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

                                   FORM 10-K/A

                               AMENDMENT No. 1 to

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

                    For the fiscal year ended: June 30, 2004
                                       OR
[ ]      TRANSITION  REPORT  PURSUANT  TO SECTION 13 OR 15(D)OF  THE  SECURITIES
         EXCHANGE ACT OF 1934

        For the transition period from ______________ to ________________

                           Commission File No. 0-28541

                           QUINTEK TECHNOLOGIES, INC.
                 ----------------------------------------------
                 (Name of Small Business Issuer in its charter)

        California                                            77-0505346
---------------------------------                          --------------------
(State or other jurisdiction                               (I.R.S. Employer
of incorporation or organization)                         Identification No.)
                               17951 Lyons Circle
                           Huntington Beach, CA 92647
                    ----------------------------------------
                    (Address of principal executive offices)

                     Issuer's telephone number: 714-848-7741

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

           Securities registered pursuant to Section 12(g) of the Act:
                           Common stock, no par value

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

Check if there is no disclosure of delinquent  filers in response to Item 405 of
Regulation S-B is not contained herein,  and will not be contained,  to the best
or  registrant's  knowledge,  in  definitive  proxy  or  information  statements
incorporated  by reference  in Part III of this Form 10-KSB or any  amendment to
this Form l0-KSB. [ ]

Issuer's revenues for its most recent fiscal year: $298,653.

At September 29, 2004, the aggregate  market value of registrant's  Common Stock
held by  non-affiliates  was $13,560,766 based on the closing OTC Bulletin Board
bid price of $0.19 per share on that date.

At September 29, 2004, a total of 71,372,454 shares of registrant's Common Stock
were outstanding.


<PAGE>


This Amendment No.1 to Form 10-KSB/A is filed to include an audit report for the
Company's financial statements as to yearend 2003 in Part II, Item 7 - Financial
Statements,  of the Company's  original filing on Form 10-KSB for the year ended
June 30,  2004,  initially  filed  with the SEC on  October  1, 2005 and on Form
10-KSB/A filed with the SEC on October 13, 2005. In accordance with the rules of
the Securities and Exchange  Commission,  Item 7 is being filed in its entirety.
In  addition,  Item 13 of Part  III has  been  amended  to  currently  date  the
certifications of the Company's Chief Executive Officer, Chief Operating Officer
and  Chief  Financial  Officer,  as  required  by  Sections  302  and 906 of the
Sarbanes-Oxley  Act of 2002. The certifications of the Company's Chief Executive
Officer and Chief  Financial  Officer are  attached to this  Amendment  No. 1 as
exhibits 31.1 and 31.2, and 32.1 and 32.2, respectively.



                                TABLE OF CONTENTS

ITEM 1      BUSINESS DESCRIPTION
ITEM 2      DESCRIPTION OF PROPERTY
ITEM 3      LEGAL PROCEEDINGS
ITEM 4      SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
ITEM 5      MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
                     5.1   Market for Common Stock
                     5.2   Dividends
                     5.3   Securities Authorized for Issuance Under Equity
                               Compensation Plans
                     5.4   Recent Sales of Unregistered Securities
ITEM 6      MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
              AND RESULTS OF OPERATIONS
ITEM 7      FINANCIAL STATEMENTS
ITEM 8      CHANGE IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
              FINANCIAL DISCLOSURE
ITEM 8A     CONTROLS AND PROCEDURES
ITEM 8B     OTHER INFORMATION
ITEM 9      DIRECTORS, EXECUTIVE OFFICERS, AND CONTROL PERSONS;
              COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
                     9.1   Board of Directors and Executive Officers
                     9.2   Compensation of Directors
                     9.3   Management Committees
                     9.4   Section 16(a) Beneficial Ownership Reporting
                             Compliance
                     9.5   Code of Ethics
ITEM 10     EXECUTIVE COMPENSATION
ITEM 11     SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
ITEM 12     CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
ITEM 13     EXHIBITS
ITEM 14     PRINCIPAL ACCOUNTANT FEES AND SERVICES
SIGNATURES
FINANCIAL STATEMENTS
EXHIBITS

<PAGE>

INTRODUCTION

This amendment No. 1 to Quintek  Technologies,  Inc.  annual report on Form 10-K
for the fiscal year ended June 30, 2004 is being refilled in its entirety to add
material  contracts  that were omitted,  to include  required  detail on matters
voted on by security holders and to correct other clerical issues.

ITEM 1 BUSINESS DESCRIPTION

Forward-Looking Statements

This  annual  report  contains  certain  forward-looking  statements  within the
meaning of section  21 of the  Securities  Act of 1934,  as  amended,  including
statements   that  indicate  what  the  Company   "believes,"   "expects,"   and
"anticipates" or similar expressions. These statements involve known and unknown
risks,   uncertainties  and  other  factors  which  may  cause  actual  results,
performance  or  achievements  of the  Company to differ  materially  from those
expressed or implied by such forward-looking  statements.  Readers are cautioned
not to place undue  reliance on these forward  looking  statements,  which speak
only as of the date of this annual  report.  There can be no assurance  that the
forward looking information contained herein will in fact transpire. The Company
undertakes  no  obligation  to  publicly  update or revise any  forward  looking
statements, whether as a result of new information, future events, or otherwise.

Introduction

Quintek  Technologies,  Inc.  (referred to herein as the  "Company",  "Quintek",
"Our", or "We") is a California  corporation.  Quintek's corporate  headquarters
are located at 17951 Lyons Circle, California, 92647. Our contact information at
that location is: phone number (714) 848-7741, fax number (714) 848-7701 and our
website is  www.quintek.com.  Our  corporate  filings  with the  Securities  and
Exchange  Commission  ("SEC")and  amendments to these filings,  as well as other
information  is available  free of charge at our website soon after such reports
are filed electronically with the SEC, or directly on the SEC's website.

Quintek  Electronics,  Inc.,  our  predecessor  company,  founded  in July 1991,
acquired  technology,  related  assets and patent  rights to its  aperture  card
business during 1991 and 1992. On January 14, 1999,  Quintek  Electronics,  Inc.
was acquired in a merger by Pacific  Diagnostics  Technologies,  Inc. as part of
their Chapter 11 Plan of  Reorganization,  and the  surviving  entity's name was
changed to Quintek  Technologies,  Inc. Since the merger,  Quintek  continued to
sell its aperture card products and all former operations of Pacific Diagnostics
Technologies,  Inc. were discontinued.  On February 24, 2000, we acquired all of
the out  standing  shares of common  stock of  Juniper  Acquisition  Corporation
("Juniper").  Upon effectiveness of that acquisition,  Quintek elected to become
the successor  issuer to Juniper for  reporting  purposes  under the  Securities
Exchange Act of 1934.

Business Overview

Quintek Technologies,  Inc. has been a manufacturer of hardware and software and
a service  provider to the corporate and public sector  markets since 1991.  The
Company's new division,  Quintek Services,  Inc. (QSI) delivers Business Process
Outsourcing (BPO) services and Information  Lifecycle Management (ILM) solutions
to document intensive industries such as healthcare and financial services.  The
solutions and services the Company  provides enable  organizations to secure and
manage their information and document business processes more efficiently.

QSI provides Business Process Outsourcing (BPO) services to Fortune 500, Russell
2000 companies and public sector organizations.  Our BPO services range from the
digitizing,   indexing  and  uploading  of  source   documents   through  simple
customer-specific, rules-based decision making.

                                        1
<PAGE>

Quintek  Technologies,  Inc, sells hardware,  software and services for printing
large format  drawings such as blueprints and CAD files  (Computer Aided Design)
directly  to the  microfilm  format  of  aperture  cards.  Quintek  is the  only
manufacturer of a patented  chemical-free desktop microfilm printer for aperture
cards.

Recent Business Developments

On February 17, 2004,  we announced our  Cradle-to-Grave  Strategy for providing
customer solutions at each stage of the Information  Lifecycle from the creation
of documents through archival. On March 16, 2004, we announced that as our first
step in executing  this plan, we hired Bob Brownell as President.  Mr.  Brownell
has more than twenty-five  years  experience in selling and delivering  document
management  solutions.  On March 30, 2004, we announced  hiring Chris de Lapp as
Senior  Sales  Executive.  In five years with ACS,  Mr. de Lapp  averaged  $2.75
million a year in sales,  consistently  exceeding his sales quote.  On April 21,
2004,  we  announced  that we would be entering the rapidly  expanding  Business
Process  Outsourcing (BPO) market through our new Quintek  Services,  Inc. (QSI)
division. In June, we announced that FedEx Kinko's has selected Quintek as their
scanning  partner  of choice  for  their  Western  Region.  On August 5, 2004 we
announced that a London  Investment  Company  purchased $2.38 million in Quintek
stock.  On August 10, 2004 we announced a $3.3 Million  Funding  Agreement  with
Golden Gate Investors.

The growth  plans for the  Company  are  focused on its new QSI  division.  This
report will use Quintek and QSI interchangeably. The status of the Chemical-Free
Microfilm business is discussed in a section by that name.

Strategy

As companies  look to outsource to overseas BPO (Business  Process  Outsourcing)
providers they encounter three problems that Quintek solves.  First, finding the
right BPO  partner is  difficult  because few  overseas  BPO  providers  have an
extensive U.S.  sales  presence.  Second,  many  processes  require  Information
Technology integration and document scanning to be done domestically in order to
be performed  overseas.  Lastly,  in the  investigative  process they often find
reasons portions of the process to be outsourced must be done on-site, nearby or
within the United States.

Quintek's  core  competencies  are  executive  level sales skill,  BPO (Business
Process Outsourcing) project management expertise,  specialization in performing
high-speed,  high-quality  document scanning and  relationships  with all of the
partners necessary to deliver a complete solution on and off shore.

Management experience has shown that to sell and deliver a complete BPO solution
to a customer,  a company must engage a partner or multiple partners during some
part of the  process  of  delivering  the  service.  Management  has found  that
profitability in the BPO business comes from specialization. Management believes
that the  larger  companies  that  attempt  to  provide  all  aspects of the BPO
solution  internally  can not compete  with  Companies  like  Quintek that offer
multi-vendor  solutions.  Just like Information Technology hardware and software
became unbundled into multi-vendor solutions in the 1980's and 1990's, the trend
in outsourcing is towards multi-vendor  solutions.  Quintek has established true
partnerships with industry leaders,  where we provide important pieces that they
do not provide and vice versa, with revenue sharing going both ways.

Quintek will grow rapidly through  mutually  beneficial  business  relationships
with large  organizations that provide a complementary piece of the BPO solution
but also  require the pieces that  Quintek  provides.  The scope of work for BPO
(Business  Process  Outsourcing)  contracts  ranges from basic scanning and data
entry (Level One BPO) to outsourcing an entire department (Level Five BPO).


                                        2
<PAGE>

Quintek  focuses  on Level One and  Level  Two.  Level Two BPO is higher  margin
business  than Level One because it  requires  workers  trained in the  specific
vertical  who are able to  interpret  data.  Level Two BPO is more  complex data
entry from  multi-page  forms.  We plan to build an  account  and  revenue  base
through  performing Level One BPO services  domestically and reselling Level Two
BPO services from offshore providers.

Our business  plan  requires us to hire and retain  talented  staff.  Management
believes that its Incentive  Stock Option plan for  salespeople and its Operator
Incentive Plan (OIP) for  production  people have been and will continue to be a
powerful tool for hiring and retaining staff. Many of Quintek's  competitors are
not growth stage companies.  Quintek employees  understand how their efforts can
translate directly into increased shareholder value.

Market Trends

Overall BPO Market

Goldman  Sachs  estimates  the BPO market at  potentially  $ 175-210  billion in
annual  revenue  and  growing  at a CAGR of  roughly  20%,  more than  twice the
projected rate for IT spending.

According to an August 2003,  Forrester  Research report, the US BPO market will
expand to $146 billion in 2008.  The report  states that "BPO is the first stage
in the  evolution  of  process-centric  IT." The trend is  towards  corporations
spending  more of their IT budgets on services.  This  provides  dramatic  costs
savings. Rather than companies purchasing hardware, software and labor, they can
pay a BPO vendor like Quintek by the claim or by the loan document.  In this way
they do not carry the cost of infrastructure during unneeded periods.

We expect new  companies  to take  significant  roots in this space,  apart from
established players. Exult and Xchanging are two relatively recent examples.

BPO is the delegation, by the customer, of the operational  responsibility for a
business process's execution and performance within the customer's  environment.
It is the  recognition  that process  improvement,  not IT  technology,  has the
greatest potential for contribution and that, like IT, depending on the process,
that knowledge may not be available internally.

Some of the  processes  are  critical,  others are not and some of the  critical
processes are IT-leverageable, and others are not.

In today's highly  competitive,  unpredictable  and  fast-changing  marketplace,
organizations  are  challenged  with  improving   productivity  and  operational
efficiency with  ever-shrinking  budgets.  Many executives find that running the
enterprise  consumes the bulk of their energy.  They lack the time and resources
to manage non-core, resource-intensive functions properly.

As a result,  many  organizations  are pursuing a Business  Process  Outsourcing
(BPO) strategy that manages these  non-strategic  business  processes.  With the
right partner,  BPO delivers  dramatic business value,  significant  competitive
advantage--and  peace  of mind.  Outsourcing  operations  provides  substantial,
measurable benefits right away.

Organizations  that take  advantage of BPO solutions  thrive today,  even amidst
market  instability  and  ever-changing  conditions.  Allowing BPO  suppliers to
manage these non-strategic  operations  provides superior  flexibility and makes
organizations better able to respond to new and existing business opportunities.
Among the benefits of a BPO strategy is the ability of the organization to focus
on its core  competencies--initiatives  that  bring in  revenue  and  facilitate
profitable growth.

                                        3
<PAGE>

The scope of work for BPO (Business Process  Outsourcing)  contracts ranges from
basic data entry (Level One BPO) to outsourcing an entire department (Level Five
BPO).  Quintek  focuses on Level Two and Level Three.  Level Three BPO is higher
margin business  because it requires  complex data capture from multi-page forms
done by operators trained in the vertical who are able to analyze data.

BENEFITS OF BUSINESS PROCESS OUTSOURCING

         o    Reduce costs--BPO provides  quantifiable benefits through improved
              efficiencies,   lower   overhead,   reduced  payroll  and  benefit
              expenses, and fewer capital investments.

         o    Improve   productivity   and  operational   efficiencies--Non-core
              business  processes,  such as  human  resources  and  finance  and
              accounting,    are   critical,   but   also    resource-intensive,
              time-consuming,   and  costly.  Outsourcing  improves  operational
              efficiencies and drastically reduces costs without large, up-front
              capital investments.

         o    Allow  organizations to focus on their core  business--BPO  allows
              organizations  to move non-core  business  processes to a services
              provider so that they may focus on the more  important  strategic,
              revenue-generating  programs  that  create  profitable  growth and
              sustain business success.

         o    Ensure best practices, skills, and technology--BPO provides access
              to proprietary workflow systems, process reengineering skills, and
              innovative staffing and delivery models, combined with world-class
              technology delivered by experts.

         o    Provide access to scalable operations and on-demand resources--BPO
              provides  the  flexibility  to  respond  to  a  rapidly   changing
              marketplace and scale operations up or down as conditions dictate.
              In a BPO  engagement,  the BPO partner  delivers  access to global
              staff, processes, resources, and technology--wherever and whenever
              they are needed.

         o    Strengthen  clients'   competitive   position--Organizations   can
              leverage a BPO strategy to improve their financial and competitive
              positions  and  differentiate  themselves  from  competitors.  BPO
              results  in  increased  customer   satisfaction,   more  efficient
              operations,  access to global  capabilities,  increased cash flow,
              and faster time-to-market.

As an example, Jack Welch, past Chairman & CEO of General Electric who delivered
26 consecutive  quarters of profitability,  said, "70% of our business processes
should be outsourced, 70% of which should be offshore, 70% of which should be to
India."

Document Management and Imaging Market

In his book,  "Business  @ The Speed of  Thought,"  Bill Gates  writes,  "...the
paperless office,  like artificial  intelligence,  is one of those 'any day now'
phenomena that somehow never seem to actually  arrive...  paper  consumption has
continued  to double  every four  years,  and 95% of all  information  in the US
remains on paper,  compared  with just 1% stored  electronically.  Paperwork  is
increasing faster than digital technology can eliminate it."

According  to a report  released  last week by  research  firm IDC,  the  global
document  management and imaging  outsourcing market reached $13 billion in 2003
and is  expected  to expand at a compound  annual  growth rate of 19.7% over the
next three years.

                                        4
<PAGE>

The rapid growth of the document management market has been largely unnoticed by
industry  watchers  because it is manifested very  differently  from industry to
industry,  IDC noted.  While some  industries are simply  shifting their efforts
from  paper to  electronic  media in order to save  money,  others,  such as the
health  care  industry  as  part  of  its  Health   Insurance   Portability  and
Accountability  Act  requirements,  are  attempting  to implement  cross-company
document management standards and technologies.

"Growth  in this  market  is being  fueled  by the rapid  adoption  of  imaging,
document,  and  content  technologies  overall,  user  demand for easy access to
documents,  as well as the  evolving  need for imaging and  document  management
within  particular   vertical  segments,"  said  Ron  Glaz,  director  of  IDC's
digital-imaging  solutions and services. "In fact, survey participants indicated
that the most important  factors in choosing an imaging and document  management
outsourcing  vendor  is  their  track  record  and  specific  vertical  industry
expertise."

Because  most BPO  processes  start by  capturing  data and  organizing  it into
digital formats,  the need for service provider support has exploded.  Companies
wanting  to bring  unstructured  data on line have been  faced  with the task of
converting  this  information  into  electronic  form.   Unstructured   data  is
considered any media in paper,  film,  fiche or other forms that are not readily
available to the knowledge worker.

Companies electing to image capture their paper documents are turning to service
providers as a source of digitizing this information.  Outsourcing this business
to service  providers has proven less  expensive  than hiring  permanent  staff.
Temporary  employees have proven ineffective since conversions are not generally
done all at once.  Companies  attempting to purchase all the necessary equipment
to do their work in-house cannot keep up with the changing technologies.

Vertical Markets

Quintek is targeting three vertical  markets:  Mortgage  Processing,  Healthcare
Claims Processing and Accounts Payable processing.

Home Mortgage Processing

In 2002 mortgage  originators  funded $2.787  trillion in loans,  in 2003,  they
funded  $3,810  trillion  in  loans  and,  according  to the  mortgage  banker's
Association,  they  forecast  that  $2,597  trillion  will be funded in 2004 and
$1.823  trillion  in  2005.   Management  believes  that  2004  may  beat  these
projections  due to the fact that $890 billion  funded in the second  quarter of
2004.

Sales of new mortgages and  refinancings  have been driven by  historically  low
interest rates.

Mortgage  transactions are paper intensive.  Portfolios of mortgages are traded.
Almost  every  financial   services   company  that  generates   consumer  loans
(mortgages,  auto,  and  credit  cards)  needs to be able to share and  exchange
documents  electronically  with outside  entities when they are selling the loan
asset to another  organization.  Portfolios  of mortgages are rated A through C.
This rating in  significantly  influenced by the quality of the title documents,
HUD forms,  ESCROW  documents and other closing  documents  associated  with the
initial  transaction  between  the home  buyer and the  original  lender.  These
documents  need to pass  efficiently  between  hundreds  of people in and out of
these financial institutions.

                                        5
<PAGE>
Home mortgage  companies'  primary  business is the origination of new loans and
refinancings.  They are not in the information technology or document management
business.  They make money by charging  transaction  related fees and completing
these  transactions  quickly and efficiently  with the lowest possible sales and
marketing costs.  Mortgage companies outsource their document processing for two
primary reasons. Both sides of the transaction would like to eliminate the costs
associated  with  copying and  shipping  paper  documents,  and reduce the risks
associated  with  exposure to market  fluctuations.  There is a critical need to
minimize the amount of time it takes to complete loan sale transfer  activities.
Additionally,  they  outsource  this document  processing to experts in document
imaging so that the portfolios  have the highest  possible value as based on the
legibility of the documentation.

Management  believes  that Quintek is  positioned  to grow in this sector as the
mortgage  industry slows down. In the event that growth  contracts,  this allows
finance companies to address their documentation backlog, which results in sales
to Quintek. Additionally,  once finance companies have to plan on slower growth,
they must also  concentrate on lowering costs and outsourcing can become an even
higher priority.

Healthcare Claims Processing

The  overall  healthcare  market  drives more than $1.4  trillion is sales.  The
healthcare market is made up of doctors, hospitals,  insurance companies, HMO's,
equipment suppliers and service providers. Money flows between doctors, hospital
and  insurance  companies  based on the  acceptance  or rejection of  individual
health care claims.

A new IDC study  released  on May 25,  2004 shows that U.S.  spending  on claims
process  outsourcing  services totaled $10.1 billion in 2003, a 6.8% growth over
2002.  IDC projects  that the market  (comprised of the  commercial  healthcare,
government healthcare,  and insurance industries) will increase to $15.7 billion
in 2008, with a five year compound annual growth rate (CAGR) of 9.1%.

"Despite  being  a  relatively  mature  market,  new  growth  opportunities  are
beginning to emerge in the claims process outsourcing  market.  Early movers are
beginning to apply more strategic objectives to outsourcing, and this in turn is
helping to drag the claims process  outsourcing  industry forward,  slowly,  but
surely," said Romala Ravi, program manager, BPO Services.

