SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 
 Form 10-KSB
 
 [X]ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
 For the fiscal year ended December 31, 2003
 
 [  ]TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
 For the transition period from _______________ to _______________.
 
 
 Commission file number: 000-49688
 
 Speedemissions, Inc.
 (Name of small business issuer in its charter)
 
 Florida
(State or other jurisdiction of
incorporation or organization)
33-0961488
(I.R.S. Employer
Identification No.)1139 Senoia Road, Suite B
Tyrone, Georgia
(Address of principal executive offices)
30290
(Zip Code) 
 Issuers telephone number (770) 306-7667
 
 Securities registered under Section 12(g) of the Exchange Act:
 
 Common stock, par value $0.001
 (Title of class)
 
 Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X __ No __  .
 
 Check if there is no disclosure of delinquent filers pursuant to Item 405 of Regulation S-B is not contained in this form, and no disclosure will be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-KSB or any amendment to this Form 10-KSB. [  ]
 
 State issuers revenues for its most recent fiscal year.  The issuers revenues for the year ended December 31, 2003 were $612,948.
 
 State the aggregate market value of voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was sold, or the average bid and asked prices of such common equity, as of a specified date within the past 60 days. (See definition of affiliate in rule 12b-2 of the Exchange Act.) $2,627,791, based on the closing price of $0.65 for our common stock on March 16, 2004.
 
 
 State the number of shares outstanding of each of the issuers classes of common stock, as of the latest practicable date. As of March 15, 2004, there were 19,166,937 shares of common stock, par value $0.001, issued and outstanding.
 
 DOCUMENTS INCORPORATED BY REFERENCE
 
 If the following documents are incorporated by reference, briefly describe them and identify the part of the form 10-KSB (e.g., Part I, Part II, etc.) into which the document is incorporated: (1) any annual report to security holders; (2) any proxy or information statement; and (3) any prospectus filed pursuant to rule 424(b) or (c) of the Securities Act of 1933 (Securities Act). The listed documents should be clearly described for identification purposes (e.g., annual report to security holders for fiscal year ended December 24, 1990). None.
 
 Transitional Small Business Disclosure Format (check one):
 
 Yes __   No  X
 
 
    Speedemissions, Inc.
 
 TABLE OF CONTENTS
  
 PART I

3ITEM 1 -
DESCRIPTION OF BUSINESS
3ITEM 2 -
DESCRIPTION OF PROPERTY
8ITEM 3 -
LEGAL PROCEEDINGS
9ITEM 4 -
SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
9PART II

10ITEM 5 -
MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
10ITEM 6 -
MANAGEMENTS DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
12ITEM 7 -
FINANCIAL STATEMENTS
17ITEM 8 -
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
18ITEM 8A -
DISCLOSURE CONTROLS AND PROCEDURES
18PART III

19ITEM 9 -
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
19ITEM 10 -
EXECUTIVE COMPENSATION
22ITEM 11 -
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
24ITEM 12 -
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
25ITEM 13 -
EXHIBITS AND REPORTS ON FORM 8-K
27ITEM 14 -
CONTROLS AND PROCEDURES
30ITEM 15 -
PRINCIPAL ACCOUNTANT FEES AND SERVICES
30




2







PART I















ITEM 1 - DESCRIPTION OF BUSINESS





Introduction















Our Principal Services and Markets










Recent Acquisitions










Our Typical Site










3




Our Growth Strategy















Industry Background  Government and Regulatory Overview

























4


































5




Emissions Testing in the State of Georgia








































Emissions Testing in the State of Texas










6














Operating Strategy










·  Seek to secure and maintain multiple stations at well-traveled intersections and other locations that are easily reachable by our customers;


·  Coordinate operations, training and advertising in each market to enhance revenue and maximize cost efficiencies within each market;


·  Implement regional management and marketing initiatives in each of our markets;


·  Seek to acquire existing testing sites where significant volume potential exists; and


