##### 



U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549


Form 10-QSB

x
    
    QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


For the quarterly period ended June 30, 2003

o
    
    TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


For the transition period from  to .

Commission file number 0-26599

SIMEX Technologies, Inc.

(Exact name of registrant as specified in its charter)


Delaware
(State or other jurisdiction of
incorporation or organization)
    
    58-2465647
(I.R.S. Employer
Identification No.)2890 Normandy Dr. NW
Atlanta, Georgia
(Address of principal executive offices)
    
    30305
(Zip Code)


Registrants telephone number, including area code(404) 580-8152

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

Applicable only to issuers involved in bankruptcy proceedings during the preceding five years

Check whether the registrant filed all documents and reports required to
be filed by Section 12, 13 or 15(d) of the Exchange Act after the
distribution of securities under a plan confirmed by a court. Yes o No o

Applicable only to corporate issuers

State the number of shares outstanding of each of the issuers classes of
common equity, as of the latest practicable date. As of September 19,
2003, there were 16,554,908 shares of common stock, par value $0.001,
issued and outstanding.

Transitional Small Business Disclosure Format
(check one):

Yes o No o





---



##### 



SIMEX Technologies, Inc.

TABLE OF CONTENTS

PART IITEM 1
    
    Financial Statements
    
    
    4ITEM 2
    
    Managements Discussion and Analysis or Plan of Operation
    
    
    17ITEM 3
    
    Controls and Procedures
    
    
    20PART IIITEM 1
    
    Legal Proceedings
    
    
    21ITEM 2
    
    Changes in Securities and Use of Proceeds
    
    
    21ITEM 3
    
    Defaults Upon Senior Securities
    
    
    21ITEM 4
    
    Submission of Matters to a Vote of Security Holders
    
    
    21ITEM 5
    
    Other Information
    
    
    21ITEM 6
    
    Exhibits and Reports on Form 8-K
    
    
    22


2



---



##### 






PART I

This Quarterly Report includes forward-looking statements within the
meaning of the Securities Exchange Act of 1934 (the Exchange Act). These
statements are based on managements beliefs and assumptions, and on
information currently available to management. Forward-looking statements
include the information concerning possible or assumed future results of
operations of the Company set forth under the heading Managements
Discussion and Analysis of Financial Condition or Plan of Operation.
Forward-looking statements also include statements in which words such as
expect, anticipate, intend, plan, believe, estimate,
consider or similar expressions are used.

Forward-looking statements are not guarantees of future performance. They
involve risks, uncertainties and assumptions. The Companys future results
and shareholder values may differ materially from those expressed in these
forward-looking statements. Readers are cautioned not to put undue
reliance on any forward-looking statements.

This quarterly report has not been reviewed by the Companys Certified
Public Accountants. There is no disagreement with the Companys Certified
Public Accountants, which prevented their review. Their review was not
performed because the Company did not provide a timely accounting of
transactions involving the reverse acquisition with Probity
Investigations, Inc., which occurred on May 20, 2003 (see Note 1 to
financial statements) and the subsequent rescission of the reverse
acquisition which was executed on September 18, 2003 (see Part II Item 5.
Other Information). The Company believes that a review by the Companys
Certified Public Accountants will be completed in the near future and an
amended 10-QSB filed at that time, if there are any items that require
amendment identified in the review.

3



---



##### 






ITEM 1                   Financial Statements

Probity Investigations, Inc.
(Accounting and Reporting Successor to Simex
Technologies, Inc.  see Note 1)
Condensed Consolidated Balance Sheet
June 30, 2003
(Unaudited and not reviewed by the Companys
Certified Public Accountants)

AssetsCurrent assets:Cash
    
    $
    74,086Accounts receivable  net of allowance
    
    
    228,785Inventory
    
    
    2,563,986Other current assets
    
    
    27,785Total current assets
    
    
    2,894,642Property and equipment, at cost less accumulated
depreciation and amortization
    
    
    280,901Due from stockholder
    
    
    124,379Other assets
    
    
    20,207$
    3,320,129Liabilities and Stockholders EquityCurrent liabilities:Notes payable
    
    $
    125,918Due to stockholder
    
    
    18,007Accounts payable and accrued liabilities
    
    
    869,708Total current liabilities
    
    
    1,013,633Commitments and contingenciesStockholders equity:Series A Convertible Preferred stock, $.001 par
value, 928,006 shares authorized and outstanding
    
    
    928Series B Convertible Preferred stock, $.001 par
value, 1,496,042 shares authorized and
outstanding
    
    
    1,496Common stock, $.001 par value, 50,000,000 shares
authorized, 36,185,916 shares issued and
outstanding
    
    
    36,186Additional paid-in capital
    
    
    3,273,557Accumulated deficit
    
    
    (1,005,671
    )Total stockholders equity
    
    
    2,306,496$
    3,320,129


See accompanying notes to condensed consolidated
financial statements.

