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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION  FORM 10-KSB   
 
 
   SIMEX TECHNOLOGIES, INC.  DELAWARE
    
    58-2465647(State of Incorporation)
    
    (I.R.S. Employer Identification Number)
 4940 Peachtree Industrial Blvd., Suite 360
Norcross, Georgia 30071
(Address of principal executive offices and zip code)
Issuers telephone number: (770) 447-9373
Securities registered pursuant to Section 12(b) of the Act: Title of each class
    
    Name of each exchange on which registeredCommon Stock, $.001 par value
    
    N/A
 Securities registered pursuant to Section 12(g) of the Act: None 
 Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the Company was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days. Yes [X] No
[  ] Check if there is no disclosure of delinquent filers in response to Item
405 of Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of Companys knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10KSB
or any amendment to this Form 10-KSB. [  ] The Issuers revenues for the fiscal year ended December 31, 2003 were
$53,773. The aggregate market value of the voting stock held by non-affiliates
computed by reference to the price at which the stock was sold, or the average
bid and asked price of such stock, as of March 10, 2004 was approximately
$5,105,000. As of March 10, 2004, there were 33,340,303 shares of common stock, par value
$.001 per share, outstanding. The index to exhibits appears on page 18 of this document.    None Transitional small business disclosure format: Yes [   ] No [ X ] 1




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SIMEX TECHNOLOGIES, INC. FORM 10-KSB
For the Year Ended December 31, 2003 Table of Contents PagePART IItem 1.
    
    Description of Business
    
    
    3Item 2.
    
    Description of Property
    
    
    6Item 3.
    
    Legal Proceedings
    
    
    6Item 4.
    
    Submission of Matters to a Vote of Securities Holders
    
    
    6PART IIItem 5.
    
    Market for Registrants Common Equity and Related Stockholder Matters
    
    
    7Item 6.
    
    Managements Discussion and Analysis or Plan of Operation
    
    
    7Item 7.
    
    Financial Statements
    
    
    12Item 8.
    
    Changes in and Disagreements with Accountants on Accounting and Financial Disclosures
    
    
    12Item 8A
    
    Controls and Procedures
    
    
    13PART IIIItem 9.
    
    Directors, Executive Officers, Promoters and Control Persons; Compliance with Section 16(a) of the Exchange Act
    
    
    13Item 10.
    
    Executive Compensation
    
    
    14Item 11.
    
    Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
    
    
    15Item 12.
    
    Certain Relationships and Related Transactions
    
    
    17Item 13.
    
    Exhibits and Reports on Form 8-K
    
    
    18Item 14.
    
    Principal Accountant Fees and Services
    
    
    20SIGNATURES
    
    
    
    
    34EX-21.1 LIST OF COMPANY'S SUBSIDIARIESEX-31.1 SECTION 302 CERTIFICATION OF THE CEOEX-31.2 SECTION 302 CERTIFICATION OF THE CFOEX-32.1 SECTION 906 CERTIFICATION OF THE CEOEX-32.2 SECTION 906 CERTIFICATION OF THE CFOEX-99.2 CAUTIONARY STATEMENTEX-99.3 AUDIT COMMITTEE CHARTER
 2




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PART I 
 Item 1. Description of Business. SIMEX Technologies, Inc., a Delaware corporation together with its
subsidiaries, is referred to herein as the Company. Some of the information in this report may contain forward-looking statements.
These statements can be identified by the use of forward-looking terminology
such as may, will, expect, anticipate, estimate, continue or
similar words. These statements discuss future expectations, contain
projections of results of operations or of financial condition or state other
forward-looking information. Important factors that could cause actual
results to differ materially from those discussed in such forward-looking
statements (Cautionary Statements) include: the general strength or weakness
of the Companys products, the industry, and the pricing policies of
competitors. All subsequent written and oral forward-looking statements
attributable to the Company or persons acting on behalf of the Company are
expressly qualified in their entirety by such Cautionary Statements. All amounts throughout this Form 10-KSB are expressed in U.S. dollars unless
otherwise indicated. Business Development The Companys predecessor corporation was originally organized in 1983 with
limited operations until its reorganization with SIMEX A/S, a Norwegian
corporation, on April 28, 1998. SIMEX A/S began operations in 1980 as an
engineering and service company based in Stavanger, Norway. Under the terms of
the reorganization, the principal shareholders of SIMEX A/S became the majority
shareholders of the Company, and SIMEX A/S became a wholly-owned subsidiary of
the Company. Substantially all of the Companys revenues were derived from the
operations of SIMEX A/S until its sale by the Company on August 2, 2002. In April of 1999, the Company reincorporated as a Delaware corporation and
changed its name to SIMEX Technologies, Inc. In July of 1999, the Company filed
its Registration Statement on Form 10-SB. During the year ended December 31, 2000, the Company decided to sell certain
operations, which represented the Companys maintenance and service segment.
This was done, at the time, to allow the Company to focus on its core business,
the design, engineering, fabrication, production and installation of commercial
projects for the oil and gas industry. On May 15, 2002, the Company entered into a binding agreement to sell its
Norwegian subsidiary. The agreement was approved by a unanimous vote of the
Companys Board of Directors. On July 12, 2002, the Company mailed to
shareholders and filed with the SEC a definitive Form 14C which acknowledged
that holders of a majority of the Companys outstanding common stock had
already agreed to vote in favor of the sale. The sale closed on August 2, 2002.
Due to these circumstances, operating results of the Companys Norwegian
subsidiary are reported in this Form 10-KSB as discontinued operations. During the quarter ended September 30, 2002, the Company made a decision to
sell its wholly owned subsidiary, Simex Capital, Inc., which included the
Companys equipment leasing operation. The sale was approved by a unanimous
vote of the Companys Board of Directors. The sale closed on November 13, 2002.
Due to these circumstances, operating results of the Companys equipment
leasing operation are reported in this Form 10-KSB as discontinued operations. The Companys current operations consist of the operations of its wholly-owned
subsidiary, Remote Business, Inc., and its wholly owned subsidiary, SIMEX
Digital Solutions, Inc., as described in the section entitled Business of
Company. Acquisitions The Company embarked on an acquisition plan in 1998 designed, at the time, to
develop additional technical capabilities and products to supplement its
traditional areas of expertise. Through acquisitions in the steel fabrication,
HVAC design and installation and cooling products industries in Norway, the
Company was able to assemble additional production and service capabilities,
merge them into its operating structure and facilities to insure quality and
efficiency, and began developing markets for these products and services. Principal acquisitions during 1998 were based on the Companys objective of
augmenting its product and service capabilities in the Norwegian/North Sea
region with a plan to expand its existing markets for these products and
services in Norway and the North Sea. Principal among the 1998 acquisitions
were the following: 3




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On July 2, 2001, the Company purchased all of the assets of Bryne Elektriske, a
Norwegian corporation located in Stavanger, Norway that performed commercial
and industrial construction work. The primary purpose of the acquisition was to
give the Company additional work force and coverage needed to fulfill growth
projections in the North Sea gas and oil industry as well as in the commercial
and industrial sector. The purchase price of $3,231,000 was paid with $317,000
in cash at closing, a note for $185,000, which matured and was paid on
September 1, 2001 and 2,872,000 shares of the Companys common stock. Included
in the purchase price was $319,000 deemed to be compensation for certain key
employees and was amortized ratably over the 12-month term of the employment
agreements. Goodwill resulting from the acquisition amounted to $2,751,000 was
deemed appropriate, at the time, to accomplish growth projections in the North
Sea gas and oil industry. None of the goodwill was expected to be deductible
for tax purposes. On August 2, 2001, the Company purchased all of the assets of Vendor Leasing
Financial Services, Inc., (Vendor Leasing) a U.S. corporation located in
Alpharetta, Georgia, that provided commercial equipment leasing and financing
services. The primary purpose of the acquisition was to offer financing of oil
and gas related equipment in both the American and International sectors. The
purchase price of $600,000 included $100,000 cash paid at closing, 500,000
shares of the Companys common stock. A future cash payment of $110,000 was to
be paid provided certain performance targets were achieved. The number of
shares given to seller was subject to change based on the number of shares of
the Companys common stock required to provide the seller with $500,000 of the
Companys stock 18 months after the closing date of the acquisition. However,
the Company could, at its option, choose to make up any loss of value in cash
rather than shares of its common stock, to achieve the required $500,000 of
consideration. As a result of the sale of the Companys Simex Capital
subsidiary, which included Vendor Leasing, on November 13, 2002, the
requirement to make up this loss of value was cancelled along with the cash
payment related to meeting performance targets. Goodwill resulting from the
acquisition amounted to $628,000 and was deemed appropriate, at the time, to
provide the Company with the ability to offer financing of oil and gas related
equipment in both the American and International sectors. None of the goodwill
was expected to be deductible for tax purposes. On October 10, 2001, the Company purchased all of the assets of Hellevicks, a
Norwegian corporation located in Stavanger, Norway, that performed commercial
roofing construction work. The primary purpose of the acquisition was to
fulfill growth projections in the commercial and industrial sector. The
purchase price of $230,000 was paid with $50,000 cash at closing plus 200,000
shares of the Companys common stock, which were issued from treasury shares
received by the Company from the sale of its 51% interest in Unitron. Effective as of May 20, 2003, the Company completed a merger subject to certain
terms to be complied with after May 20, 2003, under which it acquired all of
the outstanding stock of Probity Investigations, Inc. (Probity) and
correspondingly ownership of Probitys wholly owned subsidiaries, Kyros, LLC
(Kyros) and Remote Business Management, LLC (RBM). Under the terms of the
reverse acquisition, a share exchange transaction occurred with the
shareholders of Probity, which resulted in a change in the control of the
ownership of Simex, with the shareholders of Probity becoming the controlling
group. On September 18, 2003, Simex executed a Mutual Rescission Agreement (the
Rescission Agreement) whereby it agreed with the Probity Shareholders to
mutually rescind the May 20, 2003 reverse acquisition of Probity and return all
parties to there respective positions as they existed prior to May 20, 2003.
The basis for the Rescission Agreement was that Probity had not fulfilled all
of its requirements under the May 20, 2003, reverse acquisition agreement. As a
result of the Rescission Agreement, the financial presentation in this Form
10-KSB for the year ended December 31, 2003, does not include the balance sheet
positions of Probity as of December 31, 2003 or the operating results of
Probity for any period presented in this Form 10-KSB. For financial statement
presentation, the May 20, 2003, reverse acquisition agreement is treated as if
it were not executed. On December 5, 2003, the Company acquired Remote Business, Inc. (RBI), a
newly-formed subsidiary of Probity Investigations, Inc. (Probity), in
exchange for 16,000,000 newly-issued shares of the Companys common stock.
Immediately prior to the acquisition, Probity transferred security equipment
inventory with a fair value of $550,000 and the operations of its subsidiary,
RBM, excluding all recorded assets and
liabilities of RBM, to RBI. The acquisition will be accounted for as a
purchase. Because the Company was a non-operating company at the time of the
transaction and the common shares of the Company are thinly-traded, the
purchase price was deemed to be the fair value of the assets acquired.
Accordingly, no goodwill was recorded in the acquisition. The Company
previously reported that Hyung Tae-Kim and Kyu Hung Jang were elected to the
Board of Directors in connection with this acquisition. Although Probity
agreed to vote its shares to cause such an election to occur, such election has
not occurred to date, and Messrs. Kim and Jang are not members of the Board of
Directors as of the date of this report. 4