IDC research  indicates  that claims  process  outsourcing,  though  mature as a
concept, is a relatively  underpenetrated  market.  Companies looking to play in
this market should set realistic  expectations about market demand and adoption,
meet demand where it currently  exists,  grab low-hanging fruit and use these as
building  blocks  towards  more  comprehensive  engagements,  and prepare  their
pursuit  teams to speak to and  demonstrate  both  the  tactical  and  strategic
benefits of outsourcing.

The two major issues in the heavily  regulated health claim industry are service
and costs.  The health  insurance  industry is required by law to service  their
customers.  Claims  must be paid or denied  within  regulated  timeframes.  When
claims are not  processed  within those time  limits,  expensive  penalties  are
invoked.  Service  timelines are  adversely  impacted  when  additional  medical
records are required.  Claim files are pended until requested  documents arrive;
and documents must be manually matched to the existing file.  Complex claims are
more  likely to be  misplaced  because  they must be  routed to  medical  review
specialists,  and quality control.  As files are sent from one department to the
next,  it is more  difficult  to meet  service  standards,  and  keep  track  of
processing  timeframes.  Paper files  compound  service  inefficiencies  because
documents and files are lost or delayed in routing. Claims service is expensive.
When information  isn't available to insureds and providers,  it causes repeated
phone  calls,   re-submission  of  claims,  and  additional  work.  The  service
inefficiencies  inherent to paper files generate costs and expensive  regulatory
penalties.
                                        6
<PAGE>
Accounts Payable Processing

Most  large  companies  can  save  money be  contracting  Quintek  to  outsource
back-office  functions such as processing their accounts payable.  In processing
and paying invoices,  the focus is on quickly  approving  payments by extracting
data from scanned documents and loading into global,  enterprise-wide  databases
to support decision making such as paying or declining an invoice.

Customers  often  install and  maintain  their own Payment  Processing  Workflow
software  to review,  pay or decline  invoices.  In order to review and  process
invoices with such  software,  the data on the paper invoices has to be scanned,
captured  and loaded into the  client's  database or  web-based  ASP provided by
Quintek. Customers outsource this scanning, capturing and loading to Quintek.

Offshore partnerships

To provide Customers with compelling pricing and quality, Quintek electronically
delivers  work  off-shore  to India where it is  processed  and  returned to the
United States electronically. India is rapidly becoming a leading world supplier
of Business Process  Outsourcing  (BPO) and data conversion  services.  With the
India BPO market growing at a compounded  annual growth rate (CAGR) of more than
25  percent,  many  companies  based in the  United  States are  leveraging  the
compelling advantages of cost, quality and cycle time found in India.

Sales Plan

Overview

Quintek expects to achieve rapid growth by simultaneously  establishing customer
relationships  directly as well as with  national  sales  partners,  large prime
contractors and vertical-specific solution\brokers.  Quintek expects to continue
to increase  revenues  through  organic  growth,  and by quickly  establishing a
national  sales foothold  using our  compelling  incentive  stock option plan to
attract top sales  talent.  Quintek  expects to continue to  expanding to a full
national  sales  staff  of  thirty-five   salespeople,   and  through  strategic
acquisitions.  Quintek  expects to support  rapid  growth  through two  internal
processes,  the Quintek  business unit template  procedure and the EIP (Employee
Incentive Plan).

Service Offerings

High Speed Scanning at Client Site or QSI Production Center

Fortune 500  companies  and other large  organizations  manage  documents  using
Enterprise  Content  Management  (ECM)  systems  such as OnBase,  Documentum  or
FileNet. These are very large multi-user databases with a web browser interfaces
that allow people all over the world to access and interact with  document-based
content in an organized  manner  twenty-four  hours a day and seven days a week.
For example,  a large financial  services  company might have an ECM system that
can support a world-wide staff of 12,000 employees who need to access 30,000,000
pages of data in Adobe .pdf format.

The  scope of work for a High  Speed  Scanning  contract  will  usually  include
Quintek  receiving paper documents and delivering these documents  directly into
the  customer's  Enterprise  Content  Management  (ECM) system.  Scanning is the
process of converting a paper  document into a digital image saved in electronic
format  such as a TIFF or PDF file.  High-end  scanners  are similar to high-end
copiers with sheet feeders,  but they output  electronic  files, not more paper.
Quintek  must  provide  the  ground   transportation  and  secure  facility  for
processing  the documents,  the trained staff for processing the documents,  the
expertise  to  index,  scan and  categorize  the  documents,  the  expertise  to
re-assemble  the original  documents in the format and order they were delivered
and the expertise to upload the  documents and the indexing into the  customer's
ECM system.  This often has to be done in less than 24 hours from receipt of the
document.
                                        7
<PAGE>

In its current  configuration,  Quintek's  Huntington Beach facility can convert
60,000 images in an eight hour shift and 2,400,000 per month running two shifts.
This would  result in  approximately  $120,000 a month in  billings  and a gross
profit at $0.05 an image of $48,000. Upon subsequent financing,  with additional
equipment and  reconfiguration,  this facility has the  capability of processing
600,000  images in an eight hour  shift.  Running  two shifts at  capacity,  the
facility could process 13,200,000 documents a month.

Domestic/Offshore Data Entry, OCR, and Indexing

Quintek  uses manual and OCR (Optical  Character  Recognition)  technologies  to
create indexing for converted digital images.  Indexing of documents facilitates
a more efficient  means of retrieving  critical  documents and  information  for
future use.

Quintek has ensured higher Quality  Assurance  (QA)  standards,  by utilizing an
"Enter - Enter - Compare" process,  whereby two separate operators independently
index the same  document,  then compare  results  using  automated  systems.  If
discrepancies are found between the two separate operator versions, the batch is
immediately  rejected and routed to a senior project  manager for rework..  This
six sigma Quality Control (QC) process guarantees clients a 99.5% accuracy rate.

Quintek performs this service  in-house or offshore.  Services are priced by the
keystroke.  A typical  healthcare  claim form may  require  between 400 and 1000
keystrokes. With volumes in the millions, our customers may pay $0.01- $0.02 per
keystroke.  Quintek  resells  this work to offshore  partners  that perform this
service so that Quintek can make 30% to 60% gross margins.

ASP (Application Service Provider) Hosting of Scanned Images

Once  images  have  been  scanned,  end-user  need  an ECM  (Enterprise  Content
Management)  system such as Hyland Software's  OnBase,  Documentum or FileNet to
use the documents now in digital  formats...  For customers  that do not want to
install and maintain their own ECM system,  Quintek resells  web-based  document
hosting ASP services from Quintek's partners such as Hyland Software's OnBase or
Iron Mountain's Digital Archives.  This provides Quintek's clients the efficient
and immediate capability of viewing business critical documents on line. Margins
for reselling this service are generally good, between 20% and 30% and contracts
for this service usually run for many years.

In House Imaging Solutions (Hardware, Software, and Services)

For  customers  that want to use their  digital  documents  on an  in-house  ECM
system, Quintek provides multiple solutions based on the clients' needs. Quintek
offers system design, professional services and implementation required hardware
and software. This service is sold as hardware and software products at a margin
as well as labor to  perform  the  installation.  Margins  range from 20% to 40%
depending on the size of the contract.

Mailroom Outsourcing of Inbound Hardcopy or Electronic Mail

The most efficient  solution for a customer is for the customer to outsource the
mail  handling  function  to  Quintek.  Quintek  physically  retrieves  the mail
directly from the post office through a P.O. box, sorts,  scans and captures key
data fields from each document.  The scanned images and  corresponding  data are
uploaded  directly to the  customer's  ECM or one of Quintek's ASP  (Application
Service  Provider)  partners  systems for online  viewing by the  customer's end
user. This service is sold per piece of mail  processed.  Margins range from 20%
to 40% depending on the size of the contract.

                                        8
<PAGE>

Corporate Identity

Quintek's  sales force will be selling  the "QSI" brand name.  QSI is an acronym
for Quintek Services,  Inc., a wholly-owned  subsidiary of Quintek Technologies,
Inc. This document uses QSI and Quintek interchangeably.

Quintek Sales Process

Quintek Value Proposition

The Quintek  Value  Proposition  is that  Quintek can  significantly  reduce our
customer's  current process  overhead.  Quintek can change the customer's  fixed
costs into  variable  costs and Quintek can deliver a higher  quality of service
than the customer can achieve internally.

Overcoming Sales Objections

The four main sales  objections  faced by our sales force are the  "upside-down"
debt-to-equity  ratio on our balance sheet, the Company's  limited track record,
lack of regional or national  coverage and Dun & Bradstreet rating the Company a
4 on a scale of 1 to 5.

The Company responds to these objections as follows. First, the Company has been
under new management  since 2003 and the historical  financials do not represent
the capabilities of the current management.  The new CEO and CFO of Quintek have
collectively  raised  more  than  $20  million  in  financing  for  growth-stage
companies. Second, the new sales and production team at Quintek has more than 60
years of experience delivering BPO (Business process Outsourcing) to Fortune 500
customers.  They  have  been on  board  at  Quintek  since  April  2004,  so the
historical   financials  do  not  represent  the  capabilities  of  the  current
management.  We  encourage  our  customers  to look at the  track  record of the
individuals that now make up the new Quintek. Lastly, the Company forecasts that
its financials will be consistently improving over the next two quarters.

The Company forecasts that its debt-to-equity  ratio's on its balance sheet will
be right-side up and that the "going  concern"  statement will be removed within
the next two  quarters.  The D&B rating of 4 out of 5 was given when the Company
was under  previous  management  and its largest  credit line was  $10,000.  The
Company  currently has more than $300,000 in lease  financing.  Once the balance
sheet is  right-side  up, the Company  will  request  that D&B  re-evaluate  its
rating.

Quintek's Target Account Profiles

In the initial stage of Quintek's growth, the sales team is putting 50% of their
effort into targeting large,  multi-year  contracts and 50% of their effort into
closing smaller one-time jobs.

Managing rapid revenue growth

Quintek expects to achieve rapid growth by simultaneously  establishing customer
relationships  directly as well as with  national  sales  partners,  large prime
contractors and vertical-specific  solution brokers. Quintek expects to continue
to increase  revenues  through  organic  growth,  and by quickly  establishing a
national  sales foothold  using our  compelling  incentive  stock option plan to
attract top sales talent.

Quintek  expects  to  continue  expanding  to a full  national  sales  staff  of
thirty-five  salespeople  through  hiring and  through  strategic  acquisitions.
Quintek will support rapid growth  through two internal  processes,  the Quintek
Office Template (QOT) and the EIP (Employee Incentive Plan).

                                        9
<PAGE>

Direct Sales

Quintek  currently has one full-time  direct sales person.  The Company plans to
grow this to a national  staff of 35  salespeople.  The job of Quintek's  direct
sales team is to identify  prospects  before they have  reached the RFP (Request
for  Proposal)  stage.  The job of  Quintek's  direct sales team is to know that
these  proposals  are being sent out and to receive and  respond to them.  These
senior salespeople are experienced and paid a base salary and a sales commission
commensurate with that experience.

National Sales Partners and Prime Contractors

On June 1, 2004,,  Quintek signed a sales partner  agreement with FedEx Kinko's.
FedEx Kinko's has a national  corporate  sales team of more than 500 salespeople
who call on Fortune 500 accounts selling  outsourced  print room services.  They
are often selling related services to the same decision makers as Quintek.  With
the  relationship  that has been put in place between FedEx Kinko's and Quintek,
FedEx Kinko's can resell Quintek's BPO (Business Process Outsourcing)  services.
The  relationship  is  structured  so that FedEx  Kinko's can mark-up  Quintek's
services by 10-20%.

Quintek's  sales  team  has been  training  FedEx  Kinko's  on  selling  Quintek
services.  Quintek's sales team responds to requests for information  from FedEx
Kinko's and assists in drafting proposals. Quintek will pursue one other similar
prime contractor relationship and then focus on maintaining and supporting those
relationships.

Vertical specific solutions brokers

On April 26, 2004,  Quintek  signed an  agreement  with Single  Source  Partners
(SSP).  Single Source  Partners is a provider of mortgage  solutions  located in
Newport Beach, CA that supplies  Business Process  Outsourcing (BPO) services in
the mortgage  industry.  SSP is paid by financial  institutions  to  pre-qualify
vendors and service providers.  SSP also receives a finder's fee from Quintek in
the event that Quintek  closes a sale with a referral  from SSP. SSP and Quintek
have  identified  and are pursuing  more than $60 million in potential  business
from SSP's client companies.

Organic growth

Quintek will place a high priority on prospecting  within new accounts.  Quintek
will maximize the high cost of sales by  delivering  excellence to the customer,
identifying and tracking additional  opportunities within existing prospects and
by winning  subsequent work within newly created accounts.  Quintek will look to
expand  geographically  by recruiting new business  development  representatives
with existing books of business.

Initial national presence

A key milestone in the Company's business plan will be when the Huntington Beach
office reaches break-even and 50% of the National  Expansion  Financing has been
secured.  Once this milestone has been achieved,  Quintek will hire  experienced
sales people in the  Northeast,  Southeast and Midwest.  Once one of these sales
people has a qualified  opportunity that Quintek's  executive team believes will
close if resources are in place, Quintek expects to fund the necessary resources
to close the  business.  A  qualified  opportunity  in this case  would be where
Quintek  has been  short  listed  for a job that can  bill  annual  revenues  of
$1,000,000  with a high  probability  that it will  close if  resources  such as
production space, staff and equipment are in place.

                                       10
<PAGE>

National expansion through personal relationships

Another key  milestone in the  Company's  business plan will be when 100% of the
lease financing and 100% of the National  Expansion  Financing has been secured.
Once this  milestone  has been  reached,  Quintek  expects to make the necessary
investment to complete a national  sales staff of 35  salespeople.  This will be
accomplished  either  through  acquisition  or from drawing  from the  Company's
personal  network  or a  combination  of the two.  In the  event of  hiring  new
salespeople  in new  geographies,  the same  expansion  criteria will be used as
before.

Sales Incentive Stock Option Plan

Salespeople receive a stock option bonus for meeting specific revenue goals.

Growth through Strategic Acquisitions

Quintek  plans  to  retain  a  business  broker  to  help  identify   compatible
acquisition  targets.  Quintek  will focus on  acquisition  candidates  who have
binding  long-term  profitable  contracts  with  financially  stable  customers.
Quintek will pursue  equity-based  agreements that will not encumber the Company
with excessive debt.

Managing Profitability

Quintek's  sales people are  compensated  based on the Gross Profit of the sale.
Sales people  receive no  commission  for jobs sold at less than a certain floor
Gross Profit  percentage.  Sales people are provided incentive to maximize Gross
Profit.

Managing the Sales Process

Salespeople submit monthly forecasts to the President.  The President makes sure
that the sales  people are  focused  on the  business  that makes  sense for the
company.  In Quintek's  initial phase this is a balance between large multi-year
contracts and small  "one-off"  jobs.  The  President  makes sure that the sales
people are maximizing  Quintek's  vertical  expertise in healthcare and mortgage
clients.  The President is responsible for making sure that Gross Profit margins
are being maintained.

The  President  submits  monthly  forecasts to the CEO. The CEO submits  monthly
forecasts of upcoming capital expenditure requirements to the CFO.

Sustaining a Competitive Advantage

High  margins  in this  industry  can be  delivered  by low  employee  turnover.
Quintek's  Employee  Incentive  Program (EIP) enables Quintek to deliver quality
service  at less  cost  than  its  competitors  and  provides  incentive  to its
employees to be as productive as possible and to stay at Quintek.  Quintek's job
costing  process  and  technology  enables  the  Company to  measure  and reward
performance on a quarterly  basis.  In this way we can pay bonuses to production
staff based who exceed  productivity  targets.  Since  management  believes that
Quintek's  market  value  will  appreciate,   the  hourly  worker's  ability  to
accumulate  stock  in  this  manner  can  be a  powerful  incentive  to  deliver
performance and stay with the Company.

Verticals

Quintek is targeting three vertical  markets,  Outsourced  Mortgage  Processing,
Outsourced   Healthcare  Claims  Processing  and  Outsourced   Accounts  Payable
Processing.

                                       11
<PAGE>

Outsourced Mortgage Processing

Data  accessibility and storage is a challenging  operation for today's mortgage
firm  to  handle  efficiently.  Lenders  spend  billions  of  dollars  a year on
processing account data, evaluating valuable financial information,  and storing
data records.  Quintek's response to this operations challenge is to provide BPO
solutions to clients, accurately and economically.

Quintek's  imaging and  outsourcing  methodology  provides data entry,  document
scanning,  mailing  operations,  and  media to media  conversions  to  financial
institutions  at a fraction of their current  operating  costs.  By lowering the
cost to process the average loan through Quintek's  services,  millions could be
saved annually by institutional lenders, thus increasing overall revenue.

Management  believes that Quintek's  addressable  national market for outsourced
mortgage  processing  is between  $5  billion  and $10  billion.  A  significant
percentage  of ACS  (NYSE:ACS),  SourceCorp  (NASDAQ:SRCP)  and  EDS  (NYSE:EDS)
revenue comes from  outsourced  mortgage  processing.  Management  believes that
Quintek  will  continue to win new  business in this  vertical  even if interest
rates go up due to the increased need to deliver cost savings.

Outsourced Healthcare Claims Processing

Management  believes that Quintek's  addressable  national market for outsourced
healthcare  claims processing is in excess of $10 billion.  Management  believes
that there are no  foreseeable  market trends that could reduce demand for these
services in the foreseeable future.

Sales Partnerships

FedEx Kinko's

On June 1, 2004, Quintek signed a sales agreement with FedEx Kinko's, a division
of FedEx Corp. (NYSE:FDX).  FedEx Kinko's selected Quintek Services, Inc. (QSI),
as their  preferred  Document  Imaging & Document  Scanning  partner for Kinko's
Western  Region.  The  partnership  also allows the two  companies to offer back
office  outsourcing  arrangements to deliver accuracy and efficiency.  Quintek's
services are a value added  upsell to the Kinko's  core LOB (Line of  Business).
The joint business  development strategy will primarily focus on active document
digitizing  as well  as  back-file  conversions  in the  insurance,  healthcare,
government  and financial  market space.  This  partnership  provides  clients a
"single  source"  partner  by  combining  back  office  outsourcing   solutions,
professional services and document conversion services.

FedEx Kinko's sales team is reselling the following Quintek  services;  (1) High
Speed Scanning at Client Site or QSI Production  Center,  (2)  Domestic/Offshore
Data Entry, OCR, and Indexing,  (3) ASP Hosting of Scanned Images,  (4) In House
Imaging Solutions (Hardware,  Software, and Services),  (5) Mailroom Outsourcing
(Inbound).

The next steps to move this relationship forward are training Kinko's sales team
and expanding Quintek's footprint to partner with Kinko's nationally.

Single Source Partners (SSP)

On April 26, 2004,  Quintek  signed an  agreement  with Single  Source  Partners
(SSP).  Single Source  Partners is a provider of mortgage  solutions  located in
Newport Beach, CA that supplies  Business Process  Outsourcing (BPO) services in
the mortgage  industry.  SSP is paid by financial  institutions  to  pre-qualify
vendors and service providers.  SSP also receives a finder's fee from Quintek in
the event that Quintek  closes a sale with a referral  from SSP. SSP and Quintek
have  identified  and are pursuing  more than $60 million in potential  business
from SSP's client companies.
                                       12
<PAGE>

SSP provides small and midsize mortgage companies with negotiated volume pricing
and special  service  level  agreements.  SSP maintains a "Best in Class" vendor
team for their clients. Single Source Partners receives a portion of the revenue
that Quintek bills from a referred  client.  More  information  on Single Source
Partners is  available at  www.singlesourcepartners.com.  The next steps to move
this  relationship  forward are training at Single Source Partners and expanding
Quintek's footprint to be positioned to serve SSP's customers nationally.

GCAP Services, Inc. (GCAP)

GCAP is a management  consulting firm  headquartered in Irvine, CA that provides
Business Process and Systems Redesign solutions to the Federal,  State and Local
Government  sector.  Together,  Quintek  and  GCAP  provide  a total  end-to-end
solution in document management conversions for government clients.

GCAP provides executive,  strategic and tactical management consulting services.
They  assist  Federal   government  and  public   agencies  to  meet  compliance
requirements  by the design  and  implementation  of  business  systems  and the
establishment of new or streamlined procedures.

A partial list of client that GCAP  Services may be able to introduce to Quintek
includes  County  of   Orange-California,   Judicial  Council  of  California  -
Administrative   Office  of  the  Courts,   Los  Angeles   County   Metropolitan
Transportation  Authority,  Los Angeles City Community Redevelopment Agency, Los
Angeles County  Department of Public Works,  United States Navy - Naval Facility
Engineering  Command.  More  information  about  GCAP  Services  can be found at
www.gcapservices.com.  The next  steps to move  this  relationship  forward  are
training at GCAP and  expanding  Quintek's  footprint to be  positioned to serve
GCAP's customers nationally.

Iron Mountain

On May 4,  2004,  Quintek  signed an  agreement  to become a  Certified  Imaging
Partner with Iron Mountain,  a leading  provider of Web based  document  hosting
solutions,  to provide QSI clients the  efficient  and  immediate  capability of
viewing business critical documents online.

Iron  Mountain   Incorporated   (NYSE:IRM)   provides   outsourced  records  and
information  management  services and has a market  capitalization of $4 billion
with 2003  revenues of $1.5  billion.  The company  services  more than  200,000
customer  accounts  throughout  the  United  States,  Canada,  Europe  and Latin
America.  Iron Mountain offers records management services for both physical and
digital media, disaster recovery support services, and consulting.

