SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   ----------

                                   FORM 10-KSB

|_|   Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange
      Act of 1934

|X|   Transition Report Pursuant to Section 13 or 15(d) of the Securities
      Exchange Act of 1934

      For the transition period from June 30, 2004 to December 31, 2004.

                          Commission File No. 333-45210

                       SYSTEMS MANAGEMENT SOLUTIONS, INC.

                        (formerly SUPREME HOLDINGS, INC.)
                 (Name of Small Business Issuer in Its Charter)

                                   ----------

                 Nevada                                    88-046047
(State or other jurisdiction of incorporation) (IRS Employer Identification No.)

            7550 IH-10 West, 14th Floor                              78229
                San Antonio, Texas
     (Address of Principal Executive Offices)                      (Zip Code)

         Issuer's telephone number, including area code: (210) 541-7133

                                   ----------

        Securities registered pursuant to Section 12(b) of the Act: None

           Securities registered pursuant to Section 12(g) of the Act:
     Common Stock, $0.0001 par value and Preferred Stock, $0.0001 par value

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

      |X| Yes |_| No

      Check if disclosure of delinquent filers in response to Item 405 of
Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of 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. |_|
<PAGE>

      The issuer's total revenues for the six months ended December 31, 2004
were $68,792.

      As of December 31, 2004, there were 15,236,355 outstanding shares of the
issuer's common stock, par value $.0001 per share ("Common Stock"), which is the
only class of common stock of the issuer.

                       Documents Incorporated by Reference

      None.

      Transitional Small Business Disclosure Format: Yes |X| No |_|


                                       ii
<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                               Page
                                                                                                               ----
<S>                                                                                                             <C>
PART I............................................................................................................1

Item 1.     Business..............................................................................................1

Item 2.     Properties............................................................................................3

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

Item 4.     Submission of Matters to a Vote of Security Holders...................................................3

PART II...........................................................................................................4

Item 5.     Market for Common Equity and Related Stockholder Matters..............................................4

Item 6.     Management's Discussion and Analysis of Financial Condition and Results of Operations.................6

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

Item 8.     Changes In and Disagreements With Accountants on Accounting and Financial Disclosure..................9

Item 8A.    Controls and Procedures...............................................................................9

PART III..........................................................................................................9

Item 9.     Directors and Executive Officers; Compliance with Section 16(a) of the Exchange Act...................9

Item 10.    Executive Compensation...............................................................................12

Item 11.    Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.......13

Item 12.    Certain Relationships and Related Transactions.......................................................14

Item 13.    Exhibits, Financial Statements and Reports on Form 8-K...............................................14

Item 14.    Principal Accountant Fees And Services...............................................................15

CONSOLIDATED FINANCIAL STATEMENTS AND NOTES.....................................................................F-1

Report of Independent Auditors..................................................................................F-1
</TABLE>


<PAGE>

                                     PART I

ITEM 1. BUSINESS

      Unless the context otherwise requires, "SMS", "Company", "we", "us" and
"our" refer to Systems Management Solutions, Inc. and its subsidiaries combined.

      Supreme Holdings, Inc. (formerly Supreme Hospitality, Inc., Grubstake,
Inc. and Richwood, Inc.) incorporated in Nevada on November 10, 1997. On July
14, 2004, the shareholders voted to amend and restate the Company's Articles of
Incorporation, resulting in a change of the name of the company from Supreme
Holdings, Inc. to Systems Management Solutions, Inc. ("SMS").

      SMS acquired YCO Holdings, Inc., a Texas corporation ("YCO"), as a
wholly-owned subsidiary on January 2, 2003. The operations of YCO Holdings, Inc.
and its subsidiaries were discontinued on October 8, 2003. On March 29, 2004,
YCO filed for protection from its creditors under the provisions of Chapter 7 of
the United States Bankruptcy Code.

      SMS acquired BioLynx, Inc., a Texas corporation ("BioLynx"), as a
wholly-owned subsidiary on July 1, 2003. SMS is a holding company and has no
operations other than those conducted by its active subsidiary. On April 27,
2004, BioLynx changed its name to Aspect Business Solutions, Inc. ("ASPECT").
ASPECT maintains a website at www.4aspect.com.

      SMS is a diversified holding company that, through ASPECT, provides
business services, software and solutions primarily to the small and mid-sized
business sector, focusing on human resources management and payroll.

Our Operating Subsidiary

      At the time of its acquisition by the Company, ASPECT's main product was
an internet-based, biometric time and attendance product using fingerprints to
verify employee identity. In 2004, ASPECT's management determined that ASPECT
needed to expand its focus in an attempt to improve revenues, and began
providing a variety of products related to corporate information systems, human
resources and payroll.

      ASPECT provides a variety of solutions for human resources management that
are targeted to mid-size companies (100 to 1,000). The Company believes that
ASPECT's products help customers streamline their general ledger, and financial
systems activities including human resources and payroll processes to reduce
administration and operational costs, while also allowing customers to perform
routine business activities more efficiently and access needed information
quickly and easily.

      ASPECT is a Microsoft Certified Partner. One of ASPECT's major software
packages is Microsoft's Navision an ERP financial management software package to
assist with day-to-day general ledger and financial information functions in the
mid-size company. The various modules of this program allow users to track and
analyze user-defined data related all aspects of their company. Types of
analysis that can be performed using the human resources modules include
generating organizational charts, analyzing gaps in staffing, and comparing the
qualifications required for a position against the qualifications of employees
and applicants.

      ASPECT also provides Communication Tracking modules for its customers,
including ASPECT's intranet products and Microsoft Navision software. These
modules allow users to electronically manage documents that are created or
stored for employees and applicants. Users can also create communication
templates for commonly used
<PAGE>

documents. These modules allow the stored documents to be integrated with the
mail merge function of Microsoft Word using the fields of data stored for each
employee and applicant in the Microsoft Navision database.

      ASPECT also offers a companywide intranet to its clients. An intranet is a
website that is only accessible to certain individuals (in this case employees
of a company). A company intranet provides a central location for storing
documents, facilitating employee communication and distributing company news.
The Company believes ASPECT's intranet product can increase administrative
efficiency and reduce operating costs for ASPECT customers by reducing
dependence on paper communications with employees such as handbooks, forms and
standard memos.

      Another module for the Advanced Human Resources package is the Self
Service module, which allows employees and managers to view and change data
using the company's intranet. For example, with the Self Service module, an
employee could enter his new home address into the company's database without
the added time and expense of filling out a form and having someone in human
resources input the new information. Managers have the ability to input
information about the employees who report to them, and tracking mechanisms on
the program allow human resources staff to determine when changes are made, and
who made the change.

      ASPECT offers payroll processing software to its customers. The software
integrates with other products provided by ASPECT to reduce the time spent by
human resources staff on payroll by automating much of the process. The software
also allows the user to modify the standard settings for unique payroll
situations.

      Software products are licensed to ASPECT's customers, at a price which
varies based on the services chosen by each customer, and ASPECT provides
implementation support and ongoing product and customer support services.
ASPECT's products are designed to be user-friendly by using familiar
Microsoft-based techniques and functions.

      In addition to the products described above, ASPECT offers its customers
custom programming support and maintenance support for their Microsoft Navision
software modules. ASPECT's customers can rely on ASPECT to provide custom
programming as needed throughout the year. These services are priced on a fee
for service basis. ASPECT also offers Microsoft Navision version update support
which may include custom programming and system configuration and testing.

      One of ASPECT's key services is that it provides third party payroll
processing services. In competing with both larger and smaller payroll
processing companies ASPECT has positioned itself in the market by offering
flexible and custom services and applications to its clients.

      ASPECT also provides time and attendance systems from its Biolynx product
line which include an internet-based, biometric time and attendance product
using fingerprints to verify employee identity.

      ASPECT markets its products through a direct sales force, in conjunction
with the sales teams of various other companies with complementary products.
ASPECT also plans to market its payroll and human resources software and
services through independent sales representatives. This channel has only
recently been addressed, and has not resulted in revenue as of the date of this
filing.


                                        2
<PAGE>

      The market for ASPECT's products is highly competitive. Its products
compete primarily on the basis of technology, delivered functionality and price.
ASPECT's products are very similar to products offered by competitors. ASPECT's
major competitors include Checkpoint HR, Ultimate Software, ADP and Administaff,
and ASPECT also faces competition from the internal payroll and human resources
departments of potential customers which use custom software. ASPECT targets
companies with fewer than 1,000 employees, while some of its competitors target
larger companies as customers. Many of ASPECT's competitors or potential
competitors have significantly greater financial, technical and marketing
resources than ASPECT. However, ASPECT with its smaller and more focused
workforce is able to respond quickly to customer requests and market trends.

      ASPECT has 10 full-time employees. It is not subject to any significant
government regulation of its business.

ITEM 2. PROPERTIES

      The Company shares offices with its principal subsidiary, ASPECT Business
Solutions, Inc., located at 7550 IH-10-West - 14th Floor, San Antonio, Texas
78229. This rental space is approximately 16,000 square feet, the monthly rent
is $22,801 and the lease on this space expires on October 30, 2009. ASPECT is
the primary obligor on the lease. The Company is not affiliated with this
lessor. The Company's management believes that all facilities occupied by the
Company are adequate for present requirements, and that the Company's current
equipment is in good condition and is suitable for the operations involved.

ITEM 3. LEGAL PROCEEDINGS

      In July of 2004, ARCOA, LLC, a Texas limited liability company, together
with a related individual, filed three actions in the Judicial District Court of
Harris County, Texas against Systems Management Solutions, Inc. and certain
related companies and individuals, claiming damages in connection with certain
loans made and services performed on behalf of YCO Holdings, Inc., a subsidiary
of the Company. These lawsuits were dismissed in October, 2004 pursuant to a
Comprehensive Settlement Agreement which required the Company to make payments
to ARCOA and the related individual in the amount of $240,000. The payment
schedule calls for weekly payments to be made, and the final payment will be
made by the end of April 2005.

On February 3, 2005, Financial Insurance Company of America, Inc., and its
parent, Permian Basin Holdings, Inc., filed suit against a company related to
the principal shareholder of the Company and also named several individuals and
the Company as defendants. This suit was filed in the Judicial District Court of
Dallas County and did not specify the amount of damages claimed or the relative
responsibility for the alleged actions upon which the suit is based. Management
believes that the action against the Company is without merit and will be
adjudicated in favor of Company.

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

      On December 17, 2004, the 2004 Annual Meeting of Shareholders was held and
the shareholders approved several items detailed in the Proxy Statement
previously filed with the Commission. The shareholders voted to (i) adopt the
2004 Incentive Stock Plan; (ii) elect one Director to the Company's Board of
Directors to serve as a Class I director to hold office for a term of three (3)
years, or until his successor is duly elected and qualified and (iii) ratify the
appointment of Malone & Bailey, P.L.L.C. as the independent accountants of the
Company for the fiscal year ending June 30, 2003, June 30, 2004 and December 31,
2004. At the 2004 Annual Meeting of Shareholders, Steven L. Goldberg was elected
to serve as a Class I director of the Company for three years. Subsequently, on
February 8, 2005, Mr. Goldberg resigned his position.

