SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-KSB

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

    For the fiscal year ended December 31, 2002

                         Commission File Number 0-28375


                            SILVERADO FINANCIAL, INC.
                        (Formerly as Rhombic Corporation)
             (Exact name of registrant as specified in its charter)

           Nevada                                      86-0824125
(State or other jurisdiction of             (IRS Employer Identification Number)
 incorporation or organization)

             1475 South Bascom Avenue, Suite 210, Campbell, CA 95008
               (Address of principal executive offices) (Zip Code)

                        Telephone Number: (408) 371-2301

           Securities registered pursuant to Section 12(b) of the Act:

                                                 Name of each exchange on
   Title of each class                               which registered
   -------------------                               ----------------
         None                                             None

           Securities registered pursuant to Section 12(g) of the Act:

                                  Common Stock
                                (Title of Class)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days. Yes [X] No [ ]

Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulation  S-K ((S) 229.405 of this chapter) is not  contained  herein,  and
will not be  contained,  to the best of  registrant's  knowledge,  in definitive
proxy or information  statements  incorporated  by reference in Part III of this
Form 10-K or any amendment to this Form 10-K. [ ]

At December 31, 2002,  the  aggregate  market value of the  registrant's  Common
Stock held by non-affiliates of the registrant was approximately $1,250,000

At April 7, 2003, the number of shares outstanding of registrant's  Common Stock
was 54,173,936.
<PAGE>
                                     PART I

ITEM 1 - BUSINESS

GENERAL

SILVERADO FINANCIAL, INC. ("Silverado" or the "Company"), is a development-stage
company  incorporated under the laws of the State of Nevada. The corporation was
initially  formed on February 26, 1987 as Toledo Medical  Corporation.  The name
was changed to Almaz Space Corporation on February 9, 1991 and to Ready When You
Are Funwear, Inc. on April 14, 1992. On December 30, 1994 a group of individuals
acquired control of the corporation. On February 17, 1995, they changed the name
to Rhombic  Corporation.  On March 19,  2003,  the  company  changed its name to
Silverado  Financial,  Inc. The Company is currently  headquartered in Campbell,
California.

The Company is in the development stage and its efforts, since inception,  until
October of 2002, has been primarily  focused on the acquisition of the rights to
intellectual   property  that  could  lead  to  the  development  of  innovative
technologies.  During  the  years  of 1999  and  2000 it  began  to focus on the
research and  development  of its portfolio of acquired  intellectual  property.
During 2001, the Company's  main objective was to identify and develop  specific
applications  from its intellectual  property in order to make them commercially
marketable. In November 2002, Silverado acquired Financial Software, Inc. as the
first part of its strategy to enter the lucrative financial services sector.

The company has five wholly owned subsidiaries. They are:

     *    Rockford Technology Associates, Inc. ("Rockford")
     *    Nanophase Diamond Technologies, Inc. ("Nanophase")
     *    AEP Technologies, Inc. ("AEPT")
     *    Rhombic Detection Technologies, Inc. ("RDT")
     *    Financial Software, Inc. ("FSI").

By assignment  from the University of Illinois on September 5, 1995,  filed with
the  Patent  and  Trademark  Office,  Rockford  owns a patent  for the  Inertial
Electrostatic  Confinement  and Neutron  Monitor  technology.  On June 27, 1996,
Rockford  entered a licensing  agreement  with  Daimler Benz  Aerospace  and the
University of Illinois by which it is entitled to receive a long-term royalty on
all IEC sales  throughout  the world  including  North America and may engage in
direct  marketing of the  technology in North America  without  restriction.  In
return, Rockford assigned to Daimler Benz Aerospace, "Daimler", its right, title
and  interest  to the  Inertial  Electrostatic  Confinement  technology  for its
development  and  commercialization  by Daimler Benz  Aerospace.  In late August
2000,  Astrium,  which is a subsidiary of Daimler-Chrysler  Aerospace,  informed
Silverado  that they would not  continue  to  self-fund  the  Neutron  Generator
project beyond December 31, 2000. As a result,  Silverado attempted to form of a
joint  venture  between  itself,  Astrium and other  partners that would provide
capital and  technological  expertise to  commercialize  the  technology  within
certain applications.  The joint venture company was planned to originate in the
wholly owned  subsidiary of Silverado  named AEP  Technologies,  Inc.  ("AEPT").
Agreements were obtained from all of the participating joint venture partners to
perform  their  respective  roles;  however,  Silverado  was unable to raise the
necessary capital to begin the project.

Nanophase  owns the  Diamond  Film  Forced  Diffusion  technology.  No  activity
occurred during 2001 or 2002 in the subsidiary.

                                       1
<PAGE>
Rhombic Detection  Technologies,  Inc. was formed during 2000 in anticipation of
Rhombic's  being  awarded a contract from the  Department  of Energy  ("DOE") to
develop a Beryllium  detection  device.  Rhombic was not awarded the contract by
the DOE; therefore, the subsidiary was not used.

As a technology  transfer and development  stage company,  Silverado has limited
finances.  On March 8, 2001 it signed a $2.5 million convertible debenture to be
funded with installment payments starting May 1, 2001 in order to accomplish its
growth objectives and development of products and marketing of its technologies.
The Holder  funded  $200,000 on the  debenture  and  converted the advances into
1,166,142  shares of the Company under the terms of the  debenture.  On July 20,
2001, the Company withdrew its registration  statement for the shares issued and
to be issued  under the  debenture  because it was no longer  applicable  to the
Company.

There is no  assurance  that the Company  will be able to secure any  additional
funding necessary for such growth and expansion. There is also no assurance that
even if the  Company  obtains  adequate  funding to  complete  any  contemplated
acquisition,  such acquisition will succeed in enhancing the Company's  business
and will not  ultimately  have an adverse  effect on the Company's  business and
operations.

ACQUISITION OR DISPOSITION OF ASSETS

On January 3, 2000,  the Company  acquired  the right,  title and interest in an
invention  named "Micro Wave Driven Ultra  Violet Lamp" or "Excimer  Lamp".  The
seller agreed to provide  technical  support for the research and development of
the Excimer Lamp when the  development  takes place.  The Company issued 100,000
restricted  shares at a deemed  value of $281,250  and issued the  inventor  and
option to purchase  50,000  shares of its common  stock at $1.00 per share until
December  31,  2000.  The option was not  exercised  on  December  31,  2000 and
expired.

On April 12, 2000,  the Company  issued  100,000 shares of its common stock at a
deemed  value of  $194,250  for the  patent  rights,  title and  interest  to an
invention  called  long-lived  nuclear waste by low energy nuclear  reactions in
host metals and  Disperse  Composite  Material  "LENR/DCM".  The  invention is a
defined  process to convert the long-lived  nuclear wastes by low energy nuclear
reactions using hydrogen in host metals.  The inventor and seller,  Dr. Heinrich
Hora,  agreed to  provide  reasonable  technical  support  under a  compensation
agreement to be decided upon for the research and development of the technology.

The   Company  is  seeking   joint   venture   partners   or  others  to  effect
commercialization of its other impaired technologies. There is no assurance that
Company will be able to locate a joint venture  partner to develop any or all of
these  technologies.  In addition,  there is no  assurance  that even if a joint
venture  partner is found  that any of these  technologies  will ever  result in
marketable or viable products.

On November 19th,  2002,  Silverado  acquired all of the issued and  outstanding
shares of Financial  Software,  Inc., (FSI) a New Jersey corporation  engaged in
the  development  of Internet  and  Intranet  financial  software in addition to
operating several financial industry publishing web-sites.  This acquisition was
completed on a share for share exchange basis for 22,000,000 shares of Silverado
Common Stock at a deemed value of $1,100,000 and a note for $275,000.  Silverado
acquired FSI in order to gain access to certain  proprietary  software  products
owned by FSI which  Silverado  intends to  further  develop  and  extend  into a
comprehensive   back  office  platform  necessary  to  accomplish  its  business
objectives.

The Company is currently in negotiations to acquire Realty Capital  Corporation,
a California  based mortgage and insurance  brokerage  company owned partly by a
director of the  Company,  his wife,  and others.  Silverado  intends to acquire
Realty  Capital  on a share for share  exchange.  The exact  number of shares is

                                       2
<PAGE>
subject to an  independent,  fair market  valuation  of the net assets of Realty
Capital  with  no  shares  to be  issued  in  exchange  for  goodwill  or  other
intangibles  as  this is not an  arms  length  transaction.  Realty  Capital  is
currently operating and does generate revenue.

Silverado  intends  to  apply  for a  license  as a  lender  in  the  states  of
California,  Alaska, Arizona, Idaho, Nevada, New Mexico, Oregon, Washington, and
Utah.

Silverado intends to make future  acquisitions of revenue generating  operations
in the Mortgage Brokerage and Mortgage Banking sectors. However,  currently, the
Company  does  not  have  a  definitive   source  of  capital  to  finance  such
acquisitions. In this respect, the Company intends to accomplish its acquisition
plans by exchange of the Company  stock.  There is no assurance that the Company
will be able to arrange  for such  acquisitions  or as to the  trading  price or
liquidity of the Company's  common stock. Low trading price or poor liquidity of
the Company's common stock may adversely affect the Company's  ability to engage
in future acquisitions and to accomplish its growth objectives.

INTELLECTUAL PROPERTY

In early July 2001, the Company hired a scientific consultant to evaluate all of
the patents and patent  applications  of the Company for  relevance to potential
commercial  applications.  The  consultant  first  stated  that all  patents and
provisional  patents  involving Field Enhanced  Diffusion by Optical  Activation
(FEDOA) which covered  diamond based fuel cells,  diamond doping and the removal
of  impurities,  listed  inventors  that  are or  were  faculty  members  of the
University of Missouri at Columbia.  The University  administration asserts that
all  inventions  created  at the  University  by its  faculty  members  are  its
intellectual property and not Silverado's. The following opinions on Silverado's
provisional  patents  invented by faculty  members at the University of Missouri
are summarized as follows:

     1.   Provisional  patents for the System and Method for Diamond  Based Fuel
          Cells give substantial evidence that the described process using FEDOA
          is too slow to be economically feasible.

     2.   Provisional  patent  applications  covering  the doping of natural and
          chemically vacuum deposited (CVD) diamond using FEDOA is too slow of a
          process  to  be  economically   feasible.   Additional  research  into
          electrical  applications  of these  provisional  patents could be used
          with  other   doping   processes  to  explore   potential   commercial
          applications.

     3.   Provisional patent applications for a System and Method for Removal of
          Impurities  from  materials such as  semiconductors  using FEDOA would
          require  significantly  more research to determine  commercial  value.
          Although  the  process  appears  to offer an  increase  yield of chips
          obtainable  from wafers,  the  commercial  viability  is  questionable
          because the FEDOA is very slow for commercial applications.

     4.   Provisional  patent  applications  for  Carbon  Crystal  Growth  Using
          Electric  Emission  Enhanced  Showerhead  Hot Filament  Chemical Vapor
          Deposition  offers an improved  process for the CVD  process,  but the
          applications  and  inventors  do not  have  enough  data to  determine
          commercial viability.

The  conclusion of the consultant and the company was not to continue the patent
process of the above listed provisional patent  applications  because of (1) the
limited economic  viability due primarily to the process speed of FEDOA; (2) the
high costs of patent counsel and the direct costs to obtain domestic and foreign
patents; and (3) the potential exposure to royalty payments to the University of
Missouri with corresponding costs of defending ownership of the patents.

                                       3
<PAGE>
The  consultant  also  evaluated  Silverado's  intellectual  property  that  was
unaffected by potential claims from the University of Missouri. His opinions are
as follows:

     1.   Provisional  patent  for  the  Method  and  System  for  Manufacturing
          Disperse Composite Materials is of great economic value if the process
          is fully  developed  for the  numerous  applications  that  are  being
          proposed now by industry or that will emerge shortly.

     2.   Provisional  patent for a Method of Contact Diffusion into Diamond and
          Other Crystalline  Structures and Products using its thermal diffusion
          method is commercially viable.

The consultant  recommended  proceeding  with a development  plan for commercial
applications  involving the Manufacturing of Disperse  Composite  Materials.  He
also recommended that the Company proceed with Contact Diffusion into Diamond if
reasonable  arrangements  could  be made to  secure a  license  to  receive  the
processed diamond material necessary to complete the process.

Upon the  recommendations  of the  consultant,  the  company met with its patent
attorneys and determined  that the  application  deadlines to extend the patents
pending on the Manufacturing of Disperse Composite  Materials had expired.  As a
result, the President, Roger Duffield, met with the inventors of the patents and
determined a commitment  of $500,000 to $1,000,000 in capital would be needed to
begin a development  program for any commercial  applications that would provide
specific patent coverage for any process  developed.  Due to existing  financing
problems that the Company was facing, Silverado's President recommended a merger
with a private research and development company that had capital and scientists.
Unfortunately,  Silverado never received enough  information from the company to
evaluate a merger and Silverado's President subsequently resigned.

Silverado  recognized an impairment in the value of FEDOA and its  corresponding
intellectual  properties as a result of the consultants report and its inability
to raise money during 2001 for the development of any of its applications.

Silverado  recognized  an  impairment  in the value of the Excimer  Lamp and its
corresponding  intellectual  properties  as a result of its  inability  to raise
money during 2002 for the development of any of its applications.

On November 19, 2002, in connection with the acquisition of Financial  Software,
Inc., Silverado acquired certain software,  web sites and intellectual  property
which can aggregate financial information from a large number of data sources on
an  individual  basis,  amalgamate  the data and provide  accurate  and detailed
insight into an  individuals  personal  financial  picture on a real time basis.
This  software  can manage a host of  disparate  objectives  as they relate to a
persons  financial goals, be they investment or debt related or any combination.
This software suite, together with mortgage generation capabilities can create a
wealth of new and different mortgage, investment or insurance products.

POTENTIAL COMMERCIAL APPLICATIONS

Silverado  intends to initially utilize the software acquired in connection with
the  acquisition  of Financial  Software  Inc. to develop new mortgage  products
aimed at sub-prime  borrowers  whereby Silverado will generate mortgage products
at high interest  rates  relative to prime  borrowers and through the use of the
software,  determine whether or not an individual borrower is acting in a manner
which would enable a rebate of certain portions of said higher interest rate. If
a borrower should in fact act in this manner,  within a relatively short period,
the  borrower's  credit  rating  should  improve and  Silverado  will be able to
refinance the loan at a lower rate. Should the borrower not act accordingly, the
higher rate will be collected.  Eventually,  we intend to modify the software to
create aggregated pictures of individual  financial positions in order to market
a range of products  and  services  to  customers  including  but not limited to
insurance and securities related products and services.

