UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                  FORM 10-KSB

[X]   ANNUAL REPORT UNDER SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934

                    For the fiscal year ended June 30, 2004

[_]   TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
      OF 1934 For the transition period from ______________ to ______________

                       Commission file number: 001-15337

                               RADIX MARINE, INC.
           (Exact name of small business as specified in its charter)

                         9119 Ridgetop Blvd. Suite 260
                              Silverdale, WA 98383
                                 (360) 692-6446
                     Address of Principal Executive Office

            Nevada                                      84-0503585
    (State of Incorporation)                 (IRS Employer Identification #)


Securities registered under Section 12(b) of the Exchange Act: None

Securities registered under Section 12(g) of the Exchange Act: Common Stock, par
value $.001 per share

[X] Check whether the issuer (1) filed all reports require to be filed by
Section 13 or 15(d) if 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.

[_] Check if disclosure of delinquent filers in response to Item 405 of
Regulations SB is not contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10KSB
or any amendment to this Form 10-KSB.

Issuers revenues for its most recent fiscal year: $279,427

The number of shares outstanding of the Registrant's common stock as of June 30,
2004 was 65,895,149

Transitional Small Business Disclosure Format: [_] YES  [X] NO

<PAGE>

                                     PART I

Certain  statements  contained in this Form 10-KSB  constitute  "forward-looking
statements"  within the meaning of Section 27A of the Securities Act of 1933, as
amended  (the  "Securities  Act"),  and Section 21E of the Exchange  Act.  These
statements,  identified  by  words  such  as  "plan",  "anticipate,"  "believe,"
"estimate," "should," "expect" and similar expressions, include our expectations
and objectives  regarding our future financial  position,  operating results and
business strategy. These statements reflect the current views of management with
respect to future  events  and are  subject  to risks,  uncertainties  and other
factors  that may cause our actual  results,  performance  or  achievements,  or
industry  results,  to be  materially  different  from  those  described  in the
forward-looking statements. Such risks and uncertainties include those set forth
under the caption  "Management's  Discussion  and Analysis or Plan of Operation"
and   elsewhere  in  this  Form  10-  KSB.  We  do  not  intend  to  update  the
forward-looking  information to reflect actual results or changes in the factors
affecting such forward-looking information.

ITEM 1.    DESCRIPTION OF BUSINESS

History

      Radix Marine, Inc. (RDXM) was initially formed under the laws of the State
of Colorado as Modern MFG Services,  Inc. on September 30, 1958. We subsequently
entered into a migratory merger and whereby we were  reincorporated in the State
of Nevada. Our name was changed from Modern MFG Services,  Inc. in March of 2003
to Radix Marine,  Inc. in keeping with our new focus on the marine  industry and
we  acquired  our  wholly-owned   subsidiary,   Integrated   Maritime  Platforms
International,  Inc.  ("Integrated"),  a  Washington  Corporation.  The  current
Articles of  Incorporation  of the  Company  authorize  it to issue  250,000,000
shares of common stock and 25,000,000  shares of "blank check preferred  stock".
Pursuant to our definitive  proxy statement filed with the SEC on June 28, 2004,
our  shareholders   approved  an  amendment  to  the  company's  Certificate  of
Incorporation  to increase the number of  authorized  shares from  75,000,000 to
250,000,000 as required by a Securities  Purchase Agreement we entered into with
an  accredited  investor  on  March  17,  2004,  for  the  sale of  $300,000  in
convertible debentures and warrants to buy 3,000,000 shares of our common stock.

      RDXM had  approximately  2020 shareholders and 65,895,149 shares of common
stock issued and outstanding as of June 30, 2004.

      The RDXM  common  stock is traded on the NASDAQ  Bulletin  Board under the
symbol "RDXM".

      The Company has a June 30th fiscal year end.

GENERAL

      We are a development stage company that focuses,  through our wholly-owned
subsidiary,  on the research,  design,  engineering and construction of maritime
craft  for port and  homeland  security  as well as  recreational  purposes.  We
presently  offer  manned  patrol  and  recreational  craft  and  are  part  of a
consortium that is developing an unmanned  surface vehicle for the United Stated
Navy.

UNMANNED CRAFT

      As part of the Unmanned Surface Vehicle  Consortium,  we have entered into
an agreement with the Naval Undersea  Warfare  Center,  a division of the United
States Government, for the research and development of a undersea warfare combat
vehicle prototype. The consortium also includes Northrop Grumman Corporation and
Raytheon  Company.  The Consortium,  through the Spartan Undersea Warfare Combat
Vehicle  Program,  has agreed to commence  the  research  and  development  of a
deployable,  off board under water warfare combat  vehicle.  The aspects of this
agreement  require that the vehicle be able to operate on an unmanned  basis, is
reconfigurable  for several uses and has minimal impact on its host ship. We are
entitled to patent all inventions  developed by our company,  subject to various
restrictions,  and  we  are  also  entitled  to  a  non-exclusive  royalty-free,


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<PAGE>

worldwide license for all patents developed by the government in connection with
this project.  In consideration for our services pursuant to this agreement,  we
are entitled to a fee as well as to paid  expenses.  To date, we have  developed
the  Odyssey 11 Meter  Unmanned  Surface  Vehicle.  The  Odyssey is  designed to
perform intelligence, surveillance and reconnaissance missions by providing data
for force protection, force security and advanced reconnaissance. The Odyssey is
35 feet long and has a maximum speed of 40 knots on a flat surface.  The Odyssey
minimizes manpower requirements while incorporating stealth technologies.

      We  have  also  entered  into  an  agreement  with  Science   Applications
Corporation, a company engaged in telecommunications and systems integration, in
connection with the development of the Unmanned  Harbor  Security  Vehicle.  The
Unmanned Harbor Security Vehicle has several capabilities including:

      o     all weather surveillance;

      o     covert craft and swimmer detection;

      o     mine detection;

      o     port security; and

      o     non-lethal response.

MANNED CRAFT

      We presently have  developed  several types of manned marine craft for use
in  port  and  homeland   security.   One  of  our  principal  products  is  the
GB-Challenger  Class, which is a modular-concept  high-speed work craft built on
an  aluminum,  stainless  steel,  and  rubber  platform.   Challenger  is  fast,
maneuverable,  and competent in coastal waters, rivers, and open seas. A variety
of drop-in  modules  allow  Challenger  to adapt to a wide range of military and
commercial  missions.  All of the  GB-Challenger  craft have been designed to be
reconfigurable  platforms  which will accept mission  modules that plug into the
front deck section of the basic craft. Available mission modules range from dive
salvage, drug interdiction,  environmental  response, and firefighting,  to mine
countermeasures and weapons deployment.  The Challenger's drop-in modules can be
installed in minutes with a simple  dock-side lift. The  GB-Challenger  used two
660 HP model 3196 DITA Caterpillar  engines,  supported by a worldwide parts and
maintenance  network and twin 20-inch North American Marine Jet water propulsion
units

      In connection with the potential sale of our manned craft, in August 2003,
we have entered into a  Co-Marketing  Agreement  with Norsco  Marine  whereby we
shall sell and lease  certain  products  to  customers  provided  as a result of
Norsco  Marine's  marketing and sales efforts.  Together with Norsco Marine,  we
currently are offering the following products:

      o     Fisheries Patrol Craft - this craft is 32' by 11' and is optimal for
            local enforcement officials. This vessel can be used for diving with
            easy  access over the stern or side and is powered by twin Volvo gas
            inboard/outboards.

      o     Landing  Craft - this craft is 29' by 10' and is  utilized in remote
            areas that lack docks or floats for beach  access.  It is powered by
            twin Yamaha 225hp four stroke engines.

      o     Military/Patrol  Craft - this is a 32' by 10' aluminum  patrol craft
            that is powered by twin 420hp tourbocharged caterpillar engines.

      o     Sportfishing  Craft - We offer a variety of sportfishing  craft. The
            first type is a 28'  recreational  vehicle that seats six inside its
            cabin that is generally used for sportfishing or charter operations.
            This   vessel   can   either   be  build   with  a  diesel   or  gas
            inboard/outboard  engine or  outboard  engine.  We also  offer a 28'
            V-berth  sportfishing  craft that is built to specific  designs.  In
            addition,  we offer a 22' center consol  sportfishing  craft that is
            constructed of aluminum.  Finally, we are presently developing a 25'
            V-berth  sportfishing that can be customized to various needs and is
            powered by an inboard/outboard gas engine.


                                       3
<PAGE>

PLAN OF OPERATION

      It is our  intent to  develop  and  market a  complete  line of manned and
unmanned marine craft for the domestic and international market. In addition, we
plan to seek out the  acquisition of new business  opportunities  and/or related
technologies  which will enhance  shareholder  value. We intend to seek business
opportunities  demonstrating  the  potential of  long-term  growth as opposed to
short-term earnings.  We have limited funds with which to pursue the acquisition
of new business opportunities,  as we have generated losses since our inception.
In our pursuit of acquiring new business  opportunities,  we anticipate  needing
additional  funding to cover legal and accounting  expenses,  in addition to the
general business and operating  expenses we incur as a result of maintaining our
business. Given our current financial situation, the acquisition and development
of the  stated  marine  technologies  cannot be  achieved  without  an influx of
capital.  Sufficient  funds cannot be generated  from the existing  contracts at
this  time.  Any  additional  funding  that we need to  acquire  a new  business
opportunity may come through private  placements,  public  offerings and/or bank
financing.

COMPETITION

      We are faced  with  significant  competition  in the marine  industry  for
manned craft and  competition in the unmanned craft area is starting to develop.
Recent  emphasis  on  Homeland  Security  initiatives,  coupled  with our unique
position on the Spartan program,  has provided new opportunities for our company
in the  unmanned  craft  area.  However,  despite  our  position  in the Spartan
program,  the market for marine  products  for  homeland  security  has recently
started to develop and has become  intensely  competitive,  rapidly evolving and
subject  to rapid  technological  change.  We  expect  competition  to  persist,
intensify  and  increase  in  the  future.  Such  competition  could  materially
adversely affect our business, operating results or financial condition.

POTENTIAL ACQUISITION

      In July 2003, we signed a Letter of Intent for the partial  acquisition of
The Radix Ortega Group, a marine and environmental engineering firm based out of
Seattle,  Washington.  Radix Ortega  currently  has  contracts  with  Washington
State's  Department of  Transportation,  the Port of Seattle,  and the U.S. Navy
Engineering  Field  Activity   Northwest.   Our  work  with  the  Navy  involves
environmental  assessments  for marine facility  construction  projects at Naval
Shipyard  Puget Sound in  Bremerton,  Washington.  Radix Ortega also has a broad
base of existing commercial customers including the Bechtel Corporation, Bank of
America and the Puget Sound Energy

      Under the proposed terms of the acquisition,  we will acquire up to 40% of
Radix Ortega.  We will operate as a separate  business  unit,  with our own rate
structure. This approach positions our company to be more competitive on service
contracts, while leaving Integrated Maritime Platforms International,  Inc., our
wholly-owned  subsidiary,  to conduct the  higher-cost  research and development
tasks.

      This  acquisition  remains  pending until  financing is available to close
under the terms of the Letter of Intent.

EMPLOYEES

      As of October  15,  2004,  we have 8 full-time  employees  and 5 part-time
employees. As we expand, additional engineering, technical, and management staff
will be required.

SUBSIDIARIES

      Integrated   Maritime   Platforms   International,   Inc.,   a  Washington
corporation, is a wholly-owned subsidiary of Radix Marine, Inc.


                                       4
<PAGE>

PATENTS AND TRADEMARKS

      We do not own any patent or trademark.


                                  RISK FACTORS

      Radix Marine is a development stage company with a high degree of risk. If
any of the following risks actually occur, our business,  operating  results and
financial condition could be harmed and the value of our stock could go down.

RISKS RELATING TO OUR BUSINESS:

WE HAVE A HISTORY OF LOSSES WHICH MAY CONTINUE,  REQUIRING US TO SEEK ADDITIONAL
SOURCES OF CAPITAL WHICH MAY NOT BE AVAILABLE,  REQUIRING US TO CURTAIL OR CEASE
OPERATIONS.

      We incurred net losses of $1,727,335  for the year ended June 30, 2004 and
$1,229,796  for the year ended June 30, 2003.  We cannot  assure you that we can
achieve or sustain  profitability  on a quarterly or annual basis in the future.
If revenues grow more slowly than we anticipate, or if operating expenses exceed
our  expectations or cannot be adjusted  accordingly,  we will continue to incur
losses.  We will  continue  to  incur  losses  until  we are  able to  establish
significant  sales of our marine craft.  Our possible  success is dependent upon
the  successful  development  and marketing of our services and products,  as to
which there is no assurance.  Any future success that we might enjoy will depend
upon many  factors,  including  factors  out of our  control or which  cannot be
predicted at this time. These factors may include changes in or increased levels
of  competition,  including  the entry of additional  competitors  and increased
success  by  existing  competitors,  changes  in  general  economic  conditions,
increases  in  operating  costs,  including  costs of  supplies,  personnel  and
equipment,  reduced  margins caused by competitive  pressures and other factors.
These conditions may have a materially adverse effect upon us or may force us to
reduce or curtail operations.  In addition,  we will require additional funds to
sustain  and  expand  our  sales and  marketing  activities,  particularly  if a
well-financed  competitor emerges. Based on our current funding arrangement with
La Jolla, we do not anticipate that we will require additional funds to continue
our  operations  for the next  twelve  months.  In the event that our  financing
arrangement  with La Jolla is  terminated  or if we need  additional  financing,
there can be no  assurance  that  financing  will be  available in amounts or on
terms acceptable to us, if at all. The inability to obtain sufficient funds from
operations or external sources would require us to curtail or cease operations.

IF WE ARE UNABLE TO OBTAIN  ADDITIONAL  FUNDING OUR BUSINESS  OPERATIONS WILL BE
HARMED AND IF WE DO OBTAIN ADDITIONAL  FINANCING OUR THEN EXISTING  SHAREHOLDERS
MAY SUFFER SUBSTANTIAL DILUTION.

      Additional  capital may be required to effectively  support the operations
and to otherwise implement our overall business strategy.  However, there can be
no assurance  that  financing  will be  available  when needed on terms that are
acceptable to us. The inability to obtain  additional  capital will restrict our
ability to grow and may  reduce our  ability  to  continue  to conduct  business
operations.  If we are unable to obtain additional financing,  we will likely be
required to curtail our marketing and  development  plans and possibly cease our
operations.  Any additional equity financing may involve substantial dilution to
our then existing shareholders.

OUR INDEPENDENT  AUDITORS HAVE EXPRESSED  SUBSTANTIAL DOUBT ABOUT OUR ABILITY TO
CONTINUE  AS A GOING  CONCERN,  WHICH MAY  HINDER OUR  ABILITY TO OBTAIN  FUTURE
FINANCING.