      The votes cast for and against each of the above-described three proposals
are listed on the table below.

--------------------------------------------------------------------------------
            Proposal                           Votes For           Votes Against
--------------------------------------------------------------------------------
Incentive Stock Plan                           9,915,793               18,669
--------------------------------------------------------------------------------
Election of the Nominated Director             9,932,865                1,597
--------------------------------------------------------------------------------
Ratification of Appointment of Auditor         9,932,865                1,597
--------------------------------------------------------------------------------

                                     PART II

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Number of Shareholders

      The Company's authorized capitalization consists of 100,000,000 shares of
$0.0001 par value common stock, 5,000,000 shares of $0.0001 par value preferred
stock, and 60,000 shares of $100.00 par value Series A Cumulative Convertible
Preferred Stock (the "Series A Preferred Stock"). As of the date of this report,
there are 15,236,355 outstanding shares of common stock issued and outstanding
held of record by approximately 549 beneficial shareholders, no preferred stock
issued and outstanding and 55,270 shares of Series A Preferred Stock issued and
outstanding held of record by 1 shareholder.

      The Company's common stock is currently traded on the National Association
of Securities Dealers Automated Quotation System Over The Counter Bulletin Board
("OTCBB") under the symbol "SSMG" and was previously traded under the symbols
"SUHO" and "SMSN". There is limited trading activity in the stock of the
company. The Company began trading on the OTCBB on the National Association of
Securities Dealers, Inc. ("NASD") on February 1, 2002 and was traded for a short
time in 2004 on the "Pink Sheets".

      The following table sets forth, for the periods indicated, the bid price
range for the company's common stock:

      --------------------------------------------------------------------------
                      Quarter Ended              High              Low
      --------------------------------------------------------------------------

      --------------------------------------------------------------------------
      June 30, 2003                              $1.20            $1.20
      --------------------------------------------------------------------------
      September 30, 2003                         $1.35            $1.05
      --------------------------------------------------------------------------
      December 31, 2003                          $0.45            $0.45
      --------------------------------------------------------------------------
      March 31, 2004                             $0.65            $0.65
      --------------------------------------------------------------------------
      June 30, 2004                              $0.20            $0.20
      --------------------------------------------------------------------------
      September 30, 2004                         $1.35            $0.90
      --------------------------------------------------------------------------
      December 31, 2004                          $1.10            $1.10
      --------------------------------------------------------------------------

      These market quotations reflect the high bid and low prices as reflected
by the OTCBB or the "Pink Sheets", without retain mark-up, markdown or
commissions and may not necessarily represent


                                        4
<PAGE>

actual transactions. Some of the companies which serve as market makers for the
Company's common stock include Public Securities, Charles Schwab & Co., and M.H.
Meyerson & Co.

Recent Sales of Unregistered Securities

      On February 16, 2004, the Board of Directors voted to approve the
conversion of $2,564,100 of debt owed as of December 31, 2003 by the Company to
United Managers Group, Inc. into 25,641 shares of Series A Preferred Stock in
reliance on the exemption from registration provided by ss.4.2 of the Securities
Act of 1933, as amended (the "Securities Act").

      On February 17, 2004, the Board of Directors voted to approve the
conversion of $2,506,600 of debt owed by BioLynx, Inc. as of December 31, 2003
to United Managers Group, Inc. into 25,066 shares of Series A Preferred Stock in
reliance on the exemption from registration provided by ss.4.2 of the Securities
Act.

      On February 17, 2004, the Board of Directors voted to approve the
conversion of $291,300.00 of debt owed by BioLynx, Inc. as of December 31, 2003
to John D. Walker II into 2,913 shares of Series A Preferred Stock in reliance
on the exemption from registration provided by ss.4.2 of the Securities Act.

      On May 7, 2004, 100,000 shares of common stock valued at $45,000 for
payment for services as a director were issued to Cliff Hagler in reliance on
the exemption from registration provided by ss.4.2 of the Securities Act.

            On May 17, 2004, The Board of Directors voted to approve the
conversion of the advances to the Company by United Managers Group, Inc. and
John D. Walker II for the period of December 31, 2003 to March 31, 2004 in the
amount of $165,000 to 1,650 shares of Series A Preferred Stock in reliance on
the exemption from registration provided by ss.4.2 of the Securities Act.

Dividend Policy

      To date, the Company has not paid any cash dividends to holders of its
common stock. The Company currently intends to retain all of its future earnings
for use in its business and, therefore, does not expect to pay dividends in the
near future. No dividend or distribution may be declared or paid or set aside
for payment on the common stock or on any other junior stock, nor shall any
common stock or any other junior stock be redeemed, purchased or otherwise
acquired for any consideration by the Company unless, in each case, full
cumulative dividends on all outstanding shares of the Series A Preferred Stock
have been declared and paid through and including the most recent dividend
payment date, as provided in the Certificate of Designation for the Series A
Preferred Stock.

      The holders of record of the Series A Preferred Stock are entitled to
receive cumulative dividends at a rate of ten percent (10%) per annum on the
face value ($100 per share) denominated thereon (subject to adjustment for stock
splits, stock dividends, reorganization, reclassification or similar events)
(the "Adjusted Face Value"). At the discretion of the Company, any and all
dividends when paid, may be payable in additional shares of Series A Preferred
Stock in lieu of cash. Beginning twenty-four months after issuance, the holders
of the Series A Preferred Stock may elect to have future dividends paid in cash
in lieu of additional shares of Series A Preferred Stock. If the Company does
not have enough shares of common stock available to convert the Series A
Preferred Stock at the time conversion is requested by the holders, the dividend
rate will increase to fifteen percent (15%) per annum on the Adjusted Face
Value. Conversion of the Series A Preferred Stock has not been requested as of
the date of this filing.


                                        5
<PAGE>

Disclosure of Equity Compensation Plans

<TABLE>
<CAPTION>
                                      Number of securities
                                        to be issued upon           Weighted-average          Number of securities
         Plan Category                     exercise of             exercise price of         remaining available for
                                      outstanding options,        outstanding options,        future issuance under
                                     warrants and rights (#)    warrants and rights ($)     equity compensation plans
                                     -----------------------    -----------------------     -------------------------
<S>                                           <C>                         <C>                          <C>
Equity compensation plans                     N/A                         N/A                          N/A
approved by shareholders

Equity compensation plans not                 N/A                         N/A                          N/A
approved by shareholders

Total                                         N/A                         N/A                          N/A
</TABLE>

The Company has no equity compensation plans in place at the time of this
filing.

ITEM 6. MANAGEMENT'S PLAN OF OPERATIONS

      The following discussion and analysis should be read in connection with
the Company's consolidated financial statements and related notes thereto,
included elsewhere in this report.

      The operations of one of our subsidiaries, YCO Holdings, Inc., and its
subsidiaries, were discontinued on October 8, 2003. Subsequently, on March 29,
2004, YCO Holdings, Inc. filed for protection from its creditors under the
provisions of Chapter 7 of the United States Bankruptcy Code, with the United
States Bankruptcy Court for the Southern District of Texas, Houston Division.
The business of YCO Holdings, Inc. had generated only minimal revenue at the
time that operations were discontinued and losses were continuing to mount.
After reviewing the debts and assets of the company, it was determined that the
only possible way to deal with the subsidiary's creditors would be under the
supervision of the United States Bankruptcy Court. In the bankruptcy filing, YCO
Holdings, Inc. reported assets of $12,087.00 and liabilities of $4,808,275.44.
On April 30, 2004, the United States Trustee held the first meeting of creditors
pursuant to the provisions of Section 341 of the United States Bankruptcy Code.
After hearing testimony from the Company and interested creditors, the Trustee
determined that the case was a "no asset" case and recommended that it be
closed).

      ASPECT continued to experience operating losses during the period covered
by this report. As previously reported, ASPECT has expanded its product and
service offerings, which previously were focused on its biometric time and
attendance product. ASPECT now provides custom programming, support and
Microsoft systems products to its customers. During 2004 ASPECT became a
Microsoft Certified Partner which enabled it to remarket a specific line of
software developed by Microsoft Corporation. Adding these products and solutions
to the company's offerings has resulted in a new growth to the company revenue.
The majority of the revenue generated during the time period covered by this
filing has been generated from Microsoft solutions and custom programming.

      The Company experienced a loss from discontinued operations of $637,059
during the twelve months ended June 30, 2004, which was due to the
discontinuation of the operations of YCO Holdings, Inc. in October of 2003.

      SMS incurred a net loss of $1,306,416 for the six months ended December
31, 2004, and had a working capital deficit of $2,532,882 as of December 31,
2004. These conditions create an uncertainty as to SMS's ability to continue as
a going concern. The Company has seen improvement in the operating results of
ASPECT during the past six months. The Company continues to aggressively pursue
other acquisition targets which would contribute positively to the company's
profitability and cash flow. The company at the time of the filing has been
aggressively pursuing a corporate acquisition designed to improve the future
cash flow of the company. The Company believes that through acquisition it can
grow and attain positive cash flow in the near term. However, the Company
continues to rely on loans and advances principally from its major stockholder,
United Managers Group, Inc., to fund operating shortfalls and


                                       6
<PAGE>

does not foresee a change in this situation in the immediate future. There can
be no assurance that the Company will continue to have such loans and advances
available. The Company will not be able to continue operations without them. The
company does not plan on significant changes in the number of employees in the
near future. Neither does the company plan on a purchase or sale of plant or
significant equipment. However, it remains a central focus of the company to
pursue acquisition targets that will enhance the ability of the company to
satisfy its cash requirements.

Cautionary Note Regarding Forward-looking Statements and Risk Factors

      The Company's Form 10-KSB, any Form 10-QSB or any Form 8-K of the Company
or any other written or oral statements made by or on behalf of the Company may
contain forward-looking statements which reflect the Company's current views
with respect to future events and financial performance. The words "believe,"
"expect," "anticipate," "intends," "estimate," "forecast," "project," and
similar expressions identify forward-looking statements. All statements other
than statements of historical fact are statements that could be deemed
forward-looking statements, including any statements of the plans, strategies
and objectives of management for future operations; any statements concerning
proposed new products, services, developments or industry rankings; any
statements regarding future economic conditions or performance; any statements
of belief; and any statements of assumptions underlying any of the foregoing.
Such "forward-looking statements" are subject to risks and uncertainties set
forth from time to time in the Company's SEC reports and include, among others,
the Risk Factors below.

      Readers are cautioned not to place undue reliance on such forward-looking
statements as they speak only of the Company's views as of the date the
statement was made. The Company undertakes no obligation to publicly update or
revise any forward-looking statements, whether as a result of new information,
future events or otherwise.