                                       4
<PAGE>
IMPAIRED INTELLECTUAL PROPERTY

All  of  Silverado's  intellectual  properties  are in  the  development  phase.
Silverado's  current  portfolio of impaired  intellectual  property includes (1)
Inertial  Electrostatic  Confinement and the Neutron  Monitoring  Detector,  (2)
Diamond-reinforced Flywheel Battery and Radio Nuclide Battery, (3) Active Engine
("Rhombic Explorer") (4) Disperse Composite Material (5) LENR/DCM technology and
(6)  Diamond  Film and  Forced  Diffusion.  All of these have been  acquired  by
Silverado  in exchange  for shares of its common  stock from  different  parties
including research companies and individual  inventors  throughout the world. In
certain cases,  as part of the  acquisition of the  technology,  the Company has
agreed to pay royalty fees based on sales, when and if any such sales occur.

1. Inertial Electrostatic Confinement "IEC"

The IEC device is a large,  negatively  charged  grid  ionizing the gas inside a
spherical  vacuum  chamber.  The  positive  ions  produced  by this  plasma  are
attracted  toward the central cathode  (negative  electrode).  Since the grid is
mostly  transparent,  most of the ions will pass  through  the grid  toward  the
center of the device,  rather than collide with the grid. At the center, many of
the ions will collide with each other. If the  constituent  particles of the gas
are of fusionable fuels, (tritium,  deuterium,  helium-3) some of the collisions
will  result in fusion and the  concurrent  release of  energy.  Increasing  the
number of fusion reactions would increase the energy output of a fusion reactor,
or would increase the number of valuable  fusion  products  produced  (neutrons,
helium-3).  Potentially the IEC device may become a source of energy. Currently,
however,  the IEC device  does not  produce as much energy as is used to operate
it.

Research on the technology began during 1993 under a licensing agreement between
Daimler-Benz   Aerospace  (DASA),   the  University  of  Illinois  and  Rockford
Technology Associates (a wholly owned subsidiary of Silverado).  The development
program objective was to develop a neutron generator for multiple  applications.
As of December 2000, the development  program with Astrium  successfully  proved
the demonstrator model of the neutron generator in continuous operation for over
5,000 hours.  This  achievement was significant  because there are not any known
competitors   that  have  been  able  to  match  the   longevity   of  Astrium's
demonstrator. Competitors have been able to generate a higher output of neutrons
per second than the demonstrator.  Current applications suitable for the Astrium
demonstrator are:

     a.   medical cancer treatments
     b.   bulk foodstuffs quality control
     c.   On-line   measurement  of  coal  quality  at  the  power  station  for
          combustion emission control.
     d.   On-line measurement of mineral quality in the mining industry.
     e.   Land mine detection

Silverado  acquired  a  related  device  during  September  1999  utilizing  the
principle  described above. The device is named the Neutron Monitoring  Detector
and monitors the speed and  frequency of passing  neutrons to assess the quality
of alloy.  Some practical  applications of this technology may include detection
of impurities in high quality alloys,  mineral quality analysis in coal,  cement
and similar  industries,  detection  contraband  at airports,  bus stops,  train
stations, and detection of nonmetallic antipersonnel land mines.

                                       5
<PAGE>
During the second  quarter of that year,  the Company  paid  $22,000 in cash and
issued 50,000  restricted  common shares to Roger Duffield to prepare a business
plan  to  develop  and  commercialize  the  Inertial  Electrostatic  Confinement
technology.  On  September  1, 2000 Mr.  Duffield  became the  President  of the
Company and completed the business plan.  While  completing the business plan in
late August,  Astrium,  which is a  subsidiary  of  Daimler-Chrysler  Aerospace,
informed  Silverado  that they  would not  continue  to  self-fund  the  Neutron
Generator  project  beyond  December 31, 2000.  As a result,  the business  plan
provided for the formation of a joint venture between  Astrium,  Silverado,  and
other  partners  that would  provide  capital  and  technological  expertise  to
commercialize  the  technology  within  certain  applications.  Agreements  were
obtained from all of the  participating  joint venture partners to perform their
respective roles. The joint venture was not funded by the participating  partner
who committed to capitalizing the joint venture.  As a result,  Astrium informed
the Company and the  University of Illinois that it had no intention to continue
research  on the  neutron  generator  project or on paying any future  royalties
beyond December 31, 2000.

As a result of the written statements from Astrium declining to continue further
research  on the IEC,  the  Company is in  discussions  with the  University  of
Illinois to determine  how to obtain the patent  rights and the best way to move
forward with the  technology.  It also  believes  that its rights to the Neutron
Monitoring   Detector  will  be  relevant  to  continued  research  on  the  IEC
technology.

The Company will need to determine specific applications and potential customers
before pursuing  development work because it has already identified  competitors
that are able to generate  confined  neutron  streams in at higher  outputs than
what was developed by Astrium.

2. Diamond-reinforced Flywheel Battery and Radio Nuclide Battery.

The battery  operates  on a principle  using  diamond  layers  instead of carbon
filters to increase the power density of  electro-mechanical  energy storage for
batteries used in automobiles or other storage systems. This concept is based on
a rupture stress  measure for present  polycrystalline  diamond.  An increase in
storage  capacity may result in the  development  of a  satisfactory  method for
storing large amounts of electrical  energy for portable  applications,  such as
automobiles and satellites, as well as fixed appliances,  such as electric power
load leveling from the  individual  house to the utility  level.  Throughout the
world,  much work is being  performed  on improving  electrochemical  cells with
limited  success.  The  hydrogen  fuel  cell,  long used in  space,  is just now
receiving its first tests in motor vehicles,  but offers no great improvement on
electrochemical  batteries and requires a large,  expensive  infrastructure.  Of
greatest current interest for electric automobiles is electromechanical  storage
(a flywheel coupled to a  motor-generator),  which, with new technology promises
all the advantages of an all-electric  automobile but with the performances of a
gasoline-powered automobile.

Carbon  fiber  technology,   developed  for  high  rotational  velocity  uranium
enrichment  centrifuges,  has been used to produce automobile  prototypes.  Cars
equipped with this "rotation  battery" are projected to demonstrate  performance
(speed and range) equal to that of a standard  mid-engine  automobile  and quite
superior to ones with electrochemical batteries, which last only about 40,000km.

On May 30, 2000,  the Company  received an extensive  five-volume  Technical and
Business Panning and Development report on its Radionuclide  Batteries for space
applications. The conclusion was that the

Noble Gas battery was neither  economically  feasible  nor  commercially  viable
because of the  scarcity  of the  required  gases and the cost to produce  those
gases such as Kr-85 and Ar-39.

                                       6
<PAGE>
The dust plasma battery was evaluated as not feasible because the  Technetium-99
isotope is not a practical radioisotope because extremely large amounts would be
required for the battery.  Strontium-90  would not be appropriate for commercial
use because it represents a major biological hazard.

3. Active Engine ("Rhombic Explorer"):

The Active  Engine or Magnesite is a software  program  designed to economize on
Internet  search and data  download  costs.  It  creates  site  directories  and
translates hypertext  references,  making the information fully useable offline.
The development of the Magnesite is interrelated  with the Company's  efforts to
develop and launch the Rhombic  Explorer,  a personal  Internet  search  engine.
During  September,  the  Company and its  strategic  marketing  partner,  Vision
Magnetics,  conducted  quality assurance testing on the Magnesite code to ensure
product  reliability and to allow for expansion of Magnesite into Magnesite Pro.
The results of the testing  indicated  that the  program  was not  suitable  for
marketing because of its inability to download graphics and certain web sites in
their entirety.  As a result of the testing,  the Company is evaluating the cost
and  benefits  involved  in  debugging  the  program  and  bringing  it  to  the
marketplace.  In conjunction with the planned  marketing of Magnesite during the
third quarter,  Vision Magnetics engaged programmers to create a new website for
Silverado to sell, deliver and maintain user registration and update information
as well as hard delivery of diskettes  containing  Magnesite  code to end users.
Vision informed Silverado that it needed to obtain a marketing study in order to
determine the  specifications  needed for the Magnesite  Pro.  During the fourth
quarter of 2000, the Company  engaged a programmer to debug the program in order
to prepare it for quality assurance testing.

During the first quarter of 2001, it became apparent to Silverado that there was
no cost benefit to continue developing  Magnesite because of the necessary costs
to  continue  developing  a  working  program,   conducting  marketing  studies,
incurring  marketing  costs and  incurring  administrative  and legal  costs for
licensing and customer service.  On March 14, 2001,  Silverado and Vision agreed
to cancel all of their  agreements with each other under a Mutual Release,  Hold
Harmless and Cross Indemnification Agreement.

4. Disperse Composite Material

During the fourth quarter of 2000, the Company  impaired its Disperse  Composite
Material  technology.  The Company determined that it was not cost beneficial to
incur patent and  research  costs to advance the theory of the  technology.  Its
decision  was mainly due to having  identified  numerous  competitors  with more
capital resources intending to develop comparable technologies.

5. LENR/DCM

During the fourth quarter of 2000, the Company impaired its LENR/DCM technology.
The  Company  determined  that it was not cost  beneficial  to incur  patent and
research costs to advance the theory of the technology.  Its decision was mainly
due to  having  identified  numerous  competitors  with more  capital  resources
intending to develop comparable technologies.

6. Diamond Film Forced Diffusion.

Silverado's negative type diamond technology, referred to as "Forced Diffusion,"
has been successfully  created in a former Soviet Republic  laboratory to create
functional integrated circuits.  This technology consists of diffusing different
elements  into  diamonds.  Silverado  believes  that Forced  Diffusion  has many
spin-off  applications.  Certain  elements in diamond can change the mechanical,

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<PAGE>
optical, and electrical  properties of the material.  For example,  boron doping
causes diamonds to turn blue and enhances the wear resistance of the diamond and
makes a p-type conductor.

Methods of growing  diamonds on a film have been  accomplished by chemical vapor
deposition.  Generally  methane gas is used as the source of carbon and hydrogen
is used as the flux and carrier gas. Substrate temperatures are generally in the
700 - 800 Centigrade  range.  Several  different  substrates  have been used for
single  crystal  growth.  In  general,  diamond  has very good  adhesion to most
carbide forming  materials.  Diamond will nucleate and grow on most  non-carbide
forming  materials but it tends to delaminate  except on nickel,  molybdenum and
tungsten.  Diamonds conductivity can be varied from very low values to very high
values.  It has tensile  strength  better than that of graphite  and is the most
chemically resistive material known to engineering.

Producing  diamond with  electronic  properties is greatly  superior to those of
silicon which is the material currently used for computer chips. This technology
allows  for the  exponential  decrease  of the  space  required  for a  computer
microchip.  Such diamond film is considerably more heat and radiation  resistant
extending  the  life of the  electronic  circuitry.  Harder  cutting  tools  and
abrasives,  diamond television and computer monitor screens,  sensor bearing and
radar screens are among a number of potential  commercial  applications  of this
technology.

The  research  plan for  this  technology  has four  aspects.  1)  attention  on
understanding  the forced  diffusion  process and how it produces n-type diamond
material with Lithium,  Oxygen and Chlorine will be done; 2) an  examination  on
the forced  diffusion of a variety of elements will be conducted;  3) a study on
how the addition of these impurities changes the mechanical,  optical, chemical,
and electrical properties of the diamond; and 4) an evaluation of the electrical
characteristics  of various  elements put into  diamond by the forced  diffusion
process will be conducted.

During the year 2000, the Company targeted the development of the following four
applications of its Diamond Film Forced Diffusion technology:

     1.   A   Silicon-Carbide   purification   technology   for  the   high-tech
          manufacturing industry,
     2.   An  integrated  Diamond  Circuit  for  the  computer  and  electronics
          industry,
     3.   A Heavy Doped Diamond Fuel-Cell Electrode for the fuel cell industry,
     4.   Quality colored diamonds for the high-end jewelry accessory market.

Silverado  believes that  controlling  impurities  in Gallium  Nitride "GaN" and
Silicon  Carbide "SiC" is important  because  impurities are used to make n-type
and p-type materials. The n-type and p-type material is used to form transistors
and  other   structures  in  integrated   circuits.   Impurities   represent  an
imperfection  in the crystal  structure and a center for further  propagation of
imperfections  during the growth  phase.  A high  quality  crystal  structure is
necessary in order to shrink the size of the  transistors  and other  electrical
elements.  Crystal  quality is also a means of  increasing  the  lifetime of the
integrated  circuit.  A second  benefit of a  relatively  impurity  free crystal
structure is in the limitation of unwanted leakage currents.

During the first  quarter  2000  approximately  $85,000 was spent to build three
second  generation forced diffusion  reactors.  One reactor will be used for the
n-type diamond material,  one reactor for p-type materials and the third reactor
for purification of crystals.  Also, a high voltage Silicon Carbide purification
reactor was built.  This reactor will enhance the  impurities  removal rate from
Silicon  Carbide  materials.  Results  from  research  during  the year  reduced
impurity  levels for oxygen and  nitrogen  from 10 parts per million to .5 parts
per million.  GaN is at the point where  impurity  levels are about one part per
million  and SiC is at about the 20ppm.  It is  imperative  that the GaN and SiC
industries continue along the path of high quality crystal  production.  We know

                                       8
<PAGE>
from the  silicon  industry  that  when the  impurity  levels  in  silicon  were
decreased  by one or two orders of magnitude  that silicon  achieved a factor of
ten  improvements  in chip power  consumption  and  lifetime.  We can  therefore
anticipate improvements in GaN and SiC.

A specific  program of work has been  defined at the  University  of Missouri to
demonstrate  the process for treating  2-inch wafers using the existing  reactor
and to have  designed  and  tested  a  prototype  FEDOA  for  6-inch  GaN  wafer
treatment.  Development  budgets  for this work  program are  estimated  at $0.5
million.

6A. Diamond Fuel Cell

Previous research over many years by the team of scientists at the University of
Missouri have  developed  innovations  in diamond  materials that have shown the
capability to replace the current polymer electrolyte membrane with diamond.

