EI2, INC.
A Delaware Corporation
BY LAWS
ARTICLE I
Principal Executive Office
The principal executive office of Cuisine Cornucopia, Inc. (the
"Corporation") shall be at
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 . The Corporation may also have offices at such other places
within or without the State of
[needs to be filled in]. as the board of directors shall from
time to time determine.
ARTICLE II
Stockholders
SECTION 1. Place of Meetings. All annual and special meetings of
the stockholders shall
be held at the principal executive office or at such other place
within or without the State of
Delaware as the board of directors may determine and as
designated in the notice of such meeting.
SECTION 2. Annual Meeting. A meeting of the stockholders for the
election of directors
and for the transaction of any other business shall be held
annually at such date and time as the
board of directors may determine.
SECTION 3. Special Meetings. Special meeting of the stockholders
for any purpose or
purposes may be called at any time by the board of directors, or
by a committee of the board of
directors which as been duly designated by the board of directors
and whose powers and authorities,
as provided in a resolution of the board of directors or in these
bylaws, include the power and
authority to call such meetings but such special meetings may not
be called by any other person or
persons.
SECTION 4. Conduct of Meetings. Annual and special meetings shall
be conducted in
accordance with these bylaws or as otherwise prescribed by the
board of directors. The chairman or
the chief executive officer shall preside at such meetings.
SECTION 5. Notice of Meeting. Written notice stating the place,
day and time of the
meeting and the purpose or purposes for which the meeting is
called shall be mailed by the secretary
or the officer performing his duties, not less than ten days nor
more than fifty days before the
meeting to each stockholder of record entitled to vote at such
meeting. If mailed, such notice shall be
deemed to be delivered when deposited in the United States mail,
addressed to the stockholder at his
address as it appears on the stock transfer books or records as
of the record date prescribed in
Section 6, with postage thereon prepaid. If a stockholder be
present at a meeting, or in writing waive
notice thereof before or after the meeting, notice of the meeting
to such stockholder shall be
unnecessary. When any stockholders' meeting, either annual or
special, is adjourned for thirty days
or more, notice of the adjourned meeting shall be given as in the
case of an original meeting. It shall
not be necessary to give any notice of the time and place of any
meeting adjourned for less than thirty
days or of the business to be transacted at such adjourned
meeting, other than an announcement at
the meeting at which such adjournment is taken.
SECTION 6. Fixing of Record Date. For the purpose of determining
stockholders entitled
to notice of or to vote at any stockholders' meeting, or any
adjournment thereof, or stockholders
entitled to receive payment of any dividend, or in order to make
a determination of stockholders for
any other proper purpose, the board of directors shall fix in
advance a date as the record date for any
such determination of stockholders. Such date in any case shall
be not more than sixty days, and in
case of a stockholders' meeting, not less than ten days prior to
the date on which the particular
action, requiring such determination of stockholders, is to be
taken.
When a determination of stockholders entitled to vote at any
stockholders' meeting has been
made as provided in this section, such determination shall apply
to any adjournment thereof.
SECTION 7. Voting Lists. The officer or agent having charge of
the stock transfer books
for shares shall make, at least ten days before each
stockholders' meeting, a complete record of the
stockholders entitled to vote at such meeting or any adjournment
thereof, with the address of and the
number of shares held by each. The record, for a period of ten
days before such meeting, shall be
kept on file at the principal executive office, whether within or
outside the State of New York, and
shall be subject to inspection by any stockholder for any purpose
germane to the meeting at any time
during usual business hours. Such record shall also be produced
and kept open at the time and place
of the meeting and shall be subject to the inspection of any
stockholder for any purpose germane to
the meeting during the whole time of the meeting. The original
stock transfer books shall be prima
facie evidence as to the stockholders entitled to examine such
record or transfer books or to vote at
any stockholders' meeting.
SECTION 8. Quorum. One-fourth of the outstanding shares entitled
to vote, represented in
person or by proxy, shall constitute a quorum at a stockholders'
meeting. If less than one-fourth of
the outstanding shares are represented at a meeting, a majority
of the shares so represented may
adjourn the meeting from time to time without further notice. At
such adjourned meeting at which a
quorum shall be present or represented, any business may be
transacted which might have been
transacted at the meeting as originally notified. The
stockholders present at a duly organized meeting
may continue to transact business until adjournment,
notwithstanding the withdrawal of enough
stockholders to leave less than a quorum.
SECTION 9. Proxies. At all stockholders' meetings, a stockholder
may vote by proxy
executed in writing by such stockholder or by his duly authorized
attorney in fact. Proxies solicited
on behalf of the management shall be voted as directed by such
stockholder or, in the absence of
such direction, as determined by a majority of the board of
directors. No proxy shall be valid after
eleven months from the date of its execution unless otherwise
provided in the proxy.
SECTION 10. Voting. At each election for directors every
stockholder entitled to vote at
such election shall be entitled to one vote for each share of
stock held. Unless otherwise provided by
the certificate of incorporation, by statute, or by these bylaws,
a majority of votes of the shares
present in person or by proxy at a lawful meeting and entitled to
vote on the election of directors
shall be sufficient to pass on a transaction or matter, except in
the election of directors, which
election shall be determined by a plurality of the votes of the
shares present in person or by proxy at
the meeting and entitled to vote on the election of directors.
SECTION 11. Voting of Shares in the Name of Two or More Persons.
When ownership
of stock stands in the name of two or more persons, in the
absence of written directions to the
Corporation to the contrary, at any stockholders' meeting any one
or more of such stockholders may
cast, in person or by proxy, all votes to which such ownership is
entitled. In the event an attempt is
made to cast conflicting votes, in person or by proxy, by the
several persons in whose name shares of
stock stand, the vote or votes to which these persons are
entitled shall be cast as directed by a
majority of those holding such stock and present in person or by
proxy at such meeting, but no votes
shall be cast for such stock without the direction of such a
majority.
SECTION 12. Voting of Shares by Certain Holders. Shares of
capital stock standing in the
name of another corporation may be voted by any officer, agent or
proxy as these bylaws of such
corporation may prescribe, or, in the absence of such provision,
as the board of directors of such
corporation may determine. Shares held by an administrator,
executor, guardian or conservator may
be voted by him, either in person or by proxy, without a transfer
of such shares into his name. Shares
standing in the name of a trustee may be voted by him, either in
person or by proxy, but no trustee
shall be entitled to vote shares held by him without a transfer
of such shares into his name. Shares
standing in the name of a receiver may be voted by such receiver,
and shares held by or under the
control of a receiver may be voted by such receiver without the
transfer thereof into his name if
authority to do so is contained in an appropriate order of the
court or other public authority by which
such receiver was appointed.
A stockholder whose shares are pledged shall be entitled to vote
such shares at any
stockholders' meeting until such shares have been transferred
into the name of the pledgee and
thereafter such pledgee shall be entitled to vote the shares so
transferred.
Neither treasury shares of its own stock held by the Corporation,
nor shares held by another
corporation, if a majority of the shares entitled to vote for the
election of directors of such other
corporation are held by the Corporation, shall be voted at any
stockholders' meeting or counted in
determining the total number of outstanding shares at any given
time for purposes of any meeting.
SECTION 13. Inspectors of Election. In advance of any
stockholders' meeting, the
chairman of the board or the board of directors may appoint any
persons, other than nominees for
office, as inspectors of election to act at such meeting or any
adjournment thereof. The number of
inspectors shall be either one or three. If the board of
directors appoints either one or three
inspectors, that appointment shall not be altered at the meeting.
If inspectors of election are not so
appointed, the chairman of the board of directors may make an
appointment at the meeting. In case
any person appointed as inspector fails to appear or fails or
refuses to act, the vacancy may be filled
by appointment in advance of the meeting or at the meeting by the
chairman of the board of directors
or the president of the Corporation.
Unless otherwise prescribed by applicable law, the duties of such
inspectors shall include:
determining the number of shares of stock and the voting power of
each share, the shares of stock
represented at the meeting, the existence of a quorum, the
authenticity, validity and effect of
proxies; receiving votes, ballots or consents; hearing and
determining all challenges and questions in
any way arising in connection with the right to vote; counting
and tabulating all votes or consents;
determining the result; and such acts as may be proper to conduct
the election or vote with fairness
to all stockholders.
SECTION 14. Nominating Committee. The board of directors or a
