAS  No. 146 is
       effective for exit or disposal activities

<PAGE>


<PAGE>

       initiated  after December 31, 2002, but early adoption is permitted.  The
       implementation  of SFAS No. 146 did not have any impact on the  Company's
       results of operations or financial position.







                                      F-12

<PAGE>
<PAGE>

                         SHADOWS BEND DEVELOPMENT, INC.
                    (A CORPORATION IN THE DEVELOPMENT STAGE)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   __________


1.     Organization and Summary of Significant Accounting Policies, continued

       Recently Issued Accounting Pronouncements, continued

       In December  2002,  the FASB issued SFAS No. 148,  "Accounting  for Stock
       Based  Compensation",  which  amends SFAS No. 123 to provide  alternative
       methods of transaction for an entity that voluntarily changes to the fair
       value method of accounting for stock based employee compensation. It also
       amends the  disclosure  provisions  of SFAS No. 123 to require  prominent
       disclosure  about the  effects  on  reported  net  income of an  entity's
       accounting   policy  decisions  with  respect  to  stock  based  employee
       compensation.  Finally,  SFAS No. 148 amends APB Opinion No. 28, "Interim
       Financial  Reporting",  to require disclosure of those effects in interim
       consolidated  financial statements.  SFAS No. 148 is effective for fiscal
       years ended after December 15, 2002, but early adoption is permitted. The
       Company will  continue to follow the  provisions of APB Opinion No. 25 in
       recognizing employee stock-based compensation; however, the Company began
       following  the  disclosure  requirements  of SFAS No.  148  beginning  in
       January 2003.

       In November 2002, the FASB issued  Interpretation  No. 45 ("FIN No. 45"),
       "Guarantor's  Accounting  and  Disclosure  Requirements  for  Guarantees,
       Including  Indirect  Guarantees  of  Indebtedness  of Others." FIN No. 45
       expands on the  accounting  guidance of Statements No. 5, 57, and 107 and
       incorporates without change the provisions of FASB Interpretation No. 34,
       which is being  superseded.  FIN No. 45 will affect leasing  transactions
       involving residual guarantees,  vendor and manufacturer  guarantees,  and
       tax and  environmental  indemnities.  All such guarantees will need to be
       disclosed  in the notes to the  financial  statements  starting  with the
       period  ending  after  December  15, 2002.  For  guarantees  issued after
       December 31, 2002, the fair value of the  obligation  must be reported on
       the balance sheet.  Existing  guarantees will be grand-fathered  and will
       not be recognized on the balance sheet. The  implementation of FIN No. 45
       did not have any impact on the Company's results of operations
       or financial position.

       In January 2003,  the FASB issued  Interpretation  No. 46 ("FIN No. 46"),
       "Consolidation  of Variable  Interest  Entities." FIN No. 46 expands upon
       and  strengthens  existing  accounting  guidance  that  addresses  when a
       company   should   include  in  its  financial   statements  the  assets,
       liabilities and activities of another entity. A variable  interest entity
       is a corporation,  partnership,  trust, or any other legal structure used
       for business purposes that either (a) does not have equity investors with
       voting rights or (b) has equity investors that do not provide  sufficient
       financial resources for the entity to support its activities.  FIN No. 46
       requires a variable  interest  entity to be  consolidated by a company if
       that  company  is  subject  to a  majority  of the risk of loss  from the
       variable  interest  entity's  activities  or is  entitled  to  receive  a
       majority of the  entity's  residual  returns or both.  The  consolidation
       requirements  of FIN  No.  46  apply  immediately  to  variable  interest
       entities created after January 31, 2003. The  consolidation  requirements
       apply to older  entities  in the  first  fiscal  year or  interim  period
       beginning  after  June 15,  2003.  Disclosure  requirements  apply to any

<PAGE>

       financial statements issued after January 31, 2003. The implementation of
       FIN No. 46 did not have any impact on the Company's results of
       operations or financial position.