This agreement with Iron Mountain primarily offers the Iron Mountain  salesforce
Quintek's  BPO services  while  enabling  Quintek to resell  web-based  document
hosting  ASP  services,  which  provide  Quintek's  clients  the  efficient  and
immediate capability of viewing business critical documents on line.

The next step with Iron  Mountain  is to convince  their  senior  management  to
select QSI as the preferred imaging partner in Southern  California.  Management
believes that additional  investment is necessary to expand the  capabilities at
our Huntington Beach facility before this relationship can move forward.

Examples of Customer Contracts

The scope of work for BPO (Business Process  Outsourcing)  contracts ranges from
basic data entry (Level One BPO) to outsourcing an entire department (Level Five
BPO).  Quintek  focuses on Level Two and Level Three.  Level Three BPO is higher
margin business  because it requires  complex data capture from multi-page forms
done by operators trained in the vertical who are able to analyze data.

                                       13
<PAGE>

Mortgage Processing

Mortgage companies may outsource their document process to one or more vendors.

Financial  institutions  manage  documents using Enterprise  Content  Management
(ECM)  systems  such as  OnBase,  Documentum  or  FileNet.  These are very large
enterprise wide networks  utilizing web browser interfaces that allow people all
over the world to access and interact with document based  repositories in up to
20 language.  For example,  a large financial services company might have an ECM
system  that can  support a  world-wide  staff of 12,000  employees  who need to
access 30,000,000 pages of data in Adobe .pdf format.

The  scope of work for a  Mortgage  Processing  contract  will  usually  include
Quintek  receiving paper documents and delivering these documents  directly into
the customer's Enterprise Content Management (ECM) system.  Quintek must provide
the transportation and secure facility for processing the documents, the trained
staff for processing the documents,  the expertise to index, scan and categorize
the  documents,  the expertise to  re-assemble  the original  documents in their
original  order and the  expertise to upload the documents and the indexing into
the customer's ECM system.  This often has to be done in less than 24 hours from
receipt of the document.

These ECM systems require constant, large scale document processing to input and
upload new paper documents. Mortgage companies that decide to outsource send out
Requests for Proposals (RFP's). The job of the Quintek sales team is to identify
prospects  before they have  reached the RFP stage and to receive and respond to
these RFP's. Quintek prices these jobs by the committed image. A committed image
is an image that has been uploaded into the  customer's  database and written to
their mass storage system.

Healthcare Claims Processing

With  mortgage  documentation  the focus is on having  digital  "copies"  of the
original loan  documents all throughout  the process.  In processing  healthcare
claims,  the focus is on extracting data from scanned  documents into multi-user
databases and paying or denying a claim.

Doctors and  hospitals  are  referred to as  "Healthcare  Providers."  Insurance
companies  are referred to as  "Healthcare  Payers."  Healthcare  Payers  either
maintain  their own claim  review and payment  software or they  purchase  claim
review and  payment  software  as a service  from  software  developers  such as
MedNet,  an ASP  (Application  Service  Provider).  In order to  review  and pay
claims,  the data on the paper claim has to be extracted and  converted  into an
electronic  format.  Quintek  provides the service of receiving  claims in paper
form via mail or fax and returning them as digital images with the corresponding
data which may sent directly to an ASP for viewing and processing.

Quintek  prices  these  jobs by the  scanned  image and by the  number of claims
keyed.  Quintek scans the original bill,  which results in a digital image saved
in electronic  format.  Quintek sends the scanned images to an offshore  partner
who performs the Level Three data capture  service.  The  healthcare  payer pays
Quintek for the entire service.  Quintek resells the offshore providers services
to the client.  Quintek  makes between 30% and 60% gross margin on reselling the
Level Three BPO data capture service.

Accounts Payable Processing

Most  large  companies  can  save  money be  contracting  Quintek  to  outsource
back-office  functions such as processing their accounts payable.  In processing
and paying invoices,  the focus is on quickly  approving  payments by extracting
data from scanned documents and loading into global,  enterprise-wide  databases
to support decision making such as paying or declining an invoice.

                                       14
<PAGE>
Customers  often  install and  maintain  their own Payment  Processing  Workflow
software  to review,  pay or decline  invoices.  In order to review and  process
invoices with such  software,  the data on the paper invoices has to be scanned,
captured  and loaded into the  client's  database or  web-based  ASP provided by
Quintek. Customers outsource this scanning, capturing and loading to Quintek.

Quintek  prices  these  jobs by the  scanned  image  and by the  number  of data
elements keyed.  Quintek scans the original invoice,  which results in a digital
image saved in electronic format as a TIFF or PDF file.  Quintek  electronically
sends the scanned  images to our  offshore  partner who performs the Level Three
data entry BPO  service.  The  customer  pays  Quintek  for the entire  service.
Quintek  resells the offshore  providers  services to the client.  Quintek makes
between  30% and 60% gross  margin  on  reselling  the Level Two BPO data  entry
service.

Sales Incentive Plan

Quintek's  sales  compensation  plan is designed for senior  salespeople who are
experienced and are paid a base salary and a sales commission  commensurate with
that experience.  For a new salesperson in a new territory,  billed sales quotas
are  $500,000 in year one,  $800,000 in year two and $1.2 million in year three.
Quintek sales people receive a base salary of $75,000.  Quintek sales people are
compensated  based on the Gross  Profit of the sale.  Sales  people  receive  no
commission for jobs sold at less than 20% Gross Profit.  Sales  commission scale
from 4% to 7.5% as Gross Profit goes from 20% to greater  than 40%.  Salespeople
receive a stock  option bonus for meeting  specific  revenue  goals.  Details on
stock option compensation are outlined in the Appendices.

Execution Plan

Currently,  Quintek has one office in Huntington Beach and one region,  Southern
California.  We have seven  full-time  employees in Huntington  Beach,  a Senior
Salesperson,   a  Project  Manager,  a  Production  Manager,  an  Administrative
Assistant and the executive team of CEO, President and CFO.

We have a 7,000 sq. ft. facility that has 3,000 sq. ft. of production  space. In
its current  configuration,  Quintek's  Huntington  Beach facility could process
13,200,000 documents a month.

Our  business  plan calls for us to expand to  profitability  within three years
with  thirty-five  salespeople  organized into four regions totaling twenty such
offices  nationwide.  To  accomplish  this  goal,  we  have  identified  ten key
milestones that need to be accomplished.

Managing Profitability

Production   Managers  will  be  compensated   based  on  successfully   raising
profitability.

Template engagement team

During  Quintek's  initial  expansion,  each  region will need to have three key
personnel.

Production Manager. Production Manager is responsible for delivering services to
the customer. This includes hiring and supervising production staff and bringing
projects in under budget.

Project  Manager.  Project  Manager is responsible  for supporting the pre-sales
effort  involving the  development of proposals.  Project Manager is responsible
for  post  sales  support,  customer  relations  and  coordinating  the  initial
implementation of new business.  Project Manager is responsible for working with
Finance to order equipment based on the day-to-day needs of the project.

                                       15
<PAGE>

Senior Sales Representative.  The Senior Sales Representative is responsible for
identifying  sales  prospects,  closing sales and is the customer's main contact
during implementation.

Leveraging Temporary Labor

Quintek's business model relies heavily on the use of temporary labor. Volume of
business can vary dramatically from week to week.  Profitability is based on not
having any more full-time staff than is necessary.

Production Staff Incentive plan

Quintek's Operator Incentive Program (OIP) enables Quintek to deliver quality at
less  cost  than  its  competitors  and  provides  incentives  to the  Company's
employees to be as productive as possible and to stay at Quintek.

Maintaining Margins

We plan to minimize  layers of  management  as we grow and reward  employees for
cost savings. Quintek will cultivate a culture of saving money. Managers will be
empowered to award stock options to employees who help save money.

Offshore Partners

Quintek  currently has deal-by-deal  relationships  with offshore BPO providers.
Management believes that there is no compelling business reason to seek or offer
an exclusive relationship with an offshore BPO provider.  There are many skilled
offshore providers. Bob Brownell,  Quintek President, has been to Chennai, India
and toured facilities and developed face-to-face relationships with BPO partners
that are brought in on a deal-by-deal basis.

Customer Solution Partnerships

Management experience has shown that to sell and deliver a complete BPO solution
to a customer,  a company must engage a partner or multiple partners during some
part of the  process  of  delivering  the  service.  Management  has found  that
profitability in the BPO business comes from specialization. Management believes
that the  larger  companies  that  attempt  to  provide  all  aspects of the BPO
solution  internally  can not compete  with  Companies  like  Quintek that offer
multi-vendor  solutions.  Just like Information Technology hardware and software
became unbundled into multi-vendor solutions in the 1980's and 1990's, the trend
in outsourcing is towards multi-vendor  solutions.  Quintek has established true
partnerships  with industry leaders,  where we provide  specialty  services that
they do not provide and vice versa, with revenue sharing going both ways.

FedEx Kinko's

On June 1, 2004, Quintek signed a sales agreement with FedEx Kinko's, a division
of FedEx Corp. (NYSE:FDX).  FedEx Kinko's selected Quintek Services, Inc. (QSI),
as their  preferred  Document  Imaging & Document  Scanning  partner for Kinko's
Western  Region.  The  partnership  also allows the two  companies to offer back
office  outsourcing  arrangements to deliver accuracy and efficiency.  The joint
business development strategy is primarily focused on active document digitizing
as well as back-file  conversions in the insurance,  healthcare,  government and
financial  market space.  This  partnership  provides  clients a "single source"
partner by combining back office outsourcing  solutions,  professional  services
and document conversion services.

We do not risk losing  accounts to FedEx Kinko's  because FedEx Kinko's does not
sell or market competing services

                                       16
<PAGE>

FedEx Kinko's sales team is reselling the following Quintek  services:  (1) High
Speed Scanning at Client Site or QSI Production  Center,  (2)  Domestic/Offshore
Data Entry, OCR, and Indexing,  (3) ASP Hosting of Scanned Images,  (4) In-House
Imaging  Solutions   (Hardware,   Software,   and  Services)  and  (5)  Mailroom
Outsourcing of Inbound mail.

Single Source Partners (SSP)

Single Source  Partners is a provider of mortgage  solutions  located in Newport
Beach,  CA that supplies  Business  Process  Outsourcing  (BPO)  services in the
mortgage  industry.  SSP  provides  small and midsize  mortgage  companies  with
negotiated volume pricing and special service level agreements.  SSP maintains a
"Best in Class" vendor team for their clients. Single Source Partners receives a
portion  of the  revenue  that  Quintek  bills  from  a  referred  client.  More
information     on    Single     Source     Partners     is     available     at
www.singlesourcepartners.com.

GCAP Services, Inc. (GCAP)

GCAP is a management  consulting firm  headquartered in Irvine, CA that provides
Business Process and Systems Redesign solutions to the Federal,  State and Local
Government  sector.  Together,  Quintek  and  GCAP  provide  a total  end-to-end
solution  in  document  management  conversions  for  government  clients.  GCAP
provides executive,  strategic and tactical management consulting services. They
assist Federal government and public agencies to meet compliance requirements by
the design and  implementation  of business systems and the establishment of new
or streamlined procedures.  More information about GCAP Services can be found at
www.gcapservices.com.

Iron Mountain

On May 4,  2004,  Quintek  signed an  agreement  to become a  Certified  Imaging
Partner with Iron Mountain. This agreement with Iron Mountain enables Quintek to
resell web-based document hosting ASP services, which provides Quintek's clients
the efficient and immediate capability of viewing business critical documents on
line.

Iron  Mountain   Incorporated   (NYSE:IRM)   provides   outsourced  records  and
information  management  services and has a market  capitalization of $4 billion
with 2003  revenues of $1.5  billion.  The company  services  more than  200,000
customer  accounts  throughout  the  United  States,  Canada,  Europe  and Latin
America.  Iron Mountain offers records management services for both physical and
digital media, disaster recovery support services, and consulting.

We do not risk losing  accounts to Iron Mountain  because Iron Mountain does not
sell or market competing services.

This  relationship  with Iron Mountain helps Quintek close sales because through
Iron  Mountain,  Quintek  can  deliver  fast  online  access to data and images,
combining  multiple  file types on one platform,  SAS70 - DOD - HIPAA  compliant
facility,  workflow-enabled,  completely secure and quick to implement.  Through
Iron Mountain,  Quintek is providing its clients a system that is fully mirrored
and   load-balanced   with   auto-failover   capability   ensuring   access  and
availability.

Template office

Quintek plans to open four major market BPO facilities and sixteen  standard BPO
facilities in secondary markets.

                                       17
<PAGE>
Chemical-Free Microfilm (CFM) Business Unit

The Film-based Imaging Market

The film-based imaging market segment is the business  associated with microfilm
cameras, film stock, chemicals, readers, printers, and associated services. This
is a mature,  established  market that has been redefined by new digital imaging
technologies over the last decade.

Trends In the Film-based Imaging Market

In June 2000, the Archivist of the United States, John W. Carlin, announced that
scanned  image files would be used instead of  microfilm to preserve  individual
responses to the 2000 Census. In a landmark decision, the Census Bureau reversed
itself and decided to continue  using  microfilm.  The reasons cited for staying
with microfilm were ongoing  expense,  the risk of losing  critical data and the
advantage  of a human  readable  format with a potential  lifespan of 500 years.
Digital  archives  represent an ongoing  expense  because they require  constant
expensive  migration as digital  standards,  operating systems and media change.
During a migration,  there is additional risk of losing critical data. Microfilm
is  "future-proof"  because it is human  readable and  certified by the American
National Standards Institute (ANSI) to have a 500 plus year lifespan.

For archive documents,  film-based media remain superior. Film-based archival is
less  expensive  than digital  methods and has a storage life of between 100 and
1000 years. Film-based archival already has a massive installed base of billions
of documents accumulated over more than 50 years of use.

By enabling the  creation of microfilm  directly  from  digital  files,  Quintek
products  marry  modern  digital  technologies  to the proven  best-practice  of
microfilm archival.

The Document Lifecycle

Digital document management  technology is well suited for active documents that
require  high-availability.  For archive documents,  digital imaging or document
management  systems have been shown to be costly and  unreliable  as a long term
solution.

When the document is created,  activity is high -- it is being used  actively to
make decisions.  Issues during this stage include ease and speed of access,  and
the ability to share documents  across networks.  At some point,  activity drops
sharply and the document enters a phase when it must be kept, sometimes for many
years, when activity is very low; this is the archival stage.

The issues at the archival stage are entirely different and relate to safe, long
term  storage.  Because the volumes are  invariably  high during this phase both
space  and cost are  major  issues.  Microfilm  is the  only  proven,  permanent
document storage media.
The Company  believes that the future of this  marketplace  is in hybrid systems
which bridge the gap between these two technologies.

The Aperture Card Market

The  segment of the  film-based  imaging  market  that  addresses  large  format
engineering  drawings is called the  aperture  card market.  The  aperture  card
market  is  made  up  of  hardware  and  software  manufacturers,  distributors,
maintenance service providers and media and consumables manufacturers.  Aperture
Cards are produced by many Departments of  Transportation,  City and County Plan
and Permit offices, Power Companies, Federal Agencies such as the Bureau of Land
Management.  Aerospace  companies  are required by the  Department of Defense to
submit  documents  in  Aperture  Card  format.  U.S.  Navy ships and  submarines
maintain their engineering drawings in Aperture Card format.

                                       18
<PAGE>

Wet vs. Dry Silver Film - Strategic Advantage

Quintek's  products  use "Dry Silver" film which  requires no  chemicals.  Older
technologies  are  based  on "Wet  Silver"  film  which  requires  the  cost and
inconvenience of dealing with hazardous chemicals. Management believes that once
the need for chemicals is removed,  the  advantages  of film-based  imaging will
drive sales. We also believe that creating awareness of a modern, desktop device
that outputs digital drawings to microfilm with no chemicals will drive sales.

The  Company  believes  that  there  is a large  installed  base  of Wet  Silver
technology  that is used in "print rooms." A print room is a dedicated area that
has the  specialized  film-processing  and aperture card assembly  areas and the
subsequent  ventilation and hazardous materials handling equipment.  The Quintek
product eliminates the need for such print rooms and their on-going expense.

Product Overview

Products and Services

Quintek's  principal  product is the Q4400 Desktop  Aperture  Card Printer.  The
Q4400 is used by  engineering  departments  to print  directly to Aperture Cards
from  digital  files  in  a  single  step  without  using   chemicals  for  film
development.  Our  solution  provides a stream of revenues  from the  following:
Q4400  Aperture  Card Printer and upgrades to that  system,  Quinplot  software,
maintenance and blank aperture card media

The Q4400 system is comprised of  Quintek's  QUINPLOT  Software  Package and the
Q4400  Aperture  Card  Printer.  The QUINPLOT  Software and Q4400  Aperture Card
Printer  operate  together to provide a complete  system for producing  Aperture
Cards.

The QUINPLOT  Software operates on a standard PC platform under Windows 2000, or
XP and  functions  to  interface  the user  system and  operator  with the Q4400
printer.  The QUINPLOT  operates  across the customer's  network  similar to any
laser  printer  and is  compatible  with all  standard  vector and  raster  file
formats.  The  QUINPLOT  Software can be used to control and monitor a number of
related  functions,   including;  image  queuing,  graphics  workstation  (image
view/mark-up/edit),  password protection,  drawing release,  index data formats,
index data entry and all aspects of the  aperture  card  production  cycle.  The
QUINPLOT Software is designed to easily adapt to the client's existing workflow,
indexing methods and file formats.

The Q4400 is packaged in a small, self contained,  table-top box which fits well
into office, reprographics,  laboratory and CAD/CAM work environments. The Q4400
Printer  uses a low power laser to record  images  directly on Dry Silver  film,
which is  premounted on blank  aperture  card media and packaged in  light-tight
cassettes.  The film is developed  using a patented  heat process and  therefore
requires  no  chemicals  and emits no toxins  into the  atmosphere.  The card is
automatically  labeled  using  an  internal  print/punch  module.  The  Q4400 is
completely  automatic,  extremely  reliable and can operate unattended until the
blank aperture card media is depleted.

Cost Savings

When comparing the Q4400 to alternative  aperture card production  methods,  the
Q4400 saves the customer money in terms of reducing the  following:  labor cost,
downtime,  hard cost (material),  floor space and maintenance cost. Furthermore,
there  are no  employee  health  hazards  from  chemical  fumes and  spills,  no
liability from employee exposure to  chemicals/fumes  and the added benefit of a
faster "time to market".

                                       19
<PAGE>

When comparing the Q4400 to external  service  bureaus,  customers save money in
terms of reduced  material cost (paper,  toner,  etc.) and labor cost  (handling
paper,  packaging,  shipping,  etc). There are no service bureau fees, a shorter
lead time and improved security (confidential drawings can be done in-house).

When  using  direct  output  to  Aperture  Card,  the user is  expected  to gain
substantial  cost savings in many areas.  For some users,  the  security  issues
related to having  immediate on site drawing  conversion  completed in a secured
area with limited access may provide a great deal of value  unrelated to volume.
Also,  the  efficiency  gained by eliminating  the  bottleneck  associated  with
service bureaus and conventional conversion results in a faster "time to market"
and greater efficiencies for the resultant products,  improving ones competitive
position.

Useful Features/Benefits

The following provides a list of features of the Q4400 system: direct conversion
to aperture card (i.e. no requirement for paper plots) chemical-free  operation,
fully   automatic   operation,   compatible  with  a  wide  variety  of  network
configurations,  compatible  with a wide  variety of image & text file  formats,
interface can be customized to address the customer's  unique  application and a
compact modular design.

The  following  provides  a list of  benefits  of the Q4400  system:  provides a
dramatic  improvement  in efficiency  (drawing  release &  distribution,  design
review process,  check print and a back-up of digital data base),  reduced "time
to market"  improves user's  competitive  posture and it eliminates  health risk
from employee's exposure to chemicals and fumes.

Patents and Trademarks

The Q4400 system is protected under the following patents and trademarks:

US Patents
<TABLE>
<CAPTION>
Patent             Expiration
Number               Date           Name/Description
---------          ----------       ----------------
<C>                <C>              <C>
4,794,224          04/09/07         Dry Film Developer for an Aperture Card Printer
4,818,950          04/24/07         Low Jitter Phase-Locked Loop (internal circuit board)
4,841,343          03/25/08         Dry Film Development Process for an Aperture Card Printer
</TABLE>

Trademarks

"Quintek"  (Logo  design),  the mark, was registered on the Patent and Trademark
Office principal register as U.S. registration No. 2,604,712 on August 6, 2002.

Sales and Marketing

Quintek's CFM Business Unit is primarily  engaged in the service and maintenance
of the installed  base of Q4300 and Q4400  Aperture Card  Printers.  The company
sells  maintenance  contracts  on the  installed  base of Q43/44XX  printers for
$10,200. The Company sells upgrades to upgrade the installed base of printers to
Windows XP/2000 for $5000.00.  The Company sells extended  software  features to
the Q43/44XX printers for $5,000.

                                       20
<PAGE>
Quintek has  determined  that in order to grow sales, a redesign of the Q43/44XX
printer is required.  New management determined that this investment would be at
least  $250,000.  New management has decided that it is in the best interests of
Quintek's shareholders to wait until the new QSI services division is profitable
before proceeding with investment in the Chemical-Free Microfilm technology.

Manufacturing

Prior to March 2003, Quintek was dependent upon Kitron / Bofos for manufacturing
the 4305  Printer.  Since  March,  2003,  all 4305  printers  have  been made in
Quintek's Idaho facility. As of this writing,  Quintek has been unable to obtain
the tooling for the 43/44XX  printers  from  Kitron.  Kitron  believe it is owed
$100,000 and will not return Quintek's property. Quintek disputes this debt.

