U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                   FORM 10-KSB


X    ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE  SECURITIES  EXCHANGE ACT OF
     1934 [FEE REQUIRED]

                   For the fiscal year ended December 31, 2002

[]   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
                                                            On Which Registered
     Common Stock (par value $0.001)                              None

     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: $18,265.

     The  aggregate  market  value of the voting  stock  held by  non-affiliates
(5,708,425) shares of Common  Stock) was $245,462 as of December  31, 2002.  The
stock price for computation  purposes was $0.043.  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, 2002 was 17,640,689.


                      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, 2002 was 17,640,689.


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, 2003).

           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    [Pagination Subject to Change.]

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

         Item 1A        FACTORS THAT MAY AFFECT FUTURE RESULTS............   18

         Item 2.        DESCRIPTION OF PROPERTY...........................   24

         Item 3.        LEGAL PROCEEDINGS.................................   24

         Item 4.        SUBMISSION OF MATTERS TO A VOTE OF SECURITY
                        HOLDERS...........................................   24

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.....   26

         Item 7.        FINANCIAL STATEMENTS..............................   26

         Item 8.        CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
                        ON ACCOUNTING AND FINANCIAL DISCLOSURE............   29

PART III

         Item 9.        DIRECTORS, EXECUTIVE OFFICERS AND CONTROL
                        PERSON; COMPLIANCE WITH SECTION 16(a) OF THE
                        EXCHANGE ACT......................................   30

         Item 10.       EXECUTIVE COMPENSATION............................   32

         Item 11.       SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
                        AND MANAGEMENT....................................   34

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

         Item 13.       EXHIBITS AND REPORTS ON FORM 8-K..................   36

         Item 14.       PRINCIPAL ACCOUNTANT FEES AND SERVICES............   37


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  subsidiaries,  Viper-CA  and  NextPhase
Technologies,  Inc.,  is a  development-stage  company  and the  Company did not
record any revenues from inception  through  December 31, 2001.  During the year
ending December 31, 2002, the Company recorded $18,265 as revenues.

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:

     -    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.

     -    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>
     -    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.

     -    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, 2002,  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.

     Because our planned  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 a  leading  provider  of  enhanced  Voice  over the
Internet products.  In order to accomplish this, we have set forth the following
objectives:

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

     -    Expand Viper by adding additional points of presence nationwide;

     -    Capitalize on the cost advantages of the Internet;

     -    Use VoIP to enhance Internet applications;

     -    Expand our role as an Application Service Provider;

     -    Establish Viper as a leader in quality;

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

     -    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:

     -    Expand the presence of VIPER CONNECT through direct sales efforts

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

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



                                       9
<PAGE>

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

     -    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  $554,760 in losses during the twelve  months ending  December 31, 2002
and cumulative losses of $959,897 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.

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.


                                       18
<PAGE>

6. Limited Sales Revenues & Dependence upon One Customer. During the fiscal year
ending  December 31, 2002,  we generated  only $18,265 in sales  revenues and of
this amount $14,950 was derived from one customer.  While we anticipate  that if
we can  successfully  implement  our  business  plan  we  will  gain  additional
customers  during 2002 nearly 82% of our sales revenues were dependent upon this
one  customer in the event that we are not able to increase  and  diversify  our
customer   base,  we  may  be  subject  to   significant   risks  and  financial
difficulties.  Any continued  reliance  upon one or a few customers  will likely
result in significant financial losses.

7. 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.

8.  Absence  of  Barriers  to Entry & Lack of  Patent  Protection.  Our  planned
products  and  services are not unique and others could easily copy our strategy
and provide the same or similar services since there are no significant barriers
to  entering  the  business of  providing  Internet  telephone  services or VoIP
networks and no  signfiicant  barriers to entry are  expected in the future.  In
addition,  we do not expect to hold any patent  protection on any of our planned
products or services. For these reasons we may face continuing financial losses.

9. 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.

10. 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 anticipate that we will be acting as "general  contractor" in bringing
together  various  third party  vendors to complete a VoIP  solution  based on a
customer's specific needs and preferences. As a result, since we may not be able
to control the products and services  that these third parties  provide,  we may
not be able to  control  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.

11. 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.

12. 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>


13.  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.

14.  Control.  Our  officers  and  directors  directly  and  indirectly  hold an
aggregate of 11,932,264  shares of the Company's  common stock.  This represents
nearly 64% of the Company's total outstanding shares as of December 31, 2002 and
thereby  allows the Company's  officers and directors to retain control over the
Company.

15.  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.

16. Dependence Upon Key Personnel and New Employees. We believe that our success
will depend,  to a significant  extent,  on the efforts and abilities of 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.

17. Absence of Key Man Insurance. We currently do not maintain any key man life
insurance on the life of 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.

                                       20
<PAGE>

18. Absence of Workers  Compensation and General Liability  Insurance.  While we
intend to acquire workers compensation insurance and general liability insurance
as our  financial  resources  may allow,  at the present time we do not have any
workers compensation 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 injuries or losses for
which  liability is asserted  against us, we could incur  significant  costs and
liability for all such injuries or losses.

19. 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.

20. 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.

21. 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.