4



---



##### 



Probity Investigations, Inc.
(Accounting and Reporting Successor to Simex
Technologies, Inc.  see Note 1)
Condensed Consolidated Statements of
Operations(Unaudited and not reviewed by the
Companys Certified Public
Accountants)

Three Months Ended
    
    Six Months EndedJune 30
    
    June 302003
    
    2002
    
    2003
    
    2002Revenue
    
    $
    356,827
    
    
    $
    172,071
    
    
    $
    672,989
    
    
    $
    345,885Cost of revenue
    
    
    176,379
    
    
    
    110,121
    
    
    
    432,464
    
    
    
    218,735Gross profit
    
    
    180,448
    
    
    
    61,950
    
    
    
    240,525
    
    
    
    127,150Selling, general
and administrative
expenses
    
    
    288,106
    
    
    
    146,361
    
    
    
    538,855
    
    
    
    321,203Loss from operations
    
    
    (107,658
    )
    
    
    (84,411
    )
    
    
    (298,330
    )
    
    
    (194,053
    )Interest expense
    
    
    8,300
    
    
    
    1,519
    
    
    
    15,519
    
    
    
    3,489Loss from
operations before
income taxes
    
    
    (115,958
    )
    
    
    (85,930
    )
    
    
    (313,849
    )
    
    
    (197,542
    )Income taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Net loss
    
    
    (115,958
    )
    
    
    (85,930
    )
    
    
    (313,849
    )
    
    
    (197,542
    )Loss per share
(note 2):Basic and diluted
loss per share
    
    $
    (0.00
    )
    
    $
    (0.00
    )
    
    $
    (0.01
    )
    
    $
    (0.01
    )Weighted average
shares outstanding,
basic and diluted
    
    
    36,185,916
    
    
    
    36,185,916
    
    
    
    36,185,916
    
    
    
    36,185,916


See accompanying notes to condensed consolidated
financial statements.

5



---



##### 



Probity Investigations, Inc.
(Accounting and Reporting Successor to
Simex Technologies, Inc.  see Note 1)
Condensed Consolidated Statements of Cash
Flows
(Unaudited and not reviewed by the
Companys Certified Public Accountants)

Six Months EndedJune 302003
    
    2002Cash flows from operating activities:Net loss
    
    $
    (313,849
    )
    
    $
    (197,542
    )Adjustments to reconcile net loss to net
cash used in operating activities:Depreciation and amortization
    
    
    3,502
    
    
    
    Changes in assets and liabilities
Accounts receivable
    
    
    (148,759
    )
    
    
    (15,535
    )Inventory
    
    
    (1,703,179
    )
    
    
    (262,679
    )Other current assets
    
    
    (544
    )
    
    
    Accounts payable and accrued liabilities
    
    
    (292,042
    )
    
    
    310,314Other current liabilities
    
    
    
    
    
    
    10,457Amounts due to stockholder
    
    
    18,007
    
    
    
    4,374Net cash used in operating activities
    
    
    (2,436,864
    )
    
    
    (150,611
    )Cash flows from investing activities:Cash acquired from reverse acquisition
    
    
    213,432
    
    
    
    Purchases of property and equipment
    
    
    (62,593
    )
    
    
    (4,559
    )Net cash provided by (used in) investing
activities
    
    
    150,839
    
    
    
    (4,559
    )Cash flows from financing activities:Issue convertible preferred stock for
accounts payable
    
    
    1,772,309
    
    
    
    Convert notes payable to equity
    
    
    398,605
    
    
    
    Increase loan from shareholder
    
    
    
    
    
    
    200,000Payments on short term notes
    
    
    (25,678
    )
    
    
    Net cash provided by financing
activities
    
    
    2,145,236
    
    
    
    200,000Net increase (decrease) in cash
    
    
    (140,789
    )
    
    
    44,830Cash at beginning of period
    
    
    214,875
    
    
    
    22,528Cash at end of period
    
    $
    74,086
    
    
    $
    67,358Supplemental Disclosure of Cash Flow
InformationCash paid during the period for interest
    
    $
    
    
    
    $
    Cash paid during the period for income taxes
    
    $
    
    
    
    $
    


See accompanying notes to condensed
consolidated financial statements.