Quintek's  supplier  of  replacement  ribbons  has  discontinued  that  line  of
business.  Quintek is not currently in  possession of tooling for  manufacturing
new  ribbons.  Quintek has  determined  that  setting up new tooling for ribbons
would cost at least $20,000.

The Company  believes that the  Montpelier,  Idaho facility will be able to meet
current  demand for its products and  services.  Quintek has been working with a
variety of suppliers  for Q4305 and other  parts.  These  suppliers  are located
throughout the United States. The Company believes that this will help to insure
stability  and  reduce  risk  through  the  lack of  reliance  upon  any  single
suppliers.

Competition

The Company believes that it is the only manufacturer of a chemical-free desktop
aperture card printer. There are other aperture card printing devices available.
Both of the  competitive  devices  the  Company  is aware of,  are  manufactured
outside of the  United  States.  Microbox  AG,  based in Germany  has sold a wet
CADMIC Aperture Card Plotter. Quintek believes that this product has been on the
market for the past decade. This product is a large unit that weighs roughly 772
pounds.  It requires  the  constant  replenishment  and  disposal  of  hazardous
chemicals,  has specialized  ventilation,  plumbing and electrical requirements,
and is labor  intensive  to operate.  Quintek was  recently  made aware of a Dry
CADMIC Plotter being produced by Microbox.  Quintek believes that this is also a
large unit that has specialized electrical  requirements,  is labor intensive to
operate  and not  nearly as  versatile  as  Quintek's  Q4400.  To the  Company's
knowledge,  the Dry CADMIC Plotter produced by Microbox is currently sold in the
United States by only one distributor.

Wicks and Wilson,  based in the United  Kingdom,  also  manufactures an aperture
card  plotter.  Their  product is similar in size to the Q4400.  It requires the
constant  replenishment  and disposal of hazardous  chemicals,  has  specialized
ventilation,  plumbing and electrical  requirements,  and is labor  intensive to
operate. To the Company's  knowledge,  Wicks and Wilson has only one distributor
in the United States.

ITEM 2 DESCRIPTION OF PROPERTY

On July 31, 2004, we terminated our lease at 537 Constitution  Avenue,  Suite B,
Camarillo, California.

We lease  7,090  square  feet for our  executive  and QSI sales  and  production
offices at 17951 Lyons Circle,  California.  The lease expires on June 30, 2008,
with an option to extend it for four years.  Our current  monthly  lease rate on
this facility is $7485.72

We rent, on a  month-to-month  basis,  1,800 square feet of office and warehouse
space at 720 N. 4th Street,  Montpelier,  Idaho, to manufacture our products and
service our customers. Our current monthly rent is $1,384.

                                       21
<PAGE>

ITEM 3 LEGAL PROCEEDINGS

On April 16, 2004, Decision One Corporation filed suit in the County of Bannock,
Idaho against us for $22,661.56  for goods  provided.  Since 2000,  Decision One
(formerly Imation) has been both a vendor to Quintek and a reseller of Quintek's
Q4300  Printers.  Quintek filed a counterclaim on August 1, 2004. We assert that
Decision One used its  authority as a dealer of our product to disparage  us, in
violation of its dealer  agreement  with us, and we seek relief for the hundreds
of thousands of dollars in business lost because of it.

ITEM 4 SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

Our Annual Meeting of Stockholders was held on June 30, 2004.

As of the close of business May 14, 2004,  the record date of this meeting,  the
total number of shares  outstanding  and entitled to vote were  48,884,994.  The
number of shares represented at this meeting was 41,055,287, which was 84.22% of
total shares outstanding. Votes were cast on the following matters.

         1.   Robert  Steele  and  Andrew  Haag were  elected  directors  of the
              company to serve for the ensuing  year and until their  successors
              are  elected  and  qualified;  40,720,947  voted  for Mr.  Steele,
              224,061 voted against and 110,279 abstained.  40,870,447 voted for
              Mr. Haag, 74,561 voted against and 110,279 abstained.

         2.   Kabani & Co., Certified Public  Accountants,  was appointed as the
              independent auditors of the Company,  having received the required
              percentage of votes;  40,853,202  voted for,  75,207 voted against
              and 126,878 abstained.

         3.   The proposal to increase the number of authorized shares of common
              stock to  200,000,000,  and to increase  the number of  authorized
              shares of  Preferred  Stock to  50,000,000,  received the required
              percentage  of  votes;   16,584,420  voted  for,  1,951,087  voted
              against,  118,534  abstained  and  there  were  21,953,246  broker
              non-votes.

         4.   The  proposal to  authorize  the Board of  Directors to divide the
              Preferred  Stock into any  number of  classes  or series,  fix the
              designation and number of shares of each such series or class, and
              alter  or  determine  the  rights,  preferences,   privileges  and
              restrictions  of each class or series of  Preferred  Stock not yet
              issued received the required percentage of votes; 16,004,656 voted
              for,  2,380,911  voted against,  268,474  abstained and there were
              21,953,246 broker non-votes.

         5.   The proposal to authorize a quorum for any shareholder  meeting to
              be at least one third of the shares  entitled to vote received the
              required percentage of votes;  16,042,260 voted for, 995,861 voted
              against,  1,615,920  abstained  and there were  21,953,246  broker
              non-votes.

         6.   The proposal to adopt the Quintek  Technologies,  Inc.  2004 Stock
              Option Plan received the required percentage of votes;  16,609,465
              voted for,  1,259,551 voted against,  785,025  abstained and there
              were 21,953,246 broker non-votes.

                                       22
<PAGE>
ITEM 5 MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

5.1       Market for Common Stock

Since  January 14, 1999,  our common stock has traded on the OTC Bulletin  Board
(symbol "QTEK").  On September 30, 2004,  there were 495 listed  shareholders of
record and 2365  non-objecting  owners of the stock. The high and low bid prices
per share for our stock for each quarter commencing July 1, 2001 and ending June
30, 2004 are listed  below.  The high and low bid prices per share for our stock
for the quarter  ending  September 30, 2004 were $0.21 and $0.12,  respectively.
This information was obtained from Media General Financial Services and Reuters.

         1st Quarter       2nd Quarter      3rd Quarter       4th Quarter
         -----------       -----------      -----------       -----------
         High     Low      High     Low     High     Low      High     Low
         ----     ---      ----     ---     ----     ---      ----     ---
FY2002   $0.11    $0.05    $0.39    $0.05   $0.50    $0.09    $0.47    $0.07
FY2003   $0.14    $0.03    $0.13    $0.02   $0.07     $0.03   $0.19    $0.03
FY2004   $0.17    $0.09    $0.19    $0.10   $0.26     $0.13   $0.20    $0.12

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

5.2       Dividends

 We presently intend to retain future earnings, if any, to provide funds for use
in the  operation  and  expansion  of our  business.  Accordingly,  we have  not
declared or paid any dividends to our common  shareholders  and do not presently
intend to do so. Any future decision whether to pay dividends will depend on our
financial  condition  and any other  factors that our Board of  Directors  deems
relevant.

5.3       Securities Authorized for Issuance Under Equity Compensation Plans

Our Chief Executive  Officer and Chief Financial Officer entered into employment
agreements  on January 31, 2003 with the Company  which  grants each of them the
right to earn substantial equity compensation from the Company.  Pursuant to the
employment agreements,  the Company has agreed to sell to each of them stock (or
grant to each rights to purchase additional shares of common stock) at $0.03 per
share  such  that,  including  all  options  or shares  previously  issued to or
purchased by each of them,  each would own, in the  aggregate,  shares of common
stock or rights to  purchase  shares of common  stock  representing  ten percent
(10%) of the current  outstanding  common stock of Quintek,  on a  fully-diluted
basis after taking into account the issuance of such  additional  shares to each
officer and  assuming  the  issuance of all other  shares  subject to  currently
outstanding  options  or  warrants.  The  employment  agreements  state that the
agreement(s)  specifically  granting  the shares to be purchased by the officers
will have, at minimum,  new  termination  and  repurchase  provisions,  with the
termination  provisions to be consistent  with new  termination  and  repurchase
provisions  set forth in this  Agreement.  The  agreement(s)  also will  contain
provisions providing the officers with pre-emptive rights to purchase additional
shares of common stock under certain circumstances.  Options to the two officers
shall vest  according to the following  schedule:  Right of each to purchase two
and a half percent (2.5%) of outstanding common stock, upon the authorization of
additional shares by the shareholders of Quintek; assuming that authorization of
more shares is approved by the shareholders of the Company,  options giving each
of the  officers  the right to purchase  an  additional  two and a half  percent
(2.5%) of  outstanding  common stock at the time of grant,  will be granted upon
the one (1) year  anniversary  of each  officer's  employment  agreement for the
following three (3) years. In the event of a sale of Quintek, termination of the
officers'  employment  agreements  by the  Company,  or any other event that may
impede  Quintek's  ability  to  fulfill  its  obligations  under  the  officers'
employment agreements, all options will be immediately vest.

                                       23
<PAGE>

Our  President  entered into  employment  agreements  on March 12, 2004 with the
Company which grants him the right to earn substantial equity  compensation from
the Company.  QUINTEK will sell him additional  shares of common stock (or grant
to him rights to purchase additional shares of common stock) in QUINTEK so that,
including  all options or shares  previously  issued to or  purchased by him, he
would own, in the aggregate, shares of common stock or rights to purchase shares
of common stock representing five percent (5%) of the current outstanding common
stock in QUINTEK on a fully-diluted basis after taking into account the issuance
of such  additional  shares to him and assuming the issuance of all other shares
subject to currently  outstanding  options or warrants.  The purchase  price for
such shares (or the exercise  price for such  options)  will be equal to seventy
five percent (75%) of the five day closing average price of the Company's common
stock  immediately  prior to the  execution  of this  Agreement,  but they  have
otherwise not as yet determined how such  additional  shares and/or options will
be issued to him. It is  contemplated  that QUINTEK and Mr.  Brownell will enter
into a separate  agreement  or  agreements  on these  additional  shares  and/or
options within 90 days of the date of this Agreement (or upon the  authorization
of  additional  shares by the  Shareholders  of  Quintek..  Specifically,  it is
presently anticipated that the new stock agreement(s) will have, at minimum, new
termination and repurchase  provisions,  with the  termination  provisions to be
consistent  with the  termination  provisions set forth in this  Agreement.  The
agreement(s) also will contain provisions  providing him with pre-emptive rights
to  purchase  additional  shares  of  common  stock  of  QUINTEK  under  certain
circumstances.  Options shall vest according to the following schedule: Right to
purchase 1.25% of outstanding common stock, upon the authorization of additional
shares by the  Shareholders  of Quintek,  assuming  that  authorization  of more
shares is approved by the  shareholders  of the Company,  options giving him the
right to purchase an additional 1.25% of outstanding common stock at the time of
grant,  will be granted to him upon the 1 year anniversary of this Agreement for
the following three years. In the event of a sale of QUINTEK, or any other event
that may  impede  QUINTEK's  ability  to  fulfill  its  obligations  under  this
Agreement, all options will immediately vest.

5.4       Recent Sales of Unregistered Securities

On April 26, 2004,  Quintek issued a convertible note for $100,000 in cash to an
accredited  investor.  The note bears 10% simple  interest  and matures one year
from the above date. The note converts into common stock at $0.06 a share.

On June 7, 2004,  Quintek issued a convertible  note titled for $100,000 in cash
to an accredited  investor.  The note bears 10% simple  interest and matures one
year from the above date. The note converts into common stock at $0.06 a share.

On November  26, 2003,  Quintek  issued a warrant to an  accredited  investor to
purchase  8,333,333  shares of Quintek  common stock at an of exercise  price of
$0.06,  expiring November 26, 2008, in consideration for $500,000  investment in
convertible notes.

On July 23, 2003,  Quintek issued a warrant to a stockholder to purchase 142,857
shares of Quintek Common Stock at an exercise price of $0.13,  expiring July 23,
2006 in consideration  for a stock loan to Quintek of 1,428,572 shares of common
stock.  In  additional  consideration  for the  loan of stock  from the  lender,
Quintek released the lender from a lock up on 285,714 shares of common stock.

On  November  6, 2003,  Quintek  issued a warrant to a  stockholder  to purchase
1,100,000  shares  of  Quintek  Common  Stock at an  exercise  price of  $0.175,
expiring  November  6, 2008 in  consideration  for a stock  loan to  Quintek  of
1,100,000 shares of common stock.

On June 24, 2003,  Quintek issued a warrant to a stockholder to purchase 100,000
shares of Quintek Common Stock at an exercise price of $0.16,  expiring June 24,
2006 in consideration  for a stock loan to Quintek of 1,000,000 shares of common
stock.
                                       24
<PAGE>

On  November  7, 2003,  Quintek  issued a warrant to a  stockholder  to purchase
400,000 shares of Quintek Common Stock at an exercise price of $0.175,  expiring
November 7, 2008 in consideration  for a stock loan to Quintek of 400,000 shares
of common stock.

On  November  6, 2003,  Quintek  issued a warrant to a  stockholder  to purchase
700,000 shares of Quintek Common Stock at an exercise price of $0.175,  expiring
November 6, 2008 in consideration  for a stock loan to Quintek of 700,000 shares
of common stock.

Unless  otherwise  noted,  the sales set forth above  involved no  underwriter's
discounts or commissions and are claimed to be exempt from registration with the
Securities and Exchange  Commission  pursuant to Section 4 (2) of the Securities
Act of 1933,  as amended,  as  transactions  by an issuer not involving a public
offering,  the issuance and sale by the Company of shares of its common stock to
financially  sophisticated  individuals  who are  fully  aware of the  Company's
activities,  as well as its business and financial  condition,  and who acquired
said  securities for investment  purposes and  understood the  ramifications  of
same.

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

Our revenues  totaled $298,653 and $388,888 for the twelve months ended June 30,
2004 and 2003,  respectively,  a decrease of $90,235 (23%) in 2004 due primarily
to changing the Company's sales focus to the services business.

For the twelve months ended June 30, 2004 and 2003, cost of revenue was $184,964
and $261,050 respectively,  a decrease of $76,086 (29%). Our cost of revenue for
both periods  consisted  mostly of labor and production  costs.  Cost of revenue
decreased in 2004 due to decreased  revenues from  changing the Company's  sales
focus to the services business.

Operating expenses totaled $1,083,246 for the twelve-month period ended June 30,
2004 as compared to $822,273  for the prior  twelve-month  period.  The $260,973
(24%)  increase in operating  expenses is due primarily to investment in the new
services business.

We incurred no acquisition expenses in the twelve months ended June 30, 2004 and
2003, respectively.

During the 12 month period  ending June 30,  2004,  we sold one (1) contract for
document services,  nineteen (19) customer service  contracts,  nine (9) network
upgrades,  one (1) unit of QuinPlot  software,  and 154,000  aperture  cards. We
expect to continue generating sales revenue from these products in the future.

For the  twelve  months  ended  June 30,  2004 and 2003,  Total  Assets  equaled
$147,275 and $214,006 respectively, a decrease of $66,731 (31%) primarily due to
a decrease in accounts receivable, intangible assets and investments.

For the twelve months ended June 30, 2004 and 2003,  Total  Current  Liabilities
equaled  $2,177,580 and $1,458,364,  an increase of $719,216 (49%) primarily due
to financing to grow the business.  Quintek executed a financing agreement for a
total of $500,000 in convertible notes to KMVI.

For the twelve months ended June 30, 2004 and 2003, Accounts payable and accrued
expenses  equaled  $438,826  and $316,924  (the sum of $116,609  and  $200,315),
respectively,  an increase  of $121,902  (38%)  primarily  due to accrued  legal
expenses, leases purchases and office relocation costs to facilitate new revenue
streams.

                                       25
<PAGE>

For the  twelve  months  ended  June  30,  2004 and  2003,  Loans  payable  from
stockholders equaled $244,056 and $32,300 respectively,  an increase of $211,756
(650%) primarily due to stockholders  loaning free trading shares to the Company
to facilitate financing to move the business forward.

For the twelve months ended June 30, 2004 and 2003,  Factoring  payable  equaled
$43,230 and  $146,890,  respectively,  a decrease  of $103,660  (70%) due to the
Company making these payments.

We are  currently  in  default  on two  outstanding  promissory  notes  totaling
$62,495.  Interest  continues  to accrue  against the  principal.  The notes are
unsecured. The holders of the bonds that are in default have indicated that they
do not want to  convert  their  debt to stock and wish to be repaid in cash.  At
present  we do not have the  funds to  repay  the  indebtedness.  We do not know
whether we will be able to repay or  renegotiate  this debt. If we are unable to
cure the default or  renegotiate  our debt,  we may not be able to continue as a
going concern.

We owe $97,000 in payroll withholding taxes that are past due.

Liquidity and Capital Resources

We have historically  financed  operations from the sale of common stock and the
conversion  of common stock  warrants.  At June 30, 2004, we had cash on hand of
$15,600  and  working  capital of  $(2,127,979)  as  compared to cash on hand of
$21,162 and working capital of $(1,351,096) at year-end, June 30, 2003.

Net cash used in operating activities of $ (595,947) for the twelve months ended
June 30, 2004, is attributable  primarily to a net loss of $(998,531)  increases
in Accounts payable and accrued  expenses of $119,040,  increases in Payroll and
payroll taxes payable of $51,023,  Depreciation and  amortization of $50,730,  a
decrease in Accounts  receivable of $44,382 and an increase in deferred  revenue
of $46,006.

There was no Net cash  provided by investing  activities  for the twelve  months
ending June 30, 2004.

Net cash  provided by financing  activities  was $590,385 for the twelve  months
ending June 30, 2004.  The increase is primarily  attributable  to proceeds from
notes of  $500,000,  loans from  stockholders  of  $211,756  coupled  with a net
paydown of factoring payables of $103,660.

Subsequent Events

On August 4th, 2004 Quintek  entered into an agreement  with the private  equity
fund, Golden Gate Investors, based in San Francisco, CA, to provide Quintek with
$3.3 million in capital.  This  capital  will allow  Quintek to move forward and
execute its growth plans.
The fund purchased a two year $300,000  convertible  note paying 5 3/4% interest
and 3,000,000  warrants to purchase  common stock for a period of three years at
$1.00.  The  "Conversion  Price" of the note shall be equal to the lesser of (i)
$0.50, or (ii) 80% of the average of the 5 lowest volume weighted average prices
during the 20 trading days prior to holder's  election to convert,  or (iii) 80%
of the  volume  weighted  average  price on the  trading  day prior to  holder's
election  to.  Upon   conversion   of  the  note,   the  fund  is  obligated  to
simultaneously  exercise the $1.00 warrants,  thereby providing added funding to
the Company. The warrants must be exercised  concurrently with the conversion of
the  note in an  amount  equal  to ten  times  the  dollar  amount  of the  note
conversion.

                                       26
<PAGE>
On August 17th,  2004 the Company entered into a Securities  Purchase  Agreement
with an individual investor that purchased two (2) convertible debentures,  each
for one hundred thousand dollars  ($100,000)  paying ten percent (10%) interest.
For each  conversion  share,  the investor  received  one common stock  purchase
warrant.  The initial  debenture was purchased at closing.  The second debenture
will be purchased  within five days of a registration  statement  being declared
effective  covering the  conversion  shares and shares  underlying the warrants.
Debentures are convertible into the common stock of the Company. The "Conversion
Price"  per  share  shall be the  lower of (i)  $0.10 or (ii) in the  event  the
Company  enters into an agreement  subsequent  to  execution  of the  Securities
Purchase  Agreement  to sell  common  stock  or a  convertible  instrument  that
converts  into common stock prior to  conversion  of a debenture at a price less
than the  Conversion  Price of the debenture,  then the Conversion  Price of the
debenture shall be immediately  reset to a lower  Conversion Price equal to that
described in the subsequent  agreement.  Warrants are  exercisable at $0.12 into
one share of common stock of the Company and expire on August 17, 2007.

On  July  29th,  2004  Quintek  entered  into an  agreement  with  Langley  Park
Investments PLC, a London  investment  company,  to issue  14,000,000  shares of
Quintek  common  stock to  Langley  in return  for  1,145,595  common  shares of
Langley. Quintek issued these shares of common stock to Langley Park Investments
PLC on August 27, 2004.  Fifty percent of Langley shares issued to Quintek under
this agreement are to be held in escrow for two years.  At the end of two years,
if the market  price for Quintek  common stock is at or greater than the Initial
Closing Price ($0.139),  escrow agent will release the full amount. In the event
that the market price for Quintek common stock is less than the Initial  Closing
Price the amount released will be adjusted.  Langley's initial offering price is
1(pound) (One Pound UK) per share.  Quintek shares are to be held by Langley for
a period of at least two years.  Langley shares issued to Quintek are to be free
trading.  This  transaction was completed on September 30, 2004 when Langley was
approved for trading by the UK Listing Authority. Langley shares are expected to
begin trading on October 7, 2004.

On July 27th, 2004 the Company entered into a Securities Purchase Agreement with
an  individual  investor.  This investor  purchased a convertible  debenture for
fifty  thousand  dollars  ($50,000)  paying ten  percent  (10%)  interest.  This
debenture was  immediately  converted  into the Common Stock of the Company at a
price of $0.10 per share. For each conversion  share, the investor  received one
common stock purchase warrant. Warrants are exercisable to purchase common Stock
of the Company at $0.15 per share and expire on July 27th, 2007.