·















Intellectual Property










7




Competition










Research and Development










Compliance with Environmental Laws










Employees










ITEM 2 - DESCRIPTION OF PROPERTY





Corporate Office










Testing Facilities









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Site
City
State
Monthly Rent
Lease ExpirationGeorgia Facilities27 East Crogan Street
Lawrenceville
GA
Company owned
N/A100 Peachtree Parkway
Peachtree City
GA
$1,705
May 20068405 Tara Boulevard*
Jonesboro
GA
$1,500
January 2008Highway 85*
Riverdale
GA
$2,250
January 20084853 Canton Road
Marietta
GA
$1,000
September 20082720 Sandy Plains Road
Marietta
GA
$3,031
December 20048437 Roswell Road
Atlanta
GA
$2,750
November 20039072 Highway 92
Woodstock
GA
$1,800
April 200714865 Highway 92
Woodstock
GA
$1,700
April 20082887 Canton Road
Marietta
GA
$2,500
July 2008213 Riverstone Parkway
Canton
GA
$1,300
November 2007731 Powder Springs Street
Marietta
GA
$2,700
month to month1869 Cobb Parkway
Marietta
GA
$2,756
August 20042625 S. Cobb Drive
Smyrna
GA
$2,800
March 20052909 N. Druid Hills
Decatur
GA
$1,500
month to month3826 Clairmont Road
Chamblee
GA
$3,500
March 2005* Under constructionTexas Facilities11831 Jones Road
Houston
TX
$2,500
June 200412160 Bissonnet Street
Houston
TX
$2,560
September 20045130 State Highway 6
Houston
TX
$2,120
May 2005







ITEM 3 - LEGAL PROCEEDINGS










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












|
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PART II





ITEM 5 - MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS





Market Information

















High
LowFiscal year ended December 31, 2002:Fourth Quarter

$
0.00

$
0.00Fiscal year ended December 31, 2003:First Quarter

$
0.00

$
0.00Second Quarter

$
0.00

$
0.00Third Quarter

$
0.25

$
0.00Fourth Quarter

$
0.60

$
0.20Fiscal year ended December 31, 2004:First Quarter (through February 27, 2004)

$
1.01

$
0.30












Holders










Dividends










10









Securities Authorized for Issuance Under Equity Compensation Plans














Plan Category

Number of Securities to be issued upon exercise of outstanding options, warrants and rights



(a)
Weighted-average exercise price of outstanding options, warrants and rights



(b)
Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))
****
(c)Equity compensation plans
approved by security
holders


430,000

$
0.25


570,000Equity compensation plans
not approved by security
holders


25,000

$
0.01


N/ATotal


455,000

$
0.24


570,000
   
 
 Recent Sales of Unregistered Securities
 
  
 In October 2003, we issued 300,000 shares of common stock, restricted in accordance with Rule 144, to the designees of V2R, LLC, a consulting firm owned by one of our directors, Bahram Yusefzadah, for services rendered. The issuance was exempt from registration pursuant to Section 4(2) of the Securities Act of 1933, and the shareholder was an accredited investor.
 
   11
  
   ITEM 6 - MANAGEMENTS DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
 
 Disclaimer Regarding Forward Looking Statements
 
  
  
 Overview
 
  
 12
   
  
  
 Explanatory Paragraph in Report of Our Independent Certified Public Accountants
 
  
  
 Year ended December 31, 2003 compared to the year ended December 31, 2002
 
 Results of Operations
 
  Introduction
 
  
 Revenues and Loss from Operations
 
   13
  
 Year Ended
December 31, 2003
Year Ended
December 31, 2002
Percentage
ChangeRevenue

$
612,948

$
320,676


91
%Cost of Emission Certificates


173,495


95,976


81
%General & Administrative Expenses


1,781,370


742,018


140
%Loss from Operations


(1,341,917
)

(517,318
)

159
%
    
  
  
 Interest Expense, Taxes, and Net Loss
 
  
 Year Ended
December 31, 2003
Year Ended
December 31, 2002
Percentage
ChangeInterest Expense