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Divestitures On January 1, 2002, the Company sold its interests in Vest Norge Doors A/S to
two Company employees. The Companys interest was sold for $88,000 cash paid at
closing and a loss was recognized. On May 15, 2002, the Company entered into a binding agreement to sell its
Norwegian subsidiary to Jostein Tjelta, a Norwegian businessman. The agreement
was approved by a unanimous vote of the Companys Board of Directors. Under the
terms of the agreement, the Company received $1,500,000 in cash for all the
common shares of its Norwegian subsidiary and agreed to cancel certain
inter-company indebtedness due to the Company from its Norwegian subsidiary.
The $1,500,000 was received by the Company and escrowed on May 16, 2002. On
July 12, 2002, the Company mailed to shareholders and filed with the SEC a
definitive Form 14C which acknowledged that holders of a majority of the
Companys outstanding common stock had already agreed to vote in favor of the
sale. The sale closed on August 2, 2002 and the funds were released to the
Company from the escrow account. Due to these circumstances, operating results
of the Companys Norwegian subsidiary are reported in this Form 10-KSB as
discontinued operations. During the quarter ended September 30, 2002, the Company made a decision to
sell its wholly owned subsidiary, Simex Capital, Inc., which included the
Companys equipment leasing operation. The proposed sale was approved by a
unanimous vote of the Companys Board of Directors. Under the terms of the
proposed sale, the Company received 150,000 shares of the Companys common
stock, a nominal cash amount and agreed to cancel certain intercompany
indebtedness for all the common shares of Simex Capital, Inc. The sale closed
on November 13, 2002. Due to these circumstances, operating results of the
Companys equipment leasing operation are reported in this Form 10-KSB as
discontinued operations. Business of Company Remote Business, Inc., a wholly-owned subsidiary of the Company is engaged in
the design, installation, servicing and monitoring of digital surveillance
security systems for business and industry. The accompanying financial
statements include the accounts of RBI since its formation on December 5, 2003
and the assets, liabilities, revenues and expenses applicable to the business.
The acquisition of RBI included the business of its predecessor, RBM, which has
operated for the past two years. Most of the customers of RBI are small to
medium-sized businesses located in the southeastern U.S. The largest customer
is a restaurant franchise chain headquartered in the southeast and constituted
approximately 50% of the business of RBI and its predecessor, RBM, during the
year ended December 31, 2003. The business with this chain was contracted with
each individual franchisee and not with the franchisor. The balance of the
business was spread across a number of customers. RBM generally provides the design and installation of security systems to meet
its customers requirements. Most of the work is new systems, but on occasion
old systems are upgraded with new equipment. In some instances RBI is engaged
to do alarm monitoring. These monitoring contracts are, at present, fulfilled
by third-party monitoring companies. There are many smaller and larger firms engaged in the design and installation
of digital security systems. The largest national firm is ADT Security Services,
Inc. The smaller firms purchase equipment manufactured by such firms as Sony, Panasonic and Samsung, and install for local customers. RBI can
purchase the same equipment, but uses the products of Wooju Communications Co.,
Ltd. whenever possible. Effective January 16, 2004, a wholly-owned subsidiary of the Company, Simex
Digital Solutions, Inc. (Simex Digital) entered into a marketing agreement
with Structured Data Systems, Inc. (SDS), a Georgia corporation. SDS is a
value-added reseller of computer hardware and software. Under the marketing
agreement, Simex Digital markets the products sold by SDS. Industry Background Prior to its acquisition by Simex, the business of Remote Business, Inc. was
operated by Remote Business Management, LLC, and its parent company Probity
Investigations, LLC, a provider of private investigation services to business
and industry. The business was founded in April, 2002 to provide surveillance
equipment and service to Probitys investigation service customers. Products and Services Through its subsidiary, Remote Business, Inc., the Company is engaged in the
design, sales, installation and service of digital surveillance security
systems for business and industry. 5




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Competition The Companys competitors in the digital surveillance systems industry consist
mainly of local dealers and integrators. Since the barriers to entry into the
Companys markets are relatively low, we experience significant competition for
sales and service opportunities. Raw Material Availability and Suppliers The Company expects to have multiple sources of supply for substantially all of
its material requirements. The raw materials and various purchased components
required for its products have generally been available in sufficient
quantities. The Companys principal supplier of digital video recording
products is Wooju Communications Co., Ltd. Government Regulation The Company is subject to laws and regulations concerning the environment and
occupational safety the United States and local government areas in which its
corporate office is located. Research and Development Expenditures The Company incurred no Research and Development Expenditures in the reporting
period. Cost and Effect of Environmental Regulations The Company must comply with United States laws concerning the environment. Due
to the nature of its business, costs of compliance with such regulations are
minimal. Employees As of December 31, 2003, the Company and its Subsidiaries had ten employees. Managements Plans On December 23, 2003, the Company announced that it had entered into a Letter
of Intent for the acquisition of Wooju Communications Company, Ltd. (Wooju)
of Incheon, Korea. The Letter of Intent was amended in February 2004, and a
definitive agreement was distributed to the parties. As of the date of this
report, the Letter of Intent, as amended, has expired and no definitive
agreement has been executed; however, the parties continue to have discussions
and negotiations on an acquisition transaction. Wooju, a KOSDAQ listed
company, is one of Koreas leading manufacturers of specialized security
equipment and systems. Its principal products include digital video recorders,
video door-phones, closed-circuit TV monitors and surveillance cameras.
Woojus key technological competency lies in integration of advanced digital
and web-based wireless technology into existing analog surveillance structures.
Woojus products offer integration and versatility through customized
solutions for homes and small businesses, parking lots, airports, financial
institutions and other public spaces with surveillance and security needs.
Wooju supplies its products globally to more than 70 countries through a
distribution network of approximately 160 institutional purchasers. Wooju
operates through four business divisions (administration, research and
development, technical engineering, and sales and marketing) and maintains a
research institute. Wooju has a manufacturing facility in Qindao, the Peoples
Republic of China. In addition, Wooju has nine registered patents, including
three utility patents. 
 Item 2. Description of Property. The Companys executive offices are located in Norcross, Georgia (metro
Atlanta) consisting of approximately 1,000 square feet of leased space, on a
month-to-month lease. 
 Item 3. Legal Proceedings As of the date of this report, the Companys is not involved in any legal
proceedings. 
 Item 4. Submission of Matters to a Vote of Securities Holders During the quarter ended December 31, 2003, there were no matters submitted to
a vote of security holders. 6




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PART II 
 Item 5. Market for Registrants Common Equity and Related Stockholder
Matters Our common stock is registered with the Securities and Exchange Commission
(SEC) and was quoted on the over the counter bulletin board under the symbol
SMXT until September 24, 2003. The Company did not file its June 30, 2003 Form
10-QSB by the required extended filing date of August 19, 2003. As a result,
the Company became delinquent, and had 30 days to file its Form 10-QSB for the
period ended June 30, 2003 or the Company would be ineligible for quotation on
the over-the-counter bulletin board. The Company filed its Form 10-QSB on
September 23, 2003, however, the quarterly report was not reviewed by the
Companys Certified Public Accountants. Therefore, the Company failed to meet
its reporting requirements and the Company became ineligible for quotation on
the over-the-counter bulletin board on September 24, 2003. There was no
disagreement with the Companys Certified Public Accountants, which prevented
their review. Their review was not performed because the Company did not
provide them with a timely accounting of transactions involving the reverse
acquisition with Probity Investigations, Inc., which occurred on May 20, 2003
and the subsequent rescission of the reverse acquisition, which was executed on
September 18, 2003. An amended Form 10-QSB for the quarter ended June 30, 2003
was filed on October 17, 2003. The Company has subsequently filed its remaining
required Forms 10-QSB and current reports on form 8-K, and is proceeding toward
reinstatement of quotation on OTCBB. The following is the range of high and low bid information for each quarter for
the two (2) years ended December 31, 2003 and 2002: YEAR ENDED
    
    YEAR ENDEDDECEMBER 31, 2003
    
    DECEMBER 31, 2002QUARTER
    
    HIGH
    
    LOW
    
    HIGH
    
    LOWFirst
    
    $
    0.20
    
    
    
    0.05
    
    
    $
    0.20
    
    
    
    0.10Second
    
    
    0.70
    
    
    
    0.20
    
    
    
    0.45
    
    
    
    0.13Third
    
    
    0.60
    
    
    
    0.25
    
    
    
    0.30
    
    
    
    0.05Fourth
    
    
    0.52
    
    
    
    0.10
    
    
    
    0.20
    
    
    
    0.05
 The quotation reflects inter-dealer prices without retail mark-up, mark-down or
commissions and may not represent actual transactions. The approximate number of holders of the common stock of Company is 200 as of
December 31, 2003. The Company has not paid any dividends on its common shares in the past, and it
is not expected to pay any dividends in the foreseeable future. Recent Sales of Unregistered Securities On December 5, 2003, the Company issued 16,000,000 shares of its common stock
to Probity Investigations, Inc., a Georgia corporation, or its assigns, in
connection with the acquisition of Remote Business, Inc. The shares were
issued for an aggregate consideration of $550,000, or $.03 per share. This was
determined to be exempt from registration under the Securities Act in reliance
on Section 4(2), as a transaction not involving any public offering. No
underwriters were involved in connection with the sale of these securities. On December 5, 2003, the Company issued 775,395 shares of its common stock to
L. Scott Demerau, a former director of the Company, pursuant to the cashless
exercise of a Stock Option agreement. Mr. Demerau exchanged 90,162 shares
(based on a value of $0.48 per share) in connection with the cashless exercise.
The issuance was determined to be exempt from registration under the
Securities Act in reliance on Section 4(2), as a transaction not involving any
public offering. No underwriters were involved in connection with the sale of
these securities. 
 Item 6. Managements Discussion and Analysis or Plan of Operation Forward Looking-Statements and Associated Risks This Annual Report on Form 10-KSB contains certain forward-looking statements.
These forward-looking statements are based largely on the Companys current
expectations and are subject to a number of risks and uncertainties. Actual
results could differ materially from these forward-looking statements. In view
of these risks and uncertainties, there can be no assurance that the
forward-looking statements contained in this annual report on Form 10-KSB will
in fact transpire. 7




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The following discussion of the financial condition and results of operations
of the Company should be read with the Companys Consolidated Financial
Statements, including the Notes, provided elsewhere in this Annual Report. Overview The Company is a public company with operating activities in the area of sales
and installation of surveillance equipment, by virtue of its acquisition of
Remote Business, Inc. The Company has subsequently expanded its business to
include sales and installation of information technology equipment and software
through the acquisition of a license agreement with Structured Data Systems,
Inc. by Simex Digital Solutions, Inc., its wholly-owned subsidiary. The Company is the successor by way of reorganization to a predecessor public
shell company. Since the reorganization in April 1998, the Company, through its
wholly owned subsidiary, SIMEX A/S, acquired six companies. Due to the sale of
SIMEX A/S in May 2002 and Vendor Leasing in November 2002, the historical
financial data presents the results of their operations as discontinued
operations. The Company incurred losses for the years ending December 31, 2002
and 2003. The Companys expenses include primarily general and administrative expenses.
General and administrative expenses include management, accounting, legal and
human resources costs. The Company has budgeted approximately $10,000 per month
in 2003 for general and administrative expenses. This budgeted amount includes
overhead costs and direct operating costs as well as accounting costs
associated with the audit of the Companys financial statements and anticipated
legal expenses. The Companys future success will depend largely on its ability
to identify and acquire profitable businesses through acquisition or merger. In November 1999, the Companys Board of Directors approved a stock option
plan, which reserves for issuance 10% of the outstanding shares of the
Companys common stock for its employees, directors and consultants. The
Company did not grant any options under this plan in 1999. In 2000, the Company
granted 192,000 options under this plan to various Norwegian employees,
including 20,000 options granted to the Companys then CEO, Elmer Lunde. There
were no options granted during 2001 or 2002. The 192,000 options granted in
2000 were cancelled in 2002, following the sale of the Companys Norwegian
subsidiary. In connection with the issuance of option grants, the Company may
incur non-cash stock compensation expenses. The amount of these potential

future compensation expenses is unknown. On May 20, 2003, the Company entered into Stock Option Agreements with certain
of its officers, directors and consultants, and issued options to purchase
6,499,287 shares in connection with the original acquisition of Probity.
Options issued pursuant to these Agreements are exercisable for a period of 10
years from the date of issuance, at $.05 per share. The Agreements were
restated on July 25, 2003, and again restated on September 15, 2003, in
connection with the rescission of the Probity acquisition transaction. In
July, 2003, the Board of Directors also approved an amendment to the stock
option plan to reserve up to 20% of the total outstanding shares. These
restatements resulted in the following option agreements as of September 15,
2003: NumberName
    