                                      F-13

<PAGE>
<PAGE>


                         SHADOWS BEND DEVELOPMENT, INC.
                    (A CORPORATION IN THE DEVELOPMENT STAGE)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   __________



2.     Going Concern Consideration

       Since its inception,  the Company has not generated  significant  revenue
       and has  been  dependent  on  debt  and  equity  raised  from  individual
       investors to sustain its operations.  During the years ended December 31,
       2002 and 2001,  the  Company  incurred  net  losses of  $(7,512,345)  and
       $(456,318),  respectively. At December 31, 2002, the Company had negative
       working capital of $(173,864) and a stockholders'  deficit of $(173,864).
       These factors  raise  substantial  doubt about the  Company's  ability to
       continue as a going concern.

       The Company has  considered  a public  sale or private  placement  of its
       common stock,  but no active trading market for its existing  outstanding
       shares  has been  established.  The  Company  has  abandoned  its plan to
       develop  Alzheimer's  care facilities  because the performance of the two
       facilities  acquired  on June 1, 2002 (See Note 3) was not  satisfactory,
       resulting in delinquencies on exiting debt and prompting the Company,  on
       December 31, 2002,  to return the two companies  acquired  during 2002 to
       the former owners,  thereby  eliminating the cash demands on the Company.
       This action returned the Company to the status on a non-operating  public
       shell  that  can be used to  re-capitalize  a  possibly  more  attractive
       operating Company.  The Company's  long-term viability as a going concern
       is dependent on certain key factors as follows:

       * The  ability of the  Company to obtain  adequate  sources of funding to
         continue current operations.


       * The  ability of the Company to find  suitable  operating  company  with
         which to merge.


3.     Discontinued Operations

       Following is an analysis of the Company's discontinued operations for the
       years ended December 31, 2002 and 2001:
<TABLE>
            <S>                                                                     <C>                 <C>

       Revenue                                                                  $   675,203      $      -

       Operating expenses:
         Residence operating expenses                                               700,332             -
         General and administrative expenses                                        510,964           97,454
         Consulting expenses                                                      5,060,157          318,514
         Depreciation expense                                                        69,882             -

           Total operating expenses                                               6,341,335          415,968

       Operating loss                                                            (5,666,132)        (415,968)

       Other expenses:
         Loss from repossession of property                                      (1,011,260)            -
         Interest expense                                                          (195,958)          40,350
         Impairment loss                                                           (638,995)            -

           Total other expense                                                   (1,846,213)          40,350

       Net loss                                                                 $(7,512,345)     $  (456,318)
</TABLE>

       Following is an analysis of the assets and liabilities  surrendered  upon
       returning Three Oaks Corporation and Holly Hills Corporate Services, Inc.
       to the related  party  predecessor  owners from whom the  companies  were
       acquired on June 1, 2002. (See Note 4)








                                      F-14
<PAGE>

<PAGE>


                         SHADOWS BEND DEVELOPMENT, INC.
                    (A CORPORATION IN THE DEVELOPMENT STAGE)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   __________


3.     Discontinued Operations, continued

 <TABLE>
        <S>                                                                                         <C>
     Assets:
         Prepaid expenses and other assets                                                       $    4,035
         Deposits                                                                                       685
         Property, net                                                                            1,387,696

             Total assets                                                                         1,392,416

       Liabilities:
         Notes payable                                                                            2,108,591
         Accounts payable                                                                           486,746
         Accounts payable to related parties                                                         13,850
         Accrued liabilities                                                                        381,992

           Total liabilities                                                                      2,991,179

       Net liabilities upon surrender of Three Oaks and Holly Hills                              $1,598,763
</TABLE>

       The net  liabilities  upon  surrender  of Three Oaks and Holly  Hills was
       treated as a capital contribution because a 50% stockholder in both Three
       Oaks and Holly  Hills is also an  officer  and major  stockholder  of the
       Company.


4.     Acquisitions

       On June 1, 2002, the Company  purchased  Three Oaks  Corporation  ("Three
       Oaks") for a total  purchase price of $1,824,942.  This  acquisition  was
       achieved  through the  issuance of 150,000  shares of the Company  common
       stock valued at $67,500,  the  issuance of a  promissory  note payable in
       common stock of the Company of $518,564 and the assumption of liabilities
       totaling $1,306,378.