      In their report dated October 12, 2004, our  independent  auditors  stated
that our  financial  statements  for the year ended June 30, 2004 were  prepared
assuming that we would continue as a going concern. Our ability to continue as a
going  concern is an issue  raised as a result of a loss for the year ended June
30, 2004 in the amount of $1,727,335 and  stockholders  deficit of $76,779 as of
June 30, 2004. We continue to experience net losses. Our ability to continue as


                                       5
<PAGE>

a going  concern is subject to our  ability to generate a profit  and/or  obtain
necessary funding from outside sources,  including obtaining  additional funding
from the sale of our securities,  increasing sales or obtaining loans and grants
from various financial institutions where possible. Our continued net losses and
stockholders'  deficit  increases the difficulty in meeting such goals and there
can be no assurances that such methods will prove successful.

THE EFFECT OF  INTEREST  RATES AND FUEL  PRICES  MAY HAVE A  NEGATIVE  IMPACT ON
DEMAND  FOR  MARINE  PRODUCTS  AND,  AS A  RESULT,  A  NEGATIVE  IMPACT  ON  OUR
OPERATIONS.

      Marine craft in general are often financed,  and higher interest rates may
retard demand for these products.  In addition,  marine  businesses are somewhat
fuel-cost-sensitive,  and higher  fuel costs can also hurt  demand.  If interest
rates and fuel costs  continue to rise,  then our  operations  may be negatively
impacted.

IF WE ARE UNABLE TO  COMPETITIVELY  PRICE OUR  PRODUCTS,  THEN OUR RESULTS  FROM
OPERATIONS WILL BE NEGATIVELY IMPACTED.

      Introduction  of lower-cost  alternatives  by other companies can hurt our
competitive  position.  We  hope  that  our  efforts  toward   cost-containment,
commitment to quality products, and excellence in operational  effectiveness and
customer  service are designed in part to offset this risk.  If we are unable to
control costs or if are competitors  are better able to control costs,  then our
results from operations will be negatively impacted.

AS PART OF AN INDUSTRY  CONSORTIUM,  WE HAVE ENTERED INTO AN AGREEMENT  WITH THE
UNITED STATES  GOVERNMENT  THROUGH THE NAVAL UNDERSEA WARFARE CENTER TO RESEARCH
AND DEVELOP,  AS PART OF THE CONSORTIUM AN UNMANNED SURFACE VEHICLE AND, IF THIS
AGREEMENT WERE TO BE TERMINATED FOR ANY REASON, OUR RESULTS OF OPERATIONS MAY BE
SEVERALLY IMPACTED AND WE MAY BE FORCED TO CEASE OUR OPERATIONS.

      As part of the Unmanned Surface Vehicle  Consortium,  we have entered into
an agreement with the Naval Undersea  Warfare  Center,  a division of the United
States Government, for the research and development of a undersea warfare combat
vehicle prototype. The consortium also includes Northrop Grumman Corporation and
Raytheon  Company.  The Consortium,  through the Spartan Undersea Warfare Combat
Vehicle  Program,  has agreed to commence  the  research  and  development  of a
deployable,  off board under water warfare combat  vehicle.  The aspects of this
agreement  require that the vehicle be able to operate on an unmanned  basis, is
reconfigurable for several uses and has minimal impact on its host ship.

      If the  consortium is unable to develop the unmanned  surface  vehicle for
use by the United States Navy, then the expected source of our revenues, if any,
may not  materialize.  If sales of the unmanned  surface  vehicle do not develop
then our results of operations  may be negatively  impacted and we may be forced
to cease operations.

IF WE ARE NOT ABLE TO MANAGE  THE  GROWTH OF OUR  COMPANY  WE MAY NEVER  ACHIEVE
PROFITABILITY.

      Our success will depend on our ability to expand and manage our operations
and  facilities.  There can be no  assurance  that we will be able to manage our
growth, meet the staffing requirements of manufacturing  scale-up or for current
or additional  collaborative  relationships or successfully assimilate and train
our new employees.  In addition,  to manage our growth  effectively,  we will be
required to expand our  management  base and enhance our operating and financial
systems.  If we continue to grow,  there can be no assurance that the management
skills and systems  currently  in place will be adequate or that we will be able
to manage any  additional  growth  effectively.  Failure to achieve any of these
goals could have a material adverse effect on our business,  financial condition
or results of operations.


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<PAGE>

RISKS RELATING TO OUR CURRENT FINANCING ARRANGEMENT:

THERE ARE A LARGE NUMBER OF SHARES  UNDERLYING OUR CONVERTIBLE  DEBENTURES,  AND
WARRANTS  THAT MAY BE AVAILABLE FOR FUTURE SALE AND THE SALE OF THESE SHARES MAY
DEPRESS THE MARKET PRICE OF OUR COMMON STOCK.

      As of June 30, 2004, we had  65,895,149  shares of common stock issued and
outstanding and convertible debentures outstanding that may be converted into an
estimated  38,250,000  shares of common  stock at  current  market  prices,  and
outstanding  warrants to purchase 1,000,000 shares of common stock. In addition,
the number of shares of common stock issuable upon conversion of the outstanding
convertible  debentures may increase if the market price of our stock  declines.
All of the shares,  including all of the shares  issuable upon conversion of the
debentures and upon exercise of our warrants,  may be sold without  restriction.
The sale of these  shares may  adversely  affect the market  price of our common
stock.

THE  CONTINUOUSLY   ADJUSTABLE  CONVERSION  PRICE  FEATURE  OF  OUR  CONVERTIBLE
DEBENTURES  COULD REQUIRE US TO ISSUE A SUBSTANTIALLY  GREATER NUMBER OF SHARES,
WHICH WILL CAUSE DILUTION TO OUR EXISTING STOCKHOLDERS.

      Our  obligation  to  issue  shares  upon  conversion  of  our  convertible
debentures is essentially  limitless.  The following is an example of the amount
of  shares  of our  common  stock  that are  issuable,  upon  conversion  of our
convertible debentures (excluding accrued interest), based on market prices 25%,
50% and 75% below the market price, as of October 12, 2004 of $0.02.

                                          Number
                                         of Shares
% Below    Price Per   With Discount    Outstanding   % of
Market       Share        at 20%         Issuable     Stock
------       -----        ------         --------     -----

25%          $.015        $.012        251,600,000    80.86%
50%          $.010        $.008        378,787,500    86.41%
75%          $.005        $.004        760,350,000    92.73%

      As  illustrated,  the  number  of shares of  common  stock  issuable  upon
conversion of our  convertible  debentures  will increase if the market price of
our stock declines, which will cause dilution to our existing stockholders.

THE  CONTINUOUSLY   ADJUSTABLE  CONVERSION  PRICE  FEATURE  OF  OUR  CONVERTIBLE
DEBENTURES  MAY  ENCOURAGE  INVESTORS  TO MAKE SHORT SALES IN OUR COMMON  STOCK,
WHICH COULD HAVE A DEPRESSIVE EFFECT ON THE PRICE OF OUR COMMON STOCK.

      The convertible debentures are convertible into shares of our common stock
at a 20%  discount  to the  trading  price  of the  common  stock  prior  to the
conversion.  The significant  downward pressure on the price of the common stock
as the selling  stockholder  converts and sells material amounts of common stock
could  encourage  short sales by investors.  This could place  further  downward
pressure on the price of the common stock.  The selling  stockholder  could sell
common  stock  into the market in  anticipation  of  covering  the short sale by
converting their securities,  which could cause the further downward pressure on
the stock price. In addition, not only the sale of shares issued upon conversion
or exercise of debentures,  warrants and options,  but also the mere  perception
that these sales  could  occur,  may  adversely  affect the market  price of the
common stock.

THE  ISSUANCE  OF SHARES  UPON  CONVERSION  OF THE  CONVERTIBLE  DEBENTURES  AND
EXERCISE OF OUTSTANDING WARRANTS MAY CAUSE IMMEDIATE AND SUBSTANTIAL DILUTION TO
OUR EXISTING STOCKHOLDERS.

      The issuance of shares upon conversion of the  convertible  debentures and
exercise of warrants  may result in  substantial  dilution to the  interests  of
other  stockholders  since the selling  stockholders may ultimately  convert and
sell the full amount issuable on conversion.  Although the selling  stockholders
may not convert their  convertible  debentures and/or exercise their warrants if


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<PAGE>

such  conversion  or  exercise  would  cause  them to own more  than 4.9% of our
outstanding  common  stock,  this  restriction  does  not  prevent  the  selling
stockholders  from converting  and/or exercising some of their holdings and then
converting  the rest of their  holdings.  In this way, the selling  stockholders
could sell more than this limit while never holding more than this limit.  There
is no upper limit on the number of shares that may be issued which will have the
effect of further diluting the proportionate equity interest and voting power of
holders of our common stock, including investors in this offering.

IN THE EVENT THAT OUR STOCK PRICE DECLINES, THE SHARES OF COMMON STOCK ALLOCATED
FOR CONVERSION OF THE  CONVERTIBLE  DEBENTURES  AND  REGISTERED  PURSUANT TO THE
PROSPECTUS  MAY NOT BE  ADEQUATE  AND WE MAY BE  REQUIRED  TO FILE A  SUBSEQUENT
REGISTRATION  STATEMENT  COVERING  ADDITIONAL  SHARES.  IF THE  SHARES  WE  HAVE
ALLOCATED AND ARE  REGISTERING  HEREWITH ARE NOT ADEQUATE AND WE ARE REQUIRED TO
FILE AN ADDITIONAL  REGISTRATION  STATEMENT,  WE MAY INCUR  SUBSTANTIAL COSTS IN
CONNECTION THEREWITH.

      Based on our current market price and the potential decrease in our market
price as a result of the issuance of shares upon  conversion of the  convertible
debentures,  we have made a good  faith  estimate  as to the amount of shares of
common stock that we are required to register and allocate for conversion of the
convertible  debentures.  Accordingly,  subject to  obtaining an increase in our
authorized  shares of common stock, we will allocate and register  approximately
38,250,000 shares to cover the conversion of the convertible debentures.  In the
event  that our stock  price  decreases,  the  shares  of  common  stock we have
allocated  for  conversion of the  convertible  debentures  and are  registering
hereunder  may  not  be  adequate.  If  the  shares  we  have  allocated  to the
registration  statement  are  not  adequate  and  we are  required  to  file  an
additional  registration statement, we may incur substantial costs in connection
with the preparation and filing of such registration statement.

IF WE  ARE  REQUIRED  FOR  ANY  REASON  TO  REPAY  OUR  OUTSTANDING  CONVERTIBLE
DEBENTURES,  WE WOULD BE REQUIRED TO DEPLETE OUR WORKING CAPITAL,  IF AVAILABLE,
OR RAISE ADDITIONAL FUNDS. OUR FAILURE TO REPAY THE CONVERTIBLE  DEBENTURES,  IF
REQUIRED,  COULD RESULT IN LEGAL ACTION AGAINST US, WHICH COULD REQUIRE THE SALE
OF SUBSTANTIAL ASSETS.

      In March 2004,  we entered into a Securities  Purchase  Agreement  for the
sale of an aggregate of $300,000 principal amount of convertible debentures.  As
of  October  13,  2004,  the  total  debenture  outstanding  is  $277,500.   The
convertible debentures are due and payable, with 7 3/4% interest, two years from
the date of issuance,  unless sooner  converted into shares of our common stock.
In  addition,  any event of default  could  require the early  repayment  of the
convertible  debentures  at a price  equal to 125% of the  amount  due under the
debentures.  We anticipate that the full amount of the  convertible  debentures,
together  with accrued  interest,  will be  converted  into shares of our common
stock,  in accordance with the terms of the  convertible  debentures.  If we are
required to repay the  convertible  debentures,  we would be required to use our
limited working capital and raise  additional  funds. If we were unable to repay
the debentures when required,  the debenture holders could commence legal action
against us and  foreclose  on all of our assets to recover the amounts  due. Any
such action would require us to curtail or cease operations.

RISKS RELATING TO OUR COMMON STOCK:

IF WE FAIL TO REMAIN CURRENT ON OUR REPORTING REQUIREMENTS,  WE COULD BE REMOVED
FROM THE OTC BULLETIN BOARD WHICH WOULD LIMIT THE ABILITY OF  BROKER-DEALERS  TO
SELL OUR SECURITIES AND THE ABILITY OF STOCKHOLDERS TO SELL THEIR  SECURITIES IN
THE SECONDARY MARKET.

      Companies trading on the OTC Bulletin Board, such as us, must be reporting
issuers under Section 12 of the Securities Exchange Act of 1934, as amended, and
must be current in their reports  under  Section 13, in order to maintain  price
quotation  privileges on the OTC Bulletin Board. If we fail to remain current on
our reporting requirements,  we could be removed from the OTC Bulletin Board. As
a result,  the market liquidity for our securities  could be severely  adversely
affected by limiting the ability of  broker-dealers  to sell our  securities and
the ability of stockholders to sell their securities in the secondary market.


                                       8
<PAGE>

OUR DIRECTORS AND EXECUTIVE OFFICERS BENEFICIALLY OWN APPROXIMATELY 10.5% OF OUR
STOCK;  THEIR INTERESTS COULD CONFLICT WITH  SHAREHOLDERS;  SIGNIFICANT SALES OF
STOCK HELD BY THEM COULD HAVE A NEGATIVE EFFECT ON OUR STOCK PRICE; STOCKHOLDERS
MAY BE UNABLE TO EXERCISE CONTROL.

      As of June 30, 2004,  our executive  officers,  directors  and  affiliated
persons beneficially owned approximately 10.5% of our common stock. As a result,
our executive  officers,  directors and affiliated persons will have significant
influence to:

      o     elect or defeat the election of our directors;

      o     amend or prevent  amendment  of our  articles  of  incorporation  or
            bylaws;

      o     effect  or  prevent a  merger,  sale of  assets  or other  corporate
            transaction; and

      o     control  the  outcome  of  any  other   matter   submitted   to  the
            stockholders for vote.

      As a result of their ownership and positions,  our directors and executive
officers collectively are able to significantly  influence all matters requiring
stockholder  approval,  including  the  election of  directors  and  approval of
significant corporate transactions. In addition, sales of significant amounts of
shares held by our directors and  executive  officers,  or the prospect of these
sales, could adversely affect the market price of our common stock. Management's
stock  ownership may discourage a potential  acquirer from making a tender offer
or otherwise  attempting to obtain control of us, which in turn could reduce our
stock price or prevent our stockholders  from realizing a premium over our stock
price.

