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

                                   FORM 10-QSB

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
                                   ACT OF 1934

               For the quarterly period ended: September 30, 2003

                                       OR

    [_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
                              EXCHANGE ACT OF 1934

                        Commission file number: 000-27849


                                 SKYFRAMES, INC.
             (Exact name of registrant as specified in its charter)

                    California                        00-001748413
         (State or other jurisdiction of            (I.R.S. Employer
          Incorporation or organization)            Identification No.)

                         555 Anton Boulevard, Suite 1200
                             Costa Mesa, California
                                      92626
                    (Address of principal executive offices)
                                   (Zip Code)

                                 (714) 957-1000
               (Registrant's telephone number including area code)


   (Former name, former address and former fiscal year, if changed since last
                                     report)

                APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
                   PROCEEDINGS DURNG THE PRECEDING FIVE YEARS

Check whether the  registrant  filed all  documents  and reports  required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the  distribution  of
securities under a plan confirmed by a court. YES [ ] NO [_]

                      APPLICABLE ONLY TO CORPORATE ISSUERS

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest  practicable date: The registrant has 15,003,956 shares
of common stock, $0.10 par value, issued and outstanding as of October 24, 2003.

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



<PAGE>



                                 SKYFRAMES, INC.

                                      INDEX

<TABLE>
<CAPTION>
                                                                                                  PAGE
PART I                                                                                           NUMBER

Item 1 - Financial Information

<S>                                                                                              <C>
         Unaudited Condensed Balance Sheets,                                                      1
              September 30, 2003 and June 30, 2003

         Unaudited Condensed Statements of Operations,  for the                                   2
              three months ended September 30, 2003 and 2002 and for the period from
              inception on May 24, 2002 through September 30, 2003

         Unaudited Condense  Statements of Cash Flows,  for the three months                      3
              ended  September  30,  2003  and  2002  and  for the  period  from
              inception on May 24, 2002 through September 30, 2003

         Notes to Unaudited Condensed to Financial Statements                                     5

Item 2 - Management's Discussion and Analysis of Financial Condition and                         19
              Results of Operations

Item 3. - Disclosure Controls and Procedures                                                     25

PART II

Item 1 - Legal Proceedings                                                                       25

Item 2 - Changes in Securities                                                                   25

Item 3 - Defaults Upon Senior Securities                                                         26

Item 4 - Submission of Matters to a Vote of Security Holders                                     26

Item 5 - Other Information                                                                       26

Item 6 - Exhibits and Reports on Form 8-K                                                        27

Signature Page
</TABLE>



<PAGE>



PART 1 - ITEM I

                                 SKYFRAMES, INC.
                          [A Development Stage Company]

                       UNAUDITED CONDENSED BALANCE SHEETS

<TABLE>
<CAPTION>
                                     ASSETS
                                                                           September 30,                June 30,
                                                                                2003                      2003
                                                                             -----------                -----------
CURRENT ASSETS:
<S>                                                                    <C>                       <C>
     Cash                                                              $               -         $           22,905
     Accounts receivable, net of allowance for
       doubtful accounts of $8,975 and $0, respectively                           10,450                     24,925
     Deferred loan costs                                                          30,833                     13,750
     Prepaid expenses                                                             14,055                          -
                                                                             -----------                -----------
               Total Current Assets                                               55,338                     61,580

PROPERTY AND EQUIPMENT, net                                                        3,498                      3,916

OTHER ASSETS:
     Deposits  8,950                                                                     8,950
                                                                             -----------                -----------
                                                                       $          67,786         $           74,446
                                                                             -----------                -----------

                 LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

CURRENT LIABILITIES:
     Bank overdraft                                                    $           7,224         $                -
     Accounts payable                                                            147,481                    163,689
     Accounts payable - related party                                            131,149                    134,649
     Customer deposits and unearned revenue                                       37,659                     23,330
     Accrued payroll and related expenses                                         80,825                     39,825
     Accrued interest                                                              5,353                        955
     Notes payable, net                                                           89,705                     26,250
                                                                             -----------                -----------
               Total Current Liabilities                                         499,396                    388,698
                                                                             -----------                -----------

STOCKHOLDERS' EQUITY (DEFICIT):
     Common stock, $.10 par value,
       20,000,000 shares authorized, 14,973,956
       and 14,392,679 shares issued and
       outstanding, respectively                                               1,497,396                  1,439,268
     Capital in excess of par value                                            5,741,366                  4,822,494
     Deficit accumulated during the
       development stage                                                      (7,670,372)                (6,576,014)
                                                                             -----------                -----------
               Total Stockholders' Equity (Deficit)                             (431,610)                  (314,252)
                                                                             -----------                -----------
                                                                       $          67,786         $           74,446
                                                                             -----------                -----------
</TABLE>

         Note: The balance sheet as of June 30, 2003 was taken from the
             audited financial statements at that date and condensed

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


<PAGE>



                                 SKYFRAMES, INC.
                          [A Development Stage Company]

                  UNAUDITED CONDENSED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                                                                      For the Three Months             From Inception on
                                                                       Ended September 30,            May 24, 2002 Through
                                                                   -------------------------------       September 30,
                                                                       2003               2002                2003
                                                                   -------------      -------------       -------------
<S>                                                           <C>                 <C>                <C>
REVENUES:
     Subscription services                                    $           10,425  $               -  $           14,950
     Equipment sales                                                       4,950                  -              54,350
                                                                   -------------      -------------       -------------
               Total Revenues                                             15,375                  -              69,300

EXPENSES:
     Cost of equipment sales                                               5,974                  -              44,588
     Selling                                                              17,332                  -              24,304
     General and administrative                                          995,216             42,827           5,568,512
                                                                   -------------      -------------       -------------
               Total Expenses                                          1,018,522             42,827           5,637,404
                                                                   -------------      -------------       -------------

LOSS BEFORE OTHER INCOME (EXPENSE)                                    (1,003,147)           (42,827)         (5,568,104)

OTHER INCOME (EXPENSE):
     Loss on settlement of potential claims                                    -                  -          (1,350,000)
     Loss on extinguishment of debt                                            -                  -            (651,000)
     Interest expense                                                    (91,211)                 -            (101,268)
                                                                   -------------      -------------       -------------
               Total Other Income (Expense)                              (91,211)                 -          (2,102,268)
                                                                   -------------      -------------       -------------

LOSS BEFORE INCOME TAXES                                              (1,094,358)           (42,827)         (7,670,372)

CURRENT TAX EXPENSE                                                            -                  -                   -

DEFERRED TAX EXPENSE                                                           -                  -                   -
                                                                   -------------      -------------       -------------

NET LOSS                                                      $       (1,094,358) $         (42,827) $      (7,670,372)
                                                                   -------------      -------------       -------------

LOSS PER COMMON SHARE                                         $           (.07)   $           (.01)  $            (.74)
                                                                   -------------      -------------       -------------
</TABLE>







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


<PAGE>



                                 SKYFRAMES, INC.
                          [A Development Stage Company]

                  UNAUDITED CONDENSED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                      For the Three Months              From Inception on
                                                                       Ended September 30,             May 24, 2002 Through
                                                                   -------------------------------        September 30,
                                                                       2003               2002                2003
                                                                   -------------      -------------       -------------
<S>                                                           <C>                 <C>                <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
   Net loss                                                   $       (1,094,358) $         (42,827) $       (7,670,372)
   Adjustments to reconcile net loss to net cash
     used by operating activities:
     Amortization of discounts on notes payable                           78,455                  -              84,705
     Bad debt expense                                                      8,975                  -               8,975
     Depreciation                                                            418                133               1,627
     Loss on settlement of potential claims                                    -                  -           1,350,000
     Loss on extinguishment of debt                                            -                  -             651,000
     Non-cash expenses paid by issuing common stock                            -             46,063              51,063
     Non-cash services paid by issuing common stock                      727,000                  -           4,057,750
     Non-cash services paid by granting options/warrants                       -                  -             583,050
     Changes in assets and liabilities:
       (Increase) decrease in accounts receivable                          5,500                  -             (19,425)
       (Increase) in deferred loan costs                                 (17,083)                 -             (30,833)
       (Increase) in prepaid expenses                                    (14,054)            (1,000)            (14,054)
       (Increase) in deposits                                                  -             (6,700)             (8,950)
       Increase (decrease) in accounts payable                           (16,208)                 -             104,380
       Increase (decrease) in accounts payable - related party            (3,500)           (35,863)            131,149
       Increase in customer deposits and unearned
         revenue                                                          14,328                  -              37,658
       Increase in accrued payroll and related expenses                   41,000             23,421              80,825
       Increase in accrued interest                                        4,398                  -               5,353
                                                                   -------------      -------------       -------------
         Net Cash (Used) by Operating Activities                        (265,129)           (16,773)           (596,099)
                                                                   -------------      -------------       -------------
CASH FLOWS FROM INVESTING ACTIVITIES:
   Payments for property and equipment                                         -             (2,480)             (5,125)
                                                                   -------------      -------------       -------------
         Net Cash (Used) by Investing Activities                               -             (2,480)             (5,125)
                                                                   -------------      -------------       -------------
CASH FLOWS FROM FINANCING ACTIVITIES:
   Increase in bank overdraft                                              7,224                  -               7,224
   Proceeds allocated to beneficial conversion feature
     of notes payable                                                    125,012                  -             176,738
   Proceeds from notes payable                                                 -                  -              69,000
   Payments on notes payable                                             (15,000)                 -             (20,000)
   Proceeds from sale of warrants                                        124,988                  -             223,262
   Proceeds from issuance of common stock                                      -             25,000             145,000
                                                                   -------------      -------------       -------------
         Net Cash Provided by Financing Activities                       242,224             25,000             601,224
                                                                   -------------      -------------       -------------
NET INCREASE (DECREASE) IN CASH                                          (22,905)             5,747                   -

CASH AT BEGINNING OF PERIOD                                               22,905                  -                   -
                                                                   -------------      -------------       -------------
CASH AT END OF PERIOD                                         $                -  $           5,747  $                -
                                                                   -------------      -------------       -------------
</TABLE>

                                   [Continued]


<PAGE>



                                 SKYFRAMES, INC.
                          [A Development Stage Company]

                  UNAUDITED CONDENSED STATEMENTS OF CASH FLOWS

                                   [CONTINUED]

<TABLE>
<CAPTION>
                                                                      For the Three Months             From Inception on
                                                                       Ended September 30,            May 24, 2002 Through
                                                                   -------------------------------       September 30,
                                                                       2003               2002                2003
                                                                   -------------      -------------       -------------

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
   Cash paid during the period for:
<S>                                                           <C>                 <C>                <C>
     Interest                                                 $                -  $               -  $                -
     Income taxes                                             $                -  $               -  $                -
</TABLE>

SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
   For the three months ended September 30, 2003:
     The Company  issued  581,277  shares of common stock for services  rendered
valued at $727,000.