22. Matter of Public  Market and Rule 144 Stock Sales.  As of December 31, 2002,
there were 16,567,333 shares of the Company's Common Stock that were "restricted
securities"  and which may be sold  pursuant to Rule 144.  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"),  we may be
able to avoid any significant  adverse enforcement action by the SEC arising out
of our lack of compliance with the Exchange Act. 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>

23.  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

     On August 26, 2002, the Company entered into a month-to-month lease for its
headquarters  and  principal  office at 7950  Silverton  Avenue,  Suite 102, San
Diego,  California.  Under the terms of the lease the Company  leased 920 square
feet of space at $0.90 per square foot per month. From January 1, 2002 to August
26, 2002, 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 and with  approximately  732 square
feet at $1.15 per square foot per month.  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  payment  for all  office  space and
utilities thereunder with this arrangement  continuing through December 31, 2003
(inclusive).  Our current  office address as of 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, we 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.  We
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 our Series B Preferred Stock. On June 30,
2001,  all of the Series B Preferred  Stock was converted into 400,000 shares of
our Common Stock.  As of December 31, 2002,  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, 2002,  the Company's  stockholders  held a Meeting at which
the  stockholders:   (1)  appointed  HJ  &  Associates,  LLC  as  the  Company's
independent  auditors;  (2) approved an increase in the amount of the  Company's
Common Stock to be reserved for the Company's  2000 Equity  Incentive  Plan from
1,500,000  to  12,000,000;  and (3)  elected  John L.  Castiglione  and Jason A.
Sunstein as Directors of the Company.


                                     PART II

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

     As of December 31, 2002, the Company's  Common Stock traded in the non-Over
the Counter "Pink Sheets" listed in the National Daily Quotations  Service under
the symbol,  VPER. Trading in the stock commenced on September 16, 2002 and only
a limited and  volatile  trading  market  exists with only  sporadic and limited
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. As of December 31, 2002, the
Company had 133 stockholders and 3 market makers.

     A limited  and  sporadic  public  market  for the  Company's  Common  Stock
commenced on  September  16, 2002 in the Pink  Sheets,  LLC  National  Quotation
Service under the symbol VPER. Propr to that date the Comapny's Common Stock did
not trade in any market.

     The  following  table  reflects  the high and low  prices of the  Company's
Common Stock for the two years ended December 31, 2002.

        2002                     High($)                 Low($)
        ----                    -------                 ------
        1st Quarter             $------                 $------
        2nd Quarter             $------                 $------
        3rd Quarter             $1.9998                 $0.0440
        4th Quarte              $0.4500                 $0.2000
        2001 (No Trading)
        -----------------
        1st Quarter             $0.00                   $0.00
        2nd Quarter             $0.00                   $0.00
        3rd Quarter             $0.00                   $0.00
        4th Quarte              $0.00                   $0.00

                                       23
<PAGE>

     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 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.

     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.

                                       24
<PAGE>

     In May 2002, the Company offered and sold an aggregate of 1,323,962  shares
of the Company's  Common Stock to seven  investors at $0.10 per share.  Of these
shares,  25,000 shares were sold for cash with proceeds of $2,500. The remaining
shares,  totaling  1,298,962 shares were issued to five persons as follows (each
at a  value  of  $0.10  per  share):  (a)  222,500  shares  were  issued  to two
individuals  in payment  for  services;  (b) 210,000  shares to James  Wray,  an
officer and director of the Company in payment for services;  (c) 430,000 shares
to Jason A.  Sunstein,  an officer  and  director  of the Company in payment for
services; and (d) 436,462 shares to John L. Castiglione, an officer and director
of the Company in payment for  services  and in payment of monies owed for funds
previously advanced to the Company.  All of the persons who purchased the shares
were  Accredited  Investors.  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.

     In September  2002, the Company  offered and sold an aggregate of 1,387,500
shares of the Company's Common Stock to nine investors. Of these shares, 120,000
shares were sold to two persons in  consideration  of the  Company's  receipt of
$14,000.  The  remaining  shares,  totaling  1,267,500  shares,  were  issued in
exchange for the Company's  receipt of services.  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.

     In October  2002,  the  Company  offered and sold an  aggregate  of 668,376
shares of the  Company's  Common  Stock to five persons in exchange for services
received by the company with all of the shares  valued at $0.225 per share.  All
of the persons who purchased the shares were  Accredited  Investors.  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.

     In  November  2002,  the  Company  offered  and sold  25,000  shares of the
Company's Common Stock to one person in  consideration of the Company's  receipt
of services.  The shares were valued at $0.167 per share.  The  purchaser of the
shares was an  Accredited  Investor  and 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. The purchaser
was 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.


                                       25
<PAGE>

Comparison  of Fiscal  Year  Ending  December  31,  2002 and Fiscal  Year Ending
December 31, 2001

     During the fiscal year ending December 31, 2002, we recorded $18,265 as net
revenues. This compares to the fiscal year ending December 31, 2001 (the "Fiscal
2001") when we recorded no net  revenues.  We had only  limited  activities  and
remained a development-stage company.

     During fiscal 2002, our cost of revenues were $10,029 which resulted in a
gross margin as a percentage of net revenues of 45.09%.  This compares to Fiscal
2001  where we  recorded  no net  revenues  and our gross  margin  was 0%. The
extraordinarily high gross margin achieved during Fiscal 2002 is not necessarily
indicative  of the gross  margin and will likely  impact our gross margin in any
given year.

     During  Fiscal  2002 we incurred  $564,424  in general  and  administrative
expenses.  This compares to Fiscal 2001 when we incurred $354,666 in general and
administrative  expenses.  The increase of approximately 59% from Fiscal 2001 to
Fiscal 2002 was due primarily to the increased average monthly amount of general
and  administrative  expenses  in  connection  with the  efforts the Company was
taking to develop and implement 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 2002, we recorded a loss before other income and expenses of
$557,188 By  comparison,  during  Fiscal  2001 we  recorded a loss before  other
income and rxpenses of $354,666.  The increase in the amount of the loss was due
primarily the increased general and  administrative  expenses we incurred during
Fiscal 2002.

     During Fiscal 2002, we incurred  Interest Expense of $5,738. By comparison,
during Fiscal 2001 we had interest expense of $6,384. During Fiscal 2002, we had
$8,166 of net other income  resulting from a financial  institution  forgiving a
cash overdraft compared to Fiscal 2001, other income of $104. In addtion, during
Fiscal 2001, we incur realized loss on markeable seurities of $5,083.

