<PAGE>

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                  FORM 10-KSB/A

[X]               ANNUAL  REPORT   PURSUANT  TO  SECTION  13  OR  15(d)  OF  THE
                  SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED:
                  December 31, 2002

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

                         COMMISSION FILE NUMBER 0-49647

                             GRAPHCO HOLDINGS CORP.
                            F/K/A RCM INTERESTS, INC.
                ------------------------------------------------
             (Exact name of registrant as specified in its charter)

             DELAWARE                                   75-2926438
---------------------------------                -----------------------
 (State or Other Jurisdiction                      (I.R.S.Employer or
Incorporation of Organization)                     Identification No.)

                               41 UNIVERSITY DRIVE
                          NEWTOWN, PENNSYLVANIA, 18940
                                 (215) 497-9170
             ------------------------------------------------------
                  (Address and telephone number, including area
                code, of registrant's principal executive office)

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

   Securities registered pursuant to Section 12(g) of the Act: COMMON STOCK,
                                                                 $.001 PAR VALUE

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

                                 YES [ ] NO [X]

         Indicate by check mark if disclosure of delinquent  filers  pursuant to
Item 405 of Regulation S-K is not contained  herein,  and will not 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/A or any
amendment to this Form 10-KSB/A.

                                 YES [ ] NO [X]

         State issuer's revenues for its most recent fiscal year: $ 413,667


<PAGE>


         The aggregate market value of stock held by  non-affiliates  as of July
16, 2003 was  approximately  $9,326,253  (based upon the closing  sales price of
those shares reported on the National Association of Securities Dealers Bulletin
Board for that day).



      ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS

         Indicate  by check mark  whether  the Issuer  has filed  documents  and
reports  required  to be filed by Section  12, 13 or 15(d) of the  Exchange  Act
after the distribution of securities under a plan confirmed by a court.

                                YES [ ] NO [ X ]


         As of December 31, 2002,  there were 18,511,793  shares of the Issuer's
common  stock,  par value $0.001,  issued and  outstanding  of which  17,351,553
shares are in the name of our operating subsidiary,  Graphco Technologies,  Inc.
and are  intended  to be  distributed  pro rata to the  former  shareholders  of
Graphco Technologies, Inc.





                                       2

<PAGE>


                                  FORM 10-KSB/A
                             GRAPHCO HOLDINGS CORP.
                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                               PAGE
PART I                                                                                        ------
------
<S>                                                                                             <C>
Item 1.   Description of Business...........................................................    4

Item 2.   Description of Properties.........................................................    10

Item 3.   Legal Proceedings.................................................................    10

Item 4.   Submission of Matters to a Vote of Security Holders...............................    10

PART II
-------
Item 5.   Market for Registrant's Common Equity and Related Stockholder Matters.............   10

Item 6.   Management's Discussion and Analysis or Plan of Operations........................   12

Item 7.   Financial Statements..............................................................   17

Item 8.   Changes in and Disagreements With Accountants on
         Accounting and Financial Disclosure................................................   18


PART III
--------
Item 9.   Directors, Executive Officers, Promoters and Control Persons;
Compliance With Section 16(a) of the Exchange Act..........................................    19

Item 10.   Executive Compensation..........................................................    21

Item 11.   Security Ownership of Certain Beneficial Owners and Management..................    22

Item 12.   Certain Relationships and Related Transactions..................................    24

Item 13.  Exhibits and Reports on Form 8-K.................................................    25

Item 14. Controls and Procedures...........................................................    25

Signatures ................................................................................    26

Certifications ............................................................................    27-32
</TABLE>

* Page F-1 follows the signature page.



                                       3
<PAGE>


                                     PART I

         All  statements   contained  herein  that  are  not  historical  facts,
including,  but not  limited  to,  statements  regarding  anticipated  growth in
revenue,  gross  margins and  earnings,  statements  with respect to our current
business strategy, our projected sources and uses of cash, and our expectations,
are  forward-looking  statements  in  nature  and  involve a number of risks and
uncertainties.  Actual  results may differ  materially.  Among the factors  that
could cause results to differ materially are the following:

     -    the unavailability of sufficient capital to finance our business plans
          on terms satisfactory to our competitive factors;
     -    competitive factors;
     -    changes in labor,  equipment and capital costs; changes in regulations
          affecting our business;
     -    general business and economic conditions; and
     -    other  factors  described  from time to time in our reports filed with
          the Securities and Exchange Commission.


            We wish to  caution  readers  not to  place  undue  reliance  on any
forward-looking  statements.  These  statements are made pursuant to the Private
Litigation Reform Act of 1995 and, as such, speak only as of the date made.



ITEM 1.  DESCRIPTION OF BUSINESS


OVERVIEW

         Our  business  is  to  produce   state-of-the-art   biometric  security
solutions  for  government,  industry and home  automation  along with  advanced
information exchange and data management systems for government, law enforcement
and corporate security. We have developed biometric software products for secure
access, surveillance,  and authentication,  and an information exchange and data
management  software  application,   MODS,  (Multi  Organization  Data  Sharing)
specifically  designed  for  the law  enforcement  community  and the  corporate
security industry.

         Biometrics,  one of the  most  advanced  tools  available  to  security
professionals,  measures  unique  physical  characteristics  of individuals  for
authentication   purposes.  We  believe  that  speaker  recognition  and  facial
recognition,  our current offerings,  are the most user friendly, cost effective
and widely  accepted  biometrics  available  today.  Our two biometric  software
products are VOICEPASS(R),  speaker recognition, and FRA(TM), Facial Recognition
Application.  We believe biometric software  applications  represent the new and
next generation security products.

         Founded in September 1995, Graphco Technologies, Inc.("Graphco"), the
predecessor of our operating subsidiary, initially provided engineering and


                                       4
<PAGE>

consulting services to the semiconductor  industry.  Graphco developed an expert
system,  a  knowledge  management  and  training  system,  specifically  for the
semiconductor   industry.   In  1996,   Graphco  began  development  of  speaker
recognition  biometric for secure access.  In January 1998,  Graphco  focused on
becoming a  technology  company  continuing  to develop its  existing  knowledge
management system and voice biometric technology.

         During  1999 and  2000,  our  operating  subsidiary  Graphco  continued
technology and product development, and sought to establish product branding and
markets for our  technologies.  Beginning  in 2000,  Graphco  focused  solely on
developing and marketing  biometric software products as well as law enforcement
and corporate security data management software applications. During this period
Graphco suspended development of our expert system technology.

         In 1999,  Graphco  licensed  its  expert  system to  OneCare,  Inc.,  a
software company that produces product support  applications for  manufacturing,
in exchange  for a 37 % equity  interest.  (See Note 2,  Summary of  Significant
accounting policies: Investments at equity, to the Audited Financial Statements)

         In 2000,  Graphco  acquired a 40% equity  interest  in  Advanced  Logic
Systems, Inc.,  (advancedlogicsys.com),  an Internet technology developer.  (See
Note 2, Summary of Significant  accounting  policies:  Investments at equity, to
the Audited Financial Statements)

         In 2000,  Graphco  acquired its first facial  biometric  technology and
first law enforcement  data management  software  application  from GTE Corp. In
addition,  Graphco  acquired from NASA's Jet Propulsion  Laboratory  ("JPL") and
California Institute of Technology, a technology which management believes to be
unique, called DIGITAL PERSONNEL,  a technology for synthesizing realistic video
sequences   of  a  person   speaking,   which   makes  it   possible  to  create
photo-realistic  animated humans for e-commerce and e support applications,  and
other applications. In 2002 Graphco licensed the DIGITAL PERSONNEL technology to
NGM Tec, Inc. ("NGM")  (ngmtec.com),  for $2,000,000 plus a 3% royalty and NGM's
agreement to make payments totaling $250,000,  with respect to the completion of
the development of the technology.  Cristian Ivanescu, our President and CEO and
our Secretary,  Edward Kramer are directors of NGM. Although,  NGM paid $328,000
(net of expenses) to us in 2002, it currently  owes us  approximately  $600,000.
NGM's  ability to make such  payments  is  uncertain.  Although we have begun to
renegotiate  the terms of the License  Agreement with NGM, we have not taken any
actions to void the license agreement or obtain another licensee.


MERGER

     On November  21,  2002,  we entered  into a Merger  Agreement  with Graphco
Technologies,  Inc. and our newly formed wholly owned  subsidiary RCM Interests,
Inc.  Acquisition Corp. The Merger Agreement can be accessed at www.sec.gov.  as
an attachment to our December 11, 2002 8-K filing.

     Upon the closing of the Merger on December 13, 2002, Graphco  Technologies,
Inc. merged with and into RCM Interests, Inc. Acquisition Corp., pursuant to the
terms  of the  Merger  Agreement.  On  January  15,  2003,  RCM  Interest,  Inc.
Acquisition  Corp.  filed  an  Amendment  to its  Certificate  of  Incorporation
changing its name to Graphco  Technologies,  Inc.  Upon the closing,  all of the


                                       5
<PAGE>

outstanding  shares of Common  Stock of Graphco  Technologies,  Inc.  issued and
outstanding  on the closing date, by virtue of the Merger and without any action
on the part of the holders thereof, were automatically converted into 17,351,553
shares of our Common  Stock  which were  issued to Graphco  Technologies,  Inc.,
which intends to distribute said shares to its Stockholders.

         In  connection  with the Merger  Transaction,  Graphco  entered  into a
redemption   transaction  with  Ronald  C.  Morgan,  wherein  Ronald  C.  Morgan
cancelled,  at the Closing,  9,562,269  shares of Common Stock of RCM Interests,
Inc.  which he owned.  In  consideration  for his  cancellation  of these shares
Graphco  Technologies,  Inc.,  agreed  to pay to  Ronald  C.  Morgan  the sum of
$150,000  of which  $75,000  was paid at the closing and the balance of which is
payable  pursuant to a 10%  promissory  note which was due on June 12, 2003. The
parties have orally agreed to the extension of due date of the  promissory  note
until September 12, 2003 and are in the process of setting forth their agreement
in writing.  The promissory note is secured by 1,416,573  shares of Common Stock
of  the  Company  held  by  the  Chloe  Kristian  Ivanescu  Trust,  a  principal
shareholder of the Company, the trustees of which are Ruth Ivanescu, the wife of
Cristian  Ivanescu,  our  President,  CEO and  Chairman and Edward  Kramer,  our
Secretary and one of our Directors.

         On May 15, 2003, RCM Interest, Inc. changed its name to Graphco
Holdings Corp.

         Upon the closing of the Merger on December 13, 2002,  Ronald C. Morgan,
our sole officer and director prior to the closing, resigned and was replaced by
the officers and directors of Graphco Technologies, Inc.


DESCRIPTION OF BUSINESS

         We were  incorporated  under the laws of Delaware in October 2000.  The
following  discussion and disclosure  represents our intended  business plan and
our intent with respect to the future operations of our business.


PROPOSED BUSINESS

         In order to achieve a leadership position in biometric  authentication,
access control, surveillance, and secure information management technologies and
solutions, we are committed to deploying human and capital resources to research
and development.

         We will  continue to foster  relationships  with  companies  possessing
complementary technologies and competencies, such as Raytheon for IT development
and deployment,  Level (3) Communications for high-speed communications,  Aether
Systems  and Packet  Video for mobile  (wireless)  application  integration.  We
intend  to  continue  to  maintain  strategic   partnerships  with  core  facial
recognition engine developers such as Visionics, Viisage, and AcSys Biometrics.

         We are  developing,  or  outsourcing  to  our  strategic  partners  the
development  of post-sale  support  tools such as user  documentation,  training
packages  for  end-users  and  channel   partners,   installation   manuals  and
maintenance tools.

                                       6
<PAGE>

         It is our intention to provide technology and software  applications to
our  customers  rather  than act as  integrator  or a  manufacturer  of security
devices.  We intend to generate revenue though software  licenses and royalties,
and realize  recurring  revenue through annual  licensing,  software support and
maintenance agreements.

         We intend to continue to launch our products to their targeted markets.
We focused  VOICEPASS(R)  and FRA(TM)  introduction to the industrial  security,
government and luxury real estate markets,  and have begun to build a backlog of
orders.  We demonstrated  the viability of our  VOICEPASS(R) and FRA(TM) product
lines via installation of pilot programs at Dominion Power and Italian DoD.

         We plan to begin  deploying our MODS product to customers in the fourth
quarter of 2003. We intend to be the first to market a product like MODS, a full
featured,  secured,  collaborative  case  management  system for  local,  state,
national, and international law enforcement agencies.

         Our plan is to utilize  strategic  partners to distribute,  install and
provide  life cycle  support for our  products.  We believe  that an  aggressive
strategy to grow our revenue is to augment  growth  with  strategic  partners to
distribute  our  technology and software  applications  to end-users.  Strategic
partners are OEM's,  integrators,  distributors,  value added re-sellers (VARS),
and security product manufacturers.

         We intend to expand  our  strategic  partnerships  in order to  provide
distribution  in existing  and new  markets.  Our  targeted  strategic  partners
include ADT, Level (3) Communications Inc., Informix Software Ltd. (IBM-UK), EDS
Ltd. (UK),  Phambili  LLC(South Africa),  Chun Shin Electronics,  Inc., NGM Tec,
Inc., Advanced Technology Corporation (ATC), Advanced Communication Technologies
(ACT) and PSComm.  We have and will  continue to  establish  relationships  with
government agencies, corporate leaders and law enforcement.


PROPOSED TARGETED CUSTOMER BASE

         Our product can be applied in various  customer markets for two primary
applications:  controlled access and surveillance. We have chosen to concentrate
our controlled  access product  development  and marketing in two major markets:
real estate (both  commercial  and  consumer) and  corporate  security,  and for
surveillance  three major  markets:  real estate,  retail and  commercial/public
large venue.  Both the  surveillance  and  controlled  access  applications  are
pertinent to an entirely new venue, airports.

         In the wake of the devastating  terrorist  attacks in New York City and
Washington, D.C. on September 11, 2001, we believe that the demand for biometric
identification   and  surveillance   products  from  law  enforcement   agencies
throughout  the  United  States  will  significantly  increase.  This  increased
potential demand is enhanced due to the spread and increased risks of terrorism,
organized crime, drug trafficking, traditional crime as well as white-collar and
"net-based" crime such as e-commerce fraud.

                                       7
<PAGE>

         The  Tampa  Police  Department,  FBI  and  other  various  governmental
agencies  deployed  our  facial  recognition  technology  at the  2001  National
Football  League  Championship  football  game held at Raymond  James Stadium in
Tampa, Fl. In 2002, the West Valley,  UT police  department  deployed our facial
recognition  technology at the West Valley E-Center, the site of the Olympic ice
hockey games. These high,  visibility pilot projects have generated  significant
interest  from  managers  of large venue  complexes  across the country and have
offered us a means of rapidly expanding our market penetration.


SALES AND MARKETING STRATEGY

         We currently attempt to market directly to end-users.  In order to grow
revenue more  aggressively,  our emphasis  will be on selling  directly to OEMs,
system  integrators  and  companies  with  whom  we  have a  strategic  business
relationship.  Additionally,  we intend to develop  relationships with strategic
partners who can provide access to customers in specific market segments.


Direct Sales

         Our  direct  sales  person  is  responsible  for  developing   business
opportunities in particular  markets,  which have substantial and immediate uses
for our  solutions  and is  responsible  for new business  development,  account
retention and growth,  and  developing  and managing  relations  with  strategic
partners and companies.

Indirect Sales

         We plan to rely upon  partners  with  expertise in  different  industry
segments  to reach a greater  number of  potential  customers  than  utilizing a
direct sales and marketing approach. We plan to strengthen our market reach with
a solid commitment to these relationships and with investment in the appropriate
in-house  channel  and  alliance  management  personnel.  Central  to our  sales
strategy is leveraging and expanding our  relationships  with  companies,  which
provide us with indirect  sales  opportunities.  Currently,  the  integrators we
intend to associate  with include Chun Shin (Korea),  Informix/IBM  (UK, EU, ME,
and South Africa), Veltek International, EDS, and NGM-TEC, Inc.

Marketing

         Our marketing strategy  emphasizes focus. As a small company addressing
large  segments and customers,  we must focus on specific  products for specific
market segments. More specifically,  we must identify and partner with companies
who have  established  credibility in our target  segments and who can integrate
and deliver "whole products" or solutions to the end user.

         We  focus  on the  kind  of  product  quality  that  produces  superior
reference  accounts that can generate  additional  sales.  We must always have a
relatively  heavy  support  component  to  our  market  segments  because  these
referrals  and  "word-of-mouth"  testimonials  are  critical  to  our  continued
success.



                                       8
<PAGE>

         We have  deployed our products to high profile  venues,  including  the
2001  National  Football  League  championship  game at Raymond James Stadium in
Tampa,  FL and the  E-center in Salt Lake City,  Utah,  the hockey arena for the
Olympic Games.


INTELLECTUAL PROPERTY

         G-TEC(R)is our registered trademark.

         We have two software  copyrights in relation to  EXPERTNET(TM)  and one
software copyright on VOICEPASS(R). In addition,  EXPERTNET(TM) and VOICEPASS(R)
are registered trademarks owned by us.

         We hold a license to one  pending  patent on THE  BASTILLE(R)  security
model from  Verizon  Corporation  (successor  to GTE Corp.).  In  addition,  The
BASTILLE(R),  INTRAPOL(TM) and  FACETRAC(TM) are registered  trademarks owned by
our company.

         Pursuant to our License  Agreement  with  NGM-Tec,  we retain a limited
license on two patents on the DIGITAL PERSONNEL algorithm.

         We also have  technologies  and  know-how  that are  protected as trade
secrets,  rather than as patents or copyrights.  These technologies are utilized
in connection with FRA(TM) and MODS.


EMPLOYEES

         As of the date of this  Report,  we employed a total of six  employees.
Five of our employees work at our Newtown, PA office and one employee works from
his home office.