Risk Factors

      You should consider the following discussion of risks as well as other
information regarding our common stock. The risks and uncertainties described
below are not the only ones. Additional risks and uncertainties not presently
known to us or that we currently deem immaterial also may impair our business
operations. If any of the following risks actually occur, our business could be
harmed.

      Competition

      The market for payroll processing and human resources management products
for mid-size businesses is intensely competitive. ASPECT's products and services
compete directly or indirectly with products and services offered by many much
larger companies, and ASPECT's products and services are not proprietary or
substantially different from those offered by competitors.

      Many of ASPECT's competitors have longer operating histories and
significantly greater financial, sales, marketing and other resources. Many
competitors have greater name recognition, and larger customer bases and
established sales distribution channels than ASPECT. As a result, these
competitors may be able to respond more effectively to new pricing requirements,
changes in customer requirements, withstand price decreases or devote greater
resources to the development, promotion, sale and support of their services than
ASPECT.

      There can be no assurance that ASPECT will be able to compete successfully
in the future or that competition will not have a material adverse effect on
ASPECT's business, results of operations and financial condition.

      Reliance on Key Personnel

      ASPECT's future success will depend to a significant extent upon the
continued service and performance of a relatively small number of key senior
management, sales and marketing personnel. ASPECT's success also depends upon
its ability to attract, motivate and retain other highly qualified personnel,
particularly personnel with industry related experience.


                                       7
<PAGE>

      ASPECT does not currently have executive management representation in all
areas of its business. ASPECT is in the process of upgrading its internal
financial and reporting systems to enhance management's ability to obtain and
better analyze information derived from its operations.

      Sales Channels

      ASPECT's future operating results will depend, upon other things, on its
ability to develop long-term channel distribution relationships to penetrate
different and wide-ranging end-user customers, particularly smaller businesses
not using its institutional competitors' products. ASPECT believes that the
continuing growth of its business will require expansion of its sales and
marketing activities. Such expansion will require significant resources and the
time and attention of senior management.

      Limited Operating History: Operating Losses

      ASPECT was incorporated in 1998 and did not begin substantive operations
until 1999. ASPECT has incurred net losses in every period since its inception.
There can be no assurance that ASPECT will attain profitability or, if
profitability is attained, that ASPECT will sustain profitability on a quarterly
or an annual basis. As the Company is a holding company, our revenues are
dependent on the revenues of our operating subsidiary, ASPECT.

      Possible Liability for Customer Actions

      ASPECT processes payroll based on information provided by its customers.
If a customer provides incorrect information and payroll taxes are not withheld
correctly, the customer could be found liable for penalties. Management believes
that ASPECT does not have liability for such penalties, as it is a third party
payroll processor, but if a court found ASPECT liable for penalties, such
liability could have a material adverse effect on the Company.

      Going Concern

      The Company's ability to continue as a going concern is an issue raised as
a result of the significant operating losses incurred in 2004 and 2003 and The
Company's negative working capital. The Company continues to experience net
operating losses. The Company's ability to continue as a going concern is
subject to The Company's ability to obtain necessary funding from outside
sources, including obtaining additional funding from the sale of The Company's
securities, increasing sales or obtaining loans and grants from various
financial institutions where possible.

      Additional Financing

      The Company needs additional financing to continue its operations.
Although The Company has been actively searching for available capital, it do
not have any current arrangements for additional outside sources of financing
and it cannot provide any assurance that such financing will be available.

      Limited Trading Market

      Currently only a very limited trading market exists for SMS common stock.
The Company's common stock trades on the OTCBB under the symbol "SSMG." The
OTCBB is a limited market and subject to substantial restrictions and
limitations in comparison to the NASDAQ system. Any broker/dealer that makes a
market in The Company's stock or other person that buys or sells The Company's
stock could have a significant influence over its price at any given time. The
Company cannot assure its shareholders that a market for The Company's stock
will be sustained. There is no assurance that The Company's shares will have any
greater liquidity than shares that do not trade on a public market.

      Penny Stock Regulation

      The Company's common stock is subject to the provisions of Section 15(g)
and Rule 15g-9 of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), commonly referred to as the "penny stock" rule. Section 15(g) sets forth
certain requirements for transactions in penny stocks and Rule 15g-9(d)(1)
incorporates the definition of penny stock as that used in Rule 3a51-1 of the
Exchange Act. The Commission generally defines penny stock to be any equity
security that has a market price less than


                                       8
<PAGE>

$5.00 per share, subject to certain exceptions. Rule 3a51-1 provides that any
equity security is considered to be penny stock unless that security is:
registered and traded on a national securities exchange meeting specified
criteria set by the Commission; authorized for quotation on The NASDAQ Stock
Market; issued by a registered investment company; excluded from the definition
on the basis of price (at least $5.00 per share) or the registrant's net
tangible assets; or exempted from the definition by the Commission. Since The
Company's common stock is deemed to be "penny stocks", trading in the shares
will be subject to additional sales practice requirements on broker-dealers who
sell penny stocks to persons other than established customers and accredited
investors.

ITEM 7. FINANCIAL STATEMENTS

      The information required by this Item is submitted as a separate section
of this Form 10-KSB. See Item 13.

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

         There have been no changes or disagreements with the accountants
regarding accounting and financial disclosures.

ITEM 8A. CONTROLS AND PROCEDURES

      (a) Under the supervision and with the participation of our management,
including our principal executive officer and principal financial officer, we
conducted an evaluation of the design and operation of our disclosure controls
and procedures, as such term is defined under Rules 13a-14(c) and 15d-14(c)
promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), within 90 days of the filing date of this report. Based on that
evaluation, our principal executive officer and our principal financial officer
concluded that the design and operation of our disclosure controls and
procedures were effective in timely alerting them to material information
required to be included in the Company's periodic reports filed with the SEC
under the Securities Exchange Act of 1934, as amended. The design of any system
of controls is based in part upon certain assumptions about the likelihood of
future events, and there can be no assurance that any design will succeed in
achieving its stated goals under all potential future conditions, regardless of
how remote.

      (b) In addition, there were no significant changes in our internal control
over financial reporting identified in connection with the evaluation that
occurred during the last fiscal quarter that have materially affected, or that
are reasonably likely to materially affect, our internal control over financial
reporting.

                                    PART III

ITEM 9. DIRECTORS AND EXECUTIVE OFFICERS; COMPLIANCE WITH SECTION 16(A) OF THE
        EXCHANGE ACT

      On July 14, 2004, the Board of Directors of the Company voted to increase
the number of directors from three to five. At that meeting, Jim Karlak was
elected to serve as a Class III director and Jesse L. Whittenton was elected to
serve as a Class II Director. Also, Jim Karlak, who serves as President of the
Company's subsidiary, ASPECT Business Solutions, Inc., was elected to serve as
President and Chief Executive Officer of the Company. Mr. Phillips continued
to serve as Chairman of the Board of Directors until the annual meeting of
Shareholders on December 17, 2004.

..

      The names of our directors and executive officers, their ages, and certain
other information about them are set forth below:


                                       9
<PAGE>

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------
             Name              Age                               Position and Term
----------------------------------------------------------------------------------------------------------
<S>                            <C>    <C>
Charles T. Phillips            62     Chairman ( October 2003 through December 17,2004), Former Chief Executive
                                            Officer&President - October 2003 through December 17, 2004
----------------------------------------------------------------------------------------------------------
Sandra L. Livney               49     Secretary, Treasurer &Chief Financial Officer -
                                      October 2003 through September 2004
----------------------------------------------------------------------------------------------------------
Clifford A. Hagler             52     Director - Since May 2003
----------------------------------------------------------------------------------------------------------
Bruce C. Culver                51     Director - Since May 2002
----------------------------------------------------------------------------------------------------------
Jim Karlak                     52     President, Chief Executive Officer and Director - Since July 2004
                                            Chairman since December 17, 2004.
----------------------------------------------------------------------------------------------------------
Jesse L. Whittenton            50     Director - Since July 2004
----------------------------------------------------------------------------------------------------------
Steve Goldberg                 51     Director - December 17, 2004 through February 8, 2004
----------------------------------------------------------------------------------------------------------
Morris Kunofsky                53     Chief Financial Officer - Since October, 2004
----------------------------------------------------------------------------------------------------------
Jenelle Stehle                 40     Secretary and Treasurer - Since October, 2004
----------------------------------------------------------------------------------------------------------
</TABLE>

      Charles T. Phillips has served as Chairman of the Board from October 18,
2003 until December 17, 2004. From October 2003 until July 2004 he also served
as President and Chief Executive Officer of the Company. Mr. Phillips is an
attorney and was admitted to membership in the State Bar of Texas in May 1966.
He attended the University of Texas at Austin, graduating in January 1966. Mr.
Phillips has been actively engaged in the practice of law since graduation, but
has also been an investor in real estate and several businesses in Houston,
Texas during that time. He served in the United States Air Force Reserve, as a
member of the 147th Fighter Group, Texas Air National Guard, where he achieved
the rank of Captain in the Judge Advocate General's Department. He has served on
the boards of numerous private companies and has been an active supporter of the
Boy Scouts of America for over thirty years, currently serving on the Board of
Directors of the Sam Houston Area Council, BSA.

      Sandra L. Livney joined Systems Management Solutions, Inc. as its
Controller in June 2003 and has served as Secretary, Treasurer and Chief
Financial Officer from October 18, 2003 until September 30,2004. Ms. Livney
graduated from the University of South Florida with a B.A. in Accounting. She
became a Certified Public Accountant by the State of Texas in 1981. Ms. Livney
worked for Mobil Oil Corporation for over 15 years, principally as an energy
trader in their deregulated natural gas trading division. She also worked for
Arthur Andersen, LLP as an Experienced Manager in their Energy Trading &
Marketing Division. Ms. Livney has worked in the private sector holding various
business and accounting related management positions.

      Cliff Hagler has served on the Board of Directors of the Company since May
30, 2003. Mr. Hagler is the Co-founder, President and CEO of Aquilan, Inc. a
proprietary software company in Austin, Texas. Mr. Hagler has over 25 years in
the software and computer services industries with a primary focus in the life
insurance and financial services sectors. Before joining Aquilan, Mr. Hagler
served as Vice President & General Manager for US Operations at Cedar, Inc., a
provider of complex data management solutions for the insurance industry. Prior
to Cedar, Mr. Hagler served as Vice President of the Financial Services Division
for Computer Sciences Corporation where he held responsibility for life
insurance administration systems development and ongoing enhancements. Mr.
Hagler is a frequent presenter at industry seminars and executive meetings and a
regular contributor to leading industry publications.

      Bruce Culver has been a member of the Board of Directors of Diamond C.
Stables and Ranch since 2001. Mr. Culver is also presently the President of
Speedway Erection Service Company, a position he has held since 1983. Mr. Culver
has served on the Board of Directors of the Company since May 2002 and has
served on the Board of Directors of System Builders Association, Erectors
Division.

