U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                               ------------------


                                  FORM 10-KSB/A

                                 Amendment No. 2


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

                                   (Mark One)

[X]  Annual report pursuant to Section 13 or 15(d) of the Securities Exchange
     Act of 1934 For the fiscal year ended December 31, 2003

[ ]  Transition  report   pursuant  to  Section  13 or 15(d) of the  Securities
     Exchange Act of 1934

        For the transition period from _______________ to _______________

                          Commission File No. 000-27365

                          MANAKOA SERVICES CORPORATION
               (Formerly known as Electronic Identification, Inc.)
               ---------------------------------------------------
             (Exact name of registrant as specified in its charter)


      Nevada                          000-27365                   88-0440528
--------------------------------------------------------------------------------
  (State or other                   (Commission               (I.R.S. Employer
  Jurisdiction                       File Number)            Identification No.)
 of incorporation)

             7203 W. Deschutes Avenue, Suite B, Kennewick, WA 99336
             ------------------------------------------------------
               (Address of principal executive offices) (Zip Code)


       Registrant's telephone number, including area code: (509) 736-7000
       ------------------------------------------------------------------
             Securities registered pursuant to Section 12(b) of the
                                 Exchange Act:

                                      None
      --------------------------------------------------------------------
      Securities registered pursuant to Section 12(g) of the Exchange Act:
                         Common Stock, $0.001 Par Value
                                (Title of Class)

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

                                       1
<PAGE>

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

The Issuer's revenues for its year ended December 31, 2003 were $nil.

As of March 29, 2004,  the aggregate  market value of the voting and  non-voting
common equity held by non-affiliates  was  approximately  $19,308,648 based upon
the closing  price per share as  reported  on the NASDAQ  Pink Sheets  Market of
$0.70.

There were 27,853,783  outstanding  shares of the issuer's Common Stock on March
31, 2004

DOCUMENTS INCORPORATED BY REFERENCE

None.

FORWARD-LOOKING STATEMENTS

Statements  contained in this report,  which are not  historical in nature,  are
forward-looking   statements  within  the  meaning  of  the  Private  Securities
Litigation  Reform  Act  of  1995.  These  forward-looking   statements  include
statements  in Item 1 - Business,  Item 5 - Market for Common Equity and Related
Stockholder  Matters,  and Item 6 -  Management's  Discussion  and  Analysis  of
Financial  Condition and Results of  Operations,  which can be identified by the
use of forward-looking  terminology such as believes, expects, plans, estimates,
predicts, potential, continue, may, will, should, or anticipates or the negative
thereof or other variations thereon or comparable terminology, or by discussions
of strategy. These statements are only predictions and involve known and unknown
risks,  uncertainties  and other  factors,  including  the risks in the  section
entitled "Risk  Factors",  that may cause our or our industry's  actual results,
levels of activity,  performance or achievements to be materially different from
any future results, levels of activity, performance or achievements expressed or
implied  by these  forward-looking  statements.  Although  we  believe  that the
expectations  reflected in the forward  looking  statements are  reasonable,  we
cannot   guarantee   future   results,   levels  of  activity,   performance  or
achievements.  Except as required by applicable  law,  including the  securities
laws of the United States, we do not intend to update any of the forward-looking
statements to conform these statements to actual results.

Such  forward-looking  statements  involve certain risks and uncertainties  that
could cause actual results to differ materially from anticipated results.  These
risks and  uncertainties  include  regulatory  constraints,  changes  in laws or
regulations  governing  the  Company's  products and  international  trade,  the
ability of the Company to market  successfully  its products in an  increasingly
competitive  worldwide market,  changes in the Company's  operating or expansion
strategy,  failure to  consummate or  successfully  integrate  proposed  product
developments,  the ability of the Company to manage growth,  the general economy
of the  United  States and the  specific  global  markets  in which the  Company
competes,  the  availability of financing from internal and external sources and
other  factors as may be identified  from time to time in the Company's  filings
with the Securities and Exchange Commission or in the Company's press releases.


                                       2
<PAGE>


                          MANAKOA SERVICES CORPORATION

                                   FORM 10-KSB
                   FOR THE FISCAL YEAR ENDED DECEMBER 31, 2002


PAGE

ITEM 1 DESCRIPTION OF BUSINESS ...............................................4

ITEM 2 DESCRIPTIONS OF PROPERTIES ............................................6

ITEM 3 LEGAL PROCEEDINGS .....................................................6

ITEM 4 SUBMISSIONS  OF  MATTERS  TO A VOTE OF  SECURITY  HOLDERS .............7

ITEM 5 MARKETS FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS..............7

ITEM 6 MANAGEMENT'S  DISCUSSION   AND  ANALYSIS  OR  PLAN  OF
          OPERATION...........................................................8

ITEM 7 FINANCIAL STATEMENTS..................................................13

ITEM 8 CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
         ON ACCOUNTING AND FINANCIAL DISCLOSURE .............................13

ITEM 8A CONTROLS AND PROCEDURES .............................................13

ITEM 9  DIRECTORS,  EXECUTIVE  OFFICERS,  PROMOTERS  AND  CONTROL
         PERSONS; COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT .........14

ITEM 10 EXECUTIVE COMPENSATION ..............................................16

ITEM 11 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
         AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS .....................17

ITEM 12 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS ......................17

ITEM 13 EXHIBITS AND REPORTS ON FORM 8-K ....................................18

ITEM 14 PRINCIPAL ACCOUNTANT FEES AND SERVICES ..............................18

SIGNATURES ..................................................................19


                                       3
<PAGE>


ITEM 1 DESCRIPTION OF BUSINESS

Background

The  Company  was  incorporated  in  Nevada  on May 14,  1992 and its  principal
business  activities  were  directed  towards the  development  and marketing of
contact less smart ID card systems (Smart  Card(s) or Smart ID Card  System(s)).
Unfortunately,  this  development  effort was  unsuccessful.  The  Company  then
proceeded to look for other business opportunities.

The  Company  located a business  opportunity  in the form of  Manakoa  Services
Corporation.  As was disclosed in the  Company's  Form 8-K filed on December 16,
2003,  the Company  entered into a Stock Purchase  Agreement to acquire  Manakoa
Services  Corporation,  a  Washington  corporation.  As  was  disclosed  in  the
Company's Form 8-K filed on March 15, 2004, this acquisition was closed in March
2004. The Company,  which is a Nevada  corporation,  changed its name to Manakoa
Services  Corporation  as  well.  At this  time,  the  Washington  Company  is a
subsidiary of the Nevada  Corporation.  It is  anticipated  that the  Washington
Corporation will be merged into the Nevada Corporation. Whenever necessary to be
clear, the Washington Corporation is referred to as "MSC Washington".

The  balance  of this Form  10-KSB  filing  describes  the  business  of Manakoa
Services Corporation, which is now the Company's business.

Overview


Manakoa  Services  Corporation  was  originally  organized  as a privately  held
services organization focusing on the financial market sector. Manakoa officials
were  introduced to SLX at a Microsoft  and Hewlett  Packard  jointly  sponsored
retreat held in Palm Springs, California in March 2003. During this event Secure
Logistix  Corporation  introduced  what  was  then  called  the  SecureFinancial
regulatory  compliance  consulting  services  framework.  This SLX process based
consulting practice has evolved into the ComplianceSuite  software platform that
is now in  prototype  stage  development.  As an outgrowth of the meeting at the
Microsoft/HP event, Manakoa Services Corporation and Secure Logistix Corporation
management  recognized  complimentary  objects and  concluded  that a formalized
merger made sense.

For a discussion of the accounting treatment of these acquisitions, please refer
to the financial statements.

Today, Manakoa Services Corporation is a development stage Company involved with
software and services targeted at risk management and regulatory compliance. The
Manakoa  compliance  platform is being  designed to provide  enterprises  with a
means for addressing U.S. and international  regulations such as the Gramm Leach
Bliley Act, HIPAA,  USA Patriot Act, and Sarbanes Oxley Act. The precise list of
supported  regulations  is  currently  being  defined and will change over time.
Applying its rapid  deployment  services  model,  the Company  expects to afford
repeatable   and  economic   solutions.   The  products  will  be  delivered  as
pre-configured  platforms designed for implementation by consulting  partners or
internal  compliance  personnel.  The  underlying  platform  model  is  based on
international risk management and security standards such as ISO 17799,  CoBITS,
NIST Risk Management and COSO frameworks.


The Company believes that Manakoa's risk management and compliance  framework is
unique  in terms of  technology  and  breadth.  Unlike  the  typical  consulting
engagement being offered by some  competitors,  the Manakoa platform extends the
reach far beyond analysis and into specific planning, enforcement and reporting.


                                       4
<PAGE>

ITEM 1 DESCRIPTION OF BUSINESS - continued

Ultimately,  Manakoa  customers  should be better  positioned  to move closer to
compliance in addition to realizing a demonstrable  return on investment through
greater efficiency and business contingency planning.

     o    Manakoa  Compliance  WorkCenter  is being  designed as a platform  for
          analyzing current  compliance  states,  providing gap analysis against
          requirements and a compliance planning output facility


     o    Manakoa  Compliance  Control and Command Center (C4) is being designed
          to  transform  the  Board  approved  compliance  plan  into  a  mapped
          enterprise  management  control  environment and to measure compliance
          status

     o    Manakoa  Compliance  KnowledgeBase is being designed as a subscription
          based  on-line  knowledge  transfer  portal  on  risk  management  and
          regulatory compliance

     o    Cyber Attack  Simulator  Trainer is being jointly  developed  with the
          U.S. Department of Energies Pacific Northwest National Laboratories to
          test, train and certify IT professionals on defensive cyber strategies


Principle Markets

The principal  markets for the Manakoa  platforms  initially center on financial
institutions,  health care,  insurance  industry,  and public companies that are
most directly impacted by current  regulatory  pressures.  This list of industry
sectors is anticipated to grow over time. The Company also anticipates targeting
homeland security and other governmental sectors.

The size of the market opportunity appears very large. The regulatory compliance
software market is  experiencing  rapid growth due to the influx in governmental
regulations being instituted by Congress. These new regulations will account for
billions of dollars in IT costs over the coming years.  Nemerts  Research  found
that 80% of  companies  surveyed  have  yet to  purchase  regulatory  compliance
software, with 77% predicted to either begin or increase spending 2005. Industry
growth is projected at over $8.0 Billion and  growing.  AMR  Research,  December
2003 estimated  corporate cost for Sarbanes Oxley alone at $5.5 billion in 2005.
CIO Update,  Oct,  2003 stated  "Compliance  with new federal  regulations  that
address security, privacy, and corporate accountability will have a broad impact
on IT operations at many  organizations"  and goes on to state,  "Compliance  is
reminding  some  people  of  another,  recent  event  that  led to a surge in IT
activity and spending:  Y2K. This time,  however,  there's no "end-time" for the
event;  compliance  is something  that must  continue as long as the laws are in
effect."

Competitive Situation

The Company does not believe there are other  organizations  offering a suite of
products that precisely map to its compliance  platforms.  It must be noted that
many organizations have announced  consulting or software based solutions to one
or more the regulations.  By in large,  those competitive  products and services
are focused on only narrow aspects of the total compliance regulatory landscape.
However, competition does remain a risk factor.

                                       5
<PAGE>

ITEM 1 DESCRIPTION OF BUSINESS - continued

Risk Factors

In addition to  competition,  other  potential risk factors  include but are not
limited to failure to raise  sufficient  capital,  failure to  complete  product
development   in  a  timely   fashion,   changes  in   government   regulations,
non-acceptance of products by the market,  death or disability of key employees,
unforeseen  radical  changes  in the  underlying  technologies,  and  failure to
properly engage strategic and channel partners.

Patents, Trademarks, etc.

The Company  anticipates  copyrighting  and/or patenting  appropriate  software;
business processes and associated intellectual property.  Identification of said
items is Company confidential.

In addition,  the Company anticipates  entering licensing and royalty agreements
with  strategic  partners.   Due  to  the  existence  of  mutual  non-disclosure
agreements,   the  nature  of  these  relationships  cannot  be  revealed  until
transactions have been consummated and publicly announced.

Number of Employees - part and full time.

The  Company  had 3 part  time  employees  at  year-end  2003,  and in its rapid
expansion,  currently  has 3 part time  employees,  6 full time  employees,  and
several contractors.

ITEM 2 DESCRIPTION OF PROPERTIES

The Company's  headquarters  are located in a 5,000 square foot rented  facility
that it  shares  with  one of its  shareholders,  Apogee  Biometrics,  Inc.,  in
Kennewick,  Washington.  The Company was charged a base monthly amount of $4,670
in December 2003. The amount  increased to $5,000 per month in January and is in
effect until December 31, 2004.

The  Company's  product  development  team  began  leasing a 1,625  square  foot
building  in March 2004 in  Boulder,  CO.  During the second  quarter  this team
anticipates  doubling the space to accommodate  staffing growth. The lease calls
for payments of $1,850 per month, which includes furniture rental.

ITEM 3 LEGAL PROCEEDINGS

There are no legal proceedings pending against the Company.

In March 2004,  the Company was contacted by Coalfire  Systems,  Inc., a Company
located in Superior,  Colorado,  raising concerns about the possibility that the
Company could be violating some of its intellectual  property  rights.  Coalfire
has asserted that a key employee of the Company, Tony Noblett, who has also done
independent  contracting  work for Coalfire  Systems during a period in which he
was on leave from Secure Logistix Corporation (the Company's  predecessor),  may
have taken certain Coalfire owned intellectual  property and allowed the Company
to make  use of  such  intellectual  property.  The  Company  has  reviewed  the
situation and believes there is no merit to such allegations. No action has been
brought by Coalfire  Systems and the Company  believes there is no factual basis
for any such action.

                                       6
<PAGE>

ITEM 4 SUBMISSIONS OF MATTERS TO A VOTE OF SECURITY HOLDERS

There were no matters  submitted to the  shareholders  for  approval  during the
fourth quarter of fiscal 2003. However,  during the first quarter of fiscal year
2004, as disclosed in the Form 8-K filed with the SEC on March 15, 2004, certain
amendments  were  made to the  Articles  of  Incorporation  of the  Company  and
approving the Company's 2004 Combined  Incentive and Non-Qualified  Stock Option
Plan by the  written  consent of a  majority  of the  outstanding  shares of the
Company. For further details, please refer to that filing.

ITEM 5 MARKETS FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

The Company's  Common Stock is quoted on NASD Pink Sheet market under the symbol
MKOS. The Company's Common Stock was previously quoted on NASD Pink Sheet market
under the symbol EIDT, until March 19, 2004.

The following table sets forth, for the periods  indicated the range of high and
low sales prices per share of the Company's  Common  Stock,  as reported on NASD
Over-The-Counter  Bulletin  Board,  retroactively  adjusted  for the 1:8 reverse
split of common shares on March 20, 2002.

                                     Low Bid            High Ask
                                     -------            --------
        1st Qtr. 2002                 $0.06              $0.33
        2nd Qtr. 2002                 $0.05              $0.92
        3rd Qtr. 2002                 $0.01              $0.25
        4th Qtr. 2002                 $0.01              $0.65

        1st Qtr. 2003                 $0.01              $0.24
        2nd Qtr. 2003                 $0.05              $0.51
        3rd Qtr. 2003                 $0.06              $1.00
        4th Qtr. 2003                 $0.30              $0.90

As of March 29, 2004 the last reported sale price of the Company's  Common Stock
was $ 0.70 per share.

The  source  of  this  information  is  Yahoo  Finance  quotation  services  and
broker-dealers  making a market in the  Company's  common  stock.  These  prices
reflect inter-dealer prices,  without retail markup,  markdown or commission and
may not represent actual transactions.

Holders

On March 31, 2004, 283  shareholders  of record held the Company's  common stock
and  the  Company  believes  that  there  are  approximately   7,000  additional
shareholders through nominee or street name accounts with brokers.

Dividends

The Company has not  declared or paid  dividends  on its Common  Stock since its
formation,  and  the  Company  does  not  anticipate  paying  dividends  in  the
foreseeable  future.  Although  the  Company  does not  currently  have a credit
facility,  future credit facilities,  if any, are likely to prohibit the payment
of dividends.  Declaration or payment of dividends,  if any, in the future, will
be at the  discretion of the Board of Directors and will depend on the Company's
then current financial  condition,  results of operations,  capital requirements
and other factors deemed relevant by the Board of Directors.

                                       7
<PAGE>

ITEM 5 MARKETS FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS - contnued

Transfer Agent and Registrar

The transfer  agent and registrar for our common stock are American  Registrar &
Transfer Co., 342 East 900 South, and Salt Lake City, Utah 84111.

ITEM 6 MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

The Company has embarked upon an entirely new business enterprise apart from the
original  Electronic  Identification,  Inc.  "EIDT"  contact  less smart ID card
systems.  Prior to the  merger,  EIDT had  abandoned  the  smart ID card  system
business.  The technology  being  developed by the old EIDT, on information  and
belief, was not well received by a market place where  technologically  superior
solutions emerged. There are no plans to utilize the smart ID card system.

Manakoa Services  Corporation was a privately held Washington state  corporation
prior to any merger  activity.  It was a  consulting  services  start up without
sales  but  with  a  focus  on  the  financial   sector.   The  merger   between
Manakoa-Washington  and SLX  occurred as a result of the value  perceived by the
principles of the two private  companies.  No financial  impact analysis entered
into the decision to merge.  It was based solely on the belief of private owners
that a merger was  appropriate  based on mutual  interest  and  strategies.  The
reverse  merger  with EIDT  occurred as method to become a public  company.  The
Board of Directors of EIDT did conduct an independent analysis and determined it
was to the benefit of its  stockholders  to approve the  action.  The  financial
impact  of that  merger  is  documented  in the pre and  post  merger  financial
statement on file with the SEC.

