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

                                   FORM 10-KSB

                 |X| ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934

                   FOR THE FISCAL YEAR ENDED: October 31, 2003

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

                FROM THE TRANSITION PERIOD FROM ______ TO ______
                        COMMISSION FILE NUMBER: 333-65768

                                 SUN & SURF INC.
                 (Name of Small Business Issuer in Its Charter)

                  New York                                       11-3619828
          (State of incorporation)                           (I.R.S. Employer
8540 Ashwood Drive, Capitol Heights, Maryland                Identification No.)
  (Address of principal executive offices)                         20743
                                                                 (Zip Code)
                                 (301) 324-4992
                (Issuer's telephone number, including area code)

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

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

                           Title                      Name of Exchange
                           -----                      ----------------
         Common Stock, par value $0.001 per share           None

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

         Check if there is no  disclosure  of  delinquent  filers in response to
Item 405 of  Regulation  S-B 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. |X|

         The Issuer's revenue for its most recent fiscal year was $4,658,171.

         As of December 31, 2003,  21,530,000  shares of the Issuer's $0.001 par
value common stock were outstanding and the aggregate market value of the shares
held by non-affiliates  was  approximately  $15,071,000 based upon a closing bid
price on  December  31,  2003 of $0.70  per  share  of  common  stock on the OTC
Bulletin Board.

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<PAGE>

PART I.........................................................................2
   ITEM 1. BUSINESS............................................................2
     HISTORY...................................................................2
     DESCRIPTION OF SUN & SURF INC.............................................2
     DESCRIPTION OF BUSINESS OF MSSI...........................................2
     EMPLOYEES.................................................................3
     BUSINESS AND INDUSTRY OVERVIEW............................................3
     COMPETITION...............................................................4
     GOVERNMENT REGULATION.....................................................4
     MSSI CURRENT AND FUTURE PRODUCTS..........................................4
     SOURCES OF REVENUE........................................................5
     SERVICE CONTRACTS.........................................................5
     PRODUCTS ORDERS...........................................................5
     MATERIAL CONTRACTS AWARDED TO MSSI........................................6
     SUBSTANTIAL CUSTOMERS.....................................................6
     FUTURE COMMITMENTS........................................................7
     PROPRIETARY PRODUCTS AND INTELLECTUAL PROPERTY............................7
     OUR GROWTH STRATEGY.......................................................7
     OTHER MATERIAL AGREEMENTS.................................................7
   RISK FACTORS................................................................8
     BUSINESS RISKS............................................................8
     RISKS RELATED TO OUR COMMON STOCK.........................................9
   ITEM 2. PROPERTIES.........................................................11
   ITEM 3. LEGAL PROCEEDINGS..................................................11
   ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS................11
PART II.......................................................................11
   ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED
           STOCKHOLDER MATTERS................................................11
   ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION OR
           PLAN OF OPERATIONS.................................................12
     COMPANY AND INDUSTRY OVERVIEW............................................12
     CRITICAL ACCOUNTING POLICIES.............................................13
     RESULTS OF OPERATIONS....................................................14
     COMPARISON OF SIX-MONTH PERIOD ENDED OCTOBER 31, 2003 TO SIX-MONTH
     PERIOD ENDED OCTOBER 31, 2002............................................14
     COMPARISON OF TWELVE-MONTH PERIOD ENDED APRIL 30, 2003 TO TWELVE-MONTH
     PERIOD ENDED APRIL 30, 2002..............................................16
     LIQUIDITY AND CAPITAL RESOURCES..........................................17
     LIQUIDITY AND CAPITAL RESOURCES..........................................18
     USE OF ESTIMATES AND CERTAIN SIGNIFICANT ESTIMATES.......................19
     FORWARD LOOKING STATEMENTS...............................................19
   ITEM 7. FINANCIAL STATEMENTS...............................................20
   ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
           FINANCIAL DISCLOSURE...............................................20
   ITEM 8A. CONTROLS AND PROCEDURES...........................................20
PART III......................................................................21
   ITEM 9. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.................21
   ITEM 10. EXECUTIVE COMPENSATION............................................21
   ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT....21
   ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS....................21
   ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K..................................21
     STATEMENTS FILED AS PART OF THIS REPORT:.................................21
     EXHIBITS.................................................................21
     REPORTS ON FORM 8-K......................................................23
   ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES............................23




                                      -i-
<PAGE>

                                     PART I

ITEM 1. BUSINESS


     History

         Unless otherwise  indicated,  or unless the context otherwise requires,
all  references  in this Annual  Report on Form 10-KSB to the terms,  "Company",
"SSI",  "we",  "our", or "us" shall mean Sun & Surf,  Inc. and our  wholly-owned
subsidiary, Management Solutions and Systems, Inc. ("MSSI").

         On October 6, 2003,  we  completed a stock  exchange  transaction  (the
"Stock  Exchange")  with the  shareholders  of MSSI. As a result of the exchange
transaction,  we issued an aggregate of 15,000,000 shares of our common stock to
the three shareholders of MSSI, representing  approximately 69.67% of our issued
and outstanding  common stock immediately  subsequent to the Stock Exchange,  in
exchange for 100% of the outstanding capital stock of MSSI.

         Upon the  effectiveness  of the  Stock  Exchange,  the  sole  remaining
director of SSI, Jeffrey Esposito,  appointed  Clifford Pope and Larry L. Brooks
as members of our Board of Directors and  subsequently  resigned.  The remaining
members  of our Board of  Directors  then  appointed  Larry  Swinton to fill the
vacancy created by the resignation of Mr. Esposito.  Our reconstituted  Board of
Directors then elected Clifford Pope as our President, Chairman of the Board and
Treasurer and Larry L. Brooks as our Vice President and Secretary.

         Prior to consummating  the Stock Exchange,  we effected a forward-split
of our common  stock on the basis of ten  shares for each share then  issued and
outstanding and determined to change our business efforts.  As part of the Stock
Exchange,  43,072,500  shares owned by certain of our shareholders were redeemed
by us and then  canceled  following  the  closing of the Stock  Exchange.  As of
January  31,  2004,  there were  21,530,000  shares of common  stock  issued and
outstanding.  As a result of the Stock  Exchange,  MSSI became our  wholly-owned
subsidiary.

         Upon  completion  of the Stock  Exchange,  we  decided  to cease  other
operations  and  only  carry  on the  business  of  MSSI.  All  of our  business
operations are conducted  through MSSI. Prior to the Stock Exchange,  there were
no  material  relationships  between  SSI  and  MSSI,  or any  of  the  parties'
respective  affiliates,  directors  or  officers,  or any  associates  of  their
respective officers or directors.


     Description of Sun & Surf Inc.

         SSI was organized as a New York  corporation  on November 30, 2000. SSI
was a seller of sporting goods,  apparel and accessories  retail/wholesale and a
consultant to retailers and wholesalers in the action sports industry. After the
Stock  Exchange,  SSI  discontinued  its  previous  business  and carried on the
business of MSSI only.  On August 27, 2003,  SSI declared a dividend  payable in
shares of its wholly owned subsidiary,  Surf Franchise Inc., on the basis of one
share of common stock of the subsidiary in respect of each outstanding  share of
SSI,  adjusted  to give  effect to the  ten-for-one  split.  The record date for
determining holders entitled to receive the dividend was September 8, 2003. As a
result  of this  dividend,  we no longer  have any  ownership  interest  in Surf
Franchise Inc.

     Description of Business of MSSI

         MSSI  was  originally  established  in  1997,  and  presently  provides
information  technology  ("IT")  services and  products,  computer  software and
hardware sales,  network operation and design,  systems analysis and deployment,
and  business  process   consulting   services  to  Federal,   state  and  local
governments,  including military and civil agencies.  Our corporate headquarters
is located in Capitol Heights, Maryland.

         We offer IT services in the following areas:

         o        Enterprise Management  Implementation and Sustainment services
                  for Computer Associates ("CA") Unicenter Suite of solutions

         o        Customer  Relationship  Management  ("CRM")  and  Call  Center
                  Management Services


                                       2
<PAGE>

         o        Customized   Training   solutions  that  can  incorporate  new
                  technologies such as web broadcasting, virtual class rooms and
                  multi media

         o        IT Management Services such as Business Process Re-Engineering
                  ("BPR"),   Requirements  Analysis,   Strategic  Planning,  and
                  Independent  Verification  and  Validation  ("IV&V") and other
                  Pre-Implementation Services.

         We are also an authorized dealer of several brand-name IT products.  We
provide our customers  high-quality hardware and software,  peripherals,  office
automation products,  desktop and laptop systems, and computer accessories.  Our
long-established   relationships  with  major  IT  equipment  manufacturers  and
distributors  allow us to provide our customers  with IT products at competitive
prices and expedited delivery times, often within 24 hours of the order.

         Our suite of  Enterprise  Network  solutions  is comprised of a host of
services,   including  design,   implementation,   and  maintenance,   networked
facilities  management,  disaster  recovery,  security and helpdesk support.  We
analyze enterprise networks and offer meaningful, cost effective solutions.

         We focus our  business  on  providing  necessary  services  and related
equipment  to  Federal,  state and local  governments.  We  generate  revenue by
reselling IT products or providing services through consultative selling,  which
involves identifying agencies that have IT problems,  developing a solution, and
presenting  the  solution  for customer  approval.  We use teams of  specialists
assembled  from our current staff and subscribe to recruiting  services over the
internet  for  additional  personnel.  Approximately  90% of our  revenues  were
derived from sales to agencies of the Federal  government and  approximately 10%
was derived from sales to agencies of state and local governments.


     Employees

         We currently have 99 employees,  including approximately 81 who provide
technical  support and  operational  services at various  contract  sites in the
Washington,  D.C. area.  Twelve  persons  perform  executive and  administrative
functions.  We are not a party to any  collective  bargaining  agreement  with a
labor union, and we believe  relations with our employees are good. We intend to
hire additional personnel in the future, as the need arises.


     Business and Industry Overview

         Information  technology ("IT") refers to the collection of products and
services  that turn data into  useful,  meaningful  and  accessible  information
within an enterprise. The IT industry is generally viewed as being comprised of:
computer   hardware,   software  and  services.   We  include   networking   and
telecommunications  systems  in the  definition  of IT.  As  published  by  Post
Newsweek Tech Media in April 2003,  in fiscal 2003 total  Federal  government IT
spending  from its  discretionary  budget  increased by 6.7 percent,  from $49.8
billion to $58.1  billion.  In the fiscal year 2004  budget,  it  increases  7.2
percent to $59.3 billion.

         According to the U.S. General Accounting Office ("GAO") Report,  titled
Contracting for Information Technology Services, prepared for Representative Tom
Davis in February  2003,  agencies of the Federal  government  spend billions of
dollars annually acquiring IT services from thousands of contractors and using a
variety   of   contracting   methods.   IT   services   include   computer   and
telecommunication   services,   as  well  as  the  testing,   quality   control,
installation, and operation of computer equipment.

         The GAO report  also  indicates  that  Federal  spending on IT services
nearly  doubled  from fiscal years 1997 to 2001,  increasing  from $9 billion to
more than $17 billion.  This report also states that the  Department  of Defense
remained the single largest purchaser of IT services  throughout the period, and
that the General Services  Administration's  ("GSA") spending  increased greatly
primarily as a result of spending by GSA's Federal  Technology Service on behalf
of other agencies. Spending on IT services through GSA's Federal supply schedule
program  grew from  approximately  $405 million in 1997 to $4.3 billion in 2001.
The GAO Report revealed that the distribution of IT services  spending in fiscal
year 2001 was 14% to small businesses, 21% to medium-size businesses, and 62% to
large businesses.


                                       3
<PAGE>

         Nick  Wakeman,  a reporter  for Post  Newsweek  Tech  Services,  in his
summary  of  the  findings  of  the  Government   Electronics   and  Information
Association  ("GEIA")  Conference held October 2003 in Tysons Corner,  Virginia,
indicated that GEIA is predicting that by 2008 spending on defense IT will reach
$34 billion,  up from a planned $26.6 billion in 2003.  It also  predicted  that
spending by civilian agencies is expected to reach $33.1 billion,  up from $26.5
billion.

         The GAO report, titled Contracting for Information Technology Services,
dated February 14, 2003, states that the GSA Schedule  accounted for $17 billion
of government purchases from 1997 through 2001.

     Competition

         The GAO in their  report  of  February  2003,  titled  Contracting  for
Information  Technology  Services,  reported  that the  distribution  of Federal
spending for IT services in fiscal year 2001 was to 2,167 small businesses,  635
medium companies, and 281 large companies. We are considered a small business.

         There are  approximately  14,000 IT companies in the United States with
50 or more  employees.  The  number  of firms  with less  than 50  employees  is
estimated to be even larger.

         Many IT firms are competing for government  contracts.  We believe that
other IT companies doing business with the government are positioning themselves
for growing opportunities in outsourcing,  information assurance,  modernization
efforts, and large systems integration projects.

         The larger IT firms doing business with the  government  have extensive
resources  to pursue and win  contracts.  However,  there are a large  number of
contracts  being  awarded by the  Federal  government.  We believe  that we have
demonstrated  our  ability to  effectively  compete and win  government  awarded
contracts.

         We  believe  that  government  contractors  tend to focus on bids  with
specific  agencies and become  comfortable  dealing  within those  agencies.  We
believe this tendency means we will consistently  encounter certain  competitors
at a given agency.  We therefore do not expend much effort  devising  strategies
against our competitors.

     Government Regulation

         We are subject to numerous Federal,  state and local  regulations.  The
most  significant  source of regulations is the Federal  Acquisition  Regulation
("FAR") which defines the laws and regulations  that we must observe relating to
the formation,  administration and performance of Federal government  contracts.
Any company selling to the Federal government must comply with the FAR or face a
penalty or be barred from doing business with the Federal government.

     MSSI Current and Future Products

         We market and sell a broad range of IT products and services. Our sales
teams concentrate on (i) reselling commercial computer hardware and software and
(ii) providing IT services and facilities  management services.  The products we
offer are purchased from major hardware and software distributors.

         Our  competitors  who buy  direct  from the  manufacturers  have a cost
advantage  as we must pay  middleman  profits and are not  eligible for the full
range of supplier discounts. We attempt to overcome this pricing disadvantage by
providing  superior  service and installation of the equipment and software that
we sell.  We deliver  and  install  fully  loaded  and ready to run  stand-alone
personal computers,  networked  workstations,  servers across various platforms,
networked and stand alone printers, and other peripheral devices.


                                       4
<PAGE>
<TABLE>
<CAPTION>


     Sources of Revenue

                               SALES FROM SERVICES

                                         No. of     Total Value       % of        Largest Order      Actual Receipts
                                         Sales     (in millions)      Sales           Value           (in millions)
-------------------------------------- ---------- ---------------- ------------ ------------------- ------------------
<S>                                    <C>        <C>              <C>          <C>                 <C>
May 1, 2001 - April 30, 2002               7           $2.3            31%           $636,520             $2.3
Total Service Sales

May 1, 2002 - April 30, 2003               6           $3.8            44%          $1,516,851            $3.8
Total Service Sales

May 1, 2003 - October 31, 2003 Total       3           $.15            45%           $586,560             $1.5
Service Sales


                               SALES FROM PRODUCTS

                                         No. of     Total Value       % of        Largest Order      Actual Receipts
                                         Sales     (in millions)      Sales           Value           (in millions)
-------------------------------------- ---------- ---------------- ------------ ------------------- ------------------
May 1, 2001 - April 30, 2002              117          $5.1            69%           $300,000             $5.1
Total Product Sales

May 1, 2002 - April 30, 2003              181          $4.8            56%           $379,000             $4.8
Total Product Sales

May 1, 2003 - October 31, 2003 Total      68           $1.9            55%           $299,475             $1.9
Product Sales
</TABLE>



     Service Contracts

         Our  contracts  are  primarily  negotiated  on a  fixed-price  time and
materials  basis.  We charge our  customers a fixed hourly rate for each hour of
service  provided  by skill.  The  skills  and rates  used are  similar to those
established in our GSA Schedule  Contract No.  GS-35F-5347H (the "GSA Contract")
held with the GSA. The GSA Schedule is a Federal government  contract managed by
GSA. Any agency or department of the Federal  government  may purchase goods and
services  by using  this  contract.  Any  seller  of goods and  services  may be
included  on the GSA  Contract's  schedule,  which is a list of sellers who have
negotiated  prices  for the  goods  and  services  they  sell and have  signed a
contract  with GSA  agreeing to provide  those goods and  services to any agency
wishing to purchase  them.  Many Federal  agencies use this contract to purchase
goods and services.

         When  awarded  a  contract,   we  often  recruit  and  hire  additional
employees.  The term of employment of these additional  employees is usually for
the duration of the contract or task order received.


     Products Orders

         We provide products to our customers. We respond to requests for quotes
initiated by  prospective  customers.  Our quoted  prices  include all estimated
costs to deliver the products, plus an overhead and profit amount. None of those
amounts include penalties to either party for early termination.