      Jesse L. Whittenton graduated from Rice University in December of 1976
with a Bachelor of Commerce degree. Mr. Whittenton graduated from the University
of Texas School of Law in December of 1979, and was admitted to the Texas Bar in
1980. From 1993 until March 2000, Mr. Whittenton was a partner of Walker, Bright
& Whittenton, P.C. in Austin, Texas. Mr. Whittenton was one of three


                                       10
<PAGE>

managing partners who supervised personnel, budget development and management,
project development and objectives, and client development. Mr. Whittenton
specialized in defending municipal and county officials primarily in law
enforcement federal civil rights and employment law litigation in Texas,
Indiana, Tennessee and Mississippi. From March 2000 until the present, Mr.
Whittenton has been a managing partner of Whittenton & Hurst, L.L.P. in Austin,
Texas.

      Jim Karlak comes to the company with over 20 years of finance, operations
and senior executive experience, most recently as Chief Operating Officer of
Applied Science Fiction. Mr. Karlak created and implemented operating and
financial processes for this young start-up company and led internal operations.
With an annual budget of $30M, 160 employees and as Board Secretary, he directed
the company to the creation of sustainable outsourced manufacturing and service
operations. Mr. Karlak successfully raised $13 million in bridge financing,
resulting in a successful acquisition of the company by Eastman Kodak
Corporation. Mr. Karlak began his career with Texas Instruments ("TI") and held
a number of key financial positions at TI. Mr. Karlak left TI in 1985 and joined
Shared Resource Exchange, Inc. as Chief Financial Officer. In 1991, Mr. Karlak
joined Image Data Corporation ("IDC") as Vice President of Operations. Under his
leadership, IDC was sold to E-Systems Corporation which merged with a second
medical imaging company purchased earlier by E-Systems and an internal software
group to form the new company E-Systems Medical Electronics ("EMED"). Karlak led
EMED as President into the high-end hospital imaging network market, as well as
military medical applications including systems aboard several aircraft carriers
and one stationed in Antarctica. In 2000, Mr. Karlak, as CEO of DynaTouch Corp.,
moved the company to a higher level through the development and launch of a new
medical product line to augment the company's existing leadership position as
one of the largest providers of kiosk information systems to the federal
government. Mr. Karlak is a graduate of the University of Texas at Austin, where
he received a Bachelor of Arts in Economics, with honors. He received his
Masters of Business Administration, also from the University of Texas at Austin,
in 1978.

Steven L. Goldberg is President of Employment Management Services, LLC, a
Dallas, Texas based consultant to Financial Insurance Company of America. He was
born on August 8, 1953, in Queens, New York. Mr. Goldberg graduated from Drexel
University in Philidelphia, Pennsylvania in May, 1976, with a Bachelor of
Science degree in Mathematics. Mr. Goldberg has 26 years experience in various
management roles in the insurance industry, including Executive Vice President
of General Insurance Managers in Dallas, Texas and assistant Vice President of
Domestic Brokerage for AIG.

Morris Kunofsky most recent experience was with Computer Business Solutions,
Inc., a Microsoft Certified systems reseller and computer consulting company.
Mr. Kunofsky was the Director of Consulting. As Director of consulting he has
received Microsoft Navision Certifications in Distribution, Implementation,
Programming, HR, Payroll and was a Product Specialist in Navision.

Mr. Kunofsky was President and founder of Kay Sign Company, a billboard sign
rental company in the Dallas, Texas area. Previously he was employed at Deloitte
Touche a world wide audit company as Audit Manager.

Mr. Kunofsky received his CPA certificate in 1980 and is a graduate of the
University of North Texas where he received a Bachelor's of Business
Administration in 1978.

Jenelle Stehle has over 15 years of Accounting, Finance, Payroll, Human Resource
and Management experience, in both publicly traded and privately held
organizations. Prior to her employment with SMS and ASPECT, Ms. Stehle filled
the Controller's position for a $30m distribution company with domestic and
international customers, manufactures in China and office locations in the US.,
Puerto Rico, Hong Kong and China. During her tenure, the company opened multiple
locations, doubled revenue in three years and gained over 75 customers in
Canada.

Previously, Ms. Stehle was employed and held key management/finance positions in
two of the largest real estate investment trusts in the United States, Archstone
(formerly Security Capital) and Equity Residential-Southwest Region.

Ms. Stehle is a graduate of the University of Texas at Austin, where she
received a Bachelor's of Business Administration in Accounting in 1988. She
received her CPA certificate in 1998. She has received Microsoft Certification
in the Navasion Financial Series.

Board Committees, Meetings and Compensation

      The Company's business affairs are managed by the Board. During the period
from June 30, 2004 through December 31, 2004, the Board of Directors held 5
meetings at which time no director then in office attended fewer than 100% of
the aggregate number of meetings of the Board of Directors. None of the
Directors currently receive any compensation for their service on the Board. The
Company does not currently have any standing committees; however, the Board
anticipates designating an Executive Committee, a Compensation Committee and an
Audit Committee in the next fiscal year. As of the date of this filing, the
entire Board fulfills the functions of the Audit Committee. The Company does not
have a nominating committee, and the Board believes such a committee is not
necessary due to the small size of the Board and the absence to date of any
director candidates recommended by shareholders. Currently, the entire Board
participates in the consideration of director nominees. The Board of Directors
does not have a formal policy with regard to the consideration of any director
candidates recommended by stockholders, the minimum qualification of director
candidates or the process for identifying and evaluating director nominees. To
date, the Company has not received any director candidates recommended by its
stockholders and consequently the Board of Directors has believed that it could
appropriately address any such recommendations received without a formal policy.
The Board has determined that none of the directors are "audit committee
financial experts" as such term is defined in Item 401(e) of Regulation S-B. Due
to the small size of the Company, the Board believes an audit committee
financial expert is not necessary, but the Board may seek an audit committee
financial expert for the Board in the future if the Company's needs change.
Although the Company does not have a formal policy regarding attendance by
members of the Board of Directors at annual meetings of stockholders, directors
are encouraged to attend annual meetings. Three directors attended the 2003
annual meeting of stockholders.
Four directors attended the 2004 annual meeting of stockholders.


                                       11
<PAGE>

Stockholder Communications with the Board of Directors

      Stockholders may communicate with the full Board, or any individual
directors, by sending such written communication to the following address:

      Corporate Secretary
      7550 IH-10 West - 14th Floor
      San Antonio, Texas 78229

      Any written communications received by the Corporate Secretary will be
forwarded to the appropriate directors.

Code of Ethics

      The Company has not yet established a code of ethics comprising written
standards that are reasonably designed to deter wrongdoing and to promote the
behavior described in Item 406 of Regulation S-B promulgated by the Securities
and Exchange Commission. The Board does not believe such a code is necessary at
this stage in the Company's development.

Section 16(a) Beneficial Ownership Reporting Compliance

      Section 16(a) of the Exchange Act requires the Company's directors,
executive officers and persons who own more than 10% of the Company's Stock
(collectively, "Reporting Persons") to file with the SEC initial reports of
ownership and changes in ownership of the Company's Common Stock. Reporting
Persons are required by SEC regulations to furnish the Company with copies of
all Section 16(a) reports they file. To the Company's knowledge, based solely on
its review of the copies of such reports received or written representations
from certain Reporting Persons that no other reports were required, the Company
believes that during the year ended December 31, 2004, all Reporting Persons
complied with all applicable filing requirements except as follows: Charles
Phillips - one Form 3; Bruce Culver - one Form 3; Cliff Hagler - one Form 3;
United Managers Group, Inc. - one Form 3 and four Form 4s; John D. Walker II -
one Form 3; Sandra Livney - one Form 3; Douglas Dickey - one Form 3; Jimmy Pyle
- one Form 3. Mr. Phillips, Mr. Culver, Mr. Hagler, Mr. Walker and United
Managers Group, Inc. have filed their delinquent Forms 3.

ITEM 10. EXECUTIVE COMPENSATION

Summary of Cash and Certain Other Compensation

      The following table provides certain summary information concerning the
compensation earned by the Company's Chief Executive Officer for services
rendered in all capacities to the Company and its subsidiaries for the fiscal
years ended December 31, 2004, December 31,2003, and December 31, 2002. No other
employee of the Company received more than $100,000 in compensation during any
of the fiscal years listed above. The following information includes the dollar
value of base salaries, bonus awards, the number of stock options granted and
certain other compensation, if any, whether paid or deferred. The listed
individuals shall be hereinafter referred to as the "Named Officers."


                                       12
<PAGE>

                           SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------
                                         Annual Compensation            Long Term Compensation
                                                                 -----------------------------------
                                                                         Awards              Payouts
---------------------------------------------------------------------------------------------------------------------
                                                                 Restricted    Securities
    Name and Principal          Six Months                         Stock      Underlying      LTIP       All Other
         Position             Year       Salary        Bonus       Awards       Options/     Payouts    Compensation
                               End         ($)          ($)          ($)          SARs         ($)           ($)
                                                                                  (#)
---------------------------------------------------------------------------------------------------------------------
<S>                         <C>             <C>          <C>          <C>          <C>          <C>     <C>
Charles T. Phillips         12/31/04        0            0            0            0            0       270,000 (2)
Former Chairman, Former    -----------------------------------------------------------------------------------------
Chief Executive Officer &   12/31/03        0            0            0            0            0        69,300
President (1)               -----------------------------------------------------------------------------------------
                            12/31/02        0            0            0            0            0            0
---------------------------------------------------------------------------------------------------------------------
James Karlak                12/31/04        0            0            0            0            0            0
Current Chief Executive     -----------------------------------------------------------------------------------------
Officer &President, and     12/31/03        0            0            0            0            0            0
Current Chief Executive     -----------------------------------------------------------------------------------------
Officer of ASPECT (3)       12/31/02        0            0            0            0            0            0
---------------------------------------------------------------------------------------------------------------------
Morris Kunofsky             12/31/04        0            0            0            0            0            0
Current Chief Financial     -----------------------------------------------------------------------------------------
Officer and                 12/31/03        0            0            0            0            0            0
Current Chief Financial     -----------------------------------------------------------------------------------------
Officer of ASPECT (4)       12/31/02        0            0            0            0            0            0
---------------------------------------------------------------------------------------------------------------------
Jenelle Stehle              12/31/04        0            0            0            0            0            0
Current Secretary           -----------------------------------------------------------------------------------------
And Treasurer (5)           12/31/03        0            0            0            0            0            0
                             -----------------------------------------------------------------------------------------
                            12/31/02        0            0            0            0            0            0
---------------------------------------------------------------------------------------------------------------------
</TABLE>

(1) Mr. Phillips served as the Company's CEO and President from October 2003
until his resignation in July 2004.

(2) Represents fees paid to Mr. Phillips for legal services rendered to the
Company and its subsidiaries.