       Under the terms of the  promissory  note  issued in  connection  with the
       purchase of Three Oaks,  the note shall be repaid through the issuance of
       common stock of the Company,  using its $0.45 market price on the date of
       the  agreement.  The value of 1,002,364  shares of common stock  issuable
       under the promissory  notes is presented as unissued  common stock in the
       accompanying statement of stockholders' equity.

       On June 1,  2002,  the  Company  also  purchased  Holly  Hills  Corporate
       Services,  Inc.  ("Holly  Hills") for a total purchase price of $878,304.
       This  acquisition  was  structured in a manner  similar to the Three Oaks
       purchase and included  the  issuance of 100,000  shares of the  Company's
       common stock valued at $45,000, the issuance of a promissory note payable
       in  common  stock  of the  Company  of  $200,609  and the  assumption  of
       liabilities totaling $677,695.

       Following  is an  analysis  of the  acquisitions  of Three Oaks and Holly
       Hills:

<TABLE>
        <S>                                                     <C>                <C>                 <C>
                                                             Three Oaks         Holly Hills          Total

       Tangible assets acquired                              $1,824,942         $  878,304         $2,703,246


       Liabilities assumed                                   $1,306,378         $  677,695         $1,984,073

       Common stock issued or issuable under
         terms of promissory notes                              518,564            200,609            719,173


<PAGE>


<PAGE>

                                                             $1,824,942         $  878,304         $2,703,246
</TABLE>

       The  acquisition  of Three  Oaks and  Holly  Hills  was a  related  party
       transaction  because a 50% stockholder in both Three Oaks and Holly Hills
       is also the chief executive officer/major stockholder of the Company.


                                      F-15

<PAGE>
<PAGE>


                         SHADOWS BEND DEVELOPMENT, INC.
                    (A CORPORATION IN THE DEVELOPMENT STAGE)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   __________

5.       Property and Equipment

       During 2000 the Company acquired 100% of Diamond Holding LLC ("Diamond"),
       a company that owned a six-acre tract of land in Baton Rouge,  Louisiana.
       The tract of land, which  represented  substantially all of the assets of
       Diamond,  was  originally  part of a plan by the Company to  construct an
       Alzheimer's  disease  treatment and home health center in Baton Rouge. In
       connection  with the  acquisition of Diamond,  the six-acre tract of land
       was  independently  appraised and recorded at $1,110,000,  based upon the
       appraisal.  The  acquisition  of Diamond was a related party  transaction
       because  Diamond was primarily  owned and controlled by a 35% stockholder
       in the  Company.  At the date of  acquisition  of  Diamond,  there  was a
       mortgage  on the  six-acre  tract of land;  however,  a  cancellation  of
       mortgage  was filed with the Clerk of Court and  Recorder in Baton Rouge,
       Louisiana on November 10, 2000.

       Effective June 1, 2002, a stockholder,  holding a note  collateralized by
       the land in Baton Rouge,  demanded  payment of the note.  The Company was
       unable  to repay  the note and the  land was  taken in  foreclosure.  The
       Company recognized a loss of $1,011,260 upon surrender of the land.

       Also effective  June 1, 2002,  the Company  acquired Three Oaks and Holly
       Hills (See Note 3). The primary asset of Three Oaks is an assisted living
       facility in Pensacola,  Florida and the primary asset of Holly Hills is a
       multi-unit  housing  project  that the  Company  planned to convert to an
       assisted  living  center.  The property  and  equipment of Three Oaks and
       Holly Hills was valued at $2,703,246 and, prior to December 31, 2002, was
       being  depreciated  over  estimated  useful  lives as detailed in Note 1.
       Subsequent to the acquisitions, it became apparent to management that the
       acquisitions  were  not  providing  the  type of  returns  that  had been
       anticipated and that substantial  additional  capital investment would be
       needed  to make the  properties  economically  viable.  Accordingly,  the
       Company returned the acquired companies to their previous owners.