         Since June 30, 2001 we have only been able to partially pay current and
past  employees.  Through  June  30,  2003,  excluding  amounts  not paid to our
Chairman,  President  and  CEO as  discussed  in Item  10,  unpaid  wages  total
approximately $950,000.


PUBLIC INFORMATION

         We electronically file with the Securities and Exchange Commission (the
"SEC")  all of our  reports,  including,  but not  limited  to,  our  annual and
quarterly  reports.  The SEC maintains an Internet site which  contains all such
reports  and  other   information   with   respect  to  us  on  it's  web  site,
http://www.sec.gov.  Additional  information on us may be obtained by contacting
us at our executive offices.


                                       9
<PAGE>



ITEM 2. PROPERTIES

         Our  principal  office is located at 41  University  Drive,  Suite 205,
Newtown, Pennsylvania 18940 where we lease approximately 6,800 sq. ft. Our lease
expires  in July  2004.  We  believe  our  current  space  is  adequate  for the
foreseeable  future.  The Newtown  office  consists of  development,  operating,
marketing and administration staff. We currently sublet approximately 935 sq. ft
of our office space to NGM Tec, Inc.


ITEM 3. LEGAL PROCEEDINGS

         Set forth below is a  description  of material  pending  litigation  to
which we are a party:

         Angela Chen Sabella, one of our stockholders, has obtained a judgment
against Graphco Technologies, Inc. in the Supreme Court of the State of New
York, County of New York in the sum of approximately $1,376,000, plus any
applicable interest since the date of the Judgment. Ms. Sabella has not taken
any recent actions to enforce this Judgment. We have had negotiations with Ms.
Sabella to forebear from levying upon our assets. However, there can be no
assurance that an agreement will be reached.

         We are a party to various  other claims and lawsuits  filed against the
Company.  Although,  we believe that the  resolutions  of these matters will not
materially affect our consolidated financial positions, results of operations or
cash flows in successive years, there can be no assurance that the resolution of
said claims or lawsuits  will not have a material  effect upon our  consolidated
results of operations or financial condition.


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

         Certain of our stockholders owning more than fifty percent (50%) of our
total voting shares,  have given their written  consent to amend the Certificate
of  Incorporation  to change the name our from RCM  Interests,  Inc.  to Graphco
Holdings  Corp.  or a  similar  name  approved  by the Board of  Directors.  The
Amendment  to our  Certificate  of  Incorporation,  changing our name to Graphco
Holdings  Corp.,  was filed with the  Department of State of Delaware and became
effective on May 15, 2003.

         No other matters were submitted to a vote of our stockholders as of the
date hereof.


                                     PART II

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

         (a) Market Information

         Our common stock,  par value $.001 per share (the "Common  Stock"),  is
traded in the over-the-counter market. The Common Stock is available for


                                       10
<PAGE>

quotation  on the  NASD  Over the  Counter  Bulletin  Board.  Our  Common  Stock
commenced  quotation on the NASD Over the Counter  Bulletin  Board in the fourth
quarter of the fiscal year ended  December 31, 2002. Our trading symbol is GHCP.
The  following  table sets forth the high and low bid  quotation (as reported by
the OTC  Bulletin  Board)  for the Common  Stock for the  fourth  quarter of the
fiscal year ended December 31, 2002:

                                                         High           Low
                                                         ----           ---
         Fiscal Year Ended December 31, 2002

                  Fourth Quarter                         $3.15          $.05


         (b) Holders

         As of the date of this Report,  there were approximately  1,219 holders
of  record  of our  common  stock,  of which  232 are  shareholders  of  Graphco
Technologies,  Inc.  which are the  beneficial  owners of  17,351,553  shares of
common  stock.  The  number of holders  does not  include  stockholders  who are
holding our Common Stock through nominees or in street name.


         (c) Dividends

         We have not paid any cash  dividends on our Common Stock.  We presently
intend to retain future earnings,  if any, to finance future  investments and do
not anticipate that any cash dividends will be paid in the  foreseeable  future.
Future  dividend  policy  will  depend on our  earnings,  capital  requirements,
investment plans, financial condition and other relevant factors.


         (d) Recent Sales of Unregistered Securities


         During  2001,  we sold  120,000  shares of our common  stock  through a
private  placement  and received  gross  proceeds of $300,000.  In addition,  we
issued  19,452  shares  of  common  stock  with  an  aggregate   fair  value  of
approximately  $49,000 as  dividends  to holders of 112,251  Series A  Preferred
shares in exchange for their  agreement to waive their right to cumulative  cash
dividends on these shares through December 31, 2001.

         Commencing  in September  2001,  we sold an aggregate of  $2,620,000 in
convertible  notes to various  investors  and issued  warrants  to  purchase  an
aggregate  of 939,166  shares of our common  stock to the  investors.  We issued
warrants having a value of approximately  $299,000 to purchase 202,014 shares of
our Common Stock, as consideration  for services rendered in connection with the
offering of the  convertible  notes.  In October 2001, in  consideration  of the
holder of convertible  notes agreeing to extend the due dates for the payment of
the  convertible  notes,  we issued  warrants to purchase  200,000 shares of our
common  stock at a price of $1.50 per share that expire in September  2006,  and
having a value of approximately $121,000.



                                       11
<PAGE>

         In 2001,  we issued  warrants to purchase  40,000  shares of our common
stock to a holder of convertible  notes in the principal amount of $1,394,908 in
connection with  negotiations for the extension of the due date of the note. The
warrants  are  exercisable  at prices  ranging  from  $2.00 to $2.50 and  expire
through  October 2004. We valued these warrants at  approximately  $19,000 based
upon the minimum value option - pricing model.

         In 2002, we commenced an offering of up to 5,000,000 shares of Series B
Convertible  Preferred Stock of Graphco  Technologies,  Inc. at a price of $2.00
per Share.  On November 1, 2002, the price per share was reduced to $1.00. As of
December 31, 2002,  we sold  469,000  Series B Preferred  Stock and received not
proceeds  of  approximately  $363,000.  The  Series  "B"  Preferred  Stock  were
automatically converted into shares of our Common Stock at the rate of one share
of Common Stock for each share of Series "B" Preferred Stock upon the closing of
the merger of Graphco  Technologies,  Inc. with RCM  Interests,  Inc.  which was
ratified by the shareholders of Graphco  Technologies Inc. on March 19, 2003. As
of the date of this  filing,  we have sold an  aggregate of $554,500 of Series B
Preferred Stock.

         During our fiscal year ended  December 31, 2002 and shortly  before the
Merger we issued  28,000  shares of common stock to the holders of warrants upon
exercise of said warrants, which were exercised at a price of $1.00 per share.

         In 2002, we issued  warrants to purchase  468,160  shares of our common
stock as  consideration  for  holders of certain  of our convertible  notes and
valued  those  warrants at  approximately  $189,000  based on the minimum  value
option - pricing value.

         During  2002,  we issued  250,000  shares of Common Stock having a fair
value of $250,000 for  services.  In addition,  we also issued  warrants for the
purchase of an  aggregate  of  1,122,000  shares of our common  stock at various
prices for  services  having a value of  approximately  $1,653,000  based on the
minimum value option - pricing model.


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

         The following  discussion  and analysis  should be read in  conjunction
with our financial  statements and the notes related thereto.  The discussion of
results,  causes and trends  should not be construed to infer  conclusions  that
such results, causes or trends necessarily will continue in the future.

         Overview

         Graphco  Holdings  Corp.,  Inc.  ("GHC") is a holding  company that was
formerly known as RCM Interests, Inc. GHC emerged from Chapter 11 of Title 11 of
the United States Code on July 31, 2000.  GHC was a  publicly-held  company that
had no significant assets,  liabilities or operating activities from the date of
its emergence  from  bankruptcy  until December 13, 2002, the date of the merger
described below, and as of December 31, 2002. During that period, it was seeking
a suitable reverse acquisition candidate through acquisition,  merger or another
suitable business  combination  method and,  accordingly,  it was a "development
stage enterprise" for financial accounting purposes.

         Graphco Technologies, Inc. is a New Jersey corporation that is referred
to herein  together with its  subsidiaries as "G-TEC." G-TEC has been developing
since,  effectively,   January  1,  1998,  state-of-the-art  biometric  security
solutions  for  government,  industry and home  automation  along with  advanced
information exchange and data management systems for government, law enforcement
and corporate  security.  G-TEC has developed  biometric  software  products for
secure access, surveillance and authentication,  and an information exchange and
data management software application specifically designed for the law


                                       12
<PAGE>

enforcement  community and the corporate security industry.  Biometrics measures
unique  physical  characteristics  of individuals for  authentication  purposes.
G-TEC's two biometric software products are VOICEPASS(R) for speaker recognition
and FRA(TM) for facial recognition. Management believes that speaker recognition
and facial  recognition  are the most user  friendly,  cost effective and widely
accepted  biometrics  currently  available.  G-TEC expects that it will generate
revenues  primarily  through  licenses  or  other  contracts  for the use of its
products over specified periods.

         G-TEC had conducted and discontinued certain unrelated operations prior
to the  commencement  on January  1, 1998 of the  development  stage  activities
described above.  G-TEC generated  revenues  primarily from a license  agreement
that  has been  effectively  terminated  and a  limited  number  of sales of its
products  during 2002. It generated  revenues  primarily  from a contract with a
residential  community that used an application of its technologies during 2001.
G-TEC had not generated any significant  revenues from contracts for the sale or
use of its  primary  products  on a recurring  basis and,  accordingly,  it also
remained  in the  development  stage for  financial  accounting  purposes  as of
December 13, 2002, the date of the merger  described  below,  and as of December
31, 2002.


         As of December  13,  2002,  GHC had  10,500,500  shares of common stock
outstanding and G-TEC had 17,351,553 shares of common stock outstanding. On that
date,  GHC,  RCM  Interests,  Inc.  Acquisition  Corp.  ("Acquisition  Sub"),  a
wholly-owned  subsidiary of GHC, and G-TEC  consummated  a merger  whereby G-TEC
merged  with and into  Acquisition  Sub and all of the shares of G-TEC's  common
stock then  outstanding  were  automatically  converted  into an equal number of
shares of common stock of GHC. In addition,  pursuant to the merger agreement, a
stockholder  of GHC agreed to cancel  9,562,269  shares of his GHC common stock.
G-TEC agreed to pay total  consideration of $150,000 for such  cancellation,  of
which  $75,000  was paid in  December  2002 and  $75,000  was paid  through  the
issuance of a 10% note that was due on June 12, 2003.

         Upon  consummation of the merger,  GHC had 18,289,793  shares of common
stock  outstanding  of  which  17,351,553  shares  (95%)  were  held  by  former
stockholders   of  G-TEC  and  938,240  shares  (5%)  were  held  by  pre-merger
stockholders of GHC. Accordingly,  although GHC was the legal acquirer and G-TEC
was the legal  acquiree,  the business  combination  has been accounted for as a
reverse acquisition,  whereby, for accounting purposes, G-TEC was the accounting
acquirer and GHC was the  accounting  acquiree.  Accordingly,  the  accompanying
consolidated  financial  statements  reflect  the  accounts  of  G-TEC  and  its
subsidiaries  prior to December  13,  2002.  Since GHC was an  inactive  "shell"
company, its assets and liabilities,  which were not material,  were recorded at
their  historical  carrying  values as of December 13, 2002,  and its results of
operations  have  been  included  in  the  accompanying  consolidated  financial
statements subsequent to that date. Pro forma results of operations assuming GHC
had been  acquired as of January 1, 2001 have not been  presented  because  they
would not differ materially from the historical results of operations.

         As used herein,  the Company refers to G-TEC and its subsidiaries prior
to the merger and GHC,  G-TEC and GHC's  other  subsidiaries  subsequent  to the
merger.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES:

Use of Estimates:

                                       13
<PAGE>

       The preparation of the  consolidated  financial  statements in conformity
with accounting  principles  generally  accepted in the United States of America
requires  management  to make  estimates  and  assumptions  that affect  certain
reported amounts and disclosures.  Accordingly, actual results could differ from
those estimates.

Fair Value of Equity Instruments:
     We estimate the fair value of warrants  issued to non  employees  for goods
and services  using an  option-pricing  model (the minimum value  option-pricing
model) that meets the criteria  set forth in  Statement of Financial  Accounting
Standards No. 123, " Accounting for Stock-Based  Compensation"  ("SFAS 123") and
common stock using the estimated  market value of our stock.  In accordance with
SFAS 123, all other issuances of common stock, stock options,  warrants or other
equity  instruments to employees and nonemployees as consideration  for goods or
services  received  by us are  accounted  for  based  on the  fair  value of the
consideration received or the fair value of the equity instrument,  whichever is
more  readily  measurable.  Such fair value is measured at an  appropriate  date
pursuant to the  guidance in the  consensus  reached for EITF Issue No.  96-18 (
generally,  the earlier of the date the other party becomes committed to provide
goods or services or the date the  performance  by the other party is  complete)
and capitalized or expensed as if we had paid cash for the goods or services.

Valuation of Deferred Tax Assets:
        We regularly  evaluate our ability to recover the reported amount of our
deferred income taxes considering several factors, including our estimate of the
likelihood  that we will generate  sufficient  taxable income in future years in
which temporary  differences reverse. Due to the uncertainties related to, among
other  things,  the extent and timing of future  taxable  income,  we offset our
deferred assets by an equivalent valuation as of December 31, 2002 and 2001.

Valuation of Long-lived Assets:
       We assess the  recoverability  of long-lived assets and intangible assets
whenever we  determine  that events or changes in  circumstances  indicate  that
their carrying amount may not be recoverable.  Our assessment is primarily based
upon our estimate of future cash flows associated with these assets.  Impairment
losses are then measured by comparing the fair value of assets to their carrying
value. We recorded charges for impaired  property and equipment of approximately
$151,000  and  $64,00 in 2002 and 2001,  respectively,  in  connection  with the
abandonment of office space and the disposal of related  property and equipment.
Such determination resulted in non-cash charges to income during 2002 and 2001.


RESULTS OF OPERATIONS:

Restatement of our financial statements related to issuance of warrants:
       Subsequent  to  the  original  issuance  of  our  consolidated  financial
statements  as of December 31, 2002 and for the year then ended,  we  determined
that we had not accounted  for the issuance of the warrants to purchase  622,000
shares of common stock for services rendered exercisable at $1.00 per share that
had a fair  market  value of  $1,244,000.  The  accompanying  2002  consolidated
financial statements have been restated to include a charge to selling,  general
and  administrative  expenses and an increase in additional  paid-in capital for
that amount. As a result of this correction, our net loss and net loss per share
increased  from  $5,972,104  and  $.34  per  share  as  originally  reported  to
$7,216,104 and $.41 per share as restated.


Years ended  December  31,  2002 as  compared to December  31, 2001 and from the
period January 1, 1998 (date of inception) to December 31, 2002.

The Company generated non-recurring revenues of approximately $414,000, $746,000
and  $1,533,000  for the years ended  December  31, 2002 and 2001 and the period
from January 1, 1998 (date of inception  to December  31,  2002),  respectively.
(See Note 2 to the Audited Financial Statements)

Selling,  general and  administrative  expenses for the years ended December 31,
2002,  and 2001 and the  period  from  January 1, 1998 ( date of  inception)  to
December  31, 2002 were  approximately  $5,361,000  $4,085,000  and  $14,748,000
respectively.  Selling,  general  and  administrative  expenses  consists of the
following;   (i)  salaries,  (ii)  professional  fees,  (iii)  depreciation  and
amortization of property and equipment and (iv) rent expense.

Research and development expenses for the years ended December 31, 2002 and 2001
and the period from  January 1, 1998 ( date of  inception)  to December 31, 2002
were approximately $394,000, $841,000 and $4,735,000, respectively. Research and
development expenses primarily consists of payroll.

                                       14
<PAGE>

Net loss from  operations for the years ended December 31, 2002 and 2001 and the
period  from  January 1, 1998 (date of  inception)  to  December  31,  2002 were
approximately $5,350,000, $4,707,000 and $18,663,000, respectively.


Interest  expense for the years ended  December 31, 2002 and 2001 and the period
from January 1, 1998 (date of inception) to December 31, 2002 was  approximately
$1,888,000, $1,603,000 and $3,491,000,  respectively. Interest expense primarily
consists of  amortization  relating to debt discount and charges for  beneficial
conversion rights which is a non-cash charge.


Net loss for the years  ended  December  31,  2002 and 2001 and the period  from
January 1, 1998 (date of  inception)  to  December  31,  2002 was  approximately
$7,216,000,  $6,293,000 and  $22,898,000,  respectively.  The reason for the net
losses is explained above.

Liquidity and Capital Resources:

Graphco  Holdings Corp.  consolidated  financial  statements  have been prepared
assuming that the Company will continue as a going concern.  The Company has not
generated  any revenue  from its  products  on a  recurring  basis and is in its
development stage. As shown in the consolidated financial statements the Company
has incurred a cumulative loss of approximately $23,766,000 through December 31,
2002 and had a working  capital  deficiency of  approximately  $6,175,000  and a
stockholders'  deficiency of $6,004,000.  It also had convertible  notes payable
with principal balances of approximately  $2,575,000 that were in default. These
matters raise  substantial  doubt about the  Company's  ability to continue as a
going concern.

Management  believes  that the  Company  will  continue  to incur net losses and
negative cash flows from operating  activities  through at least the year ending
December  31,  2003.  In the  absence  of  operating  profits  and  cash  flows,
management  believes  the Company will need to limit its  expenditures  , obtain
additional debt or equity  financing,  obtain agreements with creditors and note
holders for the conversion of outstanding  obligations  into preferred or common
stock and/or obtain  agreements with creditors for the forbearance  with respect
to past due obligations. Management plans to continue to negotiate the extension
of the due dates for or the  conversion  of the Company's  obligations  and seek
additional  debt or equity  financing  through  private  placements  or by other
means. It will also continue to seek strategic partners for the Company that can
provide it with working capital.  Management also plans to limit our development
activities where necessary.  However,  management cannot assure that the Company
will be able to obtain the  additional  capital  resources  that will enable the
Company to sustain its operations and planned development  activities through at
lease  December 31, 2003. If the Company  cannot  generate  sufficient  revenues
and/or obtain sufficient additional financing,  if necessary,  by that date, the
Company may be forced  thereafter to restructure  its operations  merge or sell,
file for reorganization or entirely cease its operations.


