U.S. 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 [FEE REQUIRED]

       For  the fiscal year ended December 31, 2001

[    ] TRANSITION  REPORT  PURSUANT  TO SECTION  13 OR 15(d) OF THE  SECURITIES
       EXCHANGE ACT OF 1934 [NO FEE REQUIRED]

                         Commission file number: 0032939


                              Viper Networks, Inc.
                 (Name of Small Business Issuer in Its Charter)


              Utah                                       87-0410279
 (State or Other Jurisdiction of           (I.R.S. Employer Identification No.)
  Incorporation or Organization)

          10373 Roselle Street, Suite 170, San Diego, California 92121
                     (Address of principal executive office)

                                 (858) 452-8737
                (Issuer's Telephone Number, Including Area Code)


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

       Title of Each Class:                              Name of Exchange
  Common Stock (par value $0.001)                      On Which Registered:

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

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

     State issuer's revenues for its most recent fiscal year: $0

The aggregate  market value of the voting stock held by  non-affiliates ( shares
of Common Stock) was $0 as of December 31, 2001. The stock price for computation
purposes was $0, since the  Company's  common stock was not traded in any public
market  during  the  2001  fiscal  year.  This  value  is not  intended  to be a
representation  as to the  value or worth of the  Registrant's  shares of Common
Stock.  The  number of  shares  of  non-affiliates  of the  Registrant  has been
calculated by subtracting  shares held by persons affiliated with the Registrant
from outstanding  shares.  The number of shares  outstanding of the Registrant's
Common Stock as of December 31, 2001 was 6,214,180.


                      APPLICABLE ONLY TO CORPORATE ISSUERS

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest  practicable date. Number of Common Shares  outstanding
as of December 31, 2001 were 6,214,180.


                       DOCUMENTS INCORPORATED BY REFERENCE

     If the following documents are incorporated by reference,  briefly describe
them and identify the part of the Form 10-KSB (e.g., Part I, Part II, etc.) into
which the document is incorporated:  (1) any annual report to security  holders;
(2) any proxy or information statement; and (3) any prospectus filed pursuant to
Rule 424(b) or (c) of the Securities Act of 1933 ("Securities  Act"). The listed
documents should be clearly described for identification  purposes (e.g., annual
report to security holders for fiscal year ended December 31, 2001).

           Transitional Small Business Disclosure Format (check one):

           Yes___ No X


<PAGE>
                              VIPER NETWORKS, INC.

                             INDEX TO ANNUAL REPORT
                                 ON FORM 10-KSB

                                                                           Page
PART I

         Item 1.        DESCRIPTION OF BUSINESS........................       1

         Item 2.        DESCRIPTION OF PROPERTY........................      23

         Item 3.        LEGAL PROCEEDINGS..............................      23

         Item 4.        SUBMISSION OF MATTERS TO A VOTE OF SECURITY
                        HOLDERS........................................      23

PART II

         Item 5.        MARKET FOR COMMON EQUITY AND RELATED
                        STOCKHOLDER MATTERS............................      24

         Item 6.        MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                        FINANCIAL CONDITION AND RESULTS OF OPERATIONS..      25

         Item 7.        FINANCIAL STATEMENTS...........................     F-1

         Item 8.        CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
                        ON ACCOUNTING AND FINANCIAL DISCLOSURE.........      27

         Item 8         CONTROLS AND PROCEDURES..............................28

PART III

         Item 9.        DIRECTORS, EXECUTIVE OFFICERS AND CONTROL
                        PERSON; COMPLIANCE WITH SECTION 16(a) OF THE
                        EXCHANGE ACT...................................      29

         Item 10.       EXECUTIVE COMPENSATION.........................      30

         Item 11.       SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
                        AND MANAGEMENT.................................      33

         Item 12.       CERTAIN RELATIONSHIPS AND
                        RELATED TRANSACTIONS...........................      34

         Item 13.       EXHIBITS AND REPORTS ON FORM 8-K...............      35

         Item 14        PRINCIPAL ACCOUNTANT FEES AND SERVICES...............35


INDEX TO CONSOLIDATED FINANCIAL STATEMENTS.............................     F-1

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS.....................     F-2





<PAGE>
                                     PART I



THIS FORM 10-KSB CONTAINS "FORWARD-LOOKING STATEMENTS" THAT CAN BE IDENTIFIED BY
THE USE OF FORWARD-LOOKING  WORDS SUCH AS "BELIEVES,"  "EXPECTS," "MAY," "WILL,"
"SHOULD," OR  "ANTICIPATES,"  OR THE NEGATIVE OF THESE WORDS OR OTHER VARIATIONS
OF THESE WORDS OR COMPARABLE  WORDS, OR BY DISCUSSIONS OF PLANS OR STRATEGY THAT
INVOLVE RISKS AND  UNCERTAINTIES.  MANAGEMENT  WISHES TO CAUTION THE READER THAT
THESE  FORWARD-LOOKING  STATEMENTS,  INCLUDING,  BUT NOT LIMITED TO,  STATEMENTS
REGARDING THE COMPANY'S  MARKETING  PLANS,  GOALS,  COMPETITIVE  AND  TECHNOLOGY
TRENDS AND OTHER MATTERS THAT ARE NOT HISTORICAL FACTS ARE ONLY PREDICTIONS.  NO
ASSURANCES  CAN BE GIVEN THAT SUCH  PREDICTIONS  WILL PROVE  CORRECT OR THAT THE
ANTICIPATED FUTURE RESULTS WILL BE ACHIEVED. ACTUAL EVENTS OR RESULTS MAY DIFFER
MATERIALLY  EITHER BECAUSE ONE OR MORE PREDICTIONS PROVE TO BE ERRONEOUS OR AS A
RESULT OF OTHER RISKS FACING THE COMPANY.  FORWARD-LOOKING  STATEMENTS SHOULD BE
READ IN LIGHT OF THE CAUTIONARY  STATEMENTS AND IMPORTANT  FACTORS  DESCRIBED IN
THIS FORM  10-KSB,  INCLUDING,  BUT NOT LIMITED TO "THE  FACTORS THAT MAY AFFECT
FUTURE RESULTS" SHOWN AS ITEM 1A AND IN MANAGEMENT'S  DISCUSSION AND ANALYSIS OF
FINANCIAL  CONDITION AND RESULTS OF OPERATIONS.  THE RISKS INCLUDE,  BUT ARE NOT
LIMITED TO, THE RISKS  ASSOCIATED  WITH AN  EARLY-STAGE  COMPANY THAT HAS ONLY A
LIMITED HISTORY OF OPERATIONS,  THE COMPARATIVELY LIMITED FINANCIAL RESOURCES OF
THE COMPANY,  THE INTENSE  COMPETITION THE COMPANY FACES FROM OTHER  ESTABLISHED
COMPETITORS,  TECHNOLOGICAL CHANGES THAT MAY LIMIT THE ABILITY OF THE COMPANY TO
MARKET AND SELL ITS PRODUCTS  AND  SERVICES OR  ADVERSELY  IMPACT THE PRICING OF
THESE PRODUCTS AND SERVICES,  AND MANAGEMENT THAT HAS ONLY LIMITED EXPERIENCE IN
DEVELOPING SYSTEMS AND MANAGEMENT  PRACTICES.  ANY ONE OR MORE OF THESE OR OTHER
RISKS COULD CAUSE ACTUAL  RESULTS TO DIFFER  MATERIALLY  FROM THE FUTURE RESULTS
INDICATED,   EXPRESSED,  OR  IMPLIED  IN  SUCH  FORWARD-LOOKING  STATEMENTS.  WE
UNDERTAKE NO  OBLIGATION  TO UPDATE OR REVISE ANY  FORWARD-LOOKING  STATEMENT TO
REFLECT EVENTS,  CIRCUMSTANCES,  OR NEW INFORMATION  AFTER THE DATE OF THIS FORM
10-KSB OR TO REFLECT THE OCCURRENCE OF UNANTICIPATED OR OTHER SUBSEQUENT EVENTS.









Item 1. Description of Business.


     Background

     The Company was  incorporated  under the laws of Utah on February  28, 1983
under the name  Tinglefoot  Mining,  Inc. for the purpose of developing  certain
mining  operations.  The Company was unsuccessful in its attempts to acquire the
Tinglefoot Mine, was unable to establish an alternative  business  operation and
remained  dormant until 1994, when a new management team took office and changed
the purpose of the  Company's  business to pursue  investment  opportunities  in
Mexico in 1995.






                                       1
<PAGE>



     On December 20,  1995,  the Company  changed its name to Mexico  Investment
Corporation  and  effected  a reverse  split of its  common  stock on a 1 for 40
basis.  On  February  26,  1996,  the Company  changed its name to Baja  Pacific
International, Inc.

     On April 30, 1998, the Company's  shareholders approved the following:  (1)
the execution of an exclusive  agreement with Tri-National  Development Corp., a
Wyoming corporation  headquartered in San Diego, California  ("Tri-National") to
service all of their  telecommunication needs at Tri-National's Hills of Bajamar
resort;  (2) the  acquisition  of a 5% stake in  Future  Tel  Communications,  a
Vancouver,  British Columbia  telecommunications company in exchange for 200,000
common shares; and (3) a change in the Company's name to Taig Ventures, Inc. and
the Company's  Articles of Incorporation  were amended on October 7, 1998. These
actions  were taken in  furtherance  of the  Company's  intentions  to work with
Tri-National  to  provide a massive  upgrade of its  existing  telecommunication
facilities and the Company  believed that a new management  team would be better
suited  to  execute   this  new   business   model  as  well  as  pursue   other
telecommunications projects.

     In November 2000, the Company entered into a Securities  Purchase Agreement
and  Plan  of  Reorganization  (the  "California   Reorganization")  with  Viper
Networks,  Inc., a California corporation  ("Viper-CA").  Viper-CA was formed on
September  14,  2000.  Under the  terms of the  California  Reorganization,  the
Company  exchanged  36,000,000  shares  of  its  Common  Stock  for  all  of the
then-outstanding  common shares of Viper-CA and Viper-CA  became a  wholly-owned
subsidiary  of the  Company.  Viper-CA's  business  was  that of an  application
service provider. The Company then changed its name to Viper Networks,  Inc. and
the Company effected a complete change of the Company and its Board of Directors
and  officers to  position  the  Company to execute a new  business  strategy as
described below.  (As used herein,  the term "Company," "we, "and "our, " refers
to both the Company and Viper-CA, the subsidiary corporation.)

     With these changes,  the Company  re-focused its attention on the provision
of  Internet  telephony  services,  the  development  of an  infrastructure  for
providing  services to its Web-based  customers  (the "Graphic User  Interface")
and,  eventually,  the  construction of  Voice-over-Internet  Protocol  ("VoIP")
networks for business,  institutions,  and Internet Service Providers  ("ISPs").
The Company's  management team and Board of Directors  determined that the goals
for use of the Mexico property  purchased from  Tri-National and construction of
telecommunications  facilities  to the  Hills  of  Bajamar  are not  within  the
Company's current capabilities.

Business of the Company

     The Company, together with its subsidiary, Viper-CA, is a development-stage
company and the  Company  did not record any  revenues  from  inception  through
December 31, 2001.  The Company seeks to become a full service  integration  and
application  services  provider  ("ASP") of worldwide  Internet  Protocol ("IP")
telephony  services  including  the  transmission  of voice and data traffic for
communications   carriers  and   provision  of  enhanced   Web-based  and  other
communications services to businesses,  institutions,  and ISPs. IP telephony is
the real time  transmission  of voice  communications  in the form of  digitized
"packets" of information over the Internet or a private network,  similar to the
way in which e-mail and other data is transmitted.




                                       2
<PAGE>



     The Company  believes  that if current  technology  trends  continue and if
favorable  conditions allow,  Video-over-IP may become available and the Company
may have an opportunity to offer that service and integrate it with the services
that the Company currently intends to offer. The ability of the Company to offer
any such  Video-over-IP  services will be dependent upon many  technological and
competitive variables over which the Company has little or no control.

     Internet Telephony Services

     VIPER CONNECT is an  integrated  telecommunications  product  incorporating
Internet  telephony as its primary feature.  A more detailed  description of the
product and the services it provides is included  under  "Products and Services"
below.

     VIPER CONNECT is designed to allow  businesses and customers to communicate
when they are most likely to buy (when a customer  is  actually  viewing the Web
Site).  The product  contains  features  which will allow online  businesses  to
voice-enable  their Web Sites,  banner ads, or e-mail  marketing  campaigns with
live human interaction. The service allows Internet customers, with the click of
a button,  to talk free to a live agent or customer  service  representative  on
their  regular  telephone  without  any special  equipment,  while they view our
customer's  Web Site.  The  telephone  call can be  forwarded  to any number our
customer chooses, including mobile and cellular telephones.

     We believe that if our customers can utilize real-time voice communications
with their customers,  our customers will have a competitive edge and be able to
meet the growing  expectations of consumers for high-quality,  point-of-purchase
services  and,  in turn,  bring  back the "In  Store"  experience  that has been
missing from the Web. We believe that human interaction with consumers generally
results in: (a) a higher "close ratio" (i.e., more successful selling); (b) more
up-market selling opportunities; and (c) higher customer satisfaction. The human
"touch" provided by VIPER CONNECT adds a key interactive element for Web-enabled
call centers, online businesses and direct marketing companies.

     VIPER CONNECT  incorporates the "push to talk" technology developed by ITXC
Corporation,  with whom we have executed a re-seller  agreement.  The Company is
working with ITXC to customize our Graphic User Interface  ("GUI") for the VIPER
CONNECT  product,  with ITXC  providing the network and support,  as well as the
billing,  for  the  product.   After  analyzing  the  costs  of  purchasing  the
software/hardware  solution  for  Internet  telephony  from  other  sources,  we
determined  that it would be more  cost-effective  and  easier  to  provide  our
services  to  customers  if we used the ITXC  solution.  ITXC will  provide  the
equipment and network on which the VIPER CONNECT  customized  GUI will run which
allows the Company to focus more on sales and  marketing  rather than  technical
aspects of  providing  the  service.  We believe  that it will be easier for the
customer to use and understand the basic  "Push-to-Talk"  application  that ITXC
has already developed.

     The "Push to Talk" name is associated with the patented technology of ITXC.
The  Company  currently  does not  intend to seek or apply for a patent  for the
VIPER  CONNECT  technology  into  which  the  "Push  to Talk"  service  has been
incorporated,  although  we do intend to obtain  trademarks  for the name "VIPER
CONNECT."  Currently,  the  Company  is one of the first to take  "Push to Talk"
technology to market as ITXC only  distributes  the  technology to companies for
resale.




                                       3
<PAGE>




     VIPER  CONNECT is a  flexible,  customizable  online  business  application
designed for companies of any size with any type of online presence. The Company
will,  upon  request,  customize  the product or, if the customer  chooses,  the
Company  can simply  provide  the "Push to Talk"  solution.  The  service can be
customized for Web Sites, banner ads, or e-mail marketing campaigns, including a
variety of options designed to suit the configuration or personal preferences of
each  customer's  end-users and to provide them with a variety of options suited
to the  customer's  particular  business.  VIPER CONNECT  buttons can be used to
improve customer loyalty and increase sales opportunities for businesses engaged
in online  commerce at a  relatively  low cost to the business and at no cost to
the customer.

     We market the VIPER CONNECT product and services both directly to corporate
customers and through other providers of e-commerce  services,  such as ISPs. We
believe  that this service may be  particularly  attractive  to the  hospitality
travel industry, the financial services industry, and others.

     Currently,  we continue to use ITXC's  network as the backbone of the VIPER
CONNECT product,  making our business substantially  dependent upon ITXC and the
success  of the  VIPER  CONNECT  product  and  services.  Our  current  lack  of
diversification is a significant risk to the full implementation of our business
plan. As a result,  we are in negotiations  with other companies to offer other,
enhanced  third  party  products  and  services  within the global  VoIP  arena.
However, there can be no assurance that we will successfully negotiate any third
agreements  with other  companies  that will allow us to offer other products or
services on a profitable basis.

     Application Service Provider ("ASP") Services

     While our  current  business  focus is on the sale and  marketing  of third
party  products,  as enhanced by our own products and  services  (including  the
customized GUI), it is our intention to expand the types of services we offer to
include the design and  development of VoIP network  solutions to our customers.
This  phase  of our  business  plan  will  be  implemented  once  we are  firmly
established  as a provider of enhanced  third party  products and  services.  If
voice and video-over IP becomes more fully accepted and commercially utilized in
the  marketplace,  we  anticipate  that  many  businesses  will  need to  deploy
telecommunications networks with these products and services. We anticipate that
if these marketplace trends  materialize,  training and testing services for the
voice  and  video-over  IP  equipment  and  software  will be  needed to allow a
customer to deploy them.

     As an ASP, we intend to  capitalize  on the  anticipated  rising demand for
outsourced  computer  applications  in the belief that our "turn-key"  solutions
will  offer  customers  an easy and  affordable  way to deploy IP  networks  and
services.

     In this event,  customers may be able to take advantage of all the benefits
and  cost-savings  that an IP-based network offers without having to train their
current staff or absorb all of the usual costs of building and maintaining their
own network solutions.  In offering VoIP or even  Video-over-IP,  network design
and  planning  services  to our  customers,  we will  be  acting  as a  "general
contractor" - bringing  together  various third party vendors to complete a VoIP
solution based on our customer's  specific  needs and  preferences.  By bringing
third party vendors  together in offering our services to our customers,  we may
not be able to control  the  products  and  services  that these  third  parties
provide;  this may create  problems  for us in  controlling  the  quality of our
products and services.




                                       4
<PAGE>




     We  believe  that  there is a high  level of  demand  for  voice  and video
conferencing  by  businesses  and even  individual  consumers.  The use of video
conferencing,  if  adopted  by  businesses  and  institutions,  will  provide an
especially  cost-effective  IP solution and provide users with an improved means
of bringing people together  without having to leave their home or office.  Here
again,  the role of the Company is similar to that of a "general  contractor" in
that,  if the  Company is  successful,  the  Company  will offer a credible  and
reliable solution to our customers.

     Overall,  the  Company  intends to  evaluate  and  implement  the latest IP
technology into our customers' network solutions. This is the "buy versus build"
solution,  which will allow our customers to focus on what they do best,  rather
than devoting time and resources to the  evaluation of new  technology  products
and the development of their own telecommunications network.

Products and Services

     VIPER CONNECT

     VIPER CONNECT allows  businesses and customers to communicate when they are
most likely to buy (when  customers  are  reviewing  the Web Site).  The Company
places the VIPER CONNECT  "button" (which says "Click here to speak with me now.
Its FREE.") on our  customer's  Web Site.  When the button is clicked,  a screen
pops up - giving the customer the option to speak through the computer  (through
VoIP  technology) or to enter their telephone number to allow the customer to be
contacted  by  telephone.  With the  business  (as the seller) and the  customer
connected by  telephone,  the seller and the customer  are  connected  with both
voice communication and visual communication that allows the seller to guide the
buyer through the seller's home page and show  different  products and services.
We believe that this will serve to bring the "In Store"  experience  to the Web.
Currently,  we sell the VIPER CONNECT  services for a monthly and per minute fee
to our customers.  It is free for their  end-users to access  (similar to an 800
number).

     This product  works by placing a "graphic"  button,  backed by a snippet of
HTML code,  on any online  communication,  including  Web Sites,  banner ads, or
e-mail.  With a single click of the button,  a consumer can launch an immediate,
FREE call, via personal computer or telephone, to the telephone number specified
in the  button's  code.  We  believe  that the VIPER  CONNECT  service  offers a
superior service for domestic and international consumers and contacts,  because
it enables them to reach our  customers  for free.  VIPER CONNECT is a flexible,
customizable  online business  application  designed for use by companies of any
size with any type of online presence.

     With the VIPER CONNECT product, we offer a market-ready solution,  designed
from the  perspective  of the Internet user and developed to allow the simplest,
most  cost-effective  integration  for the web site owner.  In most  cases,  the
button code can be provided to our customers within  forty-eight (48) hours, and
they can  simply  cut and paste it into their web site  source  code.  Customers
seeking  more  customization  of the product  can have the  company  install the
product at no additional  charge.  No  additional  equipment or  maintenance  is
required for the customer to run VIPER  CONNECT once it has been  installed.  It
does not require any software downloads, and can be run on any personal computer
running the Windows 95 or 98 operating system or a Mac OS 8 or greater. The only
requirement to activate VIPER CONNECT is that the customer have Internet  access
and a recent web browser.




                                       5
<PAGE>




     VIPER  CONNECT  offers a range of call  completion  options to suit the end
user's personal  computer  configuration  or personal  preference.  Once a VIPER
CONNECT button is "clicked," auto detection  technology enables VIPER CONNECT to
present a  customized  list of call  options  based on the  capabilities  of the
Internet  user's  computer system  configuration.  The real-time  communications
options  afforded  by VIPER  CONNECT  allow  the  end-user  to  select  the most
appropriate  option  based on his or her  comfort  level  and  ensures  that all
visitors have the ability to Internet  one-on-one with the customer's service or
support representative.

     End-users  can  choose  from a set of  calling  options,  depending  on the
configuration  of their  computer,  and the options  preferred by our customers.
These options include:

     -    Talk Through Your Phone. This option allows an Internet user to submit
          a phone  number for them to be reached at and  establish  an immediate
          call  with the call  center  agent.  The web user can speak to a sales
          person or call center agent on a traditional phone while continuing to
          browse the web.

     -    Talk Through Your Computer.  By selecting this option,  users with one
          phone  line  and  a  multimedia  PC  can  enjoy  the  convenience  and
          innovation  of VoIP  technology.  This  feature  allows  consumers  to
          continue  to  browse  a web  site  and  talk  to a  sales  or  service
          representative  without hanging up their Internet connection.  This is
          especially  great for  customers  using a single phone line with "dial
          up" Internet access.

