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

FORM 10QSB



|[X]   | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
      OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED DECEMBER
      31, 2002
|----- | ----------------------------------------------------------------------------------------------------------------------------------------------------
|      |                                                                                                                                                     
|      | OR                                                                                                                                                  
|      |                                                                                                                                                     
|[   ] | TRANSITION REPORT PURSUANT TO 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 registrant as specified in its charter)

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

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

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

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

Transitional Small Business Disclosure Format (Check one): Yes [  ]   No
  [X]



---

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

|                                                         |   | December 31, |   |   | June 30,  |  
|-------------------------------------------------------- | - | ------------ | - | - | --------- | -
|                                                         |   | 2002         |   |   | 2002      |  
|                                                         |   | (Unaudited)  |   |   |           |  
|ASSETS                                                   |   |              |   |   |           |  
|CURRENT
      ASSETS                                     |   |              |   |   |           |  
|Cash
      and cash equivalents                          | $ | 1,005        |   | $ | 24,717    |  
|Accounts
      receivable, related party                 |   | 26,000       |   |   | 26,000    |  
|                                                         |   |              |   |   |           |  
|TOTAL
      CURRENT ASSETS                               |   | 27,005       |   |   | 50,717    |  
|                                                         |   |              |   |   |           |  
|                                                         |   |              |   |   |           |  
|PROPERTY
      AND EQUIPMENT                             |   |              |   |   |           |  
|Website                                                  |   | 145,979      |   |   | 145,979   |  
|Telecommunications
      Equipment                       |   | 46,800       |   |   |           |  
|Accumulated
      depreciation and amortization          |   | (34,062      | ) |   | (19,464   | )
|                                                         |   |              |   |   |           |  
|TOTAL
      PROPERTY AND EQUIPMENT                       |   | 158,717      |   |   | 126,515   |  
|                                                         |   |              |   |   |           |  
|                                                         |   |              |   |   |           |  
|OTHER ASSETS                                             |   |              |   |   |           |  
|Goodwill                                                 |   | 2,100,000    |   |   | 2,100,000 |  
|                                                         |   |              |   |   |           |  
|                                                         |   |              |   |   |           |  
|TOTAL
      ASSETS                                       | $ | 2,285,722    |   | $ | 2,277,232 |  
|                                                         |   |              |   |   |           |  
|                                                         |   |              |   |   |           |  
|LIABILITIES & STOCKHOLDERS' EQUITY                       |   |              |   |   |           |  
|CURRENT
      LIABILITIES                                |   |              |   |   |           |  
|Accounts
      payable                                   | $ | 23,921       |   | $ | 15,064    |  
|Interest
      payable                                   |   | 3,714        |   |   | 690       |  
|Due
      to Joint Venture                               |   | 100,000      |   |   |           |  
|Notes
      payable                                      |   | 30,000       |   |   | 28,000    |  
|                                                         |   |              |   |   |           |  
|TOTAL
      CURRENT LIABILITIES                          |   | 157,635      |   |   | 43,754    |  
|                                                         |   |              |   |   |           |  
|                                                         |   |              |   |   |           |  
|COMMITMENTS
      AND CONTINGENCIES                      |   |              |   |   | -         |  
|                                                         |   |              |   |   |           |  
|                                                         |   |              |   |   |           |  
|STOCKHOLDERS'
      EQUITY                               |   |              |   |   |           |  
|Common
      stock, 200,000,000 shares authorized,       |   |              |   |   |           |  
|$0.001
      par value; 18,722,000 and 17,703,667 shares |   |              |   |   |           |  
|issued
      and outstanding, respectively               |   | 18,722       |   |   | 17,704    |  
|Additional
      paid-in capital                         |   | 2,937,593    |   |   | 2,892,861 |  
|Stock
      options                                      |   | 14,400       |   |   | 14,400    |  
|Accumulated
      deficit during development stage       |   | (842,628     | ) |   | (691,487  | )
|                                                         |   |              |   |   |           |  
|TOTAL
      STOCKHOLDERS' EQUITY                         |   | 2,128,087    |   |   | 2,233,478 |  
|                                                         |   |              |   |   |           |  
|                                                         |   |              |   |   |           |  
|TOTAL
      LIABILITIES AND                              |   |              |   |   |           |  
|STOCKHOLDERS'
      EQUITY                               | $ | 2,285,722    |   | $ | 2,277,232 |  
|                                                         |   |              |   |   |           |  