     The Company sold a $250,000  convertible  note payable for cash of $125,012
     and recorded a discount of $124,988.  The Company also  recorded a discount
     of $125,012  for the  beneficial  conversion  feature of the note  payable.
     During the three months ended  September  30,  2003,  the Company  expensed
     $41,666 of the discounts.

     The Company expensed $36,789 of the discounts on a note payable recorded in
the prior year.

   For the three months ended September 30, 2002:

     The Company  issued  6,000,000  shares of common  stock for  computers  and
     related equipment with a carryover basis of $0 and as repayment of expenses
     totaling  $46,063  which had been paid by a related  party on behalf of the
     Company.


















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


<PAGE>



                                 SKYFRAMES, INC.
                          [A Development Stage Company]

                NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     ORGANIZATION - Skyframes, Inc. ("the Company") was organized under the laws
     of the State of Utah on June 4, 1926 as M. M. Lead  Company.  In 1980,  the
     Company  changed its name to Basic Energy,  Inc. In March 2003, the Company
     changed its name to Skyframes, Inc.

     SkyFrames,  Inc. ("SFI") was organized under the laws of the State of Texas
     on May 24, 2002 as CyberVillage, Inc. In July 2002, SFI changed its name to
     SkyFrames,  Inc. On January 28, 2003, the Company  acquired SFI pursuant to
     an  Exchange  Agreement  and  SFI was  dissolved  in the  acquisition.  The
     acquisition of SFI has been accounted for as a recapitalization of SFI in a
     manner similar to a reverse purchase [See Note 2].

     The Company  provides  high-speed  information  access via satellites.  The
     Company  has  not yet  generated  significant  revenues  from  its  planned
     principal  operations  and is  considered a  development  stage  company as
     defined in Statement of Financial  Accounting  Standards No. 7. The Company
     has, at the present time, not paid any dividends and any dividends that may
     be paid in the future will depend upon the  financial  requirements  of the
     Company and other relevant factors.

     CONDENSED FINANCIAL STATEMENTS - The accompanying financial statements have
     been prepared by the Company  without audit.  In the opinion of management,
     all adjustments (which include only normal recurring adjustments) necessary
     to present  fairly the financial  position,  results of operations and cash
     flows at  September  30, 2003 and 2002 and for the periods  then ended have
     been made.

     Certain information and footnote disclosures normally included in financial
     statements  prepared  in  accordance  with  generally  accepted  accounting
     principles in the United States of America have been  condensed or omitted.
     It is  suggested  that  these  condensed  financial  statements  be read in
     conjunction with the financial statements and notes thereto included in the
     Company's  June 30,  2003  audited  financial  statements.  The  results of
     operations  for the  periods  ended  September  30,  2003  and 2002 are not
     necessarily indicative of the operating results for the full year.

     FISCAL YEAR - The Company's fiscal year-end is June 30th.

     CASH AND CASH  EQUIVALENTS  - The Company  considers all highly liquid debt
     investments  purchased  with a maturity of three  months or less to be cash
     equivalents.

     ACCOUNTS  AND LOANS  RECEIVABLE  - The Company  records  accounts and loans
     receivable at the lower of cost or fair value.  The Company  determines the
     lower of cost or fair value of  non-mortgage  loans on an individual  asset
     basis.  The Company  recognizes  interest  income on an account  receivable
     based on the stated  interest  rate for past-due  accounts  over the period
     that the account is past due. The Company  recognizes  interest income on a
     loan  receivable  based on the  stated  interest  rate over the term of the
     loan. The Company  accumulates  and defers fees and costs  associated  with
     establishing  a receivable to be amortized  over the estimated  life of the
     related receivable.  The Company estimates allowances for doubtful accounts
     and loan  losses  based  on the aged  receivable  balances  and  historical
     losses.  The Company  records  interest  income on delinquent  accounts and
     loans  receivable only when payment is received.  The Company first applies
     payments received on delinquent  accounts and loans receivable to eliminate
     the outstanding  principal.  The Company charges off uncollectible accounts
     and loans receivable when management estimates no possibility of collecting
     the related receivable. The Company considers accounts and loans receivable
     to be past due or delinquent based on contractual terms.


<PAGE>



                                 SKYFRAMES, INC.
                          [A Development Stage Company]

                NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [CONTINUED]

     INVENTORY - Inventory  is carried at the lower of cost or market  using the
     first-in, first-out (FIFO) method.

     PROPERTY AND  EQUIPMENT - Property and  equipment  are stated at cost or at
     the  shareholder's  carryover  basis.  Expenditures  for major renewals and
     betterments  that extend the useful  lives of property  and  equipment  are
     capitalized upon being placed in service.  Expenditures for maintenance and
     repairs are charged to expense as incurred.  Depreciation is computed using
     the  straight-line  method over the estimated useful lives of the assets of
     three to five years. In accordance  with Statement of Financial  Accounting
     Standards No. 144, "Accounting for the Impairment or Disposal of Long-Lived
     Assets",  the Company  periodically  reviews its property and equipment for
     impairment.

     WEBSITE COSTS - The Company has adopted the  provisions of Emerging  Issues
     Task  Force  00-2,  "Accounting  for Web  Site  Development  Costs."  Costs
     incurred in the  planning  stage of a website are  expensed as research and
     development  while costs incurred in the development  stage are capitalized
     and amortized over the life of the asset,  estimated to be three years.  As
     of September  30, 2003,  the Company has  capitalized  a total of $1,075 of
     website  costs.  The Company did not incur any  planning  costs and did not
     record  any  research  and  development  costs for the three  months  ended
     September 30, 2003 and 2002.

     REVENUE  RECOGNITION - Revenue from subscription  services is recognized in
     the period when the related  services are provided.  Revenue from equipment
     sales is recognized when the related equipment is installed and accepted by
     the customer.

     ADVERTISING  COSTS - Advertising  costs,  except for costs  associated with
     direct-response  advertising,  are charged to operations when incurred. The
     costs of direct-response advertising are capitalized and amortized over the
     period  during which future  benefits are expected to be received.  For the
     three months ended September 30, 2003 and 2002,  respectively,  advertising
     costs amounted to $5,974 and $0.

     STOCK-BASED  COMPENSATION  - The Company has two  stock-based  compensation
     plans  [See  Note  5].  The  Company  accounts  for  its  plans  under  the
     recognition  and  measurement  principles  of Accounting  Principles  Board
     Opinion No. 25,  "Accounting  for Stock  Issued to  Employees"  and related
     Interpretations.  The following table  illustrates the effect on net income
     and loss per share if the Company  had  applied the fair value  recognition
     provisions  of  Statement  of  Financial   Accounting  Standards  No.  123,
     "Accounting for  Stock-Based  Compensation",  to the Company's  stock-based
     employee compensation.


<PAGE>



                                 SKYFRAMES, INC.
                          [A Development Stage Company]

                NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [CONTINUED]

<TABLE>
<CAPTION>
                                                                                                          From Inception on
                                                                       For the Three Months                 May 24, 2002
                                                                        Ended September 30,                    Through
                                                                ------------------------------------       September  30,
                                                                    2003                  2002                  2003
                                                                ----------------     ----------------      ----------------
<S>                                                           <C>                 <C>                   <C>
         Net loss, as reported                                $       (1,094,358) $           (42,827)  $        (7,670,372)
         Add: Stock-based employee
           compensation expense
           included in reported net income                                     -                  -                   4,000
         Deduct: Total stock-based
           employee compensation
           expense determined under fair
           value based method                                                  -                  -                  (5,000)
                                                                ----------------     ----------------      ----------------
         Pro forma net loss                                   $       (1,094,358) $           (42,827) $         (7,671,372)
                                                                ----------------     ----------------      ----------------

         Loss per common share,
           as reported                                        $           (.07)   $           (.01)    $          (.74)
         Loss per common share,
           pro forma                                          $           (.07)   $           (.01)    $          (.74)
</TABLE>

     DEBT  EXTINGUISHMENT - The Company accounts for  extinguishment  of debt in
     accordance  with  Statement  of  Financial  Accounting  Standards  No. 145,
     "Rescission  of FASB  Statements  No.  4,  44,  and 64,  Amendment  of FASB
     Statement  No. 13, and  Technical  Corrections".  SFAS No. 145 rescinds the
     requirement that gains and losses from extinguishment of debt be classified
     as an extraordinary item.

