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**UNITED STATESSECURITIES AND EXCHANGE COMMISSION** Washington, D.C. 20549

FORM 10-QSB

**x******QUARTERLY
  REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 
  For the quarterly period ended: September 30, 2003

** ̈******TRANSITION
  REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT 
  For the transition period from _________________ to _________________

Commission file number: 000-27259

REWARD ENTERPRISES, INC. 
  (Exact name of small business issuer as specified in its charter)

|Nevada                                                         | 98-0203927                       
|-------------------------------------------------------------- | ---------------------------------
|(State or other jurisdiction of incorporation or organization) | (IRS Employer Identification No.)

1327 Ocean Avenue, Suite M, Santa Monica, California
  90401 
  (Address of principal executive offices)

(310) 395-5374 
  (Issuer's telephone number)

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

APPLICABLE ONLY TO CORPORATE ISSUERS

State the number of shares outstanding of each of the issuer's
  classes of common equity, as of the latest practicable date:

18,722,000 common shares issued and outstanding as of December
  15, 2003

Transitional Small Business Disclosure Format (Check one):
  Yes ** ̈******No
  **x******

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PART I  FINANCIAL INFORMATION









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REWARD ENTERPRISES, INC.
  (A Development Stage Company) 
  CONSOLIDATED BALANCE SHEETS

|                                                        |   | September 30, |   |   |            |  
|------------------------------------------------------- | - | ------------- | - | - | ---------- | -
|                                                        |   | 2003          |   |   | June 30,   |  
|                                                        |   | (Unaudited)   |   |   | 2003       |  
|ASSETS                                                  |   |               |   |   |            |  
|CURRENT ASSETS                                          |   |               |   |   |            |  
|Cash
      and cash equivalents                         | $ | -             |   | $ | 12,835     |  
|TOTAL
      CURRENT ASSETS                              |   | -             |   |   | 12,835     |  
|                                                        |   |               |   |   |            |  
|PROPERTY AND EQUIPMENT                                  |   |               |   |   |            |  
|Telecommunications
      Equipment                      |   | 51,600        |   |   | 51,600     |  
|Website                                                 |   | 145,979       |   |   | 145,979    |  
|Accumulated
      depreciation and amortization         |   | (55,959       | ) |   | (48,660    | )
|TOTAL
      PROPERTY AND EQUIPMENT                      |   | 141,620       |   |   | 148,919    |  
|                                                        |   |               |   |   |            |  
|OTHER ASSETS                                            |   |               |   |   |            |  
|Goodwill                                                |   | -             |   |   | -          |  
|                                                        |   |               |   |   |            |  
|TOTAL
      ASSETS                                      | $ | 141,620       |   | $ | 161,754    |  
|                                                        |   |               |   |   |            |  
|LIABILITIES & STOCKHOLDERS' EQUITY (DEFICIT)            |   |               |   |   |            |  
|CURRENT LIABILITIES                                     |   |               |   |   |            |  
|Accounts
      payable                                  | $ | 77,448        |   | $ | 35,717     |  
|Accounts
      payable - related party                  |   | 15,000        |   |   | -          |  
|Interest
      payable                                  |   | 11,338        |   |   | 8,313      |  
|Notes
      payable, net of discount                    |   | 70,000        |   |   | 70,000     |  
|Deferred
      income from Joint Venture                |   | 175,000       |   |   | 175,000    |  
|TOTAL
      CURRENT LIABILITIES                         |   | 348,786       |   |   | 289,030    |  
|                                                        |   |               |   |   |            |  
|COMMITMENTS AND CONTINGENCIES                           |   | -             |   |   | -          |  
|                                                        |   |               |   |   |            |  
|STOCKHOLDERS' EQUITY (DEFICIT)                          |   |               |   |   |            |  
|Common
      stock, 200,000,000 shares authorized,      |   |               |   |   |            |  
|$0.001
      par value;18,722,000 and 18,722,000 shares |   |               |   |   |            |  
|issued
      and outstanding, respectively              |   | 18,722        |   |   | 18,722     |  
|Additional
      paid-in capital                        |   | 2,941,593     |   |   | 2,941,593  |  
|Stock
      options                                     |   | 10,400        |   |   | 10,400     |  
|Accumulated
      deficit during development stage      |   | (3,177,881    | ) |   | (3,097,991 | )
|TOTAL
      STOCKHOLDERS' EQUITY (DEFICIT)              |   | (207,166      | ) |   | (127,276   | )
|                                                        |   |               |   |   |            |  
|TOTAL
      LIABILITIES AND                             |   |               |   |   |            |  
|STOCKHOLDERS'
      EQUITY (DEFICIT)                    | $ | 141,620       |   | $ | 161,754    |  

The accompanying notes are an integral part of these financial statements.

2

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REWARD ENTERPRISES, INC.
  (A Development Stage Company)CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

|                                |   |               |   |   |               |   |   | December 12,  |  
|------------------------------- | - | ------------- | - | - | ------------- | - | - | ------------- | -
|                                |   |               |   |   |               |   |   | 1997          |  
|                                |   | Three Months  |   |   | Three Months  |   |   | (Inception)   |  
|                                |   | Ended         |   |   | Ended         |   |   | Through       |  
|                                |   | September 30, |   |   | September 30, |   |   | September 30, |  
|                                |   | 2003          |   |   | 2002          |   |   | 2003          |  
|                                |   | (Unaudited)   |   |   | (Unaudited)   |   |   | (Unaudited)   |  
|                                |   |               |   |   |               |   |   |               |  
|R E V E N U E S                 | $ | -             |   | $ | -             |   | $ | -             |  
|                                |   |               |   |   |               |   |   |               |  
|E X P E N S E S                 |   |               |   |   |               |   |   |               |  
|Consulting fees                 |   | 56,250        |   |   | 21,000        |   |   | 487,888       |  
|General and administrative      |   | 12,734        |   |   | 19,435        |   |   | 163,057       |  
|Legal and professional fees     |   | -             |   |   | 6,500         |   |   | 174,211       |  
|Travel and entertainment        |   | 582           |   |   | 8,201         |   |   | 49,467        |  
|Depreciation and amortization   |   | 7,299         |   |   | 7,299         |   |   | 59,725        |  
|Research and development        |   | -             |   |   | 1,750         |   |   | 88,035        |  
|Loss on impairment of asset     |   | -             |   |   | -             |   |   | 2,165,160     |  
|TOTAL
      OPERATING EXPENSES  |   | 76,865        |   |   | 64,185        |   |   | 3,187,543     |  
|                                |   |               |   |   |               |   |   |               |  
|OTHER INCOME AND EXPENSE        |   |               |   |   |               |   |   |               |  
|Interest expense                |   | 3,025         |   |   | 3,512         |   |   | 15,338        |  
|Gain from debt forgiveness      |   | -             |   |   | -             |   |   | (25,000       | )
|TOTAL
      OTHER EXPENSE       |   | 3,025         |   |   | 3,512         |   |   | (9,662        | )
|                                |   |               |   |   |               |   |   |               |  
|LOSS BEFORE INCOME TAXES        |   | (79,890       | ) |   | (67,697       | ) |   | (3,177,881    | )
|                                |   |               |   |   |               |   |   |               |  
|PROVISION FOR TAXES             |   | -             |   |   | -             |   |   | -             |  
|                                |   |               |   |   |               |   |   |               |  
|NET LOSS                        |   | (79,890       | ) |   | (67,697       | ) |   | (3,177,881    | )
|                                |   |               |   |   |               |   |   |               |  
|BASIC AND DILUTED               |   |               |   |   |               |   |   |               |  
|NET LOSS PER COMMON SHARE       | $ | (0.00         | ) |   | (0.00         | ) |   |               |  
|                                |   |               |   |   |               |   |   |               |  
|WEIGHTED AVERAGE NUMBER OF      |   |               |   |   |               |   |   |               |  
|COMMON STOCK SHARES OUTSTANDING |   | 18,722,000    |   |   | 17,927,000    |   |   |               |  

The accompanying notes are an integral part of these financial statements.