         We purchase the products we resell only after a valid order is received
from an ordering customer. We maintain no inventory.

         We have commitments to fill 48 signed orders for IT products,  totaling
$920,000,  during the upcoming period  commencing  October 1, 2003 and ending on
November 30, 2003.


                                       5
<PAGE>
<TABLE>
<CAPTION>

     Material Contracts Awarded to MSSI

         Army Medical Command - Walter Reed Army Medical Center - Directorate of
Information  Management  ("DOIM") - Our projects  under this work order  include
database  administration,  internet/intranet  application  development  for Army
medical  support program  requiring the  utilization of the Integrated  Clinical
Data Base ("ICDB") and the Composite Health Care System ("CHCS") resources.  Our
on-site system  development team provides project  research,  data mining,  data
filtering,  and the conversion of legacy  applications,  which includes  project
management  of  task  assignments  issued  to  the  Directorate  of  Information
Management  ("DOIM").  The core  environment  is  Oracle  WEB,  Oracle  DB,  and
SQL-Server,   Active  Server  Page  ("ASP"),  with  an  assortment  of  WEB  and
communication protocol tools.

         The  performance  period for this contract runs from October 1, 2002 to
September 30, 2004,  with a total  contract value to us of  $2,914,114.43.  This
contract  was most  recently  modified  on October  17,  2003 for the purpose of
extending the term of the contract for twelve months.

         The Department of Housing and Urban Development  ("HUD") - We designed,
developed,  and implemented a call center to provide a service desk solution for
HUD's  Office of Public and Indian  Housing  Authority  (PIH).  The call  center
identifies,  tracks and resolves  issues  associated  with the Public and Indian
Housing  Information Center (PIC) system. Our call center staff provides support
to a national user base. In addition to providing call center implementation and
management  services,  we provide  project  management  consulting,  legislative
compliance maintenance, and end-user training services to HUD's PIH personnel.

         Totals for the HUD contracts are as follows:

          Start Date - July 2002
          Completed Portion - July 2002 to June 2003          $1,182,669.48
          Current Portion - July 2003 to June 2004            $1,141,774.68

         Future Options Held by the Government to Extend Are as Follows:

         Option II - July 2004 to June 2005                   $1,091,260.00
         Option III - July 2005 to June 2006                  $1,060,632.00
         Option IV - July 2006 to June 2007                   $1,076,782.00

         This contract  called for a one year base period running from July 2002
to June  2003,  with a series of four  one-year  extension  options.  HUD is not
required to exercise the extension  options.  The total  contract value to us if
HUD  exercises  all of the  options  is  $5,424,614.24.  Payments  are made on a
monthly basis.  This contract was most recently  modified on August 25, 2003 for
the purpose of extending the term of the contract for twelve months.


     Substantial Customers

         During the period May 1, 2002,  through  October 31, 2003, we derived a
substantial  proportion  of our sales  from  three  departments  of the  Federal
government and from the District of Columbia. Those sales were generated through
multiple  contracts.  Individually these contracts do not represent  significant
business,   but  collectively  they  make  our  relationship  with  each  agency
important. The chart below illustrates the distribution.

                          SUBSTANTIAL AGENCY CUSTOMERS

                                   No. of
                                Contracts   Total Value   Largest Order  % of 2003 Business
------------------------------ ----------- ------------- --------------- -------------------
<S>                            <C>         <C>           <C>             <C>
Total Army Customers                8        $2,352,598      $749,107           18%






                                       6
<PAGE>

Total HUD Customers                19        $1,128,807      $993,163           13%

Total USAF Customers               22        $2,960,580      $327,900           34%

Total DC Government Customers       2        $1,085,249      $626,026           13%
</TABLE>


     Future Commitments

         Our contract backlog consists of contracts valuing  approximately $18.3
million, which is based on amounts actually obligated by a client for payment of
goods and  services,  and  unfunded  backlog,  which is based upon  management's
estimate of the future  potential  of our  existing  contracts  and task orders,
including  options,  to generate  revenue.  Our backlog may not result in actual
revenue in any particular period or at all.

         In each case,  the customer  may at any time modify these  contracts to
increase or decrease the contract dollar value or terminate the contract.


     Proprietary Products and Intellectual Property

         We own no  proprietary  products.  Any  proprietary  products  that are
developed are owned by the customer and not us.


     Our Growth Strategy

         Our goal is to continue to grow as a provider of  excellent IT services
and quality products. Our strategy to reach this goal concentrates on:

         o        Maintaining  and growing our core  business.  We will  achieve
                  this  through  (i)  continuing  to build a sales  and  service
                  organization;  (ii)  developing  service  offerings  that have
                  broad   application   across   government   agencies;    (iii)
                  establishing   direct   relationships  with  manufacturers  to
                  maintain pricing competitiveness; and (iv) improving our Human
                  Resource  recruiting  processes and compensation  plans, which
                  will enhance our ability to compete.

         o        Seeking growth  opportunities in new business verticals.  This
                  strategy  will  include  the  private  sector as well as other
                  government  sectors  which  management  believes  represents a
                  forward  growth   opportunity  that  is  currently  not  being
                  addressed.

         o        Strategic  growth  opportunities.  This may include  strategic
                  partnerships, alliances and strategic acquisitions which would
                  leverage  off of our  current  relationships,  and  expand our
                  offering with various government agencies.  Currently,  due to
                  limited access to the capital markets,  management has not yet
                  executed a strategic acquisition.


     Other Material Agreements

         We  have  a  $1.5  million  financing   facility  with  Action  Capital
Corporation  of Atlanta,  Georgia.  Under the terms of this facility we can sell
accounts  receivable  up to 85% of their  value in advance  of payment  from the
customer. Interest on this facility is calculated at prime rate plus one percent
on the daily average balance of unpaid accounts sold plus a 0.95% monthly fee on
said balance. The facility is secured by liens on MSSI's accounts receivable and
by personal guarantees of its principals.



                                       7
<PAGE>

         We issued a  promissory  note to Tazbaz  Holdings  Limited in September
2003 for  receipt of  $250,000.  The  maturity  date of the  promissory  note is
January  8, 2004,  and it pays  interest  at five  percent  per  annum.  Accrued
interest and principal are due on the maturity  date. In the event all principal
and accrued but unpaid  interest  have not been paid by the  maturity  date,  we
shall  have the  right to defer  paying  the  outstanding  balance  of the note,
including all accrued and unpaid interest as of the maturity date, by making six
equal monthly payments of principal and interest  commencing on the date that is
30 days after the maturity date and continuing on said day of the calendar month
for five months  thereafter.  Interest shall accrue at the rate of 15% per annum
during the deferral period.


RISK FACTORS

         Prospective   investors  should   carefully   consider  each,  and  the
cumulative effect of all, of the following risk factors:


     Business Risks

         We depend on contracts  with the Federal  government  for a substantial
         majority of our revenue,  and our business could be seriously harmed if
         the Federal government ceased doing business with us.

         The  Federal  sector  accounts  for  90% of  our  income.  Our  Federal
government  contracts may be terminated by the  government at any time. We could
be barred from doing business with the Federal  government or Federal government
agencies  could  exercise  their right to terminate  our contracts for budgetary
reasons,  convenience of the government, or any other reason. In either case, we
expect  that our  revenues  would  decrease  significantly.  Should our  largest
Federal  government  customer terminate its contract with us, our revenues could
decrease by as much as 20% per month.

         If we fail to  establish  and  maintain  important  relationships  with
         government  entities and agencies,  our ability to successfully bid for
         new business may be adversely affected.

         To facilitate our ability to prepare bids for new business,  we rely in
part on  establishing  and maintaining  relationships  with officials of various
government  entities  and  agencies.  These  relationships  enable us to provide
informal  input and advice to  government  entities  and  agencies  prior to the
development  of a formal  bid.  We may be unable to  successfully  maintain  our
relationships  with government  entities and agencies,  and any failure to do so
may adversely affect our ability to bid successfully for new business.

         We derive  significant  revenue from  contracts and task orders awarded
         through a competitive bidding process. If we are unable to consistently
         win new awards over any extended  period,  our  business and  prospects
         will be adversely affected.

         Substantially  all of our  contracts  and task  orders with the Federal
government are awarded  through a competitive  bidding  process.  We expect that
much of the business that we will seek in the  foreseeable  future will continue
to be awarded through competitive bidding. However, there are no assurances that
our bids will be accepted, even if competitive,  and as such if we are unable to
gain new contracts for any extended  period,  our business and prospects will be
adversely affected.

         Insufficient  positive cash flow could  adversely  impact our operating
         results.

         We depend on the  collection of our  receivables to generate cash flow,
provide working capital, pay debt and continue our business  operations.  If the
Federal  government  or any of our other  customers  fails to pay or delays  the
payment of their outstanding invoices for any reason, our business and financial
condition may be materially  adversely affected.  The government may fail to pay
outstanding  invoices for a number of reasons,  including  lack of  appropriated
funds or lack of an approved budget.

         Currently,   we  have  four  proposal   submissions  awaiting  customer
decisions, which if all were accepted could obligate us to hire 25 new employees



                                       8
<PAGE>

at a  payroll  cost of $  105,000.00  per  month.  Depending  on the  number  of
proposals accepted, we may have to expand our credit facility, since billing and
receipt of payment  typically lag behind payroll by 45 or more days. There is no
guarantee that we will be able to secure an expansion of our credit facility.

         Competition in the markets in which we compete may adversely affect our
         business.

         Our  markets  are  highly  competitive,  and many of the  companies  we
compete against have substantially greater resources.

         Our failure to attract and retain  qualified  employees,  including our
         senior management team, may adversely affect our business.

         Our continued success depends to a substantial degree on our ability to
recruit  and  retain  the  technically  skilled  personnel  we need to serve our
clients effectively. Our business involves the development of tailored solutions
for our clients,  a process that relies  heavily upon the expertise and services
of our  employees.  Accordingly,  our employees are our most valuable  resource.
Competition for skilled  personnel in the IT services  industry is intense,  and
technology service companies often experience high attrition among their skilled
employees.  There is a shortage of people capable of filling these positions and
they are  likely  to  remain a  limited  resource  for the  foreseeable  future.
Recruiting and training  these  personnel  require  substantial  resources.  Our
failure to attract and retain  technical  personnel could  adversely  affect our
business by increasing  our costs of  performing  our  contractual  obligations,
reducing our ability to  efficiently  satisfy our clients'  needs,  limiting our
ability to win new business and constraining our future growth.


     Risks Related to Our Common Stock

         The  liquidity of our common  stock is affected by its limited  trading
ability.

         Shares of our common stock are traded on the OTC  Bulletin  Board under
the symbol "SSRF." There is currently no broadly  followed  established  trading
market for our common stock. An established  trading market may never develop or
be maintained. Active trading markets generally result in lower price volatility
and more  efficient  execution of buy and sell orders.  The absence of an active
trading  market  reduces the liquidity of our shares.  The trading volume of our
common stock  historically  has been limited and  sporadic.  As a result of this
trading  inactivity  and the exchange,  the quoted price for our common stock on
the OTC  Bulletin  Board is not  necessarily  a reliable  indicator  of its fair
market  value.  Further,  if we cease to be quoted,  holders  would find it more
difficult to dispose of, or obtain accurate quotations as to the market value of
our common stock, and the market value of our common stock would likely decline.

         Our  common  stock may be  subject  to  regulations  prescribed  by the
         Securities and Exchange Commission relating to "penny stock."

         The Securities and Exchange  Commission  has adopted  regulations  that
generally  define a "penny  stock" to be any equity  security  that has a market
price (as defined in such regulations) of less than $5.00 per share,  subject to
certain exceptions.  Our common stock is currently subject to these regulations,
which impose additional sales practice  requirements on broker-dealers  who sell
penny  stocks  to  persons  other  than  established  customers  and  accredited
investors,  which  generally  include  institutions  with  assets  in  excess of
$5,000,000  and  individuals  with a net worth in excess of $1,000,000 or annual
income  exceeding  $200,000  (individually)  or  $300,000  (jointly  with  their
spouse).

         Our common stock will likely be subject to substantial price and volume
         fluctuations.

         The  market  price of our  common  stock  has been  volatile  and could
fluctuate  widely in response to several  factors,  some of which are beyond our
control, including:

         o        our quarterly operating results;

         o        additions or departures of key personnel;

         o        changes  in  the  business,   earnings   estimates  or  market
                  perceptions of our competitors;




                                       9
<PAGE>

         o        our introduction of new facilities;

         o        future   sales  of  our   common   stock  by  us  or   selling
                  stockholders;

         o        changes in general market or economic conditions;

         o        announcements of legislative or regulatory change; and

         o        potentially significant downward selling pressure on the stock
                  price  during the  coming  years as  certain  current  and new
                  stockholders  seek to  liquidate  a  portion  or all of  their
                  holdings  for  various  reasons  subject  to  certain  lock-up
                  provisions where applicable.

         The stock market has experienced  extreme price and volume fluctuations
in recent  years  that have  significantly  affected  the  quoted  prices of the
securities of many companies,  including companies in our industry.  The changes
often  appear to occur  without  regard to specific  operating  performance.  In
addition, there has been a limited public market for our common stock. We cannot
predict the extent to which  investor  interest in us will be  maintained.  Such
interest is necessary for an active, liquid trading market for our common stock.
Active  trading  markets  generally  result in lower price  volatility  and more
efficient execution of buy and sell orders for investors.  The price and trading
volumes of our common  stock may  fluctuate  widely  due to the  limited  public
market for our stock.

         A significant number of our shares are eligible for sale and their sale
could depress the market price of our stock.

         Sales of a  significant  number of shares  of our  common  stock in the
public  market  following  the merger and  related  transactions  could harm the
market price of our common stock.  Moreover,  as additional shares of our common
stock  become  available  for  resale  in  the  public  market  pursuant  to the
registration of the sale of the shares, and otherwise,  the supply of our common
stock will increase,  which could decrease its price.  Some or all of the shares
of our common stock may be offered from time to time in the open market pursuant
to Rule 144,  and these  sales may have a  depressive  effect on the  market for
shares of our common stock. In general,  a person who has held restricted shares
for a period of one year may,  upon filing with the SEC a  notification  on Form
144,  sell into the market our common stock in an amount equal to the greater of
one percent of the  outstanding  shares or the average  weekly  number of shares
sold in the last four weeks prior to such sale.  Such sales may be repeated once
each three months.  Any of the restricted  shares may be sold by a non-affiliate
after such shares have been held two years.

         After giving  effect to the Stock  Exchange,  certain of our  principal
         stockholders  will  continue to have  significant  voting power and may
         take  actions   that  may  not  be  in  the  best   interest  of  other
         stockholders.

         Certain of our officers,  directors and principal  stockholders control
and will continue for the foreseeable future to control a significant percentage
of our outstanding common stock. If these  stockholders act together,  they will
be able to exert  significant  control over our management and affairs requiring
stockholder approval,  including approval of significant corporate transactions.
This  concentration of ownership may have the effect of delaying or preventing a
change in control  and might  adversely  affect  the market  price of our common
stock.  This  concentration of ownership may not be in the best interests of all
of our stockholders.

         We do not anticipate  paying dividends in the foreseeable  future,  and
         the lack of dividends may have a negative effect on the stock price.

         We have never declared or paid any cash dividends or  distributions  on
our common stock.  We currently  intend to retain our future earnings to support
operations and to finance expansion and, therefore, do not anticipate paying any
cash dividends on our common stock in the foreseeable  future.  If we do not pay
dividends, our stock price may be negatively affected.

         We are subject to critical  accounting  policies and actual results may
         vary from our estimates.

         We follow  generally  accepted  accounting  principles  for the  United
States in preparing our financial statements. As part of this work, we must make
many estimates and judgments about future events.  These affect the value of the
assets and  liabilities,  contingent  assets and  liabilities,  and  revenue and



                                       10
<PAGE>

expenses that we report in our financial statements.  We believe these estimates
and judgments are reasonable, and we make them in accordance with our accounting
policies based on  information  available at the time.  However,  actual results
could differ from our estimates,  requiring us to record adjustments to expenses
or  revenues  that could be material to our  financial  position  and results of
operations in future periods.


ITEM 2. PROPERTIES

         We lease our principal  corporate office located at 8540 Ashwood Drive,
Capitol  Heights,  Maryland  20743.  The lease  expires  February 28,  2007.  We
currently  pay a base rent of  approximately  $58,000  per year under the lease,
which will increase to  approximately  $63,000 per year during the final year of
the lease term.


ITEM 3. LEGAL PROCEEDINGS

         As of the  date of this  Annual  Report  on Form  10-KSB,  there  is no
material proceeding as to which any director,  officer, affiliate or stockholder
of the Company is a party adverse to the Company.


ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS


         No matters were  submitted to a vote of the holders of our common stock
during the fourth quarter of the fiscal year ended October 31, 2003.

