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

                                   Form 10-KSB

                  Annual Report Pursuant to Section 13 or 15(d)
                     of the Securities Exchange Act of 1934

                   For the Fiscal Year Ended December 31, 2002

                        Commission File Number 000-28251

                             US DATA AUTHORITY, INC.
                 (Name of Small Business issuer in its Charter)

               Florida 65-0693150 (State or other jurisdiction of
        incorporation or organization) (IRS Employer Identification No.)

                              150 Americas Center
                              150 SE Second Avenue
                                    Suite 404
                                 Miami, Fl 33131
                    (Address of principal executive offices)

                                 (305) 777-0500
                           (Issuer's telephone number)

Securities Registered Pursuant to Section 12(b) of the Securities Exchange Act
of 1934:

                                      None

Securities Registered Pursuant to Section 12(g) of the Securities Exchange Act
of 1934:

                          Common Stock, $.02 Par Value

Check whether the issuer (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding
twelve 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. |X| Yes |_| No

<PAGE>

Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure will be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB. |_|

State issuer's revenues for the year ended December 31, 2002: $196,300.00

The aggregate market value of the voting stock held by non-affiliates, based
upon the closing sales price of the Common Stock on May 16, 2003, as reported on
the OTC Bulletin Board was approximately $2,700,000. Shares of Common Stock held
by each officer and director and by each person who owns 10 percent or more of
the outstanding Common Stock have been excluded in that such persons may be
deemed to be affiliates. This determination of affiliate status is not
necessarily a conclusive determination for other purposes

                      APPLICABLE ONLY TO CORPORATE ISSUERS

The number of shares outstanding of the registrant's common stock as of May 16,
2003 was 100,000,000.

                       DOCUMENTS INCORPORATED BY REFERENCE

                                      None

Transitional Small Business Disclosure Format (check one): Yes |_|  No |X|

<PAGE>

This Annual Report on Form 10-KSB contains forward looking statements meeting
the requirements of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934 (the "Exchange Act") which
involve substantial risks and uncertainties. All statements (other than the
statements of historical fact), assumptions, forecasts, anticipations and
expectations included or incorporated by reference in this Form 10-KSB are
forward looking statements. These forward looking statements are subject to
certain risks, uncertainties and assumptions. Should one or more of these risks
or uncertainties materialize, or should underlying assumptions prove to be
incorrect, actual results may vary materially from those anticipated, estimated
or projected. Some of those uncertainties and risks are detailed in Item 7,
"MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS - FACTORS THAT MAY AFFECT FUTURE RESULTS," and elsewhere in this Form
10-KSB. Forward looking statements can be identified by the use of words such as
"anticipate," "expect," "estimate," "project," "intend," "may," "should,"
"will," "would," plans," "believes," "predicts," "potential," "continue" or the
negatives of such words, and similar expressions or words are intended to
identify forward looking statements. Although we believe that the expectations
we include in such forward looking statements are reasonable, we cannot assure
you that these expectations will prove to be correct. The following discussion
and analysis should be read in conjunction with our financial statements and the
notes thereto appearing elsewhere in this Form 10-KSB. We disclaim any
obligation to update the forward looking statements contained herein, except as
may otherwise be required by law.

                                     PART I

Item 1.   Description of Business

                                   Background

      We were incorporated under the name "SunVest Resorts, Inc." on August 6,
1996, through the merger of Telshare International, Inc., a publicly held
Delaware corporation, and two Florida corporations, Colony Plaza Development,
Inc., and Cove Development, Inc. Telshare International, Inc., had ceased
operations in 1988, but maintained its publicly held status. Initially, we were
engaged in the real estate business. In late April 2000, we distributed all of
our assets (subject to liabilities) to our stockholders, and on May 1, 2000, we
effected a merger with US Data Authority, Inc., a privately held Florida
corporation. On June 23, 2000, we changed our name to US Data Authority, Inc.
The merger was accounted for financial reporting purposes as a purchase.

<PAGE>

      Since the merger in May 2000, and until the fourth quarter of 2001, we
pursued a business plan consisting primarily of utilizing our co-location in as
many as 38 locations on AT&T's nationwide network to provide bandwidth, Internet
access and supporting services and network management to small and medium size
business customers. This business proved to be highly competitive, with the
result that our revenues could not support the cost of maintaining our network
and our general overhead, and we continued to accumulate deficits. At the same
time, our efforts to reduce the largest component of the expense of maintaining
the network -- fees to AT&T -- were stymied due to a continuing billing dispute
with AT&T. This dispute began in early 2001 and culminated in AT&T disconnecting
our entire network on August 27, 2001. Overnight, we lost as much as 78% of our
customers and 90% of revenue we projected to realize during the third quarter
2001. We did manage to reconnect some Florida-based customers using alternative
circuits provided by Cable and Wireless and BellSouth Corporation.

      Faced with an uncertain future in the bandwidth resale and Internet access
business, in the aftermath of the events of September 11, 2001, and the
resulting surge in demand for data storage and security, management developed,
in the fourth quarter 2001, a new business plan. The plan is to use our existing
facilities and the arrangement with Hitachi Corporation to offer managed data
storage solutions to smaller and medium size business customers, i.e. become
what is known as a Managed Service Provider. The data storage services would be
sold through resellers and, secondarily, through distributors, where the
resellers are network providers who use our data storage solutions under a
private label or co-brand them with their own data storage offerings.

      To expedite the technical development of this plan, the Company explored
several options, including a potential merger or business alliance with a
start-up data storage business, the hiring of data storage consultants, and an
association with a telecommunications group who could warehouse the Company's
assets while developing a more cost efficient data facility. These efforts
proved totally ineffective and in fact led to the sale of leased Company assets
by the telecommunications group and a subsequent legal filing against them. See
Item 3--Legal Proceedings for a description of such litigation.

      The Company has entered into a preliminary relationship with a
Panamanian-based private business, Zona de Tecnologia y Telecomunicaciones, SA
("ZTT") whose primary purpose was to develop and market a complete suite of
offsite Information Technology ("IT") services, including data storage and
management, computer processing, and equipment collocation and management.
Currently, ZTT is in the process of completing the retrofit of a 50,000 square
foot facility in the Panamanian-

<PAGE>

based free zone, known as the City of Knowledge. When completed, because of its
close proximity to many of the world's largest communications networks, this
site will serve as a network access point ("NAP") and is planned to be finished
with engineering standards that exceed those here in the United States, and
suitable for customers in all majors areas of government, finance, education,
healthcare and entertainment. The Company believes that ZTT fits its goals in
developing data storage facilities and programs.

      On January 31, 2003, the Company entered into a preliminary agreement with
ZTT, pursuant to which the Company would purchase at least 80% of the total
issued and outstanding common shares of ZTT, in consideration for issuing to the
shareholders of ZTT an aggregate of up to 3,000,000 shares of preferred stock of
the Company and tendering $1.7 million in cash to ZTT, (ii) fund the $6 million
needed to complete the retrofitting of the ZTT Panama facility, and (iii) assume
certain liabilities of ZTT and issue up to 24 million shares of common stock of
the Company, in consideration for the renegotiation of the terms of the
outstanding debt obligations of ZTT. The consummation of the transactions
contemplated in the preliminary agreement by the Company are subject to the
approval of the shareholders of the Company, such approval to include the
authorization of additional shares of common stock of the Company, as well being
subject to additional conditions precedent. In accordance with the terms of the
preliminary agreement, in the event that the Company does not wish to proceed
with the consummation of the transactions, as a results of its due diligence
investigation, the Company shall have the right to terminate the preliminary
agreement. In the event of such termination, the Company shall have the right to
retain its equity interests in ZTT in consideration for the funds that it
provided to ZTT as of the date of the termination. To date, the Company has made
payments with respect to the transaction in an aggregate amount equal to $1.7
million. There are no assurances that the Company will be able secure adequate
funds to consummate the transaction with ZTT. Although the Company anticipates
an investment of approximately $4.9 million from its current private investors,
which will be used in part to fund the ZTT acquisition, there is no assurance
that such private investors will make such investment.

                          Planned Products and Services

      On-Line Data Storage. In the event the Company consummates the ZTT
acquisition, on-line data storage products will be developed by ZTT, which will
be one of the major focuses of our business. The ZTT facility has access to
unlimited network connectivity at costs representing a fraction of that in the
United States. Therefore, the Company would be able to offer a cost effective
secure data storage alternative and

<PAGE>

business continuance plan ("BCP") for many businesses wishing to protect their
data from subtrafuge whether internally or externally motivated, or through Acts
of God. In today's political and social climate, it is the Company's belief that
such an alternative will be readily received worldwide.

      Collocation and Processing. Because the ZTT facility will be among the
latest in design and engineering standards, the Company would be able to offer
an attractive cost-savings options for businesses needing additional processing
on a per-use basis, while saving on the necessary capital expenditure, and
supportive labor costs. Customers could house their own computers ("collocate")
within the ZTT facility with its multiply redundant power, air conditioning and
unlimited bandwidth and enjoy significant cost savings. They would have all of
this with the added benefit of having a complete suite of data storage service
available for them. Banks and all reporting, or personnel intensive groups, do
large volumes of processing and the Company is confident that when operational,
the ZTT facility will offer them a very cost effective outsource.

      Network Connectivity. We will offer high-speed network connectivity for
our customers through the major networks with which the ZTT facility connects.
These networks include most of the major US carriers, as well as the major
carriers servicing Asia, Central and South America, the Caribbean and Europe. It
is the Company's plan to offer all of our services on a usage basis because
there is an abundance of bandwidth, and not require customers to commit to
specific monthly bandwidth contracts, such as DSL, T1, T3 or OC3 and up. The
Company believes that this healthy, cost effective approach will assist in
securing many customers. As the network offering is already in place in the ZTT
facility, such an offering can begin when the ZTT facility retrofit is
completed.

                                 Future Strategy

      In light of the Company's failed relationship with AT&T and subsequent
loss of revenue, the Company committed itself to significantly reducing its
overhead, seek the funding necessary to establish a technology operational arm,
then support that group with management and marketing. We are still committed to
entering a business model that offers high profit margins based on the overall
low cost of operation in an economic free zone, in an area where skilled,
bilingual labor is priced far below the US. We will utilize the majority of the
proceeds from investment tendered in recent private equity placements for the
acquisition of ZTT. We believe that there are many businesses who will sorely
need our services, and many who will wish to "co-brand" and market them,
including telecommunications carriers and Internet Service Providers (ISP), who
could offer data

<PAGE>

storage for their many users wishing to store large files or the many businesses
that need a cost efficient data back-up and retrieval alternative.

Item 2. Description of Property.

      We do not own any real property. On May 16, 2003, the Company relocated
its executive offices to 150 Americas Center, 150 SE Second Avenue, Suite 404,
Miami, Florida 33131. This space is being provided to the Company by ZTT, free
of charge, until such time as the Company has entered into a lease agreement
with the landlord of the building. The Company expects that its rental expense
for its new office space will be reduced over its prior rental obligations.

Item 3. Legal Proceedings

      On August 6, 2001, AT&T, the Company's largest network provider filed suit
against the Company in the US District Court for the Southern District of
Florida, AT&T Corp. vs. US Data Authority, Inc. , Civ-01-8715, demanding payment
of $2,332,984 in total amount of outstanding charges. The Company and AT&T
reached a tentative settlement, however, the parties were unable to agree to the
terms of the documents designed to evidence and reflect the settlement. On
August 27, 2001, AT&T disconnected the USDA network at all of the 38 locations.
On September 7, 2001, the Company filed a Motion to Dismiss AT&T's complaint in
the US District Court for the Southern District of Florida and on November 6,
2001, the Company filed an Answer and Counterclaim to AT&T's complaint, also in
U. S. District Court for the District of Southern Florida. The Company's
counterclaim in the lawsuit demands damages in excess of $40 million for breach
of contract, breach of fiduciary duties, trade libel and fraud. In December,
2001, AT&T filed a Motion to Dismiss Counterclaim and the Company responded by
filing a Memorandum of Law in Opposition to Motion to Dismiss Counterclaim on
January 18, 2002. Counsel for AT&T recently requested a 30-day abatement of
proceedings in order to file what would amount to "corrective"

<PAGE>

documents with the Court relating to its Memorandum of Law filed on January 18,
202. On February 21, 2002, AT&T filed an Amended Complaint. The Company filed an
Answer and Affirmative Defenses to Amended Complaint on April 23, 2002. We
intend to defend this action vigorously and press to prevail in our
counterclaim. At the present time, the parties were ordered to mediation and the
parties are currently discussion the scope of the mediation.

      The Company is a defendant in a lawsuit filed August 1, 2001, in the
United States District Court for the District of Colorado, Webfinder Wireless,
Joseph Price and Clifford Price vs. US Data Authority, Inc., Dominick F. Maggio,
William Pierce and David Rappa , Civil Action No. 01 WM 1430. Plaintiffs allege
willful breach of contract and negligent misrepresentation, among other things,
stemming from the Company's agreement to install an OC-3 fixed fiber optic
connection to the plaintiffs' network in two mountain resorts in Southwestern
Colorado. The Complaint demands the return of the $32,400 deposit paid by the
plaintiffs to the Company and other unspecified damages. The parties are engaged
in negotiations to settle the case. We believe that the suit is without merit
and will vigorously move to have the suit dismissed in case settlement
negotiations fail.

      On June 21, 2001, the SEC contacted the Company by letter requesting the
Company to produce documents for an informal inquiry that the SEC is conducting
concerning several third parties. Pursuant to this request, the Company provided
the SEC with documents on July 3, 2001. Since that time, there has been no other
request made of the Company or comment tendered by the SEC.

      The Company is a defendant in a lawsuit filed on April 9, 2002, in the
District Court, Fourth Judicial District, County of Hennepin, State of
Minnesota, Sunrise International Leasing Corporation vs. Dominick F. Maggio.
Plaintiff alleges breach of contract, stemming from the Company's failure to
make payments under that certain Master Lease Agreement. The Complaint demands
full payment under the Master Lease Agreement and possession of the equipment
provided to the Company pursuant to the Agreement. The Plaintiff seeks damages
in the approximate amount of $65,000. The defendant has denied the complaint and
is currently awaiting a trial date.

      On April 15, 2003, the Company filed a civil complaint (the "Complaint")
against G.E.L. International, L.C. ("GEL International"), Gregory E. Lopez, and
Mario Perez, a member of the Company's Board of Directors, in the Circuit Court
of the 11th Judicial Circuit in and for Miami-Dade County, Florida (the "Circuit
Court"). The Complaint alleged, among other things, that GEL and Lopez had
converted to their own use personal property belonging to the Company and that
Mr. Perez, while a member of the Company's Board of Directors, conspired with
the other defendants to convert the Company's furniture, fixtures and equipment
by either permitting GEL to retain such

<PAGE>

property or by selling such property to third parties. The complaint further
alleged that Mr. Perez's alleged conspiracy was motivated by a desire to delay
or reduce the amount of an investment in the Company which Mr. Perez and others
had undertaken to make, and that Mr. Perez's conspiracy may have effected both a
conversion and civil theft causing damage to the Company, including the Company
being unable to meet its obligations to lessors with respect to certain of the
equipment and being subjected to damage claims and, potentially, criminal
claims. At the direction of the Company, the Complaint was not served upon Mr.
Perez. On April 25, 2003, a "Notice of Dropping Party" was filed on behalf of
the Company with the Circuit Court dropping Mr. Perez from the Complaint. The
claims against GEL International and Gregory E. Lopez remain in effect.

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

      No matter was submitted to a vote of security holders during the fourth
quarter of the fiscal year covered by this report.

                                     PART II

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

      Our common stock began trading on the OTC Bulletin Board under the symbol
"USDA" during the second quarter of 2000 ("USDAE" since April 2003). The
following table sets forth the range of reported high and low bid per share
prices for the common stock for the periods indicated. The quotations reflect
inter-dealer prices, with retail mark-ups, mark-downs or commissions, and may
not represent actual transactions.

Fiscal 2001:                                   High   Low
                                               -----  ----
          1st Quarter                          1.13   1.06
          2nd Quarter                           .37    .31
          3rd Quarter                           .22    .14
          4th Quarter                           .33    .30

Fiscal 2002:

          1st Quarter                           .40    .17
          2nd Quarter                           .50    .11
          3rd Quarter                           .14    .07
          4th Quarter                           .09    .03

Fiscal 2003

          1st Quarter                            .08   .05

<PAGE>

                                     Holders

As of March 31, 2003, we had approximately 909 holders of record of our common
stock.

                                 Dividend Policy

      We have never declared or paid any cash dividends on our capital stock. We
currently intend to retain future earnings, if any, to finance the expansion of
our business, and we do not expect to pay any cash dividends in the foreseeable
future. The decision whether to pay cash dividends on our common stock will be
made by our board of directors, in their discretion, and will depend on our
financial condition, operating results, capital requirements and other factors
that the board of directors considers significant.

                     Recent Sales of Unregistered Securities

      During the last three years, we have issued unregistered securities to the
persons and in the manner described below. None of these transactions involved
any underwriters, underwriting discounts or commissions, except as specified
below, or any public offering, and we believe that each transaction was exempt
from the registration requirements of the Securities Act of 1933 by virtue of
Section 4(2) thereof and/or Regulation D promulgated thereunder. All recipients
had adequate access, through their relationship with us, to information about
us.

(1)   May 2000.

      (a)   Securities sold:

            (i)   Date: May 1, 2000.

            (ii)  Title of Securities: Common Stock

            (iii) Amount: 2,500,000 shares.

      (b)   Underwriters and other purchasers:

            The purchaser was:

            Winspire Venture Capital, LLC.

<PAGE>

      (c)   Consideration:

            The aggregate offering price was $500,000 in cash.

      (d)   Exemption from registration claimed. This transaction was exempt
            under Section 4(2) of the Securities Act and Rule 506 thereunder, as
            a sale to an accredited investor not involving any general
            solicitation. The Manager of Winspire Venture Capital, LLC, was
            Melvyn B. Siegel, then a director of the Company, and each of its
            members was known to him, each has a net worth or an annual income
            to qualify as an accredited investor and, in addition, is
            experienced in financial or business matters.

      (e)   Use of Proceeds: The proceeds were used for general corporate
            purposes.

(2)   May - June 2000.

      (a)   Securities sold:

            (i)   Date: Various dates in May and June 2000.

            (ii)  Title of Securities: Common Stock

            (iii) Amount: 2,238,375 shares.

      (b)   Underwriters and other purchasers:

            The purchasers were:

            Thomas Christopher, LLC, Norman Berman, Durban Capital Group, LLC,
            Hemisphere Tour, Inc., RLJ Enterprises, LLC, Steve Gurland and
            Michael Cutler.

      (c)   Consideration:

            The aggregate offering price was $906,350 in cash.

      (d)   Exemption from registration claimed. This transaction was exempt
            under Section 4(2) of the Securities Act and Rule 506 thereunder, as
            a sale to accredited investors not involving any general
            solicitation. Michael Cutler was and is a director of the Company.
            Norman Berman and Steve Gurland were all known to a director of the
            Company, each has a net worth or an annual income to qualify as an
            accredited investor and, in addition, is experienced in financial or
            business matters. The members of Thomas Christopher, LLC, Durban
            Capital Group, LLC, and RLJ Enterprises, LLC, and the shareholders
            of Hemisphere Tour, Inc., were known to a director of the Company,
            each has a net worth or an annual income to qualify as an accredited
            investor and, in addition, is experienced in financial or business
            matters.

      (e)   Use of Proceeds: The proceeds were used for general corporate
            purposes.

(3)   June 2000.

      (a)   Securities Sold:

            (i)   Date: June 30, 2000.

<PAGE>

            (ii)  Title of Securities: A Warrant to purchase 66,667 shares of
                  Common Stock.

      (b)   Underwriters and other purchasers:

            The purchaser was:

            Cisco Systems Capital Corporation.

      (c)   Consideration:

            The warrant was issued in a transaction whereby we entered into a
            capital lease with Cisco Systems Capital Corporation. The warrant is
            exercisable on or before June 30, 2005, at $7.17 per share, subject
            to certain anti-dilution and exercise price protection provisions.

      (d)   Exemption from registration claimed. This transaction was exempt
            under Section 4(2) of the Securities Act and Rule 506 thereunder, as
            a sale to accredited investors not involving any general
            solicitation. Cisco Systems Capital Corporation is a wholly-owned
            subsidiary of Cisco Systems Corporation, a Fortune 200 public
            company.

(4)   June - July 2000.

      (a)   Securities sold:

            (i)   Date: Various dates in June and July 2000.

            (ii)  Title of Securities: Common Stock

            (iii) Amount: 1,005,000 shares.

      (b)   Underwriters and other purchasers: The purchasers were: Windforms,
            LLC, Frangipanni Partners, LLC, USDA Investments, LLC, RMSDS, LLC,
            Bluewater Investment, LLC and Andy Siegel.

      (c)   Consideration:

            The aggregate offering price was $502,500 in cash.

      (d)   Exemption from registration claimed. This transaction was exempt
            under Section 4(2) of the Securities Act and Rule 506 thereunder, as
            a sale to accredited investors not involving any general
            solicitation. Mr. Siegel was well known to a director of the
            Company, has a net worth or an annual income to qualify as an
            accredited investor and, in addition, is experienced in financial or
            business matters. The members of Windforms, LLC, Frangipanni
            Partners, LLC, USDA Investments, LLC, RMSDS, LLC, and Bluewater
            Investment, LLC, were known to a director of the Company, each has a
            net worth or an annual income to qualify as an accredited investor
            and, in addition, is experienced in financial or business matters.

      (e)   Use of Proceeds. The proceeds were used for general corporate
            purposes.

<PAGE>

(5)    July 2000.

      (a)   Securities sold:

            (i)   Date: Various dates in July 2000.

            (ii)  Title of Securities: Common Stock

            (iii) Amount: 633,333 shares.

      (b)   Underwriters and other purchasers:

            The purchasers were:

            Raymond J. Markman, Joseph E. and Greta Shamy, Daniel Shamy, Mark
            Reynolds, Frankel Family Partnership, Gary Stackarowski, and David
            P. and Janet Lonski.

      (c)   Consideration:

            The aggregate offering price was $475,000 in cash.

      (d)    Exemption from registration claimed. This transaction was exempt
            under Section 4(2) of the Securities Act and Rule 506 thereunder, as
            a sale to accredited investors not involving any general
            solicitation. Each of Messrs. Markman, Shamy and Lonski was then a
            director of the Company, Mr. Daniel Shamy is the son of Joseph E.
            Shamy, and each of the other investors (including the partners of
            the Frankel Family Partnership) was known to a director of the
            Company, each has a net worth or an annual income to qualify as an
            accredited investor and, in addition, is experienced in financial or
            business matters.

      (e)   Use of Proceeds. The proceeds were used for general corporate
            purposes.

(6)   August 2000.

      (a)   Securities sold:

            (i)   Date: August 12, 2000

            (ii)  Title of Securities: Common Stock

            (iii) Amount: 120,000 shares.

      (b)   Underwriters and other purchasers:

            The purchasers were:

            Ronald Jenson and James Forsythe.

      (c)   Consideration:

            The aggregate offering price was $120,000 in cash.

      (d)   Exemption from registration claimed. This transaction was exempt
            under Section 4(2) of the Securities Act and Rule 506 thereunder, as
            a sale to accredited investors not involving any general
            solicitation. Each of the investors was known to an executive
            officer of the Company, has a net worth or an annual income to
            qualify as an accredited investor and, in addition, is experienced
            in financial or business matters.

<PAGE>

      (e)   Use of Proceeds. The proceeds were used for general corporate
            purposes.

(7)   September 2000.

      (a)   Securities sold:

            (i)   Date: September 11, 2000

            (ii)  Title of Securities: Common Stock and warrants

            (iii) Amount: 450,000 shares of Common Stock and warrants to
                  purchase an additional 450,000 shares of Common Stock at $7.25
                  per share, exercisable within two (2) years after their
                  issuance.

      (b)   Underwriters and other purchasers:

            The purchasers were:

            Tradeways, Ltd. and Paul Klapper.

      (c)   Consideration:

            The aggregate offering price was $900,000 in cash.

      (d)   Exemption from registration claimed. This transaction was exempt
            under Section 4(2) of the Securities Act and Rule 506 thereunder, as
            a sale to accredited investors not involving any general
            solicitation. Mr. Klapper and the sole principal of Tradeways, Ltd.
            were known to a director of the Company, each has a net worth or an
            annual income to qualify as an accredited investor and, in addition,
            is experienced in financial or business matters.

