|U.S.SECURITIES AND EXCHANGE COMMISSION
|--------------------------------------

|WASHINGTON, D.C. 20549
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|**FORM 10-KSB**
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|**ANNUAL REPORT FILED PURSUANT TO SECTION 13 OR 15(d) OF**
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|**THE SECURITIES EXCHANGE ACT OF 1934**
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|**FOR THE FISCAL YEAR ENDED DECEMBER 31, 2002,**
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|**Commission file number 0-29711**
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|Subjex.com - Intelligent Communication Solutions
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|**Subjex Corporation**
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|**Formerly PageLab Network, Inc.**
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|*(Exact name of issuer as specified in charter)*
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|**Minnesota**                                    |  | **41-1596056**            
|------------------------------------------------ |  | --------------------------
|                                                 |  |                           
|*(State or other jurisdiction of incorporation)* |  | *(IRS Employer ID Number)*

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|**5720 Smetana Dr. Suite 325, Minnetonka, MN 55343**
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|*(address of principal executive offices)*
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|Issuer's telephone number is            **(952) 931-0501**
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|Securities registered pursuant to Section 12(b) of the Act: **NONE**
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|Securities registered pursuant to Section 12(g) of the Act:
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|**Common Stock, No par value** |  | **Over-the-Counter Bulletin Board**     
|------------------------------ |  | ----------------------------------------
|                               |  |                                         
|*(Title of Class)*             |  | *(Name of Exchange on which registered)*

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|Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities and Exchange Act of 1934 during the past 12 months, and (2) has been subject to such filing requirements for the past 90 days.
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|Yes  **x** | No   ̈
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|Check if disclosure of delinquent filers in response to Item 405 of Regulation S-B is not contained in this form, and no disclosure will be contained, to the best of Issuers knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-KSB or any amendment to this Form 10-KSB.  **x**
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|The estimated aggregate market value on March 28, 2003, of the voting common stock held by non-affiliates of the Issuer was $781,362 based upon an average bid and asked price of $.04 of such common stock at that date on the Over-The-Counter Bulletin Board (OTCBB: SBJX) (Formerly PGBN).
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|The number of shares outstanding of each of the issuer's common stock as of March 28, 2003 was 24,503,865 shares.
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|Transitional Small Business Disclosure Format   Yes  ̈       No  **x**
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| | 1 | 
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|     | PAGELAB NETWORK, INC.                                                                                           |     
|---- | --------------------------------------------------------------------------------------------------------------- | ----
|     | FORM 10-KSB                                                                                                     |     
|     |                                                                                                                 |     
|     | YEAR ENDED DECEMBER 31, 2002                                                                                    |     
|     |                                                                                                                 |     
|     | INDEX                                                                                                           |     
|     |                                                                                                                 |     
|     |                                                                                                                 |     
|ITEM |                                                                                                                 | PAGE
|     |                                                                                                                 |     
|     |                                                                                                                 |     
|     | PART I                                                                                                          |     
|     |                                                                                                                 |     
|1.   | Description of Business                                                                                         | 3   
|2.   | Description of Property                                                                                         | 4   
|3.   | Legal Proceedings                                                                                               | 4   
|4.   | Submission of Matters to a Vote of Security Holders                                                             | 4   
|     |                                                                                                                 |     
|     | PART II                                                                                                         |     
|     |                                                                                                                 |     
|5.   | Market for Common Equity and Related Stockholder Matters                                                        | 4   
|6.   | Management's Discussion & Analysis of Financial Condition and Results of Operations                             | 4   
|7.   | Financial Statements                                                                                            | 5   
|8.   | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.                           | 5   
|     |                                                                                                                 |     
|     | PART III                                                                                                        |     
|     |                                                                                                                 |     
|9.   | Directors, Executive Officers, Promoters and Control Persons, Compliance with Section 16(a) of the Exchange Act | 5   
|10.  | Executive Compensation                                                                                          | 6   
|11.  | Security Ownership of Certain Beneficial Owners and Management                                                  | 6   
|12.  | Certain Relationships and Related Transactions                                                                  | 20  
|13.  | Exhibits and Reports on Form 8-K                                                                                | 20  
|     |                                                                                                                 |     
|     | Signatures                                                                                                      | 22  
|     | Financial Statements                                                                                            | F-1 
|     | Articles of Incorporation                                                                                       | F-2 

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| | 2 | 
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|CAUTIONARY STATEMENT FOR PURPOSES OF THE "SAFEHARBOR" PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
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|Statements in this discussion which are not historical facts may be considered "forward looking statements" within the meaning of Section 21E of the Securities Act of 1934, as amended. The words "believe", "expect", "anticipate", "estimate", and similar expressions identify forward looking statements. Any forward looking statement involves risks and uncertainties that could cause actual events or results to differ, perhaps materially, from the events described in the forward looking statements. Readers are cautioned not to place undue reliance on these forward looking statements. The Company undertakes no obligation to publicly update or revise any forward looking statement, whether as a result of new information, future events or otherwise. The risks associated with the Company's forward looking statements include, but are not limited to, risks associated with the Company's history of losses and uncertain profitability, sales and marketing strategies, competition, general economic conditions, reliance on key management and production people, current and future capital needs, dilution, effects of outstanding notes and convertible debentures, limited public market for the Companys capital Stock, low stock price, and lack of liquidity.
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|The following discussion and analysis should be read in conjunction with the Financial Statements, related notes and other information included in this annual report on Form 10-KSB.
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|ITEM 1.  Description of Business
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|Overview
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|Subjex Corporation is an innovative provider of intelligent communications solutions for the Internet and Intranet environments. It is a publicly traded Minneapolis based software services company that has developed an artificial intelligence-based next generation dialogue communication platform called Subjex Exchange.
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|The Subjex dialogue engine is a software application that is licensable to business and industry. For web-connected organizations, Subjex offers tools and solutions to support website operations with fully automated, online customer service, knowledge management and marketing. Our solutions allow clients to master the art of online sales, service and communication with their customers, transforming a web site into a full-service destination for customer, employee and partner communication.
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|During 2002, the Company focused on expanding and marketing its software while keeping costs low. With very little operation costs the company rebuilt its technology. During this time the Company was able to bring in small revenues and venture capital to sustain itself.
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| | 3 | 
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|Principal Products and Services
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|Subjex Exchange is an artificial intelligence software platform that conducts dialogue with users (through text) to dynamically converse with a normal, human-like conversation interaction. Its application can lower costs dramatically for companies who have a lot of after-sale customer contact. The Virtual Sales Rep software can converse eloquently with hundreds of simultaneous users for less than the cost of one live operator. The Virtual Sales Rep can drastically increase sales (closing ratios) by recommending ideal products for that specific individual. This is done very quickly using a short interview conversation. The key to these products is the iterative "back and forth" methodology. The system is able to learn users needs in a way user s are already familiar with - by "talking".
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|Today, Subjex is the only solution that meets all the demands of making web-based contact centers fast, easy, accurate and profitable, utilizing dialogue and iteration. The companys Subjex Exchange software product suite supports each function of the customer service.
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|The Company has gained expertise in marketing its software to mid level companies. The Company has recently entered into several sales and partnering agreements.  Management is hopeful that these agreements will generate sufficient revenues to make the company profitable in 2003.
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|Trademarks and Patents
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|The Company previously pursued a policy of seeking trademark and patent protection for the Company and its products.  However, in 2002 resources were insufficient and the Company was forced to let a number of applications expire.  The Company continues to maintain a patent on the core functions of its product.
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|Environmental Compliance
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|The Company believes it is in compliance with all current federal and state environmental laws.
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|Employees
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|The Company currently has 5 full-time employees. Of the Company's full-time employees, 4 are involved in sales, marketing and administrative functions and all are involved in engineering, research and development. The Company's employees are not represented by any labor unions.  The Company considers its relations with its employees to be very good.
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|Competition
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|The Company is aware of other companies attempting to develop and market products to the same market as the Companys products are being marketed to.  These companies have greater resources than the Company.
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|Recent Developments
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|In 2002 cash reserves were depleted and the Company was forced to lay off employees and implement other cost saving measures.  Late in 2002 and in 2003 the Company has been able to raise additional monies through private issuances of its stock.  Receipt of these monies allowed the Company to significantly increase its marketing efforts.  The Company has recently entered into several sales and partnering agreements.  Management is hopeful that these agreements will generate sufficient revenues to make the company profitable in 2003.
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| | 4 | 
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|ITEM 2.  Description of Property
|--------------------------------