3

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REWARD ENTERPRISES, INC.
  (A Development Stage Company)CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY

|                                                     |              |   |   |         |   |   |            |  |   |               |   |   | Stock          |   |   | Accumulated |   |   | Accumulated   |   |   |               |  
|---------------------------------------------------- | ------------ | - | - | ------- | - | - | ---------- |  | - | ------------- | - | - | -------------- | - | - | ----------- | - | - | ------------- | - | - | ------------- | -
|                                                     | Common Stock |   |   |         |   |   |            |  |   | Options       |   |   | Deficit During |   |   | Other       |   |   | Total         |  
|                                                     | Number       |   |   |         |   |   | Additional |  |   | Subscriptions |   |   | and            |   |   | Development |   |   | Comprehesive  |   |   | Stockholders' |  
|                                                     | of Shares    |   |   | Amount  |   |   | Paid-in    |  |   | Receivable    |   |   | Warrants       |   |   | Stage       |   |   | Income (Loss) |   |   | Equity        |  
|Issuance of common stock in April 1998               |              |   |   |         |   |   |            |  |   |               |   |   |                |   |   |             |   |   |               |   |   |               |  
|for services valued at $0.01 per share               | 1,000,000    |   | $ | 1,000   |   | $ | 9,000      |  | $ | (10,000       | ) | $ | -              |   | $ | -           |   | $ | -             |   | $ | -             |  
|Net loss for period ending June 30, 1998             | -            |   |   | -       |   |   | -          |  |   | -             |   |   | -              |   |   | (10,000     | ) |   | -             |   |   | (10,000       | )
|Balance, June 30, 1998                               | 1,000,000    |   |   | 1,000   |   |   | 9,000      |  |   | (10,000       | ) |   | -              |   |   | (10,000     | ) |   | -             |   |   | (10,000       | )
|Issuance of common stock in May 1999                 |              |   |   |         |   |   |            |  |   |               |   |   |                |   |   |             |   |   |               |   |   |               |  
|for cash at an average of $0.10 per
      share      | 1,715,000    |   |   | 1,715   |   |   | 169,785    |  |   | -             |   |   | -              |   |   | -           |   |   | -             |   |   | 171,500       |  
|Foreign currency translation loss                    | -            |   |   | -       |   |   | -          |  |   | -             |   |   | -              |   |   | -           |   |   | (215          | ) |   | (215          | )
|Net loss for year ending June 30, 1999               | -            |   |   | -       |   |   | -          |  |   | -             |   |   |                |   |   | (62,506     | ) |   | -             |   |   | (62,506       | )
|Balance, June 30, 1999                               | 2,715,000    |   |   | 2,715   |   |   | 178,785    |  |   | (10,000       | ) |   | -              |   |   | (72,506     | ) |   | (215          | ) |   | 98,779        |  
|Payables provided for stock subscription             | -            |   |   | -       |   |   | -          |  |   | 10,000        |   |   | -              |   |   | -           |   |   | -             |   |   | 10,000        |  
|Net loss for year ending June 30, 2000               | -            |   |   | -       |   |   | -          |  |   | -             |   |   | -              |   |   | (228,659    | ) |   | -             |   |   | (228,659      | )
|Foreign currency translation gain                    | -            |   |   | -       |   |   | -          |  |   | -             |   |   | -              |   |   | -           |   |   | 29            |   |   | 29            |  
|Balance, June 30, 2000                               | 2,715,000    |   |   | 2,715   |   |   | 178,785    |  |   | -             |   |   | -              |   |   | (301,165    | ) |   | (186          | ) |   | (119,851      | )
|Issuance of common stock in October 2000             |              |   |   |         |   |   |            |  |   |               |   |   |                |   |   |             |   |   |               |   |   |               |  
|for cash at $0.001 per share                         | 10,000,000   |   |   | 10,000  |   |   | -          |  |   | -             |   |   | -              |   |   | -           |   |   | -             |   |   | 10,000        |  
|Issuance of common stock in October 2000             |              |   |   |         |   |   |            |  |   |               |   |   |                |   |   |             |   |   |               |   |   |               |  
|for payment on loans payable at                      |              |   |   |         |   |   |            |  |   |               |   |   |                |   |   |             |   |   |               |   |   |               |  
|$0.001 per share                                     | 200,000      |   |   | 200     |   |   | -          |  |   | -             |   |   | -              |   |   | -           |   |   | -             |   |   | 200           |  
|Stock options exercised at an average of $0.10       |              |   |   |         |   |   |            |  |   |               |   |   |                |   |   |             |   |   |               |   |   |               |  
|per share in exchange for consulting
      fees      | 2,230,000    |   |   | 2,230   |   |   | 222,770    |  |   | -             |   |   | -              |   |   | -           |   |   | -             |   |   | 225,000       |  
|Stock options exercised at an average of $0.14       |              |   |   |         |   |   |            |  |   |               |   |   |                |   |   |             |   |   |               |   |   |               |  
|per share in exchange for cash                       | 1,325,000    |   |   | 1,325   |   |   | 179,925    |  |   | -             |   |   | -              |   |   | -           |   |   | -             |   |   | 181,250       |  
|Foreign currency translation loss                    | -            |   |   | -       |   |   | -          |  |   | -             |   |   | -              |   |   | -           |   |   | (60           | ) |   | (60           | )
|Net loss for the year ended June 30, 2001            | -            |   |   | -       |   |   | -          |  |   | -             |   |   | -              |   |   | (151,401    | ) |   | -             |   |   | (151,401      | )
|Balance, June 30, 2001                               | 16,470,000   |   |   | 16,470  |   |   | 581,480    |  |   | -             |   |   | -              |   |   | (452,566    | ) |   | (246          | ) |   | 145,138       |  
|Common stock issued in merger with                   |              |   |   |         |   |   |            |  |   |               |   |   |                |   |   |             |   |   |               |   |   |               |  
|Q-Presents, Inc. at $0.35 per share                  | 6,000,000    |   |   | 6,000   |   |   | 2,094,000  |  |   | -             |   |   | -              |   |   | -           |   |   | -             |   |   | 2,100,000     |  
|Common stock cancelled as part of                    |              |   |   |         |   |   |            |  |   |               |   |   |                |   |   |             |   |   |               |   |   |               |  
|merger with Q-Presents, Inc.                         | (10,200,000  | ) |   | (10,200 | ) |   | 10,200     |  |   | -             |   |   | -              |   |   | -           |   |   | -             |   |   | -             |  
|Stock options exercised at an average of $0.175      |              |   |   |         |   |   |            |  |   |               |   |   |                |   |   |             |   |   |               |   |   |               |  
|per share in exchange for cash                       | 572,000      |   |   | 572     |   |   | 112,428    |  |   | -             |   |   | -              |   |   | -           |   |   | -             |   |   | 113,000       |  
|Issuance of common stock in December 2001            |              |   |   |         |   |   |            |  |   |               |   |   |                |   |   |             |   |   |               |   |   |               |  
|for cash at $0.001 per share                         | 890,000      |   |   | 890     |   |   | -          |  |   | -             |   |   | -              |   |   | -           |   |   | -             |   |   | 890           |  
|Issuance of common stock in exchange                 |              |   |   |         |   |   |            |  |   |               |   |   |                |   |   |             |   |   |               |   |   |               |  
|for services at $0.005 per share                     | 2,945,000    |   |   | 2,945   |   |   | 11,780     |  |   | -             |   |   | -              |   |   | -           |   |   | -             |   |   | 14,725        |  
|Stock options issued for compensation                |              |   |   |         |   |   |            |  |   |               |   |   |                |   |   |             |   |   |               |   |   |               |  
|in December 2001                                     | -            |   |   | -       |   |   | -          |  |   | -             |   |   | 10,400         |   |   | -           |   |   | -             |   |   | 10,400        |  
|Issuance of common stock in January and March        |              |   |   |         |   |   |            |  |   |               |   |   |                |   |   |             |   |   |               |   |   |               |  
|2002 for cash at an average of $0.15
      per share | 660,000      |   |   | 660     |   |   | 30,840     |  |   | -             |   |   | -              |   |   | -           |   |   | -             |   |   | 31,500        |  
|Issuance of stock warrants attached to               |              |   |   |         |   |   |            |  |   |               |   |   |                |   |   |             |   |   |               |   |   |               |  
|promissory notes in May 2002                         | -            |   |   | -       |   |   | -          |  |   | -             |   |   | 4,000          |   |   | -           |   |   | -             |   |   | 4,000         |  
|Issuance of common stock in May and June             |              |   |   |         |   |   |            |  |   |               |   |   |                |   |   |             |   |   |               |   |   |               |  
|2002 for cash at an average of $0.12
      per share | 366,667      |   |   | 367     |   |   | 52,133     |  |   | -             |   |   | -              |   |   | -           |   |   | -             |   |   | 52,500        |  
|Foreign currency translation gain                    | -            |   |   | -       |   |   | -          |  |   | -             |   |   | -              |   |   | -           |   |   | 246           |   |   | 246           |  
|Net loss for the year ended June 30, 2002            | -            |   |   | -       |   |   | -          |  |   | -             |   |   | -              |   |   | (238,921    | ) |   | -             |   |   | (238,921      | )
|Balance, June 30, 2002                               | 17,703,667   |   |   | 17,704  |   |   | 2,892,861  |  |   | -             |   |   | 14,400         |   |   | (691,487    | ) |   | -             |   |   | 2,233,478     |  
|Issuance of common stock in July and September       |              |   |   |         |   |   |            |  |   |               |   |   |                |   |   |             |   |   |               |   |   | -             |  
|2002 for cash at an average of $0.12
      per share | 293,333      |   |   | 293     |   |   | 38,207     |  |   | -             |   |   | -              |   |   | -           |   |   | -             |   |   | 38,500        |  
|Issuance of common stock in October 2002             |              |   |   |         |   |   |            |  |   |               |   |   |                |   |   |             |   |   |               |   |   |               |  
|for Consulting Services                              | 725,000      |   |   | 725     |   |   | 6,525      |  |   | -             |   |   |                |   |   |             |   |   | -             |   |   | 7,250         |  
|Expiration of Stock Warrants, May, 2003              |              |   |   |         |   |   | 4,000      |  |   | -             |   |   | (4,000         | ) |   |             |   |   | -             |   |   | -             |  
|Net loss for the period ended June 30, 2003          | -            |   |   | -       |   |   | -          |  |   | -             |   |   | -              |   |   | (2,406,504  | ) |   | -             |   |   | (2,406,504    | )
|Balance, June 30, 2003                               | 18,722,000   |   |   | 18,722  |   |   | 2,941,593  |  |   | -             |   |   | 10,400         |   |   | (3,097,991  | ) |   | -             |   |   | (127,276      | )
|Net loss for the period ended September 30, 2003     | -            |   |   | -       |   |   | -          |  |   | -             |   |   | -              |   |   | (79,890     | ) |   | -             |   |   | (79,890       | )
|Balance, September 30, 2003 (Unaudited)              | 18,722,000   |   | $ | 18,722  |   | $ | 2,941,593  |  |   | -             |   | $ | 10,400         |   | $ | (3,177,881  | ) | $ | -             |   | $ | (207,166      | )