                                     PART II

ITEM 5.  MARKET  FOR THE  REGISTRANT'S  COMMON  EQUITY AND  RELATED  STOCKHOLDER
MATTERS

         Shares of our common stock are traded on the OTC  Bulletin  Board under
the symbol "SSRF." There is currently no broadly  followed  established  trading
market for our common stock. An established  trading market may never develop or
be maintained. Active trading markets generally result in lower price volatility
and more efficient execution of buy and sell orders.

         Holders. As of January 31, 2004 we had approximately 23 stockholders of
record  and our  common  stock had a closing  bid price of $0.70 per share and a
closing ask price of $0.70 per share.

         The  Company's  common stock is quoted on the OTC Bulletin  Board under
symbol  "SSRF." The Company's  common stock was first quoted on the OTC Bulletin
Board on June 5, 2003.  Prior to that time, no trading in the  Company's  common
stock occurred. Therefore, historical price information for the Company's common
stock for the fiscal year ended  October 31,  2002 is not  available.  The chart
below provides  historical  price  information for the fiscal year ended October
31, 2003:

                                    Common Stock
      Fiscal Year Ended             ------------
      October 31, 2003            High         Low
      ----------------            ----         ---
First Quarter                     N/A          N/A
Second Quarter                    N/A          N/A
Third Quarter                    $0.05        $0.05
Fourth Quarter                   $1.50        $1.43

Subsequent Period (November
1, 2003 through January 31,
2004)                            $0.68        $0.68



                                       11
<PAGE>

         The  source  for  the  high  and  low  closing   bids   quotations   is
http://finance.yahoo.com   and  does  not  reflect   inter-dealer  prices.  Such
quotations are without retail mark-ups,  mark-downs or commissions,  and may not
represent actual  transactions and have not been adjusted for stock dividends or
splits.


         Dividends.  We have  never  declared  or paid any cash  dividends,  and
except for the distribution of the common capital stock of Surf Franchise, Inc.,
have  made  no  distributions  of our  or our  subsidiaries'  common  stock.  We
currently  intend to retain our future  earnings  to support  operations  and to
finance expansion and, therefore, do not anticipate paying any cash dividends on
our common stock in the foreseeable future.


ITEM 6. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL  CONDITION OR PLAN OF
        OPERATIONS

         The  following  discussion  should  be read  in  conjunction  with  the
financial  statements and related notes included elsewhere in this report.  This
discussion   contains   forward-looking   statements   that  involve  risks  and
uncertainties.  Our actual  results  could  differ  materially  from the results
anticipated  in  these  forward-looking   statements  as  a  result  of  factors
including,  but not limited to, those  discussed  under "Business -Risk Factors"
and elsewhere in this report.


     Company and Industry Overview

         Industry  Overview.   Information   Technology  ("IT")  refers  to  the
collection of products and services that turn data into useful,  meaningful  and
accessible  information within an enterprise.  The IT industry has several major
facets:  computer  hardware,  software and services.  We include  networking and
telecommunication systems in the definition of IT.

         According to the 15th annual forecast  released in November 2003 by the
Government Electronics and Information Technology Association ("GEIA"),  federal
IT spending will  continue to rise over the next five years.  GEIA predicts that
the total Federal Government IT budget for fiscal 2004 will be $59.3 billion, up
4.4% over  fiscal  2003.  For the next five  years,  GEIA  predicted  that total
federal IT spending will increase 4.1% annually to $72.5 billion by fiscal 2009.

         The Department of Defense ("DoD") is expected to continue as the single
largest  purchaser  of IT services  with IT spending of $27.9  billion in fiscal
2004. GEIA forecasts DoD IT spending to grow annually to $34.9 billion by fiscal
2009.

         As a result  for the  Federal  Government's  demand  for IT  goods  and
services, the General Services Administration's (GSA) spending increased greatly
primarily as a result of spending by GSA's Federal  Technology Service on behalf
of other agencies. Spending on IT services through GSA's federal supply schedule
program grew from about $405 million to $4.3 billion,  over the six-year  fiscal
period  of 1996 to 2001.  The GSA  Schedule  is a  Federal  Government  Contract
managed by GSA. Any agency or department of the Federal  Government may purchase
goods and services by using this contract.  Any seller of goods and services may
be included on the GSA Contract's schedule,  which is a list of sellers who have
negotiated  prices  for the  goods  and  services  they  sell and have  signed a
contract  with GSA  agreeing to provide  those goods and  services to any agency
wishing to purchase  said goods and  services.  Many  federal  agencies use this
contract to purchase goods and services.

         Company  Overview.  We are a provider of Information  Technology ("IT")
solutions to Federal, state and local governments,  including military and civil
agencies.  Our  solutions  are focused in the areas of IT services and products.
Our IT service-based  offerings  include network  operation and design,  systems
analysis  and  deployment,  and business  process  consulting  services.  Our IT
products  involve the  reselling of  brand-name  hardware  and software  such as
peripherals,  office  automation  products,  desktop  and  laptop  systems,  and
computer  accessories.  Since our  inception in 1997,  approximately  90% of our
revenues  were  derived  from sales to agencies of the Federal  government,  and
approximately  10% were  derived  from  sales to  agencies  of state  and  local
governments.



                                       12
<PAGE>

         Service  contracts  are  structured  as  multi-year  arrangements  that
involve a base-year  period and option periods granted to our customers to renew
the contracts that range from one to four years. Our contracts are structured on
a fixed-price time and materials basis with the labor component based on our GSA
Schedule Contract (No. GS-35F-5347H).  In the six-month period ended October 31,
2003, we had five key service contract customer  relationships that generated an
aggregate of $2.7 million in revenue.  For the  twelve-month  period ended April
30, 2003,  our five key service  contract  customer  relationships  generated an
aggregate of $3.8 million in revenue.

         Product sales are generated  from our  customers  through  requests for
quotes that include the  estimated  cost of products from our  suppliers.  These
products are resold to our  customers at a price that covers  acquisition  cost,
shipping and handling,  and a targeted profit margin.  For the six-month  period
ended  October 31, 2003, we had  approximately  45 customer  relationships  that
generated an aggregate of $1.9 million in revenue.  For the twelve-month  period
ended  April 30,  2003,  our  customer  base of 45  relationships  generated  an
aggregate of $4.8 million in revenue.

         Our growth  strategy  is to continue to be a provider of choice for our
current base of Federal, state and local customers.  Maintaining and growing our
core business will be central to generating sustained profitability and adequate
cash flow to fund our operations.  To attract new customers,  we will expand our
consultative selling approach,  which identifies agencies with business problems
that  could be solved  with our core  capabilities.  While we will  continue  to
service our current base of product  sales  customers,  we will redirect more of
our effort and resources to increasing our share of service  contract  revenues.
Service  contracts  provide  recurring,  multiple-year  revenues with attractive
gross profit margins.

         For the six-month  period ended October 31, 2003, our service  contract
revenues  of  $2.7  million  accounted  for  59% of our  total  revenues,  up 14
percentage points over the same period last year.  Product sales of $1.9 million
represented  41% of revenues  and were down  thirteen  percentage  points.  As a
result of this  shift to  service  contracts,  our gross  profit  margin for the
six-month  period ended October 31, 2003 was 31%, up 18  percentage  points over
the same prior-year period.

         Our service contract  backlog consists of existing  contracts valued at
approximately $15 million and represents current work being performed and future
options that we anticipate will be exercised by our customers over the next nine
years. In addition,  our proposal backlog of service  contract  opportunities is
valued at approximately $19 million, and represents potential contracts in which
a prospective or current customer has been presented with a formal proposal.


     Critical Accounting Policies

         As  further   discussed  in  Note  2  to  the  consolidated   financial
statements,  in preparing our  financial  statements,  management  makes several
estimates  and  assumptions   that  affect  our  reported   amounts  of  assets,
liabilities,  revenues and expenses.  Those  accounting  estimates that have the
most significant  impact on the Company's  operating  results and place the most
significant demands on management's judgment are discussed below. With regard to
all of these policies,  management cautions that future events rarely develop as
forecast, and the best estimates may require adjustment.

         Revenue  Recognition  on  Long-Term  Contracts.  We provide  various IT
professional  services to our Federal,  state and local government clients based
on  negotiated  fixed-price,  time and  materials  contracts.  Our customers are
invoiced  monthly at fixed  hourly  rates for each hour of service  provided  by
skill.  These rates and skill sets are based on our GSA Schedule  Contract  (No.
GS-35F-5347H).  We recognize  services-based  revenue from each of our contracts
when the service has been  performed,  the customer has approved the  timesheets
for our  employee or  contractor  providing  the service and an invoice has been
generated and collectibility is reasonably assured. We recognize materials-based
revenue upon delivery, inspection and acceptance by our customer.

         Sale of Accounts Receivable.  We adopted the provisions of Statement of
Financial  Accounting Standards No. 140, "Accounting for Transfers and Servicing
of Financial Assets and  Extinguishment  of Liabilities" on April 1, 2001. Trade
accounts receivable sold are removed from the balance sheet at the time of sale.
We entered into an accounts  receivable  credit  facility  agreement with Action
Capital  Corporation  ("Action  Capital")  of  Atlanta,   Georgia.   Under  this
agreement,  Action  Capital  provides  advances  of up to 85%  of  our  accepted



                                       13
<PAGE>
<TABLE>
<CAPTION>

accounts receivable that are sold and assigned to Action Capital. These accounts
receivable are sold with recourse against us.  Consequently,  we have contingent
liability  for any amounts  advanced by Action  Capital for accounts  receivable
sold and assigned that are subsequently considered uncollectible.  The financing
facility  is  secured  by  liens  on our  accounts  receivable  and by  personal
guarantees of our principal  shareholders.  Interest is calculated at prime rate
plus 1% on the  daily  average  balance  of  unpaid  accounts  sold plus a 0.95%
monthly fee of such average balance.


     Results of Operations.

         The  following  table sets  forth the  results  of  operations  for the
periods presented expressed in U.S. dollars and as a percentage of revenues.


                                                For the Six-Month             For the Six-Month
                                                  Period Ended                  Period Ended
                                                   10/31/2003                    10/31/2002
                                                  $         % of Rev.            $         % of Rev.
                                            -----------    -----------     -----------    -----------
<S>                                         <C>            <C>             <C>            <C>
Revenue from product sales                  $ 1,934,904           41.5%    $ 1,964,801           55.1%
Revenue from service contracts                2,723,267           58.5%      1,598,907           44.9%
                                            -----------    -----------     -----------    -----------
                 Total revenues               4,658,171          100.0%      3,563,708          100.0%
Cost of goods sold                            3,235,358           69.5%      3,093,477           86.8%
                                            -----------    -----------     -----------    -----------
                  Gross profit                1,422,813           30.5%        470,231           13.2%
Operating expenses:
   General and Administrative                 1,403,489           30.1%        726,935           20.4%
   Interest and Bank charges                     94,067            2.0%         61,171            1.7%
   Depreciation                                  25,964            0.6%         20,194            0.6%
                                            -----------    -----------     -----------    -----------
            Total operating expenses          1,523,520           32.7%        808,300           22.7%

             Operating income (loss)           (100,707)         (2.2)%       (338,069)         (9.5)%

Recapitalization costs                          453,606            9.7%              0            0.0%
                                            -----------    -----------     -----------    -----------
Income (loss) before Income taxes              (554,313)        (11.9)%       (338,069)         (9.5)%
Provision for (benefit from) income taxes       (27,360)         (0.6)%           (102)         (0.0)%
                                            -----------    -----------     -----------    -----------
Net income (loss)                           $  (526,953)        (11.3)%    $  (337,967)         (9.5)%
</TABLE>


         Comparison  of  six-month  period  ended  October 31, 2003 to six-month
         period ended October 31, 2002.

         Revenues from Product  Sales.  Our total revenue from product sales was
$1,934,904 and  $1,964,801 for the six-month  periods ended October 31, 2003 and
October 31, 2002, respectively. For the six-month period ended October 31, 2003,
our product sales revenue accounted for approximately 42% of total revenue, down
14  percentage  points from the six-month  period ended  October 31, 2002.  This
decreased emphasis on product sales was caused by management's  strategy to grow
the  network-based  service  contract  revenue base,  which provides  multi-year
recurring  revenues at higher  gross  margins  than those  realized  for product
sales.

         Revenues  from  Service  Contracts.  Our  total  revenue  from  service
contracts was $2,723,267 and $1,598,907 for the six-month  periods ended October
31, 2003 and October 31,  2002,  respectively.  For the  six-month  period ended



                                       14
<PAGE>

October 31, 2003,  service contract revenue  accounted for  approximately 59% of
total revenue,  up 14 percentage  points from the six-month period ended October
31, 2002.

         Gross Profit.  Our gross profit totaled $1,422,813 and $470,231 for the
six-month periods ended October 31, 2003 and October 31, 2002, respectively. For
the  six-month  period ended October 31, 2003, we reported a gross profit margin
of 31%, up 18  percentage  points from the  six-month  period ended  October 31,
2002.  The reason for this  increase was  management's  decision to emphasize IT
professional service contracts, which have higher-margin recurring revenues from
IT professional service contracts than product sales.

         General and Administrative  ("G&A") Expenses.  Our G&A expenses totaled
$1,403,489  and $726,935 for the  six-month  periods  ended October 31, 2003 and
October 31, 2002, respectively. For the six-month period ended October 31, 2003,
G&A  expenses  accounted  for  approximately  30% of our total  revenue,  up ten
percentage  points or $676,554 from the six-month period ended October 31, 2002.
The increase in our G&A was caused  primarily by several  factors:  1. increased
compensation  and  benefits of  approximately  $550,000  for an increase of four
employees in our sales and business development staff, as well as an increase in
of six employees  serving a G&A function,  an increase in employee benefits paid
due to an increase in our employee  health  insurance  co-pay rates (from 20% to
80%), and higher  compensation  levels for certain staff;  2. increased cost for
legal and outside professionals of approximately  $36,000; and 3. an increase in
all other G&A of $91,000 associated with increased sales and marketing programs,
office related expenses and other administrative costs.

         Interest  and Bank  Charges.  Our  interest  and bank  charges  totaled
$94,067 and $61,171 for the six-month periods ended October 31, 2003 and October
31,  2002,  respectively.  For the  six-month  period  ended  October 31,  2003,
interest and bank charges  accounted for  approximately  2% of our total revenue
and was unchanged for the six-month  period ended October 31, 2002. The increase
of $32,896 was caused  primarily from increased  accounts  receivable  financing
costs associated with increased revenues from service contracts.

         Depreciation and  Amortization.  Our  depreciation  expense amounted to
$25,964 and $20,194 for the six-month periods ended October 31, 2003 and October
31,  2002,  respectively.  For the  six-month  period  ended  October 31,  2003,
depreciation  expense accounted for  approximately 1% of our total revenue,  and
was due to increased  purchases of furniture,  computers and office equipment to
handle our increased employment of staff.

         Operating  Income (Loss).  We had an operating loss of $(139,313) or 3%
of our revenue for the six-month period ended October 31, 2003, as compared with
an operating loss of $(338,069) or 10% of our revenue during the same prior-year
period.  Our operating loss for the six-month  period ended October 31, 2003 was
attributable   principally  to  higher  general  and   administrative   expenses
associated with increased infrastructure needed to shift our strategic direction
to generating  recurring revenues from IT professional  service  contracts.  Our
operating  loss of $(139,313)  for the  six-month  period ended October 31, 2003
improved by  $198,756  over the same period for the prior year and was driven by
increased gross profits from our service contract revenues.

         Recapitalization Costs. We incurred recapitalization costs of $453,606,
or 9% of our revenue, during the six-month period ended October 31, 2003, due to
the Company's stock exchange transaction we completed with the shareholders of
MSSI on October 6, 2003. A total of $415,000 was paid for management advisory
services and $38,606 was paid for legal services. During the six-month period
ended October 31, 2002, we did not incur any recapitalization costs.

         Provision for Income Taxes.  For the six-month period ended October 31,
2003,  our provision for income taxes  represented a tax benefit of $27,360,  or
0.4% of  revenues,  and  resulted  from an increase in our  deferred  income tax
assets.

         The  following  table sets  forth the  results  of  operations  for the
periods presented expressed in U.S. dollars and as a percentage of revenues.



