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

                                   FORM 10-KSB
                                   -----------

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

     For the fiscal year ended December 31, 2003

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

     For the transition period from       to
                                    -----    ------

                        Commission file number 333-74846

                        RAPTOR NETWORKS TECHNOLOGY, INC.
                        --------------------------------
           (Name of small business issuer as specified in its charter)

          65 Enterprise Road, Suite 420, Aliso Viejo, California 92656
          ------------------------------------------------------------
                     (Address of principal executive office)

                                 (949) 330-6540
                                 --------------
                         (Registrant's telephone number)

        Colorado                                           84-1573852
------------------------                         -------------------------------
(State of incorporation)                         (IRS Employer Identification #)

       Securities registered under Section 12(b) of the Exchange Act: None

         Securities registered under Section 12(g) of the Exchange Act:

                     Common Stock, par value $.001 per share

[X]  Check whether the issuer (1) has filed all reports  required to be filed by
Section 13 or 15(d) of the Securities  Exchange Act of 1934 during the preceding
12 months (or for such shorter  period that the  registrant was required to file
such reports), and (2) has been subject to such filing requirements for the past
90 days.

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

State issuer's revenues for the most recent fiscal year: $5,000.

The aggregate  market value of the voting and  non-voting  common equity held by
non-affiliates  was $34,440,896  computed by reference to or the average bid and
asked  price of such  common  equity,  the price at which the common  equity was
traded as of April 8, 2004. Such common equity held by non-affiliates represents
8,339,200 shares.

The number of shares  outstanding of Raptor  Networks  Technology,  Inc.  common
stock was 29,677,319 as of March 31, 2004.

Until   December  2,  2003,  the   Registrant's   common  stock  traded  on  the
Over-The-Counter  Bulletin Board under the symbol  "PFII".  On December 3, 2003,
the Registrant's name was changed to "Raptor Networks Technology,  Inc." and the
common stock began trading under the symbol "RPTN".

                       Documents Incorporated by Reference
                       -----------------------------------
Raptor Networks Technology, Inc. incorporates by reference no: (1) annual report
to  shareholders;  (2) proxy or information  statement;  nor, (3) any prospectus
filed pursuant to Rule 424(b) or (c) of the Securities Act of 1933.

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


<PAGE>




                                TABLE OF CONTENTS
                                -----------------

Part I
------

Item 1.     Description of Business..........................................3

Item 2.     Description of Property..........................................6

Item 3.     Legal Proceedings................................................6

Item 4.     Submission of Matters to a Vote
             of Security Holders.............................................6

Part II
-------

Item 5.     Market for Common Equity and
             Related Stockholder Matters.....................................7

Item 6.     Management's Discussion and
             Analysis or Plan of Operation...................................7

Item 7.     Financial Statements.............................................9

Item 8.     Changes and Disagreements with Accountants.......................9

Item 8(a)   Controls and Procedures..........................................9

Part III
--------

Item 9.     Directors, Executive Officers,
             Promoters and Control Persons; ................................11

Item 10.    Executive Compensation..........................................13

Item 11.    Security Ownership of Certain Beneficial
             Owners and Management and Related
             Stockholder Matters............................................14

Item 12.    Certain Relationships and
             Related Transactions...........................................15

Item 13.    Exhibits and Reports on Form 8-K................................15

Item 14.    Principal Accountant Fees and Services..........................17

Signatures

Certification














                                        2
<PAGE>





                                     PART I
                                     ------

         Special Cautionary Notice Regarding Forward-Looking Statements
         --------------------------------------------------------------

     Various matters discussed in this document and in documents incorporated by
reference herein,  including  matters discussed under the caption  "Management's
Discussion and Analysis of Financial  Condition and Results of Operations",  may
constitute forward-looking statements for purposes of the Securities Act and the
Securities Exchange Act. These forward-looking  statements may involve known and
unknown  risks,  uncertainties  and other  factors  which  may cause the  actual
results, performance or achievements of Pacific InterMedia, Inc. (the "Company")
to be materially  different from future  results,  performance  or  achievements
expressed or implied by such  forward-looking  statements.  The words  "expect",
"anticipate", "intend", "plan", "believe", "seek", "estimate", and other similar
expressions  are  intended  to identify  such  forward-looking  statements.  The
Company's actual results may differ  materially from the results  anticipated in
these  forward-looking  statements  due to a variety of factors.  All written or
oral  forward-looking  statements  attributable  to the  Company  are  expressly
qualified in their entirety by these cautionary statements.


Item 1.  Description of Business
--------------------------------

     The Registrant (or the "Company") was organized under the laws of the State
of Colorado on January 22, 2001.  The Company  offered EDGAR filing  services to
companies  outsourcing  the  formatting and  electronic  filing of  registration
statements,  periodic  reports  and other  forms with the U. S.  Securities  and
Exchange Commission but generated minimal revenues from its inception.

     On October  17,  2003,  the  Registrant  completed  a business  combination
transaction  with Raptor  Networks  Technology,  Inc., a closely held California
corporation   ("Raptor").   The  Registrant  acquired  all  of  the  issued  and
outstanding  capital stock of Raptor in a cashless common stock  share-for-share
exchange in which Raptor became a wholly-owned  subsidiary of the Company.  With
completion of the overall  acquisition  transaction,  the Company terminated its
previous  operations  and, by and through  Raptor  Networks  Technology,  became
engaged in the data network switching industry; in the design, production, sales
and service of standards-based  and proprietary high speed switching  technology
applied to sophisticated  inter-networking systems, operating in a large variety
of new and existing government and private sector network systems.

     The Company's  subsidiary is itself a start-up,  development stage company,
initially  formed in September,  2002 and  incorporated in July, 2003 to design,
manufacture and market an innovative, proprietary switching technology to enable
and enhance  advanced data  transmission in  internetworking  application.  With
completion of the  acquisition,  the Company entered the business of, and by and
through its wholly owned subsidiary.

     The Company continues to be in the earliest stage of commercial  operations
and has realized  virtually no revenues to date (i.e.  April 14,  2004).  It has
designed a series of related products it calls the Ether-Raptor  line, a modular
set of  Ethernet  switching  components  based  on a common  set of  proprietary
hardware and software  modules  which can be produced  with line cards from base
units.  In the Company's view, its  Ether-Raptor  family of products have nearly
universal application to user's internetworking requirements and can be utilized
anywhere on a network where an advanced switch is required.




                                        3
<PAGE>





     Distributed  computing  and  accelerated  use of the Inernet have driven an
exponential  expansion in the use of internetworking for more than thirty years.
Networks in place today were  engineered  based upon  standards  and  technology
optimized for handling a single data type,  character  data,  that was prevalent
thirty years ago. Today's sophisticated applications often require multiple data
types with  speed and  bandwith  requirements  so high that  prevailing  network
technology  is  simply  not up to the task and  upgrade  is  generally  not cost
justifiable,  thereby  slowing the growth and  utilization  of advanced  network
applications,  or limited the total  available  number of subscribers on a given
network.

     New applications such or video on demand,  remote  synchronous data storage
mirroring,  global  clustering,  business  continuance,  disaster  recovery  and
distance learning are a few of the network applications types that will generate
increased and new revenue streams for any enterprise offering them. But the cost
to replace or upgrade existing networks with requisite, efficient high bandwidth
infrastructure  causes these new  applications  to be  financially  prohibitive.
Government  regulatory  requirements are also demanding system  replacements and
upgrades to be made as well, regardless of financial justification.

     The Registrant's switch technology provides Gigabit and 10 Gigabit Ethernet
communications at wire speed with Layer 2/3/4  Switching/Routing,  and excellent
bandwidth/priority control. One of the most difficult types of data to handle is
Video over Internet Protocol.  By optimizing the handling of all data packets on
a  network,  that is  treating  them as though  they were all  video  data,  the
Company's design and equipment enables true wire speed networks and achieves two
objectives for the user community.  First it enables voice, video,  storage, and
other  sophisticated  applications  that  enterprises  will use to establish new
revenues streams at a justifiable cost.  Secondly,  that ability is accomplished
by   augmenting,   rather   than   replacing,   the   existing   internetworking
infrastructure those enterprises now use, leveraging existing capital investment
in place by the user,  minimizing the additional  capital  expense  required for
supporting  these  new  applications  and  leading  to  increased  user  revenue
opportunities.

     The Company has produced its first prototypes and applied for nine process,
or utility, patents for the Ether-Raptor product series.

     By March 2004,  the Company  completed a build of  evaluation  units of its
launch  product,  the Ether  Raptor  1010.  The Company is now in the process of
placing these units with a number of high potential launch customers and systems
integrators. By the end of April, more than 30 of these evaluation units will be
in the hands of evaluation  customers;  revenue shipments will start in the time
period from late May to early June 2004. The Registrant  will expand its product
offering  throughout  the  remainder  of 2004 to  actively  market  half a dozen
distinct network switches.  This product evolution will commence at such time as
the first build of ER 1010 switches complete successful customer implementation.
The  Company  expects  product  performance  to improve  sequentially  through a
process of value  engineering and feature  enhancements  provided by vendors and
the  Company's  initiatives  alike.  In the same  period,  the  Company  expects
substantial cost improvements will be realized through volume efficiencies.