Manakoa Corporation acquired Secure Logistix Corporation (SLC) in November 2003.
SLC was organized in October 2001 as a Colorado Corporation in specific response
to national  terrorist  attacks.  SLC developed  contingency plans and models in
conjunction with a number of governmental and private sector organizations.  The
Company's first task was to identify third party solutions that could be applied
to specific risk management and security issues facing clients.  It became clear
that this market place was disjointed and point product  oriented.  There was no
way to "connect  the dots"  without an  integrated  solution.  The second  major
activity was to define what might be driving the adoption of risk management and
security best practices in the near term. The team  recognized  that a number of
government  regulations  and laws would soon be  driving  organizations  to take
these  issues  seriously.  Based upon these two  findings,  the  Company  made a
strategic decision to shift from an emphasis on consulting services to a product
driven organization  dedicated to the development of an integrated solution that
addresses  basic risk  management  best  practices and the resolution of related
regulatory compliance. The next step was to validate the conceptual underpinning
of a new product as an integrated  software  platform.  This effort included (1)
review of the precise  impact of the  regulations,  (2)  assessment of available
software platforms that would permit rapid, repeatable,  and scalable solutions,
(3) potential customer assessment of interest in the conceptual product, and (4)
exploration of channel relationships.

Manakoa Services  Corporation  (www.Manakoa.com)  is an independent software and
professional  services  Company  positioned  to enter the  multi-billion  dollar
security,  risk  management and regulatory  compliance  marketplace.  As a first
mover  in  Integrated  Enterprise  Risk  Management,  Manakoa's  platform  could
transform  high  cost  security  and  compliance  consulting   engagements  into
automated,  consistent, and cost-effective technology that fosters employee risk
awareness.  Manakoa is working to develop  software  platform  that can  greatly
reduce consulting hours and time-to compliance through  sustainable,  repeatable


                                       8
<PAGE>

ITEM 6 MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION - continued

technology. The Company is also heavily involved in issues of Homeland Security,
with  predecessor  firm Secure  Logistix  Corporation  having  received  federal
commendations for direct response to terrorism.

The Company is involved in research, design and product prototyping. The current
schedule  assumes a third  quarter  release  of alpha  level  computer  code for
testing with select  partners and end users.  A beta version is targeted for the
fourth quarter with the release of version 1.0 in late 2004 or early 2005.

Product Overview

The Manakoa  Enterprise Risk Management  suite,  which will be launched in three
stages, is unique in its comprehensive  approach to the full scope of regulatory
compliance through risk management assessment,  remediation,  policy enforcement
and continuous follow-on monitoring. The names for these products are tentative.

Product:                     Description
------------------------     -----------
Compliance WorkCenter(TM)    Assess the state of compliance, perform appropriate
                             gap analyses, and  provide   Board  of  Director
                             level  plans  for  achieving compliance


Compliance  Command and Control Center(TM)
                             Based  on  Board  of  Director  approved
                             compliance  plan,  controls  are  implemented  to
                             meet and  monitor the desired tate of risk
                             management and regulatory compliance

Compliance KnowledgeBase(tm)
                             A subscription based on-line portal designed to
                             transfer information on risk management and
                             regulatory compliance

Cyber Attack Simulation Trainer (CAST)
                             Jointly developed with the U.S. Department of
                             Energy's Pacific Northwest Laboratories to test,
                             train and certify IT professional on defensive
                             cyber strategies [Due to this recent acquisition as
                             described in the 8K filing of September 7, 2004, no
                             product release date can yet be determined.]

As to the  nature and  timing of the  remaining  efforts  for  completion  it is
important to understand that the suite is really comprised of several  component
parts that will be marketed as discrete  products and eventually also offered as
an  integrated  suite.  The  Manakoa  Compliance  WorkCenter(tm),  which  is  an
assessment and planning software  platform,  currently is at a working prototype
level.  The company is seeking  potential  channel  partner input as development
continues. A late first quarter 2005 release of version one is anticipated.  The
Manakoa  Compliance  Command and Control  Center (C4),  which  overlay  controls
across an  enterprise,  is in the design and  architectural  review  phase.  The
company  seeks a Release 1.0  timeframe in the second or third  quarter of 2005.
Finally,  the Manakoa Compliance  KnowledgeBase(tm),  an informational  Internet
portal  service,  is now in beta level.  The  company  hopes to go live in early
first quarter 2005.

The Manakoa Compliance  KnowledgeBase(tm)  release should help brand the company
in the  marketplace  almost  immediately.  This  brand  should  assist the other


                                       9
<PAGE>

ITEM 6 MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION - continued

products as they are  released.  As a trial period is being  allowed for initial
subscribers  of 30 days, a real revenue  stream  should begin mid first  quarter
2005.  Revenue  from the other  products can be projected 30 to 60 days out from
release.

The primary risk  associated  with not  completing  development  is a reasonable
period of time is that  market  expectations  will have  been  established  with
potential  channel  partners and end user customers.  A failure to deliver would
damage the  reputation  of an  emerging  company and limit its ability to retain
market relationships.  The technological uncertainties are mitigated by the fact
that the  underlying  solutions  are being  built  upon  commercially  available
products and based around  standards like ISO 17799, the NIST-800 series and the
COSO framework.  There are tremendous  content  development and workflow process
pressures requiring the company to retain and expand its high end professionals.
The company  will need to  continue  its fund  raising  efforts to pay for these
professionals in order to meet development deadlines.

The risks  associated with failure to complete  projects in a timely fashion are
fairly  typical of software  development.  We are focusing  initial  releases on
regulations (GLBA,  HIPAA,  FISMA) that have specific  associated  deadlines and
reasonably clear governmental  audit guidelines.  While the company believes the
scheduled release of its  ComplianceSuite(tm)  will map well to potential client
requirements,  development  slippage could adversely impact market  penetration.
Beyond the risk associated with internal schedule delays, changes in the timing,
tone and specific  requirements  set forth by regulators may also have an impact
Finally, competition is also a real risk component. By failing to come to market
in a timely fashion, others could enter and capture market share.


Market Opportunity

The regulatory  compliance market is rapidly growing and represents  billions of
dollars in projected corporate spending. Although the specific list of supported
regulations is currently  under review,  the following  summarizes  initial U.S.
regulations targeted by Manakoa's compliance platforms:

Gramm Leach Bliley Act - GBLA  compliance  involves  over  238,000  firms in the
financial  services  industry and any organization  using  non-public  financial
information and their technical service providers

Sarbanes   Oxley  Act  -Impacts  all  public   companies   estimated  at  14,000
organizations involving corporate governance

HIPAA -Health care and insurance  providers impacted with an emphasis on privacy
matters

USA Patriot Act -  Anti-terrorism  legislation  with a focus on money laundering
Issues

The  company  also  envisions  opportunity  associated  with  the  Cyber  Attack
Simulator  Trainer  (CAST) as both a tool to test "human  factor"  vulnerability
associated with compliance but also as a standalone  revenue source. The ability
to test,  train and certify IT  professionals  to respond  defensively  to cyber
threats has many potential  applications  in a broad cross section of government
and industry.


                                       10
<PAGE>

ITEM 6 MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION - continued

Need for Additional Financing.

The Company  anticipates,  based on  currently  proposed  plans and  assumptions
relating to its  operations,  that it is essential  to complete  the  financings
below. In the event that the Company's plans change, its assumptions prove to be
inaccurate  or its cash flow  proves to be  insufficient  (due to  unanticipated
expenses, inadequate revenues, difficulties, problems or otherwise), the Company
may be required to seek  additional  financing  or curtail its  activities.  Any
issuance of equity  securities  would result in dilution to the interests of the
Company's  stockholders  and any issuance of debt  securities  would subject the
Company  to  risks  that  interest  rates  may  increase  or  cash  flow  may be
insufficient  to  repay  such   indebtedness.   The  Company  currently  has  no
arrangements  or  understandings  for  additional  financing and there can be no
assurance  that  additional  financing  will  be  available  to the  Company  if
required.

The Company envisions a requirement for two rounds of funding.  Initially, it is
expected  that the Company  will raise $2.0  million in a private  placement  in
order  to  accelerate  the  development  and  market  entry  for its  compliance
solutions and provide general administrative  expenses. A second round of public
financing  will be sought  for $8  million to  advance  market  penetration  and
support second-generation product development.

--------------------------------------------------------------------------------
MANAKOA Use of Proceeds             Initial Round      Second Round-$8.0 million
--------------------------------------------------------------------------------
Administrative/Funding Costs             $250,000      $1,000,000
--------------------------------------------------------------------------------
Product Development                      $800,000      $2.500,000
--------------------------------------------------------------------------------
Market Validation and Use Cases          $225,000      $  500,000
--------------------------------------------------------------------------------
Expand Facilities and Infrastructure     $250,000      $1,500,000
--------------------------------------------------------------------------------
Market Development and Demand Creation   $275,000      $1,000,000
--------------------------------------------------------------------------------
Working Capital                          $200,000      $1,500,000
--------------------------------------------------------------------------------

The  Company  intends,  and  is  currently  preparing,  an  offering,  which  is
anticipated to afford the noteholders with the opportunity to convert to equity,
which would satisfy the outstanding  notes payable.  All  noteholders  have been
contacted and the Company expects most, if not all,  noteholders to convert into
that offering.  The related party  indebtedness  is in great part expected to be
extinguished  via  a  shares  for  debt  issuance,   likewise  for  the  accrued
compensation portion.


Plant & Equipment

The Company foresees no expected purchase or sale of plant or related facilities
at this time.

Dependence Upon Qualified Personnel and Executive Officers.

The  Company's  operations  depend in part upon its  ability  to retain and hire
qualified  personnel,  of  which  there  can  be  no  assurance.  The  Company's


                                       11
<PAGE>

ITEM 6 MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION - continued

operations  are also  dependent  upon the  continued  services of its  executive
management team and certain other consultants. The loss of services of the Chief
Executive  Officer,  its executive  management  team or any of its  consultants,
whether as a result of death,  disability  or  otherwise,  could have a material
adverse  effect  upon  the  Company's  operations.  The  Company  does  not have
employment agreements with its executive officers.

Revenue Model

As a new  product  in an  emerging  market,  MANAKOA  Services  Corporation  has
conducted early validation for pricing and client acquisition  estimates.  These
figures  are based upon  feedback  from our  strategic  partners  together  with
potential customers.  The pricing has been estimated using a combination of cost
up and market value considerations.  Review by MANAKOA and our partners is still
underway  and  significant  changes in the  pricing  model may  evolve  prior to
product release.

The  level  of  market  penetration  required  to  achieve  our  plan,  requires
significantly  less  than 1% of all  financial  institutions  to  recognize  the
compliance issues and take a responsible approach to risk mitigation.

Major Risk Factors

Investment in early stage companies is highly risky. An investor must be mindful
of the fact loss of all or part of their  monetary  contributions  is  possible.
While substantial  returns opportunity exists, so too does substantial risk. The
investment  is only suitable to qualified  investors who have no immediate  need
for  liquidity  in their  investment  and bear the risk of potential  loss.  The
following is a list of some of the risk factors associated with this investment:

The  Company is an early stage  organization  without a proven  track  record in
achieving the objectives outlined in this plan;

o    The risk management market place is a dynamic and evolving sector and there
     is no guarantee that the approach  outlined in this summary will be readily
     accepted.  Additionally,  future regulatory compliance may be altered based
     upon changes in the political landscape.

o    The Company is reliant on the  management  team but  contracts  are tenuous
     until such time as adequate  cash flow can be achieved.  In  addition,  the
     Company recognizes the need to recruit additional key members.

o    The Company  recognizes  that at least two rounds of funding will be needed
     to achieve objectives.

o    Management,  Board Members, Board of Advisors and other controlling persons
     may have  conflicts of interest with regard to potential  business  clients
     and  partners.  Where  possible,  these  conflicts  will be  disclosed  and
     appropriately managed.

o    Partners:  The Company is reliant  upon the  participation  of key business
     partners,  in  particular  Microsoft.  A  decision  by  a  partner  not  to
     participate will impact the Company's ability to achieve its objectives.


                                       12
<PAGE>

ITEM 7 FINANCIAL STATEMENTS

MSC Washington was incorporated under the laws of Washington on May 20, 2003. On
November 25, 2003, the Company acquired all of the issued and outstanding common
stock of Secure Logistix Corporation,  a Colorado  corporation.  On December 19,
2003,  the Company  entered  into a Stock  Purchase  Agreement  with  Electronic
Identification,  Inc.  ("EIDT"),  a Nevada  corporation.  Under the terms of the
agreement, EIDT agreed to acquire all of the issued and outstanding common stock
of the Company in exchange for  19,300,000  shares of EIDT's common stock.  This
acquisition has been treated as a recapitalization of the Company, with EIDT the
legal  surviving  entity.  Since EIDT had minimal assets and no operations,  the
recapitalization  has been  accounted  for as the sale of  8,553,783  shares  of
Manakoa common stock for the net liabilities of EIDT. The recapitalization  took
place on December 19, 2003, however the consolidated  financials statements have
been prepared as if the recapitalization took place on December 31, 2003.

Accordingly,  financial  statements are presented for the Company as at December
31, 2003, for EIDT as at December 30, 2003, and for Secure Logistix  Corporation
as at November 24, 2003.

The financial statements are located at the end of this annual report.


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

On May 23, 2003,  Electronic  Identification,  Inc. (the Company)  dismissed its
independent  accountants,  KPMG LLP, Chartered Accountants ("KPMG"),  and on the
same date  engaged  the  services  of  Manning  Elliott,  Chartered  Accountants
("Manning  Elliott")  as its new  independent  accountants  for the year  ending
December 31, 2002. The Company's Board of Directors recommended and approved the
dismissal of KPMG and the appointment of Manning Elliott.

At the time of this filing, the Company has engaged Cordavano and Honeck, a U.S.
accounting firm, as its new independent auditor for the year ending December 31,
2003. The Company's Board of Directors recommended and approved the dismissal of
Manning Elliott and the appointment of Cordavano and Honeck.

There were no  disagreements  between the  Company and either KPMG LLP,  Manning
Elliott  and  Cordavano  and Honeck on any matter of  accounting  principles  or
practices, financial statement disclosure, or auditing scope or procedure.


ITEM 8A CONTROLS AND PROCEDURES

The chief  executive  officer and the  president of the Company  have  concluded
based on their  evaluation  as of a date within 90 days prior to the date of the
filing of this Report, that the Company's disclosure controls and procedures are
effective to ensure that information  required to be disclosed by the Company in
the  reports  filed or  submitted  by it under the  Securities  Act of 1934,  as
amended, is recorded, processed, summarized and reported within the time periods
specified in the  Securities  and  Exchange  Commission's  rules and forms,  and
include controls and procedures designed to ensure that information  required to
be disclosed by the Commission in such reports is accumulated  and  communicated
to the Company's  management,  including the president,  as appropriate to allow
timely decisions regarding required disclosure.

There were no significant changes in the Company's internal controls or in other
factors that could significantly affect these controls subsequent to the date of
such evaluation.

                                       13
<PAGE>

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

The members of the Board of Directors of the Company serve until the next annual
meeting of the  stockholders,  or until their successors have been elected.  The
officers are  appointed  by the Board of  Directors  and hold office until their
earlier death, retirement, resignation or removal.

There are no agreements  for any officer or director to resign at the request of
any other person, and none of the officers or directors named below is acting on
behalf of, or at the direction of, any other person.

                                                                      Year first
Name                       Age   Position                               elected
-------                    ---   --------                            -----------
Electronic Identification
Stuart Platt               70    Chairman of The Board                      2003
Brad Partridge             44    Chief Executive Officer, President         2003
                                 And Director
Tina Hanson                48    Secretary and Director                     2003

Manakoa Services, Inc.
James C. Katzaroff         47    President of MSC Washington                2003
G. Robert Williams         56    Chief Executive Officer of MSC Washington  2003

Secure Logistix
G. Robert Williams         56    Chief Executive Officer                    2003

Note:  Terry Kirby  resigned as  President,  Secretary,  Treasurer  and Director
effective September 10, 2003.

Executive  Officers of the  Company are elected on an annual  basis and serve at
the  discretion of the Board of Directors.  Directors of the Company are elected
on an  annual  basis.  All  directors  agreed to  remain  until the 2004  annual
meeting.

Rear Admiral  Stuart Platt (USN Ret.) was elected as Electronic  Identification,
Inc.'s Chairman of the Board of Directors, effective September 15, 2003. Admiral
Platt has  completed  a  distinguished  career in the  military  followed  by an
equally  successful career in business.  Appointed under President Reagan as the
Navy's first Competition  Advocate General, he led an historic reform program to
improve the way the Navy buys ships,  aircraft, and weapons systems. He was also
Deputy  Commander  of the  Naval  Sea  Systems  Command,  where he  oversaw  the
acquisition  of Navy surface  ships and  submarines.  Admiral  Platt is a highly
decorated  Vietnam  veteran.  After  retiring from the  military,  Admiral Platt
joined DRS, a NYSE-traded leader in the defense electronics  industry,  where he
led and successfully grew the DRS Data Systems Group as President. Admiral Platt
is the Chairman of the Wornick Co. of Cincinnati,  a leading  supplier of combat
rations and humanitarian feeding programs for the Department of Defense. Admiral
Platt is also the author of, "The Armament Tide: Rearming America".

Brad Partridge has been President, CEO and Board Member since September 3, 2002.
Mr. Partridge previously held a Sr. Vice President position with the Company and
replaces Mr. Terry Kirby who has resigned to pursue other opportunities  outside
of the Company.  Mr. Partridge has held senior sales and marketing  positions at
Microsoft, NCR, EDS, Attachmate, FileNet and Advanced Biometrics, Inc.