     Internet  surfers do not need to download an  application  to utilize VIPER
CONNECT  technology.  Microsoft's  Net  Meeting  application,  which is  already
bundled on most  multimedia  PCs,  enables  Internet users with a microphone and
speakers,  or headset or  handset,  to place calls  through the  computer to the
merchant site.

     VIPER  CONNECT  buttons  can also be used to improve  customer  loyalty and
increase sales opportunities for businesses engage in online commerce,  offering
the opportunity to voice-enable a broad spectrum of online sales,  marketing and
advertising efforts, including:

     -    E-Mail  Marketing.   VIPER  CONNECT  functionality  can  be  added  to
          promotional  e-mail  messages to  personalize  a seemingly  impersonal
          marketing tool, build a stronger relationship with contacts,  and make
          sales easier to close.

     -    Banner Advertising.  Placing a VIPER CONNECT button within a banner ad
          gives consumers the option to connect directly with a customer service
          representative  or link to the company's  web site,  which can also be
          voice-enabled.

     -    Directory   Listings.   VIPER   CONNECT  has  portal  and   enterprise
          applications  that  enable  companies  to enhance  their use of online
          directories as advertising  and sales tools. A  voice-enabled  company
          listing on a portal, or a distributor listing on a company's web site,
          gives  consumers the chance to find a local  merchant and  communicate
          with a representative in real time, thereby increasing convenience for
          the customer  and helping to  accelerate  and  increase  sales for the
          retailer.

     -    Sales Lead Verification and Fulfillment. With VIPER CONNECT, companies
          can take  incoming  customer  requests and send the leads  directly to
          sales  representatives  via  e-mail  in the  form of a  VIPER  CONNECT
          button.  By  clicking  on the VIPER  CONNECT  button  embedded  in the
          message,  sales  representatives  can  place a call  and have a direct
          voice connection with consumers almost immediately.



                                       6
<PAGE>




     ASP Services and VoIP Network Design

     If we are successful in establishing the Company as a provider of enhanced,
third party Internet  telephony  products,  we plan to offer VoIP network design
and planning solutions.  In this respect, the Company would act something like a
general  contractor,  bringing  together various third party vendors to complete
the VoIP solution for our  customers.  For  instance,  if a customer of ours had
several  offices,  we could design a network to connect all of them  together in
such a way that they could  make  calls  between  their  offices  for free (even
internationally), resulting in a tremendous cost savings.

     In providing these services, we intend to implement the following strategy:

     1.   Once contacted by a potential customer,  we intend to conduct a "needs
          analysis." The most common "need" for the customer would likely be how
          to save money on domestic and international calling.

     2.   We intend to determine  what  existing  resources  the customer had in
          place (e.g., are the offices already  connected by a data network) and
          what needs to be added.

     3.   We  intend  to  outsource  to  third  party  vendors  for   equipment,
          technology   and   services.   For   instance,   Cisco   or  3com  for
          hardware/software at each location, Allegiance Telecom for network and
          data services, and technology companies like ITXC, which have VoIP and
          Video-Over-IP  technology for communications  technology.  The Company
          intends to provide  engineering and maintenance  support.

     4.   We intend to implement the solution and provide ongoing support.

     In addition to the design and  development  of new networks,  customers may
ask the Company to evaluate the  customer's  current IP network to determine how
it can be improved.  For instance,  if a customer had several offices exchanging
e-mail on a  private  network,  they may come to us to build a "Voice  VPN" (the
acronym "VPN" refers to "virtual private network") (simply running the telephone
traffic (VoIP) over the connection  that the e-mail is currently  running on and
they are already  paying for).  The Company  would follow the same  strategy for
enhancing existing networks as it does for designing and planning new ones.

     We  anticipate  that our  service  group  will offer an  in-depth  thorough
analysis of customer  networks,  and will provide a range of services  that will
help  customers  determine  if and how their  network is  succeeding  in meeting
business objectives. These services will likely include:

     o    Network  Assessment and Baseline,  which provide a view of the network
          through an audit process.  We intend to monitor the customer's network
          to  determine  traffic/protocol  distribution,   utilization,  network
          congestion, application usage and performance inefficiencies.

     o    Enterprise  Network  Architecture  and System  Design,  which provides
          design and redesign of enterprise networks that conform to current and
          future technology needs of the customer.  Connectivity options such as
          remote access,  dial-in,  Internet and wide-area  connectivity will be
          evaluated.  We will determine the customer's  requirements for e-mail,
          client  applications,  and then implement them, creating a more robust
          environment for sharing information across the enterprise.




                                       7
<PAGE>




     o    Network Security, which provides security assessment,  security policy
          and firewall  evaluation  for customers who need a more  demanding and
          comprehensive review of their security requirements.

     o    Technology  Assessment,  which  provides  solutions to help  customers
          differentiate  themselves and strengthen  their market position within
          their  given  Industry.  We will  take  into  account  the  customers'
          business  strategy and offer core competencies in technologies such as
          Internet  protocol  telephony,  voice  e-commerce  and  Internet  call
          waiting.

     The  Company  also  plans  to  provide   project   management  and  network
integration  services to  facilitate  the  implementation  of customer  networks
pursuant  to  design  specifications.   Our  project  management  services  will
encompass legacy  technologies and  state-of-the-art  technologies  enabling the
rollout of turnkey solutions  delivering fully operational  enterprise networks.
We will also program and furnish premise-based components of integrated networks
utilizing complex network technologies across multi-vendor environments.

Strategy

     During the fiscal year ending  December 31, 2001,  the Company  focused its
attention on the provision of Internet telephone services, the development of an
infrastructure for providing  services to its web-based  customers (the "Graphic
User  Interface")  and,  eventually,  the  construction  of  Voice-over-Internet
Protocol  ("VoIP")  networks for businesses,  institutions  and Internet Service
Providers  ("ISPs").  We  specialize  in the  provision  of  Internet  telephony
services  and  the  cost-effective  design,   implementation,   maintenance  and
management of our customer's network-based voice and data communications through
the VIPER CONNECT product.

     The Company  signed its first  contract for VIPER  CONNECT on September 19,
2001 and, if we are successful in implementing our strategy, our goal is to sell
additional VIPER CONNECT buttons.

     Because  our   business  is  currently   substantially   dependent  on  our
relationship  with ITXC,  it is our  intention  to expand our  business to offer
other enhanced, third party solutions as well. We have already begun discussions
with two other  companies,  Sky River  Communications  and  Net2Phone,  with the
intent of forming  relationships  similar  to that with ITXC,  where we can take
their  products to market in an  enhanced  format,  offering  our  products  and
services to consumers at the same time their end-product is sold.

     In order to market VIPER CONNECT, and other products,  we have entered into
discussions  with  several  individuals  who  will act as  salespersons  for the
products  on an  independent  contractor  basis,  and are also in  contact  with
several ISPs who could  distribute  VIPER CONNECT to the customers for whom they
are hosting  web sites.  While we believe  that the  planned use of  independent
contractors  and ISPs to distribute  the VIPER  CONNECT and other  products is a
prudent business  strategy,  we will not have only limited  marketing control of
these third parties and, as a result,  our  marketing  efforts may be limited by
any lack of  training  and  interest of these  third  parties  and the  relative
incentives  that these third  parties have in marketing our products in relation
to the incentives on similar products offered by others.




                                       8
<PAGE>




     If we are successful in establishing the Company as a provider of enhanced,
third party  Internet  telephony  products,  it is our  intention  to offer VoIP
network design and planning solutions.

     Our goal is to become  the  leading  provider  of  enhanced  Voice over the
Internet products.  In order to accomplish this, we have set forth the following
objectives:

     o    Capitalize  our early  entrant  status in offering  VoIP  products and
          services;

     o    Expand Viper by adding additional points of presence nationwide;

     o    Capitalize on the cost advantages of the Internet;

     o    Use VoIP to enhance Internet applications;

     o    Expand our role as an Application Service Provider;

     o    Establish Viper as a leader in quality;

     o    Provide our customers and affiliates with direct access to Viper; and

     o    Deliver additional cutting-edge VoIP products and services.

     Our  ability to achieve  any one or more of these  goals will be subject to
our ability to  implement  our plans and to attract and develop the interest and
commitment  of third  parties in light of the  ever-changing  technological  and
competitive  structure of the  industry.  These and other factors are beyond our
control and we may face  unforeseen  difficulties  in  attempting to reach these
goals. (See "Factors That May Affect Future Result.")

Sales and Marketing

     Viper's  sales  efforts  are  staffed  by 4  sales  personnel  with a heavy
emphasis on outside  referrals.  The Company's sales  representatives  initially
contact  potential  customers from  referrals  from other  customers or by local
market knowledge. Thereafter, the Company is engaged to evaluate and recommend a
network integration  solution and network services.  One of Viper's strengths is
the continuing customer relationships that provide both cross selling and repeat
business opportunities and a solid base for references.  Our marketing goals are
to:

     o    Expand the presence of VIPER CONNECT through direct sales efforts

     o    Offer other value added products and services to our existing customer
          base

     o    Work with out strategic  partners to co-brand and co-develop  products
          and services




                                       9
<PAGE>




     o    Increase efforts through "re-seller" channels to increase sales

     o    Establish  a  market  leadership  position  among  providers  of voice
          services over the Internet

     We intend to use the reputations and industry  relationships  cultivated by
our  senior  management  and our  status  as an early  entrant  in the  Internet
telephony  industry to attract  affiliates  to the Company.  We  typically  meet
potential  affiliates  at Internet and telephony  trade shows and seminars,  but
also target  strategic  affiliates in our industry.  As indicated  above, we are
also in discussions  with several  individuals who will act as salespersons  for
our products and are in contact  with  several ISPs who could  distribute  VIPER
CONNECT to the customers for whom they are hosting web sites.

Industry Overview

     Historically,  the  communications  services industry has transmitted voice
and data  over  separate  networks  using  different  technologies.  Traditional
carriers have typically  built  telephone  networks  based on circuit  switching
technology,  which establishes and maintains a dedicated path for each telephone
call until the call is terminated.  With a  circuit-switched  system a telephone
call is placed, a circuit is established,  and the circuit remains dedicated for
transmission  of the call and is  unavailable  to transmit any other call.  This
restricted use of transmission  capacity has become  inefficient in light of the
increased demand for voice services and the proliferation of data networks, with
their enhanced functionality and efficiency.

     Data  networks  have  typically  been  built  utilizing   packet  switching
technology,   such  as  IP,   which   divides   signal  into  packets  that  are
simultaneously  routed over different channels to a final destination where they
are  reassembled  in the original order in which they were  transmitted.  Packet
switching provides for more efficient use of the capacity in the network because
the network does not establish  dedicated  circuits and does not require a fixed
amount  of  bandwidth  to  be  reserved  for  each  transmission.  As a  result,
substantially greater traffic can be transmitted over a packet-switched network,
such as the Internet, than a circuit-switched network.

     Early   packet-switched   networks   suffered   from  poor  sound   quality
attributable to delays and lost packets.  However, recent improvements in packet
switching,  compression  broadband access technologies,  hardware and the use of
privately-managed networks have allowed for quality, real-time transmission.  As
a result,  packet switching  technology now allows service providers to converge
their  traditional  voice and data  networks  and to carry  voice,  fax and data
traffic over the same network.  These improved  efficiencies of packet-switching
technology  create network cost savings that can be passed on to the consumer in
the form of lower long  distance  rates.  In addition,  international  telephone
calls carried over the Internet or private IP networks are less  expensive  than
similar  calls carried over  circuit-switched  networks  primarily  because they
bypass the  international  settlement  process,  which  represents a significant
portion of international long distance tariffs.




                                       10
<PAGE>




     Over the last decade, the volume of traffic on data networks has grown at a
faster rate than traditional telephone networks.  This growth has been driven by
several  factors,  including  technological  innovation,   high  penetration  of
personal computers and, in particular, by the rapid expansion of the Internet as
a global medium for communications, information and commerce. International Data
Corporation, a market research firm, estimates that the number of Internet users
worldwide will grow from  approximately 142 million in 1998 to approximately 399
million in 2002. This increase in data traffic has necessitated  additional data
network capacity and quality. As a result,  businesses have invested billions of
dollars in order to meet this need.

     We believe that the combination of increasing demand for voice services and
the  proliferation  of data  networks,  with their  enhanced  functionality  and
efficiency,  is driving the  convergence  of voice  traffic  and data  networks,
including  the  Internet.  We expect this  transfer of traffic to  accelerate as
corporation and network infrastructure providers attach increasing value to data
networks and as the  functionality of computers and computing  devices,  such as
personal digital assistants, is enhanced by voice capability.

     The Emergence of Voice on Data Networks

     Voice on the Internet or voice-over-Internet  Protocol ("VoIP') consists of
both traditional and enhanced voice and fax services between ordinary phones and
the addition of interactive voice capability to computers, web sites and e-mail.
Voice on the Internet  serves both the extensive  market of existing phone users
and the expanding  market of computer  users.  We believe data networks  provide
lower cost than the  traditional  telephone  network  and are  better  suited to
deliver  future  enhanced  services  to both  phone  users and  computer  users.
Moreover,  the Internet is the most cost-effective data network for transmitting
any type of data worldwide, including voice.

     Telephony based on Internet  protocols  emerged in 1995, with the invention
of  a  personal   computer   program  that   allowed  the   transport  of  voice
communications  over the  Internet  via a  microphone  connected  to a  personal
computer.  Initial  sound  quality was poor and the service  required  that both
parties to the  conversation  use personal  computers  instead of telephone.  In
1996, the advent of the gateway for the first time offered anyone with access to
a telephone the ability to complete calls on the Internet. A gateway is a device
that transfers calls from the traditional telephone network to a network such as
the Internet, and vice versa.

     Despite  advances  in VoIP  technology,  Voice over the  Internet  has only
recently   improved  to  the  point  of  allowing   quality,   real-time   voice
communications.  We believe that, overall,  the VoIP marketplace is still in its
infancy.  Most  enterprise  customers and consumers  still rely on  traditional,
circuit-switched telephone services. In our opinion, the full advantages of VoIP
will not be realized for another two to five years,  giving companies like Viper
Networks an opportunity to make an early entrance into the market.

     The Economics of Internet Telephony

     Long  distance  telephone  calls  transported  over the  Internet  are less
expensive  than similar calls  carried over the  traditional  telephone  network
primarily  because  the cost of using  the  Internet  is not  determined  by the
distance  those calls need to travel.  Also,  routing calls over the Internet is
more  cost-effective  than routing calls over the traditional  telephone network
because the technology  that enables  Internet  telephony is more efficient than
traditional  telephone network technology.  The great efficiency of the Internet
creates  cost savings that can be passed on to the consumer in the form of lower
long distance rates or retained by the carrier as higher margins.




                                       11
<PAGE>




     Beyond cost benefits,  innovation in the provision of enhanced  services is
expected to yield  increased  functionality  as well.  We believe such  enhanced
functionality  will  expand the  addressable  market for  Internet  services  to
include anyone with a telephone, and that this market is potentially larger than
the market for any other existing Internet service which requires a computer for
access.  Moreover,  computer users will benefit from interactive  voice being an
option in web browsing and other computer-based communications.

          Limitations of Existing Internet Telephony Solutions

     The  growth of voice on the  Internet  has been  limited in the past due to
poor  sound  quality  caused  by  technical  issues  such as  delays  in  packet
transmission and bandwidth  limitations related to Internet network capacity and
local  access  constraints.  However,  the  continuing  addition of data network
infrastructure,   recent  improvements  in   packet-switching   and  compression
technology,  new software  algorithms and improved  hardware have  substantially
reduced delays in packet  transmissions and the effect of these delays. Based on
these  improvements,  International  Data  Corporation  projects  that  Internet
protocol telephony revenue will grow rapidly to over $23.4 billion in 2003.

     Several  large long  distance  carriers,  including  AT&T and Sprint,  have
announced  Internet  telephony  service  offerings.  Smaller Internet  telephone
service providers have also begun to offer low-cost Internet  telephony services
from  personal  computers  to  telephones  and from  telephones  to  telephones.
Traditional  carriers have  substantial  investments  in  traditional  telephone
network technology, and therefore have been slow to embrace Internet technology.
We believe  that these  service  offerings by large long  distance  carriers and
smaller  providers are generally  available in limited  geographic areas and can
only complete calls to a limited number of locations.

     In recent years, commercial web sites have grown in popularity.  Efforts to
enhance  these  web  sites  with  voice  enabled  e-commerce  features  such  as
click-and-call  contact with a customer  service agent have been hampered by the
early quality problems with voice on the Internet  described above. In addition,
we  believe  that  the  infrastructure  required  for a  global  network  is too
expensive for most companies to deploy on their own.

     Increasing Trends Toward Outsourcing Telephony Solutions

     We believe that the global reach and functionality of the Internet makes it
especially suited for enhanced voice services. These services, which may include
web-to-phone,  phone-to-PC and unified messaging,  could be a significant source
of additional  revenues to Internet portals,  Internet service providers and web
sites that are seeking to expand their service  offerings.  Such voice  services
require  considerable  expertise and capital to deploy and may involve execution
risk for any Internet portal, Internet service provider or web site lacking this
expertise.  We expect that Internet portals,  Internet service providers and web
sites will increasingly  outsource their  communications  services to companies,
like us, that provide the network and expertise  necessary to  facilitate  those
services rather than incurring the risk and delay of developing and deploying an
array of communications services themselves and undertaking the task of building
a global network.






                                       12
<PAGE>




     Our Solution

     The  Company has  instituted  a two-step  strategy  to meet the  challenges
presented by the increased demand for inexpensive VoIP solutions. First, we will
establish  the  Company as a provider  of quality  Internet  telephone  products
designed to give our customers  immediate,  real-time voice  communication  with
their customers.  The VIPER CONNECT,  which incorporates  ITXC's  "Push-to-Talk"
technology, is a market-ready solution that is low-cost and easily installed. We
believe  that VIPER  CONNECT is a superior  product  because  the  graphic  user
interface  is  easy  to  use,  the  service  is  available  through  ITXC  on an
international  basis,  our pricing is lower and this is more  attractive  to our
customers,  and the technology is new and low risk. The VIPER CONNECT product is
what we hope to be the first of many successful  product/services offered by the
Company, as we continue to negotiate with third parties for the resell rights to
similar  products.  Each  product  marketed  by the  Company  on behalf of third
parties will be enhanced by our unique GUI and will be supported by the Company.

     In the second phase of our business  plan, we will increase our  activities
as an ASP, helping customers design and plan their  telecommunications  networks
in an effort to meet the increasing demand for outsourced  networking solutions.
In our  capacity as an ASP,  we will bring  together  third party  vendors in an
effort to design  customized  networking  for our  customers,  based  upon their
specific  communications  needs.  As one of our primary goals in designing these
private  networks,  we will design  networks  that will result in a  substantial
cost-savings  to our customers by providing  free  inter-office  communications.
VIPER CONNECT  already gives them the  opportunity to offer their customers free
voice communicating over the Internet,  with only a small charge to the customer
(such as they would pay for an 800 number).  As we design networks  specifically
for  customers,  we will look for  additional  ways to  provide  these  types of
cost-savings,  including free  communications  between offices of customers with
multiple locations.

Competition

     The market for enhanced Internet and IP communications  services is new and
rapidly evolving.  We believe that the primary  competitive  factors determining
success in the Internet and IP communications market are quality of service, the
ability  to  meet  and  anticipate   customer  needs  through  multiple  service
offerings, responsive customer care services and price. Future competition could
come from a variety of companies  both in the  Internet  and  telecommunications
industries.  These industries include major companies who have greater resources
and large  subscriber  bases than we have. We also compete in the growing market
of discount  telecommunications services including calling cards, prepaid cards,
call-back  services,  dial-around or 10-10 calling and collect calling services.
In addition,  some Internet service providers have begun to aggressively enhance
their  real-time  interactive  communications,  focusing  initially  on  instant
messaging, although we expect them to begin to provide PC-to-phone services.

     A few of our direct competitors are listed below:

     Callbutton.com  -  an  application  service  provider  of  web  interaction
software and telecommunications services.  Callbutton utilizes what it refers to
as "Callbuttons,"  which function similar to ITXC's  "Push-to-Talk"  technology.
Services provided by Callbutton  include (1) Internet  initiated phone calls and
e-mail messages,  as well as "follow-me"  telephone numbers,  (2) real-time call
progress reporting,  callback and messaging options,  and post-call surveys, (3)
Call buttons  designed to work with any web site,  third party website,  e-mail,
and rich media  banner  ads,  and  Callbuttons  that track  every  detail of the
handoff  from the  marketing  campaign to the sales  personnel  who received the
call.

     ClickiCall  - offers  three  products:  ClickiCall,  which gives  potential
customers the  opportunity  to call  ClickiCall  customers  from their PC to the
customer's  regular  phone,  ClickiChat,  which  allows  consumers  to  interact
directly with  ClickiCall  customers in real-time and ClickiCall Pro, which is a
combination of ClickiCall and ClickiChat services.




                                       13
<PAGE>




     PushNCall, Inc. - allows online businesses to voice-enable their web sites,
banner  ads or e-mail  marketing  campaigns  with live  human  interaction.  The
service allows Internet consumers,  with the push of a button, to talk to a live
agent or customer  service  representative  on their  regular or cellular  phone
line.

     We  anticipate  that as  markets  develop  and  technology  and  commercial
acceptance  of our  products and services  evolve,  other new and likely  larger
competitors  may offer products and services  similar to those we offer. In this
event we may be facing significant and continuing challenges in implementing our
strategy.  This may  force us to  change  or alter  our  strategy  or  otherwise
undertake new and unforeseen actions.