                                       15
<PAGE>
<TABLE>
<CAPTION>

                                              For the Twelve-Month       For the Twelve-Month
                                                  Period Ended               Period Ended
                                                   4/30/2003                  4/30/2002
                                                 $        % of Rev.         $        % of Rev.
                                            ----------   ----------    ----------   ----------
<S>                                         <C>          <C>           <C>          <C>
Revenue from product sales                  $4,801,059         55.6%   $5,096,688         69.3%
Revenue from service contracts               3,838,923         44.4%    2,259,549         30.7%
                                            ----------   ----------    ----------   ----------
                 Total revenues              8,639,982        100.0%    7,356,237        100.0%
Cost of goods sold                           6,544,910         75.8%    5,762,024         78.3%
                                            ----------   ----------    ----------   ----------
                  Gross profit               2,095,072         24.2%    1,594,213         21.7%
Operating expenses:
   General and Administrative                1,793,268         20.8%    1,157,746         15.8%
   Interest and Bank charges                   135,846          1.6%       82,210          1.1%
   Depreciation                                 40,388          0.4%       15,564          0.2%
                                            ----------   ----------    ----------   ----------
            Total operating expenses         1,969,502         22.8%    1,255,520         17.1%

             Operating income (loss)           125,570          1.4%      338,693          4.6%
                                            ----------   ----------    ----------   ----------
Income (loss) before Income taxes              125,570          1.4%      338,693          4.6%
Provision for (benefit from) income taxes       41,208          0.4%      131,115          1.8%
                                            ----------   ----------    ----------   ----------
Net income (loss)                           $   84,362          1.0%   $  207,578          2.8%
</TABLE>


         Comparison of twelve-month  period ended April 30, 2003 to twelve-month
         period ended April 30, 2002.

         Revenues from Product  Sales.  Our total revenue from product sales was
$4,801,059 and $5,096,688 for the twelve-month  periods ended April 30, 2003 and
April 30, 2002, respectively.  For the twelve-month period ended April 30, 2003,
product sales revenue  accounted for  approximately  56% of total revenue,  down
thirteen  percentage points or $295,629 from the twelve-month period ended April
30, 2002. The reduced emphasis on products sales is part of our strategy to grow
the  network-based  service  contract  revenue  base which  provides  multi-year
recurring revenues at higher gross margins than realized for product sales.

         Revenues  from  Service  Contracts.  Our  total  revenue  from  service
contracts was $3,838,923 and $2,259,549 for the twelve-month periods ended April
30, 2003 and April 30, 2002,  respectively.  For the  twelve-month  period ended
April 30, 2003,  service  contract revenue  increased  $1,579,374 over the prior
period  and  accounted  for  approximately  44% of total  revenue,  up  thirteen
percentage  points  from the  twelve-month  period  ended  April  30,  2002.  As
previously  mentioned,  increasing the service  contract segment of revenue is a
key strategic focus for our company.

         Gross Profit.  Our gross profit  totaled  $2,095,072 and $1,594,213 for
the twelve-month periods ended April 30, 2003 and April 30, 2002,  respectively.
For the twelve-month period ended April 30, 2003, gross profit margin of 24% was
up two percentage  points or $500,859 from the  twelve-month  period ended April
30, 2002.



                                       16
<PAGE>

         General and Administrative  ("G&A") Expenses.  Our G&A expenses totaled
$1,793,268 and $1,157,746 for the twelve-month  periods ended April 30, 2003 and
April 30, 2002, respectively.  For the twelve-month period ended April 30, 2003,
G&A  expenses  accounted  for  approximately  21%  of  total  revenue,  up  five
percentage points or $635,522 from the twelve-month period ended April 30, 2002.
This  increase in G&A was caused  primarily  by 1.  increased  compensation  and
benefits of $390,000  associated  with an increase in  corporate  administration
headcount of three employees,  increased compensation for certain employees, and
increased  employee  benefits due to our higher employee health insurance co-pay
(from 20% to 80%), 2. increased legal and outside  professional costs of $95,000
associated with management  advisory and consultancy  costs  associated with our
strategic planning process, 3. higher transportation and travel costs of $30,000
associated with our sales and marketing  programs,  and 4. increased  office and
administrative cost of $120,000.

         Interest  and Bank  Charges.  Our  interest  and bank  charges  totaled
$135,846 and $82,210 for the twelve-month periods ended April 30, 2003 and April
30,  2002,  respectively.  For the  twelve-month  period  ended April 30,  2003,
interest and bank charges accounted for approximately 1.6% of total revenue,  up
0.5 percentage  points or $53,636 from the  twelve-month  period ended April 30,
2002.  The  increase of $53,636 was caused  primarily  from  increased  accounts
receivable  financing  costs  associated  with  increased  revenues from service
contracts.

         Depreciation and  Amortization.  Our  depreciation  expense amounted to
$40,388 and $15,564 for the twelve-month  periods ended April 30, 2003 and April
30,  2002,  respectively.  For the  twelve-month  period  ended April 31,  2003,
depreciation  expense  accounted for 0.4% of total  revenue,  up 0.2  percentage
points  or  $24,824  from the  twelve-month  period  ended  April  30,  2002 and
reflected increased purchases of furniture and equipment.

         Operating Income (Loss). We had operating income of $125,570 or 1.4% of
revenue for the  twelve-month  period  ended April 30,  2003,  as compared  with
operating  income of $338,693 or 4.6 % of revenue  for the  twelve-month  period
ended April 30, 2002.  The operating  income for the  twelve-month  period ended
April 30, 2003  decreased  $213,123  from the prior period and was  attributable
principally to increased  operating expenses associated with increased number of
employees and increased  interest costs  associated  with financing our accounts
receivable.

         Provision  for Income  Taxes.  We recorded an income tax  provision  of
$41,208,  or 0.4% of revenue,  for the twelve-month period ended April 30, 2003,
compared with a provision of $131,115,  or 1.8% of revenue, for the twelve-month
period ended April 30, 2002. The lower  provision was caused by the reduction in
our  operating  profit of $213,123  from April 30, 2003 versus the prior period,
and a lower effective income tax rate of 33% versus 39% for the prior period.


     Liquidity and Capital Resources

         Comparison  of  six-month  period  ended  October 31, 2003 to six-month
         period ended October 31, 2002.

         Our  Consolidated  Statements  of Cash Flows detail the cash flows from
operating,  investing and financing  activities.  Primary sources of funding for
our operations  and growth have been cash generated from current  operations and
the use of receivable financing to supplement financing of capital expenditures.
As of October 31, 2003, we had cash and cash equivalents of $255,178, a decrease
of $5,959 for the period. The decrease in cash of $5,959 resulted primarily from
cash used in  operations  of $236,437,  purchases of furniture  and equipment of
$19,522;  offset  partially  by  increased  cash from  financing  activities  of
$250,000.

         Cash Flows from  Operating  Activities.  Our net cash used in operating
activities  was $236,437 for the six-month  period ended  October 31, 2003.  Our
cash position was impacted negatively by  recapitalization  expenses of $453,606
to effect the stock exchange  transaction we completed with the  shareholders of
MSSI on October 6, 2003. During this period, our working capital had a favorable
impact to cash flow of $264,551 and was caused by a reduction  (positive  impact
to cash flow) in accounts  receivable  of $573,382  and a reduction  of accounts
payable  and accrued  liabilities  (negative  impact to cash flow) of  $308,831.
Finally, our operating activities resulted in a cash usage of $47,382, driven by
increased  expenses  related to building  up the  corporate  infrastructure  and
investing in marketing and sales activities.



                                       17
<PAGE>

         Net  cash  used  in our  operating  activities  was  $192,029  for  the
six-month  period ended  October 31,  2002.  Our cash  position  was  negatively
impacted by a loss in operating  activities of $317,773;  offset  partially by a
favorable increase in our working capital of $125,744. The favorable increase in
our working  capital was driven by an increase in accounts  payable of $398,245;
offset partially by increased accounts receivable of $272,501.

         Cash  Used in  Investing  Activities.  Net cash  used in our  investing
activities  for the six-month  period  October 31, 2003 was $19,522 and resulted
principally from the purchase of furniture, computers, and office equipment used
in the operating activities of our business.

         For the six-month  period ended October 31, 2002,  net cash used in our
investing  activities was $72,205 and resulted  principally from the purchase of
furniture,  computers and office  equipment  associated with increased  staffing
levels.

         Cash Provided by Financing  Activities.  For the six-month period ended
October 31, 2003, we generated $250,000 net cash from financing activities.  The
sole source of funds came from the loan  proceeds  received from the note issued
to Tazbaz Holdings Limited.

         For  the  six-month  period  ended  October  31,  2002,  we had no cash
provided or used by financing activities.

         We currently  believe that cash on hand and  internally  generated cash
flow will be sufficient to meet our current anticipated cash requirements for at
least the next twelve months.  Future capital requirements will depend upon many
factors,  including  the overall cost of such  financings,  the expansion of our
growth strategy and the addition of employees and corporate infrastructure.


     Liquidity and Capital Resources

         Comparison of twelve-month  period ended April 30, 2003 to twelve-month
         period ended April 30, 2002.

         Our  Consolidated  Statements  of Cash Flows detail the cash flows from
operating,  investing and financing  activities.  Primary sources of funding for
our operations  and growth have been cash generated from current  operations and
the use of receivable financing to supplement financing of capital expenditures.
As of April  30,  2003,  we had cash and cash  equivalents  of  $261,135  versus
$435,576  at April  30,  2002.  Our cash  decreased  by  $174,441  and  resulted
primarily  from  cash  used  in  operating  activities  of  $154,832,  increased
purchases  of  furniture  and  equipment  of $98,857;  offset  partially by cash
provided by financing activities of $79,248

         Cash Flows from  Operating  Activities.  Our net cash used in operating
activities  was $154,832 for the  twelve-month  period ended April 30, 2003. Net
Income and depreciation generated cash of $124,750,  while our increased working
capital  needs  used cash of  $279,582.  Our  working  capital  usage was caused
primarily by higher accounts receivable of $898,512, and was associated with our
service contract  revenues;  offset partially by the favorable impact to cash of
higher  accounts  payable,  accrued  liabilities,  and income  taxes  payable of
$618,930.

         Our net cash  provided by  operating  activities  was  $651,184 for the
twelve-month period ended April 30, 2002. Net Income and depreciation  generated
cash of $223,142  and our  decreased  working  capital  needs  provided  cash of
$428,042.  Our working capital was favorably impacted by an increase in accounts
payable,  accrued liabilities,  and income taxes payable of $571,159,  while our
accounts  receivable  and prepaid  expenses/deposits  increased and used cash of
$143,117.

         Cash  Used in  Investing  Activities.  Our net cash  used in  investing
activities for the  twelve-month  period April 30, 2003 was $98,857 and resulted
principally from purchases of furniture,  computers and office equipment used in
the operating activities of our business.

         For the twelve-month  period ended April 30, 2002, our net cash used in
investing  activities  was $166,407 and resulted  principally  from purchases of
furniture,  computers and office  equipment  associated with increased  staffing
levels.



                                       18
<PAGE>

         Cash  Provided by Financing  Activities.  For the  twelve-month  period
ended October 31, 2003, we generated $79,248 net cash from financing  activities
and was due from repayment of loans made to certain principal shareholders.

         For the  twelve-month  period ended October 31, 2002, our net cash used
in financing  activities totaled $85,988, and resulted principally from advances
to principal  shareholders of $52,728, and purchase of shares in publicly-traded
corporations and mutual funds of $33,260.

         Credit Facilities. We have a $1.5 million accounts receivable financing
facility with Action Capital.  Under the terms of this facility,  we can sell up
to 85% of the value of  accounts  receivable  in  advance  of  payment  from the
customer.  Interest on this facility is calculated at the prevailing  bank prime
rate plus 1.0% on the average  daily  balance of accounts  receivable  sold plus
0.95% monthly fee of the said  balance.  The facility is secured by liens on our
accounts  receivable  and by personal  guarantees  of our  principals.  Accounts
receivable  sold and  assigned  under this  facility  amounted to  $605,254  and
$1,481,409 as of October 31, 2003 and October 31, 2002, respectively.

         We issued a  promissory  note to Tazbaz  Holdings  Limited of  Ontario,
Canada in September  2003 for receipt of $250,000.  The loan  proceeds were used
for  general  corporate  purposes.  The loan  matured  on  January  8, 2004 (the
"Maturity  Date") and  accrued  interest  at the rate of 5% per annum.  The note
provided  for a  deferral  period,  pursuant  to which we  deferred  paying  the
outstanding balance of the note, including all accrued and unpaid interest as of
the  Maturity  Date,  by making six equal  monthly  payments  of  principal  and
interest  commencing  on the date that is 30 days  after the  Maturity  Date and
continuing on said day of each calendar month thereafter.  Interest shall accrue
at the rate of 15% per annum during the deferral period.

         Subsequent   Events.  On  December  15,  2003,  we  signed  a  $250,000
Convertible Promissory Note payable to a minority shareholder. The loan proceeds
will be delivered in  installments,  the first of which was received on the same
day for  $25,000.  The loan is payable  on demand  anytime  after June 30,  2004
("demand date").  The interest rate is 6% per annum,  compounded  annually.  The
conversion of the unpaid  principal  and interest  balance into our common stock
shares is exercisable at our option at any time during the period  commencing 30
days prior to the demand date and based on the closing price of the common stock
on the date of conversion

         Other.  The following table summarizes our contractual cash obligations
at October 31, 2003,  and the effect these  obligations  are expected to have on
our liquidity and cash flow in future periods:


                       Payments Due by Period (in dollars)

----------------------- ----------- ----------- ----------- ---------- ---------
Contractual Cash                     Less than                          After
Obligations              Total       1 Year      1-3 Years   4-5 Years  5 Years
----------------------- ----------- ----------- ----------- ---------- ---------
Short-term debt         $ 292,568    $292,568          $0          $0      $0
----------------------- ----------- ----------- ----------- ---------- ---------
Operating Leases          207,200      58,500     122,400       26,300     $0
----------------------- ----------- ----------- ----------- ---------- ---------
Total Contractual Cash
Obligations             $ 499,768    $351,068    $122,400      $26,300     $0
----------------------- ----------- ----------- ----------- ---------- ---------


     Use of Estimates and Certain Significant Estimates


         The  preparation of financial  statements in conformity  with generally
accepted accounting principles for the United States 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.

     Forward Looking Statements

         Some of the statements  under  "Business and Industry  Overview",  "Our
Growth  Strategy" and elsewhere in this Annual Report on Form 10-KSB  constitute


                                       19
<PAGE>

forward-looking  statements.  These statements  involve known and unknown risks,
uncertainties  and  other  factors  that may  cause  actual  results,  levels of
activity, performance or achievements to be materially different from any future
results, levels of activity,  performance,  or achievements expressed or implied
by such forward-looking statements.

         Such  factors  include,  among other  things,  those  described in this
Annual Report on Form 10-KSB.  In some cases,  you can identify  forward-looking
statements by terminology such as "may," "will," "should,"  "could,"  "expects,"
"plans,"  "intends,"   "anticipates,"   "believes,"   "estimates,"   "predicts,"
"potential"  or  "continue"  or the  negative of such terms or other  comparable
terminology.  Although  we  believe  that  the  expectations  reflected  in  the
forward-looking  statements are reasonable,  we cannot guarantee future results,
levels of activity,  performance,  or achievements.  Moreover, neither any other
person nor we assumes  responsibility  for the accuracy and completeness of such
statements. We are under no duty to update any of the forward-looking statements
after the date of this Annual Report on Form 10-KSB.


ITEM 7. FINANCIAL STATEMENTS


         Reference is made to page F-1 herein for the Index to the  Consolidated
Financial Statements.


ITEM  8.  CHANGES  IN AND  DISAGREEMENTS  WITH  ACCOUNTANTS  ON  ACCOUNTING  AND
          FINANCIAL DISCLOSURE

         Effective  October  16,  2003,  our  Board of  Directors  approved  the
replacement  of Stewart H. Benjamin,  CPA, PC  ("Benjamin")  as its  independent
auditor for the fiscal year ending  October 31,  2003,  with  Schwartz  Levitsky
Feldman  llp.  Benjamin  resigned  effective  October 16,  2003.  The reports of
Benjamin on our consolidated financial statements for the year ended October 31,
2002, for which Benjamin's  Independent  Auditors' Report was dated December 30,
2002,  contained  no adverse  opinion  or  disclaimer  of  opinion  and were not
qualified or modified as to uncertainty or audit scope.

         There  were no  disagreements  with  Benjamin  during the period of his
appointment as our  independent  auditor  through the date of his resignation on
any matter of accounting principals or practices, financial statement disclosure
or auditing  scope or procedure.  Additionally,  there were no other  reportable
matters,  as defined in Item 304(a)(1)(iv) of Regulation S-B, during that period
of time. We provided  Benjamin with a copy of these  disclosures  in response to
the disclosures required by Regulation S-B, Item 304(a).


ITEM 8A. CONTROLS AND PROCEDURES

         We maintain  disclosure  controls and  procedures  that are designed to
ensure that information  required to be disclosed in our Exchange Act reports is
recorded,  processed,  summarized and reported within the time periods specified
in the SEC's  rules and forms,  and that such  information  is  accumulated  and
communicated to our management, including our Chief Executive Officer and acting
Chief Financial  Officer,  as appropriate,  to allow timely decisions  regarding
required disclosure.  Such controls and procedures, by their nature, can provide
only reasonable assurance regarding management's control objectives.