     INCOME TAXES - The Company  accounts for income  taxes in  accordance  with
     Statement of Financial  Accounting Standards No. 109 "Accounting for Income
     Taxes" [See Note 6].

     LOSS PER SHARE - The computation of loss per share is based on the weighted
     average  number  of shares  outstanding  during  the  period  presented  in
     accordance  with  Statement  of  Financial  Accounting  Standards  No. 128,
     "Earnings Per Share" [See Note 8].

     ACCOUNTING   ESTIMATES  -  The  preparation  of  financial   statements  in
     conformity  with  generally  accepted  accounting  principles in the United
     States of America  requires  management to make  estimates and  assumptions
     that affect the reported amounts of assets and liabilities, the disclosures
     of  contingent  assets  and  liabilities  at  the  date  of  the  financial
     statements,  and the reported  amount of revenues  and expenses  during the
     reported period. Actual results could differ from those estimated.


<PAGE>



                                 SKYFRAMES, INC.
                          [A Development Stage Company]

                NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [CONTINUED]

     RECENTLY ENACTED ACCOUNTING  STANDARDS - Statement of Financial  Accounting
     Standards  ("SFAS") No. 146,  "Accounting for Costs Associated with Exit or
     Disposal  Activities",  SFAS No. 147,  "Acquisitions  of Certain  Financial
     Institutions  - an  Amendment  of FASB  Statements  No. 72 and 144 and FASB
     Interpretation   No.  9",  SFAS  No.  148,   "Accounting   for  Stock-Based
     Compensation  - Transition  and Disclosure - an Amendment of FASB Statement
     No.  123",  SFAS  No.  149,  "Amendment  of  Statement  133  on  Derivative
     Instruments  and Hedging  Activities",  and SFAS No. 150,  "Accounting  for
     Certain Financial  Instruments with Characteristics of both Liabilities and
     Equity",  were  recently  issued.  SFAS No. 146,  147,  149 and 150 have no
     current  applicability  to the  Company  or their  effect on the  financial
     statements  would not have been  significant.  The Company adopted SFAS No.
     148 during the year ended June 30, 2003.

     RECLASSIFICATION - The financial  statements for periods prior to September
     30,  2003  have  been   reclassified   to  conform  to  the   headings  and
     classifications used in the September 30, 2003 financial statements.

     RESTATEMENT - The financial  statements  have been restated for all periods
     presented to reflect the  recapitalization of SkyFrames,  Inc. [See Note 2]
     and to reflect a 1-for-100  reverse stock split  effected by the Company on
     January 28, 2003 [See Notes 2 and 5].

NOTE 2 - EXCHANGE AGREEMENT

     On  January  28,  2003,  the  Company  signed an  Exchange  Agreement  with
     SkyFrames,  Inc.  ("SFI").  The  agreement  called for the Company to issue
     8,500,000  post-split shares of its common stock to the former shareholders
     of SFI for all  85,000  outstanding  shares  of  SFI's  common  stock.  The
     agreement  also called for the Company to effect a 1-for-100  reverse stock
     split just prior to the acquisition. After the reverse split and just prior
     to  the  acquisition,  the  Company  had  84,679  shares  of  common  stock
     outstanding.  The  acquisition  closed  on  January  28,  2003 and has been
     accounted for as a recapitalization of SFI in a manner similar to a reverse
     purchase.  Accordingly,  the  equity  transactions  have been  restated  to
     reflect the recapitalization of SFI and the operations of the Company prior
     to the date of acquisition have been eliminated.  The financial  statements
     reflect the operations of SFI from its inception.


<PAGE>



                                 SKYFRAMES, INC.
                          [A Development Stage Company]

                NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

NOTE 3 - PROPERTY AND EQUIPMENT

     The  following is a summary of property and  equipment  recorded at cost or
     carryover basis, less accumulated depreciation as of:

                                                        September 30,
                                                            2003
                                                        -------------
         Computers and related equipment           $                -
         Office equipment                                       1,900
         Software                                               2,150
         Website                                                1,075
                                                        -------------
                                                                5,125
         Less: accumulated depreciation                        (1,627)
                                                        -------------
                                                   $            3,498
                                                        -------------

         DEPRECIATION  EXPENSE FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2003 AND
2002 WAS $418 AND $133, RESPECTIVELY.

NOTE 4 - NOTES PAYABLE

     NOTES PAYABLE CONSIST OF THE FOLLOWING AT:

<TABLE>
<CAPTION>
                                                                                  September 30,
                                                                                      2003
                                                                                  -------------
<S>                                                                               <C>
         ONE-YEAR 8% $150,000 SENIOR CONVERTIBLE PROMISSORY NOTE
         PAYABLE TO OCEAN DRIVE HOLDINGS LLC MATURING IN JUNE 2004
         CONVERTIBLE WITH ACCRUED INTEREST AT THE CREDITOR'S OPTION INTO
         COMMON STOCK AT $.50 PER SHARE, NET OF DISCOUNTS OF $106,961             $    43,039

         ONE-YEAR 8% $250,000 SENIOR CONVERTIBLE PROMISSORY NOTE
         PAYABLE TO OCEAN DRIVE HOLDINGS LLC MATURING IN AUGUST 2004
         CONVERTIBLE WITH ACCRUED INTEREST AT THE CREDITOR'S OPTION INTO
         COMMON STOCK AT $.50 PER SHARE, NET OF DISCOUNTS OF $208,334                  41,666

         SIX-MONTH UNSECURED 5% NOTE PAYABLE TO KEYVAN SAMINI,
         AN INDIVIDUAL, MATURING IN AUGUST 2003, CURRENTLY IN DEFAULT                   5,000
                                                                                   -------------
                                                                                   $    89,705
                                                                                   -------------
</TABLE>

     In June 2003,  the Company sold the $150,000  convertible  note payable for
     $51,726  and  recorded  a  discount  of  $98,274.  Due  to  the  beneficial
     conversion feature of the note, the Company recorded an additional discount
     of $51,726.  Both discounts are being  amortized over the term of the note.
     For the three months ended September 30, 2003 and 2002,  respectively,  the
     Company amortized $36,789 and $0 of the discounts.


<PAGE>



                                 SKYFRAMES, INC.
                          [A Development Stage Company]

                NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

NOTE 4 - NOTES PAYABLE [Continued]

     In August 2003, the Company sold the $250,000  convertible note payable for
     $125,012  and  recorded  a  discount  of  $124,988.  Due to the  beneficial
     conversion feature of the note, the Company recorded an additional discount
     of $125,012.  Both discounts are being amortized over the term of the note.
     For the three months ended September 30, 2003 and 2002,  respectively,  the
     Company amortized $41,666 and $0 of the discounts.

     For the three  months  ended  September  30,  2003 and 2002,  respectively,
     interest expense amounted to $91,211 and $0.

NOTE 5 - CAPITAL STOCK, OPTIONS AND WARRANTS

     COMMON STOCK - In September  2003, the Company issued 250,000 shares of its
     previously  authorized  but unissued  common stock to the  Company's  Chief
     Executive  Officer.  The shares were issued for employee services valued at
     $307,500 (or $1.23 per share).

     In September  2003,  the Company  issued  10,000  shares of its  previously
     authorized  but unissued  common stock.  The shares were issued to a vendor
     for price discounts valued at $12,300 (or $1.23 per share).

     In  August  2003,  the  Company  issued  66,777  shares  of its  previously
     authorized but unissued common stock. The shares were issued for consulting
     services valued at $80,000 (or approximately $1.20 per share).

     In  July  2003,  the  Company  issued  100,000  shares  of  its  previously
     authorized but unissued common stock. The shares were issued for consulting
     services valued at 110,000 (or $1.10 per share).

     In  July  2003,  the  Company  issued  100,000  shares  of  its  previously
     authorized but unissued common stock. The shares were issued for consulting
     services valued at $130,000 (or $1.30 per share).

     In July 2003, the Company issued 54,500 shares of its previously authorized
     but unissued common stock.  The shares were issued for consulting  services
     valued at $87,200 (or $1.60 per share).

     In June 2003, the Company issued 50,000 shares of its previously authorized
     but unissued  common stock.  The shares were issued for cash of $50,000 (or
     $1.00 per share).

     In  June  2003,  the  Company  issued  100,000  shares  of  its  previously
     authorized but unissued common stock. The shares were issued for consulting
     services valued at $195,000 (or $1.95 per share).

     In May 2003, the Company issued 135,000 shares of its previously authorized
     but unissued common stock of which 100,000 shares were issued as part of an
     investment  banking agreement with Ocean Drive Capital,  LLC [See Note 10].
     The shares were issued for consulting services valued at $209,250 (or $1.55
     per share).


<PAGE>



                                 SKYFRAMES, INC.
                          [A Development Stage Company]

                NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

NOTE 5 - CAPITAL STOCK, OPTIONS AND WARRANTS [CONTINUED]

     In May 2003, the Company issued 250,000 shares of its previously authorized
     but unissued common stock.  The shares were issued for consulting  services
     valued at $347,500 (or $1.39 per share).

     In May 2003, the Company issued 500,000 shares of its previously authorized
     but unissued common stock.  The shares were issued as collateral  valued at
     $695,000 (or $1.39 per share) [See Note 9].

     In April and May 2003,  the Company issued 140,000 shares of its previously
     authorized but unissued common stock. The shares were issued for consulting
     services valued at $175,000 (or $1.25 per share).