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|The Company's principal office is located at 5720 Smetana Dr. Suite 325, Minnetonka, MN 55343, occupying approximately 1100 square feet and utilized entirely for office space. The lease is month to month. The space is rented under a written lease, which provides for a monthly payment of rent and a pro-rata share of annual operating expenses. Management believes that comparable office space is readily available if the Company were to lose its lease.
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|ITEM 3:  Legal Proceedings
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|There were no legal proceedings pending or, to the Company's knowledge, that would be material to the financial position of the Company.
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|ITEM 4:  Submission of Matters to a Vote of Security Holders
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|It is acknowledged that any sale or substantial restructuring of the Company will require a shareholders vote. No matters were submitted to the vote of the Companys stockholders in 2002.
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|PART II
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|ITEM 5:   Market for Common Equity and Related Stockholder Matters
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|**(a) Market Information**
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|The Companys Common Stock is traded on the Over the Counter Bulletin Board since January 2000 under the symbol PGBN. Since the commencement of trading, the company has changed it ticker symbol in 2003 to SBJX. Its high and low sales prices of common stock were $0.40 and $.015, respectively.  Since the Company is not NASDAQ qualified, these prices are inter-dealer prices and may not reflect actual value or transactions.  At December 31, 2002 the following firms were making a market in the Companys common stock:
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| | Price per Share  Calendar Year 2002
| | ------------------------------------

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| |  | Quarter |  | High |      | Low |  
| |  | ------- |  | ---- | ---- | --- | -
| |  |         |  |      |      |     |  
| |  | First   |  | $    | 0.10 |     | $
| |  | Second  |  | $    | 0.33 |     | $
| |  | Third   |  | $    | 0.23 |     | $
| |  | Fourth  |  | $    | 0.20 |     | $

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| | 5 | 
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| | Price per Share  Calendar Year 2001
| | ------------------------------------

| |  |         |  |      |     
| |  | ------- |  | ---- | ----
| |  | Quarter |  | High |     
| |  |         |  |      |     
| |  | First   |  | $    | 1.50
| |  | Second  |  | $    | 0.38
| |  | Third   |  | $    | 0.10
| |  | Fourth  |  | $    | 0.36

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|At December 31, 2002 there were 197 holders of the Companys common stock.
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|(b) Dividends
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|The Company has not paid dividends on its common stock and does not expect to in 2003. Although it is the company intention to pay dividends, there is no assurance that any dividends will be paid in the future, as dividends are dependent upon earnings.  Any earnings, for the foreseeable future, will be utilized to invest in projects intended to build the Companys economic base.
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|ITEM 6:  Management's Discussion & Analysis of Financial Condition and Results of Operations
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|The Company generated immaterial revenues of $23,812 in 2002 compared to revenues of $48,090 in 2001.  These revenue levels have not been sufficient to sustain the Companys operations.
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|Operating expenses were $783,422 in 2002 compared to $1,705,711 in 2001.  The largest cost savings in 2002 was a reduction in outside consulting fees from $1,141,655 in 2001 to $66,011 in 2002.  This cost savings was offset, in part, by an increase in payroll to $416,930 in 2002 compared to $301,876 in 2001.
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|Marketing and promotion costs were also increased to $22,477 in 2002 compared to $5,611 in 2001.  The uncertain nature of the market, make prediction of our future sales results of operations difficult. The Company, however, has increased its marketing efforts significantly.  The Company has recently entered into several sales and partnering agreements.  Management is hopeful that these agreements will generate sufficient revenues to make the company profitable in 2003.
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|We do not know if our operations will generate significant revenues quickly and if we will achieve profitable operations with out a merger and or additional capital investment. Assuming that the Company continues to obtain adequate funding the Company expects to experience significant fluctuations in its future operating results due to a variety of factors. Factors that may affect the Company's operating results include the success of marketing development, continued market acceptance of the Company's products, and managements ability to attract more experienced personnel in marketing without spending much of its resources.
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| | 6 | 
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|Liquidity and Capital Resources
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|Cash flows from operations inception to date have not been sufficient to meet the Companys operating needs.  The accumulated deficit from inception to December 31, 2002 was $3,820,723.  To date the continued existence of the Company has depended on monies raised through the issuance of common stock.
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|The Company, however, is not capital intensive.  The basic product of the Company is its proprietary software which was developed by its President.  The Companys personnel are able to do any installations.  The Company has recently entered into several sales and partnering agreements.  Management is hopeful that these agreements will generate sufficient revenues to make the company profitable in 2003.
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|The Company is continuing to raise monies through private sales of its common stock.  The Company feels that these issuances will provide it sufficient monies to sustain operations until operating revenues are sufficient to cover operating expenses.
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|ITEM 7: Financial Statements
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|The financial statements of the Company are included herein following the signatures.
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|ITEM 8:  Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
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|In 2002, we hired a full time Director of Finance to manage the accounting and finance functions.
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| | 7 | 
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|PART III
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|ITEM 9.  Directors, Executive Officers, Promoters and Control Persons, Compliance with Section 16(a) of the Exchange Act
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|MANAGEMENT
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|The executive officers and Directors of the Company are as follows:
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|Name            |  | Age |  | Position               
|--------------- |  | --- |  | -----------------------
|                |  |     |  |                        
|Andrew D. Hyder |  | 36  |  | Chief Executive Officer
|                |  |     |  | President              
|                |  |     |  | Chairman of the Board  

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|Andrew D. Hyder has been the President and Chief Executive Officer and a Director since October 1999. He is the founder of the company and has served as President and Chief Executive Officer since its inception in 1998. He brings extensive business, software development, internet and artificial intelligence skills to the company. Andrew served as President of InteractiveHost, a successful web development, hosting and search engine, positioning company. Here he developed a search engine ranking and positioning expert system that was later sold and netted over one-half million dollars.
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|He has founded and managed several successful technology and advertising-based companies. He has expertise and training in the areas of business, finance and technology including consulting, marketing, networking, software development, copyrighting, logo design, desktop publishing and direct mail. Andrew knows five different computer programming languages and most development platforms, languages such as C++, Java, Cobol, the Visual languages (Basic, C, Java), JavaScript, HTML and Perl; his technical experiences span just about every type of PC platform in use today, from Unix/Linux, Mac to Win/NT. He began computer programming flight simulators in 1978 at age 12.
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|Andrew has a firm grasp of modern technologies as applied to corporate infrastructure and what it takes to build a successful public technology organization. At Subjex, he is responsible for the vision and direction of the corporation and supervision and leadership of all functional areas plus investor relations.
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|Name            |  | Age |  | Position                
|--------------- |  | --- |  | ------------------------
|                |  |     |  |                         
|Scott Bjerstedt |  | 23  |  | Chief Technology Officer
|                |  |     |  | Board Member            

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|Scott Bjerstedt is the Chief Technology Officer at Subjex, responsible for managing technology operations; spearheading development, design and maintenance of the Subjex dialogue engine; and maintaining and upgrading several Linux-based servers. Scott has exceptional skills as a computer software engineer
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|Section (a) Beneficial Ownership Reporting Compliance
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|Section 16(a) of the Securities Exchange Act of 1934 requires executive officers and directors and persons who beneficially own more than 10% of the Companys Common Stock to file initial reports of ownership and reports of changes in ownership with the Securities and Exchange Commission (SEC).  Executive officers, directors, and greater than 10% beneficial owners are required by SEC regulations to furnish the Company with copies of all Section 16(a) forms they file.
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|Based solely on a review of the copies of such forms furnished to the Company and written representations from the executive officers, directors and holders of 10% or more of the Companys Common Stock, the Company believes that its executive officers, directors and 10% shareholders complied with all Section 16(a) filing requirements applicable to them.
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|ITEM 10:  Executive Compensation
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|Summary Compensation Table
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|The following table sets forth the compensation earned in certain fiscal years by the Companys Chief Executive Officer including the fiscal year ended December 31, 2002.
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|                |  | Annual Compensation                             |  |      |        |        |       
|--------------- |  | ----------------------------------------------- |  | ---- | ------ | ------ | ------
|                |  |                                                 |  |      |        |        |       
|                |  | Name and Principal Position                     |  | Year |        | Salary |       
|                |  |                                                 |  |      |        |        |       
|                |  |                                                 |  |      |        |        |       
|Andrew D. Hyder |  | 2002                                            |  | $    | 48,333 |        | -     
|                |  | Director, President and Chief Executive Officer |  | 2001 |        | $      | 18,000
|                |  |                                                 |  | 2000 |        | $      | 59,800
|                |  |                                                 |  | 1999 |        | $      | 10,000