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

2

---

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

|                                               |   |              |   |   |              |   |   |              |   |   |              |   |   | December 12, |  
|---------------------------------------------- | - | ------------ | - | - | ------------ | - | - | ------------ | - | - | ------------ | - | - | ------------ | -
|                                               |   |              |   |   |              |   |   |              |   |   |              |   |   | 1997         |  
|                                               |   | Three Months |   |   | Three Months |   |   | Six Months   |   |   | Six Months   |   |   | (Inception)  |  
|                                               |   | Ended        |   |   | Ended        |   |   | Ended        |   |   | Ended        |   |   | Through      |  
|                                               |   | December 31, |   |   | December 31, |   |   | December 31, |   |   | December 31, |   |   | December 31, |  
|                                               |   | 2002         |   |   | 2001         |   |   | 2002         |   |   | 2001         |   |   | 2002         |  
|                                               |   | (Unaudited)  |   |   | (Unaudited)  |   |   | (Unaudited)  |   |   | (Unaudited)  |   |   | (Unaudited)  |  
|                                               |   |              |   |   |              |   |   |              |   |   |              |   |   |              |  
|                                               |   |              |   |   |              |   |   |              |   |   |              |   |   |              |  
|R E V E N U E S                                | $ | -            |   | $ | -            |   | $ | -            |   | $ | -            |   | $ | -            |  
|                                               |   |              |   |   |              |   |   |              |   |   |              |   |   |              |  
|                                               |   |              |   |   |              |   |   |              |   |   |              |   |   |              |  
|E X P E N S E S                                |   |              |   |   |              |   |   |              |   |   |              |   |   |              |  
|Consulting
      fees                          |   | -            |   |   | -            |   |   | -            |   |   | -            |   |   | 267,138      |  
|Compensation                                   |   | 34,000       |   |   | -            |   |   | 55,000       |   |   | -            |   |   | 55,000       |  
|General
      and administrative               |   | 30,945       |   |   | 34,847       |   |   | 50,380       |   |   | 48,885       |   |   | 134,075      |  
|Legal and
      professional fees              |   | 5,551        |   |   | 23,198       |   |   | 12,051       |   |   | 42,117       |   |   | 168,379      |  
|Travel
      and entertainment                 |   | 3,182        |   |   | -            |   |   | 11,383       |   |   | -            |   |   | 46,299       |  
|Depreciation
      and amortization            |   | 7,299        |   |   | 4,866        |   |   | 14,598       |   |   | 4,998        |   |   | 37,828       |  
|Research
      and development                 |   | 955          |   |   | 55,910       |   |   | 2,705        |   |   | 63,910       |   |   | 86,035       |  
|Loss on
      impairment of asset              |   | -            |   |   | -            |   |   | -            |   |   | -            |   |   | 65,160       |  
|                                               |   |              |   |   |              |   |   |              |   |   |              |   |   |              |  
|TOTAL
      OPERATING EXPENSES                 |   | 81,932       |   |   | 118,821      |   |   | 146,117      |   |   | 159,910      |   |   | 859,914      |  
|                                               |   |              |   |   |              |   |   |              |   |   |              |   |   |              |  
|                                               |   |              |   |   |              |   |   |              |   |   |              |   |   |              |  
|OTHER INCOME AND EXPENSE                       |   |              |   |   |              |   |   |              |   |   |              |   |   |              |  
|Interest
      expense                         |   | 1,512        |   |   | -            |   |   | 5,024        |   |   | -            |   |   | 7,714        |  
|Gain from
      debt forgiveness               |   | -            |   |   | -            |   |   | -            |   |   | -            |   |   | (25,000      | )
|                                               |   |              |   |   |              |   |   |              |   |   |              |   |   |              |  
|TOTAL
      OTHER EXPENSE                      |   | 1,512        |   |   | -            |   |   | 5,024        |   |   | -            |   |   | (17,286      | )
|                                               |   |              |   |   |              |   |   |              |   |   |              |   |   |              |  
|                                               |   |              |   |   |              |   |   |              |   |   |              |   |   |              |  
|LOSS BEFORE INCOME TAXES                       |   | (83,444      | ) |   | (118,821     | ) |   | (151,141     | ) |   | (159,910     | ) |   | (842,628     | )
|                                               |   |              |   |   |              |   |   |              |   |   |              |   |   |              |  
|PROVISION FOR TAXES                            |   | -            |   |   | -            |   |   | -            |   |   | -            |   |   | -            |  
|                                               |   |              |   |   |              |   |   |              |   |   |              |   |   |              |  
|                                               |   |              |   |   |              |   |   |              |   |   |              |   |   |              |  
|NET LOSS                                       | $ | (83,444      | ) | $ | (118,821     | ) | $ | (151,141     | ) | $ | (159,910     | ) | $ | (842,628     | )
|                                               |   |              |   |   |              |   |   |              |   |   |              |   |   |              |  
|                                               |   |              |   |   |              |   |   |              |   |   |              |   |   |              |  
|OTHER COMPREHENSIVE INCOME (LOSS)              |   |              |   |   |              |   |   |              |   |   |              |   |   |              |  
|Foreign
      currency translation gain (loss) |   | -            |   |   | -            |   |   | -            |   |   | -            |   |   |              |  
|                                               |   |              |   |   |              |   |   |              |   |   |              |   |   |              |  
|                                               |   |              |   |   |              |   |   |              |   |   |              |   |   |              |  
|COMPREHENSIVE LOSS                             | $ | (83,444      | ) | $ | (118,821     | ) | $ | (151,141     | ) |   | (159,910     | ) |   | (842,628     | )
|                                               |   |              |   |   |              |   |   |              |   |   |              |   |   |              |  
|                                               |   |              |   |   |              |   |   |              |   |   |              |   |   |              |  
|                                               |   |              |   |   |              |   |   |              |   |   |              |   |   |              |  
|BASIC AND DILUTED                              |   |              |   |   |              |   |   |              |   |   |              |   |   |              |  
|NET LOSS
      PER COMMON SHARE                | $ | nil          |   | $ | (0.01        | ) | $ | (0.01        | ) | $ | (0.01        | ) |   |              |  
|                                               |   |              |   |   |              |   |   |              |   |   |              |   |   |              |  
|                                               |   |              |   |   |              |   |   |              |   |   |              |   |   |              |  
|WEIGHTED AVERAGE NUMBER OF                     |   |              |   |   |              |   |   |              |   |   |              |   |   |              |  
|COMMON
      STOCK SHARES OUTSTANDING          |   | 18,690,132   |   |   | 12,828,340   |   |   | 18,281,035   |   |   | 13,949,170   |   |   |              |  
|                                               |   |              |   |   |              |   |   |              |   |   |              |   |   |              |  