OUR  COMMON  STOCK IS  SUBJECT  TO THE  "PENNY  STOCK"  RULES OF THE SEC AND THE
TRADING MARKET IN OUR  SECURITIES IS LIMITED,  WHICH MAKES  TRANSACTIONS  IN OUR
STOCK CUMBERSOME AND MAY REDUCE THE VALUE OF AN INVESTMENT IN OUR STOCK.

      The  Securities  and  Exchange  Commission  has  adopted  Rule 15g-9 which
establishes the definition of a "penny stock," for the purposes  relevant to us,
as any equity  security  that has a market price of less than $5.00 per share or
with an  exercise  price of less  than  $5.00  per  share,  subject  to  certain
exceptions.  For any  transaction  involving a penny stock,  unless exempt,  the
rules require:

      o     that a broker or dealer approve a person's  account for transactions
            in penny stocks; and

      o     the broker or dealer  receive from the investor a written  agreement
            to the  transaction,  setting forth the identity and quantity of the
            penny stock to be purchased.

      In order to approve a person's  account for  transactions in penny stocks,
the broker or dealer must:

      o     obtain financial information and investment experience objectives of
            the person; and

      o     make a  reasonable  determination  that  the  transactions  in penny
            stocks are  suitable  for that person and the person has  sufficient
            knowledge  and  experience  in  financial  matters  to be capable of
            evaluating the risks of transactions in penny stocks.

      The broker or dealer  must also  deliver,  prior to any  transaction  in a
penny stock, a disclosure  schedule prescribed by the Commission relating to the
penny stock market, which, in highlight form:

      o     sets  forth  the  basis on  which  the  broker  or  dealer  made the
            suitability determination; and

      o     that the broker or dealer received a signed,  written agreement from
            the investor prior to the transaction.

      Generally,  brokers  may  be  less  willing  to  execute  transactions  in
securities  subject to the "penny stock" rules.  This may make it more difficult
for  investors  to dispose of our common stock and cause a decline in the market
value of our stock.

      Disclosure  also has to be made  about  the  risks of  investing  in penny
stocks  in  both  public  offerings  and in  secondary  trading  and  about  the
commissions payable to both the broker-dealer and the registered representative,
current  quotations for the securities and the rights and remedies  available to
an  investor  in cases of fraud in penny stock  transactions.  Finally,  monthly
statements  have to be sent  disclosing  recent price  information for the penny
stock held in the account and information on the limited market in penny stocks.


                                       9
<PAGE>

ITEM 2.    DESCRIPTION OF PROPERTY

      Together with our wholly-owned  subsidiary,  we lease office space under a
month-to-month  lease.  For the use of this space, we paid rent in the amount of
$15,000  for the year  ended  June 30,  2004.  We do not own or lease  any other
properties. We believe that our existing facilities are adequate for our current
use.

      Our principal  executive  offices are located at 9119 Ridgetop Blvd. Suite
260, Silverdale, Washington 98383, and our telephone number is (360) 692-6446.


ITEM 3.    LEGAL PROCEEDINGS

      A lawsuit known as Spencer vs. Radix  Marine,  Inc. has been filed against
us in the Circuit Court of the  Eighteenth  Judicial  Circuit of Dupage  County,
State of Illinois, on June 29, 2004, for sending out unsolicited  advertisements
via telephone  facsimile  machines in violation of the United  States  Telephone
Consumer  Protection  Act. The complaint  seeks to have class action  certified.
Each member of the affected class,  could assert a claim of $500. The sending of
the  unsolicited  material was not authorized by us.  Management has retained an
attorney to represent  them in this matter and  management  believes  that class
action status will not be granted.

      One of our former attorneys alleges an outstanding balance due to him from
us in the amount of approximately $50,000. We believe that through cash payments
and through the issuances of shares of its common stock to the  attorney,  we do
not believe that there is any balance due him. Currently,  we have contacted the
attorney  regarding  the  disputed  balance  due,  but the  attorney  has yet to
respond. Accordingly, no formal legal proceeding has been commenced.

      From  time to time,  we may  become  party to  litigation  or other  legal
proceedings  that  we  consider  to be a part  of  the  ordinary  course  of our
business. We may become involved in material legal proceedings in the future.


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

      On August 5, 2004, we held our annual meeting of shareholders  pursuant to
which the shareholders approved (i) an amendment to the company's Certificate of
Incorporation  to increase the number of  authorized  shares from  75,000,000 to
250,000,000 as required by a Securities  Purchase Agreement we entered into with
an  accredited  investor  on  March  17,  2004,  for  the  sale of  $300,000  in
convertible debentures and warrants to buy 3,000,000 shares of our common stock;
(ii) the 2004 Employee Stock Incentive Plan and to authorize 5,000,000 shares of
Common Stock for  issuance  under the Plan;  (iii) the  selection of Jonathon P.
Reuben,  C.P.A.,  as our auditors for the fiscal year ending June 30, 2004;  and
(iv) the  election of a board of five  directors  to hold office  until the 2005
Annual  Meeting of  Shareholders  and until  their  successors  are  elected and
qualified.


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

Market Information

      As of  August 6,  2001,  the  Company's  stock  was  listed on the  NASDAQ
Bulleting Board under the symbol "MMFS." As of April 4, 2003, in accordance with
Consent of Action of the  Shareholders,  the common stock of Radix Marine,  Inc.


                                       10
<PAGE>

was listed on the NASDAQ  Bulletin Board under the symbol "RDXM." The quotations
provided are for the over the counter  market which reflect  interdealer  prices
without retail mark-up,  mark-down or commissions,  and may not represent actual
transactions.  The bid prices  included  below have been  obtained  from sources
believed to be reliable:

      Period Ending:          High Bid          Low Bid
      -------------------------------------------------
      June 30, 2002           0.69              0.29
      September 30, 2002      0.55              0.27
      December 31, 2002       0.59              0.23
      March 31, 2003          0.43              0.15
      June 30, 2003           0.09              0.08
      September 30, 2003      0.10              0.10
      December 31, 2003       0.08              0.06
      March 31, 2004          0.10              0.09
      June 30, 2004           0.05              0.04
      September 30, 2004      0.05              0.02

Holders of Common Stock

      RDXM had  72,550,850  shares of common stock issued and  outstanding as of
October 12, 2004, which were held by approximately 2020 shareholders. 11,500,000
common shares that were issued in the acquisition of Integrated are restricted.

Recent Issuance of Securities

      The  acquisition of Integrated  provided that  4,005,075  shares of common
stock were issued in October 2004 in exchange for all the outstanding  shares of
Integrated.  The merger  agreement  provided  that if the  Company was unable to
effect funding of $1,500,000 to Integrated within a six month period, additional
shares  were to be issued  to the  former  shareholders  of  Integrated.  Upon a
failure to fund, as part of an overall  settlement  with the prior  officers and
directors of the corporation, the shareholders of Integrated and related parties
were issued an additional 7,550,000 shares in March of 2003.

      From July 1, 2003  through  June 30, 2004,  the Company  issued  3,020,000
shares,  pursuant to Form S-8 and Section 15(d) of the  Securities  and Exchange
Act of 1934, to the following parties in return for services as follows:

      The Otto Law Group               3,700,000
      Bartholomew International        4,258,000
      Marquis Development              4,000,000
      Law offices of Michael Corrigan    800,000


      From July 1, 2003  through  June 30, 2004,  the Company  issued  5,760,834
shares of common stock,  pursuant to an SB-2  registration  under the terms of a
convertible debenture and warrant agreement.

      From July 1, 2003  through  June 20, 2004,  the company  issued  4,001,459
shares of common stock to retire debt. These were restricted  securities as that
term is defined in  paragraph  (a)(3) of Rule 144,  promulgated  pursuant to the
Securities Act of 1933, as amended.

      From July 1, 2002,  through June 30, 2003, the company  issued  12,482,590
shares of common  stock in exchange  for  $269,058.87  received  as  convertible
loans.  These were  restricted  securities  as that term is defined in paragraph
(a)(3) of Rule 144,  promulgated  pursuant  to the  Securities  Act of 1933,  as
amended.


                                       11
<PAGE>

Dividend Policy

      RDXM or MMFS has not paid a dividend  on its  common  stock in the past 12
months.  The company  does not  anticipate  paying any  dividends  on its common
stock.

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

Overview

      Radix Marine, Inc. underwent a major re-direction during the year 2003. As
Modern MFG Services,  the company's focus was on serving as an Internet clearing
house for  contractors  and  customers  in the machine shop  industry.  With the
acquisition of Integrated Maritime Platforms International,  Inc., the company's
focus changed to the  development,  production,  and  integration  of high-speed
marine craft. We will be maintaining this new focus during the year 2004.

Financial Condition and Results of Operations

      The following is a summarized  description of the consolidated  operations
during the past fiscal year. Approximately $279,427 was earned from services, as
compared to $252,015 in the prior fiscal year. This income was obtained  through
the  subsidiary  Integrated  Maritime  Platforms  International,  through  their
contract with the government. The parent company, Radix Marine, generated income
through fuel sales for the year.  In addition,  the company  relied on financing
activities for (stock sales and loans) for cash.

      A total of $1,503,940 was expended on general and administrative expenses,
as compared to $632,202 for the year ending June 30, 2003. Of this,  the general
and administrative expenses of Radix Marine were $1,038,217,  including $387,142
for consulting,  $349,022 for legal fees,  $36,325 for accounting  fees, and the
rest for general  operations.  Of the  $465,724  of general  and  administrative
expenses  attributable  to  Integrated  Maritime,   $100,514  was  for  contract
amortization  expense,  $728 was for legal  expense,  $145,985  was for  payroll
expenses, $6,204 was for accounting expense, $20,694 was for subcontractors, and
the rest for general operations.

      Research  and  development  costs for the year  ending  June 30, 2004 were
$36,763 as opposed to $310,449 for the year ending June 30,  2003.  All research
and  development  costs were  expended by  Integrated  Maritime in expanding the
company's product line.

      Total  interest  expense  for the year  ended  June  30,  2004 for the two
companies was $178,319 as compared to $102,901 for the prior year.

      The company  had a loss of  $(81,734)  through the  issuance of our common
stock in exchange for the cancellation of indebtedness  totalling 148,868.  Gain
on  extinguishments  of debt for the year  ending  June 30,  2003 was  $326,840.
During the year ended June 30, 2003,  additional  debt in the amount of $759,605
was retired through issuance of common stock.  Resultant net loss for the fiscal
year  ended  June  30,  2004 was  $1,727,335.  Of this a total  of  $36,763  was
attributed  to  research  and  development.  Net  loss  prior  to  research  and
development  costs  was  $1,690,572  for the  year,  compared  to a net  loss of
$919,297 for the prior year

General Plan of Operations

      The  company has  historically  and  continues  to rely on equity and debt
financing to sustain operations.  A revenue source was established for the first
time in the company's  history  through the  acquisition of Integrated  Maritime
Platforms  International.  Inc.  (Integrated  Maritime).  Integrated Maritime is
currently  developing a complete line of manned and unmanned  craft for domestic
and  international  sales.  A  portion  of these  costs  are  covered  under the
company's  contract with the U.S. Navy for unmanned surface  vehicles.  However,
additional  capital is required to prototype  and market the product in order to
generate revenues for continued operations.


                                       12
<PAGE>

      The company is currently working with several funding sources concurrently
for either debt or equity financing, or a combination.  These discussions are in
the early stages and the terms not sufficiently finalized at this time.

      As  funds  are  received  through  revenues,  debt  or  additional  equity
financing,  management  plans to  negotiate  with  creditors to settle prior and
outstanding  obligations  for either a reduced amount or settle the debt through
the issuance of the company's stock.

      In July of 2003,  the company  signed a letter of intent with Radix Ortega
to acquire a portion of their company.  Radix Ortega provides  environmental and
construction  management  services,  with a focus on the marine  industry.  This
acquisition remains pending until financing becomes available.



Forward-Looking Statements

      Certain statements  concerning the Company's plans and intentions included
herein  constitute  forward-looking  statements  for  purpose of the  Securities
Litigation  Reform Act of 1995 for which the Company  claims a safe harbor under
that Act.  There are a number of factors  that may affect the future  results of
the  Company,  including,  but not limited to, (a) the ability of the company to
obtain  additional  funding for  operations,  (b) the continued  availability of
management  to develop the  business  plan and (c)  successful  development  and
market acceptance of the company's unproven product.

      This annual report  contains  both  historical  facts and  forward-looking
statements.  Any  forward-looking  statements  involve risks and  uncertainties,
including,  but not limited to, those mentioned above. Moreover,  future revenue
and margin trends cannot be reliably predicted.


                                       13
<PAGE>

ITEM 7. FINANCIAL STATEMENTS.

                               RADIX MARINE, INC.
                         (A Development Stage Company)
                              FINANCIAL STATEMENTS


                                    Contents


                                                                 Page
                                                                 ----

   Independent Auditors' Report                                   F-1

   Balance Sheet                                                  F-2

   Statements of Operations and Accumulated Deficit               F-3

   Statement of Stockholders' Deficit                             F-4

   Statement of Cash Flows                                        F-5

   Notes to Financial Statements                                  F-6

<PAGE>

                          Independent Auditors' Report


Board of Directors
Radix Marine, Inc.
Silverdale, Washington

We have audited the  accompanying  consolidated  balance  sheet of Radix Marine,
Inc.  (A  Development  Stage  Company)  as of June  30,  2004,  and the  related
consolidated  statements  of  operations  and  deficit  accumulated  during  the
development stage, cash flows, and stockholders'  deficit for the two years then
ended,  and from the  Company's  inception  (February 7, 2000)  through June 30,
2004.  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 audits in accordance  with the standards of the Public  Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement.  An audit includes examining, on a
test basis,  evidence  supporting  the amounts and  disclosures in the financial
statements.  An audit also includes assessing the accounting principles used and
significant  estimates  made by  management,  as well as evaluating  the overall
financial  statement  presentation.  We  believe  that  our  audits  provides  a
reasonable basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects, the consolidated financial position of Radix Marine, Inc.
as of June 30, 2004,  and the  consolidated  results of its  operations  and its
consolidated  cash flows for the two years then  ended,  and from the  Company's
inception  (February  7,  2000)  through  June  30,  2004,  in  conformity  with
accounting principles generally accepted in the United States of America.

The  accompanying  financial  statements  have been  prepared  assuming that the
Company will continue as a going concern. As discuss in Note 11 to the financial
statements,  the Company has suffered recurring losses from operations and has a
net capital  deficiency,  which  raises  substantial  doubt about its ability to
continue as a going concern. Management's plans regarding those matters also are
also  described  in  Note  11.  The  financial  statements  do not  include  any
adjustments that might result from the outcome of this uncertainty.