     In  March  2003,  the  Company  issued  900,000  shares  of its  previously
     authorized  but  unissued  common  stock.  The  shares  were  issued  as  a
     settlement valued at $1,350,000 (or $1.50 per share) [See Note 9].

     In  March  2003,  the  Company  issued  150,000  shares  of its  previously
     authorized but unissued common stock. The shares were issued for consulting
     services valued at $217,500 (or $1.45 per share).

     In  March  2003,  the  Company  issued  200,000  shares  of its  previously
     authorized but unissued common stock. The shares were issued for consulting
     services valued at $240,000 (or $1.20 per share).

     In  March  2003,  the  Company  issued  40,000  shares  of  its  previously
     authorized but unissued common stock as part of a consulting agreement with
     Client Services International LLC [See Note 10]. The shares were issued for
     consulting services valued at $64,000 (or $1.60 per share).

     In  March  2003,  the  Company  issued  40,000  shares  of  its  previously
     authorized but unissued common stock as part of a consulting agreement with
     thestockpage.com  Inc. [See Note 10]. The shares were issued for consulting
     services valued at $76,000 (or $1.90 per share).

     In February  2003,  the Company  issued  425,000  shares of its  previously
     authorized  but unissued  common stock.  The shares were issued for cash of
     $20,000 and for consulting services valued at $192,500 (or $.50 per share).

     In February  2003,  the Company  issued  500,000  shares of its  previously
     authorized  but unissued  common  stock to the  Company's  Chief  Executive
     Officer.  The shares were issued for employee  services  valued at $250,000
     (or $.50 per share).

     In January 2003,  the Company  issued  2,878,000  shares of its  previously
     authorized  but unissued  common stock.  The shares were issued for cash of
     $75,000  and for  consulting  services  valued at  $1,364,000  (or $.50 per
     share).

     In January  2003,  the  Company  entered  into an Exchange  Agreement  with
     SkyFrames,  Inc.  which has been  accounted  for as a  recapitalization  of
     SkyFrames, Inc. [See Note 2].


<PAGE>



                                 SKYFRAMES, INC.
                          [A Development Stage Company]

                NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

NOTE 5 - CAPITAL STOCK, OPTIONS AND WARRANTS [CONTINUED]

     In August  2002,  the Company  issued  6,000,000  shares of its  previously
     authorized but unissued common stock.  The shares were issued for computers
     and related equipment  recorded at the shareholder's  carryover basis of $0
     and as  repayment  of expenses of $46,063  which had been paid by a related
     party (or  approximately  $.0077).  This  issuance  resulted in a change in
     control of the Company.

     In May 2002,  in  connection  with its  organization,  the  Company  issued
     2,500,000  shares of its previously  authorized but unissued  common stock.
     The shares were issued as payment of organization costs of $5,000 (or $.002
     per share).

         CANCELLATION - In June 2003, the Company's former president contributed
         500,000 shares of common stock back to the company for cancellation.

         STOCK SPLIT - On January  28,  2003,  the Company  effected a 1-for-100
         reverse stock split. The financial statements for all periods presented
         have been restated to reflect the stock split.

     ADVISOR  COMPENSATION  PLAN - In  February  2003,  the  Company's  Board of
     Directors adopted the Advisor  Compensation  Plan ("AC Plan").  The AC Plan
     provides for issuing up to 3,000,000  shares of common stock to  employees,
     directors,  consultants and advisors.  At September 30, 2003,  total shares
     available to be issued under the AC Plan amounted to 755,803.

     STOCK OPTIONS - In February  2003,  the Company  granted  10,000 options to
     purchase common stock at $.10 per share as part of an Employment  Agreement
     [See  Note  9].  The  options  will  vest  in  February  2004  and  will be
     exercisable  for  five  years  following  vesting.   The  Company  recorded
     compensation of $4,000 for the intrinsic value of the options.

     In March 2003, the Company granted 100,000 options to purchase common stock
     at $1.00 per share for consulting services valued at $144,590.  The options
     vested immediately and are exercisable for two years.

     STOCK  WARRANTS - In May 2003,  the  Company  granted  300,000  warrants to
     purchase common stock at $1.45 per share as part of an engagement agreement
     with Grant Bettingen,  Inc. [See Note 10] for consulting services valued at
     $434,460.  The warrants  vested  immediately  and are exercisable for three
     years.

     In June 2003, the Company sold 150,000 warrants to purchase common stock at
     $2.07 per share for cash of $98,274 as part of a note  payable  arrangement
     with Ocean Drive  Holdings  LLC. The warrants  vested  immediately  and are
     exercisable for five years.

     In August 2003, the Company sold 200,000  warrants to purchase common stock
     at $1.15 per share and 50,000  warrants to purchase  common  stock at $1.20
     per share for cash of $124,988 as part of a note payable  arrangement  with
     Ocean Drive SF  Associates  LLC. The warrants  vested  immediately  and are
     exercisable for five years.


<PAGE>



                                 SKYFRAMES, INC.
                          [A Development Stage Company]

     NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

NOTE 5 - CAPITAL STOCK, OPTIONS AND WARRANTS [CONTINUED]

     A summary of the status of the options and warrants is presented below.

<TABLE>
<CAPTION>
                                                                                                          From Inception on
                                                                       For the Three Months                 May 24, 2002
                                                                        Ended September 30,                    Through
                                                              ---------------------------------------      September  30,
                                                                    2003                  2002                  2003
                                                              ------------------     ----------------      ----------------
                                                                       Weighted              Weighted              Weighted
                                                                        Average               Average               Average
                                                                       Exercise              Exercise              Exercise
                                                               Shares    Price     Shares      Price     Shares      Price
                                                              -------    -------   -------    -------    -------    -------
<S>                                                           <C>      <C>         <C>       <C>         <C>       <C>
         Outstanding at beginning of
           period                                             560,000  $    1.51         -   $      -          -   $      -
         Granted                                              250,000       1.16         -          -    810,000       1.40
         Exercised                                                  -          -         -          -          -          -
         Forfeited                                                  -          -         -          -          -          -
         Expired                                                    -          -         -          -          -          -
                                                              -------    -------   -------    -------    -------    -------
         Outstanding at end of period                         810,000  $   1.40          -   $      -    810,000   $   1.40
                                                              -------    -------   -------    -------    -------    -------
         Weighted average fair value
           of options and warrants granted
          during the period                                   250,000  $   1.00          -   $      -    810,000   $   1.44
                                                              -------    -------   -------    -------    -------    -------
</TABLE>

     The fair value of each option and warrant  granted is estimated on the date
     granted using the  Black-Scholes  option pricing model,  with the following
     assumptions  for grants on February  1, 2003:  risk-free  interest  rate of
     3.02%,  expected  dividend yield of zero,  expected lives of five years and
     expected volatility of 375%. The following assumptions were used for grants
     on March 21, 2003:  risk-free  interest  rate of 1.80%,  expected  dividend
     yield of zero, expected lives of two years and expected volatility of 414%.
     The following  assumptions were used for grants on May 19, 2003:  risk-free
     interest rate of 1.66%,  expected dividend yield of zero, expected lives of
     three years and expected volatility of 372%. The following assumptions were
     used for  grants  on June  16,  2003:  risk-free  interest  rate of  2.14%,
     expected dividend yield of zero,  expected lives of five years and expected
     volatility  of 355%.  The  following  assumptions  were used for  grants on
     August 5, 2003:  risk-free interest rate of 3.37%,  expected dividend yield
     of zero, expected lives of five years and expected volatility of 330%.


<PAGE>



                                 SKYFRAMES, INC.
                          [A Development Stage Company]

                NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

NOTE 5 - CAPITAL STOCK, OPTIONS AND WARRANTS [CONTINUED]

     A  summary  of the  status  of the  options  and  warrants  outstanding  at
September 30, 2003 is presented below:

<TABLE>
<CAPTION>
                                     Options and Warrants Outstanding              Options and Warrants Exercisable
                                     -------------------------------------------          -------------------------
            Range of                       Weighted-Average    Weighted-Average                   Weighted-Average
            Exercise          Number           Remaining           Exercise           Number          Exercise
             Prices         Outstanding    Contractual Life          Price          Exercisable         Price
           -----------       -----------      --------------      --------------      ---------      --------------
<S>                           <C>              <C>            <C>                   <C>          <C>
         $         .10        10,000           5.3 years      $             .10          -       $                -
         $        1.00        100,000          1.5 years                   1.00       100,000                 1.00
         $ 1.15 - 1.20        250,000          4.9 years                   1.16       250,000                 1.16
         $        1.45        300,000          2.6 years                   1.45       300,000                 1.45
         $        2.07        150,000          4.7 years                   2.07       150,000                 2.07
                             -----------      --------------      --------------      ---------      --------------
                              810,000          3.6 years      $            1.40       800,000    $            1.42
</TABLE>

     STOCK  COMPENSATION  PLAN - In  September  2003,  the  Company's  Board  of
     Directors  approved a stock  compensation  plan and  reserved  1,000,000 of
     common stock to be issued  under the plan.  As of  September  30, 2003,  no
     shares have been issued from this plan.

NOTE 6 - INCOME TAXES

     The Company  accounts  for income  taxes in  accordance  with  Statement of
     Financial Accounting Standards No. 109, "Accounting for Income Taxes". SFAS
     No.  109  requires  the  Company  to  provide a net  deferred  tax asset or
     liability  equal to the expected future tax benefit or expense of temporary
     reporting  differences  between  book and tax  accounting  methods  and any
     available  operating  loss or tax credit  carryforwards.  At September  30,
     2003,  the Company has available  unused  operating loss  carryforwards  of
     approximately  $6,918,000,  which may be  applied  against  future  taxable
     income and which expire in various years through 2024.