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

3

---

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

|                                                                         |              |   |   |         |   |   |            |  |   |               |   |   |                |  |   |             |   |   |               |  
|------------------------------------------------------------------------ | ------------ | - | - | ------- | - | - | ---------- |  | - | ------------- | - | - | -------------- |  | - | ----------- | - | - | ------------- | -
|                                                                         | Common Stock |   |   |         |   |   |            |  |   | Stock         |   |   | Accumulated    |  |   |             |  
|                                                                         |              |   |   |         |   |   |            |  |   | Options       |   |   | Deficit During |  |   | Total       |  
|                                                                         | Number       |   |   |         |   |   | Additional |  |   | Subscriptions |   |   | and            |  |   | Development |   |   | Stockholders' |  
|                                                                         | of Shares    |   |   | Amount  |   |   | Paid-in    |  |   | Receivable    |   |   | Warrants       |  |   | Stage       |   |   | 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       |  
|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     | ) |   | 98,994        |  
|Payables provided for stock subscription                                 | -            |   |   | -       |   |   | -          |  |   | 10,000        |   |   | -              |  |   | -           |   |   | 10,000        |  
|Net loss for year ending June 30, 2000                                   | -            |   |   | -       |   |   | -          |  |   | -             |   |   | -              |  |   | (228,659    | ) |   | (228,659      | )
|                                                                         |              |   |   |         |   |   |            |  |   |               |   |   |                |  |   |             |   |   |               |  
|Balance, June 30, 2000                                                   | 2,715,000    |   |   | 2,715   |   |   | 178,785    |  |   | -             |   |   | -              |  |   | (301,165    | ) |   | (119,665      | )
|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       |  
|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    | ) |   | 145,384       |  
|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        |  
|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         |  
|Net loss for the period ended December 31,
      2002                    | -            |   |   | -       |   |   | -          |  |   | -             |   |   | -              |  |   | (151,141    | ) |   | (151,141      | )
|                                                                         |              |   |   |         |   |   |            |  |   |               |   |   |                |  |   |             |   |   |               |  
|Balance, December 31, 2002 (Unaudited)                                   | 18,722,000   |   | $ | 18,722  |   | $ | 2,937,593  |  | $ | -             |   | $ | 14,400         |  | $ | (842,628    | ) | $ | 2,128,087     |  
|                                                                         |              |   |   |         |   |   |            |  |   |               |   |   |                |  |   |             |   |   |               |  