$
137,276

$
91,562


50
%Income Tax Benefit


-


-


-Net Loss


(1,479,193
)

(608,880
)

143
%Basic and Diluted Loss per Share


(0.16
)

(0.09
)

78
%
    
  
 14
  Three Months Ended December 31, 2003 Compared to the Three Months Ended December 31, 2002
 
 Revenues and Loss from Operations
 
  
 Quarter
Ended
December 31,
2003
Quarter
Ended
September 30,
2003
Quarter
Ended
December 31,
2002Revenue

$
145,213

$
146,715

$
132,201Cost of Emission Certificates


43,115


43,581


40,072General & Administrative Expenses


600,237


490,962


228,738Loss from Operations


(498,139
)

(387,828
)

(136,609
)
 
  
  
 Interest Expense, Taxes, and Net Loss
 
  
 Quarter
Ended
December 31,
2003
Quarter
Ended
September 30,
2003
Quarter
Ended
December 31,
2002Interest Expense

$
33,606

$
39,976

$
28,318Income Tax Benefit


-


-


-Net Loss


(531,745
)

(427,624
)

(164,927
)Basic and Diluted Loss per Share


(0.05
)

(0.04
)

(0.03
)
 
  
 15
    Liquidity and Capital Resources
 
 Introduction
 
    
  
 As of
December 31,
2003
As of
September 30, 2003
ChangeCash

$
9,231

$
31,132

$
(21,901
)Total current assets


27,629


37,533


(9,904
)Total assets


548,206


629,180


(80,974
)Total current liabilities


1,243,997


2,002,576


(758,579
)Total liabilities


1,243,997


2,552,576


(1,308,579
)
 
 Cash Requirements
 
  
  
 16
  Sources and Uses of Cash
 
  
    
 
 
  
 Critical Accounting Policies
 
  
 ITEM 7 - FINANCIAL STATEMENTS
 
 Index to Financial StatementsReport of Independent Certified Public Accountants
F-1Consolidated Balance Sheets
F-3Consolidated Statements of Operations
F-4Consolidated Statements of Stockholders' Deficit
F-5Consolidated Statements of Cash Flows
F-6Notes to Financial Statements
F-7
 
 17
  ITEM 8 - CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
 
  
 ITEM 8A  DISCLOSURE CONTROLS AND PROCEDURES
 
  
 18 PART III
 
 ITEM 9 - DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
 
 Directors and Executive Officers
 
  
 Name

Age

Position(s)Richard A. Parlontieri

58

Director, President, Secretary, and Treasurer (2003)Bahram Yusefzadeh

58

Director (2003)Bradley A. Thompson

39

Director (2003)
 
 Richard A. Parlontieri
 
  
  
  
 19
  Bahram Yusefzadeh
 
  
  
  
  
  
  
 Bradley A. Thompson
 
 20
   
  
  
  
 Board Committees
 
  
  
 21
  Compliance with Section 16(a) of the Securities Exchange Act of 1934
 
  
  
 Name
No. of Late Reports
No. of Transactions
Reported Late
No. of
Failures to FileRichard A. Parlontieri
2
2
-0-Bahram Yusefzadeh
1
1
-0-Bradley A. Thompson
1
1
-0-GCA Strategic Investment Fund Ltd.
2
2
-0-
 
 Code of Ethics
 
  
 ITEM 10 - EXECUTIVE COMPENSATION
 
  
  
 22 Annual Compensation
Long Term CompensationAwards
PayoutsName and
Principal Position

Year
Salary
($)
Bonus
($)
Other Annual
Compensation
($)
Restricted
Stock
Awards
($)
Securities
Underlying
Options SARs
(#)
LTIP
Payouts
($)
All Other
Compensation
($)Richard A. Parlontieri


2003


180,000


-0-


5,400


-0-


410,000


-0-


-0-Chairman, President,


2002


155,000


10,000


7,200


-0-


-0-


-0-


-0-Secretary, CFO


2001


60,000


10,000


7,500


-0-


-0-


-0-


-0-Carl M. Berg


2002


-0-


-0-

$
5,125


-0-


-0-


-0-


-0-Chairman, President,
Secretary, Treasurer


2001


-0-


-0-


-0-


-0-


-0-


-0-


-0-
 
 
 