     Currently,  we believe  that the VIPER  CONNECT  product has a  competitive
advantage over products offered by these companies because (a) our GUI is easier
to use than  that of our  competitors,  (b) our  pricing  is lower and thus more
attractive  to  our  customers   (i.e.,   while  most  other  companies   charge
installation  fees of between $400 and $1,000,  our  installation  fee for VIPER
CONNECT  is under  $50),  (c)  because  the price is lower,  the risk to try our
product  is  lower  for the  customer,  and (d) our  service  is  offered  on an
international  basis because of our relationship with ITXC. And, since the VIPER
CONNECT product offers  international  service,  consumers worldwide can pick up
the  telephone  and use the  service  for  free.  However,  we face  substantial
competition  from a  number  of  larger  companies  with  substantially  greater
resources  and  longer  operating  histories  and we may not be able to  compete
effectively.  We also face competition from private and start-up companies given
the limited barriers to entry in our business.

     While  we may  experience  indirect  competition  from  companies  such  as
Vocaltec, Cisco Systems, Inc. and Net2Phone,  which manufacture products similar
to that of ITXC and may offer services  similar to the Company,  currently these
companies  typically  only provide their services to companies like ours to sell
and market them. As a result, these companies are also potential competitors.

     Traditional   telecommunications  companies,  such  as  AT&T,  Sprint,  MCI
WorldCom and Qwest Communications International, may offer enhanced Internet and
IP communications services in both the United States and internationally. All of
these  competitors are significantly  larger than we are and have  substantially
greater financial, technical and marketing resources, larger networks, a broader
portfolio  of  services,   stronger  name  recognition  and  customer   loyalty,
well-established  relationships with target customers, and an existing user base
to which they can cross-sell their services.  These and other competitors may be
able to bundle  services and products  that are not offered by us together  with
enhanced  Internet  and IP  communications  services,  which could place us at a
significant competitive  disadvantage.  Many of these types of competitors enjoy
economies of scale that can result in lower costs structure for transmission and
related  costs,  which  could cause  significant  pricing  pressures  within the
industry.

Government Regulation

     The use of the  Internet  and  private IP  networks  to  provide  telephone
service is a recent market  development.  While we believe that the provision of
voice  communications  services  over the  Internet  and  private IP networks is
currently permitted under United States law, some foreign countries have laws or
regulations that may prohibit voice communications over the Internet.




                                       14
<PAGE>




     United  States.  We believe  that,  under U.S.  law,  the  Internet-related
services that the Company provides constitute information services as opposed to
regulated  telecommunications services, and, as such, are not currently actively
regulated  by  the  FCC  or  any  state   agencies   charged   with   regulating
telecommunications  carriers.  Nevertheless,  aspects of our  operations  may be
subject to state or federal regulation, including regulation-governing universal
service  funding,  disclosure  of  confidential  communications  and  excise tax
issues. We cannot provide assurances that Internet-related  services will not be
actively regulated in the future.  Several efforts have been made in the U.S. to
enact federal  legislation  that would either regulate or exempt from regulation
services  provided over the Internet.  Increased  regulation of the Internet may
slow its growth,  particularly if other countries also impose regulations.  Such
regulation  may  negatively  impact the cost of doing business over the Internet
and  materially  adversely  affect our business,  operating  results,  financial
condition and future prospects.

     The FCC has considered whether to impose surcharges or other common carrier
regulations upon certain providers of Internet telephony, primarily those which,
unlike the Company,  provide Internet  telephony services directly to end users.
While the FCC has  presently  refrained  from such  regulation,  the  regulatory
classification of Internet telephony remains unresolved.

     Specifically,  the FCC has  expressed an  intention to further  examine the
question of whether  certain  forms of  phone-to-phone  Internet  telephony  are
information  services  or  telecommunications  services.  The  two  are  treated
differently  in  several  respects,  with  certain  information  services  being
regulated  to a  lesser  degree.  The  FCC  has  noted  that  certain  forms  of
phone-to-phone  Internet telephone bear many of the same characteristics as more
traditional voice telecommunications  services and lack the characteristics that
would render them information services.

     If the  FCC  were  to  determine  that  certain  Internet-related  services
including  Internet  telephony  services  are  subject  to  FCC  regulations  as
telecommunications services, the FCC could subject providers of such services to
traditional common carrier regulation,  including requirements to make universal
service contributions,  and pay access charges to local telephone companies.  It
is also  possible  that the FCC may  adopt a  regulatory  framework  other  than
traditional  common carrier  regulation  that would apply to Internet  telephony
providers.  Any  such  determinations  could  materially  adversely  affect  our
business,  financial  condition,  operating  results and future prospects to the
extent that any such determinations negatively affect the cost of doing business
over the Internet or otherwise  slow the growth of the  Internet.  Congressional
dissatisfaction  with FCC conclusion  could result in requirements  that the FCC
impose greater or lesser  regulation,  which in turn could materially  adversely
affect  our  business,   financial  condition,   operating  results  and  future
prospects.

     State  regulatory  authorities  may also  retain  jurisdiction  to regulate
certain  aspects of the provision of  intrastate  Internet  telephony  services.
Several state regulatory  authorities have initiated  proceedings to examine the
regulation of such services. Others could initiate proceedings to do so.




                                       15
<PAGE>




     International.  The regulatory  treatment of Internet  telephony outside of
the U.S.  varies  widely  from  country  to country  and is subject to  constant
change.  Until  recently,   most  countries  either  did  not  have  regulations
addressing Internet telephony or other VoIP services, classifying these services
as unregulated enhanced services. As the Internet telephony market has grown and
matured,  increasing  numbers of regulators have begun to reconsider  whether to
regulate VoIP services.  Some countries currently impose little or no regulation
on these  services,  as in the United States.  Conversely,  other countries that
prohibit or limit competition for traditional voice telephony services generally
do not permit  Internet  telephony or VoIP services or strictly  limit the terms
under  which  it  may be  provided.  Still  other  countries  regulate  Internet
telephony and VoIP services like traditional voice telephony services, requiring
Internet  telephony  companies to make universal  service  contributions and pay
other taxes.  Countries may also  determine on a  case-by-case  basis whether to
regulate  Internet  telephony and VoIP services as voice  services,  as enhanced
services or as another service.  The varying and constantly  changing regulation
of Internet telephony and VoIP in the countries in which we currently provide or
may provide  services may  materially  adversely  affect our business  financial
condition and results of operations.

     The European  Commission  regulatory  regime,  for  example,  distinguishes
between voice  telephony  services and other  telecommunications  services.  The
European  Commission stated that only phone-to-phone  communications  reasonably
could be considered  voice telephony and that, at present,  even  phone-to-phone
Internet telephony does not meet all elements of its voice telephone definition.
Therefore,  the European  Commission  concluded that, at the present time, voice
over Internet  services cannot be classified as voice telephony.  More recently,
in  September  2000,  after  requesting  comments  from  interested  parties the
European  Commission  issued a subsequent  communication  in which it reaffirmed
that Internet telephony is not currently voice telephony.

     As a result of the European Commission's conclusion,  providers of Internet
telephony  should  be  subjected  to no more  than a  general  authorization  or
declaration  requirement  by European  Union member  countries.  However,  Viper
cannot provide assurances that more stringent  regulatory  requirements will not
be  imposed  by  individual  member  countries  of  the  European  Union,  since
Commission  communications,  unlike  directives,  are not  binding on the member
states.  The member  countries  therefore  are not  obligated  to reach the same
conclusions  as the  Commission  on this  subject so long as they  adhere to the
definition  of voice  telephony  in the  Services  Directive.  Moreover,  in its
January 1998 IP Telephony  Communication,  the  European  Commission  state that
providers of Internet telephony whose services satisfy all elements of the voice
telephony definition and whose users can dial out to any telephone number can be
considered  providers  of voice  telephony  and may be  regulated as such by the
member states of the European Union.

     We will also be providing  services in countries  where the  regulation  of
Internet telephony is more restrictive than in the United States or the European
Union. In some of those countries,  we may be forced to find strategic  partners
within those  countries to help us obtain  regulatory  approval.  Changes in the
regulatory  regimes of countries where we do business,  then may have the effect
of limiting or prohibiting Internet telephony services, to one or more countries
in which we currently operate or seek to operate in the future.




                                       16
<PAGE>




     Also,  in the event we  expand  into  additional  foreign  countries,  such
countries  may assert  that we are  required  to qualify to do  business  in the
particular foreign country, that we are otherwise subject to regulation, or that
we are prohibited from  conducting our business in that country.  Our failure to
qualify as a foreign  corporation in a jurisdiction  in which we are required to
do so,  or to  comply  with  foreign  laws  and  regulations,  would  materially
adversely affect our business,  financial condition and results of operations by
subjecting us to taxes and  penalties  and/or by precluding us from, or limiting
us in, enforcing  contracts in such jurisdictions.  Likewise,  our customers and
partners may be or become subject to requirements to qualify to do business in a
particular  foreign country,  otherwise to comply with regulations,  or to cease
from  conducting  business  in that  country.  We  cannot  be  certain  that our
customers  and partners are  currently in  compliance  with  regulatory or other
legal  requirements  in their  respective  countries,  that they will be able to
comply with existing or future  requirements,  and/or that they will continue in
compliance with any  requirements.  The failure of our customers and partners to
comply with these requirements  could materially  adversely affect our business,
financial conditions and results of operations.

     Finally,  the  International  Telecommunications  Union,  or  the  ITU,  an
international  treaty organization that deals with  telecommunications  matters,
has not  taken any  action  in favor or  against  Internet  telephony.  In 2000,
however,  the ITU convened  meetings and  published  reports on the Internet and
Internet  telephony issues,  partly in response to concerns from some developing
countries  over  Internet  Telephony  and  tariffing of  international  Internet
backbone  traffic.  The  ITU  will  hold  additional  meetings  and  will  issue
additional  reports on Internet  telephony  during 2001 that may encourage  some
countries  to increase or reduce  their  regulation  of Internet  telephony.  In
particular,  an ITU study group is examining how international Internet backbone
providers  compensate  each other for  traffic.  These  efforts,  which may take
several  years to be  completed  and which are  currently  opposed by the United
States and some European countries, may eventually result in changes in national
or   international   regulations   dealing  with  financial   compensation   for
international Internet traffic which could affect certain of our costs.

     Certain Other Regulations Affecting the Internet

     United States.  Congress has recently  adopted  legislation  that regulates
certain  aspects of the Internet,  including  online  content,  user privacy and
taxation. In addition, Congress and other federal entities are considering other
legislative and regulatory  proposals that would further  regulate the Internet.
Congress  has, for  example,  considered  legislation  on a wide range of issues
including Internet spamming,  database privacy, gambling,  pornography and child
protection,  Internet fraud, privacy and digital signatures. Various states have
adopted  and  are  considering  Internet-related  legislation.   Increased  U.S.
regulation  of  the  Internet  may  slow  its  growth,   particularly  if  other
governments  follow suit, which may negatively impact the cost of doing business
over the  Internet  and  materially  adversely  affect our  business,  financial
condition, results of operations and future prospects.

     International.  The  European  Union has also  enacted  several  directives
relating  to the  Internet.  The  European  Union has,  for  example,  adopted a
directive that imposes  restrictions on the collection and use of personal data.
Under the directive,  citizens of the European  Union are  guaranteed  rights to
access  their  data,  rights to know where the data  originated,  rights to have
inaccurate  data  rectified,  rights  to  recourse  in  the  event  of  unlawful
processing  and  rights to  withhold  permission  to use their  data for  direct
marketing.  The directive could, among other things,  affect U.S. companies that
collect or transmit  information  over the Internet from individuals in European
Union member states,  and will impose  restrictions that are more stringent than
current  Internet  privacy  standards in the U.S. In particular,  companies with
offices located in European Union countries will not be allowed to send personal
information  to countries  that do not maintain  adequate  standards of privacy.
Although Viper does not engage in the collection of data for purposes other than
routing its services and billing for its services,  the directive is quite broad
and the  European  Union  privacy  standards  are  stringent.  Accordingly,  the
potential effect on the development of Viper in this area is uncertain.



                                       17
<PAGE>





Item 1a.  Factors that May Affect Future Results

     The Company's  business  organization,  the Company's reliance upon certain
technology and third parties,  competitive trends in the marketplace,  and other
factors all involve elements of substantial risk. In many instances, these risks
arise from factors  over which the Company will have little or no control.  Some
adverse  events  may be more  likely  than  others and the  consequence  of some
adverse  events may be greater  than  others.  No attempt  has been made to rank
risks in the order of their  likelihood or potential  harm. In addition to those
general risks enumerated elsewhere,  any purchaser of the Company's Common Stock
should also consider the following factors.

1.  Continued  Operating  Losses &  Development-Stage  Company.  The Company has
incurred  $366,029 in losses during the twelve  months ending  December 31, 2001
and cumulative losses of $405,137 since the Company's inception.  The Company is
a development-stage  company and may well incur significant additional losses in
the  future as well and  there  can be no  assurance  that the  Company  will be
successful or that it will be profitable in the future.

2. Current Financial Structure,  Limited Equity,  Limited Working Capital & Need
for  Additional  Financing.  While the  Company's  management  believes that its
financial  policies  have been prudent,  the Company has relied,  in large part,
upon the use of common stock  financing to provide a substantial  portion of the
Company's  financial needs.  The Company  anticipates that it will need to raise
significant  additional capital to implement is business plan. While the Company
believes  that  it  will  be  successful,  the  Company  has  had  only  limited
discussions  with  potential  investors  and there can be no guarantee  that the
Company  will  receive  additional  capital  from any  investors  or, if it does
receive sufficient  additional capital, that it can obtain additional capital on
terms  that are  reasonable  in light of the  Company's  current  circumstances.
Further,  the Company has not received any  commitments  or assurances  from any
underwriter,  investment  banker,  venture capital fund, or other  individual or
institutional investor.




                                       18
<PAGE>




3. Auditor's Opinion: Going Concern. The Company's independent auditors, Armando
C. Ibarra,  CPA,  P.C.,  have  expressed  substantial  doubt about the Company's
ability to continue as a going concern since the Company is a  development-stage
company and operations have not yet commenced.

4.  Subordinate to Existing and Future Debt & Authorized But Unissued  Preferred
Stock.  All of the Common Stock is  subordinate  to the claims of the  Company's
existing  and  future  creditors  and  the  holders  of the  Company's  existing
preferred stock and any that may be issued in the future.

5. Dependence Upon ITXC & Reliance Upon Others. Our VIPER CONNECT product relies
upon the "Push to Talk"  technology and expertise  provided by ITXC. We have not
established  and we do not currently  have any other sources for the  technology
and expertise  provided by ITXC. As a result, we will remain dependent upon ITXC
in connection with the marketing and sale of the VIPER CONNECT product.  We also
intend to distribute our product using independent contractors. In addition, our
products  and  services  will  continue  to rely upon  hardware,  software,  and
communications  systems  provided by others  and/or used by our  customers.  For
these reasons we will likely remain  highly  dependent  upon third parties which
may materially and adversely  affect our ability to offer distinct  products and
services  which may result in adverse  pricing  pressures on our  products  with
resulting adverse impact on our profits, if any.

6. Price  Competition  on Certain  Services.  The products and services  that we
intend to offer may,  through changing  technology and cost  structures,  become
commodities which result in intense price competition.  While we believe that we
will be able to distinguish  our products and services from competing  products,
services,  and  technologies  offered  by  others,  if we  fail  to  distinguish
ourselves  from others,  this could hinder  market  acceptance  of our services,
force reductions in contemplated sales prices for our products and services, and
reduce our overall sales and gross margins.  Potential  customers may view price
as the primary  distinguishing  characteristic between our products and services
and  those of our  competitors.  This  could  result  in the  Company  incurring
significant and protracted  losses.  Further,  we are selling into a market that
has a broad range of desired product characteristics and features which may make
it difficult for us to develop  products that will address a broad enough market
to be commercially viable.

7. Absence of Customers and Long-Term Contracts.  While we seek to implement our
plans,  we currently do not have a customer  base.  Further,  we do not have any
long-term  contracts  with any customers  and there can be no assurance  that we
will successfully obtain long-term contracts on any continuing basis.

8. Limited Control Over Third Parties & Planned Products/Services.  We intend to
offer VoIP and  Video-over-IP  network  design and  planning  services and in so
doing, we antiicpate  that we will be acting as "general  contractor" in brining
together  various  third party  vendors to complete a VoIP  solution  based on a
customer's specific needs and prferences.  As a result, since we may not be able
to conrol the products and services that these third parties  provide we may not
be able to conrol the quality of our products and  services.  This may adversely
impact our ability to  implement  our  business  plan and otherwise allow us to
differentiate our product effectively in the marketplace.

9. Customers,  Technology/Feature Options & Commercial Viability. If we are able
to  implement  our business  plan,  we will be selling our products and services
into a marketplace that is experiencing a convergence of competing technologies.
Typically,  telecommunications  providers  desire extremely robust products with
the  expectation of a relatively  long effective life. As a result and depending
on the  outcome  of  unknown  trends in  technology,  market  forces,  and other
variables,  we may not  attract  a broad  enough  market to  achieve  commercial
viability.

10 New  Technologies  May Be Developed.  New products or new technologies may be
developed that supplant or provide lower-cost or better-performing  alternatives
to our planned products and services. This could negatively impact our financial
results.




                                       19
<PAGE>




11.  Government  Regulation.  Our planned  operations  will likely be subject to
extensive  telecommunications-based  regulation by the United States and foreign
laws and international  treaties. In the United States we are subject to various
Federal  Communications  Commission  ("FCC") rules and regulations.  Current FCC
regulations  suggest  that  our  VoIP  will not be  unduly  burdened  by new and
expanded regulations.  However, there can be no assurance that the occurrence of
regulatory changes would not significantly  affect our operations by restricting
our planned operations or increasing the opportunity of our competitors.  In the
event that  government  regulations  change,  there can be no assurance that the
costs and burdens  imposed on us will not  materially  and adversely  impact our
planned business.

12.  Control.  Our  officers  and  directors  directly  and  indirectly  hold an
aggregate of 4,659,894  shares of the Company's  common stock.  This  represents
over 75% of the Company's total  outstanding  shares as of December 31, 2001 and
thereby  allows the Company's  officers and directors to retain control over the
Company.

13.  Prior  Filing  of Form  10-SB.  In June of  2001 we  prepared  and  filed a
registration  statement  on Form 10-SB  with the U.S.  Securities  and  Exchange
Commission (the "SEC"). Subsequently,  our then legal counsel delivered a letter
(dated  November 15, 2001) to the SEC which,  by its terms,  stated that the SEC
had agreed to allow us to withdraw the registration  statement.  At the time the
Company's  management  believed,  in reliance upon assurances from the Company's
then  legal  counsel,  that  the  Company  had  been  allowed  to  withdraw  the
registration statement, notwithstanding that the Securities Exchange Act of 1934
(the "Exchange  Act") provides that any withdrawal of a Form 10-SB  registration
statement  (at any time  after 60 days  from the date at which it is  originally
filed)  requires  that the  registrant:  (a) file Form 15 with the SEC; (b) meet
certain  requirements that allow the registrant to file Form 15 to terminate the
registration of the securities  that were  previously  registered on Form 10-SB;
and (c) file such other periodic  reports as required to ensure  compliance with
Section  13(a) of the Exchange Act up to the date at which the Form 15 is filed.
Subsequently, in September 2004, the Company received a letter from the SEC (the
"SEC  Letter")  informing  the Company  that the Company had not  satisfied  its
obligations  to file  periodic  reports  required  under  Section  13(a)  of the
Exchange  Act.  While  we  believed  that  we had  reasonably  relied  upon  the
assurances  from our legal counsel (that we had  effectively  withdrawn the Form
10-SB  registration  statement),  we are  determined  to  complete  all past and
current  periodic  filings and to comply with the SEC Letter as expeditiously as
possible. However, we have not received any assurances from the SEC that we will
not be subject to any adverse  enforcement  action by the SEC.  While we did not
seek to avoid our  obligations  under  the  Exchange  Act in any way,  our prior
actions in  mistakenly  believing  that we had no  obligation  to file  periodic
reports  required  by the  Exchange  Act  exposes  us to risk of  liability  for
significant  civil  fines and the SEC could,  among other  enforcement  actions,
suspend trading in our Common Stock.  Further, we offered and sold securities in
reliance upon  exemptions  that were  predicated on our mistaken belief that the
registration statement had been withdrawn. For these and other reasons we may be
exposed to liability. We intend to continue a dialogue with the staff of the SEC
and, as  information  is collected and  documents are prepared,  to complete all
filings needed to demonstrate  that we are fulfilling our obligations  under the
Exchange  Act  with  due care and in full  observance  of our  obligations  as a
"reporting company" thereunder.



                                       20
<PAGE>




14. Dependence Upon Key Personnel and New Employees. We believe that our success
will depend,  to a significant  extent, on the efforts and abilities of James G.
Wray, John L.  Castiglione,  and Jason A. Sunstein.  The loss of the services of
any of them could have a material and continuing  adverse effect on the Company.
Our  success  also  depends  upon our  ability to attract  and retain  qualified
employees.  Hiring  to meet our  anticipated  operations  will  require  that we
assimilate significant numbers of new employees during a relatively short period
of time.

15. Absence of Key Man Insurance.  We currently do not maintain any key man life
insurance on the life of Mr. Wray, Mr.  Castiglione,  or Mr.  Sunstein and there
are no present plans to obtain any such insurance.  In the event that any one or
more of them are unable to perform their duties,  the Company's  business may be
adversely impacted.