                                       15
<PAGE>

During 2001, the Company sold convertible notes and warrants to purchase 939,166
shares of common stock through a private  placement and received  gross proceeds
of $2,620,000. The Company recorded discounts for the fair value of the warrants
and beneficial conversion rights issued with these notes totaling  approximately
$2,338,000  of which  approximately  $611,000  and  $725,000  were  amortized to
interest  expense in 2002 and 2001,  respectively.  The notes bear  interest  at
annual rates ranging from 8% to 12%. At December 31, 2002, the principal balance
and the  interest  on the  notes  had been  scheduled  to be paid,  based on the
original  provisions  in the related loan  agreements  at various  dates through
September  30,  2002.  As  of  December  31,  2002  the  remaining   outstanding
convertible notes payable totaling approximately  $2,575,000 were not repaid and
are in default. (See Note 5 to The Audited financial Statements)

CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2002 AND 2001:

Year ended December 31, 2002

For the year ended  December  31,  2002,  we utilized  cash from  operations  of
approximately $615,000.  This was attributable to the following;  (1) a net loss
of  approximately  $7,216,000,   which  was  offset  by,  (2)  depreciation  and
amortization  expense  of  approximately   $546,000,(3)  write-off  of  impaired
property and equipment of  approximately  $151,000,  (4) note payable issued for
services  $129,000,  (5) common  stock  issued  for  services  of  approximately
$250,000,  (6) charges  relating to options and warrants issued to employees and
directors  totaling  approximately  $2,130,000,  (7)  amortization  of  unearned
compensation totaling $465,000, (8) amortization of deferred loan costs and debt
discount  totaling  $1,371,000 and (9) increase in accounts  payable and accrued
expenses totaling $1,473,000.

We generated cash from investing activities of approximately  $224,000. This was
attributable to the repayments of advances from stockholders.

We generated cash from financing activities of approximately  $316,000. This was
attributable  to the  following;  (1) net  proceeds  received  from  the sale of
469,000 shares of Series B preferred stock totaling approximately  $363,000, and
(2)  exercise of warrants  for  $28,000  less (3) a $75,000  payment to a former
stockholder relating to the reverse acquisition.


YEAR ENDED DECEMBER 31, 2001

For the year ended  December  31,  2001,  we utilized  cash from  operations  of
approximately $2,912,000.  This was attributable primarily to the following; (1)
a net loss of  approximately  $6,293,000,  which was offset by, (2) depreciation
and  amortization  expense of approximately  $565,000,(3)  write-off of impaired
property and equipment of approximately $64,000, (4) charges relating to options
and warrants issued to employees and directors totaling approximately  $170,000,
(5) amortization of unearned compensation totaling  approximately  $183,000, (6)
amortization  of  deferred  loan  costs  debt  discount  totaling  approximately
$1,437,000 and (7) increase in accounts  payable and accrued  expenses  totaling
approximately $914,000.

                                       16
<PAGE>

We generated cash from investing activities of approximately  $34,000.  This was
attributable  to the  following;  (1) proceeds  from  maturities  of  marketable
securities  of $56,000 less (2) payments for purchases of property and equipment
of $21,000.

We  generated  cash  primarily  from  financing   activities  of   approximately
$2,567,000.  This was attributable to the following;  (1) net proceeds  received
from the sale of 120,000 shares of common stock totaling $300,000,  (2) proceeds
from the sales of convertible  notes and warrants totaling  $2,620,000,  and (3)
repayment of convertible  notes payable totaling  $120,000 less (4) payments for
and warrants issued  relating to the issuance of the convertible  notes totaling
$213,000.


ITEM 7.  FINANCIAL STATEMENTS AND INDEX TO FINANCIAL DATA

         Set  forth is a list of our  consolidated  financial  statements  being
furnished in this Annual Report on Form 10-KSB/A pursuant to the instructions to
Item 7. The financial  statements as of and for the periods ending  December 31,
2002 and 2001 are included following the signature pages of this report.


                          INDEX TO FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
<S>     <C>                                                                            <C>

Financial Statements                                                                Location*

Report of Independent Public Accountants                                                  F-2

               Consolidated Balance Sheets
                    December 31, 2002 and 2001                                            F-3

               Consolidated Statements of Operations
                    Years Ended December 31, 2002 and 2001 And
                    Period from January 1, 1998 (Date of Inception)
                    To December 31, 2002                                                  F-4

               Consolidated Statements of Changes in Stockholders'
               Deficiency
                    Years Ended December 31, 2002 and 2001 And
                    Period from January 1, 1998 (Date of Inception)
                    To December 31, 2002                                                F5-F7

               Consolidated Statements of Cash Flows
                    Years Ended December 31, 2002 and 2001 And
                    Period from January 1, 1998 (Date of Inception)
                    To December 31, 2002                                                F8-F9

               Notes To Consolidated Financial Statements                             F10-F27

* Page F-1 follows the signature page to this Annual Report on Form 10-KSB/A.
</TABLE>

                                       17
<PAGE>


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

         On March 10, 2003,  we engaged J.H.  Cohn LLP ("J.H.  Cohn") as our new
independent  accountants  replacing  our  former  principal  accountants,   S.W.
Hatfield, CPA, ("S. W. Hatfield").

          S. W. Hatfield's report on the Registrant's  financial  statements for
the past two years  contained no adverse  opinion or disclaimer of opinion,  and
was not  qualified  or modified  as to  uncertainty,  audit scope or  accounting
principles  except that S. W.  Hatfield's  Independent  Auditor's  Report  dated
February 6, 2002,  concluded  that  substantial  doubts  were  raised  about the
Registrant's  ability  to  continue  as a going  concern  as a result of certain
conditions  with  respect to the  Registrant's  having no viable  operations  or
significant   assets  and  that  it  may  become   dependent  upon   significant
stockholders to provide  sufficient working capital to maintain the integrity of
the corporate entity.

         During our two most recent  fiscal years  (ended  December 31, 2001 and
2000)  and  from  December  31,  2001  to the  date of  this  Report,  we had no
disagreement  with S. W.  Hatfield  on any matter of  accounting  principles  or
practices, financial statement disclosure, or auditing scope or procedure.

         There were no reportable  events,  as described in Item 304(a)(1)(v) of
Regulation S-K, during our two most recent fiscal years (ended December 31, 2001
and 2000) and from December 31, 2001 to the date of this Report.

         During the  Registrant's  two most recent  fiscal years and the interim
period prior to its agreement to engage J.H. Cohn as the Registrant's  principal
accountants,  neither the Registrant nor anyone on its behalf has consulted with
J.H.  Cohn on  either  (i)  the  application  of  accounting  principles  to any
transaction  (completed or proposed) or (ii) the type of audit report that might
be rendered on the  Registrant's  financial  statements or (iii) any matter that
was  either  the  subject  of a  disagreement,  as such term is  defined in Item
304(a)(1)(iv)  of Regulation S-K, or a reportable  event as such term is defined
in Item 304(a)(1)(v)of Regulation S-K.

         The financial statements of our operating subsidiary, Graphco
Technologies, Inc., for the year 2000 were audited by McGladrey & Pullen, LLP


                                       18
<PAGE>

                                    PART III

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


         The following table and  biographical  outline sets forth our directors
and executive  officers and a brief  account of the business  experience of such
director/executive officer for the past five years.

Name                            Age         Position

Cristian Ivanescu               48          President, CEO, Chairman &
Director

Edward Kramer                   52          Secretary & Director

Ronald Stone                    67          Director

Ross Glatzer                    56          Director

Ulf Lindgren                    48          Director

Rodger Wichterman               62          Chief Financial Officer

CRISTIAN IVANESCU, age 48, is our Chairman,  President,  CEO and a Director. Mr.
Ivanescu is the Founder of our operating subsidiary, Graphco Technologies, Inc.,
and served as its Chairman and Director since inception until December 2002. Mr.
Ivanescu has over 16 years of hands-on professional and managerial experience in
the  semiconductor  industry  and  international  trade with  companies  such as
Thermco Systems, Inc. and Silicon Systems, Inc. Mr. Ivanescu holds a BSEE Degree
in High  Frequency  Design  and a BSME  Degree  from the UCMMB  and  Polytechnic
Institute of Bucharest.  He has earned  credits in  International  Law and Trade
Legislation  as well as numerous  software  and  technical  certifications.  Mr.
Ivanescu has earned Intel's Best Ten Vendors  award,  the  President's  Award at
Silicon Systems (6 patents within 6 months), and the Best Customer Support Award
at Thermco. He holds a number of technical patents.  Mr. Ivanescu also serves as
a Director of NGM Tec, Inc.

EDWARD C. KRAMER,  age 52, is our Secretary  and Director.  Mr. Kramer served in
the same  capacities to Graphco  Technologies,  Inc, our  operating  subsidiary,
until December 2002. Mr. Kramer  practices law in New York City. He received his
law degree  from the  Columbia  University  School of Law (J.D.  1976),  and his
undergraduate  degree from the  University  of  Pennsylvania,  earning an Honors
Major in Russian  History  (B.A.  cum laude,  1973).  Mr. Kramer began his legal
career  as an  associate  of the  firm  of  Werner,  Kennedy  &  French  and its
successor,  Cabell,  Kennedy & French.  Mr.  Kramer is admitted to the following
Bars: New York State,  United States District Court for the Eastern  District of
New York,  United States  District Court for the Southern  District of New York,
United States Court of Appeals - Second  Circuit and the United  States  Supreme
Court.  He has served as a Member of the Panel of Commercial  Arbitrators of the


                                       19
<PAGE>

American  Arbitration  Association,  and has  represented  public  corporations,
multi-nationals,  and private  enterprises,  with  emphasis in the  electronics,
communications and technical fields. Mr. Kramer also serves as a director of NGM
Tec, Inc.

RONALD  STONE,  age 67, is one of our  Directors.  Mr.  Stone served in the same
capacity to Graphco Technologies,  Inc, our operating subsidiary, until December
2002.  Until  September  2002,  Mr.  Stone  served  as the  President  and Chief
Operating Officer of Graphco  Technologies,  Inc. at which time he retired.  Mr.
Stone renders consulting services to OneCare, Inc. Mr. Stone is the President of
Ronald Stone & Associates; and served as President of Data Equipment and Systems
Division  Corporation,  a  subsidiary  of ITT  Corporation  (wire  and  wireless
communications);   President  and  Chief   Executive   Officer  of  Ring  Group,
Scanvest-Ring,  Norway; and President,  and Chief Executive Officer of Executone
Canada. Mr. Stone served on the Board of Directors of ITT SRT (Sweden), ITT-DESD
(US), Scanvest Ring (Norway) and Daterace (US).

ROSS GLATZER,  age 56, is one of our  Directors.  Mr. Glatzer served in the same
capacity to Graphco Technologies,  Inc, our operating subsidiary, until December
2002  Mr.  Glatzer  was  President  and  CEO of  Prodigy  Services  Company  the
industry's first web browser.  Following his tenure at Prodigy,  Mr. Glatzer was
named President and Chief Executive  Officer of International  Commerce Exchange
Systems("ICES"),  a start-up venture in technology-based,  business-to-business,
and electronic commerce services.  Mr. Glatzer helped establish ICES as a global
competitor in the field of electronic  commerce.  Mr. Glatzer is Chairman,  CEO,
and   co-founder   of  OneCare,   Inc.,  a  software   and  services   web-based
product-support  company.  Mr. Glatzer has also served on the Board of Directors
of Prodigy, ICES and NetLive.

ULF LINDGREN,  age 48, is one of our Directors.  Mr. Lindgren served in the same
capacity to Graphco Technologies,  Inc. our operating subsidiary, until December
2002. Mr. Lindgren founded the consulting firm Nordic  Management.  Mr. Lindgren
established  and  managed  the  Bain &  Company,  International,  Inc.  ("Bain")
Scandinavian  operations  as Director;  and is currently a strategic  advisor to
multinational  companies  concerning   cross-boarder  mergers  and  acquisitions
transactions, growth strategies, and company/industry restructuring. Involved in
the  launching  of a number  of  venture  capital  and new  industrial  business
initiatives,  Mr.  Lindgren  is  co-founder  and  serves as  Chairman  and Chief
Executive  Officer of Net  Insight AB, a  networking  equipment  group;  ReachIn
Technologies,  a multi-sensory interactive software provider; and ther companies
that  focus on  advertising  and  imaging  technology.  Mr.  Lindgren  as been a
visiting  lecturer  at  INSEAD,  the Centre  des  Etudes  Industrielles  CEI) in
Switzerland, and IFL in Scandinavia/Belgium.  Mr. Lindgren received his Ph.D. in
International Management from the Stockholm School of Economics and a Masters of
Law from the University of Stockholm.

RODGER C.  WICHTERMAN,  age 62, is our Chief  Financial  Officer Mr.  Wichterman
served in the same capacity to our operating  subsidiary,  Graphco Technologies,
Inc. until December 2002. Mr. Wichterman, who is a graduate of Lehigh University
with a BS degree in  Accounting,  began his career  with Price  Waterhouse  (now
PricewaterhouseCoopers)  as a CPA with eight years on the audit  staff.  He then
joined one of his PW clients, a high-tech, venture capital funded electronics


                                       20
<PAGE>

company as Controller.  In the 1970s and `80s he worked at IU  International,  a
multi-billion  dollar  NYSE  conglomerate.  Initially,  Rodger  was  on  the  IU
Corporate staff in a variety of financial  positions,  and later,  for 12 years,
served as CFO and Treasurer of two of their technology start-up ventures.  While
at IU and the operating  companies,  Rodger was deeply involved in all phases of
corporate development,  acquisitions,  contract negotiations,  SEC reporting and
treasury functions, in addition to operational and strategic planning.

INVOLVEMENT IN LEGAL PROCEEDINGS

         We are not aware that any of our officers and  directors  were, or have
been involved in any material legal proceedings which would have any effect upon
the Company.


COMPLIANCE WITH 16(A) OF THE SECURITIES AND EXCHANGE ACT OF 1934

         Based solely on a review of such  materials as are  available  from the
SEC, a number of our officers,  directors, or beneficial holder of more than ten
(10%)  percent  of our issued and  outstanding  shares of common  stock have not
timely filed with the SEC, all forms or reports required to be so filed pursuant
to Section 16(a) of the  Securities  Exchange Act of 1934 during the fiscal year
ended December 31, 2002.



ITEM 10.  EXECUTIVE COMPENSATION

         The following table sets forth the  compensation of the named executive
officers for each of the registrant's last three fiscal years:


<TABLE>
<CAPTION>

                           Annual Compensation                                  Long Term Compensation

Name and Principal                                            Other annual     Securities                 All other
Position                      Year    Salary         Bonus    compensation     Underlying options         Compensation
--------                      ----    ------         -----    ------------     ------------------         ------------
<S>                        <C>      <C>
Cristian Ivanescu          2000     $183,600(1)       --       ---               ----                    ---
Chairman, President,       2001     $183,600(2)       --       ---               ---                     ---
Chief Executive Officer    2002     $183,600(3)       --       ---               ---                     ---

</TABLE>

(1) Mr.  Ivanescu did not receive payment of any of said  compensation.
(2) Mr. Ivanescu received payment of $137,700 of said compensation.
(3) Mr. Ivanescu received payment of $7,650 of said compensation.





                                       21
<PAGE>



ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

         The following  table sets forth certain  information  known to us as of
the date of this  Statement,  with respect to beneficial  ownership of: (i) each
person  who is known by us to be the  beneficial  owner of more  than  five (5%)
percent  of our  outstanding  Common  Stock;  (ii)  each  of our  directors  and
executive  officers;  and (iii) all officers and directors as a group. Except as
otherwise  indicated,  we believe that the beneficial owners of the Common Stock
listed  below,  based  on  information  furnished  by  such  owners,  have  sole
investment  and voting power with  respect to such shares,  subject to community
property laws, where applicable.

<TABLE>
<CAPTION>
--------------------------------------- -------------------------------------------- ------------------------------
                                                         Amount of                           Percentage
Name(1) Ownership Ownership (2)                         Beneficial                          of Beneficial
--------------------------------------- -------------------------------------------- ------------------------------
<S>                                                      <C>                                   <C>
Cristian Ivanescu                                        4,715,977(3)                          19.2929%
--------------------------------------- -------------------------------------------- ------------------------------
Ruth Ivanescu (4)                                        1,500,000                              6.1364%
--------------------------------------- -------------------------------------------- ------------------------------
The Chloe Ivanescu Trust                                 1,416,573                              5.7951%
--------------------------------------- -------------------------------------------- ------------------------------
CRCI Solebury LP(5)                                      1,000,000                              4.0909%
--------------------------------------- -------------------------------------------- ------------------------------
Ronald Stone                                             1,625,000(6)                           6.6478%
--------------------------------------- -------------------------------------------- ------------------------------
Edward Kramer                                              938,047(7)                           3.8375%
--------------------------------------- -------------------------------------------- ------------------------------
Ulf Lindgren                                               867,534(8)                           3.5490%
--------------------------------------- -------------------------------------------- ------------------------------
Ross Glatzer                                               370,000(9)                           1.5136%
--------------------------------------- -------------------------------------------- ------------------------------
Rodger Wichterman                                          256,500(10)                          1.0493%
--------------------------------------- -------------------------------------------- ------------------------------
Mintz & Fraade, P.C.                                       887,863(11)                          3.6322%
--------------------------------------- -------------------------------------------- ------------------------------
All directors and executive officers
as a group
(6 persons)                                               8,516,558                            35.8903%
--------------------------------------- -------------------------------------------- ------------------------------
</TABLE>

(1) Unless otherwise stated, the address of our directors and executive officers
is c/o Graphco Holdings Corp, Inc. 41 University Drive, Newtown, PA 18940.

