```

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                    FORM 10-K

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

                   FOR THE FISCAL YEAR ENDED DECEMBER 31, 2002

                         COMMISSION FILE NUMBER 0-22325

                       **INFORMATION ARCHITECTS CORPORATION

              INCORPORATED IN                        87-0399301**
              NORTH CAROLINA             (I.R.S. EMPLOYER IDENTIFICATION NO.)

                              **1541 N Dale Mabry Hwy
                                    Suite 201
                               Lutz, Florida 33558**
                    (Address of principal executive offices)

                                  **813-909-4000**
                         (Registrant's Telephone number)

SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE SECURITIES EXCHANGE ACT OF 1934:

                    COMMON STOCK, PAR VALUE $0.001 PER SHARE

Indicate by check mark whether we: (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 we were required to file such reports), and (2) has been
subject to such filing requirements for past 90 days. Yes [X] No [ ]

Indicate by check mark if disclosure of delinquent filers in response to Item
405 of Regulation S-K is not contained in this form, and no disclosure will be
contained, to the best of our knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. Yes [] No [ X]

The number of shares of our common stock outstanding as of April 30, 2003 was
9,082,095 after giving effect to a 3-for-1 reverse split declared in April 2003.
The aggregate market value of our common stock held by non-affiliates of us as
of April 30, 2003 was $3,673,885.

                       DOCUMENTS INCORPORATED BY REFERENCE

                                      None

                                       1

                       INFORMATION ARCHITECTS CORPORATION
                             FORM 10-K ANNUAL REPORT
                       FISCAL YEAR ENDED DECEMBER 31, 2002
                                TABLE OF CONTENTS

                                     PART I
                                                                            Page
Item 1.    Business                                                            3
Item 2.    Properties                                                          7
Item 3.    Legal Proceedings                                                   8
Item 4.    Submission of Matters to a Vote of Securities Holders               8

                                     PART II

Item 5.    Market for Registrant's Common Equity and Related
           Stockholder Matters                                                 9
Item 6.    Selected Consolidated Financial Data                               10
Item 7.    Management's Discussion and Analysis of Financial
           Condition and Results of Operations                                11
Item 7A.   Quantitative and Qualitative Disclosures about
           Market Risks                                                       22
Item 8.    Financial Statements and Supplementary Data                        23
Item 9.    Changes in and Disagreements with Accountants on
           Accounting and Financial Disclosures                               23

                                    PART III

Item 10.   Directors and Executive Officers of the Registrant                 23
Item 11.   Executive Compensation                                             23
Item 12.   Security Ownership of Certain Beneficial Owners and
           Management                                                         23
Item 13.   Certain Relationships and Related Transactions                     23

                                     PART IV

Item 14.   Controls and Procedures                                            24
Item 15.   Exhibits, Financial Statement Schedules and Reports
           on Form 8-K                                                        24

Signatures                                                                    25

Certification                                                                 26

                                       2

                                     PART I

**FORWARD-LOOKING STATEMENTS**

The matters discussed in this Annual Report on Form 10-K should be read in
conjunction with the consolidated financial statements provided under Part II,
Item 8 of this Annual Report on Form 10-K. Certain statements contained herein
may constitute forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. These statements involve a number of
risks, uncertainties and other factors that could cause actual results to differ
materially, as discussed more fully herein. We undertake no duty to update this
information after the date of this document.

**ITEM 1.  BUSINESS

GENERAL**

Information Architects Corporation and Subsidiary (the "Company" or "iA") was a
developer of dynamic content delivery and interchange infrastructure software
solutions for both corporations and individuals. The Company suspended
operations in late 2002.

Our corporate product, Jitzu Corporate Edition, allows businesses to access and
interact with any content or functionality across as many applications and
hardware platforms as they want. Jitzu Corporate Edition provides drag-and-drop
functionality for creating re-usable components out of any content. In addition,
Jitzu aggregates and mixes content fragments from content management
applications, e-commerce and personalization engines, third party Customer
Relationship Management (CRM) applications, internal and external web sites, ad
servers, and heavily vested mainframe applications to present a real-time,
online "front-end" to the end user.

Our personal version of Jitzu is an internet organizer that allows a user to
create a personalized view of their favorite content from multiple locations all
on one screen. Jitzu can access content from Websites, photos, your personal PC,
etc. and present them all together. Jitzu is actually going to your favorite
sites all at the same time and letting you look at just the sections of the
sites that you like, all on a single page. This allows Jitzu to be real-time and
interactive. The personal version also includes a drag-and-drop function that
requires no programming experience.

Prior to December 31, 1999, we were engaged in the business of providing
software-reengineering services, including the correction and validation of
existing mainframe computer software systems' ability to manage the Year 2000
("Y2K") problem and software conversion services.

                                       3

On December 13, 2002, we entered into an agreement with Perceptre LLC
("Perceptre"), whereas the shareholders of Perceptre will obtain upon closing
majority voting equity ownership of the Company. As a result of the proposed
acquisition of Perceptre, LLC, effective as December 12, 2002, the members of
Perceptre LLC, Michael L. Weinstein, Esteban A. Aguilar, and Robert J. Desiderio
were appointed as directors of Information Architects Corporation by the then
Information Architects Corporation board of directors. Effective the same date,
the registrant's prior officers and directors resigned. Michael L. Weinstein was
elected as the registrant's new Chief Executive Officer.

However, upon further review and the advice of counsel, the proposed acquisition
itself could not be closed. Amendments both to the Articles of Incorporation
with the state of North Carolina and as to the actual final terms of the
acquisition in order to maximize shareholder value and to comply with SEC
regulations are currently in process. No shares of Information Architects
Corporation have been issued to Perceptre LLC or its members.

**OUR HISTORY**

We were founded in 1982 as a Utah corporation under the name of Enertronix
Corporation. In 1992 we changed our name to Alydaar Software Corporation
("Alydaar"). Alydaar later changed its corporate domicile to North Carolina
through a merger with and into Daar Corporation, a North Carolina corporation
established by Alydaar. Alydaar was the surviving corporation. In July of 1997
we acquired all of the shares of Alydaar International, Limited,
("International") based in England. On June 28, 1999 we changed our name to
Information Architects Corporation. Information Architects Corporation and
International are collectively referred to herein as the "Company" or "iA."

**OUR PRODUCTS AND SERVICES**

We have developed software products as follows:

Jitzu

Jitzu is a generic platform that extends a Web Server's functionality, and is
designed to provide easy and flexible access to existing and future data and
applications. Applications built using Jitzu employ a clean separation between
content and presentation, so that the two can be manipulated independently.
Jitzu sits between your data and your users, providing a Web-based view of the
data. In this manner, your data can remain in its current location and format
while your users access it via the Web or a company Intranet.

                                       4

Jitzu applications achieve flexibility by building a model of the data called a
metarepository and using that model as the central component in a Web
application. The metarepository does not actually contain the data. Instead, it
contains metadata: information about the data, such as where it is, how to get
it, what other data it is related to, who is allowed to see it, who is allowed
to modify it, etc. The data itself may reside in local files, remote Web
locations (URIs (Uniform Resource Identifiers)), a FTP (File Transfer Protocol)
server, a database, or nearly anywhere else. When a user points a Web browser at
the metarepository, Jitzu accesses the data in its original location, using
whatever means is appropriate, and then presents the data to the user's Web
browser via the HTTP (Hypertext Transfer Protocol).

Because a metarepository is the central element in each Jitzu application, the
terms Jitzu application and metarepository are often used interchangeably. The
Jitzu Framework is a RDF-based (Resource Description Framework, which is an
extension of XML (eXtensible Markup Language)) Java framework that provides
easy, flexible access to data and applications. Jitzu's use of metadata makes it
possible to avoid copying and storing data in static repositories. RDF
specifications simplify the construction of sophisticated applications that take
full advantage of metadata. A RDF metadata repository stores the essential
information about specific data and application elements. This includes
information about an element's location, the contextual meaning within the
document or the original application, business logic that should be applied in a
particular context, etc.

Jitzu supports dynamic aggregation of content and functionality from many
different sources both on the Internet and on the network local to its
installation. The product can dynamically access multiple sources of content and
platforms, aggregate structured or unstructured data, and automatically format
the content or content subsets into XML and/or HTML (Hypertext Markup Language)
for display over the Internet.

Single Sign On

Jitzu aggregation functionality lends itself to providing simple, robust, and
easily customizable solutions to the problem of providing a single point of user
authentication for multiple sites. Jitzu offers authentication and authorization
tools and integrates with standard security protocols.

Jitzu applications encrypt and store user login and password information for
different sites. Users sign in with their Jitzu ID and password when they first
access the Jitzu application, which authenticates users with remote applications
accessible via the Internet. Jitzu is capable of capturing and reproducing
manual logon procedures acting as a proxy when going through a sequence of logon
screens, but it is also capable of direct authentication with LDAP (Lightweight
Directory Access Protocol) servers, external certifying authorities or other
Jitzu applications.

                                       5

Jitzu supports standard security protocols, including SSL (Secure Socket Layer)
and HTTPS (Hypertext Transfer Protocol Secure). Once authenticated, Jitzu
maintains a user's secure identification throughout the session, performing
automated logins into remote sites if sessions with those sites time out before
the Jitzu session with the end user times out.

iA on MetaData

There is presently a lot of confusion created in the marketplace when new
technology concepts are introduced. Such is the case with metadata, a broad and
ambiguous term merely defined as 'data about data.' Metadata became popular with
the advent of XML, a markup language that uses descriptive tags to categorize
and describe electronic documents. Known as meta tagging, XML provided a means
to describe information with standard and custom-defined tags. However, metadata
goes beyond simple tagging schemes-empowering content managers and developers
with a means to build dynamic content infrastructures. Meta tagging is not
equivalent to iA's Metadata Framework - Jitzu.

Case in Point: MetaData Framework vs. Meta Tagging There are a few software
packages that assist content creators in the 'tagging' of their documents.
Similar to how HTML allows developers to specify a particular presentation
characteristic for a piece of data (e.g., <_B>Hello World!<_/B>), these products
assist in the categorization of documents by interactively or automatically
applying standard or custom-defined XML tags (e.g., <_property name="Document
 Category" value="Sample"> ). What needs to be understood is that meta
tagging does not establish an association with the data or content. For that
matter, meta tagging does not have much utility beyond searching and
categorizing. Problems with XML tags occur when custom-defined tags do not match
up with third party standards, preventing machines from communicating on their
own. The potential for these meta tagging solutions is limited by the degree of
acceptance of industry-standard vocabularies.

iA's flagship product Jitzu is a complete Metadata Framework that utilizes all
open standards (i.e., W3C (World Wide Web Consortium), XML, and RDF
specifications). Again, we are talking about data describing data, but this time
in a more comprehensive and robust framework. Jitzu allows users to categorize
individual fragments of data, creating a reference to the content at its source.
Jitzu separates content from presentation by allowing users to associate
security, personalization, and business logic with each fragment of content.
This way, Jitzu objectizes the data into a reusable component. Users are able to
model their business data and processes by linking these components together in
a virtual graph structure or metadata repository. Not only does the Metadata
Framework apply for data but also for application functionality, making it a
foundation for building Web services-based solutions. Jitzu supports the RDF
specification that layers on top of XML and allows for machine interoperability.
Overall, a Metadata Framework gives users more control of their content and
applications.

                                       6
JitzuShare

JitzuShare is a complete Peer-to-Peer file sharing application. JitzuShare was
developed to enable the Jitzu Communities (individuals who make or exchange
Jitzu applications with others) to be able to search other PC's for Jitzu
applications or components. When a component is saved in Jitzu, it can then be
re-used by anyone that is given access. JitzuShare provides a search tool to
facilitate this Jitzu sharing concept. Although designed for Jitzu, the
JitzuShare software can be used as a stand-alone product which can be used to
search for and download any digital content including photos, music, documents
and website content. JitzuShare became available in the first quarter of 2002.

**EDUCATION AND TRAINING SERVICES**

We provided knowledge and tools related to the implementation and deployment of
the Jitzu solution. We designed a curriculum to meet the anticipated needs of
our customers and partners. The curriculum included hands-on classes and
Internet-based training for current and potential Jitzu customers such as an
introductory class to Jitzu concepts, a class on implementing a Jitzu solution
and detailed technical training on Internet concepts.

**SUPPORT AND MAINTENANCE SERVICES**

We developed complementary support and maintenance programs for our corporate
customers. Certain corporate customers had a need for extensive customer
support. These customers paid a fee, usually on an annual basis, for these
services that include on-call support and committed response times. We no longer
provide these services.

**MARKETING AND STRATEGY**

We marketed our products primarily through relationships with strategic Internet
technology companies, integrators, and development partners and our sales staff,
which is located throughout the United States. Currently, we do not have an
international sales and marketing program. Through December 2002, we achieved
limited success in obtaining a large number of corporate customers. Accordingly,
our revenue was derived from a relatively small number of customers. We intend,
in the near future, begin to market our products again and may increase our
customer base as well as our sales staff, but there can be no assurance that
this sales and marketing strategy will be successful in the future.

The Jitzu personal version became available in the first quarter of 2002.
Currently, we are not pursuing avenues for distribution. Currently, Jitzu is not
available for purchase. We are not actively pursuing distribution channels, such
as distributors, retailers, systems integrators, software developers,
value-added resellers (VAR), and original equipment manufacturer (OEM)
customers.

                                       7

Management believes it had difficulties completing corporate sales in 2002 and
2001 because of three primary issues. The first was that the concept of virtual
information was new and changed many IT development paradigms. The second was
because of the lack of a simple user interface. The third reason was because of
a lack of brand for the company and its products.

**SOFTWARE DEVELOPMENT**

Currently, we have suspended our investment in ongoing development to enhance
our core product, Jitzu. We capitalized approximately $679,000 and $321,000
related to the internal development costs associated with Jitzu and its
underlying framework, SmartCode in 2001 and 2000, respectively, which was
written off in 2002. Our research and development costs totaled approximately
$710,000, $1,249,000 and $1,811,000 in 2002, 2001 and 2000, respectively.

**COMPETITION**

The market for Internet information solutions is rapidly emerging and is
characterized by intense competition. We expect existing competition and
competition from new market entrants to increase dramatically. In this market,
new products are frequently introduced, and existing products are often
enhanced. In addition, new companies and alliances among existing companies may
be formed that rapidly achieve a significant market position. Potential
customers may seek to develop in-house solutions, making it more difficult for
us to sell products to them.

We competed with third-party aggregation and syndication solution providers,
including Vignette Corporation, BowStreet, Tibco, BroadVision, Inc., WebMethods,
Inc., and, to a lesser extent, portal application providers. We faced increased
competition from these providers. Other potential competitors included in-house
programming, client/server software vendors that are developing or extending
existing products, which could affect our market. Other large software
companies, such as Microsoft Corporation(R) and IBM(R), may also introduce
competitive products. Many of our potential competitors have greater technical,
marketing and financial resources than we do.

**PROPRIETARY RIGHTS AND LICENSING**

On November 9, 1999, the United States Patent and Trademark Office granted us a
patent for the "System for Indexing and Displaying Requested Data Having
Heterogeneous Content and Representation", Patent No. 5,983,267, covering
technologies and processes at the core of our SmartCode technology which powers
Jitzu. This patent expires September 23, 2017. We also have a patent pending for
our "Method and System For Dynamic Syndication and Customization of Content and
Functionality in an Electronic Format Accessible By a Provider and Communicated
Through a Computer Network to a Requestor", US Serial No. 09/625,755.