     As a result,  during Fiscal 2002 we had a Net Loss of $554,760  compared to
Fiscal 2001 when we had a Net Loss of $366,029.

     Basic loss per share for Fiscal  2002 was  ($0.08)  compared to Fiscal 2001
when we had a basic  loss per  share of  ($0.08).  During  Fiscal  2002,  we had
6,737,489 weighted average shares outstanding. By comparison, during Fiscal 2001
we had 4,397,939 weighted average shares outstanding.

Liquidity and Capital Resources

     At  December  31,  2002,  we had $4,697 in cash.  At the same time,  we had
29,106 in other  current  assets.  In contrast,  as of December  31,  2002,  our
current   liabilities   consisted  of  $133,930   which   consisted  of  accrued
professional  fees,  accounts  payabls  to  related  party,  and  capital  lease
obligations.



                                       26
<PAGE>

     During Fiscal 2002, 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.

     Overall,  our liquidity and access to capital is very limited.  Net Working
Capital  as of  December  31,  2002 was  ($100,127).  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, 2002 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.

     As of December  31,  2002,  the Company  expects that it will need at least
$200,000 to cover its anticipated operating expenses for the 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 July 2002, the Financial  Accounting  Standards  Board  ("FASB")  issued
Statement of Financial  Accounting  Standard  ("SFAS") No. 146 - Accounting  for
Costs  Associated  with  Exit or  Disposal  Activities.  SFAS No.  146  provides
guidance on the recognition and measurement of liabilities  associated with exit
or disposal activities. Under SFAS No. 146, liabilities or costs associated with
exit or  disposal  activities  should be  recognized  when the  liabilities  are
incurred and measured at fair value.  This statement is effective  prospectively
for exit ort disposal activities initiated after December 31, 2002. The adoption
is not expected to have a material effect on the Company's  results of operation
or financial condition.

     In November  2002, the FASB issued FASB issued FASB  Interpretation  No. 45
("FIN  45"),  --  Guarantor's   Accounting  and  Disclosure   Requirements   for
Guarantees,  Including  Indirect  Guarantees of  Indebtedness of Others," FIN 45
requires  that a liability  be recorded in the  guarantor's  balance  sheet upon
issuance of a guarantee.  In  addition,  FIN 45 requires  disclosures  about the
guarantees  that an entity has issued,  including a rollforward  of the entity's
product warranty liabilities.  The Company will apply the recognition provisions
of FIN 45  prospectively  to  guarantees  issued after  December  31, 2002.  The
disclosure  provisions  of FIN 45 are  effective  for, and are reflected in, the
2002  financial  statements.  The  adoption of FIN 45 is not  expected to have a
material effect on the Company's results of operation or financial condition.

     In November  2002,  the Emerging  Issues Task Force (EITF) issued Issue No.
00-21,  "Accounting for Revenue  Arrangements with Multiple  Deliverables." This
Issue addresses  determination of whether an arrangement involving more than one
deliverable  contains  more  than one  unit of  accounting  and how  arrangement
consideration  should  be  measured  and  allocated  to the  separate  units  of
accounting.  EITF Issue No.  00-21 will be  effective  for revenue  arrangements
entered into in fiscal periods  beginning after June 15, 2003 or the Company may
elect to report the change in accounting as a cumulative-effect  adjustment. The
Company is reviewing  EITF Issue No. 00-21 and has not yet determined the impact
that this issue will have on its operating results and financial condition.

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>
<CAPTION>

                       Name                            Age                   Position                 Date Elected
---------------------------------------------------- --------- ------------------------------------- ---------------
<S>                                                   <C>      <C>                                   <C>
John L. Castiglione                                     32     Chief Executive Officer, Treasurer,        2000
                                                                           and Director

Jason A. Sunstein                                       32         V.P. Finance, 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.

     John L. Castiglione,  age 32, 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 32,  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:

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

   James G. Wray.        President & Director               Forms 3, 4, and 5
   John L. Castiglione   CEO, Treasurer, & Director         Forms 3, 4, and 5
   Jason A. Sunstein     V.P. Finance, Secretary
                         & Director                         Forms 3, 4, and 5

(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,  2002,  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:

<TABLE>
<CAPTION>
                                         SUMMARY COMPENSATION 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/         (g)      Compensation
                                                       (e)           (s)          SARs
                                                                     (1)          ($)(#)
                                                                     ($)            (f)                         (h)
                                                                     (i)
----------------- --------- ----------- ---------- ------------- ------------ --------------- ------------ -------------
James G. Wray      2000         $0       $0           $0           $0            100,000         $0              $0
President, CTO     2001         $0       $0           $0           $21,000       150,000         $0              $3,375
and Director(1)    2002         $0       $0           $0           $32,400             0         $0              $0

John L.            2000         $0       $0           $0           $0            100,000         $0              $0
Castiglione,       2001         $0       $0           $0           $ 64,000      150,000         $0              $18,469
CEO, Treasurer,    2002         $0       $0           $6,000       $179,301      250,000         $0              $0
and Director

Jason A.
Sunstein, V.P.    2000          $0       $0           $0           $0            100,000         $0              $0
Finance,          2001          $0       $0           $0           $ 64,000      150,000         $0              $15,750
Secretary and     2002          $0       $0           $6,000       $179,301      250,000         $0              $0
Director

All Directors
as a Group (3
persons)          2000          $0                                               300,000
                  2001          $0                                 $149,000      450,000
                  2002          $0                    $12,000      $391,002      500,000


================= ========= =========== ========== ============= ============ =============== ============ =============
</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 payment 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.

                (2)  Mr. Wray resigned as an officer and director in November
2002.