The accompanying notes are an integral part of these financial statements.

4

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REWARD ENTERPRISES, INC.
  (A Development Stage Company)CONSOLIDATED STATEMENTS OF CASH FLOWS

|                                                       |   |               |   |   |               |   |   | Dec 12,1997   |  
|------------------------------------------------------ | - | ------------- | - | - | ------------- | - | - | ------------- | -
|                                                       |   | Three Months  |   |   | Three Months  |   |   | (Inception)   |  
|                                                       |   | Ended         |   |   | Ended         |   |   | Through       |  
|                                                       |   | September 30, |   |   | September 30, |   |   | September 30, |  
|                                                       |   | 2003          |   |   | 2002          |   |   | 2003          |  
|                                                       |   | (Unaudited)   |   |   | (Unaudited)   |   |   | (Unaudited)   |  
|                                                       |   |               |   |   |               |   |   |               |  
|Cash Flows From Operating Activities:                  |   |               |   |   |               |   |   |               |  
|Net loss                                               | $ | (79,890       | ) | $ | (67,697       | ) | $ | (3,177,881    | )
|Adjustments to reconcile net loss                      |   |               |   |   |               |   |   |               |  
|to
      net cash used by operating activities:        |   |               |   |   |               |   |   |               |  
|Depreciation
      and amortization                    |   | 7,299         |   |   | 7,299         |   |   | 59,593        |  
|Related
      party receivable reclass to compensation |   | -             |   |   | -             |   |   | 26,000        |  
|Loss
      on impairment                               |   | -             |   |   | -             |   |   | 2,165,160     |  
|Gain
      on forgiveness of debt                      |   | -             |   |   | -             |   |   | (25,000       | )
|Services
      provided in exchange for stock          |   | -             |   |   | -             |   |   | 31,975        |  
|Stock
      issued in exchange for payables            |   | -             |   |   | -             |   |   | 235,000       |  
|Stock
      options issued for compensation            |   | -             |   |   |               |   |   | 14,400        |  
|Discount
      on note payable                         |   | -             |   |   | 2,000         |   |   | -             |  
|Changes
      in assets and liabilities:               |   |               |   |   |               |   |   |               |  
|Other
      assets                                     |   | -             |   |   | -             |   |   | (60,000       | )
|Accounts
      receivable, related party               |   | -             |   |   | -             |   |   | (26,000       | )
|Accounts
      payable                                 |   | 41,731        |   |   | 6,556         |   |   | (77,492       | )
|Accounts
      payable - related party                 |   | 15,000        |   |   | -             |   |   | 15,000        |  
|Accrued
      expenses                                 |   | 3,025         |   |   | 1,512         |   |   | 166,338       |  
|Due
      to Joint Venture                             |   | -             |   |   | -             |   |   | 175,000       |  
|Net cash used by operating activities                  |   | (12,835       | ) |   | (50,330       | ) |   | (477,907      | )
|                                                       |   |               |   |   |               |   |   |               |  
|Cash Flows From Investing Activities:                  |   |               |   |   |               |   |   |               |  
|Changes to property and equipment                      |   | -             |   |   | -             |   |   | (60,526       | )
|Decrease (increase) in loans receivable                |   | -             |   |   | -             |   |   | (140,000      | )
|Cash from merger acquisition                           |   | -             |   |   | -             |   |   | 9,093         |  
|Net cash provided (used) by investing
      activities |   | -             |   |   | -             |   |   | (191,433      | )
|                                                       |   |               |   |   |               |   |   |               |  
|Cash Flows From Financing Activities:                  |   |               |   |   |               |   |   |               |  
|Proceeds from related party loans                      |   | -             |   |   | -             |   |   | 3,600         |  
|Payment on related party loans                         |   | -             |   |   | -             |   |   | (3,400        | )
|Proceeds from promissory notes                         |   | -             |   |   | -             |   |   | 70,000        |  
|Issuance of stock                                      |   | -             |   |   | 38,500        |   |   | 599,140       |  
|Net cash provided by financing activities              |   | -             |   |   | 38,500        |   |   | 669,340       |  
|                                                       |   |               |   |   |               |   |   |               |  
|Net increase (decrease) in cash and cash equivalents   |   | (12,835       | ) |   | (11,830       | ) |   | -             |  
|                                                       |   |               |   |   |               |   |   |               |  
|Cash and cash equivalents, beginning of period         |   | 12,835        |   |   | 24,717        |   |   | -             |  
|                                                       |   |               |   |   |               |   |   |               |  
|Cash and cash equivalents, end of period               | $ | -             |   | $ | 12,887        |   | $ | -             |  
|                                                       |   |               |   |   |               |   |   |               |  
|SUPPLEMENTAL CASH FLOW DISCLOSURES:                    |   |               |   |   |               |   |   |               |  
|Interest
      expense paid                            | $ | -             |   | $ | -             |   | $ | -             |  
|Income
      taxes paid                                | $ | -             |   | $ | -             |   | $ | -             |  
|                                                       |   |               |   |   |               |   |   |               |  
|NON-CASH INVESTING AND FINANCING TRANSACTIONS:         |   |               |   |   |               |   |   |               |  
|Services exchanged for common stock                    | $ | -             |   | $ | -             |   | $ | 31,975        |  
|Subscribed stock in exchange for payables              | $ | -             |   | $ | -             |   | $ | 10,000        |  
|Payables exchanged for shares of stock                 | $ | -             |   | $ | -             |   | $ | 160,000       |  
|Stock issued in payment of loans payable               | $ | -             |   | $ | -             |   | $ | 200           |  
|Stock issued for accrued consulting
      fees         | $ | -             |   | $ | -             |   | $ | 65,000        |  
|Stock options issued for compensation                  | $ | -             |   | $ | -             |   | $ | 14,400        |  
|Stock issued for subsidiary                            | $ | -             |   | $ | -             |   | $ | 2,100,000     |  
|Website acquired through merger                        | $ | -             |   | $ | -             |   | $ | 145,979       |  

The accompanying notes are an integral part of these financial statements.