     The Company is on track to  substantially  reduce its  overhead  expense by
considering  current  relocating into a Federal  enterprise  zone, add headcount
only as necessary to reduce time to market, and investor incrementally below the
realized revenue curve.

     While  current  activity  and previous  letters of intent in the  Company's
hands may represent  substantial  near-term  prospective revenue, for the period



                                        4
<PAGE>





commencing with inception in September,  2003, to the present,  it has operated,
and is now operating,  at a loss and has realized only negligible revenue. While
increasingly  optimistic  with regard to prospective  business,  there can be no
assurance  that the Company  will not  encounter  unforeseen  and  unanticipated
obstacles to near-term  revenue,  or ultimately  profitability.  While  steadily
seeking  significant  additional capital, at March 31, 2004, the Company was, in
consequence, in dire financial straits.

Subsequent Development
----------------------

     On April 1,  2004,  however,  following  intensive  discussion  during  the
preceding  weeks with Alpine  Capital and others,  the Company  closed an equity
financing for gross  proceeds of $5.6 Million.  The funding was led by Satellite
Strategic  Finance  Associates  and  involved  several  institutional  investors
purchasing  3,200,000 shares of the  Registrant's  Common Stock and Series A and
Series B Common Stock Purchase  Warrants to purchase up to 6,400,000  additional
shares of the Company's  common stock which,  if exercised,  would  increase the
total gross value to the Company to $24 million.

     It is the  Company's  view that its  closing of this April 1, 2004 round of
financing enables full commercial launch of its high performance  Gigabit and 10
Gigabit Ethernet switch products.

Employees
---------

     For the fiscal year ending December 31, 2003, the Company had 20 employees,
including the the officers and directors of the Company.


Item 2.  Description of Property
--------------------------------

     On October 17,  2003;  as a result of  completing  the  acquisition  of the
Raptor Networks Technology  subsidiary,  the Registrant's principal offices came
to be located at 65 Enterprise Road, Suite 420, Aliso Viejo,  California  92656,
where its telephone number is (949) 330-6540.


Item 3.  Legal Proceedings
--------------------------

     The  Registrant  has been served with process in two  separate  state court
lawsuits originally filed in February of 2004 by former employees.  Both actions
name  the  Registrant's  wholly  owned  subsidiary,  three  of the  Registrant's
officers individually and from 1 to 50 unknown persons, or "Does" as Defendants.

     The first  complaint,  Shapiro  v.  Raptor  Networks  Technology,  Inc.,  a
                            ----------------------------------------------------
California  corporation,  et al, Case No.: 04 CC 02880 in the Superior  Court of
-------------------------------
California  for Orange  County,  purports  to be a claim for  establishment  and
enforcement of an alleged interest in certain of the  Registrant's  intellectual
property  asserted  by the  Plaintiff  and  supposedly  arising  from a  defunct
partnership  agreement  by  and  between  the  Plaintiff  and  two  (2)  of  the
Registrant's  officers,   Edwin  Hoffman  and  Ananda  Perera.  The  Plaintiff's
Complaint  alleges  eight  counts,   apparently  triggered  by  the  Plaintiff's
involuntary  termination  as an  employee  of the  Registrant  near  the  end of
January,  2004 and  prays for  various  and  sundry  damages  "in  excess of $10
Million".

     The Registrant has reviewed the Plaintiff's allegations and engaged counsel
to defend the Plaintiff's claim and allegations. To date, the case has only been
served and the Registrant has not filed or served a responsive  pleading.  Based



                                        5
<PAGE>





upon the allegations of the Complaint and consideration of the actual facts, the
Registrant  views the claim in all counts alleged to be wholly without merit and
accordingly,  frivolous.  The Registrant  intends to vigorously defend the claim
and to enforce each and all remedies available to it in the circumstances.

     The second  complaint,  Kelly,  Hemstreet  and Weiner vs.  Raptor  Networks
                             ---------------------------------------------------
Technology,  Inc., a California corporation,  et al, Case No. 04CC 03377 also in
---------------------------------------------------
the Superior Court of California  for the County of Orange,  purports to state a
claim for  wrongful  termination  and for false and  misleading  conduct  by the
Registrant  in the public  interest and for  emotional  distress and invasion of
privacy following and apparently arising from the involuntary termination of the
three  Plaintiffs by the Registrant  within from seven (7) to fourteen (14) days
of their respective hiring by the Registrant. The claim here too seeks a variety
of  monetary  rewards  but in  this  case  the  various  amounts  sought  by the
Plaintiffs are unspecified.

     The Registrant  views the second  complaint to be without merit  whatsoever
and intends to  vigorously  pursue total defense of the claim and each and every
remedy  available to it as named  Defendant in this frivolous  litigation by the
Plaintiffs.

     On April 5, 2004,  the  Registrant  received a letter from a local law firm
threatening suit against three of the Company's officers,  the Registrant itself
and the Company's  corporate counsel on behalf of the Company's former President
and  Director,   Lyle  Pearson.   The  letter  threatens  claims  for  "wrongful
termination,  breach of  contract,  breach of  fiduciary  duty and  fraud",  and
apparently  arises from Mr. Pearson's  resignation as an officer and director of
the Company on March 12, 2004. The Company  entered into a separation  agreement
with Mr. Pearson within days of his resignation  and is presently,  accordingly,
uncertain with respect to any basis to those threatened claims. In any event, in
the  circumstances,  the Registrant views the purported claims are unsupportable
and will defend and claim against Mr. Pearson if necessary.


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

     No matter was submitted  during the  Registrant's  former fiscal year ended
August 31, 2003 to a vote of security holders. A Special  Shareholder's  Meeting
was held in Denver,  Colorado  on November  31,  2003 to consider  and vote upon
proposed amendments to the Registrant's  Articles of Incorporation to change the
Company's name to "Raptor  Networks  Technology,  Inc.",  to change its official
address on file with the  Colorado  Secretary  of State to 65  Enterprise  Road,
Aliso Viejo,  California  and to ratify the Company's  acquisition of all of the
capital stock of the  Company's  wholly owned  subsidiary  closed on October 17,
2003, as set out in the  Registrant's  Current  Report on Form 8-K dated October
17, 2003, attached to the Notice of the Special Meeting.

     All of the matters submitted to a vote at the Special Meeting were approved
by  19,163,256  shares  voting,  or 94.8% of the shares  entitled to vote at the
Special  Meeting.  There  were no  votes  against  or  withheld  on any  matter.
Subsequently,  on December 15, 2003, the Registrant  changed its fiscal year end
to December 31st.

     The Company  reported a wholly-owned  acquisition  transaction in a Current
Report on Form 8-K filed October 22, 2003. On December 15, 2003,  the Registrant
filed an  amendment  to that Form 8-K to file  requisite  audited  and pro forma
financial  statements for the acquired entity.  The  Registrant's  former fiscal



                                        6
<PAGE>





year end was  August  31st and the  acquired  entity's  audit  was filed for the
period from inception (July 31, 2003) and ended September 30, 2003.

     Rather than adopting the  accounting  year of the acquired  subsidiary,  or
continuing  with  its  former  fiscal  year end of  August  31,  the  Registrant
determined  to change its fiscal  year end to  December 31 and files this Annual
Report on Form 10-KSB accordingly.


                                     PART II
                                     -------

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

     For the Registrant's former fiscal year ending August 31, 2003 there was no
established  public trading market for the Company's  Common Stock, as listed on
the OTC Bulletin Board under the Company's old symbol "PFII".  The  Registrant's
Common  Stock,  now traded under the symbol  "RPTN",  commenced  an  established
public trading market during  September,  2003, and has traded from then through
March 31, 2004 in the range of from  approximately  $2.20 per share to, briefly,
$6.00 per share and at an average trading price in that period of  approximately
$4.10 per share.

     The  quotations  provided  below are for the over the  counter  market  and
subsequent to October 17, 2003 presumably reflect completion of the Registrant's
acquisition of its wholly-owned  subsidiary Raptor Networks Technology,  Inc. on
that date.  The  quotations  provided are for the over the counter  market which
reflect interdealer prices without retail mark-up, mark-down or commissions, and
may not  represent  actual  transactions.  The bid  prices  indicated  have been
obtained from sources believed to be reliable:

Period                          Bid Price         Asked Price
------                          ---------         -----------
                              Low     High       Low       High
                             -----    ----      -----      ----

09/30/03 - 12/31/03          $2.10    $5.75     $2.20     $6.00
First Quarter 2004           $3.20    $4.65     $3.25     $4.90

     The  Company has never paid  dividends.  The  Company  does not  anticipate
paying any dividends on its common stock in the  foreseeable  future and intends
to devote any earnings to the development of its business.

     On October 17,  2003,  the  Registrant  issued and  transferred  a total of
19,161,256  shares  of its  restricted  Common  Stock  from its  authorized  but
previously  unissued Common Stock as the sole consideration in a share-for-share
exchange to acquire its wholly-owned  subsidiary and the  subsidiary's  business
and assets.

Holders
-------

     On March 31, 2004, the Registrant had 29,677,319 shares of its Common Stock
outstanding of which  1,034,000  shares are registered  free-trading  shares and
28,643,319 are restricted shares held by approximately 75 shareholders.