 OPTION/SAR GRANTS IN LAST FISCAL YEAR
(Individual Grants)Name
Number of Securities
Underlying
Options/SARs Granted
(#)
Percent of Total
Options/SARs
Granted
to Employees In Fiscal
Year
Exercise or Base Price
($/Sh)
Expiration DateRichard A. Parlontieri
400,000
93%
$0.25
12/18/13Richard A. Parlontieri
10,000
2%
$0.25
12/18/13Carl M. Berg
-0-
N/A
N/A
N/A
 
 
 
 AGGREGATED OPTIONS/SAR EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION/SAR VALUESName
Shares Acquired
On
Exercise
(#)
Value
Realized
($)
Number of Unexercised
Securities Underlying
Options/SARs at FY-End
(#)
Exercisable/Unexercisable
Value of Unexercised
In-The-Money
Option/SARs
at FY-End
($)
Exercisable/UnexercisableRichard A. Parlontieri
N/A
N/A
N/A
N/ACarl M. Berg
N/A
N/A
N/A
N/A
 
  
  
 23
   
 ITEM 11 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
 
  
 
 Common StockTitle of Class

Name and Address of
Beneficial Owner

Amount and
Nature of
Beneficial Ownership

Percent
of Class (1)Common Stock

GCA Strategic Investment Fund Ltd (2)
c/o Prime Management Ltd
Mechanics Bldg 12 Church St. HM11
Hamilton, Bermuda HM 11

19,472,182 (3)

80.5 % (3)Common Stock

Richard A. Parlontieri (4)
1029 Peachtree Parkway North
Suite 310
Peachtree City, GA 30269

1,010,000 (5)

5.1 % (5)Common
Stock

Bahram Yusefzadeh (4)
2180 West State Road
Suite 6184
Longwood, FL 32779

187,000 (6)

<1% (6)Common
Stock

Bradley A. Thompson (4)(7)
227 King Street
Frederiksted, USVI 00840

10,000 (7)(8)

<1% (8)All Officers and Directors
as a Group (3 Persons)

1,207,000 (5)(6)(7)(8)

6.1 %
(5)(6)(8)
 
 
 
 
 
 
 
 24
  
 
 
 
 
 
 
 
 
 
  
 ITEM 12 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
 
 Acquisition of Subsidiary
 
  
 ·  in exchange for 100% of the stock of Speedemissions, we issued 9,000,000 shares of our common stock to the Speedemissions shareholders, which after giving effect to the redemption of our stock from our previous officer and director described below, represented 90% of our outstanding stock. Mr. Parlontieri received 600,000 shares of our common stock, representing 6% of the outstanding stock, in this transaction;
 ·  5,044,750 shares of our common stock held by our the sole officer and director prior to the effectiveness of the agreement, were redeemed by us, and he resigned as our officer;
 ·
 
 Financing Transactions with Shareholder
 
  
 25
   
  
 Employment Agreements and Compensation of Officers and Directors
 
  
  
  
  
 26
   
  
  
 Loans from Officers and Directors
 
  
 Date
Principal Amount
Due DateOctober 24, 2003
$40,000
April 21, 2004October 30, 2003
$50,000
April 27, 2004November 7, 2003
$100,000
May 5, 2004December 26, 2003
$75,000
June 24, 2004January 2, 2004
$25,000
June 30, 2004January 4, 2004
$10,000
July 2, 2004January 30, 2004
$15,000
July 28, 2004
 
 ITEM 13 - EXHIBITS AND REPORTS ON FORM 8-K
 
 (a)  Exhibits
 2.1 (1)

Acquisition Agreement dated June 13, 2003 with Speedemissions, Inc.2.2 (8)

Asset Purchase Agreement dated January 21, 20042.3 (9)