This new development in proton diamond electrode  membrane (PDEM) technology may
allow high proton transport  through the membrane by the process of a non-porous
structure  supported by an improved anode and cathode and to which hydrogen ions
are not affected. Furthermore, a major advantage of using diamond is that it can
withstand  temperatures  four times  greater  than  current  membrane  material.
Silverado  believes that its planned PDEM could  operate at higher  temperatures
than current  standard  proton polymer  electrolyte  membrane (PPEM) fuel cells,
subsequently;  reaction rates would be increased  considerably with the platinum
content  decreased  by a similar  factor,  while  manufacturing  costs  would be
drastically reduced. The new diamond membrane does not require moisture; whereas
current PPEM must be kept moist, thus restricting operating temperatures

In  conclusion,  the  Diamond  PDEM fuel cell may  allow  for  higher  operating
temperatures,  an increased  reaction rate and longevity and a much smaller fuel
cell stacked system.  Reduced platinum and manufacturing  costs that can provide
an opportunity to produce a fuel cell stacked system at an affordable price. The
research  budget would  require a minimum of $500,000 to create a working  model
and approximately $1,500,000 to create prototypes with marketing plans.

6B. Coloring Gemstones

Forced  diffusion  technology has been  demonstrated  on mined diamond,  diamond
films,  and  gahnite.  Impurities  were added to diamond  and the  results  were
verified. In these studies it was found that changes occurred to the mechanical,
chemical,  optical and electrical properties of diamond. The diamond became more
wear  resistant,  the crystal  color changed to blue,  and the diamond  became a
p-type  semiconductor.  Each of these property  changes has a commercial  value.
Another   example  is  that  the  addition  of  lithium  to  mined  diamond  and
polycrystalline diamond film made the diamonds an n-type conductor.

The forced  diffusion  process has demonstrated  that the optical  properties of
diamond can be changed with the addition of impurities.  Mined blue diamonds are
rare;  1 in  1,000,000  diamonds is blue.  Other  impurities  added to a diamond
crystal  change  its  color  from  red to  green.  Modification  of the  optical
properties of diamond can impact the gem market. The diamond gem market is about
$4.8 billion. The colored diamond market is about $500 million. It is well known
that the rare blue diamond is more than double the cost of a white  diamond.  In
addition,  red diamonds are the rarest gemstones known. Recently a 1/2 carat red
diamond was auctioned for the price of $1.5 million dollars.

Forced diffusion is being applied to gemstone quality Type II diamond.  The goal
of this work is to demonstrate that the technology can be used to induce a color
change in the crystal.  The forced  diffusion  process used for coloring is used

                                       9
<PAGE>
commercially  and there are numerous  patents by competitors  covering the area.
Silverado  does  not  believe  that it is  sufficiently  capitalized  to  pursue
commercializing its doping technology as it applies to coloring diamonds.

7. Excimer Lamp

This lamp uses a highly efficient photon emission reaction (7-50%) from excimers
to produce wavelengths of vacuum ultra violet (VUV) to visible light. An excimer
is an excited state in a molecule that dissociates  into an unbound state.  This
feature means that  self-absorption  in the lamp is small,  and because of this,
the lamp can be  scaled  to large  volumes  without  severe  degradation  of the
emission  wavelength.  The  pioneering  excimer  lamp  technology  developed  by
Columbia  Research  Instruments  is  now  owned  by  Silverado.  It  efficiently
transfers the energy of  electricity  to microwaves  and  microwaves to excimers
(transfer  efficiency  between 50 and 90%). This technology  produces light of a
pure  wavelength  more  efficiently  than  any  other  light  source.   This  is
significant  because  light  is used  to  induce  chemical  reactions  that  are
wavelength specific. The excimer lamp is orders of magnitude more cost effective
(dollar/photon  bandwidth)  than anything that current  technology is capable of
producing.

COMPETITION

The Company  operates in the competitive  environment of financial  services and
financial   technologies   where  other  companies  may  be  developing  similar
technologies with substantially larger financial resources,  operations, staffs,
engineers and  facilities.  The company's  competitors  include other  financial
software companies,  financial portals and websites as well as national mortgage
brokers,  mortgage  banks and banks.  Failure to develop scale through  internal
growth and  acquisition  could have  material  adverse  effect on the  Company's
future  financial  condition  and could result in a write-off  of a  significant
portion of its investment in the technologies.

The Company operates in the competitive  environment of developing  technologies
where other companies may be developing similar  technologies with substantially
larger financial resources,  operations,  staffs, scientists and facilities. The
Company is working toward developing prototype  demonstrative models for certain
applications of its  technologies.  There can be no assurance that the prospects
will yield  substantial  economic  returns or that a  competitor  may  develop a
similar  prototype  and enter the  marketplace  ahead of  Silverado.  Failure to
develop  applications  from the technologies  with an estimated  economic return
could have a material adverse impact on the Company's future financial condition
and could result in a write-off of a  significant  portion of its  investment in
the technologies.

The Company's  competitors include major integrated  international  companies in
various  industries with research and development  programs.  The  international
companies  are large,  well  established  companies  with  substantially  larger
operating staffs and greater capital  resources than the Company's and which, in
many instances, have been engaged in the technology development arena for a much
longer time.

MARKETING

The  Company's  primary  business  focus  is  placed  upon the  acquisition  and
consolidation of the highly fragmented  mortgage  brokerage and mortgage banking
markets.  Management has extensive  experience in its chosen markets and intends
to integrate the fractured  market  through the use of technology  and gain cost
savings  through  economies  of scale.  Secondarily,  Silverado  will review the
commercialization of its advanced technologies and commercial products resulting
there from.  The Company has limited  experience  in  marketing  of products and
services in these  fields of  applications  for its  intellectual  property  and
intends to rely on licensing and joint venture  opportunities with companies for
the  marketing  and  sale of its  technologies.  The  Company  also  has  little
experience  marketing products of a consumer nature.  There is no assurance that

                                       10
<PAGE>
the Company will be successful in developing a market for any of its products or
that it will gain any market recognition and acceptance.

PATENTS

Current patents

     *    Field-Enhanced  Diffusion  Using Optical  Activation,  U.S. Patent No.
          5,597,762
     *    Microwave-Driven  UV Light Source and Solid-State Laser, US Patent No.
          5,659,567
     *    Microwave-Driven  UV Light Source and Solid-State  Laser,  U.S. Patent
          No. 5,659,567

Patent applications

     *    System and Method for Network Based Information Retrieval (Magnesite),
          U.S. Patent App. No. 60/240,770
     *    Compact Power Technology Using  Photon-Intermediate  Direct Conversion
          of Radioisotope Energy to Electricity, U.S. Patent App. No. 60/223,869
     *    System and Method for Diamond Based Fuel Cells,  U.S.  Patent App. No.
          60/241,097
     *    System  and  Method  for  Diamond   Based  Fuel   Cells,   Docket  No.
          790072.408P2
     *    System and Method for Conductive Diamond and Ohmic Contacts 60/251,823
     *    System and Method for Conductive Diamond and Ohmic Contacts 60/255,686
     *    System and Method for Removal of  Impurities  From  Materials  Such as
          Semi-conductors, Docket No. 790072.411P1
     *    System and Method for Removal of  Impurities  from  Materials  Such as
          Semi-conductors, Docket No. 790072.411P1

Patent applications terminated

     *    Super Compact Radio Nuclide Battery Docket No. 790072.401
     *    Low-cost Elimination of Long-lived Nuclear Waste, U.S. App. 09/013,179
     *    Method and  System for  Manufacturing  Disperse  Composite  Materials,
          International Patent Application No. PCT/US99/16552.

EMPLOYEES

The Company currently has two employees.

RISK FACTORS

NO  REVENUES,  OPERATING  LOSS.  The Company has no  Revenues  and is  Currently
Operating at a Loss. The Company will need to raise  additional  capital through
the placement of its securities or from debt or equity financing. If the Company
is not able to raise such  financing or obtain  alternative  sources of funding,
management  will be required to curtail  operations.  There is no assurance that
the  Company  will be able to  continue  to operate if  additional  sales of its
securities cannot be generated or other sources of financing located.

LIMITED  HISTORY  OF  OPERATIONS.  The  Company  has only a limited  history  of
operations.  The Company  operations  are  subject to the risks and  competition
inherent in the  establishment  of a  relatively  new business  enterprise  in a
highly competitive field of technology transfer.  There can be no assurance that
future operations will be profitable.  Revenues and profits, if any, will depend

                                       11
<PAGE>
upon  various  factors,   including  market   acceptance  of  its  products  and
technologies, market awareness, its ability to promptly and accurately recognize
a marketable  technology  or  invention,  dependability  of an  advertising  and
recruiting network, and general economic conditions.  There is no assurance that
the Company  will  achieve its  expansion  goals and the failure to achieve such
goals would have an adverse impact on it.

NEED FOR ADDITIONAL FUNDING. The Company May Need Additional  Financing.  Future
events,  including the problems,  delays,  expenses and difficulties  frequently
encountered by startup  companies may lead to cost increases that could make the
Company's  source  of  funds   insufficient  to  fund  the  Company's   proposed
operations.  The Company may seek  additional  sources of capital,  including an
additional offering of its equity securities,  an offering of debt securities or
obtaining  financing  through  a bank  or  other  entity.  The  Company  has not
established  a limit as to the  amount of debt it may incur nor has it adopted a
ratio  of its  equity  to a debt  allowance.  If the  Company  needs  to  obtain
additional  financing,  there is no assurance  that financing will be available,
from  any  source,  or that it will be  available  on  terms  acceptable  to the
Company,  or that any future  offering of  securities  will be  successful.  The
Company could suffer adverse  consequences if it is unable to obtain  additional
capital when needed.

TRADEMARK  PROTECTION AND PROPRIETARY  MARKS. The Company may continue  pursuing
patents and several pending patents as a result for its  intellectual  property.
There is no assurance that the Company will be able to prevent  competitors from
using the same or similar names, marks,  concepts or appearances or that it will
have the financial  resources  necessary to protect its marks against infringing
use.

OBSOLESCENCE OF INTELLECTUAL  PROPERTY.  The Company's Intellectual Property and
Inventions May Become Obsolete.  Patent review is usually a lengthy, tedious and
expensive  process that may take months or, perhaps,  several years to complete.
With the current rate of technology development and its proliferation throughout
the world, those inventions may become commercially obsolete during or after the
patent review. There is no assurance that the Company's  intellectual  property,
acquired or developed, may not become obsolete and remain commercially viable.

FAILURE TO OBTAIN PATENTS.  The Company May Fail to Obtain Patent  Protection in
Various  Jurisdictions.  The Company has filed  patent  applications  in several
jurisdictions, including Japan, Korea, and the United States. The filing process
is  usually a costly  and  time-consuming  undertaking  requiring  proper  legal
counsel under the laws of the  jurisdiction  where patent  protection is sought.
There is no assurance  that those patent  protection  filings were  properly and
timely made. There is also no assurance that upon review, those applications may
not be rejected  for lack of novelty or any other bases  sufficient  to reject a
pending patent application in any of those jurisdictions.

COMMERCIAL  VIABILITY OF THE  COMPANY'S  CURRENT  TECHNOLOGIES.  The Company was
organized to identify, assess, acquire and capitalize on technologies introduced
and developed by scientists throughout the world. These technologies are new and
in their research and development stage. Generally, it requires substantial time
and resources to be able to both recognize a commercially  successful technology
or invention at an early stage and conduct a  successful  marketing  campaign to
sell this technology or invention.  There is no assurance that all or any of the
Company's  research and development  efforts will result in commercially  viable
final products.

LACK OF  INTEREST  IN  ACQUIRED  TECHNOLOGIES.  The Company may fail to generate
sufficient  interest  in  acquired  technologies.  The  Company  must  undertake
substantial  effort to educate the buying public,  consumers and businesses,  in
the U.S. and worldwide, as to the Company's products and technologies.  There is
no assurance that the Company will be able to generate interest in and to create
and maintain steady demand for its products over time.

                                       12
<PAGE>
RELIANCE ON FUTURE  ACQUISITIONS  STRATEGY.  The Company  expects to continue to
rely on acquisitions as a primary component of its growth strategy. It regularly
engages in evaluations of potential  target  candidates,  including  evaluations
relating to acquisitions that may be material in size and/or scope.  There is no
assurance  that the Company  will  continue  to be able to identify  potentially
successful companies that provide suitable acquisition opportunities or that the
Company will be able to acquire any such  companies on  favorable  terms.  Also,
acquisitions  involve a number of  special  risks  including  the  diversion  of
management's  attention,  assimilation  of the personnel  and  operations of the
acquired  companies,  and possible loss of key employees.  There is no assurance
that the acquired  companies  will be able to  successfully  integrate  into the
Company's  existing  infrastructure or to operate  profitably.  There is also no
assurance  given as to the  Company's  ability  to obtain  adequate  funding  to
complete any contemplated  acquisition or that any such acquisition will succeed
in enhancing  the  Company's  business and will not  ultimately  have an adverse
effect on the Company's business and operations.

POSSIBLE INABILITY TO FINANCE ACQUISITIONS. In transactions in which the Company
agrees to make an  acquisition  for cash, it will have to locate  financing from
third-party  sources such as banks or other  lending  sources or it will have to
raise cash through the sale of its  securities.  There is no assurance that such
funding will be available to the Company when required to close a transaction or
if available on terms acceptable to the Company.

LOSS OF KEY  PERSONNEL.  The loss of the  company's  key directors may adversely
affect  growth  objectives.  The  Company's  success  in  achieving  its  growth
objectives  depends  upon the efforts of its  directors.  Their  experience  and
industry-wide  contacts  significantly  benefit  the  Company.  The  loss of the
services of any of these  individuals may have a material  adverse effect on the
Company  business,  financial  condition and results of operations.  There is no
assurance  that the  Company  will be able to  maintain  and  achieve its growth
objectives should it lose any or all of these individuals' services.

FAILURE TO ATTRACT QUALIFIED PERSONNEL. A change in labor market conditions that
either further reduces the availability of employees or increases  significantly
the  cost of  labor  could  have a  material  adverse  effect  on the  Company's
business,  financial condition and results of operations. The Company's business
growth is dependent  upon its ability to attract and retain  qualified  research
personnel,  administrators and corporate management.  There is no assurance that
the Company  will be able to employ a sufficient  number of  qualified  training
personnel in order to achieve its growth objectives.