6



---



##### 



Probity Investigations, Inc.
(Accounting and Reporting Successor to Simex Technologies, Inc.)
Notes to Condensed Consolidated Financial Statements
June 30, 2003
(Unaudited and not reviewed by the Companys Certified Public Accountants)

Note 1: Basis of Presentation

Probity Investigations, Inc. (Probity) was incorporated on January 29,
1996 under the laws of the state of Georgia for the primary business
purpose of providing security services and equipment to commercial
businesses. On August 26, 2002 Probity formed a wholly owned subsidiary
Kyros, LLC (Kyros) for the purposes of distributing video security
monitoring equipment. On September 9, 2002 Probity entered into an
agreement with Wooju Communications Co., Ltd. (Wooju) whereby Wooju would
provide inventory and working capital to Kyros in return for an equity
position in Kyros. Wooju provided approximately $2,800,000 to Kyros in
the form of inventory and cash. On April 23, 2002 Probity formed a
wholly owned subsidiary Remote Business Management, LLC (RBM) for the
purposes of installing video security monitoring equipment.

Effective as of May 20, 2003, Simex Technologies, Inc. (Simex or the
Company) acquired all of the outstanding stock of Probity and
correspondingly ownership of Probitys wholly owned subsidiaries, Kyros
and RBM. As a result of the share exchange transaction with Probity and
the issuance, by Simex, of shares of Simex Common Stock, Series A
Convertible Preferred Stock (Series A) and Series B Convertible Preferred
Stock (Series B) in connection therewith, a change in the control of the
ownership of Simex occurred as of May 20, 2003.

As a result of the foregoing described transaction, the former
shareholders of Probity (the Probity Shareholders) owned, as of June 30,
2003, the following number of shares of the Simexs capital stock: Gary
Todd Redding, 10,316,995 shares of Common Stock, 897,625 shares of Series
B; Wooju Communications Co., Inc., 6,877,997 shares of Common Stock,
928,006 shares of Series A, 598,417 shares of Series B; Eutopean
Enterprises, LLC, 2,436,016 shares of Common Stock. Each share of Series B
is entitled to ten votes on all matters on which the shares of Common
Stock are entitled to vote. As of the date of the closing of the share
exchange transaction, considering votes associated with issued common
shares and voting rights associated with the Series B, the Probity
Shareholders collectively controlled approximately 67.6% of the voting
power of the Company.

In addition, upon completion of the share exchange transaction, Gary Todd
Redding, L. Scott Demerau and Kyu Hung Jang were elected to the Board of
Directors of Simex, and therefore, the former shareholders of Probity, or
persons associated
therewith, control three-fifths of the Companys Board of Directors, as
of June 30, 2003.

7



---



##### 



Our common stock is registered with the Securities and Exchange Commission
(SEC) and is presently quoted on the over the counter bulletin board. The
Company did not file this June 30, 2003 Form 10-QSB by the required
extended filing date of August 19, 2003. As a result, the Company became
delinquent, and had 30 days to file its Form 10-QSB for the period ended
June 30, 2003 or the Company would be ineligible for quotation on the
over-the-counter bulletin board.

Simex is a public company that in 2002 sold all of its operating
subsidiaries, thus Simex has no 2003 revenues. Simexs assets, as of June
30, 2003 consisted primary of cash of approximately $72,000. For
accounting purposes, Probity, as of May 20, 2003, is viewed as the
acquiring entity and has accounted for the transaction as a reverse
acquisition. The SEC staffs accounting and reporting guidance indicates
that the merger of a private operating company into a nonoperating public
shell corporation with nominal net assets is in substance a capital
transaction rather than a business combination. That is, the transaction
is equivalent to the private company issuing common stock for the net
monetary assets of the shell corporation, accompanied by a
recapitalization. Accordingly, the historical stockholders equity of
Probity as of June 30, 2003 as presented in the accompanying consolidated
balance sheet reflects the 36,185,916 shares of outstanding common stock
of Simex, with the resulting adjustment reflected in additional paid-in
capital. The loss per share as presented in the accompanying consolidated
statements of operations also reflects the 36,185,916 shares of
outstanding common stock of Simex.

The accumulated deficit of Probity has been carried forward after the
acquisition. Results of operations prior to May 20, 2003 reflect the
combined results of operations of Probity. Results of operations
subsequent to May 20, 2003 reflect the combined results of operations of
Probity and Simex. Assets and liabilities of Probity and Simex were
combined at their historical cost carrying amounts at the date of
acquisition.

For SEC reporting purposes, Probity is treated as the continuing reporting
entity that acquired a registrant, that is, as if Probity were the legal
successor to Simexs SEC reporting obligations as of the date of the
acquisition.

Note 2: Nature of Operations and Summary of Significant Accounting
Policies

Nature of Presentation

This quarterly report has not been reviewed by the Companys Certified
Public Accountants. There is no disagreement with the Companys Certified
Public Accountants, which prevented their review. Their review was not
performed because the Company did not provide a timely accounting of
transactions involving the reverse acquisition with Probity
Investigations, Inc., which
occurred on May 20, 2003 (see Note 1 to financial statements) and the
subsequent rescission of the reverse acquisition which was executed on
September 18, 2003 (see Part II Item 5. Other Information). The Company
believes that a review by the Companys Certified Public Accountants will
be completed in the near future and an amended 10-QSB filed at that time,
if required.