      (e)   Use of Proceeds. The proceeds were used for general corporate
            purposes.

(8)   September 2000.

      (a)   Securities sold:

            (i)   Date: September 29, 2000

            (ii)  Title of Securities: Common Stock and warrants

            (iii) Amount: 60,000 shares of Common Stock and warrants to purchase
                  an additional 60,000 shares of Common Stock at $7.25 per
                  share, exercisable within two (2) years after their issuance.

      (b)   Underwriters and other purchasers:

            The purchasers were:

            The Z. Jeannette Rita Trust, Thomas and Nancy Philips, and Michael
            Dolan.

      (c)   Consideration:

            The aggregate offering price was $180,000 in cash.

      (d)   Exemption from registration claimed. This transaction was exempt
            under Section 4(2) of the Securities Act and Rule 506 thereunder, as
            a sale to accredited investors not involving any general
            solicitation. Each of the investors was well known to an executive
            officer of the Company, each has a net worth or an annual income to
            qualify as an accredited investor and, in addition, is

<PAGE>

            experienced in financial or business matters.

      (e)   Use of Proceeds. The proceeds were used for general corporate
            purposes.

(9)   December 2000.

      (a)   Securities sold:

            (i)   Date: December 18, 2000

            (ii)  Title of Securities: Common Stock

            (iii) Amount: 27,000 shares.

      (b)   Underwriters and other purchasers:

            The purchasers were:

            Amerivet Securities, Inc. and Dr. Robert Klein.

      (c)   Consideration:

            The aggregate offering price was $40,500 in cash.

      (d)   Exemption from registration claimed. This transaction was exempt
            under Section 4(2) of the Securities Act and Rule 506 thereunder, as
            a sale to accredited investors not involving any general
            solicitation. Dr. Klein and the principals of Amerivet Securities,
            Inc. were known to an executive officer of the Company, each has a
            net worth or an annual income to qualify as an accredited investor
            and, in addition, is experienced in financial or business matters.

      (e)   Use of Proceeds. The proceeds were used for general corporate
            purposes.

(10)  March 8, 2001.

      (a)   Securities sold:

            (i)   Date: March 8, 2001

            (ii)  Title of Securities: Series A Convertible Preferred Stock

            (iii) Amount: 1,250,000 shares.

      (b)   Underwriters and other purchasers:

            The purchasers were:

            Joseph E. Shamy and David P. Lonski

      (c)   Consideration:

            The shares were exchanged for the outstanding principal and accrued
            interest of two convertible promissory notes, in the principal
            amount of $200,000 and $50,000, respectively, held by Mr. Shamy and
            Mr. Lonski, respectively, dated February 15, 2001.

      (d)   Exemption from registration claimed. This transaction was exempt
            under Section 4(2) of the Securities Act and Rule 506 thereunder, as
            a sale to accredited investors not involving any general
            solicitation. Each of Messrs. Shamy and Lonski was then a director
            of the Company.

<PAGE>

(11)   February - April 2001.

(a) Securities sold:

            (i) Date: February 5, 2001 and April 5, 2001

            (ii)  Title of Securities: A warrant, a 9-3/4% convertible
                  debenture, and conversion warrants

            (iii) Amount: One two-year warrant granting the holder the right to
                  purchase 250,000 shares of the Common Stock of the Company at
                  the lesser of $4.00 or 80% of the lowest trading price of the
                  Common Stock during the 30-day period prior to holder's
                  election to exercise, one two-year debenture convertible into
                  Common Stock at the rate of the lesser of $1.40 or 78% of the
                  lowest trading price of the Common Stock during the 30-day
                  period prior to the holder's election to convert, and warrants
                  to purchase five (5) times the number of shares due the holder
                  upon conversion of the debenture exercisable at the price
                  equal to the conversion price under the debenture. On March
                  20, 2002, the terms of warrant was extended to February 7,
                  2003, and the $4.00 and $1.40 indicators of the conversion
                  price and the exercise price were reduced to $.35. On April
                  17, 2002, the holder did convert $10,000 of the principal
                  amount of the debenture into 91,575 shares of the Common
                  Stock.

      (b)   Underwriters and other purchasers:

            The purchaser was:

            La Jolla Cove Investors, Inc.

      (c)   Consideration:

            The aggregate offering price was $62,500 for the warrant and
            $200,000 for the convertible debenture and the conversion warrants.
            On November 29, 2001, the holder advanced an additional $10,000,
            raising the face amount of the convertible debenture to $210,000.

      (d)   Exemption from registration claimed. This transaction was exempt
            under Section 4(2) of the Securities Act and Rule 506 thereunder, as
            a sale to accredited investors not involving any general
            solicitation. La Jolla Cove Investors, Inc. is an institution not
            formed for the specific purpose of acquiring these securities and
            has total assets in excess of $5,000,000.

      (e)   Use of Proceeds. The proceeds were used for general corporate
            purposes.

(12)  March 2000.

      (a)   Securities sold:

            (i)   Date: March 19, 2001

            (ii)  Title of Securities: Common Stock

<PAGE>

            (iii) Amount: 526,316 shares.

      (b)   Underwriters and other purchasers:

            The purchasers were:

            IDT Fund, Ltd. IDT Fund 13.

      (c)   Consideration.

            The aggregate offering price was $200,000 in cash.

      (d)   Exemption from registration claimed. This transaction was exempt
            under Section 4(2) of the Securities Act and Rule 506 thereunder, as
            a sale to accredited investors not involving any general
            solicitation. IDT Fund, Ltd. and IDT Fund 13 are institutions not
            formed for the specific purpose of acquiring these securities and
            each has total assets in excess of $5,000,000.

      (e)   Use of Proceeds. The proceeds were used for general corporate
            purposes.

(13)  March 2001.

      (a)   Securities sold:

            (i)   Date: March 6, 2001.

            (ii)  Title of Securities: A warrant to purchase 28,751 shares of
                  Common Stock, at $7.25 per share, exercisable within two (2)
                  years after its issuance.

      (b)   Underwriters and other purchasers:

            The purchaser was:

            Robert Valente.

      (c)   Consideration:

            Financial consulting services with a value of $10,000.

      (d)   Exemption from registration claimed. This transaction was exempt
            under Section 4(2) of the Securities Act and Rule 506 thereunder.
            Mr. Valente has had annual income in excess of $200,000 in the past
            three years.

(14)  April 2001.

      (a)   Securities sold:

            (i)   Date: April 27, 2001

            (ii)  Title of Securities: $550,000, 8% convertible debenture.

            (iii) Amount: One convertible debenture and warrants to purchase
                  500,000 shares of Common Stock and one placement warrant to
                  purchase 125,000 shares of Common Stock, each at $.70 per
                  share each and exercisable within two years of issuance.

      (b)   Underwriters and other purchasers:

            The purchaser was:

<PAGE>

            Thomson Kernaghan & Co.

      (c)   Consideration:

            The aggregate offering price was $550,000 in cash. Thomson Kernaghan
            & Co has acted as its own placement agent and received a placement
            fee of $50,000.

      (d)   Exemption from registration claimed. This transaction was exempt
            under Section 4(2) of the Securities Act and Rule 506 thereunder, as
            a sale to accredited investors not involving any general
            solicitation. Thomson Kernaghan & Co. is an institution not formed
            for the specific purpose of acquiring these securities and has total
            assets in excess of $5,000,000.

      (e)   Use of Proceeds. The proceeds were used for general corporate
            purposes.

(15)  May 2001.

      (a)   Securities sold:

            (i)   Date: May 23, 2001

            (ii)  Title of Securities: Common Stock and Warrants

            (iii) Amount: 12,000,000 shares and 30,000,000 warrants (reduced to
                  10,000,000 warrants by agreement, dated February 19, 2002) to
                  purchase shares of Common Stock of the Company at $.10 per
                  share. The Board of Directors granted the purchasers
                  registration rights with respect to 12,000,000 shares upon the
                  filing of a registration statement by the Company within 90
                  days of purchase. As of May 20, 2003, the Company is in
                  default in its obligations to register such shares.

      (b)   Underwriters and other purchasers:

            The purchasers were:

            AB Financial Services, LLC, Joseph E. Shamy and David P. Lonski
            (with all the warrants) and Jennifer Kronenberg and John Glucken and
            Bonnie Brumber (without any warrants).

      (c)   Consideration:

            The aggregate offering price was $600,000 in cash.

      (d)   Exemption from registration claimed. This transaction was exempt
            under Section 4(2) of the Securities Act and Rule 506 thereunder, as
            a sale to accredited investors not involving any general
            solicitation. Messrs. Shamy and Lonski were directors of the
            Company. The members of AB Financial Services, LLC, and each of the
            other investors were known to an executive officer of the Company,
            each has a net worth or an annual income to qualify as an accredited
            investor and, in addition, is experienced in financial or business
            matters.

      (e)   Use of Proceeds. The proceeds were used for general corporate
            purposes.

(16)  July 2001.

      (a)   Securities sold:

            (i)   Date: July 3, 2001

            (ii)  Title of Securities: Common Stock

            (iii) Amount: 3,847,732 shares. The purchasers were assigned the
                  right to

<PAGE>

                  purchase these shares from AB Financial Services, LLC, which,
                  under the Securities Purchase Agreement with the Company,
                  dated May 23, 2001, was entitled to purchase an additional
                  28,000,000 shares of Common Stock on or before September 30,
                  2001 (extended by mutual consent from June 20, 2001) at $.15
                  per share.

      (b)   Underwriters and other purchasers:

            The purchasers were:

            WealthHarbor Capital Group, LLC and Dr. Malcolm R. Currie.

      (c)   Consideration:

            The aggregate offering price was $557,160 in cash.

      (d)   Exemption from registration claimed. This transaction was exempt
            under Section 4(2) of the Securities Act and Rule 506 thereunder, as
            a sale to accredited investors not involving any general
            solicitation. The members of WealthHarbor Capital Group, LLC and Dr.
            Currie were known to an executive officer of the Company, each has a
            net worth or an annual income to qualify as an accredited investor
            and, in addition, is experienced in financial or business matters.

      (e)   Use of Proceeds. The proceeds were used for general corporate
            purposes.

(17)  August 2001.

      (a)   Securities sold:

            (i)   Date: various dates in August 2001

            (ii)  Title of Securities: Common Stock and warrants

            (iii) Amount: 4,500,000 shares and warrants to purchase an
                  additional 4,500,000 shares of Common Stock at $.36 per share,
                  exercisable within two (2) years after issuance.

      (b)   Underwriters and other purchasers:

            The purchasers were:

            Michael A. Cutler, David P. Lonski, Davis Group, LLC, Raymond J.
            Markman and Joseph E. Shamy

      (c)   Consideration:

            The aggregate offering price was $450,000 in cash.

      (d)   Exemption from registration claimed. This transaction was exempt
            under Section 4(2) of the Securities Act and Rule 506 thereunder, as
            a sale to accredited investors not involving any general
            solicitation. Mr. Cutler was and is a director of the Company. Each
            of Messrs. Lonski, Markman and Shamy was then a director of the
            Company. The members of Davis Group, LLC, were well known to an
            executive officer of the Company, each has a net worth or an annual
            income to qualify as an accredited investor and, in addition, is

<PAGE>

            experienced in financial or business matters.

      (e)   Use of Proceeds. The proceeds were used for general corporate
            purposes.

(18)  October 2001.

      (a)   Securities sold:

            (i)   Date: October 18, 2001

            (ii)  Title of Securities: Common Stock with registration rights
                  with respect to 2,000,000 of the shares

            (iii) Amount: 3,133,33 shares.

      (b)   Underwriters and other purchasers:

            The purchaser was:

            Charles J. Molinari. On November 19, 2001, Mr. Molinari transferred
            2,500,000 shares, together with the registration rights attached to
            2,000,000 of such shares, to Viking Ventures, LLC, an entity of
            which he is the Manager and 50% member.

      (c)   Consideration:

            The aggregate offering price was $210,000 in cash.

      (d)   Exemption from registration claimed. This transaction was exempt
            under Section 4(2) of the Securities Act and Rule 506 thereunder, as
            a sale to accredited investors not involving any general
            solicitation. Mr. Molinari, a current director of the Company, was
            well known to a director of the Company, has a net worth or an
            annual income to qualify as an accredited investor and, in addition,
            is experienced in financial or business matters.

      (e)   Use of Proceeds: The proceeds were used for general corporate
            purposes.

(19)  November 2001 and April 2002.

      (a)   Securities sold:

            (i)   Date: November 5, 2001 and April 5, 2002

            (ii)  Title of Securities: Common Stock

            (iii) Amount: 1,500,000 shares and 1,500,000 shares respectively.

      (b)   Underwriters and other purchasers:

            The purchaser was:

            Viking Ventures, LLC.

      (c)   Consideration:

            The shares were issued to purchaser for financial consulting
            services with a value of $255,000.

      (d)   Exemption from registration claimed. This transaction was exempt
            under Section 4(2) of the Securities Act and Rule 506 thereunder, as
            a sale to accredited investors not involving any general
            solicitation. The principal of

<PAGE>

            Viking Ventures, LLC, Charles J. Molinari, had a prior investment in
            the Company (see 18 above) and each of the principals in Viking
            Ventures, LLC, has a net worth or annual income to qualify as an
            accredited investor and, in addition, is experienced in financial or
            business matters.

(20)  November 2001.

      (a)   Securities sold:

            (i)   Date: November 19, 2001

            (ii)  Title of Securities: Common Stock

            (iii) Amount: 1,500,000 shares.

      (b)   Underwriters and other purchasers:

            The purchaser was:

            Dominick F. Maggio.

      (c)   Consideration:

            The shares were issued to purchaser upon the exercise of an option
            for the exercise price of $10,000.

      (d)   Exemption from registration claimed. This transaction was exempt
            under Section 4(2) of the Securities Act and Rule 506 thereunder, as
            a sale to accredited investors not involving any general
            solicitation. Mr. Maggio was and is an executive officer of the
            Company.

(21)  November 2001.

      (a)   Securities sold:

            (i)   Date: November 19, 2001.

            (ii)  Title of Securities: Common Stock

            (iii) Amount: 1,400,000 shares.

      (b)   Underwriters and other purchasers:

            The purchaser was:

            Premier Advisors, Inc.

      (c)   Consideration:

            Business and financial consulting services with a value of $105,000.

      (d)   Exemption from registration claimed. This transaction was exempt
            under Section 4(2) of the Securities Act and Rule 506 thereunder, as
            a sale to accredited investors not involving any general
            solicitation. The principal of Premier Advisors, Inc., was known to
            an executive officer of the Company.

(22)  November 2001.

      (a)   Securities sold:

            (i) Date: November 19,2001.

<PAGE>

            (ii)  Title of Securities: Common Stock

            (iii) Amount: 600,000 shares.

      (b)   Underwriters and other purchasers:

            The purchaser was:

            Daniel D. Dinur, Esquire.

      (c)   Consideration:

            Legal services rendered to us with a value of $45,000.

      (d)   Exemption from registration claimed. This transaction was exempt
            under Section 4(2) of the Securities Act and Rule 506 thereunder, as
            a sale to accredited investors not involving any general
            solicitation. Mr. Dinur was well known to the directors and
            executive officers of the Company, has a net worth or an annual
            income to qualify as an accredited investor and, in addition, is
            experienced in financial or business matters.

(23)  October 2001 - January 2002.

      (a)   Securities sold:

            (i)   Date: Various, during October, November and December 2001 and
                  January 2002.

            (ii)  Title of Securities: Common Stock

            (iii) Amount: 10,609,325 shares.

      (b)   Underwriters and other purchasers:

            The purchasers were:

            Jerome Cohen, Douglas Cole, James Damato, Christopher Dunn, Reina
            Ender, Donald Ferreri, Bruce Fischer, Fisted Dove Excavating, Inc.,
            Bernard Friedman, Janet Galbo, L.R. Gallo, Charles Ghirardi, Marc
            Kreamer, Michael Lesser, Charles J. Molinari, Jaydee Price-Kramer,
            Edward Riley, Troy Schneeweis, Kenneth Stevens, Cynthia Testa,
            Undistributed Ink, LLC, Kent Vandewater, Vee Ann, Inc., Donald
            Weidenfeld, Peck and Green Weiss, Allen Ancell, August Falbo,
            Christopher Gisonna, Louis Mansueti, David Rappa, Edward Riley,
            Jeannette Rita, Robert Sepos, Weidenfeld Ltd., and Barry Weisman.

      (c)   Consideration:

            The aggregate offering price was $813,750.

      (d)   Exemption from registration claimed. This transaction was exempt
            under Section 4(2) of the Securities Act and Regulation D thereunder
            as a sale not involving any general solicitation either to the
            accredited investors or to purchasers that are not accredited
            investors (not exceeding 35 in number) in compliance with such
            Regulation D.

      (e)   Use of Proceeds. The proceeds were used for general corporate
            purposes.

<PAGE>

(24)  December 2001.

      (a)   Securities sold.

            (i)   Date: December 14, 2001.

            (ii)  Title of Securities: Common stock

            (iii) Amount: 526,316 shares.

      (b)   Underwriters and other purchasers:

            The purchaser was:

            IDT Fund, Ltd.

      (c)   Consideration:

            The shares were issued to IDT Fund, Ltd. in settlement of a dispute
            relating to the Company's failure to register the shares of Common
            Stock purchased by IDT Fund, Ltd. and IDT Fund 13 on March 19, 2001.

      (d)   Exemption from registration claimed. This transaction was exempt
            under Section 4(2) of the Securities Act and Rule 506 thereunder, as
            a sale to accredited investors not involving any general
            solicitation. IDT Fund, Ltd. is an institution not formed for the
            specific purpose of acquiring these securities and has total assets
            in excess of $5,000,000.

      (e)   Use of Proceeds: The proceeds were used for general corporate
            purposes.

(25)  December 2001.

      (a)   Securities sold:

            (i)   Date: December 31, 2001.

            (ii)  Title of Securities: Common Stock

            (iii) Amount: 1,500,000 shares.

      (b)   Underwriters and other purchasers:

            The purchaser was:

            Thomson Kernaghan & Co.

      (c)   Consideration:

            The shares were exchanged for (i) the outstanding principal and
            accrued interest under an 8% $550,000 convertible debenture, (ii)
            two warrants to purchase 625,000 shares of Common Stock in the
            aggregate and (iii) the waiver by the purchaser of its rights under
            the Registration Rights Agreement, dated April 27, 2001.

      (d)   Exemption from registration claimed. This exchange is exempt under
            Section 3(a)(9)of Securities Act as an exchange by the issuer with
            its existing security holders exclusively where no commission or
            other remuneration is paid for soliciting the exchange. In addition,
            the transaction is exempt under Section 4(2) of the Securities Act
            and Rule 506 thereunder, as a sale to accredited

<PAGE>

            investors not involving any general solicitation.

(26)  January 2002.

      (a)   Securities sold:

            (i)   Date: January 17, 2002.

            (ii)  Title of Securities: Common Stock

            (iii) Amount: 2,590,000 shares.

      (b)   Underwriters and other purchasers:

            The purchasers were:

            Melvyn B. Siegel, Harvey Birdman, Bonita Hirsch, Raymond J. Markman
            and Vacation Investment, LLC

      (c)   Consideration:

            The shares of Common Stock were issued to each of the purchasers
            pursuant to loan modification arrangements entered into with each of
            Messrs. Siegel, Birdman and Markman. Under the loan modification
            arrangements, each agreed to extend for one year the terms of their
            respective loans to the Company, to forgive accrued interest for the
            first year of the loans, and to waive interest during the second
            year of the loans. A portion of the shares issuable to Mr. Birdman
            were issued to Ms. Hirsch and Vacation Investment.

      (d)   Exemption from registration claimed. This transaction was exempt
            under Section 4(2) of the Securities Act and Rule 506 thereunder, as
            a sale to accredited investors not involving any general
            solicitation. Mr. Markman was a director of the Company, Mr. Siegel
            is a major investor with a pre-existing relationship with the
            Company and Mr. Birdman, Ms. Hirsch and the members of Vacation
            Investments, LLC, were well known to the directors of the Company,
            each has a net worth or an annual income to qualify as an accredited
            investor and, in addition, is experienced in financial or business
            matters.

(27)  February 2002.

      (a)   Securities sold:

            (i)   Date: February 5, 2002.

            (ii)  Title of Securities: Common Stock

            (iii) Amount: 2,916,667 shares.

      (b)   Underwriters and other purchasers:

            The purchaser was:

            M. Mario Perez

      (c)   Consideration:

            The aggregate offering price was $350,000. Mr. Perez acted as his
            own placement agent and received a placement fee of $35,000.

<PAGE>

      (d)   Exemption from registration claimed. This transaction was exempt
            under Section 4(2) of the Securities Act and Rule 506 thereunder, as
            a sale to accredited investors not involving any general
            solicitation. Mr. Perez was well known to an executive officer of
            the Company, has a net worth or annual income to qualify as an
            accredited investor and, in addition, is experienced in financial or
            business matters.

(28)  February 2002

      (a)   Securities sold:

            (i)   Date: February 6, 2002.

            (ii)  Title of Securities: Common Stock

            (iii) Amount: 500,000 shares

      (b)   Underwriters and other purchasers:

            The purchaser was:

            Peter D. Kirschner.

      (c)   Consideration:

            The shares were issued to the purchaser upon the exercise of an
            option for the exercise price of $5,000.

      (d)   Exemption from registration claimed. This transaction was exempt
            under Section 4(2) of the Securities Act and Rule 506 thereunder, as
            a sale to accredited investors not involving any general
            solicitation. Mr. Kirschner was the President and CEO of the
            Company.

(29)  February - March, 2002.

      (a)   Securities sold:

            (i)   Date: February 5, 2002 and March 14, 2002

            (ii)  Title of Securities: Common Stock

            (iii) Amount: 500,000 shares.

      (b)   Underwriters and other purchasers:

            The purchaser was:

            Inverfape, S. A.

      (c)   Consideration:

            These shares were issued to purchaser for consulting services and
            reimbursable expenses with a value of $37,500.


      (d)   Exemption from registration claimed. This transaction was exempt
            under Section 4(2) of the Securities Act and Rule 506 thereunder, as
            a sale to accredited investors. Inverfape, SA is a corporation
            wholly-owned by M. Mario Perez, who was well known to an executive
            officer of the Company, has a net worth and annual income to qualify
            as an accredited investor and, in addition, is

<PAGE>

            experienced in financial or business matters.

(30)  February and April 2002.

      (a)   Securities sold:

            (i)   Date: February 6, April 15, 16, 25 and 30, 2002

            (ii)  Title of Securities: Common Stock

            (iii) Amount: 1,466,660 shares.

      (b)   Underwriters and other purchasers:

            The purchasers were:

            Robert Cohen, Daniel Shamy, L. R. Gallo, James Damato and Charles
            Carello.

       (c)  Consideration:

            The aggregate offering price was $110,000.

      (d)   Exemption from registration claimed. This transaction was exempt
            under Section 4(2) of the Securities Act and Rule 506 thereunder, as
            a sale to accredited investors not involving general solicitation.
            Each of the purchasers was well known to a director of the Company,
            had a net worth or annual income to qualify as an accredited
            investor and, in addition, is experienced in financial or business
            matters.

(31)   March and April 2002

      (a)   Securities sold:

            (i)   Date: Various dates in March and April 2002.

            (ii)  Title of Securities: Common Stock

            (iii) Amount: 1,995,000 shares

      (b)   Underwriters and other purchasers:

            The purchasers were:

            Eugene W. Rita, George DeClaire, Roy Scherrer, Michael Cutler,
            Martin Laburu, Robert Sepos, Stephanie Colzie, Keith Desouza,
            Jeffrey Minderlein, David Rappa, Kelly Filamini, Douglas Randle,
            Xesus Posse, Julian Stout, Covelle Toolsie, David Kachur, Michael
            Kachur, William Kachur and Jay Schnaderman.

      (c)   Consideration:

            Waiver of rights to receive wages in the aggregate amount of
            $149,625.

      (d)   Exemption from registration claimed. This transaction was exempt
            under Section 4(2) of the Securities Act as a transaction not
            involving a public offering consisting of a sale to a director,
            officer and employees of the issuer familiar with the business and
            affairs of the issuer and, in some cases, experienced in financial
            or business matters generally.

<PAGE>

(32)  February and April 2002

      (a)   Securities sold:

            (i)   Date: February 6 and April 25, 2002.

            (ii)  Title of Securities: Common Stock

            (iii) Amount: 66,683 shares.

      (b)   Underwriters and other purchasers:

            The purchaser was:

            Norman Malinski, Esquire.