DILUTION.  Issuance  of Future  Shares May Dilute  Investors  Share  Value.  The
Certificate  of  Incorporation  of  the  Company   authorizes  the  issuance  of
70,000,000  shares of common stock and 5,000,000  shares of preferred stock. The
future issuance of all or part of the remaining  authorized  common or preferred
stock may result in  substantial  dilution in the  percentage  of the  Company's
common stock held by the its then existing  shareholders.  Moreover,  any common
stock issued in the future may be valued on an  arbitrary  basis by the Company.
The issuance of the  Company's  shares for future  services or  acquisitions  or
other corporate  actions may have the effect of diluting the value of the shares
held by investors,  and might have an adverse  effect on any trading  market for
the Company's common stock.

PENNY  STOCK  REGULATION.  The  Company's  common  stock is deemed to be a penny
stock.  Penny stocks  generally are equity  securities with a price of less than
$5.00 per share other than securities  registered on certain national securities
exchanges or quoted on the NASDAQ Stock Market,  provided that current price and
volume  information  with respect to transactions in such securities is provided
by the exchange or system.  The  Company's  securities  may be subject to "penny
stock   rules"  that  impose   additional   sales   practice   requirements   on
broker-dealers  who sell such  securities  to  persons  other  than  established
customers and  accredited  investors  (generally  those with assets in excess of
$1,000,000 or annual income exceeding  $200,000 or $300,000  together with their
spouse).  For transactions covered by these rules, the broker-dealer must make a
special  suitability  determination for the purchase of such securities and have

                                       13
<PAGE>
received  the  purchaser's  written  consent  to the  transaction  prior  to the
purchase.  Additionally,  for any  transaction  involving a penny stock,  unless
exempt, the "penny stock rules" require the delivery,  prior to the transaction,
of a disclosure  schedule  prescribed  by the  Commission  relating to the penny
stock market.  The broker-dealer  also must disclose the commissions  payable to
both the broker-dealer and the registered  representative and current quotations
for the securities.  Finally,  monthly statements must be sent disclosing recent
price  information  on the limited  market in penny  stocks.  Consequently,  the
"penny  stock  rules" may  restrict  the ability of  broker-dealers  to sell the
Company's  securities.  The foregoing required penny stock restrictions will not
apply to the Company's  securities if such securities maintain a market price of
$5.00 or  greater.  There can be no  assurance  that the price of the  Company's
securities will reach or maintain such a level.

ITEM 2. PROPERTIES

PROPERTY

The Company has a two-year  lease  commitment for its corporate and sales office
located at 1475 S. Bascom Avenue, Suite 210, Campbell, CA 95008

ITEM 3. LEGAL PROCEEDINGS

None

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

Inapplicable.

                                     PART II

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

GENERAL

The Company has an authorized  capitalization  of  100,000,000  shares of common
stock and  5,000,000  shares of preferred  stock,  $0.001 par value per share of
which  54,173,936 were issued and outstanding at April 7, 2003. On April 3, 2003
the Company increased the common shares authorized to 100,000,000 shares and the
preferred stock to 5,000,000 shares.

MARKET INFORMATION

The Company's common stock is traded in the  over-the-counter  market on the OTC
Bulletin Board under the symbol "NUKE". The following table sets forth the range
of high and low bid quotes of the  Company's  Common Stock per calendar  quarter
which  reflect   inter-dealer  prices  without  retail  mark-up,   mark-down  or
commission and may not necessarily represent actual transactions.

                                          2002
                                      -------------
                                      Low      High
                                      ---      ----
          Fourth quarter              $0.04    $0.17
          Third quarter               $0.02    $0.17
          Second quarter              $0.02    $0.05
          First quarter               $0.02    $0.06

                                       14
<PAGE>
                                          2001
                                      -------------
                                      Low      High
                                      ---      ----
          Fourth quarter              $0.05    $0.16
          Third quarter               $0.09    $0.21
          Second quarter              $0.15    $0.28
          First quarter               $0.16    $0.48

On March 10, 2000 the Company's common shares began trading on the Hamburg Stock
Exchange in Hamburg, Germany under the symbol "919335".

HOLDERS

As of February  10,  2003,  the Company had  53,073,936  shares of common  stock
outstanding. A total of approximately 289 shareholders of record held a total of
approximately  31,659,907  common  shares.  The Company  estimates the remaining
21,414,029  common  shares  in  street  name to be held by over  400  additional
individual shareholders.

DIVIDENDS

The Company has never  declared or paid cash  dividends  on its common stock and
anticipates  that future  earnings,  if any, will be retained for development of
its business.  Payment of cash dividends in the future will be wholly  dependent
upon the Company's earnings, financial condition, capital requirements and other
factors  deemed  relevant by them. It is not likely that cash  dividends will be
paid in the  foreseeable  future.  In the event of the  acquisition of or merger
with a  business  by the  Company,  control  of the  Company  and its  Board  of
Directors may pass to others.  In that event,  the payment of dividends would be
wholly dependent upon such persons.

ITEM 6. MANAGEMENT'S PLAN OF OPERATION

In the  following  discussion  we are  providing  an analysis  of our  financial
condition  and Plan of Operation  during the next quarter and the balance of the
fiscal year.  This discussion  should be read in conjunction  with our financial
statements and the notes thereto.  Certain matters  discussed below are based on
potential future circumstances and developments,  which the Company anticipates,
but which cannot be assured.  Such  forward-looking  statements include, but are
not limited to, seeking a revenue generating  business to acquire and conducting
research  and  development  on  the  Excimer  Lamp  within  the  Company  and in
conjunction with joint venture partners.

The  competition in the technology  proliferation  and transfer market is highly
intense  and is based on product  and  technology  recognition  and  acceptance,
novelty and  marketability  of an invention,  price,  and sales  expertise.  The
Company has refocused its primary emphasis on developing a cash-flow business in
the mortgage brokerage and mortgage banking markets. Silverado intends to pursue
a  consolidation  strategy in the highly  fragmented  mortgage  industry to take
advantage of certain  changes to the real estate  procedures  and settlement act
(RESPA),  which the company's  management believes will fundamentally change the
industry as it currently exits.  These changes will eventually force an industry
consolidation and the economies of scale, which will result.  These changes will
also make it more important then ever that the brokerage community has immediate
access to pertinent information from its lending sources.

Silverado Financial is a multifaceted finance and technology company focusing on
mortgage  lending,  consumer  lending  and  software  technology  related to the
finance  and lending  industry.  Silverado  has  developed  the  backbone of its

                                       15
<PAGE>
proprietary,   Internet  based,   software   product  targeted  at  interlinking
independent real estate and mortgage  professionals  with  Silverado's  mortgage
bank and consumer lending group. Silverado calls its platform Financenter.

Financenter  organizes,  tracks,  and helps to  proactively  manage the  lending
process  with  leading-edge  technology  and  financial  tools  and  provides  a
transaction  platform that becomes a robust  e-commerce site,  designed to serve
the needs of  mortgage  brokers,  real  estate  agents,  consumers,  lenders and
property owners.

Financenter  makes it possible  for mortgage  and real estate  professionals  to
manage more  clients,  reduce  overhead,  and increase the level of service they
provide.  Financenter networks Silverado's operating  subsidiaries and strategic
partnership alliances, allowing multiple broker/advisor and client collaboration
in a securely  networked real time  environment.  Loan  brokerage  organizations
receive  unlimited service from Silverado in exchange for the ability to provide
loans  to  their  clients,  or the  organization  can opt for a  fee-for-service
contract where their clients  receive access  through a model  interlinked  with
their lending advisor.

Silverado's vision is to build the premier loan distribution network,  providing
a broad range of financial products and services to its clientele.

Silverado's purpose is to consolidate those consumer lending, mortgage brokerage
and mortgage banking entrepreneurs who (a) believe that the size and scale of an
operation  are important to the future of their  business,  (b) desire to retain
the  independent  operation  of their  business and continue to grow it, and (c)
wish to capitalize some portion of the value of their  business.  Silverado will
use its Financenter  platform to create a community with its acquired  companies
and to foster cross selling and integration.

Silverado  will provide  three basic  benefits to its companies - the ability to
compete,  capitalize and control.  The result is the marriage of entrepreneurial
energy  and  public  capital  resulting  in the  creation  of the  premier  loan
distribution  system providing a broad range of financial  products and services
to its clientele.

Silverado  capitalizes itself through the sale of its public stock to purchase a
portion of the economics of each  business for a combination  of stock and cash.
Although 100% of the stock in the acquired  business  will be purchased,  only a
portion of the economics will be purchased.  A management agreement provides the
management  of  the  acquired  company  the  entrepreneurial  freedom,  economic
ownership and upside in the future of the firm. Only  established  businesses in
the  mortgage  brokerage  and  mortgage  banking  markets  are  purchased.  Each
continues to operate in a highly independent and entrepreneurial style.

Based upon the  assumption of earnings  acquired and internal  growth rate,  the
goals for Silverado in pre-tax cash flow are:

               Year 1           $1,500,000
               Year 2           $4,500,000
               Year 3           $9,000,000

Silverado's  strategy results in the widespread  ownership of the Company by the
"best and brightest" in the lending industry and a responsive,  well capitalized
company with significant growth, both internally and externally.

                                       16
<PAGE>
In order to achieve its growth objectives,  Silverado is focused on adding value
to its acquired firms by providing  access to capital,  leading edge  technology
and internal loan and mortgage products.  In addition,  Silverado's  Financenter
platform will create a community for firms to build  relationships,  share ideas
and develop  synergies  that lead to new business  opportunities  and  increased
revenue.

As a public company  Silverado makes employee  ownership through incentive stock
options an  important  aspect of its hiring and  retention  policy as well as an
incentive  for increased and above  average  revenue  production.  Each acquired
company must take at least 25% of the purchase price in restricted stock as part
of the transaction.

The retention of quality people at the acquired firms is a key to success in the
high  growth  consolidation  environment.  Today,  there are well over 85 public
companies in 25 separate industries, which are viewed as "consolidators".

To date,  the Company has not  generated  any revenues  from any of its acquired
intellectual  property  except minimal  royalties from Daimler Benz from the IEC
Technology.  Silverado is currently a development stage company and is operating
at a loss. None of the  technologies  have been developed to  commercialization.
The Company is not able to determine an approximate  date for  commercialization
of any of its  intellectual  property at this time. No  assurances  can be given
that any of the  Company's  intellectual  property  will ever be  developed to a
point of usefulness or, if developed, that any will be commercially feasible.

Development of its intellectual  property may be possible through joint ventures
where  Silverado   contributes  its  intellectual   property  for  an  ownership
percentage  in a joint  venture and the other joint  venture  partner's  pay all
costs.

With the acquisition of Financial Software,  Inc. (FSI) Silverado obtained three
subscription based web-sites and a proprietary software platform all targeted at
the financial services industry. Silverado hired Michael Grabelsky to manage the
e-publishing  and website content for FSI and to further develop the websites as
institutional subscription services.

The first site has been reworked as Silverado  Financial News (the Reporter) and
provides  up to date  information  to  institutions  on up and coming  Micro-Cap
companies.  FSI is  currently  signing up  subscribers  for the Reporter and has
begun work on a new site targeted at real estate and mortgage professionals.  We
anticipate a positive income stream by second quarter of 2003.

The acquired  software  will be developed  into a portal and internal  employees
will  have  access to all the work  modules  as well as the  subscription  based
website services.  The software will be used to interlink  Silverado's  mortgage
brokers,  mortgage banking operations,  suppliers and customers via the internet
and an internal intranet.

The  acquisition  of FSI  creates  both a cash flow  operation  from the website
operations as well as moves the company ahead with cutting edge internal support
technology.

Silverado's  plan during the next twelve months is to acquire revenue  producing
mortgage  brokerage  operations and further  develop the technology and websites
acquired through the FSI acquisition.

The Company  currently  has no options  outstanding  from which it could  obtain
cash;  however,  it is not possible  that the  Silverado  could obtain cash from
outstanding  warrants.  If all outstanding warrants were exercised,  the Company
would receive $29,250 in cash from the issuance of 325,000 shares.

                                       17
<PAGE>
During  2002 it impaired  the  carrying  value of the  Excimer  Lamp by $276,250
because the carrying value exceeded the projected future discounted cash flows.

At  December  31,  2002 the  Company  had $561 in cash and  $167,100  in current
liabilities  of which $55,000 was owed to  affiliates.  At December 31, 2001 the
Company had $ 9,100 in cash and $ 49,092 in current  payables.  Silverado may be
able to settle the  majority  of the debt with its common  shares;  however,  it
currently has no source of income.

ITEM 7. FINANCIAL STATEMENTS

The following financial information is filed as part of this report:

REPORT OF INDEPENDENT AUDITORS                                         F-2
CONSOLIDATED BALANCE SHEETS AS OF DECEMBER 31, 2002 AND 2001           F-3
CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE YEARS ENDED
DECEMBER 31, 2002 AND 2001                                             F-4
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT FOR THE
YEARS ENDED DECEMBER 31, 2002 AND 2001                                 F-5
CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED
DECEMBER 31, 2001 AND 2001                                             F-6
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS                         F-7 - F-17

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

The Company had no  disagreements  on accounting and financial  disclosures with
its independent auditors during the reporting period.

                                    PART III

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

The following  table sets forth the names and ages of the current  directors and
executive officers of the Company,  the principal offices and positions with the
Company  held by each  person  and the date such  person  became a  director  or
executive  officer of the Company.  Each serves until the next annual meeting of
the stockholders.

Name of Executive
Officers & Directors       Age                Title                    Since
--------------------       ---                -----                    -----
R.G. Krushnisky             41      Director                         01/01/1995
Albert Golusin              48      C.F.O & Chairman of the Board    02/05/1999
John Hartman                37      President, CEO & Director        09/26/2002
Ilija (Sean) Radetich       34      Director                         01/10/2003

R.G.  Krushnisky,  Director  of the  Company.  Mr.  Krushnisky  served  as  past
President  of  Rockford  Technology  Corporation  which  is a  Canadian  company
involved in  Hydrogeneration  plants.  Since 1984,  Mr.  Krushnisky has been the
owner and  operator of  International  Laser Games,  Ltd.,  a British  Columbia,
Canada,  and  coin-operated  arcade  machinery  business.  Mr.  Krushnisky  is a
graduate  of the  United  States  International  University  at San Diego with a
Bachelor Science degree in Business and International Commerce

                                       18
<PAGE>
Albert Golusin, Chief Financial Officer,  Chairman of the Board and Director, is
a Certified Public Accountant in Phoenix,  Arizona.  Since 1992, Mr. Golusin has
been in private practice as an accounting consultant to public companies. He has
also served as a controller for Glenayre  Electronics,  a NASDAQ  company,  from
1984 - 1991.  From 1983 to 1984,  Mr.  Golusin  worked for  Kenneth  Leventhal &
Company. From 1979 to 1981, Mr. Golusin worked for the international  accounting
firm of Grant  Thornton & Company.  Mr.  Golusin  graduated  from Brigham  Young
University in 1978. Mr. Golusin  worked  full-time for Silverado  during part of
2000 and has continued working on a part-time basis.