Item 6.  Management's Discussion and Analysis or Plan  of  Operation and Results
--------------------------------------------------------------------------------
         of Operations
         -------------

     In September,  2003, the Company  entered into an agreement to combine with
Raptor Networks Technology,  Inc., a closely-held California corporation, as its
wholly-owned  subsidiary.  With completion of the acquisition  transaction,  the
Company changed its name to Raptor  Networks  Technology,  Inc., and,  operating
solely  by and  through  its  subsidiary  became  engaged  in the  data  network
switching   industry;   in  the  design,   production,   sales  and  service  of
standards-based and proprietary high speed switching technology. As an aspect of



                                        7
<PAGE>





the  acquisition,  on October  17, 2003 the  officers  and  directors  of Raptor
Networks  Technology,  Inc.  were  appointed  the  management  and the  Board of
Directors of the Registrant.

     The  Company  has  designed  a  series  of  related   products  called  the
Ether-Raptor  line, a modular set of Ethernet  switching  components  based on a
common set of proprietary  hardware and software modules.  The Company considers
its  Ether-Raptor  family of products to have nearly  universal  application  to
users' inter-networking requirements.

     The  Company has  produced  its first  prototypes  and has applied for nine
process,  or utility,  patents for the Ether-Raptor  product line series. All of
the patent  applications  have been  assigned to the  Registrant.  The Company's
first Raptor product,  the Ether-Raptor  1010, is commercially  available and is
currently being marketed.

     For the period from  inception  of the  Registrant's  subsidiary,  July 24,
2003,  through the  Registrant's  new fiscal year ended  December 31, 2003,  the
Registrant realized only minimal revenue; and that only from service fees in the
amount of $5,000.  There was no revenue from product  sales.  The fee revenue it
did realize was only incidental to the Company's  product design and development
activities in the period.

     Expenses incurred for the period from inception,  July 24, 2003 to December
31, 2003, were $7,603,435,  comprised of cash disbursements for consulting fees,
salaries, and selling and general administrative expenses in the total amount of
$1,849,881 and restricted Common Stock issued for services valued at $5,753,554.

     At the end of the  First  Quarter  of 2004,  the  Registrant  has still not
realized any revenue  whatsoever  from product sales.  While various  evaluation
units have been  placed  with  potential  customers  for final  evaluation,  the
Company does not expect to begin  receipt of product sales revenue until late in
the Second Quarter of 2004.

Going Concern Considerations; Subsequent Developments
-----------------------------------------------------

     Raptor Networks Technology,  Inc. has incurred losses from operations since
inception and, while having secured apparently  substantial letters of intent to
purchase its product systems equipment when available,  to April 14, 2004 it has
no sales orders or  commitments  and has generated only  negligible  revenue and
significant  losses.  In order for the  Registrant  to  sustain  operations  and
implement  its business plan at and after March 31, 2004,  the Company  required
additional  capital to support  operations until sufficient revenue from product
sales can be achieved. Accordingly, the December 31, 2003 consolidated financial
statements would likely have expressed  substantial  going concern doubt arising
from those circumstances.

     On April 1, 2004,  however,  the Registrant  closed an equity financing for
gross  proceeds of $5.6  million.  The funding  was led by  Satellite  Strategic
Finance Associates and involved several  accredited and institutional  investors
purchasing  Common Stock of the Registrant  and Warrants to purchase  additional
Common  Stock.  While there is no assurance  that the purchase  Warrants will be
exercised,  if they are fully exercised according to their respective terms, the
total gross value to the Company of this equity  funding  would  increase to $24
million.

     By March 2004,  the Company  completed a build of  evaluation  units of its
launch product,  the Ether Raptor 1010. Buoyed by its recent financing  funding,
the Company is now in the  process of placing  these units with a number of high



                                        8
<PAGE>





potential launch customers and systems  integrators.  By the end of April,  more
than 30 of these evaluation units will be in the hands of evaluation  customers;
revenue  shipments  will  start in the time  period  from late May to early June
2004. The Registrant will expand its product  offering  throughout the remainder
of 2004 to actively market half a dozen distinct network  switches.  The Company
expects that this product  evolution will commence as the first build of ER 1010
switches  complete  successful  customer  implementation.  The  Company  further
expects product performance to improve  sequentially  through a process of value
engineering  and feature  enhancements  provided  by vendors  and the  Company's
initiatives  alike.  In the same period,  the Company expects  substantial  cost
improvements will be realized through volume efficiencies.

     The Company is on track to  substantially  reduce its  overhead  expense by
currently considering relocating its principal offices into a Federal enterprise
zone,  by adding to  employee  headcount  only as  necessary  to reduce  time to
market, and by investing incrementally consistent with realized revenue.

     While  expecting  to  be  generally  influenced  by  changes  in  rates  of
inflation, interest rates and overall economic activity, the Registrant does not
anticipate  that it will be  significantly  or  particularly  affected by future
inflation in its future data network switching business commercial activities.


Item 7.  Financial Statements
-----------------------------

     See Financial Statements attached hereto as Exhibit 1.


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

     The Company has had no change of, nor  disagreements  with its  accountants
since inception.

Controls and Procedures
-----------------------

     Raptor Networks Technology, Inc., including the Principal Executive Officer
and   Principal   Financial   Officer,   has  conducted  an  evaluation  of  the
effectiveness  of disclosure  controls and  procedures  pursuant to Exchange Act
Rule 13a-14(c) and 15d-14(c). This evaluation was conducted within 90 days prior
to the filing of this report. Based on that evaluation,  the Principal Executive
Officer and Principal  Financial Officer concluded that the disclosure  controls
and procedures are effective in ensuring that all material  information required
to be filed  in this  annual  report  has  been  made  known to them in a timely
fashion. There have been no significant changes in internal controls or in other
factors that could significantly affect internal controls subsequent to the date
the Principal  Executive Officer and Principal Financial Officer completed their
evaluation.


ITEM 8(a)  CONTROL AND PROCEDURES
---------------------------------

     (a)  Evaluation of Disclosure Controls and Procedures.
          ------------------------------------------------

     Within  the 90 days  prior  to the  date of this  report,  Raptor  Networks
Technology,   Inc.  ("the  Company")  carried  out  an  evaluation,   under  the
supervision and with the  participation of the Company's  management,  including
the Company's  President and  Secretary/Treasury,  of the  effectiveness  of the
design  and  operation  of the  Company's  disclosure  controls  and  procedures
pursuant to Exchange Act Rule 13a-14. Based upon that evaluation,  the President
and  Secretary/Treasurer  concluded that the Company's  disclosure  controls and



                                        9
<PAGE>





procedures are effective in timely alerting the Company to material  information
required to be included in the  Company's  periodic SEC filings  relating to the
Company (including its consolidated subsidiaries).

     (b)  Changes in Internal Controls
          ----------------------------

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



















































                                       10
<PAGE>





                                    PART III
                                    --------

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

     The  following  information  sets  forth  the  names  of the  officers  and
directors  of  the  Registrant   upon  completion  of  the  acquisition  of  its
wholly-owned  subsidiary  on October 17, 2003,  and  subsequent to the change of
control of the Registrant effected in the acquisition  transaction through April
10, 2004.

Name                              Age           Position
----                              ---           --------
Thomas M. Wittenschlaeger(1)      45            President, Chief Executive
                                                 Officer and Director(1)

Lyle Pearson(2)                   51            Former President, Chief
                                                 Executive Officer, and
                                                 Director

Edwin Hoffman                     53            Vice President and Chief
                                                 Technical Officer, Director

Ananda Perera(3)                  46            Vice President, Engineering
                                                 And Director

Bob VanLeyen                      60            Chief Financial Officer

(1)  Mr.  Wittenschlaeger  joined the  Company as Chief  Executive  Officer  and
     Director on March 15, 2004 and March 16, 2004, respectively

(2)  Mr. Pearson  resigned as an officer and director of the Registrant on March
     12, 2004.

(3)  Mr. Perera was appointed a Director of the Registrant on March 16, 2004.

     Thomas M.  Wittenschlaeger,  President  and Chief  Executive  Officer - Mr.
     ---------------------------------------------------------------------
Wittenschlaeger   joined  the  Company  on  March  15,  2004  following  and  in
consequence of Mr. Pearson's departure. Mr. Wittenschlaeger has accumulated more
than  twenty-two  (22) years of experience in the high  technology  products and
services area, much of it in general  management  with  leadership  positions in
operating  units  ranging  in size from $3  million  to $500  million  in annual
revenues. He is a 1979 graduate of the U.S. Naval Academy in Annapolis, Maryland
with  a B.S.  in  electrical  engineering  and  post-graduate  work  in  nuclear
engineering. He is also a graduate of the UCLA Executive Program in Business and
co-founder  of  that   University's   Executive   Program  in   Marketing.   Mr.
Wittenschlaeger  currently lectures in the business schools of UCLA,  University
of Indiana and the University of Mainz (Germany).

     Edwin Hoffman, Vice President and Chief Technical Officer - Mr. Hoffman has
     ---------------------------------------------------------
extensive  engineering  and sales  experience  with  companies  such as Reuters,
Alcatel,  Digital Equipment Corporation (DEC),  Cabletron,  Marconi, and MTI. He
has managed various mixed technology  projects with individual  project revenues
of more than $80 million and total revenues in excess of $100 million  annually.
In  the  last  five  years  he  has  held  various  sales  engineering,  account
management,  and executive  positions for  Cabletron  Systems,  MTI and DEC. Mr.
Hoffman  obtained  a diploma  and was given an  achievement  award for  computer
engineering science at the Control Data Institute in London, England.