5

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REWARD ENTERPRISES, INC.
  Notes to the Consolidated Financial Statements 
  (A Development Stage Company) September 30, 2003

NOTE 1  ORGANIZATION AND DESCRIPTION OF BUSINESS

Reward Enterprises, Inc. (hereinafter the Company),
  was incorporated on December 12, 1997, under the laws of the State of Nevada
  primarily for the purpose of offering interactive online internet entertainment
  and game playing. On August 15, 2001, the Company entered into a merger agreement
  with Q Presents, Inc., which was incorporated in the State of California for
  the purpose of providing innovative event management and marketing automation
  solutions to take advantage of the meeting, hotel, trade show and convention
  industries. At the time of the merger, the Company changed its focus to match
  that of Q Presents, Inc.

The Company expects to generate revenue through licensing
  its Q automated event management services and related supported
  offerings; licensing its intranet and online services; sales of dedicated advertising;
  sales of related merchandise; and its promotion and publicity services.

Since the merger, the Company has focused on the development
  of its business plan. The Companys new management has recently entered
  into the specialized international communications market to provide international
  voice, internet access, and global network services to corporate clients, communication
  carriers and internet service providers. The Company will utilize the web-based
  platform that was originally intended as an event registration and automation
  solution for its telecommunication business.

The Companys year end is June 30.

NOTE 2  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

This summary of significant accounting policies of Reward
  Enterprises, Inc. is presented to assist in understanding the Companys
  financial statements. The financial statements and notes are representations
  of the Companys management, which is responsible for their integrity and
  objectivity. These accounting policies conform to accounting principles generally
  accepted in the United States of America and have been consistently applied
  in the preparation of the financial statements.

Accounting Methods 
  The Companys financial statements are prepared using the accrual basis
  of accounting in accordance with accounting principles generally accepted in
  the United States of America.

Basic and Diluted Loss Per Share 
  Net loss per share was computed by dividing the net loss by the weighted average
  number of shares outstanding during the period. The weighted average number
  of shares was calculated by taking the number of shares outstanding and weighting
  them by the amount of time that they were outstanding. Basic and diluted loss
  per share were the same, as the inclusion of common stock equivalents would
  be anti-dilutive.

6

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REWARD ENTERPRISES, INC.
  Notes to the Consolidated Financial Statements 
  (A Development Stage Company) September 30, 2003

NOTE 2  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
  (Continued)

Going Concern 
  The accompanying financial statements have been prepared assuming that the Company
  will continue as a going concern.

As shown in the accompanying financial statements, the Company
  incurred a net loss of $79,890 for the quarter ended September 30, 2003, and
  has no revenue. The Company is currently putting technology in place that will,
  if successful, mitigate this factor that raises substantial doubt about the
  Companys ability to continue as a going concern. The financial statements
  do not include any adjustments relating to the recoverability and classification
  of recorded assets, or the amounts and classification of liabilities that might
  be necessary in the event the Company cannot continue in existence.

Management plans to seek additional capital through a public
  offering of its stock that will provide the funds needed to increase liquidity,
  fund internal growth and fully implement its business plan.

Cash and Cash EquivalentsFor purposes of the consolidated statements of cash flows, the Company considers
  all short-term debt securities purchased with a maturity of three months or
  less to be cash equivalents.

Provision for Taxes 
  Income taxes are provided based upon the liability method of accounting pursuant
  to SFAS No. 109 Accounting for Income Taxes. Under this approach,
  deferred income taxes are recorded to reflect the tax consequences on future
  years of differences between the tax basis of assets and liabilities and their
  financial reporting amounts at each year-end. A valuation allowance is recorded
  against deferred tax assets if management does not believe the Company has met
  the more likely than not standard imposed by SFAS No. 109 to allow
  recognition of such an asset.

At June 30, 2003 and 2002, the Company had net deferred tax
  assets of approximately $1,045,000 and $169,000, respectively, principally arising
  from net operating loss carryforwards for income tax purposes, and a $10,400
  book-tax difference related to stock options issued for services. As management
  of the Company cannot determine that it is more likely than not that the Company
  will realize the benefit of the net deferred tax asset, a valuation allowance
  equal to the net deferred tax asset has been established as of June 30, 2003
  and 2002 in the amounts of $1,045,000 and $169,000, respectively. The change
  in the allowance account from June 30, 2002 to June 30, 2003 was $876,000 as
  a result of a change in managements estimates.

At September 30, 2003 and 2002, the Company has net operating
  loss carryforwards of approximately $3,000,000, and $690,000 which expire in
  the years through 2023.

7

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REWARD ENTERPRISES, INC.
  Notes to the Consolidated Financial Statements 
  (A Development Stage Company) September 30, 2003

NOTE 2  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
  (Continued)

Use of Estimates 
  The process of preparing financial statements in conformity with accounting
  principles generally accepted in the United States of America requires the use
  of estimates and assumptions regarding certain types of assets, liabilities,
  revenues, and expenses. Such estimates primarily relate to unsettled transactions
  and events as of the date of the financial statements. Accordingly, upon settlement,
  actual results may differ from estimated amounts.

Impaired Asset Policy 
  In October 2001, the Financial Accounting Standards Board issued Statement of
  Financial Accounting Standards No. 144, Accounting for the Impairment
  or Disposal of Long-Lived Assets (SFAS No. 144). SFAS No. 144 replaces
  SFAS No. 121, Accounting for the Impairment of Long-Lived Assets and for
  Long-Lived Assets to Be Disposed Of. This standard establishes a single
  accounting model for long-lived assets to be disposed of by sale, including
  discontinued operations. SFAS No. 144 requires that these long-lived assets
  be measured at the lower of carrying amount or fair value less cost to sell,
  whether reported in continuing operations or discontinued operations. This statement
  is effective beginning for fiscal years after December 15, 2001. The Company
  adopted SFAS No. 144 during the year ended June 30, 2002.

The Company impaired the remaining value of its goodwill of
  $2,100,000, acquired in prior years under Statement of Financial Accounting
  Standards No. 142, Goodwill and Other Intangible Assets (SFAS 142)
  during the year ending June 30, 2003. Under SFAS 142, the Company is required
  to periodically assess the value of its intangible assets to determine underlying
  value.

The Company has recorded an impairment to its software license
  website and computer hardware of $65,160 during the year ended June 30, 2001,
  effectively reducing the recorded amount of these assets to $1,191 at June 30,
  2001. As of June 30, 2003, the Company had deemed its goodwill recorded on its
  financial statements to be impaired (See Note 5).

Web Site Development 
  The Company has adopted SOP 98-1 as amplified by EITF 00-2, Accounting
  for Web Site Development Costs. In accordance with this adoption, the
  Company has capitalized website development costs. During the year ended June
  30, 2002, the Company capitalized $145,979 of website development costs, which
  were acquired in the August 15, 2001 merger. The Company has recently entered
  into the specialized international communications market and continues to utilize
  the website for this purpose. In November 2001, the Company began amortizing
  the web site costs using the straight-line method over a five year expected
  life for a total amortization expense of $7,299 at September 30, 2003.

8

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REWARD ENTERPRISES, INC.
  Notes to the Consolidated Financial Statements 
  (A Development Stage Company) September 30, 2003

NOTE 2  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Derivative Instruments 
  The Financial Accounting Standards Board issued Statement of Financial Accounting
  Standards No. 133, Accounting for Derivative Instruments and Hedging Activities
  (hereinafter SFAS No. 133), as amended by SFAS No. 137, Accounting
  for Derivative Instruments and Hedging Activities  Deferral of the Effective
  Date of FASB No. 133, and SFAS No. 138, Accounting for Certain Derivative
  Instruments and Certain Hedging Activities, and SFAS No. 149, Amendment
  of Statement 133 on Derivative Instruments and Hedging Activities. These
  statements establish accounting and reporting standards for derivative instruments,
  including certain derivative instruments embedded in other contracts, and for
  hedging activities. They require that an entity recognize all derivatives as
  either assets or liabilities in the balance sheet and measure those instruments
  at fair value.