(2) Unless otherwise  indicated,  we believe that all persons named in the table
have sole voting and investment power with respect to all shares of Common Stock
beneficially  owned by them.  A person is deemed to be the  beneficial  owner of
securities  that may be acquired by such person  within 60 days from the date on
which  beneficial  ownership is to be determined,  upon the exercise of options,
warrants or convertible securities. Each beneficial owner's percentage ownership
is determined by assuming that options, warrants and convertible securities that
are held by such person  (but not those held by any other  person) and which are
exercisable within such 60-day period, have been exercised.

(3)  Includes  400,000  warrants  which  expire  on  December  7,  2010  and are
exercisable at a price of $2.50.

(4) Ms. Ruth  Ivanescu  and Mr.  Cristian  Ivanescu  are  husband and wife.  Mr.
Ivanescu does not claim beneficial ownership of any shares held by Ms. Ivanescu.


                                       22
<PAGE>

(5) Mr. Cristian  Ivanescu is the General Partner of CRCI Solebury LP. His wife,
Ms.  Ruth  Ivanescu,  holds  99.98% of the  limited  partnership's  interest  as
custodian  for the benefit of their  daughter  pursuant to the Uniform  Gifts to
Minors Act. Mr. Ivanescu and Ms. Ivanescu each hold .01% individually.

(6)  Includes  (a)  300,000  warrants  which  expire on December 1, 2004 and are
exercisable at a price of $1.33; (b) 1,200,000  options which expire on December
1, 2004 and are exercisable  $1.33;  (c)125,000  options which expire on October
30, 2012 and are exercisable at a price of $.60.

(7)  Includes  (a)  14,179  options  which  expire on  December  1, 2004 and are
exercisable at a price of $1.33;  (b)300,000 options which expire on October 30,
2012 and are  exercisable at a price of $.060;  (c) 60,714 warrants which expire
on December 1, 2004 and are exercisable at a price of $1.33;  (d) 10,000 options
which expire on November 30 2010 and which are  exercisable at a price of $1.33;
(e)10,000 options which expire on December 10, 2011 and which are exercisable at
a price of $1.33; (f) 25,000 warrants which expire on December 1, 2004 and which
are  exercisable at a price of $1.33;  (g)250,000  options which were granted to
Mr. Kramer pursuant to a Fee Agreement  dated December 2, 2002,  which expire on
December 31, 2007 and are exercisable at a price of $.001;  (h)213,333 shares of
Common Stock of the Company, which are issuable to Mr. Kramer in accordance with
said Fee  Agreement,  pursuant to which Mr.  Kramer has the right to convert the
outstanding amount of $160,000 owed to Mr. Kramer by the Company.

(8)  Includes  (a) 25,000  warrants  which  expire on  December  1, 2004 and are
exercisable at a price of $1.33; (b) 10,000 options which are expire on December
10, 2011 and are  exercisable  at a price of $1.33;  (c) 250,000  options  which
expire on October 30, 2012 and are exercisable at a price of $.60.

(9)  Includes  (a) 25,000  warrants  which  expire on  December  1, 2004 and are
exercisable at a price of $1.33; (b) 300,000 options which expire on October 30,
2012 and are  exercisable at a price of $.60; (c) 10,000 options which expire on
November  30,  2010 which are  exercisable  at a price of $1.33;  and (d) 10,000
options  which  expire on December  10, 2011 which are  exercisable  at price of
$1.33.

(10)  Includes  (a) 31,000  warrants  which  expire on December 16, 2007 and are
exercisable  at a price  of $.60;  (b)  49,500  options  which  are  exercisable
commencing  on  September  15,  2003 at a price  of $.60  and  which  expire  on
September  15,  2012;  (c)  49,500  options  which  are  exercisable  commencing
September  15, 2004 at a price of $.60 and which expire on  September  15, 2012;
(d) 51,000  options which are  exercisable  commencing on September 15, 2005 and
which expire on September 15, 2012;  (e) 25,000 options which expire on December
17, 2012 and are  exercisable at a price of $.60; and (f) 40,500  warrants which
expire on April 30, 2008 and are exercisable at a price of $.60.

(11)  Includes  250,000  options  which  were  granted  to Mintz & Fraade,  P.C.
pursuant to a Fee Agreement  dated December 2, 2002,  which expire  December 31,
2007 and are exercisable at a price of $.001.  Includes 587,863 shares of Common
Stock of the Company,  which are issuable to Mintz & Fraade,  P.C in  accordance
with said Fee Agreement, pursuant to which Mintz & Fraade, P.C. has the right to
convert the outstanding amount owed to Mintz & Fraade, P.C. which as of March


                                       23
<PAGE>

31, 2003 amounts to approximately $425,000.  Also includes,  aggregate of 50,000
shares of Common Stock which the Company has agreed to issue to Frederick  Mintz
and Alan Fraade pursuant to the Agreement dated February 13, 2003.

          In addition,  Mintz & Fraade, P.C. has continued to render services to
the Company and is owed  additional  unbilled  fees.  Assuming the conversion of
such  outstanding  amounts,  Mintz & Fraade,  P.C. as of the date of this Report
would likely be the  beneficial  owner of 5% or more of the Company's  shares of
Common Stock.


ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS


         Graphco  Technologies  has entered into an Agreement dated June 7, 2002
with  NGM  Tec,  Inc.  and  Graphco  -DPI  Holding  Company,  pursuant  to which
Graphco-DPI  Holding Company,  sold the rights acquired to the Digital Personnel
technology, by its sole Shareholder,  Graphco Technologies,  Inc., pursuant to a
certain license to the Digital  Personnel  Technology which it acquired pursuant
to a certain license agreement by and between California Institute of Technology
and Digital  Personnel,  Inc. Pursuant to the terms of said agreement,  NGM Tec,
Inc. is in default.  Cristian  Ivanescu,  our President,  CEO and Chairman,  and
Edward C. Kramer,  our Secretary  and a Director are also  Directors of NGM Tec,
Inc., but abstain from voting on any matters involving NGM-Tec, Inc.

         We have entered into a Fee  Agreement,  dated December 2, 2002 with one
of our  Directors and our  Corporate  Secretary,  Edward C. Kramer in connection
with legal  services  rendered to the Company  through  December 31, 2002 in the
aggregate  amount of  $160,000.  Pursuant to the Fee  Agreement,  commencing  on
January 1, 2003 through December 31, 2003, if the outstanding amount owed to Mr.
Kramer is not paid, Mr. Kramer has the right to convert such outstanding  amount
into shares of our Common Stock at a price of $.75 per share.  In  addition,  we
have granted to Mr.  Kramer an option to purchase  250,000  shares of our Common
Stock at a price of $.001 per share. In addition, pursuant to an Agreement dated
February  13, 2003,  we have agreed to issue an  aggregate  of 50,000  shares of
common stock to Edward Kramer, as partial  compensation for legal services to be
rendered to us by Mr. Kramer.

         We have entered into a Fee Agreement, dated December 2, 2002 with Mintz
& Fraade, P.C. ("M&F") in connection with legal services rendered to the Company
through October 31, 2002 in the aggregate amount of $290,704.50. Pursuant to the
Fee Agreement,  commencing on January 1, 2003 through  December 31, 2003, if the
outstanding  amount owed to M&F is not paid,  M&F has the right to convert  such
outstanding amount into shares of our Common Stock at a price of $.75 per share.
In  addition,  we have granted M&F an option to purchase  250,000  shares of our
Common  Stock  at a price  of $.001  per  share.  In  addition,  pursuant  to an
Agreement  dated  February  13,  2003,  we have agreed to issue an  aggregate of
50,000  shares of common  stock to Frederick  Mintz and Alan Fraade,  as partial
compensation for legal services to be rendered to us.

                                       24
<PAGE>

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

(a) The following financial statements and supplementary  financial  information
are filed as part of this Annual Report on Form 10-K:

      There are no financial  statement  schedules either applicable or required
to  be  filed  by us in  this  Annual  Report  on  Form  10-K  pursuant  to  the
instructions to Item 14 of Form 10-K.


(b) The following Reports on Form 8-K have been filed since our last 10-Q:

         (i) March 17, 2003 - with respect to the engagement of J.H. Cohn LLP as
our new Independent Accountants and The replacement of S.W. Hatfield, CPA as our
Independent Accountants.

         (ii)  December 30,  2002- with  respect to the closing  pursuant to the
Merger Agreement with Graphco Technologies, Inc. and our wholly owned subsidiary
RCM Interests, Inc. Acquisition Corp.

         (iii)  December  11, 2002 - with  respect to  entering  into the Merger
Agreement with Graphco  Technologies,  Inc. and our wholly owned  subsidiary RCM
Interests, Inc. Acquisition Corp.


(c)  The  following  list  sets  forth  the  applicable  exhibits  (numbered  in
accordance  with Item 601 of  Regulation  S-K)  required  to be filed  with this
Annual Report on Form 10-K:

         Exhibit Number             Description
         --------------             ------------
         Exhibit 2.1                Merger Agreement by and among RCM Interests,
                                    Inc., RCM Interests, Inc. Acquisition Corp.,
                                    and Graphco Technologies, Inc. (Schedules
                                    and exhibits omitted) incorporated by
                                    reference to Form 8-K (previously filed with
                                    the Commission on December 11, 2002.

ITEM 14.  CONTROLS AND PROCEDURES

The  management of the company has evaluated the  effectiveness  of the issuer's
disclosure  controls  and  procedures  as of a date  within 90 days prior to the
filing  date of the  report  (evaluation  date).  Based  upon  this  evaluation,
management has concluded that tighter  controls and procedures need to be set in
place regarding our issuance of stock warrants.  The issue has occurred  largely
as a result of our emerging company status and management is now taking steps to
establish appropriate controls and procedures.

There were no significant  changes in internal controls or in other factors that
could significantly  affect internal controls subsequent to the date of the most
recent  evaluation  of such,  including  any  corrective  actions with regard to
significant deficiencies and material weaknesses.


                                       25
<PAGE>

                                   SIGNATURES

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

Date:  July 18, 2003
                                               Graphco Holdings Corp.

                                               By: /s/ Cristian Ivanescu
                                                      --------------------------
                                                      Cristian Ivanescu
                                                      President, Chief
                                                      Executive Officer &
                                                      Chairman

         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.


           Name                     Title                        Date
          -------                  --------                    -------


/s/                        President, Chief Executive         July18, 2003
-------------------
Cristian Ivanescu          Officer, Chairman & Director


/s/ Rodger Wichterman      Chief Financial Officer            July 18, 2003
---------------------
Rodger Wichterman

/s/                        Secretary  & Director              July 18, 2003
----------------------
Edward Kramer

/s/                        Director                           July 18, 2003
----------------------
Ross Glatzer


/s/                        Director                           July 18, 2003
----------------------
Ronald Stone


/s/                        Director                           July 18, 2003
----------------------
Ulf Lindgren

                                       26
<PAGE>

<PAGE>



             Statement Under Oath Regarding Facts and Circumstances
                        Relating to Exchange Act Filings

         I,  Cristian Ivanescu,  certify  that:

1. I have reviewed this annual report on Form 10-KSB/A of Graphco Holdings Corp.

2 Based on my  knowledge,  this  annual  report  does  not  contain  any  untrue
statement of a material fact or omit to state a material fact  necessary to make
the statements made, in light of the  circumstances  under which such statements
were made,  not  misleading  with  respect to the period  covered by this annual
report;

3.  Based  on my  knowledge,  the  financial  statements,  and  other  financial
information  included  in this annual  report,  fairly  present in all  material
respects the financial  condition,  results of operations  and cash flows of the
registrant as of, and for, the periods presented in this annual report;

4.  The  registrant's  other  certifying  officers  and  I are  responsible  for
establishing and maintaining  disclosure  controls and procedures (as defined in
exchange Act Rules l3a-14 and 15d-l4) for the registrant and have:

         a) designed  such  disclosure  controls and  procedures  to ensure that
material  information  relating to the  registrant,  including its  consolidated
subsidiaries, is made known to us by others within those entities,  particularly
during the period in which this annual report is being prepared;

         b) evaluated the effectiveness of the registrant's  disclosure controls
and  procedures  as of a date  within 90 days prior to the  filing  data of this
annual report (the "Evaluation Date"); and

         c)  presented  in  this  annual  report  our   conclusions   about  the
effectiveness of the disclosure  controls and procedures based on our evaluation
as of the Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation,  to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent functions)

         a) all significant  deficiencies in the design or operation of internal
controls  which  could  adversely  affect  the  registrant's  ability to record,
process,  summarize  and  report  financial  data  and have  identified  for the
registrant's auditors any material weaknesses in internal controls; and

         b) any fraud,  whether or not  material,  that  involves  management or
other  employees  who  have a  significant  role  in the  registrant's  internal
controls; and


                                       27
<PAGE>


6. The  registrant's  other  certifying  officers  and I have  indicated in this
annual report whether there were significant  changes in internal controls or in
other factors that could  significantly  affect internal controls  subsequent to
the date of our most recent  evaluation,  including any corrective  actions with
regard to significant deficiencies and material weakness.


                                                          /s/ Christian Ivanescu
                                                          ---------------------
                                                          Cristian Ivanescu
                                                          President, Chief
                                                          Executive Officer &
                                                          Chairman


Date:  July 18, 2003


Sworn to before me this
18th day of July 2003


/s/ Lorraine Bruno
----------------------------
Notary Public

--------------------------------------------
Notarial Seal
Lorraine Bruno, Notary Public
Newtown Township. Bucks County
--------------------------------------------
Member, Pennsylvania Association of Notaries


                                       28
<PAGE>


                            CERTIFICATION PURSUANT TO
                             18 U.S.C. SECTION 1350,
                             AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

         In connection  with the Annual Report of Graphco  Holdings  Corp.  (the
Company) on Form 10-KSB/A for the fiscal year ended December 31, 2002 filed with
the Securities and Exchange  Commission  (the "Report"),  I, Cristian  Ivanescu,
President,  Chief Executive Officer and Chairman,  certify pursuant to 18 U.S.C.
Section 1350, as adopted  pursuant to Section 906 of the  Sarbanes-Oxley  Act of
2002 that:

         (1) The Report fully complies with the requirements of Section 13(a) of
the Securities Exchange Act of 1934; and

         (2) The  information  contained in the Report fairly  presents,  in all
material respects, the consolidated financial condition of the Company as of the
dates  presented  and  consolidated  result of operations of the Company for the
period presented.

Dated: July 18, 2003

                                                    /s/________________________
                                                    Cristian Ivanescu
                                                    President, Chief
                                                    Executive Officer &
                                                    Chairman



                                       29
<PAGE>




             Statement Under Oath Regarding Facts and Circumstances
                        Relating to Exchange Act Filings

         I,  Rodger Wichterman,  certify  that:

1. I have reviewed this annual report on Form 10-KSB/A of Graphco Holdings Corp.

2 Based on my  knowledge,  this  annual  report  does  not  contain  any  untrue
statement of a material fact or omit to state a material fact  necessary to make
the statements made, in light of the  circumstances  under which such statements
were made,  not  misleading  with  respect to the period  covered by this annual
report;

3.  Based  on my  knowledge,  the  financial  statements,  and  other  financial
information  included  in this annual  report,  fairly  present in all  material
respects the financial  condition,  results of operations  and cash flows of the
registrant as of, and for, the periods presented in this annual report;

4.  The  registrant's  other  certifying  officers  and  I are  responsible  for
establishing and maintaining  disclosure  controls and procedures (as defined in
exchange Act Rules l3a-14 and 15d-l4) for the registrant and have:

         a) designed  such  disclosure  controls and  procedures  to ensure that
material
         information  relating to the  registrant,  including  its  consolidated
subsidiaries, is made known to us by others within those entities,  particularly
during the period in which this annual report is being prepared;

         b) evaluated the effectiveness of the registrant's  disclosure controls
and  procedures  as of a date  within 90 days prior to the  filing  data of this
annual report (the "Evaluation Date"); and

         c)  presented  in  this  annual  report  our   conclusions   about  the
effectiveness of the disclosure  controls and procedures based on our evaluation
as of the Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation,  to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent functions)

         a) all significant  deficiencies in the design or operation of internal
controls  which  could  adversely  affect  the  registrant's  ability to record,
process,  summarize  and  report  financial  data  and have  identified  for the
registrant's auditors any material weaknesses in internal controls; and

         b) any fraud,  whether or not  material,  that  involves  management or
other  employees  who  have a  significant  role  in the  registrant's  internal
controls; and


                                       30
<PAGE>

6. The  registrant's  other  certifying  officers  and I have  indicated in this
annual report whether there were significant  changes in internal controls or in
other factors that could  significantly  affect internal controls  subsequent to
the date of our most recent  evaluation,  including any corrective  actions with
regard to significant deficiencies and material weakness.

                                                    /s/
                                                    -------------------------
                                                    Rodger Wichterman
                                                    Chief Financial Officer

Date:  July 18, 2003



Sworn to before me this
18th day of July 2003

/s/ Lorraine Bruno
----------------------------
Notary Public

--------------------------------------------
Notarial Seal
Lorraine Bruno, Notary Public
Newtown Township. Bucks County
--------------------------------------------
Member, Pennsylvania Association of Notaries


                                       31

<PAGE>


                            CERTIFICATION PURSUANT TO
                             18 U.S.C. SECTION 1350,
                             AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

         In connection  with the Annual Report of Graphco  Holdings  Corp.  (the
Company) on Form 10-KSB/A for the fiscal year ended December 31, 2002 filed with
the Securities and Exchange  Commission  (the "Report"),  I, Rodger  Wichterman,
Chief Financial Officer,  certify pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 that:

         (1) The Report fully complies with the requirements of Section 13(a) of
the Securities Exchange Act of 1934; and

         (2) The  information  contained in the Report fairly  presents,  in all
material respects, the consolidated financial condition of the Company as of the
dates  presented  and  consolidated  result of operations of the Company for the
period presented.