      (c)   Consideration:

            Legal services rendered to us in the amount of $10,000.

      (d)   Exemption from registration claimed. This transaction was exempt
            under Section 4(2) of the Securities Act and Rule 506 thereunder, as
            a to accredited investors not involving any general solicitation.
            Mr. Malinski was well known to the directors and executive officers
            of the Company, has a net worth or an annual income to qualify as an
            accredited investor and, in addition, is experienced in financial or
            business matters.

(33)  March 2002

      (a)   Securities sold:

            (i)   Date: March 22, 2002.

            (ii)  Title of Securities: Common Stock

            (iii) Amount: 5,000,000 shares

      (b)   Underwriters and other purchasers:

            The purchaser was:

            Richard J. Lucibella.

      (c)   Consideration:

            Conversion of the principal and accrued interest of a convertible
            promissory note issued by the Company and held by the purchaser in
            the principal amount of $250,000, dated October 25, 2000.

      (d)   Exemption from registration claimed. This transaction was exempt
            under Section 4(2) of the Securities Act and Rule 506 thereunder, as
            a sale to accredited investors not involving any general
            solicitation. Mr. Lucibella was a director of the Company.

(34)  March 2002

      (a)   Securities sold:

            (i)   Date: March 25, 2002.

            (ii)  Title of Securities: Common Stock

            (iii) Amount: 156,250 shares

<PAGE>

      (b)   Underwriters and other purchasers:

            The purchaser was:

            Thomas Custer.

      (c)   Consideration:

            The aggregate offering price was $25,000 in cash.

      (d)   Exemption from registration claimed. This transaction was exempt
            under Section 4(2) of the Securities Act and Rule 506 thereunder, as
            a sale to accredited investors not involving any general
            solicitation. Mr. Custer was well known to a director of the
            Company, has a net worth or annual income to qualify as an
            accredited investor and, in addition, is experienced in financial or
            business matters.

(35)  March 2002

      (a)   Securities sold:

            (i)   Date: March 25, 2002.

            (ii)  Title of Securities: Common Stock

            (iii) Amount: 176,228 shares.

      (b)   Underwriters and other purchasers:

            The purchaser was:

            Craig Sherar, Trustee

      (c)   Consideration:

            Forgiveness of $29,430 in trade indebtedness by the Company.

      (d)   Exemption from registration claimed. This transaction was exempt
            under Section 4(2) of the Securities Act and Rule 506 thereunder, as
            a sale to accredited investors not involving any general
            solicitation.

(36)  April 2002

      (a)   Securities sold:

            (i)   Date: April 30, 2002.

            (ii)  Title of Securities: Common Stock

            (iii) Amount: 1,000,000 shares

      (b)   Underwriters and other purchasers:

            The purchaser was:

            US Data International Development, Inc.

      (c)   Consideration:

            The shares were issued pursuant to the certain Engagement Agreement
            between purchaser and the Company, dated March 7, 2002.

      (d)   Exemption from registration claimed. This transaction was exempt
            under Section 4(2) of the Securities Act and Rule 506 thereunder, as
            a sale to

<PAGE>

            accredited investors not involving any general solicitation.
            Purchaser is wholly-owned by M. Mario Perez, who is well known to an
            executive officer of the Company, has a net worth or annual income
            to qualify as an accredited investor and, in addition, is
            experienced in financial or business matters.

(37)  April 2002

      (a)   Securities sold:

            (i)   Date: April 25, 2002.

            (ii)  Title of Securities: Common Stock

            (iii) Amount: 91,575 shares

      (b)   Underwriters and other purchasers:

            The purchaser was:

            La Jolla Cove Investors, Inc.

      (c)   Consideration:

            Conversion of $10,000 of the principal amount of a convertible
            debenture issued by the Company to the purchaser, dated April 5,
            2001.

      (d)   Exemption from registration claimed. This transaction was exempt
            under Section 4(2) of the Securities Act and Rule 506 thereunder, as
            a sale to accredited investors not involving any general
            solicitation. La Jolla Cove Investors, Inc. is an institution not
            formed for the specific purpose of acquiring these securities and
            has total assets in excess of $5,000,000.

(38)  April 2002

      (a)   Securities sold:

            (i)   Date: April 29, 2002.

            (ii)  Title of Securities: Common Stock

            (iii) Amount: 5,000,000 shares

      (b)   Underwriters and other purchasers:

            The purchaser was:

            Centro Group. See description in Management's Discussions and
            Analysis of Financial Condition and Results of Operations -
            Liquidity and Capital Resources.

      (c)   Consideration:

            The aggregate offering price was $500,000.

      (d)   Exemption from registration claimed. This transaction was exempt
            under Section 4(2) of the Securities Act and Rule 506 thereunder, as
            a sale to

<PAGE>

            accredited investors not involving any general solicitation.

(39)  May - September 2002

      (a)   Securities sold:

<PAGE>

            (i)   Date: May - September 2002

            (ii)  Title of Securities: Common Stock

            (iii) Amount: 5,000,000 shares

      (b)   Underwriters and other purchasers:

            The purchaser was: Centro Group. See description in Management's
            Discussions and Analysis of Financial Condition and Results of
            Operations - Liquidity and Capital Resources.

      (c)   Consideration:

            The aggregate offering price was $500,000.

      (d)   Exemption from registration claimed. This transaction was exempt
            under Section 4(2) of the Securities Act and Rule 506 thereunder, as
            a sale to accredited investors not involving any general
            solicitation.

(40)  November 2002

      (a)   Securities sold:

            (i)   Date: November 15, 2002

            (ii)  Title of Securities: Common Stock/Series A Preferred Stock

            (iii) Amount: 9,532,842/111,495

      (b)   Underwriters and other purchasers:

            The purchaser was: BEHEER-EN BELEGGINSMAATSCHAPPIJ SELMOK BV and
            GOLDEN WORLDWIDE BUSINESS CORPORATION. See description in
            Management's Discussions and Analysis of Financial Condition and
            Results of Operations - Liquidity and Capital Resources.

      (c)   Consideration:

            The aggregate offering price was $1,000,000.

      (d)   Exemption from registration claimed. This transaction was exempt
            under Section 4(2) of the Securities Act and Rule 506 thereunder, as
            a sale to accredited investors not involving any general
            solicitation.

(41)  January 2003

      (a)   Securities sold:

            (i)   Date: January 24, 2003

            (ii)  Title of Securities: Series A Preferred Stock

            (iii) Amount: 3,188,406

      (b)   Underwriters and other purchasers:

            The purchaser was: BEHEER-EN BELEGGINSMAATSCHAPPIJ SELMOK BV and
            GOLDEN WORLDWIDE BUSINESS CORPORATION. See

<PAGE>

            description in Management's Discussions and Analysis of Financial
            Condition and Results of Operations - Liquidity and Capital
            Resources.

      (c)   Consideration:

            The aggregate offering price was $1,100,000.

      (d)   Exemption from registration claimed. This transaction was exempt
            under Section 4(2) of the Securities Act and Rule 506 thereunder, as
            a sale to accredited investors not involving any general
            solicitation.

(42)  February 2003

      (a)   Securities sold:

            (i)   Date: February 7, 2003

            (ii)  Title of Securities: Series A Preferred Stock

            (iii) Amount: 2,608,696

      (b)   Underwriters and other purchasers:

            The purchaser was: BEHEER-EN BELEGGINSMAATSCHAPPIJ SELMOK BV and
            GOLDEN WORLDWIDE BUSINESS CORPORATION. See description in
            Management's Discussions and Analysis of Financial Condition and
            Results of Operations - Liquidity and Capital Resources.

      (c)   Consideration:

            The aggregate offering price was $900,000.

      (d)   Exemption from registration claimed. This transaction was exempt
            under Section 4(2) of the Securities Act and Rule 506 thereunder, as
            a sale to accredited investors not involving any general
            solicitation.

<PAGE>

Item 6. Management's Discussion and Analysis of Financial Condition and Results
of Operations.

                                    Overview

      In its third year of operation, the Company continues to develop the
necessary services and financial support that will allow us to adhere to its
current business plan seeking to be a viable player in the data storage and
business continuance field. The Company has taken these steps by entering into
its relationship with the Panamanian-based Zona de Tecnologia y
Telecomunicaciones SA ("ZTT"), and the continuing equity funding, amounting to
approximately $3,200,000 in 2002. During that time, the Company has cut its
staff by over 95%, negotiated and settled a significant portion of its
outstanding debt; and secured the services of a highly experienced technical
team in ZTT.

      In order to implement its business plan to offer its array of products and
services in the areas of on-line data storage, collocation and processing and
network connectivity, the Company seeks to consummate the acquisition of ZTT.
The Company believes that once its acquisition of ZTT is consummated, it will
immediate start an aggressive pre-sales campaign and marketing effort to the
potential users of the services and through the potential "channel partners" who
could readily sell these services to their customers worldwide. Implementation
of this plan will require additional capital in the range of $6.5 to $8.5
million. While delays in receiving the needed funds have slowed down the process
of consummating the transaction with ZTT, the Company still believes that it
will receive sufficient capital infusions necessary to meet its purposes. There
is, however, no complete assurance that we will receive the necessary funds to
consummate our transaction, either through our agreement with the current group
of investors or through other sources. Moreover, there is no assurance that the
new business plan will be successful and, in general, that our efforts to become
profitable on a consistent basis will yield the desired results.

      The Company continues to contend with its outstanding liability to the IRS
for payroll taxes and our lack of compliance with the terms of our equipment
lease with Cisco Systems Capital Corporation ("Cisco"). With the Company current
Offer in Compromise to the IRS, the Company is hopeful that an amicable
settlement will be finalized. The Company continues in its negotiations with
Cisco and is hopeful that in the event that the Company acquires ZTT, the
Company can re-establish its relationship with Cisco. Certain of the proceeds
from the investment by the Company's current investment group have been
earmarked to settle the IRS and Cisco matters, and, although the outcome is not
free from doubt, management believes that a solution acceptable to the

<PAGE>

Company can be achieved.

                              Results of Operations

For the year ended December 31, 2002, the Company continues in incur losses from
operations. We reported a net loss of $9,009,400 ($0.11 per share) for the year
ended December 31, 2002 compared to a net loss of $10,262,800 ($.30 per share)
for the year ended December 31, 2001. As previously stated during the year, the
Company, has once again changed its business plan and is entering the data
storage arena.

A comparison between the periods reflects that Management's efforts to reduce
expenses in 2002 did yield results. The compensation-related expenses decreased
$2,194,800 from $ 3,213,300 in 2001 to $ 1,018,500 in 2002. Additionally,
Technology and Content expenses decreased substantially from $ 6,211,400 in 2001
to $ 945,600 in 2002 or $5,265,800. This was due to the elimination of specific
technological based employees, contracted services and the re-structuring of US
Data's network facility. While these cost savings were substantial, the non-cash
expense for 2002 resulted in an increase of approximately $ 1,000,000 over 2001
due to a tangible asset impairment charge of approximately $1,241,300 to adjust
capitalized leases, furniture, fixtures and equipment to its estimated fair
value. While the Company continues to incur substantial losses during this past
year and earlier; management continues in its philosophy to development a new
business plan that eventually will evolve into an on going operating enterprise.
While the net loss for the year 2002 reflected a slight improvement ($1,253,400)
when compared to 2001; the current operations included unusual charges, which,
in the opinion of management would be non-recurring. Those non-recurring charges
amounted to approximately $2.5 million, which consists principally of loss on
sale of assets of $1.2 million and an impairment allowance of $1.3 million.
These charges resulted from the unauthorized sales of assets. Reference is made
to notes to financial statements for additional information.

Management is continuing in its efforts to reduce expenses and is of the opinion
that the results of operations for 2003 will reflect the impact of those
efforts.

                         Liquidity and Capital Resources

The operations of the Company have been principally funded by private placements
between 2000 and 2002. From the commencement of development stage (May 1, 2000)

<PAGE>

those private placements have generated approximately $ 9.3 million of capital.
In addition, a small group of shareholders and other related parties were able
to advance the Company an additional $2.9 million. These funds, principally
sustained the Company as it continues to implement its business plan. The net
cash used in operating activities was $2.8 million for fiscal 2002; $$4.7
million for fiscal 2001 and $10.4 million from the commencement of development
stage (May 1, 2000) to December 31, 2002. All of these cash losses were funded
by the capital generated from the numerous private placements and debt
borrowings from a small group of investors. The improvement from fiscal 2001 to
2002 was strictly attributable to the winding down of the old business and the
development of the new business plan in the area of data storage.

For fiscal 2002, the Company had net cash used in investing activities of
$158,800. The principal source of investing funds was generated by the
unauthorized sale of assets ($243,700). Once again this was an improvement from
fiscal 2001, which had cash used in investing activities of $170,400. Total cash
used from investing activities from inception of development stage (May 1, 2000)
to December 31, 2002 was $1.8 million.

Financing activities provided the cash flows required for operations and
investing activities. For fiscal 2002, cash provided by financing activities
amounted to $3.2 million as compared to $4.9 million for fiscal 2001. From
inception of development stage, financing activities generated $12.4 million.

Management anticipates that for the ensuing year (2003) and possibly into 2004,
the Company may require about $6.5 to $8.5 million to emerge from development
stage. This would include the purchase of ZTT also in the development stage.
Reference is made to notes to financial statements which discloses this
transaction. It is the opinion of management that the working capital required
for this purchase will be generated by its agreement entered into in November
2002 with its new investor group.

On February 28, 2002 the Company entered into an agreement (the "Purchase
Agreement"), with the Centro Group, consisting of Centro Inmobiliario RYC, S.L.,
a limited liability company organized under the laws of the Kingdom of Spain
("Inmobiliario"), MAPET International Foundation, Inc., a Florida non-profit
corporation ("MAPET"), FRONTIER STAR, S.L., a limited liability company
organized under the laws of the Kingdom of Spain ("FRONTIER STAR"), INVERFAPE,
S.A., a limited liability company organized under the laws of the Dominican
Republic ("INVERFAPE"), Jesus Guirau, S.L., a limited liability company
organized under the laws of the Kingdom of Spain ("Jesus Guirau") (Inmobiliario,
MAPET, FRONTIER STAR, INVERFAPE, and Jesus Guirau are sometimes collectively
referred to hereinafter as the "Centro Group"), as

<PAGE>

amended. Under the Purchase Agreement, the Investors were to purchas and agreed
to purchase from the Company, eighteen (18) tranches (i) 10,000,000 shares of
Common Stock, and (ii) 20,000,000 shares of Series A Preferred Stock (the
"Preferred Stock") for the aggregate price of $18,400,000. The Common Stock
would be purchased for $0.16 per share and the Preferred Stock would be
purchased for $0.84 per share. Under the Agreement, the Centro Group will divide
the rights and obligations under the Purchase Agreement as follows: Inmobiliario
(37.5%); MAPET (37.5%); FRONTIER STAR (10.0%); INVERFAPE (10.0%); and Jesus
Guirau (5.0%).

The closing of the first partial funding of the Purchase Agreement occurred on
April 29, 2002. At this closing, the Centro Group purchased a total of 5,000,000
shares of Common Stock for $500,000. Thereafter, the Company received the next
$500,000 throughout the months of May through September 2002. On about the first
of November, the above stated Purchase Agreement was re-negotiated due to the
tax implication to the Company of the Option portion of this finance package.
The new Subscription Agreement, dated November 1, 2002 was ratified by the
Company's Board of Directors and resulted in the replacement of the $18,400,000
funding for a restructured funding in the amount of $8,900,000. All previously
funded dollars and shares earned would become a base for this new agreement,
thus leaving a balance due to be funded to US Data in the amount of $7,900,000.
This new investment agreement replaced not only the previous funding base but
also inserted a new set of investors.

The new investment agreement was a reassignment of the terms and conditions of
the previous agreement and these terms were accepted by the new investors (the
"New Investors"): BEHEER-EN BELEGGINSMAATSCHAPPIJ SELMOK BV and GOLDEN WORLDWIDE
BUSINESS CORPORATION, companies formed in the NETHERLANDS and BRITISH VIRGIN
ISLANDS, respectively. These two companies, represented by M. Mario Perez as
their Power of Attorney, equally accepted liability of funding the remaining
$7,900,000.00. Funds would be tendered as requested by a Finance Committee
appointed by the Board of Directors of the Company, and made up of a Company
director and representative of the Perez family, the President/CEO, and the
Company Controller. Of this amount, the New Investors tendered $1,000,000 on
November 15, 2002, thus leaving a balance due to be funded to the Company in the
amount of $6,900,000 as of December 31, 2002.

As a result of the new investment agreement, potential funds available for
financing decreased about $10.5 million. Management does not anticipate that
this loss in potential financing would have a significant impact on the future
emergence from development stage, if the new business plan can be implemented
without delay and if both the new investor group can or will honor their
obligations under the new

<PAGE>

agreement in a timely manner and if the acquisition of ZTT can be completed also
in a timely manner.

After the initial investment by the Centro Group, back on April 29, 2002, as
agreed upon by the parties to the Purchase Agreement in order for the Investors
to gain majority representation of the Board of Directors, the Investors were
entitled to nominate five persons to be elected to the Board of Directors. On
that date, upon resolution by the Board of Directors, the Board of Directors
agreed to expand the number of its members from seven to nine. After passing
this resolution, five of the seven directors resigned and seven new directors
were elected to fill the vacancies, five of whom were nominated by the Centro
Grouop. The newly constituted Board of Directors consists of Messrs. Robert M.
Beaton, Juan F. Casas, Michael A. Cutler, William C. Davis, III, Eliu Dreszer,
Martin Laburu, Dominick F. Maggio, Charles Molinari and Mario Perez. Messrs.
Casas, Davis, Laburu, and Perez were the Investors' nominees. The newly
constituted Board of Directors named Mr. Cutler to serve as its chairman and Mr.
Maggio to serve as President and CEO of the Company.

Since this time, four Board members resigned and were replaced. Citing working
conflicts and time constraints, Juan F. Casas, Eliu Dreszer and William C.
Davis, III resigned. Additionally, the Investors requested that one of their
nominees, Martin Laburu, step aside in favor of Enrique Miranda, Esquire. Mr.
Laburu did so. Appointed to the Board by the Investors were: Mauricio von
Luxburg and Daniel Shamy, Esquire. As such, the Investors now hold four of eight
filled Board seats, having named Mssrs. Miranda, Perez, Shamy and von Luxburg.
As of December 31, 2002, the USDA Board of Directors consisted of: Michael
Cutler, Chairman; Robert M. Beaton; Dominick F. Maggio; Enrique Miranda,
Esquire; Charles Molinari; Mario Perez; Daniel J. Shamy, Esquire; and Mauricio
von Luxburg.

In conjunction to the wishes of the Centro Group, on March 7, 2002, the Company
entered into a marketing agreement (the "Marketing Agreement") with US DATA
International Development, Inc. ("US DATA International"), a Florida corporation
that is controlled by the Investors. Pursuant to the terms of the Marketing
Agreement, US DATA International will provide all international marketing and
sales coordination of the Company's products and services. The initial term of
the Marketing Agreement is for three years and the agreement will automatically
renew for additional 12-month periods unless either party provides the other
with written notice of its intent to cancel the agreement within 90 days of the
anniversary date of the agreement. US DATA International will be paid $100,000
per month for the life of the agreement. In addition, during the initial
three-year term, US DATA International will receive an amount equal

<PAGE>

to three percent (3%) of the Company's gross sales through March 7, 2005.
Additionally, pursuant to the terms of the Marketing Agreement, the Company will
grant US DATA International (i) 1,000,000 shares of Common Stock, and (ii)
options for up to 3,000,000 shares of Common Stock, which shall vest immediately
upon grant and be exercisable at certain prices and under certain terms and
conditions for five years.

Item 7. Financial Statements.



                             US DATA AUTHORITY, INC.

                      (A COMPANY IN THE DEVELOPMENT STAGE)

                          INDEPENDENT AUDITORS' REPORT

                                       AND

                              FINANCIAL STATEMENTS

                     YEARS ENDED DECEMBER 31, 2002 AND 2001

                                       AND

             CUMULATIVE AMOUNTS FROM INCEPTION OF DEVELOPMENT STAGE

                     (MAY 1, 2000) THROUGH DECEMBER 31, 2002

<PAGE>

                             US DATA AUTHORITY, INC.
                      (A COMPANY IN THE DEVELOPMENT STAGE)
                     YEARS ENDED DECEMBER 31, 2002 AND 2001

                                    CONTENTS


                                                                            PAGE

Independent auditors' report                                                 1-2

Financial statements:
  Balance sheets                                                               3

  Statements of operations                                                     4

  Statements of shareholders' deficit                                          5

  Statements of cash flows                                                   6-7

  Summary of significant accounting policies                                8-10

  Notes to financial statements                                            11-27

<PAGE>

                          INDEPENDENT AUDITORS' REPORT

Board of Directors and Shareholders
US Data Authority, Inc.
Boca Raton, Florida

We have audited the accompanying balance sheets of US Data Authority, Inc. (a
company in the development stage) as of December 31, 2002 and 2001 and the
related statements of operations, shareholders' deficit and cash flows for the
years ended December 31, 2002 and 2001 and for the period from inception of
development stage (May 1, 2000) to December 31, 2002. These financial statements
are the responsibility of the Company's management. Our responsibility is to
express an opinion of these financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of US Data Authority, Inc. at
December 31, 2002 and 2001 and the results of its operations and its cash flows
for the years ended December 31, 2002 and 2001 and from inception of development
stage (May 1, 2000) to December 31, 2002 in conformity with accounting
principles generally accepted in the United States of America.

<PAGE>

Board of Directors and Shareholders
US Data Authority, Inc.
Boca Raton, Florida

Page 2

The accompanying financial statements have been prepared assuming the Company
will continue as a going concern. As discussed in Note 3 of notes to financial
statements, the Company has reported working capital and equity deficiencies,
has experienced net losses for the year ended December 31, 2002 of $9,009,400
and has experienced a loss from continuing operations from inception of
development stage (May 1, 2000) to December 31, 2002 of $25,852,000. In
addition, the Company's principal sources of cash flows from inception of
development stage (May 1, 2000) to December 31, 2002 have been through the sales
of its common shares and warrants ($9,395,800) and from borrowings under
financing activities ($3,464,900). No assurances can be given to the
continuation of the sales of securities or continued ability to obtain short or
long-term borrowings to maintain the Company's present cash flow requirements.
The Company's recurring losses from operations and limited capital resources
raise substantial doubt about the Company's ability to continue as a going
concern. Management's plans concerning these matters are also described in Note
3 of notes to financial statements. To date the Company has been dependent on a
major shareholder group for debt and equity financing. There is no assurance
that this shareholder group will continue as a source of new funds. The
Company's ability to achieve the elements of its business plan, which may be
necessary to permit the realization of assets and satisfaction of liabilities in
the ordinary course of business, is uncertain. The Company is in default of it
financing arrangements under capitalized lease obligations, convertible notes
and is in arrears with amounts due for past payroll taxes. During the current
year, a representative of an investor group sold Company assets (equipment under
capitalized leases) to related and third parties without satisfying the related
liens. These actions were unauthorized transactions and not recorded in a timely
manner to maintain accountability. The Board of Directors has not taken any
actions to seek full remedy. All these conditions raise substantial doubt about
the Company's ability to continue as a going concern. The financial statements
do not include any adjustments that might result from the outcome of these
uncertainties.

s/Hixson, Marin, DeSanctis & Company, P.A.