16. Absence of Workers  Compensation and General Liability  Insurance.  While we
intend to acquire workers compensation insurance and general liabliity insurance
as our  financial  resources  may allow,  at the present time we do not have any
workers copensation  insurance or any general liability insurance.  In the event
that  one or more  employees  suffer  any  injuries  or in the  event  that  any
customer,  vendor,  or other third party  should  incur any injury or losses for
which  liability is asserted  against us, we could incur  significant  costs and
liability for all such infury or losses.

17. Lack of Independent Evaluation of Business Plan & Proposed Strategy. We have
not obtained any  independent  evaluation  of our business plan and our business
strategy and we have no present plans to obtain any such  evaluation.  There can
be no  assurance  that we will  generate  any  revenues,  or if revenues  can be
generated,  that they can be  sustained  and  generated at a level to achieve or
maintain profitability.

18. No Planned Dividends. We do not anticipate that we will pay any dividends on
our Common Stock. Any profits that we may generate, if any, will be reinvested.

19. Potential  Dilution.  Funding of our planned business is likely to result in
substantial and on-going dilution of our existing stockholders.  While there can
be no guarantee that we will be successful in raising additional  capital, if we
are successful in obtaining any additional  capital,  existing  stockholders may
incur substantial dilution.

20. Matter of Public  Market and Rule 144 Stock Sales.  As of December 31, 2001,
there was no public  trading  market for our Common Stock.  Since  September 16,
2002, we have had a limited  public  trading  market for our Common Stock in the
"Pink Sheets"  market.  Since that date trading  volumes have been volatile with
sporadic liquidity levels.  Further,  our Common Stock is (as of the date of the
filing of this  Report) a "Penny  Stock" and for this reason we face  continuing
difficulties  in our efforts to gain a liquid trading market and there can be no
assurance  that any  liquid  trading  market  will ever  develop  or, if it does
develop,  that it can be  maintained.  In the event that we are able to complete
the filing of all periodic reports (the "Periodic  Reports") required by Section
13(a) of the Securities  Exchange Act of 1934 (the "Exchange Act") and if we are
able to avoid any significant  adverse enforcement action by the SEC arising out
of our lack of  compliance  with the Exchange Act, then as of December 31, 2001,
all of outstanding  Common Stock would be termed  "restricted  securities" which
may be sold only in compliance with Rule 144 adopted under the Securities Act of
1933 or other applicable exemptions from registration.  Rule 144 provides that a
person  holding  restricted  securities  for a period of one year may thereafter
sell in  brokerage  transactions,  an amount not  exceeding  in any three  month
period 1% of our  outstanding  Common  Stock.  Further,  unless the  Company can
complete all of the required  Periodic  Reports and remain current in the filing
of all future Periodic  Reports,  persons holding  restricted  stock will not be
able to avail themselves of the safe harbor  provisions of Rule 144. Persons who
are  not  affiliated  with  the  Company  and who  have  held  their  restricted
securities for at least two years are not subject to the volume  limitation.  In
any trading market for our Common Stock,  possible or actual sales of our Common
Stock by present shareholders under Rule 144 may have a depressive effect on the
price of our Common Stock even if a liquid trading market develops.




                                       21
<PAGE>




21.  General Risks of Low Priced  Stocks.  In any trading  market for our Common
Stock,  we anticipate that our Common Stock will be deemed a "Penny Stock" which
will limit  trading and  liquidity  and thereby the retail market for the Common
Stock.  The  limitations  are  primarily  due to the burdens that are imposed on
brokers whose customers may wish to acquire our Common Stock.

     In that event,  a shareholder  may find it more difficult to dispose of, or
to obtain  accurate  quotations  as to the  price of our  Common  Stock.  In the
absence of a security being quoted on NASDAQ,  or the Company having  $2,000,000
in net  tangible  assets,  trading in the Common Stock is covered by Rule 3a51-1
promulgated  under  the  Securities  Exchange  Act of 1934  for  non-NASDAQ  and
non-exchange listed securities.  Under such rules,  broker/dealers who recommend
such  securities to persons  other than  established  customers  and  accredited
investors  (generally  institutions  with  assets  in excess  of  $5,000,000  or
individuals with net worth in excess of $1,000,000 or an annual income exceeding
$200,000 or $300,000  jointly  with their  spouse)  must make a special  written
suitability  determination for the purchaser and receive the purchaser's written
agreement to a transaction  prior to sale.  Securities are also exempt from this
rule if the market price is at least $5.00 per share,  or for  warrants,  if the
warrants  have an  exercise  price of at least $5.00 per share.  The  Securities
Enforcement  and Penny Stock Reform Act of 1990 requires  additional  disclosure
related to the market for penny stocks and for trades in any stock  defined as a
penny stock.

     The Commission has adopted  regulations under such Act which define a penny
stock to be any NASDAQ or non-NASDAQ  equity security that has a market price or
exercise  price of less than  $5.00  per  share  and  allow for the  enforcement
against violators of the proposed rules.

     In addition,  unless exempt,  the rules require the delivery,  prior to any
transaction  involving a penny stock, of a disclosure  schedule  prepared by the
Commission  explaining  important  concepts  involving a penny stock market, the
nature of such market, terms used in such market, the broker/dealer's  duties to
the  customer,   a  toll-free   telephone   number  for   inquiries   about  the
broker/dealer's  disciplinary history, and the customer's rights and remedies in
case of fraud or abuse in the sale.

     Disclosure  also  must be  made  about  commissions  payable  to  both  the
broker/dealer  and the  registered  representative,  current  quotations for the
securities,   and,  if  the   broker/dealer   is  the  sole  market  maker,  the
broker/dealer  must disclose this fact and its control over the market.  Monthly
statements must be sent disclosing  recent price information for the penny stock
held in the account and information on the limited market in penny stocks.

     While many NASDAQ  stocks are covered by the proposed  definition  of penny
stock,   transactions  in  NASDAQ  stock  are  exempt  from  all  but  the  sole
market-maker  provision for (i) issuers who have  $2,000,000 in tangible  assets
has been in operation for at least three years ($5,000,000 if the issuer has not
been in continuous  operation for three years),  (ii)  transactions in which the
customer is an institutional  accredited  investor,  and (iii) transactions that
are not recommended by the broker/dealer.

     In addition,  transactions  in a NASDAQ  security  directly with the NASDAQ
market  maker for such  securities,  are subject  only to the sole  market-maker
disclosure,  and the  disclosure  with regard to  commissions  to be paid to the
broker/dealer and the registered  representatives.  The Company's securities are
subject to the above  rules on penny  stocks and the  market  liquidity  for the
Company's  securities  could be severely  affected  by  limiting  the ability of
broker/dealers to sell the Company's securities.










                                       22
<PAGE>




Item 2.  Description of Property

Principal Office

     In 2001, the Company's  headquarters  and principal  office were located at
7960  Silverton  Avenue,  Suite 210, San Diego,  California  92126.  The Company
leased this space under a month-to-month agreement with approximately 732 square
feet at $1.15 per square per month. In July of 2001, the Company entered into an
oral lease for the rental of the office space from Jason A. Sunstein, an officer
and director of the Company,  which  required that the Company pay Mr.  Sunstein
the sum of $1,100  per month in  paypment  for all  office  space and  utilities
thereunder with this arrangement  continuing  through December 2003 (inclusive).
Our current  office  address (as of the date of this  filing) is as shown on the
first page of this Form 10-KSB.

Hills of Bajamar Industrial Space

     During September 1998, the Company entered into an agreement with a related
party to  purchase  50 acres of real  property  known as the  Hills of  Bajamar,
located in Ensenada,  Mexico.  The property is valued at a  predecessor  cost of
$125,000.  The Company  intended to sell lots for  residential  development  and
build a  communications  facility for  residents  in the  surrounding  area.  As
consideration  for the land, the Company issued 3,000,000 shares of its Series B
Preferred  Stock.  On June 30,  2001,  all of the Series B  Preferred  Stock was
converted into 400,000 shares of the Company's  Common Stock. As of December 31,
2001, the Company had not received clear title to the land

Item 3.  Legal Proceedings

     None.

Item 4.  Submission of Matters to a Vote of Security Holders.

     On December 29, 2001,  the Company's  stockholders  held a Meeting at which
the  stockholders  appointed HJ & Associates,  LLC as the Company's  independent
auditors and elected James G. Wray, John G.  Castiglione,  and Jason A. Sunstein
as Directors of the Company.


                                       23
<PAGE>




                                     PART II

Item 5.  Market for Common Equity and Related Stockholder Matters.

     As of December 31, 2001,  the  Company's  Common Stock did not trade in any
market or exchange and the Company had no market makers and had 121 shareholders
of record.

     On September 16, 2002,  trading commenced in the non-Over the Counter "Pink
Sheets" listed in the National Daily Quotations Service under the symbol,  VPER.
The market for the Company's Common Stock is subject to significant fluctuations
and only a limited and volatile trading market exists.  During this period,  the
Common Stock is  currently  traded only  sporadically  and with only limited and
minimal interest by market makers.

     Stockholders  who may seek to sell any Shares of the Common  Stock will not
likely find any significant  liquidity and therefore may not be able to sell any
significant volume of the Company's Common Stock.

     The Company has followed the policy of reinvesting  earnings,  if any, and,
consequently, has not paid any cash dividends. At the present time, no change in
this policy is under  consideration  by the Board of  Directors.  The payment of
cash  dividends  in the future will be  determined  by the Board of Directors in
light of conditions then existing,  including the Company's earnings,  financial
requirements and condition,  opportunities  for reinvesting  earnings,  business
conditions and other factors.

     In June of 1998,  the  Company  issued  3,000,000  shares of the  Company's
Convertible  Preferred  Non-Voting  Class B  shares  (the  "Series  B  Preferred
Shares")  with each share value at $1.00  together with  1,000,000  common stock
purchase  warrants  (the  "Warrants").  The  Series B  Preferred  Shares and the
Warrants were issued to Tri- National Development  Corporation  ("Tri-National")
to purchase 50 acres of real property  located in the  Municipality of Ensenada,
Baja  California,  Mexico from  Tri-National.  The 1,000,000  Warrants  provided
Tri-National with the right to purchase 1,000,000 shares of the Company's common
stock at a price of $3.00 per share (if the Company's  common shares are trading
at $4.00 or  higher);  $2.00 per  shares  (if the  Company's  common  shares are
trading  between  $3.00 and $4.00 per share);  $1.25 per share (if the Company's
common shares are trading  between  $2.00 and $3.00 per share);  and in no event
less than $.75.  The price and terms for the  property  are based on arms length
negotiations  between  the parties and was  approved by the  Company's  Board of
Directors  and the  shareholders  of the  Company at the  Annual  Meeting of the
Shareholders, held on April 30, 1999. The Series B Preferred Shares and Warrants
were  offered  and  sold  by the  Company's  management  without  the  use of an
underwriter or NASD registered broker-dealer and no commissions were incurred by
the Company in connection  with the  transaction.  All of the Series B Preferred
Shares and Warrants were offered and sold under a claim of exemption provided by
Section 4(2) of the  Securities  Act of 1933 to  Tri-National  which the Company
believed  to be  sophisticated  and  experienced  in  financial,  business,  and
investment  matters  and  otherwise  able  to  evaluate  the  merits  and  risks
associated with the purchase of the Company's securities.

     In November 2000,  the Company issued an aggregate of 36,000,000  shares of
the  Company's  Common  Stock to the  stockholders  of Viper  Networks,  Inc., a
California corporation  ("Viper-CA").  The shares were issued to five persons to
acquire all of the  outstanding  stock of Viper-CA.  The shares were offered and
sold by the  Company's  management  without  the use of an  underwriter  or NASD
registered  broker-dealer  and no  commissions  were  incurred by the Company in
connection with the transaction. All of the shares were offered and sold under a
claim of exemption  provided by Section 4(2) of the Securities Act of 1933. Each
of the investors were sophisticated and experienced in financial,  business, and
investment  matters  and  otherwise  able  to  evaluate  the  merits  and  risks
associated with the purchase of the Company's securities.




                                       24
<PAGE>




     In March 2001, the Company  issued  541,550 shares of the Company's  Common
Stock to twelve  investors  for gross  proceeds of $48,500 in cash and $5,655 in
payment of monies owed to  Castle-Lion  Corporation  ("Castle-Lion"),  a private
corporation  owned  by John L.  Castiglione,  an  officer  and  director  of the
Company.  Of the cash proceeds,  $8,500 was from Six-Twenty Capital  Management,
Inc. ("Six-Twenty  Capital"),  a private corporation owned by Jason A. Sunstein,
an officer and director of the Company.  The shares were offered and sold by the
Company's  management  without  the use of an  underwriter  or  NASD  registered
broker-dealer and no commissions were incurred by the Company in connection with
the  transaction.  All of the  shares  were  offered  and sold  under a claim of
exemption  provided by Section 4(2) of the Securities  Act of 1933.  Each of the
investors  were  sophisticated  and  experienced  in  financial,  business,  and
investment  matters  and  otherwise  able  to  evaluate  the  merits  and  risks
associated with the purchase of the Company's securities.

     In September  2001, the Company  offered and sold an aggregate of 1,167,882
shares of the Company's  Common Stock at $0.10 per share.  The Company  received
$12,100 in cash, with $2,100 received from Six-Twenty Capital,  from the sale of
121,000  shares at $0.10 per share.  In addition,  400,000 shares were issued to
Tri-National in conversion of the Class B Preferred Stock The remaining  shares,
totaling 646,882 shares, were issued to four persons as follows (each at a value
of $0.10 per share):  (a) 6,000  shares  were issued in payment for  programming
services;  (b) 210,000 shares were issued to James Wray, an officer and director
of the Company in payment for services  rendered  during the period from January
through  June 2001;  (c) 210,000  shares were  issued to Jason A.  Sunstein,  an
officer and director of the Company in payment for services  rendered during the
period from January  through June 2001;  (d) 220,882  shares were issued to John
Castiglione,  an officer and  director  of the  Company in payment for  services
rendered  during the period  from  January  through  June 2001 and in payment of
monies owed for funds previously advanced to the Company. All of the shares were
offered and sold by the Company's  management  without the use of an underwriter
or NASD registered broker-dealer and no commissions were incurred by the Company
in  connection  with the  transaction.  All of the shares were  offered and sold
under a claim of  exemption  provided by Section 4(2) of the  Securities  Act of
1933.  Each of the investors were  sophisticated  and  experienced in financial,
business,  and investment  matters and otherwise able to evaluate the merits and
risks associated with the purchase of the Company's securities.

Item 6.  Management's Discussion and Analysis or Plan of Operation.

     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  accounting  principles  generally
accepted in the United States.  The  preparation of these  financial  statements
requires  management to make  estimates  and judgments  that affect the reported
amounts of assets,  liabilities,  revenues, and expenses and related disclosures
of  contingent  liabilities.  On an  ongoing  basis,  management  evaluates  its
estimates,  including  those that  relate to income tax  contingencies,  revenue
recognition,  and  litigation.  Management  bases its  estimates  on  historical
experience and on various other  assumptions  that are believed to be reasonable
under  the  circumstances,  the  results  of which  form the  basis  for  making
judgments  about the  carrying  value of  assets  and  liabilities  that are not
readily  apparent  from other  sources.  Actual  results  may differ  from these
estimates  under  different  assumptions  and  conditions.   If  actual  results
significantly  differ  from  management's  estimates,  the  Company's  financial
condition and results of operations could be materially impaired.

Comparison  of Fiscal  Year  Ending  December  31,  2001 and From  Inception  to
December 31, 2000

     During the fiscal  year  ending  December  31,  2001,  we recorded no sales
revenue.  This  compares  to the period from  inception  on  September  14, 2000
through the fiscal year ending  December  31, 2000 (the "Fiscal  2000"),  during
which we also  recorded no sales  revenue.  We had only limited  activities  and
remained  a  development-stage  company.  During  Fiscal  2001,  we had  not yet
commenced operations.




                                       25
<PAGE>




     During  Fiscal  2001,  we incurred  $354,666 in General and  Administrative
Expenses which compares to $38,852 in General and Administrative expenses during
Fiscal  2000.  The  increase  of 813% from  Fiscal  2000 to Fiscal  2001 was due
primarily  to two factors:  (1) during  Fiscal 2000 the Company was in existence
only for three and one-half months versus the full 12 months of Fiscal 2001; and
(2) during  Fiscal 2001 the Company  increased  the  average  monthly  amount of
general  administrative  expenses in connection with the efforts the Company was
taking  to  develop  the  Company's   business   plan.   Overall,   General  and
Administrative  Expenses were  primarily  made up of wages and salaries,  office
expenses,  fees and costs incurred for legal and accounting services,  and other
administrative costs.

     During  Fiscal 2001,  we recorded a Loss Before Other  Expenses of $354,666
compared  to Fiscal  2000  where we  recorded  a Loss  Before  Other  Expense of
$38,852.  The increase in the amount of the Loss was due primarily the increased
administrative expenses we incurred during Fiscal 2001.

     During  Fiscal  2001,  we also had Interest  expense of $6,384  compared to
Interest expense of $256 during Fiscal 2000. In addition, during fiscal 2001, we
realized  a loss on  marketable  securities  of $5,084  and other net income and
expense of $105.

     As a result, during Fiscal 2001 we had a Net Loss of $366,029 compared to a
Net Loss of $39,108 for Fiscal 2000.

     Basic Loss Per Share for Fiscal  2001 was  ($0.08)  compared to Fiscal 2000
where we had a Basic Loss Per Share of ($0.02) per Share.  During Fiscal 2001 we
had 4,397,939 weighted average shares  outstanding  compared to Fiscal 2000 when
we had 1,855,506 weighted average shares outstanding.

Liquidity and Capital Resources

     At December  31,  2001,  we had $105 in cash.  At the same time,  we had no
other current assets.  Our only assets consisted of certain  computer  equipment
and  office  furniture.  In  contrast,  as  of  December  31,2001,  our  current
liabilities   consisted  of  $227,614  which  consisted  of  accrued  wages  and
professional  services,  accounts  payable  to  related  parties,  a note with a
related party, and capital lease obligations.

     During Fiscal 2001, our cash needs were met primarily by the sale of common
stock and loans from certain of our shareholders.  We can not be assured that we
will  continue to obtain funds from these or any other  sources to meet our need
for additional capital resources.

     During   Fiscal  2001,   we  defaulted  on  our  long  term  capital  lease
obligations.  The net present value of the lease plus accrued interest  totaling
$20,305 is shown in our current liabilities.

     Overall,  our liquidity and access to capital is very limited.  Net Working
Capital  as of  December  31,  2001 was  ($227,509).  We have not  received  any
commitment for additional financing and given our  development-stage,  we may be
limited to loans and other cash  infusions from  officers,  directors,  existing
stockholders,  and persons affiliated or associated with one or more of them. If
we are to implement our business plan, we will need to raise significant amounts
of additional  capital and during the period ending December 31, 2001 we had not
received any commitment that any such additional  financing would be forthcoming
or, if could be obtained,  that it can be obtained on reasonable  terms in light
of our  circumstances  at that time.  In addition,  if any  financing  should be
obtained,  existing shareholders will likely incur substantial,  immediate,  and
permanent dilution of their existing investment.





                                       26
<PAGE>




     As of December 31, 2001,  the Company  expects to need at least $100,000 to
cover its  anticipated  operating  expenses  for the next  twelve  month  period
thereafter.

Critical Accounting Policies

     The preparation of our consolidated financial statements in accordance with
accounting  principles  generally  accepted  in the  United  States  of  America
requires us to make estimates and assumptions  that affect the reported  amounts
of assets and liabilities and disclosure of contingent assets and liabilities at
the date of the financial  statements;  and the reported  amount of revenues and
expenses  during the reporting  periods.  We are required to make  judgments and
estimates  about the effect of matters  that are  inherently  uncertain.  Actual
results  could  differ  from our  estimates.  While  we are a  development-stage
company,  the most  significant  areas involving our judgments and estimates are
principally those involving our current liabilities.

Safe Harbor for Forward-Looking Statements

     This Form 10-KSB contains forward-looking  statements as defined by federal
securities  laws which are made  pursuant to the safe harbor  provisions  of the
Private Securities Litigation Reform Act of 1995. Forward-looking statements are
statements  concerning  plans,  objectives,  goals,  strategies,   expectations,
intentions,  projections,  developments, future events, performance or products,
underlying (express or implied) assumptions and other statements which are other
than  historical  facts.  In  some  cases,  you  can  identify   forward-looking
statements by terminology such as "may," "will," "should,"  "could,"  "expects,"
"intends,"  "plans,"  "anticipates,"  "contemplates,"  "believes,"  "estimates,"
"predicts,"  "projects," and other similar  terminology or the negative of these
terms.   From  time  to  time  we  may  publish  or  otherwise   make  available
forward-looking statements of this nature. All such forward-looking  statements,
whether written or oral, and whether made by us or on our behalf,  are expressly
qualified by the cautionary statements described in this Form 10-KSB,  including
those set forth in Section 1A entitled "Factors That May Affect Future Results."
In addition,  we undertake no obligation to update or revise any forward-looking
statement to reflect events, circumstances, or new information after the date of
this  Form  10-KSB  or to  reflect  the  occurrence  of  unanticipated  or other
subsequent events, and we disclaim any such obligation.



                                       27
<PAGE>




Impact of Inflation

     Because of the nature of its  services,  the Company  does not believe that
inflation had a significant impact on its sales or profits.