Tina Hanson has been  Secretary  and Board Member since  September 3, 2002.  Ms.
Hanson is a seasoned  entrepreneur  and sales and marketing  specialist,  having
successfully  launched  a  number  of  health  care  and  consumer  product  and
distribution  businesses  at IMGI  and  PhotoTrust,  Corp,  to  name a few.  She

                                       14
<PAGE>

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

currently  serves as Regional  Sales  Manager for GN ReSound,  an  international
technology Company.

G. Robert Williams - PhD, Chief Executive Officer and Director. Dr. Williams has
over 25 years of senior level IT  management  experience  with start up to large
technology  companies  and  consultancies.  He was also  instrumental  in recent
anthrax   terrorist  attack  crisis  management  and  is  active  in  continuing
anti-terrorism  efforts. He was President of professional  services organization
PDS  Advanced  Technologies  (and Vice  Chairman of the parent  Company .. twice
INC's Top 200 fastest  growing  companies),  president and founder of pioneering
UNIX applications  developer Decathlon Data Systems,  and an executive at System
Development  Corporation/UNISYS  Corporation.  He was a dean of  research at the
University of California,  Los Angeles.  A recognized  technology expert, he was
also  the  featured  speaker  in  the  international  road  shows  sponsored  by
Microsoft,  Hewlett  Packard,  Compaq  and  Tech  Data on UNIX  and  Windows  NT
interoperability.  He is the co-author of the best selling The Ultimate  Windows
Server  2003   Administrator's   Guide   (2003),   The  Ultimate   Windows  2000
Administrator's   Guide   (Addison   Wesley   2000)  and   Windows  NT  &  UNIX:
Administration,  Coexistence,  Integration and Migration  (Addison Wesley 1998),
and other books. He was award a federal commendation for his work in response to
the 2002 anthrax  terrorism  attack (and he authorized the case study  Terrorism
Response,  Risk  Assessment  and  Mitigation).  He was also  named by  Microsoft
Corporation as its Most Valuable Professional in the field of Security.  Bob has
a BA and MPA from Whittier College, and a PhD from UCLA.

James C. Katzaroff, Executive Vice President and Acting Treasurer. Mr. Katzaroff
joined Apogee  Biometrics  as a consultant in July 2001 and became  Chairman and
CEO in December  2001.  Since 1998, Mr.  Katzaroff has held senior  positions at
Telemac, including Chief Financial Officer, Sr.Vice President-Finance,  Sr. Vice
President,   and  Corporate   Secretary  of  Telemac,   Inc.,  an  international
communications  venture active in the pre-paid  wireless  telephony  market.  At
Telemac, he was responsible for the venture's corporate strategy,  investors and
investment  banking  relationships  and the creation of the  original  executive
team.  Prior to Telemac,  Mr.  Katzaroff was a financial  consultant  with Smith
Barney,  Bateman  Eichler and E.F.  Hutton.  Mr.  Katzaroff has been a financial
advisor for numerous start-up and development stage companies,  and has assisted
numerous  companies with their initial public  offerings.  Mr. Katzaroff holds a
Bachelor's Degree in Business Economics from the University of California, Santa
Barbara,  and has completed  advanced  management  courses at the  University of
Washington.

Conflicts of Interest Related to Other Business Activities

James C.  Katzaroff,  Executive  Vice  President and Acting  Treasurer,  is also
Chairman  and CEO of  Apogee  Biometrics,  a  shareholder  that  currently  owns
approximately 18.3% of Manakoa Services Corporation.

The company rents space from Apogee Biometrics, Inc. for $5,000 per month.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities  Exchange Act of 1934, as amended (the "Exchange
Act"),  requires that the Company's officers and directors,  and persons who own
more  than ten  percent  (10%) of a  registered  class of the  Company's  equity
securities,  file  reports of ownership  and changes of ownership  with the SEC.
Officers, directors and greater than ten percent (10%) shareholders are required
by SEC  regulation  to furnish the Company  with copies of all such reports they
file.

                                       15
<PAGE>

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

Based  solely  on its  review  of the  copies of such  reports  received  by the
Company, and on written  representations by the Company's officers and directors
regarding their  compliance  with the applicable  reporting  requirements  under
Section 16(a) of the Exchange Act, the Company  believes  that,  with respect to
its fiscal year ended  December 31, 2003,  the Company's  officers and directors
and all of the persons  known to the Company to own more than ten percent  (10%)
of the Company's Common Stock, either failed to file, on a timely basis, or have
yet to file the required beneficial ownership reports with the SEC.


ITEM 10 EXECUTIVE COMPENSATION

Any compensation received by our officers, directors, and our Board of Directors
will be determined by the Board of Directors from time to time.  Currently,  our
officers,   directors,   and   management   personnel  are  reimbursed  for  any
out-of-pocket  expenses incurred on our behalf.  Except as described below, they
to not receive any other cash compensation at this time,  however it is expected
that this will change as the Company  increases its activity,  obtains financing
and the time demands on these individuals increase.

Summary Compensation Table

The table set forth below  summarizes the annual and long-term  compensation for
services in all capacities to the Company payable to our President.  None of the
other Officers,  Directors,  or other significant  employees total annual salary
and bonus exceeded $100,000 during the year ending December 31, 2003.

As of December 31, 2003,  neither the President nor any other executive  officer
or  Director  had  received  any  equity  compensation  (e.g.   options,   stock
appreciation rights) or other long term compensation. Annual Compensation

Name and Position                 Year   Salary   Bonus   Other
-------------------------------------------------------------------
Brad Partridge                    2003     0        0       0

Compensation of Directors

With the  exception of $500 per month for Admiral  Stuart  Platt,  the Company's
directors are not currently  compensated for their services as a director of the
Company and are not currently  reimbursed  for  out-of-pocket  costs incurred in
attending meetings.

Board of Directors Committees

The  board  of  directors  has not  yet  established  an  audit  committee  or a
compensation  committee.  An  audit  committee  typically  reviews,  acts on and
reports  to the  board  of  directors  with  respect  to  various  auditing  and
accounting matters, including the recommendations and performance of independent
auditors,  the scope of the annual  audits,  fees to be paid to the  independent
auditors, and internal accounting and financial control policies and procedures.
Certain stock exchanges  currently  require  companies to adopt a formal written
charter that establishes an audit committee that specifies the scope of an audit
committee's  responsibilities  and the  means  by  which it  carries  out  those
responsibilities.  In order to be listed on any of these  exchanges,  we will be
required to establish  an audit  committee.  The board of directors  has not yet
established a compensation committee.

                                       16
<PAGE>

ITEM 10 EXECUTIVE COMPENSATION - continued

Employment Contracts

There were no employment contracts with any of our employees during this period.

Stock Option Plan

In Subsequent to the end of the Fiscal Year 2003, the Board of Directors adopted
and a  majority  of  the  shareholders  approved  the  Company's  2004  Combined
Incentive and  Non-Qualified  Stock Option Plan that  authorized the granting of
options for up to 3,000,000  shares of the Company's  common. A copy of the full
text of the plan was file with the Company's Form 8-K filed on March 15, 2004.

ITEM 11 SECURITY  OWNERSHIP  OF CERTAIN  BENEFICIAL  OWNERS AND  MANAGEMENT  AND
RELATED STOCKHOLDER MATTERS

The following table sets forth certain  information  concerning the ownership of
the  Company's  common stock as of December 31, 2003,  with respect to: (i) each
person known to the Company to be the beneficial owner of more than five percent
of the  Company's  common stock;  (ii) all  directors;  and (iii)  directors and
executive officers of the Company as a group.

                                            Amount and Nature
Title      Name of Beneficial                  of Beneficial          Percent
Class      Owner of Group (1)                    Ownership           of Class
-------    -------------------             -----------------        --------

Common     Brad Partridge                              0                 0%

Common     Apogee Biometrics, In               5,086,500                59%

Common     James C. Katzaroff                      1,000                 0%

Common     G. Robert Williams                          0                 0%

Common     All Directors and Executive Officers
           As a Group (5 in number)                1,000                 0%


ITEM 12 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

James C. Katzaroff, President of MSC Washington, directly owns a 12% interest in
Apogee Biometrics, Inc.


                                       17
<PAGE>

ITEM 13 EXHIBITS AND REPORTS ON FORM 8-K

Exhibits

     3.1  Articles of Incorporation  (incorporated by reference to the Company's
          SEC Form 10KSB/A filed with the SEC on June 20, 2000)

     3.2  Certificate of Amendment to Articles of Incorporation (incorporated by
          reference  to the  Company's  Form 8-K filed with the SEC on March 15,
          2004)

     3.3  By Laws  (incorporated  by reference to the Company's SEC Form 10KSB/A
          filed with the SEC on June 20, 2000)

     10.1 2004   Combined   Incentive  and   Non-Qualified   Stock  Option  Plan
          (incorporated  by reference to the  Company's  Form 8-K filed with the
          SEC on March 15, 2004)

     31.1*Certification  pursuant  to Section 302 of the  Sarbanes-Oxley  Act of
          2002 of Brad Partridge, as Principal Executive Officer.

     31.2*Certification  pursuant  to Section 302 of the  Sarbanes-Oxley  Act of
          2002 of James C. Katzaroff,  as Principal  Financial Officer,  EVP and
          Acting Treasurer.

     32.1*Certification  pursuant  to Section 906 of the  Sarbanes-Oxley  Act of
          2002 of Brad Partridge,  as Principal  Executive  Officer and James C.
          Katzaroff, as Principal Financial Officer, EVP and Acting Treasurer.

Reports on Form 8-K

     Form 8-K filed on December 18,  2003,  regarding  the  agreement to acquire
Manakoa Services Corporation (the Washington corporation).

     Form 8-K filed on March 15, 2003,  regarding the closing of the acquisition
of Manakoa  Services  Corporation,  the change of the Company's  name to Manakoa
Services  Corporation,  the amendment of the Company's Articles of Incorporation
to reflect the name change and to increase the Company's  authorized capital and
the adoption of the Company's 2004 Combined  Incentive and  Non-Qualified  Stock
Option Plan.

*Filed herewith

ITEM 14 PRINCIPAL ACCOUNTANT FEES AND SERVICES

Manning  Elliott,  Chartered  Accountants,   Vancouver,  BC,  Canada  served  as
independent  auditors of the Company  for the year ended  December  31, 2002 and
through the 3rd Quarter, 2003.

Cordovano and Honeck,  P.C., Denver,  Colorado served as independent auditors of
the Company for the year ended December 31, 2003.


                                       18
<PAGE>

ITEM 14 PRINCIPAL ACCOUNTANT FEES AND SERVICES - continued

The  Company's  board of directors  pre-approves  all services  performed by the
Company's principal auditor.

                               2003                      2002
Audit Fees              $ 22,000.00               $ 11,000.00
Tax Fees                $      0.00               $    500.00
                   ----------------          ----------------
                        $ 22,000.00               $ 11,500.00

The  Audit  fees for the  years  ended  December  31,  2003  and  2002  were for
professional  services  rendered  for  the  audit  of  the  annual  consolidated
financial  statements and review of the financial  statements included in the of
the Company's form 10QSB.

SIGNATURES

Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned hereunto duly authorized.

Manakoa Services Corporation



By: /s/ G. Robert Williams                                          02/01/2005
    ----------------------                                         -------------
Name:   G. Robert Williams                                             (Date)
Title:  C.E.O.


                                       19
<PAGE>


FINANCIAL STATEMENTS


                       INDEX TO FINANCIAL STATEMENTS

                                                                           Page
                          MANAKOA SERVICES CORPORATION
                        (A Development Stage Enterprise)

Independent Auditors' Report ............................................. 21
Consolidated Balance Sheet at December 31, 2003 .......................... 22
Consolidated Statement of Operations for the period from May 20, 2003
     (inception) through December 31, 2003 ............................... 23
Consolidated Statement of Changes in Shareholders' Deficit for the period
     from May 20, 2003 (inception) through December 31, 2003 ............. 24
Consolidated Statement of Cash Flows for the period from May 20, 2003
     (inception) through December 31, 2003 ............................... 25
Notes to Consolidated Financial Statements ............................... 26

                         ELECTRONIC IDENTIFICATION, INC

Independent Auditors' Reports ............................................ 50
Balance Sheet at December 30, 2003 ....................................... 51
Statements of Operations from January 1, 2003 through
     December 30, 2003 and for the year ended December 31, 2002 .......... 52
Statement of Changes in Shareholders' Deficit from
     January 1, 2002 through December 30, 2003 ........................... 53
Statements of Cash Flows from January 1, 2003 through
     December 30, 2003 and for the year ended December 31, 2002 .......... 54
Notes to Financial Statements ............................................ 55


                                       20
<PAGE>

                          INDEPENDENT AUDITORS' REPORT

To the Board of Directors and Shareholders
Manakoa Services Corporation:


We have audited the balance sheet of Manakoa Services Corporation (a development
stage  enterprise)  as of  December  31,  2003,  and the related  statements  of
operations, changes in shareholder's equity, and cash flows, for the years ended
December 31, 2003 and 2002. These financial statements are the responsibility of
the Company's  management.  Our responsibility is to express an opinion on these
financial statements based on our audit.

We conducted  our audit in accordance  with the standards of the Public  Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement.  An audit includes examining, on a
test basis,  evidence  supporting  the amounts and  disclosures in the financial
statements.  An audit also includes assessing the accounting principles used and
significant  estimates  made by  management,  as well as evaluating  the overall
financial  statement  presentation.   We  believe  that  our  audit  provides  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 Manakoa Services Corporation as
of December 31, 2003,  and the results of its  operations and its cash flows for
the  years  ended  December  31,  2003 and 2002 in  conformity  with  accounting
principles generally accepted in the United States of America.

The accompanying  financial  statements have been prepared  assuming the Company
will  continue  as a going  concern.  As  discussed  in Note 1 to the  financial
statements,  the Company has suffered operating losses since inception and has a
working capital deficit at December 31, 2003,  which raises a substantial  doubt
about its ability to continue as a going concern.  Management's  plans in regard
to these matters are also  described in Note 1. The financial  statements do not
include any adjustments that might result from the outcome of this uncertainty.




Cordovano and Honeck, P.C.
Denver, Colorado
March 26, 2004
(Except for Note 9, as to which
the date is December 16, 2004)


                                       21
<PAGE>

                          MANAKOA SERVICES CORPORATION
                        (A Development Stage Enterprise)
                                  Balance Sheet

                                December 31, 2003
                                                                  As Restated
                                                                  (See Note 9)
                                                                --------------
                                     Assets
Current assets:
     Cash                                                        $       5,442
                                                                --------------
               Total current assets                                      5,442

Property and equipment, net of accumulated depreciation
     of $91,542 (Note 3)                                                 8,883
                                                                --------------

                                                                $       14,325
                                                                ==============

                      Liabilities and Shareholders' Deficit

Current liabilities:
     Current maturities on long-term debt (Note 2)              $      100,000
     Accounts payable                                                   97,573
     Notes payable, convertible (Note 5)                               140,000
     Accrued interest on convertible notes (Note 5)                      1,568
     Indebtedness to related parties (Note 2)                          287,949
     Accrued employee compensation (Note 1)                            500,000
     Accrued interest (Note 2)                                             834
     Other accrued liabilities                                          23,000
                                                                --------------
               Total current liabilities                             1,150,924

Long-term debt:
     Note payable, less current maturities (Note 2)                    100,000
                                                                --------------
               Total liabilities                                     1,250,924
                                                                --------------

Shareholders' deficit (Notes 1, 2 and 6):
     Preferred stock, $001 par value; 25,000,000 shares
       authorized, -0- shares issued and outstanding                        --
     Common stock, $001 par value; 200,000,000 shares
       authorized, 27,853,783 shares issued and outstanding             27,854
     Common stock subscriptions                                           (610)
     Additional paid-in capital                                        124,605
     Retained deficit                                               (1,388,448)
                                                                --------------
               Total shareholders' deficit                          (1,236,599)
                                                                --------------

                                                                $       14,325
                                                                ==============

          See accompanying notes to consolidated financial statements


                                       22
<PAGE>


                          MANAKOA SERVICES CORPORATION
                        (A Development Stage Enterprise)
                            Statements of Operations

                                                                   November 21,
                                                                       2001
                                                                    (Inception)
                                           For The Year Ended        Through
                                                December 31,       December 31,
                                          ----------- ------------ ------------
                                              2003        2002         2003
                                          ----------- ------------ ------------
                                          As Restated
                                         (See Note 9)
                                          -----------

Service revenue                           $    34,000  $    55,625  $    89,625
                                          ----------- ------------ ------------

Operating expenses:
     Cost of services                          30,600       53,175       83,775
     Stock-based compensation (Note 6):
          Software development services       480,000           --      480,000
     Compensation                              75,000       75,000      150,000
     Research and development                 575,000       75,000      650,000
     Other general and administrative costs    93,143       20,321      113,464
                                          ----------- ------------ ------------

               Total operating expenses     1,253,743      223,496    1,477,239
                                          ----------- ------------ ------------

               Loss from operations        (1,219,743)    (167,871)  (1,387,614)

Interest expense (Note 2)                        (834)          --         (834)
                                          ----------- ------------ ------------

               Loss before income taxes    (1,220,577)    (167,871)  (1,388,448)

Income tax provision (Note 4)                      --           --           --
                                          ----------- ------------ ------------

               Net loss                   $(1,220,577) $  (167,871) $(1,388,448)
                                          =========== ============ ============

Basic and diluted loss per share          $     (0.16) $     (0.03)
                                          =========== ============

Weighted average common shares
     outstanding                            7,514,741    6,100,000
                                          =========== ============

          See accompanying notes to consolidated financial statements

                                       23
<PAGE>



                          MANAKOA SERVICES CORPORATION
                        (A Development Stage Enterprise)
                 Statement of Changes in Shareholders' Deficit
<TABLE>
<CAPTION>