committee appointed
by the board of directors shall act as nominating committee for
selecting the management nominees
for election as directors. Except in the case of a nominee
substituted as a result of the death or other
incapacity of a management nominee, the nominating committee
shall deliver written nominations to
the secretary at least twenty days prior to the date of the
annual meeting. Provided such committee
makes such nominations, no nominations for directors except those
made by the nominating
committee shall be voted upon at the annual meeting unless other
nominations by stockholders are
made in writing and delivered to the secretary in accordance with
the provisions of the
Corporation's certificate of incorporation.
SECTION 15. New Business. Any new business to be taken up at the
annual meeting shall
be stated in writing and filed with the secretary in accordance
with the provisions of the
Corporation's certificate of incorporation. This provision shall
not prevent the consideration and
approval or disapproval at the annual meeting of reports of
officers, directors and committees, but in
connection with such reports no new business shall be acted upon
at such annual meeting unless
stated and filed as provided in the Corporation's certificate of
incorporation.
ARTICLE III
Board of Directors
SECTION 1. General Powers. The business and affairs of the
Corporation shall be under
the direction of the board of directors. The chairman shall
preside at all meetings of the board of
directors.
SECTION 2. Number, Term and Election. The number of directors
shall be such number,
not less than three nor more than 15 (exclusive of directors, if
any, to be elected by holders of
preferred stock), as shall be provided from time to time in a
resolution adopted by the board of
directors, provided that no decrease in the number of directors
shall have the effect of shortening the
term of any incumbent director, and provided further that no
action shall be taken to decrease or
increase the number of directors from time to time unless at
least two-thirds of the directors then in
office shall concur in said action. Exclusive of directors, if
any, elected by holders of preferred stock,
vacancies in the board of directors, however caused, and newly
created directorships shall be filled
by a vote of two-thirds of the directors then in office, whether
or not a quorum, and any director so
chosen shall hold office for a term expiring at the annual
stockholders' meeting at which the term of
the class to which the director has been chosen expires and when
the director's successor is elected
and qualified. The board of directors shall be classified in
accordance with the provisions of Section
3 of this Article III.
SECTION 3. Classified Board. The board of directors (other than
directors which may be
elected by the holders of preferred stock), shall be divided into
three classes of directors which shall
be designated Class I, Class II and Class III. The members of
each class shall be elected for a term
of three years and until their successors are elected and
qualified. Such classes shall be as nearly
equal in number as the then total number of directors
constituting the entire board of directors shall
permit, exclusive of directors, if any, elected by holders of
preferred stock, with the terms of office of
all members of one class expiring each year. Should the number of
directors not be equally divisible
by three, the excess director or directors shall be assigned to
Classes I or II as follows: (1) if there
shall be an excess of one directorship over the number equally
divisible by three, such extra
directorship shall be classified in Class I; and (2) if there be
an excess of two directorships over a
number equally divisible by three, one shall be classified in
Class I and the other in Class II. At the
organizational meeting, directors of Class I shall be elected to
hold office for a term expiring at the
first annual stockholders' meeting, directors of Class II shall
be elected to hold office for a term
expiring at the second succeeding annual stockholders' meeting
and directors of Class III shall be
elected to hold office for a term expiring at the third
succeeding annual meeting thereafter.
Thereafter, at each succeeding annual meeting, directors of each
class shall be elected for three year
terms. Notwithstanding the foregoing, the director whose term
shall expire at any annual meeting
shall continue to serve until such time as his successor shall
have been duly elected and shall have
qualified unless his position on the board of directors shall
have been abolished by action taken to
reduce the size of the board of directors prior to said meeting.
Should the number of directors be reduced, the directorship(s)
eliminated shall be allocated
among classes as appropriate so that the number of directors in
each class is as specified in the
position(s) to be abolished. Notwithstanding the foregoing, no
decrease in the number of directors
shall have the effect of shortening the term of any incumbent
director. Should the number of
directors be increased, other than directors which may be elected
by the holders of preferred stock,
the additional directorships shall be allocated among classes as
appropriate so that the number of
directors in each class is as specified in the immediately
preceding paragraph.
Whenever the holders of any one or more series of preferred stock
shall have the right,
voting separately as a class, to elect one or more directors ,
the board of directors shall include said
directors so elected and not be in addition to the number of
directors fixed as provided in this Article
III. Notwithstanding the foregoing, and except as otherwise may
be required By Law, whenever the
holders of any one or more series of preferred stock elect one or
more directors , the terms of the
director or directors elected by such holders shall expire at the
next succeeding annual stockholders'
meeting.
SECTION 4. Regular Meetings. A regular meeting of the board of
directors shall be held
at such time and place as shall be determined by resolution of
the board of directors without other
notice than such resolution.
SECTION 5. Special Meetings. Special meetings of the board of
directors may be called by
or at the request of the chairman, the chief executive officer or
one-third of the directors. The
person calling the special meetings of the board of directors may
fix any place as the place for
holding any special meeting of the board of directors called by
such persons.
Members of the board of the directors may participate in special
meetings by means of
telephone conference or similar communications equipment by which
all persons participating in the
meeting can hear each other. Such participation shall constitute
presence in person.
SECTION 6. Notice. Written notice of any special meeting shall be
given to each director at
least two days previous thereto delivered personally or by
telegram or at least seven days previous
thereto delivered by mail at the address at which the director is
most likely to be reached. Such
notice shall be deemed to be delivered when deposited in the
United States mail so addressed, with
postage thereon prepaid if mailed or when delivered to the
telegraph company if sent by telegram.
Any director may waive notice of any meeting by a writing filed
with the secretary. The attendance
of a director at a meeting shall constitute a waiver of notice of
such meeting, except where a director
attends a meeting for the express purpose of objecting to the
transaction of any business because the
meeting is not lawfully called or convened. Neither the business
to be transacted at, nor the purpose
of, any meeting of the board of directors need be specified in
the notice or waiver of notice of such
meeting.
SECTION 7. Quorum. A majority of the number of directors fixed by
Section 2 shall
constitute a quorum for the transaction of business at any
meeting of the board of directors, but if
less than such majority is present at a meeting, a majority of
the directors present may adjourn the
meeting from time to time. Notice of any adjourned meeting shall
be given in the same manner as
prescribed by Section 5 of this Article III.
SECTION 8. Manner of Acting. The act of the majority of the
directors present at a
meeting at which a quorum is present shall be the act of the
board of directors, unless a greater
number is prescribed by these bylaws, the certificate of
incorporation, or the General Corporation
Law of the State of Delaware.
SECTION 9. Action Without a Meeting. Any action required or
permitted to be taken by
the board of directors at a meeting may be taken without a
meeting if a consent in writing, setting
forth the action so taken, shall be signed by all of the
directors.
SECTION 10. Resignation. Any director may resign at any time by
sending a written notice
of such resignation to the home office addressed to the chairman.
Unless otherwise specified therein
such resignation shall take effect upon receipt thereof by the
chairman.
SECTION 11. Vacancies. Any vacancy occurring on the board of
directors shall be filled in
accordance with the provisions of the Corporation's certificate
of incorporation. Any directorship to
be filled by reason of an increase in the number of directors may
be filled by the affirmative vote of
two-thirds of the directors then in office or by election at an
annual meeting or at a special meeting
of the stockholders held for that purpose. The term of such
director shall be in accordance with the
provisions of the Corporation's certificate of incorporation.
SECTION 12. Removal of Directors. Any director or the entire
board of directors may be
removed only in accordance with the provisions of the
Corporation's certificate of incorporation.
SECTION 13. Compensation. Directors, as such, may receive
compensation for service on
the board of directors. Members of either standing or special
committees may be allowed such
compensation as the board of directors may determine.
SECTION 14. Age Limitation. No person 70 years or more of age
shall be eligible for
election, reelection, appointment or reappointment to the board.
No director shall serve as such
beyond the annual meeting immediately following the director
becoming 70 years of age. This age
limitation does not apply to an advisory director.
ARTICLE IV
Committees of the Board of Directors