North Miami Beach, Florida
March 29, 2003 (except for the ninth paragraph
Of note 3, the date of which is April 10, 2003)

<PAGE>

                            US DATA AUTHORITY, INC.
                      (A COMPANY IN THE DEVELOPMENT STAGE)
                  BALANCE SHEETS - DECEMBER 31, 2002 AND 2001

<TABLE>
<CAPTION>

                                         ASSETS
                                                                                                    2002              2001
                                                                                                ------------     ------------
<S>                                                                                             <C>              <C>
Current assets:
  Cash and equivalents                                                                          $    296,900     $     49,600

  Accounts receivable, less allowance for doubtful
    collections of $32,900 in 2002                                                                       200           15,900

  Other current asset                                                                                151,700           22,400
                                                                                                ------------     ------------

                    Total current assets                                                             448,800           87,900

Equipment under capitalized leases, less allowance for
  tangible asset impairment of $794,400 in 2002                                                      198,600        2,539,700

Leaseholds, furniture, fixtures and equipment                                                         42,100        1,255,900

Deposit on purchase of ZTT                                                                           400,000               --

Other assets                                                                                           4,300           77,000
                                                                                                ------------     ------------

                                                                                                $  1,093,800     $  3,960,500
                                                                                                ============     ============

                          LIABILITIES AND SHAREHOLDERS' DEFICIT

Current liabilities:
  Federal and states payroll taxes payable, including penalties and interest, all in arrears    $  1,003,900     $    713,900

  Capitalized lease obligations, in default                                                        3,625,300        3,625,300

  Installment insurance contracts payable                                                             31,500               --

  Accounts payable, substantially in arrears                                                       1,423,400        1,909,800

  Accounts payable under dispute, AT&T                                                             3,433,100        3,433,100

  Accrued liabilities                                                                              2,605,000        1,658,800

  Convertible notes/advances payable, shareholders and other, in default                           2,312,000        2,050,000

  Due to related party, in default                                                                    25,300           25,300
                                                                                                ------------     ------------

                    Total current liabilities                                                     14,459,500       13,416,200
                                                                                                ------------     ------------

Background, business, discontinued operations, summary of certain risks and
uncertainties, transactions with related parties, commitments and subsequent
events (Notes 1,2, 3, 6, 9, 10 and 11)

Shareholders' deficit:
  Preferred stock, Series A, $1.00 par; authorized 30,000,000
  shares; 1,361,495 shares issued in 2002; 1,250,000 shares issued in 2001                         1,361,500        1,250,000

  Common stock, $.02 par, authorized 100,000,000
  shares; issued and outstanding 100,000,000 shares
  in 2002 and 59,484,849 shares in 2001                                                            2,000,000        1,189,700

  Capital in excess of par                                                                        10,120,500        6,002,900

  Deficit                                                                                           (930,200)        (930,200)

  Accumulated deficit during the development stage                                               (25,852,000)     (16,842,600)
                                                                                                ------------     ------------

                                                                                                 (13,300,200)      (9,330,200)

  Escrow performance shares                                                                          (65,500)        (125,500)
                                                                                                ------------     ------------

                                                                                                 (13,365,700)      (9,455,700)
                                                                                                ------------     ------------

                                                                                                $  1,093,800     $  3,960,500
                                                                                                ============     ============
</TABLE>


                                                                               3
<PAGE>

                             US DATA AUTHORITY, INC.
                      (A COMPANY IN THE DEVELOPMENT STAGE)
                            STATEMENTS OF OPERATIONS
 YEARS ENDED DECEMBER 31, 2002 AND 2001 AND CUMULATIVE AMOUNTS FROM INCEPTION OF
            DEVELOPMENT STAGE (MAY 1, 2000) THROUGH DECEMBER 31, 2002

<TABLE>
<CAPTION>
                                                                                                        Cumulative
                                                                                                       Amounts From
                                                                          2002             2001      Inception To Date
                                                                     ------------     ------------   -----------------
<S>                                                                  <C>              <C>              <C>
Revenues:
  Sales, net of allowances                                           $    196,300     $  1,457,000     $  1,777,400

  Equipment                                                                12,800           30,700           43,500
                                                                     ------------     ------------     ------------

                                                                          209,100        1,487,700        1,820,900
                                                                     ------------     ------------     ------------

Operating expenses:
  Technology and content                                                  945,600        6,211,400        9,294,200

  Compensation and related benefits                                     1,018,500        3,213,300        6,805,000

  Marketing and sales                                                     856,600          416,000        2,040,000

  General and administrative                                            2,369,100        1,942,700        5,142,400

  Interest                                                                839,100          826,900        1,796,400

  Rent                                                                     82,400          118,900          264,400

  Amortization, depreciation and tangible asset impairment charge       1,931,400          910,800        3,069,400

                                                                     ------------     ------------     ------------
                                                                        8,042,700       13,640,000       28,411,800

Less interest income and other                                             53,800           39,700          118,700
                                                                     ------------     ------------     ------------

                                                                        7,988,900       13,600,300       28,293,100
                                                                     ------------     ------------     ------------

Loss from operations before other additions                            (7,779,800)     (12,112,600)     (26,472,200)

Other additions, vendor settlements and credits                                --        1,849,800        1,849,800
                                                                     ------------     ------------     ------------

Loss from operations before loss on sale of assets                     (7,779,800)     (10,262,800)     (24,622,400)

Loss on sale of assets                                                  1,229,600        1,229,600
                                                                     ------------     ------------     ------------

Net loss                                                             $ (9,009,400)    $(10,262,800)    $(25,852,000)
                                                                     ============     ============     ============

Income (loss) per share of common stock:
  From operations
    Basic and diluted                                                $      (0.09)    $      (0.30)    $      (0.55)
                                                                     ============     ============     ============

Net (loss) per share of common stock:

  Basic and diluted                                                  $      (0.11)    $      (0.30)    $      (0.58)
                                                                     ============     ============     ============

Weighted average common shares outstanding                             85,164,631       34,546,768       44,562,165
                                                                     ============     ============     ============
</TABLE>


                                                                               4
<PAGE>

                             US DATA AUTHORITY, INC.
                      (A COMPANY IN THE DEVELOPMENT STAGE)
                       STATEMENTS OF SHAREHOLDERS' DEFICIT
 YEARS ENDED DECEMBER 31, 2002 AND 2001 AND CUMULATIVE AMOUNTS FROM INCEPTION OF
            DEVELOPMENT STAGE (MAY 1, 2000) THROUGH DECEMBER 31, 2002

<TABLE>
<CAPTION>
                                                                               Preferred Stock                     Common Stock
                                                                        ---------------------------     ----------------------------
                                                             Total         Shares          Amount          Shares          Amount
                                                         ------------   ------------   ------------     ------------   ------------
<S>                                                      <C>                           <C>                <C>          <C>
Balance, beginning, January 1, 2001                      $ (3,028,500)            --   $         --       20,000,159   $    400,000

Year ended December 31, 2001:

Add (deduct):

Proceeds from:
  Sales of common stock                                     3,195,900                                     33,972,056        679,400

  Sale of warrant                                              62,500

Issuance of common stock for:
  Security performance bond                                        --                                        526,316         10,500

  Professional services                                        62,000                                        636,318         12,800

  Payroll                                                     112,500                                      1,500,000         30,000

  Marketing                                                   207,300                                      2,900,000         58,000

Issuance of preferred stock for shareholder loans             250,000      1,250,000      1,250,000                      (1,000,000)

Redemption and retirement of common shares as
repayment of employee advances                               (139,600)                                       (50,000)        (1,000)

Utilization of security performance bond for
non-performance                                                85,000

Net loss from continuing operations                       (10,262,800)
                                                         ------------   ------------   ------------     ------------   ------------

Balance, ending, December 31, 2001                         (9,455,700)     1,250,000      1,250,000       59,484,849      1,189,700

Year Ended December 31, 2002:

Add (deduct):

Proceeds from:
  Sale of common stock                                      3,467,000                                     25,029,090        500,600

  Sale of preferred stock at a discount
    for private investment of common stock                     46,700                                        111,495        111,500

  Issuance of common stock for:
    Shareholders interest                                     172,400                                      2,590,000         51,800

    Shareholder loan                                          301,000                                      5,389,817        107,800

    Payroll                                                   109,900                                      1,370,000         27,400

    Marketing, sales, commissions and other operating         822,800                                      5,218,333        104,400

    Professional services                                      16,000                                         66,683          1,300

    Accounts payable and other                                 76,100                                        601,228         12,000

    Warrants                                                   27,500                                        250,000          5,000

Utilization of escrow performance shares                       60,000

Net loss                                                   (9,009,400)

                                                         ------------   ------------   ------------     ------------   ------------
Balance, ending, December 31, 2002                       $(13,365,700)     1,361,495   $  1,361,500      100,000,000   $  2,000,000
                                                         ============   ============   ============     ============   ============

<CAPTION>

                                                                                           Accumulated
                                                            Capital                      Deficit During         Escrow
                                                           in excess                       Development       Performance
                                                             of par         Deficit           Stage             Shares
                                                         ------------    -------------    --------------   -------------
<S>                                                      <C>             <C>              <C>              <C>
Balance, beginning, January 1, 2001                      $  4,081,500    $   (930,200)    $ (6,579,800)    $         --

Year ended December 31, 2001:

Add (deduct):

Proceeds from:
  Sales of common stock                                    2,516,500

  Sale of warrant                                             62,500

Issuance of common stock for:
  Security performance bond                                  200,000                                           (210,500)

  Professional services                                       49,200

  Payroll                                                     82,500

  Marketing                                                  149,300

Issuance of preferred stock for shareholder loans

Redemption and retirement of common shares as
repayment of employee advances                              (138,600)

Utilization of security performance bond for
non-performance                                                                                                  85,000

Net loss from continuing operations                                                       (10,262,800)
                                                        ------------    ------------     ------------     ------------
Balance, ending, December 31, 2001                         6,002,900        (930,200)     (16,842,600)        (125,500)

Year Ended December 31, 2002:

Add (deduct):

Proceeds from:
  Sale of common stock
                                                           2,966,400
  Sale of preferred stock at a discount
    for private investment of common stock
                                                             (64,800)
  Issuance of common stock for:
    Shareholders interest
                                                             120,600
    Shareholder loan
                                                             193,200
    Payroll
                                                              82,500
    Marketing, sales, commissions and other operating
                                                             718,400
    Professional services
                                                              14,700
    Accounts payable and other
                                                              64,100
    Warrants
                                                              22,500
Utilization of escrow performance shares                                                                         60,000

Net loss                                                                                    (9,009,400)

                                                         ------------    ------------     ------------     ------------
Balance, ending, December 31, 2002                       $ 10,120,500    $   (930,200)    $(25,852,000)    $    (65,500)
                                                         ============    ============     ============     ============
</TABLE>


                                                                               5
<PAGE>

                             US DATA AUTHORITY, INC.
                      (A COMPANY IN THE DEVELOPMENT STAGE)
                            STATEMENTS OF CASH FLOWS
 YEARS ENDED DECEMBER 31, 2002 AND 2001 AND CUMULATIVE AMOUNTS FROM INCEPTION OF
            DEVELOPMENT STAGE (MAY 1, 2000) THROUGH DECEMBER 31, 2002

<TABLE>
<CAPTION>
                                                                                                      Cumulative
                                                                                                      Amounts From
                                                                         2002             2001      Inception To Date
                                                                    ------------     ------------   -----------------
<S>                                                                 <C>              <C>              <C>
Cash flows from operating activities:
  Sources of cash:
    Sales                                                           $    257,100     $  1,180,600     $  1,513,200
    Interest                                                                 200            3,000           26,000
    Refund of income taxes                                                    --           16,300           16,300
                                                                    ------------     ------------     ------------

                                                                         257,300        1,199,900        1,555,500
                                                                    ------------     ------------     ------------

  Uses of cash:
    Technology and content                                               526,700        1,295,400        1,975,700
    Compensation and related benefits                                    803,600        3,115,200        5,837,800
    Marketing, selling, general and administrative                     1,591,600        1,278,900        3,745,400
    Interest                                                              30,300           90,000          120,300
    Rent                                                                  71,500          118,900          243,500
                                                                    ------------     ------------     ------------

                                                                       3,023,700        5,898,400       11,922,700
                                                                    ------------     ------------     ------------

Cash (used-in) operating activities                                   (2,766,400)      (4,698,500)     (10,367,200)
                                                                    ------------     ------------     ------------

Cash flows from investing activities:
  Sources of cash:
    Officer and employees loan repayments                                     --               --           64,600
    Customer security deposits                                                --           15,000           74,000
    Proceeds from sale of assets                                         243,700               --          243,700
                                                                    ------------     ------------     ------------

                                                                         243,700           15,000          382,300
                                                                    ------------     ------------     ------------

  Uses of cash:
    Advances to officers and employees                                        --               --          271,200
    Purchases of leaseholds, furniture, fixtures and equipment,
      less amount financed                                                 1,500          163,800        1,362,000
    Payments to related party                                                 --               --           25,300
    Deposit on purchase of ZTT and other security depoisits              400,000           21,600          477,000
                                                                    ------------     ------------     ------------

                                                                         401,500          185,400        2,135,500
                                                                    ------------     ------------     ------------

Cash (used-in) investing activities                                     (157,800)        (170,400)      (1,753,200)
                                                                    ------------     ------------     ------------

Cash flows from financing activities:
  Sources of cash:
    Proceeds from:
      Sales of preferred stock, common stock and warrant               2,535,500        3,258,400        9,395,800
      Shareholders, related party loans and other                        604,500        1,200,000        2,904,500
      Commercial and installments loans                                   60,400          500,000          560,400
                                                                    ------------     ------------     ------------

                                                                       3,200,400        4,958,400       12,860,700
  Uses of cash:
    Payments on capitalized lease obligation and short term debt          28,900          101,700          443,400
                                                                    ------------     ------------     ------------

Cash provided by financing activities                                  3,171,500        4,856,700       12,417,300
                                                                    ------------     ------------     ------------

Increase (decrease) in cash and equivalents                              247,300          (12,200)         296,900

Cash and equivalents, beginning                                           49,600           61,800               --
                                                                    ------------     ------------     ------------

Cash and equivalents, ending                                        $    296,900     $     49,600     $    296,900
                                                                    ============     ============     ============
</TABLE>


                                                                               6
<PAGE>

                      (A COMPANY IN THE DEVELOPMENT STAGE)
                      STATEMENTS OF CASH FLOWS (CONTINUED)
 YEARS ENDED DECEMBER 31, 2002 AND 2001 AND CUMULATIVE AMOUNTS FROM INCEPTION OF
            DEVELOPMENT STAGE (MAY 1, 2000) THROUGH DECEMBER 31, 2002

<TABLE>
<CAPTION>
                                                                                                                      Cumulative
                                                                                                                      Amounts From
                                                                                       2002              2001      Inception To Date
                                                                                    ------------     ------------  -----------------
<S>                                                                                 <C>              <C>              <C>
Reconciliation of net (loss) to cash (used-in) operating activities:

Net (loss)                                                                          $ (9,009,400)    $(10,262,800)    $(25,852,000)
                                                                                    ------------     ------------     ------------

Adjustments to reconcile net (loss) to cash (used-in) operating activities:
  Amortization and depreciation                                                          750,100          910,800        1,888,100

  Provision for tangible asset impairment charge                                       1,241,300               --        1,241,300

  Loss on sales and abandonment equipment (principally unauthorized asset sales)       1,229,600           30,900        1,260,500

  Provision for doubtful collections                                                      32,900           (2,600)          33,100

  Other operating activities, principally fees                                         2,375,700          466,800        2,842,500

  Changes in assets and liabilities:
    Accounts receivable                                                                   12,300           44,800            8,300

    Advances to officers, employees and other current assets                            (116,300)          10,000          (39,900)

    Accounts payable                                                                    (228,800)       2,612,900        5,024,200

    Accrued liabilities                                                                  946,200        1,490,700        3,226,700
                                                                                    ------------     ------------     ------------

                   Total adjustments                                                   6,243,000        5,564,300       15,484,800
                                                                                    ------------     ------------     ------------

Cash (used-in) operating activities                                                 $ (2,766,400)    $ (4,698,500)    $(10,367,200)
                                                                                    ============     ============     ============

Schedule of non-cash investing and financing activities:

Non-cash investing activity:
  Purchases of leaseholds, furniture, fixtures, equipment
    and capitalized leases, net of payments                                         $         --     $    743,200     $  3,450,700
                                                                                    ============     ============     ============

Non-cash financing activities:
  Issuance of common stock on purchase of USDA                                                                        $    209,600
                                                                                                                      ============

  Common stock issued for services and escrow performance shares                    $  1,284,700     $    466,800     $  1,751,500
                                                                                    ============     ============     ============

  Issuance of preferred stock for shareholder loans                                 $    301,000     $  1,250,000     $  1,551,000
                                                                                    ============     ============     ============
</TABLE>


                                                                               7
<PAGE>

                             US DATA AUTHORITY, INC.
                      (A COMPANY IN THE DEVELOPMENT STAGE)
             SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
                     YEARS ENDED DECEMBER 31, 2002 AND 2001

Basis of accounting:

      US Data Authority, Inc. (the Company) prepares its financial statements in
      accordance with accounting principles generally accepted in the United
      States of America. This basis of accounting involves the application of
      accrual accounting; consequently, revenues and gains are recognized when
      earned, and expenses and losses are recognized when incurred. Financial
      statement items are recorded at historical cost and may not necessarily
      represent current values.

Reverse stock split:

      In April 2000, the Company's shareholders approved a reduction in the
      authorized number of shares of the Company's common stock and a three
      point six for one (3.6:1) reverse stock split of the Company's $.02 par
      value common stock. The reverse stock split was effective immediately
      following the spin-off of all of its subsidiaries. Shareholders' deficit
      has been restated to give retroactive recognition to the reverse stock
      split for all periods presented by reclassifying from common stock to
      capital in excess of par of the number of shares that were eliminated as a
      result of the reverse stock split. In addition, all references in the
      financial statements and notes to the number of shares and per share
      amounts, stock option data have been restated to reflect this reverse
      stock split.

Management estimates:

      The preparation of financial statements in conformity with accounting
      principles generally accepted in the United States of America requires
      management to make estimates and assumptions that affect the reported
      amounts of assets and liabilities, disclosure of contingent assets and
      liabilities at the date of the financial statements, and the reported
      amounts of revenues and expenses during the reporting period. Certain
      amounts included in the financial statements are estimated based on
      currently available information and management's judgment as to the
      outcome of future conditions and circumstances. Changes in the status of
      certain facts or circumstances could result in material changes to the
      estimates used in the preparation of the financial statements and actual
      results could differ from the estimates and assumptions. Every effort is
      made to ensure the integrity of such estimates.

Fair value of financial instruments:

      The carrying amounts of cash and equivalents, accounts receivable,
      accounts payable and accrued liabilities approximate their fair values
      because of the short duration of these instruments.

Impairment of long-lived assets:

      Long-lived assets and identifiable intangibles held and used by the
      Company are reviewed for possible impairment whenever events or
      circumstances indicate the carrying amount of an asset may not be
      recoverable. In reviewing for impairment, the Company compares the
      carrying value of such assets to the estimated undiscounted future cash
      flows expected from the use of the assets and their eventual disposition.
      When the assets are less than the carrying amounts, an impairment loss is
      recognized equal to the difference between the assets fair value and the
      carrying amount. Under those circumstances, an allowance for tangible
      asset impairment would be charge to operations.

Revenue recognition:

      Revenues were recognized, monthly, when service was provided to the
      customer, who had executed a service agreement and authorizes access. If
      the Company were successful in developing its new data storage technology,
      contract revenues would be recognized ratably over the life of each
      contract.

Cash and equivalents:

      The Company considers all highly liquid investments purchased with
      original maturities of three months or less to be cash equivalents.


                                                                               8
<PAGE>

                             US DATA AUTHORITY, INC.
                      (A COMPANY IN THE DEVELOPMENT STAGE)
             SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
                     YEARS ENDED DECEMBER 31, 2002 AND 2001

Leaseholds, furniture, fixtures, equipment, capitalized leases and depreciation:

      Leaseholds, furniture, fixtures and equipment are stated at cost, less
      accumulated amortization and depreciation. Depreciation expenses are
      computed using the straight-line method based on the estimated useful
      lives of the depreciable assets. The Company amortizes its leasehold
      improvements over thirty-nine (39) years; depreciates furniture, fixtures
      and equipment over five (5) to seven (7) years. Equipment held under
      capital leases are classified as equipment under capitalized leases and
      amortized using the straight-line method over a five (5) year period.
      Lease amortizations are included in depreciation expense.

      Repairs and maintenance are charged to operations as incurred, and
      expenditures for significant betterments and renewals are capitalized. The
      cost of furniture, fixtures and equipment retired or sold, together with
      the related accumulated depreciation, are removed from the appropriate
      asset and depreciation accounts, and the resulting gain or loss is
      included in operations.

Excess of costs over net assets acquired (goodwill):

      The excess of costs over net assets acquired (goodwill) represents the
      excess of purchase price over tangible and other intangible assets
      acquired less liabilities assumed arising from business combinations.
      Statement of Financial Standards No. 142 (SFAS 142) "Goodwill and Other
      Intangible Assets", requires that goodwill acquired in a business
      combination after June 30, 2001, shall not be amortized. Prior to the
      adoption of SFAS 142, goodwill was amortized on a straight-line method
      over seven (7) years. SFAS 142 also provides guidance about how to
      determine and measure goodwill and intangible asset impairment, and
      requires additional disclosure of information about goodwill and other
      intangible assets. During the year ended December 31, 2001, management has
      determined that the value of its intangible asset has been substantially
      impaired due to the change in its market and has accordingly written down
      the goodwill to fair value. Future discounted future cash flows were
      utilized to determined fair value.

Advertising:

      The Company expenses advertising costs incurred.

Income taxes:

      The Company accounts for income taxes using the asset and liability
      method. Under this method, deferred tax assets and liabilities are
      recognized for the future tax consequences attributable to differences
      between the financial statement carrying amounts of existing assets and
      liabilities and their respective tax bases. Deferred tax assets and
      liabilities are measured using enacted tax rates applied to taxable
      income. The effect on deferred tax assets and liabilities of a change in
      tax rates is recognized in income in the period that includes the
      enactment date. A valuation allowance is provided for deferred tax assets
      when it is more likely than not that the asset will not be realized.

      For income tax purposes, the Company utilizes accelerated methods of
      depreciation and recognizes its capitalized lease payments as a period
      cost versus the amortization of capitalized leases.

Per share amounts:

      Basic loss per share, from continuing and discontinued operations are
      computed by dividing net loss by the weighted average number of common
      shares outstanding during the reporting period. Diluted loss per share are
      computed similar to basic loss per share except that the weighted average
      shares outstanding are increased to include additional shares from the
      assumed exercise of stock options and warrants, if dilutive. The number of
      additional shares is calculated by assuming that outstanding stock options
      and warrants were exercised and that the proceeds from such exercises were
      used to acquire shares of common stock at the average price during the
      reporting period. For the years ended December 31, 2002 and 2001, options
      and warrants were excluded from the computation of diluted loss per share
      due to their antidilutive effect.


                                                                               9
<PAGE>

                            US DATA AUTHORITY, INC.
                      (A COMPANY IN THE DEVELOPMENT STAGE)
             SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
                     YEARS ENDED DECEMBER 31, 2002 AND 2001

Stock based compensation:

      The Company has elected to follow Accounting Principles Board Opinion No.
      25, "Accounting for Stock Issued to Employees" (APB No. 25), and related
      interpretations, in accounting for its employee stock options rather than
      the alternative fair value accounting allowed by Statement of Financial
      Standards No. 123, (SFAS No.123) "Accounting for Stock- Based
      Compensation." APB No. 25 provides that the compensation expense relative
      to the Company's employee stock options is measured based on the intrinsic
      value of the stock option. SFAS No. 123 requires companies that continue
      to follow APB No. 25 to provide pro-forma disclosure of the impact of
      applying the fair value method of SFAS No. 123. The Company follows SFAS
      No. 123 in accounting for stock options issued to non-employees.

Accounting pronouncements:

      The Securities and Exchange Commission has issued Staff Accounting
      Bulletin (SAB) No. 101, "Revenue Recognition in Financial Statements." SAB
      101 provides guidance for revenue recognition under certain circumstances,
      and, is effective for the fourth quarter of 2000. SAB 101 is not expected
      to have a material effect on the Company's results of operations,
      financial position and cash flows. The Company has adopted various new
      standards as promulgated by the Financial Accounting Standards Board
      (FASB) through the issuance Statements of Financial Accounting Standards
      (SFAS). The Company also adopted various new Statements of Position (SOP)
      issued by the American Institute of Certified Public Accountants. Adoption
      of these various new FASB's and SOP's did not have an impact on the
      Company's financial statements.

Reclassifications:

      In order to facilitate comparison of financial information, certain
      amounts reported in the prior year have been reclassified to conform to
      the current year presentation.