                                       11
<PAGE>





     Ananda  Perera,  Vice  President,  Engineering  - Mr.  Perera has worked in
     ----------------------------------------------
high-tech industry for more than 28 years. As Senior Technology  Architect,  Mr.
Perera managed system  engineering  groups in various  technology  manufacturing
companies,  including Amdahl and Fujitsu. He has also gained industry experience
working as a consultant for various Internet based  companies.  He has served as
Director of Quality and Technology  for Viacom.  Mr. Perera holds an Engineering
degree from the University of Colombo in Sri Lanka, as well as other credentials
in the area of networking and storage technology.

     Bob  VanLeyen,  Chief  Financial  Officer  - Mr.  VanLeyen  has  more  than
     -----------------------------------------
twenty-four years of experience  working in the high-tech  industry in executive
positions in Finance,  Operations  and General  Management.  He was employed for
twelve years by Mentor Graphics,  ten years with Data General  Corporation,  and
two years with Wyle  Systems.  Mr.  VanLeyen  has  managed  extensive  financial
operations organizations in Europe, Asia, and the United States. He attended the
Dutch Institute of Chartered Auditors and holds Dutch degrees equivalent to U.S.
Bachelors and Masters degrees in Business Administration.

Compliance with Section 16(a) of the Exchange Act
-------------------------------------------------

     Section  16(a)  of the  Securities  Exchange  Act of 1934 may  require  the
Company's  directors  and  officers,  and persons who own more than  ten-percent
(10%) of the company's  common stock,  to file with the  Securities and Exchange
Commission  reports of ownership on Form 3 and reports of change in ownership on
Forms 4 and 5. Such officers,  directors and ten-percent  stockholders  are also
required to furnish the company  with copies of all Section  16(a)  reports they
file.  Based  solely on its review of the copies of such forms  received  by the
company and on written  representations  from  certain  reporting  persons,  the
company  believes  that all Section  16(a)  reports  applicable to its officers,
directors  and  ten-percent  stockholders  with respect to the fiscal year ended
December 31, 2003 were filed.

Code of Ethics
--------------

     The Company has adopted a Code of Ethics for  Principal  Executive  Officer
and  Senior  Financial  Officers  applicable  to its  chief  executive  officer,
principal  financial officer and any other persons  performing similar functions
on its behalf. The Company's Code of Ethics is attached to this Annual Report as
Exhibit 14.1






















                                       12
<PAGE>





Item 10.  Executive Compensation
--------------------------------

     The following lists all remuneration paid by the Registrant to officers and
key personnel from inception (July 24, 2003) to December 31, 2003):

<TABLE>
<CAPTION>
                           SUMMARY COMPENSATION TABLE

                                   Annual Compensation                    Award(s)             Payouts
                           ------------------------------------   -------------------------   ---------
                                                                  Restricted    Securities
Name and                                           Other Annual     Stock       Underlying      LTIP        All Other
Principal                   Salary       Bonus     Compensation    Award(s)    Options/SARs    Payouts    Compensation
Position            Year      ($)         ($)          ($)           ($)           (#)           ($)          ($)
--------            ----   ---------   ---------    ---------      --------     ----------    ---------       ---

<S>                 <C>     <C>            <C>          <C>           <C>       <C>               <C>          <C>
Lyle Pearson        2003    $87,500        0            0             0               0           0            0
Former President
 and Director(1)

Edwin Hoffman       2003    $63,125        0            0             0               0           0            0
Vice President
 and Director

Ananda Perera       2003    $65,833        0            0             0               0           0            0
Vice President
 and Director

Bob VanLeyen        2003    $41,045        0            0             0         500,000           0            0
Chief Financial
 Officer

<FN>
(1)  Mr. Pearson resigned as of officer and director of the Company on March 12,
     2004.
</FN>
</TABLE>

     There are no annuity,  pension or retirement benefits currently proposed to
be paid to  Officers,  Directors,  or employees  in the event of  retirement  at
normal retirement date pursuant to any existing plan provided by the Registrant.

     No employment  agreements  existed for the fiscal year ending  December 31,
2003.

     There was no  compensation  paid to any director of the  Registrant  in the
capacity of a member of its Board of Directors.

     The Company has no formal  stock option  plan,  but has granted  options to
employees.  All options were granted  between  September  2003 and December 2003
with an exercise price of $1.50 per share and vest one-third annually over three
(3) years on the anniversary of date of grant.  The following  table  summarizes
options granted and outstanding at December 31, 2003.

<TABLE>
<CAPTION>
                      Equity Compensation Plan Information
                      ------------------------------------

       Plan Category           Number of Securities to      Weighted average     Number of securities
                              be issued upon exercise of   exercise price of    remaining available for
                                 outstanding options,     outstanding options,      future issuance
                                 warrants and rights      warrants and rights
                                          (a)                     (b)                     (c)
----------------------------  --------------------------  --------------------  -----------------------
<S>                                   <C>                  <C>                             <C>
Equity compensation plans
approved by security holders

Equity compensation plans             1,405,000                  $1.50                     -
not approved by security
holders

Total                                 1,405,000            (Aggregate Price)               -
                                                               $2,107,500
</TABLE>



                                       13
<PAGE>





Item 11.  Security  Ownership of Certain  Beneficial  Owners and  Management and
--------------------------------------------------------------------------------
          Related Stockholder Matters
          ---------------------------

     The following sets forth as of March 31, 2004; the beneficial  ownership of
Raptor  Networks  Technology,  Inc.  common  stock by each  person  known to the
Company to beneficially  own more than five percent (5%) of the Company's common
stock,  including  options,  outstanding as of such date and by the officers and
directors of the company as a group.

<TABLE>
<CAPTION>
                                 March 31, 2004
                                 --------------

                     Name and Address                      Number            Percentage
Title of Class (1)   of Beneficial Owner                  of Shares           Of Class
------------------   -------------------             -------------------   ---------------

<S>                  <C>                                <C>                     <C>
Common Stock         Thomas M. Wittenschlaeger           3,000,000              10.1
                     65 Enterprise Road
                     Aliso Viejo, CA 92656

Common Stock         Bob VanLeyen                          400,000               1.3
                     65 Enterprise Road
                     Aliso Viejo, CA 92656

Common Stock         Edwin Hoffman                       3,000,000              10.1
                     65 Enterprise Road
                     Aliso Viejo, CA 92656

Common Stock         Ananda Perera                       3,000,000              10.1
                     65 Enterprise Road
                     Aliso Viejo, CA 92656

Common Stock         Lyle Pearson                        4,000,000              13.5
                     65 Enterprise Road
                     Aliso Viejo, CA 92656

Common Stock         Turki bin Abdullah                  1,072,456(2)            3.6
                     Fininfor Conseil
                     11 rue du General-Du-Four
                     1204 Geneve, Switzerland

Common Stock         Almamlaka, Ltd.                       672,000(2)            2.3
                     Fininfor Conseil
                     11 rue du General-Du-Four
                     1204 Geneve, Switzerland

Common Stock         The Leopard-Alliance
                      Company, Ltd                         672,000(2)            2.3
                     Fininfor Conseil
                     11 rue du General-Du-Four
                     1204 Geneve, Switzerland

Common Stock         Tarek Obaid                           683,463(2)            2.3
                     Fininfor Conseil
                     11 rue du General-Du-Four
                     1204 Geneve, Switzerland




                                       14
<PAGE>





Common Stock         Alchemy Advisors, LLC               1,690,000(3)            5.7
                     99 South Park Avenue, #31
                     Rockville Centre, NY  11570

Common Stock         Atlantic Communications, Inc.       1,446,100(3)            4.9
                     99 South Park Avenue, #31
                     Rockville Centre, NY  11570

Common Stock         Emma Teta                             287,700(3)            0.9
                     99 South Park Avenue, #31
                     Rockville Centre, NY  11570
                                                        -------------           ----

Total Shares of 5% or more Beneficial Ownership         19,923,719              67.1
Total Shares of Officers and Directors as a Group       13,400,000              45.2
Total Shares Issued and Outstanding (April 2, 2004)     29,677,319

<FN>
(1)  Except as otherwise indicated, all shares are owned directly.
(2)  Shares attributed to and deemed controlled by Tarek Obaid. When aggregated,
     Mr. Obaid should be considered to control 10.5% of the Registrant's  issued
     and outstanding Common Stock.
(3)  Shares  attributed to and deemed controlled by Mirco Teta. When aggregated,
     Mr. Teta should be considered to control 11.5% of the  Registrant's  issued
     and outstanding Common Stock.
</FN>
</TABLE>


Item 12.  Certain Relationships and Related Transactions
--------------------------------------------------------

     At March 31, 2004, the Registrant had issued a total of 3,136,100 shares of
its   restricted   Common   Stock  to  Alchemy   Advisors,   LLC  and   Atlantic
Communications, Inc., entities under the common control of Mirco Teta, a control
person of the  Registrant  in return for  consulting  services  received  by the
Company in the area of financial planning and  administration.  When aggregated,
the shares issued to those two entities  represent 10.6% of the Company's issued
and outstanding common stock.