The board of directors may, by resolution passed by a majority of
the whole board, designate
one or more committees, as they may determine to be necessary or
appropriate for the conduct of the
business, and may prescribe the duties, constitution and
procedures thereof. Each committee shall
consist of one or more directors appointed by the chairman. The
chairman may designate one or
more directors as alternate members of any committee, who may
replace any absent or disqualified
member at any meeting of the committee.
The chairman shall have power at any time to change the members
of, to fill vacancies in, and
to discharge any committee of the board. Any member of any such
committee may resign at any
time by giving notice to the Corporation; provided, however, that
notice to the board, the chairman
of the board, the chief executive officer, the chairman of such
committee, or the secretary shall be
deemed to constitute notice to the Corporation. Such resignation
shall take effect upon receipt of
such notice or at any later time specified therein; and, unless
otherwise specified therein, acceptance
of such resignation shall not be necessary to make it effective.
Any member of any such committee
may be removed at any time, either with or without cause, by the
affirmative vote of a majority of the
authorized number of directors at any meeting of the board called
for that purpose.
ARTICLE V
Officers
SECTION 1. Positions. The officers shall be a chairman, a
president, one or more vice
presidents, a secretary and a treasurer, each of whom shall be
elected by the board of directors. The
board of directors may designate one or more vice presidents as
executive vice president or senior
vice president. The board of directors may also elect or
authorize the appointment of such other
officers as the business may require. The officers shall have
such authority and perform such duties
as the board of directors may from time to time authorize or
determine. In the absence of action by
the board of directors, the officers shall have such powers and
duties as generally pertain to their
respective offices.
SECTION 2. Election and Term of Office. The officers shall be
elected annually by the
board of directors at the first meeting of the board of directors
held after each annual meeting of the
stockholders. If the election of officers is not held at such
meeting, such election shall be held as
soon thereafter as possible. Each officer shall hold office until
his successor shall have been duly
elected and qualified, until his death or until he shall resign
or shall have been removed in the manner
hereinafter provided. Election or appointment of an officer,
employee or agent shall not of itself
create contract rights. The board of directors may authorize the
Corporation to enter into an
employment contract with any officer in accordance with state
law; but no such contract shall impair
the right of the board of directors to remove any officer at any
time in accordance with Section 3 of
this Article V.
SECTION 3. Removal. Any officer may be removed by vote of two-
thirds of the board of
directors whenever, in its judgment, the best interests will be
served thereby, but such removal,
other than for cause, shall be without prejudice to the contract
rights, if any, of the person so
removed.
SECTION 4. Vacancies. A vacancy in any office because of death,
resignation, removal,
disqualification or otherwise, may be filled by the board of
directors for the unexpired portion of the
term.
SECTION 5. Remuneration. The remuneration of the officers shall
be fixed from time to
time by the board of directors, and no officer shall be prevented
from receiving such salary by reason
of the fact that he is also a director .
SECTION 6. Age Limitation. No person 70 or more years of age
shall be eligible for
election, reelection, appointment or reappointment as an officer.
No officer shall serve beyond the
annual meeting immediately following the officer becoming 70 or
more years of age.
ARTICLE VI
Contracts, Loans, Checks and Deposits
SECTION 1. Contracts. To the extent permitted by applicable law,
and except as
otherwise prescribed by the Corporation's certificate of
incorporation or these bylaws with respect to
certificates for shares, the board of directors or the executive
committee may authorize any officer,
employee, or agent to enter into any contract or execute and
deliver any instrument in the name of
and on behalf . Such authority may be general or confined to
specific instances.
SECTION 2. Loans. No loans shall be contracted on behalf and no
evidence of
indebtedness shall be issued in its name unless authorized by the
board of directors. Such authority
may be general or confined to specific instances.
SECTION 3. Checks, Drafts, Etc. All checks, drafts or other
orders for the payment of
money, notes or other evidences of indebtedness issued in the
name shall be signed by one or more
officers, employees or agents in such manner, including in
facsimile form, as shall from time to time
be determined by resolution of the board of directors.
SECTION 4. Deposits. All funds not otherwise employed shall be
deposited from time to
time to the credit in any of its duly authorized depositories as
the board of directors may select.
ARTICLE VII
Certificates for Shares and Their Transfer
SECTION 1. Certificates for Shares. The shares of capital stock
shall be represented by
certificates signed by the chairman of the board of directors or
the president or a vice president and
by the treasurer or an assistant treasurer or the secretary or an
assistant secretary, and may be sealed
with the seal or a facsimile thereof. Any or all of the
signatures upon a certificate may be facsimiles if
the certificate is countersigned by a transfer agent, or
registered by a registrar, other than the
Corporation itself or an employee. If any officer who has signed
or whose facsimile signature has
been placed upon such certificate shall have ceased to be such
officer before the certificate is issued,
it may be issued by the Corporation with the same effect as if he
were such officer at the date of its
issue.
SECTION 2. Form of Share Certificates. All certificates
representing shares of capital
stock shall set forth upon the face or back that the Corporation
will furnish to any stockholder upon
request and without charge a full statement of the designations,
preferences, limitations, and relative
rights of the shares of each class authorized to be issued, the
variations in the relative rights and
preferences between the shares of each such series so far as the
same have been fixed and
determined, and the authority of the board of directors to fix
and determine the relative rights and
preferences of subsequent series.
Each certificate representing shares shall state upon the face
thereof: that the Corporation is
organized under the laws of the State of Delaware; the name of
the person to whom issued; the
number and class of shares, the designation of the series, if
any, which such certificate represents; the
par value of each share represented by such certificate, or a
statement that the shares are without par
value. Other matters in regard to the form of the certificates
shall be determined by the board of
directors.
SECTION 3. Payment for Shares. No certificate shall be issued for
any share of capital
stock until such share is fully paid.
SECTION 4. Form of Payment for Shares. The consideration for the
issuance of shares
of capital stock shall be paid in accordance with the provisions
of the certificate of incorporation.
SECTION 5. Transfer of Shares. Transfer of shares of capital
stock shall be made only
on the stock transfer books of the Corporation. Authority for
such transfer shall be given only to the
holder of record thereof or by his legal representative, who
shall furnish proper evidence of such
authority, or by his attorney thereunto authorized by power of
attorney duly executed and filed with
the Corporation. Such transfer shall be made only on surrender
for cancellation of the certificate for
such shares. The person in whose name shares of capital stock
stand on the books shall be deemed
by the Corporation to be the owner thereof for all purposes.
SECTION 6. Lost Certificates. The board of directors may direct a
new certificate to be
issued in place of any certificate theretofore issued by the
Corporation alleged to have been lost,
stolen, or destroyed, upon the making of an affidavit of that
fact by the person claiming the
certificate of stock to be lost, stolen, or destroyed. When
authorizing such issue of a new certificate,
the board of directors may, in its discretion and as a condition
precedent to the issuance thereof,
require the owner of such lost, stolen, or destroyed certificate,
or his legal representative, to give the
Corporation a bond in such sum as it may direct as indemnity
against any claim that may be made
against the Corporation with respect to the certificate alleged
to have been lost, stolen, or destroyed.
ARTICLE VIII
Fiscal Year; Annual Audit
The fiscal year shall end on the last day of December of each
year. The Corporation shall be
subject to an annual audit as of the end of its fiscal year by
independent public accountants appointed
by and responsible to the board of directors.
ARTICLE IX
Dividends
Dividends upon the capital stock, subject to the provisions of
the certificate of incorporation,
if any, may be declared by the board of directors at any regular
or special directors' meeting,
pursuant to law. Dividends may be paid in cash, in property or in
stock.
ARTICLE X
Corporation Seal
The corporate seal shall be in such form as the board of
directors shall prescribe.
ARTICLE XI
Amendments
Pursuant to the certificate of incorporation, these bylaws may be
repealed, altered, amended
or rescinded by the stockholders only by vote of not less than
three-quarters of the voting power of
the outstanding shares of capital stock entitled to vote
generally in the election of directors
(considered for this purpose as one class) cast at a
stockholders' meeting called for that purpose
(provided that notice of such proposed repeal, alteration,
amendment or rescission is included in the
notice of such meeting). In addition, the board of directors may
repeal, alter, amend or rescind these
bylaws by vote of two-thirds of the board of directors at a legal
meeting held in accordance with the
provisions of these bylaws.