6.     Income Taxes

       The  composition  of  deferred  tax assets and the related tax effects at
       December 31, 2002 were as follows:

<TABLE>
                <S>                                                                                 <C>

         Benefit from carryforward of net operating loss                                         $ 78,200

         Less valuation allowance                                                                 (78,200)

           Net deferred tax asset                                                                $   -
</TABLE>


       The  difference  between  the  income  tax  benefit  in the  accompanying
       statement  of  operations  and the amount  that would  result if the U.S.
       Federal statutory rate of 34% were applied to pre-tax loss is as follows:





















                                      F-16

<PAGE>
<PAGE>



                         SHADOWS BEND DEVELOPMENT, INC.
                    (A CORPORATION IN THE DEVELOPMENT STAGE)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   __________


6.     Income Taxes, continued

<TABLE>
                <S>                                <C>    <C>    <C>                <C>       <C>    <C>

                                                           2002                             2001
                                                                 Percentage                        Percentage
                                                                 of Pre-Tax                        of Pre-Tax
                                                   Amount           Loss            Amount            Loss

         Benefit for income tax at
           federal statutory rate                $2,554,197           34%           $  155,148          34%
         Non-deductible stock-based
           compensation                          (2,538,437)         (34)
         Increase in valuation                                                         (92,978)        (20)
           Allowance                                (15,760)         ( -)              (62,440)        (14)

           Total                                 $     -               -%           $     -               -%
</TABLE>

       At December 31, 2002, for federal income tax and alternative  minimum tax
       reporting purposes,  the Company has approximately $230,000 of unused net
       operating  losses available for carryforward to future years. The benefit
       from  carryforward  of net operating  losses will expire in various years
       between 2018 and 2022. The benefit from utilization of net operating loss
       could be subject to further  limitations if significant  future ownership
       changes occur in the Company.


7.     Stockholders' Equity

       Effective  February 5, 2002,  the Company  declared a 3 for 1 stock split
       for stockholders of record as of January 29, 2002. Effective November 11,
       2002,  the  Company   declared  a  1  for  10  reverse  stock  split  for
       stockholders  of record as of October 9, 2002.  These  stock  splits have
       been  reflected  in  the  accompanying   financial   statements  and  all
       references  to common  stock  outstanding,  additional  paid-in  capital,
       weighted  average shares  outstanding  and per share amounts prior to the
       record date of the splits have been  restated to reflect the stock splits
       on a retroactive basis.

       During the quarter  ended March 31, 2002,  the Company  issued  2,500,000
       stock options to  consultants  for human  resources and general  business
       activities  for the period from January 1, 2002 to December 31, 2002. The
       stock options have an exercise price of 50% of the quoted market price at
       the date of issue and resulted in compensation  expense to consultants of
       $1,175,000  for the quarter ended March 31, 2002.  Under the terms of the
       consulting  agreements,  the Company  was  scheduled  to issue  1,000,000
       additional  options under similar terms in the second and third  quarters
       of 2002;  however the Company and the  consultant had a dispute about the
       services  provided and the agreement was terminated  without  issuance of
       additional options.

       During the quarter ended September 30, 2002, the Company issued 2,150,000
       shares  of  common  stock  for   consulting   services   and   recognized
       compensation expense related to the issuance of $2,345,000.

       Effective February 6, 2002, the Company adopted the 2002 Stock Option and
       Grant Plan (the "Plan") under which the Company may, at the discretion of
       the  Company's  board  of  directors,   issue  incentive  stock  options,
       non-qualified stock options,  restricted stock awards and common stock of
       the Company to compensate employees and consultants. The Company reserved
       5,000,000  shares of  common  stock  for  issuance  under the plan and no
       awards may be made after  January 12,  2012.  At December  31,  2002,  no
       grants have been made under the Plan.










                                      F-17

<PAGE>


                         SHADOWS BEND DEVELOPMENT, INC.
                    (A CORPORATION IN THE DEVELOPMENT STAGE)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   __________



8.     Related Party Transactions

       During the years ended  December  31,  2002 and 2001 The Company  entered
       into various transactions with related parties, as follows:

       On May 31, 2002,  the Company  entered into an agreement to issue 791,339
       shares to Trace  Resources,  LLC, a Company  controlled  by the Company's
       chief  executive  officer.  The  agreement  was entered  into in order to
       compensate the Company's officers for past services and expenses incurred
       on behalf of the Company. As a result of poor performance by the Company,
       the shares called for in the agreement  were never issued;  however,  the
       value  assigned  to the shares of  $356,251,  based on the quoted  market
       price of the  Company's  common  stock on the date of the  agreement  was
       recognized as a capital  contribution at December 31, 2002, the date that
       the acquired companies were returned to their previous owners.