If certain conditions are met, a derivative may be specifically
  designated as a hedge, the objective of which is to match the timing of gain
  or loss recognition on the hedging derivative with the recognition of (i) the
  changes in the fair value of the hedged asset or liability that are attributable
  to the hedged risk or (ii) the earnings effect of the hedged forecasted transaction.
  For a derivative not designated as a hedging instrument, the gain or loss is
  recognized in income in the period of change.

Historically, the Company has not entered into derivatives
  contracts to hedge existing risks or for speculative purposes.

At September 30, 2003, the Company has not engaged in any
  transactions that would be considered derivative instruments or hedging activities.

Compensated Absences 
  The Company currently does not have a policy regarding accruals of compensated
  absences. The Company intends to expense these costs as incurred.

Recent Accounting Pronouncements 
  In May 2003, the Financial Accounting Standards Board issued Statement of Financial
  Accounting Standards No. 150, Accounting for Certain Financial Instruments
  with Characteristics of Both Liabilities and Equity (hereinafter SFAS
  No. 150). SFAS No. 150 establishes standards for classifying and measuring
  certain financial instruments with characteristics of both liabilities and equity
  and requires that those instruments be classified as liabilities in statements
  of financial position. Previously, many of those instruments were classified
  as equity. SFAS No. 150 is effective for financial instruments entered into
  or modified after May 31, 2003 and otherwise is effective at the beginning of
  the first interim period beginning after June 15, 2003. The Company has not
  yet determined the impact of the adoption of this statement.

9

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REWARD ENTERPRISES, INC.
  Notes to the Consolidated Financial Statements 
  (A Development Stage Company) September 30, 2003

NOTE 2  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Recent Accounting Pronouncements (Continued)

In April 2003, the Financial Accounting Standards Board issued
  Statement of Financial Accounting Standards No. 149, Amendment of Statement
  133 on Derivative Instruments and Hedging Activities (hereinafter SFAS
  No. 149). SFAS No. 149 amends and clarifies the accounting for derivative
  instruments, including certain derivative instruments embedded in other contracts,
  and for hedging activities under SFAS No. 133, Accounting for Derivative
  Instruments and Hedging Activities. This statement is effective for contracts
  entered into or modified after June 30, 2003 and for hedging relationships designated
  after June 30, 2003. The adoption of SFAS No. 149 is not expected to have a
  material impact on the financial position or results of operations of the Company.

In December 2002, the Financial Accounting Standards Board
  issued Statement of Financial Accounting Standards No. 148, Accounting
  for Stock-Based Compensation  Transition and Disclosure (hereinafter
  SFAS No. 148). SFAS No. 148 amends SFAS No. 123, Accounting
  for Stock-Based Compensation, to provide alternative methods of transition
  for a voluntary change to the fair value based method of accounting for stock-based
  employee compensation. In addition, the statement amends the disclosure requirements
  of SFAS No. 123 to require prominent disclosure in both annual and interim financial
  statements about the method of accounting for stock-based employee compensation
  and the effect of the method used on reported results. The provisions of the
  statement are effective for financial statements for fiscal years ending after
  December 15, 2002. The Company currently reports stock issued to employees under
  the rules of SFAS 123. Accordingly, there is no change in disclosure requirements
  due to SFAS 148.

In June 2002, the Financial Accounting Standards Board issued
  Statement of Financial Accounting Standards No. 146, Accounting for Costs
  Associated with Exit or Disposal Activities (hereinafter SFAS No.
  146). SFAS No. 146 addresses significant issues regarding the recognition,
  measurement, and reporting of costs associated with exit and disposal activities,
  including restructuring activities. SFAS No. 146 also addresses recognition
  of certain costs related to terminating a contract that is not a capital lease,
  costs to consolidate facilities or relocate employees, and termination benefits
  provided to employees that are involuntarily terminated under the terms of a
  one-time benefit arrangement that is not an ongoing benefit arrangement or an
  individual deferred-compensation contract. SFAS No. 146 was issued in June 2002,
  effective December 31, 2002 with early adoption encouraged. The impact on the
  Companys financial position or results of operations from adopting SFAS
  No. 146 has not been determined.

In April 2002, the Financial Accounting Standards Board issued
  Statement of Financial Accounting Standards No. 145, Rescission of FASB
  Statements No. 4, 44 and 64, Amendment of FASB Statement No. 13, and Technical
  Corrections (hereinafter SFAS No. 145), which updates, clarifies
  and simplifies existing accounting pronouncements. FASB No. 4, which required
  all gains and losses from the extinguishment of debt to be aggregated and, if
  material, classified as an extraordinary item, net of related tax effect was
  rescinded. As a result, FASB No. 64, which amended FASB No. 4, was rescinded,
  as it was no longer necessary. FASB No. 44, Accounting for Intangible
  Assets of Motor Carriers, established the accounting requirements for
  the effects of transition to the provisions of the Motor Carrier Act of 1980.
  Since the transition has been completed, FASB No. 44 is no longer necessary
  and has been rescinded. SFAS No. 145 amended FASB No. 13 to eliminate an inconsistency
  between the required accounting for sale-leaseback transactions and the required
  accounting for certain lease modifications that have economic effects

10

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REWARD ENTERPRISES, INC.
  Notes to the Consolidated Financial Statements 
  (A Development Stage Company) September 30, 2003

NOTE 2  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Recent Accounting Pronouncements (Continued)

that are similar to sale-leaseback transactions. The Company
  adopted SFAS No. 145 and does not believe that the adoption will have a material
  effect on the financial statements of the Company at September 30, 2003.

In August 2001, the Financial Accounting Standards Board issued
  Statement of Financial Accounting Standards No. 144, Accounting for the
  Impairment or Disposal of Long-Lived Assets (hereinafter SFAS No.
  144). SFAS No. 144 replaces SFAS No. 121, Accounting for the Impairment
  of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of. This
  standard establishes a single accounting model for long-lived assets to be disposed
  of by sale, including discontinued operations. SFAS No. 144 requires that these
  long-lived assets be measured at the lower of carrying amount or fair value
  less cost to sell, whether reported in continuing operations or discontinued
  operations. This statement is effective beginning for fiscal years after December
  15, 2001, with earlier application encouraged. The Company adopted SFAS No.
  144 and does not believe that the adoption will have a material impact on the
  financial statements of the Company at September 30, 2003.

In June 2001, the Financial Accounting Standards Board issued
  Statement of Financial Accounting Standards No. 143, Accounting for Asset
  Retirement Obligations (hereinafter SFAS No. 143). SFAS No.
  143 establishes guidelines related to the retirement of tangible long-lived
  assets of the Company and the associated retirement costs. This statement requires
  that the fair value of a liability for an asset retirement obligation be recognized
  in the period in which it is incurred if a reasonable estimate of fair value
  can be made. The associated asset retirement costs are capitalized as part of
  the carrying amount of the long-lived assets. This statement is effective for
  financial statements issued for the fiscal years beginning after June 15, 2002
  and with earlier application encouraged. The Company adopted SFAS No. 143 and
  does not believe that the adoption will have a material impact on the financial
  statements of the Company at September 30, 2003.

In June 2001, the Financial Accounting Standards Board issued
  Statement of Financial Accounting Standards No. 141, "Business Combinations"
  (hereinafter SFAS No. 141) and Statement of Financial Accounting
  Standard No. 142, "Goodwill and Other Intangible Assets" (hereinafter SFAS
  No. 142). SFAS No. 141 provides for the elimination of the pooling-of-interests
  method of accounting for business combinations with an acquisition date of July
  1, 2001 or later. SFAS No. 142 prohibits the amortization of goodwill and other
  intangible assets with indefinite lives and requires periodic reassessment of
  the underlying value of such assets for impairment. SFAS No. 142 is effective
  for fiscal years beginning after December 15, 2001. Application of the nonamortization
  provision of SFAS No. 142 had no effect on the operations or financial position
  of the Company.