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

4

---

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

|                                                       |   |              |   |   |              |   |   | December 12, |  
|------------------------------------------------------ | - | ------------ | - | - | ------------ | - | - | ------------ | -
|                                                       |   |              |   |   |              |   |   | 1997         |  
|                                                       |   | Six Month    |   |   | Six Month    |   |   | (Inception)  |  
|                                                       |   | Ended        |   |   | Ended        |   |   | Through      |  
|                                                       |   | December 31, |   |   | December 31, |   |   | December 31, |  
|                                                       |   | 2002         |   |   | 2001         |   |   | 2002         |  
|                                                       |   | (Unaudited)  |   |   | (Unaudited)  |   |   | (Unaudited)  |  
|                                                       |   |              |   |   |              |   |   |              |  
|                                                       |   |              |   |   |              |   |   |              |  
|CASH FLOWS FROM OPERATING ACTIVITIES:                  |   |              |   |   |              |   |   |              |  
|Net loss                                               | $ | (151,141     | ) | $ | (159,910     | ) | $ | (842,628     | )
|Adjustments
      to reconcile net loss                |   |              |   |   |              |   |   |              |  
|to
      net cash used by operating activities:        |   |              |   |   |              |   |   |              |  
|Depreciation
      and amortization                    |   | 14,598       |   |   | 4,998        |   |   | 37,696       |  
|Loss
      on impairment                               |   | -            |   |   | -            |   |   | 65,160       |  
|Gain
      on forgiveness of debt                      |   | -            |   |   | -            |   |   | (25,000      | )
|Services
      provided in exchange for stock          |   | 7,250        |   |   | -            |   |   | 31,975       |  
|Stock
      issued in exchange for payables            |   | -            |   |   | -            |   |   | 10,000       |  
|Stock
      options issued for compensation            |   | -            |   |   | 10,400       |   |   | 14,400       |  
|Expenses
      paid by loan from related party         |   |              |   |   | 6,000        |   |   | -            |  
|Discount
      on note payable                         |   | 2,000        |   |   | -            |   |   | -            |  
|Changes
      in assets and liabilities:               |   |              |   |   |              |   |   | -            |  
|Other
      assets                                     |   | -            |   |   | -            |   |   | (60,000      | )
|Accounts
      receivable, related party               |   | -            |   |   | -            |   |   | (26,000      | )
|Accounts
      payable                                 |   | 8,857        |   |   | 28,056       |   |   | 93,981       |  
|Accrued
      expenses                                 |   | 3,024        |   |   | -            |   |   | 158,714      |  
|Due
      to Joint Venture                             |   | 100,000      |   |   |              |   |   | 100,000      |  
|                                                       |   |              |   |   |              |   |   |              |  
|Net cash
      used by operating activities            |   | (15,412      | ) |   | (110,456     | ) |   | (441,702     | )
|                                                       |   |              |   |   |              |   |   |              |  
|                                                       |   |              |   |   |              |   |   |              |  
|CASH FLOWS FROM INVESTING ACTIVITIES:                  |   |              |   |   |              |   |   |              |  
|Changes
      to property and equipment                |   | (46,800      | ) |   | 1,059        |   |   | (55,726      | )
|Decrease
      (increase) in loans receivable          |   | -            |   |   | -            |   |   | (140,000     | )
|Cash from
      merger acquisition                     |   | -            |   |   | 4,094        |   |   | 9,093        |  
|                                                       |   |              |   |   |              |   |   |              |  
|Net cash
      provided (used) by investing activities |   | (46,800      | ) |   | 5,153        |   |   | (186,633     | )
|                                                       |   |              |   |   |              |   |   |              |  
|                                                       |   |              |   |   |              |   |   |              |  
|CASH FLOWS FROM FINANCING ACTIVITIES:                  |   |              |   |   |              |   |   |              |  
|Proceeds
      from related party loans                |   | -            |   |   | -            |   |   | 3,600        |  
|Payment
      on related party loans                   |   | -            |   |   | (1,500       | ) |   | (3,400       | )
|Proceeds
      from promissory notes                   |   | -            |   |   | -            |   |   | 30,000       |  
|Issuance
      of stock                                |   | 38,500       |   |   | 103,890      |   |   | 599,140      |  
|                                                       |   |              |   |   |              |   |   |              |  
|Net cash
      provided by financing activities        |   | 38,500       |   |   | 102,390      |   |   | 629,340      |  
|                                                       |   |              |   |   |              |   |   |              |  
|                                                       |   |              |   |   |              |   |   |              |  
|Net increase (decrease) in cash and cash equivalents   |   | (23,712      | ) |   | (2,913       | ) |   | 1,005        |  
|                                                       |   |              |   |   |              |   |   |              |  
|Cash and cash equivalents, beginning of period         |   | 24,717       |   |   | 5,448        |   |   | -            |  
|                                                       |   |              |   |   |              |   |   |              |  
|                                                       |   |              |   |   |              |   |   |              |  
|Cash and cash equivalents, end of period               | $ | 1,005        |   | $ | 2,535        |   | $ | 1,005        |  
|                                                       |   |              |   |   |              |   |   |              |  
|                                                       |   |              |   |   |              |   |   |              |  
|SUPPLEMENTAL CASH FLOW DISCLOSURES:                    |   |              |   |   |              |   |   |              |  
|Interest
      expense paid                            | $ | -            |   | $ | -            |   | $ | -            |  
|                                                       |   |              |   |   |              |   |   |              |  
|Income
      taxes paid                                | $ | -            |   | $ | -            |   | $ | -            |  
|                                                       |   |              |   |   |              |   |   |              |  
|                                                       |   |              |   |   |              |   |   |              |  
|NON-CASH INVESTING AND FINANCING TRANSACTIONS:         |   |              |   |   |              |   |   |              |  
|Services
      exchanged for common stock              | $ | 7,250        |   | $ | -            |   | $ |              |  
|Subscribed
      stock in exchange for payables        | $ | -            |   | $ | -            |   | $ |              |  
|Payables
      exchanged for shares of stock           | $ | -            |   | $ | -            |   | $ |              |  
|Stock issued
      in payment of loans payable         | $ | -            |   | $ | -            |   | $ |              |  
|Stock issued
      for accrued consulting fees         | $ | -            |   | $ | -            |   | $ |              |  
|Stock options
      issued for compensation            | $ | -            |   | $ | 10,400       |   | $ |              |  
|Stock issued
      for subsidiary                      | $ | -            |   | $ | 2,100,000    |   | $ |              |  
|Website
      acquired through merger                  | $ | -            |   | $ | -            |   | $ |              |  