    Title
    
    of OptionsC. Mickle Moye
    

    Chairman of the Board of Directors
    
    
    865,557Kjell I. Jagelid
    
    Chief Executive Officer and Director
    
    
    1,731,115Scott Demerau*
    
    Director
    
    
    865,557Arnold E. Johns
    
    Consultant
    
    
    865,557Total
    
    
    
    
    4,327,786
 *Mr. Demerau exercised his options on December 5, 2003. On January 10, 2004, the Board of Directors resolved to award options to its
Officers, Directors and consultants, as follows: NumberName
    
    Title
    
    of OptionsKjell I. Jagelid
    
    Chief Executive Officer and Director
    
    
    1,000,000C. Mickle Moye
    
    Chairman of the Board of Directors
    
    
    500,000Arnold E. Johns
    
    Consultant
    
    
    500,000Fred J. Griffin
    
    Consultant
    
    
    250,000Total
    
    
    
    
    2,250,000
 These options are exercisable for a period of 10 years, at a price equal to
$.35 per share. 8




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CONSOLIDATED STATEMENT
OF OPERATIONS DATA
(IN THOUSANDS) YEARS ENDEDDecember 312003
    
    2002Sales
    
    $
    53
    
    
    $
    Cost of Goods Sold
    
    
    29
    
    
    
    Gross Profit
    
    
    24
    
    
    
    Selling, general and administrative expenses
    
    
    456
    
    
    
    280Interest expense, net
    
    
    (3
    )
    
    
    3Loss from continuing operations before income taxes
and cumulative effect of accounting change
    
    
    (429
    )
    
    
    (283
    )Income taxes
    
    
    
    
    
    
    Loss from continuing operations before cumulative
effect of accounting change
    
    
    (429
    )
    
    
    (283
    )Loss from discontinued operations, net of income taxes
    
    
    
    
    
    
    (3,261
    )Loss before cumulative effect of accounting change
    
    
    (429
    )
    
    
    (3,544
    )Cumulative effect of accounting change
    
    
    
    
    
    
    (628
    )Net loss
    
    $
    (429
    )
    
    $
    (4,172
    )
 Results of Operations (in thousands) Sales and Gross Profit The Company, through its newly-acquired subsidiary, Remote Business, Inc.,
reported sales and service revenues from installations of surveillance
equipment of $53, resulting in a gross profit of $24. This activity was
reported in the period from December 5, 2003, the acquisition date to year-end. Selling, General and Administrative Expenses Selling, general and administrative expenses increased $176 or 50%, to $456 for
the year ended December 31, 2003 from $280 for the year ended December 31,
2002. The increase was primarily attributable to increased cost and
professional fees related to the acquisition and subsequent rescission
transactions involving Probity Investigations, Inc. and the acquisition of the
business of Remote Business, Inc. Loss from Discontinued Operations During the year ended December 31, 2002, the Company sold its Norwegian
construction subsidiary and its equipment leasing operations, effectively
representing all of the Companys operating activities. Losses of $3,261 from
discontinued operations during the year ended December 31, 2002, resulted
primarily from a loss of approximately $3,392 from the impairment of goodwill
associated with the Companys Norwegian operations. The 2002 loss was decreased
by gains of approximately $399 on the sale of the Companys operating
subsidiaries, but increased by a comparative amount of 2002 operating losses
from discontinued operations. 9




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##### Table of Contents



Net Loss During the year ended December 31, 2003, the Company had a net loss of $(429)
or $ (.02) per diluted weighted-average share. During the year ended December
31, 2002, the Company reported a net loss of $(4,172) or $(.25) per diluted
weighted-average share. The $3,774 decrease in net loss for the year ended
December 31, 2003, was primarily due to the effect of the losses from
discontinued operations of approximately $3,261 and a $628 loss resulting from
the cumulative effect of an accounting change related to the impairment of
goodwill associated with the acquisition of the Companys equipment leasing
subsidiary in 2002, offset by the Companys $176 increase in selling, general
and administrative expenses in 2003. Financial Condition, Liquidity and Capital Resources (in thousands) Operating Activities Cash flows used in operating activities for the year ended December 31, 2003
aggregated $(434) compared to cash used in operating activities for the year
ended December 31, 2002 of $(2,580). The unfavorable impact on operating cash
flows for the year ended December 31, 2003 was primarily due to the acquisition
of RBI and the resulting increase in general and administrative expenses. The
unfavorable impact on operating cash flows for the year ended December 31, 2002
was primarily due to $(2,091) cash used in discontinued operations and a net
loss from continuing operations of $(283). Investing Activities Cash provided (used) by investing activities for the years ended December 31,
2003 and 2002 aggregated $(227) and $1,107, respectively. The cash used for
the year ended December 31, 2003 was primarily attributable to the retainage by
Kjell Jagelid and Montain Sebring Generale, S.A. of proceeds from the sale of
equipment pursuant to the exchange of notes receivable with Kyros. The cash
provided for the year ended December 31, 2002 was due to net activity from
discontinued operations. Financing Activities There were no cash flows provided or used by financing activities for the year
ended December 31, 2003. Cash flows provided by financing activities for the
year ended December 31, 2002 were $2,128. During the year ended December 31,
2002, cash was provided by net activity from discontinued operations of $2,328,
offset by payments of $(200) on note payable - bank. Managements Plans Since the sale of its operating subsidiaries in 2002, the Company has been
seeking an acquisition or merger candidate. The Companys resources consisted
of $681 in cash and cash equivalents as of December 31, 2002. The Company is
seeking an operating company with a viable product or service that has growth
potential. Associated with the search for an acquisition or merger candidate,
the Company has entered into a consulting agreement with a former officer of
the Company. Under the agreement, the Company paid the former officer $10 per
month for the three month period January through March of 2003 to assist the
Company in locating a suitable acquisition or merger candidate. As a result of
the acquisition of RBI, the former officer also received options to purchase
500,000 shares of the Companys common stock. On December 23, 2003, the Company announced that it had entered into a Letter
of Intent for the acquisition of Wooju Communications Company, Ltd. (Wooju)
of Incheon, Korea. The Letter of Intent was amended in February 2004, and a
definitive agreement was distributed to the parties. As of the date of this
report, the Letter of Intent, as amended, has expired and no definitive
agreement has been executed; however, the parties continue to have discussions
and negotiations on an acquisition transaction. Wooju, a KOSDAQ listed
company, is one of Koreas leading manufacturers of specialized security
equipment and systems. Its principal products include digital video recorders,
video door-phones, closed-circuit TV monitors and surveillance cameras. Effective January 16, 2004, a wholly-owned subsidiary of the Company, Simex
Digital Solutions, Inc. (Simex Digital) entered into a marketing agreement
with Structured Data Systems, Inc. (SDS), a Georgia corporation. SDS is a
value-added reseller of computer hardware and software. Under the marketing
agreement, Simex Digital markets the products sold by SDS. The Company has a limited amount of cash reserves, and is dependent upon the
performance of its operating subsidiaries, and cash flow resulting therefrom,
to meet its operating cash requirements. Since the acquisition of these
subsidiaries is relatively recent and the Companys operating history with
these entities is brief, the Company can give no assurances as to the ability
of its operations to generate sufficient funds to meet its needs. 10




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##### Table of Contents



Woojus key technological competency lies in integration of advanced digital
and web-based wireless technology into existing analog surveillance structures.
Woojus products offer integration and versatility through customized
solutions for homes and small businesses, parking lots, airports, financial
institutions and other public spaces with surveillance and security needs.
Wooju supplies its products globally to more than 70 countries through a
distribution network of approximately 160 institutional purchasers. Wooju
operates through four business divisions (administration, research and
development, technical engineering, and sales and marketing) and maintains a
research institute. Wooju has a manufacturing facility in Qindao, the Peoples
Republic of China. In addition, Wooju has nine registered patents, including
three utility patents. Impact of Accounting Standards Adopted During 2003 In June 2001, the Financial Accounting Standards Board issued SFAS No. 143,
Accounting for Asset Retirement Obligations (SFAS No. 143), SFAS No. 143
provides new guidance on the recognition and measurement of an asset retirement
obligation and its associated asset retirement cost. It also provides
accounting guidance for legal obligations associated with the retirement of
tangible long-lived assets. The Companys adoption of this standard did not
have a significant impact on its financial statements. In April 2002, the FASB issued SFAS No. 145, Rescission of FASB Statements No.
4,44 and 64, Amendment of FASB Statement No. 13, and Technical Corrections.
Among other things, SFAS No. 145 eliminates the requirement that gains and
losses from the extinguishment of debt be classified as extraordinary items.
SFAS No. 145 is effective for fiscal years beginning after December 15, 2002,
with early adoption permitted. The Companys adoption of this standard did not
have a significant impact on its financial statements. In June 2002, the FASB issued SFAS No. 146, Accounting for Costs Associated
with Exit or Disposal Activities. This standard nullifies Emerging Issues Task
Force No. 94-3, Liability Recognition for Certain Employee Termination
Benefits and Other Costs to Exit an Activity (including Certain Costs Incurred
in a Restructuring). This standard requires that a liability for a cost
associated with an exit or disposal activity be recognized when the liability
is incurred rather than the date of an entitys commitment to an exit plan.
SFAS No. 146 is effective after December 31, 2002. The Companys adoption of
this standard did not have a significant impact on its financial statements. In November 2002, the Financial Accounting Standards Board issued
Interpretation No. 45, (Guarantors Accounting and Disclosure Requirements for
Guarantees, Including Indirect Guarantees of Indebtedness of Others (Fin 45).
Fin 45 requires that the guarantor recognize, at the inception of certain
guarantees, a liability for the fair value of the obligation undertaken in
issuing such guarantee. Fin 45 also requires additional disclosure about the
guarantors obligations under certain obligations that it has issued. The
initial recognition and measurement provisions of this interpretation are
applicable on a prospective basis to guarantees issued or modified after
December 31, 2002 and the disclosure requirements are effective after December
15, 2002. The Companys adoption of this standard did not have a significant
impact on its financial statements. In December 2002, the FASB issued SFAS No. 148, Accounting for Stock-Based
Compensation - Transition and Disclosure, an Amendment of FASB Statement No.
123. SFAS No. 148 amends SFAS No. 123 to provide alternative methods of
transition for an entity that voluntarily changes to the fair value based
method of accounting for stock-based employee compensation. SFAS No. 148 also
amends the disclosure provisions of SFAS No. 123 to require prominent
disclosure about the effects on reported net income of an entitys accounting
policy decisions with respect to stock-based employee compensation. The
adoption of this standard did not have a significant impact on the Companys
financial statements. Impact of Accounting Standards Issued But Not Yet Adopted In January 2003, the FASB issued Interpretation No. 46, Consolidation of
Variable Interest Entities (FIN 46). FIN 46 changes the criteria by which one
company includes another entity in its consolidated financial statements.
Previously, the criteria were based on control through voting interest. FIN 46
requires a variable interest entity to be consolidated by a company if that
company is subject to a majority of the risk of loss from the variable interest
entitys activities or entitled to receive a majority of the entitys residual
returns or both. A company that consolidates a variable interest entity is
called the primary beneficiary of that entity. The consolidation requirements
of FIN 46 apply immediately to variable interest entities created after January
31, 2003. The consolidation requirements apply to older entities in the first
fiscal year or interim period beginning after June 15, 2003. Certain of the
disclosure requirements apply in all financial statements issued after January
31, 2003, regardless of when the variable interest entity was established. 11