                                                                              10
<PAGE>

                            US DATA AUTHORITY, INC.
                      (A COMPANY IN THE DEVELOPMENT STAGE)
             SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
                     YEARS ENDED DECEMBER 31, 2002 AND 2001

1.    Organization, background and business:

      US Data Authority, Inc. (USD or the Company) was incorporated in the State
      of Delaware on March 5, 1985. On August 2, 1996, a wholly owned subsidiary
      was organized under the Laws of the State of Florida under the same
      corporate name. During 1996, the Delaware and Florida corporations entered
      into a statutory merger with the Florida Corporation as the survivor. As a
      result of the merger, USD issued 2,500,000 shares of its $0.02 par value
      to the then existing shareholders. On May 1, 2000, the Company acquired
      the assets subject to liabilities of a Company in the development stage,
      which was originally incorporated on January 15, 1999, in exchange of its
      common stock. The acquisition was accounted for by the purchase method.
      Accordingly, the Statement of Operations includes the operating results of
      USD from May 1, 2000 forward. The assets acquired and liabilities assumed
      were recorded at fair values, which did not exceed original cost. The
      excess of cost over net assets acquired was being amortized to future
      periods over a seven- (7) year life using the straight-line method. A
      condensed summary of assets and liabilities purchased is as follows:

      Identifiable assets:
        Acounts receivable, security deposits et al      $ 72,100
        Leaseholds, furniture, fixtures and equipment     188,500
                                                         --------
                                                          260,600
                                                         --------

      Liabilities assumed:
        Accounts payable                                  340,000
        Accruals                                           30,500
                                                         --------
                                                          370,500
                                                         --------

      Excess of cost over net assets acquired            $109,900
                                                         ========

      USD was to provide a range of bandwidth, Internet access and supporting
      services and network management, primarily to small and medium size
      business customers. It was management's opinion that the small to medium
      size entities would generate a good market share of potential new users.
      They would have provided Internet access, co-location access and remote
      access on a high-speed digital network. The Company would have also
      provided advisory services associated with the selection and installation
      of computer hardware. Services were to be provided nationwide. Due to the
      highly competitiveness of the bandwidth business, lack of enthusiasm by
      potential investors and the continued deficits being accumulated by the
      Company and as a result of the September 11, 2001 terrorist attack on the
      United States, management realized the value of data retention and storage
      and once again developed a new business plan.

      Management originally developed a new business plan, based on its existing
      facilities and customers. Accordingly, management was in the process of
      converting the Company from a traditional network/bandwidth provider, to a
      full Managed Service Provider (MSP) with a managed service offering of
      managed data storage. These data storage services were to be sold through
      a reseller and agent distributions, which would allow service providers to
      generate private labels or co-brand their own storage service offerings.


                                                                              11
<PAGE>

                           US DATA AUTHORITY, INC.
                      (A COMPANY IN THE DEVELOPMENT STAGE)
             SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
                     YEARS ENDED DECEMBER 31, 2002 AND 2001

1.    Organization, background and business (continued):

      It was management's intention to utilize its existing facilities and
      customer relationships to offer data storage through a set of Internet
      Protocol (IP) based services. Those services would have included IP Disk
      on Demand, IP File Sharing Services, IP Backup, and Restore Services. In
      management's opinion, this would have allowed the Company to immediately
      provide data storage to its existing customers, which could have generated
      supplemental revenues of bandwidth. By utilizing its present facilities
      and customer base, the Company would have been better able to leverage its
      present facilities and expand its future services. Due to circumstances
      beyond its control, management was unable to utilize it's current
      facilities to implement its new business plan. As an alternative, the
      Company started to seek an alternative site to implement its business plan
      for data storage.

      As an alternate, the Company commenced a dialogue with another development
      stage company located in Panama City, Panama. The Panamian company, Zona
      de Tecnologica y Telecomunicaciones, S.A. (ZTT) is in the process of
      leasing its facilities and building out a full service data retention
      center in Panama City, Panama. The center will be of a "bunker style" for
      additional security, due to the worldwide atmosphere resulting from
      September 11. Management has developed a business continuance plan, which
      will market this secured facility to business and government, worldwide.
      Any contracted services would be tailored to the individual requirements
      of any enterprise (business or government) in order to enhance security.
      On line, delivery storage will be measured in gigabytes and terabytes, not
      megabytes. Customers will be contracted for specific services and billed
      monthly. The new facility will also be able to provide additional
      redundancy to existing systems presently in use by business and
      government. That redundancy would be located outside the continental
      United States for additional security. It is management's opinion that the
      worldwide market for data retention is unlimited.

      USD will change its operations from bandwidth to bandwidth/data storage.
      Management does not consider the change to be a discontinued operation.

      Since the changes of operations in April 2000 and September 2001, the
      Company has reverted and continues to be a development stage enterprise.
      Since September 2001, USD has been executing a new business continuance
      plan to develop its data storage facilities with ZTT. Management has been
      renegotiating its relationships with major equipment suppliers as part of
      this plan. To-date, USD had yet to commence its principal planned
      operations and from inception of development stage (May 1, 2000) had only
      generated auxiliary revenues to defray the cost of its planned operations
      (past and present). It is the intent of USD's management that meaningful
      operations could be generated no later than the end of 2003, which should
      then take the Company out of development stage. The Company has financed
      its operations during the development stage from the sale of its common
      stock and from borrowings from related and unrelated parties and financing
      through creditors. Subsequent to December 31, 2002, the Company received
      additional funds from a related party of approximately $2,000,000 as
      additional capital or working capital. There can be no assurances that the
      Company will be out of development stage by the end of 2003 or that it
      will continue to receive funding or financing.

      Management has estimated that it would require approximately $6.5 million
      of additional capital to emerge from development stage. This amount is in
      excess of subsequent receipts to March 29, 2003. There are no assurances
      that the Company will be able to raise the additional capital
      requirements.


                                                                              12
<PAGE>

                           US DATA AUTHORITY, INC.
                      (A COMPANY IN THE DEVELOPMENT STAGE)
             SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
                     YEARS ENDED DECEMBER 31, 2002 AND 2001

2.    Discontinued operations:

      During the first quarter of 2000, management announced its decision to
      exit the real estate business and enter the Internet business and
      subsequently to the internet/data storage. This was effective from May
      1, 2000 to date. As a result of these changes in business operations from
      real estate to internet/data storage, the Company had restated prior
      year's Statement of Operations to present the former real estate
      operations as income from discontinued operations. For the year ended
      December 31, 2000 net income from discontinued operations was $234,900 and
      has been reflected as part of deficit in the accompanying Statement of
      Shareholders' Deficit.

3.    Summary of certain risks and uncertainties:

      The accompanying financial statements have been prepared assuming the
      Company will continue as a going concern. The Company has reported a
      working capital deficiency of $14,010,700 as of December 31, 2002 and
      $13,328,300 as of December 31, 2001, an increase of $682,400. The Company
      has also reported net losses of $9,009,400 for the year ended December 31,
      2002 and $10,262,800 for the year ended December 31, 2001. In addition,
      the Company also reported a net loss from continuing operations of
      $25,852,000 from inception of development stage (May 1, 2000) to December
      31, 2002. As reported on the statements of cash flows, the Company
      incurred deficient cash flows from operating activities of $10,367,200
      from inception of development stage (May 1, 2000) to December 31, 2002. To
      date, these have been financed principally through the sale of common and
      preferred stock, warrants, borrowings from related, and unrelated parties.
      Additional capital and/or borrowings will be necessary in order for the
      Company to continue in existence until attaining profitable operations.

      The Company's principal source of working capital funding has been and
      continues to be a small group of shareholders who have provided
      approximately $2,904,500 from inception of development stage (May 1, 2000)
      to December 31, 2002. This does not include $9,395,800 from proceeds of
      sales of common and preferred stocks and warrants. Management of the
      Company anticipates that the Company will require approximately $4,900,000
      to $6,500,000 of working capital for the year 2003 in order to meet its
      new continuance business plan. While the small group of shareholders has
      been funding to date, there can be no assurances that they will continue.

      Management has continued to develop a strategic business plan to raise
      private financing, develop a more effective management team, maintain
      reporting compliance and seek new expansive market share in its new data
      storage operations. Should the Company be successful in obtaining
      sufficient funds, management intends to continue developing its data
      storage plan.

      There can be no assurances that the Company will be successful in the
      implementation of its plan for expansion into Panama and its overall
      business plan.

      During the prior year and subsequently, the Company instituted an informal
      restructuring plan, aimed at reducing certain short-term debt and certain
      costs of operations. Employee terminations (in excess of 95%) and other
      cost reductions were implemented. The affected employees were primarily
      the non-productive sales and non-essential technical personnel. No special
      charges were incurred resulting from the employee terminations or from
      other cost reductions. In addition, management had been negotiating with
      one (1) of its principal suppliers/lender for improved debt terms of its
      outstanding debt. At present, the discussions/negotiations have subsided
      with no resolution immediately available. In the opinion of management, if
      this matter can be resolved, it would enhance the financial position of
      the Company and resolve certain cash flow requirements in the short-term.
      There can be no assurances that the discussions/negotiations will resume
      or be successful.

      The Company through its legal counsel has been negotiating with certain
      unsecured creditors to resolve outstanding balances at a discount. Legal
      counsel has been able to reach settlements with approximately $572,000 of
      unsecured creditors with a discount of approximately $301,100. The
      discounts have been credited to operations during the year ended December
      31, 2002. There can be no assurance that counsel will be as successful in
      the future with other creditors.


                                                                              13

<PAGE>

                           US DATA AUTHORITY, INC.
                      (A COMPANY IN THE DEVELOPMENT STAGE)
             SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
                     YEARS ENDED DECEMBER 31, 2002 AND 2001

3.    Summary of certain risks and uncertainties (continued):

      The Company is in dispute with another former major creditor. At present,
      a major supplier to the Company is involved in litigation on outstanding
      debt amounting to approximately $3, 433,100, which the creditor continues
      to invoice and has made claims in excess of $3,680,100, which the Company
      disputes.

      The Company is in arrears in its payment of payroll taxes for the years
      2000 and 2002. As of December 31, 2002, the Department of Treasury,
      Internal Revenue Service, including various States Departments of Revenue,
      were owed approximately $1,003,900, which included penalty and interest of
      about $250,000. Failure to liquidate the debt to the Internal Revenue
      Service and the various States, either through offer in compromises,
      periodic payments or a lump sum will have an adverse impact on the
      Company, taken as a whole. The Company estimates the delinquency for 2000
      to be approximately $534,500 and for the year 2002 to be approximately
      $163,400 and amounts due to various States amounts to about $56,000. These
      amounts do not include penalties and interest.

      Total amount due the Department of the Treasury is about $700,000, which
      does not include penalties and interest. Management is aware that the
      estimated Trust portion of the outstanding payroll taxes amounts to
      approximately $507,000, which is subject to change based on how the
      Service allocates prior payments. On April 10, 2003, the Company filed an
      Offer in Compromise with the Internal Revenue Service. The Offer in
      Compromise is to settle all outstanding payroll taxes, interest and
      penalties from May 1, 2000 to December 31, 2002 for the outstanding trust
      portion of taxes of approximately $507,000. The Company has made no such
      offers to any states that are due payroll taxes. Management anticipates
      making similar offers to each State within the next six (6) months. There
      can be no assurances that the Company and the Department of Treasury or
      any of the Departments of Revenues for the various states can reach an
      amicable solution to the arrearages.

      In accordance with internal records, the Company has complied with payroll
      taxes for the year 2001 in both filings and payments. The Service disputes
      that the filings and payments were timely completed and has made
      additional assessments for the year 2001. For the first quarter of 2003,
      the Company has complied with payroll tax filings and payments.

      Certain convertible note holders have made demand payment of their
      outstanding debt. These notes have been declared in default, and the note
      holders have threatened litigation to seek remedy. Management has been and
      continues to have discussions with these certain convertible note holders
      in order to resolve the defaults, either through extensions or through
      other means, in order to avoid litigation. There can be no assurance that
      the convertible note holders and management can resolve this matter in an
      amicable manner.

      On November 15, 2002, the Company, through a related party, advanced
      $400,000 to Zona Tecnologica y Telecomunicaciones, S.A. (ZTT), a company
      incorporated in the Country of Panama. ZTT is a company in the development
      stage, with offices in Panama City, Panama and North Miami, Florida. ZTT
      is a company that is starting to develop programs for data retention and
      is in the process of developing facilities in Panama. It is the opinion of
      management, that ZTT fits the goals established by management in
      developing data storage facilities and programs. Based upon a new business
      and performance plan developed by management, it was determined that the
      goals of both ZTT and USD were in tandem and that each company had
      attributes that complemented each other. Based of meetings between the
      parties, management wanted to control the ability of ZTT of looking
      elsewhere and decided to advance $400,000 as a non-refundable deposit on
      the potential purchase of ZTT, through a subsidiary to be formed in the
      future. The deposit was funded from the current Investor Group, which have
      provided both working capital and capital. A third party, West of America
      Financial Group, Inc. (West) presently has an option to purchase 70% of
      the common stock of ZTT. A related party to the Company wholly owns West
      and has a fee arrangement on this transaction based upon the Subscription
      Agreement, whereby West collects a fee equal to 10% of the gross
      transaction.


                                                                              14
<PAGE>

                           US DATA AUTHORITY, INC.
                      (A COMPANY IN THE DEVELOPMENT STAGE)
             SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
                     YEARS ENDED DECEMBER 31, 2002 AND 2001

3.    Summary of certain risks and uncertainties (continued):

      On January 31, 2003, the Company and ZTT entered into a pre-acquisition
      agreement for the possible purchase of the assets subject to liabilities
      of ZTT, subsequent to the Company performing its due diligence and
      obtaining current financial statements of ZTT. If management is satisfied
      with the results of its due diligence, management proposes to enter into a
      purchase agreement with ZTT. The proposed transaction would be accounted
      for as a purchase. Management will have an independent valuation made of
      the ZTT by a qualified firm.

      Under the terms of the pre-acquisition agreement, the purchase price will
      be about $10,850,000 and the related party would be entitled to a maximum
      fee of $1,085,000. USDA will acquire from West of America Financial Group,
      Inc. its option to acquire 70% of the common stock of ZTT in exchange to
      fund $6 million of working capital. The total purchase price of $10.850
      million is to be funded as follows: ($6 million on completion of due
      diligence; $3 million of preferred stock; $1.850 million for the
      assumption of ZTT Senior Debt. The purchase price is subject to adjustment
      at the end of the due diligence for any unsecured liabilities outstanding
      at the date of closing. After ZTT has received $700,000, they will then
      proceed to establish a collocated technical facility in the Greater Miami,
      Florida Area. ZTT warrants that its license to operate in the Panama Free
      Zone expires on October 23, 2010. Closing will occur when the Company
      receives a letter from the Government of Panama regarding the free zone
      license and approval, evidence regarding the financial position of ZTT and
      completion of an investor questionnaire and subscription agreement as an
      accredited investor under Regulation D of the 1933 SEC Act and finally
      approval of the transaction by both Boards of Directors. Total payments
      made to date amounts to $1.7 million, which has been obtained from the New
      Investor Group.

      There can be no assurances that the ZTT transaction will close or that the
      New Investor Group will fund the required working capital.

      The Company's management has been informally discussing its unsecured
      short-term debt with its various suppliers. With the development of its
      new business plan, management is aggressively attempting to obtain various
      credits and allowances from its unsecured creditors in order to assist the
      Company to emerge from development stage. It is the opinion of management
      that these types of efforts are a part of its restructuring plans. These
      efforts will assist the Company to obtain new financing and investors.

4.    Concentration of credit risk and dependency:

      Financial instruments that potentially subject the Company to
      concentrations of credit risk consist principally of cash, equivalents,
      and receivables. During the year, the Company's account balances with
      financial institutions may exceed federally insured limits. Management
      regularly monitors their balances and attempts to keep this potential risk
      to a minimum by maintaining their accounts with financial institutions
      that they believe are of good quality.

      The Company had a concentration of credit risk with respect to accounts
      receivable during the year, principally from sale of assets. The Company
      did not perform credit evaluations and did not require collateral from its
      customers. The Company maintains when appropriate, an allowance for
      doubtful accounts. Therefore, no additional credit risk beyond amounts
      provided for collection losses are believed inherent in the Company's
      receivables.

      The Company was dependent upon a few major suppliers of routers, other
      equipment and telephone lines necessary for operations. Management is
      making every effort to seek alternative suppliers if the current suppliers
      refuse to service the Company's needs in its new business plan.
      Alternative sources are available but there can be no assurance that the
      Company will be successful with alternative suppliers. The impact of not
      obtaining alternate suppliers will have a significant impact on the future
      operations of the Company.


                                                                              15
<PAGE>

                           US DATA AUTHORITY, INC.
                      (A COMPANY IN THE DEVELOPMENT STAGE)
             SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
                     YEARS ENDED DECEMBER 31, 2002 AND 2001

4.    Concentration of credit risk and dependency (continued):

      The Company has been and continues to be dependent upon the continued
      financing from a small group of investors, who have provided about $12.3
      million of capital and working capital loans as of December 31, 2002. The
      Company is dependent on the financing arrangements made on equipment
      leases and other types of credit. Except for certain unsecured creditors,
      the Company has also been dependent on its unsecured creditors for not
      instituting legal actions. There can be no assurances that the secured or
      unsecured creditors do not take any other actions, which if exercised,
      would place the Company under additional hardship.

5.    Details of financial statement components:

Other current assets:                                      2002           2001
                                                        ----------    ----------
        Prepaid:
          Legal                                         $  118,300    $       --
          Insurance                                         33,400        22,400
                                                        ----------    ----------

                                                        $  151,700    $   22,400
                                                        ==========    ==========

      Leaseholds, furniture, fixtures
        and equipment:
        Leasehold improvements                          $       --    $  124,600
        Furniture and fixtures                              16,400       196,600
        Equipment                                          781,200     1,301,200
                                                        ----------    ----------

                                                           797,600     1,622,400

        Less accumulated depreciation                      308,600       366,500
                                                        ----------    ----------

                                                           489,000     1,255,900

        Less allowance for tangible asset impairment       446,900            --
                                                        ----------    ----------

                                                        $   42,100    $1,255,900
                                                        ==========    ==========

      Leaseholds, furniture, fixtures and equipment are collateralized to
      Convertible notes/advances payable, shareholders and other. Leasehold
      improvements and a significant portion of furniture, fixtures and
      equipment have been either abandoned due to relocation, sold through
      unauthorized sales or thefts of equipment held by an agent of a related
      party. The tangible asset impairments are based on the latest sales price
      of similar equipment by the related party.

Accrued liabilities:

      Commissions                                     $   22,900    $   85,000
      Extended liabilities and accelerations             919,000       210,000
      Interest                                         1,031,100       606,500
      Maintenance fees                                   427,700       427,700
      Payroll                                             48,700        26,200
      Professional fees                                  116,700        50,000
      Promotion (reversed during the current year)            --       200,000
      Security deposits                                   13,800        53,400
      Tangible and intangible taxes                       25,100            --
                                                      ----------    ----------

                                                      $2,605,000    $1,658,800
                                                      ==========    ==========


                                                                              16
<PAGE>

                           US DATA AUTHORITY, INC.
                      (A COMPANY IN THE DEVELOPMENT STAGE)
             SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
                     YEARS ENDED DECEMBER 31, 2002 AND 2001

6.    Convertible notes/advances payable, shareholders and other:

<TABLE>
<CAPTION>

Convertible notes payable, shareholders and                  2002           2001
                                                           ----------    ----------
<S>                                                        <C>           <C>
      other, in default, interest ranging from 9.75%
       to 12% (18% during the default period) maturing
      on varying dates to October 25, 2002,
      called by the lenders at maturity, collateralized
      by all the assets of the Company not
      collateralized to other debt.  Lenders are under
      collateralized due to unauthorized sales of
      assets by related and third parties                  $1,690,000    $1,950,000

      Convertible advance payable, shareholder,
      non-interest bearing, unsecured, due on
      demand, in dispute                                      100,000       100,000

      Advances payable, shareholder, non-interest
      bearing, unsecured, due on demand.  Amounts
      were subsequently repaid from subsequent related
      party advances                                          522,000            --
                                                           ----------    ----------

                                                           $2,312,000    $2,050,000
                                                           ==========    ==========
</TABLE>

    Notes payable, shareholders amounting to $1,000,000 have options to convert
    the outstanding loans into common stock at a ceiling of $1.00 per share to a
    floor of the lowest price sold ($0.05) or $0.075 as of December 31, 2002.
    Notes payable, shareholders amounting to $750,000 have options to convert
    into common stock at $1.25 per share for the first 90 days down to $0.20 per
    share. In addition, certain notes contained an option to convert to
    preferred stock at rates ranging from $1.25 to $0.40 per share. During the
    year, certain common shareholders advanced $250,000 to the Company at 10%,
    with a special feature to convert the loans into preferred stock at $0.20
    per share. Certain shareholders exercised their options and converted
    $250,000 of loans into preferred stock. The preferred stock will be
    converted into common stock (1,250,000 shares) after the third anniversary
    date of the exercise (June 30, 2004). The preferred stock has a special
    voting feature. The special voting feature permits that voting rights of the
    preferred stock holders are equal ten times (10) the representative common
    stock for a three- (3) year period terminating on February 15, 2004. The
    conversion of the preferred voting rights represents the equivalent of
    12,500,000 common shares. At year-end all common stock have been issued,
    therefore, the special feature of the voting rights of the preferred stock
    representing the equivalence of 12.5 million shares may be deemed limited.

    Note payable, investor group, amounting to $200,000, has an option to
    convert the note into common shares at the lesser of $0.35 per share or 78%
    of the lowest market price traded during the thirty days prior to exercising
    the election to convert, as amended. At $0.35 per share, the note can be
    converted into 571,430 shares. Had the exercise been completed at year-end,
    the conversion per share would have been $0.0468 per share or 4,273,500
    common shares.

                                                                              17
<PAGE>

                           US DATA AUTHORITY, INC.
                      (A COMPANY IN THE DEVELOPMENT STAGE)
             SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
                     YEARS ENDED DECEMBER 31, 2002 AND 2001

6.    Convertible notes/advances payable, shareholders and other (continued):

      The unsecured convertible advance of $100,000 is presently in dispute with
      management. It is management's opinion that the unsecured advance can be
      converted into common stock at $0.50 per share (200,000 shares). It is the
      opinion of the shareholder/creditor, that the unsecured advance bears
      interest at 6% the first year and 18% thereafter. In addition, the
      unsecured advance can be converted into common stock at $0.125 per share
      or at the lowest sales price of the common stock up to October 25, 2002.
      It is the unsecured creditor's opinion that a former member of management
      approved these special features. It is the opinion of present management
      that the unsecured advance tendered the Company had no special features
      and if any former member of management approved those special features,
      then that former member acted beyond the scope of his authority.
      Management will vigorously object to any payments beyond the $0.50 per
      share in the form of common stock. Management did not accrue approximately
      $33,000 of special feature interest on this obligation.

      As of December 31, 2002, there are insufficient unissued common shares
      available to issue had all the convertible options been exercised. The
      Company would be required to increase the authorized shares through an
      amendment of its Articles of Incorporation.

      The Company has accrued interest of approximately $354,500 as of December
      31, 2002 and approximately $227,600 as of December 31, 2001 relating to
      these shareholder notes. Related party interest charged to operations was
      $226,100 for the year ended December 31, 2002 and $205,900 for the year
      ended December 31, 2001. During the year ended December 31, 2002, accrued
      interest amounting to approximately $172,400 was converted into 2,590,000
      common shares at an average of $0.0667 per share, which was the fair value
      traded at the date of exchange after allowing for a substantial discount
      for thinly traded companies.

      In March 2002, as amended on April 17, 2002 and August 2002, the Company
      entered a "Subscription Agreement" with a group of investors from Spain,
      Dominican Republic and the United States (the Old Investor Group). Under
      the terms of the agreement, the Old Investor Group were to have funded
      $18.4 million in exchange for 10 million shares of common stock at $0.16
      per share and 20 million shares of Preferred Stock, Series A, at $0.84 per
      share. The payment of the $18.4 million is upon a timetable at
      approximately thirty (30) day increments from date of closing (March 7,
      2002), which can be accelerated. The agreement granted the Old Investor
      Group options to acquire an additional 10 million common stock at sales
      prices ranging from $1.00 to $3.00 per share, when the trading value of
      the stock ranges from $2.00 to $6.00 per share. Eight (8) million of the
      ten (10) million options vests when the Company receives eighty percent
      (80%) of the $18.4 million or $14.7 million. Upon receipt of the first
      $1.0 million from the subscription agreement, the Company was to apply
      $100,000 against the amounts due the Internal Revenue Service and to
      simultaneously commence a dialog with the Service to resolve the
      outstanding payroll tax issues. These events did not occur.

      Simultaneously with the execution of the Subscription Agreement, the
      Company entered into an exclusive Engagement Agreement with US Data
      International Development, Inc., (International) an unrelated company to
      US Data Authority, Inc., but a related party to the Old Investor Group.
      The principal of the Engagement Agreement is a 37.5% participant in the
      Old Investor Group. The agreement with International expires on March 7,
      2005, with renewal options on a year to year basis, unless terminated by
      either party within a ninety- (90) day window before the anniversary date.
      International will provide all international marketing and sales
      coordination, purchasing the products at a mutually agreed upon wholesale
      price and sold by International at a retail price to be determined.
      International will negotiate the acquisition of and/or licensing of
      technologies, retrieval and storage.