John Hartman is President,  Chief Executive Officer and a member of the Board of
Directors of Rhombic  Corporation.  Prior to joining  Rhombic,  Mr.  Hartman was
Chief Executive Officer and Chairman of the Board for NEXT Advisors, Inc. in San
Jose California.  While CEO of NEXT Advisors he was responsible for raising over
$4.5M in funding for the development of its proprietary technology, the creation
of a residential and commercial lending division,  and a futures brokerage.  Mr.
Hartman also completed three acquisitions on behalf of NEXT including an on-line
securities  brokerage,  ATradeUSA.com,  an insurance brokerage and a traditional
securities  brokerage.  Before  joining NEXT  Advisors,  Inc.,  Mr.  Hartman was
Managing  Partner of Hartman and Kauffman,  which was  subsequently  merged into
NEXT  Advisors.  As the Managing  Partner of Hartman & Kauffman he increased the
gross  sales of the San Jose  office 400% and grew the sales force from 2 to 30.
From 1995 to January  1999,  Mr.  Hartman  was a Financial  Advisor  with Morgan
Stanley.  Prior to beginning his career at Morgan  Stanley,  he was a Partner of
Realty Capital  Partners of Scotts Valley,  California.  Prior to Realty Capital
Partners, he held several positions with Grubb & Ellis and Company, a commercial
real estate firm  headquartered  in San Francisco,  California.  He received his
Masters in Business  Administration  (MBA) from California  Coast  University in
Santa Ana, California and Bachelor of Science Degree in Business  Administration
from San Jose State University in San Jose, California.

Ilja (Sean)  Radetich  has over 12 years of hands-on  experience  in  investment
banking and corporate finance, and has spent his professional career identifying
and working with emerging  growth  companies.  In that time,  his main focus has
been on PIPE  (Private  Investment  in  Public  Equities)  financings.  His PIPE
experience includes straight equity,  convertible preferred equity,  convertible
debenture  and  subordinated  debentures  of  NASDAQ/AMEX,  OTCBB,  and  foreign
securities.  Since 1991 Sean has  structured  and  negotiated  the risk  capital
investments   for  some  of  Europe's   largest   banks  and  asset   management
institutions. Sean is the founder and managing director of Odyssey Advisors LLC,
an investment firm specializing in PIPE financing.  Sean also has worked for LBI
Group and SBC Warburg in the Private Placement Divisions. Over the past 10 years
Sean has  identified  and developed key financial  advisory  relationships  with
public and private  firms  including  Wall Street Web,  eLiberation,  Clearworks
Technologies,  CyberMerchants Exchange and Cekatel, and has managed transactions
for them including PIPE's, private company investments, and secondary offerings.
In addition to investment  banking,  Sean served as Chief Financial  Officer for
WebCash  Corporation,  a B2B  infrastructure  company  backed by Berg McAfee and
Silicon Valley Angel Fund, and presently in  acquisition  negotiations.  Sean is
currently active on several boards, including Navigate Network, GoNet2k board of
directors,  and Wall Street Web board of  advisors.  Sean  received  his B.S. in
International Economics from the University of Oldenburg,  Germany, and attended
the Haas School of Business, University of California at Berkeley.

ITEM 10. EXECUTIVE COMPENSATION

The following table sets forth certain  information  concerning the compensation
paid by the Company for services  rendered in all  capacities to the Company for
the three  fiscal  years ended  December  31,  2002,  2001 and 2000 of the chief
executive  officer at December  31, 2002 and all officers  and  directors,  as a
group.

                                       19
<PAGE>
                           SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
                                             Annual Compensation                Long Term Compensation
                                                                                          Awards
                                                                                 Restricted     Securities
                                                                 Other Annual       Stock       Underlying       All Other
Name and Principle Position    Year   Salary($)     Bonus($)    Compensation($)  Award(s)($)  Options/SARs(#)  Compensation($)
---------------------------    ----   ---------     --------    ---------------  -----------  ---------------  ---------------
<S>                           <C>         <C>            <C>    <C>             <C>           <C>              <C>
John E. Hartman, CEO (4)       2002       -0-            -0-         None         $15,000          None             None
                               2001       -0-            -0-         None            None          None             None
                               2000       -0-            -0-         None            None          None             None
Albert Golusin, CEO (3)        2002       -0-            -0-         None         $48,153          None             None
                               2001       -0-            -0-         None            None          None             None
                               2000       -0-            -0-         None            None          None             None
Roger Duffield, CEO (2)        2002       -0-            -0-         None            None          None             None
                               2001   $70,000            -0-      $10,000            None          None             None
                               2000   $50,000       $50,000 (2)   $12,500            None          None             None
William L Owen CEO (1)         2002       -0-            -0-         None            None          None             None
                               2001       -0-            -0-         None            None          None             None
                               2000       -0-            -0-      $60,000            None          None             None
All Officers & Directors,
as a group (five persons)
(3) (4) (5) (6) (7)            2002       -0-            -0-         None         $85,675          None             None
                               2001  $145,000            -0-      $46,000            None           (4)             None
                               2000   $40,000        $50,000      $60,450            None          None             None
</TABLE>
----------
(1)  William  Larry  Owen,  was  compensated  by Owen &  Associates  through  an
agreement  with the  Company to provide  office and  administrative  support for
$7,500 a month.  He served as the President of the Company from inception  until
April 2000 in which he then became the Chairman until his retirement on July 26,
2000.

(2) During the year 2000, Roger Duffield  provided  services as a consultant and
received  $12,500  in cash for such  services.  On August  1, 2000 Mr.  Duffield
became the President and Chief  Executive  Officer and received 50,000 shares of
restricted  stock at a deemed  value of $50,000 as a signing  bonus.  During the
remaining  part of 2000 he received  $50,000 in cash.  During the year 2001, the
Company issued 125,000  restricted common shares at a deemed value of $10,000 to
reimburse him for moving expenses.

(3) Albert  Golusin,  Chief  Financial  Officer  and  Director  of the  Company,
provided his services on a part-time  basis during 2000 until September 1, 2000.
During the year 2000, he received $20,000 in cash for services and 25,000 shares
at a deemed  value of $30,563 for office  expenses.  During  2001,  Mr.  Golusin
received  $60,000 in cash for his  services.  During 2002 he served as the Chief
Financial  Officer  and the Chief  Executive  Officer  from  January  1, 2002 to
September 25, 2002. During 2002 he received  1,189,156  restricted common shares
at a deemed value of $48,153.

(4) John  Hartman  became the Chief  Executive  Officer on  September  26, 2002.
During 2002 he received  238,610  restricted  common shares at a deemed value of
$15,000.

(5) R.G.  Krushnisky,  Vice President and Director of the Company,  provides his
consulting  services on a part-time  basis.  During 2000,  he received  $20,000.
During 2000 he exercised an option and  purchased  100,000  shares for $100,000.
During 2001, Mr.  Krushnisky  received $15,000 for services as a Vice President.
He also earned  $18,000 for director  fees during 2001.  During 2002 he received
304,532 restricted common shares at a deemed value of $15,261.

(6) Stanley  Porayko,  Secretary  and  Director  of the  Company,  provides  his
consulting  services on a part-time  basis. He did not receive any shares during
2000 for services.  He received  $450 for his  participation  in board  meetings
during the year 2000.  During 2001, he earned $18,000 in director  fees.  During
2002, he received 181,532 restricted common shares at a deemed value of $7,261.

                                       20
<PAGE>
(7)  All  of the  current  directors  collectively  had an  option  to  purchase
1,000,000  shares at $0.50 per share  until June 30,  2002 and did not  exercise
their  option.  The options  expired and the directors and officers did not have
any options outstanding at December 31, 2002.

There  are no  current  plans to pay cash or stock  dividends  on the  Company's
stock.

VALUE OF OPTIONS AT DECEMBER 31, 2002

The Company  had no options  outstanding  from which it could  obtain cash as of
December 31, 2002.

During 2002 the Company had a total of  2,000,000  options  expire at an average
exercise  price of $ 0.86 per share.  The  exercise  prices  range from $0.50 to
$4.50.  No options were  exercised ; therefore,  the Company did not receive any
cash.

OPTION GRANTS IN THE LAST FISCAL YEAR

The Company granted no options during 2002:

STOCK OPTION PLAN

The Board of Directors of the Company has approved its year 2000 Incentive Stock
Option  Plan  ("Plan")  that  authorizes  the Company to grant  incentive  stock
options.  The Plan  relates  to a total of  2,500,000  shares  of  common  stock
including  all  unexercised  options from prior plans.  All options which may be
outstanding  at any point in time must be  exercised  no later than three months
after  termination  of  employment  or service as a  director,  except  that any
optionee  who is unable to continue  employment  or service as a director due to
total and  permanent  disability  may exercise  such options  within one year of
termination  and the options of an optionee  who is employed or disabled and who
dies must be exercised within one year after the date of death.

The  Plan  is to be  administered  by the  Company's  Board  of  Directors  or a
committee  thereof which determines the terms of options granted,  including the
exercise price, the number of shares of common stock subject to the option,  and
the  terms  and  conditions  of  exercise.  Options  granted  under the plan are
transferable by the optionee.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table contains  information,  as of March 31, 2003,  regarding the
shareholdings of (1) The Company's current directors and executive officers, (2)
those persons or entities who  beneficially own more than 5% of its common stock
and (3) all of the directors and executive officers as a group (giving effect to
the  exercise  of the  warrants  held by each  such  person or  entity).  Unless
otherwise indicated,  the person or entity listed in the table is the beneficial
owner of the shares and has sole voting and investment power with respect to the
share indicated:

                                       21
<PAGE>
                                     Number of shares           Percent of
                                       Common Stock            Common Stock
          Name                      Beneficially Owned     Beneficially Owned(1)
          ----                      ------------------     ---------------------
John Hartman
Chief Executive Officer, Director
1475 South Bascom Ave. # 210
Campbell, CA. 95008-0629                   238,610                0.44%

Albert Golusin (1)
Chief Financial Officer, Director
10641 North 44th Street
Phoenix, Arizona 85028                   1,489,156                2.75%

R.G. Krushnisky
Director
93 English Bluff Road
Tsawwassen, British Columbia
Canada V4M 2M4                           1,154,532                2.13%

Ilya (Sean) Radetich
Director
1475 South Bascom Ave. # 210
Campbell, CA. 95008-0629                   143,000                0.26%

Total shares owned by Directors and
 Officers of the Company (4 persons)     3,025,298                5.58%

----------
(1) Based upon  54,173,936  outstanding  shares of common  stock.  There were no
options outstanding at March 31, 2003.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

On April 8, 2003 the company entered into a binding Letter of Intent with Realty
Capital  Corporation whereby the Company will acquire Realty Capital Corporation
for a purchase  to be  determined  by the net asset  value of Realty  Capital as
determined by an independent,  third party valuation. The transaction is subject
to receipt by the Company of said valuation as well as financial  statements and
the  affirmative  vote  of the  majority  of the  shareholders.  Realty  Capital
Corporation  is majority  controlled  by the  President of Silverado  Financial,
Inc., John E. Hartman and his spouse.

On December 18, 2002,  the Company  entered into a memorandum  of  understanding
with Realty Capital Corporation whereby Realty Capital Corporation would utilize
office  space and  telephone  services  at the  company's  offices in  Campbell,
California  in  exchange  for  payment of  $15,000  per  month.  Realty  Capital
Corporation  is majority  controlled  by the  President of Silverado  Financial,
Inc., John E. Hartman and his spouse.

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

(a) EXHIBITS.  The following  exhibits required by Item 601 to be filed herewith
are incorporated by reference to previously filed documents:

                                       22
<PAGE>
   Exhibit No.               Description and Method of Filing
   -----------               --------------------------------
       2.1    The  Agreement  and  Plan  of   Reorganization   between   Rhombic
              Corporation and Emerald Acquisition Corporation filed in an 8-K on
              January 21, 2000.
       3.1    Certificate of  Incorporation of Emerald  Acquisition  Corporation
              filed on December 3, 1999 in the Form 10SB
       3.2    The  corporate  by-laws filed on December 3, 1999 in the Form 10SB
              10.1 Stock Option Plan filed in the 10-QSB on May 17, 2000.
       10.2   Letter  Agreement  to  purchase  Financial  Software  Inc.,  dated
              November  15, 2002,  incorporated  by reference to Exhibit 10.1 to
              Form 8-K dated November 26, 2002.
       10.3   Audited  financial  statements of Financial  Software Inc. through
              April 30, 2002 and 2001,  respectively,  and unaudited  statements
              through October 31, 2002,  incorporated by reference to Form 8-K/A
              dated February 6, 2003.
       21.1   Subsidiary  of the  Registrant  on  Exhibit  21.1 on  Registrant's
              Annual  Report on Form 10-KSB for the fiscal  year ended  December
              31, 2002.
       23.1   Consent of Auditor
       99.1   Certification of Chief Executive Officer
       99.2   Certification of Chief Financial Officer

(b) REPORTS ON FORM 8-K

       1      Form 8-K dated  October 11, 2002  relating to change of control of
              registrant.

       2      Form 8-K dated November 26, 2002 relating to purchase of Financial
              Software, Inc.

ITEM 14. CONTROLS AND PROCEDURES

The Company  maintains  disclosure  controls and  procedures (as defined in Rule
13a-14  of the  Exchange  Act) that are  designed  to  ensure  that  information
required to be  disclosed  in the  Company's  Exchange  Act report is  recorded,
processed,  summarized  and reported  within the time  periods  specified in the
SEC's rules and forms and that such  information is accumulated and communicated
to the Company's management, including the Company's Chief Executive Officer and
Chief Financial  Officer,  as appropriate,  to allow timely decisions  regarding
required  disclosure.  In designing and evaluating  the disclosure  controls and
procedures,  management  recognized that any controls and procedures,  no matter
how well  designed  and  operated,  can provide  only  reasonable  assurance  of
achieving the desired control objectives and management necessarily was required
to apply  its  judgment  in the  evaluating  the  cost-benefit  relationship  of
possible controls and procedures.

