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**UNITED STATESSECURITIES AND EXCHANGE COMMISSION** Washington, D.C. 20549

FORM 10-KSB

x   ANNUAL
  REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE 
  SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended - June 30, 2003 OR

** ̈******TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 
  For the transition period from _______________ to _______________________

Commission file number 000-27259

REWARD ENTERPRISES, INC.
  
  (Exact name of registrant as specified in its charter)

|NEVADA                                           | 98-0203927                   
|------------------------------------------------ | -----------------------------
|(State or other jurisdiction of incorporation or | (Employer Identification No.)
|organization)                                    |                              

1327 Ocean Avenue, 
  Suite M Santa Monica, California 90401
  (Address of principal executive offices, including zip code.)

(310) 395-5374 
  (Issuer's telephone number, including area code)

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

Securities registered pursuant to Section 12(g) of the Act:
  Common Stock,$0.001 par value

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Check whether the issuer (1) filed all reports required to
  be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months
  (or for such shorter period that the Registrant was required to file such reports),
  and (2) has been subject to such filing requirements for the past 90 days. 
  YES x NO ** ̈******

Check if no disclosure of delinquent filers pursuant to Item
  405 of Regulation S-B is contained herein, and no disclosure will be contained,
  to the best of Registrant's knowledge, in definitive proxy or information statements
  incorporated by reference in Part III of this Form 10-KSB or any amendment to
  this Form 10-KSB. x

State Issuer's revenues for its most recent fiscal year. June 30, 2003 - $-0-.

The aggregate market value of the common stock held by non-affiliates
  on June 30, 2003 $104,770. There are approximately 10,477,000shares
  of common voting stock of the Registrant held by non-affiliates.

State the number of shares outstanding of each of the Issuer's
  classes of common equity, as of the latest practicable date:November 30,
  2003  18,722,000shares of Common Stock

Documents Incorporated by Reference None

Transitional Small Business Disclosure Format     YES
  ** ̈******
  NO x

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NOTE REGARDING FORWARD LOOKING STATEMENTS

Except
  for statements of historical fact, certain information contained herein constitutes
  "forward-looking statements," including without limitation statements containing
  the words "believes," "anticipates," "intends," "expects" and words of similar
  import, as well as all projections of future results. Such forward-looking statements
  involve known and unknown risks, uncertainties and other factors which may cause
  the actual results or achievements of the Company to be materially different
  from any future results or achievements of the Company expressed or implied
  by such forward-looking statements. Such factors include, but are not limited
  to the following: the Company's lack of an operating history, the Company's
  lack of revenues and unpredictability of future revenues; the Company's future
  capital requirements to develop our operating systems, telecommunications facilities,
  and administrative support systems; intense competition from established competitors
  with greater resources; the Company's reliance on internally developed systems
  and system development risks; the risks of system failure; the Company's dependence
  on the Internet and continued growth of online communications and commerce;
  the uncertainty of participating in developing a market; the risks associated
  with rapidly changing technology; intellectual property risks; the risks associated
  with governmental regulations and legal uncertainties; and the other risks and
  uncertainties described under "Description of Business - Risk Factors" in this
  Form 10-KSB. Certain of the forward looking statements contained in this annual
  report are identified with cross-references to this section and/or to specific
  risks identified under "Description of Business - Risk Factors".

PART 1

ITEM 1.        DESCRIPTION
  OF BUSINESS.

History

Reward
  Enterprises Inc. (the Company) was incorporated under the laws of
  the State of Nevada on December 12, 1997, as Sports Entertainment Productions,
  Inc. to engage in the business of Internet entertainment including gaming. In
  July 1998, the Company changed its name to Reward Enterprises Inc.

On
  August 15, 2001, the Company discontinued its plan of operating a virtual casino
  website as a result of the shareholder approval of the acquisition of Q Presents
  Inc. a private California based company which intended to provide localized
  and web based custom event registration and automation solutions targeting the
  hotel and conference segment of the Event Automation industry. The Companys
  definitive proxy statement filed with the SEC on August 8, 2001 and its Form
  8-K filed with the SEC on August 20, 2001 are incorporated herein by reference

New
  management has recently entered into the specialized international communications
  market to provide international voice, Internet access and global network services
  to corporate clients, communication carriers and Internet service providers.
  The Company will utilize the web based platform that was originally intended
  as an event registration and automation solution for its telecommunication business.

The
  information set forth below contains the Companys plan of operations on
  June 30, 2003. Reward Enterprises, Inc. maintains and administrative office
  at 1327 Ocean, Suite M, Santa Monica, California 90401.

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Operations

The
  Company is a start-up business and has not commenced operations as of the date
  hereof other than an undertaking of a market analysis and discussions in the
  development of strategic relationships in telecommunications. As such, the following
  reflects the Companys proposed plan of operation. There is no assurance
  however, that the Company will ultimately be able to implement its plan of International
  Telecommunications.

International Communications

The
  Companys goal is to become a U.S. based International Telecommunications
  Company, offering a broad range of integrated and competitively priced traditional
  long distance telephone, Internet access service, and world wide network services.
  We plan to function as Network solution providers to various large international
  carriers in order for them to be more effective in terminating and originating
  traffic from various countries around the world. We will also work with new
  nation-wide Internet Service Providers (ISPs) in order that they look at various
  enhanced services business opportunities to build robust revenue
  streams. Thus the Company will be an organization that applies technology solutions
  on a Global basis to create successful commercial ventures for clients
  and partners.

In
  order to stimulate new minutes we will, after developing business relationship
  with overseas carriers, attempt to work out settlement rates that are most favorable
  to each partner and will help generate significant amount of new traffic. The
  settlement rate for each partner is not necessarily identical and varies with
  the opportunity value presented. If for example, Reward obtains a very aggressive
  rate to terminate traffic in Antigua and re-file to other countries from there
  we can offer much lower rates to the customers  native and transient -
  to terminate traffic to the USA. This is in addition to the major European and
  other destinations that have good quality fiber connectivities.

The
  goal of Reward is to provide attractive services to various countries and accelerate
  growth through proper licensed agreements, in order to lower their
  costs, maintain a high quality of service, and to establish new, profitable
  and stable international routes. While our interests expand beyond the above,
  we think that this strategy is a good starting point to begin our potential
  interconnection with major carriers in the world.

The
  following is a list of requests when seeking a license within a foreign country:

1) 
  Provide both inbound and outbound telecommunications traffic to and from the
  country. 
                 2) 
  Provide Internet services (ISP) both internationally and within country 
                 3) 
  Provide telecommunications traffic and/or services within country 
                 4) 
  Operate (transmit and receive satellite signals) 
                 5) 
  Operate (transmit and receive microwave-line-of-sight signals) 
                 6) 
  Deploy and operate a wireless local loop platform within country 
                 7) 
  Function as a throughway (possibly a Zone Free) for telecommunications services
  in transit 
                 8) 
  Conduct commerce under all of the aforementioned approvals.

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The
  creation of such a hub could be done very easily by installing a
  large bandwidth IP back-bone structure (through either a satellite or fiber
  connection) and terminating hardware (Gateways, Routers etc.). Once the proper
  authority is granted, creation of this facility is an easy and quick task. This
  opens the ability to provide basic and enhanced services
  to the users  both commercial and residential  at very attractive
  rates. In addition, the hub will position the country as a leading
  infrastructure and access provider. In addition to the significant new revenues
  that accrue to the in country license partners, Rewards development
  can help the country to develop as an international telecommunications hub with
  significant job creation potential. Acting as a stimulus for additional investment
  in the Information Technology sector, we can be the catalyst for
  further economic development in the country.

We
  would thus be in a position of generating significant additional traffic volumes
  to provide a better fill on the transmission routes and increase
  the utilization of the switching platforms that could be deployed in country.
  Operating with a smaller overhead and margins we could offer a more attractive
  rate to our partners and also significantly enhance the economic infrastructure
  in a country by providing a new traffic hub operation for the region
  there.

The Market

Our
  goal is to develop business relationships in emerging markets which will enable
  us to sell voice, Internet access and private lines to corporations, Internet
  Service Providers (ISPs) and carriers in that country.

Through these network of relationships we will enter into
  our target markets by obtaining a re-filing agreement with a major carrier,
  a communications operating license, or forming a partnership with a licensed
  carrier to operate within a country. Our goal is to bring voice, data and/or
  Internet traffic into or out of the country by selling such services to other
  international carriers and businesses.

Many countries are granting Voice over Internet Protocol (VoIP)
  licenses to allow voice traffic in and out of the country. We will be aggressively
  pursuing these licenses.

Upon establishing an operating network to an international
  destination, our goal will be to utilize this network to deliver Internet connectivity,
  international private lines to businesses and/or government and educational
  institutions, web development and hosting and other enhanced communication services.
  These services will be sold through either an existing international licensed
  carrier or through the development of our own in-country operation. Upon obtaining
  a license in a specific country, we may either set up our own in-country operation
  or establish an in country partner to market our suite of services to carriers,
  ISPs, and other institutions.

Management will carefully evaluate each potential international
  opportunity and determine which of the aforementioned scenarios is most appropriate,
  where we can enter a country, begin to generate revenue, gaining a foothold
  to provide more advanced telecommunication services.

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Developing countries and the businesses within them are being
  forced to relearn how to conduct themselves in the new Internet economy. Cost-effective
  and high quality voice telephone, fax, Internet, and electronic commerce services
  are a necessity for any country that wishes to participate in the Global Economy.
  For the growth of the Internet and the true globalization of the electronic
  economy to continue, developing countries must become larger participants.

Many countries have lagged behind the United States in becoming
  wired. The reasons include:

- National telephone company monopolies, allowing sparse
      competition. This has stimulated little innovation, allowed prices to remain
      artificially high, and not stimulated construction of enhanced or alternative
      physical infrastructures.
- Limitation on alternative international long distance
      carriers has constrained competition and provided little incentive for competitors
      to build facilities into the country. A major challenge inhibiting this
      growth is the regulatory environment in each country. The opening of communications
      markets that were previously restricted is essential for the expansion of
      the global information economy.

Emerging markets, driven by the need to catch up in the wired
  technological world or new global economy, represent considerable demand for
  enhanced voice, data, and Internet services. This includes network connectivity,
  Web development and hosting, and network security services.

It is often cheaper to use a leased line Internet connection
  to the United States to route traffic to other countries than to have a direct
  connection to those countries.

Faster and better connectivity, more reliable voice quality,
  improved Web site performance, and acceptable levels of network security risk
  are all critical to businesses everywhere. Introduction of these services by
  a single vendor into emerging markets represents a huge potential market.

Our Services

Our
  goal is to deliver international voice, Internet access, and private line services.
  By utilizing cutting edge network infrastructure and technologies, assembled
  and deployed by either by us or our in country partners, we plan on capitalizing
  on opportunities to introduce selected products and services into emerging market
  countries or regions throughout the world.

International Voice
  Our goal is to deliver international voice communications traffic via relationships
  with carrier networks worldwide. We will offer traditional as well as Voice
  over Internet Protocol (VoIP) voice communications capabilities.

International Internet Access
  Our goal is to offer Internet Access targeted at Internet Service Providers
  (ISPs), communication carriers and corporations seeking Internet connectivity
  in emerging countries. We will, where necessary create

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Internet POPs (Points of Presence) in each of our target countries.
  These POPs will include the physical infrastructure (routers, servers, local
  area networks, and external network access) to allow businesses and local Internet
  Service Providers (ISPs) to connect to a network.

International Private Line Services 
  We will offer International Point-to-Point Private Line Services between the
  United States and our target countries. Our goal is to develop a Virtual Private
  Network (VPN) connectivity for those customers. These services will be utilized
  by our customers for voice, data, and Internet services.

Competition

The
  communications industry is highly competitive, rapidly evolving, subject to
  constant technological change. We believe that the traditional distinctions
  between local, long distance, data transmission and Internet access markets
  are disappearing.

Our competition is as follows:

Our
  competitors in the international long distance market include large, facilities-based
  multinational carriers, foreign PTTs, small facilities-based providers in the
  United States, and various alliances among communications companies.

International
  long distance providers compete on the basis of price, transmission quality,
  reputation and breadth of service offerings. The United States-based international
  communications services market is dominated by AT&T, Sprint and MCI WorldCom.

Additional
  competition may come from carriers using VoIP and other data networks to provide
  services. This technology can be used to provide both voice and data services
  at significantly lower costs than circuit-switched long distance.

We
  believe it will become competitive with business oriented Internet providers,
  including UUNET/Worldcom, PSInet, Level 3, Qwest, Genuity (formerly GTE Internetworking),
  and others, all of whom have greater resources than us.

Companys Office

The
  Companys administrative headquarters are located 1327 Ocean Avenue Suite
  M Santa Monica, California 90401 and its telephone number (310) 395-5374.

Employees

The
  Company is a development stage company and currently has no employees other
  than its Officers and Directors. The Company intends to hire additional employees
  as needed.

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Risk Factors

|1. | Company Has No History of Earnings.The Company has no operating history and is subject to all of the
        risks inherent in a developing business enterprise including lack of cash
        flow and service acceptance. There can be no assurance that any of our
        business strategies will be successful or that we will ever achieve profitability.
        We have incurred operating losses since our inception and expect to incur
        operating losses for the foreseeable future. These factors, among others,
        raise substantial doubts about our ability to continue as a going concern,
        unless we raise sufficient capital as contemplated herein.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|2. | Development and Market Acceptance
        of Services.The Companys success and growth will depend upon
        its ability to market its services. The Companys success will depend
        in part upon the markets acceptance of, and the Companys ability
        to deliver and support its telecommunication services.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|3. | Liquidity; Need for Additional Financing.The Company believes that it does not have the cash it needs for at
        least the next twelve months based upon its internally prepared budget.
        Further, the Companys cash requirements are not easily predictable
        and there is a possibility that its budget estimates will prove to be
        inaccurate. If the Company is unable to generate a positive cash flow,
        it will be required to substantially curtail operations and seek additional
        capital. There is no assurance that the Company will be able to obtain
        additional capital if required, or if capital is available, to obtain
        it on terms favourable to the Company. The Company may suffer from a lack
        of liquidity in the future which could impair its short-term marketing
        and sales efforts and adversely affect its results of operations. Our
        ability to meet our projected growth may require additional cash resources.
        Failure to obtain future financing, or if vendor financing or additional
        equity financing is not available when needed or on acceptable terms,
        could cause us to delay, scale back or abandon our plans and could materially
        adversely affect our ability to compete. We cannot assure you that any
        financing arrangements will be available or, if available, that it will
        be on acceptable terms.
|4. | Our revised business model is still
        under development.We recently shifted our business plan towards focusing
        on specific international telecommunication opportunities. Moreover, our
        business plan is still under development.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|5. | The success of the business plan
        is dependent upon market developments and traffic patterns. The development
        of our network will entail substantial costs and prior planning, including
        the purchase of additional equipment, which are based in part on our expectations
        concerning future revenue growth and market developments. As we expand
        our network, the cost of services will increasingly consist of fixed costs
        arising from the ownership and maintenance of equipment. As a result,
        cost increases and a resulting decrease in any future profits may occur.
        If traffic volume were to decrease, or fail to increase to the extent
        expected or necessary to make efficient use of our network, our costs
        as a percentage of revenues would increase significantly which would have
        a material adverse effect on our financial condition and results of operations.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|6. | We may be unable to adapt to rapid
        technological change. The communications industry has been, and is
        likely to continue to be, subject to rapid and significant changes in
        technology. Our success will depend, in significant part, on our ability
        to make timely and cost-effective enhancements and additions to our technology,
        as well as our ability to introduce new services that meet client demand.
        We expect new products and services, and enhancements to existing                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             