      The Company, so long as it receives it's funding under the Subscription
      Agreement, shall pay to International an annual retainer fee of $1.2
      million. During the same period, International shall receive an additional
      fee of 3% of gross sales. The Company shall reimburse International all
      pre-approved production and marketing costs, including travel.


                                                                              18
<PAGE>

                           US DATA AUTHORITY, INC.
                      (A COMPANY IN THE DEVELOPMENT STAGE)
             SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
                     YEARS ENDED DECEMBER 31, 2002 AND 2001

6.    Convertible notes/advances payable, shareholders and other (continued):

      In addition, International shall receive restricted stock grants for one
      1.0 million shares of common stock at par. In addition, International is
      to be given options to acquire 3.0 million shares of common stock at 50%
      of the marked bid price beginning three months from March 7, 2002 for the
      first million shares and three months thereafter for the second million
      shares. The third million shares can be exercised when the Company
      achieves a positive EBITDA for a three-month consecutive period. All
      options for International vest immediately and expire on March 7, 2007.

      The principal of International, who is also a member of the Old Investor
      Group, has an oral placement agent and consulting agreement with the
      Company, whereby the related party is entitled to payments in cash equal
      to ten percent (10%) of the gross amount of each installment to be paid to
      the Company by the Investor Group. The ten percent (10%) fee is payable
      when each installment is received by the Company. Maximum fees to the
      related party will be $1.84 million.

      On November 1, 2002, a new "Escrow Agreement" was entered into with
      limited liability companies from the Netherlands and British Virgin
      Islands (New Investor Group). The new agreement amends the Amended and
      Restated Subscription Agreement between the Old Investor Group and the
      Company with the New Investor group. Under the new terms, the New Investor
      Group has assumed all the rights and obligations of the Old Investor Group
      under the original subscription agreement of August 1, 2002. The New
      Investor Group is to purchase an aggregate of $7.9 million of common and
      preferred stock. If the New Investor Group does not fund the proceeds,
      under the rules of subrogation, the Old Investor Group would be obligated.
      Under the terms of the amended agreement, all proceeds are deposited into
      an escrow account before distribution to the Company. On execution of the
      agreement, the Company was funded $1.0 million. Subsequent to December 31,
      2002, the Company was funded an additional $2.0 million which was utilized
      to partially fund the ZTT transaction and to reimburse the Investor Group
      its other advances of $522,000. Management has made demand for the balance
      of the agreement of $4.9 million; otherwise, the Company would deem the
      agreement in default.

      The agreement between International and the Old Investor Group remains in
      effect with the New Investor Group. Under the new agreement, maximum fees
      to the related party would be $790,000. Total fees paid to date to the
      related party as a result of the Old and New Investor Group proceeds
      amounted to $400,000 which has consisted of $200,000 as a 10% finders fee
      and $200,000 as a marketing fee on the proposed ZTT acquisition. These
      amounts have been charged to current operations for the year 2002. During
      the subsequent period, an additional $200,000 was paid to the related
      party.

      As a result of the change in the agreements between the Old Investor Group
      and the New Investor Group maximum financing and capital available to the
      Company decreased $10.5 million from $18.4 million to $7.9 million. The
      decrease in available funding could have an adverse effect on the Company.
      In addition, the Company does not currently have adequate common shares
      available to satisfy all options under the agreement. There are no
      assurances that the Subscription Agreement will be fully funded.


                                                                              19
<PAGE>

                           US DATA AUTHORITY, INC.
                      (A COMPANY IN THE DEVELOPMENT STAGE)
             SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
                     YEARS ENDED DECEMBER 31, 2002 AND 2001

7.    Capitalized lease obligations, in default:

<TABLE>
<CAPTION>
                                                                   2002          2001
                                                               ----------    -----------
<S>                                                            <C>           <C>
      Capitalized lease obligations,in
      default, imputed interest at rates ranging from
      6.58% to 15.57%, collateralized by Equipment Under
      Capitalized Leases, payable $174,700 per
      month, which includes interest and
      maintenance agreement fees, maturing at varying dates
      to 2004                                                  $4,812,800    $4,812,800

      Less imputed interest, $785,300 in 2002
      and 2001; maintenance costs, $402,200 in
      2002 and 2001                                             1,187,500     1,187,500
                                                               ----------    ----------

                                                                3,625,300     3,625,300

      Less current portion of capitalized lease

        obligations (in default since 2001)                     3,625,300     3,625,300
                                                               ----------    ----------

                                                               $        -    $        -
                                                               ==========    ==========
</TABLE>

The Company is in default of its capitalized lease obligations and accordingly
has reflected the principal portion of the lease as a current liability. Had the
Company not been in default of its capitalized leases, annual maturies of the
obligations subsequent to December 31, 2000, would have been as follows:

        Year Ending     Total
        December 31,   Payments      Principal      Interest     Maintenance
        ------------  ----------    ----------    ----------    ------------
            2001      $1,724,900    $  994,800    $  392,200    $  337,900
            2002       1,502,400     1,196,400       278,300        27,700
            2003       1,508,900     1,365,500       112,100        31,300
            2004          76,600        68,600         2,700         5,300
                      ----------    ----------    ----------    ----------

                      $4,812,800    $3,625,300    $  785,300    $  402,200
                      ==========    ==========    ==========    ==========

      Approximately $676,600 of past due interest and $427,000 of past due
      maintenance fees have been accrued and are reflected in accrued
      liabilities in the accompanying balance sheets. These amounts have been
      charged to operations.

      Management has been negotiating with the creditor for new terms.
      Management wants to return the equipment, however, since a majority of the
      equipment under capitalized leases were sold and reduced to fair value,
      managements ability to negotiate has been compromised as a result of these
      unauthorized sales. As previously disclosed, a representative of a related
      party sold equipment to which they did not have title. Subsequent sales
      were unauthorized by management. Management has attempted to rescind the
      sales, but has been unable to do so. Due to the recent sales of the
      equipment, the net book value of capitalized leases of $996,100 has been
      reduced to fair value of $198,600. There can be no assurances that
      management and the creditor will reach an amicable resolution to this
      matter.


                                                                              20
<PAGE>

                           US DATA AUTHORITY, INC.
                      (A COMPANY IN THE DEVELOPMENT STAGE)
             SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
                     YEARS ENDED DECEMBER 31, 2002 AND 2001

8.    Income taxes:

      Deferred income taxes reflect the net tax effects of temporary differences
      between the carrying amounts of assets and liabilities for financial
      reporting purposes and the amounts used for income purposes.

Components of the net deferred tax asset at December 31,
2002 and 2001 are as follows:

<TABLE>
<CAPTION>

Deferred tax asset:                                         2002          2001
                                                         ----------    ----------
<S>                                                      <C>           <C>
        Net operating loss from continuing operations    $3,475,400    $3,958,900

        Less valuation allowance                          3,475,400     3,958,900
                                                         ----------    ----------

      Net deferred tax asset                             $       --    $       --
                                                         ==========    ==========
</TABLE>

The valuation allowance is provided when it is more likely than not that the tax
benefit may not be realized.

The provision (benefit) for income taxes differs from the amount of income tax
(benefit) determined by applying the applicable federal tax rate due to the
following:

<TABLE>
<CAPTION>

<S>                                                              <C>             <C>
      U.S. Federal statutory income tax rate of 35% (benefit)
        From continuing operations                               $(3,153,300)    $(3,592,000)

      Effective state income tax (benefit), net of
        Federal benefit:
          From continuing operations                                (322,100)       (366,900)
                                                                 -----------     -----------

                                                                  (3,475,400)     (3,958,900)

      Valuation allowance                                          3,475,400       3,958,900
                                                                 -----------     -----------

                                                                 $        --     $        --
                                                                 ===========     ===========
</TABLE>

      At December 31, 2002, the Company had available federal net operating loss
      carryforwards available to reduce future taxable income of approximately
      $23,500,000, which expires in 2017.

      In accordance with certain provisions of the Tax Reform Act of 1986, a
      change in ownership of greater that 50% of a corporation within a
      three-year period will place an annual limitation on the corporation's
      ability to utilize its existing tax benefit carryforwards. Such a change
      in ownership occurred in 2000. However, based upon the amount of the
      taxable loss incurred prior to the change in ownership, the Company
      estimates that no annual limitation will apply to the net operating loss
      carryforwards.

9.    Options and warrants:

      The Company has granted various stock options to various employees and to
      a shareholder under an employment agreement and to certain other
      shareholders who have provided financing under notes payable,
      shareholders. The USD Stock Incentive Plan, administered by a Compensation
      Committee for officers and key employees, may grant options at prices
      established by the Committee when an option if granted, which usually will
      be the fair market value of the common stock at the date of the grant. The
      Plan provides that the options will expire as the Committee may specify in
      the applicable option agreement.


                                                                              21
<PAGE>

                           US DATA AUTHORITY, INC.
                      (A COMPANY IN THE DEVELOPMENT STAGE)
             SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
                     YEARS ENDED DECEMBER 31, 2002 AND 2001

9.    Options and warrants (continued):

      The Company has also issued stock purchase warrants. The warrants were
      issued between 2000 and 2002 at an initial value ranging from $7.17 to
      $7.25 per warrant. Each warrant represents the right to purchase one share
      of stock. The warrants expire on varying dates from September 27, 2002 to
      June 30, 2005.

      During 2001, 500,000 employee stock options were granted and exercised at
      $0.01 per share. The options exercised during the year were recorded at
      the fair value of the stock traded less a discount of 65%. An investor
      group converted a portion of the convertible note into 10,000 common
      shares at $0.1092 per share. No warrants have been exercised. The options
      granted employees have been vested. The strike prices of the warrants are,
      in general, greater than the fair market value of the common stock when
      the warrants were issued.

      A summary of options and warrants as of December 31, 2002 and 2001 are
      presented as follows:

<TABLE>
<CAPTION>
                                                Weighted
                                               Average Price          Total            Options         Warrants
                                              --------------       -----------      -----------      -----------
<S>                                           <C>                   <C>              <C>                <C>
      Balance, beginning, January 1, 2001                            4,682,267        1,605,600        3,076,667
      Add (deduct):
        Employee stock
          incentive plan                      $        0.001             0.001          774,300          774,300

        Employees stock options
          exercised or expired                                                       (1,379,900)      (1,379,900)

        Shareholders                          $0.10 to $0.36        15,250,000          750,000       14,500,000

        Services                              $         7.25              7.25           28,571           28,571

        Preferred stock                       $         0.20              0.20        1,250,000        1,250,000

        Old Investor Group                    $0.35 to $0.05           841,430          571,430          270,000

                                                                   -----------      -----------      -----------

      Balance, December 31, 2001                                    21,446,668        3,571,430       17,875,238

      Add (deduct):
        Exercised by shareholder              $         0.01        (1,500,000)      (1,250,000)        (250,000)

        Expirations                           $         0.01        (1,308,571)        (750,000)        (558,571)

        Shareholders/employees                $         0.01         2,000,000        2,000,000

                                                                   -----------      -----------      -----------

      Balance, December 31, 2002                                    20,638,097        1,571,430       19,066,667
                                                                   ===========      ===========      ===========
</TABLE>


                                                                              22
<PAGE>

                           US DATA AUTHORITY, INC.
                      (A COMPANY IN THE DEVELOPMENT STAGE)
             SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
                     YEARS ENDED DECEMBER 31, 2002 AND 2001

10.   Equity securities:

      Preferred stock:

      As previously discussed in Note 6 of Notes to Financial Statements,
      certain shareholders advanced $250,000 of working capital to the Company.
      These advances had a special conversion feature for preferred stock, which
      was exercised during the year. As a result of the exercise, 1,250,000
      shares of preferred stock were issued as satisfaction to the working
      capital advances at $0.20 per share. These preferred shares have a special
      voting feature equal to ten times (10) the representative common stock for
      a three- (3) year period terminating February 15, 2004. The special voting
      feature of the preferred stock represents the equivalent of 12,500,000
      common shares. The preferred stock can be converted to common stock on a
      one for one basis or 1,250,000 common shares. Management based on the lack
      of marketability of both the preferred and common stock determined the
      fair value of the preferred stock. Management used the fair value of its
      common stock, which the Company used in the selling of securities in
      private placements. The preferred stock has no preferences and according
      to counsel may be issued at less than par.

      Common stock:

      During 2002 and 2001, the Company sold approximately 80.0 million common
      shares for $6.7 million. The weighted average sale price was about $0.0833
      per share. During this same period the average fair market value of the
      security ranged from a high of $2.21 to a low of $0.05 per share. The
      securities sold by the Company ranged from a high of $1.50 to a low of
      $0.05 per share. Due to the lack of marketability and other factors, the
      Company discounted the shares from 80% to 10%. Total discounts for the
      year 2002 amounted to about $1.6 million and for the year 2001 amounted to
      about $14,300.

      For the year 2002, the Company issued about 15.2 million shares of common
      stock for debt and services amounting to approximately $1,498,200 or an
      average of $0.09834 per share. For the year 2001, the Company issued
      common stock for services amounting to approximately 5.1 million shares
      for $381,800 or an average of $0.0758 per share. These shares also
      contained the same discounts that were given to the other shareholders
      ranging from 45% to 65%.

      Escrow performance shares:

      As part of a sale of securities to an investor group, the investor group
      demanded that the Company assures the investor group that it would earn a
      25% return on investment and that the Company would have completed certain
      performances. In accordance with that commitment, the Company issued
      526,316 common shares as a performance bond, which shares were placed in
      escrow with the investor's group attorney. These performance securities
      were valued at fair value, after a discount of 58% amounting to $210,500.
      The investor group earns the shares, for non-performance by the Company,
      on a monthly basis. As of December 31, 2002 and 2001, the investor group
      earned approximately 150,000 and 212,500 escrow shares, respectively, or
      362,500 shares. The fair value of those shares amounting to $60,000 has
      been charged to operations in 2002 and $85,000 has been charged to
      operations in 2001. The escrow shares are reflected as part of
      shareholders deficit.

11.   Commitments, contingencies, litigation, transactions with related parties
      and subsequent event:

      Employment contracts:

      In 2000 and 2002, the Company executed two- (2) employment agreements with
      key members of management. The agreements have renewal options ranging
      from two (2) to three (3) years with an additional one (1) year renewal
      (presently in negotiation). The agreements provide for annual compensation
      aggregating $229,000, when the Company becomes fully funded. Any
      underpayments shall be accrued and paid later. The agreements provides for
      an annual incentive bonus based on performance. The incentive bonus is
      determined annually based on one percent (1.0%) of the Company's net
      income or profit before EBITDA based on sales, dependent on the agreement.
      Bonuses can be paid in cash or its equivalent in common stock.


                                                                              23
<PAGE>

                           US DATA AUTHORITY, INC.
                      (A COMPANY IN THE DEVELOPMENT STAGE)
             SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
                     YEARS ENDED DECEMBER 31, 2002 AND 2001

11.   Commitments, contingencies, litigation, transactions with related parties
      and subsequent event (continued):

      One of the agreements has an option to purchase 500,000 common shares at
      $0.01 per share. The option terminates in 2007. On the other agreement for
      each $5 million dollar increment in sales, the agreement provides for
      $50,000 in bonus. The incentive bonus can be paid in cash or Company
      stock, at the employee's option. If payment is made in the form common
      stock of the Company, the price shall be based on eighty percent (80.0%)
      of the average bid-asked price on the day of exercise. While employed,
      there is no limit on the exercise period. If termination were to occur, so
      long as the Company reached fifty percent (50.0%) of the first incentive
      plateau ($5 million), the employee will be entitled to a pro-rata share of
      the incentive plan. Total minimum commitments under the agreements are
      $562,000, which includes the renewal options and excluding any incentive
      plan. Future increases in the annual base compensation are at the
      discretion of the Board of Directors. In addition, there exists a sign-on
      bonus, amounting to 4.44% of the outstanding shares, non-dilutive common
      shares. Since this agreement is in the renewal period, the Board has
      assigned new members to develop a new agreement. There are no other
      employment contracts at present.

      Rental commitments:

      The Company conducts it operations from leased premises from a related
      party and leases certain equipment under operating leases. The related
      party maintains a master lease on the present facilities. Under the terms
      of the master lease, the related party lease has a term from 2002 to 2007,
      with a base rent of $312,800 over the full term, plus annual CAM
      adjustments. The related party sub-leases a portion of its office
      facilities to the Company for a term beginning in 2002 and terminating in
      2007. Under the terms of the sub-lease, agreement the Company has a total
      commitment of $126,200 plus annual CAM adjustments. Minimum rental
      commitments under non-cancelable leases in effect at December 31, 2002
      were as follows:

         Year Ending
         December 31,     Total        Facilities       Equipment
         ------------   --------       ----------       ---------
            2003        $ 32,200        $ 25,800        $  6,400
            2004          25,800          25,800              --
            2005          25,800          25,800              --
            2006          25,800          25,800              --
            2007          17,200          17,200              --
                                                        --------

                        $126,800        $120,400        $  6,400
                                                        ========

      Litigation:

      The Company is a defendant in a matter before the United States District
      Court, Southern Division of Florida, concerning breaches of a series of
      agreements with a major supplier with claims in excess of $2.0 million.
      The Company has denied the allegations and is asserting a series of
      affirmative defenses primarily in the nature that the supplier failed to
      furnish the services and was incapable of furnishing the services when the
      Company was induced to enter the agreements. The Company has filed a
      counterclaim. Management is vigorously defending the complaint and
      absolutely denies any liability on the contracts the supplier asserts that
      give rise to the claims. It is counsel's opinion that the Company will
      prevail in this matter.

      The Company is a defendant in a matter before the Fulton County Superior
      Court, Georgia for non-payment of outstanding legal fees of about $81,800,
      which amount has been accrued. Management of the Company is vigorously
      defending this matter. The plaintiff subsequently dropped the lawsuit with
      prejudice.

      The Company is a defendant in a verified complaint in the State Court of
      Minnesota. The plaintiff seeks immediate return of leased equipment, as
      well as a judgment in excess of $65,000. The defendant has denied the
      complaint and the matter is scheduled for arbitration. Counsel cannot
      predict the outcome of the arbitration.


                                                                              24
<PAGE>

                           US DATA AUTHORITY, INC.
                      (A COMPANY IN THE DEVELOPMENT STAGE)
             SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
                     YEARS ENDED DECEMBER 31, 2002 AND 2001

11.   Commitments, contingencies, litigation, transactions with related parties
      and subsequent event (continued):


      Litigation (continued): The Company was a defendant in a matter concerning
      common stock voting rights issued to a former officer. The former officer
      was the original proxy holder of 6,066,625 shares. As a result of the
      dismissal against the Company, the plaintiff continues to pursue relief
      against the other defendants. Management will vigorously defend any claims
      made against the Company resulting from this action, which may arise. The
      Board of Directors did accept a third party to be the Proxy Holder of
      these shares.

      The Company is a defendant in a matter before the United States District
      Court for the District of Colorado. The plaintiff in this matter has made
      assertions of breach of contract, fraudulent misrepresentation and
      concealment, negligently misrepresentation, violation of the Colorado
      Consumer Protection Act, theft, violation of the State and Federal
      Racketeer Influenced and Corrupt Organizations Act (RICO). The plaintiff
      has made claims in excess of $1 million. This matter in still in discovery
      and will not come to trial until 2003. Management has contested the case
      vigorously. However, management would consider a reasonable offer of less
      than $100,000. It is counsel's opinion that the only potentially valid
      claim is for breach of contract and perhaps the negligent
      misrepresentation. All other claims are questionable, at best. Counsel has
      estimated that the potential loss to be less than $250,000. This amount
      has been accrued and reflected as an accrued liability.

      From time to time, the Company is a defendant in various other matters.
      The Company considers those types of matters to be incidental to the
      Company's business and is of the opinion that any financial exposure will
      not materially affect the financial position of the Company.

      Transactions with related parties: The following is a summary of
      transactions with related parties as of December 31:

<TABLE>
<CAPTION>
                                                            2002             2001
                                                         -----------     ----------
<S>                                                      <C>             <C>
      Compensation to officer/shareholder                $   125,000     $  125,000
                                                         ===========     ==========
      Related party notes, loans and advances            $   604,500     $1,200,000
                                                         ===========     ==========
                                                                         ==========
      Interest on related party notes and advances       $   299,200     $  205,600
                                                         ===========     ==========
      Related party security sales:
        Preferred stock conversion                       $        --     $1,250,000
                                                         ===========     ==========
        Common and perferred stock                       $ 1,900,000     $  460,000
                                                         ===========     ==========
      Related party rent                                 $     8,600     $       --
                                                         ===========     ==========
      Related party commissions and fees                 $   400,000     $       --
                                                         ===========     ==========
      Related party legal fees                           $    46,500     $       --
                                                         ===========     ==========
      Unauthorized and related party equipment sales     $   273,200     $       --
                                                         ===========     ==========
</TABLE>

      Subsequent events:

      As previously disclosed elsewhere in the notes to financial statements,
      the Company has received additional working capital through the additional
      borrowings.


                                                                              25
<PAGE>

                             US DATA AUTHORITY, INC.
                      (A COMPANY IN THE DEVELOPMENT STAGE)
             SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
                     YEARS ENDED DECEMBER 31, 2002 AND 2001

12.   Selected quarterly financial data (unaudited):

      Quarterly results of operations (unaudited) for 2002 and 2001 are
      summarized as follows (in thousands, except per share data):

<TABLE>
<CAPTION>
                                                              Quarter Ended
                                        -----------------------------------------------------------
                2002                      3/31        6/30          9/30        12/31         Total
                                        -------      -------      -------      -------      -------
<S>                                     <C>          <C>          <C>          <C>          <C>
Revenues:
  Sales                                 $    72      $    87      $    14      $    36      $   209
                                        -------      -------      -------      -------      -------

      Operating expenses:
        Technical and content               564          179          414         (211)         946
        Compensation and related
          benefits                          566          184          211           57        1,018
        Marketing and sales                 132          612           (2)         115          857
        General and administrative          409        1,406          230          324        2,369
        Interest                            206          211          451          (29)         839
        Rent                                 39           26            8            9           82
        Amortization/depreciation           213          206          209        1,303        1,931
                                        -------      -------      -------      -------      -------
                                          2,129        2,824        1,521        1,568        8,042
      Interest income and other               6            4            5           39           54
                                        -------      -------      -------      -------      -------
                                          2,123        2,820        1,516        1,529        7,988
                                                                                            -------
                                         (2,051)      (2,733)      (1,502)      (1,493)      (7,779)
      Loss on sale of assets                 --           --         (764)        (466)      (1,230)
                                        -------      -------      -------      -------      -------

      Net loss                          $(2,051)     $(2,733)     $(2,266)     $(1,959)     $(9,009)
                                        =======      =======      =======      =======      =======

      (Loss) per share:

        Basic and diluted               $ (0.03)     $ (0.03)     $ (0.02)     $ (0.03)     $ (0.11)
                                        =======      =======      =======      =======      =======

      Market price of common stock:
        High                            $  0.23      $  0.13      $  0.10      $  0.06      $  0.52
                                        =======      =======      =======      =======      =======

        Low                             $  0.22      $  0.13      $  0.08      $  0.05      $  0.48
                                        =======      =======      =======      =======      =======

        Close                           $  0.22      $  0.13      $  0.08      $  0.06      $  0.49
                                        =======      =======      =======      =======      =======
</TABLE>

      The credits for the fourth quarter (technical/content and interest) is a
      result of reclassifications from the prior quarters.