                                            Common Stock       Common      Additional                   Total
                                        --------------------   Stock         Paid-In     Retained    As Restated
                                          Shares   Par Value Subscriptions   Capital       Deficit   (See Note 9)
                                        ---------- --------- -------------- ----------- ------------ -------------
<S>                                         <C>       <C>           <C>       <C>            <C>         <C>
Balance, November 21, 2001 (inception)          --  $     --  $          --  $       --  $        --  $         --

Net loss                                        --        --             --          --           --            --
                                        ---------- --------- -------------- ----------- ------------ -------------

Balance, December 31, 2001                      --        --             --          --           --            --

January 1, 2002, stock sold to an
     officer (Note 2)                    6,100,000     6,100             --      (6,000)          --           100
Management and administrative services
     contributed by an officer (Note 2)         --        --             --      75,000           --        75,000
Net loss                                        --        --             --          --     (167,871)     (167,871)
                                        ---------- --------- -------------- ----------- ------------ -------------

Balance, December 31, 2002               6,100,000     6,100             --      69,000     (167,871)      (92,771)

November 24, 2003, stock issued to
     acquire net liabilities of Manakoa
     Services Corporation (Note 1)      12,200,000    12,200           (610)    (13,626)          --        (2,036)
                                        ---------- --------- -------------- ----------- ------------ -------------
November 25, 2003, following
     recapitalization                   18,300,000    18,300           (610)     55,374     (167,871)      (94,807)

December 2003, stock issued in exchange
     for software development services
     (Note 6)                            1,000,000     1,000             --     479,000           --       480,000
December 18, 2003, stock issued to
     acquire net liabilities of Electronic
     Identification, Inc (Note 1)        8,553,783     8,554             --    (409,769)          --      (401,215)
                                        ---------- --------- -------------- ----------- ------------ -------------
December 19, 2003, following
     recapitalization                   27,853,783    27,854           (610)    124,605     (167,871)      (16,022)

Net loss                                        --        --             --          --   (1,220,577)   (1,220,577)
                                        ---------- --------- -------------- ----------- ------------ -------------

Balance, December 31, 2003              27,853,783 $  27,854  $        (610) $  124,605 $ (1,388,448) $ (1,236,599)
                                        ========== ========= ============= ============ ============ =============
</TABLE>

          See accompanying notes to consolidated financial statements


                                       24
<PAGE>

                          MANAKOA SERVICES CORPORATION
                        (A Development Stage Enterprise)
                            Statement of Cash Flows
<TABLE>
<CAPTION>

                                                                              November 21,
                                                                                 2001
                                                      For The Year Ended      (Inception)
                                                         December 31,           Through
                                                  ------------ ------------   December 31,
                                                       2003        2002           2003
                                                  ------------- ------------ --------------
                                                   As Restated
                                                  (See Note 9)
                                                  ------------- ------------ --------------
<S>                                                     <C>          <C>            <C>
Cash flows from operating activities:
   Net loss                                        $ (1,220,577)  $ (167,871)  $ (1,388,448)
   Adjustments to reconcile net loss to net cash
     provided by operating activities:
       Stock-based compensation (Note 2)                480,000           --        480,000
       Services contributed by an officer (Note 2)           --       75,000         75,000
       Changes in operating assets and liabilities:
         Accounts payable                                39,644       91,005        130,649
         Accrued employee compensation                  500,000           --        500,000
         Other accrued liabilities                      200,594        2,750        203,344
                                                  ------------- ------------ --------------
             Net cash provided by
               operating activities                        (339)         884            545
                                                  ------------- ------------ --------------
Cash flows from investing activities:
   Cash acquired in EIDT merger                           4,797           --          4,797
                                                  ------------- ------------ --------------
             Net cash provided by
               investing activities                       4,797           --          4,797
                                                  ------------- ------------ --------------
Cash flows from financing activities:
   Proceeds from sale of common stock                        --          100            100
                                                  ------------- ------------ --------------
             Net cash provided by
               financing activities                          --          100            100
                                                  ------------- ------------ --------------
             Net change in cash                           4,458          984          5,442

Cash, beginning of period                                   984           --             --
                                                  ------------- ------------ --------------
Cash, end of period                                $      5,442  $       984  $       5,442
                                                  ============= ============ ==============
Supplemental disclosure of cash flow information:
   Income taxes                                    $         --  $        --  $          --
                                                  ============= ============ ==============
   Interest                                        $         --  $        --  $          --
                                                  ============= ============ ==============
Non-cash financing activities:
   Common stock issued in Manakoa/SLX
     Stock Purchase Agreement (Note 1)             $     (2,036) $        --  $      (2,036)
                                                  ============= ============ ==============
   Common stock issued in Manakoa/EIDT
     Stock Purchase Agreement (Note 1)             $   (401,215) $        --  $    (401,215)
                                                  ============= ============ ==============
</TABLE>

          See accompanying notes to consolidated financial statements

                                       25
<PAGE>


                          MANAKOA SERVICES CORPORATION
                        (A Development Stage Enterprise)
                         Notes to Financial Statements


NOTE 1: NATURE OF ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Organization

Manakoa Services Corporation (the "Company" or "Manakoa") was incorporated under
the laws of  Colorado  on  November  21,  2001 as  Secure  Logistix  Corporation
("SLX").  On November  25,  2003,  the  Company  entered  into a Stock  Purchase
Agreement with Manakoa  Services  Corporation-Private  Company ("MSC") (see Note
5). On December 19, 2003, the Company  entered into a Stock  Purchase  Agreement
with Electronic Identification,  Inc. ("EIDT"), a public company registered with
the  Security  and  Exchange  Commission  ("SEC") (see Note 7). The Company is a
development   stage   enterprise  in  accordance  with  Statement  of  Financial
Accounting  Standard ("SFAS") No. 7. The Company plans to develop its regulatory
compliance software operations.

The Company operates as a consultant, developer and publisher of risk management
and  regulatory  software-based  solutions  for  corporate  security and Federal
regulatory compliance.  The Company has worked with Federal agencies and private
companies  to  define  enhanced  risk  management  and the  effective  corporate
response  to Federal  regulations  such as the Gramm Leach  Bliley  Act,  Health
Insurance  Portability and  Accountability  Act, Sarbanes Oxley Act, and the USA
Patriot Act.

MSC Recapitalization

On November 25, 2003, MSC, a private shell company incorporated on May 20, 2003,
entered into a Stock Purchase  Agreement with SLX (now known as Manakoa,  or the
Company).  Under the terms of the  agreement,  MSC agreed to acquire  all of the
issued and outstanding  common stock of SLX in exchange for 6,100,000  shares of
MSC common  stock and  $300,000  cash.  The  parties  subsequently  amended  the
agreement  to replace  the  $300,000  cash with the  assumption  of  $300,000 in
liabilities.  Following the acquisition, SLX became a wholly-owned subsidiary of
MSC.  However,  for accounting  purposes,  the acquisition has been treated as a
recapitalization  of SLX,  with MSC the legal  surviving  entity.  Since MSC had
minimal assets and no operations, the recapitalization has been accounted for as
the sale of  12,200,000  shares of SLX common stock for the net  liabilities  of
MSC. Therefore,  the historical  financial  information prior to the date of the
recapitalization, is the financial information of SLX.

In  addition  to the above terms of the Stock  Purchase  Agreement,  the Company
granted 1,000,000  compensatory  common stock options (see Note 6) and agreed to
pay $500,000 to its employees and contractors as payment for 2003 services.  The
$500,000  agreed to be paid by the Company for 2003 services has been accrued as
of December 31, 2003 and is included in the accompanying financial statements as
"Accrued employee compensation" and "Research and development".

EIDT Recapitalization

On December 18, 2003, the Company  entered into a Stock Purchase  Agreement with
EIDT, a Nevada  corporation.  Under the terms of the  Agreement,  EIDT agreed to
acquire  all of the  issued  and  outstanding  common  stock of the  Company  in
exchange for 19,300,000 shares of EIDT's common stock. This acquisition has been
treated as a recapitalization of Manakoa,  with EIDT the legal surviving entity.
Since EIDT had minimal assets and no operations,  the  recapitalization has been
accounted  for as the sale of 8,553,783  shares of Manakoa  common stock for the
net liabilities of EIDT.  Therefore,  the historical financial information prior
to the date of the  recapitalization,  is the financial  information of Manakoa.
Costs of the transaction have been charged to the period.  The  recapitalization
took place on December 18, 2003;  however,  the financial  statements  have been
prepared as if the recapitalization took place on December 31, 2003.


                                       26
<PAGE>

NOTE 1: NATURE OF ORGANIZATION  AND SUMMARY OF SIGNIFICANT  ACCOUNTING  POLICIES
        - continued

Going Concern

The  accompanying  financial  statements  have been  prepared on a going concern
basis,  which  contemplates  the  realization  of  assets  and  satisfaction  of
liabilities  in the  normal  course of  business.  As shown in the  accompanying
financial statements,  the Company has suffered losses since inception and has a
working capital deficit at December 31, 2003. These factors,  among others,  may
indicate  that the Company  will be unable to continue as a going  concern for a
reasonable time.

The  financial  statements  do  not  include  any  adjustments  relating  to the
recoverability  and classification of liabilities that might be necessary should
the Company be unable to continue as a going concern. The Company's continuation
as a going  concern is dependent  upon its ability to generate  sufficient  cash
flow to meet  its  obligations  on a  timely  basis  and  ultimately  to  attain
profitability.  The Company  plans to seek  additional  funding to maintain  its
operations  through debt and equity  financing.  There is no assurance  that the
Company will be successful in its efforts to raise additional working capital or
achieve  profitable  operations.  The  financial  statements  do not include any
adjustments that might result from the outcome of this uncertainty.

Summary of Significant Accounting Policies

Use of estimates

The  preparation  of the  financial  statements in  conformity  with  accounting
principles   generally  accepted  in  the  United  States  of  America  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.

Cash equivalents

For the  purposes of the  statement  of cash flows,  the Company  considers  all
highly  liquid debt  instruments  purchased  with an original  maturity of three
months or less to be cash  equivalents.  The Company had no cash  equivalents at
December 31, 2003.

Property, equipment and depreciation

Property  and  equipment  are  stated  at cost and are  depreciated  over  their
estimated useful lives, estimated at 5 years, using the straight-line method.

Upon   retirement  or  disposition  of  equipment,   the  cost  and  accumulated
depreciation  are removed from the accounts  and any  resulting  gain or loss is
reflected  in  operations.  Repairs  and  maintenance  are charged to expense as
incurred and expenditures for additions and improvements are capitalized.

Software Development Costs

Software  development  costs  are  recorded  in  accordance  with  Statement  on
Financial  Accounting  Standards  ("SFAS") Statement No. 86, "Accounting for the
Costs of Computer  Software to be Sold,  Leased or  Otherwise  Marketed".  Costs
incurred to establish the  technological  feasibility of computer software to be
sold,  leased,  or  otherwise  marketed are expensed as incurred to research and
development  costs. Once technological  feasibility is established,  the cost of
producing product masters for the software is capitalized. Capitalization of the


                                       27
<PAGE>

NOTE 1: NATURE OF ORGANIZATION  AND SUMMARY OF SIGNIFICANT  ACCOUNTING  POLICIES
        - continued

software  development  costs ceases and  amortization of the  capitalized  costs
commences  when the  product is  available  for  general  release to  customers.
Capitalized costs are amortized based on the greater of (a) the ratio of current
gross revenues to the total current and anticipated  future gross  revenues,  or
(b) the straight-line  method over the remaining  estimated economic life of the
product.

Research and development  costs totaled $575,000 and $75,000 for the years ended
December 31, 2003 and 2002,  respectively.  The Company has not  capitalized any
software development costs as of December 31, 2003.

Impairment of Software Development Costs

The Company  will review  software  development  costs for  impairment  whenever
events or changes in  circumstances  indicate that the carrying  amount of these
assets may not be recoverable. These assets are assessed for impairment based on
estimated  undiscounted  future cash flows from these  assets.  If the  carrying
value of the assets exceeds the estimated future undiscounted cash flows, a loss
is recorded  for the excess of the asset's  carrying  value over the fair value.
The Company did not have any capitalized  software development costs at December
31, 2003.

Impairment of Long-Lived Assets

The Company  evaluates  the carrying  value of its  long-lived  assets under the
provisions  of SFAS No.  144,  "Accounting  for the  Impairment  or  Disposal of
Long-Lived Assets".  Statement No. 144 requires impairment losses to be recorded
on long-lived  assets used in  operations  when  indicators  of  impairment  are
present and the  undiscounted  future cash flows  estimated  to be  generated by
those  assets are less than the  assets'  carrying  amount.  If such  assets are
impaired, the impairment to be recognized is measured by the amount by which the
carrying amount of the assets exceeds the fair value of the assets. Assets to be
disposed of are reported at the lower of the carrying value or fair value,  less
costs to sell.

Net loss per share

Basic earnings/loss per share is computed by dividing income available to common
shareholders  (the  numerator) by the  weighted-average  number of common shares
(the denominator) for the period.  The computation of diluted earnings per share
is similar to basic earnings per share, except that the denominator is increased
to  include  the  number  of  additional  common  shares  that  would  have been
outstanding if potentially dilutive common shares had been issued.

At December 31, 2003,  there was no variance  between basic and diluted loss per
share as all potentially  dilutive common shares outstanding  (including 175,000
common stock options) were anti-dilutive.

Income taxes

Income taxes are provided  for the tax effects of  transactions  reported in the
financial  statements  and consist of taxes  currently due plus  deferred  taxes
related  primarily to  differences  between the recorded  book basis and the tax
basis of assets and  liabilities  for  financial and income tax  reporting.  The
deferred tax assets and liabilities represent the future tax return consequences
of those differences, which will either be taxable or deductible when the assets
and liabilities are recovered or settled. Deferred taxes are also recognized for


                                       28
<PAGE>

NOTE 1: NATURE OF ORGANIZATION  AND SUMMARY OF SIGNIFICANT  ACCOUNTING  POLICIES
        - continued

operating  losses that are  available to offset  future  taxable  income and tax
credits that are available to offset future federal income taxes.

Revenue recognition

Service  revenue is  recognized  after  services are provided and  collection is
probable.  Expenses are recognized  when incurred.  The Company did not make any
sales of software  products  during the periods  presented  in the  accompanying
financial statements.

Fair value of financial instruments

The carrying  amounts of cash,  accounts  payable and other accrued  liabilities
approximate fair value due to the short-term maturity of the instruments.

Stock-based compensation

The Company  accounts for  stock-based  employee  compensation  arrangements  in
accordance with Accounting  Principles Board ("APB") Opinion 25, "Accounting for
Stock Issued to Employees" and complies with the  disclosure  provisions of SFAS
No.  123,   "Accounting  for  Stock-Based   Compensation."  Under  APB  No.  25,
compensation  expense is based on the difference,  if any, on the date of grant,
between  the fair  value of the  Company's  stock and the  exercise  price.  The
Company  accounts  for stock  issued to  non-employees  in  accordance  with the
provisions  of SFAS No. 123.  SFAS 123  requires  the fair value based method of
accounting for stock issued to non-employees in exchange for services.

Companies  that  elect to use the  method  provided  in APB 25 are  required  to
disclose pro forma net income and pro forma earnings per share  information that
would have resulted from the use of the fair value based method. The Company has
elected to  continue to apply the  provisions  of APB Opinion No. 25 and provide
the pro forma disclosure provisions of SFAS No. 123.

New accounting pronouncements

Consolidation of Variable Interest Entities

In January 2003,  the  Financial  Accounting  Standards  Board  ("FASB")  issued
Interpretation  No.  46,  "Consolidation  of  Variable  Interest  Entities",  an
interpretation of Accounting Research Bulletin No. 51,  "Consolidated  financial
statements". Interpretation 46 establishes accounting guidance for consolidation
of variable  interest  entities that  function to support the  activities of the
primary beneficiary.  Interpretation 46 applies to any business enterprise, both
public and private, that has a controlling interest, contractual relationship or
other  business  relationship  with a  variable  interest  entity.  The  Company
believes we have no investment in or contractual  relationship or other business
relationship  with a variable interest entity and therefore the adoption did not
have any impact on our financial position or results of operations.  However, if
the Company enters into any such arrangement with a variable  interest entity in
the future,  our financial  position or results of  operations  may be adversely
impacted.

Amendment of Statement 133 on Derivative Instruments and Hedging Activities

On April 30, 2003,  the FASB issued  Statement No. 149,  "Amendment of Statement
133 on Derivative Instruments and Hedging Activities". Statement 149 is intended
to result in more  consistent  reporting  of  contracts  as either  freestanding


                                       29
<PAGE>

NOTE 1: NATURE OF ORGANIZATION  AND SUMMARY OF SIGNIFICANT  ACCOUNTING  POLICIES
        - continued

derivative  instruments  subject to Statement 133 in its entirety,  or as hybrid
instruments  with debt host  contracts  and  embedded  derivative  features.  In
addition,  Statement 149  clarifies the  definition of a derivative by providing
guidance  on the  meaning of initial  net  investments  related to  derivatives.
Statement 149 is effective for contracts entered into or modified after June 30,
2003.  The  Company has adopted  Statement  149,  but it did not have a material
effect on its financial position, results of operations or cash flows.

Financial Instruments with Characteristics of Both Liabilities and Equity

On May 15, 2003,  the FASB issued  Statement  No. 150,  "Accounting  for Certain
Financial  Instruments  with  Characteristics  of both  Liabilities and Equity".
Statement 150 establishes standards for classifying and measuring as liabilities
certain  financial  instruments  that embody  obligations of the issuer and have
characteristics  of both  liabilities  and equity.  Statement  150  represents a
significant  change in  practice  in the  accounting  for a number of  financial
instruments,  including  mandatorily  redeemable equity  instruments and certain
equity  derivatives that frequently are used in connection with share repurchase
programs. The Company currently does not use such instruments.  Statement 150 is
effective for all financial  instruments created or modified after May 31, 2003,
and to other  instruments  as of  September  1, 2003.  The  Company  has adopted
Statement  150 and does not believe the effect of adopting this  statement  will
have a material impact on its financial position,  results of operations or cash
flows.