(3) Mr. Karlak became CEO and President of the Company in July 2004. He has
served as CEO of ASPECT since February, 2004.

(4) Mr. Kunofsky became CFO of the Company in October 2004. He has served as CFO
of ASPCET since March, 2004.

(5) Ms. Stehle became Secretary and Treasurer in October 2004.

      The Company does not have any employment agreements with the individuals
listed in the table above, or other executive officers of the Company.

      Directors of the Company do not generally receive any compensation for
their service on the Board. On May 7, 2004, 100,000 shares of common stock
valued at $45,000 for payment for services as a director were issued to Cliff
Hagler.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
         RELATED STOCKHOLDER MATTERS

      There were 15,236,355 common shares outstanding as of December 31, 2004.
The following tabulates holdings of shares of SMS by each person who, subject to
the above, as of December 31,2004, holds of record or is known by management to
own beneficially more than 5.0% of the common shares and, in addition, by all
directors and officers of SMS individually and as a group.
Except as indicated by footnotes to the following table, to the Company's
knowledge, the persons named in the table have sole voting and investment power
with respect to all shares of stock beneficially owned by them.


                                       13
<PAGE>

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------
                                         Name &Address                  Amount of Shares Owned       Percentage
     Title of Class                 of Beneficial Owner (1)                                          of Class (2)
---------------------------------------------------------------------------------------------------------------------
<S>                       <C>                                                  <C>                      <C>
   Series A Preferred     United Managers Group, Inc.                            55,270                  100%
         Stock            12001 Network
                          Building F, Suite 200
                          San Antonio, TX 78249
---------------------------------------------------------------------------------------------------------------------
      Common Stock        United Managers Group, Inc.                          2,265,000                14.87%
                          12001 Network
                          Building F, Suite 200
                          San Antonio, TX 78249
---------------------------------------------------------------------------------------------------------------------
      Common Stock        John D. Walker II                                    5,011,460                32.89%
---------------------------------------------------------------------------------------------------------------------
      Common Stock        American Continental Management Inc. (3) (4)          500,000                 3.28%
                          c/o Charles T. Phillips, P.C.
                          3027 Marina Bay Drive, Suite 105
                          League City, TX 77573
---------------------------------------------------------------------------------------------------------------------
      Common Stock        Bruce Culver (4)                                      500,000                 3.28%
---------------------------------------------------------------------------------------------------------------------
      Common Stock        Cliff Hagler (4)                                      100,000                 0.66%
---------------------------------------------------------------------------------------------------------------------
      Common Stock        James Karlak (4)                                         0                     n/a
---------------------------------------------------------------------------------------------------------------------
      Common Stock        Morris Kunofsky (4)                                      0                     n/a
---------------------------------------------------------------------------------------------------------------------
      Common Stock        Jenelle Stehle (4)                                       0                     n/a
---------------------------------------------------------------------------------------------------------------------

      Common Stock        All directors and executive officers as a            1,100,000                 7.2%
                          group (5 persons)
---------------------------------------------------------------------------------------------------------------------
</TABLE>

(1)   Unless otherwise indicated, the address for each of these individuals is
      c/o Systems Management Solutions, Inc., 7550 IH-10-West - 14th Floor, San
      Antonio, TX 78229.

(2)   The "Percentage Beneficially Owned" is calculated by dividing the "Number
      of Shares Beneficially Owned" by the sum of the total outstanding shares
      of stock of the class listed in the Company.

(3)   The shares held by American Continental Management Inc. are beneficially
      owned by Charles Phillips, the Company's Chairman and former Chief
      Executive Officer and President.

(4)   Indicates shares beneficially owned by a director or executive officer of
      the Company.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

      United Managers Group, Inc., the major shareholder of the Company,
continued to fund substantial sums to the Company during the fiscal year ending
June 30, 2004 pursuant to the terms of a promissory note in the original
principal sum of up to $2,000,000. In February 2004, United Managers Group, Inc.
agreed to convert $2,719,100 due at that time under this note into 27,191 shares
of Series A Preferred Stock, and to continue to make advances under the note. On
June 3, 2004, the Company and United Managers Group, Inc. agreed to extend the
maturity date of the note to April 15, 2005. The note bears interest at ten
percent and is unsecured. As of December 31, 2004, the balance owed was
$501,750.

      Certain stockholders of the Company advance money to ASPECT on an
as-needed basis. The advances are due on demand, bear no interest and have no
collateral. Imputed interest expense at 10% was added as a contribution to
capital each year. As of December 31, 2004, the balance owed was $1,709,272.

ITEM 13. EXHIBITS, FINANCIAL STATEMENTS AND REPORTS ON FORM 8-K

      (a) The following documents are filed as part of this report:


<TABLE>
<CAPTION>
                                                                                 Page Number
                                                                                 -----------
           <S>                                                                        <C>
           1. Financial Statements:
                Report of Independent Auditors                                        F-1
                Consolidated Balance Sheet                                            F-2
                Consolidated Statements of Operations                                 F-3
                Consolidated Statements of Stockholders' Deficit                      F-4
                Consolidated Statements of Cash Flows                                 F-6
                Notes to Consolidated Financial Statements                            F-7
                Exhibits included or incorporated herein:  See Exhibit Index.
</TABLE>


                                       14
<PAGE>

      (b) Reports on Form 8-K:

      On February 8, 2004 the Company filed a Current Report on Form 8-K to
change the fiscal year end from June 30 to December 31.

      On August 20, 2004, the Company filed a Current Report on Form 8-K
announcing the change in the Company's name from Supreme Holdings, Inc. to
Systems Management Solutions, Inc.

      On April 2, 2004, the Company filed a Current Report on Form 8-K, which
announced the bankruptcy filing of YCO Holdings, Inc., a subsidiary of the
Company.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

      The following table presents fees for professional services rendered by
Malone & Bailey, PLLC for the audit of the Company's annual consolidated
financial statements for fiscal 2004 and 2003, and fees billed for other
services rendered by Malone & Bailey, PLLC.

                                                       2004          2003
                                                     --------       ------

      Audit Fees                                     $124,850       $8,000
      Audit related fees                             $      0       $    0
      Tax fees                                       $      0       $    0
      All other fees                                 $      0       $    0

                        Total fees                   $124,850       $8,000

      The Board pre-approves all auditing and permitted non-audit services to be
performed for the Company by its independent auditor, including the fees and
terms of those services.


                                       15
<PAGE>

                                   SIGNATURES

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

Dated: April 14, 2005

                             SYSTEMS MANAGEMENT SOLUTIONS, INC.,
                                a Nevada corporation


                             By:    /s/ James Karlak
                                 -----------------------------------------------
                             James Karlak, President and Chief Executive Officer


                             By:    /s/ Morris Kunofsky
                                 -----------------------------------------------
                             Morris Kunofsky, Chief Financial Officer

                                POWER OF ATTORNEY

      KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints James Karlak, his/her attorney-in-fact,
with the power of substitution, for him/her in any and all capacities, to sign
any amendments to this Report on Form 10-K, and to file the same, with Exhibits
thereto and other documents in connection therewith with the Securities and
Exchange Commission, hereby ratifying and confirming all that said
attorney-in-fact, or substitute or substitutes may do or cause to be done by
virtue hereof.

      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:


<TABLE>
<CAPTION>
           Signature                                     Title                               Date
           ---------                                     -----                               ----
<S>                                     <C>                                            <C>
       /s/ James Karlak                 Chief Executive Officer, President and         April 14, 2005
---------------------------------       Director
James Karlak

       /s/ James Karlak                 Chairman and Director                          April 14, 2005
---------------------------------
James Karlak

       /s/ Clifford Hagler              Director                                       April 14, 2005
---------------------------------
Clifford Hagler

       /s/ Bruce Culver                 Director                                       April 14, 2005
---------------------------------
Bruce Culver

       /s/ Jesse Whittenton             Director                                       April 14, 2005
---------------------------------
Jesse Whittenton
</TABLE>


                                       16
<PAGE>

                                  EXHIBIT INDEX

Exhibit No.       Description


31.1(1)           Rule 13a-14(a)/15d-14(a) Certification of Principal Executive
                  Officer

31.2(1)           Rule 13a-14(a)/15d-14(a) Certification of Principal Financial
                  Officer

32.1(1)           Section 1350 Certification of CEO

32.2(1)           Section 1350 Certification of CFO


(1) Filed herewith.


                                       17
<PAGE>

             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors
   Systems Management Solutions, Inc.
   Houston, Texas

We have audited the accompanying consolidated balance sheet of Systems
Management Solutions, Inc. ("SMS") as of December 31, 2004 and the related
consolidated statements of operations, stockholders' deficit and cash flows for
the six months ended December 31, 2004, year ended June 30, 2004 and six months
ended June 30, 2003. These financial statements are the responsibility of SMS's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of SMS as of December 31, 2004 and
the results of its operations and its cash flows for the periods described in
conformity with accounting principles generally accepted in the United States of
America.

The accompanying financial statements have been prepared assuming that SMS will
continue as a going concern. As discussed in Note 2 to the financial statements,
SMS has suffered recurring losses from operations and has a negative working
capital, which raises substantial doubt about its ability to continue as a going
concern. Management's plans regarding those matters are described in Note 2. The
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.


MALONE & BAILEY, PC
www.malone-bailey.com
Houston, Texas

February 28, 2005


                                      F-1
<PAGE>

                          INDEPENDENT AUDITORS' REPORT

To the Board of Directors
   Supreme Holdings, Inc.
   Houston, Texas

We have audited the accompanying statements of operations, stockholders' deficit
and cash flows of Supreme Holdings, Inc. ("SUHO") (now Systems Management
Solutions, Inc.) for the year ended December 31, 2002. These financial
statements are the responsibility of SUHO's management. Our responsibility is to
express an opinion on these financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the results of SUHO's operations and its cash flows for
the year ended December 31, 2002 in conformity with accounting principles
generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. The Company has limited operations
currently and suffered recurring losses from operations that raise substantial
doubt about its ability to continue as a going concern.