Within 90 days prior to the filing date of this report,  the Company carried out
an evaluation, under the supervision and with the participation of the Company's
management,  including the Company's Chief Executive Officer and Chief Financial
Officer,  of the  effectiveness  of the  design  and  operation  if the  Company
disclosure controls and procedures.  Based on the foregoing, the Company's Chief
Executive  Officer and Chief  Financial  Officer  concluded  that the  Company's
disclosure controls and procedures were effective.

There have been no significant  changes in the Company's internal controls or in
the factors that could significantly  affect the internal controls subsequent to
the date the company completed its evaluation.

                                       23
<PAGE>
                                   SIGNATURES

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

            SILVERADO FINANCIAL, INC. (formerly Rhombic Corporation)


Date: April 14, 2003           By /s/ John E. Hartman
                                  ----------------------------------------
                                  John E. Hartman, Chief Executive Officer


Date: April 14, 2003           By /s/ Albert Golusin
                                  ----------------------------------------
                                  Albert Golusin, Principal Accounting Officer

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

Date: April 14, 2003           By /s/ John E. Hartman
                                  ----------------------------------------
                                  John E. Hartman, Director


Date: April 14, 2003           By /s/ Albert Golusin
                                  ----------------------------------------
                                  Albert Golusin, Director


Date: April 14, 2003           By /s/ Ilja (Sean) Radetich
                                  ----------------------------------------
                                  Ilja (Sean) Radetich, Director

Date: April 14, 2003           By /s/ R.G. Krushnisky
                                  ----------------------------------------
                                  R.G. Krushnisky, Director

                                       24
<PAGE>
                                  CERTIFICATION

I, John E.  Hartman,  Chief  Executive  Officer of  Silverado  Financial,  Inc.,
formerly Rhombic Corporation, certify that:

1)   I have reviewed  this annual report on Form 10-KSB of Silverado  Financial,
     Inc., formerly Rhombic Corporation;

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

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

4)   The  registrant's  other  certifying  officers  and I are  responsible  for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

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

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

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

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

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

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

6)   The  registrant's  other  certifying  officers and I have indicated in this
     annual  report  whether or not there were  significant  changes in internal
     controls  or in other  factors  that could  significantly  affect  internal
     controls  subsequent to the date of our most recent  evaluation,  including
     any corrective actions with regard to significant deficiencies and material
     weaknesses.

Date: April 14, 2003           By /s/ John E. Hartman
                                  ----------------------------------------
                                  John E. Hartman, Chief Executive Officer

                                       25
<PAGE>
                                  CERTIFICATION

I, Albert A. Golusin,  Chief  Financial  Officer of Silverado  Financial,  Inc.,
formerly Rhombic Corporation , certify that:

1)   I have reviewed  this annual report on Form 10-KSB of Silverado  Financial,
     Inc., formerly Rhombic Corporation,;

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

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

4)   The  registrant's  other  certifying  officers  and I are  responsible  for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

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

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

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

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

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

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

6)   The  registrant's  other  certifying  officers and I have indicated in this
     annual  report  whether or not there were  significant  changes in internal
     controls  or in other  factors  that could  significantly  affect  internal
     controls  subsequent to the date of our most recent  evaluation,  including
     any corrective actions with regard to significant deficiencies and material
     weaknesses.

Date: April 14, 2003           By /s/ Albert Golusin
                                  ----------------------------------------
                                  Albert Golusin, Chief Financial Officer

                                       26
<PAGE>
                            SILVERADO FINANCIAL, INC.
                         (formerly Rhombic Corporation)
                          (A DEVELOPMENT STAGE COMPANY)
                                December 31, 2002

                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

                                                                        PAGE
                                                                        ----
REPORT OF INDEPENDENT AUDITORS                                           F-2

CONSOLIDATED BALANCE SHEET AS OF DECEMBER 31, 2002                       F-3

CONSOLIDATED STATEMENTS OF OPERATION FOR THE YEARS ENDED
DECEMBER 31, 2002 AND 2001                                               F-4

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE YEARS ENDED DECEMBER 31, 2002 AND 2001                           F-5

CONSOLIDATED STATEMENTS OF CASH FLOW FOR THE YEARS ENDED
DECEMBER 31, 2001 AND 2001                                               F-6

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS                            F-7 - F-17

                                      F-1
<PAGE>
                         INDEPENDENT ACCOUNTANTS' REPORT


To the Stockholders and Board of Directors of
SILVERADO FINANCIAL, INC.
(formerly Rhombic Corporation):

We have  audited  the  accompanying  consolidated  balance  sheets of  Silverado
Financial, Inc., formerly Rhombic Corporation, (a Development Stage Company) and
subsidiaries as of December 31, 2002, and the related consolidated statements of
operations, stockholders' equity and cash flows for the two years then ended and
the period from inception to December 31, 2002.  These financial  statements are
the responsibility of the Company's management. Our responsibility is to express
an opinion on these consolidated financial statements based on our audits.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all material  respects,  the financial  position of Silverado  Financial,  Inc.,
formerly Rhombic Corporation,  and its consolidated  subsidiaries as of December
31, 2002,  and the results of their  operations and cash flows for the two years
then ended and the period from  inception to December 31,  2002,  in  conformity
with accounting principles generally accepted in the United States of America.

As disclosed in Note 1, the accompanying financial statements have been prepared
assuming  that the Company  will  continue as a going  concern.  The Company has
experienced  material  operating  losses  and  has yet to  commence  significant
revenue producing  operations.  Ultimate  realization of material investments in
intellectual   properties  is  uncertain.   These  and  other  conditions  raise
substantial  doubt about the Company's  ability to continue as a going  concern.
The accompanying  financial statements do not include any adjustments that might
be necessary should the Company be unable to continue as a going concern.


                                   /s/ James C. Marshall, CPA, P.C

Scottsdale, Arizona
April 14, 2003

                                      F-2
<PAGE>
                            SILVERADO FINANCIAL, INC.
                         (formerly Rhombic Corporation)
                          (A DEVELOPMENT STAGE COMPANY)
                                  BALANCE SHEET

                                                                    December 31,
                                                                       2002
                                                                    -----------
ASSETS
CURRENT ASSETS
  Cash                                                              $       561
  Receivables                                                            12,627
  Total Current Assets                                                   13,188
                                                                    -----------
OTHER ASSETS
  Investments                                                            53,692
  Intellectual property                                               1,403,028
  Patents                                                                   734
  Other                                                                   8,803
                                                                    -----------

Total assets                                                        $ 1,479,445
                                                                    ===========

LIABILITIES
CURRENT LIABILITIES
  Accounts Payable                                                  $   109,008
  Accrued interest                                                        3,092
  Due to affiliates                                                      55,000
                                                                    -----------
Total Current Liabilities                                           $   167,100

OTHER LIABILITIES
  Convertible notes payable                                              26,000
  Note payable                                                          275,000
                                                                    -----------
Total liabilities                                                       468,100

STOCKHOLDERS' EQUITY
  Preferred stock, $0.001 par value,
   1,000,000 shares authorized, none issued                                  --
  Common stock, $0.001 par value, 70,000,000 shares
   authorized, 52,000,000 and 28,697,042 issued and
   outstanding at December 31, 2002 and 2001                             52,000
  Additional paid-in capital                                          9,574,427
  (Deficit) accumulated during the development stage                 (8,622,481)
  Net unrealized holding gain on available for sale securities            7,399
                                                                    -----------

Total stockholders' equity                                            1,011,345
                                                                    -----------

Total liabilities and stockholders' equity                          $ 1,479,445
                                                                    ===========

See accompanying notes to these consolidated financial statements.

                                      F-3
<PAGE>
                            SILVERADO FINANCIAL, INC.
                         (formerly Rhombic Corporation)
                          (A DEVELOPMENT STAGE COMPANY)
                      CONSOLIDATED STATEMENTS OF OPERATION

<TABLE>
<CAPTION>
                                                  For the 12 months ended             Cumulative from
                                                        December 31,                 November 21, 1994
                                             ---------------------------------        (Inception) to
                                                 2002                 2001           December 31, 2002
                                             ------------         ------------       -----------------
<S>                                          <C>                  <C>                  <C>
REVENUES
  Revenue                                    $      7,500         $         --         $     13,229
  Interest income                                      80                6,954
                                             ------------         ------------         ------------
                                                    7,500                   80               20,183
EXPENSES
  Research and development expense                 (9,184)              12,159              688,563
  Write down on intellectual property             276,250              404,158            2,168,038
  Legal and accounting                             54,420              164,055              795,738
  Consulting, related party                            --                1,294              368,294
  Consulting                                           --               37,375            2,876,830
  Interest expense                                  6,820                6,820
  Other general and administrative                 82,167              291,329            1,665,917
                                             ------------         ------------         ------------
Total Expenses                                    410,473              910,370            8,570,200

Net (loss) from operations                       (402,973)            (910,290)          (8,550,017)

OTHER REVENUES & EXPENSES
  (Loss) on sale of investments                        --              (72,464)             (72,464)

                                             ------------         ------------         ------------
NET (LOSS)                                   $   (402,973)        $   (982,754)        $ (8,622,481)
                                             ============         ============         ============
NET (LOSS) PER SHARE:
  Basic                                      $      (0.01)        $      (0.04)
                                             ============         ============
  Diluted                                    $      (0.01)        $      (0.04)
                                             ============         ============
WEIGHTED AVERAGE SHARES OUTSTANDING:
  Basic                                        31,949,226           27,097,894
                                             ============         ============
  Diluted                                      31,949,226           27,097,894
                                             ============         ============
</TABLE>

See accompanying notes to these consolidated financial statements.

                                      F-4
<PAGE>
                            SILVERADO FINANCIAL, INC.
                         (formerly Rhombic Corporation)
                         (A DEVELOPMENT STAGE COMPANY)
           CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
                                                                                                             Net
                                                                                            (Deficit)     Unrealized
                                                                                           Accumulated   Holding loss
                                                       Common Stock         Additional       During      on available
                                                ------------------------     Paid-In       Development     for sale
                                                  Shares       Amount        Capital          Stage       securities    Total
                                                  ------       ------        -------          -----       ----------    -----
<S>                                            <C>          <C>           <C>             <C>             <C>       <C>
Balance at December 31, 1999                    24,741,100   $    24,741   $ 4,589,750     $(2,078,855)    $     0   $2,535,636

 Acquisition of Excimer lamp technology            100,000           100       281,150                                  281,250
 Acquisition of LENR/DCM intellectual property     100,000           100       194,150                                  194,250
 Shares issued to acquire Emerald Investments      200,000           200          (200)                                       0
 Shares issued for services                        775,000           775     2,671,810                                2,672,585
 Exercise of stock options                         370,000           370       306,880                                  307,250
 Net (loss)                                                                                 (5,157,899)              (5,157,899)
                                               -----------   -----------   -----------     -----------     -------   ----------
Balance at December 31, 2000                    26,286,100   $    26,286   $ 8,043,540     $(7,236,754)    $     0   $  833,072

 Shares issued for services                      1,244,800         1,245       210,255                                  211,500
 Shares issued under convertible debenture       1,166,142         1,166       198,834                                  200,000
 Net unrealized holding loss on                                                                             (7,476)      (7,476)
 available for sale securities                                                                                                0
 Net (loss)                                                                                   (982,754)                (982,754)
                                               -----------   -----------   -----------     -----------     -------   ----------
Balance at December 31, 2001                    28,697,042   $    28,697   $ 8,452,629     $(8,219,508)    $(7,476)  $  254,342

 Shares issued for services                      1,302,958         1,303        53,895                                   55,198
 Shares issued for Financial Software Inc.      22,000,000        22,000     1,067,903                                1,089,903
 Net unrealized holding gain on
 available for sale securities                                                                              14,875       14,875
 Net (loss)                                                                                   (402,973)                (402,973)
                                               -----------   -----------   -----------     -----------     -------   ----------

Balance at December 31, 2002                    52,000,000   $    52,000   $ 9,574,427     $(8,622,481)    $ 7,399   $1,011,345
                                               ===========   ===========   ===========     ===========     =======   ==========
</TABLE>

See accompanying notes to these consolidated financial statements.

                                      F-5
<PAGE>
                            SILVERADO FINANCIAL, INC.
                         (formerly Rhombic Corporation)
                          (A DEVELOPMENT STAGE COMPANY)
                      CONSOLIDATED STATEMENTS OF CASH FLOW


<TABLE>
<CAPTION>
                                                            For the 12 months ended           Cumulative from
                                                                  December 31,               November 21, 1994
                                                       ---------------------------------      (Inception) to
                                                           2002                 2001         December 31, 2002
                                                       ------------         ------------     -----------------
<S>                                                    <C>                  <C>                <C>
OPERATING ACTIVITIES
  Net (loss) income for the period                     $  (402,973)        $  (982,754)        $(8,622,481)
  Adjustments to reconcile net
  cash used by operations:
  Write down on intellectual property and patents          276,250             404,158           2,086,837
  Loss on sale of marketable securities                         --              72,464              72,464
  Rockford shares issued for services                           --              32,275              32,275
  Common stock issued for services                          55,198             211,500           1,975,682
  Common stock issued for Financial Software Inc.        1,089,903                  --           1,089,903
  Fair value of options granted                                 --                  --           2,082,113
  (Increase)/decrease in accounts receivable               (12,627)                 --             (12,627)
  (Increase)/decrease in prepaid expenses                      300               2,200                  --
  (Increase)/decrease in other assets                       (8,803)                 --              (8,803)
  Increase/(decrease) in accounts payable                   59,916             (67,463)            109,008
  Increase/(decrease) in accrued interest                    3,092                  --               3,092
  Increase/(decrease) in due to affiliates                  55,000                  --              55,000
  Increase/(decrease) in convertible notes payable          26,000                  --              26,000
  Increase/(decrease) in note payable                      275,000                  --             275,000
                                                       -----------         -----------         -----------
Net Cash (Used) by Operating Activities                  1,416,256            (327,620)           (836,537)

FINANCING ACTIVITIES
  Proceeds from private placements                              --                  --           1,347,830
  Proceeds from exercise of stock options                       --                  --           1,006,750
  Proceeds from conversion of debenture                         --             200,000             200,000
                                                       -----------         -----------         -----------
Cash provided from financing activities                         --             200,000           2,554,580
                                                       -----------         -----------         -----------

INVESTING ACTIVITIES
  Cost of patents                                               --             (50,163)           (168,430)
  Proceeds from sale of marketable securities                   --              93,499              93,499
  Acquisition of software system                        (1,398,020)                 --          (1,398,020)
  Investment in Rockford Technologies                           --                  --            (207,756)
  Investment in marketable securities                      (26,775)                 --             (36,775)
                                                       -----------         -----------         -----------
Cash (used) in investment activities                    (1,424,795)             43,336          (1,717,482)
                                                       -----------         -----------         -----------

Increase (decrease) in cash                                 (8,539)            (84,284)                561
Cash at beginning of period                                  9,100              93,384                  --
                                                       -----------         -----------         -----------
Cash at end of period                                  $       561         $     9,100         $       561
                                                       ===========         ===========         ===========
SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING AND
FINANCING ACTIVITIES

Issuance of common stock for licensing agreements
 and intellectual property                             $        --         $    75,500         $ 2,005,350
                                                       ===========         ===========         ===========
Noncash investing and financing activities
 Unrealized loss(gain) on available for sale stock     $   (14,875)        $     7,476         $ 2,005,350
                                                       ===========         ===========         ===========
</TABLE>

See accompanying notes to these consolidated financial statements.