NOTE 2: RELATED PARTY TRANSACTIONS

Indebtedness to related parties

As of December 31, 2003,  the Company owed five  shareholders a total of $81,674
for accrued salaries,  accrued rent, and expenses paid on behalf of the Company.
These  liabilities are  non-interest  bearing and are due on demand.  Management
plans to settle these liabilities with cash or stock. The $81,674 is included in
the accompanying financial statements as "Indebtedness to related parties".

As part of its merger with EIDT (see Note 7), the Company  acquired  $206,275 in
advances  owed  to  two   shareholders  of  the  Company.   These  advances  are
non-interest  bearing and are due on demand.  Management  plans to settle  these
liabilities  with cash or stock.  The  $206,275 is included in the  accompanying
financial statements as "Indebtedness to related parties".

Commencing  January 1, 2002, the Company began accruing its  president's  salary
due to a lack of working  capital.  During the year ended December 31, 2002, the
president  contributed  half  of the  $150,000  salary,  which  is  recorded  as
additional  paid-in  capital in the  accompanying  financial  statements.  As of
November 23, 2003, the Company owed the president  $209,375 for accrued salaries
and issued a  promissory  note to the  president  as payment for $200,000 of the
accrued  salaries.  The note carries a four percent interest rate and matures on
March 31, 2006.  Accrued interest on the note totaled $834 at December 31, 2003.


                                       30
<PAGE>

NOTE 2: RELATED PARTY TRANSACTIONS - continued

Future maturities of the note are as follows:

Year ended December 31,
---------------------------------
2004                   $  100,000
2005                      100,000
                      -----------
                       $  200,000
                      ===========


Common stock sale

On January 1, 2002,  the Company sold  6,100,000  shares (10,000 shares prior to
recapitalizations)  of its $.001 par value  common  stock to its  president  for
$100.

NOTE 3:  PROPERTY AND EQUIPMENT


Property and equipment consisted of the following at December 31, 2003:

Computer Equipment               $     82,363
Furniture and office equipment   $     18,062
                                 ------------
                                 $    100,425
Less accumulated depreciation   ($     91,542)
                                 ------------
                                 $      8,883
                                 ============
All property and equipment was acquired in the EIDT reverse merger (see Note 7).


NOTE 4: INCOME TAXES

A reconciliation of the U.S.  statutory federal income tax rate to the effective
rate is as follows:

                                               November 24,         December 31,
                                                       2003                 2002
                                           ----------------    -----------------
U.S. federal statutory graduated rate                34.00%               20.73%
State income tax rate, net of federal benefit         3.06%                3.67%
Contributed services                                  0.00%              -10.90%
Net operating loss for which no tax benefit
   is currently available                           -37.06%              -13.50%
                                           ----------------    -----------------
                           Effective rate             0.00%                0.00%
                                           ================    =================

At December 31, 2003,  deferred taxes  consisted of a net tax asset of $474,959,
due to operating loss  carryforwards of $1,313,448,  which was fully allowed for
in the valuation allowance of $474,959.  The valuation allowance offsets the net
deferred tax asset for which there is no assurance of recovery. The deferred tax
assets for the years ended December 31, 2003 and 2002 were $452,295 and $22,664,
respectively. The change in the valuation allowance for the years ended December
31, 2003 and 2002 were also  $452,295 and $22,664,  respectively.  Net operating
loss carryforwards will expire through 2023.

                                       31
<PAGE>

NOTE 4: INCOME TAXES - continued

The valuation  allowance will be evaluated at the end of each year,  considering
positive and negative evidence about whether the asset will be realized. At that
time, the allowance will either be increased or reduced;  reduction could result
in the complete elimination of the allowance if positive evidence indicates that
the value of the deferred tax asset is no longer  impaired and the  allowance is
no longer required.

Should the Company undergo an ownership  change as defined in Section 382 of the
Internal  Revenue  Code,  the Company's  tax net  operating  loss  carryforwards
generated prior to the ownership change will be subject to an annual limitation,
which could reduce or defer the utilization of these losses.

NOTE 5: CONVERTIBLE NOTES PAYABLE

As part of its merger with EIDT (see Note 7), the Company  acquired  $140,000 in
convertible  promissory  notes that were  originally  issued during  October and
November 2003. The notes carry a 10 percent interest rate and mature on November
10, 2004.  The debt holders could not convert the notes as of December 31, 2003.
However, the notes may be converted into the Company's common stock, at the debt
holder's  discretion,  upon  the  closing  of the  Company's  private  placement
offering,  planned  for 2004.  The debt  holders  are  entitled  to convert  the
outstanding  principal and any accrued interest at the rate of 80 percent of the
per share price established in the Company's planned private placement offering.
The conversion is contingent on the Company's successful completion of a private
placement offering of its common stock, as the conversion price per share cannot
be  calculated  until  the  private  placement   offering  price  per  share  is
determined. Accrued interest payable on the notes totaled $1,568 at December 31,
2003.

NOTE 6: STOCKHOLDERS' EQUITY

On November 25, 2003, the Company granted  1,000,000  compensatory  common stock
options to its  employees  and  contractors  as payment for 2003  services.  The
1,000,000  options had an  exercise  price of $.0001 per share and vested on the
grant date.  Due to the nominal  exercise  price the  options  were  immediately
exercised and, for accounting purposes, the transaction has been recorded as the
issuance of  1,000,000  shares of the  Company's  common  stock in exchange  for
services.  The shares  issued in the  transaction  were valued based on the fair
market value of the Company's common stock on the transaction  date, or $.48 per
share  (following the December 19, 2003 merger with  Electronic  Identification,
Inc. - see Note 7).  Stock-based  compensation  expense  totaling  $480,000  was
recognized in the accompanying financial statements.

As stated in the Summary of Significant Accounting Polices, the Company accounts
for awards of stock-based employee compensation under the intrinsic value method
of Opinion 25. Companies that elect to use the method provided in Opinion 25 are
required  to  disclose  pro forma net  income and pro forma  earnings  per share
information  that  would  have  resulted  from the use of the fair  value  based
method.
                                                        For The Years Ended
                                                            December 31,
                                                  -----------------------------
                                                        2003            2002
                                                  -------------- --------------
Net loss, as reported                              $  (1,220,577)  $   (167,871)
                                                  ============== ==============
Stock-based employee compensation, as reported     $     480,000  $           -
                                                  ============== ==============
Stock-based employee compensation, fair value      $     480,000  $           -
                                                  ============== ==============
Pro forma net loss                                 $  (1,220,577) $    (167,871)
                                                  ============== ==============
Basic and diluted net loss per common
   share, as reported                              $       (0.16) $       (0.03)
                                                  ============== ==============
Pro forma basic and diluted net loss
   per common share.                               $       (0.16) $       (0.03)
                                                  ============== ==============

As discussed  above,  due to the nominal terms of the stock awards,  the options
were recorded at fair market value,  which  resulted in no variance  between the
"as reported" and "pro forma" balances in the above schedule.

                                       32
<PAGE>

NOTE 6: STOCKHOLDERS' EQUITY - continued

The following schedule summarizes the changes in the Company's stock awards:

<TABLE>
<CAPTION>
                                   Awards Outstanding and Exercisable       Weighted Average   Weighted Average
                                   ----------------------------------  -------------------------------------------
                                        Number of     Exercise Price        Exercise Price       Remaining
                                          Shares          Per Share             Per Share     Contractual Life
                                   ----------------------------------  -------------------------------------------
<S>                                       <C>               <C>                  <C>               <C>
Balance at January 1, 2002                    -             $0.00              $       -             N/A
   Options granted                            -             $0.00              $       -             N/A
   Options exercised                          -             $0.00              $       -             N/A
   Options cancelled/expired                  -             $0.00              $       -             N/A
                                   ------------                             ------------
Balance at December 31, 2002                                $0.00              $       -             N/A
   Options and warrants acquired
   in recapitalization                  175,000      $.06 to $.10              $    0.07         1.5 years

   Options granted                    1,000,000           $0.0001              $  0.0001            None
   Options exercised                 (1,000,000)          $0.0001              $  0.0001            None
   Options cancelled/expired                  -             $0.00              $      -              N/A
                                   ------------                             ------------
Balance at December 31, 2003            175,000      $.06 to $.10              $    0.07         1.5 years
                                   ============
</TABLE>


Options and warrants acquired in recapitalization

During the year ended December 31, 2003, EIDT granted  non-employees  options to
purchase  50,000 shares of the  Company's  common stock and warrants to purchase
125,000  shares.  The stock  awards were  granted  for  services  provided.  The
exercise prices range from $.06 (125,000  shares) to $.10 (50,000  shares).  The
options and warrants expire between January 27, 2005 and September 10, 2005. The
fair  value of the  awards  were  determined  in  accordance  with  SFAS 123 and
resulted in stock-based compensation expense of $25,400.

The fair value for the options  granted  during the period was  estimated at the
date of grant using the  Black-Scholes  option-pricing  model with the following
assumptions:

          Risk-free interest rate                        2.00%
          Dividend yield                                 0.00%
          Volatility factor                            286.12%
          Weighted average expected life                1 year


NOTE 7: COMMITMENTS

During  December  2003,  the  Company  rented a facility  located in  Kennewick,
Washington  with a shareholder.  The Company was charged base rent of $4,670 for
the month of December. The base rent charge was increased to $5,000 per month in
2004 and expires on December 31, 2004.

On  February  16,  2004,  the Company  began  leasing  office  space in Boulder,
Colorado for its product  development  team. Lease payments increase from $1,660
per month to $3,619 per month through December 31, 2005, when the lease expires.

                                       33
<PAGE>

NOTE 7: COMMITMENTS - continued

Future minimum payments due under the lease agreements are as follows:

   December 31,
   ------------------------
   2004      $       77,115
   2005      $       43,427


NOTE 8: CONCENTRATION OF CREDIT RISK

During the years ended December 31, 2003 and 2002, the Company had two customers
(one in each year) that made up 100 percent of the Company's sales.

NOTE 9: RESTATEMENT

Following a review of the  Company's  Annual  Report on Form 10-KSB for the year
ended December 31, 2003, the SEC  determined  that the Stock Purchase  Agreement
between MSC and SLX should be reported as a recapitalization of SLX and not as a
business  combination  in  accordance  with  Statement of  Financial  Accounting
Standard ("SFAS") No. 141, "Business Combinations" (as previously reported).

As a result,  the  acquisition  has been accounted for as the sale of 12,200,000
shares  of SLX  common  stock  for  the  net  liabilities  of MSC  based  on the
historical  book value,  as opposed to the fair value method required under SFAS
141. The impact of the change resulted in the  reclassification  of the balances
in the Company's  shareholders' deficit accounts and a reduction in the net loss
recognized for the year ended December 31, 2003.

The  following  sets forth the  effects  of the  restatements  discussed  above.
Amounts reflected as "As Previously  Reported"  represent those amounts included
in the Company's  Annual Report on Form 10-KSB/A  (Amendment No. 1) for the year
ended December 31, 2003.

                                       34
<PAGE>



                          MANAKOA SERVICES CORPORATION
                        (A Development Stage Enterprise)
                         Restated Financial Statements
                               December 31, 2003

Independent Auditors' Report ............................................. 36
Balance Sheet ............................................................ 37
Statement of Operations .................................................. 38
Statement of Changes in Shareholders' Deficit............... ............. 39
Statement of Cash Flows .................................................. 40
Notes to Consolidated Financial Statements ............................... 41


                                       35
<PAGE>


                          INDEPENDENT AUDITORS' REPORT

To the Board of Directors and Shareholders
Manakoa Services Corporation:


We have audited the balance sheet of Manakoa Services Corporation (a development
stage  enterprise)  as of  December  31,  2003,  and the related  statements  of
operations, changes in shareholder's equity, and cash flows, for the years ended
December 31, 2003 and 2002. These financial statements are the responsibility of
the Company's  management.  Our responsibility is to express an opinion on these
financial statements based on our audit.

We conducted  our audit in accordance  with the standards of the Public  Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement.  An audit includes examining, on a
test basis,  evidence  supporting  the amounts and  disclosures in the financial
statements.  An audit also includes assessing the accounting principles used and
significant  estimates  made by  management,  as well as evaluating  the overall
financial  statement  presentation.   We  believe  that  our  audit  provides  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 Manakoa Services Corporation as
of December 31, 2003,  and the results of its  operations and its cash flows for
the  years  ended  December  31,  2003 and 2002 in  conformity  with  accounting
principles generally accepted in the United States of America.

The accompanying  financial  statements have been prepared  assuming the Company
will  continue  as a going  concern.  As  discussed  in Note 1 to the  financial
statements,  the Company has suffered operating losses since inception and has a
working capital deficit at December 31, 2003,  which raises a substantial  doubt
about its ability to continue as a going concern.  Management's  plans in regard
to these matters are also  described in Note 1. The financial  statements do not
include any adjustments that might result from the outcome of this uncertainty.




Cordovano and Honeck, P.C.
Denver, Colorado
March 26, 2004
(Except for Note 9, as to which
the date is December 16, 2004)


                                       36
<PAGE>
                          MANAKOA SERVICES CORPORATION
                        (A Development Stage Enterprise)
                                 Balance Sheet

                               December 31, 2003

                                     Assets
<TABLE>
<CAPTION>

                                                        As Previously
                                                           Reported   Adjustments As Restated
                                                        ------------ ------------ ------------
<S>                                                           <C>           <C>        <C>
Current assets:
     Cash                                                $     5,442  $        --  $     5,442
                                                        ------------ ------------ ------------
            Total current assets                               5,442           --        5,442

Property and equipment, net of accumulated depreciation        8,883           --        8,883
Goodwill                                                          --           --           --
                                                        ------------ ------------ ------------

            Total assets                                 $    14,325  $        --  $    14,325

                                                        ============ ============ ============

                     Liabilities and Shareholders' Deficit

Current liabilities:
     Current maturities on long-term debt                $   100,000  $        --  $   100,000
     Accounts payable                                         97,573           --       97,573
     Notes payable, convertible                              140,000           --      140,000
     Accrued interest on convertible notes                     1,568           --        1,568
     Indebtedness to related parties                         287,949           --      287,949
     Accrued employee compensation                           500,000           --      500,000
     Accrued interest                                            834           --          834
     Other accrued liabilities                                23,000           --       23,000
                                                        ------------ ------------ ------------
            Total current liabilities                      1,150,924           --    1,150,924

Long-term debt:
     Notes payable                                           100,000           --      100,000
                                                        ------------ ------------ ------------
            Total liabilities                              1,250,924           --    1,250,924
                                                        ------------ ------------ ------------
Contingencies                                                     --           --           --

Shareholders' deficit:
     Preferred stock                                              --           --           --
     Common stock                                             27,854           --       27,854
     Common stock subscriptions                                 (610)          --         (610)
     Outstanding common stock options                         25,400      (25,400)          --
     Additional paid-in capital                            2,954,751   (2,830,146)     124,605
     Deficit accumulated during the development stage     (4,243,994)   2,855,546   (1,388,448)
                                                        ------------ ------------ ------------

            Total shareholders' deficit                   (1,236,599)          --   (1,236,599)
                                                        ------------ ------------ ------------

            Total liabilities and shareholders' deficit  $    14,325  $        --  $    14,325
                                                        ============ ============ ============
</TABLE>
          See accompanying notes to consolidated financial statements

                                       37
<PAGE>

                          MANAKOA SERVICES CORPORATION
                        (A Development Stage Enterprise)
                            Statement of Operations
<TABLE>
<CAPTION>

                                           For The Year Ended December 31, 2003
                                            --------------------------------------
                                           As Previously  Adjustments  As Restated
                                              Reported
                                            ------------ ------------ ------------
<S>                                          <C>          <C>          <C>
Service revenue                              $         -  $    34,000  $    34,000
                                            ------------ ------------ ------------
Operating expenses:
     Cost of services                                  -       30,600       30,600
     Stock-based compensation:
     Software development services               111,750      368,250      480,000
     Compensation                                  7,813       67,187       75,000
     Research and development                     77,083      497,917      575,000
     Loss on impairment of goodwill            4,035,502   (4,035,502)
     Other general and administrative costs       10,985       82,158       93,143
                                            ------------ ------------ ------------
            Total operating expenses           4,243,133   (2,989,390)   1,253,743
                                            ------------ ------------ ------------

            Loss from operations              (4,243,133)   3,023,390   (1,219,743)

Interest expense                                    (861)          27         (834)
                                            ------------ ------------ ------------

            Loss before income  taxes         (4,243,994)   3,023,417   (1,220,577)

Income tax provision                                   -            -            -
                                            ------------ ------------ ------------
            Net loss                        $ (4,243,994) $ 3,023,417 $ (1,220,577)
                                            ============ ============ ============
Basic and diluted loss per share            $      (0.28) $      0.12 $      (0.16)
                                            ============ ============ ============
Weighted average common shares outstanding    15,044,223   (7,529,482)   7,514,741
                                            ============ ============ ============
</TABLE>
          See accompanying notes to consolidated financial statements

                                       38
<PAGE>


                          MANAKOA SERVICES CORPORATION
                        (A Development Stage Enterprise)
                 Statement of Changes in Shareholders' Deficit
<TABLE>
<CAPTION>