                                       8

In addition, we also hold numerous registered trademarks in the United States
and Europe, including Information Architects(R), Jitzu(TM) and SmartCode(R), and
other registered trademarks and copyrights related to our discontinued Y2K
business.

We rely on a combination of copyright, trade secret, patent, trademark laws, and
contractual provisions to establish and protect our rights to our proprietary
technology. We protect the source code version of our products as a trade secret
and as a copyrighted work. Despite these precautions, it may be possible for
unauthorized parties to copy or reverse engineer our software or obtain and use
information that we regard as proprietary.

**PERSONNEL**

As of December 31, 2002 we had one employee, our CEO.

**ITEM 2.  PROPERTIES**

As of January 31, 2003, we lease approximately 2,000 square feet from Richard
Waterfield at 1541 N. Dale Mabry Hwy, #201, Lutz, Florida. Our phone number is
813-909-4000. The lease is for a term of two years with monthly rent of
approximately $1,600 for year one and $1,650 for year two. Our offices are in
good condition and are sufficient to conduct our operations.

We do not intend to renovate, improve, or develop properties. We are not subject
to competitive conditions for property and currently have no property in insure.
We have no policy with respect to investments in real estate or interests in
real estate and no policy with respect to investments in real estate mortgages.
Further, we have no policy with respect to investments in securities of or
interests in persons primarily engaged in real estate activities.

**ITEM 3.  LEGAL PROCEEDINGS**

GEM Technologies Lawsuit Settlement

The Company has previously reported a lawsuit that was filed against the Company
in 1996. The lawsuit involved claims by plaintiffs that they were fraudulently
induced to invest in GEM Technologies, Inc. ("GEM"), an unrelated company, and
to forego their conversion rights, that GEM wrongly transferred assets to a
predecessor company of the Company and that they were entitled to an 8.72%
interest in GEM, and as such, in iA. The case was tried, and the Court ruled
that iA was unrelated to GEM and ruled against Robert F. Gruder on two counts.
Plaintiffs were awarded a judgment of $175,000, plus interest and attorneys'
fees and expenses. The plaintiffs appealed on the basis that the court denied
their claim to convert the notes into iA stock and Mr. Gruder cross-appealed
from the relief awarded against him. In addition, the Plaintiffs initiated a
lawsuit in the GEM bankruptcy court.

                                       9

During the second quarter of 2001, a settlement agreement was reached. The terms
of this settlement were carried out in the third quarter of 2001. The Company's
Board of Directors determined that because the Company was responsible for all
costs associated with the suit and because the litigation was so disruptive to
the Company as well as a distraction to Management, that rather than prolonging
the lawsuit, it was in the best interest of the Company to settle. During the
third quarter, iA delivered 55,000 shares of our common stock to the selling
stockholder and Mr. Gruder delivered 22,333 shares of our common stock to the
selling stockholder and Mr. Gruder delivered a non-negotiable promissory note in
the amount of $600,000 to the selling stockholder. In addition, Mr. Gruder paid
$1,150,000 comprised of $750,000 that Mr. Gruder had previously given over and
$400,000 upon the settlement agreement. Mr. Gruder also deposited 33,333 shares
of iA common stock to be held in escrow as security for that note. In connection
with the settlement, the selling stockholder released the Company, Mr. Gruder,
and Mr. Dudchik from liability under the litigation and dismissed his claims
against us, Mr. Gruder and Mr. Dudchik. In addition, iA's offer to participate
in the Settlement Agreement served as an inducement to Mr. Gruder to enter into
the Settlement Agreement and to absorb the majority of the financial burden of
the settlement.

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

On January 25, 2002, our shareholders approved the following. (All share and per
share data reflected below in item 4 do not reflect the one-for-five reverse
split of the common stock and equivalents nor does it reflect the one-for-three
reverse split of the common stock and equivalents that occurred in April 2003,
except as indicated):

1.   Approval to amend the Certificate of Incorporation affecting a one-for-five
     reverse split of the common stock and equivalents.

          For                 Against           Abstained
      -------------        -------------      -------------
        26,476,630            3,225,599            210,384

2.   Approval of the sale of securities of Information Architects constituting
     up to 40 percent of the outstanding common stock or convertible into as
     much as 40 percent of our outstanding common stock.

          For                 Against           Abstained
      -------------        -------------      -------------
        11,378,169            4,148,893            215,246

                                       10

3.   Approval of an amendment to the stock option plan to increase the number of
     shares of common stock that may be issued under the plan from 800,000 to
     4,000,000 shares after giving effect to the proposed reverse split.

          For                 Against           Abstained
      -------------        -------------      -------------
        10,119,973            5,405,957            216,377

4.   Approval of an amendment to the employee stock purchase plan to increase
     the number of shares available for purchase under such plan from 40,000 to
     200,000 shares after giving effect to the proposed reverse split.

          For                 Against           Abstained
      -------------        -------------      -------------
        11,703,205            3,777,976            260,326

On December 12, 2002, shareholders holding 2,155,346 post-split shares of common
stock of the total 4,082,095 post-split shares issued and outstanding approved
by written consent, the following:

1.   Agreement made as of the 12th day of December between Percepter LLC., a New
     Mexican limited liability corporation and the Corporation is approved,
     ratified and affirmed.

2.   The Corporation shall effect a 1 for 3 reverse stock split of its common
     stock for holders of record as of December 12, 2002.  No fractional shares
     shall be issued.  Fractional shares shall be rounded up to the next whole
     share. This reverse split became effective in April 2003 for shareholders
     of record in April 23, 2003.

3.   Article One of the Amended and Restated Articles of Incorporation of the
     Corporation shall be amended in its entirety to state:
        1.   The name of the corporation is Perceptre Corporation.

4.   The Corporation shall take appropriate action necessary to change its
     domicile from the state of North Carolina to Florida.  In so doing, the
     articles of incorporation and by laws of the Corporation, to be amended as
     stated above, shall remain the same, except as the same shall be required
     to be modified to conform to Florida law.

5.   All stock issuances and splits under the above agreements/actions are also
     affirmed, ratified and approved.

As of April 30, 2003, the name change, re-domicile, and Perceptre, LLC
transaction have not been consummated.

                                       11
**PART II

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

Our common stock currently trades on the OTC Bulletin Board under the symbol
"IACHE". From February 4, 2002 to March 4, 2002, our stock traded under the
symbol "IARCD." The "D" informs investors of the stock split as discussed in
Item 4. The common stock was admitted to trading on the National Market on
December 3, 1997. From 1982 through December 2, 1997, the common stock traded on
the Bulletin Board, first as Enertronix and later as Alydaar. The following
table sets forth the range of high and low closing sale price as reported by the
OTC Bulletin Board for our common stock for the fiscal quarters indicated. The
OTC Bulletin Board quotations represent quotations between dealers without
adjustment for retail mark-up, markdowns or commissions and may not represent
actual transactions.

In April 2003, we announced a one-for-three  reverse stock split of the common
stock and equivalents.  All per share data, stock prices and numbers of common
shares and equivalents have been retroactively adjusted to reflect the latter
stock split.

For Year Ended December 31, 2002            High                  Low
-----------------------------------    ----------------    -----------------
1st Quarter Ended March 31, 2002       $           4.47    $            1.20
2nd Quarter Ended June 30, 2002        $           3.24    $            1.47
3rd Quarter Ended September 30, 2002   $           1.38    $            0.27
4th Quarter Ended December 31, 2002    $           0.45    $            0.09

For Year Ended December 31, 2001            High                  Low
-----------------------------------    ----------------    -----------------
1st Quarter Ended March 31, 2001       $          58.14    $           14.07
2nd Quarter Ended June 30, 2001        $          35.85    $           15.48
3rd Quarter Ended September 30, 2001   $          27.75    $            6.00
4th Quarter Ended December 31, 2001    $          13.65    $            3.00

**BENEFICIAL HOLDERS**

As of April 30, 2003, the number of beneficial holders of our common stock was
approximately 12,000, based on information received from our transfer agent and
those brokerage firms who hold securities for customers in "street name."

**DIVIDENDS**

We have not paid any cash dividends since our inception. By reason of our
present financial status and contemplated future financial requirements, we do
not anticipate paying any cash dividends in the foreseeable future.

                                       12
**RECENT ISSUANCES OF UNREGISTERED SECURITIES**

On January 10, 2002, we issued under the terms of the Employee Stock Purchase
Plan 1,540 shares aggregating proceeds of $4,574 or $2.97 per share.

On May 22, 2002, we issued 25,000 shares of our common stock to a consultant for
services rendered. These shares were valued at $55,500 or $2.22 per share, the
fair market value on the date the services were rendered.

In July 2002, convertible preferred shareholders converted 20,000 shares of
preferred stock for 13,333 shares of the common stock in accordance the
conversion terms of the preferred stock.

In July 2002, we issued 16,666 shares of our common stock to a consultant
services rendered. These shares were valued at $20,000 or $1.20 per share which
approximates fair market value.

In August 2002, we sold 166,667 shares of our common stock to one investor for
proceeds of $100,000 or $0.60 per share.

In August 2002, we converted a $100,000 loan payable due to a related party into
166,667 shares of our common stock at a conversion price of $0.60 per share.

On September 3, 2002, we issued 46,667 shares of our common stock to employees
for services rendered. These shares were valued at $24,500 or $0.525 per share,
which approximates the fair market value on the date of issuance.

On December 12, 2002, we granted 1,483,000 to former officers and directors of
the Company for services rendered. These shares were valued at $225,950 or $0.15
per share, the fair market value on the date of the grant.

On December 12, 2002, we issued 5,000,000 shares of our common stock to a
consultant for business development services rendered. These shares were valued
at $750,000 or $0.15 per share or the fair value on the date of the grant. These
shares had not been issued as of December 31, 2002 and were presented as
issuable.

                                       13

We relied upon the exemption provided under section 4(2) for these issuances,
which was available because:

        o   None of these issuances involved underwriters, underwriting
            discounts or commissions.
        o   Restrictive legends are placed on all certificates issued.
        o   The distribution did not involve general solicitation or
            advertising.
        o   The distributions were made only to insiders, accredited investors
            or investors who were sophisticated enough to evaluate the risks of
            the investment. All sophisticated investors were given access to all
            information about our business and the opportunity to ask questions
            and receive answers about our business from our management prior to
            making any investment decision.

**SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS**

The Company has a stock option plan to benefit salaried employees. Under this
plan (as amended), the Company may issue stock and/or stock options, to a
maximum of 10 percent of the authorized shares, through the year 2004. The
options become exercisable at various periods of time from thirty days to two
years from the date of grant. Options currently expire no later than 10 years
from the grant date. On January 25, 2002, the Company's shareholders voted to
approve an amendment to the stock option plan to increase the number of shares
of common stock that may be issued under the plan from 800,000 to 4,000,000
shares after giving effect to the one-for-five reverse split. This amendment was
effective February 1, 2002. The plan has not been amended for the most recent
one-for-three reverse stock split.

The Company has an employee stock purchase plan to provide eligible employees
with the opportunity to purchase shares of its common stock through payroll
deductions. Participants of the plan purchase shares of the Company's common
stock at six-month intervals at 85 percent of the lower of the fair market value
on the first or last day of each six-month period. The fair market value of
shares that may be purchased by any participant during any calendar year may not
exceed $25,000. On January 25, 2002, the Company's shareholders voted to approve
an amendment to the employee stock purchase plan to increase the number of
shares available for purchase under such plan from 40,000 to 200,000 shares
after giving effect to the one-for-five reverse split in January 2002. The plan
has not been amended for the most recent one-for-three reverse stock split. Of
the 200,000 shares authorized to be issued under the Purchase Plan, 191,625
shares remained available for issuance as of December 31, 2002. During 2002,
2001 and 2000, employees purchased 1,540, 3,910 and 2,925 shares for
approximately $4,600, $73,000 and $122,000, respectively.

                                       14

The following tabular format provides information as of the end of the most
recently completed fiscal year with respect to compensation plans (including
individual compensation arrangements) under which equity securities of the
registrant are authorized for issuance, aggregated as follows:

        i.   All compensation plans previously approved by security holders; and
       ii.   All compensation plans not previously approved by security holders.

                      Equity Compensation Plan Information

 Plan category                 Number of securities        Weighted average        Number of securities
                                 to be issued upon        exercise price of      remaining available for
                                   exercise of          outstanding options,        future issuance
                               outstanding options,      warrants and rights
                                warrants and rights

                                      (a)                       (b)                       (c)

Equity compensation plans          8,957                    $86.25                 3,439,031
approved by security holders

Equity compensation plans             -                         -                         -
not approved by security holders

Total                              8,957                    $86.25                 3,439,031

                                       15
**ITEM 6.  SELECTED CONSOLIDATED FINANCIAL DATA**

The following selected consolidated financial data have been derived from our
consolidated financial statements. The information set forth below is not
necessarily indicative of the results of future operations and should be read in
conjunction with the consolidated financial statements and notes thereto
appearing elsewhere in this Annual Report on Form 10-K and with Item 7,
Management's Discussion and Analysis of Financial Condition and Results of
Operations.

---------------------------------- ------------ -------------- -------------- -------------- -----------
Years Ending December 31,(000,
except per share data)                2002          2001           2000           1999          1998
---------------------------------- ------------ -------------- -------------- -------------- -----------
Operations:
---------------------------------- ------------ -------------- -------------- -------------- -----------
Revenues                           $     63     $   1,588      $    4,666     $    281       $    -
---------------------------------- ------------ -------------- -------------- -------------- -----------
Loss from continuing operations
before provision for income taxes    (7,747)      (11,034)        (12,440)     (12,031)       (3,292)
---------------------------------- ------------ -------------- -------------- -------------- -----------
(Loss)earnings from discontinued
operations, net of tax benefit            -            -               -       (12,548)        4,690
---------------------------------- ------------ -------------- -------------- -------------- -----------
Provision for income taxes                -         1,800              -            -             -
---------------------------------- ------------ -------------- -------------- -------------- -----------
Net loss earnings                     (7,747)     (12,834)        (12,440)     (24,579)        1,398
---------------------------------- ------------ -------------- -------------- -------------- -----------
Basic (loss)earnings per common
share
    Continuing operations              (2.89)       (6.01)          (6.28)       (9.33)        (2.82)
---------------------------------- ------------ -------------- -------------- -------------- -----------
    Discontinued operations               -            -               -         (9.72)         4.02
---------------------------------- ------------ -------------- -------------- -------------- -----------
Diluted (loss) earnings per
common share
---------------------------------- ------------ -------------- -------------- -------------- -----------
    Continuing operations              (2.89)       (6.01)          (6.28)       (9.42)        (2.82)
---------------------------------- ------------ -------------- -------------- -------------- -----------
    Discontinued operations               -            -               -         (9.84)         4.02
---------------------------------- ------------ -------------- -------------- -------------- -----------
(Loss)earnings per common share,
net
---------------------------------- ------------ -------------- -------------- -------------- -----------
      Basic                            (2.89)       (6.01)          (6.28)      (19.05)         1.20
---------------------------------- ------------ -------------- -------------- -------------- -----------
      Diluted                          (2.89)       (6.01)          (6.28)      (19.26)         1.20
---------------------------------- ------------ -------------- -------------- -------------- -----------
Shares used in computing (loss)
earnings per common share
---------------------------------- ------------ -------------- -------------- -------------- -----------
      Basic                            2,682        2,135           1,980        1,289         1,163
---------------------------------- ------------ -------------- -------------- -------------- -----------
      Diluted                          2,682        2,135           1,980        1,276         1,172
---------------------------------- ------------ -------------- -------------- -------------- -----------
Financial Position:
---------------------------------- ------------ -------------- -------------- -------------- -----------
Current Assets                            -         4,200          12,356       10,373        12,511
---------------------------------- ------------ -------------- -------------- -------------- -----------
Total Assets                              -         6,427          17,489       16,711        23,471
---------------------------------- ------------ -------------- -------------- -------------- -----------
Current Liabilities                    1,682        1,839           1,092        3,377         5,261
---------------------------------- ------------ -------------- -------------- -------------- -----------
Long Term Obligations                     -            -               -         2,092           121
---------------------------------- ------------ -------------- -------------- -------------- -----------
Shareholders' Equity (Deficit)        (1,682)       4,587          16,397       11,243        18,089
---------------------------------- ------------ -------------- -------------- -------------- -----------
Cash Dividend                             -            -               -            -             -
---------------------------------- ------------ -------------- -------------- -------------- -----------

The selected financial data may not be indicative of future operating results.