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During October 2003, the FASB issued Staff Position No. FIN 46, deferring the
effective date for applying the provisions of FIN 46 until the end of the
first interim or annual period ending after December 31, 2003 if the
variable interest was created prior to February 1, 2003 and the public
entity has not issued financial statements reporting that variable
interest entity in accordance with FIN 46. On December 24, 2003, the FASB issued FASB Interpretation No. 46 (Revised
December 2003), Consolidation of Variable Interest Entities, (FIN-46R)
primarily to clarify the required accounting for interests in variable interest
entities. FIN-46R replaces FIN-46 that was issued in January 2003. FIN-46R
exempts certain entities from its requirements and provides for
special effective dates for entities that have fully or partially applied
FIN-46 as of December 24, 2003. In certain situations, entities have the
option of applying or continuing to apply FIN-46 for a short period of
time before applying FIN-46R. While FIN-46R modifies or clarifies various
provisions of FIN-46, it also incorporates many FASB Staff Positions previously
issued by the FASB. The Company has deferred the adoption of FIN 46 with
respect to VIEs created prior to February 1, 2003. Management is currently
assessing the impact, if any, FIN 46 may have on the Company; however,
management does not believe there will be any material impact to the Companys
financial position, results of operations or liquidity resulting from the
adoption of this interpretation. 
 Item 7. Financial Statements See Financial Statements and Notes to Financial Statements set forth on page
21 through 33 of this Annual Report on Form 10-KSB. 
 Item 8. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosures As reported on a Form 8-K filed on October 7, 2003, the Board of Directors of
the Company on September 30, 2003 dismissed KPMG LLP and engaged Braverman &
Company, P.C. as its independent accountants. The Board of Directors of SIMEX
determined that SIMEXs current operations and capital resources did not
warrant the use of a major accounting firm. During the two most recent years and the subsequent interim period through
September 30, 2003, there were no disagreements with KPMG LLP on any matter of
accounting principles or practices, financial disclosure, or auditing scope or
procedures, which disagreements if not resolved to KPMG LLPs satisfaction
would have caused them to make reference in connection with their opinion to
the subject matter of the disagreement. The audit report of KPMG LLP on the
Companys financial statements for the past two years did not contain any
adverse opinion or disclaimer of opinion, nor was it qualified or modified as
to uncertainty, audit scope or accounting principles, except the audit report
of KPMG LLP noted SIMEX changed its method of accounting for goodwill and other
intangible assets in 2002. During the two most recent years of the Company ended December 31, 2002 and the
subsequent interim period to September 30, 2003, SIMEX did not consult with
Braverman & Company, P.C. regarding any of the matters or events set forth in
Item 304(a)(2)(i) and (ii) of Regulation S-B. As reported on a form 8-K filed on February 2, 2004, the Board of Directors of
the Company on January 26, 2004 approved the dismissal of Braverman & Company,
P.C. and engaged Miller Ray & Houser LLP as its independent accountants. The
Board of Directors of SIMEX determined that SIMEXs primary location and
Braverman & Company, P.C.s association with Miller Ray & Houser LLP for work
related to SIMEX warranted the assignment of the latter firm as its certifying
accountant. During the two most recent fiscal years and subsequent interim period through
January 26, 2004, there were no disagreements with Braverman & Company, P.C. on
any matter of accounting principles or practices, financial disclosure, or
auditing scope or procedures, which disagreements if not resolved to Braverman
& Company, P.C.s satisfaction would have caused them to make reference in
connection with their opinion to the subject matter of the disagreement.
Braverman & Company, P.C. did not prepare any audit reports for the Company
during the past two fiscal years; rather, Braverman & Company, P.C. reviewed
the Companys condensed consolidated interim financial statements as of and for
the quarters ended September 30, 2003 and June 30, 2003, and is not aware of
any material modifications that should be made to such statements for them to
be in conformity with accounting principles generally accepted in the United
States of America. During the two most recent fiscal years of the Company ended December 31, 2003
and the subsequent period to January 26, 2004, SIMEX did not consult with
Miller Ray & Houser LLP regarding any matters or events set forth in Item
304(a)(2)(i) and (ii) of Regulation S-B. 12




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##### Table of Contents



Item 8A. Controls and Procedures Evaluation
of Disclosure Controls and Procedures. The Companys chief
executive officer and chief financial officer, after evaluating the
effectiveness of the Companys disclosure controls and
procedures (as defined in Sections 13a-14(c) of the
Securities Exchange Act of 1934) as of the end of the period reported
in this annual report (the Evaluation Date), concluded
that the Companys disclosure controls and procedures were
effective and designed to ensure that material information relating
to the Company and its consolidated subsidiaries is accumulated and
would be made known to them by others within those entities as
appropriate to allow timely decisions regarding required disclosures. Changes
in Internal Controls. The Company does not believe that there are
significant deficiencies in the design or operation of its internal
controls that could adversely affect its ability to record, process,
summarize and report financial data. Although there were no
significant changes in the Companys internal controls or in
other factors that could significantly affect those controls
subsequent to the Evaluation Date, the Companys senior
management, in conjunction with its Board of Directors, continuously
reviews overall company policies and improves documentation of
important financial reporting and internal control matters. The
Company is committed to continuously improving the state of its
internal controls, corporate governance and financial reporting. Limitation
on the Effectiveness of Controls. The Companys management,
including the Chief Executive Officer and Chief Financial Officer,
does not expect that its disclosure or internal controls will prevent
all errors or fraud. A control system, no matter how well conceived
and operated, can provide only reasonable, not absolute, assurance
that the objectives of the control system are met. Further, the
design of a control system must reflect the fact that there are
resource constraints, and the benefits of controls must be considered
relative to their costs. Because of the inherent limitations in a
cost-effective control system, misstatements due to error or fraud
may occur and not be detected. 
 PART III 
 Item 9. Directors, Executive Officers, Promoters and Control Persons;
Compliance with Section 16(a) of the Exchange Act Our executive officers, directors and certain key employees, their ages as of
December 31, 2003 and their position(s) with SIMEX are as follows: MR. KJELL JAGELID
    
    
    60
    
    
    Director and President since December 2000.
Mr. Jagelid has over 20 years experience in
manufacturing and construction. Mr. Jagelid
invented equipment and processes used in the
Companys former post-tensioning construction
segment and holds approximately fifteen
patents in the manufacturing and construction
industries. Mr. Jagelid has been employed by
the Company on various occasions since the
1980s. Mr. Jagelid graduated from PHF,
Goteborg, Sweden with a Bachelors Degree in
Finance and obtained a Masters Degree in
Civil and Mechanical Engineering from GTL,
Sweden. Mr. Jagelid is fluent in Swedish,
English and the Scandinavian languages and is
conversational in German.MR. C. MICKLE MOYE
    
    
    67
    
    
    Director since May 1999. Chairman of the
Board since November 5, 2001. Mr. Moye has
served as the President and Chief Executive
Officer of three bank and trust companies
over the past 15 years. In December 1998, Mr.
Moye retired as President and CEO of Security
State Bank, Canton, Georgia after 10 years of
employment. Mr. Moye holds a B.S. degree in
Industrial Management from the Georgia
Institute of Technology and has pursued
post-graduate studies at the Harvard Business
School.MR. FRED J. GRIFFIN
    
    
    52
    
    
    Chief Financial Officer. Mr. Griffin was
appointed Chief Financial Officer in January,
2004. He has served as an independent
consultant to the Company, among other
clients, over the past year. Mr. Griffin was
previously Chief Financial Officer of
Innovative Technical Network, Inc., a metal
fabrication company in Jacksonville, FL from
April 2001 through May, 2003. He was
previously Chief Financial of Folded Edge,
Inc., an Atlanta, GA based online retailer
and distributor of clothing and accessories.
Mr. Griffin is a former partner in Deloitte
Haskins & Sells, and was a practicing CPA for
over 16 years.
 BOARD COMPOSITION Each member of the Board of Directors is elected by the shareholders. Each
director serves for a one (1) year term. Each officer is elected by, and serves at the discretion of, the Board of
Directors. There are no family relationships among any of the directors or
executive officers. 13




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COMMITTEES OF THE BOARD At a Board of Directors meeting held on November 11, 1999, the Board
established an Audit Committee and a Compensation Committee. The Audit
Committee reviews, acts on and reports to the Board of Directors with respect
to various auditing
and accounting matters, including the selection of our independent auditors,
the scope of the annual audits, fees to be paid to the independent auditors,
the performance of our independent auditors and our accounting practices. The
members of the Audit Committee are C. Micke Moye and Kjell I. Jagelid. The Compensation Committee establishes salaries, incentives and other forms of
compensation for our officers and other employees and administers our incentive
compensation and benefit plans. The members of the Compensation Committee are
C. Mickle Moye and Kjell I. Jagelid. COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT The members of SIMEXs Board of Directors, its executive officers and holders
of 10% or more of its outstanding common stock are subject to the reporting
requirements of Section 16(a) of the Securities Exchange Act of 1934, as
amended, which require them to file reports with respect to their ownership of
SIMEX common stock and their transactions in such common stock. Based upon (1)
the copies of Section 16(a) reports that SIMEX received from such persons for
transactions in the common stock and their common stock holdings for the fiscal
year ended December 31, 2003, and (2) the written representations received from
one or more of such persons that no annual Form 5 reports were required to be
filed by them for such period. SIMEX believes that all reporting requirements
under Section 16(a) for such period were met in a timely manner by its
executive officers, Board members and greater than 10% shareholders, except as
described herein. Mr. Jagelid failed to file a Form 4 reporting the granting of a stock option
for 3,413,666 shares of the common stock of the Company on May 20, 2003. Mr.
Jagelid reported the subsequent forfeit of 1,682,551 shares from such option
agreement on September 18, 2003. Mr. C.
Mickle Moye failed to timely file a Form 4 reporting the granting of a
stock option for 1,706,833 shares of the common stock of the Company on May 20,
2003. A Form 4 was filed reporting the grant on August 6, 2003. Messrs. Scott Demerau, Gary Redding, Kyu Hung Jang, and Wooju Communications
Co., Ltd., failed to timely a Form 3 reporting their status as officers,
directors or ten percent shareholders as of May 20, 2003. Messrs. Demerau and
Redding each filed a Form 3, on August 6, 2003, and Mr. Jang and Wooju
Communications Co., Ltd. filed a Form 3 on August 7, 2003. Mr. Hyung-Tae Kim failed to file a Form 3, reporting his status as a ten
percent shareholder due to his acquisition of 5,000,000 shares of the Companys
common stock in connection with the Share Exchange Agreement with Probity
Investigations, Inc. on December 5, 2003, and Probity Investigations, Inc.
failed to file a Form 3 reporting its status as a ten percent shareholder due
to its acquisition of 9,800,000 shares of the Companys common stock in
connection with the Share Exchange Agreement with Probity Investigations, Inc.
on December 5, 2003. Code of Ethics We currently do not have a Code of Ethics that applies to our President, Chief
Executive Officer & Chief Financial Officer. Our management is currently in the
process of developing such a policy and expects to present it to our board of
directors for its review and approval during the second quarter of 2004. Once
adopted, we will provide a copy of the Code of Ethics without charge upon
written request directed to the Company, Attn: Secretary, 4940 Peachtree
Industrial Blvd., Suite 360, Norcross, GA 30071. Audit Committee Financial Expert We have an audit committee comprised of C. Mickle Moye and Kjell I. Jagelid.
Neither of the members of the audit committee meet the definition of an audit
committee financial expert, as that term is defined by SEC regulations.
Further, neither of our audit committee members or any of our other current
directors is independent, as defined by applicable regulation. We are currently
in the process of searching for and recruiting potential director candidates
who are independent and who will qualify as an audit committee financial
expert. 
 Item 10. Executive Compensation No executive officer, director or other individual received compensation of
more than $100,000 for the prior fiscal year. 14