Asset Purchase Agreement dated January 30, 20043.1 (2)

Articles of Incorporation of SKTF Enterprises, Inc.
 27
 3.2 (3)

Articles of Amendment to Articles of Incorporation of SKTF Enterprises, Inc.3.3 (2)

Bylaws of SKTF Enterprises, Inc.4.1 (7)

Certificate of Designation of Series A Convertible Preferred Stock10.1 (2)

SKTF, Inc. 2001 Stock Option Plan10.2 (10)

Form of Incentive Stock Option Agreement relating to options granted under the 2001 Stock Option Plan10.3 (10)

Form of Non Statutory Stock Option Agreement relating to options granted under the 2001 Stock Option Plan10.4 (10)

Form of Common Stock Purchase Agreement relating to restricted stock granted under the 2001 Stock Option Plan10.5 (4)

Consulting Agreement with V2R, LLC dated June 16, 200310.6 (4)

Consulting Agreement with V2R, Inc. dated June 13, 200310.7 (4)

Warrant Agreement issued to V2R, LLC dated June 16, 200310.8 (3)

First Amendment to SKTF, Inc. 2001 Stock Option Plan dated August 27, 200310.9 (5)

Form of Indemnification Agreement10.10 (5)

Employment Agreement with Richard A. Parlontieri dated September 15, 200310.11 (6)

Acknowledgement and Assumption of Liabilities with GCA Strategic Investment Fund Ltd. dated October 9, 200310.12 (6)

Acknowledgement and Assumption of Liabilities with V2R, LLC dated October 9, 200310.13 (5)

Form of Promissory Note to GCA Strategic Investment Fund Limited10.14 (5)

Form of 7% Convertible Debenture to GCA Strategic Investment Fund Limited10.15

Form of Unsecured Promissory Note issued to Calabria Advisers, LLC10.16

First Amendment to Employment Agreement for Richard A. Parlontieri dated December 19, 200310.17

First Amendment to Secured Promissory Note dated December 30, 200310.18

Consulting Agreement with V2R, LLC dated January 1, 200410.19

Form of Warrant issued to V2R, LLC dated January 1, 200410.20 (7)

Subscription and Securities Purchase Agreement dated as of January 21, 200410.21 (7)

Common Stock Purchase Warrant issued to GCA dated January 21, 2004
   28
  10.22 (7)

Registration Rights Agreement dated January 21, 200410.23

Warrant issued to Richard A. Parlontieri dated February 18, 200410.24

Warrant issued to Richard A. Parlontieri dated February 18, 200410.25 (9)

Registration Rights Agreement dated January 30, 200410.26 (9)

Bill of Sale and Assignment dated January 30, 200421

Subsidiaries of Speedemissions, Inc.23.1

Consent of Ramirez International23.2

Consent of Bennett Thrasher PC31.1

Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer31.2

Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer32.1

Chief Executive Officer Certification Pursuant to 18 USC, Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.32.2

Chief Financial Officer Certification Pursuant to 18 USC, Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.































































29




(b)  Reports on Form 8-K















ITEM 14  CONTROLS AND PROCEDURES










ITEM 15  PRINCIPAL ACCOUNTANT FEES AND SERVICES





Audit Fees










Audit  Related Fees










Tax Fees










All Other Fees
















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SIGNATURES















|Dated:March 29, 2004 | /s/ Richard A. Parlontieri             
|-------------------- | ---------------------------------------
|                     |                                        
|                     | By:    Richard A. Parlontieri          
|                     | Its:President, Chief Financial Officer,
|                     | and Secretary                          

















|Dated:March 29, 2004 | /s/ Richard A. Parlontieri         
|-------------------- | -----------------------------------
|                     |                                    
|                     | By:Richard A. Parlontieri, Director
|                     |                                    
|                     |                                    
|Dated:March 29, 2004 | /s/ Bahram Yusefzadeh              
|                     |                                    
|                     | By:Bahram Yusefzadeh, Director     
|                     |                                    
|                     |                                    
|Dated:March 29, 2004 | /s/ Bradley A. Thompson            
|                     |                                    
|                     | By:Bradley A. Thompson, Director   




31




Speedemissions, Inc .
 (Accounting and Reporting Successor
 to SKTF Enterprises, Inc.)
 