/s/ Jonathon P. Reuben CPA
--------------------------

Jonathon P. Reuben, C.P.A.
Accountancy Corporation
Torrance. California
October 14, 2004


                                      F-1
<PAGE>

RADIX MARINE, INC.
(A DEVELOPMENT STAGE CORPORATION)
CONSOLIDATED BALANCE SHEET
JUNE 30, 2004
--------------------------------------------------------------------------------

    ASSETS

      CURRENT ASSETS
         Cash                                                       $    42,602
         Accounts receivable                                            160,611
         Prepaid expenses                                                50,000
                                                                    -----------
           TOTAL CURRENT ASSETS                                         253,213
                                                                    -----------

      PROPERTY & EQUIPMENT
         Property held under capital lease                              587,404
         Office equipment                                                 5,052
         Computer software                                                2,246
                                                                    -----------
                                                                        594,702
         Less accumulated depreciation                                 (108,895)
                                                                    -----------
                                                                        485,807
                                                                    -----------

      OTHER ASSETS
         Intangible assets not subject to amortization
           Goodwill                                                     550,704
         Intangible assets subject to amortization
           Other                                                        326,671
                                                                    -----------
                                                                        877,375
                                                                    -----------

           TOTAL ASSETS                                             $ 1,616,395
                                                                    ===========



    LIABILITIES AND STOCKHOLDERS' (DEFICIT)
      CURRENT LIABILITIES
         Accounts payable                                           $    33,017
         Payroll taxes payable                                           12,539
         Legal fees payable                                              12,784
         Accrued expenses                                                 7,671
         Payable to related parties                                     157,630
         Current maturities of long-term debt                           669,988
         Current portion of obligation under capital lease               98,799
                                                                    -----------
           TOTAL CURRENT LIABILITIES                                    992,428
                                                                    -----------

         Long-term debt                                                 288,500
         Obligations under capital lease                                412,246

           TOTAL LIABILITIES                                          1,693,174
                                                                    -----------

      STOCKHOLDERS' (DEFICIT)
         Common stock,  $.001 par value; authorized
           75,000,000 shares; issued and outstanding
           65,895,149 shares as of June 30, 2004                         65,895
         Additional paid-in capital                                   4,017,353
         Deficit accumulated during the development stage            (4,320,027)
         Prepaid common stock warrants                                  160,000
                                                                    -----------

           TOTAL STOCKHOLDERS' (DEFICIT)                                (76,779)
                                                                    -----------

           TOTAL LIABILITIES AND STOCKHOLDERS' (DEFICIT)            $ 1,616,395
                                                                    ===========


                                      F-2
<PAGE>

RADIX MARINE, INC.
(A DEVELOPMENT STAGE CORPORATION)
CONSOLIDATED STATEMENTS OF OPERATIONS
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                                    DEFICIT
                                                                                  ACCUMULATED
                                                                                  DURING THE
                                                             June 30,             DEVELOPMENT
                                                        2003           2004          STAGE
                                                    ------------   ------------   ------------
<S>                                                 <C>            <C>            <C>
     INCOME
       Revenue from research & development
         contract                                   $    252,015   $     68,956   $    321,146
       Vessel sales                                           --         91,541         91,716
        Sale of aviation fuel                                 --        118,930        119,105
                                                    ------------   ------------   ------------
                                                         252,015        279,427        531,967
                                                    ------------   ------------   ------------

     EXPENSES
       Cost of sales                                          --        205,970        205,970
       Selling, general and administrative               632,202      1,503,940      3,084,156
       Loss on abandonment of website development             --             --        460,515
       Loss on impairment of goodwill                    750,000             --        750,000
       Research and development                          310,499         36,763        479,207
                                                    ------------   ------------   ------------
                                                       1,692,701      1,746,673      4,979,848
                                                    ------------   ------------   ------------

     OTHER INCOME (EXPENSES)
       Loss on disposal and repossession of assets       (13,091)            --        (13,091)
       Interest income                                        42             24             66
       Interest expense                                 (102,901)      (178,319)      (281,444)
       Gain (loss) on extinguishments of debt            326,840        (81,794)       422,323
                                                    ------------   ------------   ------------
                                                         210,890       (260,089)       127,854
                                                    ------------   ------------   ------------

       NET LOSS                                     $ (1,229,796)  $ (1,727,335)  $ (4,320,027)
                                                    ============   ============   ============


     PER SHARE DATA
       BASIC LOSS PER SHARE                         $      (0.06)  $      (0.04)
                                                    ============   ============

       WEIGHTED AVERAGE COMMON
           SHARES OUTSTANDING                         21,465,403     49,300,243
                                                    ============   ============
</TABLE>


                                      F-3
<PAGE>

RADIX MARINE, INC.
(FORMERLY MODERN MFG SERVICES, INC.)
STATEMENT OF STOCKHOLDERS' (DEFICIT)
JULY 1, 2003 THOUGH JUNE 30, 2004
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                                                                        DEFICIT
                                                                                                                      ACCUMULATED
                                                                               COMMON STOCK            ADDITIONAL     DURING THE
                                                                        ---------------------------     PAID-IN       DEVELOPMENT
                                                                           SHARES         AMOUNT        CAPITAL         STAGE
                                                                        ------------   ------------   ------------   ------------
<S>                                                                     <C>            <C>            <C>            <C>
      Shares issued for cash                                              11,516,000         11,516             --
      Shares issued for services                                               9,000         11,725             --
      Net loss for the year ended June 30, 2000                                   --             --             --        (41,098)
                                                                        ------------   ------------   ------------   ------------

         Balance - June 30, 2000                                          11,525,000         23,241             --        (41,098)
      Adjust for reverse acquisition of MPEG Super Site, Inc.                814,985        (10,901)        10,901       (600,228)
                                                                        ------------   ------------   ------------   ------------

         Balance - June 30, 2000 - restated                               12,339,985         12,340         10,901       (641,326)

      Net loss for the year ended June 30, 2001                                   --             --             --        (87,830)
                                                                        ------------   ------------   ------------   ------------

         Balance - June 30, 2001                                          12,339,985         12,340         10,901       (729,156)

      Aug  2001 - Shares issued as payment on
         prior year's payables                                               450,000            450         32,050             --
      Aug  2001 - Shares issued for legal services                           100,000            100         24,900             --
      Aug  2001 - Shares issued for consulting services                       10,000             10          4,990             --
      Aug  2001 - Shares issued for legal services                            10,000             10          4,990             --
      Sept 2001 - Payment on software license                                 50,000             50         59,950             --
      Sept 2001 - Shares issued for consulting services                      300,000            300         14,700             --
      Oct, 2001 - Shares issued for legal services                            10,000             10          4,990             --
      Oct  2001 - Shares issued for consulting services                        1,000              1            499             --
      Oct  2001 - Shares returned to treasury and cancelled                  (17,500)           (17)            17             --
      Dec 2001 - Shares issued for cash                                       37,037             37          9,963             --
      Jan  2002 - Shares issued for consulting services                        5,000              5          3,745             --
      May 2002 - Shares issued for cash                                      250,000            250         24,750             --
      May 2002 - Shares issued for cash                                        6,000              6          2,994             --
      June  2002 - Shares issued for consulting services                      10,000             10          6,990             --
      June  2002 - Extinguishment of indebtedness due Retailport.com         100,000            100         16,823             --
      June  2002 - Shares issued for consulting services                      65,000             65         10,935             --
      June 2002 - Shares issued for cash                                       6,000              6          2,994             --
      Net loss for the year ended June 30, 2002                                   --             --             --       (564,816)
                                                                        ------------   ------------   ------------   ------------

         Balance - June 30, 2002                                          13,732,522         13,733        237,181     (1,293,972)

      July 2002 - Shares issued for cash                                     136,364            136         29,864             --
      Aug 2002 - Shares issued for cash                                      224,243            224         39,776             --
      Sept 2002 - Shares issued for cash                                     266,667            267         39,733             --
      Sept 2002 - Net income and expenses of Integrated Marine
                    for the period prior to acquisition                                                                   (68,924)
      Oct 2002 - Shares issued as payment on payables                         14,000             14          6,486             --
      Oct 2002 - Shares issued for acquisition of Integrated Marine        4,005,075          4,005      1,268,139             --
      Oct 2002 - Shares issued for consulting services                       152,000            152             --             --
      Nov 2002 - Shares issued in cancellation of indebtedness             1,000,000          1,000        149,000             --
      Nov 2002 - Shares issued for consulting services                       520,000            520        129,480             --
      Dec 2002 - Shares issued in cancellation of indebtedness                10,000             10          2,490             --
      Jan 2003 - Shares issued in cancellation of indebtedness                47,500             48          6,203             --
      Feb 2003 - Shares issued for consulting services                       150,000            150         37,350             --
      Mar 2003 - Shares issued for cash                                    1,645,500          1,646         51,067             --
      April 2003 - Shares issued for consulting services                     800,000            800        112,000             --
      April 2003 - Shares issued for cash                                    909,714            910         25,245             --
      May 2003 - Shares issued for cash                                      722,714            723         20,046             --
      May 2003 - Shares issued for consulting services                     1,500,000          1,500        163,500             --
      May 2003 - Additional shares issued on acquisition of
                   Integrated Marine                                       7,550,000          7,550         (7,550)            --
      May 2003 - Shares rescinded                                         (3,500,000)        (3,500)            --             --
      May 2003 - Shares issued for convertible notes                       1,005,966          1,006         40,994             --
      Net loss for the year ended June 30, 2003                                   --             --             --     (1,229,796)
                                                                        ------------   ------------   ------------   ------------

         Balance - June 30, 2003                                          30,892,265   $     30,893   $  2,351,003   $ (2,592,692)

      July 2003 - Shares issued for legal services                         2,000,000          2,000        128,000
      September 2003 - Shares issued for convertible notes                 3,982,363          3,982         86,018
      October 2003 - Shares issued for consulting services                 6,258,000          6,258        557,962
      October 2003 - Shares issued for legal services                      1,000,000          1,000         89,000
      October 2003 - Shares issued for cancellation of indebtedness        1,582,608          1,582        109,200
      December 2003 - Shares issued for consulting services                2,450,000          2,450        275,550
      December 2003 - Shares issued for legal services                     1,500,000          1,500        178,500
      December 2003 - Shares issued for convertible notes                  1,655,090          1,656         46,845
      December 2003 - Shares issued in lieu of lease payments              1,654,167          1,654         59,178
      December 2003 - Shares issued for extinguishment of debt                 9,632             10            712
      January  2004 - Shares issued for convertible notes                  4,710,988          4,711        165,848
      January 2004 - Shares issued in lieu of lease payments                 441,772            442         14,766
      January 2004 - Shares issued for extinguishment of debt                809,770            810         54,659
      March 2004 - Shares issued for extinguishment of debt                  625,000            625         64,063
      April 2004 - Shares issued for convertible debenture and warrant       441,412            441         27,059
      May 2004 - Shares issued for convertible debenture and warrant         568,457            568         21,432
      May 2004 - Shares issued for convertible debenture and warrant         257,009            257         10,743
      June 2004 - Shares issued for convertible debenture and warrant        664,652            665         21,335
      June 2004 - Shares issued for consulting services                      106,474            106          5,111
      June 2004 - Shares issued for convertible debenture and warrant        664,652            665         21,335
      June 2004 - Shares issued for convertible debenture and warrant        664,652            665         21,335
      June 2004 - Shares issued for convertible debenture                    206,186            206          4,794
      June 2004 - Shares issued for cash                                   2,500,000          2,500        147,500
      June 2004 - Shares issued for extinguishment of debt                   250,000            250         10,625
      Offering costs                                                                                      (455,220)
      Net loss for the year ended June 30, 2004                                   --             --             --     (1,727,335)
                                                                        ------------   ------------   ------------   ------------
                                                                          65,895,149   $     65,895   $  4,017,353   $ (4,320,027)
                                                                        ============   ============   ============   ============
</TABLE>


                                      F-4
<PAGE>

RADIX MARINE, INC.
(FORMERLY MODERN MFG SERVICES, INC.)
(A DEVELOPMENT STAGE CORPORATION)
CONSOLIDATED STATEMENTS OF CASH FLOWS
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                                                    DEFICIT
                                                                                                  ACCUMULATED
                                                                                                   DURING THE
    CASH FLOWS FROM OPERATING ACTIVITIES                                        JUNE 30,           DEVELOPMENT
                                                                           2003          2004         STAGE
                                                                       -----------   -----------   -----------
<S>                                                                    <C>           <C>           <C>
      Net Loss                                                         $(1,229,796   $(1,727,335)  $(4,320,027)
      Adjustments to reconcile net loss to net cash
        used by operating activities:
           Stock issued for services                                       453,182       833,092     1,363,524
           Abandonment of website development                                   --            --       422,108
           (Gain)  loss on extinguishment of indebtedness                 (326,840)       81,794      (422,323)
           Loss on disposal and repossession of assets                      13,091            --        13,091
           Loss on impairment of goodwill                                  750,000            --       750,000
           Depreciation expense                                             35,889       108,720       144,615
           Amortization expense                                             75,386       100,514       175,900
           (Increase) decrease in assets
            (Increase) in accounts receivable                              (66,757)      (93,854)     (160,611)
            (Increase) in prepaid expenses                                  (2,500)      (47,500)      (50,000)
           Increase (decrease) in liabilities
            Increase (decrease) in accounts payable and
              accrued expenses                                              (9,658)     (235,958)     (345,028)
            Increase (decrease) in licensing obligation                         --        74,790        74,790
            Increase in notes payable                                       14,891         4,033        18,924
            Increase (decrease) in obligations under capital lease              --        42,374        42,374
                                                                       -----------   -----------   -----------

             NET CASH USED IN OPERATING ACTIVITIES                        (293,112)     (859,330)   (2,292,663)
                                                                       -----------   -----------   -----------

    CASH FLOWS FROM INVESTING ACTIVITIES

      Office equipment/software purchases                                   (5,052)       (2,246)       (7,526)
                                                                       -----------   -----------   -----------

           NET CASH USED IN INVESTING ACTIVITIES                            (5,052)       (2,246)       (7,526)
                                                                       -----------   -----------   -----------


    CASH FLOWS FROM FINANCING ACTIVITIES

      Amounts received from related parties                                112,474        42,830       247,474
      Amounts received from line of credit                                 127,000            --       127,000
      Amounts received from long-term debt                                 169,748            --       169,748
      Amounts received from payables to others                              52,550       115,746       168,296
      Amounts received from convertible debenture                               --       300,000       300,000
      Amounts received from convertible notes                              314,059       314,059
      Amounts received from exercise of common stock warrants                   --       265,000       265,000
      Amounts received on issuance of common stock warrants                     --       160,000       160,000
      Cash received in reverse acquisition with MPEG Super Site, Inc.           --            --         1,641
      Repayments to related parties                                        (90,974)      (61,029)     (170,103)
      Repayments of long-term debt                                        (180,049)     (123,449)     (303,498)
      Repayments of payables to others                                      (5,900)      (79,124)      (85,024)
      Proceeds from private offerings                                      109,999            --     1,178,198
      Costs incurred from private offerings                                              (30,000)      (30,000)
                                                                                     -----------   -----------

           NET CASH PROVIDED BY FINANCING ACTIVITIES                       294,848       904,033     2,342,791
                                                                       -----------   -----------   -----------

           NET INCREASE (DECREASE) IN CASH AND CASH
            EQUIVALENTS                                                     (3,316)       42,457        42,602

           BEGINNING BALANCE - CASH AND CASH EQUIVALENTS                     3,461           145            --
                                                                       -----------   -----------   -----------

           ENDING BALANCE - CASH AND CASH EQUIVALENTS                  $       145   $    42,602   $    42,602
                                                                       ===========   ===========   ===========

SUPPLEMENTAL INFORMATION:

      CASH PAID FOR:

        Interest Expense                                               $     6,595   $    57,122
                                                                       ===========   ===========
        Income Taxes                                                   $        --   $        --
                                                                       ===========   ===========
</TABLE>


      NON-CASH INVESTMENT AND FINANCING INFORMATION

         During the year ended  June 30,  2003,  the  Company  issued  1,071,500
         shares  of its  common  stock to  consultants  in the  cancellation  of
         $162,250 of indebtedness.