                                       31
<PAGE>


<TABLE>
<CAPTION>
                      OPTION/SAR GRANTS IN 2002 FISCAL YEAR
                         (Fiscal Year Individual Grants)
----------------------------------- -------------------- -------------------- ----------------- --------------------

                                     No. of Securities    Percent of Total
                                        Underlying            Options/
                                       Options/SARs        SARs Granted to      Exercise of
                         Granted Employees in Base Price
                                            (#) Fiscal Year ($/Sh) Expiration
Date
               Name                         (b)                  (c)                (d)                 (e)
               (a)
----------------------------------- -------------------- -------------------- ----------------- --------------------
<S>                                     <C>                    <C>                <C>                <C>

John L. Castiglione                     250,000                50%                 $0.037          12/27/07

Jason A. Sunstein                       250,000                50%                 $0.037          12/27/07

=================================== ==================== ==================== ================= ====================
</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, 2002.  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, 2002.

<TABLE>
<CAPTION>
-------------------------------- -------------------------------- ----------------------- ------------------

(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>

                                 John L. Castiglione              6,332,264(3)             33.97%(3)
Common Stock                     7950 Silverton Avenue, Suite
                                 102
                                 San Diego, California 92126

                                 Jason A. Sunstein
Common Stock                     7950 Silverton Avenue, Suite     5,600,000(4)             30.04%(4)
                                 102
                                 San Diego, California 92126

Common Stock                     James G. Wray                    1,369,000                 7.34%
                                 7950 Silverton Avenue, Suite
                                 102
                                 San Diego, California 92126
-------------------------------  -------------------------------  ----------------------  ------------------
Officers and Directors as a
group (2 persons)                                                 11,932,264               64.01%
-------------------------------- -------------------------------  ======================  ==================
</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 17,640,689 Shares  outstanding on December 31, 2002
and an aggregate of 1,000,000 shares purchasable upon exercise of certain Common
Stock Purchase Options granted to the Company's  officers and directors (500,000
shares  purchasable by John L.  Castiglione,  and 500,000 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 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  held by  Six-Twenty  Capital
Management,  Inc.,  a  corporation  owned by Jason A.  Sunstein,  an officer and
director of the Company.

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.


                                       33
<PAGE>


     During September 1998, we 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.  We
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 our Series B Preferred Stock. On June 30,
2001,  all of the Series B Preferred  Stock was converted into 400,000 shares of
our Common Stock.  As of December 31, 2001,  the Company had not received  clear
title to the land.

     During 2000,  Castle-Lion  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. The note was
subsequently paid in April 2002 with a $7,500 payment and the issuance of 40,000
shares of the Company's Common Stock.

     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
payment for all office  space and  utilities  thereunder  with this  arrangement
continuing  through  December 31, 2003  (inclusive).  While the Company believes
that the office  arrangement with Mr. Sunstein was undertaken on terms that were
no different  than those that the Company  could have obtained in an arms length
transaction with 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
as entered into with third parties on an arms-length basis.

     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 ending December 31, 2001,  totaling $6,407 as of
December 31, 2001.  The Company  subsequently  repaid Mr.  Sunstein all of these
amounts.

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

     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
$10,330 during the twelve months ending December 31, 2002,  totaling  $16,737 as
of December 31, 2002. The Company  subsequently repaid Mr. Sunstein all of these
amounts.

     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
$23,251 during the twelve months ending December 31, 2001 totaling $26,603 as of
December 31, 2002.  The Company  sunscquetly  repaid Mr.  Casiglione all of thse
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**

     10.10 Employee Compensation Fund and Plan

     10.11 Asset  Purchase  Agreement (between  Viper  Networks,  Inc. and
           ePhone, Inc.)

     10.12 Month-to-Month Industrial Lease

     10.13 Securities  Purchase  Agreemnt  (between Viper  Networks,  Inc. and
           PC Mailbox, Inc.)

     23.1  Consent of Independent Accountants, Armando C. Ibarra, 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
           toSection 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.

     **   Previously  filed  with  Form  10-KSB  and   incorporated   herein  by
          reference.

     (b)  The Company  filed the  following  Reports on Form 8-K during the year
          ending December 31, 2002: None.

                                       35
<PAGE>

Item 14. Principal Accountant Fees and Services.

Audit Fees

     The  anticipated  aggregate  fees to  Armando 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, 2002 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 generally include fees for accounting  consultations,  business
acquisitions, and work related thereto.

     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 thereby to establish a Charter for the Audit Committee. For the
year  ending  December  31,  2002 and due to limited  financial  resources,  the
Company has delayed the  implementation  of these plans until such later date at
which the Company may have the financial resources available.

Audit Committee Report

     Since the Company did not establish an Audit  Committee for the year ending
December 31, 2002, no Audit Committee Report for that 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 L. Castiglione                           Date: March 8, 2005
    ----------------------
    John L. Castiglione
    Chief Executive Officer & Treasurer


By: /s/ Jason A. Sunstein                            Date: March 8, 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 dates indicated.


By: /s/John L. Castiglione                           Date: March 8, 2005
    ----------------------
     John L. Castiglione
     Chief Executive Officer, Treasurer
&    Director


By: /s/ Jason A. Sunstein                            Date: March 8, 2005
    ---------------------
    Jason A. Sunstein
    Vice President Finance, Secretary
    & Director


                                       36
<PAGE>
                         Index to Financial Statements

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

Consolidated Balance Sheet as of December 31, 2002......................... F-3

Consolidated  Statements of Operations  for the Years Ended
December 31, 2002 and 2001 and from Inception on September 14,
2000 through December 31, 2002............................................. F-4

Consolidated Statements of Stockholders' Deficit for the Years
Ended December 31, 2002 and 2001 and from Inception on
September 14, 2000 through December 31, 2002............................... F-5

Consolidated Statements of Cash Flows for the Years Ended
December 31, 2002 and 2001 and from Inception on September 14,
2000 through December 31, 2002............................................. F-6

Notes to the Consolidated Financial Statements............................. F-7

                                      F-1
<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, 2002 and
2001  and  the  related  consolidated  statements  of  operations,   changes  in
shareholders'  equity and cash flow for the years then ended. These consolidated
financial  statements are the  responsibility  of the Companys  management.  Our
responsibility  is  to  express  an  opinion  on  these  consolidated  financial
statements based on our audit.