8



---



##### 



The accompanying unaudited condensed consolidated financial statements
include the accounts of Probity and Simex as discussed in Note 1. All
significant intercompany accounts and transactions have been eliminated in
consolidation.

The accompanying consolidated financial statements have been prepared in
accordance with accounting principles generally accepted in the United
States of America and in accordance with the SECs instructions applicable
to Form 10-QSB interim financial information. In the opinion of
management, such consolidated financial statements include all
adjustments, consisting of normal recurring adjustments, necessary to
present fairly the financial position, results of operations and cash
flows as of June 30, 2003 and for all periods presented. The results of
operations presented in the accompanying consolidated financial statements
are not necessarily indicative of the results expected for the full fiscal
year or for any future period.

The accompanying consolidated financial statements do not include all of
the information and disclosures required by accounting principles
generally accepted in the United States of America for annual financial
statements. Such interim consolidated financial statements should be read
in conjunction with Simexs 2002 and 2001 financial statements and notes
thereto included in Simexs annual report on Form 10-KSB for the year
ended December 31, 2002.

Nature of Operations

Probity is engaged in acquiring and installing video security monitoring
devices and the associated data storage equipment used with the monitoring
devices. As of June 30, 2003, Probity operated out of an office warehouse
located in Buford, Georgia, a northern suburb of Atlanta, Georgia.

Use of Estimates in Financial Statements

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

Revenue Recognition

The operations of Probity consist of two functions. Kyros operates as a
supplier of video security monitoring equipment and sells to dealers and
distributors. Revenue is recognized when shipments to customers are
shipped and billed. the second operation Remote Business Management,
designs and installs security systems. Billing is done on completion of
the installation services. Cost of revenues consists of the costs of
video security monitoring equipment and the associated materials required
to complete installations.

9



---



##### 



In December 1999, the SEC staff released Staff Accounting Bulletin No.
101, Revenue Recognition in Financial Statements( SAB 101), as amended.
SAB 101 provides interpretive guidance on the recognition, presentation
and disclosure of revenue in financial statements. The Company believes
its revenue recognition policies comply with SAB 101.

Fair Value of Financial Instruments

The carrying amounts of cash and cash equivalents, accounts payable and
accrued liabilities approximate fair value because of the short-term
nature of these accounts.

Net Loss Per Share

The net loss per share computations for 2003 and 2002 reflect the
36,185,916 shares of outstanding common stock of Simex (see Note 1).

Basic net loss per share is computed by dividing the net loss for the
period by the weighted-average number of common shares outstanding for the
period. Diluted net loss per share is computed by dividing the net loss
for the period by the weighted average number of common and potential
common shares outstanding during the period, if the effect of the
potential common shares is dilutive. As a result of the Probitys net
losses, all potentially dilutive securities would be antidilutive and are
excluded from the computation of diluted loss per share.

Regulatory Impact

The current and future demand for the Probitys services is not dependent
upon federal, state, local and foreign governments.

Recently Issued Accounting Standards

Statement of Financial Accounting Standards No. 150, Accounting for
Certain Financial Instruments with Characteristics of both Debt and
Equity(SFAS 150), was issued in May 2003. SFAS 150 establishes standards
for how an issuer classifies and measures certain financial instruments
with characteristics of both debt and equity. SFAS 150 does not apply to
features that are embedded in a financial instrument that is not a
derivative in its entirety. SFAS 150 is effective for
financial instruments entered into or modified after May 31, 2003 and
otherwise is effective at the beginning of the first interim period
subsequent to June 15, 2003. The Company has not yet determined whether
the adoption of SFAS 150 will have a material impact on its consolidated
financial statements.

Statement of Financial Accounting Standards No. 149, Amendment of
Statement 133 on Derivative Instruments and Hedging Activities(SFAS 149),was issued in April

10



---



##### 



2003. SFAS 149 amends and clarifies financial
accounting and reporting for derivative instruments, including certain
derivative instruments imbedded in other contracts. SFAS 149 is generally
effective for contracts entered into or modified after June 30, 2003. The
Company has not yet determined whether the adoption of SFAS 149 will have
a material impact on its consolidated financial statements.