     At  September  30,  2003,   the  total  of  all  deferred  tax  assets  was
     approximately  $2,601,000 and the total of all deferred tax liabilities was
     approximately  $0. The amount of and ultimate  realization  of the benefits
     from the deferred tax assets for income tax purposes is dependent, in part,
     upon the tax laws in effect, the future earnings of the Company,  and other
     future events,  the effects of which cannot be  determined.  Because of the
     uncertainty  surrounding  the  realization of the loss  carryforwards,  the
     Company has established a valuation allowance of approximately  $2,601,000.
     The net change in the valuation allowance was approximately $388,000 during
     the three months ended September 30, 2003.


<PAGE>



                                 SKYFRAMES, INC.
                          [A Development Stage Company]

                NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

NOTE 6 - INCOME TAXES [CONTINUED]

     The temporary  differences  gave rise to the  following  deferred tax asset
     (liability):

<TABLE>
<CAPTION>
                                                                                           September 30,
                                                                                               2003
                                                                                        ------------------
<S>                                                                                     <C>
                  Excess of tax over financial
                    accounting depreciation                                             $            1,066
                  Accrued compensation                                                              15,936
                  Net operating loss carryover                                                   2,580,573
                  Bad debt allowance                                                                 3,348

     The  components of federal  income tax expense from  continuing  operations
     consisted of the following for the three months ended:

<CAPTION>
                                                                                           September 30,
                                                                                               2003
                                                                                        ------------------
<S>                                                                                     <C>
                  Current income tax expense:
                      Federal                                                           $                -
                      State                                                                              -
                                                                                        ------------------
                  Net current tax expense                                               $                -
                                                                                        ------------------

                  Deferred tax expense (benefit) resulted from:
                      Excess of tax over financial
                        accounting depreciation                                         $               56
                      Accrued compensation                                                          (8,774)
                      Bad debt allowance                                                            (3,348)
                      Net operating loss carryover                                                (376,185)
                      Valuation allowance                                                          388,251
                                                                                        ------------------
                  Net deferred tax expense                                              $                -
                                                                                        ------------------

     Deferred  income  tax  expense  results  primarily  from  the  reversal  of
     temporary timing differences between tax and financial statement income.

     The reconciliation of income tax from continuing operations computed at the
     U.S.  federal  statutory  tax rate to the  Company's  effective  rate is as
     follows for the three months ended:

<CAPTION>
                                                                                           September 30,
                                                                                               2003
                                                                                        ------------------
<S>                                                                                               <C>
                  Computed tax at the expected
                    federal statutory rate                                                         34.00%
                  State income taxes, net of federal benefit                                        3.30
                  Other                                                                            (1.82)
                  Valuation allowance                                                             (35.48)
                                                                                        ------------------
                  Effective income tax rates                                                        0.00%
                                                                                        ------------------
</TABLE>


<PAGE>



                                 SKYFRAMES, INC.
                          [A Development Stage Company]

                NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

NOTE 7 - GOING CONCERN

     The accompanying financial statements have been prepared in conformity with
     generally accepted  accounting  principles in the United States of America,
     which contemplate continuation of the Company as a going concern.  However,
     the Company was only  recently  formed and has not yet been  successful  in
     establishing  profitable  operations.  Further,  the  Company  has  current
     liabilities in excess of current  assets.  These factors raise  substantial
     doubt about the ability of the Company to continue as a going  concern.  In
     this regard,  management  is proposing  to raise any  necessary  additional
     funds not provided by operations  through loans or through additional sales
     of its  common  stock.  There  is no  assurance  that the  Company  will be
     successful in raising this  additional  capital or in achieving  profitable
     operations.  The financial  statements do not include any adjustments  that
     might result from the outcome of these uncertainties.

NOTE 8 - LOSS PER SHARE

         THE FOLLOWING DATA SHOWS THE AMOUNTS USED IN COMPUTING LOSS PER SHARE:

<TABLE>
<CAPTION>
                                                                                                          From Inception on
                                                                       For the Three Months                 May 24, 2002
                                                                        Ended September 30,                    Through
                                                                -------------------------------------      September  30,
                                                                    2003                  2002                  2003
                                                                ----------------     ----------------      ----------------
<S>                                                           <C>                 <C>                <C>
         Loss available to common
         shareholders (numerator)                             $       (1,094,358) $         (42,827) $       (7,670,372)
                                                                ----------------     ----------------      ----------------
         Weighted average number
         of common shares outstanding
         used in loss per share during
         the period (denominator)                                     14,663,441          6,282,609          10,324,041
                                                                ----------------     ----------------      ----------------
</TABLE>

     At September 30, 2003, the Company had 110,000 outstanding options, 700,000
     outstanding  warrants and notes payable  convertible into 810,166 shares of
     common stock which were not used in the  computation  of dilutive  loss per
     share because their effect would be anti-dilutive.  Dilutive loss per share
     was not presented, as the Company had no common stock equivalent shares for
     all periods presented that would affect the computation of diluted loss per
     share.

NOTE 9 - RELATED PARTY TRANSACTIONS

     ACCOUNTS PAYABLE - At September 30, 2003,  officers and shareholders of the
     Company  were owed a total of  $131,149  for  expenses  which  they paid on
     behalf of the Company and accrued amounts owed to them.


<PAGE>



                                 SKYFRAMES, INC.
                          [A Development Stage Company]

                NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

NOTE 9 - RELATED PARTY TRANSACTIONS [CONTINUED]

     NOTE PAYABLE AND LOSS OF  EXTINGUISHMENT OF DEBT - In May 2003, the Company
     issued 500,000 shares of common stock to Bricap,  LLC, an entity controlled
     by the  Company's  former  President.  The shares were issued as collateral
     valued at $695,000 [See Note 5] on a $44,000  no-interest  unsecured demand
     note payable.  In June 2003, the Company  defaulted on the note and Bricap,
     LLC accepted the 500,000 shares of common stock,  which had been previously
     issued,  as payment in full,  resulting in a loss on extinguishment of debt
     of $651,000.

     STOCK  ISSUANCES - In September  2003, the Company issued 250,000 shares of
     common stock to the Company's Chief Executive Officer for employee services
     valued at $307,500 [See Note 5].

     In February  2003, the Company issued 500,000 shares of common stock to the
     Company's Chief Executive  Officer for employee services valued at $250,000
     [See Note 5].

     In August 2002,  the Company  issued  6,000,000  shares of common stock for
     computers  and equipment  with a carryover  basis of $0 and as repayment of
     expenses of $46,063 which had been paid by a related party [See Note 5].

     EMPLOYMENT  AGREEMENT - In  February  2003,  the Company  signed a one-year
     Employment  Agreement  with the  Company's  Chief  Executive  Officer.  The
     agreement  calls for the  Company  to pay a base  salary of  $5,000,  issue
     500,000 shares of common stock vesting at 25,000 shares per month and grant
     10,000 options to purchase  common stock at $.10 per share  exercisable for
     five years [See Note 5].  Upon  completion  of  $500,000  in  funding,  the
     agreement  provides for the salary to increase to $10,000 per month and for
     issuance of an additional  250,000  shares of common  stock.  The agreement
     also  provides  for  three  years of  extensions.  In  February  2003,  the
     Company's  Board of  Directors  amended the  agreement  so that all 500,000
     shares of common stock  initially  issued to the Company's  Chief Executive
     Officer vested immediately.  In June 2003, the Company's Board of Directors
     amended the agreement to increase the Company's Chief  Executive  Officer's
     salary to $10,000 per month  effective June 1, 2003. In September 2003, the
     Company's Board of Directors  determined that the required funding had been
     obtained  by the  Company  for the  Company's  Chief  Executive  Officer to
     receive the 250,000 additional shares of common stock.

     DIRECTOR FEES - In April 2003, the Company's Board of Directors  determined
     that each director  should receive $1,000 for each Board meeting  attended;
     however, this policy has not yet been put into effect.

     SETTLEMENT OF POTENTIAL  CLAIMS - In March 2003, the Company issued 900,000
     shares  of  common  stock to  Bricap,  LLC,  an  entity  controlled  by the
     Company's former  President.  The shares were issued as a settlement valued
     at $1,350,000 [See Note 5] for potential claims against the Company related
     to the technology used by the Company in its operations.


<PAGE>



                                 SKYFRAMES, INC.
                          [A Development Stage Company]

                NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

NOTE 10 - COMMITMENTS AND CONTINGENCIES

     EXCHANGE AGREEMENT / RELEASE AND SETTLEMENT  AGREEMENT - On August 3, 2002,
     SkyFrames,  Inc. ("SFI") signed an Exchange Agreement with Helsinki Capital
     Partners,  Inc.  (Helsinki").  The  agreement  called for Helsinki to issue
     8,500,000 shares of Helsinki's  common stock to the former  shareholders of
     SFI  for  all  85,000   outstanding  shares  of  SFI's  common  stock.  The
     acquisition  closed  on August  31,  2002;  however,  the  acquisition  was
     subsequently  rescinded.  On January  28,  2003,  SFI signed a Release  and
     Settlement Agreement with Helsinki. The rescission agreement called for the
     former  shareholders  of SFI to return the  8,500,000  shares of Helsinki's
     common stock and to receive back their 85,000 shares of SFI's common stock.
     The financial  statements  have been restated to reflect the acquisition as
     having been rescinded.