c)   Reports on Form 8-K:

  On  March 7, 2000, the Company filed a Form 8-K announcing that
  the  Company  was  acquired by Electronic Identification,  Inc.
  through  a  reorganization agreement. Electronic Identification
  was  the surviving company and shall maintain Girne's reporting
  status.  A  final  amendment to this 8-K was filed  on  May  8,
  2000.


FINANCIAL STATEMENTS

          Reports  of Independent Auditors, KPMG, LLP dated March
            31, 2000.

          Balance Sheet as of December 31, 1999 and December  31,
            1998

          Statement  of Operations for each of the years  in  the
            three  year  period ended December 31, 1999  and  for
            the  period  from  inception  on  May  14,  1992   to
            December 31, 1999.

          Statement of Stockholders' Equity for each of the years
            in  the three year period ended December 31, 1999 and
            for  the  period from inception on May  14,  1992  to
            December 31, 1999.

          Statement  of Cash Flows for each of the years  in  the
            three  year  period ended December 31, 1999  and  for
            the  period  from  inception  on  May  14,  1992   to
            December 31, 1999.

          Notes to Financial Statements
INDEPENDENT AUDITORS' REPORT
To the Stockholders and Director of
Electronic Identification, Inc.

We  have  audited the accompanying balance sheets  of  Electronic
Identification,  Inc.  (a  development stage  enterprise)  as  at
December  31,  1999  and  1998  and  the  related  statements  of
operations, stockholders' deficit and cash flows for each of  the
years  in the three year period ended December 31, 1999  and  for
the  period from inception on May 14, 1992 to December 31,  1999.
These   financial  statements  are  the  responsibility  of   the
Company's management. Our responsibility is to express an opinion
on these financial statements based on our audits.

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

In  our  opinion,  the  financial statements  referred  to  above
present  fairly, in all material respects, the financial position
of  Electronic Identification, Inc. as at December 31,  1999  and
1998  and  the results of its operations and its cash  flows  for
each  of  the  years in the three year period ended December  31,
1999  and  for  the  period from inception on  May  14,  1992  to
December   31,  1999,  in  accordance  with  generally   accepted
accounting principles in the United States of America.

The accompanying financial statements have been prepared assuming
that  the  Company will continue as a going concern. As discussed
in  note  2 to the financial statements, the Company has suffered
recurring losses from operations and has a net capital deficiency
that raises substantial doubt about its ability to continue as  a
going concern. Management's plans in regard to these matters  are
also  described  in  note 2. These financial  statements  do  not
include  any  adjustments that might result from the  outcome  of
this uncertainty.

/s/ KPMG, LLP
Chartered Accountants
Vancouver, Canada
March 31, 2000
ELECTRONIC IDENTIFICATION, INC.
(Formerly RFID Systems Corp.)
(A Development Stage Enterprise)
Balance Sheets
(Expressed in U.S. Dollars)
December 31, 1999 and 1998
<TABLE>
<S>                                    <C>         <C>
                                             1999        1998
Assets
Current assets:
Cash                                      $ 8,071     $ 4,615
Accounts receivable                         4,280      49,928
Prepaid expenses and deposits                 351         340
Due from stockholder (note 9(a))           65,700           -
Total current assets                       78,402      54,883
Restricted cash (note 5)                        -      47,394
Fixed assets (note 6)                      46,670      61,958
Patents (note 7)                           10,005      11,873
Total assets                            $ 135,077   $ 176,108
Liabilities and Stockholders' Deficit
Current liabilities:
Accounts payable and accrued            $ 402,310   $ 566,907
liabilities
Due to stockholders, directors and        301,328     173,706
officers (note 9(a))
Total current liabilities                 703,638     740,613
Subscriptions received for common               -   1,060,000
stock (note 8)
Total liabilities and subscriptions       703,638   1,800,613
received
Stockholders' deficit:
Preferred stock:
Authorized: 5,000,000 stock, with
$0.001 par value
(1998 -2,220,000 stock, with $0.0045
par value)
Issued: nil (1998 - nil)
Common stock (note 10):
Authorized: 70,000,000 stock, with
$0.001 par value
(1998 -11,111,111 stock, with $0.0045
par value)
Issued:17,418,083 stock (1998 -            17,419      42,632
9,473,926)
Additional paid-in capital              10,408,68   6,276,328
                                                0
Deficit accumulated during the          (10,994,6   (7,943,46
development stage                             60)          5)
Total stockholders' deficit             (568,561)   (1,624,50
                                                           5)
Future operations (note 2)
Contingencies (note 11)
Year 2000 Issue (note 15)
Subsequent events (note 16)
Total liabilities and stockholders'     $ 135,077   $ 176,108
deficit
</TABLE>



See accompanying notes to financial statements
ELECTRONIC IDENTIFICATION, INC.
(Formerly RFID Systems Corp.)
(A Development Stage Enterprise)
Statements of Operations
(Expressed in U.S. Dollars)
<TABLE>
<S>                           <C>       <C>       <C>       <C>
                                 Years      Years     Years     Period
                                 ended      ended     ended       from
                              December   December  December  inception
                              31, 1999   31, 1998  31, 1997     on May
                                                              14, 1992
                                                                    to
                                                              December
                                                              31, 1999
Revenue:
Revenue                            $ -        $ -  $ 54,996  $ 254,996
Interest and other income          990      2,993         -      4,996
                                   990      2,993    54,996    259,992
Expenses:
General and administrative     922,097    888,857  1,177,75  3,522,159
(schedule)                                                4
Sales and marketing            303,875   1,006,68   981,140  2,381,916
(schedule)                                      9
Research and development        55,993    266,689   756,859  1,597,568
(schedule)
Interest on long-term debt     493,586    216,026   316,000  1,025,612
(note 14)
Depreciation and amortization   18,311     44,527    41,541    130,837
Write-off of leasehold               -          -    32,131     32,131
improvements (note 6)
                              1,793,86   2,422,78  3,305,42  8,690,223
                                     2          8         5
Loss before the undernoted    (1,792,8   (2,419,7  (3,250,4  (8,430,23
                                   72)        95)       29)         1)
Loss due to settlement of
debt by
issuance of common stock      (1,258,3   (663,068         -  (1,921,39
(note 3(f))                        23)          )                   1)
Equity loss in and write-down
of investment in
and advances to RFID Datachip
Technologies
Inc. (note 4)                        -        (1)  (271,527  (358,835)
                                                          )
Write-off of advances                -          -         -  (284,203)
Loss for the period                  $          $         $          $
                              (3,051,1   (3,082,8  (3,521,9  (10,994,6
                                   95)        64)       56)        60)
Loss per common share
information:
Basic and diluted             $ (0.22)   $ (0.67)  $ (1.81)
Weighted average number of
common
shares outstanding (note      13,951,3   4,635,71  1,951,00
10(a))                              57          5         0
</TABLE>
See accompanying notes to financial statements
ELECTRONIC IDENTIFICATION, INC.
(Formerly RFID Systems Corp.)
(A Development Stage Enterprise)
Statements of Stockholders' Deficit
(Expressed in U.S. Dollars)
<TABLE>
<S>                            <C>         <C>      <C>        <C>
                                    Common (note     Additio     Deficit
                                     stock 10(a))        nal   accumulat
                                                     paid in   ed during
                                                     Capital         the
                                                               developme
                                                                nt stage
                                  Shares     Amount
Balance, May 14, 1992                  -        $ -       $ -        $ -
(inception)
Loss for the period                    -          -         -      (185)
Stock issued for cash          3,111,111        700         -          -
Balance, December 31, 1992     3,111,111        700         -      (185)
Loss for the period                    -          -         -       (80)
Balance, December 31, 1993     3,111,111        700         -      (265)
Loss for the period                    -          -         -       (80)
Balance, December 31, 1994     3,111,111        700         -      (345)
Loss for the period                    -          -         -   (25,627)
Stock issued for cash            444,445     15,300     4,700          -
Balance, December 31, 1995     3,555,556     16,000     4,700   (25,972)
Loss for the period                    -          -         -  (1,312,67
                                                                      3)
Stock returned to Company for  (2,275,55    (10,240    10,240          -
cancellation                          6)          )
Stock issued for secured notes   222,222      1,000   182,810          -
receivable
Stock issued for cash            214,005        963   962,160          -
Balance, December 31, 1996     1,716,227      7,723 1,159,910  (1,338,64
                                                                      5)
Loss for the period                    -          -         -  (3,521,95
                                                                      6)
Stock issued for cash            222,222      1,000   999,000          -
Stock issued on settlement of    639,027      2,875   497,124          -
convertible debentures
Stock issued to settle            50,380        227    24,773          -
expenses
Intrinsic value of beneficial
conversion of liabilities
(note 14)                              -          -   316,000          -
Stock issue costs                      -          - (225,112)          -
Balance, December 31, 1997     2,627,856     11,825 2,771,695  (4,860,60
                                                                      1)
Loss for the period                    -          -         -  (3,082,86
                                                                      4)
Stock issued on settlement of    383,334      1,725   342,691          -
accounts payable
Stock issued for cash          2,605,336     11,723   758,520          -
Stock issued on settlement of    298,033      1,341   151,249          -
notes payable
Stock issued on settlement of
convertible
debentures                     1,944,590      8,751   678,880          -
Stock issued on settlement of    250,000      1,126   131,733          -
legal claims
Stock issued on settlement of    355,555      1,600   114,902          -
loan payable
Stock issued to settle         1,009,222      4,541   435,323          -
expenses
Intrinsic value of beneficial
conversion of liabilities
(note 14)                              -          -   175,653          -
Settlement of debt by issuance
of common stock
(note 3(f))                            -          -   663,068          -
Cancellation of redeemable
common stock issued
to RFID Datachip Technologies          -          -   226,670          -
Inc.
Stock issue costs                      -          - (174,056)          -
Balance, December 31, 1998,    9,473,926     42,632 6,276,328  (7,943,46
carried forward                                                       5)
</TABLE>
ELECTRONIC IDENTIFICATION, INC.
(Formerly RFID Systems Corp.)
(A Development Stage Enterprise)
Statements of Stockholders' Deficit, Continued
(Expressed in U.S. Dollars)
Deficit
accumulated
Additional during the
Common stock (note 10(a)) paid-in development
Shares Amount capital stage
<TABLE>
<S>                            <C>         <C>      <C>        <C>
                                    Common (note     Additio     Deficit
                                     stock 10(a))        nal   accumulat
                                                     paid in   ed during
                                                     Capital         the
                                                               developme
                                                                nt stage
                                  Shares     Amount