Statement of Financial Accounting Standards No. 148, Accounting for
Stock-Based Compensation  Transition and Disclosure(SFAS 148) ,was
issued in December 2002. SFAS 148 amends SFAS 123, Accounting for
Stock-Based Compensation(SFAS 123), to provide alternative methods of
transition for a voluntary change to the fair value based method of
accounting for stock-based employee compensation; it also requires
prominent disclosures in both annual and interim financial statements
about the method of accounting for stock-based compensation and effect of
the method used on reported results. At this time, the Company does not
expect SFAS 148 to have a significant impact on its consolidated financial
statements; however, if the Company elects to grant options under Simexs
stock option plan in the future or otherwise becomes subject to the
provisions of SFAS 123, it will reevaluate the impact of SFAS 148 at that
time.

Statement of Financial Accounting Standards No. 146, Accounting for Costs
Associated with Exit or Disposal Activities(SFAS 146) ,was issued in
June 2002. SFAS 146 addresses financial accounting and reporting for costs
associated with exit or disposal activities and requires companies to
recognize costs associated with exit or disposal activities when they are
incurred rather than at the date of a commitment to an exit or disposal
plan. SFAS 146 is effective for exit or disposal activities that are
initiated after December 31, 2002. The Company does not expect SFAS 146 to
have a significant impact on its consolidated financial statements.

Statement of Financial Accounting Standards No. 145, Rescission of FASB
Statements No. 4, 44, and 64, Amendment of FASB Statement No. 13, and
Technical Correction(SFAS 145) ,was issued in April 2002. SFAS 145
provides for the rescission of several previously issued accounting
standards, new accounting guidance for the accounting for certain lease
modifications and various technical corrections that are not substantive
in nature to existing pronouncements. The Company does not expect SFAS 145
to have a significant impact on its consolidated financial statements.

In November 2002, the Financial Accounting Standards Board (FASB) issued
Interpretation No. 45, Guarantors Accounting and Disclosure Requirements
for Guarantees, Including Indirect Guarantees of Indebtedness of Others(FIN
45). FIN 45 elaborates on the disclosures to be made by a guarantor in its
interim and annual financial statements about its obligations under
certain guarantees that it has issued. FIN 45 also clarifies that a
guarantor is required to recognize, at the inception of a guarantee, a
liability for the fair value of the obligation undertaken in issuing the
guarantee. The disclosure requirements in FIN 45 are currently effective;
the initial recognition and measurement provisions are applicable on a
prospective basis to guarantees issued or modified after December 31,
2002. The Company does not expect FIN 45 to have a significant impact on
its consolidated financial statements.

11



---



##### 



In January 2003, the FASB issued Interpretation No. 46, Consolidation of
Variable Interest Entities(FIN 46). FIN 46 addresses consolidation by
business enterprises of variable interest entities, as defined in FIN 46;
it applies immediately to variable interest entities created, or in which
an enterprise obtains an interest, after January 31, 2003 and in the first
fiscal year or interim period beginning after June 15, 2003 for variable
interest entities in which an enterprise acquired an interest prior to
February 1, 2003. The Company does not expect FIN 46 to have a significant
impact on its consolidated financial statements.

Note 3: Factors Affecting Operations

The Company is a start-up enterprise with limited operations and has not
generated significant amounts of revenue. The Company incurred a net loss
of $(313,849), in the six month period ended June 30, 2003. Working
capital and stockholders equity as of June 30, 2003 was $1,881,009 and
$2,306,496, respectively. The future success of the Company is contingent
upon, among other things, the ability to: achieve and maintain
satisfactory levels of profitable operations; obtain and maintain adequate
levels of debt and/or equity financing; and provide sufficient cash from
operations to meet current and future obligations.

The Company has prepared financial forecasts which indicate that, based on
its current business plans and strategies, it anticipates that it will
achieve profitable operations and generate positive cash flows in the next
few years. However, the ultimate ability of the Company to achieve these
forecasts and to meet the objectives discussed in the preceding paragraph
cannot be determined at this time. The accompanying consolidated financial
statements do not include any adjustments that might result from the
outcome of these uncertainties.

Note 4: Equity

Preferred Stock

Simex was authorized to issue 928,006 shares of $.001 par value Series A
Convertible Preferred Stock. The Series A has no voting rights, but can
pay a 2.5% annual dividend, when and if declared by the Companys Board of
Directors. On May 20, 2003, all 928,006 shares of the Series A were
issued in exchange for
cancellation of approximately $1,800,000 in accounts payable owed to a
Company stockholder, Wooju, by Probitys wholly owned subsidiary, Kyros.
Under the terms of the Series A Certificate of Designations, these
preferred shares could be converted to the Companys common shares at a
ratio of 10 Company common shares for each share of Series A any time
after May 1, 2005.

Simex was authorized to issue 1,496,042 shares of $.001 par value Series B
Convertible Preferred Stock. The Series B holders vote with common
stockholders as if the Series B shares were converted to common at 10
shares of common for each share of preferred, but the Series B does not
pay dividends. Under the terms of the Series B

12



---



##### 



Certificate of
Designations, these preferred shares would be mandatorily converted to the
Companys common shares at a maximum ratio of 6.65 shares of common for
each share of preferred, after May 1, 2005. All 1,496,042 shares were
issued in conjunction with the Probity acquisition on May 20, 2003.