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|ITEM 11. Security Ownership of Certain Beneficial Owners and Management
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|PRINCIPAL SHAREHOLDERS
|----------------------

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|The following table sets forth certain information with respect to beneficial ownership of the Companys Common Stock as of March 31, 2003 by: (i) each Director of the Company, (ii) each Named Executive Officer (iii) all Directors and executive officers of the Company as a group and (iv) each person or entity known by the Company to own beneficially more than five percent of the Companys Common Stock. The address of each of the following shareholders is the same as the Company.
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|Name and address of Beneficial owner |  | Amount and Nature of Beneficial Owner |           | Percent of Class (1) | 
|------------------------------------ |  | ------------------------------------- | --------- | -------------------- | 
|                                     |  |                                       |           |                      | 
|Andrew D. Hyder (2)                  |  |                                       | 4,053,809 |                      | 
|                                     |  |                                       |           |                      | 
|All Directors and Officers           |  |                                       | 4,053,809 |                      | 

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| | 9 | 
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|(1) Beneficial ownership is determined in accordance with rules of the Securities and Exchange Commission and includes generally voting power and/or investment power with respect to securities.  Shares of Common Stock subject to options or warrants currently exercisable or exercisable within 60 days of March 31, 2003 (Currently Exercisable Options) are deemed outstanding for computing the beneficial ownership percentage of the person holding such options but are not deemed outstanding for computing the beneficial ownership percentage of any other person.  Except as indicated by footnote, the persons named in the table above have the sole voting and investment power with respect to all shares of Common Stock shown as beneficially owned by them.
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|(2)Includes 25,000 shares held by Mr. Hyders daughter, and includes 398,600 shares issuable pursuant to Currently Exercisable Options.
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|ITEM 12. Certain Relationships and Related Transactions
|-------------------------------------------------------

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|In October 1999, the Company amended its Articles of Incorporation to increase the authorized shares of the Company from 25,000,000 to 50,0000,000 shares, of which 40,000,000 shares have been designated as Common Stock and 10,000,000 are Undesignated.
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|Mr. Hyder advanced in the form of 6% notes approximately $230,000 to the Company since its inception. A portion of these loans ($150,000) was used to purchase intellectual property from Commission Junction, Inc., located in Santa Barbara, CA.  At December 31, 2002, indebtedness owed to Mr. Hyder, after repayments or other reductions during the course of 2002, was $62,531.
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|ITEM 13. Exhibits and Reports on Form 8-K
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| | (A) | EXHIBITS.
| | --- | ---------

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| |  | None.
| |  | -----

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| | (B) | REPORTS ON FORM 8-K .
| | --- | ---------------------

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| | On October 1st, 2002 the company signed a contract to and closed on the purchase of B2 Ventures Inc. a Marketing and Distribution Company, from its two principles Adam Boroughs and Sam Brown for a total consideration of two million Shares of common stock of the Company.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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| | Subsequent to entering into this agreement the Company found that B2 Ventures, Inc. did not comply with material provisions of the Acquisition Agreement.  The Company terminated the Acquisition Agreement and did not issue the 2,000,000 shares of its common stock due to the founders of B2 Ventures, Inc.  Management feels that the material breaches of the Acquisition Agreement by B2 Ventures, Inc. protect the Company from any claim.
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| | 10 | 
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| | ( C ) | Exhibits
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|Copies of the following documents are included as exhibits to this report pursuant to Item 601 of Regulation S-B.
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|SEC Ref. No. |  | Title of Document                 |  | Location
|------------ |  | --------------------------------- |  | --------
|             |  |                                   |  |         
|9E-411       |  | Amended Articles of Incorporation |  | F-2     

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|SIGNATURES
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|Pursuant to the requirements of Section 13 or 15(d) of the Securities and Exchange Act of 1934, the Issuer has duly caused this report to be signed on its behalf by the undersigned officers and/or Directors, there unto duly authorized.
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|PAGELAB NETWORK, INC.
|---------------------

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|Date:  March 31, 2003
|---------------------

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|**NAME**            |  |  | **TITLE**                                                             
|------------------- |  |  | ----------------------------------------------------------------------
|                    |  |  | ****                                                                  
|/s/ Andrew D. Hyder |  |  | President and Chief Executive Officer,                                
|Andrew D. Hyder     |  |  | Chief Financial Officer (and Principal Financial Officer) and Director
|                    |  |  |                                                                       

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| | 11 | 
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|I, Andrew D. Hyder, certify that:
|---------------------------------

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|1.         I have reviewed this annual report on Form 10-KSB for the year ended December 31, 2002 of  , Inc.;
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|2.         Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report;
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|3.         Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report;
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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|4.         The registrants other certifying officers, and I, are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:
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| | a)         Designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared;
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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| | b)         Evaluated the effectiveness of the registrants disclosure controls and procedures as of the date within 90 days prior to the filing date of this annual report (the Evaluation Date); and
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| | c)         Presented in this annual report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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|5.         The registrants other certifying officers and I have disclosed, based on our most recent evaluation, to the registrants auditors and the audit committee of registrants board of directors (or persons performing the equivalent functions):
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| | a)         All significant deficiencies in the design or operation of internal controls which could adversely affect the registrants ability to record, process, summarize and report financial data and have identified for the registrants auditors any material weaknesses in internal controls; and
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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

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|6.                   The registrants other certifying officers and I have indicated in this annual report whether there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.
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|                      |                     |                    
|--------------------- | ------------------- | -------------------
|                      |                     |                    
|Date: March  31, 2003 | By:                 | /s/ Andrew D. Hyder
|                      | Chairman, President

|
|

| | 12 | 
| | -- | 

|
|

|
|

|Exhibit Index
|-------------

|
|

|Exhibit 99.1                   Certificate pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|----------------------------------------------------------------------------------------------------

|
|

|
|

|
|

|
|

|
|

|
|

|
|

| | 13 | 
| | -- | 

|
|

|
|

|ITEM 7.  Financial Statements
|-----------------------------

|
|

|SUBJEX CORPORATION
|------------------

|(f/k/a PAGELAB NETWORK, INC.)
|-----------------------------

|
|

|FINANCIAL STATEMENTS
|--------------------

|
|

|YEARS ENDEDDECEMBER 31, 2002AND 2001
|------------------------------------

|
|

| |  | 
| |  | 

|
|

|
|

|SUBJEX CORPORATION                    
|--------------------------------------
|(f/k/a PAGELAB NETWORK, INC.)         
|                                      
|FINANCIAL STATEMENTS                  
|                                      
|YEARS ENDED DECEMBER 31, 2002 AND 2001
|                                      
|TABLE OF CONTENTS                     
|                                      
|                                      
|                                      
|                                      
|                                      
|Independent Auditors' Report          
|                                      
|                                      
|Financial Statements:                 
|                                      
|                                      
|                                      
|                                      
|                                      
|                                      
|                                      
|                                      
|                                      
|                                      

|
|

| |  | 
| |  | 

|
|

|
|

|Callahan, Johnston & Associates, LLC
|------------------------------------

|Certified Public Accountants and Consultants
|--------------------------------------------

|
|

|INDEPENDENT AUDITORS REPORT
|----------------------------

|
|

|To The Board of Directors
|-------------------------

|Subjex Corporation
|------------------

|(f/k/a/PageLab Network, Inc.)
|-----------------------------

|Minneapolis,  Minnesota
|-----------------------

|
|

|We have audited the accompanying balance sheets of Subjex Corporation, as of December 31, 2002 and 2001, and the related statements of operations, stockholders equity (deficit) and cash flows for the years 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 audits.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|
|

|We conducted our audits in accordance with auditing standards generally accepted in the United States of America.  Those standards require that we plan and perform the audits 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 of the financial statements provides a reasonable basis for our opinion.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|
|

|In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Subjex Corporation, as of December 31, 2002 and 2001, and the results of its operations and its cash flows for the years then ended 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 described in Note 2, the Company incurred a net loss of $778,309 during the year ended December 31, 2002, and, as of that date, had an excess of liabilities over assets of $576,963.  Those conditions raise substantial doubt about the Company's ability to continue as a going concern.  The financial statements do not include any adjustments that might result from the outcome of this matter.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|
|