Balance, December 31, 1998,     9,473,926         $         $          $
brought forward                              42,632 6,276,328  (7,943,46
                                                                      5)
Loss for the period                     -         -         -  (3,051,19
                                                                      5)
Stock issued on the settlement
of subscriptions
received for common stock       3,440,000    15,480 1,044,520          -
Stock issued to settle          2,012,000     5,782   369,531          -
expenses
Stock issued on settlement of     500,000     2,250    97,750          -
notes payable
Stock issued on settlement of
convertible
debentures                      1,992,157     3,392   398,640          -
Intrinsic value of beneficial
conversion of
liabilities (note 14)                   -         -  474,117-
Settlement of debt by issuance
of common stock
(note 3(f))                             -         - 1,258,323          -
Authorized par value change
resulting in an
increase in additional paid-in          -   (52,117    52,117          -
capital                                           )
Stock issue costs                       -         -  (48,474)          -
Compensatory benefit of stock           -         -   485,828          -
options (note 10(d))
Balance, December 31, 1999      17,418,08         $         $          $
                                        3    17,419 10,408,68  (10,994,6
                                                            0        60)
</TABLE>
See accompanying notes to financial statements.
ELECTRONIC IDENTIFICATION, INC.
(Formerly RFID Systems Corp.)
(A Development Stage Enterprise)
Statements of Cash Flows
(Expressed in U.S. Dollars)
<TABLE>
<S>                                <C>        <C>        <C>        <C>
                                      Years        Years     Years     Period
                                      ended        ended     ended       from
                                   December     December  December  inception
                                   31, 1999     31, 1998  31, 1997     on May
                                                                     14, 1992
                                                                     December
                                                                     31, 1999
Cash flows from operating
activities:
Loss for the period                       $            $         $          $
                                   (3,051,1    (3,082,86 (3,521,95  (10,994,6
                                        95)           4)        6)        60)
Items not involving cash:
Depreciation and amortization        18,311       44,527    41,541    130,837
Loss due to settlement of debt by
issuance
of common stock (note 3(f))        1,258,32    663,068 - 1,921,391
                                          3
Equity loss in and write-down of
investment
in and advances to RFID Datachip
Technologies Inc. (note 4)                -            1   271,527    358,835
Write-off of leasehold                    -            -    32,131     32,131
improvements
Write-off of advances                     -            -         -    284,203
Write-down of fixed assets                -       35,252         -     35,252
Loss on disposal of fixed assets          -       10,771         -     10,771
Acquisition of in-process research
and
Development                               -            -         -    340,108
Expenses settled with the issuance
of
notes payable                             -            -   154,131    154,131
Expenses settled with the issuance  375,313      439,864    24,999    840,176
of stock
Intrinsic value of beneficial
conversion of
liabilities into common stock       474,117      175,653   316,000    965,770
(note 14)
Compensatory benefit of stock
options
(note 10(d))                        485,828            -         -    485,828
Changes in non-cash operating
working capital:
Accounts receivable                  45,648     (34,979)   210,435    (4,280)
Notes receivable                          -            -    18,139          -
Prepaid expenses and deposits          (11)       14,436     9,774      (351)
Restricted cash                      47,394        3,522  (50,916)          -
Accounts payable and accrued       (65,752)      324,375   396,248    725,934
liabilities
Due to stockholders, directors and   61,922    (108,333)   282,040    235,629
officers
Accounts payable to be settled
with
common stock                              -            -   291,006    291,006
Net cash used in operating         (350,102    (1,514,70 (1,524,90  (4,187,28
activities                                )           7)        1)         9)
Cash flows from financing
activities:
Subscriptions received for common         -      564,260   142,740  1,060,000
stock
Net proceeds on issuance of common        -      596,188   774,888  2,354,899
stock
Net proceeds on issuance of         353,558      400,961   758,261  1,512,780
convertible debentures
Issuance of loan payable                  -            -   104,858    104,858
Net cash provided by financing      353,558    1,561,409 1,780,747  5,032,537
activities
Cash flows from investing
activities:
Bank overdraft                            -     (15,968)    15,968          -
Purchase of fixed assets                  -     (12,709) (155,150)  (251,101)
Acquisition of patent                     -     (13,410)         -   (13,410)
Advances to RFID Datachip                 -            - (132,165)  (132,165)
Technologies Inc. (note 4)
Other advances                            -            -         -  (440,501)
Net cash used in investing                -     (42,087) (271,347)  (837,177)
activities
Increase (decrease) in cash           3,456        4,615  (15,501)      8,071
Cash, beginning of period             4,615            -    15,501          -
Cash, end of period                 $ 8,071      $ 4,615       $ -    $ 8,071
</TABLE>
ELECTRONIC IDENTIFICATION, INC.
(Formerly RFID Systems Corp.)
(A Development Stage Enterprise)
Statements of Cash Flows (continued)
(Expressed in U.S. Dollars)
<TABLE>
<S>                                <C>        <C>        <C>        <C>
                                      Years        Years     Years     Period
                                      ended        ended     ended       from
                                   December     December  December  inception
                                   31, 1999     31, 1998  31, 1997     on May
                                                                     14, 1992
                                                                     December
                                                                     31, 1999
Supplemental non-cash investing
and financing activities:
Stock issued on the settlement of
subscriptions
received for common stock                 $            $         $          $
                                   1,060,00                         1,060,000
                                          0
Stock issued on settlement of             -      344,416         -    344,416
accounts payable
Stock issued on settlement of       100,000      152,590         -    252,570
notes payable
Stock issued on settlement of
convertible
debentures                          402,032      687,631   500,000  1,589,663
Stock issued on settlement of             -      132,858         -    132,858
legal claims
Stock issued on settlement of loan        -      116,502         -    116,502
payable
Common stock issued on settlement   375,313      439,864    24,999    840,176
of expenses
Cancellation of redeemable common         -      226,670         -    226,670
stock
Intrinsic value of beneficial
conversion of
liabilities into common stock       474,117      175,653   316,000    965,770
(note 14)
Loss due to settlement of debt by
issuance of common stock (note     1,258,32    663,068 - 1,921,391
3(f))                                     3
Issuance of common stock in
exchange for
secured notes                             -            -         -    183,810
Issuance of redeemable common             -            -         -    226,670
stock
Authorized par value change
resulting in an
increase in additional paid in       52,117            -         -     52,117
capital
Supplemental cash flow
information:
Cash paid for taxes                     $ -          $ -       $ -        $ -
Cash paid for interest               28,921       27,382         -     56,303
</TABLE>
See accompanying notes to financial statements.
ELECTRONIC IDENTIFICATION, INC.
(Formerly RFID Systems Corp.)
(A Development Stage Enterprise)
Notes to Financial Statements
(Expressed in U.S. Dollars)
Years ended December 31, 1999, 1998 and 1997

1. General:

On April 23, 1999, Electronic Identification, Inc. (the "Company"
or  "El  2  ") signed an Agreement and Plan of Merger  with  RFID
Systems Corp. ("RFID"). This merger was completed on May 3, 1999.

El  2  is a corporation organized and existing under the laws  of
the  State  of  Nevada. At that date, El 2 was an inactive  shell
company.  RFID  was  a  development  stage  enterprise  and   was
developing  automatic identification and data collection  systems
utilizing  radio  frequency identification technology.  El  2  is
continuing in this line of business.

El  2  had  1,000 shares of common stock outstanding.  Under  the
terms   and   conditions  of  the  Agreement,  each  issued   and
outstanding share of common stock of RFID was converted into  one
common stock of the Company.