     SATELLITE  SERVICE  AGREEMENT  /  PURCHASE  OPTION - In October  2002,  the
     Company signed a Satellite  Service  Agreement with Clear Channel Satellite
     Services ("CCSS") to purchase preemptible  satellite bandwidth and power on
     a month-to-month  basis. The Company paid a $6,000  refundable  deposit and
     rental  payments  are 75% of gross  revenues  derived  from use of the CCSS
     satellite with monthly  minimums of $5,820.  The agreement also grants CCSS
     the  exclusive  right to acquire the Company for 24 months  after 18 months
     operations  at the greater of gross annual  revenues or fair market  value.
     The  agreement  grants the  Company  first right of refusal to convert to a
     non-preemptible  status. The agreement also sets minimum prices the Company
     can charge for its  services and calls for a 3% increase in monthly fees at
     each anniversary of the agreement.

     OFFICE LEASES - In September  2002, the Company signed a 31-month lease for
     office space in Costa Mesa, California beginning March 1, 2003. The Company
     paid a $1,836 refundable security deposit and rental payments are initially
     $1,751 per month  increasing  each September  30th and reaching  $1,836 per
     month during the third year. Minimum future lease payments under this lease
     for the twelve month periods ended  September 30, 2004 and 2005 are $21,521
     and $22,033, respectively.

     In October 2002,  the Company  signed a two-year  lease for office space in
     Oceanside,  California beginning October 1, 2002. The Company paid a $1,114
     refundable  deposit  and rental  payments  are $1,142 per month  during the
     first year and $1,189 per month  during  the second  year.  Minimum  future
     lease payments under this lease for the twelve month period ended September
     30, 2004 are $14,268.

     ENGAGEMENT  AGREEMENT  - In  May  2003,  the  Company  signed  a  six-month
     Engagement Agreement with Grant Bettingen, Inc. The Company granted 300,000
     warrants to purchase common stock at $1.45 per share  exercisable for three
     years [See Note 5]. The Company also pays $1,500 per month and will pay 10%
     of the proceeds from any joint venture or  acquisition  negotiated by Grant
     Bettingen. The agreement can be extended up to six additional months.

     INVESTMENT   BANKING  AGREEMENT  -  In  May  2003,  the  Company  signed  a
     three-month  Investment  Banking  Agreement with Ocean Drive  Capital,  LLC
     ("Ocean").  The Company issued 100,000 shares of common stock to Ocean [See
     Note 5] and Ocean was to receive 10% of any funds  raised for the  Company.
     If Ocean  had been  able to  raise  at least  $2,000,000  by the end of the
     initial term, then the agreement was to renew for an additional three-month
     term.


<PAGE>



                                 SKYFRAMES, INC.
                          [A Development Stage Company]

                NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

NOTE 10 - COMMITMENTS AND CONTINGENCIES [CONTINUED]

     CONSULTING  AGREEMENTS  - In March  2003,  the  Company  signed a six-month
     consulting agreement with  thestockpage.com  Inc. The Company issued 40,000
     shares of common  stock [See Note 5] and will pay 5% of any funds  provided
     through the efforts of thestockpage.com Inc.

     In June 2003,  the Company  signed a six-month  consulting  agreement  with
     Trilogy  Capital  Partners,  Inc. The  agreement  called for the Company to
     grant 180,000  performance-based  warrants to purchase common stock at $.01
     per share  exercisable  for five years with 90,000 vesting if the Company's
     stock price reached $3.00 per share and 90,000 if the Company's stock price
     reached $4.00 per share.  The agreement  also called for the Company to pay
     $5,000 per month for consulting  services.  Following the initial six-month
     term,  the  agreement  was  to  continue  on a  month-to-month  basis.  The
     agreement was cancelled prior to the issuance of any warrants.

     In July 2003,  the Company  signed a nine-month  Consulting  Agreement with
     Client Services  International  LLC. The agreement  covers 40,000 shares of
     common stock which were issued in March 2003 [See Note 5] and calls for the
     Company  to make  seven  payments  of $5,000  in  exchange  for  consulting
     services.

NOTE 11 - CONCENTRATIONS

     ACCOUNTS  RECEIVABLE  - A  significant  percent of the  Company's  accounts
     receivable  at  September  30,  2003 were owed by only two  customers.  The
     following  table  lists  the  percent  of the  receivables  owed  by  those
     customers that  accounted for 10% or more of the total accounts  receivable
     at September 30, 2003:

         Customer A        55%
         Customer B        45%

     REVENUES - The Company has just recently  commenced  operations  and all of
     the revenues  received by the Company are from a limited number of clients,
     the loss of which  could have a material  impact on the  operations  of the
     Company.

NOTE 12 - SUBSEQUENT EVENTS

     ASSIGNMENT - In October 2003, a related party assigned the exclusive  right
     to use patent-pending  virtual onboard switching  technology to the Company
     in exchange for $1,000.

     CONSULTING  AGREEMENT - In November  2003,  the Company signed a three-year
     Consulting  Agreement with Kevin  Woodbridge.  The agreement  calls for the
     Company to pay $3,000 per month plus 6% of any funds  provided  through the
     efforts of Kevin Woodbridge.


<PAGE>


PART 1 - ITEM 2

                MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                       CONDITION AND RESULTS OF OPERATIONS


Safe Harbor Statement

             This Form 10-QSB contains certain forward-looking  statements.  For
this  purpose  any  statements  contained  in  this  Form  10-QSB  that  are not
statements of historical  fact may be deemed to be  forward-looking  statements.
Without  limiting  the  foregoing,   words  such  as  "may,"  "will,"  "expect,"
"believe,"  "anticipate," "estimate" or "continue" or comparable terminology are
intended to  identify  forward-looking  statements.  These  statements  by their
nature  involve  substantial  risks and  uncertainties,  and actual  results may
differ materially  depending on a variety of factors including,  but not limited
to, the absence of long-term  financial  resources,  our ability to find working
capital,  technical issues relating to our obtaining satellite time, our ability
to provide timely  customer  service and shipment of equipment given that we are
short on working  capital,  and  compliance  of our customers  with  contractual
terms. You should not place undue reliance on these forward-looking  statements,
which reflect our opinions only as of the date of this Quarterly Report.  Except
as required by law, we undertake no obligation to announce publicly revisions we
make to these  forward-looking  statements  to  reflect  the effect of events or
circumstances that may arise after the date of this report. All written and oral
forward-looking  statements  made  subsequent  to the  date of this  report  and
attributable  to us or persons  acting on our behalf are expressly  qualified in
their  entirety by this section.  You should  carefully  review the risk factors
described in other documents we file from time to time with the SEC.


Management  Discussion  and  Analysis  of  Financial  Condition  and  Results of
Operations

Overview

             The  Company is an early  stage  provider  of  low-cost  high-speed
secure  Internet  broadband  services.  SkyFrames,  founded  in  2002,  delivers
broadband speeds to rural locations that enable  applications to be delivered in
a manner that were previously  unattainable.  This reliable  technology platform
delivers speeds equal to or greater than terrestrial  broadband in these various
rural areas. There are over 20,000 communities in the U.S. alone that would gain
significant benefit from SkyFrames  services.  This market continues to grow due
to past  events  such as 9/11 and  unforeseen  man-made  or  natural  disasters.
Skyframes  presents a viable  redundancy  or  alternate  solution  to the costly
expansion of broadband installation.  Applications for the Company's product and
services include:  Corporate data networks,  distance learning centers, disaster
recovery,  government  municipalities  applications,  information  distribution,
rural  telecommunications  initiatives,  and  backup  terrestrial  data  support
infrastructure.  Even today,  the Company is  involved  in  attempting  to bring
broadband to the military troops overseas in Iraq.

<PAGE>

             There are two main product offerings to deliver these services. The
first is VSAT (Very  Small  Aperture  Terminal)  systems,  which can be deployed
immediately to areas where there is little or no  connectivity.  SkyFrames is an
ideal system for Internet access for rural  communities.  This product will also
be used in business  continuity and disaster  recovery  situations,  providing a
diverse path backup system.  Management believes this system is very competitive
and provides a quality  offering above some existing or legacy  systems  offered
currently in the marketplace. Our proprietary software allows the implementation
of bandwidth on demand protocol with DAMA (Demand Assigned  Multiple Access) and
static IP addressing. SkyFrames's advanced satellite product called VOS (Virtual
Onboard  Switching)  was  designed to provide a secure  intelligent  routing and
switching  firmware  design that  interoperates  cohesively  with  international
standards for uplink and downlink  equipment as well as various  terrestrial  IP
networks.  This  technology  implements  a unique  deployment  of digital  video
broadcast  (DVB-S)  technology for the creation of a mesh Internet backbone with
very low latency.  This highly  efficient  systems  major  feature is that it is
extremely  secure and operates in its own closed  environment,  thus providing a
true private network,  no public switches.  Both products allow for the creating
of broadband hotspots in rural areas.