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|   | products and services, to be developed
        and introduced to compete with our existing services. The proliferation
        of new communications technology, including personal communication services
        and voice communication over the Internet, may reduce demand for certain
        of our existing services. We cannot assure you that we will be successful
        in developing and marketing new services or enhancements that respond
        to these or other technological changes or evolving industry standards.
        In addition, we may experience difficulties that could delay or prevent
        the successful development, introduction and marketing of our services,
        which may result in our services not achieving market acceptance. Our
        financial condition could be adversely affected if we are unable to develop,
        or experience delays in the introduction of, new services or enhancements
        or if such services or enhancements fail to achieve market acceptance.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|7. | If the Internet does not continue
        to grow as a medium for voice and fax communications, our business will
        suffer. The technology that allows voice and fax communications over
        the Internet, and the delivery of other value-added services, is still
        in its early stages of development. Historically, the sound quality of
        calls placed over the Internet has been poor. As the Internet telephony
        industry has grown, sound quality has improved, but the technology requires
        further refinement. Additionally, as a result of the Internets capacity
        constraints, callers could experience delays, errors in transmissions
        or other interruptions in service. Transmitting telephone calls over the
        Internet must also be accepted as an alternative to traditional voice
        and fax service by communications service providers. Because the Internet
        telephony market is new and evolving, predicting the size of this market
        and its growth rate is difficult. If our market fails to develop, then
        we will be unable to grow our client base and our results of operations
        will be adversely affected.                                                                                                                                                                                                                                                                                                                                                                                                                   
|8. | The communications services industry
        is highly competitive and we may be unable to compete effectively.
        The communications industry, including Internet and advanced data services,
        is highly competitive, rapidly evolving and subject to constant technological
        change and intense marketing by providers of functionally similar services.
        Since there are few, if any, substantial barriers to entry, we expect
        that new competitors are likely to join existing competitors in the communications
        industry, including the market for international long distance voice,
        Internet and data services targeted by us. Although licenses for telecommunications
        or Internet services granted in foreign countries may provide barriers
        to entry in some instances, we still face competition. Many of our current
        competitors are significantly larger and have substantially greater market
        presence as well as greater financial, technical, operational, marketing
        and other resources and experience than we do. We believe that competition
        will continue to increase, placing downward pressure on prices. Such pressure
        could adversely affect our gross margins if we are not able to reduce
        our costs commensurate with such price reductions. In addition, the pace
        of technological change makes it impossible for us to predict whether
        we will face new competitors using different technologies to provide the
        same or similar services offered or proposed to be offered by us.
|9. | Industry consolidation could make
        it more difficult to compete. Companies offering Internet, data and
        communications services are increasingly consolidating. As a company with
        a limited operating history, we may not be able to compete successfully
        with businesses that have combined, or will combine, to produce companies
        with substantially greater financial, sales and marketing resources, larger
        client bases, extended networks and infrastructures and more established
        relationships with vendors, distributors and partners than we have. In
        addition, this consolidation trend could prevent or hinder our ability
        to further grow our operations through                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    

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|    | acquisitions. With these heightened
        competitive pressures, there is a significant risk that the value of our
        common stock will decline.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
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|10. | Our ability to provide services is
        often dependent on other service providers and our suppliers.Interconnectivity. In order for our network to be functional,
        we must enter into agreements with local exchange carriers and other carriers
        covering each market in which we intend to offer local service. Although
        we plan to enter into interconnection agreements in a number of jurisdictions,
        we cannot guarantee that we will successfully negotiate those agreements
        or negotiate new agreements in new markets. The failure to secure and
        maintain these agreements could have a material adverse effect on our
        ability to implement our business plan.Transmission Facilities. A portion of the telephone calls
        made by our clients are connected through transmission lines of facilities-based
        long distance carriers which provide us with transmission capacity through
        a variety of resale arrangements. Because digital undersea fiber optic
        cables and communications satellites typically take several years to plan
        and construct, carriers generally make investments based on a forecast
        of anticipated traffic. We do not control the planning or the construction
        of digital undersea fiber optic transmission facilities or satellites
        and must seek access to such facilities through partial ownership positions
        or lease arrangements on negotiated terms that may vary with industry
        and market conditions. Our ability to maintain and expand our business
        is dependent, in part, upon our continuing to maintain satisfactory relationships
        with these carriers, many of which are our competitors, and upon our ability
        to obtain their services on a cost effective basis. As we deploy our network,
        we will continue to be dependent on other carriers network transmission
        services for many of our services. These carriers are not expected to
        enter into long-term contracts with us and are not restricted from competing
        against us. To the extent that any of these carriers raise their rates,
        change their pricing structure or reduce the amount of capacity they will
        make available to us, our financial condition or results of operations
        may be adversely affected.Long Distance Carriers. Our ability to terminate traffic
        in our targeted foreign markets is an essential component of our current
        and future operations and, therefore, we are dependent upon securing operating
        agreements and other termination arrangements. Failure to secure or maintain
        such arrangements could limit our revenues, our ability to increase our
        services to our existing markets or our ability to gain entry into new
        markets. Our ability to compete in the long distance telecommunications
        market depends, in part, on our ability to procure advantageous rates
        from incumbent carriers and from other international exchange carriers,
        and on the ability of such parties to carry the transmissions we route
        to their networks. If, as a result of the termination of our relationship
        with an incumbent carrier or an international carrier or the inability
        of any such entity to carry traffic routed to it, we are forced to route
        our traffic to a different entity providing service at a less advantageous
        rate, or with lesser quality, there could be a material adverse effect
        on our profit margins or network service quality.
|11. | We need to retain our key management
        personnel and hire additional qualified personnel. We are dependent
        on the efforts of our senior officers and on our ability to hire and retain
        qualified management personnel. The loss of services of any of these individuals
        could materially and adversely affect our business and our future prospects.
        We have not entered into employment agreements with any of our senior
        officers. In addition, we anticipate that in order to successfully implement
        our business strategy, including the expansion of the geographic scope
        of our operations, we will be required to recruit and hire a substantial
        number of sales and other                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            

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|    | personnel. Failure to attract and retain
        additional qualified sales and other personnel, including management personnel
        who will train and integrate our new employees in addition to their role
        in continuing to manage our growth strategy could adversely affect us.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
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|12. | We depend on prompt collection of
        client payments. Because we render most of our services prior to receiving
        payment, we are dependent on the prompt collection of our clients
        bills. The failure of our clients to pay their bills in a timely manner
        or our failure to adequately assess their creditworthiness could materially
        adversely affect us.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|13. | Service interruptions could affect
        our business. Our success is largely dependent on our ability to deliver
        competitively priced, uninterrupted international long distance telephone
        services. We also face the risk that there may be a disruption in the
        service provided by these carriers, causing a disruption in the services
        we provide to our clients. Our operations are dependent on our ability
        to successfully expand our network and to integrate new and emerging technologies
        and equipment into our network. This expansion and integration may increase
        the risk of system failure and cause strain upon our network. Our operations
        also are dependent on our protection of our hardware and other equipment
        from damage due to natural disasters or other sources of power loss, telecommunications
        failures or similar occurrences. Significant or prolonged telephone network
        failures, or difficulties for clients in completing long distance telephone
        calls, could damage our reputation and result in the loss of clients and
        consequently have a material adverse effect on our financial condition
        or business prospects.                                                                                                                                                                                                                                                                                                                                              
|14. | We could be adversely affected if
        there are breaches in our network security systems.We could lose
        clients and expose ourselves to liability if there are any breaches to
        our network security systems which, in turn, could jeopardize the security
        of confidential information stored in our computer systems.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|15. | Increasing competition in the communications
        industry in foreign countries, and our limited or nonexistent competitive
        standing, may adversely affect our ability to generate revenues, gain
        significant market share and attract clients from existing providers.The communications industry in foreign countries is becoming increasingly
        competitive due in part to recent privatizations, deregulations and related
        increase in the number and size of new competitors. Furthermore, because
        we have a limited operating history and, in some of our target markets,
        no operating history, we have a limited competitive standing. We will
        compete with several other service providers in each of our markets. Competitors
        include global alliances of some of the worlds largest communications
        carriers, incumbent communications providers with large client bases,
        wireless telephone companies and satellite-based communications carriers.
        Other existing and potential competitors include cable television companies,
        railway companies, utilities and other entities with rights-of-way and
        large end users which operate private networks. We believe competition
        is likely to continue to intensify as the number of new market entrants
        increases. As a result, we may not be able to generate adequate revenues
        or gain a substantial share of the markets we intend to serve. We may
        also have difficulty attracting clients from established providers.
|16. | We face additional risks because
        we do business on an international level. There are certain risks
        inherent in doing business on an international level, such as unexpected
        changes in regulatory requirements, tariffs, customs, duties, other trade
        barriers, political risks and other factors which could materially adversely
        affect our current and planned operations. For example, existing carriers
        in foreign markets may take many months to allow competitors such as us
        to interconnect to their switches within the market. Further, we have
        limited recourse if our                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          

11

---

|    | foreign partners fail to perform under
        their arrangements with us, or if foreign governments, post, telephone
        and telegraph providers ("PTTs"), or other carriers take actions
        that adversely affect our ability to gain entry into those markets. The
        international telecommunications industry is changing rapidly due to deregulation,
        privatization of PTTs, technological improvements, expansion of telecommunications
        infrastructure and the globalization of the worlds economies. We
        cannot assure you that one or more of these factors will not vary in a
        manner that could have a material adverse effect on our financial condition
        or results of operations.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|17. | We face additional risks as we expand
        our business operations in emerging markets. Our current business
        strategy includes the continued expansion of our operations in emerging
        market countries. The political systems of many of the markets in which
        we currently operate or plan to operate are slowly emerging from a legacy
        of totalitarian rule. Political conflict and, in some cases, civil unrest
        and ethnic strife may continue in some of these countries for a period
        of time. Many of the economies of these countries are weak, volatile and
        reliant on substantial foreign assistance. Expropriation of private businesses
        in such jurisdictions remains a possibility, whether by outright seizure
        or by confiscatory tax or other policies. In addition, the legal systems
        in emerging markets frequently have little or no experience with commercial
        transactions between private parties. Consequently, we cannot provide
        any assurance that we will be able to protect or enforce our rights in
        emerging market countries. Further, the instability of the laws and regulations
        applicable to our businesses in these markets could materially and adversely
        affect our business, financial condition or results of operations.
|18. | Issuance of Additional Shares-Dilution.181,278,000 shares of Common Stock or 90.6% of the 200,000,000 authorized
        shares of Common Stock of the Company are unissued. The Board of Directors
        has the power to issue such shares, subject to shareholder approval, in
        some instances. Although the Company presently has no commitments or contracts
        to issue any additional shares to other persons. The Company may in the
        future attempt to issue shares to acquire products, equipment or properties,
        or for other corporate purposes. Any additional issuance by the Company,
        from its authorized but unissued shares, would have the effect of diluting
        the interest of existing shareholders.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|19. | Indemnification of Officers and Directors
        for Securities Liabilities.The laws of the State of Nevada provide
        that the Company could indemnify any Director, Officer, agent and/or employee
        as to those liabilities and on those terms and conditions as are specified
        in the Corporation Act of the State of Nevada. Further, the Company may
        purchase and maintain insurance on behalf of any such persons whether
        or not the corporation would have the power to indemnify such person against
        the liability insured against. The foregoing could result in substantial
        expenditures by the Company and prevent any recovery from such Officers,
        Directors, agents and employees for losses incurred by the Company as
        a result of their actions. Further, the Company has been advised that
        in the opinion of the Securities and Exchange Commission, indemnification
        is against public policy as expressed in the Securities Act of 1933, as
        amended, and is, therefore, unenforceable.                                                                                                                                                                                                                                                                                  
|20. | Cumulative Voting, Pre-emptive Rights
        and Control.There are no pre-emptive rights in connection with the
        Companys Common Stock. Shareholders may be further diluted in their
        percentage ownership of the Company in the event additional shares are
        issued by the Company in the future. Cumulative voting in the election
        of Directors is not provided for. Accordingly, the holders of a majority
        of the shares of Common Stock, present in person or by proxy, will be
        able to elect all of the Companys Board of Directors.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            

|**21.** | **N**o Dividends Anticipated.At
        the present time the Company does not anticipate paying dividends, cash
        or otherwise, on its Common Stock in the foreseeable future. Future dividends
        will depend on earnings, if any, of the Company, its financial requirements
        and other factors.
|------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

12

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REWARD ENTERPRISES, INC. 
   (A Development Stage Company)June 30, 2003



WILLIAMS & WEBSTER P.S. Certified Public Accountants Bank of America Financial Center 
  601 W. Riverside, Suite 1940 
  Spokane, WA 99201 
  (509) 838-5111

---

REWARD ENTERPRISES, INC. 
   (A Development Stage Company)

TABLE OF CONTENTS

|INDEPENDENT AUDITORS REPORT                                       | F-1 | 
|------------------------------------------------------------------ | --- | 
|                                                                   |     | 
|CONSOLIDATED FINANCIAL STATEMENTS                                  |     | 
|                                                                   |     | 
|Consolidated
      Balance Sheets                                  | F-2 | 
|                                                                   |     | 
|Consolidated
      Statements of Operations and Comprehensive Loss | F-3 | 
|                                                                   |     | 
|Consolidated
      Statement of Stockholders Equity               | F-4 | 
|                                                                   |     | 
|Consolidated
      Statements of Cash Flows                        | F-5 | 
|                                                                   |     | 
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS                         | F-6 | 

---

The Board of Directors 
  Reward Enterprises, Inc. 
  Santa Monica, California

INDEPENDENT AUDITORS REPORT

We have audited the accompanying consolidated balance sheets
  of Reward Enterprises, Inc. (a development stage company) as of June 30, 2003
  and 2002, and the related consolidated statements of operations and comprehensive
  loss, stockholders equity and cash flows for the years then ended and
  from December 12, 1997 (inception) to June 30, 2003. 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.

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
  Reward Enterprises, Inc. as of June 30, 2003 and 2002, and the results of its
  operations and its cash flows for the years then ended and from December 12,
  1997 (inception) to June 30, 2003 in conformity with accounting principles generally
  accepted in the United States of America.

As discussed in Note 2, the Company has no revenues and has
  sustained losses since inception. These factors raise substantial doubt about
  the Companys ability to continue as a going concern. Managements
  plans regarding those matters also are described in Note 2. The financial statements
  do not include any adjustments that might result from the outcome of this uncertainty.