         During the year ended June 30, 2004, holders of the Company convertible
         debentures   exercised   their   option  and   converted   $325,558  of
         indebtedness in exchange for 13,700,460  shares of the company's common
         stock.

         During  the year ended  June 30,  2004,  the  Company  entered  into an
         agreement to lease the same vessel which had been previously foreclosed
         upon.  The lease was  accounted  for as a capital lease and the Company
         valued the leased  vessel at the  present  value of the lease  payments
         totalling  $587,405.  During  the year,  the  Company  made five  lease
         payments  totalling $76,040 through the issuance of 2,095,939 shares of
         the company common stock.

         During the year ended  June 30,  2004,  the  Company  issued  3,027,010
         shares  of its  common  stock  in  exchange  for  the  cancellation  of
         indebtedness  amounting to $149,868. The Company recoginized an $81,794
         loss which was  charged to  operations  on the  difference  between the
         value of the shares issued and amount of the canceled indebteness.

         During the year ended  June 30,  2004,  the  Company  issued  4,258,000
         shares of its  common  stock to a  consultant  in  connection  with the
         Company's private offerings. The shares were valued at $425,220 and was
         charged against the proceeds received.


                                      F-5
<PAGE>

RADIX MARINE, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

NOTE 1 - ORGANIZATION

         Radix  Marine,  Inc.  (the  "Company"),  formerly  known as Modern  MFG
         Services,  Inc. is a corporation  that was formed under the laws of the
         State of Colorado on  September  30,  1958.  The name was changed  from
         Modern MFG Services,  Inc. in March of 2003 to Radix  Marine,  Inc. The
         Company  was   organized  for  the  purpose  of  developing  a  service
         organization   using  modern   technology   through  the  internet  for
         machinists, machine shops, and customers, to make contact, bid for jobs
         and other related matters.

         On  September  30,  2002  the  Company  acquired   Integrated  Maritime
         Platforms International,  Inc. ("Integrated").  Integrated is currently
         developing for construction an Unmanned Surface Vehicle  Prototype.  It
         is the Company's intent to develop and market a complete line of manned
         and unmanned marine craft for the domestic and international market.

         The Company is in the development stage as defined in FASB Statement 7.
         The Company has not paid any dividends and dividends,  that may be paid
         in the future, will depend on the financial requirements of the Company
         and other relevant factors.


NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         BASIS OF PRESENTATION

         The  Company's  financial  statements  are  prepared  using the accrual
         method of accounting in accordance with accounting principles generally
         accepted in the United States and have been prepared on a going concern
         basis,  which contemplates the realization of assets and the settlement
         of liabilities in the normal course of business. (See Note 11).

         PRINCIPLES OF CONSOLIDATION

         The accompanying consolidated financial statements include the accounts
         of the Radix Marine,  Inc. and its wholly owned subsidiary,  Integrated
         Maritime Platforms  International,  Inc. Intercompany  transactions and
         balances have been eliminated in consolidation.


                                      F-6
<PAGE>

RADIX MARINE, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

         REVENUE RECOGNITION

         The  Company  recognizes   revenue  when  persuasive   evidence  of  an
         arrangement exists, title transfer has occurred,  the price is fixed or
         readily  determinable,   and  collectibility  is  probable.  Sales  are
         recorded  net of sales  discounts.  The Company  recognizes  revenue in
         accordance with Staff Accounting Bulletin No. 101, "Revenue Recognition
         in Financial Statements," (SAB 101).

         The Company generates its revenue from a government contract,  sales of
         aviation fuel, and the manufacturing of aluminum  structures and marine
         crafts.  Invoices on the  government  contract are on a cost plus fixed
         fee basis. On manufacturing sales, customers are invoiced at either the
         completion  of the project,  or upon  pre-negotiated  progress  points,
         depending on contract terms.

         ACCOUNTS AND CONTRACTS RECEIVABLE

         Accounts  and  contracts  receivable  are  reported  at the  customers'
         outstanding balances less any allowance for doubtful accounts. Interest
         is not accrued on overdue accounts receivable.

         ALLOWANCE FOR DOUBTFUL ACCOUNTS

         The allowance for doubtful  accounts on accounts  receivable is charged
         to  income  in  amounts   sufficient  to  maintain  the  allowance  for
         uncollectible  accounts at a level  management  believes is adequate to
         cover any probable  losses.  Management  determines the adequacy of the
         allowance  based on historical  write-off  percentages  and the current
         status of  accounts  receivable.  Accounts  receivable  are charged off
         against  the  allowance  when   collectibility   is  determined  to  be
         permanently  impaired.  As of June 30, 2004, the Company established an
         allowance for doubtful accounts in the amount of $18,308.

         PROPERTY AND EQUIPMENT

         Property  and  equipment  are  stated  at  cost.   Major  renewals  and
         improvements  are  charged to the asset  accounts  while  replacements,
         maintenance  and  repairs,  which do not improve or extend the lives of
         the respective assets, are expensed. At the time property and equipment
         are retired or otherwise disposed of, the asset and related accumulated
         depreciation accounts are relieved of the applicable amounts.  Gains or
         losses from retirements or sales are credited or charged to income.

         The Company  depreciates  property and  equipment on the  straight-line
         method for financial reporting purposes as follows:

            Vessel held under capital lease   5 years
            Office equipment                  5 years
            Computer software                 3 years


         Depreciation expense charged to operations for the years ended June 30,
         2004, and 2003 were $108,720 and $35,889, respectively.


                                      F-7
<PAGE>

RADIX MARINE, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

         LONG-LIVED ASSETS

         In  August  2001,  SFAS No.  144,  "Accounting  for the  Impairment  or
         Disposal of Long-Lived  Assets," was issued  establishing new rules and
         clarifying implementation issues with SFAS No. 121, "Accounting for the
         Impairment  of  Long-Lived  Assets  and  for  Long-Lived  Assets  to be
         Disposed of, "by allowing a  probability-weighted  cash flow estimation
         approach to measure the  impairment  loss of a  long-lived  asset.  The
         statement   also   established   new  standards  for   accounting   for
         discontinued  operations.  Transactions  that qualify for  reporting in
         discontinued  operations  include the  disposal  of a  component  of an
         entity's operations that comprises operations and cash flow that can be
         clearly  distinguished,   operationally  and  for  financial  reporting
         purposes,  from the rest of the entity.  The statement is effective for
         fiscal years  beginning  after December 15, 2001.  The Company  adopted
         this  standard  and  its  adoption  has no  significant  effect  on the
         Company's financial statements.

         NET LOSS PER SHARE

         The Company adopted Statement of Financial Accounting Standards No. 128
         that requires the reporting of both basic and diluted  earnings  (loss)
         per share.  Basic earnings (loss) per share is computed by dividing net
         income (loss) available to common  stockholders by the weighted average
         number of common shares  outstanding for the period.  Diluted  earnings
         (loss) per share  reflects the  potential  dilution that could occur if
         securities or other  contracts to issue common stock were  exercised or
         converted  into  common  stock.   In  accordance  with  FASB  128,  any
         anti-dilutive  effects on net earnings  (loss) per share are  excluded.
         For 2002 and 2003,  common stock  equivalents  are  anti-dilutive  and,
         accordingly, basic and diluted earnings per share are the same

         CASH AND CASH EQUIVALENTS

         For purposes of the statement of cash flows, the Company considers cash
         and cash equivalents to include all stable,  highly liquid  investments
         with maturities of three months or less.

         USE OF ESTIMATES

         The  preparation of financial  statements in conformity with accounting
         principles  generally  accepted in the United States require management
         to make estimates and assumptions  that affect the reported  amounts of
         assets  and  liabilities,  the  disclosure  of  contingent  assets  and
         liabilities,  and the reported amounts of revenues and expenses. Actual
         results could differ from those estimates.


                                      F-8
<PAGE>

RADIX MARINE, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

         INCOME TAXES

         The  Company  accounts  for its income  taxes under the  provisions  of
         Statement of  Financial  Accounting  Standards  109 ("SFAS  109").  The
         method of  accounting  for income  taxes under SFAS 109 is an asset and
         liability   method.   The  asset  and  liability  method  requires  the
         recognition  of deferred  tax  liabilities  and assets for the expected
         future tax consequences of temporary  differences between tax bases and
         financial reporting bases of other assets and liabilities.

         FAIR VALUE OF FINANCIAL INSTRUMENTS

         Pursuant to SFAS No. 107,  "Disclosures  About Fair Value of  Financial
         Instruments", the Company is required to estimate the fair value of all
         financial  instruments  included  on its  balance  sheet as of June 30,
         2004.  The Company  considers the carrying value of such amounts in the
         financial statements to approximate their face value.

         ISSUANCES INVOLVING NON-CASH CONSIDERATION

         All issuances of the Company's  stock for non-cash  consideration  have
         been assigned a dollar amount  equaling  either the market value of the
         shares issued or the value of consideration  received whichever is more
         readily  determinable.  The  majority  of  the  non-cash  consideration
         received  pertains to services  rendered by consultants  and others and
         have been valued at the estimated value of the services rendered.

         CONCENTRATION OF CREDIT RISK

         Financial   Instruments  that   potentially   subject  the  Company  to
         concentrations  of credit risk consist  principally  of trade  accounts
         receivable.  For the year ended June 30,  2004,  the  Company  had only
         three  customers.  Balances due from these  customers and their related
         sales for the fiscal year ended June 30, 2004 are as follows:


                                      F-9
<PAGE>

RADIX MARINE, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

                                      ACCOUNTS
                                      RECEIVABLE             SALES
                                   ------------------  ------------------
         CUSTOMER    SERVICE       AMOUNT       %       AMOUNT       %
         --------  ------------
            I      R&D Contract       1,987     1.11%    68,956    24.68%
            2      Vessel sales      91,541    51.16%    91,540    32.76%
            3      Fuel sales        85,391    47.73%   118,930    42.56%
                                   --------  --------  --------  --------
                                    178,919   100.00%   279,426   100.00%
                                   ========  ========  ========  ========


         Due to the Company's  financial  condition,  the Company's inability to
         collect  from  customer 2 or 3 could have a  substantial  impact on the
         company's  ability to meet its future financial  obligations.  Further.
         the loss of  business  from any of these  three  customers  would  also
         impact the future financial condition of the Company.

         As of October 10, 2004,  the Company has not collected  from Customer 2
         and has filed for  mediation  relating to the balance  due.  Management
         believes that it will be successful in its collection efforts.

         NEW ACCOUNTING PRONOUNCEMENTS

         In January 2003,  the Financial  Accounting  Standards  Board  ("FASB")
         issued  Interpretation  No. 46,  "Consolidation  of  Variable  Interest
         Entities" (an interpretation of Accounting  Research Bulletin (ARB) No.
         51, "Consolidated Financial  Statements").  Interpretation 46 addresses
         consolidation  by business  enterprises  of entities to which the usual
         condition  of  consolidation   described  in  ARB-51  does  not  apply.
         Interpretation  46 changes the  criteria by which one company  includes
         another entity in its consolidated  financial  statements.  The general
         requirement  to  consolidate  under ARB-51 is based on the  presumption
         that an  enterprise's  financial  statements  should include all of the
         entities  in  which  it has a  controlling  financial  interest  (i.e.,
         majority  voting  interest).  Interpretation  46  requires  a  variable
         interest  entity to be  consolidated  by a company that does not have a
         majority voting interest, but nevertheless, is subject to a majority of
         the risk of loss from the  variable  interest  entity's  activities  or
         entitled  to receive a majority  of the  entity's  residual  returns or
         both. A company that  consolidates a variable interest entity is called
         the primary  beneficiary  of that  entity.  In  December  2003 the FASB
         concluded to revise certain elements of Interpretation 46, primarily to
         clarify the required  accounting  for  interests  in variable  interest
         entities.  Interpretation  46R  replaces  Interpretation  46,  that was
         issued in January 2003.  Interpretation  46R exempts  certain  entities
         from its  requirements  and  provides for special  effective  dates for
         entities that have fully or partially  applied  Interpretation 46 as of
         December 24, 2003. In certain  situations,  entities have the option of
         applying or continuing to apply Interpretation 46 for a short period of
         time before applying  Interpretation 46R. In general,  for all entities


                                      F-10
<PAGE>

RADIX MARINE, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

         that   were   previously    considered    special   purpose   entities,
         Interpretation  46 should be applied in periods  ending after  December
         15, 2003. Otherwise, Interpretation 46 is to be applied for registrants
         who file under  Regulation  SX in periods  ending after March 15, 2004,
         and for  registrants  who file under  Regulation  SB, in periods ending
         after  December 15,  2004.  The Company does not expect the adoption to
         have a material impact on the Company's  financial  position or results
         of operations.

         During  April  2003,  the FASB  issued  SFAS No.  149 -  "Amendment  of
         Statement  133  on  Derivative  Instruments  and  Hedging  Activities,"
         effective for contracts  entered into or modified  after June 30, 2003,
         except as stated below and for hedging  relationships  designated after
         June 30, 2003. In addition,  except as stated below,  all provisions of
         SFAS No. 149 should be applied  prospectively.  The  provisions of SFAS
         No. 149 that relate to Statement  133  Implementation  Issues that have
         been  effective for fiscal  quarters that began prior to June 15, 2003,
         should  continue  to be applied  in  accordance  with their  respective
         effective dates. In addition,  paragraphs 7(a) and 23(a),  which relate
         to  forward  purchases  or sales  of when  issued  securities  or other
         securities  that do not yet exist,  should be applied to both  existing
         contracts  and new  contracts  entered  into after June 30,  2003.  The
         Company has implemented this  pronouncement  and has concluded that the
         adoption has no material impact to the financial statements.