This transaction has been accounted for as a recapitalization  of
RFID,  effectively as if RFID had issued common shares to acquire
the  net  monetary assets El 2 . The net monetary assets acquired
by El 2 were as follows:
          <TABLE>
          <S>                     <C>
          Total assets            $ 176,108
          Total liabilities       1,800,61
                                  3
          </TABLE>

Under  re-capitalization accounting, these  financial  statements
reflect  the assets, liabilities, revenues and expenses  of  RFID
from its inception on May 14, 1992 combined with these of El 2

from the date the merger was completed.

Pursuant  to this Agreement, and subject to regulatory  approval,
each stockholder of RFID who sent in their stock certificates for
transfer  into  certificates representing shares of  the  Company
prior  to  May  31, 1999, will receive a right to  purchase,  for
every  ten  shares  owned and tendered, an  additional  share  of
common  stock at 75% of the market price of the Company stock  as
of  the  date  of  exercise. The rights will be  exercisable  for
thirty  days after filing of the registration statement with  the
Securities  Exchange Commission. Rights outstanding  at  December
31, 1999 are 1,169,295.

2. Future operations:

These  financial  statements  have been  prepared  on  the  going
concern  basis under which an entity is considered to be able  to
realize on its assets and satisfy its liabilities in the ordinary
course of business. During the period since inception on May  14,
1992, the Company has incurred losses aggregating $10,994,660. At
December  31, 1999, the Company has a working capital  deficiency
of  $625,236 and a stockholders' deficit (net capital deficiency)
of $568,561.
ELECTRONIC IDENTIFICATION, INC.
(Formerly RFID Systems Corp.)
(A Development Stage Enterprise)
Notes to Financial Statements, page 2
(Expressed in U.S. Dollars)
Years ended December 31, 1999, 1998 and 1997

2. Future operations (continued):

The Company's ability to meet its obligations as they come due is
primarily  dependent upon securing additional financing,  whether
from  operations  or  otherwise. Management continues  to  pursue
additional  sources  of  financing;  however,  there  can  be  no
guarantee  that  the  required  additional  financing   will   be
obtained. Failure to identify and obtain such financing may limit
the Company's ability to satisfy its obligations as they come due
which may, in turn, impair the Company's ability to continue as a
going concern. This could negatively impact the recoverability of
the carrying value of assets.

These   financial  statements  do  not  include  any  adjustments
relating  to  the  recoverability  of  assets  and  amounts   and
classification of liabilities that might be necessary should  the
Company  be unable to continue as a going concern. If the Company
is  unable to continue as a going concern, assets and liabilities
would  require  restatement on a liquidation basis,  which  would
differ materially from the going concern basis.

3. Significant accounting policies:

(a) Basis of presentation:

These  financial  statements  are  prepared  in  accordance  with
generally accepted accounting principles in the United States.

The  Company  has  not produced significant  revenues  and  is  a
Development  Stage  Company as defined  by  Financial  Accounting
Standard No. ("FAS") 7.

(b) Foreign currency translation:

The  Company's  functional and reporting currency is  the  United
States  dollar. Transactions undertaken in a currency other  than
the  United  States  dollar  are remeasured  into  United  States
dollars  using  exchange rates at the date  of  the  transaction.
Monetary assets and liabilities denominated in foreign currencies
are  remeasured at each balance sheet date at the  exchange  rate
prevailing at the balance sheet date. Gains and losses arising on
remeasurement  or  settlement  of  foreign  currency  denominated
transactions  or  balances are included in the  determination  of
income. Foreign currency transactions are primarily undertaken in
Canadian  dollars.  The  Company does not enter  into  derivative
instruments   to   offset   the  impact   of   foreign   currency
fluctuations.

(c) Use of estimates:

The  preparation  of  financial  statements  in  accordance  with
generally  accepted accounting principles requires management  to
make  estimates which affect the reported amounts of  assets  and
liabilities   and  the  disclosure  of  contingent   assets   and
liabilities  at  the balance sheet dates, and the recognition  of
revenues  and  expenses for the reporting  periods.  Areas  where
significant estimates have been applied include the assessment of
the ultimate liability arising out of legal contingencies and the
recoverability  of capital and intangible assets. Actual  results
could differ from these estimates.
ELECTRONIC IDENTIFICATION, INC.
(Formerly RFID Systems Corp.)
(A Development Stage Enterprise)
Notes to Financial Statements, page 3
(Expressed in U.S. Dollars)
Years ended December 31, 1999, 1998 and 1997

3. Significant accounting policies (continued):

(d) Fixed assets:

Fixed  assets  are carried at cost less accumulated amortization.
Amortization is calculated annually as follows:
<TABLE>
<S>                           <C>           <C>
Assets                               Basis     Rate
Furniture and equipment          Straight-    20%
                                      line
Computers and technology        Declining-      30%
equipment                          balance
</TABLE>

The  Company reviews and assesses the underlying value  of  fixed
assets as the situation dictates to determine whether a provision
for impairment should be recorded. Such determination is made  by
comparing  the carrying value of fixed assets to the future  cash
flow (undiscounted) expected to result. When these cash flows are
less  than  the  carrying  value,  impairment  is  calculated  by
reference to the fair value of the specific assets.

(e) Patents:

Patents  are  recorded at cost and amortized using the  straight-
line method over a period of five years.

(f) Common stock issuances:

During  fiscal  1999, common stock of the Company was  issued  in
settlement  of  the  indebtedness. A loss of $1,258,323  (1998  -
$663,068)  occurred on this settlement equal  to  the  difference
between  the market value of common stock issued and the carrying
value of the debt.

Stock  issue  costs  are  accounted for as  a  reduction  in  the
proceeds from the issuance of common stock.

(g) Research and development costs:

Research and development costs are expensed as incurred.

(h) Stock-based compensation:

The  Company has elected to apply the intrinsic value  principles
of  Accounting  Principles Board Opinion No. 25, "Accounting  for
Stock    Issued   to   Employees"   ("APB   25"),   and   related
interpretations  in accounting for its stock options  on  options
granted  to  employees and directors. Under APB 25,  compensation
expense is only recorded to the extent that the exercise price is
less than the market value of the underlying stock on the date of
grant. For stock options granted to non-employees, the fair value
of  the options at their date of grant will be recognized. Values
assigned  to  options will be charged against income  over  their
vesting  period. Fair value information with respect  to  options
granted  to  employees and directors is disclosed  in  accordance
with FAS 123, "Accounting for Stock-Based Compensation".
ELECTRONIC IDENTIFICATION, INC.
(Formerly RFID Systems Corp.)
(A Development Stage Enterprise)
Notes to Financial Statements, page 4
(Expressed in U.S. Dollars)
Years ended December 31, 1999, 1998 and 1997

3. Significant accounting policies (continued):

(i) Comprehensive loss:

The  Company  has adopted FAS 130, "Comprehensive Income",  which
requires   disclosure  of  comprehensive  income  or  loss.   The
Company's  net  loss  is  equal to  comprehensive  loss  for  all
periods.

(j) Income taxes:

Income  taxes  are  accounted for under the asset  and  liability
method.  Deferred tax assets and liabilities are  recognized  for
the  future tax consequences attributable to differences  between
the  financial statement carrying amounts of existing assets  and
liabilities and their respective tax bases and operating loss and
tax  credit  carry forwards. Deferred tax assets and  liabilities
are measured using enacted tax rates expected to apply to taxable
income  in  the  years in which those temporary  differences  are
expected  to be recovered or settled. The effect on deferred  tax
assets and liabilities of a change in tax rates is recognized  in
income  in  the period that includes the enactment date.  To  the
extent  that  the  realization of  deferred  tax  assets  is  not
considered  to be more likely than not, a valuation allowance  is
provided.

(k) Loss per common share:

Loss per common share is calculated based on the weighted average
number  of  common shares outstanding, which excludes  subscribed
but unissued shares. The number of shares used for loss per share
purposes  gives retroactive effect to the reverse stock split  on
May 4, 1998 (note 10 (a)).

As  the  effect of outstanding warrants is anti-dilutive, diluted
loss per share does not differ from basic loss per share.

4.  Investment in and advances to RFID Datachip Technologies Inc.
("Datachip"):

During  1996,  the  Company acquired  49.9%  of  the  issued  and
outstanding common stock of Datachip, an unrelated party prior to
the  transaction,  by way of a stock exchange. Datachip  received
50,371 redeemable common stock of the Company valued at $4.50 per
stock  (as adjusted for reverse stock split (note 10(a)).  During
fiscal 1997, management determined that a permanent impairment in
the  value  of its investment had occurred and as a  result,  the
investment  in  Datachip was written down  to  a  nominal  value.
During  fiscal 1998, pursuant to a legal settlement, the  Company
returned all common stock of Datachip for consideration equal  to
the  return  and  cancellation  of the  redeemable  common  stock
previously  issued,  and wrote-off the balance  of  the  carrying
value of its investment in Datachip.