 Consolidated Financial Statements
 
 December 31, 2003 and 2002
 
 
    Independent Auditors Report
 
 
   
  
  
  
  
 F - 1
      
 
 
    
 F - 2
  Speedemissions, Inc.(Accounting and Reporting Successor to SKTF Enterprises, Inc. - see Note 1)Consolidated Balance SheetsDecember 31, 2003 and 2002**2003**

**2002**AssetsCurrent assets:Cash

$
9,231



$
136,806Other current assets


18,398




11,338Total current assets


27,629




148,144Property and equipment, at cost less accumulateddepreciation and amortization


509,252




557,406Deferred financing costs, less accumulated amortization


-




78,513Other assets


11,325




6,100$
548,206



$
790,163Liabilities and Stockholders' DeficitCurrent liabilities:Current portion of long-term debtpayable to related parties

$
915,000



$
775,000Accrued interest on long-term debtpayable to related parties


121,946




120,542Accounts payable and accrued liabilities


207,051




71,990Total current liabilities


1,243,997




967,532Long-term debt payable to stockholder,less current portion


-




750,000Commitments and contingenciesStockholders' deficit:Preferred stock, $.001 par value, 5,000,000 sharesauthorized, no shares issued or outstanding


-




-Preferred stock, $.01 par value, 10,000,000 sharesauthorized, no shares issued or outstanding


-




-Common stock, $.001 par value, 100,000,000 sharesauthorized, 16,270,619 shares issued and outstanding


16,271Common stock, $.01 par value, 40,000,000 sharesauthorized, 7,142,857 shares issued and outstanding


-




71,429Additional paid-in capital


3,198,622




1,432,693Accumulated deficit


(3,910,684
)



(2,431,491
)Total stockholders' deficit


(695,791
)



(927,369
)$
548,206



$
790,163See accompanying notes to consolidated financial statements.
  F - 3
  Speedemissions, Inc.(Accounting and Reporting Successor to SKTF Enterprises, Inc. - see Note 1)Consolidated Statements of OperationsFor the Years Ended December 31, 2003 and 2002**2003**
**2002**Revenue

$
612,948

$
320,676Costs and expenses:Cost of emissions certificates


173,495


95,976General and administrative expenses


1,781,370


742,018Loss from operations


(1,341,917
)

(517,318
)Interest expense


137,276


91,562Loss before income tax benefit


(1,479,193
)

(608,880
)Income tax benefit


-


-Net loss

$
(1,479,193
)
$
(608,880
)Basic and diluted net loss per share

$
(0.16
)
$
(0.09
)Weighted average shares outstanding, basic and diluted

$
9,009,795

$
7,142,857See accompanying notes to consolidated financial statements.
   F - 4
 Speedemissions, Inc.(Accounting and Reporting Successor to SKTF Enterprises, Inc. - see Note 1)Consolidated Statements of Stockholders' DeficitFor the Years Ended December 31, 2003 and 2002Common Stock

Additional
AccumulatedShares
Amount

**Paid-In Capital**
DeficitBalance at January 1, 2002, as adjusted


7,142,857

$
71,429





$
1,432,693



$
(1,822,611
)Net loss


-


-






-




(608,880
)Balance at December 31, 2002


7,142,857


71,429






1,432,693




(2,431,491
)Recapitalization due to reverse acquisition


2,857,143


(61,429
)





61,429




-Stock issued for services


600,000


600






119,400




-Conversion of debentures


5,670,619


5,671






1,579,740




-Compensation due to stock option grant


-


-






5,360




-Net loss


-


-






-




(1,479,193
)Balance at December 31, 2003


16,270,619

$
16,271





$
3,198,622



$
(3,910,684
)See accompanying notes to consolidated financial statements.
   F - 5
  Speedemissions, Inc.(Accounting and Reporting Successor to SKTF Enterprises, Inc. - see Note 1)Consolidated Statements of Cash FlowsFor the Years Ended December 31, 2003 and 20022003
2002Cash flows from operating activities:Net loss