             Both these products and the continued  subscriber base developed by
each user on the system  installed will generate  SkyFrames  revenue.  A typical
installed  site will pay monthly  user fees for access to the system.  Sales are
generated by a direct sales force and through VARs (Value Added Resellers).  The
Company has recently begun selling these products and management believes a good
selling effort is under way. Revenues for the first year start up ended June 30,
2003 were limited to $53,925 in sales to only a handful of small VSAT  customer,
at a rate of  approximately  $450 per month.  Subsequent  to June 30,  2003,  we
entered  into a number of  contracts  valued  at  $200,000.  However,  delays in
shipping and slow  capital  development  have pushed off some revenue  until the
next quarter.  A value-added  reseller  that  specializes  in Wi-Fi and wireless
technologies is also beginning to work with SkyFrames technology and the initial
results are positive.  In March 2003,  SkyFrames  entered into an agreement with
CompUSA to deliver e-learning  content and courseware  throughout North America.
This project was designed to give the rural  student the same  opportunities  as
the students in the metropolitan  areas by connecting them to the Internet using
Skyframes  satellite delivery of Internet to these rural schools. In March 2003,
Skyframes  entered into an agreement with  Cyberguard;  a premier cyber security
company for customers  looking for highly  secures voice and data  transmissions
and we expect to see more of their  applications  associated with this broadband
offering.  Skyframes  has entered into an  agreement  with SSM  Technologies,  a
value-added  reseller  in Buffalo,  Wyoming to sell  Skyframes  VSAT units.  SSM
Technologies  provides  broadband  solutions to  multinational  corporations and
governments. No significant sales have developed with SSM Technologies to date.

             In September  2003,  SkyFrames  began an  initiative  to bring high
speed broadband to the troops in Iraq for the holidays.  A non-affiliate  of the
Company set up a  non-profit  foundation  with  respect to this  initiative.  To
receive more information  interested parties may go to the foundation's  website
at  WWW.FREEDOMCALLS.ORG.  We are awaiting government approval necessary to ship
our system  into Iraq.  We are hopeful  that we will get the needed  approval in
time for the Christmas season. We are working with several  organizations to try
and make this happen timely. These firms to date are Motorola, Vonage, AreoTech,
Broadband Wireless exchange, Altigen, Intelsat, and Solomon Technology to name

<PAGE>

some.  This  is a  military  operation  and  great  care  must  be  observed  in
introducing technology during a military conflict.

             In September  2003,  the Company  entered  into an  agreement  with
ComGuard  CTS  to  supply  high-speed  VSAT  equipment  and  broadband  Internet
services.   ComGuard   CTS   is   a   technology   company   that   focuses   on
telecommunications,  application  development,  support and education in Canada.
The  Company  expects  to  generate  revenues  in the second  quarter  from this
agreement.

             In October  2003,  the  Company  signed a letter of intent with The
Canadian  Hearing Society based in Toronto,  Canada to build  satellite/wireless
infrastructures  that support businesses and citizens of rural communities while
addressing  the  needs of deaf and hard of  hearing  people  throughout  Canada,
Mexico, the Caribbean, the United States and Latin America.

             Closer  to home,  we have  begun a  state-by-state  effort to bring
closed  system  broadband to certain  government  agencies.  These  systems will
provide greater  information  flow to outlining areas where local government can
be directly  online each day 24/7 to state capital offices such as the Secretary
of State. Since each state has many county offices to communicate with, a closed
network system on a high-speed  connection at lower costs is needed and provides
us with a new market opportunity.

             In June 2003,  Skyframes sold wireless broadband systems to Coffman
Cove, Alaska for rural connectivity. Installation took place in the beginning of
June and Management  believes  installation was successful.  However, we need to
revisit the area to make sure the system  continues to perform at peak levels in
the  winter  period.  Skyframes  has  begun to sell to some of the  other  rural
communities in Alaska that are in need of broadband  connectivity.  $7.5 million
in grant money in Alaska was  allocated  for the  specific  purpose of providing
broadband connectivity to rural communities of Alaska. In May, Skyframes entered
into an agreement with NetWorth Inc., a value-added  integrator  specializing in
disaster recovery  systems.  NetWorth has not sold a Skyframes' VSAT solution to
date;  however,  they are delivering on many WiFi systems and we look forward to
working  with them and their  customers  when a system is  needed.  NetWorth  is
providing backup for the business continuity market and utilize mobile broadband
units. NetWorth's initial focus is on the Florida market where natural disasters
can shut down communications systems for days.

             Our sales for the fiscal year ending June 30, 2003 were $53,925 and
additional sales are developing. The further growth of future sales is difficult
to predict because we are in our initial phase of operations and capital raising
activity.  We are capital  sensitive and market  developments  have been slow to
grow do to previous  competitive  company  offerings  failing as well as several
reorganizations.  There are many  factors  that  could  impact  our  ability  to
perform,  but our limited history makes the level of future  revenues  extremely
difficult to predict. We could have technical  problems;  personnel problems and
we do have  continuing  liquidity  problems.  One or more of our customers could
fail to perform, and this would adversely impact our results of operations.

<PAGE>

Critical Accounting Policies and Estimates

             Our discussion and analysis of our financial  condition and results
of operations are based upon our financial statements,  which have been prepared
in accordance with accounting principles generally accepted in the United States
of America.  The preparation of these financial  statements  requires us to make
estimates and judgments that affect the reported amounts of assets, liabilities,
revenues  and  expenses,  and  related  disclosures  of  contingent  assets  and
liabilities.  On an ongoing basis,  we evaluate our estimates,  including  those
related to reserves,  impairment of long-lived  assets and estimates of costs to
complete  contracts.  We base our  estimates  on  historical  experience  and on
various  other   assumptions   that  we  believe  to  be  reasonable  under  the
circumstances,  the results of which form the basis for making  judgments  about
the carrying value of assets and liabilities  that are not readily apparent from
other sources.  Actual results may differ from these  estimates  under different
assumptions or  conditions;  however,  we believe that our estimates,  including
those for the above-described items, are reasonable.

RESULTS  OF  START-UP  OPERATIONS  FOR THE  SEPTEMBER  2003  QUARTER  AND FISCAL
YEAR-END OF JUNE 30, 2003.

             Revenues  for the fiscal  year ended June 30,  2003 was $53,925 and
for the three months-ended  September 30, 2003 was $15,375. The Company expended
most of its resources  dealing with  post-merger  issues and becoming current on
their public  reports.  The Company  expects  revenues to continue  grow as more
resources are allocated to selling  activities.  There is no prior sales history
for the  Company  prior to the January  2003 and the Company had no  significant
operations or revenues for the three months-ended September 30, 2002.



                           Three Month ending          Year Ending
                           SEPTEMBER 30 2003          JUNE 30, 2003
                           -----------------          -------------

Revenues                       $15,375                    $53,925

             The Company has entered into a contract  with Clear  Channel as its
satellite  link  provider.  This  contract  is on a revenue  share  basis and we
believe  provides a solid financial  model on which to project margin.  Activity
for the fiscal year-ended June 30, 2003 and for the three months-ended September
30, 2003 was minimal while the Company began its selling  activity.  A number of
factors will drive costs in the future as well as revenues;  however,  ratios to
revenue should not fluctuate  appreciably.  The primary cost expense  associated
with providing  these  services,  after the hardware  installation,  will be the
ongoing satellite broadband service fees, which are directly proportional to the
number of users on the system.

<TABLE>
<CAPTION>
                                        Three Months Ended          Year Ending        May 24, 2002 through
                                        SEPTEMBER 30, 2003         JUNE 30, 2003         SEPTEMBER 30, 2003
                                        ------------------         -------------         ------------------
<S>                                          <C>                   <C>                        <C>
General & Administrative expenses            $995,216              $4,487,025                 $5,568,512
Cost of Equipment Sales                      $  5,974              $   38,614                 $   44,588
</TABLE>

             For  the  fiscal   year-ended   of  June  30,  2003,   general  and
administrative   expenses  increased   substantially  as  the  Company  activity
increased   on  a  non-cash   basis.   This  trend   continued  as  general  and
administrative  expenses  for the  three  months-ended  September  30,  2003 was
$995,216.  Costs of goods  for the three  months-ended  September  30,  2003 was
$5,974.  The  principal  increase  was  due to  the  addition  to the  Company's


<PAGE>

management, use of outside consultants,  and the sales ramp up activity. We paid
substantially  all of our start up costs for  services by the issuance of common
stock valued at $3,330,750 post split share values during the fiscal  year-ended
June 30, 2003 and  approximately  $727,000 in stock value for goods and services
for the three months-ended.  This has produced a sizable loss carry forward. The
increase  in general  and  administrative  costs is expected to continue as more
customers are added.  However,  these expenses  (except for the expenses accrued
for stock  compensation,  which were more related to start up  expenses)  should
become more  proportionate  to revenue as time passes and not  adversely  effect
margins in the future.  Staff increases will be in sales  administration,  order
entry, quality assurance and customer service support.

LIQUIDITY AND CAPITAL RESOURCES

             Management  and  shareholders  are currently  funding the Company's
financial requirements with short-term advances and private placements of equity
with  non-related  parties  through  September  30,  2003 and by  accruing  some
expenses.  On June 16, 2003,  the Company  entered in to an  Investment  banking
agreement with Ocean Drive Capital.  This agreement  details the plan for rising
on a private basis up to $5 million.  This relationship  should help the company
in meeting its  capital  requirements.  On June 16,  2003 Ocean began  funding a
series of bridge loans  beginning  with $150,000 and another  $250,000 in August
2003 to assist the company in meeting its  short-term  needs.  Both bridge loans
accrue interest at a per annum rate of 8% per year, have maturity dates one year
from the date of the  promissory  notes and are  convertible  into shares of our
common stock at a conversion price of $0.50 per share.  Given the recent ramp up
of the selling  activity,  pending  orders during the remainder of the September
2003  quarter and the  increasing  operating  expenses  the company will require
additional capital. Management intends to continue to seek the funding necessary
to meet all the capital and  operating  requirements.  However,  no guarantee to
raise the  necessary  capital has been entered  into, it will be strictly a best
effort basis. We are also  investigating the possibility of accounts  receivable
financing.  There can be no assurance that our efforts to obtain  financing will
be successful or that proceeds  raised from the sale of our  securities or other
financing  activates  will be  sufficient  to fund the  operating  activities or
service any indebtedness as a result of the capital raising  activities.  If the
funds  received are  insufficient,  then the Company's  ability to continue as a
going concern could be adversely affected.