Williams & Webster, P.S. Certified Public Accountants 
  Spokane, WA 
  November 17, 2003

F-1

---

REWARD ENTERPRISES, INC. 
   (A Development Stage Company)CONSOLIDATED BALANCE SHEETS

|                                                        |   | June 30,   |   |   | June 30,  |  
|------------------------------------------------------- | - | ---------- | - | - | --------- | -
|                                                        |   | 2003       |   |   | 2002      |  
|ASSETS                                                  |   |            |   |   |           |  
|CURRENT ASSETS                                          |   |            |   |   |           |  
|Cash
      and cash equivalents                         | $ | 12,835     |   | $ | 24,717    |  
|Accounts
      receivable, related party                |   | -          |   |   | 26,000    |  
|TOTAL
      CURRENT ASSETS                              |   | 12,835     |   |   | 50,717    |  
|                                                        |   |            |   |   |           |  
|PROPERTY AND EQUIPMENT                                  |   |            |   |   |           |  
|Telecommunications
      equipment                      |   | 51,600     |   |   | -         |  
|Website                                                 |   | 145,979    |   |   | 145,979   |  
|Accumulated
      depreciation and amortization         |   | (48,660    | ) |   | (19,464   | )
|TOTAL
      PROPERTY AND EQUIPMENT                      |   | 148,919    |   |   | 126,515   |  
|                                                        |   |            |   |   |           |  
|OTHER ASSETS                                            |   |            |   |   |           |  
|Goodwill                                                |   | -          |   |   | 2,100,000 |  
|                                                        |   |            |   |   |           |  
|TOTAL
      ASSETS                                      | $ | 161,754    |   | $ | 2,277,232 |  
|                                                        |   |            |   |   |           |  
|LIABILITIES & STOCKHOLDERS' EQUITY (DEFICIT)            |   |            |   |   |           |  
|CURRENT LIABILITIES                                     |   |            |   |   |           |  
|Accounts
      payable                                  | $ | 35,717     |   | $ | 15,064    |  
|Interest
      payable                                  |   | 8,313      |   |   | 690       |  
|Notes
      payable, net of discount                    |   | 70,000     |   |   | 28,000    |  
|Deferred
      income from joint venture                |   | 175,000    |   |   | -         |  
|TOTAL
      CURRENT LIABILITIES                         |   | 289,030    |   |   | 43,754    |  
|                                                        |   |            |   |   |           |  
|COMMITMENTS AND CONTINGENCIES                           |   | -          |   |   | -         |  
|                                                        |   |            |   |   |           |  
|STOCKHOLDERS' EQUITY (DEFICIT)                          |   |            |   |   |           |  
|Common
      stock, 200,000,000 shares authorized,      |   |            |   |   |           |  
|$0.001
      par value;18,722,000 and 17,703,667 shares |   |            |   |   |           |  
|issued
      and outstanding, respectively              |   | 18,722     |   |   | 17,704    |  
|Additional
      paid-in capital                        |   | 2,941,593  |   |   | 2,892,861 |  
|Stock
      options                                     |   | 10,400     |   |   | 14,400    |  
|Accumulated
      deficit during development stage      |   | (3,097,991 | ) |   | (691,487  | )
|TOTAL
      STOCKHOLDERS' EQUITY (DEFICIT)              |   | (127,276   | ) |   | 2,233,478 |  
|                                                        |   |            |   |   |           |  
|TOTAL
      LIABILITIES AND                             |   |            |   |   |           |  
|STOCKHOLDERS'
      EQUITY (DEFICIT)                    | $ | 161,754    |   | $ | 2,277,232 |  

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

F-2

---

REWARD ENTERPRISES, INC. 
   (A Development Stage Company)CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

|                                               |   |            |   |   |            |   |   | December 12, |  
|---------------------------------------------- | - | ---------- | - | - | ---------- | - | - | ------------ | -
|                                               |   |            |   |   |            |   |   | 1997         |  
|                                               |   |            |   |   |            |   |   | (Inception)  |  
|                                               |   | Year Ended |   |   | Year Ended |   |   | Through      |  
|                                               |   | June 30,   |   |   | June 30,   |   |   | June 30,     |  
|                                               |   | 2003       |   |   | 2002       |   |   | 2003         |  
|                                               |   |            |   |   |            |   |   |              |  
|R E V E N U E S                                | $ | -          |   | $ | -          |   | $ | -            |  
|                                               |   |            |   |   |            |   |   |              |  
|E X P E N S E S                                |   |            |   |   |            |   |   |              |  
|Consulting fees                                |   | 143,500    |   |   | -          |   |   | 410,638      |  
|General and administrative                     |   | 87,628     |   |   | 60,053     |   |   | 171,323      |  
|Legal and professional fees                    |   | 17,883     |   |   | 61,445     |   |   | 174,211      |  
|Travel and entertainment                       |   | 13,969     |   |   | 11,807     |   |   | 48,885       |  
|Depreciation and amortization                  |   | 29,196     |   |   | 19,596     |   |   | 52,426       |  
|Research and development                       |   | 4,705      |   |   | 83,330     |   |   | 88,035       |  
|Loss on impairment of asset                    |   | 2,100,000  |   |   | -          |   |   | 2,165,160    |  
|TOTAL
      OPERATING EXPENSES                 |   | 2,396,881  |   |   | 236,231    |   |   | 3,110,678    |  
|                                               |   |            |   |   |            |   |   |              |  
|OTHER INCOME AND EXPENSE                       |   |            |   |   |            |   |   |              |  
|Interest expense                               |   | 9,623      |   |   | 2,690      |   |   | 12,313       |  
|Gain from debt forgiveness                     |   | -          |   |   | -          |   |   | (25,000      | )
|TOTAL
      OTHER EXPENSE                      |   | 9,623      |   |   | 2,690      |   |   | (12,687      | )
|                                               |   |            |   |   |            |   |   |              |  
|LOSS BEFORE INCOME TAXES                       |   | (2,406,504 | ) |   | (238,921   | ) |   | (3,097,991   | )
|                                               |   |            |   |   |            |   |   |              |  
|PROVISION FOR TAXES                            |   | -          |   |   | -          |   |   | -            |  
|                                               |   |            |   |   |            |   |   |              |  
|NET LOSS                                       |   | (2,406,504 | ) |   | (238,921   | ) |   | (3,097,991   | )
|                                               |   |            |   |   |            |   |   |              |  
|OTHER COMPREHENSIVE INCOME (LOSS)              |   |            |   |   |            |   |   |              |  
|Foreign currency translation gain
      (loss) |   | -          |   |   | 246        |   |   | -            |  
|                                               |   |            |   |   |            |   |   |              |  
|COMPREHENSIVE LOSS                             | $ | (2,406,504 | ) | $ | (238,675   | ) | $ | (3,097,991   | )
|                                               |   |            |   |   |            |   |   |              |  
|BASIC AND DILUTED                              |   |            |   |   |            |   |   |              |  
|NET LOSS PER COMMON SHARE                      | $ | (0.13      | ) | $ | (0.02      | ) |   |              |  
|                                               |   |            |   |   |            |   |   |              |  
|WEIGHTED AVERAGE NUMBER OF                     |   |            |   |   |            |   |   |              |  
|COMMON STOCK SHARES OUTSTANDING                |   | 18,500,306 |   |   | 14,856,778 |   |   |              |  

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

F-3

---

REWARD ENTERPRISES, INC. 
   (A Development Stage Company)

CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)

|                                                       |                    |   |   |         |   |   |            |  |   |               |   |   | Stock          |   |   | Accumulated |   |   |               |  
|------------------------------------------------------ | ------------------ | - | - | ------- | - | - | ---------- |  | - | ------------- | - | - | -------------- | - | - | ----------- | - | - | ------------- | -
|                                                       | Common
      Stock |   |   |         |   |   |            |  |   | Options       |   |   | Deficit During |   |   | Total       |  
|                                                       | Number             |   |   |         |   |   | Additional |  |   | Subscriptions |   |   | and            |   |   | Development |   |   | Stockholders' |  
|                                                       | of
      Shares    |   |   | Amount  |   |   | Paid-in    |  |   | Receivable    |   |   | Warrants       |   |   | Stage       |   |   | Equity        |  
|Issuance of common stock in April 1998                 |                    |   |   |         |   |   |            |  |   |               |   |   |                |   |   |             |   |   |               |  
|for services valued at $0.01 per share                 | 1,000,000          |   | $ | 1,000   |   | $ | 9,000      |  | $ | (10,000       | ) | $ | -              |   | $ | -           |   | $ | -             |  
|Net loss for period ending June 30, 1998               | -                  |   |   | -       |   |   | -          |  |   | -             |   |   | -              |   |   | (10,000     | ) |   | (10,000       | )
|Balance, June 30, 1998                                 | 1,000,000          |   |   | 1,000   |   |   | 9,000      |  |   | (10,000       | ) |   | -              |   |   | (10,000     | ) |   | (10,000       | )
|Issuance of common stock in May 1999                   |                    |   |   |         |   |   |            |  |   |               |   |   |                |   |   |             |   |   |               |  
|for cash at an average of $0.10 per
      share        | 1,715,000          |   |   | 1,715   |   |   | 169,785    |  |   | -             |   |   | -              |   |   | -           |   |   | 171,500       |  
|Net loss for year ending June 30, 1999                 | -                  |   |   | -       |   |   | -          |  |   | -             |   |   |                |   |   | (62,506     | ) |   | (62,506       | )
|Balance, June 30, 1999                                 | 2,715,000          |   |   | 2,715   |   |   | 178,785    |  |   | (10,000       | ) |   | -              |   |   | (72,506     | ) |   | 98,994        |  
|Payables provided for stock subscription               | -                  |   |   | -       |   |   | -          |  |   | 10,000        |   |   | -              |   |   | -           |   |   | 10,000        |  
|Net loss for year ending June 30, 2000                 | -                  |   |   | -       |   |   | -          |  |   | -             |   |   | -              |   |   | (228,659    | ) |   | (228,659      | )
|Balance, June 30, 2000                                 | 2,715,000          |   |   | 2,715   |   |   | 178,785    |  |   | -             |   |   | -              |   |   | (301,165    | ) |   | (119,665      | )
|Issuance of common stock in October 2000               |                    |   |   |         |   |   |            |  |   |               |   |   |                |   |   |             |   |   |               |  
|for cash at $0.001 per share                           | 10,000,000         |   |   | 10,000  |   |   | -          |  |   | -             |   |   | -              |   |   | -           |   |   | 10,000        |  
|Issuance of common stock in October 2000               |                    |   |   |         |   |   |            |  |   |               |   |   |                |   |   |             |   |   |               |  
|for payment on loans payable at $0.001
      per share | 200,000            |   |   | 200     |   |   | -          |  |   | -             |   |   | -              |   |   | -           |   |   | 200           |  
|Stock options exercised at an average of $0.10         |                    |   |   |         |   |   |            |  |   |               |   |   |                |   |   |             |   |   |               |  
|per share in exchange for consulting
      fees        | 2,230,000          |   |   | 2,230   |   |   | 222,770    |  |   | -             |   |   | -              |   |   | -           |   |   | 225,000       |  
|Stock options exercised at an average of $0.14         |                    |   |   |         |   |   |            |  |   |               |   |   |                |   |   |             |   |   |               |  
|per share in exchange for cash                         | 1,325,000          |   |   | 1,325   |   |   | 179,925    |  |   | -             |   |   | -              |   |   | -           |   |   | 181,250       |  
|Net loss for the year ended June 30, 2001              | -                  |   |   | -       |   |   | -          |  |   | -             |   |   | -              |   |   | (151,401    | ) |   | (151,401      | )
|Balance, June 30, 2001                                 | 16,470,000         |   |   | 16,470  |   |   | 581,480    |  |   | -             |   |   | -              |   |   | (452,566    | ) |   | 145,384       |  
|Common stock issued in merger with                     |                    |   |   |         |   |   |            |  |   |               |   |   |                |   |   |             |   |   |               |  
|Q-Presents, Inc. at $0.35 per share                    | 6,000,000          |   |   | 6,000   |   |   | 2,094,000  |  |   | -             |   |   | -              |   |   | -           |   |   | 2,100,000     |  
|Common stock cancelled as part of                      |                    |   |   |         |   |   |            |  |   |               |   |   |                |   |   |             |   |   |               |  
|merger with Q-Presents, Inc.                           | (10,200,000        | ) |   | (10,200 | ) |   | 10,200     |  |   | -             |   |   | -              |   |   | -           |   |   | -             |  
|Stock options exercised at an average of $0.175        |                    |   |   |         |   |   |            |  |   |               |   |   |                |   |   |             |   |   |               |  
|per share in exchange for cash                         | 572,000            |   |   | 572     |   |   | 112,428    |  |   | -             |   |   | -              |   |   | -           |   |   | 113,000       |  
|Issuance of common stock in December 2001              |                    |   |   |         |   |   |            |  |   |               |   |   |                |   |   |             |   |   |               |  
|for cash at $0.001 per share                           | 890,000            |   |   | 890     |   |   | -          |  |   | -             |   |   | -              |   |   | -           |   |   | 890           |  
|Issuance of common stock in exchange                   |                    |   |   |         |   |   |            |  |   |               |   |   |                |   |   |             |   |   |               |  
|for services at $0.005 per share                       | 2,945,000          |   |   | 2,945   |   |   | 11,780     |  |   | -             |   |   | -              |   |   | -           |   |   | 14,725        |  
|Stock options issued for compensation                  |                    |   |   |         |   |   |            |  |   |               |   |   |                |   |   |             |   |   |               |  
|in December 2001                                       | -                  |   |   | -       |   |   | -          |  |   | -             |   |   | 10,400         |   |   | -           |   |   | 10,400        |  
|Issuance of common stock in January and March          |                    |   |   |         |   |   |            |  |   |               |   |   |                |   |   |             |   |   |               |  
|2002 for cash at an average of $0.15
      per share   | 660,000            |   |   | 660     |   |   | 30,840     |  |   | -             |   |   | -              |   |   | -           |   |   | 31,500        |  
|Issuance of stock warrants attached to                 |                    |   |   |         |   |   |            |  |   |               |   |   |                |   |   |             |   |   |               |  
|promissory notes in May 2002                           | -                  |   |   | -       |   |   | -          |  |   | -             |   |   | 4,000          |   |   | -           |   |   | 4,000         |  
|Issuance of common stock in May and June               |                    |   |   |         |   |   |            |  |   |               |   |   |                |   |   |             |   |   |               |  
|2002 for cash at an average of $0.12
      per share   | 366,667            |   |   | 367     |   |   | 52,133     |  |   | -             |   |   | -              |   |   | -           |   |   | 52,500        |  
|Net loss for the year ended June 30, 2002              | -                  |   |   | -       |   |   | -          |  |   | -             |   |   | -              |   |   | (238,921    | ) |   | (238,921      | )
|Balance, June 30, 2002                                 | 17,703,667         |   |   | 17,704  |   |   | 2,892,861  |  |   | -             |   |   | 14,400         |   |   | (691,487    | ) |   | 2,233,478     |  
|Issuance of common stock in July and September         |                    |   |   |         |   |   |            |  |   |               |   |   |                |   |   |             |   |   | -             |  
|2002 for cash at an average of $0.12
      per share   | 293,333            |   |   | 293     |   |   | 38,207     |  |   | -             |   |   | -              |   |   | -           |   |   | 38,500        |  
|Issuance of common stock in October 2002               |                    |   |   |         |   |   |            |  |   |               |   |   |                |   |   |             |   |   |               |  
|for consulting services                                | 725,000            |   |   | 725     |   |   | 6,525      |  |   | -             |   |   | -              |   |   | -           |   |   | 7,250         |  
|Expiration of stock warrants, May, 2003                | -                  |   |   | -       |   |   | 4,000      |  |   |               |   |   | (4,000         | ) |   |             |   |   | -             |  
|Net loss for the year ended June 30, 2003              | -                  |   |   | -       |   |   | -          |  |   | -             |   |   | -              |   |   | (2,406,504  | ) |   | (2,406,504    | )
|Balance, June 30, 2003                                 | 18,722,000         |   | $ | 18,722  |   | $ | 2,941,593  |  | $ | -             |   | $ | 10,400         |   | $ | (3,097,991  | ) | $ | (127,276      | )