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

In our opinion, the consolidated  financial statements referred to above present
fairly, in all material respects,  the consolidated  financial position of Viper
Networks,  Inc.,  and  subsidiaries  as of December  31, 2002 and 2001,  and the
results  of their  operations  and its cash  flows for the years  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

<PAGE>



<TABLE>
<CAPTION>
                                                                                                  December 31,
                                                                                                      2002
                                                                                               ------------------
<S>                                                                                              <C>
                                     ASSETS
Current Assets:
   Cash                                                                                        $          4,697
   Other current assets (Note 4)                                                                         29,106
                                                                                               -----------------
     Total current assets                                                                                33,803
Property and equipment, net (Note 4)                                                                     34,336
Investment in technology company                                                                         40,000
                                                                                               -----------------

     Total assets                                                                              $        108,139
                                                                                               =================


                      LIABILITIES AND STOCKHOLDERS' DEFICIT

Current liabilities:
   Accounts payable                                                                            $         16,477
   Accrued professional fees                                                                             22,500
   Accounts payable to related party (Note 7)                                                            58,617
   Taxes payable                                                                                          1,762
   Capital lease obligations, current portion (Note 6)                                                   26,044
   Stock subscription deposit (Note 8)                                                                    8,530
                                                                                               -----------------
     Total current liabilities                                                                          133,930
                                                                                               -----------------

Commitments and Contingencies (Note 10)                                                                       -

Stockholders deficit:
   Preferred stock: Class A, authorized 100,000 shares at
     $1.00 par value, -0- shares issued and outstanding (Note 11)                                             -
   Preferred stock: Class B, authorized 10,000,000 shares at
     $1.00 par value, -0- shares issued and outstanding (Note 11)                                             -
   Common stock: 100,000,000 shares authorized of
     $0.001 par value, 16,701,727 shares issued and
     outstanding                                                                                         17,641
   Additional paid-in capital (deficit)                                                               1,046,165
   Stock subscription receivable (Note 5)                                                              (125,000)
   Unearned stock-based compensation                                                                     (4,700)
   Accumulated deficit                                                                                 (959,897)
                                                                                               -----------------
     Total stockholders' deficit                                                                       ( 25,791)
                                                                                               -----------------

     Total liabilities and stockholders' deficit                                               $        108,139
                                                                                               =================
</TABLE>




              The accompanying notes are an integral part of these
                       consolidated financial statements.
                                       F-3
<PAGE>
                       VIPER NETWORKS, INC. AND SUBSIDIARY
                          (A Development Stage Company)
                      Consolidated Statements of Operations



<TABLE>
<CAPTION>
                                                                                                       From
                                                                                                   Inception on
                                                                                                   September 14,
                                                              Year ended December 31,              2000 Through
                                                      ---------------------------------------      December 31,
                                                            2002                  2001                 2002
                                                      -------------------  -------------------  -----------------
<S>                                                   <C>                  <C>                   <C>
Net revenues                                          $          18,265    $               -    $          18,265

Cost of revenues                                                 10,029                    -               10,029
                                                      ------------------   ------------------   -----------------

     Gross margin                                                 8,236                    -                8,236

General and administrative                                      565,424              354,666              958,942
                                                      ------------------   ------------------   -----------------

Loss from operations                                           (557,188)            (354,666)            (950,706)
                                                      ------------------   ------------------   -----------------

Other income (expenses)
     Realized loss on marketable securities                           -               (5,083)              (5,083)
     Interest expense                                            (5,738)              (6,384)             (12,378)
     Other income                                                 8,166                  104                8,270
                                                      ------------------   ------------------   -----------------
       Total other income (expenses)                              2,428              (11,363)              (9,191)
                                                      ------------------   ------------------   -----------------

Net loss                                              $        (544,760)    $       (366,029)    $       (959,897)
                                                      ==================   ==================   =================

Basic loss per share                                  $           (0.08)   $           (0.08)   $           (0.19)
                                                      ==================   ==================   =================

Weighted average number of
   shares outstanding                                 $       6,737,489            4,397,939            5,093,154
                                                      ==================   ==================   =================
</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 Stockholders' Deficit


<TABLE>
<CAPTION>
                                                                                                          Deficit
                                                                 Additional                             Accumulated
                                                                  Paid-In      Stock        Unearned     During the       Total
                           Preferred Stock      Common Stock       Capial   Subscriptions  stock-based   Development   Stockholders'
                          Shares    Amount    Shares     Amount   (Deficit)  Receivable    Compensation     Stage        Deficit
                        ---------- --------- --------   -------- ----------- -----------   ------------   ----------   -------------
<S>                     <C>         <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 Septmeber
 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)
Issuance of common
 stock for cash                 -          -    203,500      204     46,546           -              -             -         46,750
Issuance of common
 stock for related
 party aaccounts
 payable                        -          -     40,000       40      7,460           -              -             -          7,500
Issuance of common
 stock for services             -          - 10,220,876   10,221    616,008           -              -             -        626,229
Issurance of common
 stock for assets               -          -    962,133      962     55,251           -              -             -         56,213
Stock-based
 compensation                   -          -          -        -      4,700           -         (4,700)            -              -
Net loss for the
 year ended
 December 31, 2002              -          -          -        -          -           -              -      (554,760)      (554,760)
                       ----------- ---------- ---------  ------- -----------  -----------    -----------   -----------  ------------
Balance,
 December 31, 2002              -   $      - 17,640,689  $17,641 $1,046,165   $(125,000)    $   (4,700)   $ (959,897)  $   ( 25,791)
                       ===========  ======== =========== =======  ===========  ===========    ===========   ===========  ===========
</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 Cash Flows