On  August  2,  2004,  Quintek  signed a Master  Lease  Agreement  with  Vencore
Solutions,  LLC, a venture leasing company located in Lake Oswego, Oregon. Under
the agreement  Quintek  established a lease line of credit for up to $240,000 in
equipment financing. This is a capital lease whereby Quintek pays monthly rental
rate  equal to 3.45% of the  total  hardware  purchases  and  6.35% of the total
software  purchases.  The lease term for hardware  purchases is 36 months and 18
months for software. The effective annual interest rate is roughly 8%. Purchases
made  will be  recognized  both as an asset  and as a  liability  (for the lease
payments) on the balance sheet. The firm gets to claim depreciation each year on
the asset and also deducts the interest  expense  component of the lease payment
each year.  At the end of the lease,  Quintek  has the  option to  purchase  the
equipment or return it. Vencore Solutions received a warrant to purchase 144,000
shares of Quintek common stock at $0.10 per share, expiring on August 2, 2007.

We believe  that the receipt of net  proceeds  from the sale of the common stock
and the exercise of common stock  warrants plus cash generated  internally  from
sales will be sufficient to satisfy our future  operations,  working capital and
other cash requirements for the remainder of the fiscal year. However, if we are
unable to raise sufficient  capital,  we may need to sell certain assets,  enter
into new strategic  partnerships,  reorganize the company, or merge with another
company to effectively maintain  operations.  Our audit for the years ended June
30, 2004 and 2003 contains a going concern qualification.

                                       27
<PAGE>

ITEM 7 FINANCIAL STATEMENTS

See pages F-l, et seq., included herein.

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

On March 15, 2004, the Company received a letter dated March 8, 2004 from Heard,
McElroy  &Vestal  ("Heard  McElroy")  resigning as the Company's its independent
public  accountants.  The decision to resign by Heard  McElroy did not involve a
dispute with the Company over  accounting  policies or  practices.  On March 24,
2004, the Company appointed Kabani & Company, Inc., Certified Public Accountants
("Kabani") as its new  independent  public  accountants.  The decision to retain
Kabani was made by the Company's Board of Directors.

The reports of Heard McElroy on the Company's  financial  statements for each of
the years  ended June 30,  2003 and 2002 did not  contain an adverse  opinion or
disclaimer of opinion,  nor were they  qualified or modified as to  uncertainty,
audit scope or accounting principles, except for the fact that Heard McElroy, in
its report for the past two fiscal years,  has included an opinion that,  due to
the Company's lack of revenue  producing assets and history of losses,  there is
doubt about the Company's ability to continue as a going concern.

During the  Company's  two most recent  fiscal years and through  March 8, 2004,
there  were no  disagreements  with Heard  McElroy  on any matter of  accounting
principles or practices,  financial statement  disclosure,  or auditing scope or
procedure,  which disagreements if not resolved to Heard McElroy's satisfaction,
would have caused Heard McElroy to make  reference to the subject  matter of the
disagreement in connection with its reports on the financial statements for such
years,  except for the fact that Heard  McElroy,  in its report for the past two
fiscal years, has included an opinion that, due to the Company's lack of revenue
producing  assets  and  history of losses,  there is doubt  about the  Company's
ability to continue as a going concern.

During the  Company's  two most recent  fiscal years and through March 15, 2004,
there  have been no  reportable  events  (as  defined  in Item  304(a)(1)(v)  of
Regulation S-K).

The Company has provided Heard McElroy with a copy of this Item 4 disclosure and
has requested  that Heard McElroy review such  disclosures  and provide a letter
addressed  to the  Securities  and  Exchange  Commission  as  specified  by Item
304(a)(3)  of  Regulation  S-K.  Such  letter  is filed as  Exhibit  16.1 to the
Company's Current Report on Form 8-K filed on April 7, 2004.

During the fiscal years ended June 30, 2003 and 2002, and the subsequent interim
period up to March 8, 2004,  the Company did not consult  with Kabani  regarding
(i) the application of accounting principles to a specified transaction,  either
completed  or proposed;  or the type of audit  opinion that might be rendered on
the registrant's financial statements,  and either a written report was provided
to the registrant or oral advice was provided that the new accountant  concluded
was an important  factor  considered by the registrant in reaching a decision as
to the accounting,  auditing or financial reporting; or (ii) any matter that was
either the subject of a disagreement or a reportable event, as described in Item
304(a)(1)(iv) and (a)(1)(v) of Regulation S-K.

ITEM 8A    CONTROLS AND PROCEDURES

Our Chief  Executive  Officer and Chief  Financial  Officer  (collectively,  the
"Certifying   Officers")  are  responsible  for   establishing  and  maintaining
disclosure controls and procedures for the Company. Such officers have concluded
(based on their  evaluation of these controls and procedures as of a date within
90 days of the filing of this report) that the Company's disclosure controls and

                                       28
<PAGE>
procedures are effective to ensure that information  required to be disclosed by
the Company in this report is  accumulated  and  communicated  to the  Company's
management,  including its principal executive officers as appropriate, to allow
timely decisions  regarding required  disclosure.  The Certifying  Officers also
have indicated that there were no significant  changes in the Company's internal
controls  or  other  factors  that  could  significantly  affect  such  controls
subsequent to the date of their evaluation, and there were no corrective actions
with regard to significant deficiencies and material weaknesses.

ITEM 8B    OTHER INFORMATION

Not applicable.

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

9.1  Board of Directors and Executive Officers

Our board of  directors  consists of two members.  Directors  are elected at the
Annual  Meeting of  Shareholders  and serve  until  their  successors  have been
elected and qualified.  Officers are appointed by and serve at the discretion of
the Board of Directors.

The  following  is a summary  description  of our current  directors,  executive
officers and significant employees:

Robert Steele, Age 38, Chief Executive Officer and Director
-----------------------------------------------------------

Robert Steele has been the Company's Chief  Executive  Officer,  President,  and
Chairman of the Board of Directors since January 30, 2003. For nine years,  from
1988  through  1998,  Mr.  Steele  served as  Corporate  Vice  President & Chief
Technology  Officer for CADD  Microsystems,  Inc.  (CMI),  currently the leading
provider of Autodesk  Computer Aided Design software,  consulting,  training and
integration services in the Washington, DC Metropolitan Area. During his time at
CMI, the company grew from $50,000 in annual sales to more than $3,000,000.  Mr.
Steele  sold and  supervised  significant  systems  integration  contracts  with
clients such as Lucent Technologies, Long Airdox Mining (Division of the Fortune
500 Marmon  Group),  ABB, GSA (General  Services  Administration),  FAA (Federal
Aviation  Administration) and NRO (National  Reconnaissance  Office). Mr. Steele
received a Bachelor  of Science in  Electronic  and  Computer  Engineering  from
George Mason University in 1988.

Robert Brownell, Age 49, President
----------------------------------

Robert Brownell has been the Company's President since March 2004. Mr. Brownell,
has  nearly 25 years  experience  within  the  Document  Management  field.  Mr.
Brownell has more than 20 years experience selling  outsourcing at the executive
level. His experience  ranges from building  private  companies from start-up to
over $16 million in annual  revenues to managing  operations and sales forces of
public companies  generating  roughly  $50-$500 million in annual revenues.  Mr.
Brownell has a degree in Business  Administration and Marketing  Management from
Mount San Antonio College.

Mr. Brownell was Vice President,  Worldwide  Channel Sales for Document  Control
Solutions,  Inc., of Fullerton,  CA.  Document  Control  Solutions is one of the
nation's leading document  management systems  integrators with revenues of more
than $15 million dollars. Mr. Brownell directed all company sales and marketing,
administrative infrastructure, project managers and sales engineers. He designed
and  implemented  highly  structured  business plan which  resulted in increased
sales and profits  beyond company  expectations.  He led the effort that doubled
revenues over three consecutive  years. He was personally  presented the FileNET
Dealer of the Year award in 1997.
                                       29
<PAGE>

In the 1980's,  Mr.  Brownell was Branch  Manager,  TAB Products  Company of Los
Angeles,  CA. TAB is a worldwide  leader in records and  information  management
systems for active  documents.  Mr. Brownell had profit and loss  responsibility
for Los Angeles office with a staff of thirty sales,  administrative and service
personnel. He grew sales from $500,000 to $5,000,000 over five years.

Andrew Haag, Age 37, Chief Executive Officer and Director
---------------------------------------------------------

Andrew Haag has been the Company's Chief Financial  Officer and a Director since
January 31, 2003.  Prior to that,  from  December  2002,  he was employed by the
Camelot Group, Inc., an investment banking firm, to assist its corporate clients
on capital structure,  the structure of PIPE transactions and the preparation of
offering documents. From May 2001, Mr. Haag was employed by Aquasearch,  Inc., a
publicly held company,  where he raised  significant funds from private sources,
advised  its CEO on  strategic  business  development  issues  and  successfully
negotiated  several  contracts  to benefit the  company.  Mr.  Haag  assisted in
drafting corporate business plan, terms of investment,  press releases and other
corporate  documents.  From  November 1998 through April 2001 he was employed by
Nutmeg Securities, Ltd., where he advised institutional and individual clientele
on corporate offerings and equity trading, and performed corporate advisory work
for both public and private  companies.  From June 1998 through October 1998 Mr.
Haag was a Managing  Director of Waldron & Co. Inc., an investment  bank located
in Irvine, CA.

From  1992  through  1998 he was  employed  by  Auerbach,  Pollak &  Richardson,
investment  bankers,  located in Stamford,  CT and Beverly Hills,  CA, rising to
Managing Director, where he: assisted in the development of the firm, attracting
and  referring  new hires and clients to all  offices;  developed a national and
international  client base for the firm that  participated  in a majority of the
firm's corporate  offerings;  set up and managed road shows for firm's corporate
clientele;  attracted a wide  variety of  corporate  clientele;  assisted in the
structuring  and funding of offerings  for  corporate  clientele;  and increased
visibility of the firm through  networking of research and  offerings.  Mr. Haag
attended the University of Maine and CUNY Hunter College.

9.2      Compensation of Directors

All of our  directors  are full time  employees  of Quintek.  Because we have no
independent directors, we pay no compensation to any directors for their service
on the board over and above their employment  compensation.  There are no family
relationships among the directors or executive officers.

9.3      Management Committees

We have not established  compensation or executive  committees.  Currently,  our
entire board of directors  serves as our audit  committee.  Because of the small
size of the Company and the risk  attendant  to a small public  company,  we are
currently unable to attract an audit committee  financial expert to our Board of
Directors.

9.4      Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities  Exchange Act requires our directors,  executive
officers  and persons who own more than 10% of our Common  Stock to file reports
of ownership  and changes in  ownership of our common stock with the  Securities
and Exchange Commission.  Directors, executive officers and persons who own more
than 10% of our common stock are required by Securities and Exchange  Commission
regulations to furnish to us copies of all Section 16(a) forms they file.

                                       30
<PAGE>

To our  knowledge,  based  solely  upon  review of the  copies  of such  reports
received or written  representations from the reporting persons, we believe that
during our 2004 fiscal year our  directors,  executive  officers and persons who
own more than 10% of our common  stock  complied  with all Section  16(a) filing
requirements  with the exception of the following:  Form 3 for Robert Brownell's
appointment to the office of President of Quintek was filed on June 29,2004, and
should have been filed on March 22, 2004.

9.5      Code of Ethics

On June 10,  2003 our board of  directors  adopted a code of  ethics,  a copy of
which was filed as an exhibit to our report on Form 10-KSB for fiscal year 2003,
that applies to our principal  executive and  financial  officers.  We intend to
file  amendments,  changes or waivers to the code of ethics as  required  by SEC
rules.

ITEM 10 EXECUTIVE COMPENSATION

None of our executive  officers received a total annual salary and bonus of more
than $100,000 for the year ended June 30, 2004. The following  table  summarizes
the yearly  compensation  of our past and current  President for the three years
ended June 30, 2004.

<TABLE>
<CAPTION>
                  ----------------- Annual Compensation ------    ---------- Long Term Compensation -------------

                                                                                   Securities
                                              Other Annual        Restricted       Underlying        All Other
Name              Year            Salary      Compensation (3)    Stock Awards     Options           Compensation
----              ----            ------      ----------------    ------------     -----------       ------------
<S>               <C>          <C>              <C>              <C>               <C>               <C>
Tom Sims          FY2003       $   19,400       $    1,570             --               --               --
President         FY2002       $   19,500       $    6,106       $   68,000 (4)         --               --

Robert Steele
Chairman &CEO     FY2004       $   72,000             --               --               --               --
President         FY2003          $30,000 (1)   $    2,500             --               --               --

Andrew Haag       FY2004       $   72,000             --               --               --               --
CFO               FY2003          $30,000 (5)         --               --               --               --

Robert Brownell   FY2004          $37,500 (2)         --               --               --               --
President
</TABLE>
Notes:

1)   Represents  compensation  received by Steele while serving as our President
     and CEO from  2/1/03 to  6/30/03 2)  Represents  compensation  received  by
     Brownell while serving as our President from 3/12/04 to 6/30/04

3)   These amounts represent the Company's payments to provide an automobile and
     health insurance for Mr. Sims and Mr. Steele.

4)   This  represents an issuance of 200,000  shares of restricted  common stock
     valued at $0.06 per share and 800,000  shares of  restricted  common  stock
     valued at $0.07 per share to or for the benefit of Tom Sims

5)   Represents  compensation received by Mr. Haag while serving as our CFO from
     2/1/03 to 6/30/03.

                                       31
<PAGE>

Quintek  did not  grant  any  stock  options  or stock  appreciation  rights  or
Long-Term  Incentive  Plan Awards to its  officers or  employees,  in the fiscal
years ended June 30, 2004 or June 30, 2003.

ITEM 11 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The  following  table  sets  forth the  ownership  of our  common  stock,  as of
September 9, 2004 by our directors and significant shareholders. On September 9,
2004,  200,000,000  shares  of  our  stock  were  authorized  and  approximately
70,068,566  shares of our common stock were  outstanding.  This  information was
given to us by the transfer agent and the numbers are based on definitions found
in Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934.
<TABLE>
<CAPTION>
                     Shareholder                                 Title                     Shares          %
                     -----------                                 -----                  ------------     -----

<S>                                                     <C>                               <C>             <C>
Officers, Directors and Key Employees
Robert Steele, CEO and Chairman (1) (2)                 CEO & Chairman                     3,275,297       4.7%
Robert Brownell, President (3) (4)                      President                            861,062       1.2%
Andrew Haag (5) (6)                                     CFO, Director                      3,275,297       4.7%
Kurt Kunz (7)                                           Founder / VP Engineering           3,825,429       5.5%
Key Investors
Zubair Kazi                                             Investor                           6,936,788 9.9%
Institutional Ownership
Langley Park Investments PLC                            Investor                          14,000,000      19.6%
Golden Gate Investors (8)                               Investor                           3,000,000       4.3%
All directors and officers as a group (3 persons)                                          7,411,656      10.6%

</TABLE>
(1)      Includes 2,275,297 options to purchase stock at $.03 until September 8,
         2009
(2)      Includes  1,000,000  Series A Preferred Stock  convertible  into common
         stock on a 1 for 1 basis
(3)      Includes  611,062  options to purchase stock at $.10 until September 8,
         2009
(4)      Includes 250,000 Series A Preferred Stock convertible into common stock
         on a 1 for 1 basis
(5)      Includes 2,275,297 options to purchase stock at $.03 until September 8,
         2009
(6)      Includes  1,000,000  Series A Preferred Stock  convertible  into common
         stock on a 1 for 1 basis
(7)      Includes  142,857  warrants  to  purchase  common  stock at  $0.13  and
         1,100,000 warrants to purchase common stock at $0.175.
(8)      Includes  3,000,000  options to  purchase  common  stock at $1.00 until
         August 2, 2007.

(9)      On September 30, 2004,  Kazi  Management  VI, LLC (KMVI) held 2,437,072
         shares and  $500,000 in notes  convertible  into common stock at $0.06.
         Upon  conversion of the notes,  KMVI will receive  8,333,333  shares of
         common  stock and a warrant to purchase  one share of common  stock for
         each conversion share at $0.06 exercisable within five years. KMVI does
         not have the right to convert any portion of the Note(s) or  Warrant(s)
         that would  cause KMVI to be deemed the  beneficial  owner of more than
         nine  point nine  percent  (9.9%) of the  outstanding  shares of Common
         Stock of the Company.  Therefore,  as of September  30, 2004,  KMVI was
         only in control of 6,936,788 shares.
(10)     As of September 28, 2004,  Langley Park Investment's  14,000,000 shares
         of  Quintek   common  stock  were  issued  and  held  in  escrow  until
         fulfillment  of conditions by Langley Park  Investment  pursuant to its
         July 29, 2004 agreement with Quintek .

                                       32
<PAGE>

ITEM 12 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

On April 26, 2004,  Quintek issued a convertible note for $100,000 in cash to an
accredited  investor.  The note bears 10% simple  interest  and matures one year
from the above date. The note converts into common stock at $0.06 a share.

On June 7, 2004,  Quintek issued a convertible  note titled for $100,000 in cash
to an accredited  investor.  The note bears 10% simple  interest and matures one
year from the above date. The note converts into common stock at $0.06 a share.

On November  26, 2003,  Quintek  issued a warrant to an  accredited  investor to
purchase 8,333,333 shares of Quintek common stock at an of exercise price $0.06,
expiring  November  26,  2008,  in  consideration  for  $500,000  investment  in
convertible notes.

On July 23, 2003,  Quintek  issued a warrant to TJ&K  Investment  Trust,  LLC to
purchase  142,857  shares of Quintek Common Stock at an exercise price of $0.13,
expiring July 23, 2006 in consideration for a stock loan to Quintek of 1,428,572
shares of common stock. In additional  consideration  for the loan of stock from
the lender,  Quintek  released  the lender  from a lock up on 285,714  shares of
common stock.

On November 6, 2003,  Quintek issued a warrant to TJ&K Investment  Trust, LLC to
purchase  1,100,000  shares of  Quintek  Common  Stock at an  exercise  price of
$0.175,  expiring  November 6, 2008 in consideration for a stock loan to Quintek
of 1,100,000 shares of common stock.

ITEM 13 EXHIBITS


2.1#          Agreement and Plan of Reorganization between Quintek Technologies,
              Inc., and Juniper Acquisition Corporation.

3.1*          Articles of Incorporation.

3.2*          Bylaws.

4.1**         Form of Irrevocable Proxy Granted to Chief Executive Officer dated
              January 30 or 31, 2003

   10.4*** Consulting Agreement between Quintek Technologies, Inc. and Robert
        Steele dated December 16, 2002 (previously filed as Exhibit 10.1)

10.5***       Consulting Agreement between Quintek Technologies, Inc. and Zubair
              Kazi dated January 31, 2003 (previously filed as Exhibit 10.2).

10.6***       Warrant  Agreement between Quintek  Technologies,  Inc. and Zubair
              Kazi dated January 31, 2003 (previously filed as Exhibit 10.3).

10.7****      Purchase Order Financing Agreement dated June 2, 2003 between Kazi
              Management  VI, LLC and  Quintek  Technologies,  Inc.  (previously
              filed as Exhibit 10.1).

10.8*****     Consulting Agreement between Quintek  Technologies,  Inc. and Gary
              Litt dated February 3, 2003 (previously filed as Exhibit 10.4).

10.9##        Employment Agreement between Quintek Technologies, Inc. and Robert
              Steele dated January 31, 2003

10.10##       Employment Agreement between Quintek Technologies, Inc. and Andrew
              Haag dated January 31, 2003

                                       33
<PAGE>


10.11###      Employment Agreement between Quintek Technologies, Inc. and Robert
              Brownell dated March 12, 2004


10.12###      Note Purchase Agreement between Quintek Technologies, Inc. and
              Kazi Management V.I. LLC dated November 26, 2003.

10.13###      Convertible  Note I between  Quintek  Technologies,  Inc. and Kazi
              Management V.I. LLC dated November 26, 2003.

10.14###      Convertible  Note II between Quintek  Technologies,  Inc. and Kazi
              Management V.I. LLC dated February 8, 2004.

10.15###      Convertible Note III between Quintek  Technologies,  Inc. and Kazi
              Management V.I. LLC dated March 13, 2004.

10.16###      Convertible  Note IV between Quintek  Technologies,  Inc. and Kazi
              Management V.I. LLC dated April 26, 2004.

10.17###      Convertible  Note V between  Quintek  Technologies,  Inc. and Kazi
              Management V.I. LLC dated June 7, 2004.

10.18###      Loan and Security Agreement between Quintek Technologies, Inc. and
              Kazi Management V.I. LLC dated November 26, 2003.

10.19###      Warrant to Purchase  Common  Stock of Quintek  Technologies,  Inc.
              issued to Kazi Management V.I., Inc. dated November 26, 2003.

10.20###      Registration Rights Agreement between Quintek  Technologies,  Inc.
              and Kazi Management V.I. LLC dated November 26, 2003.

10.21###      Stock  Purchase  Agreement  between  Quintek  Technologies,   Inc.
              Langley Park Investments PLC dated July 7, 2004

10.22###      Securities Purchase Agreement between Quintek  Technologies,  Inc.
              and Golden Gate Investors, Inc. dated July 29 , 2004

              (10.22a)  $300,000 5 3/4%  CONVERTIBLE  DEBENTURE  dated August 2,
              2004 (10.22b) Letter regarding  "Registration  Statement Legal and
              Accounting  Fees" to Golden Gate Investors,  Inc. dated July 2004.
              (10.22c)  Letter  regarding  "Warrant  Prepayment"  to Golden Gate
              Investors,  Inc.  dated July 2004.  (10.22d)  Registration  Rights
              Agreement dated as of August 2, 2004 between Quintek Technologies,
              Inc., and Golden Gate Investors, Inc. (10.22e) Warrant To Purchase
              3,000,000  shares of Common  Stock of Quintek  Technologies,  Inc.
              dated July 2004.