|/s/ Callahan, Johnston & Associates, LLC
|----------------------------------------

|
|

|
|

|CALLAHAN, JOHNSTON & ASSOCIATES, LLC
|------------------------------------

|Minneapolis,  Minnesota
|-----------------------

|March 21, 2003
|--------------

|
|

|
|

|7400 Lyndale Avenue South, Suite 140,Richfield,MN55423
|------------------------------------------------------

|Telephone: (612)861-0970        Fax: (612)861-5827
|--------------------------------------------------

|
|

| | 1 | 
| | - | 

|
|

|
|

|SUBJEX CORPORATION
|------------------

|
|

|BALANCE SHEETS
|--------------

|
|

|                                               |                                                     | December 31,                                 |         
|---------------------------------------------- | --------------------------------------------------- | -------------------------------------------- | --------
|                                               |                                                     |                                              |         
|                                               |                                                     | 2002                                         |         
|                                               |                                                     |                                              |         
|ASSETS                                         |                                                     |                                              |         
|                                               |                                                     |                                              |         
|Current Assets:                                |                                                     |                                              |         
|                                               | Cash                                                |                                              | $       
|                                               | Accounts receivable, net                            |                                              |         
|                                               | Prepaid expenses                                    |                                              |         
|                                               |                                                     |                                              |         
|                                               |                                                     | Total current assets                         |         
|                                               |                                                     |                                              |         
|Fixed assets, net                              |                                                     |                                              | 5,330   
|Other assets                                   |                                                     |                                              | - -     
|Intangibles, net                               |                                                     |                                              | - -     
|                                               |                                                     |                                              |         
|                                               |                                                     |                                              |         
|                                               |                                                     | Total assets                                 |         
|                                               |                                                     |                                              |         
|                                               |                                                     |                                              |         
|LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) |                                                     |                                              |         
|                                               |                                                     |                                              |         
|Current Liabilities:                           |                                                     |                                              |         
|                                               | Subordinated convertible notes payable              |                                              | $       
|                                               | Demand notes payable                                |                                              |         
|                                               | Current maturities of notes payable - related party |                                              |         
|                                               | Accounts payable                                    |                                              |         
|                                               | Accrued expenses:                                   |                                              |         
|                                               |                                                     | Payroll and payroll taxes                    |         
|                                               |                                                     | Other                                        |         
|                                               | Subscribed stock                                    |                                              |         
|                                               |                                                     |                                              |         
|                                               |                                                     | Total current liabilities                    |         
|                                               |                                                     |                                              |         
|Long-term debt:                                |                                                     |                                              |         
|                                               | Notes payable - related party                       |                                              |         
|                                               |                                                     |                                              |         
|                                               |                                                     | Total liabilities                            |         
|                                               |                                                     |                                              |         
|                                               |                                                     |                                              |         
|Stockholders' equity (deficit):                |                                                     |                                              |         
|                                               | Undesignated stock, no par or stated value;         |                                              |         
|                                               |                                                     | 10,000,000 shares authorized: none issued    |         
|                                               |                                                     | or outstanding                               |         
|                                               | Common stock, no par or stated value;               |                                              |         
|                                               |                                                     | 40,000,000 shares authorized: 24,611,888 and |         
|                                               |                                                     | 11,980,064 shares issued and outstanding in  |         
|                                               |                                                     | 2002 and 2001                                |         
|                                               | Accumulated deficit                                 |                                              |         
|                                               |                                                     |                                              |         
|Stockholders' equity (deficit)                 |                                                     |                                              | (576,963
|                                               |                                                     |                                              |         
|                                               |                                                     |                                              |         
|                                               | Total liabilities and                               |                                              |         
|                                               |                                                     | Stockholders equity (deficit)               |         
|                                               |                                                     |                                              |         

|
|

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

|
|

| |  | 
| |  | 

|
|

|
|

|SUBJEX CORPORATION
|------------------

|
|

|STATEMENTS OF OPERATIONS
|------------------------

|
|

|
|

|                                            |                                     | Years Ended December 31, |         
|------------------------------------------- | ----------------------------------- | ------------------------ | --------
|                                            |                                     |                          |         
|                                            |                                     | 2002                     |         
|                                            |                                     |                          |         
|                                            |                                     |                          |         
|Revenues                                    |                                     | $                        | 23,812  
|                                            |                                     |                          |         
|                                            |                                     |                          |         
|Expenses:                                   |                                     |                          |         
|                                            | Selling, general and administrative |                          |         
|                                            | Research and development            |                          |         
|                                            | Asset impairment                    |                          |         
|                                            |                                     |                          |         
|                                            |                                     |                          |         
|                                            |                                     |                          |         
|                                            |                                     |                          |         
|                                            |                                     | Operating loss           |         
|                                            |                                     |                          |         
|Other income (expense)                      |                                     |                          |         
|                                            | Interest expense                    |                          |         
|                                            | Other                               |                          |         
|                                            |                                     |                          |         
|                                            |                                     |                          |         
|Net loss                                    |                                     | $                        | (778,309
|                                            |                                     |                          |         
|                                            |                                     |                          |         
|Net loss per basic and diluted common share |                                     | $                        | (.04    
|                                            |                                     |                          |         
|                                            |                                     |                          |         
|Weighted average common shares              |                                     |                          |         
|                                            | outstanding - basic and dilutes     |                          |         
|                                            |                                     |                          |         

|
|

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

|
|

| |  | 
| |  | 

|
|

|
|

|SUBJEX CORPORATION
|------------------

|
|

|STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
|--------------------------------------------

|
|

|YEARS ENDED DECEMBER 31, 2002 AND 2001
|--------------------------------------

|
|

|
|

|                           |                                                  | Common Stock           |            |             |           |              |         | Stockholders |           
|-------------------------- | ------------------------------------------------ | ---------------------- | ---------- | ----------- | --------- | ------------ | ------- | ------------- | ----------
|                           |                                                  |                        |            | Accumulated |           | Subscription |         | Equity        |           
|                           |                                                  | Shares                 |            | Amount      |           | Deficit      |         | Receivable    |           
|                           |                                                  |                        |            |             |           |              |         |               |           
|                           |                                                  |                        |            |             |           |              |         |               |           
|BALANCE, January 1, 2001   |                                                  |                        | 10,187,998 |             | $         | 1,044,167    |         | $             | (1,304,496
|                           | Issuance of common stock                         |                        |            | 213,000     |           |              | 127,700 |               |           
|                           | Write off of subscription as uncollectible       |                        |            | - -         |           |              | (4,000  | )             |           
|                           | Issuance of common stock for payment of services |                        |            | 556,000     |           |              | 457,033 |               |           
|                           | Disputed issuances of common stock for           |                        |            |             |           |              |         |               |           
|                           |                                                  | payment of services    |            |             | 896,900   |              |         | 682,500       |           
|                           | Exercise of stock options and warrants           |                        |            | 126,166     |           |              | 41,883  |               |           
|                           | Net loss                                         |                        |            | - -         |           |              | - -     |               |           
|                           |                                                  |                        |            |             |           |              |         |               |           
|                           |                                                  |                        |            |             |           |              |         |               |           
|BALANCE, December 31, 2001 |                                                  |                        | 11,980,064 |             |           | 2,349,283    |         |               | (3,042,414
|                           |                                                  |                        |            |             |           |              |         |               |           
|                           | Stock issued for consulting services at          |                        |            |             |           |              |         |               |           
|                           |                                                  | $.10 per share         |            |             | 280,000   |              |         | 28,000        |           
|                           | Stock issued to purchase furniture at            |                        |            |             |           |              |         |               |           
|                           |                                                  | $.08 per share         |            |             | 22,000    |              |         | 1,760         |           
|                           | Stock issued to settle liability at              |                        |            |             |           |              |         |               |           
|                           |                                                  | $.03 to $.35 per share |            |             | 2,067,378 |              |         | 278,922       |           
|                           | Stock issued to employees at $.06 to             |                        |            |             |           |              |         |               |           
|                           |                                                  | $.35 per share         |            |             | 2,832,521 |              |         | 263,160       |           
|                           | Stock issued for cash at $.001 to                |                        |            |             |           |              |         |               |           
|                           |                                                  | $.23 per share         |            |             | 7,459,925 |              |         | 322,635       |           
|                           | Net loss                                         |                        |            | - -         |           |              | - -     |               |           
|                           |                                                  |                        |            |             |           |              |         |               |           
|                           |                                                  |                        |            |             |           |              |         |               |           
|BALANCE, December 31, 2002 |                                                  |                        | 24,641,888 |             | $         | 3,243,760    |         | $             | (3,820,723
|                           |                                                  |                        |            |             |           |              |         |               |           