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##### Table of Contents



The compensation paid in 2003, 2002 and 2001 to the Chief Executive Officer of
the Company and to the President of the Company is set forth in the table
below. SUMMARY COMPENSATION TABLE
THE COMPANY ANNUAL
    
    LONG-TERM COMPENSATIONCOMPENSATION
    
    
    
    
    
    AWARDS
    
    PAYOUTSALLNAME AND
    
    
    
    
    
    
    
    
    
    
    
    
    
    OTHER ANNUAL
    
    RESTRICTED
    
    OPTIONS
    
    LTIP
    
    OTHERPRINCIPAL
    
    
    
    
    
    SALARY
    
    BONUS
    
    COMPENSATION
    
    STOCK
    
    /SARs
    
    PAYOUT
    
    COMPENSATIONPOSITION
    
    YEAR
    
    ($)
    
    ($)
    
    ($)
    
    AWARDS
    
    (#)
    
    ($)
    
    ($) (3)Kjell Jagelid
    
    
    2003
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    1,731,115
    
    
    
    0
    
    
    
    12,000President (1)
    
    
    2002
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    153,7002001
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    10,500Elmer Lunde
    
    
    2002
    
    
    
    125,000
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0Treasurer (2)
    
    
    2001
    
    
    
    157,430
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0
  (1)
    
    Mr. Jagelid was elected President and a Director in December 2000.  (2)
    
    Mr. Lunde resigned his position in July 2002, commensurate with
the sale of the Companys Norwegian subsidiary.  (3)
    
    Mr. Jagelids other compensation in 2001 consisted of professional fees
for management services rendered. Mr. Jagelids 2002 other compensation
consisted primarily of professional fees for his negotiation of the sale
of the Companys Norwegian subsidiary. Mr. Jagelids 2003 compensation
consisted of directors fees. Mr. Jagelid was granted a stock option agreement to purchase 3,413,666 shares
of the Companys common stock on May 20, 2003. On September 18, 2003, Mr.
Jagelid forfeited 1,682,551 shares for no consideration. Options/SARs grants to executive officers during 2003 were as follows: Number of
    
    Percent of totalsecurities
    
    options/SARsunderlying
    
    granted tooptions/SARs
    
    employees in fiscal
    
    Exercise or base priceName
    
    granted (#)
    
    year
    
    ($/Sh)
    
    Expiration date(a)
    
    (b)
    
    (c)
    
    (d)
    
    (e)Kjell Jagelid
    
    
    1,731,115
    (1)
    
    
    100
    %(2)
    
    $
    0.05
    
    
    May 20, 2013
  (1)
    
    Mr. Jagelid received a grant of 3,413,666 options on May 20, 2003,
which was reduced to 1,731,115 for no consideration on September 15,
2003.  (2)
    
    Represents 50% of the options granted during the year to directors
of the Company DIRECTOR COMPENSATION Outside Directors receive fees for monthly meetings. These fees increased from
$1,200 per month to $1,500 per month during 2003. Other Directors receive no
cash remuneration for serving on the Board of Directors but are reimbursed for
reasonable expenses incurred by them in attending Board and Committee meetings. EMPLOYEE CONTRACTS The Company has no employment agreements. 
 Item 11. Security Ownership of Certain Beneficial Owners and Management and
Related Stockholder Matters The following table sets forth, as of December 31, 2003 certain information
regarding beneficial ownership of common stock by:  
    
    Each person known to the Company who owns beneficially more than five percent (5%) of the common stock;  
    
    The directors;  
    
    The executive officers; and  
    
    All executive officers and directors as a group. 15




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##### Table of Contents



Beneficial ownership is determined in accordance with the rules and regulations
of the Securities and Exchange Commission. In computing the number of shares
beneficially owned by a person and the percentage ownership of that person,
shares of common stock subject to options held by that person that are
currently exercisable or exercisable within sixty (60) days of the date of this
Annual Report are deemed outstanding. These shares, however, are not deemed
outstanding for the purposes of computing the percentage ownership of any other
person. Except as indicated in the footnotes to this table and pursuant to
applicable community property laws, each shareholder named in the table has
sole voting and investment power with respect to the shares set forth opposite
such shareholders name COMMON STOCK BENEFICIALLY OWNEDNAME AND ADDRESS OF BENEFICIAL OWNER
    
    NO. OF SHARES
    
    % OF CLASSMr. KJELL JAGELID (1)
    
    
    3,917,615
    
    
    
    11.75
    %Kurbergstrasse 1
CH-8049 Zurich
SwitzerlandMONTAIN SEBRING GENERALE HOLDING S.A.
    
    
    1,755,000
    
    
    
    5.26
    %c/o Rika Mundy
60 Grand Rue
L-1660 LuxembourgC. MICKLE MOYE (2)
    
    
    865,557
    
    
    
    2.60
    %2890 Normandy Drive, NW
Atlanta, GA 30305BRYNE ELEKTRISKE A/S
    
    
    2,872,340
    
    
    
    17.34
    %Blaberg 30
Kvernland, Norway 4355PROBITY INVESTIGATIONS, INC.
    
    
    9,800,000
    
    
    
    29.39
    %P. O. Box 1311
Oakwood, GA 30566HYUNG-TAE KIM
    
    
    5,000,000
    
    
    
    15.0
    %MARTY STEINBERG, ESQ., as the Receiver for Lancer Management
    
    
    3,320,057
    
    
    
    9.94
    %Group II, LLC, Lancer Offshore, Inc. and Omnifund, Ltd. and as the party
in control of Lancer Partners, LP.
Hunton & Williams, LLP,
1111 Brickell Avenue, Suite 2500
Miami, Florida 33131ELMER LUNDE (3)
    
    
    3,314,779
    
    
    
    9.94
    %Lagervegen 30
N-4064 Stavanger
NorwayMONTAIN SEBRING GENERAL, LLC
    
    
    3,000,000
    
    
    
    9.00
    %140 South Falcon Bluff
Alpharetta, GA 30022L. SCOTT DEMERAU(4)
    
    
    1,975,395
    
    
    
    5.92
    %8442 Tibet Butler Drive
Windmere, FL 34786JULI DEMERAU (5)
    
    
    1,975,395
    
    
    
    5.92
    %8442 Tibet Butler Drive
Windmere, FL 34786ALL DIRECTORS AND EXECUTIVE OFFICERS AS A GROUP (2 Persons)
    
    
    5,186,500
    
    
    
    14.35
    %
  (1)
    
    Includes 431,500 shares owned individually, 1,755,000 shares beneficially
owned by Montain Sebring Generale 16




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Holding S.A., and 1,731,115 shares that may be issued pursuant to a stock
option agreement.  (2)
    
    Represents 865,557 shares that may be issued pursuant to a stock option
agreement.  (3)
    
    Includes 314,779 shares owned individually, and 3,000,000 shares
beneficially owned by Montain Sebring Generale, LLC.  (4)
    
    Includes 775,395 shares owned individually, and 1,200,000 shares owned by
his wife, Juli Demerau.  (5)
    
    Includes 1,200,000 shares owned individually, and 775,395 shares owned by
her husband, Scott Demerau. In November 1999, the Companys board of directors approved a stock based
compensation plan (Plan) under which shares or options can be granted to
employees, directors and consultants. The Company will measure compensation
cost using the intrinsic value method of accounting prescribed by APB Opinion
No. 25 Accounting for Stock Issued to Employees. The Plan reserves for
issuance 20% of the Companys common stock for its directors and consultants. The following table presents the summary information relative to the Companys
equity compensation plan as of December 31, 2003: Equity Compensation Plan Information Number ofsecuritiesNumber of
    
    
    
    
    
    remaining forsecurities to be
    
    
    
    
    
    future issuanceissued upon
    
    
    
    
    
    under equityexercise of
    
    Weighted average
    
    compensation plansoutstanding
    
    price of
    
    (excludingoptions, warrants
    
    outstanding
    
    securitiesand rights
    
    options, warrants
    
    reflected in column(a)
    
    and rights
    
    (a))Equity compensation
plans approved by
security holders
    
    
    3,462,229
    
    
    $
    .05
    
    
    
    0Equity compensation
plans not approved
by security
holders(1)
    
    
    
    
    
    
    
    
    
    
    3,205,831Totals
    
    
    3,462,229
    
    
    
    
    
    
    
    3,205,831
 (1) In July 2003, the Board of Directors increased the number of share eligible
for issuance under the Companys stock option plan from 10% to 20% of the total
issued and outstanding shares of the Company. This increase has not yet been
approved by the Companys shareholders. 
 Item 12. Certain Relationships and Related Transactions Future Transactions All future transactions, including loans between the Company and its officers,
directors, principal shareholders and their affiliates, are required to be
approved by a majority of the Board of Directors, including a majority of the
independent and disinterested outside directors on the Board and will be on
terms no less favorable than could be obtained from unaffiliated third parties. Sale of Shares On January 1, 2002 the Company sold its interests in Vest Norge Doors A/S to
two Company employees. The Companys interest was sold for $88 cash paid at
closing and a loss was recognized. 17




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##### Table of Contents



Associated with the search for an acquisition or merger candidate, the Company
entered into a consulting agreement with a former officer of the Company. Under
the agreement, the Company paid the former officer $10 per month for the three
month period January through March of 2003 to assist the Company in locating a
suitable acquisition or merger candidate. If an acquisition or merger had been
consummated, the former officer would have also received 500,000 shares of the
Companys common stock. In conjunction with the May 20, 2003, reverse acquisition agreement with
Probity, the Company had advanced Probity approximately $530 as of December 31,
2003. Included in the $530 advances were separate notes in the amounts of $262
and $137, which matured as of June 25, 2003. These notes are collateralized by
inventory and carry interest at 10% per annum. Additional loans in the amount
of $131, made prior to December 31, 2003 are unsecured and not subject to
interest. The Company subsequently exchanged its notes and loans receivable, which
totaled $560 as of the date of the exchange, for inventory of Kyros, which
consisted of video monitoring equipment purchased by Kyros from Wooju
Communications Co., Ltd. (Wooju), a South Korean manufacturing company and a
member of Kyros. At the request of Wooju, the equipment was immediately sold,
on behalf of Simex, to Kjell Jagelid and Montain Sebring Generale Holding,
S.A., a Luxembourg holding related to the Companys CEO, Kjell Jagelid, for
$560, for further sale, in the amount of $560, by Kjell Jagelid and Montain
Sebring Generale Holding, S.A. to Wooju. The Company received from Kjell
Jagelid and Montain Sebring Generale Holding, S.A., a partial payment on the
sale of $112 on September 11, 2003. Additional amounts totaling $448 were paid
by Wooju to Kjell Jagelid and Montain Sebring Generale Holding, S.A. between
the transaction date and December 31, 2003, to be held by Kjell Jagelid and
Montain Sebring Generale Holding, S.A. as agent for the Company. A total of
$255 of these additional proceeds have been remitted to the Company by Kjell
Jagelid and Montain Sebring Generale Holding, S.A. during the fourth quarter of
2003, and a balance of $193 remains held at December 31, 2003 by for the
Company by Kjell Jagelid and Montain Sebring General Holding, S.A.. In conjunction with the acquisition of Remote Business, Inc., the Company
advanced $35 to Remote Business Management, LLC to assist in meeting its
short-term capital needs. After the acquisition of Remote Business, Inc. from
Probity on December 5, 2003, Probity continued to provide operational support
to the Company. Included in amounts due from affiliates at December 31, 2003
is $35 due from Probity less $8 for operational support. Consulting Agreement Associated with the search for an acquisition or merger candidate, the Company
has entered into a consulting agreement with Arnold Johns, a former officer of
the Company. Under the agreement, the Company paid Mr. Johns $10,000 per month
for the three month period January through March of 2003 to assist the Company
in locating a suitable acquisition or merger candidate. 
 Item 13. Exhibits and Reports on Form 8-K.  (a)
    