                                       16
**ITEM 7.  MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS**

Prior to December 2002, Information Architects Corporation and Subsidiary ("iA"
or the "Company") provided dynamic content delivery and interchange
infrastructure solutions for business based on our core product, Jitzu.

The following discussion should be read in conjunction with the consolidated
financial statements provided under Part II, Item 8 of this Annual Report on
Form 10-K. (Note: On February 1, 2002, iA effected a one-for-five reverse stock
split on its common stock and equivalents to shareholders of record as of
November 30, 2001. In April 2003, the Company effected a one-for-three reverse
stock split on its common stock and equivalents to shareholders of record as of
April 23, 2003. All per share data and numbers of common shares and equivalents
have been retroactively adjusted to reflect the latest reverse stock split.
Certain statements contained herein may constitute forward-looking statements
within the meaning of the Private Securities Litigation Reform Act of 1995.
These statements involve a number of risks, uncertainties and other factors that
could cause actual results to differ materially, as discussed more fully herein.
iA undertakes no duty to update this information after the date of this
document.

**CRITICAL ACCOUNTING POLICIES AND ESTIMATES**

iA's discussion and analysis of its financial condition and results of
operations are based upon iA's consolidated financial statements, which have
been prepared in accordance with accounting principles generally accepted in the
United States. The preparation of these financial statements requires iA to make
estimates and judgments that affect the reported amounts of assets, liabilities,
revenue, expenses, and related disclosures of contingent assets and liabilities.
iA evaluates its estimates on an on-going basis. These estimates are based on
historical experience and on various other assumptions that are believed to be
reasonable under the circumstances, the results of which form the basis for
making judgments about the carrying values of assets and liabilities that are
not readily apparent from other sources. Actual results may differ from these
estimates under different assumptions or conditions.

iA believes that the following critical accounting policies affect its more
significant judgments and estimates used in the preparation of its consolidated
financial statements: revenue recognition, deferred tax assets, and estimated
useful life of assets and valuation of equity securities issued for services or
settlements. Also, please review the content under "Other Disclosures for
Shareholders' Benefit." Management's judgments and estimates related to deferred
tax assets and the useful life of assets had a material impact on the 2001
financial statements. It is likely that as our business evolves, our critical
accounting policies will change.

                                       17

Deferred Tax Asset

iA increased its valuation allowance against the deferred tax asset attributable
to its net operating loss carryforwards by recognizing a provision for income
taxes of $1,800,000 in 2001. iA made the determination to eliminate the deferred
tax asset based on trends from our historical operations and iA's uncertainty in
turning its operations around in the near future. This judgement had a material
impact on our financial statements. Based on iA's weighted average common shares
outstanding of 2,135,678 as of December 31, 2001, the $1,800,000 charge impacted
our loss per common share by approximately $0.84.

Other Disclosures for Shareholders' Benefit

iA does not have any contractual obligations to make future payments and
contingent commitments. iA is not involved in trading activities in commodity
contracts.

**RESULTS OF OPERATIONS**

We suspended all of our operations in December 2002. iA's net loss was
$7,747,189, $12,834,009, and $12,440,382 for fiscal years 2002, 2001 and 2000,
respectively. The following financial discussion related to our operations.

iA had revenues of approximately $63,000 in 2002 compared to revenue of
approximately $1,588,000 in 2001. The decrease was attributable to our financial
difficulties and the fact that we suspended our operations in 2002.

iA reported 2001 revenue of approximately $1,588,000, a decrease of $3,077,000,
or 66 percent, compared with 2000. Revenue in 2001 was affected by three primary
factors. The first is the slow down in two ongoing projects which accounted for
almost 60 percent of revenue generated in 2000, both of which were substantially
finished or on hold by the end of 2001. In 2001, these two projects and one
additional project accounted for 96 percent of revenue. The second factor is
iA's focus on the development and deployment of its new product, Jitzu.
Beginning in the fourth quarter of 2001, substantially all of iA's resources
were allocated to Jitzu. Therefore, only marginal revenue was earned in the
fourth quarter. The third is an external factor. iA was affected by the economic
weakness as generally seen throughout the technology industry.

Revenue from professional services was approximately $18,000, $1,428,000 and
$3,949,000 in 2002, 2001 and 2000, respectively. Revenue from license fees and
maintenance fees were approximately $44,000, $160,000 and $717,000 in 2002, 2001
and 2000, respectively.

                                       18
Cost of Revenues and Gross Margin

iA reported 2002 cost of revenues of approximately $38,000 due to a substantial
decrease in revenues. iA reported 2001 cost of revenues of approximately
$2,117,000, a decrease of $774,000, or 27 percent, compared with 2000. The
largest component of cost of revenues is payroll and related costs. As the
projects discussed above in the revenue section slowed down, iA's costs
associated with the projects also declined. Additionally, iA began to cut
personnel beginning in March 2001. This personnel cut was part of a
corporate-wide cost improvement program.

Sales and Marketing

Sales and marketing expenses were approximately $627,000 in 2002, a decline of
$1,562,000 compared to 2001, or 71 percent and were due to the slow down of our
operations. Sales and marketing expenses were $2,189,000 in 2001, a decline of
$3,188,000, or 59 percent from 2000. This change is primarily due to a decrease
in advertising and marketing expense from $2.2 million in 2000 to $50,000 in
2001, a decrease of $2.1 million, and a decrease in payroll and related costs
from $2.8 million in 2000 to $1.8 million in 2001, a decrease of $1.0 million.
The reduction in payroll and related costs, which included the head of sales,
was a part of the corporate wide effort to reduce expenses. We did not run any
significant advertising campaigns in 2001.

Research and Development

Research and development expenses were approximately $710,000 in 2002, a decline
of $539,000 compared with 2001 or 43 percent. In 2002, we discontinued our
research and development efforts. Research and development expenses were
approximately $1,249,000 in 2001, a decline of $562,000, or 31 percent compared
with 2000. As discussed previously, iA's focus in fourth quarter was the
development of Jitzu. Authoritative accounting literature requires the
capitalization of certain costs incurred in this development stage. iA
capitalized $679,000 related to this development. The 2001 capitalized amount is
$358,000 more than the $321,000 capitalized by iA in 2000 for the development of
SmartCode. The remainder of the decrease in research and development costs is
due to a $.5 million decrease in payroll and related costs ($0.9 and $1.4 in
2001 and 2000, respectively) as a part of the implementation of the corporate
cost reduction plan. iA expanded its ongoing cost reduction efforts when it
closed the Hoboken, NJ office in the fourth quarter of 2001.

                                       19
General and Administrative

General and administrative expenses were approximately $7,444,000 in 2002
compared to approximately $5,624,000 in 2001. During 2002, we accrued remaining
lease payments under our operating lease of approximately $3,000,000.
Additionally, we recorded approximately $1,240,000 of expense related to the
issuance of common shares for services. General and administrative expenses were
$5,624,000 in 2001, a decline of $689,000 or 11 percent compared with 2000. As
management continued its cost reduction plan in 2001, declines in payroll and
related costs contributed to iA's most significant cost reductions. Payroll and
related costs declined $1.3 million, or 52 percent, to $1.2 million from $2.5
million in 2001 and 2000, respectively. Bad debt expense was negligible in 2001
compared to a $0.6 million charge to bad debt expense in 2000.

Depreciation and Amortization

Depreciation and amortization expenses were approximately $1,010,000 in 2002
compared to approximately $1,747,000 in 2001. In 2002, we wrote off all
remaining capitalized software. Depreciation and amortization expenses were
$1,747,000 in 2001, an increase of $401,000 or 30 percent compared with 2000.
Based upon observed historical trends noted in 2001, the Company revised the
estimated life of certain computer equipment from five years to three years and
revised the estimated life of technology purchased in 1999 from three to two
years. The Company incurred approximately $240,000 and $223,000, respectively,
in additional depreciation expense as a result of these changes in estimates.

Other Income (Expense)

Other income (expense) was approximately $2,019,000 in 2002 compared to
approximately $305,000 in 2001. In 2002, we recognized settlement income of
$3,517,000 related to the settlement of our accounts payable and a settlement of
our operating lease as previously discussed. This income was offset by a loss
from the sale/abandonment of assets of $1,520,000. We had interest income of
approximately $21,000.

Other income (expense) was approximately $305,000 in 2001, a decline of $329,000
or 52 percent compared with 2000. Interest income decreased approximately
$357,000, or 51 percent due to a steadily decreasing cash balance. Interest
expense decreased $113,000 or 89 percent due to the elimination of all long-term
debt in 2000.

Provision for Income Taxes

During 2001, management eliminated its deferred tax asset by increasing the
valuation allowance attributable to iA's net operating loss carryforwards. This
elimination resulted in a $1,800,000 provision for income taxes. This charge did
not require the payment of cash. No provision for or benefit from income taxes
was recognized in 2002 or 2000.

                                       20
Other

During 2002 and 2001, we issued common stock to raise cash, to convert debt to
equity, to settle lawsuits, to pay for services and to acquire assets. We also
use stock options and warrants to reward and retain employees as well as to
compensate consultants. We anticipate the continuation of this practice.

We may continue to invest in introducing new concepts into the Internet
marketplace as we go forward. These investments have up front costs with delayed
revenue, if any, and could impact both the timing of our revenue and our net
income or loss. These investments may also cause volatility in our
quarter-to-quarter results.

**RECENT ACCOUNTING PRONOUNCEMENTS**

In June 2001, the Financial Accounting Standards Board (FASB) issued Statement
of Financial Accounting Standards (SFAS) No. 142, "Goodwill and Other Intangible
Assets." Under SFAS No. 142, goodwill and intangible assets with indefinite
lives are no longer amortized but are reviewed at least annually for impairment.
We adopted SFAS No. 142 effective January 1, 2002.

Statement No. 143, "Accounting for Asset Retirement Obligations," ("SFAS 143")
requires entities to record the fair value of a liability for an asset
retirement obligation in the period in which it is incurred. When the liability
is initially recorded, the entity capitalizes a cost by increasing the carrying
amount of the related long-lived asset. Over time, the liability is accreted to
its present value each period, and the capitalized cost is depreciated over the
useful life of the related asset. Upon settlement of the liability, an entity
either settles the obligation for its recorded amount or incurs a gain or loss
upon settlement. The standard is effective for fiscal years beginning after June
15, 2002. The adoption of SFAS 143 on January 1, 2003 did not have a material
effect on our consolidated results of operations or liquidity.

In August 2001, the FASB issued SFAS No. 144, "Accounting for the Impairment or
Disposal of Long-Lived Assets." This statement addresses financial accounting
and reporting for the impairment or disposal of long-lived assets. This
Statement supersedes FASB No. 121, "Accounting for the Impairment of Long-Lived
Assets and for Long-Lived Assets to Be Disposed of" and the accounting and
reporting provisions of APB Opinion No. 30, "Reporting the results of Operations
- Reporting the Effects of Disposal of a Segment of a Business, and
Extraordinary, Unusual and Infrequently Occurring Events and Transactions." The
Company adopted SFAS No. 144 effective January 1, 2002. The adoption of SFAS 144
did not have a material impact on our financial position or results from
operations.

                                       21

Statement No. 145, "Rescission of FASB Statements No. 4, 44, and 64, Amendment
of FASB Statement No. 13, and Technical Corrections" ("SFAS 145") updates,
clarifies, and simplifies existing accounting pronouncements. Statement No. 145
rescinds Statement 4, which required all gains and losses from extinguishment of
debt to be aggregated and, if material, classified as an extraordinary item, net
of related income tax effect. As a result, the criteria in Opinion 30 will now
be used to classify those gains and losses. Statement 64 amended Statement 4,
and is no longer necessary because Statement 4 has been rescinded. Statement 44
was issued to establish accounting requirements for the effects of transition to
the provisions of the motor Carrier Act of 1980. Because the transition has been
completed, Statement 44 is no longer necessary. Statement 145 amends Statement
13 to require that certain lease modifications that have economic effects
similar to sale-leaseback transactions be accounted for in the same manner as
sale-leaseback transactions. This amendment is consistent with FASB's goal
requiring similar accounting treatment for transactions that have similar
economic effects. This statement is effective for fiscal years beginning after
May 15, 2002. The adoption of SFAS 145 on January 1, 2003 did not have a
material impact on our consolidated financial position, results of operations or
liquidity.

Statement No. 146, "Accounting for Exit or Disposal Activities" ("SFAS 146")
addresses the recognition, measurement, and reporting of cost that are
associated with exit and disposal activities that are currently accounted for
pursuant to the guidelines set forth in EITF 94-3, "Liability Recognition for
Certain Employee Termination Benefits and Other Costs to exit an Activity
(including Certain Cost Incurred in a Restructuring)," cost related to
terminating a contract that is not a capital lease and one-time benefit
arrangements received by employees who are involuntarily terminated - nullifying
the guidance under EITF 94-3. Under SFAS 146, the cost associated with an exit
or disposal activity is recognized in the periods in which it is incurred rather
than at the date the Company committed to the exit plan. This statement is
effective for exit or disposal activities initiated after December 31, 2002 with
earlier application encouraged. The adoption of SFAS 146 is not expected to have
a material impact on our consolidated financial position, results of operations
or liquidity.

In December 2002, the FASB issued Statement of Financial Accounting Standards
No. 148, Accounting for Stock-Based Compensation - Transition and Disclosure.
Statement 148 provides alternative methods of transition to Statement 123's fair
value method of accounting for stock-based employee compensation. It also amends
the disclosure provisions of Statement 123 and APB Opinion No. 28, Interim
Financial Reporting, to require disclosure in the summary of significant
accounting policies of the effects of an entity's accounting with respect to
stock-based employee compensation on reported net income and earnings per share
in annual and interim financial statements. Statement 148's amendment of the
transition and annual disclosure requirements of Statement's 123 are effective
for fiscal years ending after December 15, 2002. Statement 148's amendment of
the disclosure requirements of Opinion 28 is effective for interim periods
beginning after December 15, 2002.