Recent Accounting Pronouncements

     In June 2001, the Financial  Accounting  Standards  Board  ("FASB")  issued
Statement  of  Financial   Accounting   Standards  ("SFAS")  No.  141,  Business
Combinations.  SFAS No. 141  addresses  financial  accounting  and reporting for
business combinations and supersedes APB Opinion No. 16, Business  Combinations,
and FASB  Statement  No. 38,  Accounting  for  Preacquisition  Contingencies  of
Purchased Enterprises.  All business combinations in the scope of this Statement
are to be accounted for using one method.  The  provisions of this Statement are
effective  for all business  combinations  initiated  after June 30, 2001.  This
accounting  pronouncement  is not  expected  to have a  material  impact  on the
Company's financial position or results of operations.

     In June 2001 the FASB issued SFAS No. 142,  Goodwill  and Other  Intangible
Assets. SFAS No. 142 addresses  financial  accounting and reporting for acquired
goodwill  and other  intangible  assets and  supersedes  APB No. 17,  Intangible
Assets.  It addresses how intangible  assets that are acquired  individually  or
with a group of other assets (but not those acquired in a business  combination)
should be  accounted  for  after  they have  been  initially  recognized  in the
financial  statements.  The  provisions  of this  Statement  are  effective  for
financial  statements issued for fiscal years beginning after December 15, 2001.
This accounting  pronouncement  is not expected to have a material impact on the
Company's financial position or results of operations.

     In August 2001, the FASB issued SFAS No. 144,  Accounting for Impairment or
Disposal of Long-lived Assets. SFAS No. 144 addresses  financial  accounting and
reporting for the impairment or disposal of long-lived  assets,  supersedes SFAS
No. 121,  Accounting for the Impairment of Long-lived  Assets and for Long-lived
Assets to be Disposed Of, supersedes the accounting and reporting  provisions of
APB Opinion No. 30,  Reporting the Results of Operations - Reporting the Effects
of  Disposal  of a  Segment  or  a  Business  and  Extraordinary,  Unusual,  and
Infrequently Occurring Events and Transactions, for the disposal of a segment of
a  business  (as  previously  defined in that  Opinion),  and amends ARB No. 51,
Consolidated  Financial Statements,  to eliminate the exception to consolidation
for a subsidiary for which control is likely to be temporary.  The provisions of
this  Statement are effective for financial  statements  issued for fiscal years
beginning  after  December 15,  2001,  and interim  periods  within those fiscal
years.  This accounting  pronouncement is not expected to have a material impact
on the Company's financial position or results of operations.


Item 7. Financial Statements.

     The financial  statements and related financial  information required to be
filed  hereunder  are  indexed on page F-1 of this  report and are  incorporated
herein by reference.

Item 8.  Changes in and Disagreements With Accountants.

     None.





                                       28
<PAGE>




                                    PART III

Item  9.  Directors,   Executive  Officers,   Promoters,  and  Control  Persons;
Compliance With Section 16(a) of the Exchange Act.

Directors and Executive Officers

     The members of the Board of Directors  of the Company  serve until the next
annual meeting of stockholders, or until their successors have been elected. The
Company's by-laws provide for four authorized directors.  Currently, the Company
has only three directors and intends,  as  opportunities  become  available,  to
identify one additional director to serve on the Company's Board of Directors.

     The officers  serve at the pleasure of the Board of Directors.  Information
as to the directors and executive officers of the Company is as follows:

<TABLE>
---------------------------------------------------- --------- ------------------------------------- ---------------
                       Name                            Age                   Position                 Date Elected
---------------------------------------------------- --------- ------------------------------------- ---------------
<S>                                                   <C>       <C>                                  <C>
James G. Wray                                           32      President, Chief Technical Officer        2000
                                                                and Director
---------------------------------------------------- --------- ------------------------------------- ---------------
John L. Castiglione                                     31      Chief Executive Officer, Treasurer,       2000
                                                                and Director
---------------------------------------------------- --------- ------------------------------------- ---------------
Jason A. Sunstein                                       31      V.P. Finance, CFO, Secretary, and         2000
                                                                Director
---------------------------------------------------- --------- ------------------------------------- ---------------
</TABLE>

     Each of the foregoing persons may be deemed a "promoter" of the Company, as
that  term is  defined  in the  rules  and  regulations  promulgated  under  the
Securities Act of 1933.

     James G. Wray, age 32, is President,  Chief Technical  Officer and Director
of the  Company.  Mr.  Wray brings  several  years of IT,  Sales and  Management
experience  to the Company.  From May 2000 to June 2001,  he worked as a Network
Consultant  for Minolta  Business  Solutions,  where he pioneered the technology
integration  division  located  in San  Diego,  which has  become the number one
branch of the company for sales.  From April 1997 to May 2000, Mr. Wray acted as
the National  Sales  Manager for McArthur  Sports,  and prior to that acted as a
Sales Manager for TSR Wireless from February 1995 to May 1997.  The last several
years  his  focus  has  been  WAN  and IP  based  networks  specializing  in VPN
technology.  Mr. Wray holds a B.A.  (degree) in  Economics  from San Diego State
University.

     John L. Castiglione,  age 31, is Chief Executive  Officer,  Treasurer,  and
Director of the Company and has held these positions since September 2000. Prior
to joining the Company,  Mr.  Castiglione held marketing  positions with Fujitsu
Business  Communications  Systems (1999),  Starbucks Specialty Sales (1998), TSR
Wireless  (1996-1998),  and  ICG  Communications  (1998-2000).  Mr.  Castiglione
attended  San  Diego  State  University  where he  studied  Business  as well as
Industrial and Organizational Psychology.




                                       29
<PAGE>




     Jason  A.  Sunstein,  age 31,  is Vice  President  Finance,  Secretary  and
Director of the Company and has held these positions since September 2000. Prior
to joining the Company,  Mr.  Sunstein  held various  executive  positions  with
Tri-National  Development  Corp.,  a  publicly-traded  real  estate  development
company.  Mr. Sunstein resigned from Tri-National on April 1, 2001. Mr. Sunstein
attended San Diego State University where he majored in Finance.

Advisory Board Member

     The Company has  established an Advisory  Board.  Currently the Company has
only one  Advisory  Board  Member but the Company may  increase  the size of the
Board  if  opportunities  arise.  The  Advisory  Board  provides  advice  to the
Company's  management  from time to time and as  requested.  The Company has not
established  any  compensation  arrangements  for the services it receives  from
persons who provide advice in their capacity as Advisory Board Members.

     Paul Goss, age 45, is an Advisory Board Member of the Company. Mr. Goss has
been legal counsel to the Company since  September  2000.  Mr. Goss has been the
Executive  Vice  President and General  Counsel for One Capital  Corporation,  a
private  merchant bank with offices in New York and Denver since 1990.  Prior to
joining Capital One,  Corporation,  Mr. Goss was engaged in the private practice
of law in Denver, Colorado with a concentration in real estate,  corporate,  and
securities law. He is a member of the Denver and Colorado Bar Associations.  Mr.
Goss has a Masters in Business  Administration (degree) in addition to his Juris
Doctor (degree) from the University of Denver.

Compliance with Section 16(a) of the Exchange Act

     Section 16(a) of the Securities  Exchange Act of 1934 (the "Exchange "Act")
requires that the Company's directors,  executive officers,  and persons who own
more than 10% of the Company's Common Stock (collectively, "Covered Persons") to
file  reports of ownership  (Form 3) and reports  changes in ownership of Common
Stock (Forms 4 and Forms 5) with the Securities and Exchange  Commission as well
as the Company and any exchange upon which the Company's Common Stock is listed.

     The Company is required to identify  Covered Persons that the Company knows
have failed to file or filed late  Section  16(a)  reports  during the  previous
fiscal year. To the Company's  knowledge,  the following  Covered Persons during
the fiscal year ended December 31, 2001 failed to file on a timely basis reports
required by Section 16(a) of the Exchange Act:

                                                    No. of Reports Not Filed on
   Name                         Position                a Timely Basis(1)

James G. Wray              President and Director        Forms 3, 4, and 5
John G. Castiglione        Chief Executive Officer       Forms 3, 4, and 5
                           and Director
Jason A. Sunstein          V.P, CFO, Secretary,          Forms 3, 4, and 5
                           and Director

(1)  To the Company's  knowledge,  based solely on a review of the copies of the
     reports furnished to the Company by such persons,  in the fiscal year ended
     December  31,  2001,  such  persons  have  subsequently  filed the  reports
     required by Section 16(a) of the Exchange Act.



                                       30
<PAGE>




Item 10.  Executive Compensation

     The Company's  Board of Directors has  authorized the  compensation  of its
officers with the following annual cash salaries:


                           SUMMARY COMPENSATION TABLE

<TABLE>
----------------- --------- ------------------------------------ ----------------------------------------- -------------
                   Annual Compensation Long-Term Compensation
----------------- --------- ------------------------------------ ----------------------------------------- -------------
                                                                              Awards Payouts
----------------- --------- ------------------------------------ ----------------------------------------- -------------
<S>               <C>        <C>          <C>      <C>           <C>            <C>             <C>         <C>
    Name and                                          Other                                      LTIP
   Principal                  Salary      Bonus       Annual     Restricted     Securities      Payouts
    Position        Year       ($)         ($)     Compen-sation    Stock       Underlying        ($)       All Other
      (a)           (b)        (c)         (d)         ($)         Awards        Options/         (h)      Compen-sation
                                                       (e)           (s) SARs
                                                                     (1) ($) (#)
                                                                     ($) (f) (g)
                                                                     (i)
----------------- --------- ----------- ---------- ------------- ------------ --------------- ------------ -------------
James G. Wray      1999          $0     $0           $0          $0                 0         $0           $0
President, CTO     2000          $0     $0           $0          $0           100,000         $0           $0
and Director       2001          $0     $0           $0          $21,000      150,000         $0           $ 3,375
----------------- --------- ----------- ---------- ------------- ------------ --------------- ------------ -------------
John L.            1999          $0     $0           $0          $0                 0         $0           $0
Castiglione,       2000          $0     $0           $0          $0           100,000         $0           $0
CEO, Treasurer,    2001          $0     $0           $0          $64,000      150,000         $0           $18,469
and Director

Jason A.
Sunstein, V.P.     1999          $0     $0           $0          $0                 0         $0           $0
Finance,           2000          $0     $0           $0          $0           100,000         $0           $0
Secretary and      2001          $0     $0           $0          $64,000      150,000         $0           $15,750
Director

All Directors
as a Group (3
persons)           1999          $0                                                 0
                   2000          $0                                           300,000
                   2001          $0                                           450,000
================= ========= =========== ========== ============= ============ =============== ============ =============
</TABLE>

     With respect to cash salaries,  the Company may change or increase salaries
as the Company's profits and cash flow allow.

Footnote:

(1) The  $3,375  in All  Other  Compensation  paid to James G.  Wray  represents
payment  for  automobile  expenses,  the  $18,469  paid to  John L.  Castiglione
represents  paypment  of  $1,734  as  expense   reimbursement  with  $16,735  as
automobile  expenses,  and the  $15,750  paid to  Jason A.  Sunstein  represents
payment for automobile expenses for automobile expenses.



                                       31
<PAGE>



<TABLE>
                      OPTION/SAR GRANTS IN 2001 FISCAL YEAR

                                             (Fiscal Year Individual Grants)
----------------------------------- -------------------- -------------------- ----------------- --------------------
                                     No. of Securities    Percent of Total
                                        Underlying            Options/
                                       Options/SARs        SARs Granted to
                                         Granted              Employees in       Exercise
                                            (#)              Fiscal Year          Price             Expiration
               Name                                                               ($/Sh)               Date
               (a)                          (b)                  (c)                (d)                 (e)
----------------------------------- -------------------- -------------------- ----------------- --------------------
<S>                                  <C>                  <C>                  <C>               <C>
James G. Wray                             150,000              33.33%               $0.11          12/28/2006

John L. Castiglione                       150,000              33.33%               $0.11          12/28/2006

Jason A. Sunstein                         150,000              33.33%               $0.11          12/28/2006

----------------------------------- -------------------- -------------------- ----------------- --------------------
</TABLE>

     The Company does not currently  compensate its Directors for their services
     as  directors.  The Board of  Directors  did not  include  any  independent
     directors as of December 31, 2001.  Such  Directors will be added as needed
     and at the same time such  directors are appointed or elected,  the Company
     may  institute a system of  compensation  either in the form of  attendance
     fees or option awards.

     With respect to cash salaries,  the Company may change or increase salaries
     as the Company's profits and cash flow allow. The amount of any increase in
     salaries and compensation for existing  officers has not been determined at
     this  time  and the  number  and  dollar  amount  to be paid to  additional
     management staff that will likely be employed has not been determined.





                                       32
<PAGE>




Item 11. Security Ownership of Certain Beneficial Owners and Management

     The  following  table sets forth  information  relating  to the  beneficial
ownership of Company  common stock by those  persons  beneficially  holding more
than 5% of the Company's Common Stock, by the Company's  directors and executive
officers,  and by all of the Company's  directors  and  executive  officers as a
group as of December 31, 2001

<TABLE>
-------------------------------- -------------------------------- ----------------------- ------------------
(1)                              (2)                              (3)                     (4)
                                 Name And                         Amount And
                                 Address Of                       Nature Of
Title Of                         Beneficial                       Beneficial              Percent Of
Class                            Owner                            Owner (1)               Class (1) (2)
-------------------------------- -------------------------------- ----------------------- ------------------
<S>                              <C>                              <C>                     <C>
Common Stock                     James G. Wray                           1,460,000           23.49%
                                 7960 Silverton Avenue, Suite
                                 210
                                 San Diego, California 92126

Common Stock                     John L. Castiglione                     1,963,894(3)        31.60%(3)
                                 7960 Silverton Avenue, Suite
                                 210
                                 San Diego, California 92126

                                 Jason A. Sunstein
Common Stock                     7960 Silverton Avenue, Suite            1,236,000(4)        19.89%(4)
                                 210
                                 San Diego, California 92126

                                 First Pacific Investment
                                 Management
Common Stock                     1666 Garnet Avenue #212                   320,000            5.15%
                                 San Diego, California 92109

Common Stock                     Six-Twenty Marketing, Inc.                440,000            7.08%
                                 1905 South Eastern Ave.
                                 Las Vegas, Nevada 89104

Common Stock                     Tri-National                              400,000            6.44%
                                 c/o 7960 Silverton Avenue
                                 Suite 210
                                 San Diego, California 92126
-------------------------------- -------------------------------- ----------------------- ------------------
Officers and Directors as a
group (3 persons)                                                        4,659,894           74.99%
-------------------------------- -------------------------------- ======================= ==================
</TABLE>

Footnotes:

     (1) "Beneficial Owner" means having or sharing,  directly or indirectly (i)
     voting power,  which includes the power to vote or to direct the voting, or
     (ii) investment power, which includes the power to dispose or to direct the
     disposition,  of shares of the common stock of an issuer. The definition of
     beneficial  ownership  includes  shares  underlying  options or warrants to
     purchase common stock, or other  securities  convertible into common stock,
     that  currently  are   exercisable  or  convertible  or  that  will  become
     exercisable or convertible within 60 days. Unless otherwise indicated,  the
     beneficial owner has sole voting and investment power.

     (2) Percentages are based on 6,214,180  Shares  outstanding on December 31,
     2001 and an  aggregate  of 750,000  shares  purchasable  upon  exercise  of
     certain Common Stock Purchase Options granted to the Company's officers and
     directors  (250,000  shares  purchasable  by James G. Wray,  250,000 shares
     purchasable by John L. Castiglione, and 250,000 shares purchasable by Jason
     A.  Sunstein)  (See  "Option/SAR  Grants in Last  Fiscal  Year" table shown
     above).

     (3) The amount shown includes  556,550 shares of the Company's Common Stock
     held by  Castle-Lion  Corporation,  a  corporation  solely owned by John L.
     Castiglione, an officer and director of the Company.

     (4) The amount shown includes  106,000 shares of the Company's Common Stock
     held by Six-Twenty Capital Management,  Inc., a corporation solely owned by
     Jason A. Sunstein, an officer and director of the Company.



                                       33
<PAGE>




Item 12.  Certain Relationships and Related Transactions.

     Mr.  Sunstein,  the  Company's  Vice  President  Finance and  Secretary and
Director,   was  also  an  officer  of  Tri-National   Development   Corporation
("Tri-National")  from  January  1996 to April 1,  2001.  Tri-National  acquired
3,000,000 shares of the Company's Series B Preferred Stock on September 1, 1998.

     During   September  1998,  the  Company  entered  into  an  agreement  with
Tri-National  Development,  Inc.  ("Tri-National")  to purchase 50 acres of real
property  known as the  Hills of  Bajamar,  located  in  Ensenada,  Mexico.  The
property was valued at a predecessor  cost of $125,000.  The Company intended to
sell lots for residential  development and build a  communications  facility for
residents in the surrounding  area. As  consideration  for the land, the Company
issued 3,000,000 shares of its Series B Preferred Stock to Tri-National. On June
30, 2001, all of the Series B Preferred  Stock was converted into 400,000 shares
of the  Company's  Common  Stock.  As of December 31, 2001,  the Company had not
received clear title to the land.

     During 2000,  Casteglion  Corporation,  a private company  ("Castle-Lion")
owned by John L.  Castiglione,  a Company  officer  and  director,  advanced  an
aggregate of $5,655 in paying certain expenses incurred by the Company. In March
2001,  the  Company  issued  56,550  shares  of the  Company's  Common  Stock to
Castle-Lion to extinguish this accounts payable.

     During 2000, Jason A. Sunstein, a Company officer and director, advanced an
aggregate of $1,820 to the Company in paying  certain  expenses  incurred by the
Company. The Company later repaid Mr. Sunstein.

     In early 2001, the Company issued a promissory note in the principal amount
of $13,667 due a former officer of the Company. The note accrues interest at 15%
per annum, is unsecured, and is payable on or before June 30, 2001.

     In July of 2001,  the Company  entered into an oral lease for the rental of
office  space from Jason A.  Sunstein,  an officer and  director of the Company,
which required that the Company pay Mr.  Sunstein the sum of $1,100 per month in
paypment for all office space and  utilities  thereunder  with this  arrangement
continuing  through December 2003  (inclusive).  While the Company believes that
the office  arrangement  with Mr.  Sunstein was undertaken on terms that were no
different  thatn  those that the Company  could have  obtained in an arms length
transaactionw ith an unrelated third party, the Company completed only a limited
evaluation of other alternatives.

     During  2001,  Six-Twenty-Capital   Management,  Inc.,  a  private  company
("Six-Twenty  Capital")  owned by Jason  A.  Sunstein,  a  Company  officer  and
director, purchased an aggregate of 106,000 shares of the Company's Common Stock
at a purchase  price of $0.10 per  share.  The  Company's  sale of the shares to
Six-Twenty  Capital  was  undertaken  on the same  terms as others  during  this
period.

     During 2001, Six-Twenty Capital Management,  Inc. ("Six-Twenty Capital"), a
private  company  owned by Jason A.  Sunstein,  a Company  officer and director,
purchased  an  aggregate  of 106,000  shares of the  Company's  Common Stock for
$10,000 on terms consistent with other cash sales of the Company's Common Stock.

     As a result of several  transactions,  Jason A.  Sunstein,  an officer  and
director of the Company,  paid certain of the Company's  expenses  which totaled
$4,587 during the twelve months ended December 31, 2001,  totaling  $6,407 as of
December 31, 2001.  The Company  subsequently  repaid Mr.  Sunstein all of these
amounts.

     Further and as a result of several  transactions,  John L. Castiglione,  an
officer and director of the  Company,  paid  certain of the  Company's  expenses
which  totaled  $3,352  during the yrear ending  December 31, 2001.  The Company
subsequently repaid Mr. Castiglione all of these amounts.




                                       34
<PAGE>




Item 13.   Exhibits and Reports on Form 8-K

(a)  The following Exhibits are attached or incorporated by reference, as stated
     below.

     3.1(a)  Articles of Amendment to Articles of  Incorporation  of  Tinglefoot
Mining, Inc.*

     3.1(b)  Articles  of  Amendment  to  Articles  of  Incorporation  of Mexico
Investment Corporation*

     3.1(c)  Articles of  Amendment  to the  Articles of  Incorporation  of Baja
Pacific International, Inc.*

     3.1(d) Articles of Incorporation of Taig Ventures, Inc.

     3.3  By-Laws for Viper Networks, Inc.*

     10.1 Securities Purchase Agreement and Plan of Reorganization*

     10.2 Viper Networks, Inc. 2000 Equity Incentive Plan*

     10.3 Employment Agreement (Wray)*

     10.4 Employment Agreement (Castiglione)*

     10.5 Employment Agreement (Sunstein)*

     10.6 Agreement of Purchase and Sale of Assets (between Viper Networks, Inc.
          And Tri-National Development Corporation)*

     10.7 Addendum to the Agreement of Purchase and Sale of Assets Between Viper
          Networks, Inc. And Tri-National Development Corporation*

     10.8 Settlement  Agreement  And General  Release of Claims  (between  Viper
          Networks, Inc. And Tri-National Development Corporation)*

     10.9 Month-to-Month Industrial Lease

     23.1 Consent of Independent Accountants, H.J. & Associates, LLC

     23.2 Consent of Independent Accountants, Armondo C.Ibaarro, C.P.A., P.C.

     31.1 Certification by Chief Executive Officer

     31.2 Certification by Chief Financial Officer

     32.1 Certification  by Chief Executive  Officer of the Company  Pursuant to
          Section 906 of the Sarbanes-Oxley Act of 2002.

     32.2 Certification  by Chief Financial  Officer of the Company  Pursuant to
          Section 906 of the Sarbanes-Oxley Act of 2002.

     *Previously filed with Form 10-SB or 10-SB-Amendment No. 1 and incorporated
          herein by reference.


     (b)  The Company  filed the  following  Reports on Form 8-K during the year
          ending December 31, 2001: None.

Item 14.   Principal Accountant Fees and Services.