    Exhibits: The following exhibits are filed as part of this report:  2.1
    
    Plan of Merger (1)2.2
    
    Exchange Agreement with Probity Investigations, Inc. (2)2.3
    
    First Amendment to Exchange Agreement with Probity Investigations, Inc. (3)3.1
    
    Certificate of Incorporation (1)3.2
    
    Bylaws (1)10.1
    
    Stock Purchase Agreement documenting the sale of our Norwegian subsidiary. (4)10.2
    
    Stock Based Compensation Plan executed November 1999. (5)10.3
    
    Acquisition Agreement with Probity Investigations, Inc. dated May 20, 2003 (6)10.4
    
    Mutual Rescission Agreement with Probity Investigations, Inc. (7)21.1
    
    List of the Companys subsidiaries.31.1
    
    Officers Certification under Section 302. 18




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##### Table of Contents



31.2
    
    Officers Certification under Section 302.32.1
    
    Officers Certification under Section 906.32.2
    
    Officers Certification under Section 906.99.1
    
    Certification of Translated Foreign Language Documents. (1)99.2
    
    Cautionary Statement under Private Securities Litigation Reform
Act of 1995  Safe Harbor for Forward-Looking Disclosures.99.3
    
    Audit Committee Charter  (1)
    
    Incorporated by reference to our Registration
Statement on Form 10-SB, filed with the Commission on September
14, 1999.(2)
    
    Incorporated by reference from our Quarterly Report
on Form 10-QSB for the quarter ended September 30, 2003, filed
with the Commission on November 14, 2003.(3)
    
    Incorporated by reference from our Current Report
on Form 8-K dated December 5, 2003, and filed with the
Commission on December 5, 2003.(4)
    
    Incorporated by reference to our Information
Statement on Schedule 14C, filed with the Commission on July
12, 2002.(5)
    
    Incorporated by reference from our Annual Report on
Form 10-KSB for the fiscal year ended December 31, 2002, filed
with the Commission on April 15, 2003.(6)
    
    Incorporated by reference to our Current Report on
Form 8-K dated May 20, 2003, and filed with the Commission on
June 4, 2003.(7)
    
    Incorporated by reference to our Current Report on
Form 8-K dated September 19, 2003, and filed with the
Commission on September 23, 2003.  (b)
    
    Reports on Form 8-K were filed during the quarter ended
December 31, 2003 and interim period thereafter.  (1)
    
    On October 7, 2003 the Company filed a form 8-K reporting a
change in the Companys certifying accountant.(2)
    
    On December 5, 2003 the Company filed a form 8-K reporting the
acquisition of Remote Business, Inc.(3)
    
    On February 2, 2004 the Company filed a form 8-K reporting a
change in the Companys certifying accountant.(4)
    
    On February 19, 2004 the Company filed a form 8-K/A, amending
its form 8-K filed on December 5, 2003 to provide financial data
related to the acquisition of Remote Business, Inc. 19




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Item 14. Principal Accountant Fees and Services  (1)
    
    Audit Fees. The aggregate fees billed by the Companys independent
accountants for professional services rendered for the audit of the
Companys annual financial statements for the years ended December 31,
2003 and 2002 and the reviews of the financial statements included in
the Companys Quarterly Reports on Form 10-QSB for those years were as
follows: 2003
    
    2002KPMG Norway
    
    $
    
    
    
    $
    22,609KPMG LLP
    
    
    3,000
    
    
    
    36,000Braverman & Co. P.C.
    
    
    17,800
    
    
    
    Miller Ray & Houser LLP
    
    
    31,590
    
    
    
    Total
    
    $
    52,390

    
    
    $
    58,609
  (2)
    
    Audit-Related Fees. The Company was not billed by its independent
accountants for any audit-related fees for the years ended December 31,
2003 and 2002.(3)
    
    Tax Fees. The Company incurred no tax fees from its independent
accountants.(4)
    
    All Other Fees: The Company was not billed by its independent
accountants for any other fees for the years ended December 31, 2003 and
2002.(5)
    
    Audit Committee Pre-Approval. The Audit Committee operates pursuant
to a written charter that is presented in EXHIBIT 99.3 to this Form
10-KSB and is incorporated herein by reference. 20




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##### Table of Contents



INDEX TO FINANCIAL STATEMENTS FOR THE COMPANY
SIMEX TECHNOLOGIES, INC.
AND SUBSIDIARIES PageIndependent auditors reports
    
    
    22-23Consolidated balance sheet as of December 31, 2003
    
    
    24Consolidated statements of operations for the years ended December 31, 2003 and 2002
    
    
    25Consolidated statements of shareholders equity for the years ended December 31, 2003 and 2002
    
    
    26Consolidated statements of cash flows for the years ended December 31, 2003 and 2003
    
    
    27Notes to consolidated financial statements
    
    
    28-33
 21




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INDEPENDENT AUDITORS REPORT The Board of Directors and Shareholders
SIMEX Technologies, Inc.: We have audited the accompanying consolidated statements of operations,
shareholders equity and cash flows of SIMEX Technologies, Inc. and
subsidiaries for the year ended December 31, 2002. These consolidated
financial statements are the responsibility of the Companys management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audit. We conducted our audit in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion. In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the results of operations and the
cash flows of SIMEX Technologies, Inc. and subsidiaries for the year ended
December 31, 2002 in conformity with accounting principles generally accepted
in the United States of America. As discussed in note 1 to the consolidated financial statements, the
Company changed its method of accounting for goodwill and other intangible
assets in 2002. /s/   KPMG LLP Atlanta, Georgia
March 21, 2003 22




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##### Table of Contents



REPORT OF INDEPENDENT ACCOUNTANTS The Board of Directors and Shareholders
SIMEX Technologies, Inc.: We have audited the accompanying consolidated balance sheet of SIMEX
Technologies, Inc. and subsidiaries as of December 31, 2003 and the related
consolidated statements of operations, shareholders equity, and cash flows for
the year then ended. These consolidated financial statements are the
responsibility of the Companys management. Our responsibility is to express an
opinion on these consolidated financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion. In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of SIMEX Technologies,
Inc. and subsidiaries as of December 31, 2003 and the results of their
operations and their cash flows for the year then ended in conformity with
accounting principles generally accepted in the United States of America. /s/   Miller Ray & Houser LLP Atlanta, Georgia
March 15, 2004 23




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SIMEX TECHNOLOGIES, INC. AND SUBSIDIARIES 
 
 December 31,2003ASSETSCurrent assetsCash
    
    $
    20Trade accounts receivable
    
    
    45Amounts due from affiliates
    
    
    220Inventories
    
    
    525Total current assets
    
    $
    810LIABILITIES AND SHAREHOLDERS EQUITYCurrent liabilities  accounts payable
    
    $
    47Shareholders equitySeries A Preferred stock, $.001 par value, 928 shares authorized
and issued with no shares outstanding
    
    
    Series B Convertible Preferred stock, $.001 par value, 1,496
shares authorized and issued with no shares outstanding
    
    
    Common stock, $001 par value, 50,000 shares authorized,
33,340 shares issued
    
    
    33Additional paid-in capital
    
    
    10,254Accumulated deficit
    
    
    (9,494
    )Treasury stock, 10 shares at cost
    
    
    (30
    )Total shareholders equity
    
    
    763Commitments (note 3)Total liabilities and shareholders equity
    
    $
    810
 See accompanying notes to consolidated financial statements. 24




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SIMEX TECHNOLOGIES, INC. AND SUBSIDIARIES 
 
 Years EndedDecember 312003
    
    2002Sales
    
    $
    53
    
    
    $
    Cost of goods sold
    
    
    29
    
    
    
    Gross profit
    
    
    24
    
    
    
    Selling, general and administrative expenses
    
    
    456
    
    
    
    280Interest (income) expense, net
    
    
    (3
    )
    
    
    3Loss from continuing operations before income taxes
and cumulative effect of accounting change
    
    
    (429
    )
    
    
    (283
    )Income taxes
    
    
    
    
    
    
    Loss from continuing operations before cumulative effect of
accounting change
    
    
    (429
    )
    
    
    (283
    )Discontinued operations (note 2):Loss from discontinued operations
    
    
    
    
    
    
    (3,261
    )Loss before cumulative effect of accounting change
    
    
    (429
    )
    
    
    (3,544
    )Cumulative effect of accounting change (note 1)
    
    
    
    
    
    
    (628
    )Net loss
    
    $
    (429
    )
    
    $
    (4,172
    )Loss per share (note 7):Basic and diluted:Continuing operations
    
    $
    (.02
    )
    
    $
    (.02
    )Discontinued operations
    
    
    
    
    
    
    (.19
    )Cumulative effect of accounting change
    
    
    
    
    
    
    (.04
    )Net loss
    
    $
    (.02
    )
    
    $
    (.25
    )
 See accompanying notes to consolidated financial statements. 25




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##### Table of Contents



SIMEX TECHNOLOGIES, INC. AND SUBSIDIARIES 
 
 COMMON STOCK
    
    ADDITIONALPAID-IN
    
    ACCUMULATEDSHARES
    
    AMOUNT
    
    CAPITAL
    
    DEFICITBalances at
December 31, 2001
    
    
    16,565
    
    
    $
    17
    
    
    $
    9,720
    
    
    $
    (4,893
    )Deferred
compensation
amortized
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (4,172
    )Foreign currency
translation
adjustments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Balances at
December 31, 2002
    
    
    16,565
    
    
    $
    17
    
    
    $
    9,720
    
    
    $
    (9,065
    )Purchase of Business
    
    
    16,000
    
    
    
    16
    
    
    
    534
    
    
    
    Exercise of Options
    
    
    775
    
    
    
    
    
    
    
    
    
    
    
    Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (429
    )Balances at
December 31, 2003
    
    
    33,340
    
    
    $
    33
    
    
    $
    10,254
    
    
    $
    (9,494
    )
   [Continued from above table, first column(s) repeated] ACCUMULATEDOTHERCOMPENSIVELOSS-FOREIGNCURRENCY
    
    
    
    
    
    TOTALTREASURY
    
    TRANSLATION
    
    DEFERRED
    
    SHAREHOLDERSSTOCK
    
    ADJUSTMENT
    
    COMPENSATION
    
    EQUITYBalances at
December 31, 2001
    
    $
    (30
    )
    
    $
    (1,251
    )
    
    $
    (159
    )
    
    $
    3,404Deferred
compensation
amortized
    
    
    
    
    
    
    
    
    
    
    159
    
    
    
    159Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (4,172
    )Foreign currency
translation
adjustments
    
    
    
    
    
    
    1,251
    
    
    
    
    
    
    
    1,251Balances at
December 31, 2002
    
    $
    (30
    )
    
    
    
    
    
    
    
    
    
    $
    642Purchase of Business
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    550Exercise of Options
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (429
    )Balances at
December 31, 2003
    
    $
    (30
    )
    
    $
    
    
    
    $
    
    
    
    $
    763
 See accompanying notes to consolidated financial statements. 26




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SIMEX TECHNOLOGIES, INC. AND SUBSIDIARIES 
 
 Years EndedDecember 312003
    
    2002Cash flows from operating activities:Loss from continuing operations before cumulative effect of accounting change
    
    $
    (429
    )
    
    $
    (283
    )Adjustments to reconcile net loss to net cash used in operating activities:Depreciation
    
    
    
    
    
    
    8Other
    
    
    
    
    
    
    4Changes in operating assets and liabilities:Accounts receivable
    
    
    (45
    )
    
    
    Inventories
    
    
    24
    
    
    
    Prepaid expenses and other current assets
    
    
    1
    
    
    
    (1
    )Accounts payable
    
    
    15
    
    
    