20.1##        Code of Ethical Conduct adopted June 10, 2003

20.2##        Audit Committee Charter adopted June 11, 2003

ITEM 13 EXHIBITS

31.1          Certification  pursuant to Rule 13a-14 of the Securities  Exchange
              Act, as adopted pursuant to Section 302 of the  Sarbanes-Oxley Act
              of 2002, of the Chief Executive  Officer of Quintek  Technologies,
              Inc.

31.2          Certification  pursuant to Rule 13a-14 of the Securities  Exchange
              Act, as adopted pursuant to Section 302 of the  Sarbanes-Oxley Act
              of 2002, of the Chief Financial  Officer of Quintek  Technologies,
              Inc.

                                       34



32.1          Certification  pursuant  to 18 U.S.C.  Section  1350,  as  adopted
              pursuant to Section 906 of the  Sarbanes-Oxley Act of 2002, of the
              Chief Executive Officer of Quintek Technologies, Inc.

32.2          Certification  pursuant  to 18 U.S.C.  Section  1350,  as  adopted
              pursuant to Section 906 of the  Sarbanes-Oxley Act of 2002, of the
              Chief Financial Officer of Quintek Technologies, Inc.



#    Incorporated by reference to Exhibit 2.1 to the Form 8-K dated February 24,
     2000.
*    Incorporated by reference to Form 10-KSB for the fiscal year ended June 30,
     2000.
**   Incorporated  by reference to Form 10-QSB for quarter  ended  Dec.31, 2002.
***  Incorporated by reference to Registration Statement on Form S-8 filed
     March 11, 2003.
**** Incorporated   by   reference   to  Form  8-K   filed   July  14,   2003.
*****Incorporated by reference to Registration Statement on Form S-8 filed
     August 18, 2003.
##   Incorporated by reference to Form 10-KSB for the fiscal year ended June 30,
     2003
###  Incorporated  by reference to Form  10-KSB/A for the fiscal year ended June
     30, 2003,  filed with the Securities and Exchange  Commission.  October 11,
     2004.


ITEM 14 PRINCIPAL ACCOUNTANT FEES AND SERVICES

Audit Fees

The aggregate fees billed by the Company's  auditors for  professional  services
rendered  in  connection  with the audit of the  Company's  annual  consolidated
financial  statements  for fiscal 2004 and 2003 and reviews of the  consolidated
financial  statements  included in the  Company's  Forms 10-QSB were $20,375 for
2003 and $20,000 for 2004.

Audit-Related Fees

For  fiscal  2004 and 2003,  the  Company's  auditors  did not bill any fees for
assurance and related services that are reasonably related to the performance of
the audit or review of the Company's  financial  statements and are not reported
under "Audit Fees" above.

Tax Fees

No fees were billed by the Company's auditors for professional  services for tax
compliance, tax advice, and tax planning for fiscal 2004 and 2003, respectively.

All Other Fees

No fees were billed by the Company's  auditors for all other non-audit  services
rendered to the  Company,  such as attending  meetings  and other  miscellaneous
financial consulting, in fiscal 2004 and 2003.

Audit Committee

The  audit  committee  meets  prior to  filing  of any Form  10-QSB or 10-KSB to
approve those filings.  In addition,  the committee meets to discuss audit plans
and  anticipated  fees for audit and tax work prior to the  commencement of that
work. Approximately 100% of all fees paid to our independent auditors for fiscal
2004 are pre-approved by the audit committee.

                                       35
<PAGE>



                                   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.





Date:  July 15, 2005               QUINTEK TECHNOLOGIES, INC.


                                    By:  /s/ Robert Steele
                                         ---------------------------------------
                                         Robert Steele, Chief Executive Officer



Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following  persons on behalf of the  registrant and
in the capacities indicated.





Date:  July 15, 2005               /s/ Robert Steele
                                   ---------------------------------------------
                                      Robert Steele, Chief Executive Officer
                                        and Director


Date:  July 15, 2005               /s/ Andrew Haag
                                   ---------------------------------------------
                                      Andrew Haag, Chief Financial Officer
                                        and Director



                                       36
<PAGE>




                           QUINTEK TECHNOLOGIES, INC.

                              FINANCIAL STATEMENTS

                                  JUNE 30, 2004







<PAGE>


             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM



To the Stockholders and Board of Directors
Quintek Technologies, Inc

We have audited the accompanying balance sheet of Quintek Technologies,  Inc. (a
California  Corporation)  as of June 30,  2004  and the  related  statements  of
operations,  stockholders' deficit and cash flows for the year then ended. 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 of these  statements 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 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 Quintek Technologies,  Inc. as
of June 30,  2004 and the results of its  operations  and its cash flows for the
year ended June 30, 2004 in  conformity  with  accounting  principles  generally
accepted in the United States of America.

The  accompanying  financial  statements  have been  prepared  assuming that the
Company  will  continue  as a  going  concern.  As  discussed  in Note 21 to the
combined financial  statements,  the Company's  significant operating losses and
insufficient  capital raise substantial doubt about its ability to continue as a
going concern.  Management's plans regarding those matters also are described in
Note 21. The combined  financial  statements do not include any adjustments that
might result from the outcome of this uncertainty.




/s/ KABANI & COMPANY, INC.
---------------------------------
Huntington Beach, California
September 21, 2004



                                       F-1
<PAGE>


To the Board of Directors and Stockholders
Quintek Technologies, Inc.
Camarillo, California

                          Independent Auditor's Report

We have audited the accompanying balance sheet of Quintek Technologies,  Inc. as
of June 30,  2003,  and the  related  statements  of  operations,  stockholders'
(deficit),  and cash flows for the year then ended.  These financial  statements
are the  responsibility of the Company's  management.  Our  responsibility is to
express an opinion on these financial statements based on our audit.

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

In our opinion,  based on our audit, the 2003 financial  statements  referred to
above  present  fairly,  in all material  respects,  the  financial  position of
Quintek  Technologies,  Inc.  as of  June  30,  2003,  and  the  results  of its
operations and cash flows for the year then ended, in conformity with accounting
principles generally accepted in the United States of America.

The  accompanying  financial  statements  have been prepared in conformity  with
accounting principles generally accepted in the United States of America,  which
contemplate continuation of the Company as a going concern; however, the Company
has experienced  losses from  operations and substantial  doubts exist as to its
ability to continue  as a going  concern.  Continuation  is  dependent  upon the
success of future operations.  Management's plans in regard to those matters are
described in Note 2. The  financial  statements  do not include any  adjustments
that might result from the outcome of this uncertainty.

HEARD, McELROY & VESTAL, LLP
Shreveport, LA
September 18, 2003

                                      F-1/A


                           QUINTEK TECHNOLOGIES, INC.
                                  BALANCE SHEET
                                  JUNE 30, 2004


                                     ASSETS
                                     ------

                 CURRENT ASSETS:

      Cash & cash equivalents                                       $ 15,600
      Accounts receivable (net of allowance for doubtful accounts
      $15,179)                                                        28,736
      Prepaid expenses                                                 5,264
                                                                    --------
            Total current assets                                      49,600

PROPERTY AND EQUIPMENT, net                                           73,419

OTHER ASSETS:
      Deposits                                                         8,416
      Intangible assets, net                                          14,951
      Other assets                                                       889
                                                                    --------

                                                                        $147,275
                                                                    ========



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

                                       F-2
<PAGE>
>


<TABLE>
<CAPTION>
                      LIABILITIES AND STOCKHOLDERS' DEFICIT
                      -------------------------------------

                 CURRENT LIABILITIES:

<S>                                                                  <C>
      Accounts payable & accrued expenses                            $    438,826
      Factoring payables                                                   43,230
      Payroll and payroll taxes payable                                   187,138
      Payroll taxes assumed in merger                                      96,661
      Current portion of long-term debt                                    47,504
      Loans payable-stockholders                                          244,056
      Convertible bonds                                                    62,495
      Convertible notes                                                   500,000
      Deferred revenue                                                     87,040
      Liabilities in process of conversion to stock                       470,629
                                                                     ------------
            Total current liabilities                                   2,177,580

      Long term debt , net of current portion                              63,379

STOCKHOLDERS' DEFICIT
      Common stock, .001 par value; authorized shares 50,000,000
        issued and outstanding  shares 48,749,994                         487,500
      Additional paid in capital                                       20,475,680
      Shares to be issued-Series A Preferred stock, 250,000 shares         40,000
      Unamortized consulting fees                                         (35,798)
      Accumulated deficit                                             (23,061,065)
                                                                     ------------
            Total stockholders' deficit                                (2,093,683)


TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT                          $    147,275
                                                                     ============
</TABLE>



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

                                       F-3
<PAGE>


<TABLE>
<CAPTION>
                           QUINTEK TECHNOLOGIES, INC.
                            STATEMENTS OF OPERATIONS
                   FOR THE YEARS ENDED JUNE 30, 2004 AND 2003

                                                            2004             2003
                                                        ------------    ------------

<S>                                                     <C>             <C>
Net revenue                                             $    298,653    $    388,888

Cost of revenue                                              184,964         261,050
                                                        ------------    ------------

Gross profit                                                 113,689         127,838

Operating expenses
        Selling, general and administrative                  960,209         601,090

        Inventory write off                                   35,259            --

        Impairment - investment                               28,778            --
        Stock based compensation for services                 59,000         221,183
                                                        ------------    ------------
Total Operating Expenses                                   1,083,246         822,273

                                                        ------------    ------------
Loss from Operations                                        (969,557)       (694,435)

Non-operating income (expense):
        Gain on investments                                       16          19,792
        Other income                                             157          17,500

        Interest income                                       11,136            --
        Interest expense                                     (39,483)        (43,910)
                                                        ------------    ------------
Total non-operating income (expense)                         (28,174)         (6,618)

                                                        ------------    ------------
Loss before provision for income taxes                      (997,731)       (701,053)


Provision for income taxes                                       800            --

                                                        ------------    ------------
Net loss                                                $   (998,531)   $   (701,053)
                                                        ============    ============

Basic and diluted net loss per share                    $      (0.02)   $      (0.01)
                                                        ============    ============

Basic and diluted weighted average shares outstanding     48,164,549      46,762,008
                                                        ============    ============
</TABLE>

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

                                       F-4
<PAGE>
<TABLE>
<CAPTION>
                                                     QUINTEK TECHNOLOGIES, INC.
                                                 STATEMENTS OF STOCKHOLDERS' DEFICIT
                                             FOR THE YEARS ENDED JUNE 30, 2004 AND 2003
                          Common stock
                    ---------------------------                                      Un-                            Total
                                                    Additional     Shares         amortized        Accum-           stock-
                                                     paid in       to be          consulting       ulated          holder's
                      Shares         Amount          capital       issued            fees          deficit          deficit
                    ------------   ------------   ------------   ------------   ------------    ------------    ------------
<S>                   <C>          <C>            <C>            <C>            <C>             <C>             <C>
Balance at June       40,162,008   $    401,620   $ 19,997,017   $       --     $       --      $(21,361,481)   $   (962,844)
30, 2002

Stock issuances        6,600,000         66,000        266,383           --             --              --           332,383


Warrant issuances           --             --           20,691           --             --              --            20,691

Allowance on
subscription
receivable                  --             --           42,689           --             --              --            42,689

Net loss for the
year ended June
30, 2003                    --             --             --             --             --          (701,053)       (701,053)
                    ------------   ------------   ------------   ------------   ------------    ------------    ------------

Balance at June
30, 2003              46,762,008        467,620     20,326,780           --             --       (22,062,534)     (1,268,134)

Issuance of
shares for
services                 200,000          2,000         13,000           --             --              --            15,000

Issuance of
shares for
conversion of
bond and interest      1,773,695         17,737         88,685           --             --              --           106,422

Issuance of
shares for debt
settlement                14,291            143          1,643           --             --              --             1,786

250,000 shares of
Pref. stock to be
issued for
compensation                --             --             --           40,000           --              --            40,000

Common stock
options granted             --             --            4,000           --             --              --             4,000

Issuance of stock
warrants                    --             --           41,572           --          (35,798)           --             5,774

Net loss for the
year ended June
30, 2004                    --             --             --             --             --          (998,531)       (998,531)
                    ------------   ------------   ------------   ------------   ------------    ------------    ------------
Balance at June
30, 2004              48,749,994   $    487,500   $ 20,475,680   $     40,000   $    (35,798)   $(23,061,065)   $ (2,093,683)
                    ============   ============   ============   ============   ============    ============    ============
</TABLE>
   The accompanying notes are an integral part of these financial statements.
                                       F-5
<PAGE>
<TABLE>
<CAPTION>
                           QUINTEK TECHNOLOGIES, INC.
                            STATEMENTS OF CASH FLOWS
                   FOR THE YEARS ENDED JUNE 30, 2004 AND 2003

                                                                                    2004           2003
                                                                                 -----------     ----------
      CASH FLOWS FROM OPERATING ACTIVITIES:
<S>                                                                                <C>          <C>
              Net loss                                                             $(998,531)   $(701,053)
              Adjustments to reconcile net loss to net cash
                 used in operating activities:
                   Depreciation and amortization                                      50,730       46,195

                   Impairment of investment                                           28,778         --

                   Inventory write off                                                35,259         --

                   Issuance of stock for services                                     15,000      221,183

                   Issuance of stock issued for interest payment                      17,222         --

                   Shares to be issued for compensation                               40,000         --

                   Issuance of warrant for service                                     5,774         --
                   Stock options
                   granted                                                             4,000

                   Subscription receivable forgiven for services                        --         42,689
                   (Increase) decrease in current assets:
                          Accounts receivable                                         44,382      (45,906)

                          Inventory                                                  (30,888)      53,055

                          Other assets                                                 3,593       (4,279)

                          Prepaid Expenses                                             3,353         --

                          Deposits                                                    (6,021)       2,599

                          Investments                                                    (16)     (19,792)
                   Increase (decrease) in current liabilities:
                          Accounts payable and accrued expenses                      119,040       82,135
                          Payroll and payroll taxes payable                           51,023       80,806

                          Payroll taxes assumed in merger                            (26,611)        --
                          Deferred revenue                                            46,006       13,148

                          Liabilities in process of conversion to stock                1,960         --
                                                                                   ---------    ---------
              Total Adjustments                                                      402,584      471,833
                                                                                   ---------    ---------
                           Net cash used in operating activities                    (595,947)    (229,220)
                                                                                   ---------    ---------
(continued)
</TABLE>

                                       F-6
<PAGE>
<TABLE>
<CAPTION>

      CASH FLOWS FROM INVESTING ACTIVITIES

<S>                                                                                <C>             <C>
                   Payments for property & equipment                                    --         (5,803)

                   Proceeds from sale of investment                                     --         19,792

                   Decrease in employee receivables                                     --         (1,199)
                                                                                   ---------    ---------
                           Net cash provided by investing activities                    --         12,790
                                                                                   ---------    ---------

      CASH FLOWS FROM FINANCING ACTIVITIES:

                   Subscriptions receivable                                             --         12,200

                   Payments on factoring payables                                   (131,885)        --
                   Proceeds from factor                                               28,225      126,890
                   Proceeds (payment) on loans from stockholders                     211,756       (4,100)

                   Payments on notes payable                                         (17,711)        --

                   Proceeds from convertible notes                                   500,000         --

                   Proceeds from issuance of common stock                               --        100,000
                                                                                   ---------    ---------
                           Net cash provided by  financing activities                590,385      234,990
                                                                                   ---------    ---------

                 NET INCREASE (DECREASE) IN CASH & CASH EQUIVALENTS                   18,560       (5,562)


                 CASH & CASH EQUIVALENTS, BEGINNING BALANCE                           21,162        2,602

                                                                                   ---------    ---------

                 CASH & CASH EQUIVALENTS, ENDING BALANCE                           $  15,600    $  21,162
                                                                                   =========    =========
</TABLE>


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


                                       F-7
<PAGE>

                           QUINTEK TECHNOLOGIES, INC.
                          NOTES TO FINANCIAL STATEMENTS

1. DESCRIPTION OF BUSINESS

The  Company  was  originally  incorporated  under  the  laws  of the  State  of
California on April 16, 1993, as Quintek Electronics,  Inc. On January 14, 1999,
the Company  merged with  Pacific  Diagnostic  Technologies,  Inc. in a business
combination accounted for as a purchase. The acquisition took place under a plan
of reorganization.  Quintek Electronics,  Inc. ("QEI") became public when it was
acquired by Pacific  Diagnostic  Technologies,  Inc.  ("PDX")  through a reverse
merger and Chapter 11 Plan of Reorganization.  Under the plan, all assets of QEI
were sold to PDX, all PDX management  resigned once the Plan was confirmed,  and
QEI's  management and operating  plan were adopted by the new operating  entity.
Shortly after the  confirmation of the plan, the name of the reorganized  debtor
was  changed to Quintek  Technologies,  Inc.  ("QTI").  QTI  assumed the assets,
liabilities, technology and public position of both QEI and PDX.

On February 24, 2000, the Company  acquired all of the outstanding  common stock
of Juniper Acquisition  Corporation  ("Juniper").  For accounting purposes,  the
acquisition was treated as a  capitalization  of the Company with the Company as
the acquirer (reverse acquisition).

The  Company  was   established   for  the   primary   purpose  of   developing,
manufacturing,   and   distributing   the  4300  Aperture  Card  Imaging  System
technologies,  used for  recording  digital  images on aperture card media ("the
4300 system").

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES & REALIZATION OF ASETS

Use of estimates

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

Cash and cash equivalents

The Company considers all liquid  investments with a maturity of three months or
less from the date of purchase that are readily convertible into cash to be cash
equivalents.

Accounts Receivable

The  Company  maintains   reserves  for  potential  credit  losses  on  accounts
receivable.  Management  reviews  the  composition  of accounts  receivable  and
analyzes  historical  bad  debts,  customer   concentrations,   customer  credit
worthiness,  current economic trends and changes in customer payment patterns to
evaluate the adequacy of these  reserves.  Reserves are recorded  primarily on a
specific  identification basis. Allowance for doubtful debts amounted to $15,179
as at June 30, 2004.

Inventories

Inventories  are  valued at the  lower of cost  (determined  on FIFO,  first-in,
first-out) or market.  The Management  compares the cost of inventories with the
market value and  allowance is made for writing  down the  inventories  to there
market value, if lower.

                                       F-8
<PAGE>
Equity Method of Accounting for Investments

Investments  in  companies in which the Company has a 20% to 50% interest or has
significant  influence over the operating and financial policies of the investee
are  carried  at  cost,  adjusted  for  the  Company's  proportionate  share  of
undistributed earnings or losses.

Property & Equipment

Property and  equipment are stated at cost.  Expenditures  for  maintenance  and
repairs are charged to earnings as incurred; additions, renewals and betterments
are capitalized.  When property and equipment are retired or otherwise  disposed
of,  the  related  cost  and  accumulated  depreciation  are  removed  from  the
respective   accounts,   and  any  gain  or  loss  is  included  in  operations.
Depreciation of property and equipment is provided using the straight-line  over
the estimated useful lives (3-7 years) of the assets.

Intangible Assets

Intangible assets consist of patents and purchased proprietary processes and are
being amortized using straight-line  method over their remaining useful lives of
4 years. The Company evaluates intangible assets for impairment,  at least on an
annual basis and whenever events or changes in  circumstances  indicate that the
carrying  value may not be  recoverable  from its  estimated  future cash flows.
Recoverability  of intangible  assets,  other long-lived assets and, goodwill is
measured by comparing their net book value to the related projected undiscounted
cash flows from these  assets,  considering a number of factors  including  past
operating  results,  budgets,  economic  projections,  market trends and product
development  cycles.  If the net book  value of the asset  exceeds  the  related
undiscounted cash flows, the asset is considered impaired,  and a second test is
performed to measure the amount of  impairment  loss.  Potential  impairment  of
goodwill after July 1, 2002 is being  evaluated in accordance with SFAS No. 142.
The SFAS No.  142 is  applicable  to the  financial  statements  of the  Company
beginning July 1, 2002.

Long-lived assets

Effective January 1, 2002, the Company adopted Statement of Financial Accounting
Standards  No. 144,  "Accounting  for the  Impairment  or Disposal of Long-Lived
Assets" ("SFAS 144"), which addresses financial accounting and reporting for the
impairment  or  disposal  of  long-lived  assets and  supersedes  SFAS No.  121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
be Disposed Of," and the accounting and reporting  provisions of APB Opinion No.
30,  "Reporting  the  Results of  Operations  for a  Disposal  of a Segment of a
Business." The Company  periodically  evaluates the carrying value of long-lived
assets  to be held and used in  accordance  with  SFAS  144.  SFAS 144  requires
impairment losses

to be recorded  on  long-lived  assets used in  operations  when  indicators  of
impairment are present and the undiscounted cash flows estimated to be generated
by those assets are less than the assets'  carrying  amounts.  In that event,  a
loss is recognized  based on the amount by which the carrying amount exceeds the
fair market value of the  long-lived  assets.  Loss on  long-lived  assets to be
disposed of is  determined in a similar  manner,  except that fair market values
are reduced for the cost of disposal.