<TABLE>
<CAPTION>
                                                                                                       From
                                                                                                   Inception on
                                                                                                   September 14,
                                                                Year Ended December 31,            2000 Through
                                                       ---------------------------------------     December 31,
                                                              2002                2001                 2002
                                                       ------------------  -------------------  ------------------
<S>                                                    <C>                  <C>                  <C>
Cash flows from operating activities:
Net loss                                               $        (554,760)  $         (366,029)   $      (959,897)
Adjustments to reconcile net loss to net cash
   used in operations:
   Depreciation                                                    7,164                4,558             11,722
   Amortization of notes payable discount                              -                1,078              1,334
   Interest accrual                                                5,738                3,442              9,180
   Stock based compensation                                      452,513              302,797            755,310
   Loss on sale of marketable securities                               -                5,083              5,083
   Changes in assets and liabilities:
    Other current assets                                            (250)                   -               (250)
    Accounts payable                                              11,611               (8,480)             3,131
    Accrued professional fees                                          -                    -             22,500
    Accounts payable related party                                34,758               15,185             57,418
    Taxes payable                                                    497                  819              1,316
                                                       ------------------  -------------------  -----------------
     Net cash used in operating activities                       (42,729)             (41,547)           (93,153)
                                                       ------------------  -------------------  -----------------
Cash flows from investing activities:
   Purchases of office furniture and equipment                    (5,500)              (5,777)           (11,277)
   Purchases of marketable securities                                  -              (15,044)           (15,044)
   Sales of marketable securities                                      -                9,961              9,961
                                                       ------------------  -------------------  ----------------  -
     Net cash used in investing activities                        (5,500)             (10,860)           (16,360)
                                                       ------------------  -------------------  -----------------
Cash flows from financing activities:
   Proceeds from issuance of common stock                         46,750               60,600            107,350
   Increase (decrease) in cash overdraft                               -               (7,343)                 -
   Cash acquired in reverse acquisition                                -                    -                 34
   Payments on capital lease obligations                               -               (1,704)            (1,704)
   Stock subscription deposits                                     6,071                  959              8,530
                                                       ------------------  -------------------  -----------------
     Net cash provided by financing activities                    52,821               52,512            114,210
                                                       ------------------  -------------------  -----------------
Net increase in cash                                               4,592                  105              4,697
Cash at the beginning of the period                                  105                    -                  -
                                                       ------------------  -------------------  -----------------
Cash at the end of the period                          $           4,697   $              105    $         4,697
                                                       ==================  ===================  =================

Supplemental schedule of cash flow activities
  Cash paid for:
    Interest                                           $               -   $            1,865    $         1,865
    Income taxes                                       $             465   $                -    $           465
  Non-cash investing and financial activities:
    Equipment acquired by capital lease                $               -   $            8,431    $        18,567
    Common stock issued for assets                     $          56,213   $                -    $        56,213
    Common stock issued in payment of
     services                                          $         626,229   $          158,584    $       784,812
    Common stock issued in payment of
     accounts payable to related party                 $           7,500   $            5,655    $        13,155
    Recapitalization resulting from reverse
     merger                                            $               -   $                -    $       (27,425)
</TABLE>
              The accompngying notes are an integal part of these
                      consolididated financial statements.
                                      F-6
<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  significant
               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. 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-7
<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  Statndards  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 recognizes  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 accounting for stock-based












                                      F-8

<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)

               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 13, 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, 2002 and 2001,  the Company  recognized
               $35,111  and  $396,402  and  $101,688  and  $207,109  of  expense
               relating  to the  grant  of  common  stock to  non-employees  and
               employees,  respectively,  for services which are included in the
               accompanying consolidated statements of operations.  The value of
               these  shares was  determined  based upon the  average of limited
               over the counter closing prices  subsequent to September 16, 2002
               and the sale of common stock in the private placements during the
               same periods.

          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 1,000,000 shares



                                      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)

          i.   Net loss per share (continued)

               of  common  stock  and  zero  warrants  potentially  issuable  at
               December 31, 2002 which were not included in the  computation  of
               net loss per share.

<TABLE>
<CAPTION>
                                                                                                       From
                                                                                                   Inception on
                                                                                                   September 14,
                                                               Year Ended December 31,             2000 Through
                                                       ---------------------------------------     December 31,
                                                              2002                2001                 2002
                                                       -------------------  ------------------  -------------------
<S>                                                     <C>                 <C>                  <C>
                      Net loss (numerator)             $         (554,760)  $        (366,029)  $        (959,897)

                      Weighted average shares
                          outstanding for basic
                          net loss per share
                          (denominator)                         6,737,489           4,397,939           5,093,154
                                                       -------------------  ------------------  -------------------

                      Per share amount                 $            (0.08)  $           (0.08)  $           (0.19)
                                                       ===================  ==================  ===================
</TABLE>

          j.   Concentrations of Risk

               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.