     In November, 2003 at the suggestion of Mr. Teta, consultant/control person,
the Company leased an apartment in London,  U.K., to be used in connection  with
solicitation of potential  European  relations  within the European  Union.  The
Company  entered into a twelve (12) month  pre-paid lease for the apartment at a
cost of approximately  $28,000. By March, 2004, the Company had come to view the
lease as  superfluous  and suggested to the  consultant  that the lease cost, in
retrospect,  was unwarranted.  Following further discussion, Mr. Teta agreed and
proposed assumption of the lease and reimbursement of the Company for the entire
cost. On April 7, 2004, in keeping with that  resolution,  the Company  received
$28,310 from the consultant and closed the matter.

     During the period  between  January 2, 2004 and March 31, 2004, the Company
secured interim financing in the form of a convertible bridge loan in the amount
of $1,014,290. The loan was organized by the same consultant/shareholder. All of
the final terms of the convertible loan have not been determined but the Company
expects that it will convert to common  stock at the  conversion  price of $3.50
per share. Pending determination of final terms, this interim funding is treated
as Company debt.


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

Index to Exhibits
-----------------

     Charter and By-laws
     -------------------




                                       15
<PAGE>





     The Company  incorporates by reference its  Registration  Statement on Form
     SB-2, as amended,  filed  February 7, 2002 with the Securities and Exchange
     Commission,  and  exhibits  thereto;  including  Exhibit  3(a)  Articles of
     Incorporation and Exhibit 3(b) By-laws.

     Current Reports on Form 8-K
     ---------------------------

     The  Company  incorporates  by  reference  the  Report  on Form  8-K  filed
     September  10,  2003 and its Report on Form 8K filed  October 22, 2003 with
     the Securities and Exchange  Commission,  and exhibits  thereto;  including
     Exhibit 2.1 Agreement and Plan of Merger By and Between Pacific InterMedia,
     Inc. and Raptor  Networks  Technology,  Inc.  dated  August 23,  2003,  and
     Exhibit  2.2  Amendment  to  Agreement  and Plan and Merger By and  Between
     Pacific InterMedia, Inc. and Raptor Networks Technology, Inc. dated October
     15, 2003.

     The Company incorporates by reference the Reports on Form 8-K dated October
     17, 2003 and the  Amendment to that Form 8-K filed  December 12, 2003,  and
     incorporating   audited  financial   statements  and  pro  forma  financial
     statements  for the  Registrant's  year  ended  August  31,  2003,  and the
     consolidated financials of the Registrant and its wholly-owned subsidiary.

     Certification
     -------------

     Raptor  Networks  Technology,   Inc.  includes  herewith  Certification  of
     Principal  Executive  Officer and  Certification  of  Principal  Accounting
     Officer.

Description of Exhibits
-----------------------

     Exhibit
     Number         Description
     -------        -----------

     10.1           Security  Purchase  Agreement for equity funding dated April
                    1, 2004.

     10.2           Registration  Rights  Agreement  entered into in  connection
                    with the Registrant's funding closed on April 2, 2004.

     14.1           Raptor  Networks  Technology,  Inc.  Company  Code of Ethics
                    Statement.

     31.1           Certification  of Principal  Executive  Officer  Pursuant to
                    Section 302 of the Sarbanes-Oxley  Act of 2002,  promulgated
                    under the Securities Exchange Act of 1934, as amended

     31.2           Certification of Chief Financial Officer Pursuant to Section
                    302 of the Sarbanes-Oxley Act of 2002, promulgated under the
                    Securities Exchange Act of 1934, as amended

     32.1           Certification of Principal  Executive Officer pursuant to 18
                    U.S.C.  Section 1350, as adopted  pursuant to Section 906 of
                    the Sarbanes-Oxley Act of 2002.

     32.2           Certification  of Chief  Financial  Officer  pursuant  to 18
                    U.S.C.  Section 1350, as adopted  pursuant to Section 906 of
                    the Sarbanes-Oxley Act of 2002.

Reports on Form 8-K
-------------------

     On December 23, 2003,  the Company filed a Current  Report on Form 8-K with



                                       16
<PAGE>





the Securities and Exchange  Commission  re: Change of the  Registrant's  fiscal
year end to December 31.

     On December 3, 2003,  the Company  filed a Current  Report on Form 8-K with
the Securities and Exchange  Commission re: Changes in the Registrant's  Name to
Raptor Networks Technology, Inc.

     On October 22, 2003,  the Company  filed a Current  Report on Form 8-K with
the Securities and Exchange  Commission re: Changes in Control of Registrant and
Acquisition of Disposition of Assets,  regarding  completion of the Registrant's
acquisition of Raptor Networks Technology,  Inc., a California corporation, as a
wholly-owned subsidiary of the Company.

     On September 10, 2003,  the Company filed a Current Report on Form 8-K with
the  Securities  and  Exchange  Commission  re:  Other  Events,   Press  Release
announcing  signing of Definitive  Agreement by and between Pacific  InterMedia,
Inc. and Raptor Networks Technology, Inc.


ITEM 14.  PRINCIPAL ACCOUNTANT FEES AND SERVICES
------------------------------------------------

     During  2003  and  2002,  the  Company  incurred  the  following  fees  for
professional services rendered by the principal accountant:

                                                       2003            2002
                                                     ------------------------

Fees for audit services                              $20,384         $     -
Fees for audit - related services                          -               -
Tax fees                                                   -               -
All other fees                                             -               -

     The Board of Directors  pre-approves all audit and non-audit services to be
performed by the Company's independent auditors.



























                                       17
<PAGE>





                                   Signatures
                                   ----------


     In accordance  with Section 13 or 15(d) of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

                                              Registrant:
                                              Raptor Networks Technology, Inc.


Date: April 13, 2004                          By: /s/ Thomas M. Wittenschlaeger
                                                 -------------------------------
                                                 Thomas M. Wittenschlaeger,
                                                   President and Director


Date: April 13, 2004                          By: /s/ Bob VanLeyen
                                                 -------------------------------
                                                 Bob VanLeyen,
                                                   Chief Financial Officer


     In  accordance  with the Exchange  Act,  this report has been signed by the
following persons on behalf of the registrant and on the dates indicated.


Date: April 13, 2004                          By: /s/ Thomas M. Wittenschlaeger
                                                 -------------------------------
                                                 Thomas M. Wittenschlaeger,
                                                   President and Director


Date: April 13, 2004                          By: /s/ Edwin Hoffman
                                                 -------------------------------
                                                 Edwin Hoffman,
                                                   VP Chief Technical Officer


Date: April 13, 2004                          By: /s/ Ananda Perera
                                                 -------------------------------
                                                 Ananda Perera,
                                                   VP Engineering






















                                       18
<PAGE>
















                        Raptor Networks Technology, Inc.

                          (A Development Stage Company)


                        CONSOLIDATED FINANCIAL STATEMENTS

                                December 31, 2003







































<PAGE>







                                    CONTENTS
                                    --------



                                                                        Page
                                                                        ----

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS                                F-1

CONSOLIDATED BALANCE SHEET                                              F-2

CONSOLIDATED STATEMENT OF OPERATIONS                                    F-3

CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY                          F-4

CONSOLIDATED STATEMENT OF CASH FLOWS                                    F-5

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS                           F-6 to F-13
























<PAGE>










                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
                    ----------------------------------------



The Board of Directors and Stockholders of
Raptor Networks Technology, Inc.


We have audited the accompanying  consolidated  balance sheet of Raptor Networks
Technology,  Inc. (a development stage company) as of December 31, 2003, and the
related consolidated  statements of operations,  stockholders'  equity, and cash
flows for the period from inception (July 24, 2003) to December 31, 2003.  These
financial  statements are the  responsibility of the Company's  management.  Our
responsibility  is to express an opinion on these financial  statements based on
our audit.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all material  respects,  the consolidated  financial position of Raptor Networks
Technology,  Inc. as of December 31, 2003, and the  consolidated  results of its
operations,  changes in stockholders'  equity and cash flows for the period from
inception  (July 24, 2003) to December 31, 2003 in  conformity  with  accounting
principles generally accepted in the United States of America.

As  mentioned in footnote 10 to the  financial  statements,  the Company  issued
stock in April 2004 for proceeds of $5.6 million.