|
|

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

|
|

| |  | 
| |  | 

|
|

|
|

|SUBJEX CORPORATION
|------------------

|
|

|STATEMENTS OF CASH FLOW
|-----------------------

|
|

|
|

|                                          |                                                     | Years Ended December 31,            |                                           
|----------------------------------------- | --------------------------------------------------- | ----------------------------------- | ------------------------------------------
|                                          |                                                     |                                     |                                           
|                                          |                                                     | 2002                                |                                           
|                                          |                                                     |                                     |                                           
|Cash flow from operating activities:      |                                                     |                                     |                                           
|                                          | Net loss                                            |                                     | $                                         
|                                          | Adjustments to reconcile net loss to                |                                     |                                           
|                                          |                                                     | net cash from operating activities: |                                           
|                                          |                                                     |                                     | Depreciation and amortization             
|                                          |                                                     |                                     | (Gain) loss on sale of property           
|                                          |                                                     |                                     |                                           
|                                          |                                                     |                                     | Loss on asset impairment                  
|                                          |                                                     |                                     | Compensation expense for issuance of      
|                                          |                                                     |                                     |                                           
|                                          |                                                     |                                     | Service fees paid in common stock         
|                                          |                                                     |                                     | Disputed service fees paid in common stock
|                                          |                                                     |                                     | Bad debt expense                          
|                                          | (Increase) decrease in assets:                      |                                     |                                           
|                                          |                                                     | Accounts receivable                 |                                           
|                                          |                                                     | Prepaid expenses                    |                                           
|                                          |                                                     | Other assets                        |                                           
|                                          |                                                     | Accounts payable                    |                                           
|                                          |                                                     | Accrued expenses                    |                                           
|                                          |                                                     |                                     |                                           
|Net cash used by operating activities     |                                                     |                                     | (370,532                                  
|                                          |                                                     |                                     |                                           
|                                          |                                                     |                                     |                                           
|Cash flow from investing activities:      |                                                     |                                     |                                           
|                                          | Purchase of property and equipment                  |                                     |                                           
|                                          | Proceeds from sale of property and equipment        |                                     |                                           
|                                          | Purchase of intangibles                             |                                     |                                           
|                                          |                                                     |                                     |                                           
|Net cash used by investing activities     |                                                     |                                     | (9,208                                    
|                                          |                                                     |                                     |                                           
|                                          |                                                     |                                     |                                           
|Cash flow from financing activities:      |                                                     |                                     |                                           
|                                          | Proceeds from issuance of common stock and warrants |                                     |                                           
|                                          | Proceeds from stock subscriptions                   |                                     |                                           
|                                          | Proceeds from notes payable                         |                                     |                                           
|                                          | Proceeds from notes from stockholder                |                                     |                                           
|                                          | Payments on stockholder notes                       |                                     |                                           
|                                          | Payments on notes payable                           |                                     |                                           
|                                          |                                                     |                                     |                                           
|Net cash provided by financing activities |                                                     |                                     | 408,512                                   
|                                          |                                                     |                                     |                                           
|                                          |                                                     |                                     |                                           
|Increase (decrease) in cash position      |                                                     |                                     | 28,772                                    
|Cash at beginning of year                 |                                                     |                                     | 70                                        
|                                          |                                                     |                                     |                                           
|Cash at end of year                       |                                                     | $                                   | 28,842                                    
|                                          |                                                     |                                     |                                           

|
|

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

|
|

| |  | 
| |  | 

|
|

|
|

|SUBJEX CORPORATION
|------------------

|
|

|NOTES TO THE FINANCIAL STATEMENTS
|---------------------------------

|
|

|YEARS ENDED DECEMBER 31, 2002 AND 2001
|--------------------------------------

|
|

|
|

|NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND OTHER INFORMATION
|-------------------------------------------------------------------------

|
|

|Nature of Business
|------------------

|
|

|Subjex Corporation (formerly known as Pagelab Network, Inc.) (the  "Company") has developed an artificial intelligence-based, next generation dialogue search engine, Subjex.  The Subjex engine is a licensable software applicable for on-site Web search, private databases, and wireless device infrastructures.  In addition to the licensing capability, the Subjex.com Web portal provides the search tool free to internet users, thereby demonstrating the dialogue capabilities of the Subjex engine and building a large transaction hub around e-commerce activity that occurs routinely via search engines.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|
|

|Merger of Business
|------------------

|
|

|In November 1999, a plan of acquisition was arranged between an inactive public shell, Imcro, Inc., and a private operating company, Pagelab Network, Inc., a Nevada corporation.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|
|

|Revenue Recognition
|-------------------

|
|

|The Company accounts for revenue recognition in accordance with Staff Accounting Bulletin (SAB) 101 Revenue Recognition in Financial Statements.  Revenues from software sales, product sales and consulting are recognized when products are shipped or services performed.  License fees are recognized upon completion of all required terms under the agreement.  The process typically begins with a customer purchase order detailing their hardware specifications so the Company can customize its software to the customers hardware.  Once customization is completed the Company typically transmits the software to the customer via the Internet.  Revenue is recognized at that point.  Once the software is transmitted the customers do not have a right of refusal or return.  Under some agreements the customers remit payment prior to the Company having completed customization or completion of any other required services.  In these instances the Company delays revenue recognition and instead reflects the prepayments as deferred revenue in the accompanying financial statements.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|
|

| | (Continued) | 
| | ----------- | 

|
|

|
|

|SUBJEX CORPORATION                    
|--------------------------------------
|                                      
|NOTES TO THE FINANCIAL STATEMENTS     
|                                      
|YEARS ENDED DECEMBER 31, 2002 AND 2001
|                                      
|                                      

|NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND OTHER  INFORMATION (Continued)
|--------------------------------------------------------------------------------------

|
|

|Cash Equivalents
|----------------

|
|

|For purposes of reporting cash flows, cash equivalents include investment instruments purchased with a maturity of three months or less.  There were no cash equivalents in 2002 or 2001.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|
|

|Fixed Assets
|------------

|
|

|Fixed assets are stated at cost.  Depreciation is computed using the straight-line method over the estimated useful lives of the related assets.  When assets are retired or otherwise disposed of, the cost and related accumulate depreciation are removed from the accounts and the resulting gain or loss is recognized in income for the period.  The cost of maintenance and repairs is expensed as incurred; significant renewals and betterments are capitalized.  Deduction is made for retirements resulting from renewals and betterments.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|
|

| |                         | Useful Lives | 
| | ----------------------- | ------------ | 
| |                         |              | 
| |                         |              | 
| | Computers and equipment |              | 
| | Furniture               |              | 
| | Operations equipment    |              | 

|
|

|Intangibles
|-----------

|
|

|Intangibles consist primarily of software and related technology used by the Company in its business activities.  The technology was originally developed by the president of the Company.  The technology was transferred to the Company in July 1999 in exchange for notes and stock as a part of an asset purchase agreement.  The Company has valued the intangibles based on the presidents reacquisition cost of the technology from a previous employer.  The basic rights are being amortized over five years, while certain protected assets are amortized over 20 years.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|
|

|The Company has also registered a number of trademarks and domain names, which it uses both in marketing and in the Internet presentation of its product.  Domain names are subject to annual renewal and are treated as expenses, though with renewal and development of recognition, future benefits may be realized.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|
|

| | (Continued) | 
| | ----------- | 

|
|

|
|

|SUBJEX CORPORATION                    
|--------------------------------------
|                                      
|NOTES TO THE FINANCIAL STATEMENTS     
|                                      
|YEARS ENDED DECEMBER 31, 2002 AND 2001
|                                      
|                                      

|NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND OTHER INFORMATION (Continued)
|-------------------------------------------------------------------------------------