               The Company had one major customer which accounted for 82% of the
               revenue in the year ended December 31, 2002.

          k.   New Accounting Pronouncements

               In July 2002, the Financial  Accounting  Standards Board ("FASB")
               issued Statement of Financial  Accounting  Standard  ("SFAS") No.
               146,  "Accounting  for Costs  Associated  with  Exit or  Disposal
               Activities."  SFAS No. 146 provides  guidance on the  recognition
               and measurement of liabilities  associated with exit and disposal
               activities.  Under SFAS No. 146, liabilities for costs associated
               with exit or disposal  activities  should be recognized  when the
               liabilities  are  incurred  and  measured  at  fair  value.  This
               statement   iseffective   prospectively   for  exit  or  disposal
               activities after December 31, 2002. The adoption is not expected


                                      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)

          k.   New Accounting Pronouncements (continued)

               to have a material effect on the Company's  results of operations
               or financial condition.

               In November  2002,  the FASB issued  FASB  Interpretation  No. 45
               ("FIN 45"),  "Guarantor's  Accounting and Disclosure Requirements
               for Guarantees,  Including Indirect Guarantees of Indebtedness of
               Others."  FIN 45  requires  that a  liability  be recorded in the
               guarantor's  balance  sheet  upon  issuance  of a  guarantee.  In
               addition,  FIN 45 requires  disclosures about the guarantees that
               an entity has issued,  including a  rollforward  of the  entity's
               product  warranty   liabilities.   The  Company  will  apply  the
               recognition  provisions  of FIN 45  prospectively  to  guarantees
               issued after December 31, 2002. The disclosure  provisions of FIN
               45 are effective  for, and are  reflected in, the 2002  financial
               statements.  The  adoption  of FIN 45 is not  expected  to have a
               material  effect  on  the  Company's  results  of  operations  or
               financial condition.

               In November  2002,  the Emerging  Issues Task Force (EITF) issued
               Issue  No.  00-21,  "Accounting  for  Revenue  Arrangements  with
               Multiple  Deliverables."  This issue addresses  determination  of
               whether  an  arrangement  involving  more  than  one  deliverable
               contains  more than one unit of  accounting  and how  arrangement
               consideration  should be measured  and  allocated to the separate
               units of  accounting.  EITF Issue No. 00-21 will be effective for
               revenue  arrangements  entered into in fiscal  periods  beginning
               after June 15, 2003 or the Company may elect to report the change
               in accounting as a cumulative-effect  adjustment.  The Company is
               reviewing  EITF Issue No.  00-21 and has not yet  determined  the
               impact  this  issue  will  have  on  its  operating  results  and
               financial position.

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, 2002,  which has resulted in an accumulated
               deficit of $959,897 at December  31, 2002 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-11
<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.  The Company expects to need
               $100,000 to cover its expenses for the next twelve months.

Note 3 - Acquisitions

               During May 2002, the Company  purchased  substantially all of the
               property  and   equipment   of  ePhone,   Inc.   ("ePhone").   As
               consideration  for the  purchase,  the  Company  issued to ePhone
               162,133 shares of the Company's  Common Stock with a value of ten
               cents per  share,  based on recent  cash  sales of the  Company's
               Common Stock,  for an aggregate  purchase  price of $16,213.  The
               Company  also  issued  Common  Stock  purchase  warrants  for the
               purchase  162,133  shares of the Company's Common Stock at $0.50
               per share, as defined. No value was assigned to the warrants.

               During  November 2002, the Company  purchased a 49%  non-dilutive
               interest in PC Mailbox, Inc. ("PCmailbox").  As consideration for
               the purchase,  the Company issued to PCmailbox  800,000 shares of
               the  Company's  Common Stock with a value of five cents per share
               for an aggregate purchase price of $40,000.


NOTE 4 - COMPOSITION OF CERTAIN FINANCIAL STATEMENT CAPTIONS

                                                                December 31,
                                                                   2002
                                                             ------------------
               Other current assets:
               Prepaid expenses                              $           28,856
               Deposits                                                     250
                                                              ----------------
                                                                         29,106
                                                              =================
               Property and equipment, net:
               Computer equipment                            $           46,058
               Less accumulated depreciation and amortization           (11,722)
                                                             -----------------
                                                             $           34,336
                                                             ===================

NOTE 5 - 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, the
               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  were not
               declared.









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



NOTE 5 - 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 shares certificate is being held by the Company.

NOTE 6 - CAPITAL LEASES

               The  Company  leases  certain   equipment   under  capital  lease
               obligations with lease 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,
                                                    2002
                                            -----------------
               Computer equipment            $        18,567
               Less accumulated amortization          (7,481)
                                            -----------------
                                            $         11,086
                                            =================


               During Fiscal 2001, the Company  defaulted 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 has accrued $9,180 of interest as
               a current  liability based on a subsequent  settlement  agreement
               entered into with the leaser, during March 2003.





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



NOTE 7 - RELATED PARTY TRANSACTIONS

               During fiscal 2002, the Company's  shareholders incurred expenses
               on behalf of the Company in the amount of $33,581,  which will be
               repaid in the normal course of business.  During Fiscal 2002, the
               Company agreed to reimburse a shareholder  $12,000 and $1,200 for
               office  rental  and  utilities,  respectively,  for  the use of a
               portion of the shareholders personal residence.

               During Fiscal 2001, the Company's  shareholders incurred expenses
               on behalf of the  Company in the  amount of $7,939  which will be
               repaid  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 shareholder's personal residence.

               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.  During  April 2002,  the
               note was paid by the  issuance of 40,000  shares of Common  Stock
               and a cash payment of $7,500.

NOTE 8 - STOCK SUBSCRIPTION DEPOSIT

               As of December  31,  2002,  the  company had  received a total of
               $8,530 for the purchase of 426,500  shares of common  stock.  The
               shares were issued subsequent to December 31, 2002. The $8,530 is
               recorded as a stock subscription deposit at December 31, 2002.