Accounts payable & accrued expenses

Accounts payable and accrued expenses consist of the following:

            Accounts payable                            $   203,612
            Accrued expenses                                235,214
                                                        -----------
                                                        $   438,826
                                       F-9
<PAGE>

Software development costs

The Company has adopted Statement of Position 98-1 ("SOP 98-1")  "Accounting for
the Costs of Computer  Software  Developed or Obtained for Internal Use", as its
accounting policy for internally  developed  computer software costs.  Under SOP
98-1, computer software costs incurred in the preliminary  development stage are
expensed as incurred.  Computer  software costs incurred  during the application
development  stage are capitalized  and amortized over the software's  estimated
useful life.

The Company makes on-going  evaluations of the recoverability of its capitalized
software by comparing the amount  capitalized  for each product to the estimated
net  realizable  value of the product.  If such  evaluations  indicate  that the
unamortized  software  development  costs exceed the net realizable  value,  the
Company writes off the amount which the unamortized  software  development costs
exceed net realizable value.

Advertising

The Company expenses advertising costs as incurred. Advertising expense was $792
and $236 for the years ended June 30, 2004 and 2003, respectively.

Research and Development

Expenditures  for  software  development  costs and  research  are  expensed  as
incurred.  The amounts  charged to operations  for the years ended June 30, 2004
and 2003 were $5,026 and $58,000, respectively.

Income taxes

Deferred taxes are provided for on a liability method for temporary  differences
between the  financial  reporting and tax basis of assets and  liabilities  that
will result in taxable or deductible amounts in the future.  Deferred tax assets
and liabilities are adjusted for the effects of changes in tax laws and rates on
the date of enactment. Deferred tax assets are reduced by a valuation

allowance  when, in the opinion of  management,  it is more likely than not that
some portion or all of the  deferred  tax assets will be realized.  For the year
ended June 30, 2004, such differences were insignificant.

Stock-based compensation

SFAS No. 123 prescribes  accounting and reporting  standards for all stock-based
compensation plans, including employee stock options, restricted stock, employee
stock  purchase  plans and stock  appreciation  rights.  SFAS No.  123  requires
compensation  expense to be recorded (i) using the new fair value method or (ii)
using the existing  accounting rules  prescribed by Accounting  Principles Board
Opinion No. 25,  "Accounting for stock issued to employees" (APB 25) and related
interpretations  with  proforma  disclosure  of what net income and earnings per
share would have been had the Company  adopted  the new fair value  method.  The
Company  has chosen to account for  stock-based  compensation  using  Accounting
Principles Board Opinion No. 25,  "Accounting for Stock Issued to Employees" and
has  adopted  the  disclosure   only   provisions  of  SFAS  123.   Accordingly,
compensation  cost for stock  options is measured as the excess,  if any, of the
quoted  market  price of the  Company's  stock at the date of the grant over the
amount an employee is required to pay for the stock.

The  Company's  board  of  directors  authorized  a stock  award  and  long-term
incentive  plan which  includes  stock  appreciation  rights and  certain  stock
incentive awards. The plan was approved by the shareholders as of June 30, 2004.

                                      F-10
<PAGE>

Fair value of financial instruments

Statement of financial accounting standard No. 107, Disclosures about fair value
of financial  instruments,  requires that the Company  disclose  estimated  fair
values of financial instruments. The carrying amounts reported in the statements
of financial position for current assets and current  liabilities  qualifying as
financial instruments are a reasonable estimate of fair value.

Basic and diluted net loss per share

Net loss per share is calculated  in accordance  with the Statement of financial
accounting  standards No. 128 (SFAS No. 128), "Earnings per share". SFAS No. 128
superseded  Accounting  Principles  Board  Opinion  No.15 (APB 15). Net loss per
share for all periods  presented  has been  restated to reflect the  adoption of
SFAS No. 128. Basic net loss per share is based upon the weighted average number
of  common  shares  outstanding.  Diluted  net  loss  per  share is based on the
assumption that all dilutive convertible shares and stock options were converted
or exercised.  Dilution is computed by applying the treasury stock method. Under
this method,  options and warrants are assumed to be exercised at the  beginning
of the period (or at the time of issuance,  if later),  and as if funds obtained
thereby were used to purchase  common  stock at the average  market price during
the period.

Revenue Recognition

Revenue is  recognized  when  earned.  The  Company  recognizes  its  revenue in
accordance with the Securities and Exchange Commissions ("SEC") Staff Accounting
Bulletin No. 104, "Revenue Recognition in Financial  Statements" ("SAB 104") and
The American  Institute of Certified Public Accountants  ("AICPA")  Statement of
Position ("SOP") 97-2, "Software Revenue  Recognition," as amended as amended by
SOP 98-4 and SOP 98-9.

Issuance of shares for service

The Company accounts for the issuance of equity instruments to acquire goods and
services  based on the fair value of the goods and services or the fair value of
the  equity  instrument  at the time of  issuance,  whichever  is more  reliably
measurable.

Derivative Instruments

In June 1998,  the  Financial  Accounting  Standards  Board issued SFAS No. 133,
"Accounting for Derivative Instruments and Hedging Activities." SFAS No. 133, as
amended by SFAS No. 137, is effective for fiscal years  beginning after June 15,
2000.  SFAS No. 133 requires the Company to recognize all  derivatives as either
assets or liabilities  and measure those  instruments at fair value.  It further
provides  criteria for  derivative  instruments  to be designated as fair value,
cash flow and foreign  currency  hedges and  establishes  respective  accounting
standards for reporting changes in the fair value of the derivative instruments.
After  adoption,  the Company is required to adjust hedging  instruments to fair
value in the  balance  sheet and  recognize  the  offsetting  gains or losses as
adjustments  to be  reported  in net income or other  comprehensive  income,  as
appropriate.  The Company has complied  with the  requirements  of SFAS 133, the
effect of which was not material to the Company's  financial position or results
of operations as the Company does not participates in such activities.

Reporting segments

Statement of financial  accounting standards No. 131, Disclosures about segments
of an  enterprise  and related  information  (SFAS No.  131),  which  superseded
statement of financial  accounting  standards  No. 14,  Financial  reporting for
segments of a business enterprise, establishes standards for the way that public

                                      F-11
<PAGE>

enterprises  report  information  about operating  segments in annual  financial
statements  and  requires  reporting  of selected  information  about  operating
segments  in interim  financial  statements  regarding  products  and  services,
geographic areas and major customers. SFAS No. 131 defines operating segments as
components  of an  enterprise  about which  separate  financial  information  is
available that is evaluated  regularly by the chief operating  decision maker in
deciding how to allocate  resources  and in assessing  performances.  Currently,
SFAS 131 has no effect on the  Company's  consolidated  financial  statements as
substantially  all of the  Company's  operations  are  conducted in one industry
segment.

Reclassifications

Certain  comparative  amounts have been reclassified to conform with the current
year's presentation.

Recent Pronouncements

In  December  2002,  the FASB issued  SFAS No. 148  "Accounting  for Stock Based
Compensation-Transition  and  Disclosure".  SFAS No.  148 amends  SFAS No.  123,
"Accounting for Stock Based  Compensation",  to provide  alternative  methods of
transition  for a voluntary  change to the fair value based method of accounting
for stock-based employee  compensation.  In addition,  this Statement amends the
disclosure  requirements  of Statement 123 to require  prominent  disclosures in
both annual and interim financial  statements about the method of accounting for
stock-based employee compensation and the effect of the method used, on reported
results.  The Statement is effective for the Companies' interim reporting period
ending January 31, 2003.

In  compliance  with FAS No. 148,  the Company has elected to continue to follow
the  intrinsic  value  method  in  accounting  for  its   stock-based   employee
compensation  plan  as  defined  by APB  No.  25 and  has  made  the  applicable
disclosures below.

Had the Company  determined  employee stock based  compensation  cost based on a
fair value  model at the grant date for its stock  options  under SFAS 123,  the
Company's  net  earnings  per share  would have been  adjusted  to the pro forma
amounts for the year ended June 30, 2004 and 2003,  as follows ($ in  thousands,
except per share amounts).
                                                      Year ended June 30
                                                     2004           2003
                                                  ------------   ----------
           Net loss - as reported               $       (999)     (701)

            Stock-Based employee compensation
              expense included in reported net
   income, net of tax                                    --        --

 Total stock-based employee
   compensation expense determined
   under fair-value-based method for all
   rewards, net of tax                                     (8)     --
                                                 ------------   ----------

 Pro forma net loss                              $     (1,006)     (701)
                                                 ============   ==========
Earnings (loss) per share:

 Basic, as reported                              $   (0.02)      $(0.01)
 Diluted, as reported                            $   (0.02)      $(0.01)
 Basic, pro forma                                $   (0.02)      $(0.01)
 Diluted, pro forma                              $   (0.02)      $(0.01)

                                      F-12
<PAGE>
On May 15 2003, the FASB issued FASB Statement No. 150 ("SFAS 150"),  Accounting
for Certain Financial  Instruments with  Characteristics of both Liabilities and
Equity. SFAS 150 changes the accounting for certain financial  instruments that,
under previous guidance, could be classified as equity or "mezzanine" equity, by
now requiring  those  instruments to be classified as liabilities  (or assets in
some  circumstances) in the statement of financial position.  Further,  SFAS 150
requires  disclosure  regarding the terms of those  instruments  and  settlement
alternatives.  SFAS 150  affects an  entity's  classification  of the  following
freestanding  instruments:  a) Mandatorily  redeemable  instruments b) Financial
instruments  to  repurchase  an entity's  own equity  instruments  c)  Financial
instruments embodying obligations that the issuer must or could choose to settle
by issuing a variable  number of its shares or other  equity  instruments  based
solely on (i) a fixed monetary amount known at inception or (ii) something other
than  changes  in its own  equity  instruments  d) SFAS 150  does  not  apply to
features  embedded in a financial  instrument  that is not a  derivative  in its
entirety.  The guidance in SFAS 150 is  generally  effective  for all  financial
instruments  entered  into or  modified  after May 31,  2003,  and is  otherwise
effective at the beginning of the first interim period  beginning after June 15,
2003. For private companies,  mandatorily  redeemable financial  instruments are
subject to the  provisions  of SFAS 150 for the fiscal  period  beginning  after
December 15, 2003. The adoption of SFAS No. 150 does not have a material  impact
on the Company's financial position or results of operations or cash flows.

In December  2003,  the  Financial  Accounting  Standards  Board (FASB) issued a
revised  Interpretation  No. 46,  "Consolidation of Variable Interest  Entities"
(FIN 46R). FIN 46R addresses  consolidation by business  enterprises of variable
interest  entities and significantly  changes the  consolidation  application of
consolidation   policies  to  variable  interest  entities  and,  thus  improves
comparability  between  enterprises  engaged  in similar  activities  when those
activities are conducted  through variable interest  entities.  The Company does
not hold any variable interest entities.

3.       INVENTORIES

Inventory  consists of parts and supplies.  The Company recorded an allowance of
obsolesce amounting $ 35,259 as on June 30, 2004. As a result, 100% of inventory
totaling $332,904 was reserved for obsolescence.

4. PROPERTY AND EQUIPMENT

Property and equipment at June 30, 2004, consists of the following:

                Computer and office equipment   $ 111,752
                Machinery and equipment            48,670
                Other depreciable assets          102,880
                Furniture and fixture              33,518
                                                ---------
                                                  296,820
                Accumulated depreciation         (223,401)
                                                ---------
                                                $  73,419
                                                =========

5. INTANGIBLE ASSETS

Net intangible assets at June 30, 2004 were as follows:

                 Patents and proprietary processes   $ 136,067
                 Accumulated amortization              121,116
                                                     ---------
                                                     $  14,951
                                                     =========

                                      F-13
<PAGE>

Amortization  expense for the Company's  current  amortizable  intangible assets
over the next fiscal year is estimated to be:

                         2005                        $  14,951
                                                     =========

6. IMPAIREMENT OF INVESTMENT

The  investments  held by the Company  consisted of a 49% ownership  interest in
Qtek Aperture Card AB, a Swedish  corporation  and a 8.54%  ownership in PanaMed
Corp.  The  investment  in Qtek was  accounted  for using the  equity  method of
accounting  due to the  significant  influence  that  the  Company  had over its
investee.  The PanaMed  investment was accounted for using the equity method for
the year ending June 30, 2002; The PanaMed  investment is accounted for at cost,
which is zero.  The total value of the Qtek Aperture AB  investment  amounted to
$28,778 at June 30, 2004. On June 30, 2004, the Company evaluated its investment
according to FASB 144 and recognized an impairment  loss equal to the book value
of these intangible assets amounting $28,778.

7. EMPLOYEE RECEIVABLES

             Notes receivable from officers, unsecured,
             due on June 30, 2019, interest at 4%              $ 377,649

             Interest receivable in connection with
             above notes receivable                                15,559
                                                               ----------
                                                                         393,208
             Valuation allowance                                (393,208)
                                                                ---------
                                                                    --
                                                                =========

8. FACTORING PAYABLE

The  Company has  entered  into an  agreement  with a  factoring  company  ("the
Factor") to factor  purchase  orders with recourse.  The Factor funds 97% or 90%
based upon the status of the purchase  order.  The Factor has agreed to purchase
up to $4,800,000 of qualified  purchase  orders over the term of the  agreement;
however,  the Factor does not have to purchase  more than  $200,000 in any given
month. The agreement term is from June 2, 2003 to June 2, 2005. The Company will
pay a late fee of 3% for  payments  not made within 30 days and 5% for those not
made in 60 days.  At the  option of the  Factor,  the late fees may be paid with
Company stock. If paid by Company stock,  the stock bid price will be discounted
50% in computing the shares to be issued in payment of the late fee.

The Company has agreed to issue the Factor  1,500,000  warrants  purchasing  the
Company's stock as a fee for the factoring agreement. The stock issued under the
warrants can be purchased at the average  closing price of the  Company's  stock
for the 90 days prior to the factoring agreement.

The Company has also issued the Factor bonus  warrants.  The Factor will receive
two (2) bonus warrants for each dollar of purchase orders  purchased.  The bonus
warrants  will be  exercisable  at the average  closing  price of the  Company's
common  stock for the 90 days  prior to the  purchase  order  transactions  they
represent or a 50% discount to the closing price of the  Company's  stock at the
time  exercised at the option of the Factor.  Both  warrants are for a five year
period.

                                      F-14
<PAGE>

At June 30, 2004, the Company had a factoring payable balance of $43,230.

9. PAYROLL TAXES-ASSUMED IN MERGER

The  Company  assumed  $205,618 of payroll  tax  liabilities  in the merger with
Pacific Diagnostic Technologies,  Inc. The balance was $96,661 at June 30, 2004.
The Company is delinquent on payments of these payroll tax liabilities.

10. LONG TERM PAYABLES

Lease payable, interest at 7.9% to 15%, due various dates   $ 55,367
in 2005 to 2008
Note payable, DFS, interest at 15.99%, due Jun & Jul 2006      3,669
Notes payable, AP conversion, interest at 8%, due 2006        51,847
                                                            --------
                                                            $110,883
Current portion                                               47,504
                                                            --------
                                                                          63,379
                                                            ========

            The future maturity of the long term payables is as follows:

                                2005                        $ 47,504
                                2006                          43,122
                                2007                          19,243
                                2008                           1,014
                                                           ----------
                                Total                      $ 110,883
                                                           =========
11. CONVERTIBLE BONDS

         Bonds payable with interest at 9%, due on various
         dates in 2001 and 2002, convertible to shares of
         Common stock in increments of $1,000 or more.      $   21,354

         Bonds payable with interest at 12%, due July 2002,
         convertible to shares of common stock in increments
         of $500  or  more.                                     41,141
                                                            ==========

                                                            $  62,495
                                                            =========

Certain of the  outstanding  convertible  bonds have  matured as of December 31,
2002.  The holders of the matured  bonds do not wish to renew the bonds and have
asked for  payment;  however,  the Company does not have the cash to repay these
bonds.

Bondholders  have been asked to  exchange  their  bonds for  Series B  preferred
stock. As of June 30, 2004,  holders of $198,000 of the bonds including  accrued
interest had acted on this. The $198,000 is included in the liability section of
the financials under  "Liabilities in Process of Conversion to Stock," since the
preferred stock has not been issued.

12. CONVERTIBLE NOTES

During the year ended June 30,  2004,  the Company  raised  capital  through the
issuance of  convertible  promissory  notes in the amount of  $500,000.  All the
notes are for a one year period and bear simple interest at the rate of 10%. The
due dates of these notes are from November 26, 2004 through June 4, 2005.

                                      F-15
<PAGE>

The  notes  plus  any  accrued  interest  through  the  date of  conversion  are
convertible to the common stock of the Company at $.06. Additionally, the holder
will receive one bonus  warrant for each  conversion  share.  Each bonus warrant
will be  exercisable  for a period of 5 years from the date of issuance into one
share of common stock at a price of $.10

The  conversion  right of the note holder with respect to the  individual  notes
shall  exist upon (i) the  approval  of a proxy  statement  to be filed with the
Securities and Exchange Commission and approval of an amendment by the Company's
shareholders  to authorize to 200,000,000  the number of shares common stock and
(ii) the Company's  registration statement registering the Shares underlying the
notes and other  Securities  has been declared  effective by the  Securities and
Exchange  Commission.  As of June 30, 2004, the criteria to convert the notes to
common stock were not met.

The total interest on these  convertible  notes for the year ended June 30, 2004
amounted to $15,177.

13. LIABILITIES IN PROCESS OF CONVERSION TO STOCK

The Company  has a total of $470,629  liabilities  in process of  conversion  to
stock as of June 30, 2004. This amount consists of the following:

                  Bond payable                             $ 198,268
                  Accounts payable                            20,147
                  Payrolls payable                           252,214
                                                           ---------
                                                           $ 470,629

Bonds for $188,268 are  convertible to one share of Series A Preferred stock for
each $.05 of debt owed by the Company.  Remaining $10,000 bond is convertible to
one share of Series B Preferred stock for each $.25 of debt owed by the Company.

Accounts  payable are  convertible to one share of Series C Preferred  stock for
each $1.00 of payable owed by the Company.

Payrolls  payable are  convertible to one share of Series A Preferred  stock for
each $.25 of debt owed by the Company.

14. LOANS PAYABLE - STOCKHOLDERS

The company has a loan payable  balance of $244,056 to the  stockholders at June
30, 2004. These loans are interest free, unsecured and due on demand.

15. STOCKHOLDERS' EQUITY

a.       Common Stock and Warrants

The Company has authorized 50 million shares of common stock with a par value of
$0.001  per  share.  Each share  entitles  the holder to one vote.  There are no
dividend or liquidation preferences, participation rights, call prices or rates,
sinking  fund  requirements,  or unusual  voting  rights  associated  with these
shares. During the year ended June 30, 2003, the Company established the Class L
warrants and initiated the process of  establishing  the Class A Preferred stock
which underlies these warrants.

Upon  surrender  of either a Class J or L  warrant,  the holder is  entitled  to
purchase one share of the Company's stock at the designated  exercise price. For
each warrant class, the number of warrants outstanding,  the exercise price, the
type of underlying stock, and the expiration dates are defined as follows:

                                      F-16
<PAGE>

Class J -  6,458,384  warrants  to  purchase  common  restricted  stock  with an
exercise price of $1.00 per share expired on January 14, 2004.

Class L - warrants were  established  in March 2003,  with an exercise  price of
$.25 per share, an expiration date of January 14, 2005 and Series A Preferred as
underlying  stock.  As of June 30,  2004,  holders  of Class J  exchanged  their
warrants for 3,063,432 Class L Warrants.

At June 30, 2004, the outstanding  warrants of classes A, B, C, D, E, F, G, H, I
and J have expired.

During the year ended June 30, 2004,  200,000 shares of common stock were issued
for services valued at $15,000.

During the year  ended  June 30,  2004,  1,773,695  shares of common  stock were
issued for conversion of bond amounting $106,422.

During the year ended June 30, 2004,  14,291  shares of common stock were issued
for debt settlement amounting $1,786.

During the year ended June 30, 2004,  200,000 shares of warrants were issued for
consulting  services for three years beginning February 2004, valued at $41,572.
$5,774 was amortized  during the year ended June 30, 2004. The fair value of the
warrants  is  estimated  on the grant date using the  Black-Scholes  Model.  The
following assumptions were made in estimating fair value.

Annual rate of quarterly dividends                          0.00%
Discount rate - Bond Equivalent Yield                       3.50%
Expected life                                               3 years
Expected volatility                                          100%


       b.    Common Stock Reserved

At June 30, 2004, common stock was reserved for the following reasons:

        Outstanding convertible bond                151,919 shares
        Exercise of Class L warrants              3,063,432 shares

       c.    Stock Option Agreements

The Company granted 200,000 stock options to two employees during the year ended
June 30, 2004.

The  Company  recorded $ 4,000 as  compensation  expense  due to issuance of the
options, during the year ended June 30, 2004.