         During May 2003, the FASB issued SFAS No. 150 - "Accounting for Certain
         Financial  Instruments  with  Characteristics  of both  Liabilities and
         Equity," effective for financial  instruments  entered into or modified
         after May 31, 2003,  and otherwise is effective for public  entities at
         the  beginning of the first  interim  period  beginning  after June 15,
         2003. SFAS No. 150 establishes  standards for how an issuer  classifies
         and measures certain financial instruments with characteristics of both
         liabilities  and  equity.   It  requires  that  an  issuer  classify  a
         freestanding  financial  instrument  that  is  within  its  scope  as a
         liability  (or  an  asset  in  some   circumstances).   Many  of  those
         instruments  were  previously   classified  as  equity.   Some  of  the
         provisions  of this  SFAS  No.  150 are  consistent  with  the  current
         definition of liabilities  in FASB Concepts  Statement No. 6, "Elements
         of   Financial   Statements."   The   Company  has   implemented   this
         pronouncement  and has  concluded  that the  adoption  has no  material
         impact to the financial statements.

         In December 2003,  the FASB issued a revised SFAS No. 132,  "Employers'
         Disclosures  about Pensions and Other Post  Retirement  Benefits" which
         replaces  the  previously  issued  Statement.   The  revised  Statement
         increases the existing  disclosures  for defined  benefit pension plans
         and other defined benefit post- retirement plans.  However, it does not
         change the  measurement or recognition of those plans as required under


                                      F-11
<PAGE>

RADIX MARINE, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

         SFAS No.  87,  "Employers'  Accounting  for  Pensions,"  SFAS  No.  88,
         "Employers'  Accounting for  Settlements  and  Curtailments  of Defined
         Benefit Pension Plans and for Termination  Benefits," and SFAS No. 106,
         "Employers"   Accounting  for  Post  Retirement   Benefits  Other  Than
         Pensions."  Specifically,  the revised Statement  requires companies to
         provide  additional  disclosures  about  pension plan  assets,  benefit
         obligations,  cash flows,  and benefit costs of defined benefit pension
         plans and other defined benefit  post-retirement plans. Also, companies
         are required to provide a breakdown of plan assets by category, such as
         debt, equity and real estate,  and to provide certain expected rates of
         return and target  allocation  percentages for those asset  categories.
         The Company has implemented this  pronouncement  and has concluded that
         the adoption has no material impact to the financial statements.

         In  December  2003,  the FASB  issued FIN No.  46R,  "Consolidation  of
         Variable   Interest   Entities.   "  This  requires  that  the  assets,
         liabilities and results of the activity of variable  interest  entities
         be consolidated into the financial statements of the company that has a
         controlling  financial  interest.  It also  provides the  framework for
         determining  whether an entity should be  consolidated  based on voting
         interest or significant  financial support provided to it. The adoption
         of FIN No.  46R did not  have any  impact  on the  Company's  financial
         condition or results of operations.

         RECLASSIFICATION

         Certain amounts have in June 30, 2003 have been reclassified to conform
         with the June 30, 2004's  presentation.  Such  reclassification  had no
         effect on net income as previously reported.

         PENSION PLAN

         The  Company  started a 401(k)  plan  effective  January 1,  2003.  All
         employees employed on the effective date are eligible.  Employees hired
         after the  effective  date are required to have one year of service and
         be at least twenty-one years old. The plan has matching  contributions,
         which  are  discretionary  amounts,  determined  annually  by the  plan
         sponsor. After six years of service the vesting percentage is 100%. For
         the year ended June 30, 2004, the Company's pension expense was zero.


                                      F-12
<PAGE>

RADIX MARINE, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

NOTE 3. ACCOUNTS RECEIVABLE

         ACCOUNTS RECEIVABLE AT JUNE 30, 2004 CONSIST OF THE FOLLOWING

            Trade receivables                     $ 178,919
            Allowance for doubtful accounts         (18,308)
                                                  ---------
                                                  $ 160,611
                                                  =========

NOTE 4.  INTANGIBLE ASSETS

         As part of the purchase of Integrated, the Company acquired intangibles
         assets of  $1,803,324.  Of that  amount,  $1,300,754  was  allocated to
         goodwill  and  $502,570  was  allocated  to the  purchase of a contract
         regarding  the  development  and  production  of  an  Unmanned  Surface
         Vehicle.  The  price  of the  contract  is  being  amortized  over  the
         five-year term of the contract. Amortization expense for the year ended
         June 30, 2004 and 2003 totaled $100,514, and $75,386, respectively.

         Estimated  amortization  expense for the remaining life of the contract
         is as follows:

                  2005        $100,514
                  2006        $100,514
                  2007        $100,514
                  2008        $ 25,128

         Goodwill is assigned to specific  reporting  units and is reviewed  for
         possible  impairment  at least  annually  or more  frequently  upon the
         occurrence  of  an  event  or  when  circumstances  indicate  that  the
         reporting carrying amount exceeds its fair value. During the year ended
         June 30, 2003, the Company determined the carrying amount of net assets
         acquired in the  purchase of  Integrated  exceeded  their fair  values,
         which was  estimated  based upon the present  value of expected  future
         cash inflows.  Accordingly,  a goodwill impairment loss of $750,000 was
         recognized by that  reporting unit during the year ended June 30, 2003.
         For the year ended June 30, 2004, the Company  recognized no impairment
         loss.

NOTE 5.  LEASES

      OPERATING LEASE

      The Company leases its offices in Washington on a month-to-month  basis at
      $1,250 per month. Rent expense for the years ended June 2004 and 2003 were
      $15,000 and $8,940, respectively.


                                      F-13
<PAGE>

RADIX MARINE, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

         CAPITAL LEASE

         In July 2003,  the Company  entered  into a new lease for a vessel that
         was repossessed during the previous year. Under the terms of the lease,
         the Company is required to make 58 monthly payments of $15,208.  If all
         payments  are made  and if other  commitments  are  kept,  title to the
         vessel  transfer  over to the Company.  The lease was  accounted for as
         capital  leases with the vessel being  valued at $587,404,  the present
         value of the minimum lease payments based on an effective interest rate
         of  17.914%.  During the year ended June 30,  2004,  the  Company  paid
         $91,248  toward  this lease and issued  2,095,939  shares of its common
         stock valued at $76,040.

         Minimum  future lease  payments  under the capital lease as of June 30,
         2004 and for each  subsequent  year  during  the lease  term and in the
         aggregate are as follows:

                  June 30, 2005                        $182,496
                  June 30, 2006                         182,496
                  June 30, 2007                         182,496

                  May 31, 2008                          167,288
                                                       --------

                  Total minimum lease
                    payments                            714,776

                  Less amount representing
                    interest                           (203,731)
                                                       --------

                  Present value of net minimum
                    lease payments                     $511,045
                                                       ========


 NOTE 6. NOTES PAYABLE

         CONVERTIBLE DEBENTURE

         In  March of 2004,  the  Company  entered  into a  securities  purchase
         agreement and issued a convertible  debenture with attached convertible
         warrants with an investor.  The amount of the convertible  debenture is
         $300,000 and is assessed interest at an annual rate of 7 3/4 %. The due
         date of the debenture is March of 2006.  The payment of interest  shall
         be in cash or, at the option of the holder,  in shares of common  stock
         of the Company valued at the then conversion price.


                                      F-14
<PAGE>

RADIX MARINE, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

         The  debenture  may be  converted  either in whole or in part up to the
         full  principal  amount in increments of $1,000 into common stock.  The
         number of common  shares into which the  debenture  may be converted is
         equal to the dollar amount of the debenture being converted  multiplied
         by  eleven,  minus the  conversion  price  multiplied  by ten times the
         dollar amount of the  debenture  being  converted,  with product of the
         above  computation  divided by the conversion  price. The Company shall
         pay the holder on the conversion date any accrued interest.

         The  conversion  price  shall be equal to the lesser of $0.20 or 80% of
         the average of the three lowest volume  weighted  average prices during
         the twenty trading days prior to the election to convert.

         If on the day of conversion the volume weighted  average price is below
         $0.05,  then the Company  shall have the right to prepay the portion of
         the debenture  that the holder  elected to convert plus any accrued and
         unpaid interest at 150% of such amount. If the Company elects to prepay
         that portion of the debenture then the holder has the right to withdraw
         its conversion notice.

         In the event that the  Company's  registration  statement  has not been
         declared  effective,  the holder may demand  repayment  of $150% of the
         debenture,  together will all accrued and unpaid interest in cash. Such
         repayment must be made within three days. In addition, the Company must
         issue  immediately  to the holder 50,000 shares of common stock and pay
         $15,000 for each thirty day period  during which the  principal  amount
         including  interest  remains  unpaid  with the  amount to  increase  to
         $20,000 for each thirty day period  after the first  ninety day period.
         During the year-end June 30, 2004,  the investor  converted  $11,500 of
         the  indebtedness  in exchange for  3,145,834  shares of the  Company's
         common stock.  The balance of the convertible  debenture as of June 30,
         2004 amounted to $290,375,  which includes  accrued interest of $1,875.
         Interest charged to operations  relating to this debenture for the year
         ended June 30, 2004 totaled $6,687.

         In connection with the issuance of the $300,000 debenture,  the Company
         also issued warrants to the investor granting the investor the right to
         purchase  3,000,000  shares of the Company's common stock. The exercise
         price of the warrants is $1.00.  The expiration date of the warrants is
         March 2007.

         The holder has the right to  exercise at least 5% of the  warrants  per
         month provided that the common shares are available. If the holder does
         not exercise at least 5% of the warrants in any month,  then the holder
         will not be entitled  to collect  interest  on the  debenture  for that
         month.

         If the  Company  does not  timely  honor a  debenture  conversion  or a
         warrant  exercise  and in the ten days the holder  purchases  shares of
         common  stock of the  Company,  then the  Company  must pay cash to the
         holder,  as liquidated  damages,  an amount equal to the purchase price
         exceeded  the  principal  and/or  interest  amount of the  debenture or
         warrant for which such  conversion  or exercise was not timely  honored
         with interest at 15% per annum.


                                      F-15
<PAGE>

RADIX MARINE, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

         In the above  transaction,  the investor  advanced $250,000 towards the
         future  exercise  of  the  above-indicated   warrants.  Of  the  amount
         advanced,  the investor  exercised  warrants during the year ended June
         30, 2004 to  purchase  90,000  shares of the  Company's  common  stock,
         thereby reducing the amount advanced to $160,000 at June 30, 2004.

         In addition,  $25,000 was received during the year ended June 30, 2004,
         through the exercise of warrants for 25,000 shares of common stock

         OBLIGATION UNDER LICENSING AGREEMENT

         In  the  purchase  of  Integrated  Maritime,  the  Company  assumed  an
         obligation  evidenced by a promissory  note that Integrated owed on the
         purchase of its contract to develop the Unmanned Surface Vehicle. Under
         the terms of the obligation,  total payments cannot exceed $750,000 and
         the note matures on April 25, 2005.  Upon the maturity of the note, any
         remaining amounts due under the note are forgiven.  However, during the
         term of the Note,  the Company is required to pay the holder 20% of all
         amounts raised and from the profit received under the contract.

         The  obligation  and the  related  asset were  valued at the  estimated
         present value of the expected future payments over the term of the note
         of  $520,512.  In  calculating  the present  value the Company  used an
         interest  rate  of 8% per  annum.  In  addition,  the  Company  accrued
         interest  on this  obligation  during  the year  ended  June  30,  2004
         totaling $74,789. During the year the Company paid $79,605 towards this
         obligation and issued  800,000 shares of the Company's  common stock to
         creditors  of the note  holder on its behalf that  further  reduced the
         obligation  by $40,000.  The balance  due at June 30,  2004,  including
         accrued  interest,  was  $467,205.  Under  the terms of  payment,  this
         promissory note is in default.

         PAYABLE TO OTHERS

         During the year ended June 30, 2004,  the Company  received  loans from
         third parties  totaling  $429,805 and made payments of $79,124.  Of the
         $429,805 received, $314,059 was in from of convertible notes. The notes
         bear interest at annual rate of 8% and were due on various dates. Under
         the terms of each note,  the note  holder had the right to convert  the
         note into  shares of the  Company's  common  stock based on a price per
         share equal to 50% of the twenty-day  trailing average closing price of


                                      F-16
<PAGE>

RADIX MARINE, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

         the  Company's  common stock  immediately  prior to the date of initial
         financing.  During  the year  ended  June 30,  2004,  all of the  notes
         comprising $314,059 were converted into 10,554,626 of the common stock.
         The Company did not pay any interest on the notes during the year ended
         June 30, 2004 as the notes were immediately converted on date the funds
         from the note were received.

         In addition,  the Company cancelled $87,009 of indebtedness due a third
         party  during the year ended June 30,  2004  through  the  issuance  of
         1,434,770  shares of the Company's common stock. The balance of amounts
         payable  to  others  at  June  30,  2004  total   $200,908,   which  is
         non-interest bearing and due on demand.

         A recap of notes payable as of June 30, 2004 is as follows:

            Amount due under convertible debenture  $ 290,375
            Obligation under licensing agreement      467,205
            Payable to third parties                  200,908
              Total                                   958,488
            Less current maturities                  (669,988)
                                                    ---------

            Long-term debt                          $ 288,500
                                                    =========


NOTE 7. RELATED PARTY TRANSACTIONS

         During the year ended June 30, 2004, the Company's  president  advanced
         $42,830 and made  payments  back to her totaling  $61,029.  Balances of
         loans due to officers,  directors, and other related parties as of June
         30, 2004 amounted to $157,630.  These loans are  non-interest  bearing,
         unsecured, and due on demand.

NOTE 8. INCOME TAXES

         Income taxes are  provided  based on earnings  reported  for  financial
         statement purposes pursuant to the provisions of Statement of Financial
         Accounting Standards No. 109 ("FASB 109").

         FASB 109 uses the asset and  liability  method to  account  for  income
         taxes.  That requires  recognizing  deferred tax liabilities and assets
         for the  expected  future tax  consequences  of  temporary  differences
         between  tax  basis  and  financial   reporting  basis  of  assets  and
         liabilities.