Common Stock

Simex is authorized to issue 50,000,000 shares of $0.001 par value common
stock, of which 36,185,916 shares were issued and outstanding as of June
30, 2003. As of March 31, 2003, Simex had 16,554,908 shares of common
stock issued and outstanding, as reported in its quarterly report on Form
10-QSB for the quarter ended March 31, 2003. Effective as of May 20, 2003,
the closing date of the reverse acquisition (see Note 1), Simex issued
19,631,008 shares, at a cost of approximately $20,000, to stockholders and
affiliates of Probity (see Note 1). As a result, Simex had 36,185,916
shares of common stock issued and outstanding as of June 30, 2003.

Note 5: Income Taxes

As of December 31, 2002, Probity had net operating loss (NOL)
carryforwards that may be used to offset future taxable income. The NOL
carryforwards will expire at various dates through 2022. Due to the
change in control the use of Simex NOL carryforwards will be limited each
year and will expire at various dates through 2022.

As a result of the NOL carryforwards, the Company has recorded no
provision or benefit for income taxes in the accompanying consolidated
financial statements. A valuation allowance has been recorded to offset
the recognition of any deferred tax assets due to the uncertainty of
future realization.




ITEM 2                    Managements Discussion and Analysis or Plan of Operation

The following discussion contains forward-looking statements that
involve risks and uncertainties. Our actual results could differ
materially from those anticipated in these forward-looking statements as a
result of many factors. The
following discussion should be read together with our financial
statements and the notes to those financial statements included elsewhere
in this annual report.

Except for historical information, the materials contained in this
Managements Discussion and Analysis are forward-looking (within the
meaning of Section 27A of the Securities Act of 1933 and Section 21E of
the Securities Exchange Act of 1934) and involve a number of risks and
uncertainties. These include the Companys historical losses, the need to
manage its growth, general economic downturns, intense competition in the
emissions testing industry, seasonality of quarterly results, and other
risks detailed from time to time in the Companys filings with the
Securities and Exchange Commission. Although forward-looking statements in
this Quarterly Report reflect the good faith judgment of management, such
statements can only be based on facts and factors currently known by the
Company. Consequently, forward-looking

13



---



##### 



statements are inherently subject
to risks and uncertainties, actual results and outcomes may differ
materially from the results and outcomes discussed in the forward-looking
statements. Readers are urged to carefully review and consider the various
disclosures made by the Company in this Quarterly Report, as an attempt to
advise interested parties of the risks and factors that may affect the
Companys business, financial condition, and results of operations and
prospects.

The following analysis compares the results of operations for the
three-month and six-month periods ended June 30, 2003 to the comparable
periods ended June 30, 2002.

Revenues and Expenses

Revenues during the three months ended June 30, 2003 were $356,827.
During the three months ended June 30, 2002, revenues were $172,071. The
107% increase in revenues was due primarily to 2003 revenues of Kyros,
which did not commence operations until August of 2002. Revenues during
the six months ended June 30, 2003 were $672,989. During the six months
ended June 30, 2002, revenues were $345,885. The 95% increase in revenues
was due primarily to 2003 revenues of Kyros, which did not commence
operations until August of 2002.

Cost of revenues during the three months ended June 30, 2003 were
$176,379 or 49% of revenues, compared to $110,121 or 64% of revenues for
the three months ended June 30, 2002. Cost of revenues, which consists of
costs of video security monitoring equipment and the associated materials
required to complete installations, decreased as a percent of revenues
from 2002 to 2003 primarily due to more favorable equipment pricing
resulting from the Companys business relationship with its shareholder,
Wooju. Cost of revenues during the six months ended June 30, 2003 were
$432,464 or 64% of revenues, compared to $218,735 or 63% of revenues for
the six months ended June 30, 2002.

Selling, general and administrative expenses during the three months
ended June 30, 2003 were $288,106. During the three months ended June 30,
2002, selling, general and administrative expenses were $146,361. The 97%
increase in selling, general and administrative expenses was due primarily
to 2003 expenses of Kyros, which did not commence operations until August
of 2002. Selling, general and administrative expenses during the six
months ended June 30, 2003 were $538,855. During the six months ended June
30, 2002, selling, general and administrative expenses were $321,203. The
68% increase in selling, general and administrative expenses was due
primarily to 2003 expenses of Kyros, which did not commence operations
until August of 2002.