                                      F-6
<PAGE>
                            SILVERADO FINANCIAL, INC.
                         (formerly Rhombic Corporation)
                          (A Development Stage Company)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   FOR YEARS ENDED DECEMBER 31, 2002 AND 2001


Note 1 - ORGANIZATION AND BASIS OF PRESENTATION

Pursuant to an  Agreement  and Plan of  Reorganization  dated  January 18, 2000,
Silverado  Financial,  Inc.,  formerly  Rhombic  Corporation  , (the  "Company")
acquired  all the  outstanding  shares of common  stock of  Emerald  Acquisition
Corporation ("Emerald"),  a Delaware corporation,  from the shareholders thereof
in an exchange for an  aggregate of 200,000  shares of common stock of Silverado
("the Acquisition").  As a result,  Emerald became a wholly owned subsidiary and
was later merged into the Company.

The Acquisition was approved by the unanimous  consent of the Board of Directors
of the Company on January 18, 2000. The Acquisition was effective on January 20,
2000. Upon  effectiveness of the  Acquisition,  pursuant to Rule 12g-3(a) of the
General  Rules  and  Regulations  of the  Securities  and  Exchange  Commission,
Silverado  elected  to become the  successor  issuer to  Emerald  for  reporting
purposes under the  Securities  Exchange Act of 1934 and elected to report under
the Act effective January 20, 2000.

The Company has acquired  rights to certain  intellectual  properties  since its
inception and has  subsequently  recognized  impairments  to almost all of their
original  value.  The Company is determining  its best use for the  intellectual
property which includes evaluating potential sales.

On November 19th,  2002, the Company  acquired all of the issued and outstanding
shares of Financial  Software,  Inc., (FSI) a New Jersey corporation  engaged in
the  development  of  Internet  and  Intranet  financial  software in edition to
operating several Financial Industry publishing web-sites.  This acquisition was
completed  on a share for share  exchange  basis  for  22,000,000  shares of the
Company's  common  stock.  FSI was  acquired  in order to gain access to certain
proprietary  software products owned by FSI which the Company intends to further
develop and extend into comprehensive  mortgage platforms called  MortgageCenter
and FinanCenter.

GOING CONCERN AND PLAN OF OPERATION

The  accompanying  financial  statements  have been  prepared on a going concern
basis,  which  contemplates  the  realization of assets and the  satisfaction of
liabilities  in the normal  course of  business.  The Company  has had  material
operating  losses and has had to rely on offerings of its common stock to obtain
sufficient cash to meet its operating expenses.  The Company has yet to generate
substantive  revenue.  Also,  there can be no assurances  that the  intellectual
properties  owned by the Company will be successfully  developed to a marketable
prototype  level to be used as the basis for  licensing  agreements or marketing
activity or that the book value of the  investments in  intellectual  properties
and Financial  Software Inc. will be realized.  These factors raise  substantial
doubt about the Company's ability to continue as a going concern.  The financial
statements do not include any adjustments  relating to the recoverability of the
carrying value of assets or the amounts and  classification  of liabilities that
might be necessary should the Company be unable to continue as a going concern.

                                      F-7
<PAGE>
Note 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

CONSOLIDATION

The consolidated financial statements include the results of operations, account
balances and cash flows of the Company and its wholly owned  subsidiaries  after
elimination of inter-company transactions

CASH AND EQUIVALENTS

The Company considers cash to be all short-term,  highly liquid investments that
are readily convertible to known amounts of cash and have original maturities of
three months or less.

FOREIGN CURRENCY TRANSLATION

The  functional  currency  of the  Company is the U. S.  dollar.  Certain of the
Company's assets,  liabilities and expenses are denominated in Canadian dollars.
Transactions  denominated  in Canadian  dollars are  translated to U.S.  dollars
using  an  average   exchange  rate  applicable  for  the  month  in  which  the
transactions occur.  Assets and liabilities  denominated in Canadian dollars are
translated  to U.S.  dollars at the exchange  rate existing at the balance sheet
date. Foreign exchange transaction gains and losses have been immaterial.

FINANCIAL INSTRUMENTS

Financial  instruments  consist  primarily of cash,  investments  in  marketable
securities and  obligations  under accounts  payable and accrued  expenses.  The
carrying amounts of cash, accounts receivable,  accounts payable,  notes payable
and accrued  expenses  approximate fair value because of the short term maturity
of those  instruments.  The Company has not determined the fair value of certain
of its  investments  due to the lack of  marketability  and  liquidity  of those
investments and the common director with one such investee.

INVESTMENTS

At December 31, 2002 and 2001, respectively, the Company's investments were held
for sale.

INTELLECTUAL PROPERTY

The Company's  intellectual  property is comprised of technological  ideas and a
software platform acquired with Financial Services Inc. during 2002.

The technological ideas have been acquired through the issuance of shares of the
Company's  common  stock and  further  developed  for cash.  These  intellectual
properties  are valued at the estimated fair market value of the stock issued at
the time of  purchase.  The  value of the  common  stock was  determined  by the
trading value of the shares at and near the date of the  transaction  less a 25%
discount to that trading  value due to  restrictions  on those  securities.  All
stock issued in those transactions contains regulatory restrictions, and in some
cases contractual  restrictions,  on  transferability.  Management  periodically
analyzes the values of the intellectual properties for impairment.

During 2002 and 2001, the Company  evaluated its intellectual  properties.  With
respect to its  technological  ideas,  the Company  determined that based on the
limited resources of the Company,  market for the end products and the potential
development  times and  required  development  costs,  that it would not  pursue

                                      F-8
<PAGE>
Note 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

development of certain of the intellectual properties. The Company wrote off its
investments  in those  intellectual  properties  in 2002 and 2001.  The purchase
price  of the  remaining  intellectual  properties  will be  amortized  over the
estimated useful lives when revenue begins to be generated from those assets.

The Company  periodically  evaluates the recoverability of intangible assets and
takes into account events or  circumstances  that warrant  revised  estimates of
useful  lives  or  that  indicate  that  an  impairment  exists.  The  Company's
intangible assets will be subject to amortization when put into productive use.

IMPAIRMENT OF LONG-LIVED ASSETS

In the event that facts and  circumstances  indicate that the cost of long-lived
assets,  primarily  intellectual  property  and patents,  may be  impaired,  the
Company performs a recoverability  evaluation. If an evaluation is required, the
discounted  estimated  future cash flows associated with the assets are compared
to the assets'  carrying amount to determine  whether a write-down to fair value
is required.

In August 2001,  the FASB issued SFAS No. 144 ("SFAS 144")  "Accounting  for the
Impairment  or Disposal of  Long-Lived  Assets."  SFAS 144 became  effective  on
January 1, 2002 and  supersedes  SFAS No. 121 ("SFAS 121"),  Accounting  for the
Impairment of Long-Lived  Assets and for accounting and reporting  provisions of
APB Opinion No. 30, "Reporting the Results of  Operations-Reporting  the Effects
of  Disposal  of a  Segment  of  a  Business,  and  Extraordinary,  Unusual  and
Infrequently  Occurring Events and  Transactions," for the disposal of a segment
of a business.  The new standard  establishes a single accounting model based on
the framework  established in SFAS 121 for long-lived  assets classified as held
for  sale  be  presented  separately  in  the  consolidated  Balance  Sheet  and
eliminates  the  requirement  to allocate  goodwill to  long-lived  assets to be
tested for impairment.

Effective  January 1, 2002,  impairment of goodwill and  intangible  assets with
indefinite lives will be determined under SFAS 142 as discussed above.

STOCK-BASED COMPENSATION

Statements of Financial Accounting Standards No. 123, Accounting for Stock-Based
Compensation,  ("SFAS 123") established  accounting and disclosure  requirements
using  a  fair-value  based  method  of  accounting  for  stock-based   employee
compensation. The Company periodically issues options to consultants and members
of the Board of Directors. The estimated value of these options is determined in
accordance  with SFAS No. 123 and  expensed as the granted  options  vest to the
grantees.

INCOME TAXES

The Company accounts for income taxes under the liability method pursuant to the
Statement of  Financial  Accounting  Standards  No. 109,  Accounting  for Income
Taxes,  ("SFAS 109").  Deferred taxes arise from temporary  differences,  due to
differences between accounting methods for tax and financial statement purposes.

                                      F-9
<PAGE>
Note 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

LOSS PER SHARE

Net loss per share is calculated  using the weighted average number of shares of
common stock outstanding during the year.

USE OF ESTIMATES

The preparation of financial  statements in conformity  with generally  accepted
accounting principles requires management to make estimates and assumptions that
affect  the  reported  amounts  of assets  and  liabilities  and  disclosure  of
contingent  assets and  liabilities at the date of the financial  statements and
the  reported  amounts of revenues  and expenses  during the  reporting  period.
Actual results could differ from those estimates.

NEW TECHNICAL PRONOUNCEMENTS

In June 2001,  the FASB  issued  SFAS No.  142,  Goodwill  and Other  Intangible
Assets.  This  statement  establishes  accounting  and  reporting  standards for
goodwill and intangibles for years commencing  after December 15, 2001.  Whether
already  acquired or subsequently  acquired after the effective date,  companies
are required to identify intangibles with finite lives and those with indefinite
lives.  Those  intangibles  with  finite  lives  are to be  amortized  over  the
estimated  useful lives of the assets while those with indefinite  lives are not
to be amortized.  Each  intangible or goodwill asset should be analyzed at least
annually for impairment  where the carrying value is in excess of the fair value
of the  intangibles  and in  excess  of the  implied  fair  value in the case of
goodwill  assets.  The  asset's  carrying  value is to be reduced by a charge to
income  if the fair  value is lower  than the  carrying  value.  The  effect  of
implementing this new standard January 1, 2002 did not have a material impact on
the Company for the year ended December 31, 2002.

Note 3 - INTELLECTUAL PROPERTY

Since its inception, the Company entered into numerous agreements as a result of
having acquired certain rights to various complex  intellectual  properties.  It
may sell or license  these  rights and transfer the control of such to the buyer
or licensee.  The  acquisitions of these  intellectual  properties have occurred
since 1995. The intellectual properties include titles such as; Nuclear Battery,
Radio  Nuclide  Battery,  Inertial  Electrostatic   Confinement,   Diamond  Film
Electromechanical  Battery and Disperse Composite Material.  There has yet to be
proven profitable commercial applications for these intellectual properties. The
Company has consulted  with U.S.  universities  and their  professors to further
develop these intellectual  properties through funding of research projects.  In
most cases,  the rights to the  intellectual  properties  were acquired from the
universities,  or from the professors or inventors to the extent they had rights
to the intellectual  properties.  The consideration given by the Company for the
most part was  shares of the  Company's  common  stock.  The value of the shares
given was the basis for the recorded value of the purchases.

The  Company  periodically   analyzes  the  investments  in  these  intellectual
properties for impairment. The stages of development in which these intellectual
properties  are in make  estimation  of value or  determination  of impairment a
difficult  task.  There have been no  substantive  revenues  generated  from the
technologies. The Company has determined that there is no evidence that the book
values  of  these  intellectual  properties  are  impaired  until  it  has  been
determined that there is no likely commercial

                                      F-10
<PAGE>
Note 3 - INTELLECTUAL PROPERTY (continued)

application or one that will produce adequate cash flow to support those values.
The Company  believes  that its current  intellectual  properties  each  require
substantial development and dedication of resources, in both financial and human
resources.  The  Company  has  determined  to pursue a  limited  number of these
intellectual  properties and not pursue a number of others for various  reasons.
Therefore,  the Company has taken a write off of those  intellectual  properties
that it does not intend to pursue. The Company is seeking joint venture partners
for  funding  further  research  and is  more  actively  marketing  and  seeking
strategic  partners for the  remaining  intellectual  properties.  However,  any
change in estimates of impairment may have a significant effect on the financial
condition and results of operations of the Company.

On November 19, 2002, in connection with the acquisition of Financial  Software,
Inc., the Company acquired certain software, web sites and intellectual property
which can aggregate financial information from a large number of data sources on
an  individual  basis,  amalgamate  the data and provide  accurate  and detailed
insight into an individual's  personal  financial  picture on a real time basis.
This  software  can manage a host of  disparate  objectives  as they relate to a
persons  financial goals, be they investment or debt related or any combination.
This software suite, together with mortgage generation capabilities can create a
variety of new and different  mortgage,  investment or insurance  products.  The
Company recorded the software on its books at the seller's basis of $1,398,020.