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

F-4

---

REWARD ENTERPRISES, INC. 
   (A Development Stage Company)

CONSOLIDATED STATEMENTS OF CASH FLOWS

|                                                       |   |            |   |   |            |   |   | Dec 12,1997 |  
|------------------------------------------------------ | - | ---------- | - | - | ---------- | - | - | ----------- | -
|                                                       |   |            |   |   |            |   |   | (Inception) |  
|                                                       |   | Year Ended |   |   | Year Ended |   |   | Through     |  
|                                                       |   | June 30,   |   |   | June 30,   |   |   | June 30,    |  
|                                                       |   | 2003       |   |   | 2002       |   |   | 2003        |  
|                                                       |   |            |   |   |            |   |   |             |  
|Cash Flows From Operating Activities:                  |   |            |   |   |            |   |   |             |  
|Net loss                                               | $ | (2,406,504 | ) | $ | (238,921   | ) | $ | (3,097,991  | )
|Adjustments to reconcile net loss                      |   |            |   |   |            |   |   |             |  
|to
      net cash used by operating activities:        |   |            |   |   |            |   |   |             |  
|Depreciation
      and amortization                    |   | 29,196     |   |   | 19,464     |   |   | 52,294      |  
|Related
      party receivable                         |   | 26,000     |   |   |            |   |   | 26,000      |  
|Loss
      on impairment                               |   | 2,100,000  |   |   | -          |   |   | 2,165,160   |  
|Gain
      on forgiveness of debt                      |   | -          |   |   | -          |   |   | (25,000     | )
|Services
      provided in exchange for stock          |   | 7,250      |   |   | 14,725     |   |   | 31,975      |  
|Stock
      issued in exchange for payables            |   | -          |   |   | -          |   |   | 10,000      |  
|Stock
      options issued for compensation            |   | -          |   |   | 14,400     |   |   | 14,400      |  
|Discount
      on note payable                         |   | 2,000      |   |   | (2,000     | ) |   | -           |  
|Changes
      in assets and liabilities:               |   |            |   |   |            |   |   |             |  
|Other
      assets                                     |   | -          |   |   | -          |   |   | (60,000     | )
|Accounts
      receivable, related party               |   | -          |   |   | (26,000    | ) |   | (26,000     | )
|Accounts
      payable                                 |   | 20,653     |   |   | 123        |   |   | 105,777     |  
|Accrued
      expenses                                 |   | 7,623      |   |   | 690        |   |   | 163,313     |  
|Due
      to Joint Venture                             |   | 175,000    |   |   |            |   |   | 175,000     |  
|Net cash used by operating activities                  |   | (38,782    | ) |   | (217,519   | ) |   | (465,072    | )
|                                                       |   |            |   |   |            |   |   |             |  
|Cash Flows From Investing Activities:                  |   |            |   |   |            |   |   |             |  
|Changes to purchases, property and
      equipment     |   | (51,600    | ) |   | 1,059      |   |   | (60,526     | )
|Decrease (increase) in loans receivable                |   | -          |   |   | -          |   |   | (140,000    | )
|Cash from merger acquisition                           |   | -          |   |   | 9,093      |   |   | 9,093       |  
|Net cash provided (used) by investing
      activities |   | (51,600    | ) |   | 10,152     |   |   | (191,433    | )
|                                                       |   |            |   |   |            |   |   |             |  
|Cash Flows From Financing Activities:                  |   |            |   |   |            |   |   |             |  
|Proceeds from related party loans                      |   | -          |   |   | -          |   |   | 3,600       |  
|Payment on related party loans                         |   | -          |   |   | (1,500     | ) |   | (3,400      | )
|Proceeds from promissory notes                         |   | 40,000     |   |   | 30,000     |   |   | 70,000      |  
|Issuance of stock                                      |   | 38,500     |   |   | 197,890    |   |   | 599,140     |  
|Net cash provided by financing activities              |   | 78,500     |   |   | 226,390    |   |   | 669,340     |  
|                                                       |   |            |   |   |            |   |   |             |  
|Net increase (decrease) in cash and cash equivalents   |   | (11,882    | ) |   | 19,023     |   |   | 12,835      |  
|                                                       |   |            |   |   |            |   |   |             |  
|Foreign currency translation gain
      (loss)         |   | -          |   |   | 246        |   |   | -           |  
|                                                       |   |            |   |   |            |   |   |             |  
|Cash and cash equivalents, beginning of period         |   | 24,717     |   |   | 5,448      |   |   | -           |  
|                                                       |   |            |   |   |            |   |   |             |  
|Cash and cash equivalents, end of period               | $ | 12,835     |   | $ | (6,866     | ) | $ | 12,835      |  
|                                                       |   |            |   |   |            |   |   |             |  
|SUPPLEMENTAL CASH FLOW DISCLOSURES:                    |   |            |   |   |            |   |   |             |  
|Interest
      expense paid                            | $ | -          |   | $ | -          |   | $ | -           |  
|Income
      taxes paid                                | $ | -          |   | $ | -          |   | $ | -           |  
|                                                       |   |            |   |   |            |   |   |             |  
|NON-CASH INVESTING AND FINANCING TRANSACTIONS:         |   |            |   |   |            |   |   |             |  
|Services exchanged for common stock                    | $ | 7,250      |   | $ | 14,725     |   | $ | 31,975      |  
|Subscribed stock in exchange for payables              | $ | -          |   | $ | -          |   | $ | 10,000      |  
|Payables exchanged for shares of stock                 | $ | -          |   | $ | -          |   | $ | 160,000     |  
|Stock issued in payment of loans payable               | $ | -          |   | $ | -          |   | $ | 200         |  
|Stock issued for accrued consulting
      fees         | $ | -          |   | $ | -          |   | $ | 65,000      |  
|Stock options issued for compensation                  | $ | -          |   | $ | 14,400     |   | $ | 14,400      |  
|Stock issued for subsidiary                            | $ | -          |   | $ | 2,100,000  |   | $ | 2,100,000   |  
|Website acquired through merger                        | $ | -          |   | $ | 145,979    |   | $ | 145,979     |  

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

F-5

---

REWARD ENTERPRISES, INC. Notes to the Consolidated Financial Statements
   (A Development Stage Company)June 30, 2003

NOTE 1  ORGANIZATION AND DESCRIPTION OF BUSINESS

Reward Enterprises, Inc. (hereinafter the Company),
  was incorporated on December 12, 1997, under the laws of the State of Nevada
  primarily for the purpose of offering interactive online internet entertainment
  and game playing. On August 15, 2001, the Company entered into a merger agreement
  with Q Presents, Inc., which was incorporated in the State of California for
  the purpose of providing innovative event management and marketing automation
  solutions to take advantage of the meeting, hotel, trade show and convention
  industries. At the time of the merger, the Company changed its focus to match
  that of Q Presents, Inc.

The Company expects to generate revenue through licensing
  its Q automated event management services and related supported
  offerings; licensing its intranet and online services; sales of dedicated advertising;
  sales of related merchandise; and its promotion and publicity services.

Since the merger, the Company has focused on the development
  of its business plan. The Companys new management has recently entered
  into the specialized international communications market to provide international
  voice, internet access, and global network services to corporate clients, communication
  carriers and internet service providers. The Company will utilize the web-based
  platform that was originally intended as an event registration and automation
  solution for its telecommunication business.

The Companys year end is June 30.

NOTE 2  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

This summary of significant accounting policies of Reward
  Enterprises, Inc. is presented to assist in understanding the Companys
  financial statements. The financial statements and notes are representations
  of the Companys management, which is responsible for their integrity and
  objectivity. These accounting policies conform to accounting principles generally
  accepted in the United States of America and have been consistently applied
  in the preparation of the financial statements.

Accounting Methods 
  The Companys financial statements are prepared using the accrual basis
  of accounting in accordance with accounting principles generally accepted in
  the United States of America Companys financial statements are prepared
  using the accrual method of accounting.

Basic and Diluted Loss Per Share 
  Net loss per share was computed by dividing the net loss by the weighted average
  number of shares outstanding during the period. The weighted average number
  of shares was calculated by taking the number of shares outstanding and weighting
  them by the amount of time that they were outstanding. Basic and diluted loss
  per share were the same, as the inclusion of common stock equivalents would
  be anti-dilutive.

F-6

---

REWARD ENTERPRISES, INC. Notes to the Consolidated Financial Statements
   (A Development Stage Company)June 30, 2003

NOTE 2  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Going Concern 
  The accompanying financial statements have been prepared assuming that the Company
  will continue as a going concern.

As shown in the accompanying financial statements, the Company
  incurred a net loss of $2,406,504 for the year ended June 30, 2003, and has
  no revenue. The Company is currently putting technology in place that will,
  if successful, mitigate this factor that raises substantial doubt about the
  Companys ability to continue as a going concern. The financial statements
  do not include any adjustments relating to the recoverability and classification
  of recorded assets, or the amounts and classification of liabilities that might
  be necessary in the event the Company cannot continue in existence.

Management plans to seek additional capital through a public
  offering of its stock that will provide the funds needed to increase liquidity,
  fund internal growth and fully implement its business plan.

Cash and Cash Equivalents 
  For purposes of the consolidated statements of cash flows, the Company considers
  all short-term debt securities purchased with a maturity of three months or
  less to be cash equivalents.

Provision for Taxes 
  Income taxes are provided based upon the liability method of accounting pursuant
  to SFAS No. 109 Accounting for Income Taxes. Under this approach,
  deferred income taxes are recorded to reflect the tax consequences on future
  years of differences between the tax basis of assets and liabilities and their
  financial reporting amounts at each year-end. A valuation allowance is recorded
  against deferred tax assets if management does not believe the Company has met
  the more likely than not standard imposed by SFAS No. 109 to allow
  recognition of such an asset.

At June 30, 2003 and 2002, the Company had net deferred tax
  assets of approximately $1,045,000 and $169,000, respectively, principally arising
  from net operating loss carryforwards for income tax purposes, and a $10,400
  book-tax difference related to stock options issued for services. As management
  of the Company cannot determine that it is more likely than not that the Company
  will realize the benefit of the net deferred tax asset, a valuation allowance
  equal to the net deferred tax asset has been established as of June 30, 2003
  and 2002 in the amounts of $1,045,000 and $169,000, respectively. The change
  in the allowance account from June 30, 2002 to June 30, 2003 was $876,000 as
  a result of a change in managements estimates.

At June 30, 2003 and 2002, the Company has net operating loss
  carryforwards of approximately $3,000,000, and $690,000, respectively, which
  expire in the years through 2023.

F-7

---

REWARD ENTERPRISES, INC. Notes to the Consolidated Financial Statements
   (A Development Stage Company)June 30, 2003

NOTE 2  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
  (Continued)

Use of Estimates 
  The process of preparing financial statements in conformity with accounting
  principles generally accepted in the United States of America requires the use
  of estimates and assumptions regarding certain types of assets, liabilities,
  revenues, and expenses. Such estimates primarily relate to unsettled transactions
  and events as of the date of the financial statements. Accordingly, upon settlement,
  actual results may differ from estimated amounts.

Impaired Asset Policy 
  In October 2001, the Financial Accounting Standards Board issued Statement of
  Financial Accounting Standards No. 144, Accounting for the Impairment
  or Disposal of Long-Lived Assets (SFAS No. 144). SFAS No. 144 replaces
  SFAS No. 121, Accounting for the Impairment of Long-Lived Assets and for
  Long-Lived Assets to Be Disposed Of. This standard establishes a single
  accounting model for long-lived assets to be disposed of by sale, including
  discontinued operations. SFAS No. 144 requires that these long-lived assets
  be measured at the lower of carrying amount or fair value less cost to sell,
  whether reported in continuing operations or discontinued operations. This statement
  is effective beginning for fiscal years after December 15, 2001. The Company
  adopted SFAS No. 144 during the year ended June 30, 2002.

The Company impaired the remaining value of its goodwill of
  $2,100,000, acquired in prior years under Financial Accounting Standards Board
  Statement Financial Accounting Standards Board issued Statement of Financial
  Accounting Standards No. 142, Goodwill and Other Intangible Assets
  (SFAS 142) during the year ending June 30, 2003. Under SFAS 142, the Company
  is required to periodically assess the value of its intangible assets to determine
  underlying value.

The Company has recorded an impairment to its software license
  website and computer hardware of $65,160 during the year ended June 30, 2001,
  effectively reducing the recorded amount of these assets to $1,191 at June 30,
  2001. As of June 30, 2003, the Company had deemed its goodwill recorded on its
  financial statements to be impaired (See Note 5).

Web Site Development 
  The Company has adopted SOP 98-1 as amplified by EITF 00-2, Accounting
  for Web Site Development Costs. In accordance with this adoption, the
  Company has capitalized website development costs. During the year ended June
  30, 2002, the Company capitalized $145,979 of website development costs, which
  were acquired in the August 15, 2001 merger. The Company has recently entered
  into the specialized international communications market and continues to utilize
  the website for this purpose. In November 2001, the Company began amortizing
  the web site costs using the straight-line method over a five year expected
  life for a total amortization expense of $29,196 at June 30, 2003.

F-8

---

REWARD ENTERPRISES, INC. Notes to the Consolidated Financial Statements
   (A Development Stage Company)June 30, 2003

NOTE 2  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
  (Continued)

Derivative Instruments 
  The Financial Accounting Standards Board issued Statement of Financial Accounting
  Standards No. 133, Accounting for Derivative Instruments and Hedging Activities
  (hereinafter SFAS No. 133), as amended by SFAS No. 137, Accounting
  for Derivative Instruments and Hedging Activities  Deferral of the Effective
  Date of FASB No. 133, and SFAS No. 138, Accounting for Certain Derivative
  Instruments and Certain Hedging Activities, and SFAS No. 149, Amendment
  of Statement 133 on Derivative Instruments and Hedging Activities. These
  statements establish accounting and reporting standards for derivative instruments,
  including certain derivative instruments embedded in other contracts, and for
  hedging activities. They require that an entity recognize all derivatives as
  either assets or liabilities in the balance sheet and measure those instruments
  at fair value.