Audit Fees

     The  anticipated  fees to Arnabdo C. Ibarra,  CPA,  P.C.  for  professional
services rendered for the audit of the Company's annual financial statements for
the fiscal year ended  December  31,  2001 and for the reviews of the  financial
statements  included in the Company's  Quarterly Reports on Form 10-QSB for that
fiscal year are estimated at $8,000.  No other fees for  audit-related  services
were  billed or paid to Armando  C.Ibarra,  CPA,  P.C.  Audit  related  services
generallty include fees for accounting  consultations,  busienss acquisitios and
work related thereto.




                                       35
<PAGE>




     In  addition,  the  Company  paid HJ &  Associates,  LLC  for  professional
services rendered for the audit of the Company's annual financial statements for
the fiscal year ended December 31, 2000 the sum of $13,726.96.  The Company also
paid HJ &  Associates,  LLC the sum of  $3,663.40  in fees for  planning for the
anticipated  audit of the Company's annual  financial  statements for the fiscal
years ended December 31, 2001, 2002 and 2003 (which  preceded their  resignation
in 2004).

Audit Committee Charter

     The Company  intends to establish an Audit Committee of the Company's Board
of Directors and thereb to establish a Charter for the Audit Committee.  For the
year  ending  December  31,  2001 and due to limited  financial  resources,  the
Company has  delayed the  implemention  of these plans  untilsuch  later date at
which the Company may have the financial resources available.

Audit Committee Report

     Since the Company did not  estaslibh an Audit  Committe for the year ending
December 31, 2001, no Audit Committee for this period is available.

                                   SIGNATURES

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

Viper Networks, Inc.



By: /s/John G. Castiglione                             Date: March ___, 2005
   -----------------------
     John G. Castiglione
     Chief Executive Officer
     & Treasurer


By: /s/ Jason A. Sunstein                           Date:  March  ____, 2005
   ----------------------
     Jason A. Sunstein
     Vice President Finance
     & Secretary


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



By: /s/John G. Castiglione                             Date: March ___, 2005
   -----------------------
     John G. Castiglione
     Chief Executive Officer,
     Treasurer & Director


By: /s/ Jason A. Sunstein                           Date:  March  ____, 2005
   ----------------------
     Jason A. Sunstein
     Vice President Finance,
     Secretary & Director






                                       36
<PAGE>
                         Index to Financial Statements

Reports of Independent Registered Public Accounting Firm................... F-2

Consolidated Balance Sheet as of December 31, 2001......................... F-4

Consolidated Statements of Operations for the Years Ended
December 31, 2001 and 2000 and from Inception on September 14,
2000 through December 31, 2001............................................. F-5

Consolidated Statements of Stockholders' Deficit for the Years
Ended December 31, 2001 and 2000 and from Inception on
September 14, 2000 through December 31, 2001............................... F-6

Consolidated Statements of Cash Flows for the Years Ended
December 31, 2001 and 2000 and from Inception on September 14,
2000 through December 31, 2001............................................. F-7

Notes to the Consolidated Financial Statements............................. F-8


<PAGE>






             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM


To the Board of Directors
Viper Networks, Inc.
(A Development Stage Company)
10373 Roselle Street, Suite 170
San Diego, CA 92121

We have audited the accompanying  consolidated  balance sheet of Viper Networks,
Inc. and subsidiaries (A Development Stage Company) of December 31, 2001 and the
related consolidated  statements of operations,  changes in shareholders' equity
and cash flow 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.  The  consolidated  financial  statements of Viper  Networks,  Inc. as of
December 31, 2000,  were audited by other  auditors  whose report dated December
10, 2004  expressed an  unqualified  opinion on those  statements.  Their report
included an explanatory paragraph regarding going concern.

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 Viper
Networks,  Inc.,  and  subsidiaries  as of December 31, 2001, and the results of
their  operations and its cash flows for the year then ended in conformity  with
U.S. generally accepted accounting principles.

The accompanying  consolidated  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's losses from operations 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/ Armando C. Ibarra
__________________________
ARMANDO C. IBARRA, CPA
February 19, 2005
Chula Vista, Ca. 91910


                                       F-2
<PAGE>

Board of Directors
Viper Networks, Inc. and Subsidiary
(A Development Stage Company)
San Diego, California

We  have  audited  the  accompanying   consolidated  statements  of  operations,
stockholders'  equity  (deficit) and cash flows for the period from inception at
September  14, 2000  through  December  31,  2000 of Viper  Networks,  Inc.  and
Subsidiary (formerly Taig Ventures,  Inc.) (a development stage company).  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  auditing  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
consolidated  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  consolidated  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 Viper
Networks,  Inc. and Subsidiary  (formerly  Taig  Ventures,  Inc.) (a development
stage  company) as of December 31, 2000, and the  consolidated  results of their
operations  and their cash flows for the period from  inception on September 14,
2000 through December 31, 2000, in conformity with generally accepted accounting
principles.

The accompanying  consolidated  financial statements have been prepared assuming
the Company  will  continue as a going  concern.  As  discussed in Note 2 to the
consolidated  financial  statements,  the Company is a development stage company
with no significant operating results since inception, raising substantial doubt
about its ability to continue as a going concern.  Management's  plans in regard
to these  matters  are also  described  in Note 2.  The  consolidated  financial
statements do not include any adjustments  that might result from the outcome of
this uncertainty.

HJ & Associates, LLC
Salt Lake City, Utah
December 10, 2004






                                       F-3
<PAGE>
                       VIPER NETWORKS, INC. AND SUBSIDIARY
                          (A Development Stage Company)
                           Consolidated Balance Sheet


<TABLE>
<CAPTION>
                                                                                                  December 31,
                                                                                                      2001
                                                                                               ------------------
<S>                                                                                              <C>
                                     ASSETS

Current Assets:
   Cash                                                                                        $             105
                                                                                               ------------------
     Total current assets                                                                                    105
Property and equipment, net (Note 3)                                                                      19,786
                                                                                               ------------------

     Total assets                                                                              $          19,891
                                                                                               ==================


                      LIABILITIES AND STOCKHOLDERS' DEFICIT

Current liabilities:
   Accounts payable                                                                            $           4,866
   Accrued liabilities (Note 3)                                                                          167,360
   Accounts payable to related party (Note 6)                                                             16,359
   Note with related party (Note 6)                                                                       15,000
   Taxes payable                                                                                           1,265
   Capital lease obligations, current portion (Note 5)                                                    20,305
   Stock subscription deposit (Note 7)                                                                     2,459
                                                                                               ------------------
     Total current liabilities                                                                           227,614
                                                                                               ------------------
Commitments and Contingencies (Note 9)                                                                         -

Stockholders deficit:
   Preferred stock: Class A, authorized 100,000 shares at
     $1.00 par value, -0- shares issued and outstanding (Note 10)                                              -
   Preferred stock: Class B, authorized 10,000,000 shares at
     $1.00 par value, -0- shares issued and outstanding (Note 10)                                              -
   Common stock: 100,000,000 shares authorized of
     $0.001 par value, 6,214,180 shares issued and outstanding                                             6,214
   Additional paid-in capital (deficit)                                                                  316,200
   Stock subscription receivable (Note 4)                                                               (125,000)
   Accumulated deficit                                                                                  (405,137)
                                                                                               ------------------
     Total stockholders' deficit                                                                        (207,723)
                                                                                               ------------------

     Total liabilities and stockholders' deficit                                                          19,891
                                                                                               ==================
</TABLE>



              The accompanying notes are an integral part of these
                       consolidated financial statements.
                                       F-4
<PAGE>
                       VIPER NETWORKS, INC. AND SUBSIDIARY
                          (A Development Stage Company)
                      Consolidated Statements of Operations

<TABLE>
<CAPTION>
                                                                                                        From Inception on
                                                                              Year ended            September 14, 2000 Through
                                                                             December 31,                  December 31,
                                                                           ------------------   ------------------------------------
                                                                                  2001                 2000                2001
                                                                           -------------------  -----------------   ----------------
<S>                                                                        <C>                   <C>                <C>
General and Administrative                                                 $          354,666    $         38,852   $       393,518
                                                                           -------------------   -----------------  ----------------
Loss from Operations                                                                 (354,666)            (38,852)         (393,518)
                                                                           -------------------   -----------------  ----------------
Other Income (expenses)
     Realized loss on marketable securities                                            (5,083)                  -            (5,083)
     Interest expense                                                                   (6384)               (256)           (6,640)
     Other income                                                                         104                   -               104
                                                                           -------------------   -----------------  ----------------
       Total other income (expenses)                                                  (11,363)               (256)          (11,619)
                                                                           -------------------   -----------------  ----------------
Net Loss                                                                   $         (366,029)   $        (39,108)  $      (405,137)
                                                                           ===================   =================  ================
Basic Loss Per Share                                                       $            (0.08)   $          (0.02)  $         (0.11)
                                                                           ===================   =================  ================
Weighted Average Number of
   Shares Outstanding                                                               4,397,939           1,855,506         3,821,582
                                                                           ===================   =================  ================
</TABLE>

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



                       VIPER NETWORKS, INC. AND SUBSIDIARY
                          (A Development Stage Company)
                Consolidated Statements of Stockholders' Deficit

<TABLE>
<CAPTION>
                                                                                                            Deficit
                                                                                  Additional              Accumulated
                                                                                   Paid-In       Stock     During the     Total
                                       Preferred Stock          Common Stock       Capital   Subscriptions Development Stockholders'
                                    Shares        Amount      Shares     Amount   (Deficit)   Receivable      Stage       Deficit
                                 ------------   ----------- ---------- --------- ------------ -----------  ----------- -------------
<S>                               <C>           <C>          <C>       <C>        <C>          <C>         <C>          <C>
Balance, September 14, 2000
   (inception)                             -    $        -           - $      -  $        -   $        -   $       -     $        -

Common stock issued to
   founders for cash at $0.00
   per share                               -             -   3,000,000    3,000       (3,000)          -           -              -

Recapitalization                   3,000,000     3,000,000     565,786      566   (2,902,991)   (125,000)          -        (27,425)

Net loss from September 14, 2000
  to December 31, 2000                     -             -           -        -            -           -      (39,108)      (39,108)
                                 ------------   ----------- ---------- --------- ------------ -----------  -----------  ------------

Balance, December 31, 2000         3,000,000     3,000,000   3,565,786    3,566   (2,905,991)   (125,000)     (39,108)      (66,533)

Issuance of common stock
   for cash                                -             -     606,000      606       59,994           -            -        60,600

Issuance of common stock
   for related party accounts
   payable                                 -             -      56,550       56        5,599           -            -         5,655

Issuance of common stock
   for services                            -             -   1,585,844    1,586      156,998           -            -       158,584

Conversion of preferred stock
   to Common Stock                (3,000,000)   (3,000,000)    400,000      400    2,999,600           -            -             -

Net loss for the year ended
   December 31, 2001                       -             -           -        -            -           -     (366,029)     (366,029)
                                 ------------   ----------- ---------- --------- ------------ -----------  -----------  ------------
Balance, December 31, 2001                 -    $        -   6,214,180  $ 6,214  $   316,200  $ (125,000)  $ (405,137)  $  (207,723)
                                 ============   =========== ========== ========= ============ ===========  ===========  ============
</TABLE>


              The accompanying notes are an integral part of these
                       consolidated financial statements.
                                       F-6
<PAGE>
                       VIPER NETWORKS, INC. AND SUBSIDIARY
                          (A Development Stage Company)
                      Consolidated Statements of Cash Flows

<TABLE>
<CAPTION>
                                                                                                        From Inception on
                                                                              Year ended            September 14, 2000 Through
                                                                             December 31,                  December 31,
                                                                           ------------------   ------------------------------------
                                                                                  2001                 2000                2001
                                                                           -------------------  -----------------  -----------------
<S>                                                                         <C>                   <C>               <C>
Cash flows from operating activities:
Net loss                                                                   $         (366,029)   $      (39,108)  $        (405,137)
Adjustments to reconcile net loss to net cash
   used in operations:
     Depreciation                                                                       4,558                 -               4,558
     Amortization of notes payable discount                                             1,078               256               1,334
     Interest accrual                                                                   3,442                 -               3,442
     Stock based compensation                                                         302,797                 -             302,797
     Loss on sale of marketable securities                                              5,083                 -               5,083
     Changes in assets and liabilities:
       Accounts payable                                                                (8,480)                -              (8,480)
       Accrued professional fees                                                                         22,500              22,500
       Accounts payable related party                                                  15,185             7,475              22,660
       Taxes payable                                                                      819                 -                 819
                                                                           -------------------   ---------------  ------------------
         Net cash used in operating activities                                        (41,547)           (8,877)            (50,424)
                                                                           -------------------   ---------------  ------------------
Cash flows from investing activities:
     Purchases of office furniture and equipment                                       (5,777)                -              (5,777)
     Purchases of marketable securities                                               (15,044)                -              15,044)
     Sales of marketable securities                                                     9,961                 -               9,961
                                                                           -------------------   ---------------  ------------------
         Net cash used in investing activities                                        (10,860)                -             (10,860)
                                                                           -------------------   ---------------  ------------------
Cash flows from financing activities:
     Proceeds from issuance of common stock                                            60,600                 -              60,600
     Increase (decrease) in cash overdraft                                             (7,343)            7,343                   -
     Cash acquired in reverse acquisition                                                                    34                  34
     Payments on capital lease obligations                                             (1,704)                -              (1,704)
     Stock subscription deposits                                                          959             1,500                2459
                                                                           -------------------   ---------------  ------------------
         Net Cash Provided by Financing Activities                                     52,512             8,877              61,389
                                                                           -------------------   ---------------  ------------------
Net increase in cash                                                                      105                 -                 105
Cash at the beginning of the period                                                         -                 -                   -
                                                                           -------------------   ---------------  ------------------
Cash at the end of the period                                              $              105    $            -   $             105
                                                                           ===================   ===============  ==================

Supplemental schedule of cash flow activities
   Cash paid for:
     Interest                                                              $            1,865    $            -   $           1,865
     Income taxes                                                          $                -    $            -   $               -
   Non-cash investing and financial activities:
     Equipment acquired by capital lease                                   $            8,431    $       10,136   $          18,567
     Common stock issued in payment of services                            $          158,584    $            -   $         158,584
     Common stock issued in payment of accounts
       payable to related party                                            $            5,655    $            -   $           5,655
     Recapitalization resulting from reverse merger                        $                -    $      (27,425)  $         (27,425)
</TABLE>

              The accompanying notes are an integral part of these
                       consolidated financial statements.
                                      F-7
<PAGE>
                       VIPER NETWORKS, INC. AND SUBSIDIARY
                          (A Development Stage Company)
                 Notes to the Consolidated Financial Statements


NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

          a.   Organization

               The  consolidated  financial  statements  presented  are those of
               Viper  Networks,  Inc.  and its  wholly-owned  Subsidiaries  (the
               "Company").

               The Company has had limited  activities  since  inception  and is
               considered a development  stage company  because no revenues have
               been  realized  and  planned  principal  operations  have not yet
               commenced.  The Company was formed to design,  develop and market
               full service  integration  and worldwide  Internet  Protocol (IP)
               telephony services.  As of December 31, 2001, the Company has not
               commenced its principal planned operations. The ultimate recovery
               of  investments  and  costs is  dependent  on  future  profitable
               operations, which presently cannot be determined.

               Viper Networks,  Inc.  ("Viper-CA") was incorporated on September
               14,  2000  under  the  laws  of the  State  of  California.  Taig
               Ventures,  Inc.  ("Taig") was incorporated  under the laws of the
               State of Utah on February 28, 1983.

               On November  15, 2000,  Taig and Viper-CA  completed a Securities
               Purchase Agreement and Plan of Reorganization whereby Taig issued
               36,000,000 pre-split or 3,000,000 post-split shares of its common
               stock in  exchange  for all of the  outstanding  common  stock of
               Viper-CA.  Immediately prior to the Securities Purchase Agreement
               and Plan of  Reorganization,  Taig  had  6,788,507  pre-split  or
               565,786 post-split shares of common stock and 3,000,000 shares of
               non-voting preferred stock issued and outstanding. For accounting
               purposes,  the acquisition has been treated as a recapitalization
               of Viper-CA with Viper-CA as the acquirer (reverse  acquisition).
               Viper-CA  was treated as the  acquirer  for  accounting  purposes
               because the  shareholders  of Viper-CA  controlled Taig after the
               acquisition.   The  historical   financial  statements  prior  to
               November 15, 2000 are those of Viper-CA.

               On December  29, 2000,  Taig changed its name to Viper  Networks,
               Inc. ("Viper-UT") and authorized a reverse split of the Company's
               common stock on a 1-for-12 basis.

          b.   Basis of presentation

               The  Company's  consolidated  financial  statements  are prepared
               using the accrual method of accounting  and include  Viper-CA and
               its  wholly-owned  subsidiaries.   All  significant  intercompany
               accounts and transactions have been eliminated.







                                      F-8
<PAGE>
               VIPER NETWORKS, INC. AND SUBSIDIARY AND SUBSIDIARY
                          (A Development Stage Company)
                 Notes to the Consolidated Financial Statements


NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

          c.   Estimates

               The  preparation  of  financial  statements  in  conformity  with
               generally accepted  accounting  principles 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 date of the consolidated  financial statements
               and the  reported  amounts of revenues  and  expenses  during the
               reporting   period.   Actual  results  could  differ  from  those
               estimates.

          d.   Property and equipment

               Property  and  equipment  are stated at cost and are  depreciated
               over their estimated useful lives using the straight-line method.
               Useful lives range from three to five years for office  furniture
               and equipment.  Additions to property and equipment together with
               major  renewals and  betterments  are  capitalized.  Maintenance,
               repairs and minor renewals and betterments are charged to expense
               as incurred.

          e.   Long lived assets

               All long lived assets are  evaluated  yearly for  impairment  per
               Statement of Financial  Accounting Standards No. 121 ("SFAS 121",
               "Accounting  for  the  Impairement  of  Long-Live   Assets."  Any
               impairment  in value is  recognized  as an  expense in the period
               when the impairment occurs.

          f.   Revenue recognition

               The Company will  recognize  revenues  and the related  costs for
               voice,  data and other  services  along with  product  sales when
               persuasive  evidence  of  an  arrangement  exists,  delivery  has
               occurred  or  service  has  been  rendered,  the fee is  fixed or
               determinable,  and  collection  of the  resulting  receivable  is
               probable.  Support and maintenance  sales will be recognized over
               the contract term.  Amounts  invoiced and collected in advance of
               product  or  services  provided  will  be  recorded  as  deferred
               revenue.  The Company plans to accrue for warranty  costs,  sales
               returns, and other allowances based on its experience.

          g.   Stock-based compensation

               Statement of Financial Accounting Standards No. 123 ("SFAS 123"),
               "Accounting for Stock-Based  Compensation",  provides for the use
               of a fair value based method of













                                      F-9
<PAGE>
                       VIPER NETWORKS, INC. AND SUBSIDIARY
                          (A Development Stage Company)
                 Notes to the Consolidated Financial Statements


NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

          g.   Stock-based compensation (continued)

               accounting for stock-based compensation. However, SFAS 123 allows
               the measurement of compensation cost for stock options granted to
               employees   using  the  intrinsic   value  method  of  accounting
               prescribed  by Accounting  Principles  Board Opinion No. 25 ("APB
               25"),  "Accounting  for Stock  Issued to  Employees",  which only
               requires charges to compensation  expense for the excess, if any,
               of the  fair  value of the  underlying  stock at the date a stock
               option is granted (or at an  appropriate  subsequent  measurement
               date) over the amount the employee must pay to acquire the stock.
               The Company has elected to account  for  employee  stock  options
               using the  intrinsic  value  method  under APB 25. By making that
               election,  the  Company is  required  by SFAS 123 to provide  pro
               forma  disclosures of net loss as if a fair value based method of
               accounting had been applied.

               In  accordance  with  the  provisions  of  SFAS  123,  all  other
               issuances of stock,  stock options or other equity instruments to
               employees and  non-employees  as the  consideration  for goods or
               services  received by the Company are  accounted for based on the
               fair value of the equity instrument issued (unless the fair value
               of the  consideration  received can be more  reliably  measured).
               During the year ended December 31, 2001,  the Company  recognized
               $101,688 and $207,110 of expense  relating to the grant of common
               stock to non-employees and employees,  respectively, for services
               which is included in the accompanying  consolidated statements of
               operations.  The value of these shares was determined  based upon
               the sale of common stock in the private placement during the same
               period.

          h.   Income taxes

               Current  income  tax  expense  (benefit)  is the amount of income
               taxes expected to be payable (receivable) for the current year. A
               deferred  tax asset  and/or  liability  is computed  for both the
               expected  future  impact of  differences  between  the  financial
               statement  and tax bases of assets  and  liabilities  and for the
               expected  future tax benefit to be derived  from tax loss and tax
               credit carry  forwards.  Deferred income tax expense is generally
               the net change  during the year in the deferred  income tax asset
               and  liability.   Valuation   allowances  are  established   when
               necessary to reduce deferred tax assets to the amount expected to
               be "more  likely then not"  realized in future tax  returns.  Tax
               rate  changes are  reflected in income in the period such changes
               are enacted.

          i.   Net loss per share

               Basic net loss per share is computed  using the weighted  average
               number of common shares outstanding during the periods presented.
               Diluted loss per share has not been presented because the assumed
               exercise of the Company's  outstanding options and warrants would
               have  been  antidilutive.  Options  and/or  warrants  will have a
               dilutive  effect only when the average market price of the common
               stock during the period exceeds the exercise price of the options
               and/or warrants. There were options to purchase 750,000



                                      F-10
<PAGE>
                       VIPER NETWORKS, INC. AND SUBSIDIARY
                          (A Development Stage Company)
                 Notes to the Consolidated Financial Statements


NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

          i.   Net loss per share (continued)

               shares of common stock and zero warrants  potentially issuable at
               December 31, 2001 which were not included in the  computation  of
               net loss per share.