                                       22
LIQUIDITY AND CAPITAL RESOURCES

Since inception, we had an aggregate net loss of $70.3 million. In order to
continue operations, we will once again seek additional funding from outside
sources. Among the options that are currently being explored to raise capital
are the issuance of stock and/or debt financing. Without additional funding, iA
will not be able to continue operations.

**FACTORS THAT MAY AFFECT OUR BUSINESS, FUTURE OPERATING RESULTS AND FINANCIAL
CONDITION**

iA participates in a highly volatile industry that is characterized by intense
industry-wide competition. Industry participants confront aggressive pricing
practices by competitors, continually changing customer demand patterns and
rapid technological developments. The following cautionary statements discuss
important factors that could cause actual results to differ materially from the
projected results contained in the forward-looking statements in this Annual
Report on 10-K. We believe that in the future our results of operations and
financial condition could be affected by various factors, including, but not
limited to:

**GOING CONCERN AND THE NEED TO RAISE ADDITIONAL CAPITAL THAT MAY NOT BE AVAILABLE
ON TERMS FAVORABLE TO US, IF AT ALL**

Since inception, we had an aggregate net loss of $70.3 million. In order to
continue operations throughout 2003, we will once again seek additional funding
from outside sources. Among the options that are currently being explored to
raise capital are the issuance of stock and/or debt financing. Without
additional funding, we will not be able to continue operations. We can make no
assurances that we will be able to obtain financing on favorable terms, if at
all.

**OUR LIMITED OPERATING HISTORY IN THE CONTENT AGGREGATION AND SYNDICATION
BUSINESS MAY IMPEDE YOUR ABILITY TO EVALUATE OUR BUSINESS AND ITS FUTURE
PROSPECTS**

Since July 1, 1999, we have continued to fund our operations primarily from our
sale of common stock and securities convertible into common stock and have not
generated net income from operations. Before buying our common stock, you should
consider the risks and difficulties frequently encountered by companies in new
and rapidly evolving markets, particularly those companies whose businesses
depend on the Internet.

                                       23

These risks and difficulties, as they apply to us in particular, include:

        -   potential fluctuations in operating results and uncertain growth
            rates;
        -   limited market acceptance of our products;
        -   concentration of our revenues in a single product suite;
        -   our need to manage rapidly expanding operations; and
        -   our need to attract and train qualified personnel.

**THE MARKET FOR E-BUSINESS IS NEW AND EMERGING AND IF IT DOES NOT GROW AS RAPIDLY
AS WE ANTICIPATE OR FAILS TO EMERGE AT ALL, OUR PLANNED GROWTH AND FINANCIAL
OBJECTIVES WILL NOT BE MET**

Our success is dependent on the emergence of the market for e-business; and if
that market does not grow as rapidly as we anticipate, we may fail to achieve
profitability. We are planning to dedicate our sales, marketing and product
development efforts toward e-business. If these markets do not develop as
rapidly as we expect, our planned growth and financial objectives will not be
met. A number of factors could prevent or hinder the emergence of these markets,
including the following:

        -   the unwillingness of customers to change their traditional method of
            conducting commerce;
        -   the failure of the Internet network infrastructure to keep pace with
            substantial growth;
        -   adverse publicity and consumer concern about the security of
            electronic commerce transactions; and
        -   any new legislation or regulation, the application of laws and
            regulations from jurisdictions whose laws do not currently apply to
            our business, or the application of existing laws and regulations to
            the Internet and on-line businesses.

**OUR QUARTERLY OPERATING RESULTS ARE VOLATILE AND DIFFICULT TO PREDICT, AND IF WE
FAIL TO MEET THE EXPECTATIONS OF PUBLIC MARKET ANALYSTS AND INVESTORS, THE
MARKET PRICE OF OUR COMMON STOCK MAY DECREASE SIGNIFICANTLY**

Our quarterly operating results have fluctuated significantly in the past, and
we expect them to continue to fluctuate in the future, which may result in a
decrease in the price of our common stock. It is possible that in some future
periods our results of operations may not meet or exceed the expectations of
public market analysts and investors and the price of our common stock may
decline.

                                       24
**VOLATILITY IN OUR STOCK PRICE MAY ADVERSELY AFFECT OUR BUSINESS**

Fluctuations in the market price of our common stock may adversely affect our
access to capital and financing and our ability to attract and retain qualified
personnel. Historically, our common stock price and trading volume have
fluctuated widely. We expect fluctuations to continue in the future for a number
of reasons, including the following:

        -   our success or failure in meeting market expectations of our
            quarterly or annual revenues, net income or earnings per share;
        -   announcements by us or our competitors regarding new services and
            products or technological innovations;
        -   stock prices for many technology companies fluctuate widely for
            reasons, including perceived potential value, that may be unrelated
            to operating results; and
        -   announcements of unusual events.

**WE MAY FACE POTENTIAL LIABILITY AS A RESULT OF LAWSUITS**

We are engaged in certain legal actions arising in the ordinary course of
business. We believe that we have adequate legal defenses and that the ultimate
outcome of these actions will not have a material adverse effect on our
financial position and results of operations.

**WE ARE SUBJECT TO RISKS ASSOCIATED WITH GOVERNMENTAL REGULATION AND LEGAL
UNCERTAINTIES**

Few existing laws or regulations specifically apply to the Internet, other than
laws and regulations generally applicable to businesses. Certain U.S. export
controls and import controls of other countries, including controls on the use
of encryption technologies, may apply to our products. Many laws and
regulations, however, are pending and may be adopted in the United States,
individual states and local jurisdictions and other countries with respect to
the Internet. These laws may relate to many areas that impact our business,
including content issues (such as obscenity, indecency and defamation),
copyright and other intellectual property rights, encryption, caching of content
by server products, personal privacy, taxation, e-mail, promotions, network and
information security and the convergence of traditional communication services
with Internet communications, including the future availability of broadband
transmission capability and wireless networks. These types of regulations are
likely to differ between countries and other political and geographic divisions.

                                       25

Other countries and political organizations are likely to impose or favor more
and different regulation than that which has been proposed in the United States,
thus furthering the complexity of regulation. In addition, state and local
governments may impose regulations in addition to, inconsistent with, or
stricter than federal regulations. The adoption of such laws or regulations, and
uncertainties associated with their validity, interpretation, applicability and
enforcement, may affect the available distribution channels for and costs
associated with our products and services, and may affect the growth of the
Internet. Such laws or regulations may harm our business.

We do not know for certain how existing laws governing issues such as property
ownership, copyright and other intellectual property issues, taxation, gambling,
security, illegal or obscene content, retransmission of media, and personal
privacy and data protection apply to the Internet. The vast majority of such
laws were adopted before the advent of the Internet and related technologies and
do not address the unique issues associated with the Internet and related
technologies. Most of the laws that relate to the Internet have not yet been
interpreted. In addition to potential legislation from local, state and federal
governments, our business may be directly or indirectly affected by agreements
and other laws and regulations that impose fees, royalties or unanticipated
payments regarding the distribution of media over the Internet. While we and our
customers may be directly affected by such agreements, we are not a party to
such agreements and have little ability to influence the degree such agreements
favor or disfavor Internet distribution or our business models. Changes to or
the interpretation of these laws and the entry into such industry agreements
could:

        -   limit the growth of the Internet;
        -   create uncertainty or impose costs in the marketplace that could
            reduce demand for our products and services;
        -   increase our cost of doing business;
        -   expose us to increased litigation risk, substantial defense costs
            and significant liabilities associated with content available on our
            Web sites or distributed or accessed through our products or
            services, with our provision of products and services, and with the
            features or performance of our products and Web sites;
        -   lead to increased product development costs or otherwise harm our
            business;  and/or
        -   decrease the rate of growth of our user base and limit our ability
            to effectively communicate with and market to our user base.

There are a large number of legislative proposals before the United States
Congress and various state legislatures regarding intellectual property,
privacy, email marketing and security issues related to our business. It is not
possible to predict whether or when such legislation may be adopted, and certain
proposals, if adopted, could materially and adversely affect our business
through a decrease in revenue.

                                       26
**IF WE ARE UNABLE TO ADEQUATELY PROTECT OUR INTELLECTUAL PROPERTY RIGHTS, OUR
BUSINESS COULD SUFFER**

Our success is dependent upon our ability to use our proprietary technology to
create revenue-producing opportunities. If we are not able to adequately protect
our proprietary technology, we will be required to seek revenue from sources
other than our current proprietary technology. We currently protect our
proprietary rights through a combination of patent, copyright, trademark and
trade secret law, confidentiality agreements and contractual provisions.
Provisions of our client agreements, including provisions protecting against
unauthorized use, copying, transfer and disclosure, may be unenforceable under
the laws of some jurisdictions. We are also required to negotiate limits on
these provisions from time to time. We may not be able to adequately deter
misappropriation of proprietary information or to detect unauthorized use and
take appropriate steps to enforce our intellectual property rights.

**IF OUR INTELLECTUAL PROPERTY RIGHTS ARE CHALLENGED, WE MAY FACE POTENTIAL
LIABILITY**

In recent years, litigation involving patents and other intellectual property
rights has increased. Patents exist which cover software and services in which
we compete. We believe that we are either not using these patented solutions,
software and services or have utilized them prior to the patent filing date.
Regardless, we may be a party to litigation in the future to protect our
intellectual property or for allegedly infringing other intellectual property
rights. Such litigation may force us to do one or more of the following:

        -   cease selling or using products or services that incorporate the
            challenged intellectual property;
        -   obtain from the holder of the infringed intellectual property a
            license to sell or use the relevant technology, which license may
            not be available on reasonable pricing or business terms; or
        -   redesign our affected products or services at additional cost to us.

**WE DO NOT PLAN TO PAY CASH DIVIDENDS ON OUR STOCK**

Since our inception, we have not paid and do not intend to pay any cash
dividends on our common stock in the foreseeable future. As a result, an
investor in the common stock would only receive a return on the investment if
the market price of the common stock increases.

**IMPACT OF INFLATION**

We believe that inflation will not have a material impact on our future
operating results.

                                       27
**ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK**

We had no market risk sensitive instruments, positions or transactions at
December 31, 2002.

**ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTAL DATA**

Our Financial Statements required by this item are submitted as a separate
section of this Annual Report on Form 10-K. See "Consolidated Financial
Statements" on pages F-1 - F-20 of this Annual Report on Form 10-K.

**ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
         FINANCIAL DISCLOSURE**

Holtz Rubenstein & Co, LLP resigned as independent certified public accountant
and independent auditor on December 17, 2002. Their report on our financial
statements for the years ended December 31, 2001 and 2000 did not contain an
adverse opinion or disclaimer of opinion, nor was it qualified or modified as to
uncertainty, audit scope or accounting principles other than the uncertainty
related to our ability to continue as a going concern through December 31, 2001.
During the fiscal years ended December 31, 2001 and 2000, there were no
disagreements with Holtz Rubenstein & Co, LLP on any matters of accounting
principles or practices, financial statement disclosure or auditing scope or
procedure, which, if not resolved to the satisfaction of Holtz Rubenstein & Co,
LLP would have caused it to make reference to the subject matter of the
disagreement in connection with its report on these financial statements for
those periods.

We retained Salberg & Company, P.A. as independent certified public
accountants and independent auditors in March 2003.

                                       28
**PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT**

The following table sets forth the name, age and term of office as director for
each director and his present position(s) with the Company:

-------------------- -------------------- -------------------- --------------------
Director                   Age                  Position             Since
-------------------- -------------------- -------------------- --------------------
Michael L. Weinstein       48               Chairman and CEO     December 2002
-------------------- -------------------- -------------------- --------------------
Robert J. Desiderio        62               Director             December 2002
-------------------- -------------------- -------------------- --------------------
Esteban A. Aguilar         50               Director             December 2002
-------------------- -------------------- -------------------- --------------------

Michael L. Weinstein has been Chairman and CEO since December 2002. From 2000 to
December 2002, he was managing director of FOCUS Investments, a business
acquisition company. From 1997 to 2000, he was COO of Ben Ezra, Weinstein & Co,
a software development company.

Robert J. Desiderio has been a director since December 2002. From 1998 until
2002, he was Dean of the University of New Mexico Law School. Subsequently to
the present, he has been employed as a partner in the law firm of Sanchez,
Mowrer and Desiderio, P.C.

Esteban A. Aguilar has been a director since December 2002. From 1998 to the
present, he has been employed as a partner in the law firm of Aguilar Law
Offices, P.C.

Section 16(a) of the Securities Exchange Act of 1934, as amended

Section 16(a) of the Securities Exchange Act of 1934, as amended, requires the
Company's directors and executive officers, and persons who beneficially own
more than 10% of a registered class of the Company's equity securities, to file
reports of beneficial ownership and changes in beneficial ownership of the
Company's securities with the SEC on Forms 3 (Initial Statement of Beneficial
Ownership), 4 (Statement of Changes of Beneficial Ownership of Securities) and 5
(Annual Statement of Beneficial Ownership of Securities). Directors, executive
officers and beneficial owners of more than 10% of the Company's Common Stock
are required by SEC regulations to furnish the Company with copies of all
Section 16(a) forms that they file. Except as otherwise set forth herein, based
solely on review of the copies of such forms furnished to the Company, or
written representations that no reports were required, the Company believes that
for the period from January 1, 2002 through December 31, 2002, the registrant
has been unable to determine if the prior directors, executive officers and
greater than 10% beneficial owners complied with all Section 16(a) filing
requirements applicable to them. The current officers and directors own no stock
of the registrant.

                                       29
**ITEM 11.  EXECUTIVE COMPENSATION**

The following tables set forth information with respect to compensation paid by
the Company for the services during the three years ended December 31, 2002 of
the Company's Chief Executive Officer, Chief Financial Officer and Chief
Technology Officer and Senior Executive Vice President for the two years ended
December 31, 2002.

                            **SUMMARY CMPENSATION TABLE**

                                                                              Long Term Compensation
                                                                          -------------------------------
                Annual Compensation
                                                Awards           Payouts
             -------------------------        ----------     --------------
(a)             (b)             (c)             (d)             (e)             (f)             (g)             (h)           (i)
                                                                Other       Restricted      Securities                       All
                                                                Annual         Stock        Underlying          LTIP        Other
Name and Principle                                              Compen-       Awarded        Options/          Payouts     Compen-
   Position       Year           Salary ($)      Bonus ($)      sation ($)      ($)          SARs (#)            ($)       sation($)
----------------- -------       -----------     ----------   -------------- -----------    ------------      ----------  -----------
ROBERT F. GRUDER  2002          $  75,000       $     -      $       -      $      -         233,334           $   -      $    -
Chief Executive   2001            150,000             -              -             -          65,000               -           -
Officer           2000            131,000          64,000            -             -               -               -           -

J. WAYNE THOMAS   2002             65,000             -              -             -         116,666               -           -
Chief Financial   2001            145,000             -              -             -          25,000               -           -
Officer           2000            130,000          85,000            -             -           5,005               -           -

LEON SHKLAR       2002             50,000             -              -             -           8,333               -           -
Chief Technology  2001            150,000             -              -             -               -               -           -
Officer           2000            127,000             -              -             -          17,055         432,000           -

THOMAS J. DUDCHIK 2002             50,000             -              -             -         150,000               -           -
Senior Executive  2001            100,000             -              -             -          15,000               -           -
Vice President

The senior executive officers do not currently receive any other personal
benefits. The Company offers health insurance to all of its employees. The
Company also has a 401(k) program, but during the year 2002 and 2001, made no
contributions.  Effective October 2002, the 401(k) plan was terminated.