In September 2000, the Financial Accounting Standards Board
  issued Statement of Financial Accounting Standard No. 140 Accounting for
  Transfers and Servicing of Financial Assets and Extinguishment of Liabilities
  (hereinafter SFAS No. 140). This statement provides accounting and
  reporting standards for transfers and servicing of financial assets and extinguishment
  of liabilities and also provides consistent standards for distinguishing transfers
  of financial assets that are sales from transfers that are secured borrowings.
  SFAS No. 140 is effective for recognition and reclassification of collateral
  and for disclosures relating to securitization transactions and collateral for
  fiscal years ending after December 15, 2000, and is effective for transfers
  and servicing of financial assets and extinguishments of liabilities occurring
  after

11

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REWARD ENTERPRISES, INC.
  Notes to the Consolidated Financial Statements 
  (A Development Stage Company) September 30, 2003

NOTE 2  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Recent Accounting Pronouncements (Continued)

March 31, 2001. The Company believes that the adoption of
  this standard will not have a material effect on the Companys results
  of operations or financial position.

In January 2003, the Financial Accounting Standards Board
  issued FASB Interpretation No. 46 Consolidation of Variable Interest Entities,
  an Interpretation of ARB No. 51 (hereinafter FIN 46). FIN
  46 requires certain variable interest entities to be consolidated by the primary
  beneficiary of the entity if the equity investors in the entity do not have
  the characteristics of a controlling financial interest or do not have sufficient
  equity at risk for the entity to finance its activities without additional subordinated
  financial support from other parties. FIN 46 is effective for all new variable
  interest entities created or acquired after January 31, 2003. The provisions
  of FIN 46 must be applied for the first interim or annual period beginning after
  June 15, 2003. The Company does not have any entities that require disclosure
  or new consolidation as a result of adopting the provisions of FIN 46.

In November 2002, the Financial Accounting Standards Board
  issued FASB Interpretation No. 45 Guarantors Accounting and Disclosure
  Requirements for Guarantees, including Indirect Guarantees of Indebtedness of
  Others (hereinafter FIN 45). FIN 45 requires a company, at
  the time it issues a guarantee, to recognize an initial liability for the fair
  value of obligations assumed under the guarantee and elaborates on existing
  disclosure requirements related to guarantees and warranties. The initial recognition
  requirements of FIN 45 are effective for guarantees issued or modified after
  December 31, 2002 and do not have an impact on the financial statements of the
  Company. The Company does not anticipate issuing any guarantees which would
  be required to be recognized as a liability under the provisions of FIN 45 and
  thus does not expect the adoption of this interpretation to have an impact on
  its results of operations or financial position.

Reclassifications 
  Certain prior year amounts have been reclassified to conform to the fiscal 2003
  presentation.

Principles of Consolidation 
  The consolidated financial statements include the accounts of the Company and
  its wholly owned subsidiary, Q Presents, Inc., after elimination of intercompany
  accounts and transactions.

NOTE 3  ACQUISITIONS

On August 15, 2001, Reward Enterprises, Inc. acquired Q Presents,
  Inc. with the issuance of 6,000,000 shares of common stock in exchange for all
  of the outstanding common stock of Q Presents, Inc. This transaction had an
  accounting date of August 31, 2001, which was the date that the transaction
  was final. The value of the stock issued at the fair market price of $0.35 per
  share was $2,100,000.

The purchase price of Q Presents, Inc. was $2,100,000, determined
  by the fair market value of Rewards stock. The net book deficit of assets
  acquired was $105,588.

12

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REWARD ENTERPRISES, INC.
  Notes to the Consolidated Financial Statements 
  (A Development Stage Company) September 30, 2003

NOTE 3  ACQUISITIONS (Continued)

The assets and liabilities acquired were as follows as of August 31, 2001:

|Cash in bank                     | $ | 9,093   | 
|-------------------------------- | - | ------- | 
|Accounts receivable from officer |   | 96      | 
|Website                          |   | 43,000  | 
|Total Assets                     | $ | 52,189  | 
|                                 |   |         | 
|Accounts payable                 | $ | 15,169  | 
|Interest payable to Reward       |   | 2,601   | 
|Note payable to Reward           |   | 140,000 | 
|Total Liabilities                | $ | 157,777 | 
|                                 |   |         | 
|Liabilities in excess of assets  | $ | 105,588 | 

After the elimination of $2,601 of interest owed between the
  companies, as part of the acquisition transaction, $102,987 was allotted to
  the value of the website based upon costs expensed during the websites
  development. The balance of the purchase price was allocated to goodwill that
  was acquired in the merger. Pursuant to the acquisition, Q Presents, Inc. became
  a wholly owned subsidiary of the Company.

NOTE 4  PROPERTY AND EQUIPMENT

Property and equipment are stated at cost. Depreciation is
  provided using the straight-line method over the estimated useful lives of the
  assets. The useful lives of property and equipment for purposes of computing
  depreciation is five years. The computer equipment in the Companys Vancouver
  office was abandoned when the Company moved to the Q Presents offices in California.
  The Company deemed this remaining book value of $1,059 to be an office expense
  for the quarter ending September 30, 2001.

NOTE 5  GOODWILL

The Company acquired goodwill in the acquisition of Q Presents,
  Inc. (See Note 3). This goodwill will be accounted for in accordance with SFAS
  No. 142. (See Note 2.) The Company will periodically review this asset for possible
  impairment. At June 30, 2003 it was determined the asset was impaired due to
  a permanent decline in the Companys stock value, and a charge for the
  impairment of $2,100,000 was recorded under operating expenses.

13

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REWARD ENTERPRISES, INC.
  Notes to the Consolidated Financial Statements 
  (A Development Stage Company) September 30, 2003

NOTE 6  COMMON STOCK

Upon incorporation, subscriptions for 1,000,000 shares of
  common stock were issued at $0.01 per share for $10,000. In July 1999, the Companys
  board of directors authorized a 1 for 10 reverse stock split. This decreased
  the number of issued and outstanding shares to 1,000,000 and the par value of
  the stock to $0.001 per share. All financial statement information herein has
  been changed to reflect this stock split.

Additional share issuances under Regulation D, Rule 504, include
  1,400,000 common shares at $0.01 and 315,000 common shares at $0.50 per share,
  for total proceeds of $171,500.

At June 30, 1999, $10,000 in stock subscriptions was receivable.
  During the year ended June 30, 2000, these subscriptions were satisfied.

During October 2000, 10,000,000 common stock shares were issued
  at $0.001 per share for cash proceeds of $10,000. This issuance resulted in
  one of the Companys officers receiving shares which constituted a 64%
  ownership in the Company. An additional 200,000 common stock shares were issued
  at $0.001 per share to satisfy a note payable. The 10,200,000 shares issued
  in these transactions were subsequently cancelled in accordance with the terms
  of the agreement to acquire Q Presents, Inc. (See Note 3.)

During December 2000, stock options were exercised in exchange
  for consulting fees payable. These stock options were exercised, resulting in
  1,600,000 common stock shares being issued in exchange for satisfying $160,000
  in consulting fees payable.

In 2001, 1,955,000 options for common stock were exercised.
  One million of the options were for cash at $0.10 per share. Another 325,000
  of the options were for cash at $0.25 per share, and the remaining 630,000 options
  were for director services at $0.10 per share.

In August 2001, the Company issued 6,000,000 shares of common
  stock in its acquisition of Q Presents, Inc. (See Note 3.)

Between October and December 2001, 572,000 options for common
  stock were exercised. Two hundred thousand of the options were for cash at $0.10
  per share and 372,000 options were for cash at $0.25 per share for which the
  Company received $113,000.

In December 2001, the Company issued an additional 890,000
  shares of common stock to twelve investors in consideration of $890.

Between January and March 2002, the Company issued an additional
  660,000 shares of common stock to three investors in consideration of $31,500.

In April 2002, the Company issued 2,945,000 shares of common
  stock for services in the amount of $14,725.

In May and June of 2002, the Company issued 366,667 shares
  of common stock for cash in the amount of $52,500.

Between July and September of 2002, the Company issued 293,333
  shares of common stock for cash in the amount of $38,500.

In October 2002, the Company issued 725,000 shares of common
  stock for services totaling $7,250.