|
|

|Impairment of Long-Lived Assets
|-------------------------------

|
|

|The Company evaluates the carrying value of its long-lived assets periodically to determine potential impairment by comparing the carrying value of the long-lived assets with the estimated future cash flows expected to result from the use of the assets, including cash flows from disposition.  Should the sum of the expected future cash flows be less than the carrying value, the Company would recognize an impairment loss.  An impairment loss would be measured by comparing the amount by which the carrying value exceeds the fair value of the long-lived assets and intangibles.  In 2002 and 2001, management has established provisions for the impairment of its fixed and intangible assets in the event sufficient revenues do not materialize in the near future.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|
|

|Financial Instruments
|---------------------

|
|

|Short-Term Assets and Liabilities:  The fair value of cash and cash equivalents, accounts receivable, accounts payable, accrued expenses, stock subscriptions and short-term debt approximate their carrying values due to the short-term nature of these financial instruments.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|
|

|Research and Development
|------------------------

|
|

|Research and development costs, whether performed by the Company or by outside parties under contract, are charged to operations as incurred.
|---------------------------------------------------------------------------------------------------------------------------------------------

|
|

|Computer Software Costs
|-----------------------

|
|

|Pursuant to Statement of financial Accounting Standards (:SFAS) No. 86, Accounting for the Costs of Computer Software to be Sold, Leased or Otherwise Marketed, issued by the Financial Accounting Standards Board, the Company is to capitalize certain software development and production costs once technological feasibility has been achieved.  Software development costs incurred prior to achieving technological feasibility were expenses as incurred.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|
|

| | (Continued) | 
| | ----------- | 

|
|

|
|

|SUBJEX CORPORATION                    
|--------------------------------------
|                                      
|NOTES TO THE FINANCIAL STATEMENTS     
|                                      
|YEARS ENDED DECEMBER 31, 2002 AND 2001
|                                      
|                                      

|NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND OTHER INFORMATION (Continued)
|-------------------------------------------------------------------------------------

|
|

|Computer Software Costs (Continued)
|-----------------------------------

|
|

|Management determined that technological feasibility occurred at the time the Companys software was available for general release to customers.  Accordingly, no computer software development costs have been capitalized in the accompanying financial statements.  In accordance with SFAS No. 86, costs of software maintenance and customer support since the software became available for general release have been charged to expense as incurred.  Amounts expensed for ongoing software maintenance in the accompanying financial statements are as follows:
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|
|

| | 2002 |  | $ | 50,000 | 
| | ---- |  | - | ------ | 
| | 2003 |  | $ | 50,000 | 

|
|

|Basic and Diluted Net Loss Per Share
|------------------------------------

|
|

|Basic per-share amounts are computed, generally, by dividing net income or loss by the weighted-average number of common shares outstanding.  Diluted per-share amounts assume the conversion, exercise, or issuance of all potential common stock instruments, unless their effect is antidilutive, thereby reducing the loss or increasing the income per common share.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|
|

|The Company has granted options and warrants to purchase shares of common stock at various amounts per share (see Note 6).  Those options and warrants were not included in the computation of dilutes earnings per share because the Company incurred losses in both years.  The inclusion of potential common shares in the calculation of dilutes loss per share would have an antidilutive effect.  Therefore, basic and diluted loss per share amounts are the same in each period presented.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|
|

|Stock-Based Consideration
|-------------------------

|
|

|The Company has applied for the fair value-based method of accounting for employee and nonemployee stock-based consideration and/or compensation in accordance with FASB Statement 123 (based on quoted market prices at the date of grant and/or as earned).
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|
|

| | (Continued) | 
| | ----------- | 

|
|

|
|

|SUBJEX CORPORATION                    
|--------------------------------------
|                                      
|NOTES TO THE FINANCIAL STATEMENTS     
|                                      
|YEARS ENDED DECEMBER 31, 2002 AND 2001
|                                      
|                                      

|NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND OTHER INFORMATION (Continued)
|-------------------------------------------------------------------------------------

|
|

|Concentrations, Risks and Uncertainties
|---------------------------------------

|
|

|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 reported amounts of revenues and expenses during the reporting period.  Actual results could differ from those estimates.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|
|

|Accounts Receivable
|-------------------

|
|

|The Company sells to domestic companies.  The Company grants uncollateralized credit to customers, but requires deposits on unique orders.  Management provided for an allowance for doubtful accounts at June 30, 2003.  While the ultimate collectibility may differ, management does not feel any variance would materially effect its financial statements.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | 2002                            |  | 2001 |       
| |  | ------------------------------- |  | ---- | ------
| |  |                                 |  |      |       
| |  |                                 |  |      |       
| |  | Accounts receivable             |  | $    | 2,000 
| |  | Allowance for doubtful accounts |  |      | (2,000
| |  |                                 |  |      |       
| |  |                                 |  |      |       
| |  | Accounts receivable, net        |  | $    | - -   
| |  |                                 |  |      |       

|
|

|Disputed Liabilities
|--------------------

|
|

|The Company has disputed liabilities as disclosed in Note 10.  These disputed liabilities are not reflected in the accompanying financial statements.  Management feels that no amounts will ever have to be paid on this disputed liabilities.  Due to uncertainties, however, it is at least reasonably possible that managements estimate will change during the next year.  That amount can not be estimated.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|
|

| | (Continued) | 
| | ----------- | 

|
|

|
|

|SUBJEX CORPORATION                    
|--------------------------------------
|                                      
|NOTES TO THE FINANCIAL STATEMENTS     
|                                      
|YEARS ENDED DECEMBER 31, 2002 AND 2001
|                                      
|                                      

|NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND OTHER INFORMATION (Continued)
|-------------------------------------------------------------------------------------

|
|

|Comprehensive Income
|--------------------

|
|

|SFAS No. 130 establishes standards for the reporting and disclosure of comprehensive income and its components which will be presented in association with the Companys financial statements.  Comprehensive income is defined as the change in a business enterprises equity during a period arising from transactions, events or circumstances relating to nonowner sources, such as foreign currency translation adjustments and unrealized gains or losses on available-for-sale securities.  It includes all changes in equity during a period except those resulting from investments by or distributions to owners.  For the years ended December 31, 2002 and 2001, net income and comprehensive income were equivalent.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|
|

|Income Taxes
|------------

|
|

|The Company accounts for income taxes in accordance with Statement of Financial Accounting Standards No. 109,  Accounting for Income Taxes which requires the use of the  liability method  of accounting for income taxes.  The Companys net operating loss carryforwards are fully allowed for due to questions regarding the Companys ability to utilize these losses before they expire.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|
|

|Reclassifications
|-----------------

|
|

|Certain reclassifications have been made to the 2001 financial statements to conform to the 2002 presentation.  These reclassifications had no net income effect.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------

|
|

|NOTE 2 - BASIS OF PRESENTATION
|------------------------------

|
|

|The financial statements have been prepared on a going-concern basis, which contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business.  The Company has incurred a net loss of $778,309 in the year ended December 31, 2002 and has incurred net losses of $3,820,723 inception to date.  In addition, as of December 31, 2002, the Company had a stockholders deficit of $576,963.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|
|

| | (Continued) | 
| | ----------- | 

|
|

|
|

|SUBJEX CORPORATION                    
|--------------------------------------
|                                      
|NOTES TO THE FINANCIAL STATEMENTS     
|                                      
|YEARS ENDED DECEMBER 31, 2002 AND 2001
|                                      
|                                      

|NOTE 2 - BASIS OF PRESENTATION (Continued)
|------------------------------------------

|
|

|These factors, among others, indicate that the Company may not be able to continue as a going concern for a reasonable period of time.  In 2002, the Company raised working capital through the issuance of common stock, exercise of warrants and receipt of proceeds for subscribed stock totaling $455,735.  In 2002, sufficient working capital could not be raised and the Company was forced to terminate employees.  At present the Company is fully dependent upon equity financing as cash flows from operating activities are not sufficient to cover operating expenses.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|
|

|The Company continues to seek debt and equity financing to fund its working capital needs.  Failure of the Company raise additional debt and equity financing in the near future and achieve profitable operations in the long-term could result in the Company being unable to continue as a going concern.  No estimate can be made of the range of loss that is reasonably possible should the Company be unsuccessful.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|
|

|NOTE 3 - PROPERTY AND EQUIPMENT
|-------------------------------

|
|

|Property and equipment consisted of the following at December 31:
|-----------------------------------------------------------------