ECONOMIC CONDITIONS AND TRENDS

             Management  believes  current  economic  conditions and the capital
markets  generally will impact the timing and the results of any private sale of
securities  or other  financing  activities.  The Company is dependent on timely
financing to support  product sales flow and customer  deliveries.  Accordingly,
management has kept hard costs down and continue to require customers to provide
a (50%) fifty  percent down payment  with each order.  However,  the other (50%)
fifty  percent is carried by the  company  until the product is  delivered.  The
results are a 30 to 45 day carry time before the Company receives the balance of
its payments. This negatively impacts accounts payables timing. This concern for
long term  financing may have an adverse effect on the Company  performance,  if
not  resolved in the near  future.  Management  believes it can work through the
short-term  issues for some period of time.  However,  future sales  levels,  if
substantial,  will  increase  pressure  on  the  need  for a long  term  funding
solution.

<PAGE>

             We are a  development  stage  company  as that term is  defined  in
paragraphs  8 and 9 of SFAS No. 7. Our  activities  to date have been limited to
seeking  capital;  seeking supply contracts and development of a business market
for its  products  and  services.  Our  auditors  have  included an  explanatory
paragraph  in  their  report  on  our  financial  statements,  relating  to  the
uncertainty  of our  business as a going  concern,  due to our lack of operating
history,  lack of profitable  operations and working capital deficit.  We do not
believe that conventional financing,  such as bank loans, is available to us due
to these factors. Management believes that it will be able to raise the required
funds for operations from one or more future offerings, and to be able to affect
our business plan. However,  Management believes that Skyframes ability to raise
significant amounts of financing, will be dependent on favorable capital markets
and also on obtaining  either a small supply contract or other validation of our
technology by an  independent  source,  and other risks inherent in the business
may affect the outcome of Management's plans.

New Accounting Standards

In November 2002, the Financial Accounting Standards Board issued Interpretation
No. 45,  "Guarantor's  Accounting and Disclosure  Requirements  for  Guarantees,
Including  Guarantees of Indebtedness of Others," ("FIN 45"). FIN 45 requires us
to recognize, at the inception of a guarantee, a liability for the fair value of
the obligation undertaken in the issuance of the guarantee.  FIN 45 is effective
for  guarantees  issued or modified  after  December  31, 2002.  The  disclosure
requirements  effective  for the  year  ending  December  31,  2002  expand  the
disclosures required by a guarantor about its obligations under a guarantee. The
adoption of the  disclosure  requirements  of this  statement did not impact our
financial position, results of operations or cash flows.

In  December  2002,   Statement  of  Financial  Accounting  Standards  No.  148,
"Accounting for Stock-Based  Compensation - Transition and  Disclosure,"  ("SFAS
148") was issued.  SFAS 148 amends Statement of Financial  Accounting  Standards
No. 123,  "Accounting  for  Stock-Based  Compensation,"  ("SFAS 123") to provide
alternative  methods  of  transition  for a  voluntary  change to the fair value
method of accounting for stock-based employee  compensation.  In addition,  SFAS
148  amends  the  disclosure  requirements  of  SFAS  123 to  require  prominent
disclosures in both annual and interim financial  statements about the method of
accounting for stock-based  employee  compensation  and the effect of the method
used on the reported  results.  The provisions of SFAS 148 are effective for the
financial statements for fiscal years ending after December 15, 2002 and interim
periods  beginning  after  December  15, 2002.  The  adoption of the  disclosure
requirements of this statement did not impact our financial position, results of
operations or cash flows.

In May 2003,  the FASB issued SFAS No. 150,  "Accounting  for Certain  Financial
Instruments with  Characteristics  of both Liabilities and Equity." SFAS No. 150
establishes  standards  for  how  an  issuer  classifies  and  measures  certain
financial  instruments with  characteristics  of both liabilities and equity. It
requires that an issuer classify a financial instrument that is within its scope
as a liability  (or an asset in some  circumstances).  SFAS No. 150 is effective
for  financial  instruments  entered into or modified  after May 31,  2003,  and
otherwise is effective at the  beginning of the first interim  period  beginning
after June 15, 2003. It is to be implemented by reporting the cumulative  effect
of a change in an accounting principle for financial  instruments created before
the  issuance  date of SFAS No. 150 and still  existing at the  beginning of the
interim period of adoption.  Restatement is not permitted.  We do not expect the
adoption of SFAS No. 150 to have a material impact upon our financial  position,
cash flows or results of operations.



<PAGE>






ITEM 3.  DISCLOSURE CONTROLS AND PROCEDURES

         The Company  carried out an evaluation,  under the supervision and with
the participation of the Company's management, including the Company's President
and Chief Executive Officer (who is also the Company's Chief Financial  Officer)
of the  effectiveness  of the design and operation of the  Company's  disclosure
controls and procedures as of the end of the period covered by this report.  The
evaluation  was  undertaken  in  consultation  with  the  Company's   accounting
personnel.  Based on that evaluation,  the President and Chief Executive Officer
concluded that the Company's  disclosure  controls and procedures were effective
to ensure  that  information  required  to be  disclosed  by the  Company in the
reports that it files or submits  under the  Securities  Exchange Act of 1934 is
recorded,  processed,  summarized and reported within the time periods specified
in the Securities and Exchange Commission's rules and forms. The Company's first
annual report since the  completion of a recent  reverse  merger  resulted in an
initial delay in recording,  processing  and  reporting  information  due to the
change in management.

         There were no significant changes in the Company's internal controls or
in other factors that could significantly affect internal controls subsequent to
the date of their evaluation.

PART II - ITEM 1  LEGAL PROCEEDINGS

Not applicable.

PART II - ITEM 2  CHANGES IN SECURITIES AND USE OF PROCEEDS

We issued the following securities during the quarter ended September 30, 2003:

In August 2003, the Company signed a $250,000 Senior Convertible Promissory Grid
Note  payable to Ocean Drive SF  Associates,  LLC, a  accredited  investor.  The
warrants  vested  immediately,  are  exercisable  for five years. Of the 250,000
warrants,  200,000 are exercisable at $1.15 per share and 50,000 are exercisable
at $1.20 per share.  This transaction was exempt from  registration  pursuant to
Regulation D promulgated under the Securities Act of 1933.

<PAGE>

In  September  2003,  the Company  issued  250,000  shares of common stock to an
employee for services  valued at $307,500,  or $1.23 per share.  The  securities
were exempt from the  registration  requirements  of the  Securities Act of 1933
pursuant to section 4(2) of the Act unless otherwise stated.

In July,  August and September 2003, the Company issued 331,277 shares of common
stock to consultants for services valued at $419,500, or approximately $1.27 per
share.  The securities  were exempt from the  registration  requirements  of the
Securities  Act of 1933  pursuant  to section  4(2) of the Act unless  otherwise
stated.


PART II - ITEM 3  DEFAULTS UPON SENIOR SECURITIES

Not applicable

PART II - ITEM 4  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

Not applicable.

PART II - ITEM 5  OTHER INFORMATION

On  September  29,  2003,  the  Company  adopted its 2003  Consultant  Plan that
authorized the issuance of common stock up to 1,000,000  shares all of which the
Company intends to register on an S-8 Registration Statement.



PART II - ITEM 6  EXHIBITS AND REPORTS ON FORM 8-K

EXHIBITS:

2.1      Exchange Agreement, dated January 29, 2003(1)
3.1      Articles of Incorporation, as amended (2)
3.2      By-laws, as amended (2)
10.1     2003 Consultant Plan
10.2     Securities Purchase Agreement, dated August 5, 2003, by and between the
         registrant and Ocean Drive SF Associates, LLC (3)
10.3     Stock Purchase Warrant,  dated August 5, 2003, issued to Ocean Drive SF
         Associates, LLC (3)
10.4     Senior  Convertible  Promissory  Note,  dated  August 5,  2003,  by and
         between the registrant and Ocean Drive SF Associates, LLC (3)
10.5     Registration Rights Agreement, dated August 5, 2003, by and between the
         registrant and Ocean Drive SF Associates, LLC (3)
10.6     Stock  Purchase  Warrant,  dated  August 5, 2003,  by and  between  the
         registrant and Ocean Drive SF Associates LLC (3)



<PAGE>

31       Certification Pursuant to Rule 13a-14(a) and 15d-14(a) (3)
32       Certification Pursuant to Section 1350 of Title 18 of the United States
         Code (3)

(1)  Incorporated by reference from the Company's report on Form 10-KSB filed on
     November 26, 2003.
(2)  Incorporated by reference from the Company's registration statement on Form
     10-SB filed on October 27, 1999.
(3)  Filed herewith.

REPORTS ON FORM 8-K

On July 8, 2003 the  registrant  filed a Form 8-K to disclose it had  obtained a
$150,000 financing.


                                   SIGNATURES

In accordance with the  requirements of the Exchange Act, the registrant  caused
this  report to be  signed on its  behalf  by the  undersigned,  thereunto  duly
authorized.

November 26, 2003
                                  SKYFRAMES, INC.



                                  By: /s/ JAMES W. FRANCE
                                     -------------------------------------
                                     President,  Chief Financial Officer and
                                     Duly Authorized Officer
                                     (Principal accounting and financial officer
                                     for the quarter)