Clyde Bailey
Certified Public Accountant
March 15, 2003

San Antonio, Texas


                                      F-2
<PAGE>

                       SYSTEMS MANAGEMENT SOLUTIONS, INC.
                           CONSOLIDATED BALANCE SHEET
                                December 31, 2004

         ASSETS

Current Assets
  Cash                                                             $      5,147
  Accounts Receivable from Related Party                                 57,327
  Prepaids                                                               14,745
  Accounts Receivable                                                     1,036

                                                                   ------------
         Total current assets                                            78,255

Fixed Assets
   Property, plant & equipment, net of
     accumulated depreciation of $394,858                                58,350
                                                                   ------------
         TOTAL ASSETS                                              $    136,605
                                                                   ============

         LIABILITIES AND STOCKHOLDERS' DEFICIT

Current Liabilities

  Notes payable - related party                                    $  2,211,022
  Accrued interest & expenses                                           326,816
  Accounts payable                                                       68,299
  Account payable to related party                                        5,000
                                                                   ------------
         Total Current Liabilities                                    2,611,137
                                                                   ------------
Commitments and Contingencies                                                --

Stockholders' Deficit
  Preferred stock, $.0001 par value, 5,000,000
         shares authorized
    Series A Cumulative Convertible Preferred Stock,
         $.0001 par value, 60,000 shares authorized,
         55,271 shares issued and outstanding                                 6
    Common stock, $.0001 par value, 100,000,000 shares
         authorized, 15,236,355 shares issued and
         outstanding                                                      1,524
  Additional paid-in capital                                         16,387,981
  Accumulated deficit                                               (18,864,044)
                                                                   ------------
         Total Stockholders' Deficit                                 (2,474,533)
                                                                   ------------
         TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT               $    136,605
                                                                   ============

                See accompanying summary of accounting policies
                       and notes to financial statements.


                                      F-3
<PAGE>

                       SYSTEMS MANAGEMENT SOLUTIONS, INC.
                      CONSOLIDATED STATEMENTS OF OPERATIONS
          Six Months Ended December 31, 2004, Year Ended June 30, 2004,
                         Six Months Ended June 30, 2003,
                        and Year Ended December 31, 2002

<TABLE>
<CAPTION>
                                                                                        (Restated)
                                        Six Months         Year         Six Months         Year
                                          Ended           Ended           Ended           Ended
                                       December 31,      June 30,        June 30,      December 31,
                                           2004            2004            2003            2002
                                       ------------    ------------    ------------    ------------
<S>                                    <C>             <C>             <C>             <C>
Revenue                                $     68,792    $     28,515    $         --    $         --

Cost of sales                                68,260         113,777              --              --
                                       ------------    ------------    ------------    ------------
   Gross Margin                                 532         (85,262)             --              --
                                       ------------    ------------    ------------    ------------
General and administrative                1,232,844       2,436,753       3,952,113              --
Impairment                                       --       5,271,967       6,281,891         300,000
                                       ------------    ------------    ------------    ------------
   Total operating expenses               1,232,844       7,708,720      10,234,004         300,000
                                       ------------    ------------    ------------    ------------
   Net Operating Loss                    (1,232,312)     (7,793,982)    (10,234,004)       (300,000)

Interest income                               2,452              --             592           7,347
Interest expense                            (76,557)       (401,940)        (28,332)       (264,012)
Sale of stock in subsidiary                      --              --              --         991,424
                                       ------------    ------------    ------------    ------------
Income (loss) from
  continuing operations                  (1,306,417)     (8,195,922)    (10,261,744)        434,759

Income (Loss) from
  discontinued operations                        --        (637,059)       (775,307)         13,531
Income from disposal of
  discontinued operations                        --       2,667,098              --              --
                                       ------------    ------------    ------------    ------------
         NET INCOME (LOSS)             $ (1,306,417)   $ (6,165,883)   $(11,037,051)   $    448,290
                                       ============    ============    ============    ============

Basic and diluted
 loss per share:
   Continuing operations               $      (0.09)   $      (0.54)   $      (0.99)   $       0.05
   Discontinued operations                       --            0.13           (0.08)             --
                                       ------------    ------------    ------------    ------------
   Total                               $      (0.09)   $      (0.41)   $      (1.07)   $       0.05
                                       ============    ============    ============    ============

Weighted average
 shares outstanding                      15,236,355      15,167,776      10,342,003       8,547,000
</TABLE>

                See accompanying summary of accounting policies
                       and notes to financial statements.


                                      F-4
<PAGE>

                       SYSTEMS MANAGEMENT SOLUTIONS, INC.
                 CONSOLIDATED STATEMENT OF STOCKHOLDERS' DEFICIT
          Six Months Ended December 31, 2004, Year Ended June 30, 2004,
                         Six Months Ended June 30, 2003,
                        and Year Ended December 31, 2002

<TABLE>
<CAPTION>
                                                                     Series A
                                 Preferred Stock                  Preferred Stock                 Common Stock
                             Shares           Amount          Shares           Amount         Shares         Amount
                            ----------      ----------       ----------      ----------      ----------     ----------
<S>                         <C>             <C>              <C>             <C>             <C>            <C>
Balances,
  December 31, 2001                  -      $        -                -      $        -      10,000,000     $    1,000

Common shares
  cancelled                          -               -                -               -      (1,453,648)          (145)

Issuance of
  preferred stock            1,000,000             100                -               -               -              -

Net Income                           -               -                -               -               -              -
                           -----------      ----------        ---------       ---------      ----------     ----------
Balances,
  December 31, 2002
   (Restated)                1,000,000             100                -               -       8,546,352            855

Shares issued for
  Purchase of YCO                    -               -                -               -       1,500,003            150

Common shares issued
  in exchange for
  preferred shares          (1,000,000)           (100)               -               -         590,000             59

Common shares issued
  for services                       -               -                -               -       2,500,000            250

Net Loss                             -               -                -               -               -              -
                            ----------      ----------       ----------      ----------      ----------     ----------
Balances,
  June 30, 2003                      -               -                -               -      13,136,355          1,314

Purchase of ASPECT                   -               -                -               -       2,000,000            200

Imputed interest                     -               -                -               -               -              -

Additional cash
  contribution by
  majority shareholder               -               -                -               -               -              -

Common shares issued
  for services                       -               -                -               -         100,000             10

Conversion of debt for
  preferred stock                    -               -           55,271               6               -              -

Net Loss                             -               -                -               -               -              -
                            ----------      ----------       ----------      ----------      ----------     ----------
Balances,
  June 30, 2004                      -               -           55,271               6      15,236,355          1,524

Imputed interest                     -               -                -               -               -              -

Net Loss                             -               -                -               -               -              -
                            ----------      ----------       ----------      ----------      ----------     ----------

Balances,
  December 31, 2004                  -      $        -           55,271      $        6      15,236,355     $    1,524
                            ==========      ==========       ==========      ==========      ==========    ==========
</TABLE>

                 See accompanying summary of accounting policies
                       and notes to financial statements.


                                      F-5
<PAGE>

                       SYSTEMS MANAGEMENT SOLUTIONS, INC.
            CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)
          Six Months Ended December 31, 2004, Year Ended June 30, 2004,
                         Six Months Ended June 30, 2003,
                        and Year Ended December 31, 2002

<TABLE>
<CAPTION>
                              Stock      Additional
                          Subscription     Paid-in        Accumulated
                           Receivable      Capital          (Deficit)        Total
                         ------------    ------------    -------------   ------------
<S>                      <C>             <C>             <C>             <C>
Balance,
  December 31, 2001      $         --    $      1,500    $   (802,984)   $   (800,484)

Common shares
  cancelled                        --             145              --              --

Issuance of
  preferred stock          (5,700,000)      6,299,900              --         600,000

Net Income                         --              --         448,290         448,290
                         ------------    ------------    ------------    ------------
Balances,
  December 31, 2002
   (Restated)              (5,700,000)      6,301,545        (354,694)        247,807

Shares issued for
  Purchase of YCO                  --       2,999,850              --       3,000,000

Common shares issued
  in exchange for
  preferred shares          5,700,000      (5,707,898)             --          (7,939)

Common shares issued
  for services                     --       3,749,750              --       3,750,000

Net Loss                           --              --     (11,037,051)    (11,037,051)
                         ------------    ------------    ------------    ------------
Balances,
  June 30, 2003                    --       7,343,247     (11,391,744)     (4,047,183)

Purchase of ASPECT                 --       2,399,800              --       2,400,000

Imputed interest                   --         236,651              --         236,651

Additional cash
  contribution by
  majority shareholder             --         777,473              --         777,473

Common shares issued
  for services                      _          44,990              --          45,000

Conversion of debt for
  preferred stock                  --       5,527,092              --       5,527,098

Net Loss                           --              --      (6,165,883)     (6,165,883)
                         ------------    ------------    ------------    ------------
Balances,
  June 30, 2004                    --      16,329,253     (17,557,627)     (1,226,844)

Imputed interest                   --          58,728              --          58,728

Net Loss                           --              --      (1,306,417)     (1,306,417)
                         ------------    ------------    ------------    ------------
Balances,
  December 31, 2004      $         --    $ 16,387,981    $(18,864,044)   $ (2,474,533)
                         ============    ============    ============    ============
</TABLE>

                 See accompanying summary of accounting policies
                       and notes to financial statements.


                                      F-6
<PAGE>

                       SYSTEMS MANAGEMENT SOLUTIONS, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOW
          Six Months Ended December 31, 2004, Year Ended June 30, 2004,
                         Six Months Ended June 30, 2003,
                        and Year Ended December 31, 2002

<TABLE>
<CAPTION>
                                                                                                  (Restated)
                                                   Six Months         Year         Six Months         Year
                                                     Ended           Ended           Ended           Ended
                                                  December 31,      June 30,        June 30,      December 31,
                                                      2004            2004            2003            2002
                                                  ------------    ------------    ------------    ------------
<S>                                               <C>             <C>             <C>             <C>
Cash Flows From Operating Activities
  Net income (loss)                               $ (1,306,417)   $ (6,165,883)   $(11,037,051)        448,290
  Net income (loss) from
   discontinued operations                                  --        (637,059)       (775,307)             --
  Gain on disposal of
   discontinued operations                                  --       2,667,098              --              --
                                                  ------------    ------------    ------------    ------------
  Net loss before
   discontinued operations                          (1,306,417)     (8,195,922)    (10,261,744)        448,290
  Adjustments to reconcile net loss to net cash
  used in operating activities:
    Impairment of goodwill                                           5,271,965       5,804,418              --
    Common stock issued for services                                    45,000       3,750,000              --
    Impairment of investment
     in ASPECT                                                              --         477,473              --
    Imputed interest                                    58,728         236,654              --              --
    Write off of offering costs                                             --          81,000              --
    Sale of stock in subsidiary                                             --              --        (991,424)
    Depreciation and amortization                       30,844          52,916              --         136,850
    Changes in:
         Other current assets                          (14,745)         16,449              --          64,986
         Accounts receivable                               101          11,170              --              --
         Accounts receivable related party             (57,327)             --              --              --
         Accounts payable                              (32,728)        (77,500)          2,284              --
         Accounts payable related party                  5,000              --              --              --
         Accrued expenses                              (55,111)        429,233          28,332              --
                                                  ------------    ------------    ------------    ------------
  Net Cash Used In
   Continuing Operations                            (1,371,655)     (2,210,035)       (118,237)       (341,298)
  Net Cash Used In
   Discontinued Operations                                  --        (600,924)       (776,572)             --
                                                  ------------    ------------    ------------    ------------
  Net Cash Used In
   Operating Activities                             (1,371,655)     (2,810,959)       (894,809)       (341,298)
                                                  ------------    ------------    ------------    ------------

Cash Flows From
 Investing Activities
  Purchase of fixed assets                             (15,967)         (9,649)             --              --
  Investment in Biolynx                                     --              --        (477,473)             --
  Investment in YCO Holdings                                --              --        (828,533)       (122,270)
                                                  ------------    ------------    ------------    ------------
  Net Cash Used In
   Continuing Operations                               (15,967)         (9,649)     (1,306,006)       (122,270)
  Net Cash Provided By
   Discontinued Operations                                  --          85,959              --              --
                                                  ------------    ------------    ------------    ------------
  Net Cash Provided by (Used In)
   Investing Activities                                (15,967)         76,310      (1,306,006)       (122,270)
                                                  ------------    ------------    ------------    ------------
</TABLE>

                 See accompanying summary of accounting policies
                       and notes to financial statements.