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)
  December 31, 2002

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 Method 
  The Companys financial statements are prepared using the accrual method
  of accounting.

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
  pershare 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)
  December 31, 2002

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 $151,141 for the period ended December 31, 2002, 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 Equivalents 
  For 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.

Interim Financial Statements 
  The interim financial statements for the period ended December 31, 2002 included
  herein have not been audited, at the request of the Company. They reflect all
  adjustments, which are, in the opinion of management, necessary to present fairly
  the results of operations for the period. All such adjustments are normal recurring
  adjustments. The results of operations for the period presented is not necessarily
  indicative of the results to be expected for the full fiscal year.

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 December 31, 2002, the Company had net deferred tax assets
  of approximately $206,000 principally arising from net operating loss carryforwards
  for income tax purposes, and a $14,400 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 at December 31, 2002.

7

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REWARD ENTERPRISES, INC.
  Notes to the Consolidated Financial Statements (A Development Stage Company)
  December 31, 2002

NOTE 2  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Provision for Taxes (Continued) 
  At December 31, 2002, the Company has net operating loss carryforwards of approximately
  $823,000, which expire in the years through 2022.

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 new 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 and does not believe that the adoption will have a material
  impact on the financial statements of the Company at December 31, 2002.

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 December 31, 2002, the Company had not deemed any of its other assets
  to be impaired.

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. 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 $14,598 at December 31, 2002.

8

---

REWARD ENTERPRISES, INC.
  Notes to the Consolidated Financial Statements (A Development Stage Company)
  December 31, 2002

NOTE 2  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Derivative Instruments (Continued) 
  The Financial Accounting Standards Board issued Statement of Financial Accounting
  Standards (SFAS) No. 133, Accounting for Derivative Instruments
  and Hedging Activities, 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, which is effective for the
  Company as of January 1, 2001. These standards 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 consolidated
  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 December 31, 2002, 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.

Accounting Pronouncements 
  In June 2002, the Financial Accounting Standards Board (FASB) issued Statement
  of Financial Accounting Standards No. 146, Accounting for Costs Associated
  with Exit or Disposal Activities (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 and is 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.

9

---

REWARD ENTERPRISES, INC.
  Notes to the Consolidated Financial Statements (A Development Stage Company)
  December 31, 2002

NOTE 2  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Accounting Pronouncements (Continued) 
  In April 2002, the FASB issued SFAS No. 145, Rescission of FASB Statements
  No. 44, and 64, Amendment of FASB Statement No. 13, and Technical Corrections,
  which updates, clarifies and simplifies existing accounting pronouncements.
  FASB No. 44, 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 64, which amended
  FASB 44, was rescinded as it was no longer necessary. 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 that are similar to sale-leaseback transactions. Management
  has not yet determined the effects of adopting this Statement on the financial
  position or results of operations, except for the reclassification of debt forgiveness
  in the year ended June 30, 2001.

In October 2001, the FASB issued SFAS No. 143, Accounting
  for Asset Retirement Obligations (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.

In June 2001, the FASB issued SFAS No. 141, "Business Combinations"
  and SFAS No. 142, "Goodwill and Other Intangible Assets". SFAS No. 141 provides
  for the elimination of the pooling-of-interest 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. September 1, 2001, the Company adopted SFAS No. 142. Application of
  the nonamortization provision of SFAS No. 142 resulted in no change to reported
  earnings at December 31, 2002.

In September 2000, the FASB issued SFAS No. 140 Accounting
  for Transfers and Servicing of Financial Assets and Extinguishment of Liabilities.
  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.