14

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REWARD ENTERPRISES, INC.
  Notes to the Consolidated Financial Statements 
  (A Development Stage Company) September 30, 2003

NOTE 7STOCK OPTIONS AND WARRANTS

In September 1998, the Company adopted the Reward Enterprises,
  Inc. 1999 Directors and Officers Stock Option Plan, a non-qualified plan. During
  1999, the Company granted 2,500,000 common stock options for the services of
  consultants. The options issued include negotiation rights and begin vesting
  in June 1999, with 25% of the eligible shares vesting each year until the recipients
  are fully vested in their shares.

The Company entered into consulting agreements with three
  directors of the Company, whereby two of the directors would each receive $5,000
  per month and 1,000,000 common stock options (with half exercisable at $0.10
  per share and half exercisable at $0.25 per share) and the other director would
  receive $2,500 per month and 500,000 common stock options (with half exercisable
  at $0.10 per share and half exercisable at $0.25 per share). These consulting
  agreements were terminated effective October 31, 2000. All options related to
  these agreements expire April 30, 2009. At March 2001, a total of 630,000 options
  were exercised in exchange for accrued consulting fees due to them of $65,000.

On October 16, 2000, the Company adopted the 2000 Stock Option
  Plan, a non-qualified plan, that allows the Company to distribute up to 7,000,000
  shares of common stock to directors, officers and employees. Stock options of
  200,000 were granted to a consultant. The exercise price of these options is
  $0.10 per share for the first 100,000 options and $0.25 per share for the balance
  of 100,000 options. These options will expire September 30, 2009. During November
  2000, 2,230,000 options were granted with an exercise price of $0.10 per share,
  in settlement of consulting fees with an expiration date of April 30, 2001.
  During the year ending June 30, 2001 a total of 3,455,000 options were exercised.

The fair value of each option granted is estimated on the
  grant date using the Black-Scholes option price calculation. The following assumptions
  were made in estimating fair value: Risk-free interest rate of 5% and expected
  life of ten years. A minimum volatility of 30% was used and resulted in no adjustment
  to compensation.

Between October and December 2001, options to purchase 572,000
  shares of common stock were exercised and the Company received $103,000.

In December 2001, as part of the employment agreements with
  Mr. Edward Withrow III and Mr. Warren K. Withrow, the Company issued stock options
  for 1,000,000 shares with exercise prices of $0.04 per share and 400,000 shares
  with exercise prices of $0.10 per share. The Black-Scholes option price calculation
  of the fair value of these options is $10,400, based upon a risk-free interest
  rate of 5%, volatility of 30% and a term of ten years.

15

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REWARD ENTERPRISES, INC.
  Notes to the Consolidated Financial Statements 
  (A Development Stage Company) September 30, 2003

NOTE 7STOCK OPTIONS AND WARRANTS (Continued)

The Company signed an agreement with SBI USA, a member of
  Softbank Investment Group, in February 2002. (See Note 10.) This agreement included
  3,000,000 warrants for purchase of 3,000,000 shares of common stock with exercise
  prices of $0.50, $0.75, and $1.00 per share. In May of 2002, the Company attached
  500,000 warrants for an equal number of shares of common stock to promissory
  notes that were issued. (See Note 10.) The warrants have exercise prices from
  $0.05 to $0.10 per share. The Company also attached 40,000 warrants to various
  issuances of common stock in June 2002. The holders of the warrants may purchase
  an equal number of common stock shares at exercise prices from $0.25 to $0.45
  per share. These warrants were valued using the Black-Scholes option price calculator
  using a risk-free interest rate of two percent, volatility of 70%, a term of
  one year, and either an equity price of $0.05 or $0.12 depending on the date
  of issuance. It was determined that the 400,000 warrants attached to one of
  the promissory notes had a value of $4,000., with an expiration date of May
  14, 2003. The 400,000 warrants were not exercised and subsequently expired.

Following is a summary of the Companys stock options:

|                                               |           |  |   | Weighted | 
|---------------------------------------------- | --------- |  | - | -------- | 
|                                               | Number    |  |   | Average  | 
|                                               | Of        |  |   | Exercise | 
|                                               | Shares    |  |   | Price    | 
|Outstanding at 6-30-2002                       | 1,803,000 |  | $ | 0.10     | 
|Granted                                        |           |  |   |          | 
|Exercised                                      |           |  |   |          | 
|Forfeited                                      |           |  |   |          | 
|Outstanding at 6-30-2003                       | 1,803,000 |  | $ | 0.10     | 
|                                               |           |  |   |          | 
|Options exercisable at 6-30-2003               | 1,803,000 |  |   |          | 
|                                               |           |  |   |          | 
|Weighted average fair value of options granted |           |  |   |          | 
|during the year ended June 30, 2002            |           |  | $ | 0.01     | 
|                                               |           |  |   |          | 
|Outstanding at 6-30-2003                       | 1,803,000 |  | $ | 0.10     | 
|Granted                                        | -         |  |   | -        | 
|Exercised                                      | -         |  |   | -        | 
|Forfeited                                      | -         |  |   | -        | 
|Outstanding at 9-30-2003                       | 1,803,000 |  | $ | 0.10     | 
|                                               |           |  |   |          | 
|Options exercisable at 9-30-2003               | 1,803,000 |  |   |          | 
|                                               |           |  |   |          | 
|Weighted average fair value of options granted |           |  |   |          | 
|during the period ended September 30, 2003     |           |  |   | -        | 

16

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REWARD ENTERPRISES, INC.
  Notes to the Consolidated Financial Statements 
  (A Development Stage Company) September 30, 2003

NOTE 8  RELATED PARTY TRANSACTIONS

Certain consultants who received common stock options under
  the Companys non-qualified stock option plan are the Companys directors
  and stockholders. (See Note 6.) Until October 2001, an associate of a director
  of the Company provided office space to the Company in exchange for services
  provided by the director. The value of this space was considered to be $2,000
  per month and was considered to be a loan from the director at that time.

In September 2001, the Companys board of directors approved
  consulting agreements with Edward W. Withrow III and Warren K. Withrow for consulting/employment
  agreements providing for payments to each of $3,500 cash per month and options
  to purchase up to 1,800,000 shares of common stock. These options were subsequently
  reduced to 700,000 shares in December 2001 and the cash value of services was
  increased to $10,000 per month, which was to begin in April 2002; however, as
  of June 30, 2002, no compensation has been paid, and the agreements are being
  renegotiated.

The Company has yet to finalize compensation agreements with
  its officers, but has plans to do so in the very near future. These advances
  were written off as compensation in June 30, 2003. In the period ended September
  30, 2003, the Company expensed a total of $46,250 to two of its officers as
  independent contractors and consultants. At September 30, 2003, the Company
  owed an additional $15,000 to an officer of the Company, and this liability
  is recorded as accounts payable  related party.

From time to time the Company receives funds from related
  parties in the form of loans. These are recorded as unsecured, non-interest
  bearing, short-term loans, payable upon demand. At September 30, 2003, there
  were no related party loans outstanding.

NOTE 9  COMMITMENTS AND CONTINGENCIES

In September 2001, the Company also entered into a letter
  of intent with Live Media Events, Inc. On January 10, 2002, the Company and
  Live Media Events, Inc. entered into a cancellation and mutual release agreement
  on the aforementioned letter of intent.

In February 2002, the Company entered into a non-exclusive
  financial advisory contract with SBI USA, a member of Softbank Investment Group.
  In consideration for the services of SBI, the Company is obligated to pay a
  $12,500 retainer which becomes due and payable upon funding the Companys
  $500,000 promissory note. The Company also granted common stock warrants pursuant
  to this agreement. (See Note 7.) At September 30, 2003, the Company has not
  paid any of the retainer, and has not received any funding from the issuance
  of the aforementioned promissory note.

The Companys officers are employed as independent contractors
  and consultants, and as such, are responsible for all related payroll taxes
  arising from any payments made to them by the Company.

On June 1, 2003, the Company entered into a consulting agreement
  with Huntington Chase Financial Group LLC. The terms of the agreement are $10,000
  per month for a six month period ending November 2003.