Dated: July 18, 2003

                                                     /s/
                                                     ------------------------
                                                     Rodger Wichterman
                                                     Chief Financial Officer

<PAGE>



                     GRAPHCO HOLDINGS CORP. AND SUBSIDIARIES
                          (A Development Stage Company)




                                    I N D E X


<TABLE>
<CAPTION>
                                                                              PAGE
                                                                              ----

ITEM 7.  FINANCIAL STATEMENTS:
<S>                                                                              <C>
               REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS                         F-2

               CONSOLIDATED BALANCE SHEETS
                    DECEMBER 31, 2002 AND 2001                                  F-3

               CONSOLIDATED STATEMENTS OF OPERATIONS
                    YEARS ENDED DECEMBER 31, 2002 AND 2001 AND
                    PERIOD FROM JANUARY 1, 1998 (DATE OF INCEPTION)
                    TO DECEMBER 31, 2002                                        F-4

               CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS'
               DEFICIENCY
                    YEARS ENDED DECEMBER 31, 2002 AND 2001 AND
                    PERIOD FROM JANUARY 1, 1998 (DATE OF INCEPTION)
                    TO DECEMBER 31, 2002                                        F5-F7

               CONSOLIDATED STATEMENTS OF CASH FLOWS
                    YEARS ENDED DECEMBER 31, 2002 AND 2001 AND
                    PERIOD FROM JANUARY 1, 1998 (DATE OF INCEPTION)
                    TO DECEMBER 31, 2002                                        F8-F9

               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS                       F10-F27
</TABLE>



                                      * * *


                                      F-1

<PAGE>






                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Board of Directors and Stockholders
Graphco Holdings Corp.

We have audited the accompanying consolidated balance sheets of GRAPHCO HOLDINGS
CORP.  (formerly RCM Interests,  Inc.) AND  SUBSIDIARIES  (A  Development  Stage
Company)  as of  December  31,  2002  and  2001,  and the  related  consolidated
statements of operations, changes in stockholders' deficiency and cash flows for
the years then ended and for the period  from  January 1, 2001 to  December  31,
2002 with  respect to the  cumulative  amounts  presented  for the  period  from
January 1, 1998 (date of  inception)  to December 31, 2002.  These  consolidated
financial  statements are the  responsibility of the Company'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 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 consolidated  financial statements referred to above present
fairly,  in all material  respects,  the financial  position of Graphco Holdings
Corp.  and  Subsidiaries  as of December 31, 2002 and 2001, and their results of
operations  and cash  flows for the years  then  ended and for the  period  from
January 1, 2001 to December  31,  2002 with  respect to the  cumulative  amounts
presented  for the period from January 1, 1998 (date of  inception)  to December
31, 2002, in conformity with  accounting  principles  generally  accepted in the
United States of America.

The  consolidated  financial  statements  referred  to above have been  prepared
assuming that the Company will continue as a going concern. As further discussed
in Note 2 to the consolidated  financial  statements,  the Company's  operations
have generated  recurring  losses,  and it had working capital and stockholders'
deficiencies as of December 31, 2002. In addition,  the Company had defaulted on
the  repayment of all of its  convertible  notes as of December  31, 2002.  Such
matters raise  substantial  doubt about the  Company's  ability to continue as a
going concern. Management's plans concerning these matters are also described in
Note 2. The accompanying  consolidated  financial  statements do not include any
adjustments that might result from the outcome of these uncertainties.

As discussed in Note 9, the accompanying 2002 consolidated  financial statements
have been restated.



                                                        J.H. Cohn LLP

Roseland, New Jersey
January 31,  2003,  except for Notes 10 and 11
  as to which the date is March 19, 2003



                                      F-2
<PAGE>

                     GRAPHCO HOLDINGS CORP. AND SUBSIDIARIES
                          (A Development Stage Company)

                           CONSOLIDATED BALANCE SHEETS
                           DECEMBER 31, 2002 AND 2001

<TABLE>
<CAPTION>
                                        ASSETS                                   2002              2001
                                                                            ------------       ------------
                                                                            (Restated)
Current assets:
<S>                                                                         <C>                <C>
     Cash                                                                   $        955       $     76,299
     Accounts receivable                                                           1,808             41,000
     Prepaid expenses                                                             65,708             83,029
                                                                            ------------       ------------
                  Total current assets                                            68,471            200,328
Property and equipment, net of accumulated depreciation
     and amortization of $247,820 and $947,154                                   149,101            846,173
Investments, at equity                                                                --                 --
Advances to stockholder                                                               --            223,864
Deferred loan costs, net of accumulated amortization of $178,639
     in 2001                                                                          --            229,816
Other assets                                                                      22,432             51,860
                                                                            ------------       ------------

                  Totals                                                    $    240,004       $  1,552,041
                                                                            ============       ============

                    LIABILITIES AND STOCKHOLDERS' DEFICIENCY

Current liabilities:
     Convertible notes payable, net of debt discount of
         $1,140,693 in 2001                                                 $  2,574,908       $  1,434,215
     Accounts payable and other accrued expenses                               3,465,059          1,988,246
     Other notes payable                                                         204,000
                                                                            ------------       ------------
                  Total liabilities                                            6,243,967          3,422,461
                                                                            ------------       ------------

Commitments and contingencies

Stockholders' deficiency:
     Preferred stock, no par value; 5,000,000 shares authorized:
         Series A convertible preferred stock; 333,333 shares
              authorized; 225,029 shares issued and outstanding
              (aggregate liquidation preference - $3,495,563)                  3,265,383          3,265,383
         Series B convertible preferred stock, no par value; 4,500,000
              shares authorized; 469,000 shares issued and outstanding
              (aggregate liquidation preference $938,000)                        415,760
         Subscription receivable for 53,000 shares of Series B
              convertible preferred stock                                        (53,000)
     Common stock, par value $.001 per share; 40,000,000 shares
         authorized; 18,511,793 and 17,323,553 shares issued and
         outstanding                                                              18,512             17,323
     Additional paid-in capital                                               14,444,637         12,985,021
     Unearned compensation                                                      (328,891)        (1,587,887)
     Accumulated deficit, including $22,946,232 and $15,730,128
         accumulated in the development stage                                (23,766,364)       (16,550,260)
                                                                            ------------       ------------
                  Total stockholders' deficiency                              (6,003,963)        (1,870,420)
                                                                            ------------       ------------

                  Totals                                                    $    240,004       $  1,552,041
                                                                            ============       ============
</TABLE>

See Notes to Consolidated Financial Statements.



                                      F-3
<PAGE>




                     GRAPHCO HOLDINGS CORP. AND SUBSIDIARIES
                          (A Development Stage Company)

                      CONSOLIDATED STATEMENTS OF OPERATIONS
                   YEARS ENDED DECEMBER 31, 2002 AND 2001 AND
                 PERIOD FROM JANUARY 1, 1998 (DATE OF INCEPTION)
                              TO DECEMBER 31, 2002



<TABLE>
<CAPTION>
                                                                                             Cumulative -
                                                                                             Development
                                                          2002                2001              Stage
                                                      ------------       ------------       ------------
                                                       (Restated)                            (Restated)
<S>                                                   <C>                <C>                <C>
Revenues                                              $    413,667       $    746,367       $  1,532,975
Cost of revenues                                             9,065            527,216            713,002
                                                      ------------       ------------       ------------

Gross profit                                               404,602            219,151            819,973
                                                      ------------       ------------       ------------

Operating expenses:
     Selling, general and administrative                 5,360,541          4,085,015         14,747,875
     Research and development                              393,834            841,379          4,735,213
                                                      ------------       ------------       ------------
              Totals                                     5,754,375          4,926,394         19,483,088
                                                      ------------       ------------       ------------

Loss from operations                                    (5,349,773)        (4,707,243)       (18,663,115)
                                                      ------------       ------------       ------------

Other income (expense):
     Interest income                                                           17,712            184,354
     Interest expense, including amortization of
         deferred loan fees and debt discount of
         $1,370,509, $1,436,775 and $2,807,284          (1,888,208)        (1,603,092)        (3,491,300)
     Loss from equity investees                                                                 (949,420)
     Other                                                  21,877                                21,877
                                                      ------------       ------------       ------------
              Totals                                    (1,866,331)        (1,585,380)        (4,234,489)
                                                      ------------       ------------       ------------

Net loss                                                (7,216,104)        (6,292,623)      $(22,897,604)
                                                                                            ============

Dividends declared on Series A convertible
     preferred stock                                                           48,628
                                                      ------------       ------------

Loss attributable to common stockholders              $ (7,216,104)      $ (6,341,251)
                                                      ============       ============


Basic loss per common share                           $       (.41)      $       (.37)
                                                      ============       ============


Basic weighted average number of common
     shares outstanding                                 17,512,432         17,283,772
                                                      ============       ============
</TABLE>


See Notes to Consolidated Financial Statements.



                                      F-4
<PAGE>

                     GRAPHCO HOLDINGS CORP. AND SUBSIDIARIES
                          (A Development Stage Company)

         CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIENCY
     YEARS ENDED DECEMBER 31, 2002 AND 2001 AND PERIOD FROM JANUARY 1, 1998
                    (DATE OF INCEPTION) TO DECEMBER 31, 2002


<TABLE>
<CAPTION>
                                                   Series A Convertible
                                                      Preferred Stock              Common Stock
                                                ------------------------     -----------------------
                                                                                                        Additional
                                                 Number of                    Number of                  Paid-in      Accumulated
                                                  Shares         Amount        Shares       Amount       Capital       Deficit
                                                ---------      ---------     ---------  ------------  ------------   ------------
<S>                                             <C>                          <C>        <C>           <C>            <C>
Balance, January 1, 1998                        1,000,000             --     3,721,695  $      3,722  $    418,750   $   (820,132)

2.68975-for-1 stock split                              --             --     6,282,378         6,282        (6,282)            --

Stock issued for services                              --             --       360,000           360          (360)            --

Detachable warrants issued in connection
   with bridge financing                               --             --            --            --        86,064             --

Retirement of preferred shares                 (1,000,000)

Net loss                                               --             --            --            --            --       (742,295)
                                                ---------      ---------     ---------  ------------  ------------   ------------

Balance, December 31, 1998                             --             --    10,364,073        10,364       498,172     (1,562,427)

Stock issued in connection with private
   placement                                           --             --     5,881,054         5,881     6,389,287             --

Stock issued in connection with
   acquisition                                         --             --        23,810            24        31,644             --

Stock exchanged for the retirement of
   bridge notes                                        --             --       474,506           474       564,618             --

Net loss                                               --             --            --            --            --     (1,489,397)
                                                ---------      ---------     ---------  ------------  ------------   ------------

Balance, December 31, 1999                             --             --    16,743,443        16,743     7,483,721     (3,051,824)

Stock issued in connection with
   private placement                              225,029   $  3,265,383            --            --            --             --

Stock warrants exercised                               --             --       246,659           247       327,809             --

Stock issued in connection with acquisition            --             --       143,999           144       191,375             --
Stock issued for services                                                       50,000            50        66,450

Warrants issued for services                           --             --            --            --        31,280             --

Net loss                                               --             --            --            --            --     (7,157,185)
                                                ---------      ---------     ---------  ------------  ------------   ------------
Balance, December 31, 2000                        225,029      3,265,383    17,184,101        17,184     8,100,635    (10,209,009)



<CAPTION>





                                                    Total
                                                 ------------
<S>                                              <C>
Balance, January 1, 1998                         $   (397,660)

2.68975-for-1 stock split                                  --

Stock issued for services                                  --

Detachable warrants issued in connection
   with bridge financing                               86,064

Retirement of preferred shares

Net loss                                             (742,295)
                                                 ------------

Balance, December 31, 1998                         (1,053,891)

Stock issued in connection with private
   placement                                        6,395,168

Stock issued in connection with
   acquisition                                         31,668

Stock exchanged for the retirement of
   bridge notes                                       565,092

Net loss                                           (1,489,397)
                                                 ------------

Balance, December 31, 1999                          4,448,640

Stock issued in connection with
   private placement                                3,265,383

Stock warrants exercised                              328,056

Stock issued in connection with acquisition           191,519
Stock issued for services                              66,500

Warrants issued for services                           31,280

Net loss                                           (7,157,185)
                                                 ------------
Balance, December 31, 2000                          1,174,193
</TABLE>



                                      F-5
<PAGE>




                     GRAPHCO HOLDINGS CORP. AND SUBSIDIARIES
                          (A Development Stage Company)

         CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIENCY
     YEARS ENDED DECEMBER 31, 2002 AND 2001 AND PERIOD FROM JANUARY 1, 1998
                    (DATE OF INCEPTION) TO DECEMBER 31, 2002
                                   (Restated)

<TABLE>
<CAPTION>
                                                 Series A Convertible
                                                   Preferred Stock              Common Stock
                                              -----------------------    -------------------------
                                                                                                       Additional      Unearned
                                              Number of                   Number of                     Paid-in         Compen-
                                               Shares         Amount       Shares           Amount      Capital         sation
                                              -------       ---------    ----------         ------     ----------      ----------
<S>                                         <C>            <C>          <C>                <C>         <C>             <C>
Sales of common stock through
   private placement                                                        120,000     $      120   $    299,880
Compensatory stock options issued
   to employees and directors                                                                           1,922,305     $(1,771,040)
Amortization of unearned compen-
   sation                                                                                                                 183,153
Warrants issued for payment of
   interest                                                                                                19,053
Issuance of beneficial conversion
   rights in connection with private
   placement of convertible notes
   payable                                                                                              1,336,054
Sale of warrants as part of private
   placement of convertible notes
   payable                                                                                              1,002,775
Warrants issued for payment of fees
   in connection with private placement
   applicable to convertible notes payable                                                                299,004
Expenses in connection with private
   placement applicable to sale of
   warrants                                                                                               (43,294)
Dividends accrued on Series A
   convertible preferred stock
Common stock issued as payment
   of accrued dividends                                                      19,452             19         48,609
Net loss
                                              -------       ---------    ----------         ------     ----------      ----------
Balance, December 31, 2001                    225,029       3,265,383    17,323,553         17,323     12,985,021      (1,587,887)

<CAPTION>




                                               Accumulated
                                                 Deficit          Total
                                               -----------      ----------
<S>                                           <C>             <C>
Sales of common stock through
   private placement                                          $    300,000
Compensatory stock options issued
   to employees and directors                                      151,265
Amortization of unearned compen-
   sation                                                          183,153
Warrants issued for payment of
   interest                                                         19,053
Issuance of beneficial conversion
   rights in connection with private
   placement of convertible notes
   payable                                                       1,336,054
Sale of warrants as part of private
   placement of convertible notes
   payable                                                       1,002,775
Warrants issued for payment of fees
   in connection with private placement
   applicable to convertible notes payable                         299,004
Expenses in connection with private
   placement applicable to sale of
   warrants                                                        (43,294)
Dividends accrued on Series A
   convertible preferred stock              $      (48,628)        (48,628)
Common stock issued as payment
   of accrued dividends                                             48,628
Net loss                                        (6,292,623)     (6,292,623)
                                               -----------      ----------
Balance, December 31, 2001                     (16,550,260)     (1,870,420)

</TABLE>



                                      F-6
<PAGE>

                     GRAPHCO HOLDINGS CORP. AND SUBSIDIARIES
                          (A Development Stage Company)

         CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIENCY
     YEARS ENDED DECEMBER 31, 2002 AND 2001 AND PERIOD FROM JANUARY 1, 1998
                    (DATE OF INCEPTION) TO DECEMBER 31, 2002
                                   (Restated)




<TABLE>
<CAPTION>
                                          Series A Convertible       Series B Convertible
                                           Preferred Stock              Preferred Stock           Common Stock
                                        --------------------    ----------------------------  ---------------------
                                                                                                                     Additional
                                       Number of               Number of        Subscription  Number of                Paid-in
                                         Shares     Amount      Shares    Amount  Receivable    Shares      Amount     Capital
                                        -------   ----------    -------  --------  --------   ----------    -------  -----------
<S>                                                                                              <C>      <C>        <C>
Effects of reverse acquisition                                                                   938,240  $     939  $  (154,935)

Compensatory stock options issued to
   employees and directors                                                                                               418,148

Cancellation of compensatory stock options
   issued to employees and directors                                                                                    (923,455)

Amortization of unearned compensation

Warrants issued for payment of interest                                                                                  189,193

Warrants issued for services                                                                                           1,652,915

Exercise of warrants                                                                                                      28,000

Sale of Series B preferred stock, net
   of expenses of $65,740                                       469,000  $415,760  $(53,000)

Common stock issued for services                                                                 250,000        250      249,750

Net loss
                                        -------   ----------    -------  --------  --------   ----------    -------  -----------
Balance, December 31, 2002              225,029   $3,265,383    469,000  $415,760  $(53,000)  18,511,793    $18,512  $14,444,637
                                        =======   ==========    =======  ========  ========   ==========    =======  ===========


<CAPTION>

                                           Unearned
                                            Compen-    Accumulated
                                            sation       Deficit        Total
                                           ---------   ------------  -----------
<S>                                                                  <C>
Effects of reverse acquisition                                       $  (153,996)

Compensatory stock options issued to
   employees and directors                 $(130,000)                    288,148

Cancellation of compensatory stock options
   issued to employees and directors         923,455

Amortization of unearned compensation        465,541                     465,541

Warrants issued for payment of interest                                  189,193

Warrants issued for services                                           1,652,915

Exercise of warrants                                                      28,000

Sale of Series B preferred stock, net
   of expenses of $65,740                                                362,760

Common stock issued for services                                         250,000

Net loss                                               $ (7,216,104)  (7,216,104)
                                           ---------   ------------  -----------
Balance, December 31, 2002                 $(328,891)  $(23,766,364) $(6,003,963)
                                           =========   ============  ===========
</TABLE>

See Notes to Consolidated Financial Statements.