Denver, Colorado
March 19, 2004
(except for Note 10, which is
dated April 5, 2004)


                                                        PROFESSIONAL CORPORATION








                                       F-1
<PAGE>



                        Raptor Networks Technology, Inc.
                          (A Development Stage Company)
                           CONSOLIDATED BALANCE SHEET
                                December 31, 2003


  ASSETS

CURRENT ASSETS
  Cash and cash equivalents                                    $       316,747
  Inventory                                                            229,074
  Prepaid expenses                                                     424,406
  Note receivable                                                       60,000
  Other current assets                                                  35,317
                                                               ----------------

    Total current assets                                             1,065,544

PROPERTY AND EQUIPMENT, NET OF ACCUMULATED DEPRECIATION                297,229

OTHER ASSETS
  Prepaid expenses, less current portion                                45,000
  Debt issue cost                                                       38,514
  Deposits                                                              24,920
                                                               ----------------

    TOTAL ASSETS                                               $     1,471,207
                                                               ================


  LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
  Accounts payable                                             $       444,964
  Accrued payroll and payroll taxes                                    129,024
  Short-term convertible debt                                          200,000
  Accrued expenses                                                      34,054
                                                               ----------------

    Total current liabilities                                          808,042

STOCKHOLDERS' EQUITY
  Preferred stock, no par value; 5,000,000 shares
    authorized                                                               -
  Common stock, $0.001 par value; 50,000,000 shares
    authorized; 20,556,719 shares issued and outstanding                20,557
  Stock subscription receivable                                           (500)
  Additional paid-in capital                                         9,831,677
  Stock issued for prepaid services                                 (1,543,996)
  Accumulated deficit                                               (7,644,573)
                                                               ----------------

                                                                       663,165
                                                               ----------------


    TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                 $     1,471,207
                                                               ================






                   The accompanying notes are an integral part
                    of the consolidated financial statements.
                                       F-2
<PAGE>



                        Raptor Networks Technology, Inc.
                          (A Development Stage Company)
                      CONSOLIDATED STATEMENT OF OPERATIONS
       For the period from inception (July 24, 2003) to December 31, 2003




REVENUE
  Product sales                                                $             -
  Service fees                                                           5,000
                                                               ----------------

    Total revenue                                                        5,000

EXPENSES
  Consulting                                                           362,514
  Stock for services                                                 5,753,554
  Salary expense                                                       698,029
  Selling, general and administrative                                  789,338
                                                               ----------------

    Total expenses                                                   7,603,435
                                                               ----------------

    Net loss from operations                                        (7,598,435)

    Income tax benefit                                                       -
                                                               ----------------

NET LOSS                                                       $    (7,598,435)
                                                               ================

BASIC AND DILUTED NET LOSS PER SHARE                           $         (0.42)
                                                               ================

BASIC AND DILUTED WEIGHTED AVERAGE NUMBER OF
  SHARES OUTSTANDING                                                18,288,344
                                                               ================


















                   The accompanying notes are an integral part
                    of the consolidated financial statements.
                                       F-3
<PAGE>



<TABLE>
<CAPTION>
                        Raptor Networks Technology, Inc.
                 CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
                          (A Development Stage Company)
       For the period from inception (July 24, 2003) to December 31, 2003


                                                    Common stock                               Additonal
                                      ----------------------------------------   Additonal      Paid-in
                                       Number of                                  Paid-in      Capital -      Deferred
                                         shares        Amount      Subscribed     Capital       Warrants    Compensation
                                      ------------  ------------  ------------  ------------  ------------  -------------

<S>                                    <C>          <C>           <C>           <C>           <C>           <C>
Common stock issued for
    services, July through
    September 2003
    $0.50 per share                    14,545,100   $ 7,272,550   $         -   $         -   $         -   $ (1,838,002)

Common stock issued for
    cash, July through
    September 2003                      4,216,156     2,108,078             -             -             -              -
    $0.50 per share

Common stock issued for
    cash, July through
    September 2003
    $0.50 per share                       400,000       200,000      (200,000)            -             -              -

Common stock warrants
    issued for services,
    September 2003                              -             -             -             -       144,510              -

Collection on common stock
    subscribed, October 2003                    -             -       200,000             -             -              -

Recapitalization of private company     1,034,000    (9,560,433)            -     9,615,283             -              -

Common stock issued for
    services, December 2003
    $0.50 per share                        50,000            50             -        24,950             -              -

Common stock issued for
    cash, December 2003
    $0.50 per share                        11,463            12             -         5,720             -              -

Common stock issued upon
    exercise of warrants,
    December 2003                         250,000           250             -       122,675      (120,425)             -

Common stock issued upon
    exercise of warrants,
    December 2003                          50,000            50          (500)       24,535       (24,085)             -

Beneficial conversion privilege                 -             -             -        38,514             -              -

Net loss for the period ended
    December 31, 2003                           -             -             -             -             -        294,006
                                      ------------  ------------  ------------  ------------  ------------  -------------

Balances, December 31, 2003            20,556,719   $    20,557   $      (500)  $ 9,831,677   $         -   $ (1,543,996)
                                      ============  ============  ============  ============  ============  =============


<PAGE>






<CAPTION>
                                                       Total
                                      Accumulated   stockholders'
                                        Deficit        equity
                                      ------------  ------------

<S>                                   <C>           <C>
Common stock issued for
    services, July through
    September 2003
    $0.50 per share                   $         -   $ 5,434,548

Common stock issued for
    cash, July through
    September 2003                              -     2,108,078
    $0.50 per share

Common stock issued for
    cash, July through
    September 2003
    $0.50 per share                             -             -

Common stock warrants
    issued for services,
    September 2003                              -       144,510

Collection on common stock
    subscribed, October 2003                    -       200,000

Recapitalization of private company       (46,138)        8,712

Common stock issued for
    services, December 2003
    $0.50 per share                             -        25,000

Common stock issued for
    cash, December 2003
    $0.50 per share                             -         5,732

Common stock issued upon
    exercise of warrants,
    December 2003                               -         2,500

Common stock issued upon
    exercise of warrants,
    December 2003                               -             -

Beneficial conversion privilege                 -        38,514

Net loss for the period ended
    December 31, 2003                  (7,598,435)   (7,304,429)
                                      ------------  ------------

Balances, December 31, 2003           $(7,644,573)  $   663,165
                                      =============   ==========
</TABLE>



                   The accompanying notes are an integral part
                    of the consolidated financial statements.
                                       F-4
<PAGE>



                        Raptor Networks Technology, Inc.
                          (A Development Stage Company)
                      CONSOLIDATED STATEMENT OF CASH FLOWS
       For the period from inception (July 24, 2003) to December 31, 2003




CASH FLOWS FROM OPERATING ACTIVITIES
  Net loss                                                     $    (7,598,435)
  Adjustments to reconcile net loss to net
  cash flows from operating activities:
    Depreciation                                                        19,035
    Common stock issued for services                                 7,297,550
    Common stock issued for prepaid services                        (1,543,996)
    Recapitalization of private company                                  8,712
    Warrants issued                                                    144,510
    Increase in other current assets                                   (20,442)
    Increase in note receivable                                        (60,000)
    Increase in deposits                                               (24,920)
    Increase in prepaid assets                                        (484,281)
    Increase in inventories                                           (229,074)
    Increase in accounts payable                                       444,964
    Increase in other accrued liabilities                               34,054
    Increase in accrued payroll and payroll taxes                      129,024
                                                               ----------------

      Net cash flows from operating activities                      (1,883,299)

CASH FLOWS FROM INVESTING ACTIVITIES
  Property and  equipment purchases                                   (316,264)
                                                               ----------------

      Net cash flows from investing activities                        (316,264)

CASH FLOWS FROM FINANCING ACTIVITIES
  Issuance of common stock                                           2,316,310
  Proceeds from short-term debt                                        200,000
                                                               ----------------

      Net cash flows from financing activities                       2,516,310
                                                               ----------------


NET INCREASE IN CASH AND CASH EQUIVALENTS                              316,747

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD                             -
                                                               ----------------

CASH AND CASH EQUIVALENTS AT END OF PERIOD                     $       316,747
                                                               ================







                   The accompanying notes are an integral part
                    of the consolidated financial statements.
                                       F-5
<PAGE>



                        Raptor Networks Technology, Inc.
                          (A Development Stage Company)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2003


1.   Summary of Significant Accounting Policies
     ------------------------------------------
     Description
     -----------
     The  Company  was  incorporated  under the laws of the state of Colorado on
     January 22, 2001 under the name Pacific InterMedia,  Inc. ("Pacific").  The
     principal office of the corporation is 65 Enterprise Road, Suite 420, Aliso
     Viejo, California 92656.

     On October 17, 2003, Pacific completed a business  combination  transaction
     with Raptor Networks Technology, Inc. ("Raptor"), a closely-held California
     corporation,  through  acquisition  of all of the  issued  and  outstanding
     common stock of Raptor in exchange for authorized  but previously  unissued
     restricted Common Stock of Pacific.  Immediately prior to completion of the
     acquisition  transaction,  Pacific had a total of  4,034,000  shares of its
     Common Stock  issued and  outstanding  comprised  of  1,034,000  registered
     shares  held by  approximately  25  stockholders  and  3,000,000  shares of
     restricted stock held by Pacific's founder and sole officer and director

     As a material aspect of the acquisition,  Pacific re-acquired and cancelled
     the  3,000,000  restricted  shares as  consideration  for  transfer  of its
     remaining assets consisting of cash and office equipment to the officer and
     director,  leaving only the registered  Common Stock,  1,034,000 shares, as
     all of its issued and outstanding  capital stock prior to completion of the
     Raptor acquisition.

     Pursuant  to terms of the  acquisition  agreement,  all of the  issued  and
     outstanding  common  stock of Raptor,  19,161,256  shares,  was acquired by
     Pacific,  share-for-share,  in exchange for its  authorized  but previously
     unissued  restricted  Common Stock.  Upon  completion  of the  acquisition,
     Raptor  became  a  wholly  owned  subsidiary  of  Pacific  and  the  Raptor
     shareholders  became shareholders of Pacific.  Unless otherwise  indicated,
     all  references in these  financial  statements  to "the  Company"  include
     Pacific  and  its  wholly  owned  subsidiary,   Raptor.   All  intercompany
     transactions have been eliminated. On December 3, 2003, Pacific changed its
     name to Raptor Networks Technology, Inc.