|
|

| |                               | 2002 |   | 2001    |  
| | ----------------------------- | ---- | - | ------- | -
| |                               |      |   |         |  
| |                               |      |   |         |  
| | Office and computer equipment |      | $ | 34,660  |  
| | Accumulated depreciation      |      |   | (14,522 | )
| | Reserve for impairment        |      |   | (14,808 | )
| |                               |      |   |         |  
| |                               |      | $ | 5,330   |  
| |                               |      |   |         |  

|
|

|Depreciation expense was $6,316 in 2002 and $9,449 in 2001.
|-----------------------------------------------------------

|
|

|NOTE 4 - INTANGIBLE ASSETS
|--------------------------

|
|

|Intangible assets consisted of the following at December 31:
|------------------------------------------------------------

|
|

| |                          | 2002 |   | 2001     |  
| | ------------------------ | ---- | - | -------- | -
| |                          |      |   |          |  
| |                          |      |   |          |  
| | Technology               |      | $ | 250,000  |  
| | Trademarks               |      |   | 1,715    |  
| |                          |      |   |          |  
| |                          |      |   | 251,715  |  
| | Accumulated amortization |      |   | (167,475 | )
| | Reserve for impairment   |      |   | (84,240  | )
| |                          |      |   |          |  
| |                          |      | $ | - -      |  
| |                          |      |   |          |  

|
|

| | (Continued) | 
| | ----------- | 

|
|

|
|

|SUBJEX CORPORATION                    
|--------------------------------------
|                                      
|NOTES TO THE FINANCIAL STATEMENTS     
|                                      
|YEARS ENDED DECEMBER 31, 2002 AND 2001
|                                      
|                                      

|NOTE 5 - DEBT
|-------------

|
|

|Long-term debt consisted of the following at December 31:
|---------------------------------------------------------

|
|

|Notes Payable  Due on Demand
|-----------------------------

|
|

|The notes payable  due on demand, represent short-term operating loans granted the Company in 2001 and 2000.  These notes are unsecured, due on demand and bear interest at 12%.  Due to cash flow difficulties the Company has been unable to repay these amounts.  A summary of activity is as follows:
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|
|

| |                   | 2002                      |   | 2001   |        
| | ----------------- | ------------------------- | - | ------ | -------
| |                   |                           |   |        |        
| |                   |                           |   |        |        
| | Beginning of year |                           | $ | 41,500 |        
| | Advances          |                           |   | - -    |        
| | Repayments:       |                           |   |        |        
| |                   | Cash                      |   |        | - -    
| |                   | Stock issued in repayment |   |        | (21,500
| |                   |                           |   |        |        
| |                   |                           |   |        |        
| | End of year       |                           | $ | 20,000 |        
| |                   |                           |   |        |        

|
|

|
|

|Convertible Notes Payable
|-------------------------

|
|

|The convertible notes payable are unsecured, bear interest at 10% and were due at various dates, with all currently being due.  Due to cash flow difficulties the Company has been unable to repay these amounts.  A summary of activity is as follows:
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|
|

| |                   | 2002                      |   | 2001   |        
| | ----------------- | ------------------------- | - | ------ | -------
| |                   |                           |   |        |        
| | Beginning of year |                           | $ | 94,000 |        
| | Advances          |                           |   | - -    |        
| | Repayments:       |                           |   |        |        
| |                   | Cash                      |   |        | - -    
| |                   | Stock issued in repayment |   |        | (71,000
| |                   |                           |   |        |        
| |                   |                           |   |        |        
| | End of year       |                           | $ | 23,000 |        
| |                   |                           |   |        |        

|
|

| | (Continued) | 
| | ----------- | 

|
|

|
|

|SUBJEX CORPORATION                    
|--------------------------------------
|                                      
|NOTES TO THE FINANCIAL STATEMENTS     
|                                      
|YEARS ENDED DECEMBER 31, 2002 AND 2001
|                                      
|                                      

|NOTE 5  DEBT (Continued)
|-------------------------

|
|

|Convertible Notes Payable (Continued)
|-------------------------------------

|
|

|The holders of these notes have the right to convert each dollar of unpaid principal to one share of common stock.  As additional incentive, the Company also granted warrants to purchase 94,000 shares of the Companys common stock for $1.00 per share.  These warrants were immediately exercisable and expired December 31, 2002.  The value ascribed to these warrants was nominal using the Black-Scholes option pricing model.  In 2002 $71,000 shares of this indebtedness was converted into the Companys common stock at $.04 per share.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|
|

|Notes Payable  Related Party
|-----------------------------

|
|

|                                         |                                         | 2002 |         | 2001   | 
|---------------------------------------- | --------------------------------------- | ---- | ------- | ------ | 
|                                         |                                         |      |         |        | 
|                                         |                                         |      |         |        | 
|6% note payable to majority stockholder, |                                         |      |         |        | 
|                                         | payable in monthly installments of      |      |         |        | 
|                                         | $2,915, including interest, to April 1, |      |         |        | 
|                                         | 2004, unsecured.                        |      | $       | 42,531 | 
|                                         |                                         |      |         |        | 
|6% note payable to majority stockholder, |                                         |      |         |        | 
|                                         | payable in full, including interest,    |      |         |        | 
|                                         | on September 1, 2003, unsecured.        |      |         | 20,000 | 
|                                         |                                         |      |         |        | 
|                                         |                                         |      |         | 62,531 | 
|Less current maturities                  |                                         |      | (51,002 | )      | 
|                                         |                                         |      |         |        | 
|                                         |                                         |      |         |        | 
|                                         |                                         |      | $       | 11,529 | 
|                                         |                                         |      |         |        | 

|
|

|Approximate maturities of the notes payable  related party are as follows:
|---------------------------------------------------------------------------

|
|

|Years ending December 31: |  |      | 
|------------------------- |  | ---- | 
|                          |  | 2003 | 
|                          |  | 2004 | 
|                          |  |      | 
|                          |  |      | 
|                          |  |      | 
|                          |  |      | 

|
|

|Interest on the notes payable  related party totaled $6,085 in 2002 and $10,096 in 2001.
|-----------------------------------------------------------------------------------------

|
|

| | (Continued) | 
| | ----------- | 

|
|

|
|

|SUBJEX CORPORATION                    
|--------------------------------------
|                                      
|NOTES TO THE FINANCIAL STATEMENTS     
|                                      
|YEARS ENDED DECEMBER 31, 2002 AND 2001
|                                      
|                                      

|NOTE 6  STOCKHOLDERS EQUITY
|----------------------------

|
|

|Subscribed Stock:
|-----------------

|
|

|In November and December 2002, the Company collected stock proceeds totaling $133,100 towards the purchase of 1,331,000 shares of the Companys common stock at $.10 per share.  On January 31, 2003, the Company issued 1,331,000 in satisfaction of this obligation.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|
|

|Stock Options:
|--------------

|
|

|During 1999, the Company adopted the Pagelab Network, Inc. Stock Option and Stock Award Plan (the Plan).  The Plan permits the granting of incentive stock options meeting the requirements of Section 422 of the Internal Revenue Code of 1986, as amended, and nonqualified options, which do not meet the requirements of Section 422.  A total of 2,500,000 shares have been reserved under the Plan through the period ending December 31, 2002.  All options will be granted at an exercise price not less than the fair market value of the common stock on the grant date according to the plan provisions.  The options granted to participants owning more than 10 percent of the Companys outstanding voting stock must be granted at an exercise price not less than 110 percent of fair market value of the common stock on that date.  The options shall expire on the date determined by the Board of Directors, but not greater than 10 years from the grant date.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|
|

|Grants under that Plan are accounted for following APB Opinion No. 25 and related interpretations.  The fair value of each option grant is estimated on the date of the grant using the Black-Scholes option pricing model with the following weighted-average assumptions:
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|
|

| | Expected dividend yield         |  | - - |            
| | ------------------------------- |  | --- | -----------
| | Expected stock price volatility |  | 20  | %          
| | Risk-free interest rate         |  |     | 5.01 - 5.20
| | Expected life of options        |  |     | 2 - 3 years

|
|

| | (Continued) | 
| | ----------- | 

|
|

|
|

|SUBJEX CORPORATION                    
|--------------------------------------
|                                      
|NOTES TO THE FINANCIAL STATEMENTS     
|                                      
|YEARS ENDED DECEMBER 31, 2002 AND 2001
|                                      
|                                      