                                      F-7
<PAGE>

                       SYSTEMS MANAGEMENT SOLUTIONS, INC.
                CONSOLIDATED STATEMENTS OF CASH FLOW (CONTINUED)
                 Six Months Ended December 31, 2004, Year Ended
                                 June 30, 2004,
                         Six Months Ended June 30, 2003,
                        and Year Ended December 31, 2002

<TABLE>
<CAPTION>
<S>                                    <C>            <C>            <C>           <C>
Cash Flows From Financing Activities
  Proceeds from shareholder loans        1,391,307      2,886,156      1,108,881       184,012
  Collections from the sale of
    preferred stock                             --             --        300,000       300,000
  Capital lease                                 --        (60,875)            --            --
  Payments on notes payable                     --        (68,023)            --            --
  Payments on shareholder loans
                                       -----------    -----------    -----------   -----------
  Net Cash Provided By
   Continuing Operations                 1,391,307      2,757,258      1,408,881       484,012
  Net Cash Provided By (Used In)
   Discontinued Operations -               (49,326)       797,914             --
                                       -----------    -----------    -----------   -----------
  Net Cash Provided By
   Financing Activities                  1,391,307      2,707,932      2,206,795       484,012
                                       -----------    -----------    -----------   -----------
Net change in cash                           3,685        (26,716)         5,980        20,444
Cash at beginning of period                  1,462         28,178         22,198         1,754
                                       -----------    -----------    -----------   -----------
Cash at end of period                  $     5,147    $     1,462    $    28,178   $    22,198
                                       ===========    ===========    ===========   ===========
Supplemental disclosure:
Income taxes paid                      $        --    $        --    $        --   $   138,926
Interest paid                                   --             --             --            --
</TABLE>

                 See accompanying summary of accounting policies
                       and notes to financial statements.


                                      F-8
<PAGE>

                       SYSTEMS MANAGEMENT SOLUTIONS, INC.
                          NOTES TO FINANCIAL STATEMENTS

NOTE 1 - SUMMARY OF ACCOUNTING POLICIES

Supreme Hospitality ("Supreme"), was incorporated in Nevada on November 10,
1997. On September 8, 2002, Supreme changed its total authorized common stock
and preferred stock to 100,000,000 and 5,000,000, respectively, both with par
values of $.0001. On November 6, 2002, Supreme changed its name from Supreme
Hospitality, Inc. to Supreme Holdings, Inc. ("SUHO"). On July 14, 2004, the name
was changed from Supreme Holdings, Inc. to Systems Management Solutions,
Inc.("SMS").

SMS acquired 100% of YCO Holdings, Inc. (YCO) on January 2, 2003 (see Note 8),
and shut down its operations on October 8, 2003. YCO filed for bankruptcy on
March 29, 2004 (see Note 14).

SMS acquired 100% of BioLynx, Inc. (BioLynx) on July 1, 2003 (see Note 9). SMS
is a holding company and has no separate operations. On April 27, 2004, BioLynx,
Inc. changed its name to Aspect Business Solutions, Inc. (ASPECT). ASPECT has
expanded its product line to include the use of its biometric admission devices
as part of an expanded security system and has coupled its time and attendance
product with a payroll function to make a more complete system. ASPECT recently
was approved to become a Licensed Reseller of certain corporate and personnel
management systems developed by Microsoft Corporation.

Change in Fiscal Year. Effective for fiscal year 2004, Supreme changed its year
end to December 31 from June 30 each year. Additionally, SMS previously changed
its year from December 31 to June 30. As a result of this change, The
Consolidated Statements of Operations, Cash Flows, and Stockholders' Equity
(Deficit) are presented for the six months ended December 31, 2004, the fiscal
year ended June 30, 2004, the six month period ended June 30, 2003 and the
fiscal year ended December 31, 2002. For comparative purposes only, the
following table presents the condensed results of operations for the six month
periods ended December 31, 2004 and 2003:

                                                                     (unaudited)
                                                      2004              2003
                                                  -----------       -----------

Revenue                                           $    68,792       $    17,225

Cost of sales                                          68,260            59,675
                                                  -----------       -----------
   Gross Margin                                           532           (42,450)
                                                  -----------       -----------
General and administrative                          1,232,844         6,474,599
                                                  -----------       -----------
   Net Operating Loss                              (1,232,312)       (6,517,049)

Interest income                                         2,452                --
Interest expense                                      (76,556)         (207,387)
Loss from discontinued operations                          --          (591,119)
                                                  -----------       -----------
         NET LOSS                                 $(1,306,416)      $(7,135,555)
                                                  ===========       ===========

Basic and diluted loss per share                  $      (.09)      $     (0.48)

Cash Equivalents. Highly liquid investments with original maturities of three
months or less are considered cash equivalents. There were no cash equivalents
as of June 30, 2004.

Revenue Recognition. ASPECT recognizes revenue from sales of hardware and
software when the earning process is complete and the risks and rewards of
ownership have transferred to the customer. Service revenues are recognized as
services are provided.

Allowance for Doubtful Accounts. SMS analyzes current accounts receivable for an
allowance for doubtful accounts based on historical bad debt, customer
credit-worthiness, the current business environment and historical experience
with the customer. The allowance includes specific reserves for accounts where
collection is deemed to be no longer probable.

Long-lived Assets. Property and equipment are stated on the basis of historical
cost less accumulated depreciation. Depreciation is provided using the
straight-line method over the estimated useful lives of the assets. Major
renewals and improvements are capitalized, while minor replacements,
maintenance, and repairs are charged to current operations.


                                      F-9
<PAGE>

Impairment losses are recorded on long-lived assets used in operations when
indicators of impairment are present and the undiscounted cash flows estimated
to be generated by those assets are less than the assets' carrying amount.
Goodwill from the purchase of YCO Holdings, Inc. in January 2003 of $5,804,418
and an investment in ASPECT of $477,473 were impaired during the six months
ended June 30, 2003. Goodwill from the purchase of ASPECT of $5,271,967 was
impaired for the year ended June 30, 2004.

Income Taxes. Income tax expense is based on reported earnings before income
taxes. Deferred income taxes reflect the impact of temporary differences between
assets and liabilities recognized for financial reporting purposes and such
amounts recognized for tax purposes, and are measured by applying enacted tax
rates in effect in years in which the differences are expected to reverse.

Basic And Diluted Earnings (Loss) Per Share. Basic and diluted earning (loss)
per share equals net loss divided by weighted average shares outstanding during
the period. Diluted earnings (loss) per share includes the impact of common
stock equivalents using the treasury stock method when the effect is dilutive.
There were no common stock equivalents during 2004 or 2003.

Use of Estimates in Financial Statement Preparation. The preparation of
financial statements in conformity with accounting principles generally accepted
in the United States of America requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities, the
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.

Stock Options and Warrants. SMS accounts for non-cash stock-based compensation
issued to non-employees in accordance with the provisions of SFAS No. 123 and
EITF No. 96-18, Accounting for Equity Investments That Are Issued to
Non-Employees for Acquiring, or in Conjunction with Selling Goods or Services.
Common stock issued to non-employees and consultants is based upon the value of
the services received or the quoted market price, whichever value is more
readily determinable. SMS accounts for stock options and warrants issued to
employees under the intrinsic value method. Under this method, SMS recognizes no
compensation expense for stock options or warrants granted when the number of
underlying shares is known and the exercise price of the option or warrant is
greater than or equal to the fair market value of the stock on the date of
grant.

Principles of consolidation. The consolidated financial statements include the
accounts of SMS and its subsidiaries. All significant intercompany transactions
have been eliminated.

Recently Issued Accounting Pronouncements. SMS does not expect the adoption of
recently issued accounting pronouncements to have a significant impact on their
financial position, results of operations or cash flow.


NOTE 2 - GOING CONCERN

SMS incurred a net loss of $1,306,417 for the six months ended December 31,
2004, and has a negative working capital of $2,532,882 as of December 31, 2004.
These conditions create an uncertainty as to SMS's ability to continue as a
going concern. Management is trying to raise additional capital through sales of
common stock as well as seeking financing from third parties. The financial
statements do not include any adjustments that might be necessary if SMS is
unable to continue as a going concern.


NOTE 3 - DEFERRED OFFERING COSTS

Deferred Offering Costs of $81,000 capitalized in prior years were expensed in
fiscal 2003 because the contemplated offering failed to materialize.


                                      F-10
<PAGE>

NOTE 4 - PROPERTY & EQUIPMENT

<TABLE>
<CAPTION>
                                                                         Depreciation
                                                                            Lives
                                                                         ------------
<S>                                                                        <C>               <C>
         Computer and other electronic equipment                           3 years           $   243,066
         Furniture, telephone equipment
                  and fixtures                                             5 years               210,142
                                                                                             -----------
                                                                                                 453,208
         Less:  accumulated depreciation                                                        (394,858)
                                                                                             -----------
                                                                                              $   58,350
                                                                                             ===========
</TABLE>

NOTE 5 - NOTES PAYABLE TO RELATED PARTIES

On April 15, 2003, SMS signed a one-year promissory note for a line of credit up
to $2,000,000. This note was later extended for an additional one-year term on
April 15, 2004. The line of credit bears 10 percent interest, is payable on
demand and it has no collateral. As of December 31, 2004, the balance owed was
$501,750.

The majority stockholder of SMS also advances money to ASPECT on an as-needed
basis. The advances are due on demand, bear no interest and have no collateral.
Imputed interest expense at 10% was added as a contribution to capital each
year. As of December 31, 2004, the balance owed was $1,709,272.

Total amounts due at December 31, 2004 are $2,211,022.

During the quarter ended September 30, 2003, loans totaling $777,473 from a
majority shareholder of Biolynx were reclassified as additional paid in capital.
The company is not obligated to repay any portion of this debt and no additional
equity was issued.

NOTE 6 - INCOME TAXES

The tax effects of temporary differences that give rise to significant portions
of the deferred tax assets and deferred tax liabilities at December 31,2004 as
follows:

                                                            December 31,
                                                                2004
                                                            -----------
       Deferred tax assets:
         Net operating loss carryforward                    $ 1,336,972
         Less:  valuation allowance                          (1,336,972)
                                                            -----------
       Net current deferred tax assets                      $         -
                                                            ===========

SMS has net operating loss carryforwards of $3,923,270 as of December 31, 2004
which expire through the year 2024.