                                      F-7
<PAGE>



                     GRAPHCO HOLDINGS CORP. AND SUBSIDIARIES
                          (A Development Stage Company)

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                   YEARS ENDED DECEMBER 31, 2002 AND 2001 AND
                 PERIOD FROM JANUARY 1, 1998 (DATE OF INCEPTION)
                              TO DECEMBER 31, 2002


<TABLE>
<CAPTION>
                                                                                                              Cumulative -
                                                                                                              Development
                                                                          2002               2001                Stage
                                                                      ------------    ---------------        --------------
                                                                       (Restated)                              (Restated)
Operating activities:
<S>                                                                    <C>                <C>                  <C>
     Net loss                                                          $(7,216,104)       $(6,292,623)         $(22,897,604)
     Adjustments to reconcile net loss to net
         cash used in operating activities:
         Depreciation and amortization of
              property and equipment                                       545,596            564,899             1,660,143
         Write-off of impaired property and equipment                      151,474             64,032               377,004
         Note payable issued for services                                  129,000                                  129,000
         Warrants issued for payment of interest                           189,193                                  189,193
         Warrants issued for services                                    1,244,000                                1,244,000
         Common stock issued for services                                  250,000                                  316,500
         Compensatory options and warrants issued
              to employees and directors                                   697,063            170,318               963,445
         Amortization of unearned compensation                             465,541            183,153               648,694
         Charges to interest expense for amortization of:
              Deferred loan costs                                          229,816            238,639               468,455
              Debt discount                                              1,140,693          1,198,136             2,338,829
         Equity in net loss of equity investee                                                                      949,420
         Acquired research and development
              expenses                                                                                              200,000
         Gain on sale of marketable securities                                                                      (40,949)
         Unrealized loss on marketable securities                                                                   108,249
         Changes in operating assets and liabilities:
              Accounts receivable                                           39,192            (21,562)                2,041
              Prepaid expenses                                              17,322             56,013               (79,388)
              Other assets                                                  29,430             12,733                42,163
              Accounts payable and other accrued
                  expenses                                               1,472,817            914,728             3,250,618
                                                                      ------------    ---------------        --------------
                      Net cash used in operating activities               (614,967)        (2,911,534)          (10,130,187)
                                                                      ------------    ---------------        --------------

Investing activities:
     Purchases of marketable securities                                                                            (540,210)
     Proceeds from maturities of marketable securities                                         55,535               473,716
     Purchases of property and equipment                                                      (21,280)           (1,813,319)
     Loan to related party                                                                                         (150,000)
     Acquisition of interest in equity investee                                                                    (750,000)
     Acquisition of technology license                                                                              (23,776)
     Repayments of advances by stockholders                                223,863
                                                                      ------------    ---------------        --------------
                      Net cash provided by (used in)
                         investing activities                              223,863             34,255            (2,803,589)
                                                                      ------------    ---------------        --------------
</TABLE>



                                      F-8
<PAGE>

                  GRAPHCO HOLDINGS CORP. INC. AND SUBSIDIARIES
                          (A Development Stage Company)

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                   YEARS ENDED DECEMBER 31, 2002 AND 2001 AND
                 PERIOD FROM JANUARY 1, 1998 (DATE OF INCEPTION)
                              TO DECEMBER 31, 2002



<TABLE>
<CAPTION>
                                                                                                             Cumulative -
                                                                                                            Development
                                                                         2002                2001               Stage
                                                                   ---------------      -------------     -----------------
                                                                     (Restated)                               (Restated)

Financing activities:
<S>                                                                <C>                  <C>               <C>
     Payment for shares in connection with reverse
         acquisition                                               $       (75,000)                       $         (75,000)
     Proceeds from long-term debt                                                                                 1,160,000
     Repayments of long-term debt                                                                                (1,096,891)
     Costs of sales of convertible notes and warrants
         allocable to sales of:
         Convertible notes                                                               $   (169,451)             (169,451)
         Warrants                                                                             (43,294)              (43,294)
     Repayment of convertible notes payable                                                  (120,000)             (120,000)
     Proceeds from sales of convertible notes and
         warrants                                                                           2,620,000             2,620,000
     Proceeds from exercise of warrants                                     28,000                                   28,000
     Proceeds from private placements of preferred
         stock, net of expenses                                            362,760                                3,628,143
     Proceeds from private placements of common
         stock, net of expenses                                                               300,000             7,023,224
     Other                                                                                    (20,000)              (20,000)
                                                                   ---------------      -------------     -----------------
                  Net cash provided by financing activities                315,760          2,567,255            12,934,731
                                                                   ---------------      -------------     -----------------

Net increase (decrease) in cash                                            (75,344)          (310,024)                  955

Cash, beginning of period                                                   76,299            386,323           -
                                                                   ---------------      -------------     -----------------

Cash, end of period                                                $           955      $      76,299     $             955
                                                                   ===============      =============     =================


Supplemental disclosure of cash flow data:
     Interest paid                                                 $        75,070     $      14,866      $         141,113
                                                                   ===============      =============     =================
</TABLE>

See Notes to Consolidated Financial Statements.



                                      F-9
<PAGE>




                     GRAPHCO HOLDINGS CORP. AND SUBSIDIARIES
                          (A Development Stage Company)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



Note 1 - Organization and business:

               Graphco  Holdings Corp.,  Inc.  ("GHC") is a holding company that
               was  formerly  known as RCM  Interests,  Inc.  GHC  emerged  from
               Chapter  11 of Title  11 of the  United  States  Code on July 31,
               2000.  GHC was a  publicly-held  company that had no  significant
               assets,  liabilities or operating activities from the date of its
               emergence  from  bankruptcy  until December 13, 2002, the date of
               the merger described  below, and as of December 31, 2002.  During
               that  period,  it was  seeking  a  suitable  reverse  acquisition
               candidate  through   acquisition,   merger  or  another  suitable
               business   combination   method  and,   accordingly,   it  was  a
               "development stage enterprise" for financial accounting purposes.

               Graphco  Technologies,  Inc. is a New Jersey  corporation that is
               referred to herein  together  with its  subsidiaries  as "G-TEC."
               G-TEC has been developing  since,  effectively,  January 1, 1998,
               state-of-the-art  biometric  security  solutions for  government,
               industry  and home  automation  along with  advanced  information
               exchange  and  data  management   systems  for  government,   law
               enforcement and corporate security. G-TEC has developed biometric
               software   products   for   secure   access,   surveillance   and
               authentication,  and an information  exchange and data management
               software   application   specifically   designed   for   the  law
               enforcement   community  and  the  corporate  security  industry.
               Biometrics   measures   unique   physical    characteristics   of
               individuals for  authentication  purposes.  G-TEC's two biometric
               software  products are VOICEPASS(R)  for speaker  recognition and
               FRA(TM) for facial recognition.  Management believes that speaker
               recognition  and facial  recognition  are the most user friendly,
               cost   effective  and  widely   accepted   biometrics   currently
               available. G-TEC expects that it will generate revenues primarily
               through  licenses or other  contracts for the use of its products
               over specified periods.

               G-TEC had conducted and discontinued certain unrelated operations
               prior to the  commencement  on January 1, 1998 of the development
               stage  activities   described  above.  G-TEC  generated  revenues
               primarily  from a  license  agreement  that has been  effectively
               terminated and a limited  number of sales of its products  during
               2002.  It generated  revenues  primarily  from a contract  with a
               residential   community   that   used  an   application   of  its
               technologies during 2001. G-TEC had not generated any significant
               revenues  from  contracts  for  the  sale  or use of its  primary
               products on a recurring basis and, accordingly,  it also remained
               in the development stage for financial  accounting purposes as of
               December 13, 2002, the date of the merger described below, and as
               of December 31, 2002.




                                      F-10
<PAGE>

                     GRAPHCO HOLDINGS CORP. AND SUBSIDIARIES
                          (A Development Stage Company)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



Note 1 - Organization and business (concluded):

               As of December  13,  2002,  GHC had  10,500,500  shares of common
               stock outstanding and G-TEC had 17,351,553 shares of common stock
               outstanding.  On that date, GHC, RCM Interests,  Inc. Acquisition
               Corp.  ("Acquisition Sub"), a wholly-owned subsidiary of GHC, and
               G-TEC  consummated  a merger  whereby  G-TEC merged with and into
               Acquisition  Sub and all of the  shares of G-TEC's  common  stock
               then  outstanding  were  automatically  converted  into an  equal
               number of shares of common stock of GHC. In addition, pursuant to
               the  merger  agreement,  a  stockholder  of GHC  agreed to cancel
               9,562,269  shares of his GHC common  stock.  G-TEC  agreed to pay
               total  consideration of $150,000 for such cancellation,  of which
               $75,000  was paid in December  2002 and $75,000 was paid  through
               the issuance of a 10% note that is due on June 12, 2003 (see Note
               6).

               Upon  consummation  of the merger,  GHC had 18,289,793  shares of
               common stock  outstanding of which  17,351,553  shares (95%) were
               held by former stockholders of G-TEC and 938,240 shares (5%) were
               held by pre-merger stockholders of GHC. Accordingly, although GHC
               was the legal  acquirer  and G-TEC  was the legal  acquiree,  the
               business   combination  has  been  accounted  for  as  a  reverse
               acquisition,  whereby,  for  accounting  purposes,  G-TEC was the
               accounting   acquirer  and  GHC  was  the  accounting   acquiree.
               Accordingly,  the accompanying  consolidated financial statements
               reflect  the  accounts  of G-TEC  and its  subsidiaries  prior to
               December 13, 2002. Since GHC was an inactive "shell" company, its
               assets and liabilities, which were not material, were recorded at
               their historical carrying values as of December 13, 2002, and its
               results of  operations  have been  included  in the  accompanying
               consolidated  financial  statements  subsequent to that date. Pro
               forma results of operations  assuming GHC had been acquired as of
               January 1, 2001 have not been  presented  because  they would not
               differ materially from the historical results of operations.

               As used herein,  the Company refers to G-TEC and its subsidiaries
               prior to the merger and GHC,  G-TEC and GHC's other  subsidiaries
               subsequent to the merger.


Note 2 - Summary of  significant  accounting  policies:
          Principles of consolidation:

                  The accompanying consolidated financial statements include the
                  accounts of the Company and its wholly-owned subsidiaries. All
                  significant  intercompany  accounts and transactions have been
                  eliminated in consolidation.



                                      F-11
<PAGE>




                     GRAPHCO HOLDINGS CORP. AND SUBSIDIARIES
                          (A Development Stage Company)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 2 - Summary of significant accounting policies (continued):
           Basis of presentation:

                  The accompanying  consolidated  financial statements have been
                  prepared  assuming  that the Company will  continue as a going
                  concern.  However,  the Company has incurred  recurring losses
                  and,  as  shown  in the  accompanying  consolidated  financial
                  statements,  as of December 31, 2002, it had a working capital
                  deficit of approximately  $6,175,000, a cumulative net loss of
                  $23,766,000 and a stockholders'  deficiency of $6,004,000.  It
                  also had convertible notes payable with a principal balance of
                  $2,574,908  that were in default as of December  31, 2002 (see
                  Notes 5 and 8). These  matters raise  substantial  doubt about
                  the Company's ability to continue as a going concern.

                  Management  believes  that the Company will  continue to incur
                  net losses and negative cash flows from  operating  activities
                  through at least the year ending  December  31,  2003.  In the
                  absence  of  operating  profits  and  cash  flows,  management
                  believes  the  Company  will need to limit  its  expenditures,
                  obtain additional debt or equity financing,  obtain agreements
                  with creditors for the  conversion of outstanding  obligations
                  into preferred or common stock and/or obtain  agreements  with
                  creditors  for  their  forbearance  with  respect  to past due
                  obligations.  Management  plans to continue to  negotiate  the
                  extension  of the  due  dates  for or  the  conversion  of the
                  Company's  obligations  and  seek  additional  debt or  equity
                  financing  through  private  placements or by other means.  It
                  will also continue to seek strategic  partners for the Company
                  that can  provide it with  working  capital.  Management  also
                  plans  to   continue  to  limit  the   Company's   development
                  activities where necessary.  However, management cannot assure
                  that the Company will be able to obtain the additional capital
                  resources   that  will  enable  the  Company  to  sustain  its
                  operations and planned development activities through at least
                  December 31, 2003. If the Company cannot  generate  sufficient
                  revenues and/or obtain  sufficient  additional  financing,  if
                  necessary,  by that date, the Company may be forced thereafter
                  to restructure  its  operations,  merge,  sell its operations,
                  file for  bankruptcy  reorganization  or  entirely  cease  its
                  operations.

                  The  accompanying  consolidated  financial  statements  do not
                  include  any  adjustments  related to the  recoverability  and
                  classifications  of assets or the amounts and  classifications
                  of liabilities  that might be necessary  should the Company be
                  unable to continue as a going concern.

               Revenue recognition:
                  Revenues  from  the  sale  of  products  are  recognized  when
                  products are shipped and collection is probable. Revenues from
                  contracts  for the use of the Company's  primary  products are
                  recognized over the estimated period during which the products
                  will be used provided that the fees are fixed and determinable
                  and  collection  is probable.  License fees are  recognized as
                  revenues when the fees have been  collected and the Company is
                  no longer obligated to perform services for the licensee.  The
                  Company's  revenues in 2002 include  $328,000 based on license
                  fees paid by a related party which has defaulted on additional
                  payments  that  were due as of  December  31,  2002  under the
                  license agreement (see Note 11). The Company recognized all of
                  its revenues in 2001 from a  fixed-price,  long-term  contract
                  using the percentage of completion method.



                                      F-12
<PAGE>




                     GRAPHCO HOLDINGS CORP. AND SUBSIDIARIES
                          (A Development Stage Company)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


Note 2 - Summary of significant  accounting policies (continued):
               Use of estimates:
                  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   certain   reported   amounts  and
                  disclosures.  Accordingly,  actual  results  could differ from
                  those estimates.

               Property and equipment:
                  Property  and  equipment  are stated at cost less  accumulated
                  depreciation and amortization.  Depreciation is computed using
                  straight-line  and  accelerated  methods  over  the  estimated
                  useful  lives  of  the  assets.   Amortization   of  leasehold
                  improvements  is computed based on the lesser of the estimated
                  useful life of the asset or the term of the lease.

               Long-lived assets:
                  Long-lived  assets,  such  as  property  and  equipment,   are
                  reviewed  for  impairment   whenever   events  or  changes  in
                  circumstances  indicate  that the carrying  amount of an asset
                  may not be recoverable.  Impairment losses are recognized when
                  events  or  changes  in   circumstances   indicate   that  the
                  undiscounted  cash flows  estimated  to be  generated  by such
                  assets are less than their  carrying  value and,  accordingly,
                  all  or  a  portion  of  such   carrying   value  may  not  be
                  recoverable.  Impairment losses are then measured by comparing
                  the  fair  value of  assets  to their  carrying  amounts.  The
                  Company recorded  charges for impaired  property and equipment
                  (which is included in general and administrative  expenses) of
                  $151,474  and  $64,032  in 2002  and  2001,  respectively,  in
                  connection  with  the  abandonment  of  office  space  and the
                  disposal of related property and equipment.

               Debt issuance costs and debt discount:
                  Loan fees and other  debt  issuance  costs  are  deferred  and
                  amortized  to  interest  expense  over the term of the related
                  loan on a straight-line basis. Debt discount is offset against
                  the principal  balance of the related loan and amortized using
                  the interest method over the term of the related loan.

               Investments, at equity:
                  Noncontrolling  interests  in  companies  of less than 50% are
                  accounted for by the equity method where the Company exercises
                  significant  influence  over the  investee.  Under the  equity
                  method,  the  Company's  proportionate  share of net income or
                  loss of such an investee is reflected in the Company's results
                  of  operations.  Although the Company owns  interests in other
                  companies  that it accounts for pursuant to the equity method,
                  the  investments in those entities had no carrying value as of
                  December  31, 2002 and 2001,  and the Company had no equity in
                  the earnings or losses of those investees during 2002 and 2001
                  because its proportionate share of the losses sustained by the
                  investees  prior  to  2001  had  substantially   exceeded  its
                  investments.



                                      F-13
<PAGE>

                     GRAPHCO HOLDINGS CORP. AND SUBSIDIARIES
                          (A Development Stage Company)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



Note 2 -  Summary  of  significant  accounting  policies  (continued):

               Research and development costs:
                  Research and development costs have been expensed as incurred.

               Software development costs:
                  Pursuant to Statement of Financial  Accounting  Standards  No.
                  86, "Accounting for the Costs of Computer Software to be Sold,
                  Leased or  Otherwise  Marketed,"  the  Company is  required to
                  charge the costs of  creating a computer  software  product to
                  research  and  development   expense  as  incurred  until  the
                  technological feasibility of the product has been established;
                  thereafter,  all related  software  development and production
                  costs are required to be capitalized.

                  Commencing upon the initial release of a product,  capitalized
                  software  development costs and any costs of related purchased
                  software  are  generally  required  to be  amortized  over the
                  estimated economic life of the product or based on current and
                  estimated future revenues.  Thereafter,  capitalized  software
                  development costs and costs of purchased software are reported
                  at the lower of  unamortized  cost or estimated net realizable
                  value.  Due  to  the  inherent  technological  changes  in the
                  software development industry, estimated net realizable values
                  or  economic   lives  may  decline   and,   accordingly,   the
                  amortization period may have to be accelerated.

                  Due to the  uncertainties  related to the Company's ability to
                  generate  revenues from its products on a recurring basis, the
                  Company  had  not   capitalized  any  software  costs  through
                  December 31, 2002.

               Income taxes:
                  The Company  accounts for income  taxes  pursuant to the asset
                  and liability method which requires deferred income tax assets
                  and   liabilities  to  be  computed   annually  for  temporary
                  differences  between the financial  statement and tax bases of
                  assets  and  liabilities   that  will  result  in  taxable  or
                  deductible amounts in the future based on enacted tax laws and
                  rates  applicable to the periods in which the  differences are
                  expected to affect taxable  income.  Valuation  allowances are
                  established  when  necessary to reduce  deferred tax assets to
                  the amount  expected to be realized.  The income tax provision
                  or credit is the tax payable or refundable for the period plus
                  or minus the change  during the period in deferred  tax assets
                  and liabilities.