|NOTE 6  STOCKHOLDERS EQUITY  (Continued)
|------------------------------------------

|
|

|A summary of outstanding options under the Plan is as follows:
|--------------------------------------------------------------

|
|

|                    |                     | 2002               |  | 2001      |       
|------------------- | ------------------- | ------------------ |  | --------- | ------
|                    |                     |                    |  |           |       
|                    |                     |                    |  | Weighted- |       
|                    |                     |                    |  | Average   |       
|                    |                     |                    |  | Exercise  |       
|                    |                     | Shares             |  | Price     |       
|                    |                     |                    |  |           |       
|                    |                     |                    |  |           |       
|Outstanding at      |                     |                    |  |           |       
|                    | beginning of period |                    |  | 828,970   |       
|                    |                     | Granted            |  |           | - -   
|                    |                     | Exercised          |  |           | (9,000
|                    |                     | Canceled           |  |           | - -   
|                    |                     |                    |  |           |       
|                    |                     |                    |  |           |       
|Outstanding at      |                     |                    |  |           |       
|                    | end of period       |                    |  | 817,970   |       
|                    |                     |                    |  |           |       
|                    |                     |                    |  |           |       
|Weight-average fair |                     |                    |  |           |       
|                    |                     | value of options   |  |           |       
|                    |                     | granted during the |  |           |       
|                    |                     | year               |  |           |       
|                    |                     |                    |  |           |       

|
|

|Warrants:
|---------

|
|

|The Company issued warrants to some of the purchasers of its common stock in 2002.  These warrants provide for the purchase of a share of the Companys common stock as follows:
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|
|

|                     |  |          |     |      |            | Price Target |       
|-------------------- |  | -------- | --- | ---- | ---------- | ------------ | ------
|                     |  | Exercise |     |      |            | To Validate  |       
|Shares Under Warrant |  | Price    |     | Date |            | Option       |       
|                     |  |          |     |      |            |              |       
|                     |  |          |     |      |            |              |       
|300,000              |  | $        | .10 |      | 6/2/04     |              |       
|354,800              |  | $        | .25 |      | 6/18/05 to |              | $     
|                     |  |          |     |      |            |              | 6/7/17

|
|

| | (Continued) | 
| | ----------- | 

|
|

|
|

|SUBJEX CORPORATION                    
|--------------------------------------
|                                      
|NOTES TO THE FINANCIAL STATEMENTS     
|                                      
|YEARS ENDED DECEMBER 31, 2002 AND 2001
|                                      
|                                      

|NOTE 7 - INCOME TAXES
|---------------------

|
|

|The Companys net operating loss carryforwards are fully allowed for due to questions regarding the Companys ability to utilize these losses before they expire.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                   |                              | 2002 |          | 2000    |  
|---------------------------------- | ---------------------------- | ---- | -------- | ------- | -
|                                   |                              |      |          |         |  
|                                   |                              |      |          |         |  
|Deferred tax asset relating to net |                              |      |          |         |  
|                                   | operating loss carryforwards |      | $        | 860,000 |  
|Valuation allowance                |                              |      | (860,000 | )       |  
|                                   |                              |      |          |         |  
|                                   |                              |      |          |         |  
|Net deferred tax asset             |                              | $    | - -      |         | $
|                                   |                              |      |          |         |  

|
|

|At December 31, 2002, the Company has carryforwards as follows:
|---------------------------------------------------------------

|
|

|                                             |                 | Federal                                |                              | State                        |      
|-------------------------------------------- | --------------- | -------------------------------------- | ---------------------------- | ---------------------------- | -----
|                                             |                 |                                        |                              |                              |      
|                                             |                 |                                        |                              |                              |      
|                                             | 2014            |                                        | $                            | 49,000                       |      
|                                             | 2015            |                                        |                              | 1,010,000                    |      
|                                             | 2016            |                                        |                              | 1,051,000                    |      
|                                             | 2017            |                                        |                              | 778,000                      |      
|                                             |                 |                                        |                              |                              |      
|                                             |                 |                                        |                              |                              |      
|                                             |                 |                                        |                              |                              |      
|                                             |                 |                                        |                              |                              |      
|                                             |                 |                                        |                              |                              |      
|NOTE 8 - SUPPLEMENTAL INFORMATION            |                 |                                        |                              |                              |      
|                                             |                 |                                        |                              |                              |      
|                                             |                 | 2002                                   |                              | 2001                         |      
|                                             |                 |                                        |                              |                              |      
|Supplemental disclosure of                   |                 |                                        |                              |                              |      
|cash flow information:                       |                 |                                        |                              |                              |      
|                                             |                 | Cash paid during the year for interest |                              | $                            | 4,689
|                                             |                 |                                        |                              |                              |      
|                                             |                 |                                        |                              |                              |      
|Supplemental disclosure of noncash investing |                 |                                        |                              |                              |      
|                                             | and activities: |                                        |                              |                              |      
|                                             |                 | Transfer of vehicle to stockholder for |                              |                              |      
|                                             |                 |                                        | long-term debt               |                              | $    
|                                             |                 |                                        |                              |                              |      
|                                             |                 | Common stock issued for fixed assets   |                              | $                            | 1,760
|                                             |                 |                                        |                              |                              |      
|                                             |                 | Common stock issued and warrants and   |                              |                              |      
|                                             |                 |                                        | options exercised to settle: |                              |      
|                                             |                 |                                        |                              | Liabilities                  |      
|                                             |                 |                                        |                              |                              |      
|                                             |                 |                                        |                              | Note payable - related party |      
|                                             |                 |                                        |                              |                              |      

|
|

| | (Continued) | 
| | ----------- | 

|
|

|
|

|SUBJEX CORPORATION                    
|--------------------------------------
|                                      
|NOTES TO THE FINANCIAL STATEMENTS     
|                                      
|YEARS ENDED DECEMBER 31, 2002 AND 2001
|                                      
|                                      

|NOTE 9 - LEASE
|--------------

|
|

|The Company leases its offices under a month-to-month operating lease.  Rent expense was $9,335 in 2002 and $27,789 in 2001.
|----------------------------------------------------------------------------------------------------------------------------

|
|

|
|

|NOTE 10  DISPUTED LIABILITIES
|------------------------------

|
|

|During 2001, the Company was billed $20,082 for goods and services it claims it did not receive.  These disputed liabilities are not reflected in the accompanying financial statements.  Management feels that no amounts will ever have to be paid on this disputed liabilities. Due to uncertainties, however, it is at least reasonably possible that managements estimate will change during the next year.  That amount can not be estimated.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|
|

|In 2001, the Company entered into agreements to issue 1,021,900, some restricted and some unrestricted, shares of its common stock to various service providers.  The Company later found that these service providers had not performed any services for the Company.  Accordingly, the Company notified its stock transfer agent to cancel these disputed certificates.  The restricted certificates can be canceled when presented, but the unrestricted shares are only cancelable if the certificates are voluntarily returned.  To date none of the disputed certificates have been voluntarily returned.  At December 31, 2002, these disputed shares are shown as outstanding in the accompanying financial statements.  The Companys ability to recover any of these shares can not be determined.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|
|

|In October 2002, the Company entered into an agreement to acquire B2 Ventures, Inc. for 2,000,000 shares of the Companys common stock.  Subsequent to entering into this transaction the Company found that B2 Ventures, Inc. did not comply with material provisions of the Acquisition Agreement.  The Company terminated the Acquisition Agreement and did not issue the 2,000,000 shares of its common stock due to the founders of B2 Ventures, Inc.   Management feels that the material breaches of the Asset Agreement by B2 Ventures, Inc. protect the Company from any claim.  Due to uncertainties in the settlement of any contractual matter the ultimate resolution of this matter can not be determined at December 31, 2002.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|
|

| | (Continued) | 
| | ----------- | 

|
|

|
|

|NOTE 11 - SUBSEQUENT EVENTS
|---------------------------

|
|

|In 2003, the Company issued 157,215 shares of its common stock in satisfaction of debts totaling $15,722.
|---------------------------------------------------------------------------------------------------------

|
|

|In 2003, the Company also issued 916,000 shares of its common stock to employees.  This stock will vest with the employees at a rate of twenty-five percent (25%) per quarter from January 31, 2003 to January 31, 2004.  Any unearned portion must be returned to the Company should employment terminate for any reason prior to vesting.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|
|

|
|

| |  | 
| |  | 

|
|

|
|