5. Restricted cash:

As  a  result of legal action taken against the Company,  $47,394
was garnished in 1997 from the Company's bank account and held in
trust  with the Company's attorney. In 1999, pursuant to a  legal
settlement,   the   funds  were  delivered  to   the   successful
subscribers.
ELECTRONIC IDENTIFICATION, INC.
(Formerly RFID Systems Corp.)
(A Development Stage Enterprise)
Notes to Financial Statements, page 5
(Expressed in U.S. Dollars)
Years ended December 31, 1999, 1998 and 1997

6. Fixed assets:
<TABLE>
<S>                            <C>      <C>          <C>
                                        Accumulated    Net book
December 31, 1999                 Cost  amortizatio  value
                                                  n
Furniture and equipment              $      $ 4,308    $ 13,754
                                18,062
Computers and technology        70,603       37,687      32,916
equipment
                                     $     $ 41,995    $ 46,670
                                88,665
</TABLE>

<TABLE>
<S>                            <C>      <C>          <C>
                                        Accumulated    Net book
December 31, 1998                 Cost  amortizatio  value
                                                  n
Furniture and equipment              $      $ 1,227    $ 18,370
                                19,597
Computers and technology        69,033       25,445      43,588
equipment
                                     $     $ 26,672    $ 61,958
                                88,630
</TABLE>

During  fiscal 1997, the Company wrote-off leasehold improvements
which  were  located  in  their  Mountain  View,  California  and
Kelowna,  British  Columbia  premises  due  to  the  vacating  or
anticipated vacating of these premises.

7. Patents:
<TABLE>
<S>                      <C>            <C>
                            Year ended     Year ended
                          December 31,   December 31,
                                  1999           1998
Cost                          $ 14,756  $ 13,410
Less accumulated                 4,751          1,537
amortization
                              $ 10,005       $ 11,873
</TABLE>

8. Subscriptions received for common stock:

Subscriptions received for common stock represent funds  received
in advance of stock issuance.

9. Related party transactions:

(a) Due to (due from) stockholders, directors and officers:

Amounts  due  to (due from) stockholders, directors and  officers
represent  amounts owed to, or receivable from, the stockholders,
directors   and   officers  or  companies   controlled   by   the
stockholders,  directors  or officers.  These  amounts  generally
arose  from  management fees or expenses paid on  behalf  of  the
Company by the stockholders, directors and officers, and  a  loan
provided  by a stockholder. The amounts are non-interest bearing,
unsecured and have no specific terms of repayment.
ELECTRONIC IDENTIFICATION, INC.
(Formerly RFID Systems Corp.)
(A Development Stage Enterprise)
Notes to Financial Statements, page 6
(Expressed in U.S. Dollars)
Years ended December 31, 1999, 1998 and 1997

9. Related party transactions (continued):

(b) Transactions with directors and officers:

During the year, the Company was charged a total of $nil (1998  -
$602,721;  1997  -$  245,105; 1996 -  $nil)  for  management  and
consulting services by the director and officers of the  Company.
In  1998, the Company settled $238,548 of the $602,721 by issuing
641,667 shares of common stock of the Company.

10. Common stock:

(a) Reverse stock split:

On May 4, 1998, the Company resolved to consolidate the number of
preferred and common stock outstanding by a ratio of 4.5 old  for
one  new common stock. The effect of this reverse stock split has
been applied retroactively to these financial statements.

(b) Stock purchase warrants:

Activity during the year ended December 31, 1999 is as follows:
<TABLE>
<S>          <C>      <C>      <C>      <C>       <C>     <C>
Expiry Date  Exercis   Outstan  Granted  Exercis  Expire/  Outstan
             e price      ding                ed  cancele     ding
                       Decembe                          d  Decembe
                       r, 1998                             r, 1999
June 20,       $2.93     4,444        -        -        - 4,444
2002
</TABLE>
Activity during the year ended December 31, 1998 is as follows:
<TABLE>
<S>         <C>     <C>        <C>     <C>      <C>      <C>
Expiry       Exerci Outstandi   Grante  Exercis  Expire/ Outstandi
Date             se        ng        d       ed  cancele        ng
              price December,                          d December,
                         1997                                 1998
June 5,       $6.75    26,000        -        -  (26,000  -
1998                                                   )
July 23,       2.93     4,444        -        -  (4,444)         -
1998
Upon         0.0045   333,333                    (333,33         -
terminatio                                            3)
n of
management
service
contracts
Earlier of     2.93     4,444        -        -        -     4,444
December
18, 1998
or
terminatio
n of
management
service
contract
June 20,              434,888        -        -  (430,44     4,444
2002                                                  4)
</TABLE>

(c) Non-cash consideration:

Shares  issued  for non-cash consideration are  valued  at  their
market price at the date of agreement for issuance.
ELECTRONIC IDENTIFICATION, INC.
(Formerly RFID Systems Corp.)
(A Development Stage Enterprise)
Notes to Financial Statements, page 7
(Expressed in U.S. Dollars)
Years ended December 31, 1999, 1998 and 1997

10. Common stock (continued):

(d) Stock options:

The  Company  has reserved 3,200,000 common stock pursuant  to  a
stock  option  plan.  Options to purchase  common  stock  of  the
Company  may  be  granted  by the Board  of  Directors  and  vest
immediately.

Stock  option activity during the year ended December 31,1999  is
as follows:
<TABLE>
<S>         <C>     <C>      <C>     <C>      <C>    <C>     <C>
Expiry      Weight  Weighte   Outsta  Granted  Exerc  Expir   Outstan
Date            ed        d    nding            ised     e/      ding
            averag  average   Decemb                  cance   Decembe
                 e     fair      er,                    led   r, 1999
            exerci    value     1998
                se
             price
February     $0.45    $0.25        -  3,125,0      -      -   3,1
24, 2002                                   00                 25,
                                                              000
</TABLE>

There was no stock option activity during the year ended December
31, 1998. As options granted in 1999 have an exercise price equal
to  the  market  price  at  the  date  of  grant,  there  was  no
compensation  expense  recorded for employees  and  directors  in
1999.

The  weighted average fair value of options was calculated  using
the Black-Scholes option pricing formula.

Had  the  compensation benefit been determined based on the  fair
value  at  the  grant dates of the stock options and  charged  to
earnings  consistent with the measurement provision of  FAS  123,
the impact would be as follows:
<TABLE>
<S>                <C>         <C>        <C>         <C>
                   Year ended  Year ended Year ended       Period
                     December    December   December         from
                     31, 1999    31, 1998   31, 1997    inception
                                                       on May 14,
                                                          1992 to
                                                         December
                                                         31, 1999
Loss for the       $(3,051,19  $(3,082,86 $(3,521,95   $(10,994,6
period, as                 5)          4)         6)          60)
reported
Estimated fair      (292,743)           -          -    (292,743)
value of option
grants to
employees
Pro forma loss     $(3,343,93  $(3,082,86 $(3,521,95   $(11,287,4
                           8)          4)          6          03)
Loss per share        $(0.24)     $(0.67)     $(1.81
</TABLE>

The  fair  value  of the stock option grants have been  estimated
using  the  Black-Scholes Option-Pricing model with the following
assumptions:  dividend  yield  -  0%;  risk-free  interest  rate-
5.875%,  expected  option life - 3 years, expected  volatility  -
80%.
ELECTRONIC IDENTIFICATION, INC.
(Formerly RFID Systems Corp.)
(A Development Stage Enterprise)
Notes to Financial Statements, page 8
(Expressed in U.S. Dollars)
Years ended December 31, 1999, 1998 and 1997

11. Contingencies:

The Company has determined that it is not possible, at this time,
to   predict   the   final  outcome  of   the   following   legal
contingencies.  The  Company has accrued  its  best  estimate  of
potential  damages that may be awarded pursuant  to  these  legal
contingencies. Any adjustment to that amount will be recorded  in
the period determinable.