     The  acquisition  transaction  has been treated as a reverse  merger,  with
     Raptor considered the accounting acquirer. The Company's reporting year end
     was subsequently changed from August 31 to December 31.

     The  Company is a provider  of  integrated  high-speed  Ethernet  switching
     systems which enable new emerging high bandwidth critical applications. The
     data  network  market areas that the Company is  targeting  include  video,
     storage,  Internet Protocol telephony,  and technology refresh. The Company
     is currently focusing on the markets in Europe and the United States.

     Revenue
     -------
     The  Company  records  revenues  when the  services  are  performed  or the
     products are shipped to the customer.

     Cash and Cash Equivalents
     -------------------------
     The Company considers all short-term  marketable securities with a maturity
     of three months or less to be cash equivalents.

     Prepaid Expenses
     ----------------
     Prepaid expenses represent amounts paid in advance for contracts  extending
     past the period end date.





                                       F-6
<PAGE>



                        Raptor Networks Technology, Inc.
                          (A Development Stage Company)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2003


1.   Summary of Significant Accounting Policies (continued)
     ------------------------------------------------------
     Inventory
     ---------
     Inventory  is recorded  at lower of cost  (first in,  first out) or market.
     When required, provision is made to reduce excess and obsolete inventory to
     estimated net realizable value.  Inventory at December 31, 2003 consists of
     raw materials.

     Property and Equipment
     ----------------------
     Property and equipment are recorded at cost. Depreciation is computed using
     the  straight-line  method over the assets'  estimated useful lives,  which
     range from three to seven years.

     Repairs and Maintenance
     -----------------------
     Repairs and maintenance of a routine nature are charged as incurred,  while
     those which extend or improve the life of existing assets are capitalized.

     Impairment or Disposal of Long-Lived Assets
     -------------------------------------------
     The Company reviews its long-lived  assets and certain related  intangibles
     for   impairment   periodically,   and   whenever   events  or  changes  in
     circumstances  indicate  that the  carrying  amount  of an asset may not be
     fully  recoverable.  When  necessary,  impaired  assets are written down to
     estimated  fair value based on the best  information  available.  Estimated
     fair value is  generally  based on either  appraised  value or  measured by
     discounting estimated future cash flows.  Considerable  management judgment
     is necessary to estimate discounted future cash flows. Accordingly,  actual
     results  could  vary  significantly  from such  estimates.  No assets  were
     considered impaired for the period ended December 31, 2003.

     Deposits
     --------
     Deposits  represent amounts paid under the Company's office space lease and
     various other leases.

     Use of Estimates
     ----------------
     The  preparation  of financial  statements  in  conformity  with  generally
     accepted  accounting  principles  requires management to make estimates and
     assumptions  that affect the reported amounts of assets and liabilities and
     disclosure  of  contingent  assets  and  liabilities  at  the  date  of the
     financial  statements  and the  reported  amounts of revenues  and expenses
     during  the  reporting  period.  Actual  results  could  differ  from those
     estimates.

     Income Taxes
     ------------
     The  Company  recognizes  deferred  tax  assets  and  liabilities  based on
     differences  between the  financial  reporting  and tax bases of assets and
     liabilities  using the enacted  Federal,  state, and local income tax rates
     and laws that are expected to be in effect when the differences reverse.

     Fair Value of Financial Instruments
     -----------------------------------
     Unless  otherwise  indicated,  the fair  value of all  reported  assets and
     liabilities which represent  financial  instruments (none of which are held
     for trading purposes) approximate the carrying values of such instruments.










                                       F-7
<PAGE>



                        Raptor Networks Technology, Inc.
                          (A Development Stage Company)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2003


1.   Summary of Significant Accounting Policies (continued)
     ------------------------------------------------------
     Stock-Based Compensation
     ------------------------
     The  Financial  Accounting  Standards  Board  has  issued  "Accounting  for
     Stock-Based  Compensation"  ("SFAS 123").  SFAS 123 requires that an entity
     account  for  employee  stock-based  compensation  under a fair  value base
     method.  However,  SFAS 123 also  allows an entity to  continue  to measure
     compensation cost for employee stock-based compensation using the intrinsic
     value  based  method  of  accounting  prescribed  by APB  Opinion  No.  25,
     "Accounting  for  Stock  Issued  to  Employees"  ("Opinion  25").  Entities
     electing to remain with the  accounting  under  Opinion 25 are  required to
     make pro  forma  disclosures  of net loss and loss per share as if the fair
     value based method of accounting under SFAS 123 had been applied.

     As  permitted  by  SFAS  123,  the  Company  has  elected  to  account  for
     stock-based compensation using the intrinsic value method.  Accordingly, no
     compensation cost has been recognized for stock options granted at or above
     market value.  Had the fair value method of accounting  been applied to all
     of the  Company's  stock  option  grants,  which  requires  recognition  of
     compensation  cost ratably over the vesting period of the underlying equity
     instruments, the net loss would have been increased by $67,955 or $0.00 per
     share for the period  ended  December  31,  2003.  This pro forma impact is
     likely to increase in future  years as  additional  options are granted and
     amortized  ratably  over the  vesting  period.  The  average  fair value of
     options granted during the period ended December 31, 2003 was $0.1451.  The
     fair value was estimated using the Black-Scholes option-pricing model based
     on the following weighted average  assumptions:  risk free interest rate of
     6.0% and 79.53% volatility,  no assumed dividends,  and an expected life of
     three years.

     The Company  continues  to account for  employee  stock-based  compensation
     under Opinion 25. The following table  illustrates the effect on net income
     and  earnings  per  share  if  the  Company  had  applied  the  fair  value
     recognition provisions of SFAS 123 to stock-based employee compensation:

                                          As Reported             Proforma
                                          -----------             --------
     Net loss                             ($7,598,435)          ($7,666,390)
     Basic net loss per share               ($0.42)                ($0.42)

     Consideration of Other Comprehensive Income Items
     -------------------------------------------------
     The   Financial   Accounting   Standards   Board  has   issued   "Reporting
     Comprehensive  Income" ("SFAS 130"). SFAS 130 requires companies to present
     comprehensive income (consisting  primarily of net income plus other direct
     equity  changes  and  credits)  and its  components  as  part of the  basic
     financial statements. For the period ended December 31, 2003, the Company's
     financial statements do not contain any changes in equity that are required
     to be reported separately in comprehensive income.

     Concentration of Risk
     ---------------------
     From  time-to-time,  the Company  maintains cash balances in excess of FDIC
     insured  limits.  The  amount  of such  excess  at  December  31,  2003 was
     approximately $255,000.

     The Company has a limited number of suppliers for its component  parts, and
     its  distribution  network  is  limited  to a  small  number  of  available
     channels.  These  concentrations  are likely to continue  while the Company
     remains in the development stage, and beyond.

     Loss per Share
     --------------
     Loss per share was computed using the weighted  average number of shares of
     common stock and common stock equivalents outstanding during the period.



                                       F-8
<PAGE>



                        Raptor Networks Technology, Inc.
                          (A Development Stage Company)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2003


1.   Summary of Significant Accounting Policies (continued)
     ------------------------------------------------------
     Stock Basis
     -----------
     Shares of  common  stock  issued  for  other  than cash have been  assigned
     amounts  equivalent to the fair value of the service or assets  received in
     exchange. Shares for services issued contemporaneously with shares sold for
     cash are valued at the cash price.

     Compensated Absences
     --------------------
     Employees of the Company are entitled to compensated  absences depending on
     job classification,  length of service,  and other factors. At December 31,
     2003,  the  minimal  amounts  remaining  unused by  employees  could not be
     reasonably estimated and, accordingly, no provision is recorded.

     Presentation as a Going Concern
     -------------------------------
     The  Company  is in the  development  stage and has not begun  selling  its
     products.  At December  31, 2003,  the Company had cash of $316,000,  while
     cash  flows from  operations  for the  initial  period  were  approximately
     ($1,883,000).  This condition raised  substantial doubt about the Company's
     ability to establish  itself as a going  concern and to achieve  profitable
     operations.  In the first  quarter of 2004,  the  Company  received  bridge
     financing of $1.0 million.  This financing was  supplemented  in April 2004
     with proceeds  from a private sale of the Company's  common stock in units,
     netting $5.6 million.  Management  projects that this capital infusion will
     be  sufficient  to sustain the  Company's  operations  for the remainder of
     2004. See Note 10.


2.   Note Receivable
     ---------------
     Note receivable at December 31, 2003 consists of a $60,000  unsecured loan,
     related to a joint marketing agreement, due on or before December 31, 2003,
     bearing  interest at 1.5% per month.  The Company  forgave  interest due in
     order to  facilitate  the receipt of payment  subsequent  to year end.  The
     total of the unsecured loan was repaid to the Company in April 2004.


3.   Property and Equipment
     ----------------------

          Testing equipment                            $   234,942
          Office equipment                                   1,976
          Computer equipment                                79,346
                                                       -----------

                                                           316,264
          Less: Accumulated depreciation                   (19,035)
                                                       -----------

                                                       $   297,229
                                                       ===========


4.   Short-term Debt
     ---------------
     In  December  2003,  the  Company  borrowed  $200,000  from a  shareholder.
     Interest  accrues  at an annual  rate of 8%. The loan is  convertible  into
     restricted common stock at any time during the following three year period.
     The  conversion of principal and accrued  interest  shall be at the rate of
     $3.50 per share.