         We  carried  out an  evaluation,  under  the  supervision  and with the
participation  of our  management,  including  our Chief  Executive  Officer and
acting Chief Financial Officer, on the effectiveness of the design and operation
of our disclosure  controls and procedures pursuant to Exchange Act Rules 13a-15
and  15d-15 as of  October  31,  2003.  Based  upon that  evaluation,  our Chief
Executive  Officer  and  acting  Chief  Financial  Officer  concluded  that  our
disclosure  controls and  procedures  are  effective in timely  alerting them to
material  information  relating to us (including our consolidated  subsidiaries)
required to be included in our Exchange Act reports.

         While we believe that our existing  disclosure  controls and procedures
have been  effective to accomplish  their  objectives,  we intend to continue to
examine,  refine and formulize our  disclosure  controls and  procedures  and to
monitor ongoing developments in this area.



                                       20
<PAGE>

                                    PART III

ITEM 9. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT


         The information  called for by Item 9 with respect to identification of
our  directors  will be included  under the captions  "Proposal  3:  Election of
Directors" and "Section 16(a) Beneficial Ownership Reporting  Compliance" in the
proxy statement for our 2004 Annual Meeting of Stockholders which is expected to
be filed with the  Securities and Exchange  Commission on or before  February 6,
2004 (the "2004 Proxy Statement").


ITEM 10. EXECUTIVE COMPENSATION

         The  information  called  for by  Item 10 with  respect  to  management
remuneration  and  transactions  is  incorporated  herein  by  reference  to the
material under the caption  "Executive  Officers and  Compensation"  in the 2004
Proxy Statement.


ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

         The  information  called  for by  Item  11  with  respect  to  security
ownership of certain beneficial owners and management is incorporated  herein by
reference  to the  material  under the caption  "Security  Ownership  of Certain
Beneficial Owners and Management" in our 2004 Proxy Statement.


ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         The  information  called for by Item 12 with  respect  to  transactions
between us and certain related  entities is incorporated  herein by reference to
the material under the caption "Certain  Relationships and Related Transactions"
in our 2004 Proxy Statement.


ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K


     Statements filed as part of this Report:


         1. Consolidated Financial Statements


         See the  Consolidated  Financial  Statements  that follow the signature
         pages to this Annual Report.


     Exhibits


         The  following  documents  are  filed  as  exhibits  herewith,   unless
otherwise specified, and are incorporated herein by this reference:

         Exhibit
         Number            Description of Exhibit
         ----------        -----------------------------------------------------
         2.1#              Securities  Exchange Agreement dated October 6, 2003,
                           by and among Sun & Surf,  Inc.,  Jeffrey R. Esposito,
                           Management   Solutions  &  Systems,   Inc.   and  the
                           shareholders of Management Solutions & Systems, Inc.

         3.1*              Articles of Incorporation of Sun & Surf, Inc.

         3.2*              Bylaws of Sun & Surf, Inc.

         10.1#             Promissory Note dated  September 10, 2003,  issued by
                           Management  Solutions  &  Systems,  Inc.  in favor of
                           Tazbaz Holdings Limited for the sum of $250,000




                                       21
<PAGE>

         10.2#             Financing  and  Security  Agreement  by  and  between
                           Management  Solutions  &  Systems,  Inc.  and  Action
                           Capital Corporation, dated June 14, 2001

         10.3#             Agreement  by  and  between  Management  Solutions  &
                           Systems,  Inc.  and  Department  of Housing and Urban
                           Development,  Office of Public  and  Indian  Housing,
                           dated July 1, 2002

         10.4#             Modification  of Contract  by and between  Management
                           Solutions & Systems,  Inc. and  Department of Housing
                           and Urban Development, dated July 1, 2003

         10.5#             Modification   of  Cost   Proposal   by  and  between
                           Management  Solutions & Systems,  Inc. and Department
                           of Housing and Urban  Development,  dated  August 25,
                           2003

         10.6#             Order  for  Supplies  and  Services  by  and  between
                           Management  Solutions & Systems,  Inc. and GSA Region
                           6, dated September 30, 2002

         10.7#             Modification  of Contract  by and between  Management
                           Solutions  &  Systems,  Inc.  and GSA Region 6, dated
                           November 20, 2002

         10.8#             Modification  of Contract  by and between  Management
                           Solutions  &  Systems,  Inc.  and GSA Region 6, dated
                           April 28, 2003

         10.9#             Modification  of Contract  by and between  Management
                           Solutions  &  Systems,  Inc.  and GSA Region 6, dated
                           April 29, 2003

         10.10#            Order   Modification   by  and   between   Management
                           Solutions  &  Systems,  Inc.  and GSA Region 6, dated
                           September 12, 2003

         10.11#            Order   Modification   by  and   between   Management
                           Solutions  &  Systems,  Inc.  and GSA Region 6, dated
                           September 23, 2003

         10.12#            Order   Modification   by  and   between   Management
                           Solutions  &  Systems,  Inc.  and GSA Region 6, dated
                           October 17, 2003

         16.1#             Letter of  Stewart  H.  Benjamin,  CPA,  P.C.,  dated
                           October 21, 2003

         21.1+             Subsidiaries of the registrant.

         31.1+             Statement  of  Chief  Executive   Officer   Furnished
                           Pursuant To Section 302 Of The  Sarbanes-Oxley Act Of
                           2002

         31.2+             Statement  of  Chief  Financial   Officer   Furnished
                           Pursuant To Section 302 Of The  Sarbanes-Oxley Act Of
                           2002

         32.1+             Statement  of  Chief  Executive   Officer   Furnished
                           Pursuant To Section 906 Of The  Sarbanes-Oxley Act Of
                           2002

         32.2+             Statement  of  Chief  Financial   Officer   Furnished
                           Pursuant To Section 906 Of The  Sarbanes-Oxley Act Of
                           2002
-----------------
* Previously  filed as an exhibit to Form 10-SB as filed with the  Commission on
November 20, 2003, and incorporated herein by reference.

# Previously filed as an exhibit to the Company's  Current Report on Form 8-K as
filed with the  Commission on October 21, 2003,  and is  incorporated  herein by
reference.

+ Filed herewith.



                                       22
<PAGE>

     Reports on Form 8-K


         The Company filed a Current  Report on Form 8-K with the SEC on October
21, 2003 reporting, (i) the Change in Control of the Company; (ii) Change in the
Company's  Certifying  Accountant and (iii) Financial  Statements,  and Exhibits
filed as part of the Current Report.

         There  were no other  reports on Form 8-K filed with the SEC during the
last quarter of fiscal year ended October 31, 2003.

         The  Company  filed a  Current  Report  on Form  8-K/A  with the SEC on
December 22, 2003 to include Pro Forma Financial  Information for the previously
filed Form 8-K referenced above.


ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES


         The  information  called  for by  Item  14 with  respect  to  principal
accountant fees and services is incorporated herein by reference to the material
under the caption  "Relationship  with  Independent  Auditors" in our 2004 Proxy
Statement.






























                                       23
<PAGE>

                                   SIGNATURES

         Pursuant to the  requirements of Section 13 or 15 (d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.


                                                       Sun & Surf, Inc.

Dated:  February 6, 2004                               By: /s/ Clifford Pope
                                                          ----------------------
                                                          Clifford Pope
                                                          President




         Pursuant to the  requirements  of the Securities  Exchange Act of 1934,
this  report has been  signed  below by the  following  persons on behalf of the
registrant and in the capacities and on the dates indicated.


Dated:  February 6, 2004                               By: /s/ Clifford Pope
                                                          ----------------------
                                                          Clifford Pope
                                                          President
                                                          Director

Dated:  February 6, 2004                               By: /s/ Larry L. Brooks
                                                          ----------------------
                                                          Larry L. Brooks
                                                          Vice President
                                                          Director

Dated:  February 6, 2004                               By: /s/ Larry Swinton
                                                          ----------------------
                                                          Larry Swinton
                                                           Director






























                                       24
<PAGE>

                                 SUN & SURF INC.

                        CONSOLIDATED FINANCIAL STATEMENTS

                             AS OF OCTOBER 31, 2003

                  TOGETHER WITH REPORT OF INDEPENDENT AUDITORS

                           AND AS OF OCTOBER 31, 2002

                                   (Unaudited)

                        (Amounts expressed in US Dollars)


                                TABLE OF CONTENTS


Report of Independent Auditors                                                 1

Consolidated Balance Sheets as of October 31, 2003 and 2002 (unaudited)    2 - 3

Consolidated Statements of Operations for the six month periods ended
    October 31, 2003 and 2002 (unaudited)                                      4

Consolidated Statements of Changes in Stockholders' Equity for the six month
    periods ended October 31, 2003 and 2002 (unaudited)                        5

Consolidated Statements of Cash Flows for the six month periods ended
    October 31, 2003 and 2002 (unaudited)                                      6

Notes to Consolidated Financial Statements                                7 - 16







<PAGE>

                         REPORT OF INDEPENDENT AUDITORS

To the Board of Directors and Stockholders of
Sun & Surf Inc.

We have audited the accompanying  consolidated balance sheets of Sun & Surf Inc.
as at October 31, 2003 and the related  consolidated  statements of  operations,
cash flows and changes in  stockholders'  equity for the six month  period ended
October 31, 2003. These consolidated financial statements are the responsibility
of the management of Sun & Surf Inc. Our responsibility is to express an opinion
on these consolidated financial statements based on our audits.

We conducted our audit in accordance with generally  accepted auditing standards
in the  United  States of  America.  Those  standards  require  that we plan and
perform the audit to obtain reasonable  assurance about whether the consolidated
financial  statements  are free of  material  misstatement.  An  audit  includes
examining,  on a test basis,  evidence supporting the amounts and disclosures in
the  consolidated  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,  these  consolidated  financial  statements  referred  to above
present fairly, in all material  respects,  the financial position of Sun & Surf
Inc. as of October 31, 2003 and the results of its operations and its cash flows
for the six month  period  then  ended in  conformity  with  generally  accepted
accounting principles in the United States of America.




Toronto, Ontario                                 "Schwartz Levitsky Feldman llp"
December 5, 2003, except for notes                         Chartered Accountants
    7 and 11 which are as of January 9, 2004

























                                       F-1

<PAGE>

SUN & SURF INC.
Consolidated Balance Sheets
As of October 31, 2003 and 2002
(Amounts expressed in US Dollars)
                                                          2003           2002

                                                           $              $
                                                                     (Unaudited)

                                     ASSETS
CURRENT ASSETS

    Cash                                                  255,178        171,342
    Marketable and other securities                        39,248         38,260
    Accounts receivable (note 3)                          605,255        508,659
    Factor's holdback receivable (note 3)                 101,906        145,875
    Prepaid expenses and deposits                           9,500          9,500
    Deferred income taxes (note 5)                          1,976           --
                                                     ------------   ------------


                                                        1,013,063        873,636

DEFERRED INCOME TAXES (note 5)                             17,605           --

ADVANCES TO SHAREHOLDERS                                     --           79,248

PROPERTY AND EQUIPMENT (note 4)                           204,881        205,853
                                                     ------------   ------------


                                                        1,235,549      1,158,737
                                                     ============   ============


















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






                                       F-2
<PAGE>

SUN & SURF INC.
Consolidated Balance Sheets
As of October 31, 2003 and 2002
(Amounts expressed in US Dollars)
                                                         2003           2002

                                                           $              $
                                                                    (Unaudited)

                            LIABILITIES
CURRENT LIABILITIES

    Accounts payable                                     558,186        936,075
    Accrued liabilities                                  359,458         83,547
    Income taxes payable (note 5)                        197,936        156,641
    Deferred income taxes (note 5)                          --            2,755
    Promissory note payable (note 6)                     250,000           --
                                                     -----------    -----------


                                                       1,365,580      1,179,018

DEFERRED INCOME TAXES                                       --            5,126
                                                     -----------    -----------

                                                       1,365,580      1,184,144
                                                     -----------    -----------


                     STOCKHOLDERS' DEFICIENCY

CAPITAL STOCK (note 7)                                    21,530         21,530

ADDITIONAL PAID-IN CAPITAL (DISCOUNT)                    (18,830)       (18,830)

DEFICIT                                                 (132,731)       (28,107)
                                                     -----------    -----------


                                                        (130,031)       (25,407)
                                                     -----------    -----------


                                                       1,235,549      1,158,737
                                                     ===========    ===========





























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

                                      F-3

<PAGE>

SUN & SURF INC.
Consolidated Statements of Operations
For the six month periods ended October 31, 2003 and 2002
(Amounts expressed in US Dollars)
                                                        2003           2002

                                                          $              $
                                                                    (Unaudited)

REVENUE

    Sales                                              1,934,904      1,964,801
    Service                                            2,723,267      1,598,907
                                                     -----------    -----------


                                                       4,658,171      3,563,708

COST OF GOODS SOLD                                     3,235,358      3,093,477
                                                     -----------    -----------


GROSS PROFIT                                           1,422,813        470,231
                                                     -----------    -----------


EXPENSES

    General and administrative                         1,403,489        726,935
    Interest and bank charges                             94,067         61,171
    Depreciation                                          25,964         20,194
                                                     -----------    -----------


                                                       1,523,520        808,300
                                                     -----------    -----------


LOSS BEFORE UNDERNOTED ITEM AND
    INCOME TAXES                                        (100,707)      (338,069)

    Recapitalization costs (note 1)                      453,606           --
                                                     -----------    -----------


LOSS BEFORE INCOME TAXES                                (554,313)      (338,069)

    Income taxes recovery                                (27,360)          (102)
                                                     -----------    -----------


NET LOSS                                                (526,953)      (337,967)
                                                     ===========    ===========


Loss per share                                             (0.03)         (0.02)
                                                     ===========    ===========


Weighted average number of shares outstanding         15,887,228     15,000,000
                                                     ===========    ===========



















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

                                      F-4




<PAGE>
<TABLE>
<CAPTION>

SUN & SURF INC.
Consolidated Statements of Changes in Stockholders' Equity
For the six month periods ended October 31, 2003 and 2002
(Amounts expressed in US Dollars)

                                                                               Additional
                                                                                  Paid        Retained
                                                       Common Stock            in Capital     Earnings
                                                   Number         Amount       (Discount)     (Deficit)
                                                -----------    -----------    -----------    -----------
                                                                    $              $              $
<S>                                             <C>            <C>            <C>            <C>

Balance as of April 30, 2002,
   as previously reported                         4,960,250          4,960            694        309,860

   Stock split of 10:1                           44,642,250           --             --             --
   Cancellation of shares (note 7)              (43,072,500)       (43,072)          --             --
   Shares issued pursuant to reverse
      acquisition (note 1)                       15,000,000         15,000        (15,000)          --
   Adjustment relating to stock split and
      reverse acquisition                              --           44,642         (4,524)          --
                                                -----------    -----------    -----------    -----------


Balance as of April 30, 2002, as restated        21,530,000         21,530        (18,830)       309,860

   Net loss for the period from May 1, 2002
      to October 31, 2002                              --             --             --         (337,967)


Balance as of October 31, 2002                   21,530,000         21,530        (18,830)       (28,107)

   Net income for the period from November 1,
     2002 to April 30, 2003                            --             --             --          422,329
                                                -----------    -----------    -----------    -----------

Balance as of April 30, 2003                     21,530,000         21,530        (18,830)       394,222

   Net loss for the period                             --             --             --         (526,953)
                                                -----------    -----------    -----------    -----------

Balance as of October 31, 2003                   21,530,000         21,530        (18,830)       132,731
                                                ===========    ===========    ===========    ===========
</TABLE>





























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

                                      F-5
<PAGE>
<TABLE>
<CAPTION>

SUN & SURF INC.
Consolidated Statements of Cash Flows
For the six month periods ended October 31, 2003 and 2002
(Amounts expressed in US Dollars)
                                                                   2003           2002

                                                                     $              $
                                                                              (Unaudited)
<S>                                                               <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES

    Net loss                                                      (526,953)      (337,967)
    Items not requiring an outlay of cash
         Depreciation                                               25,964         20,194
         (Increase) decrease in accounts receivables               541,429       (171,890)
         (Increase) decrease in factor's holdback receivable        31,954       (100,611)
         Increase (decrease) in accounts payable and
            accrued liabilities                                   (281,354)       398,347
         Decrease in income taxes payable                             (117)          --
         Decrease in deferred income taxes                         (27,360)          (102)
                                                               -----------    -----------


    Net cash used in operating activities                         (236,437)      (192,029)
                                                               -----------    -----------


CASH FLOWS FROM FINANCING ACTIVITIES

    Proceeds from promissory note                                  250,000           --
                                                               -----------    -----------


    Net cash flows provided by financing activities                250,000           --
                                                               -----------    -----------

CASH FLOWS FROM INVESTING ACTIVITIES

    Purchase of marketable securities                                 (988)          --
    Purchase of property and equipment                             (18,534)       (72,205)
                                                               -----------    -----------


    Net cash flows used in investing activities                    (19,522)       (72,205)
                                                               -----------    -----------


Net decrease in cash and cash equivalents                           (5,959)      (264,234)

    Cash and cash equivalents, beginning of period                 261,135        435,576
                                                               -----------    -----------


CASH AND CASH EQUIVALENTS, END OF PERIOD                           255,176        171,342
                                                               ===========    ===========
</TABLE>












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

                                      F-6




<PAGE>

SUN & SURF INC.
Notes to Consolidated Financial Statements
October 31, 2003 and 2002
(Amounts expressed in US Dollars)




1.       NATURE OF BUSINESS AND BASIS OF PRESENTATION

a)       Nature of Business

Sun & Surf Inc. ("SSI"), a public corporation,  was incorporated in the State of
New York on November 30, 2000. SSI was a seller of sporting  goods,  apparel and
accessories  and a consultant to retailers and  wholesalers in the action sports
industry.