    (32
    )Other current liabilities
    
    
    
    
    
    
    (185
    )Net activity from discontinued operations
    
    
    
    
    
    
    (2,091
    )Net cash used in operating activities
    
    
    (434
    )
    
    
    (2,580
    )Cash flows provided by (used in) investing activities:Increase in amounts due from affiliates
    
    
    (227
    )
    
    
    Net activity from discontinued operations
    
    
    
    
    
    
    1,107Net cash provided by (used in) by investing activities
    
    
    (227
    )
    
    
    1,107Cash flows provided by (used in) financing activities:Payments of Notes Payable  Banks, net
    
    
    
    
    
    
    (200
    )Net activity from discontinued operations
    
    
    
    
    
    
    2,328Net cash provided by (used in) by financing activities
    
    
    
    
    
    
    2,128Effect of exchange rate changes in cash and cash equivalents
    
    
    
    
    
    
    25Net change in cash and cash equivalents
    
    
    (661
    )
    
    
    680Cash and cash equivalents at beginning of year
    
    
    681
    
    
    
    1Cash and cash equivalents at end of year
    
    $
    20
    
    
    $
    681Supplemental disclosure of cash flows information:Cash paid during the years for:Interest  continuing operations
    
    $
    
    
    
    $
    6Interest  discontinued operations
    
    $
    
    
    
    $
    190In December, 2003, the Company acquired Remote Business, Inc. (note 8)Fair value of inventory acquired
    
    $
    550
    
    
    $
    Common stock
    
    
    (550
    )
    
    
    Cash paid
    
    $
    
    
    
    $
    
 See accompanying notes to consolidated financial statements. 27




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##### Table of Contents



SIMEX TECHNOLOGIES, INC. AND SUBSIDIARIES 
 
 (In thousands, except per share data)  (1)
    
    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES  (A)
    
    DESCRIPTION OF BUSINESS SIMEX Technologies, Inc. and subsidiaries (collectively, the Company),
through its acquisition of Remote Business, Inc. on December 5, 2003, is
engaged in the design, installation, servicing and monitoring of digital
surveillance security systems for business and industry. Prior to this date
and after the Company sold its two operating subsidiaries in 2002, the Company
had no operating activities. Operating activities in 2002 were reported as
discontinued operations (see note 2).  (B)
    
    PRINCIPLES OF CONSOLIDATION The consolidated financial statements include the accounts of SIMEX
Technologies, Inc. and its subsidiaries. All significant intercompany balances
and transactions have been eliminated in consolidation.  (C)
    
    CASH EQUIVALENTS Cash and cash equivalents consist of cash and money market accounts. For
purposes of the consolidated statements of cash flows, the Company considers
all highly liquid debt instruments with original maturities of three months or
less to be cash equivalents.  (D)
    
    GOODWILL In July 2001, the Financial Accounting Standards Board issued SFAS No. 142
Goodwill and Other Intangible Assets, which was adopted by the Company
effective January 1, 2002. Under SFAS No. 142, goodwill and other intangible
assets with indefinite useful lives will no longer be amortized, but will
instead be tested periodically for impairment. SFAS No. 142 also requires that
intangible assets with definite useful lives be amortized over their respective
estimated useful lives to their estimated residual values, and reviewed
periodically for impairment. The Company has determined the effect of adopting
SFAS No. 142 and made appropriate adjustments to its goodwill valuation during
2002. The financial impact of the goodwill valuation adjustment recorded in
2002 was an approximate $4,020 charge to net loss consisting of a $3,392
impairment charge and $628 as a cumulative effect in change of accounting.  (E)
    
    IMPAIRMENT OF LONG-LIVED ASSETS AND LONG-LIVED ASSETS TO BE DISPOSED
OF The Company accounts for long-lived assets in accordance with the
provisions of SFAS No. 144, Accounting for the Impairment or Disposal of
Long-Lived Assets. This Statement requires that long-lived assets and certain
identifiable intangibles be reviewed for impairment whenever events or changes
in circumstances indicate that the carrying amount of an asset may not be
recoverable. Recoverability of assets to be held and used is measured by a
comparison of the carrying amount of an asset to future net cash flows expected
to be generated by the asset. If such assets are considered to be impaired,
the impairment to be recognized is measured by the amount by which the carrying
amount of the assets exceeds the fair value of the assets. Assets to be
disposed of are reported at the lower of the carrying amount or fair value less
costs to sell.  (F)
    
    INCOME TAXES Income taxes are accounted for under the asset and liability method.
Deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax
bases and operating loss and tax credit carryforwards. Deferred tax assets and
liabilities are measured using enacted tax rates expected to apply to taxable
income in the years in which those temporary differences are expected to be
recovered or settled. The effect on deferred tax assets and liabilities of a
change in tax rates is recognized in income in the period that includes the
enactment date. 28




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##### Table of Contents



(G)
    
    RESEARCH AND DEVELOPMENT, AND ADVERTISING There are no research, development or advertising costs for 2003. All
research, development and advertising costs for the year ended December 31,
2002 are reported by the Company within discontinued operations.  (H)
    
    COMPREHENSIVE INCOME The Company applies the provisions of SFAS No. 130, Reporting
Comprehensive Income. SFAS No. 130 establishes standards for reporting and
presentation of comprehensive income and its components in a full set of
financial statements. Comprehensive income consists of net income (loss)
and foreign currency translation adjustment and is presented in the
consolidated statements of shareholders equity. The Statement requires only
additional disclosures in the consolidated financial statements; it does not
affect the Companys financial position or results of operations.  (I)
    
    FOREIGN CURRENCY TRANSLATION ADJUSTMENT The Company applies Financial Accounting Standards Board Statement No. 52,
Foreign Currency Translation (FAS 52) for its subsidiaries outside the United
States. Assets and liabilities denominated in foreign functional currencies are
translated at the exchange rate as of the balance sheet date. Revenues, costs,
and expenses are translated at the weighted average exchange rate for the
period. Translation adjustments are recorded as a separate component of other
comprehensive loss.  (J)
    
    EARNINGS PER SHARE The Company applies the provisions of Statement of Financial Accounting
Standards (SFAS) No. 128, Earnings Per Share. Basic earnings per share is
computed by dividing net income (loss) by the weighted average number of shares
of common stock outstanding during the year. Diluted earnings per share is
computed by dividing net income (loss) by the sum of (1) the weighted average
number of shares of common stock outstanding during the period, (2) the
dilutive effect, if any, of stock options using the treasury stock method, and
(3) dilutive effect, if any, of other potentially dilutive securities.  (K)
    
    USE OF ESTIMATES Management of the Company has made a number of estimates and assumptions
relating to the reporting of assets and liabilities and the disclosure of
contingent assets and liabilities to prepare these financial statements in
conformity with accounting principles generally accepted in the United States
of America. Actual results could differ from those estimates.  (2)
    
    DISCONTINUED OPERATIONS On May 15, 2002, the Company entered into a binding agreement to sell its
Norwegian subsidiary to Jostein Tjelta, a Norwegian businessman. The agreement
was approved by a unanimous vote of the Companys Board of Directors. Under the
terms of the agreement, the Company received $1,500 in cash for all the common
shares of its Norwegian subsidiary and agreed to cancel certain intercompany
indebtedness due to the Company from its Norwegian subsidiary. The $1,500 was
received by the Company and escrowed on May 16, 2002. On July 12, 2002, the
Company mailed to shareholders and filed with the SEC a definitive Form 14C
which acknowledged that holders of a majority of the Companys outstanding
common stock had already agreed to vote in favor of the sale. The sale closed
on August 2, 2002 and the funds were released to the Company from the escrow
account. The Company recorded a gain of $317 on the sale of its Norwegian
subsidiary. Operating results of the Companys Norwegian subsidiary are
reported as discontinued operations. During the quarter ended September 30,
2002, the Company made a decision to sell its wholly owned subsidiary, Simex
Capital, Inc., which included the Companys equipment leasing operations. The
sale was approved by a unanimous vote of the Companys Board of Directors.
Under the terms of the sale, the Company received 150,000 shares of the
Companys common stock, a nominal cash amount and agreed to cancel certain
intercompany indebtedness for all the common shares of Simex Capital, Inc. The
sale closed on November 13, 2002. The Company recorded a gain of $82 on the
sale of Simex Capital, Inc. Operating results of the Companys equipment
leasing operation are reported as discontinued operations.  (3)
    
    RELATED PARTY TRANSACTIONS On January 1, 2002 the Company sold its interests in Vest Norge Doors A/S
to two Company employees. The Companys interest was sold for $88 cash paid at
closing and a loss was recognized. 29




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Associated with the search for an acquisition or merger candidate, the
Company entered into a consulting agreement with a former officer of the
Company. Under the agreement, the Company paid the former officer $10 per month
for the three month period January through March of 2003 to assist the Company
in locating a suitable acquisition or merger candidate. If an acquisition or
merger had been consummated, the former officer would have also received
500,000 shares of the Companys common stock. In conjunction with the May 20, 2003, reverse acquisition agreement with
Probity (note 8), the Company had advanced Probity approximately $530 as of
December 31, 2003. Included in the $530 advances were separate notes in the
amounts of $262 and $137, which matured as of June 25, 2003. These notes are
collateralized by inventory and carry interest at 10% per annum. Additional
loans in the amount of $131, made prior to December 31, 2003 are unsecured and
not subject to interest. The Company subsequently exchanged its notes and loans receivable, which
totaled $560 as of the date of the exchange, for inventory of Kyros, which
consisted of video monitoring equipment purchased by Kyros from Wooju
Communications Co., Ltd. (Wooju), a South Korean manufacturing company and a
member of Kyros. At the request of Wooju, the equipment was immediately sold,
on behalf of Simex, to Kjell Jagelid and Montain Sebring Generale Holding,
S.A., a Luxembourg holding related to the Companys CEO, Kjell Jagelid, for
$560, for further sale, in the amount of $560, by Kjell Jagelid and Montain
Sebring Generale Holding, S.A. to Wooju. The Company received from Kjell
Jagelid and Montain Sebring Generale Holding, S.A., a partial payment on the
sale of $112 on September 11, 2003. Additional amounts totaling $448 were paid
by Wooju to Kjell Jagelid and Montain Sebring Generale Holding, S.A. between
the transaction date and December 31, 2003, to be held by Kjell Jagelid and
Montain Sebring Generale Holding, S.A. as agent for the Company. A total of
$255 of these additional proceeds have been remitted to the Company by Kjell
Jagelid and Montain Sebring Generale Holding, S.A. during the fourth quarter of
2003, and a balance of $193 remains held at December 31, 2003 for the
Company by Kjell Jagelid and Montain Sebring General Holding, S.A.. In conjunction with the acquisition of Remote Business, Inc., the Company
advanced $35 to Remote Business Management, LLC to assist in meeting its
short-term capital needs. After the acquisition of Remote Business, Inc. from
Probity on December 5, 2003, Probity continued to provide operational support
to the Company. Included in amounts due from affiliates at December 31, 2003
is $35 due from Probity less $8 for operational support.  (4)
    
    NOTES PAYABLE - BANK In 2001, the Company obtained a $200 line of credit from a U.S. bank. The
U.S. bank line was used primarily to fund the purchase of Vendor Leasing
Financial Services, Inc. and provide working capital to fund U.S. operations.
The note carried interest at the prime interest rate plus 1.00% (5.75% at
December 31, 2001). The term of the line of credit was to expire September 20,
2002. The note was paid in full and cancelled in August 2002.  (5)
    
    INCOME TAXES Income taxes attributable to loss from continuing operations for the years
ended December 31, 2003 and 2002 differed from the amounts computed by applying
the U.S. Federal income tax rate of 34% to loss from continuing operations
before income taxes as a result of the following: 2003
    
    2002Computed expected tax benefit
    
    $
    (146
    )
    