                     **OPTION/SAR GRANTS IN LAST FISCAL YEAR**

                                                                                      Potential Realizable Value
                                                                                        At Assumed Annual Rates
                                                                                      of Stock Price Appreciation
Individual Grants                                                                           for Option Term
------------------                                                                    ----------------------------
(a)                     (b)             (c)             (d)             (e)               (f)              (g)
                        Number of       % of Total
                        Securities      Options/SARs
                        Underlying      Granted to      Exercise
                        Options/SARs    Employees in    Price           Expiration
Name                    Granted(#)(1)   Fiscal Year     ($/Sh)          Date            5%($)           10% ($)
----------------        -------------   -------------   ---------       -----------   --------        ------------
Robert F. Gruder                21,667          53.5%   $19.95          8/14/11         $ 0             $ 0

J. Wayne Thomas                  8,333          20.6%    19.95          8/14/11           0               0

Thomas J. Dudchik                5,000          12.4%    19.95          8/14/11           0               0

(1) All options listed were granted pursuant to the Company's stock option plan.
    Option exercise prices were at the market price when granted. The options
    have a term of ten years and vest in one year.

                                       30
**AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
                          FISCAL YEAR-END OPTION VALUES**

The following table provides information on option exercises in 2002 by the
Named Executive Officers and the value of such officers' unexercised options at
December 31, 2002.

                                                                                   Number of Securities
                       Shares                     Underlying Unexercised           Value of Unexercised
                     Aquired on       Value             Options at                In-the-Money Options at
                      Exercise       Realized      December 31, 2002 (#)         December 31, 2002 ($) (1)
Name                    (#)             ($)    Exercisable     Unexercisable   Exercisable     Unexercisable
-------------------------------------------------------------------------------------------------------------
Robert F. Gruder         0             $ 0        500,000               -           $ 0               $ 0

Thomas J. Dudchik        0               0         33,333             -               0                 0

(1) Represents the difference between the closing price of our common stock on
    December 31, 2001 ($1.15) and the exercise price of the options.

                                       31
**ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT**

The following table sets forth information regarding the beneficial ownership of
the Company's Common Stock as of April 30, 2003 by (i) each person who is known
by the Company to own beneficially more than 5% of the Company's outstanding
Common Stock; (ii) each of the Company's officers and directors and (iii) all of
the aforementioned as a group:

Names of                Amount and Nature of Beneficial Ownership       Percent
Beneficial Owner (1)       of Common Shares as of 4/30/03               of Class
--------------------    -----------------------------------------       --------
Robert F. Gruder (2)                       378,611                        17.5%
Thomas J. Dudchik                           14,918                           *
Larry R. Green                                 -                             -
Wells Van Pelt                               2,333                           *
Marc S. Ganis                                  -                             -
Leon Shklar, Ph.D.                          11,836                           *
J. Wayne Thomas                              8,615                           *
Steven S. Smith (3)                          1,618                           *

TOTALS                                     418,231                       19.3%

* Represents less than 1% of the Company's outstanding shares of Common Stock.

(1)   Beneficial ownership represents sole voting and investment power. To the
      Company's knowledge, the only shareholder who beneficially owned more that
      5% of the outstanding common shares as of April 12, 2002, was Mr. Gruder.

(2)   The business address for Mr. Gruder is: 4064 Colony Road, Charlotte, NC
      28211.

(3)   Includes 2,000 shares that may be acquired within 60 days of April 12,
      2002, pursuant to outstanding stock options.

                                       32
**ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS**

In 2001, a loan in the amount of $9,944 issued to an officer was repaid full in
2002.

During the second quarter of 2002, a loan in the amount of $110,000 was issued
to an officer and principal shareholder of the Company, and a $10,000 loan was
issued to an officer. The loans were repaid in full with interest during the
third quarter of 2002.

At December 31, 2002, 5,000,000 shares of common stock are issuable to Lewco
Corporation. The key officer of Lewco Corporation is an immediate family member
of a consultant affiliated with the Company.

On December 20, 2002, Mr. Gruder related entities entered into an agreement (the
"Assignment Agreement") with the lessor. In return for the CEO assigning his
membership interest in LLC lessor to the other LLC members, we were released
from all our current and future obligations under the operating lease. During
the second quarter, we had accrued all remaining lease payments due under the
operating lease and recorded additional rent expense of $3,750,000. On December
20, 2002, in connection with Assignment Agreement, we reversed all liabilities
related to the lease and recorded settlement income of $3,080,040.

                                     **PART IV

ITEM 14.  CONTROLS AND PROCEDURES**

Within the 90 days prior to the filing of this report, the Company carried out
an evaluation under the supervision and with the participation of the Company's
management, including the Company's Chief Executive Officer and Chief Financial
Officer, of the effectiveness of the design and operation of the Company's
disclosure controls and procedures as defined in Rule 13a-14(c) under the
Securities Exchange Act of 1934. Based upon that evaluation, the Chief Executive
Officer and Chief Financial Officer concluded that the Company's disclosure
controls and procedures were effective. There were not any significant changes
in internal controls or in other factors that could significantly affect these
controls subsequent to the date of their evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.

                                       33
**ITEM 15.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K**

(a)(1) The following consolidated financial statements of Information Architects
       Corporation are included in Item 8:

       Consolidated Balance Sheets at December 31, 2002 and 2001
       Consolidated Statements of Operations for the years ended December 31,
       2002, 2001 and 2000
       Consolidated Statements of Cash Flows for the years ended December 31,
       2002, 2001 and 2000
       Consolidated Statements of Changes in Shareholders' Equity for the years
       ended  December 31, 2002, 2001 and 2000
       Notes to Consolidated Financial Statements for the years ended December
       31, 2002, 2001 and 2000
       Report of Salberg and Company,P.A., Independent Auditors
       Report of Holtz Rubenstein & Co. LLP, Independent Auditors

(1)(2)   List of Exhibits

         99.1 Sarbanes-Oxley Certification

(b)      Reports on Form 8-K

         Report filed on December 16, 2002 and May 5, 2003.

                                       34
**SIGNATURES**

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

INFORMATION ARCHITECTS CORPORATION

Dated:  May 9, 2003

Pursuant to the requirements of the Securities Exchange Act of 1934, this Report
has been signed below on May 9, 2003, by the following persons on our behalf and
in the capacities indicated.

---------------------------- -------------------------- -------------------------- --------------------------
Title                        Name                       Date                       Signature
---------------------------- -------------------------- -------------------------- --------------------------
Principal Executive Officer  Michael L. Weinstein       May 9, 2003                /s/  Michael L. Weinstein
---------------------------- -------------------------- -------------------------- --------------------------
Principal Accounting         Michael L. Weinstein       May 9, 2003                /s/  Michael L. Weinstein
Officer
---------------------------- -------------------------- -------------------------- --------------------------
Principal Financial Officer  Michael L. Weinstein       May 9, 2003                /s/  Michael L. Weinstein
---------------------------- -------------------------- -------------------------- --------------------------

Pursuant to the requirements of the Securities Act of 1933, this Registration
tatement has been signed by the following persons in the capacities and on the
date indicated.

---------------------------- -------------------------- -------------------------- --------------------------
SIGNATURE                    NAME                       TITLE                      DATE
---------------------------- -------------------------- -------------------------- --------------------------
/s/ Michael L. Weinstei      Michael L. Weinstein       Director                   May 9, 2003
---------------------------- -------------------------- -------------------------- --------------------------
/s/ Robert J. Desiderio      Robert J. Desiderio        Director                   May 9, 2003
---------------------------- -------------------------- -------------------------- --------------------------
/s/ Esteban A. Aguilar       Esteban A. Aguilar         Director                   May 9, 2003
---------------------------- -------------------------- -------------------------- --------------------------

                                       35

CERTIFICATIONS

I, Michael L. Weinstein, certify that:

1.   I have reviewed this annual report on Form 10K of Information Architects
     Corporation;

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; and

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 issuer as of, and for, the periods presented in this annual report.

4.   I and the issuer's other certifying officers are responsible for
     establishing and maintaining disclosure controls and procedures for the
     issuer and have:

    (i) Designed such disclosure controls and procedures to ensure that material
        information relating to the issuer, including its consolidated
        subsidiaries, is made known to us by others within those entities,
        particularly during the period in which the periodic reports are being
        prepared;

   (ii) Evaluated the effectiveness of the issuer's disclosure controls and
        procedures as of April 30, 2003 ("Evaluation Date"); and

  (iii) Presented in the report our conclusions about the effectiveness of the
        disclosure controls and procedures based on our evaluation as of the
        Evaluation Date;

5.  I and the issuer's other certifying officers have disclosed, based on our
    most recent evaluation, to the issuer's auditors and the audit committee of
    the board of directors (or persons fulfilling the equivalent function):

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

  (ii) Any fraud, whether or not material, that involves management or other
       employees who have a significant role in the issuer's internal controls;
       and

6.  I and the issuer's other certifying officers have indicated in the report
    whether or not 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 weaknesses.

Date:  May 9, 2003

/s/ Michael L. Weinstein
    Michael L. Weinstein
    Chief Financial Officer and CEO

                                       36

                INFORMATION ARCHITECTS CORPORATION AND SUBSIDIARY
                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

                                                                            Page

        Independent Auditors' Report                                         F-2

        Independent Auditors' Report                                         F-3

        Consolidated Balance Sheets                                          F-4

        Consolidated Statements of Operations                                F-5

        Consolidated Statement of Shareholders' (Deficit) Equity             F-6

        Consolidated Statements of Cash Flows                                F-7

        Notes to Consolidated Financial Statements                    F-8 - F-20

                                     F-1

**Independent Auditors' Report**

To the Board of Directors and Shareholders
Information Architects Corporation and Subsidiary
Lutz, Florida

We have audited the consolidated balance sheet of Information Architects
Corporation and Subsidiary as of December 31, 2002 and the related consolidated
statements of operations, shareholders' deficit and cash flows for the year then
ended. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audit. The financial  statements at December 31,2001 and
for the years ended  December 31, 2001 and 2000 were  audited by other  auditors
whose report dated February 1, 2002 on those statements  included an explanatory
paragraph  describing   conditions  that  raised  substantial  doubt  about  the
Company's ability to continue as a going concern.

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

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Information
Architects Corporation and Subsidiary as of December 31, 2002 and the results of
its operations and its cash flows for the year then ended, in conformity with
accounting principles generally accepted in the United States of America.

The accompanying consolidated financial statements have been prepared assuming
the Company will continue as a going concern. As discussed in Note 1 to the
consolidated financial statements, the Company's recurring losses from
operations, stockholders' deficit and suspension of all operations as of December
31, 2002 raise substantial doubt about its ability to continue as a going
concern. Management's plans in regard to these matters are also described in
Note 1. The consolidated financial statements do not include any adjustments
that might result from the outcome of this uncertainty.

/s/ SALBERG & COMPANY, P.A.

SALBERG & COMPANY, P.A.
Boca Raton, Florida
April 25, 2003

                                      F-2

**Independent Auditors' Report**

To the Board of Directors and Shareholders
Information Architects Corporation and Subsidiary
Charlotte, North Carolina

We have audited the consolidated balance sheets of Information Architects
Corporation and Subsidiary as of December 31, 2001, and the related consolidated
statements of operations, shareholders' equity and cash flows for the two years
ended December 31, 2001. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
financial statements based on our 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 Information
Architects Corporation and Subsidiary as of December 31, 2001 and the results of
its operations and its cash flows for the two years ended December 31, 2001, in
conformity with accounting principles generally accepted in the United States of
America.

The accompanying consolidated financial statements have been prepared assuming
the Company will continue as a going concern. As discussed in the "Organization
and Summary of Significant Policies" note to the consolidated financial
statements, the Company's recurring losses from operations raise substantial
doubt about its ability to continue as a going concern. Management's plans in
regard to these matters are also described in the "Organization and Summary of
Significant Policies" note. The consolidated financial statements do not include
any adjustments that might result from the outcome of this uncertainty.

                                              /s/ HOLTZ RUBENSTEIN & CO., LLP
                                                  HOLTZ RUBENSTEIN & CO., LLP

Melville, New York
February 1, 2002

                                      F-3

**INFORMATION ARCHITECTS CORPORATION AND SUBSIDIARY
                           CONSOLIDATED BALANCE SHEETS**

                                                            December 31,
                                                       ------------------------
                                **ASSETS**                   2002         2001
                                                       ----------- ------------

**CURRENT ASSETS:**
     Cash                                              $        -  $  3,304,282
     Short-term investments                                     -       750,000
                                                       ----------- ------------
           Total Cash and Short-term Investments                -     4,054,282

     Prepaid expenses                                           -       126,653

     Note receivable, officer                                             9,944
     Other current assets                                       -         9,404
                                                       ----------- ------------

      Total Current Assets                                      -     4,200,283

Property and equipment, net                                     -     2,161,488
Trademarks, net                                                 -        64,856
                                                       ----------- ------------

      Total Assets                                     $        -  $  6,426,627
                                                       =========== ============

                 **LIABILITIES AND SHAREHOLDERS' (DEFICIT) EQUITY****CURRENT LIABILITIES:**
    Accounts payable                                   $   102,656 $     75,710
    Accrued expenses and liabilities                     1,565,522    1,736,087
    Unearned revenues                                       13,947       27,503
                                                       ----------- ------------

        Total Current Liabilities                        1,682,125    1,839,300
                                                       ----------- ------------

**SHAREHOLDERS' (DEFICIT) EQUITY:**
    Preferred stock, $.001 par value, 1,000,000
          shares authorized; 75,500 and 95,500
          shares issued and outstanding at December
          31, 2002 and 2001, respectively                       76           96
    Common stock, $.001 par value, 50,000,000
          shares authorized; 4,082,095 and 2,162,555
          shares issued and outstanding at December
          31, 2002 and 2001, respectively                    4,082        2,163
    Common stock issuable, $.001 par value
          (5,000,000 shares)                                 5,000           -
    Additional paid-in capital                          68,606,342   67,169,034
    Accumulated deficit                                (70,297,625) (62,550,436)
    Accumulated other comprehensive loss                        -       (33,530)
                                                       ----------- ------------

        Total Shareholders' (Deficit) Equity            (1,682,125)   4,587,327
                                                       ----------- ------------

        Total Liabilities and Shareholders'
             (Deficit) Equity                          $        -  $  6,426,627
                                                       =========== ============

          See accompanying notes to consolidated financial statements.