17

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REWARD ENTERPRISES, INC.
  Notes to the Consolidated Financial Statements 
  (A Development Stage Company) September 30, 2003

NOTE 10  LOANS PAYABLE

The Company issued two convertible promissory notes for a
  total of $30,000 in May 2002 and one promissory note for $25,000 in January
  2003 and one promissory note for $15,000 in June 2003 which bear interest rates
  at 20%, 15% and 15% respectively. The two convertible notes had warrants attached,
  and were convertible into common stock within 60 and 90 days of issuance. Neither
  note was converted. Under their original terms, the notes were payable on or
  before either 60 or 90 days from issuance. The $20,000 note is in default, and
  began accruing interest at 25% in July 2002. The terms of the $10,000 note were
  extended to December 31, 2002. The $4,000 value of the warrants on the $20,000
  note resulted in that note being issued at a discount which will be amortized
  over the life of the original note. A total of $2,000 was amortized against
  the discount and a total of $8,313 was accrued as interest on these notes at
  June 30, 2003.

NOTE 11  DEFERRED REVENUE FROM JOINT VENTURE

The Company has entered into revenue sharing agreements with
  five individuals surrounding the Companys International Long Distance
  (ILD) telecommunications operation which delivers long distance
  telephone service from wholesale telecommunication operators between the United
  States and India. The individuals advanced $175,000 against future revenues
  that would be generated by the ILD. The Company agreed to split the net profits
  of the IDL on a 50-50 basis during the first twelve months of ILD being in operation.
  Profits are defined as gross revenue from wholesalers less termination costs
  (the cost to terminate a telephone call in India charged by the India telephone
  company), less the Companys India partners share of 30% and other expenses
  that approximate $20,000 a month. The maximum amount that the investors were
  to realize was a 100% return on investment. These advances were booked for financial
  statement purposes as Deferred Revenue on the balance sheet of the Company as
  of June 30, 2003 and will be recognized as revenue by the Company over twelve
  months once successful operation has begun. The Company is still working with
  its Indian partners and expects revenues to begin in the first calendar quarter
  of 2004.

NOTE 12 - SUBSEQUENT EVENT

On October 1, 2003, the Company entered into a promissory
  note for monies received in the amount of $10,000. The note is due and payable
  on November 1, 2003 at the rate of 12% interest per month with an administrative
  fee of $1,400 for a total due of $11,500. The Company is currently in default
  of said note and is negotiating the payment terms.

18

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Item. 2 Managements Discussion and Analysis or Plan
  of Operation

THE FOLLOWING ANALYSIS OF THE RESULS OF OPERATIONS AND
  FINANCIAL CONDITION OF THE CORPORATION FOR THE PERIOD ENDING SEPTEMBER 30, 2003
  SHOULD BE READ IN CONJUNCTION WITH THE CORPORATION'S CONSOLIDATED FINANCIALS
  STATEMENTS, INCLUDING THE NOTES THERETO, CONTAINED ELSEWHERE IN THIS FORM 10-QSB.

Reward Enterprises, Inc. (the "Corporation" or Reward)
  was incorporated in December, 1997 as Sports Entertainment Productions Inc.
  to pursue opportunities around the world in the Internet based entertainment
  industry. The name was changed to Reward Enterprises, Inc. in July 1998. Its
  main objective was to develop a profitable "Entertainment Mall" through an e-commerce
  secure "portal." Entertainment options offered would be videos, CDs, virtual
  casino-style games, free bingo, dice and specialty and interactive video games.

In early 2001, the Corporation became aware that it would
  likely not be able to continue with its efforts to develop an Internet gaming
  site, primarily as a result of the poor financial conditions in the marketplace.
  The Board of Directors then commenced a search for a new opportunity that would
  allow the Corporation to remain active in the Internet sector on a profitable
  basis. Q Presents, Inc., a Santa Monica, California (hereinafter QP)
  based private corporation, provided an ideal match which on April 12, 2001 resulted
  in an Acquisition Agreement between Reward and QP. Subsequently, the new management
  made the decision to balance its technology-based business model with a complimentary
  non-technical or Old Economy based business. Management made the
  decision to license the rights to an Old Economy business as opposed
  to creating one internally. New management has recently entered into the specialized
  international communications market to provide international voice, Internet
  access and global network services to corporate clients, communication carriers
  and Internet service providers. The Company will utilize the web-based platform
  that was originally intended as an event registration and automation solution
  for its telecommunication business.

RESULTS OF OPERATIONS

There were no revenues in the quarter ending September 30,
  2003.

During the three months ending September 30, 2003, the Corporation
  incurred operating expenses of $79,890 compared to $64,185 for the three months
  ending September 30, 2002.

These expenses primarily consisted of general and administration
  costs of $12,734, amortization of $7,299, consulting of $56,250 and travel of
  $582.

The Corporation continues to carefully control its expenses,
  and has limited its debt outstanding as it moves forward with the implementation
  of its business plan. The Corporation has no employees at the present time and
  engages personnel through consulting agreements where necessary as well as outside
  attorneys, accountants and technical consultants. All previous consulting agreements
  have been terminated and there are no contingent liabilities resulting from
  this cancellation.

LIQUIDITY AND CAPITAL RESOURCES

The Corporation has to date, financed its development stage
  by the sale of common stock. At September 30, 2003, the Corporation had 18,722,000
  shares of common stock outstanding. During the period ended September 30, 2003,
  the Corporation did not issue any shares of its Common stock. The Company is
  overdrawn at the Bank of America in Los Angeles, California. The overdraft is
  included in Accounts Payable on the Balance Sheet for a total of $4,231.

On October 1, 2003, the Company entered into a promissory
  note for monies received in the amount of $10,000. The note is due and payable
  on November 1, 2003 at the rate of 12% interest per month with an administrative
  fee of $1,400 for a total due of $11,500.

The Corporation recognizes that it will continue to need additional
  cash during the next twelve months. There is no assurance that the Corporation
  will be able to obtain additional capital as required, or obtain the capital
  on terms and conditions acceptable to it.

---

The Corporation does not have sufficient cash to finance its
  operations at this stage of its development and is seeking additional financing
  on acceptable terms and conditions.

The Corporation has no current plans for research and development
  nor does the Corporation plan on retaining or hiring any additional employees
  or consultants. There are no plans by the Corporation to purchase or to sell
  any fixed assets.

INFLATION

Inflation has not been a factor during the three months ending
  September 30, 2003. While inflationary forces are moderately higher than in
  2002, the actual inflation is immaterial and is not considered a factor in any
  contemplated capital expenditure program.

Item 3. Controls and Procedures.

The Company's certifying officers 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 the Companys Chief Executive
  Officer and Chief Financial Officer have:

| | a) | designed such disclosure controls and procedures
        to ensure that material information relating to the registrant, including
        its consolidated subsidiaries, is made known to us by others within those
        entities, particularly during the period in which this quarterly report
        is being prepared;
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | b) | evaluated the effectiveness of the our disclosure
        controls and procedures as of a date within 90 days prior to the filing
        date of this quarterly report (the "Evaluation Date"); and                                                                                                                           
| | c) | presented in this quarterly report our conclusions
        about the effectiveness of the disclosure controls and procedures based
        on our evaluation as of the Evaluation Date.                                                                                                                                        

There have been no significant changes in our internal controls
  or in other factors that could significantly affect these controls subsequent
  to the date of their evaluation, including any corrective actions with regard
  to significant deficiencies and material weaknesses.

PART II  OTHER INFORMATION

Item 1. Legal Proceedings.

We know of no material, active or pending legal proceedings
  against our company, nor are we involved as a plaintiff in any material proceeding
  or pending litigation.

Item 2. Changes in Securities.

None

Item 3. Defaults Upon Senior Securities

Not Applicable

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

None

Item 5. Other Information.

None

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Item 6. Exhibits and Reports on Form 8-K.

Exhibits

|31.1 | Certification
      of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted
      Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.    
|---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     |                                                                                                                                                                   
|31.2 | Certification
        of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted
        Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|     |                                                                                                                                                                   
|32.1 | Certification
        of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted
        Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|     |                                                                                                                                                                   
|32.2 | Certification
        of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted
        Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

(b) Reports of Form 8-K.

Not Applicable.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act
  of 1934, the registrant caused this report to be signed on its behalf by the
  undersigned, thereunto duly authorized.

|                        | **Reward Enterprises, Inc****.**
|----------------------- | --------------------------------
|                        | (Registrant)                    
|                        |                                 
|Date: December 18, 2003 | By:                             
|                        |                                 
|                        |                                 
|                        |                                 
|                        |                                 
|                        |                                 
|Date: December 18, 2003 | By:                             
|                        |                                 
|                        |                                 
|                        |                                 

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