(a) Chemoco NV ("Chemoco"):

During  1997,  the  Company contracted with  Chemoco  to  provide
services to the Company. As advance consideration of the services
to  be  provided by Chemoco, individuals related to  the  Company
transferred 155,556 common stock of the Company to Chemoco. It is
the Company's belief that Chemoco did not fulfill its obligations
for the services to be provided and as a result, the transfer  of
common  stock from individuals related to the Company to  Chemoco
was  canceled. On September 15, 1999, Chemoco commenced an action
against  the Company and a former officer of the Company claiming
for  the  delivery of 700,000 shares of the Company,  or  in  the
alternative,  damages  for the Company not  delivering  the  said
shares to the Plaintiff. Since the commencement of the action and
the  filing  of  the Statement of Defense in November  1999,  the
solicitors for the Plaintiff have filed a Notice of Intention  to
withdraw as solicitors in this matter. The outcome of this  claim
is  unknown.  It is management's belief that any claim  that  may
arise from this situation is without merit.

(b) Former director claim:

On  June 29, 1999, a former director of the Company commenced  an
action   against  the  Company  claiming,  inter  alia,   for   a
declaration  that  he  was entitled to 100,000  warrants  of  the
Company exercisable at $0.375 per share and a further declaration
that he was entitled to 600,000 warrants exercisable at $0.25 per
share.  The  warrant  agreement  was  originally  issued  to  the
Director  to protect him against any potential claims.  When  the
director  left the Company, the Board of Directors  canceled  the
warrant agreement for this director and all other directors.  The
claim  also includes damages for breach of contract and  interest
with costs. The Company has filed a defense denying any claims of
the  former director in and to the warrants alleged. To date,  no
further activity has been commenced and the outcome is unknown.

(c) Other cancelled agreements:

In 1996, the Company cancelled agreements with two third parties.
To date, no litigation has been commenced or threatened regarding
these cancelled agreements. It is the opinion of management  that
the  termination of these agreements was warranted  and,  in  the
event of litigation, would be deemed to be warranted. Further, it
is  management's belief that any claim that may arise from  these
situations are without merit.
ELECTRONIC IDENTIFICATION, INC.
(Formerly RFID Systems Corp.)
(A Development Stage Enterprise)
Notes to Financial Statements, page 9
(Expressed in U.S. Dollars)
Years ended December 31, 1999, 1998 and 1997

12. Income taxes:

The   Company   has   non-capital  losses  carried   forward   of
approximately $8,500,000 which may be deducted in the calculation
of  taxable  income  of  future periods  until  their  expiry  to
December 31, 2006.

Due  to  the  uncertainty as to the utilization of  deferred  tax
assets, a valuation allowance has been

made to the extent of deferred tax assets at the year end.

Years ended December 31,
<TABLE>
<S>                          <C>        <C>
                                   1999       1998
Deferred tax assets:
Losses carried forward                $          $
                              3,500,000  3,000,000
Evaluation allowance at 100%  (3,500,00  (3,000,00
                                     0)         0)
Net deferred tax asset              $ -        $ -
Current income tax expense          $ -        $ -
Deferred tax expense                $ -        $ -
</TABLE>

13. Fair value of financial instruments:

At December 31, 1999, the Company's financial instruments include
cash,   accounts  receivable,  due  from  stockholders,  accounts
payable  and accrued liabilities, due to stockholders,  directors
and  officers. Due to their short-term to maturity or ability for
prompt   liquidation,  the  carrying  values  of  cash,  accounts
receivable, accounts payable and accrued liabilities approximates
their   fair  value.  The  fair  value  of  due  to  (due   from)
stockholders, directors and officers cannot be determined due  to
their related party nature (note 9(a)). Due to the nature of  the
relationship between the Company and the related parties and  the
lack  of a ready market for such indebtedness, it is not possible
to  estimate  the  current fair value of this  indebtedness.  The
Company   has  not  entered  into  off-balance  sheet  derivative
instruments.

14. Interest on long-term debt:

Interest  on  long-term debt includes $474,117 (1998 -  $175,653;
1997  - $316,000) of amortization of the effective premium  equal
to the intrinsic value calculated based on the difference between
the  quoted  market price and the conversion price on conversions
of debt.
ELECTRONIC IDENTIFICATION, INC.
(Formerly RFID Systems Corp.)
(A Development Stage Enterprise)
Notes to Financial Statements, page 10
(Expressed in U.S. Dollars)
Years ended December 31, 1999, 1998 and 1997

15. Year 2000 Issue:

The  Year 2000 Issue arises because many computerized systems use
two  digits  rather than four to identify a year.  Date-sensitive
systems  may recognize the year 2000 as 1900 or some other  date,
resulting  in  errors when information using year 2000  dates  is
processed.  In  addition,  similar problems  may  arise  in  some
systems  which  use certain dates in 1999 to represent  something
other  than a date. Although the change in date has occurred,  it
is  not  possible to conclude that all aspects of the  Year  2000
Issue  that  may  affect the entity, including those  related  to
customers,  suppliers, or other third parties,  have  been  fully
resolved.

16. Subsequent events:

(a) Subsequent to year end, 366,667 shares of common stock of the
Company were issued on settlement of $276,000 of amounts due to a
stockholder.

(b)   On   March  1,  2000,  the  Company  acquired,  through   a
reorganization  agreement, Girne Acquisition Corp.  ("Girne"),  a
corporation organized and existing under the laws of the State of
Delaware.  At  that  date, Girne was an inactive  shell  company.
Under  the  terms and conditions of the reorganization agreement,
each  issued and outstanding share of common stock of  Girne  was
exchanged  pro  rata for an aggregate of 1,000 shares  of  voting
common  stock of the Company at $0.001 par value per  share.  The
Company issued 300,000 shares of common stock for the acquisition
of  Girne, consisting of 150,000 common shares at a deemed  value
of  $2.9375 per share and converting $150,000 of cash payable  to
the  shareholders of Girne at a deemed value of $1.00  per  share
into  150,000  shares  of common stock. For accounting  purposes,
this transaction will be accounted for as a re-capitalization, as
if  the  Company  had issued common shares for the  net  monetary
assets  of  Girne. Pursuant to the reorganization agreement,  the
Company is the surviving corporation and will continue under  its
present name as a corporation in the State of Nevada.
ELECTRONIC IDENTIFICATION, INC.
(Formerly RFID Systems Corp.)
(A Development Stage Enterprise)
Schedules of General and Administrative, Sales and Marketing,
and Research and Development Expenses
(Expressed in U.S. Dollars)
Period from
inception on
May 14, 1992 to

<TABLE>
<S>                      <C>       <C>       <C>      <C>
                              Year     Year      Year      Year
                             ended    ended     ended     ended
                          December  Decembe   Decembe  December
                          31, 1999    r 31,     r 31,  31, 1999
                                       1998      1997
General and
administrative:
Administrative fees       $ 22,215        $       $ -  $ 46,452
                                     24,237
Bad debts                        -        -    54,515    75,778
Bank charges and             1,348    1,949    41,193    45,288
interest
Consulting and contract    731,799  367,759         -  1,119,55
services                                                      9
Legal and professional     150,909  176,286   408,551   765,100
Office                      23,647   66,604     9,113   135,130
Rent                        10,098   52,758    44,559   123,480
Salaries and benefits            -   72,975   424,593   766,458
Stock administration        13,495   11,829     1,613    26,937
Telephone                    2,772    9,518    25,504    51,373
Travel and                   2,558   17,470   132,570   280,333
accommodation
Foreign exchange (gain)   (36,744)   87,472    35,543    86,271
loss
                         $ 922,097        $         $         $
                                    888,857   1,177,7  3,522,15
                                                   54         9
Sales and marketing:
Advertising                    $ -      $ -         $  $ 16,749
                                               16,749
Consulting and contract    123,561  402,477   443,324   979,423
services
Entertainment and           19,190   84,575    24,077   140,188
promotion
Investor relations          99,618  245,107    36,987   381,712
Office                       4,080   15,685    43,076    77,982
Rent                             -   94,230    31,438   137,318
Salaries and benefits        2,287  109,502   145,121   291,341
Telephone and Internet       2,772   16,528         -    19,300
Travel and                  52,367   38,585   240,368   337,903
accommodation
                         $ 303,875        $         $         $
                                    1,006,6   981,140  2,381,91
                                         89                   6
Research and
development:
Acquired in-process
research and
development                    $ -      $ -       $ -         $
                                                        340,108
Consulting and contract     53,013  142,505         -   195,518
services
Office                           -    7,437    91,832   101,142
Salaries and benefits            -   94,883   506,601   727,739
Supplies                         -    6,004   144,794   182,817
Travel and                   2,980   15,860    13,632    50,244
accommodation
                          $ 55,993        $         $         $
                                    266,689   756,859  1,597,56
                                                              8
</TABLE>


  c)   Financial Data Schedule



                           SIGNATURES

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



                           Electronic Identification, Inc.



                           By: /s/ Terry Kirby
                              Terry Kirby, President