Interest expense during the three months ended June 30, 2003 was
$8,300. During the three months ended June 30, 2002, interest expense was
$1,519. The $6,781 increase in interest expense was due primarily to 2003
interest expenses of Kyros, which did not commence operations until August
of 2002. Interest expense during the six months ended June 30, 2003 was
$15,519. During the six months ended

14



---



##### 



June 30, 2002, interest expense was
$3,489. The $12,030 increase in interest expense was due primarily to 2003
interest expenses of Kyros, which did not commence operations until August
of 2002.

Loss from Operations

During the three months ended June 30, 2003, the Company had a loss
from operations of $(115,958) or $(0.00) per weighted-average share.
During the three months ended June 30, 2002, the Company reported a loss
from operations of $(85,930) or $(0.00) per weighted-average share. The
$30,028 increase in loss from operations for the three months ended June
30, 2003, was primarily due to 2003 losses of Kyros, which did not
commence operations until August of 2002.

During the six months ended June 30, 2003, the Company had a loss
from operations of $(313,849) or $(0.01) per weighted-average share.
During the six months ended June 30, 2002, the Company reported a loss
from operations of $(197,542) or $(0.01) per weighted-average share. The
$116,307 increase in loss from operations for the six months ended June
30, 2003, was primarily due to 2003 losses of Kyros, which did not
commence operations until August of 2002.

Liquidity and Capital Resources

During the six months ended June 30, 2003, the Company experienced
negative operating cash flows of $(2,436,864). Negative operating cash
flows in the six months ended June 30, 2003 were primarily due to an
increase of $(1,703,179) in inventory, operating losses of $(313,849) and
a decrease in accounts payable and accrued liabilities of $(292,042) .
During the six months ended June 30, 2002, the Company experienced
negative operating cash flows of $(150,611). Negative operating cash flows
in the six months ended June 30, 2002 were primarily created by an
increase in inventory of $(262,679) and a net loss from operations of
$(197,542), partially offset by an increase of $310,314 in accounts
payable and accrued expenses.

Net cash provided by investing activities was $150,839 for the six
months ended June 30, 2003 resulted from cash of $213,432 acquired in the
reverse acquisition from Simex offset by purchases of $(62,593) for
property and equipment. Net cash used in investing activities was
$(4,559) for the six-month period ended June 30, 2002 was for purchases of
property and equipment.

Net cash provided by financing activities was $2,145,236 and
$200,000, respectively, for the six-month periods ended June 30, 2003 and
2002. The net cash provided for the six months ended June 30, 2003
resulted primarily from; the exchange of a $1,772,309 accounts payable to
a Company stockholder for 928,006 shares of the Companys Series A
Convertible Preferred Stock and the conversion of $398,605 notes payable
to Simex, that existed prior to the May 20, 2003 acquisition of Probity,
to additional paid in capital effective on the May 20, 2003 date of the
acquisition of Probity.

15



---



##### 



The Company is not generating sufficient cash flow from operations to
fund growth as it continues to increase its business activities. Going
forward the Company will seek financing sources or raise capital through
equity transactions.

As a publicly traded company subject to ongoing reporting
requirements with the Securities and Exchange Commission (SEC), the
Company will continue to incur significant expenses to maintain current
status with the SEC. These expenses are likely to increase in coming
periods based on more stringent reporting requirements and public
oversight initiatives that have been or are being adopted by the SEC in
response to corporate governance concerns and recent corporate scandals
and abuses. Audit and professional fees will increase as a result of these
changes and the increases will impact the profitability of the company in
future periods.

Critical Accounting Policies

The discussion and analysis of the Companys financial condition and
results of operations are based upon its consolidated financial
statements, which have been prepared in accordance with accounting
principles generally accepted in the United States. The preparation of
these financial statements requires the Company to make estimates and
judgments that affect the reported amounts of assets, liabilities,
revenues and expenses. In consultation with its Board of Directors, the
Company has identified no accounting policies that it believes are key to
an understanding of its financial statements.




ITEM 3                    Controls and Procedures

The Companys Chief Executive Officer and Chief Financial Officer (or
those persons performing similar functions), after evaluating the
effectiveness of the
Companys disclosure controls and procedures (as defined in Rules
13a-14(c) and 15d-14(c) under the Securities Exchange Act of 1934, as
amended) as of a date within 90 days of the filing of this quarterly
report (the Evaluation Date), have concluded that, as of the Evaluation
Date, the Companys disclosure controls and procedures were effective to
ensure the timely collection, evaluation and disclosure of information
relating to the Company that would potentially be subject to disclosure
under the Securities Exchange Act of 1934, as amended, and the rules and
regulations promulgated thereunder. There were no significant changes in
the Companys internal controls or in other factors that could
significantly affect the internal controls subsequent to the Evaluation
Date.