If certain conditions are met, a derivative may be specifically
  designated as a hedge, the objective of which is to match the timing of gain
  or loss recognition on the hedging derivative with the recognition of (i) the
  changes in the fair value of the hedged asset or liability that are attributable
  to the hedged risk or (ii) the earnings effect of the hedged forecasted transaction.
  For a derivative not designated as a hedging instrument, the gain or loss is
  recognized in income in the period of change.

Historically, the Company has not entered into derivatives
  contracts to hedge existing risks or for speculative purposes.

At June 30, 2003, the Company has not engaged in any transactions
  that would be considered derivative instruments or hedging activities.

Compensated Absences 
  The Company currently does not have a policy regarding accruals of compensated
  absences. The Company intends to expense these costs as incurred.

Recent Accounting Pronouncements 
  In May 2003, the Financial Accounting Standards Board issued Statement of Financial
  Accounting Standards No. 150, Accounting for Certain Financial Instruments
  with Characteristics of Both Liabilities and Equity (hereinafter SFAS
  No. 150). SFAS No. 150 establishes standards for classifying and measuring
  certain financial instruments with characteristics of both liabilities and equity
  and requires that those instruments be classified as liabilities in statements
  of financial position. Previously, many of those instruments were classified
  as equity. SFAS No. 150 is effective for financial instruments entered into
  or modified after May 31, 2003 and otherwise is effective at the beginning of
  the first interim period beginning after June 15, 2003. The Company has not
  yet determined the impact of the adoption of this statement.

F-9

---

REWARD ENTERPRISES, INC. Notes to the Consolidated Financial Statements
   (A Development Stage Company)June 30, 2003

NOTE 2  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
  (continued)

Recent Accounting Pronouncements (Continued)

In April 2003, the Financial Accounting Standards Board issued
  Statement of Financial Accounting Standards No. 149, Amendment of Statement
  133 on Derivative Instruments and Hedging Activities (hereinafter SFAS
  No. 149). SFAS No. 149 amends and clarifies the accounting for derivative
  instruments, including certain derivative instruments embedded in other contracts,
  and for hedging activities under SFAS No. 133, Accounting for Derivative
  Instruments and Hedging Activities. This statement is effective for contracts
  entered into or modified after June 30, 2003 and for hedging relationships designated
  after June 30, 2003. The adoption of SFAS No. 149 is not expected to have a
  material impact on the financial position or results of operations of the Company.

In December 2002, the Financial Accounting Standards Board
  issued Statement of Financial Accounting Standards No. 148, Accounting
  for Stock-Based Compensation  Transition and Disclosure (hereinafter
  SFAS No. 148). SFAS No. 148 amends SFAS No. 123, Accounting
  for Stock-Based Compensation, to provide alternative methods of transition
  for a voluntary change to the fair value based method of accounting for stock-based
  employee compensation. In addition, the statement amends the disclosure requirements
  of SFAS No. 123 to require prominent disclosure in both annual and interim financial
  statements about the method of accounting for stock-based employee compensation
  and the effect of the method used on reported results. The provisions of the
  statement are effective for financial statements for fiscal years ending after
  December 15, 2002. The Company currently reports stock issued to employees under
  the rules of SFAS 123. Accordingly there is no change in disclosure requirements
  due to SFAS 148.

In June 2002, the Financial Accounting Standards Board issued
  Statement of Financial Accounting Standards No. 146, Accounting for Costs
  Associated with Exit or Disposal Activities (hereinafter SFAS No.
  146). SFAS No. 146 addresses significant issues regarding the recognition,
  measurement, and reporting of costs associated with exit and disposal activities,
  including restructuring activities. SFAS No. 146 also addresses recognition
  of certain costs related to terminating a contract that is not a capital lease,
  costs to consolidate facilities or relocate employees, and termination benefits
  provided to employees that are involuntarily terminated under the terms of a
  one-time benefit arrangement that is not an ongoing benefit arrangement or an
  individual deferred-compensation contract. SFAS No. 146 was issued in June 2002,
  effective December 31, 2002 with early adoption encouraged. The impact on the
  Companys financial position or results of operations from adopting SFAS
  No. 146 has not been determined.

In April 2002, the Financial Accounting Standards Board issued
  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 (hereinafter SFAS No. 145), which updates, clarifies
  and simplifies existing accounting pronouncements. FASB No. 4, which required
  all gains and losses from the extinguishment of debt to be aggregated and, if
  material, classified as an extraordinary item, net of related tax effect was
  rescinded. As a result, FASB No. 64, which amended FASB No. 4, was rescinded,
  as it was no longer necessary. FASB No. 44, Accounting for Intangible
  Assets of Motor Carriers, established the accounting requirements for
  the effects of transition to the provisions of the Motor Carrier Act of 1980.
  Since the transition has been completed, FASB No. 44 is no longer necessary
  and has been rescinded. SFAS No. 145 amended FASB No. 13 to eliminate an inconsistency
  between the required accounting for sale-leaseback transactions and the required
  accounting for certain lease modifications that have economic effects

F-10

---

REWARD ENTERPRISES, INC. Notes to the Consolidated Financial Statements
   (A Development Stage Company)June 30, 2003

NOTE 2  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Recent Accounting Pronouncements (Continued)

that are similar to sale-leaseback transactions. The Company
  adopted SFAS No. 145 and does not believe that the adoption will have a material
  effect on the financial statements of the Company at June 30, 2003.

In August 2001, the Financial Accounting Standards Board issued
  Statement of Financial Accounting Standards No. 144, Accounting for the
  Impairment or Disposal of Long-Lived Assets (hereinafter SFAS No.
  144). SFAS No. 144 replaces SFAS No. 121, Accounting for the Impairment
  of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of. This
  standard establishes a single accounting model for long-lived assets to be disposed
  of by sale, including discontinued operations. SFAS No. 144 requires that these
  long-lived assets be measured at the lower of carrying amount or fair value
  less cost to sell, whether reported in continuing operations or discontinued
  operations. This statement is effective beginning for fiscal years after December
  15, 2001, with earlier application encouraged. The Company adopted SFAS No.
  144 and does not believe that the adoption will have a material impact on the
  financial statements of the Company at June 30, 2003.

In June 2001, the Financial Accounting Standards Board issued
  Statement of Financial Accounting Standards No. 143, Accounting for Asset
  Retirement Obligations (hereinafter SFAS No. 143). SFAS No.
  143 establishes guidelines related to the retirement of tangible long-lived
  assets of the Company and the associated retirement costs. This statement requires
  that the fair value of a liability for an asset retirement obligation be recognized
  in the period in which it is incurred if a reasonable estimate of fair value
  can be made. The associated asset retirement costs are capitalized as part of
  the carrying amount of the long-lived assets. This statement is effective for
  financial statements issued for the fiscal years beginning after June 15, 2002
  and with earlier application encouraged. **The Company adopted SFAS No. 143
  and does not believe that the adoption will have a material impact on the financial
  statements of the Company at June 30, 2003.

In June 2001, the Financial Accounting Standards Board issued
  Statement of Financial Accounting Standards No. 141, "Business Combinations"
  (hereinafter SFAS No. 141) and Statement of Financial Accounting
  Standard No. 142, "Goodwill and Other Intangible Assets" (hereinafter SFAS
  No. 142). SFAS No. 141 provides for the elimination of the pooling-of-interests
  method of accounting for business combinations with an acquisition date of July
  1, 2001 or later. SFAS No. 142 prohibits the amortization of goodwill and other
  intangible assets with indefinite lives and requires periodic reassessment of
  the underlying value of such assets for impairment. SFAS No. 142 is effective
  for fiscal years beginning after December 15, 2001. Application of the nonamortization
  provision of SFAS No. 142 had no effect on the operations or financial position
  of the Company.

In September 2000, the Financial Accounting Standards Board
  issued Statement of Financial Accounting Standard No. 140 Accounting for
  Transfers and Servicing of Financial Assets and Extinguishment of Liabilities
  (hereinafter SFAS No. 140). This statement provides accounting and
  reporting standards for transfers and servicing of financial assets and extinguishment
  of liabilities and also provides consistent standards for distinguishing transfers
  of financial assets that are sales from transfers that are secured borrowings.
  SFAS No. 140 is effective for recognition and reclassification of collateral
  and for disclosures relating to securitization transactions and collateral for
  fiscal years ending after December 15, 2000, and is effective for transfers
  and servicing of financial assets and extinguishments of liabilities occurring
  after March 31, 2001. The Company believes that the adoption of this standard
  will not have a material effect on the Companys results of operations
  or financial position.

F-11

---

REWARD ENTERPRISES, INC. Notes to the Consolidated Financial Statements
   (A Development Stage Company)June 30, 2003

NOTE 2  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Recent Accounting Pronouncements (Continued)

In January 2003, the Financial Accounting Standards Board
  issued FASB Interpretation No. 46 Consolidation of Variable Interest Entities,
  an Interpretation of ARB No. 51 (hereinafter FIN 46). FIN
  46 requires certain variable interest entities to be consolidated by the primary
  beneficiary of the entity if the equity investors in the entity do not have
  the characteristics of a controlling financial interest or do not have sufficient
  equity at risk for the entity to finance its activities without additional subordinated
  financial support from other parties. FIN 46 is effective for all new variable
  interest entities created or acquired after January 31, 2003. The provisions
  of FIN 46 must be applied for the first interim or annual period beginning after
  June 15, 2003. The Company does not have any entities that require disclosure
  or new consolidation as a result of adopting the provisions of FIN 46.

In November 2002, the Financial Accounting Standards Board
  issued FASB Interpretation No. 45 Guarantors Accounting and Disclosure
  Requirements for Guarantees, including Indirect Guarantees of Indebtedness of
  Others (hereinafter FIN 45). FIN 45 requires a company, at
  the time it issues a guarantee, to recognize an initial liability for the fair
  value of obligations assumed under the guarantee and elaborates on existing
  disclosure requirements related to guarantees and warranties. The initial recognition
  requirements of FIN 45 are effective for guarantees issued or modified after
  December 31, 2002 and do not have an impact on the financial statements of the
  Company. The Company does not anticipate issuing any guarantees which would
  be required to be recognized as a liability under the provisions of FIN 45 and
  thus does not expect the adoption of this interpretation to have an impact on
  its results of operations or financial position.

Reclassifications 
  Certain prior year amounts have been reclassified to conform to the fiscal 2003
  presentation.

Principles of Consolidation 
  The consolidated financial statements include the accounts of the Company and
  its wholly owned subsidiary, Q Presents, Inc., after elimination of intercompany
  accounts and transactions.

NOTE 3  ACQUISITIONS

On August 15, 2001, Reward Enterprises, Inc. acquired Q Presents,
  Inc. with the issuance of 6,000,000 shares of common stock in exchange for all
  of the outstanding common stock of Q Presents, Inc. This transaction had an
  accounting date of August 31, 2001, which was the date that the transaction
  was final. The value of the stock issued at the fair market price of $0.35 per
  share was $2,100,000.

The purchase price of Q Presents, Inc. was $2,100,000, determined
  by the fair market value of Rewards stock. The net book deficit of assets
  acquired was $105,588.

F-12

---

REWARD ENTERPRISES, INC. Notes to the Consolidated Financial Statements
   (A Development Stage Company)June 30, 2003

NOTE 3  ACQUISITIONS (Continued)

The assets and liabilities acquired were as follows as of August 31, 2001:

| | Cash in bank                     | $ | 9,093   | 
| | -------------------------------- | - | ------- | 
| | Accounts receivable from officer |   | 96      | 
| | Website                          |   | 43,000  | 
| | Total Assets                     | $ | 52,189  | 
| |                                  |   |         | 
| | Accounts payable                 | $ | 15,169  | 
| | Interest payable to Reward       |   | 2,601   | 
| | Note payable to Reward           |   | 140,000 | 
| | Total
      Liabilities          | $ | 157,777 | 
| |                                  |   |         | 
| | Liabilities in excess of assets  | $ | 105,588 | 

After the elimination of $2,601 of interest owed between the
  companies, as part of the acquisition transaction, $102,987 was allotted to
  the value of the website based upon costs expensed during the websites
  development. The balance of the purchase price was allocated to goodwill that
  was acquired in the merger. Pursuant to the acquisition, Q Presents, Inc. became
  a wholly owned subsidiary of the Company.

NOTE 4  PROPERTY AND EQUIPMENT

Property and equipment are stated at cost. Depreciation is
  provided using the straight-line method over the estimated useful lives of the
  assets. The useful lives of property and equipment for purposes of computing
  depreciation is five years. The computer equipment in the Companys Vancouver
  office was abandoned when the Company moved to the Q Presents offices in California.
  The Company deemed this remaining book value of $1,059 to be an office expense
  for the quarter ending September 30, 2001.

NOTE 5  GOODWILL

The Company acquired goodwill in the acquisition of Q Presents,
  Inc. (See Note 3). This goodwill will be accounted for in accordance with SFAS
  No. 142. (See Note 2.) The Company will periodically review this asset for possible
  impairment. At June 30, 2003 it was determined the asset was impaired due to
  a permanent decline in the Companys stock value, and a charge for the
  impairment of $2,100,000 was recorded under operating expenses.

F-13

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REWARD ENTERPRISES, INC. Notes to the Consolidated Financial Statements
   (A Development Stage Company)June 30, 2003

NOTE 6  COMMON STOCK

Upon incorporation, subscriptions for 1,000,000 shares of
  common stock were issued at $0.01 per share for $10,000. In July 1999, the Companys
  board of directors authorized a 1 for 10 reverse stock split. This decreased
  the number of issued and outstanding shares to 1,000,000 and the par value of
  the stock to $0.001 per share. All financial statement information herein has
  been changed to reflect this stock split.

Additional share issuances under Regulation D, Rule 504, include
  1,400,000 common shares at $0.01 and 315,000 common shares at $0.50 per share,
  for total proceeds of $171,500.

At June 30, 1999, $10,000 in stock subscriptions was receivable.
  During the year ended June 30, 2000, these subscriptions were satisfied.

During October 2000, 10,000,000 common stock shares were issued
  at $0.001 per share for cash proceeds of $10,000. This issuance resulted in
  one of the Companys officers receiving shares which constituted a 64%
  ownership in the Company. An additional 200,000 common stock shares were issued
  at $0.001 per share to satisfy a note payable. The 10,200,000 shares issued
  in these transactions were subsequently cancelled in accordance with the terms
  of the agreement to acquire Q Presents, Inc. (See Note 3.)

During December 2000, stock options were exercised in exchange
  for consulting fees payable. These stock options were exercised, resulting in
  1,600,000 common stock shares being issued in exchange for satisfying $160,000
  in consulting fees payable.

In 2001, 1,955,000 options for common stock were exercised.
  One million of the options were for cash at $0.10 per share. Another 325,000
  of the options were for cash at $0.25 per share, and the remaining 630,000 options
  were for director services at $0.10 per share.

In August 2001, the Company issued 6,000,000 shares of common
  stock in its acquisition of Q Presents, Inc. (See Note 3.)

Between October and December 2001, 572,000 options for common
  stock were exercised. Two hundred thousand of the options were for cash at $0.10
  per share and 372,000 options were for cash at $0.25 per share for which the
  Company received $113,000.

In December 2001, the Company issued an additional 890,000
  shares of common stock to twelve investors in consideration of $890.