       On June 1, 2002,  the Company  entered into  agreements  to acquire Three
       Oaks  Corporation and Holly Hills Corporate  Services,  Inc (See Note 3).
       Each of these corporations  were, at the time of the acquisitions,  fifty
       percent owned by the Company's chief executive officer.

       At December 31, 2002,  accounts  payable to related  parties  includes an
       amount due to the Company's chief executive officer/major  stockholder of
       $70,000 and an amount due to Trace Resources,  LLC, a Company  controlled
       by the Company's chief executive officer/major stockholder of $72,686



























                                      F-18

<PAGE>

<PAGE>

                                                                    Exhibit 31.1

                    Certification of Chief Executive Officer
                        Pursuant to Rule 13a-14(a) under
                       The Securities Exchange Act of 1934


I, Michael Sciacchetano, certify that:


       1.I have  reviewed  this  annual  report on Form  10-QSB of Shadows  Bend
         Development, Inc.;

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

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

       4.The  issuer's  other  certifying  officers  and I are  responsible  for
         establishing  and  maintaining  disclosure  controls and procedures (as
         defined in Exchange Act Rules  13a-15(e)  and  15d-15(e))  and internal
         control  over  financial  reporting  (as defined in Exchange  Act Rules
         13a-15(e) and 15d-15(e)) for the issuer and have:

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

         b.Designed such internal  control over financial  reporting,  or caused
           such internal  control over financial  reporting to be designed under
           our  supervision,  to  provide  reasonable  assurance  regarding  the
           reliability of financial  reporting and the  preparation of financial
           statements  for  external   purposes  in  accordance  with  generally
           accepted accounting principles;

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

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

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

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


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

Date:                      ,  2004


/s/  Michael  Sciacchetano
--------------------------
Michael  Sciacchetano
President



<PAGE>

<PAGE>
                                                                    Exhibit 31.2

                    Certification of Chief Executive Officer
                        Pursuant to Rule 13a-14(a) under
                       The Securities Exchange Act of 1934


I, Michael Sciacchetano, certify that:


       1.I have  reviewed  this  annual  report on Form  10-QSB of Shadows  Bend
         Development, Inc.;

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

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

       4.The  issuer's  other  certifying  officers  and I are  responsible  for
         establishing  and  maintaining  disclosure  controls and procedures (as
         defined in Exchange Act Rules  13a-15(e)  and  15d-15(e))  and internal
         control  over  financial  reporting  (as defined in Exchange  Act Rules
         13a-15(e) and 15d-15(e)) for the issuer and have:

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

         b.Designed such internal  control over financial  reporting,  or caused
           such internal  control over financial  reporting to be designed under
           our  supervision,  to  provide  reasonable  assurance  regarding  the
           reliability of financial  reporting and the  preparation of financial
           statements  for  external   purposes  in  accordance  with  generally
           accepted accounting principles;

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

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

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

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

         b.Any fraud,  whether or not  material,  that  involves  management  or
           other employees who have a significant role in the issuer's  internal
           controls.


Date:                      ,  2004


/s/ Michael Sciacchetano
--------------------------
Michael Sciacchetano
Principal Financial Accounting Officer




<PAGE>

<PAGE>
                                                                      Exhibit 32

               Certification Pursuant to Rule 13a-14(b) under the
               Securities Exchange Act of 1934 and Section 1350 if
                  Chapter 63 of Title 18 of United States Code


I, Michael Sciacchetano, do hereby certify that:


       1.This annual report of Shadows Bend  Development,  Inc.  containing  the
         financial  statements  for the years ended  December  31, 2002 and 2001
         fully complies with the requirements of Section 13(a) of the Securities
         Exchange Act of 1934 (15 U.S.C. 78m); and

       2.The  information  contained in this annual report fairly  presents,  in
         all material respects, the financial condition and
         results of operations of Shadows Bend Development, Inc.


Date:                      , 2004


/s/ Michael Sciacchetano
---------------------
Michael Sciacchetano
President


/s/ Michael Sciacchetano
---------------------
Michael Sciacchetano,
Principal Financial Accounting Officer




















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