    $
    (96
    )Increase in income taxes resulting from
increase in valuation allowance for deferred
tax assets
    
    
    146
    
    
    
    96$
    
    
    
    $
    
 The Company has deferred tax assets as of December 31, 2003 consisting of
various income tax attributes (including net operating loss, capital loss
and/or foreign tax credit carryforwards) which are fully offset by a deferred
tax valuation allowance. These income tax carryforwards expire in varying
amounts and years from 2004 to 2023. In assessing the recoverability of the
deferred tax assets, management considers whether it is more likely than not
that some portion or all of the deferred tax assets will not be realized. In
the event of a change of control of the Company, these deferred income tax
assets are subject to limitations and are expected to be significantly reduced. 30




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(6)
    
    COMMON STOCK, OPTIONS AND WARRANTS In July 2001, the Company issued 199,000 shares pursuant to a requirement
to issue shares resulting from the 1998 reorganization of the Company. There
were no proceeds to the Company; however, an expense of $15 was recorded. The Company issued shares of the Companys common stock in connection with
the acquisition of Bryne Elektriske, Vendor Leasing Financial Services, Inc.
and Hellevicks (see note 8). On December 19, 2002, the Company issued 150,000 shares of its common
stock to its President and CEO Kjell Jagelid. These shares had been received by
the Company as a result of the sale of Simex Capital in November 2002 and held
as treasury shares until their issuance to Mr. Jagelid. The shares were issued
as compensation to Mr. Jagelid and an expense of $8 was recorded based upon
estimated fair value of the Companys common stock. In November 1999, the Companys Board of Directors approved a stock option
plan, which reserves for issuance 10% of the outstanding shares of the
Companys common stock for its employees, directors and consultants. The
Company did not grant any options under this plan in 1999. In 2000, the Company
granted 192,000 options under this plan to various Norwegian employees,
including 20,000 options granted to the Companys then CEO, Elmer Lunde. There
were no options granted during 2001 or 2002. The 192,000 options granted in
2000 were cancelled in 2002, following the sale of the Companys Norwegian
subsidiary. In connection with the issuance of option grants, the Company may
incur non-cash stock compensation expenses. The amount of these potential
future compensation expenses is unknown. On May 20, 2003, the Company entered into Stock Option Agreements with
certain of its officers, directors and consultants, and issued options to
purchase 6,499,287 shares in connection with the original acquisition of
Probity. Options issued pursuant to these Agreements are exercisable for a
period of 10 years from the date of issuance, at $.05 per share. The
Agreements were restated on July 25, 2003, and restated again on September 15,
2003, in connection with the rescission of the Probity acquisition transaction.
In July 2003, the Board of Directors also approved an amendment to the stock
option plan to reserve up to 20% of the total outstanding shares. These
restatements resulted in the following option agreements: NumberName
    
    Title
    
    of OptionsC. Mickle Moye
    
    Chairman of the Board of Directors
    
    
    865,557Kjell I. Jagelid
    
    Chief Executive Officer and Director
    
    
    1,731,115Scott Demerau*
    
    Director
    
    
    865,557Arnold E. Johns
    
    Consultant
    
    
    865,557Total
    
    
    
    
    4,327,786
 *Mr. Demerau exercised his options on December 5, 2003. On January 10, 2004, the Board of Directors resolved to award options to its
Officers, Directors and consultants, as follows: NumberName
    
    Title
    
    of OptionsKjell I. Jagelid
    
    Chief Executive Officer and Director
    
    
    1,000,000C. Mickle Moye
    
    Chairman of the Board of Directors
    
    
    500,000Arnold E. Johns
    
    Consultant
    
    
    500,000Fred J. Griffin
    
    Consultant
    
    
    250,000Total
    
    
    
    
    2,250,000
 These options are exercisable for a period of 10 years, at a price equal to
$.35 per share. In October 1995, the Financial Accounting Standards Board (FASB) issued
SFAS No. 123, Accounting for Stock Based Compensation, effective for the
Company beginning January 1, 1996. SFAS No. 123 defines a fair value method
of accounting for employee stock options. It also allows accounting for such
options under the intrinsic value method in accordance with Accounting
Principles Board (APB) Opinion No. 25, Accounting for Stock Issued to
Employees and related interpretations. If a company elects to use the intrinsic
value method, then pro forma disclosures of earnings and earnings per share are
required as if the fair value method of accounting was applied. The effects of
applying SFAS No. 123 in the pro forma disclosures are not necessarily
indicative of future amounts. Additionally, the Company is expected to grant
additional awards in future years. The Company has elected to account for its stock options under the
intrinsic value method outlined in APB No. 25. 31




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The fair value method requires use of option valuation models, such as The
Black-Scholes option valuation model, to value employee stock options, upon
which a compensation expense is based. The Black-Scholes option valuation model
was not developed for use in valuing employee stock options. Instead, this
model was developed for use in estimating the fair value of traded options,
which have no vesting restrictions and are fully transferable. In addition,
option valuation models require the input of highly subjective assumptions
including the expected stock price volatility. Because the Companys stock
options have characteristics significantly different from those of traded
options, and because changes in the subjective input assumptions can materially
affect the fair value estimate, it is managements opinion that the existing
models do not necessarily provide a reliable measure of the fair value of its
employee stock options. Under the intrinsic value method, compensation expense
is only recognized if the exercise price of the employee stock option is less
than the market price of the underlying stock on the date of grant. The following table presents the status of the Companys stock option plan for
the years ended December 31, 2003 and 2002. QUALIFIED PLANS
Weighted Average Options Exercise Price Outstanding at December 31, 2001
    
    
    192,000Granted
    
    
    Exercised
    
    
    Forfeited or Cancelled
    
    
    (192,000
    )Outstanding at December 31, 2002
    
    
    Granted
    
    
    4,327,786Exercised
    
    
    865,557Forfeited or Cancelled
    
    
    Outstanding at December 31, 2003
    
    
    3,462,229
  (7)
    
    LOSS PER SHARE The Company applies the provisions of Statements of Financial Accounting
Standards (SFAS) No. 128, Earnings per Share. Basic loss per common share
is based on the weighted average number of common shares outstanding during the
period. Diluted loss per share excludes the dilutive effect of common stock
equivalents. For the year ended December 31, 2003, the dilutive effect of
3,462,239 options, which comprise common stock equivalents for the year ended
December 31, 2003, has not been presented because their effect would have been
anti-dilutive. For the year ended December 31, 2002, the dilutive effect of
192,000 stock options and warrants, which comprise common stock equivalents for
the year ended December 31, 2002, has not been presented because their effect
would have been anti-dilutive. The Companys weighted average shares
outstanding utilized for both basic and diluted per share computations for 2003
was 17,806,000. The Companys weighted average shares outstanding for both
basic and diluted per share computation in 2002 were 16,555,000.  (8)
    
    ACQUISITIONS Effective as of May 20, 2003, the Company completed a reverse acquisition
subject to certain terms to be complied with after May 20, 2003, under which it
acquired all of the outstanding stock of Probity Investigations, Inc.
(Probity) and correspondingly ownership of Probitys wholly owned
subsidiaries, Kyros, LLC (Kyros) and Remote Business Management, LLC (RBM).
Under the terms of the reverse acquisition, a share exchange transaction
occurred with the shareholders of Probity, which resulted in a change in the
control of the ownership of Simex, with the shareholders of Probity becoming
the controlling group. On September 18, 2003, Simex executed a Mutual Rescission Agreement (the
Rescission Agreement) whereby it agreed with the Probity Shareholders to
mutually rescind the May 20, 2003 reverse acquisition of Probity and return all
parties to there respective positions as they existed prior to May 20, 2003.
The basis for the Rescission Agreement was that Probity had not fulfilled all
of its requirements under the May 20, 2003, reverse acquisition agreement. As a
result of the Rescission Agreement, the financial presentation in this Form
10-KSB for the quarter ended December 31, 2003, does not include the balance
sheet positions of Probity as of December 31, 2003 or the operating results of
Probity for any period presented in this Form 10-KSB. The only evidence of the
reverse acquisition with Probity is represented by loans made by the Company to
Probity, which are included on the Companys December 31, 2003 balance sheet of
$35 in amounts due from affiliates. For financial statement presentation, the
May 20, 2003, reverse acquisition agreement is treated as if it were not
executed. On December 5, 2003, the Company acquired Remote Business, Inc. (RBI), a
newly-formed subsidiary of Probity, in exchange for 16,000,000 newly-issued
shares of the Companys common stock. Immediately prior to the acquisition, 32




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Probity transferred security equipment inventory with a fair value of $550
and the operations of its subsidiary, Remote Business Management, LLC (RBM),
excluding all recorded assets and liabilities of RBM, to RBI. The acquisition
was accounted for as a purchase. Because the Company was a non-operating
company at the time of the transaction and the common shares of the Company are
thinly-traded, the purchase price was deemed to be the fair value of the assets
acquired. Accordingly, no goodwill was recorded in the acquisition. Supplemental pro-forma disclosures of the results of operations for the
years ended December 31, 2003 and 2002, as though the acquisition of RBI had
been completed as of January 1, 2002 are as follows: 2003
    
    2002Revenue
    
    $
    651
    
    
    $
    676Net Loss
    
    $
    (392
    )
    
    $
    (4,665
    )Diluted Loss per Share*
    
    $
    (.01
    )
    
    $
    (.14
    )
 *Diluted loss per share is calculated based on 32,622 and 32,555 diluted
ordinary shares for the years ended December 31, 2003 and 2002, respectively.  (9)
    
    FAIR VALUE OF FINANCIAL INSTRUMENTS The carrying amounts for cash, trade accounts receivable, amounts due from
affiliates and accounts payable approximate fair value because of the short
maturity of these instruments.  (10)
    
    MANAGEMENTS PLANS Effective January 16, 2004, a wholly-owned subsidiary of the Company,
Simex Digital Solutions, Inc. (Simex Digital) entered into a marketing
agreement with Structured Data Systems, Inc. (SDS), a Georgia corporation.
SDS is a value-added reseller of computer hardware and software. Under the
marketing agreement, Simex Digital markets the products sold by SDS. On December 23, 2003, the Company announced that it had entered into a
Letter of Intent for the acquisition of Wooju Communications Company, Ltd.
(Wooju) of Incheon, Korea. The Letter of Intent was amended in February 2004,
and a definitive agreement was distributed to the parties. As of the date of
this report, the Letter of Intent, as amended has expired, and no definitive
agreement has been executed; however, the parties continue to have discussions
and negotiations on an acquisition transaction. Wooju, a KOSDAQ listed
company, is one of Koreas leading manufacturers of specialized security
equipment and systems. Its principal products include digital video recorders,
video door-phones, closed-circuit TV monitors and surveillance cameras.
Woojus key technological competency lies in integration of advanced digital
and web-based wireless technology into existing analog surveillance structures.
Woojus products offer integration and versatility through customized
solutions for homes and small businesses, parking lots, airports, financial
institutions and other public spaces with surveillance and security needs.
Wooju supplies its products globally to more than 70 countries through a
distribution network of approximately 160 institutional purchasers. Wooju
operates through four business divisions (administration, research and
development, technical engineering, and sales and marketing) and maintains a
research institute. Wooju has a manufacturing facility in Qindao, the Peoples
Republic of China. In addition, Wooju has nine registered patents, including
three utility patents. 33




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SIGNATURES In accordance with Section 13 or 15(d) of the Exchange Act, the Company caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized. SIMEX TECHNOLOGIES, INC.
Dated April 12, 2004By:
    /s/   C. Mickle
MoyeChairman of the Board of Directors In accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the Company and in the capacities and on the
dates indicated. Dated April 12, 2004By:
    
    /s/   Kjell I.
JagelidChief Executive Officer, President and Director By:
    
    /s/   C. Mickle MoyeChairman of the Board of Directors By:
    
    /s/   Fred J. GriffinChief Financial Officer 34