                                       F-9
<PAGE>



                        Raptor Networks Technology, Inc.
                          (A Development Stage Company)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2003


5.   Stockholders' Equity
     --------------------
     As of December  31, 2003,  20,556,719  shares of the  Company's  $0.001 par
     value common stock were issued and outstanding. Of these, 14,595,100 shares
     had been issued for services, 4,627,619 shares had been issued at $0.50 per
     share for total proceeds of  $2,313,810,  300,000 shares had been issued at
     $0.01 per share for total  proceeds of $3,000 and  1,034,000  shares remain
     from the reverse merger described in Note 1.

     A total of 4,245,100 of the shares  issued for  services  were  intended as
     compensation for services to be rendered over periods ranging from eighteen
     to twenty-four months, beginning in July 2003. The value of the services to
     be rendered  after  December 31, 2003 has been deferred and will be charged
     to operations as the services are rendered.


6.   Stock Options and Warrants
     --------------------------
     The Company  has no formal  stock  option  plan but has granted  options to
     employees.  All options were granted  between  September  2003 and December
     2003 with an exercise price of $1.50 per share and vest one-third  annually
     over three years on the anniversary date of the grant. The Company has also
     issued  warrants to consultants  exercisable at $0.01 through  September 1,
     2006. These warrants were exercised in December 2003.

     The options and warrants are summarized as follows:

                                                                Weighted
                                                                Average
                                                                Exercise
                                                 Shares          Price
                                               ----------      ----------

     Outstanding at July 24, 2003                       -      $        -
     Granted                                    1,720,000            1.23
     Cancelled                                    (15,000)           1.50
     Exercised                                   (300,000)           0.01
                                               ----------      ----------

     Outstanding at December 31, 2003           1,405,000      $     1.50
                                               ==========      ==========

     The following table summarizes options and warrants outstanding at December
     31, 2003:

             Outstanding
     Range      Number     Wtd. Ave. Life   Wtd. Ave. Price   Exercisable
     -----      ------     --------------   ---------------   -----------

     $1.50     1,405,000        2.45             $1.50             -














                                      F-10
<PAGE>



                        Raptor Networks Technology, Inc.
                          (A Development Stage Company)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2003


7.   Leases
     ------
     As of December  31, 2003,  the Company  leases for its own use office space
     and workstations  under a non-cancelable  operating lease expiring in 2004.
     In addition,  the Company  leases a copier  through 2008 and has agreements
     related to licensing and inventory  purchase  commitments  requiring future
     payments through 2005.

     Future  minimum  payments for  commitments  over the next five years are as
     follows:

               For the year ended
                  December 31,                       Amount
                  ------------                       ------

                      2004                        $   1,230,548
                      2005                               16,608
                      2006                                7,608
                      2007                                7,608
                      2008                                6,340
                                                  -------------
                                                  $   1,268,712
                                                  =============

     Rent expense for the period ended December 31, 2003 was $78,877.

     Subsequent  to year end,  a  commitment  totaling  $30,000  due in 2004 was
     settled  for $15,000 and the  issuance  of 35,000  shares of the  Company's
     common stock.


8.   Income Taxes
     ------------
     The Company computes and records taxes payable based upon  determination of
     taxable income which is different from pre-tax financial  statement income.
     Such differences arise from the reporting of financial statement amounts in
     different periods for tax purposes.  The timing differences are a result of
     different accounting methods being used for financial and tax reporting.

     The Company's  total  deferred tax assets and deferred tax  liabilities  at
     December 31, 2003 are as follows:

          Deferred tax assets
              Deferred compensation costs               $  1,821,000
              Non-benefited tax losses and credits           519,000
                                                        ------------

                  Total deferred tax assets                2,340,000
                                                        ------------

              Valuation allowance                         (2,340,000)
                                                        ------------

                  Net deferred tax assets               $          -
                                                        ============

     A valuation  allowance has been established  against the realization of the
     deferred tax assets  since the Company has  determined  that the  operating
     loss carryforwards may not be realized.

     The  Company  has federal and state net  operating  loss  carryforwards  of
     approximately $1,687,000 expiring in 2023.






                                      F-11
<PAGE>



                        Raptor Networks Technology, Inc.
                          (A Development Stage Company)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2003


9.   Related Party Transactions
     --------------------------
     The  Company  has a  consulting  agreement  with a  shareholder  who  owns,
     directly  or  indirectly,   17.73%  of  the  Company's  common  stock.  The
     consulting  agreement is for a two-year  period  beginning July 1, 2003 and
     included  payment of $180,000 and  issuance of  3,136,100  shares of common
     stock valued at $1,568,050.

     In November 2003 at the suggestion of the same consultant/shareholder,  the
     Company  leased  an  apartment  in  London  to be used in  connection  with
     solicitation of potential  European  network  business and possible capital
     financing  of the  Company's  operations  and general  financial  relations
     within the European  Union.  The Company  entered  into a 12 month  prepaid
     lease for the apartment at a cost of approximately  $28,000. By March 2004,
     the Company had come to view the lease as superfluous  and suggested to the
     consultant  that the lease cost, in retrospect was  unwarranted.  Following
     further  discussion,  the consultant agreed and proposed  assumption of the
     lease and  reimbursement  of the Company for the entire  cost.  On April 7,
     2004 in keeping with that resolution, the Company received $28,310 from the
     consultant and closed the matter.


10.  Subsequent Events
     -----------------
     Bridge Loan
     -----------
     During the period  between  January 2, 2004 and March 31, 2004, the Company
     secured interim  financing in the form of a convertible  bridge loan in the
     amount of $1,014,290.  The loan was organized by a shareholder.  All of the
     final  terms of the  convertible  loan  have not  been  determined  but the
     Company  expects  that it will  convert to common  stock at the  conversion
     price of $3.50  per  share.  Pending  determination  of final  terms,  this
     interim funding will be treated as Company debt.

     Stock Issued for Services
     -------------------------
     In the period  from  January  2004 to April 2, 2004,  the  Company  awarded
     3,000,000  shares of common stock to its newly  appointed  Chief  Executive
     Officer and 400,000 shares of common stock to its Chief Financial  Officer.
     In addition,  one key employee  received 100,000 shares of common stock and
     several service providers received 2,420,600 shares of common stock.

     Options Issued
     --------------
     Subsequent  to December  31, 2003,  the Company  awarded a total of 327,500
     common stock purchase  options to certain  employees  which are exercisable
     during a three year period, following the respective option grant dates and
     ending during the first quarter of 2007, at an option exercise, or purchase
     price of $1.50 per share of the Company's  restricted  common  stock.  Also
     subsequent  to December 31, 2003,  the Company  cancelled  140,000  options
     granted in 2003.

     Equity Offering Completed
     -------------------------
     On April 1,  2004 the  Company  completed  an  equity  financing  for gross
     proceeds of $5.6 million.  The Company  privately placed units comprised of
     3,200,000  shares of its common  stock,  Series A Warrants  to  purchase an
     additional  3,200,000  share of its common  stock and Series B Warrants  to
     purchase a further  additional  3,200,000  of its common stock with several
     institutional and accredited investors.  The units were priced at $1.75 per
     unit.  The  Series A  Warrants  are  exercisable  during a sixty day period
     beginning on the effective date of a Registration  Statement to be filed by
     the Company at an exercise price of $2.25 per share.  The Series B Warrants
     are exercisable during the five year period which began on April 2, 2004 at
     an exercise price of $3.50 per share.






                                      F-12
<PAGE>



                        Raptor Networks Technology, Inc.
                          (A Development Stage Company)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2003


10.  Subsequent Events (continued)
     -----------------------------
     Litigation
     ----------
     On April 5,  2004,  the  Company  received  a letter  from a local law firm
     threatening  suit  against  three of the  Company's  officers,  the Company
     itself and the Company's  general counsel on behalf of the Company's former
     officer and director,  Lyle Pearson.  The letter  threatens  several claims
     apparently arising from Pearson's resignation as an officer and director of
     the  Company on March 12,  2004.  The  Company  entered  into a  separation
     agreement with the claimant  shortly after his  resignation and regards the
     stated claims bases as unsupportable.

     The Company  was served  with  process in two  separate  lawsuits  filed in
     February  2004  by  former  employees.  Both  actions  name  the  Company's
     subsidiary,  three of the Company's  officers and from one to fifty unknown
     persons  as  defendants.  The  first  case,  Shapiro  vs.  Raptor  Networks
     Technology,   Inc.,  a  California  corporation,  et  al  is  a  claim  for
     establishment and enforcement of an alledged  ownership interest in certain
     of the Company's  intellectual  property. The claim was filed following the
     Plaintiff's  involuntary termination by the Company near the end of January
     2004.  The complaint  seeks damages "in excess of $10 million".  The second
     action,  Kelly et al vs. Raptor Networks  Technology,  Inc. claims wrongful
     termination,   invasion  of  privacy,   misleading  conduct  and  emotional
     distress,  was filed by three former employees  following their involuntary
     termination with from seven to fourteen days of their respective employment
     by the Company.  The complaint seeks unspecified damages. The Company views
     both complaints to be without merit and frivolous.


































                                      F-13