Between January and March 2002, the Company issued an additional
  660,000 shares of common stock to three investors in consideration of $31,500.

In April 2002, the Company issued 2,945,000 shares of common
  stock for services in the amount of $14,725.

In May and June of 2002, the Company issued 366,667 shares
  of common stock for cash in the amount of $52,500.

Between July and September of 2002, the Company issued 293,333
  shares of common stock for cash in the amount of $38,500.

In October 2002, the Company issued 725,000 shares of common
  stock for services totaling $7,250.

F-14

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REWARD ENTERPRISES, INC. Notes to the Consolidated Financial Statements
   (A Development Stage Company)June 30, 2003

NOTE 7STOCK OPTIONS AND WARRANTS

In September 1998, the Company adopted the Reward Enterprises,
  Inc. 1999 Directors and Officers Stock Option Plan, a non-qualified plan. During
  1999, the Company granted 2,500,000 common stock options for the services of
  consultants. The options issued include negotiation rights and begin vesting
  in June 1999, with 25% of the eligible shares vesting each year until the recipients
  are fully vested in their shares.

The Company entered into consulting agreements with three
  directors of the Company, whereby two of the directors would each receive $5,000
  per month and 1,000,000 common stock options (with half exercisable at $0.10
  per share and half exercisable at $0.25 per share) and the other director would
  receive $2,500 per month and 500,000 common stock options (with half exercisable
  at $0.10 per share and half exercisable at $0.25 per share). These consulting
  agreements were terminated effective October 31, 2000. All options related to
  these agreements expire April 30, 2009. At March 2001, a total of 630,000 options
  were exercised in exchange for accrued consulting fees due to them of $65,000.

On October 16, 2000, the Company adopted the 2000 Stock Option
  Plan, a non-qualified plan, that allows the Company to distribute up to 7,000,000
  shares of common stock to directors, officers and employees. Stock options of
  200,000 were granted to a consultant. The exercise price of these options is
  $0.10 per share for the first 100,000 options and $0.25 per share for the balance
  of 100,000 options. These options will expire September 30, 2009. During November
  2000, 2,230,000 options were granted with an exercise price of $0.10 per share,
  in settlement of consulting fees with an expiration date of April 30, 2001.
  During the year ending June 30, 2001 a total of 3,455,000 options were exercised.

The fair value of each option granted is estimated on the
  grant date using the Black-Scholes option price calculation. The following assumptions
  were made in estimating fair value: Risk-free interest rate of 5% and expected
  life of ten years. A minimum volatility of 30% was used and resulted in no adjustment
  to compensation.

Between October and December 2001, options to purchase 572,000
  shares of common stock were exercised and the Company received $103,000.

In December 2001, as part of the employment agreements with
  Mr. Edward Withrow III and Mr. Warren K. Withrow, the Company issued stock options
  for 1,000,000 shares with exercise prices of $0.04 per share and 400,000 shares
  with exercise prices of $0.10 per share. The Black-Scholes option price calculation
  of the fair value of these options is $10,400, based upon a risk-free interest
  rate of 5%, volatility of 30% and a term of ten years.

F-15

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REWARD ENTERPRISES, INC. Notes to the Consolidated Financial Statements
   (A Development Stage Company)June 30, 2003

NOTE 7STOCK OPTIONS AND WARRANTS (Continued)

The Company signed an agreement with SBI USA, a member of
  Softbank Investment Group, in February 2002. (See Note 10.) This agreement included
  3,000,000 warrants for purchase of 3,000,000 shares of common stock with exercise
  prices of $0.50, $0.75, and $1.00 per share. In May of 2002, the Company attached
  500,000 warrants for an equal number of shares of common stock to promissory
  notes that were issued. (See Note 10.) The warrants have exercise prices from
  $0.05 to $0.10 per share. The Company also attached 40,000 warrants to various
  issuances of common stock in June 2002. The holders of the warrants may purchase
  an equal number of common stock shares at exercise prices from $0.25 to $0.45
  per share. These warrants were valued using the Black-Scholes option price calculator
  using a risk-free interest rate of two percent, volatility of 70%, a term of
  one year, and either an equity price of $0.05 or $0.12 depending on the date
  of issuance. It was determined that the 400,000 warrants attached to one of
  the promissory notes had a value of $4,000., with an expiration date of May
  14, 2003. The 400,000 warrants were not exercised and subsequently expired.

Following is a summary of the Companys stock options:

|                                               |           |   |   | Weighted | 
|---------------------------------------------- | --------- | - | - | -------- | 
|                                               | Number    |   |   | Average  | 
|                                               | Of        |   |   | Exercise | 
|                                               | Shares    |   |   | Price    | 
|Outstanding at 6-30-2001                       | 1,375,000 |   | $ | 0.18     | 
|Granted                                        | 1,400,000 |   |   | 0.06     | 
|Exercised                                      | (572,000  | ) |   | 0.20     | 
|Forfeited                                      | (400,000  | ) |   | 0.25     | 
|Outstanding at 6-30-2002                       | 1,803,000 |   | $ | 0.10     | 
|                                               |           |   |   |          | 
|Options exercisable at 6-30-2002               | 1,803,000 |   |   |          | 
|                                               |           |   |   |          | 
|Weighted average fair value of options granted |           |   |   |          | 
|during the year
      ended June 30, 2002      |           |   | $ | 0.01     | 
|                                               |           |   |   |          | 
|Outstanding at 6-30-2002                       | 1,803,000 |   | $ | 0.10     | 
|Granted                                        | -         |   |   | -        | 
|Exercised                                      | -         |   |   | -        | 
|Forfeited                                      | -         |   |   | -        | 
|Outstanding at 6-30-2003                       | 1,803,000 |   | $ | 0.10     | 
|                                               |           |   |   |          | 
|Options exercisable at 6-30-2003               | 1,803,000 |   |   |          | 
|                                               |           |   |   |          | 
|Weighted average fair value of options granted |           |   |   |          | 
|during the period
      ended June 30, 2003    |           |   |   | -        | 

F-16

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REWARD ENTERPRISES, INC. Notes to the Consolidated Financial Statements
   (A Development Stage Company)June 30, 2003

NOTE 8  RELATED PARTY TRANSACTIONS

Certain consultants who received common stock options under
  the Companys non-qualified stock option plan are the Companys directors
  and stockholders. (See Note 6.) Until October 2001, an associate of a director
  of the Company provided office space to the Company in exchange for services
  provided by the director. The value of this space was considered to be $2,000
  per month and was considered to be a loan from the director at that time.

In September 2001, the Companys board of directors approved
  consulting agreements with Edward W. Withrow III and Warren K. Withrow for consulting/employment
  agreements providing for payments to each of $3,500 cash per month and options
  to purchase up to 1,800,000 shares of common stock. These options were subsequently
  reduced to 700,000 shares in December 2001 and the cash value of services was
  increased to $10,000 per month, which was to begin in April 2002; however, as
  of June 30, 2002, no compensation has been paid, and the agreements are being
  renegotiated.

The Company has yet to finalize compensation agreements with
  its officers, but has plans to do so in the very near future. These advances
  were written off as compensation in June 30, 2003. In the period ended June
  30, 2003, the Company paid two of its officers a total of $133,500 as independent
  contractors and consultants.

From time to time the Company receives funds from related
  parties in the form of loans. These are recorded as unsecured, non-interest
  bearing, short-term loans, payable upon demand. At June 30, 2003, there were
  no related party loans outstanding.

NOTE 9  COMMITMENTS AND CONTINGENCIES

In September 2001, the Company also entered into a letter
  of intent with Live Media Events, Inc. On January 10, 2002, the Company and
  Live Media Events, Inc. entered into a cancellation and mutual release agreement
  on the aforementioned letter of intent.

In February 2002, the Company entered into a non-exclusive
  financial advisory contract with SBI USA, a member of Softbank Investment Group.
  In consideration for the services of SBI, the Company is obligated to pay a
  $12,500 retainer which becomes due and payable upon funding the Companys
  $500,000 promissory note. The Company also granted common stock warrants pursuant
  to this agreement. (See Note 7.) At June 30, 2003, the Company has not paid
  any of the retainer, and has not received any funding from the issuance of the
  aforementioned promissory note.

The Companys officers are employed as independent contractors
  and consultants, and as such, are responsible for all related payroll
  taxes arising from any payments made to them by the Company.

On June 1, 2003, the Company entered into a consulting agreement
  with Huntington Chase Financial Group LLC. The terms of the agreement are $10,000
  per month for a six month period ending November 2003.

F-17

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REWARD ENTERPRISES, INC. Notes to the Consolidated Financial Statements
   (A Development Stage Company)June 30, 2003

NOTE 10  LOANS PAYABLE

The Company issued two convertible promissory notes for a
  total of $30,000 in May 2002 and one promissory note for $25,000 in January
  2003 and one promissory note for $15,000 in June 2003 which bear interest rates
  at 20%, 15% and 15% respectively. The two convertible notes had warrants attached,
  and were convertible into common stock within 60 and 90 days of issuance. Neither
  note was converted. Under their original terms, the notes were payable on or
  before either 60 or 90 days from issuance. The $20,000 note is in default, and
  began accruing interest at 25% in July 2002. The terms of the $10,000 note were
  extended to December 31, 2002. The $4,000 value of the warrants on the $20,000
  note resulted in that note being issued at a discount which will be amortized
  over the life of the original note. A total of $2,000 was amortized against
  the discount and a total of $8,313 was accrued as interest on these notes at
  June 30, 2003.

NOTE 11  DEFERRED REVENUE FROM JOINT VENTURE

The Company has entered into revenue sharing agreements with
  five individuals surrounding the Companys International Long Distance
  (ILD) telecommunications operation which delivers long distance
  telephone service from wholesale telecommunication operators between the United
  States and India. The individuals advanced $175,000 against future revenues
  that would be generated by the ILD. The Company agreed to split the net profits
  of the IDL on a 50-50 basis during the first twelve months of ILD being in operation.
  Profits are defined as gross revenue from wholesalers less termination costs
  (the cost to terminate a telephone call in India charged by the India telephone
  company), less the Companys India partners share of 30% and other expenses
  that approximate $20,000 a month. The maximum amount that the investors were
  to realize was a 100% return on investment. These advances were booked for financial
  statement purposes as Deferred Revenue on the balance sheet of the Company as
  of June 30, 2003 and will be recognized as revenue by the Company over twelve
  months once successful operation has begun. The Company is still working with
  its Indian partners and expects revenues to begin in the first calendar quarter
  of 2004.

NOTE 12 - SUBSEQUENT EVENT

On October 1, 2003, the Company entered into a promissory
  note for monies received in the amount of $10,000. The note is due and payable
  on November 1, 2003 at the rate of 12% interest per month with an administrative
  fee of $1,400 for a total due of $11,500. The Company is currently in default
  of said note and is negotiating the payment terms.

F-18

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ITEM 2.        DESCRIPTION OF PROPERTY

The
  Company does not own any real property. The Companys only asset is cash.

The
  Companys administrative headquarters are located at 1327 Ocean Avenue,
  Suite M, Santa Monica, California 90401 and its telephone number is (310) 395-5374.
  There is no formal lease agreement for the Companys offices which are
  on a month to month basis for $2,000 per month.

During
  the year ended June 30, 2003, the Company capitalized $51,600 for Telecommunication
  Equipment.

On
  August 15, 2001, Reward Enterprises, Inc. acquired Q Presents, Inc. with the
  issuance of 6,000,000 shares of common stock in exchange for all of the common
  stock of Q Presents, Inc. This transaction had an accounting date of August
  31, 2001, which was the date that the transaction was final. The value of the
  stock issued at the fair market price of $0.35 per share was $2,100,000. The
  Company will periodically review this asset for possible impairment. At June
  30, 2003 it was determined the asset was impaired due to the decline in the
  Companys stock value, and a charge for the impairment of $2,100,000 was
  recorded under operating expenses on the Consolidated Statement of Operations
  for the year ended June 30,2003.

ITEM 3.        LEGAL PROCEEDINGS

The
  Company is not a party to any pending or threatened litigation and to its knowledge,
  no action, suit or proceedings has been threatened against its officers and
  its directors.

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

There
  were no matters submitted to a vote by security holders during the fourth quarter
  of the fiscal year covered by this report.

PART II

ITEM 5.        MARKET FOR COMMON EQUITY
  AND RELATED STOCKHOLDER MATTERS

The
  Common Shares of the Company are quoted on the NASD Over-The-Counter Bulletin
  Board. The OTCBB constitutes a limited and sporadic trading market and does
  not constitute an established trading market. There is no assurance
  that a regular trading market will be sustainable. A shareholder, may, therefore,
  be unable to resell the securities referred to herein should he or she desire
  to do so. Furthermore, it is unlikely that a lending institution will accept
  the Companys securities as pledged collateral for loans unless a regular
  trading market develops.

13

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At
  June 30, 2003, we had approximately 400 shareholders of record of our common
  stock, including shares held by brokerage clearing houses, depositories or otherwise
  in unregistered form. The beneficial owners of such shares are not known to
  us. Our company's securities are traded over-the-counter on the Bulletin Board
  operated by the National Association of Securities Dealers, Inc. under the symbol
  "RWDE". The table shows the high and low bid of our company's common stock as
  reported on the Nasdaq National Market for the periods indicated.

| | Quarter ended      |          |  |         | 
| | ------------------ | -------- |  | ------- | 
| | FYE 2002           | High Bid |  | Low Bid | 
| | September 30, 2001 | $0.85    |  | $0.15   | 
| | December 31, 2001  | $0.15    |  | $0.01   | 
| | March 31, 2002     | $0.01    |  | $0.001  | 
| | June 30, 2002      | $0.17    |  | $0.001  | 
| | FYE 2003           |          |  |         | 
| | September 30, 2002 | $0.10    |  | $0.01   | 
| | December 31, 2002  | $0.05    |  | $0.01   | 
| | March 31, 2003     | $0.01    |  | $0.001  | 
| | June 30, 2003      | $0.01    |  | $0.001  | 

The
  above over-the-counter market quotations reflect inter-dealer prices without
  retail mark-up, mark-down or commission and may not represent actual transactions.

There
  are no plans, proposals, arrangements or understandings with any person with
  regard to the development of a trading market in any of the Companys securities.

Dividends

We
  have not declared any cash dividends, nor do we intend to do so. We are not
  subject to any legal restrictions respecting the payment of dividends, except
  that they may not be paid to render us insolvent. Dividend policy will be based
  on our cash resources and needs and it is anticipated that all available cash
  will be needed for our operations in the foreseeable future.

SEC Rule 15g

Our
  Company's shares are covered by Section 15g of the Securities Act of 1933, as
  amended that imposes additional sales practice requirements on broker/dealers
  who sell such securities to persons other than established customers and accredited
  investors (generally institutions with assets in excess of $5,000,000 or individuals
  with net worth in excess of $1,000,000 or annual income exceeding $200,000 or
  $300,000 jointly with their spouses). For transactions covered by the Rule,
  the broker/dealer must make a special suitability determination for the purchase
  and have received the purchaser's written agreement to the transaction prior
  to the sale. Consequently, the Rule may affect the ability of broker/dealers
  to sell our securities and also may affect your ability to sell your shares
  in the secondary market.