                                      F-17
<PAGE>

RADIX MARINE, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

         An allowance has been provided for by the Company which reduced the tax
         benefits  accrued by the Company for its net operating  losses to zero,
         as it cannot be determined  when, or if, the tax benefits  derived from
         these operating  losses will  materialize.  For the year ended June 30,
         2003 and 2004,  the  allowances  amounted  to  $430,429,  an  $604,568,
         respectively.  As of June 30,  2004,  the Company has unused  operating
         loss carry  forwards,  which may  provide  future tax  benefits  in the
         amount of  approximately  $4,000,000,  which  expire in  various  years
         through 2024.


NOTE 9. STOCK ACTIVITY

         During the year ended June 30,  2004,  the  Company  issued  35,002,883
         shares of its common stock,  of which 800,000 shares were issued in the
         cancellation of $40,000 of indebtedness due on the Company's  licensing
         obligation,  792,240  were issued in  cancellation  of accrued rent and
         trade  payables  totaling  $22,860,  1,434,770  shares  were  issued in
         cancellation of indebtedness  totaling $87,009,  10,554,626 shares were
         issued in the  conversion of $314,059 of convertible  notes,  3,145,834
         shares  were  issued in the  conversion  of $11,500 of the  convertible
         debenture,  4,500,000  shares were issued for legal services  valued at
         $400,000 which were charged to operations, 2,095,939 shares were issued
         on the Company  vessel lease  reflecting  5 lease  payments of $76,040,
         4,806,474 shares were issued to various consultants for services valued
         at $433,092 which was charged to operations, 615,000 shares were issued
         through the exercise of warrants for  $115,000,  2,500,000  shares were
         issued in exchange for $150,000,  and 4,258,000  shares were issue to a
         consultant  for  services  rendered in  connection  with the  Company's
         private  offerings,  which was valued at $455,220 which were charged to
         equity.  The Company valued the shares issued for the  cancellation  of
         indebtedness at the value of the shares issued on the cancellation date
         of the  respective  debt. For the year ended June 30, 2004, the Company
         realized a loss on the  difference  between  the value of these  issued
         shares and the balance of the canceled date totaling $81,794.


NOTE 10. CONTINGENT LIABILITIES

         A former attorney of the Company reflects a outstanding balance due him
         from the Company of  approximately  $50,000.  The Company believes that
         through cash payments and through the issuances of shares of its common
         stock to the  attorney,  the Company does not believe that there is any
         balance due him.  Currently,  the Company has  contacted  the  attorney
         regarding  the  disputed  balance  due,  but  the  attorney  has yet to
         respond.

         A complaint  has been filed  against the Company on June 29, 2004,  for
         sending out unsolicited advertisements via telephone facsimile machines
         in violation of the United States  Telephone  Consumer  Protection Act.
         The complaint seeks to have class action certified.  Each member of the


                                      F-18
<PAGE>

RADIX MARINE, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

         affected  class,  could  assert  a claim of $500.  The  sending  of the
         unsolicited material was not authorized by the Company.  Management has
         retained an attorney to  represent  them in this matter and  management
         believes that class action status will not be granted.


NOTE 11 - MANAGEMENT'S  DISCUSSION ON FUTURE OPERATIONS

         The Company is in the  development  stage and relies upon advances from
         related  parties  and funds  received  through the sale of its stock to
         meet its current operating  requirements.  As shown in the accompanying
         financial  statements,  the Company  incurred net losses of $1,229,796,
         and $1,727,335  respectively for the years June 30, 2003, and 2004, and
         as of June 30, 2004,  the Company's  current  liabilities  exceeded its
         current  assets  by  $739,215  and  had  an   accumulated   deficit  of
         $4,320,027.  Management is actively pursuing customer contracts and has
         commenced  operating  its  light  manufacturing  for  marine  and other
         products in September 2004. The Company is still providing  services on
         its  government  contract.   The  Company  is  still  actively  seeking
         financing  through  loans and the  offering of its  equity.  Management
         believes  that these  sources  will allow the  Company to continue as a
         going  concern.  However,  no  assurances  can be made that  current or
         anticipated  sources of funds will enable the Company to finance future
         periods' operations.


NOTE 12 - SUBSEQUENT EVENTS

               In the Company`s annual meeting of shareholders,  it was approved
         to increase the number of authorized  shares of Company's  common stock
         from 75,000,000 shares to 250,000,000.

         In August 2004, the Company  entered into a lease of various  equipment
         utilized in its  manufacturing  facility that  commenced  operations in
         September 2004. The value of the equipment is approximately $52,000 and
         is  payable  in 12 monthly  installments  of $4,189.  At the end of the
         lease, the Company has the option to purchase the equipment for $2.

         From July 1, 2004  through  October  14,  2004 the  company  has issued
         additional shares of stock. A total of 5,376,275 shares of common stock
         were issued to retire  $11,000 of the  Convertible  debenture,  110,000
         shares of common  stock were issued to retire  $110,000 of the pre-paid
         warrant;  1,250,000  restricted  shares  were  issued to members of the
         board of directors for  compensation;  and 782,034 shares of restricted
         common stock were issued to retire $14,300 in debt.


                                      F-19
<PAGE>

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

      In October 2002, we dismissed Kurt D. Salinger,  CPA and engaged  Jonathon
Reuben,  C.P.A.  ("Reuben") as our auditors.  Our  management  was familiar with
Reuben and believed the new auditing accountant would provide quality service in
a timely manner.  Our Board of Directors  approved the change in accounting firm
as of October 01,  2002.  The new  accounting  firm was not  consulted  prior to
engagement on any specific accounting matter either completed or proposed. Prior
to such  engagement  we have never had any  disagreements  with  accountants  on
matters of accounting,  financial disclosure, matter of accounting principles or
practices,  or auditing  scope or procedure;  nor had any principal  accountant,
currently  or  in  past  recent  years,   resigned  or  declined  to  stand  for
re-election.

      On September 29, 2003, we dismissed Singer Lewak Greenbaum & Goldstein LLP
("Singer") as our  independent  auditor.  Singer was engaged as our  independent
auditor from May 16, 2003 to September 29, 2003. Singer has issued no reports on
financial statements of our company during the period that Singer was engaged or
for the years ended June 30, 2001 and 2002. On June 5, 2003,  Singer reported on
the financial statements of Integrated Maritime Platforms International Inc, our
wholly-owned subsidiary, for the year ended December 31, 2002 and for the period
from April 9, 2001 inception to December 31, 2001.

      The  decision to dismiss  Singer was  approved by our Board of  Directors.
During the period that  Singer was engaged  (and each of the two (2) years ended
June 30, 2001 and 2002) there were no  disagreements on any matter of accounting
principles or practices,  financial statement  disclosure,  or auditing scope or
procedures, which disagreements,  if not resolved to Singer's satisfaction would
have caused it to make  reference in connection  with its opinion to the subject
matter of the disagreement.  During the period that Singer was engaged (and each
of the two (2) years ended June 30,  2001 and 2002)  Singer did not advise us of
any "reportable  events" as described in Item 304(a)(1)(v) of Regulation S-K. We
requested  Singer  to  furnish a letter  addressed  to the  Commission,  stating
whether it agrees  with the  statements  made by us,  and,  if not,  stating the
respects in which it does not agree.

      On September  29, 2003, we engaged  Reuben as our principal  accountant to
audit our financial statements. During the two (2) years ended June 30, 2001 and
2002, we did not consult Reuben on any matters described in Item 304(a)(2)(i) of
Regulation  S-K.  During each of the two (2) years ended June 30, 2001 and 2002,
we did not consult  Reuben on any matters  described  in Item  304(a)(2)(ii)  of
Regulation  S-K. We have provided Reuben with the opportunity to furnish it with
a  letter   addressed  to  the  Commission   containing  any  new   information,
clarification of the  Corporation's  expression of its views, or the respects in
which it does not agree with the  statements  made herein by the  Corporation in
response to Item 304(a).

      On May 16, 2003, we dismissed Reuben as our independent auditor.  Reuben's
reports on the our  financial  statements  for each of the years  ended June 30,
2001 and 2002,  and the  subsequent  interim  period ended May 16, 2003, did not
contain an adverse  opinion or disclaimer of opinion,  and were not qualified or
modified as to audit scope or  accounting  principles.  The  decision to dismiss
Reuben was approved by our Board of Directors.  During each of the two (2) years
ended June 30, 2001 and 2002,  and the  subsequent  interim period ended May 16,
2003,  there were no  disagreements  on any matter of  accounting  principles or
practices,  financial  statement  disclosure,  or auditing  scope or procedures,
which disagreements,  if not resolved to Reuben's satisfaction would have caused
him to make reference in connection  with their opinion to the subject matter of
the disagreement. During each of the two (2) years ended June 30, 2001 and 2002,
and the subsequent  interim period ended May 16, 2003,  Reuben did not advise us
of any "reportable  events" as described in Item 304(a)(1)(v) of Regulation S-K.
We requested  Reuben to furnish a letter  addressed to the  Commission,  stating
whether it agrees  with the  statements  made by us,  and,  if not,  stating the
respects in which it does not agree. A copy of this letter,  dated as of May 27,
2003, is filed as Exhibit 16.1 to our report on Form 8-K/A.

      On May 16,  2003,  we engaged  Singer  Lewak  Greenbaum  &  Goldstein  LLP
("Singer") as our principal accountant to audit our financial statements. During
each of the two (2)  years  ended  June 30,  2001 and 2002,  and the  subsequent
interim  period  ended May 16,  2003,  we did not consult  Singer on any matters
described in Item  304(a)(2)(i)  of Regulation  S-K.  During each of the two (2)
years ended June 30, 2001 and 2002, and the subsequent  interim period ended May
16,  2003,  we  did  not  consult  Singer  on  any  matters  described  in  Item
304(a)(2)(ii) of Regulation S-K.


                                       14
<PAGE>

ITEM 8A. CONTROLS AND PROCEDURES

      As of June 30, 2004, an evaluation was performed under the supervision and
with  the  participation  of  the  Company's  management,  including  the  Chief
Executive  Officer,  of the  effectiveness  of the design and  operation  of the
Company's  disclosure  controls and procedures.  Based on that  evaluation,  the
Company's management,  including the Chief Executive Officer, concluded that the
Company's disclosure controls and procedures were effective as of June 30, 2004.
There have been no significant  changes in the Company's internal controls or in
other factors that could  significantly  affect internal controls  subsequent to
June 30, 2004.

ITEM 8B. REPORTS ON FORM 8-K

      The Company filed a Form 8-K on October 4, 2002, pursuant to its Change in
Certifying Accountant.

      The Company filed a Form 8-K/A on May 28, 2003,  pursuant to its Change in
Certifying Accountant.

      The Company filed a Form 8-K/A on June 20, 2003,  accompanied by financial
statements,  pursuant to its Agreement and Plan of Merger dated April 4, 2003 by
and among Modern MFG Services,  Inc.,  Modern  Acquisition,  Co. and  Integrated
Maritime Platforms International, Inc.


                                    PART III

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

Directors and Officers

The following  information  sets forth the names of our officers and  directors,
their present positions with us, and their biographical information.

Name                                  Age         Office(s) Held
------------------------------        ---         ------------------------------

Kathleen R. Bright                    48          Director, Chief Executive
Officer and President

Roy A. H. Rainey                      50          Director

Roger Janssen                         40          Director

Scott Edwards                         55          Vice President

Monica Langfeldt                      35          Treasurer

Lieutenant  General William J.        72          Director
Hilsman, U.S. Army (RET.)

Glenn Turcotte                        64          Director

KATHLEEN R. BRIGHT,  PRESIDENT AND CHIEF EXECUTIVE OFFICER, has over twenty five
years  in  defense  contract  management,   business   development,   managerial
accounting, human resources,  training systems, logistics, and environmental and
security programs.  She holds a Bachelor's in Mathematics from the University of
Washington and a Master's in Business Administration from University of Phoenix.
Ms. Bright served as the President of IMPII for three years. Prior experience in


                                       15
<PAGE>

defense  contract  management  includes  Contract  Administrator  for the  Naval
Undersea  Warfare  Center  (NUWC)   Environmental,   Hazardous  Materials,   and
Industrial Engineering Services Contract ($16m);Trident IR2 Engineering Services
Contract($1.5m); NAVSHIPYD Public Works Department Engineering Services Contract
($5 m); and Planning and  Engineering  for Aircraft  Carriers  Service  Contract
($2.5 m).

ROY RAINEY -  SECRETARY  OF RADIX  MARINE,  BOARD  MEMBER OF RADIX  MARINE,  AND
SECRETARY OF  INTEGRATED  MARITIME  PLATFORMS,  has over twenty years of law and
business experience,  combining an undergraduate degree in Accounting with a law
degree from the University of  Washington.  In addition to maintaining a private
practice, Mr. Rainey served a four year term as Judge of the Bremerton Municipal
Court.  In 1991,  Judge  Rainey  was  recognized  by the  Washington  State  Bar
Association as the outstanding judge in the State of Washington. Roy Rainey will
be responsible for handling all legal and contractual matters.

ROGER   JANSSEN,   DIRECTOR,   has  over  twenty  years  of  experience  in  the
manufacturing  industry.  For the past fourteen  years he has owned and operated
his  own  business  in  the  greater  Seattle  area.  Specific  clients  include
Microsoft,  Boeing,  Starbucks  Corporation,  Precor, and Eldec. Mr. Janssen has
guided  several  manufacturing  firms  during their start up phase with a strong
focus on procurement excellence.

SCOTT EDWARDS - VICE PRESIDENT OF RADIX MARINE, OPERATIONS MANAGER OF INTEGRATED
MARITIME PLATFORMS. Mr. Edwards has a BS in Naval Science and Architecture, from
Oregon  State  University.  Serves as the  Project  Manager  for the  design and
manufacture of the Challenger Class  multimission  craft. Mr. Edwards has twenty
four years of  commissioned  service in the US Navy and Naval  Reserve  with two
tours in Vietnam.  Specialized in Physical Security and  Antiterrorism  retiring
the 1996 with the rank of Captain.  Mr. Edwards has 15 years experience in small
craft  operation  and  maintenance  and has served as  president  and CEO of two
manufacturing facilities. In concert with Ms. K. Bright, Mr Edwards successfully
pursued and managed a $16 million dollar  Environmental  Services  Contract with
the Naval Underseas Warfare Center, Keyport Division, where he served as Program
Manager. Mr. Edwards brings significant experience in the area of harbor/coastal
security and  antiterrorism  with the US armed  forces.  Mr.  Edwards also bring
significant experience in naval weaponry and waterfront operations.