                                       F-4

**INFORMATION ARCHITECTS CORPORATION AND SUBSIDIARY
                      CONSOLIDATED STATEMENTS OF OPERATIONS**

                                            For the Years ended December 31,
                                          ----------------------------------
                                              2002         2001          2000
                                          ------------ ------------  ------------

**REVENUES**                                  $   63,125    $1,588,439    $4,665,746
                                          ------------ ------------  ------------

**OPERATING EXPENSES:**
       Cost of revenues                       37,708     2,117,405     2,891,393
       Sales and marketing                   627,402     2,189,343     5,377,433
       Research and development              710,196     1,249,388     1,811,275
       General and administrative          7,443,653     5,623,999     6,313,150
       Depreciation and amortization       1,010,411     1,746,916     1,346,333
                                          ------------ ------------  ------------

        Total Operating Expenses           9,829,370    12,927,051    17,739,584
                                          ------------ ------------  ------------

**LOSS FROM OPERATIONS**                      (9,766,245)  (11,338,612)  (13,073,838)
                                          ------------ ------------  ------------

**OTHER INCOME (EXPENSES):**
    Interest income                           20,531       340,838       698,216
    Interest expense                          (1,104)      (14,345)     (126,978)
    Settlement gain                        3,517,395            -             -
    Loss from disposal of assets          (1,520,095)           -             -
    Other                                      2,329       (21,890)       62,218
                                          ------------ ------------  ------------

        Total Other Income (Expenses)      2,019,056       304,603       633,456
                                          ------------ ------------  ------------

LOSS BEFORE PROVISION FOR INCOME TAXES    (7,747,189)  (11,034,009)  (12,440,382)

PROVISION FOR INCOME TAXES                        -     (1,800,000)           -
                                         ------------ ------------  ------------

NET LOSS                                 $(7,747,189) $(12,834,009) $(12,440,382)
                                         ============ ============  ============

Basic and diluted loss per share         $     (2.89) $      (6.01) $      (6.28)
                                         ============ ============  ============

Weighted average common shares outstanding:
     Basic and diluted                     2,681,535     2,135,678     1,980,435
                                         ============ ============  ============

          See accompanying notes to consolidated financial statements.

                                       F-5

**INFORMATION ARCHITECTS CORPORATION AND SUBSIDIARY
                      CONSOLIDATED STATEMENTS OF CASH FLOWS**

                                                         For the Years
                                                        Ended December 31,
                                            ----------------------------------------
                                                2002         2001           2000
                                            ------------  ------------  ------------
Cash flows from operating activities:
  Net loss from operations                  $ (7,747,189) $(12,834,009) $(12,440,382)
  Adjustments to reconcile net loss
  to net cash used in operating activities:
   Depreciation and amortization               1,010,411     1,746,916     1,346,333
   Valuation of deferred tax asset                    -      1,800,000            -
   Settlement gain                            (3,517,395)           -             -
   Non-cash expenses                                  -        550,975       164,246
   Loss (gain) on disposal/sale of
      property and equipment                   1,520,095        54,683       (14,187)
   Allowance for doubtful accounts                    -        (50,000)      (50,000)
   Stock and stock options issued for services 1,239,633            -        120,750
   Other comprehensive loss                       33,530            -             -

   (Increase) decrease in:
    Accounts receivable                               -        855,769     1,829,241
    Prepaid expenses                             126,653        45,398        54,556
    Other receivables                                 -         26,228        34,910
    Other assets                                   9,404        44,225        69,036

   Increase (decrease) in:
    Accounts payable                             233,375      (240,772)   (1,321,339)
    Accrued expenses and liabilities           3,244,975      985,535      (428,117)
    Unearned revenue                             (13,556)        2,716      (121,119)
                                            ------------  ------------  ------------

Net cash used in operating activities         (3,860,064)   (7,012,336)  (10,756,072)
                                            ------------  ------------  ------------

Cash flows from investing activities:
  Purchase of property and equipment            (350,308)     (739,146)     (487,524)
  Proceeds from sale of property and equipment    46,146            -             -
  Purchase of short-term investment                   -       (750,000)     (750,000)
  Maturity/sale of short-term investment         750,000       750,000            -
                                            ------------  ------------  ------------

Net cash provided by (used in) investing
activities                                       445,838      (739,146)   (1,237,524)
                                            ------------  ------------  ------------
Cash flows from financing activities:
  Proceeds from sale of common stock, net        100,000       473,253    16,416,814
  Loan to officer                                  9,944        (9,944)           -
  Stock issuance costs                                -             -       (745,399)
  Advances to shareholders                            -             -        (83,285)
  Repayment of loans                                  -             -       (175,000)
  Repayment of capital lease obligations              -             -       (225,331)
                                            ------------  ------------  ------------
Net cash provided by financing activities        109,944       463,309    15,187,799
                                            ------------  ------------  ------------
Net (decrease) increase in cash               (3,304,282)   (7,288,173)    3,194,203

Cash at beginning of year                      3,304,282    10,592,455     7,398,252
                                            ------------  ------------  ------------
Cash at end of year                         $         -   $  3,304,282  $ 10,592,455
                                            ============  ============  ============
**SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:**

Cash paid during the period for:
  Interest                                  $      1,095  $     14,000  $     45,000
                                            ============  ============  ============
  Income Taxes                              $         -   $         -   $         -
                                            ============  ============  ============

          See accompanying notes to consolidated financial statements.

                                       F-6

**INFORMATION ARCHITECTS CORPORATION AND SUBSIDIARY
                CONSOLIDATED STATEMENTS OF STOCKHOLDERS' (DEFICIT) EQUITY
              For the Years Ended December 31, 2002, 2001 and 2000**

                                                                                                            Accumulated    Total
                   Preferred Stock        Common Stock       Common Stock Issuable   Additional              Other     Shareholders'
               ---------------------------------------------------------------------  Paid-In  Accumulated Comprehensive  Equity
                Shares      Amount      Shares      Amount      Shares      Amount    Capital    Deficit      Loss       (Deficit)
               ---------   ---------   ---------   ---------   ---------   ---------  ---------  ---------   ---------    ---------

Balance at
December 31, 1999   -    $    -       1,833,034   $   1,833        -       $   -   $48,573,563 $(37,276,045)$ (56,851) $11,242,500

Comprehensive loss:
    Net loss        -         -              -           -         -           -         -      (12,440,382)        0  (12,440,382)
    Translation
    adjustment      -         -              -           -         -           -         -               -     35,978       35,978
                                                                                                                          ---------
Comprehensive loss                                                                                                     (12,404,404)

Issuance of
preferred shares
for cash, net  224,103       224             -           -         -           -    10,883,527           -         -    10,883,751

Issuance of
securities for
services            -         -              -           -         -           -       143,745           -         -       143,745

Shares issued for
exercise of stock
options/warrants    -         -         134,196         134        -           -     4,581,509           -         -     4,581,643
Issuance of securities
under employee stock
purchase plan       -         -           2,925           3        -           -       121,546           -         -       121,549

Issuance of securities
for legal
settlement          -         -             666           1        -           -        78,124           -         -        78,125

Conversion of
preferred shares
for common
shares         (39,016)      (39)        26,011          26        -           -            13           -         -            -

Conversion of debt
for equity          -         -          66,667          67        -           -     1,750,133           -         -      1,750,199
             ---------   ---------   ---------   ---------   ---------   ---------  ---------  ---------   ---------    ---------

Balance at
December 31,
2000           185,087       185      2,063,499       2,063        -           -    66,132,160  (49,716,427)  (20,873)  16,397,108

Comprehensive
loss:
Net loss            -         -              -           -         -           -           -    (12,834,009)       -   (12,834,009)
Translation
adjustment          -         -              -           -         -           -           -             -    (12,657)     (12,657)
                                                                                                                          ---------                                                                                                                                                                                                                                                  ------------------------
Comprehensive loss                                                                                                     (12,846,666)

Shares issued for
exercise of stock
options/warrants    -         -          15,421          16        -           -       413,022           -         -        413,038

Issuance of securities
under employee stock
purchase plan       -         -           3,910           4        -           -        72,843           -         -         72,847

Issuance of
securities for
legal settlement    -         -          20,000          20        -           -       550,980           -         -        551,000

Conversion of
preferred shares
for common
shares         (89,587)      (89)        59,725          60        -           -            29           -         -            -
                ---------   ---------   ---------   ---------   ---------   ---------  ---------  ---------   ---------    ---------

Balance at
December 31,
2001            95,500        96      2,162,555       2,163        -           -    67,169,034  (62,550,436)    (33,530)   4,587,327

Comprehensive loss:
Net loss            -         -             -            -         -           -            -    (7,747,189)       -     (7,747,189)
Translation
adjustment          -         -             -            -         -           -           -             -       33,530      33,530
                                                                                                                          ---------                                                                                                                                                                                                                                                  ------------------------
Comprehensive loss                                                                                                       (7,713,659)

Issuance of securities
under employee stock
purchase plan       -         -           1,540           1        -           -         4,573           -         -          4,574

Issuance of stock
for services        -         -       1,571,333       1,571  5,000,000      5,000    1,065,879           -         -      1,072,450                                                                                                                                                                  -                     -

Grant of common stock
warrants to
non-employees       -         -             -            -         -           -       167,183           -         -        167,183

Conversion of
preferred shares
for common
shares         (20,000)      (20)        13,333          13        -           -             7           -         -              0

Issuance of
common shares
for cash, net       -         -         166,667         167        -           -        99,833           -         -        100,000                                                                                                                                                                                100,000

Issuance of
common shares
for debt            -         -         166,667         167        -           -        99,833           -         -        100,000
                ---------   ---------   ---------   ---------   ---------   ---------  ---------  ---------   ---------    ---------
                75,500     $  76      4,082,095    $  4,082   5,000,000    $ 5,000   $68,606,342 $(70,297,625) $   -    $(1,682,125)
                =========   =========   =========   =========   =========   =========   =========   =========   =========  =========

           See accompanying note to consolidated financial statements.

                                       F-7

                **INFORMATION ARCHITECTS CORPORATION AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        DECEMBER 31, 2002, 2001 AND 2000****NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**Description of Business

Information Architects Corporation and Subsidiary (the "Company" or "iA"), a
North Carolina corporation, was formerly a developer of dynamic content delivery
and interchange infrastructure software solutions for both corporations and
individuals. Due to the Company's inability to achieve profitable operations and
the lack of capital to continue to develop its product line and sales staff, the
Company suspended its operations in December 2002.

On December 13, 2002, the Company entered into a share exchange agreement with
Perceptre, LLC ("Perceptre"), whereas the members of Perceptre were to obtain
majority voting control of the Company. This agreement was entered into with
certain conditions precedent to closing. As of the date of the accompanying
audit report, certain of these conditions have not been satisfied and the terms
of the agreement are being renegotiated. The financial statements do not contain
any adjustments to reflect this transaction, however, the Company still believes
that all conditions will be met and the agreement, as amended, will close in the
near-term future.

Going Concern 

The Company's consolidated financial statements for the year ended December 31,
2002 have been prepared on a going concern basis which contemplated the
realization of assets and the settlement of liabilities in the normal course of
business. The Company has suspended all of its business operations in 2002 and
has incurred net losses of approximately $7,747,000, $12,834,000, and
$12,440,000 in the years ended December 31, 2002, 2001 and 2000, respectively,
and its shareholders' deficit at December 31, 2002 was $1,682,125. These factors
raise substantial doubt about the Company's ability to continue as a going
concern. The ability of the Company to continue as a going concern is dependent
on the Company's ability to acquire or establish a new operating business,
reestablish its former business, generate revenues and/or raise capital. The
financial statements do not include any adjustments that might be necessary if
the Company is unable to continue as a going concern.

The Company has currently suspended operations and is exploring various options.
Among the options that have been explored is the issuance of stock and/or debt
financing, filing Chapter 7 bankruptcy, selling the corporation as a public
shell or entering into a business combination, or reestablishing its former
business. As of the date of the accompanying audit report, the Company is
renegotiating a share exchange agreement entered into on December 13, 2002 (see
above). Any or all of these options as well as others may be decided upon for
the Company. No assurance can be made at to the success of any of these options.

Basis of Presentation and Consolidation

The Company's consolidated financial statements include the accounts of
Information Architects Corporation and its wholly owned inactive United Kingdom
subsidiary, Alydaar International, Limited ("International"). All significant
intercompany transactions and balances have been eliminated in consolidation.
Accounts denominated in foreign currencies have been remeasured using the U.S.
dollar as the functional currency.

Foreign Currencies

Assets and liabilities recorded in foreign currencies on the books of
International are translated at the exchange rate on the balance sheet date.
Translation adjustments resulting from this process are charged or credited to
other comprehensive income. Revenue and expenses are translated at average rates
of exchange prevailing during the year.

                                      F-8

**INFORMATION ARCHITECTS CORPORATION AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        DECEMBER 31, 2002, 2001 AND 2000**Use of Estimates

The consolidated financial statements are prepared in accordance with generally
accepted accounting principles in the United States of America. This preparation
requires management to include amounts based on management's prudent judgments
and estimates that affect the amounts reported in the consolidated financial
statements and accompanying notes. Actual results may differ from these
estimates. Significant estimates made for the year ended December 31, 2002
include the valuation of property and equipment and intangible assets for which
impairment write downs have been recorded, valuation of stock based grants to
employees and third parties, and valuation of the deferred tax assets.

Cash and Cash Equivalents

Cash and equivalents include cash on hand and highly liquid debt instruments
purchased with a maturity of three months or less. The short-term investment
balance at December 31, 2001 was a certificate of deposit being used to secure a
standby letter of credit, which was in accordance with the Company's facility
rental agreement. Cost approximated market for all classifications of cash,
equivalents and short-term investments.

Long-Lived assets

The Company reviews long-lived assets and certain identifiable assets related to
those assets for impairment whenever circumstances and situations change such
that there is an indication that the carrying amounts may not be recoverable. If
the non-discounted future cash flows of the enterprise are less than their
carrying amount, their carrying amounts are reduced to fair value and an
impairment loss is recognized. Certain impairment losses were recognized during
2002 on property and equipment and intangible assets (see below).

Property and Equipment

Property and equipment were previously stated at cost less accumulated
depreciation. Costs associated with internally developed technology attributable
to modifying and improving the Company's software products or developing
additional features of its products subsequent to the establishment of
technological feasibility were previously capitalized to the extent that costs
were realizable from estimated future revenues.

Depreciation and amortization were previously computed for financial reporting
purposes using the straight-line method over the estimated useful lives of the
related assets. Estimated useful lives for computer equipment, third party
software, and internally developed technology were three years. Equipment and
furniture had a seven year estimated life. Amortization of leasehold
improvements was previously computed using the straight-line method over the
estimated useful lives of the related assets or the remaining term of the lease,
whichever was shorter. Maintenance and repairs of property and equipment were
previously charged to operations; major improvements were capitalized. Upon
retirement, sale or other disposition of property and equipment, the cost and
accumulated depreciation are eliminated from the accounts and gain or loss was
included in operations. For the year ended December 31, 2002, depreciation
expense amounted to $1,006,120. All previous software development costs
capitalized and abandoned equipment and furniture that were not salable were
written off during 2002 due to impairment. Additionally, the Company sold
property and equipment. In connection with the sale and impairment of property
and equipment, the Company recorded a loss from the disposal of assets of
$ 1,459,530.

                                      F-9

**INFORMATION ARCHITECTS CORPORATION AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        DECEMBER 31, 2002, 2001 AND 2000**Trademarks

The Company's capitalized trademark costs were amortized over a ten-year period
using the straight-line method. Intangible assets are reviewed for impairment
whenever events or changes in circumstances indicate that the carrying amount of
an asset may not be recoverable. As of December 31, 2002, the Company wrote off
the balance of their trademarks due to impairment and the impairment loss of
$60,565 is included in loss from disposal of assets on the accompanying
consolidated statements of operations. For the year ended December 31, 2002,
amortization expense amounted to $4,291.