NOTE 7 - COMMITMENTS AND CONTINGENCIES

SMS is contingently liable for a promissory note related to YCO Holdings, Inc.
The balance as of June 30, 2004 was $30,000.

YCO Holdings, Inc. was a party to an office space operating lease agreement with
an unrelated party for a term expiring on January 31, 2007. Although this
contract was subject to the bankruptcy filing, there remains the contingency
that the landlord may seek restitution from SMS for the unpaid lease payments.


                                      F-11
<PAGE>

ASPECT renewed its San Antonio office space lease for an additional five year
period beginning October 1, 2004. The minimum annual lease payments are
summarized as follows:
                                                                Lease
                  12 Months Ending                           Payments Due
                  ----------------                           ------------
                  December 31, 2005                          $   216,940
                  December 31, 2006                              283,566
                  December 31, 2007                              292,557
                  December 31, 2008                              303,623
                  December 31, 2009                              255,901
                                                             ------------
                                                             $ 1,352,587
                                                             ============

Litigation. During the year ended June 30, 2004, several terminated employees
filed a claim that SMS owes them compensation and attorney and accounting fees
totaling approximately $265,000. SMS denies all substantive allegations of the
claimants.

In July of 2004, three lawsuits were brought against SMS for damages in
connection with loans made and services performed for YCO Holdings, Inc. The
lawsuits were settled for $240,000 with weekly payments which began in November,
2004. As of December 31, 2004, the remaining balance owed on the settlement was
$127,500.

NOTE 8 - PURCHASE OF YCO

On January 2, 2003, SMS issued 1,500,003 shares of common stock to purchase the
net assets of YCO Holdings, Inc. ("YCO") and its subsidiaries. The stock was
valued at $3,000,000. Results of operations from YCO have been included in these
financial statements since YCO's acquisition in January 2003.

The acquisition was accounted for using the purchase method of accounting. A
summary of the allocation of the purchase price is as follows:

      Assets acquired
        Cash                         $     4,232
        Accounts receivable                6,715
        Property and equipment            89,454
        Deposits                          13,907
        Goodwill                       5,804,418
      Liabilities assumed
        Accounts payable                (739,595)
        Notes payable                 (2,179,131)
                                     -----------
      Total cost of purchase         $ 3,000,000
                                     ===========

Goodwill in the purchase of YCO represents the excess of the purchase price paid
of 1,500,003 shares valued at $2.00 per share, or $3,000,000 over the fair value
of the assets acquired of $114,308 net of the liabilities assumed of $2,918,726.

SMS purchased YCO to expand its business to include the accounting and tax
preparation operations of YCO.

NOTE 9 - PURCHASE OF ASPECT

On July 1, 2003, SMS issued 2,000,000 shares of common stock to purchase the net
assets of ASPECT. The stock was valued at $2,400,000. Results of operations from
ASPECT have been included in these financial statements since ASPECT's
acquisition in July 2003.


                                      F-12
<PAGE>

The acquisition was accounted for using the purchase method of accounting. A
summary of the allocation of the purchase price is as follows:

Assets acquired
         Accounts receivable, net           12,308
         Property and equipment, net       116,494
         Prepaid expenses                    4,362
         Goodwill                        5,271,965

Liabilities assumed
         Accounts payable                 (176,241)
         Lease payable                     (87,906)
         Notes payable                  (2,740,982)
                                       -----------
                                       $ 2,400,000
                                       ===========

Goodwill in the purchase of ASPECT represents the excess of the purchase price
paid of 2,000,000 shares valued at $1.20 per share, or $2,400,000 over the fair
value of the assets acquired of $133,164 net of the liabilities assumed of
$3,005,129.

SMS purchased ASPECT to expand its business to include time and attendance data,
web-enabled, biometric-based time and attendance solutions.

Prior to the acquisition, the son-in-law of the majority stockholder of SMS was
the President and COO of Biolynx (now Aspect).

NOTE 10 - EQUITY

In 2002, SMS cancelled 1,453,000 shares of common stock.

In 2002, SMS issued 1,000,000 shares of preferred stock for a $6,300,000
subscription receivable. $489,000 was paid during 2002.

On March 31, 2003, SMS agreed to exchange the 1,000,000 shares of preferred
stock issued under a previous subscription receivable for 590,000 shares of
common stock. As part of the exchange, the balance of the subscription
receivable of $5,700,000 and $5,707,898 of additional paid in capital associated
with the original subscription were canceled.

On May 30, 2003, 2,500,000 shares of common stock were issued for services to
related parties and valued at the current value of $1.50 per share.

On May 17, 2004, SMS authorized 50,000 shares of Series A Cumulative Convertible
Preferred Stock ("Series A Stock") with an aggregate face value of $5,000,000
($100 per share face value). On April 23, 2004 SMS authorized the increase of
Series A Stock to 60,000 shares with an aggregate face value of $6,000,000. Each
share is convertible, at the option of the holder, into shares of Common Stock.
In the event of conversion, the number of shares of Common Stock to be issued on
account of each share of Series A Stock shall be determined by dividing the
number of shares plus the amount of any accrued unpaid dividends thereon by
$.20, the fair value of the common stock. SMS may, at its option, at any time
commencing two years after the initial date of issuance of the Series A Stock,
redeem all or any portion of the outstanding shares of Series A Stock. The
holders of record of the Series A Stock shall be entitled to receive cumulative
dividends at a rate of ten percent per annum on the face value. Dividends that
have not been redeemed or converted shall be payable quarterly in arrears when
and as declared by the Board. Each share of Series A Stock shall be entitled to
one vote for each share of Common Stock into which the Series A Stock is
convertible.

On May 7, 2004, 100,000 shares of common stock valued at $45,000 for payment for
services as a director were issued.

During April and May 2004, 55,271 shares of Series A Cumulative Convertible
Preferred Stock were issued in exchange for $5,527,098 of debt from related
parties.


NOTE 11 - STOCK OPTIONS & WARRANTS FOR ASPECT (FORMERLY BIOLYNX)

All outstanding options and warrants of Aspect were cancelled as part of the
acquisition by SMS.


                                      F-13
<PAGE>

NOTE 12 - IMPAIRMENT

SMS reviews the carrying value of its long-lived assets annually or whenever
events or changes in circumstances indicate that the historical cost-carrying
value of an asset may no longer be appropriate. SMS assesses recoverability of
the carrying value of the asset by estimating the future net cash flows expected
to result from the asset, including eventual disposition. If the future net cash
flows are less than the carrying value of the asset, an impairment loss is
recorded equal to the difference between the asset's carrying value and fair
value.

Goodwill from the purchase of YCO Holdings, Inc. in January 2003 of $5,804,418
and an investment in ASPECT of $477,473 were impaired during the six months
ended June 30, 2003. An investment in ASPECT of $5,271,967 was impaired during
the year ended June 30, 2004.

An impairment loss of $300,000 was recorded in 2002 for the investment in
ASPECT.

NOTE 13 - RESTATEMENTS OF PREVIOUSLY REPORTED FINANCIAL STATEMENTS

There were several errors and misstatements in the originally prepared December
31, 2002 financials. See the notes below.

A summary of the restatements are as follows:

<TABLE>
<CAPTION>
                                                                      Previously        Increase
                                                                        Stated         (Decrease)      Restated
                                                                     -----------       -----------    -----------
<S>                                                                  <C>               <C>            <C>
Balance Sheet at December 31, 2002:
    Cash                                                             $    22,198       $        --    $    22,198
    Deferred offering costs                                               81,000                --         81,000
    Investment in subsidiary                                             533,270(1)       (411,000)       122,270
    Stock subscription receivable                                           -(2)           118,347        118,347
                                                                     -----------       -----------    -----------
       Total assets                                                  $   636,468       $  (292,653)   $   343,815
                                                                     ===========       ===========    ===========
    Note payable to stockholders                                     $    96,009       $        --    $    96,009
    Preferred stock                                                          100                --            100
    Common stock                                                             855                --            855
    Subscription receivable                                           (5,700,000)               --     (5,700,000)
    Additional paid in capital                                         6,301,545                --      6,301,545
    Accumulated deficit                                                  (62,041)         (292,653)      (354,694)
                                                                     -----------       -----------    -----------
       Total liabilities and equity                                  $   636,468       $  (292,653)   $   343,815
                                                                     ===========       ===========    ===========

<CAPTION>
For the year ended December 31, 2002:

                                                                      Previously        Increase
                                                                        Stated         (Decrease)      Restated
                                                                     -----------       -----------    -----------
<S>                                                                  <C>               <C>            <C>
Statement of Operations:
    Revenue                                                          $   890,267(3)    $  (890,267)   $        --

    Cost of services provided                                                 --                --             --
    General and administrative                                          (876,736)(3)       876,736             --
    Impairment                                                                --(1)       (300,000)      (300,000)
    Interest income                                                           --(2)          7,347          7,347
    Interest expense                                                    (264,012)               --       (264,012)
    Sale of stock in subsidiary                                          991,424                --        991,424
    Loss from discontinued
    Operations                                                                --(3)         13,531         13,531
                                                                     -----------       -----------    -----------
    Net income (loss)                                                $   740,943       $  (292,653)   $   448,290
                                                                     ===========       ===========    ===========
</TABLE>

Restatement notes:

(1).  An impairment loss of $300,000 for the investment in Biolynx was recorded.
      The investment in Biolynx was also overstated by $111,000.

(2).  $600,000 of the subscription receivable was reclassified as a note
      receivable. The note required monthly payments of $100,000 at 6 %.
      Principal of $481,653 and interest of $7,347 were collected in 2002. The
      balance was $118,347 at December 31, 2002.

(3).  To reflect discontinued operations.


                                      F-14
<PAGE>

NOTE 14 - DISCONTINUED OPERATIONS

Funding from a related party was terminated for YCO on October 8, 2003, shutting
down YCO operations.

YCO Holdings, Inc., filed a voluntary petition for protection from its creditors
in the United States Bankruptcy Court for the Southern District of Texas on
March 29, 2004. The first meeting of creditors in that case was held on April
30, 2004. At the creditors' meeting, the United States Trustee declared the case
to be a "no asset" case and recommended that it be closed. There have been no
subsequent filings or motions in the case.

In July 2002, SMS transferred 100% ownership of Temecula Valley Inn, Inc. to
third party.

NOTE 15 - RELATED PARTY TRANSACTIONS

The majority stockholder of SMS advances money to SMS and Aspect on an as needed
basis. See note 5.

The purchase of Aspect by SMS involved related parties. Prior to the
acquisition, the son-in-law of the majority stockholder of SMS was the President
and COO of Biolynx (now Aspect). See note 9.


                                      F-15