                                                                              26

<PAGE>

                             US DATA AUTHORITY, INC.
                      (A COMPANY IN THE DEVELOPMENT STAGE)
             SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
                     YEARS ENDED DECEMBER 31, 2002 AND 2001

12.   Selected quarterly financial data (unaudited) (continued):

<TABLE>
<CAPTION>
                                                              Quarter Ended
                                        ----------------------------------------------------------------
                2001                       3/31         6/30           9/30         12/31          Total
                                        --------      --------      --------      --------      --------
<S>                                     <C>           <C>           <C>           <C>           <C>
      Revenues:
        Sales                           $    372      $    385      $    696      $     35      $  1,488
                                                                                                --------

      Operating expenses:

        Technical and content              1,315         2,526         2,140           230         6,211
        Compensation and related
          benefits                         1,130         1,059           500           524         3,213
        Marketing and sales                   80            31            16           289           416
        General and administrative           316           347           580           700         1,943
        Interest                             169           217           382            59           827
        Rent                                  40             8            51            20           119
        Amortization/depreciation            205           210           294           202           911
                                        --------      --------      --------      --------      --------

                                           3,255         4,398         3,963         2,024        13,640
      Interest income and other                2             1            --            36            39
                                        --------      --------      --------      --------      --------
                                           3,253         4,397         3,963         1,988        13,601
                                        --------      --------      --------      --------      --------
                                          (2,881)       (4,012)       (3,267)       (1,953)      (12,113)
      Settlements and credits                 --         1,524           265            61         1,850
                                        --------      --------      --------      --------      --------

      Net loss                          $ (2,881)     $ (2,488)     $ (3,002)     $ (1,892)     $(10,263)
                                        ========      ========      ========      ========      ========

      (Loss) per share:

        Basic and diluted               $  (0.14)     $  (0.12)     $  (0.07)     $  (0.04)     $  (0.30)
                                        ========      ========      ========      ========      ========

      Market price of common stock:
          High                          $   1.13      $   0.37      $   0.22      $   0.33      $   1.13
                                        ========      ========      ========      ========      ========

          Low                           $   1.06      $   0.31      $   0.14      $   0.30      $   0.14
                                        ========      ========      ========      ========      ========

          Close                         $   1.09      $   0.31      $   0.22      $   0.30      $   0.30
                                        ========      ========      ========      ========      ========
</TABLE>


                                                                              27





<PAGE>

                                    PART III.

Item 8. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.

None.

Item 9. Directors, Executive Officers, Promoters and Control Persons; Compliance
with Section 16(a) of the Securities and Exchange Act of 1934.

                        Directors and Executive Officers

      The following table sets forth specific information regarding our
executive officers and directors as of the date of this report.


NAME                              AGE     POSITION
-----                             ----    --------
Robert M. Beaton                  55      Director
Michael A. Cutler                 48      Director, Chairman
Mauricio von Luxburg              30      Director
Dominick F. Maggio                50      Director, President and Chief
                                            Executive Officer
Enrique Miranda                   63      Director
Charles Molinari                  36      Director
Mario Perez                       33      Director
Daniel J. Shamy                   27      Director

      The directors of our company are elected to hold office until the next
annual meeting of shareholders and until their respective successors have been
elected and qualified.

               Biographies of Our Executive Officers And Directors

Robert M. Beaton. Mr. Beaton has served as a member of our board of directors
since May 23, 2001. Since 1996, Mr. Beaton has been a principal in AB
Investments, LLC, an investment and consulting firm located in Evergreen,
Colorado. He earned a B.A. in

<PAGE>

finance from the University of Alabama.

Michael A. Cutler. Mr. Cutler has served as a member of our board of directors
since April 25, 2000 and as its Chairman since April 29, 2002. He also served as
a director of US Data Authority, Inc., pre-merger, from March 14 - May 1, 2000.
For the last ten years, he has been a director of the Personal Communications
Industry Association ("PCIA"), acting in various lobbying capacities and
involved in PCIA's FCC rule-making efforts. During 1976-1996, Mr. Cutler served
as President of Commsite International, Inc., a communications site management
and acquisition company. He earned a B.A. in political science from the
University of Delaware and his J.D. from the Potomac Law School in Washington,
DC.

Dominick F. Maggio. Mr. Maggio has served as a director as well as the President
and CEO of the Company since April 29, 2002, and as its Executive Vice
President/Chief Operating Officer from June 2000 until April 29, 2002. Prior to
joining the Company, during 1997-2000, he was President/CEO of Secure
Transaction International Corporation (STIC) and COO of Axxsys International,
Inc., both technology companies. Prior to that, during 1982 - 1997, he served as
President of the advertising firm Maggio Simpson & Hanes and was a private
marketing consultant. He graduated from the University of South Florida in 1974
with a Bachelors degree in Mass Communication.

Enrique Miranda. Mr. Miranda has served as a member of our board of directors
since February 28, 2003. Mr. Miranda was named to the Board to represent the
Spanish Investment Group, and has been in private practice as an attorney for
over 39 years. Majoring in Political Science, Mr. Miranda graduated from the
University of Puerto Rico, then went on to earn his law degree at the
InterAmerican University Law School in San Juan Puerto Rico. Admitted to the
Puerto Rican Bar in 1965, Mr. Miranda was a trial attorney, public defender and
then worked as an Assistant State Attorney. Since moving to the United States
and being admitted to the Florida Bar in 1984, Mr.. Miranda has remained in
private practice.

Charles J. Molinari. Mr. Molinari has served as a member of our board of
directors since April 29, 2002. He has served as President of C. Molinari
Construction, Inc., a construction company with commercial and residential
projects in Vail, Colorado, since 1997. Prior to 1997, Mr. Molinari was an
Internal Audit Manager for Morgan Stanley & Co., Inc. for four years. He earned
a Bachelors degree in Business Administration in Public Accounting from Pace
University.

Mario Perez. Mr. Perez has served as a member of our board of directors since
April 29, 2002. Since 1998, he has been is a self-employed business consultant,
specializing in

<PAGE>

finance, real estate and technology development. During 1994 - 1998, Mr. Perez
was the Director of Financial Operations of SUR Invest, a firm specializing in
the asset management of individuals. Mr. Perez has earned Bachelors degrees in
Economics and Business Administration from Universidad Iberosamericana in the
Dominican Republic.

Daniel J. Shamy. Mr. Shamy has served as a member of our board of directors
since February 28, 2003. From 1993 to 1998, Mr. Shamy had assisted in the
operation of a number of family held private corporations located in New Jersey
and Philadelphia. The primary businesses for which Mr. Shamy had participated,
were Real Estate, Hospitality Industry, as well as Jewelry wholesaling and
marketing. Mr. Shamy had graduated Rider University located in New Jersey in
1998, with a B.A. in English, with honors and is a graduate of Nova Southeastern
Shepard Broad Law School. In December of 2001, Mr. Shamy had founded The Law
Offices of Daniel J. Shamy, PA. In May of 2002, Mr. Shamy had merged his firm
with another firm, and created Kotzker/Shamy, PL, now located in Pompano Beach,
Florida.

Mauricio von Luxburg. Mr. von Luxburg has served as a member of our board of
directors since February 28, 2003. Mr. Von Luxburg has been responsible for the
development of many telecommunications for major firms worldwide, and it was
during one of these assignments that he discovered the infrastructure potential
within Panama, and directly petitioned the government to help create a free zone
from which a major telecommunications hub could be created. He co-founded Zona
de Tecnologica y Telecomunicaciones, SA ("ZTT"), locating it in Panama prior to
the creation of the free zone at the Technopark of Panama, later renamed The
City of Knowledge (Ciudad del Saber). Among his major responsibilities prior to
forming ZTT, Mr. Von Luxburg helped design the Andean NAP for Colombian Telecom,
and also worked as Consultant for companies such as Deutsche Telekom for the
design of Internet Exchanges and Siemens in GSM Projects. He has worked with as
Managing Director of two ISP's in Colombia and designed the Internet strategy
for the 16 ISP's owned by the Colombian Telecom (Major ISP in Colombia). He
graduated from Johann Wolfgang Goethe Universitaet, with a degree in Business
Administration, 1993; earned a Master in Finance in 1994; and a doctorate in
Central Bank Politics in 1996. This level of expertise gives Mr. Von Luxburg
excellent working knowledge of the banking industry. Mr. Von Luxburg earned his
Series 3 and Series 7 licenses from the NASD and NFA.

<PAGE>

Section 16(a) Beneficial Ownership Reporting Compliance

      To our knowledge, based solely on a review of forms 3, 4 and 5, and
amendments thereto furnished to us under Rule 16a-3(e), the following entities
and individuals failed to file on a timely basis the following reports required
by Section 16(a) of the Exchange Act: (i) Michael A. Cutler failed to file a
Form 4 within 10 days of August 2001, the month in which there was a change in
his beneficial ownership of securities; (ii) Peter D. Kirschner failed to file a
Form 3 within 10 days of October 23, 2001, the day he was elected President and
Chief Executive Officer and failed to file a Form 4 within 10 days of November
2001, the month in which there was a change in his beneficial ownership of
securities; (iii) David P. Lonski failed to file a Form 4 within 45 days of the
end of 2000, the year in which he became a director, failed to file a Form 3
within 10 days after January 12, 2001, the day he was elected Chairman of the
Board, and failed to file a Form 4 within 10 days of each of January 2001,
February 2001, May 2001, and August 2001, each being a month in which there was
a change in his beneficial ownership of securities; (iv) Richard J. Lucibella
failed to file Form 5 within 45 days of the end of 2000, the year in which there
was a change in his beneficial ownership; (v) Dominick F. Maggio failed to file
a Form 5 within 45 days of the end of 2000, the year in which there was a change
in his beneficial ownership of securities, and failed to file a Form 4 within 10
days of November 2001, the month in which there was a change in his beneficial
ownership of securities; (vi) Raymond J. Markman failed to file a Form 5 within
45 days of the end of 2000, the year in which he became a director and there was
a change in his beneficial ownership of securities, and failed to file a Form 4
within 10 days of each of January 2001, March 2001, August 2001 and January
2002, each being a month in which there was a change in his beneficial ownership
of securities; (vii) Robert Sepos failed to file a Form 4 within 10 days of
January 2002, the month in which there was a change in his beneficial ownership
of securities; (viii) Joseph E. Shamy failed to file a Form 5 within 45 days of
the end of 2000, the year in which he became a director and there was a change
in his beneficial ownership of securities, and failed to file a form 4 within 10
days of each of January 2001, February 2001, March 2001, April 2001, May 2001
and August 2001, each being a month in which there was a change in his
beneficial ownership of securities; and (ix) Melvyn B. Siegel failed to file a
Form 5 within 45 days of the end of 2000, the year in which there was a change
in his beneficial ownership of securities, and failed to file a Form 4 within 10
days of each of February 2001 and January 2002, each being a month in which
there was a change in his beneficial ownership of securities.

      We are currently assisting our directors, officers, and 10% stockholders
in taking

<PAGE>

the steps necessary to comply with the Section 16(a) reporting requirements.

Item 10. Executive Compensation.

                           Summary Compensation Table

      The following table sets forth information relating to the compensation we
paid during the past three fiscal years to our Chief Executive Officer and to
our four highest paid executive officers who earned more than $100,000 during
the fiscal year ended December 31, 2002:

<TABLE>
<CAPTION>

                    Name                 Year           Annual             Long-Term Compensation               All Other
                                                    Compensation                                                 Comp.
                                                                Other                   Awards
                                                  Salary  Bon.   Ann.
                                                    ($)   ($)   Comp               Secs. Underly-ing   LT-IP
                                                                      Rest. Stock   Option/ SARs        ($)
<S>                                       <C>    <C>      <C>    <C>  <C>           <C>               <C>        <C>
 Dominick F. Maggio, CEO and              2002   125,000   0       0           0                        0        6,000
 President(1)                             2001   125,000   0       0   1,500,000                        0            0
                                          2000   125,000   0       0   1,000,000                        0            0

 Peter D. Kirschner, former CEO &         2002    60,000   0       0     500,000              0         0        9,754
 President(2)                             2001             0       0           0        500,000         0
                                          2000             0       0           0              0         0

Jack B. Blount, former Chairman, CEO &    2001     8,654   0       0           0              0         0            0
President (3)                             2000    64,904   0       0      50,000              0         0            0

Melvyn Siegel, former Chairman & CEO(4)   2001         0   0       0           0              0         0            0
                                          2000         0   0       0           0              0         0            0

Herbert Hirsch, former President (5)      2001         0   0       0           0              0         0            0
                                          2000         0   0       0           0              0         0            0
</TABLE>

      1.    Mr. Maggio has served as our President and Chief Executive Officer
            since April 29, 2002.

<PAGE>

      2.    Mr. Kirschner served as our President and Chief Executive Officer
            during October 23, 2001-April 29, 2002.

      3.    Mr. Blount served as our Chief Executive Officer and President from
            September 2000, and as our Chairman of the Board from October 2000,
            until his resignation on January 12, 2001.

      4.    Mr. Siegel has served as Chairman of the Board and Chief Executive
            Officer from May 11, 2000 until his resignation in September 2000.

      5.    Mr. Hirsch served as our President (at a time when we had no CEO)
            from August 1996 until his resignation in conjunction with our
            merger with US Data Authority, Inc., in April 2000.

                        Option Grants in Last Fiscal Year

      We did not award any option grants during fiscal year ended December 31,
2002 to our Chief Executive Officer or to our four highest paid executives who
earned more than $100,000 during the fiscal year ended December 31, 2002.

                              Stock Incentive Plan

      The board of directors has adopted a stock option plan titled the 2000
Stock Incentive Plan (the "Plan"). We have reserved 2,000,000 shares of Common
Stock for issuance under the Plan. The Plan is intended to assist us in securing
and retaining key employees, directors and consultants by allowing them to
participate in our ownership and growth through the grant of incentive and
non-qualified stock options, and restricted stock.

      Under the Plan we may grant incentive stock options only to our employees,
and we may grant non-qualified options or restricted stock to our employees,
officers, directors and consultants. The Plan is currently administered by our
board of directors.

      Subject to the provisions of the Plan, the board of directors will
determine who shall receive grants under the Plan and the type and terms of such
grants.

<PAGE>

      As of the date of this report, there are no options outstanding (i.e.,
granted but unexercised) under the Plan.

                          Option Exercises and Holdings

      Except for Peter D. Kirschner, our former CEO and President, who exercised
all of the 500,000 options granted to him in January 2002, neither our current
Chief Executive Officer nor our four highest paid executive officers who earned
more than $100,000 during the fiscal year ended December 31, 2002, exercised any
options to purchase shares of our common stock during the fiscal year ended
December 31, 2002.

              Long-Term Incentive Plans Awards in Last Fiscal Year

      We did not award any grants under long-term incentive plans during fiscal
year ended December 31, 2002 to our Chief Executive Officer or to our four
highest paid executive officers who earned more than $100,000 during the fiscal
year ended December 31, 2002.

                            Compensation of Directors

      The Company granted to Michael A. Cutler, 200,000 shares of Common Stock
of the Company in consideration for his services as Chairman of the Board for
fiscal years 2001 and 2002. No other compensation was granted to any other
director of the Company.

                              Employment Contracts

      We entered into an employment agreement with Peter D. Kirschner, our
former President and CEO to serve as our President and CEO, dated as of October
23, 2001, for an initial term of three (3) years. The agreement was terminated,
on April 29, 2002, by the Company for cause. Mr. Kirschner's agreement provided
for an annual base salary in the amount of $180,000 and for options for 500,000
shares of Common Stock, exercisable at the per share price of $0.01.

      We also entered into an employment agreement with our newly-elected
President and CEO, Dominick F. Maggio. The agreement, dated March 2, 2000, was
executed when Mr. Maggio served as our Chief Operating Officer and Executive
Vice-President. It had an initial term of two years, and is subject to automatic
renewal in one year increments unless terminated by either party by providing
the other party with notice

<PAGE>

prior to a renewal term. The agreement automatically renewed for one year on
March 2, 2003. The agreement provided for compensation in the amount of $125,000
for the first year of the term. Annual compensation was to be adjusted annually
thereafter by our board of directors. The agreement provides for an annual
incentive bonus during the term in the amount of $50,000 for each $5,000,000 of
profit earned by us in the year, and for a signing bonus in the amount of 4.444%
of our nondiluted common stock then outstanding, as modified on April 19, 2001.
On December 21, 2001, simultaneously with exercising the 1,000,000 options, Mr.
Maggio waived his rights to receive the signing bonus. The agreement contains a
nondisclosure provision and a two year noncompetition agreement. If terminated
by us without cause, the agreement provides for a severance payment to Mr.
Maggio in the amount of one month of base salary for each two months of
employment with us, with a minimum payment of six months of base salary and a
maximum of 12 months of base salary.

Item 11. Security Ownership of Certain Beneficial Owners and Management.

      The following table shows the only shareholders whom we know to be the
"beneficial owners" of more than five percent of the Common Stock as of March
31, 2003:

<TABLE>
<CAPTION>

Name and Address of Beneficial Owner                    Number of Shares
                                                        of Common Stock*          Percent of Class (1)
                                                        -----------------         ---------------------
<S>                                                       <C>                               <C>
BEHEER-EN BELEGGINSMAATSCHAPPIJ SELMOK BV/ GOLDEN
WORLDWIDE BUSINESS CORPORATION
c/o Manuel Mario Perez Rivera
2655 Le Jeune Road, Suite 700
Coral Gables, Florida  33134                              9,532,842(2)                        40.0%

CEDE & Co.
c/o Depository Trust Co.
55 Water Street, 2SL
New York, NY 10041                                        11,364,000                          11.36%

Centro Inmobiliario RYC, S.L.
4 Alfonso Xii - u 4
Madrid 28014
Spain                                                     4,843,750 (3)                       4.84%

Joseph E. Shamy
4938 Wellwynd Way
Boca Raton, FL 33496                                      6,040,000 (4)                       6.04%

Richard Lucibella
5 Beach Way North
Ocean Ridge, Florida 33435                                5,050,000 (5)                       5.05%

Viking Ventures, LLC
719 East Green Lane
Woodstock, GA  30189                                      5,375,000 (6)                       5.38%
</TABLE>

<PAGE>

* Information relating to beneficial ownership of the Common Stock is based upon
"beneficial ownership" concepts set forth in rules of the SEC under Section
13(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act").
Under such rules, a person is deemed to be a "beneficial owner" of a security if
that person has or shares "voting power," which includes the power to vote or
direct the voting of such security, or "investment power," which includes the
power to dispose of or to direct the disposition of such security. A person is
also deemed to be a beneficial owner of any security of which that person has
the right to acquire beneficial ownership within 60 days. Under the rules, more
than one person may be deemed to be a beneficial owner of the same securities,
and a person may be deemed to be a beneficial owner of securities as to which he
has no beneficial interest. For instance, beneficial ownership includes spouses,
minor children and other relatives residing in the same household, and trusts,
partnerships, corporations or deferred compensation plans which are affiliated
with the principal.

      1.    The percentages are based on (i) 100,000,000 shares of Common Stock
            outstanding; and (ii) 7,158,596 shares of Series A Convertible
            Preferred Stock outstanding on May 20, 2003. The holders of shares
            of Series A. Convertible Preferred Stock are entitled 10 votes per
            share on all matters submitted to a vote of the shareholders. Thus,
            there are 171,585,964 total outstanding voting shares of the
            Company.

      2.    Includes 9,532,842 shares of Common Stock and 5,908,597 shares of
            Series A Preferred Stock held by both shareholders as a group. Each
            shareholder holds of record 50% of the total amount of Common Stock
            and Series A Preferred Stock held by group.

      3.    Centro Inmobiliario RYC, S.L., acted as the co-lead investor of a
            group that

<PAGE>

            entered into an agreement with us on February 28, 2002, to purchase
            10,000,000 shares of Common Stock and 20,000,000 of Series A
            Convertible Preferred Stock in eighteen (18) traunches over a period
            of seventeen (17) months. The other members of the group are MAPET
            International Foundation, Inc., FRONTIER STAR, S.L., INVERFAPE,
            S.A., and Jesus Guirau, S.L. We assume that the investors will vote
            together as a group. The number of shares listed includes: (i)
            6,250,000 shares of Common Stock purchased by the group; (ii)
            3,750,000 shares of Common Stock which may be purchased by the group
            at any time; and (iii) 20,000,000 shares of Series A Convertible
            Preferred Stock which may be purchased by the group at any time; the
            holders of shares of Series A Convertible Preferred Stock are
            entitled to 10 votes per share of preferred stock held on all
            matters submitted to a vote of the shareholders. Each share of the
            Series A Convertible Preferred Stock automatically converts into one
            share of Common Stock on April 29, 2005.

      4.    Includes (i) 4,950,000 shares of Common Stock, (ii) 3,500,000 shares
            of Common Stock issuable upon conversion of provisions of various
            notes in the aggregate principal amount of $700,000 held by him;
            (iii) 1,300,000 shares of Common Stock issuable upon the exercise of
            1,300,000 warrants at $.36 per share; (iv) 2,333,333 shares of
            Common Stock issuable upon the exercise of 2,333,333 warrants at
            $.10 per share; and (v) 1,000,000 shares of Series A Convertible
            Preferred Stock; the holders of shares of Series A Convertible
            Preferred Stock are entitled to 10 votes per share of preferred
            stock held on all matters submitted to a vote of the shareholders.
            Each share of Series A Convertible Preferred Stock automatically
            converts into one share of Common Stock on February 15, 2004.

      5. Includes 50,000 shares of Common Stock and the conversion of the
principal and accrued interest of a convertible promissory note issued by the
Company and held by the purchaser in the principal amount of $250,000, dated
October 25, 2000 into 5,000,000 shares of Common Stock.

      6. Represents 3,000,000 shares of Common Stock issued in consideration for
services rendered.

      The following chart shows the number of shares of Common Stock that each
of our executive officers and directors beneficially owns, and the total Common
Stock that such persons own as a group:

<PAGE>

<TABLE>
<CAPTION>

Name of Director/Executive Officer                     Number of Shares
                                                       of Common Stock *         Percent of Class (1)
                                                       ----------------          -----------------
<S>                                                       <C>                           <C>
Dominick F. Maggio, President and CEO, Director           1,255,000 (2)                 1.26%
Michael A. Cutler, Director, Chairman                     1,060,000 (3)                 1.06%
Robert M. Beaton, Director                               11,500,000 (4)                11.5%
Charles Molinari, Director                                5,568,333 (5)                 5.57%
Daniel J. Shamy, Director                                   266,666                     0.27%
Enrique Miranda                                                   0                     0.0%
Mario Perez                                                       0                     0.0%
Mauricio von Luxburg                                              0                     0.0%
All directors and named executive officers as a group
(8 persons)                                              19,649,999                    19.65%

</TABLE>

* Information relating to beneficial ownership of common stock is based upon
"beneficial ownership" concepts set forth in rules of the SEC under Section
13(d) of the Exchange Act. Under such rules, a person is deemed to be a
"beneficial owner" of a security if that person has or shares "voting power,"
which includes the power to vote or direct the voting of such security, or
"investment power," which includes the power to dispose of or to direct the
disposition of such security. A person is also deemed to be a beneficial owner
of any security of which that person has the right to acquire beneficial
ownership within 60 days. Under the rules, more than one person may be deemed to
be a beneficial owner of the same securities, and a person may be deemed to be a
beneficial owner of securities as to which he has no beneficial interest. For
instance, beneficial ownership includes spouses, minor children and other
relatives residing in the same household, and trusts, partnerships, corporations
or deferred compensation plans which are affiliated with the principal.

      1.    The percentages are based on (i) 100,000,000 shares of Common Stock
            outstanding; and (ii) 7,158,596 shares of Series A Convertible
            Preferred Stock outstanding on May 20, 2003. The holders of shares
            of Series A. Convertible Preferred Stock are entitled 10 votes per
            share on all matters submitted to a vote of the shareholders. Thus,
            there are 171,585,964 total outstanding voting shares of the
            Company.

      2.    Includes (i) 700,000 shares of Common Stock owned by Louis J.
            Maggio, Mr.

<PAGE>

            Maggio's son; (ii) 110,000 shares of Common Stock owned by I.
            David Maggio, Mr. Maggio's son; and (iii) 125,000 shares of Common
            Stock owned by Mary T. Maggio, Mr. Maggio's ex-wife.

      3.    Includes (i) 135,000 shares of common Stock held by Data Investment,
            LLC, of which Mr. Cutler is the Manager; and (ii) 180,000 shares of
            Common Stock issuable upon the exercise of 180,000 warrants at $.36
            per share.

      4.    Mr. Beaton is a principal in AB Financial Investments, LLC, holder
            of (i) 4,000,000 shares of Common Stock; and (ii) warrants to
            purchase 7,500,000 shares of Common Stock at $0.10 per share.

      5.    Includes 5,375,000 shares of Common Stock held in the name of Viking
            Ventures, LLC, an entity of which Mr. Molinari is the manager and a
            50% member.

Item 12. Certain Relationships and Related Transactions.