<TABLE>
<CAPTION>
                                                                                                        From Inception on
                                                                              Year ended            September 14, 2000 Through
                                                                             December 31,                  December 31,
                                                                           ------------------   ------------------------------------
                                                                                  2001                 2000                2001
                                                                           -------------------  -----------------  -----------------
<S>                                                                        <C>                   <C>               <C>
                      Net loss (numerator)                                 $         (366,029)  $       (39,108)   $       (405,137)

                      Weighted average shares
                          outstanding for basic net
                          loss per share (denominator)                               4,397,939        1,855,506           3,821,582
                                                                           -------------------  -----------------  -----------------

                      Per share amount                                     $            (0.08)  $         (0.02)   $          (0.11)
                                                                           ===================  =================  =================
</TABLE>

          j.   Concentrations of Risk - Foreign Operations

               The Company owns 50 acres of real property where it plans to sell
               lots  for  residential  development  and  build a  communications
               facility.   The  property  is  located  in  Mexico  which  has  a
               developing economy.  Hyperinflation,  volatile exchange rates and
               rapid political and legal change,  often  accompanied by military
               insurrection, have been common in this and certain other emerging
               markets in which the Company may conduct operations.  The Company
               may be  materially  adversely  affected by possible  political or
               economic  instability in Mexico.  The risks include,  but are not
               limited  to  terrorism,   military   repression,   expropriation,
               changing  fiscal  regimes,   extreme   fluctuations  in  currency
               exchange  rates,  high  rates of  inflation  and the  absence  of
               industrial   and   economic   infrastructure.   Changes  in  land
               development  or investment  policies or shifts in the  prevailing
               political  climate in Mexico in which the  Company  plans to sell
               lots  for  residential  development  and  build a  communications
               facility   could   adversely   affect  the  Company's   business.
               Operations  may be  affected  in varying  degrees  by  government
               regulations  with  respect  to  development  restrictions,  price
               controls, export controls, income and other taxes,  expropriation
               of property,  maintenance of claims,  environmental  legislation,
               labor, welfare,  benefit policies, land use, land claims of local
               residents, water use and mine safety. The effect of these factors
               cannot be accurately predicted.

          k.   New Accounting Pronouncements

               In June 2001 the Financial  Accounting  Standards  Board ("FASB")
               issued Statement of Financial  Accounting  Standards ("SFAS") No.
               141, "Business  Combinations".  SFAS No. 141 addresses  financial
               accounting and reporting for business combinations and supersedes
               APB Opinion No. 16, Business Combinations, and FASB Statement No.
               38,  Accounting  for  Preacquisition  Contingencies  of Purchased
               Enterprises.  All  business  combinations  in the  scope  of this
               Statement are to be accounted for using one method,  the purchase
               method.  The  provisions of this  Statement are effective for all
               business  combinations   initiated  after  June  30,  2001.  This
               accounting  pronouncement  is not  expected  to  have a  material
               impact  on  the  Company's   financial  position  or  results  of
               operations.

                                      F-11
<PAGE>
                       VIPER NETWORKS, INC. AND SUBSIDIARY
                          (A Development Stage Company)
                 Notes to the Consolidated Financial Statements


NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

          k.   New Accounting Pronouncements (continued)

               In June 2001 the FASB issued SFAS No.  142,  "Goodwill  and Other
               Intangible Assets".  SFAS No. 142 addresses financial  accounting
               and reporting for acquired  goodwill and other intangible  assets
               and  supersedes  APB  Opinion  No.  17,  Intangible   Assets.  It
               addresses how intangible assets that are acquired individually or
               with a group  of  other  assets  (but  not  those  acquired  in a
               business  combination)  should  be  accounted  for  in  financial
               statements upon their acquisition.  This Statement also addresses
               how goodwill and other intangible  assets should be accounted for
               after  they  have  been  initially  recognized  in the  financial
               statements.  The  provisions of this  Statement are effective for
               financial  statements  issued for fiscal  years  beginning  after
               December 15, 2001. This accounting  pronouncement is not expected
               to have a material impact on the Company's  financial position or
               results of operations.

               In August 2001 the FASB issued SFAS No. 144,  "Accounting for the
               Impairment  or  Disposal  of  Long-Lived  Assets".  SFAS No.  144
               addresses  financial  accounting and reporting for the impairment
               or  disposal  of  long-lived  assets,  supersedes  SFAS No.  121,
               Accounting  for  the  Impairment  of  Long-Lived  Assets  and for
               Long-Lived  Assets to Be Disposed Of,  supersedes  the accounting
               and  reporting  provisions  of APB Opinion No. 30,  Reporting the
               Results of  Operations--Reporting  the  Effects of  Disposal of a
               Segment  of  a   Business,   and   Extraordinary,   Unusual   and
               Infrequently Occurring Events and Transactions,  for the disposal
               of a  segment  of a  business  (as  previously  defined  in  that
               Opinion),   and  amends  ARB  No.  51,   Consolidated   Financial
               Statements,  to eliminate  the exception to  consolidation  for a
               subsidiary  for which  control  is likely  to be  temporary.  The
               provisions   of  this   Statement  are  effective  for  financial
               statements  issued for fiscal years  beginning after December 15,
               2001,  and  interim  periods  within  those  fiscal  years.  This
               accounting  pronouncement  is not  expected  to  have a  material
               impact  on  the  Company's   financial  position  or  results  of
               operations.


NOTE 2 - GOING CONCERN

               The  Company's  consolidated  financial  statements  are prepared
               using generally accepted  accounting  principles  applicable to a
               going concern which  contemplates  the  realization of assets and
               liquidation of liabilities in the normal course of business.  The
               Company has incurred a loss from  inception on September 14, 2000
               through  December 31, 2001,  which has resulted in an accumulated
               deficit of $405,137 at December  31, 2001 and has no  significant
               operations  which raises  substantial  doubt about the  Company's
               ability  to  continue  as  a  going  concern.   The  accompanying
               consolidated  financial statements do not include any adjustments
               relating  to  the  recoverability  and  classification  of  asset
               carrying amounts or the amount and  classification of liabilities
               that might result from the outcome of this uncertainty.

               It is the intent of  management  to develop and provide voice and
               data  services  to  Web-based   customers   and  then   construct
               Voice-over-Internet    Protocol    networks    for    businesses,
               institutions,  and Internet  Service  Providers  (ISP) to develop
               strategic  partnerships to resell the Company's  various products
               and services to the ISP's existing  customer  base.  During 2001,
               the  Company  signed  its first  contract  for its VIPER  CONNECT
               product.



                                      F-12
<PAGE>
                       VIPER NETWORKS, INC. AND SUBSIDIARY
                          (A Development Stage Company)
                 Notes to the Consolidated Financial Statements


NOTE 2 - GOING CONCERN (Continued)

               The  Company   also  plans  to  have   Tri-National   Development
               Corporation  include the 50 acres of real  property  owned by the
               Company in the remainder of the Hills of Bajamar property for the
               purposes of selling the entire property to a third party.

               Company  management  will seek additional  financing  through new
               stock  issuances  and lines of  credit.  In  December  2000,  the
               Company  authorized  the  private  placement  and  sale  of up to
               750,000 shares of common stock at $0.10 per share.

               The Company  expects to need  $100,000 to cover its  expenses for
               the next twelve months.

NOTE 3 - COMPOSITION OF CERTAIN FINANCIAL STATEMENT CAPTIONS

                                                                   December 31,
                                                                       2001
                                                                ----------------
    Property and equipment, net:
      Computer equipment                                        $        24,344
      Less accumulated depreciation and amortization                     (4,558)
                                                                ----------------
                                                                $        19,786
                                                                ================
    Accrued liabilities:
      Accrued professional fees                                 $        22,500
      Accrued compensation                                              144,860
                                                                ----------------
                                                                $       167,360
                                                                ================

NOTE 4 - STOCK SUBSCRIPTION RECEIVABLE

               During September 1998, the Company entered into an agreement with
               a related  party to purchase 50 acres of real  property  known as
               the Hills of Bajamar, located in Ensenada,  Mexico that is valued
               at  predecessor  cost of $125,000.  The Company  intended to sell
               lots  for  residential  development  and  build a  communications
               facility for residents in the surrounding area.

               As  consideration  for the land,  the  Company  issued  3,000,000
               shares of its  series B  Preferred  Stock and stock  warrants  to
               purchase  1,000,000  shares of Common  Stock.  During  June 2001,
               Company  negotiated  a  settlement  and release  with the Class B
               preferred  stockholder  whereby  the  Preferred  Stock  and stock
               warrants  were  exchanged  for  400,000  shares of the  Company's
               Common  Stock  and the  cumulative  undeclared  dividend  was not
               declared.









                                      F-13
<PAGE>
                       VIPER NETWORKS, INC. AND SUBSIDIARY
                          (A Development Stage Company)
                 Notes to the Consolidated Financial Statements


NOTE 4 - STOCK SUBSCRIPTION RECEIVABLE (Continued)

               As of the date of these financial statements, the Company had not
               received clear title to the land.  Accordingly,  the value of the
               land has been classified as a stock subscription receivable.  The
               400,000 share certificate is being held by the Company.

NOTE 5 - CAPITAL LEASES

               The  Company  leases  certain   equipment   under  capital  lease
               obligations with terms through December 2004. The following is an
               analysis of the net book value of the leased  assets  included in
               property and equipment:

                                                                 December 31,
                                                                    2001
                                                              -----------------
                      Computer equipment                      $         18,567
                      Less accumulated amortization                     (3,592)
                                                              -----------------
                                                              $         14,975
                                                              =================

               The future  minimum lease payments under these capital leases and
               the net present value of the future minimum lease payments are as
               follows:

                     Year ending December 31                           Amount
                     -----------------------                       -------------
                               2002                                $     11,003
                               2003                                       7,826
                               2004                                       4,511
                                                                   -------------
                      Total future minimum lease payments                23,340
                                                                   -------------
                      Less amount representing interest                  (6,477)
                                                                   -------------
                      Present value of future minimum lease
                       payments                                    $     16,863
                                                                   =============






                                      F-14
<PAGE>
                       VIPER NETWORKS, INC. AND SUBSIDIARY
                          (A Development Stage Company)
                 Notes to the Consolidated Financial Statements


NOTE 5 - CAPITAL LEASES (continued)

               December 31, 2001,  the Company was  delinquent in the payment of
               both capital leases and was in default on the capital leases. The
               present value of future  minimum lease payments has been recorded
               in the  accompanying  consolidated  balance  sheet  as a  current
               liability.  The Company  accrued  $3,442 of interest as a current
               liability based on a subsequent settlement agreement entered into
               with the lessor.

NOTE 6 - RELATED PARTY TRANSACTIONS

               During fiscal 2001, the Company's  shareholders incurred expenses
               on behalf of the  Company in the amount of $7,939,  which will be
               repaid in the normal course of business.  During Fiscal 2001, the
               Company  agreed to  reimburse a  shareholder  $6,000 and $600 for
               office  rental  and  utilities,  respectively,  for  the use of a
               portion of the  shareholders  personal  residence.  During fiscal
               2000, the Company's  shareholders  incurred expenses on behalf of
               the Company in the amount of $1,820,  which will be repaid in the
               normal course of business.

               During  March and  August of 2001,  $8,500 and $2,100 of cash was
               received,  respectively,  from a  related  party  and  $5,655  of
               accounts  payable to related  party were  converted  into  Common
               Stock as a  subscription  under the Company's  private  placement
               authorized December 2000.

               In the  settlement of debt for past wages,  the Company  issued a
               $13,667  note that is the  remaining  portion  due to the  former
               President.  The  note  accrues  interest  at 15%  per  annum,  is
               unsecured and is payable on or before June 30, 2001.  Interest of
               $1,333 has accrued as of June 30, 2001.  The note was not paid in
               accordance with it's terms at June 30, 2001.

NOTE 7 - STOCK SUBSCRIPTION DEPOSIT

               As of December  31,  2001,  the  company had  received a total of
               $2,459 for the  purchase of 24,590  shares of common  stock.  The
               shares were issued subsequent to December 31, 2001. The $2,459 is
               recorded as a stock subscription deposit at December 31, 2001.

NOTE 8 - INCOME TAXES

               Due  to  the  Company's  net  loss  position  from  inception  on
               September  14, 2000 to December 31, 2001,  there was no provision
               for income taxes recorded.  The following is a reconciliation  of
               the statutory federal income tax rate to the Company's  effective
               tax rate:

<TABLE>
<CAPTION>
                                                                                                                        From
                                                                                                                    Inception on
                                                                                                                     September
                                                                                                                     14, 2000
                                                                                  Year Ended December 31,             Through
                                                                          -----------------------------------       December 31,
                                                                               2001                 2000                2001
                                                                          --------------      ---------------     ---------------
<S>                                                                       <C>                 <C>                 <C>
               Tax provision (benefit) at statutory rate                      (35)%                 (35)%               (35)%
               State tax, net of federal benefit                               (1)%                  (2)%                (1)%
               Permanent differences                                           29 %                  20 %                28 %
               Valuation allowance                                              7 %                  17 %                 8 %
                                                                          --------------      ---------------     ---------------
                                                                                - %                   - %                 - %
                                                                          ==============      ===============     ===============
</TABLE>



                                      F-15
<PAGE>
                       VIPER NETWORKS, INC. AND SUBSIDIARY
                          (A Development Stage Company)
                 Notes to the Consolidated Financial Statements

NOTE 8 - INCOME TAXES (continued)

          The components of net deferred tax assets are as follows:

                                                December 31,
                                                   2001
                                              --------------
          Deferred tax assets:
            Net operating loss carryforward   $      31,395
            Other assets                                337
                                              --------------
                                                     31,732
            Less valuation allowance                (31,732)
                                              --------------
                                              $           -
                                              ==============

          As  a  result  of  the  Company's  losses  to  date,  there  exists  a
          substantial  doubt as to the ultimate  realization of the deferred tax
          assets. Accordingly, a valuation allowance equal to the total deferred
          tax assets has been recorded at December 31, 2001.

          At December 31, 2001,  the Company had federal and state net operating
          loss  carryforwards  for tax  purposes  of  approximately  $70,000 and
          $77,000  which may be available to offset  future  taxable  income and
          which, if not used, begin to expire in 2010 and 2012, respectively.

NOTE 9 - COMMITMENTS AND CONTINGENCIES

          Operating Lease Obligation

          In October 2000, the Company entered into a  month-to-month  lease for
          its  office  space.   In  July  2001,  the  Company   entered  into  a
          month-to-month  agreement to reimburse a shareholder  for office space
          utilized within the shareholder's personal residence. Rent expense for
          the year ended  December 31, 2001 and from  inception on September 14,
          2000 to December 31, 2001 was $16,055 and $17,739, respectively.

          Equity Incentive Plan

          In December 2000, the Company's  shareholders  adopted the 2000 equity
          incentive  plan  (the  "2000  Plan")  for the  benefit  of  employees,
          directors,  advisors and  consultants of the Company.  Under the plan,
          the  Company  may grant  stock  options  or  awards  at a  maximum  of
          1,500,000  shares.  At December 31, 2001, there were 750,000 shares of
          the Company's Common Stock available for grant under the 2000 Plan.

NOTE 10 - PREFERRED STOCK

          a.   Preferred Stock - Class A

          The  Company  has  authorized  100,000  shares of  non-voting  Class A
          preferred  stock, at a par value of $1.00 per share.  These shares are
          convertible into common stock at a ratio of 500 shares of common stock
          for each share of Class A preferred stock. There were no shares issued
          and outstanding at December 31, 2001.



                                      F-16
<PAGE>
                       VIPER NETWORKS, INC. AND SUBSIDIARY
                          (A Development Stage Company)
                 Notes to the Consolidated Financial Statements


NOTE 10 - PREFERRED STOCK (continued)

     b.   Preferred Stock - Class B

          The Company has  authorized  10,000,000  shares of non-voting  Class B
          preferred  stock,  at a par value of $1.00  per  share.  These  shares
          accumulate  dividends  at a rate of 15% per annum and are  convertible
          into common  stock at a $1.00 per share or the market price for the 10
          day average prior to the date of conversion, whichever is less, but in
          no event less than 75 cents per share.  The conversion  date is at the
          option of the  Company,  however,  no sooner  than 12 months  from the
          first day that the common  stock of the  Company is  publicly  traded.
          There were 3,000,000  shares and zero shares issued and outstanding at
          December 31, 2000 and December 31, 2001, respectively.

          The  cumulative  undeclared  dividends  as of  December  31, 2000 were
          $1,049,178.  The  dividends  continue  to  accumulate,   however,  all
          dividends accumulated after November 15, 2000 will be contributed back
          to the Company by the shareholder.

          The  shareholder  also has stock  warrants to  purchase an  additional
          1,000,000  common  shares  for a period  of one year  from the date of
          conversion  for  the  same  price  as  the  preferred  shares  can  be
          converted.  Since there is no market price and the warrants  cannot be
          valued, the warrant shares are considered to have no value.

          During June 2001, the Company negotiated a settlement and release with
          the Class B  preferred  stockholder  whereby the  Preferred  Stock and
          common  stock  warrants  were  exchanged  for  400,000  shares  of the
          Company's  Common Stock and the  cumulative  undeclared  dividends and
          were not declared.

NOTE 11 - COMMON STOCK TRANSACTIONS

          On December  29, 2000,  the Company  approved a  reverse-split  of its
          Common Stock on a 1-for-12 basis leaving  3,565,786  shares issued and
          outstanding.  All  references to common stock have been  retroactively
          restated.

          During Fiscal 2001, the Company issued 606,000,  56,550, and 1,585,844
          shares at $0.10 per share for cash,  satisfaction of accounts  payable
          to related party, and in payments of services, respectively.

NOTE 12 - STOCK OPTIONS

          During December 2000, the Company adopted the 2000 Plan which provides
          for the  issuance  of the  Company's  Common  Stock to  employees  and
          directors of the Company and its affiliates.  The Company has reserved
          1,500,000 shares of Common Stock for which incentive stock options and
          non-statutory stock options to purchase shares of the Company's Common
          Stock, limited rights, and stock awards may be granted.

          Options  and  limited  rights  granted  under the 2000  Plan  shall be
          exercisable at such time or upon such events and subject to the terms,
          conditions,  vesting,  and  restrictions as determined by the board of
          directors or the compensation committee (the "Plan Committee.") of the



                                      F-17
<PAGE>
                       VIPER NETWORKS, INC. AND SUBSIDIARY
                          (A Development Stage Company)
                 Notes to the Consolidated Financial Statements



NOTE 12 - STOCK OPTIONS (continued)

          Company provided however that no option shall be exercisable after the
          expiration of ten years from the date of grant.  The exercise price of
          options  granted  under the 2000 Plan will be equal to the fair market
          value  of the  Company's  Common  Stock  as  determined  by  the  Plan
          Committee on the date of grant. If, at the time of grant, an incentive
          stock option is granted to a 10%  beneficial  owner,  as defined,  the
          exercise  price will not be less than 110% of the fair market value of
          the  Company's  Common Stock and the option  shall not be  exercisable
          after the expiration of five years.

          Stock  awards  granted  under the 2000 Plan  shall be  subject  to the
          terms, conditions, vesting, and restrictions as determined by the Plan
          Committee.

          At December  31,  2001,  there were  750,000  shares of the  Company's
          Common Stock available for future grant under the 2000 Plan.

          A summary of the  Company's  stock options as of December 31, 2001 and
          2000 and changes during the periods is as follows:

<TABLE>
<CAPTION>
                                                                                   Year ended December 31,
                                                     -------------------------------------------------------------------------------
                                                                     2001                                        2000
                                                     ----------------------------------------   ------------------------------------
                                                                               Weighted                               Weighted
                                                                                average                                average
                                                           Options          exercise price           Options        exercise price
                                                     ------------------   -------------------   ----------------    ----------------
<S>                                                  <C>                   <C>                   <C>                 <C>
              Outstanding at the
                beginning of the period                         300,000   $              0.11                  -                  -
                      Granted                                   450,000                  0.11            300,000               0.11
                      Exercised                                       -                     -                  -                  -
                      Cancelled                                       -                     -                  -                  -
                                                     ------------------                         ----------------
              Outstanding at the end of
                the period                                      750,000   $              0.11            300,000    $          0.11
                                                     ==================                         ================
              Vested at the end of the
                period                                           60,000                                        -
              Exercisable at the end of
                period                                          750,000                                 300,000
              Weighted average fair value
                per option of options
                granted during the period                                 $            0.0053                       $        0.0145
</TABLE>




                                      F-18
<PAGE>
                       VIPER NETWORKS, INC. AND SUBSIDIARY
                          (A Development Stage Company)
                 Notes to the Consolidated Financial Statements
                                December 31, 2001


NOTE 12 -     STOCK OPTIONS (continued)


          The following table summarizes  information  regarding  employee stock
          options outstanding at December 31, 2001.

<TABLE>
<CAPTION>
                                                       Options Outstanding                            Options Exercisable
                                         ------------------------------------------           --------------------------------------
                                           Weighted average              Weighted                                       Weighted
                                              remaining                   average                                        average
                        Number               contractual                 exercise                  Number               exercise
Exercise prices      outstanding             life (years)                  price                 exercisable              price
---------------      -----------         ---------------------          -----------           ------------------    ----------------
<S>                   <C>                 <C>                           <C>                    <C>                   <C>

  $  0.11              750,000                   4.6                        0.11                    60,000                0.11
</TABLE>

          The Company estimated the fair value of each option grant at the grant
          date  by  using  the  Black-Scholes  option  pricing  model  with  the
          following  weighted  average  assumptions  used for grants  during the
          years ended  December 31, 2001 and 2000; no dividend  yield,  expected
          volatility of 0.1%,  risk-free  interest rates of 3.03% and 5.17%, and
          expected lives of five years, respectively.