NOTE 9 - INCOME TAXES

               Due  to  the  Company's  net  loss  position  from  inception  on
               September  14, 2000 to December 31, 2002,  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,
                                                           Year Ended December 31,            2000 Through
                                                     -----------------------------------      December 31,
                                                           2002                2001               2002
                                                     -----------------    --------------      ---------------
<S>                                                  <C>                   <C>                 <C>
                      Tax provision (benefit) at
                          statutory rate                         (35)%             (35)%               (35)%
                      State tax, net of federal
                          benefit                                 (1)%              (1)%                (1)%
                      Permanent differences                       29 %              29 %                28 %
                      Valuation allowance                          7 %               7 %                 8 %
                                                     -----------------    --------------      ---------------
                                                                   - %               - %                  - %
                                                     =================    ==============      ===============
</TABLE>

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

NOTE 9 - INCOME TAXES (continued)

                The components of net deferred tax assets are as follows:

                                                      December 31,
                                                         2002
                                                 -------------------
                Deferred tax assets:
                Net operating loss carryforward   $           71,696
                Other assets                                     673
                                                  ------------------
                                                              72,369
                Less valuation allowance                     (72,369)
                                                  ------------------
                                                  $                -
                                                  ==================

               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,  2002,  the  Company  had federal and state net
               operating loss  carryforwards  for tax purposes of  approximately
               $160,000 and  $176,000 which may be  available  to offset  future
               taxable  income and which,  if not used,  begin to expire in 2010
               and 2012, respectively.

NOTE 10 - 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, 2002 and from  inception
               on  September  14,  2000 to  December  31,  2002 was  $22,376 and
               $40,115, 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. In
               December  2002,  the Company  shareholders  increased  the shares
               authorized within the 2000 Plan by 10,500,000  shares.  Under the
               Plan,  the Company may grant stock options or awards at a maximum
               of 12,000,000 shares. At December 31, 2002, there were 11,000,000
               shares of the  Company's  Common Stock  available for grant under
               the 2000 Plan.

NOTE 11 - 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, 2002.


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



NOTE 11 - 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.
               There were no shares issued and outstanding at December 31, 2002.

NOTE 12 - 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  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.

               During  Fiscal 2002,  the Company  issued  203,400,  40,000,  and
               10,220,876  shares for cash,  satisfaction  of note with  related
               party, and in payments of services, respectively.

NOTE 13 - STOCK OPTIONS

               During  December  2002,  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  12,000,000 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



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



NOTE 13 - STOCK OPTIONS (continued)

               Committee") of the 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,  2002,  there  were  11,000,000  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, 2002
               and 2001 and changes during the periods is as follows:

<TABLE>
<CAPTION>
                                                                  Year ended December 31,
                                                 -------------------------------------------------------
                                                              2002                        2001
                                                 -------------------------------------------------------
                                                                   Weighted                  Weighted
                                                                    average                    average
                                                                   exercise                   exercise
                                                       Options       price       Options        price
                                                 --------------  -----------  ------------   -----------
<S>                                              <C>             <C>           <C>           <C>
              Outstanding at the
                beginning of the period                 750,000  $     0.110       300,000   $     0.110
                  Granted                               500,000        0.037       450,000         0.110
                  Exercised                                   -            -             -             -
                  Cancelled                            (250,000)       0.110             -             -
                                                 --------------               ------------
              Outstanding at the end of
                the period                            1,000,000  $     0.074       750,000   $     0.110
                                                 ==============               ============
              Vested at the end of the
                period                                  140,000                     60,000
              Exercisable at the end of
                period                                1,000,000                    750,000
              Weighted average fair value
                per option of options
                granted during the period                        $    0.0336                 $    0.0053
</TABLE>

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


NOTE 13 - STOCK OPTIONS (continued)

               The following table  summarizes  information  regarding  employee
               stock options outstanding at December 31, 2002.

<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>
  $  0.037              500,000                     5.0                  $     0.037                          -     $         0.037
  $  0.110              500,000                     3.6                  $     0.110                    140,000     $         0.110
---------------     -------------                                                              ------------------
                      1,000,000                     4.3                  $     0.074                    140,000     $         0.110
                    =============                                                              ==================
</TABLE>

               Stock-based  compensation is recognized using the intrinsic value
               method.  In  connection  with  the  grant  of  stock  options  to
               employees, the company recorded unearned stock-based compensation
               within  stockholders'  deficit  of $4,700  during  the year ended
               December  31,  2002  representing  the  difference   between  the
               estimated fair value of the common stock determined for financial
               reporting purposes and the exercise price of these options at the
               date of grant.

               At December 31, 2002, the unearned  stock-based  compensation  of
               $4,700 will be amortized over the vesting period of 5 years.  The
               amount of  stock-based  compensation  expense to be  recorded  in
               future  periods  could  decrease if options for which accrued but
               unvested compensation has been recorded are forfeited.

               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  31,2002 and 2001;  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,
                                                             2002                 2001                2002
                                                    --------------------   ------------------   ----------------
<S>                                                  <C>                   <C>                  <C>
                      Net loss:
                          As reported                           (554,760)  $         (336,029)  $      (959,897)
                          Pro forma                             (556,103)  $         (336,899)  $      (962,110)

                      Basic loss per share:
                          As reported                              (0.08)  $            (0.08)  $         (0.19)
                          Pro forma                                (0.08)  $            (0.08)  $         (0.19)
</TABLE>

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


NOTE 14 -SUBSEQUENT EVENTS

               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 Consolidate 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 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>

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


NOTE 14 - SUBSEQUENT EVENTS (continued)

               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.

               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.

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

NOTE 14 -SUBSEQUENT EVENTS (continued)

               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 of an additional  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.

               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 of an  additional  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.


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


NOTE 14 -SUBSEQUENT EVENTS (continued)

               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.

               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

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


NOTE 14 -SUBSEQUENT EVENTS (continued)

               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-23