                                      F-14
<PAGE>


                     GRAPHCO HOLDINGS CORP. AND SUBSIDIARIES
                          (A Development Stage Company)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 2 -  Summary  of  significant  accounting  policies  (continued):

               Stock-based compensation:
                  In accordance  with the  provisions  of Accounting  Principles
                  Board  Opinion  No.  25,   "Accounting  for  Stock  Issued  to
                  Employees" ("APB 25"), the Company will recognize compensation
                  costs  as a  result  of  the  issuance  of  stock  options  to
                  employees,  including directors,  based on the excess, if any,
                  of the fair value of the underlying stock at the date of grant
                  or award (or at an appropriate  subsequent  measurement  date)
                  over the amount the  employees  must pay to acquire  the stock
                  (the "Intrinsic Value Method").  However, the Company will not
                  be required to recognize  compensation  expense as a result of
                  any grants to employees at an exercise  price that is equal to
                  or greater  than fair value.  The  Company  will also make pro
                  forma  disclosures,  as required  by  Statement  of  Financial
                  Accounting  Standards  No. 123,  "Accounting  for  Stock-Based
                  Compensation" ("SFAS 123"), of net income or loss as if a fair
                  value based method of  accounting  for stock  options had been
                  applied if such amounts differ  materially from the historical
                  amounts.

                  In  accordance  with the  provisions  of SFAS  123,  all other
                  issuances  of common  stock,  stock  options  or other  equity
                  instruments to employees and nonemployees as the consideration
                  for goods or services  received  by the Company are  accounted
                  for based on the fair value of the equity  instruments  issued
                  (unless the fair value of the  consideration  received  can be
                  more  reliably  measured).  The fair  value of any  options or
                  similar equity  instruments  issued will be estimated based on
                  the  minimum  value  option-pricing  model,  which  meets  the
                  criteria set forth in SFAS 123, and the assumption that all of
                  the options or other equity  instruments will ultimately vest.
                  Such fair value is measured as of an appropriate date pursuant
                  to the guidance in the  consensus of the Emerging  Issues Task
                  Force  ("EITF")  for EITF  Issue  No.  96-18  (generally,  the
                  earlier  of the date the  other  party  becomes  committed  to
                  provide goods or services or the date performance by the other
                  party is  complete)  and  capitalized  or  expensed  as if the
                  Company had paid cash for the goods or services.

                  The Company  accounts for the  intrinsic  value of  beneficial
                  conversion  rights  arising from the  issuance of  convertible
                  debt instruments with  nondetachable  conversion  options that
                  are  in-the-money  at  the  commitment  date  pursuant  to the
                  consensuses  for EITF Issue No. 98-5 and EITF Issue No. 00-27.
                  Such value is allocated to additional  paid-in capital and the
                  resulting debt discount is amortized to interest expense using
                  the effective  yield method over the period to the maturity of
                  the debt  instrument.  Such value is  determined  after  first
                  allocating an appropriate  portion of the proceeds received to
                  any other detachable instruments included in the exchange.



                                      F-15
<PAGE>



                     GRAPHCO HOLDINGS CORP. AND SUBSIDIARIES
                          (A Development Stage Company)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


Note 2 -  Summary  of  significant  accounting  policies  (concluded):

               Earnings (loss) per share:
                  The Company  presents "basic" earnings (loss) per common share
                  and,  if  applicable,  "diluted"  earnings  per  common  share
                  pursuant  to  the   provisions   of   Statement  of  Financial
                  Accounting  Standards  No. 128,  "Earnings  per Share."  Basic
                  earnings (loss) per common share is calculated by dividing net
                  income  or loss  applicable  to common  stock by the  weighted
                  average  number  of  common  shares  outstanding  during  each
                  period.   The  weighted   average   number  of  common  shares
                  outstanding  in  2002  includes  the  effects  of the  assumed
                  conversion of shares of Series B convertible  preferred  stock
                  that  were   subject  to  automatic   conversion   from  their
                  respective dates of issuance (see Note 10). The calculation of
                  diluted  earnings per common share is similar to that of basic
                  earnings  per common  share,  except that the  denominator  is
                  increased to include the number of  additional  common  shares
                  that would have been  outstanding if all potentially  dilutive
                  common  shares,  such as those  issuable  upon the exercise of
                  stock options and warrants and the  conversion of  convertible
                  notes,  were issued  during the  period,  the  treasury  stock
                  method had been applied to the  proceeds  from the exercise of
                  the options and warrants and the interest costs  applicable to
                  the  convertible  notes  payable  had been  added  back to the
                  numerator.

                  Diluted  per  share  amounts  have not been  presented  in the
                  accompanying consolidated statements of operations because the
                  Company  had net  losses  in 2002  and  2001  and the  assumed
                  effects of the exercise of all of the Company's  stock options
                  and  warrants  and the  conversion  of the  convertible  notes
                  payable  that  were  outstanding  during  all or part of those
                  years would have been anti-dilutive.  At December 31, 2002 and
                  2001,  there were 8,520,192 and 6,969,032 shares issuable upon
                  the exercise of the Company's outstanding options and warrants
                  and the conversion of its outstanding  notes payable that were
                  excluded from the computation of diluted loss per common share
                  in 2002 and 2001 because they were anti-dilutive.


Note 3 - Property and equipment:
               At December 31, 2002 and 2001, property and equipment consists of
the following:

                                                        2002            2001
                                                    ----------      ----------
Computer equipment and software                     $  256,401      $  982,401
Furniture, fixtures and office equipment               119,142         242,140
Leasehold improvements                                  21,378         568,786
                                                    ----------      ----------
                                                       396,921       1,793,327
Less accumulated depreciation and amortization         247,820         947,154
                                                    ----------      ----------

    Totals                                          $  149,101      $  846,173
                                                    ==========      ==========



                                      F-16
<PAGE>

                     GRAPHCO HOLDINGS CORP. AND SUBSIDIARIES
                          (A Development Stage Company)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 4 - Advances to stockholder:
               As of December  31,  2001,  the  Company  had made  advances to a
               stockholder  totaling $223,864 which were noninterest bearing and
               without specific repayment terms.  During 2002, the advances were
               repaid.  As of  December  31,  2002 and 2001,  the Company had an
               obligation  to  the   stockholder  for  the  payment  of  accrued
               compensation   totaling   approximately   $222,000  and  $46,000,
               respectively (see Note 8).


Note 5 - Convertible notes payable:
               During 2001, the Company sold  convertible  notes and warrants to
               purchase  939,166  shares  of  common  stock  through  a  private
               placement and received gross proceeds of $2,620,000 which equaled
               the aggregate  principal  balance of the  convertible  notes.  As
               further  described below, the Company recorded  discounts for the
               fair  value of the  warrants  and  beneficial  conversion  rights
               issued  in  connection  with  the   convertible   notes  totaling
               $2,338,829 of which  $1,198,136 was amortized to interest expense
               in 2001 and the  remaining  $1,140,693  was amortized in 2002. It
               also added  $74,908 of interest to  principal  in 2002 and repaid
               convertible  notes in the  principal  amount of $120,000 in 2001.
               Accordingly, at December 31, 2002 and 2001, the convertible notes
               had  a  net  carrying   value  of  $2,574,908   and   $1,434,215,
               respectively.  Convertible  notes  in  the  principal  amount  of
               $1,000,000 are secured by certain intellectual property developed
               by the Company that is no longer used and has no carrying  value.
               The  remainder  of  the  convertible  notes  are  unsecured.  The
               convertible  notes outstanding at December 31, 2002 and 2001 were
               convertible  into a total of 1,954,605  shares of common stock at
               conversion   rates   ranging  from  $1.50  to  $5.00  per  share,
               originally  bore  interest at annual rates ranging from 8% to 12%
               and were scheduled to be paid at various dates through  September
               30, 2002.

               As of  December  31,  2002,  the  Company  had  defaulted  on the
               repayment of all of its outstanding convertible notes and accrued
               interest  totaling  approximately  $290,000.  As a result  of the
               defaults,  the range of interest rates on the  convertible  notes
               increased  to 13.5%  to 18%.  In  addition,  the  Company  became
               obligated  to  issue  to  holders  of  convertible  notes  in the
               principal  amount of $165,000 a total of 46,816  warrants for the
               purchase  of  common  stock  every 30 days  until  principal  and
               interest are paid.  Such  warrants are  exercisable  at $2.50 per
               share  from  the date  they are  required  to be  issued  through
               November 2004.

               The warrants to purchase 939,166 shares of common stock sold with
               the convertible  debentures  through the private placement expire
               on various dates  through  September  2006.  Warrants for 400,000
               shares are  exercisable at $2.00 per share;  warrants for 535,416
               shares are exercisable at $2.50 per share; and warrants for 3,750
               shares are exercisable at $5.00 per share.  Based on the relative
               fair  values of the  convertible  notes and the  warrants  at the
               respective dates of issuance, proceeds from the private placement
               of  $1,002,775  were  allocable to the fair value of the warrants
               which was determined using the minimum value option-pricing model
               pursuant to the provisions of SFAS 123. Accordingly,  the Company
               initially increased  additional paid-in capital by $1,002,775 for
               the fair value of the warrants and reduced the carrying  value of
               the  convertible  notes for the same amount for the debt discount
               attributable to the fair value of the warrants.



                                      F-17
<PAGE>

                     GRAPHCO HOLDINGS CORP. AND SUBSIDIARIES
                          (A Development Stage Company)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


Note 5 - Convertible notes payable (continued):
               Convertible  notes in the  principal  amount of  $1,745,000  sold
               through the private  placement in 2001 that are convertible  into
               1,864,605  shares of common stock at prices ranging from $1.50 to
               $2.50  per  share  had  effective  conversion  prices  after  the
               allocation  of a portion of the proceeds to the warrants  ranging
               from  $1.08 to $2.10 per share.  The fair value of the  Company's
               common  stock at the  respective  dates of issuance was $2.50 per
               share.  Pursuant to the applicable  guidance in the consensus for
               EITF Issue No. 00-27, the excess of the fair value per share over
               the  effective   conversion  price  per  share  is  a  beneficial
               conversion feature or right for which the value is measured as of
               the respective  dates of issuance by the  difference  between the
               aggregate  effective  conversion  price and the fair value of the
               common  stock  into  which  the   securities   are   convertible,
               multiplied by the number of shares into which the  securities are
               convertible  (the  intrinsic  value  method).   Accordingly,  the
               Company  initially   increased   additional  paid-in  capital  by
               $1,336,050  and reduced  the  carrying  value of the  convertible
               notes  by  the  same  amount  for  the  intrinsic  value  of  the
               beneficial conversion rights.

               The Company  issued  warrants to purchase  202,014  shares of its
               common  stock with  exercise  prices of $1.33 and $2.50  expiring
               through October 2006 as  consideration  for services  rendered in
               connection with the private placement of the convertible notes in
               2001.  The Company valued these warrants at $120,886 based on the
               minimum value option pricing model of which $87,833 was allocable
               to the sale of the convertible  notes.  Accordingly,  the Company
               initially increased deferred loan costs by $87,833 and additional
               paid-in  capital for the same amount.  In  addition,  the Company
               made cash  payments  for legal and  other  services  rendered  in
               connection with the issuances of the  convertible  notes totaling
               $212,745  of  which  $169,451  was  allocable  to the sale of the
               convertible  notes and,  accordingly,  also  included in deferred
               loan costs and $43,294 was  allocable to the sale of the warrants
               and charged to additional paid-in capital.

               In  October  2001,  the  holder  of  convertible  notes  with  an
               aggregate  principal balance of $700,000 that was past due agreed
               to  extend  the due dates  for the  payment  of the notes and the
               accrued  interest  thereon of $74,908 to September 30, 2002.  The
               Company  issued  warrants  to  purchase  200,000  shares  of  the
               Company's  common  stock  at  $1.50  per  share  that  expire  in
               September  2006  to  the  holder  of  the  convertible  notes  as
               consideration for the extension.  The Company valued the warrants
               at $211,171 based on the minimum value  option-pricing  model and
               initially  increased  deferred loan costs and additional  paid-in
               capital for that amount.

               The deferred loan costs  incurred in 2001 in connection  with the
               sale of the convertible notes totaled $468,455, of which $238,639
               was  amortized  to  interest  expense  in 2001 and the  remaining
               $229,804 was amortized in 2002.



                                      F-18
<PAGE>

                     GRAPHCO HOLDINGS CORP. AND SUBSIDIARIES
                          (A Development Stage Company)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 5 - Convertible notes payable (concluded):
               As explained above, the Company became obligated to issue a total
               of 46,816 warrants for the purchase of common stock every 30 days
               to  holders  of  certain  convertible  notes as a  result  of its
               defaults  until  principal  and  interest  are paid.  The Company
               issued warrants to those  noteholders for the purchase of 468,160
               shares during 2002. The Company valued those warrants at $189,193
               based on the  minimum  value  option-pricing  model  and  charged
               interest expense and increased additional paid-in capital by that
               amount in 2002.

               During  2001,  the Company  issued  warrants  for the purchase of
               40,000  shares  of the  Company's  common  stock to a  holder  of
               convertible  notes  in the  principal  amount  of  $1,394,908  in
               connection with negotiations for the extension of the due date of
               the note.  The warrants are  exercisable  at prices  ranging from
               $2.00 to $2.50 per share and expire  through  October  2004.  The
               Company  valued  these  warrants at $19,053  based on the minimum
               value  option-pricing  model and  charged  interest  expense  and
               increased additional paid-in capital by that amount in 2001.

               The  issuances  of the  warrants  and the  beneficial  conversion
               rights   described   above   were   noncash   transactions   and,
               accordingly,   they  are  not   reflected  in  the   accompanying
               consolidated statements of cash flows.


Note 6 - Other notes payable:
               As of December  31,  2002,  other notes  payable had an aggregate
               balance payable of $204,000, bear interest at 10%, mature on June
               12, 2003 and are  secured by  approximately  1,416,000  shares of
               GHC's common stock owned by one of its  stockholders.  One of the
               notes,  which had a balance  of  $75,000,  was issued to a former
               stockholder of GHC as part of the consideration for his agreement
               to allow the  Company  to cancel  9,562,269  shares of GHC common
               stock he had owned in  connection  with the  reverse  acquisition
               (see Note 1). The amount paid in connection with the cancellation
               of the shares was charged to additional  paid-in capital in 2002.
               The other note,  which had a balance of  $129,000,  was issued to
               pay fees in that amount that were charged to selling, general and
               administrative expenses in 2002 for services the Company received
               in connection with the reverse acquisition.

               The issuances of the notes payable were noncash transactions and,
               accordingly,  they are not  reflected  in the  accompanying  2002
               consolidated statement of cash flows.


Note 7 - Income taxes:
               As of December  31,  2002,  the Company  had net  operating  loss
               carryforwards  of approximately  $16,900,000  available to reduce
               future  Federal  and state  taxable  income  which will expire at
               various dates through 2022.



                                      F-19
<PAGE>




                     GRAPHCO HOLDINGS CORP. AND SUBSIDIARIES
                          (A Development Stage Company)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



Note 7 - Income taxes (concluded):
               As of December  31, 2002 and 2001,  the  Company's  deferred  tax
               assets   consisted  of  the  effects  of  temporary   differences
               attributable to the following:

                                                 2002              2001
                                             -----------       -----------
Accrued compensation                         $   546,000       $   167,000
Other accrued expenses                            73,000            71,000
Depreciation                                      40,000            50,000
Investments in equity investees                  369,000           369,000
Issuances of stock options and warrants        2,121,000         1,643,000
Net operating loss carryforwards               6,700,000         5,360,000
                                             -----------       -----------
                                               9,849,000         7,660,000
Less valuation allowance                      (9,849,000)       (7,660,000)
                                             -----------       -----------
    Totals                                   $        --       $        --
                                             ===========       ===========


               Due to the  uncertainties  related to,  among other  things,  the
               changes in the ownership of the Company,  which could subject its
               net  operating   loss   carryforwards   to   substantial   annual
               limitations,  and the extent  and  timing of its  future  taxable
               income,  the Company offset its deferred tax assets by equivalent
               valuation  allowances  as of  December  31,  2002 and  2001.  The
               Company had also offset the potential  benefits from its deferred
               tax assets by an  equivalent  valuation  allowance as of December
               31,  2000.  As  a  result  of  the  increases  in  the  valuation
               allowances of approximately $2,189,000 and $3,527,000 in 2002 and
               2001,  respectively,  there  are  no  credits  for  income  taxes
               reflected  in  the   accompanying   consolidated   statements  of
               operations to offset the Company's pre-tax losses.


Note 8 - Commitments and contingencies:

               Operating leases:
                  The  Company  leases  two  office   facilities   under  leases
                  classified as operating  leases for accounting  purposes which
                  expire in February  2003 and July 2004.  At December 31, 2002,
                  approximate  future minimum lease payments under the operating
                  leases in each of the years  subsequent  to December  31, 2002
                  were as follows:

                        Year Ending
                       December 31,                             Amount
                       ------------                             ------
                            2003                               $217,000
                            2004                                 98,000
                                                             ----------

                                Total                          $315,000
                                                               ========


                  Rent expense was approximately $456,000 and $458,000 in 2002
                  and 2001, respectively.

                                      F-20
<PAGE>


                     GRAPHCO HOLDINGS CORP. AND SUBSIDIARIES
                          (A Development Stage Company)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 8 - Commitments and contingencies:

               Litigation:
                  On May 31, 2002,  one of the holders of the Company's past due
                  convertible notes (see Note 5) obtained a judgment against the
                  Company in the Supreme Court of the State of New York,  County
                  of  New  York,   that   requires   the   Company  to  pay  her
                  approximately   $1,376,000   plus  any   applicable   interest
                  subsequent  to the date of the  judgment.  As of December  31,
                  2002,  the  Company  was  carrying  the  convertible  note  at
                  approximately $1,449,000, which was comprised of the principal
                  balance of $1,274,000  and accrued  interest of  approximately
                  $175,000.  The  Company  has been  attempting  to  negotiate a
                  forebearance  agreement with the  noteholder  and, as of March
                  19, 2003,  the  noteholder  had not taken any other actions to
                  enforce the judgment.  However,  management cannot assure that
                  the  Company  will be able to  reach  any  agreement  with the
                  noteholder for her continued forebearance and if she does take
                  additional actions against the Company such actions could have
                  a material adverse impact on the Company's financial condition
                  and its operations.