14

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Section
  15g also imposes additional sales practice requirements on broker/dealers who
  sell penny securities. These rules require a one page summary of certain essential
  items. The items include the risk of investing in penny stocks in both public
  offerings and secondary marketing; terms important to in understanding of the
  function of the penny stock market, such as "bid" and "offer" quotes, a dealers
  "spread" and broker/dealer compensation; the broker/dealer compensation, the
  broker/dealers duties to its customers, including the disclosures required by
  any other penny stock disclosure rules; the customers rights and remedies in
  causes of fraud in penny stock transactions; and, the NASD's toll free telephone
  number and the central number of the North American Administrators Association,
  for information on the disciplinary history of broker/dealers and their associated
  persons.

Section 16(a)

Our
  officers, directors and holders of 10% or more of the Companys Common
  Stock have filed all Forms 3, 4 & 5.

Recent Sales of Unregistered Securities

The
  Company has 18,722,000 shares of Common Stock issued and outstanding as of June
  30, 2003. Of the 18,722,000 shares of the Companys Common Stock outstanding
  10,477,000 shares are freely tradable.

On
  December 04, 2000, the Company sold 10,200,000 shares of its common stock to
  Brian C. Doutaz (as to 10,000,000 shares) and to Robert Dinning (as to 200,000
  shares) at a price of $0.001. The shares which are legended under Rule 144 re-sale
  restrictions were issued pursuant to Rule 16(b) of the Securities Act of 1934.
  The 10,200,000 shares issued in these transactions were cancelled in accordance
  with the terms of the agreement to acquire Q Presents Inc.

On
  December 08, 2000, the Company filed an S-8 registration statement of the Reward
  Enterprises, Inc. 2001 Stock Option Plan to register up the granting of up to
  7,000,000 incentive stock option shares.

On
  January 3, 2001, Gerry Williams and Frank Rigney exercised an option on 1,600,000
  common shares at a price of $0.10 per share in lieu of a cash payment owing
  under certain Consulting Agreements. The debt was cancelled with the exercise
  of the option. On March 16, 2001, Gerry Williams and Frank Rigney exercised
  an option on 1,000,000 common shares at a price of $0.10. On April 23, 2001
  Brian C. Doutaz and Robert Dinning exercised an option on 630,000 common shares
  at a price of $0.10 per share in lieu of cash payment owing under certain Consulting
  Agreements; resale of these shares is governed by Rule 144. On April 30 and
  June 5 2001, Frank Rigney exercised options for a total of 225,000 common shares
  at a price of $0.25 per share. On June 5 2001 Gerald Williams exercised options
  for a total of 100,000 common shares at a price of $0.25 per share. All shares
  so issued were issued under Rule 16(b) of the Securities Act of 1934.

In
  August 2001, the Company issued 6,000,000 shares of common stock in its acquisition
  of Q Presents Inc. The shares which are legended under Rule 144 re-sale restrictions
  were issued pursuant to Rule 16(b) of the Securities Act of 1934.

Between
  October 2001 and June 2002, Frank Rigney exercised options for a total of 272,000
  common shares at a price of $0.25 per share, and Robert Dinning exercised options
  for a total of 200,000 common shares of which 100,000 were at a price of $0.10
  per share and 100,000 were at a price

15

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of $0.25 per share and Brian Doutaz exercised options for
  a total of 100,000 shares at a price of $0.10 per share. All shares so issued
  were issued under Rule 16(b) of the Securities Act of 1934.

As
  of the date hereof, no further options have been exercised.

In
  December 2001 the Company issued 890,000 shares of its common stock to twelve
  investors in consideration of $890 and between January and June 2002, the Company
  issued an additional 1,026,667 shares of common stock to eleven investors in
  consideration of $84,000. Two of these investors were granted warrants to purchase
  25,000 and 5,000 shares of the companys common stock at $0.25 per share.
  The shares which are legended under Rule 144 re-sale restrictions were issued
  pursuant to Rule 16(b) of the Securities Act of 1934.

In
  April 2002, the Company issued 2,945,000 shares of common stock to an officer
  and consultant of the Company for prior services rendered in the amount of $14,725.
  The shares which are legended under Rule 144 re-sale restrictions were issued
  pursuant to Rule 16(b) of the Securities Act of 1934.

Between
  July and September 2002, the Company issued an additional 293,333 shares of
  common stock to in consideration of $38,500. The shares which are legended under
  Rule 144 re-sale restrictions were issued pursuant to Rule 16(b) of the Securities
  Act of 1934.

In
  October 2002, the Company issued 725,000 shares of common stock to a consultant
  and officer of the Company for prior services rendered in the amount of $7,250.
  The shares which are legended under Rule 144 re-sale restrictions were issued
  pursuant to Rule 16(b) of the Securities Act of 1934.

ITEM 6.        MANAGEMENTS DISCUSSION
  AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

General Overview

Reward Enterprises, Inc. (the "Corporation" or Reward)
  was incorporated in December, 1997 as Sports Entertainment Productions Inc.
  to pursue opportunities around the world in the Internet based entertainment
  industry. The name was changed to Reward Enterprises, Inc. in July 1998. Its
  main objective has been to develop a profitable "Entertainment Mall" through
  an e-commerce secure "portal." Entertainment options offered would be videos,
  CDs, virtual casino-style games, free bingo, dice and specialty and interactive
  video games.

In early 2001, the Corporation became aware that it would
  likely not be able to continue with its efforts to develop an Internet gaming
  site, primarily as a result of the poor financial conditions in the marketplace.
  The Board of Directors then commenced a search for a new opportunity that would
  allow the Corporation to remain active in the Internet sector on a profitable
  basis. Q Presents, Inc., a Santa Monica, California (hereinafter QP)
  based private corporation, provided an ideal match which on April 12, 2001 resulted
  in an Acquisition Agreement between Reward and QP. In exchange for all the shares
  of QP, Reward would issue to QP shareholders a total of 6,000,000 shares of
  its common stock. Immediately following the issuance of the acquisition shares,
  the control block of 10,200,000 common stock shares owned by Mr. Robert Dinning
  and Mr. Brian Doutaz would be cancelled. The Acquisition

16

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Agreement was approved by the shareholders of both companies
  in August, 2001. The control block of 10,200,000 owned by Mr. Robert Dinning
  and Mr. Brian Doutaz was subsequently cancelled and the Corporation issued 6,000,000
  shares to QP shareholders. The Companys definitive proxy statement filed
  with the SEC on August 8, 2001 and its Form 8-K filed with the SEC on August
  20, 2001 are incorporated herein by reference.

Management made the decision to balance its technology-based
  business model with a complimentary non-technical or Old Economy
  based business. Management made the decision to license the rights to an Old
  Economy business as opposed to creating one internally. New management
  has recently entered into the specialized international communications market
  to provide international voice, Internet access and global network services
  to corporate clients, communication carriers and Internet service providers.
  The Company will utilize the web-based platform that was originally intended
  as an event registration and automation solution for its telecommunication business.

RESULTS OF OPERATIONS

Results of Operations - Period From July 01, 2002 to June 30, 2003

REVENUES:
  There were no revenues in the year ending June 30, 2003 as the Company has not
  commenced operations as of the date hereof other than an undertaking of a market
  analysis and development of strategic relationships in telecommunications. The
  Company does not anticipate that it will generate any material revenues from
  operations until at least the second quarter of 2003  2004.

EXPENSES:
  During the year ending June 30, 2003, the Company incurred expenses of $2,396,881
  as compared with $236,231 in the preceding year.

A summary of these expenditures is as follows:

|Consulting Fees               | $143,500 versus $0        
|----------------------------- | --------------------------
|Legal and Professional fees   | $17,883 versus $61,445    
|Research and Development      | $4,705 versus $83,330     
|Office and Administration     | $87,628 versus $60,053    
|Travel and promotion          | $13,969 versus $11,807    
|Depreciation and Amortization | $29,196 versus $19,596    
|Loss on Impairment of Asset   | $2,100,000 versus $0      
|Total                         | $2,396,881 versus $236,231

The Corporation continues to carefully control its expenses,
  and has limited its debt outstanding as it moves forward with the implementation
  of its business plan. The Corporation has no employees at the present time and
  engages personnel through consulting agreements where necessary as well as outside
  attorneys, accountants and technical consultants. All previous consulting agreements
  have been terminated and there are no contingent liabilities resulting from
  this cancellation.

17

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LIQUIDITY AND CAPITAL RESOURCES

The Corporation has to date, financed its development stage
  by the sale of common stock.

At June 30, 2003, the Corporation had 18,722,000 shares of
  common stock outstanding. During the fourth quarter ended June 30, 2003, the
  Corporation issued 293,333 shares for $38,500. Cash on hand at June 30, 2003
  was $12,835 which is held at the Bank of America in Los Angeles, California.

The Company has entered into revenue sharing agreements with
  five individuals surrounding the Companys International Long Distance
  (ILD) telecommunications operation which delivers long distance
  telephone service from wholesale telecommunication operators between the United
  States and India. The individuals advanced $175,000 against future revenues
  that would be generated by the ILD. The Company agreed to split the net profits
  of the IDL on a 50-50 basis during the first twelve months of ILD being in operation.
  Profits are defined as gross revenue from wholesalers less termination costs
  (the cost to terminate a telephone call in India charged by the India telephone
  company), less the Companys India partners share of 30% and other expenses
  that approximate $20,000 a month. The maximum amount that the investors were
  to realize was a 100% return on investment. These advances were booked for financial
  statement purposes as Deferred Revenue on the balance sheet of the Company as
  of June 30, 2003 and will be recognized as revenue by the Company over twelve
  months once successful operation has begun. The Company is still working with
  its Indian partners and expects revenues to begin in the first calendar quarter
  of 2004.

On October 1, 2003, the Company entered into a promissory
  note for monies received in the amount of $10,000. The note is due and payable
  on November 1, 2003 at the rate of 12% interest per month with an administrative
  fee of $1,400 for a total due of $11,500.

The Corporation recognizes that it will continue to need additional
  cash during the next twelve months. There is no assurance that the Corporation
  will be able to obtain additional capital as required, or obtain the capital
  on terms and conditions acceptable to it.

The Corporation does not have sufficient cash to finance its
  operations at this stage of its development and is seeking additional financing
  on acceptable terms and conditions.

The Corporation has no current plans for research and development
  nor does the Corporation plan on retaining or hiring any additional employees
  or consultants. There are no plans by the Corporation to purchase or to sell
  any fixed assets.

INFLATION

Inflation has not been a factor during the year ending June
  30, 2003. While inflationary forces are moderately higher than in 2002, the
  actual inflation is immaterial and is not considered a factor in any contemplated
  capital expenditure program.

Quantitative and Qualitative Disclosures About Market Risks

Our
  financial results are quantified in U.S. dollars and a majority of our obligations
  and expenditures with respect to our operations are incurred in U.S. dollars.
  Although we do not believe we currently have any materially significant market
  risks relating to our operations resulting from foreign

18

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exchange rates, if we enter into financing or other business
  arrangements denominated in currency other than the U.S. dollar, variations
  in the exchange rate may give rise to foreign exchange gains or losses that
  may be significant.

We
  currently have no material long-term debt obligations. We do not use financial
  instruments for trading purposes and we are not a party to any leverage derivatives.
  In the event we experience substantial growth in the future, our business and
  results of operations may be materially affected by changes in interest rates
  and certain other credit risk associated with its operations.

Acquisition of Plant and Equipment

We
  do not own any plant facilities or equipment. The Company does not intend to
  purchase a plant or significant equipment.

During
  the year ended June 30, 2003, the Company capitalized $51,600 for telecommunications
  equipment relating to the operation of its international long distance venture.

ITEM 7.        FINANCIAL STATEMENTS

Reference is made to the financial statements, the reports
  thereon, the notes hereto, and supplementary data commencing at page F-1 of
  this Form 10-KSB, which financial statements, reports, notes, and data are incorporated
  herein by reference.

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

None

ITEM 8A.        Controls and Procedures

Our management, which includes our Chief Executive Officer
  and Chief Financial Officer, has conducted an evaluation of the effectiveness
  of our disclosure controls and procedures (as defined in Rule 13(a)  14(c)
  promulgated under the Securities Exchange Act of 1934) as of a date (the
  Evaluation Date) within 90 days prior to the filing date of this report.
  Based upon that evaluation, our Chief Executive Officer and Chief Financial
  Officer concluded that our disclosure controls and procedures are effective
  for timely gathering, analyzing and disclosing the information we are required
  to disclose in our reports filed under the Securities Exchange Act of 1934,
  as amended. There have been no significant changes made in our internal controls
  or in other factors that could significantly affect our internal controls subsequent
  to the Evaluation Date.

19

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PART III

ITEM 9.        DIRECTORS,
  EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE WITH SECTION 16(a)
  OF THE EXCHANGE ACT.

Edward Withrow III (age 39) Chairman of the Board and CEO (as of August 2001), Member of Audit Committee

Mr.
  Withrow has been an entrepreneur the majority of his professional career spanning
  fourteen years. The majority of the years were spent raising capital and understanding
  the winning formulas for success in the marketplace. In 2001 Mr. Withrow founded
  Q Presents, Inc, a media and communications holding company whose strategic
  plan was to acquire, streamline, upgrade and consolidate existing companies
  who had found themselves on the wrong side of the technology implosion. Q Presents
  merged with Reward Enterprises, Inc in March 2001. In 1999 Mr. Withrow co-founded
  Simplyfamily.com, an integrated vertical commerce community targeting the family.
  Simplyfamily.com is presently one of the largest independent family based communities
  operating on the Internet. In 1995 Mr. Withrow co-founded Family Store Entertainment
  that successfully produced and distributed high-end educational entertainment
  product for children ages 2 years to 10 years old. Family Store Entertainment
  was one of the first companies to penetrate the sell thru video market by way
  large grocery store chains such as Albertsons, Safeway, Ralphs and Kroger.
  In 1993 Mr. Withrow was a principal of The Withrow Group a Los Angeles based,
  Entertainment Company that developed and packaged filmed entertainment. In 1991
  Mr. Withrow co-founded and was a principal in Box Office Partners, a foreign
  distribution and acquisition fund. Mr. Withrow spearheaded the capitalization
  of the funds, Box Office Partners 1, 2, and 3. Prior to this Mr. Withrow worked
  for a number of financial institutions; Paine Webber, Sheffield Partners, Common
  Market Exchange in both, a retail and investment banking position. Mr. Withrow
  sits on a number of technology and media company advisory boards. Mr. Withrow
  is Chairman and co-founder of Save Our Children, Inc a, non-profit child abuse
  awareness foundation. He is an active member of Planet Hope, Inc a foundation
  that addresses the needs of homeless children and women and whose honorary chairperson
  is Lee Iacocca. Mr. Withrow attended the University California Santa Barbara.