Management  Solutions  & Systems.  Inc.  ("MSSI") is an  information  technology
consulting  firm  incorporated  in the State of Maryland in 1997.  Its principal
activities are the sale of computer products, design and development of computer
systems, and systems technical support.

On October 6, 2003, SSI entered into a Securities  Exchange Agreement with MSSI.
In exchange for the  acquisition of the 100% interest in MSSI, the  shareholders
of MSSI were issued a total of 15,000,000  common  shares of SSI.  Following the
share  exchange,  the former  shareholders of MSSI hold 69.67% of the 21,530,000
shares  of  common  stock of SSI.  Consequently,  even  though  SSI is the legal
acquirer, this transaction is treated as an acquisition of SSI by MSSI.

There were no preferred shares, warrants or options as of acquisition date.

After the Stock  Exchange,  SSI ceased its prior  business  operations  and only
carries on the business of MSSI.

Transaction costs of $453,600 were incurred relating to the reverse  acquisition
consisting of legal and management consultancy fees.

b)       Basis of Presentation

The share exchange was considered a reverse  acquisition whereby MSSI was deemed
to have acquired SSI and was accounted for as a purchase of net assets of SSI by
MSSI in the consolidated financial statements.

For accounting purposes,  the acquisition has been treated as a recapitalization
of SSI  with  MSSI as the  acquirer.  No  goodwill  or  other  intangibles  were
recognized in connection with the acquisition.

The  consolidated  financial  statements  as of October  31,  2003  include  the
accounts of SSI and MSSI. These  consolidated  financial  statements include the
financial  position  of SSI and MSSI as of October  31,  2003 and the results of
operations  of MSSI from May 1, 2003 to October 31, 2003 and the  operations  of
SSI from October 6, 2003 (the transaction date) to October 31, 2003.

The unaudited financial  statements as of October 31, 2002 include the financial
position of MSSI as of October 31,  2002 and its results of  operations  for the
six month period then ended.


                                      F-7

<PAGE>

SUN & SURF INC.
Notes to Consolidated Financial Statements
October 31, 2003 and 2002
(Amounts expressed in US Dollars)



2.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

a)       Cash and Cash Equivalents

Cash and cash equivalents  include cash on hand,  amounts from and to banks, and
any other highly liquid investments purchased with a maturity of three months or
less. The carrying amount  approximates fair value because of the short maturity
of those instruments.

b)       Marketable and Other Securities

Marketable  securities consist  principally of investments in shares of publicly
traded  corporations  and mutual  funds.  As of October 31, 2003 and October 31,
2002, all of the company's  investments in marketable securities were classified
as available-for-sale  and were carried at fair market value, which approximated
cost.  Fair market value is based on quoted market prices on the last day of the
period.  The cost of the  security  is based  upon the  specific  identification
method.

c)       Sale of Accounts Receivable

The  company  adopted  the  provisions  of  Statement  of  Financial  Accounting
Standards No. 140,  "Accounting for Transfers and Servicing of Financial  Assets
and  Extinguishment of Liabilities" on April 1, 2001. Trade accounts  receivable
sold are removed from the balance sheet at the time of sale.

d)       Property and Equipment

Property  and  equipment  are  recorded at cost and are  depreciated  over their
estimated useful lives at the undernoted rates and methods:

         Furniture and fixtures             7 years           Straight-line
         Office equipment                   5 years           Straight-line
         Leasehold improvements             5 years           Straight-line

Depreciation for property and equipment  acquired during the year is recorded at
one-half of the indicated rates, which approximates when they were put into use.

e)       Long-Lived Assets

The  company  adopted  the  provisions  of  SFAS  No.  121,  Accounting  for the
Impairment  of  Long-Lived  Assets and for  Long-Lived  Assets to be Disposed Of
which has been superseded by SFAS No. 144. SFAS No. 144 requires that long-lived
assets to be held and used by an  entity be  reviewed  for  impairment  whenever
events or changes in circumstances indicate that the carrying amount of an asset
may not be recoverable.  Management  used its best estimate of the  undiscounted
cash  flows  to  evaluate  the  carrying  amount  and  have  determined  that no
impairment has occurred.



                                      F-8
<PAGE>

SUN & SURF INC.
Notes to Consolidated Financial Statements
October 31, 2003 and 2002
(Amounts expressed in US Dollars)


2.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont'd)

f)       Long-Term Financial Instruments

The fair  value of each of the  company's  long-term  financial  assets and debt
instruments  is based on the amount of future  cash flows  associated  with each
instrument  discounted using an estimate of what the company's current borrowing
rate for similar instruments of comparable maturity would be.

g)       Revenue Recognition

Revenues are  recognized  when  realized or realizable  and earned.  The company
generates  two  revenue  streams:  sale of  computer  products  and  design  and
development of computer  systems and systems  technical  support.  The company's
customer base is comprised of U.S.-based  Federal,  state and local governments,
including military and civil agencies.

         Computer Product Sales

The company is an  authorized  reseller  of  brand-name  IT  products  including
hardware and software,  peripherals,  office  automation  products,  desktop and
laptop systems, and computer accessories. Revenue is recognized from the sale of
these products upon delivery, inspection and formal acceptance by customers. The
company's customers formally acknowledge the acceptance of product deliveries by
completion  of a  form  that  acknowledges  inspection  and  acceptance  of  the
shipment.

         Design and  Development  of  Computer  Systems  and  Systems  Technical
         Support

The Company provides various IT professional  services to its customers based on
negotiated  fixed-price  time and  materials  contracts.  Customers are invoiced
monthly at fixed hourly rates for each hour of service provided. These notes and
skill sets are based on the company's GSA Schedule Contract (No.  GS-35F-5347A).
The company recognizes services-based revenue from all of its contracts when the
service has been  performed,  the customer has approved the  timesheets  for the
company's  employee or contractor  providing the service and an invoice has been
generated and collectibility is reasonably assured.  For materials,  the company
recognizes revenue upon delivery, inspection and acceptance by the customer.











                                      F-9
<PAGE>

SUN & SURF INC.
Notes to Consolidated Financial Statements
October 31, 2003 and 2002
(Amounts expressed in US Dollars)




2.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont'd)

h)       Income Taxes

The company  accounts  for income  taxes under the  provisions  of  Statement of
Financial  Accounting  Standards No. 109, which requires recognition of deferred
tax assets and liabilities  for the future tax  consequences of events that have
been included in the financial statements or tax returns.  Deferred income taxes
are provided using the liability method.  Under the liability  method,  deferred
income taxes are recognized for all significant  temporary  differences  between
the tax and financial statement bases of assets and liabilities.

Current income tax expense  (recovery) is the amount of income taxes expected to
be payable  (recoverable)  for the current  year.  A deferred  tax asset  and/or
liability is computed for both the expected future impact of differences between
the  financial  statement  and tax bases of assets and  liabilities  and for the
expected future tax benefit to be derived from tax losses.  Valuation allowances
are  established  when  necessary  to reduce  deferred  tax asset to the  amount
expected to be "more likely than not"  realized in future  returns.  Tax law and
rate changes are reflected in income in the period such changes are enacted.

i)       Use of Estimates

The  preparation  of  consolidated   financial  statements  in  conformity  with
generally  accepted  accounting  principles  in the  United  States  of  America
requires  management  to make  estimates  and  assumptions  that affect  certain
reported amounts of assets and liabilities and disclosures of contingent  assets
and  liabilities at the date of the  consolidated  financial  statements and the
reported  amounts of revenues and expenses during the reporting  period.  Actual
results  could  differ  from  those  estimates.  These  estimates  are  reviewed
periodically and as adjustments become necessary,  they are reported in earnings
in the period in which they become known.

j)       Fair Value of Financial Instruments

The company's  financial  instruments  consist of cash,  marketable  securities,
accounts receivable,  accounts payable and accrued liabilities, and income taxes
payable. Unless otherwise indicated, it is management's opinion that the company
is not exposed to  significant  interest  rate or credit risk arising from these
financial   instruments.   The  fair  value  of  these   financial   instruments
approximates  their  carrying  values  because  of the short  maturity  of these
instruments.

k)       Comprehensive Income

The  Company has  adopted  SFAS No. 130  Reporting  Comprehensive  Income.  This
standard requires companies to disclose  comprehensive income in their financial
statements.  In addition to items included in net income,  comprehensive  income
includes items currently charged or credited  directly to stockholders'  equity,
such as foreign currency translation adjustments.






                                      F-10
<PAGE>

SUN & SURF INC.
Notes to Consolidated Financial Statements
October 31, 2003 and 2002
(Amounts expressed in US Dollars)



2.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont'd)


l)       Recent Pronouncements

SFAS No. 145 - Rescission of FASB Statements  No.4, 44 and 64, Amendment of FASB
Statement No. 13, and  Technical  Corrections.  SFAS 145 updates,  clarifies and
simplifies existing accounting pronouncements. SFAS 145 rescinds Statement No.4,
which required all gains and losses from extinguishment of debt to be aggregated
and, if material,  classified as an  extraordinary  items, net of related income
tax effect. As a result,  the criteria in APB Opinion No. 30 will now be used to
classify  those gains and losses  because  Statement  No. 4 has been  rescinded.
Statement No. 44 was issued to establish accounting requirements for the effects
of  transition  to  provisions  of the Motor  Carrier  Act of 1980.  Because the
transition has been completed, Statement No. 44 is no longer necessary.

SFAS No. 146 - Accounting for Cost Associated with Exit or Disposal  Activities.
SFAS 146 requires  companies to recognize costs associated with exit or disposal
activities  when they are incurred rather than at the date of a commitment to an
exit or disposal  plan.  Previous  accounting  guidance was provided by Emerging
Issues Task Force  ("EITF")  Issue No.  94-3.  SFAS 146 replaces  EITF94-3.  The
Statement  is to  be  applied  prospectively  to  exit  or  disposal  activities
initiated after December 31, 2002.

SFAS No.147 - Acquisition  of Certain  Financial  Institutions,  an amendment of
SFAS 72 and 144 and SFAS interpretation number 9 issued October 2002 and relates
to acquisitions of financial institutions.

SFAS  No.  148  -  Accounting  for  Stock  Based   Compensation-Transition   and
Disclosure,  an  amendment  of SFAS 123 issued  December  2002 and  permits  two
additional  transition  methods  for  entities  that adopt the fair value  based
method of accounting for stock based employee  compensation to avoid the ramp-up
effect arising from  prospective  application.  This statement also improves the
prominence and clarity of the pro-forma disclosures required by SFAS 123.

SFAS No. 149 - Amendment of Statement 133 on derivative  instruments and hedging
activities.  This  statement  amends  and  clarifies  financial  accounting  and
reporting for derivative  instruments embedded in other contracts  (collectively
referred to as derivatives) and for hedging activities under FASB 133 accounting
for derivative instruments and hedging activities.

SFAS No. 150- Accounting for certain financial  instruments with characteristics
of both liabilities and equity. This statement  establishes standards for how an
issuer   classifies   and   measures   certain   financial    instruments   with
characteristics of both liabilities and equity.

The company  believes that the above  standards would not have a material impact
on its financial position, results of operations or cash flows.






                                      F-11

<PAGE>

SUN & SURF INC.
Notes to Consolidated Financial Statements
October 31, 2003 and 2002
(Amounts expressed in US Dollars)



3.       ACCOUNTS RECEIVABLE                               2003        2002

                                                             $           $
                                                                    (Unaudited)

         Accounts receivable, gross                      1,848,217   1,481,160
         Less:  Invoices sold and assigned               1,242,963     972,501
                                                         ---------   ---------


         Accounts receivable, net                          605,254     508,659
                                                         =========   =========


The  company  carries  accounts   receivable  at  the  amount  it  deems  to  be
collectible.   Accordingly,   the  company  provides   allowances  for  accounts
receivable it deems to be  uncollectable  based on management's  best estimates.
Recoveries are recognized in the period they are received.  The ultimate  amount
of  accounts  receivable  that  becomes  uncollectable  could  differ from those
estimated.

The company  has entered  into credit  facility  agreement  with Action  Capital
Corporation ("Action").  Under this agreement,  Action would provide advances of
up to 85% of the  company's  acceptable  accounts  receivable  that are sold and
assigned to Action.  These accounts  receivables are sold with recourse  against
the company.  Consequently  the company is  contingently  liable for any amounts
advanced  by  Action  for  accounts   receivable  sold  and  assigned  that  are
subsequently considered uncollectible.

The financing facility is secured by liens on the company's accounts  receivable
and by personal  guarantees of certain  shareholders.  Interest is calculated at
prime rate plus 1% on the daily average  balance of unpaid  accounts sold plus a
0.95% monthly fee of such average balance.


























                                      F-12
<PAGE>

SUN & SURF INC.
Notes to Consolidated Financial Statements
October 31, 2003 and 2002
(Amounts expressed in US Dollars)




4. PROPERTY AND EQUIPMENT
                                                           2003          2002

                                                             $             $
                                                                     (Unaudited)

         Furniture and fixtures                             62,603        57,684
         Office equipment                                  182,557       161,581
         Leasehold improvements                             41,638        25,121
                                                       -----------   -----------


                                                           286,798       244,386
                                                       -----------   -----------

         Less:  Accumulated depreciation

                Furniture and fixtures                      17,110         8,048
                Office equipment                            51,455        24,204
                Leasehold improvements                      13,352         6,281
                                                       -----------   -----------


                                                            81,917        38,533
                                                       -----------   -----------


         Net book value                                    204,881       205,853
                                                       ===========   ===========


         Depreciation expense during the six month period ended October 31, 2003
was $25,964 ($20,194 in 2002).


5.       INCOME TAXES PAYABLE

Deferred  income  taxes  reflect  the net tax effects of  temporary  differences
between the carrying  amounts of assets and liabilities for financial  reporting
purposes  and the  amounts  used for income tax  purposes  using the enacted tax
rates and laws that are currently in effect.

                                                           2003         2002

                                                             $             $
                                                                     (Unaudited)
         Income taxes payable

              Federal                                      156,705       124,819
              State and local                               41,231        31,822
                                                       -----------   -----------

                                                           197,936       156,641
                                                       ===========   ===========


The  provision  for  income  taxes at the end of the  period  resulted  from the
increase in deferred income tax assets of $27,360 ($102 in 2002).





                                      F-13
<PAGE>
<TABLE>
<CAPTION>

SUN & SURF INC.
Notes to Consolidated Financial Statements
October 31, 2003 and 2002
(Amounts expressed in US Dollars)




6.       PROMISSORY NOTE PAYABLE

The loan is  unsecured,  bears  interest of 5.0% per annum and all principal and
accrued but unpaid interest is payable on January 8, 2004.

As of January 9, 2004,  $25,000 was repaid on the note including  interest.  The
agreement  includes a default  provision  giving the  company the right to defer
paying the balance of the note and unpaid interest. This note becomes payable in
six equal monthly  payments of principal  and interest  commencing 30 days after
January 8, 2004. Interest rate during the deferral period is 15% per annum.

                                                                         2003                2002

7.       CAPITAL STOCK                                                                    (Unaudited)
         <S>                                                          <C>                 <C>

         Authorized number of Common shares at $0.001 par value       100,000,000         100,000,000
                                                                      ===========         ===========
</TABLE>


Prior  to  the  reverse  acquisition  (see  note  1),  the  company  effected  a
forward-split  of common  stock on the basis of ten shares for each share issued
and outstanding.

As  part  of  the  reverse  acquisition,  43,072,500  shares  owned  by  certain
shareholders   were  redeemed  without  any  consideration  and  then  cancelled
following the closing of the stock exchange.


8.       SEGMENTED INFORMATION

The company,  after reviewing its reporting systems,  has determined that it has
one reportable  segment and  geographic  segment.  The company's  operations are
primarily  related to sales of products and  technologies to various  government
agencies. All assets of the business are located in its head office in Maryland.