$
(1,479,193
)
$
(608,880
)Adjustments to reconcile net lossto net cash used in operating activities:Depreciation and amortization


207,476


90,733Acquisition fee


125,000


-Stock Issued for Services


120,000


-Stock option grant


5,360


-Changes in assets and liabilities:Other current assets


(7,060
)

(6,746
)Other assets


(5,225
)

(6,100
)Accrued interest on long-term debt payable to related parties


136,815


91,561Accounts payable and accrued liabilities


135,061


36,897Net cash used in operating activities


(761,766
)

(402,535
)Cash flows from investing activities:Net purchases of property and equipment


(47,809
)

(219,772
)Net cash used in investing activities


(47,809
)

(219,772
)Cash flows from financing activities:Proceeds from issuance of long-term debtpayable to related parties


715,000


750,000Financing costs


(33,000
)

(90,000
)Net cash provided by financing activities


682,000


660,000Net increase (decrease) in cash


(127,575
)

37,693Cash at beginning of year


136,806


99,113Cash at end of year

$
9,231

$
136,806Supplemental Disclosure of Cash Flow InformationCash paid during the year for interest

$
-

$
-Cash paid during the year for income taxes

$
-

$
-In 2003, $1,450,000 of convertible debentures plus accrued interest of approximately $135,000 was converted into 5,670,619 shares of Speedemissions, Inc. common stock.*See accompanying notes to consolidated financial statements.*
   F - 6
    Speedemissions, Inc.
 (Accounting and Reporting Successor to SKTF Enterprises, Inc.)
 
 Notes to Consolidated Financial Statements
 December 31, 2003 and 2002
 
 
 Note 1: Basis of Presentation
 
  
  
  
  
  
 
 F - 7   
  
  
  
  
  
 
 Note 2: Nature of Operations and Summary of Significant Accounting Policies
 
 Nature of Presentation
 
  
   F - 8  Nature of Operations
 
  
 Speedemissions
 
 Use of Estimates in Financial Statements
 
  
 Revenue Recognition
 
  
  
  
 Lease Revenue
  F - 9  
 Revenue Recognition in Financial Statements Revenue Recognition
 
 Methods of Depreciation and Amortization
 
  
  
  
  
 Impairment
 
  
 Income Taxes
 
  
 Pre-Opening Costs
 
  
 Advertising Costs
 
   F - 10  Fair Value of Financial Instruments
 
  
 Derivative Financial Instruments
 
 Accounting for Derivative Instruments and Hedging Activities , Accounting for Derivative Instruments and Hedging Activities  Deferral of the Effective Date of FASB Statement 133, Accounting for Certain Derivative Instruments and Certain Hedging Activities
 
  
 Net Loss Per Share
 
  
  
  2003
2002Convertible debentures


-


3,571,429Options


430,000


-Warrants


130,000


-560,000


3,571,429
 
   F - 11  Cash and Cash Equivalents
 
  
 Regulatory Impact
 
  
 Accounting for Stock-Based Compensation
 
 Accounting for Stock Issued to Employees Accounting for Stock-Based Compensation Accounting for Stock-Based Compensation  Transition and Disclosure,
  2003
2002Net loss, as reported

$
(1,479,193
)
$
(608,880
)Deduct: total stock-based employee compensation expensedetermined under the fair value method for all awards, net ofrelated tax effects


(4,480
)

-Pro forma net loss

$
(1,483,673
)
$
(608,880
)Loss per share:Basic and diluted , as reported

$
(0.16
)
$
(0.09
)Basic and diluted, pro forma

$
(0.16
)
$
(0.09
)
  F - 12  Recently Issued Accounting Standards
 
 Accounting for Certain Financial Instruments wit Characteristics of both Debt and Equity
 