MONICA  LANGFELDT - TREASURER/CFO  OF RADIX MARINE.  Ms.  Langfeldt's  education
includes  LL.M in Taxation New York  University,  J.D.  Seton Hall  University -
School of Law, and a B.S. in Finance and Economics,  University of Idaho. She is
currently employed by Kaye Scholer, LLP as a litigation attorney. Previously she
worked at  Pricewaterhouse  Coopers and an  International  Senior Tax  Associate
where  she  assisted   clients  in  debt  push-down  and  double-dip   financing
strategies,   structured   inbound   investments  for  foreign  high  net  worth
individuals, and developed strategies for passive foreign investment companies.

LIEUTENANT GENERAL WILLIAM J. HILSMAN,  U.S. ARMY (RET.),  DIRECTOR.  Lieutenant
General Hilsman is co-founder and Chief Executive Officer of DTI  International,
Inc. (DTI), a Philadelphia-based  consulting company specializing in information
system technology,  distributed learning technologies and programs, and Homeland
Security IT solutions.  Before  forming DTI, Mr.  Hilsman was with  InterDigital
Communications  Corporation  for over ten  years.  InterDigital  is a pioneer in
digital wireless local loop systems using TDMA and CDMA technology.  Mr. Hilsman
joined InterDigital as one of the founders of the company in 1983, and served as
President, Chief Executive Officer and Chairman of the Board for over ten years.
Prior to joining InterDigital,  Mr. Hilsman was Chief of Defense  Communications
and Manager of the National Communications System in Washington,  D.C., where he
was  responsible  for the DoD worldwide  communications  and command and control
systems.  He  also  led  the  government  planning  on the  response  to  AT&T's
divestiture of the Bell System operating companies.  During his military career,
he served in a number of key posts,  including  Commanding General of the Army's
Research and Development  Laboratories at Fort Monmouth, New Jersey,  Commanding
General of the U.S. Army Communications Training Center at Fort Gordon, Georgia,
and President of the US Army Combat Arms Training  Board (CATB) at Fort Benning,
Georgia. Mr. Hilsman's tours of duty included the 1st Infantry Division, the 9th
Infantry Division, and the 4th Armored Division of the US Army.


                                       16
<PAGE>

Mr.  Hilsman  currently  serves on the Army  Science  Board  Summer Study on the
Future Combat System in Urban Combat, Stabilization and Peacekeeping Operations.
He recently  chaired the National  Guard and Reserve Forces panel on the Defense
Science Board Summer Study on the Role of the  Department of Defense in Homeland
Security.  Mr.  Hilsman was also a member of the Defense  Science  Board's  task
force on Training for Future Conflicts. In addition, Mr. Hilsman has served as a
member of the Defense  Science Board Summer Study on Tactics and  Technology for
Army 21st Century  Military  Superiority,  as a  consultant  to the Army Science
Board in distance learning, and as a consultant to the Defense Advanced Research
Projects  Agency  (DARPA).  He  initiated  and later  served on the  President's
National Security  Telecommunications  Advisory  Committee  (NSTAC), a committee
composed of chief executive officers from the telecommunications and information
systems  industry,  advising the  President  on issues of national  security and
emergency  preparedness.  In addition,  Mr.  Hilsman is the founder and Chairman
Emeritus of the National Science Center,  Inc., a not-for-profit  corporation in
partnership  with the United  States Army and the private  sector,  dedicated to
motivating  America's youth to pursue education and careers in math and science.
He also chairs the National  Guard's Bureau (NGB) Strategic Issues Task Force to
address the roles and missions of the NGB information  technology systems in the
year 2010.  Mr.  Hilsman led the  Institute for Defense  Analysis  study team on
distributed  learning,  strategic planning for the Army Training Support Center,
and training of the digital army of the future.  Mr. Hilsman  graduated from the
United States  Military  Academy at West Point in 1954 and, in 1962,  received a
Masters Degree in Electrical  Engineering  with a major in Computer Science from
Northeastern  University in Boston,  Massachusetts.  Mr.  Hillsman  attended the
Army's Command and General Staff College at Fort  Leavenworth and the Industrial
College of the Armed Forces in Washington, DC.

Mr. Hilsman serves on three  non-profit  Boards of Directors today: the National
Science Center,  Inc., the Community Learning and Information  Network,  and the
Network for  Instructional  TV, Inc.,  all dedicated to improving  education and
career opportunities for America's youth.

GLENN  TURCOTTE,  DIRECTOR.  Since  1976,  Mr.  Turcotte  has  served in various
capacities  for Katy  Industries,  Inc., a company  engaged in the production of
maintenance  and  electrical  products.  From June 1995 through  June 2001,  Mr.
Turcotte  served as an Executive  Vice  President  and Director of Katy. In June
2001, Mr. Turcotte  resigned from Katy Industries,  Inc. as a result of a change
in control of the company.  Mr.  Turcotte  also served on the Board of Directors
for  USA/Republic of China Economic  Council.  Mr.  Turcotte  graduated from the
University of Minnesota in 1962.

      All directors  hold office until the next annual  meeting of  shareholders
and until their successors are elected.  Officers are elected to serve,  subject
to the  discretion  of the  Board  of  Directors,  until  their  successors  are
appointed.  Directors do not receive cash  compensation for their services to us
as directors,  but are reimbursed for expenses  actually  incurred in connection
with attending meetings of the Board of Directors.

Significant Employees

      As of October  15,  2004,  we have 8 full-time  employees  and 5 part-time
employees. As we expand, additional engineering, technical, and management staff
will be required.

Committees of the Board Of Directors

      We  presently  do not have an  audit  committee,  compensation  committee,
nominating  committee,  an executive committee of our board of directors,  stock
plan  committee or any other  committees.  However,  our board of directors will
establish various committees during the current fiscal year.

Terms of Office

      Our  directors  are appointed for a one-year term to hold office until the
next annual general  meeting of the holders of our Common Stock or until removed
from office in  accordance  with our by-laws.  Our officers are appointed by our
board of directors and hold office until removed by our board of directors.


                                       17
<PAGE>

ITEM 10. EXECUTIVE COMPENSATION

<TABLE>
<CAPTION>
                                    SUMMARY COMPENSATION TABLE

                                                      Long Term Compensation
                                               -----------------------------------
                      Annual Compensation               Awards            Payouts
                    --------------------------------------------------------------
                                       Other                  Securities
                                      Annual                    Under-
Name and                              compen-     Restricted    lying       LTIP    All Other
Principal           Salary   Bonus     sation        Stock     Options/    Payouts   Compen-
Position      Year    ($)     ($)       ($)         Awards     SARs (#)      ($)    sation ($)
----------------------------------------------------------------------------------------------
<S>           <C>  <C>        <C>       <C>       <C>             <C>        <C>     <C>
Kathleen      2002 25,920(1)  --        --        250,000(2)      --         --      --
Bright        2003 10,080(1)  --        --           --           --         --      --
President     2004 12,960(1)  --        --           --           --         --      --
and Chief
Executive
Officer
</TABLE>

(1) Represents a salary received from our  wholly-owned  subsidiary,  Integrated
Marine Platforms International, Inc.

(2) Represents 250,000 shares of restricted stock issued in August 2004.

Outstanding Stock Options

      We have not  granted  any stock  options  and do not have any  outstanding
stock options.  Accordingly,  our officers and directors do not hold any options
to purchase shares of our common stock.

Compensation Of Directors

      Our  directors  do not receive  cash  compensation  for their  services as
directors or members of committees of the board.

Employment Agreement

      An employment  agreement for Kathleen  Bright,  as President of Integrated
Maritime,  is no longer in force as of the date of her  appointment as President
of Radix Marine.

2004 Stock Incentive Plan

      On August 5, 2004, we held our annual meeting of shareholders  pursuant to
which our  shareholders  approved our 2004 Employee Stock  Incentive Plan and to
authorize 5,000,000 shares of Common Stock for issuance under the Plan.

      The 2004 Incentive  Plan was adopted by the Board of Directors.  The Board
of  Directors  has  initially  reserved  2,000,000  shares of  Common  Stock for
issuance under the 2004 Incentive Plan.  Under the Plan,  options may be granted
which are intended to qualify as Incentive Stock Options  ("ISOs") under Section
422 of the  Internal  Revenue  Code  of  1986  (the  "Code")  or  which  are not
("Non-ISOs") intended to qualify as Incentive Stock Options thereunder.

      The 2004  Incentive Plan and the right of  participants  to make purchases
thereunder  are intended to qualify as an "employee  stock  purchase plan" under
Section 423 of the Internal  Revenue Code of 1986, as amended (the "Code").  The
2004 Incentive Plan is not a qualified deferred  compensation plan under Section
401(a) of the Internal  Revenue Code and is not subject to the provisions of the
Employee Retirement Income Security Act of 1974 ("ERISA").

      The primary  purpose of the 2004  Incentive  Plan is to attract and retain
the best available  personnel for the Company in order to promote the success of
the Company's business and to facilitate the ownership of the Company's stock by
employees.  In the event that the 2004 Incentive Plan is not adopted the Company
may  have  considerable   difficulty  in  attracting  and  retaining   qualified
personnel, officers, directors and consultants.


                                       18
<PAGE>

      The 2004  Incentive  Plan,  when  approved,  will be  administered  by the
Company's  Board of  Directors,  as the Board of Directors  may be composed from
time to time.  All questions of  interpretation  of the 2004  Incentive Plan are
determined  by the  Board,  and its  decisions  are final and  binding  upon all
participants.  Any  determination  by a majority  of the members of the Board of
Directors at any meeting,  or by written consent in lieu of a meeting,  shall be
deemed to have been made by the whole Board of Directors.

      Notwithstanding the foregoing,  the Board of Directors may at any time, or
from time to time, appoint a committee (the "Committee") of at least two members
of the Board of  Directors,  and delegate to the  Committee the authority of the
Board of Directors to administer the Plan. Upon such appointment and delegation,
the Committee  shall have all the powers,  privileges and duties of the Board of
Directors,  and  shall  be  substituted  for  the  Board  of  Directors,  in the
administration of the Plan, subject to certain limitations.

      Members of the Board of Directors who are eligible employees are permitted
to  participate  in the 2004  Incentive  Plan,  provided  that any such eligible
member  may not vote on any  matter  affecting  the  administration  of the 2004
Incentive  Plan or the  grant  of any  option  pursuant  to it,  or  serve  on a
committee appointed to administer the 2004 Incentive Plan. In the event that any
member of the Board of Directors is at any time not a "disinterested person", as
defined in Rule 16b-3(c)(3)(i)  promulgated  pursuant to the Securities Exchange
Act of 1934, the Plan shall not be administered  by the Board of Directors,  and
may  only  by  administered  by a  Committee,  all  the  members  of  which  are
disinterested persons, as so defined.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

      The following table sets forth all individuals  known to beneficially  own
5% or more of the Company's  common stock, and all officers and directors of the
registrant,  with the amount and percentage of stock  beneficially  owned as per
the Shareholder List as of June 30, 2004.

Name and Address              Amount and Nature
Of Beneficial Holder          of Beneficial Ownership       Percent
--------------------          -----------------------       -------

Roger Janssen                 3,612,500 shares              5.4%
403 Kenrick Place
Burlington, WA 98233

Kathleen Bright               1,750,000                     2.6%
4105 Kennedy Dr.
Bremerton, WA 98310

Roy Rainey                    1,400,000                     2.1%
1854 Kint Drive
Bremerton, WA 98311

Monica Langfeldt                250,000                     *
326 E 65th Street #19
New York, NY 10021

Scott Edwards
P.O. Box 207
Keyport, WA 98345                     0                     *

* Less than 1%


                                       19
<PAGE>

Security Ownership of Management.

      We are not  aware of any  arrangement  that  might  result  in a change in
control in the future.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

      None of our directors or officers,  nor any proposed  nominee for election
as one of our  directors,  nor any person who  beneficially  owns,  directly  or
indirectly,  shares  carrying more than 10% of the voting rights attached to our
outstanding shares, nor any of our promoters,  nor any relative or spouse of any
of the foregoing persons has any material interest,  direct or indirect,  in any
transaction  since the date of our  incorporation  or in any presently  proposed
transaction which, in either case, has or will materially affect us.

ITEM 13. EXHIBITS

Exhibits

Exhibit 2.1   Agreement  and Plan of  Merger,  dated  April 4, 2003 by and among
              Modern MFG Services,  Inc., Modern Acquisition Co., and Integrated
              Maritime Platforms International, Inc.(1)

Exhibit 3.1:  Articles of Incorporation(2)

Exhibit 3.2:  Certificate of Amendment of the Articles of Incorporation(2)

Exhibit 3.2:  By-laws(2)

Exhibit 16.1  Letter on Change in Certifying Accountants(3)

Exhibit 21.1  Subsidiaries of the Registrant

Exhibit 31.1  Certification  by  Kathleen  Bright,   Chief  Executive   Officer,
              pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

Exhibit 31.2  Certification  by Scott Edwards,  Acting Chief Financial  Officer,
              pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

Exhibit 32.1  Certification  by  Kathleen  Bright,   Chief  Executive   Officer,
              pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section
              906 of the Sarbanes-Oxley Act of 2002.

Exhibit 32.2  Certification  by Scott Edward,  Acting Chief  Financial  Officer,
              pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section
              906 of the Sarbanes-Oxley Act of 2002.

(1)  Incorporated  by reference from our Form 8-K/A filed with the Commission on
June 20, 2003.

(2) Incorporated by reference from our registration statement on Form 10-SB12G/A
filed with the Commission on June 9, 1997 - File No. 000-22027.

(3)  Incorporated  by reference from our Form 8-K/A filed with the Commission on
May 28, 2003 and our Form 8-K/A filed with the Commission on October 10, 2003

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES.

      Audit Fees.  The aggregate fees billed by our auditors,  for  professional
services rendered for the audit of the Company's annual financial statements for
the years  ended June 30,  2004 and June 30,  2003,  and for the  reviews of the
financial  statements included in the Company's Quarterly Reports on Form 10-QSB
during those fiscal years were $49,564.55, and $13,660.22, respectively.


                                       20
<PAGE>

      Tax Fees.  The Company  incurred fees to auditors of $5,932 and $1,009 for
tax  compliance  matters  during the fiscal  years ended June 30, 2004 and 2003,
respectively.

      All Other Fees.  For the fiscal year ended June 30, 2004,  the Company did
not incur fees to auditors for services rendered to the Company,  other than the
services covered in "Audit Fees" or "Tax Fees."


                                       21
<PAGE>

SIGNATURES

      In  accordance  with Section 13 or 15(d) of 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.


                                       Radix Marine, Inc.


                                       By: /s/ Kathleen Bright, President
                                           -------------------------------------
                                       Date: October 15, 2004
                                             -----------------------------------

                                       By: /s/ Scott Edwards, Acting CFO
                                           -------------------------------------
                                       Date: October 15, 2004
                                             -----------------------------------


                                       22