                                                         For the Year Ended December 31, 2003
                                                     -----------------------------------------
                                                     As Previously  Adjustments   As Restated
                                                         Reported
                                                     ------------- ------------- -------------
<S>                                                          <C>           <C>           <C>
Shareholders' deficit, balance at December 31, 2002   $          -  $    (92,771) $    (92,771)
Common stock sold to officers                                  610          (610)            -
Common stock issued in MSC/SLX Stock
     Purchase Agreement                                  2,928,000    (2,930,036)       (2,036)
Common stock issued in exchange for
     software development services                         480,000             -       480,000
Common stock issued in Manakoa/EIDT Stock
     Purchase Agreement                                   (401,215)            -      (401,215)
Net loss                                                (4,243,994)    3,023,417    (1,220,577)
                                                     ------------- ------------- -------------
Shareholders' deficit, balance at December 31, 2003   $ (1,236,599) $          -  $ (1,236,599)
                                                     ============= ============= =============
</TABLE>
          See accompanying notes to consolidated financial statements

                                       39
<PAGE>


                          MANAKOA SERVICES CORPORATION
                        (A Development Stage Enterprise)
                            Statement of Cash Flows
<TABLE>
<CAPTION>

                                                              For the Year Ended December 31, 2003
                                                         --------------------------------------------
                                                          As Previously   Adjustments   As Restated
                                                             Reported
                                                         -------------- -------------- --------------
<S>                                                             <C>            <C>            <C>
Cash flows from operating activities:
     Net loss                                             $  (4,243,994) $   3,023,417  $  (1,220,577)
     Adjustments to reconcile net loss to net cash
        provided by operating activities:
            Stock-based compensation (Note 6)                   111,750        368,250        480,000
            Loss on impairment of goodwill (Notes 1 and 7)    4,035,502     (4,035,502)             -
            Changes in operating assets and liabilities:
            Accounts payable                                      8,559         31,085         39,644
            Accrued employee compensation                        69,271        430,729        500,000
            Other accrued liabilities                            18,290        182,304        200,594
                                                         -------------- -------------- --------------
                  Net cash used in
                      operating  activities                        (622)           283           (339)
                                                         -------------- -------------- --------------
Cash flows from investing activities:
     Cash acquired in Secure Logistix acquisition                   657           (657)             -
     Cash acquired in EIDT merger                                 4,797              -          4,797
                                                         -------------- -------------- --------------
                  Net cash used in
                      investing activities                        5,454           (657)         4,797
                                                         -------------- -------------- --------------
Cash flows from financing activities:
     Proceeds from the sale of common stock                         610           (610)             -
                                                         -------------- -------------- --------------
                  Net cash provided by
                      financing  activities                         610           (610)             -
                                                         -------------- -------------- --------------
                  Net change in  cash                             5,442           (984)         4,458

Cash, beginning of year                                               -            984            984
                                                         -------------- -------------- --------------
Cash, end of year                                         $       5,442  $           -  $       5,442
                                                         ============== ============== ==============

Supplemental disclosure of cash flow information:
     Cash paid for income taxes                           $           -  $           -  $           -
                                                         ============== ============== ==============
     Cash paid forinterest                                $           -  $           -  $           -
                                                         ============== ============== ==============
Non-cash investing and financing activities:
     Common stock issued for MSC/SLX
        Stock Purchase Agreement                          $   2,928,000  $  (2,930,036) $      (2,036)
                                                         ============== ============== ==============
     Common stock issued for Manakoa/EIDT
        Stock Purchase Agreement                         $     (401,215) $           -  $    (401,215)
                                                         ============= =============== ==============
</TABLE>
          See accompanying notes to consolidated financial statements

                                       40
<PAGE>

                          MANAKOA SERVICES CORPORATION
                        (A Development Stage Enterprise)
                          Notes to Financial Statements


NOTE 1: NATURE OF ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Organization

Manakoa Services Corporation (the "Company" or "Manakoa") was incorporated under
the laws of  Colorado  on  November  21,  2001 as  Secure  Logistix  Corporation
("SLX").  On November  25,  2003,  the  Company  entered  into a Stock  Purchase
Agreement with Manakoa  Services  Corporation-Private  Company ("MSC") (see Note
5). On December 19, 2003, the Company  entered into a Stock  Purchase  Agreement
with Electronic Identification,  Inc. ("EIDT"), a public company registered with
the  Security  and  Exchange  Commission  ("SEC") (see Note 7). The Company is a
development   stage   enterprise  in  accordance  with  Statement  of  Financial
Accounting  Standard ("SFAS") No. 7. The Company plans to develop its regulatory
compliance software operations.

The Company operates as a consultant, developer and publisher of risk management
and  regulatory  software-based  solutions  for  corporate  security and Federal
regulatory compliance.  The Company has worked with Federal agencies and private
companies  to  define  enhanced  risk  management  and the  effective  corporate
response  to Federal  regulations  such as the Gramm Leach  Bliley  Act,  Health
Insurance  Portability and  Accountability  Act, Sarbanes Oxley Act, and the USA
Patriot Act.

MSC Recapitalization

On November 25, 2003, MSC, a private shell company incorporated on May 20, 2003,
entered into a Stock Purchase  Agreement with SLX (now known as Manakoa,  or the
Company).  Under the terms of the  agreement,  MSC agreed to acquire  all of the
issued and outstanding  common stock of SLX in exchange for 6,100,000  shares of
MSC common  stock and  $300,000  cash.  The  parties  subsequently  amended  the
agreement  to replace  the  $300,000  cash with the  assumption  of  $300,000 in
liabilities.  Following the acquisition, SLX became a wholly-owned subsidiary of
MSC.  However,  for accounting  purposes,  the acquisition has been treated as a
recapitalization  of SLX,  with MSC the legal  surviving  entity.  Since MSC had
minimal assets and no operations, the recapitalization has been accounted for as
the sale of  12,200,000  shares of SLX common stock for the net  liabilities  of
MSC. Therefore,  the historical  financial  information prior to the date of the
recapitalization, is the financial information of SLX.

In  addition  to the above terms of the Stock  Purchase  Agreement,  the Company
granted 1,000,000  compensatory  common stock options (see Note 6) and agreed to
pay $500,000 to its employees and contractors as payment for 2003 services.  The
$500,000  agreed to be paid by the Company for 2003 services has been accrued as
of December 31, 2003 and is included in the accompanying financial statements as
"Accrued employee compensation" and "Research and development".

EIDT Recapitalization

On December 18, 2003, the Company  entered into a Stock Purchase  Agreement with
EIDT, a Nevada  corporation.  Under the terms of the  Agreement,  EIDT agreed to
acquire  all of the  issued  and  outstanding  common  stock of the  Company  in
exchange for 19,300,000 shares of EIDT's common stock. This acquisition has been
treated as a recapitalization of Manakoa,  with EIDT the legal surviving entity.
Since EIDT had minimal assets and no operations,  the  recapitalization has been
accounted  for as the sale of 8,553,783  shares of Manakoa  common stock for the


                                       41
<PAGE>

NOTE 1: NATURE OF ORGANIZATION AND SUMMARY OF SIGNIFICANT  ACCOUNTING POLICIES -
        continued

net liabilities of EIDT.  Therefore,  the historical financial information prior
to the date of the  recapitalization,  is the financial  information of Manakoa.
Costs of the transaction have been charged to the period.  The  recapitalization
took place on December 18, 2003;  however,  the financial  statements  have been
prepared as if the recapitalization took place on December 31, 2003.

Going Concern

The  accompanying  financial  statements  have been  prepared on a going concern
basis,  which  contemplates  the  realization  of  assets  and  satisfaction  of
liabilities  in the  normal  course of  business.  As shown in the  accompanying
financial statements,  the Company has suffered losses since inception and has a
working capital deficit at December 31, 2003. These factors,  among others,  may
indicate  that the Company  will be unable to continue as a going  concern for a
reasonable time.

The  financial  statements  do  not  include  any  adjustments  relating  to the
recoverability  and classification of liabilities that might be necessary should
the Company be unable to continue as a going concern. The Company's continuation
as a going  concern is dependent  upon its ability to generate  sufficient  cash
flow to meet  its  obligations  on a  timely  basis  and  ultimately  to  attain
profitability.  The Company  plans to seek  additional  funding to maintain  its
operations  through debt and equity  financing.  There is no assurance  that the
Company will be successful in its efforts to raise additional working capital or
achieve  profitable  operations.  The  financial  statements  do not include any
adjustments that might result from the outcome of this uncertainty.

Summary of Significant Accounting Policies

Use of estimates

The  preparation  of the  financial  statements in  conformity  with  accounting
principles   generally  accepted  in  the  United  States  of  America  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.

Cash equivalents

For the  purposes of the  statement  of cash flows,  the Company  considers  all
highly  liquid debt  instruments  purchased  with an original  maturity of three
months or less to be cash  equivalents.  The Company had no cash  equivalents at
December 31, 2003.

Property, equipment and depreciation

Property  and  equipment  are  stated  at cost and are  depreciated  over  their
estimated useful lives, estimated at 5 years, using the straight-line method.

Upon   retirement  or  disposition  of  equipment,   the  cost  and  accumulated
depreciation  are removed from the accounts  and any  resulting  gain or loss is
reflected  in  operations.  Repairs  and  maintenance  are charged to expense as
incurred and expenditures for additions and improvements are capitalized.

                                       42
<PAGE>

NOTE 1: NATURE OF ORGANIZATION AND SUMMARY OF SIGNIFICANT  ACCOUNTING POLICIES -
        continued

Software Development Costs

Software  development  costs  are  recorded  in  accordance  with  Statement  on
Financial  Accounting  Standards  ("SFAS") Statement No. 86, "Accounting for the
Costs of Computer  Software to be Sold,  Leased or  Otherwise  Marketed".  Costs
incurred to establish the  technological  feasibility of computer software to be
sold,  leased,  or  otherwise  marketed are expensed as incurred to research and
development  costs. Once technological  feasibility is established,  the cost of
producing product masters for the software is capitalized. Capitalization of the
software  development  costs ceases and  amortization of the  capitalized  costs
commences  when the  product is  available  for  general  release to  customers.
Capitalized costs are amortized based on the greater of (a) the ratio of current
gross revenues to the total current and anticipated  future gross  revenues,  or
(b) the straight-line  method over the remaining  estimated economic life of the
product.

Research and development  costs totaled $575,000 and $75,000 for the years ended
December 31, 2003 and 2002,  respectively.  The Company has not  capitalized any
software development costs as of December 31, 2003.

Impairment of Software Development Costs

The Company  will review  software  development  costs for  impairment  whenever
events or changes in  circumstances  indicate that the carrying  amount of these
assets may not be recoverable. These assets are assessed for impairment based on
estimated  undiscounted  future cash flows from these  assets.  If the  carrying
value of the assets exceeds the estimated future undiscounted cash flows, a loss
is recorded  for the excess of the asset's  carrying  value over the fair value.
The Company did not have any capitalized  software development costs at December
31, 2003.

Impairment of Long-Lived Assets

The Company  evaluates  the carrying  value of its  long-lived  assets under the
provisions  of SFAS No.  144,  "Accounting  for the  Impairment  or  Disposal of
Long-Lived Assets".  Statement No. 144 requires impairment losses to be recorded
on long-lived  assets used in  operations  when  indicators  of  impairment  are
present and the  undiscounted  future cash flows  estimated  to be  generated by
those  assets are less than the  assets'  carrying  amount.  If such  assets are
impaired, the impairment to be recognized is measured by the amount by which the
carrying amount of the assets exceeds the fair value of the assets. Assets to be
disposed of are reported at the lower of the carrying value or fair value,  less
costs to sell.

Net loss per share

Basic earnings/loss per share is computed by dividing income available to common
shareholders  (the  numerator) by the  weighted-average  number of common shares
(the denominator) for the period.  The computation of diluted earnings per share
is similar to basic earnings per share, except that the denominator is increased
to  include  the  number  of  additional  common  shares  that  would  have been
outstanding if potentially dilutive common shares had been issued.

At December 31, 2003,  there was no variance  between basic and diluted loss per
share as all potentially  dilutive common shares outstanding  (including 175,000
common stock options) were anti-dilutive.

                                       43
<PAGE>

NOTE 1: NATURE OF ORGANIZATION AND SUMMARY OF SIGNIFICANT  ACCOUNTING POLICIES -
        continued

Income taxes

Income taxes are provided  for the tax effects of  transactions  reported in the
financial  statements  and consist of taxes  currently due plus  deferred  taxes
related  primarily to  differences  between the recorded  book basis and the tax
basis of assets and  liabilities  for  financial and income tax  reporting.  The
deferred tax assets and liabilities represent the future tax return consequences
of those differences, which will either be taxable or deductible when the assets
and liabilities are recovered or settled. Deferred taxes are also recognized for
operating  losses that are  available to offset  future  taxable  income and tax
credits that are available to offset future federal income taxes.

Revenue recognition

Service  revenue is  recognized  after  services are provided and  collection is
probable.  Expenses are recognized  when incurred.  The Company did not make any
sales of software  products  during the periods  presented  in the  accompanying
financial statements.

Fair value of financial instruments

The carrying  amounts of cash,  accounts  payable and other accrued  liabilities
approximate fair value due to the short-term maturity of the instruments.

Stock-based compensation

The Company  accounts for  stock-based  employee  compensation  arrangements  in
accordance with Accounting  Principles Board ("APB") Opinion 25, "Accounting for
Stock Issued to Employees" and complies with the  disclosure  provisions of SFAS
No.  123,   "Accounting  for  Stock-Based   Compensation."  Under  APB  No.  25,
compensation  expense is based on the difference,  if any, on the date of grant,
between  the fair  value of the  Company's  stock and the  exercise  price.  The
Company  accounts  for stock  issued to  non-employees  in  accordance  with the
provisions  of SFAS No. 123.  SFAS 123  requires  the fair value based method of
accounting for stock issued to non-employees in exchange for services.

Companies  that  elect to use the  method  provided  in APB 25 are  required  to
disclose pro forma net income and pro forma earnings per share  information that
would have resulted from the use of the fair value based method. The Company has
elected to  continue to apply the  provisions  of APB Opinion No. 25 and provide
the pro forma disclosure provisions of SFAS No. 123.

New accounting pronouncements

Consolidation of Variable Interest Entities

In January 2003,  the  Financial  Accounting  Standards  Board  ("FASB")  issued
Interpretation  No.  46,  "Consolidation  of  Variable  Interest  Entities",  an
interpretation of Accounting Research Bulletin No. 51,  "Consolidated  financial
statements". Interpretation 46 establishes accounting guidance for consolidation
of variable  interest  entities that  function to support the  activities of the
primary beneficiary.  Interpretation 46 applies to any business enterprise, both
public and private, that has a controlling interest, contractual relationship or
other  business  relationship  with a  variable  interest  entity.  The  Company
believes we have no investment in or contractual  relationship or other business
relationship  with a variable interest entity and therefore the adoption did not
have any impact on our financial position or results of operations.  However, if


                                       44
<PAGE>

NOTE 1: NATURE OF ORGANIZATION AND SUMMARY OF SIGNIFICANT  ACCOUNTING POLICIES -
        continued

the Company enters into any such arrangement with a variable  interest entity in
the future,  our financial  position or results of  operations  may be adversely
impacted.

Amendment of Statement 133 on Derivative Instruments and Hedging Activities

On April 30, 2003,  the FASB issued  Statement No. 149,  "Amendment of Statement
133 on Derivative Instruments and Hedging Activities". Statement 149 is intended
to result in more  consistent  reporting  of  contracts  as either  freestanding
derivative  instruments  subject to Statement 133 in its entirety,  or as hybrid
instruments  with debt host  contracts  and  embedded  derivative  features.  In
addition,  Statement 149  clarifies the  definition of a derivative by providing
guidance  on the  meaning of initial  net  investments  related to  derivatives.
Statement 149 is effective for contracts entered into or modified after June 30,
2003.  The  Company has adopted  Statement  149,  but it did not have a material
effect on its financial position, results of operations or cash flows.

Financial Instruments with Characteristics of Both Liabilities and Equity

On May 15, 2003,  the FASB issued  Statement  No. 150,  "Accounting  for Certain
Financial  Instruments  with  Characteristics  of both  Liabilities and Equity".
Statement 150 establishes standards for classifying and measuring as liabilities
certain  financial  instruments  that embody  obligations of the issuer and have
characteristics  of both  liabilities  and equity.  Statement  150  represents a
significant  change in  practice  in the  accounting  for a number of  financial
instruments,  including  mandatorily  redeemable equity  instruments and certain
equity  derivatives that frequently are used in connection with share repurchase
programs. The Company currently does not use such instruments.  Statement 150 is
effective for all financial  instruments created or modified after May 31, 2003,
and to other  instruments  as of  September  1, 2003.  The  Company  has adopted
Statement  150 and does not believe the effect of adopting this  statement  will
have a material impact on its financial position,  results of operations or cash
flows.

NOTE 2: RELATED PARTY TRANSACTIONS

Indebtedness to related parties

As of December 31, 2003,  the Company owed five  shareholders a total of $81,674
for accrued salaries,  accrued rent, and expenses paid on behalf of the Company.
These  liabilities are  non-interest  bearing and are due on demand.  Management
plans to settle these liabilities with cash or stock. The $81,674 is included in
the accompanying financial statements as "Indebtedness to related parties".

As part of its merger with EIDT (see Note 7), the Company  acquired  $206,275 in
advances  owed  to  two   shareholders  of  the  Company.   These  advances  are
non-interest  bearing and are due on demand.  Management  plans to settle  these
liabilities  with cash or stock.  The  $206,275 is included in the  accompanying
financial statements as "Indebtedness to related parties".