 Amendment of Statement 133 on Derivative Instruments and Hedging Activities ,
 
 Accounting for Costs Associated with Exit or Disposal Activities ,
 
 Rescission of FASB Statements No. 4, 44, and 64, Amendment of FASB Statement No. 13, and Technical Correction ,
 
 Guarantors Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others
 
 Consolidation of Variable Interest Entities
  F - 13 
 Note 3: Factors Affecting Operations
 
  
   Note 4: Property and Equipment
 
   2003
2002Land

$
240,000

$
240,000Building


10,000


10,000Emission testing equipment


316,841


316,841Furniture, fixtures and office equipment


10,922


6,399Leasehold improvements


155,708


111,826733,471


685,066Less accumulated depreciation and amortization


224,219


127,660$
509,252

$
557,406
 
  
   F - 14  Note 5: Deferred Financing Costs
 
   2003
2002Deferred financing costs

$
145,500

$
112,500Less accumulated amortization


145,500


33,987$
-

$
78,513
  
 F - 15  Note 6: Long-Term Debt Payable to Related Parties
 
  
 2003  2002
 7% convertible debentures payable to GCA Fund issued pursuant to a securities purchase agreement dated May 2, 2002; interest payable quarterly; principal payable in single installments at the maturity dates; secured by certain assets of the Company pursuant to a security agreement dated June 11, 2003 (see below)

$
-


$ 750,0007% convertible debenture payable to GCA Fund issued pursuant to a securities purchase agreement dated April 24, 2001; interest payable quarterly; principal payable in single installment at the maturity date of April 24, 2003 (see below); secured by certain assets of the Company


-


250,000$300,000 promissory note payable to GCA Fund; interest payable quarterly at 10%; principal payable in single installment at maturity date of April 24, 2004; secured by certain assets of the Company


300,000


300,000$225,000 promissory note payable to GCA Fund; interest payable quarterly at 10%; principal payable in single installment at maturity date of April 24, 2004; secured by certain assets of the Company


225,000


225,000$125,000 promissory note payable to V2R; interest (10% annually starting January 1, 2004) (face amount of note approximated the discounted amount at date of issuance) and principal payable in three installments at maturity dates of January 1, April 1 and June 1, 2004; secured by substantially all assets of the Company; subordinated to the security interests of GCA Fund


125,000


-$265,000 promissory notes payable to an entity controlled by the Companys president; interest (5% annually) and principal payable at maturity dates ranging from April 2004 through June 2004; unsecured


265,000


-915,000


1,525,000Less current portion


-


775,000$
915,000

$
750,000
 
 F - 16   
  
  
  
  
  
  
   F - 17   
  
  
 
 Note 7: Income Taxes
 
  
  2003
2002Expected rate


(34.0)
%

(34.0)
%State income taxes, net of federal deduction


(4.0
)

(4.0
)Valuation allowance


38.0


38.0-
%

-
%
 
  2003
2002Net operating loss carryforwards

$
1,200,000

$
675,000Less valuation allowance


(1,200,000
)

(675,000
)Net deferred tax asset

$
-

$
-
  
 F - 18    
 
 Note 8: Leasing Activities
 
 Operating Leases
 
  
  
  
 Year Ending December 31
 2004

$
117,9902005


83,2422006


66,5282007


33,542$
301,302
  
 Lease Revenue
 
   F - 19  Note 9: Equity
 
 SKTF
 
 Preferred Stock
 
  
 Common Stock
 
  
 Stock Issued for Services
 
  
 Stock Option Plan
 
  
  
  
   F - 20   
 Speedemissions
 
 Preferred Stock
 
  
 Common Stock
 
  
  
 Stock Option Plan
 
  
 Warrant
 
  
   F - 21   
 
 Note 10: Consulting Agreements
 
  
  
  
  
 Note 11: Contingencies
 
   F - 22  Note 12: Subsequent Events
 
  
  
  
  
  
  
  
  
  
 F - 23
   
  
     
 
 
   F - 24