Note 4 - INVESTMENTS

The Company has the following investments at December 31, 2002 and 2001:

                                   December 31, 2002         December 31, 2001
                                 ---------------------     ---------------------
                                            Estimated                 Estimated
                                 Cost       Fair Value     Cost       Fair Value
                                 ----       ----------     ----       ----------
AVAILABLE FOR SALE SECURITIES
Showintel Networks, Inc.        $26,775      $41,650      $     0      $     0
Rockford Technologies, Inc.      12,042       12,042       24,750       17,274
                                -------      -------      -------      -------
Totals                          $38,817      $53,692      $24,750      $17,274
                                =======      =======      =======      =======

Statements of Financial  Accounting  Standards No. 115,  Accounting  for Certain
Investments  in Debt and  Equity  Securities,  ("SFAS  115")  requires  that all
applicable  investments be classified as trading securities,  available for sale
securities  or held to  maturity  securities.  The  Company  did  not  have  any
investments classified as trading securities or held-to-maturity securities. The
statement  further  requires that  available for sale  securities be reported at
fair value, with unrealized gains and losses excluded from earnings but reported
in a separate  component  of  shareholders'  equity (net of the effect of income
taxes)  until they are sold.  At the time of sale,  any gains or losses  will be
recognized as a component of operating results.

At  December  31,  2002,  the  estimated  fair  value of the  297,500  shares of
Showintel Networks,  Inc. was estimated based on the quoted trading price of the
security at December 31, 2002. The value of the Showintel Networks,  Inc. common
stock is recorded at its fair market value as of December 31, 2002.

The  Company   acquired   2,900,000  shares  of  Rockford   Technologies,   Inc.
("Rockford") in the year ended December 31, 1999 for $207,756 as part of a legal
settlement with Rockford. The 2,900,000 shares

                                      F-11
<PAGE>
Note 4 - INVESTMENTS (continued)

represented an approximate 15% interest in Rockford. As part of that settlement,
members of the Company's  Board of Directors  assumed half of the Board seats of
Rockford.  At December  31, 2001 and 2002,  respectively,  one of the  Company's
directors was also one of three directors of Rockford.  Rockford had no material
operations  during the two years ended December 31, 2001 and 2002.  During 2001,
the Company sold 1,654,519  shares and distributed  900,000 shares for goods and
services.  The  Company  realized a loss of $66,464.  At  December  31, 2001 the
Company  had an  unrealized  loss on  available  stock for sale of $7,476 and on
December 31, 2002 the company had an unrealized gain on available stock for sale
of $14,875.

Note 5 - ASSET IMPAIRMENT CHARGES

The  Company  recognized  asset  impairment  charges  of  $276,250  during  2002
attributable  to the  Excimer  Lamp.  The  Company  was  required  to reduce the
carrying  value of the  assets to fair  value and  recognized  asset  impairment
charges,  because  the  carrying  value  of the  affected  assets  exceeded  the
projected future discounted cash flows.

Note 6 - INCOME TAXES

The Company  does not provide any current or deferred  income tax  provision  or
benefit for any period  presented  because it has experienced  operating  losses
since inception.  The Company has provided a full valuation allowance because of
the  uncertainty  regarding  the  utilization  of the net  operating  loss carry
forwards.

                                                 For the year ended December 31,
                                                 -------------------------------
                                                    2002                2001
                                                  ---------           ---------
Current income tax benefit                        $  51,956           $ 238,115
                                                  ---------           ---------
Deferred income tax benefit                       $ 113,263           $ 165,705
                                                  ---------           ---------
Total current and deferred income tax benefit       165,219             403,820
Valuation allowance                                (165,219)           (403,820)
                                                  ---------           ---------
Benefit of income taxes                           $       0           $       0
                                                  =========           =========

Income tax expense  does not differ from  amounts  computed by applying the U.S.
Federal income tax rate of 34% and the state rate of 7% at December 31, 2002 and
2001, except for the valuation allowance.

At  December  31,  2002,  the  Company  had  realized  net  operating  losses of
approximately  $6,962,672.  Future realization of the net deferred tax assets is
dependent on generating sufficient taxable income prior to their expiration. The
realized net operating losses expire, as follows:

                                      F-12
<PAGE>
Note 6 - INCOME TAXES (continued)

          Expiration                           Federal                   State
          ----------                           -------                   -----
2003                                                                 $  861,526
2004                                                                    603,950
2005                                                                  3,670,269
2006                                                                    578,596
2007                                                                    126,723
2009                                           $44,994
2010                                           379,485
2011                                           461,101
2012                                           236,028
2018                                           861,526
2019                                           603,950
2020                                         3,670,269
2021                                           578,596
2022                                           126,723
                                            ----------               ----------
  Total net operating loss available        $6,962,672               $5,841,064
                                            ==========               ==========

Note 7 - NOTES PAYABLE

Note Payable

As part of the acquisition of Financial  Services  Software,  the Company became
obligated under a note for $275,000 at 8% per annum, payable monthly, in arrears
and  amortized  over  eighteen  equal  installments  of $16,258.  Principal  and
interest  payments  due under the note are abated  until the  Company has raised
sufficient capital through the sale of stock and /or notes to raise a minimum of
four times the monthly  payment due.  Further  additional  monthly  payments are
abated until the Company is able to maintain  sufficient  capital to allow it to
remain cash flow positive and continue making the payments.  There was $2,592 of
accrued unpaid interest at December 31, 2002.

Convertible Notes payable

The Company has two convertible  notes payable totaling $26,000 at 10% per annum
maturing  during the third quarter of 2003. If the Company's stock price is less
than $0.08 per shares at the due date of the note,  the  Company  can extend the
note for one  additional  year.  If the  Company's  stock price is trading at or
above  $0.08  per  share,  the  Company  has the right to  convert  the note and
interest to common  stock at $0.08 per share.  There was $500 of accrued  unpaid
interest at December 31, 2002.

Assuming the Company has the ability to make all note payments under their terms
commencing  October 1, 2003 and does not convert or extend the convertible notes
payable, the minimum annual payments are as follows:

          Year                 Amount
          ----                 ------
          2003                $ 77,374
          2004                 195,096
          2005                  65,032
                              --------
               Total          $337,502
                              ========

                                      F-13
<PAGE>
Note 8 - COMMITMENTS

The Company's  acquisition  agreements  for  intellectual  properties  generally
contain  requirements  to pay royalties to the sellers when revenue is generated
from those intellectual  properties.  At December 31, 2002 and 2001, the Company
had no royalties payable.

The  Company  has  periodically  entered  into  agreements  with third  parties,
primarily  U.S.   universities,   to  fund  research  projects  related  to  its
intellectual properties.  At December 31, 2002 and 2001, there were no long-term
commitments under such arrangements.

On October 18, 2002 the Company entered into a lease for 3,179 square feet in an
office building in Campbell,  California. The lease is for a period of two years
ending on October 31, 2004. The base rental under the lease is $80,111 per annum
($6,675.90  per  month)  during  the  first  twelve  month  period  and  $82,514
($6,876.17 per month) during the second twelve month period.  The lease provides
for the Company to pay its  proportionate  share of the landlord's  common costs
during second twelve month period.

Rent expenses totaled $15,773 and $26,456 for 2002 and 2001 respectively.

Minimum future commitments under all operating leases are as follows:

       Years Ending
       December 31,            Amount
       ------------            ------
          2003               $ 80,511
          2004                 68,762
                              -------
                             $149,273
                             ========

Note 9 - CONVERTIBLE DEBENTURES

During 2002, the Company  issued  $26,000 in  convertible  debentures at 10% per
annum.  The holders can convert the principal  and accrued  interest at any time
into  common  stock at $0.08 per share and have  warrants  to  purchase  325,000
shares of common stock at $0.09 a share.  If the  Company's  stock price is less
than $0.08 per shares at the due date of the note,  the  Company  can extend the
note for one  additional  year.  If the  Company's  stock price is trading at or
above  $0.08  per  share,  the  Company  has the right to  convert  the note and
interest to common  stock at $0.08 per share.  There was $500 of accrued  unpaid
interest at December 31, 2002.

During 2001, the Company issued  $200,000 of 10% convertible  debentures.  These
debentures were converted during 2001 into 1,166,142 shares of common stock.

Note 10 - STOCKHOLDERS' EQUITY

The Company issues common stock as  compensation  to consultants  and to acquire
intellectual  properties.  On June 30, 2002 the Company issued  1,302,958 of its
common stock for services rendered by its officers and consultants.  On November
19, 2002 the Company acquired Financial Software, Inc.

                                      F-14
<PAGE>
Note 10 - STOCKHOLDERS' EQUITY (continued)

for 22,000,000  restricted  common shares.  The value of those  transactions was
determined  based upon the trading  value of the  Company's  common stock at the
time of the transactions.

Note 11 - STOCK OPTIONS

The Company issues stock options  periodically to consultants and members of the
Board of Directors.  The Company has adopted  Statement of Financial  Accounting
Standards  No.  123,  "Accounting  for  Stock-Based  Compensation".  The options
granted in the years ended  December  31, 2002 and 2001,  were  granted to other
than employees,  the intrinsic value method prescribed by Accounting  Principles
Board  Opinion No. 25,  "Accounting  for Stock  Issued to  Employees",  does not
apply. Accordingly,  compensation cost has been recognized for the stock options
granted to other than employees.

Under the provisions of SFAS No. 123, the number of fully vested options granted
of 0 and  1,500,000  options  for the years  ended  December  31, 2002 and 2001,
respectively,  were used to determine  compensation cost. There was no charge to
expense for the value of options  during the years ended  December  31, 2002 and
2001.

The fair value of each option  grant is estimated on the date of grant using the
Black-Scholes option-pricing model with the following assumptions for year ended
December 31, 2001:

                                 2001
                                 ----
Dividend Yield                   None
Volatility                      0.894
Risk free interest rate          4.07%
Expected asset life           7.5 months

The Board of Directors authorized the granting of 0 and 1,500,000 options during
the years ended  December  31, 2002 and 2001.  The price of the options  granted
pursuant  to these  grants is not to be less than 100 percent of the fair market
value of the shares on the date of grant.  The options expire one year from date
of grant and are immediately vested.

The summary of activity for the Company's stock options is presented below:

<TABLE>
<CAPTION>
                                                              Weighted                       Weighted
                                                              Average                        Average
                                                              Exercise                       Exercise
                                                    2002     Price 2002         2001        Price 2001
                                                    ----     ----------         ----        ----------
<S>                                              <C>            <C>           <C>          <C>
Options outstanding at beginning of year         2,000,000      $0.086        1,100,000          N/A
Granted                                                 --        N/A         1,500,000        $0.50
Exercised                                               --        N/A                --          N/A
Terminated/Expired                              (2,000,000)     $0.086         (600,000)       $1.00
Options outstanding at end of year                      --        N/A         2,000,000        $2.30
Options exercisable at end of year                      --        N/A         2,000,000        $2.30
Options available for grant at end of year              --        N/A               --           N/A
Price per share of options outstanding                  --                $0.50 - $0.50
Weighted average remaining contractual lives            --                   7.5 MONTHS
Weighted average fair value of options granted
 during the year                                        --                       $0.050
</TABLE>

                                      F-15
<PAGE>
Note 12 - LOSS PER SHARE

At December 31, 2002,  there were no outstanding  options;  however,  there were
convertible  debentures  with  exercisable  warrants  outstanding.   Outstanding
options,  warrants and convertible  securities to purchase common stock were not
considered in the calculation for diluted earnings per share for the years ended
December  31,  2002 and 2001  because  the  effect of their  inclusion  would be
antidilutive. A reconciliation of the numerator and denominator of the basic and
diluted per share  calculations  for the loss from  continuing  operations is as
follows:

<TABLE>
<CAPTION>
                                              2002                              2001
                                 ------------------------------     ------------------------------
                                 Loss       Shares    Per share     Loss       Shares    Per share
                                 ----       ------    ---------     ----       ------    ---------
<S>                           <C>         <C>          <C>        <C>         <C>          <C>
Net (Loss)                    $(402,973)                          $(984,928)

BASIC LOSS PER SHARE
Loss available to common
stockholders                  $(402,973)  31,949,226   $(0.01)    $(984,928)  27,097,894   $(0.04)

Effect of dilutive securities       N/A                                              N/A

DILUTED LOSS PER SHARE                                 $(0.01)                             $(0.04)
</TABLE>

Convertible  notes and  warrants  to  purchase  650,000  shares  and  options to
purchase  1,500,000 shares of common stock were outstanding at December 31, 2002
and 2001,  respectively,  and were excluded from the computation of diluted loss
per share because the effect of their inclusion would be anti-dilutive.

Note 13 - CREDIT RISK AND OTHER CONCENTRATIONS

The Company has  historically  relied upon cash raised in private  placements of
the Company's common stock for working capital.  At times, the Company maintains
cash balances at banks that exceed insured limits. At December 31, 2002 and 2001
the Company did not have funds on deposit that exceeded the insured limits.

Note 14 - RELATED PARTY TRANSACTIONS

On December 18, 2002,  the company  entered into a memorandum  of  understanding
with Realty Capital Corporation whereby Realty Capital Corporation would utilize
office  space and  telephone  services  at the  Company's  offices in  Campbell,
California  in  exchange  for  payment of  $15,000  per  month.  Realty  Capital
Corporation is majority controlled by the President of Silverado Financial, Inc.

Note 15 - SUBSEQUENT EVENTS

On February 11, 2003 the Company filed a Form 14C Definitive  Statement with the
Securities  and  Exchange  Commission  explaining  that there was a majority  of
shareholders which approved amending the articles of incorporation to change the
name of the Company to Silverado  Financial  Inc. and  increasing the authorized
common  shares  to  100,000,000  having  a $0.001  par  value,  and  authorizing
5,000,000 shares of Preferred Stock having a $0.001 par value.

                                      F-16
<PAGE>
Note 15 - SUBSEQUENT EVENTS (continued)

On April 4, 2003 the Company  announced that it will be applying to the NASD for
a change in  trading  symbol  and CUSIP  number as well as affect a five for one
reverse split of its stock. The number of authorized  shares would also be split
back five for one. The new capitalization would be as follows:

                               Pre Split             Post Split
                               ---------             ----------
Authorized:
 Common:                        100,000,000           20,000,000
 Preferred:                       5,000,000            1,000,000

Issued & Outstanding:
 Common:                         54,173,936           10,834,787
 Preferred:                               0                    0

On April 8, 2003 the company entered into a binding Letter of Intent with Realty
Capital  Corporation whereby the Company will acquire Realty Capital Corporation
for a purchase  price to be determined by the net asset value of Realty  Capital
as determined by an  independent,  third party  valuation.  The  transaction  is
subject  to  receipt  by the  company  of said  valuation  as well as  financial
statements and the affirmative vote of the majority of the shareholders.  Realty
Capital  Corporation  is  majority  controlled  by the  President  of  Silverado
Financial, Inc., John E. Hartman and his spouse.

                                      F-17