Commencing  January 1, 2002, the Company began accruing its  president's  salary
due to a lack of working  capital.  During the year ended December 31, 2002, the
president  contributed  half  of the  $150,000  salary,  which  is  recorded  as
additional  paid-in  capital in the  accompanying  financial  statements.  As of
November 23, 2003, the Company owed the president  $209,375 for accrued salaries
and issued a  promissory  note to the  president  as payment for $200,000 of the
accrued  salaries.  The note carries a four percent interest rate and matures on


                                       45
<PAGE>

NOTE 2: RELATED PARTY TRANSACTIONS - continued

March 31, 2006.  Accrued interest on the note totaled $834 at December 31, 2003.
Future maturities of the note are as follows:

      Year ended December 31,
      --------------------------------------
      2004                         $ 100,000
      2005                           100,000
                            ----------------
                                  $  200,000
                            ================


Common stock sale

On January 1, 2002,  the Company sold  6,100,000  shares (10,000 shares prior to
recapitalizations)  of its $.001 par value  common  stock to its  president  for
$100.

NOTE 3: PROPERTY AND EQUIPMENT

Property and equipment consisted of the following at December 31, 2003:

      Computer equipment                    $    82,363
      Furniture and office equipment             18,062
                                        ---------------
                                                100,425
      Less accumulated depreciation             (91,542)
                                        ---------------
                                            $     8,883
                                        ===============


All property and equipment was acquired in the EIDT reverse merger (see Note 7).

NOTE 4:  INCOME TAXES

A reconciliation of the U.S.  statutory federal income tax rate to the effective
rate is as follows:
                                                     November 24,  December 31,
                                                          2003          2002
                                                    ------------- -------------
      U.S. federal statutory graduated rate                34.00%        20.73%
      State income tax rate, net of federal benefit         3.06%         3.67%
      Contributed services                                  0.00%       -10.90%
      Net operating loss for which no tax benefit
        is currently available                            -37.06%       -13.50%
                                                    ------------- -------------
                                       Effective rate       0.00%         0.00%
                                                    ============= =============

At December 31, 2003,  deferred taxes  consisted of a net tax asset of $474,959,
due to operating loss  carryforwards of $1,313,448,  which was fully allowed for
in the valuation allowance of $474,959.  The valuation allowance offsets the net
deferred tax asset for which there is no assurance of recovery. The deferred tax
assets for the years ended December 31, 2003 and 2002 were $452,295 and $22,664,
respectively. The change in the valuation allowance for the years ended December
31, 2003 and 2002 were also  $452,295 and $22,664,  respectively.  Net operating
loss carryforwards will expire through 2023.

                                       46
<PAGE>

NOTE 4:  INCOME TAXES - continued

The valuation  allowance will be evaluated at the end of each year,  considering
positive and negative evidence about whether the asset will be realized. At that
time, the allowance will either be increased or reduced;  reduction could result
in the complete elimination of the allowance if positive evidence indicates that
the value of the deferred tax asset is no longer  impaired and the  allowance is
no longer required.

Should the Company undergo an ownership  change as defined in Section 382 of the
Internal  Revenue  Code,  the Company's  tax net  operating  loss  carryforwards
generated prior to the ownership change will be subject to an annual limitation,
which could reduce or defer the utilization of these losses.

NOTE 5: CONVERTIBLE NOTES PAYABLE

As part of its merger with EIDT (see Note 7), the Company  acquired  $140,000 in
convertible  promissory  notes that were  originally  issued during  October and
November 2003. The notes carry a 10 percent interest rate and mature on November
10, 2004.  The debt holders could not convert the notes as of December 31, 2003.
However, the notes may be converted into the Company's common stock, at the debt
holder's  discretion,  upon  the  closing  of the  Company's  private  placement
offering. The debt holders are entitled to convert the outstanding principal and
any  accrued  interest  at the  rate  of 80  percent  of  the  per  share  price
established in the Company's planned private placement offering.  The conversion
is  contingent  on the Company's  successful  completion of a private  placement
offering  of its  common  stock,  as the  conversion  price per share  cannot be
calculated until the private  placement  offering price per share is determined.
On the  maturity  date of the  notes,  the  Company  has the right and option to
automatically  convert the unpaid  principal  balance and accrued  interest then
outstanding  into the number of common shares resulting from dividing all of the
unpaid  principal  and accrued  interest by an amount equal to 80 percent of the
established per unit price of the Company's planned private placement  offering.
Accrued interest payable on the notes totaled $1,568 at December 31, 2003.

NOTE 6: STOCKHOLDERS' EQUITY

On November 25, 2003, the Company granted  1,000,000  compensatory  common stock
options to its  employees  and  contractors  as payment for 2003  services.  The
1,000,000  options had an  exercise  price of $.0001 per share and vested on the
grant date.  Due to the nominal  exercise  price the  options  were  immediately
exercised and, for accounting purposes, the transaction has been recorded as the
issuance of  1,000,000  shares of the  Company's  common  stock in exchange  for
services.  The shares  issued in the  transaction  were valued based on the fair
market value of the Company's common stock on the transaction  date, or $.48 per
share  (following the December 19, 2003 merger with  Electronic  Identification,
Inc. - see Note 7).  Stock-based  compensation  expense  totaling  $480,000  was
recognized in the accompanying financial statements.

As stated in the Summary of Significant Accounting Polices, the Company accounts
for awards of stock-based employee compensation under the intrinsic value method
of Opinion 25. Companies that elect to use the method provided in Opinion 25 are
required  to  disclose  pro forma net  income and pro forma  earnings  per share
information  that  would  have  resulted  from the use of the fair  value  based
method.

                                       47
<PAGE>

NOTE 6: STOCKHOLDERS' EQUITY - continued

                                                          For The Years Ended
                                                              December 31,
                                                    ------------- -------------
                                                          2003           2002
                                                    ------------- -------------
Net loss, as reported                                $ (1,220,577) $   (167,871)
                                                    ============= =============
Stock-based employee compensation, as reported       $    480,000  $          -
                                                    ============= =============
Stock-based employee compensation, fair value        $    480,000  $          -
                                                    ============= =============
Pro forma net loss                                   $ (1,220,577) $   (167,871)
                                                    ============= =============
Basic and diluted net loss per common
   share, as reported                                $      (0.16) $      (0.03)
                                                    ============= =============
Pro forma basic and diluted net loss
   per common share                                  $      (0.16) $      (0.03)
                                                    ============= =============


As discussed  above,  due to the nominal terms of the stock awards,  the options
were recorded at fair market value,  which  resulted in no variance  between the
"as reported" and "pro forma" balances in the above schedule.

The following schedule summarizes the changes in the Company's stock awards:
<TABLE>
<CAPTION>

                                   Awards Outstanding and Exercisable       Weighted Average     Weighted Average
                                 ----------------------------------------------------------------------------------
                                       Number of      Exercise Price          Exercise Price         Remaining
                                         Shares           Per Share              Per Share        Contractual Life
                                 --------------------------------------- ------------------------------------------
<S>                                        <C>               <C>                   <C>                  <C>
Balance at January 1, 2002                  -               $0.00              $         -               N/A
   Options granted                          -               $0.00              $         -               N/A
   Options exercised                        -               $0.00              $         -               N/A
   Options cancelled/expired                -               $0.00              $         -               N/A
                                 ---------------------------------------  -------------------------

Balance at December 31, 2002                -               $0.00              $         -               N/A

   Options and warrants acquired
     in recapitalization              175,000            $.06 to $.10          $      0.07            1.5 years
   Options granted                  1,000,000             $0.0001              $    0.0001               None
   Options exercised               (1,000,000)            $0.0001              $    0.0001               None
   Options cancelled/expired                -               $0.00              $         -               N/A
                                 ------------                               --------------

Balance at December 31, 2003          175,000            $.06 to $.10          $      0.07            1.5 years
                                 ============
</TABLE>

Options and warrants acquired in recapitalization

During the year ended December 31, 2003, EIDT granted  non-employees  options to
purchase  50,000 shares of the  Company's  common stock and warrants to purchase


                                       48
<PAGE>

NOTE 6: STOCKHOLDERS' EQUITY - continued

125,000  shares.  The stock  awards were  granted  for  services  provided.  The
exercise prices range from $.06 (125,000  shares) to $.10 (50,000  shares).  The
options and warrants expire between January 27, 2005 and September 10, 2005. The
fair  value of the  awards  were  determined  in  accordance  with  SFAS 123 and
resulted in stock-based compensation expense of $25,400.

The fair value for the options  granted  during the period was  estimated at the
date of grant using the  Black-Scholes  option-pricing  model with the following
assumptions:

      Risk-free interest rate.                2.00%
      Dividend yield                          0.00%
      Volatility factor                     286.12%
      Weighted average expected life         1 year

NOTE 7: COMMITMENTS

During  December  2003,  the  Company  rented a facility  located in  Kennewick,
Washington  with a shareholder.  The Company was charged base rent of $4,670 for
the month of December. The base rent charge was increased to $5,000 per month in
2004 and expires on December 31, 2004.

On  February  16,  2004,  the Company  began  leasing  office  space in Boulder,
Colorado for its product  development  team. Lease payments increase from $1,660
per month to $3,619 per month through December 31, 2005, when the lease expires.

Future minimum payments due under the lease agreements are as follows:

      December 31,
      ---------------------------------------
      2004                       $     77,115
      2005                       $     43,427


NOTE 8: CONCENTRATION OF CREDIT RISK

During the years ended December 31, 2003 and 2002, the Company had two customers
(one in each year) that made up 100 percent of the Company's sales.

NOTE 9: RESTATEMENT

Following a review of the  Company's  Annual  Report on Form 10-KSB for the year
ended December 31, 2003, the SEC  determined  that the Stock Purchase  Agreement
between MSC and SLX should be reported as a recapitalization of SLX and not as a
business  combination  in  accordance  with  Statement of  Financial  Accounting
Standard ("SFAS") No. 141, "Business Combinations" (as previously reported).

As a result,  the  acquisition  has been accounted for as the sale of 12,200,000
shares  of SLX  common  stock  for  the  net  liabilities  of MSC  based  on the
historical  book value,  as opposed to the fair value method required under SFAS
141. The impact of the change resulted in the  reclassification  of the balances
in the Company's  shareholders' deficit accounts and a reduction in the net loss
recognized for the year ended December 31, 2003.

The  following  sets forth the  effects  of the  restatements  discussed  above.
Amounts reflected as "As Previously  Reported"  represent those amounts included
in the Company's  Annual Report on Form 10-KSB/A  (Amendment No. 1) for the year
ended December 31, 2003.

                                       49
<PAGE>


                         ELECTRONIC IDENTIFICATION, INC
                               December 30, 2003

                         INDEPENDENT AUDITORS' REPORT

To the Board of Directors and Shareholders
Electronic Identification, Inc.:


We have  audited  the balance  sheet of  Electronic  Identification,  Inc. as of
December  30,  2003,  and the  related  statements  of  operations,  changes  in
shareholder's  equity,  and cash  flows,  for the  period  from  January 1, 2003
through December 30, 2003. These financial  statements are the responsibility of
the Company's  management.  Our responsibility is to express an opinion on these
financial  statements based on our audit. The financial statements of Electronic
Identification,  Inc. as of December  31, 2002,  were audited by other  auditors
whose  report  dated May 23, 2003,  expressed  an  unqualified  opinion on those
statements.

We conducted  our audit in accordance  with the standards of the Public  Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement.  An audit includes examining, on a
test basis,  evidence  supporting  the amounts and  disclosures in the financial
statements.  An audit also includes assessing the accounting principles used and
significant  estimates  made by  management,  as well as evaluating  the overall
financial  statement  presentation.   We  believe  that  our  audit  provides  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 Electronic Identification, Inc.
as of December 30, 2003,  and the results of its  operations  and its cash flows
for the period from January 1, 2003 through December 30, 2003 in conformity with
accounting principles generally accepted in the United States of America.




Cordovano and Honeck, P.C.
Denver, Colorado
March 26, 2004


                                       50
<PAGE>



                        ELECTRONIC IDENTIFICATION, INC.
                                 Balance Sheet

                                December 30, 2003

                                     Assets
Current assets:
 Cash.                                                             $     4,797
                                                                   -----------
                          Total current assets                           4,797

Property and equipment, net of accumulated depreciation
   of $91,542 (Note 3)                                                   8,883
                                                                   -----------
                                                                   $    13,680
                                                                   ===========

                      Liabilities and Shareholders' Deficit

Current liabilities:
   Accounts payable                                                     36,036
   Indebtedness to related parties (Note 2)                            209,913
   Notes payable, convertible (Note 5)                                 140,000
   Accrued interest on convertible notes (Note 5)                        1,568
   Other accrued liabilities                                            27,378
                                                                   -----------
                          Total current liabilities                    414,895
                                                                   -----------

Shareholders' deficit (Note 6):
  Preferred stock, $.001 par value; 25,000,000 shares authorized,
          -0- shares issued and outstanding                                 --
  Common stock, $.001 par value; 200,000,000 shares authorized,
          8,553,783 shares issued and outstanding.                       8,554
  Additional paid-in capital.                                       15,563,027
  Outstanding stock awards - 175,000                                    25,400
  Retained deficit                                                 (15,998,196)
                                                                   -----------
                          Total shareholders' deficit                 (401,215)
                                                                   -----------

                                                                   $    13,680
                                                                   ===========

                 See accompanying notes to financial statements

                                       51
<PAGE>


                        ELECTRONIC IDENTIFICATION, INC.
                           Statement of Operations



                                                  January 1, 2003
                                                     Through       Year Ended
                                                   December 30,    December 31,
                                                      2003           2002
                                                  --------------- -------------
Operating expenses:
  Stock-based compensation (Note 6):
     Consulting services                             $      3,000   $   249,000
     Common stock options                                  25,400            --
  General and administrative                              319,441        67,612
  Sales and marketing                                          --       144,830
  Depreciation and amortization                            13,963        14,540
  Gain on debt settlements                               (518,327)           --
                                                  --------------- -------------

            Total operating expenses                     (156,523)      475,982
                                                  --------------- -------------
            Income (loss) from operations.                156,523      (475,982)

Interest expense (Note 5)                                  (1,568)           --
                                                  --------------- -------------
            Income (loss) before income taxes             154,955      (475,982)

Income tax provision (Note 4)                                  --            --
                                                  --------------- -------------

            Net income (loss)                        $    154,955   $  (475,982)
                                                  =============== =============

Basic and diluted income (loss) per share            $       0.04   $     (0.14)
                                                 ================ =============

Weighted average common shares outstanding              4,086,991     3,478,353
                                                  =============== =============

                 See accompanying notes to financial statements

                                       52
<PAGE>


                         ELECTRONIC IDENTIFICATION, INC.
                  Statement of Changes in Shareholder's Deficit

<TABLE>
<CAPTION>

                                                                                                Out-
                                         Preferred Stock       Common Stock       Additional  standing
                                       --------------------- -------------------    Paid-in    Stock      Retained
                                        Shares    Par Value   Shares   Par Value  Capital      Awards      Deficit       Total
                                       ---------- --------- --------- ---------- ------------ --------- -------------- -----------
<S>                                          <C>     <C>      <C>        <C>       <C>           <C>      <C>              <C>
Balance, January 1, 2002                       --  $     -- 3,090,908  $   3,091 $ 14,991,911  $     -- $  (15,677,171)  $(682,169)

Common stock issued on the settlement
   of subscriptions received for common
   stock (Note 6)                              --        --    96,375         96          (96)       --             --          --
Common stock issued in exchange
   for services (Note 6)                       --        --   311,250         311     248,689        --             --     249,000
Common stock issued in exchange
   for debt (Note 6)                           --        --    43,750         44       34,956        --             --      35,000
Sale of convertible preferred stock
   (Note 6)                             4,000,000     4,000        --         --       36,000        --             --      40,000
Net loss                                       --        --        --         --           --        --       (475,980)   (475,980)
                                       ---------- --------- --------- ---------- ------------ --------- -------------- -----------

Balance, December 31, 2002              4,000,000     4,000 3,542,283      3,542   15,311,460        --    (16,153,151)   (834,149)

Sale of convertible preferred stock
   (Note 6)                             1,000,000     1,000        --         --        9,000        --             --      10,000
Common stock issued in exchange
   for services (Note 6)                       --        --    50,000         50        2,950        --             --       3,000
Common stock options granted (Note 6)          --        --        --         --           --    25,400             --      25,400
Debt settlement with related party
   (Note 2)                                    --        --        --         --      147,849        --             --     147,849
Sale of common stock (Note 6)                  --        --   125,000        125        4,875        --             --       5,000
Conversion of preferred stock to
   common stock (Note 6).              (5,000,000)   (5,000)  500,000        500        4,500        --             --          --
Common stock issued in exchange
   for debt (Note 6)                           --        -- 4,336,500      4,337       82,393        --             --      86,730
Net income                                     --        --        --         --           --        --        154,955     154,955
                                       ---------- --------- --------- ---------- ------------ --------- -------------- -----------

Balance, December 30, 2003                     --  $     -- 8,553,783  $   8,554 $ 15,563,027  $ 25,400 $ (15,998,196)   $(401,215)
                                       ========== ========== ======== ========== ============ ========== ============= ===========
</TABLE>

                  See accompanying notes to financial statements

                                       53
<PAGE>

                        ELECTRONIC IDENTIFICATION, INC.
                            Statement of Cash Flows


<TABLE>
<CAPTION>
                                                     January 1, 2003
                                                         Through        Year ended
                                                       December 30,    December 31,
                                                          2003            2002
                                                     --------------- ---------------
<S>                                                        <C>               <C>
Cash flows from operating activities:
 Net income (loss)                                       $   154,955  $     (475,980)
 Adjustments to reconcile net income (loss) to
     net cash used in operating activities:
       Depreciation and amortization                          13,963          14,540
       Gain on debt settlements                             (518,327)             --
       Common stock issued as payment for expenses             3,000         249,000
       Common stock options granted                           25,400              --
       Changes in operating assets and liabilities:
          Accounts receivable                                    418           3,248
          Accounts payable                                   (64,879)         50,386
          Indebtedness to related parties                    206,275         120,589
          Other accrued liabilities                           28,946              --
                                                     --------------- ---------------
                Net cash used in
                      operating activities                  (150,249)        (38,217)
                                                     --------------- ---------------

Cash flows from financing activities:
  Proceeds from sale of preferred stock (Note 6)              10,000          40,000
  Proceeds from sale of common stock (Note 6)                  5,000              --
  Proceeds from issuance of convertible debt (Note 5)        140,000              --
  Repayment of short-term debt                                    --          (1,849)
                                                     --------------- ---------------
                Net cash provided by
                        financing activities                 155,000          38,151
                                                     --------------- ---------------

                Net change in cash                             4,751             (66)

Cash, beginning of period                                         46             112
                                                     --------------- ---------------

Cash, end of period                                      $     4,797  $           46
                                                     =============== ===============

Supplemental disclosure of cash flow information:
  Income taxes                                           $        --  $           --
                                                     =============== ===============
  Interest                                               $        --  $           --
                                                     =============== ===============

   Non-cash investing and financing transactions:
      Common stock issued in debt conversion (Note 6)    $    86,730  $       35,000
                                                     =============== ===============
</TABLE>
                 See accompanying notes to financial statements

                                       54
<PAGE>

                         ELECTRONIC IDENTIFICATION, INC.
                          Notes to Financial Statements


NOTE 1:  NATURE OF ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Organization

Electronic Identification, Inc. (the "Company" or "EIDT") was incorporated under
the laws of Nevada on May 14, 1992.  Effective  December  31, 2003,  the Company
acquired Manakoa Services Corporation  ("Manakoa") through a reverse merger (see
Note 7).