Ron Hall (age 45)- Director (as of August 2001), Member of Audit Committee

Ron
  Hall is an Executive Vice President and Co-Founder of DigitalGen, a developer
  of computer search engine technology and the successful online shopping portal
  BrandNameStores.com. In his current position, Mr. Hall leads BrandNameStores.coms
  efforts to attract international vendors to the portal. Prior to setting up
  DigitalGen in 1998, Mr. Hall served as regional manager of IDG, the worlds leading
  computer book and magazine publisher. In his six years with IDG, Mr. Hall established
  himself as the top revenue producer responsible for more than $9 million of
  revenue annually. During his tenure with IDG, Mr. Hall was responsible for the
  acquisition of many major corporate accounts including Hewlett Packard, Sun
  Microsystems, Intel, Novell and Oracle. From 1990 to 1992, Mr. Hall was a Vice-President
  with The Stillman Group responsible for representing nine publications in the
  competitive advertising marketplace. From 1984 to 1990, Mr. Hall was a district
  director with the copier company Pitney Bowes, Inc.

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Joseph C. Vigliarolo (age 42)-Chief Financial Officer (as of July, 2002)

Joseph
  C. Vigliarolo was a Managing Director of First Interstate Capital, Inc, a financial
  service advisory company. Before joining First Interstate Capital, Mr. Vigliarolo
  co-founded and was a principal in WEBusinessUSA Inc. a business to business
  Internet technology company which is a holder of six patents. From 1996 to 1998
  Mr. Vigliarolo served as Chief Executive Officer and President of Airstar Technologies,
  Inc. a subcontractor for Sprint to provide telecommunication services to military
  bases throughout the United States. While at Airstar, Mr. Vigliarolo led a $42
  million debt refinancing and raised equity capital that was necessary to build
  out the infrastructure at the military bases to provide telephone services to
  the single service barracks. The subcontract duties included switch procurement
  and installation, running of cable throughout the base to the barracks and wiring
  the barracks rooms as well as the provisioning of local trunks. On going duties
  included maintenance of service at the base, technical and customer service
  and administration. Prior to working at Airstar, Mr. Vigliarolo had broad managerial
  and financial experience in private, public and professional corporations. He
  was a licensed C.P.A. in New York with public accounting experience as a Manager
  at Ernst and Young. Mr. Vigliarolo graduated Boston College in 1983 with a degree
  in Accounting.

ITEM 10.        Executive Compensation

Summary Compensation Table

The table below shows, for the last fiscal year (and third
  full fiscal year in the Company's history), compensation paid to the Company's
  President and the most highly paid executive officer serving at fiscal year
  end. For the fiscal year ended June 30, 2001, the Company had two executive
  officers, which received compensation under certain consulting agreements dated
  March 15, 1999 and May 1, 1999.

The following table sets forth compensation information for our fiscal period ended June 30, 2003

Summary Compensation Table

|                   |      |                     |        |              | Long Term Compensation |               
|------------------ | ---- | ------------------- | ------ | ------------ | ---------------------- | --------------
|                   |      | Annual Compensation | Awards |              | Payouts                |               
|(a)                | (b)  | (c)                 | (d)    | (e)          | (f)                    | (g)           
|Name and Principal | Year | Salary              | Bonus  | Other        | Restricted             | Securities    
|Position [1]       |      | ($)                 | ($)    | Annual       | Stock                  | Underlying    
|                   |      |                     |        | Compensation | Award(s)               | Options / SARs
|                   |      |                     |        | ($)          | ($)                    | (#)           
|                   |      |                     |        |              |                        |               
|Edward Withrow     | 2003 | 81,000              | 0      | 0            | 0                      | 0             
|Chief Executive    | 2002 |                     |        |              |                        |               
|Officer, President |      |                     |        |              |                        |               
|Director           |      |                     |        |              |                        |               
|                   |      |                     |        |              |                        |               
|Joseph Vigliarolo, | 2003 | 53,500              | 0      | 0            | 0                      | 0             
|CFO                |      |                     |        |              |                        |               
|                   |      |                     |        |              |                        |               
|Ron Hall, Director | 2002 | 0                   | 0      | 0            | 0                      | 0             

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[1] 	All compensation received by the officers and directors has been disclosed.

Stock Option Plan

In
  1998, 1999 and 2001, the Board of Directors of the Company approved the 1998,
  1999 and 2000 Stock Option Plan respectively (the "Plans"). The Plans provide
  for the grant of incentive and non-qualified options to purchase up to 9,000,000
  shares of common stock to officers, directors, employees, and other qualified
  persons that may be selected by the Plan Administrator (which currently is the
  Board of Directors). The Plan is intended to help attract and retain key Company
  employees and any other persons that may be selected by the Plan Administrator
  and to give those persons an equity incentive to achieve the objectives of the
  Company's shareholders.

Incentive
  stock options may be granted to any individual who, at the time of grant, is
  an employee of the Company or any related corporation. Non-qualified stock options
  may be granted to employees and to any other persons that may be selected by
  the Plan Administrator. The Plan Administrator fixes the exercise price for
  options in the exercise of its sole discretion, subject to certain minimum exercise
  prices in the case of incentive stock options. Options will not be exercisable
  until they vest according to a vesting schedule specified by the Plan Administrator
  at the time of grant of the option.

Options
  are non-transferable except by will or the laws of descent and distribution.
  With certain exceptions, vested but unexercised options terminate on the earlier
  of: (i) the expiration of the option term specified by the Plan Administrator
  at the date of grant (generally 10 years; or, with respect to incentive stock
  options granted to greater-than 10% shareholders, a maximum of five years);
  (ii) the date of an employee optionee's termination of employment or contractual
  relationship with the Company or any related corporation for cause; (iii) the
  expiration of three months from the date of an optionee's termination of employment
  or contractual relationship with the Company or any related corporation for
  any reason, other than cause, death or disability; or (iv) the expiration of
  one year from the date of death of an optionee or cessation of an optionee's
  employment or contractual relationship by death or disability. Unless accelerated
  in accordance with the Plan, unvested options terminate immediately on termination
  of employment of the optionee by the Company for any reason whatsoever, including
  death or disability.

Option Grants In The Last Fiscal Year

None

Aggregated Option Exercises In Last Fiscal Year And Fiscal Year-End Option Values

None

Report of the Board of Directors on Executive Compensation

During
  1999, the Board of Directors was responsible for establishing compensation policy
  and administering the compensation programs of the Company's executive officers.

The
  amount of compensation paid by the Company to each of its directors and officers
  and the terms of those persons' employment is determined solely by the Board
  of Directors, except as otherwise

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noted below. The Company believes that the compensation paid
  to its directors and officers is fair to the Company.

In
  the past, Gerald W. Williams, the former President, has negotiated all executive
  salaries on behalf Of the Company. The Board of Directors believes that the
  use of direct stock awards is at times appropriate for employees, and in the
  future intends to use direct stock awards to reward outstanding service to the
  Company or to attract and retain individuals with exceptional talent and credentials.
  The use of stock options and other awards is intended to strengthen the alignment
  of interests of executive officers and other key employees with those of the
  Company's stockholders.

Compensation of Chief Executive Officer

Gerald
  W. Williams, former President, received compensation as a consultant for his
  services under a consulting agreement between the Company and Mr. Williams dated
  March 15, 1999.

Mr.
  Williams received two options to acquire an aggregate of 1,000,000 shares of
  the Company's common stock in the previous fiscal year ended June 30, 1999.
  Mr. Williams resigned as a director and as President on December 08, 2000. His
  Consulting Agreement was mutually cancelled on October 31, 2001 For the fiscal
  year ending June 30, 2002, Mr. Williams will not be entitled to receive further
  options to purchase common stock of the Company under the Company's 1998, 1999
  and 2000 Stock Option Plans.

Brian
  C. Doutaz became President of the Company on December 08, 2001 and received
  compensation as a consultant for his services under a consulting agreement between
  the Company and Mr. Doutaz dated May 01, 1999 for the period July 01 to October
  31, 2000.

Mr.
  Doutaz received two options to acquire an aggregate of 500,000 shares of the
  Company's common stock in the previous fiscal year ended June 30, 1999. Said
  Consulting Agreement was mutually cancelled on October 31, 2001 For the fiscal
  year ending June 30, 2002, Mr. Doutaz will not be entitled to receive further
  options to purchase common stock of the Company under the Company's 1998, 1999
  and 2000 Stock Option Plans.

In
  September 2001, the Companys Board of Directors approved consulting agreements
  with Edward W. Withrow III and Warren K. Withrow for consulting/employment agreements
  paying $3,500 cash per month and options to purchase up to 1,800,000 shares
  of common stock. These options were subsequently reduced to 700,000 shares in
  December 2001 and the cash value of services will be $10,000 per month, but
  will not begin until April 2002. The compensation under these agreements are
  currently being renegotiated and no compensation has been paid through June
  30, 2002. On May 16, 2002 Mr. Warren K. Withrow resigned as an officer and as
  a director of the Company.

The
  Company does not intend to pay its directors compensation for the fiscal year
  ended June 30, 2003. However, the Company may issue stock options to directors
  and executive officers in the fiscal year ending June 30, 2004.

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ITEM 11.        SECURITY OWNERSHIP OF
  CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The
  information set forth under the captions "Securities Ownership of Certain Beneficial
  Owners" and "Securities Ownership of Management" in the Proxy Statement to be
  filed with the Securities and Exchange Commission on Schedule 14A on or before
  November 06, 2001 is incorporated herein by reference.

The
  following table sets forth certain information concerning the number of shares
  of Common Stock owned beneficially as of June 30, 2003 by: (i) each person known
  to the Company to own more than five percent (5%) of any class of the voting
  securities; (ii) each of the directors; and (iii) all of the directors and officers
  as a group. Unless otherwise indicated, the shareholders listed possess sole
  voting and investment power with respect to the shares shown.

|                     | Amount and       |                                                        | Percent    
|-------------------- | ---------------- | ------------------------------------------------------ | -----------
|Name and Address     | Nature of        |                                                        | of Class[1]
|of Beneficial Owner  | Beneficial Owner | Position                                               |            
|                     |                  |                                                        |            
|Edward Withrow       | 5,545,000[2]     | President, Chief Executive Officer and a member of the | 30.13%     
|                     |                  | Board of Directors                                     |            
|                     |                  |                                                        |            
|Joseph Vigliarolo    | 1,000,000        | Chief Financial Officer                                | 5.34%      
|                     |                  |                                                        |            
|Warren Withrow [3]   | 3,100,000[2]     |                                                        | 16.84%     
|                     |                  |                                                        |            
|All officer and      | 6,545,000        |                                                        | 33.69%     
|Directors as a Group |                  |                                                        |            
|(1 Person)           |                  |                                                        |            

|[1] | Based on an aggregate 18,722,000 shares outstanding
        as of June 30, 2003.                                                                                                                                           
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                            
|[2] | Includes (i) options to acquire 500,000 shares of
        our common stock at $0.04 per share and (ii) options to acquire 200,000
        shares of our common stock at $0.10 per share, which are immediately exercisable.
|    |                                                                                                                                                                                                                            
|[3] | On May 16, 2002 Warren Withrow resigned from the
        Board of Directors and as an Officer of the Company.                                                                                                              

The
  Company may issue additional options to the Directors and Executive Officers
  in the fiscal year ending June 30, 2004.

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Section 16(a) Beneficial Ownership Reporting Compliance

Federal
  securities laws require the Company's directors and executive officers and persons
  who own more than 10% of the Company's common stock to file with the Securities
  and Exchange Commission initial reports of ownership and reports of changes
  in ownership of any securities of the Company.

To
  the Company's knowledge all of the Company's directors, executive officers,
  and greater-than-10% beneficial owners made all required filings on a timely
  basis for the fiscal year ended June 30, 2003.

ITEM 12.        Certain Relationships
  and Related Transactions

The
  information set forth under the caption "Certain Relationships and Related Transactions
  between Management and the Company" in the Proxy Statement to be filed with
  the Securities and Exchange Commission on Schedule 14A on or before November
  06, 2001 is incorporated herein by reference.

During
  2003, the Company paid only those salaries and other compensation to its Named
  Executive Officers as set forth under the heading "Executive Compensation."

ITEM 13.        EXHIBITS AND REPORTS
  ON FORM 8-K.

Reports on Form 8-K

During
  the fourth quarter of the fiscal year ended June 30, 2003 the Company filed
  no reports on Form 8-K.

Exhibits

The following exhibits are incorporated herein:

|31.1 | Certification of Chief
        Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant
        to Section 302 of the Sarbanes-Oxley Act of 2002.
|---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------
|31.2 | Certification of Chief
        Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant
        to Section 302 of the Sarbanes-Oxley Act of 2002.
|32.1 | Certification of Chief
        Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant
        to Section 906 of the Sarbanes-Oxley Act of 2002.
|32.2 | Certification of Chief
        Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant
        to Section 906 of the Sarbanes-Oxley Act of 2002.

ITEM 14.        PRINCIPAL ACCOUNTANT
  FEES AND SERVICES

Audit Fees

Williams & Webster, P.S., the Company's principal accountants,
  billed the Company $16,500 for the year ended June 30, 2003 and $22,805 for
  the year ended June 30, 2002 for professional services

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rendered by Williams & Webster, P.S. for the audit of
  the Company's annual financial statements and review of financial statements
  included in the Company's Forms 10-Q and services normally provided by Williams
  & Webster, P.S. in connection with statutory and regulatory filings or engagements
  for those fiscal years.

Audit-Related Fees

For the years ended June 30, 2003 and June 30, 2002, Williams
  & Webster, P.S. did not provide the Company with any services for assurance
  and related services that were not are reasonably related to the performance
  of the audit or review of the Company's financial statements and are not reported
  above under "--Audit Fees."

Tax Fees

For the years ended June 30, 2003 and June 30, 2002, Williams
  & Webster, P.S. billed the Company $ --0-- and $ 1,225, respectively, for
  professional services for tax compliance, tax advice, and tax planning.

All Other Fees

For the years ended June 30, 2003 and June 30, 2002, Williams
  & Webster, P.S. did not bill the Company for products and services other
  than those described above.

Audit Committee Pre-Approval Policies

The audit committee currently does not have any pre-approval
  policies or procedures concerning services performed by Williams & Webster,
  P.S. All the services performed by Williams & Webster, P.S. that are described
  above were pre-approved by the audit committee. Less than 50% of the hours expended
  on Williams & Webster, P.S. engagement to audit the Company's financial
  statements for the fiscal years ended June 30, 200 and 2002 were attributed
  to work performed by persons other than Williams & Webster, P.S.s
  full-time, permanent employees.

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SIGNATURES

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

Dated
  this 15th day of December, 2003.

| | REWARD ENTERPRISES, INC.
| | ------------------------
| |                         
| | BY:                     
| |                         

In
  accordance with the Exchange Act, this report has been signed below by the following
  persons on behalf of the registrant and in the capacities and on the dates indicated.

|/s/ Edward Withrow    |                                       |                  
|--------------------- | ------------------------------------- | -----------------
|Edward Withrow        | Chief Executive Officer, and Director | December 15, 2003
|                      | (Principal Executive Officer)         |                  
|/s/ Ron Hall          |                                       |                  
|Ron Hall              | Secretary and Director                | December 15, 2003
|                      |                                       |                  
|/s/ Joseph Vigliarolo |                                       |                  
|Joseph Vigliarolo     | Chief Financial Officer               | December 15, 2003
|                      | (Principal Financial Officer)         |                  

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