                  The Company is a party to various  other  claims and  lawsuits
                  incidental to its business. In the opinion of management,  the
                  resolution of such  contingencies  will not materially  affect
                  the consolidated financial position,  results of operations or
                  cash flows of the Company in subsequent years.

               Unpaid wages:
                  As of March 31, 2003, accrued expenses included  approximately
                  $1,368,000 for amounts  payable to current and former officers
                  and other  current and former  employees  that the Company did
                  not have the  resources to pay.  Although as of March 19, 2003
                  the  Company  was not  subject  to and was  not  aware  of any
                  actions  related to the  enforcement of claims for such unpaid
                  amounts,  management  cannot  assure that the Company  will be
                  able to reach any  agreement  with the employees or the former
                  employees if they do take action to enforce their claims; such
                  actions could have a material  adverse impact on the Company's
                  financial condition and its operations.




                                      F-21
<PAGE>

                     GRAPHCO HOLDINGS CORP. AND SUBSIDIARIES
                          (A Development Stage Company)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



Note 9 - Stock options and warrants:

               Employee stock option plans:
                  During 2000, the Company's Board of Directors adopted the 2000
                  Director Stock Option Plan (the "2000  Director  Option Plan")
                  which    authorized    grants   of   options    to    eligible
                  nonemployee/nonfounder  directors ("Eligible  Directors"),  as
                  defined,  for the  purchase of up to 600,000  shares of common
                  stock.  In conjunction  with the adoption of the 2000 Director
                  Option Plan,  the Board of Directors  also approved  grants of
                  options for the purchase of at least  10,000  shares of common
                  stock to each  Eligible  Director on December 1st of each year
                  from 2002  through  2009 at an  exercise  price that cannot be
                  less than the fair  market  value of the  common  stock at the
                  date of each grant.  Such  options  will be  exercisable  upon
                  issuance.  On January 7, 2002, the Board of Directors  amended
                  the 2000 Director Option Plan to authorized  grants of options
                  for the  purchase of up to 1,800,000  shares of common  stock,
                  subject to automatic  annual  increases  of 50,000  shares per
                  Eligible  Director  serving on the Board of  Directors.  As of
                  December  31, 2002,  there were options to purchase  1,270,000
                  shares  outstanding  under the 2000  Director  Option Plan and
                  options for the purchase of 780,000  shares were available for
                  grant.

                  During 2000, the Company's Board of Directors also adopted the
                  2000 Stock Option/Stock Incentive Plan (the "2000 Stock Option
                  Plan")  which   provides  for  the  grants  of  incentive  and
                  nonincentive   stock  options  to  the  Company's   directors,
                  officers,  employees and consultants for the purchase of up to
                  3,000,000  shares of common  stock.  As of December  31, 2002,
                  there were  options to  purchase  795,000  shares  outstanding
                  under the 2000 Stock  Option Plan and options for the purchase
                  of 2,205,000 shares were available for grant.

                  Options  granted under the 2000 Director  Option Plan and 2000
                  Stock  Option  Plan cannot be  exercisable  more than 10 years
                  after the date of grant.  Otherwise,  the terms of each option
                  and the manner of exercise  will be determined by the Board of
                  Directors.

               Shares subject to employee stock options:
                  A summary of the  status of the  Company's  shares  subject to
                  options  under the 2000  Director  Option  Plan and 2000 Stock
                  Option Plan and options granted by the Board of Directors that
                  are not subject to either of those  plans as of  December  31,
                  2002 and 2001 and the changes  during the years ended 2002 and
                  2001 is presented below:



                                      F-22
<PAGE>




                                      GRAPHCO HOLDINGS CORP. AND SUBSIDIARIES
                                           (A Development Stage Company)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



Note 9 - Stock  options and warrants  (continued):
            Shares  subject to employee stock options (continued):

<TABLE>
<CAPTION>
                                                        2002                                  2001
                                             -----------------------------          ---------------------------
                                                                Weighted                            Weighted
                                               Shares            Average             Shares          Average
                                                 or             Exercise              or             Exercise
                                               Price             Price               Price            Price
                                             ---------       -------------          -------       -------------
<S>                                          <C>             <C>                    <C>           <C>
Outstanding, beginning of year               1,607,000       $         .99          528,500       $        1.33
Granted (A)                                  1,525,000                 .60        1,242,000                 .91
Cancelled                                   (1,067,000)               (.99)        (163,500)              (1.33)
                                             ---------                              -------

Outstanding, end of year                     2,065,000       $         .23        1,607,000       $         .99
                                            ==========       =============       ==========       =============

Options exercisable, end of year             1,560,000                            1,607,000
                                            ==========                           ==========

Weighted average fair value of options
    granted during the year                 $     1.00                           $     2.50
                                            ==========                           ==========
</TABLE>


         (A)      Includes options to purchase 100,000 shares exercisable at
                  $1.33 per share granted in 2001 that were not subject to the
                  Company's stock option plans.

                  The following  table  summarizes  information  about the stock
                  options outstanding at December 31, 2002:

<TABLE>
<CAPTION>
                                                    Weighted
                                                    Average
                                                   Years of           Weighted                                    Weighted
                                                   Remaining           Average                                     Average
      Exercise                Number              Contractual         Exercise               Number               Exercise
       Prices               Outstanding               Life              Price              Exercisable              Price
     ---------               ---------                ----              -----               ---------               -----
<S>                          <C>                      <C>               <C>                 <C>                     <C>
         $ .60               1,525,000                8.50              $ .60               1,200,000               $ .60
           .65                 235,000                8.75                .65                 156,667                 .65
          1.33                 305,000                5.75               1.33                 203,333                1.33
                             ---------                                                      ---------
     $.60-1.33               2,065,000                8.40              $ .68               1,560,000               $ .65
     =========               =========               =====              =====               =========               =====
</TABLE>


                  Options outstanding at December 31, 2002 expire from 2003 to
                  2012.



                                      F-23
<PAGE>




                     GRAPHCO HOLDINGS CORP. AND SUBSIDIARIES
                          (A Development Stage Company)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



Note 9 - Stock  options and warrants  (continued):

               Shares  subject to employee stock options (concluded):
                  The fair value of the  Company's  common  stock  exceeded  the
                  exercise  price at the date that each option was granted to an
                  employee  during  2002 and  2001.  The  aggregate  excess  was
                  $418,148 and  $1,922,305  during 2002 and 2001,  respectively.
                  Since the Company has elected to continue to use the Intrinsic
                  Value  Method  pursuant  to APB  25 in  accounting  for  stock
                  options  granted to its employees  (see Note 2), the aggregate
                  excess  was  accounted  for  as  employee  compensation.   The
                  aggregate  excess for  options  that became  exercisable  upon
                  issuance  totaled  $31,363 and $288,148  during 2002 and 2001,
                  respectively,    and,   accordingly,   the   Company   charged
                  compensation  expense and increased additional paid-in capital
                  by those  amounts in those  respective  years.  The  aggregate
                  excess for options  that become  exercisable  over a period of
                  three  years  from  the  respective  dates  of  grant  totaled
                  $130,000 and  $1,771,040  during 2002 and 2001,  respectively,
                  and,  accordingly,  the Company charged unearned  compensation
                  and increased  additional  paid-in capital by those amounts in
                  those  respective  years.  As a result of the  cancellation of
                  options  during 2002 that were  initially  exercisable  over a
                  period  of  three   years,   the  Company   reduced   unearned
                  compensation   for   the   remaining   balance   of   unearned
                  compensation   related   to   those   options   by   $923,455.
                  Amortization  of unearned  compensation  totaled  $183,153 and
                  $465,541  during 2002 and 2001,  respectively.  The  remaining
                  balance of unearned compensation of $328,891 and $1,587,887 as
                  of  December  31,  2002  and  2001,  respectively,   has  been
                  reflected as a separate component of stockholders'  deficiency
                  in the accompanying consolidated balance sheets.

                  Pro  forma  net loss and pro forma net loss per share for 2002
                  and  2001  computed   using  a  fair  value  based  method  of
                  accounting  for stock options as required by SFAS 123 have not
                  been presented  because they do not differ materially from the
                  related  historical  amounts  reflected  in  the  accompanying
                  consolidated statements of operations.

               Shares subject to warrants:
                  The  following  table  summarizes  certain   information  with
                  respect to warrants to purchase shares of the Company's common
                  stock  outstanding  as of  December  31, 2002 and 2001 and the
                  changes in outstanding warrants during 2002 and 2001:



                                      F-24
<PAGE>

                     GRAPHCO HOLDINGS CORP. AND SUBSIDIARIES
                          (A Development Stage Company)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 9 - Stock  options and warrants  (continued):
               Shares  subject to warrants (concluded):

<TABLE>
<CAPTION>
                                                           2002                                   2001
                                                -----------------------------           ------------------------------
                                                                   Exercise                               Exercise
                                                 Shares             Prices                Shares           Prices
                                                ---------      --------------           ---------       --------------
<S>                                             <C>            <C>      <C>             <C>             <C>      <C>
  Outstanding, beginning of year                5,362,032      $1.00 to $5.00           3,980,852       $1.00 to $5.00
  Sold or issued in connection with
     private placement of convertible
     notes (A) (F)                                                                      1,141,180        1.33 to  5.00
  Issued for interest on or extension of
     past due convertible notes (A) (F)           468,160                2.50             200,000                 1.50
  Issued in connection with negotiations
     for the extension of convertible
     notes (A) (F)                                                                         40,000        2.00 to  2.50
  Issued for legal services (B) (D) (F)           500,000                .001
  Issued for consulting services (C) (D)
     (F)                                          622,000                1.00
  Exercised                                       (28,000)              (1.00)
                                                ---------                               ---------

  Outstanding, end of year (E)                  6,924,192      $.001 to $5.00           5,362,032       $1.00 to $5.00
                                                =========      ==============           =========       ==============
</TABLE>

                      (A)   See Note 5.

                      (B)   The Company  issued these  warrants as a payment for
                            legal  services in December  2002.  The warrants are
                            exercisable   through  December  2007.  The  Company
                            valued  these  warrants  at  $408,975  based  on the
                            minimum  value   option-pricing  model  and  charged
                            selling,  general and  administrative  expenses  and
                            increased  additional paid-in capital by that amount
                            in 2002. A principal  of the law firm that  received
                            the  warrants is also a director  and officer of the
                            Company.

                      (C)   The Company  issued these  warrants as a payment for
                            consulting  services in December  2002. The warrants
                            are exercisable  through  December 2007. The Company
                            valued  these  warrants at  $1,244,000  based on the
                            minimum  value   option-pricing  model  and  charged
                            selling,  general and  administrative  expenses  and
                            increased  additional paid-in capital by that amount
                            in 2002.

                      (D)   The   issuances  of  these   warrants  were  noncash
                            transactions   and,   accordingly,   they   are  not
                            reflected  in  the  accompanying  2002  consolidated
                            statement of cash flows.

                      (E)   All of the warrants outstanding at December 31, 2002
                            were exercisable and expire from 2003 through 2010.

                      (F)   The fair value of all of the warrants  issued by the
                            Company  to  nonemployees  for  goods  and  services
                            during  2002  and  2001  was  determined  using  the
                            minimum  value  option-pricing  model in  accordance
                            with SFAS 123 based on the following assumptions: an
                            expected life of the options of one to five years; a
                            risk free interest rate of 4.5%;  and  volatility of
                            100%.


                                      F-25
<PAGE>

                     GRAPHCO HOLDINGS CORP. AND SUBSIDIARIES
                          (A Development Stage Company)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 9 - Stock options and warrants (concluded):

               Restatement  of  financial  statements  related  to  issuance  of
               warrants:
                  Subsequent  to  the  original  issuance  of  its  consolidated
                  financial  statements as of December 31, 2002 and for the year
                  then ended,  the Company  determined that it had not accounted
                  for the issuance of the warrants to purchase 622,000 shares of
                  common  stock  exercisable  at $1.00 per share that had a fair
                  value of $1,244,000 as described above. The accompanying  2002
                  consolidated   financial  statements  have  been  restated  to
                  include  a  charge  to  selling,  general  and  administrative
                  expenses  and an increase in  additional  paid-in  capital for
                  that amount. As a result of this correction, the Company's net
                  loss and net loss per share increased from $5,972,104 and $.34
                  per share as originally  reported to  $7,216,104  and $.41 per
                  share as restated.


Note 10- Other changes in stockholders' deficiency:
               The Company's Articles of Incorporation authorize the issuance of
               up to  5,000,000  shares of  preferred  stock,  of which  333,333
               shares have been  designated  as Series A  convertible  preferred
               stock  ("Series  A  shares")  and  4,500,000   shares  have  been
               designated as Series B  convertible  preferred  stock  ("Series B
               shares").  As of December  31, 2002 and 2001,  there were 225,029
               Series A shares  outstanding.  Each Series A share is convertible
               into three shares of the Company's  common stock at the option of
               the  holder.  The holder of each  Series A share is  entitled  to
               receive an annual dividend of $.75 per share if and when declared
               by the  Company's  Board of  Directors  and $15.00 per share plus
               cumulative  dividends  in  arrears  upon the  liquidation  of the
               Company.  Holders  of  Series  A shares  do not  have any  voting
               rights.  During 2001,  the Company issued 19,452 shares of common
               stock with an  aggregate  fair value of $48,628 as  dividends  to
               holders  of  112,251  Series  A  shares  in  exchange  for  their
               agreement to waive their right to  cumulative  cash  dividends on
               those shares  through  December 31, 2001. The issuances of common
               shares to pay the  dividends  on the Series A shares were noncash
               transactions  and,  accordingly,  they are not  reflected  in the
               accompanying 2001 consolidated statement of cash flows.

               From June through  December 2002, the Company sold 469,000 Series
               B shares  through  private  placements  and received  proceeds of
               $362,760, net of related expenses of $65,740. Each Series B share
               is  convertible  into one share of the Company's  common stock at
               the option of the  holder.  Holders  of Series B shares  were not
               entitled to  dividends  and had no voting  rights.  The holder of
               each Series B share was entitled to receive  $2.00 per share plus
               cumulative  dividends  in  arrears  upon the  liquidation  of the
               Company.   Each   Series  B  share  sold  by  the   Company   was
               automatically  convertible into one share of the Company's common
               stock when the Company became a publicly-held company as a result
               of the merger that was consummated on December 13, 2002 (see Note
               1) and its  ratification  by  stockholders.  The  Company did not
               obtain  the  required  ratification  until  March  19,  2003 and,
               accordingly, the Series B shares were shown as outstanding in the
               accompanying consolidated balance sheet as of December 31, 2002.



                                      F-26
<PAGE>

                     GRAPHCO HOLDINGS CORP. AND SUBSIDIARIES
                          (A Development Stage Company)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 10- Other changes in stockholders' deficiency (concluded):
               The  Company is also  authorized  to issue  40,000,000  shares of
               common stock with a par value of $.001 per share.

               In  addition  to the  issuances  of  shares  of  preferred  stock
               described  above and the  issuances and  cancellations  of common
               stock,  options and  warrants  described in Notes 1, 5 and 9, the
               Company  issued  250,000  shares of its common stock as a payment
               for financial  consulting  services in 2002. The Company  charged
               the fair value of the shares of $250,000 to selling,  general and
               administrative  expenses and increased additional paid-in capital
               by that  amount  in 2002.  The  issuance  of these  shares  was a
               noncash transaction and, accordingly,  it is not reflected in the
               accompanying 2002 consolidated statement of cash flows.

               The Company had  conducted  and  discontinued  certain  unrelated
               operations  prior to the  commencement of its  development  stage
               activities  related to biometric security solutions on January 1,
               1998. The Company's  accumulated deficit at December 31, 2002 and
               2001 was comprised of the following:

<TABLE>
<CAPTION>
                                                            2002             2001
                                                        -----------      -----------
<S>                                                     <C>              <C>
Deficit accumulated prior to the development stage      $   820,132      $   820,132
Deficit accumulated in the development stage             22,946,232       15,730,128
                                                        -----------      -----------

    Totals                                              $23,766,364      $16,550,260
                                                        ===========      ===========
</TABLE>


Note 11- Other related party transactions:

               In 2000, the Company acquired  technology from unrelated  parties
               for synthesizing  realistic video sequences of a person speaking,
               which makes it possible to create photo-realistic animated humans
               for e-commerce,  e-support and other  applications.  In 2002, the
               Company  licensed the  technology  to NGM Tec,  Inc.  ("NGM") for
               $2,000,000  plus  royalties  of 3% and  NGM's  agreement  to make
               payments  totaling  $250,000 to one of the  unrelated  sellers in
               connection   with  the  completion  of  the  development  of  the
               technology. Two officers of the Company are also directors of the
               Company and NGM. Although,  NGM paid the Company $328,000 in 2002
               and has continued to make the required  payments to the unrelated
               party in connection with the completion of the technology, it has
               failed to make all of its remaining  payments to the Company and,
               accordingly,  it was in default of its obligations to the Company
               as of December 31, 2002. The Company has no remaining obligations
               to NGM and, accordingly,  it recognized the amount it was paid by
               NGM as revenue in 2002 (see Note 2).  Although  the  Company  had
               begun to renegotiate the terms of the license  agreement with NGM
               as of March 19,  2003,  it had not taken any  actions to void the
               license  agreement or obtain another  licensee.  The Company will
               not accrue any  additional  amounts as  receivables  and  revenue
               until it is probable  that NGM will be able to make its  payments
               to the Company and the unrelated party.

                                      * * *

                                      F-27