                                      F-14

<PAGE>

SUN & SURF INC.
Notes to Consolidated Financial Statements
October 31, 2003 and 2002
(Amounts expressed in US Dollars)




9.       LEASE COMMITMENT

Rental of office space under operating lease amounted to  approximately  $28,840
during the six month period ended October 31, 2003 and $30,500 for the six month
period ended October 31, 2003.

The approximate  minimum rental payments required under the lease agreement that
expires in February 2007 are as follows:

         Payable during the following periods:

         Within one year                                             $    58,500
         Over one year but not exceeding two years                        60,300
         Over two years but not exceeding three years                     62,100
         Over three years but not exceeding four years                    26,300
                                                                     -----------


                                                                     $   207,200
                                                                     ===========



10.      ECONOMIC DEPENDENCE AND CONCENTRATION OF CREDIT RISKS

The  company's  revenues  are  derived  from sales of goods and  services to the
different  departments  of  various  government  agencies.  The  loss  of  these
customers  could have a material  adverse effect on operations.  The majority of
the company's receivables as of October 31, 2003 and October 31, 2002 represents
sales to these  customers.  The  company's  receivables  are  unsecured  and are
generally due in 30 days.


11.      SUBSEQUENT EVENTS

a) Subsequent to year end, the company  incorporated IJJ Corporation  ("IJJ") in
the State of Delaware with the intention of reincorporating the company from the
State of New York to the State of Delaware. The reincorporation will be effected
pursuant to an Agreement and Plan of Merger (the "Merger  Agreement") entered by
the company and IJJ on December 18, 2003.  The merger will be effective upon the
acceptance  of the  Certificate  of Merger by the Secretary of State of both the
states of New York and Delaware.  In accordance with the Merger  Agreement,  the
company  will merge with and into IJJ and the latter  will be  surviving  entity
resulting to the change of name from Sun & Surf Inc. to IJJ Corporation.

Upon completion of the reincorporation, each of the company's shareholders as of
the record date of December 19,  2003,  will be entitled to receive one share of
IJJ common  stock for each issued and  outstanding  share of the company  common
stock. Each share of IJJ common stock owed by SSI will be canceled.












                                      F-15
<PAGE>

SUN & SURF INC.
Notes to Consolidated Financial Statements
October 31, 2003 and 2002
(Amounts expressed in US Dollars)




11.      SUBSEQUENT EVENTS (cont'd)

a)       (cont'd)

Each share of SSI common stock issued and outstanding  immediately  prior to the
merger will be cancelled without any merger  consideration.  All liabilities and
obligations  of SSI that were not  discharged  will become the  liabilities  and
obligations of IJJ.

As a result  of the  reincorporation,  the  company  will  cease  its  corporate
existence in the State of New York.

The company's Board of Directors recommended to the shareholders to vote for the
change of name and jurisdiction at the next annual meeting of shareholders.

b) The board of  directors  of the company  proposed a new stock  option plan on
December 18, 2003.  Eligible  participants under the plan include key employees,
directors and advisors of the company and its subsidiaries.  The options are not
assignable  or  transferable  and will expire in ten years after the grant date.
The purchase price of the common shares under the plan must be equal to the fair
market  value of the company  common  stock at the time the option is granted or
higher as may be determined  by the Plan  Committee or the Board of Directors at
the time of grant.  The maximum  aggregate number of shares of common stock that
may be issued  and sold  under the plan is  10,000,000.  The  maximum  aggregate
number of shares issued under the plan during any given year must not exceed 10%
of the total outstanding shares of the company during such calendar year.

The company's Board of Directors recommended to the shareholders to vote for the
adoption of the stock option plan at the next annual meeting of shareholders.

c) On December 15, 2003,  the company signed a $250,000  Convertible  Promissory
Note payable to a minority  shareholder.  The loan proceeds will be delivered in
installments,  the first one of which was  received on the same day for $25,000.
The loan is  payable on demand  anytime  after June 30,  2004  ("demand  date").
Interest rate is at 6% per annum, compounded annually.

The conversion of the unpaid  principal and interest  balance into the company's
common  stock  shares is  exercisable  at the option of the  company at any time
during the period  commencing  30 days prior to the demand date and based on the
closing price of the common stock on the date of conversion.










                                      F-16
<PAGE>

                             MANAGEMENT SOLUTIONS &
                              SYSTEMS, INCORPORATED

                          REVISED FINANCIAL STATEMENTS

                          AS OF APRIL 30, 2003 AND 2002

                  TOGETHER WITH REPORT OF INDEPENDENT AUDITORS
                        (Amounts expressed in US Dollars)



TABLE OF CONTENTS


Report of Independent Auditors                                                 1

Revised Balance Sheets as of April 30, 2003 and 2002                       2 - 3

Revised Statements of Income for the years ended April 30, 2003 and
    April 30, 2002                                                             4

Revised Statements of Changes in Stockholders' Equity for the years
    ended April 30, 2003 and April 30, 2002                                    5

Revised Statements of Cash Flows for the years ended April 30, 2003 and
    April 30, 2002                                                             6

Notes to revised financial statements                                     7 - 16




<PAGE>

                         REPORT OF INDEPENDENT AUDITORS


To the Board of Directors and Stockholders of
Management Solutions & Systems, Incorporated

We have audited the accompanying  revised balance sheets of Management Solutions
& Systems,  Incorporated  as of April 30, 2003 and 2002 and the related  revised
statements of income, cash flows and changes in stockholders' equity for each of
the years ended April 30, 2003 and 2002. These revised financial  statements are
the  responsibility  of  the  management  of  Management  Solutions  &  Systems,
Incorporated.  Our  responsibility  is to express  an  opinion on these  revised
financial statements based on our audits.

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

Our  previous  report  dated  August 22,  2003 on the  financial  statements  of
Management Solutions & Systems, Incorporated has been withdrawn as the financial
statements of the Company have been revised as described in Note 1.

In our opinion,  the revised financial  statements referred to above, revised as
described in Note 1, present  fairly,  in all material  respects,  the financial
position of Management  Solutions & Systems,  Incorporated  as of April 30, 2003
and 2002 and the  results of its  operations  and its cash flows for each of the
years then ended in conformity with generally accepted accounting  principles in
the United States of America.




Toronto, Ontario                                 "Schwartz Levitsky Feldman llp"
August 22, 2003, except for Note 1 which                   Chartered Accountants
    is as of February 2, 2004 and Note 10 which
    is as of January 9, 2004

















                                      F-1
<PAGE>

MANAGEMENT SOLUTIONS & SYSTEMS, INCORPORATED
Revised Balance Sheets
As at April 30, 2003 and 2002
(Amounts expressed in US Dollars)
                                                             2003        2002

                                                               $           $
                                                           ---------   ---------
                              ASSETS
CURRENT ASSETS

    Cash                                                     261,135     435,576
    Marketable and other securities                           38,260      38,260
    Accounts receivable (note 4)                           1,146,685     336,769
    Factor's holdback receivable (note 4)                    133,860      45,264
    Prepaid expenses and deposits                              9,500       9,500
                                                           ---------   ---------


                                                           1,589,440     865,369

ADVANCES TO SHAREHOLDERS (note 5)                               --        79,248

PROPERTY AND EQUIPMENT (note 6)                              212,312     153,843
                                                           ---------   ---------






                                                           1,801,752   1,098,460
                                                           =========   =========

















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



                                      F-2


<PAGE>

MANAGEMENT SOLUTIONS & SYSTEMS, INCORPORATED
Revised Balance Sheets
As at April 30, 2003 and 2002
(Amounts expressed in US Dollars)
                                                             2003        2002

                                                               $           $
                            LIABILITIES
CURRENT LIABILITIES

    Accounts payable                                       1,020,851     537,829
    Accrued liabilities                                      178,147      83,447
    Income taxes payable (note 7)                            198,053     156,641
    Deferred income taxes                                      1,206       1,111
                                                           ---------   ---------


                                                           1,398,257     779,028

DEFERRED INCOME TAXES                                          6,573       6,872
                                                           ---------   ---------


                                                           1,404,830     785,900
                                                           ---------   ---------


                       STOCKHOLDERS' EQUITY
CAPITAL STOCK

    Authorized

           100,000 Common shares

    Issued

             1,000 Common shares, at $1 par value              1,000       1,000

ADDITIONAL PAID-IN-CAPITAL                                     1,700       1,700

RETAINED EARNINGS                                            394,222     309,860
                                                           ---------   ---------


                                                             396,922     312,560
                                                           ---------   ---------


                                                           1,801,752   1,098,460
                                                           =========   =========









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

                                      F-3

<PAGE>

MANAGEMENT SOLUTIONS & SYSTEMS, INCORPORATED
Revised Statements of Income
For the years ended April 30, 2003 and 2002
(Amounts expressed in US Dollars)
                                                             2003        2002

                                                               $           $
REVENUE

    Sales                                                  4,801,059   5,096,688
    Service                                                3,838,923   2,259,549
                                                           ---------   ---------


                                                           8,639,982   7,356,237

COST OF GOODS SOLD                                         6,544,910   5,762,024
                                                           ---------   ---------


GROSS PROFIT                                               2,095,072   1,594,213
                                                           ---------   ---------


EXPENSES

    Salaries and benefits                                  1,288,970     901,368
    Rent and utilities                                        74,059      37,027
    Travel and transportation                                 78,848      49,823
    Telephone                                                 84,533      48,948
    Interest                                                 122,126      42,421
    Repairs and maintenance                                   12,159       5,682
    Bank charges                                              13,720      39,789
    Consulting fees                                          113,552      38,497
    Office and general                                        53,997      21,724
    Professional fees                                         36,474      19,406
    Advertising and promotion                                 11,987      16,980
    Freight                                                   10,290      11,212
    Training                                                  12,645       7,079
    Bad debts                                                 15,754        --
    Depreciation                                              40,388      15,564
                                                           ---------   ---------


                                                           1,969,502   1,255,520
                                                           ---------   ---------


INCOME BEFORE INCOME TAXES                                   125,570     338,693

    Income taxes (note 7)                                     41,208     131,115
                                                           ---------   ---------


NET INCOME                                                    84,362     207,578
                                                           =========   =========









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

                                      F-4

<PAGE>
<TABLE>
<CAPTION>

MANAGEMENT SOLUTIONS & SYSTEMS, INCORPORATED
Revised Statements of Changes in Stockholders' Equity
FOR THE YEARS ENDED APRIL 30, 2003 AND 2002
(Amounts expressed in US Dollars)

                                                          Additional
                                     Common Stock            Paid       Retained
                                  Number       Amount     in Capital    Earnings       Total
                                ----------   ----------   ----------   ----------    ----------
                                                  $            $            $             $
<S>                                  <C>          <C>          <C>        <C>           <C>
Balance as of April 30, 2001,
     as previously reported          1,000        1,000        1,700      136,625       139,325

Correction of error in income
     tax accrual (note 1)             --           --           --        (34,343)      (34,343)
                                ----------   ----------   ----------   ----------    ----------

Balance as of April 30, 2001,
     restated                        1,000        1,000        1,700      102,282       104,982

     Net income for the year          --           --           --        207,578       207,578
                                ----------   ----------   ----------   ----------    ----------


Balance as of April 30, 2002         1,000        1,000        1,700      309,860       312,560

     Net income for the year          --           --           --         84,362        84,362
                                ----------   ----------   ----------   ----------    ----------


Balance as of April 30, 2003         1,000        1,000        1,700      394,222       396,922
                                ==========   ==========   ==========   ==========    ==========
</TABLE>






















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

                                      F-5


<PAGE>
<TABLE>
<CAPTION>

MANAGEMENT SOLUTIONS & SYSTEMS, INCORPORATED
Revised Statements of Cash Flows
For the years ended April 30, 2003 and 2002
(Amounts expressed in US Dollars)
                                                                  2003        2002

                                                                    $           $

<S>                                                             <C>        <C>
CASH FLOWS FROM OPERATING ACTIVITIES

    Net income                                                    84,362     207,578
    Items not requiring an outlay of cash
         Depreciation                                             40,388      15,564
         Increase in accounts receivables                       (809,916)    (91,708)
         Increase in factor's holdback receivable                (88,596)    (41,909)
         Increase in prepaid expenses and deposits                  --        (9,500)
         Increase in accounts payable and accrued liabilities    577,722     406,535
         Increase in income taxes payable                         41,412     156,641
         Decrease in deferred income taxes                          (204)      7,983
                                                                --------    --------


    Net cash provided by (used in) operating activities         (154,832)    651,184
                                                                ========    ========


CASH FLOWS FROM FINANCING ACTIVITIES

    Investment in securities                                        --       (33,260)
    Payment from (advances to) shareholders                       79,248     (52,728)
                                                                --------    --------


    Net cash flows provided by (used in) financing activities     79,248     (85,988)
                                                                --------    --------


CASH FLOWS FROM INVESTING ACTIVITIES

    Purchase of property and equipment                           (98,857)   (166,407)
                                                                --------    --------


    Net cash flows used in investing activities                  (98,857)   (166,407)
                                                                --------    --------


NET INCREASE (DECREASE) IN CASH                                 (174,441)    398,789

    Cash and cash equivalents, beginning of year                 435,576      36,787
                                                                --------    --------


CASH AND CASH EQUIVALENTS, END OF YEAR                           261,135     435,576
                                                                ========    ========
</TABLE>







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

                                      F-6

<PAGE>

MANAGEMENT SOLUTIONS & SYSTEMS, INCORPORATED
Notes to Revised Financial Statements
April 30, 2003 and 2002
(Amounts expressed in US Dollars)




1.       REVISION OF FINANCIAL STATEMENTS

The April 30, 2003 and 2002 financial  statements have been revised to reflect a
provision  for income taxes and related  interest  expense with respect to prior
years'  income taxes.  The tax returns of prior years up to and  including  2003
were filed prior to the  completion of the audits of the 2003 and 2002 financial
statements.  In these filings,  net operating  losses incurred from 1998 through
2001 were carried  forward to reduce taxable  income in 2002.  Subsequent to the
completion of the audits of the 2003 and 2002 financial  statements,  management
became aware that the tax returns from 1998  through  2003  contained  erroneous
information.  Consequently,  tax returns were amended  resulting to the restated
amounts.

The following table presents the effects of the above-mentioned adjustments:

                                             2003                 2002
                                  -----------------------  --------------------
                                                       As                    As
                                           As  previously        As  previously
                                     restated    reported  restated    reported
                                  -----------  ----------  --------  ----------
                                        $           $         $           $

         Current liabilities        1,398,257   1,222,384   779,028     618,457
         Total liabilities          1,404,830   1,222,384   785,900     618,457
         Net earnings                  84,362      99,365   207,578     340,678
         Retained earnings            394,222     576,668   309,860     477,303

All applicable notes relating to tese adjustments have been revised.


2.       ORGANIZATION AND DESCRIPTION OF BUSINESS

Management  Solutions  & Systems.  Inc.  ("MSSI") is an  information  technology
consulting  firm  incorporated  in the State of Maryland in 1997.  Its principal
activities  are sale of computer  products,  design and  development of computer
systems, and systems technical support.


3.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

a)       Cash and Cash Equivalents

Cash and cash equivalents  include cash on hand,  amounts from and to banks, and
any other highly liquid investments purchased with a maturity of three months or
less. The carrying amount  approximates fair value because of the short maturity
of those instruments.














                                      F-7

<PAGE>

MANAGEMENT SOLUTIONS & SYSTEMS, INCORPORATED
Notes to Revised Financial Statements
April 30, 2003 and 2002
(Amounts expressed in US Dollars)




3.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont'd)

b)       Marketable and Other Securities

Marketable  securities consist  principally of investments in shares of publicly
traded  corporations and mutual funds. At April 30, 2003 and 2002, all of MSSI's
investment in marketable  securities were classified as  available-for-sale  and
were carried at fair market value, which approximated cost. Fair market value is
based on  quoted  market  prices  on the last day of the  year.  The cost of the
security is based upon the specific identification method.

c)       Sale of Accounts Receivable

The  company  adopted  the  provisions  of  Statement  of  Financial  Accounting
Standards No. 140  "Accounting  for Transfers and Servicing of Financial  Assets
and  Extinguishment of Liabilities" on April 1, 2001. Trade accounts  receivable
sold are removed from the balance sheet at the time of sale.

d)       Property and Equipment

Property  and  equipment  are  recorded at cost and are  depreciated  over their
estimated useful lives at the undernoted rates and methods:

                Furniture and fixtures         7 years           Straight-line
                Office equipment               5 years           Straight-line
                Leasehold improvements         5 years           Straight-line

Depreciation  for assets acquired during the year is recorded at one-half of the
indicated rates, which approximates when they were put into use.

e)       Long-Lived Assets

MSSI's adopted the provisions of SFAS No. 121,  Accounting for the Impairment of
Long-Lived  Assets and for  Long-Lived  Assets to be  Disposed Of which has been
superseded by SFAS No. 144 [note 3 (k)].  SFAS No. 144 requires that  long-lived
assets to be held and used by an  entity be  reviewed  for  impairment  whenever
events or changes in circumstances indicate that the carrying amount of an asset
may not be recoverable.  Management  used its best estimate of the  undiscounted
cash  flows  to  evaluate  the  carrying  amount  and  have  determined  that no
impairment has occurred.

f)       Long-Term Financial Instruments

The fair value of each of MSSI's long-term financial assets and debt instruments
is based on the amount of future  cash  flows  associated  with each  instrument
discounted  using an estimate of what MSSI's current  borrowing rate for similar
instruments of comparable maturity would be.
