Stock-Based Compensation

The Company accounts for stock options issued to employees in accordance with
the provisions of Accounting Principles Board ("APB") Opinion No. 25,
"Accounting for Stock Issued to Employees," and related interpretations. As
such, compensation cost is measured on the date of grant as the excess of the
current market price of the underlying stock over the exercise price. Such
compensation amounts are amortized over the respective vesting periods of the
option grant. The Company adopted the disclosure provisions of SFAS No. 123,
"Accounting for Stock-Based Compensation," which permits entities to provide pro
forma net income (loss) and pro forma earnings (loss) per share disclosures for
employee stock option grants as if the fair-valued based method defined in SFAS
No. 123 had been applied. The Company accounts for stock options and stock
issued to non-employees for goods or services in accordance with SFAS 123.

Revenue Recognition

Currently, the Company has no sources of revenues. The Company recognized
revenues from four primary sources: professional service fees, training fees,
maintenance fees and license fees. Professional service fees and training fees
were recognized as the services were performed. Maintenance fees were recognized
on a straight-line basis over the contract period, which is typically one year.

License fee revenues were recognized upon receipt of our product, provided that
collection is determined to be probable and no significant obligations remain.
The Company provided a 30-day installation warranty related to the installation
of the unmodified product shipped. Upon modification of the product by the
customer, the warranty is voided. Since the Company ceased shipment of the
product in the first quarter of 2002, there were no warranty contingencies as of
December 31, 2002.

Research and Development

Research and development costs are expensed as incurred.

Advertising costs

Advertising costs were expensed as incurred.

Comprehensive Income (loss)

Other comprehensive income (loss) refers to revenue,  expenses, gains and losses
that under  accounting  principles  generally  accepted in the United States are
included in comprehensive  income (loss) but are excluded from net income (loss)
as these amounts are recorded directly as an adjustment to stockholders' equity,
net of tax.  The  Company's  other  comprehensive  income  (loss) is composed of
foreign currency translation adjustments.

                                      F-10

**INFORMATION ARCHITECTS CORPORATION AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        DECEMBER 31, 2002, 2001 AND 2000**Income Taxes

Income taxes are accounted for under the asset and liability method of Statement
of Financial Accounting Standards No. 109, "Accounting for Income Taxes" ("SFAS
109"). Under SFAS 109 deferred tax assets and liabilities are recognized for the
future tax consequences attributable to differences between the financial
statement carrying amounts of existing assets and liabilities and their
respective tax bases. Deferred tax assets and liabilities are measured using
enacted tax rates expected to apply to taxable income in the years in which
those temporary differences are expected to be recovered or settled. Under SFAS
109, the effect on deferred tax assets and liabilities of a change in tax rates
is recognized in income in the period that includes the enactment date.

Net loss per Common Share

Basic loss per share is computed on the basis of the weighted average number of
common shares outstanding. Diluted loss per share is computed on the basis of
the weighted average number of common shares outstanding plus the effect of
outstanding preferred shares using the "if-converted" method and outstanding
stock options and warrants using the "treasury stock" method. For the three-year
period ending December 31, 2002, all of the Company's common stock equivalents
were excluded from the calculation of diluted loss per common share because they
were antidilutive, due to the Company's net losses in those years. At December
31, 2002 there were options and warrants outstanding to purchase 772,428 common
shares which may dilute future earnings per share.

Fair Value of Financial Instruments

Statement of Financial Accounting Standards No. 107, "Disclosures about Fair
Value of Financial Instruments," requires disclosures of information about the
fair value of certain financial instruments for which it is practicable to
estimate that value. For purposes of this disclosure, the fair value of a
financial instrument is the amount at which the instrument could be exchanged in
a current transaction between willing parties, other than in a forced sale or
liquidation.

The carrying amounts of the Company's short-term financial instruments,
including accounts receivable, accounts payable, accrued expenses, and income
taxes payable approximate fair value due to the relatively short period to
maturity for these instruments.

Recent Accounting Pronouncements

In June 2001, the Financial Accounting Standards Board (FASB) issued Statement
of Financial Accounting Standards (SFAS) No. 142, "Goodwill and Other Intangible
Assets." Under SFAS No. 142, goodwill and intangible assets with indefinite
lives are no longer amortized but are reviewed at least annually for impairment.
The Company adopted SFAS No. 142 effective January 1, 2002, which did not have a
material effect on the Company's consolidated financial position or results of
operations.

Statement of Financial Accounting Standard No. 143, "Accounting for Asset
Retirement Obligations", ("SFAS 143") requires entities to record the fair value
of a liability for an asset retirement obligation in the period in which it is
incurred. When the liability is initially recorded, the entity capitalizes a
cost by increasing the carrying amount of the related long-lived asset. Over
time, the liability is accreted to its present value each period, and the
capitalized cost is depreciated over the useful life of the related asset. Upon
settlement of the liability, an entity either settles the obligation for its
recorded amount or incurs a gain or loss upon settlement. The standard is
effective for fiscal years beginning after June 15, 2002. The adoption of SFAS
143 on January 1, 2003 did not have a material effect on the Company's
consolidated results of operations or liquidity.

                                      F-11

**INFORMATION ARCHITECTS CORPORATION AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        DECEMBER 31, 2002, 2001 AND 2000**

In August 2001, the FASB issued SFAS No. 144, "Accounting for the Impairment or
Disposal of Long-Lived Assets." This statement addresses financial accounting
and reporting for the impairment or disposal of long-lived assets. This
Statement supersedes FASB No. 121, "Accounting for the Impairment of Long-Lived
Assets and for Long-Lived Assets to Be Disposed of" and the accounting and
reporting provisions of APB Opinion No. 30, "Reporting the results of Operations
- Reporting the Effects of Disposal of a Segment of a Business, and
Extraordinary, Unusual and Infrequently Occurring Events and Transactions." The
Company adopted SFAS No. 144 effective January 1, 2002. The adoption of SFAS 144
did not have a material impact on the Company's consolidated financial position
or results from operations.

Statement of Financial Accounting Standards No. 145, "Rescission of FASB
Statements No. 4, 44, and 64, Amendment of FASB Statement No. 13, and Technical
Corrections" ("SFAS 145") updates, clarifies, and simplifies existing accounting
pronouncements. SFAS No. 145 rescinds Statement 4, which required all gains and
losses from extinguishment of debt to be aggregated and, if material, classified
as an extraordinary item, net of related income tax effect. As a result, the
criteria in Opinion 30 will now be used to classify those gains and losses.
Statement 64 amended Statement 4, and is no longer necessary because Statement 4
has been rescinded. Statement 44 was issued to establish accounting requirements
for the effects of transition to the provisions of the motor Carrier Act of
1980. Because the transition has been completed, Statement 44 is no longer
necessary. SFAS 145 amends Statement 13 to require that certain lease
modifications that have economic effects similar to sale-leaseback transactions
be accounted for in the same manner as sale-leaseback transactions. This
amendment is consistent with FASB's goal requiring similar accounting treatment
for transactions that have similar economic effects. This statement is effective
for fiscal years beginning after May 15, 2002. The adoption of SFAS 145 on
January 1, 2002 did not have a material impact on the Company's consolidated
financial position, results of operations or liquidity.

Statement of Financial Accounting Standards No. 146, "Accounting for Exit or
Disposal Activities" ("SFAS 146") addresses the recognition, measurement, and
reporting of cost that are associated with exit and disposal activities that are
currently accounted for pursuant to the guidelines set forth in EITF 94-3,
"Liability Recognition for Certain Employee Termination Benefits and Other Costs
to exit an Activity (including Certain Cost Incurred in a Restructuring)," cost
related to terminating a contract that is not a capital lease and one-time
benefit arrangements received by employees who are involuntarily terminated -
nullifying the guidance under EITF 94-3. Under SFAS 146, the cost associated
with an exit or disposal activity is recognized in the periods in which it is
incurred rather than at the date the Company committed to the exit plan. This
statement is effective for exit or disposal activities initiated after December
31, 2002 with earlier application encouraged. The adoption of SFAS 146 did not
have a material impact on the Company's consolidated financial position, results
of operations or liquidity.

In December 2002, the FASB issued Statement of Financial Accounting Standards
No. 148, "Accounting for Stock-Based Compensation - Transition and Disclosure"
("SFAS 148"). SFAS 148 provides alternative methods of transition to SFAS 123's
fair value method of accounting for stock-based employee compensation. It also
amends the disclosure provisions of Statement 123 and APB Opinion No. 28,
Interim Financial Reporting, to require disclosure in the summary of significant
accounting policies of the effects of an entity's accounting with respect to
stock-based employee compensation on reported net income and earnings per share
in annual and interim financial statements. SFAS 148's amendment of the
transition and annual disclosure requirements of SFAS 123 are effective for
fiscal years ending after December 15, 2002. SFAS 148's amendment of the
disclosure requirements of Opinion 28 is effective for interim periods beginning
after December 15, 2002 and did not have a material impact on the Company's
consolidated financial position, results of operations or liquidity.

Reclassifications

Certain reclassifications were made in the 2001 and 2000 consolidated financial
statements in order to confirm with year 2002 presentation.

                                      F-12

**INFORMATION ARCHITECTS CORPORATION AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        DECEMBER 31, 2002, 2001 AND 2000****NOTE 2 - COMMITMENTS AND CONTINGENCIES:**Legal Matters

The Company is subject to legal proceedings and claims that arise in the
ordinary course of business. The Company currently believes that these matters
will not have a material adverse impact on the Company's financial position or
its results of operations. Furthermore, the Company has brought to a conclusion
its largest lawsuits, the Class Action lawsuit and the Gem Technologies, Inc.
lawsuit. (See Note 4)

Accrued expenses include $981,342 due to a law firm and $255,592 due to another
law firm; both fees due related to legal work on the GEM Technologies case (see
Note 4). These amounts are in dispute; however, the Company has conservatively
accrued such amounts.

**NOTE 3- SHAREHOLDERS' (DEFICIT) EQUITY**Convertible Preferred Stock

During 2000, the Company issued approximately 166,000 shares of preferred stock
for net proceeds of approximately $10,884,000 in connection with a private
placement. The preferred stock has a conversion feature of 0.67 shares of common
stock for each share of preferred stock. Pursuant to the reset calculation,
provided for by the private placement agreement, subsequently, an additional
58,000 shares of preferred stock were issued. In 2001 and 2000, 89,587 and
39,016 preferred shares were converted to common stock. In July 2002,
convertible preferred shareholders converted 20,000 shares of preferred stock to
13,333 shares of the common stock in accordance the conversion terms of the
preferred stock (See Common Stock below).

Preferred shares are entitled to vote their underlying common stock equal to
five-sevenths of the number of full shares of common stock into which such
shares of preferred stock could then be converted. Preferred shares are entitled
to receive dividends if the company declares dividends and are entitled to
receive the amount paid for their shares, plus all dividends, in preference to
common shareholders in the event the Company is acquired or sold.

Common Stock

On January 25, 2002, our shareholders approved an amendment to its Articles of
Incorporation effecting a one-for-five reverse split of the common stock and
equivalents to shareholders of record as of November 30, 2001. The effective
date for the one-for-five reverse stock split of the common stock and
equivalents was February 1, 2002. In April 2003, the Company announced a
one-for-three reverse stock split of the common stock and equivalents. All per
share data and numbers of common shares and equivalents have been retroactively
adjusted to reflect the latter stock split.

During 2000 through 2001, the Company issued common stock to raise cash, to
convert debt to equity, to settle lawsuits, to pay for services and to acquire
assets.

A $5,000,000 convertible debenture was satisfied with the issuance of
approximately 66,667 (valued at approximately $1,940,000) shares of common stock
in 2000.

During 2001, and 2000, the Company issued 20,000, and 667 shares of common stock
in connection with legal settlements, respectively.

The Company issued 0 and 1,533 shares of common stock to pay for services
rendered in 2001, and 2000, respectively.

                                      F-13

**INFORMATION ARCHITECTS CORPORATION AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        DECEMBER 31, 2002, 2001 AND 2000**

On January 10, 2002, the Company sold under the terms of the Employee Stock
Purchase Plan 1,540 shares aggregating proceeds of $4,574 or $2.97 per share.

On May 22, 2002, the Company issued 25,000 shares of its common stock to a
consultant for services rendered. These shares were valued at $55,500 or $2.22
per share based on the quoted trading price of the common shares on the date of
grant.

In July 2002, convertible preferred shareholders converted 20,000 shares of
preferred stock for 13,333 shares of the common stock in accordance the
conversion terms of the preferred stock (See Convertible Preferred Stock above).

In July 2002, the Company issued 16,666 shares of its common stock to a
consultant for services rendered. These shares were valued at $20,000 or $1.20
per share based on the quoted trading price of the common shares on the date of
grant.

In August 2002, the Company sold 166,667 shares of its common stock to a related
party for proceeds of $100,000 or $0.60 per share.

In August 2002, the Company converted a $100,000 loan payable into 166,667
shares of its common stock at a conversion price of $0.60 per share.

On September 3, 2002, the Company issued 46,667 shares of its common stock to
employees for services rendered. These shares were valued at $24,500 or $0.525
per share based on the quoted trading price of the common shares on the date of
grant.

On December 12, 2002, the Company granted 1,483,000 common shares to former
officers and directors of the Company for services rendered. These shares were
valued at $222,450 or $0.15 per share based on the quoted trading price of the
common shares on the date of grant.

On December 12, 2002, the Company issued 5,000,000 shares of its common stock
for services rendered. These shares were valued at $750,000 or $0.15 per share
or the fair value on the date of the grant. These shares had not been issued as
of December 31, 2002 and were presented as issuable.

Stock Options and WarrantsStock option plan

The Company has a stock option plan to benefit salaried employees. Under this
plan (as amended), the Company may issue stock and/or stock options, to a
maximum of 10 percent of the authorized shares, through the year 2004. The
options become exercisable at various periods of time from thirty days to two
years from the date of grant. Options currently expire no later than 10 years
from the grant date.

On January 25, 2002, the Company's shareholders voted to approve an amendment to
the stock option plan to increase the number of shares of common stock that may
be issued under the plan from 800,000 to 4,000,000 shares after giving effect to
the one-for-five reverse split. This amendment was effective February 1, 2002.
The plan has not yet been amended for the most recent one-for-three reverse
split.