The Company's  principal  business  activities  have been  directed  towards the
development   and   marketing   of   electronic   identification   issuing   and
authentication  systems  to  identify  people  in  secure,  convenient  and cost
effective ways.

Summary of Significant Accounting Policies

Use of estimates

The  preparation of the  consolidated  financial  statements in conformity  with
accounting  principles  generally  accepted  in the  United  States  of  America
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  consolidated  financial  statements  and  the
reported  amounts of revenues and expenses during the reporting  period.  Actual
results could differ from those estimates.

Cash equivalents

For the  purposes of the  statement  of cash flows,  the Company  considers  all
highly  liquid debt  instruments  purchased  with an original  maturity of three
months or less to be cash  equivalents.  The Company had no cash  equivalents at
December 30, 2003.

Property, equipment and depreciation

Property  and  equipment  are  stated  at cost and are  depreciated  over  their
estimated useful lives, estimated at 5 years, using the straight-line method.

Upon   retirement  or  disposition  of  equipment,   the  cost  and  accumulated
depreciation  are removed from the accounts  and any  resulting  gain or loss is
reflected  in  operations.  Repairs  and  maintenance  are charged to expense as
incurred and expenditures for additions and improvements are capitalized.

Impairment of Long-Lived Assets

The Company  evaluates  the carrying  value of its  long-lived  assets under the
provisions  of SFAS No.  144,  "Accounting  for the  Impairment  or  Disposal of
Long-Lived Assets".  Statement No. 144 requires impairment losses to be recorded
on long-lived  assets used in  operations  when  indicators  of  impairment  are
present and the  undiscounted  future cash flows  estimated  to be  generated by
those  assets are less than the  assets'  carrying  amount.  If such  assets are
impaired, the impairment to be recognized is measured by the amount by which the
carrying amount of the assets exceeds the fair value of the assets. Assets to be
disposed of are reported at the lower of the carrying value or fair value,  less
costs to sell.

Net income/loss per share

Basic earnings/loss per share is computed by dividing income available to common
shareholders  (the  numerator) by the  weighted-average  number of common shares

                                       55
<PAGE>


NOTE 1: NATURE OF ORGANIZATION AND SUMMARY OF SIGNIFICANT  ACCOUNTING POLICIES -
        continued

(the denominator) for the period.  The computation of diluted earnings per share
is similar to basic earnings per share, except that the denominator is increased
to  include  the  number  of  additional  common  shares  that  would  have been
outstanding if potentially dilutive common shares had been issued.

At December 31, 2003,  there was no variance  between basic and diluted loss per
share as all potentially  dilutive common shares outstanding  (including 175,000
common stock options) were anti-dilutive.

Income taxes

Income taxes are provided  for the tax effects of  transactions  reported in the
consolidated  financial  statements  and  consist  of taxes  currently  due plus
deferred taxes related primarily to differences  between the recorded book basis
and the tax basis of  assets  and  liabilities  for  financial  and  income  tax
reporting.  The deferred  tax assets and  liabilities  represent  the future tax
return  consequences  of those  differences,  which  will  either be  taxable or
deductible when the assets and  liabilities  are recovered or settled.  Deferred
taxes are also  recognized  for  operating  losses that are  available to offset
future  taxable  income and tax  credits  that are  available  to offset  future
federal income taxes.

Fair value of financial instruments

The carrying  amounts of cash,  accounts  payable and other accrued  liabilities
approximate fair value due to the short-term maturity of the instruments.

Stock-based compensation

The Company  accounts for  stock-based  employee  compensation  arrangements  in
accordance with Accounting  Principles Board ("APB") Opinion 25, "Accounting for
Stock Issued to Employees" and complies with the  disclosure  provisions of SFAS
No.  123,   "Accounting  for  Stock-Based   Compensation."  Under  APB  No.  25,
compensation  expense is based on the difference,  if any, on the date of grant,
between  the fair  value of the  Company's  stock and the  exercise  price.  The
Company  accounts  for stock  issued to  non-employees  in  accordance  with the
provisions  of SFAS No. 123.  SFAS 123  requires  the fair value based method of
accounting for stock issued to non-employees in exchange for services.

Companies  that  elect to use the  method  provided  in APB 25 are  required  to
disclose pro forma net income and pro forma earnings per share  information that
would have resulted from the use of the fair value based method. The Company has
elected to  continue to apply the  provisions  of APB Opinion No. 25 and provide
the pro forma disclosure  provisions of SFAS No. 123. The Company did not report
pro forma disclosures in the accompanying  consolidated  financial statements as
the Company did not grant any employee stock options as of December 30, 2003.

New accounting pronouncements

Consolidation of Variable Interest Entities

In January 2003,  the  Financial  Accounting  Standards  Board  ("FASB")  issued
Interpretation  No.  46,  "Consolidation  of  Variable  Interest  Entities",  an
interpretation of Accounting Research Bulletin No. 51,  "Consolidated  financial
statements". Interpretation 46 establishes accounting guidance for consolidation
of variable  interest  entities that  function to support the  activities of the
primary beneficiary.  Interpretation 46 applies to any business enterprise, both

                                       56
<PAGE>


NOTE 1: NATURE OF ORGANIZATION AND SUMMARY OF SIGNIFICANT  ACCOUNTING POLICIES -
        continued

public and private, that has a controlling interest, contractual relationship or
other  business  relationship  with a  variable  interest  entity.  The  Company
believes we have no investment in or contractual  relationship or other business
relationship  with a variable interest entity and therefore the adoption did not
have any impact on our financial position or results of operations.  However, if
the Company enters into any such arrangement with a variable  interest entity in
the future,  our financial  position or results of  operations  may be adversely
impacted.

Amendment of Statement 133 on Derivative Instruments and Hedging Activities

On April 30, 2003,  the FASB issued  Statement No. 149,  "Amendment of Statement
133 on Derivative Instruments and Hedging Activities". Statement 149 is intended
to result in more  consistent  reporting  of  contracts  as either  freestanding
derivative  instruments  subject to Statement 133 in its entirety,  or as hybrid
instruments  with debt host  contracts  and  embedded  derivative  features.  In
addition,  Statement 149  clarifies the  definition of a derivative by providing
guidance  on the  meaning of initial  net  investments  related to  derivatives.
Statement 149 is effective for contracts entered into or modified after June 30,
2003.  The  Company has adopted  Statement  149,  but it did not have a material
effect on its financial position, results of operations or cash flows.

Financial Instruments with Characteristics of Both Liabilities and Equity

On May 15, 2003,  the FASB issued  Statement  No. 150,  "Accounting  for Certain
Financial  Instruments  with  Characteristics  of both  Liabilities and Equity".
Statement 150 establishes standards for classifying and measuring as liabilities
certain  financial  instruments  that embody  obligations of the issuer and have
characteristics  of both  liabilities  and equity.  Statement  150  represents a
significant  change in  practice  in the  accounting  for a number of  financial
instruments,  including  mandatorily  redeemable equity  instruments and certain
equity  derivatives that frequently are used in connection with share repurchase
programs. The Company currently does not use such instruments.  Statement 150 is
effective for all financial  instruments created or modified after May 31, 2003,
and to other  instruments  as of  September  1, 2003.  The  Company  has adopted
Statement  150 and does not believe the effect of adopting this  statement  will
have a material impact on its financial position,  results of operations or cash
flows.

NOTE 2:  RELATED PARTY TRANSACTIONS

As of December 30, 2003, the Company owed three shareholders a total of $209,913
for  advances  and  expenses  paid on behalf of the  Company.  The  $209,913  is
included in the accompanying  consolidated financial statements as "Indebtedness
to related parties".

During the period ended  December 30, 2003,  the Company  settled debts with its
shareholders and directors,  which resulted in a gain of $147,849.  The gain has
been recorded as an increase to additional  paid-in capital as the  transactions
occurred with related parties.

                                       57
<PAGE>

NOTE 3:  PROPERTY AND EQUIPMENT

Property and equipment consisted of the following at December 30, 2003:


Computer equipment                                   $   82,363
Furniture and office equipment                           18,062
                                                  -------------
                                                        100,425
Less accumulated depreciation                           (91,542)
                                                  -------------
                                                     $    8,883
                                                  =============


Depreciation  expense  totaled $12,001 and $12,056 for the period ended December
30, 2003 and the year ended December 31, 2002, respectively.

NOTE 4:  INCOME TAXES

A reconciliation of the U.S.  statutory federal income tax rate to the effective
rate is as follows:

                                                   December 30,
                                                       2003
                                                  -------------
U.S. federal statutory graduated rate                    28.19%
State income tax rate, net of federal benefit             0.00%
Net operating loss for which no tax benefit
  is currently available                                -28.19%
                                                  -------------
                           Effective rate                 0.00%
                                                  =============


As of December 30, 2003, all taxable income recognized by the Company was offset
against prior year net operating loss carryforwards.  In addition,  all deferred
tax assets have been fully allowed for in the valuation allowance.

The  valuation  allowance  is  evaluated  at the end of each  year,  considering
positive  and  negative  evidence  about  whether the deferred tax asset will be
realized.  At that time,  the  allowance  will either be  increased  or reduced;
reduction could result in the complete  elimination of the allowance if positive
evidence  indicates  that  the  value of the  deferred  tax  asset is no  longer
impaired and the allowance is no longer required.

NOTE 5: CONVERTIBLE NOTES PAYABLE

During  October and November 2003,  the Company  issued  convertible  promissory
notes in exchange for $140,000. The notes carry a 10 percent interest and mature
on November  10,  2004.  The notes may be converted  into the  Company's  common
stock,  at the debt  holder's  discretion,  at the rate of 80 percent of the per
unit price  established  in the Company's  private stock  offering,  planned for
2004. Interest expense on the notes totaled $1,568 at December 30, 2003.

                                       58
<PAGE>

NOTE 6:  STOCKHOLDERS' EQUITY

Preferred stock

The Board of Directors of the Company authorized the classification and issuance
of 5,000,000  shares of the Company's  Preferred  Stock as "Series A Convertible
Preferred  Stock",  representing  all of the authorized  shares of the Company's
Preferred Stock. The Series A Convertible Preferred Stock are voting, redeemable
at the Company's  option,  8%  non-cumulative  and have a $0.001 par value.  Ten
shares of Series A Convertible Preferred Stock are convertible into one share of
common stock at the option of the holder.  The purchase  price of the  preferred
stock is $0.01 per share.

On October 25, 2002, November 7, 2002 and December 6, 2002, the Company received
subscription   agreements  from  Advanced  Biometrics,   Inc.  ("ABI")  for  the
acquisition  of 4,000,000  shares of Series A  Convertible  Preferred  Stock for
total proceeds of $40,000.

On January 29, 2003, the Company received a subscription  agreement from ABI for
the acquisition of 1,000,000 shares of Series A Convertible  Preferred Stock for
total proceeds of $10,000.

During December 2003, all 5,000,000 shares of the Series A Convertible Preferred
Stock were converted into 500,000 shares of the Company's common stock.

Common stock

Reverse stock split

On March 20, 2002, the Company  completed a reverse split of its common stock on
an 8 for 1 basis,  such that  every  eight  shares of common  stock  issued  and
outstanding  immediately  prior  to the  reverse  split  was  changed  into  and
constitute  one share of fully paid common stock of the  Company.  Additionally,
all outstanding  options and warrants to acquire Company stock were adjusted and
changed to account for the 8 to 1 reverse  stock split.  All share  amounts have
been retroactively adjusted for all periods presented.

Non-cash common stock issuances

During December 2003, the Company issued 4,336,500 shares of its common stock to
settle debt with a fair value of $86,730.

During September 2003, the Company issued 50,000 shares of its common stock to a
former  director in exchange for  consulting  services.  The market value of the
common  stock  on  the  transaction   date  was  $.06  per  share.   Stock-based
compensation expense of $3,000 has been recognized in the accompanying financial
statements for the period ended December 30, 2003.

During  March 2002,  the Company  issued  311,250  shares of its common stock in
exchange for consulting services. The transaction was recorded based on the fair
value of the services provided. Stock-based compensation expense of $249,000 has
been  recognized in the  accompanying  financial  statements  for the year ended
December 31, 2002.

During  January  2002,  the Company  issued 43,750 shares of its common stock to
settle debt with a fair value of $35,000.

During  January  2002,  the Company  issued 96,375 shares of its common stock to
settle common stock subscriptions.

                                       59
<PAGE>

NOTE 6:  STOCKHOLDERS' EQUITY - continued

Common stock sales

During  January  2003,  the Company sold 125,000  shares of its common stock for
total proceeds of $5,000, or $.04 per share.

Common stock awards

The following schedule summarizes the changes in the Company's stock awards:

<TABLE>
<CAPTION>

                                Awards Outstanding and Exercisable  Weighted Average
                                ----------------------------------
                                     Number of      Exercise Price   Exercise Price
                                       Shares          Per Share        Per Share
                                --------------- ------------------ ------------------
<S>                                    <C>               <C>               <C>
Balance at January 1, 2002            1,078,125    $.80 to $3.60     $           1.81
   Options granted                            -        $0.00         $              -
   Options exercised                          -        $0.00         $              -
   Options cancelled/expired           (390,625)       $3.60         $           3.60
                                ---------------                    ------------------


Balance at December 31, 2002            687,500        $0.80         $           0.80
   Options and warrants granted         175,000     $.06 to $.10     $           0.07
   Options exercised                          -        $0.00         $              -
   Options cancelled/expired.          (687,500)       $0.80         $           0.80
                                ---------------                    ------------------


Balance at December 30, 2003.           175,000     $.06 to $.10     $           0.07
                                ===============
</TABLE>

During the period ended  December 30, 2003,  the Company  granted  non-employees
options to purchase 50,000 shares of the Company's  common stock and warrants to
purchase 125,000 shares.  The stock awards were granted for services provided to
the  Company.  The  exercise  prices  range from $.06  (125,000  shares) to $.10
(50,000  shares).  The options and warrants  expire between January 27, 2005 and
September  10,  2005.  The  Company  determined  the fair value of the awards in
accordance  with  SFAS 123 and  recorded  stock-based  compensation  expense  of
$25,400 in the accompanying financial statements.

No options or warrants were granted to employees in 2003 or 2002; therefore, the
Company did not have any related compensation expense during these periods. As a
result, the Company had no difference in net loss and loss per share as reported
and pro forma amounts as required by SFAS 123.

The fair value for the options  granted  during the period was  estimated at the
date of grant using the  Black-Scholes  option-pricing  model with the following
assumptions:

        Risk-free interest rate                        2.00%
        Dividend yield                                 0.00%
        Volatility factor                            286.12%
        Weighted average expected life                1 year

                                       45
<PAGE>

NOTE 6:  STOCKHOLDERS' EQUITY - continued

The  Black-Scholes  options  valuation model was developed for use in estimating
the fair value of traded  options,  which have no vesting  restrictions  and are
fully  transferable.  In addition,  option valuation models require the input of
highly  subjective  assumptions  including the expected stock price  volatility.
Because the Company's stock options have characteristics significantly different
from  those of traded  options,  and  because  changes in the  subjective  input
assumptions  can  materially  affect the fair value  estimate,  in  management's
opinion,  the  existing  models do not  necessarily  provide a  reliable  single
measure of the fair value of its stock options.

NOTE 7:  STOCK PURCHASE AGREEMENT

On  December  19,  2003,  EIDT  entered  into a Stock  Purchase  Agreement  (the
"Agreement")  with  Manakoa  Services  Corporation.  ("Manakoa"),  a  Washington
corporation. Under the terms of the Agreement, EIDT agreed to acquire all of the
issued and outstanding common stock of Manakoa in exchange for 19,300,000 shares
of EIDT's common stock.  The acquisition has been treated as a  recapitalization
of Manakoa,  with EIDT the legal surviving entity. Since EIDT had minimal assets
and no operations,  the  recapitalization  has been accounted for as the sale of
8,553,783  shares of Manakoa common stock for the net liabilities of EIDT. Costs
of the transaction have been charged to the period.  The  recapitalization  took
place on December 18, 2003; however, the financial statements have been prepared
as if the recapitalization took place on December 31, 2003.

                                       60
<PAGE>