      We have entered into a series of loan arrangements with certain of
directors and shareholders since October 2000. Specifically, we have borrowed:

      o     $250,000 from each of Melvyn B. Siegel, a former director of the
            Company, Richard J. Lucibella, a former director, Joseph E. Shamy, a
            former director, and Harvey Birdman, a shareholder, through the
            issuance of a 12% one-year convertible note to each. Each note is
            convertible into shares of Common Stock at the rate of the lesser of
            $1.00 per share or the per share sales price in any private
            placement taking place before the holder's exercise of the
            conversion privilege;

      o     an additional $50,000 from Melvyn B. Siegel, a former director,
            through the issuance of a one-year 12% convertible note on January
            5, 2001 (the "Siegel 50K Note"). The note is convertible into shares
            of Common Stock at the rate of $1.25 per share (if converted within
            30 days), $.75 per share (if converted within 60 days), $.40 per
            share (if converted within 90 days) and $.20 per share (if converted
            after 90 days).

<PAGE>

      o     $200,000 from Raymond J. Markman, a former director, through the
            issuance of three 12% one-year convertible notes, for $100,000 on
            January 5, 2001, $100,000 on January 19, 2001, and $50,000 on March
            12, 2001. Each note is convertible in on the same terms and
            conditions as the Siegel 50K Note.

      In October and November 2001, we entered into loan modification
arrangements with Messrs. Birdman, Siegel and Markman relating to their
respective loans to us. Messrs. Birdman and Siegel each agreed to extend for one
year the terms of their original $250,000 loans, to October 25, 2002, to forgive
accrued interest from October 25, 2000, to October 25, 2001, and to waive
interest for the period of October 25, 2001 to October 25, 2002, each in
exchange for 925,000 shares of our Common Stock, with Mr. Siegel also agreeing
to extend the maturity of and waive interest payments with respect to the Siegel
50K Note, to January 5, 2003. Under the terms of our arrangement with Mr.
Markman, he has agreed to extend or fix (as the case may be) the maturity dates
of his notes for or at one year from the immediate past or next maturity date
and receive, in lieu of interest accrued during the first year and interest to
be accrued during the second year, 740,000 shares of Common Stock. Under the
arrangements, if any note is not prepaid by us earlier than six months prior to
its new maturity date, the holder may elect, at any time, to convert the
outstanding principal into shares of our Common Stock at $.20 per share. During
December 2001, Messrs. Lucibella and Shamy have each orally agreed to waive any
events of default with respect to such notes pending conclusion of further
discussions with us. As of May 20, 2003, each of these notes remain in default.
In March 2002, Mr. Lucibella converted his $250,000 note into 5,000,000 shares
of the Common Stock.

      We also borrowed:

      o     An additional $650,000 from Joseph E. Shamy, a former director,
            through the issuance of three 12% one-year convertible notes, for
            $50,000 on January 5, 2001, $100,000 on January 19, 2001 and
            $100,000 on January 25, 2001, and three 10% one-year convertible
            notes, for $200,000 on February 15, 2001, $50,000 on March 19, 2001
            and $200,000 on April 11, 2001. Each of the notes, except the note
            issued on February 15, 2001 (the "Preferred Convertible Note"), is
            convertible into shares of our Common Stock on the same terms and
            conditions as the Siegel 50K Note. The Preferred Convertible Note
            was convertible into shares of our Series A. Preferred Stock at the
            rate of $.20 per share. On March 8, 2001, Mr. Shamy converted the
            principal and accrued interest of the Preferred Convertible Note
            into 1,000,000 shares of our Series A Preferred Stock. During
            December

<PAGE>

            2001, Mr. Shamy has orally agreed to waive all events of default
            under the five outstanding notes pending conclusion of further
            discussions with us. Each of these notes remain in default as of May
            20, 2003.

      o     $100,000 from David P. Lonski, a former director, through the
            issuance of one 12% one-year convertible note for $50,000 on January
            25, 2001, and one 10% one-year convertible note for $50,000 on
            February 15, 2001. The January 25, 2001, note is convertible into
            shares of our Common Stock on the same terms and conditions as the
            Siegel 50K Note. The February 15, 2001, note was convertible into
            shares of our Series A Preferred Stock at the rate of $.20 per
            share. On March 8, 2001, Mr. Lonski converted the principal and
            accrued interest of this note into 250,000 shares of our Series A
            Preferred Stock. During December 2001, Mr. Lonski has orally agreed
            to waive all events of default under the one outstanding note
            pending conclusion of further discussions with us. This note remains
            in default as of May 20, 2003

      Also, on October 24, 2000, we entered into an agreement with our now
former chief technical employee, Adam Reiser, whereby we agreed to pay him
$225,000 in annual compensation through December 31, 2002. Additionally, during
the year 2000, Mr. Reiser received an advance from us of approximately $194,200,
agreeing to place 50,000 shares of our Common Stock that he owned in escrow as
collateral for the advance. Mr. Reiser reduced the amount owed to us under the
advance by approximately $64,600 in payments through February 2, 2001. On such
date he turned over to us the 50,000 shares of Common Stock in full satisfaction
of the advance, including accrued interest, and waived all rights to receive any
additional payments from us.

      On April 25, 2002, we entered into an agreement with Manuel Mario Perez
Rivera, pursuant to which the Company borrowed $100,000 from him. Pursuant to
their agreement, the loan does not bear any interest and the obligation matures
on the date that BEHEER-EN BELEGGINSMAATSCHAPPIJ SELMOK BV/ GOLDEN WORLDWIDE
BUSINESS CORPORATION tenders to the Company $4.9 million in connection with its
obligations to the Company. See description of obligations in Management's
Discussions and Analysis of Financial Condition and Results of Operations -
Liquidity and Capital Resources.

<PAGE>

      On January 24, 2003, the Company repaid an aggregate amount of $522,000
representing advances made to the Company by each of Inverfape, S. A. ($222,000)
and MAPET International Foundation, Inc. ($300,000) in December 2002.

Item 13. Exhibits, Lists and Reports on Form 8-K.

Exhibit
Number                                 Description

2(i)            Agreement and Plan of Merger, by and among the Registrant,
                SunVest Resorts, Inc., and the other parties identified therein,
                effective March 15, 2000 (incorporated by reference to exhibit
                10.5 of the Registrant's Form 10-KSB (File No. 0-28251) filed
                with the Securities and Exchange Commission on April 12, 2000).

2(ii)           Pre-Acquisition Agreement, dated as of January 31, 2003, by and
                between the Registrant and Zona Tecnologica y
                Telecomunicaciones, S.A. (incorporated by reference to exhibit
                99.1 of the Registrant's Form 8-K (File No. 0-28251) filed with
                the Securities and Exchange Commission on February 7, 2003).

3(i)(a)         Amended and Restated Articles of Incorporation of the Registrant
                (incorporated by reference to exhibit 3(i) of the Registrant's
                Form 10-QSB (File No. 0-28251) filed with the Securities and
                Exchange Commission on November 19, 2002).

3(i)(b)         Articles of Amendment to the Articles of Incorporation
                (incorporated by reference to exhibit 3(i) of the Registrant's
                Form 8-K (File No. 0-28251) filed with the Securities and
                Exchange Commission on March 6, 2001).

3(i)(c)         Articles of Amendment to the Articles of Incorporation
                (incorporated by reference to exhibit 3(iii) of the Registrant's
                Form 10-QSB (File No. 0-28251) filed with the Securities and
                Exchange Commission on November 19, 2002).

3(ii)           Amended and Restated Bylaws of the Company (incorporated by
                reference to exhibit 2.2 of the Registrant's Registration
                Statement on Form 10-SB, filed with the Securities and Exchange
                Commission on November 21, 1999, which became effective on
                January 21, 2000).

4(i)(a)(1)      Securities Purchase Agreement, dated April 5, 2001, by and among
                Registrant and La Jolla Cove Investors, Inc. (incorporated by
                reference to exhibit 4(i)(a)(1) of the Registrant's Form 10-KSB
                (File No. 0-28251) filed with the Securities and Exchange
                Commission on May 15, 2002).

4(i)(a)(2)      9 3/4% Convertible Debenture, dated April 5, 2001, issued to La
                Jolla Cove Investors, Inc. (incorporated by reference to exhibit
                4(i)(a)(2) of the Registrant's Form 10-KSB (File No. 0-28251)
                filed with the Securities and Exchange Commission on May 15,
                2002).

4(i)(a)(3)      Conversion Warrants, dated April 5, 2001, issued to La Jolla
                Cove Investors, Inc. (incorporated by reference to exhibit
                4(i)(a)(3) of the Registrant's Form 10-KSB (File No. 0-28251)
                filed with the Securities and Exchange Commission on May 15,
                2002).

<PAGE>

4(i)(a)(4)      Warrant to Purchase Common Stock, dated February 6, 2001, issued
                to La Jolla Cove Investors, Inc. (incorporated by reference to
                exhibit 4(i)(a)(4) of the Registrant's Form 10-KSB (File No.
                0-28251) filed with the Securities and Exchange Commission on
                May 15, 2002)

4(i)(a)(5)      Addendum to Warrant to Purchase Common Stock, dated January 25,
                2000, by and among Registrant and issued to La Jolla Cove
                Investors, Inc. (incorporated by reference to exhibit 4(i)(a)(5)
                of the Registrant's Form 10-KSB (File No. 0-28251) filed with
                the Securities and Exchange Commission on May 15, 2002)

4(i)(a)(6)      Registration Rights Agreement, dated April 5, 2001, by and among
                Registrant and La Jolla Cove Investors, Inc. (incorporated by
                reference to exhibit 4(i)(a)(6) of the Registrant's Form 10-KSB
                (File No. 0-28251) filed with the Securities and Exchange
                Commission on May 15, 2002)

4(i)(a)(7)      Letter Agreement dated March 20, 2002, executed by Registrant
                (incorporated by reference to exhibit 4(i)(a)(7) of the
                Registrant's Form 10-KSB (File No. 0-28251) filed with the
                Securities and Exchange Commission on May 15, 2002).

4(i)(b)(1)      Securities Purchase Agreement, dated May 23, 2001, by and among
                Registrant and AB Financial Services, LLC (incorporated by
                reference to exhibit 99.1 of the Form 13D (File No. 5-58775)
                filed with the Securities and Exchange Commission on June 5,
                2001).

4(i)(b)(2)      Securities Purchase Agreement, dated May 23, 2001, by and among
                AB Financial Services, LLC and Joseph and Greta Shamy
                (incorporated by reference to exhibit 99.2 of the Form 13D (File
                No. 5-58775) filed with the Securities and Exchange Commission
                on June 5, 2001

4(i)(b)(3)      Voting Trust Agreement, dated May 23, 2001, by and among
                Registrant and AB Financial Services, LLC (incorporated by
                reference to exhibit 99.2 of the Form 13D (File No. 5-58775)
                filed with the Securities and Exchange Commission on June 5,
                2001).

4(i)(b)(4)      Agreement effective February 19, 2002, by and among, Registrant
                and AB Financial Services, LLC, and Robert Beaton (incorporated
                by reference to exhibit 4(i)(B)(4) of the Registrant's Form
                10-KSB (File No. 0-28251) filed with the Securities and Exchange
                Commission on May 15, 2002)

4(i)(c)(1)      Stock Purchase Agreement, dated March 19, 2001, by and among
                Registrant and IDT Fund, Ltd. (incorporated by reference to
                exhibit 4(i)(c)(1) of the Registrant's Form 10-KSB (File No.
                0-28251) filed with the Securities and Exchange Commission on
                May 15, 2002).

<PAGE>

4(i)(c)(2)      Investor Questionnaire and Subscription Agreement, dated March
                19, 2001, by and among Registrant and IDT Fund, Ltd. and IDT
                Fund 13 (incorporated by reference to exhibit 4(i)(c)(2) of the
                Registrant's Form 10-KSB (File No. 0-28251) filed with the
                Securities and Exchange Commission on May 15, 2002).

4(i)(c)(3)      Release Agreement, dated December 14, 2001, by and among
                Registrant and IDT Group, Inc. (incorporated by reference to
                exhibit 4(i)(c)(3) of the Registrant's Form 10-KSB (File No.
                0-28251) filed with the Securities and Exchange Commission on
                May 15, 2002).

4(i)(d)         Securities Purchase Agreement, dated July 10, 2001, by and among
                AB Financial Services, LLC and WealthHarbor Capital Group, LLC
                (incorporated by reference to exhibit 4(i)(d) of the
                Registrant's Form 10-KSB (File No. 0-28251) filed with the
                Securities and Exchange Commission on May 15, 2002).

4(i)(e)         Investor Questionnaire and Subscription Agreement, dated July 3,
                2001, by and among Registrant and Dr. Malcolm R. Currie
                (incorporated by reference to exhibit 4(i)(e) of the
                Registrant's Form 10-KSB (File No. 0-28251) filed with the
                Securities and Exchange Commission on May 15, 2002).

4(i)(f)         Investor Questionnaire and Subscription Agreement, dated
                February 28, 2002, by and among Registrant and the Investors
                (incorporated by reference to exhibit 1 of the Registrant's Form
                8-K (File No. 0-28251) filed with the Securities and Exchange
                Commission on May 13, 2002).

4(i)(g)         Addendum No. 1 to Investor Questionnaire and Subscription
                Agreement, dated April 17, 2002, by and among Registrant and the
                Investors (incorporated by reference to exhibit 2 of the
                Registrant's Form 8-K (File No. 0-28251) filed with the
                Securities and Exchange Commission on May 13, 2002).

4(i)(h)         Engagement Agreement dated March 7, 2002, by and between
                Registrant and US DATA International Development, Inc.
                (incorporated by reference to exhibit 3 of the Registrant's Form
                8-K (File No. 0-28251) filed with the Securities and Exchange
                Commission on May 13, 2002).

10(i)(A)(1)     Promissory Note, dated October 25, 2001, issued to Melvyn B.
                Siegel (incorporated by reference to exhibit 10(i)(A)(1) of the
                Registrant's Form 10-KSB (File No. 0-28251) filed with the
                Securities and Exchange Commission on May 15, 2002).

10(i)(A)(2)     Promissory Note, dated October 25, 2001, issued to Richard
                Lucibella Promissory Note (incorporated by reference to exhibit
                10(i)(A)(2) of the Registrant's Form 10-KSB (File No. 0-28251)
                filed with the Securities and Exchange Commission on May 15,
                2002).

<PAGE>

10(i)(A)(3)     Promissory Note, dated October 25, 2001, issued to Joseph E.
                Shamy (incorporated by reference to exhibit 10(i)(A)(3) of the
                Registrant's Form 10-KSB (File No. 0-28251) filed with the
                Securities and Exchange Commission on May 15, 2002).

10(i)(A)(4)     Promissory Note, dated October 25, 2001, issued to Harvey
                Birdman (incorporated by reference to exhibit 10(i)(A)(4) of the
                Registrant's Form 10-KSB (File No. 0-28251) filed with the
                Securities and Exchange Commission on May 15, 2002).

10(i)(A)(5)     Promissory Note, dated January 5, 2001, issued to Melvyn B.
                Siegel (incorporated by reference to exhibit 10(i)(A)(5) of the
                Registrant's Form 10-KSB (File No. 0-28251) filed with the
                Securities and Exchange Commission on May 15, 2002).

10(i)(A)(6)     Note Conversion Resolution, dated November 15, 2001, by Melvyn
                B. Siegel (incorporated by reference to exhibit 10(i)(A)(6) of
                the Registrant's Form 10-KSB (File No. 0-28251) filed with the
                Securities and Exchange Commission on May 15, 2002).

10(i)(A)(7)     Note Conversion Resolution, dated November 15, 2001, by Harvey
                Birdman (incorporated by reference to exhibit 10(i)(A)(7) of the
                Registrant's Form 10-KSB (File No. 0-28251) filed with the
                Securities and Exchange Commission on May 15, 2002).

10(i)(A)(8)     Promissory Note, dated January 5, 2001, issued to Raymond J.
                Markman (incorporated by reference to exhibit 10(i)(A)(8) of the
                Registrant's Form 10-KSB (File No. 0-28251) filed with the
                Securities and Exchange Commission on May 15, 2002).

10(i)(A)(9)     Promissory Note, dated January 19, 2001, issued to Raymond J.
                Markman (incorporated by reference to exhibit 10(i)(A)(9) of the
                Registrant's Form 10-KSB (File No. 0-28251) filed with the
                Securities and Exchange Commission on May 15, 2002).

10(i)(A)(10)    Promissory Note, dated March 22, 2001, issued to Raymond J.
                Markman (incorporated by reference to exhibit 10(i)(A)(10) of
                the Registrant's Form 10-KSB (File No. 0-28251) filed with the
                Securities and Exchange Commission on May 15, 2002).

10(i)(A)(11)    Note Conversion Resolution, dated November 15, 2001, by Raymond
                Markman (incorporated by reference to exhibit 10(i)(A)(11) of
                the Registrant's Form 10-KSB (File No. 0-28251) filed with the
                Securities and Exchange Commission on May 15, 2002).

<PAGE>

10(i)(A)(12)    Promissory Note, dated January 5, 2001, issued to Joseph E.
                Shamy (incorporated by reference to exhibit 10(i)(A)(12) of the
                Registrant's Form 10-KSB (File No. 0-28251) filed with the
                Securities and Exchange Commission on May 15, 2002).

10(i)(A)(13)    Promissory Note, dated January 19, 2001, issued to Joseph E.
                Shamy (incorporated by reference to exhibit 10(i)(A)(13) of the
                Registrant's Form 10-KSB (File No. 0-28251) filed with the
                Securities and Exchange Commission on May 15, 2002).

10(i)(A)(14)    Promissory Note, dated January 25, 2001, issued to Joseph E.
                Shamy (incorporated by reference to exhibit 10(i)(A)(14) of the
                Registrant's Form 10-KSB (File No. 0-28251) filed with the
                Securities and Exchange Commission on May 15, 2002).

10(i)(A)(15)    Promissory Note, dated February 15, 2001, issued to Joseph E.
                Shamy (incorporated by reference to exhibit 10(i)(A)(2) of the
                Registrant's Form 10-KSB (File No. 0-28251) filed with the
                Securities and Exchange Commission on May 15, 2002).

10(i)(A)(16)    Promissory Note, dated March 19, 2001, issued to Joseph E. Shamy
                (incorporated by reference to exhibit 10(i)(A)(15) of the
                Registrant's Form 10-KSB (File No. 0-28251) filed with the
                Securities and Exchange Commission on May 15, 2002).

10(i)(A)(17)    Promissory Note, dated February 15, 2001, issued to David Lonski
                (incorporated by reference to exhibit 10(i)(A)(16) of the
                Registrant's Form 10-KSB (File No. 0-28251) filed with the
                Securities and Exchange Commission on May 15, 2002).

10(i)(B)(1)     Contract Service Arrangement, dated October 3, 2000, by and
                between Registrant and BellSouth Telecommunications, Inc.
                ("BellSouth"), as amended by that certain Addendum Agreement
                dated June 5, 2001, by and between Registrant and BellSouth
                (incorporated by reference to exhibit 10(i)(B)(1) of the
                Registrant's Form 10-KSB (File No. 0-28251) filed with the
                Securities and Exchange Commission on May 15, 2002).

10(i)(B)(2)     Cable & Wireless USA ixDirect Connect Agreement, dated July 19,
                1999, by and between Registrant and Cable & Wireless USA, Inc.
                ("Cable & Wireless"), as amended by that certain Addendum to
                Customer Agreement for Wholesale and Virtual ISP Integrated
                Solutions Dial-Up Internet Access Services, dated February 25,
                2000, by and between Registrant and Cable & Wireless.

23.1            Consent of Hixon, Marin, Powell & DeSanctis, P.A.

<PAGE>

Reports on Form 8-K filed by the Registrant during and since the last quarter of
2002.

      On February 7, 2003, the Registrant filed a current report on Form 8-K
relating to an Item 5, Other Events, regarding the execution of a
Pre-Acquisition Agreement, dated January 31, 2003, with Zona Tecnologica y
Telecomunicaciones, S.A. (the "Pre-Acquisition Agreement.

      On February 19, 2003, the Registrant filed a current report on Form 8-K
relating to Item 5, Other Events, regarding an announcement by the Registrant of
the execution of the Pre-Acquisition Agreement.

      On March 6, 2003, the Registrant filed a current Report on Form 8-K
relating to Item 5, Other Events, regarding an announcement by the Registrant of
the approval of the Pre-Acquisition Agreement by the Registrant's board of
directors.

Item 14. Controls and Procedures.

      US Data is a company still in the development stage. US Data has
experienced continued net losses and, in an attempt to reduce its overhead, has
reduced its workforce to 4 salaried employees that are all situated at one site.
Additionally, US Data has no subsidiaries from which to compile information. US
Data evaluated the design and operation of its disclosure controls and
procedures (as defined under Rules 13a-14(c) and 15d-14(c) of the Exchange Act)
to determine whether they are effective in ensuring that the disclosure of
required information is timely made in accordance with the Exchange Act and the
rules and forms of the Securities and Exchange Commission. This evaluation was
made under the supervision and with the participation of management, including
US Data's principal executive officer and principal financial officer within the
90-day period prior to the filing of this Annual Report on Form 10-KSB. The
principal executive officer and principal financial officer have concluded,
based on their review, that US Data's disclosure controls and procedures (as
defined under Rules 13a-14(c) and 15d-14(c) of the Exchange Act) are effective
to ensure that information required to be disclosed by US Data in reports that
it files under the Exchange Act is recorded, processed, summarized and reported
within the time periods specified in the Securites and Exchange Commission rules
and forms. No significant changes were made to US Data's internal controls or
other factors that could signiciantly affect these controls subsequent to the
date of their most recent evaluation.

<PAGE>

                                   SIGNATURES

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

US DATA AUTHORITY, INC.

BY: /S/ DOMINICK F. MAGGIO
    -----------------------
Dominick F. Maggio, Director, Chief Executive Officer and
President

Date: May 20, 2003

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the Registrant and
in the capacities and on the dates indicated:


Signature                                     Title                    Date

/S/ MICHAEL A. CUTLER                  Director & Chairman         May 20, 2003
------------------------
Michael A. Cutler


/S/ DOMINICK F. MAGGIO               Chief Executive Officer,
------------------------              President & Director         May 20, 2003
Dominick F. Maggio

/S/ ROBERT M. BEATON                        Director               May 20, 2003
------------------------
Robert M. Beaton

/S/ ENRIQUE MIRANDA                         Director               May 20, 2003
------------------------
Enrique Miranda

/S/ CHARLES J. MOLINARI                     Director               May 20, 2003
------------------------
Charles J. Molinari

/S/ MARIO PEREZ                             Director               May 20, 2003
------------------------
Mario Perez

/S/  DANIEL J. SHAMY                        Director               May 20, 2003
------------------------
Daniel J. Shamy

/S/ MAURICIO VON LUXBURG
------------------------
Mauricio von Luxburg                        Director               May 20, 2003

<PAGE>

                                  CERTIFICATION

I, Dominick F. Maggio, certify that:

1. I have reviewed this annual report on Form 10-KSB of US Data Authority, Inc;

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

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

4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

(a) Designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made know to us by others within those entities, particularly during the
period in which this annual report is being prepared;

(b) Evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this annual
report (the "Evaluation Date"); and

(c) Presented in this annual report our conclusions about the effectiveness of
the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;

5. The registrant's other certifying officers and I have disclosed based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent
functions):

(a) All significant deficiencies in the design or operation of internal controls
which could adversely affect the registrant's ability to record, process,
summarize and report financial data and have identified for the registrant's
auditors any material weaknesses in internal controls; and

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

<PAGE>

6. The registrant's other certifying officers and I have indicated in this
annual report whether or not there were significant changes in internal controls
and in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.


Date: May 20, 2003                  /s/ Dominick F. Maggio
                                        --------------------------------
                                        Dominick F. Maggio
                                        President and Chief Executive Officer

<PAGE>

                                  CERTIFICATION

I, Robert Sepos, certify that:

1. I have reviewed this annual report on Form 10-KSB of US Data Authority, Inc;

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

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

4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

(a) Designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made know to us by others within those entities, particularly during the
period in which this annual report is being prepared;

(b) Evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this annual
report (the "Evaluation Date"); and

(c) Presented in this annual report our conclusions about the effectiveness of
the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;

5. The registrant's other certifying officers and I have disclosed based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent
functions):

(a) All significant deficiencies in the design or operation of internal controls
which could adversely affect the registrant's ability to record, process,
summarize and report financial data and have identified for the registrant's
auditors any material weaknesses in internal controls; and

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

<PAGE>


6. The registrant's other certifying officers and I have indicated in this
annual report whether or not there were significant changes in internal controls
and in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.


Date: May 20, 2003                  /s/ Robert Sepos
                                        --------------------------------
                                        Robert Sepos
                                        Controller