10

---

REWARD ENTERPRISES, INC.
  Notes to the Consolidated Financial Statements (A Development Stage Company)
  December 31, 2002

NOTE 2  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Accounting Pronouncements (Continued) 
  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 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.

Reclassifications 
  Certain prior year amounts have been reclassified to conform to the fiscal 2002
  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.

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 | 
| |                                  |   |         | 

11

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REWARD ENTERPRISES, INC.
  Notes to the Consolidated Financial Statements (A Development Stage Company)
  December 31, 2002

NOTE 3  ACQUISITIONS (Continued)

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, 2002 it was determined the asset was not impaired.

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.

12

---

REWARD ENTERPRISES, INC.
  Notes to the Consolidated Financial Statements (A Development Stage Company)
  December 31, 2002

NOTE 6  COMMON STOCK (Continued)

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.

13

---

REWARD ENTERPRISES, INC.
  Notes to the Consolidated Financial Statements (A Development Stage Company)
  December 31, 2002

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.

14

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REWARD ENTERPRISES, INC.
  Notes to the Consolidated Financial Statements (A Development Stage Company)
  December 31, 2002

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.

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

|                                                |           |   |   | Weighted | 
|----------------------------------------------- | --------- | - | - | -------- | 
|                                                | Number    |   |   | Average  | 
|                                                | Of        |   |   | Exercise | 
|                                                | Shares    |   |   | Price    | 
|                                                |           |   |   |          | 
|Outstanding at 6-30-2001                        | 1,375,000 |   | $ | 0.18     | 
|Granted                                         | 1,400,000 |   |   | 0.06     | 
|Exercised                                       | (572,000  | ) |   | 0.20     | 
|Forfeited                                       | (400,000  | ) |   | 0.25     | 
|                                                |           |   |   |          | 
|Outstanding at 6-30-2002                        | 1,803,000 |   | $ | 0.10     | 
|                                                |           |   |   |          | 
|                                                |           |   |   |          | 
|Options exercisable at 6-30-2002                | 1,803,000 |   |   |          | 
|                                                |           |   |   |          | 
|                                                |           |   |   |          | 
|Weighted average fair value of options granted  |           |   |   |          | 
|during the year ended June
      30, 2002       |           |   | $ | 0.01     | 
|                                                |           |   |   |          | 
|                                                |           |   |   |          | 
|Outstanding at 6-30-2002                        | 1,803,000 |   | $ | 0.10     | 
|Granted                                         | -         |   |   | -        | 
|Exercised                                       | -         |   |   | -        | 
|Forfeited                                       | -         |   |   | -        | 
|                                                |           |   |   |          | 
|Outstanding at 12-31-2002                       | 1,803,000 |   | $ | 0.10     | 
|                                                |           |   |   |          | 
|                                                |           |   |   |          | 
|Options exercisable at 12-31-2002               | 1,803,000 |   |   |          | 
|                                                |           |   |   |          | 
|                                                |           |   |   |          | 
|Weighted average fair value of options granted  |           |   |   |          | 
|during the period ended December
      31, 2002 |           |   |   | -        | 
|                                                |           |   |   |          | 

15

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REWARD ENTERPRISES, INC.
  Notes to the Consolidated Financial Statements (A Development Stage Company)
  December 31, 2002

NOTE 8  RELATED PARTIES

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.

During the year ended June 30, 2002, the Company extended
  salary advances to officers for a total of $26,000. The Company has yet to finalize
  compensation agreements with its officers, but has plans to do so in the very
  near future. In the period ended December 31, 2002, the Company paid two of
  its officers a total of $55,000 in compensation

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 December 31, 2002, 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 December 31, 2002, the Company has not paid
  any of the retainer, and has not received any funding from the issuance of the
  aforementioned promissory note.

16

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REWARD ENTERPRISES, INC.
  Notes to the Consolidated Financial Statements (A Development Stage Company)
  December 31, 2002

NOTE 10  LOANS PAYABLE

The Company issued two convertible promissory notes for a
  total of $30,000 in May 2002. Both notes bear interest at 20%. Both 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 $3,024 was accrued as interest
  on these notes at December 31, 2002.









17

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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 DECEMBER 31, 2002
  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 has been 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.

On June 15, 1999, Reward Nevis Group Inc., a wholly owned
  subsidiary of the Corporation entered into a non-exclusive software license
  agreement with Chartwell Technologies Inc, of Laguna Hills, California to acquire
  and develop all software necessary to conduct the Internet gaming activity and
  to handle all Internet cash transactions. This software is customized and is
  a full service gaming system that includes twelve casino games, a back-end administrative
  utility with remote access, I.P. Tracking, e-Commerce software and technical
  support. The license is non-exclusive and is currently licensed to others. The
  Corporation is restricted in the use of this technology and cannot sublicense
  it to others. It is for a period of two years and has provision for renewal
  for an additional two years. The royalty payable is 15% of gross revenues generated.
  Pursuant to the agreement, $30,000 has been paid to Chartwell to date for the
  license, $8,000 for the server from which to operate the software and the virtual
  casino and $5,000 in the creative development of the CasinoReward.com Web site.