16



---



##### 






PART II




ITEM 1                    Legal Proceedings

In the ordinary course of business, the Company is from time to time
involved in various pending or threatened legal actions. The litigation
process is inherently uncertain and it is possible that the resolution of
such matters might have a material adverse effect upon our financial
condition and/or results of operations. However, in the opinion of our
management, matters currently pending or threatened against us are not
expected to have a material adverse effect on our financial position or
results of operations.




ITEM 2                    Changes in Securities and Use of Proceeds

On May 20, 2003, Simex issued 19,631,008 shares of common stock, to three
accredited investors. On May 20, 2003, Simex issued 1,496,042 shares of
its Series B Convertible Preferred Stock, to two of the same three
accredited investors. The investors exchanged their interests in Probity,
Inc., representing in the aggregate 100% of the issued and outstanding
stock of Probity, Inc., for the common and preferred shares of Simex. The
issuances were exempt from registration pursuant to Section 4(2) of the
Act and the shares have been marked restricted.

On May 20, 2003, Simex issued 928,006 of its Series A Convertible
Preferred Stock, to one of the three accredited investors who had
exchanged their interest in Probity, Inc.. The Series A shares were
issued in exchange for the cancellation of approximately $1,800,000 of
indebtness owed to the investor by Kyros. The issuances were exempt from
registration pursuant to Section 4(2) of the Act and the shares have been
marked restricted.




ITEM 3                    Defaults Upon Senior Securities

There have been no events that are required to be reported under this
Item.




ITEM 4                    Submission of Matters to a Vote of Security Holders

No matters were submitted to a vote of the security holders during
the quarter.




ITEM 5                    Other Information

On August 4, 2003 the Companys Board of Directors voted to allow an
early conversion of the 928,006 shares of Series A Convertible Preferred
Stock which had been issued in the May 20, 2003 acquisition of Probity and
accordingly these preferred shares were converted to 9,280,060 shares of
the Companys common
stock effective on that date. This conversion increased the
Companys outstanding shares of common stock to 45,465,976 as of August 4,
2003.

17



---



##### 



On September 18, 2003, Simex executed a Mutual Rescission Agreement
(the Agreement) whereby it agreed with the Probity Shareholders to
mutually rescind the May 20, 2003 acquisition of Probity and return all
parties to there respective positions as they existed prior to May 20,
2003. As a result Simex exchanged 100% of its ownership interest in
Probity and Probitys wholly owned subsidiaries Kyros and RBM to the
Probity Shareholders for; promissory notes totaling approximately
$505,000, 28,911,068 shares of the Companys common stock and 1,496,042
shares of the Companys Series B Convertible Preferred Stock. As of
September 18, 2003, the Company has received a $200,000 payment on the
promissory notes and had total common shares outstanding of 16,554,908,
after the September 18, 2003 rescission.

In addition, Gary Todd Redding, L. Scott Demerau and Kyu Hung Jang
who were elected to the Board of Directors of the Company upon completion
of the share exchange, are no longer directors of the Company as a result
of the rescission.

In addition on September 18, 2003, the Company and Probity entered
into an Exchange Agreement, dated September 15, 2003, whereby the Company
will receive one hundred percent (100%) of the membership interests of
Remote Business Management, LLC, a wholly owned subsidiary of Probity in
exchange for 16,000,000 shares of common stock of the Company. The
closing of the Exchange Agreement with Probity is subject to certain
conditions contained therein. It is expected that, after the closing of
the Exchange Agreement, the Company will add one person to its Board of
Directors.

The Company did not file this June 30, 2003 Form 10-QSB by the
required extended filing date of August 19, 2003. As a result, the
Company became delinquent, and had 30 days to file its Form 10-QSB for the
period ended June 30, 2003 or the Company would be ineligible for
quotation on the over-the-counter bulletin board.




ITEM 6                    Exhibits and Reports on Form 8-K

(a)                Exhibits

2.1 (1)
    
    Acquisition Agreement dated May 20, 2003 with Probity, Inc.31.1
    
    Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer31.2
    
    Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer32.1
    
    Chief Executive Officer Certification Pursuant to 18 USC, Section
1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002.


18



---



##### 



32.2
    
    Chief Financial Officer Certification Pursuant to 18 USC, Section
1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002.


(1)
    
    Incorporated by reference from our Current Report on Form
8-K dated May 20, 2003 and filed with the Commission on June 4,
2003.


(b)        Reports on Form 8-K

On May 21, 2003, we filed a Current Report on Form 8-K describing our
acquisition of Probity, Inc.

On June 4, 2003, we filed a Current Report on Form 8-K describing our
acquisition of Probity, Inc. and providing exhibits to the acquisition.




SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.

Dated: September 23, 2003
    
    Simex Technologies, Inc./s/
    
    Kjell JagelidBy:
    
    Kjell Jagelid
Chief Executive Officer, President and
Acting Chief Financial Officer


19