          Had compensation cost for the Company's stock-based  compensation plan
          been determined  based on the fair value at the grant dates for awards
          under those plans  consistent  with the method  described in SFAS 123,
          the Company's net loss would have been as follows:

<TABLE>
<CAPTION>
                                                                                                                         From
                                                                                                                     Inception on
                                                                                                                     September 14,
                                                                                   Year Ended December 31,           2000 Through
                                                                           --------------------------------------    December 31,
                                                                                  2001                 2000              2001
                                                                           -------------------  ----------------- ------------------
<S>                                                                       <C>                   <C>               <C>
                      Net loss:
                          As reported                                      $         (366,029)  $        (39,108)   $      (405,137)
                          Pro forma                                        $         (366,899)  $        (39,108)   $      (406,007)

                      Basic loss per share:
                          As reported                                      $            (0.08)  $          (0.02)   $         (0.11)
                          Pro forma                                        $            (0.08)  $          (0.02)   $         (0.11)
</TABLE>

                                      F-19
<PAGE>
                       VIPER NETWORKS, INC. AND SUBSIDIARY
                          (A Development Stage Company)
                 Notes to the Consolidated Financial Statements
                                December 31, 2001


NOTE 13 -SUBSEQUENT EVENTS

          On January 3, 2002,  the Company  authorized the issuance of 1,000,000
          shares  of  the  Company's   Common  Stock  for  services  during  the
          preparation and June 2001 filing of the Company's original Form 10-SB.
          The shares  were valued at $100,000  based on recently  completed  ten
          cent  cash  sales  of  the   Company's   Common  Stock  in  comparable
          arms-length transactions with third parties.

          During January 2002,  the Company issued  warrants for the purchase of
          an aggregate of 662,550  shares of the  Company's  Common Stock to the
          participants in the Company's Fiscal 2001 ten cent private  placement.
          The warrants provide for the purchase for one additional common share,
          for each share  purchased  in the private  placement  at ten cents per
          share up until the Company's  first day of public  trading  (September
          16, 2002).  Thereafter,  the exercise  price  increases to twenty-five
          cents  and  the  warrants  expire  on  the  first  anniversary  of the
          Company's public trading. In April 2002, a total of 25,000 shares were
          purchased  upon the  exercise  of these  warrants,  the balance of the
          warrants expired unexercised.

          During March 2002, the Company created the Viper Networks Compensation
          Fund to provide compensation to employees and consultants. The Company
          authorized the issuance of up to 10,000,000 shares of Common Stock.

          On May 20, 2002,  the Company  finalized an asset  purchase  agreement
          with ePhone,  Inc.  providing for the acquisition of substantially all
          of ePhone's  assets.  The purchase price specified in the agreement is
          162,133 shares of the Company's Common Stock and Common Stock purchase
          warrants for the purchase 162,133 shares of the Company's Common Stock
          at  $0.50  per  share  until  such  time  as  the  Company  is  traded
          over-the-counter  or on a bulletin  board  exchange (the "ePhone First
          Warrant").  Upon the Company's  trading the warrant's  exercise  price
          increases to $1.00 per share for a period of 90 days at which time the
          warrant expire.  The shares and warrants were distributed by ePhone to
          their  shareholders.  The asset purchase was recorded as $16,133 based
          on recent 10 cent cash sale of the Company's  Common  Stock.  No value
          was assigned to the warrant.

          In August 2002, the Company  authorized the issuance of 150,000 shares
          of the Company's  Common Stock for legal services  rendered during the
          November 2000 merger between Taig and Viper-CA. The shares were valued
          at $22,500.  Also during  August 2002, a total of 58,000 shares of the
          Company's  Common Stock were purchased upon the exercise of the ePhone
          First  Warrant  for  $29,250  the  balance  of  the  warrants  expired
          unexercised.

          During September 2002, the Company  authorized the issuance of 175,000
          shares of the Company's  Common Stock for a one year service  contract
          and a cash  payment of $10,000.  The shares  were  recorded as $35,000
          with the  $25,000  non-cash  component  expensed  over the  period  of
          service. Also during September 2002, the Company sold 20,000 shares of
          Common Stock at 25 cents per share.

          On September  16, 2002 the  Company's  Common Stock  commenced  public
          trading on the OTC Pink Sheets after the  Company's  Form 211 filed on
          January 17, 2002 with the NASD  received  clearance,  pursuant to NASD
          Rule 6740 and Rule 15c2-11 under the Securities Exchange Act of 1934.

                                      F-20
<PAGE>
                       VIPER NETWORKS, INC. AND SUBSIDIARY
                          (A Development Stage Company)
                 Notes to the Consolidated Financial Statements
                                December 31, 2001


          On October 25, 2002,  the Company  authorized  the issuance of 668,376
          shares of Common Stock for services provided to the Company,  by three
          Officers and Directors of the Company and two consultants.  The shares
          were valued at an aggregate of $150,385.

          On  November  19,  2002,  the Company  finalized  a security  purchase
          agreement with PC Mailbox, Inc. providing for the acquisition of a 49%
          non-dilutive  interest in PC Mailbox.  The purchase price specified in
          the  agreement is 800,000  shares of the Company's  Common Stock.  The
          shares were valued at an aggregate of $40,000.

          On December 27, 2002, the Company authorized the issuance of 7,800,000
          shares of Common  Stock for services  provided to the Company,  by two
          Officers and  Directors  of the Company.  The shares were valued at an
          aggregate of $293,802. In addition,  the Company granted stock options
          from the 2000  Plan to the two  Officers  aggregating  500,000  shares
          exercisable at 3.7 cents; the options expire on December 27, 2007.

          Also on December 27, 2002,  the Company issued a second warrant to the
          ePhone  shareholders (the "ePhone Second Warrant") for the exercise of
          up to 2,000,000  shares of the Company's Common Stock for a term of 60
          days.  During  December  2002 to February  2003,  a total of 1,727,833
          shares were exercised for an aggregate of $70,780,  the balance of the
          warrants expired unexercised.

          On December 29, 2002, during the annual meeting of the shareholders an
          additional  10,500,000  shares  of the  Company's  Common  Stock  were
          reserved  under the 2000 Plan, in addition to the prior  authorization
          of 1,500,000 shares.

          On February 18,  2003,  the Company  entered into a one year  services
          agreement with Alexander Lindale, LLC ("Lindale") for the distribution
          of  Company  financial  and  product   information  through  Lindale's
          established  network of financial,  media, and business contacts.  The
          services  are payable as specific  milestones  are  completed  with an
          aggregate of  12,100,000  shares of the  Company's  Common  Stock.  An
          aggregate of $363,000 was expensed as services were received.

          On March 3, 2003, the Company entered into a common stock for services
          agreement  with  Consolidated   Wireless,   Inc.   providing  for  the
          acquisition of 1,500,000  shares of Consolidated  Wireless in exchange
          for  financial  and  business  management  services  provided  by  the
          Company.  On December 31, 2003 the Company and  Consolidated  Wireless
          agreed that the Company had fully satisfied it's obligation to provide
          services to Consolidated Wireless.

          During March 2003, the Company entered into a Settlement Agreement and
          Stipulation of Judgment with Citicorp  Vendor  Finance Inc.  regarding
          its capital leases. The settlement  agreement provided for the payment
          of $27,000  ratably over 16 months.  After five payments,  aggregating
          $8,000 the company defaulted on the settlement agreement. During April
          2004 the  Company  made a final  settlement  payment  of  $23,000  and
          received an acknowledgement of full satisfaction of the judgment.

          On April 23, 2003, the Company commenced a security purchase agreement
          with  Greenland  Corp.  providing  for the purchase of an aggregate of
          2,000,000 shares of Greenland  common stock for $25,000,  the issuance


                                      F-21
<PAGE>
                       VIPER NETWORKS, INC. AND SUBSIDIARY
                          (A Development Stage Company)
                 Notes to the Consolidated Financial Statements
                                December 31, 2001


          of 2,500,000 shares of the Company's Common Stock, and the issuance of
          Common Stock purchase  warrants for the purchase  10,000,000 shares of
          the Company's  Common Stock at a 50% discount to the market close upon
          exercise valid for a period of 120 days (the "Greenland Warrant"). The
          purchase of marketable securities was recorded as $83,125. During July
          2004,  the  Company  filed a lawsuit in San Diego  Superior  Court for
          rescission  of the  agreement.  The Company  considers the contract to
          have been obtained by fraud;  Greenland made numerous false statements
          and material omissions regarding Greenland's  financial condition.  In
          accordance with the security purchase  agreement the case was assigned
          to arbitration in November 2004. The Company feels  confident that the
          matters will be resolved in the  Company's  favor,  and the  2,500,000
          shares of the Company's Common Stock will be returned to treasury.

          During May 2003, the Company authorized the borrowing of funds under a
          convertible  bridge loan agreement with interest  payable in both cash
          and  the  issuance  of  shares  of the  Company's  Common  Stock.  The
          following  loans  were  funded  under  the  convertible   bridge  loan
          agreement.  The first five loans were  repaid  following  maturity  in
          cash,  the sixth loan was paid by the  issuance of stock in a minority
          owned subsidiary.

<TABLE>
                   Amount        Term in                  Interest paid in                Due
        Date      borrowed        months          Cash        Stock        Total          date
<S>               <C>            <C>             <C>       <C>             <C>         <C>
     5-20-03      $50,000             6          $7,500     250,000      $16,125       11-20-03
     6-16-03      $25,000             6          $3,750     125,000      $ 6,250       12-16-03
     8-1-03       $25,000             6          $3,750      75,000      $ 4,500        2-1-04
     8-1-03       $25,000             9          $5,625     125,000      $ 7,500        5-1-04
     9-18-03      $25,000             9          $3,750     125,000      $12,750        6-18-04
     9-18-03      $25,000             9          $3,750     125,000      $12,750        6-18-04
</TABLE>

          During the  quarter  ending  June  2003,  the  Company  wrote down its
          investment  in PC Mailbox to zero  following  the loss of the contract
          which utilized the PC Mailbox technology.

          On June 16, 2003, the Company finalized a security purchase  agreement
          with Coliance Communications,  Inc. providing for the acquisition of a
          non-dilutive   40%   interest   in  Coliance   (the  "First   Coliance
          Agreement").  The  purchase  price  specified  in the  First  Coliance
          Agreement is $50,000,  5,000,000 shares of the Company's Common Stock,
          and 450,000 shares of the Company's  Class B Preferred  Stock. On July
          16, 2003, the Company finalized a second security  purchase  agreement
          with Coliance  providing for the  acquisition  of the remaining 60% of
          Coliance  (the  "Second  Coliance  Agreement").   The  purchase  price
          specified in the Second Coliance Agreement is 12,000,000 shares of the
          Company's Common Stock plus the  cancellation  from the First Coliance
          Agreement  of the $50,000  cash  payment,  and  250,000  shares of the
          Company's  Class B Preferred  Stock.  The combined  purchase  price of
          $750,005 is to be  allocated  to the  underlying  assets  acquired and
          liabilities assumed based upon their estimated fair values at the date
          of acquisition.

          On July 16,  2003,  the Company  authorized  the issuance of 7,030,000
          shares of Common  Stock for  services  provided  to the Company by two
          Officers and  Directors  of the Company.  The shares were valued at an
          aggregate of $175,750.

                                      F-22
<PAGE>
                       VIPER NETWORKS, INC. AND SUBSIDIARY
                          (A Development Stage Company)
                 Notes to the Consolidated Financial Statements
                                December 31, 2001


          On July 17, 2003,  the Company  adopted a stock bonus plan (the "Stock
          Bonus  Plan")  for the  issuance  of up to  20,000,000  shares  of the
          Company's  Common Stock,  to be issued upon  achievement of benchmarks
          relating to the  Company's  product  and  services  business  plan and
          financial filings. In addition, the Company granted stock options from
          the 2000 Plan to two Officers aggregating 1,000,000 shares exercisable
          at 3.4 cents; the options expire on July 17, 2008.

          During August 2003,  the Company  authorized the issuance of 1,000,000
          shares and  500,000  shares of the  Company's  Common  Stock for legal
          services and termination of an employment agreement, respectively. The
          shares were valued at an aggregate of $120,000.

          On  August  21,  2003,  the  Company  entered  into an asset  purchase
          agreement with an Officer and Director  providing for the  acquisition
          of a 1/2  interest  in  certain  real  property.  The  purchase  price
          specified in the agreement is 4,000,000 shares of the Company's Common
          Stock,  issued to a third party, with piggy-back  registration  rights
          and subject to certain quarterly sale  restrictions.  Effective August
          21,  2003,  the Company  rescinded  the  agreement  with the return to
          treasury of 4,000,000  shares of the Company's  Common Stock  received
          from the  Officer  and  Director  and the  issuance  of  Common  Stock
          purchase  warrant to the  Officer  and  Director  for the  purchase of
          2,750,000  shares of the Company's Common Stock at 30 cents per share.
          The  warrants  vest  1,000,000  shares,  1,000,000  shares and 750,000
          shares on October 12, 2005,  October 12,  2006,  and October 12, 2007,
          respectively.

          During September 2003, the Company closed a $44,000 private  placement
          resulting in the  issuance of an aggregate of 1,137,498  shares of the
          Company's Common Stock.

          On October 15, 2003, the Company finalized a security merger agreement
          with  Mid-Atlantic   International,   Inc.   providing  for  the  100%
          acquisition  of  Mid-Atlantic.  The  purchase  price  specified in the
          agreement is $50,000,  3,300,000 shares of the Company's Common Stock,
          and 4,235,000  shares of the  Company's  Common Stock with a 90 day 17
          cent  redemption  right.  The purchase  price of  $1,049,950  is to be
          allocated to the underlying  assets acquired and  liabilities  assumed
          based upon their  estimated  fair  values at the date of  acquisition.
          During January 2004,  the 4,235,000  shares were redeemed for $269,500
          and the issuance of an aggregate of 1,802,000  shares of the Company's
          Common Stock.

          On October 21,  2003,  the Company  issued an  aggregate  of 8,000,000
          shares of the  Company's  Common  Stock from the Stock Bonus Plan upon
          achievement of the first and second benchmarks. The shares were valued
          at an aggregate of $320,000.

          On October 30, 2003, the Company borrowed from an Officer and Director
          $100,148 as an unsecured  subordinated  promissory  note for a term of
          two years with monthly payments of interest only at 10% per annum.

          During November 2003, the Company closed a $112,500 private  placement
          resulting in the  issuance of an aggregate of 2,045,454  shares of the
          Company's  Common Stock,  with Common Stock purchase  warrants for the
          purchase an addition  12,272,724  shares of the Company's Common Stock
          (six  shares  for  each  share  purchased)  at a 50%  discount  to the
          twenty-one  day market  close upon  exercise  valid for a period of 36
          months. During December 2003, a warrant to purchase 638,296 shares was
          exercised for a payment of $60,000.


                                      F-23
<PAGE>
                       VIPER NETWORKS, INC. AND SUBSIDIARY
                          (A Development Stage Company)
                 Notes to the Consolidated Financial Statements
                                December 31, 2001


          On December 16, 2003, the Company authorized an increase in the Common
          Stock from  100,000,000  to  250,000,000.  In  addition,  the  Company
          granted stock options from the 2000 Plan to the three and two Officers
          aggregating  750,000 shares and 500,000  shares  exercisable at $0.248
          and $0.273  which  expire on December  16, 2013 and December 16, 2008,
          respectively.

          During December 2003, the Company closed a $88,966  private  placement
          resulting in the  issuance of an  aggregate  of 553,245  shares of the
          Company's Common Stock.

          During January 2004, the Company closed a $198,000  private  placement
          resulting in the  issuance of an aggregate of 1,762,536  shares of the
          Company's Common Stock.

          On January  30,  2004,  the  Company  finalized  a  security  purchase
          agreement  with  Adoria  Communications,  LLC  providing  for the 100%
          acquisition of Adoria.  The purchase price  specified in the agreement
          is $500,000,  2,500,000  shares of the  Company's  Common  Stock.  The
          purchase  price of  $3,574,500  is to be allocated  to the  underlying
          assets  acquired and  liabilities  assumed based upon their  estimated
          fair values at the date of acquisition.

          During February 2004, the Company closed a $247,500 private  placement
          resulting in the  issuance of an aggregate of 1,237,500  shares of the
          Company's  Common Stock,  with Common Stock purchase  warrants for the
          purchase an addition 3,712,500 shares of the Company's Common Stock at
          an  exercise  price of 40  cents.  One  third of the  warrants  expire
          annually on the anniversary of the private placement. In addition, the
          Company closed a $450,000 private placement  resulting in the issuance
          of an aggregate of 1,800,000 shares of the Company's Common Stock.

          On March 4, 2004, the Company issued an aggregate of 5,000,000  shares
          of  the  Company's  Common  Stock  from  the  Stock  Bonus  Plan  upon
          achievement  of the third  benchmark.  The  shares  were  valued at an
          aggregate of $200,000.

          During April 2004,  the Company  closed a $428,750  private  placement
          resulting in the  issuance of an aggregate of 1,715,000  shares of the
          Company's Common Stock.

          On May 10, 2004, the Company finalized  security  purchase  agreements
          with  Software  Innovations,  Inc.  and  Brasil  Communications,   LLC
          providing  for the  acquisition  of 50%  combined  interest  in Brasil
          Communications, LLC. The purchase price specified in the agreements is
          750,000  shares  of the  Company's  Common  Stock  and  $300,000.  The
          purchase price, subject to adjustment as defined, of $682,500 is to be
          allocated to the underlying  assets acquired and  liabilities  assumed
          based upon their estimated fair values at the date of acquisition.

          During  May 2004,  the  Company  closed a $115,000  private  placement
          resulting in the  issuance of an  aggregate  of 575,000  shares of the
          Company's Common Stock.

          On June 2, 2004, the Company  granted stock options from the 2000 Plan
          to an employee for 500,000 shares  exercisable at $0.526;  the options
          expire on June 2, 2014.


                                      F-24
<PAGE>
                       VIPER NETWORKS, INC. AND SUBSIDIARY
                          (A Development Stage Company)
                 Notes to the Consolidated Financial Statements
                                December 31, 2001

          During June 2004,  the  Company  closed a $258,750  private  placement
          resulting in the  issuance of an aggregate of 1,035,000  shares of the
          Company's Common Stock.

          On August 4, 2004, the Company  declared a 10% stock dividend  payable
          on or about  October 17, 2004 to  shareholders  of record on September
          17, 2004.

          During  August 2004,  the Company  authorized  the  borrowing of funds
          under a convertible loan agreement with 10% per annum interest payable
          at maturity on December 15,  2004.  The note is  convertible  into the
          Company's  Common  Stock at $0.30 per share.  An aggregate of $150,000
          was borrowed  during August 2004. On September 15, 2004 the loans plus
          $1,167 of accrued  interest were  converted into 503,893 shares of the
          Company's Common Stock.

          On September  17, 2004,  the Company  issued an aggregate of 6,000,000
          shares of the  Company's  Common  Stock from the Stock Bonus Plan upon
          achievement  of the fourth  benchmark.  The shares  were  valued at an
          aggregate of $240,000.

          On September 17, 2004, the Company granted stock options from the 2000
          Plan to an officer for  4,500,000  shares  exercisable  at $0.45;  the
          options expire on June 2, 2014.

          During November 2004, the Company closed a $200,000 private  placement
          resulting in the  issuance of an aggregate of 2,222,222  shares of the
          Company's  Common Stock,  with common stock purchase  warrants for the
          purchase of an additional  4,444,444  shares of the  Company's  Common
          Stock at an exercise  price of a 50%  discount to the  twenty-one  day
          moving  average of the closing  market price of the  Company's  Common
          Stock.  The warrants are valid for a period of 24 months from the date
          of  issuance.  Also  during  November  2004,  1,400,000  shares of the
          Company's  Common Stock were  acquired upon the exercise of previously
          issued  warrants in exchange for return to treasury of 737,838  shares
          of the Company's Common Stock valued at $273,000.

          At various  times  during 2004,  the Company  borrowed an aggregate of
          $619,500 form Officers and Directors to fund  operations;  the amounts
          will be repaid from  available  cash flows.  During 2004,  the Company
          repaid an aggregate of $145,000.

          On February 4, 2005, the Company entered into five stock  subscription
          agreements  for an aggregate  of  33,333,335  shares of the  Company's
          Common Stock in exchange for  $5,000,000  in US Treasury  Bonds,  with
          both the Company's shares and the $5,000,000 being placed into escrow.
          Concurrent with the execution of the agreements, the Company purchased
          from Cogent  Capital for $1 a call option to  repurchase at the end of
          two years 80% of the shares of Common  Stock sold at the then  current
          market price. Also concurrent with the agreements, the Company entered
          into an equity swap  arrangement  with Cogent  Capital for $50,000 and
          3,333,333  shares of the  Company's  Common  Stock that  entitles  the
          Company to receive and obligate the Company to pay the price return of
          75% of the  shares  issued in two  years,  or sooner if the shares are
          registered  for sale under the Securities Act of 1933. The equity swap
          also  provides for the  exchange of certain cash flows,  as defined in
          the agreement.

          At various  times  during 2005,  the Company  borrowed an aggregate of
          $35,000 form  Officers and Directors to fund  operations;  the amounts
          will be repaid from  available  cash flows.  During 2005,  the Company
          repaid an aggregate of $18,000.



                                      F-25