                                      F-8
<PAGE>

MANAGEMENT SOLUTIONS & SYSTEMS, INCORPORATED
Notes to Revised Financial Statements
April 30, 2003 and 2002
(Amounts expressed in US Dollars)





3.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont'd)

g)       Revenue Recognition

Revenues are  recognized  when  realized or realizable  and earned.  The company
generates  two  revenue  streams:  sale of  computer  products  and  design  and
development of computer  systems and systems  technical  support.  The company's
customer base is comprised of U.S.-based  Federal,  state and local governments,
including military and civil agencies.

         Computer Product Sales

The company is an  authorized  reseller  of  brand-name  IT  products  including
hardware and software,  peripherals,  office  automation  products,  desktop and
laptop systems, and computer accessories. Revenue is recognized from the sale of
these products upon delivery, inspection and formal acceptance by customers. The
company's customers formally acknowledge the acceptance of product deliveries by
completion  of a  form  that  acknowledges  inspection  and  acceptance  of  the
shipment.

         Design and  Development  of  Computer  Systems  and  Systems  Technical
         Support

The Company provides various IT professional  services to its customers based on
negotiated  fixed-price  time and  materials  contracts.  Customers are invoiced
monthly at fixed  hourly  rates for each hour of service  provided.  The company
recognizes services-based revenue from all of its contracts when the service has
been  performed,  the customer has approved  the  timesheets  for the  company's
employee or contractor  providing the service and an invoice has been  generated
and collectibility is reasonably assured. For materials,  the company recognizes
revenue upon delivery, inspection and acceptance by the customer.

h)       Income Taxes

The company  accounts  for income  taxes under the  provisions  of  Statement of
Financial  Accounting  Standards No. 109, which requires recognition of deferred
tax assets and liabilities  for the future tax  consequences of events that have
been included in the financial statements or tax returns.  Deferred income taxes
are provided using the liability method.  Under the liability  method,  deferred
income taxes are recognized for all significant  temporary  differences  between
the tax and financial statement bases of assets and liabilities.

Current income tax expense  (recovery) is the amount of income taxes expected to
be payable  (recoverable)  for the current  year.  A deferred  tax asset  and/or
liability is computed for both the expected future impact of differences between
the  financial  statement  and tax bases of assets and  liabilities  and for the
expected future tax benefit to be derived from tax losses.  Valuation allowances
are  established  when  necessary  to reduce  deferred  tax asset to the  amount
expected to be "more likely than not"  realized in future  returns.  Tax law and
rate changes are reflected in income in the period such changes are enacted.





                                       F-9
<PAGE>

MANAGEMENT SOLUTIONS & SYSTEMS, INCORPORATED
Notes to Revised Financial Statements
April 30, 2003 and 2002
(Amounts expressed in US Dollars)



3.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont'd)

i)       Use of Estimates

The preparation of financial  statements in conformity  with generally  accepted
accounting  principles  in the United States of America  requires  management to
make estimates and assumptions  that affect certain  reported  amounts of assets
and liabilities and disclosures of contingent assets and liabilities at the date
of the revised  financial  statements  and the reported  amounts of revenues and
expenses  during the reporting  period.  Actual  results could differ from those
estimates.  These estimates are reviewed  periodically and as adjustments become
necessary,  they are  reported  in  earnings  in the period in which they become
known.

j)       Fair Value of Financial Instruments

MSSI's financial  instruments consist of cash, marketable  securities,  accounts
receivable,  accounts payable and accrued liabilities, and income taxes payable.
Unless otherwise  indicated,  it is management's opinion that the Corporation is
not  exposed to  significant  interest  rate or credit risk  arising  from these
financial   instruments.   The  fair  value  of  these   financial   instruments
approximates their carrying values.

k)       Recent Pronouncements


SFAS No. 141 -  Business  Combinations  and SFAS No.  142 -  Goodwill  and Other
Intangible  Assets.  SFAS No. 141 requires that  companies use only the purchase
method for  acquisitions  occurring  after June 30, 2001.  SFAS No. 142 required
that  goodwill  and  intangible  assets  acquired  after June 30, 2001 should no
longer be amortized but reviewed annually for impairment.

SFAS No. 143 -  Accounting  for Asset  Retirement  Obligations  - this  standard
requires  that  entities  record  the  fair  value of a  liability  for an asset
retirement  obligation  in the period in which it is incurred.  This standard is
effective for fiscal years beginning after June 15, 2001.

SFAS No. 144 - Accounting for the  Impairment or Disposal of Long-Lived  Assets.
This  standard  supersedes  SFAS No.  121 -  Accounting  for the  impairment  of
long-lived  assets and for  Long-Lived  Assets to be Disposed of. This  standard
requires that  businesses  recognize  impairment  when the  financial  statement
carrying amount of long-lived asset or asset group exceeds its fair value and is
not  recoverable.  The  provisions  of this  statement are effective for revised
financial statements issued for fiscal years beginning after December 15, 2001.

SFAS No. 145 - Rescission of FASB Statements  No.4, 44 and 64, Amendment of FASB
Statement No. 13, and  Technical  Corrections.  SFAS 145 updates,  clarifies and
simplifies existing accounting pronouncements. SFAS 145 rescinds Statement No.4,
which required all gains and losses from extinguishment of debt to be aggregated
and, if material,  classified as an  extraordinary  items, net of related income
tax effect. As a result,  the criteria in APB Opinion No. 30 will now be used to
classify  those gains and losses  because  Statement  No. 4 has been  rescinded.
Statement No. 44 was issued to establish accounting requirements for the effects
of  transition  to  provisions  of the Motor  Carrier  Act of 1980.  Because the
transition has been completed, Statement No. 44 is no longer necessary.







                                      F-10
<PAGE>

MANAGEMENT SOLUTIONS & SYSTEMS, INCORPORATED
Notes to Revised Financial Statements
April 30, 2003 and 2002
(Amounts expressed in US Dollars)





3.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont'd)

l)       Recent Pronouncements (cont'd)

SFAS No. 146 - Accounting for Cost Associated with Exit or Disposal  Activities.
SFAS 146 requires  companies to recognize costs associated with exit or disposal
activities  when they are incurred rather than at the date of a commitment to an
exit or disposal  plan.  Previous  accounting  guidance was provided by Emerging
Issues Task Force  ("EITF")  Issue No.  94-3.  SFAS 146 replaces  EITF94-3.  The
Statement  is to  be  applied  prospectively  to  exit  or  disposal  activities
initiated after December 31, 2002.

SFAS No.147 - Acquisition  of certain  Financial  Institutions,  an amendment of
SFAS 72 and 144 and SFAS interpretation number 9 issued October 2002 and relates
to acquisitions of financial institutions.

SFAS  No.  148  -  Accounting  for  Stock  Based   Compensation-Transition   and
Disclosure,  an  amendment  of SFAS 123 issued  December  2002 and  permits  two
additional  transition  methods  for  entities  that adopt the fair value  based
method of accounting for stock based employee  compensation to avoid the ramp-up
effect arising from  prospective  application.  This statement also improves the
prominence and clarity of the pro-forma disclosures required by SFAS 123.

SFAS No. 149 - Amendment of statement 133 on derivative  instruments and hedging
activities.  This  statement  amends  and  clarifies  financial  accounting  and
reporting for derivative  instruments embedded in other contracts  (collectively
referred to as derivatives) and for hedging activities under FASB 133 accounting
for derivative instruments and hedging activities.

SFAS No. 150 - Accounting for certain financial instruments with characteristics
of both liabilities and equity. This statement  establishes standards for how an
issuer   classifies   and   measures   certain   financial    instruments   with
characteristics of both liabilities and equity.

MSSI believes that the above  standards  would not have a material impact on its
financial position, results of operations or cash flows.













                                      F-11

<PAGE>

MANAGEMENT SOLUTIONS & SYSTEMS, INCORPORATED
Notes to Revised Financial Statements
April 30, 2003 and 2002
(Amounts expressed in US Dollars)





4. ACCOUNTS RECEIVABLE
                                                           2003         2002

                                                             $            $

         Accounts receivable                             1,160,791       336,769
         Less:  Allowance for doubtful accounts             14,106          --
                                                       -----------   -----------


         Accounts receivable, net                        1,146,685       336,769
                                                       ===========   ===========


MSSI  carries  accounts  receivable  at the  amount it deems to be  collectible.
Accordingly,  MSSI provides  allowances  for accounts  receivable it deems to be
uncollectable based on management's best estimates. Recoveries are recognized in
the period they are received.  The ultimate  amount of accounts  receivable that
becomes uncollectable could differ from those estimated.

The company  has entered  into credit  facility  agreement  with Action  Capital
Corporation ("Action").  Under this agreement,  Action would provide advances of
up to 85% of MSSI's acceptable accounts receivable that are sold and assigned to
Action.  These  accounts  receivables  are  sold  with  recourse  against  MSSI.
Consequently MSSI is contingently  liable for any amounts advanced by Action for
accounts   receivable  sold  and  assigned  that  are  subsequently   considered
uncollectible.

The accounts  receivable  balance net of invoices sold and assigned to Action at
year end amounted to $892,403 in 2003 and $368,140 in 2002.

The financing facility is secured by liens on MSSI's accounts  receivable and by
personal  guarantees of its  shareholders.  Interest is calculated at prime rate
plus 1% on the  daily  average  balance  of  unpaid  accounts  sold plus a 0.95%
monthly fee of such average balance.


5.       ADVANCES TO SHAREHOLDERS

These advances are unsecured,  non-interest  bearing and have been repaid during
the fiscal year ended 2003.












                                      F-12

<PAGE>

MANAGEMENT SOLUTIONS & SYSTEMS, INCORPORATED
Notes to Revised Financial Statements
April 30, 2003 and 2002
(Amounts expressed in US Dollars)




6.       PROPERTY AND EQUIPMENT                              2003         2002

                                                               $            $

         Furniture and fixtures                              62,603       55,670
         Office equipment                                    41,638       25,117
         Leasehold improvements                             164,023       88,620
                                                         ----------   ----------

                                                            268,264      169,407
                                                         ----------   ----------

         Less:  Accumulated depreciation

                Furniture and fixtures                       12,639        4,190
                Office equipment                             34,126        8,862
                Leasehold improvements                        9,187        2,512
                                                         ----------   ----------

                                                             55,952       15,564
                                                         ----------   ----------

         Net book value                                     212,312      153,843
                                                         ==========   ==========


Depreciation  expense  in  2003  and  2002  amounted  to  $40,388  and  $15,564,
respectively.


7.       INCOME TAXES

Deferred  income  taxes  reflect  the net tax effects of  temporary  differences
between the carrying  amounts of assets and liabilities for financial  reporting
purposes  and the  amounts  used for income tax  purposes  using the enacted tax
rates and laws that are currently in effect.

Significant types of temporary differences that created deferred tax liabilities
were  accelerated  depreciation  expenses that are deductible for the purpose of
computing  income  taxes  before  they  are  recognized  in the  computation  of
financial net income.

                                                           2003          2002

                                                             $             $
         Income taxes payable

              Federal                                      156,822       124,819
              State and local                               41,231        31,822
                                                       -----------   -----------

                                                           198,053       156,641
                                                       ===========   ===========



Income tax expenses for 2002 and 2003 have been  restated to correct an error of
understatement (see note 1).







                                      F-13
<PAGE>

MANAGEMENT SOLUTIONS & SYSTEMS, INCORPORATED
Notes to Revised Financial Statements
April 30, 2003 and 2002
(Amounts expressed in US Dollars)




8.       LEASE COMMITMENT

Rental of office space under operating lease amounted to  approximately  $61,000
in 2003 and $35,500 in 2002.

The approximate  minimum rental payments required under the lease agreement that
expires in February 2007 are as follows:

         Payable during the following periods:

         Within one year                                             $    58,000
         Over one year but not exceeding two years                        59,500
         Over two years but not exceeding three years                     61,000
         Over three years but not exceeding four years                    63,000
                                                                     -----------

                                                                     $   241,500
                                                                     ===========



9.       ECONOMIC DEPENDENCE AND CONCENTRATION OF CREDIT RISKS

The  company's  revenues  are  derived  from sales of goods and  services to the
different  departments  of the various  government  agencies.  The loss of these
customers could have a material adverse effect on operations.

MSSI's receivables are unsecured and are generally due in 30 days. A majority of
MSSI's  receivables  as at April  30,  2003 and 2002  represents  sales to these
customers. These receivables were fully collected subsequently to year end.


10.      SUBSEQUENT EVENTS

a) On October 6, 2003,  MSSI entered into a Securities  Exchange  Agreement with
Sun & Surf Inc.,  a New York public  corporation  ("SSI").  In exchange  for the
acquisition of the 100% interest in MSSI, the shareholders of MSSI were issued a
total of 15,000,000  common shares of SSI.  Following  the share  exchange,  the
former shareholders of MSSI hold 69.67% of the 21,530,000 shares of common stock
of SSI.  Consequently,  even though SSI is the legal acquirer,  this transaction
will be treated as an acquisition of SSI by MSSI and as a reverse acquisition of
MSSI for accounting purposes.

There were no preferred shares, warrants and options as of acquisition date.
























                                      F-14
<PAGE>

MANAGEMENT SOLUTIONS & SYSTEMS, INCORPORATED
Notes to Revised Financial Statements
April 30, 2003 and 2002
(Amounts expressed in US Dollars)




10.      SUBSEQUENT EVENTS (cont'd)

b) Subsequent to year end, the company  incorporated IJJ Corporation  ("IJJ") in
the State of Delaware with the intention of reincorporating the company from the
State of New York to the State of Delaware. The reincorporation will be effected
pursuant to an Agreement and Plan of Merger (the "Merger  Agreement") entered by
the company and IJJ on December 18, 2003.  The merger will be effective upon the
acceptance  of the  Certificate  of Merger by the Secretary of State of both the
states of New York and Delaware.  In accordance with the Merger  Agreement,  the
company  will merge with and into IJJ and the latter  will be  surviving  entity
resulting to the change of name from Sun & Surf Inc. to IJJ Corporation.

Upon completion of the reincorporation, each of the company's shareholders as of
the record date of December 19,  2003,  will be entitled to receive one share of
IJJ common  stock for each issued and  outstanding  share of the company  common
stock. Each share of IJJ common stock owed by SSI will be canceled.

Each share of SSI common stock issued and outstanding  immediately  prior to the
merger will be cancelled without any merger  consideration.  All liabilities and
obligations  of SSI that were not  discharged  will become the  liabilities  and
obligations of IJJ.

As a result  of the  reincorporation,  the  company  will  cease  its  corporate
existence in the State of New York.

The company's Board of Directors recommended to the shareholders to vote for the
change of name and jurisdiction at the next annual meeting of shareholders.

c) The board of  directors  of the company  proposed a new stock  option plan on
December 18, 2003.  Eligible  participants under the plan include key employees,
directors and advisors of the company and its subsidiaries.  The options are not
assignable  or  transferable  and will expire in ten years after the grant date.
The purchase price of the common shares under the plan must be equal to the fair
market  value of the company  common  stock at the time the option is granted or
higher as may be determined  by the Plan  Committee or the Board of Directors at
the time of grant.  The maximum  aggregate number of shares of common stock that
may be issued  and sold  under the plan is  10,000,000.  The  maximum  aggregate
number of shares issued under the plan during any given year must not exceed 10%
of the total outstanding shares of the company during such calendar year.

The company's Board of Directors recommended to the shareholders to vote for the
adoption of the stock option plan at the next annual meeting of shareholders.

d) On December 15, 2003,  the company signed a $250,000  Convertible  Promissory
Note payable to a minority  shareholder.  The loan proceeds will be delivered in
installments,  the first one of which was  received on the same day for $25,000.
The loan is  payable on demand  anytime  after June 30,  2004  ("demand  date").
Interest rate is at 6% per annum, compounded annually.









                                      F-15
<PAGE>

MANAGEMENT SOLUTIONS & SYSTEMS, INCORPORATED
Notes to Revised Financial Statements
April 30, 2003 and 2002
(Amounts expressed in US Dollars)




10.      SUBSEQUENT EVENTS (cont'd)

d)       cont'd

The conversion of the unpaid  principal and interest  balance into the company's
common  stock  shares is  exercisable  at the option of the  company at any time
during the period  commencing  30 days prior to the demand date and based on the
closing price of the common stock on the date of conversion.

































                                      F-16