The number  and  weighted  average  exercise  prices of  options  granted by the
Company are as  follows:  The number and  weighted  average  exercise  prices of
options granted by the Company are as follows:

                                      F-17
<PAGE>

                                                      Outstanding
                                            Options     Weighted
                                            Number      Average
                                              of       Exercise
                                            Options        Price
                                           ---------   ---------
               Outstanding June 30, 2002   2,015,000   $    1.01
               Granted during the year             0           0
               Exercised                           0           0
               Expired/forfeited                   0           0
                                           ---------   ---------
               Outstanding June 30, 2003   2,015,000   $    1.01
               Granted during the year       200,000   $    0.13
               Exercised                           0           0
               Expired/forfeited                   0           0
                                           ---------   ---------
               Outstanding June 30, 2004   2,215,000   $    0.93
                                           =========   =========


Following is a summary of the status of options outstanding at June 30, 2004:
<TABLE>
<CAPTION>

                                    Outstanding Options                 Exercisable Options
                                        Weighted
                                         Average        Weighted        Weighted
                                        Remaining       Average         Average
                                       Contractual      Exercise        Exercise
Exercise Price       Number              Life            Price          Number            Price
--------------      ---------     ------------------ -------------     ------------     -----------
<C>                <C>                 <C>             <C>              <C>              <C>
$ 1.00-4.00        2,015,000           7 months        $ 1.01           2,015,000        $  0.93
$ 0.13               200,000           9 months        $ 0.13             200,000        $  0.93
</TABLE>

Pro forma  information  regarding  the effect on  operations is required by SFAS
123, and has been  determined  as if the Company had  accounted for its employee
stock  options  under  the  fair  value  method  of that  statement.  Pro  forma
information  using the  Black-Scholes  method at the date of grant  based on the
following assumptions for the year ended June 30, 2004 and 2003 was as follows:

                  Expected life (years)                         1  year
                  Risk-free interest rate                    1.40% and 3.40%
                  Dividend yield                                0% and 0%
                  Volatility                                 45% and 100%


      d. Stock transactions approved by the shareholder's

At the annual meeting of the  shareholders  held June 30, 2004, the shareholders
approved  by a majority  vote to increase to  200,000,000  shares,  no par value
common stock,  and  50,000,000  shares no par value,  preferred  stock which the
corporation  shall have authority to issue. The board of directors is authorized
to divide the  preferred  stock  into any  number of classes or series,  fix the
designation  and  number of  shares  of each  such  series or class and alter or
determine the rights, preferences, privileges and restrictions of each or series
of preferred stock

                                      F-18
<PAGE>

Series A Preferred Stock

The  general  terms of the Series A Preferred  Stock is as follows:  Par value -
$0.00;  Liquidation  Preference  - $0.25 per share plus any  unpaid  accumulated
dividends;  Dividends -  cumulative  annual rate of $0.005 per share when and as
declared by the Board of Directors;  Conversion  Rights - convertible  to common
stock at a 1:1 ratio ;  Redemption  Rights - the Company has the right to redeem
part or all of the  stock  upon 30 days  written  notice  at a rate of $0.25 per
share plus all accumulated and unpaid dividends  thereon at the dividend rate of
$0.005  annually  per share;  Voting  Rights - one vote per share on all matters
requiring  shareholder vote. At June 30, 2004, the Company had 250,000 shares of
Series A Preferred Stock to be issued valued at $40,000 for the compensation.

Series B Preferred Stock

The  general  terms of the Series B Preferred  Stock is as follows:  Par Value -
$0.00;  Liquidation  Preference  - $0.25 per share plus any  unpaid  accumulated
dividends;  Dividends - cumulative  annual rate of $0.0005 per share when and as
declared by the Board of Directors;  Conversion  Rights - convertible  to common
stock at a 1:5 ratio (i.e.  1 share of Series B Preferred  stock is  convertible
into 5 shares of common stock) ;  Redemption  Rights - the Company has the right
to redeem  part or all of the  stock  upon 30 days  written  notice at a rate of
$0.25 per  share  plus all  accumulated  and  unpaid  dividends  thereon  at the
dividend rate of $0.0005 annually per share;  Voting Rights - one vote per share
on all matters requiring shareholder vote.

Series C Preferred Stock

The  general  terms of the Series C Preferred  Stock is as follows:  Par value -
$0.00;  Liquidation  Preference  - $1.00 per share plus any  unpaid  accumulated
dividends;  Dividends  -  cumulative  annual  rate of $.0005  per share  when as
declared by the Board of Directors; Conversion Rights - 1:20 ratio (i.e. 1 share
of  Preferred  Series C stock is  convertible  into 20 shares of common  stock);
Redemption Rights - the Company has the right to redeem part or all of the stock
upon 30 days written notice at the rate of $1.00 per share plus all  accumulated
and unpaid dividends thereon at the dividend rate of $.0005 annually per share.;
Voting Rights - one vote per share on all matters requiring shareholder vote.

Liabilities in process of conversion to stock:

The Company has entered into  agreements  with various  vendors and employees to
convert  their  liabilities  into the  above,  three  preferred  series of stock
pending approval of same. The conversion rate varies. (note 13)

16. INCOME TAXES

The Company accounts for income taxes using the liability  approach to financial
accounting  and  reporting.  The  Company  has a  deferred  tax asset due to net
operating  loss   carryforwards  and  temporary   taxable   differences  due  to
stock-based  compensation  for income tax purposes.  Through June 30, 2004,  the
Company  incurred net operating  losses for federal tax purposes of  $8,000,000.
The net operating loss carryforward may be used to reduce taxable income through
the  year  2024.   The   availability   of  the  Company's  net  operating  loss
carryforwards  are  subject  to  limitation  if there is a 50% or more  positive
change in the ownership of the Company's stock.

The deferred tax assets are  $3,057,951  and  $2,718,450 as of June 30, 2004 and
2003,  respectively.  However,  due to the ongoing  nature of the losses and the
potential  inability  of the Company to ever  realize the  benefit,  a valuation
allowance has been established for 100% of the deferred tax asset. Net operating
loss carryforwards expire at various times through the year 2023.

                                      F-19
<PAGE>
The effects of temporary  differences that give rise to significant  portions of
the  deferred  tax  benefit  for the  years  ended  June  30,  2004 and 2003 are
presented below:

                                  2004         2003
                                  -----        -----

Net operating loss              319,441     163,156
Stock-based compensation         20,060      75,202
                               --------    --------
                                 339,501 238,358

Less-valuation allowance       (339,501)   (238,358)
                               --------    --------
                       Total       --          --
                               ========    ========


The following is a reconciliation  of the provision for income taxes at the U.S.
federal  income  tax rate to the  income  taxes  reflected  in the  Consolidated
Statements of Operations:

                                               June 30,     June 30,
                                                 2004         2003
                                               --------     --------

Tax expense (credit) at statutory rate-federal   (32)%       (32)%
State tax expense net of federal tax              (8)         (8)
Permanent differences                              1           1
Valuation allowance                               39          39
                                               --------     -------
Tax expense at actual rate                        --          --
                                               ========     =======

17. SUPPLEMENTAL DISCLOSURE OF CASH FLOWS

The Company  prepares its statements of cash flows using the indirect  method as
defined under the Financial Accounting Standard No. 95.

The  Company  paid $-0- for income tax during the years  ended June 30, 2004 and
2003. The Company paid $29,937 and $14,256  interest during the years ended June
30, 2004 and 2003, respectively.

The cash flow  statement  for the year ended June 30,  2004 does not include the
following non-cash investing and financing transactions;

         o    200,000 shares of common stock were issued for services  valued at
              $15,000.
         o    1,773,695  shares of common  stock were issued for  conversion  of
              bond amounting to $106,422.
         o    14,291  shares of common  stock were  issued  for debt  settlement
              amounting $1,786.
         o    Machinery and equipment was acquired through financing  agreements
              in the amount of $67,125.
         o    Accounts  payable were converted to notes payable in the amount of
              $30,965.

18. MAJOR CUSTOMERS AND SUPPLIERS

The  Company had one  customer  that  accounted  for 21% of revenue for the year
ended June 30, 2004.  Accounts  receivable  from this major customer was $-0- at
June 30, 2004.  For the year ended June 30, 2003, the Company had four customers
that  accounted  for more than 55% of revenue.  Accounts  receivable  from these
major customers were approximately $69,000 at June 30, 2003.

                                      F-20
<PAGE>

There are  currently  only two known  suppliers  of aperture  cards that use dry
silver film. A continued supply of aperture card media is crucial to the success
of the Company  because  without cards,  customers have no use for the Company's
equipment, services and software.

19. COMMITMENTS AND CONTINGENCIES


a)    Operating Leases

The  Company  leases  its  California  office  facility  under a  non-cancelable
operating  lease that requires  total monthly  rental  payments of $2,846.  Upon
expiration  on March 31,  2004,  the Company  leased the  premises on a month to
month basis until June 30, 2004.  Effective  July 1, 2004 the Company  relocated
their executive offices to Huntington Beach,  California and entered into a four
year lease agreement.  The agreement contains a base rent escalation clause. The
Company leases its Idaho office facility under a month-to-month rental agreement
at $1,384 per month.  For the years ended June 30, 2004 and 2003,  rent  expense
for these operating leases totaled $56,997 and $45,279, respectively.

The future minimum lease payments under non-cancelable leases are as follows:

                       2005                   $ 79,661
                       2006                     81,354
                       2007                     83,049
                       2008                     84,744
                                             ---------
                                             $ 328,808
                                             =========

b)    Purchase Obligation

The Company has  established a licensing  agreement  with Qtek Aperture Card AB.
Under the  agreement,  the  Company is  required  to purchase at least 25 of the
Q4305 units at  approximately  $18,000 each before June 30, 2004. As of June 30,
2004,  the Company had  purchased 15 units under the  agreement.  The  agreement
expired June 30, 2004. The Company did not purchase the remaining units. Several
of the original units purchased were inoperable and required on-site repairs due
to  omissions  in  manufacturing.  Qtek  Aperture  Card AB has  refused  to take
responsibility  for the failed  units and has denied  the  Company's  request to
return tooling,  designs and other intellectual  property.  The Company believes
that Qtek  Aperture  Card AB has  breached  this  agreement  and has no  further
obligation  to purchase  units from them.  The financial  statements  contain no
accrued liability in connection with this transaction.

c)    Income Tax Return Filings

The Company has not filed income tax returns for several years. Due to operating
losses,  income tax liability and penalties would not be  substantial.  However,
the State of California could  potentially  revoke the Company's  charter if the
Company does not become current on its income tax return filings.

d) Securities and Exchange Commission Inquiry

 On  September  17,  2002,  the  Company  was  advised  by the staff of the U.S.
Securities and Exchange  Commission that they will recommend that the Commission
file civil injunctive lawsuits against the Company and its president,  Thomas W.
Sims.  The suits would  allege that the Company  violated  Section  17(a) of the
Securities Act of 1933 and Sections  10(b) and 13(a) of the Securities  Exchange
Act of 1934 and Rules 10b-5,  13a-1,  and 13a-13,  based on false and misleading
statements in press releases disseminated by the Company on October 22, 2001 and


                                      F-21
<PAGE>

October 25, 2001,  regarding the Company's  investment in PanaMed Corp.  and the
press releases  disseminated  on January 8, 2002 and March 20, 2002, and failure
to timely file annual and quarterly  reports with the  Commission.  On March 25,
2003,  the Company  signed,  without  admitting  or denying the  allegations,  a
proposed settlement  agreement with the U.S. Securities and Exchange Commission,
which permanently  restrains and enjoins the Company from engaging in acts which
would  constitute  violations of these  regulations in the future.  On August 6,
2003, a final judgment was entered by the U.S. District Court,  Central District
of California,  against the Company which permanently  enjoined the Company from
violating  Section  10(b)  of  the  Exchange  Act  and  Rule  10b-5  promulgated
thereunder by using any means or instrumentality of interstate  commerce,  or of
the mails,  or of any national  securities  exchange:  (A) to employ any device,
scheme or artifice to defraud;  (B) to make any untrue  statement  of a material
fact or  omitting  to  state a  material  fact  necessary  in  order to make the
statements made, in the light of the  circumstances  under which they were made,
not  misleading;  or (C) to engage in any act,  practice,  or course of business
which  operates  or would  operate  as a fraud or  deceit  upon any  person,  in
connection  with  the  purchase  or sale of any  security.  Further,  the  final
judgment  permanently  enjoined the Company from violating  Section 13(a) of the
Exchange Act and Rules 13a-1 and 13a-13  promulgated  thereunder,  by failing to
file with the Commission in accordance  with Commission  rules and  regulations,
information and documents required by the Commission to keep current information
and documents required in or with an application or registration statement filed
pursuant to Section 12 of the Exchange Act or annual or quarterly reports as the
Commission has prescribed.

d)   Litigation

During the year ended  June 30,  2004,  a  creditor  of the  Company  filed suit
against  the  Company  for  $22,662  for goods  provided.  The  Company  filed a
counterclaim in August 2004.

The  $22,662 is  included  in  accounts  payable  and  accrued  expenses  in the
accompanying financial statements.

20. BASIC AND DILUTED NET LOSS PER SHARE

Net loss per share is calculated  in accordance  with the Statement of financial
accounting  standards  No. 128 (SFAS No. 128),  "Earnings  per share." Basic net
loss per share is based  upon the  weighted  average  number  of  common  shares
outstanding.  Diluted  net loss per  share is based on the  assumption  that all
dilutive  convertible  shares and stock  options were  converted  or  exercised.
Dilution is computed by applying the treasury  stock method.  Under this method,
options and warrants are assumed to be exercised at the  beginning of the period
(or at the time of issuance,  if later),  and as if funds obtained  thereby were
used to purchase common stock at the average market price during the period.

Weighted  average  number of shares used to compute  basic and diluted  loss per
share for the years  ended June 30,  2004 and 2003 are the same since the effect
of dilutive securities is anti-dilutive.

21. GOING CONCERN

The  accompanying  financial  statements  have been prepared in conformity  with
generally accepted accounting principles,  which contemplate continuation of the
Company as a going concern.  This basis of accounting  contemplates the recovery
of the Company's  assets and the  satisfaction  of its liabilities in the normal
course of business.  Through June 30, 2004, the Company had incurred  cumulative
losses of $23,061,065 including net losses of $998,531 and $701,053 for the


                                      F-22
<PAGE>
fiscal years 2004 and 2003,  respectively.  In view of the matters  described in
the preceding paragraph, recoverability of a major portion of the recorded asset
amounts  shown in the  accompanying  balance sheet is dependent  upon  continued
operations of the Company, which in turn is dependent upon the Company's ability
to raise  additional  capital,  obtain  financing  and to  succeed in its future
operations.  The financial statements do not include any adjustments relating to
the  recoverability  and classification of recorded asset amounts or amounts and
classification  of  liabilities  that might be  necessary  should the Company be
unable to continue as a going concern.

Management  has taken the following  steps to revise its operating and financial
requirements,  which it believes are  sufficient to provide the Company with the
ability to continue as a going concern.  Management devoted  considerable effort
during the period ended June 30, 2004,  towards (i) obtaining  additional equity
financing (ii) controlling of salaries and general and  administrative  expenses
(iii) management of accounts payable and (iv) evaluation of its distribution and
marketing methods.

22. SUBSEQUENT EVENTS

On July 2, 2004 the amended articles of incorporation  was approved by the Board
of Directors  and endorsed and filed in the office of the  Secretary of State of
the State of California. The Articles of Incorporation of the Company is amended
and restated to read as follows:

         A.   The  total  number of shares  of all  classes  of stock  which the
              corporation  shall have authority to issue is 250,000,000  shares,
              consisting  of  200,000,000  shares of Common  Stock,  without par
              value and 50,000,000 shares of Preferred Stock, without par value.


         B.   The Board of Directors is authorized to divide the Preferred Stock
              into any  number of classes or  series,  fix the  designation  and
              number  of shares  of each  such  series  or  class,  and alter or
              determine the rights, preferences,  privileges and restrictions of
              each  class or series  of  Preferred  Stock not yet  issued to the
              fullest extent of California law.

On July 27, 2004, the Company entered into a Securities  Purchase Agreement with
an  individual  investor.  This investor  purchased a convertible  debenture for
$50,000 which bears simple interest at 10%. The Debenture was converted into the
Common Stock of the Company at a price of $0.10 per share. The investor received
one bonus warrant for each conversion  share.  Each warrant is exercisable  into
one share of Common Stock at $0.15 per share.  The  warrants  expire on July 27,
2007.

On July 29,  2004,  the Company  entered  into an  Agreement  with  LANGLEY PARK
INVESTMENTS PLC, a London  Investment  Company to issue 14,000,000 shares of the
Company's  common  stock to Langley in return for  1,145,595  shares of Langley.
Fifty percent of Langley shares issued to the Company under this agreement is to
be held in escrow for two years. At the end of two years if the market price for
the Company's  common stock is at or greater than the Initial  Closing Price the
escrow agent will  release the full  amount.  In the event that the market price
for the Company's common stock is less than the Initial Closing Price the amount
released will be adjusted.

Langley is in the process of attaining  listing with the United Kingdom  Listing
Authority.  Langley's  initial  offering  price is  1(pound)  (One  Pound UK per
share).  The Company's shares are to be held by Langley for a period of at least
two years.  Langley shares issued to the Company are to be free trading.  In the
event  that  this  transaction  does not  close  the  14,000,000  shares  of the
Company's stock held in escrow are to be returned to the Company.

                                      F-23
<PAGE>

On August 2, 2004,  the Company  signed a Master  Lease  Agreement  with Vencore
Solutions,  LLC, a venture leasing company located in Lake Oswego, Oregon. Under
the agreement the Company  established a lease line of credit for up to $240,000
in equipment  financing.  This is a capital lease where the Company pays monthly
rental  rate  equal to 3.45% of the total  hardware  purchases  and 6.35% of the
total software purchases. The lease term for hardware purchases is 36 months and
18 months for  software.  The  effective  annual  interest  rate is roughly  8%.
Vencore  Solutions  received  144,000 warrants for the Company's common stock at
$0.10 per share, expiring on August 2, 2007 in connection with this agreement.

On August 4, 2004 the Company  entered into an agreement with the private equity
fund, Golden Gate Investors,  based in San Francisco,  CA to provide the Company
with $3.3 million in capital.

The deal is  structured  as two year  $300,000  convertible  notes paying 5 3/4%
interest and 3,000,000  warrants to purchase  common stock for a period of three
years at  $1.00.  The  "Conversion  Price"  shall be equal to the  lesser of (i)
$0.50, or (ii) 80% of the average of the 5 lowest Volume Weighted Average Prices
during the 20 Trading Days prior to Holder's  election to convert,  or (iii) 80%
of the  Volume  Weighted  Average  Price on the  Trading  Day prior to  Holder's
election  to  convert  market  price  of the  Company's  common  stock  prior to
conversion.

Upon  conversion of the note, the fund is obligated to  simultaneously  exercise
the $1.00 warrants  providing added funding to the company.  The Warrant must be
exercised  concurrently with the conversion of this Debenture in an amount equal
to ten times the dollar amount of the Debenture conversion.

On August 17, 2004 the company entered into a Securities Purchase Agreement with
an individual  investor to purchase 2 convertible  debentures  each for $100,000
which bears  simple  interest at 10%.  The initial  Debenture  was  purchased at
closing.  The  second  Debenture  will  be  purchased  within  five  days  of  a
registration  statement being declared  effective covering the Conversion Shares
and Warrant  Shares.  Debentures  are  convertible  into the Common stock of the
Company.  Conversion  Price per share shall be the lower of (i) $0.10  ("Maximum
Base  Price");  or (ii) in the  event  the  Borrower  enters  into an  agreement
subsequent  to execution  of the  Securities  Purchase  Agreement to sell Common
Stock or a  convertible  instrument  that  converts  into Common  Stock prior to
conversion of this Debenture at a price less than the  Conversion  Price of this
Debenture,  then the  Conversion  Price of this  Debenture  shall be immediately
reset to a lower  Conversion  Price equal to that  described  in the  subsequent
agreement.  Warrants are exercisable at $0.12 per share into the Common Stock of
the Company and expire on August 17, 2007.

On  September  27,  2004,  the  Company  was in  process of  converting  various
liabilities and stock based compensation to shares of stock as follows:

4,682,572  shares of common  stock were issued as repayment of $211,056 in loans
from stockholders.  In addition,  1,800,000 warrants to purchase common stock at
$0.175 per share expiring November 6, 2008,  100,000 warrants to purchase common
stock at $0.16 per share  expiring June 24, 2006,  142,857  warrants to purchase
common stock at $0.13 per share expiring  July23,  2006 and 400,000  warrants to
purchase common stock at $0.175 expiring November 7, 2008 were granted.

400,000 shares of common stock were issued as repayment of $32,300 in loans from
a stockholder.  As part of the agreement, the Company forgave $6,000 owed to the
Company by the stockholder.

1,008,054  shares of Series A preferred stock were issued as conversion of $252,
213 in back payroll. The Series A preferred stock is convertible to common stock
on a 1:1 basis.

                                      F-24
<PAGE>

2,250,000  shares of Series A preferred  stock were issued as  compensation  for
services  in the amount of  $140,000.  250,000  shares  valued at  $40,000  were
recorded as shares to be issued during the year ended June 30, 2004.  The series
A preferred stock is convertible to common stock on a 1:1 basis.

724,077 shares of Series A preferred stock were issued for a $36,204 convertible
bond.  The series A  preferred  stock is  convertible  to common  stock on a 1:1
basis.

648,255  shares  of  Series B  preferred  stock  were  issued  for  $162,064  in
convertible bonds. The Series B preferred stock is convertible into common stock
on a 1:5 basis.  One share of Series B  preferred  stock is  convertible  into 5
shares of common stock.

32,000  shares of Series B  preferred  stock and  175,000  of common  stock were
issued  to  satisfy  a past  due  agreement.  The  Series B  preferred  stock is
convertible  into common  stock on a 1:5 basis.  One share of Series B preferred
stock is convertible into 5 shares of common stock.

20,148  shares of Series C preferred  stock were issued in conversion of $20,148
in accounts  payable.  The Series C preferred  stock is convertible  into common
stock on a 1:20 basis. One share of Series C preferred stock is convertible into
20 shares of common stock.

                                      F-25