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. In exchange for all the shares
  of QP, Reward would issue to QP shareholders a total of 6,000,000 shares of
  its common stock. Immediately following the issuance of the acquisition shares,
  the control block of 10,200,000 common stock shares owned by Mr. Robert Dinning
  and Mr. Brian Doutaz would be cancelled. The Acquisition Agreement was approved
  by the shareholders of both companies in August, 2001. The control block of
  10,200,000 owned by Mr. Robert Dinning and Mr. Brian Doutaz was subsequently
  cancelled and the Corporation issued 6,000,000 shares to QP shareholders. The
  Companys definitive proxy statement filed with the SEC on August 8, 2001
  and its Form 8-K filed with the SEC on August 20, 2001 are incorporated herein
  by reference.

18

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Q Presents, Inc. is a California corporation targeting the
  hotel and conference segment of the Event Automation industry. Q Presents, Inc.
  is in its launching stage and intends to provide localized and web based custom
  event registration and automation solutions to the high growth Event Automation
  market.

In conjunction with the Acquisition Agreement, the Corporation
  negotiated a cancellation of its Software License Agreement with Chartwell that
  included forgiveness of all debt owing to Chartwell and the elimination of any
  outstanding debt on the Balance Sheet. As part of the cancellation of the Agreement
  with Chartwell, the Corporation also turned over sundry computer equipment.

Mr. Edward W Withrow III, Mr. Warren K Withrow and Mr. Ron
  Hall were appointed as Directors of Reward Enterprises, Inc. Mr. Edward W. Withrow
  III was appointed as President and Co-Chief Executive Officer and Mr. Warren
  K. Withrow was appointed as Treasurer and Co-Chief Executive Officer.

In September 2001, the Board authorized the Corporation to
  enter into Consulting Agreements with both Mr. Edward W. Withrow III and Mr.
  Warren K. Withrow. The proposed Consulting Agreements called for terms of sixty
  (60) months, compensation of $3,500.00 USD monthly and the issuance of two options
  to purchase the aggregate of 700,000 shares of the Corporations common
  stock, respectively. The compensation under these agreements have been changed
  to $10,000 per month, but will not become effective and payable until April
  2002. The compensation under these agreements are currently being renegotiated.
  On May 16, 2002 Mr. Warren K. Withrow resigned as an officer and as a director
  of the Company. On July 1, 2002 Mr. Joseph Vigliarolo joined the Company as
  President and Chief Financial Officer respectively.

The Corporations 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 December 31,
  2002.

During the quarter ending December 31, 2002, the Corporation
  incurred operating expenses of $83,444 compared to $118,821 for the quarter
  ending December 31, 2001.

19

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These expenses primarily consisted of professional fees of
  $5,551, office and administration costs of $30,945, amortization of $7,299,
  compensation of $34,000, travel of $3,182 and Research and Development of $955..

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 December 31, 2002, the Corporation had 18,722,000
  shares of common stock outstanding. During the period ended December 31, 2002,
  the Corporation issued 293,333 shares for $38,500. Cash on hand at December
  31, 2002 was $1,005, which is held at the Bank of America in Los Angeles, California.

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 six months ending
  December 31, 2002. While inflationary forces are moderately higher than in 2001,
  the actual inflation is immaterial and is not considered a factor in any contemplated
  capital expenditure program.

PART II  OTHER INFORMATION

Changes in Securities and Use of Proceeds

The Corporation had 18,722,000 shares of common stock issued
  and outstanding as of December 31, 2002. Of these shares approximately 9,835,000
  can only be resold in compliance with Rule 144 limitations, adopted under the
  Securities Act of 1933 (the Securities Act).

20

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In General, under Rule 144, a person who has beneficially
  owned shares privately acquired directly or indirectly from us or from one of
  our affiliates, for at least one year, or who is an affiliate, is entitled to
  sell, within any three-month period, a number of shares that do not exceed the
  greater of 1% of the then outstanding shares or the average weekly trading volume
  in our shares during the four calendar weeks immediately preceding such sale.
  Sales under Rule 144 are also subject to certain manner of sale provisions,
  notice requirements and the availability of current public information about
  us. A person who is not deemed to have been an affiliate at any time during
  the 90 days preceding the sale, and who has beneficially owned restricted shares
  for at least two years, is entitled to sell all such shares under Rule 144 without
  regard to the volume limitations, current public information requirements, manner
  of sale provisions or notice requirements.