                                      F-14

**INFORMATION ARCHITECTS CORPORATION AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        DECEMBER 31, 2002, 2001 AND 2000**

A summary of the options issued under the plan as of December 31, 2002, 2001 and
2000 and changes during the years is presented below:

                                                                       Weighted Average
                                                  Number of Shares      Exercise Price
                                                 -----------------    ------------------
Outstanding, December 31, 1999                            142,995                $52.05
Granted                                                    35,799                $89.55
Exercised                                                (28,857)                $71.70
Canceled and expired                                     (22,723)                $94.80
                                                 -----------------    ==================
Outstanding, December 31, 2000                            127,214                $46.65
Granted                                                    40,467                $20.70
Exercised                                                 (6,532)                $18.30
Canceled and expired                                     (13,772)                $72.90
                                                 -----------------    ==================
Outstanding December 31, 2001                             147,377                $34.65
Granted                                                   533,333                 $1.17
Exercised                                                       -                     -
Canceled and expired                                    (671,753)                 $8.28
                                                 -----------------    ==================
Outstanding December 31, 2002                               8,957                $86.25
                                                 =================    ==================

Options exercisable at:
December 31, 2001                                         116,382                $40.50
December 31, 2002                                           8,957                $86.25

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

                                   Outstanding and Exercisable Options
                              -----------------------------------------------
                                                                  Weighted
                 Range of                        Remaining        Average
              Exercise Price    Number of       Contractual       Exercise
                                Shares              Life            Price
             --------------   --------------    --------------  --------------
               $  86.25               2,133             1.64      $  86.25
                  86.25               6,824             0.13         86.25
                              --------------                    ==============
                                      8,957                       $  86.25
                              ==============                    ==============

Common stock warrants

A summary of warrants issued to employees and non-employees and changes during
2002 is presented below:

                                                  Number of Shares     Weighted Average
                                                                       Exercise Price
                                                 -----------------    ------------------
Outstanding December 31, 2001                              59,471                $26.10
Granted                                                   704,000                 $0.87
Exercised                                                      -                     -
Canceled and expired                                           -                     -
                                                 -----------------    ==================
Outstanding December 31, 2002                             763,471                 $2.82
                                                 =================    ==================

Options exercisable at:
December 31, 2001                                          59,471                $26.10
December 31, 2002                                         763,471                 $2.82

                                      F-15

**INFORMATION ARCHITECTS CORPORATION AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        DECEMBER 31, 2002, 2001 AND 2000**

The following table summarizes information about warrants outstanding at
December 31, 2002:

                                   Outstanding and Exercisable Warrants
                              -----------------------------------------------
                                                                   Weighted
                                                   Remaining       Average
                 Range of         Number of      Contractual       Exercise
              Exercise Price     Shares             Life            Price
               -------------- --------------    -------------- --------------
              $    0.60             583,333             4.62      $  0.60
                   1.23              33,333             4.56         1.23
                   1.14              14,000             4.52         1.14
                   2.73              50,000             4.38         2.73
                   2.73              23,333             4.15         2.73
                  19.95               4,667             3.62        19.95
                  29.31              45,239             2.44        29.31
              24.45 - 67.50           3,696             1.92        38.28
                  15.90               2,500             1.82        15.90
                  30.00               1,000             1.43        30.00
                  32.40               2,000             1.18        32.40
                  118.20                370             0.49       118.20
                              --------------                   ==============
                                    763,471                       $   2.82
                              ==============                   ==============

Preferred stock warrants

As of December 31, 2002, the Company had 16,572 preferred stock warrants
outstanding. These warrants allow the holder to purchase preferred stock from
the Company at $70 per share. The warrants expire in 2005.

Employee stock purchase plan

The Company has an employee stock purchase plan to provide eligible employees
with the opportunity to purchase shares of its common stock through payroll
deductions. Participants of the plan purchase shares of the Company's common
stock at six-month intervals at 85 percent of the lower of the fair market value
on the first or last day of each six-month period. The fair market value of
shares that may be purchased by any participant during any calendar year may not
exceed $25,000. On January 25, 2002, the Company's shareholders voted to approve
an amendment to the employee stock purchase plan to increase the number of
shares available for purchase under such plan from 40,000 to 200,000 shares
after giving effect to the one-for-five reverse split. The plan has not yet been
amended for the most recent one-for-three reverse split. Of the 191,625 shares
authorized to be issued under the Purchase Plan, 200,000 shares remained
available for issuance as of December 31, 2002. During 2002, 2001 and 2000,
employees purchased 1,540, 3,910 and 2,925 shares for approximately $4,600,
$73,000 and $122,000, respectively.

Pro forma information

The Company has elected to follow Accounting Principles Board Opinion No. 25,
"Accounting for Stock Issued to Employees," and related interpretations in
accounting for its employee stock options. Under APB No. 25, because the
exercise price of the company's employee stock options equals the market price
of the underlying stock on the date of grant, no compensation expense is
recognized in the Company's financial statements.

                                      F-16

**INFORMATION ARCHITECTS CORPORATION AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        DECEMBER 31, 2002, 2001 AND 2000**

An alternative method of accounting for stock options is SFAS No. 123,
"Accounting for Stock-Based Compensation." Under SFAS No. 123, employee stock
options are valued at the grant date using an option valuation model. This value
represents compensation expense under SFAS No. 123 and is recognized ratably
over the vesting period. The fair value of options granted in 2002, 2001 and
2000 reported below was estimated at the date of grant using the Black-Scholes
option-pricing model with the following weighted average assumptions:

                                                YEARS ENDED DECEMBER 31,
                                      2002             2001           2000
                                    ---------       ---------       ---------
Dividend yield                        -                -              -
Expected volatility                   147%             152%           195%
Risk free interest rate               4.03%            5%             4.5%
Expected lives                        0.5 - 5 Years    3 Years        1.74 Years

The weighted average Black-Scholes value of options granted under the stock
options granted during 2002 and 2001 was $0.39 and $6.75, respectively.

Had compensation cost for the Company's options and warrants granted to
employees been determined using the fair value method of SFAS 123, the Company's
net loss for the periods indicated would have been charged to the pro forma
amounts as follows:

                                                      Years ended December 31,
                                               2002             2001             2000
                                          -------------     -------------     -------------
Net loss, as reported                     $  (7,747,189)    $ (12,834,009)    $ (12,440,382)

Add: Stock-based employee compensation
expense included in net income, net of
related tax effects                                  -                 -                 -

Deduct: Total stock-based employee
compensation expense determined under
fair value based method, net of
related tax effects                            (905,124)       (1,453,242)       (1,218,000)
                                          -------------     -------------     -------------
Pro forma net loss                        $  (8,652,313)    $ (14,287,251)    $ (13,658,382)
                                          =============     =============     =============
Earnings per share:
Basic and diluted - as reported           $       (2.89)    $       (6.01)    $       (6.28)
                                          =============     =============     =============
Basic and diluted -pro forma              $       (3.22)    $       (6.69)    $       (6.90)
                                          =============     =============     =============

**NOTE 4 - SETTLEMENTS**Operating Lease

In 1998, the Company entered into an operating lease agreement with a lessor (an
LLC) which was partially owned by the Company's president and majority
shareholder. On December 20, 2002, the Company entered into an agreement (the
"Assignment Agreement") with the lessor. In return for the president assigning
his membership interest in LLC lessor to the other LLC members, the Company was
released from all it current and future obligations under the operating lease.
During the second quarter, the Company accrued all remaining lease payments due
under the operating lease and recorded additional rent expense of $3,750,000. On
December 20, 2002, in connection with Assignment Agreement, the Company reversed
all liabilities related to the lease and recorded settlement income of
$3,053,491. Rent expense under leases approximated $4,574,000 (includes
additional rent of $3,750,000 discussed above), $1,879,000 and $1,791,000 in
2002, 2001 and 2000, respectively.

Class Action Lawsuit Dismissal

The Company has previously reported a class action lawsuit filed against the
Company, current and former officers and directors, in the United States
District Court for the Western District of North Carolina. In February 2002, the
lawsuit was dismissed.

                                      F-17

**INFORMATION ARCHITECTS CORPORATION AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        DECEMBER 31, 2002, 2001 AND 2000**GEM Technologies Lawsuit Settlement

The Company has previously reported a lawsuit that was filed against the Company
in 1996. The lawsuit involved claims by plaintiffs that they were fraudulently
induced to invest in GEM Technologies, Inc. ("GEM"), an unrelated company, and
to forego their conversion rights, that GEM wrongly transferred assets to a
predecessor company of the Company and that they were entitled to an 8.72%
interest in GEM, and as such, in iA. The case was tried, and the Court ruled
that iA was unrelated to GEM and ruled against Robert F. Gruder on two counts.
Plaintiffs were awarded a judgment of $175,000, plus interest and attorneys'
fees and expenses. The plaintiffs appealed on the basis that the court denied
their claim to convert the notes into iA stock and Mr. Gruder cross-appealed
from the relief awarded against him. In addition, the Plaintiffs initiated a
lawsuit in the GEM bankruptcy court.

During the second quarter of 2001, a settlement agreement was reached. The terms
of this settlement were carried out in the third quarter of 2001. The Company's
Board of Directors determined that because the Company was responsible for all
costs associated with the suit and because the litigation was so disruptive to
the Company as well as a distraction to Management, that rather than prolonging
the lawsuit, it was in the best interest of the Company to settle. During the
third quarter, iA delivered 18,333 shares of our common stock to the selling
stockholder and Mr. Gruder delivered 22,333 shares of our common stock to the
selling stockholder and Mr. Gruder delivered a non-negotiable promissory note in
the amount of $600,000 to the selling stockholder. In addition, Mr. Gruder paid
$1,150,000 comprised of $750,000 that Mr. Gruder had previously given over and
$400,000 upon the settlement agreement. Mr. Gruder also deposited 33,333 shares
of iA common stock to be held in escrow as security for that note. In connection
with the settlement, the selling stockholder released the Company, Mr. Gruder,
and Mr. Dudchik from liability under the litigation and dismissed his claims
against us, Mr. Gruder and Mr. Dudchik. In addition, iA's offer to participate
in the Settlement Agreement served as an inducement to Mr. Gruder to enter into
the Settlement Agreement and to absorb the majority of the financial burden of
the settlement.

**NOTE 5 - SUPPLEMENTARY CASH FLOW INFORMATION**

In addition to the cash flow information discussed in the Shareholders'
(Deficit) Equity note and the Consolidated Statements of Cash Flow, the Company
transacted other business requiring cash flow disclosure.

During fiscal 2002, the Company issued 166,667 shares of common stock for debt
of $100,000.

During fiscal 2001, all transactions requiring disclosure have been discussed in
the Shareholders' Equity note, the Commitments and Contingencies - Litigation
note, and the Consolidated Statements of Cash Flow.

During fiscal 2000, the Company received software (with a fair value of $74,000)
in connection with the sale of computer software. Additionally, the Company
issued options to purchase 1,167 shares of common stock in connection with
severance packages. The fair value of the options was approximately $121,000.

                                       18
**NOTE 6 - INCOME TAXES**

There was no income tax expense for the years ended December 31, 2002, 2001 and
2000 due to the Company's net losses.

                **INFORMATION ARCHITECTS CORPORATION AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        DECEMBER 31, 2002, 2001 AND 2000**

The Company's tax expense differs from the "expected" tax expense for the year
ended December 31, 2002 (computed by applying the Federal Corporate tax rate of
40% to loss before taxes), as follows:

                                                             2002
                                                         --------------
Computed "expected" tax expense (benefit)                $  (3,099,000)
State income taxes                                            (390,000)
Permanent differences                                           496,000
Re-characterization of prior year temporary
differences                                                   (857,000)
Change in valuation allowance                                 3,850,000
                                                         --------------
                                                         $        -
                                                         ==============

The effects of temporary differences that gave rise to significant portions of
deferred tax assets and liabilities at December 31, 2002 and 2001 are as
follows:

                                                 Years Ended December 31,
                                     ---------------------------------------------
                                         2002             2001            2000
                                     ------------    ------------     ------------
Net operating loss carryforward      $ 24,603,000    $ 22,000,000     $ 18,430,000
Revenue in excess of billing                   -               -           (35,000)
Investment in subsidiary                       -       (1,002,000)      (1,002,000)
Depreciation  method of property
and equipment                                  -         (245,000)        (150,000)
Other                                          -               -            44,000
Valuation allowance                   (24,603,000)    (20,753,000)     (15,487,000)
                                     ------------    ------------     ------------
Net deferred tax assets              $         -     $         -      $  1,800,000
                                     ============    ============     ============

The valuation allowance at December 31, 2001 was $20,753,000. The net change in
valuation allowance during the year ended December 31, 2002 was an increase of
$3,850,000.

As of December 31, 2002, the Company had net operating loss carryforwards
("NOLs") of approximately $61,000,000 available through December 31, 2023 to
offset future taxable income. However, under Section 382 of the Internal Revenue
Code, a greater than 50 percent change in ownership, as defined, restricts the
annual utilization of available NOLs to a prescribed amount. Accordingly, future
utilization of the NOLs may be limited (see Note 1).

**NOTE 7 - RELATED PARTY TRANSACTIONS**

A prior period loan in the amount of $9,944 made to an officer was repaid full
in 2002.

During the second quarter of 2002, a loan in the amount of $110,000 was made to
an officer and principal shareholder of the Company, and a $10,000 loan was made
to another officer. The loans were repaid in full with interest during the third
quarter of 2002.

In 1998, the Company entered into an operating lease agreement with a lessor (an
LLC) which was partially owned by the Company's president and majority
shareholder. On December 20, 2002, the Company entered into an agreement (the
"Assignment Agreement") with the lessor. In return for the president assigning
his membership interest in LLC lessor to the other LLC members, the Company was
released from all it current and future obligations under the operating lease
(see Note 4).

At December 31, 2002, 5,000,000 shares of common stock are issuable to Lewco
Corporation. The key officer of Lewco Corporation is an immediate family member
of a consultant affiliated with the Company.

                                      F-19

**INFORMATION ARCHITECTS CORPORATION AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        DECEMBER 31, 2002, 2001 AND 2000****NOTE 8 - QUARTERLY INFORMATION (UNAUDITED)**

                                              Year Ended December 31, 2002
                                                                                    Total at
                                                                                   December 31,
                        Quarter 1       Quarter 2     Quarter 3      Quarter 4        2002
                       ------------   ------------   ------------   ------------   ------------

Revenues               $     15,373   $     32,472   $      7,672   $      7,608   $     63,125

Net Income (Loss)      $ (1,397,309)  $ (6,903,908)  $ (1,160,193)  $  1,714,221   $ (7,747,189)

Net Income (Loss) Per
Share-Basic and
Diluted                $      (0.65)  $      (3.18)  $      (0.49)  $       0.42   $      (2.89)

An adjustment to the third quarter net loss in the amount of $1,660 was captured
in the fourth quarter net loss figure above.

**NOTE 9 - SUBSEQUENT EVENTS**Status of Merger with Perceptre

On December 13, 2002, the Company entered into a share exchange agreement with
Perceptre and reported this transaction in a Form 8-K on December 16, 2002. On
May 5, 2003, the Company filed an 8-K stating that the transaction did not
occur. The agreement is currently being renegotiated.

Stock Split

In April 2003, the Company announced a one-for-three reverse stock split of the
common stock and equivalents. All per share data and numbers of common shares
and equivalents have been retroactively adjusted to reflect the reverse stock
split.

Lease Agreement

On January 31, 2003, the Company entered into a two-year lease agreement for
building space. The annual rental payments for the first and second years are
approximately $19,200 and $19,800, respectively.

Common Stock 

On April 22, 2003, the Company issued certificates for the 5,000,000 common
stock issuable at December 31, 2002 which it is holding until the final closing
of the anticipated transaction with Perceptre.

On April 22, 2003, the Company issued certificates for 3,095,000 shares of
common stock which it is holding in anticipation of receiving executed
subscription agreements contemporaneously and contingent upon the final closing
of the anticipated transaction with Perceptre.

                                      F-20
```