The issuances discussed under this section are exempted from
  registration under Rule 504 of the Securities Act (Rule 504) or
  Section 4 (2) of the Securities Act (Section 4 (2)), as provided.
  All purchasers of the following securities acquired the shares for investment
  purposes only and all stock certificates reflect the appropriate legends. No
  underwriters were involved in connection with the sale of securities referred
  to in this section.

Common Stock

In the three-month period ending December 31, 2002, the Corporation
  issued 725,000 shares of common stock at a value of $7,250 for services pursuant
  to Section 4 (2) to five individuals.

Options

No options were granted during the three month period ending December 31,2002

Item 6.

Exhibits and Reports on Form 8-K

The following reports on Form 8-K were filed during the quarter ended December 31, 2002:

NONE

|99.1 | 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.
|99.2 | 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.

21

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|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: February 12, 2003                                                                                                                                                                         






22

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CERTIFICATIONS

I, Edward Withrow III, certify that:

|1.   I have reviewed this quarterly report
        on Form 10-QSB of Reward Enterprises Inc.;                                                                                                                                                                                                                                                                              
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|2.   Based on my knowledge, this quarterly report does
          not contain any untrue statement of a material fact or omit to state
          a material fact necessary to make the statements made, in light of the
          circumstances under which such statements were made, not misleading
          with respect to the period covered by this quarterly report;
|3.   Based on my knowledge, the financial statements,
          and other financial information included in this quarterly report, fairly
          present in all material respects the financial condition, results of
          operations and cash flows of the registrant as of, and for, the periods
          presented in this quarterly report;                   
|4.    The registrant's other certifying
        officer 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 we 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 registrant's 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;                                                                                                                                        

5.    The registrant's other certifying
  officer 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 function):

| | 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                                                                                                                                                        

23

---

6.    The registrant's other certifying
  officer and I have indicated in this quarterly report whether or not there were
  significant changes in internal controls or 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: February 12, 2003



/s/ Edward Withrow III
    Edward Withrow III, CEO


24

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CERTIFICATIONS

I, Joseph Vigliarolo, certify that:

|1.   I have reviewed this quarterly report
        on Form 10-QSB of Reward Enterprises Inc.;                                                                                                                                                                                                                                                                              
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|2.   Based on my knowledge, this quarterly report does
          not contain any untrue statement of a material fact or omit to state
          a material fact necessary to make the statements made, in light of the
          circumstances under which such statements were made, not misleading
          with respect to the period covered by this quarterly report;
|3.   Based on my knowledge, the financial statements,
          and other financial information included in this quarterly report, fairly
          present in all material respects the financial condition, results of
          operations and cash flows of the registrant as of, and for, the periods
          presented in this quarterly report;                   
|4.    The registrant's other certifying
        officer 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 we 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 registrant's 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;                                                                                                                                        

5.    The registrant's other certifying
  officer 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 function):

| | 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                                                                                                                                                        



25

---



6.    The registrant's other certifying
  officer and I have indicated in this quarterly report whether or not there were
  significant changes in internal controls or 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: February 12, 2003



/s/ Joseph Vigliarolo 
    Joseph Vigliarolo, CFO


26

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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

In connection
  with the Quarterly Report of Reward Enterprises Inc. (the Company)
  on Form 10-QSB for the quarter ended December 31, 2002, as filed with the Securities
  and xchange Commission on the date hereof (the Periodic Report),
  I, Edward Withrow III, Chief Executive Officer of the Company, certify, pursuant
  to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
  Act of 2002, that:

| | 1 | . | the Periodic Report fully complies with
        the requirements of Section 13(a) or 15(d) of the Securities Exchange
        Act of 1934; and                               
| | - | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |   |                                                                                                                                                                              
| | 2 | . | the information contained in the Periodic
        Report fairly presents, in all material respects, the financial condition
        and results of operations of the Company.



|Dated:   February 12, 2003 | /s/ Edward W. Withrow
        III
|-------------------------- | ---------------------------------
|                           | CEO                              





27

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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

In connection
  with the Quarterly Report of Reward Enterprises Inc. (the Company)
  on Form 10-QSB for the quarter ended December 31, 2002, as filed with the Securities
  and Exchange Commission on the date hereof (the Periodic Report),
  I, Joseph Vigliarolo, Chief Financial Officer of the Company, certify, pursuant
  to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
  Act of 2002, that:

| | 1 | . | the Periodic Report fully complies with
        the requirements of Section 13(a) or 15(d) of the Securities Exchange
        Act of 1934; and                               
| | - | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |   |                                                                                                                                                                              
| | 2 | . | the information contained in the Periodic
        Report fairly presents, in all material respects, the financial condition
        and results of operations of the Company.

|Dated:  February 12, 2003 | /s/ Joseph Vigliarolo
|------------------------- | ---------------------
|                          | CFO                  





28

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